Document:

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                                                                   Exhibit 10.24

                              NORCO GROUND LEASE

                            AND GRANT OF SERVITUDES

                                    Between

                               SHELL OIL COMPANY

                                      and

                            SHELL EPOXY RESINS LLC

                                  Dated as of
                               November 1, 2000
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                               TABLE OF CONTENTS

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<S>                                                                                                     <C>
ARTICLE 1 Lease; Term................................................................................     1
ARTICLE 2 Rent.......................................................................................     3
ARTICLE 3 Impositions; Lessee's Costs; Net Lease.....................................................     4
ARTICLE 4 Use of Land................................................................................     7
ARTICLE 5 Hazardous Substances.......................................................................    10
ARTICLE 6 Compliance with Ordinances; Maintenance and Repair.........................................    14
ARTICLE 7 Insurance..................................................................................    15
ARTICLE 8 Liens......................................................................................    16
ARTICLE 9 Assignment and Subletting..................................................................    16
ARTICLE 10 Condemnation..............................................................................    21
ARTICLE 11 Damage and Restoration....................................................................    22
ARTICLE 12 Construction, Changes and Alterations.....................................................    22
ARTICLE 13 Indemnification...........................................................................    24
ARTICLE 14 Covenant Against Waste....................................................................    26
ARTICLE 15 Inspection by Lessor......................................................................    26
ARTICLE 16 Defaults..................................................................................    27
ARTICLE 17 Arbitration...............................................................................    28
ARTICLE 18 Surrender of Improvement; Holding Over....................................................    29
ARTICLE 19 Quiet Enjoyment...........................................................................    30
ARTICLE 20 Excavations and Lateral Support...........................................................    31
ARTICLE 21 Servitudes................................................................................    31
ARTICLE 22 Notices...................................................................................    34
ARTICLE 23 Miscellaneous.............................................................................    36
ARTICLE 24 Option....................................................................................    37
EXHIBIT A-1 SITE PLAN................................................................................     3
EXHIBIT B  LESSOR'S ADJOINING PROPERTY...............................................................     4
EXHIBIT C  COMMON AREAS AND DRIVEWAYS................................................................     5
EXHIBIT D  MEMORANDUM OF LEASE, RESERVATION AND GRANT OF SERVITUDES, GRANT OF OPTION TO LEASE AND
            DECLARATION OF SEPARATE OWNERSHIP OF IMPROVEMENTS........................................     6
</TABLE>
<PAGE>

                              NORCO GROUND LEASE
                            AND GRANT OF SERVITUDES

     THIS NORCO GROUND LEASE AND GRANT OF SERVITUDES (this "Lease") is dated as
of November 1, 2000 ("the Effective Date"), and made between SHELL OIL COMPANY,
a Delaware corporation, acting through Shell Chemical Company, a Delaware
corporation, on its own behalf and as authorized agent for Shell Oil Company
pursuant to the Chemical Authorization Agreement dated March 1, 1995 ("Lessor"),
and SHELL EPOXY RESINS LLC, a Delaware limited liability company ("Lessee").

                                   RECITALS:

A.   Lessor is the owner of the surface of that certain land located in St.
Charles Parish, Louisiana, more particularly described in Exhibit A attached
                                                          ---------
hereto and shown on Exhibit A-1 attached hereto (such land alone, without the
                    -----------
buildings and improvements located thereon, is hereinafter referred to as the
"Land");

B.   Lessor, prior to the execution hereof, has transferred, assigned and
conveyed to Lessee, among other things, certain assets, equipment and
improvements located on the Land (hereinafter all of the assets, equipment and
improvements now or hereafter located on the Land and owned by Lessee are
collectively referred to as the "Improvements", and the Land, together with the
Improvements, are collectively referred to as the "Property").  Lessor
heretofore leased the Land to Lessee by Ground Lease dated August 1, 1999 (the
"Original Lease").

C.   Lessor and Lessee have entered into a First Amended and Restated Services,
Utilities, Materials and Facilities Agreement (the "SUMF Agreement"), pursuant
to which Lessor will provide certain services, utilities, materials and
facilities to Lessee in connection with the Property.

D.   Lessor and Lessee desire to terminate the Original Lease and enter into
this Norco Ground Lease, on the terms and conditions hereinafter set forth.

     NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which have hereby acknowledged,
Lessor and Lessee hereby agree as follows:

                                   ARTICLE 1

                                  Lease; Term

     1.1  Lessor, in consideration of the rent to be paid and the terms,
covenants and conditions to be performed and observed by Lessee as herein
provided, does hereby demise and lease unto Lessee, and Lessee does hereby take
and lease from Lessor, the Land, and Lessor hereby grants and conveys to Lessee
for the term of this Lease, and reserves unto itself perpetually, the servitudes
described in Article 21 hereof.
<PAGE>

     TO HAVE AND TO HOLD unto Lessee for and during the term set forth herein.

     1.2  Lessor does not demise or lease to Lessee any space under, on or above
the streets, alleys, sidewalks and other public areas adjoining the Land (herein
collectively called the "Environs"); the Land does not include any portion of
the Environs, but Lessor herein grants and conveys to Lessee, during the term of
this Lease and subject to all the provisions hereof, certain servitudes to use
said Environs as Lessor now or hereafter may own.

     1.3  This Lease contains no warranties of title or warranties with respect
to the physical or environmental condition of the Land.  EXCEPT AS OTHERWISE
PROVIDED IN ANY OF THE TRANSACTION DOCUMENTS, THE LAND IS LEASED IN ITS AS IS
CONDITION, WITH ALL FAULTS AND WITHOUT WARRANTY EXPRESSED OR IMPLIED AS TO
HABITABILITY, CONDITION, ENVIRONMENTAL CONDITION,  MERCHANTABILITY OR FITNESS
FOR A PARTICULAR USE OR PURPOSE; AND LESSEE ASSUMES THE CONDITION OF THE LAND,
INCLUDING THE ENVIRONMENTAL CONDITION OF THE LAND, AND AGREES THAT LESSOR SHALL
HAVE NO LIABILITY TO LESSEE AS A RESULT OF ANY CONDITION THAT MIGHT EXIST ON THE
LAND, EXCEPT AS EXPRESSLY SET FORTH IN THIS LEASE AND THAT CERTAIN MASTER SALES
AGREEMENT BY AND AMONG SHELL OIL COMPANY AS SELLER, RESIN ACQUISITION LLC, AS
BUYER AND SHELL EPOXY RESINS INC. DATED AS OF JULY 10, 2000 (THE "MSA") AND ALL
DOCUMENTS EXECUTED IN CONNECTION THEREWITH INCLUDING WITHOUT LIMITATION, THE
ENVIRONMENTAL AGREEMENT AND THE INTELLECTUAL PROPERTY TRANSFER AND LICENSE
AGREEMENT (EACH AS DEFINED IN THE MSA AND THE SUMF AGREEMENT, THE MSA AND SUCH
DOCUMENTS ARE COLLECTIVELY CALLED THE "TRANSACTION DOCUMENTS").

     1.4  This Lease and the rights of Lessee hereunder are subject and
subordinate to all restrictions, reservations, servitudes, rights-of-way,
conditions and encumbrances of record on the date of this Lease in St. Charles
Parish, Louisiana , any and all unrecorded railroad servitudes or crossing
agreements or such matters that may be visible or evidenced on the ground as
shown by survey of the Land by Landmark Surveying, Inc. (Network Project No.
20000517/3, Sheet 1 of 11), dated October 17, 2000, revised on October 30, 2000.

     1.5  The term of this Lease shall commence as of the Effective Date (the
"Commencement Date") and expire on the twentieth (20/th/) annual anniversary
date of the Effective Date (as that term is defined in the MSA), subject to the
option rights set forth in Section 1.6 below.

     1.6  Provided that Lessee is not then in default under this Lease beyond
any and all applicable notice and cure periods, if any, Lessee shall have the
option to renew and extend this Lease with respect to all (but not less than
all) of the Land for three (3) renewal terms of five (5) years each (hereinafter
a "renewal term" or the "renewal terms").  Each renewal term, if any, shall
commence upon the expiration of the immediately preceding term of this Lease.
Lessee may exercise each option by giving Lessor written notice at least one (1)
year prior to the expiration of the immediately preceding term of this Lease.
In the event of such a renewal, the term of this Lease shall include such
renewal term, and such renewal shall be upon the same
<PAGE>

terms and conditions as set forth in this Lease. In addition, during such
renewal terms, Lessee shall pay all Additional Rent and other amounts due Lessor
under the Lease, and Lessee shall have no further options to renew this Lease.
The parties intend that so long as the SUMF Agreement remains in effect, this
Lease shall remain in effect. Accordingly, notwithstanding the foregoing, if the
term of the SUMF Agreement is renewed, then the term of this Lease shall
automatically and without further action, be deemed renewed to be coterminous
with the SUMF Agreement, provided, however, upon default by Lessee under this
Lease, Lessor shall continue to have the rights and remedies herein set forth
including termination of this Lease even if the SUMF Agreement is not
terminated. This Lease may remain in effect after the termination of the SUMF
Agreement.

                                   ARTICLE 2

                                     Rent

     2.1  Lessee shall pay to Lessor as annual rent ("Basic Rent") for the Land
the sum of one dollar ($1.00), increased by one dollar ($1.00) per year
thereafter, payable in advance (i) on the Commencement Date, and (ii) on the
last day of the month immediately preceding the Second Lease Year and each
subsequent Lease Year.

          For purposes hereof, the First Lease Year means that period beginning
on the Commencement Date and ending, if the Commencement Date is the first day
of a calendar month, on the day immediately preceding the first annual
anniversary of the Commencement Date, or if the Commencement Date is other than
the first day of a calendar month, on the last day of the calendar month in
which the first anniversary of the Commencement Date shall occur. Each
subsequent Lease Year shall commence on the day immediately following the
expiration of the prior Lease Year and shall expire on the first anniversary of
the expiration of such prior Lease Year, except for the final Lease Year which,
as aforesaid, will expire on the twentieth (20/th/) annual anniversary date of
the Effective Date, subject to the option rights set forth in Article I above.

     2.2  Lessee shall also pay to Lessor all amounts designated as Additional
Rent in this Lease.

     2.3  All Basic Rent, Additional Rent and other sums due Lessor hereunder
(collectively, "Rent") shall be paid in lawful money of the United States of
America at such place as Lessor previously may have designated in a notice to
Lessee, and in the absence of such designation shall be paid to Lessor at the
address set forth in Article 22 hereof.

     2.4  All Rent payable under this Lease shall be paid to Lessor without
abatement, deduction, or setoff (except as otherwise specifically provided in
this Lease or as required by Applicable Law).
<PAGE>

                                   ARTICLE 3

                    Impositions; Lessee's Costs; Net Lease

     3.1  (a)  Lessee will pay to Lessor within thirty (30) days after written
request by Lessor, from time to time, as Additional Rent, an amount equal to all
taxes, assessments, use and occupancy taxes, water and sewer charges, rates and
rents, charges for public utilities, excises, levies, license and permit fees,
and other charges of any kind and nature whatsoever, general and special,
ordinary and extraordinary, foreseen and unforeseen, by any public, governmental
or quasi-governmental authority, which are allocable by Lessor to the Land,
including but not limited to assessments for public improvements or benefits,
which at any time (whether during, prior or subsequent to the term of this
Lease) are assessed, levied, imposed or become a lien upon the Land or any part
thereof and which are paid or incurred by or on behalf of Lessor at any time
during any calendar year containing any portion of the term of this Lease,
together with any accrued interest on the unpaid balance of any of the foregoing
which Lessor elects to pay in installments (all of which taxes, assessments, and
other governmental charges, and such interest on installments, are herein
referred to as "Impositions") so long as Lessee has consented to the payment of
the Impositions in Installments. Lessor shall have no obligation with regard to
the Impositions.  Taxes on the Land shall be allocated based on relative square
footage, and taxes on the Improvements shall be allocated as set forth in
paragraph 6 of the Tax Agreement dated as of the Effective Date among Shell Oil
Company, Shell Epoxy Resins, Inc. and Resin Acquisitions LLC, attached as an
exhibit to the MSA.

          (b)  Any Imposition which becomes due and payable during a calendar
year, a part of which period is included within the term of this Lease, and a
part of which is included in a period before or after the commencement or
termination of the term of this Lease, shall (whether or not, during the term of
this Lease, such Imposition shall be assessed, levied, imposed or become a lien
upon the Property or any part thereof) be adjusted as between Lessor and Lessee
as of the commencement or termination of the term of this Lease, as the case may
be, so that Lessor shall pay that proportion of such Imposition which that part
of such calendar year not included within the term of this Lease bears to such
fiscal period, and Lessee shall pay the remainder thereof. The obligations of
Lessor and Lessee under this Section will survive expiration or termination of
the term of this Lease.

          (c)  With respect to any Imposition for public improvements or
benefits which Lessor elects to pay in installments which election shall be
subject to Lessee's prior written consent, Lessee must pay as Additional Rent
those installments which become due and payable during the term of this Lease,
together with any accrued interest on the unpaid balance of the amounts owed,
and Lessor will pay the balance of such installments and interest.

          (d)  "Impositions" do not include any franchise, estate, inheritance,
succession, capital levy or transfer tax of Lessor, or any net income, excess
profits or revenue tax or any other tax, assessments, charge or levy upon the
Rent payable by Lessee under this Lease, except any such tax which is, in whole
or in part, in substitution for (or when and after imposed tax results in the
elimination of) any other Imposition. If any such substitute Imposition is
imposed on a graduated scale, "Impositions" will include the portion of such
substitute Imposition that would be payable if the Rent payable under this Lease
were the only income of Lessor subject
<PAGE>

thereto and the Land and Lessor's interest under this Lease were the only
property of Lessor subject thereto.

     3.2  Lessee shall have the right to contest the amount or validity of any
Imposition by appropriate legal proceedings, but this shall not be deemed or
construed in any way as relieving, modifying or extending Lessee's obligation to
pay any Imposition at the time and in the manner in this Article provided,
unless (a)  the legal proceedings shall operate to prevent (i) the sale of the
Land or any part thereof and (ii) the placing of any lien thereon to satisfy
such Imposition prior to the final determination of such proceedings, or (b)
Lessee has provided Lessor with such security protecting Lessor from sale of the
Land as Lessor shall require in its reasonable discretion.  Lessor shall not be
required to join in any such proceeding unless it shall be necessary for it to
do so in order to properly prosecute such proceeding, Lessee hereby indemnifies
Lessor, and Lessor shall have been fully indemnified to its satisfaction against
all costs and expenses in connection therewith, nor shall Lessor be subjected to
any liability for the payment of any costs or expenses in connection with any
proceeding brought by Lessee, and Lessee shall indemnify and save harmless
Lessor from any such costs or expenses.

     3.3  Subject to the provisions in Section 3.2, Lessee shall timely pay to
the appropriate governmental entity(ies) all Impositions allocable to the
Improvements and Lessee's personal property and trade fixtures during the term
of this Lease.

     3.4  Lessee shall at its sole cost and expense procure any and all
necessary permits, licenses or other authorizations required for the lawful and
proper installation and maintenance upon the Property of wires, pipes, conduits,
tubes and other equipment and appliances for use in supplying any such service
or utility to Lessee in and upon the Property. Further, Lessee shall pay all
charges for gas, electricity, light, heat, air conditioning, power, telephone
and other communication services, and all other utilities and similar services
rendered or supplied to the Property, and all water rents, sewer service
charges, or other similar charges levied or charged against, or in connection
with, the Property.

