Exhibit 10.22
SHELL EPOXY RESINS NEDERLAND B.V.
and
SHELL NEDERLAND CHEMIE B.V.
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FIRST AMENDED AND RESTATED
PERNIS
SITE SERVICES, UTILITIES,
MATERIALS AND FACILITIES
AGREEMENT
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TABLE OF CONTENTS
ARTICLE 1: DEFINITIONS.................................................................................. 1
ARTICLE 2: INTERPRETATIONS.............................................................................. 8
ARTICLE 3: OBJECT AND SCOPE............................................................................. 10
ARTICLE 4: CATEGORIES OF SUMF........................................................................... 11
ARTICLE 5: SUMF CHARGES................................................................................. 11
ARTICLE 6: SUMF CHARGES WITH REFERENCE TO COST.......................................................... 11
ARTICLE 7: PAYMENT TERMS................................................................................ 14
ARTICLE 8: ANNUAL FORECAST; ANNUAL PLAN AND BUDGET; AND CURTAILMENT..................................... 16
ARTICLE 9: LIABILITY AND INDEMNITY...................................................................... 17
ARTICLE 10: TERM AND TERMINATION; REDUCTION OF CAPACITY RESERVATION...................................... 21
ARTICLE 11: INTELLECTUAL PROPERTY RIGHTS................................................................. 28
ARTICLE 12: CONFIDENTIALITY.............................................................................. 28
ARTICLE 13: ADDITIONAL SUMF AND CAPITAL IMPROVEMENTS TO SUMF ASSETS...................................... 30
ARTICLE 14: DAMAGE TO SUMF ASSETS........................................................................ 31
ARTICLE 15: METERING OF SUPPLY, CONSUMPTION AND DELIVERY................................................. 31
ARTICLE 16: JOINT OPERATING COMMITTEE.................................................................... 32
ARTICLE 17: MISCELLANEOUS................................................................................ 32
ARTICLE 18: FORCE MAJEURE................................................................................ 33
ARTICLE 19: DISPUTE RESOLUTION........................................................................... 34
ARTICLE 20: FURTHER ASSURANCE............................................................................ 35
ARTICLE 21: COSTS AND EXPENSES........................................................................... 35
ARTICLE 22: ASSIGNMENT AND DELEGATION.................................................................... 35
ARTICLE 23: SEVERABILITY................................................................................. 36
ARTICLE 24: NO AGENCY OR PARTNERSHIP..................................................................... 36
ARTICLE 25: REMEDIES AND WAIVER.......................................................................... 37
ARTICLE 26: ENTIRE AGREEMENT AND VARIATION............................................................... 37
ARTICLE 27: NOTICES...................................................................................... 37
ARTICLE 28: GOVERNING LAW................................................................................ 38
ARTICLE 29: LANGUAGE..................................................................................... 39
ARTICLE 30: COUNTERPARTS................................................................................. 39
SCHEDULE 1: INFORMATION..................................................................................
SCHEDULE 2: ITEMS OF SUMF................................................................................
SCHEDULE 3: SUMMARY OF SUPPLIER'S ACCOUNTING PRACTICES...................................................
SCHEDULE 4: CURTAILMENT PROCEDURES.......................................................................
SCHEDULE 5: JOINT OPERATING COMMITTEE AND STEERING COMMITTEE.............................................
SCHEDULE 6: ALLOCATION KEYS..............................................................................
SCHEDULE 7: BUDGET.......................................................................................
FIRST AMENDED AND RESTATED PERNIS SITE SERVICES, UTILITIES,
MATERIALS AND FACILITIES AGREEMENT
THIS FIRST AMENDED AND RESTATED AGREEMENT made the 1st day of November, 2000
BETWEEN:
1. SHELL EPOXY RESINS NEDERLAND B.V., a company incorporated under the laws of
The Netherlands with its registered office at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (the "Purchaser"); and
2. SHELL NEDERLAND CHEMIE B.V., a company incorporated under the laws of The
Netherlands with its registered office at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (the "Supplier").
WHEREAS
(A) The Supplier or Affiliates of the Supplier operate the Site;
(B) The Purchaser owns the Plant;
(C) The Parties have entered into a Site Services, Utilities, Materials and
Facilities Agreement (the "SUMF Agreement") dated 29th October, 1999 for
the supply and purchase of certain SUMF Items in connection with such
operations and assets;
(D) Shell Petroleum N.V., an Affiliate of the Supplier, has on September 11,
2000 entered into a Sale Agreement with Shell Epoxy Resins, Inc. ("SER"),
pursuant to which it is selling to SER its interest in the shares of Shell
Epoxy Resins Holdings B.V., the parent company of the Purchaser; and
(E) In connection with the closing of such sale transaction, the Parties want
to amend and restate the SUMF Agreement as set forth below:
NOW, THEREFORE, the Parties agree as follows:
ARTICLE 1: DEFINITIONS
In this Agreement and the Schedules hereto:
"AFFILIATE" means in relation to the Supplier, N.V. Koninklijke
Nederlandsche Petroleum Maatschappij, The "Shell" Transport and Trading
Company, p.l.c. (together the "Parent Companies") or any entity other than
the Parties which is directly or indirectly affiliated with either or both
of the Parent Companies.
In relation to the Purchaser, "Affiliate" means Shell Epoxy Resins Holdings
B.V. and any entity other than the Parties which is directly or indirectly
affiliated with that company.
In relation to any Third Party successors of the Parties, "Affiliate" means
any entity which is directly or indirectly affiliated with that Third Party
successor.
For the purposes of this definition, a particular entity is:
(i) directly affiliated with another entity or entities if the latter
hold(s) or otherwise control(s) by proxy or agreement shares or other
ownership interests carrying more than fifty percent (50%) of the
votes exercisable at a general shareholders meeting (or its
equivalent) of the entity in question; and
(ii) indirectly affiliated with an entity or entities (the "parent or
parents") if a series of entities can be specified, beginning with
their parent or parents and ending with the particular entity, so
related that each entity or entities in the series, except the parent
or parents, is directly affiliated with one or more of the entities
earlier in the series;
Notwithstanding the foregoing, none of the portfolio companies of Apollo
Management IV, L.P. or its affiliates other than Shell Epoxy Resins, Inc.
and its subsidiaries shall be deemed to be an Affiliate of Shell Epoxy
Resins, Inc. or any of its subsidiaries.
"AGREEMENT" means this First Amended and Restated Pernis Site Services,
Utilities, Materials and Facilities Agreement, including its Schedules and
attachments, and any amendments hereto to which the Parties may consent
from time to time;
"ANNUAL PLAN AND BUDGET" means the annual plan and budget approved under
ARTICLE 8. The Annual Plan and Budget for the First Operating Year is the
relevant part of the Annual Plan and Budget set out in SCHEDULE 2.
"BANKRUPTCY EVENT" means, in relation to any Party, (i) the making of a
general assignment for the benefit of creditors by such Party; or (ii) the
entering into of any arrangement or composition with creditors (other than
for the purposes of a solvent reconstruction or amalgamation); or (iii) the
institution by such Party of proceedings (a) seeking to adjudicate such
Party as bankrupt or insolvent or seeking protection or relief from
creditors, or (b) seeking liquidation, winding up, or rearrangement,
reorganisation or adjustment of such Party or its debts (other than for
purposes of a solvent reconstruction or amalgamation), or (c) seeking the
entry of an order for the appointment of a receiver, trustee or other
similar official for such Party or for all or a substantial part of such
Party's assets; or (iv) the institution of any proceeding of the type
described in (iii) above against such Party;
"BUSINESS DAY" means any day of the week other than Saturday, Sunday or a
public holiday at the location of the Plant;
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"COMMERCIALLY REASONABLE" when used in the context of efforts to be taken
means efforts which would ordinarily be taken by a business person in the
applicable industry were he in the position under this Agreement of being
the supplier of SUMF Items or the owner of the Plant, whichever shall be
the relevant case. Such efforts shall only be taken at the sole cost and
request of the Party entitled to request or require "commercially
reasonable" efforts ("the Requiring Party") provided however, that the
Party who undertakes such efforts shall not be (i) obligated to interfere
with its own business activities or plans, nor (ii) required to employ
additional employees in order to accomplish such matters, nor (iii)
required to expend any of its own funds to accomplish such request without
the right to reimbursement from the Requiring Party;
"CONFIDENTIAL RECORD" means, without limitation, any publications, printed
matter, manuals, reports, letters, telexes, drawings, computer programs,
photographs, films, video, tape, diskette, CD-ROM and other information
carriers or media conveying information and any other material containing
confidential information;
"DEFAULT RATE" means a percentage equal to the base lending rate of the
bank specified in Schedule 1 plus three percent (3%) p.a.;
"DELIVERY POINT(S)" means the location(s) specified in the SCHEDULES to
which each SUMF Item will be delivered and at which title and risk passes
from the Supplier to the Purchaser for each SUMF Item;
"DIRECT SITE COSTS" means the direct fixed costs (without ▇▇▇▇-up or profit
factor, except in accordance with ARTICLE 6.1(F)) incurred at the Site by
the Supplier in providing SUMF but which do not vary with consumption,
usage or production. Fixed costs include personnel costs (which include,
but are not limited to, wages, associated benefits, applicable taxes and
allocated pension costs) for the personnel directly involved in the
provision of SUMF Items and the costs of any SUMF Items procured by the
Supplier for the Purchaser from a Third Party in accordance with this
Agreement.
If costs, including personnel costs, are incurred at the Site partly in
connection with providing SUMF and partly in connection with other
activities, an allocation of such costs shall be included in Direct Site
Costs.
