SECOND AMENDED AND RESTATED SERVICES AGREEMENT (Big Sandy Terminal and Pipeline)
Exhibit 10.6
SECOND AMENDED AND RESTATED SERVICES AGREEMENT
(Big Xxxxx Terminal and Pipeline)
This Second Amended and Restated Services Agreement (the “Agreement”) is dated as of August 5, 2024 by and between DK Trading & Supply, LLC (“DKTS”), a Delaware limited liability company, and Delek Marketing-Big Xxxxx, LLC, a Texas limited liability company (“Delek-Big Xxxxx”). Each of DKTS and Delek-Big Xxxxx are individually referred to herein as a “Party” and collectively as the “Parties.”
WHEREAS, Delek Refining Ltd., a Texas limited partnership (“Refining”) and Delek-Big Xxxxx entered into that certain Terminalling Services Agreement (Big Xxxxx Terminal) (the “Original Agreement”) dated November 7, 2012 (the “Original Effective Date”);
WHEREAS, Refining and Delek-Big Xxxxx amended and restated the Original Agreement pursuant to that certain Amended and Restated Services Agreement dated July 25, 2013 (the “A&R Agreement”);
WHEREAS, Refining and Delek-Big Xxxxx amended the A&R Agreement pursuant to that certain First Amendment to Amended and Restated Services Agreement dated December 14, 2018, by and between Refining and Delek-Big Xxxxx;
WHEREAS, Refining assigned all its right, title and interest in the A&R Agreement to DKTS pursuant to that certain Omnibus Assignment and Assumption Agreement dated September 13, 2022, by and between Refining and DKTS; and
WHEREAS, the Parties desire to amend and restate the A&R Agreement as set forth herein.
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.
“A&R Agreement” has the meaning set forth in the recitals.
“Affiliate” means, with 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 DKTS, on the one hand, and the Partnership and its subsidiaries, including Delek-Big Xxxxx, 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 Xxxxx to DKTS: 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 DKTS pursuant to Section 4 during that month for Ancillary Services provided by Delek-Big Xxxxx.
“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.
“bpd” means barrels per day.
“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.
“Call Option” has the meaning given to such term in the Omnibus Agreement.
“Capacity Resolution” has the meaning set forth in Section 25(c).
“Capital Amortization Period” has the meaning set forth in Section 8(d).
“Capital Improvement” means (i) any modification, improvement, expansion or increase in the capacity of the Terminal or the Pipeline or any portion thereof, or (ii) any connection, or new point of receipt or delivery for Products.
“Claimant” has the meaning set forth in Section 30(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 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 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 Xxxxx” has the meaning set forth in the Preamble.
“Delek-Big Xxxxx Jndemnitees” has the meaning set forth in Section 20(b).
“DKTS” has the meaning set forth in the Preamble.
“DKTS lndemnitees” has the meaning set forth in Section 20(a).
“Delek US” means Delek US Holdings, Inc., a Delaware corporation.
“Dispute” means any and all disputes, claims, controversies and other matters in question between DKTS, on the one hand, and Delek-Big Xxxxx, on the other hand, under this Agreement.
“Effective Date” means July 1, 2024.
“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, 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.
“Estimated Expansion Capital Expenditure” has the meaning set forth in Section 8(b).
“Expansion Capital Expenditure” has the meaning set forth in Section 8(c).
“Extension Period” has the meaning set forth in Section 2(a).
“Facilities” means (a) the Pipeline and (b) the Terminal.
“FERC Oil Pipeline Index” means the FERC index system set forth in 18 C.F.R. § 342.318, as such regulations may be amended from time to time.
“Force Majeure” means acts of God, strikes, lockouts or other industrial disturbances, acts of a public enemy, wars, terrorism, cyberattacks, 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, fires, leaks, releases, 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 commercially reasonable efforts such Party is unable to prevent or overcome; provided, however, that a Party’s inability to perform its economic obligations hereunder shall not constitute an event of Force Majeure.
“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 noncompliance with Environmental Law.
“Minimum Pipeline Capacity” means an aggregate amount of capacity equal to 6,000 bpd multiplied by the number of calendar days in the Contract Quarter.
“Minimum Pipeline Throughput Commitment” means an aggregate amount of Products equal to at least 5,000 bpd multiplied by the number of calendar days in the Contract Quarter.
“Minimum Storage Capacity” means aggregate storage capacity of 87,000 barrels.
“Minimum Terminalling 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 Terminalling 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.
“Minimum Throughput Capacity” means (a) the Minimum Pipeline Capacity and (b) the Minimum Terminalling Capacity.
“Minimum Throughput Commitment” means (a) the Minimum Pipeline Throughput Commitment and (b) the Minimum Terminalling Throughput Commitment.
“Monthly Expansion Capital Amount” has the meaning set forth in Section 8(d).
“Notice Period” has the meaning set forth in Section 23(a).
“Notice Period” has the meaning set forth in Section 23(a).
“Omnibus Agreement” means that certain Fourth Amended and Restated Omnibus Agreement dated as of August 5, 2024, among Delek US, on behalf of itself and the other Delek Entities (as defined therein), 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 Xxxxx, Delek Logistics Operating, LLC, and Delek Logistics GP, LLC, as the same may be amended and/or restated from time to time.
“Open Assets” has the meaning set forth in Section 29.
“OPTS” has the meaning set forth in Section 7.
“Original Agreement” has the meaning set forth in the recitals.
