Document:

exv10w1

Exhibit 10.1

 

 

 

2008 Amended And Restated

Production Agreement

Between

BP Amoco Chemical Company

And

Sterling Chemicals, Inc.

 

Effective as of January 1, 2008

 

 

 

2008 Amended and Restated

Production Agreement

Table Of Contents

	 	 	 	 	 
	 	 	Page
	Article 1 Definitions

	 	 	1	 
	 
	Article 2 The Term
	 	 	10	 
	 
	Article 3 Supply of Acetic Acid
	 	 	15	 
	 
	Article 4 Shipment Instructions
	 	 	17	 
	 
	Article 5 Manufacturing Methods; Changes in Specifications
	 	 	17	 
	 
	Article 6 Payment for Acetic Acid
	 	 	19	 
	 
	Article 7 Product Ownership, Deliveries and Shipments
	 	 	22	 
	 
	Article 8 Testing
	 	 	23	 
	 
	Article 9 Measurement
	 	 	24	 
	 
	Article 10 Storage of Acetic Acid by Company
	 	 	25	 
	 
	Article 11 Operation of Unit and Related Matters
	 	 	26	 
	 
	Article 12 Shut-Downs of the Unit
	 	 	27	 
	 
	Article 13 Insurance
	 	 	29	 
	 
	Article 14 Access to the Unit
	 	 	30	 
	 
	Article 15 Methanol Supply
	 	 	30	 
	 
	Article 16 Special Expenditure
	 	 	32	 
	 
	Article 17 Capital Expenditures
	 	 	33	 
	 
	Article 18 Personnel
	 	 	34	 
	 
	Article 19 Representations and Warranties of the Company
	 	 	34	 
	 
	Article 20 Representations and Warranties of BP
	 	 	35	 

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	 	 	Page
	Article 21 Participation in Negotiations
	 	 	36	 
	 
	Article 22 Access to Information
	 	 	36	 
	 
	Article 23 Semiannual Meetings
	 	 	37	 
	 
	Article 24 Financial Assurances
	 	 	38	 
	 
	Article 25 Arbitration
	 	 	38	 
	 
	Article 26 Confidentiality and Intellectual Property
	 	 	39	 
	 
	Article 27 Events of Default; Other Breaches; Remedies
	 	 	40	 
	 
	Article 28 SEC Reports
	 	 	42	 
	 
	Article 29 Survival
	 	 	42	 
	 
	Article 30 Indemnification
	 	 	42	 
	 
	Article 31 Additional Rights and Liabilities
	 	 	45	 
	 
	Article 32 Force Majeure
	 	 	45	 
	 
	Article 33 Assignments
	 	 	46	 
	 
	Article 34 General
	 	 	48	 
	 
	Exhibits:
	 	 	 	 

	 	 	 
	 

	 	A   Company Fixed Costs
	 

	 	B   Methanol Specifications
	 

	 	C   Acetic Acid Specifications
	 

	 	D   Legal Description of the Land of the Unit
	 

	 	E   Variable Costs
	 

	 	F   Acetic Acid Transfer Price Formula

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2008 Amended and Restated

Production Agreement

          This
2008 Amended and Restated Production Agreement executed August
20, 2008 but
effective as of the Effective Date (as defined below) is by and between BP Amoco Chemical
Company, a Delaware corporation, and Sterling Chemicals, Inc., a Delaware
corporation.

Preliminary Statements

	 	1.	 	BP Amoco Chemical Company (successor in interest to BP Chemicals Inc., an Ohio
corporation) and Sterling Chemicals, Inc. are parties to that certain Second Amended and
Restated Production Agreement dated effective as of August 1, 1996 (as amended, the
“Existing Agreement”).
	 
	 	2.	 	The parties hereto desire to amend the Existing Agreement in certain respects and
to restate the Existing Agreement, as so amended, in its entirety.

          Now, Therefore, in consideration of their mutual promises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Existing Agreement
is hereby amended and restated to read in its entirety as follows:

Article 1

Definitions

          Unless otherwise stated in this Agreement, the following terms shall have the meanings
ascribed to them below, and the following definitions shall be equally applicable to both the
singular and plural forms of any of the terms herein defined:

     2008 Profit Share Adjustment: An amount equal to (i) the aggregate amount of all
2008 Profit Share Installment Payments paid by BP, plus (ii) an amount equal to the aggregate
***** reimbursed by BP during 2008 that pertain to the 2008 Contract Year plus (iii) *****.

     2008 Profit Share Installment Payments. As defined in Section 6.6(b) hereof.

     Acetic Acid: Acetic acid produced in the Unit and meeting the Specifications in
effect from time to time pursuant to this Agreement.

     Acetic Acid Measuring Equipment: Shore tanks located on the Unit for measuring
deliveries of Acetic Acid and Unit Product to be loaded into barges or ships, scales located
at the Plant for measuring deliveries of Acetic Acid and Unit Product to be loaded into tank
trucks and rail cars and any meters and instruments capable of measuring the quantity of
Acetic Acid and Unit Product delivered hereunder, including but not limited to pipeline
meters.

 

 

     Acetic Acid Sales Price: As defined in Section 3.7 hereof.

     Acetic Acid Technology Agreement: That certain Acetic Acid Technology Agreement
dated effective as of August 1, 1986 among BPCL, BP and the Company, as the same may be or may
have been amended from time to time pursuant to the terms thereof.

     Acetic Acid Transfer Price: As defined in Section 3.7 hereof.

     Affiliate: Affiliate of a party shall mean any other person or entity directly
or indirectly controlling or controlled by or under direct or indirect common control with
such party; provided, however, that in no event shall Resurgence Asset Management, LLC or any
of its or its affiliates’ managed funds or accounts be deemed to be an Affiliate of the
Company. For purposes of this definition, “control”, as used with respect to a party, person
or entity, means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such party, person or entity, whether through the
ownership of voting securities, by agreement or otherwise. For purposes of this definition,
the terms “controlling”, “controlled by” and “under common control with” have correlative
meanings.

     After Acquired Assets: As defined in Section 2.2 hereof.

     Agreement: This 2008 Amended and Restated Production Agreement, as the same may
be further amended from time to time pursuant to the provisions hereof.

     Applicable Interest Rate: With respect to any calendar day, an annual rate equal
to the lesser of (i) 2% over the rate of interest in effect for such calendar day as most
recently publicly announced or established by The Chase Manhattan Bank (National Association)
in New York, New York as its “prime rate” and (ii) the maximum non-usurious rate of interest
which may charged under laws applicable to the party to whom such interest is payable.

     Arbitration Notice: As defined in Section 25.1 hereof.

     Barge: That certain barge, identified as M-25, Official No. 527030, to the
extent such barge remains in Acetic Acid or Unit Product service during the Term.

     BP: BP Amoco Chemical Company, a Delaware corporation (and successor in interest
to BP Chemicals Inc., an Ohio corporation and successor in interest to BP Chemicals Americas
Inc.) and its successors and permitted assigns hereunder.

     BPCL: BP Chemicals Ltd., a company registered in England and Wales and an
Affiliate of BP, and its successors and assigns.

     BP Caused Termination: A termination of this Agreement by the Company pursuant to
Section 27.4.

     BP Event of Default: During the Term, (i) the failure by BP to perform any of
its financial obligations hereunder when due, which failure (A) involves an amount in excess
of

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$100,000 in the aggregate and (B) continues for a period of 30 calendar days after the same is
due hereunder, (ii) the failure by BP to perform any other material obligation hereunder or
the failure of BP or BPCL to perform any material obligation under the Acetic Acid Technology
Agreement, in either case, which failure continues for a period of 30 calendar days after
receipt of written notice thereof by BP or BPCL, as applicable, from the Company (or, in the
event such failure cannot be cured within such 30 calendar day period, for such period as is
required to cure such failure provided that BP or BPCL, as applicable, is attempting
diligently and in good faith to cure such failure), or (iii) the inaccuracy in any material
respect of any representation or warranty made by BP in this Agreement.

     BP Opportunity: As defined in Section 34.1(d).

     BP Participation Offer: As defined in Section 34.1(d).

     BP Profit Share: A percentage equal to the difference of 100% less the Company
Profit Share.

     Business Day: A calendar day in the City of Houston, Harris County, Texas, that
is neither a Saturday, Sunday or legal holiday nor a day on which banking institutions in
Houston, Texas or New York, New York are obligated by law to close.

     Capital Expenditures: Expenditures incurred to (i) acquire any asset for use on
the Unit, (ii) add to, modify, replace or improve any asset on the Unit so that (a) the cost
of operations on the Unit is reduced, (b) the capacity of the Unit is increased, (c) the
efficiency of the Unit is improved, (d) the operational safety of the Unit is improved, or
compliance with legal requirements is achieved or maintained, or (e) the product quality or
reliability of the Unit is improved or (iii) replace or improve the Barge or the Rail Cars.

     Capital Project: A project which requires Capital Expenditures.

     Catalyst: Any catalyst or promoter used in the production of Acetic Acid in the
Unit as of the time of determination.

     Claim: As defined in Section 30.3 hereof.

     Company: Sterling Chemicals, Inc., a Delaware corporation, and its successors
and permitted assigns hereunder.

     Company Caused Termination: A termination of this Agreement by BP pursuant to
Section 27.3.

     Company Event of Default: During the Term, (i) the failure by the Company to
deliver Acetic Acid to BP substantially in accordance with the Shipment Instructions for two
consecutive Months (unless such failure is otherwise excused hereunder); provided, however,
that (A) BP provides the Company with written notice within eight Business Days after the end
of each such Month that it believes that the Company has failed to deliver Acetic Acid to BP

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substantially in accordance with the Shipment Instructions and (B) for purposes of this
definition, the parties acknowledge and agree that the delivery of Unit Product rather than
Acetic Acid shall not be considered a failure to deliver Acetic Acid to BP substantially in
accordance with the Shipment Instructions and, consequently, no notice from BP to the Company
shall be required under clause (A) above relating to the delivery by the Company to BP of Unit
Product rather than Acetic Acid, (ii) the failure by the Company to perform any other material
obligation hereunder or the failure of the Company to perform any material obligation under
the Acetic Acid Technology Agreement, in either case, which failure continues for a period of
30 calendar days after receipt of written notice thereof by the Company from BP or BPCL, as
applicable (or, in the event such failure cannot be cured within such 30 calendar day period,
for such period as is required to cure such failure provided that the Company is attempting
diligently and in good faith to cure such failure), including but not limited to delivery of
Unit Product rather than Acetic Acid, or (iii) the inaccuracy in any material respect of any
representation or warranty made by the Company in this Agreement.

     Company Fixed Costs: All actual direct and allocated fixed costs incurred,
sustained or paid by the Company in connection with the production, sale or delivery of Acetic
Acid or Unit Product, including but not limited to the items listed on Exhibit A, and all
fixed costs invoiced to the Company by Praxair under the Praxair Product Supply Agreement;
provided, however, that in no event shall any ***** be included within the term Company Fixed
Costs.

     Company Opportunity: As defined in Section 34.1(e).

     Company Participation Offer: As defined in Section 34.1(e).

     Company Profit Share: As defined in Section 6.6(a) hereof.

     Company Sales Contract: As defined in Section 34.1(c) hereof.

     Company Taxes: Subject to the provisions of Section 34.2(b), all taxes, if any
(other than capital stock, income or excess profit taxes, general franchise taxes imposed on
corporations on account of their corporate existence or on their right to do business within
the state as a foreign corporation, ad valorem and real property taxes and similar taxes),
licenses, fees or charges levied, assessed or made by any governmental authority on the act,
right or privilege of production, transportation, handling, sale, resale or delivery of Acetic
Acid or Unit Product produced, sold or delivered under this Agreement which (i) are measured
by the volume in pounds, value or sales price of, or are otherwise based on producing,
transporting, purchasing, handling, selling, reselling or delivering Acetic Acid or Unit
Product and (ii) are imposed upon and paid by or for the account of the Company.

     Competitor: A person or entity that, as of the date of determination, produces,
sells, markets for sale or brokers the sale of acetic acid in *****, or that licenses
technology or intellectual property anywhere in the world for the construction or operation of
facilities or processes for the commercial manufacture of acetic acid.

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     Contract Year: A period of 12 consecutive Months beginning on the first Day of
January 2008, and beginning on the first Day of January of each subsequent year during the
Term. The period of time from the first Day of January last occurring during the Term until
the last calendar day of the Term, shall be considered to be a Contract Year, with appropriate
pro rations being applied to the relevant matter, figure or calculation, unless otherwise
specifically provided herein.

     *****

     Damages: Any and all damages, cash payments, expenses, obligations, claims,
liabilities, fines, penalties, clean-up or remedial costs, shut-down costs, closure costs,
decommissioning costs, severance costs resulting from or related to a shut-down or closure of
the Unit, repairs or reconstruction costs, costs of investigation, reasonable attorneys’ fees
or court costs, including but not limited to, any such matters arising from Spills or Releases
(except as otherwise provided herein); provided, however, that the term “Damages”
shall not include (i) any consequential, special, incidental, indirect or punitive damages
except to the extent otherwise specifically provided for Section 30.9 or (ii) any of the
foregoing Damages arising from or related to the acetic acid process or acetic acid technology
licensed by BPCL to the Company.

     Day: The 24-hour period commencing at 7:00 a.m. Houston, Texas time on one
calendar day and ending at 7:00 a.m. Houston, Texas time on the following calendar day. The
date of a Day shall be that of its beginning.

     Declaration of BP Default: As defined in Section 27.2 hereof.

     Declaration of Company Default: As defined in Section 27.1 hereof.

     Deemed Total Sales Volume: With respect to any Month, the sum of (i) the
aggregate pounds of Acetic Acid accepted for delivery by BP in such Month, which amount shall
include any Supplied Acetic Acid supplied during such Month, plus (ii) the aggregate pounds of
Acetic Acid sold by the Company in such Month under Section 27.4 or pursuant to Company Sales
Contracts (not including Supplied Acetic Acid), plus (iii) the aggregate number of pounds of
acetic acid sold, transferred or supplied by the Company to other plants or facilities located
on the Plant Site, that is not Supplied Acetic Acid, plus (iv) the aggregate number of pounds
of acetic acid sold, transferred or supplied by the Company to other plants or facilities
located on real estate owned by the Company that is not part of the Plant Site, plus (v)
*****.

     Derivatives: Vinyl acetate monomer and ethyl acetate.

     Early Termination Right: As defined in Section 2.1(a) hereof.

     Effective Date: January 1, 2008.

     Electing Party: As defined in Section 12.3.

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     Estimated Company Profit Share: As defined in Section 6.6(b) hereof.

     Estimated Shipping Instructions: As defined in Section 4.1 hereof.

     Existing Agreement: As defined in the Preliminary Statements of this Agreement.

     force majeure: As defined in Section 32.2 hereof.

     Hazardous Acetic Acid Substances: Acetic Acid, Unit Product, any feedstock or
raw material used in the production of Acetic Acid or Unit Product or any other pollutant,
contaminant, hazardous substance, toxic material or waste used in or resulting from (i) the
operation or maintenance of the Unit, the Barge or the Rail Cars or (ii) the production,
delivery, storage, shipment, disposal or transportation of Acetic Acid, Unit Product or
feedstocks or raw materials for Acetic Acid or Unit Product.

     Indemnified Party: As defined in Section 30.4 hereof.

     Indemnifying Party: As defined in Section 30.4 hereof.

     *****

     Major Capital Item: A Capital Expenditure of $100,000.00 or more.

     Major Acquisition: A purchase of assets or equity interests by the Company or
any Affiliate of the Company or by BP or any Affiliate of BP, or a merger or consolidation of
the Company or any Affiliate of the Company or BP or any Affiliate of BP with or into another
person or entity, or any combination thereof; provided, however, that the average annual
revenues during the immediately preceding three full calendar years from all acetic acid and
Derivatives businesses of the other party to such transaction that are included in such
transaction are less than ***** of the average aggregate annual revenues during the
immediately preceding three full calendar years from all businesses of the other party to such
transaction included in such transaction.

     Major Transaction: A purchase, sale or transfer of assets or equity interests by
BP or any Affiliate(s) of BP, or a merger or consolidation of BP or any Affiliate(s) of BP
with or into another person or entity, or any combination thereof, that involves at least a
majority of the global acetic acid and Derivatives businesses of BP and its Affiliates.

     Methanol: Methanol meeting the specifications set forth on Exhibit B attached
hereto.

     Methanol Delivery Cost: As defined in Section 15.2 hereof.

     Methanol Discount: As defined in Section 15.2 hereof.

     Methanol Measuring Equipment: For Methanol delivered by ship, barge or other
inland or marine vessel, shore tanks located at the Plant for measuring deliveries of
Methanol.

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     Methanol Sales Price: As defined in Section 15.4 hereof.

     Methanol Transfer Price: As defined in Section 15.2 hereof.

     Minimum Sales Volume: ***** pounds of Acetic Acid (or Unit Product) per Month,
provided, however, (i) this figure will be increased by the lesser of (A) ***** pounds of
Acetic Acid (or Unit Product) per Month or (B) 1/12 of the amount by which Unit Capacity is
increased after installation of the D203 column and debottlenecking project DB4.5, and (ii)
the parties will discuss changes to the figure ***** (or any higher figure then in existence)
prior to the time any other expansion to Unit Capacity is approved by the parties.

     Minor Capital Item: A Capital Expenditure of less than $100,000.00.

     Month: The period beginning at 7:00 a.m. on the first Day of a calendar month
and ending at 7:00 a.m. on the first Day of the next succeeding calendar month. The period of
time from 7:00 a.m. on the first Day of the last calendar month occurring during the Term
until the last calendar day of the Term shall be considered to be a Month, with appropriate
pro rations being applied to the relevant matter, figure or calculation, unless otherwise
specifically provided herein.

     Non-Electing Party: As defined in Section 12.3.

     Oiltanking Pipeline: The pipeline constructed after the Effective Date by both
of the parties extending from the Unit to the terminal owned as of the date of signature of
this Agreement by Oiltanking Texas City, LP in Texas City, Texas, pursuant to Section 34.14.

     Permanently Close the Unit: The Unit is closed such that from that point on the
Unit never produces a single pound of Acetic Acid or Unit Product.

     Pipeline: Any pipeline, including the Oiltanking Pipeline.

     Plant: The Company’s petrochemical plant located in Texas City, Texas.

     Plant Pollution: As defined in Section 30.1.

     Plant Site: The real estate that is owned by the Company as of the Effective
Date, on which the Plant is located, and not including any real estate that is acquired by the
Company after the Effective Date.

     Point of Delivery: As defined in Section 7.1 hereof.

     Praxair: Praxair Hydrogen Supply, Inc., a Delaware corporation, and its
successors and assigns.

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     Praxair Facility: That certain facility for the production of carbon monoxide,
hydrogen and steam owned by Praxair and located on a site leased by the Company to Praxair.

     Praxair Product Supply Agreement: That certain Amended and Restated Product
Supply Agreement dated as of January 1, 2006 by and between the Company and Praxair, as the
same may be amended from time to time pursuant to the terms thereof and Article 21.

     Profit: With respect to any Contract Year, ***** Except as otherwise
specifically set forth above, Profit shall be determined in accordance with generally accepted
accounting principles of the United States of America consistently applied.

     Quarter: The period beginning at 7:00 a.m. on the first Day of the Months of
January, April, July and October and ending at 7:00 a.m. on the first Day of the next
succeeding April, July, October and January, respectively. The period of time from 7:00 a.m.
on the first Day of the last calendar quarter occurring during the Term until the last
calendar day of the Term shall be considered to be a Quarter, with appropriate pro rations
being applied to the relevant matter, figure or calculation, unless otherwise specifically
provided herein.

