DELAWARE CITY TRUCK LOADING SERVICES AGREEMENT TABLE OF CONTENTS
Exhibit 10.4
DELAWARE CITY TRUCK LOADING SERVICES AGREEMENT
TABLE OF CONTENTS
Article 1 | Definitions and Construction | 1 | ||||
Article 2 | Term | 9 | ||||
Article 3 | Terminaling; Ancillary Services | 9 | ||||
Article 4 | Custody, Title and Risk of Loss | 13 | ||||
Article 5 | Specification and Contamination | 14 | ||||
Article 6 | Condition and Maintenance of the Terminal | 14 | ||||
Article 7 | Inspection, Access and Audit Rights | 16 | ||||
Article 8 | Scheduling | 17 | ||||
Article 9 | Intentionally Omitted | 17 | ||||
Article 10 | Additional Covenants | 17 | ||||
Article 11 | Representations | 19 | ||||
Article 12 | Insurance | 19 | ||||
Article 13 | Force Majeure, Damage or Destruction | 20 | ||||
Article 14 | Suspension of Refinery Operations | 21 | ||||
Article 15 | Right of First Refusal | 21 | ||||
Article 16 | Shutdown or Idling of Refinery | 24 | ||||
Article 17 | Event of Default: Remedies Upon Event of Default | 26 | ||||
Article 18 | Indemnification | 27 | ||||
Article 19 | Limitation on Damages | 29 | ||||
Article 20 | Confidentiality | 29 | ||||
Article 21 | Choice of Law | 30 | ||||
Article 22 | Assignment | 30 | ||||
Article 23 | Notices | 32 | ||||
Article 24 | No Waiver; Cumulative Remedies | 33 | ||||
Article 25 | Nature of Transaction and, Relationship of Parties | 33 | ||||
Article 26 | Arbitration Provision | 33 | ||||
Article 27 | General | 34 |
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Exhibit A | Ancillary Services Fees | |
Exhibit B | Product and Product Quality | |
Exhibit C | Terminal Access Obligations and Procedures | |
Exhibit D | Designated Refinery Assets |
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DELAWARE CITY TRUCK LOADING SERVICES AGREEMENT
This Delaware City Truck Loading Services Agreement (this Agreement) is made and entered into as of the Commencement Date, by and between PBF Holding Company LLC, a Delaware limited liability company (the Company), and Delaware City Logistics Company LLC, a Delaware limited liability company (the Operator) (each referred to individually as a Party or collectively as the Parties).
WHEREAS, the Operator owns and operates a petroleum product truck loading rack located in Delaware City, Delaware (as described on Exhibit D to the Contribution Agreement (as defined below), and together with existing or future modifications or additions thereto, the Terminal);
WHEREAS, the Parties are entering into this Agreement to provide for the rights and obligations of the Parties with respect to the Terminal; and
WHEREAS, the Parties desire to record the terms and conditions upon which the Operator shall provide terminaling services to the Company at the Terminal on a non-exclusive basis and the Operator shall serve as operator of the Terminal and bailee of all Products in the custody of the Operator and owned or held by the Company or any of the Company Designees.
NOW, THEREFORE, in consideration of the premises and the respective promises, conditions, terms and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties do hereby agree as follows:
Article 1 Definitions and Construction.
Section 1.1 Definitions. For purposes of this Agreement, including the foregoing recitals, the following terms shall have the meanings indicated below:
Acquisition Proposal has the meaning specified in Section 15.3(a).
Adjustment has the meaning specified in Section 3.6(a).
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 (a) 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, (b) ownership of 50% or more of the equity or equivalent interest in any Person and (c) 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, the Company and its subsidiaries (other than PBF Logistics LP and its subsidiaries), on the one hand, and PBF Logistics LP and its subsidiaries (including the Operator), on the other hand, shall not be considered Affiliates of each other.
Agreement has the meaning specified in the preamble to this document.
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Ancillary Services means the services to be provided by the Operator to the Company at the Terminal that are set forth on Exhibit A, as well as any other ancillary services requested in accordance with Section 3.4.
Ancillary Services Fees means, for any month during the Term, the fees set forth on Exhibit A, to be paid by the Company pursuant to Section 3.4 during that month for Ancillary Services.
Applicable Law means any applicable statute, law, regulation, Environmental Law, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, 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 all of the terms and provisions of the applicable common law of such Governmental Authority), as interpreted and enforced at the time in question.
Arbitrable Dispute means any and all disputes, controversies and other matters in question between the Operator, on the one hand, and the Company, on the other hand, arising under or in connection with this Agreement.
Barrel means forty-two (42) net U.S. gallons, measured at 60° F and 1 atmospheric pressure.
bpd means Barrels per day.
Business Day means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in the State of New York, State of New Jersey or the State of Delaware.
Capital Expenditure means any expenditure incurred to acquire or upgrade a fixed asset.
Change in Law has the meaning specified in Section 3.6(a).
Change of Control means PBF Energy Company LLC or any of its majority owned direct or indirect subsidiaries ceases to control the general partner of PBF Logistics LP.
Claimant has the meaning specified in Article 26.
Commencement Date means May 15, 2015.
Company has the meaning specified in the preamble to this Agreement.
Company Designee means, collectively, each Person designated by the Company, including any Person acting as an intermediator of all or any portion of the Products or any third party.
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Company Indemnitees has the meaning specified in Section 18.1.
Company Inspectors has the meaning specified in Section 7.1.
Companys Share means a number, expressed as a percentage, equal to the quotient of (a) the greater of (i) the total Barrels throughput by the Company and any Company Designee at the Terminal, in the aggregate, during the sixth-month period preceding the date of determination or (ii) the Minimum Throughput Commitment during such period, and (b) the total Barrels throughput by all Persons at the Terminal during such period.
Confidential Information means all information, documents, records and data (including this Agreement, except to the extent required to be made public in a filing with the Securities and Exchange Commission or another Governmental Authority or pursuant to the rules and regulations of any national securities exchange) 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 (a) 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), (b) is developed by the receiving Party without reliance on any Confidential Information or (c) 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.
Contract Year means a year that commences on January 1 and ends on December 31 of such year, except that the initial Contract Year shall commence on the Commencement Date and the final Contract Year shall end on the last day of the Term.
Contribution Agreement means the Contribution Agreement, dated May 5, 2015, by and between PBF Energy Company LLC and PBF Logistics LP.
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 such Person, whether through the ownership of voting securities, by contract or otherwise.
Customer means any customer of Company, or of a Company Designee, which has been granted access to the Terminal to permit Operator to load Product in accordance with the requirements of Exhibit C.
Defaulting Party has the meaning specified in Section 17.2.
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Designated Refinery Assets has the meaning specified in Section 16.1.
Disposition Notice has the meaning specified in Section 15.3(a).
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, safety, and occupational health, including 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 Clean Water Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, OSHA, and other similar federal, state or local health and safety, and 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.
EPT means the prevailing time in the Eastern time zone.
Excess Throughput has the meaning specified in Section 3.3.
Event of Default has the meaning specified in Section 17.1.
First ROFR Acceptance Deadline has the meaning specified in Section 15.3(a).
Force Majeure means acts of God, strikes, lockouts or other industrial disturbances, acts of a public enemy, wars, terrorism, blockades, insurrections, riots, storms, floods, interruptions in the ability to have safe passage in navigable waterways or rail lines, washouts, other interruptions caused by acts of nature or the environment, arrests, the order of any court or Governmental Authority claiming or having jurisdiction while the same is in force and effect, civil disturbances, explosions, fires, leaks, releases, breakage, accident to machinery, vessels, storage tanks or lines of pipe or rail lines, inability to obtain or unavoidable delay in obtaining material or equipment, inability to obtain or distribute Products, feedstocks, other products or materials necessary for operation because of a failure of third-party pipelines or rail lines or 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, a Partys inability to perform its economic obligations hereunder shall not constitute an event of Force Majeure.
Force Majeure Notice has the meaning specified in Section 13.1.
Force Majeure Party has the meaning specified in Section 13.1.
Force Majeure Period has the meaning specified in Section 13.1.
Gallon means one net U.S. gallon, measured at 60° F and 1 atmospheric pressure.
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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.
Hart-Scott-Rodino Act means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Index Change means the Producer Price Index is no longer published or the method of calculating the Producer Price Index is changed so that the Producer Price Index no longer reflects general increases in prices in the broad United States economy.
Initial Term has the meaning specified in Section 2.1.
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, cause of action, equitable or injunctive relief, or judicial or administrative order and any Costs arising from compliance or non-compliance with Environmental Law.
Minimum Throughput Capacity means, with respect to each Contract Quarter, an aggregate amount of throughput capacity of Products loaded into trucks at the Terminal equal to 1) at least 30,000bpd of gasoline, diesel and heating oil, and 2) at least 5,000bpd of propane and propylene bpd of Products, each multiplied by the number of calendar days in such Contract Quarter.
Minimum Throughput Commitment means, with respect to each Contract Quarter, an aggregate amount of Products loaded into trucks at the Terminal equal to 1) at least 30,000bpd of gasoline, diesel and heating oil, and 2) at least 5,000bpd of propane and propylene, each multiplied by the number of calendar days in such Contract Quarter.
Non-Defaulting Party means the Party other than the Defaulting Party.
Notice Period has the meaning specified in Section 14.1.
Off-Specification Product means Product that fails to meet the specifications set forth in Exhibit B.
Offer Price has the meaning specified in Section 15.3(a).
Omnibus Agreement means that Third Amended & Restated Omnibus Agreement, dated as of May 15, 2015, by and among the Company, PBF Energy Company LLC, PBF Logistics GP LLC, and PBF Logistics LP., as amended and restated as of the date hereof and as further amended or amended and restated from time to time.
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Operation and Management Services and Secondment Agreement means that Third Amended and Restated Operation and Management Services and Secondment Agreement dated May 15, 2015, by and among the Company, Delaware City Refining Company LLC, Toledo Refining Company LLC, PBF Logistics GP LLC, PBF Logistics LP, Delaware City Terminaling Company LLC, Toledo Terminaling Company LLC, , Delaware Pipeline Company LLC, and the Operator as amended and restated as of the date hereof and as further amended or amended and restated from time to time.
Operator has the meaning specified in the preamble to this Agreement.
Operator Indemnitees has the meaning specified in Section 18.2.
OSHA means Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq.
Party or Parties has the meaning specified in the preamble to this Agreement.
Permitted Lien means (a) liens for real estate taxes, assessments, sewer and water charges or other governmental charges and levies not yet delinquent; (b) liens for taxes, assessments, judgments, governmental charges or levies, or claims not yet delinquent or the non-payment of which is being diligently contested in good faith by appropriate proceedings and for which adequate reserves have been set aside; (c) liens of mechanics, laborers, suppliers, workers and materialmen incurred in the ordinary course of business for sums not yet due or being diligently contested in good faith; and (d) liens incurred in the ordinary course of business in connection with workers compensation and unemployment insurance or other types of social security benefits.
Permanent Refinery Shutdown has the meaning specified in Section 16.1(a).
Person means any individual, corporation, partnership, limited partnership, limited liability company, joint venture, trust or unincorporated organization, joint stock company or any other private entity or organization, Governmental Authority, court or any other legal entity, whether acting in an individual, fiduciary or other capacity.
Prime Rate means the rate of interest quoted in The Wall Street Journal, Bonds, Rates & Yields Section as the Prime Rate.
Producer Price Index shall have the meaning ascribed to such term by the United States Bureau of Labor Statistics.
Product means any of the products listed on Exhibit B, as from time to time amended by mutual agreement of the Parties.
Proposed Transferee has the meaning specified in Section 15.3(a).
Prudent Industry Practice means, as of the relevant time, those methods and acts generally engaged in or applied by the refining, pipeline or terminaling industries (as applicable) in the United States that, in the exercise of reasonable judgment in light of the circumstances known
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at the time of performance, would have been expected to accomplish the desired result at a reasonable cost consistent with functionality, reliability, safety and expedition with due regard for health, safety, security and environmental considerations. Prudent Industry Practice is not intended to be limited to the optimum practices, methods or acts to the exclusion of others, but rather is intended to include reasonably acceptable practices, methods and acts generally engaged in or applied by the refining, pipeline or terminaling industries (as applicable) in the United States.
Receiving Party Personnel has the meaning specified in Section 20.4.
Refinery means the petroleum refinery located in Delaware City, Delaware owned and operated by the Companys Affiliates.
Refinery Asset Option Notice has the meaning specified in Section 16.1(b).
Refinery Asset Option Period has the meaning specified in Section 16.1(f).
Refinery Asset Purchase Option has the meaning specified in Section 16.1(b).
Renewal Term has the meaning specified in Section 2.1.
Required Permits has the meaning specified in Section 10.1.
Respondent has the meaning specified in Article 26.
Restoration has the meaning specified in Section 6.2(b).
ROFR Acceptance Deadlines has the meaning specified in Section 15.3(a).
ROFR Asset means the Terminal and each asset that comprises the Terminal and is material to the operation thereof.
ROFR Governmental Approval Deadline has the meaning specified in Section 15.3(c).
ROFR Response has the meaning specified in Section 15.3(a).
Sale Assets has the meaning specified in Section 15.3(a).
Second ROFR Acceptance Deadline has the meaning specified in Section 15.3(a).
Services has the meaning specified in Section 3.1.
Shortfall has the meaning specified in Section 3.7.
Shortfall Payment has the meaning specified in Section 3.7.
Special Damages has the meaning specified in Article 19.
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Supplier Inspector means any Person selected by the Company to perform any and all inspections required by the Company or the Company Designee in a commercially reasonable manner at the Companys own cost and expense that is acting on behalf of the Company or the Company Designee and that (a) is a Person who performs sampling, quality analysis and quantity determination or similar services of the Products purchased and sold under any agreement between the Company (or its Affiliates) and the Company Designee, (b) is not an Affiliate of any Party and (c) in the reasonable judgment of the Company, is qualified and reputed to perform its services in accordance with Applicable Law and Prudent Industry Practice.