For the avoidance of doubt, Direct Site Costs shall not include charges for
the depreciation or amortisation of SUMF Assets or any other assets or any
other costs that the Supplier or any of its Affiliates is required to bear
under the Transaction Documents (other than the Pernis Agreements) or the
IPTLA. Costs that the Supplier or any of its Affiliates is required to bear
under this Agreement or any other Pernis Agreement shall be borne in
accordance with the terms hereof and thereof. The terms of this definition
shall not be deemed to modify any provision of any Transaction Document
other than this Agreement, including any express payment or reimbursement
obligation of the Purchaser to Supplier under any Transaction Document
other than this Agreement;
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"DISPUTE" means any dispute or difference which arises between the
Parties in connection with or arising out of this Agreement (including,
without limitation, any dispute as to the existence, termination or
validity of this Agreement or any provision of it);
"EFFECTIVE DATE" means November 1, 2000;
"ENVIRONMENTAL AGREEMENT" means the Non-US Environmental Agreement
dated as of the Effective Date by and between Shell Petroleum N.V. and
SER;
"ENVIRONMENTAL LAW" means any applicable law relating to Environmental
Matters;
"ENVIRONMENTAL LOSS OR DAMAGE" means any Loss or Damage relating to the
infringement on or after the Effective Date of an Environmental Law
and/or any other Environmental Matter being the basis for any claim or
possible claim; (i) by governmental authorities for enforcement, fines,
cleanup, removal, response, remediation, or other actions or damages
pursuant to any applicable Environmental Law; or (ii) by any third
person, including the Parties, seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief or
otherwise giving rise to Loss or Damage;
"ENVIRONMENTAL MATTERS" means; (i) the protection of the environment,
worker health and safety and/or the public welfare from actual or
potential exposure (or the effects of exposure) to any actual or
potential release, discharge, disposal or emission (whether past or
present) of any hazardous substance or waste; (ii) the manufacture,
processing, distribution, use, treatment, labelling, storage, disposal,
transport or handling of any hazardous substance or waste, or (iii)
soil or groundwater contamination, air pollution or surface water
pollution or other actual or threatened impact on the environment,
worker health and safety or public welfare;
"ENVIRONMENTAL PROTECTION SYSTEM" means any environmental protection
system used by Supplier in connection with the provision of the SUMF
Items, including without limitation, biotreater, waste water treatment
plant, and all pipes, drains, channels, conduits, sumps and other
items, plant or machinery connected with or associated with such
system;
"FINANCIAL REPORTING ACCOUNTS" means those books and records maintained
by the Supplier for financial reporting to the Supplier's parent
company(ies) or corporate headquarters, which shall be maintained in
accordance with generally accepted accounting principles and which
shall be applied on a consistent basis;
"FIRM CAPACITY RESERVATION" means the maximum aggregate volume of a
SUMF Item to be supplied to the Resins and Versatics businesses, both
owned by Purchaser as of the Effective Date, under this Agreement as
specified in SCHEDULE 2;
"FIRST OPERATING YEAR" means the period from the Effective Date until
the following 31st December;
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"FORCE MAJEURE" has the meaning given to this term in ARTICLE 18.4;
"GROSS NEGLIGENCE" means a failure to perform a duty of care in
reckless disregard of the reasonably foreseeable consequences (as
distinguished from a mere failure to exercise ordinary care) which
affects the life or property of another;
"HSE" means health, safety and/or environment;
"IPTLA" or "INTELLECTUAL PROPERTY TRANSFER AND LICENCE AGREEMENT" means
the Agreement dated as of the Effective Date between Shell
International Research Maatschappij B.V. and Shell Epoxy Resins
Research B.V. relating to intellectual property transfer and licensing;
"INTEREST RATE" means a percentage equal to the base lending rate of
the bank specified in SCHEDULE 1 plus one point five percent (1.5%)
p.a.;
"INVOICE DISPUTE" means a Dispute relating to an invoice for SUMF
Charges;
"JOINT OPERATING COMMITTEE" means the operating committee to be formed
of the Purchaser's Representative and the Supplier's Representative
which shall have the functions set out in SCHEDULE 5;
"LEGAL REQUIREMENTS" means all applicable European Union laws and
regulations and national and local laws and regulations;
"LIABILITY" includes all and any claims, liabilities, costs, damages,
expenses, fines and penalties;
"LT SUMF" or "LONG TERM SUMF" has the meaning given to this term in
ARTICLE 4.3;
"LOSS OR DAMAGE" means any loss or damage or injury of whatever nature,
including without limitation, personal injury, disease and death;
"METER" means the meter or other appropriate measuring device located
at or near the Delivery Point for the relevant SUMF Item;
"OPERATING AGREEMENT" means the First Amended and Restated Pernis
Operating and Maintenance Services Agreement, dated as of the Effective
Date between the Purchaser, as owner, and the Supplier, as the
operator.
"OVERHEADS" means, without duplication of any Direct Site Cost, in
relation to each SUMF Item, an equitable allocation of the fixed costs
incurred at the Site related to management and operation of the Site
that are not specifically attributable to a certain plant at the Site
(without ▇▇▇▇-up or profit factor, except in accordance with Article
6.1(F)), including the following (where they are not provided as
separate SUMF Items):
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Site management and general services; fire fighting, security and
protection of HSE; use of the medical department; office services,
accommodation and catering; and taxes;
Overheads shall not include any allocated costs of corporate services,
unless incurred for specific services in the same manner as Third Party
services, such as tax, legal or other services and shall not include
the fees paid to the Supplier's parent company(ies) or any other
Affiliate, division, business unit or headquarters as a share of
corporate overhead. For the avoidance of doubt, Overheads shall not
include charges for the depreciation or amortization of SUMF Assets and
any other costs that Supplier or any of its Affiliates is required to
bear under the Transaction Documents (other than the Pernis Agreements)
or the IPTLA. Costs that the Supplier or any of its Affiliates is
required to bear under this Agreement or any other Pernis Agreement
shall be borne in accordance with the terms hereof and thereof. The
terms of this definition shall not be deemed to modify any provision of
any Transaction Document other than this Agreement, including any
express payment or reimbursement obligation of the Purchaser to
Supplier under any Transaction Document other than this Agreement;
"PARTY" or "PARTIES" means the Supplier and/or the Purchaser as the
case requires, their successors and permitted assigns;
"PERNIS AGREEMENTS" means this Agreement, the Pernis Lease, the First
Amended and Restated Pernis Site Services, Utilities, Materials and
Facilities Agreements between the Parties and between SNR and the
Purchaser and the First Amended and Restated Pernis Operating and
Maintenance Services Agreements between the Parties and between SNR and
the Purchaser;
"PERNIS LEASE" means the Agreement of Sub-Lease between Purchaser and
SNR dated October 29, 1999, as amended;
"PLANT" means either of the plants described in ATTACHMENT 1 to
SCHEDULE 1 situated at the Site;
"PRE-CONTRACTUAL STATEMENT" means any draft, agreement, undertaking,
representation, warranty, promise, assurance or arrangement of any
nature whatsoever, whether or not in writing, relating to the subject
matter of this Agreement made or given by any person at any time prior
to the date of this Agreement other than the Transaction Documents and
the IPTLA;
"PROPERTY" means, in relation to each Party, the plants, buildings and
other improvements, land and/or other real property interests,
fixtures, equipment, inventory, finished product, vehicles and other
tangible personal property interests owned or leased by a Party that
are now or in the future located within the Site or, in relation to the
Supplier, elsewhere if used to provide SUMF;
"PURCHASER'S REPRESENTATIVE" means the person named as being the
Purchaser's representative in SCHEDULE 1 and any successor to that
position;
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"REASONABLE ACTIONS" when used in the context of actions to be taken,
means efforts that would ordinarily be taken by a business person in
the applicable industry were he in the position under this Agreement of
being the supplier of SUMF Items or the owner of the Plant, whichever
shall be relevant;
"RESINS" means the Purchaser's assets at the Site which at the
Effective Date are, or at any time thereafter shall be, operated by the
Purchaser. For the avoidance of doubt, this definition excludes assets
for the production of demineralised water and assets for the production
of certain solvents (COF-1), which are owned by the Supplier or an
Affiliate of the Supplier;
"SER" means Shell Epoxy Resins, Inc.
"SHELL'S HSE AND TECHNICAL STANDARDS" means those standards as defined
and applied by the Royal Dutch/Shell group of companies for services
and operations hereunder at the location of the Site;
"ST SUMF" or "SHORT TERM SUMF" has the meaning given to this term in
Article 4.1;
"SITE" means the site described in SCHEDULE 1;
"SNR" means Shell Nederland Raffinaderij B.V.;
"SOLE SUPPLIER SUMF" is referred to in ARTICLE 4.2;
"STEERING COMMITTEE" means a steering committee consisting of senior
representatives of the Purchaser and the Supplier which has
responsibilities beyond the daily operation of the Plant. The Steering
Committee shall discuss any matters of a general nature and any matters
which are fundamental to the performance of this Agreement pursuant to
its terms;
"SUMF" means the site services, utilities, materials and facilities to
be supplied under this Agreement;
"SUMF ASSETS" means those assets of the Supplier directly used in the
provision of SUMF;
"SUMF CHARGE(S)" or "Charge(s)" means the charge(s) to be paid by the
Purchaser to the Supplier for each SUMF Item in accordance with ARTICLE
5 and ARTICLE 6;
"SUMF ITEM" or "ITEM OF SUMF" means any part of SUMF;
"SUPPLIER'S REPRESENTATIVE" means the person named as being the
Supplier's Representative in SCHEDULE 1 and any successor to that
position;
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"THIRD PARTY" means any person or company other than the Supplier, the
Purchaser or their respective Affiliates;
"TRANSACTION DOCUMENTS" means:
(i) that certain Sale Agreement dated September 11, 2000 by and
between Shell Petroleum N.V. and SER and all documents executed
in connection therewith, including the following:
(ii) the Pernis Lease;
(iii) this Agreement, the First Amended and Restated Pernis Site
Services, Utilities, Materials and Facilities Agreements and the
First Amended and Restated Pernis Operating and Maintenance
Services Agreements each of which is between the Parties or
between SNR and the Purchaser;
(iv) the Environmental Agreement; and
(v) other agreements between the Purchaser or any of its Affiliates
and the Supplier or any of its Affiliates relating to the Plant
or the Site, or any part thereof.
"USER" means any company, entity, division, or business unit (including
divisions and business units of the Supplier and its Affiliates) to
which SUMF or its equivalent is furnished by the Supplier at the Site;
"VARIABLE COSTS" means those operating costs incurred at the Site by
the Supplier in providing SUMF which vary primarily based on
consumption, usage or production and which are reconcilable with the
cost accounting system of the Supplier existing as of the Effective
Date and as from time to time modified by the Supplier (if applied to
the entire Site), including the costs of air, cooling water,
electricity, fuel, nitrogen, process materials, steam and applicable
taxes, but not depreciation;
"VERSATICS" means the Purchaser's assets at the Site which at the
Effective Date are, or at any time thereafter shall be, operated by the
Supplier pursuant to the Operating Agreement; and
"WILFUL MISCONDUCT" means an intentional act or omission which is in
disregard of (a) a known risk or a risk so obvious that it cannot be
said one were truly unaware of it and (b) a risk so great that it is
highly probable that harm will follow.
ARTICLE 2: INTERPRETATIONS
2.1 In this Agreement, unless otherwise specified:
(A) references to Articles and Schedules are to Articles of, and
Schedules to, this Agreement;
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(B) use of any gender includes the other genders;
(C) references to a "company" shall be construed so as to include
any company, corporation or other body corporate, wherever and
however incorporated or established;
(D) references to a "person" shall be construed so as to include any
individual, firm, company, government, state or agency of a
state, local or municipal authority or government body or any
joint venture, association or partnership (whether or not having
separate legal personality);
(E) references to "USD", "NLG", and "EURO" are to United States
Dollars, Dutch Guilders and the single currency of the European
Union, respectively;
(F) any reference to a "day" (including within the phrase "Business
Day") shall mean a period of 24 hours running from midnight to
midnight;
(G) a reference to any other document referred to in this Agreement
is a reference to that other document as amended, varied,
novated or supplemented at any time;
(H) where a word or phrase is given a particular meaning, other
parts of speech and grammatical forms of that word or phrase
have corresponding meanings;
(I) references to the Purchaser shall be deemed to include its
successors and assigns and references to the Supplier shall be
deemed to include its successors and assigns;
(J) a reference to this "Agreement" or any other agreement or
document shall be construed as a reference to it as amended,
modified or novated from time to time.
2.2 The table of contents and headings in this Agreement are inserted for
convenience only and shall not be taken into consideration in the
interpretation or construction of this Agreement.
2.3 In the event of a conflict between the terms and conditions set out in
the main body of this Agreement and any of the Schedules or
attachments, the relevant Schedule or attachment shall prevail, in
relation to that Schedule, unless expressly stated otherwise in this
Agreement.
2.4 In the event of any inconsistency between the provisions of this
Agreement and the Intellectual Property Transfer and Licensing
Agreement, the terms of the Intellectual Property Transfer and
Licensing Agreement shall prevail.
2.5 Purchaser and Supplier acknowledge that (notwithstanding any provision
to the contrary in this Agreement), the provisions of Clause 10.3 of
the Environmental Agreement
9
between Shell Petroleum N.V. and Shell Epoxy Resins, Inc. for the Non-
U.S. properties dated the date hereof (the "Environmental Agreement")
shall apply as between any Seller Indemnified Party (as defined in the
Environmental Agreement) and SER Indemnified Party (as defined in the
Environmental Agreement) and any Person (as such term is defined in the
Environmental Agreement) to whom a transfer or assignment is made in
accordance with Clause 11.1 of the Environmental Agreement. Any
obligation or liability of any SER Indemnified Party or Seller
Indemnified Party under this Agreement shall be without prejudice to
the rights, if any, of the relevant party to claim Environmental
Damages (as defined under the Environmental Agreement) under the
Environmental Agreement.