     Rail Cars: Those acetic acid railroad tank cars made available by the Company to
BP pursuant to Section 7.2 hereof to the extent such cars remain in Acetic Acid or Unit
Product service during the Term.

     Repair Election Notice: As defined in Section 12.3.

     Right: The exclusive right of BP to acquire all Acetic Acid or Unit Product
produced by the Company in the Unit.

     Scheduled Shutdown: A period during which the Unit is shut down for the purpose
of a Capital Project, to install equipment acquired by a Special Expenditure or to perform
such maintenance as has been agreed by the parties hereto.

     Semiannual Meetings: The meetings of representatives of the Company and BP to be
held during each March or April and each September or October in each Contract Year (often
referred to by the parties as “control meetings”).

     Settlement Agreement: As defined in Section 34.7.

     Shipment Instructions: As defined in Section 4.1 hereof.

     Special Expenditure: Any expenditure incurred to acquire and install any
significant item of equipment for use on the Unit or in connection with the production and
delivery of Acetic Acid or Unit Product not otherwise defined as a Capital Expenditure or
reimbursed by BP to the Company as a Fixed Cost.

     Specifications: The acetic acid specifications, attached hereto as Exhibit C, as
the same may be changed from time to time by written agreement between BP and the Company.

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     Spills or Releases: Any emission, discharge, release or threatened release or
migration of any Hazardous Acetic Acid Substance in, on, into or upon ambient air, surface
water, ground water or land, or subsurface strata or otherwise, arising in connection with the
operation of the Unit, the Barge, the Rail Cars, or the production, delivery, storage,
shipment, sale, disposal or transportation of Acetic Acid, Unit Product, or feedstocks or raw
materials for Acetic Acid or Unit Product.

     Supplied Acetic Acid: As defined in Section 3.7 hereof.

     Supplied Acetic Acid Credit: As defined in Section 3.7 hereof.

     Supplied Acetic Acid Offset: As defined in Section 3.7 hereof.

     Supplied Hydrogen Credit: The Supplied Hydrogen Credit for any Month shall apply
to any hydrogen supplied to any portion of the Plant from the Praxair Facility (other than the
Unit) and shall be an amount equal to the greater of (i) the amount by which the credit for
Excess Hydrogen (as defined in the Praxair Product Supply Agreement) under the invoice
submitted by Praxair under the Praxair Product Supply Agreement for such Month is reduced as a
result of the use of such hydrogen by the Company (directly or indirectly) and (ii) the amount
received by the Company for such hydrogen from a third party.

     Supplied Methanol: As defined in Section 15.4 hereof.

     Supplied Methanol Credit: As defined in Section 15.4 hereof.

     Supplied Methanol Offset: As defined in Section 15.4 hereof.

     Tank Car: A tank car, including any Rail Car.

     Term: The period from the Effective Date until the expiration or termination of
this Agreement.

     Texas City VAM Facility: The vinyl acetate monomer facility located in Texas
City, Texas owned by Union Carbide Corporation on the Effective Date.

     Third Party Action: As defined in Section 30.3 hereof.

     UAL: The unrecovered accumulated losses suffered by BP resulting from the
inability of BP to receive direct payments related to negative Profits from the Company
pursuant to Section 6.6(c), which (i) with respect to Contract Year 2007, is zero and (ii)
with respect to each subsequent Contract Year shall be (a) if Profit for such Contract Year is
zero or higher, zero and (b) if Profit for such Contract Year is a negative number, such
negative number expressed as a positive number. For example, if Profit for Contract Year 2008
was negative $4 million, then the UAL with respect to Contract Year 2008 would be positive $4
million and, in calculating Profit for Contract Year 2009, $4 million would be subtracted
under clause (ii) of

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the definition of Profit, and, if Profit for Contract Year 2009 was positive $1 million prior
to making the deduction under clause (ii) of the definition of Profit for such Contract Year,
then the UAL with respect to Contract Year 2009 would be $3 million ($1 million minus $4
million expressed as a positive number), and $3 million would be subtracted under clause (ii)
of the definition of Profit for Contract Year 2010.

     Unit: Those certain tracts of real property situated in Texas City, Galveston
County, Texas, as more particularly described on Exhibit D attached hereto and made a part
hereof by reference for all purposes as if copied herein in full, together with all buildings,
improvements and fixtures located and to be located thereon, generally known or referred to as
the Plant’s acetic acid complex, including but not limited to the acetic acid plant,
buildings, storage tanks and all replacements, substitutions, deletions, additions or other
changes thereof or thereto from time to time during the Term as permitted by this Agreement.

     Unit Capacity: The average actual annual production capability of the Unit, as
in effect at any time, which is calculated by estimating the number of Days in a typical Year
the Unit is capable of operating after allowing for downtime for regular maintenance, and
multiplying that number by an amount equal to the Unit’s maximum sustainable daily rate based
on the design feedstock mix, all as agreed in writing by both parties or, in the event of any
disagreement between the parties, as determined pursuant to Article 25. As of the Effective
Date, Unit Capacity is 1.108 billion pounds.

     Unit of Measurement: As defined in Section 9.1 hereof.

     Unit Product: Any acetic acid produced in the Unit which does not meet the
Specifications in effect from time to time pursuant to this Agreement.

     Variable Costs: The actual variable costs incurred, sustained or paid by the
Company in the production, sale or delivery of Acetic Acid or Unit Product including but not
limited to the items listed on Exhibit E and all amounts (other than Company Fixed Costs)
invoiced to the Company by Praxair under the Praxair Product Supply Agreement.

Article 2

The Term

          2.1 (a) This Agreement, during which BP shall have the Right, commenced on August 1, 1986 and
shall, except as otherwise provided herein, continue thereafter until December 31, 2031; provided,
however, that BP shall have the right to terminate this Agreement as of December 31, 2026 (the
“Early Termination Right”) by providing the Company with at least two years’ prior written
notice of its election to exercise the Early Termination Right.

          (b) On or before March 31 of any Contract Year, either party may elect to terminate this
Agreement by providing the other party with a written notice specifying that it is electing to
terminate this Agreement pursuant to this paragraph (b), such termination to be effective as of
December 31 of such Contract Year; provided, however, that a party may not elect to terminate this

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Agreement under this paragraph (b) unless, at the time of such election, (i) Profit (prior to
making the UAL deduction) was zero or negative for each of the immediately preceding two Contract
Years, (ii) Profit (prior to making the UAL deduction) is reasonably expected to be zero or
negative for the Contract Year in which such election is made, (iii) no event of force majeure
under this Agreement lasting more than 30 calendar days shall have occurred in either of the
immediately preceding two Contract Years, (iv) Profit was not impacted in either of the immediately
preceding two Contract Years by a breach by such party of any of its material obligations under
this Agreement and (v) such party is not in breach of any of its material obligations under this
Agreement at the time of such election.

          (c) This Agreement may be terminated (i) by mutual prior written consent of the parties at any
time, (ii) by BP pursuant to the Early Termination Right, (iii) pursuant to paragraph (d) below or
(iv) by either party pursuant to paragraph (b) above, Section 12.3 or Article 27 (in each case,
subject to the terms and conditions contained in such paragraph, Section or Article); provided,
however, that, subject to all applicable limitations as to the date of the effectiveness of such
termination contained in this Section 2.1, Section 12.3 or Article 27, such termination shall
become effective on the date specified in paragraph (d) below or in any required termination notice
(which may not be prior to the date of receipt of such notice), as applicable, or, if no such date
is specified in any such required notice, on the date such notice is received by the
non-terminating party.

          (d) This Agreement shall automatically terminate at and simultaneously with any termination of
the Acetic Acid Technology Agreement.

          (e) Notwithstanding anything to the contrary contained in this Agreement, a termination of
this Agreement for any reason shall not affect any rights or remedies of either party arising out
of any breach of this Agreement prior to such termination.

          2.2 (a) The parties expressly do not by the terms of this Agreement sell, transfer or assign
to the other party any title or interest in the Unit or any other assets or properties other than
Acetic Acid and Unit Product when and as provided herein. BP agrees that it has no ownership
interest in the Unit or any improvements to the Unit made since August 1, 1986, except for the
rights of BP provided in this Section 2.2 with respect to that portion of any Capital Project,
Capital Expenditure or Special Expenditure paid for either directly or through reimbursement by BP
(the “After Acquired Assets”). During the Term, questions have previously arisen regarding
the allocation of certain U.S. federal income tax deductions between the Company and BP. In order
to clarify this situation and avoid confusion on this issue in the future, the parties have agreed
and do hereby agree that:

     (i) at all times from and after August 1, 1986, the Company is the beneficial owner of
the assets acquired from Monsanto Company on August 1, 1986 (i.e., all acetic acid process
units, technology licenses, rail cars and all personal property more particularly described on
Exhibit “B” of the Contract of Purchase and Sale of Real Estate and Personal Property entered
into between the Company and BP, effective August 1, 1986), and therefore the Company is
entitled to all available depreciation or amortization deductions with respect thereto;

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     (ii) BP is not and will not be entitled to any depreciation or amortization or expense
deductions with respect to the assets referred to in clause (i);

     (iii) BP will be entitled to any and all depreciation and amortization or expense
deductions with respect to the After Acquired Assets; and

     (iv) the Company will be entitled to any and all depreciation and amortization or expense
deductions with respect to all of the Unit other than the After Acquired Assets.

The Company and BP will not file claims for refund, or any other form of return with the United
States Internal Revenue Service, or with any governmental unit of any state, based on depreciation
or amortization or expense deductions inconsistent with the agreement reflected in this Section
2.2.

          (b) Upon expiration or termination of this Agreement, BP agrees to sell to the Company and the
Company agrees to purchase from BP, all of BP’s right, title and interest in and to the After
Acquired Assets for an amount equal to BP’s undepreciated book value of the After Acquired Assets
(less any salvage proceeds received from the disposition of After Acquired Assets which salvage
proceeds have been added to gross sales revenue in the calculation of Profit for any Contract Year
hereunder) plus *****, and BP will receive no further payments at the termination of the Agreement
(other than those payments required to be made to BP upon or after such expiration or termination
pursuant to Section 2.3, Section 6.6, Section 6.7, Section 12.3, Article 13 or Article 30);
provided, however, that the amount of BP’s undepreciated book value of the After Acquired Assets
shall be deemed to be zero and no payment shall be made to BP by the Company pursuant to this
Section 2.2 if (i) this Agreement expires on December 31, 2031, is terminated by BP pursuant to the
exercise of the Early Termination Right or is terminated by either party pursuant to Section 2.1(b)
and, in any such case, within six Months after the date this Agreement expires or terminates, the
Company provides written notice to BP of its decision to Permanently Close the Unit (and does
Permanently Close the Unit within three months after the delivery of such notice), (ii) the
termination of this Agreement is a BP Caused Termination, or (iii) this Agreement is terminated
pursuant to Section 12.3. For purposes of calculating the purchase price of the After Acquired
Assets, BP’s undepreciated book basis will be calculated utilizing a ten-year life and straight
line depreciation. BP agrees to execute and deliver to the Company such instruments, in recordable
form, as the Company shall reasonably require at the expiration or termination of this Agreement to
transfer record title to the After Acquired Assets to the Company.

          2.3 Upon the expiration or termination of this Agreement:

     (a) BP will own the Acetic Acid and Unit Product in inventory at the Unit or in transit
and will pay to the Company within 45 calendar days the Company Profit Share on such
inventory, calculated using a sales price equal to the average price of all sales by BP during
the calendar month following such expiration or termination;

     (b) if (i) this Agreement expires on December 31, 2031 or is terminated by BP pursuant to
the exercise of the Early Termination Right, (ii) the termination of this Agreement is a BP
Caused Termination or (iii) this Agreement is terminated by either party pursuant to Section
2.1(b) or Section 12.3 and, in any such case, within six Months after the date this Agreement

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expires or terminates, the Company provides written notice to BP of its election to
Permanently Close the Unit (and does Permanently Close the Unit within three months after the
delivery of such notice):

	 	(A)	 	BP shall reimburse the Company for ***** of all costs and expenses
incurred in connection with closing the Unit, including but not limited to shutdown
costs, dismantling costs, any costs of decontaminating Unit equipment and severance
costs; provided, however, that nothing contained in this clause (A) is intended to
alter the respective obligations and liabilities of BP and the Company for Spills
or Releases or Plant Pollution set forth in Article 30 (which shall exclusively
govern such obligations and liabilities);
	 
	 	(B)	 	the Company will use commercially reasonable efforts to eliminate all
costs associated with the Unit; provided, however, that the Company may incur costs
or expenses in connection with maintaining the Unit or any portion thereof for
future use as a production facility (other than for the production of acetic acid)
but such costs and expenses shall, for purposes of clause (C) below, be deemed to
have been eliminated and not be recoverable from BP;
	 
	 	(C)	 	BP shall, on the first anniversary of such expiration or termination
and on each anniversary of such expiration or termination thereafter until and
including the fifth anniversary of such expiration or termination, pay the Company
an amount equal to ***** of the aggregate amount of annual fixed costs associated
with the Unit that could not be eliminated under clause (B) above (subject to
clause (A) above) during the immediately preceding 12-month period, less, if this
Agreement expires or is terminated under clause (i) or clause (iii) above, the
lesser of (x) 100% of such amount and (y) the UAL for the last Contract Year
hereunder (until the aggregate amount of deductions during such five-year period
for such UAL equals ***** of such UAL); provided, however, that if, at any time
prior to the fifth anniversary of such expiration or termination:

	 	(1)	 	the Company sells, leases or otherwise
transfers (x) the Unit (other than for salvage value), (y) the real
estate upon which the Unit is located (unless such sale lease or other
transfer is for a use other than the production of acetic acid or any
other product using the Unit) or (z) the capacity of the Unit, the
amount thereafter payable by BP pursuant to this clause (C) for any
such 12-month period shall be reduced by an amount equal to the lesser
of (aa) 100% of the amount that would otherwise be payable pursuant to
this clause (C) and (bb) ***** of the proceeds received by the Company
in such 12-month period in connection with such sale, lease or transfer
or which otherwise would have been paid to the Company during such
12-month period but for a deferral of the payment of such amount by the
Company, whether through an affirmative deferral election or through an
unusual or unbalanced payment structure in the transaction itself
(until the

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	 	 	 	aggregate amount of deductions during such five-year period for such
proceeds equals ***** of such proceeds); or

	 	(2)	 	the Company converts the Unit or any portion
thereof to a production unit for any product other than Acetic Acid,
the amount payable by BP pursuant to this clause (C), from and after
the commencement of physical construction of such production unit, for
any such 12-month period shall be reduced by an amount equal to the
lesser of (x) 100% of the amount that would otherwise be payable
pursuant to this clause (C) and (y) 100% of the annual fixed costs
associated with the Unit that could not be eliminated under clause (B)
above that are allocated to such production unit for such 12-month
period (using the same allocation methodology that was used by the
Company to allocate Fixed Costs to the Unit at the time of such
expiration or termination of this Agreement); and

	 	 	 	provided further, that if this Agreement is terminated pursuant to clause (i) or
clause (iii) above and, at any time prior to the fifth anniversary of such
expiration or termination, the Company receives any payment from any third party
(other than BP or an Affiliate of the Company or BP) that is directly or
indirectly related to the Company’s decision to Permanently Close the Unit, the
amount payable by BP pursuant to this clause (C) for each such 12-month period
shall be reduced by an amount equal to the lesser of (x) 100% of the amount that
would otherwise be payable pursuant to this clause (C) and (y) ***** of the
proceeds received from such third party (until the aggregate amount of deductions
during such five-year period for such net proceeds equal ***** of such net
proceeds);

	 	(D)	 	the Company shall pay BP ***** of any salvage proceeds received by the
Company in connection with the dismantling of the Unit (including any After
Acquired Assets); and
	 
	 	(E)	 	any unused Catalyst inventory owned by the Company shall be sold to BP
at fair market value as of the date of such expiration or termination;

     (c) if (i) this Agreement expires on December 31, 2031 or is terminated by BP pursuant to
the exercise of the early Termination Right, (ii) the termination of this Agreement is a
Company Caused Termination or (iii) this Agreement is terminated by either party pursuant to
Section 2.1(b) or Section 12.3, (A) the Company shall reimburse BP for ***** of all costs and
expenses incurred within three months after such expiration or termination in connection with
addressing personnel inefficiencies resulting from such expiration or termination, including
but not limited to severance costs, (B) BP will use commercially reasonable efforts to
eliminate all such costs, (C) the Company shall, on the first anniversary of such expiration
or termination and on each anniversary of such expiration or termination thereafter until and
including the fifth anniversary of such expiration or termination, pay BP an amount equal to
***** of the aggregate amount of such annual costs that could not be eliminated under clause
(B) above during the immediately preceding 12-month period and (D) if the expiration or
termination of

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this Agreement is a Company Caused Termination, any Catalyst inventory owned by the Company
shall be sold to BP at fair market value as of the date of such expiration or termination; and

     (d) at the written request of the Company to be given no later than the earlier of six
months prior to the expiration of the term of this Agreement or 60 days after the receipt or
delivery of any termination notice, as the case may be, BP will thereafter supply any Catalyst
required by the Company to produce acetic acid in the Unit at BP’s then existing market sales
price for such Catalyst and on BP’s standard terms and conditions for the sale of acetic acid
Catalyst to third parties in existence at the relevant time; provided, however, that (i) BP
shall not be obligated to supply such Catalyst pursuant to this paragraph (d) unless BP or any
of its Affiliates (A) is in the business of manufacturing or supplying such Catalyst at the
relevant time and (B) was a supplier of such Catalyst to the Company during the 12-month
period immediately preceding such termination or expiration, (ii) in any event, BP shall only
be obligated to supply Catalyst pursuant to this paragraph (d) in quantities during any
12-month period bearing the same ratio to the total purchases of Catalyst for the Unit during
any 12-month period as the ratio that the quantities of Catalyst purchased for the Unit from
BP bore to the total purchases of Catalyst for the Unit during the 12-month period immediately
preceding such termination or expiration (or, if no Catalyst was purchased during such
12-month period, during the 24-month period immediately preceding such termination or
expiration), and (iii) if BP is not required to supply such Catalyst pursuant to clause (i) or
(ii) above, BP shall provide reasonable assistance to the Company (which shall not include
financial assistance), including but not limited to providing any required consents, to enable
the Company to purchase such Catalyst directly from suppliers of such Catalyst at such time;
and

     (e) at the written request of the Company to be given no later than the earlier of six
months prior to the expiration of the term of this Agreement or 60 days after the receipt or
delivery of any termination notice, as the case may be, BP will thereafter allow the Company
to use the Oiltanking Pipeline; provided, however, that (i) BP owns or controls the use of the
Oiltanking Pipeline at the relevant time and (ii) the Company shall pay BP a reasonable
throughput fee for all Acetic Acid or Unit Product delivered through the Oiltanking Pipeline.

Article 3

Supply of Acetic Acid

          3.1 On the terms and subject to the conditions of this Agreement, commencing on August 1,
1986, BP hereby agrees to receive and pay for and the Company agrees to produce and deliver to BP,
Acetic Acid in such amounts as requested by BP in the manner provided herein subject at all times
to the limitations imposed in Section 3.2 and Section 3.4 hereof.

          3.2 BP and the Company agree that Acetic Acid delivered to the applicable Point of Delivery
hereunder shall be made available to BP under as uniform conditions and rates as possible.
Accordingly, BP shall take delivery of, and the Company shall deliver, Acetic Acid in a manner
commensurate with good operating practices and in accordance with proper maintenance, operating

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and distribution procedures and at as uniform rates of delivery as possible throughout each Quarter
during the Term.

