EX-10.10 11 d372656dex1010.htm FORM OF TERMINALLING SERVICES AGREEMENT TERMINALLING SERVICES AGREEMENT (Big Sandy Terminal)
Exhibit 10.10
TERMINALLING SERVICES AGREEMENT
(Big ▇▇▇▇▇ Terminal)
This Terminalling Services Agreement (the “Agreement”) is dated as of [ ], 2012 by and between Delek Refining Ltd., a Texas limited partnership (“Delek Refining”), and Delek Marketing-Big ▇▇▇▇▇, LLC, a Texas limited liability company (“Delek-Big ▇▇▇▇▇”).
WHEREAS, Delek Refining and Delek-Big ▇▇▇▇▇ desire to enter into this Agreement to memorialize the terms of their ongoing commercial relationship.
NOW, THEREFORE, in consideration of the covenants and obligations contained herein, the parties to this Agreement hereby agree as follows:
| 1. | DEFINITIONS |
Capitalized terms used throughout this Agreement shall have the meanings set forth below, unless otherwise specifically defined herein.
“Affiliate” means, with to respect to a specified Person, any other Person controlling, controlled by or under common control with that first Person. As used in this definition, the term “control” includes (i) with respect to any Person having voting securities or the equivalent and elected directors, managers or Persons performing similar functions, the ownership of or power to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the power to vote in the election of directors, managers or Persons performing similar functions, (ii) ownership of 50% or more of the equity or equivalent interest in any Person and (iii) the ability to direct the business and affairs of any Person by acting as a general partner, manager or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, Delek US and its subsidiaries (other than the Partnership and its subsidiaries), including Delek Refining, on the one hand, and the Partnership and its subsidiaries, including Delek-Big ▇▇▇▇▇, on the other hand, shall not be considered Affiliates of each other.
“Agreement” has the meaning set forth in the Preamble.
“Ancillary Services” means the following services to be provided by Delek-Big ▇▇▇▇▇ to Delek Refining: truck rack blending, tank sampling, tank-to-tank transfers, ethanol receipt (truck), ethanol storage, ethanol blending, generic gasoline additization, lubricity/conductivity additization, product receipt (barge), proprietary additive additization, red dye additization, transmix loading (truck) and seasonal flow improver additization or other similar services.
“Ancillary Services Fees” means, for any month during the Term of this Agreement, the fees set forth on Exhibit A to be paid by Delek Refining pursuant to Section 4 during that month for Ancillary Services provided by Delek-Big ▇▇▇▇▇.
“Applicable Law” means any applicable statute, law, regulation, ordinance, rule, determination, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, without limitation, all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question.
“Arbitrable Dispute” means any and all disputes, claims, controversies and other matters in question between Delek Refining, on the one hand, and Delek-Big ▇▇▇▇▇, on the other hand, required to be resolved by arbitration under this Agreement.
“bpd” means barrels per day.
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“Business Day” means a day, other than a Saturday or Sunday, on which banks in New York, New York are open for the general transaction of business.
“Capacity Resolution” has the meaning set forth in Section 25(c).
“Claimant” has the meaning set forth in Section 29(d).
“Confidential Information” means all information, documents, records and data that a Party furnishes or otherwise discloses to the other Party (including any such items furnished prior to the execution of this Agreement), together with all analyses, compilations, studies, memoranda, notes or other documents, records or data (in whatever form maintained, whether documentary, computer or other electronic storage or otherwise) prepared by the receiving Party which contain or otherwise reflect or are generated from such information, documents, records and data; provided, however, that the term “Confidential Information” does not include any information that (i) at the time of disclosure or thereafter is or becomes generally available to or known by the public (other than as a result of a disclosure by the receiving Party), (ii) is developed by the receiving Party without reliance on any Confidential Information or (iii) is or was available to the receiving Party on a nonconfidential basis from a source other than the disclosing Party that, insofar as is known to the receiving Party after reasonable inquiry, is not prohibited from transmitting the information to the recipient by a contractual, legal or fiduciary obligation to the disclosing Party.
“Contract Quarter” means a three-month period that commences on January 1, April 1, July 1 or October 1, and ends on March 31, June 30, September 30 or December 31, respectively, except that the initial Contract Quarter shall commence on the Effective Date and end on [ ], 2012 and the final Contract Quarter shall end on the last day of the Term.
“Contract Year” means a year that commences on July 1 and ends on the last day of June in the following year, except that the initial Contract Year shall commence on the Effective Date and the final Contract Year shall end on the last day of the Term.
“Control” (including with correlative meaning, the term “controlled by”) means, as used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.
“Deficiency Notice” has the meaning set forth in Section 9(a).
“Deficiency Payment” has the meaning set forth in Section 9(a).
“Delek-Big ▇▇▇▇▇” has the meaning set forth in the Preamble.
“Delek-Big ▇▇▇▇▇ Indemnitees” has the meaning set forth in Section 20(b).
“Delek Refining” has the meaning set forth in the Preamble.
“Delek Refining Indemnitees” has the meaning set forth in Section 20(a).
“Delek US” means Delek US Holdings, Inc., a Delaware corporation.
“Effective Date” means [ ], 2012.
“Enterprise Pipeline” means an approximately 10.5-mile refined products pipeline owned by Enterprise TE Products Pipeline Company LLC that runs between Enterprise’s Tyler Station and its Hopewell delivery point.
“Environmental Law” means all federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally enforceable requirements and rules of common law now or hereafter in effect, relating to pollution or protection of human health and the environment including, without limitation, the federal Comprehensive Environmental Response,
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Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other similar federal, state or local environmental conservation and protection laws, each as amended from time to time.
“Environmental Permit” means any permit, approval, identification number, license, registration, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law.
“Extension Period” has the meaning set forth in Section 2(a).
“Force Majeure” means acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, wars, blockades, insurrections, riots, storms, floods, washouts, arrests, the order of any court or Governmental Authority having jurisdiction while the same is in force and effect, civil disturbances, explosions, breakage, accident to machinery, storage tanks or lines of pipe, inability to obtain or unavoidable delay in obtaining material or equipment, inability of obtain Products because of a failure of third-party pipelines and any other causes whether of the kind herein enumerated or otherwise not reasonably within the control of the Party claiming suspension and which by the exercise of due diligence such Party is unable to prevent or overcome.
“Force Majeure Notice” has the meaning set forth in Section 24(a).
“Force Majeure Party” has the meaning set forth in Section 24(a).
“Force Majeure Period” has the meaning set forth in Section 24(a).
“Governmental Authority” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.
“Initial Term” has the meaning set forth in Section 2(a).
“Liabilities” means any losses, liabilities, charges, damages, deficiencies, assessments, interests, fines, penalties, costs and expenses (collectively, “Costs”) of any kind (including reasonable attorneys’ fees and other fees, court costs and other disbursements), including any Costs directly or indirectly arising out of or related to any suit, proceeding, judgment, settlement or judicial or administrative order and any Costs arising from compliance or non-compliance with Environmental Law.
“Minimum Storage Capacity” means aggregate storage capacity of 87,000 barrels.
“Minimum Throughput Capacity” means an aggregate amount of truck-loading capacity equal to 6,000 bpd multiplied by the number of calendar days in the Contract Quarter.
“Minimum Throughput Commitment” means an aggregate amount of Products received at the Terminal equal to at least 5,000 bpd multiplied by the number of calendar days in the Contract Quarter.
“Notice Period” has the meaning set forth in Section 23(a).