ARTICLE 3: OBJECT AND SCOPE
3.1 Subject to ARTICLE 8.9 and ARTICLE 18, the Supplier agrees to supply to
the Purchaser and the Purchaser agrees to purchase from the Supplier
the SUMF Items described herein under the terms and conditions set out
in this Agreement. Except as otherwise provided in SCHEDULE 2, the
Purchaser shall purchase the amounts of each SUMF Item up to its Firm
Capacity Reservation until termination of the supply of such SUMF Item
in accordance with the provisions of this Agreement or the relevant
Schedule.
3.2 A description and, where appropriate, the technical specifications, the
price, delivery terms, specific exclusions and limitations, if any, on
consumption and supply, and such other details as this Agreement may
require or as the Parties may agree, of each SUMF Item are set out in
SCHEDULE 2.
3.3 Firm Capacity Reservation amounts for each SUMF Item as agreed by the
Parties are set out in SCHEDULE 2 where applicable.
3.4 If the Purchaser or the Supplier subsequently wishes to change the
nature, quantity or type of any SUMF Item provided hereunder, the other
Party shall take reasonable efforts to accommodate such request but
with no obligation to make such change. Article 10.4 provides the
Purchaser's right to reduce its Firm Capacity Reservations for certain
SUMF Items.
3.5 Title to and risk of loss of a SUMF Item shall pass from the Supplier
to the Purchaser at the Delivery Point(s) specified in SCHEDULE 2.
3.6 The Supplier makes no representations or warranties express or implied
with respect to any SUMF Items except as expressly set forth in this
Agreement. No representation or warranty shall be implied under this
Agreement or at law, including but not limited to, any warranty as to
merchantability or any warranty as to fitness for a particular purpose
in relation to any SUMF Item. The Supplier provides no warranty as to
the performance of any computer system, digital device and any
component thereof. The Purchaser acknowledges that except as expressly
set forth herein, no representations or warranties are being made
herein and releases and relieves the Supplier from and hereby waives
any such other representations or warranties.
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3.7 In the performance of their obligations under this Agreement the
Parties shall act in good faith and in substantial compliance with all
applicable laws.
ARTICLE 4: CATEGORIES OF SUMF
4.1 SUMF Items specified in SCHEDULE 2 as "Short Term SUMF" shall be
supplied to the Purchaser by the Supplier on an initial short term
basis upon the terms and for the period stated therein, provided that
such term shall be automatically extended unless either Party elects to
terminate the supply of a particular Short Term SUMF. ARTICLE 10
provides specific termination provisions for Short Term SUMF Items.
4.2 The supply of SUMF Items specified in SCHEDULE 2 as "Sole Supplier
SUMF" may not be terminated by the Purchaser or the Supplier except by
way of a termination of this Agreement as a whole.
4.3 SUMF Items specified in SCHEDULE 2 as "Long Term SUMF" shall be
supplied to the Purchaser by the Supplier on a long term basis. ARTICLE
10 provides specific termination provisions for Long Term SUMF Items.
4.4 Any SUMF Item that is not specified as being either a Short Term SUMF
or a Sole Supplier SUMF shall be a Long Term SUMF.
ARTICLE 5: SUMF CHARGES
5.1 In consideration of the supply of the SUMF Items by the Supplier to the
Purchaser, as provided herein, the Purchaser shall pay the Supplier the
SUMF Charges specified in SCHEDULE 2. In no event shall SUMF Charges
include any costs charged to Purchaser under any other agreement
between the Purchaser and the Supplier or any of the Affiliates of the
Supplier.
5.2 The Purchaser shall be responsible for any existing or future sales
tax, use tax, value added tax, environmental tax or other governmental
charge or tax (other than taxes measured by income) levied or imposed
on the Supplier with respect to any SUMF Items consumed by the
Purchaser. The Purchaser shall also bear any increase in the cost of
providing a SUMF Item which results from a change in law. The charges
to be paid by Purchaser under this ARTICLE 5.2 shall be without
duplication to the charges set forth in the Schedules and ARTICLE 5.1.
ARTICLE 6: SUMF CHARGES WITH REFERENCE TO COST
6.1 Where SUMF Charges are to be determined wholly or partly by reference
to cost the following shall apply:
(A) Except as otherwise provided in this ARTICLE 6 or in SCHEDULE 2,
the Purchaser shall pay:
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(i) its share of Variable Costs for each SUMF Item based on
the Purchaser's actual consumption of such SUMF Item;
(ii) its share of Direct Site Costs for each SUMF Item based
on the fraction equal to the Purchaser's Firm Capacity
Reservation of such SUMF Item compared to the total Site
capacity of such SUMF Item or the other relevant
allocation key or keys specified in SCHEDULE 6;
(iii) its share of Overheads for each SUMF Item without
duplication of Direct Site Costs based on the fraction
equal to the Purchaser's Firm Capacity Reservation of
such SUMF Item compared to the total Site capacity of
such SUMF Item or any other allocation key specified in
SCHEDULE 6; and
(iv) the infrastructure charge specified in SCHEDULE 2.
(B) For the avoidance of doubt, wherever and to the extent the
Supplier enjoys a pension fund contribution holiday, the
Purchaser will share in the benefit of such holiday only until
the date when the Supplier resumes contributions to the pension
fund at which point the pension fund contributions for the
relevant employees shall be included in the Direct Site Costs.
(C) Costs will be ascertained and charged pursuant to the Supplier's
cost accounting practices which the Supplier represents are used
for, or are directly reconcilable with, its Financial Reporting
Accounts. A summary of the Supplier's current accounting
practices for its Financial Reporting Accounts is attached
hereto in SCHEDULE 3. The Supplier may modify its cost
accounting practices for its Financial Reporting Accounts from
time to time in the normal course of business in conformity with
generally accepted accounting principles; but in all events,
after the Supplier has permitted the Purchaser to review, and
has consulted with the Purchaser as to, such modification.
Notwithstanding the foregoing, the Supplier shall not make any
such modification unless (i) it is for a legitimate business
purpose not designed solely to increase SUMF Charges to the
Purchaser or to Users generally and (ii) it does not have a
discriminatory economic effect on the Purchaser relative to
other Users except as may be permitted in this Agreement or as
may be implemented to correct errors. The cost of any component
of SUMF Items procured by Supplier through a Third Party shall
be passed through to Purchaser at Supplier's cost plus an
allocation and charge for any applicable Overheads. The Parties
expressly acknowledge that any dispute pursuant to this ARTICLE
6.1(C) is subject to the provisions of ARTICLE 19.
(D) The Purchaser shall not be responsible for any termination costs
resulting from the Supplier's fixed cost reduction efforts in
response to a reduction or termination of demand by any User
other than the Purchaser except to the extent that the Purchaser
benefits from the reduction efforts, in which case the Purchaser
shall bear its proportionate share of the costs up to but not in
excess of the benefit
12
derived.
Conversely, the Purchaser shall pay the reasonable costs,
including personnel termination costs (including those
actuarially determined) determined in accordance with ARTICLE
10.9, which result from the Supplier's fixed cost reduction
efforts in response (i) to a permanent or long-term reduction by
the Purchaser of a Sole Supplier SUMF Item or a Long Term SUMF
Item or (ii) to the termination of a Short Term SUMF Item for
which the termination rights of the Supplier cannot be exercised
earlier than upon termination of the Operating Agreement (as
provided in the schedules attached to this Agreement) and for
which the Purchaser exercises its right of termination of the
supply of such Short Term SUMF Item prior to the termination of
the Operating Agreement.
(E) The Purchaser shall bear the costs of any redundancy programme
in accordance with ARTICLES 10.8 and 10.9 below required as a
result of any productivity improvement to a particular SUMF Item
in proportion to the reduction of the relevant SUMF Charges to
the Purchaser before and after the productivity improvement as
compared to the reduction of SUMF Charges to all other Users
before and after the productivity improvement; provided however
that such costs to be paid by Purchaser shall not exceed such
reduction in SUMF Charges realized by Purchaser.
(F) If under applicable tax or other laws, the Supplier must charge
a ▇▇▇▇-up or profit factor with respect to any SUMF Charge, or,
alternatively, if a profit factor is imputed under applicable
tax or other laws, the Parties shall, in good faith and with the
view to minimising the financial impact of such ▇▇▇▇-up or
profit factor on the Purchaser, discuss and agree to such
revision to the SUMF Charge as will ensure compliance with the
relevant tax or other laws. Any failure by the Parties to reach
agreement on the revision to be made shall constitute a Dispute.
(G) Unless the Parties agree otherwise in SCHEDULE 1, the Parties
shall keep accurate books and records of their activities
relevant to this Agreement, for at least two (2) years after the
calendar year in question or such longer period as may be
required by law.
(H) To verify the correctness of all invoices issued and payments
made hereunder for the current calendar year and for any of the
two (2) preceding years and/or to verify the implementation of
the Supplier's curtailment procedures, and/or to verify the
other Party's meter readings a Party, upon at least sixty (60)
days prior written notice and at reasonable times and intervals
but not more than once in any calendar year, may require that,
at the requesting Party's cost, an independent public auditor,
being a firm of international repute, performs an audit for such
purposes. Any such audit shall be pursued diligently and
completed no later than ninety (90) days after its commencement.
The Parties shall provide such auditors with the necessary data
and explanations
13
reasonably necessary for the calculation of the SUMF Charges and
the basis therefor.
The requesting Party undertakes to procure that such auditors
are bound by obligations of confidentiality at least as strict
as those set out in ARTICLE 12.
Any report produced by such auditors shall be provided to both
the Purchaser and the Supplier and shall state the results of
the aforementioned verifications. If such report reveals that
errors have been made and that a Party was overcharged or
undercharged by an amount equal to or greater than USD20,000 or
its equivalent in local currency, the report shall state the
nature, amount and consequences of such error(s) together with
such additional information as is reasonably necessary to
explain the genesis of those errors and to enable the Parties to
avoid recurrence thereof.
Any refund of an overpayment or payment of an additional sum
shall be made within 28 days following the provision by the
auditors of their report and shall include interest at the
Interest Rate for the time period commencing when the
overpayment was made or the underpayment amount would otherwise
have been due and ending on the date of any refund or additional
payment in consequence of the audit.
In the event of an overcharge equal to or greater than USD20,000
or its equivalent in local currency the Supplier will reimburse
the Purchaser, if the Purchaser is the requesting Party, for the
audit costs. In the event of an undercharge equal to or greater
than USD20,000 or its equivalent in local currency and such an
undercharge being attributable to an error or errors relating to
metering equipment owned by the Purchaser, the Purchaser shall
reimburse the Supplier, if the Supplier is the requesting Party,
for the audit costs.
Failure to make any requisite payment relating to an overcharge
or undercharge within the 28 days period shall constitute a
Dispute for resolution in accordance with ARTICLE 19.
7.1 The Purchaser shall pay the SUMF Charges in the currency specified in
SCHEDULE 1.
In no event shall either Party be entitled to set off or reduce any
payments due and owing to the other Party under this Agreement by any
amount which the first Party claims are owed to it by the other Party
pursuant to any other agreement between the Parties.
7.2 Unless otherwise set out in the relevant Schedules, the provisions set
out below apply:
(A) The Supplier shall provide the Purchaser with an invoice for
SUMF Charges by the 5th day of each month.
