Document:

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                                                                   Exhibit 10.16

                           LYONDELL CHEMICAL COMPANY
                         1999 LONG-TERM INCENTIVE PLAN

              (As Amended and Restated Effective January 1, 2002)

1.       Objectives. This Lyondell Chemical Company 1999 Incentive Plan (the
         "Plan") is intended to:

     .   Focus Participants on key measures of value creation for the Company's
         shareholders
     .   Provide significant upside and downside award potential commensurate
         with shareholder value creation
     .   Encourage a long-term management perspective and reward for sustained
         long-term performance
     .   Enhance the ability of Lyondell to attract and retain highly talented
         and competent individuals
     .   Reinforce a team orientation among top management
     .   Encourage ownership of the Company's stock among top management

2.       Definitions. As used herein, the terms set forth below shall have the
         following respective meanings:

         "Award" means any Option, Performance Shares, Restricted Stock, Phantom
Stock, Cash Award or Stock Appreciation Right, whether granted singly, in
combination or in tandem, granted to a Participant pursuant to any applicable
terms, conditions and limitations as the Committee may establish in order to
fulfill the objectives of the Plan.

         "Award Agreement" means an agreement in the form prescribed by the
Committee that sets forth the terms, conditions and limitations applicable to an
Award.
         "Board" means the Board of Directors of the Company.

         "Cash Award" means an award payable in cash.

         "Code" means the United States Internal Revenue Code of 1986, as
amended from time to time.

         "Common Stock" means the common stock, par value $1.00 per share, of
the Company.

         "Committee" means the Compensation Committee of the Board or any person
or persons appointed by the Board to administer the Plan.

         "Company" means Lyondell Chemical Company.

         "Effective Date" means January 1, 2002, the effective date of the
restatement of the Plan.

         "Employee" means an individual employed by the Company or a Subsidiary.

         "Exercise Price" means the price at which the Option Shares may be
purchased under the terms of the Award Agreement.

         "Fair Market Value" of a share of Common Stock means, as of a
particular date, (i) if shares of Common Stock are listed on a national
securities exchange, the closing price per share of Common Stock reported on
the consolidated transaction reporting system for the principal national
securities exchange on which shares of Common Stock are listed on that date,
or, if there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported, (ii) if shares of Common
Stock are not so listed but are quoted on the Nasdaq National Market, the
closing price per share of Common Stock reported by the Nasdaq National Market
on that date, or, if there shall have been no such sale so reported on that
date, on the last preceding date on which such a sale was so reported, (iii) if
the Common Stock is not so listed or quoted, the mean between the closing bid
and asked price on that date, or, if there are no quotations available for such
date, on the last preceding date on which such quotations are available, as
reported by the Nasdaq Stock Market, or, if not reported by the Nasdaq Stock
Market, by the National Quotation Bureau Incorporated or (iv) if shares of
Common Stock are not publicly traded, the most recent value determined by an
independent appraiser appointed by the Company for such purpose.

         "Grant Date" means the date on which an Award is granted by the
Committee.

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         "Option" means a right to purchase a particular number of shares of
Common Stock at a particular Exercise Price, subject to certain terms and
conditions as provided in the Plan and Award Agreement.

         "Option Shares" means the shares of Common Stock covered by a
particular Option.

         "Participant" means an Employee to whom an Award has been granted under
this Plan.

         "Performance-Based Award" means an Award that is paid, vested or
otherwise deliverable solely based on the achievement of one or more
Performance Goals as provided in Section 6(a).

         "Performance Goal" means a standard established by the Committee to
determine in whole or in part whether Performance-Based Awards shall be earned.

         "Performance Shares" means the contingent right to receive an amount
in cash or Common Stock, as determined by the Committee in its sole discretion,
that is subject to the attainment of one or more Performance Goals.

         "Phantom Stock" means a right to receive the value of a specified
number of shares of Common Stock.

         "Plan" means the Lyondell Chemical Company 1999 Long-Term Incentive
Plan, as amended from time to time.

         "Restricted Stock" means shares of Common Stock that are restricted or
subject to forfeiture provisions.

         "Stock Appreciation Rights" or "SARs" means the right to receive an
amount in cash or Common Stock equal to the appreciation in value of a
specified number of shares of Common Stock over a particular period of time.