     3.5  Lessee shall pay to Lessor, as Additional Rent, $60,000 per year
("Lessee's Cost") which is hereby deemed to be Lessee's share of the maintenance
and repair of, and ad valorem taxes and other impositions attributable to
Lessor's Adjoining Property on which Lessee has certain rights pursuant to
Sections 21.2, 21.3, 21.4, 21.5 and 21.6 of this Lease.  Lessee's Cost has been
established based upon estimates of actual costs and expenses to which both
Parties have agreed.  Neither Lessor nor Lessee shall have the right to contest
the amount of Lessee's Cost.  Lessee agrees that Lessee's Cost shall be adjusted
annually by the Inflation Rate effective April 1 of each year.

     (a)  As used here, "Inflation Rate" shall for a given yearly period equal
the following fraction (rounded to the fourth decimal place): (x) the numerator
shall equal the average Published Inflation Index for the calendar year
preceding the commencement of such yearly period, and (y) the denominator shall
equal the average Published Inflation Index of the calendar year preceding that
for the numerator described above (e.g., for a yearly period commencing April 1,
1999, the numerator would have equaled 389.5 (the average Published Inflation
Index for 1998).
<PAGE>

     (b)  As used herein, "Published Inflation Index" for a given calendar year
shall equal the index in the "Chemical Engineering Plant Cost Index" for that
calendar year as published in the Chemical Engineering Magazine.  If the
Published Inflation Index is discontinued, the Parties shall adopt by mutual
agreement a replacement index that most closely measures the price changes
measured by the original Published Inflation Index that is discontinued.  If the
basis of reporting of the Published Inflation Index is changed from the basis in
effect on the date hereof, then the Published Inflation Index shall be
correspondingly changed.

     (c)  In addition to the Basic Rent, Lessee shall pay in advance on the
Commencement Date and on the first day of each and every month thereafter during
the Term against receipt of bills therefor, installments equal to one-twelfth
(1/12) of Lessee's Cost due for each calendar year of the Term.

     (d)  Any Lessee's Cost which becomes due and payable during a calendar
year, a part of which year is included within the term of this Lease, and a part
of which is included in a period before or after the commencement or termination
of the term of this Lease, shall be equitably adjusted as between Lessor and
Lessee.

     3.6  Notwithstanding any other provision of this Lease, in order to avoid
duplication, Lessee's Costs, Impositions and all other amounts payable by Lessee
under this Lease shall not duplicate amounts payable by Lessor under the SUMF
Agreement or any other Transaction Document.

     3.7  Lessor shall not be required to make any expenditure, incur any
obligation, or incur any liability of any kind whatsoever in connection with
this Lease, the Land, or the ownership, construction, maintenance, operation, or
repair of the Improvements.  It is expressly understood and agreed that, except
as herein otherwise expressly provided, this is a completely net lease intended
to assure Lessor the rentals herein reserved on an absolute basis.  Under no
circumstances or conditions, whether now existing or hereafter arising, or
whether or not beyond the present contemplation of the parties, shall Lessor be
expected or required to make any payment of any kind whatsoever in connection
with this Lease, the Land, or the ownership, construction, maintenance,
operation, or repair of the Improvements.  The provisions of this Section 3.7
are subject to the provisions of the Transaction Documents which may obligate
Lessor to make expenditures or incur obligations or liabilities in connection
with the Land or Improvements.
<PAGE>

                                   ARTICLE 4

                                  Use of Land

     Lessee may only use and occupy the Land for the purpose of maintaining,
operating, repairing, replacing or expanding the Improvements for producing
resins, versatics and other products in the Resins/Derivatives Field, and for no
other purpose; provided however, certain construction may be conducted if and as
permitted pursuant to Article 12, so long as the construction is of Improvements
for producing resins, versatics and other products in the Resins/Derivatives
Field, and for no other purpose.  For purposes of this paragraph, Resins shall
mean:

     (a)  mono- or polyglycidyl ethers or esters having an epoxide content from
10 to 9000 mmol/kg and prepared from compounds bearing one or more optionally
substituted or hydrogenated phenolic hydroxyl groups or aliphatic or
cycloaliphatic mono- or polyalcohol or mono-or polycarboxylic acid, and
epihalohydrin in the presence of an acid or a base catalyst, or from
(bis)carbonate ester precursors or di-alpha glycol compound precursors; adducts
and derivatives of such polyglycidyl ethers or esters; epoxidized vegetable oils
prepared by peracid epoxidation; naturally occurring epoxidized oils; and
epoxidized bis allylether of bisphenol acetone prepared by epoxidation via
either peracid epoxidation or reaction with hydrogen peroxide.

     (b)  aqueous stabilized dispersions of any of mono- or polyglycidyl ethers
and esters, adducts and derivatives thereof, liquid or semi-solid polyester
oligomer, acrylics, polyurethanes, glycidated polyols and halogenated polyol
adducts;

     (c)  epihalohydrin; allylhalide; inorganic byproducts of the reaction of
propene and halogens, including halogenated mineral acids and calcium halides;
and the direct organic byproducts of the reaction of propene and halogens;

     (d)  polyphenolic compounds, halogenated or hydrogenated derivatives
thereof and alkyl-substituted polyphenolic compounds, derived from mono- and
polynucleic phenols (or mono- or polynucleic alkyl-substituted phenols) and/or
ketones, aldehydes, dicarbonyls or compounds containing two or more double or
triple bonds;

     (e)  alpha-, alpha-branched tertiary mono- and poly-carboxylic acids having
from 5 to 19 carbon atoms, prepared from CO, water and alkene, or CO and an
alkanol; the glycidyl ester and vinyl ester derivatives respectively of said
alpha-, alpha- branched tertiary mono- and poly-carboxylic acids, prepared from
said acids with epihalohydrin in the presence of a base catalyst, or from said
acids and acetylene in the presence of a catalyst; and the derivatives of said
alpha-, alpha-branched tertiary mono- and poly-carboxylic acids prepared via
modification of their acid function;

     (f)  polyesters prepared from a mono-, a di- and/or a tri-functional
aliphatic, ethylenically unsaturated or cycloaliphatic carboxylic acid or
anhydrides thereof, optionally mixed with a mono-, di- and/or tri-functional
aromatic carboxylic acid or anhydrides thereof, and mono-, di-, tri- and/or
tetra functional alcohol, and optionally a hydroxy-acid and/or a dihydroxy-acid,
said polyester containing as functional groups mainly secondary and/or tertiary
carboxylic
<PAGE>

groups or primary and/or secondary alcohols in pendant and/or terminal position,
and the corresponding polyglycidyl esters or epoxidized esters thereof, and
having a number average molecular weight of up to 10,000 g/mol;

     (g)  amine, acid (including acid anhydride) and/or phenol based curing
agents for epoxy resins, which are compounds having two or more amine, acid
and/or phenolic functionalities per molecule and which may be optionally end-
capped or adducted or blended with acids, substituted phenols, epoxies,
aldehydes, tertiary amines and/or phenols, andimidizoles, and aqueous stabilized
dispersions of such amine, acid and/or imidazoles; excluding (i) any compounds
derived from optionally hydrogenated polymers of one or more of isoprene,
butadiene and styrene, having a total (or, in the case of radial or star
polymers, arm) number average molecular weight between 1000 and 35,000, as
determined by gel permeation chromatography using polystyrene calibration
standards, and (ii) alternating polymers of CO and olefinic monomers;

     (h)  polyarnides having two or more amine groups produced by condensation
of one or more mono- and/or polyfunctional acids or anhydrides thereof with a
polyamine, which polyamides have a number average molecular weight of up to
10,000 g/mol;

     (i)  mono- or polyfunctional amines containing glycidyl groups substituted
on nitrogen;

     (j)  blends of the polyglycidyl ether products of part (a) of this
definition of Resins or the polyamide products of part (g) with acrylates,
methacrylates, polyacrylates and/or styrene;

     (k)  organic compounds containing two or more cyanate (-O-C=N) groups
within each molecule, linked to an aliphatic or aromatic structure containing
more than 2 but not more than 200 carbon atoms, derived from polyphenolic
compounds and cyanogen halides;

     (l)  compounds containing at least two acetylenic (-C=C-) groups per
molecule and containing at least 10 but not more than 200 carbon atoms per
molecule, derived from polyphenolic compounds and propargyl halides;

     (m)  dimers of an optionally halogenated cyclobutene compound having up to
thirty (30) carbon atoms, in which the cyclobutene compound is fused with an
aromatic or cycloaliphatic ring, which dimers are linked through at least one
divalent linking group; esters or ethers of the reaction products of such an
optionally halogenated cyclobutene compound with a product as described in parts
(a) or (d) of this Resins definition; and copolymer of one or more of such
optionally halogenated cyclobutene compounds and one or more aryl compounds;

     (n)  [intentionally left blank]

     (o)  at least partly furanised linear CO/olefin polymer, as such or in
combination with a maleimide crosslinking agent, in which furanised CO/olefin
polymer monomer units originating from CO alternate with olefinic monomer units,
for making or for use as a cross-linked resin which is thermo-reversible at a
temperature above 50C, manufactured by furanising a low molecular weight
polyketone, as described in part (p) below; and
<PAGE>

     (p)  low molecular weight polyketone, which is a linear CO/olefin polymer
in which monomer units originating from CO alternate with olefinic monomer
units, said polymer being amorphous, having a crystalline melting point of less
than 150C, and having a limiting viscosity number of less than 0.6 dl/g,
measured in m-cresol at 60C.

"Resins/Derivatives Field" means the manufacture, use or sale of Resins,
including research and development in support thereof, provided, however, in
respect of any and all Resins, Resins/Derivatives Field excludes:

     (a)  use and/or sale of the Resins of part (g) of the Resins definition for
any purpose other than as curing agents;

     (b)  use and/or sale of Resins of part (p) of the Resins definition for any
purpose other than Conventional Resins Applications;

     (c)  manufacture of Resins of part (p) of the Resins definition for all
purposes other than as an intermediates in the preparation of Resins of part (o)
of that definition; and

     (d)  combining any of the vinyl esters of part (e) of the definition of
Resins with a silicate in a composition intended for use as binder for polymer
particles containing at least ninety percent (90%) by weight, based on weight of
the particles, of a polymer containing at least 90% by weight of polymerised
styrene, and to sell and use such combinations (and to conduct research and
development in support thereof); and

     (e)  manufacture, use and/or sale of (and research and development in
support thereof for) any of the following:

          (1)  additive components alone or in combination ("Additives")
     intended for use in any one or more of the following applications:

               (i)   formulating finished lubricants or lubricant additive
          packages of any kind;

               (ii)  formulating finished fuels or fuel additive packages of any
          kind;

               (iii) formulating hydraulic fluids;

               (iv)  formulating power transmission fluids;

               (v)   dewaxing lube oil;

               (vi)  transporting crude oil; and

          (2)  intermediates ultimately intended for use in manufacturing
     Additives for use in any one or more of the applications specified in part
     (e)(1) above.
<PAGE>

     This Resins/Derivatives Field further encompasses

          (1)  upgrading the organic byproducts in part (c) of the Resins
     definition, and

          (2)  selling products resulting from (1) above other than as Additives
     or as intermediates ultimately intended for use in manufacturing Additives.

     Lessor reserves the right to restrict and deny access to the Land to
persons or entities that Lessor, in its sole discretion and in accordance with
its security policies, deems to be disruptive, dangerous or who in any manner
may jeopardize the health, safety or environment of the Land, Lessor's Adjoining
Property (as defined herein), the entire complex of which the leased premises is
a part or anyone working thereon or therein.  By way of example, but not by way
of limitation, any person who is perceived to be under the influence of a mind
altering substance, who is or has been engaged in fights or other disruptive
behavior, or who refuses to comply with the rules as promulgated by the security
service, may be banned.

                                   ARTICLE 5

                             Hazardous Substances

     5.1  (a)  Lessee shall comply in all material respects with any
Environmental Laws (as that term is defined in the SUMF Agreement).  If any new
chemicals are introduced by Lessee to its operations on the Land, Lessee shall
notify the Lessor of such new chemicals.  For purposes of this notice, chemicals
include, but is not limited to, any process materials, any new chemicals
introduced into the cooling water systems, and any new waste material, etc.
Notification must be made 90 days in advance or as soon as practicable.  Lessee
shall provide Lessor with a copy of the material safety data sheets for any
chemical substances that Lessee brings onto the Premises.

          (b)  Lessee, its successors and assigns, shall not conduct any soils,
groundwater or other environmental testing on, at, or within the Land without
prior consultation with and the approval of Lessor such approval not to be
unreasonably withheld.  If any such soils, groundwater or other environmental
testing is mandated by law, Lessee shall provide Lessor with prompt notice of
such requirement and Lessor shall have the right, initially at its expense
unless the Parties agree otherwise, but without Lessor accepting responsibility
for any related claim and subject to a reimbursement right against Lessee if and
to the extent that Lessee has ultimate responsibility for any related claim, to
contest such governmental requirement and/or to perform the required testing and
any necessary reporting following the completion of such testing.

          (c)  Lessor shall indemnify, defend, save and hold harmless Lessee
from and against all Environmental Damages imposed upon or incurred by Lessee
resulting from any: (i) violation of Environmental Law by Lessor on Lessor's
Adjoining Property during the term of this Lease; or (ii) Release (as defined in
the Environmental Agreement) from Lessor's Adjoining Property to the Property
during the term of this Lease.

          (d)  Lessee shall indemnify, defend, save and hold harmless Lessor
from and against all Environmental Damages imposed upon or incurred by Lessor
resulting from any:
<PAGE>

(i) violation of Environmental Law by Lessee; or (ii) Release of a Hazardous
Substance (as defined in the Environmental Agreement) by Lessee at the Property
during the term of this Lease.

     5.2  Lessee hereby covenants and agrees that the following provisions shall
be applicable at all times during the term of this Lease:

          (a) Generation; Release; Storage on the Property.  Lessee shall not
              --------------------------------------------
permit Hazardous Substances to be generated, released, stored, handled, buried,
disposed of or deposited over, beneath, in, on or about the Property during the
term of this Lease, except that Lessee may generate, store and use on the
Property Hazardous Substances used in connection with the operation of its
business on the Property, provided such storage, use, handling and
transportation of such Hazardous Substances, and the treatment or disposal
thereof, shall at all times be in compliance in all material respects with all
applicable federal, state or local statutes, laws, ordinances, codes, rules,
regulations, orders or decrees relating thereto.

          (b) Generation; Release; Storage on Adjacent Property.  Except as
              -------------------------------------------------
provided in any of the Transaction Documents, Lessee shall not generate, store,
bury, dispose of or deposit any Hazardous Substances over, beneath, in or on any
real estate adjacent to the Property or in any structure located thereon.

          (c) Records.  Lessee shall keep and maintain at the Property detailed
              -------
environmental, health and safety records of the Property and Lessee's operations
to the extent required by any applicable Environmental Laws.

