Document:

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                                                                EXHIBIT 10.30(a)

                                FIRST AMENDMENT
                                       TO
               AMENDED AND RESTATED MASTER TRANSACTION AGREEMENT

This First Amendment to the Amended and Restated Master Transaction Agreement
(this "Amendment") is made as of December 18, 2000 by and between Bayer AG, a
German corporation ("Bayer AG"), Bayer Corporation, an Indiana corporation
("Bayer Corp." and together with Bayer AG, "Bayer"), and Lyondell Chemical
Company, a Delaware corporation ("Lyondell").

                                    RECITALS

(A)  The parties (i) entered into the Master Transaction Agreement dated as of
     November 16, 1999 for the formation of a U.S. propylene oxide joint venture
     and the sale of Lyondell's worldwide polyols business to Bayer and (ii)
     subsequently entered into the Amended and Restated Master Transaction
     Agreement dated as of March 31, 2000 in connection with the formation of
     the PO Joint Venture and the closing of the Asset Purchase Agreement (such
     agreement as amended, the "MTA");

(B)  Lyondell and Bayer AG, through their respective subsidiaries, have agreed
     to jointly pursue the development and operation of a new PO/SM plant
     ("PO-11") at Maasvlakte, The Netherlands;

(C)  In connection with the agreements between the parties concerning PO-11, the
     parties have agreed that Bayer shall receive certain expanded technology
     rights for PO-11 and future joint ventures between Lyondell and Bayer; and

(D)  The parties desire to further amend the MTA on the terms set forth herein.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the parties, it is hereby agreed as follows:

1.   Effectiveness of Amendment; Defined Terms.

     Except as amended by this Amendment, all the terms and provisions of the
     MTA shall remain in full force and effect among the parties thereto.
     Capitalized terms used and not otherwise defined herein shall have the
     meanings given such terms in the MTA.

2.   Amendment to Section 11.04.

     The following amendments are hereby made to Section 11.04 of the MTA:
<PAGE>

     (a)  The third sentence in Section 11.04(b)(ii) is deleted in its entirety
          and replaced by the following:

          Bayer shall pay a share of Lyondell's actual documented costs of
          planning, design and construction of the New Plant (A) on a timetable
          which matches Lyondell's capital outlays for such New Plant and (B)
          based upon the ratio of (1) the New Capacity Equity Amount to (2) the
          total number of pounds of rated PO capacity which is projected by
          Lyondell to be produced by the New Plant.  Bayer shall pay a
          technology licensing fee or royalty charge to be negotiated by the
          parties subject to the following limitations:  If the New Plant
          produces SM as a Co-Product, Bayer shall not pay any technology
          licensing fee or royalty charge with respect to any PO/SM technology
          developed by the Lyondell Group, unless the Bayer Group fails to pay
          its full 50% share of any Existing PO/Co-Products R&D Budget (i.e.,
          without being limited by the Bayer Budget Cap) for the Year 2001 or
          any year thereafter.  If the Bayer Group pays a share of the Existing
          PO/Co-Products R&D Budget as limited by the Bayer Budget Cap for any
          such year, then the parties shall negotiate an appropriate technology
          licensing fee or royalty charge, taking into account the cumulative
          Bayer Group's Existing PO/Co-Products R&D Contributions compared to a
          50% share of the cumulative amount of the Existing PO/Co-Products R&D
          Budgets for the appropriate period beginning with the Year 2001.  If
          the New Plant produces TBA as a Co-Product (with Bayer's agreement in
          accordance with the first sentence of this Section 11.04(b)(ii)), then
          Lyondell may charge Bayer a technology licensing fee or royalty charge
          for process improvements that were not commercialized in any of the
          Existing Plants as of the Effective Date.

     (b)  Section 11.04(b)(iv) is amended and restated as follows:

          Lyondell and Bayer shall negotiate in good faith to determine the
          terms of any license of any technology associated with such New
          Capacity Equity Interest, including provisions for the protection and
          preservation of the going concern value of Lyondell's PO and PO
          derivative businesses.  Bayer shall not pay any additional technology
          licensing fee or royalty charge except as permitted under
          Section 11.04(b)(ii).

     (c)  The second sentence in Section 11.04(c)(ii) is deleted and replaced
          by the following:

          Under the Existing Capacity Equity Agreement, (A) Lyondell shall sell
          Bayer the right (the "Existing Capacity Equity Interest") to take the
          Existing Capacity Amount for an initial capital cost equivalent to the
          planning, design and construction cost associated with Lyondell's then
          most recent commercially proven technology, (B) delivery of the
          Existing Capacity Amount shall take effect on a timetable that would
          have existed if a New Plant was built under the terms of Section
          11.04(b) above unless earlier delivery is mutually agreed by the
          parties and (C) Bayer shall receive long-term rights in the Existing
          Capacity Amount

                                       2
<PAGE>

          produced at the plant(s) in which Bayer is given capacity rights
          subject to ratable curtailment. The Existing Capacity Amount shall
          include associated Co-Product capacity unless Lyondell determines that
          Bayer will not participate in Co-Product. Bayer shall pay a technology
          licensing fee or royalty charge to be negotiated by the parties
          subject to the limitations set forth in Section 11.04(b)(ii).

     (d)  The first sentence in Section 11.04(c)(iii) is amended and restated as
          follows:

          Lyondell and Bayer shall negotiate in good faith to determine the
          terms of any license of any technology associated with such Existing
          Capacity Equity Interest, including provisions for the protection and
          preservation of the going concern value of Lyondell's PO and PO
          derivative businesses.  Bayer shall not pay any additional technology
          licensing fee or royalty charge except as permitted under
          Section 11.04(b)(ii).

     (e)  Section 11.04(d)(iii) is amended by deleting the following at the
          end of such Section:

          "up to the amount of PO that Bayer would have received had it
          concluded the transaction under discussion between the parties under
          this Section 11.04 at the time of negotiations."

     (f)  For purposes of this Section 11.04 and Section 11.06, the following
          terms shall have the following meanings:

          "Existing PO/Co-Products R&D Contributions" means the sum of (i) the
          Bayer Tech LP Monthly Technology Budget Payments and (ii) the Bayer AG
          Annual Technology Payment.

          "Bayer Tech LP Monthly Technology Budget Payments" means the monthly
          amount payable by Bayer Tech LP to contribute to the Existing PO/Co-
          Products R&D Budget under the terms of the Technology Partnership
          Agreement (as amended).

          "Bayer AG Annual Technology Payment" means 25% of the Existing PO/Co-
          Products R&D Budget, provided that such annual payment shall not
          exceed 50% of the Bayer Budget Cap without Bayer's prior written
          consent.

          "Existing PO/Co-Products R&D Budget" means the annual research and
          development expenses for process development (including related
          support) for the Lyondell Group directed at the PO/SM and PO/TBA
          processes, excluding any expenses for Lyondell Group research and
          development projects relating exclusively to the TBA Co-Product, such
          as, for example, isooctane research and development projects.

                                       3
<PAGE>

          "Bayer Budget Cap" means $2.0 million (as such threshold shall be
          adjusted by agreement of the parties hereto) as of January 1 following
          each fifth anniversary of the Closing Date taking into account
          inflation and other factors).

3.   Amendment to Section 11.06.

     Section 11.06(c) is amended and restated as follows:

     If the Non-Building Party elects to participate in such New PO Plant and
     the parties reach agreement on the material terms for the New PO Plant and
     their respective participation, then (i) each party shall be obligated to
     off-take (or provide for the off-take of) any Co-Product produced in such
     New PO Plant in an amount proportional to its PO capacity in such New PO
     Plant and (ii) each party shall pay a proportionate amount of the costs of
     planning, design and construction of such New PO Plant.  The parties shall
     negotiate in good faith to determine the technology contributed to such New
     PO Plant by either party and the terms of any technology licensing fee or
     royalty charge for any technology contributed or licensed in connection
     with such New PO Plant by either party.  The following two sentences apply
     to technology contributed or licensed by Lyondell.  If the New Plant
     produces SM as a co-product, Bayer shall not pay a technology licensing fee
     or royalty charge to Lyondell with respect to PO/SM technology developed by
     the Lyondell Group, unless the Bayer Group fails to pay its full 50% share
     of any Existing PO/Co-Products R&D Budget (i.e., without being limited by
     the Bayer Budget Cap) for the Year 2001 or any year thereafter.  If the
     Bayer Group pays a share of Existing PO/Co-Products R&D Budgets as limited
     by the Bayer Budget Cap for any such year, then the parties shall negotiate
     an appropriate technology licensing fee or royalty charge, taking into
     account the cumulative Bayer Group's Existing PO/Co-Products R&D
     Contributions compared to a 50% share of the cumulative amount of the
     Existing PO/Co-Products R&D Budgets for the appropriate period beginning
     with the Year 2001.  If the New Plant produces TBA as a Co-Product, then
     Lyondell may charge Bayer a technology licensing fee or royalty charge for
     process improvements that were not commercialized in any of the Existing
     Plants as of the Effective Date.

4.  Correction to Section 11.11.

     The second sentence of Section 11.11(d) is amended and restated as follows:

     "If the parties fail to reach agreement within the time period necessary to
     enable the Offering Party to proceed with the New PO Opportunity on its
     own, then the Offering Parent may proceed with the New PO Opportunity
     without the participation of the Offeree Parent and (if Bayer is the
     Offeree Parent) Bayer shall be released from its exclusive purchase
     obligations under the Market Based Supply Agreement up to the amount of PO
     which Bayer would have acquired in connection with such New PO
     Opportunity."

5.  Bayer Additional Technology Payment.

                                       4
<PAGE>

     A new Section 11.13 is added to Article XI as follows:

     SECTION 11.13  Bayer Additional Technology Payments.

     (a)  In consideration of the amendments to Sections 11.04 and 11.06
          contained in this Amendment, and in partial consideration for the
          licensing of the PO/SM technology of the Lyondell Group for PO-11,
          Bayer shall pay or cause to be paid:

          (i)    US $4,400,000 in immediately available funds on the PO-11
                 Signing Date. No further technology licensing fee or royalty
                 charge shall be payable in respect of PO-11 during the term of
                 the PO-11 Partnership Agreement, provided the Bayer Group pays
                 its full 50% share of each Existing PO/Co-Products R&D Budget
                 (i.e., without being limited by the Bayer Budget Cap) for the
                 Year 2001 and every year thereafter. If the Bayer Group does
                 not pay its full 50% share of any Existing PO/Co-Products R&D
                 Budget (i.e., without being limited by the Bayer Budget Cap),
                 then notwithstanding the provisions of the PO-11 Partnership
                 Agreement and the PO-11 Operating Agreement, Bayer and Lyondell
                 shall agree to an appropriate technology licensing fee or
                 royalty charge in respect of any Capital Project which
                 implements process development research at PO-11. Such
                 technology licensing fee or royalty charge shall take into
                 account the cumulative Existing PO/Co-Products R&D
                 Contributions made by the Bayer Group for the Year 2001 and
                 every year thereafter compared to 50% of the cumulative amount
                 of the Existing PO/Co-Products R&D Budgets over the same
                 period.

          (ii)   A one-time amount equal to US $1,500,000, plus interest at
                 LIBOR accruing beginning as of the PO-11 Signing Date,
                 compounded quarterly, on the earlier of the next to occur of
                 (i) the date of signing by both parties (or their designated
                 Affiliates) of definitive documents for a PO/SM plant employing
                 technology of Lyondell or its Affiliates that is constructed
                 following the date hereof (excluding for this purpose PO-11) in
                 which each of Lyondell and Bayer (or their designated
                 Affiliates) have an equity interest or capacity right or (ii)
                 Bayer obtaining an Existing Capacity Equity Interest pursuant
                 to Section 11.04(c) of this Agreement.

          (iii)  The Bayer AG Annual Technology Payment in immediately available
                 funds on July 1 of each year beginning in 2001.

     (b)  For purposes of this Section 11.13, the following definitions shall
          apply:

          "PO-11 Operating Agreement" means the operating agreement between
          Lyondell Chemical Nederland, Ltd. and Lyondell Bayer Manufacturing
          Maasvlakte VOF dated as of the PO-11 Signing Date.

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<PAGE>

          "PO-11 Partnership Agreement" means the General Partnership Agreement
          of Lyondell Bayer Manufacturing Maasvlakte VOF entered into between
          Bayer Polyurethanes, B.V. and Lyondell PO-11 C.V., dated as of the
          PO-11 Signing Date.

          "PO-11 Signing Date" means 18 December 2000.

                         [Remainder of page left blank]

                                       6
<PAGE>

     IN WITNESS WHEREOF, the Parties have executed this Amendment as of the
date first listed above.

BAYER CORPORATION                LYONDELL CHEMICAL COMPANY

By: /s/ HANS-J. KAISER           By: /s/ DAVID M. BALDERSTON
   -------------------------        --------------------------
Name: Hans-J. Kaiser             Name: David M. Balderston
    ------------------------         -------------------------
Title: Head of BG PU             Title: Director, PO Venture
     -----------------------          ------------------------

BAYER AG

By: /s/ HANS-J. KAISER
   ---------------------------
Name:  Hans-J. Kaiser
     --------------------------
Title: Head of BG PU
      -------------------------

By:  /s/ STEFAN WUNDERLICH
   ----------------------------
Name:  Stefan Wunderlich
     --------------------------
Title: Legal Counsel
      -------------------------<PAGE>
                                                                   EXHIBIT 10.34

                             DATED 18 DECEMBER 2000

      ____________________________________________________________________

                         GENERAL PARTNERSHIP AGREEMENT

      ____________________________________________________________________

                                    BETWEEN

                            BAYER POLYURETHANES B.V.

                                      AND

                              LYONDELL PO-11 C.V.

<PAGE>

                               TABLE OF CONTENTS

ARTICLE 1    DEFINITIONS...................................................    1

ARTICLE 2    FORMATION OF PARTNERSHIP......................................    2
   2.1       Formation of the Partnership..................................    2
   2.2       Partnership Percentages.......................................    2

ARTICLE 3    NAME, SEAT, TRADE REGISTER, MANAGING PARTNER..................    2
   3.1       Name of the Partnership.......................................    2
   3.2       Seat of the Partnership.......................................    2
   3.3       Registration..................................................    2
   3.4       Managing Partner..............................................    2
   3.5       Solely a Manufacturing Joint Venture..........................    2

ARTICLE 4    PURPOSE AND BUSINESS OF THE PARTNERSHIP.......................    2
   4.1       Business of the Partnership...................................    2
   4.2       Activities....................................................    3

ARTICLE 5    TERM..........................................................    3
   5.1       Initial Contract Term.........................................    3
   5.2       Extension of the Term.........................................    3

ARTICLE 6    CAPITAL CONTRIBUTIONS.........................................    3
   6.1       General.......................................................    3
   6.2       Working Capital...............................................    6

ARTICLE 7    ACCOUNTS IN THE NAME OF THE PARTNERS..........................    7
   7.1       Capital Accounts..............................................    7
   7.2       Current Accounts..............................................    8

ARTICLE 8    MANAGEMENT....................................................    8
   8.1       General.......................................................    8
   8.2       Operating Agreement...........................................   12

ARTICLE 9    OFFTAKE RIGHTS, MONTHLY PRODUCTION AND LIFTING PLANNING,
             SPARE CAPACITY, DELIVERY OF PRODUCT, SHARED STORAGE
             FACILITIES....................................................   13
   9.1       Offtake Rights of the Partners................................   13
   9.2       Monthly Production and Lifting Nominations....................   13
   9.3       Cost Allocations..............................................   14
   9.4       Bayer Spare Capacity..........................................   15
   9.5       Production Loss...............................................   17
   9.6       Product Specifications........................................   17
   9.7       Delivery and Testing of Products..............................   17
   9.8       Risk of loss of Raw Materials.................................   17
   9.9       Shared Storage Facilities.....................................   18

ARTICLE 10   PAYMENT OF OPERATING COSTS....................................   19

                                       i
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  10.1       Invoicing for Operating Costs.................................   19
  10.2       Fixed Costs...................................................   19
  10.3       Variable Costs................................................   19
  10.4       Depreciation..................................................   19
  10.5       Special Adjustments...........................................   19
  10.6       Payment of Operating Costs....................................   20
  10.7       Disputes Regarding Operating Costs Statements.................   20
  10.8       Billing Addresses.............................................   20

ARTICLE 11   RECORD KEEPING, REPORTING.....................................   21
  11.1       Books and Records of the Partnership..........................   21
  11.2       Partner Access to Books and Records...........................   21
  11.3       Notice of Material Events.....................................   22
  11.4       Administration of the Partnership Accounts....................   22

ARTICLE 12   FINANCIAL YEAR, ANNUAL ACCOUNTS, OTHER AUDIT RIGHTS...........   22
  12.1       Financial Years...............................................   22
  12.2       Preparation and Certification of Annual Financial Statements..   22
  12.3       Annual Accounts Approval and Disputes.........................   23
  12.4       Disputes as to Significant Monetary Amounts...................   23

ARTICLE 13   ANNUAL PLAN, FIVE YEAR DEMAND FORECAST; PARTNER SELF
             PROCUREMENT RIGHTS; DISPUTES REGARDING EHS AND PERSONNEL
             COMPENSATION EXPENDITURES.....................................   24
  13.1       Annual Plan...................................................   24
  13.2       Five Year Demand Forecast.....................................   24
  13.3       Partner Rights to Self-Procurement of Strategic Raw Materials.   25
  13.4       Disputes Regarding EHS and Personnel Compensation
               Expenditures................................................   28

ARTICLE 14   DISCRETIONARY CAPITAL PROJECTS PROPOSED BY THE PARTNERS,
             UNILATERAL CAPITAL PROJECTS...................................   29
  14.1       Discretionary Capital Projects Proposed by a Partner..........   29
  14.2       Detailed Study................................................   29
  14.3       If Both Partners Desire to Proceed with a Discretionary
               Capital Project.............................................   30
  14.4       Right to Qualified Independent Engineer Confirmation..........   30
  14.5       Unilateral Capital Projects; Unilateral Capital Project
               Threshold...................................................   30
  14.6       Risks and Benefits Borne by Proceeding Partner................   30
  14.7       Disputes Regarding any Unilateral Capital Project
               Implementation Plan.........................................   31
  14.8       Management Committee Disapproval Does Not Prohibit Proceeding
               with a Project as a Unilateral Capital Project..............   31
  14.9       Adjustment to Unilateral Capital Project......................   31
  14.10      No Rights to Technology.......................................   31

ARTICLE 15   ADJUSTMENTS OF INTERESTS FOR UNILATERAL CAPITAL PROJECTS THAT
             AFFECT CAPACITY...............................................   31
  15.1       Unilateral Capital Projects that Increase Production
               Capacity....................................................   31
  15.2       Change to Offtake Percentages.................................   31
  15.3       Allocation of Capital Costs...................................   32

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<PAGE>

ARTICLE 16   ALLOCATION OF PROFITS AND LOSSES..............................   32

ARTICLE 17   DISTRIBUTIONS.................................................   32
  17.1       Distributions of Cash.........................................   32
  17.2       Classification of Proceeds....................................   32

ARTICLE 18   RATIFICATION OF PRIOR BUSINESS................................   32

ARTICLE 19   INDEMNIFICATION, WAIVERS......................................   33
  19.1       Indemnification of the Operator...............................   33
  19.2       Indemnification for Product Liability and Related Claims......   33
  19.3       Indemnification for Failure to Timely Make Payment............   33
  19.4       Indemnification Procedures....................................   33
  19.5       Waiver of Claims..............................................   34
  19.6       No Warranties or Indemnities..................................   34
  19.7       Liability of Partners.........................................   35

ARTICLE 20   USE OF TECHNOLOGY.............................................   35
  20.1       Use by Bayer Partner of Lyondell License......................   35
  20.2       Accommodation Fee.............................................   35
  20.3       No Application to Bayer Spare Capacity Sold to Lyondell.......   35
  20.4       Certification.................................................   35
  20.5       No Technology Transfer or Grant of License under this
               Agreement...................................................   36
  20.6       Lyondell Group Technology.....................................   36

ARTICLE 21   COMPETITION...................................................   36

ARTICLE 22   RESTORATION FOLLOWING CASUALTY LOSS...........................   36
  22.1       Restoration Absent Mutual Agreement for First Twenty Years....   36
  22.2       No Restoration Following Major Casualty Occurring After First
               Twenty Years................................................   36
  22.3       Restoration...................................................   36
  22.4       Where Facilities Are Not Being Restored.......................   37
  22.5       Decisions.....................................................   37
  22.6       Definition of Major Casualty..................................   37

ARTICLE 23   RESTRICTION OF TRANSFERS AND PLEDGES..........................   37
  23.1       Prohibition on Transfer Unless Exception Applies..............   37
  23.2       Permitted Transfers to an Affiliate...........................   37
  23.3       Certain Transfers in Connection with Successor Parent Transfer
               or Permitted Successor......................................   37
  23.4       Assumption of Obligations by Assignee.........................   38
  23.5       Admission of a New Partner....................................   39
  23.6       Continuation of the Partnership...............................   39
  23.7       New Partners Bound by Terms and Conditions of this Agreement..   39
  23.8       No Application to Transfers or Pledges of Ownership Interests
               within Partners.............................................   39

ARTICLE 24   TERMINATION, DISSOLUTION OF THE PARTNERSHIP...................   39
  24.1       Events of Dissolution and Liquidation.........................   39
  24.2       No Dissolution of the Partnership Upon Bankruptcy.............   39

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<PAGE>

ARTICLE 25   CONTINUATION OR LIQUIDATION...................................   39
  25.1       Winding Up or Continuation of the Partnership.................   39
  25.2       Winding Up and Liquidation....................................   40
  25.3       Offering of Partnership Assets................................   40
  25.4       Payment of Debts; Liquidating Distributions...................   40
  25.5       Liquidation Report............................................   40

ARTICLE 26   CLAIMS AFTER THE DISSOLUTION OF THE PARTNERSHIP...............   41

ARTICLE 27   CONFIDENTIALITY...............................................   41
  27.1       Obligation Not to Disclose or Misuse Confidential Information.   41
  27.2       Disclosures Required by Law...................................   41
  27.3       Confidential Information Remains Property of Disclosing Party.   42
  27.4       Survival......................................................   42
  27.5       Relationship With License Agreements..........................   42

ARTICLE 28   MISCELLANEOUS.................................................   42
  28.1       Notices.......................................................   42
  28.2       Construction..................................................   44
  28.3       Severability..................................................   44
  28.4       Tax Matters...................................................   44
  28.5       Governing Law.................................................   45
  28.6       Amendment and Waiver..........................................   45
  28.7       Performance Extended to Next Business Day.....................   45
  28.8       Benefits of Agreement Restricted to the Parties...............   45
  28.9       Dispute Resolution............................................   45

                                      iv
<PAGE>

                         GENERAL PARTNERSHIP AGREEMENT

     THIS GENERAL PARTNERSHIP AGREEMENT (this "AGREEMENT") is dated 18  December
2000 and is made between BAYER POLYURETHANES B.V. (the "BAYER PARTNER"), a
company incorporated under the laws of The Netherlands, having its registered
office at Weenapoint D, Weena 762, 3014 DA, Rotterdam, The Netherlands and
LYONDELL PO-11 C.V. (the "LYONDELL PARTNER"), a limited partnership formed under
the laws of The Netherlands, having its registered office at Weenapoint D, Weena
762, 3014 DA, Rotterdam, The Netherlands.

     The Bayer Partner and the Lyondell Partner are hereinafter individually
referred to as a "PARTNER" and collectively they are referred to as the
"PARTNERS".

WHEREAS:

     (A) On 31 March 2000, Lyondell entered into certain arrangements with Bayer
and Bayer Corporation pursuant to which, inter alia, the Bayer Group purchased
the Lyondell Group's world-wide polyether polyols business.  At the same time
Lyondell created a Delaware limited partnership to which certain of Lyondell's
PO and associated co-product plants were contributed by Lyondell and in which
Affiliates of Bayer Corporation purchased limited partnership interests.

     (B) As part of these arrangements, Lyondell, Bayer and Bayer Corporation
entered into the Master Transaction Agreement.  The Master Transaction Agreement
contemplates Bayer's and Lyondell's joint participation in, among other things,
a manufacturing joint venture for a grassroots "PO-11" PO/SM plant employing
technology owned by an Affiliate of Lyondell.

     (C) The Partners have agreed to form a general partnership for the
development, construction, ownership, maintenance and operation of the PO-11
Plant Facilities and the production therein of PO and SM for the Partners, have
entered into agreements to license to each Partner certain technology from an
Affiliate of Lyondell and have agreed that the Operator will be the development
manager and the operator of the PO-11 Plant Facilities in accordance with the
terms and conditions of the Operating Agreement.

     (D) In accordance with the terms and conditions of this Agreement, the
Partners wish to enter into a general partnership agreement under the laws of
The Netherlands to form a general partnership ("vennootschap onder firma").