         "Subsidiary" means (i) any corporation, limited liability company or
similar entity of which the Company directly or indirectly owns equity
interests representing more than 50% of the voting power of all classes equity
interests of such entity which have the right to vote generally on matters
submitted to a vote of the equity holders of such entity, (ii) Equistar
Chemicals, LP or LYONDELL-CITGO Refining LP so long as the Company maintains an
equity ownership interest equal to at least 25% in such entities, or (iii) any
other entity in which the Company has an equity ownership interest of at least
25%, so long as such entity is designated by the Committee as a Subsidiary for
purposes of this Plan; provided, however, that with respect to Options intended
                       --------  -------
to qualify as incentive stock options within the meaning of Section 422 of the
Code, "Subsidiary" shall have the meaning set forth in Section 424(f) of the
Code or any successor provision.

3.       Plan Administration and Designation of Participants.

         (a)      Eligibility. All Employees of the Company and its Subsidiaries
who, in the judgment of the Committee, are in a position to contribute
significantly to its long-term profit and growth objectives are eligible for
Awards under this Plan. The Committee shall select the Participants from time
to time by the grant of Awards under the Plan and, subject to the terms and
conditions of the Plan, shall determine all terms and conditions of the Award.

         (b)      Administration. The Plan shall be administered by the
Committee, which shall have full and exclusive power to interpret this Plan and
to adopt such rules, regulations and guidelines for carrying out this Plan as
it may deem necessary or appropriate. The Committee may delegate its duties
hereunder to the Chief Executive Officer or other senior officers of the
Company subject to such rules and regulations as the Committee establishes. The
Committee may, in its discretion, retain the services of an outside
administrator for the purpose of performing any of its functions hereunder. The
Committee may, in its discretion, provide for the extension of the
exercisability of an Award, accelerate the vesting or exercisability of an
Award, eliminate or make less restrictive any restrictions contained in an
Award Agreement, waive any restriction or other provision of this Plan or an
Award Agreement or otherwise amend or modify an Award in any manner that is
either (i) not adverse to the Participant holding the Award or (ii) consented
to by such Participant. The Committee may grant an Award to an individual whom
it expects to become an Employee of the Company or any of its Subsidiaries
within the following six months, with such Award being subject to the
individual's actually becoming an Employee within such time period, and subject
to such other terms and conditions as may be established by the Committee. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Award Agreement in the manner and to the
extent the Committee deems necessary or desirable to further the Plan purposes.
Any decision of the Committee in

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the interpretation and administration of this Plan shall lie within its sole
and absolute discretion and shall be final, conclusive and binding on all
parties concerned.

         No member of the Committee and no officer of the Company to whom the
Committee has delegated authority in accordance with this Plan shall be liable
for anything done or omitted to be done by him or her in connection with the
performance of any duties under this Plan, except for his or her own willful
misconduct or as expressly provided by statute.

4.       Award Agreement. Each Award granted hereunder, other than a Cash Award,
shall be described in an Award Agreement, which shall be subject to the terms
and conditions of the Plan. The Committee shall authorize written guidelines
for the issuance of a Cash Award.

5.       Shares of Common Stock Available for Awards.

         (a)      Plan Limitations. Subject to the provisions of Section 11
hereof, no Award under this Plan shall be granted if it shall result in the
aggregate number of shares of Common Stock issued under the Plan plus the
number of shares of Common Stock covered by or subject to Awards then
outstanding (after giving effect to the grant of the Award in question)
exceeding the lesser of 14 million or 12% of the number of shares of Common
Stock outstanding at the time of granting such Award. No more than 2,500,000
shares of Common Stock shall be available for Awards in the form of Performance
Shares, Restricted Stock, Stock Appreciation Rights or Phantom Stock. No more
than 1,000,000 shares of Common Stock shall be available for Incentive Stock
Options. The number of shares of Common Stock that are the subject of Awards
under this Plan that are forfeited or terminated, expire unexercised, are
settled in cash in lieu of Common Stock or in a manner such that all or some of
the shares covered by an Award are not issued to a Participant or are exchanged
for Awards that do not involve Common Stock, shall again immediately become
available for Awards hereunder.

