CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 10.13
**Confidential portions of this Exhibit have been omitted pursuant to the Rules
and Regulations of the Securities and Exchange Commission. The symbol "[+++++]"
has been used to identify information which is the subject of a Confidential
Treatment Request.**
SHELL TRADING INTERNATIONAL LIMITED
AND
ICI CHEMICALS & POLYMERS LIMITED
SUPPLY AGREEMENT
CONFIDENTIAL TREATMENT REQUESTED
TABLE OF CONTENTS
1. SUPPLY.................................................................. 1
2. QUANTITIES.............................................................. 2
3. QUALITY................................................................. 4
4. METHOD AND RATE OF SUPPLY............................................... 6
5. ICI FACILITIES.......................................................... 7
6. NOMINATION.............................................................. 8
7. VOLUMES AND LOGISTICS................................................... 11
8. PRICES.................................................................. 11
9. QUARTERLY QUALITY AND QUANTITY RECONCILIATION........................... 15
10. MEASUREMENT, SAMPLING AND TESTING....................................... 18
11. RISK AND TITLE.......................................................... 21
12. SHIPPING RISKS.......................................................... 21
13. COMMENCEMENT AND DURATION............................................... 22
14. INVOICING AND PAYMENT................................................... 24
15. TAXES AND DUTIES........................................................ 26
16. ASSIGNMENT/CHANGE OF REFINERY OWNERSHIP................................. 27
17. LIABILITIES............................................................. 27
18. EXCLUSION OF WARRANTIES/PROVISION OF PRODUCT SAFETY DATA SHEETS......... 30
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CONFIDENTIAL TREATMENT REQUESTED
19. DISCHARGE CONDITIONS AND DEMURRAGE...................................... 30
20. FORCE MAJEURE........................................................... 33
21. APPLICABLE LAW, ARBITRATION AND EXPERT.................................. 35
22. ADDITIONAL CONDITIONS................................................... 36
23. NEW AND CHANGED REGULATIONS............................................. 37
24. NOTICES................................................................. 38
25. COSTS................................................................... 38
26. GENERAL................................................................. 39
27. WARRANTY OF STASCO...................................................... 40
28. DEFINITIONS............................................................. 40
APPENDIX 1: SPECIFICATION OF STIL PRODUCTS
APPENDIX 2: OPTIMIX A AND B
APPENDIX 3: SPECIFICATION OF ICI PRODUCTS
APPENDIX 4: PRODUCT TOLERANCES PER CARGO
APPENDIX 5: RECONCILIATION PROCESS
APPENDIX 6: EXAMPLE OF THE NOMINATION PROCESS
APPENDIX 7A: EXAMPLE OF THE RECONCILIATION PROCESS
APPENDIX 7B: 'Q4'99 RECONCILIATION PROCESS
APPENDIX 7C: 'TERMINATION RECONCILIATION PROCESS' (EXAMPLE)
APPENDIX 8A: NAPTHA AND PUL PRICE PUBLICATION (EXAMPLE)
APPENDIX 8B: BENZENE, TOLUENE, XYLENE PRICE PUBLICATION (EXAMPLE)
APPENDIX 8C: ETHYLENE PRICE PUBLICATION (EXAMPLE)
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CONFIDENTIAL TREATMENT REQUESTED
SHELL TRADING INTERNATIONAL LIMITED
AND
ICI CHEMICALS & POLYMERS LIMITED
SUPPLY AGREEMENT
1. SUPPLY
Shell International Trading and Shipping Company Limited whose registered
office is at Shell Max House, London, WC2R OZA ("STASCO") for and on behalf
of Shell Trading International Limited whom registered office is at Shall
Centre, London SEI 7NA ("STIL") hereby agrees to sell to ICI Chemi cals &
Polymers Limited whose registered office is at The Heath, Runcorn,
Cheshire, WA7 4QF ("ICI") and ICI hereby agrees to buy from STIL the
following products (hereinafter referred to as "STIL Products"), in the
quantities and subject to the qualities as set forth in this Agreement:
(i) Reformate from refineries owned or operated by companies affiliated
with STIL, including but not limited to:
1. [+++++]
2. [+++++]
3. [+++++]
(ii) Benzene/Toluene Heart-cut from refineries owned or operated by
companies affiliated with STIL, including but not limited to:
1. [+++++]
(iii) Benzene Heart-cut from refineries, owned or operated by companies
affiliated with STIL, including but not limited to:
1. [+++++]
(iv) Reformate, Benzene/Toluene Heart-cut and Benzene Heart-cut from
other sources to be approved by ICI
Additionally, ICI hereby agrees to sell to STIL and STIL hereby agrees to
buy from ICI, ICI's entire production stream of the following products from
ICI's
CONFIDENTIAL TREATMENT REQUESTED
North Tees Works (hereinafter referred to as "ICI Products"), subject to
the qualities and limitations in the quantities as set forth in this
Agreement:
(i) C9 Aromatics
(ii) Splitter Heavy Reject Stream
Further, the parties may in the future agree the sale by ICI to STIL, FOB
at ICI's jetty at Teesside, of Raffinate (non-aromatic C5/C6 cut), pygas,
naphtha and other streams in such volumes and upon such terms and
conditions as shall be agreed in writing.
2. QUANTITIES
a) Quantity of STIL Products Purchased
The quantity of STIL Products purchased by ICI hereunder shall be
the quantity of STIL Products [+++++] and measured in accordance
with the latest versions of ASTM Standards and API Manual of
Petroleum Measurement Standards (MPMS) generally accepted in the
petroleum industry.
b) Minimum Quantities
Due to the nature of shipping in bulk, it is expected by the parties
that STIL will not deliver products in the same quantity or
proportion [+++++] However, except as set forth below, STIL shall
schedule and deliver sufficient quantities of STIL Products during
each month such that [+++++]
c) Excess Quantities Delivered
STIL may, but shall not be obligated to, deliver quantities [+++++]
and ICI shall purchase and pay for such STIL Products, provided that
ICI shall not be required to pay for such products until the date
provided for in Clauses 13 f) and 14 and further provided that ICI
is able to accept the additional product within the storage
facilities dedicated to STIL Products under this Agreement or, to
the extent that it does not jeopardize normal operations, ICI's
other storage capabilities, subject nevertheless to the provisions
stated in the second paragraph of Clause 5 a).
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CONFIDENTIAL TREATMENT REQUESTED
d) Quantities of ICI Products
Subject to the STIL Quarterly Product Stream Notification (as
referred to in Clause 6 c) meeting the Optimix composition for C9s
and C10s, as set forth in Appendix 2, the maximum quantity of ICI
Products shall be:
Product Maximum in thousand tonnes per annum
[+++++] [+++++]
[+++++] [+++++]
STIL shall schedule and take delivery of the ICI Products on a
reasonably regular basis and in a manner which can reasonably be
anticipated will avoid there being any constraint to ICI's
manufacturing process, provided that it shall not be required to
take product on other than a backhaul basis.
e) Initial Purchase of Tank Heels
ICI agrees to purchase and pay by [+++++] representing the Tank
Heels. The pricing month shall be [+++++] If STIL fails to deliver
the Tank Heels without default of ICI, the payment shall take place
as set forth in Clause 14 a) on or prior to [+++++] and the pricing
month shall be the month of delivery.
