AMENDED AND RESTATED SUPPLY AND OFFTAKE AGREEMENT dated as of MAY 26, 2010 between J. ARON & COMPANY and ALON REFINING KROTZ SPRINGS, INC.

Exhibit 10.6

Execution Version

AMENDED AND RESTATED

SUPPLY AND OFFTAKE AGREEMENT

dated as of MAY 26, 2010

between

X. XXXX & COMPANY

and

ALON REFINING XXXXX SPRINGS, INC.

TABLE OF CONTENTS


	Page
ARTICLE 1 DEFINITIONS AND CONSTRUCTION		1

ARTICLE 2 CONDITIONS TO COMMENCEMENT		13

ARTICLE 3 TERM OF AGREEMENT		16

ARTICLE 4 COMMENCEMENT DATE TRANSFER		17

ARTICLE 5 SUPPLY OF CRUDE OIL		17

ARTICLE 6 PURCHASE PRICE FOR CRUDE OIL		25

ARTICLE 7 TARGET INVENTORY LEVELS AND WORKING CAPITAL ADJUSTMENT		25

ARTICLE 8 PURCHASE AND DELIVERY OF PRODUCTS		29

ARTICLE 9 ANCILLARY COSTS; MONTH END INVENTORY; CERTAIN DISPOSITIONS		31

ARTICLE 10 PAYMENT PROVISIONS		32

ARTICLE 11 INDEPENDENT INSPECTORS; STANDARDS OF MEASUREMENT		36

ARTICLE 12 FINANCIAL INFORMATION; CREDIT SUPPORT; AND ADEQUATE ASSURANCES		36

ARTICLE 13 REFINERY TURNAROUND, MAINTENANCE AND CLOSURE		39

ARTICLE 14 TAXES		39

ARTICLE 15 INSURANCE		40

ARTICLE 16 FORCE MAJEURE		41

ARTICLE 17 REPRESENTATIONS, WARRANTIES AND COVENANTS		42

ARTICLE 18 DEFAULT AND TERMINATION		45

ARTICLE 19 SETTLEMENT AT TERMINATION		50

ARTICLE 20 INDEMNIFICATION		54

ARTICLE 21 LIMITATION ON DAMAGES		55

ARTICLE 22 AUDIT AND INSPECTION		55

ARTICLE 23 CONFIDENTIALITY		55

ARTICLE 24 GOVERNING LAW		56

ARTICLE 25 ASSIGNMENT		57

ARTICLE 26 NOTICES		57

ARTICLE 27 NO WAIVER, CUMULATIVE REMEDIES		57

-i-

TABLE OF CONTENTS
(continued)


	Page
ARTICLE 28 NATURE OF THE TRANSACTION AND RELATIONSHIP OF PARTIES		58

ARTICLE 29 MISCELLANEOUS		58

-ii-

Schedules


Schedule		Description
Schedule A		Products and Product Specifications

Schedule B		Pricing Benchmarks

Schedule C		Monthly True-up Amounts

Schedule D		Operational Volume Range

Schedule E		Tank List

Schedule F		Insurance

Schedule G		Weekly Production and Invoice Schedule

Schedule H		Form of Tank-Balance Volume Report

Schedule I		Initial Target Month End Crude Volume

Schedule J		Scheduling and Communications Protocol

Schedule K		Monthly Excluded Transaction Fee Determination

Schedule L		Monthly Working Capital Adjustment

Schedule M		Notices

Schedule N		FIFO Balance Final Settlements

Schedule O		Form of Run-out Report

Schedule P		Pricing Group

Schedule Q		Form of Trade Sheet

Schedule R		Form of Step-out Inventory Sales Agreement

Schedule S		Form of Production Report

SUPPLY AND OFFTAKE AGREEMENT

This Amended and Restated Supply and Offtake Agreement (this “Agreement”) is made as of May 26, 2010 (the “Effective Date”), between X. Xxxx & Company (“Xxxx”), a general partnership organized under the laws of New York and located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, and Alon Refining Xxxxx Springs, Inc. (the “Company”), a Delaware corporation located at Xxx. 000 Xxxxx, Xxxxx Springs, Louisiana 70750-0453 (each referred to individually as a “Party” or collectively as the “Parties”).

WHEREAS, the Company owns and operates a crude oil refinery located in Xxxxx Springs, Louisiana for the processing and refining of crude oil and other petroleum feedstocks and the recovery therefrom of refined products;

WHEREAS, the Company and Xxxx are parties to a Supply and Offtake Agreement, (the “Original Agreement”) dated as of April 21, 2010, pursuant to which Xxxx agreed to deliver crude oil and other petroleum feedstocks to the Company for use at such refinery and purchase all refined products produced by the refinery (other than certain excluded products); and

WHEREAS, the Parties now wish to amend and restate the Original Agreement in its entirety as more specifically set forth herein.

NOW, THEREFORE, in consideration of the premises and respective promises, conditions, terms and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties do agree that the Original Agreement is hereby amended and its entirety as of the date hereof and as follows:

ARTICLE 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:

“Actual Month End Crude Volume” has the meaning specified in Section 9.2(a).

“Actual Month End Product Volume” has the meaning specified in Section 9.2(a).

“Actual Net Crude Consumption” means, for any Delivery Month, the actual number of Crude Oil Barrels run by the Refinery for such Delivery Month minus the number of Other Barrels actually delivered into the Crude Storage Tanks during such Delivery Month.

“Additional Procurement Contract” means any Crude Oil purchase agreement between Xxxx and a Third Party Supplier entered into following the Commencement Date pursuant to Section 5.3(b).

“Adequate Assurance” has the meaning specified in Section 12.5.

“Affected Party” has the meaning specified in Section 16.1.

“Affected Obligations” has the meaning specified in Section 16.3.

“Affiliate” means, in relation to any Person, any entity controlled, directly or indirectly, by such Person, any entity that controls, directly or indirectly, such Person, or any entity directly or indirectly under common control with such Person. For this purpose, “control” of any entity or Person means ownership of a majority of the issued shares or voting power or control in fact of the entity or Person.

“Agreement” or “this Agreement” means this Amended and Restated Supply and Offtake Agreement, as may be amended, modified, supplemented, extended, renewed or restated from time to time in accordance with the terms hereof, including the Schedules hereto.

“Ancillary Costs” means all freight, pipeline, transportation, storage, tariffs and other costs and expenses incurred as a result of the purchase, movement and storage of Crude Oil or Products undertaken in connection with or required for purposes of this Agreement (whether or not arising under Procurement Contracts), including, ocean-going freight and other costs associated with waterborne movements, inspection costs and fees, wharfage, port and dock fees, vessel demurrage, lightering costs, ship’s agent fees, import charges, waterborne insurance premiums, fees and expenses, broker’s and agent’s fees, load port charges and fees, pipeline transportation costs, pipeline transfer and pumpover fees, pipeline throughput and scheduling charges (including any fees and charges resulting from changes in nominations undertaken to satisfy delivery requirements under this Agreement), pipeline and other common carrier tariffs, blending, tankage, linefill and throughput charges, pipeline demurrage, superfund and other comparable fees, processing fees (including fees for water or sediment removal or feedstock decontamination), merchandise processing costs and fees, importation costs, any charges imposed by any Governmental Authority (including Transfer Taxes (but not taxes on the net income of Xxxx) and customs and other duties), user fees, fees and costs for any credit support provided to any pipelines with respect to any transactions contemplated by this Agreement and any pipeline compensation or reimbursement payments that are not timely paid by the pipeline to Xxxx. Notwithstanding the foregoing, (i) Aron’s hedging costs in connection with this Agreement or the transactions contemplated hereby shall not be considered Ancillary Costs (but such exclusion shall not change or be deemed to change the manner in which Related Xxxxxx are addressed under Articles 18 and 19 below) and (ii) any Product shipping costs of Xxxx, to the extent incurred after Xxxx has removed such Product from the Product Storage Tanks for its own account, shall not be considered Ancillary Costs.

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

“Assigned Sales Commitment” has the meaning specified in Section 8.8(a).

“Bankrupt” means a Person that (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 a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditor’s 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 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 foregoing events, (x) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy under any bankruptcy or insolvency law or other similar law affecting creditors’ rights and such proceeding is not dismissed within fifteen (15) days or (xi) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing events.

“Bankruptcy Code” means chapter 11 of Title 11, U.S. Code.

“Barrel” means forty-two (42) net U.S. gallons, measured at 60° F.

“Base Price” has the meaning specified in Section 6.2.

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in the State of New York.

“Commencement Date” has the meaning specified in Section 2.3(a).

“Commencement Date Crude Oil Volumes” means the total quantity of Crude Oil owned by the Company at 00:00:01 a.m., CPT, on the Commencement Date that is then held at Crude Storage Tanks, which quantity shall be the volume of Crude Oil recorded in the Inventory Report prepared pursuant to the Inventory Sales Agreement.

“Commencement Date Purchase Value” means, with respect to the Commencement Date Volumes, initially the Estimated Commencement Date Value until the Definitive Commencement Date Value has been determined and thereafter the Definitive Commencement Date Value.

“Commencement Date Products Volumes” means the total quantities of the Products owned by the Company at 00:00:01 a.m., CPT, on the Commencement Date that are then held at Product Storage Tanks, which quantities shall be the volume of Products recorded in the Inventory Report prepared pursuant to the Inventory Sales Agreement.

“Commencement Date Volumes” mean, collectively, the Commencement Date Crude Oil Volumes and the Commencement Date Products Volumes.

“Company Purchase Agreement” has the meaning specified in the Marketing and Sales Agreement.

“Contract Cutoff Date” means, with respect to any Procurement Contract, the date and time by which Xxxx is required to provide its nominations to the Third Party Supplier thereunder for the next monthly delivery period for which nominations are then due.

“Contract Nomination” has the meaning specified in Section 5.4(b).

“CPT” means the prevailing time in the Central time zone.

“Crude Delivery Point” means the outlet flange of the Crude Storage Tanks.

“Crude Intake Point” means the inlet flange of the Crude Storage Tanks.

“Crude Oil” means all crude oil that Xxxx purchases and sells to the Company or for which Xxxx assumes the payment obligation pursuant to any Procurement Contract.

“Crude Storage Tanks” means any of the tanks adjacent to the Refinery, listed on Schedule E hereto that store Crude Oil.

“Default” means any event that, with notice or the passage of time, would constitute an Event of Default.

“Default Interest Rate” means the lesser of (i) the per annum rate of interest calculated on a daily basis using the prime rate published in the Wall Street Journal for the applicable day (with the rate for any day for which such rate is not published being the rate most recently published) plus two hundred (200) basis points and (ii) the maximum rate of interest permitted by Applicable Law.

“Defaulting Party” has the meaning specified in Section 18.2.

“Deferred Portion” has the meaning specified in Section 4.3.

“Definitive Commencement Date Value” has the meaning specified in the Inventory Sales Agreement.

“Delivery Date” means any calendar day.

“Delivery Month” means the month in which Crude Oil is to be delivered to the Refinery.

“Designated Affiliate” means in the case of Aron, Goldman, Sachs & Co.

“Disposed Quantity” has the meaning specified in Section 9.3.

“Disposition Amount” has the meaning specified in Section 9.3.

“Early Termination Date” has the meaning specified Section 18.2(c).

“Effective Date” has the meaning specified in the introductory paragraph of this Agreement.

“Environmental Law” means any existing or past Applicable 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.

“Estimated Commencement Date Value” has the meaning specified in the Inventory Sales Agreement.

“Estimated Termination Amount” has the meaning specified in Section 19.2(b).

“Estimated Yield” has the meaning specified in Section 8.3(a).

“Event of Default” means an occurrence of the events or circumstances described in Section 18.1.

“Excluded Materials” means any refined petroleum products other than those that are Products.

“Excluded Transactions” has the meaning specified in the Marketing and Sales Agreement.

“Existing Sales Commitments” has the meaning specified in Section 8.8(a).

“Existing Procurement Contract” means such crude oil purchase agreement, dated as of the Commencement Date, between Chevron and Xxxx having such terms and conditions as Xxxx shall deem acceptable.

“Expiration Date” has the meaning specified in Section 3.1.

“Extension Term” has the meaning specified in Section 3.2.

“Fed Funds Rate” means, for any Notification Date, the rate set forth in H.15(519) or in H.15 Daily Update for the most recently preceding Business Day under the caption “Federal funds (effective)”; provided that if no such rate is so published for any of the immediately three preceding Business Days, then such rate shall be the arithmetic mean of the rates for the last transaction in overnight Federal funds arranged by each of three leading brokers of U.S. dollar Federal funds transactions prior to 9:00 a.m., CPT, on that day, which brokers shall be selected by Xxxx in a commercially reasonable manner. For purposes hereof, “H.15(519)” means the weekly statistical release designated as such, or any successor publication, published by the Board of Governors of the Federal Reserve System, available through the worldwide website of

the Board of Governors of the Federal Reserve System at xxxx://xxx.xxxxxxxxxxxxxx.xxx/xxxxxxxx/x00/, or any successor site or publication and “H.15 Daily Update” means the daily update of H.15(519), available through the worldwide website of the Board of Governors of the Federal Reserve System at xxxx://xxx.xxxxxxxxxxxxxx.xxx/xxxxxxxx/x00/xxxxxx/, or any successor site or publication.

“Force Majeure” means any cause or event reasonably beyond the control of a Party, 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 and whether or not involving employees of the Company or Xxxx); 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, explosions or accidents to xxxxx, storage plants, 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 any other cause reasonably beyond the control of a Party, whether similar or dissimilar to those above and whether foreseeable or unforeseeable, which, by the exercise of due diligence, such Party could not have been able to avoid or overcome. Solely for purposes of this definition, the failure of any Third Party Supplier to deliver Crude Oil pursuant to any Procurement Contract, whether as a result of Force Majeure as defined above, breach of contract by such Third Party Supplier or any other reason, shall constitute an event of Force Majeure for Xxxx under this Agreement with respect to the quantity of Crude Oil subject to that Procurement Contract.

“GAAP” means generally accepted accounting principles in the United States.

“Governmental Authority” means any federal, state, regional, local, or municipal 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.

“HLS” means heavy Louisiana sweet.

“Included Sales” has the meaning specified in Section 7.4.

“Included Transactions” has the meaning specified in the Marketing and Sales Agreement.

“Independent Inspection Company” has the meaning specified in Section 11.3.

“Initial Estimated Yield” has the meaning specified in Section 8.3(a).

“Initial Term” has the meaning specified in Section 3.1.

“Inventory Sales Agreement” means the purchase and sale agreement, in a form and substance mutually agreeable to the Parties, dated as of the Commencement Date, pursuant to which the Company is selling and transferring to Xxxx the Commencement Date Volumes for the Commencement Date Purchase Value, free and clear of all liens, claims and encumbrances of any kind.

“Latest Commencement Date” has the meaning specified in Section 2.3(a).

“LC Default” means, as of any time, that (i) the Standby LC has then ceased to be in effect, (ii) the issuer of the Standby LC (if such issuer is not an Affiliate of Xxxx) has failed to honor a drawing made by Xxxx or has otherwise failed to comply with or perform its obligations thereunder if such failure shall be continuing after the lapse of any applicable grace period or (iii) an LC Event has occurred with respect to the Standby LC and such Standby LC has not been renewed, extended, amended or replaced as provided in Section 12.6 below at least 15 days prior to its then current expiry date.

“LC Event” means, as of any time, (i) if the issuer of Standby LC is not an Affiliate of Xxxx, that (a) the issuer of the Standby LC ceases to be rated at least “A-” by S&P or “A3” by Xxxxx’x, (b) the issuer of such Standby LC shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Standby LC or (c) any Bankruptcy shall occur with respect to the issuer of such Standby LC; or (ii) in any case, that (a) the Standby LC is then due to expire in less than 90 days or (b) the available amount of the Standby LC is less than the Required Available Amount.

“Letter of Credit” shall mean the Standby LC or any other letter of credit provided to Xxxx as credit support in connection with this Agreement or any of the transactions contemplated hereby.

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

“Liquidated Amount” has the meaning specified in Section 18.2(b).

“LLS” means light Louisiana sweet.

“Long Product FIFO Price” means the price so listed on Schedule B hereto.

“Marketing and Sales Agreement” means the products marketing and sales agreement, dated as of the Commencement Date, between the Company and Xxxx pursuant to which the Product purchased by Xxxx hereunder shall from time to time be marketed and sold by the Company for Aron’s account.

“Material Adverse Change” means a material adverse effect on and/or material adverse change with respect to (i) the business, operations, properties, assets or financial condition of the

Company and its Subsidiaries taken as a whole; (ii) the ability of the Company to fully and timely perform its obligations; (iii) the legality, validity, binding effect or enforceability against the Company of any of the Transaction Documents; or (iv) the rights and remedies available to, or conferred upon, Xxxx hereunder; provided that none of the following changes or effects shall constitute a “Material Adverse Effect”: (1) changes, or effects arising from or relating to changes, of Laws, that are not specific to the business or markets in which the Company operates; (2) changes arising from or relating to, or effects of, the transactions contemplated by this Agreement or the taking of any action in accordance with this Agreement; (3) changes, or effects arising from or relating to changes, in economic, political or regulatory conditions generally affecting the U.S. economy as a whole, except to the extent such change or effect has a disproportionate effect on the Company relative to other industry participants; (4) changes, or effects arising from or relating to changes, in financial, banking, or securities markets generally affecting the U.S. economy as a whole, (including (a) any disruption of any of the foregoing markets, (b) any change in currency exchange rates, (c) any decline in the price of any security or any market index and (d) any increased cost of capital or pricing related to any financing), except to the extent such change or effect has a disproportionate effect on the Company relative to other industry participants; and (5) changes arising from or relating to, or effects of, any seasonal fluctuations in the business, except to the extent such change or effect has a disproportionate effect on the Company relative to other industry participants.

