UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): May 8, 2014

 

 

PBF ENERGY INC.

PBF HOLDING COMPANY LLC

(Exact name of registrant as specified in its charter)

 

 

 

Delaware

Delaware

 

001-35764

333-186007

 

45-3763855

27-2198168

(State or Other Jurisdiction of
Incorporation or Organization)
 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

One Sylvan Way, Second Floor

Parsippany, New Jersey 07054

(Address of Principal Executive Offices, Zip Code)

Registrant’s telephone number, including area code: (973) 455-7500

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 1.01. Entry Into a Material Definitive Agreement.

On May 14, 2014, PBF Logistics LP (the “ Partnership ”), an indirect wholly-owned subsidiary of PBF Energy Inc. (“ PBF Energy ”), completed its initial public offering (the “ Offering ”) of 13,750,000 common units representing limited partner interests in the Partnership (“ Common Units ”) at a price to the public of $23.00 per Common Unit. The Offering was underwritten by a group of underwriters, including Barclays Capital Inc. and UBS Securities LLC, as representatives of the underwriters (the “ Underwriters ”). The Partnership also granted the Underwriters an option for a period of 30 days to purchase up to an additional 2,062,500 Common Units (“ Option Units ”) on the same terms. On May 12, 2014 the Underwriters exercised in full their option to purchase the Option Units.

The material terms of the Offering are described in the prospectus dated May 8, 2014 (the “ Prospectus ”), filed by the Partnership with the U.S. Securities and Exchange Commission (the “ Commission ”) pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “ Securities Act ”). The Offering is registered with the Commission pursuant to a Registration Statement on Form S-1, as amended (File No. 333-195024).

The Offering closed on May 14, 2014. The Partnership received proceeds (after deducting underwriting discounts and structuring fees but before estimated offering expenses) from the Offering of approximately $341.0 million. As described in the Prospectus, the Partnership will use the net proceeds from the Offering (i) to distribute approximately $30.0 million to PBF Energy Company LLC (“ PBF LLC ”) to reimburse it for certain capital expenditures incurred prior to the closing of the Offering with respect to assets contributed to the Partnership; (ii) to pay debt issuance costs of approximately $2.3 million related to the Partnership’s five-year, $275.0 million senior secured revolving credit facility and the Partnership’s three-year, $300.0 million term loan facility; (iii) to purchase $298.7 million in U.S. Treasury or other investment grade securities which will be used to fund anticipated capital expenditures; and (iv) to retain approximately $5.0 million for general partnership purposes. The Partnership will also borrow $298.7 million under the Term Loan and distribute the proceeds of such borrowings to PBF LLC.

Contribution, Conveyance and Assumption Agreement

The description of the Contribution Agreement (as defined below) provided below under Item 2.01 is incorporated in this Item 1.01 by reference. A copy of the Contribution Agreement is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated in this Item 1.01 by reference.

Omnibus Agreement

On May 14, 2014, in connection with the closing of the Offering, PBF Holding Company LLC (“ PBF Holding ”) entered into an Omnibus Agreement (the “ Omnibus Agreement ”) by and among the Partnership, PBF Logistics GP LLC (the “ General Partner ”) and PBF LLC.

As more fully described in the Prospectus, the Omnibus Agreement addresses the following matters:

 

    the Partnership’s obligation to pay PBF LLC an administrative fee, initially in the amount of $2.3 million per year, for the provision by PBF LLC of centralized corporate services (which fee is in addition to certain expenses of the General Partner and its affiliates that are reimbursed under the partnership agreement of the Partnership);

 

    the Partnership’s agreement to reimburse PBF LLC for all other direct or allocated costs and expenses incurred by PBF LLC on the Partnership’s behalf;

 

    PBF LLC’s agreement not to compete with the Partnership under certain circumstances;

 

    the Partnership’s right of first offer to acquire the right of first offer assets, including certain logistics assets that PBF LLC or its subsidiaries may construct or acquire in the future;

 

    a license to use the PBF Logistics trademark and name; and

 

    PBF Holding’s agreement to reimburse the Partnership for certain expenditures related to the Partnership’s initial assets for a period of five years after the closing of the Offering.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Omnibus Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated in this Item 1.01 by reference.


Operation and Management Services and Secondment Agreement

On May 14, 2014, in connection with the closing of the Offering, the Partnership, the General Partner and Delaware City Terminaling Company LLC (“ Delaware City Terminaling ”), a subsidiary of the Partnership, entered into an operation and management services and secondment agreement (the “ Services Agreement ”) with PBF Holding and certain of its subsidiaries, pursuant to which PBF Holding and its subsidiaries will provide to the Partnership and its subsidiary the personnel necessary for the Partnership to perform its obligations under its commercial agreements. The Partnership will reimburse PBF Holding for the use of such employees and the provision of certain infrastructure-related services to the extent applicable to the Partnership’s operations, including storm water discharge and waste water treatment, steam, potable water, access to certain roads and grounds, sanitary sewer access, electrical power, emergency response, filter press, fuel gas, API solids treatment, fire water and compressed air. In addition, the Partnership will pay an annual fee of $490,000 to PBF Holding for the provision of such services pursuant to the Services Agreement. The Services Agreement will terminate upon the termination of the Omnibus Agreement, provided that the Partnership may terminate any service on 30 days’ notice.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Services Agreement, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and incorporated in this Item 1.01 by reference.

Delaware City Rail Terminaling Services Agreement

On May 14, 2014, in connection with the closing of the Offering, PBF Holding and Delaware City Terminaling entered into a rail terminaling services agreement (the “ Delaware City Rail Terminaling Services Agreement ”) under which the Partnership, through Delaware City Terminaling, will provide rail terminaling services to PBF Holding. Under the Delaware City Rail Terminaling Services Agreement, PBF Holding will be obligated to throughput aggregate volumes on the Partnership’s double-loop rail track as follows:

The minimum throughput commitment will be 75,000 barrels per day (“bpd”) through September 30, 2014 and 85,000 bpd for each subsequent quarter (in each case, calculated on a quarterly average basis) of light crude oil shipped on the light crude oil rail unloading terminal at the Delaware City refinery (the “ Delaware City Rail Terminal ”) for a fee equal to $2.00 per barrel for all volumes of light crude oil throughput up to the minimum throughput commitment and $0.50 per barrel for all volumes of light crude oil throughput in excess of the minimum throughput commitment, in any contract quarter.

The Partnership is required to maintain the capabilities of its Delaware City Rail Terminal such that PBF Holding may throughput at least 75,000 bpd through September 30, 2014 and 85,000 bpd for each subsequent quarter (in each case, calculated on a quarterly average basis) of light crude oil on the double-loop rail track. To the extent that (i) PBF Holding is prevented from throughputting at least such volumes on the Delaware City Rail Terminal (on a quarterly average basis) for more than seven days per quarter as a result of the Partnership’s failure to maintain capacities, then PBF Holding’s aggregate throughput commitments for the double-loop rail track will be reduced proportionately to the extent of the difference between such aggregate minimum throughput capacity and the actual available aggregate throughput capacity, prorated for the portion of the quarter during which throughput capacity was unavailable.

The foregoing description is qualified in its entirety by reference into the full text of the Delaware City Rail Terminaling Services Agreement, which is filed as Exhibit 10.4 to this Current Report on Form 8-K and incorporated to this Item 1.01 by reference.

Toledo Truck Unloading & Teminaling Services Agreement

On May 14, 2014, in connection with the closing of the Offering, PBF Holding and the Partnership entered into a truck unloading and terminaling agreement (the “ Toledo Truck Unloading & Terminaling Agreement ”) under which the Partnership will provide truck unloading services to PBF Energy’s Toledo refinery. Under the Toledo Truck Unloading & Terminaling Agreement, PBF LLC will be obligated to throughput aggregate volumes at the Partnership’s crude oil truck unloading terminal at the Toledo refinery (the “ Toledo Truck Terminal ”) as follows:

 


The minimum throughput commitment will be 4,000 bpd (on a quarterly average basis) of crude oil throughput at the Toledo Truck Terminal for a fee equal to $1.00 per barrel for all volumes of crude oil throughput up to the minimum throughput commitment and $1.00 per barrel for all volumes of crude oil throughput in excess of the minimum throughput commitment (in any contract quarter).

The Partnership is required to maintain the capabilities of its Toledo Truck Terminal such that PBF LLC may throughput at least 4,000 bpd on a quarterly average basis of crude oil on the Toledo Truck Terminal. To the extent that PBF LLC is prevented from throughputting at least such volumes on the Toledo Truck Terminal, on a quarterly average basis, for more than seven days per quarter as a result of the Partnership’s failure to maintain capacities, then PBF LLC’s aggregate throughput commitments for the Toledo Truck Terminal will be reduced proportionately to the extent of the difference between such aggregate minimum throughput capacity and the actual available aggregate throughput capacity, prorated for the portion of the quarter during which throughput capacity was unavailable.

The foregoing description is qualified in its entirety by reference into the full text of the Toledo Truck Unloading & Terminaling Agreement, which is filed as Exhibit 10.5 to this Current Report on Form 8-K and incorporated to this Item 1.01 by reference.

Relationships

PBF Energy owns 74,053 Common Units and 15,886,553 subordinated units representing an aggregate 50.2% limited partner interest in the Partnership after taking into account the purchase of the Option Units by the Underwriters. PBF Energy also directly owns all of the incentive distribution rights in the Partnership and indirectly owns a non-economic general partner interest in the Partnership through the General Partner, a wholly-owned subsidiary of PBF LLC.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

Contribution and Conveyance Agreement

On May 8, 2014, PBF Energy, PBF LLC, PBF Holding the Partnership, the General Partner, Delaware City Refining, Delaware City Terminaling and Toledo Refining Company LLC (“ Toledo Refining ”) entered into the Contribution and Conveyance Agreement (the “ Contribution Agreement ”). On May 14, 2014, in connection with the closing of the Offering, the following transactions occurred pursuant to the Contribution Agreement:

 

    Delaware City Refining distributed all of the interests in Delaware City Terminaling and Toledo Refining distributed the Toledo Truck Terminal, in each case, to PBF Holding.

 

    PBF Holding contributed (i) all of the interests in Delaware City Terminaling and (ii) the Toledo Truck Terminal to the Partnership in exchange for (a) 74,053 Common Units and 15,886,553 subordinated units representing an aggregate 50.2% limited partner interest in the Partnership, (b) all of the Partnership’s incentive distribution rights, (c) the right to receive a distribution of $30.0 million from the Partnership as reimbursement for certain preformation capital expenditures attributable to the contributed assets, (d) the right to receive a distribution of $298.7 million and in connection with the foregoing, the Partnership will redeem PBF Holding’s initial partner interests in the Partnership for $1,000.

 

    PBF Holding distributed to PBF LLC (i) its interest in the General Partner, (ii) the Common Units, subordinated units and incentive distribution rights, (iii) the right to receive a distribution of $30.0 million as reimbursement for certain preformation capital expenditures, and (iv) the right to receive a distribution of $298.7 million.

The foregoing description is qualified in its entirety by reference to the full text of the Contribution Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated into this Item 2.01 by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

  (d) Exhibits.

 

Number

 

Description

10.1   Contribution, Conveyance and Assumption Agreement, dated as of May 8, 2014.
10.2   Omnibus Agreement, dated as of May 14, 2014.
10.3   Operation and Management Services and Secondment Agreement, dated as of May 14, 2014.
10.4   Delaware City Rail Terminaling Services Agreement, dated as of May 14, 2014.
10.5   Toledo Truck Unloading & Terminaling Agreement, dated as of May 14, 2014.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: May 14, 2014       PBF Energy Inc.
    (Registrant)
    By:  

/s/ Jeffrey Dill

    Name:   Jeffrey Dill
    Title:   Senior Vice President, General Counsel
Date: May 14, 2014       PBF Holding Company LLC
    (Registrant)
    By:  

/s/ Jeffrey Dill

    Name:   Jeffrey Dill
    Title:   Senior Vice President, General Counsel


INDEX TO EXHIBITS

 

Number

 

Description

10.1   Contribution, Conveyance and Assumption Agreement, dated as of May 8, 2014.
10.2   Omnibus Agreement, dated as of May 14, 2014.
10.3   Operation and Management Services and Secondment Agreement, dated as of May 14, 2014.
10.4   Delaware City Rail Terminaling Services Agreement, dated as of May 14, 2014.
10.5   Toledo Truck Unloading & Terminaling Agreement, dated as of May 14, 2014.

Exhibit 10.1

CONTRIBUTION AND CONVEYANCE AGREEMENT

By and Among

PBF LOGISTICS LP,

PBF LOGISTICS GP LLC,

PBF ENERGY INC.,

PBF ENERGY COMPANY LLC,

PBF HOLDING COMPANY LLC,

DELAWARE CITY REFINING COMPANY LLC,

DELAWARE CITY TERMINALING COMPANY LLC

and

TOLEDO REFINING COMPANY LLC

Dated as of May 8, 2014


TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS      4   
ARTICLE II TRANSACTIONS PRECEDING THE EFFECTIVE TIME      9   

Section 2.1

 

Limited Liability Company Interest in the General Partner

     9   

Section 2.2

 

Delaware City Assets

     9   
ARTICLE III CONTRIBUTION, ACKNOWLEDGEMENTS AND DISTRIBUTIONS      9   

Section 3.1

 

Distributions by Delaware City Refining and Toledo Refining to Holding

     9   

Section 3.2

 

Contribution by Holding to the Partnership

     10   

Section 3.3

 

Distribution by Holding to PBF Energy

     10   

Section 3.4

 

Redemption of Holding’s Initial Limited Partner Interests

     10   

Section 3.5

 

Retention of General Partner Interest

     10   

Section 3.6

 

Payment and Contribution of Cash by the Public Through the Underwriters

     10   

Section 3.7

 

Payment of Transaction Expenses and Distribution by the Partnership to PBF Energy

     10   
ARTICLE IV DEFERRED ISSUANCE AND DISTRIBUTION      11   
ARTICLE V INDEMNIFICATION      11   

Section 5.1

 

Environmental Indemnification for Benefit of the Partnership Group

     11   

Section 5.2

 

Environmental Indemnification for Benefit of the PBF Indemnitees

     11   

Section 5.3

 

Additional Indemnification

     12   

Section 5.4

 

Survival

     14   
ARTICLE VI FURTHER ASSURANCES      14   
ARTICLE VII EFFECTIVE TIME      14   
ARTICLE VIII MISCELLANEOUS      14   

Section 8.1

 

Order of Completion of Transactions

     14   

Section 8.2

 

Construction of Agreement

     15   

Section 8.3

 

Successors and Assigns

     15   

Section 8.4

 

No Third Party Beneficiaries

     15   

Section 8.5

 

Counterparts

     15   

Section 8.6

 

Choice of Law

     15   

Section 8.7

 

Severability

     15   

Section 8.8

 

Amendment or Modification

     15   

Section 8.9

 

Integration

     16   

Section 8.10

 

Deed; Bill of Sale; Assignment

     16   

Section 8.11

 

Notice

     16   

Section 8.12

 

Survival

     17   

 

i


Schedules   

Schedule 2.2-A

 

Delaware City Assets

  

Schedule 2.2-B

 

Toledo Assets

  

Schedule 5.1

 

Retained Environmental Liabilities

  
Exhibits   

Exhibit A

 

Pipeline Easement

  

Exhibit B

 

Utility Easement

  

Exhibit C

 

Access Easement

  

Exhibit D

 

Form of Certificate of Conveyance

  

Exhibit E

 

Deed

  

 

ii


CONTRIBUTION AND CONVEYANCE AGREEMENT

This Contribution and Conveyance Agreement, dated as of May 8, 2014 (this “ Agreement ”), is by and among PBF Logistics LP, a Delaware limited partnership (the “ Partnership ”), PBF Logistics GP LLC, a Delaware limited liability company (the “ General Partner ”), PBF Energy Inc., a Delaware corporation (“ PBF ”), PBF Energy Company LLC, a Delaware limited liability company (“ PBF Energy ”), PBF Holding Company LLC, a Delaware limited liability company (“ Holding ”), Delaware City Refining Company LLC, a Delaware limited liability company (“ Delaware City Refining ”), Delaware City Terminaling Company LLC, a Delaware limited liability company (“ Delaware City Terminaling ”), and Toledo Refining Company LLC, a Delaware limited liability company (“ Toledo Refining ”). The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.” Capitalized terms used herein shall have the meanings assigned to such terms in Article I.

RECITALS

WHEREAS , the General Partner and Holding have formed the Partnership, pursuant to the Delaware Revised Uniform Limited Partnership Act (the “ Delaware LP Act ”), for the purpose of engaging in any business activity that is approved by the General Partner and that lawfully may be conducted by a limited partnership organized pursuant to the Delaware LP Act.

WHEREAS , in order to accomplish the purpose in the preceding recital, each of the following actions has been taken prior to the date hereof:

 

1. PBF Energy formed the General Partner under the terms of the Delaware Limited Liability Company Act (the “ Delaware LLC Act ”) and contributed the required amount of capital in exchange for all of the membership interests in the General Partner.

 

2. The General Partner and Holding formed the Partnership under the terms of the Delaware LP Act for the purposes set forth in the Agreement of Limited Partnership of the Partnership dated February 25, 2013 (the “ Initial Partnership Agreement ”).

 

3. In connection with the Partnership’s formation, the General Partner and Holding contributed to the Partnership $0 in cash and $1,000 in cash (the “ Initial Capital Contribution ”), respectively, in exchange for a 0% noneconomic general partner interest and a 100% limited partner interest (the “ Initial Limited Partner Interest ”), respectively.

 

4. PBF Energy contributed the limited liability company interest in the General Partner to Holding.

 

5. Delaware City Refining formed Delaware City Terminaling under the terms of the Delaware LLC Act and contributed the required amount of capital in exchange for all of the membership interests in Delaware City Terminaling.

WHEREAS , concurrently with the consummation of the transactions contemplated hereby, each of the following transactions will occur at the times specified hereinafter:

 

1


1. Delaware City Refining will contribute to Delaware City Terminaling, pursuant to a Deed (as defined below) and a Certificate of Conveyance (as defined below), the Delaware City Assets (as defined below), subject to the Delaware City Easements (as defined below).

 

2. Toledo Refining will distribute to Holding, pursuant to a Certificate of Conveyance, the Toledo Assets (as defined below) and the Toledo Easement (as defined below).

 

3. Delaware City Refining will distribute to Holding, pursuant to a Certificate of Conveyance, its 100% membership interest in Delaware City Terminaling (the “ Delaware City Interests ”) (which entity owns a 100% interest in the Delaware City Assets, subject to the Delaware City Easements).

 

4. Holding will contribute to the Partnership (i) pursuant to a Certificate of Conveyance, 100% of the equity interests in Delaware City Terminaling (which entity owns the Delaware City Assets, subject to the Delaware City Easements), and (ii) pursuant to a Certificate of Conveyance, the Toledo Assets and the Toledo Easement, and will exchange its 100% limited partner interest in the Partnership for (A) 74,053 Common Units (as defined below) of the Partnership and 15,886,553 Subordinated Units (as defined below) of the Partnership, representing an aggregate 50.2% limited partner interest in the Partnership, (B) all of the Incentive Distribution Rights (as defined below) of the Partnership, (C) the right to receive a distribution from the Partnership (as set forth below) as reimbursement for certain pre-formation capital expenditures attributable to the Delaware City Assets and the Toledo Assets (the “ Pre-Formation Capital Expenditures ”), (D) the right to receive the Borrowed Funds Distribution (as defined below) and (E) the right to receive the Deferred Issuance and Distribution (as defined below). The General Partner will retain its noneconomic general partner interest in the Partnership.

 

5. Holding will distribute to PBF Energy (A) its interest in the General Partner (B) 74,053 Common Units and 15,886,553 Subordinated Units, (C) all of the Incentive Distribution Rights of the Partnership, (D) the right to receive a distribution from the Partnership as reimbursement for the Pre-Formation Capital Expenditures, (D) the right to receive the Borrowed Funds Distribution and (E) the right to receive the Deferred Issuance and Distribution.

 

6. In connection with the Offering (as defined below), the Partnership will issue 13,750,000 Common Units, representing an aggregate 43.3% limited partner interest in the Partnership, to the public through the Underwriters (as defined below) in exchange for the contribution by the public, through the Underwriters, to the Partnership of $316.3 million, or $297.3 million, net of underwriting discounts and commissions (the “ IPO Proceeds ”) and will grant the Underwriters the over-allotment option (the “ Over-Allotment Option ”) to purchase an additional 2,062,500 Common Units, representing an aggregate 6.5% limited partner interest in the Partnership, in exchange for the contribution by the public, through the Underwriters, to the Partnership of $47.4 million or $44.5 million net of underwriting discounts and commissions (the “ Option Proceeds ”).

 

2


7. The Partnership will use a portion of the IPO Proceeds to (A) pay transaction expenses, estimated to be approximately $5.8 million (excluding the underwriting discounts), (B) pay debt issuance costs of approximately $2.0 million related to the Partnership’s loan facilities and (C) make a cash distribution of $30.0 million to PBF Energy as reimbursement for the Pre-Formation Capital Expenditures (the “ Proceeds Distribution ”).

 

8. The Partnership will (i) use the remainder of the IPO Proceeds estimated to be approximately $259.5 million to (A) purchase $254.5 million U.S. Treasury or other similar securities (“ Treasuries ”), which will be used to fund anticipated capital expenditures and (B) to retain $5.0 for general partnership purposes, (ii) borrow an amount equal to the IPO Proceeds under a term loan (the “ Borrowed Funds ”) guaranteed by PBF Energy (the “ Recourse Loan ”) and (iii) distribute the Borrowed Funds to PBF Energy (the “ Borrowed Funds Distribution ”).

 

9. Holding, PBF Energy, the Partnership and the General Partner will execute the Omnibus Agreement, in substantially the form attached as an exhibit to the Registration Statement, with such changes as such parties may agree, pursuant to which such parties shall agree to certain matters with respect to, among other things, intellectual property, business opportunities, rights of first offer, payment by the Partnership of an administrative fee to Holding, and allocation and reimbursement of certain expenses, as provided therein.

WHEREAS , upon the expiration of the period during which the Underwriters may exercise the Over-Allotment Option, if the Underwriters have not exercised any portion of the Over-Allotment Option, the Partnership will issue 2,062,500 additional Common Units to PBF Energy. However, to the extent that the Underwriters exercise any portion of the Over-Allotment Option, the Partnership will (i) use the proceeds from the Over-Allotment Option to purchase additional Treasuries, which will be used to fund anticipated capital expenditures, (ii) borrow an amount of debt equal to the proceeds from the Over-Allotment Option guaranteed by PBF Energy under a term loan (the “ Over-Allotment Option Debt ”), (iii) distribute the proceeds of the Over-Allotment Option Debt to PBF Energy, and (iv) issue to PBF Energy a number of Common Units equal to 2,062,500 less the number of Common Units purchased by the Underwriters in connection in the Over-Allotment Option.

WHEREAS , the members or partners of the Parties have taken all limited liability company and partnership action, as the case may be, required to approve the transactions contemplated by this Agreement.

NOW, THEREFORE , in consideration of the mutual covenants, representations, warranties and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

3


ARTICLE I

DEFINITIONS

The terms set forth below in this Article I shall have the meanings ascribed to them below or in the part of this Agreement referred to below:

“Applicable Law” means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by, any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including all of the terms and provisions of the applicable common law of such Governmental Authority), as interpreted and enforced at the time in question.

“Borrowed Funds” has the meaning set forth in the recitals.

“Borrowed Funds Distribution” has the meaning set forth in the recitals.

“Certificate of Conveyance” means a certificate of conveyance in the form attached hereto as Exhibit D .

“Closing Date” means the date of the closing of the Offering.

“Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.

“Commission” means the U.S. Securities and Exchange Commission.

“Common Units” has the meaning assigned to such term in the Partnership Agreement.

“Deed” means a deed in the form attached hereto as Exhibit E .

“Deferred Issuance and Distribution” has the meaning assigned to such term in the Partnership Agreement.

“Delaware City Assets” has the meaning set forth in Section 2.1.

“Delaware City Easements” means a pipeline easement, in the form attached hereto as Exhibit A , and a utility easement, in the form attached hereto as Exhibit B .

“Delaware City Interests” has the meaning assigned to such term in the preamble.

“Delaware City Refining” has the meaning assigned to such term in the preamble.

“Delaware City Terminaling” has the meaning assigned to such term in the preamble.

“Delaware LLC Act” has the meaning assigned to such term in the recitals.

 

4


“Delaware LP Act” has the meaning assigned to such term in the recitals.

“Effective Time” means immediately prior to the closing of the Offering pursuant to the Underwriting Agreement.

“Environmental Laws” means all applicable federal, regional, state, and local laws, statutes, rules, regulations, orders, ordinances, judgments, codes, injunctions, decrees, permits and other legally enforceable requirements and rules of common law relating to (i) pollution or protection of human health, the environment or natural resources; (ii) any Release or threatened Release of, or exposure to, Hazardous Substances; (iii) greenhouse gas emissions; or (iv) the generation, manufacture, processing, distribution, use, treatment, storage, disposal, transport, arrangement for disposal or transport, handling or Release of any Hazardous Substances. Without limiting the foregoing, “Environmental Laws” include, without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Endangered Species Act, the Toxic Substances Control Act, the Occupational Safety and Health Act and other environmental conservation and protection laws, each as amended through the Closing Date.

“Environmental Losses” means any Losses suffered or incurred by reason of or arising out of (i) any violation or correction of violation of Environmental Laws; or (ii) any event, circumstance, action, omission, condition or environmental matter (including, without limitation, the exposure to, presence of, Release or threatened Release of Hazardous Substances) including, without limitation, (A) the cost and expense of any investigation, assessment, evaluation, response, abatement, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws or to satisfy any applicable Voluntary Cleanup Program, (B) the performance of a supplemental environmental project authorized or consented to by a Governmental Authority in partial or whole mitigation of a fine or penalty, (C) the cost or expense of the preparation and implementation of any investigatory closure, remedial or corrective action or other plans required or necessary under Environmental Laws or to satisfy any applicable Voluntary Cleanup Program and (D) the cost and expense for any environmental or toxic tort pre-trial, trial, or appellate legal or litigation support work.

“General Partner” has the meaning assigned to such term in the preamble.

“Governmental Authority” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

“Hazardous Substance” means (i) any substance that is designated, defined or classified as a hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or hazardous substance, or terms of similar meaning, or that is otherwise regulated by, or as to which liability may attach under any Environmental Law, including, without limitation, any hazardous substance as such term is defined under the federal Comprehensive Environmental Response, Compensation, and Liability Act, as amended through the Closing Date, (ii)

 

5


radioactive materials, asbestos or asbestos containing materials, polychlorinated biphenyls, urea formaldehyde insulation, toxic mold or radon and (iii) oil as defined in the Oil Pollution Act of 1990, as amended, including oil, gasoline, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, other refined petroleum hydrocarbon and petroleum products.

“Holding” has the meaning assigned to such term in the preamble.

“Incentive Distribution Rights” has the meaning assigned to such term in the Partnership Agreement.

“Indemnified Party” has the meaning set forth in Section 5.3(c).

“Indemnifying Party” has the meaning set forth in Section 5.3(c).

“Initial Capital Contribution” has the meaning assigned to such term in the recitals.

“Initial Limited Partner Interest” has the meaning assigned to such term in the recitals.

“Initial Partnership Agreement” has the meaning assigned to such term in the recitals.

“IPO Proceeds” has the meaning assigned to such term in the recitals.

“Lien” means any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to pledges, liens, indebtedness, security interest, charges, equities or other claims or encumbrances. The term “Lien” shall include easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations. For the purposes of this Agreement, a Person shall be deemed to be the owner of any property which they have acquired or hold subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to which title to the property has been retained by or vested in some other Person in a transaction intended to create a financing.

“Losses” means all losses, damages, liabilities (including, without limitation, tax liabilities), claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including, without limitation, court costs and reasonable attorney’s and experts’ fees) of any and every kind or character, known or unknown, fixed or contingent.

“Offering” means the initial public offering of the Partnership’s Common Units.

“Omnibus Agreement” means the Omnibus Agreement, substantially in the form filed as an exhibit to the Registration Statement.

“Option Closing Date” has the meaning assigned to such term in the Partnership Agreement.

“Option Proceeds” has the meaning assigned to such term in the recitals.

 

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“Over-Allotment Option” has the meaning assigned to such term in the recitals.

“Over-Allotment Option Debt” has the meaning assigned to such term in the recitals.

“Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of PBF Logistics LP, substantially in the form filed as an exhibit to the Registration Statement.

“Partnership” has the meaning assigned to such term in the preamble.

“Partnership Group” means the General Partner, the Partnership and all of the Partnership’s Subsidiaries, treated as a single consolidated entity.

“Partnership Group Assets” means, collectively, the Delaware City Assets and the Toledo Assets.

“Partnership Group Covered Environmental Losses” has the meaning assigned to such term in Section 5.2.

“Partnership Group Member” means any member of the Partnership Group.

“Party” and “Parties” has the meaning assigned to such term in the preamble.

“PBF Energy” has the meaning assigned to such term in the preamble.

“PBF Entities” means PBF Energy, and any Person controlled, directly or indirectly, by PBF Energy, other than the General Partner or a member of the Partnership Group, and “PBF Entity” means any of the PBF Entities.

“PBF Indemnitees” means PBF, Holding and PBF Energy, and any Person controlled, directly or indirectly, by PBF Energy, other than the General Partner or a member of the Partnership Group.

“PBF Indemnitors” means PBF, Holding and PBF Energy, jointly and severally.

“Permitted Lien” means (a) liens for real estate taxes, assessments, sewer and water charges or other governmental charges and levies not yet delinquent; (b) liens for taxes, assessments, judgments, governmental charges or levies, or claims not yet delinquent or the non-payment of which is being diligently contested in good faith by appropriate proceedings and for which adequate reserves have been set aside; (c) liens of mechanics, laborers, suppliers, workers and materialmen incurred in the ordinary course of business for sums not yet due or being diligently contested in good faith; and (d) liens incurred in the ordinary course of business in connection with worker’s compensation and unemployment insurance or other types of social security benefits.

“Person” means any individual, corporation, partnership, limited 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.

 

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“Pre-Formation Capital Expenditures” has the meaning assigned to such term in the recitals.

“Proceeds Distribution” has the meaning assigned to such term in the recitals.

“Recourse Loan” has the meaning set forth in the recitals.

“Registration Statement” means the Partnership’s Registration Statement on Form S-1 filed with the Commission (Registration No. 333-1985024), as amended and effective at the Effective Time.

“Release” or “Releasing” means depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaking, dumping or disposing into the environment, including, without limitation, the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Substance

“Retained Assets” means the assets and investments owned by the PBF Entities immediately prior to the Effective Time other than the Partnership Group Assets.

“Retained Environmental Liabilities” has the meaning set forth in Section 5.1(a).

“Subordinated Units” has the meaning assigned to such term in the Partnership Agreement.

“Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if such Person, directly or by one or more Subsidiaries of such Person, or a combination thereof, controls such partnership on the date of determination, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors, managers or other governing body of such Person.

“Toledo Assets” means the assets, tangible and intangible, fixed and contingent, and the access rights, as set forth on Schedule 2.2-B, free and clear of any Liens.

“Toledo Easement” means an access easement, in the form attached hereto as Exhibit C .

“Toledo Refining” has the meaning assigned to such term in the preamble.

 

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“Treasuries” has the meaning assigned to such term in the recitals.

“Treasury Regulations” means the United States Treasury regulations promulgated under the Code.

“Underwriters” means those underwriters listed in the Underwriting Agreement.

“Underwriting Agreement” means the underwriting agreement by and among the Partnership, the General Partner, PBF Energy, Barclays Capital Inc. and UBS Securities LLC, as representatives of the Underwriters, dated as of May 8, 2014.

ARTICLE II

TRANSACTIONS PRECEDING THE EFFECTIVE TIME

The Parties acknowledge and agree that the following actions have occurred or shall occur prior to the Effective Time:

Section 2.1 Limited Liability Company Interest in the General Partner . PBF Energy shall have contributed, transferred, assigned and conveyed to Holding, its successors and assigns, all right, title and interest of PBF Energy in and to the limited liability company interest in the General Partner, which Holding shall have accepted as a capital contribution.

Section 2.2 Delaware City Assets. Delaware City Refining shall have contributed, transferred, assigned and conveyed to Delaware City Terminaling, its successors and assigns, pursuant to a Deed and a Certificate of Conveyance, all right, title and interest of Delaware City Refining in and to the properties or assets, tangible and intangible, fixed and contingent, held by Delaware City Refining, as set forth on Schedule 2.2-A (collectively, the “ Delaware City Assets ”), subject to the Delaware City Easements, free and clear of any Liens, except Permitted Liens, which Delaware City Terminaling shall have accepted as a capital contribution.

ARTICLE III

CONTRIBUTION, ACKNOWLEDGEMENTS AND DISTRIBUTIONS

The following shall be completed immediately following the Effective Time in the order set forth herein:

Section 3.1 Distributions by Delaware City Refining and Toledo Refining to Holding.

(a) Delaware City Refining hereby grants, distributes, bargains, conveys, assigns, transfers, sets over and delivers, to Holding, its successors and its assigns, for its and their own use forever, pursuant to a Certificate of Conveyance, all right, title and interest in and to, the Delaware City Interests (which entity owns the Delaware City Assets, subject to the Delaware City Easements).

(b) Toledo Refining hereby grants, distributes, bargains, conveys, assigns, transfers, sets over and delivers, to Holding, its successors and its assigns, for its and their own use forever, pursuant to a Certificate of Conveyance, all right, title and interest in and to the Toledo Assets and the Toledo Easement.

 

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Section 3.2 Contribution by Holding to the Partnership. Holding hereby grants, bargains, contributes, assigns, transfers, sets over and delivers to the Partnership, its successors and its assigns, for its and their own use forever, all right, title and interest in and to (1) the Delaware City Interests (which entity owns the Delaware City Assets, subject to the Delaware City Easements), pursuant to a Certificate of Conveyance and (2) the Toledo Assets and the Toledo Easement pursuant to a Certificate of Conveyance, and the Partnership hereby accepts such membership interests and assets, in exchange for (i) 74,053 Common Units and 15,886,553 Subordinated Units representing an aggregate 50.2% limited partner interest in the Partnership, (ii) the Incentive Distribution Rights, (iii) the right to receive the Proceeds Distribution as reimbursement for the Pre-Formation Capital Expenditures, (iv) the right to receive the Borrowed Funds Distribution and (v) the right to receive the Deferred Issuance and Distribution.

Section 3.3 Distribution by Holding to PBF Energy. Holding hereby distributes, conveys, assigns, transfers, sets over and delivers to PBF Energy, its successors and assigns, for its and their own use forever, pursuant to a Certificate of Conveyance, all right, title and interest in and to (i) its interest in the General Partner, (ii) 74,053 Common Units and 15,886,553 Subordinated Units, (iii) the Incentive Distribution Rights, (iv) the right to receive the Proceeds Distribution as reimbursement for the Pre-Formation Capital Expenditures, (v) the right to receive the Borrowed Funds Distribution and (vi) the right to receive the Deferred Issuance and Distribution.

Section 3.4 Redemption of Holding’s Initial Limited Partner Interests. For and in consideration of the payment by the Partnership of $1,000 to Holding as a refund of the Initial Capital Contribution to the Partnership, along with 100% of any interest or profit that resulted from the investment or other use of such Initial Capital Contribution, the Partnership hereby redeems all of the Initial Limited Partner Interests of Holding.

Section 3.5 Retention of General Partner Interest. The General Partner hereby retains its noneconomic general partner interest in the Partnership.

Section 3.6 Payment and Contribution of Cash by the Public Through the Underwriters. The Parties acknowledge that the Partnership is undertaking the Offering and the public, through the Underwriters, pursuant to the Underwriting Agreement, will agree to make a capital contribution to the Partnership of $316.3 million in cash ($297.3 million, net of underwriting discounts) to the Partnership in exchange for 13,750,000 Common Units, representing an aggregate 43.3% limited partner interest in the Partnership, and the Over-Allotment Option.

Section 3.7 Payment of Transaction Expenses and Distribution by the Partnership to PBF Energy. The Parties acknowledge the payment and distribution by the Partnership, in connection with the transactions contemplated hereby, of (a) estimated transaction expenses paid to PBF Energy in the amount of approximately $5.0 (exclusive of the Underwriters’ discount and any structuring fee); (b) the Proceeds Distribution; and (c) the Borrowed Funds Distribution.

 

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ARTICLE IV

DEFERRED ISSUANCE AND DISTRIBUTION

Upon the earlier to occur of the expiration of the Over-Allotment Option period or the exercise in full of the Over-Allotment Option, the Partnership shall issue to PBF Energy a number of additional Common Units that is equal to the difference, if any, of (a) the total number of Option Units less (b) the aggregate number of Common Units, if any, actually purchased by and issued to the Underwriters pursuant to the exercise(s) of the Over-Allotment Option. Upon each exercise of the Over-Allotment Option, the Partnership shall (i) use the Option Proceeds from each such exercise, net of the Underwriters’ discounts and commissions, to purchase Treasuries, which will be used to fund anticipated capital expenditures, (ii) borrow an equal amount of debt equal to the proceeds from the Over-Allotment Option guaranteed by PBF Energy and (iii) distribute the proceeds of such additional borrowing to PBF Energy.

ARTICLE V

INDEMNIFICATION

Section 5.1 Environmental Indemnification for Benefit of the Partnership Group.

(a) From and after the Effective Time, the PBF Indemnitors shall retain and be solely responsible, among the Parties, for all Environmental Losses related to the matters identified on Schedule 5.1 hereto (the “ Retained Environmental Liabilities ”). From and after the Effective Time, the PBF Indemnitors, jointly and severally, shall indemnify, defend, save and hold harmless the Partnership Group Members and their respective affiliates, successors and assigns, and their respective directors, officers, employees, partners, agents and representatives from and against certain losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses arising from, resulting from or attributable to the Retained Environmental Liabilities. Obligations with respect to claims made pursuant to this Section 5.1(a) related to Retained Environmental Liabilities shall not terminate.

(b) From and after the Effective Time, the PBF Indemnitors shall indemnify, defend and hold harmless the Partnership Group Members and their respective affiliates, successors and assigns, and their respective directors, officers, employees, partners, agents and representatives from and against losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses arising from, resulting from or attributable to any Environmental Losses suffered or incurred by the Partnership Group Members relating to the ownership or operation of the Partnership Group Assets that occurred or existed on or before the Closing Date, but only to the extent such Environmental Losses (I) occurred or existed on or before the Closing Date, even if such Environmental Losses do not accrue until after the Closing Date, and (II) are identified prior to the 20 th anniversary of the Closing Date.

Section 5.2 Environmental Indemnification for Benefit of the PBF Indemnitees. The Partnership Group shall indemnify, defend and hold harmless the PBF Indemnitees from and against any Environmental Losses suffered or incurred by the PBF Indemnitees relating to the ownership or operation of the Partnership Group Assets to the extent occurring after the Closing Date (the “ Partnership Group Covered Environmental Losses ”), except to the extent (a) that the

 

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Partnership Group is indemnified with respect to any such Environmental Losses that are Retained Environmental Losses under Section 5.1(a) and (b) that such indemnification shall not apply to the extent of any negligence, willful misconduct or criminal conduct of any PBF Indemnitee that caused or contributed to such Environmental Loss.

Section 5.3 Additional Indemnification.

(a) In addition to and not in limitation of the indemnification provided under Section 5.1, the PBF Indemnitors, jointly and severally, shall either cure, as applicable, or indemnify, defend, save and hold harmless the Partnership Group Members from and against (I) any and all tax liabilities arising prior to the Closing Date or in connection with the closing of the Offering; (II) all taxes that the Partnership Group Members incur in connection with this Agreement unless prohibited by applicable law; and (III) Losses of any and every kind or character, known or unknown, fixed or contingent, suffered or incurred by any Partnership Group Member by reason of or arising out of any:

(i) failure of the Partnership Group to be the owner on the Closing Date of (x) valid and indefeasible title to the Partnership Group Assets, (y) valid and indefeasible easement rights, rights-of-way, leasehold and/or fee ownership interests in and to the lands on which any of the Delaware City Assets or Toledo Assets are located and (z) valid title to the equity interests in Delaware City Terminaling to the extent that such failure renders the Partnership Group liable or unable to use or operate the Delaware City Assets and in substantially the same manner as they were used and operated immediately prior to the Closing Date;

(ii) failure of the Partnership Group to have on the Closing Date any consent or governmental permit to the extent that such failure renders the Partnership Group unable to use or operate the Partnership Group Assets in substantially the same manner as they were operated immediately prior to the Closing Date; or

(iii) events or conditions associated with the Retained Assets.

(b) In addition to and not in limitation of the indemnification provided under Section 5.2, Partnership Group, jointly and severally, shall either cure, as applicable, or indemnify, defend, save and hold harmless the PBF Indemnitees from and against (I) any and all tax liabilities arising after the Closing Date or in connection with the closing of the Offering; and (II) Losses of any and every kind or character, known or unknown, fixed or contingent, suffered or incurred by any PBF Indemnitee by reason of or arising out of any events or conditions associated with the Partnership Group Assets after the Effective Time, except to the extent that the Partnership Group is indemnified with respect to any such Losses pursuant to Section 5.1 or Section 5.3(a).

(c) The party seeking indemnification pursuant to this Article V (the “ Indemnified Party ”) agrees that promptly after it becomes aware of facts giving rise to a claim for indemnification under this Article V, it will provide notice thereof in writing to the party from which the Indemnified Party seeks indemnification (the “ Indemnifying Party ”), specifying the nature of and specific basis for such claim; provided, that failure to timely provide such notice shall not affect the right of the Indemnified Party’s indemnification under this Section 5.3, except in the event and only to the extent the Indemnifying Party is materially prejudiced by such delay or omission.

 

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(d) The Indemnifying Party shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the Indemnified Party that are covered by the indemnification under this Section 5.3, including, without limitation, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided, however, that no such settlement shall be entered into without the consent (such consent not to be unreasonably withheld) of the Indemnified Party (with the concurrence of the Conflicts Committee, if the Indemnified Party is a Partnership Group Member) unless it includes a full release of the Indemnified Party from such matter or issues, as the case may be, and does not include the admission of fault, culpability or a failure to act, by or on behalf of such Indemnified Party, and involves anything other than the payment of money by the Indemnifying Party.

(e) The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with respect to all aspects of the defense of any claims covered by the indemnification under this Section 5.3, including, without limitation, the prompt furnishing to the Indemnifying Party of any correspondence or other notice relating thereto that the Indemnified Party may receive, permitting the name of the Indemnified Party to be utilized in connection with such defense, the making available to the Indemnifying Party of any files, records or other information of the Indemnified Party that the Indemnifying Party reasonably considers relevant to such defense and the making available to the Indemnifying Party, at no cost to the Indemnifying Party, of any directors, officers or employees of the Indemnified Party; provided, however, that in connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party and further agrees to endeavor to maintain the confidentiality of all files, records and other information furnished by the Indemnified Party pursuant to this subsection (e). In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in connection with the defense of any claims covered by the indemnification set forth in this Section 5.3; provided, however, that the Indemnified Party may, at its own option, cost and expense, hire and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party reasonably informed as to the status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense.

(f) An Indemnified Party shall take all commercially reasonable steps to mitigate damages with respect to any claim for which it is seeking indemnification and shall use commercially reasonable efforts to avoid any costs or expenses associated with such claim and, if such costs and expenses cannot be avoided, to minimize the amount thereof.

(g) In determining the amount of any Losses for which the Indemnified Party is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance proceeds realized by the Indemnified Party, and such correlative insurance benefit shall be net of any incremental insurance premium that becomes due and payable by the Indemnified Party as a result of such claim and (ii) all amounts recovered by the

 

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Indemnified Party under contractual indemnities from third parties. The Indemnified Party hereby agrees to use reasonable efforts to realize any applicable insurance proceeds or amounts recoverable under such contractual indemnities, provided, however, that the costs and expenses of the Indemnified Party in connection with such efforts shall be promptly reimbursed by the Indemnifying Party.

(h) The date on which the Indemnifying Party receives notification of a claim in accordance with Section 5.3(c) for indemnification shall determine whether such claim is timely made.

(I) NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT SHALL ANY PARTY’S INDEMNIFICATION OBLIGATION UNDER THIS SECTION 5.3 COVER OR INCLUDE CONSEQUENTIAL, INDIRECT, INCIDENTAL, PUNITIVE, EXEMPLARY, SPECIAL OR SIMILAR DAMAGES OR LOST PROFITS SUFFERED BY ANY OTHER PARTY ENTITLED TO INDEMNIFICATION UNDER THIS SECTION 5.3.

Section 5.4 Survival. All indemnification obligations under this Article V shall survive any expiration or termination of this Agreement, and shall remain in full force and effect.