     NOW THEREFORE, the Parties hereto agree as follows:

                           ARTICLE 1     DEFINITIONS

     Capitalised terms that are used and not otherwise defined in this Agreement
have the meanings given to them in Exhibit A.

                                       1
<PAGE>

                      ARTICLE 2  FORMATION OF PARTNERSHIP

     2.1  Formation of the Partnership. The Partners hereby form a general
partnership ("vennootschap onder firma"), hereinafter referred to as the
"PARTNERSHIP", pursuant to the laws of The Netherlands. The rights and duties of
the Partners shall be as provided in those laws and under the terms and
conditions of this Agreement.

     2.2 Partnership Percentages. The "PARTNERSHIP PERCENTAGE" means the
percentage share of each Partner in profits and losses, assets (subject to
Article 14) and voting rights in the Partnership in accordance with the terms of
this Agreement. The Partnership Percentage of the Bayer Partner and the Lyondell
Partner is 50% (fifty percent) for each Partner.

            ARTICLE 3  NAME, SEAT, TRADE REGISTER, MANAGING PARTNER

     3.1 Name of the Partnership. The name of the Partnership shall be "Lyondell
Bayer Manufacturing Maasvlakte VOF".

     3.2 Seat of the Partnership. The Partnership shall have its seat at
Rotterdam, The Netherlands.

     3.3 Registration. The Partnership shall be registered with the Trade
Register of the Chamber of Commerce at Rotterdam, The Netherlands.

     3.4 Managing Partner. The Lyondell Partner shall be the "MANAGING PARTNER",
provided, however, that upon fulfilment of any of the Lyondell Suspending
Conditions, the Bayer Partner will become the Managing Partner. Upon such event,
the references to the Lyondell Partner in its capacity as Managing Partner,
including under Article 6, Article 8, Article 10, Article 11, Article 12,
Article 13, Article 14, Article 25 and Article 26, shall be deemed changed to
refer to the Bayer Partner. Upon fulfilment of any of the Lyondell Dissolving
Conditions, the Lyondell Partner shall again become the Managing Partner.
Additionally, if a competent court grants a request for suspension of payments
pursuant to a Suspension of Payments Proceeding filed by the Lyondell Partner,
then effective upon the grant of the request, the Bayer Partner and the Lyondell
Partner acting jointly shall be the Managing Partner. Upon such event, the
references to the Lyondell Partner in its capacity as Managing Partner,
including Article 6, Article 8, Article 10, Article 11, Article 12, Article 13,
Article 14, Article 25 and Article 26, shall be deemed changed to refer to both
Partners acting jointly. If and when the suspension of payments ends without
resulting in a Lyondell Suspending Condition, then the Bayer Partner shall cease
to be a Managing Partner, effective upon the effective date of termination of
the Suspension of Payments Proceeding.

      3.5 Solely a Manufacturing Joint Venture. Neither Partner shall create the
impression through its marketing, sales or other activities that the Partnership
is more than a manufacturing joint venture.

              ARTICLE 4  PURPOSE AND BUSINESS OF THE PARTNERSHIP

     4.1 Business of the Partnership. The business of the Partnership shall
consist of the development, construction, ownership, maintenance and operation
of the PO-11 Plant Facilities and of the production therein of PO and SM for the
sole account of the Partners.

                                       2
<PAGE>

     4.2 Activities. In conducting such activities, the Partnership may lease,
purchase or sell personal and real estate property, purchase, sell or use any
kind of raw materials, energy or other supplies, enter into contracts of any
nature, employ and discharge agents or employees, make financial arrangements,
borrow or lend funds and mortgage the assets of the Partnership, participate in
and co-operate with legal entities and other functions as may be necessary or
desirable in connection with the business described in Section 4.1 of this
Agreement.

                                ARTICLE 5  TERM

     5.1 Initial Contract Term. This Agreement shall enter into force as of the
date on which it has been signed by all of the Partners and shall end on the
50th (fiftieth) anniversary of Commercial Start-up (hereinafter the "INITIAL
CONTRACT TERM"), unless previously terminated in accordance with Article 24.

     5.2 Extension of the Term. After the expiration of the Initial Contract
Term or the most recent extension period, as applicable, the Partnership shall
be extended each time under the same conditions for a period of two years,
unless one of the Partners elects to terminate the Partnership by registered
letter no later than 24 (twenty-four) months prior to the original or extended
date of expiry.

                       ARTICLE 6  CAPITAL CONTRIBUTIONS

     6.1  General.

          6.1.1  The Partners shall contribute capital to fund the PO-11 Project
                 Costs in the ratio of the Partnership Percentages. The Partners
                 acknowledge that as of the Signing Date, LCNL has incurred
                 PO-11 Project Costs in an agreed value amount of NLG
                 248,000,000 (two hundred and forty-eight million Dutch
                 Guilders), including NLG 83,000,000 (eighty-three million Dutch
                 Guilders) of PO-11 Project Costs incurred and to be incurred
                 during calendar year 2000. The Partners further acknowledge
                 that on, or within 24 (twenty-four) hours after, the Signing
                 Date, (a) the Bayer Partner shall purchase a 50% (fifty
                 percent) undivided joint ownership interest in the PO-11
                 Project Assets pursuant to the Sale and Transfer Agreement for
                 NLG 124,000,000 (one hundred twenty-four million Dutch
                 Guilders), on which applicable VAT (if any) at the standard
                 rate will be charged; (b) the Lyondell Partner shall contribute
                 to the Partnership a 50% (fifty percent) undivided joint
                 ownership interest in the PO-11 Project Assets in exchange for
                 the Lyondell Partner's Partnership Interest in the Partnership;
                 and (c) the Bayer Partner shall contribute to the Partnership
                 its 50% (fifty percent) undivided joint ownership interest in
                 the PO-11 Project Assets in exchange for the Bayer Partner's
                 Partnership Interest in the Partnership. In furtherance of the
                 Sale and Transfer Agreement, and the contributions by the
                 Partners described in clauses (b) and (c) of the prior
                 sentence, (v) the Bayer Partner, the Lyondell Partner and the
                 Partnership shall enter into the Partners Transfer Agreement as
                 of the Signing Date; (w) LCNL and the Partnership shall enter
                 into the

                                       3
<PAGE>

                 Assignment and Assumption Agreement as of the Signing Date; (x)
                 LCNL and the Bayer Partner shall enter into the Notarial Deed
                 as of the Signing Date; (y) the Lyondell Partner, its general
                 partner and the Partnership shall enter into the Lyondell
                 Notarial Deed as of the Signing Date; and (z) the Bayer Partner
                 and the Partnership shall enter into the Bayer Notarial Deed as
                 of the Signing Date. Payments by the Rotterdam Port Authority
                 in respect of certain costs of infrastructure constructed by
                 the Partnership are currently expected to be made on various
                 dates during the Development Phase Recovery Period as agreed
                 between the Partnership and the Rotterdam Port Authority for
                 costs incurred by the Partnership to that date. Such payments
                 shall be applied against then current and future PO-11 Project
                 Costs or, following the end of the Development Phase Recovery
                 Period, shall be distributed to the Partners in accordance with
                 their Partnership Percentages.

          6.1.2  During the Development Phase Recovery Period, the Bayer Partner
                 and the Lyondell Partner will make capital contributions to the
                 Partnership pursuant to cash calls administered by the Lyondell
                 Partner to fund PO-11 Project Costs and other obligations of
                 the Partnership during the Development Phase. Cash calls shall
                 be denominated in Euros and shall include applicable VAT and
                 similar charges on the underlying invoices. Each cash call
                 shall be accompanied by a "DEVELOPMENT PHASE CASH CALL
                 STATEMENT", which shall show for any expenditure in excess of
                 EUR 100,000 (one hundred thousand Euros) each party to whom
                 payment is due, a brief explanation of the purpose of the
                 payment and the calculation of the amount payable by each
                 Partner in accordance with the format included in Schedule
                 6.1.2A. Each cash call shall be accompanied, if applicable, by
                 (a) a copy of the request for payment from the EPC Contractor,
                 (b) a copy of the Operator's invoice for Service Charges and
                 (c) a copy of the invoice in respect of any amount in excess of
                 EUR 250,000 (two hundred fifty thousand Euros) payable to any
                 Person other than the EPC Contractor or the Operator. In order
                 to best match funding of the Partnership Accounts with the
                 spending for each month, the Lyondell Partner shall determine
                 the date(s) on which the Partners shall fund the Partnership
                 Accounts. The information to the two Partners shall be provided
                 at least 10 (ten) calendar days prior to the date on which the
                 Partnership Accounts must be funded. The Lyondell Partner may
                 issue two or more cash calls during a month if it determines
                 such action is advisable. The Lyondell Partner shall attempt to
                 minimise overdrafts and funding balances in the Partnership
                 Accounts in determining the amount and due dates for payments.

                 The Partners shall pay the cash calls in accordance with their
                 Partnership Percentages.

                                       4
<PAGE>

                 For information purposes only, a schedule of anticipated
                 spending for PO-11 Project Costs is attached hereto as Schedule
                 6.1.2B. Actual spending may differ from that shown on Schedule
                 6.1.2B.

          6.1.3  During the Production Term, the Bayer Partner and the Lyondell
                 Partner will make such capital contributions to the Partnership
                 as are necessary to fund Capital Projects undertaken in
                 accordance with Article VII of the Operating Agreement. The
                 Lyondell Partner shall administer cash calls for each such
                 capital contribution. In order to best match funding of the
                 Partnership Accounts with the spending for each Capital
                 Project, the Lyondell Partner shall determine the date on which
                 the Partners shall fund the Partnership Accounts. The
                 information to the two Partners shall be provided at least 10
                 (ten) calendar days prior to the date on which the Partnership
                 Accounts must be funded. The Lyondell Partner shall prepare the
                 "CAPITAL COSTS STATEMENTS" which are to accompany each cash
                 call. The Capital Costs Statements shall include separate
                 breakdowns by category for EHS Capital Projects, Maintenance
                 Capital Projects, Enterprise Consistency Capital Projects and
                 Discretionary Capital Projects as to which Capital Costs are
                 included in the cash call. A pro forma Capital Costs Statement
                 is attached hereto as Schedule 6.1.3.

          6.1.4  Each Partner shall timely pay its share of any cash call in
                 connection with the Development Phase Cash Call Statement or
                 the Capital Costs Statement, as the case may be, on the date
                 specified in the cash call. Payments shall be timely made in
                 immediately available funds, such that funds are credited to
                 the Partnership Accounts on the due date, without withholding,
                 deduction, offset or counterclaim. Any Partner failing to
                 timely pay the amount due shall pay interest on such unpaid
                 amount from the date due until paid at the Default Rate. If
                 there is a manifest error in calculation in the Development
                 Phase Cash Call Statement or Capital Costs Statement, as the
                 case may be, the Lyondell Partner, upon learning of such error,
                 will correct the calculation and show such recalculation.

          6.1.5  If the Bayer Partner disputes any amount payable pursuant to
                 any Capital Costs Statement submitted to it by the Lyondell
                 Partner, then the Bayer Partner shall have the right to raise
                 such objection with the Lyondell Partner. Any such dispute may
                 be raised at any time, provided that any dispute that is not
                 resolved between the Partners may only be resolved through a
                 binding advisor procedure in accordance with Article 12. The
                 Bayer Partner shall timely pay the amount in question pending
                 the resolution of any dispute. Payment shall not constitute
                 acceptance of the amount charged. If it is determined that the
                 Bayer Partner has overpaid any amount pursuant to a Capital
                 Costs Statement, then the Partnership shall pay interest on
                 such overpaid amount from the date of payment until the date
                 refunded at the Default Rate.

                                       5
<PAGE>

     6.2  Working Capital.

          6.2.1  The Lyondell Partner shall prepare and administer on behalf of
                 the Partnership the requests for Partnership Working Capital
                 and the Working Capital Statements, which shall be denominated
                 in Euros. In advance of the scheduled date of Commercial Start-
                 up, the Partners shall make such Partnership Working Capital
                 contributions in order to (a) provide the Partnership with
                 sufficient funds to purchase required Raw Materials; (b) fund
                 the Initial Services Charge Advance; and (c) otherwise meet all
                 obligations of the Partnership with respect to the initial
                 period of operations, taking into account the payment due date
                 of the initial Operating Costs Statements pursuant to Section
                 10.1 and the projected timing of VAT payments by and refunds to
                 the Partnership. The total amount of such cash calls made to
                 the Partners by the Lyondell Partner on behalf of the
                 Partnership that is not used to fund PO-11 Project Costs is
                 referred to herein as "PARTNERSHIP WORKING CAPITAL". The
                 Lyondell Partner shall provide the "WORKING CAPITAL STATEMENTS"
                 which are to accompany each cash call and the supporting
                 documentation and projected uses for each cash call. A pro
                 forma Working Capital Statements is attached hereto as Schedule
                 6.2.1. The Lyondell Partner shall provide for cash flow
                 management for the Partnership that (i) is working capital
                 neutral to the Partnership; (ii) timely meets all obligations
                 of the Partnership; (iii) prevents excessive accumulation of
                 funds in the Partnership Accounts; (iv) does not create
                 excessive administrative burdens on the Partners; and (v)
                 provides transparency to the Partners as to Operating Costs and
                 Capital Costs. The Partners shall review the provisions of this
                 Section 6.2 periodically and shall change such provisions by
                 mutual agreement if these objectives are not being met. On a
                 quarterly basis, the Lyondell Partner will provide the Bayer
                 Partner with cash flow forecasts for the Partnership for the
                 upcoming 12 (twelve) month period. The Bayer Partner and the
                 Lyondell Partner shall make capital contributions to the
                 Partnership to fund Partnership Working Capital in accordance
                 with the foregoing provisions of this Section 6.2.1.

          6.2.2  The Partnership Working Capital is intended to remain in place
                 throughout the Term of this Agreement, subject to adjustment as
                 provided herein. On a quarterly basis, or more frequently if so
                 requested by one or both Partners, the Lyondell Partner shall
                 review with the Bayer Partner the account balances in the
                 Partnership Accounts in relationship to the due dates of
                 Operating Costs. When appropriate to achieve the goals stated
                 in Section 6.2.1, the Lyondell Partner shall provide for a
                 Partnership Working Capital adjustment in accordance with
                 Section 6.2.1.

          6.2.3  The Lyondell Partner will send requests for capital
                 contributions to the Partnership in accordance with Section
                 6.1.2, Section 6.1.3 and Section 6.2.1 to the Partners at the
                 following addresses unless and until otherwise instructed by
                 the Partners.

                                       6
<PAGE>

               To the Bayer Partner:

                    Bayer Polyurethanes B.V.
                    Energieweg 1
                    3641 RT Mijdrecht
                    The Netherlands
                    Attention:  Managing Director

               Copy to:

                    Bayer AG
                    KB-KF Finanzen
                    GEB. W1
                    D-51368
                    Leverkusen
                    Germany
                    Attention:  Leitung

               To the Lyondell Partner:

                    Lyondell PO-11 C.V.
                    Lyondell Service Center
                    Weenapoint D
                    Weena 762
                    3014 DA
                    Rotterdam
                    The Netherlands
                    Attention:  Director Financial Controls

               Copy to:

                    Lyondell PO-11 C.V.
                    Theemsweg 14
                    3197 KM Rotterdam-1 Botlek
                    The Netherlands
                    Attention:  Director, European Manufacturing

                ARTICLE 7  ACCOUNTS IN THE NAME OF THE PARTNERS

     7.1 Capital Accounts. In the books of the Partnership a separate capital
account (the "CAPITAL ACCOUNT") shall be established and maintained in respect
of each Partner. The Capital Account shall be credited with the value of any
capital contributions made by such Partner to the Partnership and be debited
with the value of any capital repayment (including the deemed repayment in
connection with depreciation) made to such Partner. The Capital Accounts of the
Partners will not bear interest. No Partner shall be entitled to withdraw or

                                       7
<PAGE>

encumber any part of its Capital Account except in the case of capital
repayments pursuant to Article 6 or Article 17 or with the other Partner's prior
written approval.

     7.2 Current Accounts. Besides the Capital Account, each Partner will have a
current account in which any profits distributable to such Partner pursuant to
Article 17 will be credited.

                             ARTICLE 8  MANAGEMENT

     8.1  General.

          8.1.1  Except as provided in Section 8.1.2, any decision that
                 specifically requires the approval of both Partners shall be
                 taken by the Partnership Representatives jointly. The Lyondell
                 Partner shall appoint one Partnership Representative and the
                 Bayer Partner shall appoint one Partnership Representative.
                 Each Partnership Representative shall have the authority to
                 represent the Partner by whom it is appointed in all matters
                 and decisions under this Agreement, except as provided in
                 Section 8.1.2 and except as provided in the Operating
                 Agreement. Each Partner may change its designated Partnership
                 Representative from time to time by written notice to the other
                 Partner and the Operator.

          8.1.2  For the purpose of reviewing for approval (a) the Annual Plan
                 in accordance with Section 13.1; (b) the Annual Accounts in
                 accordance with Section 12.3; and (c) any other Major Decisions
                 (as listed in Section 8.1.7), the Partners shall meet and act
                 through a management committee (the "MANAGEMENT COMMITTEE").
                 The Management Committee meeting to approve the Annual Accounts
                 shall take place within 30 (thirty) days after the Lyondell
                 Partner provides the Annual Accounts to the Bayer Partner. The
                 notice in respect of the calling of any Management Committee
                 meeting shall in all cases indicate any Major Decision
                 scheduled for consideration. Each Partner may convene
                 Management Committee meetings for the above and/or other
                 subjects upon 10 (ten) Business Days prior written notice to
                 the other Partner.

          8.1.3  The Management Committee shall consist of six members (the
                 "MEMBERS") to be appointed by the Partners by nomination. Three
                 Members shall be appointed by nomination of the Bayer Partner
                 (the "BAYER MEMBERS") and three Members shall be appointed by
                 nomination of the Lyondell Partner (the "LYONDELL MEMBERS").
                 Members may at any time be replaced by the Partner who
                 appointed the respective Member by notice to the other Partner
                 and the Operator. Members may at any time give another Member a
                 written power of attorney to act on that Member's behalf at a
                 Management Committee meeting. When a Member holding a written
                 power of attorney attends any Management Committee meeting, it
                 shall provide the other

                                       8
<PAGE>

                 Members in attendance with copies of any such written power of
                 attorney.

          8.1.4  Management Committee meetings shall be held in person at the
                 PO-11 Plant Facilities unless an alternative location or a
                 meeting by telephone is agreed in advance by a decision of the
                 Management Committee in accordance with Section 8.1.5.

          8.1.5  At least two Bayer Members and at least two Lyondell Members,
                 in either case including Members attending through a power of
                 attorney, shall constitute a quorum. The decisions of the
                 Management Committee can only be taken by a majority vote
                 consisting of at least two Bayer Members and at least two
                 Lyondell Members voting in favour (any such decision as
                 evidenced in writing shall be a "MANAGEMENT COMMITTEE
                 RESOLUTION"). The vote of at least two of the Members appointed
                 by a Partner to approve or disapprove a decision shall
                 constitute the approval or disapproval of the Partner in
                 question. No Member will have a deadlock determining casting
                 vote. Except with respect to approval of the Annual Plan and
                 Annual Accounts (unless otherwise agreed by the Members by a
                 Management Committee Resolution), decisions can be taken in
                 writing by resolution without convening a meeting. All
                 decisions of the Management Committee shall be evidenced by a
                 written resolution signed by at least two Bayer Members and at
                 least two Lyondell Members. If at any Management Committee
                 meeting convened to address any Major Decision there is an
                 insufficient quorum to take a valid decision, then a second
                 Management Committee meeting shall be convened on at least 10
                 (ten) Business Days prior written notice. At such second
                 Management Committee meeting a valid decision can be taken on
                 any Major Decision noticed for the above initial Management
                 Committee meeting without any quorum.

          8.1.6  The Lyondell Partner will be responsible for the management of
                 the Partnership and will as such manage the business of the
                 Partnership in the best interests of the Partnership. Except as
                 expressly provided otherwise in this Agreement, the Lyondell
                 Partner shall have full decision making authority with regard
                 to the management of the Partnership's business. The Lyondell
                 Partner has delegated certain of its rights and duties to the
                 Operator in accordance with, and subject to, the express limits
                 of the Operating Agreement and this Agreement.

          8.1.7  The following decisions of the Lyondell Partner (the "MAJOR
                 DECISIONS") shall be subject to the prior approval of the
                 Partners at a Management Committee meeting:

                 (a)  The adoption of the Annual Accounts;

                 (b)  The adoption of an Annual Plan (including each of the
                      Annual Production Plan, the Operating Budget and the
                      Capital Budget);

                                       9
<PAGE>

                 (c)  The adoption of a Strategic Raw Materials Purchasing Plan
                      and an Other Raw Materials Purchasing Plan;

                 (d)  Initiating, compromising or settling Material Litigation
                      on behalf of the Partnership subject to Section 19.4.5;

                 (e)  Entering into, amending, extending or terminating any
                      agreement between the Partnership and any Partner or any
                      Affiliate of any Partner except as otherwise permitted
                      under Article V of the Operating Agreement;

                 (f)  Adopting or amending a hedging or derivative strategy
                      policy;

                 (g)  To the extent not authorised under a hedging or derivative
                      policy adopted pursuant to the prior paragraph, entering
                      into, amending, extending or terminating any derivative,
                      hedging or similar contract;

                 (h)  Entering into any initial utility contract after the
                      Signing Date or making any Material Utility Contract
                      Amendment;

                 (i)  Incurring debt (other than trade debt in the ordinary
                      course of business) or the entering into, amending,
                      extending or terminating of any loan agreement on behalf
                      of the Partnership;

                 (j)  Acquiring, selling or pledging of fixed assets, except
                      worn-out or obsolete inventory, and except for equipment
                      and other components of the PO-11 Plant Facilities that
                      are sold or disposed of pursuant to an Annual Plan, in
                      conjunction with routine maintenance or in connection with
                      a Capital Project permitted pursuant to Article VII of the
                      Operating Agreement;

                 (k)  The matters requiring approval under Section 4.7 of the
                      Operating Agreement and under Paragraph 1.4 of Appendix 1
                      to the Operating Agreement;

                 (l)  The adoption or modification of profit or cash
                      distribution policies;

                 (m)  The appointment of the auditor of the Partnership;

                 (n)  Consent to assignment by the Operator of its rights and
                      obligations under the Operating Agreement, except where
                      approval to assignment is expressly not required under
                      such Agreement;

                 (o)  Entering into a new operating agreement for the PO-11
                      Plant Facilities if there is a termination of the
                      Operating Agreement in accordance with its terms;

                                      10
<PAGE>

                 (p)  Amending or terminating the Ground Lease;

                 (q)  Acquiring, founding or selling Affiliates of the
                      Partnership;

                 (r)  Decisions in respect of a Casualty requiring the approval
                      of both Partners pursuant to Article 22;

                 (s)  Entering into bankruptcy proceedings or filing for a
                      suspension of payments ("surseance van betaling") on
                      behalf of the Partnership;

                 (t)  Dissolution or winding up of the Partnership; and

                 (u)  Any changes of or amendments to the Partnership Agreement.

                 The exceptions contained in 8.1.7(e) and (j) shall apply only
                 for so long as the Operator and the Lyondell Partner shall both
                 be Lyondell Affiliates.

          8.1.8  Subject to Section 8.1.9(a), only the Lyondell Partner shall
                 have the authority to represent and bind the Partnership.
                 Provided that the Management Committee has approved a Major
                 Decision, the Bayer Partner shall provide the Lyondell Partner
                 promptly upon its request with a written confirmation of its
                 consent and/or a written power of attorney authorising the
                 Lyondell Partner to represent and bind the Partnership in
                 respect of such Major Decision. Additionally, the Bayer Partner
                 shall provide the Lyondell Partner promptly upon its request
                 with a written power of attorney authorising the Lyondell
                 Partner to represent and bind the Partnership in respect of any
                 decision other than a Major Decision, notwithstanding the
                 limitations of authority submitted for registration pursuant to
                 Section 8.1.10.

          8.1.9  (a)  If for any reason the Bayer Partner alleges in good faith
                      that the Lyondell Partner fails or refuses to enforce
                      either (i) the obligations of the Operator under the
                      Operating Agreement or (ii) the obligations of any other
                      Lyondell Affiliate that is a contracting party with the
                      Partnership to the detriment of the Partnership or (iii)
                      the rights of the Partnership against any Affiliate of the
                      Lyondell Partner (if any) then, upon and following written
                      notice to the Lyondell Partner, the Bayer Partner shall
                      have the right to enforce such obligations on behalf of
                      the Partnership.

                 (b)  For the avoidance of doubt, the Lyondell Partner shall
                      have the right to enforce the rights of the Partnership
                      against any Affiliate of the Bayer Partner that is a
                      contracting party with the Partnership.

         8.1.10  (a)  The limitations of the authority of the Lyondell Partner
                      described in Schedule 8.1.10 will be submitted for
                      registration

                                      11
<PAGE>

                      with the Trade Register of the Chamber of Commerce at
                      Rotterdam, The Netherlands.

