FORM OF CORPORATE SERVICES AGREEMENT BETWEEN ALON USA, LP AND ALON BRANDS, INC. Dated as of ______________, 2011
Exhibit 10.17
FORM OF
Dated as of ______________, 2011
Table of Contents
| Page | ||||
ARTICLE I DEFINITIONS |
1 | |||
Section 1.1 Certain Defined Terms |
1 | |||
Section 1.2 Other Terms |
3 | |||
ARTICLE II SERVICES AND TERMS |
4 | |||
Section 2.1 Services; Scope |
4 | |||
Section 2.2 Services Managers |
5 | |||
Section 2.3 Performance and Receipt of Services |
6 | |||
Section 2.4 WARRANTIES |
6 | |||
ARTICLE III OTHER ARRANGEMENTS |
6 | |||
Section 3.1 Vendor Agreements |
6 | |||
ARTICLE IV ADDITIONAL AGREEMENTS |
7 | |||
Section 4.1 Leases |
7 | |||
Section 4.2 Computer-Based Resources |
8 | |||
Section 4.3 Access |
8 | |||
ARTICLE V COSTS AND DISBURSEMENTS; PAYMENTS |
8 | |||
Section 5.1 Service Charges |
8 | |||
Section 5.2 Consents |
9 | |||
Section 5.3 Conversion Costs |
9 | |||
ARTICLE VI STANDARD FOR SERVICE; COMPLIANCE WITH LAWS |
10 | |||
Section 6.1 Standard for Service |
10 | |||
Section 6.2 Compliance with Laws |
10 | |||
ARTICLE VII INDEMNIFICATION; LIMITATION ON LIABILITY |
10 | |||
Section 7.1 Limited Liability of a Provider |
10 | |||
Section 7.2 Indemnification by Each Provider |
10 | |||
Section 7.3 Indemnification by Each Recipient |
11 | |||
Section 7.4 Indemnification Matters; Exclusivity |
11 | |||
Section 7.5 Limitation on Liability |
11 | |||
Section 7.6 Liability for Payment Obligations |
12 | |||
ARTICLE VIII applicable law |
12 | |||
ARTICLE IX TERMINATION |
12 | |||
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TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||
Section 9.1 Termination |
12 | |||
Section 9.2 Effect of Termination |
14 | |||
Section 9.3 Survival |
14 | |||
Section 9.4 Force Majeure |
14 | |||
ARTICLE X GENERAL PROVISIONS |
14 | |||
Section 10.1 Independent Contractors |
14 | |||
Section 10.2 Subcontractors |
14 | |||
Section 10.3 Additional Services; Books and Records |
14 | |||
Section 10.4 Confidential Information |
15 | |||
Section 10.5 Notices |
15 | |||
Section 10.6 Taxes |
16 | |||
Section 10.7 Severability |
16 | |||
Section 10.8 Entire Agreement |
16 | |||
Section 10.9 Assignment; No Third-Party Beneficiaries |
17 | |||
Section 10.10 Amendment |
17 | |||
Section 10.11 Rules of Construction |
17 | |||
Section 10.12 Counterparts |
18 | |||
Section 10.13 No Right to Set-Off |
18 | |||
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This CORPORATE SERVICES AGREEMENT, dated to be effective as of the Closing Date (this
“Agreement”), is made by and between Alon USA, LP, a Texas limited partnership (“Alon
LP”), and Alon Brands, Inc., a Delaware corporation (“Brands”). Alon LP is an
indirect, majority-owned subsidiary of Alon USA Energy, Inc., a Delaware corporation (“Alon
USA”), and as of the date hereof, Brands is an indirect subsidiary of Alon USA and Alon LP.
Certain capitalized terms used in this Agreement are defined in Section 1.1 and the
definitions of the other capitalized terms used in this Agreement are cross-referenced in
Section 1.2.
RECITALS
A. Alon USA and Brands have entered into a Master Agreement, dated to be effective as of the
Closing (the “Master Agreement”), pursuant to which, among other things, Alon USA will
separate its retail and branded wholesale businesses and operations from its other businesses and
operations by contributing, assigning and transferring such businesses, operations and related
assets and liabilities to Brands and its Subsidiaries, as set forth in the Master Agreement;
B. After the separation of the retail and branded wholesale businesses and operations from
Alon USA by contribution, transfer and assignment to the Brands Group, it is contemplated that an
initial public offering will be made of the common stock of Brands, resulting in partial public
ownership of Brands;
C. After such separation and the initial public offering, both Brands and Alon USA desire for
(i) Alon LP to provide or cause to be provided by other members of the Alon USA Group, certain
administrative and support services and other assistance to the Brands Group, and (ii) Brands to
provide certain administrative and support services and other assistance to the Alon USA Group,
each in accordance with the terms and subject to the conditions set forth herein; and
D. Because of the parent-subsidiary relationships among Alon USA, Brands and Alon LP, the
terms and conditions set forth herein have not resulted from arms-length negotiations between the
parties, and accordingly, such terms may be in some respects less favorable to Brands than those it
could obtain from unaffiliated third parties.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein
and for other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms.
The following capitalized terms used in this Agreement will have the meanings set forth below:
“Information Systems” means computing, telecommunications or other digital operating
or processing systems or environments, including computer programs, data, databases, computers,
computer libraries, communications equipment, networks and systems. When referenced in connection
with Services, Information Systems will mean the Information Systems accessed and/or used in
connection with the Services.
