Dated effective November 1, 2004 SHELL CHEMICAL L.P. and RESOLUTION PERFORMANCE PRODUCTS LLC SECOND AMENDED AND RESTATED NORCO SITE SERVICES, UTILITIES, MATERIALS AND FACILITIES AGREEMENT
Exhibit 10.45
Dated effective November 1, 2004
SHELL CHEMICAL L.P.
and
RESOLUTION PERFORMANCE PRODUCTS LLC
SECOND AMENDED AND RESTATED
NORCO SITE SERVICES, UTILITIES,
MATERIALS AND FACILITIES
AGREEMENT
TABLE OF CONTENTS
Page | ||
ARTICLE 1 DEFINITIONS |
2 | |
ARTICLE 2 INTERPRETATIONS |
9 | |
ARTICLE 3 OBJECT AND SCOPE |
10 | |
ARTICLE 4 SUMF CHARGES |
12 | |
ARTICLE 5 SUMF CHARGES WITH REFERENCE TO COST |
12 | |
ARTICLE 6 PAYMENT TERMS |
15 | |
ARTICLE 7 ANNUAL FORECAST, ANNUAL PLAN & BUDGET AND CURTAILMENT |
16 | |
ARTICLE 8 LIABILITY/INDEMNIFICATION |
17 | |
ARTICLE 9 TERM AND TERMINATION |
23 | |
ARTICLE 10 INTELLECTUAL PROPERTY RIGHTS |
27 | |
ARTICLE 11 CONFIDENTIALITY |
27 | |
ARTICLE 12 ADDITIONAL SUMF AND CAPITAL IMPROVEMENT TO SUMF ASSETS |
28 | |
ARTICLE 13 DAMAGE TO SUMF ASSETS |
29 | |
ARTICLE 14 METERING OR ALLOCATION OF SUPPLY, CONSUMPTION AND DELIVERY |
30 | |
ARTICLE 15 MONITORING COMMITTEE |
31 | |
ARTICLE 16 MISCELLANEOUS |
32 | |
ARTICLE 17 FORCE MAJEURE |
33 | |
ARTICLE 18 DISPUTE RESOLUTION |
34 | |
ARTICLE 19 FURTHER ASSURANCE |
35 | |
ARTICLE 20 COSTS AND EXPENSES |
35 | |
ARTICLE 21 ASSIGNMENT AND DELEGATION |
35 | |
ARTICLE 22 SEVERABILITY |
36 | |
ARTICLE 23 NO AGENCY OR PARTNERSHIP |
36 | |
ARTICLE 24 REMEDIES AND WAIVER |
37 | |
ARTICLE 25 ENTIRE AGREEMENT AND VARIATION |
37 | |
ARTICLE 26 NOTICES |
38 | |
ARTICLE 27 NO THIRD PARTY BENEFICIARIES |
38 | |
ARTICLE 28 GOVERNING LAW |
38 | |
ARTICLE 29 COUNTERPARTS |
38 | |
ARTICLE 30 TRUE UP OF FINAL INVOICE OF SUMF AGREEMENT |
39 |
EXHIBIT A | INFORMATION | |
SCHEDULE 3.1 | SUMF ITEMS FROM RPP TO Shell | |
SCHEDULE 3.2 | SUMF ITEMS FROM Shell TO RPP | |
SCHEDULE 14.1 | METER TABLE |
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SECOND AMENDED AND RESTATED NORCO SITE
SERVICES, UTILITIES, MATERIALS & FACILITIES AGREEMENT
THIS SECOND AMENDED AND RESTATED NORCO SITE SERVICES, UTILITIES, MATERIALS & FACILITIES AGREEMENT is entered into and will be effective as of the 1st day of November, 2004 by and between:
1. | Shell Chemical L.P., a Delaware limited partnership, (either referred to as “Supplier” or “Purchaser” of specific SUMF, as the case may be, or as “Shell”), with its principal office at 000 Xxxxxxxxx, Xxxxxxx Xxxxx 00000; and |
2. |
Resolution Performance Products LLC (either referred to as “Purchaser” or “Supplier” of specific SUMF, as the case may be, or as “RPP”), a limited liability company organized under the laws of Delaware, with its principal office at 0000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx Xxxxx 00000. |
WHEREAS:
(A) | Shell or Affiliates of Shell own and operate a chemical/integrated oil and chemical manufacturing Site at Norco, Louisiana; |
(B) | RPP owns and operates certain manufacturing facilities at the Site at Norco, Louisiana (the “ RPP Facilities”); |
(C) | The Parties own and/or have leased assets which are integrated with or are integral to both their own and the other Party’s manufacturing operations at the Site; |
(D) | The Parties have entered into that certain First Amended and Restated Norco Site Services, Utilities, Materials and Facilities Agreement (the “SUMF Agreement”) dated November 1, 2000, related to their respective operations at the Site and the supply and purchase of certain SUMF Items in connection with such operations and assets; |
(E) | Shell has entered into certain transaction documents with RPP for the sale to RPP of certain utilities and shipping assets at Norco; and |
(F) | In connection with the closing of such sale transaction, Shell and RPP want to amend and restate the SUMF Agreement as set forth below. |
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NOW, THEREFORE, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
In this Agreement and the Schedules hereto:
“Affiliate” means in relation to either Party:
(a) | its Parent Company (or in the case of Shell, its Parent Companies or either of them); |
(b) | any company which is for the time being directly or indirectly controlled by the Parent Company (or in the case of Shell, the Parent Companies or either of them); or |
(c) | in the case of a Party which does not have a Parent Company, any company which is for the time being directly or indirectly controlled by that Party. |
For this purpose:
(i) | a company is directly controlled by another company (or, in the case of Shell, companies) if that other company beneficially holds shares carrying the majority of votes at a general meeting of the first mentioned company; and |
(ii) | a company is indirectly controlled by the Parent Company if a series of companies can be specified, beginning with the Parent Company and ending with the particular company, that are so related such that that each company of the series except the Parent Company is directly controlled by one or more of the preceding companies in the series. |
“Agreement” means this Second Amended and Restated Norco 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 & Budget” has the meaning given to this term in Article 7.
“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 as a result of insolvency (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, reorganization 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, which proceeding shall not have been dismissed within 90 days following its institution.
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“Business Day” means any day of the week other than Saturday, Sunday or a public holiday at the location of the Site.
“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.
“Delivery Point(s)” means the location(s) specified in the Schedules to which each SUMF Item will be delivered and at which title to, and risk of loss of, a SUMF Item passes from the Supplier to the Purchaser.
“Direct Site Costs” means the fully burdened and overheaded fixed costs (without other xxxx-up or profit factor, incurred at the Site by Supplier in providing SUMF but which do not vary primarily based on consumption, usage or production. Direct Site Costs include personnel costs for the personnel involved in the provision of SUMF and costs of any SUMF Items procured by Supplier for Purchaser from a Third Party pursuant to this Agreement. (Personnel costs includes all costs related to workers compensation programs.) 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, 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 contributions for the relevant employees will be included in the Direct Site Costs. Further, for the avoidance of doubt, Direct Site Costs do not include charges for the depreciation or amortization of SUMF Assets, and fines resulting from the violation by Supplier of Legal Requirements. In addition, Direct Site Costs do not include any costs which the Supplier or any of its Affiliates is required to bear under any Transaction Document (other than this Agreement or the Norco Lease). Costs which the Supplier or any of its Affiliates is required to bear under this Agreement, the Norco Ground Lease or the Second Norco Ground Lease shall be borne in accordance with the terms hereof and thereof. The foregoing shall not be deemed to modify any Transaction Document other than this Agreement including any express payment or reimbursement obligation of the Purchaser to the Supplier under any Transaction Document other than this Agreement.
“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 termination or invalidity of this Agreement or any provision of it).
“Effective Date” means November 1, 2004.
“Employee” means any employee of the applicable Party.
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“Employee Services” shall mean emergency response, medical services, borrowing of employees of either of the Parties and the site security services.
“Environmental Agreement” means the Environmental Agreement dated as of the November 1, 2000 by and between Shell and Shell Epoxy Resins LLC.
“Environmental Condition” means any (i) Site Contamination or (ii) Exposure Liability.