The Tank Heels for each tank shall be as set forth below:
Tank Tank Heel Quantity Product
N3018F [+++++] Heavy reformate
F8/002 [+++++] Heavy reformate
F8/001 [+++++] Light reformate
N3000F [+++++] Light reformate
F8/003 [+++++] Heart-cuts
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CONFIDENTIAL TREATMENT REQUESTED
Heavy reformat refers to full-range reformates from [+++++] and
[+++++]
Light reformate refers to reformate from [+++++]
Heart-cuts refers to Benzene/Toluene Heart-cut and Benzene Heart-cut
from [+++++] and [+++++] and traded heart-cuts.
f) Tank Stock
Subject to the availability of the relevant tanks and no later than
40 days after the Stock Build Date as defined in Clause 13 d), the
minimum individual stocks of reformates and Heart-cuts in the tanks
"Minimum Operating Stock") shall, subject to the other provisions of
this Agreement, be:
(i) Reformate [+++++]
(ii) Heart-cuts [+++++]
Following the service of any notice to terminate this Agreement, ICI
may by notes to STIL reduce the level of [+++++] Upon giving such
notice the provisions of Clause 2 c) shall cease to apply.
3. QUALITY
a) Deliveries from STIL
(i) Supply Points
Each supply point (refinery) other than those specified herein shall
be subject to initial approval of ICI. Details of any intended
supply point which is not described herein shall be submitted to ICI
by STIL and ICI shall notify STIL that it either approves or
disapproves such supply point within 3 working days after request
from STIL. ICI shall not unreasonably withhold approval of such
supply point. A failure by ICI to disapprove such supply point
within 3 working days shall be deemed approval by ICI of such supply
point. If ICI shall disapprove such supply point, it shall within 10
working days from STIL's re quest for approval, include in its
notice of disapproval its full rationale for disapproving such
supply point.
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CONFIDENTIAL TREATMENT REQUESTED
(ii) Product Specifications
The STIL Products shall upon delivery, unless otherwise agreed by
ICI, meet the specifications set forth in Appendix 1, as amended
from time to time, if and as other supply points are added.
(iii) Product Tolerances
Any delivery under this Agreement shall be made under the prevailing
Quarterly Composition of the Product Streams (referred to in Clause
6c). The measured content of Benzene, Toluene and Xylenes for each
cargo shall fall within the Product Tolerances set forth in Appendix
4. ICI may decline to accept any cargo for which the measured
content for Benzene, Toluene or Xylenes falls outside the Product
Tolerances set forth in Appendix 4 based upon the prevailing
Quarterly Composition of the Product Streams.
b) Deliveries from ICI
The ICI Products shall upon delivery, unless otherwise agreed by
STIL, meet the specifications set forth in Appendix 3.
4. METHOD AND RATE OF SUPPLY
a) STIL Products
STIL Products shall be delivered ex-ship at ICI's North Tees Works,
England. For each delivery of STIL Products supplied under this
Agreement the parties shall agree a loading date range from which an
estimate may be made of the discharge date range. It is understood
that any loading date range for the STIL Products (and hence
estimated discharge date range) is always subject to change in which
case STIL will advise ICI promptly (and in any event prior to
completion of loading) of such changes. Subject to the provisions of
Clauses 2b, 7 and 20 of this Agreement, nothing in this Agreement
shall be construed as imposing on STIL an obligation to deliver the
STIL Product within a particular date range at the place of
delivery. All vessels used by STIL to deliver STIL Products and/or
to take ICI Products shall be subject to approval by ICI (such
approval not to be unreasonably withheld). STIL shall have the right
to substitute prod-
5
CONFIDENTIAL TREATMENT REQUESTED
uct (so long as it otherwise meets the requirements of this Agreement)
to be shipped in such vessels at its sole discretion.
The STIL Products delivered to ICI shall unless otherwise agreed be
in:
(i) [+++++] for reformates and
(ii) [+++++] for Benzene Heartcut and Benzene/Toluene heartcut.
b) ICI Products
ICI Products shall be delivered FOB STIL's vessel at ICI's North Tees
Works, England. Subject to the provisions of Clause 2d), for each
delivery of ICI Products supplied under this Agreement the parties
shall agree a loading date range.
In order to allow STIL a backhaul freight optimisation, ICI will load
[+++++] on to the vessels provided and agreed between the parties for
this purpose.
5. ICI FACILITIES
a) Minimum Storage Capacity for STIL Products
Other than as provided under Clause 13 d) herein ICI agrees to provide
at all times during the term of this Agreement the following minimum
storage capacity for the storage of STIL Products located in
reasonable proximity to ICI's jetties at its North Tees Works, England
(hereinafter referred to as "ICI Storage Tanks"):
Tank Capacity ([+++++])
N3018F [+++++]
F8/002 [+++++]
F8/001 [+++++]
N3000F [+++++]
F8/003 [+++++]
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CONFIDENTIAL TREATMENT REQUESTED
The above tankage capacity shall be maintained all at times by ICI.
Additional tankage may be provided by ICI at the request of STIL, such
provision to be agreed between the parties.
ICI shall have the right to perform required maintenance an any
storage tanks and production facilities. In such an event the parties
shall use reasonable endeavors to mitigate the effect of such
maintenance, provided always that ICI must make available other
storage capacity in substitution for tanks N3018F/ F8/003 in respect
of the [+++++]and [+++++] streams of STIL Products.
ICI may at any time provide substitute storage tanks with the prior
approval of STIL, such approval not to be unreasonably withheld.
b) Minimum Storage Capacity for ICI Products
ICI shall provide at all times during the term of this Agreement the
following minimum storage capacity for the storage of ICI Products to
be delivered to STIL located in reasonable proximity to ICI's jetties
at North Tees Works, England.
Tank Capacity ( [+++++])
N2782F [+++++]
N2783F [+++++]
ICI may at any time provide substitute storage tanks with the prior
approval of STIL, such approval not to be unreasonably withheld.
c) Loading and Unloading Facilities
ICI shall arrange for all vessels to be discharged and/or loaded as
expeditiously as possible. ICI shall at all material times and at
their own expense provide and maintain or cause to be provided and
maintained in good working order all necessary flexible hoses,
connections, pipelines, tankage facilities and other accommodation for
discharge and/or loading of the products from and/or to the vessel.
6. NOMINATION
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CONFIDENTIAL TREATMENT REQUESTED
a) Optimix Notification
On or before the 35th calendar day prior to the commencement of each
quarter, ICI shall notify STIL as to whether it is electing to be
supplied under the OPTIMIX Mode A nomination or OPTIMIX Mode B1 or
OPTIMIX Mode B2 nomination procedure. Optimix A, Optimix B1 and
Optimix B2 qualities are fully defined in Appendix 2. ICI shall not be
entitled to nominate Optimix Mode B2 for more than two calendar
quarters in any twelve month period but shall otherwise be free to
nominate the mode of supply without restriction.
b) Quarterly Volume Optimix Nomination
On or before the 35th calendar day prior to the commencement of each
quarter, ICI shall notify STIL [+++++] of Optimix A or B1 OR B2 as
appropriate for the quarter. The nominated range shall fall within the
following minimum and maximum limits:
Optimix A: [+++++]
Optimix B1 or B2: [+++++]
c) Quarterly Product Stream Quality Notification
On or before the 30/th/ calendar day prior to the commencement of each
quarter, STIL shall notify ICI of the intended quantity and quality
composition of the Product Streams to be delivered to ICI ("Quarterly
Composition of the Product Streams") and shall demonstrate that these
shall be capable of complying with the nominated Optimix quality
requirements for the following quarter. ICI shall have two working
days after receipt to notify STIL of any defect in the mathematical
calculation and the parties shall immediately consult to resolve any
such defect. If no agreement is reached (such agreement not to be
unreasonably withheld) then STIL shall deliver or otherwise make
available the last agreed quality composition of the Product Streams
until a new agreement is reached or at the request of either party,
the issue may be submitted to an expert under Clause 21 C) for
resolution. For the avoidance of doubt, such submission shall not
relieve the parties of their respective obligations to deliver and
take products under this Agreement. The Quarterly Composition of the
Product shall specify the estimated content of the following
components: Benzene, Toluene, Xylene, Ethytbensene, C9s and C10s for
each of the products and each of the supply points.