“Intellectual Property” means all of the following, whether protected, created or
arising under the laws of the United States or any other foreign jurisdiction: (i) patents, patent
applications (along with all patents issuing thereon), statutory invention registrations,
divisions, continuations, continuations-in-part, substitute applications of the foregoing and any
extensions, reissues, restorations and reexaminations thereof, and all rights therein provided by
international treaties or conventions; (ii) copyrights, mask work rights, database rights and
design rights, whether or not registered, published or unpublished, and registrations and
applications for registration thereof, and all rights therein whether provided by international
treaties or conventions or otherwise; (iii) trademarks, service marks, trade dress, logos and other
identifiers of source, including all goodwill associated therewith and all common law rights,
registrations and applications for registration thereof, and all rights therein provided by
international treaties or conventions, and all reissues, extensions and renewals of any of the
foregoing; (iv) intellectual property rights arising from or in respect of domain names, domain
name registrations and reservations and URLs; (v) trade secrets; (vi) intellectual property rights
arising from or in respect of Technology; and (vii) all other applications and registrations
related to any of the intellectual property rights set forth in the foregoing clauses (i) through
(vi) above.
“Provider” means (i) Alon LP or another member of the Alon USA Group that is providing
an Alon USA Service pursuant to this Agreement or (ii) Brands or another member of the Brands Group
that is providing Brand Services pursuant to this Agreement.
“Provider Group” means (i) with respect to the provision of Alon USA Services, the
Alon USA Group, and (ii) with respect to the provisions of Brands Services, the Brands Group.
“Recipient” means (i) Brands or another member of the Brands Group to whom an Alon USA
Service is being provided pursuant to this Agreement or (ii) Alon LP or another member of the Alon
USA Group to whom a Brand Service is being provided pursuant to this Agreement.
“Recipient Group” means (i) with respect to the receipt of Alon USA Services, the
Brands Group, and (ii) with respect to the receipt of Brands Services, the Alon USA Group.
“Representative” of a Person means any director, officer, employee, agent, consultant,
accountant, auditor, financing source, attorney, investment banker or other representative of such
Person.
“Service Termination Date” means the effective date of the termination of this
Agreement pursuant to Section 9.1 or such earlier scheduled termination date as may be
specified in Schedule A-1 or A-2 or in Schedule D in respect of any
specified Service.
“Software” means the object and source code versions of computer programs and any
associated documentation therefor.
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“Tax Matters Agreement” means the Tax Matters Agreement entered into pursuant to the
Master Agreement and in substantially the form of Exhibit C to the Master Agreement.=1
“Technology” means, collectively, all designs, formulas, algorithms, procedures,
techniques, ideas, know-how, software, programs, models, routines, confidential and proprietary
information, databases, tools, inventions, invention disclosures, creations, improvements, works of
authorship, and all recordings, graphs, drawings, reports, analyses, other writings, and any other
embodiment of the above, in any form, whether or not specifically listed herein.
“Trigger Date” means the first date on which members of the Alon USA Group cease to
beneficially own more than fifty percent (50%) of the Common Stock.
“Undertakings” means the obligations of the respective Alon USA and Brands Groups set
forth in Article III.
Section 1.2 Other Terms.
For purposes of this Agreement, the following terms have the meanings set forth in the
sections or agreements indicated.
| Term | Section | |
Affiliate
|
Master Agreement | |
After-Tax Basis
|
Master Agreement | |
Agreement
|
Preamble | |
Breaching Party
|
Section 9.1(a) | |
Alon USA
|
Preamble | |
Alon USA Confidential Information
|
Master Agreement | |
Alon USA Executives
|
Section 2.2 | |
Alon USA Group
|
Master Agreement | |
Alon USA Indemnified Parties
|
Section 3.1(c) | |
Alon USA Services Manager
|
Section 2.3 | |
Alon USA Vendor Agreements
|
Section 3.1(a) | |
Brands
|
Preamble | |
Brands Business
|
Master Agreement | |
Brands Confidential Information
|
Master Agreement | |
Brands Group
|
Master Agreement | |
Brands Indemnified Parties
|
Section 3.1(d) | |
Brands Services
|
Section 2.1(a) | |
Brands Services Manager
|
Section 2.3 | |
Brands Vendor Agreements
|
Section 3.1(b) | |
Closing
|
Master Agreement | |
Closing Date
|
Master Agreement | |
Common Stock
|
Master Agreement | |
Consents
|
Section 5.2 | |
Conversion Costs
|
Section 5.3 |
| 1 | Is this agreement still needed? |
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| Term | Section | |
Force Majeure
|
Master Agreement | |
Group
|
Master Agreement | |
Laws
|
Master Agreement | |
Liabilities
|
Master Agreement | |
Losses
|
Master Agreement | |
Alon LP
|
Preamble | |
Master Agreement
|
Recitals | |
Non-Breaching Party
|
Section 9.1(a) | |
Other Costs
|
Section 5.1(a) | |
Services
|
Section 2.1(a) | |
Service Charges
|
Section 5.1(a) | |
Standard for Services
|
Section 6.1 | |
Substitute Service
|
Section 2.1(a) | |
Taxes
|
Master Agreement | |
Transaction Documents
|
Master Agreement | |
Transfer Documents
|
Master Agreement |
ARTICLE II
SERVICES AND TERMS
Section 2.1 Services; Scope.
