Latex Joint Venture Option Agreement, dated June 17, 2010



 Exhibit 10.12 
 EXECUTION COPY 
 LATEX JOINT VENTURE OPTION AGREEMENT 

LATEX JOINT VENTURE OPTION AGREEMENT, dated as of June 17, 2010 (this “Agreement”), among THE DOW CHEMICAL COMPANY,
a Delaware corporation (“Dow”), STYRON LLC, a Delaware limited liability company, and STYRON HOLDING B.V., a limited liability company (besloten vennootschap) incorporated under the laws of the Netherlands (together with
Styron LLC, the “Styron Parties”). 
 WHEREAS, Dow, the Styron Parties and Styron S.à.r.l., a limited
liability company (Société à responsabilité limitée) formed under the laws of Luxembourg (as assignee of STY Acquisition Corp.) (the “Purchaser”) have entered into a Sale and Purchase
Agreement, dated as of March 2, 2010 (the “Sale and Purchase Agreement”), pursuant to which Dow has agreed to sell, and Purchaser has agreed to acquire, the Styron Equity Interests; and 

WHEREAS , as a condition to the willingness of Dow to enter into the Sale and Purchase Agreement, the Styron Parties have agreed to grant
Dow an option to purchase 50% of the issued and outstanding interests (the “Interests”) in a joint venture (the “Joint Venture”) to be formed by Dow and the Styron Parties with respect to the Emerging Markets SB
Latex Business. 
 NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein
and in the Sale and Purchase Agreement, and intending to be legally bound hereby, the parties hereto hereby agree as follows: 

ARTICLE I 

THE OPTION 
 SECTION 1.01. Grant and Exercise of Option 
 The Styron Parties hereby
grant to Dow an irrevocable option (the “Option”) to purchase, on the terms and subject to the conditions set forth herein, the Interests at a cash purchase price equal to the Fair Market Enterprise Value (the “Purchase
Price”). The Option may be exercised by Dow upon written notice (the “Option Exercise Notice”) to the Styron Parties at any time after the first anniversary of the Closing Date and prior to the Termination Date. The Option
shall terminate and be of no further force and effect upon the earlier to occur of (i) the fifth anniversary of the Closing Date, and (ii) the date of the closing of the first underwritten public offering of the equity interests of the
Styron Group (or its successor) (an “IPO”) pursuant to a registration statement filed pursuant to the Securities Act of 1933, as amended (such date being referred to herein as the “Termination Date”);
provided, that Dow will not have the right to exercise the Option after the forty-fifth (45th) day following the date on which the Styron Parties provide written notice (“Styron Notice”) to Dow that it has filed such a
registration statement for an IPO with the Securities Exchange Commission (it being understood that Dow will have the right to exercise the Option if the Styron Parties do not consummate an IPO within 180 days of the delivery of such Styron Notice).
Notwithstanding the foregoing sentence, (i) Dow shall be entitled to purchase the Interests in the event that it has exercised the Option in accordance with the terms hereof prior to the Termination Date and (ii) Styron Parties’
obligation to sell the Interests shall be subject to the restrictive covenants contained in its debt 







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 financing agreements as in effect from time to time; provided that such covenants do not adversely materially discriminate against such Interests compared to the assets of the Styron Parties taken
as a whole. 
 SECTION 1.02. Joint Venture Formation and Governance 

(a) In the event that Dow exercises the Option, the parties hereto shall as soon as reasonably practicable: (i) form the Joint
Venture, (ii) enter into a joint venture formation agreement (the “Joint Venture Formation Agreement”) pursuant to which all of the assets of the Emerging Markets SB Latex Business shall be contributed by the Styron Group to
the Joint Venture (which agreement shall contain customary representations, warranties covenants and indemnities), (iii) enter into a shareholders agreement on customary terms including with respect to the governance of the Joint Venture (which
agreement shall include the Governance Principles), and (iv) enter into customary ancillary agreements with respect to the Joint Venture and the transfer of the Interests to Dow (the agreements referred to in clauses (ii) through
(iv) collectively, the “Transaction Documents”). The closing of the transactions contemplated by this Agreement (the JV Closing”) shall occur as soon as all required approvals and consents of Governmental
Authorities have been obtained. 
 ARTICLE II 
 ADDITIONAL AGREEMENTS 
 SECTION 2.01. New Plants (a) From the
date of this Agreement until the JV Closing, the Styron Parties shall have the right to assess and explore opportunities for the Emerging Markets SB Latex Business with respect to new plants for the manufacture of SB Latex Products at existing and
planned Dow sites in the Covered Territories which plants shall receive site services consistent with the terms and conditions set forth in the site services agreements entered into by Dow and the members of the Styron Group in connection with the
transactions contemplated by the Sale and Purchase Agreement; provided, however, that any arrangement contemplated by this paragraph (a) shall be subject to the negotiation and execution of definitive documentation in each
party’s sole and absolute discretion. 
 (b) Following the JV Closing, the Joint Venture shall have the right to assess and
explore opportunities for the Emerging Markets SM Latex Business with respect to new plants for the manufacture of SB Latex Products at existing and planned Dow sites in the Covered Territories which plants shall receive site services consistent
with the terms and conditions set forth in the site services agreements entered into by Dow and the members of the Styron Group in connection with the transactions contemplated by the Sale and Purchase Agreement, provided, however,
that any arrangement contemplated by this paragraph (b) shall be subject to the negotiation and execution of definitive documentation in each party’s sole and absolute discretion. 

