AMENDMENT NO. 3 TO CRUDE OIL SUPPLY AGREEMENT
Exhibit 10.22
AMENDMENT NO. 3 TO CRUDE OIL SUPPLY AGREEMENT
THIS AMENDMENT NO. 3 TO CRUDE OIL SUPPLY AGREEMENT (the “Amendment”), dated as of May 4, 2010
but effective as of April 1, 2010 (the “Amendment Effective Date”), is made by and between CALUMET
SHREVEPORT FUELS, LLC, an Indiana limited liability company (“Customer”), and LEGACY RESOURCES CO.,
L.P., an Indiana limited partnership (“Supplier”). Each of Customer and Supplier is sometimes
referred to hereinafter individually as a “Party” and they are collectively referred to as the
“Parties.”
RECITALS
WHEREAS, Customer owns and operates a refinery in Shreveport, Louisiana (the “Refinery”) for
the processing and refining of crude oil into specialty lubricating oils and other refined
products;
WHEREAS, Supplier is able to obtain certain commodities, including crude oil, from various
supply sources; and
WHEREAS, the Parties entered into that certain Crude Oil Supply Agreement (the “Agreement”)
dated as of September 1, 2009, whereby Customer agreed to purchase from Supplier, and Supplier
agreed to sell and supply to Customer, crude oil on a just in time basis in order to meet the
inventory requirements of the Refinery.
WHEREAS, pursuant to Section 23 of the Agreement, the Parties desire to amend certain
provisions of the Agreement as of the Amendment Effective Date.
AMENDMENT TO AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties, intending to be legally bound, do hereby agree to amend the
Agreement as of the Amendment Effective Date as follows:
| 1. | Defined Terms. The definitions of the following capitalized term used in the Agreement is deleted and replaced in their entirety with the following definitions: |
“Average Purchase Price” means the sum of (i) the monthly average per barrel price quoted
for the first nearby month for West Texas Intermediate crude oil on the New York Mercantile
Exchange and (ii) $0.40 per barrel, or such other price as may be agreed by the Parties in
accordance with Section 5.
“▇▇▇▇▇ Station Tanks” means Customer’s storage tanks located at ▇▇▇▇▇ Station, Louisiana,
which tanks are more specifically identified by serial number on Amendment No. 3 Exhibit
B attached hereto.
“Premium” means the amount calculated in accordance with the table set forth on
Amendment No. 3 Exhibit A attached hereto.
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“Storage Tanks” means the ▇▇▇▇▇ Station Tanks, as such terms may be used interchangeably in
the Agreement.
| 2. | The capitalized term “Site Tanks” is deleted in its entirety from the Agreement. | ||
| 3. | Section 6 of the Agreement shall be deleted and replaced in its entirety by the following: |
“6. Scheduling; Storage of Raw Material.
(a) Orders and Scheduling.
(i) No later than the twentieth day of each calendar month during the Supply
Period (or if such twentieth day is not a Business Day, then on the immediately
succeeding Business Day) (the “Indication Date”), Customer shall send to Supplier an
indication of its needs for Raw Material for the next succeeding calendar month (an
“Indication of Need”). The Parties hereby agree that the Indication of Need shall
not constitute a binding obligation of Customer and is intended to provide Supplier
with guidance for purposes of seeking out and procuring the Raw Material.
(ii) Based on Customer’s Indication of Need, Supplier shall be solely
responsible for procuring the necessary quantity of Raw Material and for storing
such Raw Material until such time as it is delivered to Customer in accordance with
the terms hereof. Supplier shall have the right to source Raw Material from any
producer of crude oil selected by Supplier in its sole discretion.
(b) Storage of Raw Material. Supplier shall be solely responsible for
transportation and storage of the Raw Material until such time as the Raw Material is
delivered to Customer in accordance with the terms hereof. In order to facilitate and
expedite the delivery of Raw Material to Customer, during the Supply Period Supplier shall
have the exclusive right to store the Raw Material in the Storage Tanks.
During the Supply Period, Customer shall maintain the Storage Tanks in good working order in
accordance with customary industry practices. Notwithstanding Supplier’s use of the Storage
Tanks for the storage of Raw Material, the Parties hereby agree and acknowledge that (A) the
Storage Tanks shall at all times remain the property of and under the sole custody and
control of Customer, and Supplier shall not by virtue of this Agreement obtain any rights to
the Storage Tanks other than the right to use the same for the limited purposes specified in
this Section, and (B) title to and risk of loss of the Raw Material shall not pass to
Customer except as contemplated by Section 8(c) below.”
| 4. | Section 8(a)of the Agreement shall be deleted and replaced in its entirety by the following: |
“ (a) Delivery and Calculation of Usage.