“Measured Crude Quantity” means, for any Delivery Date, the total quantity of Crude Oil that, during such Delivery Date, was withdrawn and lifted by and delivered to the Company at the Crude Delivery Point, as evidenced by either meter readings and meter tickets for that Delivery Date or tank gaugings conducted at the beginning and end of such Delivery Date.

“Measured Product Quantity” means, for any Delivery Date, the total quantity of a particular Product that, during such Delivery Date, was delivered by the Company to Xxxx at the Product Delivery Point, as evidenced by either meter readings and meter tickets for that Delivery Date or tank gaugings conducted at the beginning and end of such Delivery Date.

“Monthly Cover Costs” has the meaning specified in Section 7.5.

“Monthly Crude Forecast” has the meaning specified in Section 5.2 (b).

“Monthly Excluded Transaction Fee” has the meaning specified in Section 7.6.

“Monthly Product Estimate” has the meaning specified in Section 8.3(b).

“Monthly Product Sale Adjustment” has the meaning specified in Section 7.4.

“Monthly True-up Amount” has the meaning specified in Section 10.2(a).

“Monthly Working Capital Adjustment” is an amount to be determined pursuant to Schedule L hereto.

“Net Payment” has the meaning specified in Section 10.1(a).

“Nomination Month” means the month that occurs two (2) months prior to the Delivery Month.

“Non-Affected Party” has the meaning specified in Section 16.1.

“Non-Defaulting Party” has the meaning specified in Section 18.2(a).

“Operational Volume Range” means the range of operational volumes for any given set of associated Crude Storage Tanks for each type of Crude Oil and for any given set of associated Product Storage Tanks for each group of Products, between the minimum volume and the maximum volume, as set forth on Schedule D hereto.

“Other Barrels” has the meaning specified in Section 5.3(f).

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

“Person” means an individual, corporation, partnership, limited liability company, joint venture, trust or unincorporated organization, 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.

“Pipeline Cutoff Date” means, with respect to any Pipeline System, the date and time by which a shipper on such Pipeline System is required to provide its nominations to the entity that schedules and tracks Crude Oil and Products in a Pipeline System for the next shipment period for which nominations are then due.

“Pipeline System” means the ExxonMobil Pipeline System, Colonial Pipeline System or any other pipeline that may be used to transport Crude Oil or Products to the Crude Storage Tanks or out of the Product Storage Tanks at the Refinery.

“Pricing Benchmark” means, with respect to a particular grade of Crude Oil or type of Product, the pricing index, formula or benchmark indicated on Schedule B hereto.

“Procurement Contract” means either the Existing Procurement Contract or any Additional Procurement Contract.

“Procurement Contract Assignment” means an instrument, in form and substance reasonably satisfactory to Xxxx, by which the Company assigns to Xxxx all rights and obligations under a Procurement Contract and Xxxx assumes such rights and obligations thereunder, subject to terms satisfactory to Xxxx providing for the automatic reassignment thereof to the Company in connection with the termination of this Agreement.

“Product” means any of the refined petroleum products listed on Schedule A hereto, as from time to time amended by mutual agreement of the Parties.

“Product Cost” has the meaning specified in Section 8.7.

“Product Purchase Agreements” has the meaning specified in the Marketing and Sales Agreement.

“Product Storage Tanks” means any of the tanks adjacent to the Refinery, listed on Schedule E hereto that store Products.

“Production Week” means each consecutive day period (based on CPT) designated as a “Production Week” on Schedule G hereto (which the Parties acknowledge will not in every case be a seven day period).

“Products Delivery Point” means the inlet flange of the Product Storage Tanks.

“Products Offtake Point” means the outlet flange of the Product Storage Tanks.

“Projected Monthly Run Volume” has the meaning specified in Section 7.1(a).

“Projected Net Crude Consumption” means, for any Delivery Month, the Projected Monthly Run Volume for such Delivery Month minus the number of Other Barrels that the Company indicated it expected to deliver into the Crude Storage Tanks during such Delivery Month.

“Refinery” means the petroleum refinery located in Xxxxx Springs, Louisiana owned and operated by the Company.

“Refinery Facilities” means all the facilities owned and operated by the Company located at the Refinery, and any associated or adjacent facility that is used by the Company to carry out the terms of this Agreement, excluding, however, the Crude Oil receiving and Products delivery facilities, pipelines, tanks and associated facilities owned and operated by the Company which constitute the Storage Facilities.

“Required Available Amount” means such U.S. dollar amount as shall from time to time be specified by Xxxx; provided that in no event shall Xxxx specify an amount greater than $200 million, it being agreed that the initial Required Available Amount shall equal $200 million.

“Related Xxxxxx” means any transactions from time to time entered into by Xxxx with third parties unrelated to Xxxx or its Affiliates to hedge Aron’s exposure resulting from this Agreement or any other Transaction Document and Aron’s rights and obligations hereunder or thereunder.

“Revised Estimated Yield” has the meaning specified in Section 8.3(a).

“Run-out Report” has the meaning specified in Section 7.2(a).

“Settlement Amount” has the meaning specified in Section 18.2(b).

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

“Specified Transaction” means (a) any transaction (including an agreement with respect thereto) now existing or hereafter entered into between Xxxx and the Company (i) which is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, commodity spot transaction, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, weather swap, weather derivative, weather option, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, or forward purchase or sale of a security, commodity or other financial instrument or interest (including any option with respect to any of these transactions) or (ii) which is a type of transaction that is similar to any transaction referred to in clause (i) that is currently, or in the future becomes, recurrently entered into the financial markets (including terms and conditions incorporated by reference in such agreement) and that is a forward, swap, future, option or other derivative on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, or economic indices or measures of economic risk or value, (b) any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this agreement or the relevant confirmation.

“Standby LC” means an irrevocable standby letter of credit in favor of Xxxx (i) in a form and substance reasonably satisfactory to Xxxx, (ii) issued or confirmed by a bank that is an Affiliate of Xxxx or such other issuing bank as is acceptable to Xxxx and (iii) that otherwise satisfies the requirements of Section 12.4(a).

“Standby Letter of Credit Facility Agreement” means that certain Credit Agreement between the Company, as borrower, and the initial issuer of the Standby LC, providing for the issuance of the Standby LC dated as of the Commencement Date.

“Step-Out Inventory Sales Agreement” means the purchase and sale agreement, in a form and substance mutually agreeable to the Parties, to be dated as of the Termination Date, pursuant to which the Company shall buy Crude Oil and Products from Xxxx subject to the provisions of this Agreement.

“Storage Facilities” mean the storage, loading and offloading facilities owned or operated by the Company located at Xxxxx Springs, Louisiana, including the Crude Storage Tanks, the Product Storage Tanks and the land, piping, marine facilities, truck facilities and other facilities related thereto, together with existing or future modifications or additions, which are excluded from the definition of Refinery or Refinery Facilities. In addition, the term “Storage Facilities” includes any location where a storage facility is used by the Company to store or throughput Crude Oil or Products except those storage, loading and offloading facilities owned or operated by the Company which are used to store Excluded Materials.

“Storage Facilities Agreement” means the storage facilities agreement, dated as of the Commencement Date, between the Company and Xxxx, pursuant to which the Company shall grant to Xxxx an exclusive right to use the Storage Facilities in connection with this Agreement.

“Supplier’s Inspector” means any Person selected by Xxxx in a commercially reasonable manner that is acting as an agent for Xxxx or that (1) is a licensed Person who performs sampling, quality analysis and quantity determination of the Crude Oil and Products purchased and sold hereunder, (2) is not an Affiliate of any Party and (3) in the reasonable judgment of Xxxx, is qualified and reputed to perform its services in accordance with applicable law and industry practice, to perform any and all inspections required by Xxxx.

“Supply Cost” has the meaning specified in Section 6.2.

“Target Month End Crude Volume” has the meaning specified in Section 7.1.

“Target Month End Product Volume” has the meaning specified in Section 7.2.

“Tax” or “Taxes” has the meaning specified in Section 14.1.

“Term” means the Initial Term and any Extension Term.

“Termination Amount” means, without duplication, the total net amount owed by one Party to the other Party upon termination of this Agreement under Section 19.2.

“Termination Date” has the meaning specified in Section 19.1.

“Termination Date Purchase Value” means, with respect to the Termination Date Volumes, initially the Estimated Termination Date Value until the Definitive Termination Date Value has been determined and thereafter the Definitive Termination Date Value (as such terms are defined in the form of the Step-out Inventory Sales Agreement attached hereto as Schedule R).

“Termination Date Volumes” has the meaning specified in Section 19.1(d).

“Termination Holdback Amount” has the meaning specified in Section 19.2(b).

“Third Party Supplier” means any seller of Crude Oil under a Procurement Contract.

“Transaction Document” means this Agreement, the Marketing and Sales Agreement, the Inventory Sales Agreement, the Storage Facilities Agreement, the Step-Out Inventory Sales Agreement and any other agreements or instruments contemplated hereby or executed in connection herewith.

“Volume Determination Procedures” mean the Company’s ordinary month-end procedures for determining the volume of Crude Oil or Product held in any Storage Tank at a designated time.

“Weekly Projection” has the meaning specified in Section 5.2(a).

“Weekly Product Value” has the meaning specified in Section 10.1(d).

“Weekly Supply Value” has the meaning specified in Section 10.1(a).

1.2 Construction of Agreement.

(a) Unless otherwise specified, all references herein are to the Articles, Sections and Schedules to this Agreement, as may be from time to time amended or modified.

(b) All headings herein are intended solely for convenience of reference and shall not affect the meaning or interpretation of the provisions of this Agreement.

(c) Unless expressly provided otherwise, the word “including” as used herein does not limit the preceding words or terms and shall be read to be followed by the words “without limitation” or words having similar import.

(d) Unless expressly provided otherwise, all references to days, weeks, months and quarters mean calendar days, weeks, months and quarters, respectively.

(e) Unless expressly provided otherwise, references herein to “consent” mean the prior written consent of the Party at issue, which shall not be unreasonably withheld, delayed or conditioned.

(f) A reference to any Party to this Agreement or another agreement or document includes the Party’s permitted successors and assigns.

(g) Unless the contrary clearly appears from the context, for purposes of this Agreement, the singular number includes the plural number and vice versa; and each gender includes the other gender.

(h) Except where specifically stated otherwise, any reference to any Applicable Law or agreement shall be a reference to the same as amended, supplemented or re-enacted from time to time.

(i) Unless otherwise expressly stated herein, any reference to “volume” shall be deemed to refer to the net volume.

(j) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

1.3 The Parties acknowledge that they and their counsel have reviewed and revised this Agreement and that no presumption of contract interpretation or construction shall apply to the advantage or disadvantage of the drafter of this Agreement.

ARTICLE 2

CONDITIONS TO COMMENCEMENT

2.1 Conditions to Obligations of Xxxx. The obligations of Xxxx contemplated by this Agreement shall be subject to satisfaction by the Company of the following conditions precedent on and as of the Commencement Date:

(a) The Parties shall have agreed to the pricing method to be used in the Inventory Sales Agreement and the Inventory Sales Agreement, in form and in substance satisfactory to Xxxx, shall have been duly executed by the Company and, pursuant thereto, the Company shall have transferred to Xxxx all right, title and interest in and to the Commencement Date Volumes, free and clear of all Liens;

(b) The Parties shall have agreed to the pricing method to be used and the form of the Step-Out Inventory Sales Agreement (which form is attached hereto as Schedule R);

(c) The Standby Letter of Credit Facility Agreement shall have been executed, all documents required to perfect the security interest provided for thereunder (including UCC-1 financing statements) shall have been executed and filed and the status of such security interest as a “Revolving Lien” for purposes of the Intercreditor Agreement shall have been confirmed to the satisfaction of the initial issuer of the Standby LC and Xxxx;

(d) The Standby LC shall have been issued and delivered to Xxxx;

(e) The Existing Procurement Contract shall have become effective with Xxxx as a purchaser thereunder;

(f) The Company shall have duly executed the Storage Facilities Agreement in form and in substance satisfactory to Xxxx;

(g) The Company shall have duly executed the Marketing and Sales Agreement in form and in substance satisfactory to Xxxx;

(h) UCC-1 financing statements reflecting Xxxx as owner of all Crude Oil in the Crude Storage Tanks and all Products in the Product Storage Tanks shall have been prepared, executed and filed in such jurisdictions as Xxxx shall deem necessary or appropriate;

(i) The Company shall have delivered to Xxxx a certificate signed by Xxxxxx X. Xxxx, Senior Vice President — Legal and Secretary certifying as to incumbency, board approval and resolutions, other matters;

(j) The Company shall have delivered to Xxxx an opinion of counsel, in form and substance satisfactory to Xxxx, covering such matters as Xxxx shall

reasonably request, including: good standing; existence and due qualification; power and authority; due authorization and execution; enforceability; no conflicts; provided that, subject to Aron’s consent, certain of such opinions may be delivered by the Company’s general counsel;

(k) No action or proceeding shall have been instituted nor shall any action by a Governmental Authority be threatened, nor shall any order, judgment or decree have been issued or proposed to be issued by any Governmental Authority as of the Commencement Date to set aside, restrain, enjoin or prevent the transactions and performance of the obligations contemplated by this Agreement;

(l) The Refinery and the Storage Facilities shall not have been affected adversely or threatened to be affected adversely by any loss or damage, whether or not covered by insurance, unless such loss or damages would not have a material adverse effect on the usual, regular and ordinary operations of the Refinery or the Storage Facilities;

(m) The Company shall have delivered to Xxxx insurance certificates evidencing the effectiveness of the insurance policies set forth on Schedule F hereto and otherwise comply with Article 15 below;

(n) All representations and warranties of the Company contained herein shall be true and correct on and as of the Commencement Date; and

(o) The Company shall have delivered to Xxxx such other certificates, documents and instruments as may be reasonably necessary to consummate the transactions contemplated herein.

2.2 Conditions to Obligations of the Company. The obligations of the Company contemplated by this Agreement shall be subject to satisfaction by Xxxx of the following conditions precedent on and as of the Commencement Date:

(a) The Parties shall have agreed to the pricing method to be used in the Inventory Sales Agreement in form and in substance satisfactory to the Company, and the Inventory Sales Agreement shall have been duly executed by Xxxx and Xxxx shall have paid the portion of the Commencement Date Purchase Value to the Company that is due on the Commencement Date;

(b) The Parties shall have agreed to the pricing method to be used and the form of the Step-Out Inventory Sales Agreement (which form is attached hereto as Schedule R).

(d) Xxxx shall have duly executed the Marketing and Sales Agreement in form and in substance satisfactory to the Company;

(e) All representations and warranties of Xxxx contained herein shall be true and correct on and as of the Commencement Date;

(f) Xxxx shall have delivered to the Company such other certificates, documents and instruments as may be reasonably necessary to consummate the transactions contemplated herein; and

(g) Xxxx shall have delivered satisfactory evidence of its federal form 637 license.

2.3 Commencement Date.

(a) Subject to the satisfaction of the conditions set forth in Sections 2.1 and 2.2, the “Commencement Date” shall be a Business Day specified by Xxxx in a written notice to the Company given at least one (1) Business Day prior to such Commencement Date, which shall occur on or after the Effective Date and on or prior to June 1, 2010 or such later date as the Parties shall agree (the “Latest Commencement Date”).

(b) If the Commencement Date has not occurred on or before the Latest Commencement Date, this Agreement shall terminate on the first business day following the Latest Commencement Date. In such case, all obligations of the Parties hereunder shall terminate, except for the obligations set forth in Article 2, Article 20 and Article 23; provided, however, that nothing herein shall relieve any Party from liability for the breach of any of its representations, warranties, covenants or agreements set forth in this Agreement.

(c) From and after the Effective Date, the Company shall use commercially reasonable efforts to cause each of the conditions referred to in Section 2.1 to be satisfied and Xxxx shall use commercially reasonable efforts to cause each of the conditions referred to in Section 2.2 to be satisfied.

(d) Without limiting the Parties’ respective obligations under this Agreement, during the period between the Effective Date and the Commencement Date, if either Party in its reasonable judgment deems it necessary or appropriate, the Parties may refine the modeling underlying the computations contemplated with respect to the amounts referred to in clauses (ii) and (iii) of Section 10.2.

ARTICLE 3

TERM OF AGREEMENT

3.1 Term. This Agreement shall become effective on the Effective Date and, subject to Section 2.3(b) above, shall continue for a period starting at 00:00:01 a.m. CPT on the Commencement Date and ending at 11:59:59 p.m. CPT on May 31, 2012 (the “Initial Term”; the

last day of such Initial Term being herein referred to as the “Expiration Date,” subject to Section 3.2 below).

