Exhibit 10.4

PIPELINES AND TANKAGE AGREEMENT

(East Texas Crude Logistics System)

This Pipelines and Tankage Agreement (this “Agreement”) is dated as of
November 7, 2012 by and between Delek Refining, Ltd., a Texas limited
partnership (the “Refining Entity”), and Delek Crude Logistics, LLC, a Texas
limited liability company (the “Logistics Entity”). Each of the Refining Entity
and the Logistics Entity are individually referred to herein as a “Party” and
collectively as the “Parties.”

RECITALS:

WHEREAS, the Logistics Entity is the owner of each of the Pipelines and the
Tankage; and

WHEREAS, the Refining Entity desires to continue to utilize the Pipelines and
the Tankage, and the Logistics Entity desires to provide transportation and
storage services to the Refining Entity, including the transportation of Crude
Oil to the Refinery, all on the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the covenants and obligations contained
herein, the Parties hereby agree as follows:

Section 1. Definitions.

Capitalized terms used throughout this Agreement and not otherwise defined
herein shall have the meanings set forth below.

“Actual Shipments” means the aggregate volume of Crude Oil that the Refining
Entity receives from the Pipelines.

“Additional Throughput Fee” has the meaning set forth in Section 2(b)(ii).

“Additional Throughput Threshold” means an aggregate amount of Crude Oil equal
to 50,000 bpd multiplied by the number of calendar days in the Contract Quarter.

“Affiliate” means, with to respect to a specified Person, any other Person
controlling, controlled by or under common control with that first Person. As
used in this definition, the term “control” includes (i) with respect to any
Person having voting securities or the equivalent and elected directors,
managers or Persons performing similar functions, the ownership of or power to
vote, directly or indirectly, voting securities or the equivalent representing
50% or more of the power to vote in the election of directors, managers or
Persons performing similar functions, (ii) ownership of 50% or more of the
equity or equivalent interest in any Person and (iii) the ability to direct the
business and affairs of any Person by acting as a general partner, manager or
otherwise. Notwithstanding the foregoing, for purposes of this Agreement, Delek
US and its subsidiaries (other than the Partnership and its subsidiaries),
including the Refining Entity, on the one hand, and the Partnership and its
subsidiaries, including the Logistics Entity, on the other hand, shall not be
considered Affiliates of each other.

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“Applicable Law” means any applicable statute, law, regulation, 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 of condition of any permit,
license or other operating authorization issued under any of the foregoing by,
or any determination by any Governmental Authority having or asserting
jurisdiction over the matter or matters in question, whether now or hereafter in
effect and in each case as amended (including, without limitation, all of the
terms and provisions of the common law of such Governmental Authority), as
interpreted and enforced at the time in question.

“Arbitrable Dispute” means any and all disputes, claims, controversies and other
matters in question between the Logistics Entity, on the one hand, and the
Refining Entity, on the other hand, required to be resolved by arbitration under
this Agreement.

“Base Throughput Fee” has the meaning set forth in Section 2(b)(i).

“bpd” means barrels per day.

“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York, New York are open for the general transaction of business.

“Capital Amortization Period” has the meaning set forth in Section 2(l)(iv).

“Capital Improvement” means (a) any modification, improvement, expansion or
increase in the capacity of the Pipelines or Tankage or any portion thereof, or
(b) any connection, or new point of receipt or delivery for Crude Oil, including
any terminals, lateral pipelines or extensions of the Pipelines.

“Claimant” shall have the meaning assigned to such term in Section 13(i).

“Confidential Information” means all information, documents, records and data
that a Party furnishes or otherwise discloses to the other Party (including any
such items furnished prior to the execution of this Agreement), together with
all analyses, compilations, studies, memoranda, notes or other documents,
records or data (in whatever form maintained, whether documentary, computer or
other electronic storage or otherwise) prepared by the receiving Party which
contain or otherwise reflect or are generated from such information, documents,
records and data; provided, however, that the term “Confidential Information”
does not include any information that (i) at the time of disclosure or
thereafter is or becomes generally available to or known by the public (other
than as a result of a disclosure by the receiving Party), (ii) is developed by
the receiving Party without reliance on any Confidential Information or (iii) is
or was available to the receiving Party on a nonconfidential basis from a source
other than the disclosing Party that, insofar as is known to the receiving Party
after reasonable inquiry, is not prohibited from transmitting the information to
the recipient by a contractual, legal or fiduciary obligation to the disclosing
Party.

“Contract Quarter” means a three-month period that commences on
January 1, April 1, July 1 or October 1, and ends on
March 31, June 30, September 30 or December 31, respectively, except that the
initial Contract Quarter shall commence on the Effective Date and end on
December 31, 2012 and the final Contract Quarter shall end on the last day of
the Term.

 

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“Contract Year” means a year that commences on July 1 and ends on the last day
of June in the following year, except that the initial Contract Year shall
commence on the Effective Date and the final Contract Year shall end on the last
day of the Term.

“Control” (including with correlative meaning, the term “controlled by”) means,
as used with respect to any Person, the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.

“Crude Oil” means the naturally occurring hydrocarbon mixtures but not including
recovered or recycled oils or any cracked materials.

“Deficiency Notice” has the meaning set forth in Section 7(a).

“Deficiency Payment” has the meaning set forth in Section 7(a).

“Delek US” means Delek US Holdings, Inc., a Delaware corporation.

“Effective Date” means November 7, 2012.

“Environmental Law” means all federal, state, and local laws, statutes, rules,
regulations, orders, judgments, ordinances, codes, injunctions, decrees,
Environmental Permits and other legally enforceable requirements and rules of
common law now or hereafter in effect, relating to pollution or protection of
human health and the environment including, without limitation, the federal
Comprehensive Environmental Response, Compensation, and Liability Act, the
Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery
Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic
Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the
Hazardous Materials Transportation Act, and other similar federal, state or
local environmental conservation and protection laws, each as amended from time
to time.

“Environmental Permit” means any permit, approval, identification number,
license, registration, consent, exemption, variance or other authorization
required under or issued pursuant to any applicable Environmental Law.

“Estimated Expansion Capital Expenditure” has the meaning set forth in
Section 2(l)(iii).

“Expansion Capital Expenditures” has the meaning set forth in Section 2(l)(iii).

“FERC” means the Federal Energy Regulatory Commission.

“FERC Oil Pipeline Index” means the FERC index system set forth in 18 C.F.R.
§ 342.318, as such regulations may be amended from time to time.

 

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“Force Majeure” means acts of God, strikes, lockouts or other industrial
disturbances, acts of the public enemy, wars, blockades, insurrections, riots,
storms, floods, washouts, arrests, the order of any court or Governmental
Authority having jurisdiction while the same is in force and effect, civil
disturbances, explosions, breakage, accident to machinery, storage tanks or
lines of pipe, inability to obtain or unavoidable delay in obtaining material or
equipment, inability to obtain Crude Oil because of a failure of third-party
pipelines, and any other causes whether of the kind herein enumerated or
otherwise not reasonably within the control of the Party claiming suspension and
which by the exercise of due diligence such Party is unable to prevent or
overcome.

“Force Majeure Notice” has the meaning set forth in Section 3(a).

“Force Majeure Party” has the meaning set forth in Section 3(a).

“Force Majeure Period” has the meaning set forth in Section 3(a).

“General Partner” means the general partner of the Partnership.

“Governmental Authority” means any federal, state, local or foreign government
or any provincial, departmental or other political subdivision thereof, or any
entity, body or authority exercising executive, legislative, judicial,
regulatory, administrative or other governmental functions or any court,
department, commission, board, bureau, agency, instrumentality or administrative
body of any of the foregoing.

“Initial Term” has the meaning set forth in Section 4(a).

“Liabilities” means any losses, liabilities, charges, damages, deficiencies,
assessments, interests, fines, penalties, costs and expenses (collectively,
“Costs”) of any kind (including reasonable attorneys’ fees and other fees, court
costs and other disbursements), including any Costs directly or indirectly
arising out of or related to any suit, proceeding, judgment, settlement or
judicial or administrative order and any Costs arising from compliance or
non-compliance with Environmental Law.

“Logistics Indemnitees” has the meaning set forth in Section 11(b).

“McMurrey Pipeline” means the six-inch to 12-inch diameter, approximately 65
mile, Crude Oil pipeline and pump system located in Smith, Gregg, Upshur and
Rusk Counties, Texas that runs between Longview, Texas and Tyler, Texas,
described more fully on Exhibit B.