“Original Effective Date” has the meaning set forth in the recitals.
“Partnership” means Delek Logistics Partners, LP, a Delaware limited partnership.
“Partnership Change of Control” means Delek US ceases to Control the general partner of the Partnership.
“Party” or “Parties” has the meaning set forth in the Preamble.
“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.
“Pipeline” means an approximately 10.5-mile refined products pipeline owned by Delek-Big Xxxxx that runs between Delek-Big Sandy’s Tyler Station and its Hopewell delivery point.
“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 30(e)(iv).
“Refining” has the meaning set forth in the recitals.
“Refinery” means Refining’s crude oil refinery in Tyler, Texas.
“Renewal Term” has the meaning set forth in Section 2(a).
“Respondent” has the meaning set forth in Section 30(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” has the meaning set forth in Section 3(a)(ii).
“Throughput Fees” has the meaning set forth in Section 3(b)(ii).
“Terminal” means Delek-Big Sandy’s light product distribution terminal located in Big Xxxxx, Texas.
“Termination Notice” has the meaning set forth in Section 24(b).
“Transmix” has the meaning set forth in Section 13.
“Transportation Fee” has the meaning set forth in Section 3(b)(ii).
2. TERM; RIGHT TO ENTER INTO A NEW AGREEMENT
(a) This Agreement shall have an initial term commencing on the Effective Date and extending through and including June 30, 2031 (the “Initial Term”). Thereafter, DKTS shall have a unilateral option to extend this Agreement for an additional period, extending through and including June 30, 2036, 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, DKTS shall notify Delek-Big Xxxxx 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) In the event that DKTS fails to exercise its option to extend this Agreement for any Renewal Term, Delek-Big Xxxxx shall have the right to negotiate to enter into one or more services agreements with respect to the Terminal and/or the Pipeline with one or more third parties to begin after the date of termination, provided that during the period from the date of DKTS’ failure to provide written notice pursuant to Section 2(a) to the date of termination of this Agreement, DKTS will have the right to enter into a new services agreement with Delek-Big Xxxxx on commercial terms that substantially match the terms upon which Delek-Big Xxxxx proposes to enter into an agreement with a third party for similar services with respect to all or a material portion of the capacity of the Terminal and the Pipeline. In such circumstances, Delek-Big Xxxxx shall give DKTS forty-five (45) days prior written notice of any proposed new services agreement with a third party, and such notice shall inform DKTS of the fee schedules, tariffs, duration and any other terms of the proposed third party agreement and DKTS shall have forty-five (45) days following receipt of such notice to agree to the terms specified in the notice or DKTS shall lose the rights specified by this Section 2(b) with respect to the assets that are the subject of such notice.
3. MINIMUM THROUGHPUT COMMITMENT; STORAGE FEES
(a) Minimum Terminalling Throughput Commitment.
(i) During each Contract Quarter during the Term and subject to the terms and conditions of this Agreement, DKTS shall throughput at least the Minimum Terminalling Throughput Commitment at the Terminal, and Delek-Big Xxxxx shall make available to DKTS dedicated storage and throughput capacity at the Terminal, at all times sufficient to allow DKTS to throughput the Minimum Terminalling 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.
(ii) Subject to Section 6, DKTS shall pay Delek-Big Xxxxx a terminalling services fee (the “Terminalling Service Fee”) for the volumes it throughputs at the Terminal of $0.775 per barrel.
(iii) DKTS may throughput volumes in excess of its Minimum Terminalling Throughput Commitment, up to the then-available capacity of the Terminal.
(b) Minimum Pipeline Throughput Commitment.
(i) During each Contract Quarter during the Term and subject to the terms and conditions of this Agreement, DKTS shall ship at least the Minimum Pipeline Throughput Commitment on the Pipeline, and Delek-Big Xxxxx shall make available to DKTS capacity on the Pipeline, at all times sufficient to allow DKTS to ship the Minimum Pipeline Capacity on the Pipeline.
(ii) Subject to Section 6, DKTS shall pay Delek-Big Xxxxx a transportation fee (the “Transportation Fee” and together with the Terminalling Service Fee, the “Throughput Fees”) for the volumes of Product it ships on the Pipeline of $0.775 per barrel.
(iii) DKTS may throughput volumes in excess of its Minimum Pipeline Throughput Commitment, up to the then-available capacity of the Pipeline.
(c) Storage Services.
(i) DKTS shall pay Delek-Big Xxxxx a fee of $77,633.92 per month (the “Storage Fee”) for dedicated storage capacity at the Terminal. The storage capacity provided to DKTS may be temporarily reduced by Delek-Big Xxxxx 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 Xxxxx to provide the Minimum Storage Capacity.
(ii) The Parties agree that if they mutually determine to remove a tank at the Terminal from service or if a tank at the Terminal is removed from service for inspection in compliance with API Standard 653 for Aboveground Storage Tanks, then Delek-Big Xxxxx will not be required to utilize, operate or maintain such tank or provide the services required under this Agreement with respect to such tank; provided, however, that any such removal will not reduce the Storage Fees except to the extent that Logistics is unable to provide to DKTS the Minimum Storage Capacity.
(d) Fee Adjustment. All fees set forth in this Agreement, including the Throughput Fees and the Storage Fee, shall be adjusted on July 1 of each year of the Term, commencing on July 1, 2025, 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 Xxxxx and DKTS are unable to agree, a new index will be determined by arbitration in accordance with Section 30(d).