(a) During the period commencing on the Closing Date and continuing until the earlier of the
termination of this Agreement or an individual Service pursuant to Section 9.1, subject to
the terms and conditions set forth in this Agreement, (i) Alon LP will provide, or will cause to be
provided to the Brands Group, finance, information technology, human resources, legal services,
management oversight and other general services of an administrative and/or advisory nature with
respect to the Brands Business, as set forth on Schedule A-1 (the “Alon USA
Services”), and (ii) Brands will provide or cause to be provided to the Alon USA Group the
services set forth on Schedule A-2 (the “Brands Services” and, together with the
Alon USA Services, the “Services”). The Services also will include (1) any Services to be
provided by a Provider to a Recipient as agreed pursuant to Section 10.3(a), and (2) any
Substitute Service; provided, however, that (i) the scope of each Service will be
substantially the same as the scope of such service provided by the Alon USA Group to the Brands
Group or the Brands Group to the Alon USA Group (as applicable) on the last day prior to the
Closing in the ordinary course of business; (ii) the use of each Service by the Recipient Group
will include use by the Recipient Group’s contractors in substantially the same manner as used by
the contractors of the Recipient Group prior to the Closing; and (iii) nothing in this Agreement
will require that any Service be provided other than for use in, or in connection with, in the case
of Alon USA Services, the Brands Business, and in the case of Brands Services, the businesses of
the members of the Alon USA Group. Nothing in the preceding sentence or elsewhere in this
Agreement will be deemed to restrict or otherwise limit the volume or quantity of any Service;
provided, that, certain volume or quantity changes with respect to a Service may
require the parties to negotiate in good faith and use their commercially reasonable efforts to
agree upon a price change with respect to such Service. If, for any reason, a Provider is unable
to provide any Service pursuant to the
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terms of this Agreement, the Provider will provide to the Recipient a substantially equivalent
service (a “Substitute Service”) at or below the cost for the substituted Service as set
forth on Schedule A-1 or A-2, as applicable, and otherwise in accordance with the
terms of this Agreement, including the Standard for Services.
(b) The Services will include, and the Service Charges reflect charges for, such maintenance,
support, error correction, training, updates and enhancements normally and customarily provided by
members of the Alon USA Group to other Alon USA Group members that receive such services. If
Recipient requests that a Provider provides a custom modification in connection with any Service,
the Recipient will be responsible for the cost of such custom modification. The Services will
include all functions, responsibilities, activities and tasks, and the materials, documentation,
resources, rights and licenses to be used, granted or provided by the Provider Group that are not
specifically described in this Agreement as a part of the Services, but are incidental to, and
would normally be considered an inherent part of, or necessary subpart included within, the
Services or are otherwise necessary for the Provider Group to provide, or the Recipient Group to
receive, the Services.
(c) This Agreement will not assign any rights to Technology or Intellectual Property between
the parties, other than as specifically set forth herein. Any upgrades, updates or other
modifications to Software or other electronic content made available or delivered to the Recipient
Group pursuant to this Agreement will be deemed to be Intellectual Property of the Provider Group
and licensed to the Recipient Group, notwithstanding that such upgrades, updates or other
modifications (i) were not used, held for use or contemplated to be used by the Recipient Group as
of the Closing Date, (ii) were not controlled by any member of the Provider Group as of the Closing
Date, or (iii) may constitute improvements made after the Closing Date.
(d) Throughout the term of this Agreement, the Provider and the Recipient of any Service will
cooperate with one another and use their good faith, commercially reasonable efforts to effect the
efficient, timely and seamless provision and receipt of such Service.
(e) Any Software delivered by a Provider hereunder will be delivered, at the election of the
Provider, either (i) with the assistance of the Provider, through electronic transmission or
downloaded by the Recipient from the applicable intranet, or (ii) by installation by the Provider
on the relevant equipment, with retention by the Provider of all tangible media on which such
Software resides. The Provider and the Recipient acknowledge and agree that no tangible medium
containing such Software (including any enhancements, upgrades or updates) will be transferred to
the Recipient at any time for any reason under the terms of this Agreement, and that the Provider
will, at all times, retain possession and control of any such tangible medium used or consumed by
the Provider in the performance of this Agreement. Each party will comply with all reasonable
security measures implemented by the other party in connection with the delivery of Software.
Section 2.2 Services Managers. Alon LP will designate a dedicated services account
manager (the “Alon USA Services Manager”) who will be directly responsible for coordinating and
managing the delivery of the Services and will have authority to act on the Alon USA Group’s behalf
with respect to the Services. Brands will designate a dedicated services account manager (the
“Brands Services Manager”) who will be directly responsible for coordinating and
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managing the delivery of the Services and will have authority to act on the Brands Group’s
behalf with respect to the Services. The Alon USA Services Manager and the Brands Services Manager
will work together to address the Recipient Group’s issues and the parties’ relationship under this
Agreement.
Section 2.3 Performance and Receipt of Services. Each of Alon LP and Brands will,
and will cause its respective Groups to, comply with the following provisions with respect to the
Services:
(a) Each Provider and Recipient will at all times comply with its own then in-force security
guidelines and policies applicable to the performance, access and/or use of the Services and
Information Systems.
(b) Each Provider and Recipient will take commercially reasonable measures to ensure that no
computer viruses or similar items are coded or introduced into the Services or Information Systems.
If a computer virus is found to have been introduced into the Services or Information Systems, the
parties hereto will use their commercially reasonable efforts to cooperate and to diligently work
together to eliminate such computer virus and the effects thereof.
(c) Each Provider and Recipient will exercise reasonable care in providing and receiving the
Services to (i) prevent access to the Services or Information Systems by unauthorized Persons, and
(ii) not damage, disrupt or interrupt the Services or Information Systems.
Section 2.4 WARRANTIES.
THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, THERE ARE NO
EXPRESS WARRANTIES OR GUARANTIES, AND THERE ARE NO IMPLIED WARRANTIES OR GUARANTIES, INCLUDING THE
IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE AND FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE III
OTHER ARRANGEMENTS
Section 3.1 Vendor Agreements.
(a) A member of the Alon USA Group is or may become a party to certain corporate purchasing
contracts, master services agreements, vendor contracts, software and other Intellectual Property
licenses or similar agreements unrelated to the Services (the “Alon USA Vendor Agreements”)
under which (or under open work orders thereunder) the Brands Group purchases goods or services,
licenses rights to use Intellectual Property and realizes certain other benefits and rights. Alon
LP agrees that prior to the Trigger Date, the Brands Group will continue to retain the right to
purchase goods or services and continue to realize such other benefits and rights under each Alon
USA Vendor Agreement to the extent allowed by such Alon USA Vendor Agreement until the expiration
or termination date of such rights or benefits
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pursuant to the terms of such Alon USA Vendor Agreement (including any voluntary termination
of such Alon USA Vendor Agreement by the Alon USA Group).