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CONFIDENTIAL TREATMENT REQUESTED
However, if as a result of the foregoing provisions, ICI is required
to process a higher proportion of Heavy reformate as opposed to Light
reformate than that set out in Appendix 2, then STIL will reimburse to
ICI any additional costs (energy) reasonably incurred by ICI.
d) Estimated Monthly Optimix Nomination
On or before the 35/th/ calendar day prior to the commencement of each
month, ICI shall notify to STIL [+++++] being the estimated quantity
of Optimix A or B1 or B2 as appropriate to be delivered under this
Agreement ("Estimated Monthly Nominated Quantity"). The nominated
range shall fall within the following minimum and maximum limits as
appropriate for Optimix A or B1 or B2.
Optimix A [+++++]
Optimix B1 or B2 [+++++]
The mid-point of the Estimated Monthly Nominated Quantity shall
additionally be within [+++++] Estimated Quarterly Nominated Quantity
for the quarter in which the month falls, unless otherwise mutually
agreed.
e) Final Monthly Optimix Nomination
On or before the 5/th/ calendar day prior to the commencement of each
month, ICI shall notify STIL of the required quantity of Optimix to be
delivered under this Agreement ("Nominated Optimix Quantity"). The
Nominated Quantity shall be within the range of the Estimated Monthly
Nominated Quantity previously nominated for the month in accordance
with Clause 6 d) above.
f) Yearly Product Nomination
ICI shall ensure that in any 12 month period starting from the Com
mencement Date or anniversary thereof the sum of the Monthly Optimix
Nominated Quantity for the 12 month period [+++++]
g) Monthly STIL Product Nomination
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CONFIDENTIAL TREATMENT REQUESTED
Within 3 working days after receipt of the Nominated Optimix Quantity,
STIL (or its nominees) shall notify ICI of the quantities of STIL
Products that STIL will schedule to deliver or otherwise have
available to ICI during the month of nomination which shall provide
the product pursuant to the Quarterly Composition of the Product
Streams ("STIL Products Nomination"). ICI shall have one working day
after receipt to notify STIL of any defect in the mathematical
calculation and the parties shall immediately consult to resolve any
such defect. If no agreement is reached before the commencement of the
month (such agreement not to be unreasonably withheld), then STIL
shall deliver or otherwise make available the STIL Products
Nomination, within the tolerances set out in Appendix 4 based upon the
prevailing Quarterly Composition of the Product Streams and any
adjustments shall be resolved through the reconciliation process as
set out in Clause 9.
h) Monthly STIL Product Availability
On or before the 5/th/ calendar day prior to the commencement of each
month, ICI shall notify STIL of the quantity of ICI Products likely to
be available for export to STIL under this Agreement, which [+++++]
set forth in Clause 2 d) of this Agreement. The availability of ICI
Products is determined by [+++++]
7. VOLUMES AND LOGISTICS
a) STIL (or its nominees) and ICI will arrange cargo scheduling jointly
to ensure smooth logistics in line with ICI's storage capacities. Each
party will nominate an individual to coordinate logistics.
b) ICI shall provide to the person nominated by STIL (or its nominees)
daily tank readings of each of the ICI Storage Tanks and shall, upon
request, provide access to the ICI Storage Tanks at any reasonable
time to any representative designated by STIL for purposes associated
with this agreement.
8. PRICES
a) The delivered prices for the STIL Products shall be:
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CONFIDENTIAL TREATMENT REQUESTED
The Benzene Heart-cut price per metric tonne
[+++++]
The Benzene/Toluene Heart-cut price per metric tonne
[+++++]
The Reformate price P(R) per metric tonne
[+++++]
b) Prices for the ICI Products - P (C9) and P (SHR) - per metric tonne
shall be as follows:
[+++++]
c) Price for Ethylbenzene per metric tonne for reconciliation purposes
shall be as follows:
[+++++]
d) Price for Xylene (Virgin) for reconciliation purposes shall be [+++++]
e) The above symbols shall have the following meaning:
P(Bz) = [+++++]
P(Tol) = [+++++]
P(R) = [+++++]
P(C9) = [+++++]
P(SHR) = [+++++]
P(N) = [+++++]
P(PUL) = [+++++]
P(Eth) = [+++++]
P(EB) = [+++++]
f) The price formulas set forth in paragraphs a) and b) above shall be
[+++++]
g) The price shall be calculated to three (3) decimal places and the
following arithmetic rules shall be applied to do this:
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CONFIDENTIAL TREATMENT REQUESTED
(i) If the fourth decimal place is five (5) or greater than five (5)
then the third decimal place shall be rounded up to the next
digit.
(ii) If the fourth decimal place is four (4) or less than four (4)
then the third decimal place will be unchanged.
h) In the event that any index referenced in this Agreement (including
any exhibits thereto) ceases to be published or if the publisher
changes quotation criteria, the parties shall meet to discuss an
alternative index which most closely replaces the index as it is
published on the date this Agreement is executed. If the parties fail
to agree within 30 days after either party notifies the other party,
the issue shall be submitted to an expert in accordance with Clause 21
c) of this Agreement. To assist the expert in such determination, each
party shall submit one, and only one, proposed replacement index and
the expert shall determine which of the two proposed indexes most
closely approximates the index which is changed or no longer
published.
9. QUARTERLY QUALITY AND QUANTITY RECONCILIATION
a) Quarterly Reconciliation
There will be a quarterly reconciliation and quantity and quality for
the purpose of reconciling the actual quantity and quality of product
consumed or lost by ICI as against the quantity of product nominated
by ICI. Reconciliation takes place once every quarter, however within
the reconciliation process the quantity reconciliation reference
period is the month and the quality reconciliation reference period is
the quarter.
b) ICI will declare the reconciliation payment due (from STIL to ICI, or
from ICI to STIL as the case may be) for any quarter to STIL on or
before the 10/th/ day of the first month following that quarter. This
declaration ('Quarterly Reconciliation Declaration') will include:
(i) Declaration of quantities consumed or lost during the quarter
(ii) Declaration of reconciliation payment required for quantity
(iii) Declaration of reconciliation payment required for quality
(iv) Declaration of total reconciliation payment due
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CONFIDENTIAL TREATMENT REQUESTED
(v) Details of calculations used to compute the reconciliation
payment due
The reconciliation payment will be referred to as the 'Total
Reconciliation Payment'.
c) Any reconciliation payment shall be made [+++++] the period of
reconciliation.
d) The financial reconciliation involves three steps designed to
calculate the payment due for the Net Amount Utilised during the
previous calendar quarter:
(i) Quantity reconciliation -- calculating the 'Quantity
Reconciliation Payment'
(ii) Quality reconciliation -- calculating the 'Quality
Reconciliation Payment'
(iii) Overall financial reconciliation -- calculating the "Total
Reconciliation Payment'
The total financial amount generated by those three steps represents
the reconciliation payment in its entirety.
e) Process
ICI will maintain a database of daily and cumulative delivery
(quantity and quality); and daily consumption and loss. The data will
be based on the following sources:
(i) Delivery data: based on the Certificate of Quantity and
Quality.
(ii) Consumption and loss: calculated an a daily basis based on:
daily stock deltas based on ICI daily stock dip; and quantity
and quality of products discharged, determined by the
Certificate of Quantity and Quality
This database will be used to calculate the actual quantity and
quality of the Net Amount Utilised during the quarter. Main outputs
will be monthly and quarterly quantities of the Net Amount Utilised,
and cumulative quality of material delivered in the quarter
('Quarterly Quality') on FIFO (First In First Out) basis as described
in Clause 9 g)
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CONFIDENTIAL TREATMENT REQUESTED
of this Agreement. The data will be kept substantially in the format
set out in Appendix 7a.
f) The Quantity Reconciliation Process
The quantity reconciliation payment is the difference between the
amount invoiced for the quarter, and the value of the Net Amount
Utilised during the quarter. The value of the Net Amount Utilised
during each month shall be determined by multiplying the prices for
the nominated Optimix quality during the same month (in accordance
with Appendix 2); and Net Amount Utilised during each month (as
calculated from the ICI database detailed in Clause 9 e) above, and
declared in the Quarterly Reconciliation Declaration). These monthly
values of the Net Amount Utilised shall then be summed to give the
quantity reconciliation value during the quarter.
g) The Quality Reconciliation Process
The quality used during the quarter shall be determined on the basis
of FIFO, the product shall be deemed to be removed from the storage
tanks in the same order in which that product was delivered into those
tanks (including any product carried forward from the previous
quarter). Any product for which payment was not made by ICI during the
quarter shall be carried forward into the next quarter.