“Environmental Law” means any and all applicable federal, state or local laws, statutes, ordinances, orders, codes, rules, regulations, judgments, decrees, injunctions or agreements with any Governmental Authority, relating to (i) the protection of human health relating to or arising out of the presence of, Release of, or exposure to a Hazardous Substance; or (ii) the protection of the environment; or (iii) governing the handling, use, generation, treatment, storage, transportation, disposal or Release of Hazardous Substances. Environmental Law also include civil or common law doctrines (including negligence, nuisance, trespass, personal injury and property damage) to the extent that claims under such doctrines arise out of the presence, Release or exposure to a Hazardous Substance.
“Exposure Liability” means Loss or Damage arising from or related to exposure or injury to any Person (including death) caused by, related to, arising from, or in connection with the generation, handling, use, treatment, storage, transportation, disposal, discharge, presence, Release, threatened Release or emission of any substance within, at, on or underlying the SUMF Assets or any of the land or groundwater underlying any of the SUMF Assets.
“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.
“Firm Capacity Reservation” means the maximum volume of a SUMF Item to be supplied under this Agreement as specified in the Schedules 3.2 A and 3.2 C.
“Fixed Operating Costs” means Direct Site Costs and Overheads.
“Fixed Operating Cost Percentage” has the meaning set forth in the Schedules.
“Force Majeure” has the meaning given to this term in Section 17.4.
“Governmental Authority” means any federal, state, municipal, local, or other governmental, legislature, regulatory body, administrative agency, commission, official, department, board or other governmental subdivision, court, tribunal, arbitral body or other governmental agency.
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“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 affect the life or property of another.
“Hazardous Substances” shall mean hazardous or toxic substances, materials, or wastes, including those substances, materials, and wastes listed in the United States Department of Transportation Hazardous Materials Table (49 C.F.R. Section 172.101) or by the Environmental Protection Agency under 40 C.F.R. Part 302.4 and amendments thereto, petroleum, petroleum constituents, petroleum products, additives to petroleum products, petroleum by-products, petroleum wastes, or such substances, materials, and wastes which are or become regulated under any applicable state or federal law, including any material, waste or substance which is (i) designated as a “hazardous substance” pursuant to section 311 of the Clean Water Act, 33 USC § 1251 et seq. (33 USC § 1321), or listed pursuant to section 307 of the Clean Water Act (33 USC § 1317); (ii) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response Compensation and Liability Act, 42 USC § 9601 et seq., (42 USC § 9601); or (iii) defined as “hazardous waste” pursuant to Section 9 of the Louisiana Hazardous Waste Control Law, 30 La. Rev. Stat. Xxx. Section 2173.
“HSE” means health, safety and/or environment.
“Infrastructure Charge” means the charge related to infrastructure used to provide SUMF Items which is a charge in lieu of depreciation and maintenance capital on existing SUMF Assets.
“Inflation Rate” shall for a given yearly period equal the following fraction (rounded to the fourth decimal place): (x) the numerator shall equal the average Published Inflation Index for the calendar year preceding the commencement of such yearly period, and (y) the denominator which shall equal the average Published Inflation Index of the calendar year preceding that for the numerator described above (i.e. for a yearly period commencing April 1, 1999, the numerator would have equaled 389.5 (the average Published Inflation Index for 1998).
“Intellectual Property Transfer and License Agreement” means the agreement between Shell Oil Company and Shell Epoxy Resins LLC relating to intellectual property transfer and licensing dated November 14, 2000.
“Inter-Bank Offered Rate” means a percentage equal to the rate specified in Exhibit A.
“Interest Rate” means a percentage equal to the Inter-Bank Offered Rate specified in Exhibit A plus one point five percent (1.5%) p.a.
“Legal Requirements” means all applicable federal, state and local laws, regulations, rules, ordinances, codes, standards and rules of common law.
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“Loss or Damage” means any loss, damage or injury of whatever nature, including without limitation, property damage, personal injury, disease and death.
“Meter” has the meaning given to this term in Article 14.
“Monitoring Committee” means the committee to be formed of RPP’s Representative and Shell’s Representative which shall have the functions set out in Article 15.
“MSA” means that certain Master Sales Agreement dated as of the July 10, 2000 among Shell Oil Company, Resin Acquisition LLC and Shell Epoxy Resin Inc.
“Norco Ground Lease” means lease entered into between Shell Oil Company and Shell Epoxy Resins LLC dated as of November 1, 2000 related to the Site.
“Overheads” means, without duplication of any Direct Site Cost, in relation to each SUMF Item, an allocation of the indirect fully burdened and overheaded 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 other xxxx-up or profit factor), including, but not limited to, the following (where they are not provided as separate SUMF Items): Site management and general services; 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. Further, for the avoidance of doubt, Overheads do not include charges for the depreciation or amortization of SUMF Assets or other assets, and fines resulting from the violation by Supplier of Legal Requirements. In addition, Overheads do not include any costs which the Supplier or any of its Affiliates is required to bear under any Transaction Document (other than this Agreement, the Norco Ground Lease or the Second Norco Ground Lease). Costs which the Supplier or any of its Affiliates is required to bear under this Agreement the Norco Ground Lease or the Second Norco Ground Lease shall be borne in accordance with the terms hereof and thereof. The foregoing shall not be deemed to modify any Transaction Document other than this Agreement including any express payment or reimbursement obligation of the Purchaser to the Supplier under any Transaction Document other than this Agreement.
“Parent Company” means:
(i) in relation to Shell, N.V. Koninklijke Nederlandsche Petroleum Maatschappij and The “Shell” Transport and Trading Company, p.l.c. or either of them; and
(ii) in relation to RPP, Apollo Management L.P.
“Party” means Shell or RPP; Parties means Shell and RPP.
“Person” means any natural person, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, business, government or other entity.
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“Purchaser Indemnitees” means the Purchaser, its Affiliates, officers, directors, employees, agents, servants, and other representatives of each of them
“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.
“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.
“Published Inflation Index” for a given calendar year shall equal the index in the “Chemical Engineering Plant Cost Index” for that calendar year as published in the Chemical Engineering Magazine. If the Published Inflation Index is discontinued, the Parties shall adopt by mutual agreement a replacement index that most closely measures the price changes measured by the original Published Inflation Index that is discontinued. If the basis of reporting of the Published Inflation Index is changed from the basis in effect on the date hereof, then the Published Inflation Index shall be correspondingly changed.
“Purchaser” means the Party who purchases a particular SUMF Item from the Supplier.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing of Hazardous Substances into the environment.
“Remediation Activity” means any investigation, monitoring, correction or remediation of an Environmental Condition, including but not limited to soil and groundwater sampling, activities associated with the construction, operation or maintenance of remediation or treatment equipment and systems, excavation and/or treatment of contaminated soil, groundwater and free product, measures to contain, monitor or limit contamination or other works in relation to any Environmental Condition.
“RPP Facilities” means the HPRU, AC/ECH plants, utilities, shipping, and other RPP operating areas situated at the West Site and the associated assets, facilities and rights.
“Second Norco Ground Lease” means that Second Norco Ground Lease and Grant of Servitudes between Shell Chemical LP and Resolution Performance Products LLC, dated as of November 1, 2004.
“Shell Facilities” means the Electrical Utilities and Biotreater Units and the Butylene storage and distribution system situated at the West Site and the associated assets, facilities and rights.
“Site” means the commercial or industrial complex or facilities described in Exhibit A.
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“Site Contamination” means environmental pollution, contamination, degradation, damages, exposure or injury to property caused by, relating to, arising from, or in connection with the generation, handling, use, treatment, storage, transportation, disposal, discharge, presence, Release, threatened Release, or emission of any substance within, at, on or underlying the SUMF Assets or any of the land or groundwater underlying any of the SUMF Assets.
“Steering Committee” means a steering committee consisting of senior representatives of RPP and Shell which has responsibilities beyond the daily operation of the SUMF Assets and RPP Facilities.
“SUMF” means the site services, utilities, materials and facilities to be supplied under this Agreement.
“SUMF Assets” means those assets of the Supplier 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” means the Party who supplies or operates a particular SUMF Item.
“Supplier Indemnitees” means the Supplier, its Affiliates, officers, directors, employees, agents, servants, and other representatives of each of them.
“Third Party” means any person or company other than the Supplier, the Purchaser or their respective Affiliates.
“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 their respective Affiliates or any of their respective Employees.
