Document 93nz5eb8dDzwOo5Z5evxMLbzR

agrees:;-! Late a an^ effective June I, 1970, 07 and "between SHELL CHEMICAL CCkPANI, a. division of SHELL GIu COMPANY, a Delaware coruoration, having an of 11 c2 at 110 Lost 51st Street, Lev 'ion, Lev York 10020 (hereinafter referred to as '`Shell"), and TENNECO PLASTICS DIVISION, TENNECO CHEMICALS, INC., a Delaware corporation, having an office at .260 Park Avenue, New York, New York 10017 (herein after referred to as "Tenneco"). 1. Term I_ T N E S_ S E T K: ' This Agreement shall he in effect for a primary period of five (5) calendar years "beginning January 1, 1972 and ending on December 31, 197& > and from calendar year to' calendar year thereafter,, either party being able to terminate this Agreement effective at the end of the primary period or the end of any calendar year thereafter, by giving the other party at least eighteen (l3) months prior written notice. / /} In the event Shell's facilities for the manufacture of Vinyl Chloride Monomer (VCM) at Deer Park, Texas are commercially operable prior to January 1, 1972 end Shell has YCM which it can make available for sale at that time, Shell shall notify Tenneco of such availability ca a first priority basis and Tenneco may elect to purchase all or part of the same on the same terms and conditions as set out here!: orcvided, however, that any such earlier purchases shall have no -effect on the obli gations of Shell or Tenneco hereunder. 2. Products - Quantities 1 y Shell shall sell and deliver to Tenneco and Tenneco shall rurchase and acc-: VCM.from Shell in. an. amount not less than nor more (except at Shell's option) than. 000071 the respective sininuns end naxiruas set forth, herein but not exceeding, exceot at "cell's option, 1/11 of the calender veil caxinci quantity during any calendar -oath. recuire to be delivered by Shell'during that calendar year vithin the range of the calendar year uininuu and naxim amounts as specified above. Except as further United by the applicable calendar year runinun and calendar year raxiruT, Tenneco vi.ll then be required to receive r.ot less than of that estimate for such calendar year and Shell vi'H be required to deliver not more than 110 of that estimate in the calendar year specified, unless Shell shall elect to deliver a greater quantity ordered by Tenneco.` 000072 year ip. vhich The price for VCM, F.O.B. Shell's plant at Deer Park, Texas shall be 5.247 cents per pound delivered and accepted during the calendar year 1974'for so,long as the Economic Stabilization Act and Regulations issued thereafter prohibit Shell from increasing the same and 5.90cents per pound thereafter. These prices or any other prices subsequently in effect hereunder are subject to increase or decrease any time after they have been in effect for ninety (90) days by Shell giving Tenneco at least thirty (30) days prior written notice. If any such increase is unacceptable to Tenneco, Tenneco shall so notify Shell at least fifteen (15) days before the effective date of the increase whereupon this Agreement shall terminate. 000073 :) Burins th^teni of thii-Acreemeut , SV\ell shall notify Tennteo in i) days of any change in thp freight cost^ betveezj. Deer rcnsvming locations. rstac^d and agreed to by s both. SI' ill and Tenners) "that nhe 1A tl herein is based neon de] .very in tank chrs of \a o) thousand gallon^ of net contained VCM, provided, hpvever. ik car capacity shall bal increased and| a new i|.et ecessaxy- Shojild such tve^ty-si:c (26) Vhousaru be deeded unacceptable for the transportation/of VCM ty governmental. aufhoritAor the like \ then a new net railN nev tank \car capacity vu 11 be calculated pursuant no erlm net rail car expense shall be as s-et out above. d}' Payments shall be made to Shell within, fifteen (15) days after receipt of Shell's BSBjfca*y Statement for VCM delivered during tne prior coma. e) vThe aasekjorice f*r al 1. increments >sefc forth, aoov^ shall suojec^ v.o increase or decrease effective of Janizary 1, d^T2 and] as of first-day of efacn calendar year'^hereafte^i, in accordance vith the armula\^3et out'Sj.n Exhio&J, 3 httached hereto. . ^ . '. < . . - /. f) If Shell^shall enter into an Agreement or Agreements to sell VCM r- -KwVn ni- velr's duratiqn, with ajtem cosjnencingyn any d^te between If Tenneco has provided to Shell prior to the commencement of any calendar year satisfactory written evidence of any offer received from a third party at least ninety (90) days prior to the commencement of such calendar year a price applicable to the purchase by Tenneco of `aiwii,000,000 pounds of VCM per calendar year and said offered price is lower by more than 0.1 cents per pound of VCM than Shell's applicable price in effect for the same period, then Shell shall have the option either to meet such third party price for the quantities so offered or deduct such quantities from the minimum and maximum volumes applicable to this Agreement for said calendar , year and each calendar year thereafter. agreed to be sold t<^ surra third( parties firing su^j year. 000074 2}. Orders -- Deliveries Hot less than, tea (10) days prior to the beginning of each calendar month hereof, Tenneco shall advise Shell of the quantity- of VCM desired during such month. Tenneco shall receive all VCM purchased hereunder into Tenaeco's tank cars, of agreed upon capacity, at Shell's Deer Park, Texas, plant. At-Term-eeo1 s option, By giving Shell notice at least tvelve (12) months prior to the beginning of each calendar year, Tsnneco may provide Shell vith an estimate as to that amount of "VCM not in excess of.the applicable calendar year maximum that Tenneco shall require Shell to deliver to Tenneco's consuming locations in Shell's tank cars during such calendar year. Subject to the atfolicable calendar year maximum, Tenneco vill then be required to receive and Shell vill be required to deliver in Shell's tank cars not less than 9C nor more than 110;!) of that estimate in such calendar year. ' In p~n subsequent calendar years Tenneco vill be required to receive and Shell vill be required to deliver in Shell tank cars, a quantity of VCM not less than, the greatest quantity set out in any such earlier estimate. Tenneco vill provide Shell, at least eighteen (lB) months prior to the beginning of each calendar.year, vith its best estimate as to the amount of VCM that Tenneco vill require Shell to deliver to * Tenneco's consuming locations in Shell's tank cars during such calendar year but such best estimate shall be of no binding force and effect. Although the use of tank cars is specified herein, it is not the intent of this Agreement to exclude other nodes cf transportation, vMch are and vill become practical, should such other modes of transportation be agreeable to both uarties. t. _ 000075 The veight of such deliver'/ shall be determined on. the basis of certified -/sights of the coman carrier of each loaded tank car utilizing printed tare of such tar.'; cars or sane other nears to be mutually agreed to. "Keel" allowance shall be computed an the basis of the standard factor at 5 psig of 3 lbs. per 100 gallons of car capacity. 5* Taxes All taxes and other governmental charges, if any, other than those based on incone, on the VCM or on Shell which are required to be paid or collected by Shell by reason of the VCM sold hereunder, shall be paid by Tenneco in addition to the price of the VCM. " . ..... - 6. Liabilities - Claim . . Shell warrants that the VCM delivered hereunder will meet the specifica tions set forth in Exhibit "A" therein, but Shell rakes HO OTHER WARRANTIES hereunder, WHETHER OF i-ESCHAI'fTA3ILITX, FITiiESS, OR OTHERWISE, AID HOKE SMALL BE IMPLIED. . . Shell shall have no liability for, and Tenneco shall indemnify Shell against ell claims, loss, liability and expense on account of, any injury or death of oerscns (including Tenneco1s employees) or damage to property (including Tenneco's) caused by or happening in connection with Tenneco's unloading, storage, handling or use of the Vinyl Chloride Monomer, unless due to the negligence of .Shell, its agents or employees in the manufacture or loading of the product. Eeither Shell nor Ter.r.eco shall have any liability to the other for any claims arising directly or indirectly out of or in connection with this Agreement, unless the claimant gives the other party notice of the claim (setting forth fully thei facts on which it is based) within ninety (JO) days after the date of delivery, or other transaction or occurrence giving rise,to the claim. 000076 7- Sxcuaes for t'ca-Perrornirce performance is delayed, impaired or prevented by any circumstances (except financial) reasonably beyond its control, or by fire, explosion, breakdown in machinery or equipment, or failure of catalyst, or riots, strikes, labor disputes, voluntary or involuntary compliance with any law, order, regulation, recommendation, or request of any governmental authority, or total or partial failure of the usual means of transportation of chlorine, ethylene, Dichloroethane or VCM, or inability or delay in obtaining all or any part of the raw materials used in the manufacture of Dichloroethane or VCM from Shell's earlier established internal or third party sources of supply. As used herein, "labor dispute" means any controversy to which either Shell or Shell's source for raw materials or Tenneco has an interest, involving wages, hours or working conditions and includes any strike, picketing, lockout, suspension of construction or any other action taken in connection with or because of the labor dispute. Neither Shell nor Tenneco shall have any obligation to participate in any settlement of a labor dispute, or to request its agents or contractors or raw material suppliers to do so except where the same is acceptable to such party in its sole judgment. The quantities of VCM consequently undelivered as a result of causes excused hereunder shall not be required to be made up by Shell or Tenneco upon resumption of full deliveries of VCM hereunder and such excused quantities shall be deducted from the applicable calendar year quantities. In the event that Shell is excused from delivering any quantity of VCM due to any of the causes specified above, Shell shall have the right to apportion, solely according to Shell's judgment, its available VCM productive capacity at its Deer Park, Texas plant to include Tenneco and Shell shall have no obligation in the event of any excused causes specified above to purchase ethylene, chlorine, Dichloroethane or VCM or to utilize any internal sources of supply of the same to perform hereunder. 