Suspension Notice has the meaning specified in Section 14.1.
Term has the meaning specified in Section 2.1.
Terminal has the meaning specified in the recitals.
Terminal Maintenance has the meaning specified in Section 6.2(a).
Terminaling Service Fee has the meaning set forth in Section 3.1.
Termination Notice has the meaning specified in Section 13.2.
Transfer means to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of, whether in one or a series of transactions.
Section 1.2 Construction of Agreement.
(a) Unless otherwise specified, all references herein are to the Articles, Sections and Exhibits of this Agreement and all Exhibits are incorporated herein.
(b) All headings herein are intended solely for convenience of reference and shall not affect the meaning or interpretation of the provisions of this Agreement.
(c) Unless expressly provided otherwise, the word including as used herein does not limit the preceding words or terms and shall be read to be followed by the words without limitation or words having similar import.
(d) Unless expressly provided otherwise, all references to days, weeks, months and quarters mean calendar days, weeks, months and quarters, respectively.
(e) Unless expressly provided otherwise, references herein to consent mean the prior written consent of the Party at issue.
(f) A reference to any Party to this Agreement or another agreement or document includes the Partys permitted successors and assigns.
(g) Unless the contrary clearly appears from the context, for purposes of this Agreement, the singular number includes the plural number and vice versa; and each gender includes the other gender.
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(h) Except where specifically stated otherwise, any reference to any Applicable Law or agreement shall be a reference to the same as amended, supplemented or reenacted from time to time.
(i) The words hereof, herein and hereunder and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
Section 1.3 No Presumption. The Parties acknowledge that they and their counsel have reviewed and revised this Agreement and that no presumption of contract interpretation or construction shall apply to the advantage or disadvantage of the drafter of this Agreement.
Article 2 Term.
Section 2.1 Term. The initial term of this Agreement (the Initial Term) shall commence at 12:00:01 a.m., EPT, on the Commencement Date and shall continue until 11:59:59 p.m., EPT, on the first December 31 following the tenth (10th) anniversary of the Commencement Date. Thereafter, subject to the last sentence of this paragraph, the Company shall have a unilateral option to extend this Agreement for two additional five (5) year periods on the same terms and conditions set forth herein (each, a Renewal Term). The Initial Term and the 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, the Company shall notify the Operator in writing not less than twelve (12) months prior to the expiration of the Initial Term or any Renewal Term, as applicable.
Section 2.2 Termination. The Parties may terminate this Agreement prior to the end of the Term (but are under no obligation to do so) (a) as they may mutually agree in writing, (b) pursuant to a Termination Notice in accordance with Section 13.2, (c) pursuant to a Suspension Notice in accordance with Section 14.1, (d) pursuant to a default in accordance with Section 17.2 or (e) pursuant to Section 3.6(c).
Article 3 Terminaling; Ancillary Services.
Section 3.1 Services. Subject to the terms of this Agreement, the Operator shall provide the following services (the Services) to the Company hereunder: receipt, handling, throughput, custody, delivery and truck loading of the Companys (and its subsidiaries and the Company Designees) Product at the Terminal. During each Contract Quarter during the Term, the Company (on its own behalf and on behalf of its subsidiaries and the Company Designee) shall throughput or, if it does not throughput, pay for in accordance with Section 3.7, in the aggregate, at least the Minimum Throughput Commitment at the Terminal and the Operator shall make available to the Company throughput capacity at the Terminal (and provide the Services as reasonably requested by the Company in connection therewith subject to the terms hereof), at all times sufficient to allow the Company to throughput the Minimum Throughput Commitment at the Terminal. The Operator shall cooperate with the Company or the Company Designee, and the Company shall (and shall cause the Company Designee to) cooperate with the Operator, to determine throughput of Product hereunder based on the meters utilized at the Terminal or any other commercially reasonable method mutually agreed to by the Parties.
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Section 3.2 Terminaling Service Fee. The Company shall pay a terminaling services fee (the Terminaling Service Fee) for the volumes of Products it actually throughputs at the Terminal of (a) $0.011 per Gallon for all throughput of gasolines and distillates, and (b) $0.06 per Gallon for all throughput volumes of propane and propylene.
Section 3.3 Excess Throughput. The Company shall have the right to throughput volumes in excess of its Minimum Throughput Commitment (Excess Throughput), up to the then-available capacity of the Terminal, as reasonably determined by the Operator in good faith at any time (after giving effect to the permitted, physical and operational constraints of the Terminal and the capacity contractually committed to third parties). In accordance with Section 3.2(a) and Section 3.2(b), the Company shall pay the Operator the applicable per Gallon Terminaling Service Fee for any Excess Throughput.
Section 3.4 Ancillary Services. Upon request by the Company, the Operator shall provide the Ancillary Services listed on Exhibit A to the Company at the Terminal. From time-to-time, the Company may request that the Operator provide additional Ancillary Services to the Company at the Terminal upon customary terms in accordance with Prudent Industry Practice so long as such additional Ancillary Services are reasonably related to the Services or existing Ancillary Services; provided, however, that in the event any requested additional Ancillary Service requires the Operator to make Capital Expenditures, such Capital Expenditures shall be subject to Section 3.10(b) and the Operator shall not be required to provide such additional Ancillary Service until the Operator is able to do so after using reasonable efforts in compliance with Section 3.10(b); provided, further, the Operator shall not be required to perform any additional Ancillary Service if it reasonably believes the performance thereof will materially adversely interfere with, or be detrimental to, the operation of the Terminal. The Company shall pay the Ancillary Services Fees listed on Exhibit A for such services. The Company may, at any time on reasonable prior notice, revoke or modify any instructions it has previously given, whether such previous instructions relate to a specific Service or Ancillary Service or are instructions relating to an ongoing Service or Ancillary Service. If any additional Ancillary Services are requested by Company that are different in kind, scope or frequency from the Ancillary Services listed on Exhibit A as they have been historically provided at the Terminal, then the Parties shall negotiate in good faith to determine whether such services may be provided and the appropriate Ancillary Services Fee structure to account for such services. The Operator shall not be required to perform any requested Service or Ancillary Service if it reasonably believes such Service or Ancillary Service violates Applicable Law.
Section 3.5 Annual Fee Escalator. All fees set forth in this Agreement, including the Terminaling Service Fee and the Ancillary Services Fees, shall be adjusted on January 1 of each Contract Year, commencing on January 1, 2016, (a) by an amount equal to the increase or decrease, if any, in the Producer Price Index during the previous Contract Year and (b) by an amount equal to the increase, if any, in the individual out-of-pocket costs that increase greater than the Producer Price Index reasonably incurred by the Operator in connection with providing the Services and Ancillary Services; provided, however, that no fee shall be decreased below the initial fee for such service provided in this Agreement; provided, further, that the Operator shall use commercially reasonable efforts to mitigate any such rise in out-of-pocket costs incurred by the Operator in connection with providing the Services and Ancillary Services. In the event of an Index Change, the Company and the Operator shall negotiate in good faith to agree on a new index
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that gives comparable protection against inflation that the Producer Price Index gave as of the date hereof, and, for all periods following the date of such Index Change, such new index shall replace the Producer Price Index for all purposes herein. If the Company and the Operator are unable to agree, a new index will be determined by arbitration in accordance with Article 26 and, for all periods following the date of such Index Change, such new index shall replace the Producer Price Index for all purposes herein.
Section 3.6 Change in Law.
(a) In the event that any applicable existing laws, codes, regulations, permit conditions or other authorizations are amended or new laws, codes, regulations, permit conditions or other authorizations are enacted or promulgated after the Commencement Date that require a material Capital Expenditure at the Terminal, or the acquisition of a permit from a Governmental Authority, in each case, in order to provide the Services and Ancillary Services (a Change in Law), the Operator may, by written notice to the Company, request to negotiate an adjustment (an Adjustment) in the Terminaling Service Fee or other fees and charges paid hereunder to cover the Companys Share of the reasonable, incremental, out-of-pocket operating and maintenance costs the Operator would incur to comply with the Change in Law, including a return of capital expended and a return on such capital at a rate of return of 11% per annum, amortized over the remaining Term.
(b) If the Operator requests to negotiate an Adjustment pursuant to Section 3.6(a): (i) the Operator shall provide the Company with complete access (subject to reasonable confidentiality provisions) to information and documentation regarding such proposed Adjustment, including the nature and cost of the contemplated improvements or permit, as applicable, the options for financing or otherwise amortizing such cost, the Operators assessment that such improvements are the most feasible means of complying with the Change in Law and the manner in which the Companys Share of such costs are determined; and (ii) the Parties shall be obligated to negotiate in good faith to agree to an Adjustment as described in Section 3.6(a).
(c) If, despite good faith negotiations, the Parties are unable to agree to an Adjustment pursuant to Section 3.6(a) in sufficient time for the Operator to take such action as shall be necessary to comply with the Change in Law, then the amount of such fee increases will be determined by arbitration in accordance with Article 26, and any such fee increases will be effective as of the effective time of such Change in Law; provided, however, that in the event the fees paid hereunder increase in the aggregate as a result of Changes in Law by more than 200%, then the Company may terminate this Agreement upon ninety (90) days written notice.
Section 3.7 Shortfall Payments. If, during any Contract Quarter, the Company throughputs aggregate volumes less than the Minimum Throughput Commitment, as adjusted pursuant to Section 6.2, for such Contract Quarter (a Shortfall), then (in addition to Terminaling Service Fee) the Company shall pay the Operator an amount (a Shortfall Payment) equal to the Terminaling Service Fee multiplied by the difference between (a) the Minimum Throughput Commitment and (b) the volume of Products actually delivered to the Terminal by the Company during the applicable Contract Quarter. The Parties acknowledge and agree that there shall be no carry-over of deficiency volumes with respect to the Minimum Throughput Commitment and the payment by the Company of the Shortfall Payment shall relieve the Company of any obligation to meet such Minimum Throughput Commitment for the relevant Contract Quarter.
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Section 3.8 Invoices. The Operator shall invoice the Company monthly (or, in the case of any Shortfall Payments, quarterly) for all fees and payments under this Agreement. The Company will make payments to the Operator on a monthly (or, in the case of any Shortfall Payments, quarterly) basis during the Term with respect to amounts due to the Operator under this Agreement in the prior month (or, in the case of any Shortfall Payments, Contract Quarter) ten (10) days after its receipt of such invoice. Any past due payments owed to the Operator hereunder shall accrue interest, payable on demand, at the Prime Rate plus 400 basis points from the due date of the payment through the actual date of payment. Payment of any fee or Shortfall Payment pursuant to this Section 3.8 shall be made by wire transfer of immediately available funds to an account designated in writing by the Operator. 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.
Section 3.9 Operating Hours. The Operator agrees to keep the Terminal open for receipt and redelivery of the Companys and the Company Designees Products twenty-three (23) hours a day, seven (7) days a week. The Terminal closes from approximately 11 pm to midnight daily for volume reconciliation.
Section 3.10 Regulatory Costs; Reimbursement.
(a) Taxes. The Company shall reimburse the Operator for all taxes that the Operator incurs in connection with this Agreement unless prohibited by Applicable Law.
(b) Capital Expenditures. The Company may request that the Operator make certain Capital Expenditures at the Terminal and the Operator shall make such Capital Expenditures; provided, however, that the Operator shall not be required to make any such Capital Expenditure if such Capital Expenditure would materially adversely affect the operation of the Terminal, as determined in the reasonable discretion of the Operator. The Company shall reimburse the Operator for the Companys Share of any such Capital Expenditure. For the avoidance of doubt, except as provided in the Omnibus Agreement or the Operation and Management Services and Secondment Agreement, any maintenance required for the Operator to continue to provide the services specified hereunder shall be paid for by the Operator.
(c) Payment Terms. All of the foregoing reimbursements shall be made in accordance with the payment terms set forth in Section 3.8 herein.
Section 3.11 Third-Party Arrangements. The Operator may throughput volumes for third parties; provided, however, that such arrangements do not prevent the Operator from fulfilling its obligations to the Company hereunder, including the obligation to make the Minimum Throughput Capacity available to the Company during the Term. Nothing herein shall be deemed to provide the Company with exclusive rights to services at the Terminal.
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Article 4 Custody, Title and Risk of Loss.
Section 4.1 Title. Subject to Section 22.2, the Company or the Company Designee shall at all times during the Term retain title to the Products handled or throughput by the Company or the Company Designee at the Terminal, and such Products shall remain the Companys or the Company Designees exclusive property. The Company hereby represents that, at all times during the Term, the Company or the Company Designee holds exclusive title to the Products throughput or handled by the Company at the Terminal; provided, however, that each of the Company and the Company Designee may at any time permit liens on the Companys or the Company Designees Products at the Terminal.
Section 4.2 Compliance with Laws. During the time any Products are held or throughput at the Terminal, the Operator, in its capacity as operator of the Terminal shall be solely responsible for compliance with (and the Operator shall comply with) all Applicable Laws pertaining to the possession, handling, use and processing of such Products at the Terminal.
Section 4.3 Volumetric Losses and Gains. Subject to the other provisions in this Agreement, title and risk of loss to all of the Products handled or throughput by the Company or the Company Designee at the Terminal shall remain at all times with the Company or the Company Designee, as applicable. Unless the Operator experiences a spill or other release of Product while Product is in the Operators custody, all volumetric losses and gains in Product shall be for the Companys or the Company Designees account, as applicable. Operator reserves the right to install meters for receipt of Product at the Terminal in order to make a more accurate gain/loss calculation and to amend this Agreement to allocate such gains and losses between Operator and all throughputters at the Terminal (including Company) in accordance with industry standards, subject to Companys consent which shall not be unreasonably withheld, delayed or conditioned.
