AMENDED AND RESTATED AMENDMENT NO. 2 to THE SUPPLY AND OFFTAKE AGREEMENT

THIS AMENDED AND RESTATED AMENDMENT NO. 2 to THE SUPPLY AND OFFTAKE AGREEMENT (this “Amendment”), dated as of March 1, 2011 is made between J. Aron & Company, a general partnership organized under the laws of New York (“Aron”) located at 200 West Street, New York, New York 10282-2198, and Alon Refining Krotz Springs, Inc. (the “Company”), a Delaware corporation located at Hwy. 105 South, Krotz Springs, Louisiana 70750-0453 (each referred to individually as a “Party” or collectively as the “Parties”).

Aron and the Company are parties to the Amended and Restated Supply and Offtake Agreement dated as of May 26, 2010, as amended by Amendment No. 1, dated January 20, 2011 (as so amended, the “Supply and Offtake Agreement”). Aron and the Company have agreed to amend certain terms and conditions of the Supply and Offtake Agreement.

The Parties executed Amendment No. 2 to the Supply and Offtake Agreement (the “Original Amendment”) on February 18, 2011 and now desire to include additional terms and conditions in the Original Amendment.

Accordingly, the Parties hereto agree as follows:

 

 

Section 1.1    Terms Defined in Supply Agreement. All capitalized terms used in this Amendment (including in the Recitals hereto) and not otherwise defined herein shall have the meanings assigned to them in the Supply and Offtake Agreement.

 

Section 1.2    Interpretation. The rules of construction set forth in Section 1.2 of the Supply and Offtake Agreement shall be applicable to this Amendment and are incorporated herein by this reference.

 

 

 

Section 2.1    Amendment. Upon the effectiveness of this Amendment, the Supply and Offtake Agreement shall be amended as follows:

 

(a)By replacing the terms “Feedstock Storage Tanks” and “Feedstock Intake Point” in Section 5.5(b) thereto with the terms “Crude Storage Tanks” and “Crude Delivery Point” respectively.

 

(b)By replacing the term “Feedstock Delivery Point” in Section 17.2(b) and Schedule C thereto with the term “Crude Delivery Point.”

 

 

(c)By replacing the term “Measured Feedstock Quantity” in Section 6.1 thereto with the term “Measured Crude Quantity.”

 

(d)By amending Section 1.1 as follows:

 

(i)deleting the following definitions from Section 1.1:

 

(ii)By adding the following new definitions to Section 1.1 in the appropriate alphabetical order with respect to the other definitions therein:

 

(iii)By replacing the definition of Transaction Documents with the definition below:

 

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

(iv)By replacing the definition of Volume Determination Procedures with the definition below:

 

“Volume Determination Procedures” mean the Company's ordinary month-end procedures for determining the volumes of Crude Oil or Product held in any Storage Tank, which include manually gauging each Storage Tank on the last day of the month to ensure that the automated tank level readings are accurate to within a tolerance of two inches (it being understood that if the automated reading cannot be calibrated to be within

 

such tolerance, the Company uses the manual gauge reading in its calculation of month-end inventory).

(e)By replacing the entirety of Article 3 thereof, with the following text:

 

(f)By amending Section 7.1 thereof as follows:

 

(i)Deleting the words “under the Procurement Contracts is” in clause (c) and replacing them with the words “under the Procurement Contracts plus Other Barrels available for delivery during such month are”.

 

(g)By amending Section 7.2 thereof as follows:

 

(i)Clause (d) shall be replaced in its entirety with the following:

 

(d)    [Reserved.]

(ii)    Clause (e) shall be replaced in its entirety with the following:

 

(e)    At any time prior to the beginning of the month to which a Target Month End Product Volume relates (but subject to any applicable notification deadlines specified on Schedule D hereto), Aron may change such Target Month End Product Volume.

(h)By inserting at the end of Section 9.2(b) thereof, the following additional text:

 

If, in the judgment of Aron or Supplier's Inspector, the Volume Determination Procedures have not been applied correctly, then the Company will cooperate with Aron,

 

or Supplier's Inspector, to ensure the correct application of the Volume Determination Procedures, including making such revisions to the Actual Month End Crude Volume and any Actual Month End Product Volume as may be necessary to correct any such errors.