3.2 Extension. Unless either Party has delivered to the other a written notice at least six (6) months prior to the Expiration Date then in effect, of such Party’s election not to extend this Agreement pursuant to this Section, the Expiration Date shall, without any further action, be automatically extended, effective as of the Expiration Date then in effect, for an additional twelve (12) months to the next anniversary of the Expiration Date (each such 12-month period, an “Extension Term”; the final day of such Extension Term becoming the Expiration Date); provided, however, that the Expiration Date may not be automatically extended beyond the 4th anniversary of the Commencement Date. In the event any Party elects not to extend the then-applicable Expiration Date in accordance with this Section, the Parties shall perform their obligations relating to termination pursuant to Article 19.

ARTICLE 4

COMMENCEMENT DATE TRANSFER

4.1 Transfer and Payment on the Commencement Date. The Commencement Date Volumes shall be sold and transferred and payment of the Estimated Commencement Date Value made as provided in the Inventory Sales Agreement.

4.2 Post-Commencement Date Reconciliation and True-up. Determination and payment of the Definitive Commencement Date Value shall be made as provided in the Inventory Sales Agreement.

4.3 Deferred Portion of Purchase Price. Xxxx shall defer paying to the Company ten percent (10%) of the Definitive Commencement Date Value (the “Deferred Portion”). During the term of this Agreement, the Deferred Portion shall constitute an account receivable owing from Xxxx to the Company, in accordance with this Agreement. The Deferred Portion shall be due and payable from Xxxx to the Company on the Termination Date, in accordance with this Agreement.

ARTICLE 5

SUPPLY OF CRUDE OIL

5.1 Sale of Crude Oil. On and after the Commencement Date through the end of the Term hereof, and subject to Aron’s ability to procure Crude Oil in accordance with the terms hereof, its receipt of Crude Oil from the Third Party Suppliers and the other terms and conditions hereof, Xxxx agrees to sell and deliver to the Company, and the Company agrees to purchase and receive from Xxxx, Crude Oil as set forth herein. Xxxx shall, in accordance with the terms and conditions hereof, have the right to be the exclusive supplier of Crude Oil to the Refinery and all Crude Oil supplied under this Agreement shall be solely for use at the Refinery.

5.2 Monthly and Weekly Forecasts and Projections.

(a) No later than the tenth (10^th) Business Day prior to the Contract Cutoff Date of the Nomination Month, Xxxx shall provide the Company with a preliminary written forecast of Aron’s Target Month End Crude Volume and Target Month End Product Volume for the Delivery Month. During the first month of deliveries of Crude Oil made pursuant to this Agreement, Aron’s Target Month End Crude Volume and Target Month End Product Volume shall not exceed the midpoint of the ranges for the Crude Oil and Product Groups in Schedule D, and further, Aron’s Target Month End Product Volume for Catfeed shall be within 40,000 barrels of the number of barrels of Catfeed purchased by Xxxx on the Commencement Date pursuant to the Inventory Sales Agreement.

(b) No later than four (4) Business Days prior to the earliest Contract Cutoff Date in any Nomination Month, the Company shall provide Xxxx with a written forecast of the Refinery’s anticipated Crude Oil requirements for the related Delivery Month (each, a “Monthly Crude Forecast”).

(c) No later than 5:00 p.m., CPT, each Monday, the Company shall provide Xxxx with a written summary of the Refinery’s projected Crude Oil runs for the upcoming Production Week (each, a “Weekly Projection”).

(d) The Company shall promptly notify Xxxx in writing upon learning of any material change in any Monthly Crude Forecast or Weekly Projection or if it is necessary to delay any previously scheduled pipeline nominations or barge loadings.

(e) The Parties acknowledge that the Company is solely responsible for providing the Monthly Crude Forecast and the Weekly Projection and for making any adjustments thereto, and the Company agrees that all such forecasts and projections shall be prepared in good faith, with due regard to all available and reliable historical information and the Company’s then-current business prospects, and in accordance with such standards of care as are generally applicable in the U.S. oil refining industry. The Company acknowledges and agrees that (1) Xxxx shall be entitled to rely and act, and shall be fully protected in relying and acting, upon all such forecasts and projections, and (2) Xxxx shall not have any responsibility to make any investigation into the facts or matters stated in such forecasts or projections.

5.3 Procurement of Crude Oil.

(a) As of the Commencement Date, Xxxx shall have become the purchaser under the Existing Procurement Contract through executing a new Procurement Contract with the Third Party Supplier thereunder.

(b) From time to time during the Term of this Agreement, the Company or Xxxx may propose that an Additional Procurement Contract be entered into, including any such Additional Procurement Contract as may be entered into in connection with the expiration of an outstanding Procurement

Contract. If the Parties mutually agree to seek Additional Procurement Contracts, then the Company shall endeavor to identify quantities of Crude Oil that may be acquired on a spot or term basis from one or more Third Party Suppliers. The Company may negotiate with any such Third Party Supplier regarding the price and other terms of such potential Additional Procurement Contract. The Company shall have no authority to bind Xxxx to, or enter into on Aron’s behalf, any Additional Procurement Contract or Procurement Contract Assignment, and the Company shall not represent to any third party that it has such authority. If the Company has negotiated an offer from a Third Party Supplier for an Additional Procurement Contract (and if relevant, Procurement Contract Assignment) that the Company wishes to be executed, the Company shall apprise Xxxx in writing of the terms of such offer and Xxxx shall promptly determine and advise the Company as to whether Xxxx desires to accept such offer. If Xxxx indicates its desire to accept such offer, then Xxxx shall promptly endeavor to formally communicate its acceptance of such offer to the Company and such Third Party Supplier so that the Third Party Supplier and Xxxx may enter into a binding Additional Procurement Contract (and if relevant, Procurement Contract Assignment) provided that any Additional Procurement Contract (and, if relevant, related Procurement Contract Assignment) shall require Aron’s express agreement and Xxxx shall not have any liability under or in connection with this Agreement if for any reason it, acting in good faith, does not agree to any proposed Additional Procurement Contract or related Procurement Contract Assignment.

(c) If the Company determines, in its reasonable judgment, that it is commercially beneficial for the Refinery to run a particular grade and/or volume of Crude Oil that is available from a Third Party Supplier that is not a counterparty with which Xxxx is then prepared to enter into a contract, then the Company may execute a contract to acquire such Crude Oil for the Company’s account.

(d) Title for each quantity of Crude Oil delivered into a Crude Storage Tank shall pass, if delivered under a Procurement Contract, from the relevant Third Party Supplier as provided in the relevant Procurement Contract or, if not delivered under a Procurement Contract, from the Company to Xxxx, as the Crude Oil passes the Crude Intake Point. The Parties acknowledge that the consideration due from Xxxx to the Company for any Crude Oil that is not delivered under a Procurement Contract will be reflected in the Monthly True-up Amounts determined following such delivery.

(e) The Company agrees that, except as permitted under Section 5.3(b), (c) or (d), it will not purchase or acquire Crude Oil from any party other than Xxxx during the Term of this Agreement, unless otherwise consented to by Xxxx.

(f) No later than four (4) Business Days prior to the earliest Contract Cutoff Date in any Nomination Month, the Company shall inform Xxxx whether

the Company has purchased or intends to purchase any Crude Oil that is not being procured under a Procurement Contract for delivery during the related Delivery Month (“Other Barrels”), in which case the Company shall provide to Xxxx the quantity, grade and delivery terms of such Other Barrels expected to be delivered to the Crude Storage Tanks during such Delivery Month.

5.4 Nominations under Procurement Contracts and for Pipelines.

(a) On the Business Day following receipt of the Monthly Crude Forecast and prior to the delivery of the Projected Monthly Run Volume, Xxxx shall provide to the Company Aron’s preliminary Target Month End Crude Volume and Target Month End Product Volume for the related Delivery Month if different from the Target Month End Crude Volume and Target Month End Product Volume for the related Delivery Month previously provided in Section 5.2(a). By no later than two (2) Business Days prior to the earliest Contract Cutoff Date occurring in such Nomination Month, the Company shall provide to Xxxx the Projected Monthly Run Volume for the Delivery Month for which deliveries must be nominated prior to such Contract Cutoff Dates. As part of such Projected Monthly Run Volume, the Company may specify the grade of such Projected Monthly Run Volume, provided that such grades and their respective quantities specified by the Company shall fall within the grades and quantities then available to be nominated by Xxxx under the outstanding Procurement Contracts.

(b) Provided that the Company provides Xxxx with the Projected Monthly Run Volume as required under Section 5.4(a), Xxxx shall make all scheduling and other selections and nominations (collectively, “Contract Nominations”) that are to be made under the Procurement Contracts on or before the Contract Cutoff Dates for the Procurement Contracts and such Contract Nominations shall reflect the quantity of each grade specified by the Company in such Projected Monthly Run Volume. Should any Contract Nomination not be accepted by any Third Party Supplier under a Procurement Contract, Xxxx shall promptly advise the Company and use commercially reasonable efforts with the Company and such Third Party Supplier to revise the Contract Nomination subject to the terms of any such Procurement Contract. Xxxx shall provide the Company with confirmation that such Contract Nominations have been made.

(c) Insofar as any pipeline nominations are required to be made by Xxxx for any Crude Oil prior to any applicable Pipeline Cutoff Date for any month, Xxxx shall be responsible for making such pipeline and terminal nominations for that month; provided that, Aron’s obligation to make such nominations shall be conditioned on its receiving from the Company scheduling instructions for that month a sufficient number of days prior to such Pipeline Cutoff Date so that Xxxx can make such nominations within the lead times required by such pipelines and terminals. Xxxx shall not be responsible if a Pipeline System is unable to accept Aron’s nomination or if the Pipeline System must allocate Crude Oil among its shippers.

(d) For operational and other reasons relating to the conduct of its business, the Company may, from time to time, request that Xxxx make adjustments or modifications to Contract Nominations it has previously made under the Procurement Contracts. Promptly following receipt of any such request, Xxxx will use its commercially reasonable efforts to make such adjustment or modification, subject to any limitations or restrictions under the relevant Procurement Contracts. Any additional cost or expenses incurred as a result of such an adjustment or modification shall constitute an Ancillary Cost hereunder.

(e) Xxxx shall not nominate or to its knowledge otherwise acquire any Crude Oil with characteristics that are not previously approved by the Company for use at the Refinery, such approval to be in the Company’s sole and absolute discretion.

(f) In addition to the nomination process, Xxxx and the Company shall follow the mutually agreed communications protocol as set forth on Schedule J hereto, with respect to ongoing daily coordination with feedstock suppliers, including purchases or sales of Crude Oil outside of the normal nomination procedures.

(g) Each of the Company and Xxxx agrees to use commercially reasonable efforts in preparing the forecasts, projections and nominations required by this Agreement in a manner intended to maintain Crude Oil and Product operational volumes within the Operational Volume Range.

(h) Prior to entering into any Ancillary Contract (as defined in Article 19 below) that does not by its terms expire or terminate on or as of the Termination Date, Xxxx will endeavor, in good faith and subject to any confidentiality restrictions, to afford the Company an opportunity to review and comment on such Ancillary Contract or the terms thereof and to confer with the Company regarding such Ancillary Contract and terms and if Xxxx enters into any such Ancillary Contract without the Company’s consent, the Company shall not be obligated to assume such Ancillary Contract pursuant to Section 19.1(c) below.

5.5 Storage and Delivery of Crude Oil.

(a) Xxxx shall have the exclusive right to store Crude Oil in the Crude Storage Tanks as provided in the Storage Facilities Agreement.

(b) Provided no Default or Event of Default has occurred and is continuing, the Company shall be permitted to withdraw from the Feedstock Storage Tanks and take delivery of Crude Oil on any day and at any time. The withdrawal and receipt of any Crude Oil by the Company at the Feedstock Intake Point shall be on an “ex works” basis. Xxxx shall be responsible only for arranging transportation and delivery of Crude Oil into the Crude Storage Tanks and the Company shall bear sole responsibility for arranging the withdrawal of

Crude Oil from the Crude Storage Tanks. The Company shall take all actions necessary to maintain a connection with the Crude Storage Tanks to enable withdrawal and delivery of Crude Oil to be made as contemplated hereby.

5.6 Title, Risk of Loss and Custody.

(a) Title to and risk of loss of the Crude Oil shall pass from Xxxx to the Company at the Crude Delivery Point. The Company shall assume custody of the Crude Oil as it passes the Crude Delivery Point.

(b) During the time any Crude Oil is held in the Crude Storage Tanks, the Company, in its capacity as operator of the Crude Storage Tanks and pursuant to the Storage Facilities Agreement, shall be solely responsible for compliance with all Applicable Laws, including all Environmental Laws, pertaining to the possession, handling, use and processing of such Crude Oil and shall indemnify and hold harmless Xxxx, its Affiliates and their agents, representatives, contractors, employees, directors and officers, for all Liabilities directly or indirectly arising therefrom except to the extent such Liabilities are caused by or attributable to any of the matters for which Xxxx is indemnifying the Company pursuant to Article 20.

(c) At and after transfer of any Crude Oil at the Crude Delivery Point, the Company shall be solely responsible for compliance with all Applicable Laws, including all Environmental Law pertaining to the possession, handling, use and processing of such Crude Oil and shall indemnify and hold harmless Xxxx, its Affiliates and their agents, representatives, contractors, employees, directors and officers, for all Liabilities directly or indirectly arising therefrom.

(d) Notwithstanding anything to the contrary herein, Xxxx and the Company agree that the Company shall have an insurable interest in Crude Oil that is subject to a Procurement Contract and that the Company may, at its election and with prior notice to Xxxx, endeavor to insure the Crude Oil. If pursuant to the terms of this Agreement, the Company bears the loss of any Crude Oil, then (subject to any other setoff or netting rights Xxxx may have hereunder) any insurance payment to Xxxx made to cover same shall be promptly paid over by Xxxx to the Company.

5.7 Contract Documentation, Confirmations and Conditions.

(a) Aron’s obligations to deliver Crude Oil under this Agreement shall be subject to (i) the Company’s identifying and negotiating potential Procurement Contracts, in accordance with Section 5.3, that are acceptable to both the Company and Xxxx relating to a sufficient quantity of Crude Oil to meet the Refinery’s requirements, (ii) the Company’s performing its obligations hereunder with respect to providing Xxxx with timely nominations, forecasts and projections (including Projected Monthly Run Volumes, as contemplated in Section 5.4(a) so that Xxxx may make timely nominations under the Procurement Contracts, (iii) all

of the terms and conditions of the Procurement Contracts, and (iv) no Event of Default having occurred and continuing with respect to the Company.

(b) In documenting each Procurement Contract, including any Additional Procurement Contract that may be entered into pursuant to Section 5.3(b), Xxxx will endeavor and cooperate with the Company, in good faith and in a commercially reasonable manner, to obtain the Third Party Supplier’s agreement that a copy of such Procurement Contract may be provided to the Company; provided that this Section 5.7(b) in no way limits the Company’s rights to consent to all Procurement Contracts as contemplated by Section 5.3(b). In addition, to the extent it is permitted to do so, Xxxx will endeavor to keep the Company apprised of, and consult with the Company regarding, the terms and conditions being incorporated into any Procurement Contract under negotiation with a Third Party Supplier.

(c) The Company acknowledges and agrees that, subject to the terms and conditions of this Agreement, it is obligated to purchase and take delivery of all Crude Oil acquired by Xxxx under Procurement Contracts executed in connection herewith and subject to the terms and conditions specified in Section 5.4 above. In the event of a dispute, Xxxx will provide, to the extent legally and contractually permissible, to the Company, a copy of the Procurement Contract in question.

5.8 DISCLAIMER OF WARRANTIES. EXCEPT FOR THE WARRANTY OF TITLE WITH RESPECT TO CRUDE OIL DELIVERED HEREUNDER, XXXX MAKES NO WARRANTY, CONDITION OR OTHER REPRESENTATION, WRITTEN OR ORAL, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS OR SUITABILITY OF THE CRUDE OIL FOR ANY PARTICULAR PURPOSE OR OTHERWISE. FURTHER, XXXX MAKES NO WARRANTY OR REPRESENTATION THAT THE CRUDE OIL CONFORMS TO THE SPECIFICATIONS IDENTIFIED IN ARON’S CONTRACT WITH ANY THIRD PARTY SUPPLIER.

5.9 Quality Claims and Claims Handling.

(a) The failure of any Crude Oil that Xxxx hereunder sells to the Company to meet the specifications or other quality requirements applicable thereto as stated in Aron’s Procurement Contract for that Crude Oil shall be for the sole account of the Company and shall not entitle the Company to any reduction in the amounts due by it to Xxxx hereunder; provided, however, that any claims made by Xxxx with respect to such non-conforming Crude Oil shall be for the Company’s account and resolved in accordance with Section 5.9(d).