The quality is determined by the [+++++] For each component, the
difference between the content for the nominated Optimix quality, and
its content in the Net Amount Utilised in the quarter, is [+++++]
[+++++]
to give a reconciliation payment for each component. The
reconciliation payments for each of the four components are then
summed to give the quality reconciliation payment.
h) The Overall Financial Reconciliation
The 'Total Reconciliation Payment' is determined by the sum of the
Quantity Reconciliation Payment and the Quality Reconciliation
Payment. These payments are defined in the sections above.
i) The detailed methodology is defined in Appendix 5.
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CONFIDENTIAL TREATMENT REQUESTED
Each calculation to be made under this Clause 9 shall be calculated to
two (2) decimal places and the following arithmetic rules shall be
applied to do this:
(i) If the third decimal place is five (5) or greater than five (5)
then the third decimal place shall be rounded up to the next
digit.
(ii) If the third decimal place is four (4) or less then four (4)
then the third decimal place will be unchanged.
j) Any dispute between the parties arising under this Clause 9 shall be
referred to an expert for determination pursuant to Clause 21 c) of
this Agreement
10. MEASUREMENT, SAMPLING AND TESTING
a) The quantity of STIL Product discharged and ICI Product loaded shall
be that discharged or loaded at the place of delivery and shall be
based on North Tees Works port meter measurements in accordance with
API MPMS Chapter 5 or in the absence of port meters, the meters of any
delivering or receiving vessels. Meters shall be proved on each
delivery in accordance with API MPMS Chapter 4, except as set forth
below.
b) The quantity and quality of products shall be determined at the place
of delivery by an independent Inspector instructed in accordance with
the Agreement and who is satisfactory to both ICI and STIL. Unless
otherwise agreed STIL will appoint and instruct the Inspector and the
charges of the Inspector to so act shall be shared equally between ICI
and STIL. Any charges of the Inspector for performing duties not
specified in the Agreement will be for the account of the party so
instructing the Inspector.
c) The Inspector shall be instructed to issue and send a telex, cable or
facsimile showing the quantity and quality of products discharged
and/or loaded to STIL and ICI immediately upon completion of
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CONFIDENTIAL TREATMENT REQUESTED
discharge or loading of the products and then issue, sign and send the
Certificate of Quantity and Quality showing the quantity and quality
of products to ICI and STIL as soon as possible thereafter. The
Certificate of Quantity and Quality issued shall state the methodology
and show the calculations used to determine the quantity and quality
of products.
d) The results of measurement, sampling and testing as evidenced by the
Inspector's certificate shall, for the purposes of this Agreement, be
treated as conclusive as to the quantity and quality of products dis
charged or loaded, save for fraud or manifest error.
e) ICI shall ensure that both the Inspector and STIL's representative has
full access to any part of the products handling or storage facilities
deemed necessary by the Inspector or STIL's representative in order to
determine the quantity and quality of the products discharged or
loaded. The Inspector shall take and retain two sealed, labelled and
dated samples from vessel tanks, discharging or loading line and
receiving tanks for each grade of products delivered under this
Agreement.
f) On every occasion the Inspector takes any other samples in accordance
with the methodology and procedures described in this Agreement, the
Inspector shall take two further samples which shall be sealed,
labelled, dated and retained. STIL, ICI or their respective
representatives may instruct the Inspector to take and retain other
samples. The Inspector shall be instructed to retain samples for at
least 90 days from completion of discharge or loading date and may be
instructed to retain them for a longer period by ICI or STIL or their
respective representatives.
g) ICI will give or will procure that STIL's representative and the
Inspector are given full access to and copies of the latest records
covering the maintenance, calibration and proving of all equipment
used to determine the quantity of products discharged or loaded in
order to record that such equipment is in the opinion of the Inspector
and STIL's representative in a suitable condition to determine
accurately the quantity of Products discharged or loaded.
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CONFIDENTIAL TREATMENT REQUESTED
h) For products delivered from STIL's vessel directly into static shore
tanks (that is shore tanks to or from which no products are being
pumped other than the products being delivered under this Agreement)
and where metering facilities are not available, or where in the
opinion of the Inspector the meter did not perform in accordance with
API MPMS Chapter 5, or where the meters were not proven for that
delivery in accordance with API MPMS Chapter 4, the quantity of
products shall be based on discharge port shore tank gaugings in
accordance with API MPMS Chapter 3.
For ICI Products delivered to STIL's vessel directly from ICI's static
shore tanks (that is shore tanks to or from which no products are
being pumped other than the products being delivered under this
Agreement) and metering facilities are not available, or where in the
opinion of the Inspector the meter did not perform in accordance with
API MPMS Chapter 5, or where the meters were not proven for that
delivery in accordance with API MPMS Chapter 4, the quantity of
products shall be based on loading port shore tank gaugings in
accordance with API MPMS Chapter 3.
i) For products delivered from STIL's vessel directly into active shore
tanks (shore tanks where products are being pumped out of the tank
during delivery hereunder) and where no correctly functioning or
proven discharge port meters are available in accordance with Clause
10(a) above, the quantity of products shall be that determined at the
load part as evidenced by certificates of quantity (or bills of lading
where certificates of quantity are not available) and in accordance
with measurement, sampling and testing used at the load port. The
Inspector will be instructed to indicate on the documents showing the
quantity of products issued under Clause 10(c) that the products were
delivered into active shore tanks.
j) For products delivered to STIL's vessel directly from active shore
tanks (shore tanks where products are being pumped out of the tank
during delivery hereunder) and where no correctly functioning or
proven loading part meters are available in accordance with Clause
10(a) above, then the quantity of products shall be that determined at
the discharge port as evidenced by certificates of quantity (or bills
of lading where certificates of quantity are not available) and in
accordance with measurement, sampling and testing used at the
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CONFIDENTIAL TREATMENT REQUESTED
discharge port. The Inspector will be instructed to indicate on the
documents showing the quantity of products issued under Clause 10(c)
that the products were delivered from active shore tanks.
k) Temperature measurements shall be taken by manual measurement of shore
tanks in accordance with API MPMS Chapter 7. Where metering facilities
are used for quantity determination, temperature measurement shall be
taken at the metering manifold using integral temperature compensators
or by manually integrating temperature over the discharge or loading.
The quantity of products shall be adjusted to volume at 60F in
accordance with Table Number 6A of ASTM-IP Petroleum Measurement
Tables (ASTM designation D-1250. IP designation 200) or such other
measure as determined in a definitive agreement.
11. RISK AND TITLE
a) The STIL Products delivered under this Agreement shall be at the risk
of, and the property in the STIL Products shall pass to ICI as soon as
they pass the vessel's permanent hose connection at ICI's North Tees
Works, England. Any loss of or damage to the STIL Products during
discharge shall, unless caused by the vessel or her officers or crew,
be for the account of ICI.
b) The ICI Products delivered under this Agreement shall be at the risk
of, and the property in the ICI Products shall pass to STIL as soon as
they pass the vessel's permanent hose connection at ICI's North Tees
Works, England. Any loss of or damage to the ICI Products during
loading shall, unless caused by the terminal or any shore facilities
or personnel, be for the account of STIL.