“Minimum Storage Capacity” shall mean aggregate storage capacity of 600,000
barrels.

“Minimum Throughput Capacity” shall mean an aggregate amount of throughput
capacity equal to 47,000 bpd multiplied by the number of calendar days in the
Contract Quarter.

“Minimum Throughput Commitment” shall mean an aggregate amount of Crude Oil
equal to 35,000 bpd multiplied by the number of calendar days in the Contract
Quarter.

“Monthly Expansion Capital Amount” has the meaning set forth in Section
2(l)(iv).

 

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“Nettleton Pipeline” means the approximately 35 mile long, 8-inch to 10-inch
diameter crude oil pipeline system that runs from Longview, Texas to Tyler,
Texas, described more fully on Exhibit B.

“Notice Period” has the meaning set forth in Section 9(a).

“Omnibus Agreement” means that certain omnibus agreement dated as of November 7,
2012, among Delek US, on behalf of itself and the other Delek Entities (as
defined therein), the Refining Entity, Lion Oil Company, the Partnership, Paline
Pipeline Company, LLC, SALA Gathering Systems, LLC, Magnolia Pipeline Company,
LLC, El Dorado Pipeline Company, LLC, the Logistics Entity, Delek Marketing-Big
Sandy, LLC, Delek Logistics Operating, LLC, and the General Partner, as the same
may be amended from time to time.

“Open Assets” has the meaning set forth in Section 2(q).

“Parties” or “Party” has the meaning set forth in the preamble to this
Agreement.

“Partnership” means Delek Logistics Partners, LP, a Delaware limited
partnership.

“Partnership Change of Control” means Delek US ceases to Control the General
Partner.

“Person” means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.

“Pipelines” means the McMurrey Pipeline and the Nettleton Pipeline.

“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money
Rates Section as the Prime Rate.

“Receiving Party Personnel” has the meaning set forth in Section 13(j)(iv).

“Refinery” means the Refining Entity’s Crude Oil refinery in Tyler, Texas.

“Refining Indemnitees” has the meaning set forth in Section 11(a).

“Renewal Term” has the meaning set forth in Section 4(a).

“Respondent” shall have the meaning assigned to such term in Section 13(i).

“Restoration” has the meaning set forth in Section 8(b).

“Shortfall Payment” has the meaning set forth in Section 2(d).

“Special Damages” has the meaning set forth in Section 12.

“Storage Fee” has the meaning set forth in Section 2(c).

 

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“Suspension Notice” has the meaning set forth in Section 9(a).

“Tankage” means the crude oil tankage associated with the Pipelines listed on
Exhibit A and any replacements or expansions thereof.

“Term” has the meaning set forth in Section 4(a).

“Termination Notice” has the meaning set forth in Section 3(b).

“Throughput Fees” has the meaning set forth in Section 2(b)(ii).

Section 2. Agreement to Use Services Relating to Pipelines and Tankage.

The Parties intend to be strictly bound by the terms set forth in this
Agreement, which sets forth fees to the Logistics Entity to be paid by the
Refining Entity and requires the Logistics Entity to provide certain
transportation and storage services to the Refining Entity.

(a) Minimum Throughput Commitment. During each Contract Quarter during the Term
and subject to the terms and conditions of this Agreement, the Refining Entity
agrees that, commencing on the Effective Date, the Refining Entity will ship on
the Pipelines in the aggregate, an amount of Crude Oil equal to or greater than
the Minimum Throughput Commitment.

(b) Transportation Throughput Fees.

(i) The throughput fee initially applicable to transportation on the Pipelines
shall be $0.40 per barrel (the “Base Throughput Fee”). Subject to Sections 2(d)
and 2(j), the Refining Entity shall pay the Logistics Entity an amount equal to
the Base Throughput Fee multiplied by the Actual Shipments on the Pipelines.

(ii) In addition to the Base Throughput Fee, a throughput fee shall apply to
each barrel of Crude Oil transported on the Pipelines in excess of the
Additional Throughput Threshold in the amount of $0.20 per barrel (the
“Additional Throughput Fee” and together with the Base Throughput Fee, the
“Throughput Fees”). Subject to Sections 2(d) and 2(j), the Refining Entity shall
pay the Logistics Entity an amount equal to the Additional Throughput Fee
multiplied by the Actual Shipments on the Pipelines in excess of the Additional
Throughput Threshold.

(iii) The Base Throughput Fee and the Additional Throughput Fee shall be
adjusted on July 1 of each Contract Year commencing on July 1, 2013, by an
amount equal to the increase or decrease, if any, in the FERC Oil Pipeline
Index; provided, however, that no Throughput Fee shall be decreased below the
applicable initial Throughput Fee provided in this Section 2(b). If the FERC Oil
Pipeline Index is no longer published, the Logistics Entity and the Refining
Entity shall negotiate in good faith to agree on a new index that gives
comparable protection against inflation and the same method of adjustment for
increases or decreases in the new index shall be used to calculate increases or
decreases in the Throughput Fees. If the Refining Entity and the Logistics
Entity are unable to agree, a new index will be determined by arbitration in
accordance with Section 13(i) and the same method of adjustment for increases in
the new index shall be used to calculate increases in the Throughput Fees.

 

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(iv) During the Term of this Agreement, if new laws or regulations are enacted
that require the Logistics Entity to make substantial and unanticipated capital
expenditures (other than maintenance capital expenditures) with respect to
either of the Pipelines or the Tankage, the Parties will renegotiate one or both
of the Throughput Fees in good faith in order to compensate the Logistics Entity
on account of such incremental capital costs. If the Refining Entity and the
Logistics Entity are unable to agree upon a renegotiated Throughput Fee, the
renegotiated Throughput Fee will be determined by arbitration in accordance with
Section 13(i).

(c) Storage Fee. During the Term of this Agreement, the Refining Entity shall
pay the Logistics Entity a fee associated with the Tankage initially in the
amount of $250,000 per month in exchange for the Logistics Entity making
available to the Refining Entity 600,000 barrels of Crude Oil storage capacity
in the Tankage (the “Storage Fee”). The Crude Oil storage capacity provided to
the Refining Entity may be temporarily reduced by the Logistics Entity (without
any adjustment to the Storage Fee) as a result of repairs and/or maintenance on
storage tanks that reduce the storage capacity available in the Tankage, so long
as the reduced storage capacity will not result in the inability of the
Logistics Entity to provide the Minimum Storage Capacity. The amount of the
Storage Fee shall be adjusted on July 1 of each Contract Year commencing on
July 1, 2013, by an amount equal to the increase or decrease, if any, in the
FERC Oil Pipeline Index, provided, however, that the Storage Fee shall not be
decreased below the initial Storage Fee provided in this Section 2(c). If the
FERC Oil Pipeline Index is no longer published, the Refining Entity and the
Logistics Entity shall negotiate in good faith to agree an a new index that
gives comparable protection against inflation and the same method of adjustment
for increases or decreases in the new index shall be used to calculate increases
or decreases in the Storage Fee. If the Refining Entity and the Logistics Entity
are unable to agree upon a new index, the new index will be determined by
arbitration in accordance with Section 13(i). Notwithstanding the foregoing, in
the event that the Effective Date is any date other than the first day of a
calendar month, then the Storage Fee for the initial contract month shall be
prorated based upon the number of days remaining in such month.

(d) Shortfall. If, for any Contract Quarter, Actual Shipments are less than the
Minimum Throughput Commitment, then the Refining Entity shall pay the Logistics
Entity an amount (a “Shortfall Payment”) equal to the difference between (i) the
Minimum Throughput Commitment multiplied by the Base Throughput Fee and (ii) the
aggregate Throughput Fees for such Contract Quarter payable under
Section 2(b)(i) and Section 2(b)(ii). 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 Refining Entity of the Shortfall
Payment shall relieve the Refining Entity of any obligation to meet such Minimum
Throughput Commitment for the relevant Contract Quarter. The Parties further
acknowledge and agree that there shall not be any carry-over of volumes in
excess of the Minimum Throughput Commitment to any subsequent Contract Quarter.