         (b)      Participant Limitations. No Participant may be granted, during
the term of the Plan, Options covering or relating to more than 3,000,000
shares of Common Stock. No Participant may be granted, during the term of the
Plan, Awards in the form of Performance Shares, Restricted Stock, Stock
Appreciation Rights or Phantom Stock covering or relating to more than
1,000,000 shares of Common Stock. No Participant may be granted Cash Awards
under this Plan in respect of any calendar year having a value in excess of
$3,000,000.

         (c)      Board and Committee Procedures. The Committee may from time to
time adopt and observe such procedures concerning the counting of shares
against the Plan maximum as it may deem appropriate. The Board and the
appropriate officers of the Company shall from time to time take whatever
actions are necessary to file any required documents with governmental
authorities, stock exchanges and transaction reporting systems to ensure that
shares of Common Stock are available for issuance pursuant to Awards.

6.       Types of Awards.

         (a)      Performance-Based Awards. Without limiting the type or number
of Awards that may be made under the other provisions of this Plan, an Award
may be in the form of a Performance-Based Award. Performance-Based Awards are
Awards that shall be paid, vested or otherwise deliverable solely on account of
the attainment of one or more pre-established, objective Performance Goals
established by the Committee prior to the earlier to occur of (x) 90 days after
the commencement of the period of service to which the Performance Goal relates
and (y) the lapse of 25% of the period of service (as scheduled in good faith
at the time the goal is established), and in any event while the outcome is
substantially uncertain. A Performance Goal is objective if a third party
having knowledge of the relevant facts could determine whether the goal is met.
Such a Performance Goal may be based on one or more business criteria that
apply to the Employee, one or more business units of the Company, or the
Company as a whole, and may include one or more of the following: economic
value, economic value added, increased revenue, net income, stock price, market
share, earnings per share, return on equity, return on assets, decrease in
costs, shareholder value, net cash flow, total shareholder return, return on
capital, return on investors' capital, operating income, funds from operations,
cash flow, cash from operations, after-tax operating income, and total market
value. Prior to the payment of any compensation based on the achievement of
Performance Goals, the Committee must certify in writing that applicable
Performance Goals and any of the material terms thereof were, in fact,
satisfied. In interpreting Plan provisions applicable to Performance Goals and
Performance-Based Awards, it is the intent of the Plan to conform with the
standards of Section 162(m) of the Code and Treasury Regulation Section
1.162-27(e)(2)(i), and the Committee in establishing such goals and
interpreting the Plan shall be guided by such provisions. A Performance-Based
Award may include Performance Shares, Options, Restricted Stock, Stock
Appreciation Rights, Cash Awards or Phantom Stock.

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         (b)      Options. Options granted to Employees hereunder may be either
incentive stock options within the meaning of Section 422 of the Code or
nonqualified options within the meaning of Section 83 of the Code. The Exercise
Price of an Option shall not be less than the Fair Market Value of a share of
Common Stock on the Grant Date of the Option and shall not be less than the
Fair Market Value of a share of Common Stock on the Grant Date of any
outstanding Option that is relinquished in connection with a grant of a new
Option. The terms, conditions and limitations applicable to Options awarded to
Employees shall be determined by the Committee.

         (c)      Performance Shares. An Award may be in the form of Performance
Shares. Performance Shares shall be payable, in the sole discretion of the
Committee in cash, shares of Common Stock, or any combination thereof. The
terms, conditions and limitations applicable to an Award of Performance Shares
shall be determined by the Committee.

         (d)      Restricted Stock. An Award may be in the form of shares of
Common Stock or Restricted Stock. The terms, conditions, and limitations
applicable to any Award of shares of Common Stock or Restricted Stock pursuant
to this Plan shall be determined by the Committee.

         (e)      Phantom Stock. An Award may be in the form of Phantom Stock,
or other bookkeeping account tied to the value of shares of Common Stock. The
terms, conditions, and limitations applicable to any Awards of Phantom Stock
shall be determined by the Committee.

         (f)      Stock Appreciation Rights. An Award may be in the form of
SARs. The exercise price of an SAR shall not be less than the Fair Market Value
of a share of Common Stock on the Grant Date. The terms, conditions, and
limitations applicable to any Awards of SARs shall be determined by the
Committee.

         (g)      Cash Awards. An Award may be in the form of a Cash Award.
The terms, conditions and limitations applicable to any Cash Awards shall be
determined by the Committee.

