Dated 1st October 1999 Agreement Between Shell Chimie S.A. and KRATON POLYMERS FRANCE S.A.S., for the supply of 1,3-Butadiene

Exhibit 10.43

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

CONFIDENTIAL

CONFIDENTIAL

Dated 1^st October 1999

Agreement

Between

Shell Chimie S.A.

and

KRATON POLYMERS FRANCE S.A.S.,

for the supply of 1,3-Butadiene

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CONTENTS

				Page
1.		Definitions and Interpretation		4
2.		Supply and Purchase of Product		6
3.		Quality		6
4.		Scheduling and Nomination		7
5.		Delivery Terms		7
6.		Quantity Measurement		8
7.		Price		8
8.		Invoicing and Payment		9
9.		Term and Termination		9
10.		General		10
11.		Notices		10
12.		Force Majeure		10
13.		Liability		11
14.		Assignment		12
15.		Confidentiality		12
16.		Hardship		12
17.		Severability		12
18.		Governing Law and Arbitration		13
19.		Counterparts		13
Attachment I				14
Attachment II				15
Attachment III				16
Attachment IV				17

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PURCHASER Approved 1,3-Butadiene Suppliers List for Berre. 17

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1,3-BUTADIENE SUPPLY AGREEMENT

THIS AGREEMENT is made 1^st October 1999 between:

(1) Shell Chimie S.A., a company incorporated in the Republic of France having its registered office at 00 Xxxxxxxxx Xxxxxxxx Xxxxxxxxx, X-00000 Reuil-Malmaison, the Republic of France (hereinafter referred to as “SC”); and

(2) KRATON POLYMERS FRANCE S.A.S., a company incorporated under the laws of France with its principal office at the 00 Xxxxxxxxx Xxxxxxxx Xxxxxxxxx, X-00000 Xxxxx-Xxxxxxxxx, Xxxxxx (hereinafter referred to as «PURCHASER»)

RECITALS:

(A) SC manufactures 1,3-Butadiene at its plant in Berre.

(B) PURCHASER and those of its Affiliates listed in Attachment III hereto require supplies of 1,3-Butadiene to manufacture Styrene Block Copolymers (SBC’s) at its plant in Berre and wish to have a long-term stable supply of Butadiene.

(C) SC is willing to supply 1,3-Butadiene to PURCHASER and PURCHASER is willing to take delivery of 1,3-Butadiene from SC on the terms and conditions set out in this Agreement.

IT IS AGREED as follows:

1. Definitions and Interpretation

1.1 In this Agreement, where the context so admits, the following words and expressions shall have the following meanings:

«Affiliate»		means in relation to SC, N.V. Konlnklijke Nederlandsche Petroleum Maatschappij, The “Shell” Transport and Trading Company, p.l.c. and any other company other than SC which is directly or indirectly affiliated with the first mentioned companies or either of them.
		means in relation to PURCHASER, any company which is directly or indirectly affiliated with PURCHASER.

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		For the purposes of this definition, a particular company is:
		(i)     directly affiliated with another company or companies if the latter hold(s) shares or similar entitlements carrying fifty per cent (50%) or more of the votes exercisable at a general meeting of shareholders (or its equivalent) of the particular company; and
		(ii)    indirectly affiliated with a company or companies (“the parent company or companies”) if a series of companies can be specified, beginning with the parent company or companies and ending with the particular company, so related that each company or companies, except the parent company or companies, is directly affiliated with one or more of the companies earlier in the series;
«Agreement»		means this 1,3-Butadiene supply agreement including its Attachments;
«EMU Legislation»		means the legislative measures of the Council of the European Union providing for the introduction of, changeover to, or operation of the Euro;
«Euro»		means the single currency of the Participating Member States in the Third Stage;
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«Month»		means a calendar month;
«Participating Member States»		means those member states of the European Union from time to time which adopt a single, shared currency in the Third Stage, as defined and identified in the EMU Legislation;
«Product»		means 1,3-Butadiene complying with the specifications set out in Attachment I;
«Quarter»		means a period of three consecutive months commencing 1 January, 1 April, 1 July and 1 October in any Year;
«Third Party»		means any third party other than SC and PURCHASER and their respective Affiliates;

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«Third Stage»		means the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community (as amended from time to time);
«Tonne»		means one thousand kilograms;
«Volume»		means the amount of Product supplied by SC to PURCHASER under this Agreement;
«Year»		means a calendar year.