          3.3 Subject to Section 3.1, BP and the Company each agree to give the other reasonable notice
of such party’s desire at any time materially to increase or decrease the quantity of Acetic Acid
deliverable at any particular time hereunder. If either party fails to perform substantially in
accordance with the requirements of the Shipment Instructions, such party shall notify the other
party of the reasons for such failure and the estimated time such failure may continue.

          3.4 The Company shall not be required to expand, upgrade or, except as otherwise expressly
required herein, rebuild the Unit or any other Plant facilities or to purchase acetic acid from
other sources in order to perform its obligations to BP pursuant to the provisions of this
Agreement.

          3.5 BP acknowledges and agrees that, in exchange for the Supplied Hydrogen Credit, the Company
shall be permitted, but shall not be required, to use any Excess Hydrogen (as defined in the
Praxair Product Supply Agreement) produced at the Praxair Facility that is not required for use in
the Unit.

          3.6 The Company acknowledges and agrees that it shall not, on behalf of itself or any other
person or entity, use any carbon monoxide or blend gas produced at the Praxair Facility for any
purpose other than producing Acetic Acid and Unit Product pursuant to this Agreement unless BP
consents to such use in writing, such consent to be granted or withheld by BP in its sole
discretion.

          3.7 In the event that any plant or facility that is located on the Plant Site consumes acetic
acid in its operations, irrespective of whether such plant or facility exists as of the Effective
Date or is subsequently constructed (but not including any plant or facility, irrespective of
whether such plant or facility exists as of the Effective Date or is subsequently constructed, that
is located on real estate that is acquired by the Company after the Effective Date), BP shall
supply to the Company, from and after the later of (a) the date specified in a written request from
the Company to commence such supply and (b) the twelfth Month starting after the receipt of a
written request from the Company to commence such supply, under BP’s standard terms and conditions
for sales of acetic acid to third parties (other than payment), all such quantities of acetic acid
as are required by such plant or facility (all such acetic acid, “Supplied Acetic Acid”) at
a price per pound (the “Acetic Acid Transfer Price”) determined by the formula indicated on
Exhibit F attached hereto for the Month of delivery of such Supplied Acetic Acid; provided,
however, that (i) the obligation of BP to supply such Supplied Acetic Acid shall not exceed *****
pounds per year unless BP agrees in writing to supply such excess (such agreement to be granted or
withheld in BP’s sole discretion); and (ii) if, as of the date that BP receives such written
request from the Company to commence such supply, BP is supplying acetic acid to another customer
in ***** that produces the same derivative product as produced by such plant or facility located on
the Plant Site at a higher delivered price than the price per Exhibit F, then such higher delivered
price will apply to such Supplied Acetic Acid and be the Acetic Acid Transfer Price instead of the
price per Exhibit F. The Supplied Acetic Acid delivered during a Month multiplied by the Acetic
Acid Transfer Price for that Month equals the “Supplied Acetic Acid Offset” for that Month.
The Company shall use such Supplied Acetic Acid in such plant or facility or sell such Supplied
Acetic Acid to the owner of such plant or facility at a price per

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pound ***** (the “Acetic Acid Sales Price”). During any Month that the Company sells such
Supplied Acetic Acid, the credit (the “Supplied Acetic Acid Credit”) for such Month shall
be any positive amount resulting from multiplying the pounds of such Supplied Acetic Acid sold by
the Company during such Month by the amount (if any) by which the Acetic Acid Sales Price for such
Month exceeds the Acetic Acid Transfer Price for such Month.

Article 4

Shipment Instructions

          4.1 At business team meetings and Semiannual Meetings, BP shall provide written notice to the
representatives of the Company at such meetings, setting forth BP’s estimated shipment instructions
for Acetic Acid for the coming Quarter (the “Estimated Shipping Instructions”). BP shall
also provide written notice to the relevant Company operations personnel setting forth BP’s
requested dates, quality requirements and volumes of deliveries and shipments of Acetic Acid for
the coming Month (the “Shipment Instructions”) as BP obtains actual order information from
customers. In addition, BP and the Company will communicate, as needed, to ensure that production
rates at the Unit will be sufficient to meet the Shipment Instructions.

          4.2 In addition to the Estimated Shipping Instructions and the Shipment Instructions, BP may
deliver to the Company from time to time additional shipping instructions for Acetic Acid. All
such instructions with respect to any particular shipment shall be given as early as is practicable
prior to the requested shipment date. The Company shall use commercially reasonable efforts to
deliver Acetic Acid at the times specified in such instructions.

          4.3 To the extent required hereunder, the Company shall comply with the requirements of
governmental authorities having jurisdiction now in force or which may hereafter be in force
pertaining to the operation of the Unit and the production of Acetic Acid or Unit Product and shall
faithfully observe in all material respects in the use and operation of the Unit all applicable
laws and regulations now in force or which may hereafter be in force.

Article 5

Manufacturing Methods; Changes in Specifications

          5.1 The Company shall produce Acetic Acid in accordance with established procedures and
methods of manufacture.

          5.2 Prior to making any change in raw materials or in the procedures or methods of manufacture
employed in producing Acetic Acid hereunder which the Company has, or should have, reason to
believe may make such Acetic Acid unsuitable to any of BP’s customers, the Company will provide BP
with written notice of the Company’s intent to make any such change. If the Company fails to
notify BP in writing of the Company’s intent to make any such change, or if the Company notifies BP
in writing of the Company’s intent to make any such change and BP does not consent to such change
in writing, and the Company thereafter makes such change, the Company shall indemnify and hold BP
harmless pursuant to the provisions of Article 30 hereof from Damages

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which BP may suffer or incur by reason of such change that arise out of or relate to the
unsuitability of such Acetic Acid to any of BP’s customers. If the Company notifies BP in writing
of the Company’s intent to make any such change and BP consents in writing to such change, BP shall
indemnify and hold the Company harmless pursuant to the provisions of Article 30 hereof from
Damages which the Company may suffer or incur by reason of such change and that arise out of or
relate to the unsuitability of such Acetic Acid to any of BP’s customers.

          5.3 If, at any time, any Acetic Acid to be supplied to BP changes in chemical composition from
that previously supplied to BP by the Company hereunder, or the procedures and methods of
manufacture employed in producing Acetic Acid hereunder change so that, in either event, such
Acetic Acid is unsuitable to any of BP’s customers, then (a) BP shall notify the Company in writing
of such unsuitability and may thereafter refuse to accept shipments of Acetic Acid hereunder, and
(b) the Company shall indemnify and hold BP harmless pursuant to the provisions of Article 30
hereof from Damages which BP may suffer or incur by reason of any such change or changes that arise
out of or relate to the unsuitability of such Acetic Acid to any of BP’s customers; provided,
however, that the Company shall not be obligated to indemnify BP for any such Damages to the extent
that the change in chemical composition, procedures or methods of manufacture that caused such
Acetic Acid to be unsuitable for any of BP’s customers resulted from implementing any written
directions of BP or was done with the written consent of BP. If, notwithstanding the unsuitability
of Acetic Acid to BP’s customer, BP notifies the Company in writing of its acceptance of such
shipment of Acetic Acid notwithstanding such unsuitability, then BP shall indemnify and hold the
Company harmless pursuant to the provisions of Article 30 hereof from Damages which the Company may
suffer or incur that arise out of or relate to the unsuitability of such Acetic Acid to such
customer.

          5.4 If any product produced by the Company in the Unit fails to meet the Specifications, in
whole or in part, and is delivered to BP as if it were Acetic Acid, the Company shall indemnify and
hold BP harmless pursuant to the provisions of Article 30 hereof from Damages which BP may suffer
or incur by reason of any such failure unless (a) the Company notifies BP of such failure in
advance and BP agrees in writing to accept such Unit Product notwithstanding such failure or (b)
after obtaining knowledge of such failure, BP agrees in writing to accept such Unit Product
notwithstanding such failure. If any product produced by the Company in the Unit fails to meet the
Specifications, in whole or in part, and is delivered to BP as if it were Acetic Acid and (i) the
Company notifies BP of such failure in advance and BP agrees in writing to accept such Unit Product
notwithstanding such failure or (ii) after obtaining knowledge of such failure, BP agrees in
writing to accept such Unit Product notwithstanding such failure, BP shall indemnify and hold the
Company harmless pursuant to the provisions of Article 30 hereof from Damages which the Company may
suffer or incur by reason of such failure.

          5.5 The Specifications shall not be changed unless agreed to in advance in writing by BP and
the Company.

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Article 6

Payment for Acetic Acid

          6.1 The charge for all Acetic Acid delivered to BP hereunder during each Month shall equal:

     (a) The Company Fixed Costs for such Month; plus

     (b) The Variable Costs for such Month; minus

     (c) The sum of (i) the Supplied Hydrogen Credit for such Month, plus (ii) the Supplied
Acetic Acid Offset for such Month, plus (iii) the Supplied Acetic Acid Credit for such Month,
plus (iv) the Supplied Methanol Offset for such Month, plus (v) the Supplied Methanol Credit
for such Month.

          6.2 On the later of the 15th calendar day of each Month or five Business Days after
receipt of the invoice therefor (or if either such day is not a Business Day, then on the Business
Day next following), BP shall pay the Company the estimated Company Fixed Costs for such Month,
which shall be an amount equal to the actual Company Fixed Costs for the preceding Month.

          6.3 The Company shall, as soon as available each Month but no later than the fifth Business
Day of each Month, deliver to BP an invoice for the preceding Month showing (a) the quantities of
Acetic Acid and Unit Product produced during such Month, (b) the quantities of Acetic Acid and Unit
Product delivered during such Month, (c) beginning and ending Acetic Acid and Unit Product
inventories for such Month, (d) the quantities of Methanol received during such Month, (e) the
quantities of Methanol used during such Month, (f) the beginning and ending Methanol inventories
for such Month, (g) the quantities of carbon monoxide used during such Month, (h) the amount of the
Variable Costs for such Month, (i) the amount of the Supplied Hydrogen Credit for such Month, (j)
the quantities of Supplied Acetic Acid supplied to the Company, and the quantities of Supplied
Acetic Acid sold by the Company, during such Month, (k) the amount of the Supplied Acetic Acid
Offset and Supplied Acetic Acid Credit for such Month, (l) the quantities of Supplied Methanol
supplied to the Company, and the quantities of Supplied Methanol sold by the Company, during such
Month, and (m) the amount of the Supplied Methanol Offset and Supplied Methanol Credit for such
Month. BP shall pay each such invoice on or before the 15th day of such Month (or if such day is
not a Business Day, on the Business Day next following).

          6.4 As soon as is practicable after the end of each Month, the Company shall submit to BP an
invoice showing an adjustment to the Company Fixed Costs for such Month based on the difference
between the estimated Company Fixed Costs paid by BP as referenced in Section 6.2 hereof and the
actual Company Fixed Costs due for such Month based on any adjustments thereto necessary to fully
reimburse the Company for all Company Fixed Costs for such Month. The net sum due to the Company
or any credit due to BP resulting from the items referred to in this Section 6.4 shall be paid or
credited, as the case may be, on or before the later of the 15th day of the Month in which such
invoice is submitted by the Company to BP or five Business Days after receipt by BP of such invoice
(or if either such day is not a Business Day, on the Business Day next following).

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          6.5 The Company and BP shall cooperate in investigating, evaluating and implementing mutually
agreeable methods to reduce the Variable Costs and the Company Fixed Costs.

          6.6 (a) Commencing on the Effective Date through the expiration or termination of this
Agreement, BP shall pay to the Company in cash an amount equal to ***** of any Profit as an
additional fee hereunder (such ***** share being the “Company Profit Share”), payable in
accordance with this Section 6.6.

          (b) BP shall, on or before the first day of each of January 2008, April 2008 and July 2008,
pay the Company ***** as an advance payment of the Company Profit Share for the 2008 Contract Year
(the “2008 Profit Share Installment Payments”). The Company acknowledges that, as of the
time it is executing this Agreement, it has received all of the 2008 Profit Share Installment
Payments. BP shall (i) on or before the last Business Day of April, July and October of each
Contract Year, prepare in good faith and deliver to the Company an estimate of the Company Profit
Share, if any, which will be payable to the Company with respect to the applicable Contract Year
(the “Estimated Company Profit Share”), (ii) on or before the last Business Day of October
2008, pay the Company an amount equal to (A) such Estimated Company Profit Share for the 2008
Contract Year times 25%, minus (B) ***** (such ***** deduction being in full payment and
satisfaction for *****) and (iii) on or before the last Business Day of April, July and October of
each Contract Year, commencing with the 2009 Contract Year, pay the Company an amount equal to (A)
such Estimated Company Profit Share times a fraction, the numerator of which is the number of
Quarters elapsed in such Contract Year and the denominator of which is four, minus (B) the
aggregate amount of payments towards the Company Profit Share for such Contract Year previously
made by BP to the Company. On or before March 1 of each year, commencing with March 1, 2009, BP
shall send to the Company a final statement showing the actual Company Profit Share for the
immediately preceding Contract Year and:

     (x) if actual Company Profit Share for the immediately preceding Contract Year exceeds
the aggregate amount of Estimated Company Profit Share payments previously made by BP towards
the Company Profit Share for such Contract Year plus, with respect to the 2008 Contract Year,
the 2008 Profit Share Adjustment, the additional amount to be paid by BP (which amount shall
be the actual Company Profit Share for the immediately preceding Contract Year minus (1) the
aggregate amount of Estimated Company Profit Share Payments previously made by BP towards the
Company Profit Share for such Contract Year plus (2) with respect to the 2008 Contract Year,
the 2008 Profit Share Adjustment); or

     (y) if actual Company Profit Share for the immediately preceding Contract Year is less
than the aggregate amount of Estimated Company Profit Share payments previously made by BP
towards the Company Profit Share for such Contract Year, the amount to be refunded by the
Company to BP (which amount shall be the lesser of (1) the amount by which the aggregate
amount of Estimated Company Profit Share payments previously made by BP towards the Company
Profit Share for such Contract Year exceeds the actual Company Profit Share for such Contract
Year and (2) the aggregate amount of Estimated Company Profit Share payments previously made
by BP towards the Company Profit Share for such Contract Year).

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In the event that the final statement shows an additional amount to be paid by BP, BP shall pay the
Company such amount on or before March 1 of the relevant year. In the event that the final
statement shows an amount to be refunded by the Company, the Company shall pay BP such amount on or
before the later of March 1 of the relevant year and the 15th calendar day after receipt
of such final statement from BP.

          (c) The parties acknowledge and agree that, in the event that UAL for any Contract Year is
greater than zero, BP shall not, except as otherwise provided in Section 12.3, be entitled to any
direct payment related to such UAL from the Company, but (i) BP shall be entitled to offset *****
of the UAL for the last Contract Year hereunder (unless such expiration or termination is a BP
Caused Termination) against any amounts owing to the Company pursuant to, and subject to the terms
of, Section 2.3(b)(C), and (ii) such UAL will be deducted under clause (ii) of the definition of
Profit in the immediately succeeding Contract Year. In addition, nothing contained in this
paragraph (c) is intended to eliminate, reduce or otherwise limit the obligation of the Company to
make any payment to BP required under Section 6.6(b)(y), Section 6.7 or Article 13, none of which
shall be considered a “direct payment related to such UAL.”

          (d) The Company will be reimbursed by BP for all costs of Minor Capital Items and the costs of
all Major Capital Items will be shared in accordance with the Profit sharing ratios in effect
during the period (i.e., the Company shall invoice BP for ***** of such Major Capital Items).

          6.7 If BP has reason to dispute the accuracy of any invoice submitted to it by the Company, BP
will pay the undisputed portion of such invoice in full and 50% of the disputed portion of such
invoice in accordance with the provisions of this Article 6. After any such dispute has been
resolved, BP will pay any balance due to the Company or the Company will pay any balance due to BP,
as the case may be, on or before the tenth Business Day after the receipt by BP of a replacement
invoice submitted to it by the Company, together with interest thereon at the Applicable Interest
Rate, accruing each calendar day from the calendar day such amount was originally due to the
Company or was paid by BP, as the case maybe, until the calendar day such amount is paid or
refunded in full; provided, however, that in the event that any balance is due to BP, such
replacement invoice shall be submitted to BP no later than ten Business Days after such dispute has
been resolved.

          6.8 Each party shall maintain records and production data in accordance with usual and
customary practices and standards in the chemicals industry in respect of all matters referred to
in this Article 6. Each party shall provide the other party access to such records and data
pursuant to the provisions of Article 22 hereof.

          6.9 The suspension of the obligations of either party hereunder by reason of a force majeure
event shall not suspend BP’s obligation to make the payments required hereunder.

          6.10 In the event that either party fails to pay any undisputed amount when due hereunder,
such amount shall bear interest at the Applicable Interest Rate, accruing each calendar day from
the calendar day such amount was originally due until the calendar day such amount is paid in full.

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Article 7

Product Ownership, Deliveries and Shipments

          7.1 Title to all Acetic Acid and Unit Product shall automatically vest in BP from the moment
of initial production, and all Acetic Acid and Unit Product produced in the Unit shall at all times
remain 100% owned by BP (other than any Acetic Acid or Unit Product produced by the Company for
sale by itself pursuant to Section 34.1(c)). Solely for purposes of establishing BP’s title to and
ownership of all Acetic Acid and Unit Product produced in the Unit, the Company shall execute and
deliver to BP an information UCC financing statement or other necessary documents in a form
reasonably acceptable to BP and any renewals thereof as reasonably requested by BP to reflect such
BP ownership of Acetic Acid and Unit Product as a matter of public record. The point of transfer
of custody (the “Point of Delivery”) from the Company to BP of any Acetic Acid or Unit
Product for purpose of offsite shipment shall be (a) the first intake flange on the ship, barge or
other inland water or marine vessel into which the Acetic Acid or Unit Product is loaded for
shipment, (b) the perimeter boundary line of the Plant with respect to any Tank Car, tank truck or
other conveyance into which the Acetic Acid or Unit Product is loaded for shipment or (c) with
respect to any Acetic Acid or Unit Product delivered by Pipeline, the first inlet flange of the
Pipeline used to effect such delivery of Acetic Acid or Unit Product. Risk of loss shall pass to
BP at such flange or perimeter boundary line, as the case may be (irrespective of whether the
Company owns or has provided any ship, barge, other inland water or marine vessel, Tank Car, tank
truck or other conveyance into which the Acetic Acid or Unit Product is loaded or whether the
Company owns any interest in any Pipeline used to effect such delivery). As between the Company
and BP, except as otherwise provided in Section 7.2 hereof, the Company shall be in control and
possession of the Acetic Acid or Unit Product produced hereunder and responsible for any damage or
injury caused thereby until risk of loss with respect thereto has passed to BP. In addition to its
other obligations hereunder, BP shall be in control and possession of the Acetic Acid or Unit
Product produced hereunder and responsible for any damage or injury caused thereby after risk of
loss with respect thereto has passed to BP.

