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Second Amendment To Terminal Services Agreement

Consulting Services Agreement

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 This Consulting Services Agreement involves

ARC LOGISTICS PARTNERS LP | Arc Terminals Holdings LLC | Arc Terminals Joliet Holdings LLC | JOLIET BULK, BARGE RAIL LLCEXXONMOBIL OIL CORPORATION

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Title: SECOND AMENDMENT TO TERMINAL SERVICES AGREEMENT
Governing Law: Texas     Date: 8/5/2016
Industry: Oil and Gas Operations     Sector: Energy

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Execution Version

 

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED.  THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE WITH FIVE ASTERISKS (*****).

 

Exhibit 10.1

 

SECOND AMENDMENT TO TERMINAL SERVICES AGREEMENT

 

This Second Amendment to Terminal Services Agreement , dated as of June 15, 2016 (the “ Second Amendment ”), is entered into by and between Joliet Bulk, Barge & Rail LLC , a Delaware limited liability company (“ Operator ”), and ExxonMobil Oil Corporation , a New York corporation (“ Customer ”).  Operator and Customer are sometimes referred to herein as, individually, a “ Party ” and, collectively, the “ Parties ”.

 

RECITALS:

 

WHEREAS , the Parties originally entered into that certain Terminal Services Agreement, dated as of May 28, 2014 (as amended, modified or supplemented to date, the “ Agreement ”); and

 

WHEREAS , the Parties wish to further amend the Agreement, upon the terms and conditions contained herein;

 

NOW, THEREFORE , in consideration of the premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agrees as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1 Capitalized Terms .  Unless otherwise defined herein, capitalized terms used in this Second Amendment shall have the respective meanings ascribed to such terms in the Agreement.  

 

Section 1.2 Definitions Deleted from Annex I to the Agreement .  Annex I to the Agreement is hereby amended by deleting the existing terms of “ Minimum Volume Commitment ” and “ Excess Fee ” appearing therein, and the term “ Non-Dedicated Tanks ” appearing therein is amended and restated as provided in Section 1.3 of this Second Amendment.

 

Section 1.3 Definitions Added to Annex I to the Agreement .  Annex I to the Agreement is hereby further amended by inserting the following new definitions in Annex I in proper alphabetical order, as follows:

 

1

 


SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED.  THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE WITH FIVE ASTERISKS (*****).

 

Additional Volume Commitment ” is defined in Section 7.21

 

 

2

 


SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED.  THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE WITH FIVE ASTERISKS (*****).

 

Additional Volume Fee ” is defined in Section 7.21 .

 

Additional Term ” is defined in Section 7.21 .

 

Car Storage Fee ” is defined in Section 7.22 .

 

Deficiency Period ” is defined in Section 7.21 .

 

Deficiency Period Volume ” is defined in Section 7.21 .

 

Deficit Volumes ” is defined in Section 7.21(c)(ii) .

 

Deficit Exercised Option Volumes ” is defined in Section 7.4 .

 

Empty Car ” is a Track Car that contains no Product or contains only residual Product that customarily remains in a Track Car following the unloading thereof.

 

Excess Volume Fee ” is defined in Section 7.6 .

 

Heated Product ” is defined in Section 7.15 .

 

Loaded Car ” is a Track Car that contains Product other than residual Product that customarily remains in a Track Car following the unloading thereof.

 

Lock In Volume Period ” is defined in Section 7.10 .

 

Monthly Additional Volume Commitment Payment ” is defined in Section 7.21 .

 

Non-Dedicated Tank ” means one of the two 150,000 Barrel (nominal capacity) tanks referred to in Section 1.2 , which no longer constitutes a Dedicated Tank hereunder in accordance with the provisions of Section 1.4 .

 

Priority Access ” is defined in Section 7.20 .

 

Second Amendment Effective Date ” means June 15, 2016.

 

Track Cars ” is defined in Section 7.22 .

 

3

 


SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED.  THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE WITH FIVE ASTERISKS (*****).

