AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 22, 2003

REGISTRATION NO. 333-
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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WESTLAKE CHEMICAL CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE 2869
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)

DELAWARE 76-0346924
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</Table>

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2801 POST OAK BOULEVARD, SUITE 600 LOUIS B. TRENCHARD III
HOUSTON, TEXAS 77056 VICE PRESIDENT, LEGAL
(713) 960-9111 WESTLAKE CHEMICAL CORPORATION
(Address, including ZIP code, and telephone number, 2801 POST OAK BOULEVARD, SUITE 600
including area code, of each registrant's principal HOUSTON, TEXAS 77056
executive offices) (713) 960-9111
(Name, address, including ZIP code, and telephone number,
including area code, of agent for service)
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COPY TO:
J. DAVID KIRKLAND, JR.
BAKER BOTTS L.L.P.
ONE SHELL PLAZA
HOUSTON, TEXAS 77002
(713) 229-1234
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JURISDICTION OF PRIMARY STANDARD INDUSTRIAL I.R.S. EMPLOYER
EXACT NAME OF ADDITIONAL REGISTRANTS INCORPORATION/ORGANIZATION CLASSIFICATION CODE NUMBER IDENTIFICATION NUMBER
- ------------------------------------ -------------------------- --------------------------- ---------------------

Geismar Holdings, Inc.......................... Delaware 2821 33-1036002
Geismar Vinyls Company LP...................... Delaware 2821 06-1641487
Gramercy Chlor-Alkali Corporation.............. Delaware 2821 76-0669252
GVGP, Inc...................................... Delaware 2821 71-0921650
North American Pipe Corporation................ Delaware 3084 76-0370735
North American Profiles, Inc................... Delaware 3089 76-0636880
Van Buren Pipe Corporation..................... Delaware 3084 76-0441452
Westech Building Products, Inc................. Delaware 3089 76-0498816
Westlake Chemical Holdings, Inc................ Delaware 2869 76-0664308
Westlake Chemical Investments, Inc............. Delaware 2821 76-0664309
Westlake Chemical Manufacturing, Inc........... Delaware 2869 51-0405162
Westlake Chemical Products, Inc................ Delaware 2821 51-0405164
Westlake Development Corporation............... Delaware 2869 76-0666307
Westlake Management Services, Inc.............. Delaware 2869 76-0321065
Westlake Olefins Corporation................... Delaware 2821 52-1629821
Westlake Overseas Corporation.................. U.S. Virgin Islands 2821 66-0443812
Westlake Petrochemicals LP..................... Delaware 2869 76-0553330
Westlake Polymers LP........................... Delaware 2821 76-0144230
Westlake PVC Corporation....................... Delaware 2821 76-0346192
Westlake Resources Corporation................. Delaware 2821 76-0321064
Westlake Styrene LP............................ Delaware 2865 76-0294926
Westlake Vinyl Corporation Delaware 2821 76-0414632
Westlake Vinyls, Inc........................... Delaware 2821 76-0542667
WPT LP......................................... Delaware 2869 76-0469048
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable following the effectiveness of this Registration
Statement.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Securities Act"), check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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CALCULATION OF REGISTRATION FEE

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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER NOTE(1) OFFERING PRICE(1) REGISTRATION FEE
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8 3/4% Senior Notes due
2011....................... $380,000,000 100% $380,000,000 $30,742
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Guarantees................... -- -- -- (2)
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act.
(2) Pursuant to Rule 457(n) under the Securities Act, no separate fee is payable
with respect to the guarantees of the new notes being registered.

THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING ANY OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED SEPTEMBER 22, 2003

PROSPECTUS

$380,000,000

(WESTLAKE CHEMICAL CORP)

WESTLAKE CHEMICAL CORPORATION

OFFER TO EXCHANGE
8 3/4% SENIOR NOTES DUE 2011
FOR ALL OUTSTANDING
8 3/4% SENIOR NOTES DUE 2011
FULLY AND UNCONDITIONALLY GUARANTEED BY ALL
DOMESTIC RESTRICTED SUBSIDIARIES OF WESTLAKE CHEMICAL CORPORATION

THE NEW NOTES:

- - will be freely tradable and otherwise substantially identical to the old
notes;

- - will accrue interest at 8 3/4% per annum, payable semiannually on each
January 15 and July 15;

- - will not be listed on any securities exchange or on any automated dealer
quotation system, but may be sold in the over-the-counter market, in
negotiated transactions or through a combination of those methods.

THE EXCHANGE OFFER:

- - expires at 5:00 p.m., New York City time, on [ ], 200[ ], unless
extended; and

- - is not conditioned upon any minimum principal amount of old notes being
tendered.
YOU SHOULD NOTE THAT:

- - we will exchange all old notes that are validly tendered and not validly
withdrawn for an equal principal amount of new notes that we have registered
under the Securities Act of 1933;

- - you may withdraw tenders of old notes at any time prior to the expiration of
the exchange offer;

- - the exchange of old notes for new notes in the exchange offer should not be a
taxable event for U.S. federal income tax purposes; and

- - the exchange offer is subject to customary conditions, which we may waive in
our sole discretion.

PLEASE CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 13 OF THIS
PROSPECTUS BEFORE PARTICIPATING IN THE EXCHANGE OFFER.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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

The date of this prospectus is .

TABLE OF CONTENTS

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PAGE
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WHERE YOU CAN FIND MORE INFORMATION.... i
INDUSTRY AND MARKET DATA............... ii
PRODUCTION CAPACITY.................... ii
NON-GAAP FINANCIAL MEASURES............ ii
PROSPECTUS SUMMARY..................... 1
RISK FACTORS........................... 13
FORWARD-LOOKING INFORMATION............ 23
PRIVATE PLACEMENT...................... 24
USE OF PROCEEDS........................ 24
CAPITALIZATION......................... 25
SELECTED CONSOLIDATED FINANCIAL,
OPERATING AND INDUSTRY DATA.......... 26
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS........................... 29
INDUSTRY OVERVIEW...................... 44
BUSINESS............................... 50
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PAGE
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MANAGEMENT............................. 62
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS
AND MANAGEMENT....................... 68
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS......................... 69
DESCRIPTION OF CERTAIN INDEBTEDNESS.... 71
THE EXCHANGE OFFER..................... 73
DESCRIPTION OF NOTES................... 83
CERTAIN UNITED STATES FEDERAL INCOME
TAX CONSIDERATIONS................... 127
PLAN OF DISTRIBUTION................... 128
TRANSFER RESTRICTIONS ON OLD NOTES..... 130
LEGAL MATTERS.......................... 130
EXPERTS................................ 130
INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS........................... F-1
</Table>

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THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT WE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. YOU SHOULD RELY ONLY ON THE INFORMATION WE
HAVE PROVIDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH ADDITIONAL OR DIFFERENT INFORMATION. WE
ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER
IS NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE ON THE FRONT OF THIS DOCUMENT.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus incorporates important business and financial information
about us that is not included in or delivered with this document. You may
request a copy of any or all of the documents summarized in this prospectus or
incorporated by reference in this prospectus, without charge, by written or oral
request directed to us at the following address and telephone number:

Westlake Chemical Corporation
2801 Post Oak Boulevard, Suite 600
Houston, Texas 77056
Telephone: (713) 960-9111
Attention: Investor Relations

The exhibits to the documents will generally not be made available unless they
are specifically incorporated by reference in the documents.

TO OBTAIN TIMELY DELIVERY OF ANY OF OUR DOCUMENTS, YOU MUST MAKE YOUR
REQUEST TO US BY NO LATER THAN [ ], 200[ ]. THE EXCHANGE OFFER WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [ ], 200[ ]. THE EXCHANGE
OFFER CAN BE EXTENDED BY US IN OUR SOLE DISCRETION, BUT WE CURRENTLY DO NOT
INTEND TO EXTEND THE EXPIRATION DATE. SEE "THE EXCHANGE OFFER" FOR MORE DETAILED
INFORMATION.

This prospectus is part of a registration statement we have filed with the
SEC relating to the notes and the related guarantees. As permitted by SEC rules,
this prospectus does not contain all of the

information we have included in the registration statement and the accompanying
exhibits and schedules we file with the SEC. You may refer to the registration
statement, exhibits and schedules for more information about us and these
securities. You may read and copy, at prescribed rates, the registration
statement, exhibits and schedules and any reports that we file at the SEC's
public reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. The SEC also maintains an Internet site that contains
information we file electronically with the SEC, which you can access over the
Internet at http://www.sec.gov.

Under the terms of the indenture governing the notes, following
consummation of the exchange offer described in this prospectus, we will file
with the SEC (unless the SEC will not accept such a filing):

(1) all quarterly and annual reports on Forms 10-Q and 10-K required
to be filed with the SEC; and

(2) all current reports on Form 8-K required to be filed with the SEC,

for public availability within the time periods specified in the rules and
regulations applicable to those reports. If, at any time after consummation of
the exchange offer, we are no longer subject to the periodic reporting
requirements of the Securities Exchange Act of 1934 for any reason, we will
nevertheless continue filing the reports specified in this paragraph with the
SEC within the time periods specified above unless the SEC will not accept such
a filing. We have agreed that we will not take any action for the purpose of
causing the SEC not to accept any such filings. If the SEC will not accept our
filings for any reason, we will post the reports referred to in this paragraph
on our website within the time periods that would apply if we were required to
file those reports with the SEC.

INDUSTRY AND MARKET DATA

Industry and market data used throughout this prospectus were obtained
through internal company research, surveys and studies conducted by third
parties and industry and general publications, including information from the
Chemical Market Associates, Inc., or CMAI. We have not independently verified
market and industry data from third-party sources. While we believe internal
company estimates are reliable and market definitions are appropriate, neither
such estimates nor these definitions have been verified by any independent
sources, and we do not make any representations as to the accuracy of such
estimates.

PRODUCTION CAPACITY

Unless we state otherwise, annual production capacity used throughout this
prospectus represents rated capacity at June 30, 2003. We calculated rated
capacity by estimating the number of days in a typical year that a production
unit of a plant is expected to operate, after allowing for downtime for regular
maintenance, and multiplying that number by an amount equal to the unit's
optimal daily output based on the design feedstock mix. Because the rated
capacity of a production unit is an estimated amount, actual production volumes
may be more or less than the rated capacity.

NON-GAAP FINANCIAL MEASURES

The body of accounting principles generally accepted in the United States
is commonly referred to as "GAAP." For this purpose, a non-GAAP financial
measure is generally defined by the SEC as one that purports to measure
historical or future financial performance, financial position or cash flows,
but excludes or includes amounts that would not be so adjusted in the most
comparable GAAP measures. In this prospectus, we disclose so-called non-GAAP
financial measures, primarily Adjusted EBITDA. Our Adjusted EBITDA is calculated
as net income before interest expense, income taxes, depreciation and
amortization, other income, impairment of long-lived assets (a non-cash charge),
cumulative effect of

change in accounting principle and minority interest. The non-GAAP financial
measures described in this prospectus are not substitutes for the GAAP measures
of earnings and cash flow.

EBITDA is a key measure used by the banking and high-yield investing
communities in their evaluation of economic performance. Adjusted EBITDA is
included in this prospectus because management believes that it is a useful tool
for measuring our ability to meet our future debt service, capital expenditure
and working capital requirements and for comparing our operating performance
with the performance of other companies that have different financing and
capital structures or tax rates. Adjusted EBITDA is not necessarily a measure of
our ability to fund our cash needs. In addition, it should be noted that
companies calculate EBITDA differently and, therefore, Adjusted EBITDA as
presented for us may not be comparable to EBITDA or Adjusted EBITDA reported by
other companies.

iii

PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this
prospectus. This summary is not complete and does not contain all the
information that is important to you or that you should consider before deciding
whether to participate in this exchange offer. You should carefully read this
entire prospectus, including the financial statements and related notes, before
making an investment decision. In this prospectus, we refer to Westlake Chemical
Corporation and its consolidated subsidiaries as "we," "us" or "Westlake,"
unless we state otherwise or the context clearly indicates otherwise.

ABOUT WESTLAKE

We are a vertically integrated manufacturer and marketer of basic
chemicals, polymers, vinyls and fabricated products. Our products include some
of the most widely used chemicals in the world, which are fundamental to many
diverse consumer and industrial markets, including flexible and rigid packaging,
automotive products, coatings, residential and commercial construction as well
as other durable and non-durable goods. We believe that our business is
characterized by highly integrated, world-class chemical production facilities,
state-of-the-art technology, leading regional market positions for particular
products, a strong and stable customer base and experienced management. We
operate in two principal business segments, Olefins and Vinyls, and we are one
of the few fully integrated producers of vinyls and fabricated products in North
America. For the six months ended June 30, 2003, we had net sales of $698.6
million, net income of $11.7 million and Adjusted EBITDA of $76.9 million.
During the same period, our Olefins segment contributed 62% and our Vinyls
segment contributed 38% of our net sales, after intercompany eliminations. For
the six months ended June 30, 2003, our Olefins segment contributed 67% and our
Vinyls segment contributed 34% of our Adjusted EBITDA, including corporate and
other.

We benefit from highly integrated production facilities that allow us to
process raw materials into higher value-added chemicals and fabricated products.
We have 8.1 billion pounds of active aggregate production capacity at 11
strategically located manufacturing plants in North America. We believe that
with our highly integrated capabilities, we are less affected by volatility in
product demand, have less exposure to the effects of cyclical raw material
prices and operate at higher capacity utilization rates than non-integrated
chemical producers. In addition, the strategic location of our facilities lowers
our transportation costs due to our high level of internally consumed
production. In 2002, we used 71% of our basic chemical production internally to
produce higher value-added chemicals and fabricated products for sale to
external customers.

OLEFINS

In our Olefins segment, we manufacture ethylene, polyethylene, styrene and
associated co-products at our facilities in Lake Charles, Louisiana. For the six
months ended June 30, 2003, our Olefins segment had net sales of $432.1 million,
operating income of $25.0 million and Adjusted EBITDA of $51.8 million.

Polyethylene. Polyethylene, the world's most widely consumed polymer, is
used in the manufacture of a wide variety of packaging, film, coating and molded
product applications including trash can liners, shopping and dry cleaning bags
and housewares. We produce the three principal types of polyethylene:
low-density polyethylene, or LDPE, linear low-density polyethylene, or LLDPE,
and high-density polyethylene, or HDPE. We are the fourth largest producer of
LDPE in North America. We have the capacity to produce 850 million pounds of
LDPE and 500 million pounds of LLDPE or HDPE per year.

Styrene. Styrene is used to produce polystyrene and synthetic rubber,
which are used in a number of applications including injection molding,
disposables, food packaging, housewares, paints and coatings, resins, building
materials and toys. We have the capacity to produce 450 million pounds of
styrene per year.

VINYLS

In our Vinyls segment, we manufacture polyvinyl chloride, or PVC, VCM,
chlorine, caustic soda, ethylene and fabricated products. Chlorine and ethylene
are the basic raw materials used to manufacture VCM, which we then convert into
PVC. We use most of our PVC to manufacture fabricated products such as pipe,
fence, deck and door and window components. We manage our integrated vinyls
production chain, from the basic chemicals to finished fabricated products, to
maximize product margins, pricing and capacity utilization. Our primary
manufacturing facilities are in Calvert City, Kentucky. We also own eight
strategically located PVC fabricated product facilities, each situated in close
proximity to our markets and customers. In addition, in 2003, we acquired a
vinyls facility in Geismar, Louisiana. Although the facility is currently idle,
we plan to start up the ethylene dichloride portion of the Geismar facility in
the fourth quarter of 2003. We intend to operate part or all of the remainder of
the facility when market conditions support utilization of the additional
capacity. We also own a 43% interest in a PVC joint venture in China with total
capacity of 264 million pounds of PVC per year. For the six months ended June
30, 2003, our Vinyls segment had net sales of $266.5 million, operating income
of $9.6 million and Adjusted EBITDA of $26.3 million.

PVC. PVC, the world's third most widely used plastic, is an attractive
alternative to traditional materials such as glass, metal, wood, concrete and
other plastic materials because of its versatility, durability and cost
competitiveness. We have the capacity to produce 800 million pounds of PVC per
year, excluding capacity of our China joint venture and our Geismar facility. In
2002, we used 61% of our PVC internally in the production of our fabricated
products. PVC is used for construction materials including pipe, siding and
window and door components; rigid and flexible film for packaging; and medical
applications such as blood bags and tubing.

VCM. VCM is used to produce PVC, solvents and PVC-related products. We
have the capacity to produce 1.3 billion pounds of VCM per year, excluding
capacity at our Geismar facility. In 2002, we used 63% of our VCM production in
our PVC operations.

Chlorine and Caustic Soda. We produce chlorine and caustic soda,
co-products commonly referred to as chlor-alkali, at our Calvert City
facilities. We use chlorine to produce VCM and sell caustic soda to external
customers who use it in a variety of end markets including the production of
pulp and paper, organic and inorganic chemicals, and alumina. In 2002, we
converted our chlorine facility to a more efficient, state-of-the-art membrane
technology, resulting in an approximate 25% reduction in energy consumption per
unit of production that should result in significant savings, as energy is a
major cost of chlor-alkali production. This conversion increased our annual
production capacity by 64% from 250 to 410 million pounds of chlorine and from
275 to 450 million pounds of caustic soda.

Ethylene. Our Calvert City ethylene plant has annual production capacity
of 450 million pounds and, in 2002, produced approximately 70% of the ethylene
required for our VCM production. We obtain the remainder of the ethylene we need
for our Vinyls business from our Lake Charles ethylene production.

Fabricated Products. Products made from PVC are used in construction
materials ranging from water and sewer systems to home and commercial
applications for fence, deck, window and patio door systems. PVC windows and
patio doors are more energy efficient, less costly and easier to maintain than
alternative products. PVC fence and deck products feature low maintenance
materials and long product life. PVC pipe offers greater strength, lower
installed cost, increased corrosion resistance, lighter weight and longer
service life when compared to iron, steel and concrete alternatives. We are a
leading manufacturer of PVC fabricated products in the geographic regions where
we operate. We market pipe products under the "North American Pipe" brand, PVC
window and patio door components under the "NAPG" brand and PVC fence and deck
products under the "Westech" brand, all of which are
2

recognized brands in their respective markets. We sell substantially all of our
products to distributors who, in turn, sell the products to municipalities and
contractors. Since entering the market in 1992, we have increased our annual
capacity of fabricated products from 194 million pounds to 600 million pounds.

COMPETITIVE STRENGTHS

Vertically Integrated Operations. We operate in two vertically integrated
business segments and use the majority of our internally produced basic
chemicals to manufacture higher value-added chemicals and fabricated products.
We are one of the few fully integrated producers of vinyls and fabricated
products in North America. By operating integrated olefins and vinyls production
processes, we believe we are less susceptible to volatility in product demand,
have less exposure to the effects of cyclical raw material prices and are able
to operate at higher capacity utilization rates than non-integrated chemical
producers. We have also been able to lower our transportation costs due to our
high level of internally consumed production. In 2002, we used almost 85% of our
ethylene production to manufacture polyethylene, styrene monomer and VCM. We
also used 63% of our VCM production to manufacture PVC and 61% of our PVC
production to manufacture our fabricated products.

Efficient Modern Asset Base and Low Cost Operations. We operate some of
the industry's newest manufacturing facilities in North America and focus on
continually improving our asset portfolio and cost position. We have invested
$1.2 billion since 1990 to construct new, state-of-the-art facilities and to
acquire and to upgrade acquired facilities and equipment in both our Olefins and
Vinyls segments. We built two ethylene crackers in Lake Charles in 1991 and
1997, and constructed a gas-phase LLDPE/HDPE plant in 1998. In addition, we
recently completed the technology conversion and upgrade of our chlor-alkali
facility at Calvert City, reducing per unit energy consumption by approximately
25% and increasing capacity by 64%. These newer plants increase operating
efficiency and reduce our maintenance and environmental compliance costs. Our
ethylene plants allow us to choose between ethane, propane and butane
feedstocks. This flexibility enables us to react to changing market conditions
and reduce raw material costs. We continually focus on reducing costs throughout
our organization and believe that our selling, general and administrative costs,
as a percentage of net sales, of 5.5% for 2002 is one of the lowest in the
chemical industry. We eliminate research and development expenses by selectively
acquiring and licensing third-party proprietary technology as a cost-effective
approach to product development and production efficiency improvement.

Stable and Sustained Customer Relationships. We believe that our focus on
customer service strengthens customer loyalty during periods of lower demand,
leading to stability in down-cycles. We estimate that 87% of our net sales in
2002 were made to the same customers we had in 2000. Almost all of our 2002 net
sales were to customers in the North American market, limiting our exposure to
the lower-margin export market.

Strong Regional Market Presence. We are a leading seller of PVC fabricated
products in the geographic regions where we operate. Fabricated products are
sold on a regional basis. The location of our vinyls facilities at Calvert City,
Kentucky on the Tennessee River provides a freight cost advantage to our
customers in the high-volume Midwest and Northeast markets when compared to most
of our competitors located on the Gulf Coast. Our eight fabricated products
facilities in North America allow us to focus our sales effort on local markets
where we have a strong market presence.

Experienced Management and Strong Equity Support. Our senior management
team has an average of over 25 years of experience in the petrochemical
industry. We were founded by our chairman, T.T. Chao, and his family in 1985.
The Chao family has more than 50 years of experience in the plastics and
fabrications industries, both in Asia and the United States. Our management has
demonstrated expertise in reducing costs and growing our business through
acquisitions and capacity expansions. In addition, since 1997, Westlake Polymer
& Petrochemical, Inc., our parent company, has contributed $134 million to our
equity consisting of $50 million in cash, equity interests in Westlake Styrene
with a book value of $79 million and a vinyls facility in Geismar, Louisiana
with a book value of $5 million. In

addition, in August 2003, we received a capital contribution from our parent
company consisting of the 20% of common stock of Westlake Olefins Corporation we
did not own, with a book value of $82 million.

CURRENT INDUSTRY CONDITIONS

The profitability of our key olefins and vinyls products is cyclical. In
general, the cycles are characterized by periods of tight supply, leading to
high operating rates and margins, followed by periods of oversupply primarily
resulting from significant capacity additions, leading to reduced operating
rates and lower margins. Our Olefins and Vinyls businesses recently have been
operating in a down cycle as a result of significant new capacity additions,
weak demand reflecting the current global economic conditions and high raw
material costs. Our primary raw materials are natural gas based feedstocks,
which have recently increased in price dramatically, primarily as a result of
unseasonably cold weather, record low inventory levels, poor underlying natural
gas supply trends and recent geopolitical events.

According to CMAI, industry fundamentals currently suggest a cyclical
recovery in the petrochemicals business beginning in 2005, with the next peak
expected to commence in 2006. Industry recovery is supported by limited new
capacity additions for these products in North America over the next several
years, combined with announced capacity shutdowns. CMAI forecasts operating
rates and margins to improve as demand recovers as a result of improved global
economic conditions.

In the first six months of 2003, we experienced some recovery in margins
for our key products. While prices for many of our feedstocks increased
dramatically in the period, we were able to increase the prices for most of our
products to offset much of the higher raw materials costs. These higher
feedstock costs were primarily a result of unfavorable supply and demand
fundamentals in the North American market for natural gas discussed above.
During the second quarter of 2003, we experienced softer demand for our
products, which we believe was primarily a result of depletion of inventory
built up by customers during the first quarter of 2003 in anticipation of higher
prices later in 2003. In addition, we generally experienced lower margins during
the second quarter.

We have not seen definitive signs of a sustained economic recovery in our
industry in the third quarter of 2003. While there was some improvement in
volume, this improvement may not be sustained. An uncertain pricing environment
has resulted in pricing pressure on most of our products. An unscheduled outage
at our Calvert City complex in July is expected to reduce third quarter income
from operations by approximately $1.5 million.

RISK FACTORS

PLEASE READ AND CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 13
BEFORE PARTICIPATING IN THE EXCHANGE OFFER.

THE FINANCING TRANSACTIONS

On July 31, 2003, we sold $380.0 million in aggregate principal amount of
8 3/4% Senior Notes due 2011 in transactions exempt from or not subject to the
registration requirements of the Securities Act of 1933. You may exchange these
notes in the exchange offer described in this prospectus. On the same date, we
entered into a $120.0 million senior secured term loan and borrowed $21.0
million under a new $200.0 million senior secured revolving credit facility. We
used the aggregate net proceeds from these transactions of approximately $507.4
million to repay in full our then-existing revolving credit facility, term loan
and 9.5% Series A and Series B notes, including all accrued and unpaid interest,
fees and a make-whole premium on the notes, and to provide cash collateral for
outstanding letters of credit. As a result of the refinancing, we will recognize
$11.3 million in non-operating expense in the third quarter of 2003, consisting
of the $4.0 million make-whole premium and $7.3 in previously capitalized debt
issuance costs. In conjunction with the transactions described above, we also
terminated our then-existing accounts receivable securitization facility and
repurchased all accounts receivable previously sold to our

unconsolidated accounts receivable securitization subsidiary. Please read
"Description of Certain Indebtedness" for a description of the new credit
facility and term loan.

PRINCIPAL EXECUTIVE OFFICES

Our principal executive offices are located at 2801 Post Oak Boulevard,
Houston, Texas 77056 and our telephone number is (713) 960-9111. Our corporate
website address is www.westlakegroup.com. The information contained in our
corporate website is not part of this prospectus.

THE EXCHANGE OFFER

On July 31, 2003, we issued $380 million principal amount of the
outstanding 8 3/4% Senior Notes due 2011. We sold the old notes in transactions
exempt from or not subject to the registration requirements under the Securities
Act. Accordingly, the old notes are subject to transfer restrictions. In
general, you may not offer or sell the old notes unless either they are
registered under the Securities Act or the offer or sale is exempt from or not
subject to registration under the Securities Act and applicable state securities
laws.

In connection with the sale of the old notes, we entered into a
registration rights agreement with the initial purchasers of the old notes. We
agreed to use all commercially reasonable efforts to have the registration
statement of which this prospectus is a part declared effective by the SEC
within 180 days after the issue date of the old notes and to complete the
exchange offer within 30 business days after the registration statement becomes
effective. In the exchange offer, you are entitled to exchange your old notes
for new notes with substantially identical terms, except that the existing
transfer restrictions will be removed. You should read the discussion under the
headings "-- Terms of the New Notes" and "Description of Notes" for further
information about the new notes.

We have summarized the terms of the exchange offer below. You should read
the discussion under the heading "The Exchange Offer" for further information
about the exchange offer and resale of the new notes. IF YOU FAIL TO EXCHANGE
YOUR OLD NOTES FOR NEW NOTES IN THE EXCHANGE OFFER, THE EXISTING TRANSFER
RESTRICTIONS WILL REMAIN IN EFFECT AND THE MARKET VALUE OF YOUR OLD NOTES LIKELY
WILL BE ADVERSELY AFFECTED BECAUSE OF A SMALLER FLOAT AND REDUCED LIQUIDITY.

Expiration Date............... The exchange offer will expire at 5:00 p.m.,
New York City time, on [ ],
200[ ]or such later date and time
to which we extend it.

Withdrawal of Tenders......... You may withdraw your tender of old notes at
any time prior to the expiration date. We will
return to you, without charge, any old notes
that you tendered but that were not accepted
for exchange promptly after the expiration or
termination of the exchange offer.

Conditions to the Exchange
Offer......................... We will not be required to accept old notes for
exchange if, in our reasonable judgment, the
exchange offer, or the making of any exchange
by a holder of old notes, would:

- violate applicable law or any applicable
interpretation of the staff of the SEC; or

- be impaired by any action or proceeding that
has been instituted or threatened in any
court or by or before any governmental
agency with respect to the exchange offer.

The exchange offer is not conditioned upon any
minimum aggregate principal amount of old notes
being tendered.

Please read "The Exchange Offer -- Conditions
to the Exchange Offer" for more information
about the conditions to the exchange offer.

Procedures for Tendering Old
Notes......................... If you wish to participate in the exchange
offer, you must complete, sign and date the
letter of transmittal that we are providing
with this prospectus and mail or deliver the
letter of transmittal, together with the old
notes, to the exchange agent. If your old notes
are held through The Depository Trust Company,
you may effect delivery of the old notes by
book-entry transfer.

In the alternative, if your old notes are held
through DTC, you may participate in the
exchange offer through DTC's automated tender
offer program. If you tender under this
program, you will agree to be bound by the
letter of transmittal as though you had signed
it.

By signing or agreeing to be bound by the
letter of transmittal, you will represent to us
that, among other things:

- any new notes that you receive will be
acquired in the ordinary course of your
business;

- you have no arrangement or understanding
with any person to participate in the
distribution of the old notes or the new
notes;

- you are not our "affiliate," as defined in
Rule 405 of the Securities Act, or, if you
are our affiliate, you will comply with the
registration and prospectus delivery
requirements of the Securities Act to the
extent applicable;

- if you are not a broker-dealer, you are not
engaged in, and do not intend to engage in,
the distribution of the new notes;

- if you are a broker-dealer, you will receive
new notes for your own account in exchange
for old notes that you acquired as a result
of market-making activities or other trading
activities, and you will deliver a
prospectus in connection with any resale of
such new notes;

- if you are a broker-dealer, you did not
purchase the old notes to be exchanged for
the new notes from us; and

- you are not acting on behalf of any person
who could not truthfully and completely make
the foregoing representations.

Special Procedures for
Beneficial Owners............. If you own a beneficial interest in old notes
that are registered in the name of a broker,
dealer, commercial bank, trust company or other
nominee and you wish to tender the old notes in
the exchange offer, please contact the
registered holder as soon as possible and
instruct it to tender on your behalf and to
comply with our instructions described in this
prospectus.

Guaranteed Delivery
Procedures.................... You must tender your old notes according to the
guaranteed delivery procedures described in
"The Exchange Offer -- Guaranteed Delivery
Procedures" if any of the following apply:

- you wish to tender your old notes but they
are not immediately available;

- you cannot deliver your old notes, the
letter of transmittal or any other required
documents to the exchange agent prior to the
expiration date; or

- you cannot comply with the applicable
procedures under DTC's automated tender
offer program prior to the expiration date.

United States Federal Income
Tax Consequences.............. The exchange of old notes for new notes in the
exchange offer should not be a taxable event
for U.S. federal income tax purposes. Please
read "Certain United States Federal Income Tax
Considerations."

Use of Proceeds............... We will not receive any cash proceeds from the
issuance of new notes in the exchange offer.

THE EXCHANGE AGENT

We have appointed JPMorgan Chase Bank as exchange agent for the exchange
offer. Please direct questions and requests for assistance, requests for
additional copies of this prospectus or of the letter of transmittal and
requests for the notice of guaranteed delivery to the exchange agent. If you are
not tendering under DTC's automated tender offer program, you should send the
letter of transmittal and any other required documents to the exchange agent as
follows:

JPMORGAN CHASE BANK

[telephone number]

BY OVERNIGHT DELIVERY, COURIER OR MAIL
(REGISTERED OR CERTIFIED MAIL RECOMMENDED):

JPMorgan Chase Bank
[Address]
[Attention: ]

BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):

[telephone number]
Attention: [ ]

Confirm by Telephone:

[telephone number]

TERMS OF THE NEW NOTES

The new notes will be freely tradable and otherwise substantially identical
to the old notes. The new notes will not have registration rights or provisions
for additional interest. The new notes will evidence the same debt as the old
notes, and the old notes and the new notes will be governed by the same
indenture. The old notes and the new notes will vote together as a single class
under the indenture.

Issuer........................ Westlake Chemical Corporation

Notes Offered................. $380,000,000 aggregate principal amount of
8 3/4% Senior Notes due 2011.

Maturity Date................. July 15, 2011.

Interest...................... 8 3/4% per annum, payable semi-annually in
arrears on January 15 and July 15, commencing
on January 15, 2004.

Subsidiary Guarantees......... The new notes will be jointly and severally
guaranteed on a senior unsecured basis by all
of our existing and future domestic restricted
subsidiaries.

Ranking....................... The new notes and the subsidiary guarantees
will rank:

- effectively junior in right of payment to
all of our and the guarantors' secured
indebtedness and to the indebtedness and
other liabilities of our non-guarantor
subsidiaries;

- equal in right of payment to all of our and
the guarantors' unsecured senior
indebtedness; and

- senior in right of payment to all of our and
the guarantors' subordinated indebtedness.

As of June 30, 2003, after giving effect to the
offering of the old notes and the application
of the net proceeds from that offering, from
borrowings of $21.0 million under our new
credit facility and from our new $120.0 million
term loan as described under "-- The Financing
Transactions" and "Private Placement," the new
notes and the subsidiary guarantees would have
ranked effectively junior in right of payment
to:

- approximately $141.0 million of secured
indebtedness; and

- $4.7 million of current liabilities and $0.3
million of long-term indebtedness of our
non-guarantor subsidiaries.

Optional Redemption........... We may redeem any of the notes at any time on
or after July 15, 2007, in whole or in part, in
cash at the redemption prices described in this
prospectus, plus accrued and unpaid interest to
the date of redemption.

In addition, on or before July 15, 2007, we may
redeem up to 35% of the aggregate principal
amount of notes with the net proceeds of
certain equity offerings. We may make that
redemption only if, after the redemption, at
least 65% of the aggregate principal amount of
notes remains outstanding. We may redeem any of
the notes at any time before July 15, 2007 in
cash at 100% of the principal amount plus
accrued and unpaid interest to the date of
redemption and a make-whole premium.

See "Description of Notes -- Optional
Redemption."
9

Change of Control............. Upon a change of control, we may be required to
make an offer to purchase each holder's notes
at a price equal to 101% of the principal
amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase. See
"Description of Notes -- Repurchase at the
Option of Holders -- Change of Control."

Certain Covenants............. The indenture contains covenants that, among
other things, limit our ability and the ability
of our restricted subsidiaries to:

- pay dividends on, redeem or repurchase our
capital stock;

- make investments and other restricted
payments;

- incur additional indebtedness or issue
preferred stock;

- create liens;

- permit dividend or other payment
restrictions on our restricted subsidiaries;

- sell all or substantially all of our assets
or consolidate or merge with or into other
companies;

- engage in transactions with affiliates; and

- engage in sale-leaseback transactions.

These limitations are subject to a number of
important qualifications and exceptions. See
"Description of Notes -- Certain Covenants."

Registration Rights........... If we fail to complete the exchange offer as
required by the registration rights agreement,
we may be obligated to pay additional interest
to holders of the old notes. Please read
"Description of Notes -- Registration Rights;
Additional Interest" for more information
regarding your rights as a holder of old notes.

No Prior Market............... There is no existing trading market for the new
notes, and there can be no assurance regarding:

- any future development or liquidity of a
trading market for the new notes;

- your ability to sell your new notes at all;
or

- the price at which you may be able to sell
your new notes.

Future trading prices of the new notes will
depend on many factors, including:

- prevailing interest rates;

- our operating results and financial
condition; and

- the market for similar securities.

We do not currently intend to apply for the
listing of the new notes on any securities
exchange or for quotation of the new notes in
any dealer quotation system.

SUMMARY CONSOLIDATED FINANCIAL, OPERATING AND INDUSTRY DATA

We have provided in the table below summary consolidated financial,
operating and industry data. You should read this data in conjunction with
"Selected Consolidated Financial, Operating and Industry Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
our consolidated financial statements and the related notes appearing elsewhere
in this prospectus.

<Table>
<Caption>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------------------------------------- -------------------------
1998 1999 2000 2001 2002 2002 2003
---------- ---------- ---------- ---------- ---------- ----------- -----------
(UNAUDITED) (UNAUDITED)
(DOLLARS IN THOUSANDS)

STATEMENT OF OPERATIONS DATA:
Net sales............................ $ 826,694 $1,057,631 $1,391,363 $1,087,033 $1,072,627 $ 485,624 $ 698,557
Gross profit......................... 21,107 169,675 192,663 (34,726) 70,535 3,943 63,509
Selling, general and administrative
expenses........................... 47,256 52,087 61,855 53,203 58,783 26,613 31,663
Impairment of long-lived assets(1)... 14,622 2,748 10,777 7,677 2,239 -- 932
Income (loss) from operations........ (40,771) 114,840 120,031 (95,606) 9,513 (22,670) 30,914
Interest expense..................... (35,899) (41,991) (31,957) (31,892) (32,907) (16,221) (16,544)
Other income, net(2)................. 7,889 11,421 1,685 8,895 6,784 6,530 6,310
Net income (loss).................... (45,141) 37,800 53,695 (64,875) (1,339) (14,897) 11,674
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents............ 30,501 8,617 8,256 78,991 10,074 10,308 9,587
Working capital(3)................... 154,270 155,814 134,091 169,089 186,138 157,684 228,760
Total assets......................... 1,377,798 1,344,857 1,393,485 1,329,152 1,322,053 1,297,546 1,355,270
Total debt........................... 590,406 460,889 392,889 511,639 506,350 506,596 495,467
Stockholders' equity................. 394,470 433,023 512,275 445,935 443,425 431,566 461,749
OTHER OPERATING DATA:
Adjusted EBITDA(4)................... 52,675 204,050 211,971 (4,622) 101,354 21,015 76,850
Cash flow from:
Operating activities............... 74,512 132,884 172,332 28,485 (29,676) (43,884) 25,196
Investing activities............... (152,973) (25,251) (87,693) (76,500) (33,686) (19,756) (15,720)
Financing activities............... 103,006 (129,517) (85,000) 118,750 (5,555) (5,043) (9,963)
Depreciation and amortization........ 78,824 86,462 81,163 83,307 89,602 43,685 45,004
Capital expenditures................. 216,299 29,170 78,893 76,500 38,587 21,436 18,977
EXTERNAL SALES VOLUME: (MILLIONS OF POUNDS)
Ethylene............................. 658 586 607 560 340 110 232
Polyethylene......................... 768 1,117 1,213 1,076 1,199 607 615
Styrene.............................. 416 445 455 494 428 204 182
PVC.................................. 424 310 300 309 301 156 129
VCM.................................. 135 387 394 459 473 232 230
Fabricated products.................. 495 506 440 501 545 303 243
AVERAGE INDUSTRY PRICING:(5) (CENTS PER POUND, EXCEPT AS NOTED)
Ethylene(6).......................... 13.4 21.5 27.2 21.4 16.9 16.2 22.2
Polyethylene(7)...................... 35.0 41.0 46.4 42.8 41.9 38.3 51.5
Styrene(8)........................... 17.5 22.9 34.8 21.8 27.3 25.9 32.1
PVC(9)............................... 26.5 32.8 36.7 31.4 34.4 30.8 42.2
VCM(10).............................. 15.3 18.3 25.3 18.9 19.9 17.3 25.8
Natural gas ($/mmbtu)(11)............ 2.16 2.32 4.32 4.04 3.37 2.97 5.83
</Table>

(1) Impairments in 1998 and 1999 related primarily to a fabricated products
business that was subsequently sold and an idled PVC plant. Impairments in
2000 and 2001 related primarily to assets that were acquired but never
placed in service. The 2002 impairment related to a ceased product
business. The 2003 impairment related to idled styrene assets.

(2) Other income, net is composed of interest income, insurance proceeds,
income and expenses related to our accounts receivable securitization
facility, equity income, management fee income and other gains and losses.

(3) Working capital equals current assets less current liabilities.

(4) Adjusted EBITDA is calculated as net income before interest expense, income
taxes, depreciation and amortization, other income, impairment of
long-lived assets (a non-cash charge), cumulative effect of change in
accounting principle and minority interest. See "Non-GAAP Financial
Measures." The following table reconciles Adjusted EBITDA with our net
income (loss):

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

<Table>
<Caption>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------------------- -------------------------
1998 1999 2000 2001 2002 2002 2003
-------- -------- -------- -------- -------- ----------- -----------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)

Net income (loss)..................... $(45,141) $ 37,800 $ 53,695 $(64,875) $ (1,339) $(14,897) $11,674
Plus:
Cumulative effect of change in
accounting principle, net of
tax............................... -- 9,335 -- -- -- -- --
Minority interest................... 2,795 6,797 5,357 (8,473) (8,065) (5,173) 1,329
Provision for (benefit from) income
taxes............................. (26,435) 30,338 30,707 (45,255) (7,206) (12,291) 7,677
Interest expense.................... 35,899 41,991 31,957 31,892 32,907 16,221 16,544
Less:
Other income, net................... 7,889 11,421 1,685 8,895 6,784 6,530 6,310
-------- -------- -------- -------- -------- -------- -------
Income (loss) from operations......... (40,771) 114,840 120,031 (95,606) 9,513 (22,670) 30,914
-------- -------- -------- -------- -------- -------- -------
Plus:
Depreciation and amortization....... 78,824 86,462 81,163 83,307 89,602 43,685 45,004
Impairment of long-lived assets..... 14,622 2,748 10,777 7,677 2,239 -- 932
-------- -------- -------- -------- -------- -------- -------
Adjusted EBITDA....................... $ 52,675 $204,050 $211,971 $ (4,622) $101,354 $ 21,015 $76,850
======== ======== ======== ======== ======== ======== =======
</Table>

(5) These are average industry prices for the indicated products as reported by
CMAI and are not the prices we realized.

(6) Represents average North American spot prices of ethylene over the period
as reported by CMAI.

(7) Represents average North American prices of LDPE general purpose film over
the period as reported by CMAI.

(8) Represents average North American spot prices of styrene over the period as
reported by CMAI.

(9) Represents average North American contract prices of PVC over the period as
reported by CMAI.

(10) Represents average North American contract prices of VCM over the period as
reported by CMAI.

(11) Represents average prices of Henry Hub natural gas over the period as
reported by the New York Mercantile Exchange (NYMEX).

RISK FACTORS

You should carefully consider the risks described below before deciding
whether to participate in the exchange offer. The risks described below are not
the only ones facing our company. Additional risks not currently known to us or
that we currently deem immaterial may also impair our business operations. Our
business, financial condition, results of operations or cash flows could be
materially adversely affected by any of these risks. The trading price of the
notes could decline due to any of these risks, and you may lose all or part of
your investment.

This prospectus also contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including the risks faced by us described below and elsewhere in this
prospectus. See "Forward-Looking Information."

RISKS RELATING TO THE EXCHANGE OFFER

IF YOU FAIL TO EXCHANGE YOUR OLD NOTES, THE EXISTING TRANSFER RESTRICTIONS
WILL REMAIN IN EFFECT AND THE MARKET VALUE OF YOUR OLD NOTES MAY BE ADVERSELY
AFFECTED BECAUSE THEY MAY BE MORE DIFFICULT TO SELL.

If you fail to exchange your old notes for new notes under the exchange
offer, then you will continue to be subject to the existing transfer
restrictions on the old notes. In general, the old notes may not be offered or
sold unless they are registered or exempt from registration under the Securities
Act and applicable state securities laws. Except in connection with this
exchange offer or as required by the registration rights agreement, we do not
intend to register resales of the old notes.

The tender of old notes under the exchange offer will reduce the principal
amount of the old notes outstanding. Due to the corresponding reduction in
liquidity, this may have an adverse effect upon, and increase the volatility of,
the market price of any old notes that you continue to hold following completion
of the exchange offer.

RISKS RELATING TO OUR INDEBTEDNESS AND THE NEW NOTES

The risks described in this "Risks Relating to Our Indebtedness and the New
Notes" that apply to the new notes also apply to any old notes not tendered for
new notes in the exchange offer.

WE ARE HIGHLY LEVERAGED, WHICH COULD ADVERSELY AFFECT OUR ABILITY TO OPERATE
OUR BUSINESS.

As of June 30, 2003, after giving effect to the offering of the old notes
and application of the net proceeds from that offering, from borrowings of $21.0
million under our new credit facility and from our new $120.0 million term loan
as described under "Private Placement," we would have had total outstanding debt
of approximately $532.2 million. This debt would have represented approximately
54% of our total capitalization. We would have up to $179.0 million of available
capacity under our new credit facility, subject to borrowing base limitations,
and we may continue to borrow thereunder to fund working capital or other needs
in the near term. For the year ended December 31, 2002, our earnings would have
been inadequate to cover fixed charges by $15.4 million. In addition, our
earnings have been inadequate to cover our fixed charges in three of the past
five years. Our level of debt and the limitations imposed on us by our existing
or future debt agreements could have significant consequences on our business
and future prospects, including the following:

- a significant portion of our cash flow from operations will be dedicated
to the payment of interest and principal on our debt and will not be
available for other purposes;

- we may not be able to obtain necessary financing in the future for
working capital, capital expenditures, acquisitions, debt service
requirements or other purposes;

- our less leveraged competitors could have a competitive advantage
because they have greater flexibility to utilize their cash flow to
improve their operations;

- we may be exposed to risks inherent in interest rate fluctuations
because some of our borrowings are at variable rates of interest, which
would result in higher interest expense in the event of increases in
interest rates; and

- we could be more vulnerable in the event of a downturn in our business
that would leave us less able to take advantage of significant business
opportunities and to react to changes in our business and in market or
industry conditions.

TO SERVICE OUR INDEBTEDNESS, WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH. OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.

Our ability to make payments on and to refinance our indebtedness,
including the notes, and to fund planned capital expenditures will depend on our
ability to generate cash in the future. This is subject to general economic,
financial, competitive, legislative, regulatory and other factors that are
beyond our control.

We cannot assure you that our business will generate sufficient cash flow
from operations, that currently anticipated cost savings and operating
improvements will be realized on schedule or that future borrowings will be
available to us under our new credit facility in an amount sufficient to enable
us to pay our indebtedness, including the notes, or to fund our other liquidity
needs. We may need to refinance all or a portion of our indebtedness, including
the notes, on or before maturity. We cannot assure you that we will be able to
refinance any of our indebtedness, including our new credit facility, our new
term loan and the notes, on commercially reasonable terms or at all.

OUR NEW CREDIT FACILITY, OUR NEW TERM LOAN AND THE INDENTURE GOVERNING THE
NOTES IMPOSE SIGNIFICANT OPERATING AND FINANCIAL RESTRICTIONS, WHICH MAY
PREVENT US FROM CAPITALIZING ON BUSINESS OPPORTUNITIES AND TAKING SOME
ACTIONS.

Our new credit facility, our new term loan and the indenture governing the
notes impose significant operating and financial restrictions on us. These
restrictions limit our ability to:

- pay dividends on, redeem or repurchase our capital stock;

- make investments and other restricted payments;

- incur additional indebtedness or issue preferred stock;

- create liens;

- permit dividend or other payment restrictions on our restricted
subsidiaries;

- sell all or substantially all of our assets or consolidate or merge with
or into other companies;

- engage in transactions with affiliates; and

- engage in sale-leaseback transactions.

These limitations are subject to a number of important qualifications and
exceptions. Our new credit facility also requires us to maintain a minimum fixed
charge coverage ratio if availability falls below a specified level. These
covenants may adversely affect our ability to finance our future operations and
capital needs and to pursue available business opportunities. A breach of any of
these covenants could result in a default in respect of the related debt. If a
default occurred, the relevant lenders could elect to declare the debt, together
with accrued interest and other fees, to be immediately due and payable and
proceed against any collateral securing that debt. In addition, any acceleration
of debt under our new credit facility or our new term loan will constitute a
default under some of our other debt, including the indenture governing the
notes.

YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES IS EFFECTIVELY SUBORDINATED TO THE
RIGHTS OF OUR EXISTING AND FUTURE SECURED CREDITORS. FURTHER, THE GUARANTEES
OF THE NOTES ARE EFFECTIVELY SUBORDINATED TO ALL OUR GUARANTORS' EXISTING AND
FUTURE SECURED INDEBTEDNESS.

Holders of our secured indebtedness and the secured indebtedness of the
guarantors will have claims that are prior to your claims as holders of the
notes to the extent of the value of the assets securing that other indebtedness.
Notably, we and certain of our subsidiaries, including the guarantors, are
parties to the new credit facility and term loan, which together are secured by
liens on, among other things, our accounts receivable, inventory and some fixed
assets. The notes are effectively subordinated to all that secured indebtedness.
In the event of any distribution or payment of our assets in any foreclosure,
dissolution, winding-up, liquidation, reorganization or other bankruptcy
proceeding, holders of secured indebtedness will have prior claim to our assets
that constitute their collateral. Holders of the notes will participate ratably
with all holders of our unsecured indebtedness that is deemed to be of the same
class as the notes, and potentially with all of our other general creditors,
based upon the respective amounts owed to each holder or creditor, in our
remaining assets. In any of the foregoing events, we cannot assure you that
there will be sufficient assets to pay amounts due on the notes. As a result,
holders of notes may receive less, ratably, than holders of secured
indebtedness.

As of June 30, 2003, after giving effect to the offering of the old notes
and the application of the net proceeds from that offering, from borrowings of
$21.0 million under our new credit facility and from our new $120.0 million term
loan as described under "Private Placement," the notes would have been
effectively junior to $141.0 million of secured indebtedness, and we would have
up to $179.0 million of available capacity under our new credit facility,
subject to borrowing base limitations.

YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES COULD BE ADVERSELY AFFECTED IF ANY
OF OUR NON-GUARANTOR SUBSIDIARIES DECLARES BANKRUPTCY, LIQUIDATES OR
REORGANIZES.

Some but not all of our subsidiaries will guarantee the notes. In the event
of a bankruptcy, liquidation or reorganization of any of our non-guarantor
subsidiaries, holders of that subsidiary's indebtedness and its trade creditors
will generally be entitled to payment of their claims from the assets of the
subsidiary before any assets are made available for distribution to us.

As of June 30, 2003, after giving effect to the offering of the old notes
and the application of the net proceeds from that offering, from borrowings of
$21.0 million under our new credit facility and from our new $120.0 million term
loan as described under "Private Placement," the notes would have been
effectively junior to $5.0 million of indebtedness and other liabilities
(including trade payables) of our non-guarantor subsidiaries. Our non-guarantor
subsidiaries generated 2.0% of our consolidated net sales in 2002 and held 3.3%
of our consolidated assets as of June 30, 2003.

FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER SPECIFIC CIRCUMSTANCES, TO VOID
GUARANTEES AND REQUIRE NOTE HOLDERS TO RETURN PAYMENTS RECEIVED FROM
GUARANTORS.

Under the federal bankruptcy law and comparable provisions of state
fraudulent transfer laws, a guarantee could be voided or claims in respect of a
guarantee could be subordinated to all other debts of the applicable guarantor
if, among other things, the guarantor, at the time it incurred the indebtedness
evidenced by its guarantee:

- received less than reasonably equivalent value or fair consideration for
the incurrence of such guarantee; and

- was insolvent or rendered insolvent by reason of such incurrence; or

- was engaged or about to engage in a business or transaction for which
the guarantor's remaining assets constituted unreasonably small capital;
or

- intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature.

In addition, any payment by that guarantor pursuant to its guarantee could
be voided and required to be returned to the guarantor or to a fund for the
benefit of the creditors of the guarantor.

The measures of insolvency for purposes of these fraudulent transfer laws
will vary depending upon the law applied in any proceeding to determine whether
a fraudulent transfer has occurred. Generally, however, a guarantor would be
considered insolvent if:

- the sum of its debts, including contingent liabilities, was greater than
the fair saleable value of all of its assets;

- the present fair saleable value of its assets was less than the amount
that would be required to pay its probable liability on its existing
debts, including contingent liabilities, as they become absolute and
mature; or

- it could not pay its debts as they become due.

On the basis of historical financial information, recent operating history
and other factors, we believe that each guarantor, after giving effect to its
guarantee of the notes, will not be insolvent, will not have unreasonably small
capital for the business in which it is engaged and will not have incurred debts
beyond its ability to pay such debts as they mature. We cannot assure you,
however, as to what standard a court would apply in making these determinations
or that a court would agree with our conclusions in this regard.

WE MAY INCUR ADDITIONAL DEBT RANKING EQUAL TO THE NOTES.

If we incur any additional debt that ranks equally with the notes, the
holders of that debt will be entitled to share ratably with you in any proceeds
distributed in connection with any insolvency, liquidation, reorganization,
dissolution or other winding-up of our company. This may have the effect of
reducing the amount of proceeds paid to you.

WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE THE CHANGE
OF CONTROL OFFER REQUIRED BY THE INDENTURE.

Upon the occurrence of specified change of control events, we will be
required to offer to repurchase all outstanding notes at 101% of the principal
amount thereof plus accrued and unpaid interest and additional interest, if any,
to the date of repurchase. It is possible, however, that we will not have
sufficient funds at the time of the change of control to make the required
repurchase of notes or that restrictions in our new credit facility or new term
loan will not allow such repurchases. In addition, certain important corporate
events, such as leveraged recapitalizations that would increase the level of our
indebtedness, would not constitute a "change of control" under the indenture.
See "Description of Notes -- Repurchase at the Option of Holders." Our new
credit facility and term loan provide that certain change of control events will
be a default that will permit the lenders to accelerate the maturity of all
borrowings under the credit facility and term loan and terminate commitments to
lend under the credit facility. Any of our future debt agreements may contain
similar provisions.

THERE IS NO TRADING MARKET FOR THE NEW NOTES AND THERE MAY NEVER BE ONE.

The new notes will be new securities for which currently there is no
trading market. We do not currently intend to apply for the listing of the new
notes on any securities exchange or for quotation of the new notes in any dealer
quotation system. The liquidity of any market for the notes will depend on the
number of holders of those notes, the interest of securities dealers in making a
market in those securities and other factors. Accordingly, we cannot assure you
as to the development or liquidity of any trading market for the notes or as to
your ability to sell your notes at all. Historically, the market for non-
investment grade debt has been subject to disruptions that have caused
substantial volatility in the prices of securities similar to the notes. We
cannot assure you that the market, if any, for the notes will be free from
similar disruptions. Any such disruptions may adversely affect the note holders.

Even if a market for the new notes develops, trading prices could be higher
or lower than the initial offering price or historical trading prices of the
outstanding notes. The prices of the new notes will depend on many factors,
including:

- prevailing interest rates;

- our operating results and financial condition; and

- the market for similar securities.

WE ARE CONTROLLED BY WESTLAKE POLYMER & PETROCHEMICAL, INC. ALL OF OUR
DIRECTORS HAVE BEEN DESIGNATED BY WPPI AND ARE AFFILIATED WITH WPPI.
ACCORDINGLY, NONE OF THEM IS DISINTERESTED.

Westlake Polymer & Petrochemical, Inc., or WPPI, owns all of our equity and
is able to control all matters requiring a stockholder vote. Our entire board of
directors has been designated by WPPI and is affiliated with WPPI. Accordingly,
none of our directors is disinterested. In addition, WPPI controls the
appointment of our management, any mergers involving our company, sales of all
or substantially all of our assets and similar extraordinary transactions. We
can give you no assurance that your interests will not differ from those of
WPPI, our board of directors or our management.

RISKS RELATING TO OUR BUSINESS

CYCLICALITY IN THE PETROCHEMICAL INDUSTRY HAS IN THE PAST, AND MAY IN THE
FUTURE, RESULT IN REDUCED OPERATING MARGINS OR OPERATING LOSSES.

Our historical operating results reflect the cyclical and volatile nature
of the petrochemical industry. The industry is mature and capital intensive.
Margins in this industry are sensitive to supply and demand balances both
domestically and internationally, which historically have been cyclical. The
cycles are characterized by periods of tight supply, leading to high operating
rates and margins, followed by periods of oversupply primarily resulting from
significant capacity additions, leading to reduced operating rates and lower
margins.

Moreover, profitability in the petrochemical industry is affected by the
worldwide level of demand along with vigorous price competition which may
intensify due to, among other things, new domestic and foreign industry
capacity. In general, weak economic conditions either in the United States or in
the world tend to reduce demand and put pressure on margins. It is not possible
to predict accurately the supply and demand balances, market conditions and
other factors that will affect industry operating margins in the future.

WE SELL COMMODITY PRODUCTS IN HIGHLY COMPETITIVE MARKETS AND FACE SIGNIFICANT
COMPETITION AND PRICE PRESSURE.

We sell our products in highly competitive markets. Due to the commodity
nature of many of our products, competition in these markets is based primarily
on price and to a lesser extent on performance, product quality, product
deliverability and customer service. As a result, we generally are not able to
protect our market position for these products by product differentiation and
may not be able to pass on cost increases to our customers. Accordingly,
increases in raw material and other costs may not necessarily correlate with
changes in prices for these products, either in the direction of the price
change or in magnitude. Specifically, timing differences in pricing between raw
material prices, which may change daily, and contract product prices, which in
many cases are negotiated only monthly or less often, sometimes with an
additional lag in effective dates for increases, have had and may continue to
have a negative effect on profitability. Significant volatility in raw material
costs tends to put pressure on product margins, as sales price increases
generally tend to lag behind raw material cost increases. Conversely, when raw
material costs decrease, customers seek relief in the form of lower sales
prices.

HIGH COSTS OF RAW MATERIALS AND ENERGY MAY RESULT IN INCREASED OPERATING
EXPENSES AND ADVERSELY AFFECT OUR RESULTS OF OPERATIONS AND CASH FLOW.

Significant variations in the costs and availability of raw materials and
energy may negatively affect our results of operations. We purchase significant
amounts of ethane and propane feedstock, natural gas, chlorine and salt to
produce several basic chemicals. We also purchase significant amounts of
electricity to supply the energy required in our production processes. The cost
of these raw materials and energy, in the aggregate, represents a substantial
portion of our operating expenses. The prices of raw materials and energy
generally follow price trends of, and vary with market conditions for, crude oil
and natural gas, which are highly volatile and cyclical. Our results of
operations have been and could in the future be significantly affected by
increases in these costs. Price increases increase our working capital needs
and, accordingly, can adversely affect our liquidity and cash flow. We typically
do not enter into significant hedging arrangements with respect to prices of raw
materials. However, we have occasionally entered into short-term contracts in
order to hedge our costs for ethane and natural gas. We cannot assure you that
in the future we will hedge any of our raw material costs or that any such
hedges will have successful results.

In addition, higher natural gas prices adversely affect the ability of many
domestic chemical producers to compete internationally since U.S. producers are
disproportionately reliant on natural gas and natural gas liquids as an energy
source and as a raw material. In addition to the impact that this had on our
exports, reduced competitiveness of U.S. producers also has in the past
increased the availability of chemicals in North America, as U.S. production
that would otherwise have been sold overseas was instead offered for sale
domestically, resulting in excess supply and lower prices in North America. We
could also face the threat of imported products from countries that have a cost
advantage.

THERE IS OVERCAPACITY IN CERTAIN SEGMENTS OF THE PETROCHEMICAL INDUSTRY THAT
MAY RESULT IN LOWER OPERATING RATES AND MARGINS.

Currently, there is overcapacity in the ethylene and polymers industries as
a number of our competitors have added capacity. There can be no assurance that
future growth in product demand will be sufficient to utilize this excess
capacity. Excess industry capacity has depressed, and may continue to depress,
our operating rates and margins. The global economic and political environment
continues to be uncertain, contributing to reduced industry operating rates,
adding to the volatility of raw materials and energy costs, and forestalling the
industry's recovery from trough conditions, which may place pressure on our
results of operations.

EXTERNAL FACTORS BEYOND OUR CONTROL CAN CAUSE FLUCTUATIONS IN DEMAND FOR OUR
PRODUCTS AND IN OUR PRICES AND MARGINS, WHICH MAY NEGATIVELY AFFECT OUR
RESULTS OF OPERATIONS AND CASH FLOW.

External factors beyond our control can cause volatility in raw material
prices, demand for our products, product prices and volumes and deterioration in
operating margins. These factors can also magnify the impact of economic cycles
on our business and results of operations. Examples of external factors include:

- general economic conditions;

- the level of business activity in the industries that use our products;

- competitor action;

- technological innovations;

- currency fluctuations;

- international events and circumstances; and

- governmental regulation in the United States and abroad.

We believe that events in the Middle East and Venezuela have had a
particular influence in recent months and may continue to do so until the
situations normalize. In addition, a number of our products
18

are highly dependent on durable goods markets, such as housing and construction,
which are themselves particularly cyclical. If the global economy does not
improve, demand for our products and our income and cash flow would continue to
be adversely affected.

We may reduce production at or idle a facility for an extended period of
time or exit a business because of high raw material prices, an oversupply of a
particular product and/or a lack of demand for that particular product, which
makes production uneconomical. Temporary outages sometimes last for several
quarters or, in certain cases, longer and cause us to incur costs, including the
expenses of maintaining and restarting these facilities. Factors such as
increases in raw material costs or lower demand in the future may cause us to
further reduce operating rates or idle facilities or exit uncompetitive
businesses.

Continued hostilities in the Middle East and/or the occurrence or threat of
occurrence of future terrorist attacks such as those against the United States
on September 11, 2001 could adversely affect the economies of the United States
and other developed countries. A lower level of economic activity could result
in a decline in demand for our products, which could adversely affect our net
sales and margins and limit our future growth prospects. In addition, these
risks have and may continue to increase volatility in prices for crude oil and
natural gas and could result in increased feedstock costs. In addition, these
risks could cause increased instability in the financial and insurance markets
and adversely affect our ability to access capital and to obtain insurance
coverages that we consider adequate or are otherwise required by our contracts
with third parties.

OUR INABILITY TO COMPETE SUCCESSFULLY MAY REDUCE OUR OPERATING PROFITS.

The petrochemical industry is highly competitive. In the last several
years, there have been a number of mergers, acquisitions, spin-offs and joint
ventures in the industry. This restructuring activity has resulted in fewer but
more competitive producers, many of which are larger than we are and have
greater financial resources than we do. Among our competitors are some of the
world's largest chemical companies and chemical industry joint ventures.
Competition within the petrochemical industry and in the manufacturing of
fabricated products is affected by a variety of factors, including:

- product price;

- technical support and customer service;

- quality;

- reliability of supply;

- availability of potential substitute materials; and

- product performance.