Section 4.4 Custody. During the Term, the Operator shall hold all Products at the Terminal solely as bailee, and agrees that when any such Products are redelivered to the Company or the Company Designee, the Company or the Company Designee shall have good title thereto (to the extent the Company had good title prior to delivery at the Terminal) free and clear of any liens, security interests, encumbrances and claims of any kind whatsoever created or caused to be created by the Operator, other than Permitted Liens; provided, however, that notwithstanding anything herein to the contrary the Operator hereby waives, relinquishes and releases any and all liens, including, any and all warehousemans liens, custodians liens, rights of retention or similar rights under all applicable laws, which the Operator would or might otherwise have under or with respect to any Products handled hereunder. During the Term, none of the Operator or any of its Affiliates shall (and the Operator shall not permit any of its Affiliates or any other Person to) use any such Products for any purpose. Solely in its capacity as bailee, the Operator shall have custody of Product throughput under this Agreement from the time the Products pass the inlet flange of the Terminal from the Refinery until such time that the Products pass the outlet flange of the Terminal (loading connection to the receiving truck).
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Article 5 Specification and Contamination.
Section 5.1 Delivery Specifications.
(a) The Company shall not (and shall cause any Company Designee to not) deliver to the Terminal any Off-Specification Product; provided, however, that in the event Off-Specification Product is delivered by the Company or any Company Designee to the Terminal, and the Company or the Company Designee instructs or fails to instruct the Operator to return such Off-Specification Product to the Company or the Company Designee, as applicable, the Operator shall provide the Off-Specification Product to the Company or the Company Designee, as applicable, and the Operator will return, and the Company will receive on its or the Company Designees behalf, such Off-Specification Product at the Companys own expense. In the event Off-Specification Product is delivered by the Company or the Company Designee, and in the reasonable opinion of the Operator, the Services are unable to be provided as a result of the Off-Specification Product (whether due to a failure to comply with law, safety considerations or otherwise), the Operator shall notify the Company and the Company shall be responsible for taking possession of such Off-Specification Product without the Services being provided and such Off-Specification Product shall not count towards the Minimum Volume Commitment.
Section 5.2 Offloading Specifications. If all Product meets the relevant specifications set forth in Exhibit B, with the exclusion of additives, when it enters the Terminal, it is the responsibility of the Operator to ensure that all Products leaving the Terminal (at the discharge flange of the loading rack) shall meet the same relevant specifications, and shall not leave the Terminal with different specifications. Notwithstanding the above language, it is the responsibility of the Operator to inject the correct amount of additives to meet the the additive specifications, if any, set forth in Exhibit B. In lieu of any indemnification obligations pursuant to Section 18.1, the Operator may, at its sole option, require the Company, at the Operators sole expense, to reprocess or otherwise treat any such mis-additized Products to restore those Products to salable condition.
Section 5.3 Contamination. The Operator shall use at least Prudent Industry Practice to ensure that no Products shall be contaminated with scale or other materials, chemicals, water or any other impurities. In lieu of any indemnification obligations pursuant to Section 18.1, the Operator may, at its sole option, require the Company, at the Operators sole expense, to reprocess or otherwise treat any such contaminated Products to restore those Products to salable condition, or reimburse the Company for the market value of such Products.
Article 6 Condition and Maintenance of the Terminal.
Section 6.1 Interruption of Service. The Operator shall use commercially reasonable efforts to (i) minimize the interruption of service at the Terminal, and (ii) notwithstanding any such interruption of service, make the Terminal available to the Minimum Throughput Capacity. The Operator shall inform the Company at least sixty (60) days in advance (or promptly, in the case of an unplanned interruption) of any anticipated partial or complete interruption of service at the Terminal, including relevant information about the expected duration of the interruption and the actions the Operator is taking to resume full operations; provided, however, that the Operator shall not have any liability for any failure to notify, or delay in notifying, the Company of any such matters except to the extent the Company has been materially damaged by such failure or delay.
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Section 6.2 Maintenance and Repair Standards.
(a) Subject to Article 13, during the Term the Operator shall maintain the Terminal with sufficient aggregate capacity to throughput a volume of Product at least equal to the Minimum Throughput Capacity; provided, however, that the Operators obligations may be temporarily suspended during the occurrence of, and for the entire duration of, routine repair and maintenance consistent with Prudent Industry Practice that prevents the Operator from providing the Minimum Throughput Capacity (Terminal Maintenance) so long as the Operator has complied with its obligations set forth in Section 6.1. In the event the Terminal Maintenance is not as a result of Force Majeure, the Parties shall reasonably cooperate with each other so as to (i) ensure that such Terminal Maintenance does not unnecessarily interfere with any of the Companys or the Company Designees purchase or sale commitments, (ii) ensure that such Terminal Maintenance otherwise accommodates, to the extent reasonably practicable, other commercial or market considerations that the Company deems relevant and (iii) reasonably minimize the effect of such Terminal Maintenance on the Services and the Ancillary Services.
(b) To the extent the Company is prevented for seven (7) or more days in any Contract Quarter from throughputting volumes at the Terminal equal to at least the Minimum Throughput Commitment for reasons caused by the Operator (or any of its employees, agents or contractors) other than Force Majeure and other than causes due to actions of the Company or the Company Designee (and any of their respective contractors, employees or representatives excluding the Operator and its employees, agents and representatives), then the Minimum Throughput Commitment shall be proportionately reduced to the extent of the difference between the Minimum Throughput Capacity and the amount that the Operator 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 actual throughput amounts prior to the reduction were below the Minimum Throughput Commitment. At such time as the Operator is capable of throughputting volumes equal to at least the Minimum Throughput Commitment at the Terminal, the Companys obligation to throughput the full Minimum Throughput Commitment shall be restored as of such time. To the extent the Company is prevented for seven (7) or more days in any Contract Quarter from throughputting volumes at the Terminal equal to at least the Minimum Throughput Commitment, other than due to a Force Majeure event, and the throughput at the Terminal falls below the Minimum Throughput Capacity as described above in this paragraph (b), the Operator shall make all commercially reasonable repairs at the Terminal to restore the capacity of the Terminal to that required for throughput of the Minimum Throughput Capacity (Restoration). All of such Restoration shall be at the Operators cost and expense, unless any damage creating the need for such repairs was caused by the negligence or willful misconduct of the Company, the Company Designee or their respective contractors, employees, agents (excluding for the avoidance of doubt, the Operator and its contractors, employees and agents) or customers, in which case such Restoration shall be at the Companys cost and expense to the extent caused by the negligence or willful misconduct of the Company, the Company Designee or their respective employees, agents or customers.
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Article 7 Inspection, Access and Audit Rights.
Section 7.1 Inspection. At any reasonable times during normal business hours and upon reasonable prior notice, the Company, the Company Designee and their respective representatives (including one or more Supplier Inspectors, collectively, the Company Inspectors) shall have the right to enter and exit the Operators premises in order to have access to the Terminal, to observe the operations of the Terminal and to conduct such inspections as the Company or the Company Designee may wish to have performed in connection with this Agreement, including to enforce its rights and interests under this Agreement; provided, however, that (a) each of the Company Inspectors shall follow routes and paths to be reasonably designated by the Operator or security personnel retained by the Operator, (b) each of the Company Inspectors shall observe all security, fire and safety regulations while in, around or about the Terminal, (c) when accessing the facilities of the Operator, the Company Inspectors shall at all times comply with Applicable Law and such safety directives and guidelines as may be furnished to the Company or the Company Designee by the Operator by any means (including in writing, orally, electronically or through the posting of signs) from time to time, and (d) the Company or the Company Designee shall be liable for any personal injury to its representatives or any damage caused by such Company Inspectors in connection with such access to the Terminal. Without limiting the generality of the foregoing, the Operator shall regularly grant the Company Inspectors reasonable access upon advance notice in writing and such inspectors comply with Operators rules, regulations and procedures which shall include Operators right to accompany the Inspectors.
Section 7.2 Access. The Company, the Company Designee and their respective representatives, upon reasonable notice and during normal working hours, shall have access to the accounting records and other documents maintained by the Operator, or any of its 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 and for a period of up to two (2) years after termination of this Agreement. The Company or the Company Designee shall have the right to conduct such audit no more than once per calendar quarter and each audit shall be limited in time to no more than the present and prior two (2) calendar years. Claims as to defects in quality shall be made by written notice within sixty (60) 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. The Operator 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. Additionally, the Operator shall make available a copy of any meter calibration report, to be available for inspection upon reasonable request by the Company or the Company Designee at the Terminal following any calibration. Notwithstanding any of the foregoing, if an Event of Default with respect to the Operator has occurred and is continuing, the Company Inspectors shall have unlimited and unrestricted access to the accounting records and other documents maintained by the Operator with respect to the Terminal, for so long as such Event of Default continues.
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Article 8 Scheduling.
The Operator shall provide the Company, the Company Designee and their Customers non-discriminatory, priority access rights at the Terminal to throughput the Companys and the Company Designees Products up to the Minimum Throughput Capacity. All deliveries, receipts, handling and throughput of Product hereunder shall be made in strict accordance with the Operators current reasonable operating, scheduling and nomination procedures for the Terminal, which (a) the Operator shall provide to the Company on the date hereof, (b) the Operator shall not materially modify without the prior written consent of the Company, not to be unreasonably withheld, modified or delayed; provided, however, that the Operator may make any modifications it reasonably deems necessary to comply with or observe any Applicable Law or for health, safety, environmental, security or other similar concerns consistent with Prudent Industry Practice, and (c) shall allow the throughput of the grades and qualities of Product specified in Exhibit B.
Article 9 Intentionally Omitted
Article 10 Additional Covenants.
Section 10.1 Required Permits. During the Term, unless the Company has agreed to maintain such for the benefit of the Operator, the Operator shall, at its sole cost and expense (directly or through one of its or the Companys Affiliates), obtain, apply for, maintain, monitor, renew, and modify, as appropriate, any license, authorization, certification, filing, recording, permit, waiver, exception, variance, franchise, order or other approval with or of any Governmental Authority pertaining or relating to the operation of the Terminal (the Required Permits) as currently operated; provided, however, that if any Required Permits require the signature of, or any action by, the Company or the Company Designee, the Company shall reasonably cooperate with the Operator (at the Operators expense) so that the Operator may obtain and maintain such Required Permits. The Operator shall not do anything in connection with the performance of its obligations under this Agreement that causes a termination or suspension of the Required Permits.
Section 10.2 Additional Operator Covenants. The Operator hereby:
(a) (i) confirms that it will post at the Terminal such reasonable placards as the Company or the Company Designee, as applicable, requests stating that the Company or the Company Designee is the owner of specific Products held at the Terminal; (ii) agrees that it will take all actions necessary to maintain such placards in place for the Term; and (iii) agrees to furnish documents reasonably acceptable to the Company, the Company Designee and their respective lenders and intermediators and to cooperate with the Company in ensuring and demonstrating that Product titled in the Companys or the Company Designees name shall not be subject to any lien on the Terminal;
(b) acknowledges and agrees that the Company or the Company Designee may file a UCC-1 or other financing statement with respect to the Products handled or throughput at the Terminal, and the Operator shall cooperate with the Company in executing such financing statements as the Company or the Company Designee deems necessary or appropriate;
(c) agrees that, subject to Section 4.3, no loss allowances shall be applied to the Products handled or throughput at the Terminal;
(d) agrees to maintain all necessary leases, easements, licenses and rights-of-way necessary for the operation and maintenance of the Terminal; and
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(e) agrees that, in the event of any Product spill, leak or discharge or any other environmental pollution caused by or in connection with the use of the Terminal, the Operator shall promptly commence containment or clean-up operations as required by any Governmental Authorities or Applicable Law or as the Operator deems appropriate or necessary and shall notify or arrange to notify the Company or the Company Designee immediately of any such spill, leak or discharge and of any such operations.
The Company and the Company Designee shall take all reasonable steps to cooperate with the Operator in connection with the Operators performance of each of the covenants in this Section 10.2, in each case, at the Operators sole expense.
Section 10.3 Additional Company Covenants. The Company hereby agrees:
(a) to replace or repair, at its own expense, any part of the Terminal that is destroyed or damaged through any negligence or willful misconduct of the Company, the Company Designee (acting in such capacity), any Customer, or any of their agents or employees (acting in such capacity), or any Company Inspector; and
(b) to not make any alteration, additions or improvements to the Terminal or remove any part thereof, without the prior written consent of the Operator, such consent to be at the Operators sole discretion .
Section 10.4 Existing Obligations. The execution of this Agreement by the Parties does not reduce any existing obligations of such Parties and does not confer any additional obligation or responsibility on the Company in connection with: (a) any existing or future environmental condition at the Terminal, including, the presence of a regulated or hazardous substance on or in environmental media at the Terminal (including the presence in surface water, groundwater, soils or subsurface strata, or air), including the subsequent migration of any such substance; (b) any Environmental Law; (c) the Required Permits; or (d) any requirements arising under or relating to any Applicable Law pertaining or relating to the ownership and operation of the Terminal.
Section 10.5 Records.
(a) Each Party shall (i) maintain the records required to be maintained by Applicable Law and shall make such records available to the other Party upon reasonable request and (ii) immediately notify the other Party of any violation or alleged violation of any Applicable Law relating to any Products throughput and handled under this Agreement and, upon request, shall provide to the other Party all evidence of environmental inspections or audits by any Governmental Authority with respect to such Products.
(b) All records or documents provided by any Party to any other Party shall, to the reasonable knowledge of the providing Party, accurately and completely reflect the facts about the activities and transactions to which they relate. Notwithstanding anything herein to the contrary, no Party shall be required to provide to the other Party any document that is determined by the disclosing Partys legal counsel to be protected by an attorney-client privilege or attorney work product doctrine. Each Party shall promptly notify the other Party if at any time such Party has reason to believe that any records or documents previously provided to the other Party are no longer accurate or complete.
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Article 11 Representations.