 

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(e) Operating and Capital Expenses. Except as provided in the Omnibus Agreement,
during the Term and subject to the terms and conditions of this Agreement,
including Section 2(l), the Logistics Entity will bear one hundred percent
(100%) of all operating and capital expenses incurred in its operation of the
Pipelines and the Tankage. For avoidance of doubt, such operating expenses shall
include all tank inspections (including API 653 inspections) conducted after the
Effective Date on the tanks included within the Tankage, including any repairs
or tests or consequential remediation that may be required to be made to such
Tankage as a result of any discovery made during such inspections.

(f) Volumetric Gains and Losses. Title to the Crude Oil tendered by or on behalf
of the Refining Entity for transportation or storage hereunder will remain with
the Refining Entity at all times. The Refining Entity shall, during each
Contract Quarter, (i) be entitled to all volumetric gains in the Pipelines and
the Tankage and (ii) be responsible for all volumetric losses in the Pipelines
and the Tankage up to a maximum of 0.25%. The Logistics Entity shall be
responsible for all volumetric losses in excess of 0.25% in the Pipelines and
the Tankage during each Contract Quarter.

(g) Contamination. The Logistics Entity shall use commercially reasonable
efforts to avoid contamination of the Refining Entity’s Crude Oil with any
dissimilar Crude Oil and shall be liable to the Refining Entity for any change
in the quality of the Crude Oil transported on the Pipelines or stored in the
Tankage, in each case caused by the Logistics Entity or its Affiliates or any
third-party use of the Pipelines or the Tankage, as applicable. If the Logistics
Entity determines in good faith that the Refining Entity has delivered to the
Pipelines or the Tankage Crude Oil that has been contaminated by the existence
of and/or excess amounts of substances foreign to Crude Oil which could cause
harm to users of the contaminated Crude Oil, the Pipelines, the Tankage or the
Logistics Entity, the Refining Entity shall be responsible for removing the
Refining Entity’s contaminated Crude Oil from the Pipelines or the Tankage, as
applicable. Any liability or expense associated with the contamination of the
Refining Entity’s Crude Oil caused by the Refining Entity or its Affiliates
shall be borne by the Refining Entity, including any regulatory or judicial
proceeding arising out of or relating to such contamination.

(h) Obligations of the Logistics Entity. During the Term and subject to the
terms and conditions of this Agreement, the Logistics Entity agrees to own or
lease and operate and maintain in accordance with Section 8(b) the assets
necessary to accept deliveries from the Refining Entity and to provide the
services required under this Agreement.

(i) Taxes. The Refining Entity will pay all taxes, import duties, license fees
and other charges by any Governmental Authority levied on or with respect to the
Crude Oil delivered by the Refining Entity for transportation by the Logistics
Entity in the Pipelines including, but not limited to, any state gross receipts
and compensating (use) taxes; provided, however, that the Refining Entity shall
not be liable hereunder for taxes (including ad valorem taxes) assessed against
the Logistics Entity based on the Logistics Entity’s income or ownership of the
Pipelines and Tankage. Should any Party be required to pay or collect any taxes,
duties, charges and or assessments pursuant to any federal, state, county or
municipal law or authority now in effect or hereafter to become effective which
are payable by the other Party pursuant to this Section 2(i), the proper Party
shall promptly reimburse the other Party therefor.

 

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(j) Invoicing and Timing of Payments. The Logistics Entity shall invoice the
Refining Entity monthly (or in the case of Shortfall Payments, quarterly),
including for an estimated amount of Additional Throughput Fees calculated on an
average basis for such month (with a true up in the invoice for the final month
of each Contract Quarter for any overpayments or underpayments of Additional
Throughput Fees during such Contract Quarter). The Refining Entity will make
payments to the Logistics Entity by electronic payment with immediately
available funds on a monthly (or in the case of Shortfall Payments, quarterly)
basis during the Term with respect to services rendered by the Logistics Entity
under this Agreement in the prior month (or, in the case of Shortfall Payments,
Contract Quarter) upon the later of (i) ten (10) days after its receipt of such
invoice and (ii) thirty (30) days following the end of the calendar month (or in
the case of Shortfall Payments, Calendar Quarter) during which the invoiced
services were performed. Any past due payments owed by the Refining Entity to
the Logistics Entity shall accrue interest, payable on demand, at the Prime Rate
from the due date of the payment through the actual date of payment. Payment of
any Throughput Fees or Shortfall Payment pursuant to this Section 2 shall be
made by wire transfer of immediately available funds to an account designated in
writing by the Logistics Entity. 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.

(k) Change in Pipelines’ Direction; Product Service or Origination and
Destination. Without the Refining Entity’s prior written consent, which shall
not be unreasonably withheld, conditioned or delayed, the Logistics Entity shall
not (i) reverse the direction of any of the Pipelines; (ii) change, alter or
modify the product service of any of the Pipeline operations; or (iii) change,
alter or modify the origination or destination of any of the Pipeline
operations; provided, however, that the Logistics Entity may take any necessary
emergency action to prevent or remedy a release of Crude Oil from either of the
Pipelines without obtaining the consent required by this Section 2(k). The
Refining Entity may request that the Logistics Entity reverse the direction of
either of the Pipelines, and the Logistics Entity shall determine, in its sole
discretion, whether to complete the proposed reversal, considering, among other
things, whether (i) the Refining Entity agrees to bear, through adjustments to
the Throughput Fees or otherwise, (1) the additional costs and expenses incurred
by the Logistics Entity as a result of such change in direction (both to reverse
and re-reverse) and (2) all costs arising out of the Logistics Entity’s
inability to perform under any transportation service contract due to the
reversal of the direction of either of the Pipelines and (ii) the Parties agree
to adjustment, if appropriate based on the operational capabilities of the
reconfigured Pipelines, of the Minimum Throughput Capacity.

(l) Capital Improvements. During the term of this Agreement, the Refining Entity
shall be entitled to designate Capital Improvements to be made to the Pipelines
and the Tankage. The following provisions shall set forth the procedures
pursuant to which Capital Improvements designated by the Refining Entity may be
constructed:

(i) For any Capital Improvement designated by the Refining Entity, the Refining
Entity shall submit a written proposal, including all specifications then
available to it, for the proposed Capital Improvement to the Pipelines and/or
the Tankage, as the case may be.

(ii) The Logistics Entity will review such proposal to determine, in its sole
discretion, whether it will consent to proceed with the proposed Capital
Improvement.

 

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(iii) Should the Logistics Entity determine to proceed and construct or cause to
be constructed the approved Capital Improvement, the Logistics Entity will
obtain bids from two or more general contractors reasonably acceptable to the
Refining Entity for the construction of the Capital Improvement. Based upon the
bids, the Logistics Entity will notify the Refining Entity of the Logistics
Entity’s estimate of the total cost necessary to construct such Capital
Improvement (which amount shall include the costs of capital and any other costs
necessary to place such Capital Improvement in service) (“Estimated Expansion
Capital Expenditure”). Within 30 days of such notice, the Refining Entity will
notify the Logistics Entity whether or not the Refining Entity agrees to such
Estimated Expansion Capital Expenditure. In the event the Refining Entity does
not agree with such Estimated Expansion Capital Expenditure, the Parties shall
work together in good faith to reach agreement on the Estimated Expansion
Capital Expenditure (the agreed amount is referred to as the “Expansion Capital
Expenditure”); provided that, in the event the Parties do not reach such
agreement within 60 days of the notice provided under the second sentence of
this Section 2(l)(iii), the Refining Entity shall be entitled to proceed with
the construction of the Capital Improvement in accordance with Section 2(l)(v)
below.