12. SHIPPING RISKS
a) If and so long as voyages to any of the ports of loading or discharge
under this Agreement in each case within CWE or any sea areas through
which the vessel has to travel in performance of this Agreement, incur
additional insurance or war risk insurance premiums
18
CONFIDENTIAL TREATMENT REQUESTED
in excess of those prevailing at the date of this Agreement for either
vessel's hull and machinery or cargo or both, the cost of such additional
insurance and/or additional premiums for each delivery of STIL Products
shall be shared equally by ICI and STIL in addition to the price stipulated
in this Agreement. In all cases outside CWE, such cost shall be borne by
STIL.
b) STIL reserve the right to refuse at any time:
(i) to direct any vessel to undertake or to complete such a voyage to
the intended port of discharge if such vessel is required in
performance of this Agreement.
a) to transit or to proceed or to remain in waters so that the
vessel concerned would be involved in a breach of the
Institute of London Underwriters Warranties or, in STIL's
reasonable opinion, risk to its safety or risk of ice damage;
or
b) to transit or to proceed to or to remain in waters where there
is war (de facto or de lure) or threat thereof; or
(ii) to direct any vessel to undertake a voyage to the intended
destination if such vessel is required in performance of the
terms of this Agreement to transit waters which, in STIL's
reasonable opinion, would involve abnormal risk or delay.
c) If ICI requests and STIL agrees to direct a vessel to undertake or to
complete a voyage as referred to in Clause 12 b) (a) above then ICI
undertakes to reimburse STIL in addition to the price for each supply
of STIL Products as provided in this Agreement for costs to STIL of
any additional insurance premiums and any other sums that STIL is
required to pay to vessel owners including but not limited to any sums
in respect of any amounts deductible under vessel owners' insurance
and any other costs and or expenses incurred by STIL.
13. COMMENCEMENT AND DURATION
a) This Agreement shall commence on the 1/st/ October 1999 (the
"Commencement Date"), however, during the period 1/st/ October 1999 to
31/st/ December 1999, an interim agreement shall apply as set forth in
Clause 13 c), d) and e) below.
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CONFIDENTIAL TREATMENT REQUESTED
b) This Agreement shall continue until terminated by either party giving
not less than 12 months' notice, notice not to be given before 1
October 2000.
c) ICI shall notify the Optimix quality and nominate the Optimix quantity
for the fourth quarter of [+++++] prior to [+++++] STIL shall invoice
the [+++++] The Optimix quality shall apply for invoicing purposes to
[+++++] The nomination will include the pre-deliveries. The invoice
for the first quarter of this Agreement shall exclude predeliveries
for which payment was made by ICI.
d) ICI shall give STIL access to Tank Stocks storage capacity before the
Commencement Date as defined herein. ICI shall indicate by [+++++] the
earliest date from which STIL will be able to deliver the first
quantities of STIL Products (the "Stock Build Date"). This Stock Build
Date shall fall between [+++++] On the Stock Build Date:
(i) ICI shall make available [+++++] storage capacity for the
reception of STIL Products.
(ii) 15 days after the Stock Build Date, ICI shall make available a
further [+++++] of storage capacity
(ii) 40 days after the Stock Build Date, ICI shall make available
the full storage capacity as defined in Clause 5 a).
(iv) The date at which ICI may start taking STIL Products from the
Tank Stocks defined as the On Stream Date shall be agreed
between the parties but may not fall within the first 20 days
following the Stock Build Date.
e) Notwithstanding Clause 13 d) ICI and STIL shall use their reasonable
endeavors to accommodate early delivery of reformate and heart-cuts in
the second and third quarters of [+++++]. Those deliveries shall be
paid on the [+++++] and such volumes of pre-deliveries shall be taken
into account as deliveries during the fourth quarter for nomination
and reconciliation purposes. ICI shall pay for the Tank Heels on the
[+++++] The reconciliation process for the fourth quarter of 1999 will
comprise the Tank Heels, the Minimum Operating Stock and the quantity
consumed or lost by ICI. An example of this process for illustrative
purposes is contained in Appendix 7b.
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CONFIDENTIAL TREATMENT REQUESTED
f) At the termination or other ending of this Agreement, there shall be a
final reconciliation in accordance with Clause 9 of this Agreement.
ICI shall pay STIL for any product delivered by STIL for which payment
has not been made. Payment shall be due [+++++] ("Bill of Lading") of
the last delivery of STIL product. An example of this process for
illustrative purposes is contained in Appendix 7c.
g) Both parties acknowledge that during the transition period as being
the fourth quarter of 1999 it may be at times difficult to meet the
cargo tolerances as specified in Appendix 4 and the C9 specification
in terms of lead as set forth in Appendix 3. The parties will
cooperate to mitigate any consequences.
14. INVOICING AND PAYMENT
a) STIL Products
As soon as reasonably possible after the end of each month, STIL shall
issue an invoice to ICI (Facsimile accepted) calculated with reference
to the monthly STIL Products Nomination for that month as defined in
Clause 6 g). The price of the Benzene Heartcut and Benzene/Toluene
Heartcut components of the STIL Product Nomination Split shall be
calculated with reference to the [+++++] described in Appendix 2. For
all STIL Products the price formulas as defined in Clause 8 above
apply. An example of the monthly payment calcula tion is set forth in
Appendix 7. Such invoice shell be paid by ICI to STIL [+++++]
b) ICI Products
As soon as reasonably possible after the end of each month, ICI shall
issue an invoice to STIL (Facsimile accepted). For all ICI Products
the price formulas as defined in Clause 8 above apply.
Such invoice shall be paid by STIL to ICI [+++++]
c) Provisional Invoicing
Where the pricing terms for the product to be supplied hereunder do
not allow and/or, where needed hereunder, the Inspector's discharged
quantity figures are not available in time for a final invoice to be
dispatched in time for payment to be made by the due date, either
party may invoice the other on a provisional basis. In the case of a
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CONFIDENTIAL TREATMENT REQUESTED
provisional invoice, the loaded quantity will be used and a document
recording the loaded details presented to that other party instead of
the discharge details as described in Clause 10. A final invoice will
be dispatched as soon as is practical thereafter.
Any resultant additional payment or overpayment will be paid imme
diately by the relevant party to the other.
d) Each quarter, a reconciliation shall be conducted as set forth under
Clause 9 and shall be due for payment on or before [+++++]
e) Unless otherwise agreed the payment of any other costs, expenses or
charges which arise under the terms of this Agreement shall be made
against presentation of the payee's invoice (following the incurring
of such costs, expenses or charges) and shall be for immediate
settlement by the payer on or by the date advised thereon.
f) All payments to be made by ICI to STIL under this Agreement shall be
made free of all charges and without asserting at the time for payment
any set off, counterclaim or right to withhold whatsoever, unless
specifically permitted hereunder, in United States Dollars in New York
to STIL's account number [+++++] with the [+++++] (or to such other
bank account as may be advised by STIL to ICI from time to time)
quoting STIL's invoice number and ICI's name.
All payments to be made by STIL to ICI under this Agreement shall be
made free of all charges and without asserting at the time for payment
any set off, counterclaim or right to withhold whatsoever, unless
specifically permitted hereunder, in United States Dollars direct to
[+++++] for credit to ICI Petrochemicals account number [+++++](or to
such other bank account as may be advised by ICI to STIL from time to
time) quoting ICI's invoice number and STIL's name.
g) Unless otherwise agreed in writing [+++++]
h) The foregoing shall not be construed as an indication of any
willingness on the part of either party, to provide extended credit as
a matter of course and shall be without prejudice to any rights and
remedies which that party may have under this Agreement or otherwise.