Changes in the competitive environment could have a material adverse effect
on our business and our operations. These changes could include:

- the emergence of new domestic and international competitors;

- the rate of capacity additions by competitors;

- change in customer base due to mergers;

- the intensification of price competition in our markets;

- the introduction of new or substitute products by competitors;

- the technological innovations of competitors; and

- the adoption of new environmental laws and regulatory requirements.

OUR PRODUCTION FACILITIES PROCESS SOME VOLATILE AND HAZARDOUS MATERIALS THAT
SUBJECT US TO OPERATING RISKS THAT COULD ADVERSELY AFFECT OUR OPERATING
RESULTS.

We have three major manufacturing facilities: our olefins complex in Lake
Charles, Louisiana, our vinyls complex in Calvert City, Kentucky and our
recently acquired vinyls facility in Geismar, Louisiana, which is currently
idle. Our operations are subject to the usual hazards associated with commodity

chemical and plastics manufacturing and the related use, storage, transportation
and disposal of feedstocks, products and wastes, including:

- pipeline leaks and ruptures;

- explosions;

- fires;

- severe weather and natural disasters;

- mechanical failure;

- unscheduled downtime;

- labor difficulties;

- transportation interruptions;

- chemical spills;

- discharges or releases of toxic or hazardous substances or gases;

- storage tank leaks;

- other environmental risks; and

- terrorist attacks.

These hazards can cause personal injury and loss of life, catastrophic
damage to or destruction of property and equipment and environmental damage, and
may result in a suspension of operations and the imposition of civil or criminal
penalties. We could become subject to environmental claims brought by
governmental entities or third parties. The loss or shutdown over an extended
period of operations at either of our major operating facilities would have a
material adverse effect on us. We maintain property, business interruption and
casualty insurance which we believe is in accordance with customary industry
practices, but we cannot be fully insured against all potential hazards incident
to our business, including losses resulting from war risks or terrorist acts. As
a result of market conditions, premiums and deductibles for certain insurance
policies can increase substantially and, in some instances, certain insurance
may become unavailable or available only for reduced amounts of coverage. If we
were to incur a significant liability for which we were not fully insured, it
could have a material adverse effect on our financial position.

NEW REGULATIONS CONCERNING THE TRANSPORTATION OF HAZARDOUS CHEMICALS AND THE
SECURITY OF CHEMICAL MANUFACTURING FACILITIES COULD RESULT IN HIGHER OPERATING
COSTS.

Targets such as chemical manufacturing facilities may be at greater risk of
future terrorist attacks than other targets in the United States. As a result,
the chemical industry has responded to the issues surrounding the terrorist
attacks of September 11, 2001 by starting new initiatives relating to the
security of chemicals industry facilities and the transportation of hazardous
chemicals in the United States. Simultaneously, local, state and federal
governments have begun a regulatory process that could lead to new regulations
impacting the security of chemical plant locations and the transportation of
hazardous chemicals. Our business or our customers' businesses could be
adversely affected because of the cost of complying with new regulations.

OUR OPERATIONS AND ASSETS ARE SUBJECT TO EXTENSIVE ENVIRONMENTAL, HEALTH AND
SAFETY LAWS AND REGULATIONS.

We use large quantities of hazardous substances and generate large
quantities of hazardous wastes in our manufacturing operations. Due to the large
quantities of hazardous substances and wastes, our industry is highly regulated
and monitored by various environmental regulatory authorities. As such, we are
subject to extensive federal, state and local laws and regulations pertaining to
pollution and protection of the environment, health and safety and governing,
among other things, emissions to the air, discharges onto land or waters, the
maintenance of safe conditions in the workplace, the remediation of contaminated
sites, and the generation, handling, storage, transportation, treatment and
disposal of waste materials. Some of these laws and regulations are subject to
varying and conflicting interpretations. Many of these laws and regulations
provide for substantial fines and potential criminal sanctions for violations
and require the installation of costly pollution control equipment or
operational changes to limit pollution emissions and/or reduce the likelihood or
impact of hazardous substance releases, whether permitted or not. For example,
at our Lake Charles and Calvert City plants, we are currently planning equipment
and operational changes necessary to comply with anticipated requirements of the
U.S. Environmental Protection Agency's recently promulgated regulations related
to the ethylene maximum achievable control technology, or MACT,

standards that require compliance by July 2005, as well as anticipated
wastewater regulations of the synthetic organic chemical manufacturing
industries.

In addition, we cannot accurately predict future developments, such as
increasingly strict environmental laws or regulations, and inspection and
enforcement policies, as well as resulting higher compliance costs, which might
affect the handling, manufacture, use, emission, disposal or remediation of
products, other materials or hazardous and non-hazardous waste, and we cannot
predict with certainty the extent of our future liabilities and costs under
environmental, health and safety laws and regulations. These liabilities and
costs may be material.

We also may face liability for alleged personal injury or property damage
due to exposure to chemicals or other hazardous substances at our facilities or
to chemicals that we otherwise manufacture, handle or own. Although these types
of claims have not historically had a material impact on our operations, a
significant increase in the success of these types of claims could materially
adversely affect our business, financial condition, operating results or cash
flow.

Environmental laws may have a significant effect on the nature and scope
of, and responsibility for, cleanup of contamination at our current and former
operating facilities, the costs of transportation and storage of raw materials
and finished products, the costs of reducing emissions and the costs of the
storage and disposal of wastewater. In addition, the federal Comprehensive
Environmental Response, Compensation and Liability Act, or CERCLA, and similar
state laws impose joint and several liability for the costs of remedial
investigations and actions on the entities that generated waste, arranged for
disposal of the wastes, transported to or selected the disposal sites and the
past and present owners and operators of such sites. All such potentially
responsible parties (or any one of them, including us) may be required to bear
all of such costs regardless of fault, legality of the original disposal or
ownership of the disposal site.

Our operations are inherently subject to accidental spills, discharges or
other releases of hazardous substances that may make us liable to governmental
entities or private parties. This may involve contamination associated with our
current and former facilities, facilities to which we sent wastes or by-
products for treatment or disposal and other contamination. Accidental
discharges may occur in the future, future action may be taken in connection
with past discharges, governmental agencies may assess damages or penalties
against us in connection with any past or future contamination, or third parties
may assert claims against us for damages allegedly arising out of any past or
future contamination. In addition, we may be liable for existing contamination
related to certain of our facilities for which we believe third parties are
liable in the event such third parties fail to perform with their obligations.
For further discussion of such existing contamination, see
"Business -- Environmental and Other Regulation."

In some cases, compliance with environmental, health and safety laws and
regulations can only be achieved by capital expenditures, such as the
installation of pollution control equipment. For environmentally related capital
expenditures at our Lake Charles and Calvert City facilities, we spent
approximately $1.6 million in the year ended December 31, 2002, $14.1 million in
the year ended December 31, 2001 and $1.9 million in the year ended December 31,
2000. We currently estimate that environmentally related capital expenditures at
these facilities will be approximately $5.8 million for 2003. In addition, we
currently estimate that environmentally related capital expenditures at our
recently acquired Geismar facility will be approximately $0.6 million for 2003.

OUR PROPERTY INSURANCE DOES NOT COVER ACTS OF TERRORISM AND, IN THE EVENT OF A
TERRORIST ATTACK, WE COULD LOSE NET SALES AND OUR FACILITIES.

As a result of the terrorist attacks of September 11, 2001 and other
events, our insurance carriers have created exclusions for losses from terrorism
from our "all risk" property insurance policies. While separate terrorism
insurance coverage is available, premiums for such coverage are very expensive,
especially for chemical facilities, and the policies are subject to very high
deductibles. Available terrorism coverage typically excludes coverage for losses
from acts of foreign governments as well as nuclear, biological and chemical
attacks. We have determined that it is not economically prudent to obtain
terrorism insurance, especially given the significant risks that are not covered
by such insurance, and we do
21

not carry terrorism insurance on our property at this time. In the event of a
terrorist attack impacting one or more of our facilities, we could lose the net
sales from the facilities and the facilities themselves, and could become liable
for any contamination or for personal or property damage due to exposure to
hazardous materials caused by any catastrophic release that may result from a
terrorist attack.

FORWARD-LOOKING INFORMATION

Certain of the statements contained in this prospectus are forward-looking
statements. All statements, other than statements of historical facts, included
in this prospectus that address activities, events or developments that we
expect, project, believe or anticipate will or may occur in the future are
forward-looking statements. These include such matters as:

- future operating rates, margins, cash flow and demand for our products;

- production capacities;

- expected cyclical recovery in the olefins and vinyls industries;

- our ability to borrow additional funds under our new credit facility;

- future capacity additions and expansions in the industry;

- compliance with present and future environmental regulations and costs
associated with environmentally related penalties, capital expenditures,
remedial actions and proceedings; and

- effects of pending legal proceedings.

We have based these statements on assumptions and analyses in light of our
experience and perception of historical trends, current conditions, expected
future developments and other factors we believe were appropriate in the
circumstances when the statements were made. These statements are subject to a
number of assumptions, risks and uncertainties, including those described above
under "Risk Factors" and the following:

- general economic and business conditions;

- the cyclical nature of the chemical industry;

- the availability, cost and volatility of raw materials and energy;

- uncertainties associated with the United States and worldwide economies,
including those due to political tensions in the Middle East and
elsewhere;

- current and potential governmental regulatory actions in the United
States and regulatory actions and political unrest in other countries;

- industry production capacity and operating rates;

- the supply/demand balance for our products;

- competitive products and pricing pressures;

- access to capital markets;

- terrorist acts;

- operating interruptions (including leaks, explosions, fires,
weather-related incidents, mechanical failure, unscheduled downtime,
labor difficulties, transportation interruptions, spills and releases
and other environmental risks);

- changes in laws or regulations;

- technological developments;

- our ability to implement our business strategies; and

- creditworthiness of our customers.

Many of such factors are beyond our ability to control or predict. Any of the
factors, or a combination of these factors, could materially affect our future
results of operations and the ultimate accuracy of the forward-looking
statements. These forward-looking statements are not guarantees of our future
perform-

ance, and our actual results and future developments may differ materially from
those projected in the forward-looking statements. Management cautions against
putting undue reliance on forward-looking statements or projecting any future
results based on such statements or present or prior earnings levels.

PRIVATE PLACEMENT

On July 31, 2003, we issued $380 million principal amount of the
outstanding 8 3/4% Senior Notes due 2011 to the initial purchasers of those
notes. We issued the old notes to the initial purchasers in transactions exempt
from or not subject to registration under the Securities Act. The initial
purchasers then offered and resold the notes to qualified institutional buyers
and non-U.S. persons initially at 100.0% of the principal amount. On the same
date, we entered into a $120.0 million senior secured term loan and borrowed
$21.0 million under a $200.0 million senior secured revolving credit facility.

We used the aggregate net proceeds from these transactions of approximately
$507.4 million to repay in full our then-existing revolving credit facility,
term loan and 9.5% Series A and Series B notes, including all accrued and unpaid
interest, fees and a make-whole premium on the notes, and to provide cash
collateral for outstanding letters of credit. In conjunction with the
transactions described above, we also terminated our then-existing accounts
receivable securitization facility and repurchased all accounts receivable
previously sold to our unconsolidated accounts receivable securitization
subsidiary. Please read "Description of Certain Indebtedness" for a description
of the new credit facility and term loan.

USE OF PROCEEDS

We will not receive any cash proceeds from the issuance of the new notes.
In consideration for issuing the new notes, we will receive in exchange a like
principal amount of old notes. The old notes surrendered in exchange for the new
notes will be retired and canceled and cannot be reissued. Accordingly, issuance
of the new notes will not result in any change in our capitalization.

CAPITALIZATION

We have provided in the table below our consolidated cash and cash
equivalents and capitalization as of June 30, 2003 and as adjusted to reflect
the issuance of the notes, completion of our new credit facility and term loan
and the application of the net proceeds from the note issuance, from borrowings
of $21.0 million under the new credit facility and from the new term loan as
described under "Private Placement." You should read this table in conjunction
with our consolidated financial statements and the related notes appearing
elsewhere in this prospectus.

<Table>
<Caption>
JUNE 30, 2003
-----------------------
ACTUAL(1) AS ADJUSTED
--------- -----------
(IN MILLIONS)

Cash and cash equivalents................................... $ 9.6 $ 18.7(2)
====== =======
Long-term debt, including current portion:
New senior secured revolving credit facility(3)........... $ -- $ 21.0
New senior secured term loan.............................. -- 120.0
Existing revolving credit facility........................ 161.5 --
Existing term loan........................................ 114.0 --
9.50% Series A Senior Secured Notes Due March 31,
2005(4)................................................ 58.8 --
9.50% Series B Senior Secured Notes Due March 31,
2005(4)................................................ 150.0 --
8 3/4% Senior Notes due 2011.............................. -- 380.0
Loan related to tax-exempt revenue bonds.................. 10.9 10.9
Other..................................................... 0.3 0.3
------ -------
Total long-term debt, including current portion... 495.5 532.2
------ -------
Total stockholders' equity.................................. 461.7 454.6(5)
------ -------
Total capitalization.............................. $957.2 $ 986.8
====== =======
</Table>

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

(1) Excludes $9.0 million of accounts receivable as of June 30, 2003 sold to our
accounts receivable securitization subsidiary. We repurchased $45.6 million
of accounts receivable sold to our accounts receivable securitization
subsidiary in connection with the refinancing described in "Private
Placement."

(2) Reflects $9.1 million of cash proceeds from the refinancing. In addition, we
used $2.4 million of proceeds to provide cash collateral to secure letters
of credit under the existing revolving credit facility.

(3) The new credit facility provides for availability of up to $200 million,
subject to borrowing base limitations. See "Description of Certain
Indebtedness -- New Credit Facility."

(4) In connection with the prepayment of the notes, we paid an aggregate
make-whole premium of $4.0 million.

(5) Reflects pre-tax charges for the $4.0 million make-whole premium in
connection with the prepayment of the notes and a $7.3 million write off of
the unamortized balance of previously capitalized debt issuance costs as of
June 30, 2003. The after-tax impact on stockholders' equity of the
make-whole premium and the write off is $7.1 million.

SELECTED CONSOLIDATED FINANCIAL, OPERATING AND INDUSTRY DATA

We have provided in the table below selected consolidated financial,
operating and industry data. We have derived the statement of operations data
for each of the years in the three-year period ended December 31, 2002, and the
balance sheet data as of December 31, 2001 and 2002, from audited consolidated
financial statements appearing elsewhere in this prospectus. We have derived the
statement of operations data for each of the years in the two-year period ended
December 31, 1999, and the balance sheet data as of December 31, 1998, 1999 and
2000, from audited consolidated financial statements not included in this
prospectus. We have derived the statement of operations data for the six-month
periods ended June 30, 2002 and 2003, and the balance sheet data as of June 30,
2003, from unaudited consolidated financial statements included elsewhere in
this prospectus, which, in our management's opinion, include all adjustments
necessary for the fair presentation of our financial position at June 30, 2003
and our results of operations for the six-month periods ended June 30, 2002 and
2003. We have derived the balance sheet data as of June 30, 2002 from our
unaudited consolidated financial statements not included in this prospectus.
Results of operations for the six-month period ended June 30, 2003 are not
necessarily indicative of the results of operations that may be achieved for the
entire year. You should read this data in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
our consolidated financial statements and the related notes appearing elsewhere
in this prospectus.

<Table>
<Caption>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------ ------------
1998 1999 2000 2001 2002 2002 2003
---- ----- ----- ----- ----- ---- ----

EXTERNAL SALES VOLUME: (MILLIONS OF POUNDS)
Ethylene............................................ 658 586 607 560 340 110 232
Polyethylene........................................ 768 1,117 1,213 1,076 1,199 607 615
Styrene............................................. 416 445 455 494 428 204 182
PVC................................................. 424 310 300 309 301 156 129
VCM................................................. 135 387 394 459 473 232 230
Fabricated products................................. 495 506 440 501 545 303 243
AVERAGE INDUSTRY PRICING:(6) (CENTS PER POUND, EXCEPT AS NOTED)
Ethylene(7)......................................... 13.4 21.5 27.2 21.4 16.9 16.2 22.2
Polyethylene(8)..................................... 35.0 41.0 46.4 42.8 41.9 38.3 51.5
Styrene(9).......................................... 17.5 22.9 34.8 21.8 27.3 25.9 32.1
PVC(10)............................................. 26.5 32.8 36.7 31.4 34.4 30.8 42.2
VCM(11)............................................. 15.3 18.3 25.3 18.9 19.9 17.3 25.8
Natural gas ($/mmbtu)(12)........................... 2.16 2.32 4.32 4.04 3.37 2.97 5.83
</Table>

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

(3) Working capital equals current assets less current liabilities.

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA

Net income (loss).................. $(45,141) $ 37,800 $ 53,695 $(64,875) $ (1,339) $(14,897) $11,674
Plus:
Cumulative effect of change in
accounting principle, net of
tax............................ -- 9,335 -- -- -- -- --
Minority interest................ 2,795 6,797 5,357 (8,473) (8,065) (5,173) 1,329
Provision for (benefit from)
income taxes................... (26,435) 30,338 30,707 (45,255) (7,206) (12,291) 7,677
Interest expense................. 35,899 41,991 31,957 31,892 32,907 16,221 16,544
Less:
Other income, net................ 7,889 11,421 1,685 8,895 6,784 6,530 6,310
-------- -------- -------- -------- -------- -------- -------
Income (loss) from operations...... (40,771) 114,840 120,031 (95,606) 9,513 (22,670) 30,914
-------- -------- -------- -------- -------- -------- -------
Plus:
Depreciation and amortization.... 78,824 86,462 81,163 83,307 89,602 43,685 45,004
Impairment of long-lived
assets......................... 14,622 2,748 10,777 7,677 2,239 -- 932
-------- -------- -------- -------- -------- -------- -------
Adjusted EBITDA.................... $ 52,675 $204,050 $211,971 $ (4,622) $101,354 $ 21,015 $76,850
======== ======== ======== ======== ======== ======== =======
</Table>

(5) We have computed the ratios of earnings to fixed charges by dividing
earnings by fixed charges. For this purpose, "earnings" consist of earnings
before income taxes plus fixed charges less capitalized interest. "Fixed
charges" consist of interest expense, capitalized interest and that portion
of operating lease rental expense (one-third) we have deemed to represent
the interest factor of such expense.

For the years ended December 31, 1998, 2001 and 2002, earnings were
inadequate to cover fixed charges by $74.3 million, $119.7 million and
$15.4 million, respectively. For the six months ended June 30, 2002,
earnings were inadequate to cover fixed charges by $32.7 million.

(6) These are average industry prices for the indicated products as reported by
CMAI and are not the prices we realized.

(7) Represents average North American spot prices of ethylene over the period
as reported by CMAI.

(8) Represents average North American prices of LDPE general purpose film over
the period as reported by CMAI.

(9) Represents average North American spot prices of styrene over the period as
reported by CMAI.

(10) Represents average North American contract prices of PVC over the period as
reported by CMAI.

(11) Represents average North American contract prices of VCM over the period as
reported by CMAI.

(12) Represents average prices of Henry Hub natural gas over the period as
reported by the New York Mercantile Exchange (NYMEX).

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with "Selected Consolidated
Financial, Operating and Industry Data" and our consolidated financial
statements and notes thereto appearing elsewhere in this prospectus. This
discussion and analysis contains forward-looking statements that involve risks
and uncertainties. Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth under "Risk Factors" and elsewhere in this prospectus.
See "Forward-Looking Information."

OVERVIEW

We are a vertically integrated manufacturer and marketer of petrochemicals,
polymers and fabricated products. Our two principal business segments are
Olefins and Vinyls. We use the majority of our internally-produced basic
chemicals to produce higher value-added chemicals and fabricated products.

Consumption of the basic chemicals that we manufacture in the commodity
portions of our ethylene and vinyls processes has increased significantly over
the past 30 years. Our Olefins and Vinyls products are some of the most widely
used chemicals in the world and are upgraded into a wide variety of higher
value-added chemical products used in many end markets. Petrochemicals are
typically manufactured in large volume by a number of different producers using
widely available technologies. The petrochemical industry exhibits cyclical,
commodity characteristics, and margins are influenced by changes in the balance
between supply and demand and the resulting operating rates, the level of
general economic activity and the price of raw materials. The cycle is
characterized by periods of tight supply, leading to high operating rates and
margins, followed by a decline in operating rates and margins primarily as a
result of significant capacity additions. Due to the significant size of new
plants, capacity additions are built in large increments and typically require
several years of demand growth to be absorbed. The industry is currently in a
down cycle as a result of significant new capacity additions in the past several
years, combined with soft demand resulting from the global economic recession.
Currently, no significant new olefins or vinyls capacity additions have been
announced in North America. While operating rates and margins are currently
depressed, rates are expected to increase as economic growth improves and excess
capacity is absorbed, which is expected to result in increasing margins.

We purchase significant amounts of ethane and propane feedstock, natural
gas, chlorine and salt from third parties for use in production of basic
chemicals in the olefins and vinyls chains. We also purchase significant amounts
of electricity to supply the energy required in our production processes. While
we have agreements providing for the supply of ethane and propane feedstocks,
natural gas, chlorine, salt and electricity, the contractual prices for these
raw materials and energy vary with market conditions and may be highly volatile.
Factors which have caused volatility in our raw material prices in the past and
which may do so in the future, include:

- shortages of raw materials due to increasing demand;

- capacity constraints due to construction delays, strike action or
involuntary shutdowns;

- the general level of business and economic activity; and

- the direct or indirect effect of governmental regulation.

Significant volatility in raw material costs tends to put pressure on
product margins, as sales price increases generally tend to lag behind raw
material cost increases. Conversely, when raw material costs decrease, customers
seek relief in the form of lower sales prices. These dynamics are particularly
pronounced during periods of excess industry capacity and contributed to the
trough conditions experienced by the chemical industry in 2001 and 2002. We
typically do not enter into hedging arrangements with respect to prices of raw
materials.

In 2001 and 2002, we experienced two periods of dramatically increased raw
material costs. In 2001, natural gas prices spiked to a high of $9.82 per
million BTUs, or mmbtu, as compared to a three year average of $3.57 per mmbtu
between 1999 and 2001. Prices for natural gas declined, but spiked again in 2002
to a high of $5.34 per mmbtu for natural gas. As a result of weak industry
conditions, in most cases we were unable to fully pass these raw material price
increases through to customers and our margins declined. In the first six months
of 2003, we experienced another natural gas price spike with prices averaging
$5.83 per mmbtu. In this period, we were able to pass some of the higher
feedstock prices through to our customers. As a result, margins improved
compared to margins in 2001 and 2002.

Our historical results have been significantly affected by our plant
production capacity, our efficient use of the capacity and our ability to
increase our capacity. Since inception, we have followed a disciplined growth
strategy that focuses on plant acquisitions, new plant construction and internal
expansion. We evaluate each expansion project on the basis of its ability to
produce sustained returns in excess of its cost of capital and its ability to
improve efficiency or reduce operating costs. In addition, we continually
evaluate the cost efficiency of our assets and have implemented an asset
rationalization program to eliminate under-performing assets.

We have invested approximately $1.2 billion since 1990 to construct new,
state-of-the-art facilities and to acquire and to upgrade acquired facilities
and equipment in both our Olefins and Vinyls segments. Our Olefins business
began in 1985 with the acquisition of our low-density polyethylene plant. We
began operations in this facility in 1986. Since that time, we have
significantly increased our olefins capacity, increasing our LDPE capacity from
225 million pounds to 850 million pounds and adding 2.3 billion pounds of
ethylene capacity, 450 million pounds of styrene monomer capacity and 500
million pounds of LLDPE capacity. During the same period, we commenced our
Vinyls operations and added substantial capacity to those operations, including
two PVC plants (one of which is in China through our joint venture), five PVC
pipe plants and three PVC components plants. In 1997, we also acquired a
chlor-alkali plant and an ethylene plant in Calvert City, Kentucky.

RESULTS OF OPERATIONS

SEGMENT DATA

<Table>
<Caption>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------ -------------------
2000 2001 2002 2002 2003
---------- ---------- ---------- -------- --------
(DOLLARS IN THOUSANDS)

NET SALES:
Olefins........................... $ 906,276 $ 665,703 $ 627,494 $273,345 $450,636
Vinyls............................ 527,652 455,339 474,095 227,408 266,784
Intersegment eliminations......... (42,565) (34,009) (28,962) (15,129) (18,863)
---------- ---------- ---------- -------- --------
Total.......................... $1,391,363 $1,087,033 $1,072,627 $485,624 $698,557
========== ========== ========== ======== ========
INCOME (LOSS) FROM OPERATIONS:
Olefins........................... $ 94,292 $ (44,734) $ 7,875 $(12,613) $ 24,992
Vinyls............................ 43,999 (32,857) 10,482 (7,858) 9,632
Corporate and other............... (18,260) (18,015) (8,844) (2,199) (3,710)
---------- ---------- ---------- -------- --------
Total.......................... $ 120,031 $ (95,606) $ 9,513 $(22,670) $ 30,914
========== ========== ========== ======== ========
ADJUSTED EBITDA(1):
Olefins........................... $ 144,439 $ 3,602 $ 61,370 $ 13,737 $ 51,779
Vinyls............................ 69,531 (904) 45,068 8,212 26,314
Corporate and other............... (1,999) (7,320) (5,084) (934) (1,243)
---------- ---------- ---------- -------- --------
Total.......................... $ 211,971 $ (4,622) $ 101,354 $ 21,015 $ 76,850
========== ========== ========== ======== ========
</Table>

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

(1) The following tables reconcile Adjusted EBITDA with our income (loss) from
operations for each segment:

RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS TO ADJUSTED EBITDA -- OLEFINS

<Table>
<Caption>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------- ------------------
2000 2001 2002 2002 2003
-------- -------- ------- -------- -------
(DOLLARS IN THOUSANDS)

Income (loss) from operations............. $ 94,292 $(44,734) $ 7,875 $(12,613) $24,992
Depreciation and amortization............. 50,147 48,336 53,495 26,350 25,855
Impairment of long-lived assets........... -- -- -- -- 932
-------- -------- ------- -------- -------
Adjusted EBITDA........................... $144,439 $ 3,602 $61,370 $ 13,737 $51,779
======== ======== ======= ======== =======
</Table>

RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS TO ADJUSTED EBITDA -- VINYLS

<Table>
<Caption>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------- ------------------
2000 2001 2002 2002 2003
------- -------- ------- -------- -------
(DOLLARS IN THOUSANDS)

Income (loss) from operations.............. $43,999 $(32,857) $10,482 $ (7,858) $ 9,632
Depreciation and amortization.............. 25,532 31,153 32,347 16,070 16,682
Impairment of long-lived assets............ -- 800 2,239 -- --
------- -------- ------- -------- -------
Adjusted EBITDA............................ $69,531 $ (904) $45,068 $ 8,212 $26,314
======= ======== ======= ======== =======
</Table>

RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS TO ADJUSTED EBITDA -- CORPORATE
AND OTHER

<Table>
<Caption>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------- -----------------
2000 2001 2002 2002 2003
-------- -------- ------- ------- -------
(DOLLARS IN THOUSANDS)

Income (loss) from operations.............. $(18,260) $(18,015) $(8,844) $(2,199) $(3,710)
Depreciation and amortization.............. 5,484 3,818 3,760 1,265 2,467
Impairment of long-lived assets............ 10,777 6,877 -- -- --
-------- -------- ------- ------- -------
Adjusted EBITDA............................ $ (1,999) $ (7,320) $(5,084) $ (934) $(1,243)
======== ======== ======= ======= =======
</Table>

SIX MONTHS ENDED JUNE 30, 2003 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2002

Net Sales. Net sales increased by $213.0 million, or 43.9%, to $698.6
million in the first six months of 2003 from $485.6 million in the first six
months of 2002. This increase was due to price increases throughout our Olefins
and Vinyls segments and higher ethylene sales volumes. Higher selling prices
were primarily the result of higher energy and raw material cost that were
passed through to customers. These improvements were partially offset by lower
sales volumes for PVC pipe and resin resulting from lower demand.

Gross Margin. Gross margins increased to 9.1% in the first six months of
2003 from 0.8% in the first six months of 2002. This improvement was primarily a
result of higher prices, reduced by higher feedstock and energy costs and lower
sales volumes for PVC pipe and resin.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $5.1 million in the first six months of 2003
as compared to the first six months of 2002. The increase was primarily the
result of increases in consulting and legal fees, allowance for doubtful
accounts and insurance costs.

Impairment of Long-Lived Assets. Impairment of long-lived assets was $0.9
million in the first six months of 2003 and related to idled styrene assets.

Interest Expense. Interest expense increased $0.3 million in the first six
months of 2003 as compared to the first six months of 2002. The average interest
rate increased to 7.0% in the first six months of 2003 from 6.1% in the first
six months of 2002. The impact of higher interest rates was partially offset by
a decrease in the average debt balance.

Other Income, Net. Other income, net decreased by $0.2 million in the
first six months of 2003 as compared to the first six months of 2002, primarily
as a result of reduced management service fees and lower interest income, which
were partially offset by higher derivative gains.

Income Taxes. Our effective tax rate for the six months ended June 30,
2003 and 2002 was 37.1% and 38.0%, respectively. The effective tax rates for six
months ended June 30, 2003 and 2002 are different from the federal statutory tax
rate due to state taxes.

Olefins Segment

Net Sales. Net sales increased by $173.6 million, or 67.2%, to $432.1
million in the first six months of 2003 from $258.5 million in the first six
months of 2002. This increase was due to price increases in ethylene,
polyethylene and styrene and higher sales volumes in ethylene, partially offset
by lower styrene sales volumes. These increased prices were due to higher demand
and higher energy and raw material costs that were passed through to customers.
Ethylene sales volumes increased due to an increase in contract sales volumes
for merchant ethylene. Styrene sales volumes decreased due to lower demand and a
planned 30-day shut-down our Lake Charles styrene facility for maintenance.

Income (Loss) from Operations. Income (loss) from operations in our
Olefins segment increased by $37.6 million to income of $25.0 million in the
first six months of 2003 from a loss of $12.6 million in the first six months of
2002. This increase was due to price increases for ethylene, polyethylene and
styrene, reduced by higher feedstock and energy costs. The increase was also due
to higher sales volumes for ethylene and polyethylene and higher production
volume for ethylene. In the first quarter of 2002, one ethylene unit was down
for 44 days due to a fire while the other unit ran at a reduced rate throughout
the quarter due to furnace metallurgical failures, which were subsequently
resolved.

Vinyls Segment

Net Sales. Net sales increased by $39.3 million to $266.5 million in the
first six months of 2003 from $227.2 million in the first six months of 2002.
This increase was due to price increases in PVC pipe and fence, PVC resin, VCM
and caustic, partially offset by lower PVC pipe and resin sales volumes. The
price increases resulted from higher energy costs that were passed through to
customers. The sales volume decreases were primarily the result of heavy
rainfall in the first six months in the Midwest and Southeast regions.

Income (Loss) from Operations. Income (loss) from operations in our Vinyls
segment increased by $17.5 million to income of $9.6 million in the first six
months of 2003 from a loss of $7.9 million in the first six months of 2002. This
increase was due to higher prices for PVC pipe and fence products, PVC resin and
caustic and was partially offset by higher raw material costs. The increase was
also due to higher production volumes for chlor-alkali resulting from an
expansion and conversion of the chlor-alkali plant to membrane technology in the
first quarter of 2002. This expansion lowered per unit energy costs by
approximately 25% and reduced external chlorine purchases while increasing
caustic production. These improvements were partially offset by lower PVC pipe
and resin sales volume.

2002 COMPARED WITH 2001

Net Sales. Net sales decreased by $14.4 million, or 1.3%, to $1,072.6
million in 2002 from $1,087.0 million in 2001. This decrease was primarily due
to lower prices for ethylene, polyethylene and caustic and lower styrene sales
volumes and was partially offset by higher sales volumes in both our
32

Olefins and Vinyls segments and higher styrene prices. Ethylene and polyethylene
prices fell primarily due to energy and raw material cost reductions in natural
gas, ethane and propane. Sales volumes were higher for our Olefins and Vinyls
products due to increases in 2002 demand as compared with 2001, when we
experienced a slowdown in the general economy.

Gross Margin. Gross margin increased to positive 6.6% in 2002 from
negative 3.2% in 2001. This improvement was primarily due to price increases,
higher sales volumes and higher utilization rates, partially offset by higher
energy and raw material costs.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by approximately $5.6 million in 2002 compared
with 2001 primarily due to increases in the provision for doubtful accounts of
$5.2 million, depreciation of software and hardware of $2.0 million due to the
startup of several information technology projects and an increase in insurance
expense of $1.8 million due to rate increases, partially offset by reductions in
payroll and benefits of $2.5 million due to reductions in head count and
bonuses.

Impairment of Long-Lived Assets. Impairment of long-lived assets decreased
to $2.2 million in 2002 from $7.7 million in 2001. The 2002 impairment was for
assets related to a discontinued product in our Vinyls business. The 2001
impairment included a $3.2 million write-down to fair market value of idled
assets held for sale and $4.4 million relating to computer software and fixed
assets.

Interest Expense. Interest expense increased by $1.0 million in 2002 from
2001, primarily due to an increase in interest rates. The weighted average
interest rate on borrowings as of December 31, 2002 and 2001 was 7.1% and 6.3%,
respectively.

Other Income, Net. Other income, net decreased by $2.1 million in 2002
from 2001, primarily as a result of reduced insurance claims proceeds and a
reduction in management fees received from an affiliated company.

Income Taxes. The effective income tax rate increased to 43.4% in 2002
from 38.2% in 2001 due to an adjustment of prior period state net operating loss
carryforwards.

Olefins Segment

Net Sales. Net sales before intersegment eliminations decreased by $38.2
million, or 5.7%, to $627.5 million in 2002 from $665.7 million in 2001. This
decrease resulted from lower prices for ethylene and LDPE and lower merchant
sales volumes for ethylene, styrene and ethylene co-product and was partially
offset by higher styrene prices and higher LDPE and LLDPE sales volumes. As
reported by CMAI, selling prices for spot ethylene decreased by 21.1% to 16.9
cents per pound in 2002. Ethylene co-product sales decreased in 2002, primarily
due to lower pricing. Sales volumes for LDPE and LLDPE, which are higher
value-added products, increased substantially in 2002 due to stronger market
demand. Our polyethylene sales volumes increased by 11.4% to 1.2 billion pounds
in 2002 as compared to 2001. Our styrene sales volumes decreased by 13.5% to
427.6 million pounds in 2002 due to a reduction from 2001 levels in outside
purchases of styrene for subsequent resale.

Income (Loss) from Operations. Income (loss) from operations increased by
$52.6 million to $7.9 million in 2002 from a loss of $44.7 million in 2001. This
increase was primarily due to higher polyethylene margins, higher styrene
margins, higher polyethylene sales volumes and higher utilization rates in
polyethylene and styrene. Polyethylene margins were higher in 2002 due to
decreased raw material costs as compared to 2001 levels. Styrene margins were
higher in 2002 due to price increases and lower raw material costs. Increased
utilization rates resulted from increased demand for ethylene, polyethylene and
styrene. Operating costs were lower due to cost cutting measures, primarily a
reduction in force initiated in 2002. These improvements were partially offset
by an outage at one of our ethylene units due to a fire resulting in 44 days of
downtime in the first quarter of 2002. Our second ethylene unit was operating at
reduced rates for the first half of 2002 due to furnace metallurgical failures,
which were subsequently resolved.

Vinyls Segment

Net Sales. Net sales increased by $18.8 million, or 4.1%, to $474.1
million in 2002 from $455.3 million in 2001. This increase was due to higher
prices for PVC pipe, PVC resin, VCM and ethylene co-products and higher sales
volumes for PVC pipe, VCM, caustic and ethylene co-products. These increases
were partially offset by lower PVC fence prices, lower caustic prices, lower PVC
resin volumes and lower caustic trading volumes. Caustic sales volumes increased
by 80.0 million pounds, or 23.4%, to 422.0 million pounds, primarily due to our
expansion of our chlor-alkali facility that started up in the second quarter of
2002.

Income (Loss) from Operations. Income (loss) from operations increased by
$43.4 million to $10.5 million in 2002 from a loss of $32.9 million in 2001.
This increase was due to higher prices for fabricated products and PVC resin
prices combined with lower raw material costs for propane and chlorine and
higher utilization rates for the PVC pipe, PVC fence, PVC, VCM and chlor-alkali
plants. The higher profit margins and utilization rates were primarily due to
the impact of increased demand for our Vinyls products as a result of a more
favorable environment for construction spending as interest rates fell
throughout 2002. As a result of the improved demand, the industry was able to
institute several price increases during 2002. The chlor-alkali plant was
converted to membrane technology beginning in 2001. This project was completed
and brought on line in the second quarter of 2002. This conversion positively
affected income (loss) from operations due to an approximate 25% reduction in
per unit energy cost and higher chlorine and caustic soda production. Our VCM
and ethylene plants underwent de-bottlenecking during 2001, which reduced
overall operating costs. The benefit of these lower operating costs were not
fully realized until 2002.

2001 COMPARED WITH 2000

Net Sales. Net sales decreased by $304.4 million, or 21.9%, to $1,087.0
million in 2001 from $1,391.4 million in 2000. Lower 2001 net sales were
primarily due to price decreases throughout our Olefins and Vinyls segments and
lower ethylene and polyethylene sales volumes, partially offset by higher sales
volumes of PVC pipe and fence, PVC resin and VCM. Ethylene and polyethylene
prices and sales volumes decreased in 2001 due to reduced demand as a result of
a general economic slowdown and large capacity additions in the industry in 2000
and 2001. Lower prices in Vinyls were primarily the result of the general
economic slowdown.

Gross Margin. Gross margin decreased to a negative 3.2% in 2001 from a
positive 13.8% in 2000. This decrease was primarily due to price decreases,
partially offset by lower raw material costs of ethane and propane. A general
slowdown in the economy, energy price spikes and large capacity additions in
ethylene and polyethylene all contributed to lower utilization rates and profit
margins.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased by $8.7 million, or 14.0%, in 2001 compared
with 2000. The decrease was a result of decreases in consulting and legal
expenses of $1.9 million, in depreciation and amortization of $1.2 million, in
contract labor costs of $1.0 million, in provision for doubtful accounts of $1.0
million and in other selling, general and administrative expenses of $3.6
million.

Impairment of Long-Lived Assets. Impairment of long-lived assets decreased
to $7.7 million in 2001 from $10.8 million in 2000. The 2001 impairment included
a $3.2 million write-down to fair market value of idled assets held for sale and
$4.4 million related to computer software and fixed assets. The 2000 impairment
included a $10.8 million write-down to fair market value of idled assets.

Interest Expense. Interest expense did not materially change from 2000 to
2001.

Income Taxes. The effective income tax rate increased to 38.2% in 2001
from 34.2% in 2000. Our 2000 income tax provision was based on alternative
minimum tax. Alternative minimum tax did not apply in 2001 and the higher
regular federal rate was used.

Olefins Segment

Net Sales. Net sales before intersegment eliminations decreased by $240.6
million, or 26.5%, to $665.7 million in 2001 from $906.3 million in 2000. This
decrease resulted from price decreases in polyethylene, styrene and ethylene and
lower sales volumes in polyethylene, ethylene and ethylene co-products. As
reported by CMAI, in 2001, ethylene spot prices decreased by 21.1% to 21.4 cents
per pound, LDPE prices decreased by 7.9% to 42.8 cents per pound, LLDPE prices
decreased by 9.6% to 34.8 cents per pound and styrene spot prices decreased by
37.2% to 21.9 cents per pound. Polyethylene sales volumes in 2001 decreased 136
million pounds, or 11.3%, and ethylene sales volumes in 2001 fell by 14.8%, in
each case from 2000 levels, due to a weaker U.S. economy, lower market demand
and significant capacity additions in the industry. These lower sales prices and
sales volumes were partially offset by higher styrene sales volumes resulting
from increased trading volumes in 2001.

Income (Loss) from Operations. Income (loss) from operations decreased by
$138.9 million to a loss of $44.7 million in 2001 from income of $94.3 million
in 2000. The decrease was due to lower product prices and margins in ethylene,
polyethylene and styrene and lower utilization rates and sales volumes in
ethylene and polyethylene. Utilization rates were also lower in styrene, while
sales volumes were higher due to higher trading volumes. Ethylene and
polyethylene demand and utilization rates fell in 2001 due to a global economic
downturn and energy price spikes early in 2001. Ethylene and polyethylene
utilization rates were also impacted by large capacity additions in 2000 and
2001. Styrene profit margins fell in 2001 due to the weak economy and lower
production at our styrene facility. The lower production was replaced with
styrene purchased for resale.

Vinyls Segment

Net Sales. Net sales decreased by $72.4 million, or 13.7%, to $455.3
million from $527.7 million in 2000. This decrease was primarily due to lower
prices for PVC pipe and fence, PVC resin, VCM and ethylene co-products and was
partially offset by higher sales volumes of PVC pipe and fence, PVC resin and
VCM. As reported by CMAI, in 2001, PVC resin prices decreased by 14.3% to 31.4
cents per pound. Our PVC pipe prices fell by an average of 32.3% in 2001
compared with 2000. These price decreases were the result of a general slowdown
in the global economy and declining demand for these products.

Income (Loss) from Operations. Income (loss) from operations decreased by
$76.9 million to a loss of $32.9 million in 2001 from income of $44.0 million in
2000. This decrease was due to lower prices for PVC pipe and fence, PVC resin,
VCM and ethylene co-products, primarily propylene and aromatics, and was only
partially offset by lower raw material cost for propane, ethylene and chlorine.
Product demand fell in 2001 due to the global economic downturn, resulting in
lower prices and margin pressure. Income (loss) from operations was also
negatively impacted in 2001 due to de-bottlenecking projects at the propane
ethylene cracking facility and the VCM plant.

CASH FLOW DISCUSSION

OPERATING ACTIVITIES

First Six Months of 2003 and 2002. Operating activities generated cash of
$25.2 million in the first six months of 2003 compared to net cash used of $43.9
million in the same period in 2002. The $69.1 million improvement in operating
cash flow was primarily due to improvements in income (loss) from operations, as
described above, and favorable changes in working capital. Income from
operations increased by $53.6 million in the first six months of 2003 as
compared to the first six months of 2002. Changes in components of working
capital, which we define for purposes of this cash flow discussion as accounts
receivable, inventories, prepaid expenses, and other current assets less
accounts payable and accrued liabilities, used cash of $32.6 million in the
first six months of 2003, compared to $51.4 million net cash used in the first
six months of 2002, an improvement of $18.8 million. In the first six months of
2003, receivables increased by $21.2 million, primarily due to higher average
selling prices and inventory increased by $37.4 million due to production
increases and higher feedstock and energy prices. The resulting effect on
operating cash flow was offset by a $17.6 million increase in accounts payable
and
35

accrued liabilities, primarily due to higher energy and feedstock costs. An $8.3
million reduction in prepaid expenses in the first six months of 2003 was
related to feedstock purchases in the fourth quarter of 2002. The primary reason
for the $43.9 million use of cash in the first six months of 2002 was a $53.8
million increase in receivables, partially offset by slightly lower inventories
and higher accrued liabilities. The increase in receivables was due to higher
average selling prices and sale volumes throughout our Olefins and Vinyls
segments.

2002, 2001 and 2000. Operating activities used cash of $29.7 million in
2002, compared to cash provided of $28.5 million in 2001 and $172.3 million in
2000. The $58.2 million decrease in operating cash flow in 2002 as compared to
2001 was primarily due to changes in working capital components. Changes in
working capital components used $93.2 million of cash in 2002 and provided $62.2
million of cash in 2001. In 2002, accounts receivable increased by $52.2 million
due to higher product sales, decreased utilization of our receivables
securitization facility and higher product prices in the fourth quarter of 2002.
Inventory increased by $42.6 million in 2002 due to both higher raw material
prices and purchases made at year-end in anticipation of rising prices. Prepaid
expenses increased in 2002 by $11.8 million as a result of prepaid feedstock
purchases. In 2002, accounts payable increased by $14.5 million, primarily due
to increased inventory levels.

Operating cash flow decreased by $143.8 million in 2001 as compared to
2000, primarily due to a $215.6 million decrease in income (loss) from
operations. The cash flow impact from the decrease in income (loss) from
operations was partially offset by a $62.2 million decrease in working capital
components. Changes in working capital components provided $62.2 million of cash
in 2001 compared to cash used of $3.7 million in 2000. Lower prices and sales
volume in 2001 resulted in lowered working capital requirements. Accounts
receivable were $29.7 million lower than 2000 and inventories decreased by $77.0
million. Partially offsetting the positive impact of the lower receivables and
inventory was a $29.9 million increase in accounts payable and a $15.0 million
increase in accrued liabilities.

INVESTING ACTIVITIES

First Six Months of 2003 and 2002. Net cash used in investing activities
was $15.7 million in the first six months of 2003 as compared to $19.8 million
in the first six months of 2002. Capital spending in the first six months of
2003 of $19.0 million related to normal maintenance, safety and environmental
projects. These expenditures were offset by $3.3 million of insurance proceeds.
Capital spending in the first six months of 2002 of $21.4 million was related to
maintenance, safety and environmental projects and the completion of the
conversion of the Calvert City chlorine plant from mercury cell to membrane
technology. These expenditures were offset by $1.7 million of insurance
proceeds.

2002, 2001 and 2000. Net cash used in investing activities was $33.7
million in 2002 as compared to $76.5 million in 2001 and $87.7 million in 2000.
As a result of the chemical industry downturn in 2001 and the first half of
2002, we limited our 2002 capital expenditures to primarily maintenance,
environmental and safety related projects. Total 2002 capital spending was $38.6
million, before a $4.9 million insurance reimbursement for replacement of
equipment destroyed by a fire at the Lake Charles plant. In 2001 and 2000,
capital expenditures included normal maintenance, environmental and safety
expenditures of $29.0 million and $39.0 million, respectively. In 2000, we
acquired a window fabrication business for $8.8 million. The remainder of the
capital expenditures of $47.5 million in 2001 and $39.9 million in 2000
primarily related to the conversion of the Calvert City chlorine plant to
membrane technology, the debottlenecking of the Calvert City ethylene and VCM
plants and the expansion of one of our fabricated products pipe plants.

FINANCING ACTIVITIES

First Six Months of 2003 and 2002. Net cash used by financing activities
during the first six months of 2003 was $10.0 million as we were able to use
part of the cash generated from operating activities to repay debt. The equity
contribution from the parent relates to cash contributed with the stock of GVGP,
Inc. and Geismar Holdings, Inc. in April 2003. Net cash used by financing
activities during the first six

months of 2002 was $5.0 million. In the first six months of 2002, we used
available cash to fund operating needs and repay $5.0 million of debt.

2002, 2001 and 2000. Financing activities used cash of $5.6 million in
2002, compared to net cash provided by financing activities of $118.8 million in
2001 and net cash used by financing activities of $85.0 million in 2000. During
2002, our debt decreased $5.6 million despite cash requirements for operating
activities of $29.7 million and investing activities of $33.7 million as we used
available cash of $68.9 million for those purposes. In 2001, debt increased by
$118.8 million which, together with net cash from operating activities of $28.5
million, provided the cash to fund investing activities of $76.5 million and to
increase cash balances by $70.7 million. In 2000, debt decreased $68.0 million
as cash generated from operating activities was sufficient to cover the debt
reduction, investing requirements of $87.7 million, as well as paying a dividend
of $17.0 million to our parent company.

In June 2002, we concluded negotiations with our existing lenders to change
the maturity date to March 2005 for our then-existing revolving credit facility,
term loan, series A and Series B notes and letter of credit support. As part of
the agreement, we repaid a total of $20.0 million of principal, retroactive
interest of $5.1 million and fees of $9.6 million, of which $9.4 million was
capitalized and amortized over the term of the amended agreements. In 2001, we
repaid $21.3 million of our outstanding notes and $20.0 million of our term
loan. In 2000, we repaid $10.0 million of our term loan.

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY AND FINANCING ARRANGEMENTS

Our principal sources of liquidity are from cash and cash equivalents, cash
from operations and short-term borrowings under our revolving credit facility.
In addition, we have received equity contributions from our parent company from
time to time.

CASH

Cash balances were $9.6 million at June 30, 2003 compared to $10.3 million
at June 30, 2002. Cash balances were $8.3 million, $79.0 million and $10.1
million at December 31, 2000, 2001 and 2002, respectively. We believe the June
30, 2003, December 31, 2002 and June 30, 2002 cash levels are representative of
balances required to fund our short-term requirements at quarter end and year
end. However, the $79.0 million balance at December 31, 2001 was higher in order
to provide us with additional liquidity because we agreed with our lenders to
suspend borrowings under our revolver in connection with the debt restructuring
that we completed in June 2002.

DEBT

Our current debt structure is used to fund our business operations, and our
revolving credit facility is a source of liquidity. As of June 30, 2003, we had
outstanding long-term debt of $495.5 million, including current maturities of
$1.2 million, consisting of $208.8 million principal amount of our Series A and
Series B notes, $161.5 million of borrowings under our $291.6 million revolving
credit agreement, $114.0 million of borrowings under our term loan, $10.9
million loan from the proceeds of tax-exempt revenue bonds (supported by an
$11.3 million letter of credit) and $0.3 million of other debt. The Series A and
Series B notes bore interest at 9.5% per year. Debt outstanding under the credit
agreement and the term loan bore interest at variable rates.

On July 31, 2003, we completed a refinancing of substantially all of our
outstanding long-term debt. We used net proceeds from the refinancing of
approximately $507.4 million to:

- repay in full all outstanding amounts under our existing revolving
credit facility, term loan and 9.5% Series A and Series B notes,
including accrued and unpaid interest, fees and a $4.0 million
make-whole premium to the noteholders; and

- provide $2.4 million in cash collateral for outstanding letter of credit
obligations of $2.2 million.

In conjunction with the refinancing, we terminated our accounts receivable
securitization facility by repurchasing all accounts receivable previously sold
to our unconsolidated accounts receivables securitization subsidiary. No gain or
loss was recognized as a result of the accounts receivable repurchase. We also
obtained a $12.4 million letter of credit to secure our obligations under a
letter of credit reimbursement agreement related to outstanding tax-exempt
bonds. As a result of the refinancing, we will recognize $11.3 million in
non-operating expense in the third quarter of 2003 consisting of the $4.0
million make-whole premium and a write-off of $7.3 million in previously
capitalized debt issuance expenses.

The refinancing consisted of:

- $380.0 million in aggregate principal amount of privately placed 8 3/4%
senior notes due 2011;

- $120.0 million senior secured term loan due in 2010; and

- $21.0 million in borrowings under a $200.0 million senior secured
working capital revolving credit facility due in 2007.

We incurred approximately $13.6 million in costs associated with the
refinancing that will be capitalized and amortized over the term of the new
debt. Please read "Description of Certain Indebtedness" and "Description of
Notes."

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

In addition to long-term debt, we are required to make payments relating to
various types of obligations. The following table summarizes our minimum
payments as of December 31, 2002 relating to long-term debt, unconditional
purchase obligations and operating leases for the next five years and
thereafter, after giving effect to the refinancing transaction described above.

<Table>
<Caption>
TOTAL 2003 2004-2005 2006-2007 THEREAFTER
------ ----- --------- --------- ----------
(IN MILLIONS)

CONTRACTUAL OBLIGATIONS
Long-Term Debt....................... $506.4 $ 0.6 $ 2.7 $ 2.4 $500.7
Operating Leases..................... 116.7 18.1 28.2 20.5 49.9
Unconditional Purchase Obligations... 71.1 9.6 16.4 14.7 30.4
------ ----- ----- ----- ------
$694.2 $28.3 $47.3 $37.6 $581.0
====== ===== ===== ===== ======
OTHER COMMERCIAL COMMITMENTS
Standby Letters of Credit............ $ 13.5 -- $13.5 -- --
====== ===== ===== ===== ======
</Table>

Long-Term Debt. Long-term debt amortization is based on the terms of the
refinanced debt. Please read the discussion above under "-- Debt" and the
description of the new credit facility and term loan under "Description of
Certain Indebtedness."

Operating Leases. We lease various facilities and equipment under
noncancelable operating leases for various periods.

Unconditional Purchase Obligations. We are party to various unconditional
obligations to purchase products and services primarily including commitments to
purchase nitrogen, waste water treatment services and pipeline usage.

Standby Letters of Credit. This includes (1) our obligation under a $11.3
million letter of credit issued in connection with the $10.9 million tax-exempt
revenue bonds and (2) other letters of credit totaling $2.2 million issued to
support obligations under our insurance programs, including for workers'
compensation claims.

Our ability to make payments on and to refinance our indebtedness,
including the notes offered by this prospectus, and to fund planned capital
expenditures will depend on our ability to generate cash in the future. This, to
a certain extent, is subject to general economic, financial, competitive,
legislative,

regulatory and other factors that are beyond our control. Based on our current
level of operations, we believe our cash flow from operations, available cash
and available borrowings under our new credit facility will be adequate to meet
our future liquidity needs.

We cannot assure you, however, that our business will generate sufficient
cash flow from operations, that currently anticipated cost savings and operating
improvements will be realized on schedule or that future borrowings will be
available to us under our new credit facility in an amount sufficient to enable
us to pay our indebtedness, including the notes offered by this prospectus, or
to fund our other liquidity needs. We may need to refinance all or a portion of
our indebtedness, including the notes, on or before maturity. We cannot assure
you that we will be able to refinance any of our indebtedness, including our new
credit facility and the notes, on commercially reasonable terms or at all.

RECEIVABLES SECURITIZATION

Prior to the July 2003 refinancing transactions described above, we sold
trade receivables to Westlake AR Corporation ("WARC"), a wholly owned,
non-consolidated subsidiary. WARC, in turn, had an agreement with an independent
issuer of receivables-backed commercial paper under which it sold receivables
and received cash proceeds of up to $49.5 million. The proceeds received from
this accounts receivables securitization facility effectively reduced our debt.
The amount of proceeds we received varied depending on a number of factors,
including the availability of receivables, the credit and aging of the
receivables, concentration of credit risk and our utilization of the facility.
As of June 30, 2003 and 2002, the balance of our accounts receivable sold and
the facility was $9.0 million and $31.9 million, respectively. The balance as of
December 31, 2002, 2001 and 2000 was $15.1 million, $38.0 million, and $49.1
million, respectively. Immediately prior to the July 2003 refinancing, we
repurchased all accounts receivable sold to WARC and terminated the
securitization facility.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those that are important to our financial
condition and require management's most difficult, subjective, or complex
judgments. Different amounts would be reported under different operating
conditions or under alternative assumptions. We have evaluated the accounting
policies used in the preparation of the accompanying consolidated financial
statements and related notes and believe those policies are reasonable and
appropriate.

We apply those accounting policies that we believe best reflect the
underlying business and economic events, consistent with accounting principles
generally accepted in the United States. Our more critical accounting policies
include those related to long-lived assets, accruals for long-term employee
benefits, transfer of financial assets, inventories and environmental and legal
obligations. Inherent in such policies are certain key assumptions and
estimates. We periodically update the estimates used in the preparation of the
financial statements based on its latest assessment of the current and projected
business and general economic environment. Our significant accounting policies
are summarized in note 1 to the accompanying audited consolidated financial
statements. We believe the following to be our most critical accounting policies
applied in the preparation of our financial statements.

Long-Lived Assets. Key estimates related to long-lived assets include
useful lives, recoverability of carrying values and existence of any retirement
obligations and such estimates could be significantly modified. The carrying
values of long-lived assets could be impaired by new technological developments,
new chemical industry entrants with significant raw material or other cost
advantages, uncertainties associated with the U.S. and world economies, the
cyclical nature of the chemical and refining industries and uncertainties
associated with governmental actions.

We defer the costs of turnaround maintenance and repair activities and
amortize the costs over the period until the next expected major turnaround of
the affected unit. During 2002, 2001 and 2000, cash expenditures of $16.3
million, $12.9 million and $8.0 million, respectively, were deferred and are
being amortized, generally over three to five year periods. Amortization in
2002, 2001 and 2000 of previously deferred turnaround costs was $5.0 million,
$3.2 million and $2.6 million, respectively.
39

The estimated useful lives of long-lived assets range from three to 25
years. Depreciation and amortization of these assets, including amortization of
deferred turnaround costs, under the straight-line method over their estimated
useful lives totaled $86 million, $82 million and $79 million in 2002, 2001 and
2000, respectively. If the useful lives of the assets were found to be shorter
than originally estimated, depreciation charges would be accelerated.

We periodically evaluate long-lived assets for potential impairment
indicators. Our judgments regarding the existence of impairment indicators are
based on legal factors, market conditions and the operational performance of our
businesses. Actual impairment losses incurred could vary significantly from
amounts estimated. Additionally, future events could cause us to conclude that
impairment indicators exist and that associated long-lived assets of our
businesses are impaired. Any resulting impairment loss could have a material
adverse impact on our financial condition and results of operations.

Additional information concerning long-lived assets and related
depreciation and amortization appears in note 5 to the accompanying audited
consolidated financial statements.

Long-Term Employee Benefit Costs. Our costs for long-term employee
benefits, particularly pension and postretirement medical and life benefits, are
incurred over long periods of time and involve many uncertainties over those
periods. The net periodic benefit cost attributable to current periods is based
on several assumptions about such future uncertainties, and is sensitive to
changes in those assumptions. It is our responsibility, often with the
assistance of independent experts, to select assumptions that represent the best
estimates of those uncertainties. It is also our responsibility to review those
assumptions periodically and, if necessary, adjust the assumptions to reflect
changes in economic or other factors.

Accounting for employee retirement plans involves estimating the cost of
benefits that are to be provided in the future and attempting to match, for each
employee, that estimated cost to the period worked. To accomplish this, we rely
extensively on advice from actuaries and assumptions are made about inflation,
investment returns, mortality, employee turnover and discount rates that
ultimately impact amounts recorded. While we believes that the amounts recorded
in the accompanying consolidated financial statements related to these
retirement plans are based on the best estimates and judgments available, the
actual outcomes could differ from these estimates.

Additional information on the key assumptions underlying these benefit
costs appears in note 11 to the accompanying audited consolidated financial
statements.

Transfers of Financial Assets. We account for the transfers of financial
assets, including transfers to a Qualified Special Purpose Entity, or QSPE, in
accordance with Statement of Financial Accounting Standards ("SFAS") 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities. In accordance with SFAS 140, we recognize transfers of financial
assets as sales provided that control has been relinquished. Control is deemed
to be relinquished only when all of the following conditions have been met: (1)
the assets have been isolated from the transferor, even in bankruptcy or other
receivership (true sale opinions are required); (2) the transferee has the right
to pledge or exchange the assets received and (3) the transferor has not
maintained effective control over the transferred assets (e.g., a unilateral
ability to repurchase a unique or specific asset). We are also required to
follow the accounting guidance under SFAS 140 and Emerging Issues Task Force
("EITF") Topic D-14, Transactions Involving Special-Purpose Entities, to
determine whether or not an special purpose entity is required to be
consolidated.

Our transfers of financial assets relate to securitization transactions
with a special purpose entity, or SPE, meeting the SFAS 140 definition of a
QSPE. A QSPE can generally be described as an entity with significantly limited
powers that are intended to limit it to passively holding financial assets and
distributing cash flows based upon established terms. Based upon the guidance in
SFAS 140, we are not required to and do not consolidate our QSPE. Rather, we
account for involvement with our QSPE under a financial components approach in
which we recognize only our retained interest in assets transferred to the QSPE.
We account for such retained interests at fair value with changes in fair value
reported in earnings.

As discussed under "-- Liquidity and Capital Resources -- Receivables
Securitization," we terminated our securitization facility in conjunction with
our refinancing transaction.

Inventories. Inventories primarily include product, materials and
supplies. Inventories are stated at lower of cost or market. Cost is determined
using the first-in, first-out, or FIFO, method.

Environmental and Legal Obligations. We consult with various professionals
to assist us in making estimates relating to environmental costs and legal
proceedings. We accrue an expense when we determine that it is probable that a
liability has been incurred and the amount is reasonably estimable. While we
believe that the amounts recorded in the accompanying consolidated financial
statements related to these contingencies are based on the best estimates and
judgments available, the actual outcomes could differ from our estimates. See
note 16 to the accompanying audited consolidated financial statements.

ACCOUNTING CHANGES

Effective January 1, 2002, we implemented SFAS 141, Business Combinations,
SFAS 142, Goodwill and Other Intangible Assets, and SFAS 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. On January 1, 2003, we implemented
SFAS 143, Accounting for Obligations Associated with the Retirement of
Long-Lived Assets and SFAS 145, Rescission of FASB Statements No. 4, 44 and 64,
Amendment of FASB Statement No. 13 and Technical Corrections. Implementation of
SFAS 141, SFAS 142, SFAS 143, SFAS 144 and SFAS 145 did not have a material
effect on our consolidated financial statements.

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2002, the FASB issued SFAS 143, Accounting for Obligations
Associated with the Retirement of Long-Lived Assets. This statement requires:
(a) an existing legal obligation association with the retirement of a tangible
long-lived asset must be recognized as a liability when incurred and the amount
of the liability be initially measured at fair value, (b) an entity must
recognize subsequent changes in the liability that result from the passage of
time and revisions in either the timing or amount of estimated cash flows and
(c) upon initially recognizing a liability for an asset retirement obligation,
an entity must capitalize the cost by recognizing an increase in the carrying
amount of the related long-lived asset. SFAS 143 will be effective for financial
statements issued for fiscal years beginning after June 15, 2002. As of December
31, 2002, we did not have legal or contractual obligations to close any of our
facilities. Our adoption of SFAS 143 on January 1, 2003 did not have a material
impact on our consolidated results of operations, cash flows or financial
position.