(iv) Prior to beginning any construction on the Capital Improvement, (1) the
Logistics Entity shall have received all necessary regulatory approvals, (2) the
Logistics Entity and the Refining Entity shall have agreed on (A) an additional
monthly payment amount to be paid by the Refining Entity to the Logistics Entity
(the “Monthly Expansion Capital Amount”) which amount (x) shall be payable over
a mutually agreed to term not to exceed the then remaining balance of the
Initial Term (or the then current Renewal Term) plus any Renewal Term to which
the Refining Entity is then committed or shall then commit (the “Capital
Amortization Period”), and (y) shall be sufficient to provide the Logistics
Entity the equivalent of a rate of return equal to the Prime Rate plus an
additional rate of return to be agreed to by the Parties over the Capital
Amortization Period on the Expansion Capital Expenditure after taking into
account the increased cash flows to the Logistics Entity reasonably anticipated
to be received by the Logistics Entity from the Refining Entity (or from a third
party pursuant to a direct contractual commitment to the Logistics Entity) in
connection with such Capital Improvement, or (B) another adjustment to the
Throughput Fees or the Storage Fee, as applicable, as the Parties may agree and
(3) the Parties shall have agreed on any adjustment to the Minimum Throughput
Commitment, the Minimum Throughput Capacity or the Minimum Storage Capacity, as
the case may be. The Monthly Expansion Capital Amount, if applicable, shall be
billed and paid monthly following the commencement of operations of the Capital
Improvement and the Refining Entity’s obligation to pay the Monthly Expansion
Capital Amount shall survive the termination of this Agreement (other than a
termination in connection with a breach of this Agreement by the Logistics
Entity or a Force Majeure event affecting the ability of the Logistics Entity to
provide services under this Agreement). In connection with the construction of
any Capital Improvement pursuant to this Section 2(l)(iv), the Refining Entity
shall be entitled to participate in all stages of planning, scheduling,
implementing, and oversight of the construction. The Refining Entity shall also
be entitled to audit all expenditures incurred in connection with the Capital
Improvement and the Logistics Entity shall provide all invoices and other
documentation reasonably requested by the Refining Entity for this purpose.

 

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(v) If for any reason the Capital Improvement shall not be constructed pursuant
to Section 2(l)(iv) above, and such Capital Improvement is in accordance with
applicable required engineering and regulatory standards, and could not
reasonably be expected to have a material adverse impact on the operations or
efficiency of the Pipelines or the Tankage or result in any material additional
unreimbursed costs to the Logistics Entity, then the Refining Entity may proceed
with the construction and financing of the Capital Improvement and, upon
completion of construction, the Refining Entity shall be the owner and operator
of such Capital Improvement. The Parties agree that any Capital Improvement
constructed by the Refining Entity pursuant to this Section 2(l)(v) shall be
treated as the separate property of Refining Entity. The Logistics Entity shall
cooperate with the Refining Entity in ensuring that the Capital Improvement
shall operate as intended, including by operating and maintaining all necessary
connections to the Pipelines and the Tankage, subject to the Refining Entity’s
reimbursing the Logistics Entity on a monthly basis for any incremental expenses
arising from operating or maintaining such connections. The Refining Entity
shall indemnify the Logistics Entity for any Liabilities resulting from the
construction, ownership and operation by the Refining Entity of any Capital
Improvement constructed by the Refining Entity pursuant to this Section 2(l)(v).

(vi) Upon completion of the construction of such Capital Improvement, the
Logistics Entity or the Refining Entity, as applicable, will own such Capital
Improvement, and will operate and maintain such Capital Improvement in
accordance with Applicable Law and recognized industry standards.

(m) Notification of Utilization. Upon request by the Logistics Entity, the
Refining Entity will provide to the Logistics Entity written notification of the
Refining Entity’s reasonable good faith estimate of its anticipated future
utilization of the Pipelines and the Tankage.

(n) Scheduling and Accepting Deliveries. The Logistics Entity will schedule
movements and accept deliveries of Crude Oil in a manner that permits the
Refining Entity to utilize each of the Pipelines and the Tankage in
substantially the same manner as it did prior to the Effective Date.

(o) Business Interruption Insurance. The Refining Entity shall maintain
commercially reasonable business interruption insurance for the benefit of the
Refinery and the Pipelines and Tankage for so long as the Partnership is a
consolidated subsidiary of Delek US. Allocation of benefits under such business
interruption insurance policy shall be proportionate to the loss in operating
margin sustained by the Refining Entity and the Logistics Entity as a result of
the interruption.

 

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(p) Insurance (Other than Business Interruption Insurance). During the Term of
this Agreement, each of the Logistics Entity and the Refining Entity shall at
all times carry and maintain, or cause to be carried and maintained, with
reputable insurance companies reasonably acceptable to the other Party, with
commercially reasonable insurance coverages and limits.

(q) Marketing of Transportation and Storage Services to Third Parties. During
the Term, the Logistics Entity may provide transportation services to third
parties on the Pipelines and storage services to third parties in the Tankage,
provided that, (i) the provision of such transportation and storage services to
third parties is not reasonably likely to negatively affect the Refining
Entity’s ability to use either of the Pipelines or the Tankage in accordance
with the terms of this Agreement in any material respect, (ii) prior to any
third party use of either of the Pipelines or the Tankage or the entry into any
agreement with respect thereto, the Logistics Entity shall have received prior
written consent from the Refining Entity with respect to such third party usage
or the entry into such agreement, as applicable, not to be unreasonably
withheld, conditioned or delayed, (iii) to the extent such third-party usage
reduces the storage capacity available to the Refining Entity below the Minimum
Storage Capacity, the Storage Fee shall be reduced for such period as such
storage services are provided to third parties by a dollar amount equal to:
(1) the number of barrels of storage capacity that the Logistics Entity is
making available per month in the Tankage for such third parties, multiplied by
(2) $0.4167 (which amount shall be adjusted in accordance with the adjustments
to the Storage Fee provided for in Sections 2(c), (k) and (l) above, if
applicable) and (iv) to the extent such third-party usage reduces the ability of
the Logistics Entity to provide the Minimum Throughput Capacity, the Minimum
Throughput Commitment shall be proportionately reduced to the extent of the
difference between the Minimum Throughput Capacity and the amount that can be
throughput in the Pipelines (prorated for the portion of the Contract Quarter
during which the Minimum Throughput Capacity was unavailable). Notwithstanding
the foregoing, to the extent the Logistics Entity is not using any portion of
the Pipelines or the Tankage (the “Open Assets”) during a Force Majeure event
set forth in Section 3 or the Notice Period set forth in Section 9, the
Logistics Entity may provide transportation and/or storage services to third
parties on the Open Assets pursuant to one or more third-party agreements
without the consent of the Refining Entity, and the Minimum Throughput
Commitment and the Storage Fee will be reduced to the extent of such third-party
usage as set forth above; provided that such third-party agreements and related
services shall terminate following the end of the Force Majeure Period or the
restoration of Refinery operations, as applicable.

Section 3. Force Majeure.

(a) In the event that either Party is rendered unable, wholly or in part, by a
Force Majeure event to perform its obligations under this Agreement, then upon
the delivery by such Party (the “Force Majeure Party”) of written notice (a
“Force Majeure Notice”) and full particulars of the Force Majeure event within a
reasonable time after the occurrence of the Force Majeure event relied on, the
obligations of the Parties, to the extent they are affected by the Force Majeure
event, shall be suspended for the duration of any inability so caused; provided
that (i) prior to the third anniversary of the Effective Date, the Refining
Entity shall be required to continue to make payments (1) for the Throughput
Fees for volumes actually delivered under this Agreement, (2) for the Storage
Fee, and (3) for any Shortfall Payments unless, in the case of (2) and (3), the
Force Majeure event is an event that adversely affects the Logistics Entity’s

 

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ability to perform the services it is required to perform under this Agreement,
in which case, as applicable, the Storage Fees shall only be paid to the extent
the Refining Entity utilizes the Tankage for the storage of its Crude Oil during
the applicable month and instead of Shortfall Payments, Throughput Fees shall
only be paid as provided under (i)(1) above, and (ii) from and after the third
anniversary of the Effective Date, the Refining Entity shall be required to
continue to make payments (1) for the Throughput Fees for volumes actually
delivered under this Agreement and (2) for the Storage Fee to the extent the
Refining Entity utilizes the Tankage for the storage of its Crude Oil during the
applicable month. The Force Majeure Party shall identify in such Force Majeure
Notice the approximate length of time that it believes in good faith such Force
Majeure event shall continue (the “Force Majeure Period”). The Refining Entity
shall be required to pay any amounts accrued and due under this Agreement at the
time of the Force Majeure event. The cause of the Force Majeure event shall so
far as possible be remedied with all reasonable dispatch, except that neither
Party shall be compelled to resolve any strikes, lockouts or other industrial
disputes other than as it shall determine to be in its best interests. Prior to
the third anniversary of the Effective Date, any suspension of the obligations
of the Parties under this Section 3(a) as a result of a Force Majeure event that
adversely affects the Logistics Entity’s ability to perform the services it is
required to perform under this Agreement shall extend the Term for the same
period of time as such Force Majeure event continues (up to a maximum of one
year) unless this Agreement is terminated under Section 3(b).

