Attached files

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S-1/A - AMENDMENT NO. 3 TO FORM S-1 - PBF Energy Inc.d248076ds1a.htm
EX-10.25 - EXHIBIT 10.25 - PBF Energy Inc.d248076dex1025.htm
EX-10.23.1 - EXHIBIT 10.23.1 - PBF Energy Inc.d248076dex10231.htm
EX-10.9.1 - EXHIBIT 10.9.1 - PBF Energy Inc.d248076dex1091.htm

Exhibit 10.24

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

SECOND AMENDED AND RESTATED PRODUCTS OFFTAKE AGREEMENT

between

MORGAN STANLEY CAPITAL GROUP INC.,

TRANSMONTAIGNE PRODUCT SERVICES INC.,

DELAWARE CITY REFINING COMPANY LLC

and

PBF HOLDING COMPANY LLC

Dated as of July 30, 2012


Table of Contents

 

         Page  

1.

  Definitions and Construction      2   

2.

  Effective Date and Term; Original Agreement      13   

3.

  [RESERVED]      14   

4.

  Daily Purchases and Sales of Product      14   

5.

  Delivery Nominations and Reporting      16   

6.

  MSCG Sales      19   

7.

  Certain Representations      21   

8.

  Warranties      21   

9.

  Pricing of Nominated Volumes; Premiums; Sales Incentive      22   

10.

  Additional MSCG Services      27   

11.

  Disposition of Products Upon Termination or Expiration      27   

12.

  Financial Information, Security and Requests for Further Assurances      28   

13.

  Refinery Turnaround, Maintenance and Closure      31   

14.

  Taxes      31   

15.

  Insurance      32   

16.

  Force Majeure      32   

17.

  Representations, Warranties and Covenants      33   

18.

  Termination Events, Default and Early Termination      36   

19.

  Indemnification and Claims      45   

20.

  Limitation on Damages      46   

21.

  Information and Inspection Rights      46   

22.

  Governance Committee      48   

 

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Table of Contents

 

23.

   Governing Law and Disputes      47   

24.

   Assignment      49   

25.

   Notices      49   

26.

   Nature of the Transaction and Relationship of the Parties      50   

27.

   Confidentiality      50   

28.

   Miscellaneous      51   

 

Schedules

Schedule 1 – Products List

Schedule 2 – Form of Quarterly Forecast

Schedule 3 – Form of Monthly Delivery Schedule

Schedule 4 – Form of Weekly Nomination

Schedule 5 – Payment Days for Light Finished Products and Specialty Grades

Schedule 6 – Light Finished Products and Specialty Grade Pricing

Schedule 7 – Intermediate Products Pricing

Schedule 8 – Slurry Pricing

Schedule 9 – Pro Forma Calculation of TVM

Schedule 10 – Transitional Offtake Agreement Term Sheet

Schedule 11 – Form of Intermediates Nomination Notices

Schedule 12 – Product Sales From TPSI to PBF

 

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AMENDED AND RESTATED PRODUCTS OFFTAKE AGREEMENT

This Second Amended and Restated Products Offtake Agreement is made as of July 30, 2012 to be effective as of August 1, 2012 (the “Effective Date”) at 00:00:01 a.m. EPT between Morgan Stanley Capital Group Inc., a Delaware corporation whose principal place of business is located at 2000 Westchester Avenue, Floor 01, Purchase, New York 10577-2530 (“MSCG”); TransMontaigne Product Services Inc., a Delaware corporation whose principal place of business is located 1670 Broadway, Suite 3100, Denver, Colorado 80202 (“TPSI”) for purposes of the TPSI Applicable Provisions (as defined below) only; and Delaware City Refining Company LLC, a Delaware limited liability company who has a place of business located at One Sylvan Way, 2nd Floor, Parsippany, NJ 07054-3887 (“DCRC”) and PBF Holding Company LLC, a Delaware limited liability company who has a place of business located at One Sylvan Way, 2nd Floor, Parsippany, NJ 07054-3887 (“PBFH”) (each of MSCG, PBFH and DCRC are referred to individually as a “Party” or collectively as the “Parties” and as used throughout this Agreement, the term “Party” in the singular shall be deemed either to refer to both DCRC and PBFH, jointly and severally, or to MSCG, and separately to TPSI for purposes of performance under TPSI Applicable Provisions only).

WHEREAS, MSCG and DCRC have previously entered into that certain Products Offtake Agreement, dated as of April 7, 2011 (the “Original Agreement”) as amended and restated by that certain Amended and Restated Products Offtake Agreement, dated as of June 28, 2012 (the “First Amended and Restated Agreement”), pursuant to which MSCG agreed to provide offtake services for certain light finished products as specified in Schedule 1 hereto (“Light Finished Products”), certain intermediate products also as specified in Schedule 1 hereto (“Intermediate Products”) and slurry (“Slurry”, and collectively with the Light Finished Products and the Intermediate Products, the “Products”) to DCRC at DCRC’s crude oil refinery located at Delaware City, Delaware (the “Refinery”); and

WHEREAS, MSCG and DCRC previously desired to amend and restate the Original Agreement in its entirety to (i) reflect the addition of PBFH as an MSCG Customer (as defined below) and joint and several obligor with DCRC (as used throughout this Agreement, “PBF” shall refer jointly and severally to DCRC and PBFH,), (ii) the addition of TPSI for certain limited obligations as set forth in TPSI Applicable Provisions, (iii) the removal of The Premcor Refining Group Inc. as a Customer, (iv) implement a procedure for nomination of, and for documentation of the economic terms for, Intermediate Product sourced from or bound for the market, (v) reflect the original intentions of the Parties and the course of dealing of the Parties in respect of the true-up of Cash Pricing Differentials, (vi) provide additional detail regarding DCRC’s role as the refiner and reporting entity for purposes of complying with the relevant environmental laws and regulations, and (vii) certain other terms and conditions as set forth herein;

WHEREAS, MSCG, TPSI, PBFH and DCRC desire to amend and restate the First Amended and Restated Agreement in its entirety to (i) change the title transfer point for sales of Premcor Product from TPSI to PBF from the Refinery’s truck rack to a bulk inventory location within the line between the Tanks and the Refinery’s truck rack as described in Schedule 12 and make certain related amendments, and (ii) better reflect the parties intentions with respect to certain other terms and conditions as set forth herein;

NOW, THEREFORE, in consideration of the premises and the respective promises, conditions, terms and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, MSCG, TPSI, PBFH and DCRC hereby agree as follows:

 

1. DEFINITIONS AND CONSTRUCTION

 

1.1 Definitions. For purposes of this Agreement, including the foregoing recitals, the following terms shall have the meanings indicated below.

Acceptable Letter of Credit Issuer” means a major U.S. commercial bank or a U.S. branch of a foreign bank which, at all times: (a) (i) satisfies all regulatory capital requirements applicable to it (including any individual regulatory capital requirements); (ii) is “well capitalized” within the meaning of Section 38 of the Federal Deposit Insurance Act, as amended, or any successor statute, and any applicable regulations thereunder; (iii) has a senior unsecured credit rating of at least “A” (or its then current equivalent) by Standard & Poor’s Ratings Service (or any successor rating agency thereto) and at least “A2” (or its then current equivalent) by Moody’s Investors

 

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Service, Inc. (or any successor rating agency thereto); and (iv) meets the applicable criteria of the demanding Party for letter of credit issuers as in effect at such time, including credit, legal and risk management criteria; or (b) is otherwise acceptable to the demanding Party in its sole discretion.

Additional Termination Event” means any of the events or circumstances specified as such in Section 18.3.

Affected Party” has the meaning specified in Section 18.3.

Affiliate” means, in relation to either Party, any entity controlled, directly or indirectly, by such Party, any entity that controls, directly or indirectly, such Party, or any entity directly or indirectly under common control with such Party. For this purpose, “control” of any entity or Party means ownership of a majority of the issued shares, or voting power or control in fact, of the entity or Party. For purposes of this Agreement, the term “Affiliate” does not include Morgan Stanley Derivative Products Inc.

Agreement” or “this Agreement” means this Second Amended and Restated Products Offtake Agreement and all Schedules hereto, which are incorporated herein, as may be amended, modified or supplemented from time to time in accordance with the terms hereof.

Ancillary Costs” means all actual direct and indirect costs and expenses associated with or arising from the acquisition, storage, receipt, delivery, handling, loading, discharge, movement and blending of Products at the Refinery, and all Taxes and charges imposed by any Governmental Authority.

Applicable Law” means (i) any law, statute, regulation, code, ordinance, license, decision, order, writ, injunction, directive, judgment, policy, decree and any judicial or administrative interpretations thereof, (ii) any agreement, concession or arrangement with any Governmental Authority or (iii) any license, permit or compliance requirement, including under any Environmental Law, in each case as may be applicable to either Party or either Party’s performance under this Agreement.

Bankrupt” means, with respect to a Party, its Guarantor, any of its direct or indirect parent companies or any entity issuing a letter of credit on its behalf hereunder, as the case may be, that such Party (or its Guarantor, any of its direct or indirect parent companies or an entity providing a letter of credit on its behalf hereunder): (i) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (iii) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (iv) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation; (v) has a resolution passed for its winding-up, official management or liquidation, other than pursuant to a consolidation, amalgamation or merger; (vi) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for all or substantially all of its assets; (vii) has a secured party take possession of all or substantially all of its assets, or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all of its assets; (viii) files an answer or other pleading admitting or failing to contest the allegations of a petition filed against it in any proceeding of the foregoing

 

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nature; (ix) causes or is subject to any event with respect to it which, under Applicable Law, has an analogous effect to any of the events specified in clauses (i) to (viii) (inclusive); or (x) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. §§ 101 et. seq.

Barge” means any combination of tugs and barges with the ability to function as a flotilla or single units.

Base Interest Rate” means the lesser of ***** and the maximum rate of interest permitted by Applicable Law.

Breakage Costs” means, without duplication, all out-of-pocket losses, damages and expenses reasonably and necessarily incurred by the Performing Party as a result of termination and liquidation of this Agreement, any Sale Contract and any Specified Agreement, in each case including reasonable attorneys’ fees, court costs, collection costs, interest charges and other disbursements, and any costs incurred in a reasonable commercial manner in obtaining, maintaining, replacing or liquidating commercially reasonable hedges or trading positions relating to (i) the volumes of Products for which MSCG has incurred forward purchase or sale obligations in contemplation of fulfilling its objectives under this Agreement, (ii) any of MSCG Inventory or (iii) any Specified Agreement that is being terminated and liquidated.

Buckeye” means Buckeye Partners, L.P. or any of its partnership subsidiaries or limited liability company subsidiaries, as applicable.

Buckeye Pipeline” means the common carrier pipeline and related terminal system owned and operated by Buckeye, which includes connections between Linden, New Jersey and Sinking Springs, Pennsylvania.

Business Day” means a day on which banks are open for general commercial business in New York, New York.

Change of Control” means, as to PBF, the occurrence of, or the taking of any corporate action to facilitate, any of the following:

 

  (i) the consolidation of PBF or its Guarantor with another person, the merger of PBF or its Guarantor into another person, the merger of another person into PBF or its Guarantor, or any similar event pursuant to a transaction in which 50% or more of the voting shares of PBF are changed into or exchanged for cash, securities or other property (other than any such transaction where the holders of the voting shares of PBF or its Guarantor immediately prior to such transaction own, directly or indirectly, not less than a majority of the voting shares of the surviving or resulting person or persons immediately after such transaction); or

 

  (ii) the consummation of any transaction or series of related transactions (including any merger or consolidation) the result of which is that any person other than PBF or its Guarantor becomes the beneficial owner directly or indirectly, of more than 30% of the voting shares of PBF or its Guarantor;

 

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provided, however, that an initial public offering shall not constitute a Change of Control.

For purposes of this definition, any transfer of an equity interest in a person that was formed for the purpose of acquiring voting shares of a person shall be deemed to be a transfer of such portion of such voting shares as corresponds to the portion of the equity of such person that has been so transferred.

Change of Law” means, on or after the Effective Date of the Original Agreement, any Applicable Law is adopted or changed or any court, tribunal or regulatory authority with competent jurisdiction changes its interpretation of any Applicable Law.

Commencement Date” has the meaning specified in the Original Agreement.

Commercial Operations Date” means the first day of the month that follows the month during which the Refinery consistently produces on-spec Products at rates that are within a range reflecting production levels anticipated during normal operations.

Credit Agreement” means (i) any present or future material agreement or undertaking by DCRC or its parent for financing Refinery operations, (ii) any present or future material extension of credit, credit facility, guaranty, loan or indenture to or for PBF or its parent, (iii) any material obligation of PBF or its parent (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money, or any guaranty of PBF’s or any of its parent’s obligations, with any bank, financial or lending institution, bond or note issuer, indenture trustee, guarantor, underwriter, Affiliate or any other person, including the Revolving Credit Agreement and the Term Loan Agreement.

Credit Event Upon Merger” means a Party or its Guarantor consolidates or amalgamates with, merges with or into, or transfers all or substantially all its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, (i) the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement or any Specified Agreement, either by operation of law or by an agreement satisfactory to the other Party or otherwise, or (ii) in the reasonable opinion of the other Party, the creditworthiness of the successor, surviving or transferee entity, is materially weaker than the predecessor entity immediately prior to the consolidation, amalgamation, merger or transfer.

Crude Counterparty” has the meaning specified in Section 4.5.2.

Customer” means any person, including PBF, to whom MSCG or TPSI sells Products that were either produced at the Refinery and sold by DCRC or PBFH to MSCG or delivered to the Refinery by MSCG. The term “Customer” shall not include TPSI unless otherwise specified.

Daily Report of Delivered Volumes” has the meaning specified in Section 5.9.

Default” means any of the events or circumstances specified as such in Section 18.2.

Default Interest Rate” means the lesser of (i) the Prime Rate as published under “Money Rates” in the Wall Street Journal in effect at the close of the Business Day on which the payment was due plus *****%, and (ii) the maximum rate of interest permitted by Applicable Law.

Defaulting Party” has the meaning specified in Section 18.4.

 

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Delivered Volumes” has the meaning specified in Section 5.9.

Delivery Date” means any day on which Delivered Volumes of Products are delivered into the Tanks and purchased by MSCG or any day on which Delivered Volumes of Intermediate Products are withdrawn from the Tanks and purchased by PBF.

Delivery Month” has the meaning specified in Section 5.2.

Early Termination Date” has the meaning specified in Section 18.4.3.

Early Termination Fee” means the amount payable by one Party to the other Party in connection with the early termination of this Agreement in the amount specified in Section 18.5.

Effective Date” means, assuming the due execution of this Agreement by each Party’s authorized representative, the date first written above, upon which this Agreement shall become binding upon and enforceable against the Parties.

Environmental Law” means any existing or past law, policy, judicial or administrative interpretation thereof or any legally binding requirement that governs or purports to govern the protection of persons, natural resources or the environment (including the protection of ambient air, surface water, groundwater, land surface or subsurface strata, endangered species or wetlands), occupational health and safety and the manufacture, processing, distribution, use, generation, handling, treatment, storage, disposal, transportation, release or management of solid waste, industrial waste or hazardous substances or materials.

EPA” means the United States Environmental Protection Agency.

EPT” means Eastern Prevailing Time.

Event of Default” means any of the events or circumstances specified as such in Section 18.2.

Feedstock” has the meaning specified in Section 4.4.3.

Final Payment Amount” has the meaning specified in Section 9.1.2.

Final Payment Day” has the meaning specified in Schedule 5.

Financial Officer” of any person shall mean the chief financial officer, principal accounting officer, treasurer or controller of such person.

Finished Products Invoice” has the meaning specified in Section 9.5.1.

Force Majeure Event” means any cause or event reasonably beyond the control of a Party or TPSI, including fires, earthquakes, lightning, floods, explosions, storms, adverse weather, landslides and other acts of natural calamity or acts of God; navigational accidents or maritime peril; vessel damage or loss; strikes, grievances, actions by or among workers or lock-outs, whether or not such labor difficulty could be settled by acceding to any demands of any such labor group of individuals; accidents at, closing of, or restrictions upon the use of mooring facilities, docks, ports, pipelines, harbors, railroads or other navigational or transportation mechanisms; disruption or breakdown of or explosions or accidents to wells, storage plants,

 

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refineries, terminals, machinery or other facilities; acts of war, hostilities (whether declared or undeclared), civil commotion, embargoes, blockades, terrorism, sabotage or acts of the public enemy; any act or omission of any Governmental Authority; good faith compliance with any order, request or directive of any Governmental Authority; curtailment, interference, failure or cessation of supplies reasonably beyond the control of a Party or TPSI; or any other cause reasonably beyond the control of a Party or TPSI, whether similar or dissimilar to those above and whether foreseeable or unforeseeable, which, by the exercise of due diligence, such Party or TPSI could not have been able to avoid or overcome.

For purposes of this Agreement, the term “Force Majeure” expressly excludes:

 

  (i) a failure of performance of any person other than the Parties or TPSI (except to the extent that such failure otherwise would constitute a Force Majeure Event but for this exclusion);

 

  (ii) the loss of a Party’s or TPSI’s market or any market conditions for any Products produced at the Refinery or any market conditions that are unfavorable for either Party or TPSI;

 

  (iii) any failure by a Party or TPSI to apply for, obtain or maintain any permit, license, approval or right of way necessary under Applicable Law for the performance of any obligation under this Agreement; and

 

  (iv) a Party’s or TPSI’s inability to economically perform its obligations under any transaction undertaken pursuant to this Agreement.

GAAP” shall mean generally accepted accounting principles in the United States applied on a consistent basis.

Governmental Authority” means any federal, state or local governmental body, agency, instrumentality, authority or entity established or controlled by a government or subdivision thereof, including any legislative, administrative or judicial body or any person purporting to act therefor, port authority and any stock or commodity exchange or similar self-regulatory body or supervisory authority having appropriate jurisdiction.

Guarantor” means, with respect to MSCG and TPSI, Morgan Stanley, with respect to PBF, PBF Energy Company LLC (“PBFE”) and with respect to DCRC, PBFH, provided, however, that in the event PBFE contributes or otherwise conveys its interest in PBFH to an Affiliate of PBFE, then MSCG and TPSI shall accept a substitute Guaranty from such new entity on the same terms as the Guaranty from PBFE in place of the Guaranty provided by PBFE.

Guaranty” means (i) the guaranty by MSCG’s Guarantor of MSCG’s prompt and complete payment of obligations under this Agreement, (ii) the guaranty by PBF’s Guarantor of PBF’s prompt and complete payment of obligations under this Agreement and (iii) the guaranty by DCRC’s Guarantor of DCRC’s prompt and complete payment of obligations under this Agreement, which is to be provided to PBF or MSCG, as applicable, pursuant to Section 12.2.

Independent Inspector” means a licensed person acceptable to both Parties that performs sampling, quality analysis and quantity determinations of the Products purchased by a Party under this Agreement.

 

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Initial Term” has the meaning specified in Section 2.2.

Intercreditor Agreement” means that certain Amended and Restated Intercreditor Agreement dated on or about April 7, 2011 among MSCG; UBS AG, Stamford Branch; DCRC, PBFH and PRC, as Borrowers; and the other loan parties thereto.

Intermediate Products” has the meaning specified in the recitals hereto.

Intermediates Nomination Notice” means a nomination notification substantially in the form of Schedule 11A hereto, in the case of certain sales of Intermediate Product from MSCG to PBF as described herein, or in the form of Schedule 11B hereto, in the case of certain sales of Intermediate Product from PBF to MSCG as described herein.

Invoice Day” means each Business Day during the Term and each of the first three Business Days after the Termination Date.

Laurel Pipeline” means the pipeline owned and operated by Laurel Pipe Line Company, L.P. that originates at the Booth and Chelsea Junction in Pennsylvania and terminates in Coraopolis, Pennsylvania.

Letter of Credit Default” means the occurrence of any of the following events as to any outstanding letter of credit: (i) the Acceptable Letter of Credit Issuer no longer meets one or both of the criteria of an “Acceptable Letter of Credit Issuer” as defined in this Agreement; (ii) the Acceptable Letter of Credit Issuer fails to comply with or perform its obligations under such letter of credit; (iii) the Acceptable Letter of Credit Issuer disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such letter of credit; (iv) the letter of credit expires or terminates, or fails or ceases to be in full force and effect at any time during any period when the demanding Party requires that the other Party maintain the letter of credit; (v) the Party providing the letter of credit as performance assurance fails to cause a renewal or replacement letter of credit to be delivered to the demanding Party at least 15 Business Days (or by such other date required by the demanding Party) prior to the expiration of such letter of credit; or (vi) the Acceptable Letter of Credit Issuer becomes or is Bankrupt.

Liabilities” means any and all claims, demands, suits, losses, expenses (including reasonable attorneys’ fees), damages, charges, fines, penalties, deficiencies, assessments, interest, fines, costs and expenses of any kind (including reasonable attorneys’ fees and other fees, court costs and other disbursements), causes of action and liabilities of every type and character, including personal injury or death to any person or loss or damage to any personal or real property, and any Liabilities directly or indirectly arising out of or related to any suit, proceeding, judgment, settlement or judicial or administrative order and any Liabilities with respect to Environmental Laws.

LIBOR” means, as of the date of any determination, the London Interbank Offered Rate for one-month U.S. dollar deposits appearing on Page 3750 of the Telerate screen (or any successor page) at approximately 11:00 a.m. (London time). If such rate does not appear on Page 3750 of the Telerate screen (or otherwise on such screen), LIBOR shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as MSCG may select or, in the absence of such availability, by reference to the rate at which MSCG is offered one-month U.S. dollar deposits at or about 11:00 a.m. (London time) in any interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being

 

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conducted. LIBOR shall be established on the first day on which a determination of the interest rate is to be made under this Agreement and shall be adjusted daily based on the one-month LIBOR quotes made available through the foregoing sources.

Lien” means any lien, pledge, mortgage, claim, charge, encumbrance or other security interest of any nature whatsoever that secures any obligation of any person or any other agreement or arrangement having a similar effect.

Light Finished Products” has the meaning specified in the recitals hereto.

Location Premium” has the meaning specified in Section 9.2.1.

Material Adverse Change” means, (i) as to PBF or its Guarantor, any condition, circumstance, event, change or effect or combination thereof that individually or in the aggregate has or reasonably could be expected to have or result in (A) a material adverse change in, or a material adverse effect upon, PBF’s or its Guarantor’s operations, business, properties, condition (financial or otherwise) or prospects taken as a whole, for which MSCG has reasonable grounds for insecurity under this Agreement; (B) a material impairment of the ability of PBF to perform any of its obligations under any of the Transaction Documents or any Specified Agreement or of its Guarantor to perform any of its obligations under the Guaranty, or (C) a material adverse effect upon the legality, validity, binding effect or enforceability against PBF of any of the Transaction Documents or any Specified Agreement or against its Guarantor of the Guaranty, or any rights or remedies against such Party under any of the Transaction Documents, Specified Agreement or the Guaranty, as the case may be, and (ii) as to MSCG, *****.

Monthly Delivery Schedule” means the schedule prepared by PBF that sets forth the nominated volumes for the relevant Delivery Month, as further described in Section 5.2.

Monthly Specialty Premium Adjustment” has the meaning specified in Section 9.2.2.

Monthly True-Up Notice” has the meaning specified in Section 9.6.

Monthly True-Up Payment” means the monthly payment to be paid by one Party to the other Party, which comprises the items and adjustments described in Section 9.6.

MSCG Inventory” means, from time to time, (i) the Products that MSCG purchased from PBF under this Agreement and that MSCG currently owns and (ii) any Products or ethanol that MSCG purchased from third parties and delivered to the Refinery (including any pipeline line fill, Tank bottoms and working inventories, other than linefill extending from the Refinery’s processing units to the Tanks), wherever located, including while in the Tanks, within a Pipeline or while loaded upon Barges.

MSCG Purchase Payment Amount” has the meaning specified in Section 9.1.3.

MSCG Termination Amount” has the meaning specified in Section 18.9.

MSCG Weekly Supply Report” has the meaning specified in Section 5.6.

 

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Net Finished Products Amount” has the meaning specified in Section 9.5.1.

Net Payment Amount” has the meaning specified in Section 9.5.2.

Net Payment Amount Invoice” has the meaning specified in Section 9.5.2.

New Premcor Agreement” means the Offtake/Exchange Agreement entered into between PBFH and Premcor on or prior to the Effective Date, a copy of which is attached as Attachment “B” to Schedule 12.

Non-Performing Party” means either the Affected Party (as defined in Section 18.3) or the Defaulting Party (as defined in Section 18.4).

Payment Direction Agreement” means the agreement entered into among DCRC, MSCG and SMT whereby DCRC may assign the receivables owing to DCRC in respect of Light Finished Products, Specialty Grades and any other Product mutually agreed upon by the Parties from time to time to SMT such that MSCG pays amounts otherwise due to DCRC to SMT directly.

PBF” has the meaning specified in the recitals hereto.

PBF Purchase Payment Amount” has the meaning specified in Section 9.1.3.

Performing Party” has the meaning specified in Section 18.4.

Pipelines” means, collectively, the Laurel Pipeline, the Buckeye Pipeline and the Sunoco Pipeline, and “Pipeline” means any one of these.

Potential Event of Default” means any Event of Default, which with notice or the passage of time, would constitute an Event of Default.

PRC” means Paulsboro Refining Company LLC.

Premcor” means The Premcor Refining Group Inc.

Products” has the meaning specified in the recitals hereto.

Provisional Payment Amount” has the meaning specified in Section 9.1.1.

Provisional Payment Day” has the meaning specified in Schedule 5.

Provisional Specialty Premium” has the meaning specified in Section 9.2.2.

Quarterly Forward Price Report” has the meaning specified in Section 5.7.

Refinery” has the meaning specified in the recitals hereto.

Related Agreements” means the (i) Products Offtake Agreement between MSCG and PRC (as assignee of PBF), dated December 14, 2010, as amended from time to time, and (ii) the Crude Oil Acquisition Agreement between TRC or PBFH (as assignee of TRC) and MSCG, dated on or about May 31, 2011, as amended from time to time.

 

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Relevant Delivery Date” has the meaning specified in Section 9.1.1.

Renewal Term” has the meaning specified in Section 2.3.

Representatives” means a Party’s or any of its Affiliates’ directors, officers, employees, auditors, consultants, banks, financial advisors and legal advisors.

Revolving Credit Agreement” means that certain Amended and Restated Revolving Credit Agreement dated as of May 31, 2011, among PBFH, DCRC, TRC and PRC as borrowers, and the guarantors and lenders party thereto, as amended from time to time.

RFS2” means the EPA’s Renewable Fuel Standard program, 40 C.F.R. 80.1400 et seq.

Run-off Period” has the meaning specified in Section 11.1.

Sale Contract” means a contract between MSCG and a Customer or between TPSI and a Customer for the sale of any Product that MSCG purchases from PBF hereunder.

Sales Incentive” has the meaning specified in Section 9.3.

Slurry” has the meaning specified in the recitals hereto.

SMT” means Statoil Marketing and Trading (US) Inc.

Specialty Grade” has the meaning specified in Section 4.5.1.

Specialty Grade Premium” has the meaning specified in Section 9.2.2.

Specified Agreement” means any agreement between the Parties to purchase, sell or exchange commodities, including any spot or forward contract, future, option, swap, swap option, cap, floor or collar or other derivative transaction on or with respect to a commodity or any combination of these transactions.

Specified Indebtedness” means any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) of PBF or any Affiliate of PBF in respect of borrowed money.

Storage Agreement” means the Terminaling and Storage Services Agreement entered into by DCRC and MSCG and dated as of April 7, 2011 pursuant to which DCRC leases Tanks to MSCG and provides related services to MSCG, subject to the terms and conditions set forth therein.

Sunoco Pipeline” means the pipeline owned and operated by Sunoco Pipeline L.P. with connections from Twin Oaks, Pennsylvania to Linden, New Jersey and the Booth and Chelsea Junction in Pennsylvania.

Tanks” means each of the tanks located at the Refinery and leased to MSCG pursuant to the Storage Agreement.

Taxes” means any and all federal, state and local taxes, duties, fees and charges of every description, including all motor fuel, excise, gasoline, aviation fuel, special fuel, diesel,

 

10


environmental, spill, gross earnings or gross receipts and sales and use taxes, however designated, paid or incurred with respect to the purchase, storage, exchange, use, transportation, resale, importation or handling of the Product; provided, however, that “Taxes” does not include: (i) any tax imposed on or measured by net profits, gross or net income, or gross receipts (excluding, for the avoidance of doubt, any transaction taxes such as sales, use, gross earnings or gross receipts or similar taxes that are based upon gross receipts, gross earnings or gross revenues received from the sale of petroleum products, such as the Delaware gross receipts tax, which, for the avoidance of doubt, is included in the definition of “Taxes”); (ii) any tax measured by capital value or net worth, whether denominated as franchise taxes, doing business taxes, capital stock taxes or the like; and (iii) business license or franchise taxes or registration fees.

Term” means the Initial Term and any Renewal Term or Renewal Terms.

Term Loan Agreement” means the Term Loan Credit Agreement dated on or about December 17, 2010 among DCRC, PBFH and PRC as borrowers, and the guarantors and lenders party thereto.

Termination Amount” has the meaning specified in Section 18.9.

Termination Date” has the meaning specified in Section 11.1.

Termination Event” means an Event of Default or an Additional Termination Event.

TPSI” means TransMontaigne Product Services Inc., an Affiliate of MSCG.

TPSI Applicable Provisions” means Sections 1, 2, 4.3, 7, 9.8, 9.10, 12.2, 14, 16 – 20, 23, 24, 26 – 28 of this Agreement and Schedule 12 to this Agreement.

TPSI Termination Amount” has the meaning specified in Section 18.9.