1.2 References in this Agreement to Clauses and Attachments are to Clauses in and Attachments to this Agreement. The Recitals and Attachments to this Agreement form part of this Agreement.

1.3 Headings are inserted for convenience only and shall not affect the construction of this Agreement.

1.4 The masculine gender shall include the feminine and neuter and the singular number shall include the plural and vice versa.

2. Supply and Purchase of Product

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2.2 The obligation of PURCHASER to take delivery of Product may be taken over wholly or in part by one or more of those of its Affiliates listed in Attachment III.

3. Quality

3.1 SC warrants that all Product supplied to PURCHASER shall comply with the specifications set out in Attachment I unless otherwise agreed.

3.2 In the event that PURCHASER considers that the quality of Product delivered to it pursuant to this Agreement does not comply with the specification set out in Attachment I, PURCHASER shall give written notice specifying the nature of its complaint and the parties shall promptly meet so as to resolve that complaint. In the absence of any agreement to resolve the complaint the parties shall appoint at their joint cost a mutually acceptable independent surveyor to examine whether the quality of Product as delivered complied with the specifications set forth in Attachment I. Such surveyor shall act as an expert and, in the absence of manifest error, his decision shall be final and binding.

3.3 In the event that Product supplied by SC to PURCHASER is proved to have failed to meet the specifications set out in Attachment I, PURCHASER shall be entitled at its option to reject the Product in question and require delivery of Product which meets the specifications as soon as reasonably possible, but in any event not later than 30 days after receipt by SC of a written notice from PURCHASER requesting such re-supply or to require SC to reimburse the invoice value of the defective Product.

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3.4 In the absence of any written notice from PURCHASER to SC within 15 days after delivery of the Product, the Product shall be deemed to have been delivered and accepted by PURCHASER in a satisfactory condition and in all respects in accordance with the specifications and SC shall have no liability to PURCHASER with respect to that delivery.

3.5 Product to be shipped for SC from third parties for supply to PURCHASER other than approved suppliers by PURCHASER as specified in Attachment IV must be approved by the PURCHASER prior to shipment.

4. Scheduling and Nomination

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4.2 By 1st July in each Year, PURCHASER shall submit, in writing, a non-binding volume estimate of its requirements for Product in the following Year and a non-binding estimate for the 4 Years thereafter following the format in Attachment II.

By 1st October in each Year, PURCHASER shall submit, in writing, a revised volume estimate of its requirements for Product in the following Year by Quarter (the «Annual Volume of Product»).

The Annual Volume of Product shall be within the range of Volumes set out in clause 2.1, subject to the provisions of clause 4.5

4.3 Subject to Clauses 4.1 and 4.2, PURCHASER will notify SC of its requirement for the supply of Product for each Month on the basis of a rolling three months programme. This programme will be revised and updated on a monthly basis and will be made available to SC eight working days before the beginning of the first Month of the three months programme. The Volume estimate for the first Month of any three months programme is binding on PURCHASER. The PURCHASER shall be entitled to alter the volume estimate for the second Month by a maximum of +/- 15% and the volume for the third month is indicative only.

4.4 SC shall confirm to PURCHASER within 2 working days of the receipt of the notification referred to in Clause 4.3 the volume for the first Month. Upon confirmation from SC, which shall not be unreasonably withheld, the commitment is binding.

4.5 PURCHASER and SC shall inform each other at earliest opportunity, but not later than six months before it occurs, of any planned shutdown or maintenance programme, and its duration, which may affect SC’s capability to supply, or PURCHASER’s capability to purchase Product.

5. Delivery Terms

5.1 SC shall supply Product by pipeline from SC’s production facilities in Berre on a CPT basis to PURCHASER’s flange at Berre.

5.2 To the extent not inconsistent with any terms of this Agreement, Incoterms (1990 edition) shall apply.

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5.3 Title and risk in the Product shall pass from SC to PURCHASER when the Product passes PURCHASER’s flange between SC’s and PURCHASER’s plant at Berre.

6. Quantity Measurement

6.1 The invoice quantity shall be determined by SC based on the reading given by its calibrated flow meters, corrected for temperature.