ARTICLE VI

FURTHER ASSURANCES

From time to time after the Effective Time, and without any further consideration, the Parties agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale, conveyances, instruments, notices, releases, acquittances and other documents, and to do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate (i) more fully to assure that the applicable Parties own all of the properties, rights, titles, interests, estates, remedies, powers and privileges granted by this Agreement, or which are intended to be so granted, (ii) more fully and effectively to vest in the applicable Parties and their respective successors and assigns beneficial and record title to the interests contributed and assigned by this Agreement or intended to be so and (iii) more fully and effectively to carry out the purposes and intent of this Agreement.

ARTICLE VII

EFFECTIVE TIME

Notwithstanding anything contained in this Agreement to the contrary, none of the provisions of Article III of this Agreement shall be operative or have any effect until the Effective Time, at which time all the provisions of Article III of this Agreement shall be effective and operative in accordance with Article III, without further action by any Party hereto.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 Order of Completion of Transactions. The transactions provided for in Article III of this Agreement shall be completed immediately following the Effective Time in the order set forth therein. Following the completion of the transactions provided for in Article III, the transactions provided for in Article IV, if they occur, shall be completed.

 

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Section 8.2 Construction of Agreement. Unless otherwise specified, all references herein are to the Articles, Sections, Schedule and Exhibits of this Agreement and all Schedules and Exhibits are incorporated herein. All headings herein are intended solely for convenience of reference and shall not affect the meaning or interpretation of the provisions of this Agreement. 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. Unless expressly provided otherwise, all references to days, weeks, months and quarters mean calendar days, weeks, months and quarters, respectively. A reference to any Party to this Agreement or another agreement or document includes the Party’s permitted successors and assigns. 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. Except where specifically stated otherwise, any reference to any Applicable Law or agreement shall be a reference to the same as amended, supplemented or reenacted from time to time. 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.

Section 8.3 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

Section 8.4 No Third Party Beneficiaries. It is expressly understood that the provisions of this Agreement do not impart enforceable rights in anyone who is not a Party or successor or permitted assigns of a Party.

Section 8.5 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or portable document format (pdf)) for the convenience of the Parties hereto, each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement.

Section 8.6 Choice of Law. This Agreement shall be subject to and governed by the laws of the State of Delaware.

Section 8.7 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be valid and effective under Applicable Law, but if any provision of this Agreement or the application of any such provision to any person or circumstance will be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith with a view to substitute for such provision a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

Section 8.8 Amendment or Modification. This Agreement may be amended or modified from time to time only by the written agreement of all the Parties hereto. Each such instrument shall be reduced to writing and shall be designated on its face an “Amendment” or an “Addendum” to this Agreement.

 

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Section 8.9 Integration. This Agreement and the instruments referenced herein together constitute the entire agreement among the Parties pertaining to the subject matter hereof and supersede all prior agreements and understandings of the Parties in connection therewith. No promise, representation or inducement has been made by any of the Parties concerning the subject matter of this Agreement and none of the Parties shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

Section 8.10 Deed; Bill of Sale; Assignment. To the extent required and permitted by applicable law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of the assets and interests referenced herein.

Section 8.11 Notice. All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when delivered; (b) if mailed via the official government mail system, five (5) business days after mailing, provided said notice is sent first-class, postage pre-paid, via certified or registered mail, with a return receipt requested; (c) if mailed by an internationally-recognized overnight express mail service such as Federal Express, UPS, or DHL Worldwide, one (1) business day after deposit therewith prepaid; or (d) if by e-mail, one (1) business day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows:

If to PBF Energy Inc.:

PBF Energy Inc.

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jeffrey Dill, Esq., General Counsel

Telecopy No: ( 973) 455-7500

Email: jeffrey.dill@pbfenergy.com

If to Holding:

PBF Holding Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jeffrey Dill, Esq., General Counsel

Telecopy No: ( 973) 455-7500

Email: jeffrey.dill@pbfenergy.com

 

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If to PBF Energy:

PBF Energy Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jeffrey Dill, Esq., General Counsel

Telecopy No: ( 973) 455-7500

Email: jeffrey.dill@pbfenergy.com

If to the Partnership Group:

PBF Logistics GP LLC

c/o PBF Logistics GP LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jim Fedena, Senior VP, Logistics

Telecopy No: ( 973) 455-7500

Email: jim.fedena@pbfenergy.com

with a copy, which shall not constitute notice, to:

PBF Logistics LP

c/o PBF Logistics GP LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Matt Lucey, Executive VP

Telecopy No: ( 973) 455-7500

Email: matthew.lucey@pbfenergy.com

or to such other address or to such other person as either Party will have last designated by notice to the other Party.

Section 8.12 Survival. All indemnification obligations and covenants under this Agreement shall survive the expiration or termination of this Agreement in accordance with their terms.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement on the date first set forth above.

 

PBF LOGISTICS LP

By: PBF Logistics GP LLC, its general partner

By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

PBF LOGISTICS GP LLC
By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

PBF ENERGY INC.
By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

PBF ENERGY COMPANY LLC
By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

PBF HOLDING COMPANY LLC
By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

S IGNATURE P AGE TO THE C ONTRIBUTION AND C ONVEYANCE A GREEMENT


DELAWARE CITY REFINING

COMPANY LLC

By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

DELAWARE CITY TERMINALING COMPANY LLC
By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

TOLEDO REFINING COMPANY LLC
By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

S IGNATURE P AGE TO THE C ONTRIBUTION AND C ONVEYANCE A GREEMENT


Schedule 2.2-A

Delaware City Assets

 

1. Loop Track Unloading Facility
2. Double Loop Track – consisting of 17,165 feet of track including eight (8) turnouts
3. Two (2) turnouts connecting to the NS railroad lead track
4. 25 railcar unloading spots and associated piping and pump station (6 pumps and motors and sump pump)
5. Motor Control Center (MCC) building with controls and lighting
6. 1400 square foot office/change room
7. Oil mist lubrication system for the pumps and motors
8. Two instrument air compressors, air dryers and associated piping
9. Firewater system, including pump, shelter, foam building, piping and hydrants
10. Overhead hoist over the pump pit
11. 6 Coriolis flow meters, 2 Omni computers and proving connections
12. In-line sampler system
13. Eyewash stations and fire extinguishers
14. Perimeter fencing and gate, electronic turnstile, area lighting and security camera
15. 15 railcar unloading spots with all associated piping, lighting, grounding and controls.
16. Pedestrian bridge
17. 150,000 gallon firewater tank and (11) elevated fire monitors
18. Eyewash stations, safety shower and fire extinguishers
19. Track pans with drains to storm water header
     [Items 15 through 19 are part of ongoing project and not fully operational]


Schedule 2.2-B

Toledo Assets

Four LACT Units and Associated Meters


Schedule 5.1

Retained Environmental liabilities

On June 14, 2013, two administrative appeals were filed by the Sierra Club and Delaware Audubon regarding a permit Delaware City Refining Company LLC (“DCR”) obtained to allow loading of crude oil onto barges. The appeals allege that both the loading of crude oil onto barges and the operation of the Delaware City rail unloading terminal violate Delaware’s Coastal Zone Act. The first appeal is Number 2013-1 before the State Coastal Zone Industrial Control Board (the “CZ Board”), and the second appeal is before the Environmental Appeals Board and appeals Secretary’s Order No. 2013-A-0020. The CZ Board held a hearing on the first appeal on July 16, 2013, and ruled in favor of DCR and the State of Delaware and dismissed Appellants’ appeal for lack of standing. Sierra Club and Delaware Audubon have appealed that decision to the Delaware Superior Court, New Castle County, Case No. N13A-09-001 ALR, and DCR and the State have filed cross-appeals. Briefs have been filed in this appeal but no date has been set for a decision by the Superior Court. A hearing on the second appeal before the Environmental Appeals Board, case no. 2013-06, was held on January 13, 2014, and the Board ruled in favor of DCR and the State and dismissed the appeal for lack of jurisdiction. A written decision by the Board has been issued and the Appellants have the right to appeal the decision to Superior Court. If the Appellants in one or both of these matters ultimately prevail, the outcome may have an adverse material effect on our financial condition, results of operations or cash flows.


EXHIBIT A

PIPELINE EASEMENT


Tax Parcel No: 12-008.00-015

Prepared by and return to:

Shawn P. Tucker, Esquire

Drinker Biddle & Reath LLP

1100 North Market Street

Suite 1000

Wilmington, Delaware 19801

PIPELINE EASEMENT

THIS PIPELINE EASEMENT (this “ Easement ”) is made on the 13 th day of May, 2014 from DELAWARE CITY TERMINALING COMPANY, LLC, a Delaware limited liability company (hereinafter “ Grantor ”), to DELAWARE CITY REFINING COMPANY, LLC, a Delaware limited liability company (hereinafter “ Grantee ”).

For and in consideration of TEN DOLLARS AND NO/100ths ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in connection with that certain Contribution and Conveyance Agreement by and among PBF Logistics LP, PBF Logistics GP LLC, PBF Energy Company LLC, PBF Holding Company LLC, Delaware City Refining Company LLC, Delaware City Terminaling Company LLC and Toledo Refining Company LLC, dated as of May 8, 2014, Delaware City Terminaling Company LLC, a Delaware limited liability company, whose address is One Sylvan Way, Second Floor, Parsippany, New Jersey, 07054 (“ Grantor ”), does hereby GRANT and CONVEY to Delaware City Refining Company LLC, a Delaware limited liability company, whose address is One Sylvan Way, Second Floor, Parsippany, New Jersey, 07054 (“ Grantee ”), its successors and assigns, an exclusive right of way and easement (the “ Easement ”) to (a) operate, inspect, protect, maintain, repair, replace, change the size of and remove (collectively, “ Use ”) one (1) pipeline, having a diameter of up to twenty four inches (24”) (the “ Pipeline ”), and (b) construct, install, operate, maintain, repair, replace and remove appurtenances to the Pipeline, including, but not limited to, fittings, tie-overs, valves, corrosion control equipment, communication equipment, including fiber, and any other appurtenances necessary for the Pipeline (collectively, together with the Pipeline, the “ Facilities ”), for the purpose of transporting oil, gas, other hydrocarbons, water, or any other liquids, gases or other substances that can be legally transported through a pipeline in, on, over, across and under the land owned by Grantor and located in Delaware City, Delaware, as described in the metes and bounds in Exhibit “A” and depicted in Exhibit “B” attached hereto and made part hereof (the “ Land ”).

TO HAVE AND TO HOLD the Easement unto Grantee, its successors and assigns, subject however, to the conditions, covenants and agreements to be kept, observed and performed by Grantor and Grantee as follows:

 

  1. The Easement granted herein shall be fifty feet (50’) in width.

 

  2. The Pipeline (and any related underground Facilities) is in compliance with applicable law. Grantor and Grantee further agree as follows:

 

A-1


  (a) Notwithstanding the foregoing, Grantee shall have the right to install Facilities (i) on the surface of the Land, and (ii) between any surface Facilities and any underground Facilities, in each case as is reasonably necessary (in Grantee’s judgment) for the Use of the Pipeline,

 

  (b) Grantee shall have the right from time to time to cut and remove any trees, undergrowth or other obstructions, if any, growing or located in the Easement that may interfere with Grantee’s Use of the Facilities.

 

  (c) Grantee shall from time to time inspect the Easement and repair within a reasonable time any sink holes, soil erosion, sloughing or impairment to natural drainage affecting the Easement and occasioned solely by the existence of the Facilities.

 

  3. Grantee shall have a permanent, non-exclusive right of ingress to and egress from the Easement on, over and across the Land for any lawful purpose related to the Easement; provided, however, that to the extent reasonably practicable, Grantee shall limit such right of ingress and egress to roads or other routes customarily used or designated therefor by Grantor.

 

  4. Grantee shall, at its sole cost and expense, construct, operate and maintain the Facilities in accordance with applicable law.

 

  5. Except where caused by the willful misconduct or sole or gross negligence of Grantor or its agents or employees, Grantee agrees to defend, indemnify and hold harmless Grantor from all claims, demands and causes of action of any kind for bodily injury, death, or loss or damage of property of any person arising out of or resulting from the acts or omissions of Grantee, its contractors, agents, employees, or invitees in connection with Grantee’s Use of the Easement.

 

  6. Grantor reserves the right to use the Land for all purposes not inconsistent with the Easement, so long as such use does not interfere with Use of the Facilities. Grantor agrees not to change the grade over the Easement.

 

  7. Grantee shall have full responsibility, at its sole risk, cost and expense, to obtain prior to commencing operations hereunder, and thereafter maintain during the term hererof, any and all necessary permits, including, without limitation, those permits required to cross any and all roads, railroads, canals and other private, public and quasi public rights of way with the Facilities. Grantee agrees to pay all taxes which may be levied or assessed on the Facilities.

 

  8.

All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when delivered; (b) if mailed via the official governmental mail system, five (5) business days after mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt

 

A-2


  requested; (c) if mailed by an internationally-recognized overnight express mail service such as Federal Express, UPS, or DHL Worldwide, one (1) Business Day after deposit therewith prepaid; or (d) if by e-mail, one (1) business day after delivery with receipt confirmed. All notices, demands and requests to be sent to the parties shall be sent or made at the addresses set forth in the introductory paragraph of this Pipeline Easement.

 

  9. The terms and conditions hereof shall be binding upon and shall inure to the benefit of the parties hereto, their respective successors and assigns.

 

  10. This Pipeline Easement shall be construed in accordance with the laws of the State of Delaware, without giving effect to its principles of conflict of laws.

 

  11. This Pipeline Easement may be executed in multiple counterparts, each of which shall constitute an original, and all of which, when taken together, shall constitute one instrument.

[Signatures begin next page.]

 

A-3


IN WITNESS WHEREOF, the parties have executed this Pipeline Easement as of the date of the parties’ acknowledgment set forth below, to be effective as of the 13 th day of May, 2014.

 

GRANTOR :

 

DELAWARE CITY TERMINALING COMPANY LLC , a Delaware limited liability company

By:    
Name:    
Title:    

STATE DELAWARE

COUNTY OF NEW CASTLE, SS.:

On this, the 13 th day of May, 2014, before me, the undersigned officer, personally appeared                      , who acknowledged him/herself to be the                      of Delaware City Terminaling Company, LLC, a Delaware limited liability company, and that s/he, as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing the name of the of such entity by him/herself as such officer.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

[Notarial Seal]

My Commission Expires:

S IGNATURE P AGE TO THE P IPELINE E ASEMENT


GRANTEE:

 

DELAWARE CITY REFINING COMPANY LLC , a Delaware limited liability company

By:    
Name:    
Title:    

STATE OF DELAWARE

COUNTY OF NEW CASTLE, SS:

On this, the 13 th day of May, 2014, before me, the undersigned officer, personally appeared                      , who acknowledged him/herself to be the                      of Delaware City Refining Company, LLC, a Delaware limited liability company, and that s/he, as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing the name of the of such entity by him/herself as such officer.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

[Notarial Seal]

My Commission Expires:

S IGNATURE P AGE TO THE P IPELINE E ASEMENT


Exhibit “A”

Description of the Land

File No. 23370-ESMT-01                                          January 27, 2014

Description of a 20’ wide Pipeline Easement through Parcel 4A, South Tract, land now or formerly of Delaware City Refining Company LLC (Deed Record 20100601-0026890), situate southeasterly of Delaware Route 1, southwesterly of School House Road, easterly of Bear Corbitt Road and northerly of Norfolk Southern Railroad Company Reybold Industrial Track Right of Way, Red Lion Hundred, New Castle County, Delaware (through Tax Parcels 12-007.00-023 and 12-007.00-007).

ALL THAT CERTAIN tract, piece or parcel of land situate southeasterly of Delaware Route 1, southwesterly of School House Road, easterly of Bear Corbitt Road and northerly of Norfolk Southern Railroad Company Reybold Industrial Track Right of Way, and shown as a 20’ wide Pipeline Easement on a plan prepared by VanDemark & Lynch, Inc., Engineers, Planners and Surveyors, Wilmington, Delaware on file No. 23370-ESMT-01, dated January 27, 2014, entitled “Exhibit Plan, Pipeline Easement, prepared for, Delaware City Refining Company, LLC”, and being more particularly described as follows, to wit:

BEGINNING at a point on the northerly side of Norfolk Southern Railroad Company Reybold Industrial Track Right of Way, at 60’ wide, a southerly line for Parcel 4A, South Tract, land now or formerly of Delaware City Refining Company LLC (Deed Record 20100601-0026890), said point being measured the three (3) following described courses and distances along the said northerly side of Norfolk Southern Railroad from the intersection of the easterly side of Bear Corbitt Road, State Road No. 7, a variable width public road, with the said northerly side of Norfolk Southern Railroad,

 

  1. Easterly, by a curve to the left having a radius of 22,890.00 feet, an arc length of 1,612.09 feet to a point, said point being distant by a chord of North 86°37’43” East, 1,611.76 feet from the last described point;

 

  2. Easterly, by a curve to the left having a radius of 22,920.00 feet, an arc length of 728.92 feet to a point, said point being distant by a chord of North 83°41’59” East, 728.89 feet from the last described point; and

 

  3. North 82°44’10” East, 767.05 feet to the Point of Beginning;

THENCE from the said point of Beginning, along the centerline of a 24” pipeline, and the herein described centerline of a 20 foot wide easement as measured 10 feet at right angles each way from the centerline of said 24” pipeline, through the said land now or formerly of Parcel 4A, South Tract, the nineteen (19) following described courses and distances:

 

  1. North 07°08’40” West, 362.68 feet to a point;

 

  2. South 82°52’23” West, 20.00 feet to a point;

 

  3. North 07°07’37” West, 10.00 feet to a point;


  4. North 82°52’23” East, 20.00 feet to a point;

 

  5. North 07°07’37” West, 165.00 feet to a point;

 

  6. North 00°00’16” West, 137.58 feet to a point;

 

  7. North 19°27’32” West, 249.21 feet to a point;

 

  8. North 39°26’21” West, 40.42 feet to a point;

 

  9. North 50°33’43” East, 20.00 feet to a point;

 

  10. North 39°26’17” West, 10.00 feet to a point;

 

  11. South 50°33’43” West, 20.00 feet to a point;

 

  12. North 39°26’49” West, 191.00 feet to a point;

 

  13. North 59°27’08” West, 454.47 feet to a point;

 

  14. North 30°32’52” East, 20.00 feet to a point;

 

  15. North 59°27’08” West, 10.00 feet to a point;

 

  16. South 30°32’52” West, 20.00 feet to a point;

 

  17. North 59°27’08” West, 285.00 feet to a point;

 

  18. North 30°32’52” East, 28.14 feet to a point; and

 

  19. North 59°27’08” West, 24.66 feet to the point of Ending at the centerline of the flange on the inlet side of a valve on said 24” inch pipeline.

Containing within said metes and bounds, 41,163 square feet (0.945 of an acre) of land, being the same, more or less.

 

AKG

Chk’d by:

 


Exhibit “B”

Depiction of the Land


EXHIBIT B

UTILITY EASEMENT


Tax Parcel No: 12-008.00-015

Prepared by and return to:

Shawn P. Tucker, Esquire

Drinker Biddle & Reath LLP

1100 North Market Street

Suite 1000

Wilmington, Delaware 19801

UTILITY EASEMENT

THIS UTILITY EASEMENT (this “ Easement ”) is made on the 13 th day of May, 2014 from DELAWARE CITY TERMINALING COMPANY, LLC, a Delaware limited liability company (hereinafter “ Grantor ”), to DELAWARE CITY REFINING COMPANY, LLC, a Delaware limited liability company (hereinafter “ Grantee ”).

For and in consideration of TEN DOLLARS AND NO/100ths ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in connection with that certain Contribution and Conveyance Agreement by and among PBF Logistics LP, PBF Logistics GP LLC, PBF Energy Company LLC, PBF Holding Company LLC, Delaware City Refining Company LLC, Delaware City Terminaling Company LLC and Toledo Refining Company LLC, dated as of May 8, 2014, Delaware City Terminaling Company LLC, a Delaware limited liability company, whose address is One Sylvan Way, Second Floor, Parsippany, New Jersey, 07054 (“ Grantor ”), does hereby GRANT and CONVEY to Delaware City Refining Company LLC, a Delaware limited liability company, whose address is One Sylvan Way, Second Floor, Parsippany, New Jersey, 07054 (“ Grantee ”), its successors and assigns, in addition to and not in lieu of any existing utility easements, a right of way and easement (the “ Easement ”) to (a) operate, inspect, protect, maintain, repair, replace, change the size of and remove (collectively, “ Use ”) any equipment related to electricity, power, gas, water and other public utilities providing services to the assets and property owned and operated by Delaware City Refining Company, LLC (the “ Utilities ”), and (b) construct, install, operate, maintain, repair, replace and remove appurtenances to the Utilities, including, (collectively, together with the Utilities, the “ Facilities ”), for the purpose of operating the refinery assets owned and operated by Delaware City Refining Company LLC and located in Delaware City, Delaware, as described in the metes and bounds in Exhibit “A” and depicted in Exhibit “B” attached hereto and made part hereof (the “ Land ”), and any other lawful purpose related thereto.

TO HAVE AND TO HOLD the Easement unto Grantee, its successors and assigns, subject however, to the conditions, covenants and agreements to be kept, observed and performed by Grantor and Grantee as follows:

 

  1. The Easement granted herein shall be fifty feet (50’) in width.

 

B-1


  2. The Utilities (and any related Facilities) are and shall be in compliance with applicable law. Grantor and Grantee further agree as follows:

 

  (a) Grantee shall have the right from time to time to cut and remove any trees, undergrowth or other obstructions, if any, growing or located in the Easement that may interfere with Grantee’s Use of the Facilities.

 

  (b) Grantee shall from time to time inspect the Easement and repair within a reasonable time any sink holes, soil erosion, sloughing or impairment to natural drainage affecting the Easement and occasioned solely by the existence of the Facilities.

 

  3. Grantee shall have a permanent, non-exclusive right of ingress to and egress from the Easement on, over and across the Land for any lawful purpose related to the Easement; provided, however, that to the extent reasonably practicable, Grantee shall limit such right of ingress and egress to roads or other routes customarily used or designated therefor by Grantor.

 

  4. Grantee shall, at its sole cost and expense, construct, operate and maintain the Facilities in accordance with applicable law.

 

  5. Except where caused by the willful misconduct or sole or gross negligence of Grantor or its agents or employees, Grantee agrees to defend, indemnify and hold harmless Grantor from all claims, demands and causes of action of any kind for bodily injury, death, or loss or damage of property of any person arising out of or resulting from the acts or omissions of Grantee, its contractors, agents, employees, or invitees in connection with Grantee’s Use of the Easement.

 

  6. Grantor reserves the right to use the Land for all purposes not inconsistent with the Easement, so long as such use does not interfere with Use of the Facilities. Grantor agrees not to change the grade over the Easement.

 

  7. Grantee shall have full responsibility, at its sole risk, cost and expense, to obtain prior to commencing operations hereunder, and thereafter maintain during the term hererof, any and all necessary permits, including, without limitation, those permits required to cross any and all roads, railroads, canals and other private, public and quasi public rights of way with the Facilities. Grantee agrees to pay all taxes which may be levied or assessed on the Facilities.

 

  8.

All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when delivered; (b) if mailed via the official governmental mail system, five (5) business days after mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (c) if mailed by an internationally-recognized overnight express mail

 

B-2


  service such as Federal Express, UPS, or DHL Worldwide, one (1) Business Day after deposit therewith prepaid; or (d) if by e-mail, one (1) business day after delivery with receipt confirmed. All notices, demands and requests to be sent to the parties shall be sent or made at the addresses set forth in the introductory paragraph of this Utility Easement.

 

  9. The terms and conditions hereof shall be binding upon and shall inure to the benefit of the parties hereto, their respective successors and assigns.

 

  10. This Utility Easement shall be construed in accordance with the laws of the State of Delaware, without giving effect to its principles of conflict of laws.

 

  11. This Utility Easement may be executed in multiple counterparts, each of which shall constitute an original, and all of which, when taken together, shall constitute one instrument.

[Signatures begin next page.]

 

B-3


IN WITNESS WHEREOF, the parties have executed this Utility Easement as of the date of the parties’ acknowledgment set forth below, to be effective as of the 13 th day of May, 2014.

 

GRANTOR :

 

DELAWARE CITY TERMINALING COMPANY LLC , a Delaware limited liability company

By:

   

Name:

 

Title:

 

STATE OF DELAWARE

COUNTY OF NEW CASTLE, SS:

On this, the 13 th day of May, 2014, before me, the undersigned officer, personally appeared                      , who acknowledged him/herself to be the                      of Delaware City Terminaling Company, LLC, a Delaware limited liability company, and that s/he, as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing the name of the of such entity by him/herself as such officer.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

[Notarial Seal]

My Commission Expires:

 

S IGNATURE P AGE TO THE U TILITY E ASEMENT


GRANTEE :

 

DELAWARE CITY REFINING COMPANY LLC , a Delaware limited liability company

 

By:

   

Name:

 

Title:

 

STATE OF DELAWARE

COUNTY OF NEW CASTLE, SS:

On this, the 13 th day of May, 2014, before me, the undersigned officer, personally appeared                      , who acknowledged him/herself to be the                      of Delaware City Refining Company, LLC, a Delaware limited liability company, and that s/he, as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing the name of the of such entity by him/herself as such officer.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

[Notarial Seal]

My Commission Expires:

 

 

S IGNATURE P AGE TO THE U TILITY E ASEMENT


Exhibit “A”

Description of the Land

File No. 23370-ESMT-05, Revision 1                                         January 24, 2014

Description of a 20’ wide Power Line Easement through Parcel 4A, South Tract, land now or formerly of Delaware City Refining Company LLC (Deed Record 20100601-0026890), situate southeasterly of Delaware Route 1, southwesterly of School House Road, easterly of Bear Corbitt Road and northerly of Norfolk Southern Railroad Company Reybold Industrial Track Right of Way, Red Lion Hundred, New Castle County, Delaware. (through Tax Parcel 12-007.00-023)

ALL THAT CERTAIN tract, piece or parcel of land situate southeasterly of Delaware Route 1, southwesterly of School House Road, easterly of Bear Corbitt Road and northerly of Norfolk Southern Railroad Company Reybold Industrial Track Right of Way, and shown as a 20’ wide Power Line Easement on a plan prepared by VanDemark & Lynch, Inc., Engineers, Planners and Surveyors, Wilmington, Delaware on file No. 23370-ESMT-05, dated June 7, 2013, last revised January 24, 2013, entitled “Exhibit Plan, Power Line Easement, prepared for, Delaware City Refining Company, LLC”, and being more particularly described as follows, to wit:

BEGINNING at a point on the northerly side of Norfolk Southern Railroad Company Reybold Industrial Track Right of Way, at 60’ wide, a southerly line for Parcel 4A, South Tract, land now or formerly of Delaware City Refining Company LLC (Deed Record 20100601-0026890), said point being measured along the said northerly side of Norfolk Southern Railroad from the intersection of the easterly side of Bear Corbitt Road, State Road No. 7, a variable width public road, with the said northerly side of Norfolk Southern Railroad, easterly, by a curve to the left having a radius of 22,890.00 feet, an arc length of 796.46 feet to a point, said point being distant by a chord of North 87°38’57” East, 796.42 feet from the last described point;

THENCE from the said point of Beginning, through the said land now or formerly of Parcel 4A, South Tract, the eight (8) following described courses and distances:

 

  1. North 17°06’52” West, 1,412.28 feet to a point;

 

  2. North 19°43’37” East, 323.96 feet to a point;

 

  3. North 25°05’36” East, 160.27 feet to a point;

 

  4. North 19°14’45” East, 139.36 feet to a point;

 

  5. North 22°50’04” East, 481.28 feet to a point;

 

  6. North 26°28’32” East, 327.63 feet to a point;

 

  7. South 78°26’03” East, 228.15 feet to a point; and

 

  8. North 11°19’20” East, 10.73 feet to a point on the southwesterly side of School House Road, a variable width public road;


THENCE along the said southwesterly side of School House Road, easterly, by a curve to the right having a radius of 670.01 feet, an arc length of 20.61 feet to a point, said point being distant by a chord of South 64°42’36” East, 20.61 feet from the last described point;

THENCE through the said land now or formerly of Parcel 4A, South Tract, the eight (8) following described courses and distances:

 

  1. South 11°19’20” West, 25.84 feet to a point;

 

  2. North 78°26’03” West, 232.86 feet to a point;

 

  3. South 26°28’32” West, 311.66 feet to a point;

 

  4. South 22°50’04” West, 479.95 feet to a point;

 

  5. South 19°14’45” West, 139.79 feet to a point;

 

  6. South 25°05’36” West, 160.35 feet to a point;

 

  7. South 19°43’37” West, 316.36 feet to a point;

 

  8. South 17°06’52” East, 1,410.51 feet to a point on the said northerly side of Norfolk Southern Railroad;

THENCE, along the said northerly side of Norfolk Southern Railroad, westerly, by a curve to the right having a radius of 22,890.00 feet, an arc length of 20.59 feet to the point and place of Beginning, said point being distant by a chord of South 86°37’36” West, 20.59 feet from the last described.

Containing within said metes and bounds, 61,610 square feet (1.414 acres) of land, being the same, more or less.

 

AKG

Chk’d by:


Exhibit “B”

Depiction of the Land


EXHIBIT C

ACCESS EASEMENT


ACCESS EASEMENT

 

THE STATE OF OHIO    §   
   §    KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF LUCAS    §   

For and in consideration of TEN DOLLARS AND NO/100ths ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in connection with that certain Contribution and Conveyance Agreement by and among PBF Logistics LP, PBF Logistics GP LLC, PBF Energy Company LLC, PBF Holding Company LLC, Delaware City Refining Company LLC, Delaware City Terminaling Company LLC and Toledo Refining Company LLC, dated as of May 8, 2014, Toledo Refining Company LLC, a Delaware limited liability company, whose address is One Sylvan Way, Second Floor, Parsippany, New Jersey, 07054 (“ Grantor ”), does hereby GRANT, BARGAIN, SELL and CONVEY to PBF Holding Company LLC, a Delaware limited liability company, whose address is One Sylvan Way, Second Floor, Parsippany, New Jersey, 07054 (“ Grantee ”), its successors and assigns, including PBF Logistics LP, a Delaware limited partnership, an exclusive right of way and easement to cross any walkways, roadways and pathways (the “ Easement ”) necessary to (a) access, operate, inspect, protect, maintain, repair and remove (collectively, “ Use ”) the equipment, facilities and other property described in Exhibit “A” attached hereto and made part hereof (the “ Equipment ”), and (b) construct, install, operate, maintain, repair, replace and remove appurtenances to the Equipment (collectively, together with the Equipment, the “ Facilities ”), for the purpose of operating the Facilities, in, on, over, across and under the land owned by Grantor and located in Toledo, Ohio, as described in the metes and bounds in Exhibit “B ” and depicted in Exhibit “C” attached hereto and made part hereof (the “ Land ”).

TO HAVE AND TO HOLD the Easement unto Grantee, its successors and assigns, subject however, to the conditions, covenants and agreements to be kept, observed and performed by Grantor and Grantee as follows:

 

  1. The Easement granted herein shall be fifty feet (50’) in width.

 

  2. Grantor and Grantee further agree as follows:

 

  (a) Grantee shall have the right from time to time to cut and remove any trees, undergrowth or other obstructions, if any, growing or located in the Easement that may interfere with Grantee’s Use of the Facilities.

 

  (b) Grantee shall from time to time inspect the Easement and repair within a reasonable time pavement, curbing, any sink holes, soil erosion, sloughing or impairment to natural drainage affecting the Easement and occasioned solely by the existence of the Facilities.

 

C-1


  3. Grantee shall have a permanent, non-exclusive right of ingress to and egress from the Easement on, over and across the Land for any lawful purpose related to the Easement; provided, however, that to the extent reasonably practicable, Grantee shall limit such right of ingress and egress to roads or other routes customarily used or designated therefor by Grantor.

 

  4. Grantee shall, at its sole cost and expense, construct, operate and maintain the Facilities in accordance with applicable law.

 

  5. Except where caused by the willful misconduct or sole or gross negligence of Grantor or its agents or employees, Grantee agrees to defend, indemnify and hold harmless Grantor from all claims, demands and causes of action of any kind for bodily injury, death, or loss or damage of property of any person arising out of or resulting from the acts or omissions of Grantee, its contractors, agents, employees, or invitees in connection with Grantee’s Use of the Easement.

 

  6. Grantor reserves the right to use the Land for all purposes not inconsistent with the Easement, so long as such use does not interfere with Use of the Facilities. Grantor agrees not to change the grade over the Easement.

 

  7. Grantee shall have full responsibility, at its sole risk, cost and expense, to obtain in connection with the Use of the Facilities, and thereafter maintain during the term hereof, any and all necessary permits, including, without limitation, those permits required to cross any and all roads, railroads, canals and other private, public and quasi public rights of way with the Facilities.

 

  8. All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when delivered; (b) if mailed via the official governmental mail system, five (5) business days after mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (c) if mailed by an internationally-recognized overnight express mail service such as Federal Express, UPS, or DHL Worldwide, one (1) Business Day after deposit therewith prepaid; or (d) if by e-mail, one (1) business day after delivery with receipt confirmed. All notices, demands and requests to be sent to the parties shall be sent or made at the addresses set forth in the introductory paragraph of this Easement.

 

  9. The terms and conditions hereof shall be binding upon and shall inure to the benefit of the parties hereto, their respective successors and assigns.

 

  10. This Easement shall be construed in accordance with the laws of the State of Ohio, without giving effect to its principles of conflict of laws.

 

C-2


  11. This Easement may be executed in multiple counterparts, each of which shall constitute an original, and all of which, when taken together, shall constitute one instrument.

[Signatures begin next page.]

 

C-3


IN WITNESS WHEREOF, the parties have executed this Easement as of the date of the parties’ acknowledgment set forth below, to be effective as of the 14 th day of May, 2014.

 

GRANTOR:

 

TOLEDO REFINING COMPANY LLC , a Delaware limited liability company

By:

   

Name:

 

Title:

 

 

STATE OF

     

)

 
   

)

 

SS:

COUNTY OF

     

)

 

The foregoing instrument was acknowledged before me this 14 th day of May, 2014 by                      , the                      of Toledo Refining Company LLC, a Delaware limited liability company, on behalf of the company.

 

       
      Notary Public
My commission expires:            [SEAL]

 

 

S IGNATURE P AGE TO THE U TILITY E ASEMENT


GRANTEE:

 

PBF HOLDING COMPANY LLC , a Delaware limited liability company

By:

   

Name:

 

Title:

 

 

STATE OF

     

)

 
   

)

 

SS:

COUNTY OF

     

)

 

The foregoing instrument was acknowledged before me this 14 th day of May, 2014 by                      , the                      of PBF Holding Company LLC, a Delaware limited liability company, on behalf of the company.

 

       
      Notary Public
My commission expires:            [SEAL]

 

This instrument prepared by

and after recording return to:

    

GRANTEE :

PBF HOLDING COMPANY LLC , a Delaware limited liability company

      
      
            By:     
            Name:     
          Title:     

 

S IGNATURE P AGE TO THE A CCESS E ASEMENT


STATE OF OHIO

    §  
    §  

COUNTY OF LUCAS

      §  

This instrument was acknowledged before me on May 14, 2014, by                      , the                      of                      , a                                  , on behalf of said                      .

 

   
  Notary’s Signature
   
  (Name typed or printed)
  Commission Expires:    

 

S IGNATURE P AGE TO THE A CCESS E ASEMENT


EXHIBIT “A”

Assets


EXHIBIT “B”

Description of the Land


EXHIBIT “C”

Depiction of the Land


EXHIBIT D

FORM OF CERTIFICATE OF CONVEYANCE


CERTIFICATE OF CONVEYANCE

THIS CERTIFICATE OF CONVEYANCE is entered into as of [                      ], 2014 (this “ Certificate ”), by and between [                      ], a [                              ] (“ Transferor ”), and [                      ], a [                              ] (“ Transferee ”).

RECITALS

A. Transferee and Transferor are wholly-owned affiliates of each other and have (together with the other parties thereto) entered into that certain Contribution and Conveyance Agreement dated as of [                      ], 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “ Contribution Agreement ”), providing, subject to the terms and conditions set forth therein, for the transfer, assignment and delivery by Transferor to Transferee of all of Transferor’s right, title and interest in and to the assets and/or interests set forth on Schedule A hereto (the “ Assets and/or Interests ”).

B. The Parties desire to execute and deliver this Certificate for the purpose of effecting the transfer, assignment and delivery to Transferee of the Assets and/or Interests as contemplated pursuant to the Contribution Agreement.

NOW, THEREFORE, in consideration of the covenants and mutual agreements contained herein and in the Contribution Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Transferor and Transferee hereby agree as follows:

1. Definitions . Unless otherwise defined herein, each capitalized term used herein shall have the meaning assigned thereto in the Contribution Agreement.

2. Transfer of the Assets and/or Interests . Contingent upon the Closing, effective as of the Closing, Transferor hereby sells, transfers, assigns and delivers to Transferee all of Transferor’s right, title and interest in and to the Assets and/or Interests free and clear of all Liens, subject to or together with any easements as specified on Schedule A , and Transferee hereby acquires and accepts from Transferor such Assets and/or Interests.

TO HAVE AND TO HOLD, unto Transferee, its successors and assigns, the Assets and/or Interests, together with all and singular the rights and appurtenances thereto in anywise belonging, subject, however, to the terms and conditions stated in this Certificate and in the Contribution Agreement, forever.

3. Amendment and Modification; Waiver . Any provision of this Certificate may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each Party, or in the case of a waiver, by the Party against whom the waiver is to be effective.

4. No Third-Party Beneficiary . Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any Person, other than the Parties and their respective permitted successors and assigns (pursuant to the Contribution Agreement), any rights or remedies under or by reason of this Certificate.

 

D-1


5. GOVERNING LAW . THIS CERTIFICATE (AND ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS CERTIFICATE) SHALL BE GOVERNED BY THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF DELAWARE.

6. Contribution Agreement . Notwithstanding anything in this Certificate to the contrary, the sale, transfer, assignment and delivery effectuated hereby are subject in all respects to the terms and conditions of the Contribution Agreement and nothing in this Certificate, express or implied, is intended or shall be construed to expand or defeat, impair or limit in any way the rights, obligations, claims or remedies of Transferor or Transferee as set forth in the Contribution Agreement. In the event that any term or condition of this Agreement conflicts with any provision, term or condition of the Contribution Agreement, the provisions, terms and conditions of the Contribution Agreement shall prevail in all respects.

[signature page follows]

 

D-2


IN WITNESS WHEREOF, the undersigned have duly executed this Certificate of Conveyance on the date first set forth above.

 

TRANSFEROR:

 

[                    ]

By:    
Name:  
Title:  

 

TRANSFEREE:

 

[                    ]

By:    
Name:  
Title:  

 

S IGNATURE PAGE TO THE FORM OF CERTIFICATE OF CONVEYANCE


Schedule A

Assets and/or Interests


EXHIBIT E

DEED


   

Tax Parcel No.: 12-007.00-007

 

Prepared By/Return To:

Stephen M. Kessler, Esq.

Drinker Biddle & Reath LLP

222 Delaware Ave, Suite 1410

Wilmington, Delaware 19801

DEED

THIS DEED , made this 12 th day of May, 2014,

BETWEEN

DELAWARE CITY REFINING COMPANY LLC , a Delaware limited liability company, party of the first part,

AND

Its wholly-owned subsidiary DELAWARE CITY TERMINALING COMPANY LLC , a Delaware limited liability company, party of the second part,

WITNESSETH , that the said party of the first part, for and in consideration of the sum of TEN DOLLARS ($10.00), and other good and valuable consideration, lawful money of the United States of America, the receipt whereof is hereby acknowledged, hereby contributes, grants and conveys unto the said party of the second part it’s heirs and assigns, in fee simple.

ALL those certain lots, pieces or parcels of land with the improvements thereon, situate in New Castle, New Castle County and State of Delaware, as more particularly described on Exhibit A attached hereto.

BEING a portion of the same lands and premises which The Premcor Refining Group, Inc., by Deed dated June 1, 2010, and recorded in the Office of the Recorder of Deeds in and for New Castle County and the State of Delaware as Instrument Number 20100601-0026890, did grant and convey unto Delaware City Refining Company LLC, in fee.

SUBJECT, HOWEVER to, all recorded easements, agreements and/or restrictions to the extent the same are in full force and effect.

 

E-1


GRANTEES MAILING ADDRESS:

c/o PBF Holding Company LLC

1 Sylvan Way

Parsippany, NJ 07064

IN WITNESS WHEREOF, the said party of the first part has set hereunto set his hand and seal.

 

SEALED AND DELIVERED                     

IN THE PRESENCE OF:

    

 

DELAWARE CITY REFINING COMPANY LLC ,

a Delaware limited liability company

            (SEAL)
Witness      By: Jeffrey Dill, Senior Vice President   

 

STATE OF NEW JERSEY

    )  
   

)

 

SS:

COUNTY OF MORRIS

    )  

BE IT REMEMBERED, that on this 12 th day of May, 2014, personally came before me, the Subscriber, a Notarial Officer for the State and County aforesaid, Jeffrey Dill, Senior Vice President of Delaware City Refining Company LLC, known to me personally to be such and he acknowledged this Deed to be the act and deed of such company.

GIVEN under my Hand and Seal of Office, the day and year aforesaid.

 

    
  

Notary Public

Printed Name:

    

(SEAL)

   My commission expires:     

 

 

 

 

S IGNATURE P AGE TO THE D EED C ONVEYING D ELAWARE C ITY A SSETS


EXHIBIT A

ALL THAT CERTAIN tract, piece or parcel of land situate between the southwesterly side of School House Road and the northerly side of Norfolk Southern Railroad Company Reybold Industrial Track Right of Way, southeasterly of Delaware Route 1, Red Lion Hundred, New Castle County, Delaware, and being more particularly described as follows, to wit:

BEGINNING at a point, the southeasterly corner for other land now or formerly of Delaware City Refining Company LLC (Deed Record 20100601-0026890) on the northerly side of Norfolk Southern Railroad Company Reybold Industrial Track Right of Way, at 60 feet wide, said point being measured along the said northerly side of Norfolk Southern Railroad Company Reybold Industrial Track Right of Way from it’s intersection with the easterly side of Bear Corbitt Road, State Road 7, a variable width public road, the three (3) following described courses and distances:

 

  1. Easterly, by a curve to the right having a radius of 22,890.00 feet, an arc length of 1,612.09 feet to a point, said point being distant by a chord of North 86°37’43” East, 1,611.76 feet from the last described point;

 

  2. Easterly, by a curve to the left having a radius of 22,920.00 feet, an arc length of 728.92 feet to a point, said point being distant by a chord of North 83°41’59” East, 728.89 feet from the last described point; and

 

  3. North 82°44’10” East, 484.36 feet to the point of Beginning;

THENCE, from the said point of Beginning, along the said easterly line for other land now or formerly of Delaware City Refining Company LLC, North 00°00’25” West, 1,456.66 feet to a point on the southwesterly side of a 15 foot wide strip of land dedicated to the State of Delaware as part of School House Road (Deed Record 20130117-0003920);

THENCE along the said southwesterly side of a 15 foot wide strip of land dedicated to the State of Delaware, the three (3) following described courses and distances:

 

  1. South 73°53’09” East, 263.26 feet to a point of curvature;

 

  2. Southeasterly, by a curve to the right having a radius of 245.00 feet, an arc length of 162.74 feet to a point of tangency, said point being distant by a chord of South 54°51’25” East, 159.76 feet from the last described point; and

 

  3. South 35°49’40” East, 1,403.63 feet to a point on the said northerly side of Norfolk Southern Railroad Company Reybold Industrial Track Right of Way;


THENCE along the said northerly side of Norfolk Southern Railroad Company Reybold Industrial Track Right of Way, South 82°44’10” West, 1,214.75 feet to the point and place of Beginning.