14
(B) For the first two months of every twelve month billing cycle the
amount invoiced shall be the amount budgeted for those months in
the Annual Plan and Budget.
(C) For the next ten months of such twelve month billing cycle the
amount invoiced shall be the actual SUMF Charge for the month
before the preceding month.
(D) The final reconciliation for a twelve month billing cycle shall
be made within 60 days of the end of such cycle. The aggregate
budgeted SUMF Charges for the first two months of the cycle
shall be reconciled against the aggregate actual SUMF Charges
for the eleventh and twelfth months of the cycle and following
such reconciliation the relevant Party shall make an adjusting
payment against an appropriate invoice or credit note within
thirty (30) days of the date of the relevant invoice or credit
note, which credit note or invoice shall include interest
computed at the Interest Rate for the applicable period.
(E) The invoices shall be broken down in sufficient detail to
indicate the SUMF Charges for each SUMF Item supplied during the
period in question. The SUMF Charge for each SUMF Item shall in
turn be broken down in sufficient detail as the Purchaser may
reasonably request and as the Supplier can reasonably provide.
(F) The Purchaser shall pay each invoice on or before the last day
of the month of issue of the relevant invoice. From the due
date, interest will accrue on the undisputed invoice amount at
the Default Rate.
(G) If the Purchaser disagrees with an amount invoiced for SUMF
Charges, the Purchaser shall advise the Supplier in writing
("Invoice Dispute Notice") of the amount disputed within sixty
(60) days of the date of the invoice and the reason why the
Purchaser considers the SUMF Charges not to be properly made.
Subject to ARTICLE 7.2(H), the Purchaser is entitled to defer
payment of the disputed invoice amount if the disagreement
cannot be resolved before the normal due date but the Purchaser
is required to pay timely the undisputed invoice amount. Payment
of the undisputed invoice amount shall not constitute approval
of the entire invoice.
(H) The Parties shall meet to resolve any dispute with respect to an
invoice as expeditiously as possible. The Supplier shall provide
to the Purchaser within thirty (30) days after receipt of the
Invoice Dispute Notice information in detail sufficient to
permit the Purchaser to verify the accuracy of such invoice. The
Purchaser shall either accept the Supplier's response or give
written notice to the Supplier that the Purchaser continues to
question such invoice. Promptly after receipt of such notice,
the Supplier and the Purchaser shall negotiate in good faith
with respect to resolving such question. If the Supplier and the
Purchaser cannot resolve such question in a mutually
satisfactory manner within twenty (20) days after such notice
shall have been given, the question shall promptly be submitted
to a firm of independent public auditors, of international
repute, as determined by
15
mutual agreement between the Supplier and the Purchaser within
another twenty (20) days or, in default of agreement, as chosen
by lot from among four independent public auditors, two of which
shall be selected by the Supplier and two of which shall be
selected by the Purchaser. Such firm will review the applicable
books and records of the Supplier and the Purchaser and make
such other investigations it shall deem necessary to resolve
such question. The costs of retaining such firm shall be borne
by the Purchaser unless the firm determines that the Purchaser
was overcharged by an amount equal to or greater than USD 20,000
or its equivalent in local currency, in which case the costs of
retaining such firm shall be borne by the Supplier. The decision
of the auditors shall be final and binding on the parties and
not subject to challenge and resolution under Article 19 and
judgment thereon may be entered in any court of competent
jurisdiction.
(I) Any refund of any invoice amount, or payment of any disputed
invoice amount, shall be promptly made following the final
determination as aforesaid and shall include interest at the
Interest Rate based on the actual number of days elapsed from
the due date of the original invoice to the date such refund or
additional payment is received by the Party concerned.
(J) The Supplier shall provide the Purchaser with a quarterly report
on variations from the Annual Plan and Budget no later than
thirty (30) days from the end of the relevant quarter. In the
event of a difference between the Annual Plan and Budget and
actual results exceeding the total Annual Plan and Budget by
more than 3% for the SUMF Item in question or by more than a 3%
change in any tariff with respect to the SUMF Item in question
or the equivalent in local currency of USD 50,000, whichever is
the greater, the Supplier shall consult with the Purchaser and
provide relevant explanations for such differences. The Parties
will discuss which actions, if any, are to be taken with respect
to such differences.
ARTICLE 8: ANNUAL FORECAST; ANNUAL PLAN AND BUDGET; AND
CURTAILMENT
8.1 For operational forecast purposes only, unless the Purchaser otherwise
submits to the Supplier on or before 1st June in each calendar year a
non-binding annual forecast of its quarterly volume requirements set
out on a month by month basis for each SUMF Item for the forthcoming
calendar year and estimates of its volume requirements for each SUMF
Item for the following four (4) calendar years, the Supplier shall use
the prior year's volume forecast for SUMF Items and estimates of volume
requirements for the forthcoming year and four subsequent years. The
Purchaser shall update any such forecast on or before September 1st of
each year to provide its actual forecast.
8.2 Not later than 60 days before the commencement of each calendar year
beginning after the Effective Date, the Supplier shall prepare and
submit to the Purchaser for approval a draft operational forecast of
the SUMF Charges (the "Annual Plan and Budget") for the following
calendar year taking into full account the forecast data provided to
the Supplier by the Purchaser.
16
8.3 Following receipt by the Purchaser of the draft Annual Plan and Budget,
the Parties shall consult and shall each use all reasonable endeavours
to reach agreement thereon. Upon the approval of both Parties, the
draft Annual Plan and Budget becomes the Annual Plan and Budget.
8.4 If the draft Annual Plan and Budget is not approved prior to the
commencement of the calendar year to which it relates the most recently
approved Annual Plan and Budget shall be used until the new Annual Plan
and Budget is approved.
8.5 Each Annual Plan and Budget shall be designed to ensure that the SUMF
Items are provided in accordance with this Agreement.
8.6 For each SUMF Item, the Annual Plan and Budget for the calendar year
1999 or, as applicable, 2000, is set out in SCHEDULE 2 or SCHEDULE 7,
as applicable.
8.7 If there is any Dispute between the Parties on the final Annual Plan
and Budget the matter shall be referred for resolution in accordance
with ARTICLE 19.
8.8 In the event that any SUMF Items are not available at the planned
volume rates for any reason whatsoever, the Supplier shall implement
the then current curtailment procedures followed by the Supplier and as
specified in SCHEDULE 2 or 4. Unless otherwise provided in any Schedule
hereto, such curtailment procedures will be based upon the following
priorities, provided that the interests of the Purchaser are treated
fairly: (i) safety; (ii) minimising adverse environmental impact; and
(iii) sustaining the operations of the Site as a whole.
8.9 The Supplier shall have the right to impose curtailment selectively
based upon the foregoing considerations regardless of the cause of the
curtailment and without liability. However, nothing in this ARTICLE 8
shall permit the Supplier to curtail any SUMF Item based upon its
business considerations. Purchaser may allocate such curtailed SUMF
Items among Purchaser's operations as Purchaser determines in its sole
discretion, subject to the operational or HSE constraints of Supplier.
8.10 If reasonably possible, the Supplier shall advise the Purchaser of any
impending curtailment and the Parties shall cooperate to avoid or
mitigate the effects of such curtailment in an economically efficient
manner.
ARTICLE 9: LIABILITY AND INDEMNITY
9.1 For purposes of this ARTICLE 9, the following terms shall be defined as
set forth below:
"Employee" means any employee of the applicable Party.
"Third Party Claim" means any claim initiated by a person (other
than either Party, their Affiliates or their employees) against
an indemnified Party, any of
17
their respective Affiliates or any of their respective
Employees.
"Supplier Indemnitees" means the Supplier, its Affiliates,
officers, directors, employees, agents, servants, and other
representatives of each of them.
"Purchaser Indemnitees" means the Purchaser, its Affiliates,
officers, directors, employees, agents, servants, and other
representatives of each of them.
9.2 (A) Each Party shall, except as provided in ARTICLES 9.2(B),
9.3(A)(iii), 9.3(B)(iii) and as set forth in ARTICLE 9.3(C),
be responsible for any Loss or Damage to its property.
(B) If any Loss or Damage to a SUMF Asset shall occur by reason of
the Gross Negligence or Wilful Misconduct of a Party, such Party
shall be responsible for the cost of the restoration of such
SUMF Asset.
(C) Each Party shall, except as provided in ARTICLE 9.3, be
responsible for any Loss or Damage it may cause to any of its
employees.
9.3 (A) Subject to the limitations set forth in this ARTICLE 9 and
in ARTICLE 14, the Purchaser shall be responsible for and
shall indemnify, defend and hold harmless the Supplier
Indemnitees from and against the following:
(i) any Loss or Damage of Supplier Indemnitees to any of the
Purchaser's Employees attributable to (a) the
Purchaser's negligence (excluding any Loss or Damage
attributable to Supplier's negligence), or (b) the
Purchaser's Gross Negligence or Wilful Misconduct, or
(c) the Supplier's negligence in an act or omission with
respect to performance of its obligations under this
Agreement (but not the Supplier's Gross Negligence or
Wilful Misconduct);
(ii) any Loss or Damage of Supplier Indemnitees to any of the
Supplier's Employees attributable to (a) the Purchaser's
negligence or (b) the Purchaser's Gross Negligence or
Wilful Misconduct;
(iii) any Loss or Damage to any of the Supplier's property
(excluding any SUMF Asset) attributable to the
Purchaser's Gross Negligence or Wilful Misconduct;
(iv) any Loss or Damage to any of the Purchaser's property
(excluding any SUMF Asset) attributable to the
Purchaser's negligence, Gross Negligence or Wilful
Misconduct;
(v) any Loss or Damage of Supplier Indemnitees resulting
from Third Party Claims attributable to (a) the
Purchaser's negligence or (b) the Purchaser's Gross
Negligence or Wilful Misconduct;
18
(vi) any Loss or Damage of Supplier Indemnitees resulting
from failure by the Supplier to comply with Legal
Requirements in relation to performance of this
Agreement limited to the amount chargeable under this
Agreement to Purchaser in respect of SUMF Charges in any
calendar year (if such Loss or Damage is incurred partly
in relation to performance of this Agreement and partly
in connection with other activities of Supplier
Indemnitees, the Purchaser shall only be liable
hereunder for any equitable allocation of such Loss or
Damage in the same manner Overheads are equitably
allocated); provided nothing in this ARTICLE 9.3(A)(vi)
shall provide for a duplication of recovery by Supplier;
provided, however, that, except as provided in ARTICLE 14 and
ARTICLE 9.7, the Purchaser's aggregate liability for any Loss or
Damage arising under ARTICLE 9.3(A)(ii)(b), 9.3(A)(iii),
9.3(A)(iv), or 9.3(A)(v)(b) shall not (i) in any calendar year
exceed 25% of the SUMF Charges in the preceding calendar year
(in the first calendar year, 25% of the SUMF charges for that
calendar year); or (ii) for loss resulting from any single
event, exceed 25% of the SUMF Charges in the calendar year in
which the Loss or Damage first occurs.