Section 11.1 Representations of the Operator. The Operator represents and warrants to the Company that (a) this Agreement, the rights obtained and the duties and obligations assumed by the Operator hereunder, and the execution and performance of this Agreement by the Operator, do not directly or indirectly violate any Applicable Law with respect to the Operator or any of its properties or assets, the terms and provisions of the Operators organizational documents or any agreement or instrument to which the Operator or any of its properties or assets are bound or subject; (b) the execution and delivery of this Agreement by the Operator has been authorized by all necessary action; (c) the Operator has the full and complete authority and power to enter into this Agreement and to provide the services hereunder; (d) no further action on behalf of the Operator, or consents of any other party, are necessary for the provision of services hereunder; and (e) upon execution and delivery by the Operator, this Agreement shall be a valid and binding agreement of the Operator enforceable in accordance with its terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors rights generally and subject, as to enforceability, to equitable principles of general application regardless of whether enforcement is sought in a proceeding in equity or at law).
Section 11.2 Representations of the Company. The Company represents and warrants to the Operator that (a) this Agreement, the rights obtained and the duties and obligations assumed by the Company hereunder, and the execution and performance of this Agreement by the Company, do not directly or indirectly violate any Applicable Law with respect to the Company or any of its property or assets, the terms and provisions of the Companys organizational documents or any agreement or instrument to which the Company or any of its property or assets are bound or subject; (b) the execution and delivery of this Agreement by the Company has been authorized by all necessary action; (c) the Company has the full and complete authority and power to enter into this Agreement; and (d) upon execution and delivery by the Company, this Agreement shall be a valid and binding agreement of the Company enforceable in accordance with its terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors rights generally and subject, as to enforceability, to equitable principles of general application regardless of whether enforcement is sought in a proceeding in equity or at law).
Article 12 Insurance.
The Operator, directly or through one of its or the Companys Affiliates, shall procure and maintain in full force and effect throughout the Term insurance in sufficient amounts and coverage to be in accordance with Prudent Industry Practice. Such policies shall be endorsed to name the Company and any Company Designee as a loss payee with respect to any of the Companys or the Company Designees Products in the care, custody or control of the Operator.
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Article 13 Force Majeure, Damage or Destruction.
Section 13.1 Force Majeure. In the event that a Party (the Force Majeure Party) is rendered unable, wholly or in part, by a Force Majeure event to perform its obligations under this Agreement, then such Party shall within a reasonable time after the occurrence of such event of Force Majeure deliver to the other Party written notice (a Force Majeure Notice) including full particulars of the Force Majeure event, and 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, however, that (a) prior to the second (2nd) anniversary of the Commencement Date, the Company shall be required to continue to make payments (i) for the Terminaling Service Fees for volumes actually throughput under this Agreement, (ii) for the Ancillary Services Fees, if any, for Ancillary Services performed, and (iii) for any Shortfall Payments unless, in the case of (iii), the Force Majeure event is an event that adversely affects the Operators ability to perform the Services (including making the Minimum Throughput Capacity available to the Company), in which case Shortfall Payments shall not be paid to the extent of the Force Majeure events effect on the Operators ability to perform the Services and the Terminaling Service Fees shall only be paid as provided under (a)(i) above, and (b) from and after the second (2nd) anniversary of the Commencement Date, the Company shall be required to continue to make payments (x) for the Terminaling Service Fees for volumes actually throughput under this Agreement and (y) for the Ancillary Services Fees, if any, for the Ancillary Services actually performed under this Agreement. 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). The Company shall be required to pay any amounts accrued and due under this Agreement at the time of the start of the Force Majeure event. The cause of the Force Majeure event shall so far as possible be remedied with all reasonable efforts, except that no Party shall be compelled to resolve any strikes, lockouts or other industrial or labor disputes other than as it shall determine to be in its best interests. Prior to the second (2nd) anniversary of the Commencement Date, any suspension of the obligations of the Parties under this Section 13.1 as a result of a Force Majeure event that adversely affects the Operators 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 13.2.
Section 13.2 Termination due to Force Majeure. 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 second (2nd) anniversary of the Commencement 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 (a) delivery of the Termination Notice and (b) the second (2nd) anniversary of the Commencement 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, and, 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 second (2nd) anniversary of the Commencement Date and following delivery of a Termination Notice, the Operator may terminate this Agreement, to the extent affected by the Force Majeure event, upon sixty (60) days prior written notice to the Company in order to enter into an agreement to provide any third party the services provided to the Company under this Agreement; provided, however, that the Operator shall not have the right to terminate this Agreement for so long as the Company continues to make Shortfall Payments.
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Article 14 Suspension of Refinery Operations.
Section 14.1 Suspension of Refinery Operations. From and after the second (2nd) anniversary of the Commencement Date, in the event that the Company decides to permanently or indefinitely suspend all or substantially all crude oil refining operations at the Refinery for a period that shall continue for at least twelve (12) consecutive months, the Company may provide written notice to the Operator of the Companys intent to terminate this Agreement (the Suspension Notice). Such Suspension Notice shall be sent at any time (but not prior to the second (2nd) anniversary of the Commencement Date) after the Company has notified the Operator 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 the Company notifies the Operator more than two (2) months prior to the expiration of the Notice Period of its intent to resume operations at the Refinery, then the Suspension Notice shall be deemed revoked and this Agreement shall continue in full force and effect as if such Suspension Notice had never been delivered. During the Notice Period, the Company shall remain liable for Shortfall Payments and all payments per Section 3.6 and Section 3.10 with respect of Capital Expenditures hereunder. Subject to Section 14.1 and after the fifth (5th) anniversary of the Commencement Date, during the Notice Period, the Operator may terminate this Agreement upon sixty (60) days prior written notice to the Company in order to enter into an agreement to provide any third party the services provided to the Company under this Agreement.
Section 14.2 Notice of Suspension. If all or substantially all refining operations at the Refinery are suspended for any reason (including refinery turnaround operations and other scheduled maintenance), then the Company shall remain liable for Shortfall Payments under this Agreement for the duration of the suspension, unless and until this Agreement is terminated as provided in Section 14.1. The Company shall provide at least ninety (90) days prior written notice whenever practical of any suspension of operations at the Refinery due to a planned turnaround or scheduled maintenance that affects or will affect the Services or the Ancillary Services; provided, however, that the Company shall not have any liability for any failure to notify, or delay in notifying, the Operator of any such suspension except to the extent the Operator has been materially damaged by such failure or delay.
Article 15 Right of First Refusal.
Section 15.1 Grant of ROFR. The Operator hereby grants to the Company a right of first refusal on any proposed Transfer (other than a grant of a security interest to a bona fide third-party lender or a Transfer to an Affiliate of the Operator) of any ROFR Asset; provided, however, that the Parties acknowledge and agree that nothing in this Article 15 shall prevent or restrict the Transfer of partnership interests, limited liability interests, equity or ownership interests or other securities of the Operator or create a right of first refusal as a result thereof; provided, further, that the Company may, without consent or approval from the Operator, assign its rights under this Article 15 to any Affiliate of the Company.
Section 15.2 Acknowledgement regarding Consents. The Parties acknowledge that all potential Transfers of ROFR Assets pursuant to this Article 15 are subject to obtaining any and all required written consents of Governmental Authorities and other third parties and to the terms of
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all existing agreements in respect of the ROFR Assets, as applicable; provided, however, that the Operator represents and warrants that, to its knowledge after reasonable investigation, there are no terms in such agreements that would materially impair the rights granted to the Company pursuant to this Article 15 with respect to any ROFR Asset.
Section 15.3 Procedures for Transfer of ROFR Asset.
(a) In the event the Operator proposes to Transfer any of the ROFR Assets (other than a grant of a security interest to a bona fide third-party lender or a Transfer to an Affiliate of the Operator) pursuant to a bona fide third-party offer (an Acquisition Proposal), then the Operator shall, prior to entering into any such Acquisition Proposal, first give notice in writing to the Company (a Disposition Notice) of its intention to enter into such Acquisition Proposal. The Disposition Notice shall include any material terms, conditions and details as would be necessary for the Company to determine whether to exercise its right of first refusal with respect to the Acquisition Proposal, which terms, conditions and details shall at a minimum include: the name and address of the prospective acquirer (the Proposed Transferee), the ROFR Assets subject to the Acquisition Proposal (the Sale Assets), the purchase price offered by such Proposed Transferee (the Offer Price), reasonable detail concerning any non-cash portion of the proposed consideration, if any, to allow the Company to reasonably determine the fair market value of such non-cash consideration, the Operators estimate of the fair market value of any non-cash consideration and all other material terms and conditions of the Acquisition Proposal that are then known to the Operator. To the extent the Proposed Transferees offer consists of consideration other than cash (or in addition to cash), the Offer Price shall be deemed equal to the amount of any such cash plus the fair market value of such non-cash consideration. In the event the Company and the Operator are able to agree on the fair market value of any non-cash consideration or if the consideration consists solely of cash, the Company will provide written notice of its decision regarding the exercise of its right of first refusal to purchase the Sale Assets (the ROFR Response) to the Operator within sixty (60) days of its receipt of the Disposition Notice (the First ROFR Acceptance Deadline). In the event the Company and the Operator are unable to agree on the fair market value of any non-cash consideration prior to the First ROFR Acceptance Deadline, the Company shall indicate its desire to determine the fair market value of such non-cash consideration pursuant to the procedures outlined in the remainder of this Section 15.3 in a ROFR Response delivered prior to the First ROFR Acceptance Deadline. If no ROFR Response is delivered by the Company prior to the First ROFR Acceptance Deadline, then the Company shall be deemed to have waived its right of first refusal with respect to such Sale Asset. In the event (i) the Companys determination of the fair market value of any non-cash consideration described in the Disposition Notice is less than the fair market value of such consideration as determined by the Operator in the Disposition Notice and (ii) the Company and the Operator are unable to mutually agree upon the fair market value of such non-cash consideration within sixty (60) days after the Company notifies the Operator of its determination thereof, the Operator and the Company will engage a mutually agreed upon, nationally recognized investment banking firm that is not currently engaged in business with either of the Parties to determine the fair market value of the non-cash consideration. In the event the Parties are unable to agree upon an investment banking firm, each Party will select a nationally recognized investment banking firm, and the two investment banking firms so chosen will select a third investment banking firm to serve as the investment banking firm for purposes of this Article 15. The investment banking firm will determine the fair market value of the non-cash consideration within thirty (30) days of its
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engagement and furnish the Company and the Operator its determination. The fees of the investment banking firm will be split equally between Parties. Once the investment banking firm has submitted its determination of the fair market value of the non-cash consideration, the Company will provide a ROFR Response to the Operator within thirty (30) days after the investment banking firm has submitted its determination (the Second ROFR Acceptance Deadline and together with the First ROFR Acceptance Deadline, the ROFR Acceptance Deadlines). If no ROFR Response is delivered by the Company prior to the Second ROFR Acceptance Deadline, then the Company shall be deemed to have waived its right of first refusal with respect to such Sale Asset.
(b) If the Company elects in a ROFR Response delivered prior to the First ROFR Acceptance Deadline or Second ROFR Acceptance Deadline, as applicable, to exercise its right of first refusal with respect to a Sale Asset, within sixty (60) days of the delivery of the ROFR Response, such ROFR Response shall be deemed to have been accepted by the Operator and the Operator shall thereafter enter into a purchase and sale agreement with the Company providing for the consummation of the Acquisition Proposal upon the terms set forth in the ROFR Response. Unless otherwise agreed between the Company and the Operator, the terms of the purchase and sale agreement will include the following:
(i) the Company will agree to deliver the Offer Price in cash (unless the Company and the Operator agree that such consideration will be paid, in whole or in part, in equity securities of the Company or of an Affiliate of the Company, an interest-bearing promissory note or similar instrument, or any combination thereof);
(ii) the Operator will represent that it has valid fee or leasehold title, as applicable, to the Sale Asset that is sufficient to operate the Sale Assets in accordance with their historical use, subject to all recorded matters and all physical conditions in existence on the closing date for the purchase of the applicable Sale Asset, plus any other such matters as the Company may approve (and if the Company desires to obtain any title insurance with respect to the Sale Asset, the full cost and expense of obtaining the same (including the cost of title examination, document duplication and policy premium) shall be borne by the Company);
(iii) the Operator will grant to the Company the right, exercisable at the Companys risk and expense prior to the delivery of the ROFR Response, to make such surveys, tests and inspections of the Sale Asset as the Company may deem desirable, so long as such surveys, tests or inspections are neither destructive nor invasive and do not damage the Sale Asset or interfere with the activities of the Operator;
(iv) the Company will have the right to terminate its obligation to purchase the Sale Asset under this Article 15 if the results of any searches under Section 15.3(b)(ii) or (iii) above are, in the reasonable opinion of the Company, unsatisfactory;
(v) the closing date for the purchase of the Sale Asset shall occur no later than one hundred eighty (180) days following receipt by the Operator of the ROFR Response pursuant to Section 15.3(a);
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(vi) the Operator and the Company shall use commercially reasonable efforts to do or cause to be done all things that may be reasonably necessary or advisable to effectuate the consummation of any transactions contemplated by this Section 15.3(b), including causing its respective Affiliates to execute, deliver and perform all documents, notices, amendments, certificates, instruments and consents required in connection therewith;
(vii) except to the extent modified in the Acquisition Proposal, the sale of any Sale Assets shall be made on an as is, where is and with all faults basis, and the instruments conveying such Sale Assets shall contain appropriate disclaimers; and
(viii) neither the Operator nor the Company shall have any obligation to sell or buy the Sale Assets if any of the consents referred to in Section 15.2 has not been obtained.