Containing within said metes and bounds, 23.792 acres of land, being the same, more or less…

Exhibit 10.2

OMNIBUS AGREEMENT

among

PBF HOLDING COMPANY LLC,

PBF ENERGY COMPANY LLC,

PBF LOGISTICS GP LLC

and

PBF LOGISTICS LP


TABLE OF CONTENTS

 

ARTICLE I

DEFINITIONS

  

  

1.1  

Definitions

     1   

ARTICLE II

BUSINESS OPPORTUNITIES

  

  

2.1  

Restricted Activities

     4   
2.2  

Permitted Exceptions

     4   
2.3  

Procedures

     5   
2.4  

Scope of Prohibition

     6   
2.5  

Enforcement

     6   

ARTICLE III

CORPORATE SERVICES

  

  

3.1  

General

     6   

ARTICLE IV

CAPITAL AND OTHER EXPENDITURES

  

  

4.1  

Reimbursement of Operating, Maintenance, Capital and Other Expenditures

     8   
4.2  

Delaware City Expansion Project

     9   
4.3  

Taxes

     9   

ARTICLE V

RIGHT OF FIRST OFFER

  

  

5.1  

Right of First Offer to Purchase Certain Assets retained by the Sponsor Entities

     9   
5.2  

Procedures

     9   

ARTICLE VI

GRANT OF INTELLECTUAL PROPERTY LICENSE

  

  

6.1  

Grant of License

     12   
6.2  

Restrictions and Additional Agreements with Respect to License

     12   
6.3  

Covenants and Indemnification

     12   

ARTICLE VII

MISCELLANEOUS

  

  

7.1  

Choice of Law; Submission to Jurisdiction

     13   
7.2  

Arbitration Provision

     14   
7.3  

Notice

     14   


7.4  

Entire Agreement

     15   
7.5  

Termination of Agreement

     16   
7.6  

Amendment or Modification

     16   
7.7  

Assignment

     16   
7.8  

Counterparts

     16   
7.9  

Severability

     16   
7.10  

Further Assurances

     16   
7.11  

Rights of Limited Partners

     16   

SCHEDULES

 

Schedule 3.1(a)      General and Administrative Services
Schedule 5.1(a)      ROFO Assets
Schedule 6.1      PBF Logistics IP


OMNIBUS AGREEMENT

This OMNIBUS AGREEMENT (“ Agreement ”) is entered into on, and effective as of, the Closing Date (as defined herein) among PBF Holding Company LLC, a Delaware limited liability company (“ PBF Holding ”), PBF Energy Company LLC, a Delaware limited liability company (“ PBF Energy ”), PBF Logistics GP LLC, a Delaware limited liability company (the “ General Partner ”), and PBF Logistics LP, a Delaware limited partnership (the “ Partnership ”). The above?named entities are sometimes referred to in this Agreement each as a “ Party ” and collectively as the “ Parties.

RECITALS:

 

  1. The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article II, with respect to certain business opportunities in which the Sponsor Entities (as herein defined) will not engage for so long as any Sponsor Entity controls the General Partner of the Partnership.

 

  2. The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article III, with respect to the amount to be paid by the Partnership for the centralized corporate services to be performed by the General Partner and its Affiliates (as defined herein) for, and on behalf of, the Partnership Group.

 

  3. The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article IV, with respect to certain operating, maintenance, capital and other expenditures to be reimbursed by the General Partner and its Affiliates to the Partnership Group.

 

  4. The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article V, with respect to the Partnership Group’s right of first offer with respect to the ROFO Assets (as defined herein).

 

  5. The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article VI, with respect to the granting of the PBF Logistics IP to the Partnership.

In consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions . As used in this Agreement, the following terms shall have the respective meanings set forth below:

Administrative Fee ” is defined in Section 3.1(a).


Affiliate ” is defined in the Partnership Agreement.

Arbitrable Dispute ” means any and all disputes, controversies and other matters in question among the Parties arising under or in connection with this Agreement.

Assets ” means all ownership, leasehold or other interest in or right to use of terminal facilities and related equipment, real estate and other assets, or portions thereof, conveyed, contributed or otherwise transferred or intended to be conveyed, contributed or otherwise transferred pursuant to the Contribution Agreement to any member of the Partnership Group, or owned by, leased by or necessary for the operation of the business, properties or assets of any member of the Partnership Group, prior to or as of the Closing Date.

Board of Directors ” means for any Person the board of directors or other governing body of such Person.

Claimant ” is defined in Section 7.2.

Closing Date ” means May 14, 2014.

Contribution Agreement ” means that certain Contribution, Conveyance and Assumption Agreement, dated as of the Closing Date, among the General Partner, the Partnership, PBF Energy, PBF Holding and the other entities named therein, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

control ” (including with correlative meaning, the term “controlled by”) means, as used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of a majority of the voting securities, by contract or otherwise.

Exchange Act ” means the Securities Exchange Act of 1934, as amended.

Governmental Authority ” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

HSR Act ” means the Hart?Scott?Rodino Antitrust Improvements Act of 1976, as amended.

Licensees ” is defined in Section 6.1.

Limited Partner ” is defined in the Partnership Agreement.

Losses ” means any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent.

 

2


Offer ” is defined in Section 2.3.

Offer Evaluation Period ” is defined in Section 2.3.

Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of PBF Logistics LP, dated as of the Closing Date, as such agreement is in effect on the Closing Date, to which reference is hereby made for all purposes of this Agreement.

Partnership Change of Control ” means the Sponsor Entities cease to control the general partner of the Partnership.

Partnership Group ” means the General Partner, the Partnership and all of the Partnership’s Subsidiaries, treated as a single consolidated entity.

Partnership Interest ” is defined in the Partnership Agreement.

Party ” and “ Parties ” are defined in the introduction to this Agreement.

PBF Logistics IP ” means the names and trademarks set forth on Schedule 6.1.

PBF Name ” is defined in Section 6.2(b).

Person ” means any individual, corporation, partnership, limited 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.

Proposed Transaction ” is defined in Section 5.2(a).

Producer Price Index ” shall have the meaning ascribed to such term by the United States Bureau of Labor Statistics.

Respondent ” is defined in Section 7.2.

Retained Assets ” means all assets, or portions thereof, owned or held by the Sponsor Entities as of the Closing Date that were not directly or indirectly conveyed, contributed or otherwise transferred to the Partnership Group pursuant to the Contribution Agreement.

ROFO Assets ” means (1) any asset, group of assets or business acquired or constructed by a Sponsor Entity pursuant to Section 2.2(d) or Section 2.2(e) and (2) the assets listed on Schedule 5.1(a) to this Agreement.

ROFO Governmental Approval Deadline ” is defined in Section 5.2(c).

ROFO Notice ” is defined in Section 5.2(a).

 

3


ROFO Period ” is defined in Section 5.1(a).

ROFO Response ” is defined in Section 5.2(a).

Sponsor Entities ” means PBF Energy, and any Person controlled, directly or indirectly, by PBF Energy, other than the General Partner or a member of the Partnership Group; and “ Sponsor Entity ” means any of the PBF Entities.

Subsidiary ” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if such Person, directly or by one or more Subsidiaries of such Person, or a combination thereof, controls such partnership on the date of determination, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors, managers or other governing body of such Person.

Trademark ” means the trademark set forth on Schedule 6.1.

Transfer ” means to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of, whether in one or a series of transactions; provided that a collateral assignment in connection with any debt financing shall not be deemed to be a Transfer.

Voting Securities ” of a Person means securities of any class of such Person entitling the holders thereof to vote in the election of, or to appoint, members of the board of directors or other similar governing body of the Person; provided that, if such Person is a limited partnership, Voting Securities of such Person shall be the general partner interest in such Person.

ARTICLE II

BUSINESS OPPORTUNITIES

2.1 Restricted Activities . Except as permitted by Section 2.2, the Sponsor Entities shall be prohibited from owning, operating, engaging in, acquiring, or investing in any business that owns or operates crude oil or refined products pipelines, terminals or storage facilities in the United States.

2.2 Permitted Exceptions . Notwithstanding Section 2.1, the Sponsor Entities may engage in the following activities under the following circumstances:

(a) the ownership, operation, expansion, replacement, return to service, repair, sale, divestment, merger with another entity, suspension, operation or shutdown of any of the Retained Assets;

 

4


(b) the acquisition, construction, ownership or operation of any assets that are within, substantially dedicated to, or an integral part of any refinery, commercial or marketing activity (except as identified in another subsection of this Section 2.2) owned, acquired or constructed by the Sponsor Entities;

(c) the acquisition, construction, ownership or operation of any asset, group of assets or business that has a fair market value (as determined in good faith by the Board of Directors of the Sponsor Entity that will own such asset, group of assets or business) of less than $25 million;

(d) the acquisition, construction, ownership or operation of any asset, group of assets or business that has a fair market value (as determined in good faith by the Board of Directors of the Sponsor Entity that will own such asset, group of assets or business) of $25 million or more if the Partnership has been offered the opportunity to purchase such asset, group of assets or business in accordance with the procedures set forth in Section 2.3 and the Partnership has elected not to purchase such asset, group of assets or business;

(e) the acquisition, construction, ownership or operation of any asset, group of assets or business that has a fair market value (as determined in good faith by the Board of Directors of the Sponsor Entity that will own such asset, group of assets or business) of $25 million or more but where such crude oil or refined products pipelines, terminals or storage facilities comprise less than half of the fair market value (as determined in good faith by the Board of Directors of the Sponsor Entity that will own such asset, group of assets or business) of the total package of assets and/or businesses acquired or constructed by the Sponsor Entities and its Subsidiaries if the Partnership has been offered the opportunity to purchase the crude oil or refined products pipelines, terminals or storage facility assets and/or businesses in accordance with the procedures set forth in Section 2.3 and the Partnership has elected not to purchase such asset, group of assets and/or businesses;

(f) the purchase and ownership of a non-controlling interest in any publicly traded entity;

(g) the ownership of equity interests in the General Partner and the Partnership Group;

(h) engaging with any crude oil or refined products pipelines, terminals or storage facilities in the capacity of a customer of such pipelines, terminals or storage facilities; and

(i) the acquisition, ownership or operation of any asset, group of assets or business that would be unlawful or contrary to an existing contractual arrangement of the Partnership Group for the Partnership Group to own or operate, for as long as it is unlawful or contrary to an existing contractual arrangement of the Partnership Group for the Partnership Group to own or operate such asset, group of assets or business.

 

5


2.3 Procedures .

(a) If any Sponsor Entity acquires or constructs any crude oil or refined products pipelines, terminals or storage facilities in the United States, or acquires an interest in a business that owns such assets pursuant to Section 2.2(d) or Section 2.2(e), then (A) upon the consummation of such acquisition or completion of such construction, Schedule 5.1(a) shall automatically be amended to include such asset, group of assets and/or businesses as ROFO Assets subject to Article V and (B) such Sponsor Entity may, at any time after the consummation of the acquisition or the completion of construction by the Sponsor Entity, offer in writing to the Partnership Group the opportunity to purchase such asset, group of assets or business (the “ Offer ”). The Offer shall set forth the terms relating to the purchase of the asset, group of assets or business and, if the Sponsor Entity desires to utilize the asset or group of assets, the Offer will also include the terms on which the Partnership Group will provide services to the Sponsor Entity. As soon as practicable, but in any event within 90 days after receipt by the General Partner of such written notification (the “ Offer Evaluation Period ”), the General Partner shall notify the Sponsor Entity in writing that either (i) the General Partner has elected not to cause a member of the Partnership Group to purchase the asset, group of assets or business, or (ii) the General Partner has elected to cause a member of the Partnership Group to purchase such asset, group of assets or business, in which event the Parties will use their reasonable bests efforts to consummate the transaction within six months.

(b) Nothing herein shall impede or otherwise restrict the foreclosure, sale, disposition or other exercise of rights or remedies by or on behalf of any secured lender of any asset or interest in any business subject to a security interest in favor of such lender or any agent for or on behalf of such lender under any credit arrangement now or hereafter in effect (it being understood and agreed that no secured lender to the Sponsor Entities shall have any obligation to make an Offer or to sell or cause to be sold any asset or interest in any business to any member of the Partnership Group).

2.4 Scope of Prohibition . Except as provided in this Article II and the Partnership Agreement, the Sponsor Entities shall be free to engage in any business activity, including those that may be in direct competition with any member of the Partnership Group.

2.5 Enforcement . The Sponsor Entities agree and acknowledge that the Partnership Group does not have an adequate remedy at law for the breach by the Sponsor and its Subsidiaries (other than the Partnership Group) of the covenants and agreements set forth in this Article II, and that any breach by the Sponsor and its Subsidiaries (other than the Partnership Group) of the covenants and agreements set forth in this Article II may result in irreparable injury to the Partnership Group. The Sponsor and its Subsidiaries (other than the Partnership Group) further agree and acknowledge that any member of the Partnership Group may, in addition to the other remedies which may be available to the Partnership Group, file a suit in equity to enjoin the Sponsor and its Subsidiaries (other than the Partnership Group) from such breach, and consent to the Partnership Group seeking the issuance of injunctive relief under this Agreement.

 

6


ARTICLE III

CORPORATE SERVICES

3.1 General .

(a) PBF Energy agrees to provide, and agrees to cause its Affiliates to provide, on behalf of the General Partner, for the Partnership Group’s benefit, all of the centralized corporate services that PBF Energy and its Affiliates have traditionally provided in connection with the Assets including, without limitation, the general and administrative services listed on Schedule 3.1(a) to this Agreement. As consideration for such services, the Partnership will pay PBF Energy an administrative fee (the “ Administrative Fee ”) of $2.3 million per year, payable in equal monthly installments on or before the tenth business day of each month, commencing in the first month following the Closing Date. The Administrative Fee for the 2014 fiscal year will be prorated based on the number of days from the Closing Date to December 31, 2014. PBF Energy may increase or decrease the Administrative Fee on each anniversary of the Closing Date, commencing on the second anniversary date of the Closing Date, by a percentage equal to the change in the Producer Price Index over the previous 12 calendar months or to reflect any increase in the cost of providing centralized corporate services to the Partnership Group due to changes in any law, rule or regulation applicable to PBF Energy or its Affiliates or the Partnership Group, including any interpretation of such laws, rules or regulations, including the rules of any exchange upon which the Partnership Group’s debt or equity is listed or traded, or to reflect any increase in the scope and extent of the services provided to the Partnership Group, provided , however , that the Administrative Fee shall not be decreased below the initial fee provided in this Agreement unless the type or extent of such services materially decreases, subject to the provision in Section 3.1(b) whereby the Parties may mutually agree to reduce the Administrative Fee. The General Partner may agree on behalf of the Partnership to increases in the Administrative Fee in connection with expansions of the operations of the Partnership Group through the acquisition or construction of new assets or businesses.

(b) The Partnership shall have the right to terminate any or all of the services listed on Schedule 3.1(a) to this Agreement, without penalty, upon thirty (30) days prior written notice to PBF Energy. In addition, at the end of each calendar year, the Partnership will have the right to submit to PBF Energy a proposal to reduce the amount of the Administrative Fee for the upcoming year if the Partnership believes, in good faith, that the centralized corporate services performed by PBF Energy and its Affiliates for the benefit of the Partnership Group for the upcoming year will not justify payment of the full Administrative Fee for such year. If the Partnership submits such a proposal to PBF Energy, PBF Energy agrees that it will negotiate in good faith with the Partnership to determine if the Administrative Fee for the upcoming year should be reduced and, if so, the amount of such reduction. If the Parties agree that the Administrative Fee for that year should be reduced, then PBF Energy shall thereafter charge such reduced amount. If the Parties cannot agree to the amount of a reduction in the Administrative Fee for that year, then the reduction amount shall become an Arbitrable Dispute and governed in accordance with Section 7.2, provided, however , that the Administrative Fee shall not be decreased below the initial fee provided in this Agreement unless the type or extent of such services materially decreases.

 

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(c) The Partnership shall reimburse PBF Energy and its Affiliates for all other direct or allocated costs and expenses incurred by PBF Energy and its Affiliates on behalf of the Partnership Group including, but not limited to:

(i) salaries of employees of PBF Energy and its Affiliates who devote more than 50% of their business time to the business and affairs of the Partnership Group, to the extent, but only to the extent, such employees perform services for the Partnership Group, provided that for employees that do not devote substantially all of their business time to the Partnership Group, such expenses shall be based on the annual weighted average of time spent and number of employees devoting services to the Partnership Group;

(ii) the cost of employee benefits relating to employees of PBF Energy and its Affiliates who devote more than 50% of their business time to the business and affairs of the Partnership Group, including 401(k), pension, bonuses and health insurance benefits, to the extent, but only to the extent, such employees perform services for the Partnership Group, provided that for employees that do not devote substantially all of their business time to the Partnership Group, such expenses shall be based on the annual weighted average of time spent and number of employees devoting their services to the Partnership Group;

(iii) any expenses incurred or payments made by PBF Energy and its Affiliates for insurance coverage with respect to the Assets or the business of the Partnership Group;

(iv) all expenses and expenditures incurred by PBF Energy and its Affiliates, if any, as a result of the Partnership becoming and continuing as a publicly traded entity, including, but not limited to, costs associated with annual and quarterly reports, independent auditor fees, partnership governance and compliance, registrar and transfer agent fees, tax return and Schedule K-1 preparation and distribution, legal fees and independent director compensation;

(v) all sales, use, excise, value added or similar taxes, if any, that may be applicable from time to time with respect to the services provided by PBF Energy and its Affiliates to the Partnership Group pursuant to Section 3.1(a); and

(vi) all costs for outside services that are incurred for the Partnership Group’s benefit.

Such reimbursements shall be made on or before the tenth business day of the month following the month such costs and expenses are incurred, other than reimbursements solely related to bonuses for employees of the Sponsor Entities, which shall be reimbursed on or prior to the last business day of the month that such bonuses are paid. For the avoidance of doubt, the costs and expenses set forth in Section 3.1(c) shall be paid by the Partnership Group in addition to, and not as a part of or included in, the Administrative Fee.

(d) The Sponsor Entities makes no representations or warranties of any kind, express or implied, with respect to the services to be provided hereunder, except that the services shall be provided in a reasonably timely manner by personnel that the Sponsor Entities deem to be competent and qualified to perform such services.

 

8


ARTICLE IV

CAPITAL AND OTHER EXPENDITURES

4.1 Reimbursement of Operating, Maintenance, Capital and Other Expenditures . For five years following the Closing Date, PBF Energy will reimburse the Partnership Group on a dollar-for-dollar basis, without duplication, for expenses (net of insurance recoveries, if any) incurred prior to the fifth anniversary of the Closing Date by the Partnership Group for the repair of any condition caused by the failure of any Asset to operate in substantially the same manner and condition as such asset was operating as of the Closing Date or any clean up related thereto; provided, however , that PBF Energy shall not be required to reimburse the Partnership Group for any expenses in excess of $20,000,000 per event.

4.2 Delaware City Expansion Project . The Partnership will be bear all costs and expenses associated with the expansion of the light crude rail unloading facility from the Closing Date through completion of the project.

4.3 Taxes . The Sponsor Entities will reimburse the Partnership for all taxes that the Partnership incurs in connection with this Agreement unless prohibited by applicable law.

ARTICLE V

RIGHT OF FIRST OFFER

5.1 Right of First Offer to Purchase Certain Assets retained by the Sponsor Entities .

(a) The Sponsor Entities hereby grant to the Partnership Group a right of first offer for a period of 10 years from the Closing Date (the “ ROFO Period ”) on any ROFO Asset to the extent that the owner of such ROFO Asset proposes to Transfer any ROFO Asset (other than (1) to an Affiliate who agrees in writing that such ROFO Asset remains subject to the provisions of this Article V and such Affiliate assumes the obligations under this Article V with respect to such ROFO Asset, (2) in connection with a Transfer by the Sponsor Entities of all or substantially all of the refinery with respect to which such ROFO Asset is within, substantially dedicated to or an integral part of or (3) in connection with the foreclosure on such ROFO Asset by any lender under any credit arrangements of the Sponsor Entities in effect on the Closing Date) or enter into any agreement to do any of the foregoing during the ROFO Period.

(b) The Parties acknowledge that all potential Transfers of ROFO Assets pursuant to this Article V are subject to obtaining any and all required written consents of Governmental Authorities and other third parties and to the terms of all existing agreements in respect of the ROFO Assets; provided, however , that the Sponsor Entities represents and warrants that, to its knowledge after reasonable investigation, there are no terms in such agreements that would materially impair the rights granted to the Partnership Group pursuant to this Article V with respect to any ROFO Asset.

 

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5.2 Procedures .

(a) In the event the owner of any ROFO Asset proposes to Transfer a ROFO Asset (other than as permitted by Section 5.1(a)(1), (2) or (3)) or enter into any agreement to do so during the ROFO Period (a “ Proposed Transaction ”), the owner of such ROFO Asset shall, prior to entering into any such Proposed Transaction, first give notice in writing to the Partnership (the “ ROFO Notice ”) of its intention to enter into such Proposed Transaction. The ROFO Notice shall include any material terms, conditions and details as would be necessary for the Partnership Group to make a responsive offer to enter into the Proposed Transaction with the owner of the ROFO Asset, which terms, conditions and details shall at a minimum include any terms, condition or details that the owner of the ROFO Asset Owner would propose to provide to non?Affiliates in connection with the Proposed Transaction. The Partnership Group shall have 90 days following receipt of the ROFO Notice to propose an offer to enter into the Proposed Transaction with the owner of the ROFO Asset (the “ ROFO Response ”). The ROFO Response shall set forth the terms and conditions (including, without limitation, the purchase price the Partnership Group proposes to pay for the ROFO Asset and the other material terms of the purchase including, if requested by the owner of the ROFO Asset, the terms on which the Partnership Group will provide services to the Sponsor Entities to enable the Sponsor Entities to utilize the ROFO Asset) pursuant to which the Partnership Group would be willing to enter into a binding agreement for the Proposed Transaction. If no ROFO Response is delivered by the Partnership Group within such 90?day period, then the Partnership Group shall be deemed to have waived its right of first offer with respect to such ROFO Asset.

(b) Unless the ROFO Response is rejected pursuant to written notice delivered by the owner of the ROFO Asset to the Partnership Group within 90 days of the delivery of the ROFO Response, such ROFO Response shall be deemed to have been accepted by the owner of the ROFO Asset and the owner of the ROFO Asset shall enter into an agreement with the Partnership Group providing for the consummation of the Proposed Transaction upon the terms set forth in the ROFO Response and, if applicable, the Partnership Group will enter into an agreement with the Sponsor Entities setting forth the terms on which the Partnership Group will provide services to the Sponsor Entities to enable the Sponsor Entities to utilize the ROFO Asset. Unless otherwise agreed between the owner of the ROFO Asset and the Partnership Group, the terms of the purchase and sale agreement will include the following:

(i) the Partnership Group will agree to deliver the purchase price (in cash, Partnership Interests, an interest?bearing promissory note, or any combination thereof agreed to by the owner of the ROFO Asset);

(ii) the owner of the ROFO Asset will represent that it has good and marketable title to the ROFO Asset that is sufficient to operate the ROFO Asset in accordance with its historical use, subject to all recorded matters and all physical

 

10


conditions in existence on the closing date for the purchase of the applicable ROFO Asset, plus any other such matters as the Partnership Group may approve. If the Partnership Group desires to obtain any title insurance with respect to the ROFO Asset, the full cost and expense of obtaining the same (including but not limited to the cost of title examination, document duplication and policy premium) shall be borne by the Partnership Group;

(iii) the owner of the ROFO Asset will grant to the Partnership Group the right, exercisable at the Partnership Group’s risk and expense prior to the delivery of the ROFO Response, to make such surveys, tests and inspections of the ROFO Asset as the Partnership Group may deem desirable, so long as such surveys, tests or inspections do not damage the ROFO Asset or interfere with the activities of the owner of the ROFO Asset, and any invasive or destructive testing shall be subject to the reasonable approval of the owner of the ROFO Asset;

(iv) the Partnership Group will have the right to terminate its obligation to purchase the ROFO Asset under this Article V if the results of any searches under Section 5.2(b)(ii) or (iii) above are, in the reasonable opinion of the Partnership Group, unsatisfactory;

(v) the closing date for the purchase of the ROFO Asset shall occur no later than 180 days following receipt by the owner of the ROFO Asset of the ROFO Response pursuant to Section 5.2(a) unless otherwise agreed to by the Parties;

(vi) the owner of the ROFO Asset and the Partnership Group shall use commercially reasonable efforts to do or cause to be done all things that may be reasonably necessary or advisable to effectuate the consummation of any transactions contemplated by this Section 5.2(b), including causing its respective Affiliates to execute, deliver and perform all documents, notices, amendments, certificates, instruments and consents required in connection therewith; and

(vii) neither the owner of the ROFO Asset nor the Partnership Group shall have any obligation to sell or buy the ROFO Assets if any of the consents referred to in Section 5.1(b) has not been obtained.

(c) The Partnership Group and the owner of the ROFO Asset shall cooperate in good faith in obtaining all necessary governmental and other third party approvals, waivers and consents required for the closing. Any such closing shall be delayed, to the extent required, until the third business day following the expiration of any required waiting periods under the HSR Act; provided, however , that such delay shall not exceed 60 days following the 180 days referred to in Section 5.2(b)(v) (the “ ROFO Governmental Approval Deadline ”) and, if governmental approvals and waiting periods shall not have been obtained or expired, as the case may be, by such ROFO Governmental Approval Deadline, then the owner of the ROFO Asset shall be free to enter into a Proposed Transaction with any third party.

(d) If the Partnership Group has not timely delivered a ROFO Response as specified above with respect to a Proposed Transaction that is subject to a ROFO Notice, the

 

11


owner of the ROFO Asset shall be free to enter into a Proposed Transaction with any third party on terms and conditions no more favorable to such third party than those set forth in the ROFO Notice. If a ROFO Response with respect to such Proposed Transaction is rejected by the owner of the ROFO Asset, the owner of the ROFO Asset shall be free to enter into a Proposed Transaction with any third party (i) on terms and conditions (excluding those relating to price) that are not more favorable in the aggregate to such third party than those proposed in respect of the Partnership Group in the ROFO Response and (ii) at a price equal to no less than 110% of the price offered by the Partnership Group in the ROFO Response to the owner of the ROFO Asset.

(e) If a Proposed Transaction with a third party is not consummated as provided in Section 5.2 within one year of, as applicable, the Partnership Group’s failure to timely deliver a ROFO Response with respect to such Proposed Transaction that is subject to a ROFO Notice, the rejection by the owner of the ROFO Asset of a ROFO Response with respect to such Proposed Transaction or the ROFO Governmental Approval Deadline, then, in each case, the owner of the ROFO Asset may not Transfer any ROFO Assets described in such ROFO Notice without complying again with the provisions of this Article V, if and to the extent then applicable.

ARTICLE VI

GRANT OF INTELLECTUAL PROPERTY LICENSE

6.1 Grant of License . PBF Holding hereby grants the Partnership Group and any future subsidiaries of the Partnership (collectively, the “ Licensees ”), and the Licensees hereby accept, a royalty-free, fully paid, nonexclusive and nontransferable right and license to use the PBF Logistics IP. Except for such license, all other rights in the PBF Logistics IP are hereby reserved to PBF Holding. The Licensees shall not grant any sublicenses or assign, delegate or otherwise transfer their rights or obligations hereunder or any interest herein (including any assignment or transfer occurring of law) without the prior written consent of PBF Holding.

6.2 Restrictions and Additional Agreements with Respect to License .

(a) PBF Holding and its other licensees shall have the right to use the PBF Logistics IP simultaneously with the use of the PBF Logistics IP by Licensees. PBF Holding does not warrant or represent that Licensees will have the sole and exclusive right to use the PBF Logistics IP. Other than as set forth in Section 6.3 herein, PBF Holding is not obligated to indemnify or reimburse Licensees for any expenses by Licensees in connection with Licensees’ use of the PBF Logistics IP.

(b) Licensees’ license to use the PBF Logistics IP shall terminate 120 days after receipt by the General Partner, on behalf of the Licensees, of written notice of termination from the Sponsor Entities following a Partnership Change of Control. Licensees shall not thereafter use or otherwise exploit the PBF Logistics IP and shall not use any name incorporating the “PBF” name or any derivation thereof that would reasonably be expected to be confused therewith (the “ PBF Name ”), or any other trade names, domain name, trade dress, trademark or service mark confusingly similar thereto, and each Licensee shall promptly assign and transfer its rights in any ownership of the trade names incorporating the PBF Name to PBF Holding and each Licensee shall adopt a new trade name that does not use any PBF Name.

 

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6.3 Covenants and Indemnification .

(a) The Partnership agrees, at the request and expense of the Sponsor Entities, to use commercially reasonable efforts to cooperate with the Sponsor Entities in the defense and conservation of the PBF Logistics IP as requested by the Sponsor Entities.

(b) The Sponsor Entities agree, at the request and expense of the Partnership, to use commercially reasonable efforts to cooperate with the Partnership in the defense and conservation of the PBF Logistics IP as requested by the Partnership.

(c) The Sponsor Entities agrees to use commercially reasonable efforts to cooperate with the Partnership in maintaining the Trademark in due force and duly registered.

(d) The Partnership agrees, and agrees to cause the other members of the Partnership Group, to use the PBF Logistics IP in accordance with such quality standards established by the Sponsor Entities and communicated to the Partnership from time to time.

(e) The Partnership agrees, and agrees to cause the other members of the Partnership Group, to use best efforts to act and operate in a manner consistent with good business ethics, and in a manner that will not reflect poorly on the goodwill and reputation of the Sponsor Entities and the PBF Logistics IP. The Partnership agrees, and agrees to cause the other members of the Partnership Group, to at all times refrain from engaging in any illegal, unethical, unfair or deceptive practices, whether with respect to the PBF Logistics IP or otherwise

(f) The Sponsor Entities shall, jointly and severally, defend, indemnify, and hold harmless the Partnership from and against any Losses suffered or incurred by the Partnership arising from (i) claims or causes of action brought by any third party alleging that the Partnership’s use of the PBF Logistics IP as permitted in this Agreement violates any law, statute or rule, or infringes, dilutes, misappropriates or otherwise violates the intellectual property rights of such third party, and (ii) invalidity or unenforceability of any right with respect to the PBF Logistics IP.

ARTICLE VII

MISCELLANEOUS

7.1 Choice of Law; Submission to Jurisdiction . This Agreement shall be subject to and governed by the laws of the State of Delaware. The Parties agree to the venue and jurisdiction of the federal or state courts located in the State of Delaware for the adjudication of all disputes arising out of this Agreement.

 

13


7.2 Arbitration Provision . Any and all Arbitrable Disputes shall be resolved through the use of binding arbitration using, in the case of an Arbitrable Dispute involving a dispute of an amount equal to or greater than $1,000,000, three arbitrators, and in the case of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, one arbitrator, in each case in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Section 7.2 and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Section 7.2 will control the rights and obligations of the Parties. Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or the time period allowed by the applicable statute of limitations. Arbitration may be initiated by a Party (“ Claimant ”) serving written notice on the other Party (“ Respondent ”) that Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. Respondent shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If Respondent fails for any reason to name an arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed, and, in the case of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, such third arbitrator shall act as the sole arbitrator, and the sole role of the first two arbitrators shall be to appoint such third arbitrator. Claimant will pay the compensation and expenses of the arbitrator named by or for it, and Respondent will pay the compensation and expenses of the arbitrator named by or for it. The costs of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. Claimant and Respondent will each pay one-half of the compensation and expenses of the third arbitrator. All arbitrators must (a) be neutral parties who have never been officers, directors or employees of the Sponsor Entities, the Partnership Group or any of their Affiliates and (b) have not less than seven (7) years’ experience in the energy industry. The hearing will be conducted in the State of Delaware or the Philadelphia Metropolitan area and commence within thirty (30) days after the selection of the third arbitrator. The Sponsor Entities, the Partnership Group and the arbitrators shall proceed diligently and in good faith in order that the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators will be binding on and non-appealable by the Parties hereto.

7.3 Notice . All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when delivered; (b) if mailed via the official governmental mail system, five (5) business days after mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (c) if mailed by an internationally-recognized overnight express mail service such as Federal Express, UPS, or DHL Worldwide, one (1) Business Day after deposit therewith prepaid; or (d) if by e-mail, one (1) business day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows:

 

14


If to PBF Holding:

PBF Holding Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jeffrey Dill, Esq., General Counsel

Telecopy No: ( 973) 455-7500

Email: jeffrey.dill@pbfenergy.com

If to PBF Energy:

PBF Energy Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jeffrey Dill, Esq., General Counsel

Telecopy No: ( 973) 455-7500

Email: jeffrey.dill@pbfenergy.com

If to the Partnership Group:

PBF Logistics GP LLC

c/o PBF Logistics GP LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jim Fedena, Senior VP, Logistics

Telecopy No: ( 973) 455-7500

Email: jim.fedena@pbfenergy.com

with a copy, which shall not constitute notice, to:

PBF Logistics LP

c/o PBF Logistics GP LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Matt Lucey, Executive Vice President

Telecopy No: ( 973) 455-7500

Email: matt.lucey@pbfenergy.com

or to such other address or to such other person as either Party will have last designated by notice to the other Party.

7.4 Entire Agreement . This Agreement constitutes the entire agreement of the Parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein.

 

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7.5 Termination of Agreement . This Agreement may be terminated by the Sponsor Entities or the Partnership Group upon a Partnership Change of Control. For the avoidance of doubt, PBF Energy’s reimbursement obligations pursuant to Section 4.1, the Partnership’s obligations pursuant to Section 4.2 and the Parties’ rights and obligations pursuant to Article VI shall survive the termination of this Agreement in accordance with their respective terms.

7.6 Amendment or Modification . This Agreement may be amended or modified from time to time only by the written agreement of all the Parties hereto. Each such instrument shall be reduced to writing and shall be designated on its face an “Amendment” or an “Addendum” to this Agreement.

7.7 Assignment . No Party shall have the right to assign its rights or obligations under this Agreement without the consent of the other Parties hereto; provided, however, that the Partnership may make a collateral assignment of this Agreement solely to secure financing for the Partnership Group.

7.8 Counterparts . This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile transmission or in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart hereof.

7.9 Severability . If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.

7.10 Further Assurances . In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

7.11 Rights of Limited Partners . The provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no Limited Partner of the Partnership shall have the right, separate and apart from the Partnership, to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement.

 

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement on the date first set forth above.

 

PBF HOLDING COMPANY LLC
By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

PBF ENERGY COMPANY LLC
By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

PBF LOGISTICS GP LLC
By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

PBF LOGISTICS LP

By: PBF Logistics GP LLC, its general partner

By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

S IGNATURE P AGE TO THE O MNIBUS A GREEMENT


Schedule 3.1(a)

General and Administrative Services

 

(1) Executive management services of employees of PBF Energy and its Affiliates who devote less than 50% of their business time to the business and affairs of the Partnership Group, including PBF Energy equity-based compensation expense

 

(2) Financial and administrative services (including, but not limited to, treasury and accounting, and other administrative functions)

 

(3) Information technology services

 

(4) Legal services

 

(5) Health, safety and environmental services

 

(6) Human resources services

 

(7) Insurance administration

 

(8) Public relations/Government relations

 

Schedule 3.1(a)-1


Schedule 5.1(a)

ROFO Assets

 

Asset    Owner
Delaware City Refinery Heavy Crude Oil Terminal . Heavy crude oil terminal and unloading facility located at the Delaware City Refinery.    Delaware City Refining Company LLC
Delaware City Marine Terminal. Marine terminal located on the Delaware River for receipt of crude oil, feedstocks and products, and shipment of crude oil, feedstocks and products, by the Delaware City Refinery via ship and barge at docks located on the Delaware River.    Delaware City Refining Company LLC
Paulsboro Marine Terminal. Marine terminal located on the Delaware River for receipt of crude oil, feedstocks and products, and shipment of crude oil, feedstocks and products, by the Paulsboro Refinery.    Paulsboro Refining Company LLC
Delaware City Products Pipeline . The 23.4 mile, 16-inch interstate petroleum products pipeline originating at the Delaware City Refinery with terminus at Sunoco Logistics’ Twin Oaks terminal.    Delaware City Refining Company LLC
Delaware City Truck Rack . 10-bay, 76,000 barrel per day capacity truck loading rack located adjacent to the Delaware City Refinery.    Delaware City Refining Company LLC
Delaware City LPG Rack . LPG rack consisting of a 6 rail loading and unloading LPG rack located adjacent to the Delaware City Refinery.    Delaware City Refining Company LLC
Paulsboro Rail Terminal: Railcar terminal at the Paulsboro refinery used to transport refined products such as lube oils to various locations throughout the Northeast and other regions in the United States.    Paulsboro Refining Company LLC
Rail Cars. Owned or leased general purpose and coiled and insulated rail cars.    PBF Holding Company LLC
Delaware City Storage Facility. Storage facility with approximately 10.0 million barrels of total storage capacity.    Delaware City Refining Company LLC
Paulsboro Storage Facility. Storage facility with approximately 7.5 million barrels of total storage capacity.    Paulsboro Refining Company LLC
Toledo Storage Facility. Storage facility consisting of 29 tanks for storing crude oil, refined products and intermediates, with an aggregate storage capacity of approximately 3.4 million barrels.    Toledo Refining Company LLC
Toledo LPG Truck Rack. LPG Truck Rack at the Toledo refinery consisting of 27 propane storage bullets and a truck loading facility with a throughput capacity of approximately 5,000 bpd.    Toledo Refining Company LLC

 

Schedule 5.1(a)-1


Schedule 6.1

PBF Logistics IP

PBF ENERGY PARTNERS LP TRADEMARK INVENTORY

 

Trademark

  

Country

  

Application No.

  

Filing Date

  

Registration No.

  

Registration Date

  

Renewal Date

PBF ENERGY

   United States of America    85/502529    12/22/2011    4240811    11/13/2012    11/13/2022

PBF ENERGY (Stylized in Circle Design

   Canada    1408750    8/27/2008         

PBF ENERGY (Stylized in Circle Design

   United States of America    77/981705    4/16/2008    3971638    5/31/2011    5/31/2021

PBF ENERGY (Stylized in Circle Design

   United States of America    77/450012    4/16/2008    4115169    3/20/2012    3/20/2022

 

Schedule 6.1-1

Exhibit 10.3

EXECUTION VERSION

 

 

 

OPERATION AND MANAGEMENT

SERVICES AND SECONDMENT AGREEMENT

 

 

 


TABLE OF CONTENTS

 

Article 1

    

Definitions and Construction.

     1   

Article 2

    

Term.

     7   

Article 3

    

Personnel, Personnel Duties and Company Services.

     9   

Article 4

    

Self-Provided Services and Shared Items.

     12   

Article 5

    

Pricing, Billing and Reimbursement.

     12   

Article 6

    

Fee Adjustments.

     14   

Article 7

    

Access and Audit Rights.

     14   

Article 8

    

Additional Covenants.

     15   

Article 9

    

Representations.

     16   

Article 10

    

Insurance.

     16   

Article 11

    

Force Majeure.

     17   

Article 12

    

Services Council.

     17   

Article 13

    

Event of Default: Remedies Upon Event of Default.

     17   

Article 14

    

Indemnification.

     18   

Article 15

    

Limitation on Damages.

     20   

Article 16

    

Confidentiality.

     20   

Article 17

    

Choice of Law.

     21   

Article 18

    

Assignment.

     22   

Article 19

    

Notices.

     22   

Article 20

    

No Waiver; Cumulative Remedies.

     23   

Article 21

    

Nature of Transaction, Relationship of Parties and Regulatory Status.

     23   

Article 22

    

Dispute Resolution.

     24   

Article 23

    

General.

     25   

 

i


Exhibit A

    

Stormwater Discharge and Wastewater Treatment

Exhibit B

    

Steam

Exhibit C

    

Potable Water

Exhibit D

    

Roads and Grounds

Exhibit E

    

Sanitary Sewer

Exhibit F

    

Electrical Power

Exhibit G

    

Emergency Response

Exhibit H

    

Filter Press

Exhibit I

    

Fuel Gas

Exhibit J

    

API Solids

Exhibit K

    

Fire Water

Exhibit L

    

Instrument/Compressed Air

Exhibit M

    

Rail Operations and Unloading

 

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OPERATION AND MANAGEMENT SERVICES AND SECONDMENT AGREEMENT

THIS OPERATION AND MANAGEMENT SERVICES AND SECONDMENT AGREEMENT (this “ Agreement ”), dated as of May 14, 2014 (the “ Commencement Date ”), is made by and among PBF Holding Company LLC, a Delaware limited liability company (the “ Company ”), Delaware City Refining Company LLC, a Delaware limited liability company (“ Delaware City Refining ”), Toledo Refining Company LLC, a Delaware limited liability company (“ Toledo Refining ” and, together with Delaware City Refining, the “ Company Subsidiaries ,” and together with the Company, collectively, the “ Company Parties ”), PBF Logistics GP LLC, a Delaware limited liability company (the “ General Partner ”), PBF Logistics LP, a Delaware limited partnership (the “ Operator ”), and Delaware City Terminaling Company LLC, a Delaware limited liability company (the “ Operator Subsidiary ” and, together with the General Partner and Operator, collectively, the “ Operator Parties ”). The Company, the Company Subsidiaries, the General Partner, the Operator and the Operator Subsidiary may be referred to herein individually as “ Party ” or collectively as the “ Parties .”

RECITALS

WHEREAS , the Operator Parties own or lease the Terminal;

WHEREAS , the Company Parties own and operate the Refinery;

WHEREAS , the Operator Parties have agreed to provide logistics and terminaling services to the Company Parties pursuant to the terms of the Delaware City Rail Terminaling Services Agreement and the Toledo Truck Unloading & Terminaling Agreement, each of which has been entered concurrently herewith;

WHEREAS , the Company Parties have experience and expertise in the operation and maintenance of the Delaware City Rail Terminal and the Toledo Truck Terminal and can provide or make available to the Operator Parties the personnel necessary to operate and maintain the Delaware City Rail Terminal and the Toledo Truck Terminal; and

WHEREAS , the Operator Parties desire that the Company Parties provide and make available to the Operator Parties the personnel necessary to provide the logistics and terminaling services.

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

 

Article 1 Definitions and Construction.

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

Affiliate ” means, with respect to a specified Person, any other Person controlling, controlled by or under common control with that first Person. As used in this definition, the term “control” includes (a) with respect to any Person having voting securities or the equivalent and

 

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elected directors, managers or Persons performing similar functions, the ownership of or power to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the power to vote in the election of directors, managers or Persons performing similar functions, (b) ownership of 50% or more of the equity or equivalent interest in any Person and (c) the ability to direct the business and affairs of any Person by acting as a general partner, manager or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, each of the Company Parties, on the one hand, and each of the Operator Parties, on the other hand, shall not be considered Affiliates of each other.

Agreement ” has the meaning specified in the preamble to this document.

Ancillary Company Services ” has the meaning specified in Section 3.5 .

Annual Fee ” has the meaning specified in Section 5.2 .

Applicable Law ” means any applicable statute, law, regulation, Environmental Law, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by, any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including all of the terms and provisions of the applicable common law of such Governmental Authority), as interpreted and enforced at the time in question.

Arbitrable Dispute ” means any and all disputes, controversies and other matters in question between the Operator Parties, on the one hand, and the Company Parties, on the other hand, arising under or in connection with this Agreement, which cannot be resolved by the Services Council within thirty (30) days (unless a longer duration is otherwise agreed to) from being submitted to the Services Council.

Barrel ” means forty-two (42) net U.S. gallons, measured at 60° F and 1 atmospheric pressure.

bpd ” means barrels per day.

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, State of New Jersey, State of Ohio or the State of Delaware.

Capital Expenditure ” means any expenditure incurred to acquire or upgrade a fixed asset.

Claimant ” has the meaning specified in Article 22 .

Commencement Date ” has the meaning specified in the preamble of this Agreement.

Company ” has the meaning specified in the preamble to this Agreement.

 

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Company Parties ” has the meaning specified in the preamble of this Agreement.

Company Services ” has the meaning specified in Section 3.4 .

Company Subsidiaries ” has the meaning specified in the preamble of this Agreement.

Company Indemnitees ” has the meaning specified in Section 14.1 .

Confidential Information ” means all information, documents, records and data (including this Agreement, except to the extent required to be made public in a filing with the Securities and Exchange Commission or another Governmental Authority or pursuant to the rules and regulations of any national securities exchange) that a Party furnishes or otherwise discloses to the other Party (including any such items furnished prior to the execution of this Agreement), together with all analyses, compilations, studies, memoranda, notes or other documents, records or data (in whatever form maintained, whether documentary, computer or other electronic storage or otherwise) prepared by the receiving Party which contain or otherwise reflect or are generated from such information, documents, records and data; provided , however , that the term “ Confidential Information ” does not include any information that (a) at the time of disclosure or thereafter is or becomes generally available to or known by the public (other than as a result of a disclosure by the receiving Party), (b) is developed by the receiving Party without reliance on any Confidential Information or (c) is or was available to the receiving Party on a nonconfidential basis from a source other than the disclosing Party that, insofar as is known to the receiving Party after reasonable inquiry, is not prohibited from transmitting the information to the recipient by a contractual, legal or fiduciary obligation to the disclosing Party.

control ” (including with correlative meaning, the term “ controlled by ”) means, as used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

Counterparty ” means, with respect to any of the Company Parties, the Operator, and with respect to any of the Operator Parties, the Company.

Defaulting Party ” has the meaning specified in Section 13.2 .

Delaware City Rail Terminal ” means the double-loop rail terminal located in Delaware City, Delaware (together with existing or future modifications or additions) owned and operated by Delaware City Terminaling Company LLC.

Delaware City Rail Terminaling Services Agreement ” means the Delaware City Rail Terminaling Services Agreement, dated as of the date hereof, by and between the Company and the Operator Subsidiary.

Delaware City Refinery ” means the petroleum refinery located in Delaware City, Delaware owned and operated by Delaware City Refining.

Delaware City Refining ” has the meaning specified in the preamble of this Agreement.