“Transaction Documents” means (i) the MSA, and all documents executed in connection therewith or relating thereto, including, without limitation, the following which are defined in the MSA: the SUMF Agreement, the Intellectual Property Transfer and License Agreement, the Environmental Agreement and the Norco Ground Lease; and (ii) the Asset Purchase Agreement among Shell Chemical LP, SCOGI Louisiana Holdings LLC and Resolution Performance Products LLC, dated effective November 1, 2004, and all documents executed in connection therewith or relating thereto, including, without limitation, the Second Norco Ground Lease.
“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.
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“Variable Costs” means those operating costs, without duplication of any Direct Site Cost, incurred at the Site by Supplier in providing SUMF which vary primarily based on consumption, usage or production, and which charges are reconcilable with the cost accounting system of the Supplier existing as of the Effective Date and as from time to time modified by Supplier (if applied to the entire Site), including the costs of air, cooling water, fuel, nitrogen, process materials, steam and applicable taxes, but not depreciation.
“West Site” means the facilities described in Exhibit A.
“Willful 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 was 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, Exhibits and Schedules are to Articles of, and Exhibits and Schedules to, this Agreement; |
(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, any federal, state, local or municipal governments, or any agency of a federal, 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” are to United States dollars; |
(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; |
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(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; and |
(j) | a reference to this “Agreement” or any other agreement or document or statute or statutory provisions 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 Exhibits or Schedules or attachments hereto, the relevant Exhibit, Schedule or attachment shall prevail unless expressly stated otherwise in this Agreement. |
2.4 | Purchaser and Supplier acknowledge that notwithstanding any provision to the contrary in this Agreement, the provisions of Clause 10.3 of 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 MSA) 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 (as defined in the Environmental Agreement) or Seller Indemnified Party (as defined in the Environmental Agreement) 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. In the event of conflict between this Agreement and the Environmental Agreement, the Environmental Agreement shall control; provided however that the Parties do not intend that anything in this Agreement be interpreted to expand the scope of the Environmental Agreement beyond that which existed at its effective date. |
ARTICLE 3
OBJECT AND SCOPE
3.1 | Subject to Section 7.5 and Article 17, RPP as the Supplier agrees to supply Shell and Shell as Purchaser agrees to purchase the SUMF Items described herein under the terms and conditions set out in this Agreement. Except as otherwise provided in Section 3.5 and Schedule 3.1, Shell may purchase the amounts of each SUMF Item set forth in Schedule 3.1 from RPP at quantities consistent with Shell’s historical usage of such SUMF Items for operation of the Shell Facilities, and at quantities consistent the needs of Shell, RPP and other Users regarding operations of the dock located at the West Site if Shell takes over operation of such dock as described in Schedule 3.1 J of this Agreement, until termination of such SUMF Item in accordance with the provisions of this Agreement. |
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3.2 | Subject to Section 7.5 and Article 17, Shell as the Supplier agrees to supply RPP and RPP as Purchaser agrees to purchase the SUMF Items described herein under the terms and conditions set out in this Agreement. Except as otherwise provided in Section 3.5 and Schedule 3.2, RPP may purchase the amounts of each SUMF Item set forth in Schedule 3.2 up to its Firm Capacity Reservation, or as otherwise provided in Schedule 3.2, from Shell until termination of such SUMF Item in accordance with the provisions of this Agreement. |
3.3 | A description and, where appropriate, the technical specifications of the SUMF Items which the Parties have agreed to provide hereunder, 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 this Agreement. |
3.4 | Any Firm Capacity Reservation amounts for any SUMF Item as agreed by the Parties are set out in Schedules 3.2A and 3.2C. |
3.5 | 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 use reasonable efforts to accommodate such request, but, except as set forth in the next sentence, with no obligation to make such change. The Purchaser shall have the right upon three (3) years advance written notice (or such shorter period of time as may be required to terminate such SUMF Item under the applicable schedule) to reduce its Firm Capacity Reservation for such SUMF Item provided hereunder and when reduced receive a pro rata reduction in the Fixed Operating Costs (if any) and Infrastructure Fees (if any) for such SUMF Item. The Purchaser may not, however, claim a reduction in excess of fifty percent (50%) of its initial Firm Capacity Reservation (as of the Effective Date). In addition, annual decreases in the Purchaser’s Firm Capacity Reservation shall be limited to no more than ten percent (10%) of its initial Firm Capacity Reservation per year until the total reduction requested (up to the fifty percent maximum limit) is reached. |
3.6 | 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 the applicable Schedule. |
3.7 | SUPPLIER MAKES NO REPRESENTATIONS OR WARRANTIES EXPRESS OR IMPLIED WITH RESPECT TO THE 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, WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR ADEQUACY AS TO THE SUMF ITEMS. SUPPLIER PROVIDES NO WARRANTY FOR THE |
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PERFORMANCE OF ANY COMPUTER SYSTEMS, DIGITAL DEVICES AND COMPONENTS THEREOF. PURCHASER ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY SET FORTH HEREIN, NO REPRESENTATIONS OR WARRANTIES ARE BEING MADE HEREIN AND PURCHASER RELEASES AND RELIEVES SUPPLIER FROM AND HEREBY WAIVES ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES. |
ARTICLE 4
SUMF CHARGES
4.1 | 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 as specified in the relevant Schedules and as provided in Article 5. In no event shall SUMF Charges include any costs charged to Purchaser under any other agreement with the Supplier or any of its Affiliates. The SUMF Charges shall be subject to adjustment as provided elsewhere in this Agreement. |
4.2 | In addition to the SUMF Charges set forth in Section 4.1 and the Schedules, the Purchaser shall pay to the Supplier 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 pay to the Supplier any increase in the cost of providing a SUMF Item resulting from a change in local, state, or federal tax law. If the Purchaser claims, in good faith, to be exempt from any such tax, it shall provide the Supplier an executed Louisiana tax exemption certificate, or a Louisiana sales tax direct payment permit. The charges to be paid by Purchaser under this Section 4.2 shall be without duplication to the charges set forth in the Schedules and Section 4.1. |
ARTICLE 5
SUMF CHARGES WITH REFERENCE TO COST
For the SUMF Items for which the charges are to be determined wholly or partly by reference to cost, the following shall apply:
5.1 | (a) Except as otherwise provided in this Article 5 or in the Schedules, the Purchaser shall pay: |
(i) | its share of Variable Costs for such SUMF Item based on the Purchaser’s consumption of such SUMF Item; |
(ii) | its share of Fixed Operating Costs as set forth in the Schedules; and |
(iii) | the Infrastructure Charge specified in the Schedules. |
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5.2 | The Variable Costs, Fixed Operating Costs and Infrastructure Charges 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. 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 Parties expressly acknowledge that any Dispute pursuant to this Section 5.2 is subject to the provisions of Article 18. |
5.3 | 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 cost (calculated using the proportion of financial participation in the benefit) up to but not in excess of the benefit derived. |
The Purchaser shall pay the reasonable costs, including personnel termination costs (including those actuarially determined), resulting from the Supplier’s fixed cost reduction efforts in response to a permanent or long-term reduction or termination of demand by the Purchaser of such SUMF Item pursuant to this Agreement.
5.4 | The Purchaser shall bear the costs, of any redundancy program required as a result of manpower productivity improvements to such SUMF Item in proportion to the reduction of the relevant SUMF Charges to the Purchaser before and after the productivity improvement as compared to such reduction of SUMF Charges to all other Users up to, but not in excess of such reduction in SUMF Charges. Notwithstanding anything contained in this Agreement to the contrary, (i) the Purchaser shall not be responsible for any costs of termination by the Supplier of an employee unless such termination occurs within 180 days from the date of reduction or termination by the Purchaser of such SUMF Item, (ii) the Purchaser shall only be responsible for (A) termination costs paid to such a terminated employee in accordance with the Supplier’s policies in effect on the date of such reduction or termination and (B) salaries and benefits which are provided to such a terminated employee pursuant to the Supplier’s policies in effect on the date of such reduction or termination for up to sixty (60) days following such date and (iii) an employee who is transferred by the Supplier to an Affiliate as a result of any such termination or reduction shall not be considered a terminated employee for purposes of Section 5.3 or this Section 5.4 unless such transfer results in severance costs. |
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5.5 | The Supplier shall keep accurate books and records of its activities relevant to such SUMF Items for at least three (3) years after the calendar year in question or such longer period as may be required by law. |
5.6 | To verify the correctness of any invoices issued by the Supplier for such SUMF Items and payments therefore made hereunder for the current calendar year and for any of the three (3) preceding years and to verify the implementation of the Supplier’s curtailment and other procedures, the Purchaser, 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 Purchaser’s cost, an independent auditor perform an audit for such purposes. |
The Supplier shall provide such auditors with the necessary data and explanations reasonably necessary for the calculation of the SUMF Charges for such SUMF Item and the basis therefor.
