Document:

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                                                                   EXHIBIT 10.12

                            ENVIRONMENTAL AGREEMENT
                            -----------------------

     This Environmental Agreement ("AGREEMENT") dated this 1st day of November,
2000, is made between Shell  Petroleum N.V., a company organized under the laws
of the Netherlands ("SELLER"), and Shell Epoxy Resins, LLC, a Delaware limited
liability company ("SER", and SER collectively with SELLER, the "PARTIES").

     WHEREAS, the Parties have entered into a Sale Agreement dated July 10,
2000, whereby SER will be recapitalized as provided therein ("SALE AGREEMENT").

     WHEREAS, it is a condition to Closing under the Sale Agreement that the
Parties hereto enter into this Agreement.

     NOW, THEREFORE, the Parties hereto agree as follows:

1.   Definitions/Procedural Conventions
     ----------------------------------

     (A)  Unless the context shall otherwise require, terms used and not defined
          herein or in Schedule 1 hereto shall have the meanings set forth in
          Schedule A to the Sale Agreement, and all rules as to usage and
          procedural conventions set forth in Schedule A to the Sale Agreement
          shall govern this Agreement unless otherwise provided herein.
          Articles  4, 5 and 6 (except for Article 6.06 (Successors/Assigns)) of
                                                         ------------------
          Schedule A to the Sale Agreement are hereby incorporated by reference
          herein and shall control as to the matters set forth therein as if
          stated in their entirety herein, subject to the express provisions of
          this Agreement.

     (B)  In the event of any inconsistency, this Agreement shall prevail over
          the Sale Agreement.

2.   SELLER's Indemnification Obligation
     -----------------------------------

2.1  Subject to Sections 2.2 to 2.11, SELLER shall indemnify, defend, save and
     hold harmless the SER Indemnified Parties from and against all
     Environmental Damages imposed upon or incurred by the SER Indemnified
     Parties, resulting from:

     (A)  an Environmental Claim or Voluntary Remediation Requirement in respect
          of any Site Contamination Issues;

     (B)  an Environmental Claim in respect of any Exposure Issues;

     (C)  an Environmental Claim or Voluntary Remediation Requirement in respect
          of any Disposal Issues; or

     (D)  an Environmental Claim or Voluntary Remediation Requirement in respect
          of any Non-compliance Issues,

     in each case, to the extent that such Environmental Condition occurred or
     existed prior to the Closing Date.
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2.2

     (A)  SELLER's obligations under

               (a)  Section 2.1 (D) of this Agreement in relation to Non-
                    compliance Issues, other than with respect to the Listed
                    Non-US Compliance Issues; and

               (b)  under Section 2.1(A) of this Agreement in relation to the
                    Site Contamination Issues at the Barbastro Facility; and

     (B)  SOC's  obligations under

               (a)  Sections 2.1(D) of the US Environmental Agreement in
                    relation to Non-compliance Issues, other than with respect
                    to the Listed US Compliance Issues; and

               (b)  under Section 2.1 (A) of the US Environmental Agreement in
                    relation to Site Contamination Issues at the Lakeland
                    Facility, other than with respect to the Known Lakeland Site
                    Contamination Issues,

     in the aggregate shall be limited to $10,000,000.

2.3  SER Indemnified Parties shall not be entitled to indemnity under Section
     2.1 of this Agreement unless and until the SER Indemnified Parties have
     incurred Environmental Damages of $1,000,000 in the aggregate which would
     be recoverable under this Agreement and/or under the US Environmental
     Agreement but for this Section 2.3 of this Agreement and Section 2.3 of the
     US Environmental Agreement (the "DEDUCTIBLE AMOUNT") and the indemnity in
     Section 2.1 of this Agreement shall be limited to the excess over the
     Deductible Amount, provided that the Deductible Amount shall not apply to
     and shall not include the Listed US Compliance Issues, the Listed Non-US
     Compliance Issues or the Known Lakeland Site Contamination Issues.

2.4  SER Indemnified Parties shall not be entitled to indemnity under Section
     2.1 of this Agreement in relation to a Listed Non-US Compliance Issue
     unless and until the SER Indemnified Parties have incurred Environmental
     Damages which:-

     (A)  would be recoverable under this Agreement in relation to Listed Non-US
          Compliance Issues but for this Section 2.4 of this Agreement and/or
          under the US Environmental Agreement in relation to Listed US
          Compliance Issues but for Section 2.4 of the US Environmental
          Agreement; and

     (B)  were incurred on or before the relevant Listed Items Expiry Date; and

     (C)  such Environmental Damages in aggregate exceed the Listed Items
          Deduction
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     and the indemnity under Section 2.1 of this Agreement in relation to the
     Listed Non-US Compliance Issues and the indemnity under Section 2.1 of the
     US Environmental Agreement in relation to the Listed US Compliance Issues
     shall be limited to (i) 100% of such excess up to a maximum of $10,000,000;
     and (ii) 80% of any such excess over $10,000,000.

2.5  SELLER shall have no obligation with respect to any Environmental Damages
     arising from:-

     (A)  any Non-compliance Issues (other than the Listed Non-US Compliance
          Issues) unless the relevant Environmental Claim or Voluntary
          Remediation Requirement has arisen and the relevant Indemnity Claim is
          asserted in accordance with this Agreement  within three (3) years of
          the Closing Date; or

     (B)  any Site Contamination Issues at the Barbastro Facility unless the
          relevant Environmental Claim has arisen and the relevant Indemnity
          Claim  is asserted within five (5) years of the Closing Date.

2.6  Notwithstanding anything herein to the contrary, the SER Indemnified
     Parties shall not be entitled to claim or seek indemnity or defense under
     this Agreement to the extent that the relevant Environmental Damages result
     from or are increased by (and only including the amount of Environmental
     Damages which so results or is so increased):

     (A)  any Change of Use by SER Indemnified Parties at all or a significant
          portion of the relevant Real Property after the Closing Date; or

     (B)  except (i) in relation to the Wesseling Facility, the Stanlow
          Facility, the Louvain-la-Neuve Facility and the Amsterdam Facility
          (ii) where due to the default of the SELLER in performing its
          obligations under the Continuing Affiliate Contracts (as defined in
          the Sale Agreement); or (iii) where due to the expiry and non-renewal
          of any of the Continuing Affiliate Contracts, other then where the
          relevant SER Indemnified Party has not accepted an offer of renewal on
          commercially reasonable terms, any closure or temporary (other than
          for the purposes of operation or maintenance) or permanent cessation
          of substantially all of the operations of the Business at the relevant
          Real Property after Closing, but only to the extent of such
          Environmental Damages resulting from requirements under Environmental
          Law which are directly triggered by any such closure or cessation.

2.7  Notwithstanding anything herein to the contrary, the SER Indemnified
     Parties shall not be entitled to claim or seek indemnity or defense under
     this Agreement where the relevant Environmental Claim or Remediation
     Activities results from or would not have arisen but for any below ground
     investigation of soil or groundwater or other surface or sub-surface water
     ("INVESTIGATION") or disclosure ("DISCLOSURE") by SER Indemnified Parties
     after the Closing Date (in relation to the Pernis Facility) or after the
     third anniversary of the Closing Date (in relation to other Real Property)
     except for Permitted Investigation and Disclosure. "PERMITTED INVESTIGATION
     AND DISCLOSURE" under this Agreement means Investigation and Disclosure
     which was:
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     (A)  required by Environmental Laws to be carried out by the SER
          Indemnified Parties;

     (B)  performed or undertaken in response to any  requirements of a
          Governmental Entity (as part of an investigation, consultation or
          otherwise) pursuant to Environmental Law (including as the result of a
          negotiated settlement reached in accordance with this Agreement);

     (C)  undertaken as part of or in connection with the construction of
          foundations for new buildings, plant or machinery or other ground
          disturbance reasonably necessary in connection with the normal
          operation of the business;

     (D)  necessary in connection with a Specified Transaction; or

     (E)  in relation to disclosure, as necessary in relation to the agents,
          advisers, underwriters, insurers, bankers or lenders of or to the
          relevant SER Indemnified Party or as required by Law,

     excluding any such investigation or disclosure carried out with the
     intention of making or investigating the possibility of making Indemnity
     Claims. SER shall not and shall procure that SER Indemnified Parties shall
     not after the Closing Date (in relation to the Pernis Facility) or after
     the third anniversary of the Closing Date (in relation to other Real
     Property) carry out or make any Investigation or Disclosure which is not a
     Permitted Investigation or Disclosure.

2.8  Notwithstanding anything herein to the contrary, SELLER shall have no
     indemnity obligation hereunder for any Environmental Damages arising from
     or associated with any upgrades, improvements, modifications, additions,
     changes or other expenditures related to any of the matters described in
     Schedule 2.

2.9  Notwithstanding anything herein to the contrary, the SER Indemnified
     Parties shall not be entitled to claim under this Agreement in respect of
     the costs of carrying out the ongoing monitoring and containment programs
     set out in Schedule 3.

2.10 To the extent that the SER Indemnified Parties make an Indemnity Claim
     for Environmental Damages with respect to Voluntary Remedial Actions, SER
     agrees that the relevant SER Indemnified Party shall under this Agreement
     pay on a pro rata basis and the SER Indemnified Parties shall not be
     entitled to claim for 25% of such Environmental Damages.  For the avoidance
     of doubt, this Section 2.10 does not apply to Voluntary Remedial Actions in
     relation to Site Contamination Issues at the Barbastro Facility.

2.11 Notwithstanding anything herein to the contrary, the SER Indemnified
     Parties shall not be entitled to claim or seek indemnity or defense under
     this Agreement to the extent that the relevant Environmental Damages relate
     to Non-compliance Issues (except for the Listed Non-US Compliance Issues)
     or to Site Contamination Issues at the Barbastro Facility and arise out of
     or are increased as a result of:
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     (A)  provisions of any Permit or Environmental Law that are not expressly
          required to be complied with on or before Closing, or the expiration,
          review, amendment, revision, replacement or renewal of any Permit
          after Closing;

     (B)  Environmental Laws that come into force or become binding after
          Closing or existing Environmental Laws that contain compliance
          requirements that become enforceable after Closing; or

     (C)  variations, changes, modifications, additions or amendments after
          Closing (whether under laws which are in force before, on or after
          Closing) to applicable standards, codes, criteria, guidance, policy or
          interpretations in relation to Environmental Laws or Permits.

     provided that this Section 2.11 does not apply to the extent the relevant
     future Environmental Law or Permit is not more onerous than the
     Environmental Law or Permit which it renews or replaces.

3.   SER's Indemnification Obligation.
     --------------------------------

3.1  Subject to Sections 3.2 below, SER shall indemnify, defend, save and hold
     harmless the SELLER Indemnified Parties from and against all Environmental
     Damages imposed upon or incurred by the SELLER Indemnified Parties
     resulting from any Environmental Condition to the extent such Environmental
     Condition occurred or arose on or after the Closing Date, provided however,
     that SER shall have no indemnity obligation under this Section 3.1 for
     those matters for which SER is entitled to indemnity from SELLER pursuant
     to Section 2.1 of this Agreement.

3.2  To the extent that SELLER Indemnified Parties make an Indemnity Claim with
     respect to Voluntary Remedial Actions, SELLER agrees that the relevant
     SELLER Indemnified Party shall pay and the SELLER Indemnified Parties shall
     not be entitled to claim for 25% of such Environmental Damages.

4.   Indemnification Procedures and Calculation.
     ------------------------------------------

4.1  Notwithstanding anything to the contrary elsewhere in this Agreement or the
     Transaction Documents, the procedures in this Section 4.1 shall apply to
     Indemnity Claims which relate to the carrying out of Remediation Activities
     by the relevant Indemnified Party.

     (A)  The relevant SER Indemnified Party or SELLER Indemnified Party shall
          provide written notice to SELLER or SER, respectively (the
          "ENVIRONMENTAL INDEMNIFYING PARTY") (each such notice an
          "ENVIRONMENTAL CLAIMS NOTICE") setting forth with reasonable
          particularity the nature of the Environmental Condition(s) to be
          addressed by Remediation Activities giving rise to the related
          Indemnity Claim.

     (B)  If Environmental Indemnifying Party has the right under Section 5 to
          take Control of such Remediation Activities, Environmental
          Indemnifying Party shall notify Environmental Indemnified Party within
          30 days after receipt of the Environmental Claims Notice whether it
          wishes to exercise such right (without
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          prejudice to the right of Environmental Indemnifying Party to assume
          Control at some later time).

     (C)  Where Environmental Indemnified Party has Control of such Remediation
          Activities (on the basis that Environmental Indemnifying Party has not
          exercised any right which it may have to assume Control), the
          provisions of Sub-sections 4.1(C) (i) to (vi) shall apply.

          (i)   Environmental Indemnified Party shall provide a further notice
                (if not already provided as part of the original Environmental
                Claims Notice and expressly identified as the Environmental
                Claims Response in the Environmental Claims Notice) setting
                forth with reasonable particularity the nature of the activities
                undertaken or to be undertaken or, as appropriate, legal or
                consultative services to be acquired ("ENVIRONMENTAL CLAIMS
                RESPONSE") by Environmental Indemnified Party with respect to
                the relevant Environmental Condition (to the extent then
                determinable), and the estimated cost associated with such
                activities (to the extent then estimable).