 

ARTICLE II

OTHER AMENDMENTS TO TERMINALLING AGREEMENT

 

Section 2.1 Amendment to Section 1.4 of the Agreement .    The Agreement is hereby amended by deleting Section 1.4 thereof in its entirety and inserting in place thereof the following new Section 1.4:

 

 

1.4

From and after the Second Amendment Effective Date, Customer shall no longer be entitled to use the second Dedicated Tank as a Dedicated Tank under this Agreement and all references in this Agreement to “Dedicated Tanks” shall be deemed to refer to only one (1) Dedicated Tank.  Not later than 15 days’ following receipt of written notice from Operator, the Customer shall cause the Minimum Inventory (i.e., the tank heels) in the Tank that constitutes the Non-Dedicated Tank to be removed or disposed of in accordance with Section 31.2 of the GTCs.  If Customer nominates and delivers Product in accordance with the terms hereof in excess of that which can be accommodated in the sole Dedicated Tank hereunder, Operator shall accommodate the storage of such excess volumes to the extent additional tank capacity is available; provided that any such accommodation by Operator of such excess volumes shall be in a Non-Dedicated Tank and Operator shall be entitled to commingle Product with similar product of third parties provided reasonable advance notice is given to Customer; and, provided further that during the Additional Term, nothing contained herein shall restrict the Operator from granting to another customer of the Facility exclusive use of the Non-Dedicated Tank.

 

 

Section 2.2 Amendment to Section 2.2 of the Agreement . The Agreement is hereby further amended by deleting Section 2.2 thereof in its entirety and inserting in place thereof the following new Section 2.2:

 

 

2.2

Operator shall cause all railcars to receive a visual inspection by a qualified AAR (Association of American Railroads) railcar inspector upon arrival and prior to departure for any evident damage.  Operator will report any railcar damage discovered by such inspections daily to Customer in accordance with industry practice, including the (i) railcar number, (ii) railcar’s arrival date, (iii) bad order date, (iv) dwell days and (v) railcar’s current status.  Operator may remove the damaged railcars, or cause the damaged railcars to be removed, from Customer’s Unit Train, or perform minor railcar repairs in accordance with AAR standards if determined to

 

4

 


SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED.  THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE WITH FIVE ASTERISKS (*****).

 

 

be necessary by Operator and/or Customer and approved by Customer; provided that, notwithstanding anything to the contrary contained herein, (x) Operator has no obligation to make any such repairs, (y) Operator shall assume no responsibility or liability for damaged railcars received except to the extent that such damage is caused by Operator, and (z) Operator shall have no liability for any such repair except to the extent that such repair is not made in accordance with AAR standards, in which case such liability shall, except in the case of gross negligence or willful misconduct, be limited solely to, at the option of Customer, the duty to correct any such deficient repair at the cost and expense of Operator or refund to Customer the amounts paid by Customer for such repair.  If any damaged railcars are found on Unit Trains owned by a third party delivering Products on behalf of Customer, Operator will notify the third party and Customer.  Outbound inspections will meet the requirements of CFR 49.173.31 (d) “Examination before shipping”.  The amount due and payable by Customer for damaged railcar repairs made by Operator, if at all, shall be equal to the costs incurred by Operator for making such repairs plus ***** percent (*****%)

 

 

Section 2.3 Amendment to Section 2.7 of the Agreement.    The Agreement is hereby further amended by deleting the second sentence of Section 2.7 thereof in its entirety and inserting in place thereof the following new sentence:

 

Any storage of Customer railcars on the repair-in-place track at the Facility will be charged to the Customer at the rates set forth in Section 7.15(d) .

 

Section 2.4 Amendment to Section 6.2 of the Agreement .    The Agreement is hereby further amended by deleting Section 6.2 thereof in its entirety and inserting in place thereof the following new Section 6.2 :

 

Customer may elect to extend the Initial Term by up to two additional one-year terms (each, an “ Extension Term ”) at its option.  If Customer elects to extend the Initial Term or the then expiring Extension Term (as the case may be), notice shall be provided to Operator at least nine months in advance of the date of expiration of the Initial Term or of the first Extension Term, as applicable.  Within 90 days after such notice, Operator has the option to notify Customer of Operator’s decision not to extend the Option Volume component of this Agreement. If the Option Volume component is not extended, then Customer’s obligations related to the Exercised Option Volume and the Exercised Option Fee shall end at the end of the Initial Term or first Extension Term, as applicable.  During

5

 


SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED.  THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE WITH FIVE ASTERISKS (*****).