7.       Payment of Awards.

         (a)      General. Payment of Awards may be made in the form of cash or
Common Stock or combinations thereof and may include such restrictions as the
Committee shall determine including, in the case of Common Stock, restrictions
on transfer and forfeiture provisions.

         (b)      Deferral. The Committee may, in its discretion, (i) permit
selected Participants to elect to defer payments of some or all types of Awards
in accordance with procedures established by the Committee or (ii) provide for
the deferral of an Award in an Award Agreement or otherwise. Any such deferral
may be in the form of installment payments or a future lump sum payment. Any
deferred payment, whether elected by the Participant or specified by the Award
Agreement or by the Committee, may be forfeited if and to the extent that the
Award Agreement so provides.

         (c)      Dividends and Interest. Dividends or dividend equivalent
rights may be extended to and made part of any Award denominated in Common
Stock or units of Common Stock, subject to such terms, conditions and
restrictions as the Committee may establish. The Committee may also establish
rules and procedures for the crediting of interest on deferred cash payments
and dividend equivalents for deferred payment denominated in Common Stock or
units of Common Stock.

         (d)      Substitution of Awards. At the discretion of the Committee,
a Participant may be offered an election to substitute an Award for another
Award or Awards of the same or different type.

8.       Stock Option Exercise. The price at which shares of Common Stock may be
purchased under an Option shall be paid in full at the time of exercise in cash
or, if permitted by the Committee, by means of tendering Common Stock or
surrendering all or part of that or any other Award, including Restricted
Stock, valued at Fair Market Value on the date of exercise, or any combination
thereof. The Committee shall determine acceptable methods for tendering Common
Stock or Awards to exercise an Option as it deems appropriate. The Committee
may provide for procedures to permit the exercise or purchase of Awards by use
of the proceeds to be received from the sale of Common Stock issuable pursuant
to an Award. Unless otherwise provided in the applicable Award Agreement, in
the event shares of Restricted Stock are tendered as consideration for the
exercise of an Option, a number of the shares issued upon the exercise of the
Option, equal to the number of shares of Restricted Stock used

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as consideration therefor, shall be subject to the same restrictions as the
Restricted Stock so submitted as well as any additional restrictions that may
be imposed by the Committee.

9.       Termination of Employment. Upon the termination of employment by a
Participant, any unexercised, deferred or unpaid Awards shall be treated as
provided in the specific Award Agreement evidencing the Award. Unless otherwise
specifically provided in the Award Agreement, each Award granted pursuant to
this Plan which is an Option shall immediately terminate to the extent the
Option is not vested (or does not become vested as a result of such termination
of employment) on the date the Participant terminates employment with the
Company or its Subsidiaries.

10.      Assignability. Except as otherwise provided herein, no Award granted
under this Plan shall be sold, transferred, pledged, assigned or otherwise
alienated or hypothecated by a Participant other than by marital property
settlement or similar domestic relations agreement, decree or order, or by will
or the laws of descent and distribution, and during the lifetime of a
Participant, any Award shall be exercisable only by him, or, in the case of a
Participant who is mentally incapacitated, the Award shall be exercisable by
his guardian or legal representative. The Committee may prescribe and include
in applicable Award Agreements other restrictions on transfer. Any attempted
assignment or transfer in violation of this Section shall be null and void.
Upon the Participant's death, the personal representative or other person
entitled to succeed to the rights of the Participant (the "Successor
Participant") may exercise such rights. A Successor Participant must furnish
proof satisfactory to the Company of his or her right to exercise the Award
under the Participant's will or under the applicable laws of descent and
distribution.