 

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Environmental Law ” means all federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally enforceable requirements and rules of common law now or hereafter in effect, relating to pollution or protection of human health and the environment, safety, and occupational health, including the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Clean Water Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, OSHA, and other similar federal, state or local health and safety, and environmental conservation and protection laws.

Environmental Permit ” means any permit, approval, identification number, license, registration, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law.

Event of Default ” has the meaning specified in Section 13.1 .

Force Majeure ” means acts of God, strikes, lockouts or other industrial disturbances, acts of a public enemy, wars, terrorism, blockades, insurrections, riots, storms, floods, interruptions in the ability to have safe passage in navigable waterways or rail lines, washouts, other interruptions caused by acts of nature or the environment, arrests, the order of any court or Governmental Authority claiming or having jurisdiction while the same is in force and effect, civil disturbances, explosions, fires, leaks, releases, breakage, accident to machinery, vessels, storage tanks or lines of pipe or rail lines, inability to obtain or unavoidable delay in obtaining material or equipment, inability to obtain or distribute crude oil, feedstocks, other products or materials necessary for operation because of a failure of third-party pipelines or rail lines or any other causes whether of the kind herein enumerated or otherwise not reasonably within the control of the Party claiming suspension and which by the exercise of commercially reasonable efforts such Party is unable to prevent or overcome; provided , however , a Party’s inability to perform its economic obligations hereunder shall not constitute an event of Force Majeure.

Force Majeure Notice ” has the meaning specified in Section 11.1 .

Force Majeure Party ” has the meaning specified in Section 11.1 .

General Partner ” has the meaning specified in the preamble of this Agreement.

Governmental Authority ” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

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, cause of action, equitable or injunctive relief, or judicial or administrative order and any Costs arising from compliance or non-compliance with Environmental Law.

 

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Non-Defaulting Party ” means the Counterparty to a Defaulting Party.

Omnibus Agreement ” means that Omnibus Agreement, dated as of the date hereof, by and among the Company, the General Partner, the Operator and PBF Energy Company LLC.

Operator ” has the meaning specified in the preamble to this Agreement.

Operator Indemnitees ” has the meaning specified in Section 14.2 .

Operator Parties ” has the meaning specified in the preamble of this Agreement.

Operator Subsidiary ” has the meaning specified in the preamble of this Agreement.

OSHA ” means Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq .

Overhead Expenses ” means all overhead costs and expenses of any of the Company Parties (including all compensation costs, including payroll, benefits and payroll taxes allocated to each of the Seconded Employees providing the Personnel Duties, or the Company’s employees providing the Company Services or the Ancillary Company Services, multiplied by the proportion of such Person’s business time spent providing Personnel Duties, Company Services or Ancillary Company Services, as applicable) to the extent related to the Personnel Duties, the Company Services or the Ancillary Company Services.

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

Period of Secondment ” has the meaning specified in Article 3 .

Person ” means any individual, corporation, partnership, limited 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.

Personnel Duties ” has the meaning specified in Article 3 .

Prime Rate ” means the rate of interest quoted in The Wall Street Journal , Bonds, Rates & Yields Section as the Prime Rate.

Prudent Industry Practice ” means, as of the relevant time, those methods and acts generally engaged in or applied by the refining, pipeline or terminaling industries (as applicable) in the United States that, in the exercise of reasonable judgment in light of the circumstances known at the time of performance, would have been expected to accomplish the desired result at a reasonable cost consistent with functionality, reliability, safety and expedition with due regard for health, safety, security and environmental considerations. Prudent Industry Practice is not intended to be limited to the optimum practices, methods or acts to the exclusion of others, but rather is intended to include reasonably acceptable practices, methods and acts generally engaged in or applied by the refining, pipeline or terminaling industries (as applicable) in the United States.

 

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Receiving Party Personnel ” has the meaning specified in Section 16.4 .

Refinery ” means, collectively, the Delaware City Refinery and the Toledo Refinery. In addition, if any of the Company Parties acquires, leases or constructs assets directly connected to and leased or constructed to reasonably support the operation of, or to replace any portion of, the Delaware City Refinery or the Toledo Refinery, those assets shall automatically become a part of the Refinery.

Required Permits ” has the meaning specified in Section 8.1 .

Respondent ” has the meaning specified in Article 22 .

Seconded Employee ” has the meaning specified in Article 3 .

Seconded Employee Schedule ” has the meaning specified in Section 3.3(a).

Services Council ” shall mean the council comprised of 2 representatives of the Operator Parties and 2 representatives of the Company Parties.

Special Damages ” has the meaning specified in Article 15 .

Term ” has the meaning specified in Section 2.1 .

Terminal ” means, collectively, the Delaware City Rail Terminal and the Toledo Truck Terminal.

Toledo Refinery ” means the petroleum refinery, located in Toledo, Ohio owned and operated by Toledo Refining.

Toledo Refining ” has the meaning specified in the preamble of this Agreement.

Toledo Truck Terminal ” means the truck unloading facility generally consisting of four crude truck unloading spots located in Toledo Refinery’s north tank farm adjacent to the Toledo Refinery (together with existing or future modifications or additions) owned and operated by the Operator.

Toledo Truck Unloading & Terminaling Agreement ” means the Toledo Truck Unloading and Terminaling Agreement, dated as of the date hereof, by and between the Company and the Operator.

Section 1.2 Construction of Agreement .

(a) Unless otherwise specified, all references herein are to the Articles, Sections and Exhibits of this Agreement and all Exhibits are incorporated herein.

 

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(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.

(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 expressly stated otherwise, any reference to any Applicable Law or agreement shall be a reference to the same as amended, supplemented or reenacted from time to time.

(i) 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.

Section 1.3 No Presumption . 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 Term.

Section 2.1 Term of Agreement . The term (the “ Term ”) shall commence on the Commencement Date and shall continue until the earlier of (a) written mutual agreement by the Parties to terminate this Agreement, (b) the termination of the Omnibus Agreement, (c) a termination pursuant to a default in accordance with Section 13.2 or (d) a termination pursuant to Section 2.4 .

 

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Section 2.2 Termination of Services by the Operator . In addition to the Operator’s right to adjust or terminate any the Company Services or Ancillary Company Services pursuant to Section 6.1(c) , the Operator shall have the right to terminate any or all of the Company Services, Ancillary Company Services or Personnel Duties, without penalty, upon thirty (30) days prior written notice to the Company.

Section 2.3 Termination of Company Services and Ancillary Company Services by the Company .

(a) Except as provided in Section 2.3(b) , the Company shall have the right to terminate any or all of the Company Services or Ancillary Company Services being performed by the Company Parties without penalty, upon one hundred eighty (180) days prior written notice to the Operator; provided , however , if one hundred eighty (180) days prior notice is not sufficient time for the Operator, using commercially reasonable efforts, to replace the Company Services or Ancillary Company Services that are being terminated, the Company shall make its equipment available to the Operator, at no cost, or continue to provide such Company Services or Ancillary Company Services, as applicable, under the terms of this Agreement, whichever is deemed practical by the Company in its reasonable discretion, for a reasonable period of time after such one hundred eighty (180) day period while replacement Company Services or Ancillary Company Services are being arranged.

(b) The Company may not terminate Company Services or Ancillary Company Services for Stormwater Discharge and Wastewater Treatment ( Exhibit A ), Steam (Exhibit B), Potable Water (Exhibit C), Sanitary Sewer (Exhibit E), Electrical Power ( Exhibit F ), Fuel Gas (Exhibit I), Fire Water (Exhibit K) and Instrument/Compressed Air (Exhibit L) pursuant to this Section 2.3 .

Section 2.4 Cessation of Company Services and Ancillary Company Services in connection with the Terminaling Agreements . Upon the termination or expiration of the Term (as defined therein) of the Delaware City Rail Terminaling Services Agreement, the Company Services and the Ancillary Company Services that relate to the Delaware City Rail Terminal shall also terminate as of the termination or expiration of such Term. Upon the termination or expiration of the Term (as defined therein) of the Toledo Truck Unloading & Terminaling Agreement, the Company Services and the Ancillary Company Services that relate to the Toledo Truck Terminal shall also terminate as of the termination or expiration of such Term. If both of the foregoing agreements terminate or expire, the Term hereof shall automatically terminate.

Section 2.5 Effect of Termination . Upon termination or expiration of the Term, all rights and obligations of the Parties under this Agreement shall terminate; provided , however , Articles 14 through 23 shall survive the termination or expiration of the Term in accordance with their terms; provided , further , termination or expiration of the Term shall not discharge or relieve either Party from any obligations or liabilities which may have accrued under the terms of this Agreement prior to such termination.

 

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Article 3 Personnel, Personnel Duties and Company Services.

Section 3.1 Seconded Employees . During the Term, the Company shall, directly or indirectly through the other Company Parties, designate (a) certain of employees or contractors of the Company Parties to be seconded to the Operator Parties to (x) perform the Operator Parties’ respective obligations under each of the Delaware City Rail Terminaling Services Agreement and the Toledo Truck Unloading & Terminaling Agreement and (y) otherwise perform the Personnel Duties, and (b) such other Persons (including consultants and professionals, service or other organizations) as the Operator reasonably deems necessary or appropriate in order to permit the Operator to (x) perform the Operator Parties’ respective obligations under each of the Delaware City Rail Terminaling Services Agreement and the Toledo Truck Unloading & Terminaling Agreement and (y) otherwise perform the Personnel Duties. Each employee or contractor who the Company seconds to the Operator Parties pursuant to this Article 3 shall, during the time that such employee or contractor is seconded to the Operator Parties under this Agreement (the “ Period of Secondment ”), be referred to individually herein as a “ Seconded Employee ” and, collectively, as the “ Seconded Employees .”

Section 3.2 Personnel Duties . The Personnel Duties shall include the following:

(a) operation of the Terminal, procurement and furnishing of all materials, equipment, services, supplies and labor necessary for the operation and maintenance of the Terminal, engineering support for such activities, and related warehousing and security, including the following:

(i) maintain and operate flow and pressure control, monitoring, and over-pressure protection;

(ii) maintain, repair, recondition, overhaul, and replace equipment, as needed, to keep the Terminal in good working order; and

(iii) conduct all other routine day-to-day operations and maintenance at the Terminal; and

(b) management and conduct of the business operations associated with the Terminal, including the following:

(i) transportation and logistics, including commercial operations;

(ii) project execution;

(iii) contract administration;

(iv) database mapping, reporting and maintenance;

(v) rights of way;

(vi) materials and capital management;

 

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(vii) emergency response, security, permitting and all other health, safety and environmental services;

(viii) engineering support (including facility design and optimization); and

(ix) such other general services related to the Terminal as the Parties may mutually agree are necessary from time to time.

Section 3.3 Secondment of Personnel .

(a) The Company Parties shall maintain a true, complete and accurate list of the Seconded Employees on a schedule (the “ Seconded Employee Schedule ”). Seconded Employees may be added to or removed from the Seconded Employee Schedule from time to time by the Company Parties, as appropriate.

(b) Subject to the Company Parties’ right to be reimbursed by the Operator for such expenses in accordance with Section 5.1 , each Company Party shall pay all expenses incurred by it in connection with the retention of the Seconded Employees and such other Persons, including compensation, salaries, wages and overhead and administrative expenses, charges to or incurred by such Company Party, and, if applicable, social security taxes, workers compensation insurance, retirement and insurance benefits and other such expenses. Any such Seconded Employees and other Persons retained by any Company Party may be union or non-union employees.

(c) Each Seconded Employee (other than contractors) will at all times remain an employee of the applicable Company Party. Each Seconded Employee will, during the applicable Period of Secondment, be called upon to perform services for both the Operator Parties and the Company Parties. The Company Parties retain the right to terminate the Secondment of any Seconded Employee for any reason and at any time or to hire or discharge the Seconded Employees with respect to their employment or engagement with the Company Parties. The Operator shall have the right to terminate the Secondment to it of any Seconded Employee (including any supervisor described in (e)) for any reason and at any time, upon prior written notice to the Company Parties, but at no time will the Operator have the right to terminate any Seconded Employee’s employment by the Company Parties or their respective contractor.

(d) During a Period of Secondment, with respect to any Seconded Employee, such Seconded Employee will report into the Operator’s management structure, and will be under the direct management, supervision, direction and control of the Operator with respect to such Seconded Employee’s day-to-day activities with contractors remaining at the direction of the contracting entity.

(e) Those active employees whose titles in the Seconded Employee Schedule reflect that they serve as supervisors or managers and who are called upon to oversee the work of Seconded Employees working at the Terminal or to provide management support on behalf of the Operator are designated by the Operator as supervisors to act on the behalf of the Operator in supervising the Seconded Employees pursuant to Section 3.3(d) above. Any Seconded Employee so designated will be acting on behalf of the Operator when supervising the work of the Seconded Employees or when they are otherwise providing management or executive support on behalf of the Operator.

 

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(f) The Operator shall not be a participating employer in any benefit plan of any Company Party. The Company Parties shall remain solely responsible for all obligations and liabilities arising with respect to any benefit plans relating to any Seconded Employees and the Operator shall not assume any benefit plan or have any obligations or liabilities arising thereunder, in each case except for costs properly chargeable to the Operator.

Section 3.4 Company Services . In addition to providing the Seconded Employees to the Operator Parties pursuant to Section 3.3 , the Company Parties shall also provide (through employees, contractors, subcontractors or Affiliates) the services enumerated in the Exhibits to this Agreement (the “ Company Services ”) upon customary terms in accordance with Prudent Industry Practice. The Operator shall reimburse the Company for the Company Services in accordance with Section 5.1 ; provided , however , that in the event any Company Services requires the Company Parties to make Capital Expenditures, such Capital Expenditures shall be subject to Section 6.1 and the Company Parties shall not be required to provide such Company Services until the Company Parties are able to do so after using reasonable efforts in compliance with Section 6.1 ; provided , further , the Company Parties shall not be required to perform any additional Company Services if the Company reasonably believes the performance thereof will (i) materially adversely interfere with, or be detrimental to, the operation of the Refinery or (ii) violate Applicable Law.

Section 3.5 Ancillary Company Services . From time-to-time during the Term, the Operator may request that the Company Parties provide (through employees, contractors, subcontractors or Affiliates), ancillary services to the Operator Parties (“ Ancillary Company Services ”) upon customary terms in accordance with Prudent Industry Practice so long as such additional Ancillary Company Services are reasonably related to the Company Services or existing Ancillary Company Services. The Operator shall reimburse the Company for the Ancillary Company Services in accordance with Section 5.1 ; provided , however , that in the event any requested additional Ancillary Company Services requires the Company Parties to make Capital Expenditures, such Capital Expenditures shall be subject to Section 6.1 and the Company Parties shall not be required to provide such additional Ancillary Company Services until the Company Parties are able to do so after using reasonable efforts in compliance with Section 6.1 ; provided , further , the Company Parties shall not be required to perform any additional Ancillary Company Services if they reasonably believe the performance thereof will (i) materially adversely interfere with, or be detrimental to, the operation of the Refinery or (ii) violate Applicable Law.

Section 3.6 Third-Party Arrangements . Nothing herein shall be deemed to prevent any of the Company Parties from providing services similar to the Company Services or Ancillary Company Services to third parties. Further, nothing herein shall be deemed to prohibit any of the Operator Parties from receiving services similar to the Company Services or Ancillary Company Services from third parties.

Section 3.7 Interruption of Company Services . The Parties shall use commercially reasonable efforts to minimize the interruption of Company Services or Ancillary Company Services. In addition, the Company shall inform the Operator at least sixty (60) days in advance (or promptly, in the case of an unplanned interruption) of any anticipated partial or complete interruption of Company Services or Ancillary Company Services at the applicable facility, including relevant information about the nature, extent, cause and expected duration of the

 

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interruption and the actions the Company is taking to resume full operations; provided , however , that the Company shall not have any liability for any failure to notify, or delay in notifying, the Operator of any such matters except to the extent, subject to Article 11 , the Operator has been materially damaged by such failure or delay.

Section 3.8 Manner of Performing/Providing Personnel Duties . The Personnel Duties to be performed and provided by the Seconded Employees made available pursuant to Section 3.3 by the Company Parties hereunder shall be performed and provided consistent with Prudent Industry Practice.

 

Article 4 Self-Provided Services and Shared Items.

Section 4.1 Self-Provided Services . Subject to the Omnibus Agreement, except for the Company Services and the Ancillary Company Services set forth in Sections 3.4 , and 3.5 , respectively, the Operator shall provide for itself, at its sole cost and expense, any other services it requires as applicable for its operations, including telephone and fax services, computers and computer networks and tank gauging.

Section 4.2 Shared Items . Notwithstanding anything to the contrary contained in Section 4.1 above, the Parties have agreed to share certain of the following items:

(a) existing infrastructure for the Parties’ telephones and faxes, including telephone switch;

(b) existing fiber optics system;

(c) radio messages, at times, during their normal operations at the Refinery and the Terminals, respectively; and

(d) an emergency alarm system for the Parties’ respective operations at the Refinery and the Terminal, respectively, including existing infrastructure used by the Parties to connect to the emergency alarm system; provided , however , each Party shall be responsible, at its sole cost, for interconnecting into the emergency alarm system.

 

Article 5 Pricing, Billing and Reimbursement.

Section 5.1 Reimbursement for Personnel Duties, Company Services and Ancillary Company Services . The Operator shall reimburse the Company for all third-party costs and expenses incurred by any of the Company Parties in connection with the performance by the Seconded Employees of the Personnel Duties, or the Company’s employees of the Company Services and the Ancillary Company Services (including any Overhead Expenses) and if mutually agreeable to the Parties shall cause any third-party service providers to invoice the Operator Parties directly in connection with the performance of any Personnel Duties by such third party or the performance of any Company Service or Ancillary Company Services by such third party. The Operator shall reimburse the Company for all taxes (other than property taxes, ad valorem taxes, income taxes, gross receipt taxes, payroll taxes and other similar taxes) that the Company incurs on the Operator Parties’ behalf for the performance by the Seconded Employees of the Personnel Duties, or the Company’s employees of the Company Services and the Ancillary Company

 

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Services, unless prohibited by Applicable Law; provided , however , that in no event shall the Company charge or be entitled to pass-through costs that (i) result from any criminal act, willful misconduct or negligence of the Company or any of its agents, employees or representatives, or (ii) are in the nature of fines, late fees, penalties, interest or similar obligations that could have been avoided by the Company in the exercise of Prudent Industry Practice. If the Operator is exempt from the payment of any taxes allocated to it under this Section 5.1 , the Operator shall furnish the Company with the proper exemption certificates.

Section 5.2 Annual Fee . In addition to reimbursement under Section 5.1 , the Operator shall pay to the Company an annual fee for the services as set forth herein and in connection with the provision of certain utilities and other infrastructure-related services equal to $490,000 (the “ Annual Fee ”) payable in equal monthly installments in accordance with Section 5.3 , commencing in the first month following the Commencement Date. The Annual Fee for the 2014 fiscal year shall be prorated based on the number of days from the Commencement Date to December 31, 2014. At the end of each calendar year, the Company will have the right to submit to the Operator a proposal to increase the amount of the Annual Fee for the upcoming year if the Company believes, in good faith, that for the services as set forth herein, the utilities and other infrastructure-related services performed by the Company Parties for the benefit of the Operator Parties for the upcoming year justify payment greater than the Annual Fee for such year. If the Company submits such a proposal to the Operator, the Operator agrees that it will negotiate in good faith with the Company to determine if the Annual Fee for the upcoming year should be increased and, if so, the amount of such increase. If the Parties cannot agree to the amount of an increase in the Annual Fee for that year, then the increase amount shall become an Arbitrable Dispute and governed in accordance with Section 22.3 . Until the Parties are able to agree on the Annual Fee increase amount, if any, the Annual Fee for the preceding year shall continue to be the applicable fee and any subsequent increase decided upon shall be applied retroactively to the start of the year.

Section 5.3 Billing . The Company shall provide monthly invoices to the Operator for all reimbursements payable under this Agreement and the Operator shall reimburse the Company as specified in the monthly invoices within ten (10) days after its receipt of such invoice; provided , however , that notwithstanding anything herein to the contrary, no reimbursements shall be made hereunder to the extent such reimbursements are made pursuant to the Omnibus Agreement. The Company shall also include in such monthly invoices the applicable amount of the Annual Fee owed by the Operator and the Operator shall pay the Annual Fee as specified in the monthly invoices within ten (10) days after its receipt of such invoice. Any past due reimbursements or fees owed to the Company hereunder shall accrue interest, payable on demand, at the Prime Rate plus 400 basis points from the due date of the reimbursement or fee through the actual date of reimbursement or payment of the fee. Reimbursement or payment of any fee pursuant to this Section 5.3 shall be made by wire transfer of immediately available funds to an account designated in writing by the Company. If any such reimbursement or fee shall be due and payable on a day that is not a Business Day, such reimbursement or fee shall be due and payable on the next succeeding Business Day.

Section 5.4 Contents of Invoices . Any invoice delivered by the Company to the Operator pursuant to Section 5.3 above shall set forth in detail the Company’s calculation of the charges for the Personnel Duties, the Company Services and the Ancillary Company Services, and shall be accompanied by information reasonably sufficient for the Operator to determine the accuracy of such invoice.

 

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Section 5.5 Reimbursement Disputes . Notwithstanding any other provision of this Article 5 , if the Operator in good faith disputes the correctness of any invoice submitted by the Company, the Operator shall promptly submit to the Company a written statement detailing the specific items disputed and shall reimburse the undisputed portion of the invoice within the time period specified for reimbursement hereunder. Any disputed items shall be subject to the dispute resolution procedures in Article 22 , and any reimbursement determined to be due pursuant to said dispute resolution shall bear interest at the Prime Rate plus 400 basis points from the date on which said reimbursement otherwise would have been payable hereunder to the date such reimbursement is actually received by the Company.

Article 6 Fee Adjustments.

Section 6.1 Capital Expenditures .

(a) If during the course of the Term the Company determines that it is necessary to make certain Capital Expenditures related to the Company Services and the Ancillary Company Services, the Company may notify the Operator in writing of its desire to have the Operator pay for the Operator’s applicable portion of the cost of such Capital Expenditure.

(b) If within sixty (60) days after the Company provides the written notice requesting Capital Expenditures the Parties have not reached agreement on the need for such Capital Expenditures, then the matter shall become an Arbitrable Dispute and governed in accordance with Article 22 . For the avoidance of doubt, if the Company’s Capital Expenditures are not approved, and the Company chooses to make such Capital Expenditures, the Company agrees to bear all costs associated therewith.

(c) Notwithstanding anything to the contrary contained herein, in lieu of participating in the Capital Expenditures the Operator may choose at any time to terminate all of the Personnel Duties, Company Services and the Ancillary Company Services related to such Capital Expenditure.

Article 7 Access and Audit Rights.

The Parties and their respective representatives, upon reasonable notice and during normal working hours, shall have access to the accounting records and other documents maintained by the Counterparty, or any of its contractors and agents, which relate to this Agreement, and shall have the right to audit such records at any reasonable time or times during the Term and for a period of up to two (2) years after termination of this Agreement. The Party performing such audit shall have the right to conduct such audit no more than twice per calendar year and each audit shall be limited in time to no more than the present and prior two (2) calendar years. Claims as to defects in quality shall be made by written notice within ninety (90) days after the delivery in question or shall be deemed to have been waived. The right to inspect or audit such records shall survive termination of this Agreement for a period of two (2) years following the end of the Term. 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 end of the Term. Notwithstanding any of

 

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the foregoing, if an Event of Default has occurred and is continuing with respect to a specific Party, the Counterparty shall have unlimited and unrestricted access to the accounting records and other documents maintained by the Counterparty, for so long as such Event of Default continues.

 

Article 8 Additional Covenants.

Section 8.1 Required Permits . During the Term, unless required by Applicable Law to be held by the Company Parties, the Operator shall, at its sole cost and expense, obtain, apply for, maintain, monitor, renew, and modify, as appropriate, any license, authorization, certification, filing, recording, permit, waiver, exception, variance, franchise, order or other approval with or of any Governmental Authority pertaining or relating to the operation of the Terminal (the “ Required Permits ”) as currently operated; provided , however , that if any Required Permits require the signature of, or any action by, any of the Company Parties, the Company shall cause such Company Party to reasonably cooperate with the Operator (at the Operator’s expense) so that the Operator may obtain and maintain such Required Permits either for the Operator or the applicable Operator Party. Neither the Company nor the Operator shall do anything in connection with the performance of their respective obligations under this Agreement that causes a termination or suspension of the Required Permits.

Section 8.2 Existing Obligations . The execution of this Agreement by the Parties does not reduce any existing obligations of such Parties and does not confer any obligation or responsibility on (a) the Company Parties in connection with: (i) any existing or future environmental condition at the Terminal, including, the presence of a regulated or hazardous substance on or in environmental media at the Terminal (including the presence in surface water, groundwater, soils or subsurface strata, or air), including the subsequent migration of any such substance; (ii) any Environmental Law; (iii) the Required Permits; or (iv) any requirements arising under or relating to any Applicable Law pertaining or relating to the ownership and operation of the Terminal, or (b) the Operator Parties in connection with: (i) any existing or future environmental condition at the Refinery, including, the presence of a regulated or hazardous substance on or in environmental media at the Refinery (including the presence in surface water, groundwater, soils or subsurface strata, or air), including the subsequent migration of any such substance; (ii) any Environmental Law; (iii) the Required Permits; or (iv) any requirements arising under or relating to any Applicable Law pertaining or relating to the ownership and operation of the Refinery.

Section 8.3 Records .

(a) Each Party shall (i) maintain the records required to be maintained by Applicable Law and shall make such records available to the other Parties upon reasonable request and (ii) immediately notify the other Parties of any violation or alleged violation of any Applicable Law relating to this Agreement and, upon request, shall provide to the other Parties all evidence of environmental inspections or audits by any Governmental Authority relating to this Agreement.

(b) All records or documents provided by any Party to any other Party shall, to the reasonable knowledge of the providing Party, accurately and completely reflect the facts about the activities and transactions to which they relate. Notwithstanding anything herein to the contrary, no Party shall be required to provide to any other Party any document that is determined by the

 

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disclosing Party’s legal counsel to be protected by an attorney-client privilege or attorney work product doctrine. Each Party shall promptly notify the other Parties if at any time such Party has reason to believe that any records or documents previously provided to the other Party are no longer accurate or complete.

 

Article 9 Representations.

Section 9.1 Representations of the Operator Parties . The Operator Parties jointly and severally represent and warrant to the Company Parties that (a) this Agreement, the rights obtained and the duties and obligations assumed by the Operator Parties hereunder, and the execution and performance of this Agreement by the Operator Parties, do not directly or indirectly violate any Applicable Law with respect to the Operator Parties or any of their properties or assets, the terms and provisions of the Operator Parties’ organizational documents or any agreement or instrument to which the Operator Parties or any of their properties or assets are bound or subject; (b) the execution and delivery of this Agreement by the Operator Parties has been authorized by all necessary action; (c) the Operator Parties have the full and complete authority and power to enter into this Agreement and to provide the services hereunder; (d) no further action on behalf of the Operator Parties, or consents of any other party, are necessary for the provision of services hereunder; and (e) upon execution and delivery by the Operator Parties, this Agreement shall be a valid and binding agreement of the Operator Parties 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).

Section 9.2 Representations of the Company Parties . The Company Parties jointly and severally represent and warrant to the Operator Parties that (a) this Agreement, the rights obtained and the duties and obligations assumed by the Company Parties hereunder, and the execution and performance of this Agreement by the Company Parties, do not directly or indirectly violate any Applicable Law with respect to the Company Parties or any of their property or assets, the terms and provisions of the Company Parties’ organizational documents or any agreement or instrument to which the Company Parties or any of their property or assets are bound or subject; (b) the execution and delivery of this Agreement by the Company Parties has been authorized by all necessary action; (c) the Company Parties have the full and complete authority and power to enter into this Agreement; (d) no further action on behalf of the Company Parties, or consents of any other party, are necessary for the provision of services hereunder; and (e) upon execution and delivery by the Company Parties, this Agreement shall be a valid and binding agreement of the Company Parties 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).

 

Article 10 Insurance.

Unless the Operator Parties provide notice that they will obtain insurance coverage independently from the Company Parties, the Company, directly or through one of its Affiliates, shall procure and maintain in full force and effect throughout the Term insurance in sufficient

 

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amounts and coverage consistent with Prudent Industry Practice similar to the coverage currently in place for the officers, directors, and assets of the Operator Parties; provided , however , that in either case, each Operator Party shall be the insured party under its respective insurance policy.

 

Article 11 Force Majeure.

Section 11.1 Force Majeure . In the event that a Party (the “ Force Majeure Party ”) is rendered unable, wholly or in part, by a Force Majeure event to perform its obligations under this Agreement, then such Party shall within a reasonable time after the occurrence of such event of Force Majeure deliver to the Counterparty written notice (a “ Force Majeure Notice ”) including full particulars of the Force Majeure event, and the obligations of the Parties, to the extent they are affected by the Force Majeure event, shall be suspended for the duration of any inability so caused. The Force Majeure Party shall identify in such Force Majeure Notice the approximate length of time that it believes in good faith such Force Majeure event shall continue. The Operator shall be required to pay any amounts accrued and due under this Agreement at the time of the start of the Force Majeure event. The cause of the Force Majeure event shall so far as possible be remedied with all reasonable efforts, except that no Party shall be compelled to resolve any strikes, lockouts or other industrial or labor disputes other than as it shall determine to be in its best interests. Prior to the second (2nd) anniversary of the Commencement Date, any suspension of the obligations of the Parties under this Section 11.1 as a result of a Force Majeure event that adversely affects the Company’s ability to perform the services it is required to perform under this Agreement shall extend the Term for the same period of time as such Force Majeure event continues (up to a maximum of one year) unless this Agreement is terminated under in accordance with Section 2.4 .

 

Article 12 Services Council.

Section 12.1 Formation of Services Council . The Parties agree to form a Services Council to handle the matters as described in this Article 12 . Each Party may choose to include in the Services Council meetings such knowledgeable Persons as may assist either Party in their consultations.

Section 12.2 Meetings . The Services Council shall meet at such times as either Party may reasonably request, or at such times as agreed by the Parties, to discuss any aspect of the subject matter of this Agreement. It is the Parties’ intent that the Services Council shall serve as the vehicle for complete and timely communications about the operating plans of one Party that could materially affect the operations of the other (including maintenance or repair activities, approval of Capital Expenditures, or major changes in operations that could result in a disruption of any Service or Ancillary Service), as well as a forum for prompt resolution of any disputes in the initial meeting between the Parties.

 

Article 13 Event of Default: Remedies Upon Event of Default.

Section 13.1 Event of Default . Notwithstanding any other provision of this Agreement, but subject to Article 22 , the occurrence of any of the following shall constitute an “ Event of Default ”:

 

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(a) Operator fails to make a reimbursement or pay the Annual Fee when due (i) under Article 5 within five (5) Business Days after a written demand therefor or (ii) under any other provision hereof within seven (7) Business Days;

(b) other than a default described in Sections 13.1(a) or 13.1(c) , if the Company Parties or the Operator Parties fail to perform any material obligation or covenant made to the Counterparty under this Agreement, which is not cured to the reasonable satisfaction of the Counterparty within fifteen (15) Business Days after the date that such Party receives written notice that such obligation or covenant has not been performed;

(c) any Party breaches any representation or warranty made by such Party hereunder, or such warranty or representation proves to have been incorrect or misleading in any material respect when made; provided , however , that if such breach is curable, such breach is not cured to the reasonable satisfaction of the Counterparty within fifteen (15) Business Days after the date that such Party receives notice that corrective action is needed; or

(d) any Party files a petition or otherwise commences or authorizes the commencement of a proceeding or case under any bankruptcy, reorganization or similar law for the protection of creditors, or have any such petition filed or proceeding commenced against it and such proceeding is not dismissed for sixty (60) days.

Section 13.2 Termination . Except as set forth in Section 13.1(d) , without limiting any other provision of this Agreement, if an Event of Default with respect to any Party (such defaulting Party, the “ Defaulting Party ”) has occurred and is continuing, the Non-Defaulting Party shall have the right, immediately and at any time(s) thereafter, to suspend its performance or terminate this Agreement upon written notice to the Defaulting Party.

Section 13.3 Set Off . If an Event of Default occurs, the Non-Defaulting Party may, without limitation on its rights under this Article 13 , 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 agreement or contract or otherwise and whether or not then due). Any net amount due hereunder shall be payable by the Party owing such amount within one (1) Business Day of termination.

Section 13.4 No Preclusion of Rights . The Non-Defaulting Party’s rights under this Section 13.4 shall be in addition to, and not in limitation 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, as a secured party or under any other credit support. The Defaulting Party shall indemnify and hold the Non-Defaulting Party harmless from all costs and expenses, including reasonable attorney fees, incurred in the exercise of any remedies hereunder.

 

Article 14 Indemnification.

Section 14.1 Indemnification by Operator . The Operator shall defend, indemnify and hold harmless the Company Parties, their respective Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “ Company Indemnitees ”) from and against any Liabilities directly or indirectly

 

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arising out of (a) any breach by the Operator Parties of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of the Operator Parties made herein or in connection herewith proving to be false or misleading, (b) any personal injury incurred by any representative of the Operator Parties (including any Operator Inspector) while at the Refinery, (c) any failure by the Operator Parties, their Affiliates or any of their respective employees, representatives (including any Operator Inspector), agents or contractors to comply with or observe any Applicable Law, or (d) 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 Operator Parties, their Affiliates or any of their respective employees, representatives (including any Operator Inspector), agents or contractors in the exercise of any of the rights or obligations hereunder or the handling or transportation of any crude oil hereunder, except to the extent of the Company’s obligations under Section 14.2 below, and except to the extent that such injury, disease, death, or damage to or loss of property, fine or penalty was caused by the gross or sole negligence or willful misconduct on the part of the Company Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, the Operator’s liability to the Company Indemnitees pursuant to this Section 14.1 shall be net of any insurance proceeds actually received by the Company Indemnitees or any of their respective Affiliates from any third party with respect to or on account of the damage or injury which is the subject of the indemnification claim. The Company agrees that it shall, and shall cause the other Company Indemnitees to, (i) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Company Indemnitees are entitled with respect to or on account of any such damage or injury, (ii) notify the Operator of all potential claims against any third party for any such insurance proceeds, and (iii) keep the Operator fully informed of the efforts of the Company Indemnitees in pursuing collection of such insurance proceeds.

Section 14.2 Indemnification by Company . The Company shall defend, indemnify and hold harmless the Operator Parties, their respective Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “ Operator Indemnitees ”) from and against any Liabilities directly or indirectly arising out of (a) any breach by the Company Parties of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of the Company Parties made herein or in connection herewith proving to be false or misleading, (b) any personal injury incurred by any representative of the Company Parties (including any Company Inspector) while at the Terminal, (c) any failure by the Company Parties, their respective Affiliates or any of their respective employees, representatives (including any Company Inspector), agents or contractors to comply with or observe any Applicable Law, or (d) 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 Parties, their respective Affiliates or any of their respective employees, representatives (including any Company Inspector), agents or contractors in the exercise of any of the rights or obligations hereunder or the refining, transportation, handling and storage of any crude oil hereunder, except to the extent of the Operator’s obligations under Section 14.1 above, and except to the extent that such injury, disease, death, or damage to or loss of property, fine or penalty was caused by the gross or sole negligence or willful misconduct on the part of the Operator Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, the Company’s liability to the Operator Indemnitees pursuant to this Section 14.2 shall be net of any insurance proceeds actually received by the Operator Indemnitees or any of their respective Affiliates from any third party with respect to or on account

 

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of the damage or injury which is the subject of the indemnification claim. The Operator agrees that it shall, and shall cause the other Operator Indemnitees to, (i) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Operator Indemnitees are entitled with respect to or on account of any such damage or injury, (ii) notify the Company of all potential claims against any third party for any such insurance proceeds, and (iii) keep the Company fully informed of the efforts of the Operator Indemnitees in pursuing collection of such insurance proceeds.

Section 14.3 EXPRESS REMEDY . THE FOREGOING INDEMNITIES ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE SOLE, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE, STRICT LIABILITY OR FAULT OF ANY OF THE INDEMNIFIED PARTIES.

 

Article 15 Limitation on Damages.

Notwithstanding anything to the contrary contained herein, neither Party shall be liable or responsible to any Counterparty or such other Party’s affiliated Persons for any consequential, punitive, special, incidental or exemplary damages, or for loss of profits or revenues (collectively referred to as “ Special Damages ”) incurred by such Party or its affiliated Persons that arise out of or relate to this Agreement, regardless of whether any such claim arises under or results from contract, tort, or strict liability; provided , however , that the foregoing limitation is not intended and shall not affect Special Damages in connection with any third-party claim or imposed in favor of unaffiliated Persons that are not Parties to this Agreement; provided , further , that to the extent an indemnitor hereunder receives insurance proceeds with respect to Special Damages that would be indemnified hereunder if not for this Article 15 , such indemnitor shall be liable up to the amount of such insurance proceeds (net any deductible and premiums paid with respect thereto).

 

Article 16 Confidentiality.

Section 16.1 Obligations . Each Party shall use commercially reasonable efforts to retain the Counterparty’s Confidential Information in confidence and not disclose the same to any third party nor use the same, except as authorized by the disclosing Party in writing or as expressly permitted in this Section 16.1 . Each Party further agrees to take the same care with the Counterparty’s Confidential Information as it does with its own, but in no event less than a reasonable degree of care.

Section 16.2 Required Disclosure . Notwithstanding Section 16.1 above, if the receiving Party becomes legally compelled to disclose the Confidential Information by a court, Governmental Authority or Applicable Law, including the rules and regulations of the Securities and Exchange Commission, or is required to disclose pursuant to the rules and regulations of any national securities exchange upon which the receiving Party or its parent entity is listed, any of the disclosing Party’s Confidential Information, the receiving Party shall promptly advise the disclosing Party of such requirement to disclose Confidential Information as soon as the receiving Party becomes aware that such a requirement to disclose might become effective, in order that,

 

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where possible, the disclosing Party may seek a protective order or such other remedy as the disclosing Party may consider appropriate in the circumstances. The receiving Party shall disclose only that portion of the disclosing Party’s Confidential Information that it is required to disclose and shall reasonably cooperate with the disclosing Party (at the disclosing Party’s cost) in allowing the disclosing Party to obtain such protective order or other relief.

Section 16.3 Return and Destruction of Information . Upon written request by the disclosing Party, all of the disclosing Party’s Confidential Information in whatever form shall be returned to the disclosing Party upon termination of this Agreement or destroyed with destruction certified by the receiving Party, without the receiving Party retaining copies thereof except that one copy of all such Confidential Information may be retained by a Party’s legal department solely to the extent that such Party is required to keep a copy of such Confidential Information pursuant to Applicable Law, and the receiving Party shall be entitled to retain any Confidential Information in the electronic form or stored on automatic computer back-up archiving systems during the period such backup or archived materials are retained under such Party’s customary procedures and policies; provided , however , that notwithstanding any termination or expiration of this Agreement, any Confidential Information retained by the receiving Party shall be maintained subject to confidentiality pursuant to the terms of this Section 16.3 , and such archived or back-up Confidential Information shall not be accessed except as required by Applicable Law for so long as such Confidential Information is retained.

Section 16.4 Receiving Party Personnel . The receiving Party shall limit access to the Confidential Information of the disclosing Party to those of its employees, attorneys and contractors that have a need to know such information in order for the receiving Party to exercise or perform its rights and obligations under this Agreement (the “ Receiving Party Personnel ”). The Receiving Party Personnel who have access to any Confidential Information of the disclosing Party shall be made aware of the confidentiality provision of this Agreement, and shall be required to abide by the terms thereof. Any third-party contractors that are given access to Confidential Information of a disclosing Party pursuant to the terms hereof shall be required to sign a written agreement pursuant to which such Receiving Party Personnel agree to be bound by the provisions of this Agreement, which written agreement shall expressly state that it is enforceable against such Receiving Party Personnel by the disclosing Party.

Section 16.5 Survival . All audit rights under Article 7 and the obligation of confidentiality under this Article 16 shall survive the termination of this Agreement for a period of two (2) years.

 

Article 17 Choice of Law.

This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Subject to Article 22 , the Parties agree to the venue and jurisdiction of the federal or state courts located in the State of Delaware for the adjudication of all disputes arising out of this Agreement.

 

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Article 18 Assignment.

Section 18.1 Succession and Assignment . This Agreement shall be binding upon and inure to the benefit of the Parties named herein. No Party shall have the right to assign its rights or obligations under this Agreement without the prior written consent of the other Parties hereto; provided , however , that the Operator may make a collateral assignment of this Agreement solely to secure financing for the Operator and its subsidiaries; provided , however , the Company may subcontract any of the Company Services, Personnel Duties or Ancillary Company Services provided by the Company hereunder so long as such Company Services, Personnel Duties or Ancillary Company Services continue to be provided in a manner consistent with past practices and Prudent Industry Practice.

Section 18.2 Terms of Assignment . Any assignment that is not undertaken in accordance with the provisions set forth above shall be null and void ab initio . A Party making any assignment shall promptly notify the other Party of such assignment, regardless of whether consent is required. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

 

Article 19 Notices.

All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when delivered; (b) if mailed via the official governmental mail system, five (5) Business Days after mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (c) if mailed by an internationally recognized overnight express mail service such as Federal Express or UPS, one (1) Business Day after deposit therewith prepaid; or (d) if by email, one (1) Business Day after delivery with receipt confirmed. All notices shall be addressed to the Parties at the respective addresses as follows:

If to the Company Parties:

PBF Holding Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Herman Seedorf, Senior Vice President

Telecopy No: (973) 455-7500

Email: herman.seedorf@pbfenergy.com

with a copy, which shall not constitute notice, to:

PBF Energy Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jeffrey Dill, General Counsel

Telecopy No: (973) 455-7500

Email: jeffrey.dill@pbfenergy.com

 

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If to the Operator Parties:

PBF Logisitics LP

c/o PBF Logistics GP LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jim Fedena, Senior Vice President

Telecopy No: (973) 455-7500

Email: jim.fedena@pbfenergy.com

with a copy, which shall not constitute notice, to:

PBF Logistics GP LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Matt Lucey, Executive Vice President

Telecopy No: (973) 455-7500

Email: matt.lucey@pbfenergy.com

or to such other address or to such other person as either Party shall have last designated by notice to the other Party.

 

Article 20 No Waiver; Cumulative Remedies.

Section 20.1 No Waivers . 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 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.

Section 20.2 Cumulative Remedies . 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 21 Nature of Transaction, Relationship of Parties and Regulatory Status.

Section 21.1 Independent Contractor . This Agreement shall not be construed as creating a partnership, association or joint venture among the Parties. It is understood that with respect to the services to be performed hereunder (a) the Operator Parties are 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 the Operator Parties, or any employee or agent of the Operator Parties, an agent or employee of the Company Parties, and (b) the Company Parties are 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 the Company Parties, or any employee or agent of the Company Parties, an agent or employee of the Operator Parties.

 

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Section 21.2 No Agency . No Party shall have the right or authority to negotiate, conclude or execute any contract or legal document with any third person in the name of other Party; to assume, create, or incur any liability of any kind, express or implied, against or in the name of any of the other Party; or to otherwise act as the representative of the other Party, unless expressly authorized in writing by the other Party.

Section 21.3 Regulatory Status . It is understood and agreed that neither Party is a utility and is not holding itself out to the other Party, to any entity or to the public at large to provide any utility service, and that by entering into this Agreement and taking the actions it takes pursuant to this Agreement shall not make it a utility or constitute providing utility service. Each Party agrees that it shall not propose, advocate, support or claim in any manner that any Service or Ancillary Service provided hereunder is a utility service or should be regulated in any manner. In the event that any government agency issues a decision, order or finding in any form that any Service provided herein is a utility service or is subject to regulation, the Service or Ancillary Service in question shall immediately terminate, and the Parties agree to work with each other and any public utility commission to provide transition services.

 

Article 22 Dispute Resolution.

Section 22.1 Procedure . In the event a dispute arises between the Company Parties and the Operator Parties regarding the application or interpretation of any provision of this Agreement, the Parties agree to use the procedures in this Article 22 to resolve any such disputes. Notwithstanding anything to the contrary contained herein, either Party may seek a restraining order, temporary injunction, or other provisional judicial relief if the Party in its sole judgment believes that such action is necessary to avoid irreparable injury or to preserve the status quo. The Parties will continue to participate in good faith in the procedures in this Article 22 despite any request for provisional relief.

Section 22.2 Initial Resolution Attempts . Either Party may initiate the dispute resolution procedures by sending written notice to the Counterparty specifically stating the complaining Party’s claim and requesting dispute resolution in accordance with this Article 22 . The applicable statute of limitations shall be tolled as of the date of such written notice. No Event of Default shall occur if the subject matter underlying such potential Event of Default is the subject matter of any dispute that is pending resolution or arbitration under this Article 22 until such time that such dispute is resolved in accordance with this Article 22 .

(a) Within fourteen (14) days after the complaining Party delivers the complaint, the Services Council shall hold a meeting to resolve the dispute.