Transaction Documents” means this Agreement, the Storage Agreement, the Payment Direction Agreement, each Guaranty, the Intercreditor Agreement and any confirmations or other writings or communications that document the sales of Products from PBF to MSCG, the sales of Intermediate Products from MSCG to PBF or the sales of Products from TPSI to PBF.

TRC” means Toledo Refining Company LLC.

Twin Oaks Pipeline” means the proprietary pipeline extending from the Refinery to Twin Oaks, Delaware.

Unpaid Amounts” means any amounts owed by one Party to another Party under this Agreement that have not been paid as of the date of determination.

Weekly Nomination” has the meaning specified in Section 5.3.

 

1.2 Interpretation. Unless the context otherwise requires or except where specifically stated otherwise, in this Agreement:

 

  1.2.1 words using the singular or plural number also include the plural or singular number, respectively;

 

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  1.2.2 references to any Party shall be construed as a reference to such Party’s successors in interest and permitted assigns;

 

  1.2.3 references to a provision of Applicable Law or Applicable Laws generally are references to that provision or Applicable Laws generally, as may be amended, extended or re-enacted from time to time;

 

  1.2.4 references to “days,” “months” and “years” mean calendar days, months and years, respectively, and a “day” consists of the 24-hour period commencing at 12:00:00 a.m. EPT and ending on 11:59:59 EPT on that day;

 

  1.2.5 references to “dollars” or “$”mean U.S. dollars;

 

  1.2.6 references to “Sections” and “Schedules” in this Agreement, or to a provision contained therein, shall be construed as references to the Sections and Schedules of this Agreement, as may be amended, modified or supplemented from time to time in accordance with the terms hereof. References to any other agreement, or other document or to a provision contained in any of these, shall be construed, at the particular time, as a reference to it as it may then have been amended, supplemented, modified, suspended, assigned or novated in accordance with its terms;

 

  1.2.7 references to “assets” include present and future properties, revenues and rights of every description;

 

  1.2.8 references herein to “consent” mean, unless otherwise specified, the prior written consent of the Party at issue, which shall not be unreasonably withheld, delayed or conditioned;

 

  1.2.9 the terms “hereof,” “herein,” “hereby,” “hereto” and similar words refer to this entire Agreement and not any particular Section, subsection, Schedule or subdivision of this Agreement;

 

  1.2.10 the words “include” or “including” shall be deemed to be followed by “without limitation” or “but not limited to” whether or not they are followed by such phrases or words of like import;

 

  1.2.11 references to a “judgment” include any order, injunction, determination, award or other judicial or arbitral measure in any jurisdiction;

 

  1.2.12 references to “obligations” shall be construed to mean a Party’s prompt and complete performance of its covenants and obligations required pursuant to this Agreement; and

 

  1.2.13 references to any “person” include any natural person, corporation, partnership, limited liability company, joint venture, trust or unincorporated organization, estate, association, partnership, statutory body, joint stock company or any other private entity or organization, Governmental Authority, court or any other legal entity, whether acting in an individual, fiduciary or other capacity.

 

1.3 If there is any ambiguity, inconsistency, discrepancy or conflict between this Agreement and any other Transaction Document, this Agreement shall prevail.

 

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1.4 Unless otherwise specified, in computing any period of time under this Agreement the day of the act, event or default from which such period begins to run shall be day “zero” and not included. If the last day of the period so computed is not a Business Day then, unless this Agreement provides otherwise, the period shall run until the end of the next Business Day.

 

1.5 The provisions of this Agreement shall be construed in accordance with the natural meanings of its terms, and the contra proferentum rule shall not apply to the construction or interpretation of this Agreement.

 

2. EFFECTIVE DATE AND TERM; ORIGINAL AGREEMENT

 

2.1 Original Agreement. As of the date hereof the Original Agreement and the First Amended and Restated Agreement will be amended and restated in its entirety by this Agreement. Schedule 7 hereto, as amended pursuant to the First Amended and Restated Agreement shall be deemed to reflect the Parties’ original intentions regarding the Cash Pricing Differential and therefore shall be deemed to have been effective from April 7, 2011 and during the term of the Original Agreement.

 

2.2 Initial Term. This Agreement shall commence on the Effective Date and shall continue in effect through the earlier of (i) second anniversary of the Commercial Operations Date under the Original Agreement and (ii) June 30, 2013 (in either case, the “Initial Term”).

 

2.3 Renewal Term. Unless either Party provides written notice delivered no later than nine (9) months prior to expiration of the Initial Term (September 30, 2012) requesting termination at expiration of the Initial Term, and absent an Event of Default or Additional Termination Event that results in an Early Termination Date, from and after expiration of the Initial Term this Agreement shall automatically renew upon expiration of the Initial Term and continue in full force and effect thereafter for a period of nine (9) months (such period from the expiration of the Initial Term, a “Renewal Term”). This Agreement shall automatically renew for nine (9) month terms at the conclusion of the first Renewal Term (each such nine (9) month term a Renewal Term); provided, however, that at any time after September 30, 2012 and during any Renewal Term either Party may terminate this Agreement pursuant to a written notice delivered to the other Party no less than nine (9) months prior to the Termination Date designated in such notice, but if an earlier Early Termination Date applies, then this Agreement shall terminate on such Early Termination Date. Notwithstanding termination pursuant to this Section 2.3 the Parties shall perform their obligations relating to termination pursuant to Section 11.

 

3. [RESERVED]

 

4. DAILY PURCHASES AND SALES OF PRODUCT

 

4.1 Purchase by MSCG of Refinery Offtake. MSCG agrees to purchase from PBF, and PBF agrees to sell to MSCG, the output of Products from the Refinery in accordance with the terms of this Agreement.

 

  4.1.1 Conditions to Offtake Obligations. MSCG’s Product offtake obligations are subject to PBF’s performance of its obligations hereunder and under the other Transaction Documents.

 

4.2 Supply by MSCG of Intermediate Products. MSCG agrees to supply, sell and deliver to PBF the Intermediate Products requirements of the Refinery, and PBF agrees to purchase and take delivery from MSCG of the Intermediate Products requirements of the Refinery in accordance with the terms of this Agreement.

 

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  4.2.1 Conditions to Supply Obligations. MSCG’s supply obligations shall be consistent with each Intermediates Nomination Notice delivered by MSCG and, with respect to volumes that are not delivered pursuant to an Intermediates Nomination Notice, the communications between the Parties, and such obligations shall be subject to PBF’s performance of its obligations hereunder and under the other Transaction Documents.

 

4.3 Supply by TPSI of Products. TPSI agrees to supply, sell and deliver to PBF certain quantities of Products and PBF agrees to purchase and take delivery from TPSI of such Products as set forth in Schedule 12.

 

  4.3.1 Conditions to Supply Obligations. TPSI’s supply obligations shall be subject to PBF’s performance of its obligations hereunder.

 

4.4 Exclusivity.

 

  4.4.1 Exclusive Purchaser. PBF agrees that MSCG shall be its exclusive purchaser of all Products produced in the Refinery during the Term of this Agreement. Unless otherwise agreed in advance in writing by MSCG, PBF agrees not to sell, deliver or transfer title to Products to any person other than MSCG and not to transfer custody to Product to any person other than to MSCG or to its or to a designee’s carrier for delivery to Customers except as set forth in Schedule 12.

 

  4.4.2 Exclusive Supplier. PBF agrees that, as long as MSCG has not breached its obligations to supply the requirements of the Refinery, MSCG shall be its exclusive supplier of Intermediate Products for processing or blending in the Refinery during the Term of this Agreement, and in the case of any breach, exclusivity shall be suspended only to the extent of the deficiency in supply. PBF agrees not to purchase Intermediate Products from any person other than MSCG unless otherwise agreed in advance in writing by MSCG or unless MSCG objects to any sale of Intermediate Product requirements hereunder, in which case exclusivity shall be suspended to the extent of such objection.

 

  4.4.3 Exclusive Use of Tanks. Pursuant to the Storage Agreement, and subject to DCRC’s rights to control Refinery operations under Section 4.6.4, DCRC shall make available to MSCG all of DCRC’s and its Affiliates’ rights to use the Tanks for the Term of this Agreement, except to the extent PBF is required to own Product in-tank pursuant to the terms of Schedule 12. DCRC shall reasonably coordinate with MSCG any planned or unplanned change in Tank utilization, including when the service of a Tank is changed from use for one Intermediate Product, Light Finished Product or Slurry to use for another, or changed from use for a Product to use for a product that is being or will be sold to PBF or a Crude Counterparty (a “Feedstock”), and shall use commercially reasonable efforts to provide alternative tank capacity if a Tank must be taken out of service or its use changed. If, pursuant to the terms of the Storage Agreement, DCRC determines that a Tank shall no longer be available to MSCG for storage of Products, DCRC as storage provider shall use commercially reasonable efforts to provide alternative capacity (under the terms of the Storage Agreement) and shall transfer MSCG’s Product to the alternative tank if necessary.

 

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4.5 Specifications. The Products sold and delivered to MSCG at the Refinery shall generally conform to the typical properties set forth for each grade of Light Finished Products or Slurry in Schedule 1 as amended from time to time.

 

  4.5.1 Specialty Grades. From time to time, PBF may desire to make or MSCG may desire to sell a customized product that is not included in the grades of Products encompassed in Schedule 1 (a “Specialty Grade”). In this circumstance, the Parties shall negotiate in good faith to agree to the terms under which such Specialty Grade would be produced, priced and delivered and in the absence of an agreement as to such terms, no production or sale of a Specialty Grade shall occur.

 

  4.5.2 Quality Downgrades. In the event that any portion of MSCG Inventory located in Tanks is downgraded such that it no longer meets (or never met) the typical properties of the Product specified in Schedule 1 on which the price for MSCG’s purchase was based (the “Original Price”), then either (i) if the product has been downgraded to a Feedstock, MSCG shall deliver and sell (either by in-tank transfer or delivery at the outlet flange of the Tank in which such inventory is stored at the time) and DCRC shall purchase or cause SMT or any other PBF crude oil supply counterparty (“Crude Counterparty”) to purchase such inventory at a price equal to the Original Price; or (ii) in any other case, MSCG and PBF shall negotiate in good faith to agree on the disposition of the Product or other action in respect of such downgrade to ensure that such downgrade does not have an adverse impact on MSCG.

 

4.6 Title, Risk of Loss and Custody.

 

  4.6.1 Transfer of Title. Title to Products purchased by MSCG pursuant to the terms of this Agreement shall pass from PBF to MSCG as the Product passes the inlet flange of the Tank to which the Products are being delivered. Except in the case of Premcor Product, Title to Products purchased by PBF pursuant to the terms of this Agreement shall pass from MSCG to PBF as the Intermediate Products pass the outlet flange of the Tank from which such Product is being delivered.

 

  4.6.2 Ownership. MSCG shall own and have title to all of the Products located at the Refinery after title to such Products passes from PBF to MSCG as described in Section 4.6.1 and shall own and have title to all Products that it delivers into the Refinery, in each case, until MSCG sells such Products to PBF or otherwise disposes of such Products in connection with the termination or expiration of this Agreement.

 

  4.6.3 Transfer of Custody. PBF shall maintain custody of all Products owned by MSCG pursuant to the terms of the Storage Agreement.

 

  4.6.4 Refinery Operations. At all times DCRC shall have and retain complete control of the Refinery and its maintenance and operations, including utilization or maintenance of Tanks.

 

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4.7 Foreign Trade Zone Status.

 

  4.7.1 If ***** sells Product to a Customer for export and such Product is duty-free pursuant to the U.S. Customs and Border Protection Foreign Trade Zone (“FTZ”) Regulations (19 C.F.R. Part 146) (such Product, “FTZ Product”), and the economics of the sale to the Customer is adjusted because the FTZ Product is being sold duty-free, a corresponding price adjustment shall be made to the ***** and/or the ***** payable by *****. In any case, the Parties intend that the Customer will be responsible for completing the application process or taking any action required to exempt itself from the payment of the relevant customs duty.

 

  4.7.2 ***** agrees to reimburse ***** for any economic adjustment (an “FTZ Adjustment”) for the account of a Customer that purchases Product provided by ***** if such Customer would have purchased duty-free FTZ Product but for the ***** to obtain or maintain FTZ status for the Refinery at the time of ***** sale to such Customer. Any such FTZ Adjustment will be ***** that would be payable to ***** with respect to the affected Product sales contract. MSCG shall consult with PBF regarding the availability of duty offsets prior to any sale of Product to a Customer that intends to purchase FTZ Product.

 

4.8 Blending of Products at the Refinery. In its role as a “fuel manufacturer” and a “refiner” (as such terms are defined under 40 C.F.R. Part 79 and Part 80) PBF shall be responsible for: (i) registering the Products and the Refinery with the EPA, (ii) designating all of the volumes of Products that it may produce by refining and/or blending in accordance with EPA requirements, (iii) testing and certifying Product batches in accordance with EPA requirements, (iv) compliance with all applicable EPA recordkeeping and reporting requirements, (v) properly administering the product transfer document (“PTD”) requirements of the EPA, (vi) meeting the renewable volume obligation (“RVO”) compliance requirements as required under the RFS2 program, and (vii) any and all other “fuel manufacturer” and “refiner” requirements set forth by the EPA under 40 C.F.R. Part 79 and Part 80.

PBF shall indemnify, defend, and hold harmless MSCG against any and all liabilities in connection with a breach by DCRC of its obligations under this Section 4.8.

 

5. DELIVERY NOMINATIONS AND REPORTING

 

5.1 Coordination, Planning and Information Flow Procedures. The Parties shall develop procedures for the exchange of information between PBF and MSCG throughout the Term to facilitate optimization of the Refinery operations and production scheduling with MSCG’s marketing and sales activities. Such procedures will include meetings (whether in person or by telephone or video conference) on an as required basis and a monthly meeting in person between PBF personnel and MSCG to, amongst other things, review the then current maintenance activities, delivery and production programs and related operational issues and to consider marketing activity and opportunities.

 

5.2

Monthly Delivery Schedule. Prior to the 20th of every month, the Parties shall consult regarding the production and delivery schedule for the next following month and PBF shall provide MSCG with a report reflecting such forecasted schedule (the “Monthly Delivery Schedule”), substantially in the form attached hereto in Schedule 3, that indicates (i) the Refinery’s non-binding estimate of the production of each grade of Intermediate Product, Light Finished Product

 

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  and Slurry and (ii) the Refinery’s non-binding estimate of Intermediate Products (by grade) requirements, in each case, specifying volumes of each grade of Product for delivery during the following month (each, a “Delivery Month”). PBF shall notify MSCG promptly upon becoming aware of significant changes for operational purposes to the Monthly Delivery Schedule and MSCG shall notify PBF promptly upon becoming aware of circumstances that could impact its ability to receive or deliver Product during the period covered by the Monthly Delivery Schedule. The information related to Refinery production provided in the Monthly Delivery Schedule is provided for the Parties’ planning purposes only.

 

5.3 Weekly Nomination. No later than 10:00 a.m. EPT on Thursday of each calendar week, PBF shall provide to MSCG a report (the “Weekly Nomination”), substantially in the form attached hereto in Schedule 4, specifying the non-binding best estimate of the Refinery’s production of each grade of Intermediate Product, Light Finished Product and Slurry, specifying volumes of each grade of Product for delivery on each day during the next following calendar week. If any Thursday is not a Business Day, the Weekly Nomination shall be delivered on the first preceding Business Day.

 

5.4 Intermediate Products Nominations. Absent advance notification from MSCG to the contrary, MSCG agrees to purchase from PBF, and PBF agrees to sell to MSCG, the Intermediate Products produced in the Refinery and delivered into the Tanks during the Term of this Agreement. Absent advance notification from MSCG to the contrary, MSCG agrees to sell to PBF, and PBF agrees to purchase from MSCG, the Intermediate Products requirements of the Refinery and delivered out of the Tanks during the Term of this Agreement.

MSCG may intend to purchase Intermediate Products from the market for sale to PBF in order to meet PBF’s requirements in part, and in such case, MSCG shall deliver to PBF an Intermediates Nomination Notice specifying the volume, grade, price and other terms that will apply to the sale of such externally sourced Intermediate Products from MSCG to PBF. Absent notification from PBF to MSCG within one Business Day of receiving such Intermediates Nomination Notice, the Parties obligations for the sale from MSCG to PBF of the quantity of Product specified in the Nomination Notice and on the other terms specified therein shall be deemed binding.

MSCG may intend to sell Intermediate Products to the market after purchasing such Intermediate Products from PBF pursuant to MSCG’s offtake obligations hereunder, and in such case, MSCG shall deliver to PBF an Intermediates Nomination Notice specifying the volume, grade, price and other terms that will apply to the purchase of such Intermediate Products by MSCG from PBF. Absent notification from PBF to MSCG within one Business Day of receiving such Intermediates Nomination Notice, the Parties obligations for the sale from PBF to MSCG of the quantity of Product specified in the Nomination Notice and on the other terms specified therein shall be deemed binding.

Nothing in this Section 5.4 shall relieve MSCG from or diminish the obligations of MSCG to supply the Refinery’s requirements of Intermediate Products or purchase from PBF the Intermediate Products production of the Refinery as set forth above in this section and Section 4.

 

5.5

Coordination of the Parties. The Parties agree that each Monthly Delivery Schedule, Weekly Nomination and Intermediates Nomination Notice shall be prepared in coordination between the Parties. PBF agrees to make a good faith effort to (i) produce and sell to MSCG Products in the volumes set forth in each Monthly Delivery Schedule, Weekly Nomination and Intermediates Nomination Notice, and (ii) purchase from MSCG Intermediate Products in the volumes set forth

 

17


  in each Monthly Delivery Schedule and Intermediates Nomination Notice. PBF shall indemnify MSCG or TPSI or both for any costs, expenses or other losses that it incurs in respect of a Sale Contract as a result of PBF’s failure to make commercially reasonable efforts to deliver volumes of Products to MSCG in accordance with the Monthly Delivery Schedule and Weekly Nomination.

 

5.6 MSCG Weekly Supply Report. On the first Business Day of each calendar week, MSCG shall provide PBF with a report indicating the volumes and grades of Light Finished Products and Specialty Grades estimated to be sold by MSCG under Sale Contracts with Customers during the following week (the “MSCG Weekly Supply Report”). The MSCG Weekly Supply Report will include a non-binding estimate of the volumes of each grade of Light Finished Products and Specialty Grades to be delivered to the Refinery truck rack, to each of the Pipelines and for waterborne transportation by Barge. The actual volumes and grades of Light Finished Products and Specialty Grades to be withdrawn from the Tanks and delivered to the Refinery truck rack, the Pipelines or onto a Barge, as applicable, shall be based on instructions provided to PBF by MSCG pursuant to the terms of the Storage Agreement. The information in the MSCG Weekly Supply Report is being provided for the Parties’ informational and planning purposes only, MSCG is not acting as a financial advisor or fiduciary or in any similar capacity and MSCG is not giving PBF any assurance or guarantee as to the forward prices contained in the MSCG Weekly Supply Report.

 

5.7 Quarterly Forward Price Report. At least once per calendar month, MSCG shall provide PBF with a report of MSCG’s estimated forward prices for each grade of Product for the following three calendar months (the “Quarterly Forward Price Report”). The information provided in the Quarterly Forward Price Report is provided for the Parties’ planning purposes only. The information in the Quarterly Forward Price Report is being provided for the Parties’ informational and planning purposes only, MSCG is not acting as a financial advisor or fiduciary or in any similar capacity and MSCG is not giving PBF any assurance or guarantee as to the forward prices contained in the Quarterly Forward Price Report.

 

5.8 Other Reports. PBF shall provide MSCG with all daily tank gauging reports covering the Tanks, daily refinery production reports, weekly refinery production reports, monthly refinery production reports, any reports it receives from Pipelines, and, if reasonably requested by MSCG, any other information related to the transactions covered by this Agreement.

 

5.9 Daily Report of Delivered Volumes. On or prior to 11:00 a.m. EPT on each Business Day, PBF shall deliver to MSCG (for receipt on or prior to 11:00 a.m. EPT) a report setting forth the actual volumes of each grade of Product (the “Delivered Volumes”) delivered into and delivered out of each Tank on the immediately prior days and total MSCG Inventory levels in each Tank, in each case based on the best available information, including daily tank gauging reports and other relevant Refinery measurements (the “Daily Report of Delivered Volumes”). In addition, (i) the Daily Report of Delivered Volumes delivered on each Friday will include PBF’s good faith estimate of the volumes for each grade of Light Finished Product and Specialty Grades that will be delivered to MSCG into Tanks on such Friday and (ii) the Daily Report of Delivered Volumes delivered on each Provisional Payment Day in respect of a Delivery Date occurring on or after such Provisional Payment Day as specified in Schedule 5 shall include PBF’s good faith estimate of the volumes for each grade of Light Finished Product and Specialty Grades that will be delivered to MSCG into Tanks on such Delivery Date(s). The Delivered Volumes shall be subject to subsequent adjustment as required as part of the Monthly True-Up Payment as may be necessary to reflect any additional or more accurate measurement information.

 

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5.10 Environmental Reports. PBF shall provide MSCG with notification of PBF’s reporting to EPA pursuant to 40 C.F.R. Parts 79 and 80, and the regulations promulgated thereunder, copies of attest audit reports submitted to EPA pursuant to 40 C.F.R. Part 80, and the regulations promulgated thereunder, and a summary each quarter of PBF’s RIN inventory and each estimated RVO calculated under 40 C.F.R. § 80.1407(a).

 

6. MSCG SALES

 

6.1 MSCG Sales. PBF agrees to cooperate with MSCG to facilitate the sale by MSCG to MSCG’s Customers of Light Finished Products and Slurry under the terms of Sale Contracts entered into between MSCG and Customers from time to time.

 

6.2 Sales at Refinery Rack. PBF agrees and acknowledges that MSCG may sell Light Finished Products to TPSI in order to effect sales of Products to Customers at the Refinery truck loading rack and that therefore all sales of Products to Customers at the rack may be sold first by MSCG to TPSI, and then sold by TPSI to the Customer as the Products delivered into the Customer’s truck at the rack. Sales by MSCG to TPSI shall not affect the amounts owed to PBF by MSCG.

 

  6.2.1 PBF shall cooperate and communicate with TPSI, as appropriate, in scheduling transfers, pursuant to the terms of the Storage Agreement, of Finished Light Products from the Tanks to the Refinery truck rack.

 

6.3 Slurry Sale Contracts. Notwithstanding anything that may be inferred to the contrary or as inconsistent with the credit provisions of Section 12, PBF shall indemnify MSCG for all costs and expenses which may be incurred as a result of a payment default by any Customer under a Sale Contract for delivery of Slurry (the contract governing any such sale, a “Covered Sale Contract”), any such costs and expense to be reimbursed by PBF to MSCG as part of the Monthly True-Up Payment.

 

  6.3.1 If MSCG becomes aware of any non-payment breach under a Covered Sale Contract or any proceeding, action or claim which may be instituted, taken or made by MSCG (other than an insurance claim) against a Customer in relation to a Covered Sale Contract (“Third Party Action”), MSCG shall as soon as reasonably practicable give written notice thereof to PBF providing, in reasonable detail, such available information as may enable PBF to assess the merits of such Third Party Action.

 

  6.3.2 MSCG shall not institute, take, make, conduct or otherwise deal with any Third Party Action without coordinating with PBF.

 

6.4 Premcor Product In-haul. Upon the occurrence of an Outage and a resulting shortage of Product for delivery to PBF under Schedule 12, PBF covenants and agrees to consult with MSCG in connection with MSCG’s in-haul of Products to avoid in-hauling by Premcor under the terms of the New Premcor Agreement, or, if MSCG elects not to in-haul Products, negotiate in good faith with MSCG and Premcor arrangements under which MSCG would purchase Products that Premcor in-hauls pursuant to Premcor’s right to in-haul Products under the New Premcor Agreement prior to delivery of such Products into Tanks.

 

6.5 Renewable Identification Numbers (RINs).

 

  6.5.1

Acknowledgment of Ethanol Blending. The Parties acknowledge that MSCG shall own and from time to time deliver to the Refinery ethanol for blending with the appropriate

 

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  gasoline blendstocks for sale to TPSI and on-sale to Customers. MSCG shall sell to TPSI the gasoline blendstocks and the ethanol as separate components just prior to blending. TPSI shall be the producer of the ethanol and gasoline blendstock mixture for purposes of any applicable ethanol blender’s tax credit.

 

  6.5.2 Transfer of RINs by MSCG. For each gallon of ethanol provided by MSCG to TPSI for rack blending as described in Section 6.5.1, MSCG shall transfer to PBF one Gallon-RIN meeting the criteria specified below. For avoidance of doubt, MSCG shall not be obligated to transfer any RINs to PBF in connection with purchases of Finished Light Products from PBF for resale to Customers other than at the Refinery truck rack.

 

  6.5.2.1 All Gallon-RINs shall have a “D” code of “6”, pursuant to 40 C.F.R. § 80.1425(g).

 

  6.5.2.2 All Gallon-RINs shall have been generated in the calendar year that the ethanol is delivered to the Refinery; provided, that during the months of January and February MSCG at its sole option may transfer Gallon-RINs generated in the calendar year preceding the year that the ethanol is delivered to the Refinery.

 

  6.5.2.3 MSCG shall provide PBF with written notice on or before December 31 of each year setting forth an estimate of the vintage year for the RINs MSCG anticipates transferring to PBF in January and February of the following calendar year.

 

  6.5.3 Remedies in Respect of Invalid RINs. If a Party determines that any Gallon-RINs provided hereunder are invalid pursuant to 40 C.F.R. § 80.1431, then that Party shall notify the other Party in writing within one Business Day of such determination. Within ten Business Days of such written notice, MSCG shall provide to PBF one Gallon-RIN, of the same type and vintage specified in Section 6.5.2, for every Gallon-RIN determined to be invalid.

 

  6.5.4 No Other RINs Contemplated. The Parties acknowledge and agree that MSCG shall be responsible only for providing to PBF the RINs specified herein, notwithstanding the renewable volume obligations imposed on PBF as a refiner of gasoline or diesel fuel pursuant to 40 C.F.R. Part 80, Subpart M.

 

  6.5.5 Definitions Related to RINs. The terms “Renewable Identification Number” (“RINs”) and “Gallon-RIN” shall be defined pursuant to 40 C.F.R. § 80.1401.

 

  6.5.6 Ethanol RINs in the Laurel System. MSCG shall make commercially reasonable efforts to retain RINs attributable to ethanol that are associated with MSCG and/or TPSI sales of Products at truck racks on the pipeline system owned and operated by Laurel Pipe Line Company, L.P. or any of its Affiliates. To the extent MSCG retains such RINs, MSCG shall pass the value of such RINs, or the applicable portion thereof, back to PBF on terms that are economically neutral to MSCG.

 

  6.5.7

Biodiesel Credits. MSCG agrees to use commercially reasonable efforts to establish customer demand for distillates that contain biodiesel (e.g., B5), as to which the mixture or the biodiesel component qualifies for the Biodiesel Tax Credit. For this purpose, “Biodiesel Tax Credit” means any income tax credit or excise tax credit or refund available for the production of biodiesel, renewable diesel or alternative fuels or the

 

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  creation and sale of biodiesel, renewable diesel or alternative fuels mixtures provided under §§ 40A, 6426 or 6427 of the U.S. Internal Revenue Code of 1986, as amended, or any other applicable or successor provision.

 

7. CERTAIN REPRESENTATIONS

 

7.1 The Parties intend that:

 

  7.1.1 each purchase and sale of Product between them, whether or not further documented, shall constitute a “forward contract” under section 101(25) and a “swap agreement” under section 101(53B) of the Bankruptcy Code, protected by, inter alia, section 556 and section 560 of the Bankruptcy Code, and that it will be treated as such under and in all proceedings related to any bankruptcy, insolvency or similar law (regardless of the jurisdiction of application or competence of such law) or any regulation, ruling, order, directive or pronouncement made pursuant thereto; and

 

  7.1.2 this Agreement and each transaction between the Parties hereunder constitutes a “master netting agreement” under section 101(38A) of the Bankruptcy Code; and that the rights in Section 18 hereto include the rights referred to in section 561(a) of the Bankruptcy Code.

 

7.2 For purposes of Section 7.1, the Parties intend and agree that, in respect of a particular month during the Term, they shall be deemed to have entered into a forward contract, swap agreement and eligible financial contract for the sale of Products by PBF to MSCG and for the sale of Intermediate Products by MSCG to PBF, as applicable, upon MSCG’s receipt of the Monthly Delivery Schedule for such calendar month. The Monthly Delivery Schedule shall be deemed to be adjusted to reflect the Delivered Volumes delivered by PBF to MSCG into the Tanks, in the case of purchases of Product by MSCG, or withdrawn by PBF from the Tanks, in the case of purchases of Intermediate Products by PBF. For purposes of Section 7.1, PBF and TPSI intend and agree that, in respect of a particular month during the Term, they shall be deemed to have entered into a forward contract, swap agreement and eligible financial contract for the sale of Products by TPSI to PBF upon TPSI’s receipt of the nomination for such calendar month.

 

7.3 Single Agreement. This Agreement and all transactions hereunder form a single integrated agreement between the Parties. During the Term of this Agreement, all transactions between MSCG and PBF as reflected in each Monthly Delivery Schedule, Weekly Nomination and Intermediates Nomination Notice, and transactions between MSCG and TPSI, are entered into in reliance on the fact that all such transactions and reports, together with this Agreement, form a single agreement.

 

7.4 TPSI shall be considered a “Party” for purposes of this Section 7.

 

8. WARRANTIES

 

8.1 Warranties of Title. Each Party represents and warrants to the other Party, that, as of the date of delivery of Product sold hereunder, it has good and marketable title to the Product sold and delivered pursuant to this Agreement, free and clear of any Liens, and that it has full right and authority to transfer such title and effect delivery of such Product.