          (ii)  Environmental Indemnifying Party shall within 30 days after
                receipt of an Environmental Claims Response, notify
                Environmental Indemnified Party in writing that Environmental
                Indemnifying Party in whole or in part, (i) approves (ii)
                objects or (iii) is unable to approve or reject on the basis of
                the available information to the Environmental Claims Response
                ("REPLY NOTICE").

          (iii) If Environmental Indemnifying Party's Reply Notice notifies
                Environmental Indemnified Party that it approves of all or part
                of the Environmental Claims Response set forth in the related
                Environmental Claims Notice, the Environmental Damages (or part
                thereof so approved by Environmental Indemnifying Party)
                associated with the Environmental Claims Notice shall be
                conclusively deemed Environmental Damages for which
                Environmental Indemnifying Party has an indemnity obligation.

          (iv)  Environmental Indemnifying Party shall pay the amount of such
                Environmental Damages to Environmental Indemnified Party within
                30 days of receiving written confirmation from Environmental
                Indemnified Party that the relevant sum has actually been paid
                to the relevant third party.

          (v)   In the event Environmental Indemnifying Party's Reply Notice
                objects to or does not accept all or any part of the
                Environmental Claims Response set forth in the related
                Environmental Claim Notice in accordance with Sub-section
                4.1(C)(ii), Environmental Indemnifying Party shall notify
                Environmental Indemnified Party in writing of its objection or
                non-acceptance (and the basis thereof) regarding such
                Environmental Claim Response. If Environmental Indemnifying
                Party's Reply Notice is a non-acceptance due to insufficient
                information, Environmental Indemnifying Party shall in the Reply
                Notice identify the further information which it
<PAGE>

                reasonably requires. If Environmental Indemnifying Party's Reply
                Notice relates to an objection to the nature of Environmental
                Indemnified Party's proposed Environmental Claims Response,
                Environmental Indemnifying Party shall provide with the Reply
                Notice an alternative proposal describing in reasonable detail
                (so far as it is reasonably able having regard to the
                information available to Environmental Indemnifying Party) and
                the prescribed time limit for the Reply Notice the proposed
                activities or response, including estimated costs associated
                therewith.

          (vi)  If a Reply Notice is served, Environmental Indemnified Party and
                Environmental Indemnifying Party shall thereafter negotiate in
                good faith in an attempt to reach agreement as to the disputed
                or non-accepted Environmental Claims Notice. In the event that
                Environmental Indemnified Party and Environmental Indemnifying
                Party are unable to resolve the dispute or non-acceptance within
                30 days after Environmental Indemnifying Party's receipt of the
                Reply Notice, Environmental Indemnifying Party or Environmental
                Indemnified Party may provide written notice to the other of its
                intent to submit the matter to arbitration pursuant to the terms
                set forth in Section 9 of this Agreement.

     (D)  The Parties acknowledge that it may be necessary for the relevant
          Remediation Activities to be assessed, designed and implemented in
          separate units or stages, having regard to technical and practical
          factors, orders or similar directives by any Governmental Entity and
          prevailing regulatory practice.  The Parties agree that the procedure
          set out in this Section 4.1 shall apply separately to each such unit
          or stage and, in the event of any dispute as to the appropriate
          division of units or stages, either Party may by written notice submit
          such dispute to arbitration pursuant to the terms set forth in Section
          9 of this Agreement.

     (E)  The Parties agree that, where a response or notice is required by a
          relevant Governmental Entity within a timetable that is more demanding
          than the response times set out above, the Parties shall use all
          reasonable efforts to meet such required timetable.

4.2  Notwithstanding anything to the contrary elsewhere in this Agreement or the
     Transaction Documents, the following procedures shall apply to Indemnity
     Claims which are not subject to Section 4.1.

     (A)  Upon notice of an Environmental Claim asserted against, resulting to,
          imposed upon or incurred by any Indemnified Party, or upon the
          Indemnified Party becoming aware of a matter for which it may be
          entitled to indemnification with respect to an Environmental Claim ,
          the Indemnified Party shall promptly give written notice to the other
          Indemnifying Party of the Environmental Claim; provided, however, that
                                                         --------  -------
          no failure or delay on the part of the Indemnified Party in notifying
          any Indemnifying Party shall relieve the Indemnifying Party from any
          liability or obligation hereunder unless (and then solely to the
          extent) the Indemnifying Party thereby is prejudiced by the failure or
          delay.
<PAGE>

     (B)  Promptly upon receiving a written notice of an indemnified
          Environmental Claim, the Indemnifying Party shall undertake the
          defense thereof by counsel of its own choosing, which counsel shall be
          reasonably satisfactory to the Indemnified Party; provided, that if,
                                                            --------
          in the Indemnified Party's and the Indemnifying Party's reasonable
          judgment, a conflict of interest may exist between the Indemnified
          Party and the Indemnifying Party with respect to such Environmental
          Claim, or if the Indemnifying Party does not promptly defend after
          notification of such Environmental Claim, such Indemnified Party shall
          undertake the defense and to compromise or settle such Environmental
          Claim on behalf of and for the account and at the risk of the
          Indemnifying Party to the extent that the Indemnifying Party is
          determined to be obligated to indemnify the Indemnified Party under
          this Agreement  with respect to such Environmental Claim.  The written
          notice of the Environmental Claim by the Indemnified Party shall
          contain all material information known to the Indemnified Party with
          respect to the Environmental Claim and shall include copies of
          materials submitted to the Indemnified Party by the relevant claimant
          with respect to the Environmental Claim.  So long as the Indemnifying
          Party is conducting the defense of a Environmental Claim in accordance
          with this Section 4.2, the Indemnified Party may retain separate co-
          counsel at its sole cost and expense and participate in the defense of
          the Environmental Claim.

     (C)  If the Indemnifying Party elects to undertake and diligently pursue
          the defense of a Environmental Claim hereunder, and acknowledges in
          writing its duty to provide full indemnification to the Indemnified
          Party regarding such Environmental Claim, the Indemnifying Party shall
          control all aspects of the defense and settlement of such
          Environmental Claim and may settle, compromise or enter into a
          judgment with respect to such Environmental Claim; provided, that the
                                                             --------
          Indemnifying Party shall not enter into any such settlement,
          compromise or judgment without the prior written consent of the
          Indemnified Party (which shall not be unreasonably withheld) if it
          would result in the imposition of any non-monetary liability or
          obligation on the Indemnified Party. If the Indemnified Party
          undertakes the defense of an Environmental Claim hereunder, it shall
          not settle, compromise or enter into any judgment with respect to an
          Environmental Claim for which it is seeking or shall seek
          indemnification hereunder without the prior written consent of the
          Indemnifying Party, which shall not be unreasonably withheld.

     (D)  The Indemnified Party shall provide the Indemnifying Party with access
          to all reasonably requested records and documents of the Indemnified
          Party relating to any Environmental Claim, other than documents for
          which the Indemnified Party has claimed or shall validly claim a legal
          privilege.

     (E)  Without prejudice to any claim by SELLER under the indemnity in
          Section 3.1, the obligations of the Indemnifying Party to indemnify
          the Indemnified Party under this Agreement shall not be terminated,
          modified or abated if the cause or alleged cause (in whole or in part)
          of the Environmental Damages for which a claim is made hereunder is
          the sole or concurrent, active or passive, imputed, technical or other
          negligence, gross negligence, fault or strict liability of the
          Indemnified Party.
<PAGE>

4.3  For purposes of calculating aggregate Environmental Damages under this
     Agreement, the amount of Environmental Damages incurred by any
     Environmental Indemnified Parties shall be reduced by (a) the net amount of
     the sum of (i) any Tax Benefit received by SER Indemnified  Parties or
     SELLER Indemnified Parties, as applicable, as a result of the Environmental
     Condition that gave rise to such Environmental Damages on or prior to the
     date that the indemnity payment in respect of such Environmental Damages is
     due and payable and (ii ) the present value of any Tax Benefit projected to
     be received by SER Indemnified Parties or SELLER Indemnified Parties, as
     applicable, (such present value shall be calculated by the applicable SER
     Indemnified Parties or SELLER Indemnified Parties (x) using a discount
     factor equal to 12% and (y) assuming that the Tax Benefit is received at
     such time and to the extent that it is reasonably expected to be received
     based on the applicable Person's management projections at the time of
     payment of the applicable Environmental Damage), and (b) any amounts
     received (after deducting all attorneys' fees, expenses and other costs of
     recovery) from any Third Party Insurer or other party liable for such
     Environmental Damages, and the SER Indemnified Parties and the SELLER
     Indemnified Parties, as applicable shall use reasonable efforts to effect
     any such recovery.

4.4  For purposes of this Agreement, the Sale Agreement and any other related
     document, (i) with respect to any Indemnity Claim in relation to Site
     Contamination Issues made prior to the third anniversary of the Closing
     Date, any Environmental Condition that is the basis of such  claim shall be
     presumed to have existed as of the Closing Date unless and until SELLER
     establishes that it is more likely than not that the relevant Site
     Contamination Issues came into existence or arose after the Closing Date
     and (ii) with respect to any Indemnity Claim made after the third
     anniversary of the Closing Date in relation to Site Contamination Issues,
     no presumption as to the existence or non-existence of the Site
     Contamination Issue that is the basis of such Indemnity Claim shall exist
     and the determination with respect to the existence of such Site
     Contamination Issue shall be based on an objective determination in light
     of the evidence presented by the Parties.

5.   Control of Remediation Activities
     ---------------------------------

5.1  Notwithstanding the provisions of Sections 2, 3 and 4 above or any other
     provisions of this Agreement or the Transaction Documents, as between SER
     and SELLER, SER shall have right to Control Investigation at a Real
     Property until (if applicable) SELLER's right to Control such Investigation
     has arisen under Section 5.2 or 5.3, provided that:-

     (A)  SER shall ensure that SELLER is given advance notice of any proposal
          to carry out or make Investigation or Disclosure;

     (B)  SER shall consult in good faith with the SELLER and comply with any
          reasonable request of the Seller in relation to the nature, extent or
          conduct of such Investigation or Disclosure;

     (C)  SER take full account of the availability of data and information
          provided by SELLER in deciding whether or not the proposed
          Investigation or Disclosure is necessary and in determining the scope
          of the Investigation or Disclosure;
<PAGE>

     (D)  SER shall consider in good faith any request from SELLER to carry out
          or make all or part of such Investigation;

     (E)  SER shall allow SELLER or its representative to attend such
          Investigation when carried out;

     (F)  SER shall provide SELLER with split samples should it so request;

     (G)  SER shall provide SELLER with draft and final reports and results as
          soon as they come into the possession of the relevant SER Indemnified
          Party.

5.2  Notwithstanding the provisions of Sections 2, 3 and 4 above or any other
     provisions of this Agreement or the Transaction Documents, as between SER
     and SELLER, SELLER shall have the right (but not the obligation) to
     exclusively Control Remediation Activities (including, for the avoidance of
     doubt, any proposal to carry out any Investigation and Disclosure where it
     is known or is reasonably probable that the Remediation Activities involve
     Environmental Damages for which SELLER has any indemnity obligation to the
     SER Indemnified Parties under this Agreement) with respect to Site
     Contamination Issues  at the Amsterdam Facility, the Louvain-la-Neuve
     Facility, the Stanlow Facility, the Pernis Facility, the Moerdijk Facility,
     the Yokkaichi Facility and the Wesseling Facility which is not Whole
     Complex Contamination, provided that SELLER performs such Remediation
     Activities in accordance with the Lowest Cost Alternative.  In the event
     that, where SELLER has Control of such Remediation Activities and fails to
     so perform such Remediation Activities in circumstances that threaten to
     cause material prejudice to SER, SER shall be entitled to serve a notice of
     failure on SELLER. If SELLER then fails to exercise Control in a manner
     which will avoid such prejudice (to the extent avoidable) within 60 days of
     the date of such notice, SER or the relevant Company, upon written notice
     to SELLER, shall have the right to assume Control of such Remediation
     Activities from SELLER subject to Section 6.2 of this Agreement and seek
     reimbursement for all Environmental Damages incurred in connection with its
     assumption of Control in accordance with and to the extent recoverable
     under this Agreement.

5.3  Notwithstanding the provisions of Sections 2, 3 and 4 above or any other
     provisions of this Agreement or the Transaction Documents, as between SER
     and SELLER, SELLER shall have the right to exclusively Control Remediation
     Activities relating to Whole Complex Contamination.  In the event SELLER
     fails to perform such Remediation Activities in accordance with the Lowest
     Cost Alternative in circumstances that threaten to cause material prejudice
     to SER, SER shall have the right to seek resolution of such failure of
     performance in accordance with the Dispute Resolution Procedures set forth
     in Section 9, provided that the available remedies under any such Dispute
     Resolution Procedures shall not include any award of Control to SER or any
     SER Indemnified Party.

5.4  In performing Remediation Activities at any real property, the Party with
     Control shall use its reasonable efforts to minimize its interference with
     operations at such relevant real property.