 

any such Extension Term, Customer shall continue to pay the Monthly Committed Payment and, if applicable, Monthly Exercised Option Payment and Monthly Lock In Fee Payment as set forth in Section 7 and, in each case, as adjusted pursuant to Section 7.18 without any reduction in the Base Fee or the Exercised Option Fee pursuant to Section 1.3(a) during any Extension Term.  Following the expiration of the Initial Term and, if the Initial Term is extended for one or more Extension Terms, the expiration of all Extension Terms, the term of this Agreement shall be extended for the Additional Term, if any, as established pursuant to Section 7.21 (the Initial Term, as extended by one or more Extension Terms, if at all, and by the Additional Term, if any, collectively, the “ Term ”).  Notwithstanding any provision to the contrary contained in this Agreement, during the Additional Term, if any, the provisions of this Agreement relating to the Committed Volume and payment of the Monthly Committed Payment, Option Volume and payment of the Exercised Option Fee, and Lock in Volume and payment of the Monthly Lock In Fee Payment, shall not apply.

 

Section 2.5 Amendment to Section 7.1 of the Agreement .    The Agreement is hereby further amended by deleting Section 7.1 thereof in its entirety and inserting in place thereof the following new Section 7.1:

 

 

7.1

Customer commits to deliver ***** Barrels of Product per day (the “ Committed Volume ”) via railcar to the Facility ratably over the Initial Term.

 

 

Section 2.6 Amendment to Section 7.4 of the Agreement . The Agreement is hereby further amended by deleting the last two sentences of Section 7.4 of the Agreement and inserting in place thereof the following new sentences:

 

The “ Exercised Option Fee ” is $ ***** per Barrel. The Operator will have the right, throughout the Term (including any Additional Term) and in its sole discretion, to increase or decrease the Exercised Option Fee at the end of every three (3) month period from and after the Second Amendment Effective Date (commencing with the three (3) month period beginning on the first calendar day of the month following the month in which the Second Amendment Effective Date occurs) by giving written notice to Customer at least thirty six (36) days prior to the expiration of such three (3) month period. The Exercised Option Fee then in effect may be increased by up to but not more than $ ***** per Barrel, with such increase to become effective upon the first calendar day of the next succeeding three (3) month period; provided, however, that the Exercised Option Fee shall not at any time exceed $ ***** per Barrel.  The Operator may elect to

6

 


SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED.  THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE WITH FIVE ASTERISKS (*****).

 

decrease the Exercised Option Fee at any time by the giving of written notice as provided in this Section 7.4 .  The “ Monthly Exercised Option Payment ” due Operator for any month in which Option Volumes are unloaded at the Facility shall be the Exercised Option Fee multiplied by the Exercised Option Volumes so unloaded at the Facility for such month; provided, however, that if the Customer shall deliver to the Facility during such month less than the Exercised Option Volumes per day specified to be delivered pursuant to the notice given by Customer pursuant to Paragraph 2.b of Exhibit B (the total amount of deficit Barrels for such month, the “ Deficit Exercised Option Volumes ”), Customer shall pay to Operator a fee with respect to each Barrel included in such Deficit Exercised Option Volumes in accordance with the schedule set forth on Exhibit E to this Agreement.

 

Section 2.7 Amendment to Section 7.5 of the Agreement .    The Agreement is hereby further amended by deleting Section 7.5 thereof in its entirety and inserting in place thereof the following new Section 7.5:

 

 

7.5

Customer shall be obligated to pay the Monthly Committed Payment and, if applicable, the Monthly Lock In Fee Payment regardless of whether Customer in fact delivers all or any of the Committed Volumes or, if applicable, the Lock In Volume or any Exercised Option Volumes.  Such payments are fixed fees that shall be due and payable irrespective of actual Product delivered by Customer to the Facility.  Payment by Customer of such fees for a particular month or months shall not reduce or otherwise affect Customer’s obligation to pay the Monthly Committed Payment, and if applicable, the Monthly Lock In Fee Payment for any subsequent month or months.

