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): October 16, 2013

 

 

 

LOGO

WESTERN REFINING LOGISTICS, LP

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-36114   46-3205923

(State or other jurisdiction

of incorporation or organization)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

123 West Mills Avenue, Suite 200

El Paso, Texas 79901

(Address of principal executive office) (Zip Code)

(915) 534-1400

(Registrants’ telephone number, including area code)

 

 

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 October 16, 2013, Western Refining Logistics, LP (the “Partnership”) completed its initial public offering (the “Offering”) of 15,812,500 common units representing limited partnership interests of the Partnership (the “Common Units”) sold by the Partnership to the public at a price of $22.00 per Common Unit pursuant to a Registration Statement on Form S-1, as amended (File No. 333-190135) (the “Registration Statement”), initially filed by the Partnership with the Securities and Exchange Commission (the “Commission”) on July 25, 2013, pursuant to the Securities Act of 1933, as amended (the “Securities Act”), including a prospectus (the “Prospectus”) filed with the Commission on October 16, 2013, pursuant to Rule 424(b) of the Securities Act.

Revolving Credit Facility

On October 16, 2013, the Partnership entered into a Credit Agreement among the Partnership, as borrower, the lenders from time to time party thereto and Well Fargo Bank, National Association, as Administrative Agent, Swingline Lender and L/C Issuer (the “Credit Agreement”). The Credit Agreement provides for a $300 million senior secured revolving credit facility, expiring October 16, 2018, that includes a $25.0 million sublimit for standby letters of credit and a $10.0 million sublimit for swing line loans. The revolving credit facility will be available to fund working capital, acquisitions, distributions and capital expenditures and for other general partnership purposes. The Partnership also has the ability to increase the maximum amount of the revolving credit facility in an aggregate amount of up to $200.0 million, for a total facility size of up to $500.0 million, subject to receiving increased commitments from lenders or other financial institutions and satisfaction of certain conditions.

Borrowings under the revolving credit facility will bear interest at either a base rate, plus an applicable margin ranging from 0.75% to 1.75%, or a Eurodollar rate, plus an applicable margin ranging from 1.75% to 2.75%. The applicable margin will vary based upon the Consolidated Total Leverage Ratio, as defined in the Credit Agreement. In addition, the unused portion of the revolving credit facility will be subject to a commitment fee ranging from 0.30% to 0.50%, based on the Consolidated Total Leverage Ratio.

The Credit Agreement contains affirmative and negative covenants that, among other things, limit or restrict ability of the Partnership and its restricted subsidiaries to incur or guarantee debt, grant liens on their assets, make investments, make cash distributions, redeem or repurchase units, amend material contracts, engage in business activities (other than lines of business as of October 16, 2013), engage in mergers, consolidations and other organizational changes, sell, transfer or otherwise dispose of assets or enter into burdensome agreements or enter into non-arms-length transactions with affiliates.

Obligations under the Credit Agreement and certain cash management and hedging obligations will be guaranteed by all subsidiaries of the Partnership as of the date hereof and, with certain exceptions, any subsidiaries formed or acquired after the date hereof, and will be secured by a first priority lien on substantially all of the Partnership’s and such subsidiaries’ material assets.

The Credit Agreement requires the Partnership to maintain the following financial ratios, each tested on a quarterly basis for the immediately preceding four quarter period then ended: (a) consolidated EBITDA (as defined in the Credit Agreement) to interest expense of at least 2.50 to 1.00, (b) funded debt (net of up to $20 million of unrestricted cash) to consolidated EBITDA of not greater than 4.00 to 1.00 (or 4.50 to 1.00 at any time after the Partnership has issued at least $100 million of unsecured notes) and (c) after the Partnership has issued at least $100 million of unsecured notes, funded debt secured by liens (net of up to $20 million of unrestricted cash) to consolidated EBITDA of not greater than 3.50 to 1.00.

The Credit Agreement contains events of default, including, but not limited to (and subject to grace periods in certain circumstances), the failure to pay any principal, interest or fees when due, failure to perform or observe any covenant contained in the Credit Agreement or related documentation, any representation or warranty made in the Credit Agreement or related documentation being untrue in any material respect when made, default under certain material debt agreements, commencement of bankruptcy or other insolvency proceedings, certain changes in ownership of the Partnership or the ownership or board composition of the general partner of the Partnership and material judgments or orders. Upon the occurrence and during the continuation of an event of default under the Credit Agreement, the lenders may, among other things, terminate their commitments, declare any outstanding loans to be immediately due and payable and/or exercise remedies against the loan parties and the collateral as may be available to the lenders under the Credit Agreement and related documentation or applicable law.

 

1


The foregoing description is qualified in its entirety by reference to the full text of the Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated in this Item 1.01 by reference.

Contribution, Conveyance and Assumption Agreement

The description of the Contribution, Conveyance and Assumption Agreement provided below under Item 2.01 is incorporated in this Item 1.01 by reference. A copy of the Contribution, Conveyance and Assumption Agreement is attached as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated in this Item 1.01 by reference.

Omnibus Agreement

On October 16, 2013, in connection with the closing of the Offering, the Partnership entered into an Omnibus Agreement (the “Omnibus Agreement”) by and among the Partnership, Western Refining Logistics GP, LLC (the “General Partner”), Western Refining, Inc. (“Western”), Western Refining Southwest, Inc. (“WRSW”), Western Refining Company, L.P. (“WRCLP”) and Western Refining Wholesale, Inc. (“Wholesale”). Pursuant to the Omnibus Agreement the Partnership was granted, among other things, a right of first offer to acquire certain of Western’s retained assets. Western also agreed, under certain circumstances, to offer the Partnership the opportunity to purchase certain other assets in the Permian Basin or the Four Corners area that Western may acquire or construct after the Offering. The Omnibus Agreement also provides for reimbursement to Western for the provision of various administrative services and Western’s indemnification of the Partnership for certain matters.

The foregoing description and the description contained in the Prospectus are qualified in their entirety by reference to the full text of the Omnibus Agreement, which is filed as Exhibit 10.3 to this Form 8-K and incorporated in this Item 1.01 by reference.

Services Agreement

On October 16, 2013, in connection with the closing of the Offering, the Partnership, WRCLP and WRSW entered into an operational services agreement (the “Services Agreement”). Pursuant to the Services Agreement, WRCLP and WRSW will provide certain personnel to provide operational services to the Partnership in support of its assets.

 

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The foregoing description and the description contained in the Prospectus are qualified in their entirety by reference to the full text of the Services Agreement, which is attached as Exhibit 10.4 to this Current Report on Form 8-K and incorporated into this Item 1.01 by reference.

Pipeline Agreement

On October 16, 2013, in connection with the closing of the Offering, WRCLP and WRSW on one hand and Western Refining Pipeline, LLC (“WRP”) on the other, entered into a pipeline and gathering services agreement (the “Pipeline Agreement”). Pursuant to the Pipeline Agreement, WRP will provide mainline movement services, truck offloading services, gathering and injection services and storage services in exchange for fees to be charged to WRCLP and WRSW, as applicable.

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

Terminalling Agreement

On October 16, 2013, in connection with the closing of the Offering, WRCLP and WRSW on one hand and Western Refining Terminals, LLC (“WRT”) on the other, entered into a terminalling, transportation and storage services agreement (the “Terminalling Agreement”). Pursuant to the Terminalling Agreement, WRT will provide product and asphalt storage services, product and asphalt throughput services, product additive and blending services and asphalt processing and blending services at the Product Terminals (as defined in the Terminalling Agreement) in exchange for fees to be charged to WRCLP and WRSW, as applicable.

The foregoing description is qualified in its entirety by reference to the full text of the Pipeline Agreement, which is attached as Exhibit 10.6 to this Current Report on Form 8-K and incorporated into this Item 1.01 by reference.

LTIP

The description of the Long-Term Incentive Plan provided below under Item 5.02 (and as defined therein) is incorporated into this Item 1.01 by reference. A copy of the Long-Term Incentive Plan is attached as Exhibit 10.7 to this Current Report on Form 8-K and is incorporated in this Item 1.01 by reference.

Relationships

Each of the Partnership, the General Partner, WRSW, San Juan Refining Company, LLC (“SJR”), WRP, WRT, WRCLP and Wholesale is a direct or indirect subsidiary of Western. As a result, certain individuals, including officers and directors of Western, the Partnership and the General Partner, serve as officers and/or directors of more than one of such other entities.

Certain of the lenders under the Partnership’s Credit Agreement and their affiliates are or have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with Western and its subsidiaries or the Partnership or its subsidiaries.

As more fully described in the section “Certain Relationships and Related Transactions” of the prospectus, which is incorporated herein by reference, Western owns and controls the General Partner and owns through its wholly owned subsidiaries 29,809,500 Common Units and all of the subordinated units representing limited partner interests in the Partnership. In addition, the General Partner owns a non-economic general partner interest in the Partnership.

 

3


Item 2.01 Completion of Acquisition or Disposition of Assets.

Contribution, Conveyance and Assumption Agreement

On October 16, 2013, in connection with the closing of the Offering, the following transactions, among others, occurred pursuant to the Contribution Agreement by and among the Partnership, the General Partner, WRSW, SJR, WRP, WRT, WRCLP and Western (the “Contribution Agreement”): (i) WRSW contributed to the Partnership the WR Subsidiary Interests (as such term is defined in the Contribution Agreement) in exchange for 16,167,270 subordinated units, a cash distribution and the right to receive both (a) a number of additional common units and (b) a distribution of any cash paid by the Underwriters to the Partnership, as set forth in the Contribution Agreement, and the issuance to the General Partner of the Incentive Distribution Rights and (ii) WRCLP contributed to the Partnership the WRCLP Contribution Assets (as such term is defined in the Contribution Agreement) in exchange for 6,998,500 common units, 6,643,730 subordinated units and a cash distribution, as set forth in the Contribution Agreement.

The foregoing description is qualified in its entirety by reference to the full text of the Contribution Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated into this Item 2.01 by reference.

Relationships

The description of the relationships among the Partnership, the General Partner, Western, WRSW, SJR, WRT, WRP, WRCLP and Wholesale provided above under Item 1.01 is incorporated in this Item 2.01 by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The description of the Credit Agreement provided under Item 1.01 is incorporated in this Item 2.03 by reference.

Item 3.02 Unregistered Sales of Equity Securities.

The description in Item 2.01 above of the issuances by the Partnership of Common Units to WRCLP, subordinated units to WRCLP and WRSW, and Incentive Distribution Rights to Western on October 16, 2013, in

 

4


connection with the consummation of the transactions contemplated by the Contribution Agreement is incorporated herein by reference. The foregoing transactions were undertaken in reliance upon the exemption from the registration requirements of the Securities Act by Section 4(2) thereof. The Partnership believes that exemptions other than the foregoing exemption may exist for these transactions.

Each subordinated unit issued pursuant to the Contribution Agreement will convert into one Common Unit at the end of the subordination period (as set forth in the Prospectus). The description of the subordination period contained in the section of the Prospectus entitled “Provisions of Our Partnership Agreement Relating to Cash Distributions—Subordinated Units” is incorporated herein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Long-Term Incentive Plan

On October 16, 2013, in connection with the Offering, the Board of Directors of the General Partner adopted the Western Refining Logistics, LP 2013 Long-Term Incentive Plan (the “Plan”) for certain employees, consultants and directors of the General Partner and those of its affiliates who perform services for the Partnership. The Plan provides for grants of restricted units, unit appreciation rights, unit options, phantom units, unit awards, substitute awards, other unit-based awards, cash awards, performance awards and distribution equivalent rights. Any awards that are made under the plan to executive officers will be approved by the Board of directors of the General Partner or a committee thereof. The Plan limits the number of Common Units that may be delivered pursuant to awards under the plan to 4,500,000 units. The Plan will be administered by the Board of Directors or a committee thereof.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Plan, which is filed as Exhibit 10.7 to this Form 8-K and is incorporated in this Item 5.02 by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year.

First Amended and Restated Agreement of Limited Partnership of Western Refining Logistics, LP

On October 16, 2013, in connection with the closing of the Offering, the Partnership amended and restated its Agreement of Limited Partnership (as amended, the “Partnership Agreement”). The amendments to the Partnership Agreement included, among other things, outlining the initial unit ownership of WRSW and WRCLP, and the allocation of Net Termination Gain (as defined in the Partnership Agreement). A description of the Partnership Agreement is contained in the section of the Prospectus entitled “The Partnership Agreement” and is incorporated herein by reference.

The foregoing description and the description contained in the Prospectus are qualified in their entirety by reference to the full text of the Partnership Agreement, which is filed as Exhibit 3.2 to this Current Report on Form 8-K and is incorporated in this Item 5.03 by reference.

Amended and Restated Limited Liability Company Agreement of Western Refining Logistics GP, LLC

On October 16, 2013, in connection with the closing of the Offering, the General Partner amended and restated its Limited Liability Company Agreement (as amended, the “LLC Agreement”). The amendments to the LLC Agreement included, among other things, outlining the rights of members, distributions by the General Partner, and management by the Board.

The foregoing description is qualified in its entirety by reference to the full text of the LLC Agreement, which is filed as Exhibit 3.4 to this Current Report on Form 8-K and is incorporated in this Item 5.03 by reference.

Item 7.01 Regulation FD Disclosures.

On October 16, 2013, the Partnership issued a press release announcing that it had closed the offering described in Item 1.01 of this Current Report on Form 8-K. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information contained in this Item 7.01 of this Current Report on Form 8-K (including the related exhibits) is deemed to be “furnished” and shall not be deemed

 

5


“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information contained in this Item 7.01 of this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01 Financial Statements and Exhibits.

Exhibits

 

Exhibit
No.

  

Description

  3.2    Amended and Restated Limited Partnership Agreement of Western Refining Logistics, LP.
  3.3    Amended and Restated Limited Liability Company Agreement of Western Refining Logistics GP, LLC.
10.1    Credit Agreement among the Partnership, as borrower, the lenders from time to time party thereto and Well Fargo Bank, National Association, as Administrative Agent, Swingline Lender and L/C Issuer.
10.2    Contribution, Conveyance and Assumption Agreement by and among the Partnership, the General Partner, WRSW, SJR, WRP, WRT, WRCLP and Western.
10.3    Omnibus Agreement by and among the Partnership, the General Partner, Western, WRSW, WRCLP and Wholesale.
10.4    Services Agreement by and among the Partnership, WRCLP and WRSW.
10.5    Pipeline and Gathering Services Agreement by and among WRCLP, WRSW and WRP.
10.6    Terminalling, Transportation and Storage Services Agreement by and among WRCLP, WRSW and WRT.
10.7    Western Refining Logistics, LP 2013 Long-Term Incentive Plan.
99.1    Press Release dated October 16, 2013.

 

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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 thereunto duly authorized.

 

WESTERN REFINING LOGISTICS, LP
By Western Refining Logistics GP, LLC, its general partner
By:  

/s/ Gary R. Dalke

  Name:   Gary R. Dalke
  Title:   Chief Financial Officer

Dated: October 22, 2013

 

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EXHIBIT INDEX

 

Exhibit
No.

  

Description

  3.2    Amended and Restated Limited Partnership Agreement of Western Refining Logistics, LP.
  3.3    Amended and Restated Limited Liability Company Agreement of Western Refining Logistics GP, LLC.
10.1    Credit Agreement among the Partnership, as borrower, the lenders from time to time party thereto and Well Fargo Bank, National Association, as Administrative Agent, Swingline Lender and L/C Issuer.
10.2    Contribution, Conveyance and Assumption Agreement by and among the Partnership, the General Partner, WRSW, SJR, WRP, WRT, WRCLP and Western.
10.3    Omnibus Agreement by and among the Partnership, the General Partner, Western, WRSW, WRCLP and Wholesale.
10.4    Services Agreement by and among the Partnership, WRCLP and WRSW.
10.5    Pipeline and Gathering Services Agreement by and among WRCLP, WRSW and WRP.
10.6    Terminalling, Transportation and Storage Services Agreement by and among WRCLP, WRSW and WRT.
10.7    Western Refining Logistics, LP 2013 Long-Term Incentive Plan.
99.1    Press Release dated October 16, 2013.

 

8

Exhibit 3.2

FIRST AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

WESTERN REFINING LOGISTICS, LP


TABLE OF CONTENTS

 

ARTICLE I   
DEFINITIONS   
  Section 1.1  

Definitions

     1   
  Section 1.2  

Construction

     24   
ARTICLE II   
ORGANIZATION   
  Section 2.1  

Formation

     24   
  Section 2.2  

Name

     24   
  Section 2.3  

Registered Office; Registered Agent; Principal Office; Other Offices

     25   
  Section 2.4  

Purpose and Business

     25   
  Section 2.5  

Powers

     25   
  Section 2.6  

Term

     25   
  Section 2.7  

Title to Partnership Assets

     26   
ARTICLE III   
RIGHTS OF LIMITED PARTNERS   
  Section 3.1  

Limitation of Liability

     26   
  Section 3.2  

Management of Business

     26   
  Section 3.3  

Outside Activities of the Limited Partners

     27   
  Section 3.4  

Rights of Limited Partners

     27   
ARTICLE IV   
CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS    
  Section 4.1  

Certificates

     28   
  Section 4.2  

Mutilated, Destroyed, Lost or Stolen Certificates

     28   
  Section 4.3  

Record Holders

     29   
  Section 4.4  

Transfer Generally

     30   
  Section 4.5  

Registration and Transfer of Limited Partner Interests

     30   
  Section 4.6  

Transfer of the General Partner’s General Partner Interest

     31   
  Section 4.7  

Restrictions on Transfers

     31   
  Section 4.8  

Eligibility Certificates; Ineligible Holders

     32   
  Section 4.9  

Redemption of Partnership Interests of Ineligible Holders

     34   

 

-i-


ARTICLE V   
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS   
  Section 5.1  

Organizational Contributions

     35   
  Section 5.2  

Contributions by the General Partner and its Affiliates

     35   
  Section 5.3  

Initial Offering

     36   
  Section 5.4  

Interest and Withdrawal

     36   
  Section 5.5  

Capital Accounts

     36   
  Section 5.6  

Issuances of Additional Partnership Interests and Derivative Instruments

     39   
  Section 5.7  

Conversion of Subordinated Units

     40   
  Section 5.8  

Limited Preemptive Right

     41   
  Section 5.9  

Splits and Combinations

     41   
  Section 5.10  

Fully Paid and Non-Assessable Nature of Limited Partner Interests

     42   
  Section 5.11  

Issuance of Common Units in Connection with Reset of Incentive Distribution Rights

     42   
ARTICLE VI   
ALLOCATIONS AND DISTRIBUTIONS   
  Section 6.1  

Allocations for Capital Account Purposes

     44   
  Section 6.2  

Allocations for Tax Purposes

     54   
  Section 6.3  

Requirement and Characterization of Distributions; Distributions to Record Holders

     56   
  Section 6.4  

Distributions of Available Cash from Operating Surplus

     57   
  Section 6.5  

Distributions of Available Cash from Capital Surplus

     58   
  Section 6.6  

Adjustment of Target Distribution Levels

     59   
  Section 6.7  

Special Provisions Relating to the Holders of Subordinated Units

     59   
  Section 6.8  

Special Provisions Relating to the Holders of IDR Reset Common Units.

     60   
  Section 6.9  

Entity-Level Taxation

     60   
ARTICLE VII   
MANAGEMENT AND OPERATION OF BUSINESS   
  Section 7.1  

Management

     61   
  Section 7.2  

Replacement of Fiduciary Duties.

     63   
  Section 7.3  

Certificate of Limited Partnership

     64   
  Section 7.4  

Restrictions on the General Partner’s Authority

     64   
  Section 7.5  

Reimbursement of the General Partner

     64   
  Section 7.6  

Outside Activities

     65   
  Section 7.7  

Indemnification

     66   
  Section 7.8  

Liability of Indemnitees

     68   
  Section 7.9  

Standards of Conduct and Modification of Duties

     69   
  Section 7.10  

Other Matters Concerning the General Partner and Indemnitees

     71   

 

-ii-


  Section 7.11  

Purchase or Sale of Partnership Interests

     71   
  Section 7.12  

Registration Rights of the General Partner and its Affiliates

     72   
  Section 7.13  

Reliance by Third Parties

     74   
ARTICLE VIII   
BOOKS, RECORDS, ACCOUNTING AND REPORTS   
 

Section 8.1

 

Records and Accounting

     75   
 

Section 8.2

 

Fiscal Year

     75   
 

Section 8.3

 

Reports

     75   
ARTICLE IX   
TAX MATTERS   
 

Section 9.1

 

Tax Returns and Information

     76   
 

Section 9.2

 

Tax Elections

     76   
 

Section 9.3

 

Tax Controversies

     77   
 

Section 9.4

 

Withholding; Tax Payments

     77   
ARTICLE X   
ADMISSION OF PARTNERS   
 

Section 10.1

 

Admission of Limited Partners

     77   
 

Section 10.2

 

Admission of Successor General Partner

     78   
 

Section 10.3

 

Amendment of Agreement and Certificate of Limited Partnership

     79   
ARTICLE XI   
WITHDRAWAL OR REMOVAL OF PARTNERS   
 

Section 11.1

 

Withdrawal of the General Partner

     79   
 

Section 11.2

 

Removal of the General Partner

     81   
 

Section 11.3

 

Interest of Departing General Partner and Successor General Partner

     81   
 

Section 11.4

 

Termination of Subordination Period, Conversion of Subordinated Units and Extinguishment of Cumulative Common Unit Arrearages

     83   
 

Section 11.5

 

Withdrawal of Limited Partners

     83   
ARTICLE XII   
DISSOLUTION AND LIQUIDATION   
 

Section 12.1

 

Dissolution

     84   
 

Section 12.2

 

Continuation of the Business of the Partnership After Dissolution

     84   
 

Section 12.3

 

Liquidator

     85   
 

Section 12.4

 

Liquidation

     85   

 

-iii-


  Section 12.5  

Cancellation of Certificate of Limited Partnership

     86   
  Section 12.6  

Return of Contributions

     86   
  Section 12.7  

Waiver of Partition

     86   
  Section 12.8  

Capital Account Restoration

     87   
ARTICLE XIII   
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE   
  Section 13.1  

Amendments to be Adopted Solely by the General Partner

     87   
  Section 13.2  

Amendment Procedures

     88   
  Section 13.3  

Amendment Requirements

     89   
  Section 13.4  

Special Meetings

     90   
  Section 13.5  

Notice of a Meeting

     90   
  Section 13.6  

Record Date

     90   
  Section 13.7  

Adjournment

     91   
  Section 13.8  

Waiver of Notice; Approval of Meeting; Approval of Minutes

     91   
  Section 13.9  

Quorum and Voting

     91   
  Section 13.10  

Conduct of a Meeting

     92   
  Section 13.11  

Action Without a Meeting

     92   
  Section 13.12  

Right to Vote and Related Matters.

     93   
  Section 13.13  

Voting of Incentive Distribution Rights.

     93   
ARTICLE XIV   
MERGER OR CONSOLIDATION   
  Section 14.1  

Authority

     94   
  Section 14.2  

Procedure for Merger or Consolidation

     94   
  Section 14.3  

Approval by Limited Partners

     96   
  Section 14.4  

Certificate of Merger

     97   
  Section 14.5  

Effect of Merger or Consolidation

     97   
ARTICLE XV   
RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS   
  Section 15.1  

Right to Acquire Limited Partner Interests

     98   
ARTICLE XVI   
GENERAL PROVISIONS   
  Section 16.1  

Addresses and Notices; Written Communications

     99   
  Section 16.2  

Further Action

     100   
  Section 16.3  

Binding Effect

     100   
  Section 16.4  

Integration

     100   
  Section 16.5  

Creditors

     100   

 

-iv-


  Section 16.6  

Waiver

     100   
  Section 16.7  

Third-Party Beneficiaries

     100   
  Section 16.8  

Counterparts

     101   
  Section 16.9  

Applicable Law; Forum; Venue and Jurisdiction

     101   
  Section 16.10  

Invalidity of Provisions

     102   
  Section 16.11  

Consent of Partners

     102   
  Section 16.12  

Facsimile Signatures

     102   

 

-v-


FIRST AMENDED AND RESTATED AGREEMENT

OF LIMITED PARTNERSHIP OF WESTERN REFINING LOGISTICS, LP

THIS FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF WESTERN REFINING LOGISTICS, LP dated as of October 16, 2013, is entered into by and between Western Refining Logistics GP LLC, a Delaware limited liability company, as the General Partner, and Western Refining Southwest, Inc., an Arizona corporation, as the Organizational Limited Partner, together with any other Persons who become Partners in the Partnership or parties hereto as provided herein. In consideration of the covenants, conditions and agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

Additional Book Basis ” means, with respect to any Adjusted Property, the portion of the Carrying Value of such Adjusted Property that is attributable to positive adjustments made to such Carrying Value, as determined in accordance with the provisions set forth below in this definition of Additional Book Basis. For purposes of determining the extent to which Carrying Value constitutes Additional Book Basis:

(a) Any negative adjustment made to the Carrying Value of an Adjusted Property as a result of either a Book-Down Event or a Book-Up Event shall first be deemed to offset or decrease that portion of the Carrying Value of such Adjusted Property that is attributable to any prior positive adjustments made thereto pursuant to a Book-Up Event or Book-Down Event.

(b) If Carrying Value that constitutes Additional Book Basis is reduced as a result of a Book-Down Event and the Carrying Value of other property is increased as a result of such Book-Down Event, an allocable portion of any such increase in Carrying Value shall be treated as Additional Book Basis; provided , that the amount treated as Additional Book Basis pursuant hereto as a result of such Book-Down Event shall not exceed the amount by which the Aggregate Remaining Net Positive Adjustments after such Book-Down Event exceeds the remaining Additional Book Basis attributable to all of the Partnership’s Adjusted Property after such Book-Down Event (determined without regard to the application of this clause (b) to such Book-Down Event).

Additional Book Basis Derivative Items ” means any Book Basis Derivative Items that are computed with reference to Additional Book Basis. To the extent that the Additional Book Basis attributable to all of the Partnership’s Adjusted Property as of the beginning of any taxable period exceeds the Aggregate Remaining Net Positive Adjustments as of the beginning of such period (the “ Excess Additional Book Basis ”), the Additional Book Basis Derivative Items for

 

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such period shall be reduced by the amount that bears the same ratio to the amount of Additional Book Basis Derivative Items determined without regard to this sentence as the Excess Additional Book Basis bears to the Additional Book Basis as of the beginning of such period. With respect to a Disposed of Adjusted Property, the Additional Book Basis Derivative Items shall be the amount of Additional Book Basis taken into account in computing gain or loss from the disposition of such Disposed of Adjusted Property; provided that the provisions of the immediately preceding sentence shall apply to the determination of the Additional Book Basis Derivative Items attributable to Disposed of Adjusted Property.

Adjusted Capital Account ” means, with respect to any Partner, the balance in such Partner’s Capital Account at the end of each taxable period of the Partnership, after giving effect to the following adjustments:

(a) Credit to such Capital Account any amounts which such Partner is (x) obligated to restore under the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or (y) deemed obligated to restore pursuant to the penultimate sentences of Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(b) Debit to such Capital Account the items described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).

The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The “Adjusted Capital Account” of a Partner in respect of any Partnership Interest shall be the amount that such Adjusted Capital Account would be if such Partnership Interest were the only interest in the Partnership held by such Partner from and after the date on which such Partnership Interest was first issued.

Adjusted Operating Surplus ” means, with respect to any period, (a) Operating Surplus generated with respect to such period; (b) less (i) the amount of any net increase during such period in Working Capital Borrowings (or the Partnership’s proportionate share of any net increase in Working Capital Borrowings in the case of Subsidiaries that are not wholly owned); (ii) the amount of any net decrease during such period in cash reserves (or the Partnership’s proportionate share of any net decrease in cash reserves in the case of Subsidiaries that are not wholly owned) for Operating Expenditures not relating to an Operating Expenditure made during such period; and (c) plus (i) the amount of any net decrease during such period in Working Capital Borrowings (or the Partnership’s proportionate share of any net decrease in Working Capital Borrowings in the case of Subsidiaries that are not wholly owned); (ii) the amount of any net increase during such period in cash reserves (or the Partnership’s proportionate share of any net increase in cash reserves in the case of Subsidiaries that are not wholly owned) for Operating Expenditures required by any debt instrument for the repayment of principal, interest or premium; and (iii) the amount of any net decrease made in subsequent periods in cash reserves for Operating Expenditures initially established during such period to the extent such decrease results in a reduction in Adjusted Operating Surplus in subsequent periods pursuant to clause (b)(ii) above. Adjusted Operating Surplus does not include that portion of Operating Surplus

 

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included in clause (a)(i) of the definition of Operating Surplus. To the extent that disbursements made, cash received or cash reserves established, increased or reduced after the end of a period are included in the determination of Operating Surplus for such period (as contemplated by the proviso in the definition of “Operating Surplus”) such disbursements, cash receipts and changes in cash reserves shall be deemed to have occurred in such period (and not in any future period) for purposes of calculating increases or decreases in Working Capital Borrowings or cash reserves during such period.

Adjusted Property ” means any property the Carrying Value of which has been adjusted pursuant to Section 5.5(d).

Affiliate ” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

Aggregate Quantity of IDR Reset Common Units ” is defined in Section 5.11(a).

Aggregate Remaining Net Positive Adjustments ” means, as of the end of any taxable period, the sum of the Remaining Net Positive Adjustments of all the Partners.

Agreed Allocation ” means any allocation, other than a Required Allocation, of an item of income, gain, loss or deduction pursuant to the provisions of Section 6.1, including a Curative Allocation (if appropriate to the context in which the term “Agreed Allocation” is used).

Agreed Value ” of (a) a Contributed Property means the fair market value of such property at the time of contribution and (b) an Adjusted Property means the fair market value of such Adjusted Property on the date of the Revaluation Event, in each case as determined by the General Partner.

Agreement ” means this First Amended and Restated Agreement of Limited Partnership of Western Refining Logistics, LP, as it may be amended, supplemented or restated from time to time.

Associate ” means, when used to indicate a relationship with any Person, (a) any corporation or organization of which such Person is a director, officer, manager, general partner or managing member or is, directly or indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such Person, or any relative of such spouse, who has the same principal residence as such Person.

 

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Available Cash ” means, with respect to any Quarter ending prior to the Liquidation Date:

(a) the sum of (i) all cash and cash equivalents of the Partnership Group (or the Partnership’s proportionate share of cash and cash equivalents in the case of Subsidiaries that are not wholly owned) on hand at the end of such Quarter, and (ii) if the General Partner so determines, all or any portion of any additional cash and cash equivalents of the Partnership Group (or the Partnership’s proportionate share of cash and cash equivalents in the case of Subsidiaries that are not wholly owned) on hand on the date of determination of Available Cash with respect to such Quarter resulting from Working Capital Borrowings made subsequent to the end of such Quarter, less

(b) the amount of any cash reserves established by the General Partner (or the Partnership’s proportionate share of cash reserves in the case of Subsidiaries that are not wholly owned) to (i) provide for the proper conduct of the business of the Partnership Group (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership Group) subsequent to such Quarter, (ii) comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to which any Group Member is a party or by which it is bound or its assets are subject or (iii) provide funds for distributions under Section 6.4 or 6.5 in respect of any one or more of the next four Quarters; provided, however, that the General Partner may not establish cash reserves pursuant to subclause (iii) above if the effect of such reserves would be that the Partnership is unable to distribute the Minimum Quarterly Distribution on all Common Units, plus any Common Unit Arrearage on all Common Units, with respect to such Quarter;

provided , further, however , that disbursements made by a Group Member or cash reserves established, increased or reduced after the end of such Quarter but on or before the date of determination of Available Cash with respect to such Quarter shall be deemed to have been made, established, increased or reduced, for purposes of determining Available Cash, within such Quarter if the General Partner so determines.

Notwithstanding the foregoing, “Available Cash” with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero.

Board of Directors ” means the board of directors of the General Partner.

Book Basis Derivative Items ” means any item of income, deduction, gain or loss that is computed with reference to the Carrying Value of an Adjusted Property (e.g., depreciation, depletion, or gain or loss with respect to an Adjusted Property).

Book-Down Event ” means a Revaluation Event that gives rise to a Net Termination Loss.

Book-Tax Disparity ” means with respect to any item of Contributed Property or Adjusted Property, as of the date of any determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the adjusted basis thereof for U.S. federal income tax purposes as of such date. A Partner’s share of the Partnership’s Book-Tax Disparities in all of its Contributed Property and Adjusted Property will be reflected by the difference between such Partner’s Capital Account balance as maintained pursuant to Section 5.5 and the hypothetical balance of such Partner’s Capital Account computed as if it had been maintained strictly in accordance with U.S. federal income tax accounting principles.

 

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Book-Up Event ” means a Revaluation Event that gives rise to Net Termination Gain.

Business Day ” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States of America or the State of Texas shall not be regarded as a Business Day.

Capital Account ” means the capital account maintained for a Partner pursuant to Section 5.5. The “Capital Account” of a Partner in respect of any Partnership Interest shall be the amount that such Capital Account would be if such Partnership Interest were the only interest in the Partnership held by such Partner from and after the date on which such Partnership Interest was first issued.

Capital Contribution ” means any cash, cash equivalents or the Net Agreed Value of Contributed Property that a Partner contributes to the Partnership or that is contributed or deemed contributed to the Partnership on behalf of a Partner (including, in the case of an underwritten offering of Units, the amount of any underwriting discounts or commissions).