6.   Procedures for Remediation Activities
     --------------------------------------
<PAGE>

6.1  Where the Indemnified Party has Control of Remediation Activities that are
     covered by Indemnifying Party's indemnity obligation in Section 2 and
     Indemnifying Party has not exercised its rights (if applicable) to take
     Control under Section 5:

     (A)  Indemnified Party shall:

          (i)   consult with Indemnifying Party in advance of issuing any
                material documents, attending any material meetings or hearings
                or taking any material step or action in relation to the
                relevant activities;

          (ii)  provide Indemnifying Party with reasonable notice of and a
                reasonable opportunity to attend any meetings or hearings or the
                carrying out of any activities with respect to any Remediation
                Activities (and provide Indemnifying Party with split samples if
                the Indemnifying Party so requires);

          (iii) provide to Indemnifying Party any documents, information,
                assistance or access which Indemnifying Party may reasonably
                request;

          (iv)  provide Indemnifying Party with (a) copies of all workplans for
                and test results, surveys and other data generated by the
                investigations performed by the Indemnified Party or its
                consultants promptly upon the availability thereof; (b) final
                and any prior drafts of all reports, plans and other documents
                filed with any Governmental Entity upon the availability thereof
                and in any event prior to any such filing being made; and (c) an
                opportunity to meet with the Indemnified Party and its
                representatives prior to and following any substantive
                communications with Governmental Entities;

          (v)   where the relevant Environmental Damages are covered by
                Indemnifying Party's indemnity obligation in Section 2.1,
                provide Indemnifying Party with a reasonable opportunity to
                audit costs of such Remediation Activities;

          (vi)  where the relevant Environmental Damages are covered by
                Indemnifying Party's indemnity obligation in Section 2.1,
                implement and not exceed the Lowest Cost Alternative; and

          (vii) comply with any other reasonable request of Indemnifying Party,
                except to the extent that any such request would result in
                Remediation Activities exceeding the Lowest Cost Alternative;

          provided that, (a) communication by any SER Indemnified Party with
          -------------
          SELLER shall be made via SER (or such person as SER shall nominate to
          SELLER) and communication by any SELLER Indemnified Party with SER
          shall be made by SELLER (or such person as SELLER shall nominate to
          SER) unless the Parties agree to the contrary in any particular case;
          and (b) SER shall procure that each SER Indemnified Party and SELLER
          shall procure that each SELLER Indemnified Party shall comply with all
          of the provisions of this Section 6.1.
<PAGE>

6.2  Each Party shall comply with reasonable requests of the other Party for
     arrangements to maintain confidentiality or privilege under this Agreement.

6.3  Where SELLER as Environmental Indemnifying Party has control of Whole
     Complex Contamination, SELLER shall consult with SER as reasonably
     appropriate and, upon request and as far as reasonably appropriate, shall
     provide SER with all material, relevant documents, summaries of all
     material meetings or hearings, and reasonable opportunity, upon reasonable
     notice, to confer on the planning and conduct of material, relevant
     Remediation Activities.

6.4  Each Party (the "HOST PARTY") agrees to provide the other Party (the
     "VISITING PARTY") and its representatives, agents and contractors access
     from time to time to any of the real property which the Host Party owns or
     occupies and/or any of the facilities, structures, plants or equipment at
     such real property in order to permit the Visiting Party to undertake and
     complete Remediation Activities in relation to which the Visiting Party has
     Control under Section 5; provided, however that

     (A)  in the event that the Host Party does not have the right to grant such
          access without the consent or approval of some other person, the Host
          Party's obligation shall be subject to such approval or consent, which
          the Host Party shall use its reasonable efforts to procure;

     (B)  the Visiting Party shall provide the Host Party with reasonable notice
          prior to entering or allowing any of its agents, representatives,
          employees, consultants or contractors to enter the relevant real
          property.  In addition, the Parties shall cooperate in good faith with
          the completion of the Remediation Activities for which access by the
          Visiting Party is required, including but not limited to the execution
          of such documents, notices, consents and recordations as may be
          necessary.

7.   Standard of Remediation Activities
     ----------------------------------

7.1  Any claim for indemnification under this Agreement by an Environmental
     Indemnified Party for Remediation Activities that such Environmental
     Indemnified Party Controls shall, to the extent such Remediation Activities
     are Controlled by Environmental Indemnified Party, be limited to the Lowest
     Cost Alternative.  The Lowest Cost Alternative shall be:

     (A)

          (i)   where there is an Environmental Claim, the minimum necessary to
                comply with any settlement or agreement with the relevant
                Governmental Entity or Third Party (if applicable) reached in
                accordance with this Agreement; or

          (ii)  where there is an Environmental Claim, the minimum necessary to
                comply with Environmental Laws as enforced in relation to the
<PAGE>

                relevant Environmental Condition, where no such settlement or
                agreement is reached; or

          (iii) where there is a Voluntary Remediation Requirement, the minimum
                necessary to comply with Environmental Laws as they would be
                very likely to be enforced, if the Governmental Entity having
                jurisdiction over the relevant real property were aware of the
                nature and extent of the relevant Environmental Condition; and

     (B)  so far as within the control of the Party which has Control, be
          consistent with the operations conducted at the relevant Real
          Property; and

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

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

7.2  The Parties agree that, where SELLER has Control of  Remediation Activities
     and the extent and timescale of any outstanding works are well defined,
     SELLER shall be entitled to require SER to enter into good faith
     negotiations to determine the amount of any such payment as would be
     reasonable to settle SELLER's liability to SER under this Agreement in
     respect of the relevant matter.  The Parties further agree that, where SER
     has Control of Remediation Activities and the extent and timescale of any
     outstanding works are well defined, SER shall be entitled to require SELLER
     to enter into good faith negotiations to determine the amount of any such
     payment as would be reasonable to settle SER's liability to SELLER under
     this Agreement in respect of the relevant matter.

8.   Access to Records; Furnishing Information
     -----------------------------------------

The provisions of Sections 8.06 and 8.19 of the US Sale Agreement shall apply.

9.   Dispute Resolution.
     ------------------

9.1  In the event of any Controversy between the Parties arising out of this
     Agreement, the Parties shall use good faith efforts, for a period of 60
     days following notice by a Party to the other Party that a Controversy
     exists, to resolve the Controversy through settlement and compromise.  In
     the event such a Controversy cannot be resolved by or through settlement
     and compromise during the period specified above, either Party may require
     that the Controversy be finally resolved under the provisions set forth in
     Article 3 of Schedule A to the Master Sale Agreement except as otherwise
     set forth below. Pending the completion of any arbitration proceedings,
     payments not in dispute shall continue to be made, and obligations not in
     dispute performed, and in rendering any award the arbitrators shall make
     appropriate adjustments for any such payments as may be consistent with the
     award.

9.2  Notwithstanding anything else in this Agreement or in the Master Sale
     Agreement (including the Schedules attached thereto), the place of
     arbitration for any dispute,
<PAGE>

     controversy or claim arising out of or relating to this Agreement shall be
     Vancouver, British Columbia (or, if the Parties so agree in a particular
     case, in a location reasonably proximate to the location of the relevant
     Real Property) and governed by the laws of New York.

9.3  Notwithstanding anything else in this Agreement or in the Master Sale
     Agreement (including the Schedules attached thereto), the arbitrator shall
     have a minimum of 10 years cumulative experience of work with respect to
     the relevant matters which are the subject of the arbitration and shall
     make its decision solely on the basis of the information provided to it by
     the Parties and shall not be entitled to require further technical
     information  and advice from any source (unless otherwise agreed between
     the Parties). The cost of the arbitration shall be borne in accordance with
     Section 3.01(d) of Schedule A to the Sale Agreement.

10.  Exclusive Remedy
     ----------------

10.1 Subject to Section 10.2 and 10.3, the limited rights provided to the
     Parties pursuant to this Agreement shall be SELLER's and SER's and the
     relevant Company's exclusive remedies against each other for any
     Environmental Conditions regardless of who caused such Environmental
     Conditions or when such Environmental Conditions occurred.  To the fullest
     extent allowed by Applicable Law,  each of SELLER and SER (each on behalf
     of itself and any Seller Indemnified Parties or SER Indemnified Parties
     ("RELEVANT PARTIES"), as applicable) and each Company hereby WAIVES AND
     RELEASES (regardless of the negligence or fault, sole or otherwise, of the
     Person being released) any and all other rights and remedies (whether
     existing or future, and of whatsoever nature) such Party (or any Relevant
     Parties) may have at law or in equity against SER or SELLER (or any
     Relevant Parties), as the case may be, with respect to any Environmental
     Conditions.

10.2 Subject to Section 10.3, Section 10.1 is without prejudice to the
     express provisions of such agreements as, in the case of the Continuing
     Affiliate Contracts, may have been or, in the case of other agreements, may
     at some future time be entered into between any SELLER Indemnified Parties
     and SER Indemnified Parties to the extent that they address or are
     applicable to Environmental Conditions, provided that  the provisions of
     such agreements as identified in Schedule 5 shall be deemed not to apply as
     between SELLER and SER Indemnified Parties, to the extent expressly
     disapplied in Schedule 5.

10.3 Other than (a) the provisions of any Continuing Affiliate Contract
     deemed suspended pursuant to Schedule 5 and (b) in relation to sub-clause
     10.3(A) only, the provisions of any lease agreement between SELLER or its
     Affiliates, as the lessor, and SER or its Affiliates, as the lessee,
     obligating the lessee to conduct environmental cleanup efforts at
     termination of any such lease, in relation to any provisions in any
     Continuing Affiliate Contract under which the Relevant Party would have an
     obligation or liability to the other party to such Continuing Affiliate
     Contract in respect of Environmental Damages ("RELEVANT PROVISION"), the
     Parties agree that:

     (A)  to the extent such Environmental Damages are recoverable by either (i)
          any SER Indemnified Party under the indemnity in Section 2 of this
          Agreement or (ii) any SELLER Indemnified Party under the indemnity in
          Section 3 of this Agreement,
<PAGE>

          the SER Indemnified Party or the SELLER Indemnified Party's claim for
          such Environmental Damages (as the case may be) shall be made under
          the relevant indemnity provisions in this Agreement in accordance with
          this Agreement (and such Relevant Provisions shall be deemed to
          exclude the recovery of such Environmental Damages).

     (B)  any Relevant Provision shall be without prejudice to the rights of the
          relevant SER Indemnified Party or the relevant SELLER Indemnified
          Party (as the case may be) to claim such Environmental Damages under
          the indemnity in either Section 2 or Section 3 (as applicable) of this
          Agreement in accordance with this Agreement.

     For the avoidance of doubt, with respect to Environmental Conditions
     existing as of Closing, in the event of any conflict between any provision
     of this Agreement and any Continuing Affiliate Contracts, the provisions of
     this Agreement shall govern.

11.  Successors/Assigns
     ------------------

11.1 Subject to Section 11.2, notwithstanding anything to the contrary in the
     Sale Agreement, no party to this Agreement may transfer or assign, directly
     or indirectly, by operation of law or otherwise, any of its rights or
     obligations under this Agreement without the prior written consent of the
     other parties thereto and any purported transfer or assignment that does
     not comply with this Section 11.1 shall be null and void ab initio,
     provided that SER (and at and after Closing, any of the Companies) may
     --------
     assign its rights or obligations under this Agreement (i) after Closing, to
     one or more of its Affiliates or in connection with a sale or
     recapitalisation of the Business or any Company or (ii) to any lender (or
     agent therefor) for security purposes or pursuant to the assignment thereof
     by any such lender or agent in connection with the exercise by any such
     lender or agent of all of its rights and remedies as secured creditor with
     respect thereto.

11.2 It is a condition of any assignment under Section 11.1 that (i) the
     relevant transferee or assignee shall assume all of SER's liabilities under
     Section 3.1; and (ii) such transferee or assignee shall be at least as
     creditworthy as SER immediately prior to the relevant sale of the Business.

11.3 Notwithstanding anything stated above, upon the sale of a single facility
     or parcel of Real Property, or any one or more facilities or parcels of
     Real Property which does not amount to a sale of the Business as referred
     to in Section 11.1 and which complies with Section 11.2, the indemnity with
     respect thereto shall not pass to the relevant purchaser or transferee or
     assignee, but will remain in full force and effect with respect to SER. For
     the avoidance of doubt, SER Indemnified Parties shall not have any right to
     claim under this Agreement in respect of liabilities they might incur under
     any indemnity or other contractual protection given to such purchaser or
     transferee or assignee.

11.4 Each party to this Agreement agrees to cause its successors and permitted
     assigns (other than a permitted assignment made only for security purposes)
     to agree in writing to be bound by the terms of this Agreement,
     provided, that nothing contained herein shall relieve any party from its
     --------
     obligations under this Agreement.
<PAGE>

12.  Limitation on Remedies
     ----------------------

Notwithstanding anything to the contrary in this Agreement, under no
circumstances may a Party recover exemplary, treble, punitive, special,
indirect, consequential, remote or speculative damages, lost profits or internal
costs under this Agreement, provided, however, if any Indemnified Party is held
                            --------  -------
liable to a Third Party for any of such damages and the Indemnifying Party is
obligated to indemnify the Indemnified Party for the matter that gave rise to
such damages pursuant to this Agreement, then the Indemnifying Party shall be
liable for and obligated to reimburse the Indemnified Party for such damages.

13.  Non-admissions
     --------------

The Parties agree and acknowledge that the inclusion or description of any
matter or issue in this Agreement and/or the provisions of this Agreement in
relation to such matter or issue shall not constitute any admission to any Third
Party or Governmental Entity that such matter or issue may exist, or is known to
exist or is or may constitute a liability.

14.  Relevant Environmental Permits
     ------------------------------

SELLER undertakes to use its reasonable efforts to procure the transfer to SER
of any Relevant Environmental Permit to SER or such person as SER shall direct.

