Document:

EXHIBIT
10.3

 

Third Amended and Restated Agreement (to Provide Materials and
Services), between the

Corporation and Dow
Hydrocarbons and Resources LLC.

 

THIRD
AMENDED AND RESTATED AGREEMENT

 

This
THIRD AMENDED AND RESTATED AGREEMENT (“Agreement”), entered into as of March 1,
2008, between Union Carbide Corporation (“UCC”), a New York corporation, and
Dow Hydrocarbons and Resources LLC (“DHR LLC”), a Delaware corporation, amends
and restates that Second Amended and Restated Agreement of April 1, 2005,
as amended as of January 1, 2008 (as so amended, the “Second Amended
Agreement”), which amended and restated that certain agreement of February 6,
2001, as amended and restated as of July 1, 2003 .  DHRI agrees to supply the UCC Group (as
defined below) with certain products and services under the terms and
conditions set forth below.

 

1.              TERM

 

The term of this Agreement shall commence on the Effective Date and
shall extend until December 31, 2008, and shall continue from year-to-year
thereafter, unless earlier terminated in accordance with the provisions of this
Agreement (the “Term”).  Either UCC or
DHR LLC may elect at any time to terminate this Agreement by providing the
other with at least six (6) months’ advance written notice of termination.

 

2.              DEFINITIONS

 

As used in this
Agreement:

 

(a)         An
“Affiliate” with respect to any entity means any other entity directly or
indirectly controlling, controlled by or under common control with, such
entity, where “control” of an entity (including, with correlative meaning, the
terms “controlling, “controlled by” and “under common control with”) shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of such entity, whether through the
ownership of voting securities, by contract or otherwise.

 

(b)         “Arranged
Sales” has the meaning given to it in Section 8(B)(2)(b).

 

(c)          “Arranged
Supply” has the meaning given to it in Section 8(B)(2)(a).

 

(d)         “Delivery
Point” means the point at which product supplied by DHR LLC to a UCC Member
under this Agreement is received (1) into the facilities of such UCC
Member or its designee (including without limitation storage facilities
operated by such UCC Member or its designee), or (2) into Intermediary
Equipment directly connected to the facilities of such UCC Member or its
designee, or (3) into the facilities of a third party, or a designee of
such UCC Member or such third party, in fulfillment of an obligation of such
UCC Member to deliver product to or on behalf of such third party;  for avoidance of doubt, (A) when
received into any truck or tank car, the Delivery Point is the point at which
the product enters the receiving truck or car; (B) when received into any
pipeline, the Delivery Point is the point at which the product passes the
connection between the delivering pipeline and receiving pipeline; (C) when
received into storage, the Delivery Point is the point at which the product
enters a storage tank or cavern; (D) when received by “in-line” transfer
or “in-storage” transfer, receipt at the Delivery Point occurs immediately upon
such transfer; or (E) when received by or into any vessel, the Delivery
Point is at the flange between the vessel’s permanent hose connection and the
shore line.

 

(e)          “Effective
Date” means March 1, 2008.

 

(f)           “Emission
Products” means emission reduction credits, emission allowances, emission
reduction certificates, emission off-sets, renewable energy credits and
certificates, and any other emission product.

 

(g)          “GAAP”
means generally accepted accounting principles.

 

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(h)         “Intermediary
Equipment” means, with respect to a UCC Member or its designee, intermediary
systems or equipment, owned or controlled by a third party, used to deliver
products to such UCC Member’s or designee’s facilities pursuant to a Separate
Contract. For avoidance of doubt, the Burnel line connected to UCC’s Seadrift
Operations is Intermediary Equipment.

 

(i)             “Major
Sites” means the following four sites: UCC’s West Virginia Operations in the
vicinity of South Charleston, WV; UCC’s St. Charles Operations, in the vicinity
of Hahnville, LA; UCC’s Texas City Operations in Texas City, TX; and UCC’s
Seadrift Operations in the vicinity of Seadrift, TX.

 

(j)            “Net
Supply Cost” means the following costs, to be determined in accordance with the
then-current cost accounting practices applied by DHR LLC consistent with GAAP:
(1) for fuels, on a site specific basis, the cost of purchases of such
fuel (and transportation and storage thereof, except as provided otherwise by
the delivery terms of Section 4(b)(2)) under Third-Party Contracts, net of
related sales and exchanges, (2) for hydrocarbon feedstocks, the cost of
purchases of such hydrocarbon feedstocks (and transportation and storage
thereof, except as provided otherwise by the delivery terms of Section 4(b)(2))
under Third-Party Contracts, using the weighted average cost of DHR LLC’s U.S.
Gulf Coast pooled inventory and purchases, net of related sales and exchanges, (3) for
monomers and aromatics, the cost of purchases of such monomers and aromatics
(and transportation and storage thereof, except as provided otherwise by the
delivery terms of Section 4(b)(2)), using the weighted average price for
such monomers and aromatics under U.S. Gulf Coast Third-Party Contracts, and (4) for
electricity, on a site specific basis, the cost 
(including without limitation applicable fees charged by non-Affiliate
third parties) of purchases of such electricity (and transmission thereof),
based on market prices, Third-Party Contract prices, or a combination thereof,
as applicable, net of related sales of electricity.

 

(k)         “Separate
Contract” means an agreement, which pre-exists the Effective Date, between one
or more third parties and one or more UCC Members, including without limitation
any such agreement (1) for supply, delivery, storage or transportation of
products to UCC or its designee, and/or (2) for the swap or exchange of
any products.

 

(l)             “Small
Sites” means the UCC Group’s locations other than the Major Sites.

 

(m)     “TDCC”
means The Dow Chemical Company.

 

(n)         “Term”
has the meaning given to it in Section 1.