          (d) Notice of Releases, Governmental Action, Hazardous Substances
              -------------------------------------------------------------
Claims and Environmental Condition.  Lessee will advise Lessor in writing of the
----------------------------------
following matters:  (i) each release or spill of any Hazardous Substances on,
within, under, over or about the Property promptly after Lessee acquires
knowledge of the occurrence, (ii) any and all enforcement, cleanup, removal or
other governmental or regulatory actions instituted, completed or threatened in
writing against Lessee or the Property promptly after Lessee acquires knowledge
thereof, (iii) any and all claims made or threatened by any third party against
Lessee or the Property relating to any claim, liability, cause of action,
nuisance, fine, penalty, charge, administrative or judicial order or proceeding,
judgment, medical action or cleanup requirements, enforcement, damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Substances on, under or about the Property, promptly after Lessee
acquires knowledge of such claim or threat (the matters set forth in this
Section 5.2(d)(iii) being referred to as "Hazardous Substances Claims"), and
(iv) the results of any inspections or audits (whether performed internally or
by any independent firm) of the Land and/or the Improvements and the operations
thereat, where there is evidence or a finding that Hazardous Substances or
petroleum may have impacted soil or groundwater at the Land.  Lessee will
promptly send to Lessor a true, correct and complete copy of all documentation
evidencing the matter set forth in this Section 5.2(d), including but not
limited to all correspondence sent or received by Lessee to or from any
environmental authority or agency.

          (e) Remedial Action. Lessee will not, without Lessor's prior written
              ---------------
consent (which consent shall not be unreasonably withheld), take any remedial
action (except minor cleanup not involving any governmental agency and except
for any reasonable action taken in
<PAGE>

response to any emergency situation) in response to the presence of any
Hazardous Substances on, under or about the Property ("Remedial Action"), nor
shall Lessee enter into any settlement agreement, consent decree, or other
compromise in respect of any Hazardous Substances Claims; provided, however,
                                                          --------  -------
that if and to the extent that any Remedial Action is required by applicable
law, then (i) Lessee shall promptly (but in any events before commencing such
Remedial Action, if reasonably practicable) deliver to Lessor, for Lessor's
review and approval, a written plan setting forth the proposed Remedial Action,
(ii) Lessee will give Lessor a reasonable opportunity to comment on and make
reasonable modifications to such plan, (iii) Lessor will promptly review each
plan of remediation submitted by Lessee and all modifications submitted by
Lessee, (iv) Lessor may not reject any such plan entirely, but may reasonably
comment on and require reasonable modifications to such plan, and Lessor's
approval of such plan will not be unreasonably withheld or delayed; without
limiting the foregoing, no modification will be deemed reasonable if it violates
applicable law or if it would cause such plan to fail to include actions,
methods or procedures required by law, (v) Lessee will perform such Remedial
Action only in accordance with the plan approved by Lessor in writing, and any
changes approved by Lessor in writing, subject to any superseding order or
directive by any governmental agency having jurisdiction.

          (f) Access by Lessor.  Lessee will permit Lessor to have reasonable
              ----------------
access to the Property to enable Lessor to perform any environmental
investigation or remediation referred to in the third paragraph of this Section
5.2(f). (The foregoing shall not require Lessor to perform remediation which is
the obligation of Lessee pursuant to specific provisions of this Lease or
applicable law.) Lessor will use reasonable efforts not to unreasonably disrupt
or interfere with the conduct of Lessee's business, and such access and the
performance of any such investigation or remediation shall not cause Basic Rent
or any other Rent to abate, and shall not constitute constructive eviction.

     Lessee shall reasonably cooperate with Lessor in connection with any such
investigation or remediation, including, without limitation (but subject to
applicable law and without imposing any obligation on Lessor to become a utility
or subject to the laws generally governing public utilities), permitting Lessor
to use Lessee's electrical, gas, water, heat, light, power, telephone and other
utility connections as Lessor may reasonably deem necessary.

     Lessor, in its sole but reasonable discretion, may require that a soil and
groundwater assessment be made by an independent environmental engineering firm
reasonably acceptable to both Lessor and Lessee (i) at routine intervals, as
determined by pollution liability insurance policy renewal periods for insurance
in effect pursuant to Section 7.1(c); (ii) after any spill or release that has
the potential to significantly affect soil and groundwater on the Land; (iii) in
order to comply with any governmental or legal requirement, or (iv) at any
proposed assignment or sublease or termination of this Lease. Prior to the third
(3/rd/) annual anniversary date of this Lease, Lessor shall bear the cost of the
assessment.  After the third (3/rd/) annual anniversary date of this Lease,
Lessor and Lessee shall share equally in the costs of any such assessment.
Lessor and Lessee, in each instance shall have equal rights to the results of
the assessment.  Such assessments will be done by sampling soils and groundwater
upgradient of, within, and downgradient of the Land using one or both of the
following: (1) non-permanent methods such as drilling, direct push sampling,
using a hand auger, or similar methods, or (2) permanent methods such as
groundwater wells or lysimeters.
<PAGE>

          (g)  Drum Storage.  All drum storage shall be limited to drum storage
               ------------
locations reasonably designated by Lessee. All drum storage locations shall be
provided with secondary spill containment.

          (h)  Spill Prevention and Containment.
               --------------------------------

               (i)   Lessee shall designate and retain a licensed and reputable
environmental spill response contractor who shall respond to major releases or
spills of Hazardous Substances on, within, under, over or about the Property.

               (ii)  Lessee shall provide and maintain in good order "spill
kits" at strategic locations and at reasonable intervals throughout the
Property. Such spill kits shall be designed to enhance the preparedness of
Lessee and its agents and employees to react to potential releases of Hazardous
Substances, and shall include, at a minimum: absorbent materials such as powders
and/or pads, protective clothing such as gloves, boots, etc.

               (iii) Lessee shall timely implement all elements of the Spill
Prevention Control and Countermeasure ("SPCC") Plan pursuant to the Clean Water
Act and regulations issued thereunder.

               (iv)  Lessee shall provide drip pans for all equipment in the
Property which leaks or may leak oil or any other fluid.

          (i)  Waste Generation and Disposal.
               -----------------------------

               (i)   Lessee shall not permit on-site waste disposal on the
     Property.

               (ii)  Lessee shall cause disposal of solvents used on the
     Property offsite in accordance with any applicable Environmental Laws.

          (j)  Facility Expansion and Repair.
               -----------------------------

               (i)   Without Lessor's consent, which consent shall not be
     unreasonably withheld, Lessee shall not be permitted to excavate or dig
     trenches on, within, under, over or about the Property EXCEPT (1) in
     connection with a Permitted Investigation and Disclosure as defined in the
     Environmental Agreement or (2) in the event it is undertaken as part of or
     in connection with the construction of buildings or other improvements or
     other reasonable ground disturbance in connection with the operation of the
     business of Lessee, in which case under clauses (1) or (2) no consent of
     Lessor shall be required, however, Lessee shall provide Lessor with
     reasonable advance notice of any such activity.

               (ii)  Except as otherwise provided in Article 6, Lessee shall not
     permit the repair of any underground systems on, within, under or about the
     Land (including, without limitation, any piping, conduit, sewers and
     foundations) to occur without Lessor's prior written approval, which
     approval shall not be unreasonably withheld, except that Lessee may make
     emergency repairs to such systems without Lessor's approval on the
<PAGE>

     condition that Lessee notifies Lessor of such emergency and of such repairs
     promptly after such emergency arises.

     5.3  Lessor and Lessee acknowledge that notwithstanding any provision to
the contrary in this Lease, the provisions of Section 10.3 of the Environmental
Agreement between Shell Petroleum N.V. and Shell Epoxy Resins, Inc. dated the
date hereof (the "Environmental Agreement") shall apply as between any SELLER
Indemnified Party and SER Indemnified Party and any Person (as defined in the
MSA) to whom a transfer or assignment is made in accordance with Section 11.1 or
the Environmental Agreement.  Any obligation or liability of any SER Indemnified
Party (as defined in the Environmental Agreement) or Seller Indemnified Party
(as defined in the Environmental Agreement) under this Agreement shall be
without prejudice to the rights, if any, of the relevant party to claim
Environmental Damages (as defined under the Environmental Agreement) under the
Environmental Agreement.

                                   ARTICLE 6

              Compliance with Ordinances; Maintenance and Repair

     6.1  Lessee shall keep the Property in a condition conforming in all
material respects to the requirements of all applicable statutes, ordinances,
regulations and other requirements of any governmental authority, the
regulations or other requirements of any national or local board of fire
underwriters or any other body exercising similar functions and the requirements
of all policies of insurance maintained in force by Lessee on or with respect to
the Property, provided that Lessor has given written notice to Lessee of such
requirements.

     6.2  Lessee shall not make or permit any use of the Property, or any part
thereof, which violates any applicable statute, ordinance, regulation or other
requirement of any governmental authority, or which constitutes a nuisance,
public or private, or which may render void or voidable any insurance then in
force pursuant to the provisions of this Lease.

     6.3  Lessee shall, at Lessee's expense, keep the Property in a clean and
orderly condition, free of accumulations of dirt, rubbish, snow, ice and
unlawful obstructions. Lessee shall also keep all Improvements in good order and
condition, ordinary wear and tear excepted, and to that end shall perform all
necessary maintenance and make all necessary repairs and replacements, interior
and exterior, structural and non-structural, extraordinary as well as ordinary,
foreseen as well as unforeseen (including, without limitation, maintenance and
repair of the heating and air conditioning system and the fire
detection/protection and alarm systems and other systems in the Property), all
in accordance with operation and maintenance standards applied by prudent owners
of similar properties in the area and otherwise consistent with the operation
and maintenance standards applied by Lessor during the period of Lessor's
ownership of the Property.
<PAGE>

                                   ARTICLE 7

                                   Insurance

     7.1  Lessee shall, at Lessee's sole cost and expense, provide and maintain
the following minimum insurance, in compliance in all material respects with all
applicable laws and satisfactory to Lessor, during the term of this Lease:

          (a) Commercial General Liability Insurance, including
premises/operations, products/completed operations, contractual liability, and
fire legal liability coverages, in a coverage amount of not less than
$10,000,000 each occurrence (except with respect to fire legal liability
coverage which will have a sublimit of $250,000) and in all events in accordance
with general industry practices for similar operations.  Such insurance may be
maintained in any combination of primary and secondary coverages, as Lessee may
determine;

          (b) Workers Compensation insurance - statutory, and Employers'
Liability Insurance - $1,000,000 each occurrence.

          (c) Pollution liability insurance, which shall include coverage for
gradual and sudden and accidental pollution liabilities and for pollution clean-
up expenses, in a coverage amount of not less than $50,000,000; provided,
however, that Lessor will agree to waive this requirement if Lessee (or if any
parent company of Lessee which executes an instrument satisfactory to Lessor
guaranteeing the obligations of Lessee under this Lease) has and maintains a
credit rating for senior unsecured debt from a nationally recognized credit
rating agency of at least "AA+" or better.

          (d) Fire and  extended coverage insurance covering the Improvements
against loss or damage by fire and such other risks as are from time to time
included in broad form extended coverage endorsements, as Lessee may determine,
but always in an amount equal to the cost of demolition and removal of the
Improvements (exclusive of any co-insurance clause).

          (e) Commercial Automobile Liability Insurance, including owned, non-
owned, and leased vehicles - combined single limit for bodily injury and
property damage - $5,000,000 each occurrence.

          (f) All of the foregoing insurance may be maintained in a blanket
policy or policies with aggregate coverage amounts relating not only to the
Property but to other property of Lessee and may also be maintained in any
combination of primary and secondary coverage, as Lessee may determine.

     7.2  Unless otherwise agreed in writing by Lessor, all insurance provided
for in this Article 7 shall be effected under valid and enforceable policies
issued by insurers licensed in the State of Louisiana and reasonably acceptable
to Lessor.  Upon the execution of this Lease and from time to time as may be
requested by Lessor, Lessee will furnish copies of the certificates evidencing
such insurance to Lessor or Lessee's insurance. The insurance requirements set
forth in this Article 7 shall be adjusted from time to time (but not more than
once in any twelve (12) month period) in accordance with the limits customarily
maintained in the industry for similar properties in similar locations as
reasonably determined by Lessor. If Lessee fails to procure and
<PAGE>

maintain said insurance, Lessor may, but shall not be required to, procure and
maintain the same upon not less than twenty (20) days notice to Lessee, but at
the expense of Lessee, which expense shall be paid upon demand as Additional
Rent. Insurance required hereunder shall be in companies or Groups rated B+-XII
or better in "Best's Insurance Reports Property--Casualty". To the maximum
extent permitted by law, insurance maintained by Lessee shall waive insurer's
rights of subrogation against Lessor and Lessor's insurers. Lessee shall, or
shall require its insurers on its behalf to, provide Lessor with thirty (30)
days' prior written notice of cancellation, nonrenewal, or material modification
of any of the insurance required hereunder.

     All insurance maintained by Lessee shall be regarded as primary insurance
underlying any other applicable insurance and shall not be limited by the
liabilities and indemnities accepted by Lessee in this Lease, nor shall the
Lessee's liabilities and indemnities be limited by the insurance requirements in
this Lease.

     7.3  Upon request, and at Lessor's reasonable discretion, Lessor may, but
shall not be required to, permit Lessee to self-insure in lieu of all or part of
insurance specified in this Lease.

                                   ARTICLE 8

                                     Liens

     8.1  Lessee shall not suffer or permit any mechanic's or materialman's
statutory or similar lien to be filed against the Land or the Improvements or
any interest of Lessor therein by reason of labor, services or materials
supplied or claimed to have been supplied to Lessee or anyone holding or
occupying the Property, or any part thereof, through or under Lessee. If any
such lien shall at any time be filed against the Land or the Improvements,
Lessee shall, within thirty (30) days after notice of the filing thereof, cause
the same to be released and discharged of record by payment, bonding or order of
a court of competent jurisdiction or otherwise.

     8.2  Lessor shall not suffer or permit any mechanic's or materialman's
statutory or similar lien to be filed against the Land or the Improvements or
any interest of Lessee therein by reason of labor, services or materials
supplied or claimed to have been supplied to Lessor. If any such lien shall at
any time be filed against the Land or the Improvements, Lessor shall, within
thirty (30) days after notice of the filing thereof, cause the same to be
released and discharged of record by payment, bonding or order of a court of
competent jurisdiction or otherwise.

                                   ARTICLE 9

                           Assignment and Subletting

     9.1  The Lessee named in the first paragraph of this Lease (the "Original
Lessee"), may at any time or from time to time assign this Lease and/or sublease
all or any part of the Land to an affiliate of Original Lessee or to any other
person (a "Third Party") without the prior written consent of Lessor.  As used
herein, "affiliate" means an entity which owns, is owned by or under common
control with Lessee.  If a Third Party becomes the Lessee under the Lease, then
for the remainder of the Term, Lessee may only assign this Lease or sublease all
or any part
<PAGE>

of the Land with the prior written consent of Lessor (which consent shall not be
unreasonably withheld or delayed) and in each such instance, the Lessee shall
remain primarily liable under this Lease. Notwithstanding the foregoing, Lessee
may mortgage and/or collaterally assign this Lease, or its interest therein, to
a bona fide financial institution or institutions with a business which includes
lending money and with a net worth in excess of One Hundred Million Dollars,
without the prior written consent of Lessor. In addition, Lessee shall have the
right to assign the Lease or sublet the Land to an affiliate without the prior
written consent of Lessor.