15.  Yokkaichi Facility
     ------------------

The Parties agree that any Environmental Damages which would otherwise be
payable by SELLER in relation to the Yokkaichi facility and/or Yuka Shell Epoxy
K.K. ("JV") shall be reduced to reflect the proportionate interest of Shell
Epoxy Resins Holdings BV ("BV") in JV and the proportionate exposure which BV
has (if any) in relation to Environmental Damages of JV.
<PAGE>

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

SHELL PETROLEUM N.V.

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

SHELL EPOXY RESINS, LLC

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

                                  SCHEDULE 1

In this Agreement:

"AMSTERDAM FACILITY" means the facility of the Business located at Amsterdam,
Netherlands.

"BARBASTRO FACILITY" means the facility of the Business located at Barbastro.

"CHANGE OF USE" means any alteration of Real Property or facilities on such Real
Property which materially changes the Business from the Resins/Derivatives
Field.

"CONTROL" means control and conduct in relation to an Environmental Claim and/or
Remediation Activities.

"DEDUCTIBLE AMOUNT" has the meaning given in Section 2.3.

"DISCLOSURE" has the meaning given in Section 2.7.

"DISPOSAL ISSUES" means the transportation, treatment, storage, handling or
disposal, or the arrangement for transportation, treatment, storage, handling or
disposal of Hazardous Substances generated by (i) the operations of any Company
or the Business; (ii) the operations of any facilities, equipment, or real or
personal property currently owned, operated or leased by the Business, the
Companies or the SELLER in connection with the Business or the Companies, (iii)
any Former Site; (iv) any Pre-close Toll Manufacture; or (v) in relation only to
the indemnity obligation of SER under Section 3.1 of this Agreement, any Future
Cause.

"DISPUTE RESOLUTION PROCEDURES" means the procedures set forth in Section 9 of
this Agreement.

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

"ENVIRONMENTAL CLAIM" means either:-

      (A)   any and all pending and/or threatened in writing administrative or
            judicial actions, suits, orders (including orders on consent)
            reached in accordance with this Agreement if post-Closing, claims,
            liens, notices of violations, investigations, complaints or
            proceedings whether criminal or civil, pursuant to or relating to
            any Environmental Law by any person (i) including, but not limited
            to, any Governmental Entity, private person and citizen's group;
            (ii) excluding any of the above by an SER Indemnified Party or
            SELLER Indemnified Party; and (iii) excluding any of the above
            resulting from any Remediation Activities associated with or arising
            from any Voluntary Remedial Action ("ACTUAL CLAIMS"); or

      (B)   notification by a relevant Governmental Entity to an SER Indemnified
            Party of a Site Contamination Issue which if not acted on by such
            SER Indemnified Party would be very likely to result in an Actual
            Claim. For the avoidance of doubt, any Environmental Claim under
            this clause (B) shall not be regarded as a Voluntary Remedial
            Action.

"ENVIRONMENTAL CLAIMS NOTICE" has the meaning given in Section 4.1(A) of this
Agreement.

"ENVIRONMENTAL CLAIMS RESPONSE" has the meaning given in Section 4.1(C)(i) of
this Agreement.

"ENVIRONMENTAL CONDITIONS" means any (i) Site Contamination Issues; (ii)
Exposure Issues; (iii) Non-compliance Issues; or (iv) Disposal Issues.

"ENVIRONMENTAL DAMAGES" shall mean damages, liabilities, costs and expenses,
including, without limitation, interest, penalties and reasonable attorneys' and
consultants' fees, medical monitoring,
<PAGE>

disbursements and expenses, liability for the loss in value of Third Party
property and costs and expenses of Remediation Activities incurred after the
Closing Date.

"ENVIRONMENTAL INDEMNIFIED PARTY" has the meaning given in Sub-section 4.1(A)
of this Agreement.

"ENVIRONMENTAL INDEMNIFYING PARTY" has the meaning given in Sub-section 4.1(A)
of this Agreement.

"ENVIRONMENTAL LAWS" means any and all applicable federal, state, European (to
the extent directly binding on the relevant Indemnified Party), regional,
provincial or local and foreign public, civil and criminal laws, statutes,
ordinances, orders, codes, statutory guidance, rules, regulations, judgments,
decrees, injunctions or agreements with any Governmental Entity which are in
force from time to time before or after the date of this Agreement (subject to
Section 2.11) relating to (i) the protection of human health and worker health
and safety; (ii) the protection of the Environment; (iii) governing the
handling, use, generation, treatment, storage, transportation, disposal,
manufacture, distribution, formulation, packaging, labeling or Release of
Hazardous Substances to the extent the same relate to protection of human health
and the Environment; or (iv) the existence, cleanup and/or remedy of
contamination on property. Environmental Laws also include civil or common law
doctrines (including negligence, nuisance, trespass, personal injury and
property damage) to the extent that claims under such doctrines arise out of the
presence, Release or exposure to a Hazardous Substance. Environmental Laws
include laws relating to product safety, but no other product liability issues.

"ENVIRONMENTAL PERMIT" means any federal, state, local, provincial, regional or
foreign Permit, license, approval, consent, authorization, permission or
planning or zoning condition required by any Governmental Entity under or in
connection with any Environmental Law and includes any and all orders, consent
orders, binding agreements or promises of compliance issued or entered into by
or with any Governmental Entity under or in relation to any applicable
Environmental Law (entered into in accordance with this Agreement, if after
Closing).

"EXPOSURE ISSUES" means exposure or injury to persons (including death) or to
Third Party property or other interests of such persons caused by, related to,
arising from, or in connection with the generation, handling, use, treatment,
storage, transportation, disposal, discharge, presence, Release, threatened
Release or emission of any Hazardous Substances at, on, underlying, or migrating
from (i) any of the Real Property; or (ii) any Former Site; (iii) any Pre-close
Toll Manufacture; (iv) any off-site facility used by the Companies or the
Business or any Former Business (but only to the extent that the Hazardous
Substances were sent or arranged to be sent to the off-site facility by the
Companies or the Business or any Former Business); or (v) in relation only to
the indemnity obligation of SER under Section 3.1 of this Agreement, any Future
Cause.

"FORMER BUSINESS" means any predecessors of and any entities previously owned by
the Companies, the Business or the SELLER in connection with the Business or the
Companies.

"FORMER SITE" means any real property, including the facilities, structures and
equipment in, on or under the property, formerly owned, operated or leased by
the Business, the Companies or the SELLER in connection with the Business or the
Companies or any Former Business.

"FUTURE CAUSE" means (i) any real property, (other than the Real Property or
Former Site), including the facilities, structures and equipment thereon, which,
subsequent to the Closing Date first comes to be, or may be deemed to be owned,
operated or leased by the Business, the Companies or SER in connection with the
Business or the Companies or any Future Business; (ii) any entities which,
subsequent to the Closing Date first come to be owned by the Companies, the
Business or SER in connection with the Business or the Companies or any
successor thereof ("FUTURE BUSINESS"); or (iii) any toll manufacturing business
used by the Business, the Companies, SER or any Future Business in connection
with the operations of the Business or the Companies or any Future Business
after the Closing Date (but only to the extent that the Hazardous Substance
managed by the toll manufacturing facilities was as a result of such
operations).

"HAZARDOUS SUBSTANCES" means any hazardous or toxic substances, pollutants,
contaminants, raw materials, industrial materials, finished products,
intermediate products, co-products, chemicals or chemical substances, wastes or
other material or article that are regulated under any applicable Environmental
Laws including without limitation, any material, waste or substance that is (i)
petroleum, petroleum hydrocarbons, petroleum products or petroleum by-products
(including crude oil or any component
<PAGE>

thereof), (ii) asbestos, or asbestos containing materials, (iii) polychlorinated
biphenyls, or (iv) defined as a "hazardous" or "dangerous" "material,"
"substance" or "waste" under applicable Environmental Laws and/or is a substance
capable (whether alone or in combination with any others) of causing pollution
or contamination harm or damage to the Environment).

"HOST PARTY" has the meaning given in Section 6.4 of this Agreement.

"INDEMNIFIED PARTY" means whichever of SER or the SELLER is the claimant under
the relevant Indemnity Claim.

"INDEMNIFYING PARTY" means whichever of SER or the SELLER is not the Indemnified
Party in relation to the relevant Indemnity Claim.

"INDEMNITY CLAIM" means an indemnity claim by a Party under this Agreement.

"INVESTIGATION" has the meaning given in Section 2.7 of this Agreement.

"KNOWN LAKELAND SITE CONTAMINATION ISSUES" has the meaning as defined in the US
Environmental Agreement.

"LAKELAND FACILITY" has the meaning as defined in the US Environmental
Agreement.

"LISTED ITEMS DEDUCTION" means (i) $6,394,000; plus (ii) the Listed Items
Underspend.

"LISTED ITEMS UNDERSPEND" means the amount (if any) by which the aggregate
expenditure by SELLER Indemnified Parties between 1st January, 2000 and 31st
December, 2000 in relation to the Listed US Compliance Issues and the Listed
Non-US Compliance Issues is less than $6,669,000.

"LISTED ITEMS EXPIRY DATE" means, in relation to a Listed Non-US Compliance
Issue, the date specified in Schedule 4 in relation to that issue.

"LISTED NON-US COMPLIANCE ISSUES" means the matters set forth in Schedule 4.

"LISTED US COMPLIANCE ISSUES" means the matters set forth in Schedule 5 of the
US Environmental Agreement.

"LOWEST COST ALTERNATIVE" has the meaning given in Section 7.1 of this
Agreement.

"LOUVAIN-LA-NEUVE FACILITY" means the facility of the Business located at
Louvain-la-Neuve, Belgium.

"MOERDIJK FACILITY" means the facility of the Business located at Moerdijk,
Netherlands.

"NON-COMPLIANCE ISSUES" means (i) non-conformance with any deadlines or
requirements which are required to be complied with on or before the Closing
Date under any Environmental Law in effect or in force as of the Closing Date,
which is not related to or arising in connection with Site Contamination Issues,
Exposure Issues or Disposal Issues; and (ii) the Listed Non-US Compliance
Issues.

"PERMITTED INVESTIGATION AND DISCLOSURE" has the meaning given in Section 2.7.

"PERNIS FACILITY" means the facility of the Business located at Pernis,
Netherlands.

"PRE-CLOSE TOLL MANUFACTURE" means any toll manufacturing facilities used by the
Companies, the Business or the SELLER in connection with the facilities and
operations of the Companies or the Business or Former Business (but only to the
extent that the Hazardous Substance managed by the toll manufacturing facilities
was as a result of such facilities and operations).

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

"Relevant Environmental PERMITS" means any permits which (i) relate to
Environmental Conditions; (ii) are held by SELLER as at Closing; (iii) are
required under applicable law to be held by SER or SER Indemnified Parties after
Closing.

"RELEVANT PROVISIONS" has the meaning given in Section 10.3 of this Agreement.

"REMEDIATION ACTIVITIES" means the investigation and remediation of an
Environmental Condition, including but not limited to soil and groundwater
sampling, activities associated with the construction,
<PAGE>

operation, maintenance or monitoring of remediation or treatment equipment and
systems, the investigation, excavation, restoration, remediation, clean-up
and/or treatment of contaminated soil, groundwater and free product, measures to
contain, monitor or limit contamination and/or other works in relation to any
Environmental Condition.

"REPLY NOTICE" has the meaning given in Sub-section 4.1(C)(ii).

"SELLER INDEMNIFIED PARTIES" means SELLER, its Affiliates, and their respective
directors, stockholders, officers, partners, employees, agents, consultants,
attorneys, representatives, successors, permitted transferees and permitted
assignees.

"SER INDEMNIFIED PARTIES" means SER, its Affiliates, and their respective
directors, stockholders, officers, partners, employees, agents, consultants,
attorneys, representatives, successors, permitted transferees and permitted
assignees.

"SITE CONTAMINATION ISSUES" means environmental pollution, contamination,
degradation, damages, exposure or injury to Third Party property or the
Environment caused by, relating to, arising from, or in connection with the
generation, handling, use, treatment, storage, transportation, disposal,
discharge, presence, Release, threatened Release or emission of any Hazardous
Substances at, on, underlying or migrating to (in the case of such migration, to
the extent from real property which is now owned or occupied by any Third Party)
or from (i) any of the Real Property or (ii) any Former Sites or (iii) any Pre-
close Toll Manufacture; or (iv) in relation only to the indemnity obligation of
the SER under Section 3.1 of this Agreement, any Future Cause.

"SPECIFIED TRANSACTION" means (i) a recapitalisation or financing in relation to
the Companies or the Business; or (ii) a public offer, sale, merger or change of
control in relation to the Business or the Companies.

"STANLOW FACILITY" means the facility of the Business located at Stanlow, UK.

"US ENVIRONMENTAL AGREEMENT" means the Environmental Agreement dated the same as
this Agreement and made between Shell Oil Company, a Delaware Corporation (1)
and Shell Epoxy Resins Inc., a Delaware limited liability company (2) and made
pursuant to the Master Sale Agreement made among SHELL OIL COMPANY, a Delaware
corporation (1), RESIN ACQUISITION LLC, a Delaware limited liability company
(2) and SHELL EPOXY RESINS, LLC, a Delaware corporation (3).

"VISITING PARTY" has the meaning given in Section 6.4 of this Agreement.