Capital Improvement ” means any (a) addition or improvement to the assets owned by any Group Member, (b) acquisition (through an asset acquisition, merger, stock acquisition or other form of investment) of existing, or the construction of new, assets by any Group Member, or (c) capital contribution by a Group Member to a Person that is not a Subsidiary, in which a Group Member has, or after such capital contribution will have, an equity interest to fund the Group Member’s pro rata share of the cost of the acquisition of existing, or the construction of new or the improvement of existing, capital assets, in each case if such addition, improvement, acquisition or construction is made to increase the long-term operating capacity or operating income of the Partnership Group from the long-term operating capacity or operating income of the Partnership Group, in the case of clauses (a) and (b), or such Person, in the case of clause (c), from that existing immediately prior to such addition, improvement, acquisition or construction.

Capital Surplus ” means Available Cash distributed by the Partnership in excess of Operating Surplus, as described in Section 6.3(a).

Carrying Value ” means (a) with respect to a Contributed Property or an Adjusted Property, the Agreed Value of such property reduced (but not below zero) by all depreciation, amortization and other cost recovery deductions charged to the Partners’ Capital Accounts in respect of such property, and (b) with respect to any other Partnership property, the adjusted basis of such property for U.S. federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted from time to time in accordance with Section 5.5(d) and to reflect changes, additions or other adjustments to the Carrying Value for dispositions and acquisitions of Partnership properties, as deemed appropriate by the General Partner.

 

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Cause ” means a court of competent jurisdiction has entered a final, non-appealable judgment finding the General Partner is liable to the Partnership or any Limited Partner for actual fraud or willful misconduct in its capacity as a general partner of the Partnership.

Certificate ” means a certificate in such form (including in global form if permitted by applicable rules and regulations) as may be adopted by the General Partner, issued by the Partnership evidencing ownership of one or more Partnership Interests. The initial form of certificate approved by the General Partner for Common Units is attached as Exhibit A to this Agreement.

Certificate of Limited Partnership ” means the Certificate of Limited Partnership of the Partnership filed with the Secretary of State of the State of Delaware as referenced in Section 7.3, as such Certificate of Limited Partnership may be amended, supplemented or restated from time to time.

Citizenship Eligibility Trigger ” is defined in Section 4.8(a)(ii).

claim ” (as used in Section 7.12(c)) is defined in Section 7.12(c).

Closing Date ” means the first date on which Common Units are issued and delivered by the Partnership to the Underwriters pursuant to the provisions of the Underwriting Agreement.

Closing Price ” means, in respect of any class of Limited Partner Interests, as of the date of determination, the last sale price on such day, regular way, or in case no such sale takes place on such day, the average of the closing bid and asked prices on such day, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal National Securities Exchange on which such Limited Partner Interests are listed or admitted to trading or, if such Limited Partner Interests are not listed or admitted to trading on any National Securities Exchange, the last quoted price on such day or, if not so quoted, the average of the high bid and low asked prices on such day in the over-the-counter market, as reported by the primary reporting system then in use in relation to such Limited Partner Interests of such class, or, if on any such day such Limited Partner Interests of such class are not quoted by any such organization, the average of the closing bid and asked prices on such day as furnished by a professional market maker making a market in such Limited Partner Interests of such class selected by the General Partner, or if on any such day no market maker is making a market in such Limited Partner Interests of such class, the fair value of such Limited Partner Interests on such day as determined by the General Partner.

Code ” means the U.S. 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.

Combined Interest ” is defined in Section 11.3(a).

Commences Commercial Service, ” “ Commenced Commercial Service ” and “ Commencement of Commercial Service ” means a Capital Improvement or replacement asset, as applicable, being first put into commercial service by a Group Member following, if applicable, completion of construction, acquisition, development and testing, as applicable.

 

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Commission ” means the United States Securities and Exchange Commission.

Common Unit ” means a Partnership Interest having the rights and obligations specified with respect to Common Units in this Agreement. The term “Common Unit” does not refer to or include any Subordinated Unit prior to its conversion into a Common Unit pursuant to the terms hereof.

Common Unit Arrearage ” means, with respect to any Common Unit, whenever issued, with respect to any Quarter wholly within the Subordination Period, the excess, if any, of (a) the Minimum Quarterly Distribution with respect to a Common Unit in respect of such Quarter over (b) the sum of all Available Cash distributed with respect to a Common Unit in respect of such Quarter pursuant to Section 6.4(a)(i).

Conflicts Committee ” means a committee of the Board of Directors composed entirely of two or more directors, each of whom (a) is not an officer or employee of the General Partner, (b) is not an officer or employee of any Affiliate of the General Partner or a director of any Affiliate of the General Partner (other than any Group Member), (c) is not a holder of any ownership interest in the General Partner or any of its Affiliates, including any Group Member, other than Common Units and awards that are granted to such director under the LTIP and (d) is determined by the Board of Directors of the General Partner to be independent under the independence standards for directors who serve on an audit committee of a board of directors established by the Securities Exchange Act and the rules and regulations of the Commission thereunder and by the National Securities Exchange on which any class of Partnership Interests is listed or admitted to trading (or, if the Partnership Interests are not listed or admitted on any National Securities Exchange, the New York Stock Exchange).

Construction Debt ” means debt incurred to fund (a) all or a portion of a Capital Improvement, (b) interest payments (including periodic net payments under related interest rate swap agreements) and related fees on other Construction Debt or (c) distributions paid in respect of Construction Equity, and incremental Incentive Distributions in respect thereof.

Construction Equity ” means equity issued to fund (a) all or a portion of a Capital Improvement, (b) interest payments (including periodic net payments under related interest rate swap agreements) and related fees on Construction Debt or (c) distributions paid in respect of Construction Equity, and incremental Incentive Distributions in respect thereof; provided , that Construction Equity shall not include equity issued in the Initial Offering.

Construction Period ” means the period beginning on the date that a Group Member enters into a binding obligation to commence a Capital Improvement and ending on the earlier to occur of the date that such Capital Improvement Commences Commercial Service and the date that the Group Member abandons or disposes of such Capital Improvement.

 

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Contributed Property ” means each property, in such form as may be permitted by the Delaware Act, but excluding cash, contributed to the Partnership. Once the Carrying Value of a Contributed Property is adjusted pursuant to Section 5.5(d), such property shall no longer constitute a Contributed Property, but shall be deemed an Adjusted Property.

Contribution Agreement ” means that certain Contribution, Conveyance and Assumption Agreement, dated as of October 16, 2013, among the General Partner, the Partnership, Western and certain other parties, together with the additional conveyance documents and instruments contemplated or referenced thereunder, as such may be amended, supplemented or restated from time to time.

Cumulative Common Unit Arrearage ” means, with respect to any Common Unit, whenever issued, and as of the end of any Quarter, the excess, if any, of (a) the sum of the Common Unit Arrearages with respect to an Initial Common Unit for each of the Quarters wholly within the Subordination Period ending on or before the last day of such Quarter over (b) the sum of any distributions theretofore made pursuant to Section 6.4(a)(ii) and Section 6.5(b) with respect to an Initial Common Unit (including any distributions to be made in respect of the last of such Quarters).

Curative Allocation ” means any allocation of an item of income, gain, deduction, loss or credit pursuant to the provisions of Section 6.1(d)(xi).

Current Market Price ” means, in respect of any class of Limited Partner Interests, as of the date of determination, the average of the daily Closing Prices per Limited Partner Interest of such class for the 20 consecutive Trading Days immediately prior to such date.

Deferred Issuance and Distribution ” means both (a) the issuance by the Partnership of a number of additional Common Units that is equal to the excess, if any, of (x) 2,062,500 over (y) the aggregate number, if any, of Common Units actually purchased by and issued to the Underwriters pursuant to the Underwriters’ Option on the Option Closing Date(s), and (b) a distribution of any cash paid by the Underwriters to the Partnership on or in connection with any Option Closing Date with respect to Common Units issued by the Partnership upon the applicable exercise of the Underwriters’ Option as described in Section 5.3(b).

Delaware Act ” means the Delaware Revised Uniform Limited Partnership Act, 6 Del C. Section 17-101, et seq., as amended, supplemented or restated from time to time, and any successor to such statute.

Departing General Partner ” means a former General Partner from and after the effective date of any withdrawal or removal of such former General Partner pursuant to Section 11.1 or 11.2.

Derivative Instruments ” means options, rights, warrants, appreciation rights, tracking, profit and phantom interests and other derivative instruments (other than equity interests in the Partnership) relating to, convertible into or exchangeable for Partnership Interests.

 

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Disposed of Adjusted Property ” is defined in Section 6.1(d)(xiii)(B).

Economic Risk of Loss ” has the meaning set forth in Treasury Regulation Section 1.752-2(a).

Eligibility Certificate ” is defined in Section 4.8(b).

Eligible Holder ” means a Limited Partner whose (a) U.S. federal income tax status would not, in the determination of the General Partner, have the material adverse effect described in Section 4.9(a)(i) or (b) nationality, citizenship or other related status would not, in the determination of the General Partner, create a substantial risk of cancellation or forfeiture as described in Section 4.9(a)(ii).

Estimated Incremental Quarterly Tax Amount ” is defined in Section 6.9.

Event Issue Value ” means, with respect to any Common Unit as of any date of determination, (i) in the case of a Revaluation Event that includes the issuance of Common Units pursuant to a public offering and solely for cash, the price paid for such Common Units, or (ii) in the case of any other Revaluation Event, the Closing Price of the Common Units on the date of such Revaluation Event or, if the General Partner determines that a value for the Common Unit other than such Closing Price more accurately reflects the Event Issue Value, the value determined by the General Partner.

Event of Withdrawal ” is defined in Section 11.1(a).

Excess Additional Book Basis ” has the meaning set forth in the definition of Additional Book Basis Derivative Items.

Excess Distribution ” is defined in Section 6.1(d)(iii)(A).

Excess Distribution Unit ” is defined in Section 6.1(d)(iii)(A).

Expansion Capital Expenditures ” means cash expenditures (including transaction expenses) for Capital Improvements, and shall not include Maintenance Capital Expenditures or Investment Capital Expenditures. Expansion Capital Expenditures shall include interest (including periodic net payments under related interest rate swap agreements) and related fees on Construction Debt and paid in respect of the Construction Period. Where cash expenditures are made in part for Expansion Capital Expenditures and in part for other purposes, the General Partner shall determine the allocation between the amounts paid for each.

Final Subordinated Units ” is defined in Section 6.1(d)(x)(A).

First Liquidation Target Amount ” is defined in Section 6.1(c)(i)(D).

First Target Distribution ” means $0.3306 per Unit per Quarter (or, with respect to periods of less than a full fiscal quarter, it means the product of such amount multiplied by a

 

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fraction of which the numerator is the number of days in such period, and the denominator is the total number of days in such fiscal quarter), subject to adjustment in accordance with Section 5.11, Section 6.6 and Section 6.9.

Fully Diluted Weighted Average Basis ” means, when calculating the number of Outstanding Units for any period, the sum of (1) the weighted average number of Outstanding Units during such period plus (2) all Partnership Interests and Derivative Instruments (a) that are convertible into or exercisable or exchangeable for Units or for which Units are issuable, each case that are senior to or pari passu with the Subordinated Units, (b) whose conversion, exercise or exchange price is less than the Current Market Price on the date of such calculation, (c) that may be converted into or exercised or exchanged for such Units prior to or during the Quarter immediately following the end of the period for which the calculation is being made without the satisfaction of any contingency beyond the control of the holder other than the payment of consideration and the compliance with administrative mechanics applicable to such conversion, exercise or exchange and (d) that were not converted into or exercised or exchanged for such Units during the period for which the calculation is being made; provided , however , that for purposes of determining the number of Outstanding Units on a Fully Diluted Weighted Average Basis when calculating whether the Subordination Period has ended or the Subordinated Units are entitled to convert into Common Units pursuant to Section 5.7, such Partnership Interests and Derivative Instruments shall be deemed to have been Outstanding Units only for the four Quarters that comprise the last four Quarters of the measurement period; provided , further , that if consideration will be paid to any Group Member in connection with such conversion, exercise or exchange, the number of Units to be included in such calculation shall be that number equal to the difference between (i) the number of Units issuable upon such conversion, exercise or exchange and (ii) the number of Units that such consideration would purchase at the Current Market Price.

General Partner ” means Western Refining Logistics GP LLC, a Delaware limited liability company, and its successors and permitted assigns that are admitted to the Partnership as general partner of the Partnership, in their capacities as general partner of the Partnership (except as the context otherwise requires).

General Partner Interest ” means the non-economic management interest of the General Partner in the Partnership (in its capacity as a general partner and without reference to any Limited Partner Interest held by it) and includes any and all rights, powers and benefits to which the General Partner is entitled as provided in this Agreement, together with all obligations of the General Partner to comply with the terms and provisions of this Agreement. The General Partner Interest does not include any rights to profits or losses or any rights to receive distributions from operations or upon the liquidation or winding-up of the Partnership.

Gross Liability Value ” means, with respect to any Liability of the Partnership described in Treasury Regulation Section 1.752-7(b)(3)(i), the amount of cash that a willing assignor would pay to a willing assignee to assume such Liability in an arm’s-length transaction.

 

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Group ” means two or more Persons that with or through any of their respective Affiliates or Associates have any contract, arrangement, understanding or relationship for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent given to such Person in response to a proxy or consent solicitation made to 10 or more Persons), exercising investment power or disposing of any Partnership Interests with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, Partnership Interests.

Group Member ” means a member of the Partnership Group.

Group Member Agreement ” means the partnership agreement of any Group Member, other than the Partnership, that is a limited or general partnership, the limited liability company agreement of any Group Member that is a limited liability company, the certificate of incorporation and bylaws or similar organizational documents of any Group Member that is a corporation, the joint venture agreement or similar governing document of any Group Member that is a joint venture and the governing or organizational or similar documents of any other Group Member that is a Person other than a limited or general partnership, limited liability company, corporation or joint venture, as such may be amended, supplemented or restated from time to time.

Hedge Contract ” means any exchange, swap, forward, cap, floor, collar, option or other similar agreement or arrangement entered into for the purpose of reducing the exposure of the Partnership Group to fluctuations in the price of hydrocarbons, interest rates, basis differentials or currency exchange rates in their operations or financing activities, in each case, other than for speculative purposes.

Holder ” as used in Section 7.12, is defined in Section 7.12(a).

IDR Reset Common Unit ” is defined in Section 5.11(a).

IDR Reset Election ” is defined in Section 5.11(a).

Incentive Distribution Right ” means a Limited Partner Interest having the rights and obligations specified with respect to Incentive Distribution Rights in this Agreement.

Incentive Distributions ” means any amount of cash distributed with respect to the Incentive Distribution Rights pursuant to Section 6.4.

Incremental Income Taxes ” is defined in Section 6.9.

Indemnified Persons ” is defined in Section 7.12(c).

Indemnitee ” means (a) any General Partner, (b) any Departing General Partner, (c) any Person who is or was an Affiliate of the General Partner or any Departing General Partner, (d) any Person who is or was a manager, managing member, general partner, director, officer, employee, agent, fiduciary or trustee of any (i) Group Member, a General Partner or any

 

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Departing General Partner or (ii) any Affiliate of any Group Member, a General Partner or any Departing General Partner, (e) any Person who is or was serving at the request of a General Partner, any Departing General Partner or any of their respective Affiliates as an officer, director, manager, managing member, general partner, employee, agent, fiduciary or trustee of another Person owing a fiduciary or similar duty to any Group Member; provided that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services, (f) any Person who controls a General Partner or Departing General Partner and (g) any Person the General Partner designates as an “Indemnitee” for purposes of this Agreement because such Person’s service, status or relationship exposes such Person to potential claims, demands, actions, suits or proceedings relating to the Partnership Group’s business and affairs.

Ineligible Holder ” is defined in Section 4.8(c).

Initial Common Units ” means the Common Units sold in the Initial Offering.

Initial Limited Partners ” means the Organizational Limited Partner (with respect to the Common Units and Subordinated Units received by it as described in Section 5.2), WRCLP, a Delaware limited partnership (with respect to the Common Units and Subordinated Units received by it as described in Section 5.2), the General Partner (with respect to the Incentive Distribution Rights), and the Underwriters, in each case upon being admitted to the Partnership in accordance with Section 10.1.

Initial Offering ” means the initial offering and sale of Common Units to the public, as described in the Registration Statement, including any Common Units issued pursuant to the exercise of the Underwriters’ Option.

Initial Unit Price ” means (a) with respect to the Common Units and the Subordinated Units, the initial public offering price per Common Unit at which the Common Units were first offered to the public for sale as set forth on the cover page of the prospectus included as part of the Registration Statement and first issued at or after the time the Registration Statement first became effective or (b) with respect to any other class or series of Units, the price per Unit at which such class or series of Units is initially sold by the Partnership, as determined by the General Partner, in each case adjusted as the General Partner determines to be appropriate to give effect to any distribution, subdivision or combination of Units.

Interim Capital Transactions ” means the following transactions if they occur prior to the Liquidation Date: (a) borrowings, refinancings or refundings of indebtedness (other than Working Capital Borrowings and other than for items purchased on open account or for a deferred purchase price in the ordinary course of business) by any Group Member and sales of debt securities of any Group Member; (b) sales of equity interests of any Group Member (including the Common Units sold to the Underwriters pursuant to the Underwriting Agreement) to anyone other than a Group Member and (c) sales or other voluntary or involuntary dispositions of any assets of any Group Member other than (i) sales or other dispositions of inventory, accounts receivable and other assets in the ordinary course of business, and (ii) sales or other dispositions of assets as part of normal retirements or replacements.

 

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Investment Capital Expenditures ” means capital expenditures other than Maintenance Capital Expenditures and Expansion Capital Expenditures.

Liability ” means any liability or obligation of any nature, whether accrued, contingent or otherwise.

Limited Partner ” means, unless the context otherwise requires, each Initial Limited Partner and each additional Person that becomes a Limited Partner pursuant to the terms of this Agreement, in each case, in such Person’s capacity as a limited partner of the Partnership.

Limited Partner Interest ” means the ownership interest of a Limited Partner in the Partnership, which may be evidenced by Common Units, Subordinated Units, Incentive Distribution Rights or other Partnership Interests (other than a General Partner Interest) or a combination thereof or interest therein, and includes any and all benefits to which such Limited Partner is entitled as provided in this Agreement, together with all obligations of such Limited Partner to comply with the terms and provisions of this Agreement.

Liquidation Date ” means (a) in the case of an event giving rise to the dissolution of the Partnership of the type described in clauses (a) and (b) of the first sentence of Section 12.2, the date on which the applicable time period during which the holders of Outstanding Units have the right to elect to continue the business of the Partnership has expired without such an election being made, and (b) in the case of any other event giving rise to the dissolution of the Partnership, the date on which such event occurs.

Liquidator ” means one or more Persons selected by the General Partner to perform the functions described in Section 12.4 as liquidating trustee of the Partnership within the meaning of the Delaware Act.

LTIP ” means benefit plans, programs and practices adopted by the General Partner pursuant to Section 7.5(b).

Maintenance Capital Expenditures ” means cash expenditures (including expenditures for the addition or improvement to or replacement of the assets owned by any Group Member or for the acquisition of existing, or the construction or development of new, assets) made to maintain the long-term operating capacity of the assets of or the operating income of the Partnership Group.

Merger Agreement ” is defined in Section 14.1.

Minimum Quarterly Distribution ” means $0.2875 per Unit per Quarter (or with respect to periods of less than a full fiscal quarter, it means the product of such amount multiplied by a fraction of which the numerator is the number of days in such period and the denominator is the total number of days in such fiscal quarter), subject to adjustment in accordance with Section 5.11, Section 6.6 and Section 6.9.

 

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National Securities Exchange ” means an exchange registered with the Commission under Section 6(a) of the Securities Exchange Act (or any successor to such Section).

Net Agreed Value ” means, (a) in the case of any Contributed Property, the Agreed Value of such property reduced by any Liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed and (b) in the case of any property distributed to a Partner by the Partnership, the Partnership’s Carrying Value of such property (as adjusted pursuant to Section 5.5(d)(ii)) at the time such property is distributed, reduced by any Liabilities either assumed by such Partner upon such distribution or to which such property is subject at the time of distribution.

Net Income ” means, for any taxable period, the excess, if any, of the Partnership’s items of income and gain (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable period over the Partnership’s items of loss and deduction (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable period. The items included in the calculation of Net Income shall be determined in accordance with Section 5.5 but shall not include any items specially allocated under Section 6.1(d); provided , that the determination of the items that have been specially allocated under Section 6.1(d) shall be made without regard to any reversal of such items under Section 6.1(d)(xiii).

Net Loss ” means, for any taxable period, the excess, if any, of the Partnership’s items of loss and deduction (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable period over the Partnership’s items of income and gain (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable period. The items included in the calculation of Net Loss shall be determined in accordance with Section 5.5 but shall not include any items specially allocated under Section 6.1(d); provided , that the determination of the items that have been specially allocated under Section 6.1(d) shall be made without regard to any reversal of such items under Section 6.1(d)(xiii).

Net Positive Adjustments ” means, with respect to any Partner, the excess, if any, of the total positive adjustments over the total negative adjustments made to the Capital Account of such Partner pursuant to Book-Up Events and Book-Down Events.

Net Termination Gain ” means, for any taxable period, (a) the sum, if positive, of all items of income, gain, loss or deduction (determined in accordance with Section 5.5) that are recognized (i) after the Liquidation Date or (ii) upon the sale, exchange or other disposition of all or substantially all of the assets of the Partnership Group, taken as a whole, in a single transaction or a series of related transactions (excluding any disposition to a member of the Partnership Group), or (b) the excess, if any, of the aggregate amount of Unrealized Gain over the aggregate amount of Unrealized Loss deemed recognized by the Partnership pursuant to Section 5.5(d) on the date of a Revaluation Event; provided, however , the items included in the determination of Net Termination Gain shall not include any items of income, gain or loss specially allocated under Section 6.1(d).

 

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Net Termination Loss ” means, for any taxable period, (a) the sum, if negative, of all items of income, gain, loss or deduction (determined in accordance with Section 5.5) that are recognized (i) after the Liquidation Date or (ii) upon the sale, exchange or other disposition of all or substantially all of the assets of the Partnership Group, taken as a whole, in a single transaction or a series of related transactions (excluding any disposition to a member of the Partnership Group), or (b) the excess, if any, of the aggregate amount of Unrealized Loss over the aggregate amount of Unrealized Gain deemed recognized by the Partnership pursuant to Section 5.5(d) on the date of a Revaluation Event; provided, however , items included in the determination of Net Termination Loss shall not include any items of income, gain or loss specially allocated under Section 6.1(d).

Nonrecourse Built-in Gain ” means with respect to any Contributed Properties or Adjusted Properties that are subject to a mortgage or pledge securing a Nonrecourse Liability, the amount of any taxable gain that would be allocated to the Partners pursuant to Section 6.2(b) if such properties were disposed of in a taxable transaction in full satisfaction of such liabilities and for no other consideration.

Nonrecourse Deductions ” means any and all items of loss, deduction or expenditure (including any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(b)(1), are attributable to a Nonrecourse Liability.

Nonrecourse Liability ” has the meaning set forth in Treasury Regulation Section 1.752-1(a)(2).

Notice of Election to Purchase ” is defined in Section 15.1(b).

Omnibus Agreement ” means that certain Omnibus Agreement, dated as of the Closing Date, among Western, the General Partner and the Partnership and, for certain limited purposes specified therein, Western Refining Southwest, WRCLP, and Western Refining Wholesale, Inc., an Arizona corporation, as such may be amended, supplemented or restated from time to time.

Operating Expenditures ” means all Partnership Group cash expenditures (or the Partnership’s proportionate share of expenditures in the case of Subsidiaries that are not wholly owned), including taxes, reimbursements of expenses of the General Partner and its Affiliates, payments made under any Hedge Contracts, officer compensation, repayment of Working Capital Borrowings, debt service payments and capital expenditures, subject to the following:

(a) repayments of Working Capital Borrowings deducted from Operating Surplus pursuant to clause (b)(iii) of the definition of “Operating Surplus” shall not constitute Operating Expenditures when actually repaid;

(b) payments (including prepayments and prepayment penalties and the purchase price of indebtedness that is repurchased and cancelled) of principal of and premium on indebtedness other than Working Capital Borrowings shall not constitute Operating Expenditures;

 

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(c) Operating Expenditures shall not include (i) Expansion Capital Expenditures, (ii) Investment Capital Expenditures, (iii) payment of transaction expenses (including taxes) relating to Interim Capital Transactions, (iv) distributions to Partners, or (v) repurchases of Partnership Interests, other than repurchases of Partnership Interests to satisfy obligations under employee benefit plans, or reimbursements of expenses of the General Partner for such repurchases. Where capital expenditures are made in part for Maintenance Capital Expenditures and in part for other purposes, the General Partner shall determine the allocation between the amounts paid for each; and

(d) (i) payments made in connection with the initial purchase of any Hedge Contract shall be amortized over the life of such Hedge Contract and (ii) payments made in connection with the termination of any Hedge Contract prior to its stipulated settlement or termination date shall be included in equal quarterly installments over what would have been the remaining scheduled term of such Hedge Contract had it not been so terminated.

Operating Surplus ” means, with respect to any period ending prior to the Liquidation Date, on a cumulative basis and without duplication,

(a) the sum of (i) $45 million, (ii) all cash receipts of the Partnership Group (or the Partnership’s proportionate share of cash receipts in the case of Subsidiaries that are not wholly owned) for the period beginning on the Closing Date and ending on the last day of such period, but excluding cash receipts from Interim Capital Transactions and provided that cash receipts from the termination of any Hedge Contract prior to its stipulated settlement or termination date shall be included in Operating Surplus in equal quarterly installments over what would have been the remaining scheduled life of such Hedge Contract had it not been so terminated, (iii) all cash receipts of the Partnership Group (or the Partnership’s proportionate share of cash receipts in the case of Subsidiaries that are not wholly owned) after the end of such period but on or before the date of determination of Operating Surplus with respect to such period resulting from Working Capital Borrowings, and (iv) the amount of cash distributions paid in respect of Construction Equity (and incremental Incentive Distributions in respect thereof) and paid in respect of the Construction Period, less

(b) the sum of (i) Operating Expenditures for the period beginning on the Closing Date and ending on the last day of such period; (ii) the amount of cash reserves established by the General Partner (or the Partnership’s proportionate share of cash reserves in the case of Subsidiaries that are not wholly owned) to provide funds for future Operating Expenditures; (iii) all Working Capital Borrowings not repaid within twelve (12) months after having been incurred or repaid within such twelve-month period with the proceeds of additional Working Capital Borrowings and (iv) any cash loss realized on disposition of an Investment Capital Expenditure;

provided , however , that the General Partner’s estimates of disbursements made (including contributions to a Group Member or disbursements on behalf of a Group Member), cash received or cash reserves established, increased or reduced after the end of such period but on or before the date of determination of Available Cash with respect to such period shall be deemed to have been made, received, established, increased or reduced, for purposes of determining Operating Surplus, within such period if the General Partner so determines.

 

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Notwithstanding the foregoing, “ Operating Surplus ” with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero. Cash receipts from an Investment Capital Expenditure shall be treated as cash receipts only to the extent they are a return on principal, but in no event shall a return of principal be treated as cash receipts.

Opinion of Counsel ” means a written opinion of counsel (who may be regular counsel to the Partnership or the General Partner or any of its Affiliates) acceptable to the General Partner.

Option Closing Date ” means the date or dates on which any Common Units are sold by the Partnership to the Underwriters upon exercise of the Underwriters’ Option.

Organizational Limited Partner ” means Western Refining Southwest, in its capacity as the organizational limited partner of the Partnership pursuant to this Agreement.

Outstanding ” means, with respect to Partnership Interests, all Partnership Interests that are issued by the Partnership and reflected as outstanding on the Partnership’s books and records as of the date of determination; provided , however , that if at any time any Person or Group (other than the General Partner or its Affiliates) beneficially owns 20% or more of the Partnership Interests of any class, none of the Partnership Interests owned by such Person or Group shall be entitled to be voted on any matter or be considered to be Outstanding when sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required by law), calculating required votes, determining the presence of a quorum or for other similar purposes under this Agreement, except that Partnership Interests so owned shall be considered to be Outstanding for purposes of Section 11.1(b)(iv) (such Partnership Interests shall not, however, be treated as a separate class of Partnership Interests for purposes of this Agreement or the Delaware Act); provided , further , that the foregoing limitation shall not apply to (i) any Person or Group who acquired 20% or more of the Partnership Interests of any class directly from the General Partner or its Affiliates (other than the Partnership), (ii) any Person or Group who acquired 20% or more of the Partnership Interests of any class directly or indirectly from a Person or Group described in clause (i)  provided that the General Partner shall have notified such Person or Group in writing that such limitation shall not apply, or (iii) any Person or Group who acquired 20% or more of any Partnership Interests issued by the Partnership with the written approval of the General Partner.

Partner Nonrecourse Debt ” has the meaning set forth in Treasury Regulation Section 1.704-2(b)(4).

Partner Nonrecourse Debt Minimum Gain ” has the meaning set forth in Treasury Regulation Section 1.704-2(i)(2).

Partner Nonrecourse Deductions ” means any and all items of loss, deduction or expenditure (including any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(i), are attributable to a Partner Nonrecourse Debt.

 

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Partners ” means the General Partner and the Limited Partners.

Partnership ” means Western Refining Logistics, LP, a Delaware limited partnership.

Partnership Group ” means, collectively, the Partnership and its Subsidiaries.

Partnership Interest ” means any class or series of equity interest (or, in the case of the General Partner, management interest) in the Partnership, which shall include any General Partner Interest and Limited Partner Interests but shall exclude all Derivative Instruments.

Partnership Minimum Gain ” means that amount determined in accordance with the principles of Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d).

Percentage Interest ” means, as of any date of determination, as to any Unitholder with respect to Units, the quotient obtained by dividing (i) the number of Units held by such Unitholder by (ii) the total number of Outstanding Units. The Percentage Interest with respect to both (x) an Incentive Distribution Right and (y) the General Partner Interest shall at all times be zero.

Person ” means an individual or a corporation, firm, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

Per Unit Capital Amount ” means, as of any date of determination, the Capital Account, stated on a per Unit basis, underlying any class of Units held by a Person other than the General Partner or any Affiliate of the General Partner who holds Units.

Privately Placed Units ” means any Common Units issued for cash or property other than pursuant to a public offering.

Pro Rata ” means (a) when used with respect to Units or any class thereof, apportioned among all designated Units in accordance with their relative Percentage Interests, (b) when used with respect to Partners or Record Holders, apportioned among all Partners or Record Holders in accordance with their relative Percentage Interests and (c) when used with respect to holders of Incentive Distribution Rights, apportioned among all holders of Incentive Distribution Rights in accordance with the relative number or percentage of Incentive Distribution Rights held by each such holder.

Purchase Date ” means the date determined by the General Partner as the date for purchase of all Outstanding Limited Partner Interests of a certain class (other than Limited Partner Interests owned by the General Partner and its Affiliates) pursuant to Article XV.

 

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Quarter ” means, unless the context requires otherwise, a fiscal quarter of the Partnership, or, with respect to the fiscal quarter of the Partnership in which the Closing Date occurs, the portion of such fiscal quarter after the Closing Date.

Rate Eligibility Trigger ” is defined in Section 4.8(a)(i).

Recapture Income ” means any gain recognized by the Partnership (computed without regard to any adjustment required by Section 734 or Section 743 of the Code) upon the disposition of any property or asset of the Partnership, which gain is characterized as ordinary income because it represents the recapture of deductions previously taken with respect to such property or asset.

Record Date ” means the date established by the General Partner or otherwise in accordance with this Agreement for determining (a) the identity of the Record Holders entitled to notice of, or to vote at, any meeting of Limited Partners or entitled to vote by ballot or give approval of Partnership action in writing without a meeting or entitled to exercise rights in respect of any lawful action of Limited Partners or (b) the identity of Record Holders entitled to receive any report or distribution or to participate in any offer.

Record Holder ” means (a) with respect to any class of Partnership Interests for which a Transfer Agent has been appointed, the Person in whose name a Partnership Interest of such class is registered on the books of the Transfer Agent as of the closing of business on a particular Business Day, or (b) with respect to other classes of Partnership Interests, the Person in whose name any such other Partnership Interest is registered on the books that the General Partner has caused to be kept as of the closing of business on such Business Day.

Redeemable Interests ” means any Partnership Interests for which a redemption notice has been given, and has not been withdrawn, pursuant to Section 4.9.

Registration Statement ” means the Registration Statement on Form S-1 (Registration No. 333-190135) as it has been or as it may be amended or supplemented from time to time, filed by the Partnership with the Commission under the Securities Act to register the offering and sale of the Common Units in the Initial Offering.

Remaining Net Positive Adjustments ” means as of the end of any taxable period, (i) with respect to the Unitholders holding Common Units or Subordinated Units, the excess of (a) the Net Positive Adjustments of the Unitholders holding Common Units or Subordinated Units as of the end of such period over (b) the sum of those Unitholders’ Share of Additional Book Basis Derivative Items for each prior taxable period and (ii) with respect to the holders of Incentive Distribution Rights, the excess of (a) the Net Positive Adjustments of the holders of Incentive Distribution Rights as of the end of such period over (b) the sum of the Share of Additional Book Basis Derivative Items of the holders of the Incentive Distribution Rights for each prior taxable period.