                 (b)  The amount specified in Section 1(a) of Schedule 8.1.10
                      shall be adjusted every five years from the Signing Date
                      by multiplying the amount by a propylene market price
                      ratio as determined by reference to the average quarterly
                      propylene contract price for Northwest Europe, published
                      in ICIS during the relevant year divided by a base value
                      of EUR 535/MT as of the Signing Date. If ICIS is not
                      available a mutually agreed market publication will be
                      used in substitution.

                 (c)  For avoidance of doubt, the limitations set forth in
                      Schedule 8.1.10 are for external effect only and do not
                      limit or expand the limitations of authority of the
                      Lyondell Partner under Section 8.1.7.

     8.2  Operating Agreement.

          8.2.1  The Partnership shall enter into the Operating Agreement with
                 the Operator. The Operating Agreement will provide for a power
                 of attorney authorising the Operator to represent and bind the
                 Partnership under the terms and conditions set forth in the
                 Operating Agreement. Notwithstanding the limitations submitted
                 for registration pursuant to Section 8.1.10, upon request of
                 the Lyondell Partner, the Bayer Partner shall promptly provide
                 the Operator with a written confirmation of the above power of
                 attorney, provided that the Operator is acting within the scope
                 of its authority under the Operating Agreement.

          8.2.2  The Partnership Representatives, provided they are acting
                 jointly, are hereby granted the powers necessary to bind the
                 Partnership in accordance with the terms of the Operating
                 Agreement.

          8.2.3  Each Partner shall have the right to request that the Operator
                 performs Additional Services in accordance with the terms of
                 the Operating Agreement. The requesting Partner shall pay the
                 Operator directly for the Operator's charges in providing the
                 Additional Services which the Operator has agreed to provide to
                 the requesting Partner. The other Partner shall have no
                 responsibility for such charges.

          8.2.4  The Lyondell Partner shall provide the Bayer Partner with all
                 reports delivered by the Operator to the Partnership.

          8.2.5  At the request of one or both Partners, the Lyondell Partner
                 shall request the Operator to use reasonable endeavours,
                 subject to Section 4.2.16 of the Operating Agreement, to obtain
                 a quality certification for the PO-11 Plant Facilities in
                 excess of that maintained by the Operator at the time of such
                 request with respect to other facilities of the Lyondell Group
                 in The Netherlands operated by the

                                      12
<PAGE>

                 Operator. The requesting Partner or Partners shall pay all
                 incremental costs incurred by the Operator in obtaining and
                 maintaining such quality certification.

          8.2.6  Each Partner shall properly instruct and use reasonable
                 endeavours to cause its respective officers, employees, agents,
                 representatives, contractors, vendors, customers or other
                 business invitees entering the PO-11 Plant Facilities to comply
                 with the EHS Policies.

   ARTICLE 9  OFFTAKE RIGHTS, MONTHLY PRODUCTION AND LIFTING PLANNING, SPARE
                CAPACITY, DELIVERY OF PRODUCT, SHARED STORAGE
                                  FACILITIES

     9.1  Offtake Rights of the Partners. Subject to the provisions of this
Agreement, the Partnership shall make available to each Partner and each Partner
will accept from the Partnership its share, determined in accordance with the
Partners' respective Offtake Percentages, of PO and co-produced SM that are
produced from the PO-11 Plant Facilities as and when produced in accordance with
Section 9.2.2, and each Partner will pay to the Partnership the costs incurred
therewith.

     9.2  Monthly Production and Lifting Nominations.

          9.2.1  Prior to the 25th (twenty-fifth) day of each month, each
                 Partner will provide the Partnership with (a) a binding two
                 month production nomination for each of the following two
                 months and (b) a binding one month lifting nomination for the
                 following month. Each Partner's lifting nomination for both PO
                 and SM shall be broken down on a daily basis for the upcoming
                 month.

          9.2.2  The Partners shall cause their Partnership Representatives to
                 meet with the Operator prior to establishing the Partner's
                 binding nominations to (a) co-ordinate and optimise lifting
                 nominations for each month, taking into account each Partner's
                 lifting preferences and any production constraints based on the
                 latest information available to the Partners and the Operator
                 and (b) address the Partners' binding production nomination for
                 the second following month (e.g., the Partners will address
                 their production nomination for September at the end of July).
                 As the base case for production is 100% (one hundred percent)
                 operating rates, absent Turnarounds or other scheduled or
                 unscheduled production disruptions, these meetings will focus
                 mainly on intra-month optimisations of lifting nominations. In
                 agreeing upon production and lifting nominations, the Partners
                 may consider and agree in writing to changes to the risk of
                 loss provisions of Section 9.8. The Partners shall be allocated
                 and shall accept for delivery PO and co-produced SM as actually
                 produced during each month in accordance with the ratio
                 established by their product nominations, regardless of whether
                 actual production is more or less than that forecasted for that
                 month.

                                      13
<PAGE>

          9.2.3  Each Partner has the right to reduce its share of PO and co-
                 produced SM from maximum operating rates in its firm production
                 nominations pursuant to Section 9.2.1. However, no Partner may
                 reduce production such that the PO-11 Plant Facilities would
                 run below the Minimum Turndown Operating Rate. If both
                 Partners' combined nominations would result in the PO-11 Plant
                 Facilities running below the Minimum Turndown Operating Rate,
                 then the following shall apply:

                 (a)  Partner's respective annual output in the Proposed Annual
                      Production Plan shall be adjusted such that each Partner's
                      nominations from full operating rates is reduced in
                      proportion to their respective Offtake Percentages until
                      either (i) the Minimum Turndown Operating Rate is reached
                      or (ii) the output to either Partner is reduced to such
                      Partner's desired nominations, whichever occurs first.

                 (b)  If a Partner's desired nominations are reached under
                      Section 9.2.3(a), then the other Partner's output may be
                      further reduced until either (i) the Minimum Turndown
                      Operating Rate is reached or (ii) such Partner's desired
                      nominations are achieved, whichever occurs first.

          9.2.4  The Bayer Partner is not entitled to reduce production without
                 first offering Bayer Spare Capacity to the Lyondell Partner
                 pursuant to Section 9.4.

          9.2.5  Any Partner choosing to reduce its share of production in
                 accordance with Section 9.2.3 shall remain liable for its share
                 of Fixed Costs, as determined in accordance with Section 9.3,
                 and will be responsible for all incremental Variable Costs
                 (such as increased costs of Raw Materials and utilities)
                 resulting from any production turndown below full operating
                 rates such that the other Partner is held neutral. In addition,
                 if a Partner proposes to change its binding production and
                 lifting nominations, and the Operator, acting in good faith,
                 accommodates such requested change, then the Partner changing
                 its nominations shall be responsible for all incremental costs
                 resulting from such change that the Operator is unable to
                 mitigate, such as Raw Material contract cancellation charges
                 and/or utility take-or-pay or capacity reservation charges.
                 Such adjustments will be included in the Operating Costs
                 Statements to the relevant Partner for the month in question.

          9.2.6  The Partners shall inform each other in a timely manner as to
                 Turnarounds, shutdowns and other major events impacting each
                 Partner's use and offtake of PO and SM from the PO-11 Plant
                 Facilities.

     9.3  Cost Allocations. Regardless of actual production levels resulting
from the Partners' nominations or production disruptions, each Partner shall pay
its Partnership

                                      14
<PAGE>

Percentage share of all Fixed Costs for each month, subject to potential
modification in accordance with a Unilateral Capital Implementation Plan, as
provided in the last sentence in this Section 9.3.  Subject to the adjustments
provided for in Section 9.2.5, Variable Costs shall be payable by the Partners
in the ratio of their total production nominations for the month.  For avoidance
of doubt, for Unilateral Capital Projects, Fixed Costs and Variable Costs for
Unilateral Capital Projects shall be allocated in accordance with the applicable
Unilateral Capital Implementation Plan.

     9.4  Bayer Spare Capacity.

          9.4.1  As part of the meeting at the end of the month described in
                 Section 9.2.2, the Bayer Partner shall offer to the Lyondell
                 Partner in writing:

                 (a)  the PO from the Bayer Partner's share of production from
                      the PO-11 Plant Facilities that the Bayer Group does not
                      intend to use captively for its Identified Polyols
                      business together with co-produced SM; or

                 (b)  the SM from the Bayer Partner's share of production from
                      the PO-11 Plant Facilities that the Bayer Group does not
                      intend to use captively, directly or indirectly pursuant
                      to product "swap" arrangements or to sell pursuant to
                      trading arrangements (whether existing or anticipated)
                      together with co-produced PO.

                 If the Bayer Partner has both PO and SM spare capacity pursuant
                 to clauses (a) and (b) above, then the Bayer Partner may select
                 between clauses (a) and (b) but, for the avoidance of doubt, in
                 all cases the PO and SM offered must be in proportion based on
                 the actual production ratio. The metric tonnes of PO and SM
                 that are required to be offered by the Bayer Partner to the
                 Lyondell Partner pursuant to this Section 9.4.1 are called
                 herein the "BAYER SPARE CAPACITY".

          9.4.2  The Lyondell Partner shall use reasonable endeavours to either
                 use the Bayer Spare Capacity captively within the Lyondell
                 Group or to market and sell the Bayer Spare Capacity to third
                 parties for the account of Bayer as provided herein.
                 Notwithstanding the foregoing, the Lyondell Partner will not be
                 required to attempt to use or sell the Bayer Spare Capacity if:

                 (a)  as to PO, the Lyondell Partner anticipates that the
                      Lyondell Group will not be using for the month in question
                      100% (one hundred percent) of its own PO production
                      capacity within Western Europe (in its own derivative
                      business and/or pursuant to third party sales); or

                 (b)  such captive use or third party sale of the Bayer Spare
                      Capacity will, in the Lyondell Partner's opinion, be
                      detrimental to the business of the Lyondell Group.

                                      15
<PAGE>

          9.4.3  The Lyondell Partner shall notify the Bayer Partner in writing
                 within 15 (fifteen) days following the Bayer Partner's written
                 request pursuant to Section 9.4.1 whether the Lyondell Partner
                 will take part or all of the Bayer Spare Capacity, and if only
                 part thereof, which portion of the co-produced PO and SM. In
                 such notice, the Lyondell Partner will identify how it
                 anticipates the Bayer Spare Capacity for PO will be sold or
                 used derivatively by the Lyondell Group, the corresponding
                 period over which the Bayer Spare Capacity for PO is
                 anticipated to be sold or used derivatively by the Lyondell
                 Group, the corresponding price and volumes for each month of
                 the designated period and corresponding payment terms. With
                 respect to SM, such notice shall include the period within
                 which the Lyondell Partner anticipates that the Lyondell Group
                 will sell the Bayer Spare Capacity as to SM and the
                 corresponding volumes for each month within the designated
                 period. The foregoing information is to be used solely for
                 assisting the Partners in negotiating a price and establishing
                 payment terms to the Bayer Partner and is in no way binding on
                 the Lyondell Partner. The Lyondell Group's actual use or sales
                 may differ substantially from such forecast and the Lyondell
                 Partner shall have no obligation to attempt to track sales or
                 derivative use of either PO or SM or report such results to the
                 Bayer Partner .

          9.4.4  The PO price will be based in each case on a 2% (two percent)
                 net profit to the Lyondell Group on the Lyondell Group's net
                 sales of the PO or PO derivative product(s) in which the PO is
                 consumed, as anticipated by the Lyondell Partner, taking into
                 account all costs anticipated to be incurred by the Lyondell
                 Group .

          9.4.5  The Bayer Spare Capacity (or portion thereof elected to be
                 purchased by the Lyondell Partner) as to SM will be priced to
                 the Lyondell Partner as if purchased and resold by Lyondell to
                 third parties. The Lyondell Partner will pay the Bayer Partner
                 an amount equal to 50% (fifty percent) of the positive net
                 margin of (a) the arithmetic mean of the "spot" "low" SM price
                 for each of the weekly reports published by ICIS during each
                 month of the designated period times the corresponding
                 anticipated sales volume for the month in excess of (b) the SM
                 Manufacturing Costs for the month in question. If such net
                 margin is negative, the Bayer Partner shall bear 100% (one
                 hundred percent) of such difference.

          9.4.6  The Bayer Partner shall have 15 (fifteen) days to accept or
                 reject the Lyondell Partner's offer. The Bayer Partner must
                 accept or reject the Lyondell Partner's offer in its entirety
                 as to both PO and SM.

          9.4.7  If and to the extent that the Lyondell Partner declines to
                 purchase the Bayer Spare Capacity in accordance with Section
                 9.4.3 or if the Bayer Partner rejects the Lyondell Partner's
                 offer pursuant to Section 9.4.6, then the Bayer Partner may (a)
                 (i) market and sell the PO component of the Bayer Spare
                 Capacity to third parties subject to payment to the

                                      16
<PAGE>

                 Lyondell Partner of the Accommodation Fee and (ii) freely sell
                 the associated SM of the Bayer Spare Capacity as it may
                 determine or (b) decide not to use the Bayer Spare Capacity, in
                 which case the production of the PO-11 Plant Facilities shall
                 be reduced accordingly subject to and in accordance with
                 Section 9.2.3 and Section 9.2.5.

          9.4.8  Where the Lyondell Partner has agreed to purchase Bayer Spare
                 Capacity from the Bayer Partner in accordance with this Section
                 9.4, then subject to Section 9.9.4, PO and SM Shared Storage
                 Facilities capacities shall be automatically adjusted to
                 reflect such agreement, based on the volumes affected by such
                 agreement .

          9.4.9  In addition to the foregoing provisions of this Section 9.4, it
                 is understood that the Bayer Partner may, from time to time,
                 offer to the Lyondell Partner Bayer Spare Capacity of SM or PO
                 only, and the Lyondell Partner may accept or reject any such
                 offer in its sole discretion.

     9.5  Production Loss. The Partners shall share in proportion to their
respective Offtake Percentages all PO and SM production loss and corresponding
increased costs of production, storage and logistics costs resulting from both
scheduled and unscheduled shutdowns and turndowns, regardless of cause.

     9.6  Product Specifications. The Lyondell Partner shall use reasonable
endeavours to cause the Operator to produce and deliver to the Delivery Point PO
and SM that meets the specifications set forth in Schedule 9.6. Off-spec PO and
SM that is accepted by a Partner (or its nominee) at the Delivery Point shall be
such Partner's responsibility to the same extent as if the product met
specifications. As used herein, "off-spec" means PO or SM that does not comply
with the specifications set forth in Schedule 9.6.

     9.7  Delivery and Testing of Products. Unless the PO or SM fails to meet
the specifications set forth in Section 9.6, each Partner shall accept at the
Delivery Point all PO and SM that is produced in accordance with the production
schedule that is established in accordance with Section 9.2.2. The Lyondell
Partner shall cause the Operator to sample and test PO and SM in accordance with
the procedures set forth in Schedule 9.7 or such other testing procedures for PO
and SM used, from time to time, by the Lyondell Group in accordance with the
Policies and the Lyondell Operating Practices. A Partner may, at its sole
discretion, choose to accept or refuse off-spec PO and SM. Risk of loss for PO
and SM shall pass from the Partnership to a Partner at the Delivery Point,
except as otherwise agreed between the Partners in connection with the agreed
production and lifting schedules pursuant to Section 9.2.2.

     9.8  Risk of loss of Raw Materials. Risk of loss to the Partnership's share
of Raw Materials shall be shared by the Partners in accordance with their
Offtake Percentages. The Partnership's share of Commingled Raw Materials shall
be determined in accordance with Section 4.4 of the Operating Agreement.

                                      17
<PAGE>

     9.9  Shared Storage Facilities.

          9.9.1  The Partnership shall hold title to PO and SM in Shared Storage
                 Facilities.

          9.9.2  As a general rule, capacity in PO and SM Shared Storage
                 Facilities shall be shared by the Partners in accordance with
                 their respective Offtake Percentages, and the Partners shall
                 share risk of loss to the PO or SM contained in the Shared
                 Storage Facilities in accordance with their respective Offtake
                 Percentages. The Partners shall make regular liftings of PO and
                 SM from the Shared Storage Facilities in accordance with
                 Section 9.2. By written agreement between the Partners as to
                 volume, term and compensation to the granting Partner, the
                 Partners may agree to a different allocation of Shared Storage
                 Facilities capacity and risk of loss for SM and/or PO for a
                 designated period.

          9.9.3  Where the Partners have agreed in writing pursuant to Section
                 9.2 to temporarily share production or liftings of either PO or
                 SM for a given period of time on a basis other than in
                 accordance with their respective Offtake Percentages, then such
                 agreement shall automatically apply to their capacity rights
                 with respect to the PO and/or SM Shared Storage Facilities,
                 whichever shall be the subject of such agreement. Furthermore,
                 the Partners may also agree in writing to share risk of loss in
                 a manner different than as provided in Section 9.9.5.

          9.9.4  There will be no adjustment to the provisions regarding
                 transfer of title or risk of loss with respect to PO and SM
                 which constitutes Bayer Spare Capacity that Lyondell has agreed
                 to purchase.

          9.9.5  Subject to Section 9.9.6, if a loss to PO or SM in Shared
                 Storage Facilities occurs such that one of the Partners does
                 not receive a proportionate amount of production of that
                 product at the time of loss because the other Partner has made
                 a lifting prior to the loss, then the Partner that did not
                 receive its proportionate share of production at the time of
                 loss shall be entitled upon restoration of normal production to
                 the first production of such product as may be necessary so
                 that such production loss and corresponding production costs
                 are shared by the Partners in accordance with their respective
                 Offtake Percentages, subject, without duplication, to any
                 written agreement made pursuant to Section 9.9.2 or Section
                 9.9.3.

          9.9.6  If any Partner fails to timely lift PO or SM from the Shared
                 Storage Facilities in accordance with Section 9.2, such Partner
                 shall bear all risk of loss with respect to the product that is
                 not timely lifted in accordance with Section 9.2, and shall
                 bear all incremental costs incurred by the Partnership and the
                 other Partner as a consequence of such failure, including
                 taking corrective action pursuant to Section 9.9.7.

                                      18
<PAGE>

          9.9.7  Following prior written notice to the defaulting Partner and
                 after such prior consultation with the defaulting Partner as is
                 reasonably feasible under the circumstances, the non-defaulting
                 Partner shall instruct, on behalf of the Partnership, the
                 Operator to take such steps as are appropriate to prevent the
                 non-defaulting Partner from incurring Damages as a result of
                 such failure, while mitigating the Damages to the defaulting
                 Partner. Such steps may include selling, utilising or placing
                 in off-site storage for the account of the defaulting Partner
                 the product which the defaulting Partner has failed to lift
                 and/or curtailing production, in which case all incremental
                 costs of such curtailment and all resulting production loss
                 shall be for the account of the defaulting Partner.

                    ARTICLE 10  PAYMENT OF OPERATING COSTS

     10.1  Invoicing for Operating Costs. On or about the 7th (seventh) Business
Day of each month, commencing in the month following that containing the date of
Commercial Start-up, the Lyondell Partner, on behalf of the Partnership, will
separately provide each Partner with an invoice (the "OPERATING COSTS
STATEMENT") in Euros for each Partner's share of Operating Costs incurred. Each
Operating Costs Statement will detail each Partner's share of PO and SM liftings
during the prior month and be increased with VAT, if applicable. Each Operating
Costs Statement shall show the total Operating Costs incurred and each Partner's
share of such Operating Costs and shall further contain a breakdown of Fixed
Costs, Variable Costs and depreciation into the constituent key cost components
in accordance with the pro forma Operating Costs Statement attached hereto as
Schedule 10.1. Adjustments to Operating Costs for any month due to rebates,
discounts, surcharges, billing errors or other reasons shall be made in the
month in which payment in respect of such adjustment is made, received or
discovered, as the case may be. The per unit Raw Material costs for each Partner
will be the same, subject to Section 9.2.5. The Operating Costs Statement shall
contain copies of invoices of the supplier to the Operator for Commingled Raw
Materials.

     10.2  Fixed Costs. Fixed Costs for the invoiced month shall be invoiced to
the Partners in accordance with Section 9.3.

     10.3  Variable Costs. Variable Costs for the invoiced month shall be
invoiced to the Partners based on their respective production nominations for
the invoiced month in accordance with Section 9.2, subject to any changes
required by a Unilateral Capital Implementation Plan.

     10.4  Depreciation. Depreciation for the invoiced month shall be charged to
the Partners in accordance with their Partnership Percentages on a 10 (ten) year
straight-line basis for all assets of the Partnership. Depreciation will be
settled by a deemed payment from the Partners followed by a deemed repayment of
capital from the Partnership, resulting in a corresponding decrease of each
Partner's Capital Account.

     10.5  Special Adjustments. Special adjustments to the Operating Costs
payable by a Partner in accordance with this Agreement (e.g., incremental costs
billed to a Partner who changes its firm production or lifting nominations as
provided in Section 9.2.5) shall be separately listed and detailed.

                                      19
<PAGE>

     10.6  Payment of Operating Costs. Each Partner shall pay its respective
share of Operating Costs based on the Operating Costs Statement on or before the
20th (twentieth) calendar day of each month, or if such day is not a Business
Day, on the preceding Business Day. Payments will be made when due in
immediately available funds, such that funds are credited to the Partnership
Accounts without withholding, deduction, offset or counterclaim. Interest on
late payments will accrue and be payable at the Default Rate. If there is a
manifest error in calculation in the Operating Costs Statement, the Lyondell
Partner, upon learning of such error, will correct the calculation and show such
recalculation.

     10.7  Disputes Regarding Operating Costs Statements. If the Bayer Partner
disputes any amount payable pursuant to any Operating Costs Statement submitted
to it by the Lyondell Partner, then the Bayer Partner shall have the right to
raise such objection with the Lyondell Partner and to instruct the Lyondell
Partner to raise such objection on behalf of the Partnership with the Operator
or any other third party supplier. Any such dispute may be raised and any such
instruction may be given at any time, provided that any dispute that is not
resolved between the Partners may only be resolved through a binding advisor
procedure in accordance with Article 12. The Bayer Partner shall timely pay the
amount in question pending the resolution of any dispute. Payment shall not
constitute acceptance of the amount charged. If it is determined that the Bayer
Partner has overpaid any amount pursuant to an Operating Cost Statement the
Partnership shall pay interest on such overpaid amount from the date of payment
until the date refunded at the Default Rate.

     10.8  Billing Addresses. The Partnership will send Operating Costs
Statements to the Partners at the following addresses unless and until otherwise
instructed by the Partners.

          To the Bayer Partner:

               Bayer Polyurethanes B.V.
               Energieweg 1
               3641 RT Mijdrecht
               The Netherlands
               Attention:  Managing Director

          Copy to:

               Bayer
               KB-KF Finanzen
               GEB.W1
               D-51368
               Leverkusen
               Germany
               Attention:  Leitung

                                      20
<PAGE>

          To the Lyondell Partner:

               Lyondell Service Center
               Weenapoint D
               Weena 762
               3014 DA
               Rotterdam
               The Netherlands
               Attention:  Director Financial Controls

          Copy to:

               Lyondell PO-11 C.V.
               Theemsweg 14
               3197 KM Rotterdam-1 Botlek
               The Netherlands
               Attention:  Director, European Manufacturing

                     ARTICLE 11  RECORD KEEPING, REPORTING

     11.1  Books and Records of the Partnership.

           11.1.1  The Lyondell Partner shall open and maintain on behalf of the
                   Partnership books, records and accounts in Euros, which, in
                   reasonable detail, accurately and fairly reflect the business
                   activities as they have been carried out by the Partnership.

           11.1.2  The Lyondell Partner will devise and maintain an adequate
                   system of internal accounting controls which shall, amongst
                   others, be sufficient to provide reasonable assurance that
                   transactions are recorded as necessary (a) to permit
                   preparation of financial statements in conformity with
                   generally accepted accounting principles as applied, from
                   time to time, in Western Europe by the Lyondell Group and (b)
                   to maintain accountability for assets and liabilities.

     11.2 Partner Access to Books and Records. Each Partner or its
representative shall have access, upon reasonable notice during normal business
hours, to all financial records and other books and records of the Partnership
and shall be entitled to make copies of such books and records as often as such
Partner may request, excluding any books and records containing information with
respect to PO-11 Technology. All expenses associated with such inspections and
copying will be at the requesting Partner's expense. The Lyondell Partner will
use reasonable endeavours to redact sensitive information and take other steps
so that books and records containing information regarding PO-11 Technology
shall not contain any other material information relevant to the business of the
Partnership that is not available to the Partners from another source.

                                      21
<PAGE>

     11.3  Notice of Material Events. Each Partner shall notify the other
Partner in writing promptly after obtaining knowledge of any incident or event
materially adversely affecting the Partnership or the Partnership's business or
assets.