 

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8.2 Disclaimer of Warranties. EXCEPT FOR THE WARRANTY OF TITLE, THE PARTY SELLING PRODUCT HEREUNDER MAKES NO WARRANTY, CONDITION OR OTHER REPRESENTATION, WRITTEN OR ORAL, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS OR SUITABILITY OF THE PRODUCT FOR ANY PARTICULAR PURPOSE OR OTHERWISE.

 

9. PRICING OF NOMINATED VOLUMES; PREMIUMS; SALES INCENTIVE

 

9.1 Purchase Price for Delivered Volumes.

 

  9.1.1 Light Finished Products and Specialty Grade Provisional Pricing. With respect to the volume of Light Finished Products and Specialty Grades purchased by MSCG on a Delivery Date hereunder (for purposes of this Section 9.1, the “Relevant Delivery Date”), MSCG shall, on the Provisional Payment Day for such Relevant Delivery Date as specified in Schedule 5, pay to PBF the Provisional Price per gallon for each grade of Product delivered determined in accordance with Section II of Schedule 6 (the aggregate provisional amount payable in respect of the volumes of Light Finished Products and Specialty Grades delivered on such Relevant Delivery Date, the “Provisional Payment Amount”). To the extent the Provisional Payment Day for a Relevant Delivery Date occurs on or before such Relevant Delivery Date, the Provisional Payment Amount shall be based on the estimated volumes to be delivered on such Relevant Delivery Date as specified in the Daily Report of Delivered Volumes delivered on or prior to such Relevant Delivery Date; provided, however, if no estimated volumes are specified in the last Daily Report of Delivered Volumes received by MSCG, then the Provisional Payment Amount will be based on the actual volumes delivered on the last Delivery Date reflected in the most recently received Daily Report of Delivered Volumes. The Provisional Payment Amount shall be included on the Finished Products Invoice delivered on the Provisional Payment Day for such Relevant Delivery Date as specified in Schedule 5. PBF shall return the Provisional Payment Amount to MSCG on the day of the Final Payment Day in respect of the Relevant Delivery Date, and such amount payable from PBF to MSCG shall be included on the same invoice as the Final Payment Amount in respect of the Relevant Delivery Date.

 

  9.1.2 Light Finished Products and Specialty Grade Final Pricing. With respect to the volume of Light Finished Products and Specialty Grades purchased by MSCG on a Relevant Delivery Date hereunder, MSCG shall, on the Final Payment Day for such Relevant Delivery Date as specified in Schedule 5, pay to PBF the Final Price per gallon for each grade of Product delivered determined in accordance with Section III of Schedule 6, and, in the case of Specialty Grades, in the manner agreed upon between the Parties pursuant to Section 4.5.1 (the aggregate amount payable in respect of the volumes of Light Finished Products and Specialty Grades delivered on such Relevant Delivery Date, the “Final Payment Amount”). The Final Payment Amount in respect of each Relevant Delivery Date shall be included on the Finished Products Invoice delivered on the Final Payment Day for such Relevant Delivery Day as specified in Schedule 5.

 

  9.1.3

Intermediate Products and Slurry Pricing. The amount payable to MSCG in respect of the volumes of Intermediate Products purchased by PBF from MSCG on each Delivery Date (in the aggregate for such day, “PBF Purchase Payment Amount”), and the amount payable to PBF for the volumes of Intermediate Products and Slurry delivered by PBF to MSCG on each Delivery Date (in the aggregate for such day, “MSCG Purchase Payment Amount”), shall be determined on a per gallon basis for each gallon delivered

 

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  based on the Intermediate Products Price or Slurry Price, as applicable, determined in accordance with Schedule 7 or Schedule 8, as applicable, or, in the case of Intermediate Products that MSCG purchases from the market for sale to PBF or purchases from PBF for sale to the market, determined in accordance with the applicable Intermediates Nomination Notice governing such sale. The MSCG Purchase Payment Amount and the PBF Purchase Payment Amount in respect of each Delivery Date shall be payable on the third Business Day following each such Delivery Date and shall be included on the Net Payment Amount Invoice delivered on such third following Business Day.

 

9.2 Monthly Product Premiums.

 

  9.2.1 Location Premium. In addition to the purchase price payable in respect of Light Finished Products purchased by MSCG pursuant to Section 9.1, if a volume of Light Finished Product is delivered to a Customer through the Refinery truck rack or a Pipeline, an additional amount (the “Location Premium”) shall be payable by MSCG to PBF in respect of MSCG’s purchase of Light Finished Products from PBF to account for the additional net relative value of Product sold at the Refinery truck rack or delivered to a Customer through a Pipeline (compared to a waterborne sale). The Location Premiums shall be determined in accordance with Schedule 6.

MSCG shall prepare an estimate of the Location Premium (the “Provisional Location Premium”) attributable to sales to Customers that occurred during a 30-day period on the first Business Day following the end of such 30-day period. MSCG shall include the Provisional Location Premium on the first Net Payment Amount Invoice prepared after determination of such amount; provided that the first Provisional Location Premium (payable in respect of the first 30-day period after the Commencement Date) shall be payable on the Commencement Date, and no Provisional Location Premium shall be payable on the first Business Day following the end of the first 30-day period after the Commencement Date.

The Parties shall conduct a final accounting of the Location Premium in respect of sales to Customers that occurred during each 30-day period based on additional information available after the respective Provisional Location Premium is calculated (the “Final Location Premium”) within fifteen calendar days after the last day of each such 30-day period, and calculate the difference between the Provisional Location Premium paid and the Final Location Premium in respect of such 30-day period (the “Monthly Location Premium Adjustment”). Each Monthly Location Premium Adjustment shall be included on the first Net Payment Amount Invoice prepared after its determination, and shall be subject to adjustment on future Net Payment Amount Invoices based on additional information received after the initial calculation.

 

  9.2.2 Specialty Grade Premium. In addition to the purchase price payable in respect of Specialty Grades purchased by MSCG pursuant to Section 9.1, if a volume of a Specialty Grade is sold as agreed under Section 4.5.1, an additional amount (the “Specialty Grade Premium”) shall be payable by MSCG to PBF to account for the additional net relative value of Specialty Grades (relative to the Product specified in Schedule 1 that would otherwise have been produced). The Specialty Grade Premiums shall be determined in accordance with Schedule 6.

 

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MSCG shall prepare an estimate of the Specialty Grade Premium (the “Provisional Specialty Premium”) attributable to sales to Customers that occurred during a calendar week on the first Business Day of the following calendar week, such estimate to be based on the MSCG Weekly Supply Report covering such calendar week that was delivered pursuant to Section 5.5. MSCG shall include the Provisional Specialty Premium on the first Finished Products Invoice prepared after determination of such amount.

The Parties shall conduct a final accounting of the Specialty Grade Premiums in respect of sales to Customers that occurred during each calendar week ending in a particular calendar month based on additional information available after the relevant Provisional Specialty Premiums were calculated (with respect to each such week, the “Final Specialty Premium Amount”) within ten Business Days after the last day of such calendar month, and calculate the difference between the aggregate Provisional Specialty Premium paid in respect of each such week and the Final Specialty Premium for such week (aggregated over all relevant weeks, the “Monthly Specialty Premium Adjustment”). The Monthly Specialty Premium Adjustment shall be included on the first Finished Products Invoice prepared after determination of such Monthly Specialty Premium Adjustment.

 

  9.2.3 MSCG shall make reasonable commercial efforts to maximize the Location Premiums and Specialty Grade Premium, unless otherwise agreed between the Parties (such as when specific components of the Location Premium have been pre-agreed).

 

9.3 Quarterly Sales Incentive. On a quarterly basis, PBF shall pay MSCG a sales incentive to be determined in accordance with Schedule 6 (the “Sales Incentive”). MSCG shall include the Sales Incentive for sales to Customers that occur during a calendar quarter in the first Net Payment Amount Invoice prepared after the determination of such Sales Incentive, subject to adjustment in any future Net Payment Amount Invoice based on additional information received after the initial calculation. The sum of the quarterly Sales Incentive for any calendar year shall not exceed $***** million, with partial years prorated, provided that the first calendar year shall be deemed to commence on the Commencement Date and end on December 31, 2011 and the first calendar quarter shall be deemed to commence on the Commencement Date and end on the next following calendar quarter end. For example, *****.

 

9.4

Fixed Values of Premium Components. Prior to the start of each calendar month, the Parties shall negotiate in good faith and make reasonable commercial efforts to agree upon fixed values for each of the components included in the calculations of Base Barge Price and Location Premium described in Schedule 6. If the Parties fail to agree by the 25th day prior to the commencement of such calendar month on the fixed value for any component, the Location Premium for such following calendar month shall be calculated using the actual costs, volumes, fees, prices or amounts that applied in connection with each MSCG (or TPSI) sale instead of using a fixed component.

 

9.5 Payment and Netting.

 

  9.5.1 On each Invoice Day, MSCG shall net the following amounts:

 

  (i) the Final Payment Amount payable by MSCG to PBF on the Final Payment Day occurring on such Invoice Date;

 

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  (ii) the Provisional Payment Amount that MSCG paid to PBF on the Provisional Payment Day in respect of the same volumes of Light Finished Products and Specialty Grades that the Final Payment Amount in (i) of this Section 9.5.1 is in respect of, such amount to be payable by PBF;

 

  (iii) the Provisional Payment Amount payable by MSCG to PBF on the Provisional Payment Day occurring on such Invoice Date;

 

  (iv) any Specialty Grade Premium or Monthly Specialty Premium Adjustment to be included on such invoice pursuant to Section 9.2.2; and

 

  (v) any adjustments to the prices used to determine any previously invoiced Final Payment Amount based upon additional information obtained after such invoicing;

(the aggregate net amount payable, the “Net Finished Products Amount”).

MSCG shall notify PBF of the Net Finished Products Amount and the Party to whom payment is owed shall prepare and deliver to the other Party an invoice in respect of such net amount by 11:00 a.m. EPT on each Invoice Day (the “Finished Products Invoice” for such day). The Party obligated to pay the Net Finished Products Amount shall pay such amount to the other Party on or prior to 3:00 p.m. EPT on such day, subject to Section 9.9.

Notwithstanding the above, so long as the Payment Direction Agreement is effective and performance under the Payment Direction Agreement has not been suspended pursuant to Section 18.4.6, payment of the Net Finished Products Amount shall be directed to SMT pursuant to the terms of the Payment Direction Agreement. Upon payment to SMT of the Net Finished Products Amount or any portion thereof, MSCG’s obligation to pay PBF hereunder shall be fully and finally discharged as if such amounts were paid to PBF directly, subject to any later adjustments based on additional information as described in this Section 9. PBF shall at all times remain liable for any Net Finished Products Amount payable from PBF to MSCG.

 

  9.5.2 On each Invoice Day, MSCG shall net the following amounts:

 

  (i) the MSCG Purchase Payment Amount payable by MSCG that is to be included on the Net Payment Amount Invoice for such day pursuant to Section 9.1.3;

 

  (ii) the PBF Purchase Payment Amount payable by PBF that is to be included on the Net Payment Amount Invoice for such day pursuant to Section 9.1.3;

 

  (iii) any Provisional Location Premium or Monthly Location Premium Adjustment that is to be included on the Net Payment Amount Invoice for such day pursuant to Section 9.2.1;

 

  (iv) any Sales Incentive or Monthly True-Up Payment that, in each case, is to be included on the Net Payment Amount Invoice for such day pursuant to Sections 9.3 or 9.6;

 

  (v) any outstanding interest that accrues pursuant to Section 9.10; and

 

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  (vi) any other amounts due and payable as of such day, or outstanding amounts payable prior to such day, under this Agreement (other than amounts payable under the Finished Products Invoice) or any other Transaction Document (the aggregate net amount payable, the “Net Payment Amount”).

MSCG shall notify PBF of the Net Payment Amount and the Party to whom the Net Payment Amount is payable shall prepare and deliver to the other Party an invoice in respect of such net amount by 11:00 a.m. EPT on each Invoice Day (the “Net Payment Amount Invoice” for such day). The Party owing the Net Payment Amount shall pay such amount to the other Party on or prior to 3:00 p.m. EPT on such day, subject to Section 9.9.

 

9.6 Monthly True-Up Payment. MSCG shall use commercially reasonable efforts to provide to PBF, within 20 calendar days after the end of a Delivery Month, a notification (the “Monthly True-Up Notice”) and appropriate supporting documentation for the net true-up amount due from one Party to the other Party (the “Monthly True-Up Payment”) showing the following:

 

  9.6.1 the Ancillary Costs for such Delivery Month or any adjustment to Ancillary Costs previously determined and invoiced;

 

  9.6.2 the Monthly Specialty Premium Adjustment for such Delivery Month;

 

  9.6.3 any adjustments to the prices or volumes used to determine the amount payable by one Party to the other in respect of previously invoiced purchases of Intermediate Product and Slurry hereunder based upon additional information obtained after such invoicing;

 

  9.6.4 any adjustments to the Location Premium, Specialty Grade Premium or Sales Incentive based upon additional information obtained after invoicing in respect of a calendar week or a calendar quarter, as applicable; and

 

  9.6.5 any other adjustments to amounts payable by one Party to the other Party hereunder.

 

9.7 Monthly True-Up Invoicing and Payment. The Monthly True-Up Payment shall be included on the Net Payment Amount Invoice delivered on the first Business Day following MSCG’s delivery to PBF of the Monthly True-Up Notice and all related supporting documentation. Notwithstanding the above, the Parties shall endeavor to pay the amounts described in Section 9.6 on an interim basis at such time as all final information in respect of the applicable amount has been obtained. Determinations of any true-up amount set forth in Section 9.6 on an interim basis shall be included in the first Net Payment Amount Invoice delivered following such determination.

 

9.8

Payments. All payments to be made under this Agreement shall be made by wire transfer of same day funds in U.S. Dollars to such bank account at such bank as the payee shall designate in writing to the payor from time to time. All payments shall be deemed received on the Business Day on which same day funds therefor are received by the payee. Payments received after any applicable time set forth in this Agreement on any Business Day or on a day that is not a Business Day shall be deemed to have been received on the following Business Day. Except as otherwise expressly provided in this Agreement, all payments by a Party shall be made in full without discount, offset, withholding, counterclaim or deduction whatsoever for any claims which one Party may now have or hereafter acquire against another Party, whether pursuant to the terms of

 

26


  this Agreement or otherwise except as expressly provided herein. The Parties recognize and acknowledge that the exchange of certain information in a timely manner and subsequent payments based on the information are interrelated, and a reasonable delay in one aspect of the process will not relieve the obligation of a Party to reasonably comply with any response to the information or payment. TPSI shall be considered a “Party” for purposes of this Section 9.8.

 

9.9 Disputed Invoices. If an invoiced Party, in good faith, disputes the accuracy of the amount invoiced, the invoiced Party shall pay such amount as it in good faith believes to be correct and provide written notice stating the reasons why the remaining disputed amount is incorrect, along with supporting documentation. In the event the Parties are unable to resolve such dispute, either Party may pursue any remedy available at law or in equity to enforce its rights hereunder. In the event that it is determined or agreed that the Party that is disputing an invoice must or will pay the disputed amount, then such Party shall pay interest from and including the original payment due date until, but excluding, the date the disputed amount is received by the owed Party, at the Base Interest Rate.

 

9.10 Interest on Late Payments. Interest shall accrue on late payments under this Agreement at the Default Interest Rate from and including the date that payment is due until but excluding the date that payment is actually received by the Party to whom it is payable or by TPSI, as applicable.

 

10. ADDITIONAL MSCG SERVICES

 

10.1 Additional MSCG Risk Management Services. Throughout the Term, MSCG shall provide risk management services to PBF as requested by PBF, including (i) updates on relevant commodities markets and price quotes for swaps and options, and (ii) providing swap or option products on the terms agreed upon between the Parties, such terms to include volumes, prices, tenors and settlement dates.

 

11. DISPOSITION OF PRODUCTS UPON TERMINATION OR EXPIRATION

 

11.1 Final Disposition. On the date of expiration or termination of this Agreement (the “Termination Date”), whether this Agreement terminates at the end of its Term or on an Early Termination Date, subject to MSCG’s rights under Section 18.6, PBF shall commence delivery of Products owned by MSCG at the Refinery from the Tanks to MSCG at the Refinery truck rack, to a Pipeline connection or to the Refinery’s dock for transportation on a Barge, in accordance with MSCG’s instructions and the terms of the Storage Agreement, such delivery to occur over the period of time necessary for MSCG to sell all such Products owned by MSCG as of the Termination Date to Customers under Sale Contracts (the “Run-off Period”).

 

11.2 Commingling. MSCG and PBF agree that DCRC will be permitted to utilize capacity in the Tanks to store its Products as such Products exit the Refinery processing units and the storage of Products in the Tanks will be commingled during the Run-off Period, as provided in the Storage Agreement.

 

11.3

Termination Payment Amount. On or prior to the later of (i) 30th day following the Termination Date and (ii) the tenth Business Day following the end of the Run-off Period, if any, or, upon an early termination where MSCG is the Performing Party, if MSCG elects to sell the Products to PBF pursuant to its rights under Section 18.6, on the 30th day following the Termination Date, MSCG shall calculate a final accounting and true up of all amounts owed by PBF to MSCG or by MSCG to PBF under the Agreement (including any Provisional Payment Amount that has not yet

 

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  been repaid to MSCG) and all other Transaction Documents, (such amount, excluding amounts that are payable to SMT in respect of Light Finished Products delivered to MSCG prior to the Termination Date pursuant to Section 9.5.1, the “Termination Payment Amount”). MSCG shall notify PBF of the Termination Payment Amount and the Party to whom such amount is payable shall prepare an invoice (the “Final Invoice”) and deliver it to the other Party by the fifth Business Day following MSCG’s calculation and notification of such amount. The Party owing the Termination Payment Amount shall make payment to the other Party of the Termination Payment Amount on or prior to the fifth Business Day following receipt of the Final Invoice. MSCG shall pay any amount outstanding that is payable to SMT in respect of Light Finished Products delivered to MSCG prior to the Termination Date pursuant to the terms of Section 9.5.1.

 

12. FINANCIAL INFORMATION, SECURITY AND REQUESTS FOR FURTHER ASSURANCES

 

12.1 Provision of Financial Information.

 

  12.1.1 Each Party shall provide the other Party, to the extent not publicly available, (i) within 120 days following the end of each of its fiscal years (or such earlier date on which it is required to file a Form 10-K under the Securities Exchange Act of 1934, as amended (“Exchange Act”)), beginning with the fiscal year ending December 31, 2010, a copy of its or, if applicable, its Guarantor’s audited consolidated financial statements for such fiscal year certified by independent certified public accountants; (ii) within 45 days after the end of its first three fiscal quarters of each fiscal year (or such earlier date on which it is required to file a Form 10-Q under the Exchange Act), a copy of its or, if applicable, its Guarantor’s quarterly unaudited consolidated financial statements for such fiscal quarter; and (iii) with respect to PBF, within 30 days after the end of each of the first two months of each fiscal quarter, beginning with May, 2011, the consolidated balance sheet of PBF as of the end of each such month and the related consolidated statements of income and cash flows of PBF for such month and for the then elapsed portion of the fiscal year, accompanied by a certificate of a Financial Officer stating that such financial statements fairly present, in all material respects, the consolidated results of operations and cash flows of PBF as of the date and for the periods specified in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes. In all cases the financial statements delivered pursuant to this Section 12.1.1 shall be for the most recent accounting period and prepared in accordance with generally accepted accounting principles in the United States, consistently applied, or, at the election of PBF, in accordance with the accounting principles provided by the International Financial Reporting Standards enacted by the International Accounting Standards Board. In the case of PBF, upon delivery to MSCG, the applicable report delivered by PBF to the Administrative Agent pursuant to the terms of the Revolving Credit Agreement shall satisfy its related requirement under this Section 12.1.1.

 

  12.1.2

Within 90 days after the beginning of each fiscal year, PBF shall provide to MSCG a budget for PBF in form reasonably satisfactory to MSCG, but to include balance sheets, statements of income and sources and uses of cash, for (i) each month of such fiscal year prepared in detail and (ii) each fiscal year thereafter, through and including the fiscal year in which the Termination Date is scheduled to occur at such time pursuant to the terms of Section 2, prepared in summary form, in each case, with appropriate presentation and discussion of the principal assumptions upon which such budgets are based, ac-companied by the statement of a Financial Officer of PBF to the effect that the budget of PBF is a reasonable estimate for the periods covered thereby and, promptly when

 

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  available, any significant revisions of such budget. In the case of PBF, upon delivery to MSCG, the applicable budget delivered by PBF to the Administrative Agent pursuant to the terms of the Revolving Credit Agreement shall satisfy its related requirement under this Section 12.1.2.

 

  12.1.3 Upon reasonable notice, a Party also shall provide to the other Party any other information sufficient to enable it to ascertain such other Party’s or such other Party’s Guarantor’s current financial condition and for such Party to assure itself of the other Party’s ability to perform its obligations under this Agreement or the other Party’s Guarantor’s ability to perform its obligations under its Guaranty.

 

12.2 Guaranty. As security for the prompt payment and performance in full when due of MSCG’s obligations under this Agreement, MSCG hereby represents and warrants that the Guaranty previously provided for with the Original Agreement is hereby reaffirmed and continues in effect for purposes of this Agreement in accordance with its terms from the Guarantor. As security for the prompt payment and performance in full when due of PBF’s obligations under this Agreement, PBF shall cause its Guarantor to deliver to MSCG and TPSI prior to the Effective Date a Guaranty in form and substance reasonably acceptable to MSCG. As security for the prompt payment and performance in full when due of DCRC’s obligations under this Agreement, DCRC shall cause its Guarantor to deliver to MSCG and TPSI prior to the Commencement Date a Guaranty in form and substance reasonably acceptable to MSCG.

 

12.3 Security Interest. In furtherance of the covenant set forth in Section 17.2.4, PBF hereby pledges to MSCG, as a secured party, as security for its obligations, and grants to MSCG a first priority continuing security interest in, Lien on and right of set-off against all Products purchased by MSCG under the terms of this Agreement.

 

12.4 Notification of Certain Events. Each Party shall notify the other Party in writing within two Business Days of learning of any of the following events:

 

  12.4.1 any Event of Default or Additional Termination Event, specifying the nature and extent thereof and the corrective action (if any) taken or proposed to be taken with respect thereto;

 

  12.4.2 in the case of DCRC, its binding agreement to sell, lease, sublease, transfer or otherwise dispose of, or grant any person (including an Affiliate) an option to acquire, in one transaction or a series of related transactions, all or a material portion of the Refinery assets;

 

  12.4.3 it or its Guarantor consolidates or amalgamates with, merges with or into, or transfers all or substantially all of its assets to, another entity (including an Affiliate);

 

  12.4.4 in the case of DCRC, any labor disturbances at the Refinery that could adversely impact the Monthly Delivery Schedule;

 

  12.4.5 in the case of PBF, any event that could reasonably be expected to have a Material Adverse Change on it or its Guarantor, which may include the filing or commencement of, or any threat or notice of intention of any person to file or commence, any action, suit, litigation or proceeding, whether at law or in equity by or before any Governmental Authority, against PBF or any Affiliate thereof, that could reasonably be expected to result in a Material Adverse Change;

 

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  12.4.6 a final judicial or administrative judgment against it or its Guarantor that individually or in the aggregate is in excess of $10,000,000;

 

  12.4.7 in the case of PBF, any default under any Credit Agreement, or any event which, with the giving of notice or lapse of time or both, would become an event of default under any Credit Agreement, including any notice of acceleration, demand, termination, suspension or foreclosure issued by any secured party or person acting in a similar capacity.

 

  12.4.8 In the case of PBF, PBF’s entrance into a binding agreement that would result in a Change of Control with respect to PBF, such notice to be provided no later than five Business Days following execution of such agreement. This Section 12.4.8 shall not apply to any future public offering of stock of PBF or any of its Affiliates.

 

12.5 Further Assurances.

 

  12.5.1 Each Party may, in its reasonable discretion and upon notice to the other Party, require that such other Party provide it with satisfactory security for or adequate assurance of its or, if applicable, its Guarantor’s performance within a specified time period as appropriate, when (i) such demanding Party determines that a Material Adverse Change has occurred as with respect to the other Party, or, if applicable, its Guarantor; (ii) such other Party fails to comply with any material provision of this Section 12 or breaches any covenant set forth in Section 17.4 in any material respect; (iii) in the case of MSCG, MSCG for any reason determines that its title and ownership interest in, and right of unencumbered access to, the Products purchased by it hereunder may be challenged or has been challenged by any person; or (iv) *****.

 

  12.5.2 A Party shall provide performance assurance to the other Party on or prior to the second Business Day following demand therefore in the form of cash or a letter of credit, or in any other document or mechanism acceptable to the demanding Party, provided that performance assurance in any form other than a letter of credit may only be provided by PBF to the extent permitted under the Revolving Credit Agreement and Term Loan Agreement or otherwise consented to by the lenders under such credit facilities. The performance assurance provided by a Party shall be for a duration and in an amount sufficient to cover a value up to the other Party’s estimated financial exposure under this Agreement, including reasonable contingencies for the designated time period. If performance assurance is provided in the form of a letter of credit, such letter of credit shall be issued by an Acceptable Letter of Credit Issuer and shall be in a form reasonably acceptable to the demanding Party in its sole discretion. All bank charges relating to any letter of credit and any fees, commissions, costs and expenses incurred with respect to furnishing security are for the account of the Party providing the performance assurance.

 

  12.5.3 Each Party agrees, at any time and from time to time upon the request of the other Party, to execute, deliver and acknowledge, or cause to execute, deliver and acknowledge, such further documents and instruments and do such other acts and things as such Party may reasonably request in order to fully effect the purposes of this Agreement.

 

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13. REFINERY TURNAROUND, MAINTENANCE AND CLOSURE

 

13.1 Scheduled Maintenance. DCRC shall provide to MSCG on the Commencement Date and on an annual basis thereafter, at least 30 days prior to the beginning of each year during the Term, its anticipated timing of scheduled maintenance or turnaround that may affect receipts of Product into the Tanks or the processing of Product in the Refinery during the upcoming year, including any notice DCRC receives concerning maintenance and servicing related to the Twin Oaks Pipeline, and shall update such schedule promptly following any change to the maintenance schedule.

 

13.2 Unscheduled Maintenance. DCRC immediately shall notify MSCG orally (followed by prompt written notice) of any previously unscheduled downtime, maintenance or turnaround and its expected duration, including downtime and maintenance it receives notice of related to the Twin Oaks Pipeline.

 

14. TAXES

 

14.1 Each Party represents that it is registered with the Internal Revenue Service, the Delaware Department of Transportation and the Delaware Division of Revenue to engage in tax-free transactions with respect to taxable fuels. Prior to the date of delivery of Product hereunder, each Party shall provide to the other Party proper notification, exemption or resale certificates or direct pay permits as may be required or permitted by Applicable Law. If a Party does not furnish such certificates to the other Party, or if the sale is subject to tax under Applicable Law because no exemption exists, the applicable Party shall reimburse and indemnify the other Party for all Taxes that the other Party remits to a taxing authority or that are incurred by that Party, together with all penalties and interest thereon, including but not limited to those Taxes set forth in Sections 14.2 and 14.3 below.

 

14.2 The Parties agree to the following in respect of any Taxes attributable to TPSI’s sales of Products to PBF:

 

  14.2.1 In the event that any Products, ethanol or any other blending components are sold by TPSI to PBF under this Agreement, then PBF agrees to reimburse TPSI for the amount of any Taxes that TPSI remits to a taxing authority or that are incurred by TPSI on such sales, but only if (i) TPSI notifies PBF in advance that it believes such Taxes may be incurred on a particular transaction, and (ii) PBF agrees such Taxes apply to the transaction, together with all penalties and interest thereon, if any.

 

  14.2.2 If TPSI notifies PBF in advance that it believes any Taxes may be due and PBF does not agree to reimburse TPSI (because PBF disagrees that any Taxes are owed, because the Parties agree that TPSI has a credible filing position not to pay Tax or for any other reason) and TPSI later receives notice of an audit, TPSI promptly shall notify PBF of the audit and allow PBF to reasonably cooperate in the audit. If, at the end of the audit and any appeals therefrom, it is determined that the Taxes that PBF originally would not reimburse TPSI are due and owing to the taxing authority, PBF promptly shall reimburse TPSI for such taxes, together with interest and any penalties. Any refunds of Taxes paid that were reimbursed by PBF pursuant to this Section 14.2 shall be paid to PBF.

 

  14.2.3 The reimbursement obligations set forth in this Section 14.2 shall survive expiration or termination of this Agreement until the date that is 90 days after the expiration of any statute of limitations applicable to the relevant Tax.

 

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14.3 Notwithstanding the foregoing Section 14.2, with respect to the Premcor Products sold by TPSI to PBF under Schedule 12, PBF agrees and acknowledges that it shall be the position holder that is responsible for reporting and payment, if any is required, of federal excise tax upon the removal and sale of Premcor Products at the Refinery truck rack to Premcor. PBF shall cause DCRC to reflect on its books and records that PBF is the position holder of the volumes of the Premcor Products to which PBF acquires title just in time prior to lifting at the Refinery truck rack by Premcor. Upon the title transfer of Premcor Products by TPSI to PBF, pursuant to IRS rules and regulations liability for the federal excise tax shall shift from TPSI to PBF (as the position holder).

 

14.4 TPSI shall be considered a “Party” for purposes of this Section 14.

 

15. INSURANCE

 

15.1 Insurance Required to be provided by MSCG. MSCG shall insure the Products under its cargo and casualty insurance policy.

