Supply Agreement Terms

SULFUR SUPPLY AGREEMENT entered into by and between PEMEX GAS Y PETROQUIMICA BASICA (“Seller”), represented herein by ****, acting as **** for Basic Petrochemical Products, that is assigned to the Underdirectorate of Liquefied Gas and Basic Petrochemicals, and INNOPHOS FOSFATADOS DE MEXICO, S. DE R.L. DE C.V. (“Purchaser”), represented herein by Messrs. Pablo Gerardo Lopez Sanchez and Jose Ramon Gonzalez de Salceda y Urbina, both acting as Legal Representatives, pursuant to the following Representations and Sections:

Seller represents as follows:

      I. That it is a decentralized public entity of the Government-Controlled Public Administration of the United Mexican States Federal Government with a technical, industrial and business nature, with own legal capacity and property, and with a legal capacity to enter into this Agreement pursuant to the Organic Law of Petroleos Mexicanos y Organismos Subsidiarios which was published in the Federal Official Gazette on July 16, 1992;

      II. That in the capacity of a government-controlled entity its purpose is processing natural gas, natural gas and artificial gas liquids, storing, transporting, distributing and marketing those hydrocarbons, as well as any derivatives capable of serving as basic industrial raw materials;

      III. That it wishes to sell and deliver Sulfur to Purchaser under the terms and conditions set forth herein;

      IV. That it has the organization, technical capacity and elements, and financial, commercial and legal capacity to perform the obligations provided herein;

      V. That the powers granted to its legal representative have not been revoked, limited or modified in any manner whatsoever at the day of execution hereof, consequently, that it has legal authority broad enough to enter into this Agreement, as evidenced in Public Instrument No. 53915 that was granted before and certified by Mr. Jose Manuel Gomez del Campo Lopez, Esq., Notary Public No 136 in and for the Federal District, on May 7, 2007.

      VI. That its fiscal domicile is Av. Marina Nacional, Numero 329, Edificio 1917 (B-1) 10o Piso Colonia Huasteca, Delegacion Miguel Hidalgo, Mexico City Federal District, Codigo postal 11311 and Taxpayers’ Identification No. PGP-920716-MT6.

Purchaser represents the following:

      I. That it is a Business Corporation, duly incorporated and existing pursuant to the United Mexican States law, in accordance with Public Instrument No. 22,607 dated December 15, 1987, containing the Articles of Incorporation and By-laws, that was granted before and certified by Mr. Jose Manuel del Campo Lopez, Esq., Notary Public No. 136 in and for Mexico City, Federal District, duly registered in the Public Commercial Registry under No. 103, 384.

      II. That through public instrument No. 83,289 dated July 23, 1992 and notarized by Mr. Alberto T. Sanchez Colin, Notary Public No. 83 in and for Mexico City, Federal District, that was duly registered at the Commercial Public Registry under No. 103,384 it was agreed to change corporate name to Troy Industrias, S.A. de C.V.

      III. That through public instrument No. 34,108 notarized on December 26, 1994 by Mr. Eduardo Flores Castro Altamirano, Esq., Notary Public No. 33 in and for Mexico City, Federal District, that was duly registered at the Commercial Public Registry under No. 103,384, it was agreed to change corporate name to Albright & Wilson Troy de México, S.A. de C.V.

      IV. That through public instrument No. 65,786 notarized on July 6, 2000 by Mr. Carlos de Pablo Serna, Esq., Notary Public No. 137 in and for Mexico City, Federal District, that was duly registered at the Commercial Public Registry under No. 103,384, it was agreed to change corporate name to Rhodia Fosfatados de México, S.A. de C.V.

      V. That through public instrument No. 15,232 issued on August 17, 2004 notarized by Mr. Arturo Talavera Autrique, Esq., Notary Public No. 122 in and for Mexico City, Federal District, that was duly registered at the Commercial Public Registry under No. 103,384, it was agreed to change corporate name to Innophos Fosfatados de México, S. de R.L. de C.V.

      VI. That its corporate purpose is, among other things, produce, manufacture, recover, refine, assemble, process and industrialize, through any chemical or physical process, any product of the chemical industry and all other industry, consequently Sulfur supply is required therefor.