(b) A member of the Brands Group is or may become a party to certain corporate purchasing
contracts, master services agreements, vendor contracts, software and other Intellectual Property
licenses or similar agreements unrelated to the Brands Services (the “Brands Vendor
Agreements”) under which (or under open work orders thereunder) the Alon USA Group purchases
goods or services, licenses rights to use Intellectual Property and realizes certain other benefits
and rights. Brands agrees that prior to the Trigger Date, the Alon USA Group will continue to
retain the right to purchase goods or services and continue to realize such other benefits and
rights under each Brands Vendor Agreement to the extent allowed by such Brands Vendor Agreement
until the expiration or termination date of such rights or benefits pursuant to the terms of such
Brands Vendor Agreement (including, any voluntary termination of such Brands Vendor Agreements by
the Brands Group).
(c) The Brands Group will indemnify, defend and hold harmless on an After-Tax Basis the Alon
USA Group and each of their respective directors, officers and employees, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the “Alon USA
Indemnified Parties”), from and against any and all Losses of the Alon USA Indemnified Parties
relating to, arising out of or resulting from the Brands Group purchasing goods or services,
licensing rights to use Intellectual Property or otherwise realizing benefits and rights under any
Alon USA Vendor Agreements.
(d) The Alon USA Group will indemnify, defend and hold harmless on an After-Tax Basis the
Brands Group and each of their respective directors, officers and employees, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the “Brands
Indemnified Parties”), from and against any and all Losses of the Brands Indemnified Parties
relating to, arising out of or resulting from the Alon USA Group purchasing goods or services,
licensing rights to use Intellectual Property or otherwise realizing benefits and rights under any
Brands Vendor Agreements.
ARTICLE IV
ADDITIONAL AGREEMENTS
Section 4.1 Leases.
(a) Each lease or sublease listed on Schedule B, pursuant to which any member of the
Brands Group leases or subleases real property from any member of the Alon USA Group, will remain
in full force and effect pursuant to its terms unless otherwise agreed to in writing by the
parties.2
(b) Each lease or sublease listed on Schedule C, pursuant to which any member of the
Alon USA Group leases or subleases real property from any member of the Brands Group, will remain
in full force and effect pursuant to its terms unless otherwise agreed to in writing by the
parties.
| 2 | Note to draft: Will Brands enter into a sublease for its new space? |
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Section 4.2 Computer-Based Resources.
(a) Alon LP and Brands agree that (i) prior to the Trigger Date, the Brands Group will
continue to have access to the Information Systems of the Alon USA Group, and (ii) on and after the
Trigger Date, the Brands Group will not have access to all or any part of the Information Systems
of the Alon USA Group, except to the extent necessary for the Brands Group to receive the Services
(subject to the Brands Group complying with all reasonable security measures implemented by the
Alon USA Group as deemed necessary by the Alon USA Group to protect its Information Systems;
provided, that, the Brands Group has had a commercially reasonable period of time
in which to comply with such security measures).
(b) Alon LP and Brands agree that (i) prior to the Trigger Date, the Alon USA Group will
continue to have access to the Information Systems of the Brands Group, and (ii) on and after the
Trigger Date, the Alon USA Group will not have access to all or any part of the Information Systems
of the Brands Group, except to the extent necessary for the Alon USA Group to perform the Services
(subject to the Alon USA Group complying with all reasonable security measures implemented by the
Brands Group as deemed necessary by the Brands Group to protect its Information Systems;
provided, that, the Alon USA Group has had a commercially reasonable period of time
in which to comply with such security measures).
Section 4.3 Access. Brands will allow the Alon USA Group and its Representatives
reasonable access to the facilities of the Brands Group necessary for the performance of the Alon
USA Services and to enable the Alon USA Group to fulfill its obligations under this Agreement.
Alon LP will allow the Brands Group and its Representatives reasonable access to the facilities of
the Alon USA Group necessary for the performance of the Brands Services and to enable the Brands
Group to fulfill its obligation under this Agreement.
ARTICLE V
COSTS AND DISBURSEMENTS; PAYMENTS
Section 5.1 Service Charges. Schedules A-1 and A-2 set forth with respect to each
Service a description of the charges for such Service or the basis for the determination thereof
(the “Service Charges”). Further, in connection with performance of the Services and in connection
with the Undertakings, the Provider will make payments for the benefit of and on behalf of the
Recipient and will incur out-of-pocket costs and expenses (collectively, the “Other Costs”), which
will be reimbursed to the Provider by the Recipient; provided, that, any Other Costs will only be
payable by the Recipient if it receives from the Provider reasonably detailed data and other
documentation sufficient to support the calculation of amounts due to the Provider as a result of
such Other Costs.
(a) Prior to the Trigger Date, Alon LP and Brands will arrange for the payment of all Service
Costs and Other Charges in a manner consistent with past practices for similar services provided by
the Provider Group to the Recipient Group prior to the date hereof. The Recipient will have the
right to dispute any Service Charges and Other Costs by delivering written notice of such dispute,
setting forth in reasonable detail the basis therefor, to the Provider within, and no later than,
60 days after notice of billing. As soon as practicable after receipt of
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any such notice, the Provider will provide the Recipient with reasonably detailed data and
documentation sufficient to support the calculation of any Service Charges and Other Costs that are
the subject of the dispute.
(b) From and after the Trigger Date, the Provider will deliver an invoice to the Recipient on
a monthly basis (or at such other frequency as is set forth on Schedule A-1 or A-2,
as applicable) in arrears for the Service Charges and any Other Costs. The Recipient will pay the
amount of such invoice to the Provider in U.S. dollars within 30 days of the date of such invoice.