"VOLUNTARY REMEDIAL ACTION" means and a "VOLUNTARY REMEDIATION REQUIREMENT"
shall be deemed to have arisen where any Remediation Activities are performed or
undertaken in connection with Site Contamination Issues, Disposal Issues, or
Non-compliance Issues (i) which are to address contamination in excess of
applicable cleanup standards or criteria under applicable Environmental Law;
(ii) which are not required by any Governmental Entity or under any
Environmental Law and for which no violation, penalty or sanction will be
incurred, assessed or imposed as a result of a party's failure to perform such
activities or to report the presence or Release of Hazardous Substances; (iii)
in relation to which no Environmental Claim has been made; and (iv) in relation
to which it is very likely that there would be an Environmental Claim if the
relevant Governmental Entity were aware of the nature and extent of the relevant
Site Contamination Issues, Disposal Issues or Noncompliance Issues.

"WESSELING FACILITY" means the facility of the Business located at Wesseling,
Germany.

"WHOLE COMPLEX CONTAMINATION" means Site Contamination Issues at the complex
that includes the Moerdijk Facility, the Pernis Facility, the Stanlow Facility,
the Wesseling Facility, the Amsterdam Facility and the Louvain-la-Neuve Facility
and that is not specific to any of the Real Property or the activities being
conducted thereon and that is being managed, stabilized or remediated across all
or part of the larger complex of which such Real Property forms part.

"Yokkaichi Facility" means the facility of the Business at Yokkaichi.<PAGE>

                                                                   Exhibit 10.13

                      INTELLECTUAL PROPERTY TRANSFER AND

                               LICENSE AGREEMENT

                        CONTRIBUTION AGREEMENT BETWEEN

                             (1) SHELL OIL COMPANY

                                      and

                          (2) SHELL EPOXY RESINS LLC

      ------------------------------------------------------------------

             INTELLECTUAL PROPERTY TRANSFER AND LICENCE AGREEMENT

      ------------------------------------------------------------------
<PAGE>

<TABLE>
<CAPTION>
CONTENTS                                                                   PAGE
--------                                                                   ----
<S>                                                                       <C>
1.      Definitions and Interpretation.................................     2

2.      Patent Rights..................................................    10

3.      Invention Disclosures..........................................    14

4.      Technical Information..........................................    15

5.      Intellectual Property Agreements...............................    17

6.      Technical Copyrights...........................................    18

7.      Confidentiality................................................    19

8.      Indemnities; Liabilities.......................................    21

9.      Export Control.................................................    22

10.     Miscellaneous..................................................    22
</TABLE>

<PAGE>

INDEX OF APPENDICES
-------------------

1.   Intellectual Property Agreements

2.   Patent Rights, Parts I-IV

3.   Invention Disclosures, Parts I-III

4.   Resins/Derivatives Technical Information

5.   Excluded Technical Information

6.   Shell Technical Information

7.   IP Controversy Resolution
<PAGE>

AN AGREEMENT made between

(1)    SHELL OIL COMPANY

       a company incorporated under the laws of the State of Delaware, United
       States of America, and having an office at One Shell Plaza, 910 Louisiana
       Street, Houston, Texas 77002 (hereinafter referred to as "SOC")

and

(2)    SHELL EPOXY RESINS LLC

       a company formed under the laws of the State of Delaware
       and having an office at One Shell Plaza, 910 Louisiana Street, Houston,
       Texas 77002 (hereinafter referred to as "SER")
<PAGE>

                                   RECITALS
                                   --------

1.   SER has been created to develop, manufacture and sell certain resin and
     derivative products, and SOC has contributed to SER certain manufacturing
     and marketing assets of SOC relating to the Resins/Derivatives Business (as
     defined in Clause 1.1).

2.   SOC now desires to contribute to SER, by assignment or licence and subject
     to Third Party rights, certain patents, technology and associated
     agreements, which are owned or under the control of SOC and which are
     related to the Resins/Derivatives Business, and SER desires to receive a
     conveyance of the same from SOC.

3.   SOC and SER now wish to set out in detail the manner in which such patents,
     technology and agreements will be licensed or assigned.

NOW THEREFORE IT IS AGREED AS FOLLOWS:

                   CLAUSE 1 - DEFINITIONS AND INTERPRETATION
                   -----------------------------------------

1.1  In this Agreement:

     "Associate" in respect of SER means, through the Effective Date, Shell
      ---------
     Epoxy Resins, Inc., a company incorporated under the laws of Delaware,
     Shell Epoxy Resins Research B.V., a company incorporated under the laws of
     the Netherlands, and, after the Effective Date, any company controlling,
     controlled by or under common control with SER, provided, however,
     Associates in relation to SER shall not include at any time SOC or any of
     its Associates or SIRM or any of its Associates or any portfolio companies
     of Apollo Management IV, L.P. and its affiliates other than Shell Epoxy
     Resins Inc. and subsidiaries of Shell Epoxy Resins Inc.

     "Associate" in relation to SERR means, through the Effective Date, Shell
      ---------
     Epoxy Resins LLC and Shell Epoxy Resins, Inc., companies incorporated under
     the laws of Delaware, and, after the Effective Date, any company
     controlling, controlled by or under common control with SERR, provided,
     however, Associates in relation to SERR shall not include at any time SIRM
     or any of its Associates or SOC or any of its Associates or any portfolio
     companies of Apollo Management IV, L.P. and its affiliates other than Shell
     Epoxy Resins Inc. and subsidiaries of Shell Epoxy Resins Inc.

     "Associate" in relation to SIRM means N.V. Koninklijke Nederlandsche
      ---------
     Petroleum Maatschappij, a Netherlands company, The "Shell" Transport and
     Trading Company p.l.c., an English company and any company other than SIRM
     or SOC or an Associate of SOC or
<PAGE>

     SER or an Associate of SER or SERR or an Associate of SERR, which is at the
     time in question directly or indirectly associated with these two companies
     or either of them.

     "Associate" in relation to SOC means any company which is at the time in
      ---------
     question directly or indirectly associated with SOC, provided that
     Associate shall not mean SER or an Associate of SER or SERR or an Associate
     of SERR.

          For the purposes of the above definitions, a particular company is:

          (i)  directly associated with a company or companies if the latter
               holds/hold shares carrying more than fifty per cent (50%) of the
               votes exercisable at a general meeting (or its equivalent) of the
               particular company; and

          (ii) indirectly associated with a company or companies (hereinafter
               called "the Parent Company or Companies") if a series of
               companies can be specified, beginning with the Parent Company or
               Companies and ending with the particular company, so related that
               each company of the series, except the Parent Company or
               Companies, is directly associated with one or more companies
               earlier in the series.

     "Agreement" means this agreement, together with all appendices thereto.
      ---------

     "Conventional Resins Applications" means coatings and adhesives, provided,
      --------------------------------
     however, that this term shall not mean wood glue applications.

     "Effective Date" means November 1, 2000.
      --------------

     "Excluded Technical Information" means
      ------------------------------

     (a)  technical information of the types described in Appendix 5, without
          regard to its source or any prior usage by the Resins/Derivatives
          Business; and

     (b)  that technical information to which the Resins/Derivatives Business
          may have had access but which has not been used (whether for research,
          development or commercial purposes) by or in the Resins/Derivatives
          Business.

     "Intellectual Property Agreements" means the agreements listed in Appendix
      --------------------------------
     1 hereof and any other agreements existing on the Effective Date to which
     SOC or an Associate of SOC is a party and the exclusive purpose of which is
     either (a) the disclosure or receipt of confidential information
     exclusively for the purposes of the Resins/Derivatives Business, (b) the
     grant of material rights in respect of patents and/or technical information
     relating exclusively to the manufacture or sale of Products in the
     Resins/Derivatives Field, or (c) the grant of material rights in respect of
     patents and technical information which rights were acquired by SOC
     exclusively for the purposes of the Resins/Derivatives Business.
<PAGE>

       "Invention Disclosures" means those written disclosures, listed in
        ---------------------
       Appendix 3, which have been received prior to the Effective Date by the
       Intellectual Property Services organisations of SOC, Shell International
       Limited or Shell International B.V., of inventions for which no patent
       application has been filed prior to the Effective Date.

       "Invention Disclosure Rights" means the right to file patent applications
        ---------------------------
       in the U.S. in respect of the Invention Disclosures disclosing inventions
       for which SOC has a right to file patent applications as of the Effective
       Date, and all patent applications based thereon which may be subsequently
       filed in any country, and any and all patents, issuing in any country
       from such patent applications and any and all re-examinations, reissues
       and extensions of all such patents, in each case to the extent any of the
       claims thereof are directed to inventions which SOC or its Associates has
       the right to license as of the Effective Date and which have been used in
       or which were developed or acquired for purposes of the
       Resins/Derivatives Business. For all purposes of this Agreement, a patent
       application is referred to as based on another patent application or a
       patent if the patent application in question claims priority from such
       other patent application or such patent.

       "Part I Patent Rights" means the Patent Rights listed in, or based on or
        --------------------
       issuing from those Patent Rights listed in, Part I of Appendix 2.

       "Part II Patent Rights" means the Patent Rights listed in, or based on or
        ---------------------
       issuing from those Patent Rights listed in, Part II of Appendix 2.

       "Part III Patent Rights" means the Patent Rights listed in, or based on
        ----------------------
       or issuing from those Patent Rights listed in, Part III of Appendix 2.

       "Part IV Patent Rights" means the Patent Rights listed in, or based on or
        ---------------------
       issuing from those Patent Rights listed in, Part IV of Appendix 2.

       "Part I Invention Disclosures" means the Invention Disclosures listed in
        ----------------------------
       Part I of Appendix 3.

       "Part II Invention Disclosures" means the Invention Disclosures listed in
        -----------------------------
       Part II of Appendix 3.

       "Part III Invention Disclosures" means the Invention Disclosures listed
        ------------------------------
       in Part III of Appendix 3.

       "Parties or Party" means as the context requires, both or each of SER and
        ----------------
       SOC.

       "Patent Rights" means:
        -------------

       (a)    the patents and patent applications listed in Appendix 2 hereof;
<PAGE>

       (b)    any other patent applications which may later be filed based on
              (a) above in any country to the extent any of the claims thereof
              cover inventions which SOC or an Associate of SOC has a right to
              license as of the Effective Date and which have been used in the
              Resins/Derivatives Field or which were developed or acquired for
              purposes of the Resins/Derivatives Business;

       (c)    any patents issuing in any country from patent applications of (a)
              or (b) above; and

       (d)    any re-examinations, reissues and extensions of patents of (a) or
              (c) above.

       "Products" means:
        --------

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

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

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

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

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

       (f)    polyesters prepared from a mono-, a di- and/or a tri-functional
              aliphatic, ethylenically unsaturated or cycloaliphatic carboxylic
              acid or anhydrides thereof, optionally mixed with a mono-, di-
              and/or tri-functional aromatic carboxylic acid or anhydrides
              thereof, and mono-, di-, tri-and/or tetra functional alcohol, and
              optionally a hydroxy-acid and/or a dihydroxy-acid, said polyester
              containing as functional groups mainly secondary and/or tertiary
              carboxylic groups or primary and/or secondary alcohols in pendant
              and/or terminal position, and the corresponding polyglycidyl
              esters or epoxidized esters thereof, and having a number average
              molecular weight of up to 10,000 g/mol;

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

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

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

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

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

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

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

       (n)    [intentionally left blank]

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

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

       "Resins/Derivatives Business" means for purposes of this Intellectual
        ---------------------------
       Property Transfer and Licence Agreement that business carried out in the
       Resins/Derivatives Field by or for Shell Chemical Company or SER for the
       manufacture of Products and for the marketing and sale of Products so
       manufactured, together with research and development activities in the
       Resins/Derivatives Field in support thereof, in each case within two (2)
       years prior to the Effective Date.

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

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

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

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

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

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

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

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

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

                      (C)  formulating hydraulic fluids;

                      (D)  formulating power transmission fluids;

                      (E)  dewaxing lube oil;

                      (F)  transporting crude oil; and

              (ii)    intermediates ultimately intended for use in manufacturing
                      Additives for use in any one or more of the applications
                      specified in part (e)(i) above.

       This Resins/Derivatives Field further encompasses using
       Resins/Derivatives Technical Information and Shell Technical Information
       for purposes of :

              (I)     upgrading the organic byproducts in part (c) of the
                      Products definition, and

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

       "Resins/Derivatives Technical Information" means: i) information of the
        ----------------------------------------
       types described in Appendix 4, and ii) other technical know-how, data and
       information (including, without limitation, trade secrets) in which, in
       each case, SOC or an Associate of SOC has assignable rights in the
       Resins/Derivatives Field and which has been exclusively used (whether for
       research, development or commercial purposes) in the Resins/Derivatives
       Business; provided, however, that Resins/Derivatives Technical
       Information shall not include Excluded Technical Information or Shell
       Technical Information. For the avoidance of doubt, Resins/Derivatives
       Technical Information shall not include any technical know-how, data or
       information which has, in respect of either (i) or (ii), been received by
       or on behalf of SOC or any of its Associates from a Third Party subject
       to obligations which prohibit its disclosure to SER, unless and until
       such obligations terminate or disclosure to SER is authorized pursuant to
       efforts under Clause 5.2 or otherwise.