(i)By inserting the following words after the word “hereunder” in Section 12.4(a) thereto:

and the Other Inventory Sales

(j)By amending Section 18.1 thereof as follows:

 

(i)Clause (f) shall become clause (h) and new clauses (f) and (g) shall be added as specified below:

 

(f)    The Company fails to satisfy its obligations with respect to Other Inventory Sales; or

(g)    an “Event of Default” with respect to Alon USA shall occur under the Alon USA Supply and Offtake Agreement; or

(ii)    The last sentence shall be replaced in its entirety with the following:

 

The Company shall be the Defaulting Party upon the occurrence of any of the events described in clauses (f) through (k) (inclusive) above.

(k)By adding the following after “to liquidate and terminate any or all rights and obligations under this Agreement” in the first sentence of Section 18.2(b) thereof:

 

; provided that, in the event Aron is the Non-Defaulting Party, this Agreement shall not be deemed to have terminated in full until Aron shall have disposed of all Crude Oil and Products owned or maintained by Aron in connection herewith.

(l)By replacing, in its entirety, Schedule B thereof with Schedule B hereto

 

(m)With respect to the definitions of Actual Month End Crude Volume, Actual Month Beginning Crude Volume, Actual Month End Product Volume and Actual Month Beginning Product Volume set forth on Schedule C thereto, by amending the bracketed text at the end of each of such definition to remove the brackets and replacing the words “Note: On” with the words “It is agreed that on”.

 

(n)By deleting the bracketed text at the end of the definition of Monthly Aron Fee set forth on Schedule C thereof.

 

(o)By replacing, in its entirety, Schedule D thereof with Schedule D hereto.

 

(p)By replacing, in its entirety, Schedule J thereof with Schedule J hereto.

 

(q)By inserting immediately after Schedule S thereof a new Schedule T that is identical to Schedule T hereto.

 

 

Section 2.2    References Within Supply and Offtake Agreement. Each reference in the Supply and Offtake Agreement to “this Agreement” and the words “hereof,” “hereto,” “herein,” “hereunder,” or words of like import, shall mean and be a reference to the Supply and Offtake Agreement as amended by this Amendment.

 

 

 

To induce the other Party to enter into this Amendment, each Party hereby represents and warrants that (i) it has the corporate, governmental or other legal capacity, authority and power to execute this Amendment, to deliver this Amendment and to perform its obligations under the Supply and Offtake Agreement, as amended hereby, and has taken all necessary action to authorize the foregoing; (ii) the execution, delivery and performance of this Amendment does not violate or conflict with any law applicable to it, 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 subject; (iii) all governmental and other consents required to have been obtained by it with respect to this Amendment have been obtained and are in full force and effect; (iv) its obligations under the Supply and Offtake Agreement, as amended hereby, 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) and (v) no Event of Default with respect to it has occurred and is continuing.

 

 

Section 4.1    Supply and Offtake Agreement Otherwise Not Affected. Except for the amendments pursuant hereto, the Supply and Offtake Agreement remains unchanged. As amended pursuant hereto, the Supply and Offtake Agreement remains in full force and effect and is hereby ratified and confirmed in all respects. The execution and delivery of, or acceptance of, this Amendment and any other documents and instruments in connection herewith by either Party shall not be deemed to create a course of dealing or otherwise create any express or implied duty by it to provide any other or further amendments, consents or waivers in the future.

 

Section 4.2    No Reliance. Each Party hereby acknowledges and confirms that it is executing this Amendment on the basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication by or on behalf of any other Person.

 

Section 4.3    Costs and Expenses. Each Party shall be responsible for any costs and expenses incurred by such Party in connection with the negotiation, preparation, execution and delivery of this Amendment and any other documents to be delivered in connection herewith.

 

Section 4.4    Binding Effect. This Amendment shall be binding upon, inure to the benefit of and be enforceable by the Company, Aron and their respective successors and assigns.

 

Section 4.5    Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED UNDER THE LAWS OF THE STATE OF NEW YORK

 

 

WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER STATE.

 

Section 4.6    Amendments. This Amendment may not be modified, amended or otherwise altered except by written instrument executed by the Parties' duly authorized representatives.

 

Section 4.7    Effectiveness; Counterparts. This Amendment shall be binding on the Parties as of the date on which it has been fully executed by the Parties. This Amendment may be executed in any number of counterparts and by different Parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

 

Section 4.8    Interpretation. This Amendment is the result of negotiations between and have been reviewed by counsel to each of the Parties, and is the product of all Parties hereto. Accordingly, this Amendment shall not be construed against either Party merely because of such Party's involvement in the preparation hereof.