4. ANCILLARY SERVICES
Delek-Big Xxxxx shall provide Ancillary Services to DKTS at the Terminal. DKTS shall pay the per-barrel Ancillary Services Fees listed on Exhibit A for such services. If any additional ancillary services are requested by DKTS 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 DKTS at no cost to Delek-Big Xxxxx.
5. FEE INCREASE
If, during the Term, new laws or regulations are enacted that require Delek-Big Xxxxx to make substantial and unanticipated capital expenditures (other than maintenance capital expenditures) with respect to the Facilities, Delek-Big Xxxxx may increase the Throughput Fees or the Storage Fee, as applicable, to cover the cost of complying with these laws or regulations. Delek-Big Xxxxx and DKTS 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 Throughput Fees or the Storage Fee. If Delek-Big Xxxxx and DKTS are unable to agree, the amount of such fee increases will be determined by arbitration in accordance with Section 30(d).
6. PAYMENT; SHORTFALL PAYMENTS
(a) Delek-Big Xxxxx shall invoice DKTS monthly (or, in the case of any Shortfall Payments, quarterly). DKTS will make payments to Delek-Big Xxxxx 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 Xxxxx 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, Contract Quarter) during which the invoiced services were performed. Any past due payments owed by DKTS to Delek-Big Xxxxx 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 Throughput 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 Xxxxx. 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, DKTS throughputs aggregate volumes less than the Minimum Terminalling Throughput Commitment for such Contract Quarter, then DKTS shall pay Delek-Big Xxxxx an amount (a “Terminalling Shortfall Payment”) equal to the difference between (i) the Minimum Terminalling Throughput Commitment multiplied by the Terminalling Service Fee and (ii) the aggregate Terminalling Service Fees for such Contract Quarter payable under Section 3(a)(ii). The Parties acknowledge and agree that there shall be no carry-over of deficiency volumes with respect to the Minimum Terminalling Throughput Commitment and the payment by DKTS of the Terminalling Shortfall Payment shall relieve DKTS of any obligation to meet such Minimum Terminalling 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 Terminalling Throughput Commitment to any subsequent Contract Quarter.
(c) If, for any Contract Quarter, DKTS ships aggregate volumes less than the Minimum Pipeline Throughput Commitment for such Contract Quarter, then DKTS shall pay Delek-Big Xxxxx an amount (a “Pipeline Shortfall Payment,” and together with any Terminalling Shortfall Payments, a “Shortfall Payment”) equal to the difference between (i) the Minimum Pipeline Throughput Commitment multiplied by the Transportation Fee and (ii) the aggregate Transportation Fees for such Contract Quarter payable under Section 3(bXii). The Parties acknowledge and agree that there shall be no carry-over of deficiency volumes with respect to the Minimum Pipeline Throughput Commitment and the payment by DKTS of the Pipeline Shortfall Payment shall relieve DKTS of any obligation to meet such Minimum Pipeline 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 Pipeline Throughput Commitment to any subsequent Contract Quarter.
7. VOLUME LOSSES
Delek-Big Xxxxx shall use commercially reasonable efforts to minimize volume losses of Product at the Facilities. Title to the Products tendered by or on behalf of DKTS for terminalling, transportation or storage hereunder will remain with DKTS at all times. DKTS shall, during each month, (a) be entitled to all volumetric gains in the Facilities and (b) be responsible for all volumetric losses in the Facilities up to a maximum of 0.25%. If volume losses of any Product exceed 0.25% during any particular month, Delek-Big Xxxxx shall pay DKTS 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. CAPITAL IMPROVEMENTS
During the term of this Agreement, DKTS shall be entitled to designate Capital Improvements to be made to the Terminal and the Pipeline. The following provisions shall set forth the procedures pursuant to which Capital Improvements designated by DKTS may be constructed:
(a) For any Capital Improvement designated by DKTS, DKTS shall submit a written proposal, including all specifications then available to it, for the proposed Capital Improvement to the Terminal and/or the Pipeline, as the case may be.
(b) Delek-Big Xxxxx will review such proposal to determine, in its sole discretion, whether it will consent to proceed with the proposed Capital Improvement.
(c) Should Delek-Big Xxxxx determine to proceed and construct or cause to be constructed the approved Capital Improvement, Delek-Big Xxxxx will obtain bids from two or more general contractors reasonably acceptable to DKTS for the construction of the Capital Improvement. Based upon the bids, Delek-Big Xxxxx will notify DKTS of Delek-Big Sandy’s estimate of the total cost necessary to construct such Capital Improvement (which amount shall include the costs of capital and any other costs necessary to place such Capital Improvement in service) (“Estimated Expansion Capital Expenditure”). Within 30 days of such notice, DKTS will notify Delek-Big Xxxxx whether or not DKTS agrees to such Estimated Expansion Capital Expenditure. In the event DKTS does not agree with such Estimated Expansion Capital Expenditure, the Parties shall work together in good faith to reach agreement on the Estimated Expansion Capital Expenditure (the agreed amount is referred to as the “Expansion Capital Expenditure”); provided that, in the event the Parties do not reach such agreement within 60 days of the notice provided under the second sentence of this Section 8(c), DKTS shall be entitled to proceed with the construction of the Capital Improvement in accordance with Section 8(e) below.