(b) The Parties shall consult with each other and coordinate how to handle and resolve any claims arising in the ordinary course of business (including claims related to Crude Oil, pipeline or ocean transportation, and any dispute, claim, or controversy arising hereunder between Xxxx and any of its vendors who supply goods or services in conjunction with Aron’s performance of

its obligations under this Agreement) made by or against Xxxx. In all instances wherein claims are made by a third party against Xxxx which will be for the account of the Company, the Company shall have the right, subject to Section 5.9(c), to either direct Xxxx to take commercially reasonable actions in the handling of such claims or assume the handling of such claim in the name of Xxxx, all at the Company’s cost and expense. To the extent that the Company believes that any claim should be made by Xxxx for the account of the Company against any third party (whether a Third Party Supplier, terminal facility, pipeline, storage facility or otherwise), and subject to Section 5.9(c), Xxxx will take any commercially reasonable actions as requested by the Company either directly, or by allowing the Company to do so, to prosecute such claim all at the Company’s cost and expense and all recoveries resulting from the prosecution of such claim shall be for the account of the Company. Xxxx shall, in a commercially reasonable manner, cooperate with the Company in prosecuting any such claim and shall be entitled to assist in the prosecution of such claim at the Company’s expense.

(c) Notwithstanding anything in Section 5.9(b) to the contrary, Xxxx may notify the Company that Xxxx is retaining control over the resolution of any claim referred in Section 5.9(b) if Xxxx, in its reasonable judgment, has determined that it has commercially reasonable business considerations for doing so based on any relationships that Xxxx or any of its Affiliates had, has or may have with the third party involved in such claim; provided that, subject to such considerations, Xxxx shall use commercially reasonable efforts to resolve such claim, at the Company’s expense and for the Company’s account. In addition, any claim that is or becomes subject of Article 19 shall be handled and resolved in accordance with the provisions of Article 19.

(d) If any claim contemplated in this Section 5.9 involves a counterparty that is an Affiliate of Xxxx and the management and operation of such counterparty is under the actual and effective control of Xxxx, then the Company shall control the dispute and resolution of such claim.

5.10 Communications.

(a) Each Party shall promptly provide to the other copies of any and all written communications and documents between it and any third party which in any way relate to Ancillary Costs, including but not limited to written communications and documents with Pipeline Systems, provided that Xxxx has received such communications and documents in respect of the Pipeline System and/or any communications and documents related to the nominating, scheduling and/or chartering of vessels; provided that neither Party shall be obligated to provide to the other any such materials that contain proprietary or confidential information and, in providing any such materials, such Party may redact or delete any such proprietary or confidential information.

(b) With respect to any proprietary or confidential information referred to in Section 5.10(a), Xxxx shall promptly notify the Company of the nature or type of such information and use its commercially reasonable efforts to obtain such consents or releases as necessary to permit such information to be made available to the Company.

(c) The Parties shall coordinate all nominations and deliveries according to the communications protocol set forth on Schedule J hereto.

ARTICLE 6

PURCHASE PRICE FOR CRUDE OIL

6.1 Daily Volumes. For each Delivery Date, the Company shall provide to Xxxx, by no later than 1:00 pm CPT on the next Business Day (except (i) in the case of Friday and Saturday, then by the following Monday and (ii) in the case of Sunday and Monday, then by the following Tuesday), meter tickets or tank gauge readings confirming the Measured Feedstock Quantity for each Crude Storage Tank for that Delivery Date.

6.2 Purchase Price. The per Barrel price of the Crude Oil sold to the Company hereunder shall equal the sum of the per Barrel purchase price specified in the related Procurement Contract under which such Crude Oil was acquired (the “Base Price”) plus $0.20 (such sum being the “Supply Cost”), subject to application of the relevant prices as provided in Schedule B hereto and calculation of the Monthly Crude Oil True-up Amount as provided for in Schedule C hereto.

6.3 Material Crude Grade Changes. If either the Company or Xxxx concludes in its reasonable judgment that the specifications (including specific gravity and sulfur content of Crude Oil) of the crude oil procured, or projected to be procured, differ materially from the HLS and LLS Crude Oil the grades that have generally been run by the Refinery, then the Company and Xxxx will endeavor in good faith to mutually agree on (i) acceptable price indices for such Crude Oil, and (ii) a settlement payment from one party to the other sufficient to compensate the Parties for the relative costs and benefits to each of the price differences between the prior price indices and the amended price indices.

6.4 For all Other Barrels procured by the Company outside of a Procurement Contract and sold to Xxxx, the Company will pay Xxxx a fee of $0.10 per barrel. Any such amount will be included in the applicable Monthly Crude Oil True-Up Amount. Upon Aron’s request, the Company will provide documentation evidencing such Crude Oil purchases.

ARTICLE 7

TARGET INVENTORY LEVELS AND WORKING CAPITAL ADJUSTMENT

7.1 Target Month End Crude Volume

(a) By no later than two (2) Business Days prior to the earliest Contract Cutoff Date occurring in each Nomination Month, the Company shall

notify Xxxx of the aggregate quantity of Crude Oil that the Company expects to run at the Refinery during the subject Delivery Month (the “Projected Monthly Run Volume”).

(b) For each month of the Term hereof, the “Target Month End Crude Volume” shall equal (i) the Target Month End Crude Volume for the immediately preceding month, subject to any adjustment thereto made pursuant to Section 7.1, plus (ii) the aggregate volume of Crude Oil that Xxxx has nominated under the Procurement Contracts for delivery during that month pursuant to Section 5.4(b), plus (iii) the aggregate volume of the expected Other Barrels, minus (iv) the Projected Monthly Run Volume for that month (except that the Target Month End Crude Volume as of the Commencement Date and as of the end of the first month of the Term hereof shall be the respective volumes specified as such on Schedule I hereto).

(c) In establishing a Target Month End Crude Volume, Xxxx acknowledges that its ability to increase any such Target Month End Crude Volume is constrained to the extent that the Crude Oil available for delivery under the Procurement Contracts is not greater than the Company’s Crude Oil requirements for the Refinery for the month related to such Target Month End Crude Volume.

(d) After Xxxx has established a Target Month End Crude Volume for any month, it may change such Target Month End Crude Volume as follows:

(i) If the Actual Month End Crude Volume is above the Target Month End Crude Volume by more than 35,000 Barrels and the Projected Net Crude Consumption is greater than the Actual Net Crude Consumption, then Xxxx may increase the Target Month End Crude Volume for such Delivery Month by the lesser of (i) the Actual Month End Crude Volume minus the sum of the Target Month End Crude Volume plus 35,000 Barrels and (ii) the Projected Net Crude Consumption minus the Actual Net Crude Consumption. If the Target Month End Crude Volume is above the Actual Month End Crude Volume by more than 35,000 Barrels and the Actual Net Crude Consumption is greater than the Projected Net Crude Consumption, then Xxxx may reduce the Target Month End Crude Volume for such Delivery Month by the lesser of (i) the Target Month End Crude Volume minus the sum of the Actual Month End Crude Volume plus 35,000 Barrels and (ii) the Actual Net Crude Consumption minus the Projected Net Crude Consumption. Xxxx must notify the Company of its intent to make this change within four (4) Business Days after the end of such Delivery Month. The Company may dispute this change within one (1) Business Day after receiving such notification from Xxxx.

(ii) In addition, Xxxx may adjust the Target Month End Crude Volume with the consent of the Company.

In all cases described above, the changed Target Month End Crude Volume affects only the subject month and does not impact the calculation of the Target Month End Crude Volume in subsequent months pursuant to 7.1(b).

7.2 Target Month End Product Volume.

(a) No later than five (5) Business Days prior to each calendar month, the Company shall provide to Xxxx its standard run-out report (the “Run-out Report”) showing the estimated quantities of each Product that it expects to produce and deliver to Xxxx during such month and the quantities of each Product it expects to sell under the Marketing and Sales Agreement during such month (for each Product, the “Projected Monthly Production Volume”), which may, from time to time, be adjusted by the Company.

(b) For each month and each type of Product, Xxxx shall from time to time specify an aggregate quantity and grade that shall be the “Target Month End Product Volume” for that month (except that the Target Month End Product Volume for each type of Product as of the Commencement Date and as of the end of the first month of the Term hereof shall be the respective volumes specified as such on Schedule I hereto).

(c) Provided that the Company has complied with its obligations under the Marketing and Sales Agreement, and subject to events of Force Majeure, facility turnarounds, the performance of any third parties (including purchasers of Products under the Marketing and Sales Agreement), Xxxx will, in establishing each Target Month End Product Volume endeavor in a commercially reasonable manner to cause such Target Month End Product Volume to be within the applicable range specified for such Product on Schedule D hereto.

(d) In establishing a Target Month End Product Volume, Xxxx acknowledges that its ability to increase or decrease any such Target Month End Product Volume is constrained to the extent that such change would result in month end Product inventories to not be feasible given the Company’s production forecast or the Company’s ability to ship Product.

(e) At any time prior to the beginning of the month to which a Target Month End Product Volume relates, Xxxx may change such Target Month End Product Volume; provided that if such change contemplates an increase in the Target Month End Product Volume, such increase shall not be greater than the excess of the Company’s projected production run for such month over the third party sales of such Product that are then committed or reasonably expected to be executed and delivered during such month, and if such change contemplates a decrease in the Target Month End Product Volume, such decrease shall be consistent, in Aron’s reasonable judgment, with the Company’s capacity to achieve sales under the Marketing and Sales Agreement, taking into account the Company’s projected production run and for gasoline and jet maximum volume delivery cycles on the Colonial Pipeline System, to yield such reduced Target Month End Product Volume. Furthermore Xxxx shall not increase or decrease its Target Month End Product Volume for Catfeed to such an extent as would be reasonably likely to adversely affect, in any material respect, the Company’s

refining operations; and in no event shall an increase or decrease in the Target Month End Product Volume for Catfeed exceed 40,000 Barrels.

(f) After Xxxx has established a Target Month End Product Volume, it may change such Target Month End Product Volume if one of the following occurs: (i) the Actual Month End Product Volume is below the minimum of the Operational Volume Range or (ii) the Actual Month End Product Volume is above the maximum of the Operational Volume Range, in which case Xxxx may change its Target Month End Product Volume for such month to equal the Actual Month End Product Volume. Xxxx must notify the Company of its intent to make this change within four (4) Business Days after the end of such Delivery Month. The Company may dispute this change within one (1) Business Day after receiving such notification from Xxxx. In all cases described above, the changed Target Month End Product Volume affects only the subject month and does not impact the calculation of the Target Month End Product Volume in subsequent months.

(g) The Target Month End Product Volume will be adjusted in accordance with the procedure for Excluded Transactions as described in the Marketing and Sales Agreement.

In addition, Xxxx may adjust the Target Month End Product Volume with the consent of the Company.

7.3 Monthly Working Capital Adjustment. Promptly after the end of each month, Xxxx shall determine the Monthly Working Capital Adjustment.

7.4 Monthly Product Sale Adjustments. For each calendar month (or portion thereof) during the term of the Marketing and Sales Agreement and each Product Group, Xxxx shall determine whether an amount is due by one party to the other (for each Product Group, a “Monthly Product Sale Adjustment”) in accordance with the following terms and conditions:

(a) For each Product Group and relevant period, Xxxx shall determine (i) the aggregate quantity of barrels of such Product Group sold during such period under Product Purchase Agreements and Company Purchase Agreements, (ii) the aggregate quantity of barrels of such Product Group sold under Excluded Transaction executed pursuant to Section 2.2(c) of the Marketing and Sales Agreement and (iii) the Aggregate Receipts (as defined below);

(b) If, for any Product Group and relevant period, (i) the Aggregate Receipts exceeds the Index Value (as defined below), then the Monthly Product Sale Adjustment for that Product Group shall equal such excess and shall be due to the Company and (ii) the Index Value exceeds the Aggregate Receipts, then the Monthly Product Sale Adjustment for that Product Group shall equal such excess and shall be due to Xxxx;

(c) If Xxxx determines that any Monthly Product Sale Adjustment is due, it will include its calculation of such amount in the documentation provided

to the Company for the relevant period pursuant to Section 10.2 hereof and such Monthly Product Sale Adjustment shall be incorporated as a component of the Monthly True-up Amount due for such period which, if due to the Company, shall be expressed as a positive number and, if due to Xxxx, shall be expressed as a negative number; and

(d) As used herein:

(i) “Aggregate Receipts” shall mean, for any Product Group and relevant period, the sum of (x) the actual aggregate purchase value invoiced by Xxxx for all quantities of such Product Group that Xxxx delivered during such period (without giving effect to any offsetting Excluded Transactions) under Product Purchase Agreements with Customers and under Company Purchase Agreements with Company Purchasers (as defined in the Marketing and Sales Agreement) and (y) for any Excluded Transaction executed pursuant to Section 2.2(c) of the Marketing and Sales Agreement, the aggregate purchase price that would have been payable under the proposed Product Purchase Agreement in connection with which such Excluded Transaction was executed;

(ii) “Index Value” shall mean, for any Product Group and relevant period, the product of (A) the sum of the aggregate quantity of barrels of such Product Group sold during such period (without giving effect to any offsetting Excluded Transactions) under Product Purchase Agreements and Company Purchase Agreements and the quantity of sales for such period covered by clause (y) of the definition of Aggregate Receipts, multiplied by (B) the Long Product FIFO Price for that Product Group and period.

7.5 Monthly Cover Costs. If, for any calendar month (or portion thereof), Xxxx reasonably determines that, as a result of the Company’s failure to produce the quantities of Product projected under this Agreement or the Company’s failure to comply with its obligations under the Marketing and Sales Agreement, Xxxx retains insufficient quantities of Product to comply with its obligations to any third parties or the Company, whether under Product Purchase Agreements, Company Purchase Agreements or Excluded Transactions, and Xxxx incurs any additional costs and expenses in procuring Product from other sources for purposes of covering such delivery obligations or the shortfall in the quantity held for its account (collectively, “Monthly Cover Costs”), then the Company shall be obliged to reimburse Xxxx for such Monthly Cover Costs. If Xxxx determines that any Monthly Cover Costs are due to it, Xxxx shall promptly communicate such determination to the Company and, subject to any mitigation of such costs actually achieved by the Company, include the calculation of such amount in the documentation provided to the Company for the relevant period pursuant to Section 10.2 hereof and such Monthly Cover Costs shall be incorporated as a component of the Monthly True-up Amount due for such period hereunder.

7.6 Monthly Excluded Transaction Fee. For any barrel of gasoline or jet fuel delivered by Xxxx under an Excluded Transaction (net of any purchases under Excluded Transactions), Xxxx shall be obligated to pay to the Company an amount equal to the applicable Per Barrel Adjustment (as set forth in Schedule K to this Agreement). For each calendar month, Xxxx shall determine the net quantities of gasoline and jet fuel delivered during such month under Excluded Transactions and the aggregate amount due under this Section 7.6 as a result of

such deliveries (the “Monthly Excluded Transaction Fee”). In addition, in computing the Monthly Excluded Transaction Fee, no fee shall be due with respect to any barrels subject to an Excluded Transaction Pair (as defined in the Marketing and Sales Agreement). If any Monthly Excluded Transaction Fee is due to the Company for any period, Xxxx will include its calculation of such amount in the documentation provided to the Company for the relevant period pursuant to Section 10.2 hereunder and such Monthly Excluded Transaction Fee shall be incorporated as a component of the Monthly True-up Amount due for such period.

ARTICLE 8

PURCHASE AND DELIVERY OF PRODUCTS

8.1 Purchase and Sale of Products. Xxxx agrees to purchase and receive from the Company, and the Company agrees to sell and deliver to Xxxx, the entire Products output of the Refinery from and including the Commencement Date through the end of the Term of this Agreement, at the prices determined pursuant to this Agreement and otherwise in accordance with the terms and conditions of this Agreement.

8.2 Delivery and Storage of Products.

(a) Unless otherwise agreed by Xxxx, all Products shall be delivered by the Company to Xxxx at the Products Delivery Point into the Product Storage Tanks, on an FOB basis. Title and risk of loss to the Products so delivered to Xxxx shall pass from the Company to Xxxx as such Products pass the Products Delivery Point.

(b) Xxxx shall have exclusive right to store Products in the Product Storage Tanks as provided in the Storage Facilities Agreement.

8.3 Expected Yield and Estimated Output.

(a) On or before the Commencement Date, the Company will provide to Xxxx an expected Product yield for the Refinery based on its then current operating forecast for the Refinery (the “Initial Estimated Yield”). From time to time, based on its then current operating forecast for the Refinery, the Company may provide to Xxxx a revised expected Product yield for the Refinery (each, a “Revised Estimated Yield” and, together with the Initial Estimated Yield, an “Estimated Yield”).

(b) On the Commencement Date and thereafter at least five (5) Business Days prior to each month, the Company shall, based on the then current Estimated Yield and such other operating factors as it deems relevant, prepare and provide to Xxxx an estimate of the Product quantities it expects to deliver to Xxxx during such month (each, a “Monthly Product Estimate”).

8.4 Delivered Quantities. For each Delivery Date, the Company shall provide to Xxxx, by no later than 1:00 p.m. CPT on the next Business Day (except (i) in the case of Friday and Saturday, then by the following Monday and (ii) in the case of Sunday and Monday, then by

the following Tuesday), meter tickets or tank gauge readings confirming the Measured Product Quantity in each Product Storage Tank for each Product delivered during that Delivery Date.

8.5 Title and Risk of Loss. Title and risk of loss to Products shall pass from the Company to Xxxx as Products pass the Product Delivery Point.