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CONFIDENTIAL TREATMENT REQUESTED
i) Where the last day for payment falls on a Saturday or on a weekday
other than Monday which is not a banking day in such place as may be
designated by the recipient party for payment, then any such payment
shall be made on the nearest preceding banking day. Where the last day
for payment falls on a Sunday or a Monday which is not a banking day
in such place so designated, then any such payment shall be made on
the next following banking day.
15. TAXES AND DUTIES
a) All taxes, duties, charges or imposts, whether retroactive or not,
which are levied in the country in which the Products are discharged
on or by reference to, or on or by reference to amounts payable with
respect to the Products or the vessel (other than those defined by
Worldscale for owners' account) shall be for purchaser's account, and
the purchaser of each Product shall reimburse the seller for the full
amount of any such taxes, duties, charges or imposts which the seller
is obliged to pay.
b) The purchaser of each product will obtain at its own risk and expense
any import license or other official authorization necessary for the
importation of the goods.
c) Without prejudice to the above, as between the parties to the
Agreement the purchaser of each product shall be responsible for
complying with Customs entry procedures at the discharge port and
liable to Customs authorities for all duties and taxes that arise in
respect of such Customs entry.
d) In the absence of a declaration by STIL to the contrary, STIL hereby
declares that ICI Products taken by STIL are for delivery outside of
the UK.
16. ASSIGNMENT/CHANGE OF REFINERY OWNERSHIP
a) Any assignment of this Agreement shall be by novation agreement.
Neither party shall assign this Agreement without the consent of the
other party, such consent and agreement to novate not to be
unreasonably withheld.
23
CONFIDENTIAL TREATMENT REQUESTED
b) If at any time STIL shall announce an intent to sell or close one or
more of the named refineries, STIL will have the right to terminate
this Agreement upon giving not less than 12 months' notice, such
notice not to be given prior to 1 October 2000. Promptly following
notice, the parties shall meet and discuss the implications thereof
and shall seek to agree appropriate amendments to this Agreement to
avoid the termination. In the absence of agreement and provided that
there is a sale or closure of any one or more of the named refineries,
this Agreement shall terminate in accordance with the notice.
17. LIABILITIES
a) Except as specifically hereinafter provided, neither party shall be
liable to the other (whether in contract, negligence and/or tort) for
any indirect, special or consequential losses or damages, other than
as specifically set forth herein.
b) Any claim in respect of a shortage in quantity or defeat in the
quality of products will only be considered by the seller of such
product if notice in writing of such claim is received by the seller
within forty-five (45) days after the Bill of Lading date (Bill of
Lading date equals day zero) for the particular cargo and such notice
is followed by a fully documented claim to be received by the seller
within sixty (60) days after the Bill of Lading date (Bill of Lading
date equals day zero). If the buyer fails to give notice of or to
submit any such claim within the time limits, the buyer's claim is
deemed to be waived and any liability on the part of the seller
extinguished.
c) If STIL shall default in the delivery of STIL Products, ICI shall be
entitled:
(i) to acquire substitute products from a third party or third
parties; and/or
(ii) to acquire downstream products that would otherwise had been
derived from STIL Products
24
CONFIDENTIAL TREATMENT REQUESTED
and, except as limited below, all additional costs and losses reason
ably incurred by ICI in so doing shall be promptly refunded by STIL to
ICI.
STIL's liability (whether in contract, negligence and/or tort) for
default in the delivery of STIL Products shall be limited to the price
specified in Clause 8 times the amount of the STIL Products which STIL
has failed to deliver due to its default under this Agreement.
d) If STIL shall default in taking the ICI Products, ICI shall be
entitled to, and shall at STIL's request sell such products to a third
party or third parties and, except as limited below, all additional
costs and losses reasonably incurred by ICI in so doing shall be
promptly refunded by STIL to ICI. STIL's liability (whether in
contract, negligence and/or tort) for default in the taking of ICI
Products shall be limited to the price specified in Clause 8 times the
amount of the STIL Products which STIL has failed to take due to its
default under this Agreement.
e) If ICI shall default in nominating or taking the STIL Products, STIL
shall be entitled to and shall at ICI's request sell such products to
a third party or third parties and except as limited below all
additional costs and losses reasonably incurred by STIL in so doing
shall be promptly refunded by ICI to STIL.
ICI's liability (whether in contract, negligence and/or tort) for
default in nominating and/or taking the STIL Products and for default
in delivering the ICI Products shall be limited to the price specified
in Clause 8 times the amount of the STIL Products which ICI has failed
to nominate or take or the ICI Products which ICI has failed to
deliver respectively due to its default under this Agreement.
f) If STIL shall supply any STIL Products that shall not meet the
relevant specification described in Appendix 1, STIL shall promptly
refund to ICI all costs and losses reasonably incurred by ICI arising
therefrom provided that STIL's liability (whether in contract,
negligence and/or tort) under this Paragraph f) shall be limited to
the price specified in Clause 8 times the amount of the STIL Products
which failed to meet the relevant specifications described in Appendix
1.
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CONFIDENTIAL TREATMENT REQUESTED
g) If ICI shall supply any ICI Products that shall not meet the relevant
specification described in Appendix 3, ICI shall promptly refund to
STIL all costs and losses reasonably incurred by STIL arising
therefrom provided that ICI's liability (whether in contract,
negligence and/or tort) under this Paragraph g) shall be limited to
the price specified in Clause 8 times the amount of the ICI Products
which failed to meet the relevant specifications described in Appendix
3.
h) In all of the circumstances referred to in paragraph c) to g) above,
each party shall be under a duty to take all reasonable steps to
mitigate the costs and losses incurred by it.
i) Nothing contained in this Clause 17 shall have the effect of excluding
either party's liability for death and personal injury caused by that
party's negligence.
j) The parties acknowledge that damages may not represent an adequate
remedy for a default on the part of either party to deliver products
hereunder and that in the circumstances an order for specific
performance may be an appropriate remedy.
18. EXCLUSION OF WARRANTIES/PROVISION OF PRODUCT SAFETY DATA SHEETS
a) The product specifications herein constitute the whole of each party's
obligations with respect to the quality of product to be supplied and
(save to the extent that exclusion thereof is not permitted or is
ineffective by operation of law) all statutory or other conditions or
warranties, with respect to the description, merchantability or
quality of the products or its fitness for any purpose are hereby
excluded.
b) Notwithstanding the foregoing, each party shall, prior to first
delivery of the product concerned, provide to the other party product
safety data sheets relating to their respective products.
19. DISCHARGE CONDITIONS AND DEMURRAGE
26
CONFIDENTIAL TREATMENT REQUESTED
a) STIL has the right to deliver and ICI shall accept the delivery of the
total quantity of STIL Products that STIL is entitled and/or obligated
to deliver under this Agreement together with the amount of sediment
and water as might be present in the tanks arising from the handling
of the STIL Products by STIL and/or companies affiliated to STIL
and/or the vessel operator acting always as a Reasonable and Prudent
Operator. ICI shall not be obliged to accept delivery of STIL Products
under this Agreement if it has reasonable grounds to suppose that they
contain a quantity of water and sediment in excess of such amount.
b) ICI shall accept discharge of the STIL Products at a berth which ICI
shall provide or cause to be provided free of charge and which the
vessel can safely reach and leave and at which such vessel can lie and
discharge safely afloat. All charges at the discharge port (including
berth shifting for backhauls of ICI Products), other than those
defined by Worldscale as being for owner's account, shall be paid by
ICI.
c) Unless otherwise agreed, for the purposes of this Agreement a full
cargo shall be deemed to be the full carrying capacity of the vessel.