 

 

Section 2.8 Amendment to Section 7.6 of the Agreement . The Agreement is hereby further amended by deleting Section 7.6 thereof in its entirety and inserting in place thereof the following new Section 7.6:

 

 

7.6

If, for any given delivery month during the Term, Customer nominates volumes per day in accordance with Exhibit B to this Agreement above (i) the sum of the Committed Volume and the Exercised Option Volume for such month or (ii) if the Lock In Volume Period shall then be in effect, the Lock In Volume or (iii) during the Additional Term, the Additional Daily Volume for such month, then Operator shall use commercially reasonable efforts to handle such additional volume (including, during the Additional

 

7

 


SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED.  THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE WITH FIVE ASTERISKS (*****).

 

 

Term, Deficit Volumes to the extent deliverable in such month as contemplated by Section 7.21(c)(ii) ), subject to Facility limitations and subject to the contractual rights of other users, and shall give written notice to Customer not later than ***** day of the month preceding the given month of delivery of the amount of additional volume Operator can so handle at the Facility for such month, in which case the unloading rate for each Barrel of excess volume for such month shall be such rate as shall be mutually agreed upon in writing by Operator and Customer and, in the absence of Customer and Operator reaching mutual agreement upon such unloading rate, the unloading rate payable with respect to such additional volume for such month shall be equal to $ ***** per Barrel as adjusted in accordance with Section 7.18 hereof (such unloading rate, the “ Excess Volume Fee ”); provided however that, for the avoidance of doubt, ***** shall be charged to Customer for the unloading of any Deficit Volumes in any month during the Additional Term to the extent such Deficit Volumes are delivered in such month as contemplated by Section 7.21(c)(ii)

 

 

Section 2.9 Amendment to Section 7.8 of the Agreement .    The Agreement is hereby further amended by deleting Section 7.8 thereof in its entirety and inserting in place thereof the following new Section 7.8:

 

 

7.8

[INTENTIONALLY OMITTED.]

 

 

Section 2.10 Amendment to Section 7.10 of the Agreement .    The Agreement is hereby further amended by deleting the first sentence of Section 7.10 thereof and inserting in place thereof the following new sentences:

 

Subject to the provisions of this Section 7.10 , Customer may elect to commit to throughput at the Facility ***** Barrels of Product per day (the “ Lock In Volume ”) for any period of twelve months (or, if the remaining Term (excluding the Additional Term) shall then be less than twelve months, for the remaining balance of such Term) (such period, the “ Lock In Volume Period ”) and forego the payment of the Monthly Committed Payment in exchange for payment of the Monthly Lock In Fee Payment during such Lock In Volume Period; provided, however, that (i) any Lock In Volume Period shall commence on the first day of a calendar month and (ii) if Customer has not elected to commit to the Lock In Volume by delivering its exercise notice to Operator on or before the first anniversary of the Second Amendment Effective Date, then any obligation on the part of Operator to accept Customer’s election to commit to the Lock In Volume

8

 


SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED.  THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE WITH FIVE ASTERISKS (*****).

 

pursuant to this Section 7.10 shall be subject to Facility limitations and the contractual rights of other users.

 

Section 2.11 Amendment to Section 7.10 of the Agreement .    The Agreement is hereby further amended by deleting the first sentence of clause (a) of Section 7.10 of the Agreement and inserting in place thereof the following new sentences:

 

If Customer desires to elect to commit to the Lock In Volume during the Initial Term or any Extension Term, Customer shall give Operator written notice at least two (2) full calendar months prior to the month in which Customer desires to commence delivery to the Facility of the Lock In Volume.  Customer may elect to continue the ***** Barrels of Product per day Lock In Fee commitment for a succeeding twelve month period (or, if less, the remaining balance of the Term (excluding the Additional Term)) by giving written notice to Operator not less than two (2) full calendar months prior to the expiration of the then expiring Lock In Volume Period.