 

(o)         “Third-Party
Contracts” means contracts between the purchaser (i.e., DHR LLC or a DHR LLC
Affiliate) and a third party that is not an Affiliate of such purchaser.

 

(p)         “UCC
Group” means UCC and the UCC Subsidiaries, collectively.

 

(q)         “UCC
Member” means a member of the UCC Group.

 

(r)            “UCC
Subsidiary” means a direct or indirect wholly-owned U.S. subsidiary of UCC
(such as, but not limited to, Amerchol Corporation, Seadrift Pipeline
Corporation, UCAR Pipeline Incorporated, and UCAR Louisiana Pipeline Company).

 

3.              PRODUCTS AND
SERVICES TO BE SUPPLIED BY DHRI TO UCC

 

(a)         The following products
and services will be supplied by DHR LLC to the UCC Group, as described below,
in connection with the UCC Group’s U.S. locations except to the extent
otherwise agreed to by DHR LLC and UCC:

 

(1)         Products:  100% of the UCC Group’s procurement
requirements for

(A)       fuels, primarily natural
gas,

(B)       hydrocarbon feedstocks,

 

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(C)       monomers and aromatics (to
supplement the UCC Group’s production of monomers and aromatics),  and

(D)       electricity,

 

except to the extent
supply of such products is arranged in accordance with Sections 3(a)(2) or
3(c), below, or is procured by a UCC Member pursuant to a Separate Contract.

 

(2)         Services.  DHR LLC shall provide: management of the UCC
Group’s hydrocarbon and energy asset base, management of the UCC Group’s
Emission Products, and management of the UCC Group’s hydrocarbon and energy
business matters, including without limitation: (i) management of
hydrocarbon and energy contracts (including without limitation Separate
Contracts); (ii) communications, as required, with the UCC Group’s
management and authorized representatives, as well as with any of the UCC Group’s
external customers, in connection with such hydrocarbon and energy business
matters; (iii) monitoring of the UCC Group’s and  industry supply/demand balances of
hydrocarbon and energy products; (iv) the implementation of both short and
long term strategic positions in hydrocarbon and energy products; (v) oversight
and consulting regarding markets for Emission Products; and (vi) as
mutually determined by UCC and DHR LLC, provision to the UCC Group of
applicable accounting and computer systems to manage the other services
supplied to the UCC Group under this Agreement. To the extent a UCC Member
elects to separately arrange the supply of any one or more of the foregoing
services, in whole or in part, such supply is outside the scope of this
Agreement.

 

Except to the extent
supplied by DHR LLC pursuant to Section 3(a)(1) above, or procured by
a UCC Member pursuant to a Separate Contract, and subject to Section 3(c),
below, DHR LLC shall also arrange the supply and sales of fuels, feedstocks,
monomers, aromatics, electricity, steam. utilities, and Emission Products, as
described below:

 

(A)       Arrange the supply to the
UCC Group of 100% of the UCC Group’s procurement requirements for fuels (such
as natural gas and coal) and hydrocarbon feedstocks, and arrange any storage or
transportation needed to effectuate such supply.

 

(B)       Arrange (1) the supply
to the UCC Group of 100% of the UCC Group’s procurement requirements for monomers
and aromatics, to supplement the UCC Group’s production of monomers and
aromatics, (2) the sale of 100% of the UCC Group’s surplus monomers,
aromatics, and hydrocarbon co-products and by-products, and (3) any
storage or transportation needed to effectuate such supply or sales.

 

(C)       Arrange (1) the
supply to the UCC Group of 100% of the UCC Group’s procurement requirements for
electricity, steam and other utilities, (2) the sale of 100% of the UCC
Group’s surplus electricity, steam and other utilities, and (3) any
transportation needed to effectuate such supply or sales; however, to the
extent UCC or any other UCC Member elects to separately arrange the supply,
sale, or transportation of a UCC Member’s procurement requirements for
electricity, steam or other utilities, such supply or sales are outside the
scope of this Agreement.

 

(D)       Arrange (1) the
supply to the UCC Group of 100% of the UCC Group’s procurement requirements for
Emission Products, to supplement the UCC Group’s production of Emission Products
and (2) the sale of 100% of the UCC Group’s surplus Emission Products.

 

(b)         Where DHR LLC arranges
product to be supplied to a UCC Member by TDCC or a TDCC Affiliate, TDCC or
such TDCC Affiliate shall (and TDCC shall cause such Affiliate to) supply such
product at Net Supply Cost.

 

(c)          With respect to any one
or more of the Small Sites, DHR LLC may elect to not supply or, to discontinue
(at any time) supply of, any one or more of the products or services described
in Section 3(a), above; in the event DHR LLC elects to discontinue supply
of any one or more of such products or services (other than pursuant to other
provisions of this Agreement which expressly provide for termination of this
Agreement), DHR LLC will reasonably cooperate with UCC to effect a transition
to another supplier of such service or product. 
For any UCC Group location where

 

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DHR LLC does not supply a
product or service as described in Section 3(a), above, then upon request
of a UCC Member, DHR LLC may, at its option, consult with a UCC Member
regarding the member’s procurement of such product or service from third
parties.

 

(d)         A representative list of
products to be supplied to the UCC Group in connection with this Agreement is
set forth in Exhibit A, attached to and hereby made part of this Agreement
(“Exhibit A”).

 

(e)          The parties’ respective
obligations under Section 3(a) of this Agreement are subject to
Separate Contracts; for the avoidance of doubt, a UCC Member shall remain
responsible for the payment of any charges payable by such UCC Member under a
Separate Contract.