(c) Following the JV Closing, Dow shall have the right to assess and explore opportunities with respect to new plants for the manufacture
of products at existing and planned Joint Venture sites which plants shall receive site services consistent with the terms and conditions set forth in the site services agreements entered into by Dow and the members of the


  
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 Styron Group in connection with the transactions contemplated by the Sale and Purchase Agreement; provided, however, that any arrangement contemplated by this paragraph (c) shall be
subject to the negotiation and execution of definitive documentation in each party’s sole and absolute discretion. 

SECTION 2.02. Qualified Bidder. Prior to the Termination Date Dow will consider the Styron Parties to be “qualified
bidders” in respect of any publicly announced divestiture in which the Styron Parties have expressed their written interest; provided, however, that Dow shall not be obligated to give any member of the Styron group any
preferential treatment or enter into any agreement with the Styron Parties in connection with any such divestiture. For the avoidance of doubt, no preferential treatment shall be given to any bid submitted by the Styron Parties in connection with
any such divestiture and Dow shall retain the right, in its sole and absolute discretion, to enter into any agreement with any third party with respect to any such divestiture. 

SECTION 2.03 Further Actions The parties hereto shall and shall cause their respective Affiliates to, use their reasonable best
efforts to take, or cause to be taken, all appropriate action, to do, or cause to be done, all things necessary, proper or advisable under applicable Law, and to execute and deliver this Agreement and, in the event that Dow exercises the Option and
subject to the terms of this Agreement, the Transaction Documents and such documents and other papers and to obtain such consents and approvals as may be required to carry out the provisions of this Agreement and the Transaction Documents or to
consummate and make effective the transactions contemplated hereby and thereby. 
 ARTICLE III 

FAIR MARKET ENTERPRISE VALUE 
 SECTION 3.01. Determination of Fair Market Enterprise Value The fair market enterprise value of the Interests means a cash price that an unaffiliated third party would be willing to pay to acquire
the Interests in an arm’s-length transaction net of any debt attributable to the Emerging Markets SB Latex Business (the “Fair Market Enterprise Value”). The Fair Market Enterprise Value shall be determined as follows:

 (a) Upon receipt of the Option Exercise Notice by the Styron Parties, Dow and the Styron Parties shall each appoint one or
several representative(s) to negotiate in good faith in order to agree upon the Fair Market Enterprise Value. In the event that such representatives are unable to agree upon the Fair Market Enterprise Value within 30 days of the Styron Parties’
receipt of the Option Exercise Notice, then Dow and the Styron Parties shall each designate one investment banking firm of recognized international standing to determine the Fair Market Enterprise Value. Within 45 days after such appointment, each
investment banking firm shall have determined the Fair Market Enterprise Value and shall have delivered such determinations to Dow and the Styron Parties. In the event that the difference between such determinations is equal to or less than 10% of
the higher determination of Fair Market Enterprise Value, then the Fair Market Enterprise Value shall be the average of the two determinations In the event that the difference between such determinations is greater than 10% of the higher