“Omnibus Agreement” means that certain omnibus agreement dated as of [ ], 2012, among Delek US, on behalf of itself and the other Delek Entities (as defined therein), Delek Refining, Lion Oil Company, the Partnership, Paline Pipeline Company, LLC, SALA Gathering Systems LLC, Magnolia Pipeline Company, LLC, El Dorado Pipeline Company, LLC, Delek Crude Logistics, LLC, Delek-Big ▇▇▇▇▇, Delek Logistics Operating, LLC, and Delek Logistics GP, LLC, as the same may be amended from time to time.
“OPIS” has the meaning set forth in Section 7.
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“Partnership” means Delek Logistics Partners, LP.
“Partnership Change of Control” means Delek US ceases to Control the general partner of the Partnership.
“Party” or “Parties” means that each of Delek Refining and Delek-Big ▇▇▇▇▇ is a “Party” and together are the “Parties” to this Agreement.
“Person” means any individual, partnership, limited partnership, joint venture, corporation, limited liability company, limited liability partnership, trust, unincorporated organization or Governmental Authority or any department or agency thereof.
“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money Rates Section as the Prime Rate.
“Product” or “Products” means the products described on Exhibit B.
“Receiving Party Personnel” has the meaning set forth in Section 29(e)(iv).
“Refinery” means Delek Refining’s crude oil refinery in Tyler, Texas.
“Respondent” has the meaning set forth in Section 29(d).
“Restoration” has the meaning set forth in Section 25(b).
“Shortfall Payment” has the meaning set forth in Section 6(b).
“Special Damages” has the meaning set forth in Section 19.
“Storage Fee” has the meaning set forth in Section 3(d).
“Suspension Notice” has the meaning set forth in Section 23(a).
“Term”, “Renewal Term” and “Initial Term” shall each have the meaning set forth in Section 2(a).
“Terminalling Service Fee” shall have the meaning set forth in Section 3(b).
“Terminal” means Delek-Big Sandy’s light product distribution terminal located in Big ▇▇▇▇▇, Texas.
“Termination Notice” has the meaning set forth in Section 24(b).
“Transmix” has the meaning set forth in Section 13.
| 2. | TERM |
(a) This Agreement shall have an initial term of five (5) years, commencing on the Effective Date (the “Initial Term”). Thereafter, Delek Refining shall have a unilateral option to extend this Agreement for two additional five (5) year periods on the same terms and conditions set forth herein (each, a “Renewal Term”). The Initial Term and any Renewal Terms are sometimes referred to collectively herein as the “Term.” In order to exercise its option to extend this Agreement for a Renewal Term, Delek Refining shall notify Delek-Big ▇▇▇▇▇ in writing not more than twenty-four (24) months and not less than twelve (12) months prior to the expiration of the Initial Term or any Renewal Term, as applicable.
(b) This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time upon written notice by either Party in the event the other Party commits a material breach of or materially defaults under the terms of this Agreement, and such breach or default is not cured (or a plan to cure such
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breach or default reasonably satisfactory to the non-breaching or non-defaulting Party has been adopted and is being diligently pursued by the breaching or defaulting Party) within fifteen (15) calendar days after receipt by the breaching Party of written notice from the non-breaching Party of such breach or default.
| 3. | MINIMUM THROUGHPUT COMMITMENT/STORAGE FEES |
(a) During each Contract Quarter during the Term and subject to the terms and conditions of this Agreement, Delek Refining shall throughput at least the Minimum Throughput Commitment at the Terminal, and Delek-Big ▇▇▇▇▇ shall make available to Delek Refining dedicated storage and throughput capacity at the Terminal, at all times sufficient to allow Delek Refining to throughput the Minimum Throughput Capacity at the Terminal. Allocation of storage and throughput capacity for separate Products at the Terminal shall be in accordance with current practices, or as otherwise may be agreed among the Parties from time to time.
(b) Subject to Section 6, Delek Refining shall pay Delek-Big ▇▇▇▇▇ a terminalling services fee (the “Terminalling Service Fee”) for the volumes it throughputs at the Terminal of $0.50 per barrel.
(c) Delek Refining may throughput volumes in excess of its Minimum Throughput Commitment, up to the then-available capacity of the Terminal.
(d) Delek Refining shall pay Delek-Big ▇▇▇▇▇ a fee of $50,000 per month (the “Storage Fee”) for dedicated storage capacity at the Terminal. The storage capacity provided to Delek Refining may be temporarily reduced by Delek-Big ▇▇▇▇▇ as a result of repairs and/or maintenance on storage tanks that reduce the storage capacity available in the Terminal, so long as the reduced storage capacity will not result in the inability of Delek-Big ▇▇▇▇▇ to provide the Minimum Storage Capacity.
(e) All fees set forth in this Agreement, including the Terminalling Service Fee and the Storage Fee, shall be adjusted on July 1 of each year of the Term, commencing on July 1, 2013, by a percentage equal to the increase or decrease, if any, in the FERC Oil Pipeline Index; provided, however, that no fee shall be decreased below the initial fee for such service provided in this Agreement. If the FERC Oil Pipeline Index is no longer published, the Parties shall negotiate in good faith to agree on a new index that gives comparable protection against inflation and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the fees. If Delek-Big ▇▇▇▇▇ and Delek Refining are unable to agree, a new index will be determined by arbitration in accordance with Section 29(d).
| 4. | ANCILLARY SERVICES |
Delek-Big ▇▇▇▇▇ shall provide Ancillary Services to Delek Refining at the Terminal. Delek Refining shall pay the per-barrel Ancillary Services Fees listed on Exhibit A for such services. If any additional ancillary services are requested by Delek Refining that are different in kind, scope or frequency from the Ancillary Services that have been historically provided, then the Parties shall negotiate in good faith to determine whether such ancillary services may be provided and the appropriate rates to be charged for such ancillary services. All fuel additives, dyes, de-icers and other additions requested to be added to the Products will be provided by Delek Refining at no cost to Delek-Big ▇▇▇▇▇.
| 5. | FEE INCREASE |
If, during the Term, new laws or regulations are enacted that require Delek-Big ▇▇▇▇▇ to make substantial and unanticipated capital expenditures (other than maintenance capital expenditures) with respect to the Terminal, Delek-Big ▇▇▇▇▇ may increase the Terminalling Service Fee or the Storage Fee, as applicable, to cover the cost of complying with these laws or regulations. Delek-Big ▇▇▇▇▇ and Delek Refining shall use their reasonable commercial efforts to comply with these laws and regulations, and shall negotiate in good faith to mitigate the impact of these laws and regulations and to determine the amount of increase to the Terminalling Service Fee or the Storage Fee. If Delek-Big ▇▇▇▇▇ and Delek Refining are unable to agree, the amount of such fee increases will be determined by arbitration in accordance with Section 29(d).
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| 6. | PAYMENT; SHORTFALL PAYMENTS |
(a) Delek-Big ▇▇▇▇▇ shall invoice Delek Refining monthly (or, in the case of any Shortfall Payments, quarterly). Delek Refining will make payments to Delek-Big ▇▇▇▇▇ by electronic payment with immediately available funds on a monthly (or in the case of Shortfall Payments, quarterly) basis during the Term with respect to services rendered by Delek-Big ▇▇▇▇▇ under this Agreement in the prior month (or, in the case of Shortfall Payments, Contract Quarter) upon the later of (i) ten (10) days after its receipt of such invoice and (ii) thirty (30) days following the end of the calendar month (or in the case of Shortfall Payments, Calendar Quarter) during which the invoiced services were performed. Any past due payments owed by Delek Refining to Delek-Big ▇▇▇▇▇ shall accrue interest, payable on demand, at the Prime Rate from the due date of the payment through the actual date of payment. Payment of any Terminalling Service Fee, Storage Fee, or Shortfall Payment pursuant to this Section 6 shall be made by wire transfer of immediately available funds to an account designated in writing by Delek-Big ▇▇▇▇▇. If any such fee shall be due and payable on a day that is not a Business Day, such payment shall be due and payable on the next succeeding Business Day.
