Exhibit 10.2

SERVICES AND SECONDMENT AGREEMENT

by and between

WESTLAKE CHEMICAL OPCO LP

and

WESTLAKE MANAGEMENT SERVICES, INC.

and

WESTLAKE VINYLS, INC.

and

WPT LLC

and

WESTLAKE PETROCHEMICALS LLC

August 4, 2014

 

 

 

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TABLE OF CONTENTS

 

         PAGE    

ARTICLE I

DEFINITIONS, CONSTRUCTION

   1.1  

Definitions

     1    1.2  

Construction

     6     

ARTICLE II

SHARED SERVICES

   2.1  

Engagement of the Westlake Parties

     6    2.2  

Common Facilities Services

     6    2.3  

Utility Services

     8    2.4  

Permits

     9    2.5  

Consultations

     10    2.6  

Relationship of the Parties

     10     

ARTICLE III

OPERATING SERVICES

   3.1  

Seconded Employees of the Westlake Parties

     10    3.2  

Owner’s Rights

     11    3.3  

Consultations

     11    3.4  

Title, Documents and Data

     11     

ARTICLE IV

WESTLAKE PROVIDED UTILITIES

   4.1  

Engagement of the Westlake Parties

     11    4.2  

High Pressure Steam

     11    4.3  

Other Steam

     12    4.4  

Consultations

     12     

ARTICLE V

OWNER PROVIDED SERVICES

   5.1  

Engagement of Owner

     12    5.2  

Owner Provided Services

     12    5.3  

Consultations

     13    5.4  

Relationship of the Parties

     13     

ARTICLE VI

ADDITIONAL SERVICES

   6.1  

Additional Westlake Provided Services

     13    6.2  

Additional Seconded Employees

     13    6.3  

Additional Westlake Provided Utilities

     13    6.4  

Additional Owner Provided Services

     14   

 

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ARTICLE VII

AUTHORIZED PERSONS AND EMPLOYEES

  

  

7.1  

Delegation

     14    7.2  

Personnel and Secondment

     14    ARTICLE VIII

BUDGETS, AUDITS AND ACCOUNTING

  

  

8.1  

Approved Annual Budgets

     16    8.2  

Unbudgeted Expenditures

     16    8.3  

Accounting, Reimbursement and Fee

     17    8.4  

Reports

     17    8.5  

Audit and Examination

     17    ARTICLE IX

STANDARD OF CARE, NEGATIVE COVENANTS, CONFIDENTIAL INFORMATION AND PROPRIETARY
INVENTIONS

  

     

9.1  

Standard of Care

     17    9.2  

Negative Covenants

     18    9.3  

Proprietary Inventions and Techniques

     18    ARTICLE X

PAYMENT OF COSTS

  

  

10.1  

Payments

     18    10.2  

Reimbursement for Emergencies

     19    ARTICLE XI

TAXES

  

  

11.1  

Embedded Tax Amounts

     20    11.2  

Income Taxes

     20    ARTICLE XII

WARRANTY/CLAIMS

  

  

12.1  

Warranties

     21    12.2  

Claims

     21    ARTICLE XIII

TERMINATION

  

  

13.1  

Term

     21    13.2  

Termination

     21    13.3  

Self Help

     22    13.4  

General Obligations

     22   

 

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ARTICLE XIV

ACCESS TO ETHYLENE ASSETS

  

  

ARTICLE XVI

INDEMNIFICATION

  

  

16.1  

By the Westlake Parties

     23    16.2  

By Owner

     23    16.3  

Indemnification Procedures

     23    ARTICLE XVII

FORCE MAJEURE

  

  

17.1  

Force Majeure Event

     24    17.2  

Force Majeure Notice

     24    ARTICLE XVIII

OTHER PROVISIONS

  

  

18.1  

Assignment

     24    18.2  

Notices

     25    18.3  

Severability

     25    18.4  

Entire Agreement

     26    18.5  

Amendment or Modification

     26    18.6  

No Waiver

     26    18.7  

Safety Regulations

     26    18.8  

Relationship of Parties

     26    18.9  

Governing Law

     26    18.10  

Dispute Resolution

     26    18.11  

Waiver of Consequential Damages

     27    18.12  

Further Assurances

     27    18.13  

Set Off

     27    18.14  

Counterparts

     27    18.15  

Rights of Third Parties

     27   

 

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SCHEDULES

 

SCHEDULE 1  

Ethylene Assets

SCHEDULE 2  

Common Facilities

SCHEDULE 3  

Common Facilities Services

SCHEDULE 4  

Utility Services

SCHEDULE 5  

Operating Services

SCHEDULE 6  

Owner Provided Services

SCHEDULE 7  

Accounting Procedures

 

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SERVICES AND SECONDMENT AGREEMENT

THIS AGREEMENT is made effective as of August 4, 2014, by and between Westlake
Chemical OpCo LP, a Delaware limited partnership (“Owner”), and Westlake
Management Services, Inc., a Delaware corporation (“WMSI”), Westlake Vinyls,
Inc., a Delaware corporation (“Vinyls”), WPT LLC, a Delaware limited liability
company (“WPT”) and Westlake Petrochemicals LLC, a Delaware limited liability
company (“Petrochemicals”) (collectively, the “Westlake Parties”). Owner and the
Westlake Parties are sometimes referred to herein separately as “Party” or
collectively as the “Parties”.

RECITALS

Owner is owner of the Ethylene Assets and Westlake Chemical Corporation
(“Westlake Chemical”) and the Westlake Parties are the owners of the adjacent
Westlake Facilities and the Common Facilities. The Ethylene Assets are currently
connected to and have been operated on an integrated basis with the Westlake
Facilities.

In order to continue to operate the Ethylene Assets and the Westlake Facilities
in an efficient manner, Owner and the Westlake Parties have agreed to common use
of the Common Facilities and Utility Services. The Westlake Parties have agreed
to provide certain shared services and Seconded Employees who Owner will use in
the operation and maintenance of the Ethylene Assets, and Owner has agreed to
provide certain purge gas processing services and certain other services
relating to the operation of the Westlake Facilities, in accordance with the
terms of this Agreement.

Furthermore, the Parties and certain of their Affiliates have agreed to provide
each other with certain utilities for use in their respective production
processes.

Concurrent with the execution of this Agreement, Owner and the Westlake Parties
or certain of their Affiliates will enter into the Related Agreements.

AGREEMENT

NOW, THEREFORE, Owner and the Westlake Parties hereby agree as follows:

ARTICLE I

DEFINITIONS, CONSTRUCTION

1.1 Definitions. In this Agreement, capitalized terms used, but not otherwise
defined, shall have the respective meanings given to such terms set forth below:

Accounting Procedures means the terms and provisions set forth in Schedule 7.

Affiliate means (i) with respect to the Westlake Parties, any other Person that
directly or indirectly through one or more intermediaries is controlled by
Westlake Chemical, excluding GP and any other Person that directly or indirectly
through one or more intermediaries is controlled by GP (including Owner); and
(ii) with respect to Owner, GP and any other Person that directly or indirectly
through one or more intermediaries is controlled by GP. As used herein, the term
“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.

Applicable Law means all statutes, regulations, rules, ordinances, codes,
licenses, permits, orders, approvals and rules of common law of each
Governmental Authority having jurisdiction over the Parties, including
Environmental Laws, all health, building, fire, safety and other codes,
ordinances and requirements and all applicable standards of the National Board
of Fire Underwriters, in each case, as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree, judgment or settlement; in each case, as applicable to
Owner, the Westlake Parties, the Ethylene Assets or the Westlake Facilities.

 

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Agreement means this Services and Secondment Agreement, as the same may be
amended.

Approved Annual Budget shall mean the budget so labeled and already approved by
Owner and the Westlake Parties for the period commencing on the date of this
Agreement and ending December 31, 2014 and the budget for any applicable
succeeding Fiscal Year proposed by the Westlake Parties, subject to Section 8.1.

Bankruptcy Proceeding means with respect to a Party or entity, such Party or
entity (i) is dissolved (other than pursuant to a consolidation, amalgamation or
merger); (ii) becomes insolvent or is unable to pay its debts or fails or admits
in writing its inability generally to pay its debts as they become due;
(iii) makes a general assignment, arrangement or composition with or for the
benefit of its creditors; (iv) institutes a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors’ rights; (v) has instituted against
it a proceeding seeking a judgment of insolvency or bankruptcy or any other
relief under any bankruptcy or insolvency law or other similar law affecting
creditors’ rights, or a petition is presented for its winding up or liquidation,
and any such proceeding or petition is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter; (vi) has a resolution passed
for its winding-up, official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (vii) seeks or becomes subject to the
appointment of an administrator, provisional liquidator, conservator, receiver,
trustee, custodian or other similar official for it or for all or substantially
all its assets; (viii) has a secured party take possession of all or
substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced, or sued on or against all
or substantially all its assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed or restrained, in each
case within 30 days thereafter; (ix) causes or is subject to any event with
respect to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (i) to
(viii) (inclusive); or (x) takes any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the foregoing acts.

Base Rate shall mean, interest compounded on a Monthly basis, at the rate per
annum equal to the one-month term, London Interbank Offered Rate (LIBOR rate)
for U.S. dollar deposits, as published by The Wall Street Journal or if not
published, then by the Financial Times of London.

Business Day means any day other than a Saturday, a Sunday, or a holiday on
which national banking associations in the State of Texas are closed.

Calvert City Assets means an ethylene plant in Calvert City, Kentucky, owned by
Owner and more fully described on Schedule 1.

Capital Expenditures means all Expenditures that are capitalized by the Westlake
Parties or Owner, as applicable in accordance with GAAP and the relevant Party’s
accounting capitalization procedures, in each case as consistently applied and
as in effect from time to time.

Claims shall have the meaning set forth in Section 15.1.

Code means the Internal Revenue Code of 1986, as amended.

Common Facilities means certain facilities owned by the Westlake Parties and
their Affiliates in Calvert City, Kentucky and Lake Charles, Louisiana, and
described on Schedule 2, and any other facilities owned by the Westlake Parties
and their Affiliates as may be required for the performance of the Shared
Services.

Common Facilities Services means those services described in Section 2.2 and
Schedule 3.

Common Units means common units representing limited partner interests in the
MLP.

 

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Conflicts Committee shall have the meaning ascribed to such term in the MLP’s
agreement of limited partnership, as amended from time to time.

Default Rate shall mean the Base Rate plus two percentage points per annum,
applicable on the first Business Day prior to the due date of payment and
thereafter on the first Business Day of each succeeding Month; provided,
however, that the Default Rate shall never exceed the maximum rate permitted by
Applicable Law.

Demineralized Water means demineralized water produced by the Lake Charles
Assets.

Dispute shall have the meaning set out in Section 17.10(a).

Emergency means the events described in Section 10.2(b).

Environmental Law or Environmental Laws means any and all Applicable Laws
pertaining to (i) pollution, protection of the environment (including natural
resources), or workplace health and safety, (ii) any Release, threatened Release
or exposure of any Person or property to Hazardous Substances, or (iii) the
generation, manufacture, processing, distribution, use, treatment, storage,
disposal, transport, arrangement for disposal or transport, or handling of
Hazardous Substances. Without limiting the foregoing, Environmental Laws include
including the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. § 9601 et seq.; the Resource Conservation and Recovery Act, 42
U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251
et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. § 5101 et seq.; the Toxic Substances Control Act,
15 U.S.C. §§ 2601 et seq.; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq.;
the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; the Occupational
Safety and Health Act, 29 U.S.C. § 651 et seq.; and all similar Applicable Laws
of any Governmental Authority having jurisdiction over the Ethylene Assets or
the Westlake Facilities or their respective operations, and all amendments to
such Applicable Laws and all regulations implementing any of the foregoing.

Ethylene Assets means the Calvert City Assets, the Lake Charles Assets and the
Ethylene Pipeline, collectively.

Ethylene Pipeline means an ethylene pipeline from Mont Belvieu, Texas to
Longview, Texas, owned by Owner.

Ethylene Sales Agreement means the Ethylene Sales Agreement between Owner and
certain Affiliates of Westlake Chemical, dated of even date herewith, as the
same may be amended.

Expenditure means a cost, expense or expenditure.

Feedstock Supply Agreement means the Feedstock Supply Agreement between Owner
and Petrochemicals, dated of even date herewith, as the same may be amended.

Fiscal Year means each 12 month period beginning on the first day of January of
a year and ending on December 31 of the same year; provided, the first Fiscal
Year hereunder shall begin on the date of this Agreement and shall end on
December 31, 2014; and further provided, the last Fiscal Year shall end at the
expiration or termination of this Agreement.

First Approved Annual Budget shall have the meaning set forth in Section 8.1(a).

Force Majeure Event means the following events, conditions and circumstances,
and all similar events, conditions and circumstances of the kind enumerated
herein, for which a Party is rendered, wholly or substantially, unable to
perform its obligations hereunder, except in each case, (i) to the extent any of
the following is within the reasonable control of, could be sufficiently
alleviated by the reasonable efforts of, or is caused by the gross negligence,
breach or default of, the Party claiming the Force Majeure, and provided that,
the Party claiming the Force Majeure takes all reasonable efforts to mitigate
the effects of the Force Majeure and (ii) that changes in costs

 

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of goods and services (including amounts payable under the Related Agreements),
changes in costs of regulatory or other compliance with Applicable Law, and the
lack of finances do not constitute Force Majeure:

(a) any act of God or the public enemy, fire, explosion, perils of the sea,
flood, unusually bad weather (including hurricanes, tornadoes and ice storms),
drought, war, terrorism, national emergency, riot, sabotage or embargo, and any
interruption of or delay in transportation, electrical or other utility shortage
or blackout, or any inadequacy or shortage or failure or breakdown of supply of
raw materials or equipment or mechanical breakdown or other production shutdown
or accident to machinery;

(b) any Labor Difficulties from whatever cause arising and whether or not the
demands of the employees involved are within the power of the claiming Party to
concede, including Labor Difficulties affecting transportation facilities, raw
material supplies or services to the Westlake Facilities, Ethylene Assets or
Common Facilities, which shall constitute events of Force Majeure to the extent
that such Labor Difficulties affect a Party’s ability to perform its obligations
hereunder;

(c) compliance with any order, action, direction or request of any Governmental
Authority or with any Applicable Law not brought about by any action or omission
on the part of the Party claiming the Force Majeure.