  
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 determination of Fair Market Enterprise Value, Dow and the Styron Parties shall within 30 days of their receipt of such determinations, reasonably agree upon and appoint an investment banking firm of
recognized international standing (the “Neutral Appraiser”) to determine the Fair Market Enterprise Value. The Neutral Appraiser shall, within 45 days of such appointment, make a determination as to the Fair Market Enterprise Value;
provided, that such value shall not (i) exceed the higher determination of Fair Market Enterprise Value described in paragraph (a) or (ii) be less than the lower determination of Fair Market Enterprise Value described in
paragraph (a). 
 (b) The Styron Parties shall provide reasonable access during normal business hours to each of the designated
investment banking firms to members of management of the Styron Parties and to the books and records of the Styron Parties so as to allow such investment banking firms to conduct due diligence examinations in scope and duration as are customary in
valuations of this kind (subject to the investment banking firms entering into an appropriate confidentiality agreement and provided that access by Dow’s appointed investment bank shall be conducted at Dow’s sole expense and in such a
manner as not to interfere with the normal operations of the business of the respective Styron Parties.). Dow and the Styron Parties agree to cooperate with each of the investment banking firms and to provide such information as may reasonably be
requested. Notwithstanding anything to the contrary in this Agreement, the parties hereto shall not be required to disclose any information to any other party if such disclosure would jeopardize any attorney-client or other legal privilege or
contravene any applicable laws fiduciary duty or agreement entered into prior to the date of this Agreement. 
 (c) All costs
and expenses, including fees and disbursements of counsel, Investment bankers and accountants, incurred in connection with the determination of Fair Market Enterprise Value shall be borne by the party incurring such costs and expenses;
provided, that the costs and expenses of the Neutral Appraiser shall be borne equally by the parties. 
 ARTICLE IV

 DEFINITIONS 
 SECTION 4.01. Definitions. Terms used but not defined in this Agreement shall have the meanings ascribed to them in the Sale and Purchase Agreement As used in this Agreement, the following terms
shall have the following meanings: 
 “Covered Territories” means Asia, Latin America, the
Middle East, Africa, Eastern Europe, Russia and India 
 “Emerging Markets SB Latex Business”
means the research, development manufacture, distribution, marketing and sale of the SB Latex Products in the Covered Territories including any assets relating thereto. 

“Governance Principles” means the governance principles substantially similar to, unless otherwise agreed
by the parties, the governance principles contained in the Limited Liability Company Agreement of Americas Styrenics LLC, dated as of May 1, 2008, by and among Chevron Phillips Chemical Company LP, a Delaware limited


  
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 partnership, Dow and Americas Styrenics LLC, a Delaware limited liability company, including Article 3 through Article 7 and Article 12 thereof. 

ARTICLE V 

MISCELLANEOUS 
 SECTION 5.01. Expenses. Except as otherwise specified in this Agreement, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated by this Agreement shall be borne by the party incurring such costs and expenses, whether or not the JV Closing shall have occurred. 

SECTION 5.02. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be
given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service or by facsimile to the respective parties hereto at the following addresses (or at
such other address for a party hereto as shall be specified in a notice given in accordance with this Section 5.02): 
  

	 	(a)	if to Dow: 

 The Dow Chemical
Company 
 2030 Dow Center 
 Midland, Michigan 48674 
 Facsimile:  (989) 638-9347 

Attention: Executive Vice President and General Counsel 
 with a copy to: 
 Shearman & Sterling LLP 

599 Lexington Avenue 
 New York, NY 10022-6069 
 Facsimile:  (212) 848-7179 

Attention: George A. Casey, Esq. 
  

	 	(b)	if to the Styron Parties: 

 c/o
Bain Capital Partners, LLC 
 590 Madison Avenue, 42nd Floor 

New York, NY 10022 
 Facsimile:  (212) 421-2225 
 Attention: Stephen M. Zide 

with a copy to: 

  
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 Kirkland & Ellis LLP 

601 Lexington Avenue 
 New York, NY 10022 
 Facsimile:  212) 446-6460 

Attention: Eunu Chun, Esq. 
 SECTION 5.03. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party hereto. Upon such
determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as
possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible. 

SECTION 5.04. Assignment. This Agreement and the rights and obligations hereunder may not be assigned by operation of Law or
otherwise without the express written consent of Dow and the Styron Parties (which consent may be granted or withheld in the sole and absolute discretion of each of Dow or the Styron Parties, as applicable), as the case may be, and any attempted
assignment without such consent shall be null and void. 
 SECTION 5.05. Amendment. This Agreement may not be amended or
modified except (i) by an instrument in writing signed by, or on behalf of, Dow and the Styron Parties that expressly references the Section of this Agreement to be amended; or (ii) by a waiver in accordance with Section 5.06.

 SECTION 5.06. Waiver. Any party to this Agreement may (i) extend the time for the performance of any of the
obligations or other acts of the other parties; (ii) waive any inaccuracies in the representations and warranties of the other parties contained herein or in any document delivered by the other parties pursuant hereto; or (iii) waive
compliance with any of the agreements of the other parties or conditions to such parties’ obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party or parties to
be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any
party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights. 
 SECTION 5.07. No
Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement. 