(b) If, for any Contract Quarter, Delek Refining throughputs aggregate volumes less than the Minimum Throughput Commitment for such Contract Quarter, then Delek Refining shall pay Delek-Big ▇▇▇▇▇ an amount (a “Shortfall Payment”) equal to the difference between (i) the Minimum Throughput Commitment multiplied by the Terminalling Service Fee and (ii) the aggregate Terminalling Service Fees for such Contract Quarter payable under Section 3(b). The Parties acknowledge and agree that there shall be no carry-over of deficiency volumes with respect to the Minimum Throughput Commitment and the payment by Delek Refining of the Shortfall Payment shall relieve Delek Refining of any obligation to meet such Minimum Throughput Commitment for the relevant Contract Quarter. The Parties further acknowledge and agree that there shall not be any carry-over of volumes in excess of the Minimum Throughput Commitment to any subsequent Contract Quarter.
(c) The Parties acknowledge that the Enterprise Pipeline is not operating as of the the Effective Time. Any inability of Delek Refining to ship Products on the Enterprise Pipeline shall not relieve Delek Refining of its obligations hereunder, including its obligations to (i) meet the Minimum Throughput Commitment, (ii) make any Shortfall Payments hereunder and (iii) pay the Terminalling Service Fees hereunder, in each case from and after the Effective Time; provided, however, that following the commencement of shipments by Delek Refining of Products on the Enterprise Pipeline, any subsequent failure of the Enterprise Pipeline that is a Force Majeure event may relieve Delek Refining of such obligations as provided in Section 24.
| 7. | VOLUME LOSSES |
Delek-Big ▇▇▇▇▇ shall use commercially reasonable efforts to minimize volume losses of Product at the Terminal. Title to the Products tendered by or on behalf of Delek Refining for terminalling or storage hereunder will remain with Delek Refining at all times. Delek Refining shall, during each month, (i) be entitled to all volumetric gains in the Terminal and (ii) be responsible for all volumetric losses in the Terminal up to a maximum of 0.25%. If volume losses of any Product exceed 0.25% during any particular month, Delek-Big ▇▇▇▇▇ shall pay Delek Refining for the difference between the actual loss and the 0.25% allowance at a price per barrel for that Product as reported by the Oil Price Information Service (“OPIS”) using the monthly average OPIS unbranded contract rack posting for that Product during the month in which the volume difference was accounted for.
| 8. | REIMBURSEMENT |
(a) Delek Refining shall reimburse Delek-Big ▇▇▇▇▇ for the actual out-of-pocket cost of any third-party fees incurred in connection with carrying out the terms of this Agreement. Delek Refining may request that Delek-Big ▇▇▇▇▇ make certain expansion capital expenditures or convert any tank to storage of a different Product, and Delek-Big ▇▇▇▇▇ shall determine, in its sole discretion, whether to make such expenditures or conversions, considering among other things, whether Delek Refining agrees to bear, through adjustments to the Terminalling Service Fee or Storage Fee, as applicable, or otherwise, the additional costs and expenses incurred by Delek-Big ▇▇▇▇▇ as a result of such expenditures or conversions, including in the case of a conversion of any tank to storage of a different Product, all costs to clean, degas or otherwise prepare the tank(s) including, without limitation, the cost of removal, processing, transportation or disposal of all waste and the cost of any taxes or charges Delek-Big ▇▇▇▇▇ may be required to pay in regard to such waste. Notwithstanding the foregoing, except as provided in the Omnibus
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Agreement maintenance capital expenditures required for Delek-Big ▇▇▇▇▇ to continue to provide the services specified hereunder shall be paid for by Delek-Big ▇▇▇▇▇. In addition to the foregoing, Delek Refining shall have the right to require Delek-Big ▇▇▇▇▇ to make expansion capital expenditures of up to $250,000 per Contract Year and shall reimburse Delek-Big ▇▇▇▇▇ for any such expansion capital expenditures; provided that such expansion capital project does not adversely affect the operation of the Terminal, as determined in the reasonable discretion of Delek-Big ▇▇▇▇▇.
(b) All of the foregoing reimbursements shall be made in accordance with the payment terms set forth in Section 6(a) herein.
| 9. | DEFICIENCY PAYMENTS |
(a) As soon as practicable following the end of each calendar month under this Agreement, Delek Big ▇▇▇▇▇ shall deliver to Delek Refining a written notice (the “Deficiency Notice”) detailing any failure of the Company to meet its obligations under Section 3(a), Section 3(b), Section 3(c), Section 3(d), Section 4, Section 5, Section 6, Section 8 or Section 25(c) of this Agreement. The Deficiency Notice shall (i) specify in reasonable detail the nature of any deficiency and (ii) specify the approximate dollar amount that Delek-Big ▇▇▇▇▇ believes would have been paid by Delek Refining to Delek Big-▇▇▇▇▇ if Delek Refining had complied with its obligations under Section 3(a), Section 3(b), Section 3(c), Section 3(d), Section 4, Section 5, Section 6, Section 8 and Section 25(c) of this Agreement (the “Deficiency Payment”). Delek Refining shall pay the Deficiency Payment to Delek-Big ▇▇▇▇▇ upon the later of: (A) ten (10) days after its receipt of the Deficiency Notice and (B) thirty (30) days following the end of the calendar month during which the Deficiency Notice was delivered.
(b) If Delek Refining disagrees with the Deficiency Notice, then, following the payment of the undisputed portion of the Deficiency Payment to Delek-Big ▇▇▇▇▇, a senior officer of Delek Refing and Delek-Big ▇▇▇▇▇ shall meet or communicate by telephone at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary and shall negotiate in good faith to attempt to resolve any differences that they may have with respect to matters specified in the Deficiency Notice. If such differences are not resolved within thirty (30) days following the payment of any Deficiency Payment, Delek Refining and Delek-Big ▇▇▇▇▇ shall, within forty-five (45) days following the payment of such Deficiency Payment, submit any and all matters which remain in dispute and which were properly included in the Deficiency Notice to arbitration in accordance with Section 29(d). During the 60-day period following the receipt of any Deficiency Notice, Delek Refining shall have the right to inspect and audit the working papers of Delek-Big ▇▇▇▇▇ relating to such Deficiency Payment.
(c) If it is determined by arbitration in accordance with Section 29(d) that Delek Refining was required to make any or all of the disputed portion of the Deficiency Payment, Delek Refining shall promptly pay to Delek-Big ▇▇▇▇▇ such amount, together with interest thereon from the date provided in the last sentence of Section 9(a) at the Prime Rate, in immediately available funds.
| 10. | CUSTODY TRANSFER AND TITLE |
(a) Pipeline.
(i) Receipts. For Product received into the Terminal by pipeline, custody of the Product shall pass to Delek-Big ▇▇▇▇▇ at the flange where it enters the Terminal’s receiving line.
(ii) Deliveries. For Product delivered by the Terminal into pipeline, custody of the Product shall pass to Delek Refining at the flange where it exits the Terminal’s delivery line.
(b) Rail Receipts. For Product received by rail, custody shall pass to Delek-Big ▇▇▇▇▇ when the locomotive used to transfer Delek Refining’s rail cars to the Terminal is uncoupled from such rail cars at the Terminal.
(c) Truck. For receipts and deliveries to or from trucks, custody shall pass at the flange where the hoses at Delek-Big Sandy’s facility interconnect with the truck.