      VII. That it wishes to purchase and receive Sulfur from Seller, pursuant to the terms and conditions set forth herein;

      VIII. That it has the organization, technical capacity and elements, and the financial, commercial and legal capacity to perform its obligations referred to herein, including capacity to handle, carry, store and/or process Sulfur; that it is aware of risks resulting out of handling, carrying, storing and processing Sulfur, and that it has the capacity to face any responsibility related with accidents in such handling, carrying and processing; that it fully knows the provisions and requirements set forth in the laws, regulations, guidelines and any legal provision for handling Sulfur;

      IX. That Mr. José Ramon Gonzalez de Salceda y Urbina’s legal capacity to sign this Agreement is evidenced through public instrument No. 16,231 granted before and certified by Mr. Arturo Talavera Autrique, Esq., Notary Public No. 122 in and for Mexico City, Federal District, which instrument has been duly registered at the Commercial Public Registry under No. 103,384 on July 12, 2005 in Mexico City, Federal District. Also, that Mr. Pablo Gerardo Lopez Sanchez’s legal capacity is evidenced through public instrument No. 68,707granted before and certified by Mr. Carlos de Pablo Serna, Esq., Notary Public No. 137 in and for Mexico City, Federal District under Commercial Public Registry No. 103,384 on September 11, 2001 in Mexico City, Federal District, which powers have been ratified thereto pursuant to public instrument No 15,232 executed before and certified by Mr. Arturo Talavera Autrique, Esq. Notary Public No. 122 in and for Mexico City, Federal District on August 17, 2004.

      X. That its fiscal address is at Domicilio Conocido S/N Km. 5.5 Carretera Federal Coatzacoalcos-Villahermosa, Coatzacoalcos, Ver.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, the parties hereby agree as follows:

SECTION 1. DEFINITIONS; HEADINGS AND REFERENCES

      1.1 Definitions: For any purposes hereof, the following terms shall have the following meanings:

      “Affiliate”: regarding any person or entity, means any other person or entity controlling or controlled thereby or that is under common control together therewith;

      “Year”: calendar year; for past due interest computation purposes, 360 days are considered;

      “Shipping Center”: any filling premise located at the Gas Processing Centers of Seller or at Pemex Refinacion Refineries as detailed in Exhibit 1, wherein Seller produces Sulfur to be delivered to Purchaser;

      Institutional Credit Committee: A collegiate body responsible for authorizing credits, extensions, reductions, guaranty release, as well as for establishing credit policies applicable to both Pemex Gas and Petroquímica Básica customers”;

      “Agreement”: This Sulfur Supply Agreement including all Exhibits attached thereto; as well as any amendments, changes, supplements or Exhibits that may be prepared or attached to Agreement during its term;

“Day”: A calendar day;

      “Business Day”: a business day in accordance with work schedule and with labor contract of Petróleos Mexicanos y Organismos Subsidiarios;

      “Corporate Finance Department”: Administrative unit responsible for coordinating financial activities of Petróleos Mexicanos, its Subsidiary Agencies and Affiliates, and for establishing regulations to regulate performance thereof;

      “Payment Guaranty”: a payment commitment by a third party to pay for obligations agreed upon herein, which commitment covers risk for purchases on credit by Purchaser.

      “Past due Interest”: failure by Purchaser to make payments in due time and proper form shall give rise to past due interests payable thereby to accrue. Those past due interests that shall be computed over past due outstanding balances, beginning on maturity date and continuing during all time the debt due and payable remains outstanding and up until paid in full;

“Month”: calendar month;

      “Plant”: Any of Purchaser or Seller plants inside the United Mexican States where: Purchaser uses Sulfur received from Seller under this agreement for mixing, storing, distributing and/or processing purposes, or where Seller manufactures the Product.

“Product”: Sulfur in accordance with specifications set forth in Exhibit 2;

      “Final Delivery Schedule”: Regarding any month, the final delivery schedule of Product as determined in accordance with Section 3.4;

      “Proposed Delivery Schedule”: Proposed delivery schedule of Product as determined in accordance with section 3.2; requested by customer.

      “Operating Reasons”: Including but without limitation, those reasons or causes applicable to Plant such as processes and processing equipment-related problems in general, such as leaks in pipelines, tanks, deviations from operation in that same equipment, electric power failures, industrial safety and production handling in Plant.

      “SPEUA”: Payment method as determined by Banco de Mexico (Central Bank), called Electronic payment system for wide use”.

      “T.I.I.E.”: The interbank equilibrium interest rate published by the Central Bank in the Federal Official Gazette.

“Metric Ton”: Unit of weight equal to one thousand kilograms;

      “Contractual Volume”: Regarding any Month, means Product volume that Seller is obliged to sell and Purchaser is obliged to buy pursuant hereof which volume is computed based on provisions in Section 3;

      “Base Contractual Volume”: **** monthly metric Tons which volume Seller is obligated to sell and Purchaser is obligated to buy.