 

(f)           DHR LLC is authorized
to act as a UCC Member’s delegate with respect to performance of any such UCC
Member’s rights or obligations under Separate Contracts; provided that, as a
delegate of such UCC Member, DHR LLC will not provide or receive products
without corresponding compensation (for example, in the form of payment,
in-kind product, or a combination thereof) from or to, respectively, such UCC
Member or its designee. DHR LLC is not liable for
Claims (as defined in Section 8(E), below) made by third parties with
respect to the acts or omissions of DHR LLC when acting as delegate for a UCC
Member, except to the extent such Claims arise as a result of DHR LLC’s gross
negligence or willful misconduct.

 

(g)          UCC
shall cause the UCC Subsidiaries to fully accept, abide by, and comply with,
the terms and conditions of this Agreement.

 

(h)         Appointment
as agent.

 

(1)         UCC hereby makes,
constitutes and appoints DHR LLC as its true and lawful attorney-in-fact and
empowers DHR LLC to act for UCC as UCC’s agent during the term of this
Agreement in matters connected with the services (for example, arranging the
supply or sale of products, Emission Products, or utilities, including but not
limited to arrangements between UCC and DHR LLC or UCC and DHR LLC Affiliates)
and products supplied under this Agreement. Specifically, DHR LLC has the
authority to issue and execute those business documents and contracts in the name
of UCC which are necessarily issued in conjunction with the services and
products being provided by DHR LLC to UCC under this Agreement.  DHR LLC accepts such appointment and grant.
To the extent applicable, UCC shall cause each UCC Subsidiary to make a similar
appointment and grant, and DHR LLC hereby accepts such appointment and
grant.  DHR
LLC is not liable for Claims (as defined in Section 8(E), below) made by
third parties with respect to the acts or omissions of DHR LLC  when acting as agent for a UCC Member, except
to the extent such Claims arise as a result of DHR LLC’s gross negligence or
willful misconduct.

 

(2)         (A) For DHR LLC to
provide electricity-related services to UCC Members in an efficient manner, DHR
LLC may from time to time enter energy related agreements in DHR LLC’s name
and/or in a UCC Member’s name that affect, or otherwise relate to, such UCC
Member’s electricity matters (“Power Agreements”).

 

(B) UCC, for itself
and on behalf of the UCC Subsidiaries, hereby authorizes and gives consent to
DHR LLC to enter Power Agreements in DHR LLC’s and/or a UCC Member’s name.  The Power Agreements provide for
electricity-related matters applicable to one or more UCC Members which may
include, without limitation, commitments regarding a QSE, REP, scheduling,
pooling, ancillary services and marketing services.

 

(C) UCC, for itself
and on behalf of the UCC Subsidiaries, hereby (i) authorizes and consents
to DHR LLC taking actions for a UCC Member with respect to Power Agreements
regarding such UCC Member’s electricity matters, (ii) agrees to comply
with Power Agreements and with DHR LLC’s requests related thereto, and (iii) acknowledges
and agrees that DHR LLC is entering Power Agreements and providing,
coordinating or arranging for electricity-related services under Power
Agreements within the scope of the services contemplated under this Agreement.

 

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(D) UCC, for itself
and on behalf of the UCC Subsidiaries, hereby acknowledges that any prior Power
Agreements entered into by Dow Hydrocarbons and Resources Inc. (“DHRI”), and
related actions by DHRI of the nature described in this Agreement that are
applicable to a UCC Member’s electricity matters, are fully ratified,
authorized and accepted by UCC, the UCC Subsidiaries, and DHR LLC.

 

(E) Notwithstanding
the termination, expiration or cancellation of this Agreement, it is hereby
agreed that, with respect to any UCC Group locations, (i) as long as any
Power Agreement has not yet fully expired, been fully cancelled, or been
otherwise fully terminated, the provisions of Section 3(h)(2)(C) above
shall remain in full force and effect, and shall not expire, be cancelled or
otherwise be terminated, and (ii) for the time period any Power Agreement
extends beyond the termination, expiration or cancellation of this Agreement,
UCC will reimburse, or cause the applicable UCC Member to reimburse, DHR LLC
for any third party costs incurred by DHR LLC with respect to such Power
Agreement and the products and services provided to UCC Group thereunder.

 

4.              COMPENSATION and DELIVERY
TERMS

 

(a)         As compensation for the
products and services supplied by DHR LLC under this Agreement, UCC (subject to
Section 4(e), below) shall pay Product Charges and a Service Commission,
as follows:

 

(1)         Product
Charges

 

(A)       For
hydrocarbon feedstocks supplied by DHR LLC under this Agreement, UCC shall pay
to DHR LLC the Net Supply Cost thereof.

 

(B)       For
fuels supplied by DHR LLC under this Agreement, UCC shall pay to DHR LLC the
Net Supply Cost thereof.

 

(C)       For
monomers and aromatics supplied by DHR LLC under this Agreement, UCC shall pay
to DHR LLC the Net Supply Cost thereof.

 

(D)       For
electricity supplied by DHR LLC under this Agreement, UCC shall pay to DHR LLC
the Net Supply Cost thereof.

 

(2)         Service
Commission – For all of the services supplied under Section 3(a)(2) of
this Agreement, UCC shall pay a commission to DHR LLC, which shall be
calculated as follows:

 

(A)       0.65 cents per pound ($6.50
per thousand pounds) of ethylene and propylene consumed by UCC at the Major
Sites; plus

(B)       3.0 cents per million BTUs
of natural gas consumed by UCC at the Major Sites; plus

(C)       2.5% of the total price for
all trades of Emission Products arranged by DHR LLC; plus

(D)       $1.00 per megawatt hour of
electricity procured for or sold for the Major Sites (including without
limitation electricity supplied to a UCC Member by DHR LLC or purchased from a
UCC Member by DHR LLC).