(b) If the matter has not been resolved by the Services Council within thirty (30) days of notice being delivered in accordance with Section 22.2(a) , unless the Services Council agrees to a longer period of time, the dispute shall become an Arbitrable Dispute and become subject to Section 22.3 .

 

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Section 22.3 Arbitration . Any and all Arbitrable Disputes (except to the extent injunctive relief is sought) shall be resolved through the use of binding arbitration using, in the case of an Arbitrable Dispute involving a dispute of an amount equal to or greater than $1,000,000 or non-monetary relief, three arbitrators, and in the case of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, one arbitrator, in each case in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Article 22 and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Article 22 shall control the rights and obligations of the Parties. Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or the time period allowed by the applicable statute of limitations. Arbitration may be initiated by a Party (“ Claimant ”) serving written notice on the other Party (“ Respondent ”) that Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. Respondent shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If Respondent fails for any reason to name an arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed, and, in the of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, such third arbitrator shall act as the sole arbitrator, and the sole role of the first two arbitrators shall be to appoint such third arbitrator. Claimant shall pay the compensation and expenses of the arbitrator named by or for it, and Respondent shall pay the compensation and expenses of the arbitrator named by or for it. The costs of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. Claimant and Respondent shall each pay one-half of the compensation and expenses of the third arbitrator. All arbitrators must (a) be neutral parties who have never been officers, directors or employees of the Operator, the Company or any of their Affiliates and (b) have not less than seven (7) years’ experience in the energy industry. The hearing shall be conducted in the State of Delaware or the Philadelphia Metropolitan area and commence within thirty (30) days after the selection of the third arbitrator. The Company, the Operator and the arbitrators shall proceed diligently and in good faith in order that the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators shall be binding on and non-appealable by the Parties hereto. The arbitrators shall have no right to grant or award Special Damages. Notwithstanding anything herein the contrary, the Company may not dispute any amounts with respect to an invoice delivered in accordance with Article 5 that the Company has not objected to within one hundred twenty (120) days of receipt thereof.

 

Article 23 General.

Section 23.1 Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be valid and effective under Applicable Law, but if any provision of this Agreement or the application of any such provision to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and the Parties shall negotiate in good faith with a view to substitute for such provision a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

 

25


Section 23.2 Entire Agreement . This Agreement and the Omnibus Agreement together constitute the entire agreement among the Parties pertaining to the subject matter hereof and supersede all prior agreements and understandings of the Parties in connection therewith. No promise, representation or inducement has been made by any of the Parties concerning the subject matter of this Agreement and none of the Parties shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

Section 23.3 Time is of the Essence . Time is of the essence with respect to all aspects of each Party’s performance of any obligations under this Agreement.

Section 23.4 No Third-Party Beneficiaries . It is expressly understood that the provisions of this Agreement do not impart enforceable rights in anyone who is not a Party or successor or permitted assignee of a Party.

Section 23.5 Further Assurances . In connection with this Agreement and all transactions contemplated by this Agreement, each signatory Party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

Section 23.6 Counterparts . This Agreement may be executed in one or more counterparts (including by facsimile or portable document format (pdf)) for the convenience of the Parties hereto, each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement.

[ Remainder of Page Intentionally Left Blank ]

 

26


IN WITNESS WHEREOF, the Parties have duly executed this Agreement on the date first set forth above.

 

COMPANY:

 

PBF HOLDING COMPANY LLC

By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

DELAWARE CITY REFINING:

 

DELAWARE CITY REFINING

COMPANY LLC

By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

TOLEDO REFINING:

 

TOLEDO REFINING COMPANY LLC

By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

S IGNATURE P AGE TO THE O PERATION AND M ANAGEMENT S ERVICES AND S ECONDMENT A GREEMENT


GENERAL PARTNER:

 

PBF LOGISTICS GP LLC

By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

OPERATOR:

 

PBF LOGISTICS LP

By: PBF Logistics GP LLC, its general partner

By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

OPERATOR SUBSIDIARY:

 

DELAWARE CITY TERMINALING COMPANY LLC

By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

S IGNATURE P AGE TO THE O PERATION AND M ANAGEMENT S ERVICES AND S ECONDMENT A GREEMENT


Exhibit A

Stormwater discharge and wastewater treatment

Delaware City Refining – not applicable

Toledo Refining

 

    Sewer collection sumps in the area of the Truck Unloading Terminal and the connecting piping to the Refinery waste water treatment plant.

 

    Operating Agreement with Veolia for on-site treatment of wastewater


Exhibit B

Steam

 

    Not applicable


Exhibit C

Potable Water

Delaware City Refining

 

    Water supply contract with United Water (for bathroom use, not potable)

Toledo Refining

 

    Potable water supply to the safety shower in proximity to the Truck Unloading Terminal


Exhibit D

Roads and Grounds

 

    Not applicable


Exhibit E

Sanitary Sewer

 

    Not applicable


Exhibit F

Electrical Power

Delaware City Refining

 

    One boiler and one turbo generator of the refinery electric power generation unit.

 

    Electrical distribution system from the Boiler House, through switchgear 2 and feeder 66

Toledo Refining

 

    Electrical power supply from Toledo Edison.

 

    Electrical distribution system through substation 2, located on refinery property, and substation 8, located on Tank Farm #2 property.


Exhibit G

Emergency Response

Delaware City Refining

 

    Mutual Aid responders and equipment which would be needed in the event of a spill, fire, medical or other emergency, including ambulance, foam and pumper truck, foam supply.

Toledo Refining

 

    Mutual Aid responders and equipment which would be needed in the event of a spill, fire, medical or other emergency, including ambulance, foam and pumper truck, foam supply.


Exhibit H

Filter Press

 

    Not applicable


Exhibit I

Fuel Gas

 

    Not applicable


Exhibit J

API Solids

 

    Not applicable


Exhibit K

Fire Water

Delaware City Refining

 

    Raw water supply from United Water

Toledo Refining

 

    Fire water supply from the firewater pond at Tank Farm 2 and connected pumps P-16053, P-16054, P-16055 and P-16056.

 

    Fire water supply and connected refinery pumps P-1916, P-1917, P-1918 and P-1919.


Exhibit L

Instrument/Compressed Air

 

    Not applicable


Exhibit M

Rail Operations and Unloading

Delaware City Refining

 

    Railcar switching services to move railcars to and from the loop track, as needed and unloading crude from railcars.

Toledo Refining

 

    Maintenance and operational assistance to track crude unloading.

Exhibit 10.4

 

 

 

DELAWARE CITY RAIL

TERMINALING SERVICES AGREEMENT

 

 

 


TABLE OF CONTENTS

 

Article 1

 

Definitions and Construction.

     1   

Article 2

 

Term.

     9   

Article 3

 

Terminaling; Ancillary Services.

     9   

Article 4

 

Custody, Title and Risk of Loss.

     12   

Article 5

 

Specification and Contamination.

     13   

Article 6

 

Condition and Maintenance of the Terminal.

     14   

Article 7

 

Inspection, Access and Audit Rights.

     15   

Article 8

 

Scheduling.

     16   

Article 9

 

[Intentionally Omitted]

     17   

Article 10

 

Additional Covenants.

     17   

Article 11

 

Representations.

     18   

Article 12

 

Insurance.

     19   

Article 13

 

Force Majeure, Damage or Destruction.

     19   

Article 14

 

Suspension of Refinery Operations.

     20   

Article 15

 

Right of First Refusal.

     21   

Article 16

 

Shutdown or Idling of Refinery.

     24   

Article 17

 

Event of Default: Remedies Upon Event of Default.

     26   

Article 18

 

Indemnification.

     27   

Article 19

 

Limitation on Damages.

     29   

Article 20

 

Confidentiality.

     29   

Article 21

 

Choice of Law.

     30   

Article 22

 

Assignment.

     30   

Article 23

 

Notices.

     31   

Article 24

 

No Waiver; Cumulative Remedies.

     33   

Article 25

 

Nature of Transaction and, Relationship of Parties.

     33   

Article 26

 

Arbitration Provision.

     33   

Article 27

 

General.

     34   

 

i


Exhibit A

 

Ancillary Services Fees

  

Exhibit B

 

Product and Product Quality

  

Exhibit C

 

Nomination and Scheduling; Railcar Specifications

  

Exhibit D

 

Designated Refinery Assets

  

 

ii


DELAWARE CITY RAIL TERMINALING SERVICES AGREEMENT

This Delaware City Rail Terminaling Services Agreement (this “ Agreement ”) is made and entered into as of the Commencement Date, by and between PBF Holding Company LLC, a Delaware limited liability company (the “ Company ”), and Delaware City Terminaling Company LLC, a Delaware limited liability company (the “ Operator ”) (each referred to individually as a “ Party ” or collectively as the “ Parties ”).

WHEREAS , the Operator owns and operates a double-loop rail terminal located in Delaware City, Delaware (together with existing or future modifications or additions, the “ Terminal ”);

WHEREAS , the Parties are entering into this Agreement to provide for the rights and obligations of the Parties with respect to the Terminal; and

WHEREAS , the Parties desire to record the terms and conditions upon which the Operator shall provide terminaling services to the Company at the Terminal on a non-exclusive basis and the Operator shall serve as operator of the Terminal and bailee of all Products in the custody of the Operator and owned or held by the Company or any of the Company Designees.

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

 

Article 1 Definitions and Construction.

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

Acquisition Proposal ” has the meaning specified in Section 15.3(a) .

Adjustment ” has the meaning specified in Section 3.6(a) .

Affiliate ” means, with respect to a specified Person, any other Person controlling, controlled by or under common control with that first Person. As used in this definition, the term “control” includes (a) with respect to any Person having voting securities or the equivalent and elected directors, managers or Persons performing similar functions, the ownership of or power to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the power to vote in the election of directors, managers or Persons performing similar functions, (b) ownership of 50% or more of the equity or equivalent interest in any Person and (c) the ability to direct the business and affairs of any Person by acting as a general partner, manager or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, the Company and its subsidiaries (other than PBF Logistics LP and its subsidiaries), on the one hand, and PBF Logistics LP and its subsidiaries (including the Operator), on the other hand, shall not be considered Affiliates of each other.

Agreement ” has the meaning specified in the preamble to this document.

 

1


Ancillary Services ” means the services to be provided by the Operator to the Company at the Terminal that are set forth on Exhibit A , as well as any other ancillary services requested in accordance with Section 3.4 .

Ancillary Services Fees ” means, for any month during the Term, the fees set forth on Exhibit A , to be paid by the Company pursuant to Section 3.4 during that month for Ancillary Services.

Applicable Law ” means any applicable statute, law, regulation, Environmental Law, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by, any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including all of the terms and provisions of the applicable common law of such Governmental Authority), as interpreted and enforced at the time in question.

Arbitrable Dispute ” means any and all disputes, controversies and other matters in question between the Operator, on the one hand, and the Company, on the other hand, arising under or in connection with this Agreement.

Barrel ” means forty-two (42) net U.S. gallons, measured at 60° F and 1 atmospheric pressure.

bpd ” means barrels per day.

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, State of New Jersey or the State of Delaware.

Capital Expenditure ” means any expenditure incurred to acquire or upgrade a fixed asset.

Change in Law ” has the meaning specified in Section 3.6(a) .

Change of Control ” means PBF Energy Company LLC or any of its majority owned direct or indirect subsidiaries ceases to control the general partner of PBF Logistics LP.

Claimant ” has the meaning specified in Article 26 .

Commencement Date ” means May 14, 2014.

Company ” has the meaning specified in the preamble to this Agreement.

Company Designee ” means, collectively, each Person designated by the Company, including any Person acting as an intermediator of all or any portion of the Products or any third party.

 

2


Company Indemnitees ” has the meaning specified in Section 18.1 .

Company Inspectors ” has the meaning specified in Section 7.1 .

Company’s Share ” means a number, expressed as a percentage, equal to the quotient of (a) the greater of (i) the total Barrels throughput by the Company and any Company Designee at the Terminal, in the aggregate, during the sixth-month period preceding the date of determination or (ii) the Minimum Throughput Commitment during such period, and (b) the total Barrels throughput by all Persons at the Terminal during such period.

Confidential Information ” means all information, documents, records and data (including this Agreement, except to the extent required to be made public in a filing with the Securities and Exchange Commission or another Governmental Authority or pursuant to the rules and regulations of any national securities exchange) that a Party furnishes or otherwise discloses to the other Party (including any such items furnished prior to the execution of this Agreement), together with all analyses, compilations, studies, memoranda, notes or other documents, records or data (in whatever form maintained, whether documentary, computer or other electronic storage or otherwise) prepared by the receiving Party which contain or otherwise reflect or are generated from such information, documents, records and data; provided , however , that the term “ Confidential Information ” does not include any information that (a) at the time of disclosure or thereafter is or becomes generally available to or known by the public (other than as a result of a disclosure by the receiving Party), (b) is developed by the receiving Party without reliance on any Confidential Information or (c) is or was available to the receiving Party on a nonconfidential basis from a source other than the disclosing Party that, insofar as is known to the receiving Party after reasonable inquiry, is not prohibited from transmitting the information to the recipient by a contractual, legal or fiduciary obligation to the disclosing Party.

Contract Quarter ” means a three-month period that commences on January 1, April 1, July 1 or October 1, and ends on March 31, June 30, September 30 or December 31, respectively, except that the initial Contract Quarter shall commence on the Commencement Date and end on June 30, 2014 and the final Contract Quarter shall end on the last day of the Term.

Contract Year ” means a year that commences on January 1 and ends on the last day of December of such year, except that the initial Contract Year shall commence on the Commencement Date and the final Contract Year shall end on the last day of the Term.

control ” (including with correlative meaning, the term “ controlled by ”) means, as used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

Defaulting Party ” has the meaning specified in Section 17.2 .

Designated Refinery Assets ” has the meaning specified in Section 16.1 .

Disposition Notice ” has the meaning specified in Section 15.3(a) .

 

3


Environmental Law ” means all federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally enforceable requirements and rules of common law now or hereafter in effect, relating to pollution or protection of human health and the environment, safety, and occupational health, including the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Clean Water Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, OSHA, and other similar federal, state or local health and safety, and environmental conservation and protection laws, each as amended from time to time.

Environmental Permit ” means any permit, approval, identification number, license, registration, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law.

ET ” means the prevailing time in the Eastern time zone.

Event of Default ” has the meaning specified in Section 17.1 .

Excess Throughput ” has the meaning specified in Section 3.3 .

First ROFR Acceptance Deadline ” has the meaning specified in Section 15.3(a) .

Force Majeure ” means acts of God, strikes, lockouts or other industrial disturbances, acts of a public enemy, wars, terrorism, blockades, insurrections, riots, storms, floods, interruptions in the ability to have safe passage in navigable waterways or rail lines, washouts, other interruptions caused by acts of nature or the environment, arrests, the order of any court or Governmental Authority claiming or having jurisdiction while the same is in force and effect, civil disturbances, explosions, fires, leaks, releases, breakage, accident to machinery, vessels, storage tanks or lines of pipe or rail lines, inability to obtain or unavoidable delay in obtaining material or equipment, inability to obtain or distribute Products, feedstocks, other products or materials necessary for operation because of a failure of third-party pipelines or rail lines or any other causes whether of the kind herein enumerated or otherwise not reasonably within the control of the Party claiming suspension and which by the exercise of commercially reasonable efforts such Party is unable to prevent or overcome; provided , however , a Party’s inability to perform its economic obligations hereunder shall not constitute an event of Force Majeure.

Force Majeure Notice ” has the meaning specified in Section 13.1 .

Force Majeure Party ” has the meaning specified in Section 13.1 .

Force Majeure Period ” has the meaning specified in Section 13.1 .

Governmental Authority ” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

 

4


Hart-Scott-Rodino Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Index Change ” means the Producer Price Index is no longer published or the method of calculating the Producer Price Index is changed so that the Producer Price Index no longer reflects general increases in prices in the broad United States economy.

Initial Term ” has the meaning specified in Section 2.1 .

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, cause of action, equitable or injunctive relief, or judicial or administrative order and any Costs arising from compliance or non-compliance with Environmental Law.

Minimum Throughput Capacity ” means, with respect to each Contract Quarter, an aggregate amount of throughput capacity equal to 85,000 bpd of Products, multiplied by the number of calendar days in such Contract Quarter; provided , however , that from the Commencement Date through September 30, 2014, which for the purposes of this Agreement shall be treated as one Contract Quarter, the Minimum Throughput Capacity shall be an aggregate amount of throughput capacity equal to 75,000 bpd of Products, multiplied by the number of calendar days in such Contract Quarter.

Minimum Throughput Commitment ” means, with respect to each Contract Quarter, an aggregate amount of Products received at the Terminal equal to at least 85,000 bpd of Products, multiplied by the number of calendar days in such Contract Quarter; provided , however , that from the Commencement Date through September 30, 2014, which for the purposes of this Agreement shall be treated as one Contract Quarter, the Minimum Throughput Commitment shall be an aggregate amount of Products received at the Terminal equal to 75,000 bpd of Products, multiplied by the number of calendar days in such Contract Quarter.

Nomination” has the meaning specified in Exhibit C .

Non-Defaulting Party ” means the Party other than the Defaulting Party.

Notice Period ” has the meaning specified in Section 14.1 .

Off-Specification Product ” means Product that fails to meet the specifications set forth in Exhibit B .

Offer Price ” has the meaning specified in Section 15.3(a) .

Omnibus Agreement ” means that Omnibus Agreement, dated as of the date hereof, by and among the Company, PBF Energy Company LLC, PBF Logistics GP LLC, and PBF Logistics LP.

 

5


Operation and Management Services and Secondment Agreement ” means that Operation and Management Services and Secondment Agreement, dated as of the date hereof, by and among the Company, Delaware City Refining Company LLC, Toledo Refining Company LLC, PBF Logistics GP LLC, PBF Logistics LP, and the Operator.

Operator ” has the meaning specified in the preamble to this Agreement.

Operator Indemnitees ” has the meaning specified in Section 18.2 .

OSHA ” means Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq.

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

Permitted Lien ” means (a) liens for real estate taxes, assessments, sewer and water charges or other governmental charges and levies not yet delinquent; (b) liens for taxes, assessments, judgments, governmental charges or levies, or claims not yet delinquent or the non-payment of which is being diligently contested in good faith by appropriate proceedings and for which adequate reserves have been set aside; (c) liens of mechanics, laborers, suppliers, workers and materialmen incurred in the ordinary course of business for sums not yet due or being diligently contested in good faith; and (d) liens incurred in the ordinary course of business in connection with worker’s compensation and unemployment insurance or other types of social security benefits.

Permanent Refinery Shutdown ” has the meaning specified in Section 16.1(a) .

Person ” means any individual, corporation, partnership, limited 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.

Prime Rate ” means the rate of interest quoted in The Wall Street Journal , Bonds, Rates & Yields Section as the Prime Rate.

Producer Price Index ” shall have the meaning ascribed to such term by the United States Bureau of Labor Statistics.

Product ” means any of the products listed on Exhibit B , as from time to time amended by mutual agreement of the Parties.

Proposed Transferee ” has the meaning specified in Section 15.3(a) .

Prudent Industry Practice ” means, as of the relevant time, those methods and acts generally engaged in or applied by the refining, pipeline or terminaling industries (as applicable) in the United States that, in the exercise of reasonable judgment in light of the circumstances known at the time of performance, would have been expected to accomplish the desired result at a reasonable cost consistent with functionality, reliability, safety and expedition with due regard for health, safety, security and environmental considerations. Prudent Industry Practice is not

 

6


intended to be limited to the optimum practices, methods or acts to the exclusion of others, but rather is intended to include reasonably acceptable practices, methods and acts generally engaged in or applied by the refining, pipeline or terminaling industries (as applicable) in the United States.

Receiving Party Personnel ” has the meaning specified in Section 20.4 .

Refinery ” means the petroleum refinery located in Delaware City, Delaware owned and operated by the Company’s Affiliates.

Refinery Asset Option Notice ” has the meaning specified in Section 16.1(b) .

Refinery Asset Option Period ” has the meaning specified in Section 16.1(f) .

Refinery Asset Purchase Option ” has the meaning specified in Section 16.1(b) .

Renewal Term ” has the meaning specified in Section 2.1 .

Required Permits ” has the meaning specified in Section 10.1 .

Respondent ” has the meaning specified in Article 26 .

Restoration ” has the meaning specified in Section 6.2(b) .

ROFR Acceptance Deadlines ” has the meaning specified in Section 15.3(a).

ROFR Asset ” means the Terminal and each asset that comprises the Terminal and is material to the operation thereof.

ROFR Governmental Approval Deadline ” has the meaning specified in Section 15.3(c) .

ROFR Response ” has the meaning specified in Section 15.3(a) .

Sale Assets ” has the meaning specified in Section 15.3(a) .

Second ROFR Acceptance Deadline ” has the meaning specified in Section 15.3(a) .

Services ” has the meaning specified in Section 3.1 .

Shortfall ” has the meaning specified in Section 3.7 .

Shortfall Payment ” has the meaning specified in Section 3.7 .

Special Damages ” has the meaning specified in Article 19 .

Supplier Inspector ” means any Person selected by the Company to perform any and all inspections required by the Company or the Company Designee in a commercially reasonable manner at the Company’s own cost and expense that is acting on behalf of the Company or the Company Designee and that (a) is a Person who performs sampling, quality analysis and quantity

 

7


determination or similar services of the Products purchased and sold under any agreement between the Company (or its Affiliates) and the Company Designee, (b) is not an Affiliate of any Party and (c) in the reasonable judgment of the Company, is qualified and reputed to perform its services in accordance with Applicable Law and Prudent Industry Practice.

Suspension Notice ” has the meaning specified in Section 14.1 .

Term ” has the meaning specified in Section 2.1 .

Terminal ” has the meaning specified in the recitals.

Terminal Maintenance ” has the meaning specified in Section 6.2(a) .

Terminaling Service Fee ” has the meaning set forth in Section 3.1 .

Termination Notice ” has the meaning specified in Section 13.2 .

Transfer ” means to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of, whether in one or a series of transactions.

Section 1.2 Construction of Agreement .

(a) Unless otherwise specified, all references herein are to the Articles, Sections and Exhibits of this Agreement and all Exhibits are incorporated herein.

(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.

(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 reenacted from time to time.

 

8


(i) 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.

Section 1.3 No Presumption . 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 Term.

Section 2.1 Term . The initial term of this Agreement (the “ Initial Term ”) shall commence at 12:00 a.m., ET, on the Commencement Date and shall continue until 11:59 p.m., ET, on the first December 31 following the seventh (7 th ) anniversary of the Commencement Date. Thereafter, subject to the last sentence of this paragraph, the Company shall have a unilateral option to extend this Agreement for two additional five (5) year periods on the same terms and conditions set forth herein (each, a “ Renewal Term ”). The Initial Term and the Renewal Terms are sometimes referred to collectively herein as the “ Term .” In order to exercise its option to extend this Agreement for a Renewal Term, the Company shall notify the Operator in writing not less than twelve (12) months prior to the expiration of the Initial Term or any Renewal Term, as applicable.

Section 2.2 Termination . The Parties may terminate this Agreement prior to the end of the Term (but are under no obligation to do so) (a) as they may mutually agree in writing, (b) pursuant to a Termination Notice in accordance with Section 13.2 , (c) pursuant to a Suspension Notice in accordance with Section 14.1 , (d) pursuant to a default in accordance with Section 17.2 or (e) pursuant to Section 3.6(c) .

 

Article 3 Terminaling; Ancillary Services.

Section 3.1 Services . Subject to the terms of this Agreement, the Operator shall provide the following services (the “ Services ”) to the Company hereunder: receipt, handling, throughput, custody and delivery of the Company’s (and its subsidiaries’ and the Company Designee’s) Product at the Terminal. During each Contract Quarter during the Term, the Company (on its own behalf and on behalf of its subsidiaries and the Company Designee) shall throughput or, if it does not throughput, pay for in accordance with Section 3.7 , in the aggregate, at least the Minimum Throughput Commitment at the Terminal and the Operator shall make available to the Company throughput capacity at the Terminal (and provide the Services as reasonably requested by the Company in connection therewith subject to the terms hereof), at all times sufficient to allow the Company to throughput the Minimum Throughput Commitment at the Terminal. The Operator shall cooperate with the Company or the Company Designee, and the Company shall (and shall cause the Company Designee to) cooperate with the Operator, to determine throughput of Product hereunder based on the number of railcars unloaded or any other commercially reasonable method mutually agreed to by the Parties.

Section 3.2 Terminaling Service Fee . The Company shall pay a terminaling services fee (the “ Terminaling Service Fee ”) for the volumes of Products it actually throughputs at the Terminal of (i) $2.00 per Barrel for all throughput up to the Minimum Throughput Commitment, and (ii) $0.50 per Barrel for all throughput volumes in excess of the Minimum Throughput Commitment.

 

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Section 3.3 Excess Throughput . The Company shall have the right to throughput volumes in excess of its Minimum Throughput Commitment (“ Excess Throughput ”), up to the then-available capacity of the Terminal, as reasonably determined by the Operator in good faith at any time (after giving effect to the physical and operational constraints of the Terminal and the capacity contractually committed to third parties). In accordance with Section 3.1 , the Company shall pay the Operator the applicable per-Barrel Terminaling Service Fee for any Excess Throughput.

Section 3.4 Ancillary Services . Upon request by the Company, the Operator shall provide Ancillary Services to the Company at the Terminal. From time-to-time, the Company may request that the Operator provide additional Ancillary Services to the Company at the Terminal upon customary terms in accordance with Prudent Industry Practice so long as such additional Ancillary Services are reasonably related to the Services or existing Ancillary Services; provided , however , that in the event any requested additional Ancillary Service requires the Operator to make Capital Expenditures, such Capital Expenditures shall be subject to Section 3.10(b) and the Operator shall not be required to provide such additional Ancillary Service until the Operator is able to do so after using reasonable efforts in compliance with Section 3.10(b) ; provided , further , the Operator shall not be required to perform any additional Ancillary Service if it reasonably believes the performance thereof will materially adversely interfere with, or be detrimental to, the operation of the Terminal. The Company shall pay the Ancillary Services Fees listed on Exhibit A for such services. The Company may, at any time on reasonable prior notice, revoke or modify any instructions it has previously given, whether such previous instructions relate to a specific Service or Ancillary Service or are instructions relating to an ongoing Service or Ancillary Service. The Operator shall not be required to perform any requested Service or Ancillary Service if it reasonably believes such Service or Ancillary Service violates Applicable Law.

Section 3.5 Annual Fee Escalator . All fees set forth in this Agreement, including the Terminaling Service Fee and the Ancillary Services Fees, shall be adjusted on January 1 of each Contract Year, commencing on January 1, 2015, (a) by an amount equal to the increase or decrease, if any, in the Producer Price Index during the previous Contract Year and (b) by an amount equal to the increase, if any, in the individual out-of-pocket costs that increase greater than the Producer Price Index reasonably incurred by the Operator in connection with providing the Services and Ancillary Services; provided , however , that no fee shall be decreased below the initial fee for such service provided in this Agreement; provided , further , that the Operator shall use commercially reasonable efforts to mitigate any such rise in out-of-pocket costs incurred by the Operator in connection with providing the Services and Ancillary Services. In the event of an Index Change, the Company and the Operator shall negotiate in good faith to agree on a new index that gives comparable protection against inflation that the Producer Price Index gave as of the date hereof, and, for all periods following the date of such Index Change, such new index shall replace the Producer Price Index for all purposes herein. If the Company and the Operator are unable to agree, a new index will be determined by arbitration in accordance with Article 26 and, for all periods following the date of such Index Change, such new index shall replace the Producer Price Index for all purposes herein.

 

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Section 3.6 Change in Law .

(a) In the event that any applicable existing laws, codes, regulations, permit conditions or other authorizations are amended or new laws, codes, regulations, permit conditions or other authorizations are enacted or promulgated after the Commencement Date that require a material Capital Expenditure in the Terminal, or the acquisition of a permit from a Governmental Authority, in each case, in order to provide the Services and Ancillary Services (a “ Change in Law ”), the Operator may, by written notice to the Company, request to negotiate an adjustment (an “ Adjustment ”) in the Terminaling Service Fee or other fees and charges paid hereunder to cover the Company’s Share of the reasonable, incremental, out-of-pocket operating and maintenance costs the Operator would incur to comply with the Change in Law, including a return of capital expended and a return on such capital at a rate of return of 11% per annum, amortized over the remaining Term.

(b) If the Operator requests to negotiate an Adjustment pursuant to Section 3.6(a) : (i) the Operator shall provide the Company with complete access (subject to reasonable confidentiality provisions) to information and documentation regarding such proposed Adjustment, including the nature and cost of the contemplated improvements or permit, as applicable, the options for financing or otherwise amortizing such cost, the Operator’s assessment that such improvements are the most feasible means of complying with the Change in Law and the manner in which the Company’s Share of such costs are determined; and (ii) the Parties shall be obligated to negotiate in good faith to agree to an Adjustment as described in Section 3.6(a) .

(c) If, despite good faith negotiations, the Parties are unable to agree to an Adjustment pursuant to Section 3.6(a) in sufficient time for the Operator to take such action as shall be necessary to comply with the Change in Law, then the amount of such fee increases will be determined by arbitration in accordance with Article 26 , and such fee increases will be effective as of the effective time of such Change in Law; provided , however , that in the event the fees paid hereunder increase in the aggregate as a result of Changes in Law by more than 200%, then the Company may terminate this Agreement.

Section 3.7 Shortfall Payments . If, during any Contract Quarter, the Company throughputs aggregate volumes less than the Minimum Throughput Commitment, as adjusted pursuant to Section 6.2 , for such Contract Quarter (a “ Shortfall ”), then (in addition to Terminaling Service Fee) the Company shall pay the Operator an amount (a “ Shortfall Payment ”) equal to the Terminaling Service Fee multiplied by the difference between (a) the Minimum Throughput Commitment and (b) the volume of Products actually delivered to the Terminal by the Company during the applicable Contract Quarter. The Parties acknowledge and agree that there shall be no carry-over of deficiency volumes with respect to the Minimum Throughput Commitment and the payment by the Company of the Shortfall Payment shall relieve the Company of any obligation to meet such Minimum Throughput Commitment for the relevant Contract Quarter. The Parties further acknowledge and agree that there shall not be any carry-over of volumes in excess of the Minimum Throughput Commitment to any subsequent Contract Quarter.

Section 3.8 Invoices . The Operator shall invoice the Company monthly (or, in the case of any Shortfall Payments, quarterly) for all fees and payments under this Agreement. The Company will make payments to the Operator on a monthly (or, in the case of any Shortfall

 

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Payments, quarterly) basis during the Term with respect to amounts due to the Operator under this Agreement in the prior month (or, in the case of any Shortfall Payments, Contract Quarter) ten (10) days after its receipt of such invoice. Any past due payments owed to the Operator hereunder shall accrue interest, payable on demand, at the Prime Rate plus 400 basis points from the due date of the payment through the actual date of payment. Payment of any fee or Shortfall Payment pursuant to this Section 3.8 shall be made by wire transfer of immediately available funds to an account designated in writing by the Operator. If any such fee shall be due and payable on a day that is not a Business Day, such payment shall be due and payable on the next succeeding Business Day.

Section 3.9 Operating Hours . The Operator agrees to keep the Terminal open for receipt and redelivery of the Company’s and the Company Designee’s Products twenty-four (24) hours a day, seven (7) days a week.

Section 3.10 Regulatory Costs; Reimbursement .

(a) Taxes. The Company shall reimburse the Operator for all taxes that the Operator incurs in connection with this Agreement unless prohibited by Applicable Law.

(b) Capital Expenditures. The Company may request that the Operator make certain Capital Expenditures at the Terminal and the Operator shall make such Capital Expenditures; provided , however , that the Operator shall not be required to make any such Capital Expenditure if such Capital Expenditure would materially adversely affect the operation of the Terminal, as determined in the reasonable discretion of the Operator. The Company shall reimburse the Operator for the Company’s Share of any such Capital Expenditure. For the avoidance of doubt, except as provided in the Omnibus Agreement or the Operation and Management Services and Secondment Agreement, any maintenance required for the Operator to continue to provide the services specified hereunder shall be paid for by the Operator.

(c) Payment Terms. All of the foregoing reimbursements shall be made in accordance with the payment terms set forth in Section 3.8 herein.

Section 3.11 Third-Party Arrangements . The Operator may throughput volumes for third parties; provided , however , that such arrangements do not prevent the Operator from fulfilling its obligations to the Company hereunder, including the obligation to make the Minimum Throughput Capacity available to the Company during the Term. Nothing herein shall be deemed to provide the Company with exclusive rights to services at the Terminal.

 

Article 4 Custody, Title and Risk of Loss.

Section 4.1 Title . Subject to Section 22.2 , the Company or the Company Designee shall at all times during the Term retain title to the Products handled or throughput by the Company or the Company Designee at the Terminal, and such Products shall remain the Company’s or the Company Designee’s exclusive property. The Company hereby represents that, at all times during the Term, the Company or the Company Designee holds exclusive title to the Products throughput or handled by the Company at the Terminal; provided , however , that each of the Company and the Company Designee may at any time permit liens on the Company’s or the Company Designee’s Products at the Terminal.

 

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Section 4.2 Compliance with Laws . During the time any Products are held or throughput at the Terminal, the Operator, in its capacity as operator of the Terminal shall be solely responsible for compliance with (and the Operator shall comply with) all Applicable Laws pertaining to the possession, handling, use and processing of such Products at the Terminal.

Section 4.3 Volumetric Losses and Gains . Subject to the other provisions in this Agreement, title and risk of loss to all of the Products handled or throughput by the Company or the Company Designee at the Terminal shall remain at all times with the Company or the Company Designee, as applicable. Unless the Operator experiences a spill or other release of Product while Product is in the Operator’s custody, all volumetric losses and gains in Product shall be for the Company’s or the Company Designee’s account, as applicable.

Section 4.4 Custody . During the Term, the Operator shall hold all Products at the Terminal solely as bailee, and agrees that when any such Products are redelivered to the Company or the Company Designee, the Company or the Company Designee shall have good title thereto (to the extent the Company had good title prior to delivery at the Terminal) free and clear of any liens, security interests, encumbrances and claims of any kind whatsoever created or caused to be created by the Operator, other than Permitted Liens; provided , however , that notwithstanding anything herein to the contrary the Operator hereby waives, relinquishes and releases any and all liens, including, any and all warehouseman’s liens, custodian’s liens, rights of retention or similar rights under all applicable laws, which the Operator would or might otherwise have under or with respect to any Products handled hereunder. During the Term, none of the Operator or any of its Affiliates shall (and the Operator shall not permit any of its Affiliates or any other Person to) use any such Products for any purpose. Solely in its capacity as bailee, the Operator shall have custody of Product throughput under this Agreement from the time the locomotive crew transporting such Product to the Terminal has disembarked from, and the Operator’s crew has embarked onto, the locomotive used to transfer railcars to the Terminal until such time that the Products pass the outlet flange of the Terminal.

 

Article 5 Specification and Contamination.

Section 5.1 Delivery Specifications .

(a) The Company shall not (and shall cause the Company Designee to not) deliver to the Terminal any Off-Specification Product; provided , however , that in the event Off-Specification Product is delivered by the Company or the Company Designee to the Terminal, and the Company or the Company Designee fails to instruct the Operator to return such Off-Specification Product to the Company or the Company Designee, as applicable, the Operator shall provide the Services to the Company or the Company Designee, as applicable, and the Company will receive on its or the Company Designee’s behalf, such Off-Specification Product at its own expense; provided , further , that in the event Off-Specification Product is delivered by the Company or the Company Designee to the Terminal and the Company or the Company Designee instructs the Operator to return such Off-Specification Product to the Company or the Company Designee, as applicable, the Operator shall return such Off-Specification Product to the Company (on its or the Company Designee’s behalf) at the Company’s own expense. In the event Off-Specification Product is delivered by the Company or the Company Designee, and in the reasonable opinion of the Operator, the Services are unable to be provided as a result of the

 

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Off-Specification Product (whether due to a failure to comply with law, safety considerations or otherwise), the Operator shall notify the Company and the Company shall be responsible for taking possession of such Off-Specification Product without the Services being provided.

(b) The Company shall not (and shall cause the Company Designee to not) deliver to the Terminal any Product on any railcar if such railcar is broken, in disrepair, or otherwise cannot be unloaded consistent with Prudent Industry Practice; provided , however , that in the event Product is delivered by the Company or the Company Designee on a railcar that is broken or in disrepair but not to an extent which precludes the Operator from providing the Services, the Operator shall provide the Services and shall notify the Company, and the Company or the Company Designee, as applicable, shall make any necessary repairs to the railcar; provided , further , that the Company shall be responsible for removing any railcar from the Terminal if, in the reasonable opinion of the Operator, the Services cannot be provided due to the railcar’s status as broken or in disrepair.

Section 5.2 Offloading Specifications . If all Product meets the relevant specifications set forth in Exhibit B when it enters the Terminal, it is the responsibility of the Operator to ensure that all Products leaving the Terminal shall meet the same relevant specifications, and shall not leave the Terminal with different specifications.

Section 5.3 Contamination . The Operator shall use at least Prudent Industry Practice to ensure that no Products shall be contaminated with scale or other materials, chemicals, water or any other impurities.

 

Article 6 Condition and Maintenance of the Terminal.

Section 6.1 Interruption of Service . The Operator shall use commercially reasonable efforts to (i) minimize the interruption of service at the Terminal, (ii) minimize the impact of any such interruption on the Company and the Company Designee and (iii) notwithstanding any such interruption of service, make the Terminal available to the Minimum Throughput Capacity. The Operator shall inform the Company at least sixty (60) days in advance (or promptly, in the case of an unplanned interruption) of any anticipated partial or complete interruption of service at the Terminal, including relevant information about the nature, extent, cause and expected duration of the interruption and the actions the Operator is taking to resume full operations; provided , however , that the Operator shall not have any liability for any failure to notify, or delay in notifying, the Company of any such matters except to the extent the Company has been materially damaged by such failure or delay.

Section 6.2 Maintenance and Repair Standards .

(a) Subject to Article 13 , during the Term the Operator shall maintain the Terminal with sufficient aggregate capacity to throughput a volume of the Company’s Products at least equal to the Minimum Throughput Capacity; provided , however , that the Operator’s obligations may be temporarily suspended during the occurrence of, and for the entire duration of, routine repair and maintenance consistent with Prudent Industry Practice that prevents the Operator from providing the Minimum Throughput Capacity (“ Terminal Maintenance ”) so long as the Operator has complied with its obligations set forth in Section 6.1 . In the event the Terminal Maintenance is

 

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not as a result of Force Majeure, the Parties shall reasonably cooperate with each other so as to (i) ensure that such Terminal Maintenance does not unnecessarily interfere with any of the Company’s or the Company Designee’s purchase or sale commitments, (ii) ensure that such Terminal Maintenance otherwise accommodates, to the extent reasonably practicable, other commercial or market considerations that the Company deems relevant and (iii) reasonably minimize the effect of such Terminal Maintenance on the Services and the Ancillary Services.

(b) To the extent the Company is prevented for seven (7) or more days in any Contract Quarter from throughputting volumes at the Terminal equal to at least the Minimum Throughput Commitment for reasons caused by the Operator (or any of its employees, agents or contractors) other than Force Majeure and other than causes due to actions of the Company or the Company Designee (and any of their respective contractors, employees or representatives excluding the Operator and its employees, agents and representatives), then the Minimum Throughput Commitment shall be proportionately reduced to the extent of the difference between the Minimum Throughput Capacity and the amount that the Operator can effectively throughput at the Terminal (prorated for the portion of the Contract Quarter during which the Minimum Throughput Capacity was unavailable) regardless of whether actual throughput amounts prior to the reduction were below the Minimum Throughput Commitment. At such time as the Operator is capable of throughputting volumes equal to at least the Minimum Throughput Commitment at the Terminal, the Company’s obligation to throughput the full Minimum Throughput Commitment shall be restored as of such time. To the extent the Company is prevented for seven (7) or more days in any Contract Quarter from throughputting volumes at the Terminal equal to at least the Minimum Throughput Commitment, other than due to a Force Majeure event, and the throughput at the Terminal falls below the Minimum Throughput Capacity as described above in this paragraph (b), the Operator shall make all commercially reasonable repairs at the Terminal to restore the capacity of the Terminal to that required for throughput of the Minimum Throughput Capacity (“ Restoration ”). All of such Restoration shall be at the Operator’s cost and expense, unless any damage creating the need for such repairs was caused by the negligence or willful misconduct of the Company, the Company Designee or their respective contractors, employees, agents (excluding for the avoidance of doubt, the Operator and its contractors, employees and agents) or customers, in which case such Restoration shall be at the Company’s cost and expense to the extent caused by the negligence or willful misconduct of the Company, the Company Designee or their respective employees, agents or customers.

 

Article 7 Inspection, Access and Audit Rights.

Section 7.1 Inspection . At any reasonable times during normal business hours and upon reasonable prior notice, the Company, the Company Designee and their respective representatives (including one or more Supplier Inspector, collectively, the “ Company Inspectors ”) shall have the right to enter and exit the Operator’s premises in order to have access to the Terminal, to observe the operations of the Terminal and to conduct such inspections as the Company or the Company Designee may wish to have performed in connection with this Agreement, including to enforce its rights and interests under this Agreement; provided , however , that (a) each of the Company Inspectors shall follow routes and paths to be reasonably designated by the Operator or security personnel retained by the Operator, (b) each of the Company Inspectors shall observe all security, fire and safety regulations while in, around or about the Terminal, (c) when accessing the facilities of the Operator, the Company Inspectors shall at all times comply

 

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with Applicable Law and such safety directives and guidelines as may be furnished to the Company or the Company Designee by the Operator by any means (including in writing, orally, electronically or through the posting of signs) from time to time, and (d) the Company or the Company Designee shall be liable for any personal injury to its representatives or any damage caused by such Company Inspectors in connection with such access to the Terminal. Without limiting the generality of the foregoing, the Operator shall regularly grant the Company Inspectors such access from the last day of each month until the third (3 rd ) Business Day of the ensuing month. Notwithstanding any of the foregoing, if an Event of Default with respect to the Operator has occurred and is continuing, the Company Inspectors shall have unlimited and unrestricted access to the Terminal, for so long as such Event of Default continues.

Section 7.2 Access . The Company, the Company Designee and their respective representatives, upon reasonable notice and during normal working hours, shall have access to the accounting records and other documents maintained by the Operator, or any of its contractors and agents, which relate to this Agreement, and shall have the right to audit such records at any reasonable time or times during the Term and for a period of up to two (2) years after termination of this Agreement. The Company or the Company Designee shall have the right to conduct such audit no more than once per calendar quarter and each audit shall be limited in time to no more than the present and prior two (2) calendar years. Claims as to defects in quality shall be made by written notice within ninety (90) days after the delivery in question or shall be deemed to have been waived. The right to inspect or audit such records shall survive termination of this Agreement for a period of two (2) years following the end of the Term. The Operator 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 end of the Term. Additionally, the Operator shall make available a copy of any meter calibration report, to be available for inspection upon reasonable request by the Company or the Company Designee at the Terminal following any calibration. Notwithstanding any of the foregoing, if an Event of Default with respect to the Operator has occurred and is continuing, the Company Inspectors shall have unlimited and unrestricted access to the accounting records and other documents maintained by the Operator with respect to the Terminal, for so long as such Event of Default continues.

 

Article 8 Scheduling.

The Operator shall provide the Company and the Company Designee non-discriminatory, priority access rights at the Terminal to throughput the Company’s and the Company Designee’s Products up to the Minimum Throughput Capacity. All deliveries, receipts, handling and throughput of Product hereunder shall be made in strict accordance with the Operator’s current reasonable operating, scheduling and nomination procedures for the Terminal, which (a) the Operator shall provide to the Company on the date hereof, (b) the Operator shall not materially modify without the prior written consent of the Company, not to be unreasonably withheld, modified or delayed; provided , however , that the Operator may make any modifications it reasonably deems necessary to comply with or observe any Applicable Law or for health, safety, environmental, security or other similar concerns consistent with Prudent Industry Practice, and (c) shall allow the throughput of the grades and qualities of Product specified in Exhibit B .

 

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Article 9 [Intentionally Omitted]

 

Article 10 Additional Covenants.

Section 10.1 Required Permits . During the Term, unless the Company has agreed to maintain such for the benefit of the Operator, the Operator shall, at its sole cost and expense (directly or through one of its or the Company’s Affiliates), obtain, apply for, maintain, monitor, renew, and modify, as appropriate, any license, authorization, certification, filing, recording, permit, waiver, exception, variance, franchise, order or other approval with or of any Governmental Authority pertaining or relating to the operation of the Terminal (the “ Required Permits ”) as currently operated; provided , however , that if any Required Permits require the signature of, or any action by, the Company or the Company Designee, the Company shall reasonably cooperate with the Operator (at the Operator’s expense) so that the Operator may obtain and maintain such Required Permits. The Operator shall not do anything in connection with the performance of its obligations under this Agreement that causes a termination or suspension of the Required Permits.