       "Shell Technical Information" means all technical know-how, data and
        ---------------------------
       information (including, without limitation, trade secrets) which has been
       used (whether for research, development or commercial purposes) by or in
       the Resins/Derivatives Business but which has not been exclusively used
       in the Resins/Derivatives Business. For all purposes of this Agreement,
       technical information acquired or developed for purposes of the
       Resins/Derivatives Business shall be considered to have been used in the
       Resins/Derivatives
<PAGE>

       Business. Shell Technical Information includes but is not limited to
       information of the types described in Appendix 6. Shell Technical
       Information shall not include any Resins/Derivatives Technical
       Information or Excluded Technical Information. For the avoidance of
       doubt, Shell Technical Information shall not include any technical know-
       how, data or information which has been received by or on behalf of SOC
       or any of its Associates from a Third Party subject to obligations which
       prohibit its disclosure to SER, unless and until such obligations
       terminate or disclosure to SER is authorized pursuant to efforts under
       Clause 5.2 or otherwise.

       "SERR" means Shell Epoxy Resins Research B.V., a company incorporated
        ----
       under the laws of the Netherlands and having its registered office at 30
       Carel van Bylandltaan, The Hague, the Netherlands.

       "SIRM" means Shell International Research Maatschappij B.V., a company
        ----
       incorporated under the laws of the Netherlands and having its registered
       office at 30 Carel van Bylandtlaan, The Hague, the Netherlands.

       "Technical Copyrights" means all rights world-wide of copyright to the
        --------------------
       extent such rights are owned or controlled by SOC in all documents,
       drawings, plans and other works (other than software) to the extent they
       recite, depict or describe Shell Technical Information.

       "Third Party" means any person other than SOC or its Associates or SER or
        -----------
       its Associates. For avoidance of doubt, SIRM and its Associates and SERR
       and its Associates are Third Parties for purposes of this Agreement.

       "United States" or "U.S." means the United States of America and the
        -------------      ----
       states, commonwealths, territories and possessions thereof.

1.2    The headings contained in this Agreement are for convenience of reference
       only and shall not constitute a part of this Agreement for any other
       purpose.

1.3    Except where and to the extent that a contrary intention otherwise
       appears, words importing the singular number include the plural number
       and vice-versa and words importing any gender include all other genders.

1.4    References to Clauses and Appendices are references to Clauses and
       appendices of this Agreement, unless otherwise indicated.

                           CLAUSE 2 - PATENT RIGHTS
                           ------------------------

2.1    With effect from the Effective Date, and subject to the rights of Third
       Parties and Clause 2.7 hereof, SOC hereby assigns to SER all right, title
       and interest of SOC and its Associates in and to the Part I Patent
       Rights, subject to the grant-back to SOC of rights set out in Clause 2.3
       below.
<PAGE>

2.2    With effect from the Effective Date, and subject to the rights of Third
       Parties and Clause 2.7 hereof, SOC hereby assigns to SER all right, title
       and interest of SOC in and to the Part II Patent Rights, subject to the
       grant-back to SOC of rights set out in Clause 2.3 below.

2.3    With effect from the Effective Date, and subject to the rights of Third
       Parties, SER grants back to SOC in respect of Part I and Part II U.S.
       Patent Rights assigned to SER hereunder:

       (a)     an irrevocable, transferable, fully paid-up, perpetual, non-
               exclusive licence, subject to the rights of Third Parties, with
               the right to grant sub-licences, to practise outside the
               Resins/Derivatives Field inside of the U.S. the inventions
               claimed in such Part I U.S. Patent Rights and to conduct research
               and development in support thereof; and

       (b)     an irrevocable, transferable, fully paid-up, perpetual, exclusive
               licence, subject to the rights of Third Parties, with all rights
               to grant sub-licences, to practise outside the Resins/Derivatives
               Field inside of the U.S. the inventions claimed in such Part II
               U.S. Patent Rights and to conduct research and development in
               support thereof; and

       (c)     an irrevocable, transferable, fully paid-up, perpetual,
               non-exclusive licence in the Resins/Derivatives Field inside of
               the U.S. the inventions claimed in such Part I and Part II U.S.
               Patent Rights, with the right to grant sub-licences, to:

               (i)  manufacture, use and sell refinery products including fuels,
                    lubricants, bituminous compositions and chemical feedstocks,
                    and conduct research and development in support thereof; and

               (ii) use and sell Products in connection with operations for the
                    exploration for and production of oil, gas and other
                    minerals, and conduct research and development in support
                    thereof.

2.4    With effect from the Effective Date and subject to the rights of Third
       Parties, SOC grants to SER:

       (a)     an irrevocable, transferable, fully paid-up, perpetual, exclusive
               (except as noted below in Clause 2.4(c)) licence, with all rights
               to grant sub-licences, to practise in the Resins/Derivatives
               Field inside of the U.S. the inventions claimed in the Part III
               U.S. Patent Rights and to conduct research and development in
               support thereof;

       (b)     an irrevocable, fully paid-up, perpetual, non-exclusive licence,
               with the right to grant sub-licences but transferable only to an
               Associate of SER or to a successor of substantially all of SER's
               business in the Resins/Derivatives Field, to practise in the
               Resins/Derivatives Field inside of the U.S. the inventions
               claimed in the Part IV U.S. Patent Rights and to conduct research
               and development in support thereof; and

       (c)     an irrevocable, transferable, fully paid-up, perpetual, non-
               exclusive licence, with the right to grant sub-licences, to
               practise in the Resins/Derivatives Field in the U.S. the
               inventions claimed in the Part III U.S. Patent Rights, to:
<PAGE>

                (i)    manufacture, use and sell refinery products including
                       fuels, lubricants, bituminous compositions and chemical
                       feedstocks, and conduct research and development in
                       support thereof; and

                (ii)   use and sell Products in connection with operations for
                       the exploration for and production of oil, gas and other
                       minerals, and conduct research and development in support
                       thereof.

2.5    Responsibility for the further filing, prosecution, issuance,
       maintenance, defence and enforcement of the Part I and II Patent Rights
       assigned to SER herein shall pass to SER on the Effective Date. SOC shall
       notify any attorneys and/or agents who act for SOC in relation to such
       Part I and Part II Patent Rights of the assignment of these Patent Rights
       to SER, and that from the Effective Date such attorneys and agents are to
       take their instructions from SER and charge all fees and costs incurred
       after the Effective Date for filing, prosecuting, maintaining, defending
       and enforcing such Patent Rights to SER (subject to the right of SER, in
       its sole discretion to thereafter take action to terminate services of
       such attorneys and/or agents and appoint different counsel). Such
       attorneys and agents shall be requested promptly to send an invoice to
       SOC for their fees in respect of services rendered up to the Effective
       Date in relation to the Part I and Part II Patent Rights. SOC shall pay
       promptly for all such services identified as being rendered prior to the
       Effective Date. Case files (including but not limited to opposition and
       interference files) relating to the Part I and Part II Patent Rights will
       be transferred to SER. SOC undertakes to promptly forward to counsel
       designated by SER all correspondence received from the United States
       Patent and Trademark Office, during the six month period starting on the
       Effective Date, in respect of the Part I and Part II Patent Rights. SOC
       agrees to co-operate with SER to effect an orderly transition in respect
       of the subject matter set forth in this Clause 2.5 and further agrees to
       pay all patent maintenance renewal fees for Part I and II U.S. Patent
       Rights which are required to be paid within sixty (60) days after the
       Effective Date. In respect of such patent maintenance renewal fees, SOC
       shall send an invoice to SER and SER shall promptly reimburse SOC for all
       patent maintenance renewal fees paid by SOC for Part I and II U.S. Patent
       Rights after the Effective Date.

2.6    Subject to Clauses 2.10, 2.11 and 2.12, each Party shall from the
       Effective Date have responsibility for prosecuting, maintaining,
       defending and enforcing those Patent Rights which it owns and under which
       licences are granted to the other Party pursuant to this Agreement.
       Except as expressly provided in Clauses 2.10, 2.11 and 2.12, neither
       Clause 2.5 nor Clause 2.6 nor any other provisions of this Agreement
       shall obligate either Party to further file, prosecute, issue, maintain,
       defend or enforce any of the Patent Rights.

2.7    To the extent that any U.S. Patent Rights are in the name of an Associate
       of SOC or SIRM or an Associate of SIRM, SOC shall procure that the holder
       assigns or licenses to SER the Patent Right(s) as envisaged by this
       Clause 2, and that such holder shall comply with the terms of this Clause
       2. SER and SOC acknowledge that any non-US Patent Rights which are in the
       name of an SOC or an Associate of SOC are to be assigned to SERR pursuant
       to Clause 2.7 of an Intellectual Property Transfer and License Agreement
       between SIRM and SERR of even date herewith.

2.8    SOC irrevocably waives in favour of SER all rights of SOC and SOC's
       Associates to make, use and sell Products inside the Resins/Derivatives
       Field under the Part I, Part II and Part III Patent Rights, in each case
       for countries other than the United States, with the exception, in each
       case, of rights relating to:

                (i) manufacture, use and sale of refinery products including
                    fuels, lubricants, bituminous compositions and chemical
                    feedstocks, and research and development in support thereof;
                    and
<PAGE>

                (ii) use and sale of Products in connection with operations for
                     the exploration for and production of oil, gas and other
                     minerals, and research and development in support thereof.

2.9     SER shall be responsible for and shall bear all expenses, including but
        not limited to official fees, associated with recordal at the relevant
        patent offices, of the transfer to SER hereunder of title in the Part I
        and Part II Patent Rights. SOC agrees to co-operate with SER in the
        recordal of such transfer by executing required documents, in a form
        consistent with the grants under this Agreement, which shall be prepared
        by SER. Upon written request from a Party, the other Party shall arrange
        for the execution and delivery of any other assignment documents or
        other instruments necessary to effectuate any aspects of the assignments
        or licences provided for in this Clause 2.

2.10    With effect from the Effective Date, each Party shall give written
        notice to the other Party upon becoming aware of any infringement or
        threatened or suspected infringement of, or of any challenge to, the
        Part II or Part III U.S. Patent Rights and:

        (a)   SER will have the right (but is not obligated) at its cost to
              bring proceedings to enforce such Part II and Part III U.S. Patent
              Rights against infringement in the Resins/Derivatives Field. SOC
              will have the right (but is not obligated) at its cost to bring
              proceedings to enforce such Part II and Part III U.S. Patent
              Rights against infringement outside the Resins/Derivatives Field.
              Each Party shall have the right, at its own cost, to join in any
              suit brought by the other Party pursuant to this Clause 2.10 (a)
              to enforce, whether inside and/or outside of the
              Resins/Derivatives Field, such Part II and Part III U.S. Patent
              Rights and to participate in the defence of any challenge to such
              Part II and Part III U.S. Patent Rights.

        (b)   A Party not joining an enforcement or participating in a defence
              proceeding under this Clause 2.10 shall provide such assistance as
              may reasonably be required by and at the expense of the Party
              initiating or defending such proceeding and shall make no
              admission as to liability nor agree to any settlement or
              compromise.

        (c)   To the extent that damages, costs or other sums are recovered for
              infringement of such Part II or Part III U.S. Patent Rights in the
              Resins/Derivatives Field, they shall be for the account of SER. To
              the extent that damages, costs or other sums are recovered for
              infringement of such Part II or Part III U.S. Patent Rights
              outside the Resins/Derivatives Field, they shall be for the
              account of SOC.

2.11    SER shall notify SOC of each decision by SER not to continue to
        prosecute or maintain any of the Part II U.S. Patent Rights. In respect
        of a decision not to continue to prosecute, such notice shall be given
        as soon as is practicable, and, if reasonable under the circumstances,
        at least sixty (60) days prior to the ordinary due date set for a
        response. In respect of a decision not to continue to maintain, such
        notice shall be given promptly but in any event no later than ninety
        (90) days prior to the date action is due to maintain the Patent Rights
        in question. SER shall, at SOC's request, assign to SOC the rights of
        SER in such of the Part II Patent Rights which it does not wish to
        prosecute or maintain, and SOC shall grant back to SER an irrevocable,
        transferable, fully paid-up, perpetual, world-wide, non-exclusive
        licence, with the right to grant sub-licences, to practise in the
        Resins/Derivatives Field the inventions claimed in the Part II Patent
        Rights so assigned to SOC.

2.12    SOC shall notify SER of each decision by SOC not to continue to
        prosecute or maintain any of the Part III U.S. Patent Rights. In respect
        of a decision not to continue to prosecute, such notice shall be given
        as soon as it practicable and, if reasonable under the circumstances, at
        least sixty (60) days prior to the ordinary due date set for a response.
        In respect of a decision not to continue to maintain, such notice shall
        be given promptly but in any event no later than ninety (90) days prior
        to the date action is due to maintain the Patent Rights in
<PAGE>

        question. SOC shall, at SER's request, assign to SER the rights of SOC
        in such of the Part III Patent Rights which it does not wish to
        prosecute or maintain, and SER shall grant back to SOC an irrevocable,
        transferable, fully paid-up, perpetual, world-wide, non-exclusive
        licence, with the right to grant sub-licences, to practise outside the
        Resins/Derivatives Field the inventions claimed in the Part III Patent
        Rights so assigned to SER, and also licences under the Part III Patent
        Rights so assigned to SER which are equivalent to those set out in
        Clause 2.3(c).

2.13    SOC acknowledges that no right or licence, either express or implied, is
        granted to SOC under any patent or other intellectual property right
        owned by SER or its Associates, except as expressly provided by the
        terms of this Agreement.

2.14    SER acknowledges that no right or licence, either express or implied, is
        granted to SER under any patent or other intellectual property right
        owned by SOC or its Associates, except as expressly provided by the
        terms of this Agreement.