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(d) General. Upon re-delivery of any Product to Delek Refining’s account, Delek Refining shall become solely responsible for any loss, damage or injury to person or property or the environment, arising out of transportation, possession or use of such Product after transfer of custody and the provisions hereof shall apply to Product while in Delek-Big Sandy’s custody. Title to all Delek Refining’s Product received in the Terminal shall remain with Delek Refining at all times. Both Parties acknowledge that this Agreement represents a bailment of Products by Delek Refining to Delek-Big ▇▇▇▇▇ and not a consignment of Products, it being understood that Delek-Big ▇▇▇▇▇ has no authority hereunder to sell or seek purchasers for the Products of Delek Refining, except as provided in Section 13 below. Delek Refining hereby warrants that it shall, at all times, have good title to and the right to deliver, throughput, store and receive Products pursuant to the terms of this Agreement.
| 11. | PRODUCT QUALITY |
Delek Refining shall not deliver to the Terminal any Products which: (a) would in any way be injurious to the Terminal; or (b) may not be lawfully stored at the Terminal. Any and all Products that leave the Terminal shall meet all relevant ASTM, EPA, federal and state specifications, and shall not leave the Terminal in the form of a sub-octane grade product.
| 12. | MEASUREMENT |
All quantities of Products received or delivered by or into truck or rail shall be measured and determined based upon the meter readings at the Terminal, as reflected by delivery tickets or bills of lading, or if such meters are unavailable, by applicable calibration tables. All quantities of Products received and delivered by pipeline shall be measured and determined based upon the meter readings of the pipeline operator, as reflected by delivery tickets, or if such meters are unavailable, by applicable calibration tables. Deliveries by book transfer shall be reflected by entries in the books of Delek-Big ▇▇▇▇▇. All quantities shall be adjusted to net gallons at 60° F in accordance with ASTM D-1250 Petroleum Measurement Tables, or latest revisions thereof. A barrel shall consist of 42 U.S. gallons and a gallon shall contain 231 cubic inches. Meters and temperature probes shall be calibrated according to applicable API standards. Delek Refining shall have the right, at its sole expense, and in accordance with rack location procedure, to independently certify said calibration. Storage tank gauging shall be performed by Delek-Big Sandy’s personnel. Delek-Big Sandy’s gauging shall be deemed accurate unless challenged by an independent certified ▇▇▇▇▇▇. Delek Refining may perform joint gauging at its sole expense with Delek-Big Sandy’s personnel at the time of delivery or receipt of Product, to verify the amount involved. If Delek Refining should request an independent ▇▇▇▇▇▇, such ▇▇▇▇▇▇ must be acceptable to Delek-Big ▇▇▇▇▇, and such gauging shall be at Delek Refining’s sole expense.
| 13. | PRODUCT DOWNGRADE AND INTERFACE |
Product downgraded as a result of ordinary Terminal or pipeline operations including line flushing, rack meter provings or other necessary Terminal operations shall not constitute losses for which Delek-Big ▇▇▇▇▇ is liable to Delek Refining. Delek-Big ▇▇▇▇▇ shall account for the volume of Product downgraded, and Delek Refining’s inventory of Products and/or interface volumes (“Transmix”) shall be adjusted. If (i) Delek-Big ▇▇▇▇▇ does not have sufficient capacity at the Terminal for the Transmix and (ii) Delek Refining fails to remove its Transmix upon notice from Delek-Big ▇▇▇▇▇, then fifteen (15) days after Delek Refining’s receipt of such notification, Delek-Big ▇▇▇▇▇ shall have the right to sell such Transmix at market rates and return any proceeds to Delek Refining, less delivery costs in effect at the time of such sale.
| 14. | PRODUCT DELIVERIES, RECEIPTS AND WITHDRAWALS |
(a) All deliveries, receipts and withdrawals hereunder shall be made in accordance with the agreed-upon scheduling. Delek Refining warrants that it shall only send to the Terminal those employees, agents and other representatives acting on behalf of and at Delek Refining’s direction who have been properly instructed as to the characteristics and safe hauling methods associated with the Products to be loaded and hauled. Delek Refining agrees to be responsible to Delek-Big ▇▇▇▇▇ for the performance under this Agreement by its agents and/or representatives receiving Products at the Terminal.
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(b) Both Parties shall abide by all federal, state and local statutes, laws and ordinances and all rules and regulations which are promulgated by Delek-Big ▇▇▇▇▇ and furnished to Delek Refining or posted at the Terminal, with respect to the use of the Terminal as herein provided. It is understood and agreed by Delek Refining that these rules and regulations may be changed, amended or modified by Delek-Big ▇▇▇▇▇ at any time. All changes, amendments and modifications shall become binding upon Delek Refining ten (10) days following receipt by Delek Refining of a copy thereof.
(c) For all purposes hereunder, Delek Refining’s jobbers, distributors, carriers, haulers and other customers designated in writing or otherwise by Delek Refining to have loading privileges under this Agreement or having possession of any loading device furnished to Delek Refining pursuant to this Agreement, together with their respective officers, servants and employees, shall, when they access the Terminal, be deemed to be representatives of Delek Refining.
| 15. | ACCOUNTING PROVISIONS AND DOCUMENTATION |
Delek-Big ▇▇▇▇▇ shall furnish Delek Refining with the following reports covering services hereunder involving Delek Refining’s Products:
(a) Within ten (10) Business Days following the end of the month, a statement showing, by Product: (i) Delek Refining’s monthly aggregate deliveries into the Terminal; (ii) Delek Refining’s monthly receipts from the Terminal; (iii) calculation of all Delek Refining’s monthly terminalling services fees; (iv) Delek Refining’s opening inventory for the preceding month; (v) appropriate monthly adjustments (as applicable in accordance with Section 7); and (vi) Delek Refining’s closing inventory for the preceding month.
(b) A copy of any meter calibration report, to be available for inspection upon reasonable request by Delek Refining at the Terminal following any calibration.
(c) Upon delivery from the Terminal, a ▇▇▇▇ of lading to the carrier for each truck or rail delivery. As reasonably requested by Delek Refining, ▇▇▇▇ of lading information shall be provided to Delek Refining’s accounting group. Upon each truck delivery from the Terminal, ▇▇▇▇ of lading information shall be sent electronically through a mutually agreeable system.
(d) Transfer documents for each in-tank transfer.
(e) Delek-Big ▇▇▇▇▇ shall be required to maintain the capabilities to support truck load authorization technologies at the Terminal. However, costs incurred by Delek-Big ▇▇▇▇▇ for replacement of loading systems or software or other upgrades made at the request of Delek Refining shall be recoverable from Delek Refining either as a lump sum payment or through an increase in terminalling fees. Notwithstanding the foregoing, if a replacement or upgrade is made other than at Delek Refining’s request, Delek-Big ▇▇▇▇▇ and Delek Refining shall mutually agree on a fee for such replacement or upgrade.
| 16. | AUDIT AND CLAIMS PERIOD |
During the Term, Delek Refining and its duly authorized agents and/or representatives, upon reasonable notice and during normal working hours, shall have reasonable access to the accounting records and other documents maintained by Delek-Big ▇▇▇▇▇, or any of Delek-Big Sandy’s contractors and agents, which relate to this Agreement, and shall have the right to audit such records at any reasonable time or times during the Term of this Agreement and for a period of up to three years after termination of this Agreement. Claims as to shortage in quantity or defects in quality shall be made by written notice within thirty (30) days after the delivery in question or shall be deemed to have been waived. The right to inspect or audit such records shall survive termination of this Agreement for a period of two (2) years following the end of the Term. Delek-Big ▇▇▇▇▇ shall preserve, and shall cause all contractors or agents to preserve, all of the aforesaid documents for a period of at least two (2) years from the end of the Term.