(c) The Company and the Operator shall cooperate in good faith in obtaining all necessary governmental and other third-party approvals, waivers and consents required for the closing of the purchase and sale agreement described in Section 16.1(b). Any such closing shall be delayed, to the extent required, until the third (3rd) Business Day following the expiration of any required waiting periods under the Hart-Scott-Rodino Act; provided, however, that such delay shall not exceed sixty (60) days following the one hundred eighty (180) days referred to in Section 15.3(b)(v) (the ROFR Governmental Approval Deadline) and, if governmental approvals and waiting periods shall not have been obtained or expired, as the case may be, by such ROFR Governmental Approval Deadline, then the Company shall be deemed to have waived its right of first refusal with respect to the Sale Assets described in the Disposition Notice and thereafter the Operator shall be free to consummate the Transfer to the Proposed Transferee, subject to Section 15.3(d)(ii).
(d) If the Transfer to the Proposed Transferee (i) in the case of a Transfer other than a Transfer permitted under Section 15.3(c), is not consummated in accordance with the terms of the Acquisition Proposal within the later of (A) one hundred eighty (180) days after the applicable ROFR Acceptance Deadline and (B) three (3) Business Days after the satisfaction of all governmental approval or filing requirements, if any, or (ii) in the case of a Transfer permitted under Section 15.3(c), is not consummated within the later of (A) sixty (60) days after the ROFR Governmental Approval Deadline and (B) three (3) Business Days after the satisfaction of all governmental approval or filing requirements, if any, then in each case the Acquisition Proposal shall be deemed to lapse, and the Operator may not Transfer any of the Sale Assets described in the Disposition Notice without complying again with the provisions of this Article 15 if and to the extent then applicable.
Article 16 Shutdown or Idling of Refinery.
Section 16.1 Shutdown or Idling of Refinery. In the event of a Permanent Refinery Shutdown, the Operator shall have the right to purchase the assets identified in Exhibit D and such other assets as the Operator reasonably determines in good faith to be necessary to operate the Terminal (the Designated Refinery Assets) at their fair market value at the time of sale in accordance with this Section 16.1.
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(a) A Permanent Refinery Shutdown shall be deemed to have occurred upon the earlier of (i) the cessation of all or substantially all commercial operation of the Refinery with no current intent on the part of the Company to resume all or substantially all commercial operation thereof or (ii) a change to the Refinerys current SIC code (i.e., 4610) applicable to crude oil refining. The Company shall exercise commercially reasonable efforts to provide the Operator with at least sixty (60) days advance notice of a Permanent Refinery Shutdown.
(b) The Operator may at any time during the two-year period following notice of a Permanent Refinery Shutdown exercise its purchase option pursuant to this Article 16 (the Refinery Asset Purchase Option) by providing written notice (a Refinery Asset Option Notice) to the Company. Promptly upon receipt of such Refinery Asset Option Notice, the Company shall provide the Operator and its designees with access to such information regarding the Designated Refinery Assets as shall be reasonable and customary for the Operator to conduct diligence in accordance with Prudent Industry Practice on assets such as the Designated Refinery Assets. The Operator shall have a period of not less than ninety (90) days to evaluate such information.
(c) The Operator and the Company shall, for a period of thirty (30) days following completion of Operators diligence in accordance with Prudent Industry Practice, negotiate in good faith to reach agreement on the terms for a purchase of the Designated Refinery Assets by the Operator; provided, however, that the Parties agree that: (i) the terms (including price) of any such purchase and sale will be on terms customary for the sale of assets of this nature and otherwise agreeable to both the Operator and the Company; (ii) the purchase price shall be paid at closing in cash; (iii) the Company shall not be obligated to make any representations as to the condition of the Designated Refinery Assets or any portion thereof; (iv) the Operator shall not be required to purchase the real property on which the Designated Refinery Assets are located (in which case the Operator shall be entitled to lease or be granted easements to all or a portion of such real property); (v) the Company shall convey all operating and maintenance records reasonably necessary for the operation of the Designated Refinery Assets; and (vi) the Company shall convey the Designated Refinery Assets free and clear of any charge, claim, covenant, equitable interest, equitable servitude, lien, option, pledge security interest, right of first refusal, or other restriction of any kind, including any restriction on use, transfer, receipt of income, or exercise of any other attribute of ownership; provided, however, that the Company shall receive a reasonable easement with respect to the Designated Refinery Assets in order to access such Designated Refinery Assets in connection with the Company or its Affiliates potential refining operations.
(d) If the Operator and the Company are unable to agree on the terms (including price) for a sale of the Designated Refinery Assets, the Operator and the Company shall engage a mutually agreed upon, nationally recognized investment banking firm to determine any terms (including price) as to which the Parties are unable to agree with respect to the sale of the Designated Refinery Assets. In the event the Parties are unable to agree upon an investment banking firm, each Party will select a nationally recognized investment banking firm, and the two investment banking firms so chosen will select a third investment banking firm to serve as the investment banking firm for purposes of this Section 16.1. The investment banking firm shall: (i) base the terms of purchase and sale on those that are reasonable and customary for the sale of industrial assets such as the Designated Refinery Assets, subject to the provisions of this Section 16.1; (ii) determine the fair market value of the Designated Refinery Assets based on their then-current operations; and (iii) consider the age, condition, maintenance history, replacement cost, ongoing operating costs, regulatory enforcement actions or fines in effect and other factors the investment banking firm considers relevant to fair market value.
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(e) All fees of the investment banking firm incurred in connection with the Refinery Asset Purchase Option will be split equally between the Operator and the Company.
(f) Once the investment banking firm resolves all terms of the sale regarding the Refinery Asset Purchase Option that the Parties are unable to agree upon, the Operator will have the right, but not the obligation, for a period of ninety (90) days from the investment banking firms resolution (such period, the Refinery Asset Option Period) to purchase the Designated Refinery Assets on terms (including price) agreed to by the Parties (as supplemented by any terms determined by the investment banking firm). The Operator shall notify the Company, in writing delivered during the Refinery Asset Option Period, of its intention to purchase the Designated Refinery Assets. Failure to provide such notice within the Refinery Asset Option Period shall be deemed to constitute a decision by the Operator not to exercise its Refinery Asset Purchase Option.
(g) If the Operator notifies the Company in writing during the Refinery Asset Option Period of its intention to exercise its Refinery Asset Purchase Option, both Parties shall be obligated to enter into an agreement incorporating the terms (including price) either agreed to by the Parties or determined by the investment banking firm. If the Operator fails to execute and deliver such an agreement within sixty (60) days of expiration of the Refinery Asset Option Period, the Operators Refinery Asset Purchase Option shall be deemed to have lapsed.
Article 17 Event of Default: Remedies Upon Event of Default.
Section 17.1 Event of Default. Notwithstanding any other provision of this Agreement, but subject to Article 26, the occurrence of any of the following shall constitute an Event of Default:
(a) any Party fails to make payment when due (i) under Article 3 within five (5) Business Days after a written demand therefor or (ii) under any other provision hereof within seven (7) Business Days;
(b) other than a default described in Sections 17.1(a) or 17.1(c), if the Company or the Operator fails to perform any material obligation or covenant to the other under this Agreement, which is not cured to the reasonable satisfaction of any other Party within fifteen (15) Business Days after the date that such Party receives written notice that such obligation or covenant has not been performed;
(c) any Party breaches any representation or warranty made by such Party hereunder, or such warranty or representation proves to have been incorrect or misleading in any material respect when made; provided, however, that if such breach is curable, such breach is not cured to the reasonable satisfaction of the other Party within fifteen (15) Business Days after the date that such Party receives notice that corrective action is needed;
(d) any Party files a petition or otherwise commences or authorizes the commencement of a proceeding or case under any bankruptcy, reorganization or similar law for the protection of creditors, or have any such petition filed or proceeding commenced against it and such proceeding is not dismissed for sixty (60) days; and
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(e) the Operator sells or permits the creation of, or suffers to exist any security interest, lien, encumbrance, charge or other claim of any nature (other than Permitted Liens or liens or liens that existed with respect to such Product prior to the throughput by the Company or the Company Designee hereunder) with respect to any of the Products.
Section 17.2 Termination in the Event of Default. Except as set forth in Section 17.1(d), without limiting any other provision of this Agreement, if an Event of Default with respect to the Company or the Operator (such defaulting Party, the Defaulting Party) has occurred and is continuing, the Non-Defaulting Party shall have the right, immediately and at any time(s) thereafter, to terminate this Agreement upon written notice to the Defaulting Party.
Section 17.3 Other Remedies. Without limiting any other rights or remedies hereunder, if an Event of Default occurs and the Company is the Non-Defaulting Party, the Company may, in its discretion, (a) withhold or suspend its obligations, including any of its delivery or payment obligations, under this Agreement, (b) reclaim and repossess any and all of its Products held at the Terminal or elsewhere on the Operators premises, and (c) otherwise arrange for the disposition of any of its Products in such manner as it elects.
Section 17.4 Set Off. If an Event of Default occurs, the Non-Defaulting Party may, without limitation on its rights under this Article 17, set off amounts which the Defaulting Party owes to it against any amounts which it owes to the Defaulting Party (whether hereunder, under any other agreement or contract or otherwise and whether or not then due). Any net amount due hereunder shall be payable by the Party owing such amount within one (1) Business Day of termination.
Section 17.5 No Preclusion of Rights. The Non-Defaulting Partys rights under this Section 17.5 shall be in addition to, and not in limitation of, any other rights which the Non-Defaulting Party may have (whether by agreement, operation of law or otherwise), including any rights of recoupment, setoff, combination of accounts, as a secured party or under any other credit support. The Defaulting Party shall indemnify and hold the Non-Defaulting Party harmless from all costs and expenses, including reasonable attorney fees, incurred in the exercise of any remedies hereunder.
Article 18 Indemnification.
Section 18.1 Indemnification by Operator. The Operator shall defend, indemnify and hold harmless the Company, the Company Designee, their respective Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the Company Indemnitees) from and against any Liabilities directly or indirectly arising out of (a) any breach by the Operator of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of the Operator made herein or in connection herewith proving to be false or misleading, (b) any failure by the Operator, its Affiliates or any of their respective employees, representatives, agents or contractors to comply with or observe any Applicable Law, or (c) injury, disease, or death of any Person or
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damage to or loss of any property, fine or penalty, any of which is caused by the Operator, 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 or transportation of any Products hereunder, except to the extent of the Companys obligations under Section 18.2 below, and except to the extent that such injury, disease, death, or damage to or loss of property, fine or penalty was caused by the gross or sole negligence or willful misconduct on the part of the Company Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, the Operators liability to the Company Indemnitees pursuant to this Section 18.1 shall be net of any insurance proceeds actually received by the Company Indemnitees or any of their respective Affiliates from any third party with respect to or on account of the damage or injury which is the subject of the indemnification claim. The Company agrees that it shall, and shall cause the other Company Indemnitees to, (i) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Company Indemnitees are entitled with respect to or on account of any such damage or injury, (ii) notify the Operator of all potential claims against any third party for any such insurance proceeds, and (iii) keep the Operator fully informed of the efforts of the Company Indemnitees in pursuing collection of such insurance proceeds.
Section 18.2 Indemnification by Company. The Company shall defend, indemnify and hold harmless the Operator, its Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the Operator Indemnitees) from and against any Liabilities directly or indirectly arising out of (a) any breach by the Company of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of the Company made herein or in connection herewith proving to be false or misleading, (b) any personal injury incurred by any representative of the Company or the Company Designee (including any Supplier Inspector or Company Inspector) while on the Operators property, (c) any failure by the Company, the Company Designee, their respective Affiliates or any of their respective employees, representatives (including any Supplier Inspector or Company Inspector), agents or contractors to comply with or observe any Applicable Law, or (d) injury, disease, or death of any Person or damage to or loss of any property, fine or penalty, any of which is caused by the Company, the Company Designee, their respective Affiliates or any of their respective employees, representatives (including any Supplier Inspector or Company Inspector), agents or contractors in the exercise of any of the rights granted hereunder or the refining or storage of any Products hereunder, except to the extent of the Operators obligations under Section 18.1 above, and except to the extent that such injury, disease, death, or damage to or loss of property, fine or penalty was caused by the gross or sole negligence or willful misconduct on the part of the Operator Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, the Companys liability to the Operator Indemnitees pursuant to this Section 18.2 shall be net of any insurance proceeds actually received by the Operator Indemnitees or any of their respective Affiliates from any third party with respect to or on account of the damage or injury which is the subject of the indemnification claim. The Operator agrees that it shall, and shall cause the other Operator Indemnitees to, (i) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Operator Indemnitees are entitled with respect to or on account of any such damage or injury, (ii) notify the Company of all potential claims against any third party for any such insurance proceeds, and (iii) keep the Company fully informed of the efforts of the Operator Indemnitees in pursuing collection of such insurance proceeds.
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Section 18.3 EXPRESS REMEDY. 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.
Article 19 Limitation on Damages.
Notwithstanding anything to the contrary contained herein, neither Party shall be liable or responsible to the other Party or such other Partys affiliated Persons for any consequential, punitive, special, incidental 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, however, that the foregoing limitation is not intended and shall not affect Special Damages in connection with any third-party claim or imposed in favor of unaffiliated Persons that are not Parties to this Agreement; provided, further, that to the extent an indemnitor hereunder receives insurance proceeds with respect to Special Damages that would be indemnified hereunder if not for this Article 19, such indemnitor shall be liable up to the amount of such insurance proceeds (net any deductible and premiums paid with respect thereto).
Article 20 Confidentiality.
Section 20.1 Obligations. Each Party shall use commercially reasonable efforts to retain the other Partys Confidential Information in confidence and not disclose the same to any third party (other than a Company Designee, provided the Company Designee has agreed to adhere to this Article 20, or any Receiving Party Personnel) nor use the same, except as authorized by the disclosing Party in writing or as expressly permitted in this Section 20.1. Each Party further agrees to take the same care with the other Partys Confidential Information as it does with its own, but in no event less than a reasonable degree of care.
Section 20.2 Required Disclosure. Notwithstanding Section 20.1 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 Partys 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 Partys Confidential Information that it is required to disclose and shall reasonably cooperate with the disclosing Party (at the disclosing Partys cost) in allowing the disclosing Party to obtain such protective order or other relief.