GAAP means United States generally accepted accounting principles as in effect
from time to time.

Governmental Authority means any governmental authority, agency, department,
commission, bureau, board, instrumentality, court or quasi-governmental
authority of any foreign nation, the United States, or any state that has or
obtains jurisdiction over the matter in question, or any political subdivision
thereof.

GP means Westlake Chemical Partners GP LLC, the general partner of the MLP.

High Pressure Steam means steam described in Schedule 6 under the heading “High
Pressure Steam”, all within the tolerances and in compliance with the
specifications therein contained.

Indemnified Party shall have the meaning set forth in Section 15.3(a).

Indemnifying Party shall have the meaning set forth in Section 15.3(a).

Initial Term shall have the meaning set forth in Section 13.1.

Labor Difficulties means strikes and lockouts, both legal and illegal, and other
forms of organized actions, howsoever called, by labor or other personnel to
stop or significantly reduce or slow down work or production or to withdraw or
withhold labor or services.

Lake Charles Assets means ethylene plants “Petro 1” and “Petro 2” and the
co-products storage and shipping area in Lake Charles, Louisiana, owned by Owner
and more fully described on Schedule 1.

Limited Partner is defined in the Partnership Agreement.

MLP means Westlake Chemical Partners LP.

Month means calendar month.

Monthly Invoice shall have the meaning set forth in Section 10.1(a).

Non-Discriminatory Basis means performing any Service or taking any other action
without a preference or bias which unduly favors the Westlake Facilities or any
part or operation thereof over the Ethylene Assets or any part or operation
thereof or vice versa.

 

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Omnibus Agreement means the Omnibus Agreement between Owner, Westlake Chemical
and certain of its Affiliates, dated of even date herewith, as the same may be
amended.

Operating Expenses means all Expenditures that are treated as operating expenses
in accordance with GAAP and the Westlake Parties’ accounting procedures, in each
case as consistently applied and as in effect from time to time.

Operating Services have the meaning set forth in Section 3.1.

Owner shall have the meaning set forth in the first paragraph.

Owner Group shall have the meaning set forth in Section 15.2.

Owner Indemnified Parties shall have the meaning set forth in Section 15.1.

Owner Provided Services shall have the meaning set forth in Section 5.2.

Partnership Agreement means the First Amended and Restated Agreement of Limited
Partnership of Westlake Chemical Partners LP, dated as of August 4, 2014, to
which reference is hereby made for all purposes of this Agreement. No amendment
or modification to the Partnership Agreement subsequent to the date hereof shall
be given effect for the purposes of this Agreement unless consented to by each
of the Parties to this Agreement.

Party or Parties means any of the entities named in the first paragraph to this
Agreement and any respective successors or permitted assigns in accordance with
the provisions of this Agreement.

Period of Secondment shall have the meaning set forth in Section 7.2(b).

Permit means all permits, licenses, franchises, consents, authorizations,
certifications, exemptions, variances, and approvals, as necessary under
Applicable Laws for operating the Ethylene Assets.

Person means any natural person, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
joint stock company or Governmental Authority.

Petrochemicals has the meaning set forth in the first paragraph.

Purge Gas means such purge gas from the LDPE Plant, located near the Lake
Charles Assets, and owned by Westlake Polymers LLC.

Related Agreements means the Site Lease Agreements, the Omnibus Agreement, the
Ethylene Sales Agreement and the Feedstock Supply Agreement.

Renewal Term shall have the meaning set forth in Section 13.1.

Seconded Employee(s) shall have the meaning set forth in Section 7.2(b).

Services means the Operating Services, the Shared Services, the Westlake
Provided Utilities and the Owner Provided Services.

Shared Services shall have the meaning set forth in Section 2.1.

Site Lease Agreements means, collectively, (i) the Calvert City Site Lease
Agreement between Owner and Vinyls; and (ii) the Lake Charles Site Lease
Agreement between Owner, WPT and Petrochemicals, each dated of even date
herewith, as the same may be amended.

Subject Services shall have the meaning set forth in Section 13.3.

 

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Term shall have the meaning set forth in Section 13.1.

Utility Services has the meaning set forth in Section 2.3(a).

Vinyls shall have the meaning set forth in the first paragraph.

Westlake Chemical shall have the meaning set forth in the Recitals.

Westlake Facilities means certain facilities all owned by the Westlake Chemical,
the Westlake Parties and their Affiliates in Calvert City, Kentucky and Lake
Charles, Louisiana and other assets and properties near the Ethylene Assets,
other than the Common Facilities.

Westlake Group shall have the meaning set out in Section 15.1.

Westlake Indemnified Parties shall have the meaning set forth in Section 15.2.

Westlake Parties shall have the meaning set forth in the first paragraph.

Westlake Provided Services means the Operating Services and the Shared Services.

Westlake Provided Utilities shall have the meaning set forth in Section 4.1.

WMSI shall have the meaning set forth in the first paragraph.

WPT shall have the meaning set forth in the first paragraph.

1.2 Construction. In construing this Agreement, the following principles shall
be followed: (a) no consideration shall be given to the captions of articles,
sections or subsections; (b) no consideration shall be given to the fact or
presumption that one Party had a greater or lesser hand in drafting this
Agreement; (c) the word “includes” and its syntactic variants means “includes,
but is not limited to” and corresponding syntactic variant expressions; and
(d) the plural shall be deemed to include the singular, and vice versa.

ARTICLE II

SHARED SERVICES

2.1 Engagement of the Westlake Parties. Subject to the terms of this Agreement,
Owner hereby engages the Westlake Parties to perform the Common Facilities
Services (as defined below) and make available the Utility Services (as defined
below) (together, the “Shared Services”). Owner hereby authorizes the Westlake
Parties to perform all acts that are necessary or appropriate in the reasonable
judgment of the Westlake Parties, to perform the Shared Services and the
Westlake Parties hereby accept such engagement and agree to perform all acts
necessary or appropriate in the reasonable judgment of the Westlake Parties, to
perform the Shared Services, all in accordance with the terms and conditions and
subject to the limitations set forth in this Agreement.

2.2 Common Facilities Services.

(a) The Westlake Parties hereby grant Owner full and free access to and use of
the Common Facilities in accordance with the Westlake Parties’ policies,
procedures and requirements and at all times in accordance with the terms of
this Agreement, as necessary or appropriate for Owner to operate the Ethylene
Assets; provided that such access shall not materially and unreasonably
interfere with the operations of the Westlake Facilities; and

 

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(b) The Westlake Parties shall have the responsibility for maintaining the
Common Facilities for use by the Westlake Facilities and the Ethylene Assets,
including, but not limited to, the following services and those listed on
Schedule 3:

(i) issuing and enforcing health, safety and environmental policies, procedures
and requirements and other activities relating to the Common Facilities, and
training employees of the Westlake Parties, Owner, their Affiliates or their
subcontractors with respect thereto;

(ii) training all employees of the Westlake Parties and their Affiliates
employed in connection with the operation and maintenance of the Common
Facilities;

(iii) performing safety reviews associated with the Common Facilities in
accordance with the applicable policies, procedures and requirements;

(iv) taking such actions as they deem necessary to keep the Common Facilities in
sound operating condition, including overseeing site administration and
preparing and maintaining daily operating logs and records regarding the
operation and maintenance of the Common Facilities in accordance with the
policies, procedures and requirements of this Agreement;

(v) providing such information for technical evaluation of the Common Facilities
as may be reasonably requested by Owner subject to the terms and conditions of
this Agreement at Owner’s sole cost and expense;

(vi) carrying out such periodic performance tests of the Common Facilities as
they deem necessary to operate the Common Facilities in accordance with this
Agreement and recommending to Owner any remedial action that the Westlake
Parties consider necessary or prudent to correct any operational deficiencies
revealed by analysis of the test results or otherwise discovered during
operation of the Common Facilities, and, at Owner’s sole cost and expense,
carrying out such additional tests as Owner may reasonably request (provided
that such additional tests do not materially and unreasonably interfere with the
operation by the Westlake Parties of the Westlake Facilities);

(vii) providing such engineering services as they deem necessary for the
operation and maintenance of the Common Facilities in accordance with this
Agreement;

(viii) managing, organizing and supervising any contracted and subcontracted
maintenance, repair and testing services used to carry out scheduled
inspections, periodic overhauls, scheduled and unscheduled maintenance, and any
major breakdown repairs of the Common Facilities;

(ix) advising Owner by telephone (with confirmation in writing) as soon as
practicable of the occurrence of any event or the reasonable probability of
occurrence of any event (including a Force Majeure Event) that could have a
material adverse effect or has had a material adverse effect on the operation
and maintenance of the Common Facilities;

(x) maintaining accounting records regarding the Common Facilities Services in
accordance with this Agreement;

(xi) promptly notifying Owner of all material defects in the Common Facilities;
and

(xii) procuring of all goods and services they deem necessary to maintain the
Common Facilities; and storing all items so procured in accordance with the same
practices and procedures used by the Westlake Parties in connection with the
storage of similar items for the Westlake Facilities.

(c) Owner hereby engages the Westlake Parties to provide the services described
in this Section 2.2(c), including all necessary or desirable services in
connection therewith, for the benefit of the Westlake Facilities and the
Ethylene Assets:

(i) maintaining or causing to be maintained all roads, easements, yards, parking
areas, walkways, environmental compliance equipment and utilities located on or
at the Common Facilities or necessary for access to or for the operation and
maintenance of the Ethylene Assets and the Common Facilities;

 

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(ii) maintaining or causing to be maintained fire protection, health equipment
and safety equipment required in connection with the operation and maintenance
of the Ethylene Assets and the Common Facilities;

(iii) providing or causing to be provided reasonably adequate security,
firefighting, wastewater treatment and emergency response services (including
fire brigade, rescue and hazmat teams) for the Ethylene Assets and the Common
Facilities in accordance with standards established by Applicable Law and not
less than the quality being used in the operation of the Common Facilities and
the Ethylene Assets as of the date of this Agreement, and as otherwise mutually
agreed upon by the Parties;

(iv) providing or causing to be provided transportation, loading and unloading
services (including tank car and barge facilities and repair services) for use
in the movement of such raw materials, process chemicals and other supplies and
fuels as required in connection with the operation of the Ethylene Assets and
the Common Facilities;

(v) providing accounting and human resources services, marketing services and
purchasing of such chemicals and supplies as required in connection with the
operation of the Ethylene Assets and the Common Facilities;

(vi) providing information technology, telephone, office support and other
technology and support services for the Ethylene Assets and the Common
Facilities;

(vii) providing water control management services, quality control and
laboratory services required for the Ethylene Assets and the Common Facilities;

(viii) providing cooling tower services and waste treatment in connection with
the operation of the Ethylene Assets and the Common Facilities; and

(ix) providing housekeeping services for the Ethylene Assets and the Common
Facilities, including HVAC, janitorial services, weed control, and trash pickup,

(subsections (a), (b) and (c), collectively, the “Common Facilities Services”).

2.3 Utility Services.

(a) The Westlake Parties are party to various contracts with utilities and other
parties pursuant to which the Ethylene Assets and the Westlake Facilities
receive electricity, natural gas, nitrogen, water and other utility services
described on Schedule 4 (collectively, the “Utility Services”) necessary to
operate and maintain the Ethylene Assets, the Westlake Facilities and the Common
Facilities. Subject to the terms and provisions of this Agreement, the Westlake
Parties shall use commercially reasonable efforts to make available to Owner
electricity, natural gas, fuel gas, boiler feed water, cooling water, potable
water, steam, process steam and such other services as may be needed to operate
the Ethylene Assets. The quality, standards and specifications for such Utility
Services shall be suitable for the operation of the Common Facilities and the
Ethylene Assets in accordance with standards and quality being used in the
operation of the Common Facilities and the Ethylene Assets as of the date of
this Agreement or as may be reasonably requested by Owner based upon changed
needs. It is understood that the Utility Services are furnished by outside
providers who supply services to the Westlake Facilities and that Owner shares
the expense related to such services in accordance with this Agreement. The
Westlake Parties are not public utilities or common carriers and do not sell,
provide or furnish utility services or utilities, and are not in the business of
selling, providing or furnishing such services or utilities, but rather share
the costs thereof in accordance with this Agreement.

(b) Owner shall provide the Westlake Parties with timely information regarding
any changes in Owner’s requirements for Utility Services and the Westlake
Parties shall consult with Owner and consider Owner’s interest on an equal
footing along with the interests of the Westlake Parties concerning any
negotiations with third parties from whom the Westlake Parties obtain or propose
to obtain Utility Services relating to the Common Facilities or the Ethylene
Assets.

 

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(c) The Westlake Parties shall not enter into contracts with third Persons with
respect to the provision of Utility Services to the Ethylene Assets without the
prior written consent of Owner, which consent shall not be unreasonably
withheld. At the request of Owner, the Westlake Parties shall use commercially
reasonable efforts to (i) add Owner as a party to the Westlake Parties’ utility
contract or (ii) reach a mutually acceptable accommodation with one or more of
the Westlake Parties’ utility providers whereby each Party would be able to
receive utility services on an individual basis.