(d) Prior to beginning any construction on the Capital Improvement, (I) Delek-Big Xxxxx shall have received all necessary regulatory approvals, (2) Delek-Big Xxxxx and DKTS shall have agreed on (A) an additional monthly payment amount to be paid by DKTS to Delek-Big Xxxxx (the “Monthly Expansion Capital Amount”) which amount (x) shall be payable over a mutually agreed to term not to exceed the then remaining balance of the Initial Term (or the then current Renewal Term) plus any Renewal Term to which DKTS is then committed or shall then commit (the “Capital Amortization Period”), and (y) shall be sufficient to provide Delek-Big Xxxxx the equivalent of a rate of return equal to the Prime Rate plus an additional rate of return to be agreed to by the Parties over the Capital Amortization Period on the Expansion Capital Expenditure after taking into account the increased cash flows to Delek-Big Xxxxx reasonably anticipated to be received by Delek-Big Xxxxx from Refining (or from a third party pursuant to a direct contractual commitment to Delek-Big Xxxxx) in connection with such Capital Improvement, or (B) another adjustment to the Throughput Fees or the Storage Fees, as applicable, as the Parties may agree and (3) the Parties shall have agreed on any adjustment to the Minimum Pipeline Throughput Commitment, the Minimum Terminalling Throughput Capacity, the Minimum Pipeline Capacity, the Minimum Terminalling Capacity or the Minimum Storage Capacity, as the case may be. The Monthly Expansion Capital Amount, if applicable, shall be billed and paid monthly following the commencement of operations of the Capital Improvement and DKTS’ obligation to pay the Monthly Expansion Capital Amount shall survive the termination of this Agreement (other than a termination in connection with a breach of this Agreement by Delek-Big Xxxxx or a Force Majeure event affecting the ability of Delek-Big Xxxxx to provide services under this Agreement). In connection with the construction of any
Capital Improvement pursuant to this Section 8(d), DKTS shall be entitled to participate in all stages of planning, scheduling, implementing, and oversight of the construction. DKTS shall also be entitled to audit all expenditures incurred in connection with the Capital Improvement and Delek-Big Xxxxx shall provide all invoices and other documentation reasonably requested by DKTS for this purpose.
(e) If for any reason the Capital Improvement shall not be constructed pursuant to Section 8(d) above, and such Capital Improvement is in accordance with applicable required engineering and regulatory standards, and could not reasonably be expected to have a material adverse impact on the operations or efficiency of the Terminal or the Pipeline or result in any material additional unreimbursed costs to Delek-Big Xxxxx, then DKTS may proceed with the construction and financing of the Capital Improvement and, upon completion of construction, DKTS shall be the owner and operator of such Capital Improvement. The Parties agree that any Capital Improvement constructed by DKTS pursuant to this Section 8(e) shall be treated as the separate property of DKTS. Delek-Big Xxxxx shall cooperate with DKTS in ensuring that the Capital improvement shall operate as intended, including by operating and maintaining all necessary connections to the Terminal and the Pipeline, subject to DKTS’s reimbursing Delek-Big Xxxxx on a monthly basis for any incremental expenses arising from operating or maintaining such connections. DKTS shall indemnify Delek-Big Xxxxx for any Liabilities resulting from the construction, ownership and operation by DKTS of any Capital Improvement constructed by DKTS pursuant to this Section 8(e).
(f) Upon completion of the construction of such Capital Improvement, Delek-Big Xxxxx or DKTS, as applicable, will own such Capital Improvement, and will operate and maintain such Capital Improvement in accordance with Applicable Law and recognized industry standards.
9. DEFICIENCY PAYMENTS
(a) As soon as practicable following the end of each calendar month under this Agreement, Delek Big Xxxxx shall deliver to DKTS a written notice (the “Deficiency Notice”) detailing any failure of the Company to meet its obligations under Section 3(a)(i), Section 3(aXii), Section 3(b)(i), Section 3(b)(ii), Section 3(c)(i), 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 Xxxxx believes would have been paid by DKTS to Delek Big-Xxxxx if DKTS had complied with its obligations under Section 3(a)(i), Section 3(a)(ii), Section 3(bXi), Section 3(b)(ii), Section 3(cXi), Section 4, Section 5, Section 6, Section 8 and Section 25 (c) of this Agreement (the “Deficiency Payment”). DKTS shall pay the Deficiency Payment to Delek-Big Xxxxx 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 DKTS disagrees with the Deficiency Notice, then, following the payment of the undisputed portion of the Deficiency Payment to Delek-Big Xxxxx, a senior officer of DKTS and Delek-Big Xxxxx 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, DKTS and Delek-Big Xxxxx 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 30(d). During the 60-day period following the receipt of any Deficiency Notice, DKTS shall have the right to inspect and audit the working papers of Delek-Big Xxxxx relating to such Deficiency Payment.
(c) If it is determined by arbitration in accordance with Section 30(d) that DKTS was required to make any or all of the disputed portion of the Deficiency Payment, DKTS shall promptly pay to Delek-Big Xxxxx 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 Facilities by pipeline, custody of the Product shall pass to Delek-Big Xxxxx at the flange where it enters the Pipeline.
(ii) Deliveries. For Product delivered by the Terminal into pipeline, custody of the Product shall pass to DKTS 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 Xxxxx when the locomotive used to transfer DKTS’ 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.
(d) General. Upon re-delivery of any Product to DKTS’ account, DKTS 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 DKTS’ Product received in the Terminal shall remain with DKTS at all times. Both Parties acknowledge that this Agreement represents a bailment of Products by DKTS to Delek-Big Xxxxx and not a consignment of Products, it being understood that Delek-Big Xxxxx has no authority hereunder to sell or seek purchasers for the Products of DKTS, except as provided in Section 13 below. DKTS 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; CONTAMINATION
(a) DKTS shall not deliver to the Facilities any Products which: (a) would in any way be injurious to the Facilities; 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.