The Purchaser undertakes to procure that such auditors are bound by obligations of confidentiality at least as strict as those set out in Article 11.
Any report produced by such auditors shall be provided to both Parties and shall state the results of the aforementioned verifications. If such report reveals that errors have been made and that the Purchaser was overcharged or undercharged by an amount equal to or greater than USD 50,000, 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 said errors and to enable the Parties to avoid recurrence thereof.
If the audit report reveals an overcharge in an amount equal to or greater than USD 50,000, the Supplier shall pay the amount of the overcharge plus interest plus liquidated damages in the amount of USD 50,000, unless the Supplier successfully disputes the conclusions of the report. If the audit report reveals an underpayment in an amount equal to or greater than USD 50,000, the Purchaser shall pay the amount of the underpayment plus interest unless the Purchaser successfully disputes the conclusions of the report. Interest on any overpayment or underpayment shall accrue at the Interest Rate from the date the overpayment was made or the underpayment amount would otherwise have been due until the date of refund or payment, as applicable.
Any audit shall be pursued diligently and completed no later than ninety (90) days after its commencement and any claims must be made in writing within ninety (90) days following completion of the audit. If either Party submits a claim following audit, and the Parties are unable to resolve the claim within sixty (60) days, the matter will be submitted for Dispute Resolution, in accordance with the provisions of Article 18.
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ARTICLE 6
PAYMENT TERMS
6.1 | 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. |
6.2 | Unless otherwise set out in the relevant Schedules, the provisions set out below apply: |
(a) |
Beginning in the calendar month immediately following the Effective Date and continuing each month until the termination of this Agreement, Supplier shall provide to the Purchaser an invoice on or before the fifteenth (15th) day of the month. The invoice shall be in an amount equal to the prior month’s costs required to be paid by the Purchaser. The Purchaser shall, on or before the last day of each month, pay to Supplier all amounts invoiced by Supplier except as set forth this Section 6.2. |
(b) | The final reconciliation for a year shall be made within the first sixty (60) days of the end of such preceding year or such other period as may be agreed in writing. Overcharges or undercharges, plus Interest at the Interest Rate, shall be credited or debited in the first billing cycle of the next accounting period. |
(c) | The invoices shall be broken down in sufficient detail to indicate the SUMF Charges for each particular 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. |
(d) | Subject to Section 6.2(e) and 6.2(f), the Purchaser shall pay each invoice on or before the due date to which such invoice relates. From the due date until actual payment, interest will accrue on the amount owing at the Interest Rate. |
(e) | If the Purchaser disagrees with an amount invoiced, the Purchaser shall advise the Supplier in writing of the amount disputed within thirty (30) days of the date of the invoice and the reason why the Purchaser considers the SUMF Charges not to be properly made. Subject to Section 6.2(f), the Supplier permits the Purchaser to defer payment of the disputed invoice amount, and only that amount, if the disagreement cannot be resolved before the normal due date. Payment of the undisputed portion of an invoice shall not constitute approval of the entire invoice. Any such deferred payment shall bear interest at the Interest Rate from the original due date until the date on which actual payment is made. |
(f) | 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 |
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thirty (30) days after receipt of such payment a response answering the question in reasonable 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 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 as such firm shall deem necessary to make a recommendation to the Parties for a resolution of 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 35,000, in which case the costs of retaining such firm shall be borne by the Supplier. The recommendation of the auditors shall be final and binding on the parties and not subject to challenge and resolution under Article 18 and judgment thereon may be entered in any court of competent jurisdiction. |
(g) | Any refund of a disputed amount, or payment of any additional sums, 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 made. |
ARTICLE 7
ANNUAL FORECAST, ANNUAL PLAN & BUDGET AND CURTAILMENT
7.1 | For operational forecast purposes only, unless the Purchaser otherwise submits to Supplier on or before 1st June in each calendar year a non-binding annual forecast of its quarterly volume requirements for each SUMF Item for the forthcoming calendar year and estimates of its volume requirements for each SUMF Item for the following four (4) 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. |
7.2 | Not later than 1st December in each calendar year or such other date as the Parties may agree, the Supplier shall prepare and submit to the Purchaser an operational forecast of the SUMF Charges for the forthcoming calendar year. |
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7.3 | The Purchaser shall review the forecast referred to in Section 7.2. The Purchaser shall raise any objections it may have no later than thirty (30) days after submission of such forecast, or by such other time as the Parties may agree. Disputes over the forecast shall be communicated to the Monitoring Committee for resolution. |
7.4 | Upon the approval of both Parties, the forecast referred to in Section 7.2 shall become the “Annual Plan & Budget.” Under no circumstance shall the Annual Plan & Budget (or lack thereof) relieve the Purchaser from its payment obligations under Articles 4, 5 and 6 for SUMF Items provided to it under this Agreement. |
7.5 | In the event that any SUMF Items are not available at the planned volumes for any reason whatsoever, the Supplier shall implement the then current curtailment procedures followed by the Supplier and as specified in the applicable Schedules. Unless otherwise provided in any Schedule hereto, such curtailment procedures will be based upon the following priorities: (i) safety; (ii) minimizing adverse environmental impact; and (iii) sustaining the operations of both Shell and RPP and the Site as a whole. |
7.6 | The Supplier shall have the right to selectively impose curtailment based upon the foregoing considerations regardless of the cause of the curtailment and without liability for any Loss or Damage. This Section 7.6 does not permit a Supplier to curtail based on business considerations that prefer one Party. The Supplier hereby represents and warrants to the Purchaser that it has made available to the Purchaser a complete set of the curtailment guidelines in effect as of the date hereof at the Site. |
7.7 | 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 8
LIABILITY/INDEMNIFICATION
8.1 | Damage to Assets and Employees. |
(a) Except for environmental matters that are covered in Sections 8.3, 8.4, 8.5, and 8.6, and except as provided in Sections 8.1(b), 8.2(a)(iii), 8.2(b)(iii) and as set forth in Section 8.2(c), each Party shall be responsible for any Loss or Damage to such Party’s Property (including any SUMF Asset of such Party), and with respect to any SUMF Assets shall be responsible for restoring such SUMF Asset, arising out of the performance or nonperformance of this Agreement.
(b) If any Loss or Damage to a SUMF Asset shall occur by reason of the Gross Negligence or Willful Misconduct of a Party, such Party shall be responsible for the cost of restoration of such SUMF Asset.
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(c) Except for environmental matters that are covered in Sections 8.3, 8.4, 8.5 and 8.6, and except as provided in Section 8.2, each Party shall be responsible for any Loss or Damage of such Party to any employee of such Party arising out of the performance or non-performance of this Agreement.
8.2 (a) Purchaser General Indemnity. Except for environmental matters which are covered by Sections 8.3, 8.4, 8.5 and 8.6 and subject to the limitations set forth in this Article 8, the Purchaser shall be responsible for and shall indemnify, defend and hold harmless the Supplier Indemnitees from and against the following Loss or Damage arising out of the performance or nonperformance of this Agreement:
(i) | any Loss or Damage to any of the Purchaser’s Employees attributable to (a) the Purchaser’s negligence (excluding any Loss or Damage attributable to Supplier’s negligence and excluding any Loss or Damage attributable to performance of Employee Services by Purchaser’s Employees), or (b) the Purchaser’s Gross Negligence or Willful Misconduct; |
(ii) | any Loss or Damage to any of the Supplier’s Employees not arising from their performance of Employee Services attributable to the Purchaser’s Gross Negligence or Willful 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 Willful Misconduct; |
(iv) | any Loss or Damage resulting from Third Party Claims attributable to (a) the Purchaser’s negligence or (b) the Purchaser’s Gross Negligence or Willful Misconduct; and |
(v) | any Loss or Damage to any of Supplier’s Employees arising from their performance of Employee Services attributable to: |
(a) | the Purchaser’s Gross Negligence or Willful Misconduct, |
(b) | the Purchaser’s negligence, or |
(c) | the Supplier’s negligence (but not the Supplier’s Gross Negligence or Willful Misconduct); |
provided, however, that the Purchaser’s aggregate liability for any Loss or Damage arising under Section 8.2(a)(ii) or 8.2(a)(iii) shall not (i) in any calendar year, exceed four million ($4,000,000) dollars or (ii) for loss resulting from any single event, exceed four million ($4,000,000) dollars.
