Common use of DEFICIENCY CHARGE Clause in Contracts

DEFICIENCY CHARGE. As an inducement to Centurion to provide and/or operate, as applicable, the Project Facilities, without which inducement Centurion would not agree to enter this Agreement, Alon guarantees and covenants, subject to the terms and conditions of this Agreement and the performance of Centurion’s obligations hereunder, that during each Delivery Period it shall, in accordance with the provisions of this Agreement, tender the applicable Minimum Delivery Period Volume of Crude Oil at the Origin Point for shipment over the Project Facilities to the Delivery Point and bear a proportionate share (based on volume being shipped) of line fill as set forth in the Tariff If the volume of Crude Oil delivered by Alon at the Origin Point during a Delivery Period is less than the applicable Minimum Delivery Period Volume, Alon agrees to pay Centurion an amount equal to the Makewhole Volume multiplied by the tariff in effect during such Delivery Period (“Deficiency Charge”), provided that, any such Deficiency Charges shall be assessed and payable on an annual basis. Any Deficiency Charge paid by Alon to Centurion under this provision shall be treated as advance payments of the Centurion Tariff then in effect for transportation of Crude Oil by Alon from the Origin Point to the Delivery Point for volumes in excess of the Minimum Delivery Period Volumes for the two Delivery Periods of the Year immediately following the Year for which such Deficiency Charge was assessed (the “Following Year”). Notwithstanding the foregoing, such credit shall only be applied with respect to such transportation in the Following Year. Any Deficiency Charge amounts that are not credited in accordance with the above shall be retained by Centurion and shall not be refunded to Alon or applied as a credit to payment for such transportation in any subsequent Delivery Period. If, at the expiration of the Term, Centurion holds any Deficiency Charge amounts that have not been applied as a credit to payment for transportation as provided herein, Centurion shall be under no obligation to refund such Deficiency Charge amounts to Alon.