         Subject to approval by the Committee in its sole discretion, all or a
portion of the Awards granted to a Participant under the Plan may be
transferable by the Participant, to the extent and only to the extent specified
in such approval, to (i) the children or grandchildren of the Participant
("Immediate Family Members"), (ii) a trust or trusts for the exclusive benefit
of such Immediate Family Members ("Immediate Family Member Trusts"), or (iii) a
partnership or partnerships in which such Immediate Family Members have at
least ninety-nine percent (99%) of the equity, profit and loss interests
("Immediate Family Member Partnerships"); provided that the Award Agreement
pursuant to which such Awards are granted (or an amendment thereto) must
expressly provide for transferability in a manner consistent with this Section.
Subsequent transfers of transferred Awards shall be prohibited except by will
or the laws of descent and distribution, unless such transfers are made to the
original Participant or a person to whom the original Participant could have
made a transfer in the manner described herein. No transfer shall be effective
unless and until written notice of such transfer is provided to the Committee,
in the form and manner prescribed by the Committee. Following transfer, any
such Awards shall continue to be subject to the same terms and conditions as
were applicable immediately prior to transfer, and, except as otherwise
provided herein, the term "Participant" shall be deemed to refer to the
transferee. The consequences of termination of employment shall continue to be
applied with respect to the original Participant, following which the Awards
shall be exercisable by the transferee only to the extent and for the periods
specified in this Plan and the Award Agreement.

11.      Adjustments.

         (a)      The existence of outstanding Awards shall not affect in any
manner the right or power of the Company or its partners to make or authorize
any or all adjustments, recapitalization, reorganizations or other changes in
the ownership of the Company or its business or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock (whether or not such issue is prior to, on a parity with or junior to the
Common Stock) or other obligations, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other Company act or proceeding of any kind, whether or not of a
character similar to that of the acts or proceedings enumerated above.

         (b)      In the event of any Common Stock distribution or split,
recapitalization, extraordinary distribution, merger, consolidation,
combination or exchange of shares of Common Stock or similar change or upon the
occurrence of any other event that the Committee, in its sole discretion, deems
appropriate, the (i) the number of shares of Common Stock reserved under this
Plan and covered by outstanding Awards and related Incentive Stock Option award
limitation; (ii) the Exercise Price in respect of such Awards; and (iii) the
appropriate Fair Market Value and other price determinations for such Awards
shall be adjusted as appropriate.

         (c)      In the event of a corporate merger, consolidation, acquisition
of property or stock, separation, reorganization or liquidation (such event
hereinafter referred to as a "Transaction"), the Board shall be authorized (i)
to issue or assume Awards by means of substitution of new Awards, as
appropriate, for previously issued Awards or to assume previously issued Awards
as part of such adjustment, (ii) to make provision, prior to the transaction,
for

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the acceleration of the vesting and exercisability of, or lapse of restrictions
with respect to, Awards or (iii) in the event of a Transaction of which the
Company is not the surviving corporation, to (A) cancel Awards that are Options
or SARs and give the Participants who are the holders of such Awards notice and
opportunity to exercise for 30 days prior to such cancellation or (B) settle an
Award that is an Option or SAR by a cash payment equal to the difference
between the Fair Market Value per share of Common Stock on the date of the
Transaction and the Exercise Price of the Award, multiplied by the number of
shares subject to the Award.

12.      Purchase for Investment. Unless the Awards and shares of Common Stock
covered by this Plan have been registered under the Securities Act of 1933, as
amended, each person receiving shares of Common Stock pursuant to an Award
under this Plan may be required by the Company to give a representation in
writing in form and substance satisfactory to the Company to the effect that he
is acquiring such shares for his own account for investment and not with a view
to, or for sale in connection with, the distribution of such shares or any part
thereof.

13.      Tax Withholding. The Company shall have the right to deduct applicable
taxes from any Award payment and withhold, at the time of delivery or vesting
of cash or shares of Common Stock under this Plan, an appropriate amount of
cash or number of shares of Common Stock or a combination thereof for payment
of taxes required by law or to take such other action as may be necessary in
the opinion of the Company to satisfy all obligations for withholding of such
taxes. The Committee may also permit withholding to be satisfied by the
transfer to the Company of shares of Common Stock theretofore owned by the
holder of the Award with respect to which withholding is required. If shares of
Common Stock are used to satisfy tax withholding, such shares shall be valued
based on the Fair Market Value when the tax withholding is required to be made.

14.      Amendments or Termination. The Committee may amend, alter or
discontinue this Plan, except that no amendment or alteration that would impair
the rights of any Participant under any Award that he has been granted shall be
made without his consent, and no amendment or alteration shall be effective
prior to approval by the Company's shareholders to the extent such approval is
determined by the Committee to be required by applicable laws, regulations or
exchange requirements. No Awards shall be granted more than ten years after the
Effective Date.