     9.2  If Lessee mortgages or otherwise encumbers its interest in this Lease,
the following terms shall apply:

          (a)  If Lessee and/or Lessee's successors and/or assigns shall grant a
     mortgage or security interest in Lessee's interest in this Lease and the
     Land, and if Lessee or the leasehold mortgagee under such leasehold
     mortgage or security agreement shall send to Lessor a copy of its leasehold
     mortgage, together with written notice specifying the name and address of
     the leasehold mortgagee, then so long as such leasehold mortgage shall
     remain unsatisfied of record or until written notice of satisfaction is
     given by the holder of such leasehold mortgage or security agreement to
     Lessor, the following provisions shall apply:

               (i)   Neither Lessee acting alone, nor Lessor and Lessee acting
          jointly, shall cancel, surrender, accept surrender, amend or modify
          this Lease in any material respect without in each case obtaining the
          prior written consent of such leasehold mortgagee, and no merger shall
          result from the acquisition by, or devolution upon, any one entity of
          the fee and the leasehold estate in the Land.

               (ii)  Lessor shall use reasonable efforts, upon serving Lessee
          with any notice or other communication, whether of default or
          otherwise, simultaneously and in the same manner serve a copy of such
          notice upon such leasehold mortgagee.

               (iii) Upon receipt of notice of default from Lessor, the
          leasehold mortgagee shall have the greater of (a) the same time period
          provided to Lessee under this Lease or (b) for monetary defaults,
          forty-five (45) days, and for nonmonetary defaults, ninety (90) days,
          after the receipt of notice from Lessor, to remedy or cause to be
          remedied any alleged default on the part of Lessee, provided that if
          any such nonmonetary default cannot, with the exercise of reasonable
          diligence, be remedied within such period, then so long as such
          leasehold mortgagee commences taking action to remedy such default
          within such ninety (90) day period and thereafter continues with
          reasonable diligence to obtain such remedy with the exercise of
          reasonable diligence, Lessor shall accept such performance by or at
          the instigation of such leasehold mortgagee as if same has been done
          by Lessee. Each notice of default given by Lessor will clearly state
          (x) if monetary, the amounts claimed due under this Lease, (y) if
          nonmonetary, the nature of the default and the remedy required under
          this Lease, and (z) in either case, whether Lessor has a right to
          terminate this Lease based on the alleged defaults. Nothing contained
          in this provision shall require any leasehold mortgagee to cure any
          default by Lessee under this Lease.

<PAGE>

               (iv) Upon notice from Lessor of its desire to terminate this
          Lease following a default, the leasehold mortgagee shall also have the
          separate right to postpone and extend the specified date for the
          termination of this Lease as fixed by Lessor in its notice of
          termination, for a period of not more than twelve (12) months,
          provided that the leasehold mortgagee shall, within forty-five (45)
          days from the receipt of such notice, cure or cause to be cured any
          then existing monetary defaults and within ninety (90) days shall have
          commenced or caused to commence the remedy of all nonmonetary
          defaults, and meanwhile pay or cause to be paid the Basic Rent and
          Additional Rent, and to perform all other covenants of this Lease
          reasonably susceptible of being performed by leasehold mortgagee, and
          provided further that the leasehold mortgagee shall forthwith take
          steps to acquire or sell Lessee's interest in this Lease by
          foreclosure of the leasehold mortgage or otherwise and shall prosecute
          the same to completion with reasonable diligence. If at the end of
          said twelve (12) month period the leasehold mortgagee shall be
          actively engaged in steps to acquire or sell Lessee's interest in this
          Lease, the time of the leasehold mortgagee to comply with this
          provision shall be extended for such period as shall be reasonably
          necessary to complete such steps with reasonable diligence. If the
          leasehold mortgagee is prohibited from commencing or prosecuting
          foreclosure or other appropriate proceedings by any process or
          injunction issued by any court or by reason of any action by any court
          having jurisdiction of any bankruptcy, debtor rehabilitation or
          insolvency proceedings involving Lessee, the said twelve (12) month
          period shall be extended for the period of such prohibition, provided
          that the leasehold mortgagee shall diligently attempt to remove any
          such prohibition. If Lessee's interest is acquired or sold as
          aforesaid by foreclosure of the leasehold mortgage or otherwise during
          said twelve (12) month period, as same may be extended as aforesaid,
          the intended termination of this Lease by Lessor under the aforesaid
          notice will be automatically nullified and this Lease will continue as
          if said notice of termination had never been given.

          (b)  In the event a default by Lessee occurs in the performance or
     observance of any term, covenant, condition, or agreement on Lessee's part
     to be performed under this Lease (other than a term, covenant, condition or
     agreement requiring the payment of a sum of money) which cannot practicably
     be cured by the leasehold mortgagee without taking possession of Lessee's
     interest in the Land, or if such default is of such a nature that the same
     is not susceptible of being cured by the leasehold mortgagee, then Lessor
     shall not serve a notice of election to terminate or otherwise exercise
     remedies under or in respect of this Lease pursuant to the terms thereof,
     or otherwise terminate the leasehold estate or any other estate, right,
     title or interest of Lessee hereunder by reason of such default without
     allowing the leasehold mortgagee reasonable time within which:

               (i)  In the case of a default which cannot practically be cured
          by the leasehold mortgagee without taking possession of Lessee's
          interest in the Land, to obtain possession of Lessee's interest in the
          Land as mortgagee (through the appointment of a receiver of
          otherwise), and, upon obtaining possession, to commence promptly and
          diligently prosecute to completion such action as may necessary to
          cure such default; and

<PAGE>

               (ii) In the case of a default which is not susceptible of being
          cured by the leasehold mortgagee, to commence promptly and diligently
          prosecute to completion foreclosure proceedings or to acquire Lessee's
          estate hereunder, either in its own name or through a nominee, by
          assignment in lieu of foreclosure.

          The leasehold mortgagee shall not be required to continue to proceed
          to obtain possession, or to continue in possession as mortgagee, of
          the Land pursuant to clause (i) above, or to continue to prosecute
          foreclosure proceedings pursuant to clause (ii) above, if and when
          such default shall be cured. Nothing herein shall preclude Lessor from
          exercising any of its rights or remedies with respect to any other
          default by Lessee during any period when Lessor shall be forbearing
          termination of this Lease as above provided, but in such event the
          leasehold mortgagee shall have all of the rights and protections
          hereinabove provided for. If the leasehold mortgagee, or its nominee,
          or a purchaser at a foreclosure sale, shall acquire title to Lessee's
          leasehold estate hereunder, and shall cure all defaults of Lessee
          hereunder which can be cured by the leasehold mortgagee, or by such
          purchaser, as the case may be, then the defaults of any prior holder
          of Lessee's leasehold estate or any other estate, right, title or
          interest hereunder which are not susceptible of being cured by the
          leasehold mortgagee (or by such purchaser) shall no longer be deemed
          to be defaults hereunder.

          (c) In the event (i) this Lease is terminated by reason of Lessee's
     default hereunder, or (ii) this Lease is disaffirmed in the event of
     Lessee's bankruptcy, then, within ten (10) business days after such
     termination (which term as used herein shall include a disaffirmance),
     Lessor shall give notice to the leasehold mortgagee that this Lease has
     been terminated, together with a statement of any and all sums which would
     at that time be due under this Lease but for such termination, and of all
     other defaults, if any, under this Lease then known to Lessor, and the
     leasehold mortgagee, by notice to Lessor, thereupon may request Lessor to
     enter into a new lease of the Premises and Lessor shall enter into a new
     lease (the "New Lease") with the leasehold mortgagee (or its nominee),
     within thirty (30) days after the giving of such notice by the leasehold
     mortgagee provided that the leasehold mortgagee shall have cured or caused
     to be cured any defaults of Lessee existing at the date of termination that
     are) susceptible of being cured. The New Lease shall commence and Rent and
     all obligations of the Lessee under the New Lease shall accrue, as of the
     date of termination of this Lease. The term of the New Lease shall continue
     for the period which would have constituted the remainder of the term of
     this Lease had this Lease not been terminated, and shall be upon all of the
     terms, covenants, conditions, conditional limitations, and agreements
     contained herein which were in force and effect immediately prior to the
     termination of this Lease. The New Lease, and this covenant, shall be
     superior to all rights, liens, estates, titles and interests, other than
     those to which this Lease shall have been subject immediately prior to
     termination and those matters to which this Lease may, by its terms, become
     subject, The provisions of the immediately preceding sentence shall be
     self-executing, and Lessor shall have no obligation to do anything (other
     than to execute such New Lease as herein provided) to assure to the
     leasehold mortgagee or to the tenant under the New Lease good title to the
     leasehold estate and the other estates, rights, titles and interests
     granted thereby. Simultaneously therewith, Lessor shall pay over to the
     leasehold mortgagee all
<PAGE>

     monies on deposit with Lessor, if any, which Lessee would have been
     entitled to use but for the termination of this Lease for the purposes of
     and in accordance with the provisions of the New Lease. The leasehold
     mortgagee shall, simultaneously with the delivery of the New Lease, pay to
     Lessor (1) all Rent and other sums of money due under this Lease on the
     date of termination of this Lease and remaining unpaid; plus (2) all Rent
     and other sums of money due under the New Lease for the period from the
     date of commencement of the term thereof to the date of delivery of the New
     Lease; plus (3) all costs and expenses, including reasonable attorneys'
     fees, court costs, and litigation expenses, incurred by Lessor in
     connection with termination of this Lease, the recovery of possession of
     Lessee's interest in the Land, putting the premises in good condition and
     repair in connection with any defaults hereunder, and the preparation,
     execution and delivery of such New Lease.

          (d) If the leasehold mortgagee forecloses upon or otherwise acquires
     all or part of Lessee's leasehold interest, the transfer to the leasehold
     mortgagee (or any nominee of the leasehold mortgagee) shall not require
     Lessor's consent and the acquiring leasehold mortgagee shall be permitted
     to transfer the acquired interest without Lessor's prior consent and shall
     thereupon be released from all liability for the performance or observance
     of the covenants and conditions in such lease contained on Lessee's part to
     be performed and observed from and after the date of such assignment;
     provided that the assignee shall have assumed such lease; and provided
     further that notwithstanding the foregoing or any other term or provision
     hereof, the leasehold mortgagee may assign this Lease, in whole or in part,
     or any rights granted hereunder, or delegate to another party any of the
     duties hereunder, without the prior consent of Lessor if, in the reasonable
     judgment of the leasehold mortgagee and the Lessor, such other party has
     such operating capability as shall enable such party to perform the
     obligations of Lessee hereunder. Notwithstanding the foregoing, Lessor's
     approval shall not be required in the event of an assignment or deletion of
     duties hereunder to a party engaged in the business of manufacturing the
     products manufactured by Lessee at the time the leasehold mortgagee
     forecloses upon or otherwise acquires all or part of Lessee's interest or a
     party that engages a management team having no less than ten (10) years of
     experience in such business.

     9.3  Lessor waives and relinquishes any landlord's lien, all rights of
levy, security interest or other interest that Lessor may now or hereafter have,
whether by statute or by common law, in any of the movable property whether for
Basic Rent, Additional Rent or otherwise. The movable property may be installed
in or located on the Land and is not and shall not be deemed to be a fixture or
part of the underlying immovable property but shall at all times be considered
movable property. Lessor disclaims any interest in the movable property and
agrees to assert no claim to the movable property. Lessor acknowledges and
agrees that Lessee may grant a security interest in movable property to an
entity providing financing to Lessee and Lessor acknowledges that Lessee's
lender shall have the right to file Uniform Commercial Code financing statements
against the movable property. Lessor agrees that Lessee's lender or its
representatives may enter upon the Land at any time to inspect or remove the
movable property. Lessor agrees that Lessee's lender, at its option, may enter
the Demised Land for the purpose of repossessing, removing, selling or otherwise
dealing with the movable property. At Lessee's request, Lessor shall execute and
deliver to Lessee within ten (10) business days after receipt of
<PAGE>

Lessee's request therefor, an agreement with Lessee's lender confirming the
rights granted under this Section 9.3.

      9.4 Lessor and Lessee acknowledge and agree that notwithstanding any
other provisions of this Lease to the contrary, including without limitation,
Section 23.9, any leasehold mortgage shall be deemed a third party beneficiary
of the rights contained in Sections 9.2, 9.3 and 9.4 hereof.

                                  ARTICLE 10

                                 Condemnation

     10.1 As used herein, the term "Taking" means a permanent or temporary
condemnation or taking of all or any portion of the Land in any manner for
public or quasi-public use, including but not limited to a conveyance or
assignment in lieu of a condemnation or taking. Except as otherwise provided in
Section 10.4:

          (a)  If a Taking covers the entire Land, this Lease will automatically
terminate as of the earlier of the date of the vesting of title or the date of
dispossession of Lessee as a result of such Taking, provided, however, if, after
either of the aforesaid dates, the condemning authority permits continued
possession, then this Lease shall continue until possession is denied and Lessee
shall pay all rent, if any, due in respect of the Land to the condemning
authority.

          (b)  If a Taking covers only a part of the Land, this Lease will
automatically terminate as to the portion of the Land so taken as of the earlier
of the date of the vesting of title or the date of dispossession of Lessee as a
result of such condemnation or Taking, provided, however, if, after either of
the aforesaid dates, the condemning authority permits continued possession, then
the Lease shall continue until possession is denied and Lessee shall pay all
rent, if any, due in respect of the Land to the condemning authority.

          (c)  If a portion of the Land is taken so as to render the remaining
portion unusable by Lessee for Lessee's business in Lessee's reasonable
judgment, this Lease may be terminated by Lessee as of the earlier of the date
of the vesting of title or the date of dispossession of Lessee as a result of
such Taking, by written notice to Lessor within 60 days following notice to
Lessee of the date on which said vesting or dispossession will occur; and if
Lessee fails to give such written notice to Lessor within said 60-day period,
Lessee's right to so terminate this Lease will be deemed to be irrevocably
waived by Lessee. In the event of a termination pursuant to this Section 10.1,
the provisions of Article 18 shall apply.

     10.2 Lessee will be entitled to any award made for the value of the
leasehold estate or any other rights of Lessee created by or existing under this
Lease and the Lessor shall be entitled to any award made for the residual value
of the real property after the termination of the term of this Lease.

     10.3 Notwithstanding any other provision of this Article 10, if a Taking
occurs with respect to all or any portion of the Land for a limited period of
time, this Lease will not be affected by such Taking. If any such temporary
Taking occurs, Lessee will be entitled to receive
<PAGE>

that portion of any award which represents compensation for the use or occupancy
of the Land during the term of this Lease and shall pay to Lessor the rent due
for the period of time of the Taking, and Lessor will be entitled to receive
that portion of any award which represents the cost of restoration of the Land
and the use and occupancy of the Land after the end of the term of this Lease.

     10.4 Disputes arising under this Article 10 shall be determined by
arbitration pursuant to Article 17.

                                  ARTICLE 11

                            Damage and Restoration

     11.1 If the Improvements are damaged or destroyed by fire or other
casualty, Lessee shall promptly notify Lessor in writing of such damage or
destruction, generally describing the nature and extent of such damage or
destruction. There shall be no abatement of or adjustment to Basic Rent or other
Rent due under this Lease as a result of any damage or destruction.

     11.2 In the event of any damage to or destruction of all or any part of the
Improvements, and whether or not the insurance proceeds on account of such
damage or destruction shall be sufficient for the purpose, Lessee at its
expense, shall either (i) promptly commence and complete the restoration,
replacement or rebuilding of the damaged Improvements, or (ii) if Lessee elects
not to restore or rebuild the damaged Improvements, remove all of the above
ground damaged Improvements from the Land so as to leave same in a level
condition free of all structures and debris.