 

15.2 Insurance Required to be provided by PBF. PBF, directly or through an Affiliate, shall procure and maintain in full force and effect throughout the Term insurance coverage of the following types and amounts and with insurance companies rated not less than A- by A.M. Best, or otherwise reasonably acceptable to MSCG, in respect of PBF’s receipt, handling and storage of Product under the Storage Agreement and this Agreement:

 

  15.2.1 Workers Compensation coverage in compliance with the Applicable Law;

 

  15.2.2 automobile liability coverage in a minimum amount of $1,000,000; and

 

  15.2.3 comprehensive or commercial general liability coverage and umbrella excess liability coverage, which includes bodily injury, broad form property damage and contractual liability coverages, in a minimum amount of $75,000,000, which includes losses for Product while in DCRC’s care, custody and control, and “sudden and accidental pollution” liability coverages (excluding events that result in acidic deposition).

 

15.3 Additional Insurance Requirements.

 

  15.3.1 Each Party shall cause its insurance carriers to furnish insurance certificates to the other Party, in a form reasonably satisfactory to the other Party, evidencing the existence of the coverages required pursuant to Sections 15.1 and 15.2. Each Party shall provide renewal certificates within 30 days of expiration of the previous policy under which coverage is maintained.

 

  15.3.2 Each Party shall include an endorsement in the foregoing policies indicating that the underwriters agree to waive all rights of subrogation to the extent of such Party’s obligations. Further, each Party shall name the other Party as an additional insured under the foregoing policies to the extent of the indemnities required under this Agreement.

 

  15.3.3 The mere purchase and existence of insurance coverage shall not reduce or release either Party from any Liabilities incurred or assumed under this Agreement.

 

  15.3.4 In the event of a Product loss for which a Party must indemnify the other Party under this Agreement or the Storage Agreement, the indemnifying Party’s insurance shall be the primary and exclusive coverage for such loss, notwithstanding the existence of other valid and collectible insurance.

 

16. FORCE MAJEURE

 

16.1

No Party shall be liable to any other Party if it is rendered unable by a Force Majeure Event to perform in whole or in part any obligation or condition of this Agreement for so long as the Force Majeure Event exists and to the extent that performance is hindered by the Force Majeure Event; provided, however, that the Party unable to perform shall use any commercially reasonable efforts

 

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  to avoid or remove the Force Majeure Event. During the period that performance by the affected party of a part or whole of its obligations has been suspended by reason of a Force Majeure Event, the other Parties likewise may suspend the performance of all or a part of its obligations to the extent that such suspension is commercially reasonable, other than any payment or indemnification obligations that arose prior to the Force Majeure Event.

 

16.2 The affected Party rendered unable to perform shall give written notice to the other Party within 24 hours after receiving notice of the occurrence of a Force Majeure Event, including, to the extent feasible, the details and the expected duration of the Force Majeure Event and the volume of Product affected. Such Party also shall promptly notify the other when the Force Majeure Event has terminated.

 

16.3 TPSI shall be considered a “Party” for purposes of this Section 16.

 

17. REPRESENTATIONS, WARRANTIES AND COVENANTS

 

17.1 Mutual Representations and Warranties. Each Party represents and warrants to the other Party as of the Effective Date, and shall be deemed to represent and warrant as of the date of any purchase of Product hereunder, that:

 

  17.1.1 it is (A) an “eligible commercial entity” and an “eligible contract participant” as defined in Sections 1a(11) and 1a(12) of the U.S. Commodity Exchange Act, as amended, and (B) a “forward contract merchant” under section 101(26) and a “master netting agreement participant” under section 101(38B), for purposes of the Bankruptcy Code;

 

  17.1.2 it is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing, has the power to execute and deliver this Agreement and any other related documentation that it is required by this Agreement to deliver and to perform its obligations under this Agreement, and has taken all necessary action to authorize such execution, delivery and performance;

 

  17.1.3 such execution, delivery and performance do not violate or conflict with any Applicable Law in any material respect, any provision of its constitutional documents, order or judgment of any court or Governmental Authority or, in any material respect, any of its assets or any contractual restriction binding on or affecting it or any of its assets;

 

  17.1.4 all governmental and other authorizations, approvals, consents, notices and filings that are required to have been obtained or submitted by it with respect to this Agreement (including any internal authorizations, approvals and consents required by such Party under its organizational documents) have been obtained or submitted and are in full force and effect, and all conditions of this Agreement have been obtained or submitted and are in full force and effect, and all conditions of any such authorizations, approvals, consents, notices and filings have been complied with, in all material respects;

 

  17.1.5 its obligations under this Agreement constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application regardless of whether enforcement is sought in a proceeding in equity or at law);

 

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  17.1.6 no Termination Event or Potential Event of Default has occurred and is continuing, and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement;

 

  17.1.7 there is not pending, nor to its knowledge threatened against it, any action, suit or proceeding at law or in equity or before any court, tribunal, Governmental Authority, official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or its ability to perform its obligations under this Agreement;

 

  17.1.8 it is not relying upon any representations of any other Party other than those expressly set forth in this Agreement;

 

  17.1.9 it has entered into the Transaction Documents and will enter into any transaction thereunder as principal (and not as advisor, agent, broker or in any other capacity, fiduciary or otherwise) and with a full understanding of the material terms and risks of the same, and has made its own independent decision to enter into the Transaction Documents and any transaction and as to whether the Transaction Documents and any transaction are appropriate or suitable for it based upon its own judgment and upon advice from such advisers as it has deemed necessary and not in reliance upon any view expressed by any other Party;

 

  17.1.10 it is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice) the Transaction Documents and any transaction, understands and accepts the terms, conditions and risks of the Transaction Documents and any transaction, and is capable of assuming, and assumes, the risks of the Transaction Documents and any transactions contemplated thereunder; and it is capable of assuming those risks;

 

  17.1.11 each other Party (i) is acting solely in the capacity of an arm’s-length contractual counterparty with respect to this Agreement, (ii) is not acting as a financial advisor or fiduciary or in any similar capacity with respect to this Agreement and (iii) has not given to it any assurance or guarantee as to the expected performance or result of this Agreement;

 

  17.1.12 it is not bound by any agreement that would preclude or hinder its execution, delivery, or performance of any of the Transaction Documents;

 

  17.1.13 neither it nor any of its Affiliates has been contacted by or negotiated with any finder, broker or other intermediary in connection with the sale of Product hereunder who is entitled to any compensation with respect thereto; and

 

  17.1.14 none of its directors, officers, employees or agents or those of its Affiliates has received or will receive any commission, fee, rebate, gift or entertainment of significant value in connection with any of the Transaction Documents.

 

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17.2 Mutual Covenants.

 

  17.2.1 Compliance with Applicable Laws. Each Party undertakes and covenants to each other Party that it shall comply in all material respects with all Applicable Laws, including all Environmental Laws, to which it may be subject in connection with the performance of any obligation or exercise of any rights under any of the Transaction Documents or in connection with any transaction contemplated by or undertaken pursuant to this Agreement.

 

  17.2.2 Books and Records. All records or documents provided by any Party to any other Party shall, to the best knowledge of such Party, accurately and completely reflect the facts or estimates about the activities and transactions to which they relate. Each Party shall promptly notify each other Party if at any time such Party has reason to believe that any records or documents previously provided to such other Party no longer are accurate or complete.

 

  17.2.3 Indemnity. In addition to any other remedies under this Agreement, a Party that fails to comply with the requirements of Section 17.2.1 or 17.2.2 shall indemnify the other Parties from and against any and all losses of whatever nature arising out of or connected with such non-compliance.

 

  17.2.4 Intent of the Parties. MSCG and PBF intend that each of the sales from PBF (as seller) to MSCG (as buyer) under this Agreement be treated as sales of Product by the seller to the buyer for all purposes. In the event that, contrary to the mutual intent of PBF and MSCG, any such sale is not characterized as a sale or absolute transfer, the seller shall be deemed to have granted (and the seller hereby does grant) to the purchaser a first priority security interest in and to any and all of its interest in the Products subject to such sale to secure the repayment of all amounts or other value advanced to the seller hereunder with accrued interest thereon, and this Agreement shall be deemed to be a security agreement.

 

17.3 Additional PBF Representations and Warranties. PBF represents and warrants to MSCG as of the Effective Date, and shall be deemed to represent and warrant as of the date of any purchase of Product hereunder, that:

 

  17.3.1 In the case of any action, inaction, consent, approval or other conduct that falls within the definition of “Bankrupt” with respect to PBF, PBF intends that MSCG’s rights and entitlements to the following shall not be stayed, avoided or otherwise limited by the Bankruptcy Code, and PBF shall not oppose the exercise of MSCG’s rights and entitlements to do any of the following: (i) to accelerate, close-out, liquidate, collect, net and set off rights and obligations under any of the Transaction Documents, including the rights set forth in Section 18, and (ii) require that PBF process any Intermediate Products owned by MSCG at the Refinery upon early termination of this Agreement.

 

  17.3.2 It acknowledges that MSCG will own all Product that it purchases pursuant to this Agreement until transfer of title to a Customer, or, in the case of Intermediate Products that are sold to PBF, transfer of title to PBF, will own all receivables and proceeds generated from the foregoing and has the right to sell, encumber and pledge such Products.

 

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17.4 Additional PBF Covenants.

 

  17.4.1 PBF agrees that it shall have no interest in or the right to dispose of, and shall not permit the creation of, or suffer to exist, any Lien with respect to, any portion of the Product owned by MSCG.

 

  17.4.2 PBF agrees that, except as set forth in Schedule 12, during the Term hereof, it shall not enter into any additional Products offtake arrangement relating to the Refinery other than this Agreement (and, for the avoidance of doubt, other than with respect to products not purchased by MSCG hereunder).

 

  17.4.3 PBF agrees, from time to time on MSCG’s request, to execute, deliver and acknowledge, or to cause any party to any Credit Agreement to execute, deliver and acknowledge, such further documents and instruments and to take such other actions as MSCG may reasonably request in order to more fully effect the purposes of the transactions contemplated by and the provisions of this Agreement.

 

  17.4.4 PBF agrees that, during the Term hereof, any binding agreement entered into by it that would result in a Change of Control with respect to PBF will provide for a period no shorter than 60 days from the date of execution of such binding agreement to the date upon which the Change of Control becomes effective.

 

17.5 TPSI shall be considered a “Party” for purposes of this Section 17.

 

18. TERMINATION EVENTS, DEFAULT AND EARLY TERMINATION

 

18.1 Non-fault Based Early Termination Events.

 

  18.1.1 Change of Law.

Each Party shall make reasonable efforts to monitor proposed Changes of Law which may reasonably be expected to have an impact on such Party’s performance of its obligations under the Transaction Documents or its ability to hedge in a commercially reasonable manner trading positions related to (i) purchases and sales under this Agreement or in contemplation of fulfilling the objectives of this Agreement or (ii) the MSCG Inventory (“Hedging Activities”) and shall promptly notify the other Party upon becoming aware of any such proposed Change of Law. Such notice shall identify the proposed Change of Law and set out, in reasonable detail, the effects the notifying Party anticipates such Change of Law would have upon the Transaction Documents (or such Party’s performance thereunder) or its Hedging Activities if enacted. The Parties shall in good faith meet to discuss what, if any, measures can be taken by either Party (or both) to minimize and/or mitigate the effect of any such proposed Change of Law.

If a Change of Law results or would result in a Party (the “Adversely Affected Party”) incurring incremental damages, losses, costs, expenses, fees, fines, payments, Taxes, liabilities, penalties or other sanctions of a monetary nature (“Losses”) in excess of $3,000,000 per annum solely as a result of such Party’s performance of its obligations under the Transaction Documents or as a result of its Hedging Activities, the Adversely Affected Party shall be entitled to request that the Parties meet for purposes of addressing such Change of Law by providing written notice (a “Change of Law Notice”) to the

 

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other Party (the “Non-Affected Party”), provided always that the Adversely Affected Party shall use all reasonable efforts to minimize the effects of such Change of Law and/or to mitigate the incremental Losses incurred by such Adversely Affected Party as a result of such Change of Law.

Within seven days of receipt of a Change of Law Notice, the Parties shall meet in good faith with a view to identifying any steps the (“Consequential Steps”) that would alleviate the effects of the relevant Change of Law on the Adversely Affected Party, which may include an agreement between the Parties to share the relevant incremental Losses incurred by the Adversely Affected Party or the amendment of any Transaction Document. In identifying the Consequential Steps, the Parties shall, as far as is reasonably practicable, do so in a manner that preserves the balance of the commercial agreement (including economic benefits, risk allocation, costs and liabilities) existing between the Parties under this Agreement as of the Effective Date.

In the event the Parties cannot reach agreement on the Consequential Steps and on the implementation of the same within 30 days of receipt by the Non-Affected Party of the Change of Law Notice, the Adversely Affected Party may terminate this Agreement, effective as of the earlier of (i) the effective date of the Change of Law and (ii) six months following receipt by the Non-Affected Party of the Change of Law Notice, in accordance with Section 11, and terminate all other Transaction Documents and all other agreements that may then be outstanding between the Parties that relate specifically to this Agreement, each in accordance with its terms.

 

  18.1.2 Change of Control. Upon the occurrence of a Change of Control with respect to PBF, MSCG may, in its sole discretion, accelerate this Agreement and designate a Termination Date, which shall be no earlier than the effective date of such Change of Control event, on which to terminate this Agreement in accordance with Section 11, and terminate all other Transaction Documents and all other agreements that may then be outstanding between the Parties that relate specifically to this Agreement, each in accordance with its terms.

 

18.2 Events of Default. Notwithstanding any other provision of this Agreement, the occurrence of any of the following events or circumstances shall constitute a “Default” or an “Event of Default”:

 

  18.2.1 A Party fails to make payment when due under this Agreement within two Business Days following receipt of a demand for payment by the other Party or TPSI, if applicable.

 

  18.2.2 A Party fails to (i) provide financial information as required by Section 12.1, (ii) provide the other Party or TPSI with performance assurances as required by Section 12.5, or such performance assurance expires, terminates or no longer is in full force and effect, in each case within two Business Days following receipt of a demand therefor.

 

  18.2.3 A Party or TPSI breaches any representation, warranty made or repeated or deemed to have been made or repeated by it in any material respect when made or repeated or deemed to have been made or repeated under this Agreement, or any warranty or representation proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated under this Agreement; provided, however, that if such breach is curable, such breach is not cured to the reasonable satisfaction of the other Party or TPSI, as applicable, (in their sole discretion) within ten Business Days from the date that such Party or TPSI, as applicable, receives notice that corrective action is needed.

 

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  18.2.4 Other than a default more specifically described in this Section 18.2, a Party or TPSI fails to perform any obligation or breaches a covenant required under this Agreement, which, if capable of cure, is not cured to the reasonable satisfaction of the other Party or TPSI, as applicable, (in their sole discretion) within five Business Days from the date that such Party or TPSI, as applicable, receives written notice that corrective action is needed, provided that no grace period will apply to any failure by PBF to notify MSCG of a Change of Control in accordance with Section 12.4.8.

 

  18.2.5 There shall have occurred a default, event of default or other similar condition or event (however described) in respect of a Party under any Specified Agreement, which is not cured within the applicable time period, if any. Upon the occurrence of such event, the defaulting party under the Specified Agreement shall be deemed to be the Defaulting Party hereunder and the other Party shall be deemed to be the Performing Party.

 

  18.2.6 A Party, a Party’s Guarantor or any of a Party’s direct or indirect parent companies becomes or is Bankrupt.

 

  18.2.7 A Party’s Guarantor (i) fails to satisfy, perform or comply with any material obligation in accordance with its Guaranty if such failure continues after any applicable grace or notice period, (ii) breaches any representation, covenant or warranty or any representation proves to have been incorrect or misleading in any material respect under its Guaranty, which is not cured to MSCG’s reasonable satisfaction, in its sole discretion, within any applicable grace or notice period, or (iii) repudiates, disclaims, disaffirms or rejects, in whole or part, any obligation under its Guaranty, or challenges the validity of its Guaranty.

 

  18.2.8 Receipt of notice by the other Party of a consolidation, amalgamation, merger or transfer that would constitute a Credit Event Upon Merger or the occurrence of a Credit Event Upon Merger with respect to a Party.

 

  18.2.9 There shall have occurred either (i) a default, event of default or other similar condition or event (however described) in respect of PBF or any of its Affiliates under one or more agreements or instruments relating to Specified Indebtedness in an aggregate amount of not less than $10,000,000 that has resulted in such Specified Indebtedness becoming immediately due and payable under such agreements and instruments before it would have otherwise been due and payable, including any notice of acceleration, demand, termination, suspension or foreclosure issued by any secured party or person acting in a similar capacity or (ii) a default by PBF or any of its Affiliates (individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than $10,000,000 under such agreements or instruments (after giving effect to any applicable notice requirement or grace period).

 

  18.2.10 Any claim is asserted or Lien (other than a Lien granted by MSCG) is placed on any portion of the MSCG Inventory due to an act or omission of PBF or any of its creditors or such Lien or claim is imminent. Upon the occurrence of such event, PBF shall be deemed to be a Defaulting Party hereunder and MSCG shall be deemed to be the Performing Party.

 

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  18.2.11 Due to an act or omission of PBF or any of its creditors, MSCG’s first priority Lien in any Products shall cease to exist or shall lose its priority, or any action is taken to impair or negatively impact MSCG’s first priority Lien in any Products, including the assertion by any creditor that MSCG would not be entitled to an exclusive, first priority Lien in any of such Products, and, if it is reasonably likely that such event is capable of cure within three Business Days, such event shall not have been cured by the third Business Day following PBF’s receipt of notice that corrective action is needed. Upon the occurrence of such event, PBF shall be deemed to be a Defaulting Party hereunder and MSCG shall be deemed to be the Performing Party.

 

  18.2.12 There shall have occurred a default, event of default or other similar condition or event (however described) in respect of a Party under any Transaction Document.

 

  18.2.13 There shall have occurred a default under the Intercreditor Agreement in respect of any party thereto that is prejudicial to a Party’s rights hereunder, provided that where such default under the Intercreditor Agreement occurs with respect to a party other than the Parties hereto, PBF shall be deemed to be the Defaulting Party hereunder and MSCG shall be deemed to be the Performing Party.

 

  18.2.14 The occurrence of a Letter of Credit Default in relation to any letter of credit provided by a Party hereunder.

 

  18.2.15 There shall have occurred a default, event of default or other similar condition or event (howsoever described) in respect of a Party or a Party’s Affiliate under any Related Agreement or any future similar refinery supply or offtake agreement between a PBF Affiliate and MSCG and, in either case, such agreement is accelerated or there occurs a default (howsoever described) with respect to a Party or a Party’s Affiliate thereunder substantially similar to one of the defaults described in Sections 18.2.1 (if such default is in an amount in excess of $1,000,000), 18.2.2 (sub-clause (ii) only), 18.2.6, 18.2.7, 18.2.8 or 18.2.9; provided, however, that any default under this Section 18.2.15 will only give rise to termination of this Agreement if the applicable Related Agreement or other refinery supply or offtake agreement is also simultaneously terminated in accordance with its terms.

 

  18.2.16 There shall have occurred a default, event of default or other similar condition or event (however described) in respect of PBF under the Crude Oil/Feedstock Supply/Delivery and Services Agreement dated on or about April 7, 2011, between SMT and DCRC with respect to the Refinery, which is not cured within the applicable time period thereunder, if any, and that is prejudicial to, or would have a material adverse on, MSCG’s rights hereunder.

 

18.3 Additional Termination Events. Notwithstanding any other provision of this Agreement, the occurrence of any of the events or circumstances specified in Sections 18.3.1 through and including 18.3.3 shall constitute an “Additional Termination Event” and, in each instance, PBF shall be deemed to be the “Affected Party” and MSCG and TPSI shall be deemed to be the Performing Parties (as defined in Section 18.4) for purposes of determining the rights and remedies available to the Performing Party under Sections 18.4 and 18.6.

 

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  18.3.1 The sale, lease, sublease, transfer, conveyance or other disposition, in one transaction or a series of related transactions, of all or a material portion of the Refinery assets other than to an Affiliate.

 

  18.3.2 Either (i) operations at the Refinery shall have ceased (other than as a result of a Force Majeure Event) for a period of at least 60 consecutive days; (ii) there occurs an inability to receive Product into, deliver Products out of or store Products in the Tanks (other than as a result of a Force Majeure Event), in any material respect for a period of at least 60 consecutive days; (iii) there occurs an inability to receive Products into or deliver Products out of the Refinery in any material respect due to the inoperability of the Twin Oaks Pipeline for a period of at least 60 consecutive days; or (iv) the Commercial Operations Date has not occurred within 120 days of execution of the Agreement, and such condition has a material adverse effect on MSCG.

 

  18.3.3 A Force Majeure Event affecting the Refinery, the Twin Oaks Pipeline or a Pipeline has occurred and is continuing for a period of at least 60 consecutive days.

 

18.4 Remedies Generally. Notwithstanding any other provision of this Agreement, any Guaranty or any Specified Agreement, upon the occurrence and continuance of an Event of Default with respect to a Party or such Party’s Guarantor (such Parties referred to as the “Defaulting Parties”), or upon the occurrence and continuance of an Additional Termination Event with respect to the Affected Parties, the other Parties (in each case, the “Performing Parties”) may in their sole discretion, in addition to all other remedies available to them and without incurring any Liabilities (for any costs arising from delay or otherwise) to the Affected Parties or the Defaulting Parties, as the case may be, do any or all of the following:

 

  18.4.1 suspend its performance under this Agreement, including any Product sale, purchase, receipt, delivery or payment obligations, upon written notice to the Defaulting Parties or Affected Parties;

 

  18.4.2 declare all or any portion of the Defaulting Parties’ or Affected Parties’, as applicable, obligations under this Agreement to be forthwith due and payable, all without presentment, demand, protest or further notice of any kind, all of which are expressly waived by the Defaulting Parties or Affected Parties, as applicable;

 

  18.4.3 upon written notice to the Defaulting Parties or the Affected Parties, specify a date (the “Early Termination Date”) on which to terminate this Agreement in accordance with Section 11, subject to MSCG’s rights under Section 18.6 if MSCG is a Performing Party;

 

  18.4.4 terminate all other Transaction Documents and all other agreements that may then be outstanding between the Parties that relate specifically to this Agreement;

 

  18.4.5 close out any Specified Agreements pursuant to Section 18.8;

 

  18.4.6 suspend performance under or terminate the Payment Direction Agreement upon notification to SMT in accordance with the terms of the Payment Direction Agreement, provided that MSCG shall be obligated to make all payments to SMT in respect of all Light Finished Products delivered to MSCG prior to SMT’s receipt of such notice;

 

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  18.4.7 determine the Termination Amounts due the Performing Parties upon early termination as provided in Section 18.9; and

 

  18.4.8 exercise any rights and remedies provided or available to the Performing Parties under this Agreement or at law or equity;

provided that, for the avoidance of doubt, (i) if PBFH or DCRC is the Defaulting Party, both PBFH and DCRC shall be deemed to be Defaulting Parties, (ii) if PBFH or DCRC is the Affected Party, both PBFH and DCRC shall be deemed to be Affected Parties, and (iii) if MSCG or TPSI is the Defaulting Party, both MSCG and TPSI shall be deemed to be Defaulting Parties.

TPSI shall be deemed to be a “Party” for the purposes of this Section 8.4.

 

18.5 Early Termination Fee. TPSI shall have no liability under this Section 18.5 and shall not be deemed to be a Defaulting Party, Affected Party or Performing Party for purposes hereof.

 

  18.5.1 In the event that this Agreement is terminated by MSCG pursuant to its rights under Section 18.1.2, PBF shall pay to MSCG an Early Termination Fee in an amount equal to (i) if such termination occurs before the first anniversary of the Commencement Date, $*****, or (ii) if such termination occurs after the first anniversary of the Commencement Date, $*****.

 

  18.5.2 In the event that this Agreement is terminated by a Performing Party pursuant to its rights under Section 18.4.3 as a result of an Event of Default, the Defaulting Party shall pay to the Performing Party an Early Termination Fee in an amount equal to (i) if the Event of Default occurs before the first anniversary of the Commencement Date, $***** or (ii) if the Event of Default occurs after the first anniversary of the Commencement Date, $*****.

 

  18.5.3 In the event that this Agreement is terminated by a Performing Party pursuant to its rights under Section 18.4.3 as a result of an Additional Termination Event, the Affected Party shall pay to the Performing Party an Early Termination Fee in an amount equal to $*****.

 

  18.5.4 The Parties agree that the Early Termination Fee payable from one Party to the other Party pursuant to Section 18.5.1 represents a genuine pre-estimate of the loss that MSCG will suffer as a result of the termination of this Agreement in the circumstances described in Section 18.5.1 and is payable in lieu of MSCG’s rights to claim damages resulting from such termination.

 

  18.5.5 The Parties agree that the Early Termination Fee payable from the Defaulting Party or the Affected Party, as applicable, to the Performing Party pursuant to Section 18.5.2 or 18.5.3 represents a genuine pre-estimate of the minimum loss that the Performing Party will suffer as a result of the termination of this Agreement in the circumstances described in Sections 18.5.2 or 18.5.3, and that the payment of the Early Termination Fee shall be in addition to the payment of any other amounts the Performing Party shall be entitled to in connection with termination pursuant to this Section 18.

 

  18.5.6

The Parties agree that the maximum total payment in respect of the Early Termination Fee hereunder together with the “Early Termination Fees” under the Related Agreements

 

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  shall be (i) $***** if termination of this Agreement and the Related Agreements occurs prior to the first anniversary of two or more such agreements; (ii) $***** if termination of this Agreement and the Related Agreements occurs after the first anniversary of all but one of such agreements or (iii) $***** if termination occurs at any other time.

 

18.6 Additional Remedies Available to MSCG if PBF is the Defaulting Party or Affected Party. If a Termination Event has occurred and is continuing and PBF is the Non-Performing Party, MSCG may, in its sole discretion: (i) demand that PBF purchase from MSCG all Product owned by MSCG at the Refinery on the pricing terms that would otherwise apply to a sale to MSCG of such Products under this Agreement, and (ii) arrange for the alternate disposition of any Intermediate Product owned by MSCG at the Refinery.

 

18.7 Additional Remedies Available to PBF if MSCG is the Defaulting Party. If PBF elects to terminate this Agreement as a result of a Termination Event for which MSCG is the Defaulting Party, (i) the Transitional Offtake Agreement shall become effective in accordance with its terms on the date this Agreement is terminated, unless PBF has notified MSCG that it does not require the Transitional Offtake Agreement to take effect, (ii) MSCG shall make commercially reasonable efforts to assign to PBF all of MSCG’s rights and obligations under its term Sale Contracts for sales to Customers at the Refinery truck rack, and (iii) during the term of the Transitional Offtake Agreement, MSCG shall, to the extent commercially reasonable, support, and shall take no actions intended to interfere with, PBF’s efforts to establish a customer base for the offtake of Products produced in the Refinery as MSCG transitions out of Refinery offtake. “Transitional Offtake Agreement” means for purposes hereof an agreement to be mutually agreed upon between the Parties after the Commencement Date that incorporates the terms of Schedule 10. For the avoidance of doubt, if the Transitional Offtake Agreement becomes effective, to the extent any terms of the Transitional Offtake Agreement conflict with the termination procedures hereunder, the Transitional Offtake Agreement shall control.

 

18.8 Export of Defaults to and Liquidation of Specified Agreements. The occurrence of an Early Termination Date shall constitute a material breach and an event of default, howsoever described, under all Specified Agreements, and the Performing Party may, by giving a notice to the Non-Performing Party, designate an early termination date (which shall be no earlier than the Early Termination Date) for all Specified Agreements and, upon such designation, terminate, liquidate, accelerate and otherwise close out all Specified Agreements that lawfully may be closed out and terminated or, to the extent that in the reasonable opinion of the Performing Party certain of such Specified Agreements may not be liquidated and terminated under Applicable Law on such date, as soon thereafter as is reasonably practicable. In such event, the Performing Party shall calculate the payments due upon early termination of such Specified Agreements in accordance with the terms set forth in such Specified Agreements, which shall be aggregated or netted to a single liquidated amount (the “Specified Agreement Close-Out Amount”) and paid pursuant to the terms of such agreements, or if no payment date is specified, on the payment date specified in Section 18.10. In determining the Specified Agreement Close-Out Amount, the Performing Party may foreclose upon and apply any collateral provided by or on behalf of the Non-Performing Party under this Agreement or any Specified Agreement. TPSI shall have no rights under this Section 18.8 and shall not be deemed to be a Performing Party or a Non-Performing Party for purposes hereof.

 

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18.9 Determination of the Termination Amounts in the Event of Early Termination.

 

18.9.1 MSCG Termination Amount. The amount payable in respect of early termination shall comprise (without duplication) all of the following amounts, which shall be aggregated or netted to a single liquidated amount (the “MSCG Termination Amount”) owing from one Party to the other Party:

 

  18.9.1.1 if MSCG requires PBF to purchase the MSCG inventory pursuant to Section 18.6, the purchase price of the MSCG Inventory located at the Refinery determined in accordance with Section 9.1 as of the date of termination;

 

  18.9.1.2 the Specified Agreement Close-Out Amount as determined pursuant to Section 18.8;

 

  18.9.1.3 the amount of any performance assurance, credit support or collateral provided by or on behalf of PBF under this Agreement or any Specified Agreement held by MSCG at the Early Termination Date, which shall be applied as a credit to PBF;

 

  18.9.1.4 Breakage Costs, including, for avoidance of doubt, the losses and costs (or gains) incurred (or realized) by the Performing Party, if MSCG, in terminating, transferring, or otherwise modifying any outstanding contracts with Customers;

 

  18.9.1.5 all Unpaid Amounts, including any purchase price for Product that has not yet been paid and any portion of the Provisional Payment Amount that has not been returned to MSCG;

 

  18.9.1.6 any other amounts or adjustments that are owed one Party by the other Party under this Agreement or any other Transaction Document; and

 

  18.9.1.7 the applicable Early Termination Fee, if any, as provided in Section 18.5.