15.      Restrictions. No shares of Common Stock or other form of payment shall
be issued with respect to any Award unless the Company shall be satisfied based
on the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. The Award Agreement may include
provisions for the repurchase by the Company of Common Stock acquired pursuant
to an Award and repurchase of the Participant's Option rights.

16.      Unfunded Plan. Insofar as it provides for Awards of cash, Common Stock
or rights thereto, this Plan shall be unfunded. Although bookkeeping accounts
may be established with respect to Participants who are entitled to cash,
Common Stock or rights thereto under this Plan, any such accounts shall be used
merely as a bookkeeping convenience. The Company shall not be required to
segregate any assets that may at any time be represented by cash, Common Stock
or rights thereto, nor shall this Plan be construed as providing for such
segregation, nor shall the Company, the Board or the Committee be deemed to be
a trustee of any cash, Common Stock or rights thereto to be granted under this
Plan. Any liability or obligation of the Company to any Participant with
respect to a grant of cash, Common Stock or rights thereto under this Plan
shall be based solely upon any contractual obligations that may be created by
this Plan and any Award Agreement, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. None of the Company, the Board, the Committee or a
Subsidiary shall be required to give any security or bond for the performance
of any obligation that may be created by this Plan.

17.      Miscellaneous. The granting of any Award shall not impose upon the
Company any obligation to maintain any Participant as an Employee and shall not
diminish the power of the Company to discharge any Participant at any time.

18.      Governing Law. This Plan and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Texas.

19.      Effective Date of Plan. This Plan was originally effective January 1,
1999 and was approved by the shareholders of the Company in May 1999. This
Plan was amended and restated as of the Effective Date and approved by the
shareholders of the Company in May 2002.

                                                      LYONDELL CHEMICAL COMPANY

                                      6<PAGE>

                                                                Exhibit 10.30(a)

                                 FIRST AMENDMENT
                                       TO
                          AMENDED AND RESTATED LIMITED
                       PARTNERSHIP AGREEMENT OF PO JV, LP

         This First Amendment to the Amended and Restated Limited Partnership
Agreement of PO JV, LP (this "Amendment") is made as of April 30, 2002 by and
                              ---------
between PO Offtake LP, a Delaware limited partnership ("Lyondell GP", in its
                                                        -----------
capacity as general partner of the Partnership, and "Lyondell LP", in its
                                                     -----------
capacity as a limited partner of the Partnership), and BAYPO Limited
Partnership, a Delaware limited partnership ("Bayer LP").
                                              --------

                                    RECITALS

         (A)      Pursuant to an Amended and Restated Master Transaction
Agreement dated as of March 31, 2000 (the "Master Transaction Agreement") by and
                                           ----------------------------
among Lyondell Chemical Company ("Lyondell"), Bayer AG and Bayer Corporation
                                  --------
(together, "Bayer"), the Parties have heretofore entered into the Amended and
Restated Limited Partnership Agreement of PO JV, LP dated as of March 31, 2000
(the "Partnership Agreement") to establish a joint venture in the form of a
      ---------------------
Delaware limited partnership to engage in the production of PO and related
co-products in the United States;

         (B)      In order to resolve a number of disputes that have arisen
between Bayer and Lyondell in connection with the transactions contemplated by
the Master Transaction Agreement, Bayer and Lyondell have entered into a Term
Sheet dated as of March 8, 2002 (the "Term Sheet"), which contemplates that
                                      ----------
Bayer and Lyondell will enter into definitive agreements to formalize with
specificity and implement the intent of the Term Sheet;

         (C)      As contemplated by the Overarching Agreement dated as of April
30, 2002 and the Term Sheet, the Parties desire to further amend the Partnership
Agreement 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:

         Section 1.        Defined Terms. Capitalized terms used and not
                           -------------
otherwise defined herein shall have the meanings given such terms in the
Partnership Agreement.

         Section 2.        G&A Fee Adjustment. Section 2.3(d)(vii) of the
                           ------------------
Partnership Agreement provides that Bayer LP shall pay a monthly fee for
stipulated allocated general services and administrative charges as a component
of its Operating Cost Partner Invoice payable to the Partnership. For purposes
of determining the Bayer Monthly Stipulated G&A Allocation pursuant to Section
2.3(d)(vii) and Schedule 2.3 of the Partnership Agreement, the Parties hereby
agree as follows:

                (a)        The sum of the Bayer Monthly Stipulated G&A
                           Allocation payments for the year 2002 is budgeted to
                           be $14.558 million (including the actual 2002 annual
                           adjustment for changes in the G&A Escalator).