If the Recipient fails to pay such amount (excluding any amount contested in good faith) by such
date, the Recipient will be obligated to pay to the Provider, in addition to the amount due,
interest on such amount at the lesser of (i) the three month London Interbank Offered Rate (LIBOR)
plus 100 basis points or (ii) the maximum rate of interest allowed by applicable law, from the date
the payment was due through the date of payment. As soon as practicable after receipt by the
Provider of any reasonable written request by the Recipient, the Provider will provide the
Recipient with reasonably detailed data and documentation sufficient to support the calculation of
any amount due to the Provider under this Agreement for the purpose of verifying the accuracy of
such calculation.
Section 5.2 Consents. Alon LP and Brands acknowledge and agree that certain Software
and other licenses, consents, approvals, notices, registrations, recordings, filings and other
actions (collectively, “Consents”) may be required by Alon LP, Brands or members of their
respective Groups in connection with the provision of the Services. With respect to each Service,
the Recipient will, after consultation with the Provider, either directly pay the out-of-pocket
expenses incurred to obtain, perform or otherwise satisfy each such Consent or after any such
Consent is obtained, performed or otherwise satisfied, reimburse the Provider for all actual,
out-of-pocket costs incurred by the Provider and related to such Consent. Prior to payment of, or
reimbursement for, such out-of-pocket expenses, the Provider will provide the Recipient with an
invoice accompanied by reasonably detailed data and documentation sufficient to evidence the
out-of-pocket expenses for which the Provider is seeking payment or reimbursement. Upon receipt of
such invoice and data and documentation, the Recipient will either pay the amount of such invoice
directly in accordance with its general payment terms with vendors or reimburse the Provider for
its payment of the invoice within 30 days of the date of its receipt of such invoice. If the
Recipient disputes the invoiced amount, then the parties will work together to resolve such
dispute. Alon LP and Brands acknowledge and agree that no prior approval of the Recipient will be
required for the Provider to seek any reimbursement pursuant to this Section 5.2.
Section 5.3 Conversion Costs. Alon LP and Brands acknowledge and agree that in
connection with the implementation, provision, receipt and transition of the Services, there will
be certain nonrecurring, out-of-pocket conversion costs incurred by Alon LP, Brands and their
respective Groups (“Conversion Costs”). With respect to each Service, the Recipient of the Service
will either reimburse the Provider as incurred for all actual, out-of-pocket Conversion Costs
incurred by the Provider and related to such Service or, after consultation with the Provider, pay
such Conversion Costs directly on an as-incurred basis, in either case regardless of whether the
Recipient replaces such Service with the same application, system, vendor or other means of
effecting the Service. Prior to payment of, or reimbursement for, such actual out-of-pocket
Conversion Costs, the Provider will provide the Recipient with an invoice accompanied by reasonably
detailed data and documentation sufficient to evidence the out-of-pocket expenses
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for which the Provider is seeking payment or reimbursement. Upon receipt of such invoice and
data and documentation, the Recipient will either pay the amount of such invoice directly in
accordance with its general payment terms with vendors or reimburse the Provider for its payment of
the invoice within 30 days of the date of its receipt of such invoice. Alon LP and Brands
acknowledge and agree that no prior approval will be required from the Recipient for the Provider
to seek any reimbursement for Conversion Costs pursuant to this Section 5.3.
ARTICLE VI
STANDARD FOR SERVICE; COMPLIANCE WITH LAWS
Section 6.1 Standard for Service. Except as otherwise provided in this Agreement
(including in Schedule A-1 or A-2), each Provider will perform the Services such that the nature,
quality, standard of care and the service levels at which such Services are performed are no less
than the nature, quality, standard of care and service levels at which the substantially same
services were provided to the members of the Recipient Group by or on behalf of the Provider on the
last day prior to the Closing Date in the ordinary course (the “Standard for Services”).
Section 6.2 Compliance with Laws. Each of Alon LP and Brands will be responsible for
its, and its respective Group’s, compliance with any and all Laws applicable to its performance
under this Agreement; provided, however, that each of Alon LP and Brands will, subject to
reimbursement of out-of-pocket expenses by the requesting party, use commercially reasonable
efforts to cooperate and provide the other party with all reasonably requested assistance
(including, the execution of documents and the provision of relevant information) to ensure
compliance with all applicable Laws in connection with any regulatory action, requirement, inquiry
or examination related to this Agreement or the Services.
ARTICLE VII
INDEMNIFICATION; LIMITATION ON LIABILITY
Section 7.1 Limited Liability of a Provider. Notwithstanding the provisions of
Section 6.1, no Provider, any other members of the Provider Group, their respective Affiliates or
any of their respective directors, officers or employees, or any of the heirs, executors,
successors or assigns of any of the foregoing (each, a “Provider Indemnified Party”), will have any
liability in contract, tort or otherwise, including for any such party’s ordinary or contributory
negligence, to the Recipient or its Affiliates or Representatives for or in connection with (i) any
Services rendered or to be rendered by any Provider Indemnified Party pursuant to this Agreement,
(ii) the transactions contemplated by this Agreement, or (iii) any Provider Indemnified Party’s
actions or inactions in connection with any such Services or transactions; provided, however, that
such limitation on liability will not extend to or otherwise limit any Losses that have resulted
directly from such Provider Indemnified Party’s (a) gross negligence or willful misconduct, (b)
improper use or disclosure of information of, or regarding, a customer or potential customer of a
Recipient Indemnified Party or (c) violation of applicable Law.