(b) If the Force Majeure Party advises in any Force Majeure Notice that it
reasonably believes in good faith that the Force Majeure Period shall continue
for more than twelve (12) consecutive months beyond the third anniversary of the
Effective Date, then at any time after the delivery of such Force Majeure
Notice, either Party may deliver to the other Party a notice of termination (a
“Termination Notice”), which Termination Notice shall become effective not
earlier than twelve (12) months after the later to occur of (i) the delivery of
the Termination Notice and (ii) the third anniversary of the Effective Date;
provided, however, that such Termination Notice shall be deemed cancelled and of
no effect if the Force Majeure Period ends before the Termination Notice becomes
effective; provided, further, that upon the cancellation of any Termination
Notice, the Parties’ respective obligations hereunder shall resume as soon as
reasonably practicable thereafter, and the Term shall be extended by the same
period of time as is required for the Parties to resume such obligations. After
the third anniversary of the Effective Date and following delivery of a
Termination Notice the Logistics Entity may terminate this Agreement, to the
extent affected by the Force Majeure event, upon sixty (60) days prior written
notice to the Refining Entity in order to enter into an agreement to provide any
third party the services provided to the Refining Entity under this Agreement;
provided, however, that the Logistics Entity shall not have the right to
terminate this Agreement for so long as the Refining Entity continues to make
Shortfall Payments.

Section 4. Effectiveness and Term.

(a) This Agreement shall have an initial term of five (5) years, commencing on
the Effective Date (the “Initial Term”). Thereafter, the Refining Entity shall
have a unilateral option to extend this Agreement for two additional five
(5) year periods on the same terms and conditions set forth herein (each, a
“Renewal Term”). The Initial Term and any Renewal Terms are sometimes referred
to collectively herein as the “Term.” In order to exercise its option to extend
this Agreement for a Renewal Term, the Refining Entity shall notify the
Logistics Entity in writing not more than twenty-four (24) months and not less
than twelve (12) months prior to the expiration of the Initial Term or any
Renewal Term, as applicable.

 

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(b) This Agreement may be terminated and the transactions contemplated hereby
may be abandoned at any time upon written notice by either Party in the event
the other Party commits a material breach of or materially defaults under the
terms of this Agreement, and such breach or default is not cured (or a plan to
cure such breach or default reasonably satisfactory to the non-breaching or
non-defaulting Party has been adopted and is being diligently pursued by the
breaching or defaulting Party) within fifteen (15) calendar days after receipt
by the breaching Party of written notice from the non-breaching Party of such
breach or default.

Section 5. Right to Enter into a New Agreement.

In the event that the Refining Entity fails to exercise its option to extend
this Agreement for any Renewal Term, the Logistics Entity shall have the right
to negotiate to enter into one or more new pipelines and tankage agreements with
one or more third parties to begin after the date of termination, provided that
during the period from the date of the Refining Entity’s failure to provide
written notice pursuant to Section 4 to the date of termination of this
Agreement, the Refining Entity will have the right to enter into a new pipelines
and tankage agreement with the Logistics Entity on commercial terms that
substantially match the terms upon which the Logistics Entity proposes to enter
into an agreement with a third party for similar services with respect to all or
a material portion of the Pipelines and the Tankage. In such circumstances, the
Logistics Entity shall give the Refining Entity forty-five (45) days prior
written notice of any proposed new pipelines and tankage agreement with a third
party, and such notice shall inform the Refining Entity of the fee schedules,
tariffs, duration and any other terms of the proposed third party agreement and
the Refining Entity shall have forty-five (45) days following receipt of such
notice to agree to the terms specified in the notice or the Refining Entity
shall lose the rights specified by this Section 5 with respect to the assets
that are the subject of such notice.

Section 6. 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, UPS, or DHL Worldwide,
one (1) Business Day after deposit therewith prepaid; or (d) if by e-mail, one
Business day after delivery with receipt confirmed. All notices will be
addressed to the Parties at the respective addresses as follows:

if to the Refining Entity:

Delek Refining, Ltd.

c/o Delek US Holdings, Inc.

7102 Commerce Way

Brentwood, TN 37027

Attn: General Counsel

Telecopy No: (615) 435-1271

Email:

 

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with a copy, which shall not constitute notice, to:

Delek Refining, Ltd.

c/o Delek US Holdings, Inc.

7102 Commerce Way

Brentwood, TN 37027

Attn: President

Telecopy No: (615) 435-1271

Email:

if to the Logistics Entity:

Delek Crude Logistics, LLC

c/o Delek Logistics GP, LLC

7102 Commerce Way

Brentwood, TN 37027

Attn: General Counsel

Telecopy No: (615) 435-1271

Email:

with a copy, which shall not constitute notice, to:

Delek Crude Logistics, LLC

c/o Delek Logistics GP, LLC

7102 Commerce Way

Brentwood, TN 37027

Attn: President

Telecopy No: (615) 435-1271

Email:

or to such other address or to such other person as either Party will have last
designated by notice to the other Party.

Section 7. Deficiency Payments.

(a) As soon as practicable following the end of each calendar month under this
Agreement, the Logistics Entity shall deliver to the Refining Entity a written
notice (the “Deficiency Notice”) detailing any failure of the Refining Entity to
meet its obligations under Section 2(a), Section 2(b)(i), Section 2(b)(ii),
Section 2(c), Section 2(d), Section 2(i), Section 2(k), Section 2(l) or
Section 8(c) of this Agreement. The Deficiency Notice shall (i) specify in
reasonable detail the nature of any deficiency and (ii) specify the approximate
dollar amount that the Logistics Entity believes would have been paid by the
Refining Entity to the Logistics Entity if the Refining Entity had complied with
its obligations under Section 2(a), Section 2(b)(i),

 

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Section 2(b)(ii), Section 2(c), Section 2(d), Section 2(h), Section 2(i),
Section 2(k), Section 2(l) and Section 8(c) of this Agreement (the “Deficiency
Payment”). The Refining Entity shall pay the Deficiency Payment to the Logistics
Entity upon the later of: (i) ten (10) days after its receipt of the Deficiency
Notice and (ii) thirty (30) days following the end of the calendar month during
which the Deficiency Notice was delivered.

(b) If the Refining Entity disagrees with the Deficiency Notice, then, following
the payment of the undisputed portion of the Deficiency Payment to the Logistics
Entity, a senior officer of the Refining Entity and a senior officer of the
Logistics Entity shall meet or communicate by telephone at a mutually acceptable
time and place, and thereafter as often as they reasonably deem necessary and
shall negotiate in good faith to attempt to resolve any differences that they
may have with respect to matters specified in the Deficiency Notice. If such
differences are not resolved within thirty (30) days following the payment of
any Deficiency Payment, the Refining Entity and the Logistics Entity shall,
within forty-five (45) days following the payment of such Deficiency Payment,
submit any and all matters which remain in dispute and which were properly
included in the Deficiency Notice to arbitration in accordance with Section 13.
During the 60-day period following the receipt of the Deficiency Notice, the
Refining Entity shall have the right to inspect and audit the working papers of
the Logistics Entity relating to such Deficiency Payment.

(c) If it is determined by arbitration in accordance with Section 13 that the
Refining Entity was required to make any or all of the disputed portion of the
Deficiency Payment, the Refining Entity shall promptly pay to the Logistics
Entity such amount, together with interest thereon from the dated provided in
the last sentence of Section 7(a) at the Prime Rate, in immediately available
funds.

Section 8. Capabilities of Assets.

(a) Interruption of Service. The Logistics Entity shall use reasonable
commercial efforts to minimize the interruption of service on the Pipelines or
at the Tankage and shall use its best efforts to minimize the impact of any such
interruption on the Refining Entity. The Logistics Entity shall inform the
Refining Entity at least 60 days in advance (or promptly, in the case of an
unplanned interruption) of any anticipated partial or complete interruption of
service (i) on any Pipeline or (ii) of the Tankage, including relevant
information about the nature, extent, cause and expected duration of the
interruption and the actions the Logistics Entity is taking to resume full
operations, provided that the Logistics Entity shall not have any liability for
any failure to notify, or delay in notifying, the Refining Entity of any such
matters except to the extent the Refining Entity has been materially damaged by
such failure or delay.