(i) Supplier shall deliver the Raw Material to Customer free and clear of any
mortgages, pledges, liens, charges or other security interests or encumbrances.
During the Supply Period, Customer may take delivery of Raw Material at any time by
removing the Raw Material from the Storage Tanks, and the Raw Material shall be
deemed to have been delivered to Customer at the point where the Raw Material passes
the flange from each of the Storage Tanks to the Pipeline (the “Delivery Point”).
(ii) At 8:00 a.m. Central time on the first calendar day of each month,
Customer will strap the Storage Tanks. The Customer shall calculate on such day the
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amount of Raw Material consumed by Customer during the preceding month by (A)
adding to the ending inventory from the immediately preceding month the sum of all
Raw Material delivered by Supplier to the Storage Tanks during such month, based on
Supplier’s purchase and other Raw Material movement records for such month (subject
to adjustment for variances objectively demonstrated by Supplier or Customer), and
(B) subtracting from such sum the ending inventory balance of Raw Material
determined by strapping the Storage Tanks. In the event of any disagreement by the
Parties regarding the results of the foregoing, the Parties shall work together in
good faith to attempt to resolve any differences.”
| 5. | Section 9(a) of the Agreement shall be deleted and replaced in its entirety by the following: |
“(a) Payment. On a weekly basis, Customer shall provide to Supplier a summary report
of the Raw Material removed from each Storage Tank during the immediately preceding calendar
week, and setting forth the amount due to Supplier in respect of the Raw Material removed
from the Storage Tanks during such week (the “Delivered Inventory Report”), and no later
than the three (3) Business Days of each calendar month following (or the immediately
succeeding Business Day if such day is not a Business Day) pay to Supplier, by wire transfer
of immediately available funds to the account specified on Exhibit D attached
hereto, the amount determined by Customer and set forth in the Delivered Inventory Report.
On a monthly basis, Customer and Supplier shall reconcile Raw Material deliveries and
pricing for the calendar month as reflected in the weekly Delivered Inventory Reports for
calculation of the final adjustment, if any, for the amount due to/from Supplier for that
calendar month. Any such amounts due based on this final monthly reconciliation will be
payable to the respective Party on the twentieth (20th) day (or the immediately
succeeding Business Day if such day is not a Business Day) of the succeeding calendar
month.”
| 6. | All other terms and conditions of the Agreement are unchanged and remain in full force and effect as of the Amendment Effective Date. |
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first above
written, but effective as of April 1, 2010.
| CALUMET SHREVEPORT FUELS, LLC By: Calumet Shreveport, LLC, its sole member By: Calumet Lubricants Co., L.P., its sole member By: Calumet LP GP, LLC, its general partner By: Calumet Operating, LLC, its sole member By: Calumet Specialty Products Partners, L.P., its sole member |
||||
| By: | Calumet GP, LLC, its general partner | |||
| By: | /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, II | |||
| Name: | R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, II | |||
| Title: | Vice President & CFO | |||
| LEGACY RESOURCES CO., L.P. By: Legacy Acquisitions, Inc., its general partner |
||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| Title: | President | |||
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AMENDMENT NO. 3 EXHIBIT A
| Average First Nearby Month WTI Price | ||
| Per Barrel as Quoted on the New York | ||
| Mercantile Exchange (NYMEX) for Month | Premium per Barrel for | |
| of Delivery | Month of Delivery | |
| $30.00 — $39.99 | $0.38 | |
| $40.00 — $49.99 | $0.46 | |
| $50.00 — $59.99 | $0.53 | |
| $60.00 — $69.99 | $0.61 | |
| $70.00 — $79.99 | $0.68 | |
| $80.00 — $89.99 | $0.76 | |
| $90.00 — $99.99 | $0.83 | |
| $100.00 — $109.99 | $0.91 | |
| $110.00 — $119.99 | $0.98 | |
| $120.00 — $129.99 | $1.06 | |
| $130.00 — $139.99 | $1.13 | |
| $140.00 — $149.99 | $1.21 | |
| $150.00 — $159.99 | $1.28 |
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AMENDMENT NO. 3 EXHIBIT B
Storage Tanks located at ▇▇▇▇▇ Station, LA:
| 1. | Tank 209 | ||
| 2. | Tank 210 | ||
| 3. | Tank 211 |
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