(b) Supplier General Indemnity. Except for environmental matters which are covered by Sections 8.3, 8.4, 8.5 and 8.6 and subject to the limitations set forth in this Article 8, the Supplier shall be responsible for and shall indemnify, defend and hold harmless the Purchaser Indemnitees from and against the following Loss or Damage arising out of the performance or nonperformance of this Agreement:
(i) | any Loss or Damage to any of the Supplier’s Employees attributable to either (a) the Supplier’s negligence (excluding any Loss or Damage attributable to Purchaser’s negligence and excluding any Loss or Damage attributable to performance of Employee Services by Supplier’s Employees) or (b) the Supplier’s Gross Negligence or Willful Misconduct; |
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(ii) | any Loss or Damage to any of the Purchaser’s Employees not arising from their performance of Employee Services attributable to the Supplier’s Gross Negligence or Willful 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 Willful Misconduct; |
(iv) | any Loss or Damage resulting from Third Party Claims attributable to (a) the Supplier’s negligence or (b) the Supplier’s Gross Negligence or Willful Misconduct; and |
(v) | any Loss or Damage to any of Purchaser’s Employees arising from their performance of Employee Services attributable to |
(a) | the Supplier’s Gross Negligence or Willful Misconduct, |
(b) | the Supplier’s negligence or |
(c) | the Purchaser’s negligence (but not the Purchaser’s Gross Negligence or Willful Misconduct); |
provided, however, that the Supplier’s aggregate liability for any Loss or Damage arising under Section 8.2(b)(ii) or 8.2(b) (iii) shall not (i) in any calendar year, exceed four million ($4,000,000) dollars; or (ii) for loss resulting from any single event, exceed four million ($4,000,000) dollars.
(c) If Supplier shall suffer Loss or Damage to a SUMF Asset as a result of the negligence (but not Gross Negligence or Willful Misconduct) of Purchaser or Supplier, Supplier shall be responsible to timely restore such SUMF Asset as soon as practical following the damage or destruction and Purchaser shall reimburse Supplier for an amount equal to (i) the cost to restore such SUMF Asset multiplied by (ii) the Fixed Operating Cost Percentage, as specified in the respective Schedules. To cover the risk of the Purchaser being required 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.
For purposes of avoiding disputes over deminimus Loss or Damage to SUMF Assets, any Loss or Damage to a SUMF Asset which would result in an individual claim for reimbursement against Purchaser under this Section 8.2(c) of less than $75,000 shall not be considered to have resulted from the negligence of Supplier or Purchaser, except to the extent the Loss or Damage
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was caused by the Gross Negligence or Willful Misconduct of such Parties; provided, however, that if, in any year, the Supplier shall be precluded from reimbursement from Purchaser by operation of this sentence in an aggregate amount exceeding $250,000 during any twelve-month period, then this sentence shall not be effective to limit reimbursement as to any Loss or Damage during such period.
(d) Each Party waives and releases the other Party from and against any and all liability for Loss or Damage to such Party’s assets, excluding any SUMF Asset, resulting from the simple negligence of the other Party and each Party shall cause its insurance carrier to waive all rights of subrogation against the other Party as to such Loss or Damage.
8.3 Purchaser Environmental Indemnification. Purchaser shall indemnify, defend, save and hold harmless Supplier Indemnitees from and against all Loss or Damage asserted against, resulting to or imposed upon or incurred by the Supplier Indemnitees attributable to:
(i) | any violation of or failure to comply with any Environmental Law; |
(ii) | any Environmental Condition; or |
(iii) | any Remediation Activity; |
and arising from events or conditions attributable to Purchaser’s conduct under this Agreement, but only to the extent any resulting Loss or Damage relate to Purchaser’s conduct under this Agreement.
8.4 Off-Site Waste Disposal Site Indemnification. Purchaser shall indemnify, defend, save and hold harmless Supplier Indemnitees from and against all Loss or Damage asserted against, resulting to or imposed upon or incurred by the Supplier Indemnitees that result from the presence at any off-site waste disposal site of any Hazardous Substance and which Hazardous Substance arose from or is related to activities, operations or practices attributable to Purchaser’s conduct under this Agreement, provided, however, that Purchaser shall have no liability in connection with any waste that Purchaser sends to the biotreater that conforms with the specifications described in Schedule 3.2 C.
8.5 Supplier Environmental Indemnification. Supplier shall indemnify, defend, save and hold harmless Purchaser Indemnitees from and against all Loss or Damage asserted against, resulting to or imposed upon or incurred by the Purchaser Indemnitees attributable to:
(i) | any violation of or failure to comply with any Environmental Law; |
(ii) | any Environmental Condition; or |
(iii) | any Remediation Activity; |
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and arising from events or conditions attributable to Supplier’s conduct under this Agreement, but only to the extent any resulting Loss or Damage relate to Supplier’s conduct under this Agreement.
8.6 Off-Site Waste Disposal Site Indemnification. Supplier shall indemnify, defend, save and hold harmless Purchaser Indemnitees from and against all Loss or Damage asserted against, resulting to or imposed upon or incurred by the Purchaser Indemnitees that result from the presence at any off-site waste disposal site of any Hazardous Substance and which Hazardous Substance arose from or is related to activities, operations or practices attributable to Supplier’s conduct under this Agreement.
8.7 | [Intentionally Left Blank ] |
8.8 | Indemnification Procedure. |
(a) Indemnification Procedure for Third Party or Governmental Authority Claims.
The obligations and liabilities of each Party with respect to all items indemnified against under this Agreement and which are initiated by a Governmental Authority or a Third Party (“Indemnification Claim”) shall be subject to the following terms and conditions.
(1) Upon notice of a Indemnification Claim asserted against, resulting to, imposed upon or incurred by one or more of the Purchaser Indemnitees or the Supplier Indemnitees, as the case may be (the “Indemnified Party”), the Indemnified Party shall promptly give written notice to the other Party (the “Indemnifying Party”) of the Indemnification Claim; provided however, that no delay on the part of the Indemnified Party shall relieve the Indemnifying Party from any liability or obligation hereunder unless (and only to the extent) the Indemnifying Party is materially prejudiced by such failure to give notice. Promptly upon receiving a written notice of an Indemnification Claim, the Indemnifying Party shall undertake the defense thereof by counsel of its own choosing, which counsel shall be reasonably satisfactory to the Indemnified Party, provided that if, in the Indemnified Party’s and the Indemnifying Party’s reasonable judgment, a conflict of interest may exist between the Indemnified Party and the Indemnifying Party with respect to such Indemnification Claim, or if the Indemnifying Party does not promptly defend such Indemnification Claim, such Indemnified Party shall be entitled to undertake the defense, and to compromise or settle such Indemnification Claim on behalf of and for the account and at the risk of the Indemnifying Party to the extent that the Indemnifying Party is determined to be obligated to indemnify the Indemnified Party under this Agreement with respect to such Indemnification Claim. The written notice of the Indemnification Claim by the Indemnified Party shall contain all material information known to the Indemnified Party with respect to the Indemnification Claim and shall include copies of materials submitted to the Indemnified Party by the relevant Third Party or Governmental Authority with respect to the Indemnification Claim.
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(2) If the Indemnifying Party elects to undertake and diligently pursue the defense of a Indemnification Claim hereunder, and acknowledges in writing its duty to provide full indemnification to the Indemnified Party regarding such Indemnification Claim, the Indemnifying Party shall control all aspects of the defense and settlement of such Indemnification Claim and may settle, compromise or enter into a judgment with respect to such Indemnification Claim; provided that the Indemnifying Party shall not enter into any such settlement, compromise or judgment without the prior written consent of the Indemnified Party if it would result in the imposition of any non-monetary liability or obligation on the Indemnified Party. If the Indemnified Party undertakes the defense of a Indemnification Claim hereunder, it shall not settle, compromise or enter into any judgment with respect to a Indemnification Claim for which it is seeking or shall seek indemnification hereunder without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld.