     11.4  Administration of the Partnership Accounts. The Lyondell Partner
shall administer the Partnership Accounts on behalf of the Partnership. The
Partnership Accounts will be maintained in the name of the Partnership. The
Lyondell Partner may maintain Partnership Accounts in Dutch guilders, Euros and
US dollars. All contributions and payments by the Partners will be deposited in
the Partnership Accounts and the Lyondell Partner shall make payments from the
Partnership Accounts to third parties and to the Operator for Service Charges in
respect of Operating Services and the management, operation, maintenance and
ownership of the PO-11 Plant Facilities. The Lyondell Partner shall be the sole
signatory to withdraw funds from the Partnership Accounts. The Bayer Partner
shall have direct, constant and real-time on-line access to the balances of the
Partnership Accounts. The Lyondell Partner has submitted to the Bayer Partner
for review a description of the internal authorisation and control system that
has been put in place by the Lyondell Partner to protect the interests of the
Partnership and the names of the persons currently authorised to withdraw funds
from the Partnership Accounts on behalf of the Lyondell Partner. Such internal
authorisation and control system will require, inter alia, that withdrawals
require the authorisation of at least two persons. Any modification to the
authorisation and controls system intended to be implemented by the Lyondell
Partner shall be subject to the prior review (but not approval) of the Bayer
Partner. In addition, the Bayer Partner may request that such authorisation and
control system as used for the Partnership be modified to add the requirement of
a Bayer Partner representative approval, in addition to the Lyondell Partner
representatives approval, for withdrawals of more than EUR 1,000,000 (one
million Euros) (Inflation Adjusted), provided that any such modification to the
authorisation and controls system proposed by the Bayer Partner preserves the
control integrity of the existing system.

        ARTICLE 12  FINANCIAL YEAR, ANNUAL ACCOUNTS, OTHER AUDIT RIGHTS

     12.1  Financial Years. The first financial year of the Partnership shall
run from the date of the formation of the Partnership up to and including 31
December 2000. In subsequent years, the financial year of the Partnership shall
be concurrent with the calendar year.

     12.2  Preparation and Certification of Annual Financial Statements. Within
one month after the end of each financial year, the Lyondell Partner shall
prepare (or have prepared) a balance sheet, profit and loss statement, cash flow
statement, depreciation schedule, explanatory notes and similar items thereto
for the Partnership for the prior year in accordance with the accounting
practices maintained from time to time by the Lyondell Group in Western Europe.
Within such period, the Lyondell Partner shall cause such accounts to be
certified by the external auditors of the Partnership to the extent necessary
for Bayer and Lyondell to prepare their respective consolidated financial
statements and shall deliver a copy thereof to the Bayer Partner. Within four
months after the end of each financial year, the Lyondell Partner shall cause to
be finalised, and audited and certified by the external auditors of the
Partnership, the annual accounts ("ANNUAL ACCOUNTS") of the Partnership for the
prior year and provide a copy thereof to the Bayer Partner. The Bayer Partner
shall be provided with a copy of any reports (including management reports)
prepared

                                      22
<PAGE>

by the Partnership's external auditors and shall be notified of and afforded the
opportunity to participate in any meetings with such external auditors relating
to the Partnership.

     12.3  Annual Accounts Approval and Disputes.

           12.3.1  The Annual Accounts shall be considered as final and binding
                   upon each of the Partners when they have been approved by the
                   Partners at a Management Committee meeting.

           12.3.2  If a Partner affirmatively objects to the approval of the
                   Annual Accounts at any Management Committee meeting as set
                   forth in Section 8.1.5, then the disputing Partner has the
                   right, within two weeks after the date of such meeting, to
                   have the Annual Accounts finally determined by way of a
                   binding advice ("bindend advies") procedure in accordance
                   with Article D of Exhibit B. If the disputing Partner does
                   not timely initiate such procedure, then the Annual Accounts
                   shall be deemed to be approved.

           12.3.3  If there is no quorum at the second Management Committee
                   meeting as set forth in Section 8.1.5, then the attending
                   Members may approve the Annual Accounts, and such approvals
                   will make the Annual Accounts final and binding. For the
                   avoidance of doubt, in such case, no Partner shall have the
                   right to initiate the above binding advice procedure.

           12.3.4  Each Partner has the right to invoke an audit of the
                   Operating Costs or the Capital Costs assessed to them in
                   accordance with this Agreement in accordance with this
                   Section 12.3 and Section 12.4. Any such audit under this
                   Section 12.3 shall be subject to Section 12.3.3 and must be
                   brought within the time periods and in accordance with the
                   procedures set forth in Section 12.3.2. In connection with
                   any audit under this Section 12.3 or Section 12.4, the
                   disputing Partner shall notify the Operator that an audit is
                   being brought under Section 9.4.1 of the Operating Agreement.

           12.3.5  The final determination of the Annual Accounts and the
                   resolution of any audit under Section 12.3.4 and Section 12.4
                   shall constitute a discharge of the Lyondell Partner from the
                   liability, if any, it may have incurred with respect to the
                   charging of Operating Costs and Capital Costs for the year in
                   question.

     12.4  Disputes as to Significant Monetary Amounts. In addition to the
procedure set forth in Section 12.3, either Partner may raise disputes with
regard to, and audit any individual item of, any Development Phase Cash Call
Statement, Capital Costs Statement and Operating Cost Statement if such item
exceeds (a) EUR 5,000,000 (five million Euros) (Inflation Adjusted) for
Development Phase Cash Call Statements and Capital Costs Statements and
(b) EUR 1,000,000 (one million Euros) (Inflation Adjusted) for Operating Costs
Statements if in any such case those disputes are not resolved between the
Partners, without waiting until the Annual Accounts are reviewed by the Partners
under Section 12.3.

                                      23

<PAGE>

The disputing Partner shall submit such dispute to resolution in accordance with
the binding advice procedure described in Article D of Exhibit B.

         ARTICLE 13  ANNUAL PLAN, FIVE YEAR DEMAND FORECAST; PARTNER
             SELF PROCUREMENT RIGHTS; DISPUTES REGARDING EHS AND
                      PERSONNEL COMPENSATION EXPENDITURES

     13.1  Annual Plan.

           13.1.1  The Lyondell Partner shall cause the Operator to prepare and
                   deliver to the Partnership on or before 1 October of each
                   year, commencing in 2002, the Annual Plan and the Four Year
                   Forward Forecast.

           13.1.2  If the Management Committee approves the Annual Plan by 1
                   November, the Lyondell Partner shall provide to the Operator
                   a copy of the Management Committee Resolution approving the
                   Annual Plan. If the Management Committee is deadlocked on any
                   element of the Annual Plan and such deadlock continues beyond
                   1 November, then the Management Committee shall adopt a
                   Management Committee Resolution approving the elements that
                   are not in dispute and the issues in dispute shall be
                   submitted to the Global Steering Committee for further review
                   and attempted resolution by 1 December. The Lyondell Partner
                   shall provide the Operator with a copy of the Management
                   Resolution approving the elements that are not in dispute.

           13.1.3  If the Global Steering Committee approves the entire Annual
                   Plan by 1 December, then the Lyondell Partner shall provide
                   the Operator with a written authorisation to implement the
                   Annual Plan. Where any portion of the Annual Plan is not
                   approved, and the Partnership is deadlocked as to whether the
                   Operator's proposed course of action is consistent with the
                   Policies and the Lyondell Operating Practices, then the Bayer
                   Partner as the disputing Partner, may at its election invoke
                   the binding advice procedure on behalf of the Partnership to
                   resolve the dispute in accordance with the provisions of
                   Section 7.3.4 of the Operating Agreement.

     13.2  Five Year Demand Forecast.

           13.2.1  Both Partners shall furnish to the Partnership and the
                   Operator on or before 1 August of each year commencing in
                   2002 their "Five Year Demand Forecast", being the Partner's
                   good faith estimate of the total volume requirements of PO
                   and SM for the Partner for the next succeeding five years,
                   broken down by month for the first year and by quarter for
                   the following four years. No Partner may include in its
                   demand forecast for any month a production level that would
                   cause the PO-11 Facilities to operate at less than the
                   Minimum Turndown Operating Rate, assuming the other Partner
                   is utilising all of its production capacity.

                                      24
<PAGE>

             13.2.2  The base case for the Partners' demand forecasts will be
                     proportionate offtakes of PO and SM and 100% (one hundred
                     percent) continuous operating rates, after taking into
                     account Turnarounds and reliability indices.

             13.2.3  As part of its Five Year Demand Forecast, the Bayer Partner
                     will indicate any Bayer Spare Capacity for co-produced PO
                     and SM that it expects to offer to the Lyondell Partner in
                     accordance with Section 9.4.

             13.2.4  In addition to the Five Year Demand Forecast, both Partners
                     shall furnish the Partnership and the Operator such other
                     information as the Operator may reasonably request to
                     enable the Operator to prepare the Proposed Annual Plan.

     13.3  Partner Rights to Self-Procurement of Strategic Raw Materials.

             13.3.1  Subject to the terms and conditions of this Section 13.3
                     that follow, and solely in connection with arrangements
                     involving SM supply to, offtake by and/or equity
                     arrangements with a Third Party, each Partner shall have
                     the right to procure for its own account from the Third
                     Party or its Affiliates ethylene and/or benzene up to the
                     amount required to produce its entire production capacity
                     of SM for the upcoming Plan Year, based on such Partner's
                     production nominations in the Annual Plan, but not more
                     than the ethylene and/or benzene, as applicable, required
                     to produce the SM to which the Third Party or its
                     Affiliates is or are entitled under the relevant
                     arrangements.

             13.3.2  Subject to the terms and conditions of this Section 13.3
                     that follow, and solely in connection with market-based
                     arrangements involving PO supply to and/or offtake by a
                     Third Party, each Partner shall also have the right to
                     procure for its own account from the Third Party or its
                     Affiliates propylene up to the amount required to produce
                     30% (thirty percent) of such Partner's Offtake Percentage
                     of "nameplate" capacity for PO, but not more than the
                     propylene required to produce the PO to which the Third
                     Party or its Affiliates is or are entitled under the
                     relevant arrangements.

             13.3.3  Nothing contained in this Section 13.3 affects or limits
                     Bayer's obligations under Section 9.4 or the provisions of
                     Section 20.1 or Section 20.2.

             13.3.4  The procurement limits for each Partner under Section
                     13.3.1 and Section 13.3.2 will be based on and consistent
                     with the PO/SM production ratio contained in the Annual
                     Plan.

             13.3.5  In connection with each separate arrangement with a Third
                     Party, a Partner desiring to procure Strategic Raw
                     Materials (a "SRM PROCURING PARTNER") shall indicate such
                     intent to the other Partner (for this purpose, the "NON-
                     PROCURING PARTNER") and the Operator at least

                                      25
<PAGE>

                     (a) 12 (twelve) months prior to 1 January of the first year
                     in which the SRM Procuring Partner desires to procure
                     ethylene and/or benzene for its own account and (b) 24
                     (twenty-four) months prior to 1 January of the first year
                     in which the SRM Procuring Partner desires to procure
                     propylene for its own account. The SRM Procuring Partner
                     may make its election for a single year (or portion
                     thereof) or for a designated period of years, subject to
                     the limitations of this Section 13.3.

             13.3.6  The SRM Procuring Partner's rights to procure Strategic Raw
                     Materials are subject to the terms of any then existing
                     Strategic Raw Materials supply contracts. If both Partners
                     desire to be SRM Procuring Partners for the same period,
                     then any quantities available for Partner procurement shall
                     be equitably allocated between them in the ratio of their
                     intended self-procurement quantities, until the
                     availability limit is reached or until a Partner's self-
                     procurement quantity is fully satisfied, in which latter
                     case any remaining availability shall be allocated to the
                     other Partner.

             13.3.7  The SRM Procuring Partner shall be responsible for keeping
                     the Non-Procuring Partner economically neutral
                     notwithstanding the SRM Procuring Partner's procurement for
                     its own account, including as to Strategic Raw Material
                     structural discounts and rebates that will be available to
                     the Partnership for the desired period of procurement by
                     the SRM Procuring Partner under then existing supply
                     contracts and as provided in the Strategic Raw Materials
                     Purchasing Plan.

             13.3.8  The SRM Procuring Partner shall be responsible for meeting
                     specifications established by the Operator for the
                     Strategic Raw Materials so procured. The SRM Procuring
                     Partner shall be responsible for compliance with the
                     Operator's requirements as to delivery terms for the
                     Strategic Raw Materials so procured. The SRM Procuring
                     Partner shall co-ordinate delivery schedules with the
                     Operator to provide for integration with overall Strategic
                     Raw Material procurement for the PO-11 Plant Facilities.
                     The SRM Procuring Partner shall bear all production loss
                     attributable to its failure to timely arrange delivery of
                     Strategic Raw Materials meeting specifications to the
                     appropriate delivery point(s) for the Strategic Raw
                     Materials that the SRM Procuring Partner has elected to
                     procure for its own account, notwithstanding the provisions
                     of Section 9.5.

             13.3.9  Title and risk of loss of the Strategic Raw Materials
                     procured by the SRM Procuring Partner shall pass to the
                     Partnership upon receipt by the Partnership of the
                     Strategic Raw Materials at the delivery point, subject to
                     the Strategic Raw Materials meeting specification testing
                     in accordance with the Operator's customary practices. The
                     delivery point for propylene delivered by the SRM Procuring
                     Partner to the Europoort Terminal shall be the intake
                     flange at a common storage tank for propylene at Europoort.
                     The delivery point for ethylene and benzene, and propylene
                     delivered to the PO-11 Plant Facilities, shall be

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<PAGE>

                     the intake flange at a common storage tank for such
                     Strategic Raw Material located at the Leased Premises.

            13.3.10  The SRM Procuring Partner shall bear the total acquisition
                     costs (including costs to deliver the Strategic Raw
                     Materials to the delivery point, as provided in Section
                     13.3.9) of the Strategic Raw Materials that it has elected
                     to procure for its own account. The SRM Procuring Partner
                     is not required to disclose the price terms for such
                     Strategic Raw Materials procured for its own account to the
                     other Partner or to the Operator. The Non-Procuring Partner
                     shall bear a correspondingly higher share of the
                     corresponding Strategic Raw Material purchased for the
                     account of the Partnership so that its PO or SM (as
                     relevant for the Strategic Raw Material in question)
                     capacity needs are met solely from the Strategic Raw
                     Materials purchased for the account of the Partnership.
                     Notwithstanding the foregoing, such share could be subject
                     to possible adjustment if and to the extent necessary so
                     that the Non-Procuring Partner is kept economically neutral
                     by reason of the SRM Procuring Partner's procurement.

            13.3.11  As an example of how these provisions are intended to
                     apply, assume both Partners' Offtake Percentage is 50%
                     (fifty percent) and that the PO-11 Plant Facilities are
                     scheduled in the Annual Plan to operate at nameplate
                     capacity for the upcoming Plan Year. Assume a SRM Procuring
                     Partner intends to supply for the upcoming year 30% (thirty
                     percent) of the propylene required to supply its Offtake
                     Percentage of nameplate PO capacity. This would mean that,
                     under the foregoing assumptions, the SRM Procuring Partner
                     elects to supply 15% (fifteen percent) of the total
                     propylene needs of the PO-11 Plant Facilities for the
                     upcoming Plan Year. Assume the acquisition and delivery
                     costs of the propylene purchased by or on behalf of the
                     Partnership on a unit (metric tonne) basis is unaffected by
                     the SRM Procuring Partner's decision. Assume propylene
                     deliveries by the SRM Procuring Partner are made rateably
                     each month. Each month, the SRM Procuring Partner would pay
                     for (a) 100% (one hundred percent) of the acquisition and
                     delivery costs of the propylene it is supplying and (b) 41%
                     (forty-one percent) of the acquisition and delivery costs
                     of the propylene purchased by or on behalf of the
                     Partnership. The Non-Procuring Partner would pay 59%
                     (fifty-nine percent) of the acquisition and delivery costs
                     of the propylene purchased by or on behalf of the
                     Partnership. The Non-Procuring Partner will be in the same
                     economic position that it would have been in if it were
                     paying 50% (fifty percent) of the costs of the total
                     propylene supplied to the PO-11 Plant Facilities, since the
                     unit cost of propylene is unchanged.

            13.3.12  Not more than once per year, each Partner shall have the
                     right to have an independent external auditor conduct the
                     other Partner's compliance with this Section 13.3 for the
                     then current and/or prior calendar year if the other
                     Partner has procured Strategic Raw Materials for its own
                     account during such period.

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<PAGE>

       13.4  Disputes Regarding EHS and Personnel Compensation Expenditures.

             13.4.1  The following provisions of this Section 13.4 apply to the
                     rights of the Bayer Partner to dispute expenditures or
                     proposed expenditures by the Operator for EHS activities or
                     that are the result of personnel compensation increases
                     that are not in accordance with the Annual Budget and that
                     are undertaken or are proposed to be undertaken by the
                     Operator based on its spending authority under Section
                     7.4.2(b) or Section 7.4.2(f) or Section 7.5.2(a) or Section
                     7.5.2(g) (and not another basis under Section 7.4.2 or
                     Section 7.5.2).

             13.4.2  If the Bayer Partner believes that any such unbudgeted
                     expenditure for EHS activities or that results from
                     personnel compensation increases is not consistent with the
                     EHS Policies or the Personnel Policies, as applicable, then
                     the Bayer Partner, with concurrent notice to the Lyondell
                     Partner and to the Operator, shall bring such dispute to
                     the Management Committee for attempted resolution within 10
                     (ten) days after the Bayer Partner becomes aware of the
                     disputed expenditure pursuant to written information
                     provided to the Bayer Partner by the Operator or the
                     Lyondell Partner.

             13.4.3  If the Bayer Partner timely brings the dispute to the
                     Management Committee and if the Management Committee does
                     not resolve such dispute within 10 (ten) days after the
                     dispute is first submitted to the Management Committee for
                     attempted resolution, then the Bayer Partner may submit the
                     dispute to the Global Steering Committee for attempted
                     resolution within 5 (five) Business Days after the
                     expiration of the 10 (ten) day period within which the
                     Management Committee is given to resolve such dispute.

             13.4.4  If the Bayer Partner timely brings the dispute to the
                     Global Steering Committee and if the Global Steering
                     Committee does not resolve such dispute within 10 (ten)
                     days after the dispute is first submitted to the Global
                     Steering Committee for attempted resolution, then the Bayer
                     Partner, by notice to the Lyondell Partner and to the
                     Operator within 10 (ten) days after the expiration of the
                     10 (ten) day period within which the Global Steering
                     Committee is given to resolve such dispute, may submit the
                     issue as to whether the Operator's positions in dispute are
                     in fact consistent with the EHS Policies or the Personnel
                     Policies, as applicable, to resolution by a three-member
                     panel of binding advisors in accordance with Article C of
                     Exhibit B. As a precondition to submitting the dispute to
                     resolution by a panel of binding advisors, the Bayer
                     Partner shall submit with its notice to the Lyondell
                     Partner and to the Operator a written reasoned explanation
                     of the basis for the Bayer Partner's objections.

             13.4.5  The Bayer Partner shall elect in writing by notice to the
                     Lyondell Partner prior to or at the time the Bayer Partner
                     submits such dispute to resolution by a binding advisor
                     procedure pursuant to Section 13.4.4.

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<PAGE>

                     whether (a) to release the Lyondell Partner from
                     responsibility pursuant to Section C.7(d) of Exhibit B for
                     potentially paying more than the Lyondell Partner's
                     Partnership Percentage share of the costs associated with
                     such expenditures by the Operator which the Partnership may
                     incur during the pendency of the dispute resolution process
                     if the Operator proceeds with the EHS or personnel
                     compensation increase expenditure or (b) to accept
                     responsibility for Damages that the Operator and the
                     Lyondell Partner may incur if the Operator defers such
                     activities and expenditures until the dispute is resolved.

             13.4.6  If the Bayer Partner elects not to so release the Lyondell
                     Partner, then the Lyondell Partner shall instruct the
                     Operator to continue with the Operator's proposed
                     expenditures or to defer such expenditures.

             13.4.7  If the Bayer Partner elects not to so release the Lyondell
                     Partner, and the binding advisors determine that the EHS or
                     personnel expenditures are inconsistent with the EHS
                     Polices or the Personnel Policies, as applicable, then the
                     Partners' respective share of the costs incurred by the
                     Partnership as a result the Operator's proceeding with its
                     proposed expenditures during the resolution of the dispute
                     shall be determined under Section C.7 of Exhibit B.

             13.4.8  If the Lyondell Partner instructs the Operator to defer
                     such expenditures during the resolution of the dispute, and
                     the binding advisors do not determine that the EHS or
                     personnel expenditures are inconsistent with the EHS
                     Polices or the Personnel Policies, as applicable, then the
                     Bayer Partner shall be solely responsible for Damages
                     incurred by the Operator and the Partnership as a
                     consequence of the deferral in accordance with Section C.8
                     of Exhibit B.

          ARTICLE 14  DISCRETIONARY CAPITAL PROJECTS PROPOSED BY THE
                     PARTNERS, UNILATERAL CAPITAL PROJECTS

     14.1  Discretionary Capital Projects Proposed by a Partner. Each Partner
shall have the right on or before 1 September of each year to submit to the
Partnership for the following year proposals for Discretionary Capital Projects
which, in the opinion of such Partner, are beneficial to both Partners or that
Partner alone. Given that the Bayer Partner does not have access to the
Proprietary PO/SM Technology, the Bayer Partner may present its proposals on the
basis of certain desired results.

     14.2  Detailed Study. Where the Operator proceeds with a feasibility and
cost study in accordance with Section 7.6.1 of the Operating Agreement, and if
either or both of the Partners desire to further proceed with the proposal, then
the Lyondell Partner shall cause the Operator to prepare a detailed study
including a schedule for implementation, project scope, plans, a preliminary
estimate of costs and all other information relevant or necessary to allow the
Partners to evaluate the proposal and determine whether to participate in the
Capital Costs, risks and resulting benefits in accordance with their Partnership
Percentages.

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<PAGE>

     14.3  If Both Partners Desire to Proceed with a Discretionary Capital
Project. If both Partners desire to proceed with the Discretionary Capital
Project proposed by a Partner, then such Discretionary Capital Project shall be
included in the Annual Plan and Capital Budget and the Partners shall
participate in such Capital Project in accordance with their Partnership
Percentages. Without limitation, the costs incurred by the Operator under
Section 7.6.1 and Section 7.6.2 of the Operating Agreement shall be shared by
the Partners in accordance with their Partnership Percentages. If only one
Partner desired the Operator to proceed with the feasibility and cost study or
detailed study, then the costs incurred by the Operator under Section 7.6.1 and
Section 7.6.2 of the Operating Agreement shall be borne by the requesting
Partner.

     14.4  Right to Qualified Independent Engineer Confirmation. If a Partner is
not satisfied with the Operator's justification for not proceeding with a
feasibility and cost study, is not satisfied with the results of a feasibility
and cost study, or is not satisfied with the detailed study under Section 14.2,
then such Partner, at its expense, may require the Operator to have a qualified
independent engineer selected by the Operator and confirmed by the Partner
Representative of such Partner validate the Operator's conclusions, subject to
the independent engineer entering into an appropriate confidentiality agreement
with the Operator.

     14.5  Unilateral Capital Projects; Unilateral Capital Project Threshold.

           14.5.1  If a Discretionary Capital Project is proposed by a Partner
                   or the Operator as part of the Annual Plan process but is
                   rejected by the other Partner, then the Partner desiring to
                   proceed may proceed with such project as a Unilateral Capital
                   Project if (a) such Discretionary Capital Project exceeds the
                   then applicable Unilateral Capital Project Threshold and (b)
                   at least four years have lapsed from Commercial Start Up
                   before such Unilateral Capital Project is commenced. If the
                   Partner proceeds with such project as a Unilateral Capital
                   Project, then the following provisions of this Article 14
                   will apply.

           14.5.2  "UNILATERAL CAPITAL PROJECT THRESHOLD" means a threshold
                   applicable to the estimated costs of a proposed Discretionary
                   Capital Project equal to EUR 50,000,000 (fifty million Euros)
                   (Inflation Adjusted) if the proposed Discretionary Capital
                   Project has not been proposed as part of the Annual Plan
                   process in any prior year and has not been included in a Four
                   Year Forward Forecast in any prior year, or in all other
                   cases, EUR 20,000,000 (twenty million Euros) (Inflation
                   Adjusted), subject in each case to adjustment in accordance
                   with Section 14.9.

     14.6  Risks and Benefits Borne by Proceeding Partner. Regardless of which
Partner desires to proceed with a Unilateral Capital Project, the Lyondell
Partner shall instruct the Operator to proceed with a Unilateral Capital
Implementation Plan with the objective that the economic ownership, including
all cost saving, capacity increase, reliability improvement and other
performance benefits and all costs and risks of the Unilateral Capital Project
shall be for the sole account of the Partner proceeding with such Capital
Project, and that the other Partner is to be held entirely economically neutral,
as if such Unilateral Capital Project had not been undertaken.