 

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Required Allocations ” means any allocation of an item of income, gain, loss or deduction pursuant to Section 6.1(d)(i), Section 6.1(d)(ii), Section 6.1(d)(iv), Section 6.1(d)(v), Section 6.1(d)(vi), Section 6.1(d)(vii) or Section 6.1(d)(ix).

Reset MQD ” is defined in Section 5.11(a).

Reset Notice ” is defined in Section 5.11(b).

Revaluation Event ” means an event that results in adjustment of the Carrying Value of each Partnership property pursuant to Section 5.5(d).

Second Liquidation Target Amount ” is defined in Section 6.1(c)(i)(E).

Second Target Distribution ” means $0.3594 per Unit per Quarter (or, with respect to periods of less than a full fiscal quarter, it means the product of such amount multiplied by a fraction of which the numerator is the number of days in such period, and the denominator is the total number of days in such fiscal quarter), subject to adjustment in accordance with Section 5.11, Section 6.6 and Section 6.9.

Securities Act ” means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such statute.

Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended, supplemented or restated from time to time and any successor to such statute.

Share of Additional Book Basis Derivative Items ” means in connection with any allocation of Additional Book Basis Derivative Items for any taxable period, (i) with respect to the Unitholders holding Common Units or Subordinated Units, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Unitholders’ Remaining Net Positive Adjustments as of the end of such taxable period bears to the Aggregate Remaining Net Positive Adjustments as of that time and (ii) with respect to the Partners holding Incentive Distribution Rights, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Remaining Net Positive Adjustments of the Partners holding the Incentive Distribution Rights as of the end of such period bears to the Aggregate Remaining Net Positive Adjustments as of that time.

Special Approval ” means approval by a majority of the members of the Conflicts Committee.

Subordinated Unit ” means a Partnership Interest having the rights and obligations specified with respect to Subordinated Units in this Agreement. The term “Subordinated Unit” does not refer to or include a Common Unit. A Subordinated Unit that is convertible into a Common Unit shall not constitute a Common Unit until such conversion occurs.

 

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Subordination Period ” means the period commencing on the Closing Date and ending on the first to occur of the following dates:

(a) the first Business Day following the distribution of Available Cash to Partners pursuant to Section 6.3(a) in respect of any Quarter beginning with the Quarter ending September 30, 2016 in respect of which (i) (A) distributions of Available Cash from Operating Surplus on each of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units, in each case with respect to each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units, in each case in respect of such periods and (B) the Adjusted Operating Surplus for each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Common Units, Subordinated Units and any other Units that are senior or equal in right of distribution to the Subordinated Units, in each case that were Outstanding during such periods on a Fully Diluted Weighted Average Basis, and (ii) there are no Cumulative Common Unit Arrearages;

(b) the first Business Day following the distribution of Available Cash pursuant to Section 6.3(a) in respect of any Quarter beginning with the Quarter ending September 30, 2014, in respect of which (i) (A) distributions of Available Cash from Operating Surplus on each of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units, in each case with respect to the four-Quarter period immediately preceding such date equaled or exceeded 150% of the Minimum Quarterly Distribution on all of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units, in each case in respect of such period, and (B) the Adjusted Operating Surplus for the four-Quarter period immediately preceding such date equaled or exceeded 150% of the sum of the Minimum Quarterly Distribution on all of the Common Units and Subordinated Units and any other Units that are senior or equal in right of distribution to the Subordinated Units, in each case that were Outstanding during such period on a Fully Diluted Weighted Average Basis and the corresponding Incentive Distributions and (ii) there are no Cumulative Common Unit Arrearages; and

(c) the first date on which there are no longer outstanding any Subordinated Units due to the conversion of Subordinated Units into Common Units pursuant to Section 5.7 or otherwise.

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 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 in which such Person, one or more Subsidiaries of such Person, or a combination thereof,

 

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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 or other governing body of such Person.

Surviving Business Entity ” is defined in Section 14.2(b)(ii).

Target Distribution ” means each of the Minimum Quarterly Distribution, the First Target Distribution, Second Target Distribution and Third Target Distribution.

Third Target Distribution ” means $0.4313 per Unit per Quarter (or, with respect to periods of less than a full fiscal quarter, it means the product of such amount multiplied by a fraction of which the numerator is the number of days in such period, and the denominator is the total number of days in such fiscal quarter), subject to adjustment in accordance with Section 5.11, Section 6.6 and Section 6.9.

Trading Day ” means a day on which the principal National Securities Exchange on which the referenced Partnership Interests of any class are listed or admitted to trading is open for the transaction of business or, if such Partnership Interests are not listed or admitted to trading on any National Securities Exchange, a day on which banking institutions in New York City generally are open.

transfer ” is defined in Section 4.4(a).

Transfer Agent ” means such bank, trust company or other Person (including the General Partner or one of its Affiliates) as may be appointed from time to time by the General Partner to act as registrar and transfer agent for any class of Partnership Interests in accordance with the Securities Exchange Act and the rules of the National Securities Exchange on which such Partnership Interests are listed (if any); provided , that if no such Person is appointed as registrar and transfer agent for any class of Partnership Interests, the General Partner shall act in such capacity.

Underwriter ” means each Person named as an underwriter in Schedule I to the Underwriting Agreement who purchases Common Units pursuant thereto.

Underwriters’ Option ” means the option to purchase additional Common Units granted to the Underwriters by the Partnership pursuant to the Underwriting Agreement.

Underwriting Agreement ” means that certain Underwriting Agreement, dated as of October 9, 2013, among the Underwriters, the Partnership, the General Partner and the other parties thereto, providing for the purchase of Common Units from the Partnership by the Underwriters.

Unit ” means a Partnership Interest that is designated as a “Unit” and shall include Common Units and Subordinated Units but shall not include (i) the General Partner Interest or (ii) Incentive Distribution Rights.

 

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Unitholders ” means the Record Holders of Units.

Unit Majority ” means (i) during the Subordination Period, at least a majority of the Outstanding Common Units (excluding Common Units owned by the General Partner and its Affiliates), voting as a class, and at least a majority of the Outstanding Subordinated Units, voting as a class, and (ii) after the end of the Subordination Period, at least a majority of the Outstanding Common Units.

Unpaid MQD ” is defined in Section 6.1(c)(i)(B).

Unrealized Gain ” attributable to any item of Partnership property means, as of any date of determination, the excess, if any, of (a) the fair market value of such property as of such date (as determined under Section 5.5(d)) over (b) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to Section 5.5(d) as of such date).

Unrealized Loss ” attributable to any item of Partnership property means, as of any date of determination, the excess, if any, of (a) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to Section 5.5(d) as of such date) over (b) the fair market value of such property as of such date (as determined under Section 5.5(d)).

Unrecovered Initial Unit Price ” means at any time, with respect to a Unit, the Initial Unit Price less the sum of all distributions constituting Capital Surplus theretofore made in respect of an Initial Common Unit and any distributions of cash (or the Net Agreed Value of any distributions in kind) in connection with the dissolution and liquidation of the Partnership theretofore made in respect of an Initial Common Unit, adjusted as the General Partner determines to be appropriate to give effect to any distribution, subdivision, or combination of such Units.

Unrestricted Person ” means (a) each Indemnitee, (b) each Partner, (c) each Person who is or was a member, partner, director, officer, employee or agent of any Group Member, a General Partner or any Departing General Partner or any Affiliate of any Group Member, a General Partner or any Departing General Partner and (d) any Person the General Partner designates as an “Unrestricted Person” for purposes of this Agreement.

U.S. GAAP ” means United States generally accepted accounting principles, as in effect from time to time, consistently applied.

Western ” means Western Refining, Inc., a Delaware corporation.

WRCLP ” means Western Refining Company, L.P., a Delaware limited partnership.

Western Refining Southwest ” means Western Refining Southwest, Inc., a Arizona corporation.

Withdrawal Opinion of Counsel ” is defined in Section 11.1(b).

 

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Working Capital Borrowings ” means borrowings that the General Partner intends the Partnership to use for working capital purposes or to pay distributions to Partners, made pursuant to a credit facility, commercial paper facility or other similar financing arrangement; provided that when incurred it is the intent of the borrower to repay such borrowings within 12 months from sources other than additional Working Capital Borrowings.

Section 1.2 Construction . Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; (c) the terms “include”, “includes”, “including” and words of like import shall be deemed to be followed by the words “without limitation”; and (d) the terms “hereof”, “herein” and “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement. The table of contents and headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement. The General Partner has the power to construe and interpret this Agreement and to act upon any such construction or interpretation. Any construction or interpretation of this Agreement by the General Partner and any action taken pursuant thereto and any determination made by the General Partner in good faith shall, in each case, be conclusive and binding on all Record Holders and all other Persons for all purposes.

ARTICLE II

ORGANIZATION

Section 2.1 Formation . The General Partner and the Organizational Limited Partner have previously formed the Partnership as a limited partnership pursuant to the provisions of the Delaware Act. This amendment and restatement shall become effective on the date of this Agreement. Except as expressly provided to the contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and obligations of the Partners and the administration, dissolution and termination of the Partnership shall be governed by the Delaware Act.

Section 2.2 Name . The name of the Partnership shall be “Western Refining Logistics, LP.” The Partnership’s business may be conducted under any other name or names as determined by the General Partner, including the name of the General Partner. The words “Limited Partnership,” “LP,” “Ltd.” or similar words or letters shall be included in the Partnership’s name where necessary for the purpose of complying with the laws of any jurisdiction that so requires. The General Partner may change the name of the Partnership at any time and from time to time and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.

 

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Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices . Unless and until changed by the General Partner, the registered office of the Partnership in the State of Delaware shall be located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and the registered agent for service of process on the Partnership in the State of Delaware at such registered office shall be The Corporation Trust Company. The principal office of the Partnership shall be located at 123 W. Mills Avenue, El Paso, Texas 79901, or such other place as the General Partner may from time to time designate by notice to the Limited Partners. The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner determines to be necessary or appropriate. The address of the General Partner shall be 123 W. Mills Avenue, El Paso, Texas 79901, or such other place as the General Partner may from time to time designate by notice to the Limited Partners.

Section 2.4 Purpose and Business . The purpose and nature of the business to be conducted by the Partnership shall be to (a) engage directly in, or enter into or form, hold and dispose of any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any business activity that is approved by the General Partner, in its sole discretion, and that lawfully may be conducted by a limited partnership organized pursuant to the Delaware Act and, in connection therewith, to exercise all of the rights and powers conferred upon the Partnership pursuant to the agreements relating to such business activity, and (b) do anything necessary or appropriate to the foregoing, including the making of capital contributions or loans to a Group Member; provided , however , that the General Partner shall not cause the Partnership to engage, directly or indirectly, in any business activity that the General Partner determines would be reasonably likely to cause the Partnership to be treated as an association taxable as a corporation or otherwise taxable as an entity for U.S. federal income tax purposes. To the fullest extent permitted by law, the General Partner shall have no duty or obligation to propose or approve, and may, in its sole discretion, decline to propose or approve, the conduct by the Partnership of any business.

Section 2.5 Powers . The Partnership shall be empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described in Section 2.4 and for the protection and benefit of the Partnership.

Section 2.6 Term . The term of the Partnership commenced upon the filing of the Certificate of Limited Partnership in accordance with the Delaware Act and shall continue in existence until the dissolution of the Partnership in accordance with the provisions of Article XII. The existence of the Partnership as a separate legal entity shall continue until the cancellation of the Certificate of Limited Partnership as provided in the Delaware Act.

 

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Section 2.7 Title to Partnership Assets . Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner, one or more of its Affiliates or one or more nominees, as the General Partner may determine. The General Partner hereby declares and warrants that any Partnership assets for which record title is held in the name of the General Partner or one or more of its Affiliates or one or more nominees shall be held by the General Partner or such Affiliate or nominee for the use and benefit of the Partnership in accordance with the provisions of this Agreement; provided , however , that the General Partner shall use reasonable efforts to cause record title to such assets (other than those assets in respect of which the General Partner determines that the expense and difficulty of conveyancing makes transfer of record title to the Partnership impracticable) to be vested in the Partnership or one or more of the Partnership’s designated Affiliates as soon as reasonably practicable; provided , further , that, prior to the withdrawal or removal of the General Partner or as soon thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer of record title to the Partnership and, prior to any such transfer, will provide for the use of such assets in a manner satisfactory to the General Partner. All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which record title to such Partnership assets is held.

ARTICLE III

RIGHTS OF LIMITED PARTNERS

Section 3.1 Limitation of Liability . The Limited Partners shall have no liability under this Agreement except as expressly provided in this Agreement or the Delaware Act.

Section 3.2 Management of Business . No Limited Partner, in its capacity as such, shall participate in the operation, management or control (within the meaning of the Delaware Act) of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership. All actions taken by any Affiliate of the General Partner or any officer, director, employee, manager, member, general partner, agent or trustee of the General Partner or any of its Affiliates, or any officer, director, employee, manager, member, general partner, agent or trustee of a Group Member, in its capacity as such, shall not be deemed to be participating in the control of the business of the Partnership by a limited partner of the Partnership (within the meaning of Section 17-303(a) of the Delaware Act) and shall not affect, impair or eliminate the limitations on the liability of the Limited Partners under this Agreement.

 

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Section 3.3 Outside Activities of the Limited Partners . Subject to the provisions of Section 7.6, which shall continue to be applicable to the Persons referred to therein, regardless of whether such Persons shall also be Limited Partners, each Limited Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities in direct competition with the Partnership Group. Neither the Partnership nor any of the other Partners shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner.

Section 3.4 Rights of Limited Partners

(a) Each Limited Partner shall have the right, for a purpose that is reasonably related, as determined by the General Partner, to such Limited Partner’s interest as a Limited Partner in the Partnership, upon reasonable written demand stating the purpose of such demand and at such Limited Partner’s own expense, to obtain:

(i) true and full information regarding the status of the business and financial condition of the Partnership (provided that the requirements of this Section 3.4(a)(i) shall be satisfied to the extent the Limited Partner is furnished the Partnership’s most recent annual report and any subsequent quarterly or periodic reports required to be filed (or which would be required to be filed) with the Commission pursuant to Section 13 of the Exchange Act);

(ii) a current list of the name and last known business, residence or mailing address of each Record Holder; and

(iii) a copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto, together with copies of the executed copies of all powers of attorney pursuant to which this Agreement, the Certificate of Limited Partnership and all amendments thereto have been executed.

(b) The rights to information granted the Limited Partners pursuant to Section 3.4(a) replace in their entirety any rights to information provided for in Section 17-305(a) of the Delaware Act and each of the Partners and each other Person or Group who acquires an interest in Partnership Interests hereby agrees to the fullest extent permitted by law that they do not have any rights as Partners to receive any information either pursuant to Sections 17-305(a) of the Delaware Act or otherwise except for the information identified in Section 3.4(a).

(c) The General Partner may keep confidential from the Limited Partners, for such period of time as the General Partner deems reasonable, (i) any information that the General Partner reasonably believes to be in the nature of trade secrets or (ii) other information the disclosure of which the General Partner believes (A) is not in the best interests of the Partnership Group, (B) could damage the Partnership Group or its business or (C) that any Group Member is required by law or by agreement with any third party to keep confidential (other than agreements with Affiliates of the Partnership the primary purpose of which is to circumvent the obligations set forth in this Section 3.4).

(d) Notwithstanding any other provision of this Agreement or Section 17-305 of the Delaware Act, each of the Partners, each other Person who acquires an interest in a Partnership Interest and each other Person bound by this Agreement hereby agrees to the fullest extent permitted by law that they do not have rights to receive information from the Partnership or any Indemnitee for the purpose of determining whether to pursue litigation or assist in pending litigation against the Partnership or any Indemnitee relating to the affairs of the Partnership except pursuant to the applicable rules of discovery relating to litigation commenced by such Person.

 

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ARTICLE IV

CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS

Section 4.1 Certificates . Notwithstanding anything to the contrary herein, unless the General Partner shall determine otherwise in respect of some or all of any or all classes of Partnership Interests, Partnership Interests shall not be evidenced by certificates. Certificates that may be issued shall be executed on behalf of the Partnership by the Chairman of the Board, Chief Executive Officer, President or any Executive Vice President or Vice President and the Chief Financial Officer or the Secretary or any Assistant Secretary of the General Partner. No Certificate for a class of Partnership Interests shall be valid for any purpose until it has been countersigned by the Transfer Agent for such class of Partnership Interests; provided , however , that if the General Partner elects to cause the Partnership to issue Partnership Interests of such class in global form, the Certificate shall be valid upon receipt of a certificate from the Transfer Agent certifying that the Partnership Interests have been duly registered in accordance with the directions of the Partnership. Subject to the requirements of Section 6.7(c), if Common Units are evidenced by Certificates, on or after the date on which Subordinated Units are converted into Common Units, the Record Holders of such Subordinated Units (i) if the Subordinated Units are evidenced by Certificates, may exchange such Certificates for Certificates evidencing Common Units or (ii) if the Subordinated Units are not evidenced by Certificates, shall be issued Certificates evidencing Common Units.

Section 4.2 Mutilated, Destroyed, Lost or Stolen Certificates .

(a) If any mutilated Certificate is surrendered to the Transfer Agent, the appropriate officers of the General Partner on behalf of the Partnership shall execute, and the Transfer Agent shall countersign and deliver in exchange therefor, a new Certificate evidencing the same number and type of Partnership Interests as the Certificate so surrendered.

 

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(b) The appropriate officers of the General Partner on behalf of the Partnership shall execute and deliver, and the Transfer Agent shall countersign, a new Certificate in place of any Certificate previously issued if the Record Holder of the Certificate:

(i) makes proof by affidavit, in form and substance satisfactory to the General Partner, that a previously issued Certificate has been lost, destroyed or stolen;

(ii) requests the issuance of a new Certificate before the General Partner has notice that the Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim;

(iii) if requested by the General Partner, delivers to the General Partner a bond, in form and substance satisfactory to the General Partner, with surety or sureties and with fixed or open penalty as the General Partner may direct to indemnify the Partnership, the Partners, the General Partner and the Transfer Agent against any claim that may be made on account of the alleged loss, destruction or theft of the Certificate; and

(iv) satisfies any other reasonable requirements imposed by the General Partner or the Transfer Agent.

If a Limited Partner fails to notify the General Partner within a reasonable period of time after such Limited Partner has notice of the loss, destruction or theft of a Certificate, and a transfer of the Limited Partner Interests represented by the Certificate is registered before the Partnership, the General Partner or the Transfer Agent receives such notification, the Limited Partner shall be precluded from making any claim against the Partnership, the General Partner or the Transfer Agent for such transfer or for a new Certificate.

(c) As a condition to the issuance of any new Certificate under this Section 4.2, the General Partner may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Transfer Agent) reasonably connected therewith.

Section 4.3 Record Holders . The Partnership and the General Partner shall be entitled to recognize the Record Holder as the Partner with respect to any Partnership Interest and, accordingly, shall not be bound to recognize any equitable or other claim to, or interest in, such Partnership Interest on the part of any other Person, regardless of whether the Partnership or the General Partner shall have actual or other notice thereof, except as otherwise provided by law or any applicable rule, regulation, guideline or requirement of any National Securities Exchange on which such Partnership Interests are listed or admitted to trading. Without limiting the foregoing, when a Person (such as a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing) is acting as nominee, agent or in some other representative capacity for another Person in acquiring and/or holding Partnership Interests, as between the Partnership on the one hand, and such other Persons on the other, such representative Person shall be (a) the Record Holder of such Partnership Interest and (b) bound by this Agreement and shall have the rights and obligations of a Partner hereunder as, and to the extent, provided herein.

 

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Section 4.4 Transfer Generally .

(a) The term “transfer,” when used in this Agreement with respect to a Partnership Interest, shall mean a transaction (i) by which the General Partner assigns its General Partner Interest to another Person, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise or (ii) by which the holder of a Limited Partner Interest assigns such Limited Partner Interest to another Person who is or becomes a Limited Partner, and includes a sale, assignment, gift, exchange or any other disposition by law or otherwise, excluding a pledge, encumbrance, hypothecation or mortgage but including any transfer upon foreclosure of any pledge, encumbrance, hypothecation or mortgage.

(b) No Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article IV. Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article IV shall be, to the fullest extent permitted by law, null and void.

(c) Nothing contained in this Agreement shall be construed to prevent a disposition by any stockholder, member, partner or other owner of any Partner of any or all of the shares of stock, membership interests, partnership interests or other ownership interests in such Partner and the term “transfer” shall not mean any such disposition.

Section 4.5 Registration and Transfer of Limited Partner Interests .

(a) The General Partner shall keep or cause to be kept on behalf of the Partnership a register in which, subject to such reasonable regulations as it may prescribe and subject to the provisions of Section 4.5(b), the Partnership will provide for the registration and transfer of Limited Partner Interests.

(b) The Partnership shall not recognize any transfer of Limited Partner Interests evidenced by Certificates until the Certificates evidencing such Limited Partner Interests are surrendered for registration of transfer. No charge shall be imposed by the General Partner for such transfer; provided , that as a condition to the issuance of any new Certificate under this Section 4.5, the General Partner may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto. Upon surrender of a Certificate for registration of transfer of any Limited Partner Interests evidenced by a Certificate, and subject to the provisions hereof, the appropriate officers of the General Partner on behalf of the Partnership shall execute and deliver, and in the case of Certificates evidencing Limited Partner Interests, the Transfer Agent shall countersign and deliver, in the name of the holder or

 

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the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new Certificates evidencing the same aggregate number and type of Limited Partner Interests as was evidenced by the Certificate so surrendered.

(c) Subject to (i) the foregoing provisions of this Section 4.5, (ii) Section 4.3, (iii) Section 4.7, (iv) with respect to any class or series of Limited Partner Interests, the provisions of any statement of designations or an amendment to this Agreement establishing such class or series, (v) any contractual provisions binding on any Limited Partner and (vi) provisions of applicable law including the Securities Act, Limited Partner Interests shall be freely transferable.

(d) The General Partner and its Affiliates shall have the right at any time to transfer their Subordinated Units, Common Units and Incentive Distribution Rights to one or more Persons.

Section 4.6 Transfer of the General Partner’s General Partner Interest .

(a) Subject to Section 4.6(b), the General Partner may at its option transfer all or any part of its General Partner Interest without approval from any other Partner.

(b) Notwithstanding anything herein to the contrary, no transfer by the General Partner of all or any part of its General Partner Interest to another Person shall be permitted unless (i) the transferee agrees to assume the rights and duties of the General Partner under this Agreement and to be bound by the provisions of this Agreement, (ii) the Partnership receives an Opinion of Counsel that such transfer would not result in the loss of limited liability under the Delaware Act of any Limited Partner or cause the Partnership to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for U.S. federal income tax purposes (to the extent not already so treated or taxed) and (iii) such transferee also agrees to purchase all (or the appropriate portion thereof, if applicable) of the partnership or membership interest held by the General Partner as the general partner or managing member, if any, of each other Group Member. In the case of a transfer pursuant to and in compliance with this Section 4.6, the transferee or successor (as the case may be) shall, subject to compliance with the terms of Section 10.2, be admitted to the Partnership as the General Partner effective immediately prior to the transfer of the General Partner Interest, and the business of the Partnership shall continue without dissolution.

Section 4.7 Restrictions on Transfers .

(a) Notwithstanding the other provisions of this Article IV, no transfer of any Partnership Interests shall be made if such transfer would (i) violate the then applicable federal or state securities laws or rules and regulations of the Commission, any state securities commission or any other governmental authority with jurisdiction over such transfer, (ii) terminate the existence or qualification of the Partnership under the laws of the jurisdiction of its

 

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formation, or (iii) cause the Partnership to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for U.S. federal income tax purposes (to the extent not already so treated or taxed).

(b) The General Partner may impose restrictions on the transfer of Partnership Interests if it determines, with the advice of counsel, that such restrictions are necessary or advisable to (i) avoid a significant risk of the Partnership becoming taxable as a corporation or otherwise becoming taxable as an entity for U.S. federal income tax purposes or (ii) preserve the uniformity of the Limited Partner Interests (or any class or classes thereof). The General Partner may impose such restrictions by amending this Agreement; provided , however , that any amendment that would result in the delisting or suspension of trading of any class of Limited Partner Interests on the principal National Securities Exchange on which such class of Limited Partner Interests is then listed or admitted to trading must be approved, prior to such amendment being effected, by the holders of at least a majority of the Outstanding Limited Partner Interests of such class.

(c) Nothing contained in this Agreement, other than Section 4.7(a), shall preclude the settlement of any transactions involving Partnership Interests entered into through the facilities of any National Securities Exchange on which such Partnership Interests are listed or admitted to trading.

(d) The transfer of a Subordinated Unit that has converted into a Common Unit shall be subject to Section 6.7.

(e) The transfer of an IDR Reset Common Unit that was issued in connection with an IDR Reset Election pursuant to Section 5.11 shall be subject to Section 6.8.

Section 4.8 Eligibility Certificates; Ineligible Holders .

(a) If at any time the General Partner determines, with the advice of counsel, that:

(i) the U.S. federal income tax status (or lack of proof of the U.S. federal income tax status) of one or more Limited Partners or their beneficial owners has or is reasonably likely to have a material adverse effect on the rates that can be charged to customers by any Group Member with respect to assets that are subject to regulation by the Federal Energy Regulatory Commission or similar regulatory body (a “ Rate Eligibility Trigger ”); or

(ii) any Group Member is subject to any federal, state or local law or regulation that would create a substantial risk of cancellation or forfeiture of any property in which the Group Member has an interest based on the nationality, citizenship or other related status of a Limited Partner (a Citizenship Eligibility Trigger );

 

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then, the General Partner may adopt such amendments to this Agreement as it determines to be necessary or appropriate to (x) in the case of a Rate Eligibility Trigger, obtain such proof of the U.S. federal income tax status of the Limited Partners and, to the extent relevant, their beneficial owners, as the General Partner determines to be necessary or appropriate to reduce risk of the occurrence of a material adverse effect on the rates that can be charged to customers by any Group Member or (y) in the case of a Citizenship Eligibility Trigger, obtain such proof of the nationality, citizenship or other related status of the Limited Partner and, to the extent relevant, their beneficial owners as the General Partner determines to be necessary or appropriate to eliminate or mitigate a significant risk of cancellation or forfeiture of any properties or interests therein of a Group Member.

(b) Such amendments may include provisions requiring all Partners to certify as to their (and their beneficial owners’) status as Eligible Holders upon demand and on a regular basis, as determined by the General Partner, and may require transferees of Units to so certify prior to being admitted to the Partnership as a Partner (any such required certificate, an Eligibility Certificate ).

(c) Such amendments may provide that any Partner who fails to furnish to the General Partner within a reasonable period requested proof of its (and its beneficial owners’) status as an Eligible Holder or if upon receipt of such Eligibility Certificate or other requested information the General Partner determines that a Limited Partner (or its beneficial owner) is not an Eligible Holder (an Ineligible Holder ), the Partnership Interests owned by such Limited Partner shall be subject to redemption in accordance with the provisions of Section 4.9. In addition, the General Partner shall be substituted and treated as the owner of all Partnership Interests owned by an Ineligible Holder.

(d) The General Partner shall, in exercising voting rights in respect of Partnership Interests held by it on behalf of Ineligible Holders, cast such votes in the same manner and in the same ratios as the votes of Partners (including the General Partner and its Affiliates) in respect of Partnership Interests other than those of Ineligible Holders are cast.

(e) Upon dissolution of the Partnership, an Ineligible Holder shall have no right to receive a distribution in kind pursuant to Section 12.4 but shall be entitled to the cash equivalent thereof, and the Partnership shall provide cash in exchange for an assignment of the Ineligible Holder’s share of any distribution in kind. Such payment and assignment shall be treated for purposes hereof as a purchase by the Partnership from the Ineligible Holder of the portion of his Partnership Interest representing his right to receive his share of such distribution in kind.

(f) At any time after he can and does certify that he has become an Eligible Holder, an Ineligible Holder may, upon application to the General Partner, request that with respect to any Partnership Interests of such Ineligible Holder not redeemed pursuant to Section 4.9, such Ineligible Holder be admitted as a Partner, and upon approval of the General Partner, such Ineligible Holder shall be admitted as a Partner and shall no longer constitute an Ineligible Holder and the General Partner shall cease to be deemed to be the owner in respect of such Ineligible Holder’s Partnership Interests.

 

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Section 4.9 Redemption of Partnership Interests of Ineligible Holders .

(a) If at any time a Partner fails to furnish an Eligibility Certificate or other information requested within the period of time specified in amendments adopted pursuant to Section 4.8 or if upon receipt of such Eligibility Certificate, the General Partner determines, with the advice of counsel, that a Partner is an Ineligible Holder, the Partnership may, unless the Partner establishes to the satisfaction of the General Partner that such Partner is an Eligible Holder or has transferred his Limited Partner Interests to a Person who is an Eligible Holder and who furnishes an Eligibility Certificate to the General Partner prior to the date fixed for redemption as provided below, redeem the Partnership Interest of such Partner as follows:

(i) The General Partner shall, not later than the 30th day before the date fixed for redemption, give notice of redemption to the Partner, at his last address designated on the records of the Partnership or the Transfer Agent, as applicable, by registered or certified mail, postage prepaid. The notice shall be deemed to have been given when so mailed. The notice shall specify the Redeemable Interests, the date fixed for redemption, the place of payment, that payment of the redemption price will be made upon redemption of the Redeemable Interests (or, if later in the case of Redeemable Interests evidenced by Certificates, upon surrender of the Certificate evidencing the Redeemable Interests) and that on and after the date fixed for redemption no further allocations or distributions to which the Partner would otherwise be entitled in respect of the Redeemable Interests will accrue or be made.

(ii) The aggregate redemption price for Redeemable Interests shall be an amount equal to the Current Market Price (the date of determination of which shall be the date fixed for redemption) of Partnership Interests of the class to be so redeemed multiplied by the number of Partnership Interests of each such class included among the Redeemable Interests. The redemption price shall be paid, as determined by the General Partner, in cash or by delivery of a promissory note of the Partnership in the principal amount of the redemption price, bearing interest at the rate of 8% annually and payable in three equal annual installments of principal together with accrued interest, commencing one year after the redemption date.

(iii) The Partner or his duly authorized representative shall be entitled to receive the payment for the Redeemable Interests at the place of payment specified in the notice of redemption on the redemption date (or, if later in the case of Redeemable Interests evidenced by Certificates, upon surrender by or on behalf of the Partner at the place specified in the notice of redemption, of the Certificate evidencing the Redeemable Interests, duly endorsed in blank or accompanied by an assignment duly executed in blank).

(iv) After the redemption date, Redeemable Interests shall no longer constitute issued and Outstanding Limited Partner Interests.

 

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(b) The provisions of this Section 4.9 shall also be applicable to Partnership Interests held by a Partner as nominee of a Person determined to be an Ineligible Holder.

(c) Nothing in this Section 4.9 shall prevent the recipient of a notice of redemption from transferring his Partnership Interest before the redemption date if such transfer is otherwise permitted under this Agreement. Upon receipt of notice of such a transfer, the General Partner shall withdraw the notice of redemption, provided the transferee of such Partnership Interest certifies to the satisfaction of the General Partner that he is an Eligible Holder. If the transferee fails to make such certification, such redemption will be effected from the transferee on the original redemption date.

ARTICLE V

CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

Section 5.1 Organizational Contributions . In connection with the formation of the Partnership under the Delaware Act, the General Partner has been admitted as the sole General Partner of the Partnership. The Organizational Limited Partner made an initial Capital Contribution to the Partnership in the amount of $1,000.00 in exchange for a Limited Partner Interest equal to a 100% Percentage Interest and has been admitted as a Limited Partner of the Partnership. As of the Closing Date, and effective with the admission of another Limited Partner to the Partnership, the interests of the Organizational Limited Partner will be redeemed as provided in the Contribution Agreement and the initial cash Capital Contributions of the Organizational Limited Partner will be refunded. One-hundred percent of any interest or other profit that may have resulted from the investment or other use of such initial cash Capital Contributions will be allocated and distributed to the Organizational Limited Partner.

Section 5.2 Contributions by the General Partner and its Affiliates .

On the Closing Date and pursuant to the Contribution Agreement, (i) the Organizational Limited Partner shall contribute to the Partnership, as a Capital Contribution, the WR Subsidiary Interests (as such term is defined in the Contribution Agreement) in exchange for 16,167,270 Subordinated Units, a cash distribution and the right to receive the Deferred Issuance and Distribution and the issuance to the General Partner of the Incentive Distribution Rights and (ii) WRCLP, a Delaware limited partnership, shall contribute to the Partnership, as a Capital Contribution, the WRCLP Contribution Assets (as such term is defined in the Contribution Agreement) in exchange for 6,998,500 Common Units, 6,643,730 Subordinated Units and a cash distribution.

 

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Section 5.3 Initial Offering .

(a) On the Closing Date and pursuant to the Underwriting Agreement, each Underwriter shall pay cash to the Partnership in exchange for the issuance and sale by the Partnership of Common Units to each Underwriter, all as set forth in the Underwriting Agreement.

(b) Upon the exercise, if any, of the Underwriters’ Option, each Underwriter shall pay cash to the Partnership in exchange for the issuance and sale by the Partnership of Common Units to each Underwriter, all as set forth in the Underwriting Agreement.

(c) No Limited Partner will be required to make any additional Capital Contributions to the Partnership pursuant to this Agreement.