2.15    As soon as practicable after the Effective Date, upon request by SER,
        SOC shall make available to legal counsel for SER a copy of all final
        written opinions of legal counsel prepared for the Resins/Derivatives
        Business. The provisions of this Clause 2.15 are not intended and shall
        not be construed by either Party as a waiver of privilege and both
        Parties shall treat said opinions in a manner which is consistent with
        their common interest in maintaining privilege.

                       CLAUSE 3 - INVENTION DISCLOSURES
                       --------------------------------

3.1     With effect from the Effective Date, and subject to the rights of Third
        Parties, SOC hereby assigns to SER all right, title and interest of SOC
        in and to the Invention Disclosure Rights for Part I Invention
        Disclosures, subject to the grant-backs to SOC of rights set out in
        Clause 3.2.

3.2     With effect from the Effective Date, and subject to the rights of Third
        Parties, SER grants back to SOC under the Invention Disclosure Rights
        for Part I Invention Disclosures:

       (a)   an irrevocable, transferable, fully paid-up, perpetual, exclusive
             licence, with all rights to grant sub-licences, in the U.S. outside
             the Resins/Derivatives Field; and

       (b)   an irrevocable, transferable, fully paid-up, perpetual, non-
             exclusive licences in the U.S. in the Resins/Derivatives Field,
             with the right to grant sub-licences, to:

              (i)   manufacture, use and sell refinery products including fuels,
                    lubricants, bituminous compositions and chemical feedstocks,
                    and conduct research and development in support thereof; and

              (ii)  use and sell Products in connection with operations for the
                    exploration for and production of oil, gas and other
                    minerals, and conduct research and development in support
                    thereof.

3.3    With effect from the Effective Date, and subject to the rights of Third
       Parties, SOC grants to SER:

       (a)    an irrevocable, transferable, fully paid-up, perpetual, exclusive
              (except as noted below in Clause 3.3(c)) licence under the
              Invention Disclosure Rights for Part II Invention Disclosures,
              with the right to grant sub-licences, in the Resins/Derivatives
              Field in the U.S.;

       (b)    an irrevocable, fully paid-up, perpetual, non-exclusive licence in
              the Resins/Derivatives Field in the U.S. under the Invention
              Disclosure Rights for Part III Invention Disclosures, with the
              right to grant sub-licences but transferable only to an
<PAGE>

              Associate of SER or to a successor of substantially all of SER's
              business in the Resins/Derivatives Field; and

       (c)    an irrevocable, transferable, fully paid-up, perpetual, non-
              exclusive licence under the Invention Disclosure Rights for Part
              II Invention Disclosures, with the right to grant sub-licences, in
              the Resins/Derivatives Field in the U.S to:

              (i)   manufacture, use and sell refinery products including fuels,
                    lubricants, bituminous compositions and chemical feedstocks,
                    and conduct research and development in support thereof; and

              (ii)  use and sell Products in connection with operations the
                    exploration for and production of oil, gas and other
                    minerals, and conduct research and development in support
                    thereof.

3.4    Upon written request from a Party, the other Party shall arrange for the
       execution and delivery of any assignment documents or other instruments
       necessary to effectuate any aspects of the assignments or licences
       provided for in this Clause 3.

3.5    To the extent that any Invention Disclosure Rights are controlled by an
       Associate of SOC, SOC shall procure that such Associate assigns or
       licenses to SER the Invention Disclosure Rights as envisaged by this
       Clause 3.

3.6    In the event Part I Invention Disclosures result in issued patents, such
       patents shall thereafter be subject to the provisions of Clauses 2.10 and
       2.11, in the same respect as Part II Patent Rights.

3.7    In the event Part II Invention Disclosures result in issued patents, such
       patents shall thereafter be subject to the provisions of Clauses 2.10 and
       2.12, in the same respect as Part III Patent Rights.

3.8    Notwithstanding any provision herein to the contrary, this Agreement does
       not give any Party any cause of action for breach of contract with
       respect to unpatented public domain subject matter.

3.9    Case files relating to the Part I Invention Disclosures will be promptly
       transferred to SER.

                       CLAUSE 4 - TECHNICAL INFORMATION
                       --------------------------------

4.1    With effect from the Effective Date, subject to the rights of Third
       Parties, SOC assigns to SER all rights of SOC and its Associates in and
       to the Resins/Derivatives Technical Information, including but not
       limited to the right to file patent applications therefor, copyrights
       (including but not limited to registered copyrights) therein, and the
       right to enforce against misappropriation by Third Parties, in all cases
       subject to reservation by SOC of irrevocable, transferable, fully
       paid-up, perpetual, worldwide, non-exclusive rights to use
       Resins/Derivatives Technical Information in the Resins/Derivatives Field,
       including the right to grant sub-licenses and the right to enforce
       against misappropriation by Third Parties, to:

              (i)   manufacture, use and sell refinery products including fuels,
                    lubricants, bituminous compositions and chemical feedstocks,
                    and conduct research and development in support thereof; and

              (ii)  use and sell Products in connection with operations for the
                    exploration for and production of oil, gas and other
                    minerals, and conduct research and development in support
                    thereof;
<PAGE>

       and further subject to reservation by SOC of irrevocable, transferable,
       fully paid-up, world-wide, perpetual, exclusive rights in respect of
       Resins/Derivatives Technical Information outside the Resins/Derivatives
       Field, including the right to grant sub-licenses and the right to enforce
       against misappropriation by Third Parties.

       The reservations of rights set forth in this Clause 4.1 shall further
       include irrevocable, transferable, fully paid-up, world-wide, perpetual,
       exclusive rights outside the Resins/Derivatives Field, with all rights to
       grant sub-licenses, under any patents (other than Patent Rights and
       Invention Disclosure Rights) owned or controlled by SER or any of its
       Associates claiming inventions that are Resins/Derivatives Technical
       Information prior to the Effective Date but for which patent claims are
       first filed after the Effective Date.

4.2    With effect from the Effective Date, SOC grants to SER:

       (a)  an irrevocable, transferable, fully paid-up, perpetual, non-
            exclusive licence in the Resins/Derivatives Field in the U.S., with
            the right to grant sub-licences, and the right to enforce against
            misappropriation, in respect of Shell Technical Information other
            than that identified in Part A of Appendix 6; and

       (b)  an irrevocable, fully paid-up, perpetual, non-exclusive licence in
            the Resins/Derivatives Field in the U.S., without any right to grant
            sub-licenses and without the right to enforce against
            misappropriation, and transferable only to an Associate of SER or a
            successor of all or substantially all of the business of SER in the
            Resins/Derivatives Field, in respect of Shell Technical Information
            identified in Part A of Appendix 6.

       The license granted in (a) above shall further include an irrevocable,
       transferable, fully-paid, perpetual, non-exclusive license in the
       Resins/Derivatives Field, with the right to grant sub-licenses and with
       the right to enforce in the Resins/Derivatives Field, under any patents
       (other than Patent Rights and Invention Disclosure Rights) owned or
       controlled by SOC or any of its Associates claiming inventions that are
       Shell Technical Information other than that identified in Part A of
       Appendix 6 developed or acquired prior to the Effective Date but for
       which patent claims are first filed after the Effective Date.

       The license granted in (b) above shall further include an irrevocable,
       fully-paid, perpetual, non-exclusive license for the use of Shell
       Technical Information in the Resins/Derivatives Field, without any right
       to grant sub-licenses and without the right to enforce against
       misappropriation, and transferable only to an Associate of SER or a
       successor of all or substantially all of the business of SER in the
       Resins/Derivatives Field, under any patents (other than Patent Rights and
       Invention Disclosure Rights) owned or controlled by SOC or any of its
       Associates claiming inventions that are Shell Technical Information
       identified in Part A of Appendix 6 developed or acquired prior to the
       Effective Date but for which patent claims are first filed after the
       Effective Date.

4.3    At its own cost, SOC shall use reasonable efforts to promptly provide to
       SER Resins/Derivatives Technical Information assigned to SER, and such
       Shell Technical Information licensed to SER hereunder as SOC believes is
       reasonably necessary for the normal conduct of the Resins/Derivatives
       Business, in each case to the extent that such information is as of the
       Effective Date in the possession of SOC or Associates of SOC engaged in
       the Resins/Derivatives Business in written or other tangible form. SOC
       shall
<PAGE>

       further use reasonable efforts to promptly provide to SER, at SER's
       request and cost, such other Shell Technical Information that is as of
       the Effective Date in the possession of SOC or Associates of SOC engaged
       in the Resins/Derivatives Business in written or other tangible form. The
       nature of the physical transfer to SER of Shell Technical Information
       shall be consistent with the manner in which such Shell Technical
       Information has been available to the Resins/Derivatives Business.
       Details as to the implementation of this provision shall be agreed as
       circumstances reasonably require following the Effective Date.

4.4    This Agreement shall not be construed to grant SER any rights or licences
       in respect of Excluded Technical Information.

                  CLAUSE 5 - INTELLECTUAL PROPERTY AGREEMENTS
                  -------------------------------------------

5.1    SOC shall assign, or shall cause the assignment, and SER agrees to accept
       assignment, of those Intellectual Property Agreements that SOC or the SOC
       Associate which is a party to the Intellectual Property Agreement has
       authority to assign, so that SER shall be entitled to the benefit and
       shall be subject to the burden thereof as of the Effective Date. SER
       shall carry out, perform and complete all obligations and liabilities to
       be discharged under such Intellectual Property Agreements on or after the
       Effective Date, and shall indemnify, defend and hold harmless SOC and its
       Associates and SIRM and its Associates and their respective officers,
       directors, employees and agents from and against any claim in respect of
       failure on the part of SER to carry out, perform and complete such
       obligations and liabilities. SOC shall indemnify, defend and hold
       harmless SER and its Associates and SERR and its Associates and their
       respective officers, directors, employees and agents against any claim in
       respect of failure on the part of SOC and/or its Associates to carry out,
       perform and complete all obligations or liabilities to be discharged
       under the Intellectual Property Agreements prior to the Effective Date.

5.2    From the Effective Date, insofar as the benefit or burden of any of the
       Intellectual Property Agreements cannot effectively be assigned to SER
       except by an agreement for novation or with consent to the assignment
       from a Third Party, at the request of SER, SOC shall , and shall cause
       its Associates that are parties to such Intellectual Property Agreements
       to, use commercially reasonable efforts (including participating in joint
       letter to such Third Parties, responding to inquiries from such Third
       Parties, and executing novation documents) to assist SER in pursuing
       novation or consent for assignment of any Intellectual Property Agreement
       material to the Resins/Derivatives Business, provided, however, that such
       cooperation shall not include any requirement of SOC or any of its
       Associates to pay money (not otherwise due or payable by SOC) to the
       other party to the Intellectual Property Agreement, commence or
       participate in any litigation or offer or grant any accommodation
       (financial or otherwise) to any Third Party. No representation or
       warranty has been given or can be given that the other parties to the
       Intellectual Property Agreements will agree to the assignment or novation
       thereof in favour of SER. From the Effective Date, and until any
       necessary Third Party consent to the assignment of an Intellectual
       Property Agreement may be obtained, a novation agreement may be entered
       into or other arrangements may be effected, if it is permissible under
       the Intellectual Property Agreement in question, SOC shall grant, or
       cause the relevant Associate of SOC to grant, to SER a sub-licence under
       the Intellectual Property Agreement, and SER shall, without limitation to
       Clause 5.1, be liable for any royalties or other costs associated with
       such sub-licence. Any technical information which is subject to an
       Intellectual Property Agreement and can only be made available to SER
       upon novation, receipt of consent or grant of such a sub-licence, shall
       after such novation, consent or grant
<PAGE>

       promptly be provided to SER, provided that nothing in this Agreement
       shall require SOC to retain copies of any technical information past the
       second anniversary of Closing or through the termination of good faith
       efforts to obtain novation, consent or grant of a sub-license, whichever
       is later.

                        CLAUSE 6 - TECHNICAL COPYRIGHTS
                        -------------------------------

       With effect from the Effective Date and subject to Clause 7 and the
       rights of Third Parties existing at the Effective Date, SOC grants to SER
       an irrevocable, transferable, non-exclusive, fully paid-up, perpetual
       license in the Resins/Derivatives Field under its Technical Copyrights,
       with the right to grant sub-licenses, and with the right to enforce the
       Technical Copyrights against Third Parties other than SIRM or Associates
       of SIRM.

       No license is granted under this Clause 6 in respect of any copyrights in
       any Excluded Technical Information, whether such Excluded Technical
       Information is contained in any work alone or in combination with any
       Shell Technical Information and/or Resins/Derivatives Technical
       Information.

                          CLAUSE 7 - CONFIDENTIALITY
                          --------------------------

7.1    With the exception of the exercise of the rights of SOC under Clauses 2,
       3, 4.1(i) and 4.1(ii), and of activities undertaken at the request of
       SER, SOC undertakes for itself and its Associates that they:

       (a)    shall not use any Resins/Derivatives Technical Information in the
              Resins/Derivatives Field; and

       (b)    shall not disclose any Resins/Derivatives Technical Information to
              any Third Party for use in the Resins/Derivatives Field.