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                (b)        The Bayer Monthly Stipulated G&A Allocation payment
                           shall be reduced by $166,666.66 per month each month
                           (aggregate $2 million (US $2,000,000) reduction per
                           year) for the year 2002 and for each year thereafter
                           until December 31, 2011. Bayer LP will receive a
                           cumulative adjustment for this reduction in the Bayer
                           Monthly Stipulated G&A Allocation in respect of the
                           portion of 2002 through the billing date following
                           the date hereof in the Operator Cost Partner Invoice
                           that next follows the date hereof.

                (c)        For the five-year period beginning January 1, 2003
                           and ending December 31, 2007 (the "Escalation Waiver
                                                               ----------------
                           Period"), Lyondell GP, as general partner on behalf
                           ------
                           of the Partnership, agrees to waive any right to any
                           further increase in the Bayer Monthly Stipulated G&A
                           Allocation payments payable subsequent to 2002
                           resulting from the annual adjustment for changes in
                           the G&A Escalator as contemplated by paragraph 2 of
                           Schedule 2.3 of the Partnership Agreement.
                           Notwithstanding the foregoing, the Bayer Monthly
                           Stipulated G&A Allocation from January 1, 2003 until
                           December 31, 2007 shall increase due to Bayer's
                           volume share increase in 2003 and 2004 as originally
                           set forth in the definition of "Bayer Monthly
                           Stipulated G&A Allocation" and as escalated through
                           2002. For the Escalation Waiver Period, Bayer LP
                           does not waive any right to any decrease in the
                           Bayer Monthly Stipulated G&A Allocation resulting
                           from any decrease in the total personnel costs
                           pursuant to paragraph 2 of Schedule 2.3 of the
                           Partnership Agreement.

                (d)        Beginning January 1, 2008 and thereafter for the
                           remainder of the Term of the Partnership Agreement,
                           the annual adjustment to the Bayer Monthly
                           Stipulated G&A Allocation payments for changes in
                           the G&A Escalator shall be reinstated, and such
                           reinstatement shall (1) include the cumulative
                           increases to the G&A Escalator from January 1, 2002,
                           as if such increases had not been waived pursuant to
                           paragraph (c) above, and (2) be determined based on
                           the Bayer Monthly Stipulated G&A Allocation payments
                           calculation without the monthly reduction pursuant
                           to paragraph (b) above. An example of the
                           adjustments and reinstatement to the Bayer Monthly
                           Stipulated G&A Allocation contemplated by this
                           Section 2 is set forth in Exhibit A hereto. The
                                                     ---------
                           Parties will update Exhibit A by March 31 of each
                           year of the Escalation Waiver Period to reflect
                           actual amounts.

                (e)        For avoidance of doubt, the Bayer Monthly Stipulated
                           G&A Allocation payments, as calculated in accordance
                           with this Section 2, shall reflect any G&A cost
                           change resulting from a change by mutual agreement
                           in the composition of the market reference basket of
                           administrative positions pursuant to paragraph 1 of
                           Schedule 2.3 of the Partnership Agreement every five
                           years, beginning with calendar year 2006. Any change
                           to the G&A Escalator resulting from a change in the
                           composition of the market reference basket shall be
                           waived for the duration of the Escalation Waiver
                           Period according to paragraphs (c) and (d) of this
                           Section 2.

                                      -2-
<PAGE>

         Section 3.        Bayer LP Fixed Costs Reduction.
                           ------------------------------