 

(b)         Delivery
terms: (1) Product Charges include delivery of products supplied by
DHR LLC to the applicable Delivery Point, and title to and risk of loss for
product supplied by DHR LLC hereunder shall pass at the applicable Delivery
Point. (2) The UCC Group shall not pay separate charges for pipeline
transportation or storage in Texas- or Louisiana-based assets of DHR LLC or DHR
LLC Affiliates.

 

(c)          Renegotiation of
Product Charges or Service Commission – Either UCC or DHR LLC may request a
re-negotiation of Product Charges and/or the Service Commission upon  thirty (30) days prior written notice, and
the parties shall promptly negotiate in good faith to establish such new
Product Charges and/or a new Service Commission.

 

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(d)         Notwithstanding any other
provision of this Agreement, DHR LLC shall accept payment from any UCC
Subsidiary for some or all of any amount due to DHR LLC under this Agreement,
but UCC shall remain fully responsible and liable for any unpaid amounts due to
DHR LLC under this Agreement.

 

5.     PRODUCT SPECIFICATIONS; LIMITED WARRANTY; ASSUMPTION OF RISK

 

DHR LLC warrants that all product purchased from DHR
LLC by a UCC Member hereunder shall meet the specifications set forth in Exhibit A.
THE FOREGOING IS DHR LLC’S SOLE WARRANTY REGARDING PRODUCTS AND SERVICES
SUPPLIED UNDER THIS AGREEMENT, AND IS MADE EXPRESSLY IN LIEU OF AND EXCLUDES
ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, AND ALL OTHER EXPRESS OR IMPLIED WARRANTIES INCLUDING WITHOUT
LIMITATION THOSE PROVIDED BY STATUTE OR COMMON LAW. DHR LLC MAKES NO OTHER
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS OR SERVICES SUPPLIED
HEREUNDER. EACH UCC MEMBER, WITH RESPECT TO ANY PRODUCT RECEIVED BY SUCH UCC
MEMBER HEREUNDER, ASSUMES ALL RISK, RESPONSIBILITY AND LIABILITY RESULTING FROM
THE USE OR APPLICATION OF SUCH PRODUCT, AND DHR LLC SHALL HAVE NO LIABILITY OR
RESPONSIBILITY WHATSOEVER FOR THE USE OR APPLICATION OF ANY SUCH PRODUCT.

 

6.     TERMS
OF PAYMENT

 

UCC shall make payments to DHR LLC for product
purchased and services rendered hereunder within five (5) business days of
the receipt of DHR LLC’s invoice. Invoices shall be issued once per month as
soon as possible after the end of such month.

 

7.              MEASUREMENT

 

The determination of quantity and quality of product
purchased by a UCC Member from DHR LLC hereunder shall be made in accordance
with the customary procedures and practices of the industry.

 

8.              CLAIMS, REMEDIES,
LIMITATION OF DAMAGES and INDEMNIFICATION

 

(A)             IF
ANY PRODUCT PURCHASED BY A UCC MEMBER FROM DHR LLC UNDER THIS AGREEMENT DOES
NOT MEET APPLICABLE SPECIFICATIONS, DHR LLC SHALL HAVE THE RIGHT IN ITS
DISCRETION, AS THE UCC MEMBER’S SOLE REMEDY, EITHER TO REPLACE IT OR REFUND
THE  PRODUCT CHARGE PAID TO DHR LLC FOR
THE PRODUCT WHICH IS THE SUBJECT OF THE CLAIM.

 

(B)             HOWEVER,
AND IN ANY EVENT, DHR LLC’S MAXIMUM LIABILITY FOR DAMAGES IN RESPECT OF ANY AND
ALL CLAIMS WHATSOEVER ARISING HEREUNDER WITH RESPECT TO

 

(1)     PRODUCTS
PURCHASED BY A UCC MEMBER FROM DHR LLC UNDER THIS AGREEMENT SHALL NOT EXCEED,
IN THE AGGREGATE, THE PRODUCT CHARGE PAID TO DHRI FOR THE AMOUNT OF PRODUCT TO
WHICH SUCH DAMAGES RELATE, AND

 

(2)     SERVICES
SUPPLIED BY DHR LLC TO A UCC MEMBER UNDER THIS AGREEMENT SHALL NOT EXCEED, IN
THE AGGREGATE, THE FOLLOWING AMOUNTS:

 

(a)         WITH
RESPECT TO ARRANGING THE SUPPLY OF FUELS, HYDROCARBON FEEDSTOCKS, MONOMERS,
AROMATICS, ELECTRICITY, STEAM AND UTILITIES (“ARRANGED SUPPLY”), TWO PERCENT
(2%) OF THE AMOUNT PAID BY THE UCC MEMBER FOR THE ARRANGED PURCHASES TO WHICH
SUCH DAMAGES RELATE;

 

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(b)         WITH
RESPECT TO ARRANGING THE SALE OF MONOMERS, AROMATICS, ELECTRICITY, STEAM AND
UTILITIES (“ARRANGED SALES”), TWO PERCENT (2%) OF THE AMOUNT RECEIVED BY THE
UCC MEMBER FOR THE ARRANGED SALES TO WHICH SUCH DAMAGES RELATE; AND

 

(c)          FOR
ALL OTHER SERVICES INVOLVED IN SUCH CLAIMS, ONE HUNDRED TWENTY-FIVE THOUSAND
DOLLARS ($125,000.00) PER MONTH (A MINIMUM OF ONE MONTH) FOR EACH MONTH OF THE
TERM FALLING WITHIN THE PERIOD TO WHICH SUCH DAMAGES RELATE.