Section 5.4 Interest and Withdrawal . No interest shall be paid by the Partnership on Capital Contributions. No Partner shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent, if any, that distributions made pursuant to this Agreement or upon liquidation of the Partnership may be considered as such by law and then only to the extent provided for in this Agreement. Except to the extent expressly provided in this Agreement, no Partner shall have priority over any other Partner either as to the return of Capital Contributions or as to profits, losses or distributions.

Section 5.5 Capital Accounts .

(a) The Partnership shall maintain for each Partner (or a beneficial owner of Partnership Interests held by a nominee in any case in which the nominee has furnished the identity of such owner to the Partnership in accordance with Section 6031(c) of the Code or any other method acceptable to the General Partner) owning a Partnership Interest a separate Capital Account with respect to such Partnership Interest in accordance with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of all Capital Contributions made by the Partner with respect to such Partnership Interest and (ii) all items of Partnership income and gain (including income and gain exempt from tax) computed in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest pursuant to Section 6.1, and decreased by (x) the amount of cash or Net Agreed Value of all actual and deemed distributions of cash or property made to the Partner with respect to such Partnership Interest and (y) all items of Partnership deduction and loss computed in accordance with Section 5.5(b) and allocated with respect to such Partnership Interest pursuant to Section 6.1.

(b) For purposes of computing the amount of any item of income, gain, loss or deduction that is to be allocated pursuant to Article VI and is to be reflected in the Partners’ Capital Accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for U.S. federal income tax purposes (including any method of depreciation, cost recovery or amortization used for that purpose), provided , that:

(i) Solely for purposes of this Section 5.5, the Partnership shall be treated as owning directly its proportionate share (as determined by the General Partner based upon the provisions of the applicable Group Member Agreement) of all property owned by (x) any other Group Member that is classified as a partnership for U.S. federal income tax purposes and (y) any other partnership, limited liability company, unincorporated business or other entity classified as a partnership for U.S. federal income tax purposes of which a Group Member is, directly or indirectly, a partner, member or other equity holder.

 

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(ii) All fees and other expenses incurred by the Partnership to promote the sale of (or to sell) a Partnership Interest that can neither be deducted nor amortized under Section 709 of the Code, if any, shall, for purposes of Capital Account maintenance, be treated as an item of deduction at the time such fees and other expenses are incurred and shall be allocated among the Partners pursuant to Section 6.1.

(iii) The computation of all items of income, gain, loss and deduction shall be made (x) except as otherwise provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m), without regard to any election under Section 754 of the Code that may be made by the Partnership, and (y) as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalized for U.S. federal income tax purposes.

(iv) To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) of the Code (including pursuant to Treasury Regulation Section 1.734-2(b)(1)) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment in the Capital Accounts shall be treated as an item of gain or loss.

(v) In the event the Carrying Value of Partnership property is adjusted pursuant to Section 5.5(d), any Unrealized Gain resulting from such adjustment shall be treated as an item of gain and any Unrealized Loss resulting from such adjustment shall be treated as an item of loss.

(vi) Any income, gain or loss attributable to the taxable disposition of any Partnership property shall be determined as if the adjusted basis of such property as of such date of disposition were equal in amount to the property’s Carrying Value as of such date.

(vii) Any deductions for depreciation, cost recovery or amortization attributable to any Contributed Property or Adjusted Property shall be determined under the rules prescribed by Treasury Regulation Section 1.704-3(d)(2) as if the adjusted basis of such property were equal to the Carrying Value of such property immediately following such adjustment.

(viii) The Gross Liability Value of each Liability of the Partnership described in Treasury Regulation Section 1.752-7(b)(3)(i) shall be adjusted at such times as provided in this Agreement for an adjustment to Carrying Values. The amount of any such adjustment shall be treated for purposes hereof as an item of loss (if the adjustment increases the Carrying Value of such Liability of the Partnership) or an item of gain (if the adjustment decreases the Carrying Value of such Liability of the Partnership).

 

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(c) (i) Except as otherwise provided in this Section 5.5(c), a transferee of a Partnership Interest shall succeed to a pro rata portion of the Capital Account of the transferor relating to the Partnership Interest so transferred.

(ii) Subject to Section 6.7(b), immediately prior to the transfer of a Subordinated Unit or of a Subordinated Unit that has converted into a Common Unit pursuant to Section 5.7 by a holder thereof (in each case, other than a transfer to an Affiliate unless the General Partner elects to have this subparagraph 5.5(c)(ii) apply), the Capital Account maintained for such Person with respect to its Subordinated Units or converted Subordinated Units will (A) first, be allocated to the Subordinated Units or converted Subordinated Units to be transferred in an amount equal to the product of (x) the number of such Subordinated Units or converted Subordinated Units to be transferred and (y) the Per Unit Capital Amount for a Common Unit, and (B) second, any remaining balance in such Capital Account will be retained by the transferor, regardless of whether it has retained any Subordinated Units or converted Subordinated Units. Following any such allocation, the transferor’s Capital Account, if any, maintained with respect to the retained Subordinated Units or retained converted Subordinated Units, if any, will have a balance equal to the amount allocated under clause (B) above, and the transferee’s Capital Account established with respect to the transferred Subordinated Units or transferred converted Subordinated Units will have a balance equal to the amount allocated under clause (A) above.

(iii) Subject to Section 6.8(b), immediately prior to the transfer of an IDR Reset Common Unit by a holder thereof (other than a transfer to an Affiliate unless the General Partner elects to have this subparagraph 5.5(c)(iii) apply), the Capital Account maintained for such Person with respect to its IDR Reset Common Units will (A) first, be allocated to the IDR Reset Common Units to be transferred in an amount equal to the product of (x) the number of such IDR Reset Common Units to be transferred and (y) the Per Unit Capital Amount for a Common Unit, and (B) second, any remaining balance in such Capital Account will be retained by the transferor, regardless of whether it has retained any IDR Reset Common Units. Following any such allocation, the transferor’s Capital Account, if any, maintained with respect to the retained IDR Reset Common Units, if any, will have a balance equal to the amount allocated under clause (B) hereinabove, and the transferee’s Capital Account established with respect to the transferred IDR Reset Common Units will have a balance equal to the amount allocated under clause (A) above.

 

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(d) (i) Consistent with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership Interests for cash or Contributed Property, the issuance of Partnership Interests as consideration for the provision of services, the issuance of IDR Reset Common Units pursuant to Section 5.11, or the conversion of the Combined Interest to Common Units pursuant to Section 11.3(b), the Carrying Value of each Partnership property immediately prior to such issuance shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property; provided, however , that in the event of an issuance of Partnership Interests for a de minimis amount of cash or Contributed Property, or in the event of an issuance of a de minimis amount of Partnership Interests as consideration for the provision of services, the General Partner may determine that such adjustments are unnecessary for the proper administration of the Partnership. In determining such Unrealized Gain or Unrealized Loss, the aggregate fair market value of all Partnership property (including cash or cash equivalents) immediately prior to the issuance of additional Partnership Interests shall be determined by the General Partner using such method of valuation as it may adopt. In making its determination of the fair market values of individual properties, the General Partner may first determine an aggregate value for the assets of the Partnership that takes into account the current trading price of the Common Units, the fair market value of all other Partnership Interests at such time and the amount of Partnership Liabilities. The General Partner may allocate such aggregate value among the individual properties of the Partnership (in such manner as it determines appropriate). Absent a contrary determination by the General Partner, the aggregate fair market value of all Partnership assets (including, without limitation, cash or cash equivalents) immediately prior to a Revaluation Event shall be the value that would result in the Capital Account for each Common Unit that is Outstanding prior to such Revaluation Event being equal to the Event Issue Value.

(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately prior to any distribution to a Partner of any Partnership property (other than a distribution of cash that is not in redemption or retirement of a Partnership Interest), the Carrying Value of all Partnership property shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property. In determining such Unrealized Gain or Unrealized Loss the aggregate fair market value of all Partnership property (including cash or cash equivalents) immediately prior to a distribution shall (A) in the case of a distribution other than one made pursuant to Section 12.4, be determined in the same manner as that provided in Section 5.5(d)(i) or (B) in the case of a liquidating distribution pursuant to Section 12.4, be determined by the Liquidator using such method of valuation as it may adopt.

Section 5.6 Issuances of Additional Partnership Interests and Derivative Instruments .

(a) The Partnership may issue additional Partnership Interests and Derivative Instruments for any Partnership purpose at any time and from time to time to such Persons for such consideration and on such terms and conditions as the General Partner shall determine, all without the approval of any Limited Partners.

 

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(b) Each additional Partnership Interest authorized to be issued by the Partnership pursuant to Section 5.6(a) may be issued in one or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties (which may be senior to existing classes and series of Partnership Interests), as shall be fixed by the General Partner, including (i) the right to share in Partnership profits and losses or items thereof; (ii) the right to share in Partnership distributions; (iii) the rights upon dissolution and liquidation of the Partnership; (iv) whether, and the terms and conditions upon which, the Partnership may or shall be required to redeem the Partnership Interest (including sinking fund provisions); (v) whether such Partnership Interest is issued with the privilege of conversion or exchange and, if so, the terms and conditions of such conversion or exchange; (vi) the terms and conditions upon which each Partnership Interest will be issued, evidenced by Certificates and assigned or transferred; (vii) the method for determining the Percentage Interest as to such Partnership Interest; and (viii) the right, if any, of each such Partnership Interest to vote on Partnership matters, including matters relating to the relative rights, preferences and privileges of such Partnership Interest.

(c) The General Partner shall take all actions that it determines to be necessary or appropriate in connection with (i) each issuance of Partnership Interests and Derivative Instruments pursuant to this Section 5.6, (ii) the conversion of the Combined Interest into Units pursuant to the terms of this Agreement, (iii) the issuance of Common Units pursuant to Section 5.11, (iv) reflecting admission of such additional Limited Partners in the books and records of the Partnership as the Record Holders of such Limited Partner Interests and (v) all additional issuances of Partnership Interests. The General Partner shall determine the relative rights, powers and duties of the holders of the Units or other Partnership Interests being so issued. The General Partner shall do all things necessary to comply with the Delaware Act and is authorized and directed to do all things that it determines to be necessary or appropriate in connection with any future issuance of Partnership Interests or in connection with the conversion of the Combined Interest into Units pursuant to the terms of this Agreement, including compliance with any statute, rule, regulation or guideline of any federal, state or other governmental agency or any National Securities Exchange on which the Units or other Partnership Interests are listed or admitted to trading.

(d) No fractional Units shall be issued by the Partnership.

Section 5.7 Conversion of Subordinated Units .

(a) All of the Subordinated Units shall convert into Common Units on a one-for-one basis on the first Business Day following the distribution of Available Cash to Partners pursuant to Section 6.3(a) in respect of the final Quarter of the Subordination Period.

(b) Notwithstanding any other provision of this Agreement, all of the then Outstanding Subordinated Units may convert into Common Units on a one-for-one basis as set forth in, and pursuant to the terms of, Section 11.4.

 

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Section 5.8 Limited Preemptive Right . Except as provided in this Section 5.8 or as otherwise provided in a separate agreement by the Partnership, no Person shall have any preemptive, preferential or other similar right with respect to the issuance of any Partnership Interest, whether unissued, held in the treasury or hereafter created. The General Partner shall have the right, which it may from time to time assign in whole or in part to any of its Affiliates, to purchase Partnership Interests from the Partnership whenever, and on the same terms that, the Partnership issues Partnership Interests to Persons other than the General Partner and its Affiliates, to the extent necessary to maintain the Percentage Interests of the General Partner and its Affiliates equal to that which existed immediately prior to the issuance of such Partnership Interests. The determination by the General Partner to exercise (or refrain from exercising) its right pursuant to the immediately preceding sentence shall be a determination made in its individual capacity.

Section 5.9 Splits and Combinations .

(a) The Partnership may make a distribution of Partnership Interests to all Record Holders or may effect a subdivision or combination of Partnership Interests so long as, after any such event, each Partner shall have the same Percentage Interest in the Partnership as before such event (subject to the effect of Section 5.9(d)), and any amounts calculated on a per Unit basis (including any Common Unit Arrearage or Cumulative Common Unit Arrearage) or stated as a number of Units are proportionately adjusted retroactive to the beginning of the Partnership.

(b) Whenever such a distribution, subdivision or combination of Partnership Interests is declared, the General Partner shall select a Record Date as of which the distribution, subdivision or combination shall be effective and shall send notice thereof at least 20 days prior to such Record Date to each Record Holder as of a date not less than 10 days prior to the date of such notice. The General Partner also may cause a firm of independent public accountants selected by it to calculate the number of Partnership Interests to be held by each Record Holder after giving effect to such distribution, subdivision or combination. The General Partner shall be entitled to rely on any certificate provided by such firm as conclusive evidence of the accuracy of such calculation.

(c) Promptly following any such distribution, subdivision or combination, the Partnership may issue Certificates to the Record Holders of Partnership Interests as of the applicable Record Date representing the new number of Partnership Interests held by such Record Holders, or the General Partner may adopt such other procedures that it determines to be necessary or appropriate to reflect such changes. If any such combination results in a smaller total number of Partnership Interests Outstanding, the Partnership shall require, as a condition to the delivery to a Record Holder of such new Certificate, the surrender of any Certificate held by such Record Holder immediately prior to such Record Date.

(d) The Partnership shall not issue fractional Units upon any distribution, subdivision or combination of Units. If a distribution, subdivision or combination of Units would result in the issuance of fractional Units but for the provisions of Section 5.6(d) and this Section 5.9(d), each fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the next higher Unit).

 

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Section 5.10 Fully Paid and Non-Assessable Nature of Limited Partner Interests . All Limited Partner Interests issued pursuant to, and in accordance with the requirements of, this Article V shall be fully paid and non-assessable Limited Partner Interests in the Partnership, except as such non-assessability may be affected by Section 17-607 or 17-804 of the Delaware Act.

Section 5.11 Issuance of Common Units in Connection with Reset of Incentive Distribution Rights .

(a) Subject to the provisions of this Section 5.11, the holder of the Incentive Distribution Rights (or, if there is more than one holder of the Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights) shall have the right, at any time when there are no Subordinated Units outstanding and the Partnership has made a distribution pursuant to Section 6.4(b)(v) for each of the four most recently completed Quarters (and the aggregate amounts distributed in such four Quarter period did not exceed the aggregate Adjusted Operating Surplus for such four Quarter period), to make an election (the “ IDR Reset Election ”) to cause the Target Distributions to be reset in accordance with the provisions of Section 5.11(e) and, in connection therewith, the holder or holders of the Incentive Distribution Rights will become entitled to receive their Pro Rata share of a number of Common Units (the “ IDR Reset Common Units ”) equal to the result of dividing (i) the amount of cash distributions made by the Partnership for the Quarter immediately preceding the giving of the Reset Notice in respect of the Incentive Distribution Rights by (ii) the cash distribution made by the Partnership in respect of each Common Unit for the Quarter immediately preceding the giving of the Reset Notice (the “ Reset MQD ”) (the number of Common Units determined by such quotient is referred to herein as the “ Aggregate Quantity of IDR Reset Common Units ”). The making of the IDR Reset Election in the manner specified in Section 5.11(b) shall cause the Target Distributions to be reset in accordance with the provisions of Section 5.11(e) and, in connection therewith, the holder or holders of the Incentive Distribution Rights will become entitled to receive Common Units on the basis specified above, without any further approval required by the General Partner or the Unitholders, at the time specified in Section 5.11(c) unless the IDR Reset Election is rescinded pursuant to Section 5.11(d).

(b) To exercise the right specified in Section 5.11(a), the holder of the Incentive Distribution Rights (or, if there is more than one holder of the Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights) shall deliver a written notice (the “ Reset Notice ”) to the Partnership. Within 10 Business Days after the receipt by the Partnership of such Reset Notice, the Partnership shall deliver a written notice to the holder or holders of the Incentive Distribution Rights of the Partnership’s determination of the aggregate number of Common Units that each holder of Incentive Distribution Rights will be entitled to receive.

 

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(c) The holder or holders of the Incentive Distribution Rights will be entitled to receive the Aggregate Quantity of IDR Reset Common Units on the fifteenth Business Day after receipt by the Partnership of the Reset Notice; provided, however, that the issuance of Common Units to the holder or holders of the Incentive Distribution Rights shall not occur prior to the approval of the listing or admission for trading of such Common Units by the principal National Securities Exchange upon which the Common Units are then listed or admitted for trading if any such approval is required pursuant to the rules and regulations of such National Securities Exchange.

(d) If the principal National Securities Exchange upon which the Common Units are then traded has not approved the listing or admission for trading of the Common Units to be issued pursuant to this Section 5.11 on or before the 30th calendar day following the Partnership’s receipt of the Reset Notice and such approval is required by the rules and regulations of such National Securities Exchange, then the holder of the Incentive Distribution Rights (or, if there is more than one holder of the Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights) shall have the right to either rescind the IDR Reset Election or elect to receive other Partnership Interests having such terms as the General Partner may approve that will provide (i) the same economic value, in the aggregate, as the Aggregate Quantity of IDR Reset Common Units would have had at the time of the Partnership’s receipt of the Reset Notice, as determined by the General Partner, and (ii) for the subsequent conversion (on terms acceptable to the National Securities Exchange upon which the Common Units are then traded) of such Partnership Interests into Common Units within not more than 12 months following the Partnership’s receipt of the Reset Notice upon the satisfaction of one or more conditions that are reasonably acceptable to the holder of the Incentive Distribution Rights (or, if there is more than one holder of the Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights).

(e) The Target Distributions shall be adjusted at the time of the issuance of Common Units or other Partnership Interests pursuant to this Section 5.11 such that (i) the Minimum Quarterly Distribution shall be reset to be equal to the Reset MQD, (ii) the First Target Distribution shall be reset to equal 115% of the Reset MQD, (iii) the Second Target Distribution shall be reset to equal 125% of the Reset MQD and (iv) the Third Target Distribution shall be reset to equal 150% of the Reset MQD.

(f) Upon the issuance of IDR Reset Common Units pursuant to Section 5.11(a) (or other Partnership Interests as described in Section 5.11(d), the Capital Account maintained with respect to the Incentive Distribution Rights shall (A) first, be allocated to IDR Reset Common Units (or other Partnership Interests) in an amount equal to the product of (x) the Aggregate Quantity of IDR Reset Common Units (or other Partnership Interests) and (y) the Per Unit Capital Amount for an Initial Common Unit, and (B) second, any remaining balance in such Capital Account will be retained by the holder(s) of the Incentive Distribution Rights. If there is not a sufficient Capital Account associated with the Incentive Distribution Rights to allocate the full Per Unit Capital Amount for an Initial Common Unit to the IDR Reset Common Units in accordance with clause (A) of this Section 5.11(f), the IDR Reset Common Units shall be subject to Sections 6.1(d)(x)(B) and (C).

 

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ARTICLE VI

ALLOCATIONS AND DISTRIBUTIONS

Section 6.1 Allocations for Capital Account Purposes . For purposes of maintaining the Capital Accounts and in determining the rights of the Partners among themselves, the Partnership’s items of income, gain, loss and deduction (computed in accordance with Section 5.5(b)) for each taxable period shall be allocated among the Partners as provided herein below.

(a) Net Income . Net Income for each taxable period (including a pro rata part of each item of income, gain, loss and deduction taken into account in computing Net Income for such taxable period) shall be allocated as follows:

(i) First, to the General Partner until the aggregate amount of Net Income allocated to the General Partner pursuant to this Section 6.1(a)(i) for the current and all previous taxable periods is equal to the aggregate amount of Net Loss allocated to the General Partner pursuant to Section 6.1(b)(ii) for all previous taxable periods; and

(ii) The balance, if any, 100% to the Unitholders, Pro Rata.

(b) Net Loss . Net Loss for each taxable period (including a pro rata part of each item of income, gain, loss and deduction taken into account in computing Net Loss for such taxable period) shall be allocated as follows:

(i) First, to the Unitholders, Pro Rata; provided , that Net Loss shall not be allocated pursuant to this Section 6.1(b)(i) to the extent that such allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital Account at the end of such taxable period (or increase any existing deficit balance in its Adjusted Capital Account); and

(ii) The balance, if any, 100% to the General Partner.

(c) Net Termination Gains and Losses . Net Termination Gain or Net Termination Loss for each taxable period shall be allocated in the manner set forth in this Section 6.1(c). All allocations under this Section 6.1(c) shall be made after Capital Account balances have been adjusted by all other allocations provided under this Section 6.1 and after all distributions of Available Cash provided under Section 6.4 and Section 6.5 have been made; provided , however , that solely for purposes of this Section 6.1(c), Capital Accounts shall not be adjusted for distributions made pursuant to Section 12.4.

(i) Except as provided in Section 6.1(c)(iv), and subject to the provisions set forth in the last sentence of this Section 6.1(c)(i), Net Termination Gain (including a pro rata part of each item of income, gain, loss, and deduction taken into account in computing Net Termination Gain) shall be allocated in the following order and priority:

(A) First, to each Partner having a deficit balance in its Capital Account, in the proportion that such deficit balance bears to the total deficit balances in the Capital Accounts of all Partners, until each such Partner has been allocated Net Termination Gain equal to any such deficit balance in its Adjusted Capital Account;

 

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(B) Second, to all Unitholders holding Common Units, Pro Rata, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) its Unrecovered Initial Unit Price, (2) the Minimum Quarterly Distribution for the Quarter during which the Liquidation Date occurs, reduced by any distribution pursuant to Section 6.4(a)(i) or Section 6.4(b)(i) with respect to such Common Unit for such Quarter (the amount determined pursuant to this clause (2) is hereinafter referred to as the “ Unpaid MQD ”) and (3) any then existing Cumulative Common Unit Arrearage;

(C) Third, if such Net Termination Gain is recognized (or is deemed to be recognized) prior to the conversion of the last Outstanding Subordinated Unit into a Common Unit, to all Unitholders holding Subordinated Units, Pro Rata, until the Capital Account in respect of each Subordinated Unit then Outstanding equals the sum of (1) its Unrecovered Initial Unit Price, determined for the taxable period (or portion thereof) to which this allocation of gain relates, and (2) the Minimum Quarterly Distribution for the Quarter during which the Liquidation Date occurs, reduced by any distribution pursuant to Section 6.4(a)(iii) with respect to such Subordinated Unit for such Quarter;

(D) Fourth, to all Unitholders, Pro Rata, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) its Unrecovered Initial Unit Price, (2) the Unpaid MQD, (3) any then existing Cumulative Common Unit Arrearage, and (4) the excess of (aa) the First Target Distribution less the Minimum Quarterly Distribution for each Quarter after the Closing Date or the date of the most recent IDR Reset Election, if any, over (bb) the cumulative per Unit amount of any distributions of Available Cash that are deemed to be Operating Surplus made pursuant to Section 6.4(a)(iv) and Section 6.4(b)(ii) for such period (the sum of (1), (2), (3) and (4) is hereinafter referred to as the “ First Liquidation Target Amount ”);

(E) Fifth, 15% to the holders of the Incentive Distribution Rights, Pro Rata, and 85.0% to all Unitholders, Pro Rata, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) the First Liquidation Target Amount, and (2) the excess of (aa) the Second Target Distribution less the First Target Distribution for each Quarter after the Closing Date or the date of the most recent IDR Reset Election, if any, over (bb) the cumulative per Unit amount of any distributions of Available Cash that are deemed to be Operating Surplus made pursuant to Section 6.4(a)(v) and Section 6.4(b)(iii) for such period (the sum of (1) and (2) is hereinafter referred to as the “ Second Liquidation Target Amount ”);

 

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(F) Sixth, 25% to the holders of the Incentive Distribution Rights, Pro Rata, and 75% to all Unitholders, Pro Rata, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) the Second Liquidation Target Amount, and (2) the excess of (aa) the Third Target Distribution less the Second Target Distribution for each Quarter after the Closing Date or the date of the most recent IDR Reset Election, if any, over (bb) the cumulative per Unit amount of any distributions of Available Cash that are deemed to be Operating Surplus made pursuant to Section 6.4(a)(vi) and Section 6.4(b)(iv) for such period; and

(G) Finally, 50% to the holders of the Incentive Distribution Rights, Pro Rata, and 50% to all Unitholders, Pro Rata.

Notwithstanding the foregoing provisions in this Section 6.1(c)(i), the General Partner may adjust the amount of any Net Termination Gain arising in connection with a Revaluation Event that is allocated to the holders of Incentive Distribution Rights in a manner that will result (i) in the Capital Account for each Common Unit that is Outstanding prior to such Revaluation Event being equal to the Event Issue Value and (ii) to the greatest extent possible, the Capital Account with respect to the Incentive Distribution Rights that are Outstanding prior to such Revaluation Event being equal to the amount of Net Termination Gain that would be allocated to the holders of the Incentive Distribution Rights pursuant to this Section 6.1(c)(i) if the Capital Accounts with respect to all Partnership Interests that were Outstanding immediately prior to such Revaluation Event and the Carrying Value of each Partnership property were equal to zero.

(ii) Except as otherwise provided by Section 6.1(c)(iii) or Section 6.1(c)(iv), Net Termination Loss shall be allocated:

(A) First, if Subordinated Units remain Outstanding, to all Unitholders holding Subordinated Units, Pro Rata, until the Adjusted Capital Account in respect of each Subordinated Unit then Outstanding has been reduced to zero;

(B) Second, to all Unitholders holding Common Units, Pro Rata, until the Adjusted Capital Account in respect of each Common Unit then Outstanding has been reduced to zero; and

(C) The balance, if any, 100% to the General Partner.

(iii) Net Termination Loss deemed recognized pursuant to clause (b) of the definition of Net Termination Loss as a result of a Revaluation Event prior to the conversion of the last Outstanding Subordinated Unit and prior to the Liquidation Date shall be allocated:

(A) First, to the Unitholders, Pro Rata, until the Capital Account in respect of each Common Unit then Outstanding equals the Event Issue Value; provided that Net Termination Loss shall not be allocated pursuant to this Section 6.1(c)(iii)(A) to the extent such allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital Account at the end of such taxable period (or increase any existing deficit in its Adjusted Capital Account);

 

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(B) Second, to all Unitholders holding Subordinated Units, Pro Rata; provided that Net Termination Loss shall not be allocated pursuant to this Section 6.1(c)(iii)(B) to the extent such allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital Account at the end of such taxable period (or increase any existing deficit in its Adjusted Capital Account); and

(C) The balance, if any, to the General Partner.

(iv) If (A) a Net Termination Loss has been allocated pursuant to Section 6.1(c)(iii), (B) a Net Termination Gain or Net Termination Loss subsequently occurs (other than as a result of a Revaluation Event) prior to the conversion of the last Outstanding Subordinated Unit and (C) after tentatively making all allocations of such Net Termination Gain or Net Termination Loss provided for in Section 6.1(c)(i) or Section 6.1(c)(ii), as applicable, the Capital Account in respect of each Common Unit does not equal the amount such Capital Account would have been if Section 6.1(c)(iii) had not been part of this Agreement and all prior allocations of Net Termination Gain and Net Termination Loss had been made pursuant to Section 6.1(c)(i) or Section 6.1(c)(ii), as applicable, then items of income, gain, loss and deduction included in such Net Termination Gain or Net Termination Loss, as applicable, shall be specially allocated to the General Partner and all Unitholders in a manner that will, to the maximum extent possible, cause the Capital Account in respect of each Common Unit to equal the amount such Capital Account would have been if all allocations of Net Termination Gain and Net Termination Loss had been made pursuant to Section 6.1(c)(i) or Section 6.1(c)(ii), as applicable.

(d) Special Allocations . Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for each taxable period in the following order:

(i) Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Partnership Minimum Gain during any Partnership taxable period, each Partner shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii)). This

 

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Section 6.1(d)(i) is intended to comply with the Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii), with respect to such taxable period. This Section 6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

(iii) Priority Allocations.

(A) If the amount of cash or the Net Agreed Value of any property distributed (except cash or property distributed pursuant to Section 12.4) with respect to a Unit for a taxable period exceeds the amount of cash or the Net Agreed Value of property distributed with respect to another Unit within the same taxable period (the amount of the excess, an “ Excess Distribution ” and the Unit with respect to which the greater distribution is paid, an “ Excess Distribution Unit ”), then there shall be allocated gross income and gain to each Unitholder receiving an Excess Distribution with respect to the Excess Distribution Unit until the aggregate amount of such items allocated with respect to such Excess Distribution Unit pursuant to this Section 6.1(d)(iii)(A) for the current taxable period and all previous taxable periods is equal to the amount of the Excess Distribution.

(B) After the application of Section 6.1(d)(iii)(A), the remaining items of Partnership gross income or gain for the taxable period, if any, shall be allocated to the holders of Incentive Distribution Rights, Pro Rata, until the aggregate amount of such items allocated to the holders of Incentive Distribution Rights pursuant to this Section 6.1(d)(iii)(B) for the current taxable period and all previous taxable periods is equal to the cumulative amount of all Incentive Distributions made to the holders of Incentive Distribution Rights from the Closing Date to a date 45 days after the end of the current taxable period.

 

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(iv) Qualified Income Offset. In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Partnership gross income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations promulgated under Section 704(b) of the Code, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible; provided , that an allocation pursuant to this Section 6.1(d)(iv) shall be made only if and to the extent that such Partner would have a deficit balance in its Adjusted Capital Account after all other allocations provided for in this Section 6.1 have been tentatively made as if this Section 6.1(d)(iv) were not in this Agreement.

(v) Gross Income Allocation. In the event any Partner has a deficit balance in its Capital Account at the end of any taxable period in excess of the sum of (A) the amount such Partner is required to restore pursuant to the provisions of this Agreement and (B) the amount such Partner is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner shall be specially allocated items of Partnership gross income and gain in the amount of such excess as quickly as possible; provided , that an allocation pursuant to this Section 6.1(d)(v) shall be made only if and to the extent that such Partner would have a deficit balance in its Capital Account after all other allocations provided for in this Section 6.1 have been tentatively made as if Section 6.1(d)(iv) and this Section 6.1(d)(v) were not in this Agreement.

(vi) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period shall be allocated to the Partners Pro Rata. If the General Partner determines that the Partnership’s Nonrecourse Deductions should be allocated in a different ratio to satisfy the safe harbor requirements of the Treasury Regulations promulgated under Section 704(b) of the Code, the General Partner is authorized to revise the prescribed ratio to the numerically closest ratio that does satisfy such requirements.

(vii) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any taxable period shall be allocated 100% to the Partner that bears the Economic Risk of Loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Partner bears the Economic Risk of Loss with respect to a Partner Nonrecourse Debt, the Partner Nonrecourse Deductions attributable thereto shall be allocated between or among such Partners in accordance with the ratios in which they share such Economic Risk of Loss.

(viii) Nonrecourse Liabilities. For purposes of Treasury Regulation Section 1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities of the Partnership in excess of the sum of (A) the amount of Partnership Minimum Gain and (B) the total amount of Nonrecourse Built-in Gain shall be allocated among the Partners Pro Rata.

 

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(ix) Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) of the Code (including pursuant to Treasury Regulation section 1.734-2(b)(1)) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts as a result of a distribution to a Partner in complete liquidation of such Partner’s interest in the Partnership, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) taken into account pursuant to Section 5.5, and such item of gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.

(x) Economic Uniformity; Changes in Law.

(A) At the election of the General Partner with respect to any taxable period ending upon, or after, the termination of the Subordination Period, all or a portion of the remaining items of Partnership gross income or gain for such taxable period, after taking into account allocations pursuant to Section 6.1(d)(iii), shall be allocated 100% to each Partner holding Subordinated Units that are Outstanding as of the termination of the Subordination Period (“ Final Subordinated Units ”) in the proportion of the number of Final Subordinated Units held by such Partner to the total number of Final Subordinated Units then Outstanding, until each such Partner has been allocated an amount of gross income or gain that increases the Capital Account maintained with respect to such Final Subordinated Units to an amount that after taking into account the other allocations of income, gain, loss and deduction to be made with respect to such taxable period will equal the product of (A) the number of Final Subordinated Units held by such Partner and (B) the Per Unit Capital Amount for a Common Unit. The purpose of this allocation is to establish uniformity between the Capital Accounts underlying Final Subordinated Units and the Capital Accounts underlying Common Units held by Persons other than the General Partner and its Affiliates immediately prior to the conversion of such Final Subordinated Units into Common Units. This allocation method for establishing such economic uniformity will be available to the General Partner only if the method for allocating the Capital Account maintained with respect to the Subordinated Units between the transferred and retained Subordinated Units pursuant to Section 5.5(c)(ii) does not otherwise provide such economic uniformity to the Final Subordinated Units.

(B) With respect to an event triggering an adjustment to the Carrying Value of Partnership property pursuant to Section 5.5(d) during any taxable period of the Partnership ending upon, or after, the issuance of IDR Reset Common Units pursuant to Section 5.11, after the application of Section 6.1(d)(x)(A), any Unrealized Gains and Unrealized Losses shall be allocated among the Partners in a manner that to the nearest extent possible results in the

 

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Capital Accounts maintained with respect to such IDR Reset Common Units issued pursuant to Section 5.11 equaling the product of (A) the Aggregate Quantity of IDR Reset Common Units and (B) the Per Unit Capital Amount for an Initial Common Unit.

(C) With respect to any taxable period during which an IDR Reset Common Unit is transferred to any Person who is not an Affiliate of the transferor, all or a portion of the remaining items of Partnership gross income or gain for such taxable period shall be allocated 100% to the transferor Partner of such transferred IDR Reset Common Unit until such transferor Partner has been allocated an amount of gross income or gain that increases the Capital Account maintained with respect to such transferred IDR Reset Common Unit to an amount equal to the Per Unit Capital Amount for an Initial Common Unit.