In October 2002, the FASB issued SFAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. This statement supersedes SFAS 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
of. SFAS 144 provides that long-lived assets that are to be disposed of by sale
be measured at the lower of book value or fair value less cost to sell. The
provisions of SFAS 144 are effective for fiscal years beginning after December
15, 2001. Our adoption of SFAS 144 on January 1, 2002 did not have a material
impact on our consolidated results of operations, cash flows or financial
position.

In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections. SFAS
145 rescinds SFAS 4, Reporting Gains and Losses from Extinguishment of Debt. By
rescinding SFAS 4, gains or losses from extinguishment of debt that do not meet
the criteria of APB No. 30 should not be reported as an extraordinary item and
should be reclassified to income from continuing operations in all periods
presented. APB No. 30 states that extraordinary items are events and
transactions that are distinguished by their unusual nature and by the
infrequency of their occurrence. SFAS 145 is effective for fiscal years
beginning after May 15, 2002. Our adoption of SFAS 145 on January 1, 2003 did
not have a material impact on our consolidated results of operations, cash flow
or financial position. As discussed under "-- Liquidity and Capital
Resources -- Debt," we completed a refinancing of substantially all of our
outstanding long-term debt on July 31, 2003. As a result of the refinancing, we
will recognize $11.3 million in non-operating
41

expense in the third quarter of 2003, consisting of the $4.0 million make-whole
premium and $7.3 in previously capitalized debt issuance costs.

In June 2002, the FASB issued SFAS 146, Accounting for Costs Associated
with Exit or Disposal Activities. SFAS 146 addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies
EITF Issue No. 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring). SFAS 146 requires that a liability for a cost associated
with an exit or disposal activity be recognized when the liability is incurred.
Under EITF Issue 94-3, a liability for an exit cost as defined in EITF Issue
94-3 was recognized at the date of an entity's commitment to an exit plan. The
provisions of SFAS 146 are effective for exit or disposal activities initiated
after December 31, 2002, with early application encouraged. Previously issued
financial statements shall not be restated upon adoption of SFAS 146. Our
management believes that this statement will not have a material impact on our
consolidated results of operations, cash flow or financial position.

In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, an interpretation of FASB
Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34. FIN
45 clarifies the requirements of SFAS 5, Accounting for Contingencies, relating
to the guarantor's accounting for, and disclosure of, the issuance of certain
types of guarantees. FIN 45 requires that upon issuance of a guarantee, the
entity (i.e., the guarantor) must recognize a liability for the fair value of
the obligation it assumes under that guarantee, including the cases in which the
entity does not receive separately identifiable consideration (i.e., a premium)
for issuing the guarantee. FIN 45 is intended to improve the comparability of
financial reporting by requiring identical accounting for guarantees issued with
a separately identified premium and guarantees issued without a separately
identified premium. The disclosure provisions of FIN 45 are effective for
financial statements of interim or annual periods that end after December 15,
2002. However, the provisions for initial recognition and measurement are
effective on a prospective basis for guarantees that are issued or modified
after December 31, 2002, irrespective of a guarantor's year-end. In accordance
with the provisions of FIN 45, we will recognize the fair value of the
guarantees issued as modified after December 31, 2002.

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, Consolidation of Variable Interest Entities. This
interpretation provides new consolidation accounting guidance for entities
involved with SPEs and will replace the guidance provided by EITF Topic D-14.
Interpretation 46 does not impact accounting for securitizations transacted
through QSPEs. Interpretation 46 will require a primary beneficiary, defined as
an entity, that participates in either a majority of the risks or rewards of a
SPE, to consolidate the SPE. A SPE would not be subject to this interpretation
if the entity has sufficient voting equity capital (presumed to require a
minimum of 10%) so that the entity is able to finance its activities without
additional subordinated financial support from other parties. While we have not
yet completed our analysis of the impact of the new interpretation, we do not
anticipate that the adoption of this interpretation will have a material impact
on our consolidated results of operations, cash flows or financial position.

In March 2003, the FASB issued SFAS 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS 149 amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities
under SFAS 133, "Accounting for Derivative Instruments and Hedging Activities."
SFAS 149 will be effective for contracts entered into, modified or designated as
hedges after June 30, 2003. We have adopted this standard as of July 1, 2003 and
do not expect it to have a significant effect on our consolidated results of
operations, cash flows or financial position.

In May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." This statement
improves the accounting for certain financial instruments that, under previous
guidance, issuers could account for as equity and requires that those
instruments be classified as liabilities in statements of financial position.
This statement will be

effective for all financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. We will adopt SFAS 150 as of July 1, 2003 and do
not expect it to have a significant effect on our consolidated results of
operations, cash flows or financial position.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

COMMODITY PRICE RISK

A substantial portion of our products and raw materials are commodities
whose prices fluctuate as market supply and demand fundamentals change.
Accordingly, product margins and the level of our profitability tend to
fluctuate with changes in the business cycle. We try to protect against such
instability through various business strategies. Generally, our strategy is to
limit our exposure to price variances by locking in prices for future purchases
and sales. Our strategies also include ethylene product feedstock flexibility
and moving downstream into the olefins and vinyls products where pricing is more
stable. We use derivative instruments in certain instances to reduce price
volatility risk on feedstocks and products. Based on our open derivative
positions at August 31, 2003, a hypothetical $1.00 increase in the price of an
mmbtu of natural gas would have decreased our income before taxes by $0.6
million and a hypothetical $0.10 increase in the price of a gallon of propane
would have increased our income before taxes by $0.6 million. Additional
information concerning derivative commodity instruments appears in note 6 to the
accompanying unaudited consolidated financial statements.

INTEREST RATE RISK

We are exposed to interest rate risk with respect to variable rate debt. At
December 31, 2002, we had variable rate debt of $297.6 million outstanding, and
at June 30, 2003, we had variable rate debt of $286.7 million outstanding. All
except for $0.3 million of this debt was repaid with proceeds from the
refinancing transactions described above under "-- Liquidity and Capital
Resources -- Debt." All of the debt under the new credit facility and term loan
is at variable rates. We do not currently hedge our variable interest rate debt,
but we may do so in the future. The average variable interest rate for our
variable rate debt of $130.9 million as of August 31, 2003 was 4.6%. A
hypothetical 100 basis point increase in interest rates would increase our
annual interest expense by $1.3 million.

INDUSTRY OVERVIEW

SUMMARY

Olefins and vinyl products are some of the key building blocks of the
petrochemical industry and primarily include ethylene, chlorine and their
derivative products. Olefins, including ethylene, polyethylene and styrene, are
used in the manufacture of a wide range of consumer non-durable plastics and
films including flexible and rigid packaging, as well as consumer durables and
industrial products including automotive products and coatings. Vinyls,
including chlorine, polyvinyl chloride (commonly referred to as PVC) and
fabricated products, are also used in a wide variety of applications, with
particular focus in the plastic pipe and construction industries. Demand for
these products has historically been driven by economic growth, with other key
factors being rising living standards in developing nations and the continued
substitution of plastics and synthetics for other materials. As a result, global
olefins and vinyl products demand has historically risen in excess of U.S. gross
domestic product.

Petrochemicals are typically manufactured in large volumes by a number of
different producers using widely available technologies. Changes in the balance
between supply and demand and the resulting operating rates, the level of
general economic activity and the price of raw materials all influence the
petrochemical industry cycle and margins. The cycle is characterized by periods
of tight supply, leading to high operating rates and peak margins, followed by a
decline in operating rates and margins primarily as a result of significant
capacity additions. Due to the significant size of new plants, capacity
additions are built in large increments and typically require several years of
demand growth to be absorbed. The industry is currently in a down cycle as a
result of significant new capacity additions in the past several years, combined
with soft demand resulting from the global economic slowdown. Currently, no
significant new olefins or vinyls capacity additions have been announced in
North America.

According to CMAI, industry fundamentals currently suggest a cyclical
recovery in the petrochemicals business beginning in 2005, with the next peak
expected to commence in 2006. Industry recovery is supported by limited new
capacity additions expected for these products in North America over the next
several years, and a number of producers have announced capacity shutdowns. CMAI
expects operating rates and margins to improve as demand recovers as a result of
improved global economic conditions.

OLEFINS

Ethylene. Ethylene is the most widely consumed petrochemical in the world,
with over 200 billion pounds used in 2002. It is a basic raw material for a
broad array of chemical products including: (1) polyethylene (in the form of
high density polyethylene, or HDPE, low density polyethylene, or LDPE, and
linear low density polyethylene, or LLDPE), which is used in numerous consumer
and industrial products, including trash bags, packaging film, toys, housewares
and plastic bottles; (2) ethylene dichloride, which is further processed into
PVC; (3) ethylbenzene, an intermediate chemical used in the production of
polystyrene, which is then used in packaging and containers; and (4) ethylene
oxide, which is used in the production of ethylene glycol, and further processed
into antifreeze, polyester fibers and resins. North America is the largest
consumer of ethylene, with an estimated 65 billion pounds consumed per annum, or
32% of world demand. The following chart below shows North American ethylene
consumption by end use.

2002 NORTH AMERICAN ETHYLENE CONSUMPTION BY END USE

(PIE CHART)

<Table>
<Caption>
PERCENTAGE
----------

Ethylbenzene................................................ 6%
Ethylene dichloride......................................... 13%
Ethylene oxide/ethylene glycol.............................. 13%
Polyethylene................................................ 56%
Other....................................................... 12%
</Table>

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

Source: CMAI.

Between 1990 and 2002, the global and North American compound annual growth
rates for ethylene demand were 4.2% and 2.4%, respectively. The world's 2002
ethylene capacity totaled approximately 240 billion pounds, with North American
capacity accounting for approximately 32% of the total. While significant new
ethylene capacity was built over the past several years, no major capacity
additions are expected in North America in the next three years, and it
typically takes three to four years to construct a new ethylene facility. The
North American ethylene industry has been altered by consolidation and alliances
among producers with the aggregate capacity share of the five largest North
American producers increasing.

Cash margins in the U.S. ethylene market reached a peak in 1995, with
operating rates increasing in response to both strong demand and limited
capacity additions. The 1996 to 1998 period was characterized by significant
capacity additions and lower demand due to the Asian crisis, resulting in lower
margins. As the world economy recovered in 1999 and 2000, demand for ethylene
improved, resulting in increased operating rates and margins. Operating rates
and margins declined dramatically by late 2000 and continued into 2002 due to
the impact of increased capacity from new plants, the sharp slowdown in the
economy and increased raw material costs. Through the first half of 2003,
significantly higher feedstock costs prompted dramatic price increases. Demand
was also higher than the prior year period, in part as a result of customer
orders that built inventory ahead of the anticipated price increases.

According to CMAI, ethylene industry fundamentals suggest a cyclical
recovery in ethylene prices and margins beginning in 2005, with the next peak
expected to commence in 2006. This recovery in the ethylene market is supported
by minimal new capacity additions expected in North America and significant
capacity shutdowns announced by a number of large producers. CMAI expects
operating rates and margins to improve as demand recovers due to improved global
economic conditions.

Polyethylene. Polyethylene is produced through the polymerization of
ethylene. There are three primary types of polyethylene: LDPE, HDPE and LLDPE.
LDPE is typically used in applications requiring flexibility and film clarity,
such as household bags and wraps. HDPE is a rigid plastic most commonly used for
blow molding in the manufacture of milk bottles, liquid detergent bottles,
industrial drums, bottles and gas tanks. LLDPE is a tough yet flexible plastic
with its major end use in cost-sensitive film applications such as stretch wrap,
trash can liners and injection molding applications, including housewares and
lids. Historically, polyethylene demand has grown at or above economic growth
rates, driven by the replacement of other materials with plastics. Between 1993
and 2002, North American LLDPE demand has grown at a compound annual growth rate
of 5.8%, followed by HDPE at 3.6%, while LDPE demand remained flat. The
following chart shows North American polyethylene consumption by end use.

2002 NORTH AMERICAN POLYETHYLENE CONSUMPTION BY END USE

(PIE CHART)

<Table>
<Caption>
PERCENTAGE
----------

Wire and cable.............................................. 2%
Rotomolding................................................. 3%
Extrusion coating........................................... 3%
Pipe and profile............................................ 7%
Injection molding........................................... 12%
Film and sheet.............................................. 40%
Blow molding................................................ 16%
Other....................................................... 17%
</Table>

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

Source: CMAI.

The world's 2002 polyethylene capacity totaled approximately 150 billion
pounds, with North America capacity accounting for 30% of the total. Over the
next three years, limited polyethylene capacity additions have been announced in
North America, with the lead-time to build a new plant typically around two
years. As with ethylene, the industry has been concentrated into fewer, larger
competitors in recent years.

U.S. operating rates held relatively steady from 1995 to 2000, benefiting
from strong economic activity balanced by modest capacity additions. Margins
moved from a cyclical peak in 1995 to trough conditions over the 1998 to 2000
period, as escalating feedstock costs were not fully recovered through price
increases. In early 2001, natural gas prices reached historic highs, while
demand declined through the year as a result of the weakened North American and
global economy. A modest improvement in demand, a reduction in feedstock costs
and the closure of some excess polyethylene capacity occurred in 2002, resulting
in marginally improved industry profitability. The first quarter of 2003 has
seen a dramatic increase in feedstock costs. Polyethylene producers have
generally been able to maintain margins through price increases despite the
higher feedstock costs.

Styrene. Styrene is used primarily in the production of polystyrene and is
also used to make styrene butadiene rubber, acrylonitrile-butadiene-styrene, or
ABS, styrene-acrylonitrile, or SAN, resins, styrene co-polymers, unsaturated
polyester resins, and other downstream chemical products. The following chart
shows 2002 North American styrene consumption by end use.

2002 NORTH AMERICAN STYRENE CONSUMPTION BY END USE

(PIE CHART)

<Table>
<Caption>
PERCENTAGE
----------

ABS/SAN..................................................... 7%
Expandable polystyrene...................................... 10%
Styrene butadiene rubber.................................... 12%
Polystyrene................................................. 56%
Other....................................................... 15%
</Table>

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

Source: CMAI.

Historically, styrene demand has grown in line with economic growth rates,
driven by the increased replacement of other materials with polystyrene. Between
1990 and 2002, North American styrene demand has grown at a compound annual
growth rate of 2.4%. The world's 2002 styrene demand totaled approximately 48
billion pounds, with North American demand accounting for 23% of the total. The
styrene industry is characterized by backward-integrated producers that produce
ethylene and benzene, as well as forward-integrated producers that produce
polystyrene and ABS.

Following peak cash margins in 1995, margins declined from 1996 to 1998 as
a result of modest demand growth combined with significant new capacity
additions. During 1999 and 2000, the styrene industry experienced an increase in
demand growth from developing regions and high utilization rates,
46

which, when combined with reducing feedstock costs, resulted in a strong
improvement in margins. During 2001, the North American manufacturing recession
significantly reduced demand while higher U.S. feedstock costs made North
American styrene less attractive to Asian buyers. Utilization rates in North
America dropped in 2001 and the industry's profitability level declined
significantly. During 2002, utilization rates rose due to the decrease of
capacity and a modest increase in demand, leading to higher profitability as
compared to 2001.

VINYLS

Chlorine and Caustic Soda. Chlorine and caustic soda are co-products
manufactured by breaking salt into its components through the application of
electric power. Chlorine and caustic soda are produced in a fixed ratio forming
what is commonly referred to as an electrochemical unit, or ECU. Electric power
is the most significant cost component in the production of chlorine and caustic
soda. Chlorine is used in a wide variety of chemical processes and products,
including those used to make plastics and PVC resins. Other applications include
the manufacture of propylene oxide and titanium dioxide, water purification and
pulp and paper bleaching. Caustic soda is used in the production of pulp and
paper, alumina, oil, textiles, soaps, detergents and a variety of other chemical
processes. The following charts show 2002 consumption of chlorine and caustic
soda by end use.

2002 NORTH AMERICAN CHLOR-ALKALI CONSUMPTION BY END USE

Chlorine

(PIE CHART)

<Table>
<Caption>
PERCENTAGE
----------

Epichlorohydrin........... 6%
Propylene oxide........... 10%
Ethylene dichloride....... 39%
Chlorinated
intermediates........... 10%
Other..................... 35%
</Table>

Caustic Soda

(PIE CHART)

<Table>
<Caption>
PERCENTAGE
----------

Alumina................... 3%
Water treatment........... 3%
Soaps, detergents and
textiles................ 12%
Inorganic chemicals....... 22%
Organic chemicals......... 23%
Pulp and paper............ 24%
Other..................... 13%
</Table>

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

Source: CMAI.

Between 1990 and 2002, global and North American chlorine demand has
increased at compound annual growth rates of 1.5% and 0.2%, respectively. In
North America, growth resulting from the increased demand for PVC resins and
propylene oxide has been offset by declining usage as a bleaching agent in pulp
and paper. Caustic soda supply has been driven by chlorine production, as the
two co-products are produced in a fixed ratio of 1.1 to 1, and historically,
there has been a large market for caustic soda at a given price due to its wide
variety of applications as a pH modifying agent.

There are generally three main processes for manufacturing chlorine: (1)
the mercury cell process, the oldest and highest cost technology, (2) the
diaphragm process and (3) the membrane process, the newest, lowest cost process.
North American chlorine capacity is approximately 34 billion pounds, and is made
up almost entirely of diaphragm and membrane technology. No new major chlorine
capacity expansions have been announced, and it typically takes two to three
years to build a new facility. As a result, when combined with increasing demand
of PVC and stable demand of pulp and paper, operating rates and margins are
expected to improve over the near to medium term.

While long-term growth has typically been driven by chlorine demand,
short-term demand fluctuations will cause chlorine and caustic soda prices
typically to move in opposite directions, with the "higher demand" product
dictating the premium price. As a result, manufacturers generally track pricing
on an ECU basis, which is essentially the combination of chlorine and caustic
soda prices. ECU prices reached a peak in 1995 at over $400 per ton, trending
down to a trough in 1999 to just over $200 per ton from weak but balanced demand
for both chlorine and caustic soda. The industry experienced a recovery in ECU
pricing in 2000 and early 2001, driven particularly by strong caustic soda
demand. Beginning in
47

late 2001 and into 2002, a significant decline in demand caused by the global
economic recession resulted in lower operating rates and ECU prices. Beginning
in late 2002 and into the first half of 2003, rising energy prices resulted in
dramatic increases in ECU prices, as producers have pushed to maintain margins.

PVC and VCM. PVC is a plastic resin manufactured from vinyl chloride
monomer (commonly referred to as VCM), which in turn is manufactured from
ethylene and chlorine. PVC resins are one of the most widely used plastics in
the world today, with estimated demand of 60.8 billion pounds globally, with
North America accounting for 26% of the total. Applications are diverse and
include pipe and fittings, window frames, siding, flooring, shower curtains,
packaging, bottles, film, medical tubing, business machine housings and credit
cards. The following chart shows 2002 consumption of PVC by end use.

2002 NORTH AMERICAN PVC CONSUMPTION BY END USE

(PIE CHART)

<Table>
<Caption>
PERCENTAGE
----------

Bottles..................................................... 1%
Wire and cable.............................................. 4%
Film and sheet.............................................. 14%
Profiles and tubes.......................................... 28%
Pipe and fittings........................................... 48%
Other....................................................... 5%
</Table>

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

Source: CMAI.

Between 1990 and 2002, North American PVC demand has increased at a
compound annual growth rate of 3.9%, driven by increased economic and
new/remodeling housing activity and the cost-effective replacement of metal and
other materials. Minimal announced capacity expansions are expected over the
next three years. The capacity additions are not, however, expected to keep up
with anticipated increases in demand. It typically takes one to two years to
build new capacity.

According to CMAI, PVC industry fundamentals suggest a cyclical recovery in
PVC prices and margins in 2004. This recovery in the PVC market is supported by
minimal new capacity additions expected in North America. CMAI expects operating
rates and margins to improve as demand recovers due to improved global economic
conditions.

After reaching peak margins in 1994 and 1995, margins declined in the 1996
to 1999 period due to the absorption of significant new capacity additions. The
industry experienced a significant decline in North American demand and
operating rates in 2000 and 2001. The industry experienced a return to growth
driven by the housing sector in 2002, and, when combined with modest new
capacity, producers were able to maintain operating rates and margins. The first
six months of 2003 has been characterized by increasing product prices driven by
feedstock cost increases, with PVC producers able to modestly improve margins.

Fabricated Products. Fabricated products manufactured from PVC resin
include pipe, siding, fence, deck, garden accessories and window and door
components. The construction building materials market is the largest consumer
of PVC-based fabricated products in North America due to PVC's durability, ease
of installation and low maintenance requirements.

Pipe fabricated from PVC resin is the largest market for PVC resin in North
America. PVC pipe is especially advantageous in more demanding applications,
proving itself as one of the more durable and reliable materials on the market
today. PVC pipe offers greater strength, lower installed cost, increased
corrosion resistance, lighter weight and longer service life when compared to
iron, steel and concrete alternatives. According to Chemical Data, Inc., the PVC
"Rigid Pipe and Tubing" market grew at a compound annual growth rate of 3.8%
from 1994 through 2002.

Windows and patio doors manufactured from PVC resin are more energy
efficient, less costly and easier to maintain than alternative products.
According to Chemical Data, Inc., the PVC "Windows and Doors" market grew at a
compound annual growth rate of 10.5% between 1994 and 2002.

Fence products manufactured from PVC resin feature low maintenance
materials and long product life. According to Pure Strategy, from 1996 through
2000, PVC fence demand more than doubled, growing from 3% of the total fence
market in 1996 to 7% of an estimated $4.9 billion market in 2000.

BUSINESS

OVERVIEW

We benefit from highly integrated production facilities that allow us to
process raw materials into higher value-added chemicals and fabricated products.
We have 8.1 billion pounds of active aggregate production capacity at 11
strategically located manufacturing plants in North America. We believe that
with our highly integrated capabilities, we are less affected by volatility in
product demand, have less exposure to the effects of cyclical raw material
prices and operate at higher capacity utilization rates than non-integrated
producers. In addition, the strategic location of our facilities lowers our
transportation costs due to our high level of internally consumed production. In
2002, we used 71% of our basic chemical production internally to produce higher
value-added chemicals and fabricated products for sale to external customers.

COMPETITIVE STRENGTHS

Vertically Integrated Operations. We operate in two vertically integrated
business segments and use the majority of our internally produced basic
chemicals to manufacture higher value-added chemicals and fabricated products.
We are one of the few fully integrated producers of vinyls and fabricated
products in North America. By operating integrated olefins and vinyls production
processes, we believe we are less susceptible to volatility in product demand,
have less exposure to the effects of cyclical raw material prices and are able
to operate at higher capacity utilization rates than non-integrated producers.
We have also been able to lower our transportation costs due to our high level
of internally consumed production. In 2002, we used almost 85% of our ethylene
production to manufacture polyethylene, styrene monomer and VCM. We also used
63% of our VCM production to manufacture PVC and 61% of our PVC production to
manufacture our fabricated products.

Efficient Modern Asset Base and Low Cost Operations. We operate some of
the industry's newest manufacturing facilities in North America and focus on
continually improving our asset portfolio and cost position. We have invested
approximately $1.2 billion since 1990 to construct new, state-of-the-art
facilities and to acquire and to upgrade acquired facilities and equipment in
both our Olefins and Vinyls segments. We built two ethylene crackers in Lake
Charles in 1991 and 1997, and constructed a gas-phase LLDPE/ HDPE plant in 1998.
In addition, we recently completed the technology conversion and upgrade of our
chlor-alkali facility at Calvert City, reducing per unit energy consumption by
approximately 25% and increasing capacity by 64%. These newer plants increase
operating efficiency and reduce our maintenance and environmental compliance
costs. Our ethylene plants allow us to choose between ethane, propane and butane
feedstocks. This flexibility enables us to react to changing market conditions
and reduce raw material costs. We continually focus on reducing costs throughout
our organization and believe that our selling, general and administrative costs,
as a percentage of net sales, of 5.5% for 2002 is one of the lowest in the
chemical industry. We eliminate research and development expenses by selectively
acquiring and licensing third-party proprietary technology as a cost-effective
approach to product development and production efficiency improvement.

Stable and Sustained Customer Relationships. We believe that our focus on
customer service strengthens customer loyalty during periods of lower demand,
leading to stability in down-cycles. We

estimate that 87% of our net sales in 2002 were made to the same customers we
had in 2000. Almost all of our 2002 net sales were to customers in the North
American market, limiting our exposure to the lower-margin export market.

OUR HISTORY

In the 1950s, the Chao family built the first PVC plant in Taiwan. During
the 1960s, they established what is now the China General Plastics Group of
companies. These companies include some of the leading publicly held
petrochemicals and plastic manufacturing companies in Asia. In 1990, the Chao
family founded the Titan Group, a joint venture with an investment holding
company owned by the Malaysian government. The Titan Group built and operates
Malaysia's first, and currently the largest, integrated polyolefins complex.

We began operations in 1986 after the Chao family acquired our first
polyethylene plant near Lake Charles, Louisiana from Occidental Petroleum
Corporation. We began our vinyls operations in 1990 with the acquisition of a
VCM plant in Calvert City, Kentucky from the Goodrich Corporation. In 1992, we
commenced our fabricated products operations after acquiring three PVC pipe
plants. Since 1986, we have grown rapidly into a leading integrated producer of
petrochemicals, polymers and fabricated products. We achieved this by acquiring
15 plants, constructing six new plants (including our PVC joint venture in
China) and completing numerous capacity or production line expansions.

OLEFINS BUSINESS

PRODUCTS

Olefins are the basic building blocks used to create a wide variety of
petrochemical products. We manufacture ethylene, polyethylene, styrene, and
associated co-products at our manufacturing facilities in Lake Charles,
Louisiana. We have two ethylene plants, two polyethylene plants and one styrene
monomer plant at our Lake Charles complex. The following table illustrates our
production capacities by principal product and the primary end uses of these
materials:

<Table>
<Caption>
PRODUCT ANNUAL CAPACITY END USES
- ------- -------------------- --------
(MILLIONS OF POUNDS)

Ethylene.......................... 2,300 Polyethylene, ethylene dichloride,
ethylbenzene, ethylene oxide/ethylene glycol
Low-Density Polyethylene.......... 850 High clarity packaging, shrink films, laundry
and dry cleaning bags, ice bags, frozen foods
packaging, bakery bags, coated paper board,
cup stock, paper, folding cartons, lids,
housewares, closures and general purpose
molding
Linear Low-Density and High-
Density Polyethylene............ 500 Heavy-duty films and bags, general purpose
liner (LLDPE); thin-walled food tubs,
housewares, pails, totes and crates (HDPE)
Styrene........................... 450 Disposables, packaging material, appliances,
paints and coatings, resins and building
materials
</Table>

Ethylene. Ethylene is the world's most widely consumed petrochemical in
terms of volume. It is the key building block used to produce a large number of
higher value-added chemicals including polyethylene, ethylene dichloride,
ethylbenzene and ethylene oxide. In 2002, we produced 1.9 billion pounds of
ethylene at our Lake Charles complex and consumed 84% of that production
internally to produce polyethylene and styrene monomer in our Olefins business
and to produce vinyl chloride monomer, or VCM, in our Vinyls business. We also
produce ethylene in our Vinyls segment at our Calvert City, Kentucky facilities,
all of which is consumed internally in the production of VCM. In addition, we
produce ethylene co-products including chemical grade propylene, crude
butadiene, pyrolisis gasoline and hydrogen. Together, these co-products
accounted for approximately 367 million pounds of our total 2002 production. We
sell our entire output of these co-products to third parties. We plan to start
up the ethylene dichloride portion of the Geismar facility in the fourth quarter
of 2003 and to use a portion of our Lake Charles ethylene production to produce
that ethylene dichloride.

Polyethylene. Polyethylene, the world's most widely consumed polymer, is
used in the manufacture of a wide variety of packaging, film, coatings and
molded product applications. Polyethylene is generally classified as either
low-density polyethylene, or LDPE, linear low-density polyethylene, or LLDPE, or
high-density polyethylene, or HDPE. The density correlates to the relative
stiffness of the products. The difference between LDPE and LLDPE is molecular,
and products produced from LLDPE are stronger than products produced from LDPE.
LDPE is used in end products such as bread bags, dry cleaning bags, food wraps
and milk carton and snack package coatings. LLDPE is used for higher film
strength applications such as stretch film and heavy duty sacks. LDPE and LLDPE
are also used in injection molded products such as tubs, containers and toys.
HDPE is used to manufacture products such as grocery, merchandise and trash
bags, plastic containers and plastic caps and closures.

We are the fourth largest producer of LDPE in North America and, in 2002,
we produced 765 million pounds of LDPE in 94 different formulations to meet the
needs of our diverse customer base. We also produced 323 million pounds of LLDPE
in 27 formulations and 167 million pounds of HDPE in 12 different formulations.
We produce the three primary types of polyethylene and sell them to third
parties as a final product in pellet form. We produce LDPE at one of our
polyethylene plants and have the

flexibility to produce both LLDPE and HDPE at the other polyethylene plant. This
flexibility allows us to maximize production of either HDPE or LLDPE depending
on prevailing market conditions.

Styrene. Styrene is used to produce polystyrene and synthetic rubber,
which are used in a number of applications including injection molding,
disposables, food packaging, housewares, paints and coatings, resins, building
materials and toys. We produce styrene at our Lake Charles plant and, in 2002,
we produced 416 million pounds of styrene, which we sold to external customers.

FEEDSTOCKS

We are highly integrated along our olefins product chain. We produce all of
the ethylene required to produce our polyethylene, styrene and VCM. Ethylene can
be produced from either petroleum liquid feedstocks, such as naphtha,
condensates and gas oils, or from natural gas liquid feedstocks, such as ethane,
propane and butane. One of our ethylene plants uses ethane as its feedstock and
the other can use ethane, ethane/propane mix, propane and, most recently,
butane, a heavier, naphtha-based feedstock. We continue to seek ways to minimize
our feedstock cost by increasing our ability to use alternative feedstocks. We
receive ethane, propane and butane at our Lake Charles facilities through
several pipelines from a variety of suppliers in Texas and Louisiana.

In addition to our internally supplied ethylene, we also require butene or
hexene to manufacture polyethylene and benzene to manufacture styrene. We
receive butene and hexene at the Lake Charles complex via rail car from five
primary suppliers. We receive benzene via pipeline pursuant to a supply contract
with a nearby supplier. The butene and the hexene contracts are renewable
annually. The benzene contract is also an annual agreement. Butene and hexene
are priced on either a formula basis or on a toll basis using our ethylene.
Under a typical tolling arrangement, we provide our ethylene to a third party
that processes it into the desired end product for a fee.

MARKETING, SALES AND DISTRIBUTION

We use the majority of our Lake Charles ethylene production in our
polyethylene, styrene and VCM operations. We sell the remainder to third
parties. In addition, we sell our ethylene co-products to third parties. Our
primary ethylene co-products are chemical grade propylene, crude butadiene,
pyrolisis gasoline and hydrogen. The majority of sales in our Olefins business
are made under agreements for one year or more. Contract volumes are established
within a range. The terms of these contracts are fixed for a period (typically
more than one year), although earlier termination may occur if the parties fail
to agree on price and deliveries are suspended for a period of several months.
In most cases, these contracts also contemplate extension of the term unless
terminated by one of the parties.

We typically ship our ethylene, propylene and hydrogen via a pipeline
system that connects our plants to numerous customers. We also have storage
agreements and exchange agreements that allow us access to customers who are not
directly connected to the pipeline system. We transport our polyethylene by rail
or truck and we move our styrene, crude butadiene and pyrolisis gasoline by
barge, rail or truck.

We have an internal sales force that sells directly to our customers. Our
polyethylene customers are some of the nation's leading film and flexible
packaging manufacturers. In 2002, our ten largest polyethylene customers
accounted for 22% of Olefins segment net sales. In 2002, our top three styrene
customers accounted for 13% of Olefins segment net sales. No single Olefins
customer accounted for more than 10% of our segment net sales.

COMPETITION

The markets in which our Olefins business operates are highly competitive.
We compete on the basis of price, customer service, product deliverability,
product quality and product performance. Our competitors in the ethylene,
polyethylene and styrene markets are typically some of the world's largest
chemical companies, including Equistar Chemicals, LP, The Dow Chemical Company,
ExxonMobil

Chemical Company, Lyondell Chemical Company, Chevron Phillips Chemical Company
LP and NOVA Chemicals Corporation.

VINYLS BUSINESS

PRODUCTS

Principal products in our integrated Vinyls segment include PVC, VCM,
chlorine, caustic soda and ethylene. We also manufacture and sell products
fabricated from the PVC we produce, including pipe, fence and deck, and window
and patio door components. We manage our integrated Vinyls production chain,
from the basic chemicals to finished fabricated products, to maximize product
margins, pricing and capacity utilization. Our primary manufacturing facilities
are in Calvert City, Kentucky and include an ethylene plant, a chlor-alkali
plant, a VCM plant and a PVC plant. We also own eight strategically located PVC
fabricated product facilities. In addition, in 2003 we acquired a vinyls
facility in Geismar, Louisiana. Although the facility is currently idle, we plan
to start up the ethylene dichloride portion of the Geismar facility in the
fourth quarter of 2003. We intend to operate part or all of the remainder of the
facility when market conditions support utilization of the additional capacity.
We also own a 43% interest in a PVC joint venture in China with total capacity
of 264 million pounds of PVC per year. The following table illustrates our
production capacities by principal product and the end uses of these products:

<Table>
<Caption>
PRODUCT ANNUAL CAPACITY(1) END USES
- ------- -------------------- --------
(MILLIONS OF POUNDS)

PVC......................... 800 Construction materials including pipe, siding,
profiles for windows and doors; rigid and flexible
film for packaging; medical applications such as
blood bags and tubing
VCM......................... 1,300 PVC
Chlorine.................... 410 VCM, organic/inorganic chemicals, bleach
Caustic Soda................ 450 Pulp and paper, organic/inorganic chemicals,
neutralization, alumina
Ethylene.................... 450 VCM
Fabricated Products......... 600 Pipe: water and sewer, plumbing, irrigation,
conduit; components: windows and doors; fence and
deck
</Table>

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

(1) Annual capacity excludes total capacity of 79 million pounds of fabricated
products and 264 million pounds of PVC from our China joint venture (in
which we have a 43% interest) and 600 million pounds of PVC and VCM from our
idled facilities at Geismar, Louisiana.

PVC. PVC, the world's third most widely used plastic, is an attractive
alternative to traditional materials such as glass, metal, wood, concrete and
other plastic materials because of its versatility, durability and cost
competitiveness. PVC is produced from VCM, which is, in turn, made from chlorine
and ethylene. We will use the ethylene dichloride that we produce in our Geismar
facility internally to produce PVC. PVC compounds are made by combining PVC
resin with various additives in order to make either rigid and impact-resistant
or soft and flexible compounds. The various compounds are then fabricated into
end-products through extrusion, calendering, injection-molding or blow-molding.
Flexible PVC compounds are used for wire and cable insulation, automotive
interior and exterior trims, packaging and medical devices. Rigid extrusion PVC
compounds are commonly used in window frames, vertical blinds and construction
products, including pipes. Injection-molding PVC compounds are used in specialty
products such as computer housings and keyboards, appliance parts and bottles.
In 2002, we produced 761 million pounds of PVC at our Calvert City facilities.
We used 61% of our PVC internally in the production of our fabricated products.
The remainder of our PVC was sold to downstream fabricators.

VCM. VCM is used to produce PVC, solvents and PVC-related products. We use
ethylene and chlorine to produce VCM. In 2002, we produced 1.2 billion pounds of
VCM at our Calvert City facilities and used 63% percent of our VCM production in
our PVC operations. The remainder of our VCM production was sold under a
long-term contract with an external customer.

Chlorine and Caustic Soda. We combine salt and electricity to produce
chlorine and caustic soda, co-products commonly referred to as chlor-alkali, at
our Calvert City facilities. We use our chlorine production in our VCM plant.
Our caustic soda is sold to external customers who use it for, among other
things, the production of pulp and paper, organic and inorganic chemicals and
alumina. In 2002, we modernized and expanded our chlorine plant by replacing our
mercury cell technology with a more efficient, state-of-the-art membrane
technology, resulting in a 64% increase in capacity and an approximate 25%
reduction in energy consumption per unit of production that should result in
significant cost savings as energy is a major cost of chlor-alkali production.

In 2002, we produced 296 million pounds of chlorine and 340 million pounds
of caustic soda. In 2003, we have the capacity to supply approximately 50% of
our internal chlorine requirements. We purchased the portion of our chlorine
requirements that we do not fulfill internally under an ethylene dichloride
supply agreement that expires in December 2003. We are working with suppliers to
satisfy our continuing chlorine requirements and we do not expect any disruption
in our chlorine supply.

Ethylene. We use all of the ethylene produced at Calvert City internally
to produce VCM and, in 2002, we produced approximately 70% of the ethylene
required for our VCM production. We obtain the remainder of the ethylene we need
for our Vinyls business from our Lake Charles ethylene production in the form of
ethylene dichloride. We plan to start up the ethylene chloride portion of our
Geismar facility in the fourth quarter of 2003 and to use the ethylene
dichloride internally in our production of PVC beginning in 2004.

Fabricated Products. Products made from PVC are used in construction
materials ranging from water and sewer systems to home and commercial
applications for fence, deck, window and patio door systems. We manufacture and
market water, sewer, irrigation and conduit pipe products under the "North
American Pipe" brand. PVC pipe offers greater strength, lower installed cost,
increased corrosion resistance, lighter weight and longer service life when
compared to iron, steel and concrete alternatives. We also manufacture and
market PVC window and patio door profiles under the "NAPG" brand and PVC fence
and deck products under the "Westech" brand. PVC windows and patio doors are
more energy efficient, less costly and easier to maintain than alternative
products. PVC fence and deck products feature low maintenance materials and long
product life. In 2002, we produced 514 million pounds of PVC fabricated
products, including 444 million pounds of PVC pipe, 46 million pounds of fence
and 24 million pounds of window and patio door profiles, all of which were sold
to third parties.

China Joint Venture. We own a 43% interest in Suzhou Huasu Plastics Co.
Ltd., a joint venture based near Shanghai, China. Our joint venture partners
include Norway's Norsk Hydro ASA, two Chinese government-owned chemical
companies and International Finance Corporation, a unit of the World Bank. In
1995, this joint venture constructed and began operating a PVC film and
fabricated products plant that has a current annual capacity of 79 million
pounds of PVC film. In 1999, the joint venture constructed and began operating a
PVC resin plant that has an annual capacity of 264 million pounds of PVC resin.
In 2002, 12% of the PVC resin was used internally for the production of the PVC
film and fabricated products.

FEEDSTOCKS

We are highly integrated along our vinyls production chain. We produce all
the ethylene, VCM and PVC used in our Vinyls business. In 2002, we produced 42%
of the chlorine required for our VCM plant. We purchased the remaining amount at
market prices. We purchased the salt required for our chlor-alkali plant
pursuant to a long-term contract that expires in 2005. The chlorine and salt
purchase prices are based on market prices. We purchase electricity for our
chlor-alkali production from the Tennessee Valley Authority under a favorable
contract that runs through 2005.

We are one of the few fully integrated producers of vinyls and fabricated
products in North America. Our Calvert City PVC plant supplies all the PVC
required for our fabricated products plants. We believe that this provides us
with a significant advantage over other fabricated products manufacturers that
are

reliant on external suppliers of PVC. The remaining feedstocks for fabricated
products include pigments, fillers and stabilizers, which we purchase under
short-term contracts based on prevailing market prices.

MARKETING, SALES AND DISTRIBUTION

We are a leading manufacturer of PVC fabricated products in the geographic
regions where we operate. We sell our PVC pipe through a combination of
distributors, manufacturer representatives and our internal salaried sales
force. We use a regional sales approach. This allows us to provide focused
customer service and to meet the specified needs of individual customers. In
2002, we had approximately 700 customers, with the top five customers accounting
for a total of 42% of net sales in our Vinyls segment. We use an internal
salaried sales force to market and sell our fence and window and patio door
profiles. We sell primarily to fabricators who then convert the product into
kits for installation by contractors.

In 2002, we used 63% of our VCM production in our PVC operations and sold
over 90% of the remaining production under a long-term contract. We sell all of
our caustic soda production to external customers, concentrating on customers
who can receive the product by barge over the Mississippi, Tennessee and Ohio
Rivers to minimize distribution costs. In 2002, we had approximately 50 caustic
soda customers.

COMPETITION

Competition in the vinyls market is based on price, product availability,
product performance and customer service. We compete in the vinyls market with
other large and medium-sized producers including Oxy Vinyls, LP, The Dow
Chemical Company, Shintech, Inc., Georgia Gulf Corporation and Formosa Plastics
Corporation.

Competition in the fabricated products market is based on price, on-time
delivery, product quality, customer service and product consistency. We compete
in the fabricated products market with other medium and large-sized producers
and fabricators including J-M Manufacturing Company, Inc., Diamond Plastics
Corporation, National Pipe & Plastics, Inc. and PW Eagle, Inc. We are a leading
manufacturer of PVC pipe in the geographic areas served by our North American
Pipe Corporation subsidiary. We believe that we are the number two manufacturer
of PVC fence and deck in the United States.

FACILITIES AND CAPABILITIES

Our manufacturing facilities and principal products are set forth below.
Except as noted, we own each of these facilities. Our Lake Charles and Calvert
City facilities have been pledged to secure our new term loan.

<Table>
<Caption>
LOCATION PRINCIPAL PRODUCTS
- -------- ------------------

Lake Charles, Louisiana.................. Ethylene, polyethylene, styrene
Calvert City, Kentucky(1)................ PVC, VCM, chlorine, caustic soda,
ethylene
Geismar, Louisiana(2).................... PVC, VCM and ethylene dichloride
Booneville, Mississippi.................. PVC pipe
Springfield, Kentucky.................... PVC pipe
Litchfield, Illinois..................... PVC pipe
Wichita Falls, Texas..................... PVC pipe
Van Buren, Arkansas...................... PVC pipe
Evansville, Indiana...................... Fence and deck
Calgary, Alberta, Canada(3).............. Window and patio doors
Pauling, New York........................ Window and patio doors
</Table>

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

(1) We lease a portion of our Calvert City facilities.

(2) Although our Geismar facility is currently idle, we plan to start up the
ethylene dichloride portion of the Geismar facility in the fourth quarter of
2003. We intend to operate part or all of the remainder of the facility when
market conditions support utilization of the additional capacity.

(3) We lease our Calgary facility.

OLEFINS

Our Lake Charles complex consists of three sites on over 1,300 acres in
Lake Charles, Louisiana, each within two miles of one another. The complex
includes two ethylene plants, two polyethylene plants and a styrene monomer
plant. The combined capacity of our two ethylene plants is approximately 2.3
billion pounds per year. The capacity of our two polyethylene plants is
approximately 1.4 billion pounds per year and the capacity of our styrene plant
is approximately 450 million pounds per year. We operate some of the newest
manufacturing sites in North America and focus on continually improving our
asset portfolio and cost position. Our newest polyethylene plant has two
production units that use gas phase technology to manufacture both LLDPE and
HDPE. Our styrene monomer plant is being modernized with state-of-the-art
technology and underwent debottlenecking in the second quarter of 2003 for
additional capacity.

Our Lake Charles complex includes a marine terminal that provides for
worldwide shipping capabilities. The complex also is located near rail
transportation facilities, which allows for efficient delivery of raw materials
and prompt shipment of our products to customers. In addition, the complex is
connected by pipeline systems to our ethylene feedstock sources in both Texas
and Louisiana. Within the complex, our ethylene plants are connected by pipeline
systems to our polyethylene and styrene plants. Our location, combined with our
integration in ethylene and our new and modernized plant facilities, allows for
low-cost production and distribution of products in our Olefins business.

We intend to continue to explore ways to optimize our plant capabilities
and to maximize our production as market conditions warrant additional capacity.
In 2002, we made capital expenditures for the upgrade, maintenance and
modernization of production, manufacturing and administrative facilities for our
Lake Charles complex of $21.1 million. In 2001, these expenditures amounted to
$20.5 million.

VINYLS

Our Calvert City complex is situated on 550 acres on the Tennessee River in
Kentucky and includes an ethylene plant, a chlor-alkali plant, a VCM plant and a
PVC plant. The capacity of our Calvert City ethylene plant is 450 million pounds
per year and of our chlor-alkali plant is 410 million pounds of chlorine and 450
million pounds of caustic soda per year. In 2002, we modernized and expanded our
chlorine plant by replacing our mercury cell technology with a more efficient,
state-of-the-art membrane technology, resulting in a 64% increase in capacity
and approximately a 25% reduction in energy consumption per unit of production
that should result in significant cost savings as energy is a major cost of the
chlor-alkali production. Our VCM plant has a capacity of 1.3 billion pounds per
year and our Calvert City PVC plant has a capacity of 800 million pounds per
year.

We currently operate eight fabricated products plants, consisting of five
PVC pipe plants, a fence and deck plant and two window and patio door profiles
plants. The majority of our plants are strategically located near our Calvert
City complex and service customers throughout the middle United States. One of
our profiles plants is located in Calgary, Alberta and the other is in Pauling,
New York. The combined capacity of our fabricated products plants is 600 million
pounds per year.

We intend to continue to explore ways to optimize our plant capabilities
and to maximize our production of both vinyls and fabricated products as market
conditions warrant additional capacity. In 2002, we made capital expenditures
for the expansion and modernization of manufacturing facilities for our Vinyls
business of $17.0 million. In 2001, these expenditures amounted to $53.3
million, of which a majority was used to upgrade and expand our chlor-alkali
facility.

In 2003, we acquired a vinyls facility in Geismar, Louisiana. The facility
was purchased for $5 million in cash plus a percentage of future earnings not to
exceed $4 million. The site includes a PVC plant with a capacity of 600 million
pounds per year and a VCM plant with a capacity of 600 million pounds per year
with related ethylene dichloride capacity. Although the facility is currently
idle, we intend to operate it when market conditions support utilization of the
additional capacity and we may use a portion of the facility to produce ethylene
dichloride before starting up the entire facility.

We believe that our current facilities are adequate to meet the
requirements of our present and foreseeable future operations.

HEADQUARTERS

Our principal executive offices are located in Houston, Texas. Our office
space is leased, at market rates, from an affiliate under a lease expiring
December 31, 2004. See "Certain Relationships and Related Transactions."

TECHNOLOGY AND INTELLECTUAL PROPERTY

Our technology strategy is to selectively acquire and license third-party
proprietary technology. Our selection process incorporates many factors,
including the cost of the technology, our customer's requirements, raw material
and energy consumption rates, product quality, capital costs, maintenance
requirements and reliability. We believe that the most cost-effective way to
acquire technology applicable to our businesses is to purchase or license it
from third-party market providers. As a result, we have eliminated the need for
research expenditures and believe we are able to select the best available
technology at the time our need arises. After acquiring a technology, we devote
considerable efforts to further develop and effectively apply the technology
with a view to continuously improving our competitive position.

We license technology from a number of third-party providers. In 1988, we
selected the MW Kellogg technology for our first ethylene plant at our Lake
Charles complex. In 1995, we selected the ABB Lummus Crest technology, as a
state-of-the-art, low-cost and efficient method of producing ethylene, for the
second ethylene plant at Lake Charles. In 1990, we selected Mobil/Badger
technology for our styrene monomer plant at Lake Charles and in 1996 selected BP
technology for our second Lake Charles polyethylene plant. In 1997, we entered
into a corporate-wide technology agreement with Aspen Technology. The Aspen
Technology Plantelligence(TM) includes an advanced process control software
system which improves process control and economic optimization. In 1998, we
licensed Asahi Chemical membrane technology for our chlor-alkali plant.

ENVIRONMENTAL AND OTHER REGULATION

As is common in our industry, obtaining, producing and distributing many of
our products involves the use, storage, transportation and disposal of large
quantities of toxic and hazardous materials, and our manufacturing operations
require the generation and disposal of large quantities of hazardous wastes. We
are subject to extensive, evolving and increasingly stringent federal and local
environmental laws and regulations, which address, among other things, the
following:

- emissions to the air;

- discharges to land or to surface and subsurface waters;

- other releases into the environment;

- remediation of contaminated sites;

- generation, handling, storage, transportation, treatment and disposal of
waste materials; and

- maintenance of safe conditions in the workplace.

We are subject to environmental laws and regulations that may require us to
remove or mitigate the effects of the disposal or release of chemical substances
at various sites. Under some of these laws and regulations, a current or
previous owner or operator of property may be held liable for the costs of
removal or remediation of hazardous substances on, under, or in its property,
without regard to whether the owner or operator knew of, or caused the presence
of the contaminants, and regardless of whether the practices that resulted in
the contamination were legal at the time they occurred. As several of our
production sites have a history of industrial use, it is impossible to predict
precisely what effect these laws and regulations will have on us in the future.
As is typical for chemical businesses, soil and groundwater contamination has
occurred in the past at some of our sites, and might occur or be discovered at
other sites in the future. We have typically conducted extensive soil and
groundwater assessments throughout our operations either prior to acquisitions
or associated with subsequent permitting requirements. Our investigations have
not revealed any contamination caused by our operations that would likely
require us to incur material long-term remediation efforts and associated
liabilities.

Lake Charles. In the fall of 2000, we determined that we were not in
compliance with certain Clean Air Act regulations governing emissions of benzene
from our two ethylene plants in Lake Charles. We voluntarily reported this
discovery to the Louisiana Department of Environmental Quality, or LDEQ, and
began negotiations to resolve the matter. We subsequently expanded the scope of
our settlement discussions to include other environmental non-compliance matters
at all of our plants in Lake Charles. We have reached a tentative settlement
with the LDEQ requiring us to pay $815,000 in penalties and to perform specified
beneficial environmental projects that we expect to cost approximately $4.4
million. A majority of these expenditures has already been made. The LDEQ has
requested public comments on the terms of the proposed settlement agreement, and
we believe that it will be finalized later this year.

Calvert City. In connection with our acquisition of the manufacturing
complex in Calvert City from Goodrich Corporation, or Goodrich, in 1990 and
1997, Goodrich agreed to indemnify us for any liabilities related to
pre-existing contamination at the site. The soil and groundwater had been
extensively contaminated by Goodrich's operations. In 1993, the Geon Corporation
was spun off from Goodrich, and Geon assumed the responsibility to operate the
site-wide remediation system and the indemnification obligations for any
liabilities arising from pre-existing contamination at the site. Subsequently,
Geon's name was changed to PolyOne. Part of the former Goodrich facility, which
we did not acquire and on which we do not operate and that we believe is still
owned by either Goodrich or PolyOne, is listed on the National Priorities List
under the Comprehensive Environmental Response, Compensation and Liability Act,
or CERCLA. Contamination at our Calvert City facilities is currently being
investigated and remediated by PolyOne. Given the scope and extent of the
underlying contamination, the remediation will likely take a number of years
and, while it is difficult to estimate, the amount of remaining remediation
costs has been estimated to be $20 million. For the past three years, PolyOne
has suggested that our actions after our acquisition of the complex have
contributed to or otherwise exacerbated the contamination at the site. We have
denied those allegations and have retained technical experts to evaluate our
position. Goodrich has also asserted similar claims. In addition, Goodrich has
asserted that we are responsible for a portion of the ongoing costs of treating
contaminated groundwater being pumped from beneath the site and has withheld
payment for a portion of the costs that we incur to operate Goodrich's pollution
control equipment located on our property. We met with Goodrich representatives
in July and August of 2003 to discuss Goodrich's assertions and have requested
further information from Goodrich.

In March and June 2002, the EPA's National Enforcement Investigation
Center, or NEIC, conducted an environmental investigation of our manufacturing
complex in Calvert City. In May 2003, we received a report prepared by NEIC
summarizing the results of that investigation. Among other things, the NEIC
concluded that the requirements of several regulatory provisions had not been
met. We have begun to analyze the NEIC report and have identified areas where we
believe that erroneous factual or legal conclusions, or both, may have been
drawn by NEIC. We have met with the EPA and plan additional meetings with the
EPA to review its conclusions. Nevertheless, it is likely that penalties will be
imposed or that expenditures for installation of environmental controls will be
required, or both, by either the EPA or

the Kentucky Department of Environmental Protection as a result of this
investigation. At this time, we are unable to estimate the amount of penalties
or expenditures that may be required.

Geismar. In 2003, we acquired portions of an idled chemical complex in
Geismar, Louisiana that were previously owned and operated by Borden Chemicals,
Inc. and Borden Chemicals and Plastics Operating Limited Partnership, or BCP.
Since these facilities have remained idle for some time, we expect to incur some
costs to reopen the production processes, including costs related to obtaining
or updating the necessary permits and to installing or modifying the necessary
pollution control equipment. In 1998, BCP entered into a consent decree with the
U.S. Environmental Protection Agency and the LDEQ to investigate and remediate
contaminated soil and groundwater at the site. As a part of BCP's bankruptcy
reorganization, Borden Chemicals assumed BCP's obligations under the 1998
consent decree in a separate settlement agreement with the EPA and the LDEQ. The
EPA has estimated that the cleanup obligations of BCP and Borden Chemicals may
total approximately $33 million. We believe that approximately $20 million of
these costs relate to property that we did not acquire and on which we do not
operate. Early in 2002, CERCLA was amended to create a new defense against
liability for purchasers of contaminated property. We believe we meet the
criteria set forth in the statute to take advantage of the "bona fide purchaser"
defense with respect to pre-existing contamination as long as, among other
things, we do not release hazardous substances at the site that create a
material effect and we cooperate with Borden Chemicals as it performs its
remediation obligations at the site. In August 2003, the LDEQ notified us that
it will first look to Borden Chemicals to address cleanup responsibilities for
existing contamination on the property we acquired. Although we may not be
required by the statute to do so, we plan to conduct an extensive environmental
baseline analysis to further demonstrate the condition of the site at the time
of our acquisition.

It is our policy to comply with all environmental, health and safety
requirements and to provide safe and environmentally sound workplaces for our
employees. In some cases, compliance can be achieved only by incurring capital
expenditures, and we are faced with instances of non-compliance from time to
time. In 2002, our combined expenditures, including those with respect to third
party and divested sites, for compliance with environmental control regulations
and internal company initiatives totaled $8.4 million, of which $1.6 million was
for capital projects. Our 2003 budget calls for expenditures, including capital
projects, of $11.2 million for environmental compliance. We anticipate that
stringent environmental regulations will continue to be imposed on us and the
industry in general. Although we cannot predict with certainty future
expenditures, management believes that our current spending trends will
continue.

It is difficult to estimate the future costs of environmental protection
and remediation because of many uncertainties, including uncertainties about the
status of laws, regulations and information related to individual locations and
sites and our ability to rely on third parties to carry out such remediation.
Subject to the foregoing, but taking into consideration our experience regarding
environmental matters of a similar nature and facts currently known, we believe
that capital expenditures and remedial actions to comply with existing laws
governing environmental protection will not have a material adverse effect on
our business and financial results.

EMPLOYEES

As of June 30, 2003, we had 1,623 employees, 288 contractors and 13
consultants in the following areas:

<Table>
<Caption>
CATEGORY NUMBER
- -------- ------

Olefins segment............................................. 622
Vinyls segment.............................................. 1,216
Headquarters................................................ 86
</Table>

Approximately 18% of our employees are represented by labor unions. There
have been no strikes or lockouts and we have not experienced any work stoppages
throughout our history. We believe that our relationship with the local union
officials and bargaining committees is open and positive.

LEGAL PROCEEDINGS

In connection with the purchase of our Calvert City facilities in 1997, we
acquired 10 barges that we use to transport chemicals on the Mississippi, Ohio
and Illinois Rivers. In April 1999, the U.S. Coast Guard issued a forfeiture
order permanently barring the use of our barges in coastwise trade due to an
alleged violation of a federal statute regarding the citizenship of the
purchaser. We appealed the forfeiture order with the Coast Guard and, in June
1999, we filed suit in the U.S. Court of Appeals for the D.C. Circuit seeking a
stay of the order pending resolution of the Coast Guard appeal. The D.C. Circuit
granted the stay and we are able to use the barges pending resolution of our
appeal with the Coast Guard. In September 1999, the Customs Service issued $17.5
million in penalties for alleged unauthorized usage of the barges between
January 1998 and January 1999. The Customs Service subsequently acknowledged
that the imposition of the penalties violated the stay and informed us the
penalties had been cancelled in January 2000. The Coast Guard has indicated that
it will issue an order resolving our administrative appeal on or about October
2003. We are exploring the option of seeking legislative relief through a
private bill from the U.S. Congress, and the Coast Guard has stated that it will
not oppose such efforts. We do not believe that the ultimate outcome of this
matter will have a material adverse effect on our business, although there can
be no assurance in this regard.

In addition to the matters described above and under "-- Environmental and
Other Regulation," we are involved in various routine legal proceedings
incidental to the conduct of our business. We do not believe that any of these
legal proceedings will have material adverse effect on our financial condition,
results of operations or cash flows.

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth information concerning our directors,
executive officers and other key managers, including their ages as of June 30,
2003:

<Table>
<Caption>
NAME AGE POSITION(S)
- ---- --- -----------

T.T. Chao................................. 81 Chairman of the Board
James Chao................................ 55 Vice Chairman of the Board
Albert Chao............................... 53 President and Director
Dorothy C. Jenkins........................ 57 Director
Ruth I. Dreessen.......................... 47 Senior Vice President and Chief Financial
Officer
David R. Hansen........................... 53 Senior Vice President, Administration
Wayne D. Morse............................ 60 Senior Vice President, Manufacturing and
Vinyls
Jerry D. Farmer........................... 55 Vice President, Manufacturing -- Lake
Charles
Fred M. Jones............................. 54 Vice President, Marketing and Materials
Management -- Vinyls
Tai-li Keng............................... 55 Vice President and Treasurer
John A. Labuda............................ 53 Vice President and General Auditor
David C. Lu............................... 59 Vice President, International
George J. Mangieri........................ 52 Vice President and Controller
Michael C. Tann........................... 55 Vice President, North American Profiles
Jeffrey L. Taylor......................... 49 Vice President, Polyethylene
Louis B. Trenchard III.................... 57 Vice President, Legal
Warren W. Wilder.......................... 46 Vice President, Olefins and Styrene
John Minelli.............................. 52 General Manager, North American Pipe
</Table>

T.T. Chao. Mr. Chao has been our Chairman of the Board since 1985 and has
over 50 years of international experience in the chemical industry. He is the
founder of China General Plastics Group (Taiwan) and was Chairman of Titan Group
(Malaysia) until June 2003, when he became Chairman Emeritus and Founder. Mr.
Chao is the father of James Chao, our Vice Chairman of the Board, Albert Chao,
our President, and Dorothy C. Jenkins, a director.

James Chao. Mr. Chao has been our Vice Chairman of the Board since May
1996 and became a director in June 2003. Mr. Chao has over 30 years of
international experience in the chemical industry. In June 2003, he was named
Chairman of Titan Group and previously served as the Managing Director. He has
served as a Special Assistant to the Chairman of China General Plastics Group
and worked in various financial, managerial and technical positions at Mattel
Incorporated, Developmental Bank of Singapore, Singapore Gulf Plastics Pte. Ltd.
and Gulf Oil Corporation. Mr. Chao, along with his brother Albert Chao, assisted
T.T. Chao in founding Westlake Group and served as Westlake's first president
from 1985 to 1996. Mr. Chao received his Bachelor of Science degree from the
Massachusetts Institute of Technology and an MBA from Columbia University.

Albert Chao. Mr. Chao has been our President since May 1996 and a director
since June 2003. Mr. Chao has over 30 years of international experience in the
chemical industry. In 1985, Mr. Chao assisted T.T. Chao and James Chao in
founding Westlake, where he served as Executive Vice President until he
succeeded brother James as President. He has held positions in the Controller's
Group of Mobil Oil Corporation, in the Technical Department of Hercules
Incorporated and in the Plastics Group of Gulf Oil Corporation. He subsequently
served as Assistant to the Chairman of China General Plastics Group

and Deputy Managing Director of a plastics fabrication business in Singapore.
Mr. Chao received a Bachelor's degree from Brandeis University and an MBA from
Columbia University.

Dorothy C. Jenkins. Ms. Jenkins has been a director since June 2003. Ms.
Jenkins is a director of A-Group Holdings, an affiliate of ours. She is also a
member of the boards of various civic and charitable organizations including
Florida Southern College, Polk Museum of Art and Ringling Museum Foundation. Ms.
Jenkins is the sister of James Chao and Albert Chao, and the daughter of T.T.
Chao. She is a graduate of Wellesley College and holds a B.S. in Mathematics
with additional graduate studies in mathematics at the University of South
Florida.

Ruth I. Dreessen. Ms. Dreessen has been our Senior Vice President and
Chief Financial Officer since June 2003. She was employed by JPMorgan Chase &
Company for 21 years where she last served as Managing Director of the Global
Chemicals Group. She was formerly a member of the board of Georgia Gulf
Corporation and is currently a member of the board of Better Minerals &
Aggregates Corporation. She received her undergraduate degree from New College
of Florida and a Masters in International Affairs from Columbia University.

David R. Hansen. Mr. Hansen has been our Senior Vice President,
Administration, since September 1999. Prior to joining Westlake in 1990, Mr.
Hansen served as Director of Human Resources & Administration for Agrico
Chemical Company and held various human resources and administrative management
positions within the Williams Companies. He has over 28 years of administrative
management experience in the oil, gas, energy, chemicals, pipeline, plastics and
computer industries. He received his Bachelor of Science degree in Social
Science from the University of Utah and has completed extensive graduate work
toward an M.S. in Human Resources Management.

Wayne D. Morse. Mr. Morse has been a Senior Vice President since 1994 and
was most recently named Senior Vice President, Vinyls and Manufacturing in
January 2003. Mr. Morse joined Westlake in 1990 after 23 years of service with
Goodrich Corporation. He held the position of Vice President and General Manager
of BFG Intermediates Division, which had ethylene, chlor-alkali and EDC/VCM
operations. Since joining Westlake, Mr. Morse has had broad executive
responsibility for all chemical operations and is the senior manufacturing
executive of our company. Mr. Morse earned a B.S. degree in Chemical Engineering
from the University of Louisville.