(3) The Indemnified Party shall provide the Indemnifying Party with access to all reasonably requested records and documents of the Indemnified Party relating to any Indemnification Claim, other than documents for which the Indemnified Party has claimed or shall claim a legal privilege.
(b) Procedures Relating to Non-Third Party or Governmental Claims.
In order for an Indemnified Party to be entitled to any indemnification provided for under this Agreement with respect to a claim that does not involve a Third Party or Governmental Authority being asserted against or sought to be collected from such Indemnified Party, the Indemnified Party shall deliver notice of such claim with reasonable promptness to the Indemnifying Party. The failure by any Indemnified Party to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it may have such Indemnified Party under this Agreement, except to the extent that the Indemnifying Party shall have been materially prejudiced by such failure.
8.9 | No Consequential Damages. 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. |
8.10 | Items from Third Parties. 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 the Supplier shall have no liability with respect to the supply or performance of such SUMF Items to the extent so supplied. |
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8.11 | Survival of Indemnities. Any liability of each Party to the other under this Article 8 shall expire two years after the date on which the act giving rise to such Party’s liability first occurred, and no claim, demand, action or proceeding shall be brought or initiated by the claiming Party thereafter, provided that the liability of a Party under Sections 8.3, 8.4, 8.5 and 8.6 shall not be so limited. |
8.12 | Express Negligence Rule Notwithstanding. THE FOREGOING INDEMNITIES SET FORTH IN THIS ARTICLE 8 ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING LOUISIANA’S EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNIFICATION BECAUSE OF THE SIMPLE OR GROSS NEGLIGENCE (WHETHER SOLE, CONCURRENT, ACTIVE OR PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES. THE EXCLUSIVE REMEDY OF ANY PARTY HERETO WITH RESPECT TO AN INDEMNIFIABLE CLAIM PROVIDED BY THIS AGREEMENT SHALL BE LIMITED TO THE INDEMNIFICATION PROVISIONS SET FORTH IN THIS AGREEMENT. EACH OF THE PARTIES, ON BEHALF OF ITSELF AND ITS AFFILIATES, HEREBY WAIVES AND RELEASES THE OTHER PARTY FROM, TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHTS, CLAIMS AND CAUSES OF ACTION FOR INDEMNIFICATION IT OR ITS AFFILIATES MAY HAVE AGAINST THE OTHER PARTY HERETO EXCEPT AS EXPRESSLY PROVIDED HEREIN. |
8.13 | No Third Party Beneficiaries. The provisions of this Article 8 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 8. |
ARTICLE 9
TERM AND TERMINATION
9.1 | This Agreement shall be of full force and effect on and from the date hereof and shall continue for an initial term of sixteen (16) 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. |
9.2 | RPP may, in addition to its other remedies, terminate this Agreement in its entirety in any of the following circumstances: |
(a) | if a Bankruptcy Event occurs and is continuing in relation to Shell and Shell does not provide adequate assurances to RPP within thirty (30) days of the occurrence of the Bankruptcy Event that Shell will continue to provide all SUMF Items to RPP on the terms and conditions of this Agreement; and |
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(b) | if for reason other than Force Majeure, Shell conducts its operations in a manner reasonably believed to be unsafe to either life, health, property or the environment so as to disrupt RPP’s business conducted at the Site or subject RPP to material HSE risks or material risks of violation of governmental requirements, fines, penalties, Third Party claims or claims by its employees, and such conduct continues for more than ten (10) business days after ninety (90) days prior written notice by RPP to Shell; provided, however that if Shell is conducting its operations in compliance in all material respects with HSE laws, its operations will be presumed to be safe; |
(c) | with at least twenty-four (24) months prior written notice, or if that is impossible, with as much notice as possible under the circumstances, and in any event promptly after RPP has made such decision, if RPP decides to cease operations of all or substantially all of its SUMF Assets at the Site, subject to the right to lease set forth in Section 18.3 of the Second Norco Ground Lease and Grant of Servitudes between Shell Chemical LP and Resolution Performance Products LLC, dated as of November 1, 2004.; |
(d) | with at least three (3) years prior written notice, effective at the end of the initial sixteen (16) year term or at the end of any five (5) year extension term, as the case may be; |
(e) | if Shell without proper justification fails to pay any undisputed SUMF Charge within three (3) months of the date when such payment became due, and such failure continues thereafter for a period of sixty (60) days after written notice from RPP. |
9.3 | The Purchaser may, in addition to other remedies, terminate this Agreement as to an individual SUMF Item 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 the particular SUMF Item to the Purchaser on the terms and conditions of this Agreement; |
(b) | if, for reasons other than Force Majeure, a SUMF Item is not properly supplied by the Supplier within specifications and such failure continues for more than ten (10) business days after thirty (30) days prior written notice from the Purchaser to the Supplier; |
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(c) | with such notice period as is provided in the Schedules; and |
(d) | with at least thirty (30) days’ prior written notice, upon the occurrence during any twelve (12) month period of 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 with respect to such SUMF Item. |
9.4 | Shell 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 RPP and RPP does not provide adequate assurances to Shell within thirty (30) days of the occurrence of the Bankruptcy Event that RPP will continue to provide all SUMF Items to Shell on the terms and conditions of this Agreement; |
(b) | if for reason other than Force Majeure, RPP conducts its operations in a manner reasonably believed to be unsafe to either life, health, property or the environment so as to disrupt Shell’s business conducted at the Site or subject Shell to material HSE risks or material risks of violation of governmental requirements, fines, penalties, Third Party claims or claims by its employees, and such conduct continues for more than ten (10) business days after ninety (90) days prior written notice by Shell to RPP; provided, however that if RPP is conducting its operations in compliance in all material respects with HSE laws, its operations will be presumed to be safe; |
(c) | with at least twenty-four (24) months prior written notice, or if that is impossible, with as much notice as possible under the circumstances, and in any event promptly after Shell has made such decision, if Shell decides to cease operations of all or substantially all of its SUMF Assets at the Site |
(d) | with at least three (3) years prior written notice, effective at the end of the initial sixteen (16) year term or at the end of any five (5) year extension term, as the case may be; and |
(e) | if RPP without proper justification fails to pay any undisputed SUMF Charge within three (3) months of the date when such payment became due, and such failure continues thereafter for a period of sixty (60) days after written notice from Shell. |
9.5 | Upon termination of this Agreement hereunder, the Parties, acting reasonably and in good faith, shall negotiate for the continued provision of the SUMF Items described in Schedules 3.2 C,3.2 D, and 3.1 F on commercially competitive terms and conditions, including price which shall in any event be sufficient to provide 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. |
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9.6 | The Supplier may, in addition to other remedies, terminate this Agreement as to an individual SUMF Item 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 adequate assurance of continued payment to the Supplier of the SUMF Charges relating to such SUMF Item within thirty (30) days of the occurrence of the Bankruptcy Event; |
(b) | if the Purchaser fails to pay any undisputed SUMF Charge for an individual SUMF Item within three (3) months of the date when such payment fell due, and such failure continues for an initial period of at least sixty (60) days after written notice from the Supplier; and |
(c) | with such notice period as is provided in the Schedules. |
In the event the Supplier ceases to provide any SUMF Item described in Schedules 3.2 C, 3.2 D, and 3.1 F during the six-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 Items for the balance of the six-year period on a basis which is the economic equivalent of the Supplier’s supply to the Purchaser of such SUMF Items prior to the Supplier’s cessation of operations or supply. The manner in which the Supplier continues to provide such SUMF Items 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 building of alternative assets and the procurement of comparable items from Third Parties.