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| 17. | LIENS |
To secure any fees due and Delek Refining’s performance of its obligations under this Agreement, Delek Refining hereby grants to Delek-Big ▇▇▇▇▇ an irrevocable lien and security interest in and on all of its Products in the care and custody of Delek-Big ▇▇▇▇▇ and further grants Delek-Big ▇▇▇▇▇ a limited power-of-attorney to dispose of such Products at fair market value to the extent of any and all amounts owed by Delek Refining to Delek-Big ▇▇▇▇▇ hereunder, after providing Delek Refining with reasonable advance notice of any such sale. At Delek-Big Sandy’s request, Delek Refining shall sign a UCC-1 financing statement acknowledging Delek-Big Sandy’s security interest in Delek Refining’s Product in the Terminal.
| 18. | TAXES |
Delek Refining shall pay or cause to be paid all taxes, levies, royalties, assessments, licenses, fees, charges, surcharges and sums due of any nature whatsoever (other than income taxes, gross receipt taxes, ad valorem or property taxes and similar taxes on Delek-Big Sandy’s facilities) imposed by any federal, state or local government that Delek-Big ▇▇▇▇▇ incurs on Delek Refining’s behalf for the services provided by Delek-Big ▇▇▇▇▇ under this Agreement. If Delek-Big ▇▇▇▇▇ is required to pay any of the foregoing, the Parties shall cooperate with respect to any filings or contests with respect thereto and Delek Refining shall promptly reimburse Delek-Big ▇▇▇▇▇ in accordance with the payment terms set forth in this Agreement.
| 19. | LIMITATION ON LIABILITY |
Notwithstanding anything to the contrary contained herein, neither Party shall be liable or responsible to the other Party or such other Party’s affiliated Persons for any consequential, punitive, special or exemplary damages, or for loss of profits or revenues (collectively referred to as “Special Damages”) incurred by such Party or its affiliated Persons that arise out of or relate to this Agreement, regardless of whether any such claim arises under or results from contract, tort, or strict liability; provided that the foregoing limitation is not intended and shall not affect Special Damages imposed in favor of unaffiliated Persons that are not Parties to this Agreement.
| 20. | INDEMNITIES |
(a) Delek-Big ▇▇▇▇▇ shall defend, indemnify and hold harmless Delek Refining, its Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “Delek Refining Indemnitees”) from and against any Liabilities directly or indirectly arising out of (i) any breach by Delek-Big ▇▇▇▇▇ of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of Delek-Big ▇▇▇▇▇ made herein or in connection herewith proving to be false or misleading, (ii) any failure by Delek Big-▇▇▇▇▇, its Affiliates or any of their respective employees, representatives, agents or contractors to comply with or observe any Applicable Law, or (iii) injury, disease, or death of any Person or damage to or loss of any property, fine or penalty, any of which is caused by Delek-Big ▇▇▇▇▇, its Affiliates or any of their respective employees, representatives, agents or contractors in the exercise of any of the rights granted hereunder or the handling, storage, transportation or disposal of any Products hereunder, except to the extent that such injury, disease, death, or damage to or loss of property was caused by the gross negligence or willful misconduct on the part of the Delek Refining Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, Delek-Big Sandy’s liability to the Delek Refining Indemnitees pursuant to this Section 20(a) shall be net of any insurance proceeds actually received by the Delek Refining Indemnitee or any of their respective Affiliates from any third Person with respect to or on account of the damage or injury which is the subject of the indemnification claim. Delek Refining agrees that it shall, and shall cause the other Delek Refining Indemnitees to, (a) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Delek Refining Indemnitees are entitled with respect to or on account of any such damage or injury, (b) notify Delek-Big ▇▇▇▇▇ of all potential claims against any third Person for any such insurance proceeds, and (c) keep Delek-Big ▇▇▇▇▇ fully informed of the efforts of the Delek Refining Indemnitees in pursuing collection of such insurance proceeds.
(b) Delek Refining shall defend, indemnify and hold harmless Delek-Big ▇▇▇▇▇, its Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “Delek-Big ▇▇▇▇▇ Indemnitees”) from and against any Liabilities directly or indirectly arising out
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of (i) any breach by Delek Refining of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of Delek Refining made herein or in connection herewith proving to be false or misleading, (ii) any failure by Delek Refining, its Affiliates or any of their respective employees, representatives, agents or contractors to comply with or observe any Applicable Law, or (iii) injury, disease, or death of any Person or damage to or loss of any property, fine or penalty, any of which is caused by Delek Refining, its Affiliates or any of their respective employees, representatives, agents or contractors in the exercise of any of the rights granted hereunder or the handling, storage, transportation or disposal of any Products hereunder, except to the extent that such injury, disease, death, or damage to or loss of property was caused by the gross negligence or willful misconduct on the part of the Delek-Big ▇▇▇▇▇ Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, Delek Refining’s liability to the Delek- Big ▇▇▇▇▇ Indemnitees pursuant to this Section 20(b) shall be net of any insurance proceeds actually received by the Delek-Big ▇▇▇▇▇ Indemnitees or any of their respective Affiliates from any third Person with respect to or on account of the damage or injury which is the subject of the indemnification claim. Delek-Big ▇▇▇▇▇ agrees that it shall, and shall cause the other Delek-Big ▇▇▇▇▇ Indemnitees to, (a) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Delek-Big ▇▇▇▇▇ Indemnitees are entitled with respect to or on account of any such damage or injury, (b) notify Delek Refining of all potential claims against any third Person for any such insurance proceeds, and (c) keep Delek Refining fully informed of the efforts of the Delek-Big ▇▇▇▇▇ Indemnitees in pursuing collection of such insurance proceeds.
(c) THE FOREGOING INDEMNITIES ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE SOLE, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE, STRICT LIABILITY OR FAULT OF ANY OF THE INDEMNIFIED PARTIES (EXCLUDING, IN THE CASE OF SECTION 20(a)(iii) AND SECTION 20(b)(iii), GROSS NEGLIGENCE OR WILLFUL MISCONDUCT).
| 21. | INSURANCE |
(a) Business Interruption Insurance. Delek Refining shall maintain commercially reasonable business interruption insurance for the benefit of the Terminal for so long as Delek-Big ▇▇▇▇▇ is a consolidated subsidiary of Delek US. Allocation of benefits under such business interruption insurance policy shall be proportionate to the loss in operating margin sustained by Delek Refining and Delek-Big ▇▇▇▇▇ as a result of the interruption.
(b) Insurance (Other than Business Interruption Insurance). During the Term of this Agreement, each of Delek-Big ▇▇▇▇▇ and Delek Refining shall at all times carry and maintain, or cause to be carried and maintained, with reputable insurance companies reasonably acceptable to the other Party, the insurance coverages and limits set forth on Exhibit C.
| 22. | GOVERNMENT REGULATIONS |
(a) Applicable Law. The Parties are entering into this Agreement in reliance upon and shall fully comply with all Applicable Law which directly or indirectly affects the Products throughput hereunder, or any receipt, throughput delivery, transportation, handling or storage of Products hereunder or the ownership, operation or condition of the Terminal. Each Party shall be responsible for compliance with all Applicable Laws associated with such Party’s respective performance hereunder and the operation of such Party’s facilities. In the event any action or obligation imposed upon a Party under this Agreement shall at any time be in conflict with any requirement of Applicable Law, then this Agreement shall immediately be modified to conform the action or obligation so adversely affected to the requirements of the Applicable Law, and all other provisions of this Agreement shall remain effective.
(b) New or Changed Applicable Law. If during the Term, any new Applicable Law becomes effective or any existing Applicable Law or its interpretations is materially changed, which change is not addressed by another provision of this Agreement and which has a material adverse economic impact upon a Party, either Party, acting in good faith, shall have the option to request renegotiation of the relevant provisions of this Agreement with respect to future performance. The Parties shall then meet to negotiate in good faith amendments to this Agreement that will conform to the new Applicable Law while preserving the Parties’ economic, operational, commercial and competitive arrangements in accordance with the understandings set forth herein.