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Section 20.3 Return and Destruction of Information. Upon written request by the disclosing Party, all of the disclosing Partys 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 Partys 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 Partys customary procedures and policies; provided, however, that notwithstanding any termination or expiration of this Agreement, any Confidential Information retained by the receiving Party shall be maintained subject to confidentiality pursuant to the terms of this Section 20.3, and such archived or back-up Confidential Information shall not be accessed except as required by Applicable Law for so long as such Confidential Information is retained.
Section 20.4 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 provisions 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.
Section 20.5 Survival. The obligation of confidentiality under this Article 20 shall survive the termination of this Agreement for a period of two (2) years.
Article 21 Choice of Law.
This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Subject to Article 26, the Parties agree to the venue and jurisdiction of the federal or state courts located in the State of Delaware for the adjudication of all disputes arising out of this Agreement.
Article 22 Assignment.
Section 22.1 Assignment by the Company. Except as set forth in this Article 22, the Company shall not assign its rights or obligations hereunder without the Operators prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that (a) the Company may assign this Agreement without the Operators consent in connection with a sale by the Company of its inventory of Products, or 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 the Companys obligations under this Agreement; and (ii) is financially and
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operationally capable of fulfilling the terms of this Agreement, which determination shall be made by the Company in its reasonable judgment; and (b) the Company shall be permitted to make a collateral assignment of this Agreement solely to secure financing for itself or any of its Affiliates.
Section 22.2 Company Designee.
(a) Without the Operators consent, the Company shall be permitted to assign the Companys rights to use, hold the Products in, and transport the Products through, the Terminal pursuant to this Agreement, to the Company Designee.
(b) The Company shall act as the Company Designees counterparty for all purposes of this Agreement, and the Operator shall be entitled to follow the Companys instructions with respect to all of the Company Designees Products that are transported or handled by the Operator pursuant to this Agreement unless and until the Operator is notified by the Company Designee in writing that the Company is no longer authorized to act as the Company Designees counterparty, in which case the Operator shall thereafter follow the instructions of the Company Designee (or such other agent as the Company Designee may appoint) with respect to all the Company Designees Products that are transported or handled by the Operator pursuant to this Agreement. The Company shall be responsible for all the Company Designees payments to the Operator hereunder; provided, however, that the Operator shall accept payment in connection with this Agreement directly from any Company Designee and apply such payments against amounts owed by the Company hereunder. All volumes throughput by the Company Designee will be taken into account in the determination of whether the Company has satisfied its Minimum Throughput Commitment. During any time that this Agreement is assigned to the Company Designee, all provisions of this Agreement, as amended or adjusted by this Article 22, shall be in full force and effect with respect to the Company Designee and the Company Designees Products as if the Company Designee were Party hereto in place of the Company.
Section 22.3 Assignment by the Operator. The Operator shall not assign its rights or obligations under this Agreement without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that (a) subject to Article 15 hereof and Article VI of the Omnibus Agreement, the Operator may assign this Agreement without such consent in connection with a sale by the Operator of all or substantially all of the Terminal, including by merger, equity sale, asset sale or otherwise, so long as the transferee: (i) agrees to assume all of the Operators obligations under this Agreement; (ii) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by the Operator in its reasonable judgment; and (iii) is not a competitor of the Company, as determined by the Company in good faith; and (b) the Operator shall be permitted to make a collateral assignment of this Agreement solely to secure financing for the Operator and its Affiliates.
Section 22.4 Terms of Assignment. 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. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.
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Section 22.5 Change of Control. The Parties obligations hereunder shall not terminate in connection with a Change of Control; provided, however, that in the case of a Change of Control, the Company shall have the option to extend the Term as provided in Section 2.1.
Article 23 Notices.
All notices, requests, demands, and other communications hereunder will 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 or UPS, one (1) Business Day after deposit therewith prepaid; or (d) if by email, one (1) Business Day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows:
If to the Company:
PBF Holding Company LLC
One Sylvan Way, Second Floor
Parsippany, NJ 07054
Attn: Matthew Lucey, President
Telecopy No: (973)  ###-###-####
Email: ***@***
with a copy, which shall not constitute notice, to:
PBF Energy Company LLC
One Sylvan Way, Second Floor
Parsippany, NJ 07054
Attn: Jeffrey Dill, General Counsel
Telecopy No: (973)  ###-###-####
Email: ***@***
If to the Operator:
Delaware City Logistics Company LLC
c/o PBF Logistics GP LLC
222 Lakeview Avenue, Suite 1510
West Palm Beach, FLA 33401
Attn: Todd OMalley, President
Telecopy No: (561)  ###-###-####
Email: ***@***
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with a copy, which shall not constitute notice, to:
PBF Logistics GP LLC
One Sylvan Way, Second Floor
Parsippany, NJ 07054
Attn: Jim Fedena, Senior VP, Logistics
Telecopy No: (973)  ###-###-####
Email: ***@***
or to such other address or to such other person as either Party will have last designated by notice to the other Party.
Article 24 No Waiver; Cumulative Remedies.
Section 24.1 No Waivers. The failure of a Party hereunder to assert a right or enforce an obligation of the other Party shall not be deemed a waiver of such right or obligation. The waiver by any Party of a breach of any provision of, or Event of Default under, this Agreement shall not operate or be construed as a waiver of any other breach of that provision or as a waiver of any breach of another provision of, Event of Default or potential Event of Default under, this Agreement, whether of a like kind or different nature.
Section 24.2 Cumulative Remedies. Each and every right granted to the Parties under this Agreement or allowed it by law or equity, shall be cumulative and may be exercised from time to time in accordance with the terms thereof and Applicable Law.
Article 25 Nature of Transaction and, Relationship of Parties.
Section 25.1 Independent Contractor. This Agreement shall not be construed as creating a partnership, association or joint venture among the Parties. It is understood that the Operator is an independent contractor with complete charge of its employees and agents in the performance of its duties hereunder, and nothing herein shall be construed to make the Operator, or any employee or agent of the Operator, an agent or employee of the Company.
Section 25.2 No Agency. No Party shall have the right or authority to negotiate, conclude or execute any contract or legal document with any third person in the name of the other Party; to assume, create, or incur any liability of any kind, express or implied, against or in the name of any of the other Party; or to otherwise act as the representative of the other Party, unless expressly authorized in writing by the other Party.
Article 26 Arbitration Provision.
Any and all Arbitrable Disputes (except to the extent injunctive relief is sought) shall be resolved through the use of binding arbitration using, in the case of an Arbitrable Dispute involving a dispute of an amount equal to or greater than $1,000,000 or non-monetary relief, three arbitrators, and in the case of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, one arbitrator, in each case in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any
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procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Article 26 and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Article 26 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 Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimants notice initiating binding arbitration must identify the arbitrator Claimant has appointed. Respondent shall respond to Claimant within thirty (30) days after receipt of Claimants notice, identifying the arbitrator Respondent has appointed. If 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 Respondents account. The two arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed, and, in the of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, such third arbitrator shall act as the sole arbitrator, and the sole role of the first two arbitrators shall be to appoint such third arbitrator. Claimant will pay the compensation and expenses of the arbitrator named by or for it, and 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. Claimant and Respondent will each pay one-half of the compensation and expenses of the third arbitrator. All arbitrators must (a) be neutral parties who have never been officers, directors or employees of the Operator, the Company or any of their Affiliates and (b) have not less than seven (7) years experience in the energy industry. The hearing will be conducted in the State of Delaware or the Philadelphia Metropolitan area and commence within thirty (30) days after the selection of the third arbitrator. The Company, the Operator 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. Notwithstanding anything herein the contrary, the Company may not dispute any amounts with respect to an invoice delivered in accordance with Section 3.8 that the Company has not objected to within one hundred twenty (120) days of receipt thereof. No Event of Default shall occur if the subject matter underlying such potential Event of Default is the subject matter of any dispute that is pending resolution or arbitration under this Article 26 until such time that such dispute is resolved in accordance with this Article 26.
Article 27 General.
Section 27.1 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.
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Section 27.2 Entire Agreement. This Agreement, the Operation and Management Services and Secondment Agreement and the Omnibus Agreement together constitute the entire agreement among the Parties pertaining to the subject matter hereof and supersede all prior agreements and understandings of the Parties in connection therewith. No promise, representation or inducement has been made by any of the Parties concerning the subject matter of this Agreement and none of the Parties shall be bound by or liable for any alleged representation, promise or inducement not so set forth.
Section 27.3 Time is of the Essence. Time is of the essence with respect to all aspects of each Partys performance of any obligations under this Agreement.
Section 27.4 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; provided, however, that upon written request from the Company, this Agreement will be amended by the Parties to make any Company Designee or lender or intermediator of the Company or any Company Designee a third-party beneficiary hereof.
Section 27.5 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.
Section 27.6 Survival. All audit rights, payment, confidentiality and indemnification obligations under this Agreement shall survive the expiration or termination of this Agreement in accordance with their terms.
Section 27.7 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.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement on the date first set forth above.
COMPANY:
PBF HOLDING COMPANY LLC | ||
By: | /s/ Jeffrey Dill |
Name: | Jeffrey Dill |
Title: | Secretary |
OPERATOR:
DELAWARE CITY LOGISTICS COMPANY LLC | ||
By: | /s/ James Fedena |
Name: | James Fedena |
Title: | Senior Vice President |
SIGNATURE PAGE TO THE DELAWARE CITY TRUCK LOADING SERVICES AGREEMENT
Exhibit A
Ancillary Services Fees
NONE
Service | Fee or Specification | |||
1. | NONE | NONE |
If any Ancillary Services are requested by the Company and are agreed to be provided by the Operator in accordance with the Agreement, the Parties shall mutually agree upon the appropriate rates to be charged for such services and to amend this Exhibit A.
EXHIBIT A
A-1
Exhibit B
Product Specifications
Product:
| Gasoline, diesel and heating oil: Terminal Product Specifications shall meet the then current ASTM specifications (Maryland) |
| Propane: Terminal specification shall meet the then current Company specification for Commercial Propane |
| Propylene: Terminal specification shall meet the then current customer specification (initially Braschem) |
| Ethanol: Specifications Contained in ASTM D 4806 Standard Specification for Denatured Fuel Ethanol for Blending with Gasoline |
| Mercaptan; specification shall be ethyl mercaptan purity of 99% or higher |
EXHIBIT C
B-1
Exhibit C
Terminal Access Obligations and Procedures
Company and Company Designee, and their customers, hereinafter referred to as Customers desire access to the Terminal to permit Operator to load Product at the Terminal.
Each of the Customers designated by Company that require access to the Terminal shall sign a Customer Facility Access Agreement, in the form designated by Operator and attached hereto as may be amended, supplemented or replaced from time to time by the Operator (the Customer Facility Access Agreement), prior to being granted access to the Terminal. Further, each Customer shall attach to its Customer Facility Access Agreement, a list of its designated agents, hereinafter referred to as Customer Agents which Customer authorizes to load Products at the Terminal on Customers behalf. A form Customer Facility Access Agreement is attached as Exhibit C-1 on pages C-3 through C-7.
Each Customer Agent shall sign a Carrier Access Agreement, in the form designated by Operator and attached hereto (the Carrier Access Agreement). The fully executed Carrier Access Agreement and a copy of the required Insurance Certificate of Liability Insurance, described therein, shall be provided to the Operator before the Customer Agent will be allowed access to the Terminal. A form Carrier Access Agreement is attached as Exhibit C-2 on pages C-8 through C-17.
Company acknowledges that Operator would not be willing to provide its Customers with access to the Facility absent Company assuming responsibility for each Customer. Company agrees to be responsible for all of the terms and conditions set forth in the Customer Facility Access Agreement of each Customer, and to cause to be performed each and all obligations of the Customers under and pursuant to the terms and conditions of Customer Facility Access Agreement.
Company expressly waives any legal obligation, duty, or necessity for Operator to proceed first against Customer or to exhaust any remedy Operator may have against Customers, it being agreed that in the event of default or failure of performance in any respect by Customers, Operator may proceed and have right of action solely against Company or Customers or jointly against Company and Customers.
EXHIBIT C
C-2
EXHIBIT C-1
DELAWARE CITY LOGISTICS COMPANY LLC
CUSTOMER FACILITY ACCESS AGREEMENT
This Agreement, entered into as of this day of , , by and between Delaware City Logistics Company LLC with a business address at 4550 Wrangle Hill Road, Delaware City, DE, 19706 hereinafter referred to as Company, and with its principal business address at , hereinafter referred to as Customer.
Customers Federal Employer Identification Number (FEIN) is .
Customers phone # is and fax # is , contact person is, and SCAC code number is .
Company owns and operates a petroleum truck loading facility adjacent to the Delaware City refinery with equipment for loading and unloading products into or from transport trucks, hereinafter identified as Facility and is in the business of the storage and distribution of petroleum products, hereinafter referred to as Products. Customer and its agents it has designated on the attached Exhibit A, hereinafter referred to as Agents, desire access to the Terminal for purposes of transporting Products to and from the Terminal.
Now, therefore, in consideration of the mutual covenants and agreements hereinafter set forth to be faithfully kept and performed, the receipt and adequacy of which is expressly agreed to, the parties hereto agree as follows:
1. Each of the Agents designated by Customer on Exhibit A shall sign a Carrier Terminal Access and Loading Agreement, in the form of Exhibit B, prior to being granted access to the Terminal.
EXHIBIT C
C-3
2. Customer, jointly and severally, agrees to be responsible for all of the terms and conditions shown on Exhibit B for each Agent listed on Exhibit A, and to cause to be performed each and all obligations of the Agents under and pursuant to the terms and conditions of Exhibit B.
3. Customer expressly waives any legal obligation, duty, or necessity for Company to proceed first against Agents or to exhaust any remedy Company may have against Agents, it being agreed that in the event of default or failure of performance in any respect by Agents, Company may proceed and have right of action solely against Customer or Agents or jointly against Customer and Agents.