(B) Subject to the limitations set forth in this ARTICLE 9 and in
ARTICLE 14, the Supplier shall be responsible for and shall
indemnify, defend and hold harmless the Purchaser Indemnitees
from and against the following:
(i) any Loss or Damage of Purchaser Indemnitees to any of
the Supplier's Employees attributable to the Supplier's
Gross Negligence or Wilful Misconduct;
(ii) any Loss or Damage of Purchaser Indemnitees to any of
the Purchaser's Employees attributable to the Supplier's
Gross Negligence or Wilful Misconduct;
(iii) any Loss or Damage to any of the Purchaser's property
(excluding any SUMF Asset) attributable to the
Supplier's Gross Negligence or Wilful Misconduct; and
(iv) Any Loss or Damage of Purchaser Indemnitees resulting
from Third Party Claims attributable to the Supplier's
Gross Negligence or Wilful Misconduct;
provided, however, that, except as provided in ARTICLE 14 and
ARTICLE 9.7, the Supplier's aggregate liability for any Loss or
Damage arising under Article 9.3(B) shall not (i) in any
calendar year, exceed 25% of the SUMF Charges in the preceding
calendar year (in the first calendar year, 25% of the SUMF
charges for that calendar year); or (ii) for loss resulting from
any single event, exceed 25% of the SUMF Charges in the calendar
year in which the Loss or Damage first occurs.
19
(C) If Supplier shall suffer Loss or Damage to SUMF Assets as a
result of the negligence (but not Gross Negligence or Wilful
Misconduct) of Purchaser or Supplier, Supplier shall be
responsible to restore such SUMF Asset and Purchaser shall
reimburse Supplier for and in an amount equal to (i) the cost to
restore such SUMF Asset, multiplied by (ii) the fraction equal
to the Purchaser's Firm Capacity Reservation for such SUMF Asset
compared to the total site capacity of such SUMF Item or the
other relevant allocation key or keys specified in SCHEDULE 6.
To cover the risk of the Purchaser having, pursuant to the
provision immediately above, to bear a proportion of the cost of
restoring a SUMF Asset in respect of which the Supplier has
sustained Loss or Damage, the Purchaser shall insure or, with
Supplier's consent, self-insure.
(D) Each party waives and releases the other Party from and against
any and all Loss or Damage to such Party's assets, excluding any
SUMF Asset, resulting from the negligence (but not Gross
Negligence) of the other Party.
9.4 A Party shall promptly notify the other Party of any claim made against
it arising out of matters covered in this ARTICLE 9. Once the
indemnifying Party accepts its indemnity obligation, it may, at its own
cost, conduct negotiations for the settlement of any claim made against
the indemnified Party, and any litigation that may arise therefrom in
such reasonable manner as the other Party shall from time to time
approve, such approval not to be unreasonably withheld or delayed. The
indemnified Party shall not make any admission which is prejudicial to
the indemnifying Party unless the indemnifying Party has failed to
accept its indemnity obligations within 20 days after having been
requested to do so.
9.5 Notwithstanding anything to the contrary contained in this Agreement,
under no circumstance shall a Party or any of its Affiliates be held
liable to the other Party or any of the other Party's Affiliates for
any loss of profit, loss of use, loss of production, loss of contracts
or for any other indirect or consequential damage that may be suffered
by the other, or for any special, exemplary or punitive damages.
9.6 Any SUMF Items procured from a Third Party as indicated in the relevant
Schedules will be provided by the Supplier to the Purchaser under the
same terms and conditions applicable between the Supplier and the Third
Party and, to the extent so supplied, the Supplier shall have no
liability with respect to the supply or performance of such SUMF Items.
9.7 Notwithstanding any other provision of this Agreement, each Party
shall, to the fullest extent permitted by law, indemnify, defend and
hold harmless the other Party and its Affiliates from and against any
and all Environmental Loss or Damage, including other Loss or Damage to
an Environmental Protection System, (after giving effect to any
recoveries from Third Parties) in any way resulting from or
attributable to a product, material, feedstock or off-take owned by
such Party or its Affiliates; provided however, that neither Party
shall be required to indemnify the other Party for any Environmental
20
Damage (as defined in the Environmental Agreement) for which such other
Party is entitled to indemnification under the Environmental Agreement.
9.8 Any liability of one Party to the other Party under this ARTICLE 9
shall expire two years after the date on which the act or omission
giving rise to such Party's liability first occurred, unless the Party
makes a claim within such two year period, and no claim, demand, action
or proceeding shall be brought or initiated by the claiming Party
against the other Party thereafter; provided, however, that the
liability of a Party under ARTICLE 9.7 shall not be so limited.
9.9 The foregoing indemnities set forth in this ARTICLE 9 are intended to
be enforceable against the Parties in accordance with the express terms
and scope thereof.
9.10 The provisions of this ARTICLE 9 are for the benefit of the Purchaser
Indemnitees and the Supplier Indemnitees and no other party shall be
entitled to any benefit of the provisions of this Article 9.
ARTICLE 10: TERM AND TERMINATION; REDUCTION OF CAPACITY RESERVATION
10.1 This Agreement shall be of full force and effect on and from the
Effective Date and shall continue for an initial term of twenty (20)
years from the Effective Date and shall be automatically renewed
thereafter for extension terms of five (5) years each, unless
terminated earlier as provided for in this Agreement.
10.2 The Purchaser may terminate this Agreement in its entirety as to one or
both of its Plants in any of the following circumstances:
(A) if a Bankruptcy Event occurs and is continuing in relation to
the Supplier and the Supplier does not provide adequate
assurances to the Purchaser within thirty (30) days of the
occurrence of the Bankruptcy Event that the Supplier will
continue to provide all SUMF Items to the Purchaser on the terms
and conditions of this Agreement;
(B) with twelve (12) months' prior written notice, following the
decision by the Purchaser to discontinue its operations at such
Plant or Plants; and
(C) with three (3) years' prior written notice, effective at the end
of the initial twenty (20) year term or at the end of any five
(5) year extension term, as the case may be.
10.3 Unless otherwise provided in a Schedule to this Agreement, the
Purchaser may terminate this Agreement as to the supply of an
individual SUMF Item at one or both of its Plants in any of the
following circumstances, provided always that no supply of Sole
Supplier SUMF may be terminated by the Purchaser without terminating
this Agreement as a whole as to one or both of its Plants:
21
(A) if a Bankruptcy Event occurs and is continuing in relation to
the Supplier and the Supplier does not provide adequate
assurances to the Purchaser within thirty (30) days of the
occurrence of the Bankruptcy Event that the Supplier will
continue to provide the particular SUMF Item to the Purchaser on
the terms and conditions of this Agreement;
(B) if, for reasons other than Force Majeure, a continuing material
non-conforming performance occurs as to the Supplier's provision
of a SUMF Item for more than thirty (30) days and the Purchaser
has given the Supplier written notice of such non-conforming
performance and within thirty (30) days thereafter such
unsatisfactory performance has not been corrected or the
Supplier has not developed and implemented a plan of corrective
action reasonably satisfactory to the Purchaser to prevent the
reoccurrence of such non-conforming performance;
(C) with ninety (90) days' prior written notice, or such other
notice period as is provided in a Schedule for any Short Term
SUMF Item;
(D) with three (3) years' prior written notice, or such other notice
period as is provided in a Schedule for any Long Term SUMF Item;
and
(E) with at least thirty (30) days' prior written notice, upon the
occurrence of at least three (3) Force Majeure events (other
than Force Majeure events caused by "Acts of God" including Acts
of God affecting any supplier or vendor to Supplier) that occur
with respect to such particular SUMF Item during any twelve (12)
months period.
10.4 If the Purchaser or the Supplier requests a change in the nature,
quantity or type of any SUMF Item provided hereunder, the other Party
shall use reasonable efforts to accommodate such request but with no
obligation to make such change. In the event of the charge for a
particular SUMF Item being based upon the Purchaser's Firm Capacity
Reservation, the Purchaser shall have the right with respect to such
SUMF Item upon ninety (90) days advance written notice in the case of a
Short Term SUMF Item (or such other period as may be required to
terminate such Short Term SUMF Item under the applicable Schedule) and
three (3) years advance written notice in the case of a Long Term SUMF
Item (or such shorter period as may be required to terminate such Long
Term SUMF Item under the applicable Schedule) to reduce its Firm
Capacity Reservation for such SUMF Item and, when reduced, to receive a
pro rata reduction in the Direct Site Costs, Overheads, Infrastructure
Fees and such other costs that are allocated based on the Purchaser's
share of the aggregate of firm capacity reservations for such SUMF Item
in respect of all Users. There shall be no minimum or maximum limit on
the extent of the reduction except as the Supplier may require for the
protection of HSE. Termination cost (i.e. disconnection cost and
redundancy cost, as the case may be) associated with the reduction of
the Firm Capacity Reservation for a Long Term SUMF Item will be dealt
22
with as if such SUMF Item were terminated and the provisions of Article
10.8 shall apply thereto.
10.5 The Supplier may terminate this Agreement in its entirety in any of the
following circumstances:
(A) if a Bankruptcy Event occurs and is continuing in relation to
the Purchaser and the Purchaser does not provide the Supplier
with adequate assurance (such as an advance payment or letter of
credit or such other security as is acceptable to Supplier) of
continued payment of the SUMF Charges for all SUMF Items within
thirty (30) days of the occurrence of the Bankruptcy Event;
(B) if the Purchaser fails to pay any SUMF Charge within three (3)
months of the date when such payment fell due, and (i) such
failure continues for an initial period of at least thirty (30)
days after written notice from the Supplier and (ii) further
continues for an additional period of at least ten (10) days
following a second written notice from the Supplier which second
notice may be given at any time following the expiration of the
first thirty (30) day period but the Supplier shall not be
entitled to terminate this Agreement pursuant to this provision
when the Purchaser has in good faith referred any disputed SUMF
Charge for resolution in accordance with ARTICLE 7.2(H) or
ARTICLE 19, and made payment to the Supplier of any part of the
SUMF Charge not the subject of the Dispute;
(C) with at least twenty-four (24) months' prior written notice or,
if that is impossible, with as much notice as is possible under
the circumstances and in any event promptly after the Supplier
has made such decision, if the Supplier decides to cease
operations of all or substantially all of its SUMF Assets at the
Site and does so cease such operations; and
(D) with three (3) years' prior written notice, effective at the end
of the initial twenty (20) year term of this Agreement or at the
end of any five (5) year extension term, as the case may be.
10.6 Unless otherwise provided in a Schedule to this Agreement, the Supplier
may terminate this Agreement as to the supply of an individual SUMF
Item in any of the following circumstances, provided that no supply of
Sole Supplier SUMF may be terminated by the Supplier without
terminating this Agreement as a whole:
(A) if a Bankruptcy Event occurs and is continuing in relation to
the Purchaser and the Purchaser does not provide the Supplier
with adequate assurance (such as an advance payment or letter of
credit or such other security as is acceptable to Supplier) of
continued payment of the SUMF Charges for all SUMF Items within
thirty (30) days of the occurrence of the Bankruptcy Event;
(B) if the Purchaser without proper justification fails to pay any
SUMF Charge for such individual SUMF Item within three (3)
months of the date when such
23
payment fell due, and such failure continues for an initial
period of at least thirty (30) days after written notice from
the Supplier, but the Supplier shall not be entitled to
terminate this Agreement pursuant to this provision when the
Purchaser has in good faith referred any disputed SUMF Charge
for an individual SUMF Item for resolution in accordance with
ARTICLE 7.2(H) or ARTICLE 19, and has made payment to the
Supplier of any part of the SUMF Charge not the subject of the
Dispute;
(C) with at least twelve (12) months' prior written notice or, if
that is impossible, with as much notice as is possible under the
circumstances and in any event promptly after the Supplier has
made such decision, if the Supplier decides to cease the supply
to the entire Site of such SUMF Item SUMF and does so cease such
supply and such SUMF Item is not a Sole Supplier SUMF Item;
(D) with ninety (90) days' prior written notice, or such other
notice period as is provided in SCHEDULE 2, for any Short Term
SUMF Item; provided, however, that such termination of a Short
Term SUMF Agreement by the Supplier may occur only on or after
December 31, 2002 (or such other initial period of duration as
may be expressly specified in the applicable Schedule for such
SUMF Item); and provided further, however, that the effective
date of any such termination shall in all events occur on the
last day of the calendar year which follows such ninetieth day;
(E) with three (3) years' prior written notice effective at the end
of the initial period of twenty (20) years or at the end of any
extension period of five (5) years, as the case may be, for any
Long Term SUMF Item; and
(F) with at least thirty (30) days' prior written notice, upon the
occurrence of at least three (3) Force Majeure events (other
than Force Majeure events caused by "Acts of God", including
Acts of God affecting any third party supplier or vendor to the
Purchaser) that occur with respect to the same operating unit of
Purchaser and with respect to the same SUMF Item, during any
twelve (12) months period.