(b) Delek-Big Xxxxx shall use commercially reasonable efforts to avoid contamination of DKTS’ Products with any dissimilar Products and shall be liable to DKTS for any change in the quality of the Products throughput or stored at the Facilities, in each case caused by Delek-Big Xxxxx or its Affiliates or any third-party use of the Terminal or the Pipeline, as applicable. If Delek-Big Xxxxx determines in good faith that DKTS has delivered to the Facilities Products that have been contaminated by the existence of and/or excess amounts of substances foreign to Products which could cause harm to users of the contaminated Products, the Facilities or Delek-Big Xxxxx, DKTS shall be responsible for removing DKTS’ contaminated Products from the Facilities. Any liability or expense associated with the contamination of DKTS’ Products caused by DKTS or its Affiliates shall be borne by DKTS, including any regulatory or judicial proceeding arising out of or relating to such contamination.
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 Xxxxx. 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. DKTS 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 xxxxxx. DKTS 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 DKTS should request an independent xxxxxx, such xxxxxx must be acceptable to Delek-Big Xxxxx, and such gauging shall be at DKTS’ 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 Xxxxx is liable to DKTS. Delek-Big Xxxxx shall account for the volume of Product downgraded, and DKTS’ inventory of Products and/or interface volumes (“Transmix”) shall be adjusted. If (i) Delek-Big Xxxxx does not have sufficient capacity at the Terminal for the Transmix and (ii) DKTS fails to remove its Transmix upon notice from Delek-Big Xxxxx, then fifteen (15) days after DKTS’ receipt of such notification, Delek-Big Xxxxx shall have the right to sell such Transmix at market rates and return any proceeds to DKTS, 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. DKTS warrants that it shall only send to the Facilities those employees, agents and other representatives acting on behalf of and at DKTS’ direction who have been properly instructed as to the characteristics and safe hauling methods associated with the Products to be loaded and hauled. DKTS agrees to be responsible to Delek-Big Xxxxx for the performance under this Agreement by its agents and/or representatives receiving Products at the Facilities.
(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 Xxxxx and furnished to DKTS or posted at the Facilities, with respect to the use of the Facilities as herein provided. It is understood and agreed by DKTS that these rules and regulations may be changed, amended or modified by Delek-Big Xxxxx at any time. All changes, amendments and modifications shall become binding upon DKTS ten (10) days following receipt by DKTS of a copy thereof.
(c) For all purposes hereunder, DKTS’ jobbers, distributors, carriers, haulers and other customers designated in writing or otherwise by DKTS to have loading privileges under this Agreement or having possession of any loading device furnished to DKTS pursuant to this Agreement, together with their respective officers, servants and employees, shall, when they access the Facilities, be deemed to be representatives of DKTS and any such person shall enter into an appropriate access agreement with Delek Big-Xxxxx with respect to such access.
15. ACCOUNTING PROVISIONS AND DOCUMENTATION
Delek-Big Xxxxx shall furnish DKTS with the following reports covering services hereunder involving DKTS’ Products:
(a) Within ten (10) Business Days following the end of the month, a statement showing, by Product: (i) DKTS’ monthly aggregate deliveries into the Facilities; (ii) DKTS’ monthly receipts from the Terminal; (iii) calculation of all DKTS’ monthly Terminalling Service Fees; (iv) DKTS’ opening inventory for the preceding month; (v) appropriate monthly adjustments (as applicable in accordance with Section 7); and (vi) DKTS’ closing inventory for the preceding month.
(b) A copy of any meter calibration report, to be available for inspection upon reasonable request by DKTS at the Facilities following any calibration.
(c) Upon delivery from the Terminal, a bill of lading to the carrier for each truck or rail delivery. As reasonably requested by DKTS, bill of lading information shall be provided to DKTS’ accounting group. Upon each truck delivery from the Terminal, bill of lading information shall be sent electronically through a mutually agreeable system.
(d) Transfer documents for each in-tank transfer.
(e) Delek-Big Xxxxx shall be required to maintain the capabilities to support truck load authorization technologies at the Terminal. However, costs incurred by Delek-Big Xxxxx for replacement of loading systems or software or other upgrades made at the request of DKTS shall be recoverable from DKTS 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 DKTS’ request, Delek-Big Xxxxx and DKTS shall mutually agree on a fee for such replacement or upgrade.
16. AUDIT AND CLAIMS PERIOD
During the Term, DKTS 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 Xxxxx, 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 two (2) 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 Xxxxx 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.
17. LIENS
To secure any fees due and DKTS’ performance of its obligations under this Agreement, DKTS hereby grants to Delek-Big Xxxxx an irrevocable lien and security interest in and on all of its Products in the care and custody of Delek-Big Xxxxx and further grants Delek-Big Xxxxx a limited power-of-attorney to dispose of such Products at fair market value to the extent of any and all amounts owed by DKTS to Delek-Big Xxxxx hereunder, after providing DKTS with reasonable advance notice of any such sale. At Delek-Big Sandy’s request, DKTS shall sign a UCC-1 financing statement acknowledging Delek-Big Sandy’s security interest in DKTS’ Product in the Terminal.