The time allowed for discharging a full cargo shall be [+++++] Sundays
and holidays included, and shall begin to run either:
(i) six (6) hours after notice has been tendered by the Master or
his representative to ICI, or their representative, of the
vessel's readiness in all respects to discharge, berth or no
berth, at any time of the night or day; or
(ii) when the vessel is securely moored, whichever is earlier
d) Such notice of readiness may for the purposes of this Agreement be
tendered at any time after the vessel has arrived within the customary
anchorage or waiting place of the port of discharge or, if the vessel
moves directly to the discharge berth, when the vessel is securely
moored to the berth.
e) [+++++]
f) If the vessel is loading ICI Products, the time allowed for loading
shall be [+++++] Sundays and holidays included, and shall begin to run
either:
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CONFIDENTIAL TREATMENT REQUESTED
(i) If the vessel is discharging STIL Products, at the expiration
of allowed discharge time as set forth in Clause 19 c) above;
or
(ii) if the vessel is not discharging STIL Products,
a. six (6) hours after notice has been tendered by the Master
or his representative to ICI, or their representative, of
the vessel's readiness in all respects to discharge, berth
or no berth, at any time of the night or day; or
b. when the vessel is securely moored, whichever is earlier.
g) If the vessel is not loading ICI Products, laytime shall cease on dis
connection of cargo hoses on completion of discharging. If the vessel
is loading ICI Products, laytime shall cease on disconnection of cargo
hoses on completion of loading. Provided, however, that in either
case, if the vessel is delayed after disconnection of cargo hoses for
ICI's purposes in excess of one hour, laytime shall continue to run
and demurrage, if incurred, shall continue to be payable from
disconnection of cargo hoses until the termination of such delay.
h) Time shall not count against laytime, or if the vessel is on
demurrage, for demurrage, when spent or lost:
(i) on an inward passage moving from her waiting place, even if
lightening has occurred there, to the North Tees Works; or
(ii) whilst the vessel is handling or preparing to handle ballast or
bunkers, unless this is carried out concurrent with discharging
or other normal cargo operations such that no loss of time is
involved, or is carried out to comply with shore restrictions;
or
(iii) by any delay due to fault, failure or inefficiency of the
vessel, or if departure is delayed for vessel's purposes other
than for reasons pertaining to safety of the vessel over which
the vessel has no control, or
(iv) awaiting tide, tug boats, pilot, daylight or moderation of
weather prior to berthing, ice, immigration, customs or
pratique unless any or all of these delays are occasioned by
shifting berth for ICI's account or
28
CONFIDENTIAL TREATMENT REQUESTED
unless any or all of these delays are the direct result of an initial
delay or delays caused to the vessel for ICI's account.
No other event shall suspend the running time to be counted as laytime
or demurrage even if it is an event of a type described in Clause 20
a).
i) If the laytime allowance as provided for in this Clause 19 is exceeded
ICI shall pay to STIL demurrage for all such excess time at the full
rate specified below. ICI's liability for demurrage shall be absolute
and shall not, in any case, be subject to the provisions of an
exceptions or Force Majeure provision.
j) Unless otherwise agreed, the rate of demurrage to be used for the
purposes of this Agreement shall be as follows:
(i) if the vessel is on voyage charter, the rate specified in the
charterparty; or
(ii) if the vessel is not on a voyage charter, then the rate shall
be the single voyage market level current in London on the date
of commencement of loading of the voyage concerned for a vessel
of similar type and summer deadweight to that actually
involved. Such market level shall be agreed by ICI and STIL and
shall be appropriate to the site of the vessel concerned. In
default of agreement between ICI and STIL the market level is
to be determined as the average rate advised by two independent
brokers mutually acceptable to ICI and STIL. If ICI and STIL
are unable to agree to two independent brokers then two such
brokers shall be nominated by the Chairman for the time being
of the London Tanker Brokers' Panel.
k) Payment of demurrage duty payable under this Agreement shall be made
by ICI to STIL [+++++] of STIL's invoice (date of invoice equals day
zero), and shall comply with the provisions of Clause 14.
20. FORCE MAJEURE
a) If either party is by reason of Force Majeure rendered unable wholly
or in part to carry out its obligations under this Agreement then (a)
the
29
CONFIDENTIAL TREATMENT REQUESTED
party affected shall give notice in writing of such Force Majeure to
the other party as soon as possible after the occurrence of the cause
relied on and (b) the party affected shall be released from its
obligations hereunder to the extent to which they are affected by the
circumstances of Force Majeure and for the period during which those
circumstances exist; provided that:
(i) the party affected shall use all reasonable endeavors to
terminate or mitigate the effect of the circumstances of Force
Majeure with all reasonable speed,
(ii) nothing in this clause shall relieve either party of its
obligations to make any payments due hereunder.
b) In this clause "Force Majeure" means circumstances beyond the control
of the party concerned and which notwithstanding the exercise by it of
reasonable diligence and foresight it was unable to prevent or
overcome. In assessing the circumstances of Force Majeure the standard
to be expected of a party shall be that of a Reasonable and Prudent
Operator.
For the avoidance of doubt:
(i) Force Majeure shall include the failure of a supplier to supply
STIL Products to STIL as a result of that suppliers' Force
Majeure provided, in such case, that STIL has used its
reasonable endeavors to obtain alternative supplies of STIL
Products from other supply sources on terms reasonably
acceptable to STIL, but has been unable to obtain such STIL
Products.
(ii) In the case of ICI, Force Majeure shall include the failure of
a customer to take and/or of ICI's inability to consume
downstream products derived from the STIL Products as a result
of that customer's, and/or ICI's Force Majeure provided, in
such case, that ICI has used its reasonable endeavors to seek
alternative customers on terms reasonably acceptable to ICI.
c) The party subject to Force Majeure shall:
30
CONFIDENTIAL TREATMENT REQUESTED
(i) Use all reasonable endeavors, to remedy or abate the Force
Majeure as expeditiously as possible; and
(ii) Resume performance as expeditiously as possible after
termination of the Force Majeure or the Force Majeure has
abated to an extent which permits resumption of such
performance; and
(iii) Notify the other party when the Force Majeure has terminated or
abated to an extent which permits resumption of performance to
occur; and
(iv) Keep the other party regularly informed during the course of
the Force Majeure as to when resumption of performance shall or
is likely to occur.
21. APPLICABLE LAW, ARBITRATION AND EXPERT
a) The proper law of this Agreement will be English Law and English Law
shall be used for interpreting this Agreement and for resolving all
claim or disputes arising out of or in connection with this Agreement
(whether based in contract in tort or on any other legal doctrine).
Any such claim or dispute not settled by negotiation shall be settled
by arbitration in London before a single arbitrator agreed upon by
both parties or if not so agreed appointed in accordance with the
Arbitration Act 1996 as amended from time to time. The arbitration
shall be conducted in English in accordance with the provisions of the
Arbitration Act 1996 as amended from time to time, the seat of the
arbitration shall be England and the arbitration award shall be final
without appeal to the courts.
b) The UN Convention of the International Sale of Goods (1980) shall not
apply.
c) Where pursuant to any provisions in this Agreement a matter is
required to be determined by an expert, the expert shall be a person
fitted by the possession of expert knowledge for the determination of
the particular matter in question. The expert shall be appointed by
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CONFIDENTIAL TREATMENT REQUESTED
agreement between STIL and ICI, or, in default of such agreement, by
the President for the time being of the Institute of Petroleum in
London.
d) STIL and ICI shall furnish the expert with all written or oral
information which he may reasonably require for his determination.
e) The cost of the services of the expert, if appointed, shall be shared
equally between STIL and ICI.
22. ADDITIONAL CONDITIONS
a) If either party should go into liquidation (other than voluntary
liquidation for the purpose of corporate reconstruction), or if a
receiver or sequestrator of the undertaking and assets (or any part
thereof) of either party should be appointed, or if either party
should become bankrupt or insolvent, enter into a Deed of Arrangement
or a composition for the benefit of its creditors, or should do or
suffer any equivalent act or thing under any applicable law, the other
party may, by written notice, forthwith terminate this Agreement
without prejudice to any right of action or claim accrued at the date
of termination.
b) If at any time the bank debt of either party (the "First Party")
should be assessed in the standard credit ratings published by
Standard and Poor's or Moody's at 'B' or less than 'B', that First
Party may be required by the other party (the "Second Party") to
provide security of payment by either (and at the First Party's
option) making advance cash payment or providing a letter of credit or
providing such other security as may be reasonably acceptable to the
Second Party.