In the event of any termination, notwithstanding any other provision of this Agreement, MSCG shall at all times be bound to make payment under the Payment Direction Agreement in accordance with its terms until performance under the Payment Direction Agreement is suspended pursuant to Section 18.4.6 and the terms thereof or the Payment Direction Agreement is terminated pursuant to the terms thereof.

 

18.9.2 TPSI Termination Amount. The amount payable between TPSI and PBF in respect of early termination shall comprise (without duplication) all of the following amounts, which shall be aggregated or netted to a single liquidated amount (the “TPSI Termination Amount”, and together with the MSCG Termination Amount, the “Termination Amounts”) owing from TPSI to PBF or from PBF to TPSI, as applicable:

 

  18.9.2.1 the difference between the contract price and the market price for any volumes nominated but not yet delivered pursuant to Schedule 12, if such amount is payable by the Defaulting Party;

 

  18.9.2.2 the amount of any performance assurance, credit support or collateral provided by on behalf of PBF under this Agreement held by TPSI at the Early Termination Date, which shall be applied as a credit to PBF;

 

  18.9.2.3 all Unpaid Amounts, including any purchase price for Product that has not yet been paid under Schedule 12;

 

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  18.9.2.4 any other amounts or adjustments that are owed by TPSI to PBF or by PBF to TPSI under this Agreement.

For the avoidance of doubt, no amounts included in the TPSI Termination Amount shall be duplicative of amounts included in the MSCG Termination Amount.

 

18.10 Payment of Termination Amounts. The Performing Parties shall notify each Non-Performing Party of the Termination Amounts due from or due each such Non-Performing Party. If a Non-Performing Party owes a Termination Amount to a Performing Party, the Non-Performing Party shall pay the Termination Amount on the second Business Day after it receives the statement. If a Performing Party owes a Termination Amount to a Non-Performing Party, the Performing Party shall pay the Termination Amount once it has reasonably determined all amounts owed by the Non-Performing Party to it under all Specified Agreements (if applicable) and pursuant to its rights of close-out and setoff under Section 18.11.

 

18.11 Setoff Rights of Performing Party. If a Performing Party elects to designate an Early Termination Date under Section 18.4.3, the Performing Party shall be entitled, at its option and in its discretion (and without prior notice to the Non-Performing Parties), to setoff against the applicable Termination Amount (whether such Termination Amount is payable to the Performing Party or to a Non-Performing Party) any other amounts payable under any agreements between such Non-Performing Party and such Performing Party (whether or not matured or contingent and irrespective of the currency, place of payment or place of booking of the obligation). To the extent that the applicable Termination Amount is so set off, the Termination Amount and other amounts will be discharged promptly and in all respects. The Performing Party will give notice to the other Party of any set-off effected under this Section 18.11.

For the avoidance of doubt, the MSCG Termination Amount may be setoff against the TPSI Termination Amount upon the mutual agreement of the Performing Parties.

Notwithstanding the above, MSCG shall at all times be bound to make payment under the Payment Direction Agreement in accordance with its terms until performance under such Payment Direction Agreement is suspended pursuant to Section 18.4.6 or otherwise terminated pursuant to the terms thereof.

 

18.12 Non-Exclusive Remedies. Each Performing Party’s rights under this Section 18 are in addition to, and not in limitation or exclusion of, any other rights of setoff, recoupment, combination of accounts, Lien or other right which it may have, whether by agreement, operation of law or otherwise. No delay or failure on the part of a Performing Party to exercise any right or remedy shall constitute an abandonment of such right or remedy and the Performing Party shall be entitled to exercise such right or remedy at any time after a Termination Event has occurred and is continuing.

 

18.13 Indemnification. Each Non-Performing Party shall reimburse the applicable Performing Party for its costs and expenses, including reasonable attorneys’ fees, incurred in connection with the enforcement of, suing for or collecting any amounts payable by the Non-Performing Party. Each Non-Performing Party shall indemnify and hold harmless each Performing Party for any damages, losses and expenses incurred by the Performing Party as a result of any Termination Event.

 

19. INDEMNIFICATION AND CLAIMS

 

19.1

To the fullest extent permitted by Applicable Law and except as specified otherwise elsewhere in this Agreement, PBF shall defend, indemnify and hold harmless MSCG, its Affiliates, and their

 

44


  Representatives, agents and contractors for and against any Liabilities caused by PBF or its Representatives, agents or contractors, in performing its obligations under this Agreement, except to the extent that such injury, disease, death, or damage to or loss of property was caused by the negligence or willful misconduct on the part of MSCG or TPSI, or their Representatives, agents or contractors.

 

19.2 To the fullest extent permitted by Applicable Law and except as specified otherwise elsewhere in this Agreement, MSCG shall defend, indemnify and hold harmless PBF, its Affiliates, and their Representatives, agents and contractors for and against any Liabilities caused by MSCG or its Representatives, agents or contractors in performing its obligations under this Agreement, except to the extent that such injury, disease, death, or damage to or loss of property was caused by the negligence or willful misconduct on the part of PBF or MSCG, or their Representatives, agents or contractors.

 

19.3 To the fullest extent permitted by Applicable Law and except as specified otherwise elsewhere in this Agreement, TPSI shall defend, indemnify and hold harmless PBF, its Affiliates, and their Representatives, agents and contractors for and against any Liabilities caused by TPSI or its Representatives, agents or contractors, in performing its obligations under this Agreement, except to the extent that such injury, disease, death, or damage to or loss of property was caused by the negligence or willful misconduct on the part of PBF or MSCG, or their Representatives, agents or contractors.

 

19.4 In addition to the indemnification obligations set forth in Sections 19.1 through 19.3 and elsewhere in this Agreement, each Party (referred to as the “Indemnifying Party”) shall indemnify and hold the other Parties (the “Indemnified Parties”), its Affiliates, and their Representatives, agents and contractors, harmless from and against any and all Liabilities directly or indirectly arising from (i) the Indemnifying Party’s breach of any of its obligations under or covenants made in this Agreement; (ii) the Indemnifying Party’s negligence or willful misconduct; (iii) the Indemnifying Party’s failure to comply with Applicable Law with respect to the sale, transportation, storage, handling or disposal of Product or violation of any Environmental Law caused by the Indemnifying Party or its Representatives, agents or contractors, unless such violation liability results from the Indemnified Party’s negligence or willful misconduct; or (iv) if any of the Indemnifying Party’s representations, covenants or warranties made herein proves to be materially incorrect or misleading when made. TPSI shall be deemed to be a “Party” for purposes of this Section 19.4.

 

19.5 To the fullest extent permitted by Applicable Law and to the extent not already covered under this Agreement, PBF shall defend, indemnify and hold harmless MSCG and TPSI from and against (i) any and all Liabilities incurred by MSCG and directly or indirectly resulting from Premcor’s negligent acts or omissions (except to the extent MSCG or TPSI has a direct cause of action against Premcor) or Premcor’s breach or default under the New Premcor Agreement and (ii) any incremental direct costs incurred by MSCG or TPSI incurred as a result of any Inhauling (as defined in the New Premcor Agreement). To the fullest extent permitted by Applicable Law and to the extent not already covered by this Agreement, MSCG shall defend, indemnify and hold harmless PBF from and against any and all Liabilities directly or indirectly arising from MSCG’s or TPSI’s negligent acts or omissions in connection with the in-haul of Products by Premcor.

 

19.6 The Parties’ obligations to defend, indemnify, and hold each other harmless under the terms of this Agreement shall not vest any rights in any third party (whether a Governmental Authority or private entity), nor shall they be considered an admission of liability or responsibility for any purposes other than those enumerated in this Agreement.

 

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19.7 Each Party agrees to notify the other Party as soon as practicable after receiving notice of any suit brought against it within the indemnities of this Agreement, shall furnish to the other the complete details within its knowledge and shall render all reasonable assistance requested by the other in the defense. Each Party shall have the right but not the duty to participate, at its own expense, with counsel of its own selection, in the defense and settlement thereof without relieving the other of any obligations hereunder. Notwithstanding the foregoing, an Indemnifying Party shall not be entitled to assume responsibility for and control of any judicial or administrative proceeding if such proceeding involves a Termination Event by the Indemnifying Party under this Agreement which shall have occurred and be continuing.

 

20. LIMITATION ON DAMAGES

 

20.1 Except for the Parties’ indemnification obligations set forth in this Agreement, or unless otherwise expressly provided in this Agreement, the Parties’ liability for damages is limited to direct, actual damages only and neither Party shall be liable for specific performance, lost profits or other business interruption damages, or special, consequential, incidental, punitive, exemplary or indirect damages, in tort, contract or otherwise, of any kind, arising out of or in any way connected with the performance, the suspension of performance, the failure to perform, or the termination of this Agreement. Each Party acknowledges the duty to mitigate damages hereunder.

 

20.2 TPSI shall be deemed to be a “Party” for purposes of this Section 20.

 

21. INFORMATION AND INSPECTION RIGHTS

 

21.1 Audit Rights. Upon request by either Party, the other Party shall provide the requesting Party with copies of all relevant documents and records in its possession that reasonably relate to compliance with EPA requirements described in Section 4.8 or to the calculation of any formula, invoice, statement or the amount of any payment under this Agreement, except for any documents or pricing information concerning any of MSCG’s proprietary activities that are in the custody or control of MSCG or any other person (whether or not related to this Agreement) or MSCG’s hedging activity or trading positions with any person that may have been utilized in connection with any Sale Contracts.

 

21.2 Right to Physical Inspection. From time to time during the Term, MSCG shall have the right, at its own cost and expense, to have an Independent Inspector conduct surveys and inspections of any of the Tanks or facilities at the Refinery that are used to handle, store or transfer the Product from the Refinery process units to the Tanks, and to observe any Product transfer, handling, metering, or related activities; provided that such surveys and inspections shall be made during normal working hours and upon reasonable notice and shall not disrupt the Refinery’s normal operations. Such surveys and inspections shall be in compliance with the Refinery’s prevailing rules and procedures, and the Party undertaking such survey or inspection shall be responsible for its own personnel and representatives. If any dispute between the Parties has not been resolved as of the Early Termination Date or Termination Date, as applicable, MSCG’s inspection rights under this Section 21.2 shall continue for a period that is the later of (i) the date on which all amounts due by one Party to the other Party as a result of termination or expiration of this Agreement are paid as provided in Section 18 and (ii) removal of or transfer of title to the Product owned by MSCG or its consignees or assignees from the Refinery.

 

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22. GOVERNANCE COMMITTEE

 

22.1 Approved Representatives. The Parties shall each appoint by written notice to the other Party two senior individuals representing them (the “Approved Representatives”) to be members of a governance committee (the “Governance Committee”) to administer, resolve and determine matters relating to the operation and administration of the Transaction Documents and to keep the Parties appraised of all material aspects of and developments relating to the Transaction Documents. Each Approved Representative must be currently employed by the appointing Party at all times. Either Party may replace one or both of the individuals serving as its Approved Representatives in its discretion from time to time upon written notice to the other Party.

 

22.2 Meetings of the Governance Committee. The quorum for decision making at a meeting of the Governance Committee shall be not less than one Approved Representative appointed by each Party. Meetings of the Governance Committee shall be held quarterly or as required to resolve any matter or dispute or if so requested by either of the Parties.

 

22.3 Decisions of the Governance Committee. If agreement is reached in writing, the Governance Committee shall have such written agreement reflected in a mutually acceptable amendment to this Agreement; provided that revisions to the schedules to this Agreement may be made upon the mutual agreement of the Authorized Representatives in writing (including by an exchange of e-mails or electronic messages) without a formal amendment. The Parties agree that the Governance Committee shall have due regard to the Parties’ goals and objectives that were the basis of entering into this Agreement when making any relevant decisions or making any agreement in respect of any matter referred to it under the Transaction Documents.

 

22.4 Third Party Referee. Without prejudice to any provision of this Agreement that sets out a specific time frame for consideration of a matter by the Governance Committee or for the Parties to have specific rights following the Governance Committee failing to agree on matters referred to it, in the event the Governance Committee cannot reach agreement within 30 Business Days on any matter before it, after consulting in good faith and using all reasonable efforts to reach agreement, such matter or dispute shall be referred to an independent third party for resolution. Such independent third party shall have an expertise in the subject matter and shall be mutually agreed upon by the Parties. Such firm’s determination shall be in the form of a written opinion, as is appropriate under the circumstances, to be delivered within 30 days of submission of the dispute to the firm or as soon thereafter as the firm can reasonably render its decision, and shall confirm that it was rendered in accordance with this Section 22, including that it was arrived at with due regard to the contract objectives. The fees and expenses of such firm for its services in resolving such dispute shall be borne equally by the Parties. With respect to any matters before the Governance Committee, the Parties agree that no Party shall take action under Section 23 until the procedures of this Section 22 have been completed provided, however, that any applicable statute of limitations shall be tolled during such period and either party may seek immediate injunctive relief if so required.

 

23. GOVERNING LAW AND DISPUTES

 

23.1

Governing Law. This Agreement and all matters arising in connection therewith, including validity and enforcement, shall be governed by, interpreted and construed in accordance with the

 

47


  laws of the State of New York, without giving effect to its conflicts of laws principles that would result in the application of a different law. Each Party hereby submits itself to the exclusive jurisdiction of any federal court of competent jurisdiction situated in the Borough of Manhattan, State of New York or, if any federal court declines to exercise or does not have jurisdiction, in any New York state court in the Borough of Manhattan, State of New York and to service of process by certified mail, delivered to the Party at its last designated address.

 

23.2 EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION TO THE JURISDICTION OF ANY SUCH COURT OR TO THE VENUE THEREIN OR ANY CLAIM OF INCONVENIENT FORUM OF SUCH COURT. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDINGS RELATING TO THIS AGREEMENT. EACH PARTY IRREVOCABLY AGREES TO DESIGNATE ANY PROCEEDING RELATING TO THIS AGREEMENT BROUGHT IN THE COURTS OF THE STATE OF NEW YORK ASCOMMERCIALON THE REQUEST FOR JUDICIAL INTERVENTION SEEKING ASSIGNMENT TO THE COMMERCIAL DIVISION OF THE SUPREME COURT OF THE STATE OF NEW YORK.

 

23.3 Availability of Remedies. The Parties acknowledge and agree that damages may not be an adequate remedy for a breach of the provisions of this Agreement. For this reason, among others, the Parties could be irreparably harmed if this Agreement is not deemed to be specifically enforceable or any other legal or equitable remedy or relief is deemed not to be available, and the Parties hereby agree that, but without prejudice to Section 18, this Agreement shall be specifically enforceable and that all other legal and equitable remedies and relief shall be available.

 

23.4 TPSI shall be deemed to be a “Party” for purposes of this Section 23.

 

24. ASSIGNMENT

 

24.1 This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

 

24.2 A Party may not assign or otherwise transfer any of its rights or obligations or subcontract or delegate in whole or in part the performance of any of its obligations under this Agreement to any person without the prior written consent of the other Parties, except as set forth in Section 24.3; provided that if a Party requests assignment or transfer of this Agreement to an Affiliate, consent shall not be unreasonably withheld. If written consent is given for any assignment, the assignor shall remain jointly and severally liable with the assignee for the full performance of the assignor’s obligations under this Agreement, unless the Parties otherwise agree in writing.

 

24.3 Either Party may assign its receivables under this Agreement to a third party without the consent of the other Parties.

 

24.4 Any prohibited assignment in violation of this Section 24 shall be null and void ab initio and the non-assigning Parties shall have the right, without prejudice to any other rights or remedies they may have hereunder or otherwise, to terminate this Agreement effective immediately upon notice to the Party attempting such assignment.

 

24.5 TPSI shall be deemed to be a “Party” for purposes of this Section 24.

 

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25. NOTICES

 

25.1 Notices in Writing. Any notice, demand or document that a Party is required or may desire to give hereunder, except to the extent specifically provided otherwise herein, must be (i) in writing and (ii) given by personal delivery, overnight courier, facsimile, or U.S. mail registered or certified mail, return receipt requested, with the postage prepaid and properly addressed or communicated to such Party at its address or facsimile number set forth in Section 25.2, or at such other address as either Party may have furnished to the other by notice given in accordance with this Section 25.1. Other than notices relating to a Potential Event of Default, a Termination Event, termination of this Agreement, indemnification, assignment and disputes, notice may also be given by electronic mail at such e-mail address as is typically used for such type of matter in the conduct of the recipient’s business. Any notice delivered or made by personal delivery, overnight courier, facsimile, or U.S. mail shall be deemed to be given on the date of actual delivery as shown by the receipt for personal delivery or overnight courier delivery, the addresser’s machine confirmation for facsimile delivery, or the registry or certification receipt for registered or certified mail.

 

25.2 Addresses.

If to DCRC or PBFH:

Delaware City Refining Company LLC

1 Sylvan Way, 2nd floor

Parsippany, NJ 07054-3887

Attention: Executive Vice President, Commercial

With a copy to:

Delaware City Refining Company LLC

1 Sylvan Way, 2nd floor

Parsippany, NJ 07054-3887

Attention: General Counsel

If to MSCG:

Morgan Stanley Capital Group Inc.

2000 Westchester Avenue, Floor 01

Purchase, New York 10577-2530

Attention: Randall O’Connor

Phone: 914-225-1466

Facsimile: 914-225-9298

E-mail: randall.o’connor@morganstanley.com

With a copy to:

Morgan Stanley Capital Group Inc.

2000 Westchester Avenue, Floor 01

Purchase, New York 10577-2530

Attention: Kenneth Carlino

Phone: 914-225-1417

 

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Facsimile: 914-225-9299

E-mail: kenneth.carlino@morganstanley.com

If to TPSI:

See Schedule 12

 

26. NATURE OF THE TRANSACTION AND RELATIONSHIP OF THE PARTIES

 

26.1 Neither this Agreement nor any other Transaction Document or transaction under any of them, nor the performance by the Parties of their respective obligations under this Agreement, any other Transaction Document or any transaction, shall constitute or create a joint venture, partnership or legal entity of any kind between the Parties. It is understood that each Party has complete charge of its employees and agents in the performance of its duties hereunder, and nothing herein shall be construed to make a Party, or any employee or agent of such Party, an agent or employee of another Party. No Party shall have any authority (unless expressly conferred in writing under this Agreement or otherwise and not revoked) to bind another Party as its agent or otherwise.

 

26.2 TPSI shall be deemed to be a “Party” for purposes of this Section 26.

 

27. CONFIDENTIALITY

 

27.1 This Agreement and all documents related to the foregoing and any information pertaining thereto made available by a Party or its Representatives to the other Parties or their Representatives, are confidential (collectively, “Confidential Information”). Each Party shall at a minimum use the same efforts and standard of care with respect to Confidential Information provided by another Party that it uses to preserve its own confidential information, and in no event less than reasonable efforts. Confidential Information shall not be discussed with or disclosed to any third party by any Party except for such information (i) as may become generally available to the public through no breach of this Section 27.1 or any other agreement between the Parties, (ii) as may be required or appropriate in response to any summons, subpoena or otherwise in connection with any litigation or to comply with any Applicable Law or accounting disclosure rule or standard or request by any supervisory or regulatory authority, (iii) as may be obtained from a non-confidential source that disclosed such information in a manner that did not violate its obligations to the other relevant Party or its credit support provider in making such disclosure, or (iv) as may be furnished to the disclosing Party’s Affiliates or to its Representatives, all of whom are required to keep the information that is disclosed in confidence. This provision shall remain in effect for two years following the termination of this Agreement.

 

27.2 In the case of disclosure covered by clause (ii) of Section 27.1, and if the disclosing Party’s counsel advises that it is permissible to do so, the disclosing Party shall notify the other relevant Party in writing of any proceeding of which it is aware which may result in disclosure, and use reasonable efforts to prevent or limit such disclosure. The Parties may exercise all remedies available at law or in equity to enforce or seek relief in connection with the confidentiality obligations contained in this Agreement.

 

27.3 TPSI shall be deemed to be a “Party” for purposes of this Section 27.

 

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28. MISCELLANEOUS

 

28.1 Joint Parties. (i) The obligations of PBFH and DCRC under this Agreement shall be the joint and several obligations of each such entity; (ii) any reference to “Party”, as applied to PBFH and DCRC, shall be construed as a joint and several reference to each such entity.

 

28.2 Survival. Termination or expiration of this Agreement shall not affect any rights or obligations that may have accrued prior to termination, including any in respect of antecedent breaches and, for the avoidance of doubt but subject to the terms of this Agreement, any rights or obligations under this Agreement or any of the other Transaction Documents in respect of transactions entered into up to and including the date of termination or expiration of this Agreement except as expressly provided herein. The obligations of each Party that expressly survive termination, are required to take effect on or give effect to termination or the consequences of termination or which by their very nature must survive termination, shall continue in full force and effect notwithstanding termination of this Agreement.

 

28.3 Entire Agreement; Amendments. This Agreement constitutes the entire agreement of the Parties regarding the matters contemplated herein or related thereto, and no representations or warranties shall be implied or provisions added hereto in the absence of a written agreement to such effect between the Parties after the Effective Date; provided, however, that nothing in this Agreement shall limit, impair or contravene the Parties’ or their Affiliates’ rights as set forth in any Specified Agreement (whether entered into prior to, on or after the Effective Date) regarding the collection and determination of margin and collateral, the exporting or importing of events of default, termination events, or the netting and setting off of amounts due. This Agreement may not be altered, amended, modified or otherwise changed in any respect except in writing duly executed by an authorized representative of each Party and no representations or warranties shall be implied or terms added in the absence of a writing signed by both Parties. No promise, representation or inducement has been made by either Party that is not embodied in this Agreement, and neither Party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

 

28.4 Severability. If at any time any court of competent jurisdiction declares any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under any Applicable Law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the Applicable Law of any other jurisdiction will, in any way, be affected or impaired. The Parties will negotiate in good faith with a view to reform this Agreement in order to give effect to the original intention of the Parties and produce as nearly as is practicable in all the circumstances the appropriate balance of the commercial interests of the Parties. The failure to agree upon such provisions for any reason or no reason shall not be considered a breach of this Agreement.

 

28.5 Waiver and Cumulative Remedies. No failure to exercise, nor any delay in exercising, any right, power or remedy under this Agreement or provided by Applicable Law shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies (provided by Applicable Law or otherwise). Any waiver of any breach of this Agreement shall not be deemed to be a waiver of any subsequent breach.

 

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28.6 Time Is of the Essence. Time shall be of the essence for this Agreement with respect to all aspects of each Party’s performance of its obligations under this Agreement.

 

28.7 No Third-Party Beneficiaries. There are no third party beneficiaries to this Agreement and the provisions of this Agreement shall not impart any legal or equitable right, remedy or claim enforceable by any person, firm or organization other than the Parties and their successors in interest and permitted assigns.

 

28.8 Announcements. At no time during the Term of this Agreement, and for a period of two years following its expiration or termination, shall any Party issue any press announcement or public statement regarding this Agreement without the prior written consent of the other Party, which shall not be unreasonably withheld, delayed or conditioned, except as may be required by Applicable Law or to the extent public disclosure is required under the circumstances described in any relevant confidentiality agreement entered into between the Parties. The issuing Party will:

 

  28.8.1 use all reasonable efforts to notify the other Party of the content of such announcement at least three Business Days prior to such issue (unless otherwise required by Applicable Law or to the extent public disclosure is required under the circumstances described in any relevant confidentiality agreement entered into by the Parties); and

 

  28.8.2 take the other Party’s comments on the proposed announcement into account as is reasonable in the circumstances, provided such comments are received within two Business Days of the notification.

 

28.9 Counterparts. This Agreement may be executed by the Parties in separate counterparts and all such counterparts shall together constitute one and the same instrument. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf the signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof.

 

28.10 TPSI shall be deemed to be a “Party” for purposes of this Section 28.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be executed by its duly authorized representative.

Executed by

 

MORGAN STANLEY CAPITAL GROUP INC.

/s/ Martin Mitchell

Name:  Martin Mitchell
Title:    Authorized Signatory
Date:
Executed by
TRANSMONTAIGNE PRODUCT SERVICES INC.

/s/ Brian Cannon

Name:  Brian Cannon
Title:    VP
Date:    7/31/12
Executed by
PBF HOLDING COMPANY LLC

/s/ Jeffrey Dill

Name:  Jeffrey Dill
Title:    Secretary
Date:    7/31/12
Executed by
DELAWARE CITY REFINING COMPANY LLC

/s/ Jeffrey Dill

Name:  Jeffrey Dill
Title:    Secretary
Date:    7/31/12

 

53


SCHEDULE 1 – PRODUCTS LIST

(subject to revision upon decision of the Governance Committee)

 

Generic Product Description

   Advisor Product Code

1. Light Finished Products

  

CBOB

   CBOB10.0UNL7.8

CBOB_SUP

   CBOB10.0PRE7.8

FINISHED HEATING

   HSFO2

FINISHED JET

   JET

PBOB

   RBOB10.0UNL7.8

RBOB

   RBOB10.0UNL13.5

ULTRA LOW SULFUR DIESEL

   ULSD

ULTRA LOW SULFUR KEROSENE

   ULSK

2. Intermediate Products

  

ALKYLATE

   ALKY

BLENDSTOCK GASOLINE

   GBLEND

CHD1 FEED

   CHDLGO

HEAVY REFORMATE

   HVYREF

HIGH SULFUR NO 2 OIL BLENDSTOCK

   HSDBLND

LIGHT CYCLE OIL

   LCO

LIGHT FCCU GASOLINE

   LCATG

LT. STRAIGHT RUN

   LSRG

NAPTHA 40

   NAP40-PURCH

NAPTHA COKER

   NAPCK

POLYMER GASOLINE

   PLG

RAW FCC NAPHTHA

   CATG

REFORMATE

   REFM

SLOP OIL

   SLOP

SOUR KEROSENE

   KERO-UNTRTD

STRAIGHT RUN NAPHTA

   NAPSTR

SWEET NAPHTHA

   NAPSWEET

3. Slurry

  

FCC SLURRY OIL

   CSO

 

54


SCHEDULE 2 – FORM OF QUARTERLY FORECAST

 

Quarterly Delivery Forecast    ALL DATES & VOLUME DATA ARE INCLUDED FOR ILLUSTRATIVE PURPOSES ONLY
Date of Report:    June 19, 2011   
Delivery Month 2:    July-11   
Delivery Month 3:    August-11   
Report Author:    DCRC   
Report Receiver:    MSCG   
Report Frequency:    Prior to the 20th of every month
Scheduled Maintenance:    [Insert dates/comments if any]

 

                  July-11      August-11        
      Generic Product         Production
Estimate
     Production
Estimate
       
Category    Description    Advisor Product Code    (M Bbls)      (M Bbls)      Notes/Comments

Light Finished Products

   CBOB    CBOBUNL12.9      *****         *****        

Light Finished Products

   CBOB_SUP    CBOBPRE12.9      *****         *****        

Light Finished Products

   PBOB    RBOB10.0UNL13.5      *****         *****        

Light Finished Products

   RBOB    RBOB10.0UNL13.5      *****         *****        

Light Finished Products

   FINISHED HEATING    HSFO2      *****         *****        

Light Finished Products

   FINISHED JET    JET      *****         *****        

Light Finished Products

   FINISHED LSD    LSD      *****         *****        

Light Finished Products

   HEATING OIL    HSFO2 UNDYED      *****         *****        

Light Finished Products

   MARINE DIESEL    MDO      *****         *****        

Light Finished Products

   Specialty Grade           *****         *****        

Light Finished Products

   Specialty Grade           *****         *****        

Total Light Finished Products

               *****         *****        

 

55


SCHEDULE 3 – FORM OF MONTHLY DELIVERY SCHEDULE

 

Monthly Delivery Schedule    ALL DATES & VOLUME DATA ARE INCLUDED FOR ILLUSTRATIVE
PURPOSES ONLY
Date of Report:    June 19, 2011   
Delivery Month:    July-11   
Report Author:    DCRC   
Report Receiver:    MSCG   
Report Frequency:    Prior to the 20th of every month
Scheduled Maintenance:    [Insert dates/comments if any]

 

Category   

Generic Product

Description

   Advisor Product Code    Production
Estimate
(M Bbls)
    

Consumption
Estimate

(M Bbls)

    

Net Production
Estimate

(M Bbls)

     Notes/Comments

Light Finished Products

   CBOB    CBOBUNL12.9      *****            *****        
Light Finished Products    CBOB_SUP    CBOBPRE12.9      *****            *****        
Light Finished Products    PBOB    RBOB10.0UNL13.5      *****            *****        
Light Finished Products    RBOB    RBOB10.0UNL13.5      *****            *****        
Light Finished Products    FINISHED HEATING    HSFO2      *****            *****        
Light Finished Products    FINISHED JET    JET      *****            *****        
Light Finished Products    FINISHED LSD    LSD      *****            *****        
Light Finished Products    HEATING OIL    HSFO2 UNDYED      *****            *****        
Light Finished Products    MARINE DIESEL    MDO      *****            *****        
Light Finished Products    Specialty Grade           *****            *****        
Light Finished Products    Specialty Grade           *****            *****        

Total Light Finished Products

          *****                  *****        
                               

Slurry

   FCC SLURRY OIL    CSO     
*****
  
    
*****
  
    
*****
  
    
                                           