      1.2 Headings and references: Headings included in this Agreement shall not affect construction hereof. Except for any provision to the contrary, any and all references to Sections and Exhibits are included in regard to the Sections hereof and the Exhibits hereto.

SECTION 2. PURPOSE.

Subject to the terms and conditions hereof, Purchaser undertakes to buy Product from Seller and Seller undertakes to sell Product to Purchaser.

SECTION 3. DELIVERY VOLUME AND SCHEDULING

      3.1 Contractual Volume: Subject to the terms and conditions hereof, Product volume to be sold by Seller and bought by Purchaser in any Month (the “Contractual Volume” for such Month) shall be the one between (i) Base Contractual Volume and (ii) volume ordered by Purchaser, and confirmed in Final Delivery Schedule. Determination of Contractual Volume between that base and ordered amount, and volume confirmed in Final Delivery Schedule, for any Month, and of applicable delivery schedule, shall be made in accordance with following provisions in this Section 3.

      3.2 Proposed Schedule by Purchaser: Purchaser shall deliver to Seller, no later than on the fifth Day of each month:

(i) a proposed delivery schedule related with subsequent Month, pursuant to provisions in No. I, Exhibit 3, whereby Purchaser shall notify Seller the Product volume it wishes to receive in that Month, approximate dates and Shipping Center(s) where Purchaser wishes the Product to be loaded, and carriage shall be Purchaser’s responsibility; and

(ii) an estimate of Product volume Purchaser plans to order for two (2) subsequent Months.

      3.3 Determination of Contractual Volume: Seller shall provide an answer to schedule proposed by Purchaser for subsequent Month no later than the 25 ^th day of each month (prior to month product has been ordered for), through document mentioned under No. II, Exhibit 3, in the understanding that:

(i) if Base Contractual Volume is the volume ordered by Purchaser for any Month, Seller shall supply the ordered volume, and that volume shall comprise the Contractual Volume for such Month;

(ii) if volume ordered by Purchaser for any Month exceeds Base Contractual Volume, Seller may, at its discretion, supply any volume between the ordered volume and Base Contractual Volume, and volume so determined by Seller shall comprise the Contractual Volume for said Month; and

(iii) if volume ordered by Purchaser for any Month is smaller than Base Contractual Volume, Seller shall supply ordered volume and volume so determined by Seller shall comprise the Contractual Volume for said Month.

(iv) if Purchaser fails to deliver a proposed schedule to Seller, the Base Contractual Volume shall be deemed as the Contractual Volume for said Month.

Contractual Volume for such Month shall be considered in applying provisions in Section 3.5, and operating flexibility provided in Section 3.6.

A document delivered to Purchaser by Seller pursuant to this Section 3.3 shall comprise the “Final Delivery Schedule”, and Contractual Volume for any applicable Month may also be established therein, consequently, the Product Volume to be delivered during such Month and the Shipping Center(s) wherein Seller shall make deliveries shall be specified therein (dates, volumes and Shipping Center(s), different from those dates, volumes and Shipping Centers proposed by Purchaser in schedule thereof, may be specified in that document), in the understanding that, except as otherwise agreed upon or because of regular maintenance activities in Shipping Center(s) different from those proposed by Purchaser or because of repair of premises, deliveries shall be made in a relatively uniform manner during the applicable Month.

Notwithstanding any agreements in final delivery schedule pursuant to prior paragraphs, the parties agree that they may agree on additional volumes to those established in final delivery schedule, which volumes shall be deemed as amending Contractual Volume only for that month.

      3.4 Final Delivery Schedule: Seller shall send a confirmation regarding deliveries to be made in any applicable Month no later than the 25 ^th day of prior Month, pursuant to provisions in No. III, Exhibit 3. In said confirmation, the Proposed Delivery Schedule regarding Product Volume to be delivered during that Month, as well as the Shipping Center(s) where deliveries are to be made may be changed by Seller, provided however that this right of Seller may not affect its obligation (i) to fully deliver the Contractual Volume in any applicable Month, and (ii) to make deliveries in relatively regular manner during that Month, except as otherwise agreed upon or as for regular maintenance reasons in Shipping Center(s) different from those proposed by Purchaser in schedule thereof, or as for repairs to premises. Delivery schedules so confirmed by Seller for any Month shall comprise the “Final Delivery Schedule”. It is expressly agreed upon that deliveries to be made in accordance with Final Delivery Schedules shall be subject to provisions set forth in Exhibit 3.