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<PAGE>

     14.7  Disputes Regarding any Unilateral Capital Project Implementation
Plan. Either Partner, acting reasonably and in good faith, may object to any
Unilateral Capital Implementation Plan proposed by the Operator in accordance
with Section 7.6 of the Operating Agreement. If any dispute concerning the
Unilateral Capital Implementation Plan remains unresolved among the Partners 30
(thirty) days following the Operator's initial submission of the Unilateral
Capital Implementation Plan to the Partners, the Partner who is dissatisfied
with the Unilateral Capital Implementation Plan may initiate the Dispute
Resolution Procedures of Exhibit B. If the dispute is not resolved within 6
(six) months after the Unilateral Implementation Plan of the Operator is first
submitted to the Partners, then the Partner desiring to proceed with the
Unilateral Capital Project may, at its sole election, instruct the Operator on
behalf of the Partnership to proceed with such Capital Project, subject to the
subsequent determination of the Unilateral Implementation Plan through the
Dispute Resolution Procedures of Exhibit B.

     14.8  Management Committee Disapproval Does Not Prohibit Proceeding with a
Project as a Unilateral Capital Project. For the avoidance of doubt, no
disapproval of a Discretionary Capital Project by the Management Committee shall
prevent a Partner desiring to proceed with such Capital Project from doing so as
a Unilateral Capital Project, subject to the provisions of this Article 14.

     14.9  Adjustment to Unilateral Capital Project. If in the then current Plan
Year a Partner has rejected 75% (seventy five percent) or more of the aggregate
costs of the Discretionary Capital Projects for the consecutive period of five
years consisting of the then current Plan Year and the four preceding years,
based on the initial estimated capital cost for each such project, proposed as
part of the Annual Plan process either by the other Partner or the Operator,
then the Unilateral Capital Project Threshold, as applied to the other Partner,
shall be reduced to EUR 3,000,000 (three million Euros) (Inflation Adjusted) for
the remainder of the current Plan Year and for the next Plan Year. The adjusted
Unilateral Capital Project Threshold shall apply regardless of whether a
Discretionary Capital Project has been proposed in a Four Year Forward Forecast
in any prior year.

     14.10  No Rights to Technology. Nothing in this Article 14 entitles or
shall be deemed to entitle the Bayer Partner to any rights or access to, or
disclosure concerning, the Proprietary PO/SM Technology.

         ARTICLE 15  ADJUSTMENTS OF INTERESTS FOR UNILATERAL CAPITAL
                         PROJECTS THAT AFFECT CAPACITY

     15.1  Unilateral Capital Projects that Increase Production Capacity. With
respect to a Unilateral Capital Project that increases the overall production
capacity of the PO-11 Plant Facilities for PO and co-produced SM, the Offtake
Percentage for each Partner shall be changed in accordance with Section 15.2.

     15.2  Change to Offtake Percentages. The Offtake Percentage shall, for the
Partner proceeding with such Unilateral Capital Project, be adjusted by (a)
multiplying that Partner's then-existing Offtake Percentage prior to such
Unilateral Capital Project by the sum of the total rated PO capacity of the
PO-11 Plant Facilities prior to such Unilateral Capital Project being
undertaken; (b) adding to such amount the incremental demonstrated rated PO
capacity increase attributable to such Unilateral Capital Project; and (c)
dividing such sum by the total

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<PAGE>

demonstrated rated PO capacity of the PO-11 Plant Facilities after such
Unilateral Capital Project has been undertaken. All calculations shall be made
based on the same PO/SM production ratio. The methodology for determining the
incremental demonstrated PO capacity shall be determined in the Unilateral
Capital Implementation Plan. The other Partner's Offtake Percentage shall be
100% (one hundred percent) minus the new Offtake Percentage of the Partner
proceeding with the Unilateral Capital Project.

     15.3  Allocation of Capital Costs. Subject to any contrary provision of the
Unilateral Capital Implementation Plan, for purposes of allocating Capital Costs
for the period from the first invoicing of a Unilateral Capital Project, the
Partners' shares of such Capital Costs shall be determined by allocating all
Capital Costs attributable to the Unilateral Capital Project to the Partner
undertaking such project, including as to future Maintenance Capital Projects,
EHS Capital Projects and Discretionary Capital Projects attributable to the
Unilateral Capital Project subsequent to completion of such Unilateral Capital
Project, and by allocating all other Capital Costs of the Partnership to the
Partners in accordance with their Partnership Percentages.

                 ARTICLE 16  ALLOCATION OF PROFITS AND LOSSES

     The profits and losses, if any, of the Partnership shall be allocated to
the Partners in accordance with their respective Partnership Percentages.

                           ARTICLE 17  DISTRIBUTIONS

     17.1  Distributions of Cash. All cash not required for Partnership Working
Capital purposes under Section 6.2.1 of this Agreement shall be distributed to
the Partners quarterly. If cash in excess of that required for Partnership
Working Capital purposes under Section 6.2.1 exceeds (a) first, the profits, if
any, allocated to the Partners for that year and (b) second, the amount of all
profits for prior years in excess of previous cumulative cash distributions,
such excess cash shall be used for the repayment of the capital of the Partners.

     17.2  Classification of Proceeds. The Lyondell Partner shall classify all
proceeds received by the Partnership from the sale, exchange, involuntary
conversion or other disposition of Partnership assets as "PARTNERSHIP ASSET
PROCEEDS" or "UNILATERAL CAPITAL PROJECT ASSET PROCEEDS". The characterisation
of proceeds shall be made in accordance with the characterisation of the assets
to which such proceeds relate. Except as otherwise provided, the Partnership
Asset Proceeds will be distributed in accordance with their Partnership
Percentages to the Partners and the Unilateral Capital Project Asset Proceeds
will be distributed to the Partner who funded the Unilateral Capital Project
Asset.

                  ARTICLE 18  RATIFICATION OF PRIOR BUSINESS

     The Partners hereby ratify and adopt the contracts, commitments, letters of
intent, liabilities, obligations and rights pertaining to the Partnership's
business arising from the acts, agreements and commitments undertaken prior to
the Signing Date set forth in Schedule 18.  The agreements listed on Schedule 18
shall be assigned to and assumed by the Partnership, subject to obtaining the
consent of the counterparty to each such agreement.

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<PAGE>

                     ARTICLE 19  INDEMNIFICATION, WAIVERS

     19.1  Indemnification of the Operator. The Partners shall severally in
accordance with their Partnership Percentages indemnify and hold harmless the
Operator and the Operator's Eligible Indemnitees against any Third Party Claim
and resulting Damages arising out of or in connection with the ownership or
operation of the PO-11 Plant Facilities, except to the extent that such Third
Party Claim is covered by the indemnification of the Operator under Section
10.3.1 of the Operating Agreement or the indemnification of the other Partner
under Section 19.2 or Section 19.3.

     19.2  Indemnification for Product Liability and Related Claims. In addition
to the indemnification under Section 19.1, each Partner shall be responsible
for, and shall indemnify and hold harmless the Operator and the Operator's
Eligible Indemnitees and the other Partner and the other Partner's Eligible
Indemnitees against, any Third Party Claim and resulting Damages arising out of
PO, SM or other products or services sold, made available or distributed by the
indemnifying Partner and/or its Affiliates and/or the storage, transportation,
processing or sale of PO or SM after receipt of such product by such Partner at
the Delivery Point.

     19.3  Indemnification for Failure to Timely Make Payment. In addition to
the indemnification provided in Section 19.1 and Section 19.2, each Partner
shall be solely responsible for all resulting Damages incurred by the Operator
and the other Partner for their own account (excluding lost profits, and
consequential, incidental and punitive damages and net of and after taking into
account available recoveries through insurance and against Third Parties) as a
result of a Partner's failure or refusal to timely make any payment in
accordance with this Agreement.

     19.4  Indemnification Procedures.

           19.4.1  Any Party seeking indemnification from another Party must
                   promptly notify in writing the Party from which it seeks
                   indemnification of the Claim. In such notice, the Party
                   seeking indemnification for a Third Party Claim shall include
                   copies of all papers served or delivered with respect to such
                   Claim. Such notice shall state the basis for the request for
                   indemnification.

           19.4.2  The Partnership hereby authorises the Operator, as an expense
                   of the Partnership (but without altering the Operator's
                   potential responsibility for reimbursement under Section 10.3
                   of the Operating Agreement where applicable), to instruct
                   legal counsel and otherwise take all actions to avoid,
                   defend, appeal, settle and/or otherwise manage every Third
                   Party Claim on behalf of all Parties, including in the name
                   of the Partnership or any Partner that is a named defendant
                   in such Third Party Claim. The Partners shall confirm such
                   authorisation in writing promptly following written request
                   of the Operator.

           19.4.3  The Partners shall fully co-operate with the Operator in
                   respect of the Claim, including promptly providing copies of
                   all court or arbitration papers and other notices and
                   documents. The Partners shall sign as

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<PAGE>

                   requested all court or arbitration filings and make their
                   respective employees available on a mutually convenient basis
                   to provide information and to serve as witnesses.

           19.4.4  The Parties will not assert any Claim against one another in
                   connection with any Third Party Claim until (a) the Third
                   Party Claim and resulting Damages are resolved by final
                   judgement or settlement and (b) all claims against insurers
                   and Third Parties for indemnification or contribution related
                   to the Third Party Claim are resolved by final judgement or
                   settlement.

           19.4.5  Pursuant to the terms of Section 4.7 of the Operating
                   Agreement, the Operator may not, without the approval of the
                   Partnership, such approval not to be unreasonably withheld,
                   initiate or settle any Material Litigation. The Partners
                   agree that where only one Partner would be adversely affected
                   by the initiation or settlement of such Material Litigation,
                   the adversely affected Partner shall have the sole right to
                   exercise such approval on behalf of the Partnership.

     19.5  Waiver of Claims.

           19.5.1  To the maximum extent permitted by Applicable Law, each
                   Partner releases and waives all Claims against the Operator
                   and its officers, employees and agents, for personal injury
                   to or death of employees or agents or damage to or
                   destruction or loss of tangible property that is located
                   within the PO-11 Plant Facilities and is owned or leased, as
                   applicable, by the Partnership or the waiving Partner or its
                   Affiliates, regardless of the acts, omissions, negligence
                   (whether active, passive, concurrent or sole) or Fault of any
                   Person.

           19.5.2  To the maximum extent permitted by Applicable Law, each
                   Partner releases and waives on behalf of itself and its
                   Affiliates, all Claims against the Operator and its officers,
                   employees and agents, for any Damages incurred by the
                   Partnership, or the waiving Partner or its Affiliates for
                   their own account, including actual damages, lost profits and
                   consequential, incidental or punitive damages, arising out of
                   the ownership or operation of the PO-11 Plant Facilities or
                   any activities or obligations under or related to this
                   Agreement, regardless of the acts, omissions, negligence
                   (whether active, passive, concurrent or sole) or Fault of the
                   Operator, except as expressly otherwise provided in Section
                   10.3.2 of the Operating Agreement.

     19.6  No Warranties or Indemnities. Neither Partner makes any warranties or
guarantees to any other Party, either express or implied, with respect to the
subject matter of this Agreement, and all Parties disclaim and waive any implied
warranties or warranties imposed by law (recognising that there are no implied
warranties under the laws of The Netherlands as of the Signing Date).

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<PAGE>

     19.7  Liability of Partners. Neither Partner shall be liable, responsible
or accountable in damages or otherwise to the Partnership or the other Partner
for any act or omission, except for its Fault, in carrying out its obligations
hereunder.

                         ARTICLE 20  USE OF TECHNOLOGY

     20.1  Use by Bayer Partner of Lyondell License. If the Bayer Partner
receives PO produced by the Partnership that it desires to use or uses outside
of the field of use specified in the Bayer License Agreement, then the Bayer
Partner shall have the right to require that the Lyondell Partner accommodate
the Bayer Partner such that the Bayer Partner obtains the use of the Lyondell
Partner's unrestricted license solely for such use, only if and provided that
the Bayer Partner pays to the Lyondell Partner on or before the 15th (fifteenth)
day of the month in which the Bayer Partner uses the PO outside the field of use
specified in the Bayer License Agreement the Accommodation Fee, accompanied by a
report showing the total metric tonnes of PO to be used outside of the field of
use in the Bayer License Agreement.

     20.2  Accommodation Fee.

           20.2.1  The "ACCOMMODATION FEE" is an amount for each metric tonne of
                   PO or portion thereof used outside of the field of use
                   specified in the Bayer License Agreement equal to the
                   positive difference between (a) the average PO sales price of
                   the Lyondell Group to Third Parties for use in Western Europe
                   for the month and (b) the PO Manufacturing Costs for the
                   month.

           20.2.2  The "PO MANUFACTURING COSTS" equals [Total Costs Plus New
                   Capital Depreciation minus (the SM Manufacturing Costs for
                   the month, based on budgeted costs, times the total metric
                   tonnes of SM nominated by the Partners for the month)]
                   divided by the total metric tonnes of PO nominated by the
                   Partners for the month.

           20.2.3  "TOTAL COSTS PLUS NEW CAPITAL DEPRECIATION" equals the sum of
                   actual Operating Costs for the PO-11 Plant Facilities for the
                   month in question plus 1/12th (one twelfth) of the annual
                   depreciation charge in respect of Capital Projects that are
                   not part of the initial construction of the PO-11 Plant
                   Facilities (i.e. the costs for which are not part of PO-11
                   Project Costs). Unilateral Capital Projects and Capital Costs
                   associated with Unilateral Capital Projects, as described in
                   Section 15.3, shall not be included in such calculation,
                   regardless of whether the Lyondell Partner or the Bayer
                   Partner is the Partner proceeding with such Unilateral
                   Capital Project.

     20.3  No Application to Bayer Spare Capacity Sold to Lyondell. The
Accommodation Fee shall not apply to any PO sold to Lyondell pursuant to
Section 9.4.

     20.4  Certification. On or before 1 April of each year, an executive
officer of Bayer will certify on behalf of the Bayer Partner to the Lyondell
Partner as to the implementation of Section 20.2 and the determination of the
Accommodation Fee, if any, payable as provided in the foregoing provisions of
this Article 20, in accordance with Schedule 20.4.

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<PAGE>

     20.5  No Technology Transfer or Grant of License under this Agreement.
Neither this Agreement, nor the performance by a Partner of its duties
hereunder, shall operate to convey, license or otherwise transfer from one
Partner to another (or from the Operator to the Partners, or from the Partners
to the Operator) any patent, patent application, invention, know-how, trade
secret or other intellectual property rights.

     20.6  Lyondell Group Technology. The Proprietary PO/SM Technology is
proprietary technology of an Affiliate of Lyondell. Subject only to the express
written rights of the Lyondell Partner and the Bayer Partner under each
Partner's respective License Agreement, all rights of ownership, use, practice
and exploitation of the Proprietary PO/SM Technology are, and are intended to
remain, the exclusive property rights of the Affiliate of Lyondell. All
inventions, developments and improvements to the Proprietary PO/SM Technology
resulting from the development and operation of and improvements to the PO-11
Plant Facilities are the sole property of the Lyondell Affiliate to the
exclusion of the Partnership and the Partners, subject only to the express
written rights of the Partners under their respective License Agreement.

                            ARTICLE 21  COMPETITION

     Except as may be set forth in the Master Transaction Agreement, each
Partner and each Partner's Affiliates shall be free to engage in or possess an
interest in any other business of any type, including any business in direct
competition with the Partnership and to avail itself of any business opportunity
available to it without having to offer to the Partnership or any Partner the
opportunity to participate in such business.  Such activities shall not
constitute or be construed as a breach of any duty, including without limitation
any duty arising from the principles of reasonableness and fairness and shall
not constitute any improper or unlawful use of a corporate or business
opportunity.

                ARTICLE 22  RESTORATION FOLLOWING CASUALTY LOSS

     22.1  Restoration Absent Mutual Agreement for First Twenty Years. Where any
Casualty occurs in relation to the PO-11 Plant Facilities within the first 20
(twenty) years of the Production Term, unless both Partners agree otherwise, the
PO-11 Plant Facilities shall be restored in accordance with Section 22.3. Where
the Partners agree otherwise, the provisions of Section 22.4 shall apply.

     22.2  No Restoration Following Major Casualty Occurring After First Twenty
Years. Where any Casualty occurs in relation to the PO-11 Plant Facilities
after the first 20 (twenty) years of the Production Term, except where such
Casualty is a Major Casualty or except where the Parties agree otherwise, the
PO-11 Plant Facilities shall be restored in accordance with Section 22.3. In the
case where such Casualty is a Major Casualty, unless the Parties agree
otherwise, the PO-11 Plant Facilities shall not be restored and the provisions
of Section 22.4 shall apply.

     22.3  Restoration. Where restoration of the PO-11 Plant Facilities is to
take place either by agreement between the Partners or otherwise in accordance
with the terms of this Article 22, such restoration shall be to the condition
existing prior to the Casualty with such changes as agreed by the Partners and
shall be treated as a Maintenance Capital Project. The Lyondell Partner shall
instruct the Operator to diligently prosecute the restoration to

                                      36
<PAGE>

completion, provided that the Partners timely fund their share of Casualty
Restoration Costs. The Partners shall mutually agree on required changes to any
amounts payable under this Agreement or the Operating Agreement or other changes
required to reflect changes made to the PO-11 Plant Facilities, including as to
technology.

     22.4  Where Facilities Are Not Being Restored. Where it is agreed between
the Partners or deemed otherwise in accordance with the terms of this Article 22
that the PO-11 Plant Facilities shall not be restored, then the available
insurance proceeds attributable to the PO-11 Plant Facilities shall be
distributed to the Partners in accordance with Article 17. The Partnership shall
then be wound up and liquidated in accordance with Article 24.

     22.5  Decisions. Any agreement of the Partners required under this Article
22 shall be reflected in a written Management Committee Resolution.

     22.6  Definition of Major Casualty. For the purposes of this Article 22,
"MAJOR CASUALTY" shall mean a Casualty to the PO-11 Plant Facilities as to which
the restoration will take more than one and a half years.

               ARTICLE 23  RESTRICTION OF TRANSFERS AND PLEDGES

     23.1  Prohibition on Transfer Unless Exception Applies. Except as otherwise
permitted under this Article 23, neither Partner shall Transfer or Pledge its
respective Partnership Interest or any part thereof.

     23.2  Permitted Transfers to an Affiliate.

           23.2.1  Either Partner may, without the need for the consent of the
                   other Partner or any of its Affiliates, Transfer all (but not
                   part only) of its Partnership Interest to an Affiliate, a
                   Successor Parent or an Affiliate of a Successor Parent,
                   provided that the conditions of Section 4.3 and Section 4.4
                   of the Parent Agreement remain satisfied following the
                   Transfer and the conditions of Section 23.4 are satisfied.

           23.2.2  The Partners hereby consent in advance to the Transfer of a
                   Partnership Interest to (a) the Bayer Conditional Transferee
                   in accordance with Section 2 of the Conditional Transfer
                   Agreement, (b) the Lyondell Conditional Transferee in
                   accordance with Section 3 of the Conditional Transfer
                   Agreement and (c) a permitted assignee of the Bayer
                   Conditional Transferee or the Lyondell Conditional Transferee
                   following assignment by the Bayer Conditional Transferee or
                   the Lyondell Conditional Transferee, as the case may be, of
                   its rights and obligations under the Conditional Transfer
                   Agreement in accordance with Section 4.2 of the Conditional
                   Transfer Agreement.

     23.3  Certain Transfers in Connection with Successor Parent Transfer or
Permitted Successor. Either Partner may Transfer all (but not part only) of its
Partnership Interest if such Transfer is in connection with any of the
following:

           23.3.1  With respect to either the Bayer Partner or the Lyondell
                   Partner, as applicable, a merger, consolidation, conversion
                   or share exchange of

                                      37
<PAGE>

                    Lyondell (or the Lyondell Successor Parent) or Bayer (or the
                    Bayer Successor Parent).

            23.3.2  In the case of the Lyondell Partner:

                    (a)  a sale or other disposition of the Partnership Interest
                         of the Lyondell Partner, together with assets
                         representing at least 50% (fifty percent) of the book
                         value of the total assets of Lyondell (or the Lyondell
                         Successor Parent), excluding the Lyondell Partnership
                         Interest, as reflected in the most recent audited
                         consolidated (or combined) financial statements of
                         Lyondell (or the Lyondell Successor Parent) to a single
                         entity or to entities which are all Affiliates of one
                         another; or

                    (b)  a sale or other disposition of the Partnership Interest
                         of the Lyondell Partner, together with (i) the PO-11
                         Technology and (ii) other assets equal to at least 90%
                         (ninety percent) of the book value of all of the PO
                         production assets of the Lyondell Group world-wide, to
                         a single entity or to entities which are all Affiliates
                         of one another.

     23.3.3  In the case of the Bayer Partner:

                    (a)  a sale or other disposition of the Partnership Interest
                         of the Bayer Partner, together with assets representing
                         at least 50% (fifty percent) of the book value of the
                         total assets of Bayer (or the Bayer Successor Parent),
                         excluding the Bayer Partnership Interest, as reflected
                         in the most recent audited consolidated (or combined)
                         financial statements of Bayer (or the Bayer Successor
                         Parent) to a single entity or to entities which are all
                         Affiliates of one another; or

                    (b)  a sale or other disposition of the Partnership Interest
                         of the Bayer Partner, together with other assets equal
                         to at least 90% (ninety percent) of the book value of
                         all of the Identified Polyols production assets of the
                         Bayer Group world-wide, to a single entity or to
                         entities which are all Affiliates of one another.

     23.4  Assumption of Obligations by Assignee. Either Partner assigning its
rights and obligations hereunder in connection with an assignment permitted
under this Article 23, or as approved in writing by the other Partner, shall
procure, as a condition precedent to the assignment, (a) a written assumption
agreement from the assignee thereof to the effect that the assignee accepts and
assumes all obligations of the assignor under this Agreement and agrees to be
fully and unconditionally bound by the terms and provisions of this Agreement
and (b) a new Conditional Transfer Agreement executed by the assignee on the
same terms and conditions as the Conditional Transfer Agreement of the assignor
(the Conditional Transfer Agreement of the assignor shall be contemporaneously
cancelled). Upon the delivery of such assumption agreement by the assignee, the
assigning Partner, except in

                                      38
<PAGE>

connection with an assignment to an Affiliate, shall be released from
obligations and liabilities with respect to events occurring subsequent to the
assignment.

     23.5  Admission of a New Partner. The admission of any new Partner (except
in accordance with the foregoing provisions of this Article) shall require the
unanimous consent of all Partners.

     23.6  Continuation of the Partnership. Upon the admission of any new
Partner, the Partnership shall continue to exist between the new Partner and the
existing Partner. Upon the replacement of a Partner and the transfer of a
Partnership Interest to a permitted assignee, the Partnership shall terminate
with respect to the transferring Partner and continue to exist between the new
Partner and the non transferring Partner.

     23.7  New Partners Bound by Terms and Conditions of this Agreement. Any new
Partner shall be subject to and bound by all of the terms and conditions of this
Agreement.

     23.8  No Application to Transfers or Pledges of Ownership Interests within
Partners. Nothing in this Article 23 applies to or restricts the Transfer or
Pledge of Ownership Interests within the Lyondell Partner or the Bayer Partner.
Transfers and Pledges of Ownership Interests within the Lyondell Partner and the
Bayer Partner are exclusively governed by the Parent Agreement.

            ARTICLE 24  TERMINATION, DISSOLUTION OF THE PARTNERSHIP

      24.1  Events of Dissolution and Liquidation. The Partnership shall be
dissolved and liquidated, in accordance with Article 25 and Article 26 hereof,
upon the happening of any of the following events:

            (a)  the written decision of all Partners to dissolve the
                 Partnership, or

            (b)  the expiration of the Initial Contract Term, or the extended
                 Term if the Term has been extended in accordance with Section
                 5.2.

     24.2  No Dissolution of the Partnership Upon Bankruptcy. The Partnership
shall not be dissolved in the event of the bankruptcy of either Partner pursuant
to a Bankruptcy Proceeding. The Partners hereby agree to enter into the
Conditional Transfer Agreement pursuant to which (a) the Lyondell Partner will
sell and transfer its Partnership Interest to an Affiliate of the Bayer Partner
under certain suspending ("opschortende") and dissolving ("ontbindende")
conditions and (b) the Bayer Partner will sell and transfer its Partnership
Interest to an Affiliate of the Lyondell Partner under certain suspending
("opschortende") and dissolving ("ontbindende") conditions.

                    ARTICLE 25  CONTINUATION OR LIQUIDATION

     25.1  Winding Up or Continuation of the Partnership. If Section 24.1
applies or the Partnership is dissolved for any other reason than the bankruptcy
of a Partner pursuant to a Bankruptcy Proceeding, neither Partner shall have the
unilateral right to continue the Partnership's business. In the event of the
bankruptcy of a Partner pursuant to a Bankruptcy

                                      39
<PAGE>

Proceeding, the non-bankrupt Partner shall have the right to continue the
Partnership's business pursuant to the provisions of the Conditional Transfer
Agreement.