          7.2 Subject to the terms and conditions of this Agreement and to normal and customary shipping
practices, the Company shall make available to BP at all times hereunder the Barge and the Rail
Cars for movement of the Acetic Acid or Unit Product, except when the Barge or the Rail Cars are
being stored or used under instruction for BP (or being used by the Company to transport Acetic
Acid or Unit Product produced by the Company for sale by itself pursuant to Section 34.1(c), in
which case the parties will share the use of these assets in good faith), provided that the
Estimated Shipping Instructions, the Shipment Instructions or any additional shipping instructions
state (a) the number of Rail Cars required by BP and the date(s) on which the same are required,
(b) the date(s) on which the Barge is required, (c) transfer, connection and dispatch instructions,
and (d) such other information as may be reasonably required by the Company. BP shall reimburse
the Company for the costs of regular maintenance and repair of the Barge and the Rail Cars and
in-Plant loading and switching charges and other normal expenses with respect to the ownership and
operation thereof as Company Fixed Costs. In the event that the Barge or any of the Rail Cars are
used by or at the direction of the Company for any purpose other than the movement of Acetic Acid
or Unit Product for BP, the Company shall forward any net proceeds it receives in connection with
such use to BP, and such net proceeds shall be included in the calculation of Profit for the
Contract Year in which

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such use occurred. The Company shall not be required to pay any Capital Expenditures with respect
to the Barge or the Rail Cars unless BP is obligated to reimburse the Company therefor as provided
in Article 16 or Article 17 hereof. The use of the Barge or any Rail Car by BP shall not affect or
alter the Point of Delivery hereunder or the time of the passing of risk of loss with respect to
the Acetic Acid or Unit Product. The Company shall have no liability for any loss, damage, injury
or other event or occurrence involving the Barge or any Rail Car other than loss, damage or
injuries resulting solely from the gross negligence or willful misconduct of the Company, its
agents or employees. BP will use commercially reasonable efforts to use any excess Rail Cars
within its system for other products, crediting the Profit with agreed sublease fees.

          7.3 BP may from time to time request that the Company arrange the delivery and transportation
of Acetic Acid or Unit Product in accordance with the Shipment Instructions or any additional
shipping instructions referred to in Section 4.2 hereof and the Company may at its option comply
with any such request of BP; provided, however, that the Company shall have no liability or other
obligation with respect to its having arranged the delivery and transportation of any Acetic Acid
or Unit Product pursuant to this Section 7.3. If the Company, in arranging for the delivery and
transportation of Acetic Acid or Unit Product pursuant to this Section 7.3, earns or realizes
discounts or other cost savings as a result of aggregating shipments or by reason of other
economies of scale, such discounts and other cost savings shall be proportionately shared with BP
on the basis on which such discounts and other cost savings were earned or realized by the Company.
BP shall reimburse the Company for any additional costs incurred by the Company in the performance
of any request of BP pursuant to the provisions of this Section 7.3.

Article 8

Testing

          8.1 The Acetic Acid and Unit Product shall be tested prior to delivery to BP under the testing
procedures and schedules being utilized by the Company at the Effective Date. Such procedures and
schedules may be changed from time to time by mutual agreement of BP and the Company. The Company
shall retain representative samples for sufficient time to allow delivery to and acceptance by BP’s
customers of Acetic Acid or Unit Product. The Company shall provide BP access to such samples and
all records maintained by the Company with respect thereto pursuant to the provisions of Section
22.1 hereof.

          8.2 Confirmatory tests of the quality of Acetic Acid or Unit Product shipments shall be
performed prior to the time of delivery according to the procedures and schedules referred to in
Section 8.1 hereof. Quality of Acetic Acid or Unit Product shall be determined by taking
representative samples from static shore tanks (in the presence of an independent surveyor if
requested). Once the quality of the contents of such static shore tank has been tested, multiple
deliveries from such static shore tank may be made by Pipeline, ship, barge, other inland or marine
vessel, Tank Car, tank truck or other conveyance; provided, however, that no additional Acetic Acid
or Unit Product shall be deposited into such static shore tank unless the contents thereof are
re-tested prior to delivery of any Acetic Acid or Unit Product therefrom. The Company shall retain
all such samples for sufficient time to allow delivery to and acceptance by BP’s customers of such
Acetic Acid or Unit Product. The Company shall provide BP access to such samples and
certifications and

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all records maintained by the Company with respect thereto pursuant to the provisions of Section
22.1 hereof.

          8.3 All product made pursuant to the provisions of this Agreement when tested according to the
agreed procedures and schedules shall be conclusively presumed to constitute Acetic Acid unless
analysis of the sample retained pursuant to the provisions of Sections 8.1 or 8.2 hereof shows the
product not to have been Acetic Acid.

          8.4 BP shall have the right, at BP’s expense, to have the Acetic Acid or Unit Product tested
by independent third parties prior to shipment as Acetic Acid or Unit Product hereunder, so long as
any such testing does not materially interfere with Unit or Plant operations, and the Company shall
cooperate in any such test and shall have the right to be represented and to participate in any
such test and to inspect any equipment used in determining the nature or quality of the Acetic Acid
or Unit Product.

Article 9

Measurement

          9.1 The engineering unit employed for the measurement of Acetic Acid and Unit Product (the
“Unit of Measurement”) shall be one pound (avoirdupois). All quantities given herein,
unless otherwise expressly stated, are in terms of such Unit of Measurement.

          9.2 The Company shall maintain and operate the Acetic Acid Measuring Equipment and the
Methanol Measuring Equipment in accordance with customary practice in the industry and all
applicable laws and regulations. BP may, at its option and expense, install measuring equipment
for checking the Acetic Acid Measuring Equipment or the Methanol Measuring Equipment, so long as
such installation does not materially interfere with the operation of the Unit or the Plant.
Readings from the Acetic Acid Measuring Equipment will be used for determining quantities of acetic
acid shipments and readings from the Methanol Measuring Equipment will be used for determining
quantities of methanol delivered to the Company’s Texas City site. In the event that different or
additional modes of transportation of methanol, Acetic Acid or Unit Product are used after the
Effective Date (e.g., Pipeline deliveries), BP and the Company will discuss and determine in good
faith appropriate additions to the Acetic Acid Measuring Equipment or Methanol Measuring Equipment
required to accurately measure deliveries by or through such modes of transportation.

          9.3 BP shall have the right, at BP’s expense, to monitor and check the measurement of Acetic
Acid or Unit Product from the Unit to each ship, barge, other inland water or marine vessel, Tank
Car, tank truck or other conveyance into which the Acetic Acid or Unit Product is loaded or to any
Pipeline used to effect delivery of Acetic Acid or Unit Product, in the presence of an independent
surveyor. Any reports and certifications resulting from such monitoring and checking will be made
available by BP to the Company on request.

          9.4 If any test of the Company’s meters shows that the metering equipment is in error by less
than or equal to 0.25%, previous readings of such equipment shall be considered as correct but such
equipment will be properly adjusted at once to zero error. If any test shows that the

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metering equipment is in error by more than 0.25%, the metering equipment will be properly adjusted
at once to zero and the previous readings of such equipment and the resulting calculation of the
quantity of Acetic Acid and Unit Product delivered by the Company to BP hereunder shall be
corrected for any period of inaccuracy which is definitely known or agreed upon by the parties. In
case such period is not definitely known or agreed upon, such corrections will be for a period
covering the last half of the time elapsed since the date of the last test of such metering
equipment. If for any reason any of the Company’s meters utilized hereunder is out of service so
that the quantity of Acetic Acid or Unit Product delivered through such meters cannot be
ascertained, the quantity of Acetic Acid or Unit Product so delivered during the period such meters
are out of service will be estimated and agreed upon by the parties hereto upon the basis of the
best available data using, in order of preference, the following methods:

     (a) readings of any check-measurement equipment of BP if installed and measuring
accurately;

     (b) readings of any measurement equipment which the Company may have placed in the
flowing stream if installed and measuring accurately; and

     (c) the determination of a recognized referee agreed upon by the parties, with the
decision of the referee with respect to such matter being final, conclusive and binding on
each of the parties and with the charges of said referee being borne equally by the parties.

          9.5 Each party shall have the right to be present at the time any installing, reading,
cleaning, changing, repairing, inspecting, testing or adjusting is done in connection with the
other party’s measuring equipment used in measuring deliveries hereunder. The records from such
measuring equipment shall remain the property of the owner thereof, but, upon request, each party
will submit to the other party its records, charts and weight tickets, together with calculations
therefrom, subject to return within 15 calendar days after receipt thereof. Such records, charts
and weight tickets shall be kept on file for a period of not less than 90 calendar days.

          9.6 If upon any test the measuring equipment is found to be inaccurate to any degree, it shall
be adjusted as soon as practicable to measure accurately.

          9.7 Notwithstanding the foregoing, the Company’s measurements shall be deemed to be accurate
for purposes of all deliveries made hereunder unless, as to any particular delivery, BP objects
thereto in writing delivered to the Company within three weeks after such delivery to BP’s
customer.

Article 10

Storage of Acetic Acid by Company

          The Unit presently contains three bulk storage tanks (Nos. 50T508-1, 50T508-2 and 50T508-3).
The Company shall use such bulk storage tanks for the storage of Acetic Acid as required given the
Estimated Shipping Instructions and the Shipment Instructions or as otherwise determined by the
Company. Should any such bulk storage tank be taken out of service by the

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Company for repair service, the Company will, so long as the costs with respect thereto are subject
to reimbursement under this Agreement or included as a part of the Company Fixed Costs, repair the
same and place it back in service as soon as is practicable.

Article 11

Operation of Unit and Related Matters

          11.1 The Company shall have the authority to, and does hereby agree to, operate the Unit in
accordance with the terms and conditions of this Agreement. Unless otherwise provided herein, the
Company shall operate the Unit in accordance with the Shipment Instructions of BP; provided,
however, that such operation (a) is not in violation of this Agreement, prudent operation or
maintenance procedures or applicable laws and (b) does not have the effect of altering the
Specifications unless agreed between the Company and BP. The Company shall operate the Unit in
compliance in all material respects with all applicable laws and regulations, whether in existence
as of the date of signature of this Agreement or as may be adopted thereafter.

          11.2 Notwithstanding any other provision of this Agreement to the contrary, the Company shall
operate the Unit and perform its other obligations hereunder using the same standard of care as it
would use in operating its other units at the Plant (which, at a minimum, shall be that standard of
care that a reasonable prudent operator of a chemical manufacturing facility similar to the Unit
would use in operating such facility), and the Company shall have no liability hereunder based on
any higher standard of care. Both parties recognize that it is imperative to operate the Unit
safely and with no harm to people or the environment. Representatives of both parties will meet
periodically (no less than annually) to discuss current practices and share best practices
regarding health, safety and environmental matters. Proposals for changes to health, safety and
environmental procedures applicable to the Unit will be reviewed at Semiannual Meetings and such
other times as may be agreed by the parties or required to address current issues or changes in
laws or regulations pertaining to the Unit.

          11.3 In the event that for any reason maintenance, utilities or other services and resources
at the Plant become limited, the Company agrees that it will in good faith allocate such
maintenance, utilities, services and resources between the Unit and the other activities at the
Plant on a fair and equitable basis having regard to the needs of BP hereunder and the other
operations at the Plant; provided, however, that the Unit shall have first priority in any such
allocation if the Company directly or indirectly causes such limitation to occur through committing
maintenance, utilities, services or resources to new uses at the Plant beyond the capabilities at
the Plant at the time such commitment was made.

          11.4 At the Semiannual Meeting to be held in September or October of each Contract Year, the
parties shall discuss items that may be addressed in the proposed annual maintenance budget for the
following Contract Year. At least 45 calendar days prior to the beginning of each Contract Year,
the Company will prepare a detailed annual maintenance budget for the Unit for such Contract Year.
Each maintenance budget will be agreed to by both parties at least 15 calendar days prior to the
beginning of the applicable Contract Year. If there is a need to undertake significant additional
maintenance or, if certain scheduled items are found no longer to require attention,

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additions or deletions will be mutually agreed upon. The Company shall keep a record of
maintenance spending and will report such spending to BP at reasonable intervals upon reasonable
notice from BP. Such reports will include, as a minimum requirement, any agreed changes to the
original budget, actual spending compared to budget and an annualized total forecast including
agreed additions or deletions. BP shall have access to the Company’s maintenance records necessary
to verify the accuracy of all items charged against maintenance to the extent and in the manner
provided in Section 22.1 of this Agreement.

Article 12

Shut-Downs of the Unit

          12.1 The parties agree that the Unit will be shut down for such periods of time as are
required to accomplish the Scheduled Shutdowns. During such shut-down, the Company shall not be
required to produce Acetic Acid hereunder and it is the present intention of the parties to utilize
the bulk storage tanks referred to in Article 10 to accumulate Acetic Acid for delivery during such
Scheduled Shutdowns. Any such Scheduled Shutdown shall not affect the obligations of BP to make
payments hereunder or the other covenants and agreements of the parties hereunder. All
maintenance, operating or other costs associated with the Scheduled Shutdown shall be expensed at
the time such costs are incurred.

          12.2 Subject to Section 34.1(c), upon reasonable notice from BP, the Company shall temporarily
cease or reduce the production of Acetic Acid at the times and for the periods so requested. In
such event, in addition to all other payments required hereunder, BP shall reimburse the Company
upon receipt of invoice therefor and reasonable supporting detail as BP’s auditors may reasonably
require for any and all additional costs and expenses incurred in connection with such cessation or
reduction, including but not limited to increased costs of production of other products produced at
the Plant resulting from such cessation or reduction; provided, however, that the Company shall
have (a) a duty to reasonably mitigate any such additional costs and expenses and to share with BP
any benefit in excess of such additional costs that the Company may obtain or derive as a result of
such cessation or reduction of production and (b) a duty to reasonably mitigate all Company Fixed
Costs and Variable Costs chargeable to BP under this Agreement during such temporary cessation or
reduction in production of Acetic Acid.

          12.3 In the event of a fire, explosion, flood, hurricane, windstorm or other casualty
resulting in the loss of the Unit or a substantial part thereof, the parties hereto shall, within
60 calendar days after such loss occurs, meet to discuss whether or not the Unit should be repaired
or rebuilt. If both parties agree that the Unit should be repaired or rebuilt, (a) the parties
shall apply all available insurance proceeds towards the repair or rebuilding of the Unit, (b) the
Unit shall be repaired or rebuilt, (c) the parties’ obligations under this Agreement shall continue
and (d) any costs of such repair in excess of the proceeds of insurance shall be shared by the
parties as Capital Expenditures in accordance with their then applicable Profit sharing ratios. If
both parties agree not to repair the Unit, this Agreement shall terminate and the parties shall
share any insurance proceeds received under their respective insurance policies in connection with
such loss of or to the Unit or substantial portion thereof, with BP receiving or retaining ***** of
such proceeds and the Company receiving or retaining ***** of such proceeds. If the parties do not
agree as to whether or not to

-27-

 

repair or rebuild the Unit, the party that desires to repair or rebuild the Unit (the “Electing
Party”) shall have the right, by providing written notice (a “Repair Election Notice”)
to the other party (the “Non-Electing Party”), to require that the Unit be repaired or
rebuilt, in which event:

     (i) the Unit shall be repaired or rebuilt;

     (ii) all insurance proceeds received by either of the parties under their respective
insurance policies in connection with such loss of or to the Unit or substantial portion
thereof shall be first applied to the payment of all repair or rebuilding costs;

     (iii) except as otherwise modified in this Section 12.3, the parties’ obligations under
this Agreement shall continue;

     (iv) the Electing Party shall bear all costs of such repair or rebuilding in excess of
the proceeds of insurance and shall have the right to fully depreciate such excess repair or
rebuilding costs;

     (v) the Electing Party shall recover such excess costs by receiving 100% of all positive
Profits until the Electing Party has received an amount equal to such excess costs, together
with interest thereon at the Applicable Interest Rate from the time such costs were incurred
until such excess costs have been paid in full;

     (vi) if, for the Contract Year immediately preceding such loss of or to the Unit or
substantial part thereof, UAL was greater than zero and the Electing Party is BP, UAL for
Contract Years subsequent to the Contract Year immediately preceding such loss of or to the
Unit shall never be greater than the UAL for the Contract Year immediately preceding such loss
of or to the Unit, for all purposes of this Agreement;

     (vii) for each of the first two full Contract Years occurring after such repair or
rebuilding has been completed and the Unit restarted, (A) if the Electing Party is the
Company, the Company shall pay BP ***** of the UAL for such full Contract Year, after which
payment, UAL for such full Contract Year shall be deemed to be ***** for all purposes of this
Agreement, or (B) if the Electing Party is BP, UAL for each such full Contract Year shall
never be greater than the UAL for the Contract Year immediately preceding such first full
Contract Year, for all purposes of this Agreement; and

     (viii) if the Electing Party was required to make any payments under clause (vii) above
for both of such full Contract Years and the Non-Electing Party is entitled to elect, and does
elect, to terminate this Agreement pursuant to Section 2.1(b) during the third full Contract
Year occurring after such repair or rebuilding has been completed and the Unit restarted, if
the Electing Party is the Company, the Company shall pay BP ***** of the UAL for such third
full Contract Year, after which payment the UAL for such third full Contract Year shall be
deemed to be zero for all purposes of this Agreement;

provided, however, that if, at the time the Non-Electing Party receives a Repair Election Notice,
the Non-Electing Party would be entitled to terminate this Agreement pursuant to Section 2.1(b)

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(ignoring for this purpose the requirement that an election to terminate under such Section must be
made on or before March 31), the Non-Electing Party may, by providing written notice the Electing
Party within 30 days after receipt by the Non-Electing Party of such Repair Election Notice, elect
to terminate this Agreement, in which event the parties shall be deemed to have agreed to not
repair the Unit for all purposes of this Agreement. Any amount paid by or to the Electing Party
pursuant to the immediately preceding sentence shall be paid at the same times that the Company is
scheduled to receive payments towards the Company Profit Share (including Estimated Company Profit
Share payments) pursuant to Section 6.6. In the event that any parts of the Plant which serve the
Unit are destroyed or damaged, whether by an insured risk or not, the Company shall rebuild the
same as soon as practicable and to the extent that the insurance proceeds are deficient will make
up the difference from its own funds unless the Unit has also been damaged and the parties have
elected to not repair the Unit pursuant to this Section 12.3.

Article 13

Insurance

          During the term of this Agreement, the Company shall maintain property damage and liability
insurance on the Unit and those parts of the Plant which serve the Unit in types and amounts, and
against such risks, at levels that are reasonable and customary for the chemical industry;
provided, however, that in any event the Company shall not be required to maintain business
interruption or terrorism insurance coverages. All insurance premiums in respect of insurance for
the Unit, Acetic Acid or Unit Product which are not included in Company Fixed Costs shall be paid
by BP upon receipt by BP of an invoice. BP shall reimburse the Company for any amounts paid by the
Company that are credited towards the deductible under the Company’s liability insurance policy or
property damage/business interruption policy to the extent the underlying event (a) is directly
related to the Unit, Acetic Acid or Unit Product or any other matter under this Agreement and (b)
the Company is not required to indemnify BP for such underlying event pursuant to Article 30. BP
may carry additional insurance, at its sole discretion and cost. The Company shall advise BP
whenever any existing insurance policy or area of coverage is renegotiated or otherwise changed in
a material manner and BP shall be afforded a reasonable opportunity to review such changes. The
Company and BP shall jointly review insurance coverages on an annual basis. BP shall be named an
additional insured with respect to the Unit on the policies covering the Unit, Acetic Acid and Unit
Product and no action to drop coverage for BP shall be taken by the Company without prior written
approval by BP. In the event that either party receives any proceeds under any insurance policy
for which all or any part of the premiums therefor are taken into account in determining Profit
hereunder that are not required to be used for any other purpose under this Agreement, (i) if BP
receives such proceeds, BP shall pay the Company an amount equal to ***** of such proceeds, and
(ii) if the Company receives such proceeds, the Company shall pay BP an amount equal to ***** of
such proceeds.