Jerry D. Farmer. Mr. Farmer has been our Vice President,
Manufacturing -- Lake Charles, since May 2002. He joined Westlake in 1990 after
21 years with Goodrich Corporation, where he held positions in engineering,
operations and manufacturing management. He has served as the senior
manufacturing executive of our Kentucky operations beginning March 1990 and
currently holds a similar position in Louisiana. Mr. Farmer received a Bachelor
of Science degree in Chemical Engineering from the University of Missouri at
Rolla.

Fred M. Jones. Mr. Jones has been our Vice President, Marketing and
Materials Management -- Vinyls, since February 1999. Prior to joining Westlake
in 1990, he was Purchasing Manager with BFG Intermediates Division of Goodrich
Corporation for eight years, where he had responsibility for feedstock, energy
and raw material management. He worked for Diamond Shamrock Corporation for
seven years prior to his employment with Goodrich Corporation. Mr. Jones
received both his Bachelor's degree in Business and his MBA from Sam Houston
State University.

Tai-li Keng. Ms. Keng has been our Vice President and Treasurer since
December 2002. From May 1996 to December 2002, she served as Manager, Banking
and Investments. Ms. Keng joined Westlake in 1992 after nine years in commercial
banking, where she last served as a Vice President of NationsBank. She
previously served as Manager, Finance and Manager, Banking & Investments of
NationsBank and its predecessors. Ms. Keng is a graduate of the National Taiwan
University and the State University of New York. She holds a Masters of
International Management from the American Graduate School of International
Management.

John A. Labuda. Mr. Labuda has been our Vice President and General Auditor
since July 1998. He served as our Vice President and Controller from 1993 to
1998. Prior to joining Westlake in 1991,
63

Mr. Labuda served as Controller of Wellstream Corporation. He previously was
employed as Controller of a subsidiary of Schlumberger Limited, where he also
served in several other staff positions. He received his Bachelor of Arts degree
and MBA from State University of New York at Buffalo.

David C. Lu. Mr. Lu has been our Vice President, International, since July
1993. Mr. Lu joined Westlake in 1991. Prior to that time, he served as Assistant
to the Chairman of China General Plastics Corporation and held other positions
during his 23-year tenure with the firm. Mr. Lu graduated in 1967 with a law
degree from Fu Jen Catholic University in Taiwan.

George J. Mangieri. Mr. Mangieri has been our Vice President and
Controller since joining us in April 2000. Prior to joining Westlake, Mr.
Mangieri served as Vice President and Controller of Zurn Industries, Inc. from
1998 to 2000. He previously was employed as Vice President and Controller for
Imo Industries, Inc. in New Jersey, and spent over 10 years in public accounting
with Ernst & Young LLP, where he served as Senior Manager. He received his
Bachelor of Science degree from Monmouth College and is a Certified Public
Accountant.

Michael C. Tann. Mr. Tann has been our Vice President, North American
Profiles, since December 2002. Mr. Tann began his employment with Westlake in
1992 and has previously served as Vice President, North American Pipe, and Vice
President, Vinyls. Previously, Mr. Tann was Vice President of the Fabricating
Division and Executive Officer of the PVC Film/Sheet Division at China General
Plastics Corporation in Taiwan. He has over 25 years of experience in PVC
production and operations. Mr. Tann received his Masters of Science degree in
Industrial Engineering from the Illinois Institute of Technology.

Jeffrey L. Taylor. Mr. Taylor has been our Vice President, Polyethylene,
since January 2003. Mr. Taylor joined Westlake in March 2002 as Manager, PE
Marketing. Mr. Taylor joined Westlake after a 25-year career with Chevron
Phillips Chemical Company. In his last assignment he served as the Vice
President, Polyethylene, Americas. During his career, he has held a variety of
sales, marketing, operations and general management assignments. He is a
graduate of the University of Delaware with a B.S. in Business Administration
and a B.A. in Mathematics.

Louis B. Trenchard III. Mr. Trenchard has been our Vice President, Legal,
since September 1998. Mr. Trenchard joined our Legal Department as Assistant
General Counsel in 1992. His 26 years of legal experience include private
practice in Texas and Louisiana. He also served as Secretary and Senior
Corporation Counsel of Cooper Industries, and General Counsel of a subsidiary of
Schlumberger Limited. He received a Bachelor of Science degree in Business
Administration from Louisiana State University and his JD from Tulane
University. He is a graduate of the Executive Program of the Stanford Business
School, and Columbia Law School's Parker School of Foreign and Comparative Law.

Warren W. Wilder. Mr. Wilder has been our Vice President, Olefins and
Styrene, since January 2003. Mr. Wilder joined Westlake in January 2000 as Vice
President, Planning and Business Development, and in February 2001, he was
appointed Vice President, Polyethylene. Prior to joining Westlake, he was an
executive with Koch Industries, Inc. for over 10 years where he held positions
in planning and business development, finance, operations and general
management. Mr. Wilder holds a B.S. in Chemical Engineering from the University
of Washington and an MBA from the University of Chicago.

John Minelli. Mr. Minelli joined our company in December 2002 as our
General Manager, North American Pipe, after a 26-year career with Bristolpipe.
He was President of Bristolpipe for the last nine years. Mr. Minelli has been
active in the plastic pipe industry over his career and has served on the boards
of it various industry associations. He is a graduate of Indiana University with
a B.A. in History.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table provides information regarding the compensation awarded
to or earned during 2002 by our principal executive officer, the next four most
highly compensated individuals who were serving as executive officers at the end
of 2002 and one former executive officer for whom disclosure would have been
required but for the fact that he was not serving as an executive officer at the
end of 2002 (collectively, the "named executive officers").

<Table>
<Caption>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION LONG-TERM
-------------------- INCENTIVE ALL OTHER
NAME AND PRINCIPAL POSITION SALARY($) BONUS($) PAYOUTS COMPENSATION(1)
- --------------------------- --------- -------- ------------ ---------------

Albert Chao
President.................................. $242,112 $ 1,320 $36,667 $ 8,564
Henry Kahn(2)
Former Senior Vice President and Chief
Financial Officer....................... 236,900 1,347 -- 11,744
Wayne D. Morse
Senior Vice President, Vinyls and
Manufacturing........................... 235,584 1,682 52,800 5,564
David R. Hansen
Senior Vice President, Administration...... 190,800 1,040 32,267 14,061
Warren W. Wilder
Vice President, Olefins and Styrene........ 171,396 30,319(3) -- 6,626
George J. Mangieri
Vice President and Controller.............. 169,944 926 -- 6,617
</Table>

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

(1) Consists of company contributions to a defined contribution plan, matching
contributions deposited into our 401(k) plan and premiums paid on behalf of
the executive for term life insurance as follows:

<Table>
<Caption>
DEFINED TERM LIFE
NAME CONTRIBUTION PLAN 401(K) CONTRIBUTION INSURANCE PREMIUMS
- ---- ----------------- ------------------- ------------------

Albert Chao........................ $8,500 -- $64
Henry Kahn......................... 6,180 $5,500 64
Wayne D. Morse..................... -- 5,500 64
David R. Hansen.................... 8,500 5,500 61
Warren W. Wilder................... 4,285 2,286 55
George J. Mangieri................. 4,249 2,314 54
</Table>

(2) Mr. Kahn became a consultant to Westlake effective December 16, 2002 and is
being paid one year's salary and associated benefits.

(3) Includes a $30,000 signing bonus.

LONG-TERM INCENTIVE PLAN - AWARDS IN 2002

The following table provides information regarding units awarded to the
named executive officers on January 1, 2003 for services provided in 2002 under
our Performance Unit Plan.

<Table>
<Caption>
PERFORMANCE OR
OTHER PERIOD UNTIL
NAME NUMBER OF UNITS MATURATION OR PAYOUT
- ---- --------------- --------------------

Albert Chao......................................... 60,072 2/7/10 years
Henry Kahn.......................................... -- --
Wayne D. Morse...................................... 50,102 2/7/10 years
David R. Hansen..................................... 40,576 2/7/10 years
Warren W. Wilder.................................... 48,599 2/7/10 years
George J. Mangieri.................................. 24,095 2/7/10 years
</Table>

The Performance Unit Plan is a discretionary, non-qualified, non-equity
based long-term incentive plan that covers essentially all of our executives and
other key employees, including the named executive officers. The employees who
participate in the plan and all awards under the plan are determined on a
discretionary basis by the Chairman's Office. Units are granted on the first day
of each year and 50% of the units vest two years after the grant date and the
remaining 50% vest seven years after the grant date. All units will convert to
cash as described below if not exercised before the end of ten years from the
date of grant. The cash value of each unit is based on the percentage increase
or decrease in our consolidated book value over the life of the grant as
measured on December 31 of each year. Book value at the date of each grant is
established by the Chairman's Office. Increases in the book value exclude any
capital contributions or increases in capital due to mergers, and book value is
adjusted to reflect the payment of any dividends. There are no minimum or
maximum payouts with respect to the units issued under the plan. The theoretical
cash value of each unit granted on January 1, 2002 would be zero as of December
31, 2002 because our book value decreased during 2002.

PENSION PLAN TABLE

The following table provides estimated annual pension benefits payable to
some of our employees, including Wayne D. Morse, upon retirement at age 65 based
on credited service as of January 1, 2003 under the provisions of the Westlake
Group Salaried Employees' Defined Benefit Plan. None of the other named
executive officers participate in this plan.

<Table>
<Caption>
AVERAGE FINAL EARNINGS
(BASE SALARY PLUS ANNUAL BONUS) APPROXIMATE ANNUAL BENEFIT FOR YEARS OF SERVICE INDICATED(1)
HIGHEST FOUR CONSECUTIVE YEARS --------------------------------------------------------------
OUT OF THE LAST 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ------------------------------- ---------- ---------- ---------- ---------- ----------

$125,000........... $27,032 $36,043 $45,054 $54,064 $ 63,075
150,000........... 33,032 44,043 55,054 66,064 77,075
175,000........... 39,032 52,043 65,054 78,064 91,075
200,000........... 45,032 60,043 75,054 90,064 105,075
225,000........... 45,032 60,043 75,054 90,064 105,075
250,000........... 45,032 60,043 75,054 90,064 105,075
300,000........... 45,032 60,043 75,054 90,064 105,075
400,000........... 45,032 60,043 75,054 90,064 105,075
450,000........... 45,032 60,043 75,054 90,064 105,075
500,000........... 45,032 60,043 75,054 90,064 105,075
</Table>

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

(1) Mr. Morse had 35 estimated credited years of service as of January 1, 2003.

The amounts shown in the above table are necessarily based upon certain
assumptions, including retirement of the employee at age 65 based on credited
services as of January 1, 2003 and payment of the

benefit under the basic form of allowance provided under the Westlake Group
Salaried Employees' Defined Benefit Plan (payment for the life of the employee
five years certain). The amounts will change if the payment is made under any
other form of allowance permitted by the retirement plan or if an employee's
actual retirement occurs after January 1, 2003 since the "annual covered
compensation level" of such employee (one of the factors used in computing the
annual retirement benefits) may change during the employee's subsequent years of
membership service. The covered compensation for which retirement benefits are
computed under the Westlake Group Salaried Employees' Defined Benefit Plan is
the average of the participant's highest four consecutive years out of the last
ten years of base salary plus annual bonus. Base salary and annual bonus amounts
for 2002 are set forth under the "Salary" and "Bonus" headings in the Summary
Compensation Table for Mr. Morse. The benefits shown are not subject to
deduction for Social Security benefits or other offset amounts, including any
offset for payments made from the Goodrich Corporation plan for certain former
employees of Goodrich Corporation, including Mr. Morse.

SEVERANCE AGREEMENTS

We have entered into a severance agreement with Mr. Wilder under which we
have agreed to pay him for twelve months at his then current salary and a bonus
in the event of his involuntary termination, except in the case of cause, death,
disability or retirement.

COMPENSATION OF DIRECTORS

Our directors receive no compensation for their services as directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2002, Albert Chao and James Chao participated in deliberations of
our board of directors concerning executive officer compensation.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the beneficial ownership of our common stock
as of the date of this prospectus by each beneficial owner of 5% or more of the
outstanding shares of common stock, by each of our directors, by each named
executive officer and by all directors and executive officers as a group. To our
knowledge, except as indicated in the footnotes to this table or as provided by
applicable community property laws, the persons named in the table have sole
investment and voting power with respect to the shares of common stock
indicated.

<Table>
<Caption>
COMMON STOCK
----------------------
NUMBER OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) SHARES CLASS
- --------------------------------------- --------- ----------

Westlake Polymer & Petrochemical, Inc....................... 10,000 100.0%
Gulf Polymer & Petrochemical, Inc.(2)....................... 10,000 100.0
T.T. Chao................................................... -- --
James Chao(3)............................................... -- --
Albert Chao(3).............................................. -- --
Dorothy C. Jenkins(3)....................................... -- --
Henry Kahn.................................................. -- --
Wayne D. Morse.............................................. -- --
David R. Hansen............................................. -- --
Warren W. Wilder............................................ -- --
George J. Mangieri.......................................... -- --
All directors and executive officers as a group(3).......... -- --
</Table>

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

(1) The address of each beneficial owner is 2801 Post Oak Boulevard, Houston,
Texas 77056.

(2) Gulf Polymer & Petrochemical, Inc. owns all of the shares of common stock of
Westlake Polymer & Petrochemical, Inc. and, therefore, may be deemed to have
beneficial ownership of the shares of our common stock owned by Westlake
Polymer & Petrochemical, Inc.

(3) James Chao, Albert Chao and Dorothy C. Jenkins are each a trustee with
voting and investment power for three trusts that each own one third of the
voting common stock of Gulf Polymer & Petrochemical, Inc. Accordingly, James
Chao, Albert Chao and Dorothy C. Jenkins together, or each of them
individually, may be deemed to have investment or voting power with respect
to the shares of our common stock beneficially owned by Gulf Polymer &
Petrochemical, Inc.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following summary descriptions of the material terms of agreements to
which we are a party are qualified in their entirety by reference to the
agreement to which each summary description relates.

We currently lease, at market rates, our principal executive offices in
Houston, Texas, under a lease with Westlake Post Oak Center Ltd., one of our
affiliates. Total annual payments under the lease in 2002, 2001 and 2000 were
approximately $1.5 million, $1.7 million and $1.6 million, respectively. We
expect to make payments of approximately $1.6 million under the lease in 2003.
See "Business -- Facilities and Capabilities."

We are party to a federal tax allocation agreement with our ultimate
parent, Gulf Polymer & Petrochemical, Inc., or GPPI. Under this agreement, GPPI
is responsible for the payment of all federal income taxes for the consolidated
group and is entitled to receive any refunds. We must make quarterly deposits
with GPPI equal to the amount of federal tax we would owe if we filed a separate
federal tax return. After each return is filed, we must make an additional
payment to reflect the amount of tax actually paid by the group. GPPI will
generally pay us if we have a tax attribute that reduces the consolidated tax
liability of the group. In 2000, we made estimated tax payments totaling $11.8
million to the Internal Revenue Service on behalf of GPPI for the consolidated
group. In 2001, GPPI sought refunds for the consolidated group totaling $11.3
million of the amount paid in 2000. In 2001, we received $11.3 million from the
IRS on behalf of GPPI. In 2002, GPPI sought a $0.5 million refund for the
consolidated group. We received $0.5 million from the IRS in the first six
months of 2003 on behalf of GPPI.

In June 1998, one of our subsidiaries, Westlake Management Services, Inc.,
entered into a management advice and technical assistance agreement with Titan
Petrochemicals (M) SDN. BDH., Titan Polyethylene (Malaysia) SDN. BHD. and Titan
PP Polymers (M) SDN. BHD., three Malaysian affiliates. Under the agreement,
Westlake Management Services agrees to provide various management,
administrative and expatriate services at cost. The agreement expires on
December 31, 2008. Westlake Management Services received $2.2 million, $2.6
million and $3.1 million for these services in 2002, 2001 and 2000,
respectively, and is expected to receive $1.0 million in 2003.

In 1996, in connection with the construction of the polyethylene plant, we
signed a technology license agreement with BP Chemicals Limited. During 1997, we
assigned the license to Westlake Technology Corporation, a subsidiary of GPPI.
We sublicense the technology and pay a royalty based on production. We paid
royalties of $3.1 million, $3.2 million and $2.9 million in 2002, 2001 and 2000,
respectively, and expect to pay $3.1 million in 2003.

In 1998, we entered into a software sublicense with Westlake Technology
Corporation. Under this agreement, we made software license payments to Westlake
Technology Corporation of $1.3 million and $1.3 million in 2001 and 2000,
respectively. We also made payments for software maintenance support of $0.5
million and $0.7 million in 2001 and 2000, respectively. We made no payments
under the agreement in 2002.

In March 2001, the board of directors of Westlake Olefins Corporation, an
80%-owned subsidiary at that time, declared and paid cash dividends as a return
of capital amounting to $87 million to Westlake Polymer & Petrochemical, Inc.,
our parent company. Immediately following the payment, we received a capital
contribution from Westlake Polymer & Petrochemical, Inc. of $87 million. In
August 2003, we received a capital contribution from Westlake Polymer &
Petrochemical, Inc. consisting of the 20% of common stock of Westlake Olefins
Corporation that we did not own. As a result of this contribution, we now own
100% of Westlake Olefins Corporation.

In 2000, Westlake International Investments Corporation, one of our
subsidiaries, issued a $2.0 million promissory note to Gulf United Investments
Corporation, one of our affiliates. In 2002, accrued interest was added to the
principal and a new $2.3 million promissory note was issued with a maturity date
of August 2004. Interest on this note accrues at prime rate and is due at
maturity. As of December 31, 2002, the principal balance of the note was
$253,459 due to principal payments during 2002.

In 2002, a predecessor of Geismar Vinyls Company LP issued a $117,000
promissory note to Gulf United Investments Corporation. Geismar Vinyls Company
LP became one of our subsidiaries in April 2003 when Westlake Polymer &
Petrochemical, Inc. contributed the stock of Geismar Holdings, Inc. and GVGP,
Inc., the partners of Geismar Vinyls Company LP, to us. The loan accrued
interest at prime rate and was repaid in full in July 2003.

DESCRIPTION OF CERTAIN INDEBTEDNESS

NEW CREDIT FACILITY

On July 31, 2003, we entered into a $200 million senior secured revolving
credit facility that matures in July 2007. Amounts drawn under the new facility
are limited to (1) 85% of the net amount of eligible accounts receivable, plus
(2) the lesser of (a) 70% of the value of lower of cost or market of eligible
inventory, or (b) 85% of the appraised net orderly liquidation value of the
eligible inventory, minus (3) such reserves as Bank of America, the agent, may
establish. Advances on inventory are limited to $120 million. The facility
includes a $50 million sub-limit for letters of credit, and any outstanding
letters of credit will be deducted from availability under the facility.

Amounts drawn under the facility initially bear interest at either LIBOR
plus 2.25% or Bank of America's prime rate plus 0.25%. The interest rate margins
are subject to grid pricing adjustments based on a fixed charge coverage ratio
after the first year. We pay a fee on the unused portion of the facility of 0.5%
per year. We may terminate the new facility at any time, with payment of a
termination fee in the first two years. The new facility is secured by first
priority liens on existing and future acquired accounts receivable and contract
rights, inventory, chattel paper, instruments, documents, deposit accounts and
related general intangibles of our domestic subsidiaries. Each of our domestic
restricted subsidiaries guarantees the new facility.

The new facility contains a number of negative covenants restricting, among
other things, prepayment or redemption of the notes offered by this prospectus,
distributions, dividends and repurchases of capital stock and other equity
interests, acquisitions and investments, indebtedness, liens and affiliate
transactions. We are required to maintain a fixed charge coverage ratio if the
excess availability under the new senior secured credit facility falls below $50
million for any three consecutive business days, or is less than $35 million at
any time. The facility contains customary events of default.

NEW TERM LOAN

On July 31, 2003, we entered into a $120 million senior secured term loan
that matures in July 2010. The term loan provides for increases in the amount of
the loan up to $170 million, but these increases are not pre-committed by the
lenders. Principal payments of 0.25% of the term loan are due quarterly during
the first six years, with the balance due in three quarterly installments of
23.5% of the term loan in seventh year of the loan and the balance due on the
maturity date. Amounts outstanding under the loan bear interest at either LIBOR
plus 3.75% or Bank of America's prime rate plus 2.75%. We may prepay the new
term loan at any time after the first year without penalty. During the first
year, we may prepay up to 35% of the new term loan with the proceeds of equity
offerings at 101%. We must prepay the new term loan with the proceeds from
assets sales or casualty events if the assets sold or subject to a casualty
event are term loan collateral. In addition, we must prepay the term loan with
the proceeds from assets or casualty events if the proceeds are not reinvested
within one year. We must also prepay the new term loan with 50% of excess cash
flow under an annual cash sweep arrangement if excess cash flow for the fiscal
year is at least $2 million.

The new term loan is secured by first priority liens on our Lake Charles
and our Calvert City facilities and some related general intangibles. Our
obligations under this loan are guaranteed by each of our domestic restricted
subsidiaries. The new term loan contains a number of negative covenants
restricting, among other things, prepayment or redemption of the notes offered
by this prospectus, distributions, dividends and repurchases of capital stock
and other equity interests, acquisitions and investments, indebtedness, liens
and affiliate transactions. The new term loan contains customary events of
default.

LOAN RELATED TO TAX-EXEMPT BONDS AND LETTER OF CREDIT

In December 1997, one of our subsidiaries entered into a loan agreement
with Calcasieu Parish Public Trust Authority. The loan was made with proceeds
from the sale of tax-exempt revenue bonds by the trust authority. Our subsidiary
is obligated to make payments to the bond trustee equal to the principal and
interest payments due to the bondholders, for any premium resulting from
redemption of the bonds and for other fees and expenses. Our subsidiary's
payment obligations under the loan agreement are backed by a
71

letter of credit in favor of the trustee for the benefit of the bondholders. As
of June 30, 2003, the total principal outstanding under the loan was $10.9
million. We have agreed to reimburse the letter of credit issuer for any
disbursements it makes under the letter of credit. On July 31, 2003, we obtained
a $12.4 million letter of credit under our new credit facility to assure our
performance under the new letter of credit reimbursement and credit support
agreement that we entered into on the same date with the issuer of the original
letter of credit.

THE EXCHANGE OFFER

Participation in the exchange offer is voluntary, and we urge you to
carefully consider whether to accept. Please consult your financial and tax
advisors in making your own decision on what action to take.

We are offering to issue new registered 8 3/4% Senior Notes due 2011 in
exchange for a like principal amount of our outstanding 8 3/4% Senior Notes due
2011. We may extend, delay or terminate the exchange offer. Holders of old notes
who wish to exchange their notes will need to complete the exchange offer
documentation related to the exchange.

PURPOSE OF THE EXCHANGE OFFER

We sold the old notes in transactions that were exempt from or not subject
to the registration requirements under the Securities Act. Accordingly, the old
notes are subject to transfer restrictions. In general, you may not offer or
sell the old notes unless either they are registered under the Securities Act or
the offer or sale is exempt from or not subject to registration under the
Securities Act and applicable state securities laws.

In connection with the sale of the old notes, we entered into a
registration rights agreement with the initial purchasers of the old notes. In
that agreement, we agreed to use all commercially reasonable efforts to file a
registration statement relating to an offer to exchange the old notes for new
notes and to have that registration statement declared effective by the SEC
within 180 days after the issue date of the old notes. We also agreed to use all
commercially reasonable efforts to complete the exchange offer within 30
business days after the registration statement becomes effective. We are
offering the new notes under this prospectus in an exchange offer for the old
notes to satisfy our obligations under the registration rights agreement.

Each broker-dealer that receives new notes for its own account in exchange
for old notes acquired as a result of market-making activities or other trading
activities may be deemed to be an "underwriter" within the meaning of the
Securities Act and must acknowledge that it will deliver a prospectus in
connection with any resale of such new notes. Please read "Plan of
Distribution."

RESALE OF NEW NOTES

Based on interpretations of the SEC staff in "no action letters" issued to
third parties, we believe that each new note issued in the exchange offer may be
offered for resale, resold and otherwise transferred by you without compliance
with the registration and prospectus delivery provisions of the Securities Act
if:

- you are not our "affiliate" within the meaning of Rule 405 under the
Securities Act;

- you acquire such new notes in the ordinary course of your business; and

- you are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of new notes.

The SEC has not, however, considered the legality of our exchange offer in
the context of a "no action letter," and there can be no assurance that the
staff of the SEC would make a similar determination with respect to our exchange
offer as it has in other interpretations to other parties.

If you tender your old notes in the exchange offer with the intention of
participating in any manner in a distribution of the new notes, you:

- cannot rely on such interpretations by the SEC staff; and

- must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with a secondary resale transaction
of the new notes.

Unless an exemption from registration is otherwise available, the resale by
any holder intending to distribute new notes should be covered by an effective
registration statement under the Securities Act containing the selling holder's
information required by Item 507 or Item 508, as applicable, of
73

Regulation S-K under the Securities Act. This prospectus may be used for an
offer to resell, resale or other retransfer of new notes only as specifically
described in this prospectus. Failure to comply with the registration and
prospectus delivery requirements by a holder subject to these requirements could
result in that holder incurring liability for which it is not indemnified by us.
With respect to broker-dealers, only those that acquired the old notes for their
own account as a result of market-making activities or other trading activities
may participate in the exchange offer. Each broker-dealer that receives new
notes for its own account in exchange for old notes acquired as a result of
market-making activities or other trading activities may be deemed to be an
"underwriter" within the meaning of the Securities Act and must acknowledge that
it will deliver a prospectus in connection with any resale of such new notes.
Please read "Plan of Distribution" for more details regarding the transfer of
new notes.

TERMS OF THE EXCHANGE OFFER

Upon the terms and subject to the conditions described in this prospectus
and in the letter of transmittal, we will accept for exchange any old notes
properly tendered and not withdrawn prior to the expiration date of the exchange
offer. We will issue $1,000 principal amount of new notes in exchange for each
$1,000 principal amount of old notes surrendered under the exchange offer. Old
notes may be tendered only in integral multiples of $1,000. The exchange offer
is not conditioned upon any minimum aggregate principal amount of old notes
being tendered for exchange.

As of the date of this prospectus, $380 million principal amount of old
notes is outstanding. This prospectus and the letter of transmittal are being
sent to all registered holders of old notes. There will be no fixed record date
for determining registered holders of old notes entitled to participate in the
exchange offer.

We intend to conduct the exchange offer in accordance with the provisions
of the registration rights agreement, the applicable requirements of the
Securities Act and the Securities Exchange Act of 1934 and the rules and
regulations of the SEC. Old notes that are not tendered for exchange in the
exchange offer will:

- remain outstanding;

- continue to accrue interest; and

- be entitled to the rights and benefits that holders have under the
indenture relating to the notes and, if applicable, the registration
rights agreement.

However, these old notes will not be freely tradable. See "-- Consequences of
Failure to Exchange" below.

By signing or agreeing to be bound by the letter of transmittal, you
acknowledge that, upon request, you will execute and deliver any additional
documents deemed by the exchange agent or us to be necessary or desirable to
complete the exchange, assignment and transfer of the old notes tendered by you,
including the transfer of such old notes on the account books maintained by DTC.

We will be deemed to have accepted for exchange properly tendered old notes
when we have given oral or written notice of the acceptance to the exchange
agent and complied with the applicable provisions of the registration rights
agreement. The exchange agent will act as agent for the tendering holders for
the purposes of receiving the new notes from us.

If you tender old notes in the exchange offer, you will not be required to
pay brokerage commissions or fees or, subject to the instructions in the letter
of transmittal, transfer taxes with respect to the exchange of old notes. We
will pay all charges and expenses, other than certain applicable taxes described
below, in connection with the exchange offer. It is important that you read the
section "-- Fees and Expenses" for more details about fees and expenses incurred
in the exchange offer.

We will return any old notes that we do not accept for exchange for any
reason without expense to the tendering holder as promptly as practicable after
the expiration or termination of the applicable exchange offer.

EXPIRATION DATE

The exchange offer will expire at 5:00 p.m., New York City time,
on[ ], 200[ ], unless, in our sole discretion, we extend it.

EXTENSIONS; DELAY IN ACCEPTANCE; TERMINATION OR AMENDMENT

We expressly reserve the right, at any time or at various times, to extend
the period of time during which the exchange offer is open. We may delay
acceptance for exchange of any old notes by giving oral or written notice of the
extension to their holders. During any such extensions, all old notes you have
previously tendered and not withdrawn will remain subject to the exchange offer,
and we may accept them for exchange. We do not currently intend to extend the
expiration date.

To extend an exchange offer, we will notify the exchange agent orally or in
writing of any extension. We also will make a public announcement of the
extension no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date.

If any of the conditions described below under "-- Conditions to the
Exchange Offer" have not been satisfied, we reserve the right, in our sole
discretion to:

- delay accepting for exchange any old notes;

- extend the exchange offer; or

- terminate the exchange offer.

We will give oral or written notice of such delay, extension or termination to
the exchange agent. Subject to the terms of the registration rights agreement,
we also reserve the right to amend the terms of the exchange offer in any
manner.

Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to the
registered holders of the old notes. If we amend the exchange offer in a manner
that we determine to constitute a material change, we will promptly disclose
that amendment by means of a prospectus supplement. We will distribute the
supplement to the registered holders of the old notes. Depending upon the
significance of the amendment and the manner of disclosure to the registered
holders, we will extend the exchange offer if the exchange offer would otherwise
expire during such period.

Without limiting the manner in which we may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the exchange offer, we have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.

CONDITIONS TO THE EXCHANGE OFFER

Despite any other term of the exchange offer, if in our reasonable judgment
the exchange offer, or the making of any exchange by a holder of old notes,
would violate applicable law or any applicable interpretation of the staff of
the SEC (due to a change in its current interpretations) or would be impaired by
any action or proceeding that has been instituted or threatened in any court or
by or before any governmental agency with respect to the exchange offer:

- we will not be required to accept for exchange, or exchange any new
notes for, any old notes; and

- we may terminate the exchange offer before accepting any old notes for
exchange.

In addition, we will not be obligated to accept for exchange the old notes
of any holder that has not made to us:

- the representations described below under "-- Procedures for Tendering"
and in the letter of transmittal; and

- such other representations as may be reasonably necessary under
applicable SEC rules, regulations or interpretations to make available
to us an appropriate form for registering the new notes under the
Securities Act.

We expressly reserve the right to amend or terminate the exchange offer,
and to reject for exchange any old notes not previously accepted for exchange in
the exchange offer, upon the occurrence of any of the conditions to that
exchange offer specified above.

These conditions are for our sole benefit, and we may assert them or waive
them in whole or in part at any time or at various times in our sole discretion.
Our failure at any time to exercise any of these rights will not mean that we
have waived our rights. Each right will be deemed an ongoing right that we may
assert at any time or at various times.

In addition, we will not accept for exchange any old notes tendered, and
will not issue new notes in exchange for any such old notes, if at that time any
stop order has been threatened or is in effect with respect to the registration
statement of which this prospectus constitutes a part or the qualification of
the indenture relating to the notes under the Trust Indenture Act of 1939.

PROCEDURES FOR TENDERING

HOW TO TENDER GENERALLY

Only a registered holder of old notes may tender its old notes in the
exchange offer. If you are a beneficial owner of old notes and wish to have the
registered owner tender on your behalf, please see "-- How to Tender if You Are
a Beneficial Owner" below. To tender in the exchange offer, a holder must either
comply with the procedures for manual tender or comply with the automated tender
offer program procedures of DTC described below under "-- Tendering Through
DTC's Automated Tender Offer Program."

To complete a manual tender, a holder must:

- complete, sign and date the letter of transmittal or a facsimile of the
letter of transmittal;

- have the signature on the letter of transmittal guaranteed if the letter
of transmittal so requires; and

- mail or deliver the letter of transmittal or facsimile and deliver the
old notes to the exchange agent prior to the expiration date.

If you wish to tender your old notes and cannot comply with the requirement
to deliver the letter of transmittal and your old notes (including by book-entry
transfer) or use the automated tender offer program of DTC described below
before the expiration date, you must tender your outstanding notes according to
the guaranteed delivery procedures described below.

To be tendered effectively, the exchange agent must receive any physical
delivery of the letter of transmittal and other required documents at its
address provided above under "Prospectus Summary -- The Exchange Agent" prior to
the expiration date. To complete a tender through DTC's automated tender offer
program, the exchange agent must receive, prior to the expiration date, a timely
confirmation of book-entry transfer of such old notes into the exchange agent's
account at DTC according to the procedure for book-entry transfer described
below and a properly transmitted agent's message.

The tender by a holder that is not withdrawn prior to the expiration date
and our acceptance of that tender will constitute an agreement between the
holder and us in accordance with the terms and subject to the conditions
described in this prospectus and in the letter of transmittal.

THE METHOD OF DELIVERY OF OLD NOTES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK.
RATHER THAN MAIL THESE ITEMS, WE RECOMMEND THAT YOU USE AN OVERNIGHT OR COURIER
SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO
THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. YOU SHOULD NOT SEND THE LETTER OF
TRANSMITTAL OR OLD NOTES TO

US. YOU MAY REQUEST YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE TO EFFECT THE ABOVE TRANSACTIONS FOR YOU.

BOOK-ENTRY TRANSFER

The exchange agent will make a request to establish an account with respect
to the old notes at DTC for purposes of the exchange offer promptly after the
date of this prospectus. Any financial institution participating in DTC's system
may make book-entry delivery of old notes by causing DTC to transfer such old
notes into the exchange agent's account at DTC in accordance with DTC's
procedures for transfer. If you are unable to deliver confirmation of the
book-entry tender of your old notes into the exchange agent's account at DTC or
all other documents required by the letter of transmittal to the exchange agent
on or prior to the expiration date, you must tender your old notes according to
the guaranteed delivery procedures described below.

TENDERING THROUGH DTC'S AUTOMATED TENDER OFFER PROGRAM

The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may use DTC's automated tender offer
program to tender its old notes. Accordingly, participants in the program may,
instead of physically completing and signing the letter of transmittal and
delivering it to the exchange agent, transmit their acceptance of the exchange
offer electronically. They may do so by causing DTC to transfer the old notes to
the exchange agent in accordance with its procedures for transfer. DTC will then
send an agent's message to the exchange agent.

An "agent's message" is a message transmitted by DTC to and received by the
exchange agent and forming part of the book-entry confirmation, stating that:

- DTC has received an express acknowledgment from a participant in DTC's
automated tender offer program that is tendering old notes that are the
subject of such book-entry confirmation;

- the participant has received and agrees to be bound by the terms of the
letter of transmittal or, in the case of an agent's message relating to
guaranteed delivery, the participant has received and agrees to be bound
by the applicable notice of guaranteed delivery; and

- we may enforce the agreement against the participant.

HOW TO TENDER IF YOU ARE A BENEFICIAL OWNER

If you beneficially own old notes that are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and you wish to
tender those notes, you should contact the registered holder as soon as possible
and instruct the registered holder to tender on your behalf. If you are a
beneficial owner and wish to tender on your own behalf, you must, prior to
completing and executing the letter of transmittal and delivering your old
notes, either:

- make appropriate arrangements to register ownership of the old notes in
your name; or

- obtain a properly completed bond power from the registered holder of
your old notes.

The transfer of registered ownership may take considerable time and may not
be completed prior to the expiration date.

SIGNATURES AND SIGNATURE GUARANTEES

You must have signatures on a letter of transmittal or a notice of
withdrawal described below guaranteed by an "eligible institution" unless the
old notes are tendered:

- by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the letter
of transmittal and the new notes are being issued

directly to the registered holder of the old notes tendered in the
exchange offer for those new notes; or

- for the account of an eligible institution.

An "eligible institution" is a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States, or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act, in each case that is a member of one of the
recognized signature guarantee programs identified in the letter of transmittal.

WHEN ENDORSEMENTS OR BOND POWERS ARE NEEDED

If a person other than the registered holder of any old notes signs the
letter of transmittal, the old notes must be endorsed or accompanied by a
properly completed bond power. The registered holder must sign the bond power as
the registered holder's name appears on the old notes. An eligible institution
must guarantee that signature.

If the letter of transmittal or any old notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, those
persons should so indicate when signing. Unless we waive this requirement, they
also must submit evidence satisfactory to us of their authority to deliver the
letter of transmittal.

DETERMINATIONS UNDER THE EXCHANGE OFFER

We will determine, in our sole discretion, all questions as to the
validity, form, eligibility, time of receipt, acceptance of tendered old notes
and withdrawal of tendered old notes. Our determination will be final and
binding. We reserve the absolute right to reject any old notes not properly
tendered or any old notes our acceptance of which, in the opinion of our
counsel, might be unlawful. We also reserve the right to waive any defects,
irregularities or conditions of the exchange offer as to particular old notes.
Our interpretation of the terms and conditions of the exchange offer, including
the instructions in the letter of transmittal, will be final and binding on all
parties.

Unless waived, any defects or irregularities in connection with tenders of
old notes must be cured within the time we determine. Neither we, the exchange
agent nor any other person will be under any duty to give notification of
defects or irregularities with respect to tenders of old notes, nor will we or
those persons incur any liability for failure to give such notification. Tenders
of old notes will not be deemed made until such defects or irregularities have
been cured or waived. Any old notes received by the exchange agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned to the tendering holder, unless otherwise
provided in the letter of transmittal, as soon as practicable following the
expiration date.

WHEN WE WILL ISSUE NEW NOTES

In all cases, we will issue new notes for old notes that we have accepted
for exchange in the exchange offer only after the exchange agent timely
receives:

- old notes or a timely book-entry confirmation of such old notes into the
exchange agent's account at DTC; and

- a properly completed and duly executed letter of transmittal and all
other required documents or a properly transmitted agent's message.

RETURN OF OLD NOTES NOT ACCEPTED OR EXCHANGED

If we do not accept any tendered old notes for exchange for any reason
described in the terms and conditions of the exchange offer or if old notes are
submitted for a greater principal amount than the holder desires to exchange, we
will return the unaccepted or non-exchanged old notes without expense to
78

their tendering holder. In the case of old notes tendered by book-entry transfer
into the exchange agent's account at DTC according to the procedures described
above, such non-exchanged old notes will be credited to an account maintained
with DTC. These actions will occur as promptly as practicable after the
rejection of tender or the expiration or termination of the exchange offer.

YOUR REPRESENTATIONS TO US

By signing or agreeing to be bound by the letter of transmittal, you will
represent to us that, among other things:

- any new notes that you receive will be acquired in the ordinary course
of your business;

- you have no arrangement or understanding with any person to participate
in the distribution of the old notes or the new notes;

- you are not our "affiliate," as defined in Rule 405 of the Securities
Act, or, if you are our affiliate, you will comply with the registration
and prospectus delivery requirements of the Securities Act to the extent
applicable;

- if you are not a broker-dealer, you are not engaged in, and do not
intend to engage in, the distribution of the new notes;

- if you are a broker-dealer, you will receive new notes for your own
account in exchange for old notes that you acquired as a result of
market-making activities or other trading activities, and you will
deliver a prospectus in connection with any resale of such new notes;

- if you are a broker-dealer, you did not purchase the old notes to be
exchanged for the new notes from us; and

- you are not acting on behalf of any person who could not truthfully and
completely make the foregoing representations.

GUARANTEED DELIVERY PROCEDURES

If you wish to tender your old notes but they are not immediately available
or if you cannot deliver your old notes, the letter of transmittal or any other
required documents to the exchange agent or comply with the applicable
procedures under DTC's automated tender offer program prior to the expiration
date, you may tender if:

- the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States, or an eligible guarantor
institution;

- prior to the expiration date, the exchange agent receives from that
firm, bank, trust company or institution either a properly completed and
duly executed notice of guaranteed delivery by facsimile transmission,
mail or courier or a properly transmitted agent's message relating to a
notice of guaranteed delivery:

- stating your name and address, the registration number or numbers of
your old notes and the principal amount of old notes tendered;

- stating that the tender is being made thereby; and

- guaranteeing that, within three New York Stock Exchange trading days
after the expiration date of the exchange offer, the letter of
transmittal or facsimile thereof or agent's message in lieu thereof,
together with the old notes or a book-entry confirmation, and any
other documents required by the letter of transmittal, will be
deposited by the eligible guarantor institution with the exchange
agent; and

- the exchange agent receives such properly completed and executed letter
of transmittal or facsimile or agent's message, as well as all tendered
old notes in proper form for transfer or a book-entry confirmation, and
all other documents required by the letter of transmittal, within three
New York Stock Exchange trading days after the expiration date.

Upon request to the exchange agent, the exchange agent will send a notice
of guaranteed delivery to you if you wish to tender your old notes according to
the guaranteed delivery procedures described above.

WITHDRAWAL OF TENDERS

Except as otherwise provided in this prospectus, you may withdraw your
tender at any time prior to 5:00 p.m., New York City time, on the expiration
date. For a withdrawal to be effective:

- the exchange agent must receive a written notice of withdrawal at the
address listed above under "Prospectus Summary -- The Exchange Agent";
or

- the withdrawing holder must comply with the appropriate procedures of
DTC's automated tender offer program.

Any notice of withdrawal must:

- specify the name of the person who tendered the old notes to be
withdrawn;

- identify the old notes to be withdrawn, including the registration
number or numbers and the principal amount of such old notes;

- be signed by the person who tendered the old notes in the same manner as
the original signature on the letter of transmittal used to deposit
those old notes, or be accompanied by documents of transfer sufficient
to permit the trustee to register the transfer into the name of the
person withdrawing the tender; and

- specify the name in which such old notes are to be registered, if
different from that of the person who tendered the old notes.

If old notes have been tendered under the procedure for book-entry transfer
described above, any notice of withdrawal must specify the name and number of
the account at DTC to be credited with the withdrawn old notes and otherwise
comply with the procedures of DTC.

We will determine, in our sole discretion, all questions as to the
validity, form, eligibility and time of receipt of notice of withdrawal, and our
determination will be final and binding on all parties. We will deem any old
notes so withdrawn not to have been validly tendered for exchange for purposes
of the exchange offer.

Any old notes that have been tendered for exchange but that are not
exchanged for any reason will be returned to their holder without cost to the
holder or, in the case of old notes tendered by book-entry transfer into the
exchange agent's account at DTC according to the procedures described above,
such old notes will be credited to an account maintained with DTC for the old
notes. This return or crediting will take place as soon as practicable after
withdrawal. You may retender properly withdrawn old notes by following one of
the procedures described under "-- Procedures for Tendering" above at any time
on or prior to the expiration date.

FEES AND EXPENSES

We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, we may make additional solicitation by
facsimile, email, telephone or in person by our officers and regular employees
and those of our affiliates.

We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker-dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and reimburse it for its related
80

reasonable out-of-pocket expenses. We may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this prospectus, letters of transmittal
and related documents to the beneficial owners of the old notes and in handling
or forwarding tenders for exchange.

We will pay the cash expenses to be incurred in connection with the
exchange offer including:

- SEC registration fees;

- fees and expenses of the exchange agent and trustee;

- accounting and legal fees and printing costs; and

- related fees and expenses.

TRANSFER TAXES

We will pay all transfer taxes, if any, applicable to the exchange of old
notes in the exchange offer. The tendering holder will, however, be required to
pay any transfer taxes, whether imposed on the registered holder or any other
person, if:

- certificates representing new notes or old notes for principal amounts
not tendered or accepted for exchange are to be delivered to, or are to
be issued in the name of, any person other than the registered holder of
old notes tendered;

- tendered old notes are registered in the name of any person other than
the person signing the letter of transmittal; or

- a transfer tax is imposed for any reason other than the exchange of old
notes in the exchange offer.

If satisfactory evidence of payment of any transfer taxes payable by a
tendering holder is not submitted with the letter of transmittal, the amount of
such transfer taxes will be billed directly to that tendering holder. The
exchange agent will retain possession of new notes with a face amount equal to
the amount of the transfer taxes due until it receives payment of the taxes.

CONSEQUENCES OF FAILURE TO EXCHANGE

If you do not tender your old notes for new notes in the exchange offer, or
if you tender your old notes but subsequently withdraw them, your old notes will
remain outstanding and continue to accrue interest, but will not retain any
rights under the registration rights agreement (except in limited circumstances
involving the initial purchasers and specified broker-dealers) or accrue
additional interest under that agreement. IN ADDITION, YOU WILL REMAIN SUBJECT
TO THE EXISTING RESTRICTIONS ON TRANSFER OF THE OLD NOTES. IN GENERAL, YOU MAY
NOT OFFER OR SELL THE OLD NOTES UNLESS EITHER THEY ARE REGISTERED UNDER THE
SECURITIES ACT OR THE OFFER OR SALE IS EXEMPT FROM OR NOT SUBJECT TO
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
Except as required by the registration rights agreement, we do not intend to
register resales of the old notes under the Securities Act.

THE TENDER OF OLD NOTES IN THE EXCHANGE OFFER WILL REDUCE THE PRINCIPAL
AMOUNT OF THE OLD NOTES. DUE TO THE CORRESPONDING REDUCTION IN LIQUIDITY, THIS
MAY HAVE AN ADVERSE EFFECT UPON, AND INCREASE THE VOLATILITY OF, THE MARKET
PRICE OF ANY OLD NOTES THAT YOU CONTINUE TO HOLD FOLLOWING COMPLETION OF THE
EXCHANGE OFFER.

ACCOUNTING TREATMENT

We will not recognize a gain or loss for accounting purposes upon the
consummation of the exchange offer. We will amortize our expenses of the
exchange offer over the term of new notes in accordance with U.S. generally
accepted accounting principles.

OTHER

Participation in the exchange offer is voluntary, and you should carefully
consider whether to accept. You are urged to consult your financial and tax
advisors in making your decision on what action to take. In the future, we may
seek to acquire untendered old notes in open market or privately negotiated
transactions, through subsequent exchange offers or otherwise. We have no
present plan to acquire any old notes that are not tendered in the exchange
offer or to file a registration statement to permit resales of any untendered
old notes, except as required by the registration rights agreement.

DESCRIPTION OF NOTES

You can find the definitions of certain terms used in this description
under the subheading "Certain Definitions." In this description, the words
"Westlake," "we," "us" and "our" refer only to Westlake Chemical Corporation and
not to any of its subsidiaries.

The old notes were, and the new notes will be, issued under an indenture
dated as of July 31, 2003 among Westlake, the Guarantors and JPMorgan Chase
Bank, as trustee. The terms of the notes include those stated in the indenture
and those made part of the indenture by reference to the Trust Indenture Act of
1939, as amended.

As described below under "--Registration Rights; Additional Interest," we
are filing a registration statement to enable holders of old notes to exchange
their notes for publicly registered notes having substantially identical terms,
except for provisions relating to transfer restrictions and additional interest.
The old notes, and the new notes issued in the exchange offer and any debt
securities issued in the private exchange described below will constitute a
single series of securities under the indenture and therefore will vote together
as a single class for purposes of determining whether holders of the requisite
percentage in aggregate principal amount thereof have taken actions or exercised
rights they are entitled to take or exercise under the indenture. We are
required under specified circumstances to file a shelf registration statement to
cover resales of the old notes. If we fail to satisfy specified obligations
under the registration rights agreement, we may be required to pay additional
interest to holders of the old notes.

The following description is a summary of the material provisions of the
indenture and the registration rights agreement. It does not restate these
agreements in their entirety. We urge you to read the indenture and the
registration rights agreement because they, and not this description, define
your rights as holders of the notes. We have filed the indenture and the
registration rights agreement as exhibits to the registration statement of which
this prospectus is a part. Certain defined terms used in this description but
not defined below under "-- Certain Definitions" have the meanings assigned to
them in the indenture and the registration rights agreement.

The registered holder of a note will be treated as the owner of it for all
purposes. Only registered holders will have rights under the indenture.

BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES

THE NOTES

The notes will be:

- general unsecured obligations of Westlake;

- pari passu in right of payment with all existing and future unsecured
senior Indebtedness of Westlake;

- senior in right of payment to any future subordinated Indebtedness of
Westlake; and

- unconditionally guaranteed by the Guarantors.

THE GUARANTEES

Westlake's payment obligations under the notes will be guaranteed by all of
Westlake's Domestic Subsidiaries. Each guarantee will be:

- a general unsecured obligation of the Guarantor;

- pari passu in right of payment with any existing and future unsecured
senior Indebtedness of that Guarantor; and

- senior in right of payment to any future subordinated Indebtedness of
that Guarantor.

Not all of our subsidiaries will guarantee the notes. In the event of a
bankruptcy, liquidation or reorganization of any of these non-guarantor
subsidiaries, that non-guarantor subsidiary will pay the holders of its debt and
its trade creditors before it will be able to distribute any of its assets to
us. The non-guarantor subsidiaries generated 2.0% of our consolidated net sales
for the year ended December 31, 2002 and held 3.3% of our consolidated assets as
of June 30, 2003.

As of the date of the indenture, all of our Subsidiaries will be
"Restricted Subsidiaries," other than the Subsidiary whose sole asset is our
interest in our China joint venture and our existing special purpose subsidiary
related to our accounts receivable securitization facility that was terminated
on July 31, 2003 in connection with our refinancing. However, under the
circumstances described below under the caption "-- Certain
Covenants -- Designation of Restricted and Unrestricted Subsidiaries," we will
be permitted to designate certain of our subsidiaries as "Unrestricted
Subsidiaries." Our Unrestricted Subsidiaries will not be subject to many of the
restrictive covenants in the indenture. Our Unrestricted Subsidiaries will not
guarantee the notes.

PRINCIPAL, MATURITY AND INTEREST

Westlake issued $380.0 million in aggregate principal amount of notes in
the original offering. Westlake may issue additional notes from time to time
without the consent of the holders. Any issuance of additional notes is subject
to all of the covenants in the indenture, including the covenant described below
under the caption "-- Certain Covenants -- Incurrence of Indebtedness and
Issuance of Preferred Stock." The notes and any additional notes subsequently
issued under the indenture will be treated as a single class for all purposes
under the indenture, including, without limitation, waivers, amendments,
redemptions and offers to purchase. Westlake will issue notes in denominations
of $1,000 and integral multiples of $1,000. The notes will mature on July 15,
2011.

Interest on the notes will accrue at the rate of 8 3/4% per annum and will
be payable semi-annually in arrears on January 15 and July 15, commencing on
January 15, 2004. Interest on overdue principal and interest will accrue at a
rate that is 1% higher than the then applicable interest rate on the notes.
Westlake will make each interest payment to the holders of record on the
immediately preceding January 1 and July 1.

Interest on the notes will accrue from the date of original issuance or, if
interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.

METHODS OF RECEIVING PAYMENTS ON THE NOTES

If a holder of notes with an aggregate principal amount in excess of $1.0
million has given wire transfer instructions to Westlake, Westlake will pay all
principal, interest and premium, if any, on that holder's notes in accordance
with those instructions. All other payments on notes will be made at the office
or agency of the paying agent and registrar within the City and State of New
York unless Westlake elects to make interest payments by check mailed to the
noteholders at their addresses set forth in the register of holders.

PAYING AGENT AND REGISTRAR FOR THE NOTES

The trustee is acting as paying agent and registrar. Westlake may change
the paying agent or registrar without prior notice to the holders of the notes,
and Westlake or any of its Domestic Subsidiaries may act as paying agent or
registrar.

TRANSFER AND EXCHANGE

A holder may transfer or exchange notes in accordance with the provisions
of the indenture. The registrar and the trustee may require a holder, among
other things, to furnish appropriate endorsements and transfer documents in
connection with a transfer of notes. Holders will be required to pay all taxes
and

other governmental charges due on transfer. Westlake is not required to transfer
or exchange any note selected for redemption. Also, Westlake is not required to
transfer or exchange any note for a period of 15 days before a selection of
notes to be redeemed.

GUARANTEES

Westlake's payment obligations under the notes are guaranteed by each of
Westlake's current and future Domestic Subsidiaries. These Guarantees are joint
and several obligations of the Guarantors. The obligations of each Guarantor
under its Guarantee will be limited as necessary to prevent that Guarantee from
constituting a fraudulent transfer or conveyance under applicable law. See "Risk
Factors -- Risks Relating to the Offering -- Federal and state statutes allow
courts, under specific circumstances, to void guarantees and require note
holders to return payments received from guarantors."

A Guarantor may not sell or otherwise dispose of all or substantially all
of its assets to, or consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person), another Person, other than Westlake or
another Guarantor, unless:

(1) immediately after giving effect to that transaction, no Default or
Event of Default exists; and

(2) either:

(a) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation
or merger (in each case if other than the Guarantor) assumes all the
obligations of that Guarantor under the indenture and its Guarantee
pursuant to a supplemental indenture satisfactory to the trustee and
under the registration rights agreement; or

(b) if applicable, the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of
the indenture.

The Guarantee of a Guarantor will be released:

(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way
of merger or consolidation) to a Person that is not (either before or
after giving effect to such transaction) Westlake or a Restricted
Subsidiary of Westlake, if the sale or other disposition does not
violate the "Asset Sale" provisions of the indenture;

(2) in connection with any sale or other disposition of all of
the Capital Stock of a Guarantor to a Person that is not (either
before or after giving effect to such transaction) Westlake or a
Subsidiary of Westlake, if the sale or other disposition does not
violate the "Asset Sale" provisions of the indenture;

(3) if Westlake designates any Restricted Subsidiary that is a
Guarantor to be an Unrestricted Subsidiary in accordance with the
applicable provisions of the indenture; or

(4) upon legal defeasance or satisfaction and discharge of the
notes as provided below under the captions "-- Legal Defeasance and
Covenant Defeasance" and "-- Satisfaction and Discharge."

See "-- Repurchase at the Option of Holders -- Asset Sales."

OPTIONAL REDEMPTION

At any time on or prior to July 15, 2007, Westlake may on any one or more
occasions redeem up to 35% of the aggregate principal amount of notes issued
under the indenture at a redemption price of

108.75% of the principal amount, plus accrued and unpaid interest and additional
interest, if any, to the redemption date, with the net cash proceeds of one or
more Public Equity Offerings; provided that:

(1) at least 65% of the aggregate principal amount of notes issued
under the indenture remains outstanding immediately after the occurrence of
such redemption (excluding notes held by Westlake and its Subsidiaries);
and

(2) the redemption occurs within 60 days of the date of the closing of
such Public Equity Offering.

At any time prior to July 15, 2007, Westlake may also redeem all or a part
of the notes at a redemption price equal to 100% of the principal amount of
notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest, to the redemption date, subject to the rights of noteholders on the
relevant record date to receive interest due on the relevant interest payment
date.

Except pursuant to the preceding paragraphs, the notes will not be
redeemable at Westlake's option prior to July 15, 2007.

On or after July 15, 2007, Westlake may redeem all or a part of the notes
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest and additional interest, if any, on
the notes redeemed, to the applicable redemption date, if redeemed during the
twelve-month period beginning on July 15 of the years indicated below, subject
to the rights of noteholders on the relevant record date to receive interest on
the relevant interest payment date:

<Table>
<Caption>
YEAR PERCENTAGE
- ---- ----------

2007........................................................ 104.375%
2008........................................................ 102.917%
2009........................................................ 101.458%
2010 and thereafter......................................... 100.000%
</Table>

SELECTION AND NOTICE

If less than all of the notes are to be redeemed at any time, the trustee
will select notes for redemption as follows:

(1) if the notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the notes are listed; or

(2) if the notes are not listed on any national securities exchange,
on a pro rata basis, by lot or by such method as the trustee deems fair and
appropriate.

Westlake will redeem notes only in principal amounts of $1,000 and integral
multiples of $1,000. Notices of redemption will be mailed by first class mail at
least 30 but not more than 60 days before the redemption date to each holder of
notes to be redeemed at its registered address, except that redemption notices
may be mailed more than 60 days prior to a redemption date if the notice is
issued in connection with a defeasance of the notes or a satisfaction and
discharge of the indenture. Notices of redemption may not be conditional.

If any note is to be redeemed in part only, the notice of redemption that
relates to that note will state the portion of the principal amount of that note
that is to be redeemed. A new note in principal amount equal to the unredeemed
portion of the original note will be issued in the name of the holder of notes
upon cancellation of the original note. Notes called for redemption become due
on the date fixed for redemption. Unless Westlake defaults in the payment of the
redemption amount, on and after the redemption date, interest ceases to accrue
on notes or portions of them called for redemption.

MANDATORY REDEMPTION

Westlake is not required to make mandatory redemption or sinking fund
payments with respect to the notes.

REPURCHASE AT THE OPTION OF HOLDERS

CHANGE OF CONTROL

If a Change of Control occurs, each holder of notes will have the right to
require Westlake to repurchase all or any part (equal to $1,000 or an integral
multiple of $1,000) of that holder's notes pursuant to a Change of Control Offer
on the terms set forth in the indenture. In the Change of Control Offer,
Westlake will offer a Change of Control Payment in cash equal to 101% of the
aggregate principal amount of notes repurchased plus accrued and unpaid interest
and additional interest, if any, on the notes repurchased, to the date of
purchase, subject to the rights of noteholders on the relevant record date to
receive interest due on the relevant interest payment date. Within 30 days
following any Change of Control, Westlake will mail a notice to each holder
describing the transaction or transactions that constitute the Change of Control
and offering to repurchase notes on the Change of Control Payment Date specified
in the notice, which date will be no earlier than 30 days and no later than 60
days from the date such notice is mailed, pursuant to the procedures required by
the indenture and described in such notice.

On the Change of Control Payment Date, Westlake will, to the extent lawful:

(1) accept for payment all notes or portions of notes properly
tendered pursuant to the Change of Control Offer;

(2) deposit with the paying agent an amount equal to the Change of
Control Payment in respect of all notes or portions of notes properly
tendered; and

(3) deliver or cause to be delivered to the trustee the notes properly
accepted together with an officers' certificate stating the aggregate
principal amount of notes or portions of notes being purchased by Westlake.

The paying agent will promptly pay to each holder of notes properly
tendered the Change of Control Payment for such notes, and the trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each holder a new note equal in principal amount to any unpurchased portion of
the notes surrendered, if any; provided that each new note will be in a
principal amount of $1,000 or an integral multiple of $1,000.

The provisions described above requiring Westlake to make a Change of
Control Offer following a Change of Control will be applicable whether or not
any other provisions of the indenture, including those described below under
"-- Certain Covenants -- Merger, Consolidation or Sale of Assets," are
applicable to the transaction. Except as described above with respect to a
Change of Control, the indenture does not contain provisions that permit the
holders of the notes to require that Westlake repurchase or redeem the notes in
the event of a takeover, recapitalization or similar transaction.

Westlake will not be required to make a Change of Control Offer upon a
Change of Control if (1) a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the indenture applicable to a Change of Control Offer made by Westlake and
purchases all notes properly tendered and not withdrawn under the Change of
Control Offer, or (2) notice of redemption has been given pursuant to the
indenture as described above under the caption "-- Selection and Notice," unless
and until there is a default in payment of the applicable redemption price.

The definition of Change of Control includes a phrase relating to the
direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of Westlake and its
Restricted Subsidiaries taken as a whole. Although there is a limited body of
case law interpreting the phrase "substantially all," there is no established
quantitative definition of the phrase under applicable

law. Accordingly, the ability of a holder of notes to require Westlake to
repurchase its notes as a result of a sale, lease, transfer, conveyance or other
disposition of less than all of the assets of Westlake and its Restricted
Subsidiaries taken as a whole to another Person or group may be uncertain.

ASSET SALES

Westlake will not, and will not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale unless:

(1) Westlake or the Restricted Subsidiary, as the case may be,
receives consideration at the time of the Asset Sale at least equal to the
Fair Market Value (as determined by Westlake's Board of Directors and
evidenced by a resolution of the Board of Directors set forth in an
officers' certificate delivered to the trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of; and

(2) at least 75% of the consideration received in the Asset Sale by
Westlake or such Restricted Subsidiary is in the form of cash or Cash
Equivalents or a controlling interest in a business engaged in a Permitted
Business. For purposes of this provision, each of the following will also
be deemed to be cash:

(a) any liabilities, as shown on its most recent balance sheet, of
Westlake or such Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the
notes or any related Guarantee) that are assumed by the transferee of
any such assets pursuant to a customary novation agreement that releases
Westlake or such Restricted Subsidiary from further liability;

(b) any securities, notes or other obligations received by Westlake
or any such Restricted Subsidiary from such transferee that are
promptly, subject to ordinary settlement periods, converted or monetized
by Westlake or such Restricted Subsidiary into cash, to the extent of
the cash received in that conversion or monetization; and

Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
Westlake (or the applicable Restricted Subsidiary, as the case may be) may apply
those Net Proceeds, at its option:

(1) to repay Indebtedness and other Obligations under a Credit
Facility and, if the Indebtedness repaid is revolving credit Indebtedness,
to correspondingly reduce commitments with respect thereto;

(2) to acquire all or substantially all of the assets of, or any
Capital Stock of, any Person or division thereof conducting a Permitted
Business, if, in the case of any such acquisition of Capital Stock and
after giving effect thereto, such Person will be a Restricted Subsidiary of
Westlake (or enter into a binding commitment for any such acquisition);
provided that such binding commitment shall be treated as a permitted
application of Net Proceeds from the date of such commitment until and only
until the earlier of (x) the date on which such acquisition is consummated
and (y) the 180th day following the expiration of the aforementioned
360-day period. If the acquisition or expenditure contemplated by such
binding commitment is not consummated on or before such 180th day and
Westlake or such Restricted Subsidiary shall not have applied such Net
Proceeds pursuant to clause (1), (3) or (4) of this paragraph on or before
such 180th day, such commitment shall be deemed not to have been a
permitted application of Net Proceeds;

(3) to make a capital expenditure; or

(4) to acquire other assets that are not classified as current assets
under GAAP and that are used or useful in a Permitted Business.