060077 'Shell, shill pay Tenneco as liquidated damages at the end of each month during the calendar year 1912 or until such deficiency is corrected, vhichever occurs first, -the sua of 0.50 cents for each pound of VCM that Shell fails to deliver during Siuch. month, as ordered by Tenneco, less than 1/12 of the applicable calendar year minimum. In the event that such deficiency is not corrected prior to December 31, 1972, then the liquidated damages obligation hereunder shall terminat and thereafter Tenneco may terminate this Agreement by vritten notice given not later'than January'31, 1973 or'may attempt to renegotiate the same." As used herein, for the purpose of defining Shell's obligation to make nayments to Tenneco, a "design deficiency" shall not be considered to have occurred after it has been established that the facility is commercially operable at its capacity by tests generally accepted in the industry and performed by Shell's VCM process licensor, providing that vritten notice to that effect is given to Shell by its- process licensor. _ . * If performance by Shell hereunder is delayed or prevented, in vhole or in part, dus to any of the circumstances set out in paragraph 7, or for any other reason, thereby causing Tenneco to purchase VCM elsevhere, a~< 1. such purchases by ** . Tenneco vill be credited as if purchased by Tenneco from Shell in determining* the purchase price of the increments of VCM purchased thereafter from Shell. -As sign ability Ueither this A.greement nor any claim arising directly or indirectly out of or in connection therevith shall be assignable by either party or by operation of lav vithout the vritten consent of the other party, vhich shall not be unreaso ably vithheld, except that either party may assign its rights hereunder subject t 000078 t'he obligations hereof, to any successor of substantially all of its business assets pertaining to Vinyl Chloride l-tonoaer production or the use thereof as a rav materiel, as applicable- . t 9. Remedies * " . w . In the event of any breach by either party of any of the provisions of this Agreement, or any voluntary or involuntary bankruptcy, receivership, insolvency, or . reorganization proceedings of or against either party, the other party shall have the right in addition to any other rights or remedies it nay have to suspend or refuse deliveries hereunder and/or to terminate this Agreement hy notice to the defaulting party effective as of the date of such notice. Where proceedings ere brought against either party in bankruptcy, receivership, insolvency, or reorgani- zation, such party shall have a period of sixty (oO) days to vacate and discharge such proceedings before the other party shall have the right to terminate this Agreement. Either party1s right to require strict performance of the obligations of the other shall not be affected in any vay by any previous vaiver, forebearance or course of dealing. ." 10* Notices All notices or demands under this Agreement. vhsther required by the terms V hereof or otherwise shall be in writing and shall be delivered or nailed by certified or registered nail, return receipt requested, to the following addresses of the oariies or to such other addresses as may be hereafter designated in vriting by . the respective parties: ... 000079 t: to ''& .eco: Tennsco Plastics DXvisi Tenneco Chemicals, Inc. T'-irr.er Place Piscatavay, New Jersey Attention President ) 0335^ vith copy to: Tenneco Chcnicels, Inc. 280 Par!-: Avenue New York, New York 1001T Attention Secretary ; . If to Shell: . Shell Chemical Company A Division of Shell Oil Connany Industrial Chemicals Division- _ 110 West 51st Screet s Hew York, New York 10020 ` '' : Attention General Manager . 11- Governing; Lav " . ' v . Inis Agreement Is entered into in contemplation of the lav of the State of Hew York and shall be interpreted under and governed by the lavs cf the State of Hew York from tine tc tine obtaining. 