Section 10.2 Additional Operator Covenants . The Operator hereby:

(a) (i) confirms that it will post at the Terminal such reasonable placards as the Company or the Company Designee, as applicable, requests stating that the Company or the Company Designee is the owner of specific Products held at the Terminal; (ii) agrees that it will take all actions necessary to maintain such placards in place for the Term; and (iii) agrees to furnish documents reasonably acceptable to the Company, the Company Designee and their respective lenders and intermediators and to cooperate with the Company in ensuring and demonstrating that Product titled in the Company’s or the Company Designee’s name shall not be subject to any lien on the Terminal;

(b) acknowledges and agrees that the Company or the Company Designee may file a UCC-1 or other financing statement with respect to the Products handled or throughput at the Terminal, and the Operator shall cooperate with the Company in executing such financing statements as the Company or the Company Designee deems necessary or appropriate;

(c) agrees that, subject to Section 4.3 , no loss allowances shall be applied to the Products handled or throughput at the Terminal;

(d) agrees to maintain all necessary leases, easements, licenses and rights-of-way necessary for the operation and maintenance of the Terminal; and

(e) agrees that, in the event of any Product spill, leak or discharge or any other environmental pollution caused by or in connection with the use of the Terminal, the Operator shall promptly commence containment or clean-up operations as required by any Governmental Authorities or Applicable Law or as the Operator deems appropriate or necessary and shall notify or arrange to notify the Company or the Company Designee immediately of any such spill, leak or discharge and of any such operations.

 

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The Company and the Company Designee shall take all reasonable steps to cooperate with the Operator in connection with the Operator’s performance of each of the covenants in this Section 10.2 , in each case, at the Operator’s sole expense.

Section 10.3 Additional Company Covenants . The Company hereby agrees:

(a) to replace or repair, at its own expense, any part of the Terminal that is destroyed or damaged through any negligence or willful misconduct of the Company, the Company Designee (acting in such capacity), or any of their agents or employees (acting in such capacity), or any Company Inspector; and

(b) to not make any alteration, additions or improvements to the Terminal or remove any part thereof, without the prior written consent of the Operator, such consent to be at the Operator’s sole discretion.

Section 10.4 Existing Obligations . The execution of this Agreement by the Parties does not reduce any existing obligations of such Parties and does not confer any additional obligation or responsibility on the Company in connection with: (a) any existing or future environmental condition at the Terminal, including, the presence of a regulated or hazardous substance on or in environmental media at the Terminal (including the presence in surface water, groundwater, soils or subsurface strata, or air), including the subsequent migration of any such substance; (b) any Environmental Law; (c) the Required Permits; or (d) any requirements arising under or relating to any Applicable Law pertaining or relating to the ownership and operation of the Terminal.

Section 10.5 Records .

(a) Each Party shall (i) maintain the records required to be maintained by Applicable Law and shall make such records available to the other Party upon reasonable request and (ii) immediately notify the other Party of any violation or alleged violation of any Applicable Law relating to any Products throughput and handled under this Agreement and, upon request, shall provide to the other Party all evidence of environmental inspections or audits by any Governmental Authority with respect to such Products.

(b) All records or documents provided by any Party to any other Party shall, to the reasonable knowledge of the providing Party, accurately and completely reflect the facts about the activities and transactions to which they relate. Notwithstanding anything herein to the contrary, no Party shall be required to provide to the other Party any document that is determined by the disclosing Party’s legal counsel to be protected by an attorney-client privilege or attorney work product doctrine. Each Party shall promptly notify the other Party if at any time such Party has reason to believe that any records or documents previously provided to the other Party are no longer accurate or complete.

 

Article 11 Representations.

Section 11.1 Representations of the Operator . The Operator represents and warrants to the Company that (a) this Agreement, the rights obtained and the duties and obligations assumed by the Operator hereunder, and the execution and performance of this Agreement by the Operator, do not directly or indirectly violate any Applicable Law with respect to the Operator or any of its

 

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properties or assets, the terms and provisions of the Operator’s organizational documents or any agreement or instrument to which the Operator or any of its properties or assets are bound or subject; (b) the execution and delivery of this Agreement by the Operator has been authorized by all necessary action; (c) the Operator has the full and complete authority and power to enter into this Agreement and to provide the services hereunder; (d) no further action on behalf of the Operator, or consents of any other party, are necessary for the provision of services hereunder; and (e) upon execution and delivery by the Operator, this Agreement shall be a valid and binding agreement of the Operator 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).

Section 11.2 Representations of the Company . The Company represents and warrants to the Operator that (a) this Agreement, the rights obtained and the duties and obligations assumed by the Company hereunder, and the execution and performance of this Agreement by the Company, do not directly or indirectly violate any Applicable Law with respect to the Company or any of its property or assets, the terms and provisions of the Company’s organizational documents or any agreement or instrument to which the Company or any of its property or assets are bound or subject; (b) the execution and delivery of this Agreement by the Company has been authorized by all necessary action; (c) the Company has the full and complete authority and power to enter into this Agreement; and (d) upon execution and delivery by the Company, this Agreement shall be a valid and binding agreement of the Company 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).

 

Article 12 Insurance.

The Operator, directly or through one of its or the Company’s Affiliates, shall procure and maintain in full force and effect throughout the Term insurance in sufficient amounts and coverage to be in accordance with Prudent Industry Practice. Such policies shall be endorsed to name the Company and any Company Designee as a loss payee with respect to any of the Company’s or the Company Designee’s Products in the care, custody or control of the Operator.

 

Article 13 Force Majeure, Damage or Destruction.

Section 13.1 Force Majeure . In the event that a Party (the “ Force Majeure Party ”) is rendered unable, wholly or in part, by a Force Majeure event to perform its obligations under this Agreement, then such Party shall within a reasonable time after the occurrence of such event of Force Majeure deliver to the other Party written notice (a “ Force Majeure Notice ”) including full particulars of the Force Majeure event, and the obligations of the Parties, to the extent they are affected by the Force Majeure event, shall be suspended for the duration of any inability so caused; provided , however , that (a) prior to the second (2 nd ) anniversary of the Commencement Date, the Company shall be required to continue to make payments (i) for the Terminaling Service Fees for volumes actually throughput under this Agreement, (ii) for the Ancillary Services Fees, if any, for Ancillary Services performed, and (iii) for any Shortfall Payments unless, in the case of (iii), the Force Majeure event is an event that adversely affects the Operator’s ability to perform the

 

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Services (including making the Minimum Throughput Capacity available to the Company), in which case Shortfall Payments shall not be paid to the extent of the Force Majeure event’s effect on the Operator’s ability to perform the Services and the Terminaling Service Fees shall only be paid as provided under (a)(i) above, and (b) from and after the second (2 nd ) anniversary of the Commencement Date, the Company shall be required to continue to make payments (x) for the Terminaling Service Fees for volumes actually throughput under this Agreement and (y) for the Ancillary Services Fees, if any, for the Ancillary Services actually performed under this Agreement. The Force Majeure Party shall identify in such Force Majeure Notice the approximate length of time that it believes in good faith such Force Majeure event shall continue (the “ Force Majeure Period ”). The Company shall be required to pay any amounts accrued and due under this Agreement at the time of the start of the Force Majeure event. The cause of the Force Majeure event shall so far as possible be remedied with all reasonable efforts, except that no Party shall be compelled to resolve any strikes, lockouts or other industrial or labor disputes other than as it shall determine to be in its best interests. Prior to the second (2 nd ) anniversary of the Commencement Date, any suspension of the obligations of the Parties under this Section 13.1 as a result of a Force Majeure event that adversely affects the Operator’s ability to perform the services it is required to perform under this Agreement shall extend the Term for the same period of time as such Force Majeure event continues (up to a maximum of one year) unless this Agreement is terminated under Section 13.2 .

Section 13.2 Termination due to Force Majeure . If the Force Majeure Party advises in any Force Majeure Notice that it reasonably believes in good faith that the Force Majeure Period shall continue for more than twelve (12) consecutive months beyond the second (2 nd ) anniversary of the Commencement Date, then at any time after the delivery of such Force Majeure Notice, either Party may deliver to the other Party a notice of termination (a “ Termination Notice ”), which Termination Notice shall become effective not earlier than twelve (12) months after the later to occur of (a) delivery of the Termination Notice and (b) the second (2 nd ) anniversary of the Commencement Date; provided , however , that such Termination Notice shall be deemed cancelled and of no effect if the Force Majeure Period ends before the Termination Notice becomes effective, and, upon the cancellation of any Termination Notice, the Parties’ respective obligations hereunder shall resume as soon as reasonably practicable thereafter, and the Term shall be extended by the same period of time as is required for the Parties to resume such obligations. After the second (2 nd ) anniversary of the Commencement Date and following delivery of a Termination Notice, the Operator may terminate this Agreement, to the extent affected by the Force Majeure event, upon sixty (60) days prior written notice to the Company in order to enter into an agreement to provide any third party the services provided to the Company under this Agreement; provided , however , that the Operator shall not have the right to terminate this Agreement for so long as the Company continues to make Shortfall Payments.

 

Article 14 Suspension of Refinery Operations.

Section 14.1 Suspension of Refinery Operations . From and after the second (2 nd ) anniversary of the Commencement Date, in the event that the Company decides to permanently or indefinitely suspend all or substantially all crude oil refining operations at the Refinery for a period that shall continue for at least twelve (12) consecutive months, the Company may provide written notice to the Operator of the Company’s intent to terminate this Agreement (the “ Suspension Notice ”). Such Suspension Notice shall be sent at any time (but not prior to the second (2 nd )

 

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anniversary of the Commencement Date) after the Company has notified the Operator of such suspension and, upon the expiration of the period of twelve (12) months (which may run concurrently with the twelve (12) month period described in the immediately preceding sentence) following the date such notice is sent (the “ Notice Period ”), this Agreement shall terminate. If the Company notifies the Operator more than two (2) months prior to the expiration of the Notice Period of its intent to resume operations at the Refinery, then the Suspension Notice shall be deemed revoked and this Agreement shall continue in full force and effect as if such Suspension Notice had never been delivered. During the Notice Period, the Company shall remain liable for Shortfall Payments and all payments per Section 3.6 and Section 3.10 with respect of Capital Expenditures hereunder. Subject to Section 14.1 and after the fifth (5 th ) anniversary of the Commencement Date, during the Notice Period, the Operator may terminate this Agreement upon sixty (60) days prior written notice to the Company in order to enter into an agreement to provide any third party the services provided to the Company under this Agreement.

Section 14.2 Notice of Suspension . If all or substantially all refining operations at the Refinery are suspended for any reason (including refinery turnaround operations and other scheduled maintenance), then the Company shall remain liable for Shortfall Payments under this Agreement for the duration of the suspension, unless and until this Agreement is terminated as provided in Section 14.1 . The Company shall provide at least ninety (90) days’ prior written notice whenever practical of any suspension of operations at the Refinery due to a planned turnaround or scheduled maintenance that affects or will affect the Services or the Ancillary Services; provided , however , that the Company shall not have any liability for any failure to notify, or delay in notifying, the Operator of any such suspension except to the extent the Operator has been materially damaged by such failure or delay.

Article 15 Right of First Refusal.

Section 15.1 Grant of ROFR . The Operator hereby grants to the Company a right of first refusal on any proposed Transfer (other than a grant of a security interest to a bona fide third-party lender or a Transfer to an Affiliate of the Operator) of any ROFR Asset; provided , however , that the Parties acknowledge and agree that nothing in this Article 15 shall prevent or restrict the Transfer of partnership interests, limited liability interests, equity or ownership interests or other securities of the Operator or create a right of first refusal as a result thereof; provided , further , that the Company may, without consent or approval from the Operator, assign its rights under this Article 15 to any Affiliate of the Company.

Section 15.2 Acknowledgement regarding Consents . The Parties acknowledge that all potential Transfers of ROFR Assets pursuant to this Article 15 are subject to obtaining any and all required written consents of Governmental Authorities and other third parties and to the terms of all existing agreements in respect of the ROFR Assets, as applicable; provided , however , that the Operator represents and warrants that, to its knowledge after reasonable investigation, there are no terms in such agreements that would materially impair the rights granted to the Company pursuant to this Article 15 with respect to any ROFR Asset.

Section 15.3 Procedures for Transfer of ROFR Asset .

 

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(a) In the event the Operator proposes to Transfer any of the ROFR Assets (other than a grant of a security interest to a bona fide third-party lender or a Transfer to an Affiliate of the Operator) pursuant to a bona fide third-party offer (an “ Acquisition Proposal ”), then the Operator shall, prior to entering into any such Acquisition Proposal, first give notice in writing to the Company (a “ Disposition Notice ”) of its intention to enter into such Acquisition Proposal. The Disposition Notice shall include any material terms, conditions and details as would be necessary for the Company to determine whether to exercise its right of first refusal with respect to the Acquisition Proposal, which terms, conditions and details shall at a minimum include: the name and address of the prospective acquirer (the “ Proposed Transferee ”), the ROFR Assets subject to the Acquisition Proposal (the “ Sale Assets ”), the purchase price offered by such Proposed Transferee (the “ Offer Price ”), reasonable detail concerning any non-cash portion of the proposed consideration, if any, to allow the Company to reasonably determine the fair market value of such non-cash consideration, the Operator’s estimate of the fair market value of any non-cash consideration and all other material terms and conditions of the Acquisition Proposal that are then known to the Operator. To the extent the Proposed Transferee’s offer consists of consideration other than cash (or in addition to cash), the Offer Price shall be deemed equal to the amount of any such cash plus the fair market value of such non-cash consideration. In the event the Company and the Operator are able to agree on the fair market value of any non-cash consideration or if the consideration consists solely of cash, the Company will provide written notice of its decision regarding the exercise of its right of first refusal to purchase the Sale Assets (the “ ROFR Response ”) to the Operator within sixty (60) days of its receipt of the Disposition Notice (the “ First ROFR Acceptance Deadline ”). In the event the Company and the Operator are unable to agree on the fair market value of any non-cash consideration prior to the First ROFR Acceptance Deadline, the Company shall indicate its desire to determine the fair market value of such non-cash consideration pursuant to the procedures outlined in the remainder of this Section 15.3 in a ROFR Response delivered prior to the First ROFR Acceptance Deadline. If no ROFR Response is delivered by the Company prior to the First ROFR Acceptance Deadline, then the Company shall be deemed to have waived its right of first refusal with respect to such Sale Asset. In the event (i) the Company’s determination of the fair market value of any non-cash consideration described in the Disposition Notice is less than the fair market value of such consideration as determined by the Operator in the Disposition Notice and (ii) the Company and the Operator are unable to mutually agree upon the fair market value of such non-cash consideration within sixty (60) days after the Company notifies the Operator of its determination thereof, the Operator and the Company will engage a mutually agreed upon, nationally recognized investment banking firm that is not currently engaged in business with either of the Parties to determine the fair market value of the non-cash consideration. In the event the Parties are unable to agree upon an investment banking firm, each Party will select a nationally recognized investment banking firm, and the two investment banking firms so chosen will select a third investment banking firm to serve as the investment banking firm for purposes of this Article 15 . The investment banking firm will determine the fair market value of the non-cash consideration within thirty (30) days of its engagement and furnish the Company and the Operator its determination. The fees of the investment banking firm will be split equally between Parties. Once the investment banking firm has submitted its determination of the fair market value of the non-cash consideration, the Company will provide a ROFR Response to the Operator within thirty (30) days after the investment banking firm has submitted its determination (the “ Second ROFR Acceptance Deadline ” and together with the First ROFR Acceptance Deadline, the “ ROFR Acceptance Deadlines ”). If no ROFR Response is delivered by the Company prior to the Second ROFR Acceptance Deadline, then the Company shall be deemed to have waived its right of first refusal with respect to such Sale Asset.

 

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(b) If the Company elects in a ROFR Response delivered prior to the First ROFR Acceptance Deadline or Second ROFR Acceptance Deadline, as applicable, to exercise its right of first refusal with respect to a Sale Asset, within sixty (60) days of the delivery of the ROFR Response, such ROFR Response shall be deemed to have been accepted by the Operator and the Operator shall thereafter enter into a purchase and sale agreement with the Company providing for the consummation of the Acquisition Proposal upon the terms set forth in the ROFR Response. Unless otherwise agreed between the Company and the Operator, the terms of the purchase and sale agreement will include the following:

(i) the Company will agree to deliver the Offer Price in cash (unless the Company and the Operator agree that such consideration will be paid, in whole or in part, in equity securities of the Company or of an Affiliate of the Company, an interest-bearing promissory note or similar instrument, or any combination thereof);

(ii) the Operator will represent that it has valid fee or leasehold title, as applicable, to the Sale Asset that is sufficient to operate the Sale Assets in accordance with their historical use, subject to all recorded matters and all physical conditions in existence on the closing date for the purchase of the applicable Sale Asset, plus any other such matters as the Company may approve (and if the Company desires to obtain any title insurance with respect to the Sale Asset, the full cost and expense of obtaining the same (including the cost of title examination, document duplication and policy premium) shall be borne by the Company);

(iii) the Operator will grant to the Company the right, exercisable at the Company’s risk and expense prior to the delivery of the ROFR Response, to make such surveys, tests and inspections of the Sale Asset as the Company may deem desirable, so long as such surveys, tests or inspections are neither destructive nor invasive and do not damage the Sale Asset or interfere with the activities of the Operator;

(iv) the Company will have the right to terminate its obligation to purchase the Sale Asset under this Article 15 if the results of any searches under Section 15.3(b)(ii) or (iii) above are, in the reasonable opinion of the Company, unsatisfactory;

(v) the closing date for the purchase of the Sale Asset shall occur no later than one hundred eighty (180) days following receipt by the Operator of the ROFR Response pursuant to Section 15.3(a) ;

(vi) the Operator and the Company shall use commercially reasonable efforts to do or cause to be done all things that may be reasonably necessary or advisable to effectuate the consummation of any transactions contemplated by this Section 15.3(b) , including causing its respective Affiliates to execute, deliver and perform all documents, notices, amendments, certificates, instruments and consents required in connection therewith;

 

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(vii) except to the extent modified in the Acquisition Proposal, the sale of any Sale Assets shall be made on an “as is,” “where is” and “with all faults” basis, and the instruments conveying such Sale Assets shall contain appropriate disclaimers; and

(viii) neither the Operator nor the Company shall have any obligation to sell or buy the Sale Assets if any of the consents referred to in Section 15.2 has not been obtained.

(c) The Company and the Operator shall cooperate in good faith in obtaining all necessary governmental and other third-party approvals, waivers and consents required for the closing of the purchase and sale agreement described in Section 16.1(b) . Any such closing shall be delayed, to the extent required, until the third (3 rd ) Business Day following the expiration of any required waiting periods under the Hart-Scott-Rodino Act; provided , however , that such delay shall not exceed sixty (60) days following the one hundred eighty (180) days referred to in Section 15.3(b)(v) (the “ ROFR Governmental Approval Deadline ”) and, if governmental approvals and waiting periods shall not have been obtained or expired, as the case may be, by such ROFR Governmental Approval Deadline, then the Company shall be deemed to have waived its right of first refusal with respect to the Sale Assets described in the Disposition Notice and thereafter the Operator shall be free to consummate the Transfer to the Proposed Transferee, subject to Section 15.3(d)(ii) .

(d) If the Transfer to the Proposed Transferee (i) in the case of a Transfer other than a Transfer permitted under Section 15.3(c) , is not consummated in accordance with the terms of the Acquisition Proposal within the later of (A) one hundred eighty (180) days after the applicable ROFR Acceptance Deadline and (B) three (3) Business Days after the satisfaction of all governmental approval or filing requirements, if any, or (ii) in the case of a Transfer permitted under Section 15.3(c) , is not consummated within the later of (A) sixty (60) days after the ROFR Governmental Approval Deadline and (B) three (3) Business Days after the satisfaction of all governmental approval or filing requirements, if any, then in each case the Acquisition Proposal shall be deemed to lapse, and the Operator may not Transfer any of the Sale Assets described in the Disposition Notice without complying again with the provisions of this Article 15 if and to the extent then applicable.

 

Article 16 Shutdown or Idling of Refinery.

Section 16.1 Shutdown or Idling of Refinery . In the event of a Permanent Refinery Shutdown, the Operator shall have the right to purchase the assets identified in Exhibit D (the “ Designated Refinery Assets ”) at their fair market value at the time of sale in accordance with this Section 16.1 .

(a) A “ Permanent Refinery Shutdown ” shall be deemed to have occurred upon the earlier of (i) the cessation of all or substantially all commercial operation of the Refinery with no current intent on the part of the Company to resume all or substantially all commercial operation thereof or (ii) a change to the Refinery’s current SIC code (i.e., 4610) applicable to crude oil refining. The Company shall exercise commercially reasonable efforts to provide the Operator with at least sixty (60) days advance notice of a Permanent Refinery Shutdown.

 

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(b) The Operator may at any time during the two-year period following notice of a Permanent Refinery Shutdown exercise its purchase option pursuant to this Article 16 (the “ Refinery Asset Purchase Option ”) by providing written notice (a “ Refinery Asset Option Notice ”) to the Company. Promptly upon receipt of such Refinery Asset Option Notice, the Company shall provide the Operator and its designees with access to such information regarding the Designated Refinery Assets as shall be reasonable and customary for the Operator to conduct diligence in accordance with Prudent Industry Practice on assets such as the Designated Refinery Assets. The Operator shall have a period of not less than ninety (90) days to evaluate such information.

(c) The Operator and the Company shall, for a period of thirty (30) days following completion of Operator’s diligence in accordance with Prudent Industry Practice, negotiate in good faith to reach agreement on the terms for a purchase of the Designated Refinery Assets by the Operator; provided , however , that the Parties agree that: (i) the terms (including price) of any such purchase and sale will be on terms customary for the sale of assets of this nature and otherwise agreeable to both the Operator and the Company; (ii) the purchase price shall be paid at closing in cash; (iii) the Company shall not be obligated to make any representations as to the condition of the Designated Refinery Assets or any portion thereof; (iv) the Operator shall not be required to purchase the real property on which the Designated Refinery Assets are located (in which case the Operator shall be entitled to lease or be granted easements to all or a portion of such real property); (v) the Company shall convey all operating and maintenance records reasonably necessary for the operation of the Designated Refinery Assets; and (vi) the Company shall convey the Designated Refinery Assets free and clear of any charge, claim, covenant, equitable interest, equitable servitude, lien, option, pledge security interest, right of first refusal, or other restriction of any kind, including any restriction on use, transfer, receipt of income, or exercise of any other attribute of ownership; provided , however , that the Company shall receive a reasonable easement with respect to the Designated Refinery Assets in order to access such Designated Refinery Assets in connection with the Company or its Affiliates potential refining operations.

(d) If the Operator and the Company are unable to agree on the terms (including price) for a sale of the Designated Refinery Assets, the Operator and the Company shall engage a mutually agreed upon, nationally recognized investment banking firm to determine any terms (including price) as to which the Parties are unable to agree with respect to the sale of the Designated Refinery Assets. In the event the Parties are unable to agree upon an investment banking firm, each Party will select a nationally recognized investment banking firm, and the two investment banking firms so chosen will select a third investment banking firm to serve as the investment banking firm for purposes of this Section 16.1 . The investment banking firm shall: (i) base the terms of purchase and sale on those that are reasonable and customary for the sale of industrial assets such as the Designated Refinery Assets, subject to the provisions of this Section 16.1 ; (ii) determine the fair market value of the Designated Refinery Assets based on their then-current operations; and (iii) consider the age, condition, maintenance history, replacement cost, ongoing operating costs, regulatory enforcement actions or fines in effect and other factors the investment banking firm considers relevant to fair market value.

(e) All fees of the investment banking firm incurred in connection with the Refinery Asset Purchase Option will be split equally between the Operator and the Company.

 

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(f) Once the investment banking firm resolves all terms of the sale regarding the Refinery Asset Purchase Option that the Parties are unable to agree upon, the Operator will have the right, but not the obligation, for a period of ninety (90) days from the investment banking firm’s resolution (such period, the “ Refinery Asset Option Period ”) to purchase the Designated Refinery Assets on terms (including price) agreed to by the Parties (as supplemented by any terms determined by the investment banking firm). The Operator shall notify the Company, in writing delivered during the Refinery Asset Option Period, of its intention to purchase the Designated Refinery Assets. Failure to provide such notice within the Refinery Asset Option Period shall be deemed to constitute a decision by the Operator not to exercise its Refinery Asset Purchase Option.

(g) If the Operator notifies the Company in writing during the Refinery Asset Option Period of its intention to exercise its Refinery Asset Purchase Option, both Parties shall be obligated to enter into an agreement incorporating the terms (including price) either agreed to by the Parties or determined by the investment banking firm. If the Operator fails to execute and deliver such an agreement within sixty (60) days of expiration of the Refinery Asset Option Period, the Operator’s Refinery Asset Purchase Option shall be deemed to have lapsed.

 

Article 17 Event of Default: Remedies Upon Event of Default.

Section 17.1 Event of Default . Notwithstanding any other provision of this Agreement, but subject to Article 26, the occurrence of any of the following shall constitute an “ Event of Default ”:

(a) any Party fails to make payment when due (i) under Article 3 within five (5) Business Days after a written demand therefor or (ii) under any other provision hereof within seven (7) Business Days;

(b) other than a default described in Sections 17.1(a) or 17.1(c) , if the Company or the Operator fails to perform any material obligation or covenant to the other under this Agreement, which is not cured to the reasonable satisfaction of any other Party within fifteen (15) Business Days after the date that such Party receives written notice that such obligation or covenant has not been performed;

(c) any Party breaches any representation or warranty made by such Party hereunder, or such warranty or representation proves to have been incorrect or misleading in any material respect when made; provided , however , that if such breach is curable, such breach is not cured to the reasonable satisfaction of the other Party within fifteen (15) Business Days after the date that such Party receives notice that corrective action is needed;

(d) any Party files a petition or otherwise commences or authorizes the commencement of a proceeding or case under any bankruptcy, reorganization or similar law for the protection of creditors, or have any such petition filed or proceeding commenced against it and such proceeding is not dismissed for sixty (60) days; and

(e) the Operator sells or permits the creation of, or suffers to exist any security interest, lien, encumbrance, charge or other claim of any nature (other than Permitted Liens or liens or liens that existed with respect to such Product prior to the throughput by the Company or the Company Designee hereunder) with respect to any of the Products.

 

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Section 17.2 Termination in the Event of Default . Except as set forth in Section 17.1(d) , without limiting any other provision of this Agreement, if an Event of Default with respect to the Company or the Operator (such defaulting Party, the “ Defaulting Party ”) has occurred and is continuing, the Non-Defaulting Party shall have the right, immediately and at any time(s) thereafter, to terminate this Agreement upon written notice to the Defaulting Party.

Section 17.3 Other Remedies . Without limiting any other rights or remedies hereunder, if an Event of Default occurs and the Company is the Non-Defaulting Party, the Company may, in its discretion, (a) withhold or suspend its obligations, including any of its delivery or payment obligations, under this Agreement, (b) reclaim and repossess any and all of its Products held at the Terminal or elsewhere on the Operator’s premises, and (c) otherwise arrange for the disposition of any of its Products in such manner as it elects.

Section 17.4 Set Off . If an Event of Default occurs, the Non-Defaulting Party may, without limitation on its rights under this Article 17 , 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 agreement or contract or otherwise and whether or not then due). Any net amount due hereunder shall be payable by the Party owing such amount within one (1) Business Day of termination.

Section 17.5 No Preclusion of Rights . The Non-Defaulting Party’s rights under this Section 17.5 shall be in addition to, and not in limitation 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, as a secured party or under any other credit support. The Defaulting Party shall indemnify and hold the Non-Defaulting Party harmless from all costs and expenses, including reasonable attorney fees, incurred in the exercise of any remedies hereunder.

Article 18 Indemnification.

Section 18.1 Indemnification by Operator . The Operator shall defend, indemnify and hold harmless the Company, the Company Designee, their respective Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “ Company Indemnitees ”) from and against any Liabilities directly or indirectly arising out of (a) any breach by the Operator of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of the Operator made herein or in connection herewith proving to be false or misleading, (b) any failure by the Operator, its Affiliates or any of their respective employees, representatives, agents or contractors to comply with or observe any Applicable Law, or (c) 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 Operator, its Affiliates or any of their respective employees, representatives, agents or contractors in the exercise of any of the rights granted hereunder or the handling or transportation of any Products hereunder, except to the extent of the Company’s obligations under Section 18.2 below, and except to the extent that such injury, disease, death, or damage to or loss of property, fine or penalty was caused by the gross or sole negligence or willful misconduct on the part of the Company Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, the Operator’s liability to the Company Indemnitees

 

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pursuant to this Section 18.1 shall be net of any insurance proceeds actually received by the Company Indemnitees or any of their respective Affiliates from any third party with respect to or on account of the damage or injury which is the subject of the indemnification claim. The Company agrees that it shall, and shall cause the other Company Indemnitees to, (i) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Company Indemnitees are entitled with respect to or on account of any such damage or injury, (ii) notify the Operator of all potential claims against any third party for any such insurance proceeds, and (iii) keep the Operator fully informed of the efforts of the Company Indemnitees in pursuing collection of such insurance proceeds.

Section 18.2 Indemnification by Company . The Company shall defend, indemnify and hold harmless the Operator, its Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “ Operator Indemnitees ”) from and against any Liabilities directly or indirectly arising out of (a) 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, (b) any personal injury incurred by any representative of the Company or the Company Designee (including any Supplier Inspector or Company Inspector) while on the Operator’s property, (c) any failure by the Company, the Company Designee, their respective Affiliates or any of their respective employees, representatives (including any Supplier Inspector or Company Inspector), agents or contractors to comply with or observe any Applicable Law, or (d) 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, the Company Designee, their respective Affiliates or any of their respective employees, representatives (including any Supplier Inspector or Company Inspector), agents or contractors in the exercise of any of the rights granted hereunder or the refining or storage of any Products hereunder, except to the extent of the Operator’s obligations under Section 18.1 above, and except to the extent that such injury, disease, death, or damage to or loss of property, fine or penalty was caused by the gross or sole negligence or willful misconduct on the part of the Operator Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, the Company’s liability to the Operator Indemnitees pursuant to this Section 18.2 shall be net of any insurance proceeds actually received by the Operator Indemnitees or any of their respective Affiliates from any third party with respect to or on account of the damage or injury which is the subject of the indemnification claim. The Operator agrees that it shall, and shall cause the other Operator Indemnitees to, (i) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Operator Indemnitees are entitled with respect to or on account of any such damage or injury, (ii) notify the Company of all potential claims against any third party for any such insurance proceeds, and (iii) keep the Company fully informed of the efforts of the Operator Indemnitees in pursuing collection of such insurance proceeds.

Section 18.3 EXPRESS REMEDY . THE FOREGOING INDEMNITIES ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE SOLE, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE, STRICT LIABILITY OR FAULT OF ANY OF THE INDEMNIFIED PARTIES.

 

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Article 19 Limitation on Damages.

Notwithstanding anything to the contrary contained herein, neither Party shall be liable or responsible to the other Party or such other Party’s affiliated Persons for any consequential, punitive, special, incidental or exemplary damages, or for loss of profits or revenues (collectively referred to as “ Special Damages ”) incurred by such Party or its affiliated Persons that arise out of or relate to this Agreement, regardless of whether any such claim arises under or results from contract, tort, or strict liability; provided , however , that the foregoing limitation is not intended and shall not affect Special Damages in connection with any third-party claim or imposed in favor of unaffiliated Persons that are not Parties to this Agreement; provided , further , that to the extent an indemnitor hereunder receives insurance proceeds with respect to Special Damages that would be indemnified hereunder if not for this Article 19 , such indemnitor shall be liable up to the amount of such insurance proceeds (net any deductible and premiums paid with respect thereto).

Article 20 Confidentiality.

Section 20.1 Obligations . Each Party shall use commercially reasonable efforts to retain the other Party’s Confidential Information in confidence and not disclose the same to any third party (other than a Company Designee, provided the Company Designee has agreed to adhere to this Article 20 , or any Receiving Party Personnel) nor use the same, except as authorized by the disclosing Party in writing or as expressly permitted in this Section 20.1 . Each Party further agrees to take the same care with the other Party’s Confidential Information as it does with its own, but in no event less than a reasonable degree of care.

Section 20.2 Required Disclosure . Notwithstanding Section 20.1 above, if the receiving Party becomes legally compelled to disclose the Confidential Information by a court, Governmental Authority or Applicable Law, including the rules and regulations of the Securities and Exchange Commission, or is required to disclose pursuant to the rules and regulations of any national securities exchange upon which the receiving Party or its parent entity is listed, any of the disclosing Party’s Confidential Information, the receiving Party shall promptly advise the disclosing Party of such requirement to disclose Confidential Information as soon as the receiving Party becomes aware that such a requirement to disclose might become effective, in order that, where possible, the disclosing Party may seek a protective order or such other remedy as the disclosing Party may consider appropriate in the circumstances. The receiving Party shall disclose only that portion of the disclosing Party’s Confidential Information that it is required to disclose and shall reasonably cooperate with the disclosing Party (at the disclosing Party’s cost) in allowing the disclosing Party to obtain such protective order or other relief.

Section 20.3 Return and Destruction of Information . Upon written request by the disclosing Party, all of the disclosing Party’s Confidential Information in whatever form shall be returned to the disclosing Party upon termination of this Agreement or destroyed with destruction certified by the receiving Party, without the receiving Party retaining copies thereof except that one copy of all such Confidential Information may be retained by a Party’s legal department solely to the extent that such Party is required to keep a copy of such Confidential Information pursuant to Applicable Law, and the receiving Party shall be entitled to retain any Confidential Information in the electronic form or stored on automatic computer back-up archiving systems during the period such backup or archived materials are retained under such Party’s customary procedures

 

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and policies; provided , however , that notwithstanding any termination or expiration of this Agreement, any Confidential Information retained by the receiving Party shall be maintained subject to confidentiality pursuant to the terms of this Section 20.3 , and such archived or back-up Confidential Information shall not be accessed except as required by Applicable Law for so long as such Confidential Information is retained.

Section 20.4 Receiving Party Personnel . The receiving Party will limit access to the Confidential Information of the disclosing Party to those of its employees, attorneys and contractors that have a need to know such information in order for the receiving Party to exercise or perform its rights and obligations under this Agreement (the “ Receiving Party Personnel ”). The Receiving Party Personnel who have access to any Confidential Information of the disclosing Party will be made aware of the confidentiality provisions of this Agreement, and will be required to abide by the terms thereof. Any third-party contractors that are given access to Confidential Information of a disclosing Party pursuant to the terms hereof shall be required to sign a written agreement pursuant to which such Receiving Party Personnel agree to be bound by the provisions of this Agreement, which written agreement will expressly state that it is enforceable against such Receiving Party Personnel by the disclosing Party.

Section 20.5 Survival . The obligation of confidentiality under this Article 20 shall survive the termination of this Agreement for a period of two (2) years.

Article 21 Choice of Law.

This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Subject to Article 26 , the Parties agree to the venue and jurisdiction of the federal or state courts located in the State of Delaware for the adjudication of all disputes arising out of this Agreement.

Article 22 Assignment.

Section 22.1 Assignment by the Company . Except as set forth in this Article 22 , the Company shall not assign its rights or obligations hereunder without the Operator’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided , however , that (a) the Company may assign this Agreement without the Operator’s consent in connection with a sale by the Company of its inventory of Products, or all or substantially all of the Refinery, including by merger, equity sale, asset sale or otherwise, so long as the transferee: (1) agrees to assume all of the Company’s obligations under this Agreement; and (ii) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by the Company in its reasonable judgment; and (b) the Company shall be permitted to make a collateral assignment of this Agreement solely to secure financing for itself or any of its Affiliates.

Section 22.2 Company Designee .

(a) Without the Operator’s consent, the Company shall be permitted to assign the Company’s rights to use, hold the Products in, and transport the Products through, the Terminal pursuant to this Agreement, to the Company Designee.

 

30


(b) The Company shall act as the Company Designee’s counterparty for all purposes of this Agreement, and the Operator shall be entitled to follow the Company’s instructions with respect to all of the Company Designee’s Products that are transported or handled by the Operator pursuant to this Agreement unless and until the Operator is notified by the Company Designee in writing that the Company is no longer authorized to act as the Company Designee’s counterparty, in which case the Operator shall thereafter follow the instructions of the Company Designee (or such other agent as the Company Designee may appoint) with respect to all the Company Designee’s Products that are transported or handled by the Operator pursuant to this Agreement. The Company shall be responsible for all the Company Designee’s payments to the Operator hereunder; provided , however , that the Operator shall accept payment in connection with this Agreement directly from any Company Designee and apply such payments against amounts owed by the Company hereunder. All volumes throughput by the Company Designee will be taken into account in the determination of whether the Company has satisfied its Minimum Throughput Commitment. During any time that this Agreement is assigned to the Company Designee, all provisions of this Agreement, as amended or adjusted by this Article 22 , shall be in full force and effect with respect to the Company Designee and the Company Designee’s Products as if the Company Designee were Party hereto in place of the Company.

Section 22.3 Assignment by the Operator . The Operator shall not assign its rights or obligations under this Agreement without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed; provided , however , that (a) subject to Article 15 hereof and Article VI of the Omnibus Agreement, the Operator may assign this Agreement without such consent in connection with a sale by the Operator of all or substantially all of the Terminal, including by merger, equity sale, asset sale or otherwise, so long as the transferee: (i) agrees to assume all of the Operator’s obligations under this Agreement; (ii) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by the Operator in its reasonable judgment; and (iii) is not a competitor of the Company, as determined by the Company in good faith; and (b) the Operator shall be permitted to make a collateral assignment of this Agreement solely to secure financing for the Operator and its Affiliates.

Section 22.4 Terms of Assignment . Any assignment that is not undertaken in accordance with the provisions set forth above shall be null and void ab initio . A Party making any assignment shall promptly notify the other Party of such assignment, regardless of whether consent is required. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

Section 22.5 Change of Control . The Parties’ obligations hereunder shall not terminate in connection with a Change of Control; provided , however , that in the case of a Change of Control, the Company shall have the option to extend the Term as provided in Section 2.1 , without regard to the notice period provided in the fourth sentence of Section 2.1 .

Article 23 Notices.

All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when delivered; (b) if mailed via the official governmental mail system, five (5) Business Days after

 

31


mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (c) if mailed by an internationally recognized overnight express mail service such as Federal Express or UPS, one (1) Business Day after deposit therewith prepaid; or (d) if by email, one (1) Business Day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows:

If to the Company:

PBF Holding Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jeffrey Dill, General Counsel

Telecopy No: (973) 455-7500

Email: jeffrey.dill@pbfenergy.com

with a copy, which shall not constitute notice, to:

PBF Energy Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jeffrey Dill, General Counsel

Telecopy No: (973) 455-7500

Email: jeffrey.dill@pbfenergy.com

If to the Operator:

Delaware City Terminaling Company LLC,

c/o PBF Logistics GP LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jim Fedena, Senior VP, Logistics

Telecopy No: (973) 455-7500

Email: jim.fedena@pbfenergy.com

with a copy, which shall not constitute notice, to:

PBF Logistics GP LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Matt Lucey, Executive VP

Telecopy No: (973) 455-7500

Email: matt.lucey@pbfenergy.com

or to such other address or to such other person as either Party will have last designated by notice to the other Party.

 

32


Article 24 No Waiver; Cumulative Remedies.

Section 24.1 No Waivers . 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 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.

Section 24.2 Cumulative Remedies . 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 25 Nature of Transaction and, Relationship of Parties.

Section 25.1 Independent Contractor . This Agreement shall not be construed as creating a partnership, association or joint venture among the Parties. It is understood that the Operator 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 the Operator, or any employee or agent of the Operator, an agent or employee of the Company.

Section 25.2 No Agency . No Party shall have the right or authority to negotiate, conclude or execute any contract or legal document with any third person in the name of the other Party; to assume, create, or incur any liability of any kind, express or implied, against or in the name of any of the other Party; or to otherwise act as the representative of the other Party, unless expressly authorized in writing by the other Party.

Article 26 Arbitration Provision.

Any and all Arbitrable Disputes (except to the extent injunctive relief is sought) shall be resolved through the use of binding arbitration using, in the case of an Arbitrable Dispute involving a dispute of an amount equal to or greater than $1,000,000 or non-monetary relief, three arbitrators, and in the case of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, one arbitrator, in each case in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Article 26 and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Article 26 will control the rights and obligations of the Parties. Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or the time period allowed by the applicable statute of limitations. Arbitration may be initiated by a Party (“ Claimant ”) serving written notice on the other Party (“ Respondent ”) that Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. Respondent shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If Respondent fails for any reason to name an arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondent’s account. The two

 

33


arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed, and, in the of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, such third arbitrator shall act as the sole arbitrator, and the sole role of the first two arbitrators shall be to appoint such third arbitrator. Claimant will pay the compensation and expenses of the arbitrator named by or for it, and Respondent will pay the compensation and expenses of the arbitrator named by or for it. The costs of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. Claimant and Respondent will each pay one-half of the compensation and expenses of the third arbitrator. All arbitrators must (a) be neutral parties who have never been officers, directors or employees of the Operator, the Company or any of their Affiliates and (b) have not less than seven (7) years’ experience in the energy industry. The hearing will be conducted in the State of Delaware or the Philadelphia Metropolitan area and commence within thirty (30) days after the selection of the third arbitrator. The Company, the Operator and the arbitrators shall proceed diligently and in good faith in order that the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators will be binding on and non-appealable by the Parties hereto. The arbitrators shall have no right to grant or award Special Damages. Notwithstanding anything herein the contrary, the Company may not dispute any amounts with respect to an invoice delivered in accordance with Section 3.8 that the Company has not objected to within one hundred twenty (120) days of receipt thereof. No Event of Default shall occur if the subject matter underlying such potential Event of Default is the subject matter of any dispute that is pending resolution or arbitration under this Article 26 until such time that such dispute is resolved in accordance with this Article 26 .

Article 27 General.

Section 27.1 Severability . Whenever possible, each provision of this Agreement will be interpreted in such manner as to be valid and effective under Applicable Law, but if any provision of this Agreement or the application of any such provision to any person or circumstance will be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith with a view to substitute for such provision a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

Section 27.2 Entire Agreement . This Agreement, the Operation and Management Services and Secondment Agreement and the Omnibus Agreement together constitute the entire agreement among the Parties pertaining to the subject matter hereof and supersede all prior agreements and understandings of the Parties in connection therewith. No promise, representation or inducement has been made by any of the Parties concerning the subject matter of this Agreement and none of the Parties shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

Section 27.3 Time is of the Essence . Time is of the essence with respect to all aspects of each Party’s performance of any obligations under this Agreement.

Section 27.4 No Third-Party Beneficiaries . It is expressly understood that the provisions of this Agreement do not impart enforceable rights in anyone who is not a Party or successor or permitted assignee of a Party; provided , however , that upon written request from the Company, this Agreement will be amended by the Parties to make any Company Designee or lender or intermediator of the Company or any Company Designee a third-party beneficiary hereof.

 

34


Section 27.5 Further Assurances . In connection with this Agreement and all transactions contemplated by this Agreement, each signatory Party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

Section 27.6 Survival . All audit rights, payment, confidentiality and indemnification obligations and obligations under this Agreement shall survive the expiration or termination of this Agreement in accordance with their terms.

Section 27.7 Counterparts . This Agreement may be executed in one or more counterparts (including by facsimile or portable document format (pdf)) for the convenience of the Parties hereto, each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement.

[ Remainder of Page Intentionally Left Blank ]

 

35


IN WITNESS WHEREOF, the Parties have duly executed this Agreement on the date first set forth above.

 

COMPANY:

 

PBF HOLDING COMPANY LLC

By:   /s/ Jeffrey Dill
Name:  

Jeffrey Dill

Title:  

Secretary

 

OPERATOR:

 

DELAWARE CITY TERMINALING COMPANY LLC

By:   /s/ Jeffrey Dill
Name:  

Jeffrey Dill

Title:  

Secretary

S IGNATURE P AGE TO THE D ELAWARE C ITY R AIL T ERMINALING S ERVICES A GREEMENT


Exhibit A

Ancillary Services Fees

 

   

Service

  

Fee or Specification

1.

  Metering    To be agreed upon, if applicable, during the Term.

2.

  Laboratory tests or specific railcar sampling    To be agreed upon, if applicable, during the Term.

3.

  Railcar Management    To be agreed upon, if applicable, during the Term.

If any additional ancillary services are requested by the Company in accordance with the Agreement, the Parties shall reasonably negotiate to determine the appropriate rates to be charged for such services.

 

E XHIBIT A

A-1


Exhibit B

Product

Product : Light Crude

Product Specifications :

API 30 – 45

H2S < 10 ppm in breathing zone

TVP < 11.1 psi

Pour Point < 0 degf

 

E XHIBIT B

B-1


Exhibit C

Nomination and Scheduling; Railcar Specifications

Nominations and Scheduling.