Intermediate Products    LT. STRAIGHT RUN    LSRG      *****         *****         *****        
Intermediate Products    RAW FCC NAPHTHA    CATG      *****         *****         *****        
Intermediate Products    SOUR NAPHTHA    NAPLOW      *****         *****         *****        
Intermediate Products    SOUR NAPHTHA    NAP40      *****         *****         *****        
Intermediate Products    SWEET NAPTHA    NAPSWEET      *****         *****         *****        
Intermediate Products    ALKYLATE    ALKY      *****         *****         *****        
Intermediate Products    REFORMATE    REFM      *****         *****         *****        
Intermediate Products    CHD1 FEED    CHDLGO      *****         *****         *****        
Intermediate Products    SOUR ST RUN KERO    KERO      *****         *****         *****        

Intermediate Products

   Other           *****         *****         *****        

Total Intermediate Products

          *****         *****         *****        
                                           
                                           

Total All Products

          *****         *****         *****        

 

56


SCHEDULE 4 – FORM OF WEEKLY NOMINATION

 

RBOB   RBOB TANKS AT DELAWARE CITY REFINERY      
    TK NO.    1064      1066      2173      TOTAL CAP       
 

CAPACITY

     *****         *****         *****         *****      
 

SAFE FILL

     *****         *****         *****         *****      
 

TANK HEELS

     *****         *****         *****         *****      
 

WORKING CAPACITY

     *****         *****         *****         *****      

 

DATE   OPEN INV
BBLS
    PRODUCTION
BBLS
   

RACK

BBLS

  BATCH NUMBERS/
BARGE/VSL NAME
  BUCKEYE
BBLS
    LAUREL
BBLS
    WATERBORNE
BBLS
    ADJ
BBLS
  AVAILABLE
END INV
BBLS
    ACTUAL
REFINERY INV
W/HEELS
    AVAIL TK SPACE
BBLS
 

1-Jul-11

    *****        —       

*****

      *****              *****        *****        *****   

2-Jul-11

    *****        *****     

*****

 

*****

        *****          *****        *****        *****   

3-Jul-11

    *****        *****     

*****

              *****        *****        *****   

4-Jul-11

    *****        —       

*****

 

*****

    *****              *****        *****        *****   

5-Jul-11

    *****        *****     

*****

              *****        *****        *****   

6-Jul-11

    *****        —       

*****

              *****        *****        *****   

7-Jul-11

    *****        *****     

*****

              *****        *****        *****   

8-Jul-11

    *****        *****     

*****

 

*****

        *****          *****        *****        *****   

9-Jul-11

    *****        —       

*****

              *****        *****        *****   

10-Jul-11

    *****        *****     

*****

              *****        *****        *****   

11-Jul-11

    *****        —       

*****

              *****        *****        *****   

12-Jul-11

    *****        —       

*****

              *****        *****        *****   

13-Jul-11

    *****        *****     

*****

 

*****

      *****            *****        *****        *****   

14-Jul-11

    *****        *****     

*****

              *****        *****        *****   

15-Jul-11

    *****        —       

*****

              *****        *****        *****   

16-Jul-11

    *****        —       

*****

 

*****

    *****              *****        *****        *****   

 

 

17-Jul-11

    *****        *****     

*****

              *****        *****        *****   

18-Jul-11

    *****        —       

*****

              *****        *****        *****   
       

*****

             
       

*****

             

19-Jul-11

    *****        *****     

*****

 

*****

      *****            *****        *****        *****   

20-Jul-11

    *****        —       

*****

              *****        *****        *****   

21-Jul-11

    *****        —       

*****

              *****        *****        *****   

22-Jul-11

    *****        —       

*****

              *****        *****        *****   

23-Jul-11

    *****        *****     

*****

              *****        *****        *****   

24-Jul-11

    *****        —       

*****

              *****        *****        *****   

25-Jul-11

    *****        *****     

*****

              *****        *****        *****   

26-Jul-11

    *****        *****     

*****

              *****        *****        *****   
       

*****

             

27-Jul-11

    *****        *****     

*****

 

*****

    *****              *****        *****        *****   

28-Jul-11

    *****        *****     

*****

              *****        *****        *****   

29-Jul-11

    *****        *****     

*****

              *****        *****        *****   

30-Jul-11

    *****        *****     

*****

              *****        *****        *****   

31-Jul-11

    *****        *****     

*****

              *****        *****        *****   

1-Aug-11

    *****                      *****        *****        *****   

2-Aug-11

    *****                      *****        *****        *****   

3-Aug-11

    *****                      *****        *****        *****   

4-Aug-11

    *****                      *****        *****        *****   

5-Aug-11

    *****                      *****        *****        *****   

6-Aug-11

    *****                      *****        *****        *****   

7-Aug-11

    *****                      *****        *****        *****   

8-Aug-11

    *****                      *****        *****        *****   

9-Aug-11

    *****                      *****        *****        *****   

10-Aug-11

    *****                      *****        *****        *****   

11-Aug-11

    *****                      *****        *****        *****   

12-Aug-11

    *****                      *****        *****        *****   

13-Aug-11

    *****                      *****        *****        *****   

14-Aug-11

    *****                      *****        *****        *****   

15-Aug-11

    *****                      *****        *****        *****   

16-Aug-11

    *****                      *****        *****        *****   

17-Aug-11

    *****                      *****        *****        *****   

18-Aug-11

    *****                      *****        *****        *****   

19-Aug-11

    *****                      *****        *****        *****   

20-Aug-11

    *****                      *****        *****        *****   

21-Aug-11

    *****                      *****        *****        *****   

22-Aug-11

    *****                      *****        *****        *****   

23-Aug-11

    *****                      *****        *****        *****   

24-Aug-11

    *****                      *****        *****        *****   

25-Aug-11

    *****                      *****        *****        *****   

26-Aug-11

    *****                      *****        *****        *****   

27-Aug-11

    *****                      *****        *****        *****   

28-Aug-11

    *****                      *****        *****        *****   

29-Aug-11

    *****                      *****        *****        *****   

30-Aug-11

    *****                      *****        *****        *****   

31-Aug-11

    *****                      *****        *****        *****   

 

57


SCHEDULE 5 – PAYMENT DAYS FOR LIGHT FINISHED PRODUCTS

AND SPECIALTY GRADES

The applicable Provisional Payment Day and Final Payment Day for each Relevant Delivery Date occurring during a calendar week, subject to the Holiday Modifications below, is as follows:

TABLE 1: Payment Day Table

 

Relevant Delivery Date

 

Provisional Payment Day*

 

Final Payment Day**

Sunday

  Monday   Wednesday

Monday

  Tuesday   Thursday

Tuesday

  Wednesday   Friday

Wednesday

  Thursday   Monday of the following week

Thursday

  Friday   Tuesday of the following week

Friday

  Friday   Wednesday of the following week

Saturday

  Monday of the following week   Wednesday of the following week

 

* Holiday Modifications to Provisional Payment Day:

(1) If a Tuesday Wednesday or Thursday is a non-Business Day, then, unless (2) below applies, the Provisional Payment Day for the Relevant Delivery Date preceding such non-Business Day is the next following Business Day.

For example, if Thursday is a non-Business Day, then the Provisional Payment Day for Wednesday is Friday.

(2) If a Friday is a non-Business Day or if a Monday of the following week is a non-Business Day, then (i) the Provisional Payment Day for the Relevant Delivery Date falling on the first non-Business Day occurring at the end of the relevant week will be the day prior to such Relevant Delivery Date, and (ii) the Provisional Payment Day for the Relevant Delivery Date falling on the last Business Day of the relevant week will be such Relevant Delivery Date.

For example:

If Friday is not a Business Day for a particular week, then the Provisional Payment Day for Friday will be Thursday and the Provisional Payment Day for Thursday will be Thursday.

If the Monday in the week following a particular week is not a Business Day, then the Provisional Payment Day for Saturday of such week will be Friday.

 

** Holiday Modifications to Final Payment Day:

If any day after the Relevant Delivery Date up to and including the Final Payment Day specified in Table 1 above is not a Business Day, then the Final Payment Day shall be the third Business Day following the Relevant Delivery Date, if such third Business Day is different than the day specified in Table 1.

 

58


SCHEDULE 6 – LIGHT FINISHED PRODUCTS AND SPECIALTY GRADE PRICING

Intent and Structure of Pricing Arrangement

The intent of this Light Finished Products Pricing schedule is to provide a mechanism under which PBF will receive the proceeds that would be associated with “market priced” sales of Light Finished Product. “Market priced” means a price that reflects the value that would be obtained by two parties in negotiating an arms length transaction in the open market.

The Light Finished Product that MSCG purchases from PBF on a delivered-into-tank basis will subsequently be sold by MSCG under three modes of delivery: the Refinery truck rack (“Rack”), the Refinery dock (“Barge”), the pipelines that ship product from the Refinery to Linden, NJ, (“NYH Pipe”) and to Booth, PA (“PA Pipe”). The ***** modes of delivery will generally result in ***** than the ***** mode of delivery. This schedule is structured such that PBF will receive, on a daily basis, an initial minimum price that reflects the ***** (the “Base Barge Price”). PBF will subsequently receive additional proceeds (the “Location Premium”) that reflect the *****.

The Base Barge Price will be set at a level that reflects a market price (“*****”) for delivery to *****, less the ***** to the transaction between PBF and MSCG. The costs to execute such conversion between these two transaction bases include ***** and a time-value-of-money (“TVM”) adjustment at ***** basis points (“bps”). The TVM adjustment captures the economic impact of ***** compared to when a buyer would pay under the reference ***** barge transaction.

The Location Premium will be calculated based on the net revenue improvement between the three alternate modes of delivery ***** compared to the Base Barge Price. This net revenue improvement adjusts the higher ***** price by ***** associated with selling product via ***** relative to Barge. This includes ***** and TVM costs. In essence, the Location Premium compares the ***** of a ***** sale to the *****, with *****. This incremental netback value is ***** to arrive at the total Location Premium.

***** will receive a Sales Incentive from *****, that is a *****.

MSCG will also pay *****.

 

59


SECTION I: BASE BARGE PRICE

The Base Barge Price shall be calculated as follows:

Base Barge Price = *****, where:

 

A. ***** = *****.

 

B. ***** = *****:

 

  1. *****.

 

  2. ***** = *****.

SECTION II: PROVISIONAL PRICE

The Provisional Price payable by MSCG pursuant to Section 9.1 with respect to a Light Finished Product shall equal the ***** prices effective for the Delivery Date, or if the Delivery Date is not a Business Day or is the same as the Provisional Payment Day, effective for the Business Day prior to the Delivery Date.

The Provisional Price payable by MSCG pursuant to Section 9.1 with respect to a Specialty Grade shall equal the ***** to produce the Specialty Grade Product instead of the “Next Best Alternative Product” as mutually agreed between the Parties.

SECTION III: FINAL PRICE

The Final Price payable by MSCG pursuant to Section 9.1 with respect to a Product shall equal the ***** for the Business Day on which PBF delivers to MSCG the Daily Report of Delivered Volumes for such Product delivery pursuant to Section 5.9.

SECTION IV: LOCATION PREMIUM

In addition to the Final Price, ***** on Light Finished Products only, which is a lump sum amount payable pursuant to Section 9.2 and calculated in the following manner:

Location Premium = *****, where:

 

A. Rack Premium = *****, where:

 

  1. Rack Volume = with respect to the relevant delivery day, the volume ***** at the rack (including sales to PBF).

 

  2. Rack vs. Barge Price Differential = with respect to the relevant delivery day, the price at which *****, less ***** expressed as a differential to a ***** calculated using the ***** prices effective on the day that the rack sale transaction is priced (which is based on the market closing price the ***** prior to the ***** at the rack).

 

60


  (a) Rack Costs include, with respect to the relevant delivery day, any rack fees paid to PBF, a $*****/gallon rack sales administration fee paid ***** to bridge the period of time between ***** cash receipt on its rack sales and the payment timing of the standard ***** transaction.

 

B. NYH Pipe Premium = *****, where:

 

  1. NYH Pipe Volume = with respect to the relevant delivery day, the volume *****.

 

  2. NYH Pipe vs. Barge Price Differential = with respect to the relevant delivery day, the price at which *****, less ***** (if any) expressed as a differential to a ***** calculated using the ***** prices effective at the time the pipe sale transaction is executed.

 

  (a) NYH Pipe Costs = with respect to the relevant delivery day, the Tariff to ship on ***** and a ***** to bridge the period of time between ***** cash receipt on its NYH Pipe sales and the payment timing of the standard ***** transaction

 

C. PA Pipe Premium = *****, where:

 

  1. PA Pipe Volume = with respect to the relevant delivery day, the volume *****.

 

  2. PA Pipe vs. Barge Price Differential = with respect to the relevant delivery day, the price at which ***** expressed as a differential to a ***** calculated using the ***** prices effective at the time the pipe sale transaction is executed.

 

  (a) PA Pipe Costs = with respect to the relevant delivery day, the Tariff to ship on ***** and a ***** to bridge the period of time between ***** cash receipt on its PA Pipe sales and the payment timing of the standard ***** transaction

SECTION V: SALES INCENTIVE

PBF will pay MSCG a Sales Incentive, which is a lump sum amount payable pursuant to Section 9.3 and calculated in the following manner:

Sales Incentive = (A) × *****, where:

 

A. A = *****:

 

  1. *****% to MSCG for quarters in which the ***** is less than $***** million.

 

  2. *****% to MSCG for quarters in which the ***** is higher than $***** but less than $***** million (MSCG receives *****% of the ***** in this band).

 

  3. *****% to MSCG for quarters in which the ***** is higher than $***** but less than $***** million (MSCG receives *****% of the ***** in this band in addition to the amount received under A2 above).

 

61


  4. *****% to MSCG for quarters in which the ***** is higher than $***** but less than $***** million (MSCG receives *****% of the ***** in this band in addition to the amounts received under A2 and A3 above).

 

  5. *****% to MSCG for quarters in which the ***** is higher than $***** but less than $***** million (MSCG receives *****% of the ***** in this band in addition to the amounts received under A2, A3 and A4 above).

 

  6. *****% to MSCG for quarters in which the ***** is higher than $***** million (MSCG receives *****% of the ***** in this band in addition to the amounts received under A2, A3, A4 and A5 above.

 

B. In the event that the total volumes of Light Finished Product produced in any quarter are below *****MB, MSCG and PBF would agree to adjust the ***** as follows:

 

  1. ***** × *****, where:

 

  (a) ***** = *****.

 

  (b) ***** = *****.

 

C. The total Sales Incentive will not exceed $***** per contract year.

 

D. For purposes of this calculation, the ***** will be calculated prior to any time-value-of-money adjustments and will constitute the aggregate ***** payable over the relevant quarterly period.

 

62


SECTION VI: SPECIALTY GRADE PREMIUM

In addition to the Location Premium (which, for the avoidance of doubt, shall not be paid on Specialty Grades), MSCG will also pay PBF a Specialty Grade Premium, which is a lump sum amount payable pursuant to Section 9.2 and calculated in the following manner:

Specialty Grade Premium = (A) × *****, where:

 

A. (A) = *****%.

 

B. Specialty Volume = with respect to the relevant transaction, the volume of specialty waterborne products sold by MSCG from the Refinery, where “specialty” means grades other than the grades listed on Schedule 1 of this Agreement.

 

C. FOB Specialty Product Price = the price, to be mutually agreed to by the Parties, of the Specialty Product ***** by the designated mode of transportation. In cases where the FOB Specialty Product Price is not readily transparent, the Parties will use ***** for the Specialty Product in a relevant market, ***** to *****, as a guide for setting the FOB Specialty Product Price.

 

D. Next Best Alternative Product Price = the ***** of the “Next Best Alternative Product,” defined as the Product that the Refinery would produce if it chose not to produce the Specialty Grade Product. The Next Best Alternative Product Price would be mutually agreed upon by the Parties before the Specialty Grade Product was produced by the Refinery.

 

E. In addition, PBF will receive *****.”

 

63


Illustrative Base Barge Price Calculations:

 

General Product
Description

 

Advisor Product
Code

 

***** Reference Price

 

Barge

Freight(1)
(cpg)

 

Loading

Cost(2)
(cpg)

 

Netback

before

Delivery Cost
(cpg)

 

Delivery

Cost(3)
(cpg)

 

Total

Netback
(cpg)

CBOB   CBOBUNL12.9   *****   *****   *****   *****   *****   *****
CBOB_SUP   CBOBPRE12.9   *****   *****   *****   *****   *****   *****
FINISHED JET   JET   *****   *****   *****   *****   *****   *****
HEATING OIL   HSFO2 UNDYED   *****   *****   *****   *****   *****   *****
PBOB   RBOB10.0UNL13.5   *****   *****   *****   *****   *****   *****
RBOB   RBOB10.0UNL13.5   *****   *****   *****   *****   *****   *****
ULSD   ULSD   *****   *****   *****   *****   *****   *****
ULSK   ULSK   *****   *****   *****   *****   *****   *****

Footnotes:

 

1) Barge freight set with reference to the Poten & Partners Northeast Barge Market Report as of 03/15/2011
2) Includes inspection charges (***** cpg), line handling (***** cpg), insurance (***** cpg), assist tug - docking and undocking (*****)
3) Includes applicable TVM Charge, insurance for inventory in Tank (***** cpg) and *****% loss allowance

 

64


SCHEDULE 7 – INTERMEDIATE PRODUCTS PRICING

The price (the “PBF Intermediate Product Price”) paid for each Product (as defined in the table below) by PBF to MSCG for MSCG’s sales to PBF shall be equal to (A) + (B), where:

 

(A)    = ****;
(B)    = *****;

The price (the “MSCG Intermediate Product Price”) paid for each Product by MSCG to PBF for PBF’s sales to MSCG shall be equal to (A) + (B) – (C), where:

 

(A)    = *****;
(B)    = *****.
(C)    = *****.

The differential values set forth in the table below are representative of differentials which might apply.

 

Product Category

 

General Product
Description

 

Advisor

Product Code

 

*****

 

Cash Reference Price

 

Cash Pricing Differential
Rationale

 

*****

 

*****

Intermediate Products   LT. STRAIGHT RUN   LSRG   *****       *****   *****
Intermediate Products   RAW FCC NAPHTHA   CATG   *****       *****   *****
Intermediate Products   SOUR NAPHTHA   NAPLOW   *****   *****   *****   *****   *****
Intermediate Products   SOUR NAPHTHA   NAP40   *****       *****   *****
Intermediate Products   SWEET NAPTHA   NAPSWEET   *****       *****   *****
Intermediate Products   ALKYLATE   ALKY   *****   *****   *****   *****   *****

 

65


Product Category

 

General Product
Description

 

Advisor

Product Code

 

*****

 

Cash Reference
Price

 

Cash Pricing Differential
Rationale

 

*****

 

*****

Intermediate Products   REFORMATE   REFM   *****   Estimated market value for Reformate   *****   *****   *****
Intermediate Products   CHD1 FEED   CHDLGO   *****   Argus New York Harbor Heating Oil 2000 ppm Barge Mean less quality adjustment less Barge Costs   *****   *****   *****
Intermediate Products   SOUR ST RUN KERO   KERO   *****   Argus New York Harbor Jet/Kerosene 54 Barge Mean less quality adjustment less Barge Costs   *****   *****   *****

Footnote:

 

1) First nearby contract. Each month, Contracts will be rolled ratably over *****, beginning on the ***** Business Day before the settle, such that on this ***** Business Day before the settle, ***** of the contracts will be rolled (at the settlement price for this ***** Business Day before the settle) to the contract for the month after the near month, and therefore ***** of the Cash Pricing Differentials will be adjusted to match this new contract. On the ***** Business Day before the settle, an additional ***** of the contracts will be rolled (at the settlement price) to the contract for the month after the near month, and by the close of the ***** Business Day prior to the near month contract settle, the ***** of the contracts will be rolled such that all Cash Pricing Differentials will be based off the contract for the month after the near month.


From time to time, including prior to the Commercial Operations Date, the Parties may amend and revise the Cash Pricing Differentials and/or the Delivery Costs. The Parties shall make commercially reasonable efforts to agree upon any updates, with MSCG serving as the ultimate calculation agent. MSCG shall keep PBF apprised of any spot market transactions that MSCG undertakes related to the supply or offtake of any of the Intermediate or Lube product streams. This information shall be used as an over-riding source of updates to the Cash Pricing Differentials.

In order to maintain consistency across technology platforms, on any given day that MSCG and PBF decide to change the Cash Pricing differentials, the change must be agreed to by 3pm ET. The updated Cash Pricing Differential will be applied to volumes produced or consumed by the Refinery on the day of the change (this volume data will be sent by PBF to MSCG on the morning of the Business Day after which the Cash Pricing Differential was changed).

Upon any change to a Cash Pricing Differential, MSCG shall calculate a ***** as follows:

***** = *****, where:

(X) = *****.

***** = *****

***** = *****

The ***** will be included on the first invoice that applies the new Cash Pricing Differential. If the ***** is owed to PBF, then this amount shall be paid by MSCG to PBF and vice versa.


Note that any change in the Cash Pricing Differentials as a result of the rolling methodology described in the footnote to the table above will be considered cash flow neutral. These types of changes will not be factored into the ***** and will not trigger the exchange of any funds between the Parties.


SCHEDULE 8 – SLURRY PRICING

The price paid for Slurry by MSCG to PBF for PBF’s sales to MSCG shall be equal to the Daily Price effective for the Business Day on which PBF delivers to MSCG the Daily Report of Delivered Volumes for the relevant Slurry delivery pursuant to Section 5.9. Daily Price to be *****.

From time to time, including prior to the Commercial Operations Date, the Parties may agree to amend and revise the price adjustment for reasons that include, but are not limited to, changing market dynamics or quality of the product.

Quality adjustment scale:

1) If Sulfur is greater than *****%, the following adjustment shall be added to the price:

*****

Example: If the Sulfur is *****% the adjustment shall be: (using prices from 09/14/2010):

*****

No adjustment shall apply for Sulfur at or less than *****%.

2) If API gravity at ***** degrees Fahrenheit is less than *****, the following adjustment shall be added to the price:

*****.

Example: If the API gravity is *****, the adjustment shall be:

*****

No adjustment shall apply for API gravity at or greater than *****.

 

1


SCHEDULE 9 – PRO FORMA CALCULATION OF TVM

(subject to revision upon decision of the Governance Committee)

Illustrative TVM Calculation –Finished Light Products and Slurry

 

     CBOB
REG
  CBOB
Prem
  RBOB   PBOB   HO   JET   ULSD   ULSK   Slurry

TVM Adjustment in Base Barge Price

                  

Base Barge Price

                  

Argus NYH Barge Mean (cpg)

   *****   *****   *****   *****   *****   *****   *****   *****   *****

Barge Costs (excl. Delivery Cost)

   *****   *****   *****   *****   *****   *****   *****   *****  

Net Base Price before Delivery Cost (cpg)

   *****   *****   *****   *****   *****   *****   *****   *****   *****

Net Base Price before Delivery Cost ($/BBL)

   *****   *****   *****   *****   *****   *****   *****   *****   *****

TVM Cost Breakdown

                  

Libor

   *****   *****   *****   *****   *****   *****   *****   *****   *****

Spread

   *****   *****   *****   *****   *****   *****   *****   *****   *****

Costs

   *****   *****   *****   *****   *****   *****   *****   *****   *****

TVM Base Barge Price

                  

TVM Days – Deemed

                  

Minimum Residence

   *****   *****   *****   *****   *****   *****   *****   *****   *****

Incremental Residence

   *****   *****   *****   *****   *****   *****   *****   *****   *****

In Transit (Barge)

   *****   *****   *****   *****   *****   *****   *****   *****   *****

Invoice

   *****   *****   *****   *****   *****   *****   *****   *****   *****

AR

   *****   *****   *****   *****   *****   *****   *****   *****   *****

AR adj

   *****   *****   *****   *****   *****   *****   *****   *****   *****
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

   *****   *****   *****   *****   *****   *****   *****   *****   *****
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TVM ($/BBL) – Base Barge Price

   *****   *****   *****   *****   *****   *****   *****   *****   *****
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1


SCHEDULE 9 – PRO FORMA CALCULATION OF TVM

(subject to revision upon decision of the Governance Committee)

Illustrative TVM Calculation - Intermediates

 

     LT.
STRAIGHT

RUN
  RAW FCC
NAPHTHA
  SOUR
NAPHTHA
  SWEET
NAPHTHA
  ALKYLATE   REFORMATE   CHD1
CostsD
  SOUR ST
RUN KERO

Estimated Price (cpg)

   *****   *****   *****   *****   *****   *****   *****   *****

Net Base Price before TVM ($/BBL)

   *****   *****   *****   *****   *****   *****   *****   *****

RVM Days – Deemed

                

Total

   *****   *****   *****   *****   *****   *****   *****   *****

TVM Cost Breakdown

                

Libor

   *****   *****   *****   *****   *****   *****   *****   *****

Spread

   *****   *****   *****   *****   *****   *****   *****   *****

Costs

   *****   *****   *****   *****   *****   *****   *****   *****
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TVM ($/BBL)

   *****   *****   *****   *****   *****   *****   *****   *****
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


SCHEDULE 10 – TRANSITIONAL OFFTAKE AGREEMENT TERM SHEET

 

1.       Parties:

   Morgan Stanley Capital Group Inc. (“MSCG”) and Delaware City Refining Company LLC (“DCRC”) (each a “Party” and collectively, the “Parties”).

2.       Definitions:

   Capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Second Amended and Restated Products Offtake Agreement between the Parties hereto dated as of [    ], 2012 (the “Terminated Offtake Agreement”).

3.       Intent and Purpose:

  

It is intended that the Parties will, after the Commencement Date, negotiate the terms of a Transitional Offtake Agreement that will incorporate the terms and conditions set out in this Term Sheet. Matters that are not contemplated by or made clear in this Term Sheet will be subject to the mutual agreement of the Parties, provided always that any such matters shall be determined in a manner that is consistent with the terms and conditions set out in this Term Sheet and, where applicable, the terms and conditions of the Terminated Offtake Agreement.

 

Following termination of the Terminated Offtake Agreement and in the circumstances described below, the Parties have agreed that MSCG shall provide certain offtake services, on an exclusive basis, to DCRC in connection with sales of Light Finished Products produced in the Refinery.

4.       Transaction Structure:

  

On the Transition Commencement Date (as defined below) at the Purchase Time (to be defined in the Transition Offtake Agreement), DCRC would purchase and MSCG would sell all Products in the Tanks (the “Inventory”). DCRC would pay on the Transition Commencement Date a provisional amount for the Inventory based on estimated volumes and based on a price equal to the Base Barge Price (as described in Schedule 6 of the Terminated Offtake Agreement) as of the Business Day immediately preceding the Commencement Date. MSCG would invoice DCRC for the provisional amount by 10 a.m. EPT on the Transition Commencement Date. The final price would be determined based on the average of the Base Barge Price over a ***** period including the Transition Commencement Date and each of the ***** Business Days ***** the Transition Commencement Date. After final pricing and determination of final volumes, (i) if the final payment amount in respect of the Inventory is greater than the provisional amount that was paid, DCRC shall pay the difference between the final amount and the provisional amount to MSCG, and (ii) if the final payment amount in respect of the Inventory is less than the provisional amount that was paid, MSCG shall pay the difference between the final amount and the provisional amount to DCRC.

 

On and after the Transition Commencement Date, MSCG would begin to purchase from DCRC all Light Finished Products produced in the Refinery that DCRC does not intend to sell at the Refinery truck rack (“Transition Products”) at the Base Barge Price plus a

 

1


  

mutually agreed upon premium, if applicable. The purchases would be governed by mutually agreed upon general terms and conditions (the “GTCs”). MSCG would purchase the Transition Products FOB at the Refinery’s dock or at the Refinery’s connection to the relevant Pipeline.

 

MSCG would be the exclusive purchaser of Transition Products from the Refinery.

 

The pricing and payment terms for such purchases would be established by the Parties in accordance with industry practice and set forth in the Transition Offtake Agreement. All volumes and measurements would be based on the best available information when calculations are performed and trued up later based on more accurate information.

5.       Term:

   The Terminated Offtake Agreement would terminate and the Transitional Offtake Agreement would commence at the Purchase Time on the Termination Date under the Terminated Offtake Agreement (the “Transition Commencement Date”) and would continue in effect until the six-month anniversary of the Transition Commencement Date (the “Term”).

6.       Conditions Precedent to Transition Commencement Date:

  

The Transitional Offtake Agreement would contain customary conditions to closing, including execution and delivery of the Transitional Offtake Agreement, as well as the following items:

 

(i) DCRC has not, prior to the termination of the Terminated Offtake Agreement, notified MSCG in writing that the Transitional Offtake Agreement would not be required; or

 

(ii) DCRC has made full and final payment when due of any amount payable under the Terminated Offtake Agreement, the Paulsboro Offtake Agreement, any other offtake or supply agreement between MSCG and any DCRC Affiliate and any Transaction Document as defined in any such agreement (provided that where there is a bona fide dispute in relation to any such amount, references to such amounts shall be deemed to be references to the undisputed part of such sum).

7.       Forecasts, Reports and Coordination:

  

The Transitional Offtake Agreement would contain reporting and nomination procedures for Transition Products and information exchange procedures, in each case substantially similar to the reporting and nomination and information exchange requirements contained in Section 5 of the Terminated Offtake Agreement.

 

The Transitional Offtake Agreement would provide for development of procedures for the exchange of information between the Parties throughout the Term to facilitate optimization of the Refinery operations and production scheduling with MSCG’s marketing and sales activities. Such procedures would include meetings (whether in person or by telephone or video conference) on an as required basis and a monthly meeting in person between DCRC personnel and MSCG to, amongst other things, review the then current maintenance activities, delivery and production programs and related operational issues and to consider marketing activity and opportunities.