12. Entirety - Execution This Agreement comprises the entire Agreement and merges and supersedes ell prior understandings and representations (oral or written) between Shell and Tenneco concerning the subject natter hereof. Neither this Agreement nor any' "subsequent Agreement amending or supplementing this Agreement shall be binding on. Shell or Tenneco unless and until it has been signed on Shell's or Tenneco'.s behalf by a duly authorized representative, and commencement of performance hereunder or under any such subsequent Agreement shall not constitute a waiver of this requirement. -> IIP WXEN2SS WfEHZOF, the parties hereto have signed this Agreement in duolicate as of the day and date first written above. '. SNEED CKZMiCAxi CCvCPnn C A Division of Shell Oil Company TEifh'ZCO PLASTICS DIVISION TEiiNECO CHEMICALS, INC. 3y_ K.,L. J'.ai Cer.eral Manager Industrial Chemicals Division Senior Vice-President Tenneco CherjL-rW-3 Oii^O EXKI3: ip \ 11 specificatiocs jmJ; YE-rfL CHLORIDE MODCMP Vinyl Chloride Acidity (as KCl) Acetylene Acetaldehyde Vater Sulfur Iron Boa-Volatiles Methyl Chloride Butadiene Color Appearance Stabilizer Peroxides 99*9% vol. .min, 1 ppm by vt.-nax. 1.0 ppm by vt. max. 5.0 ppm by vt. max. 100 ppm by vt. max.' 1.0 ppm'hy vt. mac, 0.5 ppm by vt. max. ' 100.0 ppm 'by vt. na 100 ppm by vt. arc. 9 ppm by vol. max. Colorless Clear and free from suspended mattcer ~V Bone 0.1 ppm marc. Additional specifications and test methods for oxygen and heavy ends and nitrogen and, if necessary, other impurities to oe agreed upon. 000081 000082 YCM. E "being defined as the veight\of net contained YCM in the tank car. calculated as the naxi: gross loaded veighf of th: leased tank car, permitted 000083 mendix X A and A-, Crude Oil Price nA" shall equal "the arithmetical average, exoressed in cents csr barrel, cf "the average of prices as published in Platt's Oilgram Price Service - Crude Supplement for West Texas (Sour) crude, in effect on the fifteenth (l5th) day of each, of the tvelve (12) months ending vith and including September in the:year preceding each year during vuich the escalated prices are to be computed* The prices to be averaged shall be the arithmetical average of West Texas (Sour) crude prices as posted, for crude oil of 32.0 - 32.9 degrees A.P.I. by Humble Oil and Refining Company; Texaco, Inc.; and Gulf Oil Corporation (or their successors). *'Ap" shall be the arithmetical average, expressed in cents per barrel, of "the average prices of the crude oil specified above for.the tvelve (12) months October, 1963, to and including September, 1969, as reported in the above-mentionec publication. Xf any of the companies named above (or their successors) cease to post urices for these crudes, them the prices posted by the remaining companies named above shall be used. If all the companies cease to post prices for these crudes, the crude oil prices to be used shall be determined by a method mutually satis factory to Tenneco and Shell. If the publication of Platt's Oilgram Price Service - Crude Supplement is discontinued, then the crude oil prices shall be determined by a method mutually satis factory to Tenneco and Shell. 000084 J1 Labor Ritas "B" shall equal the arithmetical average in cents per hour of the final average hourly earnings. Industrial Chemicals, i>or the twelve (12) months ending with. and inducing the month of September of the year preceding each year during vhich escalated prices are to be computed as reported by the United States Bureau of Labor Statistics m Table C-2. in the publication, "Employment, and Earnings." 'V shall as the arithmetical average, expressed in cents per hour, of the average hourly earnings. Industrial Chemicals, for the tvelve (12) months October, 1968, to and including September, 1969, as reported in the above-mentioned publication. Should the method of computing the hourly earnings referred to herein be changed, or should publication of same be discontinued or substantially delayed, the parties hereto shall agree upon the use of another similar labor rate compila- cicn end shall adjust the Labor Rate Base to conform to the calculation method of the nev compilation. .. C and Cp J_ .* Commodity indices i "C" shall equal the arithmetical averages of the latest final Wholesale Commodity Price Indices for Industrial Commodities for the twelve (12 ) months ending with and including the month of September in the year preceding each year during vhich escalated pricas are to be computed hereunder reported by the United Stages Bureau of Labor Statistics in the publication "Vfhoiesale Prices and Price --laca-L- ces * >1 000085 * nCjL,! shall "be the arithmetical average of the final 'wholesale Commodity Price Indices for Industrial Commodities for the twelve (12) months October, 1$68, to end including September, i99, es so reported in the above-mentioned publication I Should the method of computing the Wholesale Commodity Price Index referred to herein he changed, or should publication of same be discontinued or substantially delayed, the parties hereto shall agree upon the use of another similar index and. shall adjust the Wholesale Commodity Price Index Base to conform to the calculation method of the new index selected. If a new reference base is f established, the Wholesale Commodity Price Index Ease shall be converted to the new base by factors published by the 3ureau of Labor Statistics. If the weighting structure is revised, the unofficial index will be used until the official Index Is released. 000086