18. TAXES
DKTS 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 the Facilities) imposed by any federal, state or local government that Delek-Big Xxxxx incurs on DKTS’ behalf for the services provided by Delek-Big Xxxxx under this Agreement. If Delek-Big Xxxxx is required to pay any of the foregoing, the Parties shall cooperate with respect to any filings or contests with respect thereto and DKTS shall promptly reimburse Delek-Big Xxxxx 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; provided further that to the extent a Party hereunder receives insurance proceeds with respect to Special Damages that would be waived under this Section 19, such Party shall be liable for such Special Damages up to the amount of such insurance proceeds (net of any deductible and premiums paid with respect thereto).
20. INDEMNITIES
(a) Delek-Big Xxxxx shall defend, indemnify and hold harmless DKTS, its Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “DKTS lndemnitees”) from and against any Liabilities directly or indirectly arising out of (i) any breach by Delek-Big Xxxxx of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of Delek-Big Xxxxx made herein or in connection herewith proving to be false or misleading, (ii) any failure by Delek Big-Xxxxx, 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 Xxxxx, 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 DKTS Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, Delek-Big Sandy’s liability to the DKTS Indemnitees pursuant to this Section 20(a) shall be net of any insurance proceeds actually received by the DKTS 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. DKTS agrees that it shall, and shall cause the other DKTS Indemnitees to, (a) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the DKTS lndemnitees are entitled with respect to or on account of any such damage or injury, (b) notify Delek-Big Xxxxx of all potential claims against any third Person for any such insurance proceeds, and (c) keep Delek-Big Xxxxx fully informed of the efforts of the DKTS lndemnitees in pursuing collection of such insurance proceeds.
(b) DKTS shall defend, indemnify and hold harmless Delek-Big Xxxxx, its Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “Delek-Big Xxxxx lndemnitees”) from and
against any Liabilities directly or indirectly arising out of (i) any breach by DKTS of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of DKTS made herein or in connection herewith proving to be false or misleading, (ii) any failure by DKTS, 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 DKTS, 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 Xxxxx lndemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, DKTS’ liability to the Delek- Big Xxxxx Indemnitees pursuant to this Section 20(b) shall be net of any insurance proceeds actually received by the Delek-Big Xxxxx lndemnitees 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 Xxxxx agrees that it shall, and shall cause the other Delek-Big Xxxxx Indemnitees to, (a) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Delek-Big Xxxxx Indemnitees are entitled with respect to or on account of any such damage or injury, (b) notify DKTS of all potential claims against any third Person for any such insurance proceeds, and (c) keep DKTS fully informed of the efforts of the Delek-Big Xxxxx lndemnitees 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(bXiii), GROSS NEGLIGENCE OR WILLFUL MISCONDUCT).
21. INSURANCE
(a) Business Interruption Insurance. DKTS shall maintain commercially reasonable business interruption insurance for the benefit of the Facilities for so long as Delek-Big Xxxxx 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 DKTS and Delek-Big Xxxxx as a result of the interruption.
(b) Insurance (Other than Business Interruption Insurance). During the Term of this Agreement, each of Delek-Big Xxxxx and DKTS 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 transported, throughput or stored hereunder, or any receipt, throughput, delivery, transportation, handling or storage of Products hereunder or the ownership, operation or condition of the Facilities. 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.
(c) Tariff Cooperation. If during the Term, Delek-Big Xxxxx is required, under Applicable Law, to file one or more tariffs with any Governmental Authority, in order to provide the services provided under this Agreement, DKTS hereby agrees that, if the services to be provided under such tariff or tariffs is provided in conformance with this Agreement, including but not limited to the rates provided hereunder, DKTS will not oppose, or assist any other party in opposing, the filing of such tariff or tariffs.
23. SUSPENSION OF REFINERY OPERATIONS
(a) From and after the second anniversary of the Original Effective Date, in the event that 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, DKTS may provide written notice to Delek-Big Xxxxx of DKTS’ 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 Original Effective Date) after DKTS has notified Delek-Big Xxxxx 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 DKTS notifies Delek-Big Xxxxx, more than two months prior to the expiration of the Notice Period, of Refining’s 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 23(b) and Section 24(a), during this Notice Period, DKTS shall remain liable for the Deficiency Payments and for Storage
Fees. During the Notice Period, Delek-Big Xxxxx 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 DKTS under this Agreement.
(b) If refining operations at the Refinery are suspended for any reason (including refinery turnaround operations and other scheduled maintenance), then DKTS 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. DKTS 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 DKTS shall not have any liability for any failure to notify, or delay in notifying, Delek-Big Xxxxx of any such suspension except to the extent Delek-Big Xxxxx has been materially damaged by such failure or delay.
24. FORCE MAJEURE
(a) Subject to Section 6(d), 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 Original Effective Date, DKTS shall be required to continue to make payments (i) for the Throughput Fees for volumes actually shipped or 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 DKTS utilizes Delek-Big Sandy’s storage for its Products during the applicable month and, instead of Shortfall Payments, Throughput Fees shall only be paid as provided under (A)(i) above, and (B) from and after the third anniversary of the Original Effective Date, DKTS shall be required to continue to make payments (i) for the Throughput Fees for volumes actually shipped or throughput under this Agreement, (ii) for the Ancillary Services Fee, if any, for services performed and (iii) for the Storage Fee to the extent DKTS 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”). DKTS 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 Original 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).