(D) For the proper administration of the Partnership and for the preservation of uniformity of the Limited Partner Interests (or any class or classes thereof), the General Partner shall (i) adopt such conventions as it deems appropriate in determining the amount of depreciation, amortization and cost recovery deductions; (ii) make special allocations of income, gain, loss, deduction, Unrealized Gain or Unrealized Loss; and (iii) amend the provisions of this Agreement as appropriate (x) to reflect the proposal or promulgation of Treasury Regulations under Section 704(b) or Section 704(c) of the Code or (y) otherwise to preserve or achieve uniformity of the Limited Partner Interests (or any class or classes thereof). The General Partner may adopt such conventions, make such allocations and make such amendments to this Agreement as provided in this Section 6.1(d)(x)(D) only if such conventions, allocations or amendments would not have a material adverse effect on the Partners, the holders of any class or classes of Outstanding Limited Partner Interests or the Partnership.

(xi) Curative Allocation.

(A) Notwithstanding any other provision of this Section 6.1, other than the Required Allocations, the Required Allocations shall be taken into account in making the Agreed Allocations so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Partner pursuant to the Required Allocations and the Agreed Allocations, together, shall be equal to the net amount of such items that would have been allocated to each such Partner under the Agreed Allocations had the Required Allocations and the related Curative Allocation not otherwise been provided in this Section 6.1. In exercising its discretion under this Section 6.1(d)(xi)(A), the General Partner may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made. Allocations pursuant to this Section 6.1(d)(xi)(A) shall only be made with respect to Required Allocations to the extent the General Partner determines that such allocations will otherwise be inconsistent with the economic agreement among the Partners.

(B) The General Partner shall, with respect to each taxable period, (1) apply the provisions of Section 6.1(d)(xi)(A) in whatever order is most likely to minimize the economic distortions that might otherwise result from the Required Allocations, and (2) divide all allocations pursuant to Section 6.1(d)(xi)(A) among the Partners in a manner that is likely to minimize such economic distortions.

 

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(xii) Equalization of Capital Accounts With Respect to Privately Placed Units. Net Termination Gain or Net Termination Loss deemed recognized as a result of a Revaluation Event shall first be allocated to the (A) Unitholders holding Privately Placed Units, Pro Rata, or (B) Unitholders holding Common Units, Pro Rata, as applicable, to the extent necessary to cause the Capital Account in respect of each Privately Placed Unit then Outstanding to equal the Capital Account in respect of each Common Unit (other than Privately Placed Units) then Outstanding.

(xiii) Corrective and Other Allocations. In the event of any allocation of Additional Book Basis Derivative Items or a Net Termination Loss, the following rules shall apply:

(A) The General Partner shall allocate Additional Book Basis Derivative Items consisting of depreciation, amortization, depletion or any other form of cost recovery (other than Additional Book Basis Derivative Items included in Net Termination Gain or Net Termination Loss) with respect to any Adjusted Property to the Unitholders, Pro Rata, the holders of Incentive Distribution Rights and the General Partner, all in the same proportion as the Net Termination Gain or Net Termination Loss resulting from the Revaluation Event that gave rise to such Additional Book Basis Derivative Items was allocated to them pursuant to Section 6.1(c).

(B) If a sale or other taxable disposition of an Adjusted Property, including, for this purpose, inventory (“ Disposed of Adjusted Property ”) occurs other than in connection with an event giving rise to Net Termination Gain or Net Termination Loss, the General Partner shall allocate (1) items of gross income and gain (x) away from the holders of Incentive Distribution Rights and the General Partner and (y) to the Unitholders, or (2) items of deduction and loss (x) away from the Unitholders and (y) to the holders of Incentive Distribution Rights and the General Partner , to the extent that the Additional Book Basis Derivative Items with respect to the Disposed of Adjusted Property (determined in accordance with the last sentence of the definition of Additional Book Basis Derivative Items) treated as having been allocated to the Unitholders pursuant to this Section 6.1(d)(xiii)(B) exceed their Share of Additional Book Basis Derivative Items with respect to such Disposed of Adjusted Property. For purposes of this Section 6.1(d)(xiii)(B), the Unitholders shall be treated as having

 

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been allocated Additional Book Basis Derivative Items to the extent that such Additional Book Basis Derivative Items have reduced the amount of income that would otherwise have been allocated to the Unitholders under the Partnership Agreement (e.g., Additional Book Basis Derivative Items taken into account in computing cost of goods sold would reduce the amount of book income otherwise available for allocation among the Partners). Any allocation made pursuant to this Section 6.1(d)(xiii)(B) shall be made after all of the other Agreed Allocations have been made as if this Section 6.1(d)(xiii) were not in this Agreement and, to the extent necessary, shall require the reallocation of items that have been allocated pursuant to such other Agreed Allocations.

(C) Net Termination Loss in an amount equal to the lesser of (1) such Net Termination Loss and (2) the Aggregate Remaining Net Positive Adjustments shall be allocated in such manner as is determined by the General Partner that, to the extent possible, the Capital Account balances of the Partners will equal the amount they would have been had no prior Book-Up Events occurred, and any remaining Net Termination Loss shall be allocated pursuant to Section 6.1(c) hereof. In allocating Net Termination Loss pursuant to this Section 6.1(d)(xiii)(C), the General Partner shall attempt, to the extent possible, to cause the Capital Accounts of the Unitholders, on the one hand, and holders of the Incentive Distribution Rights, on the other hand, to equal the amount they would equal if (i) the Carrying Values of the Partnership’s property had not been previously adjusted in connection with any prior Book-Up Events, (ii) Unrealized Gain and Unrealized Loss (or, in the case of a liquidation, actual gain or loss) with respect to such Partnership Property were determined with respect to such unadjusted Carrying Values, and (iii) any resulting Net Termination Gain had been allocated pursuant to Section 6.1(c)(i) (including, for the avoidance of doubt, taking into account the provisions set forth in the last sentence of Section 6.1(c)(i)).

(D) For purposes of this Section 6.1(d)(xiii), the Unitholders shall be treated as being allocated Additional Book Basis Derivative Items to the extent that such Additional Book Basis Derivative Items have reduced the amount of income that would otherwise have been allocated to the Unitholders under this Agreement. In making the allocations required under this Section 6.1(d)(xii), the General Partner may apply whatever conventions or other methodology it determines will satisfy the purpose of this Section 6.1(d)(xiii). Without limiting the foregoing, if an Adjusted Property is contributed by the Partnership to another entity classified as a partnership for U.S. federal income tax purposes (the “lower tier partnership”), the General Partner may make allocations similar to those described in Sections 6.1(d)(xiii)(A)–(C) to the extent the General Partner determines such allocations are necessary to account for the Partnership’s allocable share of income, gain, loss and deduction of the lower tier partnership that relate to the contributed Adjusted Property in a manner that is consistent with the purpose of this Section 6.1(d)(xiii).

 

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(xiv) Special Curative Allocation in Event of Liquidation Prior to Conversion of the Last Outstanding Subordinated Unit . Notwithstanding any other provision of this Section 6.1 (other than the Required Allocations), if (A) the Liquidation Date occurs prior to the conversion of the last Outstanding Subordinated Unit and (B) after having made all other allocations provided for in this Section 6.1 for the taxable period in which the Liquidation Date occurs, the Capital Account in respect of each Common Unit does not equal the amount such Capital Account would have been if Section 6.1(c)(iii) and Section 6.1(c)(iv) had not been part of this Agreement and all prior allocations of Net Termination Gain and Net Termination Loss had been made pursuant to Section 6.1(c)(i) or Section 6.1(c)(ii), as applicable, then items of income, gain, loss and deduction for such taxable period shall be reallocated among the General Partner and all Unitholders in a manner determined appropriate by the General Partner so as to cause, to the maximum extent possible, the Capital Account in respect of each Common Unit to equal the amount such Capital Account would have been if all prior allocations of Net Termination Gain and Net Termination Loss had been made pursuant to Section 6.1(c)(i) or Section 6.1(c)(ii), as applicable. For the avoidance of doubt, the reallocation of items set forth in the immediately preceding sentence provides that, to the extent necessary to achieve the Capital Account balances described above, (x) items of income and gain that would otherwise be included in Net Income or Net Loss, as the case may be, for the taxable period in which the Liquidation Date occurs shall be reallocated from the General Partner and Unitholders holding Subordinated Units to Unitholders holding Common Units and (y) items of deduction and loss that would otherwise be included in Net Income or Net Loss, as the case may be, for the taxable period in which the Liquidation Date occurs shall be reallocated from Unitholders holding Common Units to the General Partner and Unitholders holding Subordinated Units. In the event that (i) the Liquidation Date occurs on or before the date (not including any extension of time prescribed by law for the filing of the Partnership’s federal income tax return for the taxable period immediately prior to the taxable period in which the Liquidation Date occurs and (ii) the reallocation of items for the taxable period in which the Liquidation Date occurs as set forth above in this Section 6.1(d)(xiv) fails to achieve the Capital Account balances described above, items of income, gain, loss and deduction that would otherwise be included in the Net Income or Net Loss, as the case may be, for such prior taxable period shall be reallocated among the General Partner and all Unitholders in a manner that will, to the maximum extent possible and after taking into account all other allocations made pursuant to this Section 6.1(d)(xiv), cause the Capital Account in respect of each Common Unit to equal the amount such Capital Account would have been if all prior allocations of Net Termination Gain and Net Termination Loss had been made pursuant to Section 6.1(c)(i) or Section 6.1(c)(ii), as applicable.

Section 6.2 Allocations for Tax Purposes.

(a) Except as otherwise provided herein, for U.S. federal income tax purposes, each item of income, gain, loss and deduction shall be allocated among the Partners in the same manner as its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section 6.1.

 

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(b) In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or Adjusted Property, items of income, gain, loss, depreciation, amortization and cost recovery deductions shall be allocated for U.S. federal income tax purposes among the Partners in the manner provided under Section 704(c) of the Code, and the Treasury Regulations promulgated under Section 704(b) and 704(c) of the Code, as determined appropriate by the General Partner (taking into account the General Partner’s discretion under Section 6.1(d)(x)(D)); provided , that the General Partner shall apply the principles of Treasury Regulation Section 1.704-3(d) in all events.

(c) The General Partner may determine to depreciate or amortize the portion of an adjustment under Section 743(b) of the Code attributable to unrealized appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax Disparity) using a predetermined rate derived from the depreciation or amortization method and useful life applied to the unamortized Book-Tax Disparity of such property, despite any inconsistency of such approach with Treasury Regulation Section 1.167(c)-l(a)(6) or any successor regulations thereto. If the General Partner determines that such reporting position cannot reasonably be taken, the General Partner may adopt depreciation and amortization conventions under which all purchasers acquiring Limited Partner Interests in the same month would receive depreciation and amortization deductions, based upon the same applicable rate as if they had purchased a direct interest in the Partnership’s property. If the General Partner chooses not to utilize such aggregate method, the General Partner may use any other depreciation and amortization conventions to preserve the uniformity of the intrinsic tax characteristics of any Limited Partner Interests, so long as such conventions would not have a material adverse effect on the Limited Partners or the Record Holders of any class or classes of Limited Partner Interests.

(d) In accordance with Treasury Regulation Sections 1.1245-1(e) and 1.1250-1(f), any gain allocated to the Partners upon the sale or other taxable disposition of any Partnership asset shall, to the extent possible, after taking into account other required allocations of gain pursuant to this Section 6.2, be characterized as Recapture Income in the same proportions and to the same extent as such Partners (or their predecessors in interest) have been allocated any deductions directly or indirectly giving rise to the treatment of such gains as Recapture Income.

(e) All items of income, gain, loss, deduction and credit recognized by the Partnership for U.S. federal income tax purposes and allocated to the Partners in accordance with the provisions hereof shall be determined without regard to any election under Section 754 of the Code that may be made by the Partnership; provided, however, that such allocations, once made, shall be adjusted (in the manner determined by the General Partner) to take into account those adjustments permitted or required by Sections 734 and 743 of the Code.

(f) Each item of Partnership income, gain, loss and deduction shall, for U.S. federal income tax purposes, be determined for each taxable period and prorated on a monthly basis and shall be allocated to the Partners as of the opening of the National Securities Exchange on which

 

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Partnership Interests are listed or admitted to trading on the first Business Day of each month; provided , however , such items for the period beginning on the Closing Date and ending on the last day of the month in which the Underwriters’ Option is exercised in full or the expiration of the Underwriters’ Option occurs shall be allocated to the Partners as of the opening of the National Securities Exchange on which Partnership Interests are listed or admitted to trading on the first Business Day of the next succeeding month; and provided , further , that gain or loss on a sale or other disposition of any assets of the Partnership or any other extraordinary item of income, gain, loss or deduction as determined by the General Partner, shall be allocated to the Partners as of the opening of the National Securities Exchange on which Partnership Interests are listed or admitted to trading on the first Business Day of the month in which such item is recognized for federal income tax purposes. The General Partner may revise, alter or otherwise modify such methods of allocation to the extent permitted or required by Section 706 of the Code and the regulations or rulings promulgated thereunder.

(g) Allocations that would otherwise be made to a Limited Partner under the provisions of this Article VI shall instead be made to the beneficial owner of Limited Partner Interests held by a nominee in any case in which the nominee has furnished the identity of such owner to the Partnership in accordance with Section 6031(c) of the Code or any other method determined by the General Partner.

Section 6.3 Requirement and Characterization of Distributions; Distributions to Record Holders.

(a) Within 60 days following the end of each Quarter commencing with the Quarter ending on December 31, 2013, an amount equal to 100% of Available Cash with respect to such Quarter shall be distributed in accordance with this Article VI by the Partnership to the Partners as of the Record Date selected by the General Partner. All amounts of Available Cash distributed by the Partnership on any date from any source shall be deemed to be Operating Surplus until the sum of all Available Cash theretofore distributed by the Partnership to the Partners pursuant to Section 6.4 equals the Operating Surplus from the Closing Date through the close of the immediately preceding Quarter. Any remaining amounts of Available Cash distributed by the Partnership on such date shall, except as otherwise provided in Section 6.5, be deemed to be “ Capital Surplus .” All distributions required to be made under this Agreement or otherwise made by the Partnership shall be made subject to Sections 17-607 and 17-804 of the Delaware Act.

(b) Notwithstanding Section 6.3(a), in the event of the dissolution and liquidation of the Partnership, all Partnership assets shall be applied and distributed solely in accordance with, and subject to the terms and conditions of, Section 12.4.

(c) Each distribution in respect of a Partnership Interest shall be paid by the Partnership, directly or through any Transfer Agent or through any other Person or agent, only to the Record Holder of such Partnership Interest as of the Record Date set for such distribution. Such payment shall constitute full payment and satisfaction of the Partnership’s liability in respect of such payment, regardless of any claim of any Person who may have an interest in such payment by reason of an assignment or otherwise.

 

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Section 6.4 Distributions of Available Cash from Operating Surplus.

(a) During Subordination Period . Available Cash with respect to any Quarter wholly within the Subordination Period that is deemed to be Operating Surplus pursuant to the provisions of Section 6.3 or 6.5 shall be distributed as follows, except as otherwise provided in Section 5.6(b) in respect of other Partnership Interests issued pursuant thereto:

(i) First, to all Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;

(ii) Second, to all Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to the Cumulative Common Unit Arrearage existing with respect to such Quarter;

(iii) Third, to all Unitholders holding Subordinated Units, Pro Rata, until there has been distributed in respect of each Subordinated Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;

(iv) Fourth, to all Unitholders, Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter;

(v) Fifth, (A) 15% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 85% to all Unitholders, Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution over the First Target Distribution for such Quarter;

(vi) Sixth, (A) 25% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 75% to all Unitholders, Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution over the Second Target Distribution for such Quarter; and

(vii) Thereafter, 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 50% to all Unitholders, Pro Rata;

provided , however , if the Target Distributions have been reduced to zero pursuant to the second sentence of Section 6.6(a), the distribution of Available Cash that is deemed to be Operating Surplus with respect to any Quarter will be made solely in accordance with Section 6.4(a)(vii).

 

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(b) After Subordination Period . Available Cash with respect to any Quarter ending after the Subordination Period has ended that is deemed to be Operating Surplus pursuant to the provisions of Section 6.3 or Section 6.5 shall be distributed as follows, except as otherwise provided in Section 5.6(b) in respect of other Partnership Interests issued pursuant thereto:

(i) First, to all Unitholders, Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;

(ii) Second, to all Unitholders, Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter;

(iii) Third, (A) 15% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 85% to all Unitholders, Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution over the First Target Distribution for such Quarter;

(iv) Fourth, (A) 25% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 75% to all Unitholders, Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution over the Second Target Distribution for such Quarter; and

(v) Thereafter, (A) 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 50% to all Unitholders, Pro Rata;

provided , however , if the Target Distributions have been reduced to zero pursuant to the second sentence of Section 6.6(a), the distribution of Available Cash that is deemed to be Operating Surplus with respect to any Quarter will be made solely in accordance with Section 6.4(b)(v).

Section 6.5 Distributions of Available Cash from Capital Surplus. Available Cash that is distributed and deemed to be Capital Surplus pursuant to the provisions of Section 6.3(a) shall be distributed, unless the provisions of Section 6.3 require otherwise, except as otherwise provided in Section 5.6(b) in respect of other Partnership Interests issued pursuant thereto:

(a) First , 100% to the Unitholders, Pro Rata, until the Minimum Quarterly Distribution has been reduced to zero pursuant to the second sentence of Section 6.6(a);

(b) Second , 100% to all Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to the Cumulative Common Unit Arrearage; and

(c) Thereafter , all Available Cash that is distributed shall be distributed as if it were Operating Surplus and shall be distributed in accordance with Section 6.4.

 

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Section 6.6 Adjustment of Target Distribution Levels.

(a) The Target Distributions, Common Unit Arrearages and Cumulative Common Unit Arrearages shall be proportionately adjusted in the event of any distribution, combination or subdivision (whether effected by a distribution payable in Units or otherwise) of Units or other Partnership Interests. In the event of a distribution of Available Cash that is deemed to be from Capital Surplus, the then applicable Target Distributions shall be reduced in the same proportion that the distribution had to the fair market value of the Common Units immediately prior to the announcement of the distribution. If the Common Units are publicly traded on a National Securities Exchange, the fair market value will be the Current Market Price before the ex-dividend date. If the Common Units are not publicly traded, the fair market value will be determined by the Board of Directors.

(b) The Target Distributions shall also be subject to adjustment pursuant to Section 5.11 and Section 6.9.

Section 6.7 Special Provisions Relating to the Holders of Subordinated Units.

(a) Except with respect to the right to vote on or approve matters requiring the vote or approval of a percentage of the holders of Outstanding Common Units and the right to participate in allocations of income, gain, loss and deduction and distributions made with respect to Common Units, the holder of a Subordinated Unit shall have all of the rights and obligations of a Unitholder holding Common Units hereunder; provided , however , that immediately upon the conversion of Subordinated Units into Common Units pursuant to Section 5.7, the Unitholder holding Subordinated Units shall possess all of the rights and obligations of a Unitholder holding Common Units hereunder with respect to such converted Subordinated Units, including the right to vote as a Common Unitholder and the right to participate in allocations of income, gain, loss and deduction and distributions made with respect to Common Units; provided , however , that such converted Subordinated Units shall remain subject to the provisions of Section 5.5(c)(ii), Section 6.1(d)(x), and Section 6.7(b) and (c).

(b) A Unitholder shall not be permitted to transfer a Subordinated Unit or a Subordinated Unit that has converted into a Common Unit pursuant to Section 5.7 (other than a transfer to an Affiliate) if the remaining balance in the transferring Unitholder’s Capital Account with respect to the retained Subordinated Units or retained converted Subordinated Units would be negative after giving effect to the allocation under Section 5.5(c)(ii)(B).

(c) The Unitholder holding a Common Unit that has resulted from the conversion of a Subordinated Unit pursuant to Section 5.7 shall not be issued a Common Unit Certificate pursuant to Section 4.1, if the Common Units are evidenced by Certificates, and shall not be permitted to transfer such Common Unit to a Person that is not an Affiliate of the holder until such time as the General Partner determines, based on advice of counsel, that each such

 

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Common Unit should have, as a substantive matter, like intrinsic economic and federal income tax characteristics, in all material respects, to the intrinsic economic and federal income tax characteristics of an Initial Common Unit. In connection with the condition imposed by this Section 6.7(c), the General Partner may take whatever steps are required to provide economic uniformity to such Common Units in preparation for a transfer of such Common Units, including the application of Sections 5.5(c)(ii), 6.1(d)(x) and 6.7(b); provided, however, that no such steps may be taken that would have a material adverse effect on the Unitholders holding a Common Unit.

Section 6.8 Special Provisions Relating to the Holders of IDR Reset Common Units.

(a) A Unitholder shall not be permitted to transfer an IDR Reset Common Unit (other than a transfer to an Affiliate) if the remaining balance in the transferring Unitholder’s Capital Account with respect to the retained IDR Reset Common Units would be negative after giving effect to the allocation under Section 5.5(c)(iii).

(b) A Unitholder holding an IDR Reset Common Unit shall not be permitted to transfer such Common Unit to a Person that is not an Affiliate of the holder until such time as the General Partner determines, based on advice of counsel, that upon transfer each such Common Unit should have, as a substantive matter, like intrinsic economic and U.S. federal income tax characteristics to the transferee, in all material respects, to the intrinsic economic and U.S. federal income tax characteristics of an Initial Common Unit to such transferee. In connection with the condition imposed by this Section 6.8(b), the General Partner may apply Sections 5.5(c)(iii), 6.1(d)(x) and 6.8(a) or, to the extent not resulting in a material adverse effect on the Unitholders holding Common Units, take whatever steps are required to provide economic uniformity to such Common Units in preparation for a transfer of such IDR Reset Common Units.

Section 6.9 Entity-Level Taxation. If legislation is enacted or the official interpretation of existing legislation is modified by a governmental authority, which after giving effect to such enactment or modification, results in a Group Member becoming subject to federal, state or local or non-U.S. income or withholding taxes in excess of the amount of such taxes due from the Group Member prior to such enactment or modification (including, for the avoidance of doubt, any increase in the rate of such taxation applicable to the Group Member), then the General Partner may, in its sole discretion, reduce the Target Distributions by the amount of income or withholding taxes that are payable by reason of any such new legislation or interpretation (the “ Incremental Income Taxes ”), or any portion thereof selected by the General Partner, in the manner provided in this Section 6.9. If the General Partner elects to reduce the Target Distributions for any Quarter with respect to all or a portion of any Incremental Income Taxes, the General Partner shall estimate for such Quarter the Partnership Group’s aggregate liability (the “ Estimated Incremental Quarterly Tax Amount ”) for all (or the relevant portion of) such Incremental Income Taxes; provided that any difference between such estimate and the actual liability for Incremental Income Taxes (or the relevant portion thereof) for such Quarter may, to the extent determined by

 

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the General Partner, be taken into account in determining the Estimated Incremental Quarterly Tax Amount with respect to each Quarter in which any such difference can be determined. For each such Quarter, the Target Distributions, shall be the product obtained by multiplying (a) the amounts therefor that are set out herein prior to the application of this Section 6.9 times (b) the quotient obtained by dividing (i) Available Cash with respect to such Quarter by (ii) the sum of Available Cash with respect to such Quarter and the Estimated Incremental Quarterly Tax Amount for such Quarter, as determined by the General Partner. For purposes of the foregoing, Available Cash with respect to a Quarter will be deemed reduced by the Estimated Incremental Quarterly Tax Amount for that Quarter.

ARTICLE VII

MANAGEMENT AND OPERATION OF BUSINESS

Section 7.1 Management.

(a) The General Partner shall conduct, direct and manage all activities of the Partnership. Except as otherwise expressly provided in this Agreement, but without limitation on the ability of the General Partner to delegate its rights and power to other Persons, all management powers over the business and affairs of the Partnership shall be exclusively vested in the General Partner, and no other Partner shall have any management power over the business and affairs of the Partnership. In addition to the powers now or hereafter granted to a general partner of a limited partnership under applicable law or that are granted to the General Partner under any other provision of this Agreement, the General Partner, subject to Section 7.4, shall have full power and authority to do all things and on such terms as it determines to be necessary or appropriate to conduct the business of the Partnership, to exercise all powers set forth in Section 2.5 and to effectuate the purposes set forth in Section 2.4, including the following:

(i) the making of any expenditures, the lending or borrowing of money, the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness, including indebtedness that is convertible or exchangeable into Partnership Interests, and the incurring of any other obligations;

(ii) the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership;

(iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or all of the assets of the Partnership or the merger or other combination of the Partnership with or into another Person (the matters described in this clause (iii) being subject, however, to any prior approval that may be required by Section 7.4 or Article XIV);

 

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(iv) the use of the assets of the Partnership (including cash on hand) for any purpose consistent with the terms of this Agreement, including the financing of the conduct of the operations of the Partnership Group; the lending of funds to other Persons (including other Group Members); the repayment or guarantee of obligations of any Group Member; and the making of capital contributions to any Group Member;

(v) the negotiation, execution and performance of any contracts, conveyances or other instruments (including instruments that limit the liability of the Partnership under contractual arrangements to all or particular assets of the Partnership, with the other party to the contract to have no recourse against the General Partner or its assets other than its interest in the Partnership, even if the same results in the terms of the transaction being less favorable to the Partnership than would otherwise be the case);

(vi) the distribution of cash or cash equivalents by the Partnership;

(vii) the selection, employment, retention and dismissal of employees (including employees having titles such as “president,” “vice president,” “secretary” and “treasurer”) and agents, outside attorneys, accountants, consultants and contractors of the General Partner or the Partnership Group and the determination of their compensation and other terms of employment or hiring;

(viii) the maintenance of insurance for the benefit of the Partnership Group, the Partners and Indemnitees;

(ix) the formation of, or acquisition of an interest in, and the contribution of property and the making of loans to, any further limited or general partnerships, joint ventures, corporations, limited liability companies or other Persons (including the acquisition of interests in, and the contributions of property to, any Group Member from time to time);

(x) the control of any matters affecting the rights and obligations of the Partnership, including the bringing and defending of actions at law or in equity and otherwise engaging in the conduct of litigation, arbitration or mediation and the incurring of legal expense and the settlement of claims and litigation;

(xi) the indemnification of any Person against liabilities and contingencies to the extent permitted by law;

(xii) the entering into of listing agreements with any National Securities Exchange and the delisting of some or all of the Limited Partner Interests from, or requesting that trading be suspended on, any such exchange;

(xiii) the purchase, sale or other acquisition or disposition of Partnership Interests, or the issuance of Derivative Instruments;

 

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(xiv) the undertaking of any action in connection with the Partnership’s participation in the management of any Group Member; and

(xv) the entering into of agreements with any of its Affiliates, including agreements to render services to a Group Member or to itself in the discharge of its duties as General Partner of the Partnership.

(b) Notwithstanding any other provision of this Agreement, any Group Member Agreement, the Delaware Act or any applicable law, rule or regulation, each of the Partners, each other Person who acquires an interest in a Partnership Interest and each other Person who is otherwise bound by this Agreement hereby (i) approves, ratifies and confirms the execution, delivery and performance by the parties thereto of this Agreement, the Underwriting Agreement, the Contribution Agreement and the other agreements described in or filed as exhibits to the Registration Statement that are related to the transactions contemplated by the Registration Statement (in the case of each agreement other than this Agreement, without giving effect to any amendments, supplements or restatements after the date hereof); (ii) agrees that the General Partner (on its own behalf or on behalf of the Partnership) is authorized to execute, deliver and perform the agreements referred to in clause (i) of this sentence and the other agreements, acts, transactions and matters described in or contemplated by the Registration Statement on behalf of the Partnership without any further act, approval or vote of the Partners, the other Persons who acquire a Partnership Interest and the Persons who are otherwise bound by this Agreement; and (iii) agrees that the execution, delivery or performance by the General Partner, any Group Member or any Affiliate of any of them of this Agreement or any agreement authorized or permitted under this Agreement (including the exercise by the General Partner or any Affiliate of the General Partner of the rights accorded pursuant to Article XV) shall not constitute a breach by the General Partner of any fiduciary or other duty existing at law, in equity or otherwise that the General Partner may owe the Partnership, the Limited Partners, the other Persons who acquire a Partnership Interest or the Persons who are otherwise bound by this Agreement.

(c) As used in the following provisions of this Article VII other than Section 7.12, the term Partnership Interest shall include any Derivative Instruments.

Section 7.2 Replacement of Fiduciary Duties.

Notwithstanding any other provision of this Agreement, to the extent that, at law or in equity, the General Partner or any other Indemnitee would have duties (including fiduciary duties) to the Partnership, to another Partner, to any person who acquires an interest in a Partnership Interest or to any other Person bound by this Agreement, all such duties (including fiduciary duties) are hereby eliminated, to the fullest extent permitted by law, and replaced with the duties expressly set forth herein. The elimination of duties (including fiduciary duties) and replacement thereof with the duties expressly set forth herein are approved by the Partnership, each of the Partners, each other Person who acquires an interest in a Partnership Interest and each other Person bound by this Agreement.

 

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Section 7.3 Certificate of Limited Partnership. The General Partner has caused the Certificate of Limited Partnership to be filed with the Secretary of State of the State of Delaware as required by the Delaware Act. The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents that the General Partner determines to be necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware or any other state in which the Partnership may elect to do business or own property. To the extent the General Partner determines such action to be necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate of Limited Partnership and do all things to maintain the Partnership as a limited partnership (or a partnership or other entity in which the limited partners have limited liability) under the laws of the State of Delaware or of any other state in which the Partnership may elect to do business or own property. Subject to the terms of Section 3.4(a), the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Limited Partnership, any qualification document or any amendment thereto to any Partner.

Section 7.4 Restrictions on the General Partner’s Authority. Except as provided in Article XII and Article XIV, the General Partner may not sell, exchange or otherwise dispose of all or substantially all of the assets of the Partnership Group, taken as a whole, in a single transaction or a series of related transactions without the approval of a Unit Majority; provided, however, that this provision shall not preclude or limit the General Partner’s ability to mortgage, pledge, hypothecate or grant a security interest in all or substantially all of the assets of the Partnership Group and shall not apply to any forced sale of any or all of the assets of the Partnership Group pursuant to the foreclosure of, or other realization upon, any such encumbrance.

Section 7.5 Reimbursement of the General Partner.

(a) The General Partner shall be reimbursed on a monthly basis, or such other basis as the General Partner may determine, for (i) all direct and indirect expenses it incurs or payments it makes on behalf of the Partnership Group (including salary, bonus, incentive compensation and other amounts paid to any Person (including Affiliates of the General Partner) to perform services for the Partnership Group or for the General Partner in the discharge of its duties to the Partnership Group), and (ii) all other expenses allocable to the Partnership Group or otherwise incurred by the General Partner in connection with operating the Partnership Group’s business (including expenses allocated to the General Partner by its Affiliates). The General Partner shall determine the expenses that are allocable to any member of the Partnership Group. Reimbursements pursuant to this Section 7.5 shall be in addition to any reimbursement to the General Partner as a result of indemnification pursuant to Section 7.7. The General Partner and its Affiliates may charge any member of the Partnership Group a management fee to the extent necessary to allow the Partnership Group to reduce the amount of any state franchise or income tax or any tax based upon revenues or gross margin of any member of the Partnership Group if the tax benefit produced by the payment for such management fee exceeds the amount of such fee.

 

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(b) The General Partner, without the approval of the Limited Partners (who shall have no right to vote in respect thereof), may propose and adopt on behalf of the Partnership benefit plans, programs and practices (including plans, programs and practices involving the issuance of Partnership Interests), or cause the Partnership to issue Partnership Interests in connection with, or pursuant to, any benefit plan, program or practice maintained or sponsored by the General Partner or any of its Affiliates, any Group Member or their Affiliates, or any of them, in each case for the benefit of employees, officers, consultants and directors of the General Partner or its Affiliates, in respect of services performed, directly or indirectly, for the benefit of the Partnership Group. The Partnership agrees to issue and sell to the General Partner or any of its Affiliates any Partnership Interests that the General Partner or such Affiliates are obligated to provide to any employees, officers, consultants and directors pursuant to any such benefit plans, programs or practices. Expenses incurred by the General Partner in connection with any such plans, programs and practices (including the net cost to the General Partner or such Affiliates of Partnership Interests purchased by the General Partner or such Affiliates, from the Partnership or otherwise, to fulfill awards under such plans, programs and practices) shall be reimbursed in accordance with Section 7.5(a). Any and all obligations of the General Partner under any benefit plans, programs or practices adopted by the General Partner as permitted by this Section 7.5(b) shall constitute obligations of the General Partner hereunder and shall be assumed by any successor General Partner approved pursuant to Section 11.1 or Section 11.2 or the transferee of or successor to all of the General Partner’s General Partner Interest pursuant to Section 4.6.

Section 7.6 Outside Activities.

(a) The General Partner, for so long as it is the General Partner of the Partnership agrees that (i) its sole business will be to act as a general partner or managing member, as the case may be, of the Partnership and any other entity of which the Partnership is, directly or indirectly, a partner or member and (ii) that it shall not engage in any other business or activity or incur any debts or liabilities, provided that the General Partner may engage in any business or activity or incur any debts or liabilities in connection with or incidental to (A) its performance as general partner or managing member, if any, of one or more Group Members or as described in or contemplated by the Registration Statement or (B) the acquiring, owning or disposing of debt securities or equity interests in any Group Member or (iii) the direct or indirect provision of management, advisory, and administrative services to its Affiliates or to other Persons.

