Uneconomic Operations Sample Clauses
The Uneconomic Operations clause allows a party to suspend or terminate its obligations under a contract if continuing performance becomes financially unviable. Typically, this clause applies in situations where market conditions, regulatory changes, or operational costs make it unprofitable to proceed with the agreed activities, such as supplying goods or services. Its core function is to protect parties from being forced to operate at a loss, thereby allocating risk and providing a clear exit mechanism when economic circumstances change significantly.
Uneconomic Operations. Subject to any Force Majeure event affecting Producer's obligations to deliver Crude hereunder, in addition to all other rights of Transporter under this Agreement, in the event the sum of actual direct costs (for the avoidance of doubt, excluding overhead, depreciation, amortization and capital expenditures) incurred by Transporter to operate any portion of Transporter's Crude System (the "Uneconomic Segment")during any ninety (90) day period are in excess of the total net revenue attributable to the Uneconomic Segment (including all Crude Transportation Fees paid by Producer or any third party attributable to the Uneconomic Segment) during such ninety (90) day period, Transporter shall have the right to send written notice (an "Uneconomic Notice ") to Producer of its intent to terminate receipts of Crude into the Uneconomic Segment unless the Crude Transportation Fees owed by Producer for Producer's Crude delivered to the Uneconomic Segment are increased such that Transporter's total anticipated net revenue attributable to the Uneconomic Segment is projected to equal one hundred ten percent (110%) of Transporter's actual direct costs (for the avoidance of doubt, excluding overhead, depreciation, amortization and capital expenditures) incurred by Transporter to operate the Uneconomic Segment. Any increased Crude Transportation Fee shall be borne pro-rata by Producer and any third party shipper on the Uneconomic Segment according to the anticipated Barrels of Producer's Crude and Third Party Barrels to be delivered to or flowed through the Uneconomic Segment. Within ten (10) days of Producer's receipt of notice from Transporter, Producer shall elect by written notice sent to Transporter either to:
1. Accept the increased Crude Transportation Fees, or portion thereof, effective as of the beginning of the next Accounting Period, owed by Producer for Producer's Crude delivered to the Uneconomic Segment, whereupon Transporter shall not send another Uneconomic Notice pursuant to this Section 7.3 for at least ninety (90) days; or
Uneconomic Operations. Any Notice by Tenant terminating this Lease because operation of the Premises, the Shoreside Complex or any Riverboat Casino operated by Tenant has become Uneconomic shall include a reasonably detailed explanation of Tenant’s determination that such operation has become Uneconomic.