(b) Maintenance and Repair Standards. Subject to Force Majeure and interruptions
for routine repair and maintenance consistent with industry standards, the
Logistics Entity shall maintain (i) the Pipelines with sufficient aggregate
capacity to throughput a volume of Crude Oil at least equal to the Minimum
Throughput Capacity and (ii) the Tankage with a capacity sufficient to store a
volume of Crude Oil at least equal to the Minimum Storage Capacity. The
Logistics Entity’s obligations may be temporarily suspended during the
occurrence of, and for the entire duration of, a Force Majeure or interruptions
for routine repair and maintenance consistent with industry standards that
prevent the Logistics Entity from providing the Minimum

 

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Throughput Capacity or storing the Minimum Storage Capacity. To the extent the
Refining Entity is prevented for 30 or more days in any Contract Year from
throughputting volumes equal to the full Minimum Throughput Capacity or
terminalling volumes equal to the Minimum Storage Capacity for reasons of Force
Majeure or other interruption of service affecting the facilities or assets of
the Logistics Entity, then the Refining Entity’s Minimum Throughput Commitment
shall be proportionately reduced to the extent of the difference between the
Minimum Throughput Capacity and the amount that the Logistics Entity can
effectively throughput in the Pipelines (prorated for the portion of the
Contract Quarter during which the Minimum Throughput Capacity was unavailable),
regardless of whether actual throughput prior to the reduction was below the
Minimum Throughput Commitment, and/or its Storage Fee shall be reduced by an
amount of $0.4167 per barrel (which amount shall be adjusted in accordance with
the adjustments to the Storage Fee provided for in Sections 2(c), (k) and
(l) above, if applicable, and prorated for the portion of the applicable month
during which such storage was unavailable) for each barrel less than the Minimum
Storage Capacity that the Logistics Entity is unable to terminal at the Tankage
regardless of whether the Refining Entity actually used such storage capacity.
At such time as the Logistics Entity is capable of throughputting volumes equal
to the full Minimum Throughput Capacity or terminalling volumes equal to the
Minimum Storage Capacity, as applicable, the Refining Entity’s obligation to
throughput the full Minimum Throughput Commitment and to pay the full Storage
Fee shall be restored. If for any reason, including, without limitation, a Force
Majeure event, the throughput of the Pipelines or storage capacity of the
Tankage should fall below the Minimum Throughput Capacity or the Minimum Storage
Capacity, respectively, then with due diligence and dispatch, the Logistics
Entity shall make repairs to the Pipelines and/or the Tankage to restore the
capacity of the Pipelines to that required for throughput of the Minimum
Throughput Capacity and/or the Tankage to that required for terminalling of the
Minimum Storage Capacity (“Restoration”). Except as provided below in
Section 8(c), all of such Restoration shall be at the Logistics Entity’s cost
and expense, unless the damage creating the need for such repairs was caused by
the negligence or willful misconduct of the Refining Entity, its employees,
agents or customers.

(c) Capacity Resolution. In the event of the failure of the Logistics Entity to
maintain (i) the Pipelines with sufficient capacity to throughput the Minimum
Throughput Capacity or (ii) the Tankage with a capacity sufficient to terminal a
volume of Crude Oil at least equal to the Minimum Storage Capacity, then either
Party shall have the right to call a meeting between executives of both Parties
by providing at least two (2) Business Days’ advance written notice. Any such
meeting shall be held at a mutually agreeable location and will be attended by
executives of both Parties each having sufficient authority to commit his or her
respective Party to a Capacity Resolution (hereinafter defined). At the meeting,
the Parties will negotiate in good faith with the objective of reaching a joint
resolution for the Restoration which will, among other things, specify steps to
be taken by the Logistics Entity to fully accomplish the Restoration and the
deadlines by which the Restoration must be completed (the “Capacity
Resolution”). Without limiting the generality of the foregoing, the Capacity
Resolution shall set forth an agreed upon time schedule for the Restoration
activities. Such time schedule shall be reasonable under the circumstances,
consistent with customary pipeline transportation and terminal industry
standards and shall take into consideration the Logistic Entity’s economic
considerations relating to costs of the repairs and the Refining Entity’s
requirements concerning its refining and marketing operations. The Logistics
Entity shall use commercially reasonable efforts to continue to provide storage
and throughput of the Refining Entity’s Crude Oil, to the extent the Pipelines

 

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and Tankage have capability of doing so, during the period before Restoration is
completed. In the event that the Refining Entity’s economic considerations
justify incurring additional costs to complete the Restoration in a more
expedited manner than the time schedule determined in accordance with the
preceding sentence, the Refining Entity may require the Logistics Entity to
expedite the Restoration to the extent reasonably possible, subject to the
Refining Entity’s payment, in advance, of the estimated incremental costs to be
incurred as a result of the expedited time schedule. In the event the Parties
agree to an expedited Restoration plan wherein the Refining Entity agrees to
fund a portion of the Restoration cost, then neither Party shall have the right
to terminate this Agreement pursuant to Section 3(b) above so long as such
Restoration is completed with due diligence and dispatch, and the Refining
Entity shall pay its portion of the Restoration Cost to the Logistics Entity in
advance based on a good faith estimate based on reasonable engineering
standards. Upon completion, the Refining Entity shall pay the difference between
the actual portion of Restoration costs to be paid by the Refining Entity
pursuant to this Section 8(c) and the estimated amount paid under the preceding
sentence within thirty (30) days after receipt of the Logistics Entity’s invoice
therefor, or, if appropriate, the Logistics Entity shall pay the Refining Entity
the excess of the estimate paid by the Refining Entity over the Logistics
Entity’s actual costs as previously described within thirty (30) days after
completion of the Restoration.

Section 9. Suspension of Refinery Operations

(a) From and after the second anniversary of the Effective Date, in the event
that the Refining Entity decides to permanently or indefinitely suspend refining
operations at the Refinery for a period that shall continue for at least twelve
(12) consecutive months, the Refining Entity may provide written notice to the
Logistics Entity of the Refining Entity’s intent to terminate this Agreement
(the “Suspension Notice”). Such Suspension Notice shall be sent at any time (but
not prior to the second anniversary of the Effective Date) after the Refining
Entity has notified the Logistics Entity 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 Refining Entity notifies the Logistics Entity, more than
two months prior to the expiration of the Notice Period, of its intent to resume
operations at the Refinery, then the Suspension Notice shall be deemed revoked
and this Agreement shall continue in full force and effect as if such Suspension
Notice had never been delivered. During the Notice Period, the Refining Entity
shall remain liable for Deficiency Payments. Subject to Section 9(b), during the
Notice Period, the Logistics Entity may terminate this Agreement upon sixty
(60) days prior written notice to the Refining entity in order to enter into an
agreement to provide any third party the services provided to the Refining
Entity under this Agreement.

(b) If refining operations at the Refinery are suspended for any reason
(including refinery turnaround operations and other scheduled maintenance), then
the Refining Entity shall remain liable for Deficiency Payments under this
Agreement for the duration of the suspension, unless and until this Agreement is
terminated as provided above. The Refining Entity shall provide at least thirty
(30) days’ prior written notice of any suspension of operations at the Refinery
due to a planned turnaround or scheduled maintenance, provided that the Refining
Entity shall not have any liability for any failure to notify, or delay in
notifying, the Logistics Entity of any such suspension except to the extent the
Logistics Entity has been materially damaged by such failure or delay.

 

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(c) In the event the operations of the Refinery are suspended under this
Section 9 or as a result of a Force Majeure event, the Logistics Entity shall
have the right to provide transportation and storage services to third parties
on the terms and conditions set forth in Section 2(q).

Section 10. Regulatory Matters

(a) The Parties are entering into this Agreement in reliance upon and shall
fully comply with all Applicable Law which directly or indirectly affects the
services provided hereunder. Each Party shall be responsible for compliance with
all Applicable Law associated with such Party’s respective performance hereunder
and the operation of such Party’s facilities. In the event any action or
obligation imposed upon a Party under this Agreement shall at any time be in
conflict with any requirement of Applicable Law, then this Agreement shall
immediately be modified to conform the action or obligation so adversely
affected to the requirements of the Applicable Law, and all other provisions of
this Agreement shall remain effective.