(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 Original 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 Original 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 Original Effective Date and following delivery of a Termination Notice, Delek-Big Xxxxx may terminate this Agreement, to the extent affected by the Force Majeure event, upon sixty (60) days prior written notice to DKTS in order to enter into an agreement to provide any third party the services provided to DKTS under this Agreement; provided, however, that Delek-Big Xxxxx shall not have the right to terminate this Agreement for so long as DKTS continues to the make Shortfall Payments.
25. CAPABILITIES OF FACILITIES
(a) Interruptions of Service. Delek-Big Xxxxx shall use reasonable commercial efforts to minimize the interruption of service at the Facilities and any portion thereof and shall use its best efforts to minimize the impact of any such interruption on DKTS. Delek-Big Xxxxx shall inform DKTS 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 Facilities, including relevant information about the nature, extent, cause and expected duration of the interruption and the actions Delek-Big Xxxxx is taking to resume full operations, provided that Delek-Big Xxxxx shall not have any liability for any failure to notify, or delay in notifying, DKTS of any such matters except to the extent DKTS 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 and pipeline industry standards, as applicable, Delek-Big Xxxxx shall maintain (i) the Pipeline in a condition and with a capacity sufficient to ship a volume of DKTS’ Products at least equal to the Minimum Pipeline Capacity and (ii) the Terminal in a condition and with a capacity sufficient to throughput a volume of DKTS’ Products at least equal to the Minimum Throughput Capacity and to store a volume of DKTS’ 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 Xxxxx from transporting the Minimum Pipeline Capacity, terminalling the Minimum Terminalling Capacity or storing the Minimum Storage Capacity. To
the extent DKTS is prevented for 30 or more days in any Contract Year from transporting volumes equal to the full Minimum Pipeline Capacity, terminalling volumes equal to the full Minimum Terminalling Capacity or using the Minimum Storage Capacity for reasons of Force Majeure or other interruption of service affecting the Facilities (including any reduction in available storage capacity pursuant to Section 3(c)(ii)), then DKTS’ (i) Minimum Pipeline Throughput Commitment shall be proportionately reduced to the extent of the difference between the Minimum Pipeline Capacity and the amount that DKTS can effectively ship on the Pipeline (prorated for the portion of the Contract Quarter during which the Minimum Pipeline Capacity was unavailable) regardless of whether the actual shipments prior to the reduction were below the Minimum Pipeline Throughput Commitment, (ii) Minimum Terminalling Throughput Commitment shall be proportionately reduced to the extent of the difference between the Minimum Terminalling Capacity and the amount that DKTS 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 Terminalling Throughput Commitment, and (iii) 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(d), 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 Xxxxx is unable to store at the Terminal, regardless of whether DKTS actually used such storage capacity. At such time as Delek-Big Xxxxx is capable of transporting volumes equal to the Minimum Pipeline Capacity, terminalling volumes equal to the Minimum Terminalling Capacity or using the Minimum Storage Capacity, as applicable, DKTS’ 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 transportation capacity of the Pipeline should fall below the Minimum Pipeline Capacity or the throughput or storage capacity of the Terminal should fall below the Minimum Terminalling Capacity or the Minimum Storage Capacity, respectively, then with due diligence and dispatch, Delek-Big Xxxxx shall make repairs to the Facilities, as applicable, to restore the capacity of the Facilities to that required for shipment and throughput of the Minimum Throughput Commitment 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 DKTS, its employees, agents or customers.
(c) Capacity Resolution. In the event of the failure of Delek-Big Xxxxx to maintain the Facilities in a condition and with a capacity sufficient (i) to ship a volume of DKTS’ Products equal to the Minimum Pipeline Capacity, (ii) to throughput a volume of DKTS’ Products equal to the Minimum Throughput Capacity or (iii) to store a volume of DKTS’ 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
Facilities which will, among other things, specify steps to be taken by Delek-Big Xxxxx 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 DKTS’ requirements concerning its refining and marketing operations. Delek-Big Xxxxx shall use commercially reasonable efforts to continue to provide shipment, storage and throughput of DKTS’ Products at the Facilities, to the extent the Facilities have capability of doing so, during the period before Restoration is completed. In the event that DKTS’ 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, DKTS may require Delek-Big Xxxxx to expedite the Restoration to the extent reasonably possible, subject to 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 DKTS 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 DKTS shall pay its portion of the Restoration costs to Delek-Big Xxxxx in advance based on a good faith estimate based on reasonable engineering standards. Upon completion, DKTS shall pay the difference between the actual portion of Restoration costs to be paid by DKTS 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 Xxxxx shall pay DKTS the excess of the estimate paid by DKTS 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 DKTS’ Products. DKTS 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 (or a plan to cure such breach reasonably satisfactory to the non-breaching Party has been adopted and is being diligently pursued by the breaching Party) 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 DKTS is in default, Delek-Big Xxxxx may or (ii) if Delek-Big Xxxxx is in default, DKTS 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.
(c) Upon expiration or termination of this Agreement, Delek-Big Xxxxx shall be responsible for removing any remaining Products of DKTS from the Facilities. Delek-Big Xxxxx shall have the right to sell such Products at market rates and return any proceeds to DKTS, less delivery costs in effect at the time of such sale.
(d) DKTS shall, upon expiration or termination of this Agreement, promptly remove any and all of its owned equipment, if any, and restore the Facilities to their condition prior to the installation of such equipment.