8.6 Product Specifications. The Company agrees that all Products sold to Xxxx hereunder shall conform to the respective specifications set forth on Schedule A hereto or to such other specifications as are from time to time agreed upon by the Parties.

8.7 Purchase Price of Products. The per unit price for each type of Product sold to Xxxx hereunder shall equal the Long Product FIFO Price specified for such Product (the “Product Cost”), subject to application of the relevant prices as provided in Schedule B hereto and calculation of the Monthly Product True-up Amount as provided for in Schedule C hereto.

8.8 Resale of Products.

(a) The Parties will endeavor, in good faith, to cause each of the Company’s existing commitments to sell Product to a third party (an “Existing Sales Commitments”) to be assigned by the Company to Xxxx pursuant to an assignment agreement in form and substance satisfactory to Xxxx. Any Existing Sales Commitment that is so assigned shall constitute an “Assigned Sales Commitment” for purposes hereof. The Parties acknowledge that an assignment of an Existing Sales Commitment may not occur for various reasons, including the refusal of the purchaser thereunder to consent to such assignment or Aron’s determination that it does not wish to have a direct contractual relationship with such purchaser.

(b) The Company agrees that, except for the Existing Sales Commitments, the Company will not enter into any other commitments to sell Products unless permitted in accordance with the Marketing and Sales Agreement or otherwise consented to by Xxxx in writing.

8.9 Material Product Grade Changes. If either the Company or Xxxx concludes in its reasonable judgment that the specifications or the mix of the constituents of a Pricing Group produced, or projected to be produced, differ materially from those that have generally been produced by the Refinery, then the Company and Xxxx will endeavor in good faith to mutually agree on (i) acceptable price indices for such Product, and (ii) a settlement payment from one party to the other sufficient to compensate the Parties for the relative costs and benefits to each of the price differences between the prior price indices and the amended price indices.

ARTICLE 9

ANCILLARY COSTS; MONTH END INVENTORY; CERTAIN DISPOSITIONS

9.1 Ancillary Costs.

(a) The Company agrees to reimburse Xxxx for all Ancillary Costs incurred by Xxxx (regardless of whether the Crude Oil and/or Products to which any such Ancillary Costs related have been received by or delivered to any Party). Such reimbursement shall occur on a monthly basis as part of the Monthly True-up in Section 10.2 below, except that Xxxx may require that any such Ancillary Costs be reimbursed on demand in the event that (i) a Default or Event of Default has occurred and is continuing, (ii) upon the Expiration Date of the Agreement or (iii) the aggregate amount of unreimbursed Ancillary Costs at any time exceeds $2,000,000, but only in respect of such excess. Xxxx shall promptly provide the Company with copies of all invoices for Ancillary Costs incurred by Xxxx. All refunds or adjustments of any type received by Xxxx related to any Ancillary Costs shall be reflected in the Monthly True-up Amount as provided in Section 10.2 below.

(b) Without limiting the foregoing, if Xxxx has reasonably determined (based on its experience in any one or more of the three preceding months) that it expects the amount of Ancillary Costs for an upcoming month to exceed $2,000,000, Xxxx may require that its estimate of such Ancillary Costs (to the extent of such excess) be paid in equal installments as part of each Net Payment made during such month, with the actual amount of such Ancillary Costs (net of such estimated payment) to be incorporated as a component of the Monthly True-up Amount payable in the next month.

9.2 Month End Inventory.

(a) As of 11:59:59 p.m., CPT, on the last day of each month, the Company shall apply the Volume Determination Procedures to the Crude Storage Tanks and the Product Storage Tanks, and based thereon shall determine for such month (i) the aggregate volume of Crude Oil held in the Crude Storage Tanks at that time (the “Actual Month End Crude Volume”) and (ii) for each Product, the aggregate volume of such Product held in the Product Storage Tanks at that time (each, an “Actual Month End Product Volume”). The Company shall notify Xxxx of the Actual Month End Crude Volume and each Actual Month End Product Volume by no later than 5:00 p.m. CPT on the second Business Day thereafter.

(b) Xxxx may, or may have Supplier’s Inspector, witness all or any aspects of the Volume Determination Procedures as Xxxx shall direct.

9.3 Disposition Following Force Majeure.

(a) Notwithstanding anything to the contrary, if Xxxx decides or is required, due to an event of Force Majeure affecting either party or otherwise, to sell to any unrelated third parties, in arm’s length transactions, any quantities of Crude Oil that, based on the then current Monthly Crude Forecast or Weekly Projection, Xxxx would reasonably have expected to have sold to the Company (any quantity of Crude Oil so disposed of by Xxxx being referred to as a “Disposed Quantity”), then the Company shall be obligated to pay to Xxxx an

amount equal to the difference between the price at which such Disposed Quantity would have been sold to the Company, minus the amount realized in the sale to a third party (the “Disposition Amount”). In no event shall the Disposed Quantity exceed the aggregate amount of Crude Oil that the Company would have been expected to purchase based on their current Monthly Crude Forecast or Weekly Projection for the period during which the Company is unable to take delivery of Crude Oil as the result of the Force Majeure event or otherwise.

(b) In connection with its selling any Disposed Quantity, Xxxx shall promptly determine the Disposition Amount and issue to the Company an invoice for such amount. The Company shall pay to Xxxx the invoiced amount no later than the second Business Day after the date of such invoice. If, in connection with the sale of any Disposed Quantity, the Disposition Amount is a negative number, then Xxxx shall pay the amount of such excess to the Company no later than the second Business Day after the date of such invoice.

ARTICLE 10

PAYMENT PROVISIONS

10.1 Weekly Net Payments.

(a) For each Production Week, Xxxx shall provide the Company with a net settlement statement in connection with each Production Week setting forth (i) the Weekly Supply Value (as defined below) and (ii) the Weekly Product Value (as defined below) as per the scheduled dates to be agreed on or before the Commencement Date. Provided no Default or Event of Default has occurred and is continuing, the Net Payment for any week shall be calculated as set forth below. Xxxx shall notify the Company of the Net Payment for a Production Week by the close of business on the first Business Day following such Production Week. The Net Payment for any Production Week shall be due from the Party owing such amount on the applicable Payment Date specified on Schedule G hereto; provided that in no event shall payment be due earlier than two (2) Business Days after Xxxx has provided notification of the Net Payment for a Production Week.

(b) If a Default or an Event of Default has occurred and is continuing, then the Non-Defaulting Party may, at its option and without limiting any other rights or remedies it may have hereunder or otherwise, suspend the requirement under Section 10.1(a) that payments be made weekly on a net basis and in lieu thereof the Defaulting Party shall be required to pay all amounts upon demand.

(i) Using the Tank Balance Volume Report (a form of which is attached hereto as Schedule H) provided by the Company, Xxxx will

calculate the “Crude Consumption Volume” for each Crude Storage Tank as follows: Beginning Inventory plus Receipts minus Ending Inventory, each as reflected on the Tank Balance Volume Report. To obtain the “Daily Crude Consumption Volume” Xxxx will sum the Crude Consumption Volumes for the Crude Oil Group. The “Weekly Consumption Volume” shall be equal to the sum of the Daily Crude Consumption Volumes for each day in the Production Week.

(ii) Xxxx will use the Contract Nominations for the respective Delivery Month to allocate the Weekly Consumption Volume among those crude grades included in the Contract Nominations. For each crude grade so nominated, Xxxx will determine a “Grade Percentage” which shall be equal to the nominated volume of such crude grade divided by the total volume of crude nominated.

(iii) The “Weekly Grade Value” shall be an amount equal to (1) the Weekly Consumption Volume, multiplied by (2) the applicable Grade Percentage, multiplied by (3) the applicable Weekly Price, as set forth on Schedule B, plus $0.20 per barrel, multiplied by (4) negative one “-1”.

(iv) The “Weekly Supply Value” shall be an amount equal to sum of all applicable Weekly Grade Values for the Production Week.

(d) As used herein, the “Weekly Product Value” shall be calculated as follows:

(i) Using the Tank Balance Volume Report provided by the Company, Xxxx will calculate the “Production Volume” for each Products Storage Tank as follows: Ending Inventory plus Sales (determined on a net volume basis) minus Beginning Inventory, each as reflected on the Tank Balance Volume Report. To obtain the “Daily Production Volume” for each Product Group, Xxxx will sum the Production Volumes for each of the applicable Products Storage Tanks as set forth on Schedule P. The “Weekly Production Volume” shall be equal to the sum of the Daily Production Volumes by Product Group for each day in the Production Week.

(ii) For each Product Group, the “Weekly Product Value” shall be an amount equal to (1) the Weekly Production Volumes, multiplied by (2) the applicable Weekly Price, as set forth on Schedule B.

(iii) The “Total Weekly Product Value” shall be an amount equal to sum of all applicable Weekly Product Values for all Product Groups for the Production Week.

(e) The “Net Weekly Payment” shall be an amount equal to the sum of (1) the Total Weekly Product Value and (2) the Weekly Supply Value. If this is a

negative amount, the absolute value will represent an amount payable to Xxxx and if this is a positive amount, it will represent an amount payable to the Company.

(f) If the Commencement Date occurs prior to the first day of the first Production Week, then (i) for purposes of determining the Weekly Supply Value for that Production Week, the Beginning Inventory shall be deemed to equal the Commencement Date Crude Oil Volume, but in all other respects the Weekly Supply Value shall be determined solely based on activities occurring during such Production Week and (ii) for purposes of determining the Weekly Product Value of each Product Group for that Production Week, the Beginning Inventory shall be deemed to be equal the Commencement Date Product Volume for that Product Group, but in all other respects the Weekly Product Value shall be determined solely based on activities occurring during such Production Week.

10.2 Monthly True-Up Amount.

(a) Xxxx will use commercially reasonable efforts to provide to the Company, within fifteen (15) Business Days after the end of any calendar month, a calculation and appropriate documentation to support such calculation for such month for a monthly true-up payment (the “Monthly True-up Amount”). The Monthly True-up Amount for any month shall be equal to:

(i) the Monthly Crude Oil True-up Amount (as defined in Schedule C hereto); plus

(ii) the Aggregate Monthly Product True-up Amount (as defined in Schedule C hereto), minus

(iii) the Ancillary Costs for such month, plus

(iv) the Monthly Excluded Transaction Fee, plus

(v) the Monthly Product Sales Adjustment, minus

(vi) the Monthly Cover Costs, plus

(vii) the Monthly Working Capital Adjustment, plus

(viii) any other amount then due from Xxxx to the Company under this Agreement or any other Transaction Document, minus

(ix) any other amount then due from the Company to Xxxx under this Agreement or any other Transaction Document.

If the Monthly True-up Amount is a positive number, such amount shall be due from Xxxx to the Company, and if the Monthly True-up Amount is a negative number, then the absolute value thereof shall be due from the Company to Xxxx. The Company shall pay any Monthly True-up Amount due to Xxxx within two (2)

Business Days after the Company’s receipt of the monthly invoice and all related documentation supporting the invoiced amount. Xxxx shall pay any Monthly True-up Amount due to the Company within two (2) Business Days after making its definitive determination of such amount.

(b) For purposes of determining the amounts due under clauses (i) and (ii) of Section 10.2(a), the definitions and formulas set forth in Schedule C hereto shall apply and for purposes of determining the amount due under clause (vii) of Section 10.2(a), the definitions and formula set forth in Schedule L hereto shall apply.

(c) For purposes of determining the Monthly Crude Oil True-up Amount for the first month of the Term hereof, and notwithstanding anything to the contrary in Schedule C hereto:

(i) the “Short Crude FIFO Position” as of the end of the prior month (i.e., May 2010) shall equal the lesser of (x) zero and (y) the Commencement Date Crude Oil Volume minus the Target Month End Crude Volume as of the Commencement Date;

(ii) the “Long Crude FIFO Position” as of the end of the prior month shall equal the greater of (x) zero and (y) the Commencement Date Crude Oil Volume minus the Target Month End Crude Volume as of the Commencement Date; and

(iii) the “FIFO Sale Price from Prior Month” shall equal the “Step-in Price” for Crude Oil as determined pursuant to Schedule B hereto.

(d) For the purposes of determining each Monthly Product True-up Amount for the first month of the Term hereof, and notwithstanding anything to the contrary in Schedule C hereto:

(i) the “Short Product FIFO Position” as of the end of the prior month (i.e., May 2010) for a particular Product Group shall equal the lesser of (x) zero and (y) the Commencement Date Product Volume for that Product Group minus the Target Month End Product Volume as of the Commencement Date for that Product Group;

(ii) the “Long Product FIFO Position” as of the end of the prior month shall equal the greater of (x) zero and (y) the Commencement Date Product Volume for that Product Group minus the Target Month End Product Volume as of the Commencement Date for that Product Group; and

(iii) the “Product FIFO Purchase Price from Prior Month” shall equal the “Step-in Price” for such Product Group as determined pursuant to Schedule B hereto.

(e) If the Commencement Date occurs prior to the first day of the first Production Week, then no Monthly True-up Amount shall be due for the period from such Commencement Date through the day preceding the first day of such Production Week and the Monthly True-up Amount for the month of June 2010 shall be determined by using the Commencement Date Crude Oil Volume as the “Actual Month Beginning Crude Volume” for purposes of the computations on Schedule C and the respective Commencement Date Product Volumes as the “Actual Month Beginning Product Volumes” for purposes of the computations on Schedule C, in each case with respect to June 2010.

10.3 Invoices.

(a) Invoices shall be prepared and submitted in accordance to Schedule J hereto.

(b) If the Company in good faith disputes the amount of any invoice issued by Xxxx relating to any amount payable hereunder (including Net Payments, Monthly True-up Amounts or Ancillary Costs), it nonetheless shall pay Xxxx the full amount of such invoice by the due date and inform Xxxx in writing of the portion of the invoice with which it disagrees and why; provided that to the extent that the Company promptly informs Xxxx of a calculation error that is obvious on its face, the Company shall pay Xxxx the undisputed amounts and may retain such disputed amount pending resolution of such dispute. The Parties shall cooperate in resolving the dispute expeditiously. If the Parties agree that the Company does not owe some or all of the disputed amount or as may be determined by a court pursuant to Article 23, Xxxx shall return such amount to the Company, together with interest at the Fed Funds Rate from the date such amount was paid, within two (2) Business Days from, as appropriate, the date of their agreement or the date of the final, non-appealable decision of such court. Following resolution of any such disputed amount, Xxxx will issue a corrected invoice and any residual payment that would be required thereby will be made by the appropriate Party within two (2) Business Days. To the extent that the Existing Procurement Contract permits disputed amounts to be retained pending resolution of disputes, the Parties agree to permit disputed amounts to be retained hereunder on the same terms, notwithstanding anything hereunder to the contrary.

10.4 Other Feedstocks. If Xxxx procures any catfeed or other non-Crude Oil feedstocks for the Company to run at the Refinery, the parties shall agree in connection with such procurement upon terms for incorporating the purchase of such feedstocks into the weekly and monthly settlements contemplated by Sections 10.1 and 10.2 above.

10.5 Interest. Interest shall accrue on late payments under this Agreement at the Default Interest Rate from the date that payment is due until the date that payment is actually received by Xxxx.

10.6 Payment in Full in Same Day Funds. All payments to be made under this Agreement shall be made by telegraphic 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. Except as expressly provided in this Agreement, all payments shall be made in full without discount, offset, withholding, counterclaim or deduction whatsoever for any claims which a Party may now have or hereafter acquire against the other Party, whether pursuant to the terms of this Agreement or otherwise.

ARTICLE 11

INDEPENDENT INSPECTORS; STANDARDS OF MEASUREMENT

11.1 Xxxx shall be entitled to have Supplier’s Inspector present at any time the Volume Determination Procedures are to be applied in accordance with the terms of this Agreement and to observe the conduct of Volume Determination Procedures.

11.2 In addition to its rights under Section 11.1, Xxxx may, from time to time during the Term of this Agreement, upon reasonable prior notice to the Company, at Aron’s own cost and expense, have Supplier’s Inspector conduct surveys and inspections of any of the Storage Facilities or observe any Crude Oil or Product transmission, handling, metering or other activities being conducted at such Storage Facilities or the Delivery Points; provided that such surveys, inspections and observations shall not interfere with the ordinary course of business being conducted at such Storage Facilities or the Refinery.

11.3 In the event that recalibration of meters, gauges or other measurement equipment is requested by Xxxx such as “strapping,” the Parties shall select a mutually agreeable certified and licensed independent petroleum inspection company (the “Independent Inspection Company”) to conduct such recalibration. The cost of the Independent Inspection Company is to be shared equally by the Company and Xxxx.

11.4 Standards of Measurement. All quantity determinations herein will be corrected to sixty (60) degrees Fahrenheit based on a U.S. gallon of two hundred thirty-one (231) cubic inches and forty-two (42) gallons to the Barrel, in accordance with the latest supplement or amendment to ASTM-IP petroleum measurement tables (Table 6A of ASTM-IP for Feedstocks and Table 6B of ASTM-IP for Products).