                                  ARTICLE 12

                     Construction, Changes and Alterations

     12.1 Lessee shall have the right, at its sole cost and expense, at any time
and from time to time during the term of this Lease, to construct improvements
on the Land (which improvements shall immediately upon completion become a part
of the Improvements), and make such changes and alterations (including any
restoration work required or permitted under Article 11) to the Improvements as
Lessee shall deem necessary or desirable in connection with the requirements of
its business, subject to the following conditions which Lessee shall observe and
perform:

          (a) No construction, change or alteration shall be undertaken until
Lessee shall have procured and paid for, so far as the same may be required from
time to time, all municipal permits and authorizations for the construction,
change or  alteration of the various municipal departments having jurisdiction,
and Lessor agrees to join in the application for such permits or authorizations
whenever such action is necessary, provided that Lessee indemnifies Lessor, to
Lessor's reasonable satisfaction, against all claims, losses, damages and
expenses incurred by Lessor in connection therewith.
<PAGE>

          (b) All changes and alterations when completed shall be of such a
character as not to change the character of the Improvements as to use.

          (c) All work done in connection with any construction, change or
alteration shall be done in compliance in all material respects with the
building and zoning laws of the place in which the Improvements are located and
with all laws, ordinances, orders, rules, regulations and requirements of all
Federal, state and municipal governments and the appropriate departments,
commissions, boards and officers thereof, and in accordance with HSE Policies.
The cost of any such construction, change or alteration shall be paid in cash so
that the Property shall at all times be free of liens for labor and materials
supplied or claimed to have been supplied to the Property; and there shall be
maintained workmen's compensation insurance covering all persons employed in
connection with the work and a general liability policy covering all persons and
property, and with respect to whom death or injury claims could be asserted
against Lessor or the Property.

          (d) All improvements, changes and alterations made or installed by
Lessee in or on the Property in accordance with this Lease, other than Lessee's
equipment and trade fixtures, shall immediately upon completion or installation
thereof become a part of the Improvements and subject to the terms of this
Lease. Lessee shall, at Lessee's sole cost and expense, repair (subject,
however, to Section 11.2) any and all damages to the Land arising from the
removal of any Improvements.

          (e) Lessor shall have no obligation to provide any services or
utilities to the alterations, changes or additional improvements, except as
otherwise provided in the SUMF Agreement.

     12.2 Lessor, if requested by Lessee (or required hereunder as a condition
of Lessor's consent) to approve or inspect any design, site plan, plans,
drawings or specifications, or any contract for work or materials, or the method
of performing any work by Lessee or its employees, agents, contractors or
subcontractors (the "Approved Matters"), does not assume any responsibility
and/or liability as to the safety, adequacy, sufficiency, legality or otherwise
of any Approved Matter, which responsibility and/or liability shall be and
remain with Lessee.  Except as otherwise provided in Article 13, neither Lessor
nor its agents, employees and architects, if any, shall be liable to any party
for any loss, claim or demand asserted on account of any Approved Matter.
Further, except as otherwise provided in Article 13, Lessee waives any claims,
damages or causes of action against Lessor arising out of one or more of the
Approved Matters.
<PAGE>

                                  ARTICLE 13

                                Indemnification

     13.1 Damage to Assets and Employees.
          ------------------------------

          (a)  Each party shall, except as provided in Sections 13.6,
13.2(a)(iii) and 13.2(b)(iii) and as set forth in Section 13.2(c), be
responsible for any Loss or Damage (as such terms are defined in the SUMF
Agreement) to such Party's property.

          (b)  Each party shall, except as provided in Section 13.2, be
responsible for any Loss or Damage of such party to any employee of such party.

     13.2 Lessee Indemnity.
          ----------------

          (a)  Subject to the limitations set forth in this Article 13, Lessee
shall be responsible for and shall indemnify, defend and hold harmless the
Lessor from and against the following:

               (i)    any Loss or Damage of Lessor Indemnitees to any of the
     Lessee's Employees attributable to (a) the Lessee's negligence (excluding
     any Loss or Damage attributable to Lessor's negligence) or (b) Lessee's
     Gross Negligence or Willful Misconduct (as such terms are defined in the
     SUMF Agreement);

               (ii)   any Loss or Damage of Lessor Indemnitees to any of the
     Lessor's Employees attributable to the Lessee's Gross Negligence or Willful
     Misconduct;

               (iii)  any Loss or Damage to any of the Lessor's property
     attributable to Lessee's Gross Negligence or Willful Misconduct;

               (iv)   any Loss or Damage of the Lessor Indemnities resulting
     from Third Party Claims attributable to (a) Lessee's negligence or (b)
     Lessee's Gross Negligence or Willful Misconduct;

     provided, however, that Lessee's aggregate liability for any Loss or Damage
     --------  -------
     arising under Section 13.2(a)(ii) or 13.2(a)(iii) shall not (i) in any
     calendar year, exceed 33 1/3% of the amounts payable under the SUMF
     Agreement in the preceding calendar year (in the first calendar year, 33
     1/3% of such amounts for that calendar year); or (ii) for loss resulting
     from any single event, exceed 33 1/3% of such amounts in the calendar year
     in which the Loss or Damage first occurs.

     (b)  Lessor Indemnity. Subject to the limitations set forth in this Article
          ----------------
13, Lessor shall be responsible for and shall indemnify, defend and hold
harmless Lessee from and against the following:

          (i) any Loss or Damage of Lessee Indemnitees to any of Lessor's
     Employees attributable to either (a) Lessor's negligence (excluding any
     Loss or Damage attributable to Lessee's negligence) or (b) Lessor's Gross
     Negligence or Willful Misconduct;
<PAGE>

          (ii)   any Loss or Damage of Lessee Indemnitees to any of Lessee's
     Employees attributable to Lessor's Gross Negligence or Willful Misconduct;

          (iii)  any Loss or Damage to any of Lessee's property attributable to
     Lessor's Gross Negligence or Willful Misconduct; and

          (iv)   any Loss or Damage of Lessee Indemnitees resulting from Third
     Party Claims attributable to (a) Lessor's negligence or (b) Lessor's Gross
     Negligence or Willful Misconduct.

     provided, however, that Lessor's aggregate liability for any Loss or Damage
     --------  -------
     arising under Section 13.2(b)(ii) or 13.2(b)(iii) shall not (i) in any
     calendar year, exceed 33 1/3% of the amounts payable under the SUMF
     Agreement in the preceding calendar year (in the first calendar year, 33
     1/3% of such amounts for that calendar year); or (ii) for loss resulting
     from any single event, exceed 33 1/3% of such amounts in the calendar year
     in which the Loss or Damage first occurs.

     (c)  Each party waives and releases the other party from and against any
and all Loss or Damage to such party's assets resulting from the simple
negligence of the other party and such party shall cause its insurance carrier
to waive all rights of subrogation against the other party as to such Loss or
Damage.

     (d)  For purposes of this Article 13, the following terms shall be defined
as set forth below:

          "Employee" means any employee of the applicable party.

          "Third Party Claim" means any claim initiated by a person (other than
     either party, their Affiliates or their Employees) against an indemnified
     party, any of their respective Affiliates or any of their respective
     Employees.

          "Lessee Indemnitees" means Lessee, its Affiliates, officers,
     directors, employees, agents, servants, and other representatives of each
     of them.

          "Lessor Indemnitees" means the Lessor, its Affiliates, officers,
     directors, employees, agents, servants, and other representatives of each
     of them.

     13.3 A party shall promptly notify the other party of any claim made
against it arising out of matters covered in this Article 13.  Once the
indemnifying party accepts its indemnity obligation, it may, at its own cost,
conduct negotiations for the settlement of any claim made against the
indemnified party, and any litigation that may arise therefrom in such
reasonable manner as the other party shall from time to time approve, such
approval not to be unreasonably withheld.  The indemnified party shall not make
any admission which is prejudicial to the indemnifying party unless the
indemnifying party has failed to accept its indemnity obligations within twenty
(20) days after having been requested to do so.
<PAGE>

     13.4 Notwithstanding anything to the contrary contained in this Lease,
under no circumstance shall a party or any of its Affiliates be held liable to
the other party or any of the other party's Affiliates for any loss of profit,
loss of use, loss of production, loss of contracts or for any other indirect or
consequential damage that may be suffered by the other, or for any special,
exemplary or punitive damages.

     13.5 Any liability of each party to the other under this Article 13 shall
expire two (2) years after the date on which the act giving rise to such party's
liability first occurred, and no claim demand, action or proceeding shall be
brought or initiated by the claiming party thereafter.

     13.6 THE FOREGOING INDEMNITIES SET FORTH IN THIS ARTICLE 13 ARE INTENDED TO
BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND
SCOPE THEREOF NOTWITHSTANDING LOUISIANA'S EXPRESS NEGLIGENCE RULE OR ANY SIMILAR
DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITEES BECAUSE OF THE
SIMPLE OR GROSS NEGLIGENCE (WHETHER SOLE, CONCURRENT, ACTIVE OR PASSIVE) OR
OTHER FAULT OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES.  EXCEPT AS
HEREIN SET FORTH NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY LOSS
OR DAMAGE ARISING UNDER THIS LEASE, EACH PARTY HEREBY WAIVING ALL CLAIMS OR
CAUSES OF ACTION OTHER THAN AS SPECIFIED IN THIS ARTICLE 13, PROVIDED, HOWEVER,
THAT NEITHER PARTY WAIVES ANY CLAIMS, CAUSES OF ACTION OR RIGHTS UNDER THE
ENVIRONMENTAL AGREEMENT.

                                  ARTICLE 14

                            Covenant Against Waste

     Lessee covenants, subject to the terms of this Lease, not to do or suffer
any waste or material impairment of the value of, the Land.

                                  ARTICLE 15

                             Inspection by Lessor

     Lessee agrees to permit Lessor to enter the Property at all reasonable
times on reasonable prior written notice for the purposes of (a) inspecting the
same, including, without limitation, insurance inspections by insurance company
personnel, and (b) performing any work in the Property that may be necessary by
reason of Lessee's default under the terms of this Lease. Nothing herein shall
imply or impose any duty upon the part of Lessor to do any such work which under
any of the terms of this Lease Lessee may be required to perform, and the
performance thereof by Lessor shall not constitute a waiver of Lessee's default
in failing to perform the same.
<PAGE>

                                  ARTICLE 16

                                   Defaults

     16.1 Lessee may, in addition to its other remedies, terminate this Lease in
its entirety in any of the following circumstances:

          (a) if a Bankruptcy Event (as defined in the SUMF Agreement) occurs
     and is continuing in relation to Lessor and Lessor does not provide
     adequate assurances to the Lessee within thirty (30) days of the occurrence
     of the Bankruptcy Event that Lessor will continue to provide all SUMF Items
     to Lessee on the terms and conditions of the SUMF Agreement.

          (b) with no less than twelve (12) months' prior written notice,
     following the decision by the Lessee to discontinue all its operations at
     the Property.

     16.2 Lessor may, in addition to its other remedies, terminate this Lease in
any of the following circumstances:

          (a) if a Bankruptcy Event occurs and is continuing in relation to
     Lessee and the Lessee does not provide the Lessor with adequate assurance
     (such as a priority lien, advance payment or letter of credit) of continued
     payment of Additional Rent due under this Lease within thirty (30) days of
     the occurrence of the Bankruptcy Event;

          (b) if for reason other than Force Majeure, Lessee conducts its
     operations in a manner reasonably believed to be unsafe to either life,
     health, property or the environment so as to disrupt Lessor's business
     conducted at the Adjoining Property or subject Lessor to material HSE risks
     or material risks of violation of governmental requirements, fines,
     penalties, Third Party claims or claims by its employees, and such conduct
     continues for more than ten (10) business days after ninety (90) days prior
     written notice by Lessor to Lessee; provided, however that if the Lessee is
     conducting its operations in compliance in all material respects with HSE
     laws, its operations will be presumed to be safe;

          (c) if Lessee without proper justification defaults in the performance
     of any non-monetary payment obligation or fails to pay any undisputed
     amount of Additional Rent within three (3) months of the date when such
     payment became due, and such failure continues thereafter for a period of
     sixty (60) days after written notice from Lessor.

     16.3 In addition to the foregoing, if Lessee shall default in the payment
of any Imposition or substitute Imposition, in the maintenance of insurance
(subject, however, to Section 11.2), or shall fail to make any other payment or
perform any other act, agreement, covenant, or obligation under this Lease,
Lessor may cure any such default, and the cost thereof together with interest at
the Interest Rate (as defined in the SUMF Agreement) shall be Additional Rent
due from Lessee upon demand.
<PAGE>

                                  ARTICLE 17

                                  Arbitration

     17.1 Any dispute arising out of or in connection with this Lease, including
any question regarding the existence, validity or termination of this Lease,
shall be exclusively processed in accordance with this Article.

     17.2 In the event of a dispute between the parties, the parties shall,
within ten (10) days of a written request by either party to the other party,
meet in good faith to resolve such dispute or differences.

     17.3 Any dispute which cannot be resolved by the parties shall be submitted
to the Monitoring Committee under the SUMF Agreement which shall endeavor to
amicably resolve the dispute.  The parties shall provide the Monitoring
Committee with such information as it reasonably requires to enable it to
determine the issues relevant to the dispute.

     17.4 Any dispute which cannot be resolved by the Monitoring Committee shall
be submitted to the Steering Committee under the SUMF Agreement, which shall
endeavor to amicably resolve the dispute.  The parties shall provide the
Steering Committee with such information as it reasonably requires to enable it
to determine the issues relevant to the dispute.

     17.5 Any dispute which cannot be resolved by the Steering Committee shall
be submitted to mediation before a mediator selected by the Steering Committee.
The parties shall bear their own costs for mediation and the cost of the
mediator shall be borne equally.

     17.6 If the parties are unable to select a mediator within fifteen (15)
days or if the dispute is not resolved as a result of the mediation within sixty
(60) days (or such other period as may be agreed by the parties), either party
may submit the matter to arbitration for final, binding and exclusive settlement
by three arbitrators in accordance with the UNCITRAL Arbitration Rules, with the
President of the ICC Court of International Arbitration to act as the appointing
authority, or any other arbitration provided for in Exhibit A of the SUMF
Agreement, such arbitration to be held in Houston, Texas.  Any arbitration
decision pursuant to this Article 17 shall be final and binding upon the parties
and judgment thereon may be entered in any court of competent jurisdiction.
Costs incurred by the parties in carrying on any arbitration proceeding
hereunder (including reasonable attorneys' fees and arbitration fees) shall be
borne by the nonprevailing party or apportioned by the arbitrator based on
fault.

     17.7 Pending resolution of any dispute between the parties, the parties
shall continue to perform in good faith their respective obligations under this
Lease based upon the last agreed performance demonstrated prior to the dispute,
but in all events to protect HSE.

     17.8 Resolution of any dispute between the parties involving payment of
money by one party to the other shall include payment of interest at the
Interest Rate from the original due date of such amount.

     17.9 Each party shall, in addition to all rights provided herein or
provided by law, be entitled to the remedies of specific performance and
injunction to enforce its rights hereunder.
<PAGE>

     17.10 The fact that the dispute resolution procedures specified in this
Article 17 shall have been or may be invoked shall not excuse any party from
performing its obligations under this Lease, and during the pendency of any such
procedure all parties shall continue to perform their respective obligations in
good faith.