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Article 14

Access to the Unit

          14.1 The Company agrees that upon written request by BP, the Company shall provide to BP, at
cost, reasonably suitable office accommodations at the Plant for a limited number of BP personnel.

          14.2 The Company agrees to permit BP personnel, at the cost of BP, to have access to the Unit
at reasonable times and on reasonable notice and consistent with the Company’s contractual
obligations under licenses or sub-licenses to which it is a party. BP shall indemnify and hold the
Company harmless pursuant to the provisions of Article 30 hereof from Damages which the Company may
suffer or incur by reason of its admission of such BP personnel to the Unit. BP shall cause all of
its personnel to comply with the Company’s safety, health, security and reasonable confidentiality
procedures and policies at all times while at the Plant.

Article 15

Methanol Supply

          15.1 BP shall provide Methanol meeting the specifications described on Exhibit B
attached hereto in the volumes and at the times required by the Company to operate the Unit and
supply Acetic Acid as required hereby. The Company shall provide adequate facilities to receive,
handle and store, on behalf of BP for use in the Unit, Methanol delivered by sea in up to *****
metric ton shipments. Title to all Methanol supplied by BP for use in the Unit shall at all times
remain 100% vested in BP. Solely for purposes of establishing BP’s title to and ownership of such
Methanol supplied by BP for use in the Unit, the Company shall execute and deliver to BP an
information UCC financing statement or any other necessary documents in a form reasonably
acceptable to BP and any renewals thereof as reasonably requested by BP to reflect such BP
ownership of Methanol supplied by BP as a matter of public record.

          15.2 (a) For all Methanol delivered pursuant to Section 15.1, the cost of Methanol consumed
for any Month shall be ***** less (ii) a discount, such discount to be agreed upon by the parties
as of the beginning of the Contract Year in which such Month falls (the “Methanol
Discount”), plus (iii) an amount designed to reflect BP’s actual reasonable costs of purchasing
and delivering such Methanol to the Company, including, without limitation, the costs of delivering
such Methanol from the supplier’s terminal to the Unit and surveyor’s costs (the “Methanol
Delivery Cost”). The ***** less the Methanol Discount plus the Methanol Delivery Cost is
referred to as the “Methanol Transfer Price”. For 2008, (A) the Methanol Discount shall be
***** of the *****, and (B) the Methanol Delivery Cost for each Month shall be ***** per gallon.
For any Month, Methanol consumption will be deemed to be the inventory of Methanol contained in the
Company’s methanol tank at the beginning of such Month plus the aggregate quantity of Methanol
deposited into the Company’s methanol tank during such Month minus the inventory of Methanol
contained in the Company’s methanol tank at the end of such Month; provided, however, any
discrepancy between the amount measured by the meter that measures the flow of Methanol into the
Unit and the amount measured by the Methanol Measuring Equipment will be reconciled on an annual
basis. In

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the event that ***** discontinues its methanol consulting service, then BP and the Company shall,
by written agreement, replace ***** with another reported methanol price.

          (b) In the event that the parties fail to agree upon the Methanol Discount or the Methanol
Delivery Cost applicable to any Contract Year prior to January 1 of such Contract Year, (i) the
Methanol Discount and/or Methanol Delivery Cost, as applicable, for Methanol consumed or Supplied
Methanol delivered in each Month during such Contract Year shall be the Methanol Discount or
Methanol Delivery Cost, as applicable, used in the immediately preceding Contract Year until such
time as the Methanol Discount or Methanol Delivery Cost, as applicable, for the current Contract
Year has been agreed upon or otherwise determined pursuant to this Section 15.2 and (ii) once the
Methanol Discount and/or Methanol Delivery Cost for the current Contract Year has been agreed upon
or otherwise determined pursuant to this Section 15.2, the Methanol Discount or Methanol Delivery
Cost, as applicable, shall be retroactively adjusted to such agreed upon or determined Methanol
Discount and/or Methanol Delivery Cost for all Methanol consumed and all Supplied Methanol
delivered in such Contract Year.

          (c) In the event that the parties fail to agree upon the Methanol Discount applicable to any
Contract Year prior to March 1 of such Contract Year, either party may, for so long as such failure
continues, elect, by providing written notice to the other party of such election, to have the
Methanol Discount for such Contract Year determined by Jim Jordan and Associates, whose
determination shall be final and binding on the parties for such Contract Year; provided, however,
that in the event that Jim Jordan and Associates discontinues its methanol consulting service, then
BP and the Company shall, by written agreement, replace Jim Jordan and Associates as the
determining party with another relevant consulting service. The goal of Jim Jordan and Associates
(or such other consulting service) in making such determination shall be to arrive at the generally
prevailing discount to the ***** as of the time of determination for contract purchases
of large parcels of methanol in the United States Gulf Coast. In the event that the parties fail
to agree upon the Methanol Delivery Cost applicable to any Contract Year prior to March 1 of such
Contract Year, BP shall provide to the Company detailed information regarding the Methanol Delivery
Cost. After provision of such detailed information, if the parties still fail to agree upon the
Methanol Delivery Cost applicable to such Contract Year, either party may, for so long as such
failure continues, elect, by providing written notice to the other party of such election, to have
the Methanol Delivery Cost for such Contract Year determined by any independent national public
accounting firm chosen by such party who is either not then providing accounting or auditing
services to such party or is agreed by the other party (with knowledge of such relationship), whose
determination shall be final and binding on the parties for such Contract Year. The goal of such
national accounting firm in making such determination shall be to arrive at an amount that will
reflect BP’s actual reasonable costs of purchasing and delivering such Methanol to the Company,
including without limitation the costs of delivering such Methanol from the supplier’s terminal to
the Unit and surveyor’s costs.

          15.3 For all Methanol delivered pursuant to Section 15.1 and all Supplied Methanol delivered
pursuant to Section 15.4, the point of delivery shall be the point of transfer of custody of such
Methanol to the Company, which for purposes of this Agreement shall mean the last exit flange on
the ship, barge or other inland or marine vessel from which the Methanol or Supplied Methanol is
unloaded. Risk of loss shall pass from BP to the Company at such flange and the Company shall be

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in control and possession of the Methanol and Supplied Methanol delivered by BP pursuant to Section
15.1 or Section 15.4 hereof and responsible for any damage or injury caused thereby after risk of
loss with respect thereto has passed to the Company. As between the Company and BP, BP shall be
deemed to be in control and possession of the Methanol and Supplied Methanol delivered by BP
pursuant to Section 15.1 or 15.4 hereof and responsible for any damage or injury caused thereby
until risk of loss with respect thereto has passed to the Company.

          15.4 In the event that any plant or facility that is located on the Plant Site consumes
methanol in its operations, irrespective of whether such plant or facility exists as of the
Effective Date or is subsequently constructed (but not including any plant or facility,
irrespective of whether such plant or facility exists as of the Effective Date or is subsequently
constructed, that is located on real estate that is acquired by the Company after the Effective
Date), BP shall supply to the Company, from and after the later of (a) the date specified in a
written request from the Company to commence such supply and (b) the twelfth Month starting after
the receipt of a written request from the Company to commence such supply, under the standard terms
and conditions of BP or an Affiliate of BP for sales of methanol to third parties (other than
payment), all such quantities of methanol as are required by such plant or facility to the Company
(all such methanol, “Supplied Methanol”) at the Methanol Transfer Price for the Month of
delivery of such Supplied Methanol; provided, however, that the obligation of BP to supply such
Supplied Methanol shall not exceed ***** gallons per year unless BP agrees in writing to supply
such excess (such agreement to be granted or withheld in BP’s sole discretion). The Supplied
Methanol delivered during a Month multiplied by the Methanol Transfer Price for that Month equals
the “Supplied Methanol Offset” for that Month. The Company shall use such Supplied
Methanol in such plant or facility or sell such Supplied Methanol to the owner of such plant or
facility at a price per gallon ***** (the “Methanol Sales Price”). During any Month that
the Company sells such Supplied Methanol, the credit (the “Supplied Methanol Credit”) for
such Month shall be any positive amount resulting from multiplying the gallons of such Supplied
Methanol sold by the Company during such Month by the amount (if any) by which the Methanol Sales
Price for such Month exceeds the Methanol Transfer Price for such Month.

Article 16

Special Expenditure

          16.1 A project and Special Expenditure, and the manner of reimbursement or payment to the
Company therefor, shall be agreed upon by the parties hereto; provided, however, that the Company
may, where circumstances reasonably require, without the approval of BP, commence a project and
Special Expenditure necessary, in the sole judgment of the Company, (a) to ensure that the Unit,
the Barge, the Rail Cars (or the operation of any of the foregoing) or the production, delivery,
storage, shipment, sale, resale, use, disposal or transportation of Acetic Acid, Unit Product,
Methanol, feedstocks, supplies, materials or wastes comply with applicable laws and regulations, or
(b) to provide for the health or safety of the Company’s employees, the public or the environment.
The Company shall at the earliest practicable opportunity notify BP of such project and Special
Expenditure and all costs actually incurred by the Company with respect to such project and Special
Expenditure shall be promptly reimbursed by BP to the Company upon receipt of an invoice therefor.

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Article 17

Capital Expenditures

          17.1 All Minor Capital Items shall be paid by the Company but shall be reimbursed by BP upon
receipt of an invoice, provided that the Company complies with the procedures described in this
Article 17. The cost of all Major Capital Items shall be paid by the Company and invoiced to BP in
accordance with the Profit sharing ratios in effect during such period. Expenditures on Major
Capital Items will have no effect on the definition of Profit, and such expenditures will be made
for jointly approved projects without regard to the presence or absence of Profit. For Major
Capital Items exceeding five million dollars, BP may participate in formal staged reviews of the
project, including, but not limited to, health, safety and environmental design reviews and
pre-start up reviews.

          17.2 At the Semiannual Meeting to be held in September or October of each Contract Year, the
parties shall discuss items that may be addressed in the proposed annual capital budget for the
following Contract Year. At least 45 calendar days prior to the beginning of each Contract Year,
the Company will prepare a detailed annual capital budget for the Unit for such Contract Year.

          17.3 When the Company desires to obtain a disbursement from BP for a Capital Project described
in the capital budget, the Company shall furnish BP with the details of the proposed Capital
Project including (a) the estimated cost of such proposed Capital Project, (b) the estimated
benefits of the proposed Capital Expenditure, (c) the proposed schedule for such Capital Project
and (d) an estimate of any changes which will result to the Variable Costs, the Company Fixed
Costs, the Acetic Acid production volume or the Specifications, for authorization and disbursement
of funds in accordance with the procedures in this Article 17.

          17.4 Additional Capital Projects may be added to the capital budget described in Section 17.2
by the Company at any time during a Contract Year, provided that the approval of BP has first been
obtained; provided, however, that the Company may, where circumstances reasonably require, without
the approval of BP, commence additional Capital Projects and make Capital Expenditures not
contemplated by the capital budget described in Section 17.2 if necessary, in the sole judgment of
the Company, (a) to ensure that the Unit, the Barge, the Rail Cars (or the operation of any of the
foregoing) or the production, delivery, storage, shipment, sale, resale, use, disposal or
transportation of Acetic Acid, Unit Product, Methanol, feedstocks, supplies, materials or wastes
comply with applicable laws and regulations, or (b) to provide for the health or safety of the
Company’s employees, the public or the environment. The Company shall at the earliest practicable
opportunity notify BP of any such additional Capital Project and all costs actually incurred and
all Capital Expenditures actually made by the Company with respect to such additional Capital
Project shall be promptly reimbursed by BP to the Company upon receipt of an invoice therefor.

          17.5 Except as otherwise provided in Section 17.4, all Capital Projects may be committed to by
the Company and expended by the Company only after the approval of BP in writing.

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          17.6 The effective date of any changes in the Specifications will be the date the Capital
Project in question is completed or demonstrated. The actual results arising from a Capital
Project shall be determined by BP and the Company no later than six months after such completion
date. If BP and the Company agree that the actual results therefrom differ from those anticipated
in Section 17.2 hereof, the Specifications shall be adjusted to take account of the actual results
obtained. The Company will notify BP promptly after the completion of any Capital Project and all
costs associated with such Capital Project will be billed to BP by the Company within 120 calendar
days after its completion.

          17.7 BP shall designate in writing to the Company the name of the BP representatives
authorized to approve Capital Projects on behalf of BP, which representatives may be changed from
time to time by BP by written notice to the Company.

Article 18

Personnel

          The Company shall at all times have sole authority with respect to all personnel matters
involving the employees, consultants and third-party contractors at the Plant and the Unit,
including but not limited to salaries, bonuses, benefits, compensation, indirect personnel costs,
manpower needs, training, insurance, labor matters, working hours, job responsibilities, bonding
and all other employee, personnel-related and contracting matters.

Article 19

Representations and Warranties of the Company

          The Company represents and warrants to BP as follows:

          19.1 Organization, Good Standing and Corporate Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the State of Delaware, is
duly qualified to do business as a foreign corporation in the State of Texas, and has all requisite
corporate power and authority to carry on its business as presently conducted, to enter into this
Agreement and perform its obligations hereunder.

          19.2 Authority Relative to Agreement. The execution, delivery and performance by the
Company of this Agreement have been duly and effectively authorized by all necessary corporate
action. This Agreement has been duly executed and delivered by the Company and is a legal, valid
and binding obligation of the Company enforceable in accordance with its terms, except insofar as
enforcement may be limited by (a) bankruptcy, insolvency, reorganization or similar laws relating
to or affecting the enforcement of creditors’ rights generally and (b) general principles of
equity.

          19.3 No Conflict with Other Instruments or Proceeding. Neither the execution and
delivery of this Agreement, nor the performance or compliance with the terms and conditions hereof
conflict with, or will result in a breach by the Company of, or constitute a default under, or
result in the creation of any lien, charge or encumbrance upon, any asset of the Company pursuant
to any of

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the terms, conditions or provisions of (a) the Certificate of Incorporation or Bylaws of the
Company, (b) any mortgage, deed of trust, lease, contract, agreement or other instrument to which
the Company is a party or by which the Company may be bound or affected, or (c) any writ, order,
judgment, decree, statute, ordinance, regulation or any other restriction of any kind or character,
to which the Company is subject, or by which the Company may be bound or affected.

          19.4 No Litigation or Proceeding. As of the Effective Date, there are no actions,
suits, investigations or proceedings pending or to the Company’s knowledge threatened against the
Company at law or in equity or before or by any federal, state, municipal or other governmental or
non-governmental department, commission, board, bureau, agency or instrumentality seeking to
enjoin, restrain or otherwise prevent the execution and delivery of this Agreement by the Company.

          19.5 No Warranties. The Company Hereby Expressly Disclaims And Negates
(i) Any Representation Or Warranty (Express, Implied, Common Law, Statutory Or Otherwise)
Relating To The Unit, The Barge, The Rail Cars, Or The Operation Of Any Of The Foregoing, Or Any
Other Tangible Personal Property And Fixtures Including But Not Limited To Any Warranty Of
Merchantability Or Fitness For A Particular Purpose Or Fitness Of Design Or Engineering, Except As
Expressly Set Forth Herein, And (ii) Any Implied Representation Or Warranty Relating To
Any Acetic Acid Or Unit Product Sold Hereunder, Including But Not Limited To Any Implied Warranty
Of Merchantability Or Fitness For A Particular Purpose Or Fitness Of Design Or Engineering.

Article 20

Representations and Warranties of BP

          BP represents and warrants to the Company as follows:

          20.1 Organization. BP is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, is duly qualified to do business as a foreign
corporation in the State of Texas, and has all requisite corporate power and authority to carry on
its business as presently conducted, to enter into this Agreement and perform its obligations
hereunder.

          20.2 Authority Relative to Agreement. The execution, delivery and performance by BP of
this Agreement have been duly and effectively authorized by all necessary corporate action. This
Agreement has been duly executed by BP and is a legal, valid and binding obligation of BP
enforceable in accordance with its terms, except insofar as enforcement may be limited by
(a) bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement
of creditors’ rights generally and (b) general principles of equity.

          20.3 No Conflict with Other Instruments or Proceedings. Neither the execution and
delivery of this Agreement, nor the performance or compliance with the terms and conditions hereof
conflict with, or will result in a breach by BP of, or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon, any asset of BP pursuant to any of the terms,
conditions or provisions of (a) the Certificate of Incorporation or Bylaws of BP, (b) any mortgage,

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deed of trust, lease, contract, agreement or other instrument to which BP is a party or by which BP
may be bound or affected, or (c) any writ, order, judgment, decree, statute, ordinance, regulation
or any other restriction of any kind or character, to which BP is subject, or by which BP may be
bound or affected.

          20.4 No Litigation or Proceedings. As of the Effective Date, there are no actions,
suits, investigations or proceedings pending or to BP’s knowledge threatened against or affecting
BP at law or in equity or before or by any federal, state, municipal or other governmental or
non-governmental department, commission, board, bureau, agency or instrumentality seeking to
enjoin, restrain or otherwise prevent the execution and delivery of this Agreement by BP.

Article 21

Participation in Negotiations

          Upon any amendment to or the expiration from time to time of any of the supply contracts in
effect as of the Effective Date pursuant to which carbon monoxide is or is to be supplied to the
Unit, and before entering into any new supply contracts for carbon monoxide for the Unit, at BP’s
request the Company shall permit BP to participate in (a) the negotiations which the Company
conducts with such suppliers and (b) the resolution of any disputes relating to the supply of
carbon monoxide to the Unit. Except as otherwise provided herein, the Company may, without
participation by BP, negotiate and shall have the right, without the approval of BP, to enter into
all contracts relating to supplies, materials, feedstocks (except Methanol so long as BP has not
defaulted in its contractual obligations with respect thereto), utilities, treatment, disposal and
other services or materials or property required in the Company’s opinion for the operation of the
Unit, the Barge, the Rail Cars or the storage facilities or the performance of its obligations
hereunder; provided, however, that the Company shall, prior to implementing any material change in
its strategies for acquiring natural gas to be consumed by the Unit, discuss such change with BP.

Article 22

Access to Information

          22.1 Upon written request by BP from time to time, the Company shall provide to BP, its
attorneys, accountants and other representatives, subject to the confidentiality provisions of
Section 26.1 hereof, at reasonable times during normal business hours, access to the Company’s
books, records and accounts relating to the operation of the Unit and the performance of the
Company’s obligations under this Agreement, except as such access may be prohibited by licenses or
sub-licenses from a third party other than BPCL to which the Company is a party. BP shall thereupon
have the right to make copies of and abstracts from such books, records and accounts, at BP’s
expense, which copies may be removed from the premises of the Company and retained by BP, subject
to the confidentiality provisions of Section 26.1 hereof.

          22.2 The Company agrees to permit representatives of BP, at BP’s expense for purposes other
than the Acetic Acid Technology Agreement, to have (a) access to the Unit at reasonable times and
on reasonable notice to obtain information relating to the present or proposed operations of the

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Unit so long as such access does not materially disrupt the operation of the Unit, and (b) access
to those portions of the Plant that serve the Unit at reasonable times and on reasonable notice to
obtain information and audit the environmental status and condition of those portions of the Plant
that serve the Unit and the operations thereof as long as such access does not materially disrupt
the operation of the Plant and BP pays all costs relating thereto. BP shall cause all of its
personnel to comply with the Company’s safety, health, security and reasonable confidentiality
procedures and policies at all times while at the Plant. BP agrees to furnish the Company with
copies of all information and audits obtained or prepared pursuant to the provisions of this
Section 22.2. The Company shall make its employees and other representatives available to BP for
purposes other than the Acetic Acid Technology Agreement at reasonable times on reasonable notice
to discuss the present or proposed operations of the Unit so long as such availability does not
materially disrupt the operation of the Unit or the Plant.