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| 23. | SUSPENSION OF REFINERY OPERATIONS |
(a) From and after the second anniversary of the Effective Date, in the event that Delek Refining decides to permanently or indefinitely suspend refining operations at the Refinery for a period that shall continue for at least twelve (12) consecutive months, Delek Refining may provide written notice to Delek-Big ▇▇▇▇▇ of Delek Refining’s intent to terminate this Agreement (the “Suspension Notice”). Such Suspension Notice shall be sent at any time (but not prior to the second anniversary of the Effective Date) after Delek Refining has notified Delek-Big ▇▇▇▇▇ of such suspension and, upon the expiration of the period of twelve (12) months (which may run concurrently with the twelve (12) month period described in the immediately preceding sentence) following the date such notice is sent (the “Notice Period”), this Agreement shall terminate. If Delek Refining notifies Delek-Big ▇▇▇▇▇, more than two months prior to the expiration of the Notice Period, of its intent to resume operations at the Refinery, then the Suspension Notice shall be deemed revoked and this Agreement shall continue in full force and effect as if such Suspension Notice had never been delivered. Subject to Section 24(a), during this Notice Period, Delek Refining shall remain liable for the Deficiency Payments and for Storage Fees. During the Notice Period, Delek-Big ▇▇▇▇▇ may terminate this Agreement upon sixty (60) days prior written notice in order to enter into an agreement to provide any third party the services provided to the Delek Refining under this Agreement.
(b) If refining operations at the Refinery are suspended for any reason (including refinery turnaround operations and other scheduled maintenance), then Delek Refining shall remain liable for Shortfall Payments under this Agreement for the duration of the suspension and for payment of the Storage Fees, unless and until this Agreement is terminated as provided above. Delek Refining shall provide at least thirty (30) days’ prior written notice of any suspension of operations at the Refinery due to a planned turnaround or scheduled maintenance, provided that Delek Refining shall not have any liability for any failure to notify, or delay in notifying, Delek-Big ▇▇▇▇▇ of any such suspension except to the extent Delek-Big ▇▇▇▇▇ has been materially damaged by such failure or delay.
| 24. | FORCE MAJEURE |
(a) Subject to Section 6(c), in the event that either Party is rendered unable, wholly or in part, by a Force Majeure event to perform its obligations under this Agreement, then upon the delivery by such Party (the “Force Majeure Party”) of written notice (a “Force Majeure Notice”) and full particulars of the Force Majeure event within a reasonable time after the occurrence of the Force Majeure event relied on, the obligations of the Parties, to the extent they are affected by the Force Majeure event, shall be suspended for the duration of any inability so caused; provided that (A) prior to the third anniversary of the Effective Date, Delek Refining shall be required to continue to make payments (i) for the Terminalling Services Fee for volumes actually throughput under this Agreement, (ii) for the Ancillary Services Fee, if any, for services performed, (iii) for the Storage Fee, and (iv) for any Shortfall Payments unless, in the case of (iii) and (iv), the Force Majeure event is an event that adversely affects Delek-Big Sandy’s ability to perform the services it is required to perform under this Agreement, in which case, as applicable, the Storage Fees shall only be paid to the extent Delek Refining utilizes Delek-Big Sandy’s storage for its Products during the applicable month and, instead of Shortfall Payments, Terminalling Service Fees shall only be paid as provided under (A)(i) above, and (B) from and after the third anniversary of the Effective Date, Delek Refining shall be required to continue to make payments (i) for the Terminalling Services Fee for volumes actually throughput under this Agreement, (ii) for the Ancillary Services Fee, if any, for services performed and (iii) for the Storage Fee to the extent Delek Refining utilizes Delek-Big Sandy’s storage for its Products during the applicable month. The Force Majeure Party shall identify in such Force Majeure Notice the approximate length of time that it believes in good faith such Force Majeure event shall continue (the “Force Majeure Period”). Delek Refining shall be required to pay any amounts accrued and due under this Agreement at the time of the Force Majeure event. The cause of the Force Majeure event shall so far as possible be remedied with all reasonable dispatch, except that no Party shall be compelled to resolve any strikes, lockouts or other industrial disputes other than as it shall determine to be in its best interests. Prior to the third anniversary of the Effective Date, any suspension of the obligations of the Parties under this Section 24(a) as a result of a Force Majeure event that adversely affects Delek-Big Sandy’s ability to perform the services it is required to perform under this Agreement shall extend the Term for the same period of time as such Force Majeure event continues (up to a maximum of one year) unless this Agreement is terminated under Section 24(b).
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(b) If the Force Majeure Party advises in any Force Majeure Notice that it reasonably believes in good faith that the Force Majeure Period shall continue for more than twelve (12) consecutive months beyond the third anniversary of the Effective Date, then at any time after the delivery of such Force Majeure Notice, either Party may deliver to the other Party a notice of termination (a “Termination Notice”), which Termination Notice shall become effective not earlier than twelve (12) months after the later to occur of (i) the delivery of the Termination Notice and (ii) the third anniversary of the Effective Date; provided, however, that such Termination Notice shall be deemed cancelled and of no effect if the Force Majeure Period ends before the Termination Notice becomes effective; provided, further, that upon the cancellation of any Termination Notice, the Parties’ respective obligations hereunder shall resume as soon as reasonably practicable thereafter, and the Term shall be extended by the same period of time as is required for the Parties to resume such obligations. After the third anniversary of the Effective Date and following delivery of a Termination Notice, Delek-Big ▇▇▇▇▇ may terminate this Agreement, to the extent affected by the Force Majeure event, upon sixty (60) days prior written notice to Delek Refining in order to enter into an agreement to provide any third party the services provided to Delek Refining under this Agreement; provided, however, that Delek-Big ▇▇▇▇▇ shall not have the right to terminate this Agreement for so long as Delek Refining continues to the make Shortfall Payments.
| 25. | CAPABILITIES OF FACILITIES |
(a) Interruptions of Service. Delek-Big ▇▇▇▇▇ shall use reasonable commercial efforts to minimize the interruption of service at the Terminal and any portion thereof and shall use its best efforts to minimize the impact of any such interruption on Delek Refining. Delek-Big ▇▇▇▇▇ shall inform Delek Refining at least 60 days in advance (or promptly, in the case of an unplanned interruption) of any anticipated partial or complete interruption of service at the Terminal, including relevant information about the nature, extent, cause and expected duration of the interruption and the actions Delek-Big ▇▇▇▇▇ is taking to resume full operations, provided that Delek-Big ▇▇▇▇▇ shall not have any liability for any failure to notify, or delay in notifying, Delek Refining of any such matters except to the extent Delek Refining has been materially damaged by such failure or delay.