Section 7.2 Indemnification by Each Provider. Each Provider will, and will cause each
member of the Provider Group to indemnify, defend and hold harmless each relevant
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Recipient and each of its Subsidiaries and each of their respective directors, officers and
employees, and each of the heirs, executors, successors and assigns of any of the foregoing (each,
a “Recipient Indemnified Party”), from and against any and all Losses of the Recipient Indemnified
Parties relating to, arising out of, or resulting from (a) the gross negligence or willful
misconduct of a Provider Indemnified Party in connection with such Provider Indemnified Party’s
provision of the Services, (b) the improper use or improper disclosure of information of, or
regarding, a customer or potential customer of a Recipient Indemnified Party in connection with the
transactions contemplated by this Agreement or such Provider Indemnified Party’s provision of the
Services, or (c) any violation of applicable Law by a Provider Indemnified Party in connection with
the transactions contemplated by this Agreement or such Provider Indemnified Party’s provision of
the Services; provided, that, the aggregate liability of the Alon USA Group as Providers pursuant
to this Article VII will in no event exceed an amount equal to the aggregate payments made by the
Recipients to the Providers for Services pursuant to this Agreement for the 12 month period
preceding the date of such event giving rise to indemnification hereunder.
Section 7.3 Indemnification by Each Recipient. Each Recipient will, and will cause
each member of the Recipient Group to, indemnify, defend and hold harmless each relevant Provider
Indemnified Party from and against any and all Losses of the Provider Indemnified Parties relating
to, arising out of, or resulting from the provision of the Services by any Provider or any of its
Affiliates, except for (a) any Losses that result from a Provider Indemnified Party’s gross
negligence in connection with the provision of the Services, and (b) any Losses that result from a
Provider Indemnified Party’s material breach of this Agreement.
Section 7.4 Indemnification Matters; Exclusivity. The indemnification provisions set
forth in Sections 5.6 through 5.8 of the Master Agreement are hereby incorporated into, and made a
part of, this Article VII, Sections 3.1(c) and 3.1(d) and as otherwise applicable to this
Agreement. The provisions of this Article VII will constitute the sole and exclusive remedy for
Liabilities arising under this Agreement, other than Liabilities arising under Sections 3.1(c) and
3.1(d).
Section 7.5 Limitation on Liability. Notwithstanding any other provision contained in
this Agreement, Alon LP and Brands agree on their behalf, and on behalf of their respective Groups,
that no member of the Alon USA Group on the one hand, and no member of the Brands Group, on the
other hand, will be liable to any member of the other Group, whether based on contract, tort
(including negligence), warranty or any other legal or equitable grounds, for any special,
indirect, punitive, incidental or consequential losses, damages or expenses of the other Group,
including loss of data, loss of profits, interest or revenue, or use or interruption of business,
arising from any claim relating to breach of this Agreement or otherwise relating to any of the
Services or Undertakings provided hereunder. For clarification purposes only, the parties hereto
agree that the limitation on liability contained in this Section 7.5 will not apply to (a) damages
awarded to a third party pursuant to a third party claim for which a Provider is required to
indemnify, defend and hold harmless any Recipient Indemnified Party under Section 7.2; (b) damages
awarded to a third party pursuant to a third party claim for which a Recipient is required to
indemnify, defend and hold harmless any Provider Indemnified Party under Section 7.3; (c) damages
awarded to a third party pursuant to a third party claim for which the Brands Group is required to
indemnify, defend and hold harmless any Alon USA Indemnified Party
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under Section 3.1(c); and (d) damages awarded to a third party pursuant to a third party claim
for which the Alon USA Group is required to indemnify, defend and hold harmless any Brands
Indemnified Party under Section 3.1(d).
Section 7.6 Liability for Payment Obligations. Nothing in this Article VII will be
deemed to eliminate or limit, in any respect, any member of the Alon USA Group’s or any member of
the Brands Group’s express obligation in this Agreement to pay or reimburse, as applicable, for (a)
Service Charges; (b) Other Costs; (c) amounts payable or reimbursable with respect to any custom
modification provided pursuant to Section 2.1(b); (d) any amounts payable or reimbursable pursuant
to the terms of the leases referred to in Section 4.1; (e) any amounts payable or reimbursable
pursuant in respect of the Consents pursuant to Section 5.2; (f) amounts payable or reimbursable in
respect of Conversion Costs pursuant to Section 5.3; (g) amounts payable or reimbursable pursuant
to Section 6.2 with respect to compliance with Laws; (h) amounts payable or reimbursable pursuant
to Section 10.3(b) with respect to books and records; and (i) amounts payable or reimbursable
pursuant to Section 10.6 with respect to Taxes.
ARTICLE VIII
APPLICABLE LAW
This Agreement will be governed by, and construed and interpreted in accordance with, the laws
of the State of Texas, without giving effect to any conflicts of law rule or principle that might
require the application of the laws of another jurisdiction.
ARTICLE IX
TERMINATION
Section 9.1 Termination.
(a) This Agreement may be terminated (1) after the Trigger Date by either Alon LP or Brands
upon no less than six months’ prior written notice; provided, however, after the
Trigger Date, Alon LP will continue to provide the Services identified on Schedule D for
the applicable time periods after the Trigger Date set forth in Schedule D, and therefore
(A) the effective date of such termination of this Agreement must be no earlier than the latest
date provided on Schedule D for the provision of Services, (B) the effective date of
termination of individual Services specified on Schedule D must be no earlier than the date
provided on Schedule D for such individual Service, and (C) all other Services that are not
specified on Schedule D will terminate upon the effective termination date provided in such
written notice, or (2) at any time upon mutual agreement of Alon LP and Brands. Notwithstanding
the foregoing, with respect to specific Services provided hereunder, (i) either party hereto (the
“Non-Breaching Party”) may terminate this Agreement with respect to any individual Service,
in whole but not in part, at any time upon prior written notice by the Non-Breaching Party to the
other party (the “Breaching Party”) if the Breaching Party (including any member of its
respective Group) has failed to perform any of its material obligations under this Agreement
relating to such Service, and such failure will have continued without cure for a period of 60 days
after receipt by the Breaching Party of a written notice of such failure from the Non-Breaching
Party seeking to
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terminate such Service; and (ii) Alon LP and Brands may from time to time mutually agree to
terminate any individual Service, in whole but not in part, provided, that, any such agreement to
terminate a Service will comply with Section 10.10 and include all terms and conditions
applicable to termination of the Service to be terminated. Any such termination of an individual
Service will not in any way affect the obligations of the party terminating such Service to
continue to receive all other Services not so terminated and to continue to provide Services as
required by this Agreement.