          22.3 Upon written request by the Company from time to time, BP shall provide to the Company
and its attorneys, accountants and other representatives, subject to the confidentiality provisions
of Section 26.1 hereof, at reasonable times during normal business hours, access to BP’s books,
records and accounts relating to the calculation of Profit, Methanol supplies, cost savings and the
performance of BP’s obligations under this Agreement. The Company shall thereupon have the right
to make copies of and abstracts from such books, records and accounts, at the Company’s expense,
which copies may be removed from the premises of BP and retained by the Company, subject to the
confidentiality provisions of Section 26.1 hereof.

Article 23

Semiannual Meetings

          23.1 At the Semiannual Meetings, the representatives of BP and the Company shall review such
matters as may be determined as appropriate by the parties.

          23.2 At the Semiannual Meeting to be held in September or October of each Contract Year, the
parties shall discuss items that may be addressed in the proposed operating plan for the following
Contract Year. At least 45 calendar days prior to the beginning of each Contract Year, the Company
shall deliver to BP a proposed operating plan (including proposed Special Expenditures, Capital
Projects, Capital Expenditures and Company Fixed Costs) for the Unit, the Barge, the Rail Cars and
the other equipment and property used in connection therewith, prepared by the Company in good
faith and upon realistic assumptions, for the following Contract Year. Each operating plan will be
agreed to by both parties at least 15 calendar days prior to the beginning of the applicable
Contract Year. In the absence of such an agreement on or before the first calendar day of the
Contract Year to which such proposed operating plan would, if agreed, apply, the Company shall be
entitled to operate, maintain, repair, renovate, remodel, change and make expenditures as may be
reasonably necessary for the operation of the Unit and in a manner consistent with the pattern of
expenditures made in the preceding Contract Year but excluding any Capital Expenditures unless
approved by BP pursuant to this Agreement (except to the extent otherwise permitted under Section
16.2 or Section 17.4). Except as otherwise provided in this Agreement, a material change to an
operating plan previously agreed upon by the parties shall require the approval of both parties.

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Article 24

Financial Assurances

          In the event any federal, state or other governmental authority requires the Company to
provide financial assurances (e.g., a letter of credit, bond or cash deposit) in connection with
the Unit, its operations or any Spills or Releases, the Company will use commercially reasonable
efforts to provide the same, and BP will reimburse the Company for all premiums or other costs
incurred by the Company in connection with procuring (or, in the case of a cash deposit, the
financing cost of making) such financial assurances, upon receipt of an invoice therefor; provided,
however, that it is understood and agreed that this Article 24 is not intended to apply to any
costs or expenses for any remediation or clean-up of any Hazardous Acetic Acid Substances, the
responsibility for such costs and expenses being determined solely by reference to Article 30.

Article 25

Arbitration

          25.1 All disputes, differences or questions arising out of or relating to this Agreement
(including but not limited to those as to the validity, interpretation, breach, violation or
termination hereof) shall be finally determined and settled pursuant to arbitration at Austin,
Texas, by three arbitrators, one to be appointed by the Company, one by BP, and a neutral
arbitrator to be appointed by such two party-appointed arbitrators. The neutral arbitrator shall
be an attorney and shall act as chairman. Any such arbitration may be initiated by a party by
written notice (“Arbitration Notice”) to the other party specifying the subject of the
requested arbitration and appointing such party’s arbitrator for such arbitration.

          25.2 Should (a) a party receiving an Arbitration Notice fail to appoint an arbitrator as
hereinabove contemplated by written notice to the party giving the Arbitration Notice within ten
calendar days after the receipt of the Arbitration Notice, or (b) the two arbitrators appointed by
or on behalf of the parties as contemplated in Section 25.1 hereof fail to appoint a neutral
arbitrator as hereinabove contemplated within ten calendar days after the date of the appointment
of the last arbitrator appointed by or on behalf of the parties, then a Judge of the United States
District Court for the Western District of Texas, Austin Division, upon application of the Company
or of BP, shall appoint an arbitrator to fill any such position with the same force and effect as
though such arbitrator had been appointed as hereinabove contemplated.

          25.3 All discovery requests will be subject to the parties’ rights to claim any applicable
privilege. The arbitrators may adopt procedures to protect the proprietary rights of the parties
and to maintain the confidential treatment of the arbitration proceedings (except as may be
required by law). Subject to the foregoing, the arbitrator shall have the power to issue subpoenas
to the parties and, to the extent permitted by the Commercial Rules of the American Arbitration
Association, to third parties, in either case, to compel the production of relevant documents, to
impose sanctions and to take such other actions as the arbitrators deem necessary to the same
extent a judge could pursuant to the Federal Rules of Civil Procedure and applicable law.

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          25.4 At any time after submission of an Arbitration Notice, either party may request a court
of competent jurisdiction to grant interim measures of protection (a) to preserve the status quo
pending resolution of the dispute, difference or question or (b) to prevent the destruction of
documents and other information or things related to the dispute, difference or question. A
request for such interim measures to a judicial authority shall not be deemed incompatible with the
provisions of this Article 25.

          25.5 During the course of dispute resolution pursuant to the provisions of this Article 25,
the parties’ rights and obligations under this Agreement will continue.

          25.6 The arbitration proceeding shall be conducted in the English language in Austin, Texas,
in accordance with the Commercial Rules of the American Arbitration Association. A determination,
award or other action shall be considered the valid action of the arbitrators if supported by the
affirmative vote of two or three of the three arbitrators. The award shall be in writing and shall
state the reasoning on which the award rests. The costs of arbitration (exclusive of the expense
of a party in obtaining and presenting evidence and attending the arbitration, and of the fees and
expenses of legal counsel to such party, all of which shall be borne by such party) shall be shared
equally by the Company and BP. The arbitration award shall be final and conclusive and shall
receive recognition, and judgment upon such award may be entered and enforced in any court of
competent jurisdiction.

Article 26

Confidentiality and Intellectual Property

          26.1 During the term of this Agreement and thereafter, all information relating to the
business, products, assets and finances of the Company or BP or their respective Affiliates,
including but not limited to financial statements and related books and records, minutes books,
personnel records, lists of customers and potential customers, lists of suppliers and potential
suppliers, price and cost data, computer programs, computer hardware, reports and similar
information and records, shall be treated as confidential to the Company or BP or their respective
Affiliate, as the case may be, and as confidential by BP or the Company, as the case may be, and
shall not be disclosed directly or indirectly by or for BP or the Company or their respective
officers, employees, agents, Affiliates or representatives to, or used for the benefit of, BP or
the Company or any other person; provided, however, that (a) all information provided in connection
with and covered by the Acetic Acid Technology Agreement shall be excluded from the obligations
contained in this Section and shall be covered solely by the confidentiality provisions contained
in the Acetic Acid Technology Agreement and (b) BP and its Affiliates shall not have any obligation
under this Section to maintain as confidential the fact that the Company produced any particular
Acetic Acid or Unit Product or the specifications of such Acetic Acid or Unit Product. At the
expiration or termination of this Agreement, the obligations as to confidentiality herein shall
continue for a period of five years from the date of such expiration or termination.
Notwithstanding the foregoing, in the event that BP declares force majeure with respect to
deliveries of Acetic Acid to the Texas City VAM Facility due to an interruption or discontinuance
of supply of Acetic Acid from the Company, BP may provide such information to the owner of the
Texas City VAM Facility as is reasonably necessary for such owner to confirm that the interruption
or discontinuance of supply of Acetic Acid from the Company

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was beyond BP’s reasonable control, including but not limited to any agreement or correspondence
between BP and the Company relevant to the interruption or discontinuance of supply of Acetic Acid
from the Company; provided, however, that prior to such disclosure the owner of the Texas City VAM
Facility has entered into a written commitment to maintain the confidentiality of such information
for the benefit of the Company, which written commitment is in form and substance reasonably
satisfactory to the Company.

          26.2 The rights and obligations of BP, BPCL and the Company with respect to confidentiality
and intellectual property relating to the acetic acid process or acetic acid technology licensed by
BPCL to the Company are set forth in the Acetic Acid Technology Agreement.

Article 27

Events of Default; Other Breaches; Remedies

          27.1 If a Company Event of Default shall occur and be continuing, BP may, at its option, by
written notice to the Company, declare the Company to be in default hereunder (“Declaration of
Company Default”); provided, however, that a Declaration of Company Default shall not relieve
or otherwise discharge the Company from the performance of its obligations under this Agreement,
except to the extent that the exercise by BP of its remedies pursuant to the provisions of Section
27.3 hereof otherwise prevents or restricts the Company with respect thereto.

          27.2 If a BP Event of Default shall occur and be continuing, the Company may, at its option,
by written notice to BP, declare BP to be in default hereunder (“Declaration of BP
Default”); provided, however, that a Declaration of BP Default shall not relieve or otherwise
discharge BP from the performance of its obligations under this Agreement.

          27.3 BP may, by written notice to the Company, terminate this Agreement if a Company Event of
Default under clause (i) of the definition thereof occurs and continues for at least 60 calendar
days after receipt by the Company of a Declaration of Company Default; provided, however, that (a)
BP provides the Company with written notice within eight Business Days after the end of each Month
that it believes that the Company has failed to deliver Acetic Acid to BP substantially in
accordance with the Shipment Instructions and (b) for purposes of this Section, the parties
acknowledge and agree that the delivery of Unit Product rather than Acetic Acid shall not be
considered a failure to deliver Acetic Acid to BP substantially in accordance with the Shipment
Instructions and, consequently, no notice from BP to the Company shall be required under clause (a)
above relating to the delivery by the Company to BP of Unit Product rather than Acetic Acid. Upon
any other Declaration of Company Default, BP may, by written notice to the Company, require the
Company to permit, and the Company shall permit at BP’s risk, but at the Company’s cost (subject to
BP’s duty to reasonably mitigate such cost), such employees of BP as BP may require to have access
to the Unit and those parts of the Plant that serve the Unit for the purpose of seeking and
implementing (including, if necessary, operating the Unit, in which event the costs associated with
such operation shall be paid by BP and taken into account when determining Profit for the relevant
Contract Year) a solution to the cause of the Company Event of Default, and the Company shall cause
its employees to comply with the reasonable requests and instructions of BP’s said employees while
present in the Plant or the Unit; provided, however, that BP shall indemnify and hold the

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Company harmless pursuant to the provisions of Article 30 hereof from Damages which the Company may
suffer or incur by reason of permitting such employees of BP to have such access and provided
further that BP shall not materially disrupt the Company’s operations on other parts of the Plant.
BP’s access to the Unit and those parts of the Plant that serve the Unit shall continue until the
Unit has operated so as to enable the Company to comply with its obligations hereunder for one
calendar month. BP shall thereupon withdraw its employees from the Unit and the Plant. After
withdrawing such employees, BP shall not have any rights pursuant to the provisions of this Section
27.3 of access to the Plant or the Unit for a period of 30 calendar days beginning on the date of
such withdrawal. Once BP has withdrawn its employees, (i) if the Company fails to operate the Unit
during such 30 calendar day period following such withdrawal by BP in such a manner as to enable
the Company to comply with its obligations under this Agreement, BP shall have the right to require
the Company to permit BP’s employees to have access to the Unit and those parts of the Plant which
serve the Unit immediately upon the expiration of such 30-day period, or (ii) if the Company
operates the Unit throughout such 30-day period following such withdrawal by BP in such a manner as
to enable the Company to comply with its obligations under this Agreement, BP shall have no right
to require the Company to permit BP’s employees to have such access until a subsequent Declaration
of Company Default, if any.

          27.4 Upon a Declaration of BP Default, the Company may, by written notice to BP, (a) cease all
further production of Acetic Acid for BP under this Agreement, (b) commence production of Acetic
Acid using Methanol other than that which is provided by BP hereunder, at which time title to any
Acetic Acid or Unit Product produced shall not automatically vest in BP as set forth in Article 7
hereof, (c) sell Acetic Acid or Unit Product produced following a Declaration of BP Default to
third parties solely for the Company’s account until such time as BP complies with its obligations
hereunder and (d) upon written notice to BP, use the Oiltanking Pipeline until such time as BP
complies with its obligations hereunder; provided, however, that the Company shall pay BP a
reasonable throughput fee for all Acetic Acid or Unit Product delivered through the Oiltanking
Pipeline. The Company may, by written notice to BP, terminate this Agreement if a BP Event of
Default under clause (i) of the definition thereof occurs and continues for at least 60 calendar
days after receipt by BP of a Declaration of BP Default; provided, however, that if (i) the
financial obligation that BP has failed to perform is the subject of a good faith dispute between
BP and the Company and (ii) BP has complied with the provisions of Section 6.7 on or before the
90th calendar day after the date when such financial obligation became due and payable,
then the Company shall not be entitled to terminate this Agreement as a result of such failure
unless and until BP fails to perform such financial obligation as the arbitration determines is
owing by BP for 30 calendar days after receipt of notice of such determination by the arbitration
panel.

          27.5 In the event of any breach or failure to perform hereunder by BP or the Company, which
breach or failure continues for a period of 30 calendar days after written notice thereof, the
other party hereto shall be entitled to pursue all rights and remedies provided at law or in equity
for such breach or failure including but not limited to seeking and recovering Damages therefor or
the remedy of specific performance of this Agreement whether or not such remedy is otherwise
normally available; provided, however, that unless such right is specifically provided in this
Article 27, neither party shall be entitled to seek a termination of this Agreement in connection
with such breach or failure.

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Article 28

SEC Reports

          The Company shall, at the same time and in the same manner that the Company makes such reports
available to its stockholders, furnish to BP all quarterly reports on Form 10-Q, annual reports on
Form 10-K and current reports on Form 8-K filed by the Company with the Securities and Exchange
Commission.

Article 29

Survival

          The covenants and agreements contained in Article 30 hereof, together with all indemnity and
payment obligations of any party hereto owing to the other party on the date of expiration or
termination hereof or arising thereafter based on events or occurrences prior to the expiration or
termination of this Agreement shall survive such expiration or termination and for the period of
the applicable statute of limitations (or, if there is no such statute, for the longest period
permitted by law) with respect to such obligations.

Article 30

Indemnification

          30.1 Except as otherwise provided herein, the Company, from and after the Effective Date,
shall indemnify and hold BP harmless from and against any and all Damages suffered or incurred by
BP on account of or arising from or related to the breach of, or the failure to perform or satisfy
any of, the representations, warranties, covenants or agreements made by the Company in or under
this Agreement, any liability to any party whether incurred under statute or in tort or otherwise
arising directly or indirectly from the operations carried on by or on behalf of the Company at or
in connection with the Plant or arising out of Spills or Releases (whether occurring before or
after the expiration or termination of this Agreement), except to the extent such Spills or
Releases are attributable to the acts or intentional omissions of, or breach of this Agreement by,
BP. In addition, the Company shall indemnify and hold BP harmless from and against any and all
Damages suffered or incurred by BP on account of or arising from or related to any emission,
discharge, release or threatened release, migration, or the presence, of any raw material,
pollutant, contaminant, hazardous substance, toxic material or waste that is not a Hazardous Acetic
Acid Substance, in, on, into or upon ambient air, surface water, ground water or land, or
subsurface strata or otherwise at, on, under, from or near the real estate that is part of the
Plant, and whether occurring before or after the Effective Date, to the extent such emission,
discharge, release or threatened release, migration or presence arises or has arisen out of any
activity at the Plant Site or any property adjoining the Plant Site that is acquired by the Company
after the Effective Date (“Plant Pollution”), except to the extent attributable
to the acts or intentional omissions of, or breach of this Agreement by, BP. BP shall not have any
obligations with respect to, or pay any costs relating to, Plant Pollution except to the extent
such Plant Pollution is attributable to the acts, omissions or default of BP. Any indemnity
obligation

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of the Company will not be a Company Fixed Cost or a Variable Cost or otherwise be reimbursable in
whole or in part under this Agreement.

          30.2 Except as otherwise provided herein, BP, from and after the Effective Date, shall
indemnify and hold the Company harmless from and against any and all Damages suffered or incurred
by the Company on account of or arising from or related to the breach of, or the failure to perform
or satisfy any of, the representations, warranties, covenants or agreements made by BP in or under
this Agreement, or any liability to any party whether incurred under statute or in tort or
otherwise arising directly or indirectly from the actions of BP carried out in connection with this
Agreement excepting any Damages arising out of Spills or Releases occurring during the Term (unless
such Spills or Releases are attributable to the acts, omissions or default of BP). Any indemnity
obligation of BP will not be taken into account in determining Profit hereunder or otherwise be
reimbursable in whole or in part under this Agreement.

          30.3 As soon as practicable after BP or the Company becomes aware of the discovery of facts or
otherwise receives actual notice of any Damages giving rise to a claim by it for indemnification
hereunder (a “Claim”), such party will provide notice thereof in writing to the other
party; provided, however, that the failure to so notify the other party shall not relieve the other
party from any liability which it may have under this Article 30, except to the extent of material
detriment suffered by such other party as a result of such failure. For purposes of this Section
30.3, receipt by a party of notice of any demand, assertion, claim, action or proceeding (judicial,
administrative or otherwise) by or from any person or entity (other than the other party to this
Agreement) or governmental authority (“Third Party Action”) which may give rise to a Claim
on behalf of such party shall constitute the discovery of facts giving rise to a Claim by it and
shall require notice of the receipt of such matter as provided in the first sentence of this
Section 30.3. Any notice pursuant to this Section 30.3 shall set forth all information regarding
the Claim and the Third Party Action, if any, as such party shall then have and shall contain a
statement to the effect that the party giving the notice is making a Claim pursuant to and formal
demand for indemnification under this Article 30.

          30.4 For purposes of this Article 30, the term “Indemnifying Party,” as to a
particular Claim or Third Party Action shall mean the party having or which is held to have an
obligation to indemnify the other party with respect to such Claim or Third Party Action pursuant
to this Article 30 and the term “Indemnified Party” as to a particular Claim or Third Party
Action shall mean the party having or which is held to have the right to be indemnified with
respect to such Claim or Third Party Action by the other party pursuant to this Article 30.

          30.5 Except as otherwise expressly provided herein, Indemnifying Party shall be entitled at
its cost and expense to contest and defend by all appropriate legal proceedings any Third Party
Action with respect to which it is called upon to indemnify Indemnified Party under the provisions
of this Agreement; provided, however, that with respect to any Claim arising from the assertion of
any Third Party Action, notice of the intention so to contest shall be delivered by Indemnifying
Party to Indemnified Party within 20 calendar days from the date of mailing by Indemnified Party of
notice to Indemnifying Party of the assertion of the Third Party Action. Any such contest with
respect to a Third Party Action may be conducted in the name and on behalf of Indemnifying Party or
Indemnified Party as may be appropriate. Except as otherwise expressly provided herein, such
contest shall be conducted by attorneys employed by Indemnifying Party, but Indemnified Party

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shall have the right to participate in such proceedings and to be represented by attorneys of its
own choosing at its sole cost and expense. If Indemnified Party joins in any such contest,
Indemnified Party shall have full authority to determine all action to be taken with respect
thereto. If after notice as provided for herein, Indemnifying Party does not elect to contest any
Third Party Action as provided in this Section 30.5, Indemnifying Party shall be bound by the
result obtained with respect thereto by Indemnified Party and Indemnified Party may (but shall have
no obligation to) contest any such Third Party Action or settle or admit liability with respect
thereto, all for the account of Indemnifying Party. At any time after the commencement of defense
of any such Third Party Action, Indemnifying Party may request Indemnified Party to agree in
writing to the abandonment of such contest or the payment or compromise by Indemnifying Party of
the asserted Third Party Action whereupon such action shall be taken unless Indemnified Party so
determines that the contest should be continued, and so notifies Indemnifying Party in writing
within 15 calendar days of such request from Indemnifying Party. In the event that Indemnified
Party determines that the contest should be continued, Indemnifying Party shall be liable with
respect to such Third Party Action only to the extent of the lesser of (a) the amount which the
third party making the Third Party Action had agreed to accept in payment or compromise as of the
time Indemnifying Party made its request therefor to Indemnified Party, or (b) such amount for
which Indemnifying Party may be liable with respect to such Claim by reason of the provisions
hereof.