 

(C)             NOTWITHSTANDING
ANY OTHER PROVISION OF THIS AGREEMENT, IN NO EVENT SHALL DHR LLC BE LIABLE FOR (1) PROSPECTIVE
OR LOST PROFITS, (2) SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OR (3) ANY CLAIM BASED ON PRODUCT QUALITY WITH
RESPECT TO PRODUCT WHICH, FOLLOWING DELIVERY TO A UCC MEMBER, HAS BEEN MIXED
WITH ANY OTHER MATERIAL OF ANY KIND (WHETHER OR NOT SUPPLIED IN CONNECTION WITH
THIS AGREEMENT), OR HAS BEEN PROCESSED IN ANY MANNER.

 

(D)             WITHIN
SIXTY (60) DAYS AFTER A UCC MEMBERS LEARNS, OR SHOULD REASONABLY HAVE LEARNED,
OF ANY CLAIM WITH RESPECT TO THE PRODUCTS OR SERVICES SUPPLIED BY DHR LLC UNDER
THIS AGREEMENT, UCC OR SUCH UCC MEMBER SHALL INFORM DHR LLC IN WRITING OF
THE CLAIM OR THE CLAIM IS WAIVED.

 

(E)       (1) TO
THE EXTENT PERMITTED BY APPLICABLE LAW, UCC ASSUMES THE ENTIRE RESPONSIBILITY
AND LIABILITY FOR, AND SHALL PROTECT, DEFEND, INDEMNIFY, AND HOLD HARMLESS DHR
LLC FROM AND AGAINST, ANY AND ALL CLAIMS WHICH ARE MADE, ASSERTED OR ALLEGED
AGAINST DHR LLC BY ANY ONE OR MORE UCC MEMBERS OR ANY OTHER PERSON, OR WHICH
ARISE IN FAVOR OF ANY ONE OR MORE UCC MEMBERS OR ANY OTHER PERSON, ORIGINATING
FROM ANY SOURCE IN CONNECTION WITH (a) DHR LLC ACTING AS AN AGENT OR
DELEGATE FOR ANY ONE OR MORE UCC MEMBERS, AND/OR (b) THE FAILURE OF A UCC
SUBSIDIARY TO FULLY ACCEPT, ABIDE BY, OR COMPLY WITH, THE TERMS OF THIS
AGREEMENT, AND/OR (c) ARRANGED PURCHASES AND/OR ARRANGED SALES, AND/OR (d) THE
USE OR APPLICATION, BY A UCC MEMBER OR ANY OTHER PERSON, OF ANY PRODUCT
SUPPLIED UNDER THIS AGREEMENT.

IT IS DHR LLC AND
UCC’S INTENT REGARDING SUCH CLAIMS THAT, SUBJECT TO SECTION 8(E)(2) BELOW,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, UCC SHALL PROTECT, DEFEND, INDEMNIFY
AND HOLD HARMLESS DHR LLC AGAINST ALL OF THE CONSEQUENCES OF

 

(X)  (I) THE
NEGLIGENCE, FAULT, AND/OR STRICT LIABILITY OF DHR LLC OCCURRING JOINTLY,
CONCURRENTLY, AND/OR COMPARATIVELY WITH THE NEGLIGENCE, FAULT, AND/OR STRICT
LIABILITY OF A UCC MEMBER AND/OR ANY PERSON OTHER THAN DHR LLC, OTHER THAN THE
SOLE NEGLIGENCE, IMPUTED SOLE NEGLIGENCE, SOLE FAULT AND/OR SOLE STRICT
LIABILITY OF DHR LLC ADDRESSED IN SECTION 8(E)(2)(X)(II) BELOW; AND

 

(X)  (II) THE SOLE
NEGLIGENCE, IMPUTED SOLE NEGLIGENCE, SOLE FAULT, AND/OR SOLE STRICT LIABILITY
OF DHR LLC, UNMIXED WITH NEGLIGENCE, GROSS NEGLIGENCE, FAULT, AND/OR STRICT
LIABILITY OF A UCC MEMBER AND/OR ANY PERSON OTHER THAN DHR LLC; AND

 

(Y)       THE
NEGLIGENCE, GROSS NEGLIGENCE, FAULT, AND/OR STRICT LIABILITY OF A UCC MEMBER
AND/OR ANY PERSON OTHER THAN DHR LLC, INCLUDING BUT NOT LIMITED TO JOINT,
COMPARATIVE, AND/OR CONCURRENT NEGLIGENCE, FAULT, AND/OR STRICT LIABILITY OF
SUCH UCC MEMBER AND/OR ANY PERSON OTHER THAN DHR LLC.

 

(2)         NOTWITHSTANDING
THE FOREGOING, (a) UCC’S OBLIGATIONS UNDER THE PROVISIONS OF SECTION 8(E)(1) SHALL
NOT EXTEND TO ANY CLAIMS OF GROSS NEGLIGENCE, WILLFUL

 

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MISCONDUCT, OR
BREACH OF THIS AGREEMENT WHICH ARE MADE, ASSERTED OR ALLEGED AGAINST DHR LLC BY
ANY ONE OR MORE UCC MEMBERS,  AND (b) UCC’S
INDEMNITY AND HOLD HARMLESS OBLIGATIONS UNDER THE PROVISIONS OF SECTION 8(E)(1) SHALL
NOT EXTEND TO ANY CLAIMS OF PERSONS OTHER THAN UCC MEMBERS WHICH ARISE AS A
RESULT OF DHR LLC’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT (FOR THE AVOIDANCE
OF DOUBT, UCC’S OBLIGATIONS TO PROTECT AND DEFEND SUCH CLAIMS ARE NOT EXCLUDED
BY THIS SECTION 8(E)(2)(b)).