(b) In addition to and not in limitation of the rights and obligations set forth in
Section 2.1(d), upon the request of the Recipient of a Service, (i) the Provider of such
Service will cooperate with the Recipient and use its good faith, commercially reasonable efforts
to assist the transition of such Service to the Recipient (or Affiliate of the Recipient or such
third-party vendor designated by the Recipient) by the Service Termination Date for such Service.
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Section 9.2 Effect of Termination. Upon termination or expiration of any Service or
Undertaking pursuant to this Agreement, the relevant Provider will have no further obligation to
provide the terminated Service or expired Undertaking, and the relevant Recipient will have no
obligation to pay any future Service Charges or Other Costs relating to any such Service or
Undertaking (other than for or in respect of Services or Undertakings provided in accordance with
the terms of this Agreement and received by such Recipient prior to such termination). Upon
termination of this Agreement in accordance with its terms, no Provider will have any further
obligation to provide any Service or Undertaking, and no Recipient will have any obligation to pay
any Service Charges or Other Costs relating to any Service or Undertaking or make any other
payments under this Agreement (other than for or in respect of Services or Undertakings received by
such Recipient prior to such termination).
Section 9.3 Survival. Each of Section 4.1 (Leases), Section 4.2 (Computer-Based
Resources), Article V (Costs and Disbursements), Article VII (Indemnification; Limitation on
Liability), Article VIII (Applicable Law), Section 9.2 (Effect of Termination), this Section 9.3
(Survival), and Article X (General Provisions) will survive the expiration or other termination of
this Agreement and remain in full force and effect.
Section 9.4 Force Majeure. No party hereto (or any member of its Group or any other
Person acting on its behalf) will have any liability or responsibility for failure to fulfill any
obligation (other than a payment obligation) under this Agreement so long as and to the extent to
which the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a
consequence of circumstances of Force Majeure. A party claiming the benefit of this provision
will, as soon as reasonably practicable after the occurrence of any such event: (a) notify the
other party of the nature and extent of any such Force Majeure condition and (b) use commercially
reasonable efforts to remove any such causes and resume performance under this Agreement as soon as
feasible.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Independent Contractors. In providing Services hereunder, the Provider
will act solely as independent contractor and nothing in this Agreement will constitute or be
construed to be or create a partnership, joint venture, or principal/agent relationship between the
Provider, on the one hand, and the Recipient, on the other. All Persons employed by the Provider in
the performance of its obligations under this Agreement will be the sole responsibility of the
Provider.
Section 10.2 Subcontractors. Any Provider may hire or engage one or more
subcontractors to perform any or all of its Services; provided, that, a Provider will in all cases
remain responsible for all its obligations under this Agreement, including with respect to the
scope of the Services, the Standard for Services and the content of the Services provided to the
Recipient. Under no circumstances will any Recipient be responsible for making any payments
directly to any subcontractor engaged by a Provider.
Section 10.3 Additional Services; Books and Records.
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(a) If, during the term of this Agreement, a party hereto identifies a need for additional or
other corporate services to be provided by or on behalf of Alon LP or Brands, the parties hereto
agree to negotiate in good faith to provide such requested services (provided that such services
are of a type generally provided by the Alon USA Group or Brands, as applicable, at such time) and
the applicable service fees, payment procedures, and other rights and obligations with respect
thereto. To the extent practicable, such additional or other services will be provided on terms
substantially similar to those applicable to Services of similar types and otherwise on terms
consistent with those contained in this Agreement.
(b) All books, records and data maintained by a Provider for a Recipient with respect to the
provision of a Service will be the exclusive property of such Recipient. The Recipient, at its
sole cost and expense, will have the right to inspect, and make copies of, any such books, records
and data during regular business hours upon reasonable advance notice to the Provider. At the sole
cost and expense of the Provider, upon termination of the provision of any Service, the relevant
books, records and data relating to such terminated Service will be delivered by the Provider to
the Recipient in a mutually agreed upon format to the address of Brands set forth in Section
10.5 or any other mutually agreed upon location; provided, however, that the
Provider will be entitled to retain one copy of all such books, records and data relating to such
terminated Service for archival purposes and for purposes of responding to any dispute that may
arise with respect thereto.
Section 10.4 Confidential Information. Brands agrees to, and will cause the other
members of the Brands Group to, maintain and safeguard all the Information pursuant to Section 6.2
of the Master Agreement and Alon LP agrees to, and will cause the other members of the Alon USA
Group to, maintain and safeguard all Brands Confidential Information pursuant to Section 6.2 of the
Master Agreement, and each party hereto agrees that Section 6.2 of the Master Agreement is hereby
incorporated by reference into, and made a part of, this Agreement.
Section 10.5 Notices. All notices, requests, claims, demands and other communications
under this Agreement will be in writing and will be given or made (and will be deemed to have been
duly given or made upon receipt) by delivery in person, by overnight courier service or by
registered or certified mail (postage prepaid, return receipt requested) to the respective parties
at the following addresses (or at such other address for a party as will be specified in a notice
given in accordance with this Section 10.5):
If to any member of the Alon USA Group:
Alon USA, LP
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
If to any member of the Brands Group:
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Section 10.6 Taxes. Except as otherwise specifically provided for in the Tax Matters
Agreement.
(a) Each party will be responsible for any personal property Taxes on property it owns or
leases, for franchise and privilege Taxes on its business, and for Taxes based on its net income or
gross receipts.