Pending the final application of any Net Proceeds, Westlake may temporarily
reduce revolving credit borrowings or otherwise invest the Net Proceeds in any
manner that is not prohibited by the indenture. Any Net Proceeds from Asset
Sales that are not applied or invested as provided in the preceding
88

paragraph will constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $15.0 million, Westlake will make an Asset Sale Offer to all
holders of notes and all holders of other Pari Passu Indebtedness containing
provisions similar to those set forth in the indenture with respect to offers to
purchase or redeem with the proceeds of asset sales to purchase the maximum
principal amount of notes and such other Pari Passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
will be equal to 100% of principal amount plus accrued and unpaid interest and
additional interest, if any, to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
Westlake may use those Excess Proceeds for any purpose not otherwise prohibited
by the indenture. If the aggregate principal amount of notes and other Pari
Passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the trustee will select the notes and such other Pari Passu
Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds will be reset at zero.

Westlake will comply with the provisions of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent those
provisions are applicable in connection with each repurchase of notes pursuant
to a Change of Control Offer or an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Change of
Control or Asset Sale provisions of the indenture, Westlake will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Change of Control or Asset Sale provisions of
the indenture by virtue of such conflict.

The agreements governing Westlake's other Indebtedness contain, and future
agreements may contain, prohibitions of certain events, including events that
would constitute a Change of Control or an Asset Sale and including repurchases
of or other prepayments in respect of the notes. The exercise by the holders of
notes of their right to require Westlake to repurchase the notes upon a Change
of Control or an Asset Sale could cause a default under these other agreements,
even if the Change of Control or Asset Sale itself does not, due to the
financial effect of such repurchases on Westlake. In the event a Change of
Control or Asset Sale occurs at a time when Westlake is prohibited from
purchasing notes, Westlake could seek the consent of its senior lenders to the
purchase of notes or could attempt to refinance the borrowings that contain such
prohibition. If Westlake does not obtain such consent or repay those borrowings,
Westlake will remain prohibited from purchasing notes. In that case, Westlake's
failure to purchase tendered notes would constitute an Event of Default under
the indenture which may, in turn, constitute a default under the other
indebtedness. Finally, Westlake's ability to pay cash to the holders of notes
upon a repurchase may be limited by Westlake's then existing financial
resources. See "Risk Factors -- Risks Relating to the Offering -- We may not
have the ability to raise the funds necessary to finance the change of control
offer required by the indenture."

CERTAIN COVENANTS

RESTRICTED PAYMENTS

Westlake will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly:

(1) declare or pay any dividend or make any other distribution on
account of Westlake's or any of its Restricted Subsidiaries' Equity
Interests (including, without limitation, any payment in connection with
any merger or consolidation involving Westlake or any of its Restricted
Subsidiaries) or to the direct or indirect holders of Westlake's or any of
its Restricted Subsidiaries' Equity Interests in their capacity as such
(other than dividends or distributions payable in Equity Interests (other
than Disqualified Stock) of Westlake or to Westlake or a Restricted
Subsidiary of Westlake);

(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving Westlake) any Equity Interests of Westlake or any
direct or indirect parent of Westlake;

(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value, any Indebtedness of
Westlake or any Guarantor that is contractually subordinated to the notes
or any Guarantee (excluding any intercompany Indebtedness between or among
Westlake and any of its Restricted Subsidiaries), except a payment of
interest or principal at or after the Stated Maturity of such interest or
principal; or

(4) make any Restricted Investment

(all such payments and other actions set forth in these clauses (1) through (4)
above being collectively referred to as "Restricted Payments"), unless, at the
time of and after giving effect to such Restricted Payment:

(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment; and

(2) Westlake would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of the covenant
described below under the caption "-- Incurrence of Indebtedness and
Issuance of Preferred Stock;" and

(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by Westlake and its Restricted Subsidiaries
since the date of the indenture (excluding Restricted Payments permitted by
clauses (2), (3), (4), (6), (7), (8), (9), (10) and (11) of the next
succeeding paragraph), is less than the sum, without duplication, of:

(a) 50% of the Consolidated Net Income of Westlake for the period
(taken as one accounting period) from the beginning of the first fiscal
quarter commencing after the date of the indenture to the end of
Westlake's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit); provided, however, that if at any
time after the date of the indenture the notes are rated Investment
Grade, the percentage will be 100% of Consolidated Net Income for such
period; provided, further, however, that if such Restricted Payment is
to be made in reliance upon an additional amount permitted pursuant to
the immediately preceding proviso, the notes must be rated Investment
Grade at the time such Restricted Payment is declared or, if not
declared, made, plus

(b) 100% of the aggregate net cash proceeds received by Westlake
since the date of the indenture as a contribution to its common equity
capital or by Westlake or any of its Restricted Subsidiaries from the
issue or sale of Equity Interests of Westlake (other than Disqualified
Stock) or from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt securities of
Westlake or any of its Restricted Subsidiaries that have been converted
into or exchanged for such Equity Interests (other than Equity Interests
(or Disqualified Stock or debt securities) sold to a Subsidiary of
Westlake), plus

(c) to the extent that any Restricted Investment that was made
after the date of the indenture is sold for cash or otherwise
liquidated, repaid for cash or otherwise reduced, the lesser of (i) the
cash return of capital with respect to such Restricted Investment (less
the cost of disposition, if any) and (ii) the initial amount of such
Restricted Investment, plus

(d) to the extent that any Unrestricted Subsidiary of Westlake is
redesignated as a Restricted Subsidiary after the date of the indenture,
the Fair Market Value of Westlake's Investment in such Subsidiary as of
the date of such redesignation, plus

(e) 50% of any dividends received by Westlake or a Restricted
Subsidiary of Westlake that is a Guarantor after the date of the
indenture from an Unrestricted Subsidiary or a Joint Venture, to the
extent that such dividends were not otherwise included in Consolidated
Net Income of Westlake for such period; provided, however, that if at
any time after the date of the
90

indenture the notes are rated Investment Grade, the percentage will be
100% of any such dividends; provided, further, however, that if such
Restricted Payment is to be made in reliance upon an additional amount
permitted pursuant to the immediately preceding proviso, the notes must
be rated Investment Grade at the time such Restricted Payment is
declared or, if not declared, made.

So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit:

(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of the indenture;

(2) the making of any Restricted Payment in exchange for, or out of
the net cash proceeds of the substantially concurrent issuance or sale
(other than to a Subsidiary of Westlake) of, Equity Interests of Westlake
(other than Disqualified Stock) or from the substantially concurrent
contribution of common equity capital to Westlake; provided that the amount
of any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition will be excluded
from clause (3) (b) of the preceding paragraph;

(3) the defeasance, redemption, repurchase or other acquisition of
Indebtedness of Westlake or any Guarantor that is contractually
subordinated to the notes or to any Guarantee of the notes with the net
cash proceeds from a substantially concurrent incurrence of Permitted
Refinancing Indebtedness;

(4) the payment of any dividend (or, in the case of any partnership or
limited liability company, any similar distribution) by a Restricted
Subsidiary of Westlake to Westlake or another Restricted Subsidiary, or the
purchase, redemption, or other acquisition or retirement of any Equity
Interests in a Restricted Subsidiary held by Westlake or another Restricted
Subsidiary;

(5) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of Westlake or any Restricted Subsidiary of
Westlake held by any current or former officer, director or employee of
Westlake or any of its Restricted Subsidiaries pursuant to any equity
subscription agreement, stock option agreement, shareholders' agreement or
similar plan or agreement; provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests may not
exceed $1.0 million in any twelve-month period;

(6) the repurchase of Equity Interests deemed to occur upon the
exercise of stock options to the extent such Equity Interests represent a
portion of the exercise price of those stock options;

(7) the declaration and payment of dividends to holders of any class
or series of Disqualified Stock of Westlake or any Restricted Subsidiary of
Westlake issued on or after the date of the indenture in accordance with
the Fixed Charge Coverage Ratio test described below under the caption
"-- Incurrence of Indebtedness and Issuance of Preferred Stock";

(8) distributions or payments of Receivables Fees;

(9) the repurchase of any Indebtedness of Westlake or any Guarantor
that is contractually subordinated to the notes or to any Guarantee of the
notes at a purchase price not greater than 101% of the principal amount
thereof in the event of (x) a change of control pursuant to a provision no
more favorable to the holders thereof than the provision described under
"-- Repurchase at the Option of the Holders -- Change of Control" or (y) an
Asset Sale (pursuant to a provision no more favorable to the holders
thereof than the provision described under "-- Repurchase at the Option of
the Holders -- Asset Sales"); provided that in each case, prior to such
repurchase Westlake has made a Change of Control Offer or Asset Sale Offer,
as applicable, and repurchased all notes that were validly tendered for
payment in connection with such Change of Control Offer or Asset Sale
Offer;

(10) Permitted Payments to Parent; and

(11) other Restricted Payments in an aggregate amount not to exceed
$25.0 million since the date of the indenture.

The amount of all Restricted Payments (other than cash) will be the Fair
Market Value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by Westlake or such Restricted Subsidiary,
as the case may be, pursuant to the Restricted Payment. The Fair Market Value of
any assets or securities that are required to be valued by this covenant will be
determined by the Board of Directors whose resolution with respect thereto will
be delivered to the trustee. The Board of Directors' determination must be based
upon an opinion or appraisal issued by an accounting, appraisal or investment
banking firm of national standing if the Fair Market Value exceeds $15.0
million.

INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK

Westlake will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and Westlake
will not issue any Disqualified Stock and will not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock; provided, however, that
Westlake may incur Indebtedness (including Acquired Debt) or issue Disqualified
Stock and the Guarantors may incur Indebtedness or issue preferred stock, if the
Fixed Charge Coverage Ratio for Westlake's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock or preferred stock is issued would have been at least 2.0 to
1, determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to
the applicable transaction related thereto), as if the additional Indebtedness
had been incurred (and such transaction had occurred) or the preferred stock or
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.

The first paragraph of this covenant will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):

(1) the incurrence by Westlake or any Guarantor of additional
Indebtedness and letters of credit under Credit Facilities in an aggregate
principal amount at any one time outstanding under this clause (1) (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of Westlake and its Subsidiaries thereunder)
not to exceed the greater of (x) $320.0 million less the aggregate amount
of all Net Proceeds of Asset Sales applied by Westlake or any of its
Restricted Subsidiaries since the date of the indenture to repay any term
Indebtedness under a Credit Facility or to repay any revolving credit
Indebtedness under a Credit Facility and effect a corresponding commitment
reduction thereunder pursuant to the covenant described above under the
caption "-- Repurchase at the Option of Holders -- Asset Sales" or (y) the
amount of the Borrowing Base as of the date of such incurrence;

(2) the incurrence by Westlake and its Restricted Subsidiaries of the
Existing Indebtedness;

(3) the incurrence by Westlake and the Guarantors of Indebtedness
represented by the notes and the related Guarantees to be issued on the
date of the indenture and the exchange notes and the related Guarantees to
be issued in accordance with the registration rights agreement;

(4) the incurrence by Westlake or any of its Restricted Subsidiaries
of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, incurred for the
purpose of financing all or any part of the purchase price or cost of
design, construction, installation or improvement of property, plant or
equipment used or usable in a Permitted Business, in an aggregate principal
amount, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to this
clause (4), not to exceed $10.0 million at any time outstanding;

(5) the incurrence by Westlake or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to extend, refund, refinance, renew, defease or replace
Indebtedness (other than intercompany Indebtedness) that was permitted by
the indenture to be incurred under the first paragraph of this covenant or
clauses (2), (3), (4), (5) or (16) of this paragraph;

(6) the incurrence by Westlake or any of its Restricted Subsidiaries
of intercompany Indebtedness between or among Westlake and any of its
Restricted Subsidiaries; provided, however, that:

(a) if Westlake or any Guarantor is the obligor on such
Indebtedness and the payee is not Westlake or a Guarantor, such
Indebtedness must be expressly subordinated to the prior payment in full
in cash of all Obligations then due with respect to the notes, in the
case of Westlake, or the Guarantee, in the case of a Guarantor; and

(b) (i) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other than
Westlake or a Restricted Subsidiary of Westlake and (ii) any sale or
other transfer of any such Indebtedness to a Person that is not either
Westlake or a Restricted Subsidiary of Westlake will be deemed, in each
case, to constitute an incurrence of such Indebtedness by Westlake or
such Restricted Subsidiary, as the case may be, that was not permitted
by this clause (6);

(7) the issuance by any of Westlake's Restricted Subsidiaries to
Westlake or to any of its Restricted Subsidiaries of shares of preferred
stock; provided, however, that:

(a) any subsequent issuance or transfer of Equity Interests that
results in any such preferred stock being held by a Person other than
Westlake or a Restricted Subsidiary of Westlake; and

(b) any sale or other transfer of any such preferred stock to a
Person that is not either Westlake or a Restricted Subsidiary of
Westlake;

will be deemed, in each case, to constitute an issuance of such preferred
stock by such Restricted Subsidiary that was not permitted by this clause
(7);

(8) the incurrence by Westlake or any of its Restricted Subsidiaries
of Hedging Obligations in the ordinary course of business and not for
speculative purposes;

(9) the guarantee by Westlake or any of the Guarantors of Indebtedness
of Westlake or a Restricted Subsidiary of Westlake that was permitted to be
incurred by another provision of this covenant; provided that if the
Indebtedness being guaranteed is subordinated to or pari passu with the
notes, then the guarantee shall be subordinated to the same extent as the
Indebtedness guaranteed;

(10) the incurrence by Westlake or any of its Restricted Subsidiaries
of Indebtedness in respect of workers' compensation claims; self-insurance
obligations; bankers' acceptances; performance, appeal, completion,
guarantee and surety bonds; or similar requirements in the ordinary course
of business;

(11) the incurrence by Westlake or any of its Restricted Subsidiaries
of Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn
against insufficient funds, so long as such Indebtedness is covered within
five business days;

(12) the incurrence by Foreign Subsidiaries of Indebtedness in an
aggregate principal amount at any time outstanding pursuant to this clause
(12), including all Permitted Refinancing Indebtedness incurred to refund,
refinance, defease, renew, extend or replace Indebtedness incurred pursuant
to this clause (12), not to exceed $10.0 million;

(13) the incurrence by Westlake or a Restricted Subsidiary of
Indebtedness arising from agreements of Westlake or such Restricted
Subsidiary providing for indemnification, adjustment of

purchase price or similar obligations, in each case, incurred in connection
with the disposition of any business, assets or subsidiary, other than
guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or subsidiary for the purpose of financing
such acquisition; provided that the maximum aggregate liability in respect
of all such Indebtedness shall at no time exceed the gross proceeds
actually received by Westlake or such Restricted Subsidiary in connection
with such disposition;

(14) the incurrence by Westlake or a Restricted Subsidiary of
Indebtedness consisting of take-or-pay obligations contained in supply
agreements entered into in the ordinary course of business;

(15) the incurrence by Westlake of Indebtedness to any of its
Subsidiaries incurred in connection with the purchase of accounts
receivable and related assets by Westlake from any such Subsidiary which
assets are subsequently conveyed by Westlake in connection with a
Receivable Facility; and

(16) the incurrence by Westlake or any of the Guarantors of additional
Indebtedness in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to extend, refund, refinance, renew, defease or
replace any Indebtedness incurred pursuant to this clause (16), and the
issuance by Westlake of any Disqualified Stock and by any Restricted
Subsidiary of any additional preferred stock, not to exceed $50.0 million.

Westlake will not incur, and will not permit any Guarantor to incur, any
Indebtedness (including Permitted Debt) that is contractually subordinated in
right of payment to any other Pari Passu Indebtedness of Westlake or such
Guarantor unless such Indebtedness is also contractually subordinated in right
of payment to the notes and the applicable Guarantee on substantially identical
terms; provided, however, that no Indebtedness will be deemed to be
contractually subordinated in right of payment to any other Indebtedness of
Westlake solely by virtue of being unsecured or by virtue of being secured on a
first or junior Lien basis.

For purposes of determining compliance with this "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, in the event that an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (16) above, or is
entitled to be incurred pursuant to the first paragraph of this covenant,
Westlake will be permitted to classify such item of Indebtedness on the date of
its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this covenant. Indebtedness under
Credit Facilities outstanding on the date on which notes are first issued and
authenticated under the indenture will initially be deemed to have been incurred
on such date in reliance on the exception provided by clause (1) of the
definition of Permitted Debt. The accrual of interest, the accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this covenant;
provided, in each such case, that the amount thereof is included in Fixed
Charges of Westlake as accrued. Notwithstanding any other provision of this
covenant, the maximum amount of Indebtedness that Westlake or any Restricted
Subsidiary may incur pursuant to this covenant shall not be deemed to be
exceeded solely as a result of fluctuations in exchange rates or currency
values.

LIENS

Westlake will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien,
except Permitted Liens, to secure Indebtedness of any kind on any asset now
owned or hereafter acquired, unless all payments due under the indenture and the
notes are secured on an equal and ratable basis with the obligations so secured
(or, if such obligations are subordinated by their terms to the notes or the
related Guarantees, prior to the obligations so secured) until such time as such
obligations are no longer secured by a Lien.
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DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES

Westlake will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to:

(1) pay dividends or make any other distributions on its Capital Stock
to Westlake or any of its Restricted Subsidiaries, or with respect to any
other interest or participation in, or measured by, its profits, or pay any
indebtedness owed to Westlake or any of its Restricted Subsidiaries;

(2) make loans or advances to Westlake or any of its Restricted
Subsidiaries; or

(3) transfer any of its properties or assets to Westlake or any of its
Restricted Subsidiaries.

However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:

(1) agreements governing Existing Indebtedness and Credit Facilities
as in effect on the date of the indenture and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements; provided that the
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in those agreements on the date
of the indenture;

(2) the indenture, the notes and the Guarantees;

(3) applicable law, rule, regulation or order;

(4) any instrument governing Indebtedness or Capital Stock of a Person
as in effect at the time of the acquisition by Westlake or any of its
Restricted Subsidiaries of such Person or the properties or assets of such
Person (except to the extent such Indebtedness or Capital Stock was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the indenture
to be incurred;

(5) customary non-assignment provisions in contracts and leases
entered into in the ordinary course of business;

(6) construction loans and purchase money obligations for property
acquired in the ordinary course of business and Capital Lease Obligations
that impose restrictions on the property constructed, purchased or leased
of the nature described in clause (3) of the preceding paragraph;

(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending the sale or other disposition;

(8) Permitted Refinancing Indebtedness; provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are not materially more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced;

(9) Liens securing Indebtedness otherwise permitted to be incurred
under the provisions of the covenant described above under the caption
"-- Liens" that limit the right of the debtor to dispose of the assets
subject to such Liens;

(10) any restriction under an agreement governing Indebtedness of a
Foreign Subsidiary permitted under "-- Incurrence of Indebtedness and
Issuance of Preferred Stock";

(11) provisions limiting or prohibiting the disposition or
distribution of assets or property in joint venture agreements, asset sale
agreements, sale-leaseback agreements, stock sale agreements and other

similar agreements entered into with the approval of Westlake's Board of
Directors, which limitation or prohibition is applicable only to the assets
that are the subject of such agreements; and

(12) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.

For purposes of determining compliance with this "Dividend and Other
Payment Restrictions Affecting Subsidiaries" covenant, in the event that a
restriction meets the criteria of more than one of the categories of permitted
restrictions described in clauses (1) through (12) above, Westlake will be
permitted to classify such restriction on the date of its incurrence, or later
reclassify all or a portion of such item of Indebtedness, in any manner that
complies with this covenant.

MERGER, CONSOLIDATION OR SALE OF ASSETS

Westlake may not, directly or indirectly: (1) consolidate or merge with or
into another Person (whether or not Westlake is the surviving corporation); or
(2) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of Westlake and its Restricted Subsidiaries
taken as a whole, in one or more related transactions, to another Person,
unless:

(1) either: (a) Westlake is the surviving or continuing Person; or (b)
the Person formed by or surviving any such consolidation or merger (if
other than Westlake) or to which such sale, assignment, transfer,
conveyance or other disposition has been made is a Person organized or
existing under the laws of the United States, any state of the United
States or the District of Columbia;

(2) the Person formed by or surviving any such consolidation or merger
(if other than Westlake) or the Person to which such sale, assignment,
transfer, conveyance or other disposition has been made assumes all the
obligations of Westlake under the notes, the indenture and the registration
rights agreement pursuant to agreements reasonably satisfactory to the
trustee;

(3) immediately after giving effect to such transaction, no Default or
Event of Default exists; and

(4) Westlake or the Person formed by or surviving any such
consolidation or merger (if other than Westlake), or to which such sale,
assignment, transfer, conveyance or other disposition has been made will,
on the date of such transaction after giving pro forma effect thereto and
any related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of the covenant
described above under the caption "-- Incurrence of Indebtedness and
Issuance of Preferred Stock."

In addition, Westlake may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person.

This "Merger, Consolidation or Sale of Assets" covenant will not apply to:

(A) a merger or consolidation of Westlake with an Affiliate for the
purpose of reincorporating or reorganizing Westlake in another
jurisdiction;

(B) a merger or consolidation of Westlake with a Wholly Owned
Restricted Subsidiary; provided that, in connection with any such merger or
consolidation, no consideration, other than Equity Interests (other than
Disqualified Stock) in the surviving or continuing Person or Westlake,
shall be issued or distributed to the holders of Equity Interests of
Westlake; and

(C) any sale, transfer, assignment, conveyance or other disposition of
assets between or among Westlake and its Restricted Subsidiaries.

TRANSACTIONS WITH AFFILIATES

Westlake will not, and will not permit any of its Restricted Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate of Westlake
(each, an "Affiliate Transaction"), unless:

(1) the Affiliate Transaction is on terms that are no less favorable
to Westlake or the relevant Restricted Subsidiary than those that might
reasonably have been obtained in a comparable transaction by Westlake or
such Restricted Subsidiary with an unrelated Person; and

(2) Westlake delivers to the trustee:

(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$5.0 million, a resolution of the Board of Directors set forth in an
officers' certificate certifying that such Affiliate Transaction
complies with this covenant and such Affiliate Transaction been approved
by a majority of the members of the Board of Directors; and

(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$15.0 million, an opinion as to the fairness to Westlake or such
Restricted Subsidiary of such Affiliate Transaction from a financial
point of view issued by an accounting, appraisal or investment banking
firm of national standing.

The following items will not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:

(1) any fees, compensation and other payments paid to any officer or
employee pursuant to any employment agreement, employee or director benefit
plan, officer and director indemnification agreement or any similar
arrangement entered into by Westlake or any of its Restricted Subsidiaries
in the ordinary course of business;

(2) transactions between or among Westlake and/or its Restricted
Subsidiaries;

(3) transactions with a Person (other than an Unrestricted Subsidiary
of Westlake) that is an Affiliate of Westlake solely because Westlake owns,
directly or through a Restricted Subsidiary, an Equity Interest in, or
controls, such Person;

(4) payment of reasonable directors' fees to Persons who are not
otherwise Affiliates of Westlake;

(5) any issuance of Equity Interests (other than Disqualified Stock)
of Westlake to Affiliates of Westlake;

(6) Restricted Payments that do not violate the provisions of the
indenture described above under the caption "-- Restricted Payments";

(7) loans or advances to employees in the ordinary course of business
not to exceed $2.0 million in the aggregate at any one time outstanding;

(8) sales (including a sale in exchange for a promissory note of or
Equity Interest in such Accounts Receivable Subsidiary) of accounts
receivable, related assets and the provision of billing, collection and
other services in connection therewith, in each case, to an Accounts
Receivable Subsidiary in connection with any Receivables Facility;

(9) transactions pursuant to any contract or agreement in effect on
the issue date, as the same may be amended, modified, extended or replaced
from time to time, so long as any such contract or agreement as so amended,
modified, extended or replaced is, taken as a whole, not materially less
favorable to Westlake and its Restricted Subsidiaries than under those
agreements as described in the

section "Certain Relationships and Related Transactions" in Westlake's
offering memorandum dated July 21, 2003;

(10) any transaction or series of transactions between Westlake or any
Restricted Subsidiary and any of their Joint Ventures, provided that (a)
such transaction or series of transactions is in the ordinary course of
business between Westlake or such Restricted Subsidiary and such Joint
Venture, and (b) with respect to any such Affiliate Transaction involving
aggregate consideration in excess of $5.0 million, such Affiliate
Transaction complies with clause (1) of the initial paragraph above and
such Affiliate Transaction has been approved by the Board of Directors; and

(11) Permitted Investments and Permitted Payments to Parent.

ADDITIONAL GUARANTEES

If Westlake or any of its Restricted Subsidiaries acquires or creates
another Domestic Subsidiary after the date of the indenture, then that newly
acquired or created Domestic Subsidiary will, unless it has been designated as
an Unrestricted Subsidiary under the indenture, become a Guarantor and execute a
supplemental indenture and deliver an opinion of counsel satisfactory to the
trustee within 10 business days of the date on which it was acquired or created.

DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES

The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
Fair Market Value of all outstanding Investments owned by Westlake and its
Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be
deemed to be an Investment made as of the time of the designation and will
reduce the amount available for Restricted Payments under the covenant described
above under the caption "-- Restricted Payments" or under one or more clauses of
the definition of Permitted Investments, as determined by Westlake. That
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if that redesignation would not cause a
Default. If a Restricted Subsidiary that is a Guarantor is designated an
Unrestricted Subsidiary in accordance with the terms of this covenant, such
Guarantee will be released.

SALE AND LEASEBACK TRANSACTIONS

Westlake will not, and will not permit any of its Restricted Subsidiaries
to, enter into any sale and leaseback transaction; provided that Westlake or any
Restricted Subsidiary may enter into a sale and leaseback transaction if:

(1) Westlake or that Restricted Subsidiary, as applicable, could have
(a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction under the Fixed Charge
Coverage Ratio test in the first paragraph of the covenant described above
under the caption "-- Incurrence of Indebtedness and Issuance of Preferred
Stock" and (b) incurred a Lien to secure such Indebtedness pursuant to the
covenant described above under the caption "-- Liens;"

(2) the gross cash proceeds of that sale and leaseback transaction are
at least equal to the Fair Market Value, as determined in good faith by the
Board of Directors and set forth in an officers' certificate delivered to
the trustee, of the property that is the subject of that sale and leaseback
transaction; and

(3) the transfer of assets in that sale and leaseback transaction is
permitted by, and Westlake applies the proceeds of such transaction in
compliance with, the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales."

ACCOUNTS RECEIVABLE FACILITIES

Westlake or any of its Restricted Subsidiaries may sell (including a sale
in exchange for a promissory note of or Equity Interest in such Accounts
Receivable Subsidiary) at any time and from time to time, accounts receivable
and related assets to any Accounts Receivable Subsidiary; provided that the
aggregate consideration received in each such sale is at least equal to the
aggregate fair market value of the receivables sold.

PAYMENTS FOR CONSENT

Westlake will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration to or for
the benefit of any holder of notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of the indenture or the
notes unless such consideration is offered to be paid or agreed to be paid to
all holders of the notes that consent, waive or agree to amend in the time frame
set forth in the solicitation documents relating to such consent, waiver or
agreement.

REPORTS

As long as Westlake is not subject to the periodic reporting requirements
of the Exchange Act, Westlake will furnish to all holders of the notes and
prospective purchasers of the notes designated by the holders, promptly upon
their request, the information required to be delivered under Rule 144A(d)(4) of
the Securities Act. In addition, prior to consummation of the exchange offer
contemplated by this prospectus and the registration rights agreement, Westlake
will furnish to the trustee, within 15 days after it would have been required to
file the same with the SEC if Westlake had been subject to the periodic
reporting requirements of the Exchange Act and excluding any time periods
applicable to "accelerated filers" under the Exchange Act, quarterly and annual
financial statements, including any notes thereto (and with respect to annual
financial statements only, an auditors' report thereon by a firm of established
national reputation), and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," both comparable to that which Westlake
would have been required to include in a quarterly report on Form 10-Q or an
annual report on Form 10-K if Westlake had been subject to those periodic
reporting requirements.

Following consummation of the exchange offer, Westlake will file with the
SEC (unless the SEC will not accept such a filing):

(1) all quarterly and annual reports on Forms 10-Q and 10-K required
to be filed with the SEC; and

(2) all current reports on Form 8-K required to be filed with the SEC,

for public availability within the time periods specified in the rules and
regulations applicable to such reports.

If, at any time after consummation of the exchange offer, Westlake is no
longer subject to the periodic reporting requirements of the Exchange Act for
any reason, Westlake will nevertheless continue filing the reports specified in
the preceding paragraph with the SEC within the time periods specified above
unless the SEC will not accept such a filing. Westlake has agreed that it will
not take any action for the purpose of causing the SEC not to accept any such
filings. If the SEC will not accept Westlake's filings for any reason, Westlake
will post the reports referred to in the preceding paragraph on its website
within the time periods that would apply if Westlake were required to file those
reports with the SEC.

EVENTS OF DEFAULT AND REMEDIES

Each of the following is an Event of Default:

(1) default for 30 days in the payment when due of interest or
additional interest on the notes;

(2) default in payment when due of the principal of, or premium, if
any, on the notes;

(3) failure by Westlake or any of its Restricted Subsidiaries to
comply with the provisions described under the captions "-- Repurchase at
the Option of Holders -- Change of Control," "-- Repurchase at the Option
of Holders -- Asset Sales," or "-- Certain Covenants -- Merger,
Consolidation or Sale of Assets;"

(4) failure by Westlake or any Guarantor for 60 days after notice to
comply with any of the other agreements in the indenture;

(5) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by Westlake or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by Westlake or any of
its Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date of the indenture, if that default:

(a) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default
(a "Payment Default"); or

(b) results in the acceleration of such Indebtedness prior to its
express maturity,

and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there
has been a Payment Default or the maturity of which has been so
accelerated, aggregates $20.0 million or more and has not been discharged
in full or such acceleration has not been rescinded or annulled within 30
days of such maturity or acceleration;

(6) failure by Westlake or any of its Restricted Subsidiaries to pay
or otherwise discharge or stay final judgments aggregating in excess of
$20.0 million, which are not covered by indemnities or third party
insurance as to which the Person giving such indemnity or such insurer has
not disclaimed coverage, for a period of 60 days after such judgments
become final and non-appealable;

(7) except as permitted by the indenture, any Guarantee of the notes
shall be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Guarantor,
or any Person acting on behalf of any Guarantor, shall deny or disaffirm
its obligations under its Guarantee of the notes; and

(8) certain events of bankruptcy or insolvency described in the
indenture with respect to Westlake or any of its Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary.

In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to Westlake, any Restricted Subsidiary
that is a Significant Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary, all outstanding notes
will become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the trustee or the holders of
at least 25% in principal amount of the then outstanding notes may declare all
the notes to be due and payable immediately.

Subject to certain limitations, holders of a majority in principal amount
of the then outstanding notes may direct the trustee in its exercise of any
trust or power. The trustee may withhold from holders of the notes notice of any
continuing Default or Event of Default if it determines that withholding notes
is in their interest, except a Default or Event of Default relating to the
payment of principal or interest.

100

Subject to the provisions of the indenture relating to the duties of the
trustee, in case an Event of Default occurs and is continuing, the trustee will
be under no obligation to exercise any of the rights or powers under the
indenture at the request or direction of any holders of notes unless such
holders have offered to the trustee reasonable indemnity or security against any
loss, liability or expense. Except to enforce the right to receive payment of
principal, premium (if any), interest or additional interest (if any), when due,
no holder of a note may pursue any remedy with respect to the indenture or the
notes unless:

(1) such holder has previously given the trustee notice that an Event
of Default is continuing;

(2) holders of at least 25% in aggregate principal amount of the
outstanding notes have requested the trustee to pursue the remedy;

(3) such holders have offered the trustee reasonable security or
indemnity against any loss, liability or expense;

(4) the trustee has not complied with such request within 60 days
after the receipt thereof and the offer of security or indemnity; and

(5) holders of a majority in aggregate principal amount of the
outstanding notes have not given the trustee a direction inconsistent with
such request within such 60-day period.

The holders of a majority in aggregate principal amount of the notes then
outstanding by notice to the trustee may, on behalf of the holders of all of the
notes, rescind an acceleration or waive any existing Default or Event of Default
and its consequences under the indenture except a continuing Default or Event of
Default in the payment of interest or additional interest, if any, on, or the
principal of, the notes.

In the case of any Event of Default occurring by reason of any willful
action or inaction taken or not taken by or on behalf of Westlake with the
intention of avoiding payment of the premium that Westlake would have had to pay
if Westlake then had elected to redeem the notes pursuant to the optional
redemption provisions of the indenture, an equivalent premium will also become
and be immediately due and payable to the extent permitted by law upon the
acceleration of the notes.

The preceding paragraph refers only to those times when Westlake, while
solvent, voluntarily, knowingly, deliberately or intentionally avoids payment of
the premium referred to above and is not intended to encompass those situations
in which such a payment of premium would render Westlake insolvent or force a
bankruptcy, liquidation or reorganization of Westlake, or where non-payment is a
result of financial distress or adverse financial condition.

Westlake is required to deliver to the trustee annually a statement
regarding compliance with the indenture. Upon becoming aware of any Default or
Event of Default, Westlake is required to deliver to the trustee a statement
specifying such Default or Event of Default.

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS

No director, officer, employee, incorporator or stockholder of Westlake or
any Guarantor, as such, will have any liability for any obligations of Westlake
or the Guarantors under the notes, the indenture or the Guarantees or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each holder of notes by accepting a note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the notes. The waiver may not be effective to waive liabilities under the
federal securities laws.

101

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Westlake may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding notes and all obligations
of the Guarantors discharged with respect to their Guarantees ("Legal
Defeasance") except for:

(1) the rights of holders of outstanding notes to receive payments in
respect of the principal of, or premium, if any, interest or additional
interest, if any, on such notes when such payments are due from the trust
referred to below;

(2) Westlake's obligations with respect to the notes concerning
issuing temporary notes, registration of transfer or exchange of notes,
mutilated, destroyed, lost or stolen notes, the furnishing to the trustee
of lists of holders and the maintenance of an office or agency for
registration of transfer or exchange or for payment and money for security
payments held in trust;

(3) the rights, powers, trusts, duties and immunities of the trustee,
and Westlake's obligations in connection therewith; and

(4) the Legal Defeasance provisions of the indenture.

In addition, Westlake may, at its option and at any time, elect to have the
obligations of Westlake and the Guarantors released with respect to certain
covenants (including its obligation to make Change of Control Offers and Asset
Sale Offers) that are described in the indenture ("Covenant Defeasance") and
thereafter any omission to comply with those covenants will not constitute a
Default or Event of Default with respect to the notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "-- Events
of Default and Remedies" will no longer constitute an Event of Default with
respect to the notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1) Westlake must irrevocably deposit with the trustee, in trust, for
the benefit of the holders of the notes, cash in U.S. dollars, non-callable
Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient, in
the opinion of a nationally recognized investment bank, appraisal firm or
firm of independent public accountants, to pay the principal of, premium,
if any, interest and additional interest, if any, on the outstanding notes
on the Stated Maturity or on the applicable redemption date, as the case
may be, and Westlake must specify whether the notes are being defeased to
maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, Westlake has delivered to the
trustee an opinion of counsel reasonably acceptable to the trustee
confirming that (a) Westlake has received from, or there has been published
by, the Internal Revenue Service a ruling or (b) since the date of the
indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon, such opinion of
counsel will confirm that, the holders of the outstanding notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, Westlake has delivered to the
trustee an opinion of counsel reasonably acceptable to the trustee
confirming that the holders of the outstanding notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;

(4) no Default or Event of Default has occurred and is continuing on
the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);

(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the indenture) to which
102

Westlake or any of its Subsidiaries is a party or by which Westlake or any
of its Subsidiaries is bound;

(6) Westlake must deliver to the trustee an officers' certificate
stating that the deposit was not made by Westlake with the intent of
preferring the holders of notes over any other creditors of Westlake with
the intent of defeating, hindering, delaying or defrauding any other
creditors of Westlake or others; and

(7) Westlake must deliver to the trustee an officers' certificate and
an opinion of counsel, each stating that all conditions precedent provided
for or relating to the Legal Defeasance or the Covenant Defeasance have
been complied with.

AMENDMENT, SUPPLEMENT AND WAIVER

Except as provided in the next two succeeding paragraphs, the indenture or
the notes may be amended or supplemented with the consent of the holders of at
least a majority in principal amount of the notes then outstanding as a single
class (including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, notes), and any existing
default or compliance with any provision of the indenture or the notes may be
waived with the consent of the holders of a majority in principal amount of the
then outstanding notes as a single class (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, notes).

Without the consent of each noteholder affected, an amendment or waiver may
not (with respect to any notes held by a non-consenting holder):

(1) reduce the percentage of principal amount of notes whose holders
must consent to an amendment, supplement or waiver;

(2) reduce, or change the Stated Maturity of, the principal of any
note, change the date on which any of the notes may be subject to
redemption or repurchase or reduce the redemption or repurchase price of
the notes;

(3) reduce the rate of or change the time for payment of interest on
any note;

(4) waive a Default or Event of Default in the payment of principal
of, premium, if any, interest or additional interest, if any, on, the notes
(except a rescission of acceleration of the notes by the holders of at
least a majority in aggregate principal amount of the notes and a waiver of
the payment default that resulted from such acceleration);

(5) make any note payable in money other than that stated in the
notes;

(6) make any change in the provisions of the indenture relating to
waivers of past Defaults or Events of Default or the rights of holders of
notes to receive payments of principal of, premium, if any, interest or
additional interest, if any, on, the notes;

(7) waive a redemption payment with respect to any note (other than a
payment required by one of the covenants described above under the caption
"-- Repurchase at the Option of Holders");

(8) release any Guarantor from any of its obligations under its
Guarantee or the indenture, except in accordance with the terms of the
indenture; or

(9) make any change in the preceding amendment and waiver provisions.

Notwithstanding the preceding, without the consent of any holder of notes,
Westlake, the Guarantors and the trustee may amend or supplement the indenture
or the notes:

(1) to cure any ambiguity, defect or inconsistency;

(2) to provide for uncertificated notes in addition to or in place of
certificated notes;

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(3) to provide for the assumption of Westlake's or a Guarantor's
obligations to holders of notes in the case of a merger or consolidation or
sale of all or substantially all of its assets pursuant to the indenture;

(4) to make any change that would provide any additional rights or
benefits to the holders of notes or that does not adversely affect in any
material respect the legal rights under the indenture of any such holder;

(5) to provide any security for, any guarantees of or any additional
obligors on the notes or the Guarantees, or to confirm and evidence the
release, termination or discharge of any such security or guarantee when
such release, termination or discharge is permitted by the indenture;

(6) to comply with requirements of the SEC in order to effect or
maintain the qualification of the indenture under the Trust Indenture Act;
or

(7) to conform the text of the indenture or the notes to any provision
of this Description of Notes to the extent that such provision in this
Description of Notes was intended to be a substantially verbatim recitation
of a provision of the indenture, the Guarantees or the notes.

SATISFACTION AND DISCHARGE

The indenture will be discharged and will cease to be of further effect as
to all notes and Guarantees issued thereunder, when:

(1) either:

(a) all notes that have been authenticated, except lost, stolen or
destroyed notes that have been replaced or paid and notes for whose
payment money has been deposited in trust and thereafter repaid to
Westlake or discharged from that trust, have been delivered to the
trustee for cancellation; or

(b) all notes that have not been delivered to the trustee for
cancellation have become due and payable by reason of the mailing of a
notice of redemption or otherwise or will become due and payable within
one year and Westlake or any Guarantor has irrevocably deposited or
caused to be deposited with the trustee as trust funds in trust solely
for the benefit of the holders, cash in U.S. dollars, non-callable
Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient,
with consideration of any reinvestment of interest, to pay and discharge
the entire indebtedness on the notes not delivered to the trustee for
cancellation for principal, any premium and accrued interest and
additional interest, if any, to the date of maturity or redemption;

(2) no Default or Event of Default has occurred and is continuing on
the date of the deposit or will occur as a result of the deposit (other
than a Default or Event of Default resulting from the borrowing of funds to
be applied to such deposit) and the deposit will not result in a breach or
violation of, or constitute a default under, any other instrument to which
Westlake or any Guarantor is a party or by which Westlake or any Guarantor
is bound;

(3) Westlake or any Guarantor has paid or caused to be paid all sums
payable by it under the indenture; and

(4) Westlake has delivered irrevocable instructions to the trustee
under the indenture to apply the deposited money toward the payment of the
notes at maturity or the redemption date, as the case may be.

In addition, Westlake must deliver an officers' certificate and an opinion of
counsel to the trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.

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CONCERNING THE TRUSTEE

If the trustee becomes a creditor of Westlake or any Guarantor, the
indenture limits its right to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security or
otherwise. The trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue or resign.

The holders of a majority in principal amount of the then outstanding notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the trustee, subject to
certain exceptions. The indenture provides that in case an Event of Default
occurs and is continuing, the trustee will be required, in the exercise of its
power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request of any
holder of notes, unless such holder has offered to the trustee security and
indemnity satisfactory to it against any loss, liability or expense.

BOOK-ENTRY, DELIVERY AND FORM

The notes will be issued only in fully registered form, without exception.
We will issue the new notes in the form of one or more permanent global notes
(the "Global Notes") in definitive, fully registered, book-entry form. The
Global Notes will be deposited with or on behalf of The Depository Trust Company
and registered in the name of Cede & Co., as nominee of DTC, or will remain in
the custody of the trustee in accordance with the FAST Balance Certificate
Agreement between DTC and the trustee.

Westlake has appointed the trustee at its corporate trust office as paying
agent, transfer agent and registrar for the notes. In such capacities, the
trustee is responsible for, among other things, (i) maintaining a record of the
aggregate holdings of notes represented by the Global Notes, and accepting notes
for exchange and registration of transfer, (ii) ensuring that payments of
principal, premium, if any, and interest in respect of the notes received by the
trustee from Westlake are duly paid to DTC or its nominees and (iii)
transmitting to Westlake any notices from Holders.

Westlake will cause the transfer agent to act as registrar and will cause
to be kept at the office of the transfer agent a register in which, subject to
such reasonable regulations as it may prescribe, Westlake will provide for the
registration of the notes and registration of transfers of the notes. Westlake
may vary or terminate the appointment of the paying agent or the transfer agent,
or appoint additional or other such agents or approve any change in the office
through which any such agent acts, provided that there shall at all times be a
paying agent and a transfer agent in the Borough of Manhattan, The City of New
York, New York. Westlake will cause notice of any resignation, termination or
appointment of the trustee or any paying agent or transfer agent, and of any
change in the office through which any such agent will act, to be provided to
holders of the notes.

EXCHANGES OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES

A beneficial interest in a Global Note may not be exchanged for a note in
certificated form unless:

- DTC (x) notifies Westlake that it is unwilling or unable to continue as
Depository for such Global Note or (y) has ceased to be a clearing agency
registered under the Exchange Act and, in each case, a successor
Depository has not been appointed within 90 days of that notice;

- there shall have occurred and be continuing an Event of Default with
respect to the notes, and DTC requests the issuance of certificated
notes; or

- Westlake determines not to have the notes represented by a Global Note.

In all cases, certificated notes delivered in exchange for any Global Note
or beneficial interests therein will be registered in the names, and issued in
approved denominations, requested by or on behalf of DTC (in accordance with its
customary procedures). Any such exchange will be effected only through the
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DWAC System and an appropriate adjustment will be made in the records of the
security register to reflect a decrease in the principal amount of the relevant
Global Note.

GLOBAL NOTES

The following description of the operations and procedures of DTC is
provided solely as a matter of convenience. These operations and procedures are
solely within the control of DTC and are subject to change from time to time.
Westlake and the Guarantors take no responsibility for these operations and
procedures and urge investors to contact DTC or its participants directly to
discuss these matters.

Upon the issuance of the Global Notes, DTC will credit, on its internal
system, the respective principal amount of the individual beneficial interests
represented by such Global Notes to the accounts with DTC ("participants") or
persons who hold interests through participants. Ownership of beneficial
interests in the Global Notes will be shown on, and the transfer of that
ownership will be effected only through, records maintained by DTC or its
nominee (with respect to interests of participants), and the records of
participants (with respect to interest of persons other than participants).

As long as DTC, or its nominee, is the registered holder of a Global Note,
DTC or such nominee, as the case may be, will be considered the sole owner and
holder of the notes represented by such Global Note for all purposes under the
indenture and the notes. Except in the limited circumstances described above
under "-- Exchanges of Book-Entry Notes for Certificated Notes," owners of
beneficial interests in a Global Note will not be entitled to have any portions
of such Global Note registered in their names, will not receive or be entitled
to receive physical delivery of notes in certificated form and will not be
considered the owners or holders of the Global Note (or any notes presented
thereby), under the indenture or the notes. In addition, no beneficial owner of
an interest in a Global Note will be able to transfer that interest except in
accordance with DTC's applicable procedures (in addition to those under the
indenture referred to herein). In the event that owners of beneficial interests
in a Global Note become entitled to receive notes in certificated form, such
notes will be issued only in registered form in denominations of $1,000 and
integral multiples thereof.

The laws of some states require that certain persons take physical delivery
in certificated form of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Note to such persons may be limited to
that extent. Because DTC can act only on behalf of participants, which in turn
act on behalf of indirect participants and certain banks, the ability of a
person having beneficial interests in a Global Note to pledge such interests to
persons or entities that do not participate in the DTC system, or otherwise take
action in respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests.

Payments of the principal of and any premium and interest on Global Notes
will be made to DTC or its nominee as the registered owner thereof. Neither
Westlake, the trustee nor any of their respective agents will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global Notes
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.

Beneficial interests in the Global Notes will trade in DTC's Same-Day Funds
Settlement System, and secondary market trading activity in such interests will
therefore settle in immediately available funds. Westlake expects that DTC or
its nominee, upon receipt of any payment of principal or interest in respect of
a Global Note representing any notes held by it or its nominee, will immediately
credit participants' accounts with payment in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Notes for
such notes as shown on the records of DTC or its nominee. Westlake also expects
that payments by participants to owners of beneficial interests in such Global
Notes held through such participants will be governed by standing instructions
and customary practices, as is now the case with securities held for the
accounts of customers registered in "street name." Such payments will be the
responsibility of such participants. Transfers between participants in DTC will
be effected in accordance with DTC's procedures, and will be settled in same-day
funds.

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DTC has advised Westlake that it will take any action permitted to be taken
by a holder of notes (including the presentation of notes for exchange as
described below), only at the direction of one or more participants to whose
account with DTC interests in the Global Notes are credited and only in respect
of such portion of the aggregate principal amount of the notes as to which such
participant or participants has or have given such direction. However, if there
is an Event of Default (as defined below), under the notes, DTC reserves the
right to exchange the Global Notes for notes in certificated form, and to
distribute such notes to its participants.

DTC has advised Westlake as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code, as amended, and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants and facilitate the clearance and settlement of
securities transactions between participants through electronic book-entry
changes in accounts of its participants, thereby eliminating the need for
physical transfer and delivery of certificates. Participants include securities
brokers and dealers, banks, trust companies and clearing corporations and may
include certain other organizations. Indirect access to the DTC system is
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly ("indirect participants").

Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of beneficial ownership interests in the Global Notes among
participants of DTC, it is under no obligation to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. Neither
Westlake, the trustee nor any of their respective agents will have any
responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations, including maintaining, supervising or reviewing the
records relating to, or payments made on account of, beneficial ownership
interests in Global Notes.

SAME-DAY SETTLEMENT AND PAYMENT

Westlake will make payments in respect of the notes represented by the
Global Notes (including principal, premium, if any, interest and additional
interest, if any), by wire transfer of immediately available funds to the
accounts specified by the holder of the Global Note. The notes represented by
the Global Notes are expected to trade in DTC's Same-Day Funds Settlement
System, and any permitted secondary market trading activity in such notes will,
therefore, be required by DTC to be settled in immediately available funds.

REGISTRATION RIGHTS; ADDITIONAL INTEREST

The following description is a summary of the material provisions of the
registration rights agreement. It does not restate that agreement in its
entirety. We urge you to read the registration rights agreement in its entirety
because it, and not this description, defines your registration rights as
holders of the notes. The registration rights agreement has been filed as an
exhibit to the registration statement of which this prospectus is a part.

In connection with the issuance of the old notes, Westlake, the Guarantors
and the initial purchasers entered into the registration rights agreement.
Pursuant to the registration rights agreement, Westlake and the Guarantors
agreed to file with the SEC a registration statement on the appropriate form
relating to a registered exchange offer for the notes. Unless the exchange offer
would not be permitted by applicable law or SEC policy, Westlake and the
Guarantors will:

(1) file an exchange offer registration statement with the SEC and use all
commercially reasonable efforts to have the exchange offer registration
statement declared effective by the SEC as soon as practicable on or
prior to 180 days after the issue date of the old notes; and

107

(2) following the effectiveness of the exchange offer registration
statement:

- commence the exchange offer; and

- use all commercially reasonable efforts to consummate the exchange
offer on or prior to 30 business days, or longer if required by the
federal securities laws, after the date on which the exchange offer
registration statement was declared effective by the SEC and issue
new notes in exchange for all old notes tendered prior thereto in
the exchange offer.

Westlake will keep the exchange offer open for at least 20 business days
(or longer, if required by applicable law) after the date notice of the exchange
offer is mailed to the holders of the old notes. During the exchange offer,
Westlake will offer to all holders of old notes who are legally eligible to
participate in the exchange offer the opportunity to exchange their old notes
for new notes.

If any initial purchaser holds any old notes acquired by it that have the
status of an unsold allotment in the initial distribution of the old notes,
Westlake will issue and deliver to that initial purchaser in a private exchange,
upon request and in exchange for the old notes held by that initial purchaser, a
like aggregate principal amount of Westlake's debt securities that are identical
in all material respects to the new notes. These private exchange notes will,
however, be subject to transfer restrictions.

The registration rights agreement also provides that Westlake and the
Guarantors will:

- use commercially reasonable efforts to make available, for up to 180
days after the consummation of the exchange offer, a prospectus for use
in connection with any resale of the new notes received by
broker-dealers in exchange for old notes acquired as a result of
market-making activities or other trading activities, as described below
under "Plan of Distribution"; and

- pay certain expenses incident to the exchange offer and indemnify
specified holders of the new notes (including broker-dealers) against
certain liabilities, including liabilities under the Securities Act.

A broker-dealer that delivers this prospectus to purchasers in connection
with resales of new notes will be subject to civil liability provisions under
the Securities Act in connection with those sales and will be bound by the
applicable provisions of the registration rights agreement, including the
indemnification obligations.

If you desire to tender your old notes, you will be required to make to us
the representations described above under "The Exchange Offer -- Procedures for
Tendering -- Your Representations to Us" to participate in the exchange offer.

If:

(1) Westlake and the Guarantors are not permitted to consummate the
exchange offer as contemplated by the registration rights agreement
because the exchange offer is not permitted by applicable law or SEC
policy; or

(2) any initial purchaser so requests with respect to old notes (or private
exchange notes) not eligible to be exchanged for new notes in the
exchange offer and held by it following consummation of the exchange
offer;

(3) any holder of Transfer Restricted Notes (as defined below) notifies
Westlake prior to the 20th day following consummation of the exchange
offer that:

- it is prohibited by law or SEC policy from participating in the
exchange offer;

- it may not resell the new notes acquired by it in the exchange offer
to the public without delivering a prospectus and the prospectus
contained in the exchange offer registration statement is not
appropriate or available for such resales by it; or

- it is a broker-dealer and owns old notes acquired directly from
Westlake or an affiliate of Westlake,
108

Westlake and the Guarantors will file with the SEC a shelf registration
statement to cover resales of the Transfer Restricted Notes by any such holder.
If obligated to file a shelf registration statement, Westlake and the Guarantors
will use all commercially reasonable efforts to:

- file the shelf registration statement with the SEC on or prior to the
later of (a) 90 days after the issue date of the old notes and (b) 60
days after such filing obligation arises; and

- cause the shelf registration statement to be declared effective by the
SEC as soon as practicable on or prior to 90 days after the date on which
Westlake and the Guarantors are required to file the shelf registration
statement.

A holder who sells notes pursuant to the shelf registration statement
generally will be required to be named as a selling securityholder in the
related prospectus and to deliver a prospectus to purchasers, will be subject to
certain of the civil liability provisions under the Securities Act in connection
with such sales and will be bound by the provisions of the registration rights
agreement applicable to such a holder, including certain indemnification
obligations. In addition, each holder of the notes will be required to deliver
information to be used in connection with the shelf registration statement in
order to have its notes included in the shelf registration statement, and
Westlake will not be required to pay additional interest, as described below, to
a holder who has not furnished certain information specified in the registration
rights agreement.

For purposes of the preceding, "Transfer Restricted Notes" means each old
note until:

- the date on which such note has been exchanged by a person other than a
broker-dealer for a new note in the exchange offer;

- following the exchange by a broker-dealer in the exchange offer of an old
note for a new note, the date on which such new note is sold to a
purchaser in whose hands those new notes are freely tradable under the
Securities Act;

- the date on which such note has been effectively registered under the
Securities Act and disposed of in accordance with the shelf registration
statement;

- the date on which such note is distributed to the public pursuant to Rule
144 under the Securities Act or is saleable pursuant to Rule 144(k) under
the Securities Act; or

- the date on which such note ceases to be outstanding.

Westlake may suspend the availability of a registration statement and the
use of the related prospectus for resales of Transfer Restricted Notes if:

- such action is required by applicable law;

- such action is taken by Westlake in good faith and for valid business
reasons, including the possible acquisition or divestiture of assets or a
material corporate transaction or event; or

- the happening of any event or the discovery of any fact makes any
statement made in the registration statement or the related prospectus
untrue in any material respect or constitutes an omission to state a
material fact in the registration statement or the related prospectus.

The period for which Westlake is obligated to keep the registration
statement effective will be extended by the period of such suspension. Each
holder of Transfer Restricted Notes will be required to discontinue disposition
of Transfer Restricted Notes pursuant to that registration statement upon
receipt from Westlake of notice of any events described in the preceding
paragraph or certain other events specified in the registration rights
agreement.

If:

(1) Westlake and the Guarantors fail to file any of the registration
statements required by the registration rights agreement on or before
the date specified for such filing; or

109

(2) any of such registration statements is not declared effective by the
SEC on or prior to the date specified for such effectiveness; or

(3) Westlake and the Guarantors fail to consummate the exchange offer on or
prior to the date specified for such consummation; or

(4) the shelf registration statement or the exchange offer registration
statement is declared effective but thereafter ceases to be effective
or usable in connection with resales of Transfer Restricted Notes
covered thereby during the periods specified in the registration rights
agreement, except during limited periods as a result of the exercise by
Westlake of its right to suspend use of a registration statement and
the related prospectus as described above,

(each such event referred to in clauses (1) through (4) above, a "Registration
Default"), then Westlake and the Guarantors will pay additional interest to each
holder of Transfer Restricted Notes affected thereby, with respect to the first
90-day period immediately following the occurrence of the first Registration
Default, in an amount equal to $0.05 per week per $1,000 principal amount of
notes held by such holder. The weekly amount of the additional interest per
$1,000 principal amount of notes will increase by an additional $0.05 for each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of additional interest for all Registration Defaults of $0.40
per week per $1,000 principal amount of notes. Westlake will not be required to
pay additional interest for more than one Registration Default at any given
time, and additional interest will accrue only for those days that a
Registration Default occurs and is continuing.

Following the cure of all Registration Defaults, the accrual of additional
interest will cease. Additional interest will not be payable on any notes other
than Transfer Restricted Notes. A holder will not be entitled to receive any
additional interest on any Transfer Restricted Notes if that holder was, at the
time the exchange offer was pending and consummated, eligible to exchange, and
did not validly tender or withdrew, Transfer Restricted Notes for new notes in
the exchange offer.

All accrued additional interest will be paid by Westlake on each interest
payment date to the holders entitled to the payment in the same manner and at
the same time as regular interest on the notes is paid.

GOVERNING LAW

New York law governs the indenture, the registration rights agreement and
the notes.

OTHER

Westlake will make all payments on the notes without withholding or
deducting any taxes or other governmental charges imposed by a United States
jurisdiction, unless it is required to do so by applicable law. If Westlake is
required to withhold taxes, it will not pay any additional, or gross up, amounts
with respect to the withholding or deduction.

Westlake may at any time purchase notes on the open market or otherwise at
any price. Westlake will surrender all notes that it redeems or purchase to the
trustee for cancellation, and may not reissue or resell any of these notes.

CERTAIN DEFINITIONS

Set forth below are certain defined terms used in the indenture. Reference
is made to the indenture for a full definition of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.

"Accounts Receivable Subsidiary" means any Wholly Owned Subsidiary of
Westlake (i) which is formed solely for the purpose of, and which engages in no
substantial activities other than activities in connection with, financing
accounts receivable of Westlake and/or its Restricted Subsidiaries, (ii) which
is designated by Westlake as an Accounts Receivables Subsidiary pursuant to an
officers' certificate delivered to the trustee, (iii) no portion of Indebtedness
or any other obligation (contingent or otherwise) of which
110

is at any time recourse to or obligates Westlake or any Restricted Subsidiary in
any way, or subjects any property or asset of Westlake or any Restricted
Subsidiary, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to (1) representations, warranties and
covenants (or, any indemnity with respect to such representations, warranties
and covenants) entered into in the ordinary course of business in connection
with the sale (including a sale in exchange for a promissory note of or Equity
Interest in such Accounts Receivable Subsidiary) of accounts receivable to such
Accounts Receivable Subsidiary or (2) any guarantee of any such accounts
receivable financing by Westlake or any Restricted Subsidiary that is permitted
to be incurred pursuant to the covenants described under the caption entitled
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock" and "-- Restricted Payments," (iv) with which neither Westlake nor any
Restricted Subsidiary has any contract, agreement, arrangement or understanding
other than contracts, agreements, arrangements and understandings entered into
in the ordinary course of business in connection with the sale (including a sale
in exchange for a promissory note of or Equity Interest in such Accounts
Receivable Subsidiary) of accounts receivable in accordance with the covenant
described under the caption "-- Certain Covenants -- Accounts Receivable
Facilities" and fees payable in the ordinary course of business in connection
with servicing accounts receivable and (v) with respect to which neither
Westlake nor any Restricted Subsidiary has any obligation (a) to subscribe for
additional Equity Interests therein or make any additional capital contribution
or similar payment or transfer thereto other than in connection with the sale
(including a sale in exchange for a promissory note of or Equity Interest in
such Accounts Receivable Subsidiary) of accounts receivable to such Accounts
Receivable Subsidiary in accordance with the covenant described under
"-- Certain Covenants -- Accounts Receivable Facilities" or (b) to maintain or
preserve the solvency, any balance sheet term, financial condition, level of
income or results of operations thereof.

"Acquired Debt" means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Restricted Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with or
into, or becoming a Restricted Subsidiary of, such specified Person; and

(2) Indebtedness secured by a Lien that, at the time of acquisition of
an asset by such specified Person, encumbers such asset.

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.

"Applicable Premium" means, with respect to any note on any redemption
date, the greater of:

(1) 1.0% of the principal amount of the note; or

(2) the excess, if any, of:

(a) the present value on such redemption date of (i) the redemption
price of the note at July 15, 2007 (such redemption price being set
forth in the table appearing above under the caption "-- Optional
Redemption") plus (ii) all required interest payments due on the note
through July 15, 2007 (excluding accrued but unpaid interest to the
redemption date), computed using a discount rate equal to the Treasury
Rate as of such redemption date plus 50 basis points; over

(b) the principal amount of the note.

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"Asset Sale" means:

(1) the sale, lease, conveyance or other disposition (other than the
creation of a Lien) of any assets or rights; provided that the sale,
conveyance or other disposition of all or substantially all of the assets
of Westlake and its Restricted Subsidiaries taken as a whole will be
governed by the provisions of the indenture described above under the
caption "-- Repurchase at the Option of Holders -- Change of Control"
and/or the provisions described above under the caption "-- Certain
Covenants -- Merger, Consolidation or Sale of Assets" and not by the
provisions of the Asset Sale covenant; and

(2) the issuance of Equity Interests in any of Westlake's Restricted
Subsidiaries or the sale by Westlake or any Restricted Subsidiary of Equity
Interests in any of its Subsidiaries or Joint Ventures.

Notwithstanding the preceding, none of the following items will be deemed
to be an Asset Sale:

(1) any single transaction or series of related transactions for which
Westlake or its Restricted Subsidiaries receive aggregate consideration of
less than $15.0 million;

(2) a transfer of assets between or among Westlake and/or its
Restricted Subsidiaries;

(3) an issuance of Equity Interests by a Restricted Subsidiary to
Westlake or to a Restricted Subsidiary of Westlake;

(4) the sale or lease of products, services, accounts receivable,
rolling stock, barges, pipeline capacity or chemical products in the
ordinary course of business and any sale or other disposition of damaged,
worn-out or obsolete assets in the ordinary course of business;

(5) a sale (including a sale in exchange for a promissory note of or
Equity Interest in such Accounts Receivable Subsidiary) of accounts
receivable and/or related assets to an Accounts Receivable Subsidiary in
connection with any Receivables Facility;

(6) the sale or other disposition of cash or Cash Equivalents; or

(7) a Restricted Payment that does not violate the covenant described
above under the caption "-- Certain Covenants -- Restricted Payments" or a
Permitted Investment.

"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP; provided,
however, that if such sale and leaseback transaction results in a Capital Lease
Obligation, the amount of Indebtedness represented thereby will be determined in
accordance with the definition of "Capital Lease Obligation."