     25.2  Winding Up and Liquidation. If at any time the Partnership is
dissolved, no further business and/or operations shall be conducted except for
such business and/or operations as shall be necessary for the winding up and
liquidation of the Partnership's assets. The liquidation of the Partnership
shall be conducted by the Lyondell Partner.

     25.3  Offering of Partnership Assets. Upon liquidation of the Partnership
in accordance with the following provisions of this Article 25, the Lyondell
Partner shall offer the assets of the Partnership for sale and shall consider
all appropriate bids, including bids from the Partners, with the objective to
obtain the best price for such assets.

     25.4  Payment of Debts; Liquidating Distributions

  The Lyondell Partner shall cause the Partnership to pay all debts,
obligations and liabilities of the Partnership and all costs of the liquidation.
Additionally, the Lyondell Partner shall set aside sufficient funds (in the
Lyondell Partner's opinion) for contingent liabilities and claims.  Any
remaining proceeds shall be distributed to the Partners in the following order:

          (a)  the profits allocated to the Partners pursuant to Article 16 of
               this Agreement which have not yet been distributed to the
               Partners up to that date; and

          (b)  the remainder to the Partners in accordance with their
               Partnership Percentages, except that in the event that a Partner
               has undertaken a Unilateral Capital Project, any Unilateral
               Capital Project Asset Proceeds shall first be distributed to the
               Partner who undertook such Unilateral Capital Project.
               Furthermore, except as otherwise agreed in writing by the
               Partners, if the Partners' contributions have been made in
               proportions other than in accordance with their Partnership
               Percentages, the capital contributions shall first be equalised
               before distributions in accordance with Partnership Percentages
               are made.

In the event that the proceeds of the liquidation and the other funds of the
Partnership are not sufficient to pay all debts, obligations and liabilities of
the Partnership and the costs of the liquidation, the loss shall be borne by the
Partners in accordance with their Partnership Percentages.

     25.5  Liquidation Report. Within a reasonable time following the completion
of the liquidation of the Partnership, the Lyondell Partner shall supply to both
Partners a report on the way the liquidation has been conducted as well as a
statement that shall set forth the assets and liabilities of the Partnership as
of the date of completion of the liquidation and the distribution to each
Partner in accordance with Section 25.4.

                                      40
<PAGE>

          ARTICLE 26  CLAIMS AFTER THE DISSOLUTION OF THE PARTNERSHIP

     In case any third party should file or commence a Claim against the
Partnership or one of the former Partners in connection with an alleged
liability of the Partnership, resulting from events which have occurred prior to
the liquidation of the Partnership, then the Partner who has received such Claim
shall immediately inform the other Partner.  Except in the case of Material
Litigation (in which case both Partners shall decide), the Lyondell Partner
shall decide whether to negotiate with the third party or to commence any legal
proceedings, including the conduct of arbitration proceedings, and/or enter into
settlement agreements with respect to such Claim.  The costs of such actions
shall be borne by both Partners in accordance with their Partnership
Percentages.

                          ARTICLE 27  CONFIDENTIALITY

     27.1  Obligation Not to Disclose or Misuse Confidential Information.

           27.1.1  Subject only to the express provisions of this Agreement,
                   each Party shall, and shall cause each of its Affiliates and
                   its and their respective Related Persons to, keep secret,
                   retain in strictest confidence and not distribute,
                   disseminate or disclose any and all Confidential Information
                   of another Party, except to the Related Persons and
                   contractors of such Party and its respective Affiliates on a
                   "need to know" basis in connection with this Partnership
                   Agreement and the performance thereof, provided that such
                   Person receiving such Confidential Information of another
                   Party executes a written confidentiality agreement of
                   comparable scope to this Section 27.1 or is bound by
                   professional obligations of confidentiality.

           27.1.2  A Party to whom the Confidential Information of another Party
                   is disseminated pursuant to this Section 27.1 shall use, and
                   shall cause its Affiliates and other Related Persons to use,
                   such Confidential Information only for the specific purposes
                   for which it was disclosed to such Person.

           27.1.3  Disclosure of Confidential Information by a Party or its
                   Affiliates shall not violate this Section 27.1 to the extent
                   that any Party (or its ultimate parent company) (a) deems it
                   necessary, pursuant to law, regulation or stock exchange rule
                   (in the reasonable good-faith judgement of such parent
                   company) to disclose such information in or in connection
                   with filings with any Governmental Entity, presentations to
                   lenders or presentations to ratings agencies or (b) to the
                   extent that disclosure is necessary in order to sustain a
                   position taken for tax purposes. The Parties and their
                   Affiliates shall consult with each other in advance to the
                   extent feasible and on an on-going basis with respect to
                   disclosures made by reason of this Section 27.1.3.

     27.2  Disclosures Required by Law. If a Party is legally required to
disclose any Confidential Information, it is agreed that such Party prior to
disclosure will provide the other Party with prompt notice of such request(s) so
that the other Party may seek an appropriate

                                      41
<PAGE>

protective order or other appropriate remedy and/or waive the Party's compliance
with the provisions of this Article 27.  If such protective order or other
remedy is not obtained, or the other Party grants a waiver hereunder, the Party
required to furnish Confidential Information may furnish that portion (and only
that portion) of the Confidential Information which, in the opinion of such
Party's legal counsel, such Party is legally compelled to disclose, and such
Party will use reasonable endeavours to obtain reliable assurance that
confidential treatment will be given to Confidential Information so furnished.

     27.3  Confidential Information Remains Property of Disclosing Party. All
Confidential Information and any intellectual property rights to which the
Confidential Information relates, that is disclosed in connection with or
pursuant to this Agreement shall remain the property of the Person whose
property it was prior to such disclosure.

     27.4  Survival. The provisions of this Article 27 shall survive the
termination of this Agreement indefinitely.

     27.5  Relationship With License Agreements. The provisions of this Article
27 are subject to the confidentiality provisions of the License Agreements,
which shall control in the event of a conflict with this Article 27.

                           ARTICLE 28  MISCELLANEOUS

     28.1  Notices. All notices, requests, demands and other communications that
are required or may be given to any Party under this Agreement, unless otherwise
provided herein, shall be in writing (facsimile and electronic communications
shall be treated as being "in writing") and shall be given to a Party thereto at
the address and/or facsimile number or electronic mail address specified below
or as such Party shall at any time otherwise specify by like notice to the other
Party. Each such notice, request, demand or other communication shall be
effective (a) if given by facsimile, at the time such facsimile is transmitted
and the appropriate confirmation is received (or, if such time is not during
regular business hours of a Business Day, at the beginning of the next such
Business Day); (b) if given by electronic mail, when receipt is confirmed by the
sender, provided notice is also delivered by another means permitted under this
Section 28.1; or (c) if given by mail or by any other means, upon receipt or
refusal of service at the address specified below.

          To the Lyondell Partner:

               Lyondell PO-11 C.V.
               Theemsweg 14
               3197 KM Rotterdam-Botlek
               The Netherlands
               Attention:  Director, European Manufacturing
               Facsimile: 31(0) 1812 94010

                                      42
<PAGE>

          Copy to:

               Lyondell Chemical Europe, Inc.
               Lyondell House
               Bridge Avenue
               Maidenhead
               Berkshire SL6 1YP U.K.
               Attention:  Global Vice President, Oxygenated Chemicals
               Facsimile:  44(0) 1628 775050

          Copy to:

               Lyondell Chemical Europe, Inc.
               Lyondell House
               Bridge Avenue
               Maidenhead
               Berkshire SL6 1YP U.K.
               Attention:  European Counsel
               Facsimile:  44(0) 1628 773104

          Copy to:

               Lyondell Chemical Company
               One Houston Center
               1221 McKinney Street, Suite 1600
               Houston, TX.  77253-3646
               USA
               Attention:  General Counsel
               Facsimile:  1 713 309 2143

          To the Bayer Partner:

               Bayer Polyurethanes B.V.
               Energieweg 1
               3641 RT Mijdrecht
               The Netherlands
               Attention:  Managing Director
               Facsimile: 31(0) 297 280231

                                      43
<PAGE>

          Copy to:

               Bayer AG
               Legal Department
               K-RP Rechstabteilung
               D-51368 Leverkusen
               Germany
               Attention:  Senior Counsel
               Facsimile:  49(0) 214 30 26786

     28.2  Construction. In construing this Agreement: (a) no consideration
shall be given to the captions of the Articles, Sections, subsections or
clauses, which are inserted for convenience only, (b) no consideration shall be
given to the fact or presumption that any Party had a greater or lesser hand in
drafting this Agreement, (c) examples shall not be construed to limit, expressly
or by implication, the matter they illustrate, (d) the word "includes" and its
syntactic variants means "includes, but is not limited to" and corresponding
syntactic variant expressions, words such as "herein," "hereafter," "hereof,"
"hereto" and "hereunder" refer to this Agreement as a whole and the word "and"
shall be deemed to mean "and/or" where the context so requires, (e) the plural
shall be deemed to include the singular, and vice versa, (f) each gender shall
be deemed to include the other gender, (g) each Exhibit, Appendix and Schedule
to this Agreement is part of this Agreement, (h) references to a Person are also
to its permitted successors and permitted assigns, (i) unless otherwise
expressly provided herein, any agreement, instrument or statute defined or
referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes, and (j) the use of the word "reasonable" or the
failure to use the word "reasonable" does not expand or limit the application of
Article 6:248 of the Netherlands Civil Code.

     28.3  Severability. In the event that any provision of this Agreement shall
be finally determined to be unenforceable, such provision shall, so long as the
economic and legal substance of the transactions contemplated hereby are not
affected in any materially adverse manner as to any Party, be deemed severed
from this Agreement and every other provision of this Agreement shall remain in
full force and effect.

     28.4  Tax Matters.

           28.4.1  The Parties agree to provide to one another necessary
                   documentation to support any position relating to the
                   ownership or operation of the PO-11 Plant Facilities that is
                   being taken by such Party in the preparation of its tax
                   return or in connection with any tax audit by any
                   Governmental Entity.

           28.4.2  The Partners acknowledge and agree that the tax attributes of
                   Partnership operations (including items of income, expense,
                   depreciation, gain, loss, etc.) shall be allocated to and
                   accounted for by the Partners in the same manner as the
                   corresponding economic item is shared pursuant to this
                   Agreement.

                                      44
<PAGE>

     28.5  Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of The Netherlands.

     28.6  Amendment and Waiver. This Agreement may not be amended, modified or
altered except by an instrument in writing signed on behalf of each Party. By an
instrument in writing any Party may waive compliance by any other Party with any
term or provision of this Agreement. The failure of a Party at any time to
strictly enforce any provision of this Agreement shall in no way affect its
right thereafter to require performance thereof, nor shall the waiver of any
breach of any provision of this Agreement be taken or held to be a waiver of any
succeeding breach of any such provision or as a waiver of the provision itself.

     28.7  Performance Extended to Next Business Day. Notwithstanding any
deadline for payment, performance, notice or election under this Agreement, if
such deadline falls on a date that is not a Business Day, then the deadline for
such payment, performance, notice or election will be extended to the next
succeeding Business Day provided that this Section 29.7 shall not apply to the
provisions of Section 10.6.

     28.8  Benefits of Agreement Restricted to the Parties. This Agreement is
made solely for the benefit of the Partnership and the Partners, and no other
person, including any employee of the Partnership or any Partner shall have any
right, claim or cause of action under and by virtue of this Agreement, except
for Article 19, with respect to the Operator and the Operator's Eligible
Indemnitees, which are intended beneficiaries thereof.

     28.9  Dispute Resolution. All controversies or disputes arising under this
Agreement shall be resolved pursuant to the provisions applicable to the dispute
in question set forth in Exhibit B.

                                      45
<PAGE>

     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and effective as of the date first above written.

Signed in fourfold copies at Rotterdam, The Netherlands.

BAYER PARTNER

BAYER POLYURETHANES B.V.

By: /s/ HANS-J. KAISER
   ----------------------------

Name: Hans-J. Kaiser
     --------------------------

Title: Head of BG PU
      -------------------------

LYONDELL PARTNER

LYONDELL PO-11 C.V.

By:  Lyondell Chemie (POSM) B.V.,
     its sole general partner

          By:  /s/ A.P. GAINES
              ----------------------------

          Name:   A.P. Gaines
                --------------------------

          Title:  Global V.P., Oxygenated Chemicals
                 -----------------------------------

            [signature page to PO-11 General Partnership Agreement]
<PAGE>

                                   EXHIBIT A

                             LIST OF DEFINED TERMS

                              FOR PO-11 DOCUMENTS

          The following defined terms are used in the Partnership Agreement,
Operating Agreement, Parent Agreement and Conditional Transfer Agreement.

          "Above Threshold" is in reference to a Capital Project and is defined
in Section 7.2 of the Operating Agreement.

          "Accommodation Fee" is defined in Section 20.2 of the Partnership
Agreement.

          "ACTLP" means Arco Chemical Technology L.P., and its permitted
successors and assigns under the Bayer License Agreement.

          "Additional Services" is defined in Section 4.8 of the Operating
Agreement.

          "Affiliate" means, with respect to any Person, any other Person who
directly or indirectly, through one or more intermediaries or otherwise,
controls, is controlled by or is under common control with, the specified
Person.  As used in this definition, "control" means the power to direct or
cause the direction of the management or policies of a Person, directly or
indirectly, whether through ownership of voting securities by contract or
otherwise); the terms "controlling" and "controlled" have meanings correlative
to the foregoing. For purposes of Article 3 of the Parent Agreement, in addition
to the foregoing requirements, "control" shall require (i) with respect to a
corporation (or similar entity), the ownership, whether directly or indirectly,
of at least 51% of the voting securities of such Person, (ii) with respect to a
partnership, that such Person is the sole general partner or managing general
partner of such partnership and (iii) with respect to a limited liability
company, as applicable, either (x) the ownership, whether directly or
indirectly, of at least 51% of the voting interests of such limited liability
company or (y) that such Person is the sole manager or the managing member of
such limited liability company. Notwithstanding the foregoing, the Operator and
the Partnership shall not be deemed to be Affiliates of one another.  For
purposes of the PO-11 Transaction Documents (but without limiting any accounting
treatment), the Partnership shall not be deemed to be an Affiliate of either
Lyondell or Bayer.

          "Annual Accounts" is defined in Section 12.2 of the Partnership
Agreement.

          "Annual Plan" is defined in Section 7.3 of the Operating Agreement.

          "Annual Production Plan" is defined in Section 7.3 of the Operating
Agreement.

          "Applicable Law" means any judgement or any applicable statute, law,
ordinance, rule or regulation of a Governmental Entity that is applicable to the
PO-11 Plant Facilities or the ownership or operation thereof, the Partners or
the Partnership, as the context may require.

                                      A-1
<PAGE>

          "Arbitration Notice" is defined in Section B.2 of the Dispute
Resolution Procedures.

          "Assignment and Assumption Agreement" is defined in Section 1.1 of the
Sale and Transfer Agreement.

          "AVR Agreement" means the agreement dated 11 May 1998 and made between
Arco Chemie Nederland, Ltd (now LCNL) and RAV Water Treatment, CV.

          "Bankruptcy Proceeding" is defined in Section 2.1 of the Conditional
Transfer Agreement.

          "Bayer" means Bayer AG, a German Corporation.

          "Bayer 300 Million Pound PO Option Agreement" has the meaning
specified in the definitions to the MTA.

          "Bayer Beneficiaries" is defined in Section 2.2 of the Parent
Agreement.

          "Bayer Conditional Transferee" means Bayer B.V. and its permitted
successors and assigns under the Conditional Transfer Agreement.

          "Bayer Conditional Transferor" means Bayer Polyurethanes B.V. and its
permitted successors and assigns under the Conditional Transfer Agreement.

          "Bayer Conditions" is defined in Section 3.1 of the Conditional
Transfer Agreement.

          "Bayer Dissolving Conditions" is defined in Section 3.1 of the
Conditional Transfer Agreement.

          "Bayer Group" means Bayer, Bayer Corporation and their respective
Affiliates.

          "Bayer License Agreement" means the license, dated as of the Signing
Date, by ACTLP to the Bayer Partner in respect of the PO-11 Technology, as the
same may be amended from time to time.

          "Bayer Members" is defined in Section 8.1 of the Partnership Agreement
(in reference to the Management Committee).

          "Bayer Notarial Deed" is defined in Section 1.1 of the Sale and
Transfer Agreement.

          "Bayer Partner" means Bayer Polyurethanes B.V., and its permitted
successors and assigns under the Partnership Agreement.

          "Bayer PO-11 Affiliates" is defined in the Recitals of the Parent
Agreement.

          "Bayer PO Annual Offtake Amount" has the meaning specified in the
definitions to the MTA.

                                      A-2
<PAGE>

          "Bayer Spare Capacity" is defined in Section 9.4 of the Partnership
Agreement.

          "Bayer Successor Parent" is defined in Section 3.2 of the Parent
Agreement.

          "Bayer Suspending Conditions" is defined in Section 3.1 of the
Conditional Transfer Agreement.

          "Below Threshold" is in reference to a Capital Project and is defined
in Section 7.2 of the Operating Agreement.

          "Botlek Complex" means the Botlek Plant and other chemical
manufacturing and related facilities operated by the Lyondell Group located at
Botlek, The Netherlands.

          "Botlek Plant" means the PO/TBA plant and related facilities currently
owned and operated by LCNL as of the Signing Date located at Botlek, The
Netherlands.

          "Business Day" means any day other than a Saturday, Sunday or other
day on which banks are closed in Rotterdam, The Netherlands; provided, however,
that for purposes of the definition of "EURIBOR", "Business Day" shall mean a
day on which the Trans-European Automated Real-Time Gross-Settlement Express
Transfer system (TARGET) is open.

          "Capital Account" means the separate capital account established and
maintained by the Partnership for each Partner, as contemplated by Section 7.1
of the Partnership Agreement.

          "Capital Budget" is defined in Section 7.3 of the Operating Agreement.

          "Capital Costs" means all costs in connection with Capital Projects
that may be capitalised by the Partnership in accordance with US GAAP and that
the Lyondell Group capitalises in accordance with Lyondell's accounting
capitalisation procedures, as the same may be modified from time to time.

          "Capital Costs Statement" is defined in Section 6.1.3 of the
Partnership Agreement.

          "Capital Project" means any project with respect to the PO-11 Plant
Facilities that is permitted to be treated as a capital project under US GAAP
and that is the type of project which the Lyondell Group treats as a capital
project in accordance with Lyondell's accounting capitalisation procedures, as
the same may be modified from time to time.

          "Casualty" means any damage or destruction to the PO-11 Plant
Facilities by explosion, fire or other cause.

          "Casualty Restoration Costs" means in the event of a Casualty to the
PO-11 Plant Facilities, the sum of (i) the portion of the cost of restoration of
such PO-11 Plant Facilities that is not paid under any property and/or boiler
and machinery insurance policies maintained by the Operator, plus (ii) any
surcharge that is payable under such policies thereafter in respect of the
insured claim.

                                      A-3
<PAGE>

          "Chemical Substance" means any (i) petroleum or any fraction thereof,
(ii) chemical substance, pollutant, contaminant, constituent, chemical, mixture,
raw material, intermediate, product or by-product that is regulated (including
any requirement for the reporting of any Release thereof) under any EHS Law, as
now or hereafter in effect, or defined or listed as an industrial, toxic,
deleterious, harmful, radioactive, infectious, disease-causing or hazardous
substance, material or waste under any EHS Law, as now or hereafter in effect.

          "Claim" means (i) for all purposes other than in respect of the
Conditional Transfer Agreement, any claim, demand or litigation made or pending
for Damages and (ii) in respect of the Conditional Transfer Agreement, the
definition given to such term in Section 2.2.3 of the Conditional Transfer
Agreement.

          "Commercial Start-up" means the first date on which the PO-11 Plant
Facilities after "air in" has run at stable conditions for 72 consecutive hours
at not less than 70% of design operating rates, with all products meeting
specification.

          "Commingled Raw Materials" is defined in Section 4.4 of the Operating
Agreement.

          "Conditional Transfer Agreement" means the Conditional Transfer
Agreement dated as of the Signing Date entered into among the Lyondell Partner,
the Bayer Partner, the Bayer Conditional Transferee and the Lyondell Conditional
Transferee.

          "Confidential Information" means with respect to any Person, all non-
public or proprietary information of any nature (including trade secrets,
technological know-how, research and development data, product formulations,
processes and application technology and all other non public or proprietary
concepts, methods of doing business, ideas, materials or information of or
prepared or performed for, by or on behalf of that Person), and all information
derived from any non-public or proprietary information of that Person.

          "Consistency Claim" is defined in Section C.1 of the Dispute
Resolution Procedures.

          "Control Estimate" means the official estimate of the required PO-11
Project Costs, as of the Signing Date (being NLG 1,476,000,000), exclusive of
working capital and indirect capital, which are estimated separately.  A
breakdown of the Control Estimate is attached as Appendix 1B to the Operating
Agreement.

          "Damages" means, with respect to any Person, any cost, damage or
expense (including attorneys' fees and disbursements), any fine of or penalty on
or any liability of any nature of that Person.  With respect to a Party,
"Damages" excludes lost profits and consequential damages, incidental damages
and punitive damages incurred by or awarded to the Party for its own account.

          "Default Rate" means EURIBOR plus 2.5%, compounded monthly.

          "Delivery Point" means, with respect to PO and SM produced from the
PO-11 Plant Facilities, the outlet flange of the loading facility fixed loading
arm or hose leading to any transport vessel.

                                      A-4
<PAGE>

          "Development Phase" means the period from and including 1 January 2000
to and including Commercial Start-up.

          "Development Phase Cash Call Statement" is defined in Section 6.1 of
the Partnership Agreement.

          "Development Phase Recovery Period" is defined in Appendix 1A to the
Operating Agreement.

          "Development Services" means the services, utilities, materials,
facilities and access easements required to be supplied by the Operator for the
construction, development and commissioning of the PO-11 Plant Facilities during
the Development Phase.  The Development Services are described in more detail in
Appendix 1 to the Operating Agreement.

          "Development Works" means all design, engineering, procurement,
construction and other work required to be performed by the EPC Contractor under
the EPC Contract.

          "Discretionary Capital Project" means a Capital Project that is not an
EHS Capital Project, a Maintenance Capital Project or an Enterprise Consistency
Capital Project.

          "Dispute Resolution Procedures" means Exhibit B to the Operating
Agreement, the Partnership Agreement and the Parent Agreement.

          "Disruption Event" means any event resulting in a disruption or
impairment of PO and/or SM production below planned operating levels from any
cause whatsoever, including (i) any event of Force Majeure; (ii) any shortage in
supplies, impairment in facilities of production, manufacture, or
transportation; (iii) any event that is attributable to mechanical or other
breakdown or failure or preventative maintenance that is performed to avoid such
breakdown or failure, (iv) any unscheduled Turnaround or continuation of a
scheduled turndown or other planned outage beyond its anticipated duration; or
(v) the inability to obtain any feedstock, catalyst or other raw material
(including energy) on reasonable terms.

          "Dissolving Conditions" means the Bayer Dissolving Conditions and/or
the Lyondell Dissolving Conditions, as context requires.

          "EB" means ethylbenzene.

          "EHS" means the environment, health and safety or environmental,
health and safety, as the context requires.

          "EHS Capital Project" means a Capital Project that in the Operator's
good faith judgement is necessary to achieve or maintain compliance with any EHS
Law or the EHS Policies.

          "EHS Law" means any Applicable Law relating to (i) protection of the
environment, including pertaining to or regulating pollution, contamination,
cleanup, preservation, protection and reclamation of the environment, (ii)
health or safety of

                                      A-5
<PAGE>

employees and other individuals, including the exposure of employees and other
individuals to any Chemical Substance, (iii) a Release or threatened Release,
including investigation, study, assessment, testing, monitoring, containment,
removal, remediation, response, cleanup and abatement of such Release or
threatened Release and (iv) the management of any Chemical Substance, including
the manufacture, generation, formulation, processing, labelling, use, treatment,
handling, storage, disposal, transportation, distribution, re-use, recycling or
reclamation of any Chemical Substance.

          "EHS Policies" is defined in Section 4.6 of the Operating Agreement.

          "EID" means the Energy Investment Deduction ("Energie Investerings
Aftrek"), a tax incentive for certain energy efficient investments in The
Netherlands.

          "Eligible Indemnitees" means, with respect to any Person, its
Affiliates and their respective employees, officers and directors (or the
equivalent thereof).

          "Enterprise Consistency Capital Project" means an Enterprise
Consistency Initiative that is permitted to be treated as a capital project
under US GAAP and that is the type of project which the Lyondell Group treats as
a capital project in accordance with Lyondell's accounting capitalisation
procedures, as the same may be modified from time to time.

          "Enterprise Consistency Initiative" means a new programme or a
modified programme (i) that relates in whole or in part to the Operating
Services and (ii) is undertaken on an enterprise-wide basis within the Lyondell
Group for plants operations that are similar to the PO-11 Plant Facilities in
respect of the systems or equipment to be replaced or modified by the Enterprise
Consistency Initiative.  Examples of Enterprise Consistency Initiatives include
certain information systems and manufacturing controls systems.