4. This Agreement shall continue during the entire term of any Exhibit B entered into by an Agent and any renewals or extensions thereof or until Company receives written notice of termination of an Agent by the Customer.
5. Company reserves the right to revoke access at any time. Access to the Terminal is not transferrable. Agents may not be added to this Agreement except upon written amendment.
6. In the event suit or action is brought upon and in connection with the enforcement of this Agreement, Customer shall pay reasonable attorneys fees and all court costs incurred by Company. User does hereby further agree that in the event suit or action be brought upon this Agreement, each suit or action shall be brought in any court of competent jurisdiction within the state that the premises described in the Terminal is located and do herewith submit themselves to the jurisdiction of such court upon the happening of such event.
EXHIBIT C
C-4
In Witness whereof, this Agreement is executed as of the day and year first above written.
DELAWARE CITY LOGISTICS COMPANY, LLC. | ||
By: |
Printed Name: |
Title: |
Customer: |
By: |
Printed Name: |
Title: |
Carrier Responsibility Agreement
Exhibit A
EXHIBIT C
C-5
The following are designated haulers of the Customer | ||||
CARRIER ACCESS AGREEMENT
EXHIBIT B
[INSERT]
EXHIBIT C
C-6
DELAWARE CITY LOGISTICS COMPANY LLC
DELAWARE CITY TRUCK RACK
CARRIER TERMINAL ACCESS AND LOADING AGREEMENT
This Carrier Terminal Access and Loading Agreement (Agreement) is entered into by and between the Delaware City Logistics Company LLC a Delaware limited liability company, hereinafter referred to as Company with offices at 4550 Wrangle Hill Road, Delaware City, DE, 19706 and the party listed below, hereinafter referred to as Carrier.
Carrier Company: |
State of Incorporation: |
Address: |
Standard Carrier Alpha Code (SCAC): |
Federal Employee Identification Number (FEIN): |
Agreement Effective Date: |
WITNESSETH:
Company conducts business at a bulk petroleum distribution loading and unloading facility hereinafter referred to as Terminal from which it makes available products to customers and customers carriers. Carrier, among other activities, is engaged in loading, unloading, handling and transporting such products from the Terminal for distribution and is desirous of having access to the Terminal for the purpose of loading or unloading cargoes into or from transport vehicles and driving such vehicles away from the Terminal. Product is defined as any hydrocarbon, petrochemical or product or material which arises from the processing of fossil fuels such as crude oil, coal, natural gas, etc., regardless of ownership of Product. Company is agreeable to granting such rights and privileges subject to the terms and conditions hereinafter set forth.
Now, therefore, in consideration of the mutual covenants and agreements hereinafter set forth to be faithfully kept and performed, and further, in consideration of the benefits and advantages flowing to Company and to Carrier, which consideration the sufficiency and adequacy of is hereby agreed to, the parties agree as follows:
1. TERM OF AGREEMENT:
The term of this Agreement is from the effective date first above written for one (1) year, and year to year thereafter, subject to Companys rights to terminate and revoke the permission granted herein. The privileges granted herein are temporary in nature and may be terminated by either Company or Carrier in their sole and absolute discretion at any time and for any reason by service of notice (verbal or written) on the effective date of such termination. If such notice is given verbally, a written confirmation shall be delivered in accordance with the terms of this Agreement and Carrier shall notwithstanding such termination be liable to Company for all liability hereunder accrued.
EXHIBIT C
C-7
2. ACCESS TO TERMINAL:
Carrier shall be granted access to the Terminal after tendering a written request submitted by Carrier to Companys Terminal, as provided in Paragraph 3, for the sole purpose of loading or unloading authorized grades and quantities of Products into or from transport vehicles furnished by Carrier compatible with the product dispensing or unloading system at the Terminal, pursuant to and in accordance with written procedures in effect at the time issued by Company to Carrier (which may be amended by Company from time to time), and driving such loaded vehicles away from the Terminal.
3. CARRIER DRIVER APPROVAL AND ACCESS CODES:
Company shall furnish to designated Carriers drivers access to the Terminal through terminal access codes upon receipt of a copy of a valid commercial drivers license with appropriate endorsements and a copy of the drivers DOT testing card. Carriers driver must also submit to Terminals driver training and safety requirements. Upon satisfactory submission of required documents and successful completion of training, Carriers driver shall gain access to the Terminal and to the Terminals Products dispensing or unloading system so that Carrier can load or unload authorized grades and quantities of Products into or from Carriers transport vehicles using only its authorized drivers under this Agreement. Terminal access so issued to Carrier and driver shall remain in effect until terminated by either the Carrier or Company. Carrier agrees to not allow Carriers drivers to share any authorized access codes. Terminal access will only be issued to specific representatives of Carrier. Any unauthorized use of terminal access codes shall constitute a material breach of this Agreement and make it subject to immediate termination by Company without prior written notice to Carrier. Carrier shall pay to Company the posted price for all products loaded from the Terminal arising from any loss, theft, fraudulent or unauthorized use or duplication of terminal access codes issued it until this Agreement is terminated or until such time as Carrier notifies Terminal Manager by telephone of the loss, theft, fraudulent or unauthorized use or duplication of terminal access materials furnished Carrier hereunder. Carrier shall promptly confirm such verbal notice by facsimile or electronic mail and by registered or certified mail (return receipt requested), addressed to the Terminal Manager within 24 hours or telephone notification will not be valid and will not relieve Carrier of its obligations.
4. INSURANCE:
(A) Carrier shall maintain, at its sole cost, for itself and any subcontractor it may engage at all times while performing this Agreement, the following insurance coverages with companies reasonably satisfactory to Company, with full policy limits applying, but not less than as required below (the Insurance):
(1) Commercial General Liability unamended or Comprehensive General Liability insurance with Broad Form CGL endorsement with limits of not less than $1,000,000 each occurrence and $2,000,000 general aggregate, and provided that an endorsement is to be provided stating that this CGL insurance is primary to any insurance provided by the Indemnified Party or Parties.
EXHIBIT C
C-8
(2) Automobile Liability insurance covering all vehicles used in the operations of Contractor with limits of liability of not less than: Bodily injury $1,000,000 each person, $2,000,000 each accident; Property damage $1,000,000; or a Combined Single Limit of $2,000,000 for bodily injury and property damage, such policy to be endorsed to cover hazardous material transportation when it is involved in the performance of this Agreement.
(3) Workers Compensation insurance as required by laws and regulations applicable to and covering employees of Contractor engaged in the performance of the Work under this Agreement.
(4) Employers Liability insurance protecting Carrier against common law liability, in the absence of statutory liability, for employee bodily injury arising out of the master-servant relationship with a limit of not less than $1,000,000 each accident, illness or death, including but not limited to coverage under the Jones Act, the Death on the High Seas Act and the general maritime law of the United States.
(5) Longshore and Harborworkers Compensation Act insurance to the extent required under such Act with regard to the Work to be performed hereunder, including such requirements under such Act as extended by the Outer Continental Shelf Lands Act.
(6) For trucks loading gasoline and propane, Excess Liability insurance over coverages afforded by the primary policies described above, with a minimum limit of $9,000,000 when loading at the Truck Rack.
For trucks loading distillates, Excess Liability insurance over coverages afforded by the primary policies described above, with a minimum limit of $4,000,000 when loading at the Truck Rack.
(B) Carrier shall obtain Insurance that provides coverage to Company for liabilities arising out of or relating to the concurrent, contributory or sole negligence of any Indemnified Party (as defined below), Carrier, its subcontractors, invitees, suppliers or third parties. The Insurance shall provide a waiver of subrogation in favor of Company, state that the Insurance is primary to any other valid insurance available to Company or its affiliates allow for the separation of insureds and give written notice of cancellation or material change. Any deductible or retention of insurable risks shall be for Carriers account and be approved in advance in writing by Company. Notice of cancellation or change shall not affect the Insurance until 30 days after written notice is received by Company.
(C) The Insurance and each certificate evidencing the Insurance issued to Company shall name Company and all other Indemnified Parties as additional insureds (except for Workers Compensation insurance and Longshoremens and Harborworkers Compensation insurance), without regard to the allocation of liability provisions contained in this Agreement, to the full extent of any claim, loss or liability within the scope of the Insurance. It is the intention of the Parties that the status of Company and all other Indemnified Parties as additional insureds shall not be limited. Carrier shall provide to Company all certificates evidencing the Insurance prior to commencement of performance of this Agreement and shall provide copies of the policies upon request by Company. Companys failure to enforce Carriers obligation to provide proof of insurance shall not alter the coverage required herein nor Carriers obligation to maintain the Insurance.
EXHIBIT C
C-9
(D) Failure of Carrier to maintain the required Insurance in full force and effect during the duration of this Agreement and during any extensions, extra or additional performance agreed to by Carrier and Company hereunder shall constitute a breach of this Agreement. Company shall have the right to enforce this Agreement against Carrier as if the Insurance had been properly obtained. Company shall have the right, in addition to any other rights, to immediately suspend, cancel and/or terminate this Agreement without further cost to Company.
(E) The indemnity provisions set forth herein and this section setting forth Carriers insurance obligations are separate obligations of Carrier, and the enforceability or non-enforceability of the indemnity shall not prejudice Companys rights as an additional insured under the Insurance.
5. COMMODITY CUSTODY TRANSFER:
Carrier agrees that custody of the Commodity loaded passes to Carrier at the point where it leaves the loading arm at the Terminal truck loading rack. Carrier assumes responsibility for commodity quality beyond that point, should it differ from the Commodity quality of the sample taken from the tank delivering Commodity to that loading arm.
6. INDEMNITY:
6.1 THE PARTIES EXPRESSLY INTEND THAT CARRIER SHALL INDEMNIFY COMPANY AS SET FORTH IN THIS SECTION. THIS INDEMNITY SHALL BE ENFORCED TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW IN LIGHT OF THE TYPE OF SERVICES PERFORMED. IF ANY PORTION OF THE INDEMNITY IS FOUND NOT TO BE ENFORCEABLE PURSUANT TO APPLICABLE LAW IN LIGHT OF THE TYPE OF SERVICES PERFORMED, THE INDEMNITY SHALL NOT BE VOID BUT RATHER IT SHALL BE INTERPRETED AND APPLIED TO PROVIDE THE MAXIMUM INDEMNITY OF COMPANY BY CARRIER ALLOWED BY THE APPLICABLE LAW. IN ADDITION, NO TERM OF THIS AGREEMENT SHALL BE CONSTRUED TO WAIVE COMPANYS STATUTORY WORKERS COMPENSATION IMMUNITY WHEREAS CARRIER DOES WAIVE SUCH IMMUNITY AS APPLICABLE TO EFFECTUATE THE INTENT OF THIS INDEMNITY.
(a) DEFINITIONS:
(1) INDEMNIFIED PARTY OR INDEMNIFIED PARTIES MEANS COMPANY, ITS PARTNERS, AFFILIATES, PARENTS AND SUBSIDIARY AND RELATED ENTITIES, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, PARTNERS AND AGENTS.
(2) DAMAGES MEANS ALL CLAIMS, DEMANDS, CAUSES OF ACTION, SUITS, DAMAGES, LIABILITIES, FINES, PENALTIES, ASSESSMENTS, ENVIRONMENTAL RESPONSIBILITY COSTS AND INJUNCTIVE OBLIGATIONS, JUDGMENTS, LOSSES AND EXPENSES (INCLUDING WITHOUT LIMITATION EXPENSES, COSTS AND ATTORNEYS FEES INCURRED FOR ANY INDEMIFIED PARTIES DEFENSE OR ENFORCEMENT OF ITS INDEMNIFICATION RIGHTS).
EXHIBIT C
C-10
(b) CARRIER, TO THE MAXIMUM EXTENT PERMITTED BY LAW, AGREES TO AND SHALL DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS INDEMNIFIED PARTIES FROM AND AGAINST ANY DAMAGES WHICH MAY BE INCURRED BY OR ASSESSED AGAINST ANY INDEMNIFIED PARTY ON ACCOUNT OF:
(1) ANY DAMAGES FOR PERSONAL INJURY, DISEASE OR DEATH OF ANY PERSON(S), DAMAGES TO OR LOSS OF ANY PROPERTY CAUSED BY, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE CARRIERS PERFORMANCE OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION DAMAGES CAUSED BY OR ATTRIBUTABLE TO THE NEGLIGENCE OF CARRIER, ITS SUBCONTRACTORS, INVITEES OR SUPPLIERS (INCLUDING WITHOUT LIMITATION THE RESPECTIVE EMPLOYEES OR AGENTS OF THE FOREGOING) AND INCLUDING WITHOUT LIMITATION ALL DAMAGES CAUSED BY THE CONCURRENT, CONTRIBUTORY OR SOLE NEGLIGENCE OF COMPANY AND ANY INDEMNIFIED PARTY; OR
(2) ANY BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT OF CARRIER CONTAINED HEREIN, INCLUDING WITHOUT LIMITATION, DAMAGES INCURRED BY ANY INDEMNIFIED PARTY DUE TO CARRIERS FAILURE TO FULLY COMPLY WITH THE INSURANCE REQUIREMENTS SET FORTH HEREIN.
(c) CARRIER SHALL DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS THE INDEMNIFIED PARTIES FROM AND AGAINST ALL ECONOMIC LOSSES INCLUDING CONSEQUENTIAL DAMAGES, LOST PROFITS AND BUSINESS DELAYS ARISING FROM OR RESULTING FROM CARRIERS PERFORMANCE OR NONPERFORMANCE OF THIS AGREEMENT.