(b) Each Unrestricted Person (other than the General Partner) shall have the right to engage in businesses of every type and description and other activities for profit and to engage in and possess an interest in other business ventures of any and every type or description, whether in businesses engaged in or anticipated to be engaged in by any Group Member, independently or with others, including business interests and activities in direct competition with the business and activities of any Group Member. No such business interest or activity shall constitute a

 

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breach of this Agreement, any fiduciary or other duty existing at law, in equity or otherwise, or obligation of any type whatsoever to the Partnership or other Group Member, to another Partner, to any Person who acquires an interest in a Partnership Interest or any Person who is otherwise bound by this Agreement; provided such Unrestricted Person does not engage in such business or activity as a result of or using confidential or proprietary information provided by or on behalf of the Partnership to such Unrestricted Person.

(c) Notwithstanding anything to the contrary in this Agreement, the doctrine of corporate opportunity, or any analogous doctrine, shall not apply to any Unrestricted Person (including the General Partner). No Unrestricted Person (including, subject to Section 7.6(a), the General Partner) who acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for the Partnership, shall have any duty to communicate or offer such opportunity to any Group Member, and such Unrestricted Person (including the General Partner) shall not be liable to the Partnership or any other Group Member, to another Partner, to any person who acquires a Partnership Interest or any other Person who is otherwise bound by this Agreement for breach of any fiduciary or other duty existing at law, in equity or otherwise by reason of the fact that such Unrestricted Person (including the General Partner) pursues or acquires such opportunity for itself, directs such opportunity to another Person or does not communicate such opportunity or information to any Group Member.

(d) The General Partner and each of its Affiliates may acquire Units or other Partnership Interests in addition to those acquired on the Closing Date and, except as otherwise expressly provided in this Agreement, shall be entitled to exercise, at their option, all rights relating to all Units or other Partnership Interests acquired by them. The term “Affiliates” when used in this Section 7.6(d) with respect to the General Partner shall not include any Group Member.

Section 7.7 Indemnification.

(a) To the fullest extent permitted by law, all Indemnitees shall be indemnified and held harmless by the Partnership from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all threatened pending or completed claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, and whether formal or informal and including appeals, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee and acting (or refraining to act) in such capacity; provided, that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Agreement, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct, or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful. For purposes of this Agreement, any determination, other action or failure to act by any Indemnitee will be considered to be in bad

 

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faith only if such Indemnitee subjectively believed such determination, other action or failure to act was adverse to the interest of the Partnership. Any indemnification pursuant to this Section 7.7 shall be made only out of the assets of the Partnership, it being agreed that the General Partner shall not be personally liable for such indemnification and shall have no obligation to contribute or loan any monies or property to the Partnership to enable it to effectuate such indemnification.

(b) To the fullest extent permitted by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to Section 7.7(a) in appearing at, participating in or defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Partnership prior to a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 7.7, the Indemnitee is not entitled to be indemnified upon receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be ultimately determined that the Indemnitee is not entitled to be indemnified as authorized by this Section 7.7.

(c) The indemnification provided by this Section 7.7 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the holders of Outstanding Limited Partner Interests, as a matter of law, in equity or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.

(d) The Partnership may purchase and maintain (or reimburse the General Partner or its Affiliates for the cost of) insurance, on behalf of an Indemnitee and such other Persons as the General Partner shall determine, against any liability that may be asserted against, or expense that may be incurred by, such Indemnitee in connection with the Partnership’s activities or such Indemnitee’s activities on behalf of the Partnership, regardless of whether the Partnership would have the power to indemnify such Indemnitee against such liability under the provisions of this Agreement.

(e) For purposes of this Section 7.7, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning of Section 7.7(a); and action taken or omitted by an Indemnitee with respect to any employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the best interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that is in the best interests of the Partnership.

(f) In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.

 

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(g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

(h) The provisions of this Section 7.7 are for the benefit of the Indemnitees and their heirs, successors, assigns, executors and administrators and shall not be deemed to create any rights for the benefit of any other Persons.

(i) No amendment, modification or repeal of this Section 7.7 or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Partnership, nor the obligations of the Partnership to indemnify any such Indemnitee under and in accordance with the provisions of this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

Section 7.8 Liability of Indemnitees.

(a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Partnership, the Partners or any other Persons who have acquired interests in a Partnership Interest or is otherwise bound by this Agreement, for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct, or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful. In the case where an Indemnitee is liable for damages, those damages shall only be direct damages and shall not include punitive damages, consequential damages or lost profits.

(b) The General Partner may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents, and the General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the General Partner in good faith.

(c) To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Partnership, the Partners, any Person who acquires an interest in a Partnership Interest or is otherwise bound by this Agreement, the General Partner and any other Indemnitee acting in connection with the Partnership’s business or affairs shall not be liable, to the fullest extent permitted by law, to the Partnership, the Partners, any Person who acquires an interest in a Partnership Interest or is otherwise bound by this Agreement, for its reliance on the provisions of this Agreement.

(d) Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the liability of the Indemnitees under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

 

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Section 7.9 Standards of Conduct and Modification of Duties.

(a) Whenever the General Partner, the Board of Directors or any committee of the Board of Directors (including the Conflicts Committee), makes a determination or takes or declines to take any other action, or any Affiliates of the General Partner cause the General Partner to do so, in its capacity as the general partner of the Partnership as opposed to in its individual capacity or its sole discretion, whether under this Agreement, any Group Member Agreement or any other agreement contemplated hereby or otherwise, then, unless another lesser standard is provided for in this Agreement, the General Partner, the Board of Directors, such committee or such Affiliates causing the General Partner to do so, shall make such determination or take or decline to take such other action in good faith. The foregoing is the sole and exclusive standard governing any such determinations, actions and omissions of the General Partner, the Board of Directors, any committee of the Board of Directors (including the Conflicts Committee) and any Affiliate of the General Partner and no such Person shall be subject to any fiduciary duty or other duty or obligation, or any other, different or higher standard (all of which duties, obligations and standards are hereby waived and disclaimed), under this Agreement any Group Member Agreement or any other agreement contemplated hereby, or under the Delaware Act or any other law, rule or regulation or at equity. A determination, other action or failure to act by the General Partner, the Board of Directors of the General Partner or any committee thereof (including the Conflicts Committee) will be deemed to be in good faith so long as the General Partner, the Board of Directors of the General Partner or any committee thereof (including the Conflicts Committee) subjectively believed such determination, other action or failure to act was in, or not opposed to, the best interests of the Partnership. In any proceeding brought by the Partnership, any Limited Partner, or any Person who acquires an interest in a Partnership Interest or any other Person who is bound by this Agreement challenging such action, determination or failure to act, the Person bringing or prosecuting such proceeding shall have the burden of proving that such determination, action or failure to act was not in good faith.

(b) Whenever the General Partner makes a determination or takes or declines to take any other action, or any of its Affiliates causes it to do so, in its individual capacity or its sole discretion as opposed to in its capacity as the general partner of the Partnership, whether under this Agreement or any other agreement contemplated hereby or otherwise, then the General Partner, or such Affiliates causing it to do so, are entitled, to the fullest extent permitted by law, to make such determination or to take or decline to take such other action free of any fiduciary duty or other duty existing at law, in equity or otherwise or obligation whatsoever to the Partnership, any Limited Partner, any other Person who acquires an interest in a Partnership

 

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Interest or any other Person who otherwise is bound by this Agreement, and the General Partner, or such Affiliates causing it to do so, shall not, to the fullest extent permitted by law, be required to act in good faith or pursuant to any other standard imposed by this Agreement or any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation or at equity.

(c) For purposes of Sections 7.9(a) and (b) of this Agreement, “acting in its capacity as the general partner of the Partnership” means and is solely limited to, the General Partner exercising its authority as a general partner under this Agreement, other than when it is “acting in its individual capacity or its sole discretion.” For purposes of this Agreement, “acting in its individual capacity or its sole discretion” means: (A) any action by the General Partner or its Affiliates other than through the exercise of the General Partner of its authority as a general partner under this Agreement; and (B) any action or inaction by the General Partner by the exercise (or failure to exercise) of its rights, powers or authority under this Agreement that are modified by: (i) the phrase “at the option of the General Partner,” (ii) the phrase “in its sole discretion” or “in its discretion” or (iii) some variation of the phrases set forth in clauses (i) and (ii). For the avoidance of doubt, whenever the General Partner votes, acquires Partnership Interests or transfers its Partnership Interests, or refrains from voting or transferring its Partnership Interests, it shall be and be deemed to be “acting in its individual capacity or its sole discretion.”

(d) Whenever a potential conflict of interest exists or arises between the General Partner or any of its Affiliates, on the one hand, and the Partnership, any Group Member or any Partner, any other Person who acquires an interest in a Partnership Interest or any other Person who is bound by this Agreement on the other hand, the General Partner may in its sole discretion submit any resolution, course of action with respect to or causing such conflict of interest or transaction (i) for Special Approval or (ii) for approval by the vote of a majority of the Common Units (excluding Common Units owned by the General Partner and its Affiliates). If any resolution, course of action or transaction: (i) receives Special Approval; or (ii) receives approval of a majority of the Common Units (excluding Common Units owned by the General Partner and its Affiliates), then such resolution, course of action or transaction shall be conclusively deemed to be approved by the Partnership, all the Partners, each Person who acquires an interest in a Partnership Interest and each other Person who is bound by this Agreement, and shall be and be deemed to be duly authorized, legal and binding and to be fair to the Partnership, all the Partners, each Person who acquires an interest in a Partnership Interest and each other Person who is bound by this Agreement, and shall not constitute a breach of this Agreement, of any Group Member Agreement, of any agreement contemplated herein or therein, or of any fiduciary or other duty or obligation existing at law, in equity or otherwise or obligation of any type whatsoever.

(e) Notwithstanding anything to the contrary in this Agreement, the General Partner and its Affiliates or any other Indemnitee shall have no duty or obligation, express or implied, to (i) sell or otherwise dispose of any asset of the Partnership Group other than in the ordinary course of business or (ii) permit any Group Member to use any facilities or assets of the General Partner and its Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use. Any determination by the General Partner or any of its Affiliates to enter into such contracts shall be in its sole discretion.

 

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(f) The Partners, each Person who acquires an interest in a Partnership Interest or is otherwise bound by this Agreement hereby authorize the General Partner, on behalf of the Partnership as a partner or member of a Group Member, to approve actions by the general partner or managing member of such Group Member similar to those actions permitted to be taken by the General Partner pursuant to this Section 7.9.

(g) Whenever the Board of Directors, any committee of the Board of Directors (including the Conflicts Committee), the officers of the General Partner or any Affiliates of the General Partner make a determination on behalf of the General Partner, or cause the General Partner to take or omit to take any action, whether in the General Partner’s capacity as the General Partner or in its individual capacity or its sole discretion, the standards of care applicable to the General Partner shall apply to such Persons, and such Persons shall be entitled to all benefits and rights of the General Partner hereunder, including waivers and modifications of duties, protections and presumptions, as if such Persons were the General Partner hereunder.

Section 7.10 Other Matters Concerning the General Partner and Indemnitees.

(a) The General Partner and any other Indemnitee may rely upon, and shall be protected in acting or refraining from acting upon, any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.

(b) The General Partner and any other Indemnitee may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted in reliance upon the advice or opinion (including an Opinion of Counsel) of such Persons as to matters that the General Partner or such other Indemnitee, as applicable, reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such advice or opinion.

(c) The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers, a duly appointed attorney or attorneys-in-fact or the duly authorized officers of any Group Member.

Section 7.11 Purchase or Sale of Partnership Interests. The General Partner may cause the Partnership to purchase or otherwise acquire Partnership Interests; provided , that , except as permitted pursuant to Section 4.9, the General Partner may not cause any Group Member to purchase Subordinated Units during the Subordination Period. As long as Partnership Interests are held by any Group Member, such

 

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Partnership Interests shall not be considered Outstanding for any purpose, except as otherwise provided herein. The General Partner or any Affiliate of the General Partner may also purchase or otherwise acquire and sell or otherwise dispose of Partnership Interests for its own account, subject to the provisions of Articles IV and X.

Section 7.12 Registration Rights of the General Partner and its Affiliates.

(a) If (i) the General Partner or any Affiliate of the General Partner (including for purposes of this Section 7.12, any Person that is an Affiliate of the General Partner at the date hereof notwithstanding that it may later cease to be an Affiliate of the General Partner) holds Partnership Interests that it desires to sell and (ii) Rule 144 of the Securities Act (or any successor rule or regulation to Rule 144) or another exemption from registration is not available to enable such holder of Partnership Interests (the “ Holder ”) to dispose of the number of Partnership Interests it desires to sell at the time it desires to do so without registration under the Securities Act, then at the option and upon the request of the Holder, the Partnership shall file with the Commission as promptly as practicable after receiving such request, and use all commercially reasonable efforts to cause to become effective and remain effective for a period of not less than six months following its effective date or such shorter period as shall terminate when all Partnership Interests covered by such registration statement have been sold, a registration statement under the Securities Act registering the offering and sale of the number of Partnership Interests specified by the Holder; provided , however , that the Partnership shall not be required to effect more than two registrations pursuant to this Section 7.12(a) in any twelve-month period; and provided further , however , that if the General Partner determines that a postponement of the requested registration would be in the best interests of the Partnership and its Partners due to a pending transaction, investigation or other event, the filing of such registration statement or the effectiveness thereof may be deferred for up to six months, but not thereafter. In connection with any registration pursuant to the immediately preceding sentence, the Partnership shall (i) promptly prepare and file (A) such documents as may be necessary to register or qualify the securities subject to such registration under the securities laws of such states as the Holder shall reasonably request; provided , however , that no such qualification shall be required in any jurisdiction where, as a result thereof, the Partnership would become subject to general service of process or to taxation or qualification to do business as a foreign corporation or partnership doing business in such jurisdiction solely as a result of such registration, and (B) such documents as may be necessary to apply for listing or to list the Partnership Interests subject to such registration on such National Securities Exchange as the Holder shall reasonably request, and (ii) do any and all other acts and things that may be necessary or appropriate to enable the Holder to consummate a public sale of such Partnership Interests in such states. Except as set forth in Section 7.12(c), all costs and expenses of any such registration and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by the Holder.

(b) If the Partnership shall at any time propose to file a registration statement under the Securities Act for an offering of Partnership Interests for cash (other than an offering relating

 

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solely to a benefit plan), the Partnership shall use all commercially reasonable efforts to include such number or amount of Partnership Interests held by any Holder in such registration statement as the Holder shall request; provided , that the Partnership is not required to make any effort or take any action to so include the Partnership Interests of the Holder once the registration statement becomes or is declared effective by the Commission, including any registration statement providing for the offering from time to time of Partnership Interests pursuant to Rule 415 of the Securities Act. If the proposed offering pursuant to this Section 7.12(b) shall be an underwritten offering, then, in the event that the managing underwriter or managing underwriters of such offering advise the Partnership and the Holder that in their opinion the inclusion of all or some of the Holder’s Partnership Interests would adversely and materially affect the timing or success of the offering, the Partnership shall include in such offering only that number or amount, if any, of Partnership Interests held by the Holder that, in the opinion of the managing underwriter or managing underwriters, will not so adversely and materially affect the offering. Except as set forth in Section 7.12(c), all costs and expenses of any such registration and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by the Holder.

(c) If underwriters are engaged in connection with any registration referred to in this Section 7.12, the Partnership shall provide indemnification, representations, covenants, opinions and other assurance to the underwriters in form and substance reasonably satisfactory to such underwriters. Further, in addition to and not in limitation of the Partnership’s obligation under Section 7.7, the Partnership shall, to the fullest extent permitted by law, indemnify and hold harmless the Holder, its officers, directors and each Person who controls the Holder (within the meaning of the Securities Act) and any agent thereof (collectively, “ Indemnified Persons ”) from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Indemnified Person may be involved, or is threatened to be involved, as a party or otherwise, under the Securities Act or otherwise (hereinafter referred to in this Section 7.12(c) as a “claim” and in the plural as “claims”) based upon, arising out of or resulting from any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which any Partnership Interests were registered under the Securities Act or any state securities or Blue Sky laws, in any preliminary prospectus (if used prior to the effective date of such registration statement), or in any summary or final prospectus or issuer free writing prospectus or in any amendment or supplement thereto (if used during the period the Partnership is required to keep the registration statement current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not misleading; provided, however, that the Partnership shall not be liable to any Indemnified Person to the extent that any such claim arises out of, is based upon or results from an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, such preliminary, summary or final prospectus or free writing prospectus or such amendment or supplement, in reliance upon and in conformity with written information furnished to the Partnership by or on behalf of such Indemnified Person specifically for use in the preparation thereof.

 

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(d) The provisions of Section 7.12(a) and Section 7.12(b) shall continue to be applicable with respect to the General Partner (and any of the General Partner’s Affiliates) after it ceases to be a general partner of the Partnership, during a period of two years subsequent to the effective date of such cessation and for so long thereafter as is required for the Holder to sell all of the Partnership Interests with respect to which it has requested during such two-year period inclusion in a registration statement otherwise filed or that a registration statement be filed; provided, however, that the Partnership shall not be required to file successive registration statements covering the same Partnership Interests for which registration was demanded during such two-year period. The provisions of Section 7.12(c) shall continue in effect thereafter.

(e) The rights to cause the Partnership to register Partnership Interests pursuant to this Section 7.12 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such Partnership Interests, provided (i) the Partnership is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the Partnership Interests with respect to which such registration rights are being assigned; and (ii) such transferee or assignee agrees in writing to be bound by and subject to the terms set forth in this Section 7.12.

(f) Any request to register Partnership Interests pursuant to this Section 7.12 shall (i) specify the Partnership Interests intended to be offered and sold by the Person making the request, (ii) express such Person’s present intent to offer such Partnership Interests for distribution, (iii) describe the nature or method of the proposed offer and sale of Partnership Interests, and (iv) contain the undertaking of such Person to provide all such information and materials and take all action as may be required in order to permit the Partnership to comply with all applicable requirements in connection with the registration of such Partnership Interests.

Section 7.13 Reliance by Third Parties. Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner and any officer of the General Partner authorized by the General Partner to act on behalf of and in the name of the Partnership has full power and authority to encumber, sell or otherwise use in any manner any and all assets of the Partnership and to enter into any authorized contracts on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner or any such officer as if it were the Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner, each other Person who acquires an interest in a Partnership Interest and each other Person bound by this Agreement hereby waives, to the fullest extent permitted by law, any and all defenses or other remedies that may be available to such Partner to contest, negate or disaffirm any action of the General Partner or any such officer in connection with any such dealing. In no event shall any Person dealing with the General Partner or any such officer or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the General Partner or any such officer or its representatives. Each and every certificate, document or other instrument executed on behalf of

 

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the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (a) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (b) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership and (c) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.

ARTICLE VIII

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 8.1 Records and Accounting. The General Partner shall keep or cause to be kept at the principal office of the Partnership appropriate books and records with respect to the Partnership’s business, including all books and records necessary to provide to the Limited Partners any information required to be provided pursuant to Section 3.4(a). Any books and records maintained by or on behalf of the Partnership in the regular course of its business, including the record of the Record Holders of Units or other Partnership Interests, books of account and records of Partnership proceedings, may be kept on, or be in the form of, computer disks, hard drives, magnetic tape, photographs, micrographics or any other information storage device; provided , that the books and records so maintained are convertible into clearly legible written form within a reasonable period of time. The books of the Partnership shall be maintained, for financial reporting purposes, on an accrual basis in accordance with U.S. GAAP. The Partnership shall not be required to keep books maintained on a cash basis and the General Partner shall be permitted to calculate cash-based measures, including Operating Surplus and Adjusted Operating Surplus, by making such adjustments to its accrual basis books to account for non-cash items and other adjustments as the General Partner determines to be necessary or appropriate.

Section 8.2 Fiscal Year. The fiscal year of the Partnership shall be a fiscal year ending December 31.

Section 8.3 Reports.

(a) Whether or not the Partnership is subject to the requirement to file reports with the Commission, as soon as practicable, but in no event later than 105 days after the close of each fiscal year of the Partnership, the General Partner shall cause to be mailed or made available, by any reasonable means, to each Record Holder of a Unit or other Partnership Interest as of a date selected by the General Partner, an annual report containing financial statements of the Partnership for such fiscal year of the Partnership, presented in accordance with U.S. GAAP, including a balance sheet and statements of operations, Partnership equity and cash flows, such statements to be audited by a firm of independent public accountants selected by the General Partner.

 

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(b) Whether or not the Partnership is subject to the requirement to file reports with the Commission, as soon as practicable, but in no event later than 50 days after the close of each Quarter except the last Quarter of each fiscal year, the General Partner shall cause to be mailed or made available, by any reasonable means to each Record Holder of a Unit or other Partnership Interest, as of a date selected by the General Partner, a report containing unaudited financial statements of the Partnership.

(c) The General Partner shall be deemed to have made a report available to each Record Holder as required by this Section 8.3 if it has either (i) filed such report with the Commission via its Electronic Data Gathering, Analysis and Retrieval system and such report is publicly available on such system or (ii) made such report available on any publicly available website maintained by the Partnership.

ARTICLE IX

TAX MATTERS

Section 9.1 Tax Returns and Information. The Partnership shall timely file all returns of the Partnership that are required for federal, state and local income tax purposes on the basis of the accrual method and the taxable period or year that it is required by law to adopt, from time to time, as determined by the General Partner. In the event the Partnership is required to use a taxable period other than a year ending on December 31, the General Partner shall use reasonable efforts to change the taxable period of the Partnership to a year ending on December 31. The tax information reasonably required by Record Holders for federal, state and local income tax reporting purposes with respect to a taxable period shall be furnished to them within 90 days of the close of the calendar year in which the Partnership’s taxable period ends. The classification, realization and recognition of income, gain, losses and deductions and other items shall be on the accrual method of accounting for U.S. federal income tax purposes.

Section 9.2 Tax Elections.

(a) The Partnership shall make the election under Section 754 of the Code in accordance with applicable regulations thereunder, subject to the reservation of the right to seek to revoke any such election upon the General Partner’s determination that such revocation is in the best interests of the Limited Partners. Notwithstanding any other provision herein contained, for the purposes of computing the adjustments under Section 743(b) of the Code, the General Partner shall be authorized (but not required) to adopt a convention whereby the price paid by a transferee of a Limited Partner Interest will be deemed to be the lowest quoted closing price of the Limited Partner Interests on any National Securities Exchange on which such Limited

 

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Partner Interests are listed or admitted to trading during the calendar month in which such transfer is deemed to occur pursuant to Section 6.2(f) without regard to the actual price paid by such transferee.

(b) Except as otherwise provided herein, the General Partner shall determine whether the Partnership should make any other elections permitted by the Code.

Section 9.3 Tax Controversies. Subject to the provisions hereof, the General Partner is designated as the Tax Matters Partner (as defined in the Code) and is authorized and required to represent the Partnership (at the Partnership’s expense) in connection with all examinations of the Partnership’s affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Partnership funds for professional services and costs associated therewith. Each Partner agrees to cooperate with the General Partner and to do or refrain from doing any or all things reasonably required by the General Partner to conduct such proceedings.

Section 9.4 Withholding; Tax Payments.

(a) The General Partner may treat taxes paid by the Partnership on behalf of, all or less than all of the Partners, either as a distribution of cash to such Partners or as a general expense of the Partnership, as determined appropriate under the circumstances by the General Partner.

(b) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that may be required to cause the Partnership and other Group Members to comply with any withholding requirements established under the Code or any other federal, state or local law including pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is required or elects to withhold and pay over to any taxing authority any amount resulting from the allocation or distribution of income or from a distribution to any Partner (including by reason of Section 1446 of the Code), the General Partner may treat the amount withheld as a distribution of cash pursuant to Section 6.3 in the amount of such withholding from such Partner.

ARTICLE X

ADMISSION OF PARTNERS

Section 10.1 Admission of Limited Partners.

(a) A Person shall be admitted as a Limited Partner and shall become bound by the terms of this Agreement if such Person purchases or otherwise lawfully acquires any Limited

 

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Partner Interest and becomes the Record Holder of such Limited Partner Interests in accordance with the provisions of Article IV or Article V hereof. Upon the issuance by the Partnership of Common Units, Subordinated Units and Incentive Distribution Rights to the Organizational Limited Partner and of Common Units to WRCLP as described in Article V, such parties will be automatically admitted to the Partnership as Initial Limited Partners in respect of the Common Units, Subordinated Units or Incentive Distribution Rights issued to them.

(b) By acceptance of the transfer of any Limited Partner Interests in accordance with Article IV or the acceptance of any Limited Partner Interests issued pursuant to Article V or pursuant to a merger or consolidation or conversion pursuant to Article XIV, and except as provided in Section 4.8, each transferee of, or other such Person acquiring, a Limited Partner Interest (including any nominee holder or an agent or representative acquiring such Limited Partner Interests for the account of another Person) (i) shall be admitted to the Partnership as a Limited Partner with respect to the Limited Partner Interests so transferred or issued to such Person when any such transfer or admission is reflected in the books and records of the Partnership and such Limited Partner becomes the Record Holder of the Limited Partner Interests so transferred, (ii) shall become bound, and shall be deemed to have agreed to be bound, by the terms of this Agreement, (iii) represents that the transferee or other recipient has the capacity, power and authority to enter into this Agreement and (iv) makes the consents, acknowledgements and waivers contained in this Agreement, all with or without execution of this Agreement by such Person. The transfer of any Limited Partner Interests and the admission of any new Limited Partner shall not constitute an amendment to this Agreement. A Person may become a Limited Partner or Record Holder of a Limited Partner Interest without the consent or approval of any of the Partners. A Person may not become a Limited Partner without acquiring a Limited Partner Interest and until such Person is reflected in the books and records of the Partnership as the Record Holder of such Limited Partner Interest. The rights and obligations of a Person who is an Ineligible Holder shall be determined in accordance with Section 4.8.

(c) The name and mailing address of each Record Holder shall be listed on the books and records of the Partnership maintained for such purpose by the Partnership or the Transfer Agent. The General Partner shall update the books and records of the Partnership from time to time as necessary to reflect accurately the information therein (or shall cause the Transfer Agent to do so, as applicable). A Limited Partner Interest may be represented by a Certificate, as provided in Section 4.1.

(d) Any transfer of a Limited Partner Interest shall not entitle the transferee to share in the profits and losses, to receive distributions, to receive allocations of income, gain, loss, deduction or credit or any similar item or to any other rights to which the transferor was entitled until the transferee becomes a Limited Partner pursuant to Section 10.1(b).

Section 10.2 Admission of Successor General Partner. A successor General Partner approved pursuant to Section 11.1 or Section 11.2 or the transferee of or successor to all of the General Partner Interest pursuant to Section 4.6 who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the

 

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General Partner, effective immediately prior to the withdrawal or removal of the predecessor or transferring General Partner, pursuant to Section 11.1 or 11.2 or the transfer of the General Partner Interest pursuant to Section 4.6, provided , however , that no such successor shall be admitted to the Partnership until compliance with the terms of Section 4.6 has occurred and such successor has executed and delivered such other documents or instruments as may be required to effect such admission. Any such successor shall, subject to the terms hereof, carry on the business of the members of the Partnership Group without dissolution.

Section 10.3 Amendment of Agreement and Certificate of Limited Partnership. To effect the admission to the Partnership of any Partner, the General Partner shall take all steps necessary or appropriate under the Delaware Act to amend the records of the Partnership to reflect such admission and, if necessary, to prepare as soon as practicable an amendment to this Agreement and, if required by law, the General Partner shall prepare and file an amendment to the Certificate of Limited Partnership.

ARTICLE XI

WITHDRAWAL OR REMOVAL OF PARTNERS

Section 11.1 Withdrawal of the General Partner.

(a) The General Partner shall be deemed to have withdrawn from the Partnership upon the occurrence of any one of the following events (each such event herein referred to as an “ Event of Withdrawal ”);

(i) The General Partner voluntarily withdraws from the Partnership by giving written notice to the other Partners;

(ii) The General Partner transfers all of its General Partner Interest pursuant to Section 4.6;

(iii) The General Partner is removed pursuant to Section 11.2;

(iv) The General Partner (A) makes a general assignment for the benefit of creditors; (B) files a voluntary bankruptcy petition for relief under Chapter 7 of the United States Bankruptcy Code; (C) files a petition or answer seeking for itself a liquidation, dissolution or similar relief (but not a reorganization) under any law; (D) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the General Partner in a proceeding of the type described in clauses (A)-(C) of this Section 11.1(a)(iv); or (E) seeks, consents to or acquiesces in the appointment of a trustee (but not a debtor-in-possession), receiver or liquidator of the General Partner or of all or any substantial part of its properties;

 

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(v) A final and non-appealable order of relief under Chapter 7 of the United States Bankruptcy Code is entered by a court with appropriate jurisdiction pursuant to a voluntary or involuntary petition by or against the General Partner; or

(vi) (A) if the General Partner is a corporation, a certificate of dissolution or its equivalent is filed for the General Partner, or 90 days expire after the date of notice to the General Partner of revocation of its charter without a reinstatement of its charter, under the laws of its state of incorporation; (B) if the General Partner is a partnership or a limited liability company, the dissolution and commencement of winding up of the General Partner; (C) if the General Partner is acting in such capacity by virtue of being a trustee of a trust, the termination of the trust; (D) if the General Partner is a natural person, his death or adjudication of incompetency; and (E) otherwise upon the termination of the General Partner.

If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or (vi)(A), (B), (C) or (E) occurs, the withdrawing General Partner shall give notice to the Limited Partners within 30 days after such occurrence. The Partners hereby agree that only the Events of Withdrawal described in this Section 11.1 shall result in the withdrawal of the General Partner from the Partnership.

(b) Withdrawal of the General Partner from the Partnership upon the occurrence of an Event of Withdrawal shall not constitute a breach of this Agreement under the following circumstances: (i) at any time during the period beginning on the Closing Date and ending at 11:59 pm, prevailing Central Time, on September 30, 2023, the General Partner voluntarily withdraws by giving at least 90 days’ advance notice of its intention to withdraw to the Limited Partners; provided , that prior to the effective date of such withdrawal, the withdrawal is approved by Unitholders holding at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates) and the General Partner delivers to the Partnership an Opinion of Counsel (“ Withdrawal Opinion of Counsel ”) that such withdrawal (following the selection of the successor General Partner) would not result in the loss of the limited liability under the Delaware Act of any Limited Partner or cause any Group Member to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for U.S. federal income tax purposes (to the extent not already so treated or taxed); (ii) at any time after 11:59 pm, prevailing Central Time, on September 30, 2023, the General Partner voluntarily withdraws by giving at least 90 days’ advance notice to the Unitholders, such withdrawal to take effect on the date specified in such notice; (iii) at any time that the General Partner ceases to be the General Partner pursuant to Section 11.1(a)(ii) or is removed pursuant to Section 11.2; or (iv) notwithstanding clause (i) of this sentence, at any time that the General Partner voluntarily withdraws by giving at least 90 days’ advance notice of its intention to withdraw to the Limited Partners, such withdrawal to take effect on the date specified in the notice, if at the time such notice is given one Person and its Affiliates (other than the General Partner and its Affiliates) own beneficially or of record or control at least 50% of the Outstanding Units. The withdrawal of the General Partner from the Partnership upon the occurrence of an Event of Withdrawal shall also constitute the withdrawal of the General Partner as general partner or managing member, if any, to the extent applicable, of the other Group Members. If the General Partner gives a notice of withdrawal pursuant to Section 11.1(a)(i), a Unit Majority, may, prior to the effective date of

 

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such withdrawal, elect a successor General Partner. The Person so elected as successor General Partner shall automatically become the successor general partner or managing member, to the extent applicable, of the other Group Members of which the General Partner is a general partner or a managing member. If, prior to the effective date of the General Partner’s withdrawal pursuant to Section 11.1(a)(i), a successor is not selected by the Unitholders as provided herein or the Partnership does not receive a Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance with Section 12.1 unless the business of the Partnership is continued pursuant to Section 12.2. Any successor General Partner elected in accordance with the terms of this Section 11.1 shall be subject to the provisions of Section 10.2.

Section 11.2 Removal of the General Partner. The General Partner may be removed if such removal is approved by the Unitholders holding at least 66 2/3% of the Outstanding Units (including Units held by the General Partner and its Affiliates) voting as a single class. Any such action by such holders for removal of the General Partner must also provide for the election of a successor General Partner by the Unitholders holding a majority of the Outstanding Common Units, voting as a class, and a majority of the Outstanding Subordinated Units, voting as a class (including, in each case, Units held by the General Partner and its Affiliates). Such removal shall be effective immediately following the admission of a successor General Partner pursuant to Section 10.2. The removal of the General Partner shall also automatically constitute the removal of the General Partner as general partner or managing member, to the extent applicable, of the other Group Members of which the General Partner is a general partner or a managing member. If a Person is elected as a successor General Partner in accordance with the terms of this Section 11.2, such Person shall, upon admission pursuant to Section 10.2, automatically become a successor general partner or managing member, to the extent applicable, of the other Group Members of which the General Partner is a general partner or a managing member. The right of the holders of Outstanding Units to remove the General Partner shall not exist or be exercised unless the Partnership has received an opinion opining as to the matters covered by a Withdrawal Opinion of Counsel. Any successor General Partner elected in accordance with the terms of this Section 11.2 shall be subject to the provisions of Section 10.2.