9.7 | Any termination of this Agreement, in whole or in part, including the termination of an individual SUMF Item, shall be final, and neither Party shall have the right to resumption of the terminated SUMF Item under this Agreement or another agreement. |
9.8 | Termination of this Agreement under this Article 9 shall not affect the rights and obligations of the Parties accrued to the date of termination and provisions of Articles 5 and 6 (as to audit and dispute rights), 8, 9.5, 9.7, 9.8, 9.9, 9.10, 9.11, 10, 11, 18, and 26, which shall continue in full force and effect. |
9.9 | Within 60 days after termination of this Agreement, the Supplier shall provide a final reconciliation. 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 sufficient 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 Interest Rate. The Parties shall meet to resolve any dispute relating to the final reconciliation in accordance with Article 18. |
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9.10 | Any termination of this Agreement, either in whole or in part, and termination 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. |
9.11 | If there is a dispute regarding the termination of this Agreement or a SUMF item under Sections 9.2, 9.3, 9.4 or 9.6, no termination shall occur until sixty (60) days following resolution of the dispute (i) under Article 18 or Section 6.2 (f), as applicable or (ii) by written agreement of the Parties. |
9.12 | Upon the termination in advance of the end of the initial or any extension term of a SUMF Item, the Party terminating the SUMF Item shall physically disconnect from that SUMF Item’s delivery system in the time and manner instructed by the Supplier and the terminating Party shall pay the costs associated with the physical disconnection. Each Party agrees to cooperate with the other Party in order to facilitate disconnection and minimize disconnection costs. In no event shall the Supplier be obligated to pay any start up costs of either Party to replace the discontinued SUMF Item. |
ARTICLE 10
INTELLECTUAL PROPERTY RIGHTS
10.1 | 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. |
10.2 | The copyright, property and any other industrial property rights 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 11
CONFIDENTIALITY
11.1 | Subject to Section 11.2, 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; |
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(d) | the other Party or any aspect of its business or operations; or |
(e) | the subject matter of this Agreement. |
11.2 | 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; |
(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; |
(e) | disclosed on a strictly confidential basis to bona fide potential purchasers of a proprietary interest or bona fide potential or actual operator of any of the RPP Facilities or the Shell facilities; |
(f) | disclosed to the corporate shareholders or other equity owner of the Parties; |
(g) | that the information is already known to the Party at the time of disclosure by the disclosing Party through no fault of that Party; |
(h) | that the information has come into the public domain through no fault of that Party; |
(i) | disclosed in order to seek enforcement of, or to defend, the contractual rights or obligations of a Party under this Agreement, any Transaction Document or other related agreement or to satisfy an obligation or duty under this Agreement; or |
(j) | that the other Party has given prior written approval to such disclosure. |
11.3 | The restrictions contained in Article 11.1 shall continue to apply for one (1) year after (i) the termination of this Agreement, or (ii) the termination of an individual SUMF Item, but only as to information relating to such SUMF Item. |
ARTICLE 12
ADDITIONAL SUMF AND CAPITAL IMPROVEMENTS TO SUMF ASSETS
12.1 | 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 |
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requests 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, 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 the rejection. If Supplier agrees to undertake any such capital improvement project, 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, provided, however, that if other persons receive any of the benefits of such capital improvement project, such other persons shall bear their respective pro rata shares of all costs associated with such project (based upon and only to the extent of the relative benefits received by them), and the Purchaser’s costs with respect thereto shall be reimbursed by the Supplier as, when, if and to the extent savings are received or as, when , if and to the extent the other person utilizes such benefits. |
Notwithstanding anything contained herein to the contrary, the Purchaser shall not be required to seek increased capacity from the Supplier and shall have the right to satisfy its needs, if any, for increased capacity from other persons, consistent with Legal Requirements and the rights of the Parties under this Agreement.
12.2 | If a capital improvement to a SUMF Asset would not be otherwise required by applicable law or regulation but for the presence of Purchaser’s process or products or by-products, the Purchaser shall be required to pay one hundred percent of the costs for the mandated improvement to any SUMF Asset, provided, however, that if any other person receives any of the benefits of the capital improvement, then such other persons shall bear their respective pro rata shares of all costs associated with such capital improvement (based upon and only to the extent of the relative benefits received by them), and the costs which the Purchaser would otherwise be required to pay shall be reimbursed by the Supplier as, when, if and to the extent savings are received or as when, if, and to the extent the other persons utilize such benefits accordingly. |
ARTICLE 13
DAMAGE TO SUMF ASSETS
13.1 | If the owner does not timely restore a damaged 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. |
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13.2 | A Party who causes damage to a SUMF Asset as a result of its own Gross Negligence or Wilful Misconduct shall be responsible for any incremental costs of such alternative SUMF Items so that the Users of such SUMF Items other than such responsible 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 14
METERING OR ALLOCATION OF SUPPLY, CONSUMPTION AND DELIVERY
14.1 | The quantities of certain SUMF Items supplied hereunder shall be measured by allocation or by a meter or other appropriate device (the “Meter”) located at or near the Delivery Point(s) specified in Schedules 3.1 and 3.2. The Meter shall be installed, owned and operated at the expense of the Party indicated in the applicable schedules as the Meter owner. The Meter owner shall read the Meter on a regular basis as described in Schedule 14.1 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 4, 5 and 6. |
14.2 | 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 the applicable Schedule 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. |
14.3 | Following any calibration test made pursuant to this Article 14, 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 the applicable Schedule, 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. |
14.4 | The Parties acknowledge that special metering problems may arise which can be resolved by procedures other than those described in this Article 14. 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 14, nor imply acceptance by either Party of any special provision at a future time. |
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14.5 | Should the Supplier or the Purchaser fail to obtain suitable measurement results from the Meter pursuant to Section 14.2, the quantities of that SUMF Item 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 14 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. |
14.6 | For Delivery Points where no Meter exists, allocation methods are set forth in the applicable Schedule. The Monitoring Committee shall have the authority to update and/or correct any allocation method, with any corrections to be adjusted prospectively. Either Party may, at its own expense, install a Meter in lieu of allocation unless a specific schedule states to the contrary. |
14.7 | Line losses shall be determined by engineering calculations. Line losses for each billing period will be assigned to all Users in proportion to their consumption during such period, whether metered or allocated/estimated. Any remaining differences (imbalances) between SUMF production and the amount consumed, as so adjusted for line losses, will also be assigned to all Users in proportion to their consumption during such period, whether metered or allocated/estimated, provided, that the amount of such imbalance assigned to metered use shall not exceed the product of (x) the mutually agreed tolerance percentage of each such meter and (y) the amount consumed during such period as measured by such meter and any excess of such imbalance over the amount so assigned to metered use will be assigned to non-metered use in proportion to allocated/estimated consumption of such non-metered use during such period. |
ARTICLE 15
MONITORING COMMITTEE
15.1 | Shell and RPP shall jointly establish a committee (the “Monitoring 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 Monitoring Committee shall comprise one representative from RPP and one representative from Shell. In addition, other representatives that the Parties may reasonably require shall attend at and report to meetings of the Monitoring Committee. |
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15.2 | The Monitoring Committee shall meet no less than once every six (6) months throughout the duration of this Agreement (other than where the Parties agree that such a periodic meeting is not necessary) and as otherwise reasonably requested by a Party. |
15.3 | The Monitoring Committee shall use all reasonable endeavors to resolve issues raised by any of the Parties in respect of the operation of this Agreement and the supply of SUMF hereunder. The Monitoring Committee shall review the performance of the Parties in the supply and receipt of SUMF Items under this Agreement and shall consider any agreed improvement plans. |
15.4 | The Monitoring Committee shall have the authority to develop modifications or amendments to the Exhibits and Schedules to this Agreement on behalf of the Parties, however, to become effective any such modifications or amendments must be put in writing and be duly signed by the Parties. The Monitoring Committee shall, as needed to implement this Agreement, develop mutually agreed protocols and administrative procedures. |
ARTICLE 16
MISCELLANEOUS
16.1 | 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 practice and in compliance with Legal Requirements in all material respects, and (ii) in a manner each Party reasonably believes to be fair to the other and with such care as an ordinarily sound business person in a like position would use under similar circumstances. |
16.2 | The Parties shall 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 Parties shall keep each other timely informed of any adjustments or changes to these plans. The Parties shall take reasonable efforts within such Party’s control so as to minimize the impact to the other Party of any planned turnaround, shutdown, major technical project, capital expenditure and any other event which may adversely impact the supply of SUMF Items, without prejudice to the needs of the other users or to health, safety and environmental standards. |
Every two (2) years, or as often as either Party may reasonably require, the Monitoring Committee will review the overall effectiveness of this Agreement and will discuss possible opportunities for improvement.
The Parties stipulate that some of the SUMF Items may be supplied to the Purchaser by Third Parties. The Supplier’s ability to supply a particular SUMF Item is conditioned on the receipt of all or part of such SUMF Item from the Third Party. The Supplier agrees to enforce any Third Party supply contract in order to provide the SUMF Items hereunder and all costs incurred in such enforcement shall be Variable Costs.