(d) Notwithstanding anything to the contrary, in the event that the Westlake
Parties’ delivery of electricity, water or other Utility Service to Owner is
challenged before a judicial, regulatory or administrative body and the Westlake
Parties determine, in their sole judgment, that it is likely that such body will
determine that, in connection with such challenge, the Westlake Parties or their
affected Affiliate will be subject to regulation under Applicable Law as a
consequence of such delivery of electricity, water or other Utility Service
(including the regulation or classification of the Westlake Parties or such
Affiliate, as the case may be, as a “utility,” “public utility,” “retail public
utility,” “electric utility,” “retail electric utility,” “common carrier,”
“water and sewer utility” or similar designation), then the Westlake Parties and
Owner will cooperate in an attempt to restructure the provision of such Service
in a manner which will not subject the Westlake Parties to such regulation
(provided that any such restructure does not materially and unreasonably
interfere with the Westlake Parties’ or Owner’s operations or cause significant
net economic detriment to the Westlake Parties or Owner). If such restructuring
efforts are unsuccessful or not reasonably practicable, then the Westlake
Parties shall have the right to require Owner to obtain from a third party such
electricity, water or other Utility Service that would cause the Westlake
Parties to be subject to regulation as a utility, and the Westlake Parties will
cooperate with Owner in connection therewith and shall grant such access rights
or similar rights as may be reasonably necessary for such Utility Service to be
so provided to Owner. In the event that a challenge proceeds despite
restructuring, then the Westlake Parties will provide notice to Owner of any
such challenge and the Westlake Parties and Owner will cooperate to resist the
challenge. The cost of resisting such challenge pursuant to a mutually agreed
upon course of action shall be paid equally by the Westlake Parties and Owner.
Any penalty, fee or fine imposed on the Westlake Parties or their Affiliate, as
a result of the Westlake Parties’ delivery of electricity, water or other
Utility Service to Owner shall be shared pro rata by the Westlake Parties and
Owner in proportion to the consumption of the Utility Service being challenged.
If such challenges and restrictions are removed, pursuant to appeal or
otherwise, so that the Westlake Parties and their Affiliates will not be subject
to such regulation, Owner will resume receipt of the affected Utility Service in
accordance with the terms of this Agreement.

(e) If the Westlake Parties become aware of any planned or actual outage or
involuntary reduction with respect to any of the Utility Services, the Westlake
Parties shall promptly give notice thereof to Owner and the Westlake Parties
shall coordinate such outage or reduction as nearly as reasonably practicable on
a Non Discriminatory Basis so as to minimize adverse impact on each Party’s
respective operations (with the standard being the equitable allocation of such
Utility Services between the Westlake Facilities and the Ethylene Assets).

2.4 Permits.

(a) Subject to section 3.5 of each of the Site Lease Agreements, the Westlake
Parties shall use commercially reasonable efforts to (i) obtain and maintain
with respect to the Ethylene Assets, the Westlake Facilities and the Common
Facilities, all Permits for which Owner is not a necessary and indispensable
party, including with respect to Environmental Law, reasonably necessary in
connection with the ownership or operation thereof, and (ii) use commercially
reasonable efforts to comply with all conditions and requirements imposed by
such Permits, including all sampling, testing and monitoring required by any
Permit or Governmental Authority in connection with any Permit.

(b) Owner shall cooperate in all reasonable respects with the Westlake Parties
in Westlake’s obtaining and maintaining all necessary Permits, including Owner’s
signing, submitting and prosecuting all applications or submissions for Permits
with respect to the Ethylene Assets for which Owner is a necessary and
indispensable party and taking every other action reasonably required of Owner
to enable the Westlake Parties to perform their obligations under
Section 2.4(a). Owner shall notify the Westlake Parties promptly of any written
notification that

 

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Owner receives of any investigation, proceeding or other action commenced by any
Governmental Authority relating to any such Permit or Applicable Law with
respect to the Ethylene Assets. Owner shall promptly provide the Westlake
Parties with copies of any and all written notices or other communications
received by Owner from any Government Authority with respect to the Ethylene
Assets and, at the reasonable request of the Westlake Parties, any other
information or document that is within Owner’s possession relating to such
Ethylene Asset Permits or any Westlake obligations thereunder.

2.5 Consultations.

(a) The Westlake Parties and Owner agree to meet for the purpose of coordinating
outages or involuntary reductions in the availability of the Common Facilities
on a Non-Discriminatory Basis so as to minimize adverse impact on each Party’s
respective operations (with the standard being the equitable allocation of such
services between the Westlake Facilities and the Ethylene Assets). The Westlake
Parties shall provide notice of any outages or reductions in availability of
Common Facilities to Owner promptly after becoming aware of any such outage or
reduction. The Parties shall commit to keep each other timely informed about
planned turnarounds, shutdowns, major technical projects, capital projects,
significant operational events and other major events that are relevant to the
safe and efficient operation of the Ethylene Assets and the performance of
Owner’s obligations under this Agreement.

(b) At Owner’s request from time to time, the Westlake Parties shall consult
with Owner with respect to the performance of the Shared Services and shall
provide to Owner such information as may be reasonably requested by Owner
regarding the performance of the Shared Services. Without limiting the
foregoing, the Westlake Parties and Owner shall consult as frequently as
reasonably necessary regarding the scope of Shared Services and particular
circumstances that may require an adjustment to the scope of any such Shared
Services. The Westlake Parties and Owner agree that the Ethylene Assets will be
operated to the maximum extent possible in an efficient manner with the Westlake
Facilities, but in any event in a manner that permits Owner to comply with its
obligations under this Agreement and the Related Agreements.

(c) The Westlake Parties shall deliver to Owner at least (i) twelve months
advance written notice of any permanent planned shutdown of the Westlake
Facilities and (ii) nine months advance written notice of any planned
reconfiguration of the Westlake Facilities that is reasonably anticipated to
result in the Ethylene Assets being shutdown for more than three months
(excluding planned maintenance turnarounds). The Westlake Parties represent to
Owner that, as of the date of this Agreement, they are not considering a
permanent shutdown of the Westlake Facilities or any changes to the Westlake
Facilities that would have a material adverse effect on the operation of the
Westlake Facilities or the Ethylene Assets.

2.6 Relationship of the Parties. At all times during the performance of the
Shared Services hereunder, all Persons performing such Shared Services
(including agents, temporary employees, independent third parties and
consultants) shall be construed as being independent from the Owner, and such
Persons shall not be considered or deemed to be an employee of Owner or its
Affiliates nor entitled to any employee benefits of Owner or its Affiliates as a
result of this Agreement. Notwithstanding anything to the contrary expressed or
implied, this Agreement shall not constitute or create any agency, joint
venture, partnership or other fiduciary relationship or any fiduciary duty or
fiduciary obligation, all of the same being hereby expressly disclaimed and
waived.

ARTICLE III

OPERATING SERVICES

3.1 Seconded Employees of the Westlake Parties. Subject to the terms of this
Agreement, the Westlake Parties agree to provide Seconded Employees (as defined
in Section 7.2(b)) who, in their capacity as employees of the Owner, will
perform the services described on Schedule 5, except as outsourced by Owner to
third party service providers (the “Operating Services”), in order for the Owner
to operate the Ethylene Assets in an efficient manner with the Westlake
Facilities, and in a manner that permits Owner to comply with its obligations
under the Ethylene Sales Agreement and Feedstock Supply Agreement. The Seconded
Employees will perform the Operating Services in accordance with the terms and
conditions and subject to the limitations set forth in this Agreement.

 

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3.2 Owner’s Rights. The Seconded Employees shall be subject to the direction and
control of Owner. The Westlake Parties shall respond in a commercially
reasonable manner to all instructions, notices, requests or inquiries from Owner
with respect to the Seconded Employees. Decisions, acts or omissions so
undertaken by the Seconded Employees or the Westlake Parties with respect to the
Seconded Employees pursuant to the direction and control of Owner shall not give
rise to any breach of or default under this Agreement by the Westlake Parties or
liability to the Westlake Parties provided that the Westlake Parties otherwise
act in accordance with the requirements of Section 3.1.

3.3 Consultations. The Westlake Parties and Owner shall consult as frequently as
reasonably necessary regarding the scope of Operating Services to be performed
by the Seconded Employees and particular circumstances that may require an
adjustment to the Westlake Parties’ obligation to provide the Seconded
Employees, and shall keep each other timely informed about planned turnarounds,
shutdowns, major technical projects, capital projects, significant operational
events and other major events that are relevant to the safe and efficient
operation of the Ethylene Assets and the Westlake Facilities and the performance
of the Parties’ respective obligations under this Agreement.

3.4 Title, Documents and Data. Title to all materials, equipment, supplies,
consumables, spare parts and other items purchased or obtained by the Westlake
Parties for or on behalf of the Ethylene Assets or Owner shall pass immediately
to and vest in Owner free and clear of all liens or encumbrances (other than
liens and security interests securing any unpaid portion of the purchase price
for the same) upon passage of title from the vendor or supplier thereof. All
materials, data and documents prepared or developed by the Westlake Parties or
their employees, representatives or contractors prior to or during the Term of
this Agreement for Owner in connection with the Seconded Employees’ performance
of the Operating Services, including all manuals, data, designs, drawings,
plans, specifications and reports, shall belong to Owner. All such materials in
whatever form, including electronic copies and databases, shall be provided
promptly to Owner following any termination of this Agreement, or at such other
times as Owner may reasonably direct.

ARTICLE IV

WESTLAKE PROVIDED UTILITIES

4.1 Engagement of the Westlake Parties. Subject to the terms of this Agreement,
Owner hereby engages the Westlake Parties to, or to cause their Affiliates to,
make available the utility services described in Sections 4.2 and 4.3 (the
“Westlake Provided Utilities”) and authorizes the Westlake Parties to perform,
or cause to be performed, all acts that are necessary or appropriate in the
Westlake Parties’ reasonable judgment to provide the Westlake Provided
Utilities. The Westlake Parties hereby accept such engagement and agree to
perform, or cause to be performed, all acts necessary or appropriate in the
Westlake Parties’ reasonable judgment to provide the Westlake Provided
Utilities, all in accordance with the terms and conditions and subject to the
limitations set forth in this Agreement. The Westlake Parties agree to provide,
or cause to be provided, the Westlake Provided Utilities to permit the Ethylene
Assets to be operated to the maximum extent possible in an efficient manner with
the Westlake Facilities, but in any event in a manner that permits Owner to
comply with its obligations under the Ethylene Sales Agreement and Feedstock
Supply Agreement.

4.2 High Pressure Steam. The Westlake Parties shall, upon reasonable request by
Owner make, or cause certain of their Affiliates to, make available to Owner
High Pressure Steam produced at a cost to Owner as incurred by the Westlake
Parties or such Affiliates in the production of such High Pressure Steam and
calculated in accordance with a formula as agreed between the Parties, and at
sufficient pressure, amounts, and of such quality, standards and specifications
suitable for the operation of the Ethylene Assets, in accordance with standards
and quality being used in the operation of the Ethylene Assets as of the date of
this Agreement, or as may be reasonably requested by Owner based upon changed
needs. The Westlake Parties shall use commercially reasonable efforts to, or
cause their Affiliates to, make available such High Pressure Steam when
requested by Owner; provided that the Westlake Parties shall not be obligated to
make, or cause its Affiliates to make available High Pressure Steam hereunder if
doing so would have a material adverse effect on the operations of the Westlake
Facilities. Owner shall provide reasonable notice to the Westlake Parties of the
approximate date, time and quantity of each of its requirements of the High
Pressure Steam.

 

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4.3 Other Steam. The Westlake Parties may, or may cause certain of its
Affiliates to, supply Owner with any steam (other than High Pressure Steam)
produced in the operation of the Westlake Facilities, which is not required by
such operation and is required for Owner’s operation, at a cost to Owner as
incurred by the Westlake Parties or such Affiliates in the production of such
steam; provided that the Westlake Parties shall not be obligated to make, or
cause its Affiliates to make available steam hereunder if doing so would have a
material adverse effect on the operations of the Westlake Facilities. Owner
shall provide reasonable notice to the Westlake Parties of the approximate date,
time and quantity of each of its requirements of such steam.

4.4 Consultations. At Owner’s request from time to time, the Westlake Parties
shall consult with Owner with respect to the performance of the Westlake
Provided Utilities and shall provide to Owner such information as may be
reasonably requested by Owner regarding the performance of the Westlake Provided
Utilities. Without limiting the generality of the foregoing, the Westlake
Parties and Owner shall consult as frequently as reasonably necessary regarding
the scope of Westlake Provided Utilities and particular circumstances that may
require an adjustment to the scope of any Westlake Provided Utilities, and shall
keep each other timely informed about planned turnarounds, shutdowns, major
technical projects, capital projects, significant operational events and other
major events that are relevant to the safe and efficient operation of the
Ethylene Assets and the Westlake Facilities and the performance of the Parties’
respective obligations under this Agreement.

ARTICLE V

OWNER PROVIDED SERVICES

5.1 Engagement of Owner. Subject to the terms of this Agreement, the Westlake
Parties and certain of their Affiliates hereby engage Owner to perform the Owner
Provided Services (as defined below) and authorize Owner to perform all acts
that are necessary or appropriate in Owner’s reasonable judgment to perform the
Owner Provided Services. Owner hereby accepts such engagement and agrees to
perform all acts necessary or appropriate in Owner’s reasonable judgment to
perform the Owner Provided Services, all in accordance with the terms and
conditions and subject to the limitations set forth in this Agreement. Owner
agrees to provide the Owner Provided Services to permit the Westlake Facilities
to be operated to the maximum extent possible in an efficient manner with the
Owner Facilities, but in any event in a manner that permits the Westlake Parties
to comply with their obligations under the Ethylene Sales Agreement and
Feedstock Supply Agreement.

5.2 Owner Provided Services.

(a) High Pressure Steam. Owner shall, upon reasonable request by the Westlake
Parties make available to the Westlake Parties High Pressure Steam produced by
the Ethylene Assets at a cost to the Westlake Parties as incurred by Owner in
the production of such High Pressure Steam, and at sufficient pressure, amounts,
and of such quality, standards and specifications suitable for the operation of
the Westlake Facilities, in accordance with standards and quality being used in
the operation of the Westlake Facilities as of the date of this Agreement, or as
may be reasonably requested by the Westlake Parties based upon changed needs.
Owner shall use commercially reasonable efforts to make available such High
Pressure Steam when requested by the Westlake Parties; provided that Owner shall
not be obligated to make available High Pressure Steam hereunder if doing so
would have a material adverse effect on the operations of the Ethylene Assets.
The Westlake Parties shall provide reasonable notice to Owner of the approximate
date, time and quantity of each of their requirements of High Pressure Steam.

(b) Other Steam. Owner may supply the Westlake Parties with any steam (other
than High Pressure Steam) produced in the operation of the Ethylene Assets,
which is not required by such operation and is required for the Westlake
Parties’ operation, at a cost to the Westlake Parties as incurred by Owner in
the production of such steam; provided that Owner shall not be obligated to make
available steam hereunder if doing so would have a material adverse effect on
the operations of the Ethylene Assets. The Westlake Parties shall provide
reasonable notice to Owner of the approximate date, time and quantity of each of
its requirements of such steam.