The Terminal is a shared-use facility and has limited capacity at any one time to take delivery of crude oil by railcars. Accordingly, the Company will use commercially reasonable efforts to deliver crude oil on a ratable basis and to coordinate with the Operator the arrival of unit trains for unloading, and the Operator will require the other users to do the same. The Company will coordinate with the Operator and keep the Operator apprised of the arrival of unit trains delivering the Company’s crude oil to the Terminal. The Company will keep the Operator apprised of volumes of crude oil that the Company nominates for transportation and delivery to the Terminal by rail.

The Company will provide the Operator, by email or facsimile, or by other means mutually agreed by the Operator and the Company from time to time, no later than the fifteenth (15 th ) day of each calendar month throughout the Term, a good faith monthly nomination (a “ Nomination ”) of (i) the volume of crude oil that the Company projects it will deliver to the Terminal by rail during the following calendar month (to be delivered to the Terminal on a ratable basis throughout the month), (ii) the dates and times when the Company projects each unit train will arrive at the Terminal during the month (which must be on a ratable basis throughout such month), and the number and type of railcars of each unit train. All nominations for delivery of crude oil to the Terminal must be accompanied by a corresponding and reasonable tank availability schedule for prompt transfer of such crude oil into storage tanks.

The Company will provide to the Operator each Wednesday throughout the Term an updated forecast for the following week with respect to the Company’s then-current Nomination.

Railcar Specifications.

The following specifications reflect the Operator’s minimum railcar requirements, which are not intended to replace original manufacturer requirements or other basic industry regulations or specifications. Railcar variations that are outside of these specifications must be approved by the Operator in advance of arrival of the unit train and, if accepted by the Operator, may require the Operator to break the unit train at additional points at the Company’s sole cost and expense.

 

Design Item

  

Parameter I Requirement

Design Car Length- over coupler pulling faces- (ftlin)    59’-4”
Minimum Car Length- over coupler pulling faces- (ftlin) For all cars having the same AlB orientation   

59’-3” (this is an absolute dimension, tolerances

and coupling connection variances must be evaluated)

 

E XHIBIT C

C-1


Design Item

  

Parameter/Requirement

Maximum Car Length- over coupler pulling faces- (ftlin) For all cars having the same AlB orientation   

59’-6” (this is an absolute dimension, tolerances

and coupling connection variances must be evaluated)

Minimum Car Length- over coupler pulling faces- (ftlin) For cars having varied AlB orientations, with maximum crash box centerline to tank centerline offset of 24”   

59’-4” (this is an absolute dimension, tolerances

and coupling connection variances must be evaluated)

Maximum Car Length- over coupler pulling faces- (ftlin)

For cars having varied AlB orientation, with maximum crash box centerline to tank centerline offset of 24”

   59’-5 112” (this is an absolute dimension, tolerances and coupling connection variances must be evaluated

Maximum Crash Box Entry Centerline I Tank Centerline

Offset (in.)

   24”
Minimum Crash Box Entry Width (in)    21”

Maximum Car Height—Top of Rail to Top of Crash Box

Handrail (ft)

  

17’ (17’ is limit for cars with crash box widths

7’; cars with crash box widths greater than 7’ should be evaluated for maximum allowable car height)

Bottom Connection (Cap Off I Empty Car) Height from Top of Rail (est.) (in)    16” Minimum
BOY Axis (empty car) Height from Top of Rail (in)    31” Minimum
Spring Travel—Loaded to Empty (in)    2” Maximum
BOY Size and Connection   

4” Ball Valve- Salco Cam Lock Cap Required

Must utilize either Type A or Type B.

Type A.) part # TE4ITUFIA Type B.) part# TE4IUTF1A

BOY Internal Drain    No Riser Pipe, Full Drainage
Air Inlet Connection   

1” Minimum Connection, use Salco Cam Lock

Cap part# K201UMPIA. Use full port valve. Do not use a l-in riser with 2-in adapter.

Required Air Inlet Capacity   

Estimated at 900 cfrn (air) minimum with 1 psi

differential (a) atmospheric pressure

Pressure Safety Relief Device and Capacity    Required, Sized Per Standard Industry Methods
Pressure Safety Relief Device- Set Pressure    Set at MA WP (Maximum of 165 psig)
Vacuum Relief Valve and Capacity    Required, estimated at 230 cfrn (air) with 4 psi differential @ atmospheric pressure
Outage / Strapping Table    Car specific gage table required per car

Rail Car Orientation.

All rail cars must be orientated in the same direction.

 

E XHIBIT C

C-2


Exhibit D

Designated Refinery Assets

 

    24” diameter crude oil line from six 10” flanges from double-loop terminal pump discharge lines block valves to tank 281-TF-200 (length of pipe is 12,900 ft.)

 

    Storage tank 281-TF-200

 

    18” diameter outlet from tank 281-TF-200 to pumps

 

    Pump 40-P-514 and 40-P-22A as a spare

 

    12” diameter P-20 transfer line (formerly the 509 line) from discharge of the pumps to Pier 2 and Pier 3

 

    Hoses at the piers from the transfer line to the barge.

 

    Marine vapor combustion Unit for Piers 2 and 3.

 

    Crude tanks 001-TF-200, 0026-TF-200, 005-TF-200, 006-TF-200 (alternative tanks, as mutually agreed), and associated tank mixing pumps and piping

 

    16” diameter dedicated crude unloading header (old no. 6 fuel oil line) to crude tanks named above

 

    16” no. 6 fuel oil line from the crude tank to the piers

 

    Natural gas supply line to the Marine Vapor Combustion Unit

 

E XHIBIT D

D-1

Exhibit 10.5

EXECUTION VERSION

 

 

 

TOLEDO TRUCK UNLOADING &

TERMINALING AGREEMENT

 

 

 


TABLE OF CONTENTS

 

Article 1  

Definitions and Construction.

     1   
Article 2  

Term.

     9   

Article 3

 

Terminaling; Ancillary Services.

     9   
Article 4  

Custody, Title and Risk of Loss.

     12   
Article 5  

Specification and Contamination.

     13   
Article 6  

Condition and Maintenance of the Terminal.

     14   
Article 7  

Inspection, Access and Audit Rights.

     15   
Article 8  

Scheduling.

     16   
Article 9  

Vapor Recovery.

     16   
Article 10  

Additional Covenants.

     16   
Article 11  

Representations.

     18   
Article 12  

Insurance.

     19   
Article 13  

Force Majeure, Damage or Destruction.

     19   
Article 14  

Suspension of Refinery Operations.

     20   
Article 15  

Right of First Refusal.

     21   
Article 16  

Shutdown or Idling of Refinery.

     24   
Article 17  

Event of Default: Remedies Upon Event of Default.

     26   
Article 18  

Indemnification.

     27   
Article 19  

Limitation on Damages.

     28   
Article 20  

Confidentiality.

     29   
Article 21  

Choice of Law.

     30   
Article 22  

Assignment.

     30   
Article 23  

Notices.

     31   
Article 24  

No Waiver; Cumulative Remedies.

     32   
Article 25  

Nature of Transaction and, Relationship of Parties.

     33   
Article 26  

Arbitration Provision.

     33   
Article 27  

General.

     34   

 

i


Exhibit A   

Ancillary Services Fees

Exhibit B   

Product and Product Quality

Exhibit C   

Nomination and Scheduling

Exhibit D   

Designated Refinery Assets

 

ii


TOLEDO TRUCK UNLOADING & TERMINALING AGREEMENT

This Toledo Truck Unloading & Terminaling Agreement (this “ Agreement ”) is made and entered into as of the Commencement Date, by and between PBF Holding Company LLC, a Delaware limited liability company (the “ Company ”), and PBF Logistics LP, a Delaware limited partnership (the “ Operator ”) (each referred to individually as a “ Party ” or collectively as the “ Parties ”).

WHEREAS , the Operator operates a truck unloading facility located in the Company’s north tank farm in Toledo, Ohio (together with existing or future modifications or additions, the “ Terminal ”);

WHEREAS , the Parties are entering into this Agreement to provide for the rights and obligations of the Parties with respect to the Terminal; and

WHEREAS , the Parties desire to record the terms and conditions upon which the Operator shall provide terminaling services to the Company at the Terminal on a non-exclusive basis and the Operator shall serve as operator of the Terminal and bailee of all Products in the custody of the Operator and owned or held by the Company or any of the Company Designees.

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

Article 1 Definitions and Construction.

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

Acquisition Proposal ” has the meaning specified in Section 15.3(a) .

Adjustment ” has the meaning specified in Section 3.6(a) .

Affiliate ” means, with respect to a specified Person, any other Person controlling, controlled by or under common control with that first Person. As used in this definition, the term “control” includes (a) with respect to any Person having voting securities or the equivalent and elected directors, managers or Persons performing similar functions, the ownership of or power to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the power to vote in the election of directors, managers or Persons performing similar functions, (b) ownership of 50% or more of the equity or equivalent interest in any Person and (c) the ability to direct the business and affairs of any Person by acting as a general partner, manager or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, the Company and its subsidiaries (other than the Operator and its subsidiaries), on the one hand, and the Operator and its subsidiaries, on the other hand, shall not be considered Affiliates of each other.

Agreement ” has the meaning specified in the preamble to this document.

 

1


Ancillary Services ” means the services to be provided by the Operator to the Company at the Terminal that are set forth on Exhibit A , as well as any other ancillary services requested in accordance with Section 3.4 .

Ancillary Services Fees ” means, for any month during the Term, the fees set forth on Exhibit A , to be paid by the Company pursuant to Section 3.4 during that month for Ancillary Services.

Applicable Law ” means any applicable statute, law, regulation, Environmental Law, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by, any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including all of the terms and provisions of the applicable common law of such Governmental Authority), as interpreted and enforced at the time in question.

Arbitrable Dispute ” means any and all disputes, controversies and other matters in question between the Operator, on the one hand, and the Company, on the other hand, arising under or in connection with this Agreement.

Barrel ” means forty-two (42) net U.S. gallons, measured at 60° F and 1 atmospheric pressure.

bpd ” means barrels per day.

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, State of New Jersey or the State of Ohio.

Capital Expenditure ” means any expenditure incurred to acquire or upgrade a fixed asset.

Change in Law ” has the meaning specified in Section 3.6(a) .

Change of Control ” means PBF Energy Company LLC or any of its majority owned direct or indirect subsidiaries ceases to control the general partner of the Operator.

Claimant ” has the meaning specified in Article 26 .

Commencement Date ” means May 14, 2014.

Company ” has the meaning specified in the preamble to this Agreement.

Company Designee ” means, collectively, each Person designated by the Company, including any Person acting as an intermediator of all or any portion of the Products or any third party.

 

2


Company Indemnitees ” has the meaning specified in Section 18.1 .

Company Inspectors ” has the meaning specified in Section 7.1 .

Company’s Share ” means a number, expressed as a percentage, equal to the quotient of (a) the greater of (i) the total Barrels throughput by the Company and any Company Designee at the Terminal, in the aggregate, during the sixth-month period preceding the date of determination or (ii) the Minimum Throughput Commitment during such period, and (b) the total Barrels throughput by all Persons at the Terminal during such period.

Confidential Information ” means all information, documents, records and data (including this Agreement, except to the extent required to be made public in a filing with the Securities and Exchange Commission or another Governmental Authority or pursuant to the rules and regulations of any national securities exchange) that a Party furnishes or otherwise discloses to the other Party (including any such items furnished prior to the execution of this Agreement), together with all analyses, compilations, studies, memoranda, notes or other documents, records or data (in whatever form maintained, whether documentary, computer or other electronic storage or otherwise) prepared by the receiving Party which contain or otherwise reflect or are generated from such information, documents, records and data; provided , however , that the term “ Confidential Information ” does not include any information that (a) at the time of disclosure or thereafter is or becomes generally available to or known by the public (other than as a result of a disclosure by the receiving Party), (b) is developed by the receiving Party without reliance on any Confidential Information or (c) is or was available to the receiving Party on a nonconfidential basis from a source other than the disclosing Party that, insofar as is known to the receiving Party after reasonable inquiry, is not prohibited from transmitting the information to the recipient by a contractual, legal or fiduciary obligation to the disclosing Party.

Contract Quarter ” means a three-month period that commences on January 1, April 1, July 1 or October 1, and ends on March 31, June 30, September 30 or December 31, respectively, except that the initial Contract Quarter shall commence on the Commencement Date and end on June 30, 2014 and the final Contract Quarter shall end on the last day of the Term.

Contract Year ” means a year that commences on January 1 and ends on the last day of December of such year, except that the initial Contract Year shall commence on the Commencement Date and the final Contract Year shall end on the last day of the Term.

control ” (including with correlative meaning, the term “ controlled by ”) means, as used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

Defaulting Party ” has the meaning specified in Section 17.2 .

Designated Refinery Assets ” has the meaning specified in Section 16.1 .

Disposition Notice ” has the meaning specified in Section 15.3(a) .

 

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Environmental Law ” means all federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally enforceable requirements and rules of common law now or hereafter in effect, relating to pollution or protection of human health and the environment, safety, and occupational health, including the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Clean Water Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, OSHA, and other similar federal, state or local health and safety, and environmental conservation and protection laws, each as amended from time to time.

Environmental Permit ” means any permit, approval, identification number, license, registration, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law.

ET ” means the prevailing time in the Eastern time zone.

Event of Default ” has the meaning specified in Section 17.1 .

Excess Throughput ” has the meaning specified in Section 3.3 .

First ROFR Acceptance Deadline ” has the meaning specified in Section 15.3(a) .

Force Majeure ” means acts of God, strikes, lockouts or other industrial disturbances, acts of a public enemy, wars, terrorism, blockades, insurrections, riots, storms, floods, interruptions in the ability to have safe passage in navigable waterways or rail lines, washouts, other interruptions caused by acts of nature or the environment, arrests, the order of any court or Governmental Authority claiming or having jurisdiction while the same is in force and effect, civil disturbances, explosions, fires, leaks, releases, breakage, accident to machinery, vessels, storage tanks or lines of pipe or rail lines, inability to obtain or unavoidable delay in obtaining material or equipment, inability to obtain or distribute Products, feedstocks, other products or materials necessary for operation because of a failure of third-party pipelines or rail lines or any other causes whether of the kind herein enumerated or otherwise not reasonably within the control of the Party claiming suspension and which by the exercise of commercially reasonable efforts such Party is unable to prevent or overcome; provided , however , a Party’s inability to perform its economic obligations hereunder shall not constitute an event of Force Majeure.

Force Majeure Notice ” has the meaning specified in Section 13.1 .

Force Majeure Party ” has the meaning specified in Section 13.1 .

Force Majeure Period ” has the meaning specified in Section 13.1 .

Governmental Authority ” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

 

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Hart-Scott-Rodino Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Index Change ” means the Producer Price Index is no longer published or the method of calculating the Producer Price Index is changed so that the Producer Price Index no longer reflects general increases in prices in the broad United States economy.

Initial Term ” has the meaning specified in Section 2.1 .

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, cause of action, equitable or injunctive relief, or judicial or administrative order and any Costs arising from compliance or non-compliance with Environmental Law.

Minimum Throughput Capacity ” means, with respect to each Contract Quarter, an aggregate amount of throughput capacity equal to 4,000 bpd of Products, multiplied by the number of calendar days in such Contract Quarter; provided , however , that for the purposes of this Agreement, the period from the Commencement Date through September 30, 2014 shall be treated as one Contract Quarter.

Minimum Throughput Commitment ” means, with respect to each Contract Quarter, an aggregate amount of Products received at the Terminal equal to at least 4,000 bpd of Products, multiplied by the number of calendar days in such Contract Quarter; provided , however , that for the purposes of this Agreement, the period from the Commencement Date through September 30, 2014 shall be treated as one Contract Quarter.

Nomination ” has the meaning specified in Exhibit C .

Non-Defaulting Party ” means the Party other than the Defaulting Party.

Notice Period ” has the meaning specified in Section 14.1 .

Off-Specification Product ” means Product that fails to meet the specifications set forth in Exhibit B.

Offer Price ” has the meaning specified in Section 15.3(a) .

Omnibus Agreement ” means that Omnibus Agreement, dated as of the date hereof, by and among the Company, PBF Energy Company LLC, PBF Logistics GP LLC, and the Operator.

Operation and Management Services and Secondment Agreement ” means that Operation and Management Services and Secondment Agreement, dated as of the date hereof, by and among the Company, the Operator, Delaware City Refining Company LLC, Toledo Refining Company LLC, PBF Logistics GP LLC, and Delaware City Terminaling Company LLC.

Operator ” has the meaning specified in the preamble to this Agreement.

 

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Operator Indemnitees ” has the meaning specified in Section 18.2 .

OSHA ” means Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq.

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

Permitted Lien ” means (a) liens for real estate taxes, assessments, sewer and water charges or other governmental charges and levies not yet delinquent; (b) liens for taxes, assessments, judgments, governmental charges or levies, or claims not yet delinquent or the non-payment of which is being diligently contested in good faith by appropriate proceedings and for which adequate reserves have been set aside; (c) liens of mechanics, laborers, suppliers, workers and materialmen incurred in the ordinary course of business for sums not yet due or being diligently contested in good faith; and (d) liens incurred in the ordinary course of business in connection with worker’s compensation and unemployment insurance or other types of social security benefits.

Permanent Refinery Shutdown ” has the meaning specified in Section 16.1(a) .

Person ” means any individual, corporation, partnership, limited 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.

Prime Rate ” means the rate of interest quoted in The Wall Street Journal , Bonds, Rates & Yields Section as the Prime Rate.

Producer Price Index ” shall have the meaning ascribed to such term by the United States Bureau of Labor Statistics.

Product ” means any of the products listed on Exhibit B , as from time to time amended by mutual agreement of the Parties.

Proposed Transferee ” has the meaning specified in Section 15.3(a) .

Prudent Industry Practice ” means, as of the relevant time, those methods and acts generally engaged in or applied by the refining, pipeline or terminaling industries (as applicable) in the United States that, in the exercise of reasonable judgment in light of the circumstances known at the time of performance, would have been expected to accomplish the desired result at a reasonable cost consistent with functionality, reliability, safety and expedition with due regard for health, safety, security and environmental considerations. Prudent Industry Practice is not intended to be limited to the optimum practices, methods or acts to the exclusion of others, but rather is intended to include reasonably acceptable practices, methods and acts generally engaged in or applied by the refining, pipeline or terminaling industries (as applicable) in the United States.

Receiving Party Personnel ” has the meaning specified in Section 20.4 .

 

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Refinery ” means the petroleum refinery located in Toledo, Ohio owned and operated by the Company’s Affiliates.

Refinery Asset Option Notice ” has the meaning specified in Section 16.1(b) .

Refinery Asset Option Period ” has the meaning specified in Section 16.1(f) .

Refinery Asset Purchase Option ” has the meaning specified in Section 16.1(b) .

Renewal Term ” has the meaning specified in Section 2.1 .

Required Permits ” has the meaning specified in Section 10.1 .

Respondent ” has the meaning specified in Article 26 .

Restoration ” has the meaning specified in Section 6.2(b) .

ROFR Acceptance Deadlines ” has the meaning specified in Section 15.3(a).

ROFR Asset ” means the Terminal and each asset that comprises the Terminal and is material to the operation thereof.

ROFR Governmental Approval Deadline ” has the meaning specified in Section 15.3(c) .

ROFR Response ” has the meaning specified in Section 15.3(a) .

Sale Assets ” has the meaning specified in Section 15.3(a) .

Second ROFR Acceptance Deadline ” has the meaning specified in Section 15.3(a) .

Services ” has the meaning specified in Section 3.1 .

Shortfall ” has the meaning specified in Section 3.7 .

Shortfall Payment ” has the meaning specified in Section 3.7 .

Special Damages ” has the meaning specified in Article 19 .

Supplier Inspector ” means any Person selected by the Company to perform any and all inspections required by the Company or the Company Designee in a commercially reasonable manner at the Company’s own cost and expense that is acting on behalf of the Company or the Company Designee and that (a) is a Person who performs sampling, quality analysis and quantity determination or similar services of the Products purchased and sold under any agreement between the Company (or its Affiliates) and the Company Designee, (b) is not an Affiliate of any Party and (c) in the reasonable judgment of the Company, is qualified and reputed to perform its services in accordance with Applicable Law and Prudent Industry Practice.

Suspension Notice ” has the meaning specified in Section 14.1 .

 

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Term ” has the meaning specified in Section 2.1 .

Terminal ” has the meaning specified in the recitals.

Terminal Maintenance ” has the meaning specified in Section 6.2(a) .

Terminaling Service Fee ” has the meaning set forth in Section 3.1 .

Termination Notice ” has the meaning specified in Section 13.2 .

Transfer ” means to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of, whether in one or a series of transactions.

Section 1.2 Construction of Agreement .

(a) Unless otherwise specified, all references herein are to the Articles, Sections and Exhibits of this Agreement and all Exhibits are incorporated herein.

(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.

(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 reenacted from time to time.

(i) 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.

Section 1.3 No Presumption . 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.

 

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Article 2 Term.

Section 2.1 Term . The initial term of this Agreement (the “ Initial Term ”) shall commence at 12:00 a.m., ET, on the Commencement Date and shall continue until 11:59 p.m., ET, on the first December 31 following the seventh (7 th ) anniversary of the Commencement Date. Thereafter, subject to the last sentence of this paragraph, the Company shall have a unilateral option to extend this Agreement for two additional five (5) year periods on the same terms and conditions set forth herein (each, a “ Renewal Term ”). The Initial Term and the Renewal Terms are sometimes referred to collectively herein as the “ Term .” In order to exercise its option to extend this Agreement for a Renewal Term, the Company shall notify the Operator in writing not less than twelve (12) months prior to the expiration of the Initial Term or any Renewal Term, as applicable.

Section 2.2 Termination . The Parties may terminate this Agreement prior to the end of the Term (but are under no obligation to do so) (a) as they may mutually agree in writing, (b) pursuant to a Termination Notice in accordance with Section 13.2 , (c) pursuant to a Suspension Notice in accordance with Section 14.1 , (d) pursuant to a default in accordance with Section 17.2 or (e) pursuant to Section 3.6(c) .

Article 3 Terminaling; Ancillary Services.

Section 3.1 Services . Subject to the terms of this Agreement, the Operator shall provide the following services (the “ Services ”) to the Company hereunder: receipt, unloading, handling, throughput, custody and delivery of the Company’s (and its subsidiaries’ and the Company Designee’s) Product at the Terminal. During each Contract Quarter during the Term, the Company (on its own behalf and on behalf of its subsidiaries and the Company Designee) shall throughput or, if it does not throughput, pay for in accordance with Section 3.7 , in the aggregate, at least the Minimum Throughput Commitment at the Terminal and the Operator shall make available to the Company throughput capacity at the Terminal (and provide the Services as reasonably requested by the Company in connection therewith subject to the terms hereof), at all times sufficient to allow the Company to throughput the Minimum Throughput Commitment at the Terminal.

Section 3.2 Terminaling Service Fee . The Company shall pay a terminaling services fee (the “ Terminaling Service Fee ”) for the volumes of Products it actually throughputs at the Terminal of $1.00 per Barrel (which is inclusive of the Company providing the Operator with access to the Terminal) for all throughput up to the Minimum Throughput Commitment.

Section 3.3 Excess Throughput . The Company shall have the right to throughput volumes in excess of its Minimum Throughput Commitment (“ Excess Throughput ”), up to the then-available capacity of the Terminal, as reasonably determined by the Operator in good faith at any time (after giving effect to the physical and operational constraints of the Terminal and the capacity contractually committed to third parties). In accordance with Section 3.1 , the Company shall pay the Operator the applicable per-Barrel Terminaling Service Fee for any Excess Throughput.

 

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Section 3.4 Ancillary Services . Upon request by the Company, the Operator shall provide Ancillary Services to the Company at the Terminal. From time-to-time, the Company may request that the Operator provide additional Ancillary Services to the Company at the Terminal upon customary terms in accordance with Prudent Industry Practice so long as such additional Ancillary Services are reasonably related to the Services or existing Ancillary Services; provided , however , that in the event any requested additional Ancillary Service requires the Operator to make Capital Expenditures, such Capital Expenditures shall be subject to Section 3.10(b) and the Operator shall not be required to provide such additional Ancillary Service until the Operator is able to do so after using reasonable efforts in compliance with Section 3.10(b) ; provided , further , the Operator shall not be required to perform any additional Ancillary Service if it reasonably believes the performance thereof will materially adversely interfere with, or be detrimental to, the operation of the Terminal. The Company shall pay the Ancillary Services Fees listed on Exhibit A for such services. The Company may, at any time on reasonable prior notice, revoke or modify any instructions it has previously given, whether such previous instructions relate to a specific Service or Ancillary Service or are instructions relating to an ongoing Service or Ancillary Service. The Operator shall not be required to perform any requested Service or Ancillary Service if it reasonably believes such Service or Ancillary Service violates Applicable Law.

Section 3.5 Annual Fee Escalator . All fees set forth in this Agreement, including the Terminaling Service Fee and the Ancillary Services Fees, shall be adjusted on January 1 of each Contract Year, commencing on January 1, 2015, (a) by an amount equal to the increase or decrease, if any, in the Producer Price Index during the previous Contract Year and (b) by an amount equal to the increase, if any, in the individual out-of-pocket costs that increase greater than the Producer Price Index reasonably incurred by the Operator in connection with providing the Services and Ancillary Services; provided , however , that no fee shall be decreased below the initial fee for such service provided in this Agreement; provided , further , that the Operator shall use commercially reasonable efforts to mitigate any such rise in out-of-pocket costs incurred by the Operator in connection with providing the Services and Ancillary Services. In the event of an Index Change, the Company and the Operator shall negotiate in good faith to agree on a new index that gives comparable protection against inflation that the Producer Price Index gave as of the date hereof, and, for all periods following the date of such Index Change, such new index shall replace the Producer Price Index for all purposes herein. If the Company and the Operator are unable to agree, a new index will be determined by arbitration in accordance with Article 26 and, for all periods following the date of such Index Change, such new index shall replace the Producer Price Index for all purposes herein.

Section 3.6 Change in Law .

(a) In the event that any applicable existing laws, codes, regulations, permit conditions or other authorizations are amended or new laws, codes, regulations, permit conditions or other authorizations are enacted or promulgated after the Commencement Date that require a material Capital Expenditure in the Terminal, or the acquisition of a permit from a Governmental Authority, in each case, in order to provide the Services and Ancillary Services (a “ Change in Law ”), the Operator may, by written notice to the Company, request to negotiate an adjustment (an “ Adjustment ”) in the Terminaling Service Fee or other fees and charges paid hereunder to cover the Company’s Share of the reasonable, incremental, out-of-pocket operating and

 

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maintenance costs the Operator would incur to comply with the Change in Law, including a return of capital expended and a return on such capital at a rate of return of 11% per annum, amortized over the remaining Term.

(b) If the Operator requests to negotiate an Adjustment pursuant to Section 3.6(a) : (i) the Operator shall provide the Company with complete access (subject to reasonable confidentiality provisions) to information and documentation regarding such proposed Adjustment, including the nature and cost of the contemplated improvements or permit, as applicable, the options for financing or otherwise amortizing such cost, the Operator’s assessment that such improvements are the most feasible means of complying with the Change in Law and the manner in which the Company’s Share of such costs are determined; and (ii) the Parties shall be obligated to negotiate in good faith to agree to an Adjustment as described in Section 3.6(a) .

(c) If, despite good faith negotiations, the Parties are unable to agree to an Adjustment pursuant to Section 3.6(a) in sufficient time for the Operator to take such action as shall be necessary to comply with the Change in Law, then the amount of such fee increases will be determined by arbitration in accordance with Article 26 , and such fee increases will be effective as of the effective time of such Change in Law; provided , however , that in the event the fees paid hereunder increase in the aggregate as a result of Changes in Law by more than 200%, then the Company may terminate this Agreement.

Section 3.7 Shortfall Payments . If, during any Contract Quarter, the Company throughputs aggregate volumes less than the Minimum Throughput Commitment, as adjusted pursuant to Section 6.2 , for such Contract Quarter (a “ Shortfall ”), then (in addition to Terminaling Service Fee) the Company shall pay the Operator an amount (a “ Shortfall Payment ”) equal to the Terminaling Service Fee multiplied by the difference between (a) the Minimum Throughput Commitment and (b) the volume of Products actually delivered to the Terminal by the Company during the applicable Contract Quarter. The Parties acknowledge and agree that there shall be no carry-over of deficiency volumes with respect to the Minimum Throughput Commitment and the payment by the Company of the Shortfall Payment shall relieve the Company of any obligation to meet such Minimum Throughput Commitment for the relevant Contract Quarter. The Parties further acknowledge and agree that there shall not be any carry-over of volumes in excess of the Minimum Throughput Commitment to any subsequent Contract Quarter.

Section 3.8 Invoices . The Operator shall invoice the Company monthly (or, in the case of any Shortfall Payments, quarterly) for all fees and payments under this Agreement. The Company will make payments to the Operator on a monthly (or, in the case of any Shortfall Payments, quarterly) basis during the Term with respect to amounts due to the Operator under this Agreement in the prior month (or, in the case of any Shortfall Payments, Contract Quarter) ten (10) days after its receipt of such invoice. Any past due payments owed to the Operator hereunder shall accrue interest, payable on demand, at the Prime Rate plus 400 basis points from the due date of the payment through the actual date of payment. Payment of any fee or Shortfall Payment pursuant to this Section 3.8 shall be made by wire transfer of immediately available funds to an account designated in writing by the Operator. If any such fee shall be due and payable on a day that is not a Business Day, such payment shall be due and payable on the next succeeding Business Day.

 

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Section 3.9 Operating Hours . The Operator agrees to keep the Terminal open for receipt and redelivery of the Company’s and the Company Designee’s Products twenty-four (24) hours a day, seven (7) days a week.

Section 3.10 Regulatory Costs; Reimbursement .

(a) Taxes. The Company shall reimburse the Operator for all taxes that the Operator incurs in connection with this Agreement unless prohibited by Applicable Law.

(b) Capital Expenditures. The Company may request that the Operator make certain Capital Expenditures at the Terminal and the Operator shall make such Capital Expenditures; provided , however , that the Operator shall not be required to make any such Capital Expenditure if such Capital Expenditure would materially adversely affect the operation of the Terminal, as determined in the reasonable discretion of the Operator. The Company shall reimburse the Operator for the Company’s Share of any such Capital Expenditure. For the avoidance of doubt, except as provided in the Omnibus Agreement or the Operation and Management Services and Secondment Agreement, any maintenance required for the Operator to continue to provide the services specified hereunder shall be paid for by the Operator.

(c) Payment Terms. All of the foregoing reimbursements shall be made in accordance with the payment terms set forth in Section 3.8 herein.

Section 3.11 Third-Party Arrangements . The Operator may throughput volumes for third parties; provided , however , that such arrangements do not prevent the Operator from fulfilling its obligations to the Company hereunder, including the obligation to make the Minimum Throughput Capacity available to the Company during the Term. Nothing herein shall be deemed to provide the Company with exclusive rights to services at the Terminal.

Article 4 Custody, Title and Risk of Loss.

Section 4.1 Title . Subject to Section 22.2 , the Company or the Company Designee shall at all times during the Term retain title to the Products handled or throughput by the Company or the Company Designee at the Terminal, and such Products shall remain the Company’s or the Company Designee’s exclusive property. The Company hereby represents that, at all times during the Term, the Company or the Company Designee holds exclusive title to the Products throughput or handled by the Company at the Terminal; provided , however , that each of the Company and the Company Designee may at any time permit liens on the Company’s or the Company Designee’s Products at the Terminal.

Section 4.2 Compliance with Laws . During the time any Products are held or throughput at the Terminal, the Operator, in its capacity as operator of the Terminal shall be solely responsible for compliance with (and the Operator shall comply with) all Applicable Laws pertaining to the possession, handling, use and processing of such Products at the Terminal.

Section 4.3 Volumetric Losses and Gains . Subject to the other provisions in this Agreement, title and risk of loss to all of the Products handled or throughput by the Company or the Company Designee at the Terminal shall remain at all times with the Company or the Company Designee, as applicable. Unless the Operator experiences a spill or other release of Product while Product is in the Operator’s custody, all volumetric losses and gains in Product shall be for the Company’s or the Company Designee’s account, as applicable.

 

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Section 4.4 Custody . During the Term, the Operator shall hold all Products at the Terminal solely as bailee, and agrees that when any such Products are redelivered to the Company or the Company Designee, the Company or the Company Designee shall have good title thereto (to the extent the Company had good title prior to delivery at the Terminal) free and clear of any liens, security interests, encumbrances and claims of any kind whatsoever created or caused to be created by the Operator, other than Permitted Liens; provided , however , that notwithstanding anything herein to the contrary the Operator hereby waives, relinquishes and releases any and all liens, including, any and all warehouseman’s liens, custodian’s liens, rights of retention or similar rights under all applicable laws, which the Operator would or might otherwise have under or with respect to any Products handled hereunder. During the Term, none of the Operator or any of its Affiliates shall (and the Operator shall not permit any of its Affiliates or any other Person to) use any such Products for any purpose. Solely in its capacity as bailee, the Operator shall have custody of Product throughput under this Agreement from the time such Product passes the delivery point until such time that the Products pass the outlet flange of the Terminal.

Article 5 Specification and Contamination.

Section 5.1 Delivery Specifications . The Company shall not (and shall cause the Company Designee to not) deliver to the Terminal any Off-Specification Product; provided , however , that in the event Off-Specification Product is delivered by the Company or the Company Designee to the Terminal, and the Company or the Company Designee fails to instruct the Operator to return such Off-Specification Product to the Company or the Company Designee, as applicable, the Operator shall provide the Services to the Company or the Company Designee, as applicable, and the Company will receive on its or the Company Designee’s behalf, such Off-Specification Product at its own expense; provided , further , that in the event Off-Specification Product is delivered by the Company or the Company Designee to the Terminal and the Company or the Company Designee instructs the Operator to return such Off-Specification Product to the Company or the Company Designee, as applicable, the Operator shall return such Off-Specification Product to the Company (on its or the Company Designee’s behalf) at the Company’s own expense. In the event Off-Specification Product is delivered by the Company or the Company Designee, and in the reasonable opinion of the Operator, the Services are unable to be provided as a result of the Off-Specification Product (whether due to a failure to comply with law, safety considerations or otherwise), the Operator shall notify the Company and the Company shall be responsible for taking possession of such Off-Specification Product without the Services being provided.

Section 5.2 Unloading Specifications . If all Product meets the relevant specifications set forth in Exhibit B when it enters the Terminal, it is the responsibility of the Operator to ensure that all Products leaving the Terminal shall meet the same relevant specifications, and shall not leave the Terminal with different specifications.

Section 5.3 Contamination . The Operator shall use at least Prudent Industry Practice to ensure that no Products shall be contaminated with scale or other materials, chemicals, water or any other impurities.

 

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Article 6 Condition and Maintenance of the Terminal.

Section 6.1 Interruption of Service . The Operator shall use commercially reasonable efforts to (i) minimize the interruption of service at the Terminal, (ii) minimize the impact of any such interruption on the Company and the Company Designee and (iii) notwithstanding any such interruption of service, make the Terminal available to the Minimum Throughput Capacity. The Operator shall inform the Company at least sixty (60) days in advance (or promptly, in the case of an unplanned interruption) of any anticipated partial or complete interruption of service at the Terminal, including relevant information about the nature, extent, cause and expected duration of the interruption and the actions the Operator is taking to resume full operations; provided , however , that the Operator shall not have any liability for any failure to notify, or delay in notifying, the Company of any such matters except to the extent the Company has been materially damaged by such failure or delay.

Section 6.2 Maintenance and Repair Standards .

(a) Subject to Article 13 , during the Term the Operator shall maintain the Terminal with sufficient aggregate capacity to throughput a volume of the Company’s Products at least equal to the Minimum Throughput Capacity; provided , however , that the Operator’s obligations may be temporarily suspended during the occurrence of, and for the entire duration of, routine repair and maintenance consistent with Prudent Industry Practice that prevents the Operator from providing the Minimum Throughput Capacity (“ Terminal Maintenance ”) so long as the Operator has complied with its obligations set forth in Section 6.1 . In the event the Terminal Maintenance is not as a result of Force Majeure, the Parties shall reasonably cooperate with each other so as to (i) ensure that such Terminal Maintenance does not unnecessarily interfere with any of the Company’s or the Company Designee’s purchase or sale commitments, (ii) ensure that such Terminal Maintenance otherwise accommodates, to the extent reasonably practicable, other commercial or market considerations that the Company deems relevant and (iii) reasonably minimize the effect of such Terminal Maintenance on the Services and the Ancillary Services.

(b) To the extent the Company is prevented for seven (7) or more days in any Contract Quarter from throughputting volumes at the Terminal equal to at least 4,000 bpd for reasons caused by the Operator (or any of its employees, agents or contractors) other than Force Majeure and other than causes due to actions of the Company or the Company Designee (and any of their respective contractors, employees or representatives excluding the Operator and its employees, agents and representatives), then the Minimum Throughput Commitment shall be proportionately reduced to the extent of the difference between the Minimum Throughput Capacity and the amount that the Operator can effectively throughput at the Terminal (prorated for the portion of the Contract Quarter during which the Minimum Throughput Capacity was unavailable) regardless of whether actual throughput amounts prior to the reduction were below the Minimum Throughput Commitment. At such time as the Operator is capable of throughputting volumes equal to at least 4,000 bpd at the Terminal, the Company’s obligation to throughput the full Minimum Throughput Commitment shall be restored as of such time. To the extent the Company is prevented for seven (7) or more days in any Contract Quarter from throughputting volumes at the Terminal equal to at least 4,000 bpd, other than due to a Force Majeure event, and the throughput at the Terminal falls below the Minimum Throughput Capacity as described above in this paragraph (b), the Operator shall make all commercially reasonable repairs at the Terminal to restore the capacity of the

 

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Terminal to that required for throughput of the Minimum Throughput Capacity (“ Restoration ”). All of such Restoration shall be at the Operator’s cost and expense, unless any damage creating the need for such repairs was caused by the negligence or willful misconduct of the Company, the Company Designee or their respective contractors, employees, agents (excluding for the avoidance of doubt, the Operator and its contractors, employees and agents) or customers, in which case such Restoration shall be at the Company’s cost and expense to the extent caused by the negligence or willful misconduct of the Company, the Company Designee or their respective employees, agents or customers.

Article 7 Inspection, Access and Audit Rights.

Section 7.1 Inspection . At any reasonable times during normal business hours and upon reasonable prior notice, the Company, the Company Designee and their respective representatives (including one or more Supplier Inspector, collectively, the “ Company Inspectors ”) shall have the right to enter and exit the Operator’s premises in order to have access to the Terminal, to observe the operations of the Terminal and to conduct such inspections as the Company or the Company Designee may wish to have performed in connection with this Agreement, including to enforce its rights and interests under this Agreement; provided , however , that (a) each of the Company Inspectors shall follow routes and paths to be reasonably designated by the Operator or security personnel retained by the Operator, (b) each of the Company Inspectors shall observe all security, fire and safety regulations while in, around or about the Terminal, (c) when accessing the facilities of the Operator, the Company Inspectors shall at all times comply with Applicable Law and such safety directives and guidelines as may be furnished to the Company or the Company Designee by the Operator by any means (including in writing, orally, electronically or through the posting of signs) from time to time, and (d) the Company or the Company Designee shall be liable for any personal injury to its representatives or any damage caused by such Company Inspectors in connection with such access to the Terminal. Without limiting the generality of the foregoing, the Operator shall regularly grant the Company Inspectors such access from the last day of each month until the third (3 rd ) Business Day of the ensuing month. Notwithstanding any of the foregoing, if an Event of Default with respect to the Operator has occurred and is continuing, the Company Inspectors shall have unlimited and unrestricted access to the Terminal, for so long as such Event of Default continues.

Section 7.2 Access . The Company, the Company Designee and their respective representatives, upon reasonable notice and during normal working hours, shall have access to the accounting records and other documents maintained by the Operator, or any of its contractors and agents, which relate to this Agreement, and shall have the right to audit such records at any reasonable time or times during the Term and for a period of up to two (2) years after termination of this Agreement. The Company or the Company Designee shall have the right to conduct such audit no more than once per calendar quarter and each audit shall be limited in time to no more than the present and prior two (2) calendar years. Claims as to defects in quality shall be made by written notice within ninety (90) days after the delivery in question or shall be deemed to have been waived. The right to inspect or audit such records shall survive termination of this Agreement for a period of two (2) years following the end of the Term. The Operator 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 end of the Term. Additionally, the Operator shall make available a copy of any meter calibration report, to be available for inspection upon reasonable

 

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request by the Company or the Company Designee at the Terminal following any calibration. Notwithstanding any of the foregoing, if an Event of Default with respect to the Operator has occurred and is continuing, the Company Inspectors shall have unlimited and unrestricted access to the accounting records and other documents maintained by the Operator with respect to the Terminal, for so long as such Event of Default continues.

Article 8 Scheduling.

The Operator shall provide the Company and the Company Designee non-discriminatory, priority access rights at the Terminal to throughput the Company’s and the Company Designee’s Products up to the Minimum Throughput Capacity. All deliveries, receipts, handling and throughput of Product hereunder shall be made in strict accordance with the Operator’s current reasonable operating, scheduling and nomination procedures for the Terminal, which (a) the Operator shall provide to the Company on the date hereof, (b) the Operator shall not materially modify without the prior written consent of the Company, not to be unreasonably withheld, modified or delayed; provided , however , that the Operator may make any modifications it reasonably deems necessary to comply with or observe any Applicable Law or for health, safety, environmental, security or other similar concerns consistent with Prudent Industry Practice, and (c) shall allow the throughput of the grades and qualities of Product specified in Exhibit B.

Article 9 Vapor Recovery .

During the Term, the Company’s Share of any liquids recovered through the vapor recovery at the Terminal will be returned to the Company.

Article 10 Additional Covenants.

Section 10.1 Required Permits . During the Term, unless the Company has agreed to maintain such for the benefit of the Operator, the Operator shall, at its sole cost and expense (directly or through one of its or the Company’s Affiliates), obtain, apply for, maintain, monitor, renew, and modify, as appropriate, any license, authorization, certification, filing, recording, permit, waiver, exception, variance, franchise, order or other approval with or of any Governmental Authority pertaining or relating to the operation of the Terminal (the “ Required Permits ”) as currently operated; provided , however , that if any Required Permits require the signature of, or any action by, the Company or the Company Designee, the Company shall reasonably cooperate with the Operator (at the Operator’s expense) so that the Operator may obtain and maintain such Required Permits. The Operator shall not do anything in connection with the performance of its obligations under this Agreement that causes a termination or suspension of the Required Permits.

Section 10.2 Additional Operator Covenants . The Operator hereby:

(a) (i) confirms that it will post at the Terminal such reasonable placards as the Company or the Company Designee, as applicable, requests stating that the Company or the Company Designee is the owner of specific Products held at the Terminal; (ii) agrees that it will take all actions necessary to maintain such placards in place for the Term; and (iii) agrees to furnish documents reasonably acceptable to the Company, the Company Designee and their respective lenders and intermediators and to cooperate with the Company in ensuring and demonstrating that Product titled in the Company’s or the Company Designee’s name shall not be subject to any lien on the Terminal;

 

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(b) acknowledges and agrees that the Company or the Company Designee may file a UCC-1 or other financing statement with respect to the Products handled or throughput at the Terminal, and the Operator shall cooperate with the Company in executing such financing statements as the Company or the Company Designee deems necessary or appropriate;

(c) agrees that, subject to Section 4.3 , no loss allowances shall be applied to the Products handled or throughput at the Terminal;

(d) agrees to maintain all necessary leases, easements, licenses and rights-of-way necessary for the operation and maintenance of the Terminal; and

(e) agrees that, in the event of any Product spill, leak or discharge or any other environmental pollution caused by or in connection with the use of the Terminal, the Operator shall promptly commence containment or clean-up operations as required by any Governmental Authorities or Applicable Law or as the Operator deems appropriate or necessary and shall notify or arrange to notify the Company or the Company Designee immediately of any such spill, leak or discharge and of any such operations.

The Company and the Company Designee shall take all reasonable steps to cooperate with the Operator in connection with the Operator’s performance of each of the covenants in this Section 10.2 , in each case, at the Operator’s sole expense.

Section 10.3 Additional Company Covenants . The Company hereby agrees:

(a) to replace or repair, at its own expense, any part of the Terminal that is destroyed or damaged through any negligence or willful misconduct of the Company, the Company Designee (acting in such capacity), or any of their agents or employees (acting in such capacity), or any Company Inspector; and

(b) to not make any alteration, additions or improvements to the Terminal or remove any part thereof, without the prior written consent of the Operator, such consent to be at the Operator’s sole discretion.

Section 10.4 Existing Obligations . The execution of this Agreement by the Parties does not reduce any existing obligations of such Parties and does not confer any additional obligation or responsibility on the Company in connection with: (a) any existing or future environmental condition at the Terminal, including, the presence of a regulated or hazardous substance on or in environmental media at the Terminal (including the presence in surface water, groundwater, soils or subsurface strata, or air), including the subsequent migration of any such substance; (b) any Environmental Law; (c) the Required Permits; or (d) any requirements arising under or relating to any Applicable Law pertaining or relating to the ownership and operation of the Terminal.