Section 11.3 Interest of Departing General Partner and Successor General Partner.

(a) In the event of (i) withdrawal of the General Partner under circumstances where such withdrawal does not violate this Agreement or (ii) removal of the General Partner by the holders of Outstanding Units under circumstances where Cause does not exist, if the successor General Partner is elected in accordance with the terms of Section 11.1 or Section 11.2, the Departing General Partner shall have the option, exercisable prior to the effective date of the withdrawal or removal of such Departing General Partner, to require its successor to purchase its General Partner Interest and its or its Affiliates’ general partner interest (or equivalent interest), if any, in the other Group Members and all of its or its Affiliates’ Incentive Distribution Rights (collectively, the “ Combined Interest ”) in exchange for an amount in cash equal to the fair

 

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market value of such Combined Interest, such amount to be determined and payable as of the effective date of its withdrawal or removal. If the General Partner is removed by the Unitholders under circumstances where Cause exists or if the General Partner withdraws under circumstances where such withdrawal violates this Agreement, and if a successor General Partner is elected in accordance with the terms of Section 11.1 or Section 11.2 (or if the business of the Partnership is continued pursuant to Section 12.2 and the successor General Partner is not the former General Partner), such successor shall have the option, exercisable prior to the effective date of the withdrawal or removal of such Departing General Partner (or, in the event the business of the Partnership is continued, prior to the date the business of the Partnership is continued), to purchase the Combined Interest for such fair market value of such Combined Interest. In either event, the Departing General Partner shall be entitled to receive all reimbursements due such Departing General Partner pursuant to Section 7.5, including any employee-related liabilities (including severance liabilities), incurred in connection with the termination of any employees employed by the Departing General Partner or its Affiliates (other than any Group Member) for the benefit of the Partnership or the other Group Members.

For purposes of this Section 11.3(a), the fair market value of the Combined Interest shall be determined by agreement between the Departing General Partner and its successor or, failing agreement within 30 days after the effective date of such Departing General Partner’s withdrawal or removal, by an independent investment banking firm or other independent expert selected by the Departing General Partner and its successor, which, in turn, may rely on other experts, and the determination of which shall be conclusive as to such matter. If such parties cannot agree upon one independent investment banking firm or other independent expert within 45 days after the effective date of such withdrawal or removal, then the Departing General Partner shall designate an independent investment banking firm or other independent expert, the Departing General Partner’s successor shall designate an independent investment banking firm or other independent expert, and such firms or experts shall mutually select a third independent investment banking firm or independent expert, which third independent investment banking firm or other independent expert shall determine the fair market value of the Combined Interest. In making its determination, such third independent investment banking firm or other independent expert may consider the value of the Units, including the then current trading price of Units on any National Securities Exchange on which Units are then listed or admitted to trading, the value of the Partnership’s assets, the rights and obligations of the Departing General Partner, the value of the Incentive Distribution Rights and the General Partner Interest and other factors it may deem relevant.

(b) If the Combined Interest is not purchased in the manner set forth in Section 11.3(a), the Departing General Partner (and its Affiliates, if applicable) shall become a Limited Partner and the Combined Interest shall be converted into Common Units pursuant to a valuation made by an investment banking firm or other independent expert selected pursuant to Section 11.3(a), without reduction in such Partnership Interest (but subject to proportionate dilution by reason of the admission of its successor). Any successor General Partner shall indemnify the Departing General Partner as to all debts and liabilities of the Partnership arising on or after the date on which the Departing General Partner becomes a Limited Partner. For purposes of this Agreement, conversion of the Combined Interest to Common Units will be characterized as if the Departing General Partner (and its Affiliates, if applicable) contributed the Combined Interest to the Partnership in exchange for the newly issued Common Units.

 

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(c) If a successor General Partner is elected in accordance with the terms of Section 11.1 or Section 11.2 (or if the business of the Partnership is continued pursuant to Section 12.2 and the successor General Partner is not the former General Partner) and the option described in Section 11.3(a) is not exercised by the party entitled to do so, the successor General Partner shall, at the effective date of its admission to the Partnership, contribute to the Partnership cash in the amount equal to the product of (x) the quotient obtained by dividing (A) the Percentage Interest of the General Partner Interest of the Departing General Partner by (B) a percentage equal to 100% less the Percentage Interest of the General Partner Interest of the Departing General Partner and (y) the Net Agreed Value of the Partnership’s assets on such date. In such event, such successor General Partner shall, subject to the following sentence, be entitled to its Percentage Interest of all Partnership allocations and distributions to which the Departing General Partner was entitled. In addition, the successor General Partner shall cause this Agreement to be amended to reflect that, from and after the date of such successor General Partner’s admission, the successor General Partner’s interest in all Partnership distributions and allocations shall be its Percentage Interest.

Section 11.4 Termination of Subordination Period, Conversion of Subordinated Units and Extinguishment of Cumulative Common Unit Arrearages. Notwithstanding any provision of this Agreement, if the General Partner is removed as general partner of the Partnership under circumstances where Cause does not exist:

(a) the Subordinated Units held by any Person will immediately and automatically convert into Common Units on a one-for-one basis, provided (i) neither such Person nor any of its Affiliates voted any of its Units in favor of the removal and (ii) such Person is not an Affiliate of the successor General Partner; and

(b) if all of the Subordinated Units convert into Common Units pursuant to Section 11.4(a), all Cumulative Common Unit Arrearages on the Common Units will be extinguished and the Subordination Period will end;

provided , however , that such converted Subordinated Units shall remain subject to the provisions of Section 5.5(c)(ii), Section 6.1(d)(x), Section 6.7(b) and Section 6.7(c).

Section 11.5 Withdrawal of Limited Partners. No Limited Partner shall have any right to withdraw from the Partnership; provided , however , that when a transferee of a Limited Partner’s Limited Partner Interest becomes a Record Holder of the Limited Partner Interest so transferred, such transferring Limited Partner shall cease to be a Limited Partner with respect to the Limited Partner Interest so transferred.

 

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ARTICLE XII

DISSOLUTION AND LIQUIDATION

Section 12.1 Dissolution. The Partnership shall not be dissolved by the admission of additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Upon the removal or withdrawal of the General Partner, if a successor General Partner is elected pursuant to Section 11.1, Section 11.2 or Section 12.2, the Partnership shall not be dissolved and such successor General Partner is hereby authorized to, and shall, continue the business of the Partnership. Subject to Section 12.2, the Partnership shall dissolve, and its affairs shall be wound up, upon:

(a) an Event of Withdrawal of the General Partner as provided in Section 11.1(a) (other than Section 11.1(a)(ii)), unless a successor is elected and such successor is admitted to the Partnership pursuant to this Agreement;

(b) an election to dissolve the Partnership by the General Partner that is approved by a Unit Majority;

(c) the entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Delaware Act; or

(d) at any time there are no Limited Partners, unless the Partnership is continued without dissolution in accordance with the Delaware Act.

Section 12.2 Continuation of the Business of the Partnership After Dissolution. Upon (a) an Event of Withdrawal caused by the withdrawal or removal of the General Partner as provided in Section 11.1(a)(i) or (iii) and the failure of the Partners to select a successor to such Departing General Partner pursuant to Section 11.1 or Section 11.2, then within 90 days thereafter, or (b) an event constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v) or (vi), then, to the maximum extent permitted by law, within 180 days thereafter, a Unit Majority may elect to continue the business of the Partnership on the same terms and conditions set forth in this Agreement by appointing as a successor General Partner a Person approved by a Unit Majority. Unless such an election is made within the applicable time period as set forth above, the Partnership shall conduct only activities necessary to wind up its affairs. If such an election is so made, then:

(i) the Partnership shall continue without dissolution unless earlier dissolved in accordance with this Article XII;

(ii) if the successor General Partner is not the former General Partner, then the interest of the former General Partner shall be treated in the manner provided in Section 11.3; and

 

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(iii) the successor General Partner shall be admitted to the Partnership as General Partner, effective as of the Event of Withdrawal, by agreeing in writing to be bound by this Agreement; provided , that the right of a Unit Majority to approve a successor General Partner and to continue the business of the Partnership shall not exist and may not be exercised unless the Partnership has received an Opinion of Counsel that (x) the exercise of the right would not result in the loss of limited liability under the Delaware Act of any Limited Partner and (y) neither the Partnership nor any Group Member would be treated as an association taxable as a corporation or otherwise be taxable as an entity for U.S. federal income tax purposes upon the exercise of such right to continue (to the extent not already so treated or taxed).

Section 12.3 Liquidator. Upon dissolution of the Partnership, unless the business of the Partnership is continued pursuant to Section 12.2, the General Partner shall select one or more Persons to act as Liquidator. The Liquidator (if other than the General Partner) shall be entitled to receive such compensation for its services as may be approved by holders of at least a majority of the Outstanding Common Units and Subordinated Units, voting as a single class. The Liquidator (if other than the General Partner) shall agree not to resign at any time without 15 days’ prior notice and may be removed at any time, with or without cause, by notice of removal approved by holders of at least a majority of the Outstanding Common Units and Subordinated Units, voting as a single class. Upon dissolution, removal or resignation of the Liquidator, a successor and substitute Liquidator (who shall have and succeed to all rights, powers and duties of the original Liquidator) shall within 30 days thereafter be approved by holders of at least a majority of the Outstanding Common Units and Subordinated Units, voting as a single class. The right to approve a successor or substitute Liquidator in the manner provided herein shall be deemed to refer also to any such successor or substitute Liquidator approved in the manner herein provided. Except as expressly provided in this Article XII, the Liquidator approved in the manner provided herein shall have and may exercise, without further authorization or consent of any of the parties hereto, all of the powers conferred upon the General Partner under the terms of this Agreement (but subject to all of the applicable limitations, contractual and otherwise, upon the exercise of such powers, other than the limitation on sale set forth in Section 7.4) necessary or appropriate to carry out the duties and functions of the Liquidator hereunder for and during the period of time required to complete the winding up and liquidation of the Partnership as provided for herein.

Section 12.4 Liquidation. The Liquidator shall proceed to dispose of the assets of the Partnership, discharge its liabilities, and otherwise wind up its affairs in such manner and over such period as determined by the Liquidator, subject to Section 17-804 of the Delaware Act and the following:

(a) The assets may be disposed of by public or private sale or by distribution in kind to one or more Partners on such terms as the Liquidator and such Partner or Partners may agree. If any property is distributed in kind, the Partner receiving the property shall be deemed for purposes of Section 12.4(c) to have received cash equal to its fair market value; and

 

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contemporaneously therewith, appropriate cash distributions must be made to the other Partners. The Liquidator may defer liquidation or distribution of the Partnership’s assets for a reasonable time if it determines that an immediate sale or distribution of all or some of the Partnership’s assets would be impractical or would cause undue loss to the Partners. The Liquidator may distribute the Partnership’s assets, in whole or in part, in kind if it determines that a sale would be impractical or would cause undue loss to the Partners.

(b) Liabilities of the Partnership include amounts owed to the Liquidator as compensation for serving in such capacity (subject to the terms of Section 12.3) and amounts to Partners otherwise than in respect of their distribution rights under Article VI. With respect to any liability that is contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidator shall either settle such claim for such amount as it thinks appropriate or establish a reserve of cash or other assets to provide for its payment. When paid, any unused portion of the reserve shall be distributed as additional liquidation proceeds.

(c) All property and all cash in excess of that required to discharge liabilities as provided in Section 12.4(b) shall be distributed to the Partners in accordance with, and to the extent of, the positive balances in their respective Capital Accounts, as determined after taking into account all Capital Account adjustments (other than those made by reason of distributions pursuant to this Section 12.4(c)) for the taxable period of the Partnership during which the liquidation of the Partnership occurs (with such date of occurrence being determined pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such taxable period (or, if later, within 90 days after said date of such occurrence).

Section 12.5 Cancellation of Certificate of Limited Partnership. Upon the completion of the distribution of Partnership cash and property as provided in Section 12.4 in connection with the liquidation of the Partnership, the Certificate of Limited Partnership and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the State of Delaware shall be canceled and such other actions as may be necessary to terminate the Partnership shall be taken.

Section 12.6 Return of Contributions. The General Partner shall not be personally liable for, and shall have no obligation to contribute or loan any monies or property to the Partnership to enable it to effectuate, the return of the Capital Contributions of the Limited Partners or Unitholders, or any portion thereof, it being expressly understood that any such return shall be made solely from Partnership assets.

Section 12.7 Waiver of Partition. To the maximum extent permitted by law, each Partner hereby waives any right to partition of the Partnership property.

 

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Section 12.8 Capital Account Restoration. No Limited Partner shall have any obligation to restore any negative balance in its Capital Account upon liquidation of the Partnership. The General Partner shall be obligated to restore any negative balance in its Capital Account upon liquidation of its interest in the Partnership by the end of the taxable period of the Partnership during which such liquidation occurs, or, if later, within 90 days after the date of such liquidation.

ARTICLE XIII

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

Section 13.1 Amendments to be Adopted Solely by the General Partner. Each Partner agrees that the General Partner, without the approval of any Partner, may amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file and record whatever documents may be required in connection therewith, to reflect:

(a) a change in the name of the Partnership, the location of the principal place of business of the Partnership, the registered agent of the Partnership or the registered office of the Partnership;

(b) admission, substitution, withdrawal or removal of Partners in accordance with this Agreement;

(c) a change that the General Partner determines to be necessary or appropriate to qualify or continue the qualification of the Partnership as a limited partnership or a partnership in which the Limited Partners have limited liability under the laws of any state or to ensure that the Group Members will not be treated as associations taxable as corporations or otherwise taxed as entities for U.S. federal income tax purposes;

(d) a change that the General Partner determines (i) does not adversely affect the Limited Partners (including any particular class of Partnership Interests as compared to other classes of Partnership Interests) in any material respect, (ii) to be necessary or appropriate to (A) satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state agency or judicial authority or contained in any federal or state statute (including the Delaware Act) or (B) facilitate the trading of the Units (including the division of any class or classes of Outstanding Units into different classes to facilitate uniformity of tax consequences within such classes of Units) or comply with any rule, regulation, guideline or requirement of any National Securities Exchange on which the Units are or will be listed or admitted to trading, (iii) to be necessary or appropriate in connection with action taken by the General Partner pursuant to Section 5.9 or (iv) is required to effect the intent expressed in the Registration Statement or the intent of the provisions of this Agreement or is otherwise contemplated by this Agreement;

(e) a change in the fiscal year or taxable period of the Partnership and any other changes that the General Partner determines to be necessary or appropriate as a result of a change in the fiscal year or taxable period of the Partnership including, if the General Partner shall so determine, a change in the definition of “Quarter” and the dates on which distributions are to be made by the Partnership;

 

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(f) an amendment that is necessary, in the Opinion of Counsel, to prevent the Partnership, or the General Partner or its directors, officers, trustees or agents from in any manner being subjected to the provisions of the Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940, as amended, or “plan asset” regulations adopted under the Employee Retirement Income Security Act of 1974, as amended, regardless of whether such are substantially similar to plan asset regulations currently applied or proposed by the United States Department of Labor;

(g) an amendment that the General Partner determines to be necessary or appropriate in connection with the creation, authorization or issuance of any class or series of Partnership Interests and Derivative Instruments pursuant to Section 5.6;

(h) any amendment expressly permitted in this Agreement to be made by the General Partner acting alone;

(i) an amendment effected, necessitated or contemplated by a Merger Agreement approved in accordance with Section 14.3;

(j) an amendment that the General Partner determines to be necessary or appropriate to reflect and account for the formation by the Partnership of, or investment by the Partnership in, any corporation, partnership, joint venture, limited liability company or other entity, in connection with the conduct by the Partnership of activities permitted by the terms of Section 2.4 or Section 7.1(a);

(k) a merger, conveyance or conversion pursuant to Section 14.3(d); or

(l) any other amendments substantially similar to the foregoing.

Section 13.2 Amendment Procedures. Amendments to this Agreement may be proposed only by the General Partner. To the fullest extent permitted by law, the General Partner shall have no duty or obligation to propose or approve any amendment to this Agreement and may decline to do so in its sole discretion, and, in declining to propose or approve an amendment, to the fullest extent permitted by law shall not be required to act in good faith or pursuant to any other standard imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation or at equity. An amendment shall be effective upon its approval by the General Partner and, except as otherwise provided by Section 13.1 or 13.3, a Unit Majority, unless a greater or different percentage is required under this Agreement or by Delaware law. Each proposed amendment that requires the approval of the holders of a specified percentage of Outstanding Units shall be set forth in a writing that contains the text of the proposed amendment. If such an amendment is proposed, the General Partner shall seek the written approval of the requisite percentage of Outstanding Units or call a meeting of the

 

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Unitholders to consider and vote on such proposed amendment. The General Partner shall notify all Record Holders upon final adoption of any amendments. The General Partner shall be deemed to have notified all Record Holders as required by this Section 13.2 if it has either (i) filed such amendment with the Commission via its Electronic Data Gathering, Analysis and Retrieval system and such amendment is publicly available on such system or (ii) made such amendment available on the Partnership’s website.

Section 13.3 Amendment Requirements.

(a) Notwithstanding the provisions of Section 13.1 (other than Section 13.1(d)(iv)) and Section 13.2, no provision of this Agreement (other than Section 11.2 or Section 13.4) that establishes a percentage of Outstanding Units (including Units deemed owned by the General Partner) or requires a vote or approval of Partners (or a subset of Partners) holding a specified Percentage Interest required to take any action shall be amended, altered, changed, repealed or rescinded in any respect that would have the effect of reducing or increasing such percentage, unless such amendment is approved by the written consent or the affirmative vote of holders of Outstanding Units whose aggregate Outstanding Units constitute not less than the voting requirement sought to be reduced or increased, as applicable, or the affirmative vote of Partners whose aggregate Percentage Interests constitute not less than the voting requirement sought to be reduced or increased, as applicable.

(b) Notwithstanding the provisions of Section 13.1 (other than Section 13.1(d)(iv)) and Section 13.2, no amendment to this Agreement may (i) enlarge the obligations of (including requiring any holder of a class of Partnership Interests to make additional Capital Contributions to the Partnership) any Limited Partner without its consent, unless such shall be deemed to have occurred as a result of an amendment approved pursuant to Section 13.3(c), or (ii) enlarge the obligations of, restrict, change or modify in any way any action by or rights of, or reduce in any way the amounts distributable, reimbursable or otherwise payable to, the General Partner or any of its Affiliates without its consent, which consent may be given or withheld at its option.

(c) Except as provided in Section 14.3 or Section 13.1, any amendment that would have a material adverse effect on the rights or preferences of any class of Partnership Interests in relation to other classes of Partnership Interests must be approved by the holders of not less than a majority of the Outstanding Partnership Interests of the class affected. If the General Partner determines an amendment does not satisfy the requirements of Section 13.1(d)(i) because it adversely affects one or more classes of Partnership Interests, as compared to other classes of Partnership Interests, in any material respect, such amendment shall only be required to be approved by the adversely affected class or classes.

(d) Notwithstanding any other provision of this Agreement, except for amendments pursuant to Section 13.1 and except as otherwise provided by Section 14.3(b), no amendments shall become effective without the approval of the holders of at least 90% of the Percentage Interests of all Limited Partners voting as a single class unless the Partnership obtains an Opinion of Counsel to the effect that such amendment will not affect the limited liability of any Limited Partner under applicable partnership law of the state under whose laws the Partnership is organized.

(e) Except as provided in Section 13.1, this Section 13.3 shall only be amended with the approval of Partners (including the General Partner and its Affiliates) holding at least 90% of the Percentage Interests of all Limited Partners.

 

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Section 13.4 Special Meetings. All acts of Limited Partners to be taken pursuant to this Agreement shall be taken in the manner provided in this Article XIII. Special meetings of the Limited Partners may be called by the General Partner or by Limited Partners owning 20% or more of the Outstanding Units of the class or classes for which a meeting is proposed. Limited Partners shall call a special meeting by delivering to the General Partner one or more requests in writing stating that the signing Limited Partners wish to call a special meeting and indicating the general or specific purposes for which the special meeting is to be called. Within 60 days after receipt of such a call from Limited Partners or within such greater time as may be reasonably necessary for the Partnership to comply with any statutes, rules, regulations, listing agreements or similar requirements governing the holding of a meeting or the solicitation of proxies for use at such a meeting, the General Partner shall send a notice of the meeting to the Limited Partners either directly or indirectly through the Transfer Agent. A meeting shall be held at a time and place determined by the General Partner on a date not less than 10 days nor more than 60 days after the time notice of the meeting is given as provided in Section 16.1. Limited Partners shall not vote on matters that would cause the Limited Partners to be deemed to be taking part in the management and control of the business and affairs of the Partnership so as to jeopardize the Limited Partners’ limited liability under the Delaware Act or the law of any other state in which the Partnership is qualified to do business.

Section 13.5 Notice of a Meeting. Notice of a meeting called pursuant to Section 13.4 shall be given to the Record Holders of the class or classes of Units for which a meeting is proposed in writing by mail or other means of written communication in accordance with Section 16.1. The notice shall be deemed to have been given at the time when deposited in the mail or sent by other means of written communication.

Section 13.6 Record Date. For purposes of determining the Limited Partners entitled to notice of or to vote at a meeting of the Limited Partners or to give approvals without a meeting as provided in Section 13.11 the General Partner may set a Record Date, which shall not be less than 10 nor more than 60 days before (a) the date of the meeting (unless such requirement conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange on which the Units are listed or admitted to trading or U.S. federal securities laws, in which case the rule, regulation, guideline or requirement of such National Securities Exchange or U.S. federal securities laws shall govern) or (b) in the event that approvals are sought without a meeting, the date by which

 

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Limited Partners are requested in writing by the General Partner to give such approvals. If the General Partner does not set a Record Date, then (a) the Record Date for determining the Limited Partners entitled to notice of or to vote at a meeting of the Limited Partners shall be the close of business on the day next preceding the day on which notice is given, and (b) the Record Date for determining the Limited Partners entitled to give approvals without a meeting shall be the date the first written approval is deposited with the Partnership in care of the General Partner in accordance with Section 13.11.

Section 13.7 Adjournment. Prior to the date upon which any meeting of Limited Partners is to be held, the General Partner may postpone such meeting one or more times for any reason by giving notice to each Limited Partner entitled to vote at the meeting so postponed of the place, date and hour at which such meeting would be held. Such notice shall be given not fewer than two days before the date of such meeting and otherwise in accordance with this Article XIII. When a meeting is postponed, a new Record Date need not be fixed unless such postponement shall be for more than 45 days. Any meeting of Limited Partners may be adjourned by the General Partner one or more times for any reason, including the failure of a quorum to be present at the meeting with respect to any proposal or the failure of any proposal to receive sufficient votes for approval. No Limited Partner vote shall be required for any adjournment. A meeting of Limited Partners may be adjourned by the General Partner as to one or more proposals regardless of whether action has been taken on other matters. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting and a new Record Date need not be fixed, if the time and place thereof are announced at the meeting at which the adjournment is taken, unless such adjournment shall be for more than 45 days. At the adjourned meeting, the Partnership may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 45 days or if a new Record Date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given in accordance with this Article XIII.

Section 13.8 Waiver of Notice; Approval of Meeting; Approval of Minutes. The transaction of business at any meeting of Limited Partners, however called and noticed, and whenever held, shall be as valid as if it had occurred at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy. Attendance of a Limited Partner at a meeting shall constitute a waiver of notice of the meeting, except when the Limited Partner attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened; and except that attendance at a meeting is not a waiver of any right to disapprove the consideration of matters required to be included in the notice of the meeting, but not so included, if the disapproval is expressly made at the meeting.

Section 13.9 Quorum and Voting. The holders of a majority, by Percentage Interest, of Partnership Interests of the class or classes for which a meeting has been called (including Partnership Interests deemed owned by the General Partner) represented in person or by proxy shall constitute a quorum at a meeting of

 

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Partners of such class or classes unless any such action by the Partners requires approval by holders of a greater Percentage Interest, in which case the quorum shall be such greater Percentage Interest. At any meeting of the Partners duly called and held in accordance with this Agreement at which a quorum is present, the act of Partners holding Partnership Interests that, in the aggregate, represent a majority of the Percentage Interest of those present in person or by proxy at such meeting shall be deemed to constitute the act of all Partners, unless a greater or different percentage is required with respect to such action under the provisions of this Agreement, in which case the act of the Partners holding Partnership Interests that in the aggregate represent at least such greater or different percentage shall be required; provided , however , that if, as a matter of law or amendment to this Agreement, approval by plurality vote of Partners (or any class thereof) is required to approve any action, no minimum quorum shall be required. The Partners present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough Partners to leave less than a quorum, if any action taken (other than adjournment) is approved by Partners holding the required Percentage Interest specified in this Agreement.

Section 13.10 Conduct of a Meeting. The General Partner shall have full power and authority concerning the manner of conducting any meeting of the Limited Partners or solicitation of approvals in writing, including the determination of Persons entitled to vote, the existence of a quorum, the satisfaction of the requirements of Section 13.4, the conduct of voting, the validity and effect of any proxies and the determination of any controversies, votes or challenges arising in connection with or during the meeting or voting. The General Partner shall designate a Person to serve as chairman of any meeting and shall further designate a Person to take the minutes of any meeting. All minutes shall be kept with the records of the Partnership maintained by the General Partner. The General Partner may make such other regulations consistent with applicable law and this Agreement as it may deem advisable concerning the conduct of any meeting of the Limited Partners or solicitation of approvals in writing, including regulations in regard to the appointment of proxies, the appointment and duties of inspectors of votes and approvals, the submission and examination of proxies and other evidence of the right to vote, and the revocation of approvals in writing.

Section 13.11 Action Without a Meeting. If authorized by the General Partner, any action that may be taken at a meeting of the Limited Partners may be taken without a meeting, without a vote and without prior notice, if an approval in writing setting forth the action so taken is signed by Limited Partners owning not less than the minimum percentage, by Percentage Interest, of the Partnership Interests of the class or classes for which a meeting has been called (including Partnership Interests deemed owned by the General Partner), as the case may be, that would be necessary to authorize or take such action at a meeting at which all the Limited Partners entitled to vote at such meeting were present and voted (unless such provision conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange on which the Units are listed or admitted to trading, in which case the rule, regulation, guideline or requirement of such National Securities Exchange shall govern). Prompt notice of the taking of action without a meeting shall be given to the Limited Partners

 

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who have not approved in writing. The General Partner may specify that any written ballot submitted to Limited Partners for the purpose of taking any action without a meeting shall be returned to the Partnership within the time period, which shall be not less than 20 days, specified by the General Partner. If a ballot returned to the Partnership does not vote all of the Partnership Interests held by the Limited Partners, the Partnership shall be deemed to have failed to receive a ballot for the Partnership Interests that were not voted. If approval of the taking of any action by the Limited Partners is solicited by any Person other than by or on behalf of the General Partner, the written approvals shall have no force and effect unless and until (a) they are deposited with the Partnership in care of the General Partner and (b) an Opinion of Counsel is delivered to the General Partner to the effect that the exercise of such right and the action proposed to be taken with respect to any particular matter (i) will not cause the Limited Partners to be deemed to be taking part in the management and control of the business and affairs of the Partnership so as to jeopardize the Limited Partners’ limited liability, and (ii) is otherwise permissible under the state statutes then governing the rights, duties and liabilities of the Partnership and the Partners. Nothing contained in this Section 13.11 shall be deemed to require the General Partner to solicit all Limited Partners in connection with a matter approved by the holders of the requisite percentage of Partnership Interests acting by written consent without a meeting.

Section 13.12 Right to Vote and Related Matters.

(a) Only those Record Holders of the Outstanding Partnership Interests on the Record Date set pursuant to Section 13.6 shall be entitled to notice of, and to vote at, a meeting of Limited Partners or to act with respect to matters as to which the holders of the Outstanding Partnership Interests have the right to vote or to act. All references in this Agreement to votes of, or other acts that may be taken by, the Outstanding Partnership Interests shall be deemed to be references to the votes or acts of the Record Holders of such Outstanding Partnership Interests.

(b) With respect to Partnership Interests that are held for a Person’s account by another Person (such as a broker, dealer, bank, trust company or clearing corporation, or an agent of any of the foregoing), in whose name such Partnership Interests are registered, such other Person shall, in exercising the voting rights in respect of such Partnership Interests on any matter, and unless the arrangement between such Persons provides otherwise, vote such Partnership Interests in favor of, and at the direction of, the Person who is the beneficial owner, and the Partnership shall be entitled to assume it is so acting without further inquiry. The provisions of this Section 13.12(b) (as well as all other provisions of this Agreement) are subject to the provisions of Section 4.3.

Section 13.13 Voting of Incentive Distribution Rights.

(a) For so long as a majority of the Incentive Distribution Rights are held by the General Partner and its Affiliates, the holders of the Incentive Distribution Rights shall not be entitled to vote such Incentive Distribution Rights on any Partnership matter except as may otherwise be required by law and the holders of the Incentive Distribution Rights, in their capacity as such, shall be deemed to have approved any matter approved by the General Partner.

 

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(b) If less than a majority of the Incentive Distribution Rights are held by the General Partner and its Affiliates, the Incentive Distribution Rights will be entitled to vote on all matters submitted to a vote of Unitholders, other than amendments and other matters that the General Partner determines do not adversely affect the holders of the Incentive Distribution Rights as a whole in any material respect. On any matter in which the holders of Incentive Distribution Rights are entitled to vote, such holders will vote together with the Subordinated Units, prior to the end of the Subordination Period, or together with the Common Units, thereafter, in either case as a single class except as otherwise required by Section 13.3(c), and such Incentive Distribution Rights shall be treated in all respects as Subordinated Units or Common Units, as applicable, when sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required by law), calculating required votes, determining the presence of a quorum or for other similar purposes under this Agreement. The relative voting power of the Incentive Distribution Rights and the Subordinated Units or Common Units, as applicable, will be set in the same proportion as cumulative cash distributions, if any, in respect of the Incentive Distribution Rights for the four consecutive Quarters prior to the record date for the vote bears to the cumulative cash distributions in respect of such class of Units for such four Quarters.

(c) In connection with any equity financing, or anticipated equity financing, by the Partnership of an Expansion Capital Expenditure, the General Partner may, without the approval of the holders of the Incentive Distribution Rights, temporarily or permanently reduce the amount of Incentive Distributions that would otherwise be distributed to such holders, provided that in the judgment of the General Partner, such reduction will be in the long-term best interest of such holders.

ARTICLE XIV

MERGER OR CONSOLIDATION

Section 14.1 Authority. The Partnership may merge or consolidate with or into one or more corporations, limited liability companies, statutory trusts or associations, real estate investment trusts, common law trusts or unincorporated businesses, including a partnership (whether general or limited (including a limited liability partnership)) or convert into any such entity, whether such entity is formed under the laws of the State of Delaware or any other state of the United States of America, pursuant to a written plan of merger or consolidation (“ Merger Agreement ”) in accordance with this Article XIV.

Section 14.2 Procedure for Merger or Consolidation

(a) . Merger or consolidation of the Partnership pursuant to this Article XIV requires the prior consent of the General Partner, provided , however , that, to the fullest extent permitted by law, the General Partner shall have no duty or obligation to consent to any merger or consolidation of the Partnership and may decline to do so free of any fiduciary duty or obligation whatsoever to the Partnership, any Limited Partner and, in declining to consent to a merger or consolidation, shall not be required to act in good faith or pursuant to any other standard imposed by this Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation or at equity.

 

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(b) If the General Partner shall determine to consent to the merger or consolidation, the General Partner shall approve the Merger Agreement, which shall set forth:

(i) the name and jurisdiction of formation or organization of each of the business entities proposing to merge or consolidate;

(ii) the name and jurisdiction of formation or organization of the business entity that is to survive the proposed merger or consolidation (the “ Surviving Business Entity ”);

(iii) the terms and conditions of the proposed merger or consolidation;

(iv) the manner and basis of exchanging or converting the equity interests of each constituent business entity for, or into, cash, property or interests, rights, securities or obligations of the Surviving Business Entity; and (i) if any interests, securities or rights of any constituent business entity are not to be exchanged or converted solely for, or into, cash, property or interests, rights, securities or obligations of the Surviving Business Entity, then the cash, property or interests, rights, securities or obligations of any general or limited partnership, corporation, trust, limited liability company, unincorporated business or other entity (other than the Surviving Business Entity) which the holders of such interests, securities or rights are to receive in exchange for, or upon conversion of their interests, securities or rights, and (ii) in the case of equity interests represented by certificates, upon the surrender of such certificates, which cash, property or interests, rights, securities or obligations of the Surviving Business Entity or any general or limited partnership, corporation, trust, limited liability company, unincorporated business or other entity (other than the Surviving Business Entity), or evidences thereof, are to be delivered;

(v) a statement of any changes in the constituent documents or the adoption of new constituent documents (the articles or certificate of incorporation, articles of trust, declaration of trust, certificate or agreement of limited partnership, certificate of formation or limited liability company agreement or other similar charter or governing document) of the Surviving Business Entity to be effected by such merger or consolidation;

(vi) the effective time of the merger, which may be the date of the filing of the certificate of merger pursuant to Section 14.4 or a later date specified in or determinable in accordance with the Merger Agreement ( provided , that if the effective time of the merger is to be later than the date of the filing of such certificate of merger, the effective time shall be fixed at a date or time certain and stated in the certificate of merger); and

(vii) such other provisions with respect to the proposed merger or consolidation that the General Partner determines to be necessary or appropriate.