 

(3)         DEFINITIONS
- AS USED IN THIS SECTION 8(E):

 

(a) “BODILY
INJURY” MEANS ANY BODILY INJURY OF ANY KIND OR CHARACTER, INCLUDING WITHOUT
LIMITATION, ANY ONE OR MORE OF THE FOLLOWING, COLLECTIVELY AND INDIVIDUALLY:  PHYSICAL PAIN AND SUFFERING, ILLNESS,
SICKNESS, DISEASE, IMPAIRMENT OF PHYSICAL CONDITION OF THE BODY, OR DEATH, AS
WELL AS ANY PERSONAL INJURY INCLUDING, BUT NOT LIMITED TO, ANY INVASION OF
PERSONAL RIGHTS SUCH AS LIBEL OR SLANDER, CIVIL RIGHTS VIOLATION, INVASION OF
PRIVACY, TORTIOUS INTERFERENCE WITH A CONTRACT, OR MENTAL SUFFERING OF ANY
TYPE.

(b) “CLAIMS”
MEANS ALL CLAIMS OF ANY KIND OR CHARACTER, INCLUDING WITHOUT LIMITATION, ANY
ONE OR MORE OF THE FOLLOWING, COLLECTIVELY AND INDIVIDUALLY: LOSSES, COSTS
(INCLUDING, BUT NOT LIMITED TO, ATTORNEYS’ FEES, COURT COSTS, AND OTHER COSTS
OF SUIT), DEMANDS, DAMAGES, JUDGMENTS, PENALTIES, LIABILITIES, DEBTS, EXPENSES,
LAWSUITS AND CAUSES OF ACTION OF WHATEVER NATURE AND CHARACTER, WHETHER ARISING
OUT OF OR RELATED TO CONTRACT (INCLUDING, WITHOUT LIMITATION, RELATED TO
DELAYED DELIVERY, NON-DELIVERY, PRODUCT QUALITY OR DEFECTIVE PRODUCT), TORT,
STRICT LIABILITY, BREACH OF WARRANTY, PRODUCTS LIABILITY, MISREPRESENTATION,
VIOLATION OF APPLICABLE LAW, AND/OR ANY SOURCE OR CAUSE WHATSOEVER, WITHOUT
LIMIT AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING, WITHOUT
LIMITATION, CLAIMS ARISING OUT OF OR ALLEGED TO ARISE OUT OF BODILY INJURY OR
LOSS OF PROPERTY.

(c)  “PERSON”
MEANS ANY NATURAL PERSON, OR ANY COMPANY, CORPORATION, GENERAL OR LIMITED
PARTNERSHIP, LIMITED LIABILITY COMPANY, JOINT VENTURE, ORGANIZATION,
ASSOCIATION, OR OTHER ENTERPRISE OR ENTITY.

 

9.              FORCE MAJEURE

 

Failure (in whole or in part) or delay on the part of
either DHR LLC or a UCC Member in performance of any of the obligations imposed
upon it shall be excused and such party shall not be liable for damages or
otherwise when such failure or delay is beyond the control of DHR LLC or such
UCC Member (“force majeure event”).  Such
events include, but are not limited to, the following: labor difficulties,
total or partial loss or shortage of raw component material or products
ordinarily required by DHR LLC; breakdown, either total or partial, of either
party’s equipment, or act of God or nature. 
However, the settlement of strikes or lockouts shall be entirely within
the discretion of the party having the difficulty.  DHR LLC agrees to give written notice to UCC,
and UCC agrees to give written notice (for itself and on behalf of the other
UCC Members) when experiencing a force majeure event as soon as practicable.

 

Upon cessation of the cause or causes for any such
failure or delay, performance hereof shall be resumed as soon as
practicable.  Such failure or delay shall
not operate to extend the duration of this Agreement nor obligate either DHR
LLC or any UCC Member to make up deliveries or receipts of product.  If, by reason of any such circumstances, DHR
LLC’s supply of product shall be insufficient to meet all of its requirements,
DHR LLC shall apportion among any and all existing contract purchasers,
including without limitation its Affiliates, in an equitable manner so that all
parties share the product in proportion to their take prior to the circumstance
reducing availability.

 

28

 

10.       PATENTS

 

DHR LLC does not assume patent
responsibility for the use by a UCC Member of product delivered hereunder.  The use of product may or may not constitute
an infringement of patents. A UCC Member receiving product hereunder assumes
full responsibility and liability for patent infringement in connection with
any use of such product by such UCC Member.

 

11.       TAXES

 

In addition to the amounts to be paid under Section 4,
above, (a) with respect to products purchased by a UCC Member from DHR LLC
under this Agreement, such UCC Member shall also pay all taxes and duties,
other than taxes measured by DHRI’s net income, that are increased or levied,
now or in the future, in connection with the manufacture, sale, use,
consumption, storage, transportation or disposal of such products, and (b) with
respect to services supplied by DHR LLC to a UCC Member under this Agreement,
such UCC Member shall also pay all taxes and duties, other than taxes measured
by DHR LLC’s net income, that are increased or levied, now or in the future, in
connection with the supply of such services.

 

12.       WAIVER

 

No claim or right arising out of a breach of this
Agreement can be discharged in whole or in part unless agreed to in writing
executed by DHR LLC and UCC.   Any such
waiver shall not be deemed to be a waiver of any subsequent breach.

 

13.       ASSIGNMENT

 

No right or obligation under, or interest in, this
Agreement shall be assigned without prior written consent of both DHR LLC and UCC;
provided, however, that DHR LLC may assign any part of its interest in, or any
of its rights or obligations under, this Agreement to any DHR LLC Affiliate at
any time without prior written consent from UCC.

 

14.       APPLICABLE LAW

 

This Agreement shall be governed by the laws of the
State of Texas, without regard to the conflict of laws principles thereof.