 

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Section 10.5 Records .

(a) Each Party shall (i) maintain the records required to be maintained by Applicable Law and shall make such records available to the other Party upon reasonable request and (ii) immediately notify the other Party of any violation or alleged violation of any Applicable Law relating to any Products throughput and handled under this Agreement and, upon request, shall provide to the other Party all evidence of environmental inspections or audits by any Governmental Authority with respect to such Products.

(b) All records or documents provided by any Party to any other Party shall, to the reasonable knowledge of the providing Party, accurately and completely reflect the facts about the activities and transactions to which they relate. Notwithstanding anything herein to the contrary, no Party shall be required to provide to the other Party any document that is determined by the disclosing Party’s legal counsel to be protected by an attorney-client privilege or attorney work product doctrine. Each Party shall promptly notify the other Party if at any time such Party has reason to believe that any records or documents previously provided to the other Party are no longer accurate or complete.

Article 11 Representations.

Section 11.1 Representations of the Operator . The Operator represents and warrants to the Company that (a) this Agreement, the rights obtained and the duties and obligations assumed by the Operator hereunder, and the execution and performance of this Agreement by the Operator, do not directly or indirectly violate any Applicable Law with respect to the Operator or any of its properties or assets, the terms and provisions of the Operator’s organizational documents or any agreement or instrument to which the Operator or any of its properties or assets are bound or subject; (b) the execution and delivery of this Agreement by the Operator has been authorized by all necessary action; (c) the Operator has the full and complete authority and power to enter into this Agreement and to provide the services hereunder; (d) no further action on behalf of the Operator, or consents of any other party, are necessary for the provision of services hereunder; and (e) upon execution and delivery by the Operator, this Agreement shall be a valid and binding agreement of the Operator 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).

Section 11.2 Representations of the Company . The Company represents and warrants to the Operator that (a) this Agreement, the rights obtained and the duties and obligations assumed by the Company hereunder, and the execution and performance of this Agreement by the Company, do not directly or indirectly violate any Applicable Law with respect to the Company or any of its property or assets, the terms and provisions of the Company’s organizational documents or any agreement or instrument to which the Company or any of its property or assets are bound or subject; (b) the execution and delivery of this Agreement by the Company has been authorized by all necessary action; (c) the Company has the full and complete authority and power to enter into this Agreement; and (d) upon execution and delivery by the Company, this Agreement shall be a valid and binding agreement of the Company 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).

 

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Article 12 Insurance.

The Operator, directly or through one of its or the Company’s Affiliates, shall procure and maintain in full force and effect throughout the Term insurance in sufficient amounts and coverage to be in accordance with Prudent Industry Practice. Such policies shall be endorsed to name the Company and any Company Designee as a loss payee with respect to any of the Company’s or the Company Designee’s Products in the care, custody or control of the Operator.

Article 13 Force Majeure, Damage or Destruction.

Section 13.1 Force Majeure . In the event that a Party (the “ Force Majeure Party ”) is rendered unable, wholly or in part, by a Force Majeure event to perform its obligations under this Agreement, then such Party shall within a reasonable time after the occurrence of such event of Force Majeure deliver to the other Party written notice (a “ Force Majeure Notice ”) including full particulars of the Force Majeure event, and the obligations of the Parties, to the extent they are affected by the Force Majeure event, shall be suspended for the duration of any inability so caused; provided , however , that (a) prior to the second (2 nd ) anniversary of the Commencement Date, the Company shall be required to continue to make payments (i) for the Terminaling Service Fees for volumes actually throughput under this Agreement, (ii) for the Ancillary Services Fees, if any, for Ancillary Services performed, and (iii) for any Shortfall Payments unless, in the case of (iii), the Force Majeure event is an event that adversely affects the Operator’s ability to perform the Services (including making the Minimum Throughput Capacity available to the Company), in which case Shortfall Payments shall not be paid to the extent of the Force Majeure event’s effect on the Operator’s ability to perform the Services and the Terminaling Service Fees shall only be paid as provided under (a)(i) above, and (b) from and after the second (2 nd ) anniversary of the Commencement Date, the Company shall be required to continue to make payments (x) for the Terminaling Service Fees for volumes actually throughput under this Agreement and (y) for the Ancillary Services Fees, if any, for the Ancillary Services actually performed under this Agreement. The Force Majeure Party shall identify in such Force Majeure Notice the approximate length of time that it believes in good faith such Force Majeure event shall continue (the “ Force Majeure Period ”). The Company shall be required to pay any amounts accrued and due under this Agreement at the time of the start of the Force Majeure event. The cause of the Force Majeure event shall so far as possible be remedied with all reasonable efforts, except that no Party shall be compelled to resolve any strikes, lockouts or other industrial or labor disputes other than as it shall determine to be in its best interests. Prior to the second (2 nd ) anniversary of the Commencement Date, any suspension of the obligations of the Parties under this Section 13.1 as a result of a Force Majeure event that adversely affects the Operator’s ability to perform the services it is required to perform under this Agreement shall extend the Term for the same period of time as such Force Majeure event continues (up to a maximum of one year) unless this Agreement is terminated under Section 13.2 .

Section 13.2 Termination due to Force Majeure . If the Force Majeure Party advises in any Force Majeure Notice that it reasonably believes in good faith that the Force Majeure Period shall continue for more than twelve (12) consecutive months beyond the second (2 nd ) anniversary

 

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of the Commencement Date, then at any time after the delivery of such Force Majeure Notice, either Party may deliver to the other Party a notice of termination (a “ Termination Notice ”), which Termination Notice shall become effective not earlier than twelve (12) months after the later to occur of (a) delivery of the Termination Notice and (b) the second (2 nd ) anniversary of the Commencement Date; provided , however , that such Termination Notice shall be deemed cancelled and of no effect if the Force Majeure Period ends before the Termination Notice becomes effective, and, upon the cancellation of any Termination Notice, the Parties’ respective obligations hereunder shall resume as soon as reasonably practicable thereafter, and the Term shall be extended by the same period of time as is required for the Parties to resume such obligations. After the second (2 nd ) anniversary of the Commencement Date and following delivery of a Termination Notice, the Operator may terminate this Agreement, to the extent affected by the Force Majeure event, upon sixty (60) days prior written notice to the Company in order to enter into an agreement to provide any third party the services provided to the Company under this Agreement; provided , however , that the Operator shall not have the right to terminate this Agreement for so long as the Company continues to make Shortfall Payments.

Article 14 Suspension of Refinery Operations.

Section 14.1 Suspension of Refinery Operations . From and after the second (2 nd ) anniversary of the Commencement Date, in the event that the Company decides to permanently or indefinitely suspend all or substantially all crude oil refining operations at the Refinery for a period that shall continue for at least twelve (12) consecutive months, the Company may provide written notice to the Operator of the Company’s intent to terminate this Agreement (the “ Suspension Notice ”). Such Suspension Notice shall be sent at any time (but not prior to the second (2 nd ) anniversary of the Commencement Date) after the Company has notified the Operator of such suspension and, upon the expiration of the period of twelve (12) months (which may run concurrently with the twelve (12) month period described in the immediately preceding sentence) following the date such notice is sent (the “ Notice Period ”), this Agreement shall terminate. If the Company notifies the Operator more than two (2) months prior to the expiration of the Notice Period of its intent to resume operations at the Refinery, then the Suspension Notice shall be deemed revoked and this Agreement shall continue in full force and effect as if such Suspension Notice had never been delivered. During the Notice Period, the Company shall remain liable for Shortfall Payments and all payments per Section 3.6 and Section 3.10 with respect of Capital Expenditures hereunder. Subject to Section 14.1 and after the fifth (5 th ) anniversary of the Commencement Date, during the Notice Period, the Operator may terminate this Agreement upon sixty (60) days prior written notice to the Company in order to enter into an agreement to provide any third party the services provided to the Company under this Agreement.

Section 14.2 Notice of Suspension . If all or substantially all refining operations at the Refinery are suspended for any reason (including refinery turnaround operations and other scheduled maintenance), then the Company shall remain liable for Shortfall Payments under this Agreement for the duration of the suspension, unless and until this Agreement is terminated as provided in Section 14.1 . The Company shall provide at least ninety (90) days’ prior written notice whenever practical of any suspension of operations at the Refinery due to a planned turnaround or scheduled maintenance that affects or will affect the Services or the Ancillary Services; provided , however , that the Company shall not have any liability for any failure to notify, or delay in notifying, the Operator of any such suspension except to the extent the Operator has been materially damaged by such failure or delay.

 

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Article 15 Right of First Refusal.

Section 15.1 Grant of ROFR . The Operator hereby grants to the Company a right of first refusal on any proposed Transfer (other than a grant of a security interest to a bona fide third-party lender or a Transfer to an Affiliate of the Operator) of any ROFR Asset; provided , however , that the Parties acknowledge and agree that nothing in this Article 15 shall prevent or restrict the Transfer of partnership interests, limited liability interests, equity or ownership interests or other securities of the Operator or create a right of first refusal as a result thereof; provided , further , that the Company may, without consent or approval from the Operator, assign its rights under this Article 15 to any Affiliate of the Company.

Section 15.2 Acknowledgement regarding Consents . The Parties acknowledge that all potential Transfers of ROFR Assets pursuant to this Article 15 are subject to obtaining any and all required written consents of Governmental Authorities and other third parties and to the terms of all existing agreements in respect of the ROFR Assets, as applicable; provided , however , that the Operator represents and warrants that, to its knowledge after reasonable investigation, there are no terms in such agreements that would materially impair the rights granted to the Company pursuant to this Article 15 with respect to any ROFR Asset.

Section 15.3 Procedures for Transfer of ROFR Asset .

(a) In the event the Operator proposes to Transfer any of the ROFR Assets (other than a grant of a security interest to a bona fide third-party lender or a Transfer to an Affiliate of the Operator) pursuant to a bona fide third-party offer (an “ Acquisition Proposal ”), then the Operator shall, prior to entering into any such Acquisition Proposal, first give notice in writing to the Company (a “ Disposition Notice ”) of its intention to enter into such Acquisition Proposal. The Disposition Notice shall include any material terms, conditions and details as would be necessary for the Company to determine whether to exercise its right of first refusal with respect to the Acquisition Proposal, which terms, conditions and details shall at a minimum include: the name and address of the prospective acquirer (the “ Proposed Transferee ”), the ROFR Assets subject to the Acquisition Proposal (the “ Sale Assets ”), the purchase price offered by such Proposed Transferee (the “ Offer Price ”), reasonable detail concerning any non-cash portion of the proposed consideration, if any, to allow the Company to reasonably determine the fair market value of such non-cash consideration, the Operator’s estimate of the fair market value of any non-cash consideration and all other material terms and conditions of the Acquisition Proposal that are then known to the Operator. To the extent the Proposed Transferee’s offer consists of consideration other than cash (or in addition to cash), the Offer Price shall be deemed equal to the amount of any such cash plus the fair market value of such non-cash consideration. In the event the Company and the Operator are able to agree on the fair market value of any non-cash consideration or if the consideration consists solely of cash, the Company will provide written notice of its decision regarding the exercise of its right of first refusal to purchase the Sale Assets (the “ ROFR Response ”) to the Operator within sixty (60) days of its receipt of the Disposition Notice (the “ First ROFR Acceptance Deadline ”). In the event the Company and the Operator are unable to agree on the fair market value of any non-cash consideration prior to the First ROFR Acceptance

 

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Deadline, the Company shall indicate its desire to determine the fair market value of such non-cash consideration pursuant to the procedures outlined in the remainder of this Section 15.3 in a ROFR Response delivered prior to the First ROFR Acceptance Deadline. If no ROFR Response is delivered by the Company prior to the First ROFR Acceptance Deadline, then the Company shall be deemed to have waived its right of first refusal with respect to such Sale Asset. In the event (i) the Company’s determination of the fair market value of any non-cash consideration described in the Disposition Notice is less than the fair market value of such consideration as determined by the Operator in the Disposition Notice and (ii) the Company and the Operator are unable to mutually agree upon the fair market value of such non-cash consideration within sixty (60) days after the Company notifies the Operator of its determination thereof, the Operator and the Company will engage a mutually agreed upon, nationally recognized investment banking firm that is not currently engaged in business with either of the Parties to determine the fair market value of the non-cash consideration. In the event the Parties are unable to agree upon an investment banking firm, each Party will select a nationally recognized investment banking firm, and the two investment banking firms so chosen will select a third investment banking firm to serve as the investment banking firm for purposes of this Article 15 . The investment banking firm will determine the fair market value of the non-cash consideration within thirty (30) days of its engagement and furnish the Company and the Operator its determination. The fees of the investment banking firm will be split equally between Parties. Once the investment banking firm has submitted its determination of the fair market value of the non-cash consideration, the Company will provide a ROFR Response to the Operator within thirty (30) days after the investment banking firm has submitted its determination (the “ Second ROFR Acceptance Deadline ” and together with the First ROFR Acceptance Deadline, the “ ROFR Acceptance Deadlines ”). If no ROFR Response is delivered by the Company prior to the Second ROFR Acceptance Deadline, then the Company shall be deemed to have waived its right of first refusal with respect to such Sale Asset.

(b) If the Company elects in a ROFR Response delivered prior to the First ROFR Acceptance Deadline or Second ROFR Acceptance Deadline, as applicable, to exercise its right of first refusal with respect to a Sale Asset, within sixty (60) days of the delivery of the ROFR Response, such ROFR Response shall be deemed to have been accepted by the Operator and the Operator shall thereafter enter into a purchase and sale agreement with the Company providing for the consummation of the Acquisition Proposal upon the terms set forth in the ROFR Response. Unless otherwise agreed between the Company and the Operator, the terms of the purchase and sale agreement will include the following:

(i) the Company will agree to deliver the Offer Price in cash (unless the Company and the Operator agree that such consideration will be paid, in whole or in part, in equity securities of the Company or of an Affiliate of the Company, an interest-bearing promissory note or similar instrument, or any combination thereof);

(ii) the Operator will represent that it has valid fee or leasehold title, as applicable, to the Sale Asset that is sufficient to operate the Sale Assets in accordance with their historical use, subject to all recorded matters and all physical conditions in existence on the closing date for the purchase of the applicable Sale Asset, plus any other such matters as the Company may approve (and if the Company desires to obtain any title insurance with respect to the Sale Asset, the full cost and expense of obtaining the same (including the cost of title examination, document duplication and policy premium) shall be borne by the Company);

 

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(iii) the Operator will grant to the Company the right, exercisable at the Company’s risk and expense prior to the delivery of the ROFR Response, to make such surveys, tests and inspections of the Sale Asset as the Company may deem desirable, so long as such surveys, tests or inspections are neither destructive nor invasive and do not damage the Sale Asset or interfere with the activities of the Operator;

(iv) the Company will have the right to terminate its obligation to purchase the Sale Asset under this Article 15 if the results of any searches under Section 15.3(b)(ii) or (iii) above are, in the reasonable opinion of the Company, unsatisfactory;

(v) the closing date for the purchase of the Sale Asset shall occur no later than one hundred eighty (180) days following receipt by the Operator of the ROFR Response pursuant to Section 15.3(a) ;

(vi) the Operator and the Company shall use commercially reasonable efforts to do or cause to be done all things that may be reasonably necessary or advisable to effectuate the consummation of any transactions contemplated by this Section 15.3(b) , including causing its respective Affiliates to execute, deliver and perform all documents, notices, amendments, certificates, instruments and consents required in connection therewith;

(vii) except to the extent modified in the Acquisition Proposal, the sale of any Sale Assets shall be made on an “as is,” “where is” and “with all faults” basis, and the instruments conveying such Sale Assets shall contain appropriate disclaimers; and

(viii) neither the Operator nor the Company shall have any obligation to sell or buy the Sale Assets if any of the consents referred to in Section 15.2 has not been obtained.

(c) The Company and the Operator shall cooperate in good faith in obtaining all necessary governmental and other third-party approvals, waivers and consents required for the closing of the purchase and sale agreement described in Section 16.1(b) . Any such closing shall be delayed, to the extent required, until the third (3 rd ) Business Day following the expiration of any required waiting periods under the Hart-Scott-Rodino Act; provided , however , that such delay shall not exceed sixty (60) days following the one hundred eighty (180) days referred to in Section 15.3(b)(v) (the “ ROFR Governmental Approval Deadline ”) and, if governmental approvals and waiting periods shall not have been obtained or expired, as the case may be, by such ROFR Governmental Approval Deadline, then the Company shall be deemed to have waived its right of first refusal with respect to the Sale Assets described in the Disposition Notice and thereafter the Operator shall be free to consummate the Transfer to the Proposed Transferee, subject to Section 15.3(d)(ii) .

(d) If the Transfer to the Proposed Transferee (i) in the case of a Transfer other than a Transfer permitted under Section 15.3(c) , is not consummated in accordance with the terms of the Acquisition Proposal within the later of (A) one hundred eighty (180) days after the applicable ROFR Acceptance Deadline and (B) three (3) Business Days after the satisfaction of all governmental approval or filing requirements, if any, or (ii) in the case of a Transfer permitted under Section 15.3(c) , is not consummated within the later of (A) sixty (60) days after the ROFR Governmental Approval Deadline and (B) three (3) Business Days after the satisfaction of all

 

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governmental approval or filing requirements, if any, then in each case the Acquisition Proposal shall be deemed to lapse, and the Operator may not Transfer any of the Sale Assets described in the Disposition Notice without complying again with the provisions of this Article 15 if and to the extent then applicable.

Article 16 Shutdown or Idling of Refinery.

Section 16.1 Shutdown or Idling of Refinery . In the event of a Permanent Refinery Shutdown, the Operator shall have the right to purchase the assets identified in Exhibit D (the “ Designated Refinery Assets ”) at their fair market value at the time of sale in accordance with this Section 16.1 .

(a) A “ Permanent Refinery Shutdown ” shall be deemed to have occurred upon the earlier of (i) the cessation of all or substantially all commercial operation of the Refinery with no current intent on the part of the Company to resume all or substantially all commercial operation thereof or (ii) a change to the Refinery’s current SIC code (i.e., 4610) applicable to crude oil refining. The Company shall exercise commercially reasonable efforts to provide the Operator with at least sixty (60) days advance notice of a Permanent Refinery Shutdown.

(b) The Operator may at any time during the two-year period following notice of a Permanent Refinery Shutdown exercise its purchase option pursuant to this Article 16 (the “ Refinery Asset Purchase Option ”) by providing written notice (a “ Refinery Asset Option Notice ”) to the Company. Promptly upon receipt of such Refinery Asset Option Notice, the Company shall provide the Operator and its designees with access to such information regarding the Designated Refinery Assets as shall be reasonable and customary for the Operator to conduct diligence in accordance with Prudent Industry Practice on assets such as the Designated Refinery Assets. The Operator shall have a period of not less than ninety (90) days to evaluate such information.

(c) The Operator and the Company shall, for a period of thirty (30) days following completion of Operator’s diligence in accordance with Prudent Industry Practice, negotiate in good faith to reach agreement on the terms for a purchase of the Designated Refinery Assets by the Operator; provided , however , that the Parties agree that: (i) the terms (including price) of any such purchase and sale will be on terms customary for the sale of assets of this nature and otherwise agreeable to both the Operator and the Company; (ii) the purchase price shall be paid at closing in cash; (iii) the Company shall not be obligated to make any representations as to the condition of the Designated Refinery Assets or any portion thereof; (iv) the Operator shall not be required to purchase the real property on which the Designated Refinery Assets are located (in which case the Operator shall be entitled to lease or be granted easements to all or a portion of such real property); (v) the Company shall convey all operating and maintenance records reasonably necessary for the operation of the Designated Refinery Assets; and (vi) the Company shall convey the Designated Refinery Assets free and clear of any charge, claim, covenant, equitable interest, equitable servitude, lien, option, pledge security interest, right of first refusal, or other restriction of any kind, including any restriction on use, transfer, receipt of income, or exercise of any other attribute

 

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of ownership; provided , however , that the Company shall receive a reasonable easement with respect to the Designated Refinery Assets in order to access such Designated Refinery Assets in connection with the Company or its Affiliates potential refining operations.

(d) If the Operator and the Company are unable to agree on the terms (including price) for a sale of the Designated Refinery Assets, the Operator and the Company shall engage a mutually agreed upon, nationally recognized investment banking firm to determine any terms (including price) as to which the Parties are unable to agree with respect to the sale of the Designated Refinery Assets. In the event the Parties are unable to agree upon an investment banking firm, each Party will select a nationally recognized investment banking firm, and the two investment banking firms so chosen will select a third investment banking firm to serve as the investment banking firm for purposes of this Section 16.1 . The investment banking firm shall: (i) base the terms of purchase and sale on those that are reasonable and customary for the sale of industrial assets such as the Designated Refinery Assets, subject to the provisions of this Section 16.1 ; (ii) determine the fair market value of the Designated Refinery Assets based on their then-current operations; and (iii) consider the age, condition, maintenance history, replacement cost, ongoing operating costs, regulatory enforcement actions or fines in effect and other factors the investment banking firm considers relevant to fair market value.

(e) All fees of the investment banking firm incurred in connection with the Refinery Asset Purchase Option will be split equally between the Operator and the Company.

(f) Once the investment banking firm resolves all terms of the sale regarding the Refinery Asset Purchase Option that the Parties are unable to agree upon, the Operator will have the right, but not the obligation, for a period of ninety (90) days from the investment banking firm’s resolution (such period, the “ Refinery Asset Option Period ”) to purchase the Designated Refinery Assets on terms (including price) agreed to by the Parties (as supplemented by any terms determined by the investment banking firm). The Operator shall notify the Company, in writing delivered during the Refinery Asset Option Period, of its intention to purchase the Designated Refinery Assets. Failure to provide such notice within the Refinery Asset Option Period shall be deemed to constitute a decision by the Operator not to exercise its Refinery Asset Purchase Option.

(g) If the Operator notifies the Company in writing during the Refinery Asset Option Period of its intention to exercise its Refinery Asset Purchase Option, both Parties shall be obligated to enter into an agreement incorporating the terms (including price) either agreed to by the Parties or determined by the investment banking firm. If the Operator fails to execute and deliver such an agreement within sixty (60) days of expiration of the Refinery Asset Option Period, the Operator’s Refinery Asset Purchase Option shall be deemed to have lapsed.

 

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Article 17 Event of Default: Remedies Upon Event of Default.

Section 17.1 Event of Default . Notwithstanding any other provision of this Agreement, but subject to Article 26 , the occurrence of any of the following shall constitute an “ Event of Default ”:

(a) any Party fails to make payment when due (i) under Article 3 within five (5) Business Days after a written demand therefor or (ii) under any other provision hereof within seven (7) Business Days;

(b) other than a default described in Sections 17.1(a) or 17.1(c) , if the Company or the Operator fails to perform any material obligation or covenant to the other under this Agreement, which is not cured to the reasonable satisfaction of any other Party within fifteen (15) Business Days after the date that such Party receives written notice that such obligation or covenant has not been performed;

(c) any Party breaches any representation or warranty made by such Party hereunder, or such warranty or representation proves to have been incorrect or misleading in any material respect when made; provided , however , that if such breach is curable, such breach is not cured to the reasonable satisfaction of the other Party within fifteen (15) Business Days after the date that such Party receives notice that corrective action is needed;

(d) any Party files a petition or otherwise commences or authorizes the commencement of a proceeding or case under any bankruptcy, reorganization or similar law for the protection of creditors, or have any such petition filed or proceeding commenced against it and such proceeding is not dismissed for sixty (60) days; and

(e) the Operator sells or permits the creation of, or suffers to exist any security interest, lien, encumbrance, charge or other claim of any nature (other than Permitted Liens or liens or liens that existed with respect to such Product prior to the throughput by the Company or the Company Designee hereunder) with respect to any of the Products.

Section 17.2 Termination in the Event of Default . Except as set forth in Section 17.1(d) , without limiting any other provision of this Agreement, if an Event of Default with respect to the Company or the Operator (such defaulting Party, the “ Defaulting Party ”) has occurred and is continuing, the Non-Defaulting Party shall have the right, immediately and at any time(s) thereafter, to terminate this Agreement upon written notice to the Defaulting Party.

Section 17.3 Other Remedies . Without limiting any other rights or remedies hereunder, if an Event of Default occurs and the Company is the Non-Defaulting Party, the Company may, in its discretion, (a) withhold or suspend its obligations, including any of its delivery or payment obligations, under this Agreement, (b) reclaim and repossess any and all of its Products held at the Terminal or elsewhere on the Operator’s premises, and (c) otherwise arrange for the disposition of any of its Products in such manner as it elects.

Section 17.4 Set Off . If an Event of Default occurs, the Non-Defaulting Party may, without limitation on its rights under this Article 17 , 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 agreement or contract or otherwise and whether or not then due). Any net amount due hereunder shall be payable by the Party owing such amount within one (1) Business Day of termination.

 

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Section 17.5 No Preclusion of Rights . The Non-Defaulting Party’s rights under this Section 17.5 shall be in addition to, and not in limitation 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, as a secured party or under any other credit support. The Defaulting Party shall indemnify and hold the Non-Defaulting Party harmless from all costs and expenses, including reasonable attorney fees, incurred in the exercise of any remedies hereunder.

Article 18 Indemnification.

Section 18.1 Indemnification by Operator . The Operator shall defend, indemnify and hold harmless the Company, the Company Designee, their respective Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “ Company Indemnitees ”) from and against any Liabilities directly or indirectly arising out of (a) any breach by the Operator of any covenant or agreement contained herein or made in connection herewith or any representation or warranty of the Operator made herein or in connection herewith proving to be false or misleading, (b) any failure by the Operator, its Affiliates or any of their respective employees, representatives, agents or contractors to comply with or observe any Applicable Law, or (c) 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 Operator, its Affiliates or any of their respective employees, representatives, agents or contractors in the exercise of any of the rights granted hereunder or the handling or transportation of any Products hereunder, except to the extent of the Company’s obligations under Section 18.2 below, and except to the extent that such injury, disease, death, or damage to or loss of property, fine or penalty was caused by the gross or sole negligence or willful misconduct on the part of the Company Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, the Operator’s liability to the Company Indemnitees pursuant to this Section 18.1 shall be net of any insurance proceeds actually received by the Company Indemnitees or any of their respective Affiliates from any third party with respect to or on account of the damage or injury which is the subject of the indemnification claim. The Company agrees that it shall, and shall cause the other Company Indemnitees to, (i) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Company Indemnitees are entitled with respect to or on account of any such damage or injury, (ii) notify the Operator of all potential claims against any third party for any such insurance proceeds, and (iii) keep the Operator fully informed of the efforts of the Company Indemnitees in pursuing collection of such insurance proceeds.

Section 18.2 Indemnification by Company . The Company shall defend, indemnify and hold harmless the Operator, its Affiliates, and their respective directors, officers, employees, representatives, agents, contractors, successors and permitted assigns (collectively, the “ Operator Indemnitees ”) from and against any Liabilities directly or indirectly arising out of (a) 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

 

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be false or misleading, (b) any personal injury incurred by any representative of the Company or the Company Designee (including any Supplier Inspector or Company Inspector) while on the Operator’s property, (c) any failure by the Company, the Company Designee, their respective Affiliates or any of their respective employees, representatives (including any Supplier Inspector or Company Inspector), agents or contractors to comply with or observe any Applicable Law, or (d) 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, the Company Designee, their respective Affiliates or any of their respective employees, representatives (including any Supplier Inspector or Company Inspector), agents or contractors in the exercise of any of the rights granted hereunder or the refining or storage of any Products hereunder, except to the extent of the Operator’s obligations under Section 18.1 above, and except to the extent that such injury, disease, death, or damage to or loss of property, fine or penalty was caused by the gross or sole negligence or willful misconduct on the part of the Operator Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, the Company’s liability to the Operator Indemnitees pursuant to this Section 18.2 shall be net of any insurance proceeds actually received by the Operator Indemnitees or any of their respective Affiliates from any third party with respect to or on account of the damage or injury which is the subject of the indemnification claim. The Operator agrees that it shall, and shall cause the other Operator Indemnitees to, (i) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Operator Indemnitees are entitled with respect to or on account of any such damage or injury, (ii) notify the Company of all potential claims against any third party for any such insurance proceeds, and (iii) keep the Company fully informed of the efforts of the Operator Indemnitees in pursuing collection of such insurance proceeds.

Section 18.3 EXPRESS REMEDY . THE FOREGOING INDEMNITIES ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE SOLE, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE, STRICT LIABILITY OR FAULT OF ANY OF THE INDEMNIFIED PARTIES.

Article 19 Limitation on Damages.

Notwithstanding anything to the contrary contained herein, neither Party shall be liable or responsible to the other Party or such other Party’s affiliated Persons for any consequential, punitive, special, incidental or exemplary damages, or for loss of profits or revenues (collectively referred to as “ Special Damages ”) incurred by such Party or its affiliated Persons that arise out of or relate to this Agreement, regardless of whether any such claim arises under or results from contract, tort, or strict liability; provided , however , that the foregoing limitation is not intended and shall not affect Special Damages in connection with any third-party claim or imposed in favor of unaffiliated Persons that are not Parties to this Agreement; provided , further , that to the extent an indemnitor hereunder receives insurance proceeds with respect to Special Damages that would be indemnified hereunder if not for this Article 19 , such indemnitor shall be liable up to the amount of such insurance proceeds (net any deductible and premiums paid with respect thereto).

 

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Article 20 Confidentiality.

Section 20.1 Obligations . Each Party shall use commercially reasonable efforts to retain the other Party’s Confidential Information in confidence and not disclose the same to any third party (other than a Company Designee, provided the Company Designee has agreed to adhere to this Article 20 , or any Receiving Party Personnel) nor use the same, except as authorized by the disclosing Party in writing or as expressly permitted in this Section 20.1 . Each Party further agrees to take the same care with the other Party’s Confidential Information as it does with its own, but in no event less than a reasonable degree of care.

Section 20.2 Required Disclosure . Notwithstanding Section 20.1 above, if the receiving Party becomes legally compelled to disclose the Confidential Information by a court, Governmental Authority or Applicable Law, including the rules and regulations of the Securities and Exchange Commission, or is required to disclose pursuant to the rules and regulations of any national securities exchange upon which the receiving Party or its parent entity is listed, any of the disclosing Party’s Confidential Information, the receiving Party shall promptly advise the disclosing Party of such requirement to disclose Confidential Information as soon as the receiving Party becomes aware that such a requirement to disclose might become effective, in order that, where possible, the disclosing Party may seek a protective order or such other remedy as the disclosing Party may consider appropriate in the circumstances. The receiving Party shall disclose only that portion of the disclosing Party’s Confidential Information that it is required to disclose and shall reasonably cooperate with the disclosing Party (at the disclosing Party’s cost) in allowing the disclosing Party to obtain such protective order or other relief.

Section 20.3 Return and Destruction of Information . Upon written request by the disclosing Party, all of the disclosing Party’s Confidential Information in whatever form shall be returned to the disclosing Party upon termination of this Agreement or destroyed with destruction certified by the receiving Party, without the receiving Party retaining copies thereof except that one copy of all such Confidential Information may be retained by a Party’s legal department solely to the extent that such Party is required to keep a copy of such Confidential Information pursuant to Applicable Law, and the receiving Party shall be entitled to retain any Confidential Information in the electronic form or stored on automatic computer back-up archiving systems during the period such backup or archived materials are retained under such Party’s customary procedures and policies; provided , however , that notwithstanding any termination or expiration of this Agreement, any Confidential Information retained by the receiving Party shall be maintained subject to confidentiality pursuant to the terms of this Section 20.3 , and such archived or back-up Confidential Information shall not be accessed except as required by Applicable Law for so long as such Confidential Information is retained.

Section 20.4 Receiving Party Personnel . The receiving Party will limit access to the Confidential Information of the disclosing Party to those of its employees, attorneys and contractors that have a need to know such information in order for the receiving Party to exercise or perform its rights and obligations under this Agreement (the “ Receiving Party Personnel ”). The Receiving Party Personnel who have access to any Confidential Information of the disclosing Party will be made aware of the confidentiality provisions of this Agreement, and will be required to abide by the terms thereof. Any third-party contractors that are given access to Confidential Information of a disclosing Party pursuant to the terms hereof shall be required to sign a written

 

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agreement pursuant to which such Receiving Party Personnel agree to be bound by the provisions of this Agreement, which written agreement will expressly state that it is enforceable against such Receiving Party Personnel by the disclosing Party.

Section 20.5 Survival . The obligation of confidentiality under this Article 20 shall survive the termination of this Agreement for a period of two (2) years.

Article 21 Choice of Law.

This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Subject to Article 26 , the Parties agree to the venue and jurisdiction of the federal or state courts located in the State of Delaware for the adjudication of all disputes arising out of this Agreement.

Article 22 Assignment.

Section 22.1 Assignment by the Company . Except as set forth in this Article 22 , the Company shall not assign its rights or obligations hereunder without the Operator’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided , however , that (a) the Company may assign this Agreement without the Operator’s consent in connection with a sale by the Company of its inventory of Products, or all or substantially all of the Refinery, including by merger, equity sale, asset sale or otherwise, so long as the transferee: (i) agrees to assume all of the Company’s obligations under this Agreement; and (ii) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by the Company in its reasonable judgment; and (b) the Company shall be permitted to make a collateral assignment of this Agreement solely to secure financing for itself or any of its Affiliates.

Section 22.2 Company Designee .

(a) Without the Operator’s consent, the Company shall be permitted to assign the Company’s rights to use, hold the Products in, and transport the Products through, the Terminal pursuant to this Agreement, to the Company Designee.

(b) The Company shall act as the Company Designee’s counterparty for all purposes of this Agreement, and the Operator shall be entitled to follow the Company’s instructions with respect to all of the Company Designee’s Products that are transported or handled by the Operator pursuant to this Agreement unless and until the Operator is notified by the Company Designee in writing that the Company is no longer authorized to act as the Company Designee’s counterparty, in which case the Operator shall thereafter follow the instructions of the Company Designee (or such other agent as the Company Designee may appoint) with respect to all the Company Designee’s Products that are transported or handled by the Operator pursuant to this Agreement. The Company shall be responsible for all the Company Designee’s payments to the Operator hereunder; provided , however , that the Operator shall accept payment in connection with this Agreement directly from any Company Designee and apply such payments against amounts owed by the Company hereunder. All volumes throughput by the Company Designee will be taken into account in the determination of whether the Company has satisfied its Minimum Throughput Commitment. During any time that this Agreement is assigned to the Company Designee, all

 

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provisions of this Agreement, as amended or adjusted by this Article 22 , shall be in full force and effect with respect to the Company Designee and the Company Designee’s Products as if the Company Designee were Party hereto in place of the Company.

Section 22.3 Assignment by the Operator . The Operator shall not assign its rights or obligations under this Agreement without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed; provided , however , that (a) subject to Article 15 hereof and Article VI of the Omnibus Agreement, the Operator may assign this Agreement without such consent in connection with a sale by the Operator of all or substantially all of the Terminal, including by merger, equity sale, asset sale or otherwise, so long as the transferee: (i) agrees to assume all of the Operator’s obligations under this Agreement; (ii) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by the Operator in its reasonable judgment; and (iii) is not a competitor of the Company, as determined by the Company in good faith; and (b) the Operator shall be permitted to make a collateral assignment of this Agreement solely to secure financing for the Operator and its Affiliates.

Section 22.4 Terms of Assignment . Any assignment that is not undertaken in accordance with the provisions set forth above shall be null and void ab initio . A Party making any assignment shall promptly notify the other Party of such assignment, regardless of whether consent is required. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

Section 22.5 Change of Control . The Parties’ obligations hereunder shall not terminate in connection with a Change of Control; provided , however , that in the case of a Change of Control, the Company shall have the option to extend the Term as provided in Section 2.1 , without regard to the notice period provided in the fourth sentence of Section 2.1 .

Article 23 Notices.

All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when delivered; (b) if mailed via the official governmental mail system, five (5) Business Days after mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (c) if mailed by an internationally recognized overnight express mail service such as Federal Express or UPS, one (1) Business Day after deposit therewith prepaid; or (d) if by email, one (1) Business Day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows:

If to the Company:

PBF Holding Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jeffrey Dill, General Counsel

Telecopy No: (973) 455-7500

Email: jeffrey.dill@pbfenergy.com

 

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with a copy, which shall not constitute notice, to:

PBF Energy Company LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jeffrey Dill, General Counsel

Telecopy No: (973) 455-7500

Email: jeffrey.dill@pbfenergy.com

If to the Operator:

PBF Logisitics LP

c/o PBF Logistics GP LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Jim Fedena, Senior VP, Logistics

Telecopy No: (973) 455-7500

Email: jim.fedena@pbfenergy.com

with a copy, which shall not constitute notice, to:

PBF Logistics GP LLC

One Sylvan Way, Second Floor

Parsippany, NJ 07054

Attn: Matt Lucey, Executive VP

Telecopy No: (973) 455-7500

Email: matt.lucey@pbfenergy.com

or to such other address or to such other person as either Party will have last designated by notice to the other Party.

Article 24 No Waiver; Cumulative Remedies.

Section 24.1 No Waivers . 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 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.

Section 24.2 Cumulative Remedies . 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.

 

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Article 25 Nature of Transaction and, Relationship of Parties.

Section 25.1 Independent Contractor . This Agreement shall not be construed as creating a partnership, association or joint venture among the Parties. It is understood that the Operator 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 the Operator, or any employee or agent of the Operator, an agent or employee of the Company.

Section 25.2 No Agency . No Party shall have the right or authority to negotiate, conclude or execute any contract or legal document with any third person in the name of the other Party; to assume, create, or incur any liability of any kind, express or implied, against or in the name of any of the other Party; or to otherwise act as the representative of the other Party, unless expressly authorized in writing by the other Party.

Article 26 Arbitration Provision.

Any and all Arbitrable Disputes (except to the extent injunctive relief is sought) shall be resolved through the use of binding arbitration using, in the case of an Arbitrable Dispute involving a dispute of an amount equal to or greater than $1,000,000 or non-monetary relief, three arbitrators, and in the case of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, one arbitrator, in each case in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Article 26 and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Article 26 will control the rights and obligations of the Parties. Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or the time period allowed by the applicable statute of limitations. Arbitration may be initiated by a Party (“ Claimant ”) serving written notice on the other Party (“ Respondent ”) that Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. Respondent shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If Respondent fails for any reason to name an arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed, and, in the of an Arbitrable Dispute involving a dispute of an amount less than $1,000,000, such third arbitrator shall act as the sole arbitrator, and the sole role of the first two arbitrators shall be to appoint such third arbitrator. Claimant will pay the compensation and expenses of the arbitrator named by or for it, and Respondent will pay the compensation and expenses of the arbitrator named by or for it. The costs of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. Claimant and Respondent will each pay one-half of the compensation and expenses of the third arbitrator. All arbitrators must (a) be neutral parties who have never been officers, directors or employees of the Operator, the Company or any of their Affiliates and (b) have not less than seven (7) years’ experience in the energy industry. The hearing will be conducted in the State of Delaware or the Philadelphia Metropolitan area and commence within thirty (30) days after the selection of the third arbitrator. The Company, the Operator and the arbitrators shall proceed diligently and in good faith in order that the award may

 

33


be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators will be binding on and non-appealable by the Parties hereto. The arbitrators shall have no right to grant or award Special Damages. Notwithstanding anything herein the contrary, the Company may not dispute any amounts with respect to an invoice delivered in accordance with Section 3.8 that the Company has not objected to within one hundred twenty (120) days of receipt thereof. No Event of Default shall occur if the subject matter underlying such potential Event of Default is the subject matter of any dispute that is pending resolution or arbitration under this Article 26 until such time that such dispute is resolved in accordance with this Article 26 .

Article 27 General.

Section 27.1 Severability . Whenever possible, each provision of this Agreement will be interpreted in such manner as to be valid and effective under Applicable Law, but if any provision of this Agreement or the application of any such provision to any person or circumstance will be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith with a view to substitute for such provision a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

Section 27.2 Entire Agreement . This Agreement, the Operation and Management Services and Secondment Agreement and the Omnibus Agreement together constitute the entire agreement among the Parties pertaining to the subject matter hereof and supersede all prior agreements and understandings of the Parties in connection therewith. No promise, representation or inducement has been made by any of the Parties concerning the subject matter of this Agreement and none of the Parties shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

Section 27.3 Time is of the Essence . Time is of the essence with respect to all aspects of each Party’s performance of any obligations under this Agreement.

Section 27.4 No Third-Party Beneficiaries . It is expressly understood that the provisions of this Agreement do not impart enforceable rights in anyone who is not a Party or successor or permitted assignee of a Party; provided , however , that upon written request from the Company, this Agreement will be amended by the Parties to make any Company Designee or lender or intermediator of the Company or any Company Designee a third-party beneficiary hereof.

Section 27.5 Further Assurances . In connection with this Agreement and all transactions contemplated by this Agreement, each signatory Party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

Section 27.6 Survival . All audit rights, payment, confidentiality and indemnification obligations and obligations under this Agreement shall survive the expiration or termination of this Agreement in accordance with their terms.

 

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Section 27.7 Counterparts . This Agreement may be executed in one or more counterparts (including by facsimile or portable document format (pdf)) for the convenience of the Parties hereto, each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement.

[ Remainder of Page Intentionally Left Blank ]

 

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement on the date first set forth above.

 

COMPANY:
PBF HOLDING COMPANY LLC
By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

OPERATOR:
PBF LOGISTICS LP
By: PBF Logistics GP LLC, its general partner
By:   /s/ Jeffrey Dill
Name:   Jeffrey Dill
Title:   Secretary

 

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Exhibit A

Ancillary Services Fees

 

     Service   

Fee or Specification

1.    Metering    To be agreed upon, if applicable during the Term.
2.    TruckManagement    To be agreed upon, if applicable during the Term.

If any additional ancillary services are requested by the Company in accordance with the Agreement, the Parties shall reasonably negotiate to determine the appropriate rates to be charged for such services.

E XHIBIT  A

 

A-1


Exhibit B

Product

Product : Crude Oil

Product Specifications:

API 30 – 45

H2S < 10 ppm in breathing zone

TVP < 11.1 psi

Pour Point < 0 degf

E XHIBIT  B

 

B-1


Exhibit C

Nomination and Scheduling

Nominations and Scheduling.

The Company will provide to the Operator, by email or facsimile, or by other means mutually agreed by the Operator and the Company from time to time, no later than the twenty-fifth (25th) day of each calendar month throughout the Term, a good faith monthly nomination (a “ Nomination ”) of the volume of Crude Oil that the Company projects it will deliver to the Terminal by truck during the following calendar month (to be delivered to the Terminal on a ratable basis throughout such month). The volume will be broken down per grade per supplier.

The Company will provide the Operator with intra-month revisions with respect to the Company’s then-current Nomination when information becomes available.

E XHIBIT  C

 

C-1


Exhibit D

Designated Refinery Assets

Designated Refinery Assets

    LACT Units piping (16-746, 16-738, 16-740, 16-736)
    LACT common header (16-729)
    TK405 fill from LACTs & Transmix (16-730)
    Crude tank (TK405) and associated fire suppression system
    LPG building
    Security Shack on Wheeling St.
    Emergency Response Equipment (specifically?)
    69Kv electrical feed along Railroad ROW from Toledo Edision
    Firewater piping, pumps and firewater reserve capacity (pond) in tank farm 2
    Local fire extinguishers at LACT units
    Mutual Aid contract with Oregon Fire Department
    Land occupied by the Truck Unloading Terminal
    Land or ROW for areas additional assets identified above
    Equipment to enable future tie into crude pipelines:
  ¡     Common lines
    TK405 booster (P-16019)
    P-16019 discharge line (16-137)
  ¡     SXL crude line
    Crude charge pumps suction line (16-8)
    Crude charge pumps (P-1655A & B)
    Crude charge pumps discharge line (16-5)
    New spool to tie in line 16-5 to SXL crude delivery line (16-65)
  ¡     BPL
    New spool to tie in line 16-137 to existing intermediate feed transfer line (16-327)
    Intermediate feed transfer line (16-15)
    Intermediate feed transfer line (16-312)
    Buckeye pump suction manifold (16-202)
    Buckeye pump suction manifold (16-725)
    Buckeye pump (P-16132)
    Buckeye pump discharge manifold (16-726)
    Buckeye line (Line 417)

E XHIBIT  D

 

D-1


  ¡     Mid Valley
    New spool to tie in line 16-137 to existing intermediate feed transfer line (16-327)
    Intermediate feed transfer line (16-15)
    Intermediate feed transfer line (16-312)
    Buckeye pump suction manifold (16-202)
    Buckeye pump suction manifold (16-725)
    Buckeye pump (P-16132)
    Buckeye pump discharge manifold (16-726)
    New spool to tie in pump discharge manifold (16-726) to Mid Valley crude deliver line

E XHIBIT  D

 

D-2