8.       Insurance:

   The Transitional Offtake Agreement would contain the same insurance requirements as were contained in the Terminated Offtake Agreement.

9.       Interruption of Refinery Operations:

  

The Transitional Offtake Agreement would contain provisions regarding periods when the Refinery is not operating, due to turnaround, maintenance, force majeure or other reasons, and measures to mitigate or minimize the adverse economic consequences and increased economic exposure to both Parties as a result thereof.

 

Upon the occurrence of a force majeure event, each Party’s obligation to perform under the Transitional Offtake Agreement would be suspended until such force majeure event ceases to exist, including obligations to supply Transition Products, if any.

10.     Credit, Security and Adequate Assurance:

  

Morgan Stanley would provide a guarantee of MSCG’s performance under the Transitional Offtake Agreement for the benefit of DCRC.

 

PBF Holding Company LLC would provide a guarantee of DCRC’s performance under the Transitional Offtake Agreement for the benefit of MSCG.

 

The Transitional Offtake Agreement would contain customary provisions regarding financial assurances, providing appropriate current financial information and notification of certain events. The Transitional Offtake Agreement also would contain positive and negative financial covenants as are customary or desirable by MSCG for such transactions, acting reasonably.

11.     Governing Law and Jurisdiction:

   The Transitional Offtake Agreement would be interpreted in accordance with and governed by the laws of the State of New York exclusive of its conflicts of law principles. The Parties would irrevocably submit to the exclusive jurisdiction of any federal court of competent jurisdiction situated in the Borough of Manhattan, New York, or, if any federal court declined to exercise or does not have jurisdiction, in any New York state court in the Borough of Manhattan and waive the right to a jury trial.


Schedule 11A - Form of Intermediates Nomination Notice

(for documenting sales of Intermediate Product to DCRC or PRC at the applicable refinery in

connection with MSCG purchases from the market)

Morgan Stanley Capital Group Inc.

Date: [XXXX]

To: Delaware City Refining Company LLC (“Counterparty”)

Attention: Todd O’Malley

From: Morgan Stanley Capital Group Inc. (“MSCG”)

Operations Contact: Lynn Argianas

Telephone No: 914-225-1519

E-mail: lynn.argianas@morganstanley.com

This “Intermediates Nomination Notice” sets forth certain binding terms that shall apply to the sale of certain Intermediate Products from MSCG to Counterparty under the terms of the Second Amended and Restated Products Offtake Agreement between MSCG and Counterparty, effective July 31, 2012, as such agreement may be amended or supplemented from time to time (the “Offtake Agreement”) and as set forth herein. Any capitalized term not defined herein shall have the meaning specified in the Offtake Agreement.

 

1. Product: [xxxxxxxxxxxx]

 

2. Quantity: Approximately [] Barrels

 

3. Delivery Date: The Delivery Date shall occur during the period from [xxxxxx] to [xxxxx] (the “Delivery Period”)

 

4. Price: [formula price] per Barrel, rounded to the nearest third decimal place

 

5. Delivery Location: Out-of tank at the Refinery in accordance with the terms of the Offtake Agreement

 

6. Title Transfer: As per the terms of the Offtake Agreement, as Product passes the outlet flange of the relevant Tank

 

7. Payment Terms: As per terms of the Offtake Agreement

We appreciate the opportunity to have concluded this business with you.

Regards,

Morgan Stanley Capital Group Inc.

 

By:  

 

Name:  

 

Title:  

 

Date:  

 


Schedule 11B - Form of Intermediates Nomination Notice

(for documenting purchases of Intermediate Product from DCRC or PRC at the applicable refinery

in connection with MSCG sales to the market)

Morgan Stanley Capital Group Inc.

Date: [XXXX]

To: Delaware City Refining Company LLC (“Counterparty”)

Attention: Todd O’Malley

From: Morgan Stanley Capital Group Inc. (“MSCG”)

Operations Contact: Lynn Argianas

Telephone No: 914-225-1519

E-mail: lynn.argianas@morganstanley.com

This “Intermediates Nomination Notice” sets forth certain binding terms that shall apply to the sale of certain Intermediate Products from Counterparty to MSCG under the terms of the Products Offtake Agreement between MSCG and Counterparty, effective August 1, 2012 as such agreement may be amended or supplemented from time to time (the “Offtake Agreement”), and as set forth herein. Any capitalized term not defined herein shall have the meaning specified in the Offtake Agreement.

 

1. Product: [xxxxxxxxxxxx]

 

2. Quantity: Approximately [] Barrels

 

3. Delivery Date: The Delivery Date shall occur during the period from [xxxxxx] to [xxxxx] (the “Delivery Period”)

 

4. Price: [formula price] per Barrel, rounded to the nearest third decimal place

 

5. Delivery Location: Into-tank at the Refinery in accordance with the terms of the Offtake Agreement

 

6. Title Transfer: As per the terms of the Offtake Agreement, as Product passes the inlet flange of the relevant Tank

 

7. Payment Terms: As per terms of the Offtake Agreement

We appreciate the opportunity to have concluded this business with you.

Regards,

Morgan Stanley Capital Group Inc.

 

By:  

 

Name:  

 

Title:  

 

Date:  

 


SCHEDULE 12

PRODUCT SALES FROM TPSI TO PBF

Except as set forth below, the terms of the Agreement shall apply to sales of Products from TPSI to PBF just as sales of Products from PBF to TPSI and Intermediate Products between MSCG and PBF. As used in this Schedule 12, “Seller” means TPSI and “Buyer” means PBF. As used in this Schedule 12, “party” shall mean PBF or TPSI and “parties” shall mean PBF and TPSI collectively. All capitalized terms used in this Schedule 12 that are not otherwise defined in this Schedule 12 shall have the meanings ascribed thereto in the main body of this SECOND AMENDED AND RESTATED PRODUCTS OFFTAKE AGREEMENT (the “Agreement”).

DCRC and Premcor have been parties to that certain TERMINALING AND OFFTAKE AGREEMENT (the “Premcor Offtake”) dated June 1, 2010. DCRC hereby represents and warrants that, on or prior to the Effective Date of this Agreement, the Premcor Offtake Agreement shall have terminated pursuant to Section 1 thereof and the parties thereto shall have no further obligations thereunder.

On or prior to the Effective Date, PBF and Premcor are entering into the New Premcor Agreement, a copy of which is attached to this Schedule 12 as Attachment B. PBF covenants and warrants that it shall not amend or otherwise modify the New Premcor Agreement in any manner that will adversely affect MSCG’s title to Products at the Refinery, storage rights at the Refinery or otherwise adversely affect MSCG’s or TPSI’s rights under this Agreement. In the event the New Premcor Agreement terminates or expires prior to the termination or expiration of this Agreement, then this Schedule 12 shall no longer be in effect. PBF shall provide prior written notice to TPSI of any expiration or termination of the New Premcor Agreement as soon as practicable.

Payment terms and pricing for the Product is as follows:

 

PURCHASE AND SALE:    During the Term, Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, an amount equal to the Monthly Ratable Volume (as defined below) per month of the product set forth on Attachment “A” hereto (the “Premcor Product”) and at the terminal location specified in Attachment “A” hereto (the “Terminal Location”) on the terms and conditions set forth in this Schedule 12. Buyer may purchase and take delivery of no more than the Daily Maximum Volume (set forth on Attachment “A” hereto), and may purchase and take delivery of no more and no less than the volume of Product that Premcor takes delivery of at the Refinery truck rack under the terms of the New Premcor Agreement.
   TPSI shall be excused from performance hereunder to the extent TPSI’s failure to perform results from PBF’s failure, for any reason, to produce and deliver product to MSCG in the quantities and meeting the specifications required pursuant to Schedule 12.
   Notwithstanding the above, in the event of any such PBF failure, MSCG and PBF shall consult in good faith regarding the appropriate mitigating actions, which may include inhaul or obtaining substitute Product, and MSCG agrees to make commercially reasonable efforts to take mitigating actions to the extent PBF agrees to indemnify MSCG for any costs incurred in connection therewith.
PRICING FORMAT:    For *****, the price will be *****.


  For *****, the price will be *****.
 

Premcor Product will be invoiced based on a *****.

NOMINATIONS:  

On or before the 15th day of each month during the Term, Buyer shall nominate a volume for each Premcor Product that is (i) at least *****% of the volume set forth below for each Premcor Product (the “Minimum Monthly Ratable Volume”) and no more than *****% of the volume set forth below for each Premcor Product (the “Maximum Monthly Ratable Volume”), and (ii) exactly equal to the volumes nominated by Premcor to PBF under the terms of the New Premcor Agreement for the following month for each such Premcor Product, which amount will be the “Monthly Ratable Volume” for the following month for each such Premcor Product. Without the prior consent of Seller, Buyer shall not be permitted to nominate a volume to serve as the Monthly Ratable Volume for the following month that is less than the Minimum Monthly Ratable Volume or greater than the Maximum Monthly Ratable Volume for any such Premcor Product. In the event that Buyer does not nominate a volume for the following month on or before the 15th of each month, Seller shall set the Monthly Ratable Volume for the following month ***** and provide notice to Buyer of that volume, or, *****. For July 2012, Buyer shall provide Seller with the Monthly Ratable Volume on or prior to June 28, 2012 for each of the Premcor Products. For each Month during the Term, Buyer’s actual purchases shall be between *****% and *****% of the Monthly Ratable Volume for that Month. Buyer will exercise reasonable business efforts to cause its purchase and receipt of Premcor Products to be ratable over the month and in proportion to each of the Premcor Products nominated.

    Premcor Products         Volume (BPD)
  *****       ***** Barrels per day
  *****       ***** Barrels per day
  *****       ***** Barrels per day
  *****       ***** Barrels per day
TITLE AND RISK OF LOSS:  

Title to and risk of loss of the Rack Products shall pass from Seller to Buyer as follows: (i) for gasolines: as the Rack Products (which already include additive) pass the point where ethanol is injected (the Enraf Vertical Ethanol Blender) creating the bulk supply of Rack Product which then is supplied to the line leading to the Refinery’s truck loading rack; and (ii) for diesel or other distillates: at the point where the bulk supply of Rack Products enter the line leading to the Refinery’s truck loading rack. Buyer shall then transfer title to the Rack Products to Premcor under the terms of the Premcor Supply Agreement.

 

PBFH has entered into an Amended and Restated Services Agreement with DCRC, pursuant to which DCRC provides refining and terminal services to PBFH and is responsible for full compliance with the Internal Revenue Service reporting requirements for terminal operators.

OFF-TAKE SPECIFICATION:  

The Premcor Products supplied to Buyer hereunder shall meet the then-current Buckeye Pipeline specifications for the applicable product. For Premcor Product blending, Seller shall provide the ethanol and shall be the blender of record and shall retain the applicable RINs, subject to the obligation of MSCG under Section 6.5.2 to transfer such RINs to PBF.

INVOICES:  

Seller shall submit an invoice, together with each bill of lading with respect to a Premcor Product delivery, to Buyer, and Buyer agrees to pay Seller by means of an electronic funds transfer within four (4) Business Days of receipt of any such invoice. Each invoice shall specify quantity, Premcor Product type, grade of products nominated by Buyer and delivered by Seller and the prices applicable for such Premcor Product and quantity. The parties agree to work together in good faith to arrange for each invoice to be sent via electronic data interchange (“EDI”), failing which Seller shall deliver each invoice to Buyer via facsimile or electronic transmission, unless otherwise agreed by the parties.


NOTICES:

  

All notices required to be given pursuant to this Schedule 12 shall be in writing and shall be deemed delivered when received by the other party at the address specified below:

   All notices to MSCG shall be mailed or faxed as follows:
   Morgan Stanley Capital Group Inc.
   2000 Westchester Avenue
   Purchase, New York 10577
   Fax:        914-750-0486
   Contract Management:    
         Contact   Phone   Fax
     Kimberly Milera   914-225-5115   914-750-0486
     Brian Couch   303-860-5329   303-626-8228
     Greg Robinson   303-860-5251   303-626-8228
   Scheduling Contacts:    
     Gasoline Waterborne:    
     Northeast – Christina Gregor   914 -225-1678   914-225-9299
     Southeast- Kathryn Gallagher   914 225-4804   914-225-9299

The additional provisions set forth on Attachment “C” to this Schedule 12 (the “General Provisions”) are incorporated by reference into this Schedule 12 and shall apply to all sales from TPSI to PBF under this Schedule 12 only. The General Provisions shall not apply to any other purchases or sales under this Agreement. To the extent of any conflict or inconsistencies between the main body of this Agreement, Schedule 12 and the General Provisions, such conflict or inconsistency shall be resolved first in favor of Schedule 12, second in favor of the main body of this Agreement, and third in favor of the General Provisions.


ATTACHMENT “A”

Terminal Location: Delaware City Refining Company (Delaware City, DE)

 

Premcor Product:

 

Blend Stock

 

Daily Maximum

Volume: (bbls)

 

Differentials:

(Per Gallon)

 

Additional Fees

*****

  *****   Note 1   $*****   Note 2

*****

  *****   Note 1   $*****   Note 2

*****

  *****   Note 1   $*****   Note 2

*****

  *****   Note 1   $*****   Note 2

Note 1: Equal to Monthly Ratable Volume divided by number days in delivery month multiplied by *****%

Note 2: Any other fees charged by the Terminal Location will be *****. For gasoline, these fees are currently additive fees of $***** per gallon of finished gasoline and an ethanol blending fee of $***** per gallon of finished gasoline. For diesel, these fees are currently a lubricity additive fee of $***** per gallon of diesel and a dye additive fee of $***** per gallon of diesel. For all Premcor Products, these fees include a throughput fee of $***** per gallon.


ATTACHMENT “B”

NEW PREMCOR AGREEMENT


LOGO

OFFTAKE/EXCHANGE AGREEMENT

This Offtake/Exchange Agreement (“Agreement”) is made on the 1st day of July, 2012 (the “Effective Date”) by and between PBF Holding Company LLC (including its subsidiary Delaware City Refining Company LLC, collectively referred to herein as “PBF”, “Seller” or “Owner”), The Premcor Refining Group Inc. (“Premcor”, “Buyer” or “Customer”) and for the limited purposes set forth in Section 6(c) herein, Valero Marketing and Supply Company (“VMSC”). PBF and Premcor may hereinafter be referred to individually as a “Party” or collectively as the “Parties”.

Premcor and PBF agree to the exchange of petroleum products on the following terms and conditions:

1. Composition of Agreement. This Agreement includes (i) the main body (recitals, signatures and sections 1 through 15 inclusive) of this Agreement, (ii) Exhibit A ((i) and (ii) are also collectively referred to herein and the exhibits as the “Confirmation”), (iii) the attached PBF Holding Company LLC General Terms and Conditions effective April, 2012 (the “GTCs”), and (iv) the following Appendices:

 

Appendix 1    Inhaul Terms and Inhaul Services
Appendix 2    Marine Terms and Conditions
Appendix 3    Carrier Access Agreement

All of which are made a part of and incorporated herein for all purposes. To the extent of any conflict or inconsistencies between the Confirmation, GTCs, Appendix 1, Appendix 2 and Appendix 3, such conflict and inconsistencies shall be resolved first in favor of the Confirmation, second in favor of the Appendix 1, third in favor of Appendix 2, fourth in favor of Appendix 3 and fifth in favor of the GTCs. If there is a conflict between Exhibit A and the main body of this Agreement, Exhibit A will govern. Capitalized terms not defined in this Confirmation are defined in the GTCs.

2. Term. The term of this Agreement shall commence on the Effective Date, and unless sooner terminated as provided herein, shall terminate on June 30, 2013 (the “Term”).

3. Products and Exchange. Each Party agrees to deliver (the “Delivering Party”) to and receive (the “Receiving Party”) from the other Party the volumes of products (the “Product” or “Products”) set forth in Exhibit A attached hereto and incorporated herein for all purposes at the locations (the “Delivery Points”) and differentials (the “Differentials”) identified in Exhibit A. The Products to be delivered by Premcor shall be referred to as the “Premcor Products” and the Products to be delivered by PBF shall be referred to as the “PBF Products”.

4. Specifications. The Products shall comply with (i) with applicable federal, state, and local requirements, including but not limited to the most current applicable Environmental Protection Agency (“EPA”) regulations and the American Society for Testing and Materials (ASTM) specifications for the delivery locations at the time of shipment, and (ii) the fungible grade product specifications for Buckeye Pipeline. All ethanol to be blended with CBOB will meet ASTM D 4806 specifications.

5. Nominations. Customer shall provide PBF with a forecast of its monthly requirements for each of the PBF Products on or before the 15th day of each calendar month for the following month. Customer’s liftings will be between *****% and *****% of the monthly nominated volumes. Customer will exercise reasonable business efforts to cause its purchase and receipt of the PBF Products to be ratable over the month and in proportion to each of the PBF Products nominated.

 

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6. Delivery, Title and Risk of Loss.

 

  (a) Delivery of the PBF Products shall be made to Premcor at PBF’s truck loading terminal at the Delaware City Refinery (the “Refinery”). Title and risk of loss shall pass from PBF, or its Affiliate, to Premcor as the PBF Product passes the last discharge flange of PBF’s loading facility and into Premcor’s designated truck. Premcor shall be required to enter into the facility access agreement in substantially the same form as the attached Appendix 3 and each of its carriers accessing the Refinery shall be required to enter into the carrier access agreement which is attached thereto.

 

  (b) Delivery of the Premcor Products shall be made to PBF by stock (in tank) transfer at the Delivery Points in Linden NJ. Title to and risk of loss of the Premcor Product shall pass from Premcor, or its Affiliate, to PBF, or its Affiliate, unless otherwise agreed or indicated on the PTO (or other acceptable transfer documentation) issued by the applicable Party or a terminal operator, at 00:01 on the effective date of the transfer.

 

  (c) Immediately prior to completing the exchange of the Premcor Products at the Delivery Points in Linden NJ, Premcor shall receive an intank transfer of the Premcor Products from its Affiliate, VMSC. Immediately following the completion of the exchange of the Premcor Products at the Delivery Points in Linden NJ, PBF shall sell the Premcor Product back to VMSC via intank transfer at ***** for the relevant Product, ***** as set forth in Section 7(d)(ii) hereof.

7. Differentials.

 

  (a) Base Location. The base location of the exchange for purposes of calculating Differentials and balancing Base Products shall be Linden, NJ (the “Base Location”).

 

  (b) Location Differential. The location differential for each Product is set forth in Exhibit A. For each Premcor Product transferred by Premcor at Linden, Premcor shall collect the negotiated rate as the location Differential (calculated on a per gallon basis) set forth in Table 2 on Exhibit A. For each PBF Product received by Premcor at the Refinery, Premcor shall pay the negotiated rate as the location Differential (calculated on a per gallon basis) set forth in Table 1 on Exhibit A.

 

  (c) Product Regrade Differentials. The base Products (“Base Products”) for purposes of balancing hereunder shall be *****. For purposes of calculating Product differentials the Product regrade differential formulas set forth under Note (D) on Exhibit A shall apply.

 

  (d) Balancing.

 

  (i) The total forecasted volume imbalance, by Base Product, will be divided by the number of Wednesday’s in the calendar month of lifting. This calculated volume will be invoiced on a weekly basis on each Wednesday, or other mutually agreed upon day of the following month. The intank transfer scheduled for the last Wednesday of each calendar month will be adjusted so that the closing monthly exchange balance is as close to zero as possible. The intent of this contract is that all liftings will be on a ratable basis.

 

  (ii) Intank transfer pricing will be calculated by using the ***** for the business day before, business day of, and business day after the agreed upon weekly intank transfer date (i.e. if the intank transfer occurs each Wednesday, the price will be based on *****). If Wednesday is a holiday, use the business day price of the preceding Monday, the amended delivery date of Tuesday and the following Thursday. If Tuesday is a holiday, use the business day price of the preceding Monday, the delivery date of Wednesday and the following Thursday. If Thursday is a holiday, use the business day price of the preceding Tuesday, the delivery date of Wednesday and the following Friday.

 

2


  (e) The Differentials are expressed in dollars per gallon and shall be calculated on a per gallon basis to ***** or other publication specifically set forth in Exhibit A for the applicable Product, as the basis for the calculations indicated in Exhibit A. In the event ***** ceases operation and/or publication of the relevant price, the Parties agree to meet within ten (10) days to agree to a replacement publication for use hereunder.

8. Blending and Other Fees. In addition to the Differentials identified in Exhibit A, the blending, handling and additive fees set forth in Exhibit A shall apply on the applicable PBF Product received by Premcor at the Refinery.

9. Accounting.

 

  (a) The Delivering Party shall promptly forward all shipping documents, statements, invoices and all required product transfer documents (“PTO”) with supporting detail, including bills of lading to the Receiving Party by the method and to the location provided for notices in Section 15 hereof. The Receiving Party shall send payments to the Delivering Party by the means and at the address or location provided on the invoice.

 

  (b)

Each Party shall provide to the other the Party as soon as practicable, but in no event more later than the 10th day of the month following the month of delivery, their respective exchange statements (each an “Exchange Statement”) showing the exchange quantities delivered and received during the preceding month together with invoices covering the Product costs, Differentials, taxes (if any) and other charges payable hereunder. The Parties shall also provide each other a summary list of all PTOs delivered in the preceding month. PBF’s Exchange Statement shall govern and be used as the basis for paying Differentials in transactions under the Agreement, absent fraud.

10. Invoice Payment Method and Terms.

 

  (a) Except for the Differentials, taxes, governmental fees, or other payments (e.g., Premcor Product back to VMSC per Section 6(c)) expressly provided for in this Agreement, this exchange is on a barrel-for-barrel basis without the payment of money by one party to the other party.

 

  (b) If PBF’s Exchange Statement indicates that one Party owes money to the other Party after all exchange balances, Differentials, taxes (if any) and other charges are reconciled, the owing Party shall pay (without discount) the amount set forth on PBF’s Exchange Statement within ten (10) days after receiving PBF’s Exchange Statement and the applicable invoice.

 

  (c) Both parties will keep the volumes exchanged under the Agreement in approximate balance at all times. Upon termination of this Agreement and after the reconciliation and agreement of balances, the Parties shall settle all remaining balances within ninety (90) calendar days as follows:

 

  (i) A Party owing a product balance equal to or greater than ***** barrels shall settle such balance by either a physical delivery or a book transfer to a balance under another agreement as mutually agreed in writing before such settlement is made.

 

  (ii) A Party owing a product balance less than ***** barrels will be settled by either a book transfer to a balance under another agreement or a purchase and sale based on a price as mutually agreed in writing before such settlement is made. If no other basis has been agreed upon, the price for the product will be the month average contract price for the date of last activity.

11. Resolution of Open Items. The Delivering Party will provide supporting documentation to the Receiving Party. In the case of open items, the Delivering Party must provide documentation as requested by the Receiving Party within six (6) months of the request, or reverse the transaction off the Exchange Statement. If, upon receipt of the supporting documentation, the Receiving Party determines the transaction to be in error, the Receiving Party must communicate the error to the Delivering Party within six (6) months of the receipt of the erroneous supporting documentation or it will be deemed to have accepted the transaction and will record it as the Delivering Party’s Exchange Statement reflects. If a transaction has not been reported by either the Receiving Party or Delivering Party for a year subsequent to the ship date as shown on the bill of lading, both Parties are prohibited from reporting it, unless the Parties agree, in writing, prior to the transaction being recorded on the Exchange Statement.

 

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12. Measurement and Inspection.

 

  (a) The quantity of the Products shall be determined in accordance with the latest established ***** for the method of delivery. Unless otherwise specified elsewhere in this Agreement, all volumes shall be ***** in accordance with the latest supplement or amendment to *****. Metering systems shall conform to the ***** then in effect relative to meter calibration/accuracy. The party responsible for the meters or temperature probes used for measurement under this Agreement shall ensure that such meters and temperature probes are calibrated and proved according to applicable*****, but in any event, not less frequently than once every six (6) months. If the other party has reasonable cause, it will have the right to independently certify, at its own expense, the calibration of such meters and temperature probes.

 

  (b) The quantity of Product delivered to Premcor at the Refinery truck rack shall be determined using calibrated and proved meters at the loading terminal to measure quantities delivered into tank trucks/cars, or if such meters are not available, tank gauges or weigh scales shall be used and evidenced by bill of lading(s) or based on the PTO (or other acceptable transfer documentation). The quality of Product delivered to Premcor shall be based on composite samples taken prior to loading from the supply tank from which the Products are delivered.

 

  (c) The quantity of Product delivered to PBF at Linden New Jersey shall be based on the PTO (or other acceptable transfer documentation) or the books and records of the facility operator. The quality of Product shall be based on composite samples taken from the applicable tank prior to transfer.

 

  (d) Each Party shall have the right to have a representative present at the time of loading, discharge, gauging and measurement. Such representative must comply with any applicable dock, terminal, and/or pipeline facilities’ safety procedures or requirements. If an independent inspector is present, however, the independent inspector’s gauges, tests, and measurements will be binding upon the Parties absent fraud or manifest error. Unless otherwise agreed, the cost of the independent inspector will be shared equally by the Parties.

13. Maintenance. In the event of any planned or unplanned maintenance or shutdown of the Refinery or associated terminal that, in PBF’s reasonable judgment, will affect PBF’s supply of PBF Products hereunder (“Outage”), PBF shall provide Valero with at least 30 days advance notice of the Outage if such Outage is a planned Outage or scheduled turnaround (a “Planned Outage”), and as much advance notice of the Outage as reasonably possible if the Outage is unplanned or in connection with an event of Force Majeure (as defined in Appendix 1)(an “Unplanned Outage”). Until such time that the Outage becomes public, Premcor agrees to keep the fact that it received notice of an Outage confidential. In the event of an Unplanned Outage, and to the extent that PBF has inventory available at the Refinery, PBF shall continue to supply to Premcor the Product out of such available inventory, subject to PBF’s allocation of available inventory at the Refinery among customers on a prorata basis. As soon as reasonably possible following the Unplanned Outage, PBF shall determine the amount of inventory available to Premcor and provide Premcor with notice of such volumes. During any Outage (and once existing inventory volumes, if supplied to customers including Premcor, are exhausted during an Unplanned Outage), Premcor may inhaul the Products sufficient to provide for Premcor’s needs at the Refinery during the Outage (“Inhauling”) pursuant to the terms and conditions set forth in Appendix 1, and (i) Premcor shall pay PBF $***** per gallon as a throughput fee on each gallon of Product delivered into the Refinery during Inhauling, and (ii) Premcor’s product shall be commingled with other Refinery customers’ like product. During any Inhauling hereunder, Premcor shall not be required to deliver the Premcor Product on exchange to PBF. Once PBF has a sufficient amount of on spec PBF Product to provide for Premcor’s needs on exchange at the Refinery consistent with the quantities set forth in Exhibit A, the Premcor shall transition out of the Inhauling and the Parties shall resume the exchange of Products hereunder.

14. Termination of Terminaling and Offtake Agreement. Delaware City Refining Company LLC (“DCRC”) and Premcor have been parties to that certain TERMINALING AND OFFTAKE AGREEMENT (the “Offtake”) dated June 1, 2010. The Parties acknowledge and agree that upon Effective Date of this Agreement the Offtake shall terminate pursuant to Section 1 of the Offtake and the parties thereto shall have no further obligations under the Offtake.

 

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15. Notices:

 

  (a) For PBF:

(i) The following contacts and their respective subject matter expertise are provided for convenience purposes only. All formal notices and communication required under this Agreement to the applicable Party shall be in writing and delivered as set forth in Section 14(a)ii below:

 

Contracts    Margaret Keane       Tel: (973) 455-8985
         Fax: (973) 971-3625
         Email: maggi.keane@pbfenergy.com
Scheduler    Carette Nelson       Tel: (973) 455-7525
         Fax: (973) 455-8961
         Cell: (203) 979-4119
         Email: Carette.Nelson@pbfenergy.com
Invoice:    Colleen Fitzpatrick       Tel: (973) 455-7577
         Fax: (973) 455-7561
         Email: colleen.fitzpatrick@pbfenergy.com

(ii) For required notices under this Agreement:

PBF HOLDING COMPANY LLC

1 Sylvan Way

Parsippany, NJ 07054

Attn:Todd O’Malley

Telephone: (973) 455-7527

Facsimile: (973) 455-8962

 

  (b) For Valero

(i) The following contacts and their respective subject matter expertise are provided for convenience purposes only. All formal notices and communication required under this Agreement to Valero shall be in writing and delivered as set forth in Section 14(a)ii below:

 

Operational:    Deann Johnson         Tel: (210) 345-2802
           Fax: (210) 370-6385
           Email: deann.johnson@valero.com
   Amy Gingrich         Tel: (210) 345-3589
           Fax: (210) 444-8506
           Email: NE.Allocs@valero.com
Exchange Statements:    Linda Aurit         Tel: (210) 345-4121
           Fax: (210) 370-4121
           Email: linda.aurit@valero.com
Bulk Invoices:    Monica Rodriguez         Tel: (210) 345-2971
           Fax: (210) 444-8512
           Email: monica.rodriguez@valero.com
   Patricia Yow         Tel: (210) 345-5059
           Fax: (210) 444-8512
           Email: patricia.yow@valero.com

 

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PLEASE FAX ALL INVOICES

(ii) For required notices under this Agreement:

THE PREMCOR REFINING GROUP INC.