"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.

"Board of Directors" means:

(1) with respect to a corporation, the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of
such board;

(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership;

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(3) with respect to a limited liability company, the managing member
or members or any controlling committee of managing members thereof; and

(4) with respect to any other Person, the board or committee of such
Person serving a similar function.

"Borrowing Base" means, as of any date, an amount equal to:

(1) 75% of the face amount of all accounts receivable owned by
Westlake and its Subsidiaries as of the end of the most recent fiscal
quarter preceding such date that were not more than 90 days past due; plus

(2) 55% of the book value of all inventory owned by Westlake and its
Subsidiaries as of the end of the most recent fiscal quarter preceding such
date.

"Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP, and the Stated Maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be prepaid by the lessee without payment of a penalty.

"Capital Stock" means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;

(3) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership interests;
and

(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person, but excluding from all of the foregoing any
debt securities convertible into Capital Stock, whether or not such debt
securities include any right of participation with Capital Stock.

"Cash Equivalents" means:

(1) United States dollars;

(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality of the United
States government (provided that the full faith and credit of the United
States is pledged in support of those securities) having maturities of not
more than one-year from the date of acquisition;

(3) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any domestic commercial bank having capital
and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of
"B" or better;

(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;

(5) commercial paper having one of the two highest ratings obtainable
from Moody's or S&P and in each case maturing within nine months after the
date of acquisition; and

(6) investments in any U.S. dollar denominated money market fund as
defined by Rule 2a-7 under the Investment Company Act of 1940.

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"Change of Control" means the occurrence of any of the following:

(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of Westlake and its Restricted Subsidiaries taken as a
whole to any "person" (as that term is used in Section 13(d) of the
Exchange Act) other than a Principal or a Related Party of a Principal;

(2) the adoption of a plan relating to the liquidation or dissolution
of Westlake;

(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties or a Permitted Group, becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the Voting Stock of Westlake, measured by
voting power rather than number of shares, other than in any transaction
that complies with clause (4) below;

(4) Westlake consolidates with, or merges with or into, any Person, or
any Person consolidates with, or merges with or into, Westlake, in any such
event pursuant to a transaction in which any of the outstanding Voting
Stock of Westlake or such other Person is converted into or exchanged for
cash, securities or other property, other than any such transaction where
the Voting Stock of Westlake outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving
or transferee Person (immediately after giving effect to such issuance); or

(5) after an initial public offering of common stock of Westlake or
any direct or indirect parent of Westlake, the first day on which a
majority of the members of the Board of Directors of Westlake are not
Continuing Directors.

"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus,
without duplication:

(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries in connection
with an Asset Sale, to the extent such losses were deducted in computing
such Consolidated Net Income; plus

(2) provision for taxes based on income or profits of such Person and
its Restricted Subsidiaries for such period (including any provision for
taxes on the Net Income of any Joint Venture that is a pass-through entity
for federal income tax purposes, to the extent such taxes are paid or
payable by such Person or any of its Restricted Subsidiaries, provided,
however, that such provision for taxes shall only be equal to such Person's
proportional share in the Joint Venture), to the extent that such provision
for taxes was deducted in computing such Consolidated Net Income; plus

(3) the Fixed Charges of such Person and its Restricted Subsidiaries
for such period, to the extent that such Fixed Charges were deducted in
computing such Consolidated Net Income; plus

(4) depreciation, amortization (including amortization of intangibles
but excluding amortization of prepaid cash expenses that were paid in a
prior period) and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Restricted
Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing such
Consolidated Net Income; minus

(5) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business;

in each case, on a consolidated basis and determined in accordance with GAAP.

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Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash expenses
of, a Restricted Subsidiary of Westlake will be added to Consolidated Net Income
to compute Consolidated Cash Flow of Westlake only to the extent that a
corresponding amount would be permitted at the date of determination to be
distributed as a dividend to Westlake by such Restricted Subsidiary without
prior governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.

"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:

(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of dividends
or similar distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person;

(2) the Net Income of any Restricted Subsidiary will be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;

(3) the cumulative effect of a change in accounting principles will be
excluded; and

(4) notwithstanding clause (1) above, the Net Income (but not loss) of
any Unrestricted Subsidiary will be excluded, whether or not distributed to
the specified Person or one of its Subsidiaries.

"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of Westlake who:

(1) was a member of such Board of Directors on the date of the
indenture; or

(2) was nominated for election or elected or appointed to such Board
of Directors with the approval of, or whose nomination for election by the
stockholders was approved by, a majority of the Continuing Directors who
were members of such Board at the time of such nomination, appointment or
election.

"Credit Agreement" means, collectively, (i) the credit agreement dated as
of July 31, 2003 among Westlake, the guarantors and other Subsidiaries of
Westlake named therein, Bank of America, N.A., Banc of America Securities LLC
and the financial institutions named therein providing for a revolving credit
facility as described under "Description of Certain Indebtedness -- New Credit
Facility" and (ii) the credit agreement dated as of July 31, 2003 among
Westlake, the Subsidiaries of Westlake named therein, Bank of America, N.A. and
the other lenders named therein providing for a term loan as described under
"Description of Certain Indebtedness -- New Term Loan," in each case including
any related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith and in each case as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time.

"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreement and any Receivable Facility) or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to Accounts
Receivable Subsidiaries) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced (including by

115

means of sales of debt securities to institutional investors) in whole or in
part from time to time, whether or not with the same lenders or agents.

"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.

"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require
Westlake to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that Westlake may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with the covenant described above under the caption "-- Certain
Covenants -- Restricted Payments." The amount of Disqualified Stock deemed to be
outstanding at any time for purposes of the indenture will be the maximum amount
that Westlake and its Restricted Subsidiaries may become obligated to pay upon
the maturity of, or pursuant to any mandatory redemption provisions of, such
Disqualified Stock, exclusive of accrued dividends.

"Domestic Subsidiary" means any Restricted Subsidiary of Westlake that was
formed under the laws of the United States or any state of the United States or
the District of Columbia or that guarantees or otherwise provides direct credit
support for any Indebtedness of Westlake.

"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

"Existing Indebtedness" means the Indebtedness of Westlake and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the date of the indenture, including all reimbursement obligations with
respect to letters of credit outstanding as of that date, in each case until
such amounts are repaid.

"Fair Market Value" means the price that could be negotiated in an
arm's-length transaction between a willing buyer and a willing seller not
involving distress or necessity of either party, determined in good faith by the
Board of Directors of Westlake (unless otherwise provided in the indenture).

"Fixed Charge Coverage Ratio" means, with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases, redeems, defeases or otherwise discharges any
Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio will be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase, redemption, defeasance or other
discharge of Indebtedness, or such issuance, repurchase or redemption of
preferred stock, and the use of the proceeds therefrom, as if the same had
occurred at the beginning of the applicable four-quarter reference period.

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

(1) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through mergers or consolidations,
or any Person or any of its Restricted Subsidiaries acquired by the
specified Person or any of its Restricted Subsidiaries, and including any
related financing transactions and including increases in ownership of
Restricted Subsidiaries, during

116

the four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date will be given pro forma effect (in
accordance with Regulation S-X under the Securities Act) as if they had
occurred on the first day of the four-quarter reference period;

(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses (and ownership interests therein) disposed of prior to the
Calculation Date, will be excluded;

(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses (and
ownership interests therein) disposed of prior to the Calculation Date,
will be excluded, but only to the extent that the obligations giving rise
to such Fixed Charges will not be obligations of the specified Person or
any of its Restricted Subsidiaries following the Calculation Date;

(4) any Person that is a Restricted Subsidiary on the Calculation Date
will be deemed to have been a Restricted Subsidiary at all times during
such four-quarter period;

(5) any Person that is not a Restricted Subsidiary on the Calculation
Date will be deemed not to have been a Restricted Subsidiary at any time
during such four-quarter period; and

(6) if any Indebtedness bears a floating rate of interest, the
interest expense on such Indebtedness will be calculated as if the rate in
effect on the Calculation Date had been the applicable rate for the entire
period (taking into account any Hedging Obligation applicable to such
Indebtedness if such Hedging Obligation has a remaining term as at the
Calculation Date in excess of 12 months).

"Fixed Charges" means, with respect to any specified Person for any period,
the sum, without duplication, of:

(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings,
and net of the effect of all payments made or received pursuant to Hedging
Obligations; plus

(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus

(3) any interest accruing on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on assets of such Person or one of its Restricted Subsidiaries,
whether or not such Guarantee or Lien is called upon; plus

(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such Person or
any of its Restricted Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of Westlake (other than
Disqualified Stock) or to Westlake or a Restricted Subsidiary of Westlake,
times (b) a fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and local
statutory tax rate of such Person, expressed as a decimal, in each case, on
a consolidated basis and in accordance with GAAP.

However, interest payments on Indebtedness of a Joint Venture shall, in
each case, not be deemed Fixed Charges of Westlake or any Restricted Subsidiary
as of any date of determination when such Indebtedness is not considered
Indebtedness of Westlake or any Restricted Subsidiary.

"Foreign Subsidiary" means any subsidiary that is not a Domestic
Subsidiary.

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"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.

"General Partner" means a Restricted Subsidiary of Westlake or any of its
Restricted Subsidiaries that has no assets and conducts no operations other than
its ownership of a general partnership interest in a Joint Venture.

"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection or deposit in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements (other than with respect to the obligations of a Joint
Venture, solely by virtue of a Restricted Subsidiary being the General Partner
of such Joint Venture if, as of the date of determination, no payment on such
Indebtedness has been made by such General Partner of such Joint Venture and
such arrangement would not be classified and accounted for, in accordance with
GAAP, as a liability on a consolidated balance sheet of Westlake), or by
agreements to keep-well, to purchase assets, goods, securities or services, to
take or pay or to maintain financial statement conditions or otherwise).

"Guarantors" means each of:

(1) each of the Subsidiaries of Westlake listed on schedule A to the
indenture; and

(2) any other subsidiary that executes a Guarantee of the notes in
accordance with the provisions of the indenture;

in each case until a successor to such Person becomes such under the applicable
provisions of the indenture, and thereafter "Guarantor" means the successor
Person.

"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:

(1) interest rate swap agreements (whether from fixed to floating or
from floating to fixed), interest rate cap agreements and interest rate
collar agreements;

(2) other agreements or arrangements designed to manage interest rate
risk; and

(3) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates, currency values or
commodity prices.

"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:

(1) in respect of borrowed money;

(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);

(3) in respect of banker's acceptances;

(4) representing Capital Lease Obligations or Attributable Debt in
respect of sale and leaseback transactions;

(5) representing the balance deferred and unpaid of the purchase price
of any property due more than six months after such property is acquired;
or

(6) representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in
118

accordance with GAAP. In addition, the term "Indebtedness" includes all
Indebtedness of others secured by a Lien on any asset of the specified Person
(whether or not such Indebtedness is assumed by the specified Person) and, to
the extent not otherwise included, the Guarantee by the specified Person of any
Indebtedness of any other Person.

The amount of any Indebtedness outstanding as of any date will be:

(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;

(2) the principal amount of the Indebtedness, in the case of any other
Indebtedness; and

(3) in respect of Indebtedness of another Person secured by a Lien on
the assets of the specified Person, the lesser of:

(A) the Fair Market Value of such assets at the date of
determination, and

(B) the amount of the Indebtedness of the other Person.

"Investment Grade" means a rating of Baa3 or better by Moody's and BBB- or
better by S&P (or, if either such entity ceases to rate the notes for reasons
outside of the control of Westlake, the equivalent investment grade credit
rating from any other "nationally recognized statistical rating organization"
within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected
by Westlake as a replacement agency).

"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commissions, loans, fees, compensation and advances to
officers, directors and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Investment" excludes trade credit and accounts receivable in the ordinary
course of business and reimbursement obligations in respect of letters of credit
and tender, bid, performance, government contract, surety and appeal bonds, in
each case solely with respect to obligations of Westlake or any of its
Restricted Subsidiaries. If Westlake or any Restricted Subsidiary of Westlake
sells or otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of Westlake such that, after giving effect to any such
sale or disposition, such Person is no longer a Restricted Subsidiary of
Westlake, Westlake will be deemed to have made an Investment on the date of any
such sale or disposition equal to the Fair Market Value of Westlake's
Investments in such Restricted Subsidiary that were not sold or disposed of in
an amount determined as provided in the final paragraph of the covenant
described above under the caption "-- Certain Covenants -- Restricted Payments."
The acquisition by Westlake or any Restricted Subsidiary of Westlake of a Person
that holds an Investment in a third Person will be deemed to be an Investment by
Westlake or such Restricted Subsidiary in such third Person in an amount equal
to the Fair Market Value of the Investments held by the acquired Person in such
third Person in an amount determined as provided in the final paragraph of the
covenant described above under the caption "-- Certain Covenants -- Restricted
Payments." Except as otherwise provided in the indenture, the amount of an
Investment will be determined at the time the Investment is made and without
giving effect to subsequent changes in value.

"Joint Venture" means any joint venture between Westlake and/or any
Restricted Subsidiary and any other Person, if such joint venture is:

(1) owned 50% or less by Westlake and/or any of its Restricted
Subsidiaries; and

(2) not directly or indirectly controlled by or under direct or
indirect common control of Westlake and/or any of its Restricted
Subsidiaries.

For purposes of this definition, "control," as used with respect to any
entity, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such
119

entity, whether through the ownership of voting securities, by agreement or
otherwise. For purposes of this definition, the terms "controlling," "controlled
by" and "under common control with" have correlative meanings.

"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.

"Limited Recourse Stock Pledge" means the pledge of Equity Interests in any
Joint Venture or any Unrestricted Subsidiary to secure Non-Recourse Debt of such
Joint Venture or Unrestricted Subsidiary, which pledge is made by a Restricted
Subsidiary of Westlake, the activities of which are limited to making and
managing Investments, and owning Equity Interests, in such Joint Venture or
Unrestricted Subsidiary, but only for so long as its activities are so limited.

"Moody's" means Moody's Investors Service, Inc.

"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:

(1) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with: (a) any
Asset Sale or any disposition pursuant to a sale and leaseback transaction;
or (b) the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries; and

(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).

"Net Proceeds" means the aggregate cash proceeds received by Westlake or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of (1) the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale, (2) taxes paid or payable as a result of
the Asset Sale, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, (3) amounts required to
be paid to holders of minority interests in Restricted Subsidiaries or Joint
Ventures as a result of such Asset Sale, (4) amounts required to be applied to
the repayment of Indebtedness, other than Indebtedness under a Credit Facility,
secured by a Lien on the asset or assets that were the subject of such Asset
Sale, or which must by the terms of such Lien or by applicable law be repaid out
of the proceeds of such Asset Sale, (5) all payments made with respect to
liabilities directly associated with the assets which are the subject of the
Asset Sale, including, without limitation, trade payables and other accrued
liabilities, and (6) any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.

"Non-Recourse Debt" means Indebtedness:

(1) as to which neither Westlake nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;

(2) no default with respect to which (including any rights that the
holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both
any holder of any other Indebtedness of Westlake or any of its Restricted

120

Subsidiaries to declare a default on such other Indebtedness or cause the
payment of the Indebtedness to be accelerated or payable prior to its
Stated Maturity; and

(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of Westlake or any of its
Restricted Subsidiaries, other than the Equity Interests of a Joint Venture
that is not a Restricted Subsidiary or of an Unrestricted Subsidiary
pledged by Westlake or any of its Restricted Subsidiaries as a Limited
Recourse Stock Pledge.

"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

"Pari Passu Indebtedness" means, in the case of the notes, any senior
Indebtedness of Westlake and, in the case of the Guarantees of the notes, any
senior Indebtedness of the guarantor thereof, including, in each case,
Indebtedness and other Obligations outstanding under a Credit Facility.

"Permitted Business" means the petrochemical, chemicals, and vinyls or
plastic fabrications business and any other businesses related, incidental,
complementary or ancillary thereto.

"Permitted Group" means any group of investors that is deemed to be a
"person" (as that term is used in Section 13(d)(3) of the Exchange Act) at any
time prior to Westlake's initial public offering of common stock, provided that
no single Person (other than the Principals and their Related Parties)
Beneficially Owns (together with its Affiliates) more of the Voting Stock of
Westlake that is Beneficially Owned by such group of investors than is then
collectively Beneficially Owned by the Principals and their Related Parties in
the aggregate.

"Permitted Investments" means:

(1) any Investment in Westlake or in a Restricted Subsidiary of
Westlake that is a Guarantor;

(2) any Investment in Cash Equivalents;

(3) any Investment by Westlake or any Restricted Subsidiary of
Westlake in a Person, if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary of Westlake and a
Guarantor; or

(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, Westlake or a Restricted Subsidiary of Westlake that is
a Guarantor;

(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales";

(5) any acquisition of assets or Capital Stock solely in exchange for
the, or out of the net cash proceeds of a substantially concurrent,
issuance of Equity Interests (other than Disqualified Stock) of Westlake;

(6) any Investments received in settlement, compromise or resolution
of (A) obligations of trade creditors or customers that were incurred in
the ordinary course of business of Westlake or any of its Restricted
Subsidiaries, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor or
customer; or (B) litigation, arbitration or other disputes with Persons who
are not Affiliates;

(7) Investments represented by Hedging Obligations;

(8) loans or advances to employees made in the ordinary course of
business of Westlake or the Restricted Subsidiary of Westlake in an
aggregate principal amount not to exceed $2.0 million at any one time
outstanding;

121

(9) Investments in an Accounts Receivable Subsidiary that, as
conclusively determined by the Board of Directors of Westlake, are
necessary or advisable to effect a Receivables Facility;

(10) Limited Recourse Stock Pledges;

(11) additional Investments in a Subsidiary of Westlake holding an
interest in Suzhou Huasu Plastics Co. Ltd. in an aggregate amount not to
exceed $8.5 million;

(12) Investments in Joint Ventures in an aggregate amount not to
exceed $25.0 million;

(13) repurchases of the notes; and

(14) other Investments in any Person having an aggregate Fair Market
Value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (14) that are at the time
outstanding not to exceed $10.0 million.

"Permitted Liens" means:

(1) Liens on assets of Westlake or any Guarantor securing Pari Passu
Indebtedness that is permitted by the terms of the indenture to be incurred
and/or securing Hedging Obligations related thereto;

(2) Liens in favor of Westlake or any Guarantor;

(3) Liens on property of a Person existing at the time such Person
becomes a Subsidiary or is merged with or into or consolidated with
Westlake or any Subsidiary of Westlake; provided that such Liens were in
existence prior to the contemplation of such acquisition, merger or
consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with Westlake or the Subsidiary or that
becomes a Subsidiary;

(4) Liens on property (including Capital Stock) existing at the time
of acquisition of the property by Westlake or any Subsidiary of Westlake,
provided that such Liens were in existence prior to, and not incurred in
contemplation of, such acquisition;

(5) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (4) of the second paragraph of the covenant entitled
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" covering only the assets acquired with or financed by such
Indebtedness;

(6) Liens existing on the date of the indenture;

(7) Liens imposed by law, such as carriers', warehousemen's,
landlord's and mechanics' Liens, in each case, incurred in the ordinary
course of business;

(8) Liens created for the benefit of (or to secure) the notes (or
Guarantees of the notes);

(9) Liens securing reimbursement obligations with respect to
commercial letters of credit obtained in the ordinary course of business,
consistent with past practices, which encumber documents and other property
or assets relating to such letters of credit and products and proceeds
thereof;

(10) Liens incurred or assumed in connection with the issuance of
revenue bonds the interest on which is exempt from federal income taxation
pursuant to Section 103(b) of the Internal Revenue Code, including, without
limitation, liens as a cash collateral account securing existing
reimbursement obligations with respect to a letter of credit issued
pursuant thereto;

(11) customary Liens for the fees, costs and expenses of trustees and
escrow agents pursuant to any indenture, escrow agreement or similar
agreement establishing a trust or escrow arrangement;

(12) Liens on assets of Westlake or any Restricted Subsidiary arising
as a result of a sale and leaseback transaction with respect to such
assets; provided that the proceeds from such sale and leaseback transaction
are applied to the repayment of Indebtedness or acquisition of assets or
the
122

making of capital expenditures pursuant to the covenant described above
under the caption "-- Repurchase at Option of Holders -- Asset Sales;"

(13) Liens on accounts receivable and related property deemed to arise
in connection with any Receivables Facility;

(14) the interest of a lessor or licensor under an operating lease or
license under which Westlake or any of its Restricted Subsidiaries are
lessee, sublessee, or licensee, including protective financing statement
filings;

(15) Limited Recourse Stock Pledges;

(16) Liens encumbering customary initial deposits and margin deposits,
netting provisions and setoff rights, in each case securing Indebtedness
under Hedging Obligations;

(17) Liens to secure any Permitted Refinancing Indebtedness permitted
to be incurred under the indenture; provided, however, that:

(A) the new Lien shall be limited to all or part of the same
property and assets that secured or, under the written agreements
pursuant to which the original Lien arose, could secure the original
Lien (plus improvements and accessions to, such property or proceeds or
distributions thereof); and

(B) the Indebtedness secured by the new Lien is not increased to
any amount greater than the sum of (x) the outstanding principal amount
or, if greater, committed amount, of the Permitted Referencing
Indebtedness and (y) an amount necessary to pay any fees and expenses,
including premiums, related to such refinancings, refunding, extension,
renewal or replacement; and

(18) Liens incurred in the ordinary course of business of Westlake or
any Restricted Subsidiary of Westlake with respect to obligations that do
not exceed $10.0 million at any one time outstanding.

"Permitted Payments to Parent" means, without duplication as to amounts:

(1) payments to the Parent to permit the Parent to pay when due, or
the incurrence by Westlake or any Restricted Subsidiary of expenses on
behalf of Parent with respect to, reasonable accounting, legal and
administrative expenses of the Parent, in an aggregate amount not to exceed
$1.0 million per annum; and

(2) for so long as Westlake is a member of a group filing a
consolidated or combined tax return with the Parent, payments to the Parent
in the amount of the relevant tax (including any penalties and interest)
that Westlake would owe if Westlake were filing a separate tax return (or a
separate consolidated or combined return with its Subsidiaries that are
members of the consolidated or combined group), taking into account any
carryovers and carrybacks of tax attributes (such as net operating losses)
of Westlake and such Subsidiaries from other taxable years.

"Permitted Refinancing Indebtedness" means any Indebtedness of Westlake or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of Westlake or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided that:

(1) the principal amount (or initial accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount outstanding, or in the case of a revolving line of credit, available
(or accreted value, if applicable) of the Indebtedness extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest on the Indebtedness and the amount of all expenses and premiums
incurred in connection therewith);

(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted

123

Average Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;

(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the notes or
the related Guarantees, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the notes or the related Guarantees, as applicable, on
subordination terms at least as favorable to the holders of notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and

(4) such Indebtedness is incurred either by Westlake or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.

"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.

"Principals" means T.T. Chao, his descendants, including by adoption, and
the spouses of any such individuals.

"Public Equity Offering" means any underwritten public equity offering of
common stock of Westlake yielding gross proceeds to the issuer of at least $25.0
million.

"Receivables Facilities" means one or more receivables financing facilities
or arrangements, as amended from time to time, pursuant to which Westlake or any
of its Restricted Subsidiaries sells (including a sale in exchange for a
promissory note of or Equity Interest in an Accounts Receivable Subsidiary) its
accounts receivable, related assets and the provision of billing, collection and
other services in connection therewith, in each case to an Accounts Receivable
Subsidiary.

"Receivables Fees" means distributions or payments made directly or by
means of discounts with respect to any participation interests issued or sold in
connection with, and other fees paid to a Person that is not Westlake or a
Restricted Subsidiary in connection with, any Receivables Facility.

"Related Party" means:

(1) any controlling stockholder, 80% (or more) owned Subsidiary, or
immediate family member (in the case of an individual) of any Principal; or

(2) any Person, the beneficiaries, stockholders, partners, owners or
Persons beneficially holding a 50% or more controlling interest of which
consist of any one or more Principals and/or such other Persons referred to
in the immediately preceding clause (1).

"Restricted Investment" means an Investment other than a Permitted
Investment.

"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary. Unless the context otherwise
requires, each reference to a "Restricted Subsidiary" shall refer to a
Subsidiary of Westlake.

"S&P" means Standard & Poor's Ratings Services.

"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
the indenture.

"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness, and will not include any contingent obligations to repay,
redeem or repurchase any such interest or principal prior to the date originally
scheduled for the payment thereof.

124

"Subsidiary" means, with respect to any specified Person:

(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency and after giving
effect to any voting agreement or stockholders' agreement that effectively
transfers voting power) to vote in the election of directors, managers or
trustees of the corporation, association or other business entity is at the
time owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person (or a combination thereof);
and

(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).

"Treasury Rate" means, as of any redemption date, the yield to maturity as
of such redemption date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
business days prior to the redemption date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the redemption date to July 15, 2007; provided,
however, that if the period from the redemption date to July 15, 2007, is less
than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year will be used.

"Unrestricted Subsidiary" means (i) any Accounts Receivable Subsidiary,
(ii) a Subsidiary holding an interest in Suzhou Huasu Plastics Co. Ltd., (iii)
any Subsidiary of an Unrestricted Subsidiary and (iv) any other Subsidiary of
Westlake that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that such
Subsidiary:

(1) has no Indebtedness other than Non-Recourse Debt;

(2) is not party to any agreement, contract, arrangement or
understanding with Westlake or any Restricted Subsidiary of Westlake unless
the terms of any such agreement, contract, arrangement or understanding are
no less favorable to Westlake or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of
Westlake;

(3) is a Person with respect to which neither Westlake nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and

(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of Westlake or any of its Restricted
Subsidiaries.

Any designation of a Subsidiary of Westlake as an Unrestricted Subsidiary
will be evidenced to the trustee by filing with the trustee a certified copy of
the Board Resolution giving effect to such designation and an officers'
certificate certifying that such designation complied with the preceding
conditions and was permitted by the covenant described above under the caption
"-- Certain Covenants -- Restricted Payments." If, at any time, any Unrestricted
Subsidiary (other than an Accounts Receivable Subsidiary) designated after the
date of the indenture would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of the indenture and any Indebtedness of such Subsidiary
will be deemed to be incurred by a Restricted Subsidiary of Westlake as of such
date and, if such Indebtedness is not permitted to be incurred as of such date
under the covenant described under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock,"
Westlake will be in default of such covenant. The Board of Directors of Westlake
may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation will be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of Westlake of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (1) such Indebtedness is permitted under the covenant

125

described under the caption "-- Certain Covenants -- Incurrence of Indebtedness
and Issuance of Preferred Stock," calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period;
and (2) no Default or Event of Default would be in existence following such
designation.

"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:

(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (b) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of
such payment; by

(2) the then outstanding principal amount of such Indebtedness.

"Wholly-Owned" Subsidiary of any specified Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) will at the time be owned by
such Person or by one or more Wholly-Owned Subsidiaries of such Person and one
or more Wholly-Owned Subsidiaries of such Person.

126

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

We have based the following discussion on the current provisions of the
Internal Revenue Code of 1986, applicable Treasury regulations, judicial
authority and administrative rulings. We have not obtained an opinion of counsel
and have not sought a ruling from the Internal Revenue Service, and we can give
you no assurance that the IRS will agree with the following discussion. Changes
in the applicable law may occur that may be retroactive and could affect the tax
consequences to you of the receipt of new notes in exchange for old notes in the
exchange offer. We do not discuss the effect of special rules such as those that
apply to insurance companies, tax-exempt organizations, financial institutions,
broker-dealers, foreign corporations, and a person who is not a citizen or
resident of the United States. WE RECOMMEND THAT YOU CONSULT YOUR OWN TAX
ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES OF RECEIVING NEW NOTES IN EXCHANGE
FOR OLD NOTES IN THE EXCHANGE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF
ANY STATE, LOCAL OR FOREIGN TAX LAW.

We believe that the receipt of new notes in exchange for old notes in the
exchange offer should not be treated as an exchange for United States federal
income tax purposes because the new notes and the old notes are not materially
different in kind or in extent, and as a result on the receipt of new notes in
exchange for old notes in the exchange offer you should not recognize gain or
loss, your initial tax basis in the new notes should be the same as your
adjusted tax basis in the old notes immediately before such exchange, and your
holding period for the new notes should include your holding period for the old
notes.

127

PLAN OF DISTRIBUTION

Based on interpretations by the staff of the SEC in no-action letters
issued to third parties, we believe that you may transfer new notes issued in
the exchange offer in exchange for the old notes if:

- you acquire the new notes in the ordinary course of your business; and

- you are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of new notes.

We believe that you may not transfer new notes issued in the exchange offer
in exchange for the old notes if you are:

- our "affiliate" within the meaning of Rule 405 under the Securities Act;

- a broker-dealer that acquired old notes directly from us; or

- a broker-dealer that acquired old notes as a result of market-making
activities or other trading activities, unless you comply with the
registration and prospectus delivery provisions of the Securities Act.

If you wish to exchange your old notes for new notes in the exchange offer,
you will be required to make representations to us as described above under "The
Exchange Offer -- Procedures for Tendering -- Your Representations to Us" of
this prospectus and in the letter of transmittal. In addition, each broker-
dealer that receives new notes for its own account in the exchange offer must
acknowledge that it will deliver a prospectus in connection with any resale of
those new notes. This prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of new notes
received in exchange for old notes where such old notes were acquired as a
result of market-making activities or other trading activities. We have agreed
that, for a period of 180 days after the expiration date of the exchange offer,
we will make this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In addition, until
[ ], 2004, all dealers effecting transactions in the new notes may be
required to deliver a prospectus.

We are entitled under the registration rights agreement to suspend the use
of this prospectus by broker-dealers under specified circumstances. For example,
we may suspend the use of this prospectus if:

- the SEC requests an amendment or supplement to this prospectus or the
related registration statement or additional information;

- the SEC issues any stop order suspending the effectiveness of the
registration statement or initiates proceedings for that purpose;

- we receive notification of the suspension of the qualification of the
new notes for sale in any jurisdiction or the initiation or threatening
of any proceeding for that purpose;

- the suspension is required by law;

- the suspension is taken by us in good faith and for valid business
reason, including the possible acquisition or divestiture of assets or a
material corporate transaction or event; or

- the happening of any event or the discovery of any fact makes any
statement made in this prospectus untrue in any material respect or
constitutes an omission to state a material fact in this prospectus.

If we suspend the use of this prospectus, the 180-day period referred to above
will be extended by a number of days equal to the period of the suspension.

128

We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account in
the exchange offer may be sold from time to time in one or more transactions:

- in the over-the-counter market;

- in negotiated transactions;

- through the writing of options on the new notes; or

- a combination of those methods of resale.

The prices at which these sales occur may be at:

- market prices prevailing at the time of resale;

- prices related to prevailing market prices; or

- negotiated prices.

Any resales may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from the selling broker-dealer or the purchasers of the new notes. Any
broker-dealer that resells new notes that were received by it for its own
account under the exchange offer and any broker or dealer that participates in a
distribution of the new notes may be deemed to be an "underwriter" within the
meaning of the Securities Act, and any profit on any resale of new notes and any
commissions or concessions received by these persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

For a period of 180 days after the expiration date of the exchange offer,
we will promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the letter of transmittal. We have agreed to pay all expenses incidental to
the exchange offer, including the expenses of one counsel for the holders of old
notes, other than commissions and concessions of any brokers or dealers. We also
have agreed that we will indemnify specified holders of the new notes, including
broker-dealers, against certain liabilities, including liabilities under the
Securities Act.

129

TRANSFER RESTRICTIONS ON OLD NOTES

The old notes were not registered under the Securities Act. Accordingly, we
offered and sold the old notes only in private sales exempt from or not subject
to the registration requirements of the Securities Act:

- to "qualified institutional buyers" under Rule 144A under the Securities
Act; and

- outside the United States in compliance with Regulation S under the
Securities Act.

You may not offer or sell those old notes in the United States or to, or for the
account or benefit of, U.S. persons except in transactions exempt from or not
subject to the Securities Act registration requirements.

LEGAL MATTERS

Certain legal matters in connection with the offering of the new notes will
be passed upon for us by Baker Botts L.L.P., Houston, Texas.

EXPERTS

The consolidated financial statements as of December 31, 2002 and 2001 and
for each of the three years in the period ended December 31, 2002 included in
this prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

130

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<Table>
<Caption>
PAGE(S)
-------

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets as of June 30, 2003 and December
31, 2002.................................................. F-2
Consolidated Statements of Operations and Comprehensive
Income (Loss) for Six Months Ended June 30, 2003 and
2002...................................................... F-3
Consolidated Statements of Cash Flows for Six Months Ended
June 30, 2003 and 2002.................................... F-4
Notes to Consolidated Financial Statements.................. F-5
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Auditors.............................. F-18
Consolidated Balance Sheets as of December 31, 2002 and
2001...................................................... F-19
Consolidated Statements of Operations and Comprehensive
Income (Loss) for Years Ended December 31, 2002, 2001 and
2000...................................................... F-20
Consolidated Statements of Changes in Stockholders' Equity
for Years Ended December 31, 2002, 2001 and 2000.......... F-21
Consolidated Statements of Cash Flows for Years Ended
December 31, 2002, 2001 and 2000.......................... F-22
Notes to Consolidated Financial Statements.................. F-23
Schedule II -- Valuation and Qualifying Accounts............ F-62
</Table>

F-1

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

<Table>
<Caption>
JUNE 30, DECEMBER 31,
2003 2002
---------- ------------
(IN THOUSANDS OF DOLLARS,
EXCEPT SHARE AMOUNTS)

ASSETS
Current assets
Cash and cash equivalents................................. $ 9,587 $ 10,074
Accounts receivable, net.................................. 141,483 123,234
Inventories, net.......................................... 208,229 170,866
Prepaid expenses and other current assets................. 5,900 14,246
Deferred income taxes..................................... 17,052 17,052
---------- ----------
Total current assets................................. 382,251 335,472
Property, plant and equipment, net.......................... 919,460 935,463
Equity investment........................................... 15,806 14,990
Other assets, net........................................... 37,753 36,128
---------- ----------
Total assets......................................... $1,355,270 $1,322,053
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable.......................................... $ 77,013 $ 68,207
Accrued liabilities....................................... 75,278 66,454
Current portion of long-term debt......................... 1,200 14,673
---------- ----------
Total current liabilities............................ 153,491 149,334
Long-term debt.............................................. 494,267 491,677
Deferred income taxes....................................... 139,997 132,782
Other liabilities........................................... 23,144 23,541
---------- ----------
Total liabilities.................................... 810,899 797,334
---------- ----------
Minority interest........................................... 82,622 81,294
---------- ----------
Stockholders' equity
Preferred stock, nonvoting, noncumulative, no par value,
1,000 shares authorized; 890 shares issued and
outstanding............................................ 89,000 89,000
Common stock, $1 par value, 10,000 shares authorized;
1,115 shares issued and outstanding.................... 1 1
Additional paid-in capital................................ 309,601 304,364
Retained earnings......................................... 65,310 53,636
Minimum pension liability................................. (2,006) (2,006)
Cumulative foreign currency translation................... (157) (1,570)
---------- ----------
Total stockholders' equity........................... 461,749 443,425
---------- ----------
Total liabilities and stockholders' equity........... $1,355,270 $1,322,053
========== ==========
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
F-2

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
-------------------------
2003 2002
----------- -----------
(IN THOUSANDS OF DOLLARS)

Net sales................................................... $698,557 $485,624
Cost of sales............................................... 635,048 481,681
-------- --------
63,509 3,943
Selling, general and administrative expenses................ 31,663 26,613
Impairment of long-lived assets............................. 932 --
-------- --------
Income (loss) from operations............................... 30,914 (22,670)
OTHER INCOME (EXPENSE)
Interest expense............................................ (16,544) (16,221)
Other income, net........................................... 6,310 6,530
-------- --------
Income (loss) before income taxes and minority interest..... 20,680 (32,361)
-------- --------
PROVISION FOR (BENEFIT FROM) INCOME TAXES
Current..................................................... 462 396
Deferred.................................................... 7,215 (12,687)
-------- --------
7,677 (12,291)
-------- --------
Income (loss) before minority interest...................... 13,003 (20,070)
Minority interest in the net income (loss) of consolidated
subsidiary................................................ 1,329 (5,173)
-------- --------
Net income (loss)........................................... 11,674 (14,897)
OTHER COMPREHENSIVE INCOME (LOSS)
Change in foreign currency translation...................... 1,413 526
-------- --------
Comprehensive income (loss)................................. $ 13,087 $(14,371)
======== ========
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
F-3

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
-------------------------
2003 2002
----------- -----------
(IN THOUSANDS OF DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)........................................... $ 11,674 $(14,897)
-------- --------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization............................. 42,801 42,768
Provision for bad debts................................... 2,930 5,722
Amortization of debt issue costs.......................... 2,203 917
(Gain) loss from disposition of fixed assets.............. (2,824) 46
Impairment of long-lived assets........................... 932 --
Deferred income taxes..................................... 7,215 (12,687)
Minority interest in income (loss)........................ 1,329 (5,173)
Changes in operating assets and liabilities
Accounts receivable.................................... (21,179) (53,846)
Inventories............................................ (37,363) 4,683
Prepaid expenses and other current assets.............. 8,346 (288)
Accounts payable....................................... 8,806 (4,854)
Accrued liabilities.................................... 8,824 2,954
Other, net............................................. (8,498) (9,229)
-------- --------
Total adjustments.................................... 13,522 (28,987)
-------- --------
Net cash provided by (used for) operating
activities.......................................... 25,196 (43,884)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment.................. (18,977) (21,436)
Proceeds from insurance claims.............................. 3,257 1,680
-------- --------
Net cash used for investing activities............... (15,720) (19,756)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Equity contribution from parent............................. 1,037 --
Proceeds from borrowings.................................... 125,500 14,390
Repayments of borrowings.................................... (136,500) (19,433)
-------- --------
Net cash used for financing activities............... (9,963) (5,043)
-------- --------
Net increase (decrease) in cash and cash equivalents........ (487) (68,683)
Cash and cash equivalents at beginning of period............ 10,074 78,991
-------- --------
Cash and cash equivalents at end of period.................. $ 9,587 $ 10,308
======== ========
Supplemental schedule of noncash investing activities:
Contribution of common stock of GVGP, Inc. and Geismar
Holdings, Inc.......................................... $ 4,200
========
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
F-4

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS)

1. BASIS OF FINANCIAL STATEMENTS

The accompanying unaudited consolidated financial statements do not include
all information and footnotes required for complete financial statements under
generally accepted accounting principles in the United States. The financial
statements have been prepared in conformity with the accounting principles and
practices as disclosed in the financial statements for the years ended December
31, 2002, 2001 and 2000 for Westlake Chemical Corporation (the "Company")
presented elsewhere in this prospectus. In the opinion of the Company, the
accompanying unaudited interim financial statements reflect all adjustments
(consisting only of normal recurring adjustments) that are necessary for a fair
presentation of the Company's financial position as of June 30, 2003, the
results of operations for the six months ended June 30, 2003 and 2002 and the
changes in its cash position for the six months ended June 30, 2003 and 2002.
Results of operations for the interim periods presented are not necessarily
indicative of the results that will be realized for the year ending December 31,
2003 or any other interim period. The financial statements should be read in
conjunction with the Company's audited financial statements for the year ended
December 31, 2002 and the notes thereto presented elsewhere in this prospectus.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, and the disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.

2. ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:

<Table>
<Caption>
JUNE 30, DECEMBER 31,
2003 2002
-------- ------------

Accounts receivable -- trade................................ $ 52,000 $ 51,924
Accounts receivable -- affiliates........................... 100,958 80,623
Allowance for doubtful accounts............................. (17,933) (13,382)
-------- --------
135,025 119,165
Taxes receivable............................................ 216 1,235
Accounts receivable -- other................................ 6,242 2,834
-------- --------
$141,483 $123,234
======== ========
</Table>

3. INVENTORIES

Inventories consist of the following:

<Table>
<Caption>
JUNE 30, DECEMBER 31,
2003 2002
--------- ------------

Finished product............................................ $138,168 $103,646
Feedstock, additives and chemicals.......................... 52,787 49,534
Materials and supplies...................................... 25,504 26,428
-------- --------
216,459 179,608
Allowance for inventory obsolescence........................ (8,230) (8,742)
-------- --------
Net inventory............................................... $208,229 $170,866
======== ========
</Table>

F-5

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

In December 2002, the Company entered into an agreement with an
unaffiliated third party to sell 15 million pounds of finished product inventory
during 2003 at a fixed price. In accordance with the agreement, the Company will
be required to repurchase this inventory throughout 2003 at market prices at the
time of the repurchase after certain agreed upon adjustments. Due to the terms
of the agreement, cash received from the sale of the inventory is recorded as a
liability, which is adjusted to the market value of the inventory to reflect the
repurchase obligations. The Company recognized losses of $1,155 for the six
months ended June 30, 2003 related to this agreement. No gains or losses were
recognized in 2002. As of June 30, 2003 and December 31, 2002, the Company had
$2,437 and $4,279, respectively, of inventory separately identified and
restricted for use in accordance with this agreement.

4. PROPERTY, PLANT AND EQUIPMENT

Depreciation expense on property, plant and equipment of $39,289 and
$38,526 is included in cost of sales in the consolidated statement of operations
for the six months ended June 30, 2003 and 2002, respectively. The Company
recognized a gain from disposition of fixed assets of $2,824 due to $3,257 of
insurance proceeds received during the six months ended June 30, 2003. The
Company also recognized a $932 impairment charge related to idled Styrene assets
during the same period.

5. OTHER ASSETS

Amortization expense on other assets of $5,715 and $5,159 is included in
selling, general, and administrative expenses in the consolidated statement of
operations for the six months ended June 30, 2003 and 2002, respectively.

6. DERIVATIVE COMMODITY INSTRUMENTS

The Company had gains of $1,047 in connection with commodity derivatives
and inventory repurchase obligations for the six months ended June 30, 2003
compared to gains of $545 for the six months ended June 30, 2002. Derivative
gains and losses recorded in the second quarter totaled $2,675 and $545,
respectively, for 2003 and 2002. No derivatives gain or loss was recorded in the
first quarter of 2002. Risk management asset balances of $3,317 and $185 were
included in "Prepaid expenses and other current assets" and risk management
liability balances of $524 and $326 were included in "Accrued liabilities" in
the Company's balance sheets as of June 30, 2003 and December 31, 2002,
respectively. At June 30, 2003, the fair value of the natural gas futures
contracts for 880,000 mmbtu and propane forward contracts for 385,000 barrels
were obtained from a third party.

7. INCOME TAXES

The Company's effective tax rate for the six months ended June 30, 2003 and
2002 was 37% and 38%, respectively. The Company recognized income tax expense of
$7,677 for the six months ended June 30, 2003 as compared to a benefit of
$12,291 for the six months ended June 30, 2002 as a result of positive earnings
for the U.S. operations in the first six months of 2003 as compared to a loss in
the first six months of 2002. The effective tax rates for the six months ended
June 30, 2003 and 2002 are different from the federal statutory tax rate due to
state taxes.

8. COMMITMENTS AND CONTINGENCIES

The Company is involved in various legal proceedings in the ordinary course
of business. In management's opinion, none of these proceedings will have a
material adverse effect on the Company's financial condition, results of
operations and cash flows.

F-6

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

The Company is subject to environmental laws and regulations that may
require it to remove or mitigate the effects of the disposal or release of
chemical substances at various sites. Under some of these laws and regulations,
a current or previous owner or operator of property may be held liable for the
costs of removal or remediation of hazardous substances on, under, or in its
property, without regard to whether the owner or operator knew of, or caused the
presence of the contaminants, and regardless of whether the practices that
resulted in the contamination were legal at the time they occurred. As several
of the Company's production sites have a history of industrial use, it is
impossible to predict precisely what effect these laws and regulations will have
on the Company in the future. As is typical for chemical businesses, soil and
groundwater contamination has occurred in the past at some of the Company's
sites, and might occur or be discovered at other sites in the future. The
Company has typically conducted extensive soil and groundwater assessments
throughout its operations either prior to acquisitions or associated with
subsequent permitting requirements. The Company's investigations have not
revealed any contamination caused by its operations that would likely require it
to incur material long term remediation efforts and associated liabilities.

Lake Charles. In the fall of 2000, the Company determined that it was not
in compliance with certain Clean Air Act regulations governing emissions of
benzene from its two ethylene plants in Lake Charles. The Company voluntarily
reported this discovery to the Louisiana Department of Environmental Quality, or
LDEQ, and began negotiations to resolve the matter. The Company subsequently
expanded the scope of its settlement discussions to include other environmental
non-compliance matters at all of its plants in Lake Charles. The Company has
reached a tentative settlement with the LDEQ requiring it to pay $815 in
penalties and to perform specified beneficial environmental projects that will
cost approximately $4,400. A majority of these expenditures has already been
made. The LDEQ has requested public comments on the terms of the proposed
settlement agreement, and the Company believes that it will be finalized later
this year.

Calvert City. In connection with the Company's acquisition of the
manufacturing complex in Calvert City from Goodrich Corporation ("Goodrich") in
1990 and 1997, Goodrich agreed to indemnify the Company for any liabilities
related to pre-existing contamination at the site. Contamination at the Calvert
City facilities is currently being investigated and remediated by PolyOne, an
entity spun off from Goodrich in 1993 that assumed remediation and
indemnification obligations for the site. For the past three years, PolyOne has
suggested that the Company's actions after its acquisition of the complex have
contributed to or otherwise exacerbated the contamination at the site. The
Company has denied those allegations and has retained technical experts to
evaluate its position. Goodrich has also asserted similar claims. In addition,
Goodrich has asserted that the Company is responsible for a portion of the
ongoing costs of treating contaminated groundwater being pumped from beneath the
site and has withheld payment for a portion of the costs that the Company incurs
to operate Goodrich's pollution control equipment located on the Company's
property. The Company met with Goodrich representatives in July and August of
2003 to discuss Goodrich's assertions and has requested further information from
Goodrich.

In March and June 2002, the EPA's National Enforcement Investigation
Center, or NEIC, conducted an environmental investigation of the Company's
manufacturing complex in Calvert City. In May 2003, the Company received a
report prepared by NEIC summarizing the results of that investigation. Among
other things, the NEIC concluded that the requirements of several regulatory
provisions had not been met. The Company has begun to analyze the NEIC report
and has identified areas where the Company believes that erroneous factual or
legal conclusions, or both, may have been drawn by NEIC. The Company has met
with the EPA and plans additional meetings with the EPA to review its
conclusions. Nevertheless, it is likely that penalties will be imposed or that
expenditures for installation of environmental controls will be required, or
both, by either the EPA or the Kentucky Department of Environmental Protection
as a

F-7

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

result of this investigation. At this time, the Company is unable to estimate
the amount of penalties or expenditures that may be required.

Geismar. In 2003, the Company acquired portions of an idled chemical
complex in Geismar, Louisiana that were previously owned and operated by Borden
Chemicals, Inc. and Borden Chemicals and Plastics Operating Limited Partnership,
or BCP. In 1998, BCP entered into a consent decree with the U.S. Environmental
Protection Agency and the LDEQ to investigate and remediate contaminated soil
and groundwater at the site. As a part of BCP's bankruptcy reorganization,
Borden Chemicals assumed BCP's obligations under the 1998 consent decree in a
separate settlement agreement with the EPA and the LDEQ. Early in 2002, the
Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA,
was amended to create a new defense against liability for purchasers of
contaminated property. The Company believes that it meets the criteria set forth
in the statute to take advantage of the "bona fide purchaser" defense with
respect to pre-existing contamination as long as, among other things, the
Company does not release hazardous substances at the site that create a material
effect and the Company cooperates with Borden Chemicals as it performs its
remediation obligations at the site. In August 2003, the LDEQ notified the
Company that it will first look to Borden Chemicals to address cleanup
responsibilities for existing contamination on the property the Company
acquired.

It is the Company's policy to comply with all environmental, health and
safety requirements and to provide safe and environmentally sound workplaces for
its employees. In some cases, compliance can be achieved only by incurring
capital expenditures, and the Company is faced with instances of non-compliance
from time to time.

It is difficult to estimate the future costs of environmental protection
and remediation because of many uncertainties, including uncertainties about the
status of laws, regulations and information related to individual locations and
sites and the Company's ability to rely on third parties to carry out such
remediation. Subject to the foregoing, but taking into consideration the
Company's experience regarding environmental matters of a similar nature and
facts currently known, the Company believes that capital expenditures and
remedial actions to comply with existing laws governing environmental protection
will not have a material adverse effect on the Company's business and financial
results.

In connection with the purchase of the Calvert City facilities in 1997, the
Company acquired 10 barges that it uses to transport chemicals on the
Mississippi, Ohio and Illinois Rivers. In April 1999, the U.S. Coast Guard
issued a forfeiture order permanently barring the use of the barges in coastwise
trade due to an alleged violation of a federal statute regarding the citizenship
of the purchaser. The Company appealed the forfeiture order with the Coast Guard
and, in June 1999, the Company filed suit in the U.S. Court of Appeals for the
D.C. Circuit seeking a stay of the order pending resolution of the Coast Guard
appeal. The D.C. Circuit granted the stay and the Company is able to use the
barges pending resolution of its appeal with the Coast Guard. The Coast Guard
has indicated that it will issue an order resolving the Company's administrative
appeal on or about October 2003. The Company is exploring the option of seeking
legislative relief through a private bill from the U.S. Congress, and the Coast
Guard has stated that it will not oppose such efforts. The Company does not
believe that the ultimate outcome of this matter will have a material adverse
effect on its business, although there can be no assurance in this regard.

In March 2002, the Company was awarded $16,300, plus legal fees and costs,
by the U.S. District Court of the Western District of Louisiana, resulting from
the Company's counterclaim in the Taita Chemical Company, LTD ("Taita") vs.
Westlake Styrene Corporation ("WSC") lawsuit. The suit was brought by Taita in
1997 to recoup alleged overpayments relative to a styrene purchase agreement
between Taita and WSC. The case is currently on appeal and scheduled for a
hearing on September 3, 2003. No gain or loss was recognized as of June 30, 2003
or December 31, 2002.
F-8

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

The Company has various purchase commitments for materials, supplies and
services incident to the ordinary conduct of business. Such commitments are at
prices not in excess of market prices. Certain feedstock purchase commitments
require taking delivery of minimum volumes at market-determined prices.

9. SEGMENT INFORMATION

The Company operates in two principal business segments: Olefins and
Vinyls. These segments are strategic business units that offer a variety of
different products. The Company manages each segment separately as each business
requires different technology and marketing strategies.

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
-------------------
2003 2002
-------- --------

SALES TO EXTERNAL CUSTOMERS
Olefins..................................................... $432,088 $258,473
Vinyls...................................................... 266,469 227,151
-------- --------
$698,557 $485,624
======== ========
INTERSEGMENT SALES
Olefins..................................................... $ 18,548 $ 14,872
Vinyls...................................................... 315 257
-------- --------
$ 18,863 $ 15,129
======== ========
INCOME (LOSS) FROM OPERATIONS
Olefins..................................................... $ 24,992 $(12,613)
Vinyls...................................................... 9,632 (7,858)
Corporate and other......................................... (3,710) (2,199)
-------- --------
$ 30,914 $(22,670)
======== ========
CAPITAL EXPENDITURES
Olefins..................................................... $ 11,196 $ 13,753
Vinyls...................................................... 7,675 7,587
Corporate and other......................................... 106 96
-------- --------
$ 18,977 $ 21,436
======== ========
</Table>

<Table>
<Caption>
JUNE 30, DECEMBER 31,
2003 2002
---------- ------------

ASSETS
Olefins..................................................... $ 910,291 $ 903,569
Vinyls...................................................... 375,127 350,684
Corporate and other......................................... 69,852 67,800
---------- ----------
$1,355,270 $1,322,053
========== ==========
</Table>

F-9

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

A reconciliation of total segment income (loss) from operations to
consolidated income (loss) before taxes is as follows:

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
-------------------
2003 2002
-------- --------

Income (loss) from operations for reportable segments....... $ 30,914 $(22,670)
Interest expense............................................ (16,544) (16,221)
Other income, net........................................... 6,310 6,530
-------- --------
Income (loss) before taxes.................................. $ 20,680 $(32,361)
======== ========
</Table>

10. STOCKHOLDERS' EQUITY

In April 2003, the Company's parent contributed the stock of Geismar
Holdings, Inc. and GVGP, Inc. to the Company. These entities are the partners of
Geismar Vinyls Company LP (GVC). GVC's assets, which consist of a vinyls
facility in Geismar, Louisiana, were purchased by the parent company in December
2002 for $5.0 million in cash. In addition, a percentage of earnings during the
first two years of operations, not to exceed $4.0 million, is to be paid by the
Company. The contribution was recognized on the Company's balance sheet as an
increase to additional paid in capital. As of June 30, 2003, the financial
statements of GVC are consolidated in the accompanying financial statements.
Although the Geismar facility was idle as of the date of its acquisition by the
parent company and remains idle, the Company intends to operate the facility
when market conditions support utilization of the additional capacity.

11. SUBSEQUENT EVENTS

On July 31, 2003, the Company completed a refinancing of substantially all
of its outstanding long-term debt. The Company used net proceeds from the
refinancing of approximately $507.4 million to:

- repay in full all outstanding amounts under its existing revolving
credit facility, term loan and 9.5% Series A and Series B notes,
including accrued and unpaid interest, fees and a $4.0 million make-
whole premium to the noteholders; and

- provide $2.4 million in cash collateral for outstanding letter of credit
obligations of $2.2 million.

In conjunction with the refinancing, the Company terminated its accounts
receivable securitization facility by repurchasing all accounts receivable
previously sold to its unconsolidated accounts receivables securitization
subsidiary. No gain or loss was recognized as a result of the accounts
receivable repurchase. The Company also obtained a $12.4 million letter of
credit to secure its obligations under a letter of credit reimbursement
agreement related to outstanding tax-exempt bonds. As a result of the
refinancing, the Company will recognize $11.3 million in non-operating expense
in the third quarter of 2003 consisting of the $4.0 million make-whole premium
and a write-off of $7.3 million in previously capitalized debt issuance
expenses.

The refinancing consisted of:

- $380.0 million in aggregate principal amount of privately placed 8 3/4%
senior notes due 2011;

- $120.0 million senior secured term loan due in 2010; and

- $21.0 million in borrowings under a new $200.0 million senior secured
working capital revolving credit facility due in 2007.

F-10

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

The Company incurred approximately $13.6 million in costs associated with the
refinancing that will be capitalized and amortized over the term of the new
debt.

The 8 3/4% senior notes are unsecured. There is no sinking fund and no
scheduled amortization of the notes prior to maturity. The notes are subject to
redemption, and holders may require the Company to repurchase the notes upon a
change of control. All domestic restricted subsidiaries are guarantors of the
senior notes. See Note 12.

The term loan bears interest at either LIBOR plus 3.75% or prime rate plus
2.75%. Quarterly principal payments of $0.3 million are due on the term loan
beginning on September 30, 2003, with the balance due in four equal quarterly
installments in the seventh year of the loan. Mandatory prepayments are due on
the term loan with the proceeds of asset sales and casualty events subject, in
some instances, to reinvestment provisions. The term loan also requires
prepayment with 50% of excess cash flow as determined under the term loan
agreement. The term loan is secured by the Company's Lake Charles and Calvert
City facilities and some related general intangibles.

The revolving credit facility bears interest at either LIBOR plus 2.25% or
prime rate plus 0.25%, subject to a grid pricing adjustment based on a fixed
charge coverage ratio after the first year and subject to a 0.5% unused line
fee. The revolving credit facility is also subject to a termination fee if
terminated during the first two years. The revolving credit facility is secured
by accounts receivable and contract rights, inventory, chattel paper,
instruments, documents, deposit accounts and related general intangibles. The
revolving credit facility matures in 2007.

The agreements governing the 8 3/4% senior notes, the new term loan and the
revolving credit facility each contain customary representations, conditions and
events of default. Accordingly, these agreements impose significant operating
and financial restrictions on the Company. These restrictions, among other
things, provide limitations on incurrence of additional indebtedness, the
payment of dividends, significant investments and sale of assets. These
limitations are subject to a number of important qualifications and exceptions.
None of the agreements require the Company to maintain specified financial
ratios, except that the Company's new revolving credit facility requires the
Company to maintain a minimum fixed charge coverage ratio when availability
falls below a specified minimum level.

On August 1, 2003, the Company received a capital contribution from its
parent company consisting of 20% of common stock of Westlake Olefins Corporation
(WOC). As a result of this contribution, the Company now owns 100% of WOC. This
contribution eliminated the minority interest balance of $82.4 million as of
August 1, 2003 (the effective date of the contribution). This transaction is
recognized as an increase in additional paid in capital of the Company.

12. GUARANTOR DISCLOSURES

The Company's payment obligations under its 8 3/4% senior notes are fully
and unconditionally guaranteed by each of its current and future domestic
restricted subsidiaries (the "Guarantor Subsidiaries"). These guarantees are the
joint and several obligations of the Guarantor Subsidiaries. The following
unaudited condensed consolidating financial information presents the financial
condition, results of operations and cash flows of Westlake Chemical
Corporation, the Guarantor Subsidiaries and the remaining subsidiaries that do
not guarantee the notes (the "Non-Guarantor Subsidiaries"), together with
consolidating adjustments necessary to present the Company's results on a
consolidated basis. WOC is the Company's 80%-owned subsidiary and is included
with the Guarantor Subsidiaries. The 20% minority interest in WOC was
contributed to Westlake Chemical Corporation by its parent as of August 1, 2003.