                                  ARTICLE 18

                    Surrender of Improvements; Holding Over

     18.1 Upon the expiration or earlier termination of the term of this Lease
for any reason except a termination pursuant to subparagraph (a) of Section
10.1, at the option of Lessor, Lessee at its sole cost and expense shall
promptly remove all of the Improvements and all personal property located on the
Land.  Further, Lessee shall clean up all contaminants and Hazardous Substances
in soils and groundwater ("Environmental Situation") in accordance with the
Lowest Cost Alternative as set forth below.  The intent of the foregoing is
that, at Lessor's election, Lessee shall surrender the Land to Lessor in a level
condition free of all structures and debris.  Subject to the provisions
regarding the Lowest Cost Alternative as set forth below, Lessee shall surrender
the Property to Lessor free of all contaminants and Hazardous Substances placed
or permitted to be placed by Lessee on the surface of the Land.  Notwithstanding
the foregoing, Lessee shall not be required to remove any paved parking areas,
any interior roadways or any foundations, provided, however, that all such
foundations must be boarded up to avoid constituting a hazard.  Lessee's
obligation to clean up an Environmental Situation shall be limited to the Lowest
Cost Alternative.  The "Lowest Cost Alternative" shall be:

     (A)  (i)    the minimum necessary to comply with any settlement or
                 agreement with the relevant Governmental Entity or Third Party
                 (if applicable); or

          (ii)   the minimum necessary to comply with Environmental Laws as
                 enforced in relation to the relevant Environmental Situation,
                 where no such settlement or agreement is reached; or

          (iii)  where the Governmental Entity having jurisdiction over the Land
                 is not aware of the nature and extent of the relevant
                 Environmental Situation, the minimum necessary to comply with
                 Environmental Laws as they would be very likely to be enforced,
                 if such Governmental Entity were so aware; and

     (B)  so far as within the control of Lessee, be consistent with the
          operations of the same description as conducted by the Lessee at the
          Land prior to the termination of this Lease; and

     (C)  achieved for the lowest financial cost as compared with other
          potential Remediation Activities.
<PAGE>

     Taking no action shall constitute an acceptable Lowest Cost Alternative if,
after investigation, taking no action is determined to be consistent with or
otherwise satisfy the applicable conditions for the Lowest Cost Alternative as
set forth above.

          For the purposes of this Section 18.1, the following definitions shall
apply:

          "ENVIRONMENT" means all air, surface water, groundwater, or land,
     including land surface or sub-surface, including all fish, wildlife, biota,
     flora or fauna and related natural resources.

          "GOVERNMENTAL ENTITY" means any federal, state, local or foreign
     government or any court of competent jurisdiction, regulatory or
     administrative agency or commission or other governmental authority or non-
     commercial instrumentality, domestic or foreign.

          "RELEASE" means any spilling, leaking, pumping, pouring, emitting,
     emptying, discharging, injecting, escaping, leaching, dumping, or disposing
     of Hazardous Substances into the Environment.

          "REMEDIATION ACTIVITIES" means the investigation and remediation of an
     Environmental Situation, including but not limited to soil and groundwater
     sampling, activities associated with the construction, operation,
     maintenance or monitoring of remediation or treatment equipment and
     systems, the investigation, excavation, restoration, remediation, clean-up
     and/or treatment of contaminated soil, groundwater and free product,
     measures to contain, monitor or limit contamination and/or other works in
     relation to any Environmental Situation.

           "Third Party" means any person other than Lessor, Lessee, Resin
     Acquisition, LLC or their respective Affiliates (as defined in the MSA).

     18.2  If Lessee does not surrender possession of the Property at the end of
the term, such action shall not serve to extend the term of this Lease; rather,
Lessee shall be a tenant at sufferance, and during such time of occupancy,
Lessee shall pay to Lessor, as damages, an amount equal to $10,000.00 per month.

                                  ARTICLE 19

                                Quiet Enjoyment

     Lessor covenants that Lessee, upon paying the Rent herein provided for, and
observing and keeping the covenants, agreements and conditions of this Lease on
its part to be kept, shall lawfully and quietly hold, occupy and enjoy the Land
during the term of this Lease without hindrance or molestation of anyone
claiming by, through or under Lessor, but not otherwise.  Lessor represents and
warrants to Lessee that neither the Land nor any of Lessor's right, title or
interest therein is encumbered by a lien.
<PAGE>

                                  ARTICLE 20

                        Excavations and Lateral Support

     If Lessor performs any excavation upon the Land, Lessor will, at its
expense, shore the foundations and exterior walls of the Improvements and do all
other acts or things necessitated by such excavation for the safety and
preservation of the Improvements including, without limitation, compliance with
Lessor's HSE Policies.  If any excavation or other building operation shall be
about to be made or shall be made by any person or entity other than Lessor upon
any adjoining property, street or alley, owned by a person or entity other than
Lessor, Lessee will, at its own expense, shore the foundations and walls of the
Improvements and do all other acts or things necessary for the safety and
preservation of the Property including, without limitation, compliance with
Lessor's HSE Policies.  If any excavation or other building operation by Lessee
shall be about to be made or shall be made upon the Property by any person or
entity other than Lessor, then Lessee shall, at its own expense, assume all
obligations imposed by law on the owner and occupant of the Property, or either
thereof, to protect adjoining property and buildings and structures thereon from
damage, and shall do all acts and things necessary for the safety or
preservation of the Property and the adjoining property and the buildings and
structures thereon and to prevent any claims or liens against Lessor or the
Property. Lessor shall not be liable for any inconvenience, annoyance,
disturbance, loss of business or other damage arising from any such excavation
or building operation and Lessee's obligations hereunder shall not thereby be
affected.

                                  ARTICLE 21

                                  Servitudes

     21.1  Lessor reserves perpetual, non-exclusive servitudes across the Land,
appurtenant to Lessor's adjoining land more particularly described in Exhibit B
                                                                      ---------
attached hereto ("Lessor's Adjoining Property"), for the use and benefit of
Lessor, its successors and assigns, and to the extent designated by Lessor in
writing from time to time Lessor's invitees, licensees, contractors, suppliers,
tenants, and other owners or operators of facilities within Lessor's Adjoining
Property, for the following purposes reasonably related to Lessor's business:
(i) vehicular and pedestrian ingress/egress, over and upon the parking areas,
access ways, entrances and exits, as such are and shall, from time to time, be
developed, altered or modified on the Land; (ii) with notice to Lessee, access
to Lessor's equipment located on the Land and in the Improvements to carry out
the provisions of the SUMF Agreement; and (iii) the installation, maintenance,
operation, replacement, and repair of communication lines, sewer, water, gas,
electric utilities and related facilities, fuel lines and related equipment, and
pipelines, pipe racks, and anything that relates to Lessor's business at
locations reasonably approved by Lessee.  The reservation of servitudes
hereunder may be assigned or sublet to Union Carbide for the same purposes as
set forth in this Section 21.1, and for the location, operation, repair,
maintenance and replacement of Union Carbide's equipment and assets located or
to be located on the Land and commonly referred to as the SHAC and HPRU
facilities.
<PAGE>

     21.2  Lessor grants and conveys to Lessee for the term of this Lease, non-
exclusive servitudes, appurtenant to the Land, on, over and across those
portions of Lessor's Adjoining Property, which portions are as described in
Exhibit C attached hereto, for the following purposes reasonably related to
---------
Lessee's business as set forth in Article 4:  as common areas and driveways, for
vehicular and pedestrian ingress/egress, for the benefit of Lessee, its
employees, invitees, tenants, licensees, contractors, suppliers and permitted
successors and assigns, in common with Lessor and Lessor's employees, invitees,
tenants, licensees, contractors, suppliers, successors and assigns. Lessor (and
others) have the right to use all of such non-exclusive servitudes.

     21.3  Lessor grants and conveys to Lessee for the term of this Lease, non-
exclusive servitudes, appurtenant to the Land, on, over and under Lessor's
Adjoining Property for the following purposes reasonably related to Lessee's
business as set forth in Article 4: for the installation, maintenance,
operation, replacement, and repair of lines, pipes and other conduits for
communication, utilities (e.g., sewer, water, gas and electricity), goods,
services and materials and related facilities.  If any of the communications,
goods, services, utilities or lines, pipes or conduits for them are supplied,
installed or otherwise controlled by Lessor, Lessor grants and conveys to
Lessee, its permitted successors and assigns, the non-exclusive right to use for
the term of this Lease, appurtenant to and coupled with the foregoing servitude,
such lines, pipes and other conduits and related facilities.

     21.4  Lessor grants and conveys to Lessee for the term of this Lease, non-
exclusive servitudes and licenses, appurtenant to the Land, to tap into and use
the storm sewer lines and related facilities located on Lessor's Adjoining
Property for the following purposes reasonably related to Lessee's business as
set forth in Article 4: draining any and all surface water runoff from the Land
and the Improvements which may, from time to time, be located on the Land;
provided however, that in no event shall Lessee be entitled to utilize a
capacity of the storm sewer lines and related facilities in excess of that
currently being utilized based upon the Improvements located on the Land as of
the date of this Lease.

     21.5  Lessor grants and conveys to Lessee for the term of this Lease, non-
exclusive servitudes and licenses, appurtenant to the Land, on, over and under
Lessor's Adjoining Property for the following purposes reasonably related to
Lessee's business as set forth in Article 4: (i) the location, operation and
maintenance of Lessee's dock tanks and  the pipelines that serve Lessee's dock
tanks and (ii) space on Lessor's pipe racks.

     21.6  Notwithstanding anything contained herein to the contrary, Lessor
shall have the right at any time, and from time to time, to in good faith
designate, re-designate, locate and/or re-locate the servitudes referenced
herein to one or more areas in Lessor's Adjoining Property (each being referred
to as a "New Servitude Area" or collectively as "New Servitude Areas") by
written designation (being either in the form of metes and bounds descriptions
of the New Servitude Area(s) or drawings or other written description which
sufficiently locates the same). At such time as a New Servitude Area becomes
effective, the area previously utilized for such servitude (the "Old Servitude
Area") shall be deemed released from the grant(s) of servitudes set forth herein
automatically and without further action of the parties.  Lessor and Lessee,
however, each agree to execute any and all instruments reasonably requested by
the other to reflect of record the identification of the New Servitude Area(s)
and/or the release of the Old Servitude Area(s) from the aforesaid servitudes
including, without limitation, amendment(s) of this Lease.
<PAGE>

     21.7  Lessee shall be entitled to in good faith limit and restrict one or
more areas covered by the servitudes reserved by Lessor pursuant to the
foregoing provisions of this Article 21 to those portions of the servitude areas
on the Land which actually are occupied or reasonably needed by Lessor to occupy
and operate its respective Improvements (each being referred to as a "Revised
Servitude Area" or collectively as "Revised Servitude Areas") by written
designation (being either in the form of the metes and bounds descriptions of
the Revised Servitude Area(s) or drawings or other written description which
sufficiently locates the same).  At such time as a Revised Servitude Area
becomes effective, the area previously utilized for such servitude (the
"Previous Servitude Area") shall be deemed released from the Reservation(s) of
Servitudes set forth herein automatically and without further action of the
parties.  Lessor and Lessee, however, each agree to execute any and all
instruments reasonably requested by the other to reflect the identification of
the Revised Servitude Area(s) and/or the release of the Previous Servitude
Area(s) from the aforesaid servitudes including, without limitation,
amendment(s) of this Lease.

     21.8  Lessee hereby acknowledges and agrees that all servitude rights
granted and conveyed to Lessee pursuant to this Article 21 may only be utilized
in connection with Lessee's use of the Land set forth in Article 4 of this
Lease.

     21.9  The servitudes and rights granted and conveyed to Lessee herein shall
be co-terminous with this Lease.  Upon termination of this Lease, any and all
such servitudes and rights shall automatically terminate and be of no further
force and effect without any action on the part of any party hereto.  The
written declaration of Lessor that this Lease has terminated and thus, the
servitudes and rights granted to Lessee herein have terminated, shall constitute
conclusive evidence to any third party of such terminations.  Notwithstanding
the foregoing, Lessee agrees, upon termination of this Lease, to execute any and
all instruments reasonably requested by Lessor to evidence of record the
termination of such servitudes and rights.

     21.10 Lessor shall, at Lessor's expense, keep such portion of Lessor's
Adjoining Property on which the servitudes granted pursuant to this Article 21
are located in a clean and orderly condition, free of accumulations of dirt,
rubbish, snow, ice and unlawful obstructions.  Lessor shall also keep such
portion of Lessor's Adjoining Property in good order and condition, ordinary
wear and tear excepted, and in accordance with standards followed by Lessor in
maintaining servitudes on all of Lessor's Adjoining Property.

     21.11 Lessor hereby irrevocably consents to the existence and encroachment
on Lessor's Adjoining Property during the term of this Lease of certain of
Lessee's Improvements, as shown on the survey of Landmark Surveying, Inc.
(Network Project No. 20000517/3), dated October 17, 2000, revised on October 30,
2000 and any replacements of such Improvements ("Permitted Encroachments"). No
rent or other compensation shall be payable by Lessee to Lessor therefor. In
addition to the foregoing, Lessor grants and conveys to Lessee for the term of
this Lease, an exclusive servitude of use appurtenant to the Land, on, over or
under Lessor's Adjoining Property for any and all Permitted Encroachments on
Lessor's Adjoining Property, but only so long as the Permitted Encroachments are
no longer utilized by Lessee as a result of (i) reconfiguration of Lessee's
Improvements or (ii) abandonment thereof by Lessee.

     21.12 The servitudes and rights granted herein shall not be conveyed or
assigned except
<PAGE>

in conjunction with the assignment of this Lease.

                                  ARTICLE 22

                                    Notices

     All notices, requests, waivers, demands, directions and other
communications required or permitted to be given under this Agreement shall be
in writing and in English and shall be delivered personally, sent by facsimile
transmission, or e-mail, sent by nationally recognized overnight courier or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the Parties at their addresses set forth below (or such other
address for a Party as shall be specified by like notice form such Party to the
other Party). All such notices and other communications shall be deemed to have
been given and received, (i) in the case of personal delivery, delivery by
facsimile transmission or e-mail, on the date of delivery, if delivered during
business hours on a business day or, if not so delivered, the next succeeding
business day (ii) in the case of delivery by nationally recognized overnight
courier, on the second business day following dispatch and (iii) in the case of
mailing, on the fifth business day following such mailing.

          If to Lessor, to:

          Shell Oil Company
          c/o Shell Chemical Company
          Norco Chemical Plant
          15536 River Road
          P. O. Box 10
          Norco, Louisiana 70079

          Attn.:  Plant Manager
          Facsimile: (504) 465-6310

          with a copy to:

          Shell Oil Company
          c/o Shell Chemical Company
          One Shell Plaza
          910 Louisiana Street
          Houston, Texas 77002

          Attn.:   Vice President of Manufacturing
          Facsimile:  (713) 241-6902
<PAGE>

          with a copy to:

          Shell Oil Company
          c/o Shell Chemical Company
          One Shell Plaza
          910 Louisiana
          Houston, Texas 77002

          Attn.:  General Counsel
          Facsimile:  (713) 241-1170

          with a copy to:

          Shell Corporate Real Estate
          One Shell Plaza
          910 Louisiana Street
          Houston, Texas 77002

          Attn.:  Director of Corporate Real Estate
          Facsimile:  (713) 241-3619

          If to Lessee, to:

          Shell Epoxy Resins LLC
          c/o Shell Chemical Company
          Norco Chemical Plant
          16122 River Road
          P.O. Box 10
          Norco, Louisiana 70079

          Attn.: Site Manager
          Facsimile: (504) 465-6296

          with a copy to:

          Shell Epoxy Resins LLC
          1600 Smith Street, 24/th/ Floor
          Houston, Texas 77002
          Attn:  President
          Facsimile:  (713) 241-5333
<PAGE>

          and:

          Apollo Management IV, L.P.
          1301 Avenue of the Americas
          New York, New York 10019
          Attn:  Scott Kleinman
          Facsimile:  (212) 515-3221

      A party may change its notice details on giving notice to the other Party
of the change in accordance with this Section.  That notice shall only be
effective on the date falling three (3) clear Business Days after the
notification has been received or such later date as may be specified in the
notice as set forth below.  Any such notice so delivered will comply with the
terms of this Section.