3.5 Contractual Volume, final obligation:

      3.5.1 In order to secure regular Product supply, and for both parties to have ideal conditions in planning their relative activities, the parties agree that Contractual Volume shall be final, except if parties agree to change Contractual Volume, or in the event of force majeure or Acts of God.

      3.5.2. In the event Purchaser, due to an cause attributable thereto, withdraws a volume smaller than the Contractual Volume applicable to **** months during a six-month period, Seller shall be entitled to (i) reduce Contractual Volume applicable to all subsequent months in a volume equal ****, and said reduction shall be notified to Purchaser within fifteen (15) days following last Day of that **** period wherein Purchaser had received smaller volumes than Contractual Volume, and new Base Contractual Volume shall remain in effect as from the Month detailed in notice date; or (ii) rescind Agreement which rescission shall become immediately effective, without requiring a court order, by personally notifying Purchaser which notice shall be given within 60 days following last day of the six-month period wherein such breach takes place, priorly complying with rescission proceedings provided for in section 29.

In the event the right to reduce Contractual Volume or to terminate the Agreement shall not be exercised by Seller, Purchaser’s obligation to receive the agreed upon Contractual Volume in each Month shall continue with full force and effect.

3.6 Flexibility for operating reasons; stoppage due to maintenance:

3.6.1 The parties shall not incur any liability whatsoever if in any Month they

supply or receive, if applicable, a volume smaller than Contractual Volume, provided that: As to Purchaser

(i) it is due to operating reasons, and such reduction does not exceed in any case 5% of applicable Contractual Volume for said Month.

Regarding Seller

(i) if due to operating reasons.

      3.6.2. Each party shall be entitled to suspend purchases or sales of Product, for one or more Days, and not exceeding in the aggregate thirty (30) days per Year that are equivalent to Base Contractual Volume, provided that:

(i) those suspensions are strictly caused by a stoppage due to maintenance reasons at any Shipping Center(s) different from the one(s) proposed by Purchaser within proposed schedule or of any other Seller’s production center or Plant, if any; and

(ii) volume of not supplied or not received product, if any, does not exceed in any Year the monthly average of Contractual Volume during the applicable Year.

Any party wishing to suspend purchase or sale of Product in accordance with the aforementioned shall as soon as possible notify the other party the scheduled dates therefor, but at least thirty (30) Days before the first Day of that suspension, except for those cases where interruption is due to remedial maintenance, in which case the parties shall notify thereof in writing on same day when the event is taking place, in accordance with Section 21 ”Notices” of the Agreement.

      3.7 Schedule coordination: In order to coordinate delivery schedules, each party shall appoint an area operating agent, who shall be essentially responsible for coordinating operating details related with Product delivery under this Agreement.

SECTION 4. VOLUME MEASUREMENT

     4.1 Volume: Volume for each delivery shall be determined by Seller’s staff using the weighing machines installed at the applicable Shipping Center, and carrier’s vehicle shall be weighed before and after the loading operation. Purchaser shall be entitled to appoint an agent to witness weighing process of loaded Product, as well as to be present when weighing machines are gauged, and in the event any non-reconciling differences arise, opinion of an independent inspector shall be requested (which fees shall be paid in equal proportion by both Purchaser and Seller) “selected by the parties” from among those inspectors detailed in Exhibit 4 hereto in order to confirm those measurements. Seller undertakes to show Purchaser, upon request and at any moment, evidences that the maintenance and gauging schedule for weighing machines has been fulfilled in accordance with regulations then effective established by the competent authority in that field.

     4.2 Effects: Volume measurements performed as above-mentioned shall be final and binding for both parties, except in the event of an evident error. However, and without prejudice to any subsequent right of the parties to prove an evident error in those measurements, determination of volume as aforementioned shall prevail for billing purposes and for obligation by Purchaser to make applicable payment in accordance with what is provided in Section 9.

SECTION 5. QUALITY.

     5.1 Specifications: Product to be sold under this Agreement shall fulfill those specifications set forth in Exhibit 2 hereto.

     5.2 Determining quality. Seller shall test quality of Product to be supplied out of storage tanks in accordance with those methods set forth in Exhibit 2 hereto, and Seller shall prepare any applicable quality certificates related therewith. Purchaser shall be entitled to request Seller the Product quality certificates, and also that an independent inspector selected from those inspectors detailed in Exhibit 4 hereto takes part in the event of any disagreement, and that independent inspector shall confirm at Seller’s laboratories that product covered by those certificates do meet minimum required features detailed in Exhibit 2. Final results of any quality analysis performed in accordance with this Section 5.2 shall be final and binding to all parties except in the event of an evident error.