 

Section 2.12 Amendment to Section 7.10 of the Agreement .  The Agreement is hereby further amended by deleting clauses (b), (c) and (d) of Section 7.10 of the Agreement in their entirety and inserting in place thereof the following new clauses:

 

(b)[INTENTIONALLY OMITTED].

 

(c)[INTENTIONALLY OMITTED].

 

(d)[INTENTIONALLY OMITTED].

 

Section 2.13 Amendment to Section 7.11 of the Agreement .    The Agreement is hereby further amended by deleting Section 7.11 thereof in its entirety and inserting in place thereof the following new Section 7.11:

 

7.11[INTENTIONALLY OMITTED].

 

Section 2.14 Amendment to Section 7.12 of the Agreement .    The Agreement is hereby further amended by deleting Section 7.12 thereof in its entirety and inserting in place thereof the following new Section 7.12:

 

7.12[INTENTIONALLY OMITTED.]

 

9

 


SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED.  THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE WITH FIVE ASTERISKS (*****).

 

Section 2.15 Amendment to Section 7.15 of the Agreement .    The Agreement is hereby further amended by deleting Section 7.15 thereof in its entirety and inserting in place thereof the following new Section 7.15:  

 

 

7.15

The following additional services will be provided by the Operator to the Customer upon written request:

 

 

(a)Tank to tank transfers: $ ***** per Barrel of Product.

 

 

(b)

Unloading of railcars in configurations of fewer than 100 cars will not incur any additional charge to Customer so long as the average monthly volume of Customer Product unloaded at the Facility remains below ***** Barrels per day. In the event the average monthly volume of Customer Product unloaded at the Facility exceeds ***** Barrels per day for any month, then any trains carrying Product of Customer that are received in configurations under 100 cars will incur a surcharge of $ ***** per Barrel for such barrels in such month.

 

 

 

(c)

Blending of Product: $ ***** per blended Barrel of Product + $ ***** /hour of blending time.

 

 

 

(d)

Railcar storage for empty railcars on repair-in-place track:  $ ***** per railcar per day.  Storage charges will commence 72 hours after written/email notification is sent to Customer, however in no case will railcar storage fees begin to accrue until cars have been physically placed and accessible on repair-in-place track.  Charges will cease immediately upon notification of release by Customer’s repair company and placement of railcar on next available Customer outbound train.

 

 

 

(e)

Customer will reimburse Operator the actual utility charges plus ***** percent for any tank heating costs. Customer must provide Operator with temperature instructions for any heated tank.

 

 

 

(f)

With respect to any Customer Product received at the Facility with an API Gravity between 8º and 17º  or any other Product that would require the use of heated tank storage (collectively, the “ Heated Product ”) Customer will (i) incur an additional charge of

 

10

 


SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED.  THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE WITH FIVE ASTERISKS (*****).

 

 

$ ***** per Barrel for each Barrel of Heated Product unloaded at the Facility and (ii) to the extent that the time to unload the Heated Product shall exceed the unloading times set forth in Section 8.6 , reimburse Operator for the costs of locomotive power that is incurred by Operator as a result of the additional time associated with unloading such Heated Product. The Heated Product charge of $ ***** will be reduced to $ ***** per barrel once the Facility has received during the Term the cumulative total of ***** Barrels of Heated Product from the Customer. 

 

 

Section 2.16 Amendment to the Agreement .    The Agreement is hereby further amended by deleting Section 7.18 thereof in its entirety and inserting in place thereof the following new Section 7.18:

 

 

7.18

Throughout the Term, the Base Fee, the Exercised Option Fee, the Lock In Fee, the Excess Volume Fee and the Additional Volume Fee shall be escalated on each anniversary of the Commencement Date based on the greater of (i) 1.5% and (ii) the U.S. City average increase of the Consumer Price Index for the prior year as published by the U.S. Bureau of Labor Statistics.

 

 

Section 2.17 Amendment to the Agreement .    The Agreement is hereby further amended by adding the following new Sections 7.20, 7.21 and 7.22 a


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