6.2 SC shall be responsible for the upkeep and maintenance of its calibrated flow meters.

6.3 SC shall arrange for the testing and calibration of all its calibrated flow meters on a regular scheduled basis.

6.4 If at any time PURCHASER has reasonable grounds to suspect that any measuring equipment is not accurate in any respect, the discrepancy or suspected discrepancy shall be immediately reported to SC in writing along with any evidence in support of such claim and SC shall arrange for the testing of the relevant piece of measuring equipment.

6.5 If any piece of measuring equipment fails to register or, upon test, is found not to be within +/- 0.5 percent accuracy then, for the purposes of this Agreement, a reasonable adjustment in accordance with generally accepted engineering practices shall be made correcting all measurements made with that piece of measuring equipment. Such adjustments shall reflect, if determinable, the actual period during which any inaccurate measurements were made. If such period cannot be determined it shall be deemed to be such period as shall be equal to one-half of the time from the date of the previous test of such measurement equipment, provided that the period covered by any such correction shall not exceed 6 months.

7. Price

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7.2 Prices will be subject where applicable to VAT, Excise Duty and any other government tax or duty.

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9. Term and Termination

9.1 The Agreement shall become effective on the 1^st October 1999 and shall remain in force until the earlier of termination in accordance with Clause 9.2 below and 31st December, 2007 provided that the Agreement will be extended for periods of one (1) year thereafter subject to notice of termination in writing by either party of not less than 24 months, such notice not to expire before 31^st Dec 2007.

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10. General

10.1 This Agreement shall be binding upon and shall enure for the benefit of the permitted assignees of the parties.

10.2 No failure to exercise, and no delay or forbearance in exercising, any right or remedy in respect of any provision of this Agreement shall operate as a waiver of such right or remedy.

10.3 Variations of this Agreement shall not be effective unless made in writing signed by duly authorised representatives of the parties.

11. Notices

Any notice required to be given by either party to the other shall be in writing and shall be deemed validly served by hand delivery or by prepaid registered letter, sent through the post to its address given below, or such other address as may from time to time be notified for this purpose and any notice served by hand shall be deemed to have served on delivery, and any notice served by prepaid registered letter shall be deemed to have been served 48 hours after the time of which it was posted, and in proving service it shall be sufficient (in the case of service by hand or prepaid registered letter) to prove that the notice was properly addressed and delivered or posted, as the case may be.

PURCHASER		SC
KRATON POLYMERS FRANCE S.A S.		Shell Chimie S.A.
00, Xxxxxxxxx Xxxxxxxx Xxxxxxxxx		00, Xxxxxxxxx Xxxxxxxx Xxxxxxxxx
X-00000 RUEIL MALMAISON		F-92584 XXXXX XXXXXXXXX

00. Force Majeure

12.1 Neither party shall be under any liability to the other whether in contract or in tort due to the first party being delayed or hindered in or prevented from performing any or all of its obligations under this Agreement by reason of fire, explosion, accident, flood, act of God, war, riot, labour dispute, strike, lockout, plant breakdown, shortage or non-availability of raw materials not arising from a conscious and delibarate act on the part

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of the supplier or any other cause (whether or not of the same nature as the foregoing) not reasonably foreseeable at the date of this Agreement and beyond the reasonable control of the party in question.

12.2 If either party is unable to perform any of its obligations under this Agreement by reason of any of the causes mentioned in Article 12.1 above or if either party considers it likely that it may become so unable, then that party shall as soon as reasonably practicable notify the other of the nature, estimated extent and duration of such inability. In case of any reasonable doubt as to occurrence of any of the causes mentioned in Article 12.1, preventing a party to fulfil its contractual obligations under this Agreement, the other party has the right to have any of such causes confirmed by an independent auditor, subject to the approval of the other party, such approval not to be unreasonably withheld. In such an auditing process, the party declaring Force Majeure will give access to any necessary information available to that party, unless that party is bound by secrecy agreements. However it being explicitly understood that all decisions concerning health, safety and environmental matters shall be at the sole discretion of the party declaring Force Majeure. The party affected by Force Majeure shall use all reasonable efforts to remedy the event of Force Majeure as soon as possible

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12.4 Lack of funds shall not be Force Majeure.