          30.6 If requested by Indemnifying Party, Indemnified Party agrees to cooperate with
Indemnifying Party and its counsel in contesting any Third Party Action which Indemnifying Party
elects to contest or, if appropriate, in making any counterclaim against the third party making the
Third Party Action, or any cross complaint against any other person or entity not a party hereto,
but Indemnifying Party will reimburse Indemnified Party for any expenses incurred by it in so
cooperating.

          30.7 Indemnified Party agrees to afford Indemnifying Party and its counsel the opportunity to
be present at, and to participate in, conferences with all persons or entities, including
governmental authorities, making Third Party Action against Indemnified Party or conferences with
representatives of or counsel for such persons or entities.

          30.8 Indemnifying Party shall pay to Indemnified Party, upon demand, the amount of any Damages
to which Indemnified Party may become entitled by reason of the provisions of this Article 30,
including, if so demanded, reimbursement for all of the Indemnified Party’s reasonable expenses
(including reasonable attorneys’ fees and costs of court) for which the Indemnified Party is
entitled to be indemnified hereunder as they are incurred by such Indemnified Party; provided,
however, that if Indemnifying Party disputes its obligation to provide indemnification hereunder in
good faith, Indemnifying Party shall only be obligated to reimburse 50% of such expenses or Damages
until such dispute is settled, at which time Indemnifying Party or Indemnified Party shall pay to
the other such amounts as are determined to be owing to the other in the settlement of such
dispute, together with interest thereon at the Applicable Interest Rate, accruing each calendar day
from the calendar day such amount was originally due to Indemnified Party or paid by Indemnifying
Party, as the case may be, until the calendar day such amount is paid or refunded in full. In the
event that Indemnifying Party desires to appeal from an adverse judgment or determination, then
Indemnifying Party shall post and pay the cost of any security or bond to stay execution of the
judgment or determination pending appeal. Upon the payment in full by Indemnifying Party of all

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amounts owing hereunder in connection with a Third Party Action, Indemnifying Party shall succeed
to the rights of Indemnified Party, to the extent such rights are not waived in settlement, against
the third party making such Third Party Action. Any amounts which are not paid when due hereunder
shall bear interest at the Applicable Interest Rate.

     30.9 Notwithstanding Anything To The Contrary Contained Herein, Neither Of The Parties
Will Be Liable To The Other Party For Any Consequential, Indirect, Incidental, Special Or Punitive
Damages From Any Cause Whatsoever, Whether Based In Contract, Tort (Including Negligence), Strict
Liability Or Any Other Legal Theory Unless (a) Such Damages Result From The Gross
Negligence Or Intentional Misconduct Of Such Party Or Any Of Its Affiliates, Contractors Or
Employees Or (b) Such Damages Are Payable By An Indemnified Person Pursuant To A Third
Party Action For Which Indemnification Is Available Hereunder.

Article 31

Additional Rights and Liabilities

     Nothing contained in this Agreement shall require (a) BP to reimburse the Company for any
costs or expenses or to provide financial assurances if such costs or expenses are incurred or such
financial assurances are required for reasons attributable to a Company Event of Default or (b) the
Company to reimburse BP for any costs or expenses or to provide financial assurances if such costs
or expenses are incurred or such financial assurances are required for reasons attributable to a BP
Event of Default.

Article 32

Force Majeure

     32.1 In the event of either party being rendered unable, wholly or in part, by force majeure
to carry out its obligations under this Agreement (other than any obligation to make payment of any
amount when due and payable hereunder), the obligations of such party, so far as they are affected
by such force majeure, shall be excused during the continuance of any inability so caused provided
that the party prevented from performing by such force majeure event (a) provides the other party
with written notice of the occurrence of such force majeure event within a reasonable time after
the occurrence thereof, which notice shall describe such force majeure event in reasonable detail
and, to the extent practicable, include an estimate of the anticipated duration thereof, (b) takes
all actions reasonably necessary to remedy such force majeure event or its resulting effects, or
otherwise remove the basis for non-performance, as soon as practicable, and (c) upon such remedy or
removal resumes performance of its obligations under this Agreement.

     32.2 The term “force majeure,” as employed herein, shall mean acts of God, strikes,
lockouts or other industrial disturbances, acts of the public enemy, wars, blockades, embargoes,
insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, high water, washouts, arrests and restraints of government and people, civil disturbances,
explosions, breakage or accident to machinery, equipment, lines of pipe or property, freezing of
wells, machines,

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equipment, lines of pipe, or property, partial or entire failure of any machine, equipment, lines
of pipe or other property, the occurrence of any Spill or Release Requiring Response Action and any
regulatory, civil or criminal action with respect thereto and any other causes, whether of the kind
herein enumerated or otherwise, not reasonably within the control of the party claiming suspension;
such term shall likewise include (a) in those instances where any party hereto is required to
obtain servitudes, rights-of-way grants, permits or licenses (including permits relating to any
Spill or Release Requiring Response Action) to enable such party to fulfill its obligations
hereunder, the inability of such party to acquire, or delays on the part of such party in
acquiring, at reasonable cost and after the exercise of reasonable diligence, such servitudes,
rights-of-way grants, permits or licenses, (b) in those instances where any party hereto is
required to furnish materials and supplies or is required to secure permits or permissions from any
governmental agency to enable such party to fulfill its obligations hereunder, the inability of
such party to acquire, or delays on the part of such party in acquiring, at reasonable cost and
after the exercise of reasonable diligence, such materials and supplies, permits and permissions,
and (c) the failure of Praxair to deliver to the Company carbon monoxide or hydrogen at the times
and in the quantities required by the Praxair Product Supply Agreement; provided, however, that the
Company uses reasonable diligence to resolve such failure to deliver pursuant to the Praxair
Product Supply Agreement.

          32.3 It is understood and agreed that the settlement of strikes or lockouts shall be entirely
within the discretion of the party having the difficulty, and that the above requirement that any
force majeure shall be remedied with all reasonable dispatch shall not require the settlement of
strikes or lockouts by acceding to the demands of the opposing party when such course is
inadvisable in the sole discretion of the party having the difficulty.

          32.4 Notwithstanding the provisions of Section 32.2 hereof, the failure by either party to
perform any of its obligations under this Agreement shall be deemed not to have been caused by
circumstances reasonably outside its control if such failure results from breakage or accident to
machinery, equipment, lines of pipe or other property or the partial or entire failure thereof or
the necessity to make repairs or alterations thereto which result from normal wear and tear which
could be reasonably anticipated by a reasonably prudent operator or in circumstances where a
reasonably prudent operator would have standby equipment or spare parts.

Article 33

Assignments

          33.1 The Company may not assign its rights or delegate its duties or obligations hereunder or
sell, assign or transfer the Unit to any person unless such assignment, delegation, sale or
transfer is:

     (a) pursuant to a transaction involving the sale or exchange of all or substantially all
of the assets of the Plant or the merger or consolidation of the Company with or into another
corporation; provided, however, that, if the purchaser or acquirer of such assets or the other
party to such sale, exchange, merger or consolidation is a Competitor, the Company must first
obtain the prior written consent of BP, which consent may be granted or withheld by BP, in its
sole discretion;

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     (b) an assignment of this Agreement as collateral to a third party providing financing to
the Company;

     (c) a sale, assignment or transfer of the Unit only and BP has given its prior written
approval to such sale, assignment or transfer of the Unit, which approval by BP (i) shall not
be unreasonably withheld, delayed or conditioned by BP if such sale, assignment or transfer is
to a person who is not a Competitor (it being understood that if in BP’s good faith judgment,
the assignee, delegatee, purchaser or transferee would not be able to timely perform the
Company’s obligations under the Agreement, this would be a reasonable basis upon which to
withhold approval), or (ii) may be granted or withheld by BP, in its sole discretion, if such
sale, assignment or transfer is to a person who is a Competitor; provided, however, that any
such sale, assignment or transfer of the Unit must be consummated within six months after BP’s
approval thereof on terms and conditions that are not, in the aggregate, more favorable to the
transferee to a material degree than the terms and conditions approved by BP; or

     (d) an assignment of this Agreement to the other party to a transaction permitted under
clause (a) or (c) above;

provided, however, that notwithstanding the foregoing, Sterling may not assign its rights or
delegate its duties or obligations hereunder to any person or entity unless Sterling simultaneously
assigns all of its rights, interests, duties and obligations under the Acetic Acid Technology
Agreement, or any successor agreement to the Acetic Acid Technology Agreement, to the same person
or entity. An offering or issuance of securities by the Company or any sale of securities by the
Company’s existing stockholders shall not be deemed an assignment hereunder. No assignment or
delegation by the Company of any of its rights, interests, duties or obligations hereunder shall
relieve the Company of its obligations and duties under this Agreement unless BP expressly agrees
otherwise in writing.

          33.2 BP may not assign its rights or delegate its duties or obligations hereunder or sell,
assign or transfer all or a substantial part of its acetic business in the Americas without the
prior written consent of the Company, which consent shall not be unreasonably withheld, delayed or
conditioned; provided, however, that, subject to Section 33.3, BP may assign its rights or delegate
its duties and obligations hereunder or sell, assign or transfer all or any part of its acetic acid
business to any person without the consent of the Company provided that:

     (a) such assignee, delegatee, purchaser or transferee is not a Competitor, or such
assignee, delegatee, purchaser or transferee is an Affiliate of BP; and

     (b) such assignee, delegatee, purchaser or transferee is of sound financial condition
and, in BP’s good faith judgment, able timely to perform BP’s obligations under this
Agreement.

During the Term, BP shall not assign its rights or delegate its duties or obligations hereunder or
sell, assign or transfer all or a substantial part of its acetic acid business in the Americas to a
Competitor without the prior written consent of the Company, which consent shall not be
unreasonably withheld, delayed or conditioned; provided, however, that, subject to Section 33.3, BP
may assign its rights or

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delegate its duties and obligations hereunder or sell, assign or transfer all or any part of its
acetic acid business to a Competitor without the consent of the Company if such sale is made as
part of or pursuant to a Major Transaction.

          33.3 Notwithstanding any assignment of any of its rights or a delegation of any of its duties
by BP under this Agreement, BP shall continue to be responsible for its obligations hereunder, and
does hereby unconditionally and absolutely guarantee the timely payment of all sums due, and the
timely performance of all obligations, by any assignee or delegatee hereunder; provided, however,
that if (a) BP assigns its rights or delegates its duties hereunder and (b) the assignee or
delegatee has a net worth of at least ***** after such assignment or delegation and assumes in
writing the obligations of BP under this Agreement, then (i) the condition specified in Section
33.2(b) shall be deemed to have been satisfied, (ii) the conditions, restrictions and limitations
contained in this Section 33.3 shall not apply to such assignment of rights or delegation of duties
or obligations and (iii) after such assignment of rights or delegation of duties, BP shall be
relieved of all of its obligations that were assigned or delegated hereunder, and no guarantee by
BP of the payment of sums or timely performance of such obligations by such assignee or delegatee
shall exist by virtue of this Section 33.3. Upon the written request of the Company, BP shall
execute a separate written guarantee of the performance of BP’s obligations hereunder by any such
assignee or delegatee (other than an assignee or delegatee described in the proviso to the first
sentence of this Section 33.3), containing provisions usually and customarily contained in
guarantees of financial performance in the United States. On default by any assignee or delegatee
(other than an assignee or delegatee described in the proviso to the first sentence of this Section
33.3), the Company or the holder of a collateral assignment of this Agreement may, at its option,
proceed directly and at once against BP to enforce BP’s obligations hereunder, and exercise all
remedies available hereunder, without notice to such assignee or delegatee or the necessity for
proceeding or taking any action against such assignee or delegatee.

          33.4 Any attempted assignment or delegation by either party hereto not otherwise permitted
hereby which is made without the prior written consent of the other party shall be ineffective and
void for all purposes.

Article 34

General

          34.1(a) Except as otherwise provided in Section 34.1(c), the Company covenants and agrees with
BP that, during the Term, if no BP Event of Default has occurred and is continuing for which the
Company has delivered to BP a Declaration of BP Default, the Company will not produce or sell
acetic acid other than pursuant to this Agreement without BP’s consent, which consent may be
granted or withheld by BP in its sole discretion; provided, however, that the disposition of waste
or mixed acid pursuant to mutually agreed procedures shall be permitted and shall not constitute a
violation of this Agreement.

          (b) Notwithstanding anything to the contrary contained in this Agreement (except the remainder
of this Section 34.1(b)), in the event that the Deemed Total Sales Volume averages less than the
Minimum Sales Volume over the last ***** Months (unless such failure is caused by the

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failure of the Company to produce and deliver such Acetic Acid, including without limitation
failures resulting from any scheduled or unscheduled shutdowns of the Unit (other than shutdowns
caused solely by BP not nominating Acetic Acid in quantities sufficient to operate the Unit), an
event of force majeure or an outage of or production problem at the Texas City VAM Facility), then,
in the next Month:

     (i) of all acetic acid sold or imported by BP or any Affiliate of BP into ***** in such
Month (including sales or imports arranged by BP or an Affiliate of BP), at least ***** of
such acetic acid must be Acetic Acid (produced in the Unit), unless, in each case, the Company
otherwise agrees in writing in its sole discretion;

     (ii) BP will not, and will cause each of its Affiliates to not, enter into any acetic
acid purchase agreements if the acetic acid to be purchased thereunder will be used, consumed
or resold in *****;

     (iii) BP will, and will cause each of its Affiliates to, terminate as soon as practicable
all of its existing acetic acid purchase agreements if the acetic acid to be purchased
thereunder will be used, consumed or resold in *****; and

     (iv) BP will not, and will cause each of its Affiliates to not, sell or import, or
arrange the sale or import of, any acetic acid that is not Acetic Acid (produced in the Unit),
into *****,

unless, in each case, the Company consents in writing to such activity or transaction, in its sole
discretion. In the event that the above restrictions apply to any Month, such restrictions will
continue thereafter unless and until the Deemed Total Sales Volume averages at least the Minimum
Sales Volume over the last ***** Months, at which time the obligations of BP under this Section
34.1(b) will cease until triggered again; provided, however, that solely for purposes of this
Section 34.1(b), the Deemed Total Sales Volume for any such Month shall be increased by the
aggregate number of pounds of Acetic Acid that were nominated for delivery by BP for such Month but
were not delivered by the Company to BP in such Month due to a scheduled or unscheduled shutdown of
the Unit, a breach of this Agreement by the Company, an event of force majeure or an outage of or
production problem at the Texas City VAM Facility.

          (c) Notwithstanding anything to the contrary contained in this Agreement (except the remainder
of this Section 34.1(c)), in the event that Deemed Total Sales Volume averages less than the
Minimum Sales Volume over the last ***** Months (unless such failure is caused by the failure of
the Company to produce and deliver such Acetic Acid, including without limitation failures
resulting from any scheduled or unscheduled shutdowns of the Unit (other than shutdowns caused
solely by BP not nominating Acetic Acid in quantities sufficient to operate the Unit), an event of
force majeure or an outage of or production problem at the Texas City VAM Facility), then, in the
next Month, in addition to the restrictions in Section 34.1(b) above, the Company may use all or
any portion of the Unit Capacity available after producing all amounts of Acetic Acid nominated and
accepted for delivery by BP in such Month to produce and sell acetic acid by itself and the Company
may enter into contracts for the sale of acetic acid with a length of not more than 12-months (each
such contract with a length of more than one month, a “Company Sales Contract”); provided,
however, that (i) the Company may not sell acetic acid pursuant to this Section 34.1(c) to any

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customer that is purchasing ***** of its acetic acid requirements from BP if BP is fulfilling, and
has over the last ***** Months fulfilled, substantially all of its obligations to such customer
with Acetic Acid produced in the Unit or acetic acid which otherwise is taken into account in the
definition of Profit hereunder, and (ii) the Company shall not sell, transfer or supply acetic acid
to itself or any of its Affiliates (other than pursuant to Supplied Acetic Acid arrangements
existing prior to such right arising) unless the price of acetic acid for such sale, transfer or
supply to the Company or such Affiliate (in either case, as the purchaser) is greater than or equal
to the price that would result pursuant to Exhibit F attached hereto and such sale, transfer or
supply is otherwise on terms and conditions typical for the acetic acid industry in North America.
The Company shall give prompt written notice to BP if the Company decides to produce and sell
acetic acid by itself pursuant to this Section 34.1(c). During any period when the Company is
producing acetic acid for sale by itself pursuant to this Section 34.1(c), (i) BP shall provide any
Catalyst and Methanol required to produce such acetic acid at a price determined by using the same
pricing mechanisms as are then being used under this Agreement for the provision of Catalyst or
Methanol, as applicable, used to produce Acetic Acid for BP pursuant to this Agreement, (ii) BP
shall reimburse the Company for all all Fixed Costs, Variable Costs and other costs and expenses
associated with producing the acetic acid sold by the Company pursuant to this Section 34.1(c) to
the same extent as if the Company had supplied such acetic acid to BP, (iii) the gross sales
revenue from any such sales shall be deducted by the Company from the invoices submitted to BP
pursuant to Section 6.3, (iv) the gross sales revenues from any such sales shall be included in
Profit for the relevant Calendar Year, (v) BP shall allow the Company to use the Oiltanking
Pipeline if it is still in operation; provided, however, that the Company pays BP a reasonable
throughput fee for all Acetic Acid or Unit Product delivered through the Oiltanking Pipeline, and
(vi) the Company shall not in any Month be required to deliver to BP a quantity of Acetic Acid that
would exceed 1/12th of the Unit Capacity minus the aggregate number of pounds of acetic acid that
Company is committed to sell in such Month under the Company Sales Contracts, it being the express
intent of the parties that, on a net basis, the financial and other economic consequences resulting
from any such production and sales by the Company will be identical to those that would have
resulted if such Acetic Acid has been produced by the Company and sold by BP. In the event that
the Company is permitted to use all or any portion of the Unit Capacity to produce and sell Acetic
Acid by itself in any Month, such permission will continue thereafter unless and until the Deemed
Total Sales Volume averages at least the Minimum Sales Volume over the last ***** Months, at which
time the rights of the Company under this Section 34.1(c) will cease until triggered again, and BP
shall assume the obligations of the Company to deliver acetic acid under the Company Sales
Contracts; provided, however, that solely for purposes of this Section 34.1(c), the Deemed Total
Sales Volume for any such Month shall be increased by the aggregate number of pounds of Acetic Acid
that were nominated for delivery by BP for such Month but were not delivered by the Company to BP
in such Month due to a scheduled or unscheduled shutdown of the Unit, a breach of this Agreement by
the Company, an event of force majeure or an outage of or production problem at the Texas City VAM
Facility.