27. ASSIGNMENT; PARTNERSHIP CHANGE OF CONTROL
(a) DKTS 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) DKTS may assign this Agreement without Delek-Big Sandy’s consent in connection with a sale by 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 DKTS’ obligations under this Agreement and (2) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by DKTS in its reasonable judgment; and (ii) DKTS shall be permitted to make a collateral assignment of this Agreement solely to secure financing for Delek US and its Affiliates.
(b) Delek-Big Xxxxx shall not assign its rights or obligations under this Agreement without prior written consent from DKTS, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that (i) Delek-Big Xxxxx may assign this Agreement without DKTS’ consent in connection with a sale by Delek-Big Xxxxx of the Facilities, 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 Xxxxx in its reasonable judgment; and (3) is not a competitor of DKTS, as determined by DKTS in good faith; and (ii) Delek-Big Xxxxx shall be permitted to make a collateral assignment of this Agreement solely to secure financing for Delek-Big Xxxxx 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) DKTS’ 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, DKTS 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 Xxxxx shall provide DKTS 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 win be in writing and will be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when delivered; (b) 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; (c) 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 (d) 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:
if to DKTS:
DK Trading & Supply, LLC
c/o Delek US Holdings, Inc.
000 Xxxxx Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: General Counsel
000 Xxxxx Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: General Counsel
with a copy, which shall not constitute notice, to:
DK Trading & Supply, LLC
c/o Delek US Holdings, Inc.
000 Xxxxx Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: President
c/o Delek US Holdings, Inc.
000 Xxxxx Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: President
if to Delek-Big Xxxxx:
Delek Marketing-Big Xxxxx, LLC,
000 Xxxxx Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: General Counsel
000 Xxxxx Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: General Counsel
with a copy, which shall not constitute notice, to:
Delek Marketing-Big Xxxxx, LLC,
000 Xxxxx Xxxxxxx Xxx, Xxxxx 000
000 Xxxxx Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Senior Vice President
or to such other address or to such other person as either Party will have last designated by notice to the other Party.
29. MARKETING OF THROUGHPUT AND STORAGE SERVICES TO THIRD PARTIES
Subject to the limitation on the use of assets that are subject to the Call Option in the Omnibus Agreement, during the Term, Delek-Big Xxxxx may provide throughput and storage services to third parties at the Terminal and throughput to third parties in the Pipeline, provided that, (i) the provision of such throughput and storage services to third parties is not reasonably likely to negatively affect DKTS’ ability to use either of the Terminal or the Pipeline in accordance with the terms of this Agreement in any material respect, (ii) prior to any third party use of either of the Terminal or the Pipeline or the entry into any agreement with respect thereto, Delek-Big Xxxxx shall have received prior written consent from DKTS with respect to such third party usage or the entry into such agreement, as applicable, not to be unreasonably withheld, conditioned or delayed and (iii) to the extent such third-party usage reduces the ability of Delek-Big Xxxxx to provide the Minimum Pipeline Capacity, the Minimum Terminalling Capacity or the applicable Minimum Storage Capacity, the Minimum Pipeline Throughput Commitment, the Minimum Terminalling Throughput Commitment or the Storage Fee, as applicable, shall be proportionately reduced to the extent of the difference between the Minimum Pipeline Capacity, the Minimum Terminalling Capacity or the applicable Minimum Storage Capacity and the amount that can be throughput in the Pipeline or at the Terminal or stored in the Terminal (prorated for the portion of the Contract Quarter during which the Minimum Pipeline Capacity, the Minimum Terminalling Capacity or the applicable Minimum Storage Capacity was unavailable). Notwithstanding the foregoing but subject to the limitation on the use of assets that are subject to the Call Option in the Omnibus Agreement, to the extent DKTS is not using any portion of the Terminal or the Pipeline (the “Open Assets”) during (x) a Force Majeure event set forth in Section 24 that is specific to DKTS and does not impact third parties generally or (y) the Notice Period set forth in Section 23(a), Delek-Big Xxxxx may provide throughput and/or storage services to third parties on the Open Assets pursuant to one or more third-party agreements without the consent of DKTS, and the Minimum Pipeline Throughput Commitment, the Minimum Terminalling Throughput Commitment and the applicable Storage Fee will be reduced to the extent of such third-party usage as set forth above; provided that such third-party agreements and related services shall terminate following the end of the Force Majeure Period or the restoration of Refinery operations, as applicable.
30. 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.
(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 Disputes, other than actions seeking solely injunctive relief to prevent immediate harm, 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 30(d) and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Section 30(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 Dispute to binding arbitration. Xxxxxxxx’s notice initiating binding arbitration must identify the arbitrator Xxxxxxxx has appointed. The Respondent shall respond to Claimant within thirty (30) days after receipt of Xxxxxxxx’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 DKTS, Delek-Big Xxxxx 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. DKTS, Delek-Big Xxxxx 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 30(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 30(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 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 30(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 30(e) shall survive the termination of this Agreement for a period of two (2) years.
(f) Operator Status. Notwithstanding anything to the contrary herein, Delek-Big Xxxxx shall be the operator of the Facilities in all respects, and DKTS shall have no power or authority to direct the activities of Delek-Big Xxxxx or to exert control over the operation of the Facilities or any portion thereof. For the avoidance of doubt, the parties acknowledge that the Facilities are subject to certain restrictions in the Omnibus Agreement.
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) 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 MARKETING-BIG XXXXX, LLC
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Executive Vice President, Chief Financial Officer, and Treasurer
DK TRADING & SUPPLY, LLC
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Executive Vice President, DK & DKL Operations