 

15.       ENTIRETY OF AGREEMENT;
SEVERABILITY

 

(a)         This
Agreement merges all prior understandings between DHRI or DHR LLC and UCC
regarding the subject matter of this Agreement. 
No prior dealings between the parties and no usage of trade shall be
relevant to supplement or explain any term used herein.  All obligations, agreements, and
understanding are expressly set forth herein and are not enforceable unless
embodied herein.  As of the Effective
Date, (1) the Second Amended Agreement is hereby amended and restated, and
neither UCC nor DHR LLC shall have any further rights, duties or obligations
under the Second Amended Agreement, except for any payment rights and
obligations for products and services provided prior to the Effective Date.

 

(b)         To the
degree that a party finds it convenient to employ their standard forms of
purchase order or acknowledgement of order in administering their terms of this
Agreement, such party may do so but none of the terms and conditions printed or
otherwise appearing on such form shall be applicable except to the extent that
it specifies information required to be furnished hereunder.

 

(c)          Should any
indemnification provisions set forth in this Agreement be limited by any law
then applicable to this Agreement, this Agreement shall automatically be deemed
amended to provide indemnification under this Agreement to the maximum extent
permitted by such applicable law. However, and in any event, if any provision
of this Agreement is held invalid, the invalidity shall not affect other
provisions or application of the Agreement which

 

29

 

can be
given effect without the invalid provision or application, and to this end the
provisions of this Agreement are declared to be severable.

 

16.       NOTICE

 

All notices, demands, requests and other
communications provided for in this Agreement shall be given in writing,
delivered in person (including without limitation via commercial courier) or
via Certified or Registered U.S. Mail, with return receipt, and addressed to
the party to be notified as follows:

 

	
  DHR LLC

  	
  UCC

  
	
  Dow Hydrocarbons and Resources LLC

  	
  Union Carbide Corporation

  
	
  Houston Dow Center

  	
  400 West Sam Houston Parkway South

  
	
  400 West Sam Houston Parkway South

  	
  Houston, Texas 77042

  
	
  Houston, Texas 77042

  	
  Attn: President

  
	
  Attn: Legal Department

  	
   

  

 

or, in the case of either UCC or DHR LLC, to such
other address as such party may hereafter specify by written notice to the
other. All such notices, requests and communications shall be effective upon
receipt.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the Effective Date.

 

	
  UNION CARBIDE CORPORATION

  	
   

  	
  DOW HYDROCARBONS AND

  
	
   

  	
   

  	
   

  	
  RESOURCES LLC

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ EDWARD W.
  RICH

  	
   

  	
   

  	
  By:

  	
  /s/ RICHARD A.
  WELLS

  	
   

  
	
  Name: 

  	
      E.W. Rich

  	
   

  	
   

  	
  Name: 

  	
  Richard A. Wells

  
	
  Title: 

  	
      Chief
  Financial Officer,

  	
   

  	
  Title: 

  	
  Executive Vice President

  
	
   

  	
      Vice
  President, and Treasurer

  	
   

  	
   

  
										

 

ACKNOWLEDGED and AGREED
as to Section 3(b):

 

THE DOW CHEMICAL COMPANY

 

 

	
  By: 

  	
  /s/ JOHN SUTTLE

  	
   

  
	
   

  
	
  Name: 

  	
  JOHN SUTTLE

  	
   

  
	
  Title: 

  	
       Authorized
  Representative

  
				

 

30

 

EXHIBIT A

 

1. Representative
Products.  The following is
representative list of the products to be supplied to the UCC Group in
connection with this Agreement (i.e., some or all of the following products, as
well as products not listed, will be supplied to the UCC Group under this
Agreement):

 

	
  B-P Mix

  	
   

  	
  Hydrocarbon Residual

  
	
  Benzene

  	
   

  	
  Mixed Butanes

  
	
  Butadiene

  	
   

  	
  N-butane

  
	
  Coal

  	
   

  	
  Naphtha

  
	
  Condensate

  	
   

  	
  Natural Gas

  
	
  Crude Butadiene

  	
   

  	
  Propane

  
	
  Cumene

  	
   

  	
  Propylene

  
	
  E-P Mix

  	
   

  	
  Pyrolysis Gasoline

  
	
  Ethane

  	
   

  	
  Styrene

  
	
  Ethylene

  	
   

  	
  Toluene

  
	
  Fuel Oil

  	
   

  	
  Electricity

  
	
  Steam

  	
   

  	
  Utilities

  

 

2. Specifications.  All products purchased by a UCC Member from
DHR LLC under this Agreement shall meet the then-current DHR LLC product
specification or such specifications as DHR LLC reasonably determines (e.g., in
connection with any of the services or consultation provided by DHR LLC under
this Agreement) will meet such UCC Member’s product quality requirements.

 

31Exhibit 10.1

 

CONFORMED
COPY

 

AMENDMENT TO  TERM LOAN AGREEMENT

 

AMENDMENT TO TERM LOAN
AGREEMENT (this “Amendment”),
dated as of January 15, 2008, among IBM INTERNATIONAL GROUP B.V., a
private company with limited liability (besloten vennootschap met beperkte
aansprakelijkheid) organized under the laws of The Netherlands (the “Borrower”) with corporate seat in Amsterdam, the
Netherlands, the several banks and other financial institutions from time to
time parties thereto (the “Lenders”),
MORGAN STANLEY SENIOR FUNDING, INC., as administrative agent for the Lenders thereunder
(in such capacity, the “Administrative Agent”),
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH, as Documentation Agent (in such
capacity, the “Documentation Agent”), and LEHMAN
COMMERCIAL PAPER, INC., as Syndication Agent (in such capacity, the “Syndication Agent”, and, together with the Administrative
Agent and the Documentation Agent, the “Agents” and
each an “Agent”). 
Unless otherwise indicated, all capitalized terms used herein and not
otherwise defined herein shall have the respective meanings provided such terms
in the Credit Agreement referred to below.