(c) Purge Gas Services. Owner shall receive for processing and purification from
the Westlake Parties or their Affiliate and return to the Westlake Parties or
their Affiliates, at a cost to the Westlake Parties as set forth in Schedule 6,
all of the Purge Gas. Owner shall provide such Purge Gas processing and
purification services in accordance with standards and quality being used in the
Westlake Facilities as of the date of this Agreement, or as may be reasonably
requested by the Westlake Parties based upon changed needs. Owner shall use
commercially

 

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reasonable efforts to make available such Purge Gas purification services when
requested by the Westlake Parties; provided that Owner shall not be obligated to
make available the purge gas purification services hereunder if doing so would
have a material adverse effect on the operations of the Ethylene Assets. The
Westlake Parties shall provide reasonable notice to Owner of the approximate
date and time of their requirement for purge gas purification services and the
volume of Purge Gas for processing.

(d) Demineralized Water. Owner shall, upon reasonable request by the Westlake
Parties make available to the Westlake Parties or their Affiliates Demineralized
Water, at a cost to the Westlake Parties as incurred by Owner in relation to
such Demineralized Water, and in sufficient amounts, and of such quality,
standards and specifications suitable for the operation of the Westlake
Facilities, in accordance with the standards and quality being used in the
operation of the Westlake Facilities as of the date of this Agreement, or as may
be reasonably requested by the Westlake Parties based upon changed needs. Owner
shall use commercially reasonable efforts to make available such Demineralized
Water when requested by the Westlake Parties; provided that Owner shall not be
obligated to make available Demineralized Water hereunder if doing so would have
a material adverse effect on the operations of the Ethylene Assets. The Westlake
Parties shall provide reasonable notice to Owner of the approximate date, time
and quantity of each of their requirements of Demineralized Water,

(subsections (a), (b), (c) and (d), collectively, the “Owner Provided
Services”).

5.3 Consultations. At the Westlake Parties’ request from time to time, Owner
shall consult with the Westlake Parties with respect to the performance of the
Owner Provided Services and shall provide to the Westlake Parties such
information as may be reasonably requested by the Westlake Parties regarding the
performance of the Owner Provided Services. Without limiting the generality of
the foregoing, Owner and the Westlake Parties shall consult as frequently as
reasonably necessary regarding the scope of Owner Provided Services and
particular circumstances that may require an adjustment to the scope of any
Owner Provided Services, and shall keep each other timely informed about planned
turnarounds, shutdowns, major technical projects, capital projects, significant
operational events and other major events that are relevant to the safe and
efficient operation of the Ethylene Assets and the Westlake Facilities and the
performance of the Parties’ respective obligations under this Agreement.

5.4 Relationship of the Parties. At all times during the performance of the
Owner Provided Services hereunder, all Persons performing such Owner Provided
Services (including agents, temporary employees, independent third parties and
consultants) shall be construed as being independent from the Westlake Parties,
and such Persons shall not be considered or deemed to be an employee of the
Westlake Parties or their Affiliates nor entitled to any employee benefits of
the Westlake Parties or their Affiliates as a result of this Agreement.
Notwithstanding anything to the contrary expressed or implied, this Agreement
shall not constitute or create any agency, joint venture, partnership or other
fiduciary relationship or any fiduciary duty or fiduciary obligation, all of the
same being hereby expressly disclaimed and waived.

ARTICLE VI

ADDITIONAL SERVICES

6.1 Additional Westlake Provided Services. If, subsequent to the date hereof,
additional common facilities or services are required to operate the Westlake
Facilities that are not listed on Schedule 3 or Schedule 4 the Westlake Parties
shall use commercially reasonable efforts to supply such additional facilities
and services on mutually agreeable pricing and other terms to be determined on a
basis similar to the pricing and other terms set forth in this Agreement,
whereupon such facility or service shall be considered part of the Common
Facilities Services or Utility Services, as applicable.

6.2 Additional Seconded Employees. If, subsequent to the date hereof, additional
common facilities or services are required to operate the Ethylene Assets that
are not listed on Schedule 5, the Westlake Parties shall use commercially
reasonable efforts to provide Seconded Employees to operate such additional
facilities and services on mutually agreeable pricing and other terms to be
determined on a basis similar to the pricing and other terms set forth in this
Agreement, whereupon such facility or service shall be considered part of the
Operating Services.

6.3 Additional Westlake Provided Utilities. If, subsequent to the date hereof,
additional utilities are required to operate the Ethylene Assets that are not
described in Article IV, the Westlake Parties shall use

 

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commercially reasonable efforts to supply such additional utilities on mutually
agreeable pricing and other terms to be determined on a basis similar to the
pricing and other terms set forth in this Agreement, whereupon such service
shall be considered part of the Westlake Provided Utilities.

6.4 Additional Owner Provided Services. If, subsequent to the date hereof,
additional utilities or services are required to operate the Westlake Facilities
that are not described in Article V or listed on Schedule 6, Owner shall use
commercially reasonable efforts to supply such additional utilities or services
on mutually agreeable pricing and other terms to be determined on a basis
similar to the pricing and other terms set forth in this Agreement, whereupon
such service shall be considered part of the Owner Provided Services.

ARTICLE VII

AUTHORIZED PERSONS AND EMPLOYEES

7.1 Delegation.

(a) Subject to Section 3.2, Owner hereby delegates full authority to the
Westlake Parties to take such actions as may be necessary or appropriate in the
Westlake Parties’ reasonable judgment for the performance of the Operating
Services;

(b) Owner hereby delegates full authority to the Westlake Parties to take such
actions as may be necessary or appropriate in the Westlake Parties’ reasonable
judgment for the performance of the Shared Services;

(c) Owner hereby delegates full authority to the Westlake Parties to take such
actions as may be necessary or appropriate in the Westlake Parties’ reasonable
judgment for the provision of the Westlake Provided Utilities; and

(d) The Westlake Parties hereby delegate full authority to Owner to take such
actions as may be necessary or appropriate in Owner’s reasonable judgment for
the performance of the Owner Provided Services,

which delegation of authority shall include the right to further delegate such
authority to others. If any of the Services are delegated to and performed by an
Affiliate of a Party or an employee of a Party or an employee of any Affiliate
of a Party, Section 9.1 shall apply thereto.

7.2 Personnel and Secondment.

(a) Pursuant to Section 3.1, the Westlake Parties shall provide, or cause to be
provided, to Owner the Seconded Employees (as defined in Section 7.2(b) below)
and such other Persons (including consultants and professionals, service or
other organizations)) as the Westlake Parties deem necessary or appropriate in
order to perform the Operating Services in an efficient and prudent manner.
Subject to the Westlake Parties’ right to be reimbursed for such expenses in
accordance with the Accounting Procedures, each Westlake Party shall pay all
expenses incurred by it in connection with the retention of the Seconded
Employees and such other Persons, including, but not limited to, compensation,
salaries, wages and overhead and administrative expenses, charges to or incurred
by such Westlake Party, and, if applicable, social security taxes, workers
compensation insurance, retirement and insurance benefits and other such
expenses. Any such Seconded Employees and other Persons retained by any Westlake
Party may be union or non-union employees, and the Westlake Parties shall have
the sole right to negotiate the terms and provisions of any labor or other
agreements with the unions to which such employees belong. The Westlake Parties
shall provide, or cause to be provided, all workers who will perform Services.

(b) During the term of this Agreement, the Westlake Parties shall, from time to
time, designate certain of their employees to be seconded to Owner to perform
duties at the Owner’s assets or facilities or otherwise work on behalf of Owner
in accordance with and subject to the terms of this Agreement. Each such
employee who the Westlake Parties second to Owner shall, during the time that
such employee is seconded to Owner under this Agreement (the “Period of
Secondment”), be referred to individually herein as a “Seconded Employee” and,
collectively, as the “Seconded Employees.”

 

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(c) The Westlake Parties will give notice to each Seconded Employee at times and
in the normal processes by which it gives similar notices to employees or
otherwise in its discretion. The notices will include that (i) each such
Seconded Employee will be a joint employee of the Westlake Parties and Owner,
and (ii) for any work place injury, the Seconded Employee’s sole remedy against
either the Westlake Parties or Owner will be under the workers’ compensation
insurance policy or qualified self-insured program of the Westlake Parties. For
the avoidance of doubt, the Parties acknowledge that the Seconded Employees
will, during the Period of Secondment, be called upon to perform services for
both Owner and the Westlake Parties of the same or closely-related nature. The
Westlake Parties retain the right to terminate the secondment of any Seconded
Employee for any reason at any time or to hire or discharge the Seconded
Employees with respect to their employment with the Westlake Parties. Owner will
have the right to terminate the secondment to it of any Seconded Employee for
any reason at any time, upon prior written notice to the Westlake Parties, but
at no time will Owner have the right to terminate any Seconded Employee’s
employment by the Westlake Parties. Upon the termination of the secondment of
any Seconded Employee, such Seconded Employee will cease performing services for
Owner.

(d) In the course and scope of performing any Seconded Employee’s job functions
for Owner, the Seconded Employee will report into Owner’s management structure,
and will be under the direct management, supervision, direction and control of
Owner with respect to such Seconded Employee’s performance of the Operating
Services and day-to-day activities.

(e) Those Seconded Employees who serve as supervisors or managers and who are
called upon to oversee the work of Seconded Employees working at Owner’s assets
or facilities or to provide management support on behalf of Owner are designated
by Owner as supervisors to act on the behalf of Owner in supervising the
Seconded Employees pursuant to Section 7.2(d) above. Any Seconded Employee so
designated will be acting on the behalf of Owner when supervising the work of
the Seconded Employees or when they are otherwise providing management or
executive support on behalf of Owner.

(f) With respect to Owner’s operations in Texas, the Westlake Parties shall
obtain workers’ compensation coverage as defined by Texas Labor Code
Section 401.011(44) on behalf of both the Westlake Parties and Owner, and Owner
shall be considered an employer solely for the purposes of Texas Labor Code
Section 401.011(18) and Section 408.001. With respect to the Owner’s operations
in Kentucky, the Westlake Parties shall obtain workers’ compensation coverage as
defined by Kentucky Revised Statute Section 342.340 on behalf of both the
Westlake Parties and Owner, and Owner shall be considered an employer solely for
the purposes of Kentucky Revised Statute Section 342.630 and Section 342.690.
With respect to the Owner’s operations in Louisiana, the Westlake Parties shall
obtain workers’ compensation coverage as defined by Louisiana Revised Statute
Section 23:1168 on behalf of both the Westlake Parties and Owner, and Owner
shall be considered an employer solely for the purposes of Louisiana Revised
Statute Section 23:1031 and Section 23:1032. With respect to Owner Group
operations performed in any jurisdiction other than Texas, Kentucky, or
Louisiana, the Westlake Parties shall obtain workers’ compensation coverage as
defined and required by Law on behalf of both the Westlake Parties and Owner,
provided that Owner shall be considered an employer solely for the purposes of
its status as a dual, joint- or co-employer under the relevant workers’
compensation regime. For the avoidance of doubt, nothing in this Agreement has
any effect on the right of a Seconded Employee to prosecute a workers’
compensation claim against Owner, the Westlake Parties, or both.

(g) Owner and the Westlake Parties acknowledge that the services provided for
under this Agreement are an integral part of and essential to the ability of
Owner to generate the goods, products, and services of Owner, and to enable
Owner to fulfill its business and commercial contracts, which are the core of
its business. By executing this Agreement, Owner undertakes to execute work that
is part of its trade, business, and occupation. Owner and the Westlake Parties
expressly recognize Owner as the statutory employer of the Seconded Employees
for workers’ compensation purposes, whether those employees be direct employees
or statutory employees of the Westlake Parties. Notwithstanding anything in this
Section 7.2(g), Owner remains the joint employer, with the Westlake Parties, of
the Seconded Employees when under secondment, and should any conflict be found
between this Section 7.2(g) and Section 7.2(c), Section 7.2(c) shall
predominate.

(h) Owner shall not be a participating employer in any benefit plan of any
Westlake Party. The Westlake Parties shall remain solely responsible for all
obligations and liabilities arising with respect to any benefit plans relating
to any Seconded Employees and Owner shall not assume any benefit plan or have
any obligations or liabilities arising thereunder, in each case except for costs
properly chargeable to Owner.

 

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ARTICLE VIII

BUDGETS, AUDITS AND ACCOUNTING

8.1 Approved Annual Budgets.

(a) Owner and the Westlake Parties acknowledge that they have agreed upon an
Approved Annual Budget consistent with the Accounting Procedures for the period
commencing on the date of this Agreement and ending December 31, 2014 (the
“First Approved Annual Budget”).

(b) The Westlake Parties shall prepare and deliver to Owner, no later than 30
days before the commencement of each Fiscal Year, a proposed budget for the
Shared Services and the Operating Services to be performed by the Westlake
Parties and the Seconded Employees, respectively, during such Fiscal Year. Each
such budget shall be prepared on the same basis and using the same methodology
as the First Approved Annual Budget. Such budgets shall be prepared in
sufficient detail to satisfy the reasonable requirements of Owner. However, at a
minimum, such budgets shall include estimates of the labor expense and expenses
incurred by employees of the Westlake Parties or their Affiliates in performing
the Shared Services and the Operating Services as well as an itemized list of
estimated third Person expenses to be incurred in performing the Shared Services
and the Operating Services, in each case consistent with the Accounting
Procedures. If requested by Owner, the Westlake Parties shall also prepare and
deliver to Owner an explanation of any specific Expenditure. The Parties shall
use good faith efforts to agree upon an Approved Annual Budget reasonably
acceptable to Owner no later than 15 days prior to the commencement of the
Fiscal Year for which such budget applies. Owner shall have the right to
reasonably comment on and make objections to each annual budget proposed by the
Westlake Parties, to the extent such comments and objections are with respect to
the failure to prepare such budget on the same basis and using the same
methodology as the First Annual Approved Budget; provided that if Owner and the
Westlake Parties fail to agree on such budget, the Westlake Parties’ budget
shall provisionally constitute an Annual Approved Budget. If the Parties have
not reached agreement on the annual budget within 30 days after Owner’s notice
of objection thereto, then senior management representatives of the Parties
shall engage in negotiations, and if the Parties have not reached agreement
within 30 days after commencement of negotiations, either Party shall have the
right to resolve such dispute in a court of law pursuant to this Agreement. If
any such dispute is resolved in favor of Owner, the Westlake Parties shall
reimburse Owner the amount of Expenditures determined not to be chargeable to
the Westlake Parties, with interest as provided in Section 10.1(c). As to each
Approved Annual Budget, no later than the 15th day preceding the commencement of
the second, third and fourth quarterly periods covered by such Approved Annual
Budget, the Westlake Parties will provide to Owner adjustments to such Approved
Annual Budget to reflect the estimated Expenditures to be incurred in the
performance of the Shared Services and the Operating Services over the balance
of the Fiscal Year covered by such Approved Annual Budget.