(b) If during the Term, any new Applicable Law becomes effective or any existing
Applicable Law or its interpretations is materially changed, which change is not
addressed by another provision of this Agreement and which has a material
adverse economic impact upon a Party, either Party, acting in good faith, shall
have the option to request renegotiation of the relevant provisions of this
Agreement with respect to future performance. The Parties shall then meet to
negotiate in good faith amendments to this Agreement that will conform to the
new Applicable Law while preserving the Parties’ economic, operational,
commercial and competitive arrangements in accordance with the understandings
set forth herein.

(c) If during the Term, the Logistics Entity is required, under Applicable Law,
to file one or more tariffs with any Governmental Authority, in order to provide
the services provided under this Agreement, the Refining Entity hereby agrees
that, if the services to be provided under such tariff or tariffs is provided in
conformance with this Agreement, including but not limited to the rates provided
hereunder, the Refining Entity will not oppose, or assist any other party in
opposing, the filing of such tariff or tariffs.

Section 11. Indemnification

(a) The Logistics Entity shall defend, indemnify and hold harmless the Refining
Entity, its Affiliates, and their respective directors, officers, employees,
representatives, agents, contractors, successors and permitted assigns
(collectively, the “Refining Indemnitees”) from and against any Liabilities
directly or indirectly arising out of (i) any breach by the Logistics Entity of
any covenant or agreement contained herein or made in connection herewith or any
representation or warranty of the Logistics Entity made herein or in connection
herewith proving to be false or misleading, (ii) any failure by the Logistics
Entity, its Affiliates or any of their respective employees, representatives,
agents or contractors to comply with or observe any Applicable Law, or
(iii) injury, disease, or death of any Person or damage to or loss of any

 

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property, fine or penalty, any of which is caused by the Logistics Entity, its
Affiliates or any of their respective employees, representatives, agents or
contractors in the exercise of any of the rights granted hereunder or the
handling, storage, transportation or disposal of any Crude Oil hereunder, except
to the extent that such injury, disease, death, or damage to or loss of property
was caused by the gross negligence or willful misconduct on the part of the
Refining Indemnitees, their Affiliates or any of their respective employees,
representatives, agents or contractors. Notwithstanding the foregoing, the
Logistics Entity’s liability to the Refining Indemnitees pursuant to this
Section 11(a) shall be net of any insurance proceeds actually received by the
Refining Indemnitees or any of their respective Affiliates from any third Person
with respect to or on account of the damage or injury which is the subject of
the indemnification claim. The Refining Entity agrees that it shall, and shall
cause the other Refining Indemnitees to, (i) use all commercially reasonable
efforts to pursue the collection of all insurance proceeds to which any of the
Refining Indemnitees are entitled with respect to or on account of any such
damage or injury, (ii) notify the Logistics Entity of all potential claims
against any third Person for any such insurance proceeds, and (iii) keep the
Logistics Entity fully informed of the efforts of the Refining Indemnitees in
pursuing collection of such insurance proceeds.

(b) The Refining Entity shall defend, indemnify and hold harmless the Logistics
Entity, its Affiliates, and their respective directors, officers, employees,
representatives, agents, contractors, successors and permitted assigns
(collectively, the “Logistics Indemnitees”) from and against any Liabilities
directly or indirectly arising out of (i) any breach by the Refining Entity of
any covenant or agreement contained herein or made in connection herewith or any
representation or warranty of the Refining Entity made herein or in connection
herewith proving to be false or misleading, (ii) any failure by the Refining
Entity, its Affiliates or any of their respective employees, representatives,
agents or contractors to comply with or observe any Applicable Law, or
(iii) injury, disease, or death of any person or damage to or loss of any
property, fine or penalty, any of which is caused by the Refining Entity, its
Affiliates or any of their respective employees, representatives, agents or
contractors in the exercise of any of the rights granted hereunder or the
handling, storage, transportation or disposal of any Crude Oil hereunder, except
to the extent that such injury, disease, death, or damage to or loss of property
was caused by the gross negligence or willful misconduct on the part of the
Logistics Indemnitees, their Affiliates or any of their respective employees,
representatives, agents or contractors. Notwithstanding the foregoing, the
Refining Entity’s liability to the Logistics Indemnitees pursuant to this
Section 11(b) shall be net of any insurance proceeds actually received by the
Logistics Indemnitees or any of their respective Affiliates from any third
Person with respect to or on account of the damage or injury which is the
subject of the indemnification claim. The Logistics Entity agrees that it shall,
and shall cause the other Logistics Indemnitees to, (i) use all commercially
reasonable efforts to pursue the collection of all insurance proceeds to which
any of the Logistics Indemnitees are entitled with respect to or on account of
any such damage or injury, (ii) notify the Refining Entity of all potential
claims against any third Person for any such insurance proceeds, and (iii) keep
the Refining Entity fully informed of the efforts of the Logistics Indemnitees
in pursuing collection of such insurance proceeds.

(c) THE FOREGOING INDEMNITIES ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES
IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY
EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR
OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE SOLE, CONCURRENT, ACTIVE OR PASSIVE
NEGLIGENCE, STRICT LIABILITY OR FAULT OF ANY OF THE INDEMNIFIED PARTIES
(EXCLUDING, IN THE CASE OF SECTION 11(a)(iii) AND SECTION 11(b)(iii), GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT).

 

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Section 12. Limitation on Liability

Notwithstanding anything to the contrary contained herein, neither Party shall
be liable or responsible to the other Party or such other Party’s affiliated
Persons for any consequential, punitive, special, 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 that the
foregoing limitation is not intended and shall not affect Special Damages
imposed in favor of unaffiliated Persons that are not Parties to this Agreement.

Section 13. Miscellaneous.

(a) Modification; Waiver. This Agreement may be terminated, amended or modified
only by a written instrument executed by the Parties. Any of the terms and
conditions of this Agreement may be waived in writing at any time by the Party
entitled to the benefits thereof. No waiver of any of the terms and conditions
of this Agreement, or any breach thereof, will be effective unless in writing
signed by a duly authorized individual on behalf of the Party against which the
waiver is sought to be enforced. No waiver of any term or condition or of any
breach of this Agreement will be deemed or will constitute a waiver of any other
term or condition or of any later breach (whether or not similar), nor will such
waiver constitute a continuing waiver unless otherwise expressly provided.

(b) Entire Agreement. This Agreement constitutes the entire agreement among the
Parties pertaining to the subject matter hereof and supersedes all prior
agreements and understandings of the Parties in connection therewith.

(c) Successors and Assigns.

(i) The Refining Entity shall not assign its rights or obligations hereunder
without the Logistics Entity’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, that (1) the
Refining Entity may assign this Agreement without the Logistics Entity’s consent
in connection with a sale by the Refining Entity of all or substantially all of
the Refinery, including by merger, equity sale, asset sale or otherwise, so long
as the transferee: (A) agrees to assume all of the Refining Entity’s obligations
under this Agreement and (B) is financially and operationally capable of
fulfilling the terms of this Agreement, which determination shall be made by the
Refining Entity in its reasonable judgment; and (2) the Refining Entity shall be
permitted to make a collateral assignment of this Agreement solely to secure
financing for Delek US and its Affiliates.

 

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(ii) The Logistics Entity shall not assign its rights or obligations under this
Agreement without the prior written consent of the Refining Entity, which
consent shall not be unreasonably withheld, conditioned or delayed; provided,
however, that (1) the Logistics Entity may assign this Agreement without such
consent in connection with a sale by the Logistics Entity of all or
substantially all of the Pipelines and Tankage, including by merger, equity
sale, asset sale or otherwise, so long as the transferee: (A) agrees to assume
all of the Logistics Entity’s obligations under this Agreement; (B) is
financially and operationally capable of fulfilling the terms of this Agreement,
which determination shall be made by the Logistics Entity in its reasonable
judgment; and (C) is not a competitor of the Refining Entity, as determined by
the Refining Entity in good faith; and (2) the Logistics Entity shall be
permitted to make a collateral assignment of this Agreement solely to secure
financing for the Partnership and its Affiliates.

(iii) 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.

(iv) This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and permitted assigns.

(v) The Parties’ obligations hereunder shall not terminate in connection with a
Partnership Change of Control; provided, however, that in the case of a
Partnership Change of Control, the Refining Entity shall have the option to
extend the Term of this Agreement as provided in Section 4, without regard to
the notice periods provided in the fourth sentence of Section 4(a). The
Logistics Entity shall provide the Refining Entity with notice of any
Partnership Change of Control at least sixty (60) days prior to the effective
date thereof.

(d) 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.