 

W  I  T  N  E  S
S  E  T  H :

 

WHEREAS the Borrower, the Lenders from time to time
party thereto, and the Agents are parties to a Term Loan Agreement, dated as of
May 25, 2007 (the “Credit Agreement”);
and

 

WHEREAS, the parties
hereto wish to enter into certain amendments regarding the Credit Agreement as
herein provided;

 

NOW, THEREFORE, it is
agreed:

 

I.          Amendments to the Credit Agreement.

 

The
definition of “Net Available Proceeds” appearing
in Section 1.01 of the Credit Agreement is hereby amended by deleting the
text “$13,000,000,000” appearing in clause (ii) thereof and inserting the
text “$14,500,000,000” in lieu thereof.

 

II.            Miscellaneous Provisions.

 

1.             In order to induce the Lenders to
enter into this Amendment, the Borrower hereby represents and warrants that (i) no
Default or Event of Default exists as of the Amendment Effective Date (as
defined below) both before and after giving effect to this Amendment and (ii) all
of the representations and warranties contained in the Credit Agreement are
true and correct in all material respects on the Amendment Effective Date both
before after giving effect to this Amendment, with the same effect as though
such representations and warranties had been made on and as of the Amendment
Effective Date (it being understood that any representation or warranty made as
of a specific date shall be true and correct in all material respects as of
such specific date).

 

 

2.             This Amendment is limited as
specified and shall not constitute a modification, acceptance or waiver of any
other provision of the Credit Agreement.

 

3.             This Amendment may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which counterparts when executed and delivered shall be
an original, but all of which shall together constitute one and the same
instrument.  A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.

 

4.             THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.

 

5.             This Amendment shall become
effective on the date (the “Amendment Effective
Date”)  (x) the Borrower,
the Administrative Agent and the  Required
Lenders shall have signed a counterpart hereof (whether the same or different
counterparts) and (y) the Guarantor shall have signed an acknowledgment
consenting to the Borrower entering into this Amendment and, in each case,
shall have delivered (including by way of facsimile or other electronic
transmission) the same to White & Case LLP, 1155 Avenue of the
Americas, New York, NY 10036; Attention: Omer Duru (facsimile number: 212-354-8113
/ email: oduru@whitecase.com).

 

6.             From and after the Amendment
Effective Date, all references in the Credit Agreement and the Guaranty Agreement
shall be deemed to be references to the Credit Agreement and the Guaranty
Agreement, as modified hereby.

 

*        *        *

 

2

 

IN WITNESS WHEREOF, the parties hereto have caused
their duly authorized officers to execute and deliver this Amendment as of the date first above
written.

 

	
   

  	
  IBM INTERNATIONAL GROUP
  B.V.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John P. Gianukakis

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MORGAN STANLEY SENIOR
  FUNDING, INC.,

  
	
   

  	
   

  	
  Individually and as
  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Stephen B. King

  
	
   

  	
   

  	
  Title: VP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK AG CAYMAN
  ISLANDS

  
	
   

  	
   

  	
  BRANCH, Individually and
  as Documentation

  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Oliver Schwarz

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Stefan Freckmann

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LEHMAN COMMERCIAL PAPER,
  INC.,

  
	
   

  	
   

  	
  Individually and as
  Syndication Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Ahuva Schwager

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  

 

 

IBM
- First Amendment

 

 

	
   

  	
  SIGNATURE PAGE TO THE
  AMENDMENT TO

  TERM LOAN AGREEMENT, DATED AS OF

  JANUARY 15, 2008, AMONG IBM

  INTERNATIONAL GROUP B.V., THE

  LENDERS FROM TIME TO TIME PARTY

  THERETO MORGAN STANLEY SENIOR

  FUNDING, INC., AS ADMINISTRATIVE

  AGENT, DEUTSCHE BANK AG CAYMAN

  ISLANDS BRANCH, AS DOCUMENTATION

  AGENT, AND LEHMAN COMMERCIAL

  PAPER, INC., AS SYNDICATION AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  	
   

  
	
   

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gregory L. Smith

  
	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LEHMAN BROTHERS BANK, FSB

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Janine M. Shugan

  
	
   

  	
  Title: Authorized
  Signatorys

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UBS LOAN FINANCE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Irja R. Otsa

  
	
   

  	
  Title: Associate
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Mary E. Evans

  
	
   

  	
  Title: Associate Director

  

 

 

IBM
- First Amendment

 

 

	
   

  	
  THE BANK OF TOKYO – MITSUBISHI UFJ, LTD.,

  
	
   

  	
  NEW YORK BRANCH

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Lillian Kim

  
	
   

  	
  Title: Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BNP PARIBAS

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Richard DaCosta

  
	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Berangere Allen

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JP MORGAN CHASE BANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John Kowalczuk

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BARCLAYS BANK PLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Nicholas Bell

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MERRILL LYNCH COMMERCIAL FINANCE CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ David Millett

  
	
   

  	
  Title: Vice President

  

 

 

IBM - First Amendment

 

 

The undersigned, being the Guarantor under, and as
defined in, the Credit Agreement referenced in the foregoing Amendment, hereby
consents to the entering into of the Amendment.

 

 

	
   

  	
  INTERNATIONAL
  BUSINESS MACHINES

  
	
   

  	
   

  	
  CORPORATION,
  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Martin Schroeter

  
	
   

  	
   

  	
  Title: Treasurer

  

 

 

IBM - First Amendment

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