One Valero Way

San Antonio, Texas 78249

Attn: Senior Vice President – Product Supply

Telephone: (210) 345-3599

Facsimile: (210) 345-2413

 

  (c) Any notice required under this Agreement must be sent or transmitted by (a) United States mail, certified or registered, return receipt requested, (b) nationally recognized overnight courier service, (c) confirmed facsimile transmission properly addressed or transmitted to the address of the Party indicated above or to such other address or facsimile number as one Party shall provide to the other Party in accordance with this provision, provided delivery is also promptly effectuated by one of the other means of delivery set forth in (a) or (b) above, or (d) email only in instances specifically provided for herein which shall be deemed duly given immediately (with receipt confirmed). Except as specifically provided herein, all notices, consents, requests, demands and other communications hereunder are to be in writing, and are deemed to have been duly given or made on the delivery date if delivery is made before or during applicable normal business hours or on the next Business Day if delivered after applicable normal business hours. In the event a delivery/notice deadline falls on weekend or holiday, then the applicable deadline will be extended to include the first Business Day following such weekend or holiday.

[Signatures follow on subsequent page]

 

6


IN WITNESS WHEREOF, each Party has caused this Offtake/Exchange Agreement to by executed by a duly authorized representative.

 

PBF HOLDING COMPANY LLC

 

Name:
Title:
Date:
DELAWARE CITY REFINING COMPANY LLC

 

Name:
Title:
Date:
THE PREMCOR REFINING GROUP INC.

 

Name:
Title:
Date:
For the limited purposes set forth in Section 6(c) herein:
VALERO MARKETING AND SUPPLY COMPANY

 

Name:
Title:
Date:

 

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EXHIBIT A

TABLE 1

The Premcor Refining Group Inc. Receipt Location: Delaware City Refinery, DE (R508)

PBF Holding Company LLC Delivers Product

 

Product

   Mode    Barrels/month    Location
Differential
(A)
   Handling    Additive/
Lubricity
(B)
   Red Dye    Ethanol
Injection

Fee
(C)
   Grade (D)

*****

   *****    *****    *****    *****    *****    *****    *****    *****

*****

   *****    *****    *****    *****    *****    *****    *****    *****

*****

   *****    *****    *****    *****    *****    *****    *****    *****

*****

   *****    *****    *****    *****    *****    *****    *****    *****

*****

   *****    *****    *****    *****    *****    *****    *****    *****

TABLE 2

 

The Premcor Refining Group Inc. Delivery Location: Linden, NJ1

PBF Holding Company LLC Receives Product

 

Product

   Mode    Barrels/month    Location
Differential
(A)
                       Grade (D)

*****

   *****    *****    *****                *****

*****

   *****       *****                *****

*****

   *****       *****                *****

*****

   *****    *****    *****                *****

*****

   *****       *****                *****

 

1 

The location in the Linden NJ area will be at one of several terminals that Premcor or its Affiliate, Valero Marketing and Supply Company, uses, including the Kinder Morgan Perth Amboy Terminal and the CITGO Terminal.

 

1


(A) Location fee will be ***** = $***** for the Ethanol Blended Gasoline.

 

(B) Lubricity agent for ULSD listed in Generic additive as $***** per gallon.

 

(C) There will be an ethanol injection fee of $***** per gallon on all RBOB w/ethanol.

 

(D) Re-grade Formulas:

 

Sub-Product

   Base
Product
(s)
   Re-grade Formula

*****

   *****    *****

*****

   *****    *****

*****

   *****    *****

ULSD price to be *****, posted days only.

Ethanol price to be *****, posted days only.

 

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APPENDIX 1

INHAUL TERMS AND TERMINAL SERVICES

1. Definitions. For purposes of this Appendix, the following terms shall have the meanings indicated below.

Affiliate” means any entity that, directly or indirectly, controls, is controlled by, or is under common control with the referenced entity, including the referenced entity’s parent. In this definition, “control” means the power to direct the management and policies of an entity, directly or indirectly, whether through the ownership of voting securities, by contract, or otherwise.

API” means American Petroleum Institute.

Applicable Law” means any and all applicable federal, state, and local codes, constitutions, decrees, directives, laws, licenses, ordinances, injunctions, orders, permits, regulations, requirements, rules, and statutes that have been implemented, and are enforced, by any judicial, regulatory, or governmental authority, agency, body, commission, or department.

Docks” means the marine/barge dock facilities and related improvements that are located at or within the Refinery.

Force Majeure” means any cause or event reasonably beyond the control of a Party, including (but without limiting the generality of such term): act(s) of god, perils of the sea, fire, delay of the performing vessel arising from breakdown or adverse weather, accidents at, closing of, or restrictions upon the use of mooring facilities, docks, ports, pipelines, harbors, or other navigational or transportation mechanisms, war (declared or undeclared), military operations, blockade, revolution, disruption or breakdown of, or explosions or accidents to, wells, storage plants, refineries, terminals, machinery or other facilities, trade restriction, strike, lockouts, or a dispute or difference with workers, labor shortage requests, orders or actions of any government, or by any person purporting to represent a government, or any other cause of a similar nature as described herein not reasonably within the control of the respective Parties; provided, however, that the following events shall not constitute a Force Majeure: (a) a Party’s inability to economically perform its obligations under this Agreement, (b) market conditions except for raw material or other product or material shortages, (c) any breakage or damage to the Terminal as a result of a Party’s failure to maintain or repair equipment or any portion of the Terminal in accordance with the terms of this Agreement, and (c) any negligent or willful failure by a Party to apply for, obtain or maintain any permit, license, approval or right of way necessary under Applicable Law for the performance of any obligation under this Agreement.

Truck Rack” means the truck rack and related improvements that are located at or within the Refinery.

Vessel” means any pushboat, towboat, barge, or other marine vessel or combination thereof, employed or chartered for the purpose of transporting Product to and from the Docks.

 

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VEF” means Vessel experience factor, always qualified and consistent with current API standards.

2. Alternate Supply. During an Outage resulting in Premcor’s rights to inhaul under Section 13 of this Agreement, Morgan Stanley Capital Group Inc. (“MSCG”) may supply (or cause the supply to) PBF at the Refinery with volumes of in-hauled Products (Products other than those on hand at the Refinery) as necessary to enable PBF to supply Premcor in accordance with the terms this Agreement. If MSCG does not supply (or does not cause the supply to) PBF with volumes that would enable PBF to supply Premcor in accordance with this Agreement, Premcor shall have the right to inhaul any and all of the Products to the Refinery in such quantities sufficient to substitute for the quantities of PBF Products received by Premcor on exchange at the Refinery prior to the Outage (all such Products which Premcor inhauls shall be referred to as the “Inhaul Products”) subject to dock and tank availability at the Refinery (It being understood that the dock and tank shall be available to Premcor on a first come first serve basis, except to the extent unavailable due to the Outage or as a result of an event of Force Majeure). In such circumstances, Premcor and PBF agree to negotiate in good faith an arrangement with MSCG whereby Premcor will sell and transfer title to the inhaul Products to MSCG1 upon receipt into the tanks at the Refinery, and MSCG or its Affiliate will sell and transfer title to the Inhaul Products to PBF in the same volumes necessary to enable PBF to supply Premcor as a result of an Outage.

3. Commingled Product. Notwithstanding the foregoing, in the event that Premcor, MSCG and PBF are unable to agree on acceptable terms for a buy/sell arrangement of Inhaul Products, Premcor shall be entitled to inhaul the Inhaul Products in the quantities that PBF would have been required to delivery to Premcor under the terms of this Agreement and Premcor hereby covenants and warrants that it will respect the title to all other inventory held by MSCG and not take title or custody to volumes of Product in excess of that inhauled, and shall not have a negative inventory balance. For purposes of the previous sentence only, MSCG shall be an intended third party beneficiary.

4. Inhaul Services. In the event Premcor inhauls the Inhaul Products pursuant to Section 3 of this Appendix 1, the following shall apply:

a. PBF agrees to perform or cause to be performed by its Affiliate or MSCG terminal services for Premcor at the Terminal, including (i) receipt of the Inhaul Products by Vessel, (ii) storage, handling and blending of the Inhaul Products (iii) redelivery of the Inhaul Products to the Truck Rack in accordance with the terms and conditions of this Agreement; (iv) vapor recovery of the Inhaul Products as required by Applicable Law; (v) the injection of additives into the Inhaul Products and associated volumetric additive reconciliation reporting; and (v) such other services as the Parties may agree (collectively the “Inhaul Services”). PBF will provide the labor and supervision necessary to perform the Inhaul Services and will provide and maintain the equipment necessary to perform the Inhaul Services contemplated by this Appendix 1. All such Inhaul Services shall be performed by PBF consistent with good industry practice.

 

 

1 

If the Amended and Restated Products Offtake Agreement dated as of June 28, 2012 among MSCG, DCRC and PBF (and TransMontaigne Product Services Inc. with respect to certain provisions therein) is terminated, each reference to MSCG herein shall be replaced by (i) PBF or its Affiliate, (ii) another customer or (iii) a third party with inventory at the Refinery, in the case of (i), (ii) or (iii) as reasonably agreed to between Buyer and PBF.

 

2


b. Description of Facilities. As part of the Inhaul Services and in accordance with the terms and conditions set forth in this Appendix 1, PBF shall provide, operate and maintain at the terminal at the Refinery (the “Terminal”) for Premcor’s non-exclusive use adequate tanks for the storage of the Inhaul Products (the “Tanks”). PBF reserves the right to make movements of Inhaul Products among the Tanks for operational purposes, provided such movements do not cause any interference in the Inhaul Services and Premcor does not incur any additional obligations as a result of the movement. Premcor shall also have the non-exclusive use of the other terminal facilities (the “Facilities”), other than the Tanks, consisting of the Docks, pipelines, gauges, pumps and related appurtenances sufficient to receive Inhaul Products from the Docks into the Tanks and thereafter deliver such Inhaul Products from the Tanks to the Truck Rack. The Terminal and Facilities shall be available and accessible for Vessel receipt and carrier shipments twenty-four (24) hours per day, seven (7) days per week. During the Term of this Agreement, all such Facilities shall be maintained by PBF at its cost and expense consistent with good industry practice.

c. Inhaul Product Specifications. The Inhaul Products received at the Terminal hereunder for delivery into the Tanks shall meet the minimum specifications and properties set forth herrein (the “Inhaul Product Specifications”) as may be modified from time to time with the mutual, written consent of the Parties. PBF shall have no obligation to receive and handle any Premcor’s Inhaul Products which do not meet the Inhaul Product Specifications. PBF or any of its Affiliates may impose other limitations on the Inhaul Product delivered to the Terminal in order to (i) comply with Applicable Laws, including environmental permits, (ii) protect health and safety, and (iii) protect the pumps, pipes, tanks, and other equipment at the Terminal.

d. Sampling and Testing. PBF may sample and test (or cause to be sampled and/or tested) any Inhaul Product being delivered into or stored at the Terminal in order to verify Premcor’s compliance with this Agreement and to maintain the quality of the Inhaul Products and other products at the Terminal. If the Inhaul Products do not meet the Inhaul Product Specifications when delivered to the Terminal, Premcor will be responsible for the cost of all sampling, testing, handling, blending and removal conducted by or on behalf of PBF. Testing conducted by or on behalf of PBF will be done in accordance with then-current ASTM procedures. PBF will provide (or arrange to provide) Premcor with a copy of any testing reports produced or obtained by PBF regarding any Inhaul Product.

e. Blending and Additives.

 

  i.

Ethanol Blend Quality. Upon and in accordance with the request from Premcor and at the time of loading into Carriers, PBF shall blend ethanol into gasoline. PBF shall maintain records required of the terminal operator to comply with Applicable Law, including, but not limited to, the United States Environmental Protection Agency (“EPA”) regulations with

 

3


  regards to ethanol. PBF shall, upon request, provide Premcor with copies of said documentation. For Inhaul Products blended with ethanol hereunder, PBF shall be the blender of record and retain the “RINS” applicable to such Inhaul Products. Additionally, Premcor agrees to execute such documentation that is reasonably necessary to evidence the same.

 

  ii. Generic Gasoline Additive Injection. PBF shall provide a generic additive injection service, including all required reporting and record keeping prescribed by Applicable Law. The additive supplied will be an EPA certified deposit control additive, and PBF will ensure that such additive is injected into all appropriate gasoline products delivered to Premcor in such quantities required by Applicable Law. Notwithstanding the above, Premcor shall be solely responsible for registering with the EPA or any other governmental agency its use of PBF’s generic additive in its fuels, as required by Applicable Law.

 

  iii. Lubricity Additive injection. PBF will provide or cause to be provided Lubricity Additive to be injected into all Premcor’s ULSD delivered at the Truck Rack. PBF shall inject the Lubricity Additive into Premcor’s ULSD in sufficient quantities to cause Premcor’s ULSD to comply with the lubricity requirements of ASTM D 975 or the current ASTM standard should it be changed in the future.

 

  iv. Red Dye Injection. PBF will provide or cause to be provided a generic red dye to be injected, when requested by Premcor, into Premcor’s ULSD delivered at the Truck Rack at or above minimum injection rates specified by the Internal Revenue Service.

 

  v. Additive Records and Audit Rights. PBF will retain all product transfer documents, additive system calibration records, and all other required records relating to the Inhaul Services for the minimum period required by Applicable Law. Each party and its duly authorized representatives shall have access during customary business hours to the accounting records and other documents maintained by the other Party which relate to the injection of additives and blending of ethanol hereunder and shall have the right to audit such records at any reasonable time or times within two (2) years after the delivery/receipt of Inhaul Products provided for in this Agreement, subject to reasonable confidentiality obligations.

f. Fees. As described above in Exhibit A. For Tug Assists – will be hired and paid for directly by Premcor.

g. Taxes. Any Taxes assessed by any federal, state, local or other governmental authority upon or as a result of the ownership, transportation, storage, sale, removal or withdrawal of any Inhaul Products or the Inhaul Services provided by PBF hereunder, shall be borne and paid for by Premcor, except to the extent any such taxes are, by law,

 

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required to be paid directly by PBF, in which event, such taxes (including penalty and interest if imposed by the taxing authority) shall be paid by PBF and reimbursed by Premcor. The above notwithstanding, PBF shall remain liable for and Premcor shall have no obligation to reimburse PBF for (i) any taxes imposed on or calculated based upon profits; (ii) any taxes measured by capital value or net worth of PBF; (iii) any ad valorem or personal property taxes on the Terminal or the property of PBF, unless any of the taxes referenced in (i) through (iii) are expressly substituted for the taxes that Premcor is otherwise obligated pay pursuant to this subsection 2(g).

h. Title and Risk of Loss. Title to Premcor’s Inhaul Product will remain with Premcor at all times (unless conveyed to MSCG as set forth above) subject to any warehouseman’s lien in favor of PBF created pursuant to the terms of this Agreement. For Vessel receipts at the Terminal, custody of Inhaul Products shall pass to PBF upon receipt at the Terminal when the Inhaul Product passes the last permanent Vessel flange into the Vessel’s discharge hoses and the receiving manifold at the Terminal. When Inhaul Products are delivered to Premcor at the Truck Rack, custody of the Inhaul Products shall pass back to Premcor when the Inhaul Product passes the last permanent flange connection between the truck or tanker truck of Premcor’s Carrier and PBF’s loading assembly.

i. Inhaul Product Measurement. PBF will measure the quantity of the Product received and delivered at the Terminal in accordance with API procedures, including temperature correction to 60° Fahrenheit, and measurements made by PBF will be binding on Premcor absent fraud or manifest error. Premcor may witness, or appoint an inspector reasonably acceptable to PBF to witness, measurements taken by PBF. The following measurement methods will apply:

 

  i. Carrier. PBF will measure the quantity of Inhaul Product received and delivered at the Terminal by Carrier using one of the following methods, in descending order of preference: (a) truck rack meter, if available; (b) scale, if available; or (c) by gauging the Terminal’s Tanks.

 

  ii. Vessel. PBF will measure the quantity of Product received at the Terminal by Vessel by using one of the following methods, in descending order of preference: (a) shore meter, if available; (b) gauging the Terminal’s Tanks, or (c) the Vessel volume with qualified VEF will apply with qualified load VEF when Vessel receives and qualified discharge VEF when Vessel delivers. All deliveries of Product to the Terminal by Vessel shall be on Vessels vetted by Premcor.

All meters, provers and other gauging equipment owned and operated by PBF shall be operated and maintained in good working condition by PBF, at PBF’s sole cost and expense, in accordance with API’s Manual of Petroleum Measurement Standards, as may be amended by API from time to time. With reasonable advance notice, such equipment may be inspected and tested at any and all reasonable times, at Premcor’s sole cost and expense, by any duly authorized representative of Premcor.

 

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j. Tank Bottoms. Premcor will provide any tank bottoms for Inhaul Product at the Terminal.

k. Product Loss.

 

  i. Except for normal handling and evaporation losses which are provided for in Section 4(k)(iii) below, and subject to the remedies and limitations set forth in Section 4(k)(ii) below, PBF will only be liable to Premcor for any contamination, damage, degradation, misdelivery or loss of Inhaul Product while such Inhaul Product is in the custody of PBF, unless PBF establishes that any such contamination, damage, degradation, misdelivery or loss was not the result of PBF’s or its employee’s, contractor’s or agent’s, negligence, willful misconduct or breach of this Agreement, provided, however, Premcor must make any claims for the contamination, damage, degradation misdelivery, or loss of Inhaul Product by notice to PBF within ninety (90) days of the date that Premcor knew or should have known of the contamination, damage, degradation, misdelivery or loss, absent fraud. If pursuant to this Section 4(k), PBF is liable for Premcor’s claim for contamination, damage, degradation, misdelivery, or loss of Inhaul Product, at PBF’s option, PBF will either (1) replace Product of like kind and quality at the Terminal or some agreed location, (2) reimburse Premcor for the value of the Inhaul Product so contaminated or lost, or (3) restore Product to receipt quality.

 

  ii. PBF’s liability arising out of the contamination, damage, degradation, misdelivery or loss of Inhaul Product will not exceed the fair market value for an equivalent quantity of undamaged Inhaul Product less (except in the case of normal handling and evaporation losses): the fair market salvage value of the contaminated, damaged, or degraded Inhaul Product. Fair market value will be determined using the Argus posted price, as applicable, based on the seven (7) day wrap average price around the date the loss occurred, which shall mean the average of the applicable posted prices for the three (3) days prior to, the day of, and the three (3) days after, the date the loss occurred. The seven (7) day wrap average price shall be calculated for the seven (7) consecutive days on which Argus post prices for the Inhaul Product. In the event Argus does not post a price for the relevant Inhaul Product, the Parties will select a mutually agreeable price proxy for the purposes of determining fair market value.

 

  iii.

PBF shall only be responsible to Premcor for normal handling and evaporation losses in excess of one-half of one percent (0.5%) of the quantity of Inhaul Products received at the Terminal for Premcor’s account during such calendar year (the “Loss Allowance”). As soon as reasonably possible after the end of each month during the Term of this Agreement, PBF shall account to Premcor for the Inhaul Products so received by custody transfer document based on mode of delivery during the previous month. PBF shall be liable to Premcor, as is hereafter provided, for the

 

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  net difference between all quantities of Premcor’s Inhaul Products so received at the Terminal and the quantities of all of Premcor’s Inhaul Products in inventory and loaded out of the Terminal during such month, less the Loss Allowance and the quantity of any such petroleum products reasonably used for line flushings, rack meter provings, product downgrades upon receipt, or product sampling in connection with the operations conducted by PBF. PBF shall account to Premcor as soon reasonably possible after the earlier of the termination of this Agreement or expiration of the Terminal Period.

l. Invoices. PBF shall submit a weekly summary invoice, together with such information as the Parties mutually agree is necessary to substantiate the invoices to Premcor for all Products delivered to Premcor during each one week billing period within two (2) Business Days after the end of each such billing period, and Premcor agrees to pay PBF within three (3) Business Days of receipt of any such invoice. Each such weekly invoice will be based upon on weekly cycles (Monday through Sunday) during the month. The first and last cycle will start on the first day of the month and end on the last day of the month. If the first day of the month is not a Monday, the cycle will start on the first calendar day and end on Sunday. If the last day of the month is not a Sunday, the final cycle will end on the last calendar day. Each invoice shall, with respect to the relevant billing period, include all bills of lading, quantity, Product type, and grade of products nominated by Premcor and delivered by the PBF with the prices applicable for these Products and quantities. PBF shall deliver each invoice to Premcor via facsimile or electronic transmission, unless otherwise agreed by the Parties. The Parties agree to work together in good faith to arrange for each invoice to be sent via electronic data interchange (“EDI”).

m. Invoice Address. Until such times that the Parties use EDI, all invoices shall be transmitted to the following address:

The Premcor Refining Group Inc.

One Valero Way

Mail Station F3R-118B

San Antonio, Texas 78249

Attention: Bulk Finished Product Accounting – Carrie Tate

Telephone: (210) 345-2051

Facsimile: (210) 444-8512

n. Nominations and Demurrage on Trucks and Vessels.

 

  i. Premcor will arrange with PBF for the delivery of all Inhaul Products at the Docks by one or more Vessels nominated by Premcor which have been vetted and otherwise approved in advance by PBF in accordance with the terms of this Agreement. All movements and receipts or deliveries of the Inhaul Products hereunder, whether by tank transfer, tank truck, or Vessel, shall be on a nonpreferential, first come/first served basis, and PBF shall not be responsible for any loss, damage, demurrage, or expense due to delay in loading or unloading the Inhaul Products, except for any delays caused by PBF’s negligence or intentional misconduct.

 

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  ii. Premcor shall exercise reasonable business efforts to give PBF at least the advance notice specified in Appendix 2 of the arrival of each Vessel and each barge making deliveries of Inhaul Products into the Terminal, specifying the quantity and nature of Inhaul Products into the storage hereunder. Such Vessels will be accommodated with every vessel using the Terminal in the order of arrival. Vessels loading or discharging for Premcor’s account will be subject to PBF’s applicable dock rules as they may be in effect from time to time and such Vessels will proceed to and from the Docks with promptness and dispatch. The tankers, barges and vessels will load or unload, as the case may be, on a continuous basis.

 

  iii. Premcor acknowledges that the berthing of Vessels at the Docks is subject to the limitations, restrictions, instructions and directives of the local port and harbor authorities. Subject to such limitations as may be imposed by those government agencies, PBF will reasonably cooperate with Premcor to assist Premcor in avoiding or minimizing such costs, including, giving priority to the unloading of Product out of Vessels incurring demurrage charges as and when reasonable under the circumstances and maintaining service to all customers including Premcor on a first come/first served basis.

 

  iv. Additional conditions concerning Vessels into or from the Refinery shall be in accordance with the Marine Terms and Conditions attached to the Agreement as Appendix 2.

 

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APPENDIX 2

MARINE TERMS AND CONDITIONS

 

1. Pre-Arrival Information

The Customer shall:

 

  A. The Customer shall also give notice in writing to the Owner of the ETA of any scheduled vessel or barge at 72, 48, 24 and 6 hours before the expected arrival at the Owner’s facility.

 

  B. The Customer shall promptly notify the Owner in writing about a new ETA if the ETA advances or recedes by two (2) hours or more after the twenty-four (24) hour ETA notice has been given.

 

  C. The Customer shall furnish, as reasonably requested by the Owner, additional data in writing, about the vessel or barges dimensions, seaworthiness, equipment and certificates, as well as the nature and estimated duration of the anticipated cargo handling and other operations at the Owner’s facility, such information to be actually received by the Owner not later than twenty-four (24) hours before the vessel’s arrival at the Owner’s facility. The Customer shall supply to the Owner copies of Bills of Lading, Material Safety Data Sheets (MSDS) or other shipping papers as reasonably requested by the Owner.

 

  D. The Customer shall exercise reasonable diligence to ensure that the vessel they have nominated has passed the Customer’s vetting procedures. The Owner maintains the right to refuse docking of a vessel if it reasonably deems that vessel to be unsafe.

 

2. Vessel Requirements

Owner will not unreasonably reject a vessel nomination. Vessel acceptance or rejection shall be communicated by Owner to Customer within a reasonable time frame. Additionally:

 

  A. The Customer shall exercise reasonable diligence to ensure that, throughout the cargo transfer operation, the vessel or barge shall fully comply, or hold authorized waivers for non-compliance, with all applicable U.S. Coast Guard regulations in effect as of the date vessel berths.

 

  B. The Customer shall exercise reasonable diligence to ensure that the vessel complies with the U.S. Federal Water Pollution Control Act, as amended, the U.S. Federal Oil Pollution Control Act of 1990 (OPA90) and regulations issued pursuant thereto effective during the term of this Agreement, and have secured and carry onboard the vessel a current U.S. Coast Guard Certificate of Financial Responsibility (COFR)(Water Pollution).

 

3. Docked Vessel Operations

The Owner may instruct the Customer’s marine vessel or barge to vacate her berth if it appears that the vessel will not, because of disability or any other cause on the part of the vessel, be able to complete loading or discharge in a timely matter or if the vessel fails to comply with the Owner’s rules and regulations or there is a deficiency in the vessel’s safety or environmental systems. If the vessel does not vacate the berth following said instructions, the Customer agrees to reimburse the Owner for any consequential claims the Owner is required to pay other parties upon receipt of proper supporting documents.

 

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4. Safe Berth and Passage

 

  A. The Owner warrants a safe berth to which the vessel may proceed to, lie at, and depart from always safely afloat. However, if the vessel cannot, in the Owner’s sole opinion, maintain its mooring safely at the dock, then the Owner at its sole discretion may order hold-in tugs, and the cost of such tugs shall be for the Customer’s account. Dockage and service fees, including mooring, booming, fresh water, steam and oily slops receipts will be charged to the Customer. In addition, all duties and other charges on the vessel, including, without limitation, those incurred for tugs and pilots, and other port costs shall be for the Customer’s account.

 

  B. Notwithstanding anything contained in this clause or Agreement, the Owner does not warrant the safety or draft of public channels, fairways, approaches thereto, anchorages or other publicly-maintained area either inside or outside the port area where the vessel may be directed. Owner shall not be liable for (i) any loss, damage, injury or delay to vessel resulting from the use of such waterways not caused by the Owner’s fault or negligence or which could have been avoided by the exercise of reasonable care on the part of the vessel or its master, or (ii) any damage to vessel’s at the Owner’s facility caused by other vessels passing in the waterway.

 

5. Drug and Alcohol

 

  A. Customer shall exercise reasonable diligence to ensure that the owners of barges and U.S. flag vessels have in force a Drug and Alcohol Policy that meets or exceeds the standards set forth by the U.S. Coast Guard Regulations, and any other applicable federal, state or local laws.,

 

  B. Customer shall exercise reasonable diligence to ensure that the owners of non U.S. flag vessels or barges have in force a Drug and Alcohol Policy that meets or exceeds the standards set forth by their flag state and also meets or exceeds the standards set forth in the most recent edition of the “Guidelines for the Control of Drugs and Alcohol on Board Ships” as published by the Oil Companies International Marine Forum (OCIMF).

 

6. Shore Tank Availability

Owner has the right to restrict or modify berthing times based on the availability of shore tank ullage. Owner will make every effort to communicate to the Customer any anticipated issues with shore tank or ullage availability but it shall be the Customer’s responsibility to monitor and manage Customer’s leased tankage to ensure ullage is available for marine receipts. Any costs related to berthing time changes due to ullage availability will be to Customer’s account.

 

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APPENDIX 3

CARRIER ACCESS AGREEMENT

DELAWARE CITY REFINING COMPANY LLC.

CUSTOMER FACILITY ACCESS AGREEMENT

This Customer Facility Access Agreement (the “Agreement”) is entered into as of this      day of         , 2010, by and between Delaware City Refining Company LLC., with its principal business address at XXX Greenwich, CT 06870 hereinafter referred to as “Company,” and THE PREMCOR REFINING GROUP INC., with its principal business address at One Valero Way, San Antonio, Texas 78249, hereinafter referred to as “Customer.”

Customer’s Federal Employer Identification Number (FEIN) is                             .

Customer’s phone # is                             and fax # is                             , contact person is                             , and SCAC code number is                             .

Company owns and operates a petroleum terminal at its Delaware City refinery with equipment for loading and unloading products into or from transport trucks, hereinafter identified as “Terminal”.

Company and Customer have entered into a Offtake and Exchange Agreement dated                     (the “Offtake Agreement”) whereby Company and Customer have agreed to exchange and certain petroleum products described therein (hereinafter referred to as “Products”).

Customer and its Carriers and agents it has designated on the attached “Exhibit A,” hereinafter referred to as “Agents,” desire access to the Terminal for purposes of transporting Products to and from the Terminal.

Now, therefore, in consideration of the mutual covenants and agreements hereinafter set forth to be faithfully kept and performed, the receipt and adequacy of which is expressly agreed to, the parties hereto agree as follows:

 

1. Any terms which are not defined herein shall have the same meaning given such term in the Offtake Agreement.

 

2. Each of the Agents designated by Customer on Exhibit A shall sign a Carrier Terminal Access and Loading Agreement, in the form of Exhibit B, prior to being granted access to the Terminal.

 

3. This Agreement shall continue during the term of the Agreement or during the entire term any Exhibit B entered into by an Agent and any renewals or extensions thereof or until Company receives written notice of termination of an Agent by the Customer.

 

4. Pursuant to the Offtake Agreement, Company reserves the right to revoke access at any time. Access to the Terminal is not transferrable. Agents may not be added to this Agreement except upon written amendment.

 

5. This Agreement shall be governed pursuant to the terms and conditions of the Offtake Agreement.


In Witness whereof, this Agreement is executed as of the day and year first above written.

 

DELAWARE CITY REFINING COMPANY LLC.
By:  

 

Printed Name:  

 

Title:  

 

Customer:   THE PREMCOR REFINING GROUP INC.
By:  

 

Printed Name:  

 

Title:  

 

[Signature page to Customer Facility Access Agreement]


Exhibit A

To

Customer Facility Access Agreement

The following are designated Agents of the Customer

Alger Oil

Allied Energy Inc

Baltimore Tank Lines

Besche Oil Co Inc

Biggs Fuel Company, Inc.

BRT-Buck Run Transpor

Butler Fuel & Son’s Inc

Cato Inc.