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The Supplier agrees to make available all procedures, policies, rules and regulations utilized in connection with the providing of any SUMF Item.
ARTICLE 17
FORCE MAJEURE
17.1 | A Party will not be in breach of this Agreement (except for obligations to pay money which would otherwise be 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 use its reasonable efforts to remedy and overcome the cause of such Force Majeure as promptly as possible. |
17.2 | 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. |
17.3 | 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. |
17.4 | “Force Majeure” means, in relation to either Party, an event, condition or circumstance which causes a delay or disruption in the performance by such Party of any of its obligations under this Agreement which is beyond the reasonable control of that Party, including: (a) fire, explosion or other disruption, mechanical breakdown, electrical shortage or blackout, decline or shortages of supply, and circumstances arising out of failure or malfunction of computer systems, failure of malfunction of digital devices or components thereof; (b) lock-outs, strikes and other industrial disputes; or (c) Legal Requirements. |
For the avoidance of doubt, the settlement of a labor strike, lockout or any other kind of labor 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 labor dispute on terms contrary to its wishes.
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ARTICLE 18
DISPUTE RESOLUTION
18.1 | Any Dispute arising out of or in connection with this Agreement, excluding invoice Disputes subject to Section 6.2(f) but including any question regarding the existence, validity or termination of this Agreement, shall be exclusively processed in accordance with this Article. |
18.2 | In the event of a Dispute between the Parties, 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. |
18.3 | Any Dispute which cannot be resolved by the Parties shall be submitted to the Monitoring Committee which shall endeavor to amicably resolve the Dispute. The Parties shall provide the Monitoring Committee with such information as it reasonably requires to enable it to determine the issues relevant to the Dispute. |
18.4 | Any Dispute which cannot be resolved by the Monitoring Committee shall be submitted to the Steering Committee which shall endeavor 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. |
18.5 | 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 cost of the mediator shall be borne equally. |
18.6 | 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, such arbitration to be held in New Orleans, Louisiana. Any arbitration decision pursuant to this Article 18 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 borne by the nonprevailing Party or apportioned by the arbitrator based on fault. |
18.7 | Pending resolution of any dispute between the Parties, the Parties shall continue to perform in good faith their respective obligations under this Agreement based upon the last agreed performance demonstrated prior to the dispute, but in all events to protect HS&E. |
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18.8 | 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 from the original due date of such amount. |
18.9 | 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 19
FURTHER ASSURANCE
19.1 | Each Party shall at its own cost, from time to time on request, 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 20
COSTS AND EXPENSES
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 21
ASSIGNMENT AND DELEGATION
21.1 | RPP 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 which includes lending money and with a net worth in excess of One Hundred Million Dollars, without the prior written consent thereto of Shell (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). Any assignment of the Agreement by RPP to a Third Party shall require the consent of Shell, such consent not to be unreasonably withheld or delayed. |
21.2 | Shell shall be entitled to assign this Agreement to any Affiliate or successor in interest without the prior written consent thereto of RPP. Any assignment of the Agreement by Shell to a Third Party other than as set out above shall require the consent of RPP, such consent not to be unreasonably withheld or delayed. |
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21.3 | Any assignment of this Agreement shall not relieve a Party of its obligations or liability hereunder absent consent by the other Party. |
21.4 | Each Party agrees to execute and deliver to the other Party and, if applicable its lenders, recognition and estoppel agreements which will state the status of this Agreement as to whether a default exists and will recognize any third party rights. |
21.5 | A Supplier of a SUMF Item 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, and provided further that charges the Purchaser pays for such delegated or assigned SUMF Item do not exceed the SUMF Charges described in this Agreement. |
ARTICLE 22
SEVERABILITY
22.1 | 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 18. |
22.2 | 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 23
NO AGENCY OR PARTNERSHIP
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 authorize 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 24
REMEDIES AND WAIVER
24.1 | 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. |
24.2 | 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. |
The rights, powers and remedies provided in this Agreement are cumulative and not exclusive of any rights, powers and remedies provided by law.
Shell and RPP each acknowledges that it has had adequate opportunity and bargaining strength to review, negotiate and revise this Agreement. 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 25
ENTIRE AGREEMENT AND VARIATION
25.1 | Except as herein set forth, this Agreement constitutes the entire and only agreement between the Parties relating to the furnishing of SUMF Items by the Parties at the Site and supersedes any Pre-contractual Statement. |
25.2 | 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 (except those set out in this Agreement). |
25.3 | 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. |
25.4 | Any amendment or modification of this Agreement shall be ineffective unless reduced to writing and signed by or on behalf of a duly authorized representative of both Parties. |
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ARTICLE 26
NOTICES
26.1 | 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 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 Parties at their addresses set forth in the introductory paragraphs of this Agreement and Exhibit A attached hereto (or such other address for a Party as shall be specified by like notice form such Party to the other Party). 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. |
26.2 | A Party may change its notice details on giving notice to the other Party of the change in accordance with this Article 26. That notice shall only be effective on the date falling three (3) Business Days after the notification has been received or such later date as may be specified in the notice. Any such notice so delivered will comply with the terms of this Article 26. |
ARTICLE 27
NO THIRD PARTY BENEFICIARIES
Any agreement herein contained, express or implied, shall only be for the benefit of the Parties hereto and their permitted successors and assigns, and such agreements shall not inure to the benefit of any other party whomsoever, it being the intention of the Parties hereto that no one shall be deemed to be a third party beneficiary of this Agreement.
ARTICLE 28
GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana, without regard to the conflict of law provisions.
ARTICLE 29
COUNTERPARTS
29.1 | 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. |
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29.2 | Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument. |
ARTICLE 30
TRUE UP OF FINAL INVOICE OF SUMF AGREEMENT
The Parties shall “true up” the final invoice for SUMF Charges under the SUMF Agreement by offsetting the amounts contained in the January 2004 estimate against the actual SUMF Charges contained in the final invoice. This “true up” shall include the cost collar described in Section 6.1 of the SUMF Agreement, except that the amount of Purchaser’s share of such Fixed Operating Costs in the immediately preceding calendar year shall be reduced on a pro rata basis such that the costs billed for the first 10 months of 2004 are compared to 10/12 of the collar amount calculated for 2004 and as adjusted under Section 6.1 (c) of the SUMF Agreement. The Parties agree that the “true up” described above results in a payment by Shell to RPP of $57, 243.06, which Shell shall pay no later than December 19, 2004. The Parties further agree that such payment by Shell shall represent the final adjustment of all SUMF Charges and other costs incurred or to be paid by either Party under Articles 5, 6 and 7 of the SUMF Agreement, and that both Parties hereby waive all rights to audit any invoice sent in connection with the SUMF Agreement including the final invoice referenced above.
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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: |
SHELL CHEMICAL L.P. | |||
By: |
| |||
Name: |
| |||
Attorney-in-Fact | ||||
Signed by: |
RESOLUTION PERFORMANCE PRODUCTS LLC | |||
By: |
| |||
Name: |
| |||
Title: |
|
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EXHIBIT A
INFORMATION
1. | The addresses, facsimile numbers, of the Parties are (Article 26): |
Party 1:
Shell Chemical L.P.
Norco Chemical Plant
00000 Xxxxx Xxxx
X.X. Xxx 00
Xxxxx, Xxxxxxxxx 00000
Attn.: Chemical Plant Manager
Facsimile: (000) 000-0000
with a copy to:
Shell Chemical L.P.
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attn.: Executive Vice President of Operational Excellence
Facsimile: (000) 000-0000
Party 2:
Resolution Performance Products LLC
Norco Chemical Plant
00000 Xxxxx Xxxx
X.X. Xxx 00
Xxxxx, Xxxxxxxxx 00000
Attn.: Site Manager
Facsimile: 000-000-0000
with a copy to:
Resolution Performance Products LLC
0000 Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn.: General Counsel
Facsimile: (000) 000-0000
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2. | The “Site” as referenced in Article 1 is described by the three attached plot plans: |
• | East Site plot plan as Attachment 1 |
• | West Site plot plan attached as Attachment 2. |
• | St. Rose plot plan as Attachment 3 |
3. | The applicable Inter-Bank Offered Rate is (Article 1 under “Inter-Bank Offered Rate”): |
Average 30-day LIBOR for the previous calendar month as reported in The Wall Street Journal
4. | Currency for payment of SUMF Charges (Article 6): US DOLLARS |
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