10.7 Upon the termination of the supply of a Short Term SUMF Item to a Plant
by Purchaser, the Supplier shall physically disconnect from that SUMF
Item's delivery system to the Plant and shall pay all costs associated
with the physical disconnection. Upon the termination of a Short Term
SUMF Item by the Supplier pursuant to ARTICLE 10.5(A) or 10.6(A) due to
a Bankruptcy Event of Purchaser or pursuant to ARTICLE 10.5(B) or
10.6(B) due to a payment default by Purchaser under this Agreement, the
Supplier shall physically disconnect from that SUMF Item's delivery
system and Purchaser shall pay all costs associated with the physical
disconnection. Upon the termination of the supply of a Long Term SUMF
Item to a Plant, the Purchaser shall physically disconnect from that
SUMF Item's delivery system to the Plant in the time and manner
instructed by the Supplier. The Purchaser shall pay the costs
associated with the physical disconnection, if a Long Term SUMF Item
was terminated (i) by Purchaser pursuant to ARTICLE 10.2(B) or 10.3(D)
or (ii) by Supplier pursuant to ARTICLE 10.5(A), 10.5(B), 10.6(A) or
10.6(B).
24
Each Party agrees to cooperate with the other Party in order to
facilitate disconnection and minimize disconnection costs. The Supplier
shall pay the costs associated with the physical disconnection of the
Long Term SUMF Item that are not required to be paid by the Purchaser
as provided in the preceding sentence. Notwithstanding the other
provisions of this ARTICLE 10.7, the costs associated with the physical
disconnection of all SUMF Items at the termination of this Agreement
under ARTICLE 10.2 (C) or 10.5 (D) or upon termination of the supply of
an individual SUMF Item under ARTICLE 10.6(E) shall be paid one half by
the Purchaser and one half by the Supplier.
10.8 In the event of termination of this Agreement pursuant to ARTICLE
10.2(A), 10.2(B), 10.3, 10.5(A), 10.5(B), 10.5(C) or upon termination
of the supply of an individual SUMF Item under ARTICLE 10.6, the
Supplier may terminate the employment of any member of its or any of
its Affiliates' staff substantially involved in the provision of SUMF
Items to the Purchaser under this Agreement. In the event of
termination of this Agreement as to the supply of an individual SUMF
Item pursuant to ARTICLE 10.6, and in the event of a reduction in the
Purchaser's Firm Capacity Reservation pursuant to ARTICLE 10.4, the
Supplier may terminate the employment of any member of its or any of
its Affiliates' staff substantially involved in the provision of the
relevant SUMF Item. In the case of the termination by the Supplier of
employment of any member of its staff as a result of
termination of this Agreement under ARTICLE 10.2(B), 10.5(A), 10.5(B),
10.6(A) and 10.6(B) or a reduction in the Purchaser's Firm Capacity
Reservation under ARTICLE 10.4, the Purchaser will indemnify the
Supplier for any redundancy costs in accordance with ARTICLE 10.9;
provided that such indemnity shall be on a pro rata basis in the
proportion of the Purchaser's share of allocated manpower for its
operation to the extent that any employee is not substantially involved
in the provision of that individual SUMF Item. Notwithstanding the
foregoing provisions of this ARTICLE 10.8 that set out the indemnity of
Purchaser for certain redundancy costs of Supplier, at the termination
of this Agreement under ARTICLE 10.2(C), or 10.5(D), or upon
termination of an individual SUMF Item under ARTICLE 10.6(E) any
redundancy costs of Supplier as determined in accordance with ARTICLE
10.9, shall be paid one half by the Purchaser and one half by the
Supplier.
10.9 In the event of termination of this Agreement whether in its entirety
as to one or both Plants or as to the supply of an individual Item of
SUMF pursuant to any of ARTICLES 10.2(B), 10.2(C), 10.3(D), 10.3(E), or
10.5(A), 10.5(B), 10.5(D), 10.6(A), 10.6(B), and 10.6(E) with respect
to any member of staff terminated in accordance with ARTICLE 10.8 who
(i) in the case of the termination of this Agreement in its entirety,
was substantially involved in the provision to the Purchaser of a
Long-Term SUMF Item or Sole Supplier SUMF or (ii) in the case of the
termination of this Agreement as to the supply of an individual Long
Term SUMF Item or of a reduction in the Firm Capacity Reservation as to
a Long Term SUMF Item, was substantially involved in the provision to
the Purchaser of such SUMF Item, the Purchaser will indemnify the
Supplier in full against all and any liabilities, losses, costs,
damages, expenses, demands and claims relating to
(a) compensation and remuneration (including benefit entitlements
and social charges whether contractual or statutory) arising
from or in connection with (i) the period
25
of employment from the date of termination of the SUMF Item to
the date of such decision to terminate the Employee and (ii) the
relevant notice period applicable to the relevant employee in
accordance with the Supplier's applicable policy and
(b) the termination of his employment provided (i) the Supplier
shall make any decision regarding the termination of employment
and notify the Purchaser accordingly within 180 days of
notification of the termination of the Agreement or the
termination of the supply of an individual Item of SUMF; and
(ii)the Supplier has used reasonable endeavours, but has failed,
to find suitable alternative employment on the Site for the
employee prior to notifying the employee of his dismissal in
accordance with Dutch law and with his contract of employment;
(iii) an employee who is transferred by the Supplier to an
Affiliate as a result of any such termination shall not be
considered a terminated employee for purposes of this Agreement
unless such transfer results in severance costs in which case
the Purchaser shall indemnify the Supplier for such severance
costs in accordance with this ARTICLE 10.9; and (iv) and
notwithstanding the provisions of ARTICLE 10.9(a) the severance
cost arising out of the termination of such employee's
employment shall be computed by reference to the total length of
service of such employee with the Supplier or any of its
Affiliates prior to the date of such decision to terminate the
employee's employment and not by reference to the period
specified in ARTICLE 10.9(a).
Notwithstanding the foregoing provisions of this ARTICLE 10.9 that set
out payment of certain costs by Purchaser, at the termination of this
Agreement under ARTICLE 10.2(C) or 10.5(D) or upon termination of the
supply of an individual SUMF Item under ARTICLE 10.6(E) any redundancy
costs of Supplier as determined in accordance with ARTICLE 10.9, shall
be paid one half by the Purchaser and one half by the Supplier.
10.10 Each Party shall exercise its reasonable efforts to minimise any
adverse effect to the other Party resulting from the termination of the
rendering, in whole or in part, of any SUMF Items under this Agreement.
Each Party agrees to cooperate with the other Party in order to
facilitate any disconnection and minimise disconnection costs and
termination costs. In the event the Supplier purports to cease to
provide any Long Term or Sole Supplier SUMF Item during the ten-year
period following the Effective Date as a result of its cessation of
operations of all or substantially all of its SUMF Assets at the Site
or its cessation of supply to the entire Site of such SUMF Item, the
Supplier shall continue to provide the Purchaser with such SUMF Item
for the balance of the ten-year period on a basis which is the economic
equivalent of the Supplier's supply to the Purchaser of such SUMF Item
prior to the Supplier's cessation of operations or supply. The manner
in which the Supplier continues to provide such SUMF Item on an
economically equivalent basis shall be within the Supplier's sole
discretion and may include the transfer by the Supplier of SUMF Assets,
the assignment of all or part of this Agreement to Third Parties, the
investment in alternative assets and the procurement of comparable
items from Third Parties. In the event such termination occurs
following the tenth anniversary of the Effective Date, the provisions
of ARTICLE 10.11 shall apply to Supplier's provision of SUMF Items.
26
10.11 Upon termination of this Agreement, the Parties, acting reasonably and
in good faith, shall negotiate for the continued provision of any
essential SUMF Items on commercially competitive terms and conditions,
including price, which shall in any event be sufficient to provide the
Supplier with full recovery of its cash costs plus a return on capital
and capital reimbursement consistent with the other SUMF infrastructure
charges contained in this Agreement. In addition, if such termination
occurs any time after the tenth anniversary of the Effective Date,
(a) the Supplier shall consider, without obligation, the same
alternatives which it may consider upon termination of the
provision of SUMF Items during the ten-year period commencing
with the Effective Date pursuant to ARTICLE 10.10; and
(b) the Purchaser shall have the right to continue to receive from
the Supplier any essential Long Term or Sole Supplier SUMF Items
for which the Purchaser cannot obtain a reasonable alternative
source elsewhere.
10.12 Subject to ARTICLES 10.10 and 10.11 any termination of this Agreement,
in whole or in part, including the termination of the supply of an
individual SUMF Item and any reduction in the Purchaser's Firm Capacity
Reservation for a SUMF Item, shall be final.
10.13 Termination of this Agreement under this ARTICLE 10 shall not affect
the provisions of ARTICLES 6 (as to audit rights), 9, 10.7, 10.8, 10.9,
10.10, 10.11, 10.12, 10.13, 10.14, 10.15, 10.16, 11, 12, 14, 17.4, 19,
23, 25, 26, 27, 28 and 29 which shall continue in full force and
effect.
10.14 Within 60 days after termination of this Agreement as to one or both
Plants, the Supplier shall provide a final reconciliation of SUMF
Charges. Any overcharges or undercharges shall be paid by the Party
owing the same within twenty (20) days following the final
reconciliation (after any required adjustments have been made). The
final recalculation shall be broken down in such detail as the
Purchaser may reasonably request and as the Supplier can reasonably
provide. From the due date of the reconciliation payment, interest will
accrue at the Default Rate. The Parties shall meet to resolve any
dispute relating to the final reconciliation as expeditiously as
possible in accordance with ARTICLE 19.
10.15 Termination of this Agreement as to one or both Plants and termination
of the supply of any individual SUMF Item shall be without prejudice to
the accrued rights and liabilities of the Parties at the time of such
termination and all provisions of this Agreement necessary for the full
enjoyment thereof shall survive termination for the period so
necessary.
10.16 Notwithstanding the foregoing provisions of this ARTICLE 10, if there
is a Dispute regarding the termination of this Agreement or a SUMF
Item, no termination shall occur until sixty (60) days following
resolution of the Dispute (i) under ARTICLE 19 or ARTICLE 7.2 (H), as
applicable or (ii) by written agreement of the Parties; provided,
however that
27
the additional sixty (60) day period in this sentence shall be ten (10)
days if the termination of this Agreement or a SUMF Item is by the
Purchaser under ARTICLE 10.2(A) or ARTICLE 10.3(A) or (B) or is by the
Supplier under ARTICLE 10.5(A), 10.5(B), 10.6(A) or 10.6(B).
ARTICLE 11: INTELLECTUAL PROPERTY RIGHTS
11.1 Neither this Agreement nor the performance by any of the Parties of its
duties hereunder shall operate to convey, license or otherwise transfer
from one Party to another any patent, know-how, trade secrets or other
intellectual property rights.