12.5 Neither party shall be entitled to rely on Force Majeure to relieve it from an obligation to pay money which would otherwise be payable under this Agreement (save to the extent and for the period that payment of the same cannot be made by reason of bank strike or similar occurrence).

13. Liability

13.1 Subject to Clause 13.3, in the event that Product supplied under this Agreement does not accord with the specifications set out in Attachment I, SC shall promptly replace such Product or, at the option of PURCHASER, reimburse PURCHASER the invoice value of the defective Product and SC shall have no other liability in contract or in tort or in any other way for any loss or damage to PURCHASER arising from any act or omission in or relating to the supply or failure to supply Product under this Agreement.

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13.3 Nothing in this Agreement shall exclude, restrict or limit any liability of SC for:

(i) death or personal injury resulting from negligence as defined in the Unfair Xxxxxxxx Xxxxx Xxx 0000; or

(ii) fraud or any other matter if and to the extent that, under English law, liability for it cannot be excluded, restricted or limited as against PURCHASER in the context of this Agreement.

13.4 To the extent that SC is in breach of any supply obligation under this Agreement, or if SC has failed to supply Product pursuant to an event of Force Majeure which has, in any case, resulted in a shortfall in supply or failure in supply of Product to PURCHASER under this Agreement, PURCHASER shall, upon prior written notice to SC of such intention, have the right to purchase elsewhere at its own risk and cost, such quantities of Product as may be necessary to cover the shortfall in its requirements resulting from the shortfall in, or failure to, supply to it during the period of such shortfall or failure to supply.

Any quantities of Product purchased by PURCHASER from Third Parties in this context shall be deducted from the Annual Volume of Product on an equivalent basis provided PURCHASER gives SC notice as soon as is reasonably practicable of any such purchase of Product.

14. Assignment

Either Party may at any time, with the prior written consent of the other Party (such consent not to be unreasonably withheld or delayed), assign all or any part of the benefit of, or its rights and benefits under, this Agreement except that no consent shall be required in the case of an assignment to an Affiliate or Affiliates.

15. Confidentiality

Each party shall ensure that unless the other party gives its prior written consent no information regarding the contents of this Agreement shall be disclosed except to an Affiliate and only then, if and to the extent such Affiliate needs to know the terms and conditions of this Agreement. The party in question shall ensure that the Affiliate in question is notified of the confidential nature of this Agreement and that such Affiliate enters into an appropriate confidentiality undertaking.

16. Hardship

If at any time during this Agreement either party is of the view that there has been a substantial change in business, monetary, technical or commercial conditions (excluding changes in the market price of 1,3-Butadiene and any other of the aforementioned changes that are to be borne by either party pursuant to the purpose of this Agreement) as a result of which that party suffers material hardship in complying with this Agreement, that party may notify the other in writing that it wishes to meet and review the conditions of the Agreement in the light of the changed business conditions. The parties shall meet to discuss in good faith appropriate means, if any, to alleviate or mitigate the effects of such hardship in a manner equitable to both parties.

17. Severability

17.1 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

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this Agreement and the remaining provisions of this Agreement shall remain and continue in full force and effect.

17.2 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.

18. Governing Law and Arbitration

18.1 This Agreement shall be governed by and construed in accordance with English law.

18.2 In the event any dispute, controversy, or difference of opinion arises between the parties hereunder out of or in relation to or in connection with this Agreement or the breach thereof, the parties agree that all disputes arising in connection with the present Agreement shall be finally settled under the rules of conciliation and arbitration of the International Chamber of Commerce in Paris by three (3) arbitrators appointed in accordance with those rules. The place of arbitration shall be Rotterdam and the language shall be English.

19. Counterparts

19.1 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.

19.2 Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument.

IN WITNESS whereof this document has been signed by duly authorised persons on behalf of the Parties the day and year first before written.

Shell Chimie S.A. Rueil-Malmaison				KRATON POLYMERS FRANCE S.A.S. Rueil-Malmaison.
, 1999				, 1999
/s/ X. X. XXXXXX				/s/ X. XXXXXXXX
X. X. Xxxxxx				X. Xxxxxxxx
X. Xxxxxxxx

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Attachment I

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Attachment II

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Attachment III

List of PURCHASER Affiliates

INVOICE ADDRESS SHIP TO

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Attachment IV

PURCHASER Approved 1,3-Butadiene Suppliers List for Berre.

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