The independent inspector’s fees shall be at the expense of any party making the error, that is, if minimum required quality is confirmed by inspector, fees shall be at the expense of Purchaser, and if a determination is made that minimum required quality is not fulfilled those fees shall be at the expense of Seller.

     5.3 No warranty provisions on product quality: Seller solely warrants that Product sold under this Agreement shall fulfill, at any applicable Shipping Center, specifications expressly set forth in Exhibit 2. Seller does not grant any other warranty, either express or implicit. Purchaser hereby relieves Seller of any other warranty, including but without limitation, any implicit warranty of enforceability or a warranty of fitness for a particular purpose, and specifically regarding sale of Product pursuant to this Agreement.

SECTION 6. DELIVERY

      6.1 Delivery method, transfer of title. All Product deliveries shall be made to carriage vehicles supplied by Purchaser at any applicable Shipping Center (in the understanding that Purchaser shall be liable for any and all Product shipping expenses,) in accordance with the following terms of this Section 6. Transfer of title from Seller to Purchaser shall be deemed executed upon the time Product may be loaded into any applicable carrier vehicle. As from that time, liability of Seller regarding the Product shall terminate and Purchaser shall assume all risks for loss, damages, reduction, contamination or evaporation as well as any and all risks intrinsic to Product handling, carriage, storing and processing. Any loss or damage caused to any of Seller’s property or to any third party’s property during loading and carriage operations, attributable to carrier or to any driver thereof shall be at the expense of Purchaser. The above-mentioned provisions are in accordance with Exhibit 3.

      6.2 Statement that Purchaser knows Shipping Centers, general procedures. Purchaser certifies that it fully knows conditions, procedures and premises at Shipping Centers and manufacturers, including those conditions, procedures and premises for Product delivery. Conditions, procedures and premises at Shipping Centers and manufacturers may be changed at any moment in which case Seller shall timely notify Purchaser. Also, Purchaser hereby acknowledges that general procedures currently established in Shipping Centers and manufactures related at any moment, among other aspects, with volume determination and safety measures for loading operations, shall be supplementary to (provided that they are not infringing) those procedures established herein. Notwithstanding the above-mentioned, it is expressly agreed that all deliveries to be made shall be performed pursuant to provisions in paragraphs IV and V, Exhibit 3 hereto.

      7.1 Volume and quality. Any claim that Purchaser might have regarding this Agreement as to Product volume or quality shall be notified, pursuant to Section 21 hereof to Seller within three (3) Days from the delivery date, but in any case, prior to Product unloading by Purchaser at the Plant. Without prejudice to the above provided, Purchaser may notify by telephone any intended claim to be submitted, to the field operating agent appointed by Seller, so that Seller may timely take any action deemed proper, the above in the understanding that said notice by telephone shall be confirmed in writing, through telefax, courier or electronic mail. The field operating agents appointed by the parties shall try to mutually solve said claim. In the event claim is not solved by those agents, Purchaser shall confirm its claim to Seller within a ten (10) Day period following date when initial notice of claim had been delivered through telefax, courier or electronic mail by Purchaser to Seller.

      7.2 Other claims: Any other claim Purchaser might have related with this Agreement shall be notified to Seller following method set forth in Section 7.1 within thirty (30) days from the date the events giving rise to claim took place, and that claim shall be decided in accordance with terms similar to those set forth herein.

      7.3 Disclaimer of liability by Seller: Seller shall not be liable whatsoever with Purchaser (and Purchaser shall be deemed to have waived thereto) regarding any claim that may not be notified by the Purchaser to Seller as provided in Sections 7.1 and 7.2

SECTION 8. PRICE

Product price shall be monthly computed by Seller in accordance with a formula authorized by the Ministry of Finance and Public Credit.

Any amendment to formula shall be notified in accordance with Section 21.

Price application criteria are included in Exhibit 5 hereto.