(c) It is acknowledged and agreed by the Parties that the annual budgeting
process, the quarterly updates to such budgets, and the revisions of such
budgets pursuant to this Article VIII to cover overages are for planning
purposes, and if the actual Expenditures incurred by the Westlake Parties in the
performance of the Shared Services and the Operating Services exceed such
budgeted Expenditures, the Westlake Parties shall nevertheless be entitled to
reimbursement of such actual Expenditures pursuant and subject to the terms of
Article X.

8.2 Unbudgeted Expenditures. The Westlake Parties shall notify Owner as soon as
practicable of any occurrences or other circumstances which the Westlake Parties
have reason to believe may (a) cause any line item in the most recently Approved
Annual Budget (as updated pursuant to Section 8.1) to be exceeded by the greater
of (i) twenty percent (20%); or (ii) 1 million US dollars or (b) cause the total
amount of such Approved Annual Budget to be exceeded by the greater of
(i) twenty percent (20%); or (ii) 1 million US dollars. If the Westlake Parties
determine that either clause (a) or (b) will likely occur, the Westlake Parties
shall in the notice advising Owner describe the circumstances thereof in writing
in such detail as may reasonably be necessary to provide an informed
understanding of the situation including a description of the category or
categories of Expenditures involved, the reason for such projected overage, the
necessary revisions to the Approved Annual Budget to cover such overage, and
such further information as Owner may reasonably request. Owner shall have the
right, acting reasonably, to comment on and make objections to such revisions;
provided that if Owner and the Westlake Parties fail to agree on such revisions,
the Westlake Parties’ revisions shall remain in place, subject to Owner’s right
to resolve disputes in a court of law pursuant to this Agreement.

 

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8.3 Accounting, Reimbursement and Fee.

(a) The Westlake Parties shall keep a full and complete account of all
Expenditures incurred by them in connection with the performance of the Shared
Services and the Operating Services in the manner set forth in the Accounting
Procedures, and shall otherwise keep a full and complete account of all accounts
that Owner is required to maintain (except accounts required for Owner’s
investors), or that are otherwise contemplated, under this Agreement.

(b) The Westlake Parties shall be reimbursed by Owner for Expenditures and
Capital Expenditures incurred by the Westlake Parties in the performance of the
Shared Services and the Operating Services, in accordance with the Accounting
Procedures; provided, Owner shall not be required to reimburse the Westlake
Parties for (i) Expenditures arising out of claims for non-payment of any and
all contributions, withholding deductions or taxes measured by the wages,
salaries or compensation paid to Persons employed by the Westlake Parties or any
of their Affiliates in connection herewith or (ii) Expenditures for which the
Westlake Parties are required to provide indemnification to Owner pursuant to
Section 15.1.

8.4 Reports. The Westlake Parties shall cause to be timely prepared and
delivered to Owner such reports, forecasts, implementation plans, plans of
action, studies and other information pertaining to the performance of the
Shared Services and the Operating Services as Owner may reasonably request from
time to time. The costs incurred by the Westlake Parties in preparing and
delivering such reports, forecasts, plans, studies and other information shall
be included in the Expenditures to be reimbursed by Owner pursuant to
Sections 8.3(b).

8.5 Audit and Examination.

(a) To the extent necessary to verify the accuracy of any statement, invoice,
charge or computation made under this Agreement, each Party shall have the
right, at its cost, to interview representatives of the other Party and to
examine the books and records maintained by such other Party relating to this
Agreement, including support for costs charged by the Party’s third party
contractors, relating to the performance of the relevant Services, during normal
business hours and upon reasonable notice to the other Party; provided that each
Party has the right to redact from the records subject to examination of any
portions thereof as necessary to comply with such Party’s confidentiality
obligations. Such audit must be commenced within 12 Months of receiving said
statement, invoice, charge or computation made under this Agreement and will
take place at a location mutually agreeable to the Parties. All records subject
to audit hereunder shall be caused to be retained for no less than two calendar
years after their creation. If any such examination establishes any inaccuracy
in any billing made prior to such examination, the necessary adjustments to such
billings will be made promptly without any interest charge.

(b) Absent fraud or intentional concealment or misrepresentation by the relevant
Party, such Party shall neither be required nor permitted to adjust any
Expenditure incurred by such Party during a Fiscal Year unless a claim therefor
is presented or adjustment is initiated within the 12 Months following such
Fiscal Year, and in the absence of such timely claims or adjustments, the books
and records rendered by the Westlake Parties shall be conclusively established
as correct. If a Party has commenced an audit within the period referenced in
Section 8.5(a) but has been unable to complete the audit within such period
despite its good faith efforts to do so, then such Party may request a
reasonable extension of time to complete the audit and such request will not be
unreasonably denied by the other Party.

ARTICLE IX

STANDARD OF CARE, NEGATIVE COVENANTS, CONFIDENTIAL INFORMATION AND PROPRIETARY
INVENTIONS

9.1 Standard of Care. In performing the Services, the Parties shall at all times
act in accordance with the following: (a) the requirements of this Agreement,
(b) prudent operating and maintenance practices of the U.S.

 

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chemical industry; (c) all Applicable Law including environmental standards in
effect from time to time, and any other applicable rules and requirements of
Governmental Authorities; and (d) good faith and reasonable commercial
standards; provided, in no event shall a Party be obligated to comply with a
requirement if such compliance would result in a breach by that Party of
Applicable Law. In addition, the Services to be provided hereunder shall be
performed generally in a good faith effort to be cost effective, and with the
same general degree of care and at the same general degree of accuracy and
responsiveness as when such Party performs services for itself at the Westlake
Facilities or the Ethylene Assets, as applicable. NOTWITHSTANDING ANY CONTRARY
PROVISIONS OF THIS AGREEMENT OR APPLICABLE LAW, EXCEPT IN THE CASE OF ACTUAL
FRAUD, THE PARTIES AND THEIR AFFILIATES (AND THEIR RESPECTIVE OWNERS, EMPLOYEES,
AGENTS AND CONTRACTORS) SHALL NOT HAVE ANY LIABILITY TO OWNER UNDER OR WITH
RESPECT TO THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT, NEGLIGENCE (WHETHER
SOLE OR CONCURRENT, STRICT LIABILITY OR OTHERWISE)) FOR LOSSES SUSTAINED OR
LIABILITIES INCURRED EXCEPT PURSUANT TO SECTION 15.1.

9.2 Negative Covenants. A Party shall not, without the prior written consent of
the other Party, do or, to the extent the same is within its reasonable control
and consistent with the other terms of this Agreement, permit to occur or to
continue, any of the following:

(a) Commit the other Party to, or enter into on behalf of such other Party, any
contract or agreement except in the ordinary course of operating the Westlake
Facilities or the Ethylene Assets, as applicable, unless the Party is authorized
to do so by the other Party;

(b) Create or incur any lien, security interest or encumbrance upon the Westlake
Facilities or the Ethylene Assets, as applicable, including without limitation
any mechanics or material men’s liens or similar encumbrances arising out of
claims for work, labor or materials furnished to the Party in connection with
the provision of Services by that Party hereunder;

(c) Purport to sell, lease, pledge, mortgage, assign, transfer or otherwise
dispose of the Westlake Facilities or the Ethylene Assets, as applicable or any
of the other Party’s now owned or hereafter acquired assets, except for replaced
parts and other assets that are taken out of service and are sold or otherwise
disposed of in the ordinary course of operating the Westlake Facilities or the
Ethylene Assets, as applicable; or

(d) Commit the other Party to be or to become directly or contingently
responsible or liable for obligations of any other Person, by assumption,
guarantee, endorsement or otherwise.

9.3 Proprietary Inventions and Techniques. Owner grants to the Westlake Parties
an irrevocable, royalty-free, non-exclusive and non-assignable license to use,
during the Term of this Agreement, any proprietary inventions, processes and
techniques of Owner which are necessary or useful in the operation of the Common
Facilities. As a condition precedent to the effectiveness of such license to
use, the Westlake Parties hereby expressly agree that they will utilize such
proprietary inventions, processes and techniques solely in connection with the
performance of its duties hereunder. Upon termination of this Agreement, such
license shall terminate and the Westlake Parties shall return to Owner whatever
possessory interest the Westlake Parties have in all inventions, processes or
techniques that are proprietary to Owner.

ARTICLE X

PAYMENT OF COSTS

10.1 Payments.

(a) Each Party shall issue to the other Party an invoice on or before the 20th
day of each Month (the “Monthly Invoice”) reflecting such other Party’s
allocable share of Expenditures (split between Operating Expenses and Capital
Expenditures) incurred by the Party under this Agreement in the provision of
Services for the prior Month (the “Relevant Month”).

 

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(b) Each Party shall pay the amount of each Monthly Invoice to the other Party,
other than any amount thereof that is disputed in accordance with
Section 10.1(e) below, not later than the 5th day following receipt from such
other Party of the Monthly Invoice. If the due date for payment is not a
Business Day, then the due date for payment shall be the immediately succeeding
Business Day. Any adjustments necessary to reconcile the resolution of a
disputed amount with the amount actually paid shall be paid within five Days
following resolution of the disputed amount. Any adjustments, whether for
overpayment or underpayment, for disputed amounts shall bear interest at the
Base Rate from the date of overpayment or underpayment, as the case may be,
until the actual date of payment.

(c) In the event that any amount reflected in any statement or invoice is not
paid when due, other than any amount thereof that is disputed in accordance with
Section 10.1(e) below, such unpaid amount shall bear interest from and including
the day following the due date therefor up to and including the date when
payment is made, at the Default Rate.

(d) If any Party fails to make payment of any amount of any Monthly Invoice,
other than any amount thereof that is disputed in accordance with
Section 10.1(e) below, on or before the later of (i) the 60th day after such
payment is due an (ii) the 30th day after notice to such Party of non-payment,
the other Party shall have the right to suspend the performance of the relevant
Services hereunder to such Party until such payment is made.

(e) A Party may withhold payment of all or any portion of any amount reflected
as owing by the other Party in any statement or invoice received from the other
Party to the extent that the paying Party disputes payment of such amount or
such portion thereof in good faith. For the avoidance of doubt, as to any
Monthly Invoice, a Party may withhold payment as to any disputed amount,
including to account for any credit such Party believes it is owed with respect
to the performance or receipt of Services, or the failure thereof. In the event
of such a dispute, the disputing Party shall promptly notify the other Party,
stating its reasons for disputing such amount and, to the extent available
providing reasonable supporting documentation therefor.

(f) A Party may dispute a Monthly Invoice, or any portion thereof, by notice to
the other Party, up to one calendar year following receipt of such Monthly
Invoice, provided that if a Party fails to deliver such notification within such
period, it shall be deemed to have waived the right to dispute the applicable
Monthly Invoice.

(g) All payments pursuant to this Section 10.1 shall be calculated in accordance
with the Accounting Principles and shall exclude any costs or expenses for which
a Party is required to indemnify the other Party pursuant to Section 15.1.

(h) Monthly Invoices shall take into account any prior payments made by a Party
that have not been used by the Party providing services. Each Monthly Invoice
shall include a reconciliation (split between Operating Expenses and Capital
Expenditures) of the Monthly Invoice payment made by the relevant Party for the
Month and such Party’s allocable share of the actual Expenditures incurred by
the Party providing the services during such Month, and any amount owing by one
Party to the other Party pursuant to such reconciliation shall adjust the amount
otherwise payable on that Monthly Invoice.

(i) All payments under this Agreement shall be made in United States dollars by
wire transfer in immediately available funds by deposit to the bank account
designated in writing by the Party receiving the payment. Any wire transfer
charges shall be for the account of the Party making the payment. If a Party
elects to change the bank or account to which payments are to be made, that
Party shall notify the other Party before the effective date of such change.

10.2 Reimbursement for Emergencies.

(a) If the Westlake Parties take any action pursuant to an Emergency involving
or related to the Common Facilities or the Ethylene Assets, the Westlake Parties
shall be entitled to reimbursement for Owner’s allocable share of all
Expenditures reasonably incurred in taking such action (subject to
Section 10.2(c)). The Westlake Parties agree to promptly notify Owner of any
such Emergency, and to provide Owner with sufficient

 

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explanation and justification for any action taken in response thereto and the
Expenditures incurred, or expected to be incurred, in connection therewith, any
further action required, and such other details as may be required for reporting
to any Governmental Authority. Owner shall reimburse the Westlake Parties for
Owner’s allocable share of Expenditures reasonably incurred under this
Section 10.2 upon receipt of invoices, if applicable, sent by the Westlake
Parties in the ordinary course after the Expenditures have been incurred and
Owner is notified thereof.

(b) The Westlake Parties are hereby authorized to make immediate commitments or
expenditures, without prior approval, as necessary to accomplish the following:

(i) prevent imminent escape of gas, liquids, chemicals or vapors from the Common
Facilities and/or the Ethylene Assets;

(ii) prevent imminent injury to any Person arising out of the operation of the
Common Facilities and/or the Ethylene Assets;

(iii) prevent, curtail, minimize or otherwise mitigate imminent damage to the
environment or the property of Owner, the Westlake Parties or third parties
arising out of the operation of the Common Facilities and/or the Ethylene Assets
or from the performance of the Services;

(iv) prevent imminent failure or unplanned shutdown of the Common Facilities,
any Utility Service or the Ethylene Assets;

(v) restore the Common Facilities, any Utility Service and the Ethylene Assets
to operating condition following an unplanned shutdown or failure; or

(vi) comply with emergency orders of any Governmental Authority arising out of
the operation of the Common Facilities, the Ethylene Assets or the performance
of the Services.