                (a)        As provided in Section 2.3(d)(i) and Section 8.1(b)
                           of the Partnership Agreement, as a component of its
                           Operating Cost Partner Invoice Bayer LP pays the
                           portion of the PO Share of the budgeted Fixed Costs
                           for the Existing Plant Complexes allocated to the
                           Bayer LP Partnership Interest, as determined in
                           accordance with Exhibit C of the Operating
                           Agreement. For purposes of determining Bayer LP's
                           portion of the PO Share of such Fixed Costs, the
                           Parties hereby agree that for 2002 and 2003 Bayer
                           LP's portion shall be reduced by $3 million (US
                           $3,000,000) from what it otherwise would be absent
                           such adjustment. Such reductions will be in the form
                           of rebates to the January 2003 (as to the 2002
                           reduction) and January 2004 (as to the 2003
                           reduction) Fixed Cost component of the Operating
                           Cost Partner Invoice delivered to Bayer LP pursuant
                           to Section 2.3(c) of the Partnership Agreement. The
                           reductions pursuant to this Section 3 are
                           independent of any adjustments resulting from the
                           biannual audit of Operating Services Costs of the
                           Partnership, as provided for in paragraph IV of
                           Schedule C to the Operating Agreement.

                (b)        Concurrently with the execution of this Amendment,
                           Lyondell and the Partnership will enter into a Second
                           Amendment to PO Operating and Services Agreement (the
                           "Operating Agreement Amendment") to be dated as of
                            -----------------------------
                           even date herewith to implement the provisions of
                           this Section 3. A copy of the Operating Agreement
                           Amendment is attached hereto as Exhibit B.
                                                           ---------

         Section 4.        Accommodation Fee. The Parties hereby agree that the
                           -----------------
following language shall be inserted after the final sentence of Section 9.6 of
the Partnership Agreement:

         "Affiliates of Lyondell and Bayer have entered into a Toll Processing
          and Product Sales Agreement (Propylene Glycols) (the "PG Agreement"),
                                                                ------------
          a Toll Processing Agreement (Butanediol) (the "BDO Agreement"), a
                                                         -------------
          Sales Agreement (Propylene Oxide) (the "PO Sales Agreement") and an
                                                  ------------------
          Asian/U.S. Exchange Contract (Propylene Oxide) (the "Asian Swap
                                                               ----------
          Agreement"), each dated as of April 30, 2002. For purposes of
          ---------
          calculating the Accommodation Fee pursuant to this Section 9.6 and
          Schedule 9.6 of the Partnership Agreement, the Accommodation Fee shall
          not apply with respect to any pounds of PO Product (i) tolled by
          Lyondell for Bayer or its Affiliate pursuant to the PG Agreement or
          BDO Agreement, (ii) taken by Bayer and subsequently purchased by
          Lyondell or its Affiliate pursuant to the PO Sales Agreement or (iii)
          exchanged with Lyondell pursuant to the Asian Swap Agreement (since
          these are PO Product volumes being used for Indentified Polyols)."

         Section 5.        Effectiveness of Partnership Agreement; Entire
                           ----------------------------------------------
Agreement. Except as amended by this Amendment, all terms and conditions of the
---------
Partnership Agreement shall remain in full force and effect among the Parties
thereto. The Partnership Agreement, as amended by this Amendment, when read
together with the PO Operating and Services Agreement, as amended, contains the
entire agreement among the Parties with respect to the

                                      -3-
<PAGE>

subject matter thereof, and there are no other agreements, understandings,
representations or warranties between the Parties with respect to the subject
matter thereof. Without limitation, the Term Sheet will have no further force
and effect with respect to the subject matter of this Amendment.

         Section 6.        Counterparts. This Amendment may be executed in
                           ------------
separate counterparts, each of which shall constitute an original. All
signatures need not be on the same counterpart.

                                      -4-
<PAGE>

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

                                  GENERAL PARTNER:

                                  PO OFFTAKE, LP, as general partner

                                  By: Lyondell POJVGP, LLC, its general partner

                                  By:   /s/ Francis P. McGrail
                                     -------------------------------------------

                                  Name:  Francis P. McGrail

                                  Title: President and Treasurer

                                  Date:  April 30, 2002

                                  LIMITED PARTNERS:

                                  PO OFFTAKE, LP, as limited partner

                                  By: Lyondell POJVGP, LLC, its general partner

                                  By:   /s/ Francis P. McGrail
                                     -------------------------------------------

                                  Name:  Francis P. McGrail

                                  Title: President and Treasurer

                                  Date   April 30, 2002

                                  BAYPO LIMITED PARTNERSHIP, as limited partner

                                  By: BAYPO I LLC, its general partner

                                  Name:  /s/ Andrew T. Panaccione
                                       -----------------------------------------

                                  Title:           President
                                        ----------------------------------------

                                  Date:  April 30, 2002

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