In the case of ICI, the bank debt referred to in the preceding
paragraph shall be that of Imperial Chemical Industries plc, or if
this Agreement be novated by ICI, it shall be the bank debt of the
novatee (or the novatee's parent company if the novatee's bank debt is
not separately assessed).
In the case of STIL the bank debt referred to in the preceding para
graph shall be that of Shell Petroleum Company Limited, or if this
32
CONFIDENTIAL TREATMENT REQUESTED
Agreement be novated by STIL, it shall be the bank debt of the novatee
(or the novatee's parent company if the novatee's bank debt is not
separately assessed).
Any amounts then due by the First Party to the Second Party shall in
such event become payable. In the event that a cargo has not already
been delivered, the Second Party may withhold any cargo until such
payment or a letter of credit or other security shall have been
received by them. If the First Party fail to provide such payment or a
letter of credit or security on demand by the Second Party within a
period of three (3) London banking days after such demand is made, the
First Party shall be in repudiatory breach hereof and the Second Party
may forthwith by notice terminate this Agreement without prejudice to
any rights of action or claims either party may have under this
Agreement or otherwise.
23. NEW AND CHANGED REGULATIONS
a) It is understood by the parties that the parties are entering into
this Agreement in reliance on the laws, rules, Regulations, decrees,
agreements, concessions and arrangements (hereinafter called
"Regulations") in effect on the date hereof with governments,
government instrumentalities or public authorities affecting the
products sold hereunder including, but without limitation to the
generality of the foregoing, those relating to the production,
acquisition, gathering, manufacturing, transportation, storage,
trading or delivery thereof, insofar as such Regulations affect ICI or
STIL or their respective affiliates.
b) In the event that at any time and from time to time during the term of
this Agreement any Regulations are changed or new Regulations become
effective whether by law, decree or regulation or by response to the
insistence or request of any governmental or public authority or any
person purporting to act therefore, and the effect of such changed or
new Regulations (a) is not covered by any other provision of this
Agreement, and (b) has a material adverse economic effect upon a party
or their respective affiliates in a manner related to this Agreement,
such party shall have the option to request renegotiation of the
prices or other pertinent terms provided for in this Agreement.
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CONFIDENTIAL TREATMENT REQUESTED
The said option may be exercised by either party at any time after
such changed or new Regulation is promulgated, by written notice of
desire to renegotiate, such notice to contain the new prices or terms
desired by such party. If the parties do not agree upon new prices or
terms satisfactory to both within thirty (30) days after a party gave
such notice, such party shall have the right to terminate this
Agreement at the end of the said thirty (30) day period. Any Products
lifted during such thirty (30) days period shall be sold and purchased
at the price and on the terms applying hereunder without any
adjustment in respect of the new or changed Regulations concerned.
24. NOTICES
Unless otherwise specifically provided, all notices to be given hereunder
by either party to the other shall be sufficiently given if in writing and
sent by first class post or facsimile and delivered/addressed to the other
party as follows:-
To STIL:
STASCO, OTF/51 and OPT/23
Shell Mex House
Strand, London WC2R OZA
-- Telex SHELL LONDON 919651 (ATTN OTF/51 and OPT/23)
-- Facsimile LONDON 0171/ 546-6610 (ATTN OTF/51 and OPT/23)
To ICI:
The Company Secretary
ICI Chemicals & Polymers Limited
PO Box 13, The Heath
Runcom Cheshire, WA7 4QF
-- Facsimile 01928/580778
Either party may change its address for service by giving notice thereof to
the other party.
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CONFIDENTIAL TREATMENT REQUESTED
25. COSTS
Each of the parties will be solely responsible for their respective costs
and expenses relating to or incurred in negotiating or preparing this
Agreement.
26. GENERAL
a) In this Agreement where the context admits:
(i) references to this Agreement include the Appendices hereto.
(ii) references to Clauses are references to Clauses in this
Agreement.
b) The headings and any sub-headings are inserted for convenience only
and shall not affect the construction of this Agreement.
c) No waiver by either party of any default or defaults by the other
party in the performance of any of the provisions of this Agreement
shall operate or be construed as a waiver of any other or further
default or defaults, whether of a like or different character, nor
shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right or any
like right accruing to it thereafter. No failure of either party to
exercise any power given to it hereunder or to insist upon strict
compliance by the other of any obligation or condition hereof and no
custom or practice of the parties at variance with the terms hereof
shall constitute a waiver of any of the party's rights hereunder.
d) This Agreement may not be modified, varied or amended except by an
instrument in writing signed by both parties.
e) If at any time any one or more provisions contained in this Agreement
is or becomes invalid, illegal or unenforceable in any respect under
the laws of any applicable jurisdiction the validity, legality or
enforceability of the remaining provisions hereof shall not be in any
way affected or impaired thereby.
f) Confidentiality
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CONFIDENTIAL TREATMENT REQUESTED
(i) STIL agrees that during the term of this Agreement and for a
period of 12 months thereafter STIL will maintain in confidence
the following data:
a) The prices of the ICI Products
b) The quantities of the ICI Products to be shipped under this
Agreement
c) The specifications of the ICI Products
(ii) ICI agrees that during the term of this Agreement and for a
period of 12 months thereafter ICI will maintain in confidence
the following data:
a) The prices of the STIL Products
b) The quantities of the STIL Products to be shipped under
this Agreement
c) The specifications of the STIL Products
27. WARRANTY OF STASCO
STASCO warrants to ICI that it has the full right and authority to enter
into this Agreement for and on behalf of STIL.
28. DEFINITIONS
a) "banking day" means a day when the banks in the specified place are
open for the transaction of normal banking business;
b) "calendar" means a gregorian calendar;
c) "CWE" means One safe port Euromed, not east of but including Greece
and excluding Yugoslavia, former Yugoslavia and Albania plus One safe
port UK, continental seaboard Gibraltar -- Hamburg
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CONFIDENTIAL TREATMENT REQUESTED
including Eire plus Scandinavia including Denmark and Finland. This
whole range always within Worldscale limits.
d) "day" means a calendar day;
e) "ICI Storage Tanks" means the tanks described in Clause 5 which shall
be dedicated to the storage of STIL Products.
f) "kt" means a quantity equivalent to a mass of 1,000 metric tonnes;
g) "month" means a calendar month;
h) "Net Amount Utilised" means [+++++]
i) "quarter" means a period of three consecutive months beginning on
1/st/ January or 1/st/ April or 1/st/ July or 1/st/ October.
j) "Sellers' suppliers" means any body or person being a direct or
indirect source of supply for Sellers;
k) "Standards of a Reasonable and Prudent Operator" means the standards,
practices, methods and procedures conforming to law and that degree of
skill, diligence, prudence and foresight which could reasonably be
expected from a skilled and experience operator and/or contractor
engaged in the same type of undertaking under the same or similar
circumstances and "Reasonable and Prudent Operator" shall be construed
accordingly.
l) "Tank Stock" means the minimum stock in tanks during a month as
specified under Clause 2 f).
m) "Worldscale" means Worldwide Tanker Nominal Freight Scale.
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CONFIDENTIAL TREATMENT REQUESTED
SHELL INTERNATIONAL TRADING AND SHIPPING COMPANY LIMITED
for and on behalf of
SHELL TRADING INTERNATIONAL LIMITED
Signed: /s/ [Authorized Officer]
Date: 13 April 1999
ICI CHEMICALS & POLYMERS LIMITED
Signed: /s/ [Authorized Officer]
Date: 13 April 1999
38