(c) Notwithstanding anything to the contrary, the Westlake Parties shall not be
entitled to reimbursement for Expenditures made in accordance with this
Section 10.2 if the circumstance giving rise to the Expenditure resulted from
the Westlake Parties’ gross negligence or willful misconduct.

(d) If an Emergency or other situation requiring prompt action arises and the
Westlake Parties are not reasonably responding in a prompt fashion, Owner shall
have the right to take such remedial action as it deems appropriate, at Owner’s
cost, and the Westlake Parties will reimburse Owner for the Westlake Parties’
allocable share of the costs incurred by Owner in connection with such remedial
action; provided, if the circumstance giving rise to such remedial action
resulted from the Westlake Parties’ gross negligence or willful misconduct, then
the cost of such remedial action shall be borne and paid by the Westlake
Parties.

ARTICLE XI

TAXES

11.1 Embedded Tax Amounts. If any portion of any payment made by a Party
hereunder is to reimburse the other Party for any federal, state or local taxes
or assessments, then such other Party shall cause such taxes and assessments to
be paid prior to delinquency.

11.2 Income Taxes. Notwithstanding anything to the contrary, Expenditures for
which a Party is entitled to reimbursement pursuant to this Agreement shall not
include taxes that are measured or based on that Party’s income or franchise
taxes or similar taxes, and all such income, franchise and similar taxes shall
be the responsibility of that Party.

 

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ARTICLE XII WARRANTY/CLAIMS

12.1 Warranties.

(a) The Westlake Parties shall use commercially reasonable efforts, as agent for
Owner, to secure from vendors, suppliers and subcontractors, for Owner’s
benefit, such warranties and guarantees as may reasonably be available regarding
supplies, materials, equipment and services purchased for the Ethylene Assets in
the performance of the Operating Services, and to enforce such warranties and
guarantees on behalf of Owner. As regards any equipment, materials, supplies or
services obtained by the Westlake Parties from vendors, suppliers and
subcontractors, the only warranties, if any, applicable thereto and available to
Owner shall be those offered by such vendors, suppliers and subcontractors. THE
WESTLAKE PARTIES MAKE NO EXPRESS OR IMPLIED WARRANTY, GUARANTY OR
REPRESENTATION, INCLUDING ANY EXPRESS OR IMPLIED WARRANTY OF FITNESS FOR
PARTICULAR PURPOSE, SUITABILITY OR MERCHANTABILITY, REGARDING THE DESIGN OR ANY
OTHER CHARACTERISTICS OF THE ETHYLENE ASSETS OR ANY SUCH EQUIPMENT, MATERIALS,
SUPPLIES OR SERVICE, ALL OF WHICH ARE SPECIFICALLY DISCLAIMED AND NEGATED.

(b) OWNER’S EXCLUSIVE REMEDIES WITH RESPECT TO EQUIPMENT, MATERIALS, SUPPLIES OR
SERVICES OBTAINED BY THE WESTLAKE PARTIES FROM THIRD PARTY VENDORS, SUPPLIERS
AND SUBCONTRACTORS SHALL BE THOSE UNDER THE VENDOR, SUPPLIER AND SUBCONTRACTOR
WARRANTIES REFERENCED IN SECTION 12.1(a), AND THE WESTLAKE PARTIES’ ONLY
OBLIGATION, ARISING OUT OF OR IN CONNECTION WITH ANY SUCH WARRANTY OR BREACH
THEREOF, SHALL BE TO USE COMMERCIALLY REASONABLE EFFORTS TO ENFORCE SUCH
WARRANTIES AND OWNER SHALL HAVE NO OTHER REMEDIES AGAINST THE WESTLAKE PARTIES
WITH RESPECT TO EQUIPMENT, MATERIALS, SUPPLIES OR SERVICES OBTAINED BY THE
WESTLAKE PARTIES FROM SUCH VENDORS, SUPPLIERS AND SUBCONTRACTORS.

12.2 Claims. Any and all claims against Owner instituted by anyone other than
the Westlake Parties arising out of the performance of the Operating Services
that are not covered by insurance shall be settled or litigated and defended by
the Westlake Parties except when (a) the amount involved is stated to be (or
estimated to be, as the case may be) greater than $1,000,000 or (b) criminal
sanction is sought. The settlement or defense of any claim described in clause
(a) or (b) above shall be decided by Owner in its sole and absolute discretion
following consultation with the Westlake Parties. Each Party shall provide
written notice to the other Party as soon as practicable of any claims
instituted against Owner or the Westlake Parties in their capacity as provider
of the Operating Services (regardless of the amount or nature of the claim).

ARTICLE XIII

TERMINATION

13.1 Term. This Agreement shall commence as of the date of this Agreement and
shall continue in effect until the 12th anniversary hereof (the “Initial Term”)
or, if earlier, the date upon which this Agreement is terminated pursuant to
Section 13.2. Beginning at least one] year prior to the expiration of the
Initial Term, the Parties will negotiate in good faith using commercially
reasonable efforts to reach agreement upon terms for the renewal of this
Agreement (a “Renewal Term”; and the Initial Term together with any Renewal Term
is the “Term” of this Agreement), along with the terms for renewal of the
Related Agreements. If the Parties have not reached agreement upon terms for the
renewal of this Agreement and the Related Agreements by the date that is six
months prior to the expiration of this Agreement, then senior management
representatives of the Parties (including at least one representative from each
Party who has not previously been directly engaged in the prior renewal
negotiations) shall engage in discussions regarding such renewal; provided,
however, that neither Party shall be obligated to renew this Agreement.

13.2 Termination. The following provisions shall govern the termination of this
Agreement. Any termination pursuant to this Section 13.2 shall be evidenced by a
notice given by the Party effectuating such termination.

 

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(a) Owner shall have the option to terminate this Agreement if:

(i) the Westlake Parties materially default in the performance of their
obligations under this Agreement and (1) such material default continues for a
period of 30 days after notice thereof by Owner to the Westlake Parties or
(2) if the default is not reasonably susceptible of being cured within a 30 day
period, the Westlake Parties fail to commence the cure of said default within a
30 day period or thereafter fails to pursue the cure with commercially
reasonable diligence; or

(ii) the annual fees payable by Owner in respect of Services exceed such amount
given in the Agreed Annual Budget for the relevant Fiscal Year by the greater of
(i) 20 %; or (ii) 1 million US dollars, without the prior written consent of
Owner; and

(b) The Westlake Parties shall have the option to terminate this Agreement if:

(i) Owner materially defaults in the performance of its obligations under this
Agreement and (i) such material default continues for a period of 30 days after
notice thereof by the Westlake Parties to Owner or (ii) if the default is not
reasonably susceptible of being cured within a 30 day period, Owner fails to
commence the cure of said default within a 30 day period or thereafter fails to
pursue the cure with commercially reasonable diligence;

(ii) Owner becomes subject to a Bankruptcy Proceeding;

(iii) Owner permanently shuts down the Ethylene Assets; or

(iv) Owner has not operated the Ethylene Assets for a period of more than six
consecutive months for any reason other than for (A) construction following a
casualty loss, which construction is being performed in compliance with section
7.3 of each of the Site Lease Agreements or (B) Force Majeure.

(c) A Party shall have the option to terminate this Agreement in the case of a
Force Majeure Event which is continuing for at least 12 months after receipt by
the other Party of notice pursuant to Section 16.2.

(d) This Agreement shall automatically terminate if the Ethylene Sales Agreement
terminates pursuant to the provisions therein.

13.3 Self Help. During any period that a Party (a) is unable pursuant to Article
XVI or (b) has failed to perform any Service after receipt of notice from the
other Party regarding such failure, to perform any of the Services (the “Subject
Services”), the other Party shall have the right to perform or cause to be
performed the Subject Services, and the first Party shall take all actions
reasonably necessary to facilitate such performance of the Subject Services.

13.4 General Obligations. As reasonably requested by a Party during the 180 day
period following the termination of this Agreement, the other Party shall
provide Services pursuant to the terms of this Agreement (and for which the
requesting Party shall continue to advance or reimburse Expenditures as set
forth in Article X) and otherwise reasonably cooperate with Owner, provided that
Owner is not in payment default at any time during such period.

ARTICLE XIV

ACCESS TO ETHYLENE ASSETS

The Westlake Parties, their agents and contractors and the Seconded Employees
shall at all times during their performance of the Westlake Provided Services
hereunder have full and free, non-exclusive access to the Ethylene Assets as
necessary to perform their obligations under this Agreement, and all such
Persons shall comply with all safety and other procedures from time to time
imposed by Owner or the Westlake Parties in connection with any access to or
work performed on or about the Ethylene Assets or the Westlake Facilities. Owner
shall reasonably cooperate with the Westlake Parties in connection with the
Westlake Parties’ performance of their obligations under

 

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this Agreement, including (a) signing, submitting and prosecuting applications
or submissions for Permits with respect to the Ethylene Assets for which Owner
is a necessary and indispensable party and taking such other action reasonably
required of Owner to enable the Westlake Parties to perform their obligations
under this Agreement including, obtaining and maintaining applicable Permits;
(b) granting the Westlake Parties and their representatives and agents such,
non-exclusive access to the Ethylene Assets and information to the extent known
by Owner about historic, current and projected operations as may be reasonably
needed by the Westlake Parties in order to fulfill their obligations under this
Agreement; and (c) granting the Westlake Parties and their representatives and
agents the right to undertake all sampling, testing and monitoring required by
any Permit or Governmental Authority in connection with any Permit. Owner shall
notify the Westlake Parties promptly of any written notification that it
receives by Owner of any investigation, proceeding or other action commenced by
any Governmental Authority relating to any Ethylene Asset Permit or any
Applicable Law relating to the Ethylene Assets. Owner shall promptly provide the
Westlake Parties with copies of any and all written notices or other
communications received by Owner from any Governmental Authority with respect to
the Ethylene Assets and, at the reasonable request of the Westlake Parties, any
other information or document that is within Owner’s possession relating to such
Ethylene Assets Permits or any obligations thereunder.

ARTICLE XV

INDEMNIFICATION

15.1 By the Westlake Parties. The Westlake Parties shall indemnify, protect and
defend Owner and its Affiliates and all of their officers, directors, employees
and agents (the “Owner Indemnified Parties”) against, and hold the Owner
Indemnified Parties harmless from, any and against all losses (including lost
profits), costs, damages, injuries, taxes, penalties, interests, expenses,
obligations, claims and liabilities (joint or severable) of any kind or nature
whatsoever (collectively, “Claims”) that are incurred by such Owner Indemnified
Parties in connection with, relating to or arising out of (a) the breach by any
Westlake Party, the Westlake Parties’ Affiliates, or their directors, officers,
employees, agents, contractors, subcontractors or consultants (the “Westlake
Group”) of any term or condition of this Agreement, or (b) the performance of
any Services hereunder; provided, however, that the Westlake Parties shall not
be obligated to indemnify, reimburse, defend or hold harmless any Owner
Indemnified Party for any Claims incurred by such Owner Indemnified Party in
connection with, relating to or arising out of (i) a breach by such Owner
Indemnified Party of this Agreement, (ii) the gross negligence, willful
misconduct, bad faith or reckless disregard of such Owner Indemnified Party with
respect to the Services hereunder or (iii) the fraudulent or dishonest acts of
such Owner Indemnified Party.

15.2 By Owner. Owner shall indemnify, protect and defend the Westlake Parties
and their Affiliates and all of their officers, directors, employees and agents
(the “Westlake Indemnified Parties”) against, and hold the Westlake Indemnified
Parties harmless from, any and against all Claims that are incurred by such
Westlake Indemnified Parties in connection with, relating to or arising out of
(a) the breach by Owner, Owner’s Affiliates, or its directors, officers,
employees, agents, contractors, subcontractors or consultants (the “Owner
Group”) of any term or condition of this Agreement, or (b) the performance of
any Services hereunder; provided, however, that Owner shall not be obligated to
indemnify, reimburse, defend or hold harmless any Westlake Indemnified Party for
any Claims incurred by such Westlake Indemnified Party in connection with,
relating to or arising out of (i) a breach by such Westlake Indemnified Party of
this Agreement, (ii) the gross negligence, willful misconduct, bad faith or
reckless disregard of such Westlake Indemnified Party with respect to the
Services hereunder or (iii) the fraudulent or dishonest acts of such Westlake
Indemnified Party.

15.3 Indemnification Procedures.

(a) A Party (the “Indemnified Party”) agrees that promptly after it becomes
aware of facts giving rise to a Claim under this Article XV, it will provide
notice thereof to the other Party pursuant to Section 15.1 or Section 15.2 (the
“Indemnifying Party”), specifying the nature of and specific basis for such
claim, copies of all correspondence with third parties, Governmental Authorities
or other individuals relating to the claim, and other relevant information
reasonably requested by the Indemnifying Party.

(b) The Indemnifying Party shall have the right to control all aspects of the
response to and/or defense of (and any counterclaims with respect to) any claims
brought against the Indemnified Party that are covered by the indemnification
under this Article XV, including correspondence and negotiation with
Governmental Authorities,

 

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the selection of counsel and engineering and other consultants, determination of
the scope of and approach to any investigation or remediation, determination of
whether to appeal any decision of any court, determination of whether to enter
into any voluntary agreement with any Governmental Authority, and the settling
of any such matter or any issues relating thereto; provided, however, that no
such settlement shall be entered into without the consent of the Indemnified
Party unless it includes a full release of the Indemnified Party from such
matter or issues, as the case may be.