          "Enterprise Consistency Operating Cost" means an Operating Cost
incurred in connection with an Enterprise Consistency Initiative.

          "EPC Contract" means the Lump Sum Engineering, Procurement,
Construction Management and Construction Agreement between LCNL and the EPC
Contractor dated as of 19 June, 2000, as the same may be amended from time to
time.

          "EPC Contractor" means ABB Lummus Global B.V.

          "EPC Lump Sum Price" means the lump sum, turnkey price under the EPC
Contract, subject to adjustment for incentive bonus payments and as otherwise
provided in the EPC Contract.

          "Equistar" means Equistar Chemicals, LP, a Delaware limited
partnership, and any successor to all or substantially all of the business
conducted as of the Signing Date by Equistar Chemicals, LP.

          "Estimated Final Cost" means at any time, the then-current forecast
(updated regularly) of the total PO-11 Project Costs expected to be incurred
through the Development Phase Recovery Period, including an allowance for
contingencies.  The Estimated Final Cost includes the EPC Lump Sum Price,
projected incentive bonus payments to the EPC

                                      A-6
<PAGE>

Contractor, overheads and other reimbursements due the Operator, the costs of
pre-operations and start-up (including the estimated net cost due to the
anticipated loss of Raw Materials and utilities that are estimated to be
consumed in the Development Phase) and other costs under purchase orders and
contracts related to the development of the PO-11 Plant Facilities, but
excluding the Partnership Working Capital and indirect capital.

          "EURIBOR" means, for the day, the one-month EURIBOR as published on
that day on page 248 of the BRIDGE telerate screen (or any subsequent official
or industry-recognised source for EURIBOR rates) provided that if that day is
not a Business Day, the one-month EURIBOR as so published on the immediately
preceding Business Day.

          "Europoort Terminal" means the terminal so designated which, among
other things, provides logistics facilities and propylene storage for the PO-11
Plant Facilities and the Botlek Plant.

          "Fault" is defined as any act or omission by Managerial Personnel of a
Person that viewed objectively from the standpoint of the Person at the time the
events occurred (and without viewing the matter in hindsight) (i) involved an
extreme degree of risk, considering the probability and magnitude of the
potential harm to others and (ii) Managerial Personnel of the Person must have
actual, subjective awareness of the risk involved, but nevertheless proceed in
conscious indifference to the rights, safety or welfare of others.  The Parties
agree that with respect to the Operator, the material disregard by a member of
the Senior Plant Management Team at the PO-11 Plant Facilities of the policies
and procedures manuals applicable to the PO-11 Plant Facilities proximately
causing a Third Party Claim shall be deemed to be Fault.

          "Financial Institution" is defined in Section 3.7 of the Parent
Agreement.

          "Five Year Demand Forecast" is defined in Section 13.2 of the
Partnership Agreement.

          "Fixed Costs" means costs associated with the production of PO and SM,
as the case may be, that do not vary directly to a significant extent with
changes in production levels.

          "Force Majeure" has the meaning as set forth in Article 6:75 of The
Netherlands Civil Code, but expressly includes acts of God, floods, storms or
unusually bad weather; war or other military action, national emergency,
governmental rationing, prioritisation, taking or requisition, civil commotion
or riot; any strike or other difference with workers or unions, without regard
to the reasonableness of acceding to the demands of such workers or unions;
explosions, fires, mechanical breakdown, electrical shortage or blackouts or
other production shutdown; inability to obtain sufficient feedstocks, catalysts
or other raw materials or supplies; or other event beyond the reasonable control
of Managerial Personnel of a Party.

          "Four Year Forward Forecast" is defined in Section 7.2 of the
Operating Agreement.

          "FTEs" means (in relation to personnel providing shared services and
those personnel supporting personnel providing shared services) full time
equivalents.

                                      A-7
<PAGE>

          "General and Administrative Shared Support and Overheads Staff" is
defined in Appendix 6.2 to the Operating Agreement.

          "Global Steering Committee" means the steering committee established
by Bayer and Lyondell to review the overall relationship of the Lyondell Group
and Bayer Group with respect to PO and SM, as the same may be constituted from
time to time.

          "Global Steering Committee Resolution" means a written resolution
signed by a majority of both (i) the Lyondell Group representatives and (ii) the
Bayer Group representatives of the Global Steering Committee, in accordance with
the Global Steering Committee Charter.

          "Good Industry Practice" means standards, practices and methods of
prudent operators of major chemical plants in Western Europe, taking into
account and adjusting for Applicable Law, the EHS Policies, the process design
and location of the PO-11 Plant Facilities and the products it produces and the
feedstocks, raw materials and catalysts used in production at the PO-11 Plant
Facilities.

          "Governmental Entity" means any European Union, national, regional or
local governmental body or authority exercising executive, legislative,
judicial, regulatory, administrative or other governmental authority with
jurisdiction over a Party or such Party's Parent Company (including the United
States Securities Exchange Commission as to Lyondell) or the PO-11 Plant
Facilities or their ownership or operation.

          "Ground Lease" means the ground lease to be created between the
Rotterdam Port Authority and the Partnership whereby the Partnership leases the
approximately 52 hectares of land covered thereby and certain related
infrastructure that constitutes part of the PO-11 Plant Facilities, as such
ground lease is amended from time to time.

          "Guarantor" is defined in Section 2.3 of the Parent Agreement.

          "Higher Tier Entity" is defined in Section 3.2 of the Parent
Agreement.

          "ICIS" means the Independent Commodity Information Services - London
Oil Reports.

          "Identified Polyols" means: (i) materials containing one hydroxyl
group, one or more propylene oxide units, and having a number average molecular
weight of more than 500, (ii) materials having an average hydroxyl functionality
of greater than one, containing one or more propylene oxide units and having a
number average molecular weight of more than 250, or (iii) materials that are
exceptions to (i) and (ii) because they fall below the minimum average molecular
weight recited, are prepared by reacting PO with a starter compound which is not
a glycol, and are used in polyurethane applications

          "Inflation Adjusted" is defined in Section 7.7 of the Operating
Agreement.

          "Inflation Index" means "Producentenprijsindex cijfers naar
activiteiten (SBI) totale verbruik 241 basischemie" (1995 = 100) as published by
the Centraal Bureau voor de Statistiek ("CBS"), Princes Beatrixlaan 428, 2273 XZ
Voorburg, The Netherlands.

                                      A-8
<PAGE>

          "Initial Contract Term" is defined in Section 5.1 of the Partnership
Agreement.

          "Initial Service Charge Advance" is defined in Section 6.4 of the
Operating Agreement.

          "Key Performance Indicators" is defined in Section 7.2 of the
Operating Agreement and listed on Schedule 7.2.4 to the Operating Agreement.

          "KT" means 1,000 metric tonnes.

          "LCNL" means Lyondell Chemical Nederland, Ltd., a Delaware
corporation, and its successors and assigns by operation of law or any successor
to substantially all of the business conducted by LCNL as of the Signing Date.

          "LCT License Agreement" is defined in the Recitals to the Parent
Agreement.

          "LCTN" means Lyondell Chemie Technologie Nederland B.V., and its
permitted successors and assigns as the licensor under the Lyondell License
Agreement.

          "Leased Premises" means the land and certain related infrastructure
that is leased by the Partnership under the Ground Lease.  The Leased Premises
are depicted on the Plot Plan.

          "License Agreements" means the Lyondell License Agreement and the
Bayer License Agreement.

          "Local Project Team" is defined in Appendix 1A to the Operating
Agreement.

          "Lyondell" means Lyondell Chemical Company.

          "Lyondell Beneficiaries" is defined in Section 2.2 of the Parent
Agreement.

          "Lyondell Conditional Transferee" means Lyondell Chemie (PO-11) B.V.
and its permitted successors and assigns under the Conditional Transfer
Agreement.

          "Lyondell Conditions" is defined in Section 2.1 of the Conditional
Transfer Agreement.

          "Lyondell Conditional Transferor" means Lyondell PO-11 C.V. and its
permitted successors and assigns under the Conditional Transfer Agreement.

          "Lyondell Dissolving Conditions" is defined in Section 2.1 of the
Conditional Transfer Agreement.

          "Lyondell Group" means Lyondell and its Affiliates.

          "Lyondell License Agreement" means the license, dated as of the
Signing Date, by LCT Nederland to the Lyondell Partner in respect of the PO-11
Technology, as the same may be amended from time to time.

                                      A-9
<PAGE>

          "Lyondell Members" is defined in Section 8.1 of the Partnership
Agreement (in reference to the Management Committee).

          "Lyondell Notarial Deed" is defined in Section 1.1 of the Sale and
Transfer Agreement.

          "Lyondell Operator Representative" is defined in Section 2.6 of the
Operating Agreement.

          "Lyondell Operating Practices" means both (i) the operating practices
employed by the Operator with respect to the Botlek manufacturing complex,
except as to operational matters that relate to the PO/SM production process and
related Raw Materials procurement, and (ii) the operating practices employed by
the Lyondell Group with respect to the other PO/SM manufacturing plants operated
by the Lyondell Group.

          "Lyondell Partner" means Lyondell PO-11 C.V., and its permitted
successors and assigns under the Partnership Agreement.

          "Lyondell PO-11 Affiliates" is defined in the Recitals of the Parent
Agreement.

          "Lyondell Suspending Conditions" is defined in Section 2.1 of the
Conditional Transfer Agreement.

          "Lyondell Successor Parent" is defined in Section 3.2 of the Parent
Agreement.

          "Maintenance Capital Project" means a Capital Project as to which the
primary purpose is, in the Operator's reasonable judgement, to either (a)
maintain the PO-11 Plant Facilities in their condition in accordance with the
initial operating design specifications and parameters for the PO-11 Plant
Facilities or (b) maintain or achieve the Key Performance Indicators.  The
restoration of the PO-11 Plant Facilities following a Casualty shall be
considered a Maintenance Capital Project.  The Parties acknowledge that
Maintenance Capital Projects may also result in enhanced efficiency or other
performance characteristics.

          "Maintenance Policies" is defined in Section 4.2 of the Operating
Agreement.

          "Major Casualty" is defined in Section 22.6 of the Partnership
Agreement.

          "Major Decisions" is defined in Section 8.1 of the Partnership
Agreement.

          "Management Committee" means the management committee of the
Partnership, established in accordance with Section 8.1 of the Partnership
Agreement.

          "Management Committee Resolution" is defined in Section 8.1 of the
Partnership Agreement.

          "Managerial Personnel" means (i) with respect to a Partner, any
employee of that Partner or its Affiliate who holds a senior managerial or
higher position with such Partner and who has direct responsibility for the
administration and oversight of the Partner's

                                     A-10
<PAGE>

investment in the Partnership and (ii) with respect to the Operator, any
employee who holds a position as "Plant Manager" of the PO-11 Plant Facilities
or higher and who, in each case, has direct responsibility for the operation of
the PO-11 Plant Facilities.

          "Managing Partner" is defined in Section 3.4 of the Partnership
Agreement.

          "Master Transaction Agreement" means the Master Transaction Agreement
between Lyondell, Bayer and Bayer Corporation dated as of 31 March 2000, as
amended from time to time.

          "Material Litigation" means any litigation or other proceedings to
which the Partnership and/or the Operator in connection with its capacity as
such under the Operating Agreement is a claimant or defendant and (i) where the
total claim or counterclaim against the Partnership and/or the Operator is more
than 5,000,000 Euros above applicable insurance coverage limits; (ii) where the
total claim or counterclaim of the Partnership against third parties is more
than five million Euros; or (iii) where the claim against the Partnership and/or
the Operator (x) involves credible allegations of criminal wrongdoing with the
potential for material criminal penalties against the Partnership and/or its
Partners; (y) imposes a material risk of shut down or other disruption of
production on the PO-11 Plant Facilities; and/or (z) imposes material
restrictions on the Partners' use or sale of PO or SM produced from the PO-11
Plant Facilities.

          "Material Raw Materials Contract" means (i) any ethylene, propylene
and benzene contracts (other than "spot" contracts), or (ii) any Other Raw
Materials contract which has a total expenditure by the purchaser of more than
1,000,000 Euros per contract year.

          "Material Utility Contract Amendment" means any amendment, renewal,
extension, or replacement of any contract for the provision of utilities to the
PO-11 Plant Facilities which relates to the costs or duration of supply or which
may result in the termination of a utility contract.

          "Members" is defined in Section 8.1 of the Partnership Agreement (in
reference to the Management Committee).

          "MERIT" is defined in Appendix 1A to the Operating Agreement.

          "Minimum Turndown Operating Rate" is defined in Section 7.2 of the
Operating Agreement.

          "month" means a calendar month.

          "Monthly Production Report" is defined in Section 4.2 of the Operating
Agreement.

          "Movable Assets" is defined in Section 2.2 of the Conditional Transfer
Agreement.

          "NAI" means The Netherlands Arbitration Institute ("Nederlands
Arbitrage Instituut").

                                     A-11
<PAGE>

          "NAI Rules" means the Arbitration Rules of the NAI.

          "Non-Procuring Partner" is defined in Section 13.3 of the Partnership
Agreement.

          "Notarial Deed" is defined in Section 1.1 of the Sale and Transfer
Agreement.

          "Offtake Percentage" means the percentage interest of each Partner in
PO and co-produced SM capacity rights for PO-11.  The Offtake Percentage of each
of the Bayer Partner and Lyondell Partner is 50% as of the Signing Date and is
subject to adjustment in accordance with Section 15.1 of the Partnership
Agreement.

          "Operating Agreement" means the PO-11 Operating Agreement between the
Partnership and the Operator dated as of the Signing Date, as amended from time
to time.

          "Operating Budget" is defined in Section 7.3 of the Operating
Agreement.

          "Operating Costs" means all costs, including all third party charges
and Service Charges incurred in connection with the management, operation,
maintenance and ownership of the PO-11 Plant Facilities, which are not
capitalised by the Partnership in accordance with US GAAP or Lyondell's
accounting capitalisation procedures for the Lyondell Group, as the same may be
modified from time to time.

          "Operating Costs Statement" is defined in Section 10.1 of the
Partnership Agreement.

          "Operating Services" means all services, utilities, materials,
facilities and access easements required to be supplied or procured by the
Operator for the operation of the PO-11 Plant Facilities and production of PO
and SM at the PO-11 Plant Facilities during the Production Term.  The Operating
Services are described in more detail in Article IV of the Operating Agreement.

          "Operator" means LCNL and its permitted successors and assigns as the
Operator under the Operating Agreement.

          "Other Assets" is defined in Section 2.2 of the Conditional Transfer
Agreement.

          "Other Project Implementation Staff" is defined in Appendix 1A to the
Operating Agreement.

          "Other Raw Materials" means any feedstock (other than ethylene,
propylene or benzene), catalyst, additive or process chemical used in the
production of PO and SM.

          "Other Raw Materials Purchasing Plan" is defined in Section 5.2 of the
Operating Agreement.

          "Ownership Interest" is defined in Section 3.2 of the Parent
Agreement.

                                     A-12
<PAGE>

          "Parent Agreement" means the Agreement dated as of the Signing Date
between Lyondell and Bayer pursuant to which, among other things, Lyondell and
Bayer guarantee the performance of their respective Affiliates that are the
Partners in the Partnership and enter into certain agreements as to indirect
transfers of the interests in the Partnership owned by their respective
Affiliates as of the Signing Date.

          "Parent Company" means, as to the Lyondell Partner and the Operator,
Lyondell or its permitted successor under the Parent Agreement and means as to
the Bayer Partner, Bayer or its permitted successor under the Parent Agreement.

          "Parent Company Guarantee Beneficiary" is defined in Section 2.2 of
the Parent Agreement.

          "Partner" means a partner of the Partnership.

          "Partners Transfer Agreement" is defined in Section 1.1 of the Sale
and Transfer Agreement.

          "Partnership" means Lyondell Bayer Manufacturing Maasvlakte VOF, a
general partnership organised under the laws of The Netherlands ("vennootschap
onder firma"), together with the Partnership's permitted successors and assigns
under the Operating Agreement.

          "Partnership Accounts" means, whether one or more, the bank account or
accounts of the Partnership, to be held with Bank of America or another
creditworthy bank.

          "Partnership Agreement" means the Partnership Agreement of the
Partnership dated as of the Signing Date between the Lyondell Partner and the
Bayer Partner, as amended from time to time.

          "Partnership Asset Proceeds" is defined in Section 17.3 of the
Partnership Agreement.

          "Partnership Interest" means all of a Partner's rights and obligations
under the Partnership Agreement.

          "Partnership Percentage" has the meaning specified in Section 2.2 of
the Partnership Agreement.

          "Partnership Representatives" is defined in Section 2.6 of the
Operating Agreement.

          "Partnership Working Capital" is defined in Section 6.2 of the
Partnership Agreement.

          "Party" or "Parties" means (i) as used in the Partnership Agreement,
the Lyondell Partner and the Bayer Partner, (ii) as used in the Operating
Agreement, the Operator and the Partnership and (iii) as used in the Parent
Agreement, Lyondell and Bayer.  For purposes of Section 10.4 of the Operating
Agreement and Section 19.4 of the Partnership

                                     A-13
<PAGE>

Agreement, "Party" shall mean and include, as applicable to the Claim in
question, the Operator, the Partnership, the Lyondell Partner and/or the Bayer
Partner.

          "Party Obligor" is defined in the Recitals of the Parent Agreement.

          "Party Representative" is defined in Section 2.6 of the Operating
Agreement.

          "Permitted PO Successor" means the successor (acknowledging that the
"successor" may be an Affiliated group of companies acting collectively) or an
Affiliate of a successor to (a) the Partnership Interest of the Lyondell
Partner; (b) the PO-11 Technology; and (c) other assets equal to at least 90% of
the book value of all of the PO production assets of the Lyondell Group world-
wide.

          "Permitted Polyols Successor" means the successor (acknowledging that
the "successor" may be an Affiliated group of companies acting collectively) to
(a) the Partnership Interest of the Bayer Partner; and (b) other assets equal to
at least 90% of the book value of all of the Identified Polyols production
assets of the Bayer Group world-wide.

          "Person" means any individual, corporation, limited liability company,
limited partnership, general partnership, trust, joint, venture, governmental
authority, association or other entity or organisation, wherever residing or
organised.

          "Personnel Policies" is defined in Section 2.5 of the Operating
Agreement

          "Plan Year" is defined in Section 7.2 of the Operating Agreement.

          "Pledge" means to mortgage, pledge, hypothecate charge, encumber or
create or suffer to exist any pledge, lien or encumbrance upon or security
interest in any asset. Such defined term is used as both a noun and a verb.

          "Plot Plan" means the site plan drawing depicting, among other things,
the PO-11 Plant Facilities, which is attached to the Operating Agreement as
Exhibit C thereto.

          "PO" means propylene oxide.

          "PO-11 Agreements" means, collectively, the Partnership Agreement, the
Operating Agreement, the Parent Agreement, the Bayer License Agreement, the
Lyondell License Agreement and the Conditional Transfer Agreement.

          "PO-11 Business" is defined in Section 4.3 of the Parent Agreement.

          "PO-11 Design Volumes" means 285 KT of PO per year and 640 KT of SM
per year.

          "PO-11 Plant Facilities" means, collectively, the Leased Premises, the
EB production plant, PO/SM production plant and related piping (other than
piping owned by third parties), logistics, storage and other fixtures, equipment
and property located within the Leased Premises.

                                     A-14
<PAGE>

          "PO-11 Project Costs" means all amounts due under the EPC Contract,
amounts owed to the Operator with respect to the Development Phase in accordance
with Appendix 1 of the Operating Agreement and all other amounts required to
develop, design, procure, construct, equip, pre-commission, commission and
start-up the PO-11 Plant Facilities and related infrastructure, including Sunk
Costs.

          "PO-11 Project Assets" means all assets, rights and obligations,
including the Ground Lease, claims and contracts (including the contracts,
letters of intent and negotiations listed on Schedule 18 to the Partnership
Agreement), relating to the development, design, procurement and construction of
the PO-11 Plant Facilities, excluding the PO-11 Technology.

          "PO-11 Project Development" is defined in Appendix 1A to the Operating
Agreement.

          "PO-11 Technology" means all technical information patented in The
Netherlands or unpatented relating to the POSM Process (as defined in the
License Agreements) practised at the PO-11 Plant Facilities, including, process
descriptions, production and production results, tests and test results, data,
plans, designs, specifications, reports, know-how, inventions, software
operating experience and other information (including PO-11 Plant Facilities
plant operating manuals) in the possession or control of Lyondell and/or any of
its Affiliates, or acquired  or developed by Lyondell and/or any of its
Affiliates.

          "PO-11 Transaction Agreements" is defined in the Recitals of the
Parent Agreement.

          "Policies" means the EHS Policies, the Maintenance Policies and the
Personnel Policies.

          "PO Logistics Agreement" means the Propylene Oxide Exchange and
Logistics Agreement dated as of 31 March 2000 between Lyondell and LCNL and
Bayer, BAYPO Limited Partnership, Bayer Antwerpen N.V. and Bayer Polyols SNC, as
the same may be amended or replaced from time to time.

          "PO Manufacturing Costs" is defined in Section 20.2 of the Partnership
Agreement.

          "Production Term" means the period commencing on Commercial Start-up
and ending on the 50th anniversary of Commercial Start-up, subject to automatic
extension for any extension of the term of the Partnership Agreement pursuant to
Section 5.2 of the Partnership Agreement.

          "Proposed Annual Plan" is defined in Section 7.2 of the Operating
Agreement.

          "Proposed Annual Production Plan" is defined in Section 7.2 of the
Operating Agreement.

          "Proposed Capital Budget" is defined in Section 7.2 of the Operating
Agreement.

                                     A-15
<PAGE>

          "Proposed Operating Budget" is defined in Section 7.2 of the Operating
Agreement.

          "Proprietary PO/SM Technology" means all technical information
patented or unpatented relating to the POSM Process (as defined in the License
Agreements) practised by the Lyondell Group in any location (including the PO-11
Technology), including, process descriptions, production and production results,
tests and test results, data, plans, designs, specifications, reports, know-how,
inventions, software operating experience and other information (including PO-11
Plant Facilities plant operating manuals) in the possession or control of
Lyondell and/or any of its Affiliates, or acquired  or developed by Lyondell
and/or any of its Affiliates.

          "Purchase Price" is defined in Section 2.1 of the Conditional Transfer
Agreement.

          "Raw Materials" means ethylene, propylene, benzene and/or Other Raw
Materials.

          "Registered Goods" is defined in Section 2.2 of the Conditional
Transfer Agreement.

          "Related Persons" is defined in Section 13.1 of the Operating
Agreement.

          "Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, dumping, discharge, dispersal, leaching, escaping,
emanation or migration of any Chemical Substance in, into or onto the
environment of any kind whatsoever, including the movement of any Chemical
Substance through or in the environment, exposure of any type in any workplace,
any release as defined in any EHS Law.

          "Sale and Transfer Agreement" means the Sale and Transfer Agreement
entered into as of the Signing Date between LCNL as Transferor and the Bayer
Partner as Transferee.

          "Senior Plant Management Team" means the Director of European
Manufacturing, PO-11 Plant Manager, Process Engineering Manager, Project
Engineering Manager and EHS/Q Manager (or equivalent positions of responsibility
if titles change) with responsibility for the PO-11 Plant Facilities and whether
or not such Persons have responsibility for other facilities operated by the
Lyondell Group.

          "Service Center Europe" or "SCE" means Lyondell's Service Center
Europe located on the Signing Date at Weenapoint D, Weena 762, 3014DA,
Rotterdam, The Netherlands, or any successor service function.

          "Service Charges" means all direct personnel and other costs, indirect
costs, taxes and permitted off-site or corporate indirect costs and overheads
(subject to Section 6.2 of the Operating Agreement), including third party
Operating Costs and Capital Costs that are billed by a third party to the
Operator, incurred by or on behalf of the Operator in connection with the
provision of Development Services and/or Operating Services pursuant to the
Operating Agreement.

                                     A-16
<PAGE>

          "Service Provider" is defined in Schedule 4.2.5 to the Operating
Agreement.

          "Shared European/Regional Manufacturing Staff" is defined in Appendix
1A to the Operating Agreement (for purposes of Appendix 1A only) and in Appendix
6.2 to the Operating Agreement (for all purposes other than Appendix 1A).

          "Shared Storage Facilities" means storage facilities for PO or SM that
are located within the Leased Premises and are shared between the Partners
(i.e., are not dedicated 100% to the use of any one Partner as a result of a
Unilateral Capital Project).

          "Signing Date" means the signing date for the PO-11 Transaction
Agreements, being 18 December 2000.

          "SM" means styrene monomer.

          "SM Manufacturing Costs" means the total Variable and Fixed Costs
excluding depreciation per metric tonne of styrene for SM from PO-11, as
determined by the Lyondell accounting system and used in Lyondell's business
management processes. The monthly SM Manufacturing Costs shall be auditable for
the Bayer Partner in accordance with Section 9.4.2 of the Operating Agreement.