                                  ARTICLE 23

                                 Miscellaneous

     23.1  If any term or provision of this Lease or the application thereof to
any person or circumstance shall, to any extent, be invalid and unenforceable,
the remainder of this Lease, or the application of such term or provisions to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and be enforced to the fullest extent permitted by
law.

     23.2  Provisions setting forth obligations or conditions to be performed or
observed by Lessor or Lessee shall be construed as covenants by such Party to
perform or observe the same.

     23.3  The specific remedies to which either Lessor or Lessee may resort
under the terms of this Lease are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which either Party may be
lawfully entitled in case of any breach or threatened breach by the other Party
of any provision of this Lease. The failure of either Party to insist in any one
or more cases upon the strict performance of any of the covenants of this Lease,
or to exercise any option herein contained, shall not be construed as a waiver
or relinquishment for the future strict performance of such covenant or option.
A receipt by Lessor of Rent with knowledge of the breach of any covenant or
agreement hereof shall not be deemed a waiver of such breach, and no waiver,
change, modification or discharge by either Party hereto of this Lease or of any
provision in this Lease, or surrender of the leasehold estate hereby created,
shall be deemed to have been made or shall be effective unless expressed in
writing and signed by both Lessor and Lessee. In addition to the other remedies
in this Lease provided, Lessor and Lessee shall be entitled to restraint by
injunction of the violation, or attempted or threatened violation, of any of the
covenants, conditions or provisions of this Lease or to a decree compelling
performance of any of such covenants, conditions or provisions.

     23.4  The captions of this Lease are for convenience only and in no way
define, limit or describe the scope or intent of this Lease nor in any way
affect this Lease.
<PAGE>

     23.5  This Lease may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original and such counterparts
together shall constitute but one and the same indenture which shall be
sufficiently evidenced by any such executed counterparts.

     23.6  This Lease shall be construed and enforced in accordance with the
laws of the State of Louisiana.

     23.7  It is the intention of the Parties to create only the relationship of
lessor and lessee as to the lease of the Land and the relationship of grantor
and grantee as to the servitudes granted and conveyed.  Nothing in this Lease
shall be construed to make the Parties partners or joint venturers or to render
either Party liable for any obligation of the other.

     23.8  Any terms and provisions of this Lease pertaining to rights, duties
or liabilities extending beyond the expiration or earlier termination of this
Lease shall survive the expiration or earlier termination of this Lease.

     23.9  Unless specifically and expressly provided otherwise in this Lease,
the terms and provisions of this Lease are for the sole benefit of Lessor and
Lessee, and no third party whatsoever, including but not limited to any lender
hereafter supplying financing with respect to the Improvements, is intended to
benefit herefrom.

     23.10 No agreement hereafter made shall be effective to change, modify,
discharge or effect an abandonment of this Lease in whole or in part unless such
agreement is in writing and signed by the Party against whom enforcement of the
change, modification, discharge or abandonment is sought.

     23.11 The covenants and agreements herein contained shall, subject to the
provisions of this Lease, bind and inure to the benefit of the successors and
permitted assigns of the respective Parties hereto.

     23.12 This Lease may not be recorded by Lessee or by anyone acting through,
under or on behalf of Lessee, but Lessee may record a memorandum of this Lease
substantially in the form of Exhibit D attached hereto.
                             ---------

                                  ARTICLE 24

                                    Option

           Notwithstanding anything contained in this Lease to the contrary,
Lessor grants to Lessee the right and option to lease an additional parcel of
land owned by Lessor, said parcel being described in Exhibit E attached hereto
and incorporated herein for all purposes (the "Raw Materials Warehouse Parcel")
                                               ------------------------------
on the same terms and conditions as set forth in this Lease and subject to the
following additional conditions:

           1.   This Lease shall still be in existence.
<PAGE>

           2.   That certain PP Catalyst Plant Agreement and Grant of Personal
                Servitudes dated January 19, 1996, by and between Lessor and
                Union Carbide Corporation shall have, or will have, terminated
                prior to the commencement date of the lease by Lessee of The Raw
                Materials Warehouse Parcel (the "Option Lease Commencement
                Date") or Union Carbide Corporation shall have surrendered its
                occupancy of the improvements located on the Raw Materials
                Warehouse Parcel prior to the Option Lease Commencement Date.

           3.   Lessee shall give not less than 180 days' prior written notice
                to Lessor stating its election to exercise this option and lease
                the Raw Materials Warehouse Parcel and designating the Option
                Lease Commencement Date which shall be on or after 180 days from
                the date such notice is given.

           4.   In the event Lessee exercises such option, this Lease shall be
                amended by written agreement between the parties wherein, among
                other things, the term "Land" shall be amended to include the
                                        ----
                Raw Materials Warehouse Parcel, the exhibits describing or
                depicting the Land shall be amended to include such parcel, and
                the Memorandum of Lease, Reservation and Grant of Servitudes,
                Grant of Option to Lease and Declaration of Separate Ownership
                executed contemporaneously with this Lease, the form of which is
                attached hereto as Exhibit D, shall be amended to reflect the
                exercise of the option and the lease of such parcel and shall be
                recorded. The Lessor shall deliver the Raw Materials Warehouse
                Parcel on the Option Lease Commencement Date free of all
                occupants.

           5.   At Lessor's request, Lessee shall, promptly after the Option
                Lease Commencement Date, remove and relocate at Lessee's expense
                the existing building on the Raw Materials Warehouse Parcel to a
                location designated by Lessor on Lessor's Adjoining Property
                which is proximate to the Raw Materials Warehouse Parcel.

           6.   Each party agrees to execute any and all instruments reasonably
                requested by the other party to carry out the purposes and
                intents of this Article.
<PAGE>

     WITNESS the due execution hereof as of the Effective Date.

                                    SHELL CHEMICAL COMPANY,
                                    on its own behalf and as authorized agent of
                                    Shell Oil Company pursuant to the Chemical
                                    Authorization Agreement dated March 1, 1995,
                                    as Lessor

                                    By:    /s/ D.G. Naugle
                                        ------------------------------
                                    Name:   D.G. Naugle
                                           ---------------------------
                                    Title:  Attorney-In-Fact
                                           ---------------------------

                                    SHELL EPOXY RESINS LLC,
                                    a Delaware limited liability company,
                                    as Lessee

                                    By:    /s/ D.G. Naugle
                                        -------------------------------
                                        Name:   D.G. Naugle
                                               ------------------------
                                        Title:  Attorney-In-Fact
                                               ------------------------<PAGE>

                                                                   Exhibit 10.25

                  AMENDED AND RESTATED AGREEMENT OF SUB-LEASE
                                   (PERNIS)

The undersigned

Shell Nederland Raffinaderij B.V., (formerly named Shell Nederland Raffinaderij
N.V.) a company organised under the laws of the Netherlands, having its offices
at 601 Vondelingenweg, 3196 KK Vondelingenplaat, Rotterdam (hereinafter referred
to as "SNR"), of the one part,

and

Shell Epoxy Resins Nederland B.V., a company organised under the laws of the
Netherlands, having its offices at 601 Vondelingenweg, 3196 KK Vondelingenplaat,
Rotterdam (hereinafter referred to as "Newco"), of the other part,

(A)  Whereas Shell Nederland Chemie B.V. ("SNC") and Newco have executed
     agreements regarding the contribution of the plants for the production of
     Resins and Versatics ("Plants");

(B)  Whereas, SNC and Newco have executed an agreement for the provision by SNC
     of Services, Utilities, Materials and Facilities as amended by that certain
     First Amended and Restated Site Services, Utilities, Materials and
     Facilities Agreement dated the date hereof (the "SNC SUMF Agreement") and
     SNR and Newco have also executed an agreement for the provision by SNR of
     Services, Utilities, Materials and Facilities as amended by that certain
     First Amended and Restated Site Services, Utilities, Materials and
     Facilities Agreement dated the date hereof (the "SNR SUMF Agreement").  The
     SNC SUMF Agreement and the SNR SUMF Agreement are herein referred to as the
     "SUMF Agreements");

(C)  Whereas SNR has leased its premises at 601 Vondelingenweg, Rotterdam, The
     Netherlands ("The Pernis Site") from the municipality of Rotterdam, which
     agreement is attached to this Agreement as Exhibit A ("Lease Agreement");

(D)  Whereas, SNR and Newco have entered into an Agreement of Sub-Lease dated
     October 29, 1999 for a portion of the Pernis site (the "Original Sub-
     Lease");

(E)  Whereas, SNR and Newco desire to amend and restate the Original Sub-Lease
     on the terms contained herein;

(F)  Whereas in accordance with article 15 of the Lease Agreement the
     municipality of Rotterdam has approved the Sub-Lease of the Area (as
     hereinafter defined) which approval is evidenced by a document which is
     attached to this Agreement as Exhibit B.

Accordingly, the parties have agreed to the following Amended and Restated Sub-
Lease (hereinafter referred to as "the Agreement" or "the Sub-Lease"):
<PAGE>

ARTICLE 1.   SUB-LEASE

1.1. SNR hereby grants and Newco hereby takes on by way of sublease two parcels
     of land. One parcel of land contains the Resins Plant and its related
     facilities (the "Resins Parcel") and the other parcel of land contains the
     Versatics Plant and its related facilities (the "Versatics Parcel") with
     both the Resins Parcel and the Versatics Parcel being described in Exhibit
     C hereto (hereinafter referred to collectively as the "Area"). The Area
     forms part of SNR's Pernis Site leased by SNR pursuant to the Lease
     Agreement from the municipality of Rotterdam. The Area shall exclusively be
     used to maintain and operate the Plants or replacement plants with related
     facilities for resins or versatics production. If Newco wishes to change
     the use of either Plant it shall first obtain the consent of SNR, which
     consent shall not be unreasonably withheld or delayed.

1.2. The rent to be paid by Newco to SNR shall be equal to the rent to be paid
     by SNR to the municipality of Rotterdam for the Area, (the "Rent").

ARTICLE 2. COMPLIANCE WITH LEASE AGREEMENT CONDITIONS

2.1. Newco shall be entitled to the same rights and subject to the same
     conditions with respect to use of the Area and conduct of operations
     thereon as are enjoyed by and required of SNR under the Lease Agreement.

2.2. SNR and Newco shall consult with each other in a timely manner with respect
     to such conditions and co-operate with each other to the extent necessary
     or useful to ensure compliance with the Lease Agreement. Notwithstanding
     SNR's audit right under 3.1 of Schedule 1, the Newco shall grant SNR access
     to the Area and facilities thereon for the purpose of assessing proper
     compliance by Newco with such conditions, subject, however, to reasonable
     notice and without interference by SNR in the business operations of Newco.

2.3. If SNR incurs costs or expenses in relation to a claim by a third party or
     incurs third party liability of any nature whatsoever arising out or
     connected with the performance by Newco of this Agreement then Newco shall
     indemnify SNR against such third party liability and costs and expenses
     relating thereto.

ARTICLE 3.  TERM AND TERMINATION

3.1. This Sub-Lease shall be effective as from 1 November, 2000 ("Effective
     Date"). The term of this Sub-Lease shall be for twenty (20) years from the
     Effective Date and Newco shall have the right to three (3) renewal terms of
     five (5) years each; provided, however, that if the term of either or both
     of the SUMF Agreements is extended, the term of the Sub-Lease shall be
     automatically extended for the same time period, but in no event shall the
     extension be for a period of time beyond June 30, 2044. In accordance with
     the Lease Agreement, SNR's current lease of the Pernis Site will expire on
     June 30, 2024. Pursuant to a Renewal Option dated April 9, 1986, SNR has
     the option to renew the Lease Agreement for a further period ending on June
     30, 2044. SNR shall give Newco written notice at least six months prior to
     the expiration of SNR's option to extend the Lease Agreement to June 30,
     2044. If Newco during such six-month notice period gives SNR notice that it
     is extending the Sub-Lease beyond the original term of the Lease (June 30,
     2024) then SNR shall exercise its option to extend the Lease to June 30,
     2044.

                                       2
<PAGE>

3.2.   The Agreement can only be unilaterally terminated by SNR in the following
       cases:

3.2.1. If the Contract of lease between the municipality of Rotterdam and SNR in
       respect of the Area is unilaterally terminated by the former: the
       Agreement shall be terminated at the date on which the Lease Agreement
       terminates.

3.2.2. If the Lease Agreement is not extended by the municipality of Rotterdam
       after the date of its expiration: the Agreement shall be terminated at
       the date on which the Lease Agreement expires.

3.2.3  If Newco does not operate either Plant in accordance with generally
       accepted European industry standards, with the Shell Chemicals Limited
       HSE standards or with other standards as agreed between the Parties and
       with the requirements of Site permits (collectively being referred to as
       "SNR/Pernis Standards" and with any failure to comply referred to as a
       "Non-Compliant Act"), then SNR shall have the right to terminate this
       Agreement if such Non-Compliant Act is not ceased by Newco (x) within ten
       10) days (or such longer period as may be approved in writing by SNR,
       with such approval not to be unreasonably withheld if the total period is
       20 or fewer days) or, (y) if the Non-Compliant Act is in relation to a
       standard adopted after the Effective Date and is not required by any
       relevant Government Authority, within sixty (60) days or (z) if the
       standard is required by a relevant Government Authority, within such
       period as is required by such authority, in each case after delivery of
       written notice to Newco specifically describing such Non-Compliant Act or
       acts and directing Newco to cease such non-compliance ("Non-Compliant Act
       Notice"); provided that in all events the maximum period for ceasing the
       Non-Compliant Act shall not exceed the period prescribed by any relevant
       Government Authority. If Newco has not ceased the Non-Compliant Act
       described in the Non-Compliant Act Notice within the period as above-
       determined, then SNR may terminate this Agreement by delivery of written
       notice to Newco ("Termination Notice"), with such termination being
       effective six months after delivery of the Termination Notice. From and
       after the delivery of any Termination Notice (including, if applicable,
       during any dispute by Newco as to the existence of any Non-Compliant Act)
       Newco shall cease and not continue the conduct giving rise to such
       Termination Notice. If, notwithstanding the delivery of any Termination
       Notice, Newco shall not cease the Non-Compliant Act or Acts, SNR may
       terminate this Agreement with ten (10) days notice or such other shorter
       period of notice as may be prescribed by any relevant Government
       Authority. SNR's right to terminate the Lease Agreement pursuant to this
       Article 3.2.3 is conditional upon the standards referred to above not
       being applied by SNR in a manner which discriminates against Newco's
       operations compared with other operations on the SNR Pernis Site,
       including operations conducted by SNR or an SNR Affiliate. If it is not
       possible to identify other operations on the SNR/Pernis Site that are
       subject to the SNR/Pernis Standards that are being applied to the
       operations of Newco, the enforcement of any such SNR/Pernis Standards
       shall be made by SNR in a manner having the least disruption or
       deleterious effect upon the operations of Newco that are reasonable under
       the circumstances. As of the Effective Date and for twelve months prior
       to that date, it is assumed each Plant was operated with no Non-Compliant
       Act.