(c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party,
with respect to all aspects of the defense of any claims covered by the
indemnification under this Article XV, including the prompt furnishing to the
Indemnifying Party of any correspondence or other notice relating thereto that
the Indemnified Party may receive, permitting the name of the Indemnified Party
to be utilized in connection with such defense, the making available to the
Indemnifying Party of any files, records or other information of the Indemnified
Party that the Indemnifying Party considers relevant to such defense and the
making available to the Indemnifying Party of any employees of the Indemnified
Party; provided, however, that in connection therewith the Indemnifying Party
agrees to use reasonable efforts to minimize the impact thereof on the
operations of the Indemnified Party and further agrees to maintain the
confidentiality of all files, records, and other information furnished by the
Indemnified Party pursuant to this Section 15.3. In no event shall the
obligation of the Indemnified Party to cooperate with the Indemnifying Party as
set forth in the immediately preceding sentence be construed as imposing upon
the Indemnified Party an obligation to hire and pay for counsel in connection
with the defense of any claims covered by the indemnification set forth in this
Article XV; provided, however, that that the Indemnified Party may, at its own
option, cost and expense, hire and pay for counsel in connection with any such
defense. The Indemnifying Party agrees to keep any such counsel hired by the
Indemnified Party informed as to the status of any such defense, but the
Indemnifying Party shall have the right to retain sole control over such
defense.

(d) In determining the amount of any loss, cost, damage or expense for which the
Indemnified Party is entitled to indemnification under this Agreement, the gross
amount of the indemnification will be reduced by (i) any insurance proceeds
realized by the Indemnified Party, and such correlative insurance benefit shall
be net of any incremental insurance premiums that become due and payable by the
Indemnified Party as a result of such claim and (ii) all amounts recovered by
the Indemnified Party under contractual indemnities from third Persons.

ARTICLE XVI

FORCE MAJEURE

16.1 Force Majeure Event. Subject to the following provisions of this Article
XVI, a Party shall not be in default hereunder or responsible for any loss or
damage to the other Party resulting from any delay in performing or failure to
perform any obligation of such Party under this Agreement (other than a Party’s
failure or delay to make advances and payments for the provision of Services
performed or to be performed) to the extent such failure or delay is caused by a
Force Majeure Event. For clarification purposes, a Party shall not be obligated
to make advances or payments for Services that are not performed as a result of
a Force Majeure Event.

16.2 Force Majeure Notice. The Party whose ability to perform is affected by a
Force Majeure Event must, as a condition to its right to suspend its obligations
under Section 16.1, promptly give the other Party notice setting forth the
particulars of the Force Majeure Event and, to the extent possible, the expected
duration of the Force Majeure Event and the Services to be affected by the Force
Majeure Event. Such notice shall also include a description of the steps taken
and proposed to be taken to lessen and cure the Force Majeure Event. The cause
of the Force Majeure Event shall so far as commercially reasonable be remedied
with all reasonable dispatch, except that no Party shall be obligated to resolve
any Labor Difficulties other than as it shall determine to be in its best
interests.

ARTICLE XVII

OTHER PROVISIONS

17.1 Assignment. Except as permitted pursuant to the Omnibus Agreement, neither
Party may assign or otherwise transfer any of its rights or obligations under
this Agreement without the prior written consent of the other Parties hereto,
and any purported assignment or transfer in violation hereof shall be null and
void. This Agreement shall be binding upon, and inure the benefit of, permitted
successors and assigns.

 

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17.2 Notices. All notices or requests or consents provided for by, or permitted
to be given pursuant to, this Agreement must be in writing and must be given by
depositing same in the United States mail, addressed to the Person to be
notified, postpaid, and registered or certified with return receipt requested or
by delivering such notice in person or by facsimile or e-mail to such Party.
Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by facsimile or e-mail shall be effective upon actual
receipt if received during the recipient’s normal business hours or at the
beginning of the recipient’s next Business Day after receipt if not received
during the recipient’s normal business hours. All notices to be sent to a Party
pursuant to this Agreement shall be sent to or made at the address set forth
below such Party’s signature to this Agreement or at such other address as such
Party may stipulate to the other Parties in the manner provided in this
Section 17.2.

Owner:

Westlake Chemical OpCo, LP

c/o Westlake Chemical Partners LP

2801 Post Oak Boulevard, Suite 600

Houston, Texas 77056

Attention: Lawrence Teel, Principal Operating Officer

Fax: 713.960.8761

The Westlake Parties:

Westlake Management Services, Inc.

2801 Post Oak Boulevard, Suite 600

Houston, Texas 77056

Attention: David Hansen, Senior Vice President

Fax: 713.960.8738

Westlake Vinyls, Inc.

c/o Westlake Chemical Corporation

2801 Post Oak Boulevard, Suite 600

Houston, Texas 77056

Attention: Robert Buesinger, Senior Vice President

Fax: 713.963.1578

WPT LLC

c/o Westlake Chemical Corporation

2801 Post Oak Boulevard, Suite 600

Houston, Texas 77056

Attention: Amy Moore, Manager, Olefins

Fax: 713.960.8761

Westlake Petrochemicals LLC

c/o Westlake Chemical Corporation

2801 Post Oak Boulevard, Suite 600

Houston, Texas 77056

Attention: Todd Root, Director,

Planning & Business Developments, Olefins

Fax: 713.960.8761

17.3 Severability. If any provision of this Agreement shall be finally
determined to be unenforceable, illegal or unlawful, such provision shall, so
long as the economic and legal substance of the transactions contemplated hereby
is not affected in any materially adverse manner as to any Party, be deemed
severed from this Agreement and the remainder of this Agreement shall remain in
full force and effect.

 

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17.4 Entire Agreement. This Agreement and the Related Agreements (including any
exhibits hereto or thereto) constitute the entire agreement of the Parties
relating to the matters contained herein and therein, superseding all prior
contracts or agreements, whether oral or written, relating to the matters
contained herein and therein.

17.5 Amendment or Modification. This Agreement may be amended or modified from
time to time only by the written agreement of all the Parties hereto; provided,
that the Owner may not, without the prior approval of the Conflicts Committee,
agree to any amendment or modification of this Agreement that, in the reasonable
judgment of the GP, will adversely affect the holders of Common Units. Each such
instrument shall be reduced to writing and shall be designated on its face an
“Amendment” or an “Addendum” to this Agreement.

17.6 No Waiver. Failure of either Owner or the Westlake Parties to require
performance of any provision of this Agreement shall not affect either Party’s
right to full performance thereof at any time thereafter, and the waiver by
either Owner or the Westlake Parties of a breach of any provision hereof shall
not constitute a waiver of any similar breach in the future or of any other
breach or nullify the effectiveness of such provision.

17.7 Safety Regulations. All employees of each Party when on the property of the
other Party will conform to the rules, regulations and procedures concerning
safety of such other Party. From time to time, each Party shall furnish the
other Party with complete, accurate and current copies of all such rules,
regulations and procedures.

17.8 Relationship of Parties. This Agreement does not create a partnership,
joint venture, or relationship of trust or agency between the Parties.

17.9 Governing Law. This Agreement shall be subject to and governed by the laws
of the State of Texas, excluding any conflicts-of-law rule or principle that
might refer the construction or interpretation of this Agreement to the laws of
another state. Each of the Parties hereby agrees: (i) to submit to the exclusive
jurisdiction of any state or federal court sitting in Houston, Texas in any
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, (ii) that all claims in respect of any such
action or proceeding may be heard and determined in any such court, (iii) that
such Party will not bring any action or proceeding arising out of or relating to
this Agreement in any other court, and (iv) that such Party waives any defense
of inconvenient forum to the maintenance of any such action or proceeding, and
waives any bond, surety or other security that might be required of any other
Party with respect to any such action or proceeding.

17.10 Dispute Resolution.

(a) The dispute resolution provisions set forth in this Section 17.10 shall be
the final, binding and exclusive means to resolve all disputes, controversies or
claims (each, a “Dispute”) arising under the Agreement, and each Party
irrevocably waives any right to any trial by jury with respect to any dispute
arising under this Agreement.

(b) If a dispute arises, the following procedures shall be implemented:

(i) Any Party may at any time invoke the dispute resolution procedures set forth
in this Section 17.10 as to any dispute by providing written notice of such
action to the other Parties.

(ii) Notwithstanding the existence of any dispute or the pendency of any
procedures pursuant to this Section 17.10, and subject to Section 17.3, the
Parties agree and undertake that all payments not in dispute shall continue to
be made and that all obligations not in dispute shall continue to be performed.

(iii) Within 30 days after receipt of notice of a dispute, representatives of
the Parties shall engage in non-binding mediation, and a specific timetable and
completion date for its implementation shall also be agreed upon. If the
completion date therefor shall occur without the Parties having resolved the
dispute, then the Parties shall proceed under subsection (b)(iv).

 

26

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(iv) If, after satisfying the requirement above, the dispute is not resolved,
the Parties shall resolve the dispute by a binding arbitration, to be held in
the State of Texas pursuant to the Federal Arbitration Act and in accordance
with the then-prevailing Commercial Arbitration Rules of the American
Arbitration Association (the “AAA”). The AAA shall select one
(1) arbitrator. Each Party shall bear its own expenses incurred in connection
with arbitration and the fees and expenses of the arbitrator shall be shared
equally by the Parties involved in the dispute and advanced by them from time to
time as require. It is the mutual intention and desire of the Parties that the
arbitrator be selected as expeditiously as possible following the submission of
the dispute to arbitration. Once the arbitrator is selected and except as may
otherwise be agreed in writing by the Parties involved in such dispute or as
ordered by the arbitrator upon substantial justification shown, the hearing for
the dispute will be held within sixty (60) days of submission of the dispute to
arbitration. The arbitrator shall render his final award within sixty (60) days,
subject to extension by the arbitrator upon substantial justification shown of
extraordinary circumstances, following conclusion of the hearing and any
required post-hearing briefing or other proceedings ordered by the
arbitrator. Any discovery in connection with arbitration hereunder shall be
limited to information directly relevant to the controversy or claim in
arbitration. The decision of the arbitrator in any such proceeding will be
reasoned, final and binding and final judgment may be entered upon such an award
in any court of competent jurisdiction, but entry of such judgment will not be
required to make such award effective. Any action against any Party ancillary to
arbitration (as determined by the arbitrators), including any action for
provisional or conservatory measures or action to enforce an arbitration award
or any judgment entered by any court in respect of any thereof may be brought in
any federal or state court of competent jurisdiction located within the State of
Texas, and the Parties hereby irrevocably submit to the non-exclusive
jurisdiction of any federal or state court located within the State of Texas
over any such action. The Parties hereby irrevocably waive, to the fullest
extent permitted by Law, any objection which they may now or hereafter have to
the laying of venue of any such action brought in such court or any defense of
inconvenient forum for the maintenance of such action. Each of the Parties
agrees that a judgment in any such action may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law.

17.11 Waiver of Consequential Damages. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, NO PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR OR IN RESPECT OF
ANY CONSEQUENTIAL LOSS OR DAMAGE, SPECIAL OR PUNITIVE DAMAGES OR LOSS OF PROFITS
OR BUSINESS INTERRUPTION, SUFFERED OR INCURRED BY ANY OTHER PARTY ARISING OUT
OF, IN CONNECTION WITH, OR RESULTING FROM, THIS AGREEMENT, WHETHER ANY CLAIM FOR
SUCH LOSS OR DAMAGE IS BASED ON TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY,
CONTRACT (INCLUDING BREACH OF OR FAILURE TO PERFORM THIS AGREEMENT OR THE BREACH
OF ANY REPRESENTATION OR WARRANTY HEREUNDER, WHETHER EXPRESS OR IMPLIED) OR
OTHERWISE, EXCEPT FOR ANY SUCH DAMAGES RECOVERED BY ANY THIRD PARTY AGAINST ANY
PARTY IN RESPECT OF WHICH SUCH PARTY WOULD OTHERWISE BE ENTITLED TO
INDEMNIFICATION PURSUANT TO ARTICLE XV, PROVIDED THAT NO PARTY SHALL BE ENTITLED
TO INDEMNIFICATION FOR ANY DAMAGES THAT ARE CONTRARY TO APPLICABLE LAW.

17.12 Further Assurances. In connection with this Agreement and all transactions
contemplated by this Agreement, each signatory party hereto agrees to execute
and deliver such additional documents and instruments and to perform such
additional acts as may be necessary or appropriate to effectuate, carry out and
perform all of the terms, provisions and conditions of this Agreement and all
such transactions.

17.13 Set Off. Each Party has the right to set off against any amounts due to
the other Party hereunder any and all amounts that the other Party owes to the
first Party under this Agreement or the Related Agreements.

17.14 Counterparts. This Agreement may be executed in any number of counterparts
with the same effect as if all signatory parties had signed the same document.
All counterparts shall be construed together and shall constitute one and the
same instrument.

17.15 Rights of Third Parties. The provisions of this Agreement are enforceable
solely by the Parties to this Agreement, and no third party (including any
Limited Partner of the MLP) shall have the right, separate and apart from the
Parties to this Agreement, to enforce any provision of this Agreement or to
compel any Party to this Agreement to comply with the terms of this Agreement.

 

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[Signatures on following page]

 

28

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.

 

WESTLAKE CHEMICAL OPCO LP By:   Westlake Chemical OpCo GP LLC, its general
partner By:   /s/ Lawrence E. Teel Name:   Lawrence E. Teel Title:   Principal
Operating Officer WESTLAKE MANAGEMENT SERVICES, INC. By:   /s/ Albert Chao Name:
  Albert Chao Title:   President and Secretary WESTLAKE VINYLS, INC. By:   /s/
Albert Chao Name:   Albert Chao Title:   President and Secretary WPT LLC By:  
Westlake Chemical Investments, Inc., its manager By:   /s/ Albert Chao Name:  
Albert Chao Title:   President and Secretary WESTLAKE PETROCHEMICALS LLC By:  
Westlake Chemical Investments, Inc., its manager By:   /s/ Albert Chao Name:  
Albert Chao Title:   President and Secretary

Signature Page to Services and Secondment Agreement

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SCHEDULE 1

ETHYLENE ASSETS

PART A

CALVERT CITY ASSETS

The ethylene plant was built in 1963 and occupies approximately 13 acres. The
original unit was designed and built by C. F. Braun. The unit was converted to
ethane feedstock and expanded to an annual capacity of 630 million pounds in
early 2014.

PART B

LAKE CHARLES ASSETS

 

1. Petro 1 was started up in 1991 and occupies 26.99 acres. It was built with
KBR technology as an ethane cracker and is now being expanded with Technip
technology to 1.5B lb/yr of ethylene.

 

2. Petro 2 was started up in 1997 and occupies 23.43 acres. It was built by
Lummus as an ethane and propane cracker. It was expanded in 2013 to 1.49B lb/yr
of ethylene by Lummus and will achieve that capacity with the start-up of the
seventh furnace at the end of 2014.