ARTICLE 12

FINANCIAL INFORMATION; CREDIT SUPPORT; AND ADEQUATE ASSURANCES

12.1 Provision of Financial Information. The Company shall provide Xxxx (i) within ninety (90) days following the end of each of its fiscal years, a copy of the annual report, containing audited consolidated financial statements for such fiscal year certified by independent certified public accountants and (ii) within forty-five (45) days after the end of its first three fiscal quarters of each fiscal year, a copy of the quarterly report, containing unaudited consolidated financial statements for such fiscal quarter; provided that so long as the Company is required to make public filings of its quarterly and annual financial results pursuant to the Exchange Act, such filings are available on the SEC’s XXXXX database and such filings are made in a timely manner, then the Company will not be required to provide such annual or

quarterly financial reports to Xxxx except as provided in the following sentence. To the extent that the Company has agreed to provide any financial statements or other financial information to any noteholder, it will provide such financial information to Xxxx to the same extent and at the same time as such information is provided to such other party. In all cases the statements shall be for the most recent accounting period and prepared in accordance with GAAP or such other principles then in effect.

12.2 Additional Information. Upon reasonable notice, the Company shall provide to Xxxx such additional information as Xxxx may reasonably request to enable it to ascertain the current financial condition of the Company, including product reports in the form of Schedule S hereto.

12.3 Notification of Certain Events. The Company shall notify Xxxx within one (1) Business Day after learning of any of the following events:

(i) The Company’s or any of its Affiliates’ 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; or

(ii) The Company’s or any of its Affiliates’ binding agreement to consolidate or amalgamate with, merge with or into, or transfer all or substantially all of its assets to, another entity (including an Affiliate).

12.4 Credit Support.

(a) As a condition to Aron’s entering into this Agreement, the Company has agreed to provide to Xxxx, as credit support and margin for the prompt and complete performance of all of the Company’s obligations hereunder, the Standby LC, provided that all costs and expenses (including but not limited to the reasonable costs, expenses, and external attorneys’ fees of Xxxx) of establishing, renewing, substituting, canceling, increasing, and reducing the amount of (as the case may be) the Standby LC shall be borne by the Company.

(b) The Standby LC may be transferred by Xxxx only as follows: (i) Xxxx may, without the Company’s consent, transfer the Standby LC to any party that assumes all of Aron’s obligations under this Agreement and the other Transaction Documents, and (ii) Xxxx may, with the Company’s consent, transfer the Standby LC to any party.

(c) Nothing in this Section 12.4 shall limit any rights of Xxxx under any other provision of this Agreement, including under Article 18 below.

(d) For each calendar quarter (or portion thereof) during the Term hereof, commencing on June 1, 2010, Xxxx shall pay to the Company in arrears on each March 31, June 30, September 30 and December 31, an amount equal to 1.20% of the daily average of the Required Available Amount during such quarter (or portion thereof) multiplied by a fraction, the numerator of which is the

aggregate number of days in such period and the denominator of which is 360; provided that, for each quarter (or portion thereof), such amount shall become due and payable only if no Event of Default of the type referred to in clause (j) or (k) of Section 18.1 shall have occurred during such period and, at the time Aron’s payment is due, there is then no uncured payment default by the Company under the Standby Letter of Credit Facility Agreement; and provided further that, if by noon, CPT, on any such payment date the Company has not provided to Xxxx reasonable evidence (such as a wire transfer order and reference number) confirming the Company’s payment of the fee due on that date under the Standby Letter of Credit Facility Agreement, then Aron’s payment pursuant to this provision (subject to the preceding proviso) shall not be due until the next Business Day.

12.5 Adequate Assurances. If, during the Term of this Agreement, a Material Adverse Change has occurred with respect to the Company and is continuing, then Xxxx may notify the Company thereof and demand in writing that the Company provide to Xxxx adequate assurance of the Company’s ability to perform its obligations hereunder. Such adequate assurance may take the form of a prepayment from the Company to Xxxx in such amount as Xxxx reasonably deems sufficient, a provision of additional credit support in the form of letters of credit, third party guaranties and/or collateral security in such forms and amount and provided by such parties as Xxxx reasonably deems sufficient or such other form of assurance as Xxxx reasonably deems sufficient, in each case taking into account such Material Adverse Change. If such adequate assurance is not received within 10 Business Days after such demand by Xxxx, then such failure shall constitute an Event of Default by the Company under clause (h) of Section 18.1.

12.6 Actions Following an LC Event.

(a) If an LC Event of the type described in clause (i) of the definition thereof shall occur with respect to the Standby LC, then Xxxx shall endeavor, in good faith and in a commercially reasonable manner, with the Company’s reasonable cooperation, to arrange for the replacement of such Standby LC with a new Standby LC that has an expiry date occurring at least six (6) months after the issuance date of such replacement Standby LC (or, if earlier, two (2) weeks after the Termination Date) and as to which no LC Event has occurred.

(b) If an LC Event of the type described in clause (ii)(a) of the definition thereof shall occur with respect to the Standby LC, then Xxxx shall endeavor, in good faith and in a commercially reasonable manner, with the Company’s reasonable cooperation, to arrange for either (i) a renewal or extension of such Standby LC for a period of at least six (6) months after the date on which such renewal or extension becomes effective (or, if earlier, two (2) weeks after the Termination Date) or (ii) the replacement of such Standby LC with a new Standby LC that has an expiry date occurring at least 6 months after the issuance date of such replacement Standby LC and as to which no LC Event has occurred.

(c) If an LC Event of the type described in clause (ii)(b) of the definition thereof shall occur with respect to the Standby LC, then Xxxx shall endeavor, in good faith and in a commercially reasonable manner, with the Company’s reasonable cooperation, to arrange for either (i) an amendment of such Standby LC to increase its available amount to the Required Available Amount then in effect or (ii) the replacement of such Standby LC with a new Standby LC that has an expiry date occurring at least six (6) months after the issuance date of such replacement Standby LC (or, if earlier, two (2) weeks after the Termination Date) and as to which no LC Event has occurred.

(d) The Parties acknowledge and agree that the only collateral that will be made available to support the Standby Letter of Credit Facility by the Company shall be the “ABL” collateral as defined in the Indenture and the Intercreditor Agreement related thereto.

12.7 Failure to Cure an LC Event.

(a) Subject to Section 12.7(b), if an LC Event has occurred with respect to the Standby LC and the Standby LC has not been renewed, extended, amended or replaced as provided in Section 12.6 above within thirty (30) days after the occurrence of such LC Event, then for so long as such LC Event continues, Xxxx may, at its option, require by written notice to the Company that the Parties terminate this Agreement on a date occurring at least fifteen (15) days prior to the expiry date of such Standby LC in accordance with the provisions of Article 19. If Xxxx makes such election, but the Parties are unable to effect such termination at least fifteen (15) days prior to such expiry date, then at any time thereafter Xxxx shall be entitled to draw under the Standby LC to the extent it is then available; provided that nothing in this provision shall be deemed to limit Aron’s right to draw under the Standby LC in connection with the occurrence of any other Event of Default hereunder.

(b) If, despite its endeavors under Section 12.6(a), (b) or (c), as applicable, Xxxx does not procure a replacement Standby LC and at the time Xxxx so endeavored, one or more Affiliates of Xxxx were not prevented by Applicable Law or internal policies or procedures from issuing a standby letter of credit to Xxxx and such issuances would not impose prohibitive or extraordinary costs or charges (including capital charges) on such Affiliates, then such LC Event shall not become an LC Default.

ARTICLE 13

REFINERY TURNAROUND, MAINTENANCE AND CLOSURE

13.1 The Company shall promptly notify Xxxx in writing of the date for which any maintenance or turnaround at the Refinery has been scheduled, or any revision to previously scheduled maintenance or turnaround, which may affect receipts of Crude Oil at the Refinery or the Storage Facilities, the processing of Crude Oil in the Refinery or the delivery of Products to

Xxxx or by Xxxx to any third parties; provided that, in any event, such notice shall have been given at least twenty (20) Business Days prior to the commencement of such maintenance or turnaround. The Parties shall cooperate with each other in establishing maintenance and turnaround schedules that do not unnecessarily interfere with the receipt of Crude Oil that Xxxx has committed to purchase or the delivery of Products that Xxxx has committed to sell.

13.2 The Company immediately shall notify Xxxx orally (followed by prompt written notice) of any previously unscheduled downtime, maintenance or turnaround and its expected duration.

13.3 In the event of a scheduled shutdown of the Refinery, the Company shall, to the extent feasible, complete processing of all Crude Oil being charged to, processed at or consumed in the Refinery at that time.

ARTICLE 14

TAXES

14.1 The Company shall pay and indemnify and hold Xxxx harmless against, the amount of all sales, use, gross receipts, value added, severance, valorem, excise, property, spill, environmental, transaction-based, or similar taxes, duties and fees, howsoever designated (each, a “Tax” and collectively, “Taxes”) regardless of the taxing authority, and all penalties and interest thereon, paid, owing, asserted against, or incurred by Xxxx directly or indirectly with respect to the Crude Oil procured and sold, and the Products purchased and resold, and other transactions contemplated hereunder to the greatest extent permitted by applicable law; in the event that the Company is not permitted to pay such Taxes, the amount due hereunder shall be adjusted such that the Company shall bear the economic burden of the Taxes. The Company shall pay when due such Taxes unless there is an applicable exemption from such Tax, with written confirmation of such Tax exemption to be contemporaneously provided to Xxxx. To the extent Xxxx is required by law to collect such Taxes, one hundred percent (100%) of such Taxes shall be added to invoices as separately stated charges and paid in full by the Company in accordance with this Agreement, unless the Company is exempt from such Taxes and furnishes Xxxx with a certificate of exemption. Xxxx shall be responsible for all taxes imposed on Aron’s net income.

14.2 If the Company disagrees with Aron’s determination that any Tax is due with respect to transactions under this Agreement, the Company shall have the right to seek an administrative determination from the applicable taxing authority, or, alternatively, the Company shall have the right to contest any asserted claim for such Taxes in its own name, subject to its agreeing to indemnify Xxxx for the entire amount of such contested Tax (including any associated interest and/or late penalties) should such Tax be deemed applicable. Xxxx agrees to reasonably cooperate with the Company, at the Company’s cost and expense, in the event the Company determines to contest any such Taxes.

14.3 The Company and Xxxx shall promptly inform each other in writing of any assertion by a taxing authority of additional liability for Taxes in respect of said transactions. Any legal proceedings or any other action against Xxxx with respect to such asserted liability

shall be under Aron’s direction but the Company shall be consulted. Any legal proceedings or any other action against the Company with respect to such asserted liability shall be under the Company’s direction but Xxxx shall be consulted. In any event, the Company and Xxxx shall fully cooperate with each other as to the asserted liability. Each party shall bear all the reasonable costs of any action undertaken by the other at the Party’s request.

14.4 Any other provision of this Agreement to the contrary notwithstanding, this Article 14 shall survive until ninety (90) days after the expiration of the statute of limitations for the assessment, collection, and levy of any Tax.

ARTICLE 15

INSURANCE

15.1 Insurance Coverages. The Company shall procure and maintain in full force and effect throughout the Term of this Agreement insurance coverages of the following types and amounts and with insurance companies rated not less than A- by A.M. Best, or otherwise equivalent in respect of the Company’s properties and operations:

(a) Property damage coverage on an “all risk” basis in an amount sufficient to cover the market value or potential full replacement cost of all Crude Oil to be delivered to the Company at the Crude Delivery Point and all Products to be delivered to Xxxx at the Products Delivery Point. In the event that the market value or potential full replacement cost of all Crude Oil and Products exceeds the insurance limits available or the insurance limits available at commercially reasonable rates in the insurance marketplace, the Company will maintain the highest insurance limit available at commercially reasonable rates; provided, however, that the Company will promptly notify Xxxx of the Company’s inability to fully insure any Crude Oil and Products and provide full details of such inability. Such policies shall be endorsed to name Xxxx as a loss payee with respect to any of Aron’s Crude Oil or Product in the care, custody or control of the Company. Notwithstanding anything to the contrary herein, Xxxx, may, at its option and expense, endeavor to procure and provide such property damage coverage for the Crude Oil and Products; provided that to the extent any such insurance is duplicative with insurance procured by the Company, the insurance procured by the Company shall in all cases represent, and be written to be, the primary coverage.

(b) Comprehensive or commercial general liability coverage and umbrella or excess liability coverage, which includes bodily injury, broad form property damage and contractual liability, products and completed operations liability and “sudden and accidental pollution” liability coverage in the minimum amounts indicated on Schedule F hereto. Such policies shall include Xxxx as an additional insured with respect to any of Aron’s Crude Oil or Products in the care, custody or control of the Company.

15.2 Additional Insurance Requirements.

(a) The foregoing policies shall include an endorsement that the underwriters waive all rights of subrogation against Xxxx.

(b) The Company shall cause its insurance carriers to xxxxxxx Xxxx with insurance certificates, in Xxxxx form or equivalent, evidencing the existence of the coverages and the endorsements required above. The certificates shall specify that insurer will endeavor to mail thirty (30) days written notice prior to cancellation of insurance becoming effective. The Company also shall provide renewal certificates within thirty (30) days before expiration of the policy.

(c) The mere purchase and existence of insurance does not reduce or release either Party from any liability incurred or assumed under this Agreement.

(d) The Company shall comply with all notice and reporting requirements in the foregoing policies and timely pay all premiums.

ARTICLE 16

FORCE MAJEURE

16.1 If a Party is rendered unable by an event of Force Majeure to perform in whole or in part any obligation or condition of this Agreement (the “Affected Party”), it shall not be liable to the other Party to perform such obligation or condition (except for payment and indemnification obligations) for so long as the event of Force Majeure exists and to the extent that performance is hindered by such event of Force Majeure; provided, however, that the Affected Party shall use any commercially reasonable efforts to avoid or remove the event of Force Majeure. During the period that performance by the Affected Party of a part or whole of its obligations has been suspended by reason of an event of Force Majeure, the other Party (the “Non-Affected Party”) likewise may suspend the performance of all or a part of its obligations to the extent that such suspension is commercially reasonable, except for any payment and indemnification obligations. The Parties acknowledge that if, as a result of a Force Majeure, the Company were to suspend its receipt and/or processing of Crude Oil, then Xxxx would be entitled to suspend, to a comparable extent, its purchasing of Products.

16.2 The Affected Party shall give prompt oral notice to the Non-Affected Party of its declaration of an event of Force Majeure, to be followed by written notice within twenty-four (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 Crude Oil or Products affected. The Affected Party also shall promptly notify the Non-Affected Party when the event of Force Majeure is terminated. However, the failure or inability of the Affected Party to provide such notice within the time periods specified above shall not preclude it from declaring an event of Force Majeure.

16.3 In the event the Affected Party’s performance is suspended due to an event of Force Majeure in excess of thirty (30) consecutive days after the date that notice of such event is given, and so long as such event is continuing, the Non-Affected Party, in its sole discretion, may terminate or curtail its obligations under this Agreement affected by such event of Force Majeure

(the “Affected Obligations”) by giving notice of such termination or curtailment to the Affected Party, and neither Party shall have any further liability to the other in respect of such Affected Obligations to the extent terminated or curtailed, except for the rights and remedies previously accrued under this Agreement, any payment and indemnification obligations by either Party under this Agreement and the obligations set forth in Article 19.

16.4 If any Affected Obligation is not terminated pursuant to this Article 16 or any other provision of this Agreement, performance shall resume to the extent made possible by the end or amelioration of the event of Force Majeure in accordance with the terms of this Agreement; provided, however, that the term of this Agreement shall not be extended.

16.5 The Parties acknowledge and agree that the right of Xxxx to declare a Force Majeure based upon any failure by a Third Party Supplier to deliver Crude Oil under a Procurement Contract is solely for purposes of determining the respective rights and obligations as between Xxxx and the Company with respect to any Crude Oil delivery affected thereby, and any such declaration shall not excuse the default of such Third Party Supplier under one or more Procurement Contracts. Any claims that Xxxx may have as a result of such Third Party Supplier’s failure shall be subject to Section 5.9 hereof and any other applicable provisions of this Agreement relating to claims against third parties.

ARTICLE 17

REPRESENTATIONS, WARRANTIES AND COVENANTS

17.1 Mutual Representations. Each Party represents and warrants to the other Party as of the Effective Date and each sale of Crude Oil hereunder, that:

(a) It is an “Eligible Contract Participant” as defined in Section 1a(12) of the Commodity Exchange Act, as amended.

(b) It is a “forward contract merchant” in respect of this Agreement and this Agreement and each sale of Crude Oil or Products hereunder constitutes a “forward contract,” as such term is used in Section 556 of the Bankruptcy Code.

(c) It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and in good standing under such laws.

(d) It has the corporate, governmental or other legal capacity, authority and power to execute and deliver the Transaction Documents and to perform its obligations under this Agreement, and has taken all necessary action to authorize the foregoing.

(e) The execution, delivery and performance of the Transaction Documents and the performance of its obligations thereunder and the consummation of the transactions contemplated thereby do not violate or conflict with any Applicable Law, any provision of its constitutional documents, any order

or judgment of any court or Governmental Authority applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets.

(f) All governmental and other authorizations, approvals, consents, notices and filings that are required to have been obtained or submitted by it with respect to the Transaction Documents 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.

(g) Its obligations under the Transaction Documents constitute its legal, valid and binding obligations, enforceable in accordance with its 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).

(h) No Event of Default or 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 the Transaction Documents.