F-11

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION AS OF JUNE 30, 2003

<Table>
<Caption>
WESTLAKE
CHEMICAL GUARANTOR NON-GUARANTOR
BALANCE SHEET CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
- ------------- ----------- ------------ ------------- ------------ ------------

Current assets
Cash and cash equivalents... $ 7,094 $ 622 $ 1,871 $ -- $ 9,587
Accounts receivable, net.... 445,056 144,117 8,651 (456,341) 141,483
Inventories, net............ -- 202,827 5,402 -- 208,229
Prepaid expenses and other
current assets........... 224 5,588 88 -- 5,900
Deferred income taxes....... 17,052 -- -- -- 17,052
---------- ---------- ------- ----------- ----------
Total current assets..... 469,426 353,154 16,012 (456,341) 382,251
Property, plant and equipment,
net......................... -- 913,993 5,467 -- 919,460
Equity investment............. 732,923 -- 15,806 (732,923) 15,806
Other assets, net............. 158,981 19,991 7,881 (149,100) 37,753
---------- ---------- ------- ----------- ----------
Total assets............. $1,361,330 $1,287,138 $45,166 $(1,338,364) $1,355,270
========== ========== ======= =========== ==========
Current liabilities
Accounts payable............ $ 8,596 $ 68,233 $ 184 $ -- $ 77,013
Accrued liabilities......... 10,044 60,708 4,526 -- 75,278
Current portion of long-term
debt..................... 1,200 -- -- -- 1,200
---------- ---------- ------- ----------- ----------
Total current
liabilities............ 19,840 128,941 4,710 -- 153,491
Long-term debt................ 483,008 616,459 245 (605,445) 494,267
Deferred income taxes......... 139,997 -- -- -- 139,997
Other liabilities............. 1,905 21,239 -- -- 23,144
Minority interest............. -- 82,622 -- -- 82,622
Stockholders' equity.......... 716,580 437,877 40,211 (732,919) 461,749
---------- ---------- ------- ----------- ----------
Total liabilities and
stockholders' equity... $1,361,330 $1,287,138 $45,166 $(1,338,364) $1,355,270
========== ========== ======= =========== ==========
</Table>

F-12

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION AS OF DECEMBER 31, 2002

Current assets
Cash and cash equivalents... $ 6,900 $ 424 $ 2,750 $ -- $ 10,074
Accounts receivable, net.... 470,267 136,945 6,582 (490,560) 123,234
Inventories, net............ -- 167,310 3,556 -- 170,866
Prepaid expenses and other
current assets........... 412 13,707 127 -- 14,246
Deferred income taxes....... 17,052 -- -- -- 17,052
---------- ---------- ------- ----------- ----------
Total current assets..... 494,631 318,386 13,015 (490,560) 335,472
Property, plant and equipment,
net......................... -- 930,140 5,323 -- 935,463
Equity investment............. 728,047 -- 14,990 (728,047) 14,990
Other assets, net............. 154,067 16,005 8,103 (142,047) 36,128
---------- ---------- ------- ----------- ----------
Total assets............. $1,376,745 $1,264,531 $41,431 $(1,360,654) $1,322,053
========== ========== ======= =========== ==========
Current liabilities
Accounts payable............ $ -- $ 67,894 $ 313 $ -- $ 68,207
Accrued liabilities......... 19,398 43,805 3,251 -- 66,454
Current portion of long-term
debt..................... 14,673 -- -- -- 14,673
---------- ---------- ------- ----------- ----------
Total current
liabilities............ 34,071 111,699 3,564 -- 149,334
Long-term debt................ 480,535 643,506 245 (632,609) 491,677
Deferred income taxes......... 132,782 -- -- -- 132,782
Other liabilities............. 2,049 21,492 -- -- 23,541
Minority interest............. -- 81,294 -- -- 81,294
Stockholders' equity.......... 727,308 406,540 37,622 (728,045) 443,425
---------- ---------- ------- ----------- ----------
Total liabilities and
stockholders' equity... $1,376,745 $1,264,531 $41,431 $(1,360,654) $1,322,053
========== ========== ======= =========== ==========
</Table>

F-13

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED JUNE 30,
2003

<Table>
<Caption>
WESTLAKE
CHEMICAL GUARANTOR NON-GUARANTOR
STATEMENT OF OPERATIONS CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
- ----------------------- ----------- ------------ ------------- ------------ ------------

Net sales........................ $ -- $689,319 $12,563 $ (3,325) $698,557
Cost of sales.................... -- 627,602 10,771 (3,325) 635,048
-------- -------- ------- -------- --------
-- 61,717 1,792 -- 63,509
Selling, general and
administrative expenses........ 3,261 27,369 1,033 -- 31,663
Impairment of long-lived
assets......................... -- 932 -- -- 932
-------- -------- ------- -------- --------
Income (loss) from operations.... (3,261) 33,416 759 -- 30,914
OTHER INCOME (EXPENSE)
Interest expense................. (16,470) (11,447) (5) 11,378 (16,544)
Other income (expense), net...... 11,322 5,717 649 (11,378) 6,310
-------- -------- ------- -------- --------
Income (loss) before income taxes
and minority interest.......... (8,409) 27,686 1,403 -- 20,680
Provision for (benefit from)
income taxes................... (3,122) 10,576 223 -- 7,677
-------- -------- ------- -------- --------
Income (loss) before minority
interest....................... (5,287) 17,110 1,180 -- 13,003
Minority interest in the net
income (loss) of consolidated
subsidiary..................... -- 1,329 -- -- 1,329
-------- -------- ------- -------- --------
Net income (loss)................ $ (5,287) $ 15,781 $ 1,180 $ -- $ 11,674
======== ======== ======= ======== ========
</Table>

F-14

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED JUNE 30,
2002

Net sales........................ $ -- $476,725 $11,062 $(2,163) $485,624
Cost of sales.................... -- 474,869 8,975 (2,163) 481,681
-------- -------- ------- ------- --------
-- 1,856 2,087 -- 3,943
Selling, general and
administrative expenses........ 3,142 22,464 1,007 -- 26,613
-------- -------- ------- ------- --------
Income (loss) from operations.... (3,142) (20,608) 1,080 -- (22,670)
OTHER INCOME (EXPENSE)
Interest expense................. (16,101) (5,711) (47) 5,638 (16,221)
Other income (expense), net...... 5,144 6,178 846 (5,638) 6,530
-------- -------- ------- ------- --------
Income (loss) before income taxes
and minority interest.......... (14,099) (20,141) 1,879 -- (32,361)
Provision for (benefit from)
income taxes................... (5,355) (7,442) 506 -- (12,291)
-------- -------- ------- ------- --------
Income (loss) before minority
interest....................... (8,744) (12,699) 1,373 -- (20,070)
Minority interest in the net
income (loss) of consolidated
subsidiary..................... -- (5,173) -- -- (5,173)
-------- -------- ------- ------- --------
Net income (loss)................ $ (8,744) $ (7,526) $ 1,373 $ -- $(14,897)
======== ======== ======= ======= ========
</Table>

F-15

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED JUNE 30,
2003

<Table>
<Caption>
WESTLAKE
CHEMICAL GUARANTOR NON-GUARANTOR
STATEMENT OF CASH FLOWS CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
- ----------------------- ----------- ------------ ------------- ------------ ------------

Net income (loss)................ $ (5,287) $15,781 $1,180 $ -- $ 11,674
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities
Depreciation and
amortization................ 2,203 41,670 1,131 -- 45,004
Provision for bad debts........ -- 2,930 -- -- 2,930
(Gain) loss from disposition of
fixed assets................ -- (2,761) (63) -- (2,824)
Impairment of long-lived
assets...................... -- 932 -- -- 932
Deferred income taxes.......... (3,122) 10,337 -- -- 7,215
Minority interest in income
(loss)...................... -- 1,329 -- -- 1,329
Net changes in working capital
and other...................... 17,400 (55,840) (2,624) -- (41,064)
-------- ------- ------ ---- ---------
Net cash provided by (used for)
operating activities........ 11,194 14,378 (376) -- 25,196
-------- ------- ------ ---- ---------
Additions to property, plant and
equipment...................... -- (18,474) (503) -- (18,977)
Proceeds from insurance claims... -- 3,257 -- -- 3,257
-------- ------- ------ ---- ---------
Net cash used for investing
activities.................. -- (15,217) (503) -- (15,720)
-------- ------- ------ ---- ---------
Equity contribution from
parent......................... -- 1,037 -- -- 1,037
Proceeds from borrowings......... 125,500 -- -- -- 125,500
Repayments of borrowings......... (136,500) -- -- -- (136,500)
-------- ------- ------ ---- ---------
Net cash provided by (used for)
financing activities........ (11,000) 1,037 -- -- (9,963)
-------- ------- ------ ---- ---------
Net increase (decrease) in cash
and cash equivalents........... 194 198 (879) -- (487)
Cash and cash equivalents at
beginning of period............ 6,900 424 2,750 -- 10,074
-------- ------- ------ ---- ---------
Cash and cash equivalents at end
of period...................... $ 7,094 $ 622 $1,871 $ -- $ 9,587
======== ======= ====== ==== =========
</Table>

F-16

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED JUNE 30,
2002

Net income (loss)................ $ (8,744) $ (7,526) $ 1,373 $ -- $(14,897)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities
Depreciation and
amortization................ 917 42,670 98 -- 43,685
Provision for bad debts........ -- 5,722 -- -- 5,722
(Gain) loss from disposition of
fixed assets................ -- 46 -- -- 46
Impairment of long-lived
assets...................... -- -- -- -- --
Deferred income taxes.......... (5,355) (7,332) -- -- (12,687)
Minority interest in income
(loss)...................... -- (5,173) -- -- (5,173)
Net changes in working capital
and other...................... (49,850) (8,302) (2,428) -- (60,580)
-------- -------- ------- ----- --------
Net cash provided by (used
for) operating
activities................ (63,032) 20,105 (957) -- (43,884)
-------- -------- ------- ----- --------
Additions to property, plant and
equipment...................... -- (20,757) (679) -- (21,436)
Proceeds from insurance claims... -- 1,680 -- -- 1,680
-------- -------- ------- ----- --------
Net cash used for investing
activities................ -- (19,077) (679) -- (19,756)
-------- -------- ------- ----- --------
Proceeds from borrowings......... 14,390 -- -- -- 14,390
Repayments of borrowings......... (19,433) -- -- -- (19,433)
-------- -------- ------- ----- --------
Net cash used for financing
activities................ (5,043) -- -- -- (5,043)
-------- -------- ------- ----- --------
Net increase (decrease) in cash
and cash equivalents........... (68,075) 1,028 (1,636) -- (68,683)
Cash and cash equivalents at
beginning of period............ 75,820 202 2,969 -- 78,991
-------- -------- ------- ----- --------
Cash and cash equivalents at end
of period...................... $ 7,745 $ 1,230 $ 1,333 $ -- $ 10,308
======== ======== ======= ===== ========
</Table>

F-17

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of
Westlake Chemical Corporation

In our opinion, the consolidated financial statements listed in the index
appearing on page F-1 present fairly, in all material respects, the financial
position of Westlake Chemical Corporation and its subsidiaries (the "Company")
at December 31, 2002 and 2001, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2002, in
conformity with accounting principles generally accepted in the United States of
America. In addition, in our opinion, the financial statement schedule listed in
the index appearing on page F-1 presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements. These financial statements and financial
statement schedule are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

Houston, Texas
March 24, 2003, except for
Notes 17 and 18, which are as of June 23, 2003, and
Note 19, which is as of September 19, 2003

F-18

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
DECEMBER 31,
-------------------------
2002 2001
----------- -----------
(IN THOUSANDS OF DOLLARS,
EXCEPT SHARE AMOUNTS)

ASSETS
Current assets
Cash and cash equivalents................................. $ 10,074 $ 78,991
Accounts receivable, net.................................. 123,234 81,419
Inventories, net.......................................... 170,866 128,227
Prepaid expenses and other current assets................. 14,246 2,413
Deferred income taxes..................................... 17,052 12,296
---------- ----------
Total current assets................................. 335,472 303,346
Property, plant and equipment, net.......................... 935,463 978,525
Equity investment........................................... 14,990 14,883
Other assets, net........................................... 36,128 32,398
---------- ----------
Total assets......................................... $1,322,053 $1,329,152
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable.......................................... $ 68,207 $ 53,731
Accrued liabilities....................................... 66,454 67,483
Current portion of long-term debt......................... 14,673 13,043
---------- ----------
Total current liabilities............................ 149,334 134,257
Long-term debt.............................................. 491,677 498,596
Deferred income taxes....................................... 132,782 135,965
Other liabilities........................................... 23,541 25,040
---------- ----------
Total liabilities.................................... 797,334 793,858
---------- ----------
Minority interest........................................... 81,294 89,359
---------- ----------
Stockholders' equity
Preferred stock, nonvoting, noncumulative, no par value,
1,000 shares authorized; 890 shares issued and
outstanding............................................ 89,000 89,000
Common stock, $1 par value, 10,000 shares authorized;
1,115 shares issued and outstanding.................... 1 1
Additional paid-in capital................................ 304,364 304,364
Retained earnings......................................... 53,636 54,975
Minimum pension liability................................. (2,006) (671)
Cumulative foreign currency translation................... (1,570) (1,734)
---------- ----------
Total stockholders' equity........................... 443,425 445,935
---------- ----------
Total liabilities and stockholders' equity........... $1,322,053 $1,329,152
========== ==========
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
F-19

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------------
2002 2001 2000
---------- ---------- ----------
(IN THOUSANDS OF DOLLARS)

Net sales................................................ $1,072,627 $1,087,033 $1,391,363
Cost of sales............................................ 1,002,092 1,121,759 1,198,700
---------- ---------- ----------
70,535 (34,726) 192,663
Selling, general and administrative expenses............. 58,783 53,203 61,855
Impairment of long-lived assets.......................... 2,239 7,677 10,777
---------- ---------- ----------
Income (loss) from operations............................ 9,513 (95,606) 120,031
OTHER INCOME (EXPENSE)
Interest expense......................................... (32,907) (31,892) (31,957)
Other income, net........................................ 6,784 8,895 1,685
---------- ---------- ----------
Income (loss) before income taxes........................ (16,610) (118,603) 89,759
---------- ---------- ----------
PROVISION FOR (BENEFIT FROM) INCOME TAXES
Current.................................................. 733 426 3,316
Deferred................................................. (7,939) (45,681) 27,391
---------- ---------- ----------
(7,206) (45,255) 30,707
---------- ---------- ----------
Income (loss) before minority interest................... (9,404) (73,348) 59,052
Minority interest in the net income (loss) of
consolidated subsidiary................................ (8,065) (8,473) 5,357
---------- ---------- ----------
Net income (loss)........................................ (1,339) (64,875) 53,695
OTHER COMPREHENSIVE INCOME (LOSS)
Change in foreign currency translation................... 164 (794) (630)
Change in minimum pension liability...................... (1,335) (671) --
---------- ---------- ----------
Comprehensive income (loss).............................. $ (2,510) $ (66,340) $ 53,065
========== ========== ==========
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
F-20

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<Table>
<Caption>
ACCUMULATED OTHER
COMPREHENSIVE LOSS
-----------------------
COMMON STOCK CUMULATIVE
------------------ ADDITIONAL MINIMUM FOREIGN
PREFERRED NUMBER OF PAID-IN RETAINED PENSION CURRENCY
STOCK SHARES AMOUNT CAPITAL EARNINGS LIABILITY TRANSLATION TOTAL
--------- --------- ------ ---------- -------- --------- ----------- --------
(IN THOUSANDS OF DOLLARS, EXCEPT SHARES)

BALANCES AT DECEMBER 31,
1999........................ $89,000 1,115 $ 1 $261,177 $ 83,155 $ -- $ (310) $433,023
Net income.................... -- -- -- -- 53,695 -- -- 53,695
Dividends paid to Parent...... -- -- -- -- (17,000) -- -- (17,000)
Contribution of Westlake
Styrene Corporation
shares...................... -- -- -- 43,187 -- -- -- 43,187
Other comprehensive income
Change in cumulative foreign
currency translation...... -- -- -- -- -- -- (630) (630)
------- ----- --- -------- -------- ------- ------- --------
BALANCES AT DECEMBER 31,
2000........................ 89,000 1,115 1 304,364 119,850 -- (940) 512,275
Net loss...................... -- -- -- -- (64,875) -- -- (64,875)
Dividends paid to Parent...... -- -- -- (87,000) -- -- -- (87,000)
Capital contribution from
Parent...................... -- -- -- 87,000 -- -- -- 87,000
Other comprehensive income
Minimum pension liability... -- -- -- -- -- (671) -- (671)
Change in cumulative foreign
currency translation...... -- -- -- -- -- -- (794) (794)
------- ----- --- -------- -------- ------- ------- --------
BALANCES AT DECEMBER 31,
2001........................ 89,000 1,115 1 304,364 54,975 (671) (1,734) 445,935
Net loss...................... -- -- -- -- (1,339) -- -- (1,339)
Other comprehensive income
Minimum pension liability... -- -- -- -- -- (1,335) -- (1,335)
Change in cumulative foreign
currency translation...... -- -- -- -- -- -- 164 164
------- ----- --- -------- -------- ------- ------- --------
BALANCES AT DECEMBER 31,
2002........................ $89,000 1,115 $ 1 $304,364 $ 53,636 $(2,006) $(1,570) $443,425
======= ===== === ======== ======== ======= ======= ========
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
F-21

WESTLAKE CHEMICAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
---------------------------------
2002 2001 2000
--------- --------- ---------
(IN THOUSANDS OF DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)......................................... $ (1,339) $ (64,875) $ 53,695
--------- --------- ---------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization........................... 86,467 81,853 79,164
Provision for bad debts................................. 10,379 3,817 1,300
Amortization of debt issue costs........................ 3,135 1,454 1,999
Gain from disposition of fixed assets................... (2,259) -- --
Impairment of long-lived assets......................... 2,239 7,677 10,777
Deferred income taxes................................... (7,939) (45,681) 27,391
Minority interest in income (loss)...................... (8,065) (8,473) 5,357
Changes in operating assets and liabilities
Accounts receivable.................................. (52,194) 29,651 (12,342)
Inventories.......................................... (42,639) 77,007 (21,610)
Prepaid expenses and other current assets............ (11,833) 490 --
Accounts payable..................................... 14,476 (29,916) 5,115
Accrued liabilities.................................. (1,029) (15,011) 25,164
Other, net........................................... (19,075) (9,508) (3,678)
--------- --------- ---------
Total adjustments.................................. (28,337) 93,360 118,637
--------- --------- ---------
Net cash provided by (used for) operating
activities...................................... (29,676) 28,485 172,332
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment................ (38,587) (76,500) (78,893)
Proceeds from insurance claims............................ 4,901 -- --
Acquisition of business operations........................ -- -- (8,800)
--------- --------- ---------
Net cash used for investing activities............. (33,686) (76,500) (87,693)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings.................................. 113,890 226,000 52,000
Repayments of borrowings.................................. (119,445) (107,250) (120,000)
Capital contribution from parent.......................... -- 87,000 --
Dividends paid to parent.................................. -- (87,000) (17,000)
--------- --------- ---------
Net cash provided by (used for) financing
activities...................................... (5,555) 118,750 (85,000)
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents...... (68,917) 70,735 (361)
Cash and cash equivalents at beginning of year............ 78,991 8,256 8,617
--------- --------- ---------
Cash and cash equivalents at end of year.................. $ 10,074 $ 78,991 $ 8,256
========= ========= =========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid............................................. $ 31,344 $ 38,529 $ 30,339
Income taxes paid......................................... 95 2,723 17,766
NONCASH TRANSACTIONS
Interest added to the principal........................... 266 -- --
Contribution of Westlake Styrene Corporation shares....... -- -- 43,187
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
F-22

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)

1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Westlake Chemical Corporation ("WCC") was incorporated in 1991 in the state
of Delaware to own certain chemical operations and to facilitate financing
transactions for the related companies. WCC is a wholly owned subsidiary of
Westlake Polymer and Petrochemical, Inc. ("WPPI"), which in turn is a wholly
owned subsidiary of Gulf Polymer and Petrochemical, Inc. ("GPPI"). WCC and its
subsidiaries are collectively referred to as the "Company."

The Company operates as an integrated petrochemical manufacturer and
plastics fabricator. The Company's customers range from large chemical
processors and plastic fabricators to small construction contractors,
municipalities and supply warehouses primarily throughout North America. The
petrochemical industry is subject to price fluctuations and volatile feedstock
pricing typical of a commodity-based industry, which may not be rapidly passed
to all customers.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and subsidiaries in which the Company directly or indirectly owns more than a
50% voting interest. Investments in entities in which the Company has a
significant ownership interest, generally 20% to 50%, and in entities in which
the Company has greater than 50% ownership, but due to contractual agreement or
otherwise does not exercise control, are accounted for using the equity method.
Intercompany balances and transactions are eliminated. Minority interest
represents 20% ownership by an affiliate of one of the Company's subsidiaries.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of highly liquid investments that are readily
convertible into cash and have a maturity of three months or less at the date of
acquisition.

INVENTORIES

Inventories primarily include product, material and supplies. Inventories
are stated at lower of cost or market. Cost is determined using the first-in,
first-out ("FIFO") method.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is carried at cost, net of accumulated
depreciation. Cost includes expenditures for improvements and betterments which
extend the useful lives of the assets and interest capitalized on significant
capital projects. Capitalized interest was $398 and $1,607 in 2002 and 2001,
respectively. No interest was capitalized in 2000. Repair and maintenance costs
are charged to operations as incurred. Depreciation is provided by utilizing the
straight-line method over the estimated useful lives of the assets as follows:

<Table>
<Caption>
CLASSIFICATION YEARS
- -------------- -----

Buildings and improvements.................................. 25
Plant and equipment......................................... 25
Other....................................................... 3-7
</Table>

IMPAIRMENT OF LONG-LIVED ASSETS

The Company reviews long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net undiscounted cash

F-23

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

flows expected to be generated by the asset. Assets are considered to be
impaired if the carrying amount of an asset exceeds the future undiscounted cash
flows. The impairment recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or estimated fair value less
costs to sell. Effective January 1, 2002, the Company adopted Statement of
Financial Accounting Standards ("SFAS") 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which superseded SFAS 121. Adoption of SFAS 144
did not have material effect on the consolidated results of operations, cash
flows or financial position of the Company.

IMPAIRMENT OF INTANGIBLE ASSETS

Effective January 1, 2002, the Company adopted SFAS 142, Goodwill and Other
Intangible Assets. In accordance with this statement, goodwill and
indefinite-lived intangible assets are no longer amortized, but are tested for
impairment at least annually. Other intangible assets with finite lives are
amortized, over their estimated useful life and reviewed for impairment in
accordance with the provisions of SFAS 144. The Company has no reported goodwill
at December 31, 2002 and 2001. Adoption of SFAS 142 did not have material effect
on consolidated results of operations, cash flows or financial position of the
Company.

TURNAROUND COSTS

Turnaround costs are deferred at the time of the turnaround and amortized
(within depreciation and amortization) on a straight-line basis until the next
planned turnaround. Deferred turnaround costs are presented as a component of
other assets.

EXCHANGES

The Company enters into inventory exchange transactions with third parties,
which involve fungible commodities. These exchanges are settled in like-kind
quantities and are valued at lower of cost or market. Cost is determined using
the FIFO method. As of December 31, 2002 and 2001, the net exchange balance
payable of $2,197 and $14,547, respectively, are included in accrued
liabilities.

INCOME TAXES

The Company utilizes the liability method of accounting for income taxes.
Under the liability method, deferred tax assets or liabilities are recorded
based upon temporary differences between the tax basis of assets and liabilities
and their carrying values for financial reporting purposes. Deferred tax expense
or benefit is the result of changes in the deferred tax assets and liabilities
during the period. Valuation allowances are recorded against deferred tax assets
when it is considered more likely than not that the deferred tax assets will not
be realized.

The Company, except for a foreign subsidiary, is included in the
consolidated tax return of GPPI. The provision for income taxes has been
computed on a separate company basis.

FOREIGN CURRENCY TRANSLATION

Assets and liabilities of foreign subsidiaries are translated to U.S.
dollars at the exchange rate as of the end of the year. Statement of operations
items are translated at the average exchange rate for the year. The resulting
translation adjustment is recorded as a separate component of stockholders'
equity.

F-24

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to
concentration of risk consist principally of trade receivables from customers
engaged in manufacturing polyethylene products, polyvinyl chloride products and
utilizing polyvinyl chloride pipe. The Company performs periodic credit
evaluations of the customers' financial condition and generally does not require
collateral. The Company maintains reserves for potential losses.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts reported in the balance sheet for cash and cash
equivalents, receivables, and accounts payable approximate their fair value due
to the short maturities of these instruments. The fair value of the Company's
debt as of December 31, 2002 and 2001 approximates its carrying value because
the interest rates on the borrowings as of December 31, 2002 and 2001
approximate the market rates for similar borrowing capacities available at the
market and due to recent changes in the terms of the Company borrowings in 2002.
The net fair value of derivative instruments as of December 31, 2002 and 2001
was $141 and $0, respectively. The fair value of derivative financial
instruments is estimated using current market quotes.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses, and the disclosure of contingent
assets and liabilities. Actual results could differ from those estimates.

REVENUE RECOGNITION

Revenues associated with sales of chemical products are recorded when title
passes to the customer upon delivery under executed customer purchase orders or
contracts. Title generally passes to customers when goods are shipped to the
customers. For export contracts, the title passes to customers at the time
specified by each contract. Provisions for discounts, rebates and returns are
provided for in the same period as the related sales are recorded.

PRICE RISK MANAGEMENT

Commencing January 1, 2001, the Company adopted SFAS 133, Accounting for
Derivative Instruments and Hedging Activities, as amended by SFAS 138. SFAS 133
requires that the Company recognizes all derivative instruments on the balance
sheet at fair value, and changes in the derivative's fair value must be
currently recognized in earnings or comprehensive income, depending on the
designation of the derivative. If the derivative is designated as a fair value
hedge, the changes in the fair value of the derivative and of the hedged item
attributable to the hedged risk are recognized in earnings. If the derivative is
designated as a cash flow hedge, the effective portion of the change in the fair
value of the derivative is recorded in comprehensive income and is recognized in
the income statement when the hedged item affects earnings. Ineffective portions
of changes in the fair value of cash flow hedges are recognized in earnings
currently.

The Company does not enter into derivative instruments for trading
purposes; however, the Company utilizes commodity price swaps to reduce price
risks by entering into price swaps with counterparties and by purchasing or
selling futures on established exchanges. The Company takes both fixed and
variable positions, depending upon anticipated future physical purchases and
sales of these commodities. Open

F-25

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

positions are accounted for as hedges with gains or losses deferred until
corresponding physical transactions occur or until corresponding positions
expire or close. The fair value of the natural gas futures and propane swap
contracts was obtained from a third party.

<Table>
<Caption>
DECEMBER 31,
-----------------------------------
2002 2001
---------------- ----------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
-------- ----- -------- -----

Natural gas futures contracts....................... $(326) $(326) $-- $--
Propane swap contracts.............................. 185 185 -- --
</Table>

During 2002, due to the short-term nature of the commitments and associated
derivative instruments, the Company did not designate any of its derivative
instruments as hedges under the provisions of SFAS 133. As such, gains and
losses from changes in the fair value of all the derivative instruments used in
2002 were included in earnings.

ENVIRONMENTAL COSTS

Environmental costs relating to current operations are expensed or
capitalized, as appropriate, depending on whether such costs provide future
economic benefits. Remediation liabilities are recognized when the costs are
considered probable and can be reasonably estimated. Measurement of liabilities
is based on currently enacted laws and regulations, existing technology and
undiscounted site-specific costs. Environmental liabilities in connection with
properties that are sold or closed are realized upon such sale or closure, to
the extent they are probable and estimable and not previously reserved. In
assessing environmental liabilities, no set-off is made for potential insurance
recoveries. Recognition of any joint and several liabilities is based upon the
Company's best estimate of its final pro rata share of the liability.

TRANSFERS OF FINANCIAL ASSETS

The Company accounts for the transfers of financial assets, including
transfers to a qualified special purpose entity ("QSPE"), in accordance with
SFAS 140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities, a replacement of FASB Statement No. 125. In
accordance with SFAS 140, the Company recognizes transfers of financial assets
as sales provided that control has been relinquished. Control is deemed to be
relinquished only when all of the following conditions have been met: (i) the
assets have been isolated from the transferor, even in bankruptcy or other
receivership (true sale opinions are required); (ii) the transferee has the
right to pledge or exchange the assets received and (iii) the transferor has not
maintained effective control over the transferred assets (e.g., a unilateral
ability to repurchase a unique or specific asset).

The Company is also required to follow the accounting guidance under SFAS
140 and Emerging Issues Task Force ("EITF") Topic No. D-14, Transactions
Involving Special-Purpose Entities, to determine whether or not a special
purpose entity ("SPE") is required to be consolidated.

The Company's transfer of financial assets relate to securitization
transactions with a special purpose entity meeting the SFAS 140 definition of a
QSPE. A QSPE can generally be described as an entity with significantly limited
powers which are intended to limit it to passively holding financial assets and
distributing cash flows based upon pre-set terms. Based upon the guidance in
SFAS 140, the Company is not required to and does not consolidate such QSPE.
Rather, the Company accounts for its involvement with QSPEs under a financial
components approach in which the Company recognizes only its retained interest
in assets transferred to the QSPE. The Company accounts for such retained
interests at fair value with changes in fair value reported in earnings.

F-26

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

In January 2003, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 46, Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51 ("FIN 46"). FIN 46 provides new consolidation
accounting guidance for entities involved with special purpose entities and will
replace guidance provided by EITF Topic No. D-14. This guidance does not impact
the accounting for securitizations transacted through QSPEs. FIN 46 will require
a primary beneficiary, defined as an entity, which participates in either a
majority of the risks or rewards of such special purpose entity, to consolidate
the SPE. An SPE would not be subject to this interpretation if such entity has
sufficient voting equity capital (presumed to require a minimum of 10 percent),
such that the entity is able to finance its activities without additional
subordinated financial support from other parties. While the Company has not yet
completed its analysis of the impact of the new interpretation, the Company does
not anticipate that the adoption of this interpretation will have a material
impact to the Company's consolidated results of operations, cash flows or
financial position.

OTHER

Amortization of debt issue costs is computed on a basis which approximates
the interest method over the term of the related debt. Certain other assets
(Note 6) are amortized over periods ranging from 3 to 15 years using the
straight-line method.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to current
year presentation.

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2002, the FASB issued SFAS 143, Accounting for Obligations
Associated with the Retirement of Long-Lived Assets. This statement requires the
following: (a) an existing legal obligation association with the retirement of a
tangible long-lived asset must be recognized as a liability when incurred and
the amount of the liability be initially measured at fair value, (b) an entity
must recognize subsequent changes in the liability that result from the passage
of time and revisions in either the timing or amount of estimated cash flows and
(c) upon initially recognizing a liability for an asset retirement obligation,
an entity must capitalize the cost by recognizing an increase in the carrying
amount of the related long-lived asset. SFAS 143 will be effective for financial
statements issued for fiscal years beginning after June 15, 2002. As of December
31, 2002, the Company does not have legal or contractual obligations to close
any of its facilities. The Company's adoption of SFAS 143 on January 1, 2003 did
not have a material impact on consolidated results of operations, cash flows or
financial position of the Company.

In October 2002, the FASB issued SFAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. This statement supersedes SFAS 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of. SFAS 144 provides that long-lived assets that are to be disposed of by sale
be measured at the lower of book value or fair value less cost to sell. The
provisions of SFAS 144 are effective for fiscal years beginning after December
15, 2001. The Company's adoption of SFAS 144 on January 1, 2002 did not have a
material impact on consolidated results of operations, cash flows or financial
position of the Company.

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

APB No. 30 states that extraordinary items are events and transactions that are
distinguished by their unusual nature and by the infrequency of their
occurrence. SFAS 145 is effective for fiscal years beginning after May 15, 2002.
The Company's adoption of SFAS 145 on January 1, 2003 did not have a material
impact on consolidated results of operations, cash flow or financial position of
the Company.

In June 2002, the FASB issued SFAS 146, Accounting for Costs Associated
with Exit or Disposal Activities. SFAS 146 addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies
EITF Issue No. 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring). SFAS 146 requires that a liability for a cost associated
with an exit or disposal activity be recognized when the liability is incurred.
Under EITF Issue 94-3, a liability for an exit cost as defined in EITF Issue
94-3 was recognized at the date of an entity's commitment to an exit plan. The
provisions of SFAS 146 are effective for exit or disposal activities initiated
after December 31, 2002, with early application encouraged. Previously issued
financial statements shall not be restated upon adoption of SFAS 146. Management
believes that this statement will not have a material impact on the Company's
consolidated results of operations, cash flow or financial position.

In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, an interpretation of FASB
Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34. FIN
45 clarifies the requirements of SFAS 5, Accounting for Contingencies, relating
to the guarantor's accounting for, and disclosure of, the issuance of certain
types of guarantees. FIN 45 requires that upon issuance of a guarantee, the
entity (i.e., the guarantor) must recognize a liability for the fair value of
the obligation it assumes under that guarantee, including the cases in which the
entity does not receive separately identifiable consideration (i.e., a premium)
for issuing the guarantee. FIN 45 is intended to improve the comparability of
financial reporting by requiring identical accounting for guarantees issued with
a separately identified premium and guarantees issued without a separately
identified premium. The disclosure provisions of FIN 45 are effective for
financial statements of interim or annual periods that end after December 15,
2002. However, the provisions for initial recognition and measurement are
effective on a prospective basis for guarantees that are issued or modified
after December 31, 2002, irrespective of a guarantor's year end. In accordance
with the provisions of FIN 45, the Company will recognize the fair value of the
guarantees issued as modified after December 31, 2002.

2. ACCOUNTS RECEIVABLE

Accounts receivable consist of the following at December 31, 2002 and 2001:

<Table>
<Caption>
2002 2001
-------- -------

Accounts receivable -- trade................................ $ 51,924 $39,428
Accounts receivable -- affiliates........................... 80,623 37,324
Allowance for doubtful accounts............................. (13,382) (4,913)
-------- -------
119,165 71,839
Taxes receivable............................................ 1,235 3,295
Accounts receivable -- other................................ 2,834 6,285
-------- -------
$123,234 $81,419
======== =======
</Table>

F-28

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

3. WESTLAKE AR CORPORATION

In August 1997, the Company established Westlake AR Corporation ("WARC"),
an unconsolidated subsidiary and QSPE. WARC's activities are legally limited to
purchasing WCC's accounts receivable, selling undivided ownership interests in
the accounts receivable and collecting and distributing proceeds related to the
receivables.

In October 1997, the Company entered into a Receivable Transfer Agreement
to sell accounts receivable to WARC, which, under a separate agreement, agreed
to sell up to $49,500 of revolving undivided ownership interests in those
accounts receivable to an unrelated financial institution (the "receivable
securitization"). As a result of certain WCC's subsidiaries merging into
Delaware limited liability partnerships, an amended and restated Receivable
Transfer Agreement was executed on February 12, 2001. As of December 31, 2002
and 2001, the undivided ownership interest in the receivables was $15,100 and
$38,000, respectively. As a result of the reduction of the undivided ownership
interest in its receivable, in 2001, WCC contributed $11,900 of cash to WARC. At
December 31, 2002 and 2001, accounts receivables amounting to $91,059 and
$67,406, respectively, had been sold under this agreement. These sales were
reflected as reduction of trade accounts receivable. The Company retains
beneficial interest to those receivables. The fair value of the beneficial
interests approximates the carrying value of the receivables. The amount of
receivables sold fluctuates based upon the availability of the receivable and is
directly affected by changing business volume and credit risks. The Company
guarantees certain amounts due by WARC under its agreement with the financial
institution. The carrying amount of the Company's exposure related to guarantees
for WARC loan were $15,100 and $38,000 as of December 31, 2002 and 2001,
respectively.

WCC sells receivables to WARC at a discount of approximately 2% and
receives certain servicing fees from WARC. During the years ended December 31,
2002, 2001 and 2000, WCC recognized discount expense of $5,632, $7,480 and
$12,788, respectively, and servicing fees of $6,724, $6,251 and $8,659,
respectively, within other income, net in the statement of operations.

In addition to purchasing receivables from WCC and utilizing WCC to service
and collect its receivables, as well as fund the expenditures, WARC has an
agreement with WCC whereby WARC's cash balance in excess of $250 is swept
nightly into an account controlled by WCC. At December 31, 2002, the receivable
from WARC, net of payable to WARC, was $25,456. At December 31, 2001, the
payable to WARC, net of receivable from WARC, was $29,259. These amounts were
included in receivables from affiliates on the balance sheet.

4. INVENTORIES

Inventories consist of the following at December 31, 2002 and 2001:

<Table>
<Caption>
2002 2001
-------- --------

Finished product............................................ $103,646 $ 76,281
Feedstock, additives and chemicals.......................... 49,534 34,427
Materials and supplies...................................... 26,428 26,841
-------- --------
179,608 137,549
Allowance for inventory obsolescence........................ (8,742) (9,322)
-------- --------
Net inventory............................................... $170,866 $128,227
======== ========
</Table>

In December 2002, the Company entered into an agreement to sell 15 million
pounds of finished product inventory during 2003 at a fixed price. In accordance
with the agreement, the Company will be

F-29

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

required to repurchase this inventory during 2003 at market prices at the time
of repurchase after certain agreed upon adjustments. Due to the terms of the
agreement, cash received from the sale of the inventory will be recorded as a
liability, which will be adjusted to market value of the inventory to reflect
repurchase obligations. As of December 31, 2002, the Company had $4,279
inventory separately identified and restricted for use in accordance with this
agreement.

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following at December 31,
2002 and 2001:

<Table>
<Caption>
2002 2001
---------- ----------

Land........................................................ $ 11,050 $ 10,918
Buildings and improvements.................................. 71,568 71,443
Plant and equipment......................................... 1,337,675 1,262,898
Other....................................................... 76,223 71,270
---------- ----------
1,496,516 1,416,529
Less: Accumulated depreciation.............................. (579,978) (514,229)
---------- ----------
916,538 902,300
Construction in progress.................................... 18,925 76,225
---------- ----------
$ 935,463 $ 978,525
========== ==========
</Table>

Depreciation expense on plant and equipment of $78,249 and $77,186 is
included in cost of sales in the consolidated statement of operations in 2002
and 2001, respectively.

During the fourth quarter of 2002, the Company announced plans to address
the changing market conditions impacting the polyethylene pipe business and
recognized an asset impairment charge of $1,783 to reflect the property and
equipment associated with this business at its estimated fair value. The
carrying amount of such assets was reduced to $497 as of December 31, 2002.

On December 31, 2002 and 2001, the Company recognized a write-down of plant
and equipment amounting to $2,239 and $7,677, respectively. Additionally, the
Company recognized a write-down of plant and equipment of $10,777 the year ended
December 31, 2000. The write-downs have been reflected in the consolidated
statement of operations. The write-downs represent the amount necessary to
adjust the carrying value of certain plant and equipment to its net realizable
value.

Property, plant and equipment includes nonoperating assets of $4,061 and
$4,080 at December 31, 2002 and 2001, respectively.

F-30

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

6. OTHER ASSETS

Other assets consist of the following at December 31, 2002 and 2001:

<Table>
<Caption>
2002 2001
-------- --------

Technology licenses......................................... $ 10,541 $ 10,541
Debt issuance costs......................................... 21,141 9,817
Note receivable from affiliate.............................. 9,253 9,253
Turnaround cost............................................. 16,229 13,048
Other....................................................... 10,493 11,015
-------- --------
67,657 53,674
Less: Accumulated amortization.............................. (31,529) (21,276)
-------- --------
$ 36,128 $ 32,398
======== ========
</Table>

Amortization expense on other assets of $11,353, $6,121 and $8,926 is
included in the consolidated statement of operations in 2002, 2001 and 2000,
respectively.

7. LONG-TERM DEBT

Indebtedness consists of the following at December 31, 2002 and 2001:

<Table>
<Caption>
2002 2001
-------- --------

Revolving lines of credit -- maximum aggregate availability
of $291,610 and $300,000 in 2002 and 2001................. $172,500 $165,000
Term loan................................................... 113,957 120,000
Series A notes, interest at 9.50% and 8.51% in 2002 and
2001...................................................... 58,750 63,750
Series B notes, interest at 9.50% and 7.51% in 2002 and
2001...................................................... 150,000 150,000
Loan related to tax-exempt revenue bonds.................... 10,889 10,889
Other....................................................... 254 2,000
-------- --------
506,350 511,639
Less: Current portion of long-term debt..................... (14,673) (13,043)
-------- --------
$491,677 $498,596
======== ========
</Table>

The Company entered into a $300,000 revolving credit facility in 1996 with
a syndicate of banks. As discussed below, the agreement was amended in June
2002. Prior to the amendment, at the Company's option, interest with respect to
this revolving credit agreement accrued at a rate equal to the adjusted
Eurodollar rate, or the higher of the adjusted federal funds rate or adjusted
prime rate, as defined, and was payable at the end of each interest period or
quarterly. The weighted-average interest rate as of December 31, 2002 and 2001,
was 5.44% and 4.44%, respectively.

In March 1998, the Company entered into a $150,000 term loan with a group
of banks. As discussed below, the agreement was amended in June 2002. Prior to
the amendment, at the Company's option, interest on the debt accrued at the
adjusted Eurodollar rate or at a rate equal to the higher of the adjusted
federal funds rate or prime rate, as defined, and was payable at the end of each
interest period or quarterly. The outstanding term loan as of December 31, 2002
and 2001 was $113,957 and $120,000, respectively. The weighted-average interest
rate as of December 31, 2002 and 2001 was 5.62% and 4.73%, respectively.

F-31

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

In December 1997, the Company entered into a loan agreement with a public
trust established for public purposes for the benefit of Parish of Calcasieu,
Louisiana. The public trust issued $10,889 in tax-exempt waste disposal revenue
bonds (revenue bonds) in order to finance the Company's construction of waste
disposal facilities for its new ethylene plant. The revenue bonds expire in
December 2027 and are subject to redemption and mandatory tender for purchase
prior to maturity under certain conditions. Interest on the revenue bonds
accrues at a rate determined by a remarketing agent and is payable quarterly.
The interest rate on the revenue bonds at December 31, 2002 and 2001 was 1.7%
and 1.6%, respectively. In conjunction with the loan agreement, the Company
entered into a letter of credit reimbursement agreement and obtained a letter of
credit from a bank in the amount of $11,268. The letter of credit will expire in
March 2005.

In 1994, the Company issued $85,000 of senior notes. In accordance with the
original terms the senior notes were due in four equal annual installments
beginning February 14, 2001, to a group of private investors. Interest accrued
at the fixed rate of 8.51%. Interest is payable semi-annually.

The Company issued $150,000 of senior notes to a group of private investors
in 1995. Interest accrued at the fixed rate of 7.51%. Interest is payable
semi-annually. In accordance with the original terms, principal was due in six
equal semiannual payments beginning November 30, 2004.

Both issuances of WCC senior notes, the revolving credit facility and the
term loan are guaranteed by each of the Company's consolidated restricted
subsidiaries, as defined (Note 8). The senior notes require the Company to pay
the investors the difference between the stated rate and reinvestment rate, as
defined, if the notes are prepaid. The indebtedness also contains certain
restrictive covenants which, among other things, provide limitations on the
incurrence of additional indebtedness, the payment of dividends and the sale of
assets, and require the Company to maintain certain financial ratios and minimum
net worth.

Since June 29, 2001, the Company obtained a series of waivers for
noncompliance with certain of the covenants related to its $300,000 revolving
credit facility, $150,000 term loan, $11,268 letter of credit reimbursement
agreement, 7.51% senior note agreement and the 8.51% senior note agreement. As
part of the waiver agreement, the Company agreed with the lenders to pay
interest monthly, and postponed the $10,000 principal repayment on the term loan
originally due September 30, 2001, the $10,000 term loan principal repayment
originally due December 31, 2001, the $20,000 term loan principal repayment
originally due March 31, 2002, and the $21,250 8.51% note principal repayment
originally due February 14, 2002. On June 26, 2002, the Company and the lenders
under these agreements formalized new amended and restated agreements. The new
amendments result in the Company providing security in most of its assets to its
lenders, with a relaxation of financial covenants and an increase in interest
rates and limitations on capital spending. As part of and through the date of
the new amendments, the Company obtained waivers of all known covenant
noncompliance with the previous agreements.

The amended revolver is divided into three tranches: a $7,274 Tranche A1
priced at prime plus 2.25%, a $126,114 Tranche A2 priced at LIBOR plus 3.25% or
prime plus 2.25%, and a $158,223 Tranche B priced at LIBOR plus 3.25% plus 0.5%
utilization fee or prime plus 2.25% plus 0.5% utilization fee. Amounts drawn are
attributed first to Tranche B to the extent of its availability, then to Tranche
A2 and then to Tranche A1. The amended term loan of $113,957 is priced at LIBOR
plus 3.75% or prime plus 2.75%. Both the 7.51% and 8.51% notes are repriced to
9.50% with interest payable quarterly. All of the loan agreements were amended
to mature on March 31, 2005. As of December 31, 2002, the balance outstanding
for Tranches A1, A2 and B were $0, $16,485 and $156,015, respectively.

On June 26, 2002, at the closing of the amendment, the Company paid
retroactive interest to July 1, 2001 of $5,116, fees of $9,574 and accrued
interest of $1,775. Costs paid to the creditors at closing and fees paid to
third parties in connection with the amendment of $9,377 were capitalized and
are amortized

F-32

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

over the term of the amended agreements. The Company also paid at closing a
total of $20,000 consisting of a permanent pay down of $8,390 on the revolver,
principal repayment of $6,043 on its term loan, principal repayment of $5,000 on
its 8.51% notes, and deposited $567 into a restrictive cash account as
collateral against the letter of credit reimbursement agreement.

Other than as discussed in the previous paragraph, there was no other
principal amortization in 2002. The amortization in 2003 through 2005 will be
used to pay down, on a pro rata basis, the revolving credit facility, the term
loan and the new 9.5% notes and to cash collateralize the letter of credit
reimbursement agreement. In addition, starting in 2003, excess cash flow as
defined in the loan agreements will also be used to pay down the revolving
credit facility, the term loan and the 9.5% notes and to cash collateralize the
letter of credit reimbursement agreement on a pro rata basis.

The quarterly payments to be made in relation to the new 9.5% Series A and
B notes, revolving credit facility and term loan are as follows:

September 30, 2003.......................................... $ 4,891
December 31, 2003........................................... 9,782
March 31, 2004.............................................. 29,347
June 30, 2004............................................... 29,347
September 30, 2004.......................................... 34,238
December 31, 2004........................................... 39,129
March 31, 2005.............................................. 348,727
</Table>

The weighted average interest rate on the borrowings at December 31, 2002
and 2001 was 7.07% and 6.28%, respectively.

In March 2000, a subsidiary of the Company entered into a $2,000 term loan
with a related party. Interest on the debt accrues at prime rate and is payable
at maturity. The loan maturity has been extended to August 2004, and the loan
amount paid down to $254.

The aggregate maturities of long-term debt are as follows:

2003........................................................ $ 14,673
2004........................................................ 132,061
2005........................................................ 348,727
2006........................................................ --
Thereafter.................................................. 10,889
--------
$506,350
========
</Table>

The Company will have aggregate scheduled interest payments for the new
9.5% Series A and Series B notes as follows:

2003........................................................ $19,781
2004........................................................ 17,361
2005........................................................ 3,445
-------
$40,587
=======
</Table>

F-33

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

8. SUPPLEMENTAL GUARANTOR INFORMATION

Under the terms of the indebtedness described in Note 7, all subsidiaries
of the Company that are not unrestricted entities are guarantors, jointly and
severally, of the revolving credit facility, term loan agreement and senior
notes. Westlake International Investments Corporation is the only unrestricted
subsidiary of the Company. See Note 19 for guarantor disclosures related to the
refinancing completed on July 31, 2003. The following condensed consolidated
financial information presents supplemental information for the restricted
entities (which include the parent company) and the unrestricted entity as of
December 31, 2002 and 2001.

CONDENSED CONSOLIDATING FINANCIAL INFORMATION AS OF DECEMBER 31, 2002

<Table>
<Caption>
CONSOLIDATED
RESTRICTED UNRESTRICTED WESTLAKE
ENTITIES ENTITY CHEMICAL
---------- ------------ ------------

BALANCE SHEET
Total current assets..................................... $ 335,428 $ 44 $ 335,472
Property, plant and equipment, net....................... 935,463 -- 935,463
Equity investment........................................ -- 14,990 14,990
Other assets............................................. 28,377 7,751 36,128
---------- ------- ----------
Total assets................................... $1,299,268 $22,785 $1,322,053
========== ======= ==========
Current portion of long term debt........................ $ 14,673 $ -- $ 14,673
Other current liabilities................................ 134,661 -- 134,661
Long term debt........................................... 491,424 253 491,677
Deferred income taxes.................................... 132,782 -- 132,782
Other liabilities........................................ 23,541 -- 23,541
Minority interest........................................ 81,294 -- 81,294
Stockholder's equity..................................... 420,893 22,532 443,425
---------- ------- ----------
Total liabilities and stockholder's equity..... $1,299,268 $22,785 $1,322,053
========== ======= ==========
</Table>

F-34

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2002

<Table>
<Caption>
CONSOLIDATED
RESTRICTED UNRESTRICTED WESTLAKE
ENTITIES ENTITY CHEMICAL
---------- ------------ ------------

STATEMENT OF OPERATIONS
Net sales................................................ $1,072,627 $ -- $1,072,627
Cost of sales............................................ 1,002,092 -- 1,002,092
Selling, general and administrative expenses............. 58,783 -- 58,783
Impairment of long-lived assets.......................... 2,239 -- 2,239
---------- ------- ----------
Income from operations................................... 9,513 -- 9,513
OTHER INCOME (EXPENSE)
Interest expense......................................... (32,806) (101) (32,907)
Other income (expense), net.............................. 4,738 2,046 6,784
---------- ------- ----------
Income (loss) before income taxes........................ (18,555) 1,945 (16,610)
Provision for income taxes............................... (7,206) -- (7,206)
---------- ------- ----------
Income (loss) before minority interest................... (11,349) 1,945 (9,404)
Minority interest in the net income of consolidated
subsidiary............................................. (8,065) -- (8,065)
---------- ------- ----------
Net income (loss)........................................ (3,284) 1,945 (1,339)
Retained earnings, December 31, 2001..................... 54,584 391 54,975
---------- ------- ----------
Retained earnings, December 31, 2002..................... $ 51,300 $ 2,336 $ 53,636
========== ======= ==========
</Table>

F-35

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2002

<Table>
<Caption>
CONSOLIDATED
RESTRICTED UNRESTRICTED WESTLAKE
ENTITIES ENTITY CHEMICAL
---------- ------------ ------------

STATEMENT OF CASH FLOWS
Net income (loss)........................................ $ (3,284) $ 1,945 $ (1,339)
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES
Depreciation and amortization............................ 89,488 114 89,602
Net changes in working capital and other................. (117,937) (2) (117,939)
---------- ------- ----------
Net cash provided (used) by operating
activities................................... (31,733) 2,057 (29,676)
---------- ------- ----------
(Additions) to property, plant and equipment............. (38,587) -- (38,587)
Proceeds from insurance claims........................... 4,901 -- 4,901
---------- ------- ----------
Net cash used in investing activities.......... (33,686) -- (33,686)
---------- ------- ----------
Proceeds from borrowings................................. 113,890 -- 113,890
Repayments of borrowings................................. (117,432) (2,013) (119,445)
---------- ------- ----------
Net cash used in financing activities.......... (3,542) (2,013) (5,555)
---------- ------- ----------
Net increase (decrease) in cash and cash equivalents..... (68,961) 44 (68,917)
Cash and cash equivalents at beginning of year........... 78,991 -- 78,991
---------- ------- ----------
Cash and cash equivalents at end of year................. $ 10,030 $ 44 $ 10,074
========== ======= ==========
</Table>

F-36

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION AS OF DECEMBER 31, 2001

<Table>
<Caption>
CONSOLIDATED
RESTRICTED UNRESTRICTED WESTLAKE
ENTITIES ENTITY CHEMICAL
---------- ------------ ------------

BALANCE SHEET
Total current assets..................................... $ 303,346 $ -- $ 303,346
Property, plant and equipment, net....................... 978,525 -- 978,525
Equity investment........................................ -- 14,883 14,883
Other assets............................................. 24,533 7,865 32,398
---------- ------- ----------
Total assets................................... $1,306,404 $22,748 $1,329,152
========== ======= ==========
Current portion of long term debt........................ $ 11,043 $ 2,000 $ 13,043
Other current liabilities................................ 121,214 -- 121,214
Long term debt........................................... 498,596 -- 498,596
Deferred income taxes.................................... 135,965 -- 135,965
Other liabilities........................................ 25,040 -- 25,040
Minority interest........................................ 89,359 -- 89,359
Stockholder's equity..................................... 425,187 20,748 445,935
---------- ------- ----------
Total liabilities and stockholder's equity..... $1,306,404 $22,748 $1,329,152
========== ======= ==========
</Table>

F-37

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2001

<Table>
<Caption>
CONSOLIDATED
RESTRICTED UNRESTRICTED WESTLAKE
ENTITIES ENTITY CHEMICAL
---------- ------------ ------------

STATEMENT OF OPERATIONS
Net sales................................................ $1,087,033 $ -- $1,087,033
Cost of sales............................................ 1,121,759 -- 1,121,759
Selling, general and administrative expenses............. 53,203 -- 53,203
Write down of impaired assets............................ 7,677 -- 7,677
---------- ------- ----------
Loss from operations..................................... (95,606) -- (95,606)
OTHER INCOME (EXPENSE)
Interest expense......................................... (31,892) -- (31,892)
Other income (expense), net.............................. 7,949 946 8,895
---------- ------- ----------
Income (loss) before income taxes........................ (119,549) 946 (118,603)
(Benefit from) provision for income taxes................ (45,255) -- (45,255)
---------- ------- ----------
Income before minority interest.......................... (74,294) 946 (73,348)
Minority interest in the net income of consolidated
subsidiary............................................. (8,473) -- (8,473)
---------- ------- ----------
Net income............................................... (65,821) 946 (64,875)
Retained earnings, December 31, 2000..................... 120,405 (555) 119,850
---------- ------- ----------
Retained earnings, December 31, 2001..................... $ 54,584 $ 391 $ 54,975
========== ======= ==========
</Table>

F-38

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2001

<Table>
<Caption>
CONSOLIDATED
RESTRICTED UNRESTRICTED WESTLAKE
ENTITIES ENTITY CHEMICAL
---------- ------------ ------------

STATEMENT OF CASH FLOWS
Net income............................................... $ (65,821) $ 946 $ (64,875)
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES
Depreciation and amortization............................ 83,115 192 83,307
Net changes in working capital and other................. 11,191 (1,138) 10,053
---------- ------- ----------
Net cash provided (used) by operating
activities................................... 28,485 -- 28,485
---------- ------- ----------
(Additions) to property, plant and equipment............. (76,500) -- (76,500)
---------- ------- ----------
Net cash used in investing activities.......... (76,500) -- (76,500)
---------- ------- ----------
Proceeds from borrowings................................. 226,000 -- 226,000
Repayments of borrowings................................. (107,250) -- (107,250)
---------- ------- ----------
Net cash used in financing activities.......... 118,750 -- 118,750
---------- ------- ----------
Net increase (decrease) in cash and cash equivalents..... 70,735 -- 70,735
Cash and cash equivalents at beginning of year........... 8,256 -- 8,256
---------- ------- ----------
Cash and cash equivalents at end of year................. $ 78,991 $ -- $ 78,991
========== ======= ==========
</Table>

F-39

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2000

<Table>
<Caption>
CONSOLIDATED
RESTRICTED UNRESTRICTED WESTLAKE
ENTITIES ENTITY CHEMICAL
---------- ------------ ------------

STATEMENT OF OPERATIONS
Net sales................................................ $1,391,363 $ -- $1,391,363
Cost of sales............................................ 1,198,700 -- 1,198,700
Selling, general and administrative expenses............. 61,855 -- 61,855
Write down of impaired assets............................ 10,777 -- 10,777
---------- ----- ----------
Income from operations................................... 120,031 -- 120,031
OTHER INCOME (EXPENSE)
Interest expense......................................... (31,957) -- (31,957)
Other income (expense), net.............................. 1,871 (186) 1,685
---------- ----- ----------
Income before income taxes............................... 89,945 (186) 89,759
Provision for income taxes............................... 30,707 -- 30,707
---------- ----- ----------
Income before minority interest.......................... 59,238 (186) 59,052
Minority interest in the net income of consolidated
subsidiary............................................. 5,357 -- 5,357
---------- ----- ----------
Net income............................................... 53,881 (186) 53,695
Retained earnings, December 31, 1999..................... 83,524 (369) 83,155
Dividends paid to parents................................ (17,000) -- (17,000)
---------- ----- ----------
Retained earnings, December 31, 2000..................... $ 120,405 $(555) $ 119,850
========== ===== ==========
</Table>

F-40

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2000

<Table>
<Caption>
CONSOLIDATED
RESTRICTED UNRESTRICTED WESTLAKE
ENTITIES ENTITY CHEMICAL
---------- ------------ ------------

STATEMENT OF CASH FLOWS
Net income............................................... $ 53,881 $(186) $ 53,695
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES
Depreciation and amortization............................ 80,986 177 81,163
Net changes in working capital and other................. 37,465 9 37,474
---------- ----- ----------
Net cash provided (used) by operating
activities................................... 172,332 -- 172,332
---------- ----- ----------
(Additions) to property, plant and equipment............. (78,893) -- (78,893)
Acquisition of business operations....................... (8,800) -- (8,800)
---------- ----- ----------
Net cash used in investing activities.......... (87,693) -- (87,693)
---------- ----- ----------
Proceeds from borrowings................................. 52,000 -- 52,000
Repayments of borrowings................................. (120,000) -- (120,000)
Contributions from parent................................ -- -- --
Dividend paid to parent.................................. (17,000) -- (17,000)
---------- ----- ----------
Net cash used in financing activities.......... (85,000) -- (85,000)
---------- ----- ----------
Net increase (decrease) in cash and cash equivalents..... (361) -- (361)
Cash and cash equivalents at beginning of year........... 8,617 -- 8,617
---------- ----- ----------
Cash and cash equivalents at end of year................. $ 8,256 $ -- $ 8,256
========== ===== ==========
</Table>

9. DERIVATIVE COMMODITY INSTRUMENTS

The Company uses derivative instruments to reduce price volatility risk on
commodities, primarily natural gas and ethane. Generally, the Company's strategy
is to hedge its exposure to price variance by locking in prices for future
purchases and sales. The Company accounts for such commodity derivatives as
hedges. Usually, such derivatives are for terms less than one year. During 2002,
due to the short-term nature of the commitments and associated derivative
instruments, the Company did not designate any of its derivative instruments as
hedges under the provisions of SFAS 133. As such, gains and losses from changes
in the fair value of all the derivative instruments used in 2002 were included
in earnings.

The exposure on commodity derivatives used for price risk management
includes the risk that the counterparty will not pay if the market declines
below the established fixed price. In such case, the Company would lose the
benefit of the derivative differential on the volume of the commodities covered.
In any case, the Company would continue to receive the market price on the
actual volume hedged. The Company also bears the risk that it could lose the
benefit of market improvements over the fixed derivative price for the term and
volume of the derivative securities (as such improvements would accrue to the
benefit of the counterparty).

The Company had losses of $737, $800 and $135 in connection with commodity
derivatives for the years ending December 2002, 2001 and 2000, respectively.
Risk management asset balance of $185 was included in "Prepaid expenses and
other current assets," and risk management liability balance of $326

F-41

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

was included in "Accrued liabilities" in the Company's balance sheet as of
December 31, 2002. There were no risk management assets or liabilities as of
December 31, 2001.

10. INCOME TAXES

The Company's income tax provision for the years ended December 31, 2002
and 2001 consists of the following:

<Table>
<Caption>
2002 2001 2000
------- -------- -------

CURRENT
Federal................................................ $ -- $ -- $ 637
State.................................................. (219) 426 2,655
Foreign................................................ 952 -- 24
------- -------- -------
733 426 3,316
------- -------- -------
DEFERRED
Federal................................................ (7,785) (43,223) 25,739
State.................................................. (154) (2,458) 1,238
Foreign................................................ -- -- 414
------- -------- -------
(7,939) (45,681) 27,391
------- -------- -------
Total provision (benefit).................... $(7,206) $(45,255) $30,707
======= ======== =======
</Table>

An analysis of the Company's effective income tax rate for the years ended
December 31, 2002, 2001 and 2000, follows:

<Table>
<Caption>
2002 2001 2000
------- -------- -------

Provision for federal income tax at statutory rate..... $(5,656) $(41,304) $31,419
State income tax provision net of federal income tax
effect............................................... (210) (1,534) 2,530
Foreign tax............................................ 952 -- --
Other, net............................................. (2,292) (2,417) (3,242)
------- -------- -------
$(7,206) $(45,255) $30,707
======= ======== =======
</Table>

F-42

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

The tax effects of the principal temporary differences between financial
reporting and income tax reporting at December 31, 2002 and 2001, are as
follows:

<Table>
<Caption>
2002 2001
--------- ---------

AMT credit carryforward..................................... $ 28,938 $ 31,895
Net operating loss carryforward............................. 91,292 79,057
Investments................................................. 14,757 14,757
Accruals.................................................... 9,384 9,806
Inventory................................................... 2,222 825
Other....................................................... 3,867 4,076
--------- ---------
Deferred tax assets -- total................................ 150,460 140,416
Book/tax depreciation differences........................... (265,543) (264,085)
Other....................................................... (647)
--------- ---------
Deferred tax liabilities -- total........................... (266,190) (264,085)
--------- ---------
Total net deferred tax liabilities.......................... $(115,730) $(123,669)
========= =========
</Table>

At December 31, 2002, the Company had federal and state tax net operating
loss carryforward of approximately $246,270 and $625,050, respectively, which
will expire in varying amounts between 2009 and 2020 and are subject to certain
limitations on an annual basis. Management believes the Company will realize the
full benefit of the net operating loss carryforwards before they expire.

11. EMPLOYEE BENEFITS

The Company has a defined contribution savings plan covering all regular
full-time employees whereby employees may elect to contribute up to 15% of their
annual compensation. The Company matches the first 6% of such employee
contributions at rates which vary by subsidiary. The Company may, at its
discretion, make an additional contribution in an amount as the Board of
Directors may determine. For the years ended December 31, 2002, 2001 and 2000,
the Company charged approximately $1,905, $1,838 and $1,690, respectively, to
expense for these contributions.

The Company has a defined contribution retirement plan covering
substantially all employees of certain subsidiaries who have completed one year
of service. The Company contributions to the plan are determined as a percentage
of employees' base and overtime pay. For the years ended December 31, 2002, 2001
and 2000, the Company charged approximately $1,908, $2,021 and $2,000,
respectively, to expense for these contributions.

The Company has noncontributory defined benefit plans which cover
substantially all salaried and all wage employees of two subsidiaries. Benefits
for salaried employees under these plans are based primarily on years of service
and employees' pay near retirement. Benefits for wage employees are based upon
years of service and a fixed amount per year as negotiated periodically. The
Company recognizes the years of service prior to the Company's acquisition of
the facilities for purposes of determining vesting eligibility and benefit
levels for a certain subsidiary and for determining vesting and eligibility for
employees of a certain subsidiary not covered by collective bargaining
agreements. The Company's funding policy is consistent with the funding
requirements of federal law and regulations.

F-43

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

The Company provides postretirement healthcare benefits to the employees of
three subsidiaries in 2001 who meet certain minimum age and service
requirements. The Company has the right to modify or terminate some of these
benefits.