 

3. As part of the Petro 2 project in 1997, the co-products storage and shipping
area was built. The co-products storage area occupies 7.75 acres.

 

4. The Lake Charles Assets comprise 58.17 acres in total.

 

Schedule 1

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SCHEDULE 2

COMMON FACILITIES

 

1. Lake Charles Common Facilities

 

   The Petro Site has 320 acres and has Petro 1, Petro 2, Co-products, Styrene
and Poly 3. As noted Petro 1, Petro 2 and Co-products are owned by Owner and
have 58.17 acres. To the west of the Petro Site, Westlake Chemical owns about
350 acres of land for future development.

 

2. Calvert City Common Facilities:

 

  i. The Chlor Alkali plant was built in 1966 and occupies approximately 40
acres. It was upgraded and expanded to 275K ECU capacity in 2001 utilizing Asahi
Kasei membrane technology. The feedstocks are rock salt and electricity.

 

  ii. The VCM unit was built in 1953 utilizing B. F. Goodrich technology. The
unit occupies approximately 55 acres and has an annual production capacity of
1.3 billion pounds of VCM. The feedstocks are Chlorine, Ethylene and Oxygen as
well as supplemental Ethylene Dichloride as required.

 

  iii. The PVC unit was built in 1959 and occupies approximately 26 acres. It
has a current annual production capacity of 1.4 billion pounds. The unit’s
feedstock is VCM produced by the Westlake VCM unit.

 

3. Common Facilities which are owned by Westlake Parties and their Affiliates
that Owner may use, and will be charged through Shared Services, will include,
but shall not be limited to:

 

  i. Parking lots

 

  ii. Security

 

  iii. Internal roads

 

  iv. Walk ways

 

  v. Maintenance buildings

 

  vi. Warehouses

 

  vii. Engineering buildings

 

  viii. Office buildings

 

  ix. Lay down areas

 

  x. Rail tracks and loading and unloading

 

  xi. Truck loading and unloading

 

  xii. Raw water supply system

 

  xiii. Power supply system

 

  xiv. Feedstock supply system

 

  xv. Product outlet

 

Schedule 2

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  xvi. Co-product handling

 

  xvii. Waste water line

 

  xviii. Firewater

 

  xix. Fire equipment in emergencies

 

Schedule 2

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SCHEDULE 3

COMMON FACILITIES SERVICES

Plant Services

Maintenance – direct labor and direct supervision for routine maintenance and
construction

Warehouse – routine supplies and critical spare parts

Laboratory

Plant safety –includes safety training and maintaining safety equipment

Site Security – includes manning front gate (contract)

Emergency Response – includes fire brigade, rescue and hazmat teams

Railroad Services – loading rack and dock services, including direct labor and
direct supervision

Wastewater Treatment – includes sewer system

Cooling Tower

Purchasing of and arranging for feedstock, services and supplies, including risk
management and insurance thereto.

Technical Services

Direct Process Engineering

Process Safety Management

Environmental

Process and Quality Control

Project Engineering

IT

Other Services

Marketing, accounting, human resources

Buildings and Grounds: HVAC, janitorial, lawn care, weed control, trash,
sprinkler system, roads, fencing, lighting, medical services and uniform

Buildings and Grounds include Maintenance Shop, Warehouse and associated storage
buildings, Central Control Room, Main Office, Security Building, Fire House,
Motor Control Centers, Boilerhouse, Chemical Storage unit

Training

Miscellaneous: phones, faxes, copiers, printers, mail services, office supplies

 

Schedule 3

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SCHEDULE 4

UTILITY SERVICES

Utility Services

Electric Power

Natural Gas

Nitrogen

Fuel Gas

Steam and process steam

Cooling water

Potable water

Boiler feed water, service and soft water

Raw water (from Sabine Diversion)

Instrument/Utility air

 

Schedule 4

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SCHEDULE 5

OPERATING SERVICES

The services shall include the personnel, supplies, parts and materials
necessary for the provision of comprehensive Operating Services. The Westlake
Parties shall provide or cause to be provided the following Operating Services
in connection with the operation and maintenance of the Ethylene Assets, all in
accordance with, and subject to, the requirements of this Agreement, including
the following services by the Westlake Parties:

 

  1. provide, or procure and manage, those services (including operation,
maintenance, engineering and construction services) necessary for the operation
of the Ethylene Assets and to maintain the Ethylene Assets in sound operating
condition and good repair;

 

  2. perform routine maintenance, preventative maintenance and capitalized
repairs;

 

  3. perform corrosion and inspection services,

 

  4. submit the applications for, pursue the issuance of, and maintain in force,
the environmental and all other permits necessary for the operation of the
Ethylene Assets;

 

  5. prepare, sign and file, or cause to be prepared, signed and filed, all
filings required to be filed by an operator of comparable manufacturing
facilities with any Governmental Authority with respect to the Ethylene Assets
or the operation thereof;

 

  6. pay any existing or future ad valorem tax, and any existing or future sales
tax, use tax, value added tax, environmental tax or other governmental charge or
tax (other than taxes measured by income) levied or imposed on the Westlake
Parties with respect to the Operating Services and prepare, deliver and maintain
the required reports, valuations and statements with respect to such charges and
taxes;

 

  7. provide, or procure and manage, any raw materials, catalysts, additives,
process chemicals and other supplies required for the operation of the Ethylene
Assets;

 

  8. operate the Ethylene Assets for the production of ethylene and certain
ethylene co-products, including, but not limited to propylene, butadiene, pygas,
pyoil and hydrogen (“Products”);

 

  9. use, store, handle, treat and, on Owner’s behalf and in Owner’s name,
dispose of, in accordance with Applicable Law, the hazardous waste and other
hazardous materials and nonhazardous waste made, used, processed, stored or
generated in the operation of the Ethylene Assets;

 

  10. maintain proper inventory control and counting procedures and read,
maintain and calibrate metering devices and maintain proper records in respect
of the Products and other raw materials, catalysts, process chemicals, supplies
and fuel used in the operation of the Ethylene Assets;

 

  11. transport and store Products, including through exchange transactions;

 

  12. sell and distribute the Products to third-parties;

 

  13. prepare and maintain accounting, statistical, production runs and other
operational reports, special reports detailing any accident or other significant
event and such other reports and records as are required by Applicable Law or as
are customarily maintained by prudent operators for facilities similar to the
Ethylene Assets, including, as applicable, the following information:

 

  i. intakes and outturns of the Ethylene Assets;

 

  ii. production of Products;

 

  iii. maintenance of the Ethylene Assets, including turnarounds;

 

  iv. scheduled and unscheduled shutdowns and other events reducing available
time, space or other available use of the Ethylene Assets;

 

Schedule 5

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

  v. inventory feedstock, Product and other raw materials, catalysts, additives,
process chemicals and other supplies and fuel;

 

  vi. permit violations; and

 

  vii. NOVs/NODs, and environmental releases or spills requiring the
preparation, maintenance or submission of reports or records under any
Environmental Laws or such other policy as Owner may specify in advance in
writing or any other event materially affecting the environment, health and/or
safety;

 

  14. propose such capital projects to the Ethylene Assets as it may consider
necessary or useful and provide, or procure the provision of, project assistance
for capital projects to the Ethylene Assets as requested by Owner, including the
development of project scope, plans, cost estimates, performance targets and
other relevant information for capital projects that the Owner may reasonably
request;

 

  15. provide, or procure and manage, engineering, technical services,
construction and installation work to the Ethylene Assets, including for capital
projects;

 

  16. prepare and maintain periodic reviews and updates of facilities procedures
manuals and other documentation and of appropriate rules, regulations,
procedures and manuals for the protection of the environment, health and/or
safety as required by Applicable Law and as would be customarily prepared and
maintained by a prudent operator for facilities similar to the Ethylene Assets;

 

  17. take such reasonable actions as to cause the warranties and guaranties
from vendors, operators and contractors required by applicable contract or
design specifications to be delivered and maintained;

 

  18. maintain such quality certifications with respect to the Ethylene Assets
as is necessary for the production of Products. In addition, if Owner shall
require a quality certification for the Ethylene Assets to satisfy the
requirements of a customer of any end use products, the Westlake Parties shall
obtain and maintain such certification provided that to do so does not place
excessive administrative or other burdens on the Westlake Parties and Owner pays
all incremental costs of obtaining and maintaining such quality certification;
and

 

  19. perform laboratory testing procedures for the Ethylene Assets products
required for process and quality control and to maintain compliance with
specifications.

In the event that, subsequent to the date hereof, additional services are
required to operate the Ethylene Assets that are not listed on this Schedule 5,
the Westlake Parties shall use commercially reasonable efforts to supply such
additional services on a mutually agreeable pricing and other terms, whereupon
such services shall be considered to be an Operating Service for purposes of
this Agreement.

 

Schedule 5

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SCHEDULE 6

OWNER PROVIDED SERVICES

Purge Gas Processing

At the Lake Charles Assets the Poly 1/2 units send ethylene purge gas from their
process to maintain the quality of the polyethylene product. This purge gas is
returned to Petro 1 or Petro 2 and reprocessed, as it is largely ethylene.

A reprocessing charge that covers the cost of energy, chemicals, etc. is made.
This cost is to be mutually agreed between the parties from time to time, based
upon to cost of energy, chemicals, etc. pursuant to the mutual agreement of the
Parties.

High Pressure Steam

At the Lake Charles Assets, in order to support the Petro 1 and Styrene plants,
there is a line between them to allow the transfer of 600 psig superheated steam
from one plant to the other for unit upsets and emergencies. This steam is sold
at the full cost of production of the steam, based on an agreed upon formula.

 

Schedule 6

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SCHEDULE 7

ACCOUNTING PROCEDURES

1.0 Statements and Billings. Each Party shall bill the other Party in accordance
with Section 10.1(a) of this Agreement. If requested by a Party, the Party
issuing the bill will promptly provide reasonably sufficient support for the
Expenditures anticipated to be incurred for the following Month. Bills will be
summarized by appropriate classifications indicative of the nature thereof and
will be accompanied by such detail and supporting documentation as the paying
Party may reasonably request.

2.0 Records. The Parties shall maintain accurate books and records covering all
of such Parties’ performance of the relevant Services.

3.0 Purchase of Materials. All material, equipment and supplies used or consumed
at the Ethylene Assets will be owned by Owner and purchased or furnished for its
account. So far as is reasonably practical and consistent with efficient, safe
and economical operation as determined by the Westlake Parties, only such
material shall be obtained for the Ethylene Assets as may be required for
immediate or near-term use, and the accumulation of surplus stock shall be
avoided. To the extent reasonably possible, the Westlake Parties shall take
advantage of discounts available by early payments and pass such benefits (or an
allocable portion thereof) on to Owner.

4.0 Accounting Principles.

(a) The Westlake Parties are part of an affiliated group of companies (the
“Affiliated Group”) that as of the date of this Agreement are engaged in the
manufacture and marketing of chemicals, vinyls, olefins, polymers and various
fabricated building products. Accounting, purchasing, and risk management (among
other functions and services) as of the date of this Agreement are managed or
provided by the Westlake Parties or one of their Affiliates to the Affiliated
Group. The costs and expenses incurred by the Westlake Parties or such Affiliate
in managing or providing such functions and services are accrued on the books
and records of the Westlake Parties in accordance with GAAP and are allocated
(where applicable) among the members of the Affiliated Group in accordance with
GAAP (the “Accounting Principles”).

(b) The costs and expenses incurred by Owner or such Affiliate in managing or
providing functions and services as at the date of this Agreement are accrued on
the books and records of Owner in accordance with the Accounting Principles.

(c) For purposes of this Schedule, Expenditures shall be classified as either
“Owner Only Expenditures”, “Westlake Only Expenditures” or “Other Expenditures”:

(i) “Owner Only Expenditures” shall be comprised of the Expenditures (Operating
Expenses and Capital Expenditures) which are incurred solely in respect of the
Ethylene Assets, Owner or Owner’s business. Owner Only Expenditures shall
include (without limitation) Taxes imposed on the Ethylene Assets or the
operation thereof, the cost of employees, labor, materials, equipment, supplies,
replacement parts, license and Permit fees and fees of accountants and other
professionals, in case incurred solely in respect of the Ethylene Assets, Owner
or Owner’s business.

(ii) “Westlake Only Expenditures” shall be comprised of the Expenditures
(Operating Expenses and Capital Expenditures) which are incurred solely in
respect of the Westlake Facilities, the Westlake Parties or the business of the
Westlake Parties. Westlake Only Expenditures shall include (without limitation)
Taxes imposed on the Westlake Facilities or the operation thereof, the cost of
employees, labor, materials, equipment, supplies, replacement parts, and fees of
accountants and other professionals, in case incurred solely in respect of the
Westlake Facilities, the Westlake Parties or the business of the Westlake
Parties.

 

Schedule 7

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(iii) “Other Expenditures” shall include all Expenditures (Operating and Capital
Expenditures) other than Owner Only Expenditures or “Westlake Only
Expenditures”.

(d) The Parties shall apply the Accounting Principles in determining the
Expenditures and in allocating the Other Expenditures among the Parties or the
other applicable members of the Affiliated Group. The Accounting Principles
shall provide a mechanism for validating an Expenditure and all allocations of
an Expenditure. If a Party believes that the determination or allocation of any
Expenditure is inconsistent with the Accounting Principles, then such Party
shall notify the other Party in writing of the specific manner in which the
first Party regards such determination or allocation to be deficient or
objectionable. The second Party shall either correct or change such
determination or allocation in accordance with the notice, or, if the second
Party disagrees with first Party’s notice, disputes shall be resolved in
accordance with Section 17.10 of this Agreement. Owner’s auditors and the Audit
Committee of the GP may make reasonable suggestions on accounting relating to
this Agreement, then the Westlake Parties will reasonably cooperate with Owner
in addressing such changes; provided, the implementation of such suggestions
shall be subject to the mutual agreement of Owner and the Westlake Parties.

(e) There shall be no duplication of charges for the same Expenditure. Likewise,
no duplication of an Expenditure that has been charged to a Party under any
other agreement between the Parties may occur.

 

Schedule 7