SECTION 9. TERMS OF PAYMENT

      9.1 Currency, payment time and place, default in payment: Purchaser shall make all payments provided herein in Mexican Pesos, without any discount or deduction whatsoever, to the account and bank notified thereto by Seller, through any of the following methods: (a) bank deposit submitted at a teller’s window, b) bank wire transfer c) SPEUA. Purchaser shall fulfill bank guidelines and policies in place regarding acceptance of checks; Purchaser shall also fulfill regulations in effect. Al payments of sold Product on credit and delivered shall be made no later than **** days from any applicable delivery date. All other payments made to Seller shall be performed within **** days following submittal by Seller of a payment demand in writing wherein indebtedness concept, amount and type of obligation is detailed. In the event any payment pursuant to this Agreement becomes due payable in a Day where banks remain closed, said payment may be made on the immediately following day when banks are open for business. Purchaser undertakes to reimburse Seller any bank fee improperly applied by banks to Seller for transactions performed by Purchaser. Assuming that Purchaser defaults in payment, Purchaser undertakes to pay Seller past due interest as from the day following the maturity date and all along that amount remains outstanding (Principal and VAT) and until payment is made in full pursuant to the following:

• Past due interest rate applicable to past due outstanding balance, shall be that resulting from applying the monthly average of the equilibrium interbank interest rate (“TIEE RATE”) as determined by the Central Bank and published in the Federal Official Gazette applicable to a 28 day term.
• To compute the monthly average of the “TIIE” RATE, the sum of known and effective “TIIE” rates shall be considered from the first calendar day and until third business day before end of immediately prior month to month when rate is applied, divided by number of calendar Days considered in arithmetic sum and the result thereof shall be divided by twelve and multiplied by a 2.5 factor.
• The amount of past due interest shall be that resulting out of multiplying the outstanding balance (principal and VAT) of past due debt by a quotient resulting out of dividing monthly past due rate by 30 and multiplying thereof by number of past due days in the month including the day when payment is made.
• If impossible to determine at any time the TIIE RATE, the applicable rate shall that, if any, replacing thereof as officially determined.

In the event the aforementioned is amended by the Corporate Finance Department, the parties agree to enter into an applicable agreement to update that amendment.

Any payments made by Purchaser to Seller to comply with obligations thereof shall be applied on a due date chronological order beginning with oldest owing amount and up to most recent owing amount, in the first place to payment of past due interests, financing interests, value added tax on interests, payment of principal and, lastly to collection expenses, if applicable.

In the event any cheque is returned for any cause, Purchaser undertakes to pay Seller the following items: amount of returned cheque, a 20% on returned cheque amount for damages and a 20% VAT on returned cheque, past due interest, VAT on past due interests, VAT on past due interests, fees and expenses applied by applicable banking institutions plus applicable VAT, in the event they have been charged to Seller, in the understanding that the aforementioned shall be without prejudice to application of any other provision or any other legal remedy applicable to Seller, either stemming out of this agreement or of any other source (including, without limitation, what is provided in paragraph 9.5, Section 9).

Recovery of owing amounts shall be applied in the first place to payment of 20% on any returned cheque, bank fees and expenses charged by the applicable bank, past due interest of document and VAT of each item and in the second place to paying the returned cheque amount.

If for any reason, any invoice(s) of sold and delivered Product is not registered by the bank institution through which collection is performed, Purchaser shall pay the applicable amount, in accordance with pricing structure applied on the date Product is delivered, in the understanding that for such instances, due date of any applicable invoice shall not be affected.

9.2 Exemption, renewal or reduction of guaranty for selling product on credit. Seller reserves the right to grant a guaranty disclaimer for selling Product on credit, in accordance with guidelines authorized by the Board of Administration of Pemex Gas y Petroquímica Básica and applied by its Institutional Credit Committee, as well as to cancel Purchaser said disclaimer or to determine any reduction in amount of guaranty submitted or renewal thereof, in accordance with resolutions by said Committee, for any breach to requirements then in effect for a guaranty disclaimer or that presumptions for reduction thereof take place.

      9.3 Payment Guaranty. In the event Purchaser has no guaranty disclaimer granted by Seller, Seller may demand from Purchaser to guarantee payment of supplied Product pursuant to this Agreement through letters of credit, granting of a suretyship or any other manner of Payment Guaranty as selected by Seller. The letter of credit or suretyship shall be (i) issued by a bank o a bonding company legally authorized to operate in the Mexican Republic, as applicable, acceptable to Seller, (ii) in an unconditional and irrevocable manner, (iii) for a term acceptable to Seller, (iv) payable based on a first out-of-court demand by Seller to issuer, notwithstanding any opposition by Purchaser; and (v) in an amount reasonably determined by Seller. In the event Seller demands Purchaser to guarantee Product payment in accordance with aforementioned, and Purchaser shall fail to do so within five (5) Days following the date of demand, Seller may terminate this Agreement and termination shall become immediately effective (without needing a co