                                       3
<PAGE>

3.2.4. If a Bankruptcy Event occurs and is continuing in relation to Newco and
       Newco does not provide SNR with adequate assurance (such as a priority
       lien, advance payment or letter of credit) of continued payment of any
       undisputed amount of any sums owed by Newco under this Sub-Lease within
       thirty (30) days of the occurrence of the Bankruptcy Event;

3.2.5. If Newco without proper justification fails to pay any undisputed amount
       of any sums owed by Newco hereunder within three (3) months of the date
       when such payment became due, and such failure continues thereafter for a
       period of sixty (60) days after written notice from SNR.

3.2.6. If Newco, without SNR's consent (which consent shall not be unreasonably
       withheld), should put the Area to another use than that mentioned in
       Article 1.1.

3.3    Newco may, in addition to its other remedies, terminate this Sub-Lease in
       its entirety or with respect to a portion of the Area with no less than
       twelve (12) months' prior written notice:

      (a)  following the decision by Newco to discontinue all its operations at
           the Plant and the Area, Newco may terminate the Sub-Lease in its
           entirety; or

      (b)  following a decision by Newco to terminate the Versatics Plant
           production at the Site, Newco may terminate the Sub-Lease with
           respect to that portion of the Area on which Newco produces
           Versatics; or

      (c)  following a decision by Newco to terminate the Resins Plant
           production at the Site, Newco may terminate the Sub-Lease with
           respect to that portion of the Area on which Newco produces Resins.

3.4.  In case the Sub-Lease is terminated with respect to the Area, or is
      terminated with respect to either the Versatics Parcel or the Resins
      Parcel, Newco, at its cost, shall place at SNR's disposal the Area (or in
      the case of a termination of either the Versatics Parcel or the Resins
      Parcel, the respective parcel which is the subject of the termination) in
      its Original State reasonable wear and tear and changes made to the
      Original State by Newco in accordance with the terms of this Sub-Lease
      during the term of the Sub-Lease excepted or, at SNR's option, clear off
      the Area and remove all above-ground facilities and installations.

3.5.  Unless SNR or Newco has exercised its option in Article 3.4 to the Area or
      with respect to either the Versatics Parcel or the Resins Parcel if the
      Area or the relevant Parcel is not placed at SNR's disposal in its
      Original State any reasonable expenses made by SNR to restore the Area or
      the relevant parcel to the Original State reasonable wear and tear and
      changes made to the Original State by Newco in accordance with the terms
      of this Sub-Lease during the term of the Sub-Lease excepted, shall be
      refunded by Newco on demand, in accordance with SNR's statement of the
      expenses.

ARTICLE 4  ORIGINAL STATE

4.1.  The Area will be made available to Newco in its current physical condition
      as of the Effective Date (the "Original State"). By taking into use the
      Area, Newco indicates that the Area is in the Original State. Newco is
      obliged to keep the Area in such state and subject to Article 3.4 return
      it to SNR in its Original State, reasonable wear and tear and changes to
      the Original State by Newco during the term of the Sub-Lease excepted.

                                       4
<PAGE>

ARTICLE 5  TAXES ETC.

5.1. All taxes, other impositions and costs arising out of the Lease Agreement
     due in respect of the Area and/or the Plants and not the balance of the
     Pernis Site shall be for Newco's account.

5.2. A fair proportion of all such rates, taxes, assessments, duties, charges,
     impositions and outgoings on the land, shall be divided on a pro rata basis
     based upon the valuation assessed by the governmental authority having
     jurisdiction or if no such valuation assessment has been made, based upon
     the respective square footage of the Area and SNR's Pernis Site. Newco
     shall have the right to withhold from payments to SNR that part of the
     amount of rates, taxes, assessments, duties, charges, impositions and
     outgoings which is disputed by Newco until such dispute is resolved
     pursuant to Article 14 hereof.

ARTICLE 6  RIGHTS OF WAY.

6.1. SNR, also acting on behalf of other third parties vested on the Pernis Site
     (including its contractors), will have the right of way ("recht van
     overpad") to the Area and is entitled to lay and maintain, at locations
     reasonably determined by Newco, pipes, cables etc. through the Area, always
     provided however that no substantial hindrance, interruption of operations
     and/or additional costs are caused for Newco.

6.2. SNR is entitled, subject to Newco's approval, such approval not to be
     unreasonably withheld, to build and maintain new shared facilities (such as
     flares, cooling water towers, etc.) or expand facilities existing on the
     Area always provided however that no substantial hindrance, interruption of
     operations and/or additional costs are caused for Newco and SNR will hold
     Newco harmless accordingly.

6.3. Newco will have the right of way to the Plants and SNR warrants Newco's
     right to have access thereto, subject to Newco adhering to the Pernis Site
     HSE Standards in exercising such right of way.

6.4. Newco and its contractors will have right of way to the Pernis Site and
     Newco is entitled to lay and maintain, at locations reasonably determined
     by SNR, pipes, cables etc., required for the operation of the Plants,
     through the Pernis Site always provided, however, that no substantial
     hindrance, interruption of operations and/or additional costs are caused
     for SNR (including the cost of measures necessary for the protection of the
     health of Newco's personnel, contractors or agents for the execution of
     earth works, which will be for Newco's account) and subject to Newco
     adhering to the Pernis Site HSE Standards in exercising such right of way
     and in laying and maintaining pipes and cables etc.

ARTICLE 7  EMERGENCIES.

7.1. SNR shall be entitled to enter the Area e.g., in case of an emergency such
     as a fire has broken out or an explosion has taken place on the Pernis
     Site, so as to be in a position to take any measures it thinks fit to take.

ARTICLE 8  PAYMENT TERMS

8.1. The amounts that Newco will have to pay to SNR in accordance with this
     Agreement shall be paid in advance on or before the first day of each
     calendar quarter. SNR will invoice Newco accordingly.

                                       5
<PAGE>

     Invoices will be paid within 30 days after date of the invoice. The amounts
     will be increased with the applicable VAT. The parties will jointly opt for
     taxed rent (`belaste verhuur').

ARTICLE 9.  SOIL PROTECTION SERVICES AND ENVIRONMENTAL LIABILITIES

9.1.  SNR agrees to provide and Newco agrees to accept the Soil Protection
      Services (as hereinafter defined) in accordance with the terms and
      conditions set out in Schedule 1 to this Agreement.

9.2.  SNR and Newco agree that the obligations for clean up and environmental
      liability in relation to the Area shall be in accordance with the terms
      and conditions set out in Schedule 1 to this Agreement subject to the
      Environmental Agreement to the extent provided in Article 9.3.

9.3.  Newco and SNR acknowledge that notwithstanding any provision to the
      contrary in this Lease, the provisions of Clause 10.3 of the Environmental
      Agreement between Shell Petroleum N.V. and Shell Epoxy Resins, Inc. for
      the Non-U.S. properties dated the date hereof (the "Environmental
      Agreement") shall apply as between any Seller Indemnified Party (as
      defined in the Environmental Agreement) and SER Indemnified Party (as
      defined in the Environmental Agreement) and any person to whom a transfer
      or assignment is made in accordance with Clause 11.1 of the Environmental
      Agreement. Any obligation or liability of any SER Indemnified Party or
      Seller Indemnified Party under this Agreement shall be without prejudice
      to the rights, if any, of the relevant party to claim Environmental
      Damages (as defined under the Environmental Agreement) under the
      Environmental Agreement. A copy of the Environmental Agreement is attached
      to this Agreement for reference at Exhibit E.

ARTICLE 10. RELINQUISHMENT.

10.1. Newco shall not, without SNR's prior approval, be permitted to relinquish
      all or part of the Area to any third party through leasing, submitting or
      allowing use thereof.

ARTICLE 11 - INTENTIONALLY LEFT BLANK

ARTICLE 12  ASSIGNMENT

12.1  Newco shall be entitled to assign this Sub-Lease to an Affiliate (as
      defined in the SUMF Agreements) or to a lender or lenders for security
      purposes so long as such lender is a bona fide financial institution with
      a business that includes lending money and has a net worth in excess of
      100,000,000 US Dollars, without the prior written consent thereto of SNR
      (and such lender or lenders shall have the right [without such prior
      written consent] to further assign this Sub-Lease in connection with the
      exercise of their rights and remedies pursuant to such security
      agreements). Newco shall provide SNR with notice of such assignment
      promptly after any such assignment, but in any event within sixty (60)
      days of such assignment. Except as provided above in this Section, any
      other assignment of the Sub-Lease by Newco to a third party shall require
      the consent of SNR, such consent not to be unreasonably withheld or
      delayed. Notwithstanding the foregoing, in no event may this Sub-Lease be
      assigned or further assigned without the prior written consent of the
      municipality of Rotterdam. SNR stipulates by way of third party
      stipulation (in Dutch: "derdenbeding") for the benefit of a lender which
      is an assignee of Newco under this Lease, that, in the event of a default
      by Newco under the Lease, it shall accept any curative acts undertaken by
      or at the instigation of such lender as if they had been undertaken by
      Newco.

ARTICLE 13  NOTICES

                                       6
<PAGE>

13.1. All notices, requests, waivers, demands, directions and other
      communications required or permitted to be given under this Agreement
      shall be in writing and in English. This provision shall not prevent
      communications relating to the operations of the Area and the Plants from
      being made in the language spoken in the jurisdiction in which the Area
      and the Plants are situated. Notices may be given in electronic form
      (including facsimile transmission and telex communications and e-mail) and
      shall be delivered personally, sent by facsimile transmission, or e-mail,
      sent by nationally recognized overnight courier or mailed by registered or
      certified mail (return receipt requested), postage prepaid, to the other
      Parties at their addresses set forth in the introductory paragraphs of
      this Agreement (or such other address for a Party as shall be specified by
      like notice from such Party to the other Party) and, in the case of Newco,
      to the attention of the Site Manager, with copies to:

            Shell Epoxy Resins, Inc.
            1600 Smith Street
            24/th/ Floor
            Houston, Texas 77002
            Attention: President
            Telecopy:  (713) 241-5333

            Shell Epoxy Resins Nederland B.V.
            PO Box 606
            3190 AN
            Hoogvliet, Rotterdam
            The Netherlands
            Attention: Wouter W. Jongepier

            Resin Acquisition LLC
            c/o Apollo Management IV, L.P.
            1301 Avenue of the Americas
            New York, New York 10019
            Attention: Scott Kleinman
            Telecopy:  (212) 515-3288

      All such notices and other communications shall be deemed to have been
      given and received, (i) in the case of personal delivery, delivery by
      facsimile transmission or e-mail, on the date of delivery, if delivered
      during business hours on a business day or, if not so delivered, the next
      succeeding business day (ii) in the case of delivery by nationally
      recognized overnight courier, on the second business day following
      dispatch and (iii) in the case of mailing, on the fifth business day
      following such mailing.

13.2  A Party may change its notice details on giving notice to the other Party
      of the change in accordance with this Article 13. That notice shall only
      be effective on the date falling three (3) clear business days after the
      notification has been received or such later date as may be specified in
      the notice. Any notice so delivered will comply with the terms of this
      Article 13.

ARTICLE 14  APPLICABLE LAW AND DISPUTE RESOLUTION.

14.1. This Agreement shall be governed by and construed in accordance with
      Netherlands law.

14.2. Any dispute arising out of or in connection with this Lease, including any
      question regarding the existence, validity or termination of this Lease,
      shall be exclusively processed

                                       7
<PAGE>

      in accordance with this Article 14.

14.3. In the event of a dispute between the parties, the parties shall, within
      (10) days of a written request by either party to the other party, meet in
      good faith to resolve such dispute or differences.

14.4  Any dispute which cannot be resolved by the parties shall be submitted to
      the Joint Operating Committee to be established under the SNR SUMF
      Agreement which shall endeavor to amicably resolve the dispute. The
      parties shall provide the Joint Operating Committee with such information
      as it reasonably requires to enable it to determine the issues relevant to
      the dispute.

14.5  Any dispute which cannot be resolved by the Joint Operating Committee
      shall be submitted to the Steering Committee to be established under the
      SNR SUMF Agreement, which shall endeavor to amicably resolve the dispute.
      The parties shall provide the Steering Committee with such information as
      it reasonably requires to enable it to determine the issues relevant to
      the dispute.

14.6  Any dispute which cannot be resolved by the Steering Committee shall be
      submitted to mediation before a mediator selected by the Steering
      Committee. The parties shall bear their own costs for mediation and the
      cost of the mediator shall be borne equally.

14.7  If the parties are unable to select a mediator within fifteen (15) days or
      if the dispute is not resolved as a result of the mediation within sixty
      (60) days (or such other period as may be agreed by the parties), either
      party may submit the matter to arbitration for final, binding and
      exclusive settlement by three arbitrators in accordance with the UNCITRAL
      Arbitration Rules, with the President of the ICC Court of International
      Arbitration to act as the appointing authority, such arbitration to be
      held in Rotterdam, Netherlands. Any arbitration decision pursuant to this
      Article 14 shall be final and binding upon the parties and judgment
      thereon may be entered in any court of competent jurisdiction. Costs
      incurred by the parties in carrying on any arbitration proceeding
      hereunder (including reasonable attorneys' fees and arbitration fees)
      shall be borne by the non-prevailing party or apportioned by the
      arbitrator based on fault.

14.8  Pending resolution of any dispute between the parties, the parties shall
      continue to perform in good faith their respective obligations under this
      Sub-Lease based upon the last agreed performance demonstrated prior to the
      dispute.

14.9  Resolution of any dispute between the parties involving payment of money
      by one party to the other shall include payment of interest, if any, at
      the Interest Rate (as defined in the SNR SUMF Agreement) from the original
      due date of such amount.

14.10 Each party shall, in addition to all rights provided herein or provided by
      law, be entitled to the remedies of specific performance and injunction to
      enforce its rights hereunder.

14.11 The fact that the dispute resolution procedures specified in this Article
      14 shall have been or may be invoked shall not excuse any party from
      performing its obligations under this Sub-Lease, and during the pendency
      of any such procedure all parties shall continue to perform their
      respective obligations in good faith.

                                       8
<PAGE>

ARTICLE 15  GENERAL.

15.1  This Agreement (together with its Exhibits) constitutes the entire
      agreement between the parties with reference to its subject matter and
      supersedes any agreements, contracts, representations and understandings
      (oral or written) made prior to or at the signing of this Agreement.

15.2  In the event that there is a discrepancy between the provisions of this
      Agreement and the provisions of the Exhibits then in respect of any
      particular Service the provisions of the Exhibit shall prevail.

15.3  No amendment, alteration, modification or waiver of any of the provisions
      of this Agreement or its Exhibits, or the rights or obligations of the
      parties shall be valid and effective unless it:

      a)  is agreed to and signed by each of the parties concerned; and

      b)  specifically refers to this Agreement.

15.4  The headings of Articles and sub-Articles are inserted for convenience
      only and shall not affect the meaning or operation of the Agreement.

                                       9
<PAGE>

IN WITNESS WHEREOF, this Agreement has been executed by duly authorized
representatives of each of the Parties as of the date first above written.

SHELL PETROLEUM N.V.

By: /s/ [ILLEGIBLE]
    ----------------------

Name:_____________________

Title:____________________

SHELL EPOXY RESINS, LLC

By: /s/ [ILLEGIBLE]
    ----------------------

Name:_____________________

Title:____________________

                                       1

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