<Table>
<Caption>
PENSION BENEFITS OTHER BENEFITS
--------------------------- ------------------------------
2002 2001 2000 2002 2001 2000
------- ------- ------- -------- -------- --------

CHANGE IN BENEFIT
OBLIGATION
Benefit obligation,
beginning of year...... $20,492 $19,386 $15,785 $ 18,155 $ 18,071 $ 16,800
Service cost............. 807 845 876 403 411 320
Interest cost............ 1,385 1,299 1,224 446 467 539
Actuarial gain (loss).... (424) (618) 1,823 648 (118) 1,016
Benefits paid............ (571) (420) (322) (569) (676) (604)
Plan amendment........... -- -- -- 2,313 -- --
------- ------- ------- -------- -------- --------
Benefit obligation, end
of year................ 21,689 20,492 19,386 21,396 18,155 18,071
------- ------- ------- -------- -------- --------
CHANGE IN PLAN ASSETS
Fair value of plan
assets, beginning of
year................... 12,070 12,461 11,638 -- -- --
Actual return............ (550) (742) (66) -- -- --
Employer contribution.... 2,125 771 1,211 569 676 604
Benefits paid............ (571) (420) (322) (569) (676) (604)
------- ------- ------- -------- -------- --------
Fair value of plan
assets, end of year.... 13,074 12,070 12,461 -- -- --
------- ------- ------- -------- -------- --------
Funded status............ (8,615) (8,422) (6,925) (21,396) (18,155) (18,071)
Unrecognized net
actuarial loss......... 2,729 1,562 313 6,408 6,221 6,836
Unamortized transition
obligation............. -- -- -- 1,025 1,139 1,253
Unamortized prior period
service cost........... 549 876 1,203 2,426 379 433
------- ------- ------- -------- -------- --------
Net amount recognized.... $(5,337) $(5,984) $(5,409) $(11,537) $(10,416) $ (9,549)
======= ======= ======= ======== ======== ========
AMOUNTS RECOGNIZED IN THE
STATEMENT OF FINANCIAL
POSITION CONSIST OF
Accrued benefit
liability.............. $(7,790) $(7,326) $(5,409) $(11,537) $(10,416) $ (9,549)
Intangible asset......... 447 671 -- -- -- --
Accumulated other
comprehensive.......... -- -- -- -- -- --
loss................... 2,006 671 -- -- -- --
------- ------- ------- -------- -------- --------
$(5,337) $(5,984) $(5,409) $(11,537) $(10,416) $ (9,549)
======= ======= ======= ======== ======== ========
</Table>

F-44

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

<Table>
<Caption>
PENSION BENEFITS OTHER BENEFITS
------------------ ------------------
2002 2001 2000 2002 2001 2000
---- ---- ---- ---- ---- ----

WEIGHTED-AVERAGE ASSUMPTIONS AS OF YEAR END
Discount rate.................................. 7% 7% 7% 5.5% 5.5% 6.0%
Expected return on plan assets................. 9% 9% 9% 0% 0% 0%
Rate of compensation increase.................. 4.5% 4.5% 5.0% 0% 0% 0%
</Table>

<Table>
<Caption>
PENSION BENEFITS OTHER BENEFITS
--------------------------- ------------------------
2002 2001 2000 2002 2001 2000
------- ------- ------- ------ ------ ------

COMPONENTS OF NET PERIODIC
BENEFIT COST
Service cost................... $ 807 $ 845 $ 876 $ 403 $ 411 $ 320
Interest cost.................. 1,385 1,299 1,224 446 467 539
Expected return on plan
assets....................... (1,121) (1,126) (1,155) -- -- --
Net amortization............... 406 330 308 840 665 756
------- ------- ------- ------ ------ ------
Net period benefit cost........ $ 1,477 $ 1,348 $ 1,253 $1,689 $1,543 $1,615
======= ======= ======= ====== ====== ======
</Table>

12. RELATED PARTY TRANSACTIONS

The Company leases office space for management and administrative services
from an affiliated party. For the years ending December 31, 2002, 2001 and 2000,
the Company incurred and paid lease payments of approximately $1,512, $1,671 and
$1,600, respectively.

In March 2000, the Company loaned an affiliated party $2,000. Principal and
interest payments will be repaid in twelve semi-annual installments which
commence in January 2003. Interest on the debt accrues at LIBOR plus 2%. The
affiliate has to comply with certain debt covenants which limit its ability to
pay the principal and interest on the loans to affiliates. The Company's ability
to recover the interest and principal of the loan with the affiliate as well as
time of such recovery is contingent upon the affiliate's compliance with these
covenants. Previously, the Company loaned this same affiliate $5,150. No
interest or principal payments were received from the original loan from 1997
through 2001. Interest payments of $1,350 were received in 2002 and included in
other income (expense) in the income statement. The loan amounts are included in
other assets, net in the accompanying consolidated balance sheet.

During the years ended December 31, 2002, 2001 and 2000, the Company and
subsidiaries charged affiliates $2,204, $2,627 and $3,130, respectively, for
management services incurred on their behalf. The amounts are included in other
income in the accompanying consolidated statement of operations. Amounts due for
such services and other expenses of $1,056 and $3,622 as of December 31, 2002
and 2001, respectively, are included in accounts receivable in the accompanying
consolidated balance sheet. During the years ended December 31, 2001 and 2000,
the Company purchased product for resale from an affiliate of $2,639 and $269,
respectively.

In connection with the construction of a polyethylene plant, the Company
signed a technology license agreement with a third party. During 1997, the
Company assigned the technology license agreement to Westlake Technology
Corporation ("WTC"), a subsidiary of GPPI. The Company entered into a sublicense
agreement with WTC whereby the Company continues to utilize the technology and
pays WTC a fee based on the Company's production. Approximately $3,289, $3,188
and $2,942 of fees are included in cost of sales for the years 2002, 2001 and
2000, respectively.

F-45

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

In December 1997, the Company entered into an agreement with WTC for
licensing computer software. The agreement provides for quarterly licensing
payments until 2002 based on achieved cost savings. Licensing payments of
approximately $1,300 were made in 2001 and 2000. Quarterly software support fee
payments of $450 and $720 were made in 2001 and 2000, respectively.

In March 2001, the Company declared and paid cash dividends as a return of
capital amounting to $87,000 to WPPI. Immediately following the payment, the
Company received a capital contribution from WPPI amounting to $87,000.

13. ACQUISITIONS

In December 2000, the Company received a capital contribution from WPPI
consisting of 49 percent of the shares of common stock outstanding at Westlake
Styrene Corporation ("WSC"). As a result of this contribution, the Company owns
100 percent of WSC. The contribution of WSC shares was recorded by the Company
at $43,187, which represents WPPI's historical cost of the contributed WSC
shares.

During April 2000, the Company acquired a window fabrication business for
approximately $8,800. The acquired business assets were recorded at fair value
at the date of purchase.

14. OTHER INCOME

Other income, net consists of the following for the years ended December
31, 2002 and 2001:

<Table>
<Caption>
2002 2001 2000
------- ------- -------

Management services..................................... $ 2,204 $ 2,627 $ 3,130
Interest income......................................... 1,978 1,755 1,077
Insurance proceeds, net................................. 1,965 2,878 591
WARC servicing fees, net of discount expense............ 1,092 (1,229) (4,129)
Equity income........................................... 770 1,138 656
WARC interest........................................... 244 481 735
Derivative loss......................................... (737) (800) (135)
Sales leaseback gain.................................... 340 620 339
Other................................................... (1,072) 1,425 (579)
------- ------- -------
$ 6,784 $ 8,895 $ 1,685
======= ======= =======
</Table>

15. SEVERANCE COSTS

During the year ended December 31, 2002, the Company incurred $1,075 of
severance cost relating to the termination of 58 employees. The termination
program commenced in July 2002 and was completed by December 31, 2002. As of
December 31, 2002, a $240 liability was recorded in accrued liabilities
representing payments to be made over time for the employee terminations.
Severance expenses of $985 and $90 are included in the cost of sales and
selling, general and administrative expenses components, respectively, of the
income statement for the year ended December 31, 2002.

16. COMMITMENTS AND CONTINGENCIES

F-46

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

The Company is subject to environmental laws and regulations that may
require it to remove or mitigate the effects of the disposal or release of
chemical substances at various sites. Under some of these laws and regulations,
a current or previous owner or operator of property may be held liable for the
costs of removal or remediation of hazardous substances on, under, or in its
property, without regard to whether the owner or operator knew of, or caused the
presence of the contaminants, and regardless of whether the practices that
resulted in the contamination were legal at the time they occurred. As several
of the Company's production sites have a history of industrial use, it is
impossible to predict precisely what effect these laws and regulations will have
on the Company in the future. As is typical for chemical businesses, soil and
groundwater contamination has occurred in the past at some of the Company's
sites, and might occur or be discovered at other sites in the future. The
Company has typically conducted extensive soil and groundwater assessments
throughout its operations either prior to acquisitions or associated with
subsequent permitting requirements. The Company's investigations have not
revealed any contamination caused by its operations, which would likely require
it to incur material long term remediation efforts and associated liabilities.

Lake Charles. In the fall of 2000, the Company determined that it was not
in compliance with certain Clean Air Act regulations governing emissions of
benzene from its two ethylene plants in Lake Charles. The Company voluntarily
reported this discovery to the Louisiana Department of Environmental Quality, or
LDEQ, and began negotiations to resolve the matter. The Company subsequently
expanded the scope of its settlement discussions to include other environmental
non-compliance matters at all of its plants in Lake Charles. In 2003, the
Company has reached a tentative settlement with the LDEQ requiring it to pay
$815 in penalties, which were accrued at December 31, 2002, and to perform
specified beneficial environmental projects that will cost approximately $4,400.
A portion of these expenditures has already been made. A final settlement may be
reached by the fall of 2003.

Calvert City. In connection with the Company's acquisition of the
manufacturing complex in Calvert City from Goodrich Corporation ("Goodrich") in
1990 and 1997, Goodrich agreed to indemnify the Company for any pre-existing
contamination at the site. Contamination at the Calvert City facilities is
currently being investigated and remediated by PolyOne, an entity spun off from
Goodrich in 1993 that assumed remediation and indemnification obligations for
the site. For the past three years, PolyOne has suggested that the Company's
actions after its acquisition of the complex have contributed to or otherwise
exacerbated the contamination at the site. The Company has denied those
allegations and has retained technical experts to evaluate its position.
Goodrich has also recently asserted similar claims. While the Company believes
that Goodrich and PolyOne will continue to remediate, and remain fully
responsible for, this contamination in accordance with state and federal
requirements and their contractual obligations to the Company, there can be no
assurance that these parties will continue such remediation or that the Company
will not be found to be at least partially responsible.

In March and June 2002, the EPA's National Enforcement Investigation
Center, or NEIC, conducted an environmental investigation of the Company's
manufacturing complex in Calvert City in response to a January 2002 chlorine
release. In May 2003, the Company received a report prepared by NEIC summarizing
the results of that investigation. Among other things, the NEIC concluded that
the requirements of several regulatory provisions had not been met. The Company
has begun to analyze the NEIC report and has identified areas where the Company
believes that erroneous factual or legal conclusions, or both, may have been
drawn by NEIC, and the Company plans to meet with the EPA to review those areas.
Nevertheless, it is likely that penalties will be imposed by either the EPA or
the Kentucky Department of Environmental Protection for other violations.

In general, it is the Company's policy to comply with all environmental,
health and safety requirements and to provide safe and environmentally sound
workplaces for its employees. In some cases,

F-47

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

compliance can be achieved only by incurring capital expenditures, and the
Company is faced with instances of non-compliance from time to time.

It is difficult to estimate the future costs of environmental protection
and remediation because of many uncertainties, including uncertainties about the
status of laws, regulations and information related to individual locations and
sites and the Company's ability to rely on third parties to carry out such
remediation. Subject to the foregoing, but taking into consideration the
Company's experience regarding environmental matters of a similar nature and
facts currently known, the Company believes that capital expenditures and
remedial actions to comply with existing laws governing environmental protection
will not have a material adverse effect on the Company's business and financial
results.

In connection with the purchase of our Calvert City facilities in 1997, the
Company acquired 10 barges that it uses to transport chemicals on the
Mississippi, Ohio and Illinois Rivers. In April 1999, the U.S. Coast Guard
issued a forfeiture order permanently barring the use of the barges in coastwise
trade due to an alleged violation of a federal statute regarding the citizenship
of the purchaser. The Company appealed the forfeiture order with the Coast Guard
and, in June 1999, the Company filed suit in the U.S. Court of Appeals for the
D.C. Circuit seeking a stay of the order pending resolution of the Coast Guard
appeal. The D.C. Circuit granted the stay and the Company is able to use the
barges pending resolution of its appeal with the Coast Guard. The Company has
approached the Coast Guard to discuss settlement of this matter. The Company
does not believe that the ultimate outcome of this matter will have a material
adverse effect on its business, although there can be no assurance in this
regard.

In March 2002, the Company was awarded $16,300, plus legal fees and costs,
by the U.S. District Court of the Western District of Louisiana, resulting from
the Company's counterclaim in the Taita Chemical Company, LTD ("Taita") vs.
Westlake Styrene Corporation ("WSC") lawsuit. The suit was brought by Taita in
1997 to recoup alleged overpayments relative to an off-take agreement between
Taita and WSC. The case is currently under appeal. No gain or loss was
recognized as of December 31, 2002.

The Company is obligated under various long-term and short-term
noncancelable operating leases. Several of the leases provide for renewal terms.
At December 31, 2002, future minimum lease commitments are as follows:

2003........................................................ $ 18,115
2004........................................................ 15,720
2005........................................................ 12,452
2006........................................................ 10,659
2007........................................................ 9,830
Thereafter.................................................. 49,972
--------
$116,748
========
</Table>

Rental expense, net of railcar mileage credits, was approximately $18,079,
$19,990 and $18,957 for the years ended December 31, 2002, 2001 and 2000,
respectively.

F-48

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

17. SEGMENT INFORMATION

The Company's Olefins segment manufactures and markets ethylene,
polyethylene, styrene monomer and various ethylene co-products. The majority of
the Company's ethylene production is used in the Company's polyethylene, styrene
and VCM operations. The remainder of ethylene is sold to third parties. In
addition, we sell our ethylene co-products to third parties. Our primary
ethylene co-products are propylene, crude butadiene and hydrogen.

The majority of sales in our olefins business are made under long-term
agreements. Contract volumes are established within a range. The terms of these
contracts are fixed for a period (typically more than one year), although
earlier terminations may occur if the parties fail to agree on price and
deliveries are suspended for a period of several months. In most cases, these
contracts also contemplate extension of the term unless specifically terminated
by one of the parties. No single external Olefins customer accounted for more
than 10% of segment net sales during 2002, 2001 or 2000.

The Company's Vinyls business manufactures and markets PVC, VCM, chlorine,
caustic soda, and ethylene. The Company also manufactures and sells products
fabricated from the PVC that the Company produces, including pipe, window and
patio door profile and fence. The Company's main manufacturing complex is
located in Calvert City, Kentucky. It includes an ethylene plant, a chlor-alkali
plant, a VCM plant and a PVC plant. The Company also owns a 43% interest in a
PVC joint venture in China. As discussed in Note 1, in 2003, the Company
acquired a PVC and VCM manufacturing facility in Geismar, Louisiana.

The Company uses a majority of its chlorine, VCM and PVC production to
manufacture fabricated products at the Company's eight regional plants. The
remainder of the VCM production is sold pursuant to a contract that requires the
Company to supply a minimum of 400 million pounds of VCM per year. During 2002,
2001 and 2000 one customer accounted for 19.8%, 17.3%, and 19.7%, respectively,
of net sales in the Vinyls segment.

The accounting policies of the individual segments are the same as those
described in Note 1.

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------------
2002 2001 2000
---------- ---------- ----------

SALES TO EXTERNAL CUSTOMERS
Olefins.......................................... $ 599,035 $ 631,694 $ 863,711
Vinyls........................................... 473,592 455,339 527,652
---------- ---------- ----------
$1,072,627 $1,087,033 $1,391,363
========== ========== ==========
INTERSEGMENT SALES
Olefins.......................................... $ 28,459 $ 34,009 $ 42,565
Vinyls........................................... 503 -- --
---------- ---------- ----------
$ 28,962 $ 34,009 $ 42,565
========== ========== ==========
</Table>

F-49

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------------
2002 2001 2000
---------- ---------- ----------

INCOME (LOSS) FROM OPERATIONS
Olefins.......................................... $ 7,875 $ (44,734) $ 94,292
Vinyls........................................... 10,482 (32,857) 43,999
Corporate and other.............................. (8,844) (18,015) (18,260)
---------- ---------- ----------
$ 9,513 $ (95,606) $ 120,031
========== ========== ==========
CAPITAL EXPENDITURES
Olefins.......................................... $ 21,098 $ 20,471 $ 19,777
Vinyls........................................... 17,036 53,302 50,223
Corporate and other.............................. 453 2,727 8,893
---------- ---------- ----------
$ 38,587 $ 76,500 $ 78,893
========== ========== ==========
</Table>

<Table>
<Caption>
DECEMBER 31,
-----------------------
2002 2001
---------- ----------

TOTAL ASSETS
Olefins........................................... $ 903,569 $ 861,976
Vinyls............................................ 350,684 350,303
Corporate and other............................... 67,800 116,873
---------- ----------
$1,322,053 $1,329,152
========== ==========
</Table>

A reconciliation of total segment income (loss) from operations to
consolidated income (loss) before taxes is as follows:

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
-------------------------------
2002 2001 2000
-------- --------- --------

Income (loss) from operations for reportable
segments.......................................... $ 9,513 $ (95,606) $120,031
Interest expense.................................... (32,907) (31,892) (31,957)
Other income, net................................... 6,784 8,895 1,685
-------- --------- --------
Income (loss) before taxes.......................... $(16,610) $(118,603) $ 89,759
======== ========= ========
</Table>

18. SUBSEQUENT EVENTS

In April 2003, the Company's parent contributed to the Company the stock of
Geismar Holdings, Inc. and GVGP, Inc. These entities are the partners of Geismar
Vinyls Company LP (GVC). GVC's assets, which consist of a vinyls facility in
Geismar, Louisiana, were purchased by the parent company in December 2002 for $5
million in cash consideration. In addition, a percentage of future earnings not
to exceed $4 million is to be paid by the Company. Although the Geismar facility
is currently idled, the Company intends to operate the facility when market
conditions support utilization of the additional capacity. The contribution will
be accounted for by the Company at the parent's book value.

F-50

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

19. GUARANTOR DISCLOSURES

On July 31, 2003, the Company completed a refinancing of substantially all
of its outstanding long-term debt. The Company used net proceeds from the
refinancing of approximately $507.4 million to:

- repay in full all outstanding amounts under its existing revolving credit
facility, term loan and 9.5% Series A and Series B notes, including
accrued and unpaid interest, fees and a $4.0 million make-whole premium
to the noteholders; and

- provide $2.4 million in cash collateral for outstanding letter of credit
obligations of $2.2 million.

The refinancing consisted of:

- $380.0 million in aggregate principal amount of privately placed 8 3/4%
senior notes due 2011;

- $120.0 million senior secured term loan due in 2010; and

- $21.0 million in borrowings under a new $200.0 million senior secured
working capital revolving credit facility due in 2007.

The Company incurred approximately $13.6 million in costs associated with
the refinancing that will be capitalized and amortized over the term of the new
debt.

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

things, provide limitations on incurrence of additional indebtedness, the
payment of dividends, significant investments and sale of assets. These
limitations are subject to a number of important qualifications and exceptions.
None of the agreements require the Company to maintain specified financial
ratios, except that the Company's new revolving credit facility requires the
Company to maintain a minimum fixed charge coverage ratio when availability
falls below a specified minimum level.

The Company's payment obligations under its 8 3/4% senior notes are fully
and unconditionally guaranteed by each of its current and future domestic
restricted subsidiaries (the "Guarantor Subsidiaries"). These guarantees are the
joint and several obligations of the Guarantor Subsidiaries. The following
condensed consolidating financial information presents the financial condition,
results of operations and cash flows of Westlake Chemical Corporation, the
Guarantor Subsidiaries and the remaining subsidiaries that do not guarantee the
notes (the "Non-Guarantor Subsidiaries"), together with consolidating
adjustments necessary to present the Company's results on a consolidated basis.
Westlake Olefins Corporation is the Company's 80%-owned subsidiary and is
included with the Guarantor Subsidiaries. The 20% minority interest in Westlake
Olefins Corporation was contributed to Westlake Chemical Corporation by its
parent as of August 1, 2003.

F-52

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION AS OF DECEMBER 31, 2002

F-53

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION AS OF DECEMBER 31, 2001

Current assets
Cash and cash equivalents... $ 75,820 $ 202 $ 2,969 $ -- $ 78,991
Accounts receivable, net.... 359,679 146,102 2,232 (426,594) 81,419
Inventories, net............ -- 124,989 3,238 -- 128,227
Prepaid expenses and other
current assets........... -- 1,835 578 -- 2,413
Deferred income taxes....... 12,296 -- -- -- 12,296
---------- ---------- ------- ----------- ----------
Total current assets..... 447,795 273,128 9,017 (426,594) 303,346
Property, plant and equipment,
net......................... -- 973,215 5,310 -- 978,525
Equity investment............. 727,922 -- 14,883 (727,922) 14,883
Other assets, net............. 237,650 18,710 8,083 (232,045) 32,398
---------- ---------- ------- ----------- ----------
Total assets............. $1,413,367 $1,265,053 $37,293 $(1,386,561) $1,329,152
========== ========== ======= =========== ==========
Current liabilities
Accounts payable............ $ 4,303 $ 49,375 $ 53 $ -- $ 53,731
Accrued liabilities......... 7,225 58,267 1,991 -- 67,483
Current portion of long-term
debt..................... 11,043 -- 2,000 -- 13,043
---------- ---------- ------- ----------- ----------
Total current
liabilities............ 22,571 107,642 4,044 -- 134,257
Long-term debt................ 487,707 649,694 (954) (637,851) 498,596
Deferred income taxes......... 135,965 -- -- -- 135,965
Other liabilities............. 2,035 23,005 -- -- 25,040
Minority interest............. -- 89,359 -- -- 89,359
Stockholders' equity.......... 765,089 395,353 34,203 (748,710) 445,935
---------- ---------- ------- ----------- ----------
Total liabilities and
stockholders' equity... $1,413,367 $1,265,053 $37,293 $(1,386,561) $1,329,152
========== ========== ======= =========== ==========
</Table>

F-54

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2002

Net sales....................... $ -- $1,055,873 $21,871 $ (5,117) $1,072,627
Cost of sales................... -- 989,886 17,323 (5,117) 1,002,092
-------- ---------- ------- -------- ----------
-- 65,987 4,548 -- 70,535
Selling, general and
administrative expenses....... 6,727 50,045 2,011 -- 58,783
Impairment of long-lived
assets........................ -- 1,783 456 -- 2,239
-------- ---------- ------- -------- ----------
Income (loss) from operations... (6,727) 14,159 2,081 -- 9,513
Other income (expense)
Interest expense................ (32,721) (13,411) (101) 13,326 (32,907)
Other income (expense), net..... 13,996 3,930 2,184 (13,326) 6,784
-------- ---------- ------- -------- ----------
Income (loss) before income
taxes and minority interest... (25,452) 4,678 4,164 -- (16,610)
Provision for (benefit from)
income taxes.................. (5,882) (2,851) 1,527 -- (7,206)
-------- ---------- ------- -------- ----------
Income (loss) before minority
interest...................... (19,570) 7,529 2,637 -- (9,404)
Minority interest in the net
income (loss) of consolidated
subsidiary.................... -- (8,065) -- -- (8,065)
-------- ---------- ------- -------- ----------
Net income (loss)............... $(19,570) $ 15,594 $ 2,637 $ -- $ (1,339)
======== ========== ======= ======== ==========
</Table>

F-55

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2001

Net sales....................... $ -- $1,069,423 $20,755 $ (3,145) $1,087,033
Cost of sales................... -- 1,108,052 16,852 (3,145) 1,121,759
-------- ---------- ------- -------- ----------
-- (38,629) 3,903 -- (34,726)
Selling, general and
administrative expenses....... 7,362 43,890 1,951 -- 53,203
Impairment of long-lived
assets........................ 3,636 4,041 -- -- 7,677
-------- ---------- ------- -------- ----------
Income (loss) from operations... (10,998) (86,560) 1,952 -- (95,606)
Other income (expense) Interest
expense....................... (32,967) (59,251) (152) 60,478 (31,892)
Other income (expense), net..... 63,279 4,643 1,451 (60,478) 8,895
-------- ---------- ------- -------- ----------
Income (loss) before income
taxes and minority interest... 19,314 (141,168) 3,251 -- (118,603)
Provision for (benefit from)
income taxes.................. 4,073 (50,326) 998 -- (45,255)
-------- ---------- ------- -------- ----------
Income (loss) before minority
interest...................... 15,241 (90,842) 2,253 -- (73,348)
Minority interest in the net
income (loss) of consolidated
subsidiary.................... -- (8,473) -- -- (8,473)
-------- ---------- ------- -------- ----------
Net income (loss)............... $ 15,241 $ (82,369) $ 2,253 $ -- $ (64,875)
======== ========== ======= ======== ==========
</Table>

F-56

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2000

Net sales....................... $ -- $1,377,000 $18,681 $ (4,318) $1,391,363
Cost of sales................... -- 1,186,802 16,216 (4,318) 1,198,700
-------- ---------- ------- -------- ----------
-- 190,198 2,465 -- 192,663
Selling, general and
administrative expenses....... 5,225 54,809 1,821 -- 61,855
Impairment of long-lived
assets........................ -- 10,777 -- -- 10,777
-------- ---------- ------- -------- ----------
Income (loss) from operations... (5,225) 124,612 644 -- 120,031
Other income (expense)
Interest expense................ (31,461) (31,823) (63) 31,390 (31,957)
Other income (expense), net..... 32,372 594 109 (31,390) 1,685
-------- ---------- ------- -------- ----------
Income (loss) before income
taxes and minority interest... (4,314) 93,383 690 -- 89,759
Provision for (benefit from)
income taxes.................. 4,257 26,012 438 -- 30,707
-------- ---------- ------- -------- ----------
Income (loss) before minority
interest...................... (8,571) 67,371 252 -- 59,052
Minority interest in the net
income (loss) of consolidated
subsidiary.................... 5,357 -- -- 5,357
-------- ---------- ------- -------- ----------
Net income (loss)............... $ (8,571) $ 62,014 $ 252 $ -- $ 53,695
======== ========== ======= ======== ==========
</Table>

F-57

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2002

Net income (loss)................ $ (19,570) $ 15,594 $ 2,637 $ -- $ (1,339)
ADJUSTMENTS TO RECONCILE NET
INCOME (LOSS) TO NET CASH
PROVIDED BY OPERATING
ACTIVITIES
Depreciation and
amortization................ 3,135 84,270 2,197 -- 89,602
Provision for bad debts........ -- 10,379 -- -- 10,379
(Gain) loss from disposition of
fixed assets................ -- (2,259) 456 -- (2,259)
Impairment of long-lived
assets...................... -- 1,783 -- -- 2,239
Deferred income taxes.......... (5,882) (2,057) -- -- (7,939)
Minority interest in income
(loss)...................... -- (8,065) -- -- (8,065)
Net changes in working capital
and other................... (43,061) (67,904) (1,329) -- (112,294)
--------- -------- ------- ----- ---------
Net cash provided by (used
for) operating
activities................ (65,378) 31,741 3,961 -- (29,676)
--------- -------- ------- ----- ---------
Additions to property, plant and
equipment...................... -- (36,420) (2,167) (38,587)
Proceeds from insurance claims... -- 4,901 -- -- 4,901
--------- -------- ------- ----- ---------
Net cash used for investing
activities................ -- (31,519) (2,167) -- (33,686)
--------- -------- ------- ----- ---------
Proceeds from borrowings......... 113,890 -- -- -- 113,890
Repayments of borrowings......... (117,432) -- (2,013) -- (119,445)
--------- -------- ------- ----- ---------
Net cash provided by (used
for) financing
activities................ (3,542) -- (2,013) -- (5,555)
--------- -------- ------- ----- ---------
Net increase (decrease) in cash
and cash equivalents........... (68,920) 222 (219) -- (68,917)
Cash and cash equivalents at
beginning of period............ 75,820 202 2,969 -- 78,991
--------- -------- ------- ----- ---------
Cash and cash equivalents at end
of period...................... $ 6,900 $ 424 $ 2,750 $ -- $ 10,074
========= ======== ======= ===== =========
</Table>

F-58

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2001

Net income (loss)................ $ 15,241 $(82,369) $ 2,253 $ -- $ (64,875)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities
Depreciation and
amortization................ 1,454 79,581 2,272 -- 83,307
Provision for bad debts........ -- 3,804 13 -- 3,817
(Gain) loss from disposition of
fixed assets................ -- -- -- -- --
Impairment of long-lived
assets...................... 3,636 4,041 -- -- 7,677
Deferred income taxes.......... (385) (45,296) -- -- (45,681)
Minority interest in income
(loss)...................... -- (8,473) -- -- (8,473)
Net changes in working capital
and other...................... (67,219) 123,674 (3,742) -- 52,713
--------- -------- ------- ----- ---------
Net cash provided by (used
for) operating
activities................ (47,273) 74,962 796 -- 28,485
--------- -------- ------- ----- ---------
Additions to property, plant and
equipment...................... -- (74,760) (1,740) (76,500)
Proceeds from insurance claims... -- -- -- -- --
--------- -------- ------- ----- ---------
Net cash used for investing
activities................ -- (74,760) (1,740) -- (76,500)
--------- -------- ------- ----- ---------
Proceeds from borrowings......... 226,000 -- -- -- 226,000
Repayments of borrowings......... (107,250) -- -- -- (107,250)
Capital contribution from
parent......................... 87,000 -- -- -- 87,000
Repayments of borrowings......... (87,000) -- -- -- (87,000)
--------- -------- ------- ----- ---------
Net cash used for financing
activities................ 118,750 -- -- -- 118,750
--------- -------- ------- ----- ---------
Net increase (decrease) in cash
and cash equivalents........... 71,477 202 (944) -- 70,735
Cash and cash equivalents at
beginning of period............ 4,343 -- 3,913 -- 8,256
--------- -------- ------- ----- ---------
Cash and cash equivalents at end
of period...................... $ 75,820 $ 202 $ 2,969 $ -- $ 78,991
========= ======== ======= ===== =========
</Table>

F-59

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31,
2000

Net income (loss)................ $ (8,571) $ 62,014 $ 252 $ -- $ 53,695
ADJUSTMENTS TO RECONCILE NET
INCOME (LOSS) TO NET CASH
PROVIDED BY OPERATING
ACTIVITIES
Depreciation and
amortization................ 3,590 75,426 2,147 -- 81,163
Provision for bad debts........ -- 1,300 -- -- 1,300
(Gain) loss from disposition of
fixed assets................ -- -- -- -- --
Impairment of long-lived
assets...................... 10,777 -- -- 10,777
Deferred income taxes.......... (4,315) 31,292 414 -- 27,391
Minority interest in income
(loss)...................... -- 5,357 -- -- 5,357
Net changes in working capital
and other...................... 92,515 (100,487) 621 -- (7,351)
--------- --------- ------- ----- ---------
Net cash provided by (used
for) operating
activities................ 83,219 85,679 3,434 -- 172,332
--------- --------- ------- ----- ---------
Additions to property, plant and
equipment...................... -- (76,879) (2,014) (78,893)
Proceeds from insurance claims... -- (8,800) -- -- (8,800)
--------- --------- ------- ----- ---------
Net cash used for investing
activities................ -- (85,679) (2,014) -- (87,693)
--------- --------- ------- ----- ---------
Proceeds from borrowings......... 52,000 -- -- -- 52,000
Repayments of borrowings......... (120,000) -- -- -- (120,000)
Dividend paid to parent.......... (17,000) -- -- -- (17,000)
--------- --------- ------- ----- ---------
Net cash used for financing
activities................ (85,000) -- -- -- (85,000)
--------- --------- ------- ----- ---------
Net increase (decrease) in cash
and cash equivalents........... (1,781) -- 1,420 -- (361)
Cash and cash equivalents at
beginning of period............ 6,124 -- 2,493 -- 8,617
--------- --------- ------- ----- ---------
Cash and cash equivalents at end
of period...................... $ 4,343 $ -- $ 3,913 $ -- $ 8,256
========= ========= ======= ===== =========
</Table>

F-60

WESTLAKE CHEMICAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

20. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<Table>
<Caption>
THREE MONTHS ENDED
---------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
2002 2002 2002 2002
--------- -------- ------------- ------------

Net sales.............................. $203,144 $282,480 $304,987 $282,016
Gross profit........................... (10,913) 14,856 51,008 15,584
Income (loss) from operations.......... (22,600) (70) 33,334 (1,151)
Net income (loss)...................... (14,626) (271) 16,927 (3,369)
</Table>

<Table>
<Caption>
THREE MONTHS ENDED
---------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
2001 2001 2001 2001
--------- -------- ------------- ------------

Net sales.............................. $306,486 $286,287 $265,114 $229,146
Gross profit........................... (14,771) (2,188) (10,240) (7,527)
Income (loss) from operations.......... (28,483) (13,417) (24,388) (29,318)
Net income (loss)...................... (16,314) (10,904) (15,990) (21,667)
</Table>

F-61

WESTLAKE CHEMICAL CORPORATION

SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(DOLLARS IN THOUSANDS)

<Table>
<Caption>
BALANCE AT BALANCE AT
ACCOUNTS RECEIVABLE BEGINNING CHARGED TO ADDITIONS/ END OF
ALLOWANCE FOR DOUBTFUL ACCOUNTS OF YEAR EXPENSE (DEDUCTIONS)(1) YEAR
- ------------------------------- ---------- ---------- --------------- ----------

2000........................................... $1,595 $ 1,300 $ (864) $ 2,031
2001........................................... 2,031 3,937 (1,055) 4,913
2002........................................... 4,913 10,379 (1,910) 13,382
</Table>

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

(1) Accounts receivable written off during the period.

<Table>
<Caption>
BALANCE AT BALANCE AT
INVENTORY BEGINNING CHARGED TO ADDITIONS/ END OF
ALLOWANCE FOR INVENTORY OBSOLESCENCE OF YEAR EXPENSE (DEDUCTIONS)(1) YEAR
- ------------------------------------ ---------- ---------- --------------- ----------

2000........................................... $1,660 $5,130 $(1,581) $5,209
2001........................................... 5,209 5,122 (1,009) 9,322
2002........................................... 9,322 1,287 (1,867) 8,742
</Table>

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

(1) Inventory written off during the period.

F-62

UNTIL [ ], 2004 (THE 90TH DAY AFTER THE DATE OF THIS
PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THESE SECURITIES, WHETHER OR
NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

(WESTLAKE CHEMICAL LOGO)

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Delaware Corporations. Delaware law permits a corporation to adopt a
provision in its certificate of incorporation eliminating or limiting the
personal liability of a director, but not an officer in his or her capacity as
such, to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except that such provision shall not limit the
liability of a director for (1) any breach of the director's duty of loyalty to
the corporation or its stockholders, (2) acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (3) liability
under section 174 of the Delaware General Corporation Law (the "DGCL") for
unlawful payment of dividends or stock purchases or redemptions or (4) any
transaction from which the director derived an improper personal benefit.

The certificate of incorporation of Westlake Chemical Corporation
("Westlake") provides that, to the fullest extent of Delaware law, no Westlake
director shall be liable to Westlake or its stockholders for monetary damages
for breach of fiduciary duty as a director. The certificate of incorporation of
each other Delaware corporation that is a registrant, except for Westlake Vinyl
Corporation, contains a similar provision. The certificate of incorporation of
Westlake Vinyl Corporation contains no provision limiting the liability of
directors.

Under Delaware law, a corporation may indemnify any individual made a party
or threatened to be made a party to any type of proceeding, other than an action
by or in the right of the corporation, because he or she is or was an officer,
director, employee or agent of the corporation or was serving at the request of
the corporation as an officer, director, employee or agent of another
corporation or entity against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such proceeding:
(1) if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation; or
(2) in the case of a criminal proceeding, he or she had no reasonable cause to
believe that his or her conduct was unlawful. A corporation may indemnify any
individual made a party or threatened to be made a party to any threatened,
pending or completed action or suit brought by or in the right of the
corporation because he or she was an officer, director, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or other entity,
against expenses actually and reasonably incurred in connection with such action
or suit if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation,
provided that such indemnification will be denied if the individual is found
liable to the corporation unless, in such a case, the court determines the
person is nonetheless entitled to indemnification for such expenses. A
corporation must indemnify a present or former director or officer who
successfully defends himself or herself in a proceeding to which he or she was a
party because he or she was a director or officer of the corporation against
expenses actually and reasonably incurred by him or her. Expenses incurred by an
officer or director, or any employees or agents as deemed appropriate by the
board of directors, in defending civil or criminal proceedings may be paid by
the corporation in advance of the final disposition of such proceedings upon
receipt of an undertaking by or on behalf of such director, officer, employee or
agent to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the corporation. The Delaware law regarding
indemnification and expense advancement is not exclusive of any other rights
which may be granted by the certificate of incorporation or bylaws, a vote of
stockholders or directors, agreement or otherwise.

Under the Delaware General Corporation Law, termination of any proceeding
by conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that such person is prohibited from being
indemnified.

Westlake's bylaws authorize indemnification of any person entitled to
indemnity under law to the full extent permitted by law. The bylaws of Geismar
Holdings, Inc., Gramercy Chlor-Alkali Corporation, GVGP, Inc., North American
Profiles, Inc., Westlake Chemical Holdings, Inc., Westlake Chemical
II-1

Investments, Inc., Westlake Chemical Manufacturing, Inc., Westlake Chemical
Products, Inc., Westlake Development Corporation and Westlake Vinyls, Inc.
require indemnification of officers, directors, employees and agents to the
extent permitted by the DGCL. The bylaws of Van Buren Pipe Corporation and
Westech Building Products, Inc. require indemnification of directors and
officers to the fullest extent permitted by applicable law and such
indemnification must be approved by a two-thirds vote of the board upon a
determination by the board that indemnification is proper. The bylaws of North
American Pipe Corporation, Westlake Management Services, Inc., Westlake Olefins
Corporation, Westlake PVC Corporation, Westlake Resources Corporation and
Westlake Vinyl Corporation contain no provisions regarding indemnification of
officers or directors.

Delaware Limited Partnerships. Subject to such standards and restrictions
as are set forth in its limited partnership agreement, the Delaware Revised
Uniform Limited Partnership Act empowers a Delaware limited partnership to
indemnify and hold harmless any partner or other person from and against any and
all claims and demands. The limited partnership agreement for each Delaware
limited partnership that is a registrant provides that (1) the general partner's
obligation to perform are performable only to the extent that the partnership
has funds available and (2) neither the general partner nor its affiliates shall
ever be personally liable to involuntarily furnish its or their own funds for
any such purposes, to respond in damages or to render specific performance. The
limited partners agree to look solely to the general partner's partnership
interest for recovery of any judgment against the general partner. So long as
the general partner acts in good faith, it has no liability or obligation to the
partnership or to any partner for any decision, act or omission, whether or not
such decision, act or omission was (1) authorized or reasonably prudent or (2)
the result of the exercise of good or bad business judgment.

U.S. Virgin Islands Corporation. The general corporation law of the U.S.
Virgin Islands permits a corporation to adopt a provision in its articles of
incorporation eliminating or limiting the personal liability of a director to
the corporation or its stockholders for damages for breach of duty as a
director, except that such provision shall not eliminate or limit the liability
of a director (1) if a judgment or other final adjudication adverse to the
director establishes that the director's acts or omissions were in bad faith or
involved intentional misconduct or a knowing violation of the law or (2) that
the director gained a financial profit or other advantage to which the director
was not legally entitled. The articles of incorporation of Westlake Overseas
Corporation contain no provision limiting the liability of directors.

Under the general corporation law of the U.S. Virgin Islands, a corporation
may indemnify any individual made a party or threatened to be made a party to
any type of proceeding, other than an action by or in the right of the
corporation, because he or she is or was an officer, director, employee or agent
of the corporation or was serving at the request of the corporation as an
officer, director, employee or agent of another corporation or entity against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with such proceeding: (1) if he or she acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation; and (2) in the case of a
criminal action or proceeding, he or she had no reasonable cause to believe that
his or her conduct was unlawful. A corporation may indemnify any individual made
a party or threatened to be made a party to any threatened, pending or completed
action or suit brought by or in the right of the corporation because he or she
was an officer, director, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or other entity, against expenses actually and
reasonably incurred in connection with such action or suit if he or she acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation, provided that such indemnification
will be denied if the individual is found liable to the corporation unless, in
such a case, the court determines the person is nonetheless entitled to
indemnification for such expenses. A corporation must indemnify a present or
former director or officer who successfully defends himself or herself in a
proceeding to which he or she was a party because he or she was a director or
officer of the corporation against expenses actually and reasonably incurred by
him or her. Expenses incurred by an officer or director, or any employees or
agents as deemed appropriate by the board of directors, in defending civil or
criminal proceedings may be paid by the corporation in advance of the final
disposition of such proceedings upon receipt of an undertaking by or on behalf
of such

II-2

director, officer, employee or agent to repay such amount if it shall ultimately
be determined that he or she is not entitled to be indemnified by the
corporation.

Under the general corporation law of the U.S. Virgin Islands, termination
of any proceeding by conviction or upon a plea of nolo contendere or its
equivalent shall not, of itself, create a presumption that such person is
prohibited from being indemnified.

The bylaws of Westlake Overseas Corporation provide that officers and
directors shall be defended and indemnified by the corporation and the
shareholders for against any and all claims and liabilities arising from serving
as an officer or director, except for willful misconduct or gross negligence. As
permitted by U.S. Virgin Islands law, the bylaws also authorize Westlake
Overseas Corporation to purchase and maintain insurance to cover this liability
of the corporation.

ITEM 21. EXHIBITS

(a) Exhibits

<Table>
<Caption>
EXHIBIT
NO. EXHIBIT
- ------- -------

3.1 Certificate of Incorporation of Westlake as filed with the
Delaware Secretary of State on September 3, 1991.
3.2 Certificate of Amendment to the Certificate of Incorporation
of Westlake as filed with the Delaware Secretary of State on
June 28, 1993.
3.3 Certificate of Amendment of the Certificate of Incorporation
of Westlake as filed with the Delaware Secretary of State on
November 4, 1993.
3.4 Certificate of Amendment of the Certificate of Incorporation
of Westlake as filed with the Delaware Secretary of State on
August 14, 1997.
3.5 Bylaws of Westlake.
3.6 Certificate of Incorporation of Geismar Holdings, Inc. as
filed with the Delaware Secretary of State on December 26,
2002.
3.7 By-Laws of Geismar Holdings, Inc.
3.8 Certificate of Limited Partnership of Geismar Vinyls Company
LP as filed with the Delaware Secretary of State on January
2, 2003.
3.9 Certificate of Amendment to the Certificate of Limited
Partnership of Geismar Vinyls Company LP as filed with the
Delaware Secretary of State on January 8, 2003.
3.10 Agreement of Limited Partnership of Geismar Vinyls Company
LP.
3.11 Certificate of Incorporation of Gramercy Chlor-Alkali
Corporation as filed with the Delaware Secretary of State on
December 13, 2000.
3.12 By-Laws of Gramercy Chlor-Alkali Corporation.
3.13 Certificate of Incorporation of GVGP, Inc. as filed with the
Delaware Secretary of State on December 26, 2002.
3.14 By-Laws of GVGP, Inc.
3.15 Certificate of Incorporation of North American Pipe
Corporation as filed with the Delaware Secretary of State on
May 29, 1992.
3.16 Certificate of Amendment to the Certificate of Incorporation
of North American Pipe Corporation as filed with the
Delaware Secretary of State on July 7, 1992.
3.17 Bylaws of North American Pipe Corporation.
3.18 Certificate of Incorporation of North American Profiles,
Inc. as filed with the Delaware Secretary of State on March
27, 2000.
3.19 Certificate of Amendment to the Certificate of Incorporation
of North American Profiles, Inc. as filed with the Delaware
Secretary of State on August 1, 2000.
3.20 By-Laws of North American Profiles, Inc.
3.21 Certificate of Incorporation of Van Buren Pipe Corporation
as filed with the Delaware Secretary of State on May 25,
1994.
3.22 Certificate of Amendment to the Certificate of Incorporation
of Van Buren Pipe Corporation as filed with the Delaware
Secretary of State on December 13, 1995.
</Table>

II-3

<Table>
<Caption>
EXHIBIT
NO. EXHIBIT
- ------- -------

3.23 By-Laws of Van Buren Pipe Corporation.
3.24 Certificate of Incorporation of Westech Building Products,
Inc. as filed with the Delaware Secretary of State on May
25, 1994.
3.25 Certificate of Amendment to the Certificate of Incorporation
of Westech Building Products, Inc. as filed with the
Delaware Secretary of State on May 6, 1996.
3.26 By-Laws of Westech Building Products, Inc.
3.27 Certificate of Incorporation of Westlake Chemical Holdings,
Inc. as filed with the Delaware Secretary of State on
December 13, 2000.
3.28 By-Laws of Westlake Chemical Holdings, Inc.
3.29 Certificate of Incorporation of Westlake Chemical
Investments, Inc. as filed with the Delaware Secretary of
State on December 13, 2000.
3.30 By-Laws of Westlake Chemical Investments, Inc.
3.31 Certificate of Incorporation of Westlake Chemical
Manufacturing, Inc. as filed with the Delaware Secretary of
State on December 13, 2000.
3.32 By-Laws of Westlake Chemical Manufacturing, Inc.
3.33 Certificate of Incorporation of Westlake Chemical Products,
Inc. as filed with the Delaware Secretary of State on
December 13, 2000.
3.34 By-Laws of Westlake Chemical Products, Inc.
3.35 Certificate of Incorporation of Westlake Development
Corporation as filed with the Delaware Secretary of State on
December 13, 2000.
3.36 By-Laws of Westlake Development Corporation.
3.37 Certificate of Incorporation of Westlake Management
Services, Inc. as filed with the Delaware Secretary of State
on November 5, 1990.
3.38 Bylaws of Westlake Management Services, Inc.
3.39 Certificate of Incorporation of Westlake Olefins Corporation
as filed with the Delaware Secretary of State on May 15,
1989.
3.40 Certificate of Amendment to the Certificate of Incorporation
of Westlake Olefins Corporation as filed with the Delaware
Secretary of State on July 20, 1992.
3.41 By-Laws of Westlake Olefins Corporation.
3.42 Articles of Incorporation of Westlake Overseas Corporation
as filed with the Office of Lieutenant Governor of the U.S.
Virgin Islands on May 10, 1988.
3.43 By-Laws of Westlake Overseas Corporation.
3.44 Certificate of Limited Partnership of Westlake
Petrochemicals LP as filed with the Delaware Secretary of
State on December 20, 2000.
3.45 Certificate of Amendment to the Certificate of Limited
Partnership of Westlake Petrochemicals LP as filed with the
Delaware Secretary of State on December 28, 2000.
3.46 Agreement of Limited Partnership of Westlake Petrochemicals
LP.
3.47 Certificate of Limited Partnership of Westlake Polymers LP
as filed with the Delaware Secretary of State on December
20, 2000.
3.48 Agreement of Limited Partnership of Westlake Polymers LP.
3.49 Certificate of Incorporation of Westlake PVC Corporation as
filed with the Delaware Secretary of State on August 19,
1991.
3.50 Certificate of Amendment to the Certificate of Incorporation
of Westlake PVC Corporation as filed with the Delaware
Secretary of State on August 20, 1991.
3.51 Bylaws of Westlake PVC Corporation.
3.52 Certificate of Incorporation of Westlake Resources
Corporation as filed with the Delaware Secretary of State on
October 23, 1990.
3.53 Bylaws of Westlake Resources Corporation.
3.54 Certificate of Limited Partnership of Westlake Styrene LP as
filed with the Delaware Secretary of State on December 20,
2000.
3.55 Agreement of Limited Partnership of Westlake Styrene LP.
</Table>

II-4

<Table>
<Caption>
EXHIBIT
NO. EXHIBIT
- ------- -------

3.56 Certificate of Incorporation of Westlake Vinyl Corporation
as filed with the Delaware Secretary of State on June 8,
1990.
3.57 Certificate of Amendment to the Certificate of Incorporation
of Westlake Vinyl Corporation as filed with the Delaware
Secretary of State on October 18, 1993.
3.58 Certificate of Amendment to the Certificate of Incorporation
of Westlake Vinyl Corporation as filed with the Delaware
Secretary of State on November 4, 1993.
3.59 Bylaws of Westlake Vinyl Corporation.
3.60 Certificate of Incorporation of Westlake Vinyls, Inc. as
filed with the Delaware Secretary of State on July 10, 1997.
3.61 Certificate of Amendment to the Certificate of Incorporation
of Westlake Vinyls, Inc. as filed with the Delaware
Secretary of State on September 28, 2001.
3.62 By-Laws of Westlake Vinyls, Inc.
3.63 Certificate of Limited Partnership of WPT LP as filed with
the Delaware Secretary of State on December 20, 2000.
3.64 Agreement of Limited Partnership of WPT LP.
4.1 Indenture dated as of July 31, 2003 by and among Westlake,
the guarantors named therein and JPMorgan Chase Bank, as
trustee, relating to 8 3/4% Senior Notes due 2011.
4.2 Form of 8 3/4% Senior Notes due 2011 (included in Exhibit
4.1).
4.3 Registration Rights Agreement dated as of July 31, 2003 by
and among Westlake, the guarantors named therein, Credit
Suisse First Boston LLC, Banc of America Securities LLC,
Deutsche Bank Securities Inc., J.P. Morgan Securities Inc.,
Citigroup Global Markets Inc., Scotia Capital (USA) Inc.,
Credit Lyonnais Securities (USA) Inc., and CIBC World
Markets Corp. relating to 8 3/4% Senior Notes due 2011.

Westlake and the guarantors are party to long-term debt
instruments under which the total amount of securities
authorized does not exceed 10% of the total assets of
Westlake and its subsidiaries on a consolidated basis.
Pursuant to paragraph 4(iii)(A) of Item 601(b) of Regulation
S-K, Westlake agrees to furnish a copy of such instruments
to the SEC upon request.

5.1* Opinion of Baker Botts L.L.P. as to the legality of the
securities.
10.1 Credit Agreement dated as of July 31, 2003 by and among the
financial institutions party thereto, as lenders, Bank of
America, N.A., as agent, Westlake and certain of its
domestic subsidiaries, as borrowers relating to a $200
million senior secured revolving credit facility.
10.2 Credit Agreement dated as of July 31, 2003 by and among
Westlake, as borrower, certain of its subsidiaries, as
guarantors, Bank of America, N.A., as agent and the lenders
party thereto relating to a $120 million senior secured term
loan.
10.3 Westlake Group Performance Unit Plan effective January 1,
1991.
10.4 Employment agreement with Warren Wilder dated December 10,
1999.
10.5 First Amended and Restated Federal Income Tax Allocation
Agreement dated as of May 10, 2002 (the "Tax Allocation
Agreement") among Gulf Polymer & Petrochemical, Inc.,
Westlake and certain subsidiaries of Westlake.
10.6 Amendment to Tax Allocation Agreement dated as of August 1,
2003 among Gulf Polymer & Petrochemical, Inc., Westlake and
certain subsidiaries of Westlake.
12.1 Computation of Ratio of Earnings to Fixed Charges.
21 Subsidiaries of the Registrant.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2* Consent of Baker Botts L.L.P. (included in Exhibit 5.1).
24.1 Powers of Attorney (included on the signature pages of the
Registration Statement).
25.1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of the Trustee for 8 3/4% Senior Notes due
2011, on Form T-1.
99.1 Form of Letter to Depository Trust Company Participants.
99.2 Form of Letter to Clients.
</Table>

II-5

<Table>
<Caption>
EXHIBIT
NO. EXHIBIT
- ------- -------

99.3 Form of Notice of Guaranteed Delivery.
99.4 Form of Letter of Transmittal.
</Table>

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

* To be filed by amendment.

(b) Financial Statement Schedules

Westlake Chemical Corporation -- Schedule II -- Valuation and Qualifying
Accounts (included on page F-62 of the prospectus filed pursuant to Part I of
this registration statement).

ITEM 22. UNDERTAKINGS

(a) The undersigned registrants hereby undertake:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to:

(i) include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act if,
in the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;

(iii) include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrants pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of any
registrant pursuant to the foregoing provisions, or otherwise, such registrant
has been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by any registrant of expenses
incurred or paid by a director, officer or controlling person of such registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, such registrant will, unless,

II-6

in the opinion of its counsel, the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

(c) The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.

(d) The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

II-7

SIGNATURES

Pursuant to the requirements of the Securities Act, each of the registrants
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, the State of
Texas, on September 22, 2003.

WESTLAKE CHEMICAL CORPORATION
GEISMAR VINYLS COMPANY LP,
BY GVGP, INC., ITS GENERAL PARTNER
GRAMERCY CHLOR-ALKALI CORPORATION
GVGP, INC.
WESTLAKE CHEMICAL HOLDINGS, INC.
WESTLAKE CHEMICAL INVESTMENTS, INC.
WESTLAKE MANAGEMENT SERVICES, INC.
WESTLAKE OLEFINS CORPORATION
WESTLAKE OVERSEAS CORPORATION
WESTLAKE PETROCHEMICALS LP,
BY WESTLAKE CHEMICAL INVESTMENTS,
INC.,
ITS GENERAL PARTNER
WESTLAKE POLYMERS LP,
BY WESTLAKE CHEMICAL INVESTMENTS,
INC.,
ITS GENERAL PARTNER
WESTLAKE PVC CORPORATION
WESTLAKE RESOURCES CORPORATION
WESTLAKE STYRENE LP,
BY WESTLAKE CHEMICAL HOLDINGS, INC.,
ITS GENERAL PARTNER
WESTLAKE VINYL CORPORATION
WESTLAKE VINYLS, INC.
WPT LP,
BY WESTLAKE CHEMICAL HOLDINGS, INC.,
ITS GENERAL PARTNER

By: /s/ ALBERT CHAO
------------------------------------
Name: Albert Chao
Title: President

GEISMAR HOLDINGS, INC.
WESTLAKE CHEMICAL MANUFACTURING, INC.
WESTLAKE CHEMICAL PRODUCTS, INC.
WESTLAKE DEVELOPMENT CORPORATION

By: /s/ R. MICHAEL LOONEY
------------------------------------
Name: R. Michael Looney
Title: President

II-8

NORTH AMERICAN PIPE CORPORATION
NORTH AMERICAN PROFILES, INC.
VAN BUREN PIPE CORPORATION
WESTECH BUILDING PRODUCTS, INC.

By: /s/ JOHN A. LABUDA
------------------------------------
Name: John A. Labuda
Title: President

POWER OF ATTORNEY

Each person whose signature appears below appoints Albert Chao, Ruth
Dreessen, Tai-li Keng and Louis Trenchard III, and each of them, severally, as
his or her true and lawful attorney or attorneys-in-fact and agent or agents,
each of whom shall be authorized to act with or without the other, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead in his or her capacity as a director or officer or both, as the
case may be, of the respective registrant named below, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and all documents or instruments necessary or appropriate to enable such
registrant to comply with the Securities Act of 1933, as amended, and to file
the same with the Securities and Exchange Commission, with full power and
authority to each of said attorneys-in-fact and agents to do and perform in the
name and on behalf of each such director or officer, or both, as the case may
be, each and every act whatsoever that is necessary, appropriate or advisable in
connection with any or all of the above-described matters and to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them or their
substitutes, may lawfully do or cause to be done by virtue hereof.

WESTLAKE CHEMICAL CORPORATION

Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
and on September 22, 2003.

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

/s/ ALBERT CHAO President and Director (Principal Executive
- -------------------------------------- Officer)
Albert Chao

/s/ RUTH I. DREESSEN Senior Vice President and Chief Financial Officer
- -------------------------------------- (Principal Financial Officer)
Ruth I. Dreessen

/s/ GEORGE J. MANGIERI Vice President and Controller (Principal
- -------------------------------------- Accounting Officer)
George J. Mangieri

/s/ T.T. CHAO Chairman of the Board
- --------------------------------------
T.T. Chao

/s/ JAMES CHAO Vice Chairman of the Board
- --------------------------------------
James Chao

/s/ DOROTHY C. JENKINS Director
- --------------------------------------
Dorothy C. Jenkins
</Table>

II-9

GEISMAR HOLDINGS, INC.
WESTLAKE CHEMICAL MANUFACTURING, INC.
WESTLAKE CHEMICAL PRODUCTS, INC.
WESTLAKE DEVELOPMENT CORPORATION

Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
and on September 22, 2003.

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

/s/ R. MICHAEL LOONEY President and Director
- --------------------------------------
R. Michael Looney

/s/ HAROLD F. KALBACH, JR. Director
- --------------------------------------
Harold F. Kalbach, Jr.

/s/ GREG F. STROBL Director
- --------------------------------------
Greg F. Strobl
</Table>

GEISMAR VINYLS COMPANY LP, BY GVGP, INC., ITS GENERAL PARTNER
GRAMERCY CHLOR-ALKALI CORPORATION
GVGP, INC.
WESTLAKE CHEMICAL HOLDINGS, INC.
WESTLAKE CHEMICAL INVESTMENTS, INC.
WESTLAKE MANAGEMENT SERVICES, INC.
WESTLAKE OLEFINS CORPORATION
WESTLAKE PETROCHEMICALS LP, BY WESTLAKE CHEMICAL INVESTMENTS, INC.,
ITS GENERAL PARTNER
WESTLAKE POLYMERS LP, BY WESTLAKE CHEMICAL INVESTMENTS, INC.,
ITS GENERAL PARTNER
WESTLAKE PVC CORPORATION
WESTLAKE RESOURCES CORPORATION
WESTLAKE STYRENE LP, BY WESTLAKE CHEMICAL HOLDINGS, INC.,
ITS GENERAL PARTNER
WESTLAKE VINYL CORPORATION
WESTLAKE VINYLS, INC.
WPT LP, BY WESTLAKE CHEMICAL HOLDINGS, INC., ITS GENERAL PARTNER

Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
and on September 22, 2003.

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

/s/ ALBERT CHAO President and Director
- --------------------------------------
Albert Chao
</Table>

II-10

NORTH AMERICAN PIPE CORPORATION
NORTH AMERICAN PROFILES, INC.
VAN BUREN PIPE CORPORATION
WESTECH BUILDING PRODUCTS, INC.

Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
and on September 22, 2003.

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

/s/ JOHN A. LABUDA President and Director
- --------------------------------------
John A. Labuda
</Table>

WESTLAKE OVERSEAS CORPORATION

Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
and on September 22, 2003.

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

/s/ ALBERT CHAO President and Director
- --------------------------------------
Albert Chao

/s/ JOHN A. LABUDA Director
- --------------------------------------
John A. Labuda

/s/ GABI S. RIVERA Director
- --------------------------------------
Gabi S. Rivera

/s/ MARIA CONOR-FREEMAN Director
- --------------------------------------
Maria Conor-Freeman
</Table>

II-11

INDEX TO EXHIBITS

<Table>
<Caption>
EXHIBIT
NO. EXHIBIT
- ------- -------

3.33 Certificate of Incorporation of Westlake Chemical Products,
Inc. as filed with the Delaware Secretary of State on
December 13, 2000.
3.34 By-Laws of Westlake Chemical Products, Inc.
3.35 Certificate of Incorporation of Westlake Development
Corporation as filed with the Delaware Secretary of State on
December 13, 2000.
3.36 By-Laws of Westlake Development Corporation.
3.37 Certificate of Incorporation of Westlake Management
Services, Inc. as filed with the Delaware Secretary of State
on November 5, 1990.
3.38 Bylaws of Westlake Management Services, Inc.
3.39 Certificate of Incorporation of Westlake Olefins Corporation
as filed with the Delaware Secretary of State on May 15,
1989.
3.40 Certificate of Amendment to the Certificate of Incorporation
of Westlake Olefins Corporation as filed with the Delaware
Secretary of State on July 20, 1992.
3.41 By-Laws of Westlake Olefins Corporation.
3.42 Articles of Incorporation of Westlake Overseas Corporation
as filed with the Office of Lieutenant Governor of the U.S.
Virgin Islands on May 10, 1988.
3.43 By-Laws of Westlake Overseas Corporation.
3.44 Certificate of Limited Partnership of Westlake
Petrochemicals LP as filed with the Delaware Secretary of
State on December 20, 2000.
3.45 Certificate of Amendment to the Certificate of Limited
Partnership of Westlake Petrochemicals LP as filed with the
Delaware Secretary of State on December 28, 2000.
3.46 Agreement of Limited Partnership of Westlake Petrochemicals
LP.
3.47 Certificate of Limited Partnership of Westlake Polymers LP
as filed with the Delaware Secretary of State on December
20, 2000.
3.48 Agreement of Limited Partnership of Westlake Polymers LP.
3.49 Certificate of Incorporation of Westlake PVC Corporation as
filed with the Delaware Secretary of State on August 19,
1991.
3.50 Certificate of Amendment to the Certificate of Incorporation
of Westlake PVC Corporation as filed with the Delaware
Secretary of State on August 20, 1991.
3.51 Bylaws of Westlake PVC Corporation.
3.52 Certificate of Incorporation of Westlake Resources
Corporation as filed with the Delaware Secretary of State on
October 23, 1990.
3.53 Bylaws of Westlake Resources Corporation.
3.54 Certificate of Limited Partnership of Westlake Styrene LP as
filed with the Delaware Secretary of State on December 20,
2000.
3.55 Agreement of Limited Partnership of Westlake Styrene LP.
3.56 Certificate of Incorporation of Westlake Vinyl Corporation
as filed with the Delaware Secretary of State on June 8,
1990.
3.57 Certificate of Amendment to the Certificate of Incorporation
of Westlake Vinyl Corporation as filed with the Delaware
Secretary of State on October 18, 1993.
3.58 Certificate of Amendment to the Certificate of Incorporation
of Westlake Vinyl Corporation as filed with the Delaware
Secretary of State on November 4, 1993.
3.59 Bylaws of Westlake Vinyl Corporation.
3.60 Certificate of Incorporation of Westlake Vinyls, Inc. as
filed with the Delaware Secretary of State on July 10, 1997.
3.61 Certificate of Amendment to the Certificate of Incorporation
of Westlake Vinyls, Inc. as filed with the Delaware
Secretary of State on September 28, 2001.
3.62 By-Laws of Westlake Vinyls, Inc.
3.63 Certificate of Limited Partnership of WPT LP as filed with
the Delaware Secretary of State on December 20, 2000.
3.64 Agreement of Limited Partnership of WPT LP.
4.1 Indenture dated as of July 31, 2003 by and among Westlake,
the guarantors named therein and JPMorgan Chase Bank, as
trustee, relating to 8 3/4% Senior Notes due 2011.
4.2 Form of 8 3/4% Senior Notes due 2011 (included in Exhibit
4.1).
</Table>

<Table>
<Caption>
EXHIBIT
NO. EXHIBIT
- ------- -------

4.3 Registration Rights Agreement dated as of July 31, 2003 by
and among Westlake, the guarantors named therein, Credit
Suisse First Boston LLC, Banc of America Securities LLC,
Deutsche Bank Securities Inc., J.P. Morgan Securities Inc.,
Citigroup Global Markets Inc., Scotia Capital (USA) Inc.,
Credit Lyonnais Securities (USA) Inc., and CIBC World
Markets Corp. relating to 8 3/4% Senior Notes due 2011.

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

* To be filed by amendment.