Exhibit 10.5
Amendment to
Crude Oil Sale and Supply Agreement
This Amendment to the Crude Oil Sale and Supply Agreement entered into as of
September 13, 2002, by and between Morgan Stanley Capital Group Inc. ("MSCG")
and The Premcor Refining Group Inc. ("Premcor") (the "Agreement"), is made and
entered into on October 1, 2002 (hereinafter referred to as this "First
Amendment"). Capitalized terms and references used and not defined herein shall
have the respective meanings ascribed to them in the Agreement, which is being
amended by this First Amendment.
WHEREAS, the MSCG and Premcor desire to amend the Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and the respective promises,
conditions and agreements contained herein, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, MSCG
and Premcor do hereby agree as follows:
ARTICLE 1
DEFINITIONS AND CONSTRUCTION
1.1 All headings herein are intended solely for convenience of reference
and shall not affect the meaning or interpretation of the provisions of this
Amendment.
1.2 Unless expressly provided otherwise, the word "including" as used
herein does not limit the preceding words or terms.
1.3 Each reference in the Crude Oil Sale and Supply Agreement to "this
Agreement", "herein" or words of like import referring to such Agreement shall
mean and be a reference to the Crude Oil Sale and Supply Agreement, as amended
by this First Amendment.
ARTICLE 2
AMENDMENT TO AGREEMENT
The Agreement is hereby amended, effective as of September 16, 2002, as
follows:
2.1 A new Section 4.8 is added as follows:
4.8 Initial Imbalances. The Parties hereby acknowledge and agree that
the MSCG shall purchase from Koch exactly 2,659,386 Barrels of Line Fill
Oil on October 1, 2002, of which 196,122 Barrels shall transfer from Koch
to MSCG in line in the Mesa Pipeline System, 1,540,925 Barrels shall
transfer from Koch to MSCG in line in the Mid-Valley Pipeline System, and
922,339 Barrels shall transfer from Koch to MSCG in line in the West Texas
Gulf Pipeline System. In the event that a Shipper Account Statement
reflects that the volume of Line Fill Oil actually transferred to MSCG on
October 1, 2002 and held on the Pipeline System's records in MSCG's name as
of that date differs from the foregoing
volumes of Line Fill Oil, MSCG and Premcor shall true-up the difference. If
the total volume of Line Fill Oil actually transferred from Koch to MSCG
exceeds 2,659,386 Barrels, MSCG shall pay Premcor for the difference in
volume, and if the total volume of Line Fill Oil actually transferred from
Koch to MSCG is less than 2,659,386 Barrels, Premcor shall pay MSCG for the
difference in volume, in either event at a price mutually determined
between the Parties in a commercially reasonable manner and in accordance
with the terms of the Agreement.
2.2 A new Section 7.5 is added as follows:
7.5 Renewal of Premcor Letter of Credit. At all times under this
Agreement, the Premcor Letter of Credit shall have an expiration date of
not less than 15 days. No later than 15 days prior to expiry of the Premcor
Letter of Credit, Premcor shall instruct the issuing bank to renew or
extend such Letter of Credit. Premcor's failure to amend and extend the
Premcor Letter of Credit no later than 15 days prior to the expiration
thereof (such an event, a "Non-Renewal Event") shall (x) entitle MSCG to
treat the full amount available for drawing under the Premcor Letter of
Credit as the outstanding amount due MSCG and to draw immediately on such
Letter of Credit in full without any prior notice or demand to Premcor and
(y) constitute an Event of Default under Article 11 without any notice or
grace period. Notwithstanding the foregoing and Section 2.1(c) of this
Agreement:
(a) in the event that MSCG makes a draw on the Premcor Letter of
Credit as a result of a Non-Renewal Event and elects in such event, in its
sole discretion, to hold the proceeds of such draw as cash collateral for
Premcor's obligations under this Agreement and not exercise its remedies
under Article 11, then (i) the Non-Renewal Event shall not be an Event of
Default and (ii) Premcor shall not be obligated to increase the amount
available to be drawn under the Premcor Letter of Credit to the extent of
such cash collateral; and
(b) in the event that MSCG makes a draw on the Premcor Letter of
Credit other than as a result of an Event of Default or a Non-Renewal
Event, then (i) MSCG shall hold the proceeds of such draw as cash
collateral for Premcor's obligations under this Agreement, (ii) such draw
shall not itself be deemed to be an Event of Default and (iii) Premcor
shall not be obligated to increase the amount available to be drawn under
the Premcor Letter of Credit to the extent of such cash collateral.
ARTICLE 3
MISCELLANEOUS
3.1 The Agreement is amended only as expressly modified by this First
Amendment. Except as expressly modified by this First Amendment, the terms of
the Agreement remain unchanged, and the Agreement is hereby ratified and
confirmed by the Parties in all respects. In the event of any inconsistency
between the terms of the Agreement and this First Amendment, this First
Amendment shall prevail to the extent of such inconsistency.
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3.2 Representations and Warranties.
Each Party represents and warrant that this First Amendment has been duly
authorized, executed and delivered by it and that each of this First Amendment
and the Agreement constitutes its legal, valid, binding and enforceable
obligation, enforceable against it in accordance with its terms, except to the
extent such enforceability may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity.
3.3 No Waiver.
Except as expressly provided herein, the execution and delivery of this
First Amendment shall not be deemed or construed to (i) constitute an extension,
modification or waiver of any term or condition of the Agreement, (ii) give rise
to any obligation on the part of either Party to extend, modify or waive any
term or condition of the Agreement or (iii) be a waiver by either Party of any
of its rights under the Agreement, at law or in equity.
3.4 Reaffirmation.
Each Party hereby reaffirms each and every covenant, condition, obligation
and provision set forth in the Agreement, as modified hereby.
3.5 Governing Law.
THIS FIRST AMENDMENT AND ANY ISSUES ARISING HEREUNDER SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED UNDER THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ITS CONFLICTS OF LAWS PRINCIPLES.
3.6 Severability.
If any Article, Section or provision of this First Amendment shall be
determined to be null and void, voidable or invalid by a court of competent
jurisdiction, then for such period that the same is void or invalid, it shall be
deemed to be deleted from this First Amendment and the remaining portions of
this First Amendment shall remain in full force and effect.
3.7 Counterparts.
This First Amendment may be executed by the Parties in separate
counterparts and initially delivered by electronic or facsimile transmission or
otherwise, with original signature pages to follow, and all such counterparts
shall together constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, each Party hereto has caused this First Amendment to be
executed by its duly authorized representative on the date written below.
Morgan Stanley Capital Group Inc.
By: /s/ John Shapiro
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Title: Vice President of Morgan Stanley
Capital Group Inc.
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Date: September 13, 2002
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The Premcor Refining Group Inc.
By: /s/ Donald F. Lucey
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Title: Vice President - Commercial
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Date: September 13, 2002
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