(d) CARRIER SHALL DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS THE INDEMNIFIED PARTIES FROM AND AGAINST DAMAGES ARISING OUT OF, RESULTING FROM OR OTHERWISE CONNECTED WITH ANY FAILURE BY CARRIER TO COMPLY WITH OR VIOLATION BY CARRIER OF ANY FEDERAL, STATE, COUNTY OR MUNICIPAL LAWS, RULES, REGULATIONS, ORDERS OR ORDINANCES, INCLUDING WITHOUT LIMITATION, ALL FEDERAL, STATE AND LOCAL ENVIRONMENTAL, HEALTH AND SAFETY LAWS, RULES AND REGULATIONS, WHICH MAY OTHERWISE BE APPLICABLE TO OR IMPOSED IN CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT.
(e) CARRIER SHALL DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS THE INDEMNIFIED PARTIES AGAINST ALL LIENS, CLAIMS AND DEMANDS (INCLUDING WITHOUT LIMITATION EXPENSES, COSTS OR ATTORNEYS FEES INCURRED FOR ANY INDEMNIFIED PARTYS DEFENSE OR FOR ENFORCEMENT OF ITS INDEMNIFICATION RIGHTS) WHICH ARISE IN CONNECTION WITH THIS AGREEMENT.
EXHIBIT C
C-11
(f) CARRIER SHALL DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS THE INDEMNIFIED PARTIES AGAINST CLAIMED OR ACTUAL INFRINGEMENT OR CONTRIBUTORY INFRINGEMENT OF ANY PATENT, OR INFRINGEMENT OF ANY COPYRIGHT OR TRADEMARK, OR PUBLIC DISCLOSURE OF ANY TRADE SECRET OR PROPRIETARY INFORMATION OWNED BY OR OTHERWISE LICENSED TO COMPANY (INCLUDING WITHOUT LIMITATION EXPENSES, COSTS OR ATTORNEYS FEES INCURRED FOR ANY INDEMNIFIED PARTYS DEFENSE OR FOR ENFORCEMENT OF ITS INDEMNIFICATION RIGHTS), ARISING OUT OF OR IN CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT OR THE USE OF THE MATERIALS OR EQUIPMENT FURNISHED BY CARRIER FOR OR IN CONNECTION WITH THE SERVICES.
(g) CARRIERS INDEMNITY OBLIGATIONS SHALL NOT LIMIT AND SHALL NOT BE LIMITED BY THE INSURANCE COVERAGES (INCLUDING WITHOUT LIMITATION ANY INDEMNIFIED PARTYS ADDITIONAL INSURED STATUS) SET FORTH HEREIN.
(h) COMPANY EXPRESSLY RESERVES THE RIGHT TO PARTICIPATE IN ITS DEFENSE WITH COUNSEL OF ITS OWN CHOOSING. CARRIERS INDEMNITY OBLIGATIONS SHALL SURVIVE THE EXPIRATION, TERMINATION OR NONRENEWAL OF THIS AGREEMENT.
7. LAWS, RULES, REGULATIONS AND INSTRUCTIONS:
a. Carrier agrees at all times to comply with all federal, state, and local laws, ordinances, rules and regulations, applicable to its operations hereunder and agrees to obtain all permits, licenses and other authorizations required by any governmental authority under such laws, ordinances, rules and regulations. By way of example, but not of limitation, the transport vehicles (including the cargo tanks into which petroleum products are loaded) used by Carrier in exercising the privileges shall meet all applicable Department of Transportation labeling, placarding, marking and tank specifications and regulations and shall be authorized by the Department of Transportation to transport the petroleum products loaded into such vehicles. Further, all tank vehicles and cargo trucks shall carry a current DOT Emergency Response Guidebook or a Hazardous Material Shipping paper for each Product to be loaded. Also, Carrier and its drivers and agents shall institute and comply with all operating, reporting and recordkeeping procedures reasonably designed to ensure: (i) that no unauthorized release of any Products occurs; (ii) that in the event any Product(s) is/are released, all applicable reporting and recordkeeping requirements are fully complied with; and (iii) that in the event any Product(s) is/are released, all Product(s) and any contaminated environmental medium or media is/are expeditiously and properly cleaned up and remediated.
b. Carrier further agrees to abide fully and strictly with the driver loading instructions and safety rules promulgated by Company with respect to the use of the Terminal. Such instructions and regulations may be amended or modified by Company at any time, and such instructions and regulations as amended or modified shall be binding on Carrier upon receipt of a copy thereof. Furthermore, Carrier acknowledges to have received and read any driver loading instructions and safety rules and any supplements or amendments thereto which may be issued from time to time.
EXHIBIT C
C-12
c. Carrier shall only permit personnel properly instructed in the characteristics and safe-handling methods associated with the Terminal and the petroleum products to be transported to exercise the privileges granted Carrier hereunder. Carrier warrants its drivers have been properly trained in all operating safety requirements and procedures. All such personnel shall be fully knowledgeable about and abide by the driver loading or unloading instructions and safety regulations of Company. Company may amend or modify loading or unloading instructions at any time and such instructions and regulations as amended or modified shall be binding on Carrier upon receipt of a copy thereof. These instructions include, but are not limited to:
| In Terminal area or trucks on Terminal grounds, there shall be no smoking, no use of a lighter, no use of matches, no flares, no open lights or striking together of metal objects. |
| No truck will be permitted to load which was previously loaded with chemicals that will oxidize with carbon. Such chemicals are Ketones, Aldehydes, Alkenes and Organic Acids. |
| All trucks shall be empty before moving into loading area. |
| Driver is responsible for following procedure sequence which is posted in loading bay to receive product safely. |
| All trucks must have the proper connections for safe loading or unloading. No adapters will be permitted. |
| All trucks must have air brakes locked while loading or unloading, and shall have an operational brake interlock system on the trailer so that the brakes remain locked whenever the truck is hooked up to the apparatus. |
| Trucks must be turned off and all electronic equipment on trucks shut off while loading (such as lights, radio, C.B., etc.) |
| All portable electronic devices such as cell phones, blue tooth, lap tops etc must be turned off before pulling under the loading rack. |
| If for any reason it becomes necessary for a driver to access the top of a trailer he or she must move to a top loading lane and use the steps at the lane rather than climb the ladder attached to the trailer itself. All top loading lanes utilize a guard rail system for the essential level of fall protection. |
| Specific personal protective equipment is required while loading or unloading at the Delaware City Sales Terminal. FRC Clothing, Hard Hats and Safety Eyewear are required; in addition, shoes must be in good condition and have leather uppers with an identified heel. |
d. Company requires that all Carrier personnel working in its operations and at its facilities be mentally and physically capable of performing their assigned duties in a competent and safe manner. This safety rule prohibits the possession and or use of illegal or unauthorized drugs, intoxicating beverages, fire arms or other weapons at Companys Terminal. To insure the safety and prevent the loss of Company property, Company will conduct security inspections or searches at random to search the person, personal effects or vehicle of any person on Company property to enforce compliance with this policy. Persons found to be in violation of this policy will be immediately removed and barred from entering Terminal. Illegal or unauthorized drugs, intoxicating beverages, fire arms, other weapons or unauthorized property discovered as a result of these inspections may be confiscated and turned over to law enforcement officers, if appropriate. The instructions and regulations pertaining to Companys inspection policy may be amended or modified by Company at any time, and such instructions and regulations as amended or modified shall be binding on Carrier upon receipt of copy thereof. In the event Carrier or Carriers employees fail to comply with the Companys inspection policy, Company will take whatever steps are necessary to correct the situation. This may include immediately terminating this Agreement.
EXHIBIT C
C-13
e. Carriers driver shall observe safe driving rules and enter and leave the Terminal slowly, he/she shall use the proper traffic flow inside the Terminal and observe restrictive areas.
f. All tank trucks shall be free of leaks and in all respects suitable for loading petroleum products. In addition all bottom loading tank trucks shall be: (i) equipped with a secondary high level overfill protection device compatible with the Terminals rack permissive system(s); (ii) equipped with vapor recovery equipment compatible with the Terminals rack equipment; and (iii) be fitted with a Scully VIP identification chip. Drivers shall remain in attentive attendance at the loading or unloading rack at all times during the loading or unloading procedure. NEVER BLOCK A LOADING OR UNLOADING VALVE OPEN! If the driver is in the loading or unloading area awaiting an open position, he/she shall remain with the equipment and engine and all electrical equipment shall be shut down. Tank trucks shall be grounded promptly upon stopping at a loading or unloading position and grounds shall not be removed until all loading or unloading equipment has been secured. No work or repair of any type shall be performed on the tractor or trailer while positioned in the loading or unloading rack or in the immediate vicinity of the loading or unloading rack. If a truck cannot be started while in the loading rack, it shall be safely towed from the rack. No units shall be pushed from the rack areas, nor shall jumper cables be utilized except in designated areas. In the event of a spill at the loading or unloading rack, the loading or unloading operation shall be stopped immediately. The truck shall not be started or moved until the hazard has been removed.
g. Carrier shall comply with all federal, state and local fuel-related environmental laws and regulations including, but not limited to:
| All applicable subparts of 40 CFR Part 80, Regulation of Fuels and Fuel Additives. |
| Federal Trade Commission (FTC) gasoline octane labeling requirements, including but not limited to regulations found in Section 203(c)(1) of Title II of PMPA. |
h. Carrier, immediately after loading and prior to transporting any Product, shall obtain a bill of lading, manifest or other product transfer document (PTD) from Company which complies with all applicable requirements and regulations concerning said documents. Carrier will maintain a copy of each PTD for a minimum of five (5) years. Carrier will not transport Product (and shall contact Company) if the PTD does not contain the required information;
i. Carrier shall deliver PTD to the operator of the destination facility prior to off-loading Product;
j. If loading or transporting reformulated blendstock for oxygenate blending (RBOB), Carrier agrees that it shall only transfer RBOB to an EPA registered refiner or oxygenate blender. Carrier will maintain and supply to Company the EPA registration number of the party to whom the RBOB is transferred;
EXHIBIT C
C-14
k. Carrier will obtain when loading, and later provide when unloading, appropriate PTDs. Carrier will ensure different RBOBs are kept physically separate and are not mixed except as otherwise allowed by federal or state fuel regulations;
l. Carrier shall immediately cease the loading, transportation, distribution, or off-loading of any Product if said Product is known or suspected of being in violation of any federal, state, or local regulation, law or ordinance. Carrier agrees to immediately notify Company if a violation is known or suspected;
m. Carrier shall not commingle Products (including but not limited to reformulated gasoline RFG or conventional gasoline CG), except as authorized by applicable regulation. Carrier shall not perform any in-transport blending or adulterate the loaded Product in any fashion without prior written approval of Company. Carrier will ensure that all loading compartments are drained dry prior to loading dissimilar Products;
n. Carrier shall not deliver, distribute, or off-load CG into a controlled RFG market area under any circumstance.
o. Carrier shall train all personnel concerning applicable regulatory requirements pertaining to the handling, transport, loading, purchase and sale of RFG, CG and all other Products contemplated herein;
p. Company agrees to comply with all regulations promulgated under the Clean Air Act Amendments of 1990 concerning carriers;
q. Carrier shall allow Company reasonable access to its facilities, records and personnel in order to obtain samples, review compliance, and conduct contract compliance audits as needed
8. ASSIGNMENT:
Carrier shall not transfer or assign this Agreement in whole or in part without Companys prior written consent, which consent Company may withhold in its sole and absolute discretion.
9. INDEPENDENT CONTRACTOR:
It is expressly agreed that Carrier is acting hereunder solely as an independent contractor and that all persons exercising the privileges shall be deemed agents, servants, or employees of Carrier and that none of such persons shall be deemed agents, servants, or employees of Company.
10. | ENTIRE AGREEMENT: |
This Agreement sets forth the entire agreement and understanding of the parties with respect to the privileges contained herein, and supersedes and merges all prior discussions and writings between them and is not subject to modification or interpretation by either party other than by an amendment hereto duly executed by both parties.
11. SEVERABILITY:
Carrier and Company agree that in the event any term, covenant, condition, provision or agreement herein is held to be invalid or void by any court of competent jurisdiction, the invalidity of any such term, condition, covenant, provision or agreement shall in no way affect any other term, covenant, provision or agreement herein.
EXHIBIT C
C-15
12. WAIVER:
In the event that Company fails to insist upon performance by Carrier of any of the terms hereof, such failure shall not be construed as a waiver of Companys right at any time thereafter to enforce such terms.
13. GOVERNING LAW:
This agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to its law on conflicts and the parties hereby submit to the exclusive jurisdiction of the courts situated in Delaware. The parties agree that the United Nations Convention on Contracts for the International Sale of Goods shall not in any way apply to, or govern this agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written.
DELAWARE CITY LOGISTICS COMPANY, LLC | CARRIER | |||||||
By: | By: |
Title: | Title: |
Print Name: | Print Name: |
EXHIBIT C
C-16
Exhibit D
Designated Refinery Assets
| Any or all of the tanks located in the product tank farms, located east of Route 9 and associated equipment, including pumps, interconnecting piping, utility systems, control system and operator shelter. |
| Refinery piers 1, 2,3, hoses, pumps, vapor combustion unit, associated equipment and interconnecting piping with the refinery tank farms. |
| Waste Water Treatment Plant (WWTP) and oily water/storm sewer system connections to Terminal assets. |
| Rail unloading facilities, associated pumps and other equipment, including interconnecting piping |
| Steam generation and distribution system to the tanks and WWTP |
| Electrical distribution system to the tanks and WWTP |
| Instrument Air compressor, dryer and distribution system to the tanks |
| Firewater supply pump, piping system, including associated tank 403, pumps and associated equipment |
| Fresh water system, including interconnection to United Water supply, pumps and distribution piping |
| Vent piping from LPG arms to and including Refinery flare system |
| Control and Knock Laboratories, including testing apparatus and equipment |
| Emergency response equipment, including boats, boom, hazmat trailers, fire fighting equipment and associated protective housing |
| Domestic water supply piping system, including United Water connection, piping and pumps. |
| 400 Kv portable backup generator |
| Warehouse equipment compatible with Terminal systems |
| IT Servers and associated equipment, including UPS backup systems |
| Relevant operating and other environmental permits |