          "Small Projects Budget" is defined in Section 7.2 of the Operating
Agreement.

          "SRM Procuring Partner" is defined in Section 13.3 of the Partnership
Agreement.

          "Strategic Raw Materials" means propylene, ethylene and/or benzene, as
context requires.

          "Strategic Raw Materials Purchasing Plan" is defined in Section 5.1 of
the Operating Agreement.

          "Successor Parent" is defined in Section 3.2 of the Parent Agreement.

          "Sunk Costs" means all costs incurred by the Lyondell Group prior to
2001 in connection with the development and design, procurement and construction
of the PO-11 Plant Facilities, as agreed by the Partners and reflected in their
initial capital contributions funded in accordance with Section 6.1 of the
Partnership Agreement.

          "Suspending Conditions" means the Bayer Suspending Conditions and/or
the Lyondell Suspending Conditions, as context requires.

          "Suspension of Payments Proceeding" is defined in Section 2.1 of the
Conditional Transfer Agreement.

          "Taxes" means all taxes, charges, fees, levies or other assessments
imposed by any taxing authority, including, but not limited to, income, gross
receipts, excise, property, sales, use, transfer, payroll, license, ad valorem,
value added, withholding, social security, national insurance (or other similar
contributions or payments), franchise, severance and

                                     A-17
<PAGE>

stamp taxes (including any interest, fines, penalties or additions attributable
to, or imposed on or with respect to, any such taxes, charges, fees, levies or
other assessments).

          "TBA" means tertiary butyl alcohol.

          "Technical Support Staff" is defined in Appendix 1A to the Operating
Agreement (for purposes of Appendix 1A only) and in Appendix 6.2 to the
Operating Agreement (for all purposes other than Appendix 1A).

          "Technology Licensor" means Lyondell Chemie Technologie Nederland B.V.
and its permitted successors and assigns under the Parent Agreement.

          "Term" means the Development Phase and the Production Term.

          "Third Party" means any Person other than the Partnership, a Partner,
the Operator, and their respective Affiliates.

          "Third Party Claim" means any Claim by a Third Party.  For avoidance
of doubt, any obligation to remediate under EHS Law or Applicable Law and
regardless of whether the remediation or environmental condition has become the
subject of an enforcement proceeding, shall be considered a Third Party Claim.

          "Total Costs Plus New Capital Depreciation" is defined in Section 20.2
of the Partnership Agreement.

          "Transfer" means to sell, assign or otherwise in any manner other than
a Pledge dispose of, whether by act, deed, merger, consolidation, conversion or
otherwise.  Such defined term is used as both a noun and a verb.

          "Turnaround" means a major periodic maintenance programme for the
PO-11 Plant Facilities or a portion thereof, involving disruption of production.
A Turnaround may be scheduled or unscheduled.

          "Umbrella Agreement" means the Umbrella Agreement to be entered into
between the Municipality of Rotterdam (represented by the Chairman of the
Rotterdam Municipal Port Management) and the Partnership.

          "Unilateral Capital Project" is defined in Section 7.6 of the
Operating Agreement.

          "Unilateral Capital Project Asset" means an asset of the Partnership
used exclusively in connection with a Unilateral Capital Project, and the
allocable share attributable to a Unilateral Capital Project of an asset of the
Partnership used in both a Unilateral Capital Project and other aspects of
Partnership operations.

          "Unilateral Capital Project Asset Proceeds" is defined in Section 17.3
of the Partnership Agreement.

          "Unilateral Capital Implementation Plan" is defined in Section 7.6 of
the Operating Agreement.

                                     A-18
<PAGE>

          "Unilateral Capital Project Threshold" is defined in Section 14.5 of
the Partnership Agreement.

          "Uninsured Third Party Claim" means a Third Party Claim with respect
to the operations of the PO-11 Plant Facilities that is not covered by the
insurance program maintained by or on behalf of the Operator.  A Third Party
Claim that would be insured but for deductibles and/or self-insurance retention
limits under the insurance program maintained by or on behalf of the Operator
shall not be considered an Uninsured Third Party Claim.  The portion of a Third
Party Claim that exceeds coverage limits or that would have been covered but for
a lapse in coverage due to non-payment of premium or otherwise shall be treated
as an Uninsured Third Party Claim.

          "VAMIL" means "Free Depreciation of Ecologically Sound Investments"
("Willekeurige afschrijving milieu-investeringen"), a tax incentive for certain
environmentally beneficial investments in The Netherlands.

          "Variable Costs" means the portion of cash costs associated with the
production of PO or SM, as the case may be, that vary directly with changes in
production levels.

          "VAT" means value added tax ("BTW" in The Netherlands).

          "Working Capital Statements" is defined in Section 6.2 of the
Partnership Agreement.

          "year" means a calendar year.

                                     A-19
<PAGE>

                                   EXHIBIT B

                         DISPUTE RESOLUTION PROCEDURES

               FOR OPERATING AGREEMENT AND PARTNERSHIP AGREEMENT

A.  GENERAL PROVISIONS.

1.  Binding and Exclusive Means.

    The applicable dispute resolution provisions set forth in this Exhibit B
    shall be the binding and exclusive means to resolve all disputes arising
    under the Operating Agreement, the Partnership Agreement, the Parent
    Agreement, the Conditional Transfer Agreement and any other instrument
    entered into between members of the Lyondell Group and members of the Bayer
    Group that expressly provides for disputes to be exclusively resolved in
    accordance with these Dispute Resolution Procedures.

2.  Single Proceeding for Disputes.

    For disputes involving more than one of the instruments which provide for
    disputes to be resolved in accordance with these Dispute Resolution
    Procedures, and all disputes arising under the same facts or circumstances
    relating to more than one of such instruments, such disputes, if submitted
    to the same dispute resolution body, shall be combined in a single
    proceeding involving all relevant Parties.

3.  Continuation of Business.

    Notwithstanding the existence of any dispute or the pendency of any
    procedures pursuant to this Exhibit B, the Parties agree and undertake that
    all payments shall continue to be made and that all obligations not in
    dispute shall continue to be performed.

4.  Initiation of Dispute Resolution Procedures.

    Any Party may at any time invoke these Dispute Resolution Procedures by
    providing written notice of such action to the other Parties. The following
    provisions of this Article A do not apply to any dispute that is governed by
    the provisions of Article C to Article E below.

5.  Submission of Dispute to the Management Committee.

    Unless the dispute has arisen at the Management Committee, the Parties
    within five Business Days after such notice shall schedule a meeting of the
    Management Committee to be held at the Operator's offices in Rotterdam, The
    Netherlands. The meeting shall occur within 20 Business Days after notice of
    the meeting is delivered to the Parties. The Management Committee shall
    attempt, in a commercially reasonable manner, to negotiate a resolution of
    the dispute.

                                       1
<PAGE>

6.  Submission of Dispute to the Global Steering Committee.

    If the Management Committee has not negotiated a resolution to the dispute
    within 45 days of the initial notice of such dispute, or if the dispute
    arose at the Management Committee, then a meeting of the Global Steering
    Committee shall be called and shall be held. The meeting shall be held in
    Rotterdam, The Netherlands or at another location selected by the Global
    Steering Committee members. The Global Steering Committee shall attempt, in
    a commercially reasonable manner, to negotiate a resolution of the dispute.

7.  Mediation or Other Alternative Dispute Resolution.

    Either the Management Committee or the Global Steering Committee may, by a
    majority vote of each of the Lyondell representatives and the Bayer
    representatives, order mediation or other form of alternative dispute
    resolution if they believe such technique is useful in resolving the
    dispute. If a method of alternative dispute resolution is agreed upon, a
    specific timetable and completion date for its implementation shall also be
    agreed upon.

8.  Implementing the Resolution.

    If the Management Committee or the Global Steering Committee succeed in
    resolving the dispute, then one or more of the Parties shall be directed (in
    as comprehensive detail as reasonably practicable) to take the actions
    necessary to carry out such resolution and each Party agrees that it will do
    all things reasonably necessary to give full effect to such resolution. Each
    Party shall have a commercially reasonable time in which to take such
    actions.

B.  ARBITRATION.

1.  Binding Arbitration under NAI Rules.

    Any dispute, other than disputes that are governed by Article C to Article E
    below, that is not resolved within 45 days after the first meeting of the
    Global Steering Committee, under Article A above, shall be finally settled
    by arbitration by a three-member arbitration panel in accordance with the
    rules of The Netherlands Arbitration Institute (the "NAI RULES"). The
    arbitration proceedings and all documents delivered to or by the arbitrators
    shall be in English and the arbitrators shall make their award in accordance
    with the rules of law. The extended periods of time applicable to
    international arbitration proceedings pursuant to Article 5(2) of the NAI
    Rules shall not be applicable. The venue for the proceedings shall be
    Rotterdam, The Netherlands. To the fullest extent permitted by law, the
    arbitration proceedings and award shall be maintained in confidence by the
    arbitrators and the Parties. The NAI will not be authorised to publish the
    award in accordance with Article 55 of the NAI Rules.

2.  Appointment of Arbitrators.

    The Party initiating arbitration shall notify the NAI in accordance with the
    NAI Rules (the "ARBITRATION NOTICE") and shall deliver a copy thereof to the
    other Parties. The

                                       2
<PAGE>

    Parties, having regard to the nature of the dispute and the expertise
    required of the arbitrators (e.g., technical, financial or judicial), shall
    attempt to agree on the qualification requirements of the arbitrators to
    present to the NAI within 15 days following the Arbitration Notice to be
    used by the NAI in its "List Procedure" under Article 14 of the NAI Rules.
    If the Parties cannot agree on such qualification requirements within such
    15 day period, then the normal procedures of Article 14 of the NAI Rules
    shall apply. If any arbitrator is unable to serve, his or her replacement
    will be selected in the same manner as the arbitrator to be replaced.

3.  Arbitration Decision.

    The arbitrators shall have the authority to issue injunctive relief. The
    arbitrators shall render the final arbitration award, in writing, within 20
    days following the completion of the final arbitration hearing. If the
    arbitrators' decision results in a monetary award, the interest to be
    granted on such award, if any, and the rate of such interest shall be
    determined by the arbitrators in their discretion. The arbitrators shall
    allocate the costs of the arbitrators and the costs of the proceeding in
    their discretion. The arbitration award shall be final and binding on the
    Parties and, to the extent permitted by Applicable Law, the Parties waive
    any rights to appeal against such award.

4.  Special Burden of Proof for Certain Disputes.

    For any dispute to be resolved by arbitration in relation to the Operating
    Agreement in which it is alleged that the Operator is not complying with
    Applicable Law, the Policies or Good Industry Practice or is acting in a
    manner that is not consistent with the Lyondell Operating Practices, the
    arbitrators must find such non-compliance or inconsistency in a significant
    respect, after giving reasonable latitude to the Operator's judgement in
    applying Applicable Law, the Policies, the Lyondell Operating Practices and
    Good Industry Practice.

5.  Curative Period.

    If the issue of whether a breach of the Operating Agreement and/or the
    Partnership Agreement occurred or whether one of the Parties was entitled to
    exercise remedial rights is in dispute, then the non-prevailing Party shall
    have a commercially reasonable period of time to cure the default or
    circumstance before the prevailing Party shall be entitled to exercise such
    remedial rights. The Arbitrators shall include in their award the time in
    which the non-prevailing Party must complete such cure.

C.  DETERMINATION OF CERTAIN CONSISTENCY CLAIM DISPUTES BY PANEL OF BINDING
    ADVISORS.

1.  Submission of Consistency Claim Disputes to Panel of Binding Advisors.

    Any dispute as to whether the Operator's proposed actions and/or
    expenditures are consistent with the Policies and Lyondell Operating
    Practices (a "CONSISTENCY CLAIM") in connection with a dispute under Section
    7.3.4 of the Operating Agreement among the Parties regarding the Annual Plan
    or in connection with an expenditure or proposed expenditure by the Operator
    in respect of EHS activities or resulting from

                                       3
<PAGE>

    personnel compensation increases in which such expenditure is disputed by
    the Bayer Partner pursuant to and in accordance with Section 13.4 of the
    Partnership Agreement, may be submitted by the Bayer Partner within the time
    period provided in Section 7.3.4 of the Operating Agreement or Section 13.4
    of the Partnership Agreement, as applicable, to binding resolution by a
    three-member panel of binding advisors ("bindend adviseurs") pursuant to
    this Article C. Both Partners and the Operator shall be Parties to any
    Consistency Claim procedure under this Article C. The fact that the
    Partnership is deadlocked on the issue shall be disclosed to the binding
    advisors and neither Party shall have the authority to represent the
    Partnership in such proceeding.

2.  Appointment of Binding Advisor Panel.

    Within 15 days following the notice by the Bayer Partner to the Operator
    that the Consistency Claim is to be submitted to resolution by a three-
    member binding advisor panel, the Parties shall attempt to agree on the
    qualification requirements of the binding advisors to present to the NAI to
    be used by the NAI in its "List Procedure" under Article 14 of the NAI
    Rules, which shall be used to appoint the binding advisor panel members. If
    the Parties cannot agree on such qualification requirements within such 15
    day period, then the qualification requirements are that each binding
    advisor must be a chemical engineer with experience in the management and
    operation of a major chemical plant in Western Europe or North America.

3.  Conduct of the Proceedings.

    The binding advisor proceeding and all documents delivered to or by the
    binding advisors shall be in English. In the absence of an agreement to the
    contrary, the place of the proceeding shall be Rotterdam, The Netherlands.
    The proceeding shall be conducted in accordance with the NAI Rules. The
    extended periods of time applicable to international arbitration proceedings
    pursuant to Article 5(2) of the NAI Rules shall not be applicable. To the
    fullest extent permitted by law, the binding advisor proceedings and
    decision shall be maintained in confidence by the binding advisors and the
    Parties. The NAI will not be authorised to publish the award in accordance
    with Article 55 of the NAI Rules.

4.  Standard of Proof.

    To reach a decision in favour of the Bayer Partner, the binding advisors
    must find, after giving reasonable latitude to the Operator's judgement in
    applying the Policies and the Lyondell Operating Practices, that the
    Operator's proposed course of action and/or expenditure, as applicable, is
    inconsistent with the Policies and the Lyondell Operating Practices in a
    significant respect. The binding advisors are not authorised to make any
    other decision or award except as provided in Section C.7 and Section C.8
    below.

5.  If Decision is in Favour of the Operator and the Lyondell Partner or there
    is No Decision within Six Months.

                                       4
<PAGE>

    If the binding advisors decide for the Operator and the Lyondell Partner, or
    do not reach a decision for any reason within six months following the
    expiration of the period within which the Global Steering Committee is to
    attempt to resolve the dispute pursuant to Section 7.3.4(b) of the Operating
    Agreement or Section 13.4 of the Partnership Agreement, as applicable, then
    the proposed course of action or expenditure of the Operator shall be deemed
    consistent with the Policies and the Lyondell Operating Practices for all
    purposes and shall be treated as part of the Annual Plan for all purposes,
    including as to spending authority of the Operator. In addition, if a
    decision is made regarding proposed spending under Section 13.4 of the
    Partnership Agreement and the Lyondell Partner has instructed the Operator
    to defer proceeding with the disputed expenditures pending resolution of the
    dispute because the Bayer Partner would not release the Lyondell Partner
    from responsibility for a disproportionate share of costs pursuant to
    Section C.7 below, then the binding advisors shall have the authority to
    award Damages in favour of the Operator and/or the Lyondell Partner in the
    appropriate case under Section C.8 below.

6.  If Decision is Against the Lyondell Partner and the Operator.

    If the binding advisors decide in favour of the Bayer Partner, the Operator
    shall prospectively modify its conduct accordingly. The Operator shall not
    be responsible in Damages for the past failure of the Operator to have
    operated consistently with the Policies and the Lyondell Operating
    Practices. Allocation of cost responsibility between the Partners shall be
    in accordance with Section C.7 below.

7.  If there is a Dispute under Section 13.4 of the Partnership Agreement
    Decided Against the Lyondell Partner and the Operator.

    For Consistency Claim disputes regarding expenditures or proposed
    expenditures for EHS activities, or that result from personnel compensation
    increases, the Bayer Partner is required by Section 13.4 of the Partnership
    Agreement to elect whether it will release the Lyondell Partner from
    responsibility pursuant to this Section C.7 for potentially paying more than
    its Partnership Percentage share of the costs associated with such
    expenditures by the Operator which the Partnership may incur during the
    pendency of the relevant dispute resolution process. If the Bayer Partner
    elects not to release the Lyondell Partner from responsibility for
    additional costs pursuant to Section 13.4 of the Partnership Agreement, and
    the Operator makes expenditures in connection with the disputed EHS activity
    or personnel compensation increase and the binding advisors determine that
    the Operator's expenditures were not consistent with the EHS Policies or the
    Personnel Policies, as applicable, then the following shall apply:

    (a)  The binding advisors shall determine a realistic alternative to the
         Operator's proposed course of action that is also consistent with the
         Policies and the Lyondell Operating Practices.

    (b)  The binding advisors shall make a cost/benefit analysis, comparing the
         relative benefits and costs of the course of action undertaken by the
         Operator to the alternative course of action determined by the binding
         advisors pursuant to Section C.7(a) above.

                                       5
<PAGE>

    (c)  Subject to Section C.7(d) below, the Lyondell Partner will be allocated
         100% of the capital or other costs incurred that are associated with
         the course of action of the Operator that is determined to be not
         consistent with the EHS Policies or the Personnel Policies, as
         applicable.

    (d)  If and to the extent that the course of action undertaken by the
         Operator creates an economic benefit to the Partnership, then the
         portion of the economic costs allocated 100% to the Lyondell Partner
         shall be reduced by a ratio (expressed as a percentage) equal to the
         economic benefit resulting to the Partnership over the total costs
         associated with the course of action undertaken by the Operator. This
         reduction shall be applied to each item of the applicable costs for the
         course of action undertaken by the Operator. The costs for the course
         of conduct undertaken by the Operator that are not charged 100% to the
         Lyondell Partner shall be shared by the Partners in the ratio of their
         Partnership Percentages.

    (e)  By way of example only, if an EHS course of action implemented by the
         Operator is subsequently determined by the binding advisors to be
         completely unnecessary for regulatory purposes and is otherwise
         inconsistent with the EHS Policies and the Lyondell Operating
         Practices, then the applicable costs will have no economic benefit to
         the Partnership and all of those costs will be allocated 100% to the
         Lyondell Partner. On the other hand, if the EHS course of action
         implemented by the Operator is subsequently determined by the binding
         advisors to address an applicable regulatory requirement but otherwise
         is determined to be inconsistent with the EHS Policies and the Lyondell
         Operating Practices, and the alternative determined by the binding
         advisors that is consistent with the Policies and the Lyondell
         Operating Practices is less costly, then the costs associated with the
         action implemented by the Operator will have an economic benefit equal
         to the costs that would have been incurred by the Partnership to
         implement the alternative course of action determined by the binding
         advisors that is consistent with the EHS Policies and the Lyondell
         Operating Practices.

8.  If there is a Dispute under Section 13.4 of the Partnership Agreement that
    is Not Decided against the Lyondell Partner and the Operator and Damages
    Result From Deferral.

    If the Bayer Partner elects under Section 13.4 of the Partnership Agreement
    not to release the Lyondell Partner from responsibility pursuant to Section
    C.7 above for potentially paying more than the Lyondell Partner's
    Partnership Percentage share of the costs associated with such expenditures
    by the Operator which the Partnership may incur during the resolution of the
    dispute if the Operator proceeds with the proposed EHS or personnel
    compensation increase expenditures, then the Lyondell Partner may elect
    under Section 13.4 of the Partnership Agreement to instruct the Operator to
    defer proceeding with such disputed expenditures during the resolution of
    the dispute. If the binding advisors do not find that the proposed
    expenditures were inconsistent with the EHS Policies and/or the Personnel
    Polices, as applicable, then the following shall apply:

                                       6
<PAGE>

    (a)  If the Lyondell Partner and/or the Operator allege that the Partnership
         or the Operator have incurred Damages as a result of the deferral of
         such expenditures during the resolution of the dispute, then the
         binding advisors shall determine the Damages actually incurred by the
         Partnership and/or the Operator as a result of such deferral. For the
         avoidance of doubt, "Damages" excludes any lost profits or
         consequential, incidental or punitive damages incurred by the Operator
         or the Partnership for its own account.

    (b)  The Bayer Partner shall be responsible for 100% of the Damages awarded
         by the binding advisors that are incurred by the Partnership or the
         Operator as a result of the Operator's deferral in proceeding with its
         proposed course of action and corresponding expenditures.

9.  Costs.

    Costs of the binding advisor procedure shall be borne by the non-prevailing
    Partner.

D.  DETERMINATION OF DISPUTES CONCERNING THE ANNUAL ACCOUNTS THROUGH BINDING
    ADVISORS.

1.  Application; Binding Advisor Panel.

    The provisions of this Article D shall only be applicable to disputes
    concerning the Annual Accounts that are timely submitted by the disputing
    Partner to resolution hereunder pursuant to Section 12.3 of the Partnership
    Agreement. Such disputes are to be resolved by a three-member binding
    advisor panel in accordance with the following provisions of this Article D.

2.  Appointment of Binding Advisor Panel.

    The binding advisor panel shall be comprised of three public accountants
    with substantial experience in auditing chemical businesses in Western
    Europe. If no agreement is reached on the appointment of the binding
    advisors by the Partners within 15 days from the submission of the dispute
    to binding advisor determination pursuant to Section 12.3 of the Partnership
    Agreement, then such qualification requirements shall be used by the NAI in
    its "List Procedure" under Article 14 of the NAI Rules, which shall be used
    to appoint the binding advisor panel members.

3.  Conduct of the Proceedings.

    The binding advisor proceedings shall be in English. In the absence of an
    agreement to the contrary, the place of the proceeding shall be Rotterdam,
    The Netherlands. The proceeding shall be conducted in accordance with the
    NAI Rules. The binding advisors shall have access to the books and records
    of the Partnership as well as to all relevant working papers and other
    information available to the external auditors which audited the Annual
    Accounts. The extended periods of time applicable to international
    arbitration proceedings pursuant to Article 5(2) of the NAI Rules shall not
    be applicable. To the fullest extent permitted by law, the binding advisor
    proceedings and decision shall be maintained in confidence by the binding
    advisors

                                       7
<PAGE>

    and the Parties. The NAI will not be authorised to publish the award in
    accordance with Article 55 of the NAI Rules.

4.  Decision of the Binding Advisors; Costs.

    The binding advisors shall reach their decision within 30 days of
    appointment. The costs of the binding advisors proceeding shall be for the
    account of the Partnership if the Annual Accounts, as revised by the binding
    advisors, deviate materially from the Annual Accounts as audited by the
    Partnership's external auditors. Otherwise, the costs of the binding
    advisors proceeding shall be for the sole account of the disputing Partner.

E.  DETERMINATION OF FAIR MARKET VALUE THROUGH BINDING ADVISORS UPON FULFILMENT
    OF SUSPENDING CONDITIONS.

1.  Application.

    The provisions of this Article E shall only be applicable following
    fulfilment of the Lyondell Suspending Conditions or the Bayer Suspending
    Conditions pursuant to the Conditional Transfer Agreement.

2.  Fair Market Value by Binding Advisors.

    The fair market value of the Partnership Interest of the Lyondell Partner or
    the Bayer Partner as of the date of the fulfilment of a Lyondell Suspending
    Condition or a Bayer Suspending Condition whichever is applicable, shall be
    determined by the decision of a three-member binding advisor panel in
    accordance with the following procedures. The determination of fair market
    value shall include a separate allocation of value to the Ground Lease.

3.  Appointment of Binding Advisor Panel.

    The binding advisor panel shall be comprised of three investment bankers or
    business consultants with substantial experience in valuing chemical plants
    and chemical businesses in Western Europe. Such qualification requirements
    shall be used by the NAI in its "List Procedure" under Article 14 of the NAI
    Rules, which shall be used to appoint the binding advisor panel members.

4.  Conduct of the Proceedings.

    The binding advisors shall conduct the proceeding in accordance with the NAI
    Rules, except as hereinafter provided. In the absence of an agreement to the
    contrary, the place of the proceeding shall be Rotterdam, The Netherlands.
    The proceedings and all documents delivered to and by the binding advisors
    shall be in English. The extended periods of time applicable to
    international arbitration proceedings pursuant to Article 5(2) of the NAI
    Rules shall not be applicable. The binding advisors shall consider all
    relevant valuation methodologies and all relevant facts and circumstances in
    determining the fair market value of the Partnership Interest of the
    Lyondell Partner or the Bayer Partner, as applicable, including the
    availability or non-availability of licenses and permits to operate the
    PO-11 Plant Facilities.

                                       8
<PAGE>

5.  Decision of the Binding Advisors; Costs.

    The binding advisors shall reach their decision within 30 days of
    appointment. The costs of the binding advisor procedure shall be for the
    account of the transferee of the Partnership Interest of the Lyondell
    Partner or the Bayer Partner, as applicable.

                                       9

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