11.2 The copyright and any other industrial property rights and property in
any Confidential Record or other material supplied under this Agreement
shall, in the absence of any express provision to the contrary thereon,
remain with the disclosing Party.
ARTICLE 12: CONFIDENTIALITY
12.1 Subject to ARTICLE 12.2, each Party shall treat as strictly
confidential (and shall not disclose) all information received or
obtained as a result of entering into or performing this Agreement
which relates to:
(A) the provisions of this Agreement;
(B) the negotiations relating to this Agreement;
(C) the performance of this Agreement;
(D) the other Party or any aspect of its business or operations; or
(E) the subject matter of this Agreement.
12.2 Either Party may disclose information which would otherwise be
confidential if and to the extent:
(A) required by the law of any jurisdiction to which the disclosure
is subject;
(B) required by any securities exchange or agency to which either
Party is subject, wherever situated, whether or not the
requirement has the force of law; provided that the disclosing
Party requests in accordance with applicable rules confidential
treatment of such information by any such securities exchange or
agency to whom such information is required to be disclosed;
(C) disclosed on a strictly confidential basis to the professional
advisers or auditors of the Party or to any actual or potential
bankers or financiers of that Party;
(D) disclosed on a strictly confidential basis to an Affiliate or
Affiliates;
28
(E) disclosed on a strictly confidential basis to bona fide
potential or actual purchasers of a proprietary interest in or
potential or actual operators of either the Plant or the Site;
(F) disclosed to the corporate shareholders or other equity owners
of the Parties;
(G) that the information is lawfully known to the Party (without
binder of secrecy) at the time of disclosure; or
(H) that the information has come into the public domain through no
fault of that Party;
(I) that the other Party has given prior written approval to such
disclosure; or
(J) disclosed to the extent necessary to seek enforcement of, or to
defend, the contractual rights or obligations of a Party under
this Agreement, any Transaction Documents, the IPTLA or other
related agreements, or to satisfy an obligation or duty under
this Agreement.
12.3 If the Purchaser should wish to disclose confidential information to a
potential Third Party operator of the Plant, it shall first obtain the
permission of the Supplier as to the information that can be disclosed,
which permission shall not be unreasonably withheld.
12.4 The restrictions contained in ARTICLE 12.1 shall continue to apply for
two (2) years (except for the restriction provided in ARTICLE 12.1 (D),
which shall continue to apply for five (5) years) after (i) the
termination of this Agreement or (ii) the termination of an individual
SUMF Item; provided that the two year period shall not apply to
disclosures of information relating to such SUMF Item made only to an
alternative SUMF provider or potential alternative SUMF provider on a
strictly "need to know basis".
29
ARTICLE 13: ADDITIONAL SUMF AND CAPITAL IMPROVEMENTS TO SUMF ASSETS
13.1 The Purchaser may submit from time to time to Supplier written requests
for Supplier to undertake capital improvement projects relating to the
supply of SUMF Items. Any such request shall specify in reasonable
detail the capital improvements to be made, any permits that may be
required, the estimated cost of such capital improvements, any proposed
changes to this Agreement or any Schedule, and any other relevant
information relating to such capital improvement project. Supplier
agrees that it will consider in good faith any such request, but
Supplier shall have no obligation to agree to undertake any such
capital improvement project and may reject any request by Purchaser.
Supplier shall provide Purchaser a written explanation for a rejection.
If Supplier agrees to undertake any such capital improvement project,
Purchaser shall be entitled to receive the additional capacity of a
SUMF Item generated by such capital improvement and Purchaser shall be
responsible for all costs associated with such project, without
duplication of other amounts paid or payable by Purchaser under this
Agreement including (a) the cost of completing the capital
improvements, (b) Supplier's costs and expenses incurred in connection
with such project, and (c) any increased costs of operation suffered by
Supplier as a result of such project.
Notwithstanding the foregoing, the Purchaser has the right, provided
there is no unreasonable disruption to any other of the Supplier's
operations, to obtain from other sources, including in-house production
by the Purchaser, such new or additional requirements of the relevant
SUMF Item as the requested project was to cover.
Any reasonable costs incurred by the Supplier (not including any
additional charge for services by persons whose services are included
in SUMF Charges irrespective of the required evaluation) or affiliates
of Supplier in evaluating a requested capital improvement project shall
be reimbursed to the Supplier by the Purchaser; provided that when
incurring such costs the Supplier has acted on a Commercially
Reasonable basis.
13.2 If a capital improvement to a SUMF Asset is required by applicable law
or HSE regulations solely because of the Purchaser's process, products
or by-products, the costs directly related to such capital improvement
shall be borne by the Purchaser.
13.3 If the Purchaser determines and notifies the Supplier, within the first
twelve months following the Effective Date, that a service has
historically been supplied by the Supplier but such service is not
included in this Agreement, the Supplier shall make such service
available to the Purchaser at a price and on terms mutually agreeable,
but following the same concepts as to Direct Site Costs, Variable Costs
and Infrastructure Charges as set forth herein.
30
ARTICLE 14: DAMAGE TO SUMF ASSETS
14.1 If SUMF Assets are damaged or destroyed, the owner of the SUMF Asset
shall timely restore such asset as soon as is practical following the
damage or destruction.
14.2 If the owner does not timely fulfill its obligation to restore the SUMF
Asset, the other Party may at its discretion take such other reasonable
measures as are necessary or useful to find an alternative source for
any relevant SUMF Item or its equivalent for the benefit of all Users
on a temporary basis until such restoration is complete.
14.3 The Party causing damage to a SUMF Asset as a result of its Gross
Negligence or Wilful Misconduct shall assume liability for any
incremental costs of such alternative SUMF Items so that the Users of
such SUMF Items other than such Party or its Affiliates pay the same
amount for such SUMF Items during such temporary period as such Users
paid prior to the damage or destruction of the relevant SUMF Assets.
ARTICLE 15: METERING OF SUPPLY, CONSUMPTION AND DELIVERY
15.1 The quantities of certain SUMF Items supplied hereunder shall be
measured by a Meter. The Meter shall be installed, owned and operated
at the expense of the Party indicated in SCHEDULE 2 as the Meter owner.
The Meter owner shall read the Meter on a regular basis as described in
SCHEDULE 2 and shall promptly advise the other Party in writing of the
reading. Such readings shall form the basis for preparing the
Supplier's invoices pursuant to ARTICLES 5, 6 and 7.
15.2 The Parties acknowledge that the Meters are not normal custody transfer
meters. The Meter owner shall, at its expense, perform normal
maintenance procedures to maintain the accuracy of its Meters. Each
Meter shall be tested for accuracy and calibrated regularly per
industry standards as specified in SCHEDULE 2 by the Meter owner at its
expense. The Meter owner shall give the other Party a written schedule
of calibration test times, and the other Party shall have the right to
have its representative present to observe each calibration test. If
the other Party desires to conduct more frequent calibration tests,
such Party may request that more frequent tests be conducted, in which
case the Meter owner will perform or cause to be performed such tests
at the other Party's expense.
15.3 Following any calibration test made pursuant to this ARTICLE 15, the
Meter owner at its expense shall restore an inaccurate component to a
condition of accuracy or replace such component as soon as reasonably
practical. If the level of inaccuracy exceeds that specified in
SCHEDULE 2, the readings affected by said component shall be corrected
by the amount of the inaccuracy for the period which is definitely
known to be affected by such inaccuracy. If the period is not
definitely known and is not mutually agreed upon, the correction shall
be made for a period one-half of the time elapsed between the last
prior calibration test and the date the inaccuracy is corrected.
Adjustments to a previously issued incorrect invoice shall be made
promptly by the Supplier.
31
15.4 The Parties acknowledge that special metering problems may arise which
can be resolved by procedures other than those described in this
ARTICLE 15. The Parties may, by mutual consent, establish special
procedures for a specific problem or accept delivery quantities in a
manner not described herein. Mutual consent for acceptance of one
special procedure or delivery quantity will not set aside the
provisions of this ARTICLE 15, nor imply acceptance by either Party of
any special provision at a future time.
15.5 Should the Supplier or the Purchaser fail to obtain suitable
measurement results from the Meter, the quantities of SUMF provided
during the period in question shall be calculated by the other Party in
the event that the other Party has installed its own check meter and it
has been calibrated according to this ARTICLE 15 within ninety (90)
days of the period in question. In the event that neither Party has
obtained suitable measurement results, the amount of the relevant SUMF
Item supplied in the period in question shall be estimated, using the
average of delivered quantities for a period of time agreed upon by
both Parties, or by any other means mutually agreed upon by both
Parties. If a Party installs a check meter, the other Party shall have
the right to have its representative at any calibration test of the
check meter. A Party installing a check meter shall perform all
maintenance and calibration tests of the check meter at its own
expense, and shall furnish the other Party with all readings obtained
from the check meter.
15.6 The Parties shall complete promptly the identification of all receipt
and Delivery Points for the various SUMF Items described in SCHEDULE 2
and all drawings related thereto.
15.7 If there is no Meter at a Delivery Point the allocation method set out
in SCHEDULE 6 shall be used. The Joint Operating Committee shall have
the authority to update and/or correct any allocation method, with any
updating and/or corrections being adjusted prospectively. Either Party
may, at its own expense, install a Meter in lieu of allocation.
15.8 Methods for allocating line losses and differences resulting from
measurement discrepancies shall be set out in SCHEDULE 2 and SCHEDULE
3.
ARTICLE 16: JOINT OPERATING COMMITTEE
16.1 The Supplier and the Purchaser shall jointly establish the Joint
Operating Committee to review the operation of this Agreement and the
supply of SUMF hereunder in an effort to ensure the smooth and
efficient operation of this Agreement. The structure and role of the
Joint Operating Committee is set out in SCHEDULE 5.
16.2 Every two (2) years, or as often as either Party may reasonably
require, the Joint Operating Committee will review the overall
effectiveness of this Agreement and will discuss possible opportunities
for improvement.
ARTICLE 17: MISCELLANEOUS
17.1 Both Parties shall perform their respective duties under this Agreement
(i) following standards applied by the industry in similar operations
and in keeping with good industry
32
practice and in compliance with applicable law and (ii) in a manner
each Party reasonably believes to be fair to the other Party.
17.2 The services under this Agreement shall be provided in accordance with
Shell's HSE and Technical Standards.
17.3 The Parties will keep each other timely informed about planned
turnarounds, shutdowns, major technical projects, capital expenditures
and any other major events which in each case are relevant to the
supply or cost of any SUMF Item and/or the operation of the Purchaser's
Property. The Supplier shall take such Reasonable Actions within its
control so as to minimise the impact to the Purchaser of any planned
turnaround, shutdown, major technical project, capital expenditure and
any other major event which may adversely impact the supply of any SUMF
Item, without prejudice to health, safety and environmental standards.
The Parties shall keep each other timely informed of any adjustments or
changes to these plans.
17.4 Purchaser explicitly waives any rights to claim pursuant to this
Agreement against Shell Nederland B.V. on the basis of the filing by
Shell Nederland B.V. of a "verklaring van aansprakelijkheid" under
Article 2:403 of the Dutch Civil Code.
ARTICLE 18: FORCE MAJEURE
18.1 A Party will not be in breach of this Agreement (except for breach of
an obligation to pay money due and payable under this Agreement) to the
extent:
(A) performance by the Party is delayed or prevented by Force
Majeure;
(B) the Party claiming relief under this Article promptly notifies
the other Party of the circumstances giving rise to Force
Majeure and their anticipated duration; and
(C) the Party so claiming relief undertakes to take Reasonable
Actions to remedy and overcome the cause of such Force Majeure
as promptly as possible.