(e) 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.

(f) 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.

 

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(g) Choice of Law. This Agreement shall be subject to and governed by the laws
of the State of Texas, excluding any conflicts-of-law rule or principle that
might refer the construction or interpretation of this Agreement to the laws of
another state.

(h) 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.

(i) Arbitration Provision. Any and all Arbitrable Disputes shall be resolved
through the use of binding arbitration using three arbitrators, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
as supplemented to the extent necessary to determine any procedural appeal
questions by the Federal Arbitration Act (Title 9 of the United States Code). If
there is any inconsistency between this Section 13(i) and the Commercial
Arbitration Rules or the Federal Arbitration Act, the terms of this
Section 13(i) will control the rights and obligations of the Parties.
Arbitration must be initiated within the time limits set forth in this
Agreement, or if no such limits apply, then within a reasonable time or the time
period allowed by the applicable statute of limitations. Arbitration may be
initiated by a Party (“Claimant”) serving written notice on the other Party
(“Respondent”) that the Claimant elects to refer the Arbitrable Dispute to
binding arbitration. Claimant’s notice initiating binding arbitration must
identify the arbitrator Claimant has appointed. The Respondent shall respond to
Claimant within thirty (30) days after receipt of Claimant’s notice, identifying
the arbitrator Respondent has appointed. If the Respondent fails for any reason
to name an arbitrator within the 30-day period, Claimant shall petition the
American Arbitration Association for appointment of an arbitrator for
Respondent’s account. The two arbitrators so chosen shall select a third
arbitrator within thirty (30) days after the second arbitrator has been
appointed. The Claimant will pay the compensation and expenses of the arbitrator
named by or for it, and the Respondent will pay the compensation and expenses of
the arbitrator named by or for it. The costs of petitioning for the appointment
of an arbitrator, if any, shall be paid by Respondent. The Claimant and
Respondent will each pay one-half of the compensation and expenses of the third
arbitrator. All arbitrators must (i) be neutral parties who have never been
officers, directors or employees of the Refining Entity, the Logistics Entity or
any of their Affiliates and (ii) have not less than seven (7) years experience
in the energy industry. The hearing will be conducted in Houston, Texas and
commence within thirty (30) days after the selection of the third arbitrator.
The Refining Entity, the Logistics Entity 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.

(j) Confidentiality.

(i) Obligations. Each Party shall use commercially reasonable efforts to retain
the other Party’s Confidential Information in confidence and not disclose the
same to any third party nor use the same, except as authorized by the disclosing
Party in writing or as expressly permitted in this Section 13(j). Each Party
further agrees to take the same care with the other Party’s Confidential
Information as it does with its own, but in no event less than a reasonable
degree of care.

 

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(ii) Required Disclosure. Notwithstanding Section 13(j)(i) above, if the
receiving Party becomes legally compelled to disclose the Confidential
Information by a court, Governmental Authority or Applicable Law, including the
rules and regulations of the Securities and Exchange Commission, or is required
to disclose pursuant to the rules and regulations of any national securities
exchange upon which the receiving Party or its parent entity is listed, any of
the disclosing Party’s Confidential Information, the receiving Party shall
promptly advise the disclosing Party of such requirement to disclose
Confidential Information as soon as the receiving Party becomes aware that such
a requirement to disclose might become effective, in order that, where possible,
the disclosing Party may seek a protective order or such other remedy as the
disclosing Party may consider appropriate in the circumstances. The receiving
Party shall disclose only that portion of the disclosing Party’s Confidential
Information that it is required to disclose and shall cooperate with the
disclosing Party in allowing the disclosing Party to obtain such protective
order or other relief.

(iii) Return of Information. Upon written request by the disclosing Party, all
of the disclosing Party’s Confidential Information in whatever form shall be
returned to the disclosing Party upon termination of this Agreement or destroyed
with destruction certified by the receiving Party, without the receiving Party
retaining copies thereof except that one copy of all such Confidential
Information may be retained by a Party’s legal department solely to the extent
that such Party is required to keep a copy of such Confidential Information
pursuant to Applicable Law, and the receiving Party shall be entitled to retain
any Confidential Information in the electronic form or stored on automatic
computer back-up archiving systems during the period such backup or archived
materials are retained under such Party’s customary procedures and policies;
provided, however, that any Confidential Information retained by the receiving
Party shall be maintained subject to confidentiality pursuant to the terms of
this Section 13(j), and such archived or back-up Confidential Information shall
not be accessed except as required by Applicable Law.

(iv) Receiving Party Personnel. The receiving Party will limit access to the
Confidential Information of the disclosing Party to those of its employees,
attorneys and contractors that have a need to know such information in order for
the receiving Party to exercise or perform its rights and obligations under this
Agreement (the “Receiving Party Personnel”). The Receiving Party Personnel who
have access to any Confidential Information of the disclosing Party will be made
aware of the confidentiality provision of this Agreement, and will be required
to abide by the terms thereof. Any third party contractors that are given access
to Confidential Information of a disclosing Party pursuant to the terms hereof
shall be required to sign a written agreement pursuant to which such Receiving
Party Personnel agree to be bound by the provisions of this Agreement, which
written agreement will expressly state that it is enforceable against such
Receiving Party Personnel by the disclosing Party.

 

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(v) Survival. The obligation of confidentiality under this Section 13(j) shall
survive the termination of this Agreement for a period of two (2) years.

(k) Audit and Inspection. During the Term, the Refining Entity and its duly
authorized agents and/or representatives, upon reasonable notice and during
normal working hours, shall have access to the accounting records and other
documents maintained by the Logistics Entity, or any of the Logistics Entity’s
contractors and agents, which relate to this Agreement, and shall have the right
to audit such records at any reasonable time or times during the Term of this
Agreement and for a period of up to three years after termination of this
Agreement. Claims as to shortage in quantity or defects in quality shall be made
by written notice within thirty (30) days after the delivery in question or
shall be deemed to have been waived. The right to inspect or audit such records
shall survive termination of this Agreement for a period of two (2) years
following the end of the Term. The Logistics Entity 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.

[Remainder of page intentionally left blank. Signature page follows.]

 

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IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of
the date first written above.

 

DELEK REFINING, LTD. By:   DELEK U.S. REFINING GP, LLC its General Partner

/s/ Kent B. Thomas

Name:   Kent B. Thomas Title: Executive Vice President and General Counsel

/s/ Mark B. Cox

Name:   Mark B. Cox Title: Executive Vice President and Chief Financial Officer
DELEK CRUDE LOGISTICS, LLC

/s/ Andrew L. Schwarcz

Name:   Andrew L. Schwarcz Title: Vice President of Finance and Development and
Senior Counsel

/s/ Mark B. Cox

Name:   Mark B. Cox Title: Executive Vice President and Chief Financial Officer

 

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Exhibit A

Tankage

 

STATION

   SHELL CAPACITY      MAX EFFECTIVE
STORAGE     

STATUS

Bradford            

        

#614

     55,000         49,500      

#615

     10,000         9,400       out of service; needs floating roof to comply
with current regs; floating roof will reduce capacity

Arp                    

        

#685

     55,000         49,600      

#686

     55,000         49,600      

Nettleton            

        

#654

     55,000         49,900       out of service; needs repair

#655

     55,000         49,800      

#656

     55,000         49,800      

#657

     55,000         49,900       out of service; available for use

#660

     55,000         49,800      

LG/Penn.            

        

#690

     150,000         138,800      

#691

     300,000         277,200      

Totals

     900,000         823,300      

Minimum Storage Capacity (Total Usable without expenditures)

     835,000         764,000      

MAX EFFECTIVE STORAGE includes tank heels

  

  

 

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Exhibit B

Pipelines

 

Line Segment    Diameter      Summer Capacity**      Winter Capacity**         
     BPH      BPD      BPH      BPD  

McMurrey Pipeline

              

Longview to Nettleton

     12"         3,125         75,000         3,125         75,000   

Nettleton to Bradford

     6-7"         729         17,500         625         15,000   

Bradford to Arp

     6"         875         21,000         750         18,000   

Blueknight to Arp

     6"         542         13,000         542         13,000   

Arp to Tyler

     6"         1,250         30,000         1,150         27,600   

Nettleton Pipeline

              

Nettleton to Tyler

     8-10"         1,458         35,000         1,250         30,000   

 

** Applies when drag reducing agents not in use.

 

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