(b) Each Recipient may report and (as appropriate) pay any sales, use, excise, value-added,
services, consumption, and other Taxes directly if the Recipient provides the applicable Provider
with a direct pay or exemption certificate.
(c) A Provider will promptly notify the applicable Recipient of, and coordinate with the
Recipient the response to and settlement of, any claim for Taxes asserted by applicable taxing
authorities for which the Recipient is alleged to be financially responsible hereunder.
(d) Each Recipient will be entitled to receive and to retain any refund of Taxes paid to a
Provider pursuant to this Agreement. In the event a Provider receives a refund of any Taxes paid
by a Recipient to the Provider, the Provider will promptly pay, or cause the payment of, such
refund to the Recipient.
(e) Each of the parties hereto agrees that if reasonably requested by the other party, it will
cooperate with such other party to enable the accurate determination of such other party’s Tax
liability and assist such other party in minimizing its Tax liability to the extent legally
permissible. The Provider’s invoices will separately state the amounts of any Taxes the Provider
is proposing to collect from the Recipient.
Section 10.7 Severability. Whenever possible, each provision of this Agreement will
be interpreted so as to be effective and valid under applicable law, but if any provision or
portion of any provision of this Agreement is held invalid, illegal or unenforceable in any respect
under any applicable law in any jurisdiction, then such invalidity, illegality or unenforceability
will not affect the validity, legality or enforceability of any other provision or portion of any
provision of this Agreement, and this Agreement will be re-formed, construed and enforced in such
jurisdiction in such manner as will effect as nearly as lawfully possible the purposes and intent
of such invalid, illegal or unenforceable provision.
Section 10.8 Entire Agreement. Except as otherwise expressly provided in this
Agreement, this Agreement (including the Schedules hereto), together with the Master Agreement and
the Transaction Documents and Transfer Documents, constitutes the entire agreement of the parties
hereto with respect to the subject matter of this Agreement and
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supersedes all prior agreements and undertakings, both written and oral, between or on behalf
of the parties hereto with respect to the subject matter of this Agreement.
Section 10.9 Assignment; No Third-Party Beneficiaries. This Agreement will not be
assigned by any party hereto without the prior written consent of the other party hereto; provided,
however, Alon LP may assign this Agreement in connection with a merger, consolidation,
reorganization, sale of all or substantially all of its assets or similar transaction within the
Alon USA Group whether or not Alon LP is the surviving entity. Except as provided in Article III
and Article VII with respect to indemnified parties, this Agreement is for the sole benefit of the
parties to this Agreement, the members of their respective Group and their permitted successors and
assigns and nothing in this Agreement, express or implied, is intended to or will confer upon any
other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement. Brands will cause each member of the Brands Group providing or receiving
Services hereunder to abide by the terms and conditions of this Agreement, and Alon LP will cause
each member of the Alon USA Group providing or receiving Services hereunder to abide by the terms
and conditions of this Agreement.
Section 10.10 Amendment. No provision of this Agreement may be amended or modified
except by a written instrument signed by all the parties to such agreement. No waiver by any party
of any provision hereof will be effective unless explicitly set forth in writing and executed by
the party so waiving. The waiver by either party hereto of a breach of any provision of this
Agreement will not operate or be construed as a waiver of any other subsequent breach.
Section 10.11 Rules of Construction.
(a) Interpretation of this Agreement will be governed by the following rules of construction:
(i) words in the singular will be held to include the plural and vice versa and words of one gender
will be held to include the other gender as the context requires, (ii) references to the terms
Article, Section, paragraph, and Schedule are references to the Articles, Sections, paragraphs, and
Schedules to this Agreement unless otherwise specified, (iii) the word “including” and
words of similar import will mean “including, without limitation,” (iv) provisions will
apply, when appropriate, to successive events and transactions, (v) the headings contained herein
are for reference purposes only and will not affect in any way the meaning or interpretation of
this Agreement, and (vi) this Agreement will be construed without regard to any presumption or rule
requiring construction or interpretation against the party drafting or causing any instrument to be
drafted.
(b) Unless specifically stated in the Master Agreement that a particular provision of the
Master Agreement should be given effect in lieu of a conflicting provision in this Agreement, to
the extent that any provision contained in this Agreement conflicts with, or cannot logically be
read in accordance with, any provision of the Master Agreement, the provision contained in this
Agreement will prevail.
(c) Unless specifically stated in the Schedules to this Agreement, to the extent that any
provision contained in this Agreement conflicts with, or cannot logically be read in accordance
with, any provision of a Schedule to this Agreement the provision contained in such Schedule will
prevail.
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Section 10.12 Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties to each such agreement in separate counterparts, each of
which when executed will be deemed to be an original but all of which taken together will
constitute one and the same agreement. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile or electronic mail will be as effective as delivery of a manually
executed counterpart of any such Agreement.
Section 10.13 No Right to Set-Off. Brands will, and will cause each other Recipient
to, pay the full amount of costs and disbursements, including Other Costs, incurred under this
Agreement, and will not set-off, counterclaim or otherwise withhold any other amount owed to a
Provider on account of any obligation owed by a Provider to a Recipient.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Corporate Services Agreement to be executed
to be effective on the date first written above by their respective duly authorized officers.
| ALON USA, LP | ||||
By:
|
Alon USA GP, LLC, its General Partner | |||
By: |
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Name: |
||||
Title: |
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| ALON BRANDS, INC. | ||||
By:
|
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Name: |
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Title: |
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SCHEDULES
Schedule A-1 — Alon USA Services
Schedule A-2 — Brands Services
Schedule B — Leased Facilities (Alon USA Group as Lessor)
Schedule C — Leased Facilities (Brands Group as Lessor)
Schedule D — Mandatory Services Post Trigger Date