(i) There is not pending or, to its knowledge, threatened against it or any of its Affiliates 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 the Transaction Documents.

(j) It is not relying upon any representations of the other Party other than those expressly set forth in this Agreement.

(k) It has entered into this Agreement as principal (and not as advisor, agent, broker or in any other capacity, fiduciary or otherwise), with a full understanding of the material terms and risks of the same, and is capable of assuming those risks.

(l) It has made its trading and investment decisions (including their suitability) based upon its own judgment and any advice from its advisors as it has deemed necessary and not in reliance upon any view expressed by the other Party.

(m) The 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.

(n) It is not bound by any agreement that would preclude or hinder its execution, delivery, or performance of this Agreement.

(o) 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 Crude Oil or Products hereunder who is entitled to any compensation with respect thereto.

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 this Agreement.

17.2 Company’s Covenants.

(a) In the case of any Bankruptcy with respect to the Company, and to the extent permitted by applicable law, the Company intends that (i) Aron’s right to liquidate, collect, net and set off rights and obligations under this Agreement and liquidate and terminate this Agreement shall not be stayed, avoided, or otherwise limited by the Bankruptcy Code, including sections 362(a), 547, 548 or 553 thereof; (ii) Xxxx shall be entitled to the rights, remedies and protections afforded by and under, among other sections, sections 362(b)(6), 362(b)(17), 362((b)(27), 362(o), 546(e), 546(g), 546(j), 548(d), 553, 556, 560, 561 and 562 of the Bankruptcy Code; and (iii) any cash, securities or other property provided as performance assurance, credit, support or collateral with respect to the transactions contemplated hereby shall constitute “margin payments” as defined in section 101(38) of the Bankruptcy Code and all payments for, under or in connection with the transactions contemplated hereby, shall constitute “settlement payments” as defined in section 101(51A) of the Bankruptcy Code.

(b) The Company 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 security interest, lien, encumbrance, charge or other claim of any nature with respect to, any quantities of Crude Oil prior to the delivery thereof by Xxxx to the Company at the Feedstock Delivery Point or any quantities of Products after delivery thereof to Xxxx at the Product Delivery Point (collectively, “Aron’s Property”). The Company authorizes Xxxx to file at any time and from time to time any Uniform Commercial Code financing statements describing the quantities of Aron’s Property subject to this Agreement and Aron’s ownership thereof and title thereto, and the Company shall execute and deliver to Xxxx, and the Company hereby authorize Xxxx to file (with or without the Company’s signature), at any time and from time to time, all amendments to financing statements, assignments, continuation financing statements, termination statements, and other documents and instruments, in form reasonably satisfactory to Xxxx, as Xxxx may reasonably request, to provide public notice of Aron’s ownership of and title to the quantities of Aron’s Property subject to this Agreement and to otherwise protect Aron’s interest therein.

17.3 Acknowledgment. The Company acknowledges and agrees that (1) Xxxx is a merchant of Crude Oil and may, from time to time, be dealing with prospective counterparties, or pursuing trading or hedging strategies, in connection with aspects of Aron’s business which are

unrelated hereto and that such dealings and such trading or hedging strategies may be different from or opposite to those being pursued by or for the Company, (2) Xxxx may, in its sole discretion, determine whether to advise the Company of any potential transaction with a Third Party Supplier and prior to advising the Company of any such potential transaction Xxxx may, in its discretion, determine not to pursue such transaction or to pursue such transaction in connection with another aspect of Aron’s business and Xxxx shall have no liability of any nature to the Company as a result of any such determination, (3) Xxxx has no fiduciary or trust obligations of any nature with respect to the Refinery or the Company, (4) Xxxx may enter into transactions and purchase Crude Oil or Products for its own account or the account of others at prices more favorable than those being paid by the Company hereunder and (5) nothing herein shall be construed to prevent Xxxx, or any of its partners, officers, employees or Affiliates, in any way from purchasing, selling or otherwise trading in Crude Oil, Products or any other commodity for its or their own account or for the account of others, whether prior to, simultaneously with or subsequent to any transaction under this Agreement.

ARTICLE 18

DEFAULT AND TERMINATION

18.1 Events of Default. Notwithstanding any other provision of this Agreement, the occurrence of any of the following shall constitute an “Event of Default”:

(a) Either Party fails to make payment when due (i) under Section 10.1 or 10.2 hereof, Article 19 hereof or any Company Purchase Agreement within one (1) Business Day after a written demand therefor or (ii) under any other provision hereof or any other Transaction Document within five (5) Business Days; or

(b) Other than a default described in Sections 18.1(a) and 18.1(c), either Party fails to perform any material obligation or covenant to the other under this Agreement or any other Transaction Document, which is not cured to the reasonable satisfaction of the other Party (in its sole discretion) within ten (10) Business Days after the date that such Party receives written notice that such obligation or covenant has not been performed; or

(c) Either Party breaches any material representation or material warranty made or repeated or deemed to have been made or repeated by the Party, 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 the Transaction Documents; provided, however, that if such breach is curable, such breach is not cured to the reasonable satisfaction of the other Party within ten (10) Business Days after the date that such Party receives notice that corrective action is needed; or

(d) Either Party becomes Bankrupt; or

(e) Either Party or any of its Designated Affiliates (1) defaults under a Specified Transaction and, after giving effect to any applicable notice requirement

or grace period, there occurs a liquidation of, an acceleration of obligations under, or any early termination of, that Specified Transaction, (2) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last payment, delivery or exchange date of, or any payment on early termination of, a Specified Transaction (or such default continues for at least three (3) Business Days if there is no applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf); or

(f) The Company or any of its Affiliates sells, leases, subleases, transfers or otherwise disposes of, in one transaction or a series of related transactions, all or a material portion of the assets of the Refinery; or

(g) The Company or any of its Affiliates (i) consolidates or amalgamates with, merges with or into, or transfers all or substantially all of its assets to, another entity (including an Affiliate) or any such consolidation, amalgamation, merger or transfer is consummated, and (ii) (A)the successor entity resulting from any such consolidation, amalgamation or merger or the Person that otherwise acquires all or substantially all of the assets of the Company or any of its Affiliates does not assume, in a manner satisfactory to Xxxx, all of the Company’s obligations hereunder and under the other Transaction Documents, or (B) in the reasonable judgment of Xxxx, the creditworthiness of the resulting, surviving or transferee entity, taking into account any guaranties, is materially weaker than the Company immediately prior to the consolidation, amalgamation, merger or transfer; or

(h) The Company fails to provide Adequate Assurance in accordance with Section 11.3; or

(i) There shall occur either (A) a default, event of default or other similar condition or event (however described) in respect of the Company or any of its Affiliates under one or more agreements or instruments relating to Specified Indebtedness in an aggregate amount of not less than $20,000,000 which has resulted in such Specified Indebtedness becoming due and payable under such agreements and instruments before it would have otherwise been due and payable or (B) a default by the Company 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 $20,000,000 under such agreements or instruments (after giving effect to any applicable notice requirement or grace period); or

(j) An “Event of Default” as defined under the Standby Letter of Credit Facility Agreement shall have occurred and be continuing or an “Event of Default” as defined under the Indenture, dated as of October 2, 2009, among the Company, the guarantors thereto (if any) and Wilmington Trust FSB, as trustee

and collateral agent relating to the Company’s 13 ¹/2 % Senior Secured Notes Due 2014 (the “Indenture”) shall have occurred and be continuing; or

(k) An LC Default.

The Company shall be the Defaulting Party upon the occurrence of any of the events described in clauses (f), (g), (h), (i), (j) and (k) above.

18.2 Remedies Upon Event of Default.

(a) Notwithstanding any other provision of this Agreement, if any Event of Default with respect to the Company, on the one hand, or Xxxx, on the other hand (such defaulting Party, the “Defaulting Party”) has occurred and is continuing, Xxxx (where the Company is the Defaulting Party) or the Company (where Xxxx is the Defaulting Party) (such non-defaulting Party or Parties, the “Non-Defaulting Party”) may, without notice, (i) declare all of the Defaulting Party’s 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 Party and/or (ii) subject to Section 18.2(c), exercise any rights and remedies provided or available to the Non-Defaulting Party under this Agreement or at law or equity, including all remedies provided under the Uniform Commercial Code and as provided under this Section 18.2.

(b) Notwithstanding any other provision of this Agreement, if an Event of Default has occurred and is continuing with respect to the Defaulting Party, the Non-Defaulting Party shall have the right, immediately and at any time(s) thereafter, to terminate this Agreement (and any other contract or agreement that may then be outstanding among the Parties that relates specifically to this Agreement, including any Transaction Document) and, subject to Section 18.2(c), to liquidate and terminate any or all rights and obligations under this Agreement. The Settlement Amount (as defined below) shall be calculated in a commercially reasonable manner based on such liquidated and terminated rights and obligations and shall be payable by one Party to the others. The “Settlement Amount” shall mean the amount, expressed in U.S. Dollars, of losses and costs that are or would be incurred by the Non-Defaulting Party (expressed as a positive number) or gains that are or would be realized by the Non-Defaulting Party (expressed as a negative number) as a result of the liquidation and termination of all rights and obligations under this Agreement. The determination of the Settlement Amount shall include (without duplication): (w) all reasonable losses and costs (or gains) incurred or realized by the Non-Defaulting Party, as a result of maintaining, terminating or obtaining any Related Hedge, (x) the losses and costs (or gains) incurred or realized by the Non-Defaulting Party in terminating, transferring, redeploying or otherwise modifying any outstanding Procurement Contracts and (y) the losses and costs (or gains) incurred or realized by the Non-Defaulting Party to the extent it elects to dispose of any Crude Oil inventories maintained for purposes of this Agreement. If the Settlement Amount is a

positive number it shall be due to the Non-Defaulting Party and if it is a negative number, the absolute value thereof shall be due to the Defaulting Party.

(c) The Settlement Amount shall be determined by the Non-Defaulting Party, acting in good faith, in a commercially reasonable manner. The Non-Defaulting Party shall determine the Settlement Amount commencing as of the date on which such termination occurs by reference to such futures, forward, swap and options markets as it shall select in its commercially reasonable judgment; provided that the Non-Defaulting Party is not required to effect such terminations and/or determine the Settlement Amount on a single day, but rather may effect such terminations and determine the Settlement Amount over a commercially reasonable period of time (the last day of which period shall be the “Early Termination Date”). In calculating the Settlement Amount, the Non-Defaulting Party shall discount to present value (in any commercially reasonable manner based on London interbank rates for the applicable period and currency) any amount which would be due at a later date and shall add interest (at a rate determined in the same manner) to any amount due prior to the date of the calculation.

(d) Without limiting any other rights or remedies hereunder, if an Event of Default has occurred and is continuing and Xxxx is the Non-Defaulting Party, Xxxx may, in its discretion, (i) withhold or suspend its obligations, including any of its delivery or payment obligations, under this Agreement, (ii) withdraw from storage any and all of the Crude Oil and/or Products then in the Storage Facilities by the Company, any of its Affiliates or any other parties on behalf of the Company or any such Affiliate, (iii) otherwise arrange for the disposition of any Crude Oil and/or Products subject to outstanding Procurement Contracts and/or the modification, settlement or termination of such outstanding Procurement Contracts in such manner as it elects and (iv) liquidate in a commercially reasonable manner any Credit Support or other margin or collateral, to the extent not already in the form of cash (including drawing down the Standby LC or any other letters of credit held as margin or collateral) and apply and set off such Credit Support, margin or collateral or the proceeds thereof against any obligation owing by the Company to Xxxx. Xxxx shall be under no obligation to prioritize the order with respect to which it exercises any one or more rights and remedies available hereunder. The Company shall in all events remain liable to Xxxx for any amount payable by the Company in respect of any of its obligations remaining unpaid after any such liquidation, application and set off.

(e) Without limiting any other rights or remedies hereunder, if an Event of Default has occurred and is continuing and the Company is the Non-Defaulting Party, the Company may, in its discretion, (i) withhold or suspend its obligations, including any of its delivery or payment obligations, under this Agreement and/or (ii) otherwise arrange for the settlement or termination of the parties’ outstanding commitments hereunder, the sale in a commercially reasonable manner of Crude Oil and/or Product for Aron’s account, and the

replacement of the supply and offtake arrangement contemplated hereby with such alternative arrangements as it may procure.

(f) The Non-Defaulting Party shall set off (i) the Settlement Amount (if due to the Defaulting Party), plus any performance security (including Credit Support or any other margin or collateral) then held by the Non-Defaulting Party pursuant to the Transaction Documents, plus (at the Non-Defaulting Party’s election) any or all other amounts due to the Defaulting Party hereunder (including under Article 10), against (ii) the Settlement Amount (if due to the Non-Defaulting Party), plus any performance security (including Credit Support or any other margin or collateral) then held by the Defaulting Party, plus (at the Non-Defaulting Party’s election) any or all other amounts due to the Non-Defaulting Party hereunder (including under Article 10), so that all such amounts shall be netted to a single liquidated amount payable by one Party to the other (the “Liquidated Amount”). The Party with the payment obligation shall pay the Liquidated Amount to the applicable other Parties within one Business Day after such amount has been determined.

(g) No delay or failure on the part of the Non-Defaulting Party in exercising any right or remedy to which it may be entitled on account of any Event of Default shall constitute an abandonment of any such right, and the Non-Defaulting Party shall be entitled to exercise such right or remedy at any time during the continuance of an Event of Default.

(h) The Non-Defaulting Party’s rights under this Section shall be in addition to, and not in limitation or exclusion of, any other rights which the Non-Defaulting Party may have (whether by agreement, operation of law or otherwise), including any rights of recoupment, setoff, combination of accounts or other rights under any credit support that may from time to time be provided in connection with this Agreement. The Defaulting Party shall indemnify and hold the Non-Defaulting Party harmless from all reasonable costs and expenses, including reasonable attorney fees, incurred in the exercise of any remedies hereunder.

(i) If an Event of Default has occurred and is continuing, the Non-Defaulting Party may, without limitation on its rights under this Section, set off amounts which the Defaulting Party owes to it against any amounts which it owes to the Defaulting Party (whether hereunder, under any other contract or agreement or otherwise and whether or not then due).

(j) The Parties acknowledge and agree that this Agreement is intended to be a “master netting agreement” as such term is defined in section 101(38A) of the Bankruptcy Code.

ARTICLE 19

SETTLEMENT AT TERMINATION

19.1 Upon expiration or termination of this Agreement for any reason other than as a result of an Event of Default (in which case the Expiration Date (or any other date that may be agreed by the parties) shall be the “Termination Date”), the Parties covenant and agree to proceed as provided in this Article 19; provided that (x) this Agreement shall continue in effect following any Termination Date until all obligations are finally settled as contemplated by this Article 19 and (y) the provisions of this Article 19 shall in no way limit the rights and remedies which the Non-Defaulting Party may have as a result of an Event of Default, whether pursuant to Article 18 above or otherwise:

(a) If any Procurement Contract does not either (i) by its terms (or the terms under which it was originally assigned to Xxxx) automatically become assigned (or reassigned) to the Company on and as of the Termination Date in a manner which releases Xxxx from all obligations thereunder for all periods following the Termination Date or (ii) by its terms, expire or terminate on and as of the Termination Date, then the Parties shall promptly negotiate and enter into, with each of the then existing Third Party Suppliers, assignments, assumptions and/or such other documentation, in form and substance reasonably satisfactory to the Parties, pursuant to which, as of the Termination Date, (i) such Procurement Contract shall be assigned (or reassigned) to the Company or shall be terminated, (ii) all rights and obligations of Xxxx under each of the then outstanding Procurement Contracts shall be assigned to the Company, (iii) the Company shall assume all of such obligations to be paid or performed following such termination, and (iv) Xxxx shall be released by such Third Party Suppliers and the Company from any further obligations thereunder. In connection with the assignment or reassignment of any Procurement Contract, the Parties shall endeavor, in a commercially reasonable manner, to facilitate the transitioning of the supply and payment arrangements, including any change in payment terms, under the relevant Procurement Contracts so as to prevent any material disruption in the supply of Crude Oil thereunder.

(b) If, pursuant to the Marketing and Sales Agreement, any sales commitments are outstanding which, by their terms, extend beyond the Termination Date, then the Parties shall promptly negotiate and enter into, with each of the purchasers thereunder, assignments, assumptions and/or such other documentation, in form and substance reasonably satisfactory to the Parties, pursuant to which, as of the Termination Date, (i) such sales commitment shall be assigned (or reassigned) to the Company or shall be terminated, (ii) all rights and obligations of Xxxx with respect to each then outstanding sales commitment shall be assigned to the Company, (iii) the Company shall assume all of such obligations to be paid or performed following such termination, and (iv) Xxxx shall be released by the purchasers thereunder and the Company from any further obligations with respect to such sales commitments. In connection with the assignment or reassignment of any Procurement Contract, the Parties shall endeavor, in a commercially reasonable manner, to facilitate the transitioning of the Product marketing and sales arrangements so as to prevent any material disruption in the distribution of Products from the Refinery.