SECTION 5.08. Specific Performance. The parties hereto acknowledge and agree that the parties hereto would be irreparably damaged
if any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached 

  
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 and that any non-performance or breach of this Agreement by any party hereto could not be adequately compensated by monetary damages alone and that the parties hereto would not have any adequate remedy at
law. Accordingly, in addition to any other right or remedy to which any party hereto may be entitled, at law or in equity (including monetary damages), such party shall be entitled to enforce any provision of this Agreement by a decree of specific
performance and to temporary, preliminary and permanent injunctive relief to prevent breaches or threatened breaches of any of the provisions of this Agreement without posting any bond or other undertaking. The parties hereto further acknowledge and
agree that they shall not contest the appropriateness of specific performance as a remedy. 
 SECTION 5.09. Governing
Law. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS OR PRINCIPLES THAT MIGHT REFER THE GOVERNANCE OR
CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. 
 (b) ALL ACTIONS ARISING OUT OF OR RELATING TO THIS
AGREEMENT SHALL BE HEARD AND DETERMINED EXCLUSIVELY IN THE DELAWARE COURT OF CHANCERY; PROVIDED, HOWEVER, THAT IF SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH ACTION, SUCH ACTION SHALL BE HEARD AND DETERMINED EXCLUSIVELY IN ANY
DELAWARE STATE COURT OR UNITED STATES FEDERAL COURT SITTING IN THE STATE OF DELAWARE OR IN THE BOROUGH OF MANHATTAN. CONSISTENT WITH THE PRECEDING SENTENCE EACH OF THE PARTIES HERETO HEREBY (I) SUBMITS GENERALLY AND UNCONDITIONALLY TO THE
EXCLUSIVE JURISDICTION OF THE DELAWARE COURT OF CHANCERY OR, IF SUCH COURT DOES NOT HAVE JURISDICTION, ANY DELAWARE STATE COURT OR FEDERAL COURT SITTING IN THE STATE OF DELAWARE OR IN THE BOROUGH OF MANHATTAN, FOR THE PURPOSE OF ANY ACTION ARISING
OUT OF OR RELATING TO THIS AGREEMENT BROUGHT BY ANY PARTY HERETO; (II) IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE, OR OTHERWISE, IN ANY SUCH ACTION, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE
ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE ACTION IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE ACTION IS IMPROPER, OR THAT THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT MAY NOT BE ENFORCED IN OR BY ANY OF THE ABOVE-NAMED COURTS; (III) AGREES NOT TO BRING OR PERMIT ANY OF ITS AFFILIATES TO BRING ANY ACTION IN ANY JURISDICTION WITH RESPECT TO THE MATTERS DESCRIBED IN THIS SECTION 5.09 OTHER THAN THE
EXCLUSIVE JURISDICTION PROVIDED IN SECTION 5.09; AND (IV) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE PARTY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 5.02, IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE PARTY IN ANY SUCH 

  
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 PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. 
 SECTION 5.10. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION OR
LIABILITY DIRECTLY OR INDIRECTLY ARISING OUT OF UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY SUCH ACTION OR LIABILITY SEEK TO ENFORCE THE FOREGOING WAIVER; AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.10. 
 SECTION 5.11. Interpretation. Section 1.03 (Interpretation and Rules of Construction) of the Sale and Purchase Agreement is incorporated herein by reference and shall apply to this Agreement
mutatis mutandis. 
 SECTION 5.12. Counterparts. This Agreement may be executed and delivered (including by
facsimile or other means of electronic transmission, such as by electronic mail in “pdf’ form) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same agreement. 

  
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 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the date first written above by its respective officers thereunto duly authorized. 

 

			
	THE DOW CHEMICAL COMPANY
		
	By:	 	 /s/ Stephen Doktycz

	


  
	 	Name: Stephen Doktycz
	 	Title: Authorized Representative



[Signature Page to the Latex Joint Venture Agreement] 

  








 
			
	STYRON LLC
		
	By:	 	 /s/ Timothy King

	



	 	Name: Timothy King
	 	Title: Authorized Representative



[Signature Page to the Latex Joint Venture Agreement] 







 
			
	STYRON HOLDING B.V.
		
	By:	 	 /s/ Timothy King

	


  
	 	Name: Timothy King
	 	Title: Authorized Representative



[Signature Page to the Latex Joint Venture Agreement]