(b) Maintenance and Repair Standards. Subject to Force Majeure and interruptions for routine repair and maintenance consistent with customary terminal industry standards, Delek-Big ▇▇▇▇▇ shall maintain the Terminal in a condition and with a capacity sufficient to throughput a volume of Delek Refining’s Products at least equal to the Minimum Throughput Capacity and to store a volume of Delek Refining’s Products at least equal to the Minimum Storage Capacity. Delek-Big Sandy’s obligations may be temporarily suspended during the occurrence of, and for the entire duration of, a Force Majeure or interruptions for routine repair and maintenance consistent with industry standards that prevents Delek-Big ▇▇▇▇▇ from terminalling the Minimum Throughput Capacity or storing the Minimum Storage Capacity. To the extent Delek Refining is prevented for 30 or more days in any Contract Year from terminalling volumes equal to the full Minimum Throughput Capacity or using the Minimum Storage Capacity for reasons of Force Majeure or other interruption of service affecting the facilities or assets of Delek Big-▇▇▇▇▇, then Delek Refining’s Minimum Throughput Commitment shall be proportionately reduced to the extent of the difference between the Minimum Throughput Capacity and the amount that Delek Refining can effectively throughput at the Terminal (prorated for the portion of the Contract Quarter during which the Minimum Throughput Capacity was unavailable) regardless of whether the actual throughput prior to the reduction was below the Minimum Throughput Commitment, and the Storage Fee shall be reduced by an amount of $0.57 per barrel (which amount shall be adjusted in accordance with adjustments to the Storage Fee provided for in Sections 3(e), 5 and 8(a) above, if applicable, and prorated for the portion of the applicable month during which such storage was unavailable) for each barrel less than the Minimum Storage Capacity that Delek-Big ▇▇▇▇▇ is unable to store at the Terminal, regardless of whether Delek Refining actually used such storage capacity. At such time as Delek-Big ▇▇▇▇▇ is capable of terminalling volumes equal to the Minimum Throughput Capacity or using the Minimum Storage Capacity, as applicable, Delek Refining’s obligation to throughput the full Minimum Throughput Commitment and to pay the full Storage Fee shall be restored. If for any reason, including, without limitation, a Force Majeure event, the throughput or storage capacity of the Terminal should fall below the Minimum Throughput Capacity or the Minimum Storage Capacity, respectively, then with due diligence and dispatch, Delek-Big ▇▇▇▇▇ shall make repairs to the Terminal to restore the capacity of the Terminal to that required for throughput of the Minimum Throughput Capacity or using the Minimum Storage Capacity (“Restoration”). Except as provided below in Section 25(c), all of such Restoration shall be at Delek-Big Sandy’s cost and expense, unless the damage creating the need for such repairs was caused by the negligence or willful misconduct of Delek Refining, its employees, agents or customers.
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(c) Capacity Resolution. In the event of the failure of Delek-Big ▇▇▇▇▇ to maintain the Terminal in a condition and with a capacity sufficient (i) to throughput a volume of Delek Refining’s Products equal to the Minimum Throughput Capacity or (ii) to store a volume of Delek Refining’s Products at least equal to the Minimum Storage Capacity, then either Party shall have the right to call a meeting between executives of both Parties by providing at least two (2) Business Days’ advance written notice. Any such meeting shall be held at a mutually agreeable location and will be attended by executives of both Parties each having sufficient authority to commit his or her respective Party to a Capacity Resolution (hereinafter defined). At the meeting, the Parties will negotiate in good faith with the objective of reaching a joint resolution for the Restoration of capacity on the Terminal which will, among other things, specify steps to be taken by Delek-Big ▇▇▇▇▇ to fully accomplish Restoration and the deadlines by which the Restoration must be completed (the “Capacity Resolution”). Without limiting the generality of the foregoing, the Capacity Resolution shall set forth an agreed upon time schedule for the Restoration activities. Such time schedule shall be reasonable under the circumstances, consistent with customary terminal industry standards and shall take into consideration Delek-Big Sandy’s economic considerations relating to costs of the repairs and Delek Refining’s requirements concerning its refining and marketing operations. Delek-Big ▇▇▇▇▇ shall use commercially reasonable efforts to continue to provide storage and throughput of Delek Refining’s Products at the Terminal, to the extent the Terminal has capability of doing so, during the period before Restoration is completed. In the event that Delek Refining’s economic considerations justify incurring additional costs to complete the Restoration in a more expedited manner than the time schedule determined in accordance with the preceding sentence, Delek Refining may require Delek-Big ▇▇▇▇▇ to expedite the Restoration to the extent reasonably possible, subject to Delek Refining’s payment, in advance, of the estimated incremental costs to be incurred as a result of the expedited time schedule. In the event the Parties agree to an expedited Restoration plan wherein Delek Refining agrees to fund a portion of the Restoration cost, then neither Party shall have the right to terminate this Agreement pursuant to Section 24 above, so long as such Restoration is completed with due diligence and dispatch, and Delek Refining shall pay its portion of the Restoration costs to Delek-Big ▇▇▇▇▇ in advance based on a good faith estimate based on reasonable engineering standards. Upon completion, Delek Refining shall pay the difference between the actual portion of Restoration costs to be paid by Delek Refining pursuant to this Section 25(c) and the estimated amount paid under the preceding sentence within thirty (30) days after receipt of Delek-Big Sandy’s invoice therefor, or, if appropriate, Delek-Big ▇▇▇▇▇ shall pay Delek Refining the excess of the estimate paid by Delek Refining over Delek-Big Sandy’s actual costs as previously described within thirty (30) days after completion of the Restoration.
(d) Dedicated Storage. The storage tanks at the Terminal shall be dedicated and used exclusively for the storage and throughput of Delek Refining’s Product. Delek Refining shall be responsible for providing all tank heels required for operation of such tanks.
| 26. | TERMINATION |
(a) A Party shall be in default under this Agreement if:
(i) the Party materially breaches any provision of this Agreement and such breach is not cured within fifteen (15) calendar days after notice thereof (which notice shall describe such breach in reasonable detail) is received by such Party; or
(ii) the Party (1) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Applicable Law, or has any such petition filed or commenced against it, (2) makes an assignment or any general arrangement for the benefit of creditors, (3) otherwise becomes bankrupt or insolvent (however evidenced) or (4) as a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets;
(b) If any of the Parties is in default as described above, then (i) if Delek Refining is in default, Delek-Big ▇▇▇▇▇ may or (ii) if Delek-Big ▇▇▇▇▇ is in default, Delek Refining may: (1) terminate this Agreement upon notice to the defaulting Party; (2) withhold any payments due to the defaulting Party under this Agreement; and/or (3) pursue any other remedy at law or in equity.
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(c) Upon expiration or termination of this Agreement, Delek-Big ▇▇▇▇▇ shall be responsible for removing any remaining Products of Delek Refining from the Terminal. Delek-Big ▇▇▇▇▇ shall have the right to sell such Products at market rates and return any proceeds to Delek Refining, less delivery costs in effect at the time of such sale.
(d) Delek Refining shall, upon expiration or termination of this Agreement, promptly remove any and all of its owned equipment, if any, and restore the Terminal to its condition prior to the installation of such equipment.
| 27. | ASSIGNMENT; PARTNERSHIP CHANGE OF CONTROL |
(a) Delek Refining shall not assign its obligations hereunder without Delek-Big Sandy’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however that (i) Delek Refining may assign this Agreement without Delek-Big Sandy’s consent in connection with a sale by Delek Refining of all or substantially all of the Refinery, including by merger, equity sale, asset sale or otherwise, so long as the transferee: (1) agrees to assume all of Delek Refining’s obligations under this Agreement and (2) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by Delek Refining in its reasonable judgment; and (ii) Delek Refining shall be permitted to make a collateral assignment of this Agreement solely to secure financing for Delek US and its Affiliates.
(b) Delek-Big ▇▇▇▇▇ shall not assign its rights or obligations under this Agreement without prior written consent from Delek Refining, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that (i) Delek-Big ▇▇▇▇▇ may assign this Agreement without Delek Refining’s consent in connection with a sale by Delek-Big ▇▇▇▇▇ of the Terminal, including by merger, equity sale, asset sale or otherwise so long as the transferee: (1) agrees to assume all of Delek-Big Sandy’s obligations under this Agreement; (2) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by Delek-Big ▇▇▇▇▇ in its reasonable judgment; and (3) is not a competitor of Delek Refining, as determined by Delek Refining in good faith; and (ii) Delek-Big ▇▇▇▇▇ shall be permitted to make a collateral assignment of this Agreement solely to secure financing for Delek-Big ▇▇▇▇▇ and its Affiliates.