7.2    With the exception of the exercise of the rights of SER under Clauses 2
       and 3 and of activities undertaken at the request of SOC, SER undertakes
       for itself and its Associates that they:

       (a)    shall not use any Resins/Derivatives Technical Information outside
              the Resins/Derivatives Field; and

       (b)    shall not disclose any Resins/Derivatives Technical Information to
              any Third Party for use outside the Resins/Derivatives Field.

7.3    With the exception of the exercise of the rights of SER under Clauses 2
       and 3 and of activities undertaken at the request of SOC, and subject to
       the provisions of Clause 7.4 governing SER's obligations in respect of
       Shell Technical Information identified in Part A of Appendix 6 and the
       provisions of Clause 7.8 governing SER's obligations in respect of
       Excluded Technical Information, with regard to (i) Shell Technical
       Information, and (ii) any other technical information SER may receive
       from or on behalf of SOC or its Associates in connection with SER's
       acquisition of the Resins/Derivatives Business, SER undertakes that it:

       (a)    shall not use the same outside the Resins/Derivatives Field; and

       (b)    shall not disclose the same to any Third Party for use outside the
              Resins/Derivatives Field.
<PAGE>

7.4    With the exception of activities undertaken at the request of SOC, and
       subject to the provisions of Clause 7.8 governing SER's obligations in
       respect of Excluded Technical Information, with regard to Shell Technical
       Information identified in Part A of Appendix 6, SER undertakes that it:

       (a)    shall not use the same for any purpose other than in relation to
              its activities within the Resins/Derivatives Field; and

       (b)    shall not disclose the same to any Third Party.

7.5    The undertakings as to each obligated Party pursuant to Clauses 7.1, 7.2,
       7.3 and 7.4 above, as well as any obligations of confidence and
       restrictions on use of technical information, data and/or know-how which
       the grants and assignments under Clause 4 may impose (either directly or
       by implication) on the granting or assigning party, shall not apply to
       information which as of the Effective Date the obligated Party can show

       (a)    is part of the public knowledge or literature;

       and shall cease to apply to information which after the Effective Date
       the obligated Party can show:

       (b)    has become part of the public knowledge or literature without
              breach of said undertakings by said obligated Party; or

       (c)    has been received by it after the Effective Date from a Third
              Party having a legal right to disclose it to said obligated Party.

       The foregoing exceptions shall not, however, apply to:

              (i)   specific information merely because it is embraced by or
                    included with other information which falls within any one
                    or more of such exceptions; or

              (ii)  any combination of information merely because specific
                    information (but not the combination itself) falls within
                    any one or more of such exceptions.

7.6    In the event that the obligated Party is required or requested by any
       court, legislative or administrative body to disclose any
       Resins/Derivatives Technical Information, Shell Technical Information or
       other information covered by its undertakings pursuant to this Clause 7,
       then the obligated Party will, prior to disclosure, promptly notify the
       other Party so that an appropriate protective order can be sought and/or
       other action can be taken if possible. In the event that such protective
       order is not, or cannot be, obtained, then:

       (a)    The obligated Party may disclose to the appropriate body that
              portion of the information which it is advised in writing by legal
              counsel that it is legally required to disclose, provided that it
              shall use reasonable efforts to obtain assurances that
              confidential treatment will be accorded to the information; and

       (b)    The obligated Party shall not be liable for such disclosure to the
              appropriate body unless such disclosure was caused by or resulted
              from a previous disclosure by the obligated Party that was not
              permitted by this Agreement.
<PAGE>

7.7    Except for the obligations set forth in Clause 7.4 for Shell Technical
       Information described in Part A of Appendix 6, the obligations set forth
       in Clause 7.8 for Excluded Technical Information and the obligations
       undertaken in the Intellectual Property Agreements, all express and
       implied restrictions in respect of disclosure and use of information
       under Clause 4, Clause 6 and/or Clause 7 of this Agreement shall
       terminate ten (10) years after the Effective Date.

7.8    It is not the intention of SOC to disclose Excluded Technical Information
       to SER. In respect of any Excluded Technical Information which SER may
       receive, SER agrees to hold the same in strict confidence, not to
       disclose it to any third party and not to use it for any purpose
       whatsoever. To the extent SER becomes aware that it is in possession of
       Excluded Technical Information in written or other tangible form
       (including but not limited to information stored electronically), SER
       agrees promptly to return to SOC or destroy such information, or cause
       such information to be returned to SOC or destroyed, in each case at
       SOC's option.

7.9    The obligations imposed by this Clause 7 are in addition to obligations
       of confidentiality and restrictions on use of technical information which
       are imposed by the Intellectual Property Agreements.

7.10   In observing its obligations of confidentiality under Clauses 7.1 through
       7.4, each Party shall apply at least the same degree of care which that
       Party applies in protecting its own proprietary information of like kind,
       and no less care than is typically applied in the chemical industry.
       Whenever necessary or appropriate, a Party making disclosures which it is
       entitled to make hereunder to a Third Party shall obtain prior written
       agreement by the Third Party to use the same only for the purpose for
       which it is disclosed and not to disclose the same to any other Third
       Party.

                      CLAUSE 8 - INDEMNITIES; LIABILITIES
                      -----------------------------------

8.1    EXCEPT AS EXPRESSLY SET FORTH IN THIS CLAUSE 8, SOC MAKES NO
       REPRESENTATION AND EXTENDS NO WARRANTIES, EXPRESS OR IMPLIED, AND ASSUMES
       NO RESPONSIBILITY WHATSOEVER WITH RESPECT TO (I) ANY TECHNICAL
       INFORMATION WHICH MAY BE DISCLOSED OR LICENSED IN CONNECTION WITH THIS
       AGREEMENT, OR ITS SUITABILITY, COMPLETENESS OR ACCURACY OR ITS
       MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; OR (II) THE SCOPE,
       VALIDITY OR ENFORCEABILITY OF ANY PATENT RIGHTS.

8.2    Neither Party shall be liable for any loss, damage, injury (including, to
       the full extent permitted by law and no further, personal injury or
       death), demand or expense, direct or indirect, resulting from negligence,
       gross negligence, strict liability or whatever the cause and arising out
       of or in connection with the exercise by the other Party or any licensee
       or sub-licensee of the other Party of the licences and rights granted to
       such other Party under this Agreement. Each Party shall indemnify, defend
       and hold harmless the other Party and its Associates (and their
       respective officers, directors, employees and agents) against any claim
       or action brought by any Third Party for any loss, damage, injury
       (including, to the
<PAGE>

       full extent permitted by law and on further, personal injury or death),
       demand or expense arising out of or in connection with the exercise by
       that Party or any licensee or sub-licensee of that Party of the licences
       and rights granted under to this Agreement.

                           CLAUSE 9 - EXPORT CONTROL
                           -------------------------

SER acknowledges that Resins/Derivatives Technical Information, Shell Technical
Information and other information to be made available hereunder may be subject
to export control under the Export Administration Regulations of the United
States of America Department of Commerce, and/or export regulations of other
United States of America Government agencies including the Department of State
and Department of Treasury.

                           CLAUSE 10- MISCELLANEOUS
                           ------------------------

10.1   Execution in Counterparts. This Agreement may be executed in two or more
       -------------------------
       counterparts, each of which shall be deemed an original, but all of which
       together shall constitute one and the same document.

10.2   Waivers. Except as specifically provided in this Agreement, no failure or
       -------
       delay on the part of any Party in exercising any right, power or remedy
       hereunder and no course of dealing among the Parties shall operate as a
       waiver by any party of such right, power or remedy unless the event
       giving rise to such right, power or remedy no longer exists or has been
       cured.

10.3   Amendment. This Agreement may be modified, supplemented or amended only
       ---------
       by a written instrument executed by all parties thereto.

10.4   Entire Agreement. The Agreement (together with the appendices) constitute
       ----------------
       the entire agreement of the parties thereto with respect to their subject
       matter, and supersede all prior agreements and understandings of the
       parties thereto, oral and written, with respect to their subject matter.

10.5   Headings. The headings contained in this Agreement are for the sole
       --------
       purpose of convenience of reference, and shall not in any way limit or
       affect the meaning or interpretation of any of the terms or provisions of
       such Transaction Document.

10.6   Successors/Assigns. Except as set forth in this Agreement, SER shall not
       ------------------
       transfer or assign this Agreement, directly or indirectly, by operation
       of law or otherwise, without the prior written consent of SOC, and any
       purported transfer or assignment that does not comply with this Clause
       10.06 shall be null and void ab initio; provided, that SER may assign
                                               --------
       this Agreement (a) after Closing, to an Associate of SER or in connection
       with a sale or recapitalization of its business to which this agreement
       relates (whether by merger, stock sale, sale of all or substantially all
       assets or otherwise) or (b) to any lender (or agent therefor) for
       security purposes or pursuant to the assignment thereof by any such
       lender or agent in connection with the exercise by any such lender or
       agent of all of its rights and remedies as secured creditor with respect
       thereto. Each Party agrees to cause its successors
<PAGE>

       and permitted assigns to agree in writing to be bound by the terms of
       this Agreement, provided, that nothing contained herein shall relieve SER
                       --------
       from its obligations under this Agreement

       To the extent that any right under this Agreement is designated as being
       transferable, the holder of that right shall be entitled to pledge such
       right for security purposes.

10.7   No Third-Party Beneficiaries. Except as may be expressly provided
       ----------------------------
       otherwise, nothing in this Agreement is intended or shall be construed to
       confer any rights or remedies upon any person, other than the Parties and
       their respective successors and permitted assigns..

10.8   Interpretation. In construing any Transaction Document, no consideration
       --------------
       shall be given to the fact or presumption that either Party had a greater
       or lesser hand in drafting the applicable Transaction Document.

10.9   Expenses, Transfer Taxes, Etc. Whether or not the transactions
       -----------------------------
       contemplated by this Agreement shall be consummated, except as otherwise
       expressly provided herein, all fees and expenses (including all fees of
       counsel, actuaries and accountants) incurred by any Party in connection
       with the negotiation and execution of this Agreement shall be borne by
       such Party, provided, however, that SER shall pay, or cause to be paid
       all applicable taxes and recording fees.

10.10  Governing Law and Disputes Resolution. In the event of any "IP
       -------------------------------------
       Controversy" (as defined in Appendix 7 of this Agreement) between the
       Parties arising out of this Agreement, the Parties will use good faith
       efforts, for a period of thirty (30) days following notice by a Party to
       the other Party that an IP Controversy exists, to resolve the IP
       Controversy through negotiation and compromise. If such an IP Controversy
       cannot be resolved during the period specified above, either Party may
       require that the IP Controversy be finally resolved under the provisions
       of Appendix 7 to this Agreement. Pending the completion of any
       arbitration proceedings, obligations not in dispute will continue to be
       performed.

       THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
       LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY OF THE
       CONFLICT OF LAWS RULES THEREOF.

10.11  Bankruptcy. The licenses granted herein by SOC or SER, as the case may
       ----------
       be, to the Patent Rights, Invention Disclosure Rights, Resins/Derivatives
       Technical Information, Shell Technical Information and Technical
       Copyrights shall be deemed to be, for purposes of Section 365(n) of the
       U.S. Bankruptcy Code, to the fullest extent permitted by law, licenses to
       rights in "intellectual property" as defined in Section 101 of the
       Bankruptcy Code. The parties agree that the licensee to any such
       licenses, as the case may be, shall retain and may fully exercise all of
       its rights and elections under the Bankruptcy Code. In the event that a
       bankruptcy proceeding under the Bankruptcy Code is commenced by or
       against the licensor of any such licenses, the licensee shall be
       entitled, at its option, to: (a) retain all of its rights under this
       Agreement (including without limitation all rights and licenses granted
       herein) pursuant to Section 365(n) of the U.S. Bankruptcy Code; or (b)
       receive a complete duplicate of, or complete access to, all Patent
       Rights, Invention Disclosure Rights, Resins/Derivatives
<PAGE>

       Technical Information, Shell Technical Information and Technical
       Copyrights constituting "intellectual property" under Section 101 of the
       Bankruptcy Code. If any of the foregoing are not already in the
       licensee's possession, it shall be promptly delivered to such licensee
       upon such licensee's written request (i) upon any such commencement of a
       bankruptcy proceeding, unless the licensor of such rights elects to
       continue to perform all of its obligations under this Agreement.

10.12  Notices. All notices and other communications given under this Agreement
       -------
       shall be in writing and shall be effective upon receipt by the addressee
       at the address or telefax indicated below:

       (i)    if to SOC:            Shell Oil Company
                                    910 Louisiana Street
                                    Houston, Texas  77002
                                    Fax No.:(713) 241-6617

                                    Attention:  Intellectual Property Services

       (i)    if to SER:            Resolution Performance Products, Inc.
                                    1600 Smith Street
                                    Houston, Texas  77002
                                    Fax No.:(713) 241-5333

                                    Attention:  Legal Department

       Each Party may change its address for purposes of this Agreement by
       giving the other Party written notice of the new address in the manner
       set forth above.

10.13  Severability of Provisions. The invalidity, illegality or
       --------------------------
       unenforceability of any one or more of the provisions of this Agreement
       shall in no way affect or impair the validity and enforceability of the
       remaining provisions thereof.
<PAGE>

         AS WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in duplicate original at the places and on the dates indicated below.

At _________________________, this 14th day of November, 2000

Signed: /s/ D.G. Naugle....................................

SHELL OIL COMPANY

At _________________________, this 14th day of November, 2000

Signed: .../s/.D.G. Naugle.................................

SHELL EPOXY RESINS LLC

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