18.2 Upon remedying or overcoming the circumstances giving rise to Force
Majeure, the Party claiming relief under this Article shall promptly
notify the other Party of the termination of such Force Majeure
condition.
18.3 If the Force Majeure in question prevails for a continuous period in
excess of thirty (30) days after the date on which the Force Majeure
begins, the Parties shall consult together with a view to determining
mutually acceptable measures to overcome the difficulties arising
therefrom.
18.4 "FORCE MAJEURE" means, in relation to either Party, an event, condition
or circumstance beyond the reasonable control of that Party and without
the fault or negligence of the Party claiming Force Majeure which
causes a delay or disruption in the performance by such Party of any of
its obligations under this Agreement including, without limitation:-
33
(A) fire, explosion or other disruption, mechanical breakdown,
electrical shortage or blackout, decline or shortages of supply,
and circumstances arising out of information technology not
being millennium compliant; and
(B) lock-outs, strikes and other industrial disputes.
For the avoidance of doubt, the settlement of a labour strike, lockout
or any other kind of labour dispute is not within the reasonable
control of the Party affected and the requirements of this Article
shall not oblige that Party to settle a strike, lockout or other labour
dispute on terms contrary to its wishes.
ARTICLE 19: DISPUTE RESOLUTION
19.1 Any Dispute arising out of or in connection with this Agreement,
excluding Invoice Disputes subject to ARTICLE 7.2(H) shall be
exclusively processed in accordance with this Article.
19.2 In the event of a Dispute, the Parties shall, within ten (10) days of a
written request by either Party to the other Party, meet in good faith
to resolve such dispute or differences.
19.3 Any Dispute which cannot be resolved by the Parties shall be submitted
to the Joint Operating Committee which shall endeavour to amicably
resolve the Dispute. The Parties shall provide the Joint Operating
Committee with such information as it reasonably requires to enable it
to determine the issues relevant to the Dispute.
19.4 Any Dispute which cannot be resolved by the Joint Operating Committee
shall be submitted to the Steering Committee which shall endeavour to
amicably resolve the Dispute. The Parties shall provide the Steering
Committee with such information as it reasonably requires to enable it
to determine the issues relevant to the Dispute.
19.5 Any Dispute which cannot be resolved by the Steering Committee shall be
submitted to mediation before a mediator selected by the Steering
Committee. The Parties shall bear their own costs for mediation and the
costs of the mediator shall be borne equally. If the Parties are unable
to select a mediator within fifteen (15) days or if the Dispute is not
resolved as a result of the mediation within sixty (60) days (or such
other period as may be agreed by the Parties), either Party may submit
the matter to arbitration for final, binding and exclusive settlement
by three arbitrators in accordance with the UNCITRAL Arbitration Rules,
with the President of the ICC Court of International Arbitration to act
as the appointing authority, or any other arbitration provided for in
SCHEDULE 1, such arbitration to be held in the country where the Site
is located at the place specified in SCHEDULE 1. Any arbitration
decision pursuant to this ARTICLE 19 shall be final and binding upon
the parties and judgment thereon may be entered in any court of
competent jurisdiction. Costs incurred by the Parties in carrying on
any arbitration proceeding hereunder (including reasonable attorneys'
fees and arbitration fees) shall be determined by the arbitrator by
reference to fault.
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19.6 Pending resolution of any Dispute, the Supplier shall consult with the
Purchaser with regard to any change to the specification of any SUMF
Item with which the Dispute is connected.
19.7 Resolution of any Dispute between the Parties involving payment of
money by one Party to the other shall include payment of interest at
the Interest Rate.
19.8 Each Party shall, in addition to all rights provided herein or provided
by law, be entitled to the remedies of specific performance and
injunction to enforce its rights hereunder.
ARTICLE 20: FURTHER ASSURANCE
20.1 Each Party shall at its own cost, from time to time on request, do or
procure the doing of all acts and execute or procure the execution of
all documents in a form satisfactory to the other Party which the other
Party may reasonably consider necessary for:
(A) giving full effect to this Agreement; and
(B) securing to the other Party the full benefit of the rights,
powers and remedies conferred upon the other Party in this
Agreement.
ARTICLE 21: COSTS AND EXPENSES
21.1 Save as otherwise stated in this Agreement, each Party shall pay its
own costs and expenses in relation to the negotiation, execution and
carrying into effect of this Agreement.
ARTICLE 22: ASSIGNMENT AND DELEGATION
22.1 The Purchaser shall be entitled to assign this Agreement, to any
Affiliate or to a lender or lenders for security purposes so long as
such lender is a bona fide financial institution with a business that
includes lending money and has a net worth in excess of 100,000,000
USD, without the prior written consent thereto of the Supplier (and
such lender or lenders shall have the right (without such prior written
consent) to further assign this Agreement in connection with the
exercise of their rights and remedies pursuant to such security
agreements). Purchaser shall provide Supplier notice of such assignment
promptly after any such assignment, but in any event within sixty (60)
days of such assignment. Except as provided above in this ARTICLE 22.1,
any other assignment of the Agreement by the Purchaser to a Third
Party, shall require the consent of the Supplier, such consent not to
be unreasonably withheld or delayed.
22.2 The Supplier shall be entitled to assign this Agreement to any
Affiliate or Third Party without the prior written consent thereto of
the Purchaser.
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22.3 Any assignment of this Agreement shall not relieve either Party of any
obligation or liability incurred hereunder and remaining wholly or
partially outstanding immediately prior to the time at which the
assignment is to take effect.
22.4 Each Party agrees to execute and deliver to the other Party and, if
applicable, its lenders, recognition and estoppel certificates, in form
and content consistent with ordinary and common practice in
transactions of the nature of this transaction, which instruments will
state the status of this Agreement as to whether a default exists and
will recognize any Third Party rights.
22.5 The Supplier may at its discretion procure from its Affiliates or any
Third Party certain information, advice, services and SUMF Items which
it is obliged to render or perform under this Agreement, or may
delegate to any Affiliate or Third Party the performance of its rights
and obligations under this Agreement, in order to assist the Supplier
in the efficient execution of this Agreement provided that the person
or company to whom delegation is made shall be capable of rendering the
services.
ARTICLE 23: SEVERABILITY
23.1 If any of the provisions of this Agreement is or becomes illegal, void
or unenforceable under the law of any jurisdiction, such provision
shall be deemed to be deleted from this Agreement and the remaining
provisions of this Agreement shall remain and continue in full force
and effect. In such event, this Agreement shall be modified to provide
the same benefits and burdens (including economic) that would have been
provided had this provision been deleted. In the event that the Parties
cannot agree on modifications, the Dispute shall be resolved pursuant
to ARTICLE 19.
23.2 The invalidity of one or more provisions of this Agreement shall not
affect:
(A) the legality, validity or enforceability in that jurisdiction of
any other provision of this Agreement; or
(B) the legality, validity or enforceability under the law of any
other jurisdiction of that or any other provision of this
Agreement.
ARTICLE 24: NO AGENCY OR PARTNERSHIP
24.1 Nothing contained in this Agreement and no actions taken by the Parties
under this Agreement shall constitute a partnership, joint venture,
association or other co-operative entity between the Parties or to
authorise either Party to represent the other or to contract on behalf
of the other Party. The Supplier is acting solely as an independent
contractor and is not an agent of the Purchaser. The Supplier's
provision of services and performance of its duties hereunder shall be
under the sole supervision, control and direction of the Supplier and
not the Purchaser.
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ARTICLE 25: REMEDIES AND WAIVER
25.1 The delay or failure of either Party at any time in exercising any
right, power or remedy provided by law or under this agreement shall in
no way:
(A) affect that right, power or remedy; or
(B) operate as a waiver of it.
25.2 The single or partial exercise of any right, power or remedy provided
by law or under this Agreement shall not preclude any other or further
exercise of it or the exercise of any other right, power or remedy.
25.3 The rights, powers and remedies provided in this Agreement are
cumulative and not exclusive of any rights, powers and remedies
provided by law.
25.4 The Parties acknowledge that each of them has had adequate opportunity
and bargaining strength to review, negotiate and revise this Agreement
to its satisfaction. They each expressly agree that the normal rule of
construction to the effect that any ambiguities are to be resolved
against the drafting Party shall not be employed in the interpretation
of this Agreement.
ARTICLE 26: ENTIRE AGREEMENT AND VARIATION
26.1 This Agreement constitutes the entire and only agreement between the
Parties relating to the furnishing of SUMF Items by the Supplier to or
for the Purchaser at the Site and supersedes any Pre-contractual
Statement.
26.2 Each of the Parties acknowledges on its own behalf and on behalf of
each of its Affiliates that, in agreeing to enter into this Agreement,
it has not relied on any Pre-contractual Statement or any statement
contained in any Transaction Document or the IPTLA (except those set
out in this Agreement).
26.3 Without limiting any rights under any of the Transaction Documents or
the IPTLA, each Party waives all rights and remedies which, but for
this Article, might otherwise be available to it in respect of any such
Pre-contractual Statement, provided that nothing in this Article shall
limit or exclude any liability for fraud.
26.4 Any amendment or modification of this Agreement shall be ineffective
unless reduced to writing and signed by or on behalf of a duly
authorised representative of each of the Parties.
ARTICLE 27: NOTICES
27.1 All notices, requests, waivers, demands, directions and other
communications required or permitted to be given under this Agreement
shall be in writing and in English. This
37
provision shall not prevent communications relating to the operations
of the Plant from being made in the language spoken in the jurisdiction
in which the Plant is situated. Notices may be given in electronic form
(including facsimile transmission and telex communications and e-mail)
and shall be delivered personally, sent by facsimile transmission, or
e-mail, sent by nationally recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage
prepaid, to the other Parties at their addresses set forth in the
introductory paragraphs of this Agreement (or such other address for a
Party as shall be specified by like notice from such Party to the other
Party) and, in the case of the Purchaser with copies to:
Shell Epoxy Resins, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Apollo Management IV, L.P.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices and other communications shall be deemed to have been
given and received, (i) in the case of personal delivery, delivery by
facsimile transmission or e-mail, on the date of delivery, if delivered
during business hours on a business day or, if not so delivered, the
next succeeding business day (ii) in the case of delivery by nationally
recognized overnight courier, on the second business day following
dispatch and (iii) in the case of mailing, on the fifth business day
following such mailing.
27.2 A Party may change its notice details on giving notice to the other
Party of the change in accordance with this ARTICLE 27. That notice
shall only be effective on the date falling three (3) clear Business
Days after the notification has been received or such later date as may
be specified in the notice. Any notice so delivered will comply with
the terms of this ARTICLE 27.
ARTICLE 28: GOVERNING LAW
28.1 This Agreement shall be governed by and construed in accordance with
the laws of England.
28.2 A person who is not a party to this Agreement has no right under the
Contract (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce any term of this
Agreement.
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ARTICLE 29: LANGUAGE
29.1 If this Agreement is translated into any language other than the
English language, the English version of this Agreement shall prevail.
ARTICLE 30: COUNTERPARTS
30.1 This Agreement may be executed in any number of counterparts, and by
the Parties on separate counterparts, but shall not be effective until
each Party has executed at least one counterpart.
30.2 Each counterpart shall constitute an original of this Agreement, but
all the counterparts shall together constitute but one and the same
instrument.
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first above written.
Signed by: Illegible )
)
For and on behalf of )
SHELL EPOXY RESINS )
NEDERLAND B.V. )
Signed by: Illegible )
)
For and on behalf of )
SHELL NEDERLAND )
CHEMIE B.V. )