(c) Any assignment that is not undertaken in accordance with the provisions set forth above shall be null and void ab initio. A Party making any assignment shall promptly notify the other Party of such assignment, regardless of whether consent is required.
(d) This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.
(e) Delek Refining’s obligations hereunder shall not terminate in connection with a Partnership Change of Control, provided however, that in the case of a Partnership Change of Control, Delek Refining shall have the option to extend the Term of this Agreement as provided in Section 2 without regard to the notice periods provided in the fourth sentence of Section 2(a). Delek-Big ▇▇▇▇▇ shall provide Delek Refining with notice of any Partnership Change of Control at least sixty (60) days prior to the effective date thereof.
| 28. | NOTICE |
All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (i) if by transmission by facsimile or hand delivery, when delivered; (ii) if mailed via the official governmental mail system, five (5) Business Days after mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (iii) if mailed by an internationally recognized overnight express mail service such as Federal Express, UPS, or DHL Worldwide, one (1) Business Day after deposit therewith prepaid; or (iv) if by e-mail, one Business Day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows:
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If to Delek Refining, to:
Delek Refining, Ltd.
c/o Delek US Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Email:
with a copy, which shall not constitute notice, to:
Delek Refining, Ltd.
c/o Delek US Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Email:
If to Delek-Big ▇▇▇▇▇, to:
Delek Marketing—Big ▇▇▇▇▇, LLC
c/o Delek Logistics Partners, LP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email:
with a copy, which shall not constitute notice, to:
Delek Marketing—Big ▇▇▇▇▇, LLC
c/o Delek Logistics Partners, LP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email:
or to such other address or to such other person as either Party will have last designated by notice to the other Party.
| 29. | MISCELLANEOUS |
(a) Modification; Waiver. This Agreement may be terminated, amended or modified only by a written instrument executed by the Parties. Any of the terms and conditions of this Agreement may be waived in writing at any time by the Party entitled to the benefits thereof. No waiver of any of the terms and conditions of this Agreement, or any breach thereof, will be effective unless in writing signed by a duly authorized individual on behalf of the Party against which the waiver is sought to be enforced. No waiver of any term or condition or of any breach of this Agreement will be deemed or will constitute a waiver of any other term or condition or of any later breach (whether or not similar), nor will such waiver constitute a continuing waiver unless otherwise expressly provided.
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(b) Entire Agreement. This Agreement constitutes the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings of the Parties in connection therewith.
(c) Choice of Law. This Agreement shall be subject to and governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.
(d) Arbitration Provision. Any and all Arbitrable Disputes shall be resolved through the use of binding arbitration using three arbitrators, in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Section 29(d) and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Section 29(d) will control the rights and obligations of the Parties. Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or the time period allowed by the applicable statute of limitations. Arbitration may be initiated by a Party (“Claimant”) serving written notice on the other Party (“Respondent”) that the Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. The Respondent shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If the Respondent fails for any reason to name an arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed. The Claimant will pay the compensation and expenses of the arbitrator named by or for it, and the Respondent will pay the compensation and expenses of the arbitrator named by or for it. The costs of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. The Claimant and Respondent will each pay one-half of the compensation and expenses of the third arbitrator. All arbitrators must (i) be neutral parties who have never been officers, directors or employees of Delek Refining, Delek-Big ▇▇▇▇▇ or any of their Affiliates and (ii) have not less than seven (7) years experience in the energy industry. The hearing will be conducted in Houston, Texas and commence within thirty (30) days after the selection of the third arbitrator. Delek Refining, Delek-Big ▇▇▇▇▇ and the arbitrators shall proceed diligently and in good faith in order that the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators will be binding on and non-appealable by the Parties hereto. The arbitrators shall have no right to grant or award Special Damages.
(e) Confidentiality.
(i) Obligations. Each Party shall use commercially reasonable efforts to retain the other Party’s Confidential Information in confidence and not disclose the same to any third party nor use the same, except as authorized by the disclosing Party in writing or as expressly permitted in this Section 29(e)(i). Each Party further agrees to take the same care with the other Party’s Confidential Information as it does with its own, but in no event less than a reasonable degree of care.
(ii) Required Disclosure. Notwithstanding Section 29(e)(i) above, if the receiving Party becomes legally compelled to disclose the Confidential Information by a court, Governmental Authority or Applicable Law, including the rules and regulations of the Securities and Exchange Commission, or is required to disclose pursuant to the rules and regulations of any national securities exchange upon which the receiving Party or its parent entity is listed, any of the disclosing Party’s Confidential Information, the receiving Party shall promptly advise the disclosing Party of such requirement to disclose Confidential Information as soon as the receiving Party becomes aware that such a requirement to disclose might become effective, in order that, where possible, the disclosing Party may seek a protective order or such other remedy as the disclosing Party may consider appropriate in the circumstances. The receiving Party shall disclose only that portion of the disclosing Party’s Confidential Information that it is required to disclose and shall cooperate with the disclosing Party in allowing the disclosing Party to obtain such protective order or other relief.
(iii) Return of Information. Upon written request by the disclosing Party, all of the disclosing Party’s Confidential Information in whatever form shall be returned to the disclosing Party upon termination of this Agreement or destroyed with destruction certified by the receiving Party, without the receiving Party retaining
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copies thereof except that one copy of all such Confidential Information may be retained by a Party’s legal department solely to the extent that such Party is required to keep a copy of such Confidential Information pursuant to Applicable Law, and the receiving Party shall be entitled to retain any Confidential Information in the electronic form or stored on automatic computer back-up archiving systems during the period such backup or archived materials are retained under such Party’s customary procedures and policies; provided, however, that any Confidential Information retained by the receiving Party shall be maintained subject to confidentiality pursuant to the terms of this Section 29(e), and such archived or back-up Confidential Information shall not be accessed except as required by Applicable Law.
(iv) Receiving Party Personnel. The receiving Party will limit access to the Confidential Information of the disclosing Party to those of its employees, attorneys and contractors that have a need to know such information in order for the receiving Party to exercise or perform its rights and obligations under this Agreement (the “Receiving Party Personnel”). The Receiving Party Personnel who have access to any Confidential Information of the disclosing Party will be made aware of the confidentiality provision of this Agreement, and will be required to abide by the terms thereof. Any third party contractors that are given access to Confidential Information of a disclosing Party pursuant to the terms hereof shall be required to sign a written agreement pursuant to which such Receiving Party Personnel agree to be bound by the provisions of this Agreement, which written agreement will expressly state that it is enforceable against such Receiving Party Personnel by the disclosing Party.
(v) Survival. The obligation of confidentiality under this Section 29(e) shall survive the termination of this Agreement for a period of two (2) years.
(f) Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or portable document format (pdf)) for the convenience of the Parties hereto, each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement.
(g) Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be valid and effective under Applicable Law, but if any provision of this Agreement or the application of any such provision to any person or circumstance will be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith with a view to substitute for such provision a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
(h) No Third Party Beneficiaries. It is expressly understood that the provisions of this Agreement do not impart enforceable rights in anyone who is not a Party or successor or permitted assignee of a Party.
(i) Schedules. The schedules attached hereto and referred to herein is hereby incorporated in and made a part of this Agreement as if set forth in full herein.
(j) Further Assurances. In connection with this Agreement and all transactions contemplated by this Agreement, each signatory Party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the date first written above.
| DELEK REFINING LTD. | ||
| By: | DELEK U.S. REFINING GP, LLC its General Partner | |
| By: | ||
| Name: | ||
| Title: | ||
| By: | ||
| Name: | ||
| Title: | ||
| DELEK MARKETING-BIG ▇▇▇▇▇, LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
| By: | ||
| Name: | ||
| Title: |