          (d) *****

          (e) *****

          34.2 Taxes. (a) Upon receipt of invoice therefor, BP shall remit to the Company all
Company Taxes.

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          (b) The parties recognize that, during the Term, major changes may occur in the system of
federal, state and local taxation at the location of the Unit, which may materially alter the
existing federal, state and local property, energy, franchise, income and sales tax systems
presently in effect. In the event of such alteration, the parties agree to equitably adjust all
formulas in this Agreement to reflect such changes.

          (c) BP, at its sole cost and expense, shall be responsible for and pay any state or local
property tax attributable to the Acetic Acid and Unit Product produced hereunder and to the
Methanol provided by BP hereunder, which taxes shall not be considered in determining Profit.

          34.3 Notices. Except as otherwise provided herein, and except for routine
communications relating to the production and sale of Acetic Acid or Unit Product, any and all
notices, requests or other communications hereunder shall be given in writing and delivered by (a)
regular, overnight or registered or certified mail (return receipt requested), with first class
postage prepaid, (b) hand delivery, (c) facsimile or electronic transmission or (d) overnight
courier service, to the parties at the following addresses or numbers:

	 	 	 	 	 	 	 
	 

	 	(i)
	 	Company:
	 	Sterling Chemicals, Inc.
	 

	 	 	 	 	 	333 Clay Street, Suite 3600
	 

	 	 	 	 	 	Houston, Texas 77002
	 

	 	 	 	 	 	Attention: Director of Corporate Alliances
	 
	 	 	 	 	 	 
	 	 	 	 	With a copy to:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Sterling Chemicals, Inc.
	 

	 	 	 	 	 	333 Clay Street, Suite 3600
	 

	 	 	 	 	 	Houston, Texas 77002
	 

	 	 	 	 	 	Attention: General Counsel
	 
	 	 	 	 	 	 
	 

	 	(ii)
	 	BP:
	 	BP Amoco Chemical Company
	 

	 	 	 	 	 	150 West Warrenville Road
	 

	 	 	 	 	 	Naperville, Illinois 60563
	 

	 	 	 	 	 	Attention: General Manager, Acetyls
	 
	 	 	 	 	 	 
	 	 	 	 	With a copy to:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	BP Amoco Chemical Company
	 

	 	 	 	 	 	150 West Warrenville Road
	 

	 	 	 	 	 	Naperville, Illinois 60563
	 

	 	 	 	 	 	Attention: Business Manager, Acetyls
	 
	 	 	 	 	 	 
	 

	 	 	 	and	 	 

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	 	 	 	 	 	BP Amoco Chemical Company
	 

	 	 	 	 	 	4101 Winfield Road
	 

	 	 	 	 	 	Warrenville, Illinois 60555
	 

	 	 	 	 	 	Attention: Attorney, Acetyls

or at such other address or number as shall be designated by either party in a notice to the other
party given in accordance with this Section. Except as otherwise provided in this Agreement, all
such communications shall be deemed to have been duly given, (A) in the case of a notice sent by
regular mail, on the date actually received by the addressee, (B) in the case of a notice sent by
registered or certified mail, on the date receipted for (or refused) on the return receipt, (C) in
the case of a notice delivered by hand, when personally delivered, (D) in the case of a notice sent
by facsimile or electronic transmission, upon transmission subject to telephonic or electronic
confirmation of receipt, and (E) in the case of a notice sent by overnight mail or overnight
courier service, the date delivered at the designated address, in each case given or addressed as
aforesaid.

          34.4 Controlling Law. This Agreement And The Rights And Obligations Of The
Parties Hereunder Shall Be Governed By And Construed In Accordance With The Laws Of The State Of
Texas, Without Giving Effect To The Conflict Of Law Principles Thereof.

          34.5 Heading. The headings and titles to the Articles and Sections of this Agreement
are inserted for convenience only and shall not be deemed a part hereof or affect the construction
or interpretation of any provision hereof.

          34.6 Modifications and Waivers. No amendment, modification, restatement or supplement
of this Agreement shall be valid unless the same is in writing and signed by the parties. No
amendment or modification of this Agreement shall be effected by the sending, acknowledgment or
acceptance of any purchase order, acknowledgment or other form containing terms or conditions at
variance with or in addition to those set forth in this Agreement. No waiver of any provision of
this Agreement shall be valid unless in a writing that specifically states that it is a waiver
under this Agreement that is signed by the party against whom that waiver is sought to be enforced.
No failure or delay on the part of either party in exercising any right, power or privilege
hereunder, and no course of dealing between the parties, shall operate as a waiver of any right,
power or privilege hereunder. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise of any other right,
power or privilege hereunder. No notice to or demand on either party in any case shall entitle
such party to any other or further notice or demand in similar or other circumstances (unless
otherwise required hereunder) or constitute a waiver of the rights of either party to any other or
further action in any circumstances without notice or demand.

          34.7 Entire Agreement; Integration. It is the intent of the parties that this
Agreement, together with the Acetic Acid Technology Agreement and the Mutual Release and Settlement
Agreement dated August 20, 2008 (the “Settlement Agreement”), constitute one integrated
agreement, which together shall contain the entire agreement between or among the parties hereto
and BPCL, and set forth all of the promises, agreements, conditions, understandings, warranties and
representations between or among the parties and BPCL with respect to the matters contemplated

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hereby and thereby, and supersede all prior proposals, understandings, representations, warranties,
agreements and arrangements between or among the parties and BPCL concerning the subject matter
hereof or thereof, whether written, oral or otherwise, express or implied, except as expressly
stated herein or therein. No representation or warranty or agreement, oral or otherwise, between
or among the parties and BPCL not embodied in this Agreement or in the Acetic Acid Technology
Agreement or the Settlement Agreement shall be of any force or effect. Either BP or the Company,
to the extent that such party is not then in default under this Agreement, may set off against any
amount it owes to the other under the terms of this Agreement, any amount then due and owing to it
from the other under the terms of the Acetic Acid Technology Agreement or the Settlement Agreement,
it being the intent of the parties that all amounts due and owing as between such parties under
this Agreement, the Acetic Acid Technology Agreement and the Settlement Agreement be netted, and
treated as a single net balance owing from one party to the other. The parties hereby acknowledge
that they have relied on the terms and provisions of this Section 34.7 in deciding to enter into
this Agreement, the Acetic Acid Technology Agreement and the Settlement Agreement and the parties
further acknowledge that each of such agreements is critical to the arrangement whereby BP agrees
to receive and pay for, and the Company agrees to produce and deliver to BP, Acetic Acid in such
amounts as requested by BP in the manner provided in this Agreement.

          34.8 Severability. Any provisions hereof prohibited by or unlawful or unenforceable
under any applicable law of any jurisdiction shall be ineffective as to such jurisdiction, without
affecting any other provision of this Agreement, or shall be deemed to be severed or modified to
conform with such law, and the remaining provisions of this Agreement shall remain in force,
provided that the purpose of this Agreement can be effected. To the full extent, however, that the
provisions of such applicable law may be waived, they are hereby waived, to the end that this
Agreement is deemed to be a valid and binding agreement enforceable in accordance with its terms.

          34.9 Counterparts; Electronic Signatures. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all of such counterparts
together shall constitute but one and the same instrument. A signature of a party transmitted to
the other party by such party by facsimile, PDF or other agreed upon electronic means shall
constitute the original signature of such party for all purposes.

          34.10 Binding on Successors. This Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective successors and permitted assigns.

          34.11 Public Statements. The parties hereto agree to consult with one another prior
to issuing any public announcement or statement with respect to the transactions contemplated
herein unless the party issuing such statement believes in good faith that it is required to make
such statement under applicable law.

          34.12 No Partnership or Agency. This Agreement shall not be construed to create a
partnership, joint venture, association or other entity or business organization or to create a
principal-agent relationship between the Company and BP.

          34.13 Wire Transfer, Etc. All sums and amounts payable or to be payable pursuant to
this Agreement shall be payable in immediately available funds and in coin or currency of the
United

-53-

 

States of America that, at the time of payment, is legal tender for the payment of public and
private debts in the United States of America and shall be made by wire transfer of immediately
available funds to such bank and/or account in the continental United States for the account of the
payee as from time to time the payee shall have directed to the payor in writing, or, if no such
direction shall have been given, by check to the payee in the manner and at the address set forth
above. Whenever in this Agreement BP is required to pay or reimburse the Company upon receipt of
an invoice or otherwise when no due date for payment is specifically provided, payment shall be due
ten Business Days after receipt of an invoice or other statement, and shall be made in the manner
set forth above.

          34.14 Oiltanking Pipeline. As of the date of signature of this Agreement, the parties
are planning the construction of the Oiltanking Pipeline. BP has decided to construct or cause to
be constructed the Oiltanking Pipeline, and the Company has elected to participate in the
Oiltanking Pipeline construction project. BP shall construct (or engage others to construct) the
Oiltanking Pipeline. The Company shall reimburse BP for ***** of the costs and expenses incurred
by BP in connection with the construction of the Oiltanking Pipeline on a Monthly basis at the same
times and on the same terms and conditions as those provided for payments by BP to the Company
pursuant to Section 6.3 (which may be netted), unless otherwise agreed. BP shall hold title to the
Oiltanking Pipeline and be responsible for operating and maintaining, or causing the operation and
maintenance of, the Oiltanking Pipeline, unless otherwise agreed. The Company shall have the same
types of rights and remedies at and after the expiration or termination of this Agreement with
respect to the undepreciated portion of any capital paid by the Company (either directly or
indirectly through reimbursements paid to BP) in connection with the construction of the Oiltanking
Pipeline as are provided to BP in this Agreement with respect to the After Acquired Assets. BP
shall have the same types of rights and remedies at and after the expiration or termination of this
Agreement with respect to fixed costs associated with the Oiltanking Pipeline that could not be
eliminated as are provided to the Company in Section 2.3(b) of this Agreement with respect to fixed
costs associated with the Unit that could not be eliminated.

          34.15 Changes in Percentages. In the event that the percentage share of Profit
constituting the Company Profit Share is at any time hereafter changed by mutual agreement of the
parties in writing, (a) the figure “*****” shall, in each instance where it appears herein, be
automatically amended without any further action of the parties to the same percentage as the
percentage share of Profit thereafter constituting the Company Profit Share and (b) the figure
“*****” shall, in each instance where it appears herein, be automatically amended without any
further action of the parties to the same percentage as the percentage share of Profit thereafter
constituting the BP Profit Share.

          34.16 No Known Disputes. Other than those disputes that are described in and settled
pursuant to the Settlement Agreement, as of the date of this Agreement, the Company and BP agree,
acknowledge and confirm that there are no known disputes pending between them arising out of or
relating to this Agreement which are unresolved.

-54-

 

          In Witness Whereof, the parties have executed this Agreement on the date first above
written, but effective as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 
	BP Amoco Chemical Company	 	 	 	Sterling Chemicals, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	/s/ Paul Watson	 	 	 	By:	/s/ John V. Genova	 	 
	 

	 

	 	 	 
	 

	 
	Printed
Name:  

	Paul
Watson 

	 	 	 	Printed Name:  
	John
V. Genova 

	 
	
	
					
		
	Title:

	General
Manager, Acetyls Americas

	 	 	 	Title:
	President
and Chief Executive Officer 

	 	 
	 
	 
	 	 	 	 	 
	 	 

-55-

 

Exhibit A

Company Fixed Costs

*****

A forecast of the Company Fixed Costs for the 2008 Contract Year is attached hereto as Schedule 1.
Such forecast is being provided for planning purposes only and shall not reduce, eliminate or
otherwise affect in any way BP’s obligation to reimburse the Company for 100% of actual Company
Fixed Costs during the 2008 Contract Year.

A-i

 

Schedule 1

2008 Company Fixed Costs Forecast

*****

A-ii

 

Exhibit B

Methanol Specifications

*****

B-i

 

Exhibit C

Acetic Acid Specifications

*****

C-i

 

Exhibit D

Legal Description of the Land of the Unit

(Attached)

D-i

 

Exhibit E

Variable Costs

*****

E-i

 

Exhibit F

Acetic Acid Transfer Price Formula

	 	 	*****

F-iexv10w2

Exhibit 10.2

Sterling Chemicals, Inc.

2008 Bonus Plan

(Executives)

Eligibility:

          Our President and Chief Executive Officer and each of our Senior Vice Presidents (our
“Executives”) are eligible to receive cash bonuses under our 2008 Bonus Plan (Executives).
To be paid a bonus, an Executive must be employed by us at the time bonuses are paid, unless the
Executive has retired, died or become disabled, in which event a pro rata bonus payment will be
made based on full months of service for the relevant year.

Payment Structure:

          Under our 2008 Bonus Plan (Executives), the amount of bonus payable to each of our Executives
for any year is determined by the Executive’s Bonus Target and performance during that year
relative to corporate goals and individual goals. An Executive’s “Bonus Target” is a
stated percentage of the Executive’s annual base salary set by our Compensation Committee or our
Board of Directors. The maximum amount of bonus that can be earned by an Executive for any year is
100% of his or her Bonus Target for performance relative to corporate goals and 100% of his or her
Bonus Target for performance relative to individual goals.

          The corporate goals under our 2008 Bonus Plan (Executives) are based on:

	 	•	 	the number of employee OSHA recordable injuries experienced during the year;
	 
	 	•	 	the number of environmental incidents experienced during the year;
	 
	 	•	 	the number of process safety management incidents experienced during
the year (subject to meeting all process safety management
regulations); and
	 
	 	•	 	the amount of “Adjusted EBITDA” earned during the year.

Our Board of Directors has set threshold, target and maximum goals for each of these categories for
performance in 2008 as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	             Goal	 	Threshold	 	Target	 	Maximum	 	 	 	 
	Employee OSHA

Recordable Injuries
	 	 	2	 	 	 	1	 	 	 	0	 	 	 	10	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Environmental Incidents(1)
	 	 	3	 	 	 	2	 	 	 	1	 	 	 	10	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Process Safety

Management Incidents(2)
	 	 	3	 	 	 	2	 	 	 	1	 	 	 	10	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted EBITDA(3)
	 	$	14.5M	 	 	$	17.5M	 	 	$	20.5M	 	 	 	70	%

 

 

 

			
	(1)	 	Environmental Incidents defined as:

	 	•	 	Unauthorized air emissions that must be reported to outside agencies
plus
	 
	 	•	 	Regulatory violations resulting in a Notice of Enforcement (NOE) that
are not resolved Administratively plus
	 
	 	•	 	Releases of chemicals to soil that must be reported to outside agencies plus
	 
	 	•	 	Releases of chemicals to state waterways (excluding those caused by Acts of God) plus
	 
	 	•	 	Any other environmental incidents that require immediate notification
to state or federal agencies (e.g. fire/explosion with potential impact outside the
facility).

	(2)	 	All Process Safety Management regulations must be met to qualify. Process
Safety Management Incidents defined as any incident in which a significant fire,
explosion, chemical release or injury occurs due to the direct involvement of a
chemical process, including any fire or explosion causing more than $50,000 in direct
cost to Sterling, a chemical release to the environment which exceeds a regulated
quantity or a serious injury attributed to such an event resulting in at least one lost
work day. All incidents caused by Acts of God are excluded (e.g., rainfall events).
	 
	(3)	 	Adjusted EBITDA defined as EBITDA excluding impairments, staff reduction
impacts on benefit plans (e.g., plan curtailments, remeasurement impacts), severance
and accruals for payments under the Bonus Plan.

          At the end of each calendar year, the amount of bonus payable to each Executive for
performance relative to corporate goals is determined by multiplying that Executive’s Bonus Target
times the aggregate percentage earned during that year for performance against corporate goals
times 50%. Aggregate percentage is determined using the table above with the relevant percentage
from the table being multiplied by 0.5 if Threshold level is achieved, 1.0 if Target level is
achieved and 2.0 if Maximum level is achieved. Performance relative to any specific corporate goal
that is in between the established levels is prorated on a straight line basis. As an example, if
an Executive has a base salary of $200,000 and Bonus Target of 40% and we achieved Target level for
Adjusted EBITDA and Maximum level for OSHA Recordable Injuries, Environmental Incidents and Process
Safety Management Incidents, the Executive’s bonus for performance relative to corporate goals
would be:

	 	•	 	$200,000 times 40% (or $80,000) times aggregate percentage
earned during the year times 0.5 with the aggregate percentage
being:

	 	 	 	 	 	 	 	 	 
	OSHA Recordable Injuries 
	 	 	20	%	 	 	(10% @ 2X = 20%)	 
	Environmental Incidents 
	 	 	20	%	 	 	(10% @ 2X = 20%)	 
	Process Safety Incidents 
	 	 	20	%	 	 	(10% @ 2X = 20%)	 
	Adjusted EBITDA 
	 	 	70	%	 	 	(70% @ 1X = 70%)	 
	 
	 	 	 	 	 	 	 	 
	Aggregate Percentage 
	 	 	130	%	 	 	 	 

As a result, the bonus for the Executive in the example for performance relative to corporate goals
would be $80,000 times 130% times 0.5, or $52,000.

          The bonus payable to each Executive under our 2008 Bonus Plan (Executives) for performance
relative to individual goals is determined by that Executive’s performance against individual
performance metrics set for 2008 by our Board of Directors or Compensation Committee using the same
calculation principles as are used for performance relative to corporate goals.

-2-

 

          Irrespective of our performance relative to corporate goals or an Executive’s performance
relative to individual goals, no bonuses are payable to any of our Executives under our 2008 Bonus
Plan (Executives) if we do not attain at least the Threshold level for Adjusted EBITDA for the
relevant year unless our Compensation Committee elects, in its sole discretion, to pay bonuses to
our Executives.

Payment.

          At the end of each year, each Executive’s performance under his or her individual goals will
be determined, our performance under the OSHA Recordable Injuries, Environmental Incidents and
Process Safety Management Incidents goals will be determined and our financial statements will be
audited and presented to our Audit Committee for approval. The results of the audit will determine
the amount of Adjusted EBITDA earned during that year and, consequently, a portion of the amount of
the bonuses to be paid under our 2008 Bonus Plan (Executives) for performance relative to corporate
goals. Once our Audit Committee has approved the audit for the year, bonus amounts for each
Executive for that year will be determined, and the bonus payments will be made in any event on or
before March 14. Bonuses are paid in a single lump sum after all taxes have been withheld. The
payment of a bonus does not, however, affect the Executive’s base pay in any manner and has no
impact on the amount or level of benefits under any of our other benefit plans.

Payment Reductions.

          The amount of bonus paid to an employee under our 2008 Bonus Plan (Executives) assumes
continued employment with us in active status throughout the year. For purposes of our 2008 Bonus
Plan (Executives), active status is made up of regular hours worked, vacation time, jury duty,
service as a witness under court subpoena, funeral leave and military leave. Non-active status
includes all other absences from work for any reason, including illness, injury, personal business,
doctor’s appointment, excused absence, family illness, leave of absences and personal leave, etc.
Once the amount of bonus to be paid to each Executive is determined, an Executive’s bonus may be
reduced if the Executive has accumulated absences totaling at least 44 working days (352 hours for
shift workers) during the year for which the bonus is being paid. The amount of reduction will be
16.67% for the first 44 working days of non-active status plus an additional 8.33% reduction for
each additional 22 working days of non-active status during the year for which the bonus is being
paid.

          The amount of bonus paid to any Executive who was hired after July 1 of the year for which the
bonus is being paid will be pro rated based on the number of full months of service during that
year. The amount of bonus paid to any Executive who became eligible under our 2008 Bonus Plan
(Executive) in the first half of the year due to a promotion or change in job classification or
being hired will not be pro rated due to such promotion, job reclassification or hiring (i.e., all
months of service with us during that year will be treated as if they were performed in the
Executive’s most recent position).

-3-

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