(c) In the event that Xxxx has become a party to any other third party service contract in connection with this Agreement and the transactions contemplated hereby, including any pipeline, terminalling, storage and shipping arrangement (an “Ancillary Contract”) and such Ancillary Contract does not by its terms expire or terminate on and as of the Termination Date, then the Parties shall promptly negotiate and enter into with each service provider thereunder such instruments or other documentation, in form and substance reasonably satisfactory to the Parties, pursuant to which as of the Termination Date (i) such Ancillary Contract shall be assigned to the Company or shall be terminated, (ii) all rights and obligations of Xxxx with respect to each then outstanding Ancillary Contract shall be assigned to the Company, (iii) the Company shall assume all of such obligations to be paid or performed following such termination, and (iv) Xxxx shall be released by the third party service providers thereunder and the Company from any further obligations with respect to such Ancillary Contract.

(d) The Parties shall enter into the Step-Out Inventory Sales Agreement, pursuant to which the volume of Crude Oil and Products in the Storage Tanks shall be purchased and transferred as contemplated therein. The Crude Oil volumes measured by the Independent Inspector at the Termination Date and recorded in the Independent Inspector’s final inventory report shall be the “Termination Date Crude Oil Volumes” for the purposes of this Agreement and the Product volumes measured by the Independent Inspector at the Termination Date and recorded in the Independent Inspector’s final inventory report shall be the “Termination Date Product Volumes” for purposes of this Agreement, and such Termination Date Crude Oil Volumes and Termination Date Product Volumes shall collectively be referred to as the “Termination Date Volumes”.

(e) Xxxx shall promptly reconcile and determine the Termination Amount pursuant to Section 19.2. The Parties shall promptly exchange all information necessary to determine the estimates and final calculations contemplated by Section 19.2.

(f) Xxxx shall have no further obligation to purchase and shall not purchase or pay for Crude Oil or Products, or incur any such purchase obligations on and after the Termination Date. Except as may be required for Xxxx to fulfill its obligations hereunder until the Termination Date or during any obligatory notice period pursuant to any Procurement Contract, Xxxx shall not be obligated to purchase, take title to or pay for any Crude Oil or Products following the Termination Date or such earlier date as the Parties may determine in connection with the transitioning of such supply arrangements to the Company. Notwithstanding anything to the contrary herein, no Delivery Date shall occur later than the calendar day immediately preceding the Termination Date.

19.2 Termination Amount.

(a) The “Termination Amount” shall equal:

(i) the Termination Date Purchase Value, which is the aggregate amount payable to Xxxx under the Step-Out Inventory Sales Agreement, plus

(ii) all unpaid amounts payable hereunder by the Company to Xxxx in respect of Crude Oil delivered on or prior to the Termination Date, plus

(iii) all Ancillary Costs incurred through the Termination Date that have not yet been paid or reimbursed by the Company, plus

(iv) in the case of an agreed early termination, the amount reasonably determined by Xxxx as the breakage costs it incurred in connection with the termination, unwinding or redeploying of all Related Xxxxxx as a result of such early termination, plus

(v) the aggregate amount due under Section 10.2(a) hereof, calculated as of the Termination Date with such date being the final day of the last monthly period for which such calculations are to be made under this Agreement; provided that, if such amount under Section 10.2(a) is due to Xxxx, then such amount will be included in this Termination Amount as a positive number and if such amount under Section 10.2(a) is due to the Company, then such amount will be included in this Termination Amount as a negative number;

(vi) any FIFO Balance Final Settlement that is determined to be due pursuant to Schedule N hereto; provided that, if such FIFO Balance Final Settlement is due to Xxxx, then such amount will be included in this Termination Amount as a positive number and if such amount under Section 10.2(a) would be due to the Company, then such amount will be included in this Termination Amount as a negative number;

(vii) all unpaid amounts payable hereunder by Xxxx to the Company in respect of Product delivered on or prior to the Termination Date, minus

(viii) all amounts due from Xxxx to the Company under the Marketing and Sales Agreement for services provided up to the Termination Date, minus

(ix) the amount of the Deferred Portion.

All of the foregoing amounts shall be aggregated or netted to a single liquidated amount owing from one Party to the other. If the Termination Amount is a positive number, it shall be due to Xxxx and if it is a negative number, the absolute value thereof shall be due to the Company.

(b) The Parties acknowledge that one or more of the components of the Termination Amount will not able to be definitively determined by the Termination Date and therefore agree that Xxxx shall, in a commercially reasonable manner, estimate each of such components and use such estimated components to determine an estimate of the Termination Amount (the “Estimated Termination Amount”) plus such additional amount which Xxxx shall reasonably determine (the “Termination Holdback Amount”); provided that the Termination Holdback Amount shall not exceed the Deferred Portion and shall be added to the Estimated Termination Amount as an amount due to Xxxx. Without limiting the generality of the foregoing, the Parties agree that the amount due under Section

19.2(a)(i) above shall be estimated by Xxxx in the same manner and using the same methodology as it used in preparing the Estimated Commencement Date Value, but applying the Step-Out Prices as indicated on Schedule B hereto and other price terms provided for herein with respect to the purchase of the Termination Date Volumes. Xxxx shall use its commercially reasonable efforts to prepare, and provide the Company with, an initial Estimated Termination Amount, together with appropriate supporting documentation, at least five (5) Business Days prior to the Termination Date. To the extent reasonably practicable, Xxxx shall endeavor to update its calculation of the Estimated Termination Amount by no later than 12:00 noon CPT on the Business Day prior to the Termination Date. If Xxxx is able to provide such updated amount, that amount shall constitute the Estimated Termination Amount and shall be due and payable by no later than 5:00 p.m. CPT on the Business Day preceding the Termination Date. Otherwise, the initial Estimated Termination Amount shall be the amount payable on the Termination Date. If the Estimated Termination Amount is a positive number, it shall be due to Xxxx and if it is a negative number, the absolute value thereof shall be due to the Company.

(c) Xxxx shall prepare, and provide the Company with, (i) a statement showing the calculation, as of the Termination Date, of the Termination Amount, (ii) a statement (the “Termination Reconciliation Statement”) reconciling the Termination Amount with the sum of the Estimated Termination Amount pursuant to Section 19.2(b) and the Termination Holdback Amount and indicating any amount remaining to be paid by one party to the other as a result of such reconciliation. Within one (1) Business Day after receiving the Termination Reconciliation Statement and the related supporting documentation, the Parties will make any and all payments required pursuant thereto. Promptly after receiving such payment, Xxxx shall cause any filing or recording of any Uniform Commercial Code financing forms to be terminated.

19.3 Transition Services. To the extent necessary to facilitate the transition to the Purchasers of the storage and transportation rights and status contemplated hereby, each Party shall take such additional actions, execute such further instruments and provide such additional assistance as the other Party may from time to time reasonably request for such purposes.

ARTICLE 20

INDEMNIFICATION

20.1 To the fullest extent permitted by Applicable Law and except as specified otherwise elsewhere in the Transaction Documents, Xxxx shall defend, indemnify and hold harmless the Company, its Affiliates, and their directors, officers, employees, representatives, agents and contractors for and against any Liabilities directly or indirectly arising out of (i) any breach by Xxxx of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of Xxxx made herein or in connection herewith proving to be false or misleading, (ii) any failure by Xxxx to comply with or observe any Applicable Law, (iii) Aron’s negligence or willful misconduct, or (iv) injury, disease, or death of any person or

damage to or loss of any property, fine or penalty, any of which is caused by Xxxx or its employees, representatives, agents or contractors in exercising any rights or performing any obligations hereunder or in connection herewith, 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 the Company, its Affiliates or any of their respective employees, representatives, agents or contractors.

20.2 To the fullest extent permitted by Applicable Law and except as specified otherwise elsewhere in this Agreement, the Company shall defend, indemnify and hold harmless Xxxx, its Affiliates, and their directors, officers, employees, representatives, agents and contractors for and against any Liabilities directly or indirectly arising out of (i) any breach by the Company of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of the Company made herein or in connection herewith proving to be false or misleading, including, without limitation the Company’s obligation for payment of taxes pursuant to Section 14.1, (ii) the Company’s transportation, handling, storage, refining or disposal of any Crude Oil or the products thereof, (iii) the Company’s negligence or willful misconduct, (iv) any failure by the Company to comply with or observe any Applicable Law, or (v) injury, disease, or death of any person or damage to or loss of any property, fine or penalty, any of which is caused by the Company or its employees, representatives, agents or contractors in exercising any rights or performing any obligations hereunder or in connection herewith, 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 Xxxx, its Affiliates or any of their respective employees, representatives, agents or contractors.

20.3 The Parties’ obligations to defend, indemnify, and hold each other harmless under the terms of the Transaction Documents 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 the Transaction Documents.

20.4 Each Party agrees to notify the other as soon as practicable after receiving notice of any claim or 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; provided, that, the failure to give such notice shall not affect the indemnification provided hereunder, except to the extent that the indemnifying Party is materially adversely affected by such failure. 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 an Event of Default by the indemnifying Party under this Agreement which shall have occurred and be continuing.

ARTICLE 21

LIMITATION ON DAMAGES

Unless otherwise expressly provided in this Agreement, the Parties’ liability for damages is limited to direct, actual damages only (which include any amounts determined under Article 18)

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; provided, however, that, such limitation shall not apply with respect to (i) any third party claim for which indemnification is available under this Agreement or (ii) any breach of Article 23. Each Party acknowledges the duty to mitigate damages hereunder.

ARTICLE 22

AUDIT AND INSPECTION

22.1 During the Term of this Agreement each Party and its duly authorized representatives, upon reasonable notice and during normal working hours, shall have access to the accounting records and other documents maintained by the other Party, or any of the other Party’s contractors and agents, which relate to this Agreement; provided, that, neither this Section nor any other provision hereof shall entitle the Company to have access to any records concerning any xxxxxx or offsetting transactions or other trading positions or pricing information that may have been entered into with other parties or utilized in connection with any transactions contemplated hereby or by any other Transaction Document. The right to inspect or audit such records shall survive termination of this Agreement for a period of two (2) years following the later of the Termination Date. Each Party shall preserve, and shall cause all contractors or agents to preserve, all of the aforesaid documents for a period of at least two (2) years from the Termination Date.

ARTICLE 23

CONFIDENTIALITY

23.1 In addition to the Company’s confidentiality obligations under the Transaction Documents, the Parties agree that the specific terms and conditions of this Agreement including any list of counterparties, the Transaction Documents and the drafts of this Agreement exchanged by the Parties and any information exchanged between the Parties, including calculations of any fees or other amounts paid by the Company to Xxxx under this Agreement and all information received by Xxxx from the Company relating to the costs of operation, operating conditions, and other commercial information of the Company not made available to the public, are confidential and shall not be disclosed to any third party, except (i) as may be required by court order or Applicable Laws or as requested by a Governmental Authority, (ii) to such Party’s or its Affiliates’ employees, directors, shareholders, auditors, consultants, banks, lenders, financial advisors and legal advisors, or (iii) to such Party’ insurance providers, solely for the purpose of procuring insurance coverage or confirming the extent of existing insurance coverage; provided, that, prior to any disclosure permitted by this clause (iii), such insurance providers shall have agreed in writing to keep confidential any information or document subject to this Section. The confidentiality obligations under this Agreement shall survive termination of this Agreement for a period of two (2) years following the Termination Date. The Parties shall be entitled to all remedies available at law, or in equity, to enforce or seek relief in connection with the confidentiality obligations contained herein.

23.2 In the case of disclosure covered by clause (i) of Section 23.1, to the extent practicable and in conformance with the relevant court order, Applicable Law or request, the disclosing Party shall notify the other Party in writing of any proceeding of which it is aware which may result in disclosure.

23.3 Tax Disclosure. Notwithstanding anything herein to the contrary, the Parties (and their respective employees, representatives or other agents) are authorized to disclose to any person the U.S. federal and state income tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to the Parties relating to that treatment and structure, without the Parties imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax structure” is limited to any facts that may be relevant to that treatment.

ARTICLE 24

GOVERNING LAW

24.1 This Agreement shall be governed by, construed and enforced under the laws of the State of New York without giving effect to its conflicts of laws principles that would require the application of the laws of another state.

24.2 Each of the Parties hereby irrevocably submits to the exclusive jurisdiction of any federal or state court of competent jurisdiction situated in the City of New York, (without recourse to arbitration unless both Parties agree in writing), and to service of process by certified mail, delivered to the Party at the address indicated in Article 26. Each Party hereby irrevocably waives, to the fullest extent permitted by Applicable Law, any objection to personal jurisdiction, whether on grounds of venue, residence or domicile.

24.3 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.

ARTICLE 25

ASSIGNMENT

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

25.2 The Company shall not assign this Agreement or its rights or interests hereunder in whole or in part, or delegate its obligations hereunder in whole or in part, without the express written consent of Xxxx. Xxxx may, without the Company’s consent, assign and delegate all of Aron’s rights and obligations hereunder to (i) any Affiliate of Xxxx, provided that the obligations of such Affiliate hereunder are guaranteed by The Xxxxxxx Sachs Group, Inc. or (ii) any non-Affiliate Person that succeeds to all or substantially all of its assets and business and assumes the Aron’s obligations hereunder, whether by contract, operation of law or otherwise, provided that the creditworthiness of such successor entity is equal or superior to the creditworthiness of Xxxx

immediately prior to such assignment. Any other assignment by Xxxx shall require the Company’s consent.

25.3 Any attempted assignment in violation of this Article 26 shall be null and void ab initio and the non-assigning Party shall have the right, without prejudice to any other rights or remedies it may have hereunder or otherwise, to terminate this Agreement effective immediately upon notice to the Party attempting such assignment.

ARTICLE 26

NOTICES

26.1 All invoices, notices, requests and other communications given pursuant to this Agreement shall be in writing and sent by email or nationally recognized overnight courier. A notice shall be deemed to have been received when transmitted by email to the other Party’s email set forth in Schedule M, or on the following Business Day if sent by nationally recognized overnight courier to the other Party’s address set forth in Schedule M and to the attention of the person or department indicated. A Party may change its address or email address by giving written notice in accordance with this Section, which is effective upon receipt.

ARTICLE 27

NO WAIVER, CUMULATIVE REMEDIES

27.1 The failure of a Party hereunder to assert a right or enforce an obligation of the other Party shall not be deemed a waiver of such right or obligation. The waiver by any Party of a breach of any provision of, or Event of Default or Potential Event of Default under, this Agreement shall not operate or be construed as a waiver of any other breach of that provision or as a waiver of any breach of another provision of, Event of Default or Potential Event of Default under, this Agreement, whether of a like kind or different nature.

27.2 Each and every right granted to the Parties under this Agreement or allowed it by law or equity shall be cumulative and may be exercised from time to time in accordance with the terms thereof and Applicable Law.

ARTICLE 28

NATURE OF THE TRANSACTION AND RELATIONSHIP OF PARTIES

28.1 This Agreement shall not be construed as creating a partnership, association or joint venture between the Parties. It is understood that each Party is an independent contractor with complete charge of its employees and agents in the performance of its duties hereunder, and nothing herein shall be construed to make such Party, or any employee or agent of the Company, an agent or employee of the other Party.

28.2 Neither Party shall have the right or authority to negotiate, conclude or execute any contract or legal document with any third person; to assume, create, or incur any liability of any kind, express or implied, against or in the name of the other; or to otherwise act as the representative of the other, unless expressly authorized in writing by the other.

ARTICLE 29

MISCELLANEOUS

29.1 If any Article, Section or provision of this Agreement shall be determined to be null and void, voidable or invalid by a court of competent jurisdiction, then for such period that the same is void or invalid, it shall be deemed to be deleted from this Agreement and the remaining portions of this Agreement shall remain in full force and effect.

29.2 The terms of this Agreement constitute the entire agreement between the Parties with respect to the matters set forth in this Agreement, and no representations or warranties shall be implied or provisions added in the absence of a written agreement to such effect between the Parties. This Agreement shall not be modified or changed except by written instrument executed by the Parties’ duly authorized representatives.

29.3 No promise, representation or inducement has been made by either Party that is not embodied in this Agreement or the Temporary Assignment, and neither Party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

29.4 Time is of the essence with respect to all aspects of each Party’s performance of any obligations under this Agreement.

29.5 Nothing expressed or implied in this Agreement is intended to create any rights, obligations or benefits under this Agreement in any person other than the Parties and their successors and permitted assigns.

29.6 All audit rights, payment, confidentiality and indemnification obligations and obligations under this Agreement shall survive the expiration or termination of this Agreement.

29.7 This Agreement may be executed by the Parties in separate counterparts and initially delivered by facsimile transmission or otherwise, with original signature pages to follow, and all such counterparts shall together constitute one and the same instrument.

29.8 All transactions hereunder are entered into in reliance on the fact this Agreement and all such transactions constitute a single integrated agreement between the Parties, and the Parties would not have otherwise entered into any other transactions hereunder.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be executed by its duly authorized representative as of the date first above written.


X. XXXX & COMPANY
By:	/s/ Xxxxxxx Xxxxxx
	Name:	Xxxxxxx Xxxxxx
	Title:	Managing Director

ALON REFINING XXXXX SPRINGS, INC.
By:	/s/ Shai Even
	Name:	Shai Even
	Title:	SVP & CFO

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AMENDED AND RESTATED SUPPLY AND OFFTAKE AGREEMENT dated as of MAY 26, 2010 between J. ARON & COMPANY and ALON REFINING KROTZ SPRINGS, INC.

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