 

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Section 14.3 Approval by Limited Partners.

(a) Except as provided in Section 14.3(d) and Section 14.3(e), the General Partner, upon its approval of the Merger Agreement shall direct that the Merger Agreement and the merger or consolidation contemplated thereby, as applicable, be submitted to a vote of Limited Partners, whether at a special meeting or by written consent, in either case in accordance with the requirements of Article XIII. A copy or a summary of the Merger Agreement, as the case may be, shall be included in or enclosed with the notice of a special meeting or the written consent.

(b) Except as provided in Sections 14.3(d) and 14.3(e), the Merger Agreement shall be approved upon receiving the affirmative vote or consent of the holders of a Unit Majority unless the Merger Agreement contains any provision that, if contained in an amendment to this Agreement, the provisions of this Agreement or the Delaware Act would require for its approval the vote or consent of a greater percentage of the Outstanding Units or of any class of Limited Partners, in which case such greater percentage vote or consent shall be required for approval of the Merger Agreement.

(c) Except as provided in Sections 14.3(d) and 14.3(e), after such approval by vote or consent of the Limited Partners, and at any time prior to the filing of the certificate of merger pursuant to Section 14.4, the merger or consolidation may be abandoned pursuant to provisions therefor, if any, set forth in the Merger Agreement.

(d) Notwithstanding anything else contained in this Article XIV or in this Agreement, the General Partner is permitted, without Limited Partner approval, to convert the Partnership or any Group Member into a new limited liability entity, to merge the Partnership or any Group Member into, or convey all of the Partnership’s assets to, another limited liability entity that shall be newly formed and shall have no assets, liabilities or operations at the time of such merger or conveyance other than those it receives from the Partnership or other Group Member if (i) the General Partner has received an Opinion of Counsel that the merger or conveyance, as the case may be, would not result in the loss of the limited liability under the Delaware Act of any Limited Partner or cause the Partnership or any Group Member to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for U.S. federal income tax purposes (to the extent not already treated as such), (ii) the sole purpose of such merger, or conveyance is to effect a mere change in the legal form of the Partnership into another limited liability entity and (iii) the General Partner determines that the governing instruments of the new entity provide the Limited Partners and the General Partner with substantially the same rights and obligations as are herein contained.

(e) Additionally, notwithstanding anything else contained in this Article XIV or in this Agreement, the General Partner is permitted, without Limited Partner approval, to merge or consolidate the Partnership with or into another entity if (A) the General Partner has received an Opinion of Counsel that the merger or consolidation, as the case may be, would not result in the loss of the limited liability under the Delaware Act of any Limited Partner or cause the Partnership or any Group Member to be treated as an association taxable as a corporation or

 

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otherwise to be taxed as an entity for U.S. federal income tax purposes (to the extent not already treated as such), (B) the merger or consolidation would not result in an amendment to this Agreement, other than any amendments that could be adopted pursuant to Section 13.1, (C) the Partnership is the Surviving Business Entity in such merger or consolidation, (D) each Partnership Interest outstanding immediately prior to the effective date of the merger or consolidation is to be an identical Partnership Interest of the Partnership after the effective date of the merger or consolidation, and (E) the number of Partnership Interests to be issued by the Partnership in such merger or consolidation does not exceed 20% of the Partnership Interests (other than Incentive Distribution Rights) Outstanding immediately prior to the effective date of such merger or consolidation.

(f) Pursuant to Section 17-211(g) of the Delaware Act, an agreement of merger or consolidation approved in accordance with this Article XIV may (a) effect any amendment to this Agreement or (b) effect the adoption of a new partnership agreement for the Partnership if it is the Surviving Business Entity. Any such amendment or adoption made pursuant to this Section 14.3 shall be effective at the effective time or date of the merger or consolidation.

Section 14.4 Certificate of Merger. Upon the required approval by the General Partner and the Unitholders of a Merger Agreement, a certificate of merger shall be executed and filed with the Secretary of State of the State of Delaware in conformity with the requirements of the Delaware Act.

Section 14.5 Effect of Merger or Consolidation.

(a) At the effective time of the certificate of merger:

(i) all of the rights, privileges and powers of each of the business entities that has merged or consolidated, and all property, real, personal and mixed, and all debts due to any of those business entities and all other things and causes of action belonging to each of those business entities, shall be vested in the Surviving Business Entity and after the merger or consolidation shall be the property of the Surviving Business Entity to the extent they were of each constituent business entity;

(ii) the title to any real property vested by deed or otherwise in any of those constituent business entities shall not revert and is not in any way impaired because of the merger or consolidation;

(iii) all rights of creditors and all liens on or security interests in property of any of those constituent business entities shall be preserved unimpaired; and

(iv) all debts, liabilities and duties of those constituent business entities shall attach to the Surviving Business Entity and may be enforced against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it.

 

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ARTICLE XV

RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS

Section 15.1 Right to Acquire Limited Partner Interests.

(a) Notwithstanding any other provision of this Agreement, if at any time the General Partner and its Affiliates hold more than 80% of the total Limited Partner Interests of any class then Outstanding, the General Partner shall then have the right, which right it may assign and transfer in whole or in part to the Partnership or any Affiliate of the General Partner, exercisable in its sole discretion, to purchase all, but not less than all, of such Limited Partner Interests of such class then Outstanding held by Persons other than the General Partner and its Affiliates, at the greater of (x) the Current Market Price as of the date three days prior to the date that the notice described in Section 15.1(b) is mailed and (y) the highest price paid by the General Partner or any of its Affiliates for any such Limited Partner Interest of such class purchased during the 90-day period preceding the date that the notice described in Section 15.1(b) is mailed.

(b) If the General Partner, any Affiliate of the General Partner or the Partnership elects to exercise the right to purchase Limited Partner Interests granted pursuant to Section 15.1(a), the General Partner shall deliver to the Transfer Agent notice of such election to purchase (the “ Notice of Election to Purchase ”) and shall cause the Transfer Agent to mail a copy of such Notice of Election to Purchase to the Record Holders of Limited Partner Interests of such class (as of a Record Date selected by the General Partner) at least 10, but not more than 60, days prior to the Purchase Date. Such Notice of Election to Purchase shall also filed and distributed as may be require by the Commission or any National Securities Exchange on which such Limited Partner Interests are listed. The Notice of Election to Purchase shall specify the Purchase Date and the price (determined in accordance with Section 15.1(a)) at which Limited Partner Interests will be purchased and state that the General Partner, its Affiliate or the Partnership, as the case may be, elects to purchase such Limited Partner Interests, upon surrender of Certificates representing such Limited Partner Interests in the case of Limited Partner Interests evidenced by Certificates, in exchange for payment, at such office or offices of the Transfer Agent as the Transfer Agent may specify, or as may be required by any National Securities Exchange on which such Limited Partner Interests are listed or admitted to trading. Any such Notice of Election to Purchase mailed to a Record Holder of Limited Partner Interests at his address as reflected in the records of the Transfer Agent shall be conclusively presumed to have been given regardless of whether the owner receives such notice. On or prior to the Purchase Date, the General Partner, its Affiliate or the Partnership, as the case may be, shall deposit with the Transfer Agent cash in an amount sufficient to pay the aggregate purchase price of all of such Limited Partner Interests to be purchased in accordance with this Section 15.1. If the Notice of Election to Purchase shall have been duly given as aforesaid at least 10 days prior to the Purchase Date, and if on or prior to the Purchase Date the deposit described in the preceding sentence has been made for the benefit of the holders of Limited Partner Interests subject to

 

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purchase as provided herein, then from and after the Purchase Date, notwithstanding that any Certificate shall not have been surrendered for purchase, all rights of the holders of such Limited Partner Interests shall thereupon cease, except the right to receive the purchase price (determined in accordance with Section 15.1(a)) for Limited Partner Interests therefor, without interest, upon surrender to the Transfer Agent of the Certificates representing such Limited Partner Interests in the case of Limited Partner Interests evidenced by Certificates, and such Limited Partner Interests shall thereupon be deemed to be transferred to the General Partner, its Affiliate or the Partnership, as the case may be, on the record books of the Transfer Agent and the Partnership, and the General Partner or any Affiliate of the General Partner, or the Partnership, as the case may be, shall be deemed to be the owner of all such Limited Partner Interests from and after the Purchase Date and shall have all rights as the owner of such Limited Partner Interests.

ARTICLE XVI

GENERAL PROVISIONS

Section 16.1 Addresses and Notices; Written Communications.

(a) Any notice, demand, request, report or proxy materials required or permitted to be given or made to a Partner under this Agreement shall be in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail or by other means of written communication to the Partner at the address described below. Any notice, payment or report to be given or made to a Partner hereunder shall be deemed conclusively to have been given or made, and the obligation to give such notice or report or to make such payment shall be deemed conclusively to have been fully satisfied, upon sending of such notice, payment or report to the Record Holder of such Partnership Interests at his address as shown on the records of the Transfer Agent or as otherwise shown on the records of the Partnership, regardless of any claim of any Person who may have an interest in such Partnership Interests by reason of any assignment or otherwise. Notwithstanding the foregoing, if (i) a Partner shall consent to receiving notices, demands, requests, reports or proxy materials via electronic mail or by the Internet or (ii) the rules of the Commission shall permit any report or proxy materials to be delivered electronically or made available via the Internet, any such notice, demand, request, report or proxy materials shall be deemed given or made when delivered or made available via such mode of delivery. An affidavit or certificate of making of any notice, payment or report in accordance with the provisions of this Section 16.1 executed by the General Partner, the Transfer Agent or the mailing organization shall be prima facie evidence of the giving or making of such notice, payment or report. If any notice, payment or report given or made in accordance with the provisions of this Section 16.1 is returned marked to indicate that such notice, payment or report was unable to be delivered, such notice, payment or report and, in the case of notices, payments or reports returned by the United States Postal Service (or other physical mail delivery mail service outside the United States of America), any subsequent notices, payments and reports shall be deemed to have been duly given or made without further mailing (until such time as such Record Holder or another Person notifies the Transfer Agent or the Partnership of a change

 

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in his address) or other delivery if they are available for the Partner at the principal office of the Partnership for a period of one year from the date of the giving or making of such notice, payment or report to the other Partners. Any notice to the Partnership shall be deemed given if received by the General Partner at the principal office of the Partnership designated pursuant to Section 2.3. The General Partner may rely and shall be protected in relying on any notice or other document from a Partner or other Person if believed by it to be genuine.

(b) The terms “in writing”, “written communications,” “written notice” and words of similar import shall be deemed satisfied under this Agreement by use of e-mail and other forms of electronic communication.

Section 16.2 Further Action. The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

Section 16.3 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.

Section 16.4 Integration. This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.

Section 16.5 Creditors. None of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership.

Section 16.6 Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach of any other covenant, duty, agreement or condition.

Section 16.7 Third-Party Beneficiaries. Each Partner agrees that (a) any Indemnitee shall be entitled to assert rights and remedies hereunder as a third-party beneficiary hereto with respect to those provisions of this Agreement affording a right, benefit or privilege to such Indemnitee and (b) any Unrestricted Person shall be entitled to assert rights and remedies hereunder as a third-party beneficiary hereto with respect to those provisions of this Agreement affording a right, benefit or privilege to such Unrestricted Person.

 

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Section 16.8 Counterparts. This Agreement may be executed in counterparts, all of which together shall constitute an agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto or, in the case of a Person acquiring a Limited Partner Interest, pursuant to Section 10.1(a) without execution hereof.

Section 16.9 Applicable Law; Forum; Venue and Jurisdiction; Waiver of Trial by Jury.

(a) This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.

(b) Each of the Partners and each Person holding any beneficial interest in the Partnership (whether through a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing or otherwise):

(i) irrevocably agrees that any claims, suits, actions or proceedings (A) arising out of or relating in any way to this Agreement (including any claims, suits or actions to interpret, apply or enforce the provisions of this Agreement or the duties, obligations or liabilities among Partners or of Partners to the Partnership, or the rights or powers of, or restrictions on, the Partners or the Partnership), (B) brought in a derivative manner on behalf of the Partnership, (C) asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of the Partnership or the General Partner, or owed by the General Partner, to the Partnership or the Partners, (D) asserting a claim arising pursuant to any provision of the Delaware Act or (E) asserting a claim governed by the internal affairs doctrine shall be exclusively brought in the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, any other court located in the State of Delaware with subject matter jurisdiction), in each case regardless of whether such claims, suits, actions or proceedings sound in contract, tort, fraud or otherwise, are based on common law, statutory, equitable, legal or other grounds, or are derivative or direct claims;

(ii) irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, any other court located in the State of Delaware with subject matter jurisdiction) in connection with any such claim, suit, action or proceeding;

(iii) agrees not to, and waives any right to, assert in any such claim, suit, action or proceeding that (A) it is not personally subject to the jurisdiction of the Court of Chancery of the State of Delaware or of any other court to which proceedings in the

 

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Court of Chancery of the State of Delaware may be appealed, (B) such claim, suit, action or proceeding is brought in an inconvenient forum, or (C) the venue of such claim, suit, action or proceeding is improper;

(iv) expressly waives any requirement for the posting of a bond by a party bringing such claim, suit, action or proceeding; and

(v) consents to process being served in any such claim, suit, action or proceeding by mailing, certified mail, return receipt requested, a copy thereof to such party at the address in effect for notices hereunder, and agrees that such services shall constitute good and sufficient service of process and notice thereof; provided , nothing in clause (v) hereof shall affect or limit any right to serve process in any other manner permitted by law.

Section 16.10 Invalidity of Provisions. If any provision or part of a provision of this Agreement is or becomes for any reason, invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions and/or parts thereof contained herein shall not be affected thereby and this Agreement shall, to the fullest extent permitted by law, be reformed and construed as if such invalid, illegal or unenforceable provision, or part of a provision, had never been contained herein, and such provision or part reformed so that it would be valid, legal and enforceable to the maximum extent possible.

Section 16.11 Consent of Partners. Each Partner hereby expressly consents and agrees that, whenever in this Agreement it is specified that an action may be taken upon the affirmative vote or consent of less than all of the Partners, such action may be so taken upon the concurrence of less than all of the Partners and each Partner shall be bound by the results of such action.

Section 16.12 Facsimile Signatures. The use of facsimile signatures affixed in the name and on behalf of the transfer agent and registrar of the Partnership on Certificates representing Units is expressly permitted by this Agreement.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

GENERAL PARTNER:
WESTERN REFINING LOGISTICS GP, LLC
By:  

/s/ Jeff A. Stevens

  Name:   Jeff A. Stevens
  Title:   President and Chief Executive Officer
By:  

/s/ Gary R. Dalke

  Name:   Gary R. Dalke
  Title:   Chief Financial Officer
ORGANIZATIONAL LIMITED PARTNER:
WESTERN REFINING SOUTHWEST, INC.
By:  

/s/ Jeff A. Stevens

  Name:   Jeff A. Stevens
  Title:   President and Chief Executive Officer
By:  

/s/ Gary R. Dalke

  Name:   Gary R. Dalke
  Title:   Chief Financial Officer

S IGNATURE P AGE

W ESTERN R EFINING L OGISTICS , LP

F IRST A MENDED AND R ESTATED A GREEMENT OF L IMITED P ARTNERSHIP


EXHIBIT A

to the First Amended and Restated

Agreement of Limited Partnership of

Western Refining Logistics, LP

Certificate Evidencing Common Units

Representing Limited Partner Interests in

Western Refining Logistics, LP

 

No.                          Common Units

In accordance with Section 4.1 of the First Amended and Restated Agreement of Limited Partnership of Western Refining Logistics, LP, as amended, supplemented or restated from time to time (the “ Partnership Agreement ”), Western Refining Logistics, LP, a Delaware limited partnership (the “ Partnership ”), hereby certifies that                                  (the “ Holder ”) is the registered owner of                  Common Units representing limited partner interests in the Partnership (the “ Common Units ”) transferable on the books of the Partnership, in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. The rights, preferences and limitations of the Common Units are set forth in, and this Certificate and the Common Units represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Partnership Agreement. Copies of the Partnership Agreement are on file, and will be furnished without charge on delivery of written request to the Partnership, at the principal office of the Partnership located at 123 W. Mills Avenue, El Paso, Texas 79901. Capitalized terms used herein but not defined shall have the meanings given them in the Partnership Agreement.

THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF WESTERN REFINING LOGISTICS, LP THAT THIS SECURITY MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IF SUCH TRANSFER WOULD (A) VIOLATE THE THEN APPLICABLE FEDERAL OR STATE SECURITIES LAWS OR RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER GOVERNMENTAL AUTHORITY WITH JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR QUALIFICATION OF WESTERN REFINING LOGISTICS, LP UNDER THE LAWS OF THE STATE OF DELAWARE, OR (C) CAUSE WESTERN REFINING LOGISTICS, LP TO BE TREATED AS AN ASSOCIATION TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED). WESTERN REFINING LOGISTICS GP, LLC, THE GENERAL PARTNER OF WESTERN REFINING LOGISTICS, LP, MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE TRANSFER OF THIS SECURITY IF IT DETERMINES, WITH THE ADVICE OF COUNSEL, THAT SUCH RESTRICTIONS ARE NECESSARY OR ADVISABLE (i) TO AVOID A SIGNIFICANT RISK OF WESTERN REFINING LOGISTICS, LP BECOMING TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY FOR U.S. FEDERAL INCOME TAX PURPOSES OR (ii) TO PRESERVE THE ECONOMIC UNIFORMITY OF THE LIMITED PARTNER INTERESTS (OR ANY CLASS OR CLASSES THEREOF). THE RESTRICTIONS SET FORTH ABOVE SHALL NOT

 

A-1


PRECLUDE THE SETTLEMENT OF ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED INTO THROUGH THE FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS SECURITY IS LISTED OR ADMITTED TO TRADING.

The Holder, by accepting this Certificate, (i) shall be admitted to the Partnership as a Limited Partner with respect to the Limited Partner Interests so transferred to such person when any such transfer or admission is reflected on the books and records of the Partnership and such Limited Partner becomes the Record Holder of the Limited Partner Interests so transferred, (ii) shall become bound by the terms of the Partnership Agreement, (iii) represents that the transferee has the capacity, power and authority to enter into the Partnership Agreement and (iv) makes the consents, acknowledgements and waivers contained in the Partnership Agreement, with or without the execution of the Partnership Agreement by the Holder.

This Certificate shall not be valid for any purpose unless it has been countersigned and registered by the Transfer Agent and Registrar.

 

Dated:  

 

    Western Refining Logistics, LP
Countersigned and Registered by:     By:   Western Refining Logistics GP, LLC
American Stock Transfer & Trust Company, LLC,     By:  

 

As Transfer Agent and Registrar      
      Name:  

 

       
      Title:  

 

       
      By:  

 

       
      Name:  

 

       
      Title:  

 

 

A-2


[ Reverse of Certificate ]

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as follows according to applicable laws or regulations:

 

TEN COM - as tenants in common    UNIF GIFT/TRANSFERS MIN ACT
TEN ENT - as tenants by the entireties     

 

  Custodian  

 

JT TEN -

 

as joint tenants with right of survivorship and not as tenants in common

        
     (Cust)  

(Minor)

     Under Uniform Gifts/Transfers to CD Minors Act
     (State)      

Additional abbreviations, though not in the above list, may also be used.

ASSIGNMENT OF COMMON UNITS OF

WESTERN REFINING LOGISTICS, LP

FOR VALUE RECEIVED,                  hereby assigns, conveys, sells and transfers unto

 

 

   

 

(Please print or typewrite name and address of assignee)     (Please insert Social Security or other identifying number of assignee)

 

                     Common Units representing limited partner interests evidenced by this Certificate, subject to the Partnership Agreement, and does hereby irrevocably constitute and appoint                  as its attorney-in-fact with full power of substitution to transfer the same on the books of Western Refining Logistics, LP

 

Date:

 

 

 

   

 

NOTE: The signature to any endorsement hereon must correspond with the name as written upon the face of this Certificate in every particular. without alteration, enlargement or change.

 

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15

 

   

 

 

(Signature)

 

 

(Signature)

 

A-3

Exhibit 3.3

 

 

 

FIRST AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

WESTERN REFINING LOGISTICS GP, LLC

 

 

 


TABLE OF CONTENTS

 

ARTICLE I   
DEFINITIONS   
Section 1.1  

Definitions

     1   
Section 1.2  

Construction

     3   
ARTICLE II   
ORGANIZATION   
Section 2.1  

Formation

     4   
Section 2.2  

Name

     4   
Section 2.3  

Registered Office; Registered Agent; Principal Office; Other Offices

     4   
Section 2.4  

Purpose and Business

     4   
Section 2.5  

Powers

     5   
Section 2.6  

Term

     5   
Section 2.7  

Title to Company Assets

     5   
ARTICLE III   
RIGHTS OF SOLE MEMBER   
Section 3.1  

Voting

     6   
Section 3.2  

Distribution

     6   
ARTICLE IV   
CAPITAL CONTRIBUTIONS; PREEMPTIVE RIGHTS;   
NATURE OF MEMBERSHIP INTEREST   
Section 4.1  

Initial Capital Contributions

     6   
Section 4.2  

Additional Capital Contributions

     6   
Section 4.3  

No Preemptive Rights

     6   
Section 4.4  

Fully Paid and Non-Assessable Nature of Membership Interests

     7   

ARTICLE V

  

MANAGEMENT AND OPERATION OF BUSINESS   
Section 5.1  

Establishment of the Board

     7   
Section 5.2  

The Board; Delegation of Authority and Duties

     7   
Section 5.3  

Term of Office

     8   
Section 5.4  

Meetings of the Board and Committees

     8   
Section 5.5  

Voting

     9   
Section 5.6  

Responsibility and Authority of the Board

     10   
Section 5.7  

Devotion of Time

     11   
Section 5.8  

Certificate of Formation

     11   
Section 5.9  

Benefit Plans

     11   
Section 5.10  

Indemnification

     12   
Section 5.11  

Liability of Indemnitees

     14   
Section 5.12  

Reliance by Third Parties

     14   
Section 5.13  

Other Business of Members

     15   

 

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ARTICLE VI   
OFFICERS   
Section 6.1  

Officers

     15   
Section 6.2  

Compensation

     17   
ARTICLE VII   
BOOKS, RECORDS, ACCOUNTING AND REPORTS   
Section 7.1  

Records and Accounting

     18   
Section 7.2  

Reports

     18   
Section 7.3  

Bank Accounts

     18   

ARTICLE VIII

  

DISSOLUTION AND LIQUIDATION

  

Section 8.1  

Dissolution

     19   
Section 8.2  

Effect of Dissolution

     19   
Section 8.3  

Application of Proceeds

     19   
ARTICLE IX   
GENERAL PROVISIONS   
Section 9.1  

Addresses and Notices

     20   
Section 9.2  

Creditors

     20   
Section 9.3  

Applicable Law

     20   
Section 9.4  

Invalidity of Provisions

     21   
Section 9.5  

Third Party Beneficiaries

     21   

 

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FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

OF

WESTERN REFINING LOGISTICS GP, LLC

THIS FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of Western Refining Logistics GP, LLC (the “ Company ”), dated as of October 16, 2013 is entered into by Western Refining Southwest, Inc., a Delaware corporation (“ WRSW ”), as sole member of the Company as of the date hereof (in such capacity, the “ Sole Member ”).

RECITALS :

WHEREAS , the Company was previously governed by that certain Limited Liability Company Agreement (the “ Original LLC Agreement ”) dated as of July 17, 2013.

WHEREAS , WRSW now desires to amend and restate the Original LLC Agreement in its entirety by executing this First Amended and Restated Limited Liability Company Agreement.

NOW THEREFORE , in consideration of the covenants, conditions and agreements contained herein, the Sole Member hereby enters into this Agreement:

ARTICLE I

DEFINITIONS

 

Section 1.1 Definitions .

The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

Act ” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq., as amended, supplemented or restated from time to time, and any successor to such statute.

Affiliate ” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

Agreement ” means this First Amended and Restated Limited Liability Company Agreement of Western Refining Logistics GP, LLC, as it may be amended, supplemented or restated from time to time. The Agreement constitutes a “ limited liability company agreement ” as such term is defined in the Act.

 

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Board ” has the meaning assigned to such term in Section 5.1 .

Capital Contribution ” means any cash, cash equivalents or the value of Contributed Property contributed to the Company.

Certificate of Formation ” means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware as referenced in Section 2.1 , as such Certificate of Formation may be amended, supplemented or restated from time to time.

Chairman ” has the meaning assigned to such term in Section 5.2(d) .

Company ” means Western Refining Logistics GP, LLC, a Delaware limited liability company, and any successors thereto.

Company Group ” means the Company and any Subsidiary of the Company, treated as a single consolidated entity.

Contributed Property ” means each property or other asset, in such form as may be permitted by the Act, but excluding cash, contributed to the Company.

Directors ” has the meaning assigned to such term in Section 5.1 .

Group Member ” means a member of the Company Group.

Indemnitee ” means (a) the Sole Member; (b) any Person who is or was an Affiliate of the Company; (c) any Person who is or was a manager, managing member, member, partner, director, officer, employee, agent, fiduciary or trustee of the Company, any Group Member or the Partnership; (d) any Person who is or was serving at the request of the Sole Member or any of its Affiliates as a manager, managing member, member, partner, director, officer, employee, agent, fiduciary or trustee of another Person owing a fiduciary or similar duty to any Group Member, in each case, acting in such capacity, provided , that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services; and (e) any Person the Company designates as an “Indemnitee” for purposes of this Agreement.

Independent Director ” has the meaning assigned to such term in Section 5.2(c)(ii) .

Initial Public Offering ” means the initial offering and sale of common units representing limited partner interests in the Partnership to the public.

Membership Interest ” means all of the Sole Member’s rights and interest in the Company in the Sole Member’s capacity as the Sole Member, all as provided in the Certificate of Formation, this Agreement and the Act.

Officers ” has the meaning given to such term in Section 6.1(a) .

Partnership ” means Western Refining Logistics, LP.

 

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Partnership Agreement ” means the Agreement of Limited Partnership of Western Refining Logistics, LP, as it may be amended, supplemented or restated from time to time.

Partnership Interest ” means an interest in the Partnership, which shall include any general partner interest and limited partner interests but shall exclude any options, rights, warrants and appreciation rights relating to an equity interest in the Partnership.

“Person ” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity .

Sole Member ” has the meaning assigned to such term in the introductory paragraph of this 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 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, directly or indirectly, at the date of determination or (c) any other Person 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 or other governing body of such Person.

WRSW ” has the meaning assigned to such term in the introductory paragraph of this Agreement.

 

Section 1.2 Construction .

(a) Unless the context requires otherwise: (i) capitalized terms used herein but not otherwise defined shall have the meanings assigned to such terms in the Partnership Agreement; (ii) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms; (iii) references to Articles and Sections refer to Articles and Sections of this Agreement; and (iv) the term “ include ” or “ includes ” means includes, without limitation, and “ including ” means including, without limitation.

(b) A reference to any Person includes such Person’s successors and permitted assigns.

 

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ARTICLE II

ORGANIZATION

 

Section 2.1 Formation .

On July 17, 2013, WRSW formed the Company as a limited liability company pursuant to the provisions of the Act by virtue of the filing of the Certificate of Formation with the Secretary of State of the State of Delaware.

 

Section 2.2 Name .

The name of the Company shall be “Western Refining Logistics GP, LLC”. The Company’s business may be conducted under any other name or names deemed necessary or appropriate by the Board in its discretion, including, if consented to by the Board, the name of the Partnership. The words “Limited Liability Company,” “L.L.C.” or “LLC” or similar words or letters shall be included in the Company’s name where necessary for the purpose of complying with the laws of any jurisdiction that so requires. The Board in its discretion may change the name of the Company at any time and from time to time and shall promptly notify the Sole Member of such change.

 

Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices .

Unless and until changed by the Board, the registered office of the Company in the State of Delaware shall be located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and the registered agent for service of process on the Company in the State of Delaware at such registered office shall be The Corporation Trust Company. The principal office of the Company shall be located at 123 W. Mills Avenue, El Paso, Texas 79901, or such other place as the Board may from time to time designate. The Company may maintain offices at such other place or places within or outside the State of Delaware as the Board deems necessary or appropriate.

 

Section 2.4 Purpose and Business .

The purpose and nature of the business to be conducted by the Company shall be to (a) serve as the general partner of the Partnership and, in connection therewith, to exercise all rights conferred upon the Company as the general partner of the Partnership in accordance with the Partnership Agreement; (b) engage directly in, or enter into or form any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any

 

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business activity that the Company is permitted to engage in and, in connection therewith, to exercise all of the rights and powers conferred upon the Company pursuant to the agreements relating to such business activity; (c) engage directly in, or enter into or form any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any business activity that is approved by the Sole Member and that lawfully may be conducted by a limited liability company organized pursuant to the Act and, in connection therewith, to exercise all of the rights and powers conferred upon the Company pursuant to the agreements relating to such business activity; (d) guarantee, mortgage, pledge or encumber any or all of its assets in connection with any indebtedness of any Affiliate of the Company and (e) do anything necessary or appropriate to the foregoing, including the making of capital contributions or loans to a Group Member, the Partnership or any Subsidiary of the Partnership.

 

Section 2.5 Powers .

The Company shall be empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described in Section 2.4 and for the protection and benefit of the Company.

 

Section 2.6 Term .

The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the Act and shall continue in existence in perpetuity or until the dissolution of the Company in accordance with the provisions of Article VIII . The existence of the Company as a separate legal entity shall continue until the cancellation of the Certificate of Formation as provided in the Act.

 

Section 2.7 Title to Company Assets .

Title to Company assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Company as an entity, and the Sole Member shall not have any ownership interest in such Company assets or any portion thereof.

 

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ARTICLE III

RIGHTS OF SOLE MEMBER

 

Section 3.1 Voting .

Unless otherwise granted to the Board by this Agreement, the Sole Member shall possess the entire voting interest in all matters relating to the Company, including the matters set forth in Sections 5.6(b) and 5.6(c) .

 

Section 3.2 Distributions .

Distributions by the Company of cash or other property shall be made to the Sole Member at such time as the Sole Member deems appropriate.

ARTICLE IV

CAPITAL CONTRIBUTIONS; PREEMPTIVE RIGHTS;

NATURE OF MEMBERSHIP INTEREST

 

Section 4.1 Initial Capital Contributions .

On July 17, 2013, in connection with the formation of the Company, the Sole Member made a contribution to the capital of the Company in the amount of $1,000 in exchange for all of the Membership Interests.

 

Section 4.2 Additional Capital Contributions .

The Sole Member shall not be obligated to make additional Capital Contributions to the Company.

 

Section 4.3 No Preemptive Rights .

No Person shall have preemptive, preferential or other similar rights with respect to: (a) additional Capital Contributions; (b) issuance or sale of any class or series of Membership Interests, whether unissued, held in the treasury or hereafter created; (c) issuance of any obligations, evidences of indebtedness or other securities of the Company convertible into or exchangeable for, or carrying or accompanied by any rights to receive, purchase or subscribe to, any such Membership Interests; (d) issuance of any right of subscription to or right to receive, or any warrant or option for the purchase of, any such Membership Interests; or (e) issuance or sale of any other securities that may be issued or sold by the Company.

 

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Section 4.4 Fully Paid and Non-Assessable Nature of Membership Interests .

All Membership Interests issued pursuant to, and in accordance with, the requirements of this Article IV shall be fully paid and non-assessable Membership Interests, except as such non-assessability may be affected by Section 18-607 of the Act.

ARTICLE V

MANAGEMENT AND OPERATION OF BUSINESS

 

Section 5.1 Establishment of the Board .

The number of directors (the “ Directors ”) constituting the board of directors of the Company (the “ Board ”) shall be at least three and not more than twelve, unless otherwise fixed from time to time pursuant to action by the Sole Member. The Directors shall be elected or approved by the Sole Member. The Directors shall serve as Directors of the Company for their term of office established pursuant to Section 5.3 .

 

Section 5.2 The Board; Delegation of Authority and Duties .

(a) Sole Members and Board . Except as otherwise provided in this Agreement, the business and affairs of the Company shall be managed under the direction of the Board, which shall possess all rights and powers which are possessed by “managers” under the Act and otherwise by applicable law, pursuant to Section 18-402 of the Act, subject to the provisions of this Agreement. Except as otherwise provided for herein, the Sole Member hereby consents to the exercise by the Board of all such powers and rights conferred on it by the Act or otherwise by applicable law with respect to the management and control of the Company.

(b) Delegation by the Board . The Board shall have the power and authority to delegate to one or more other Persons the Board’s rights and powers to manage and control the business and affairs of the Company, including delegating such rights and powers of the Board to agents and employees of the Company (including Officers). The Board may authorize any Person (including the Sole Member, or any Director or Officer) to enter into any document on behalf of the Company and perform the obligations of the Company thereunder.

(c) Committees .

(i) The Board may establish committees of the Board and may delegate any of its responsibilities to such committees.

(ii) Upon the closing of the Initial Public Offering, the Board shall have an audit committee that includes at least one Independent Director as of the closing date, at least two Directors within 90 days of such closing date and at least three Directors, all of whom shall be Independent Directors, within one year of such closing date. Such audit committee shall establish a written audit committee

 

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charter in accordance with the rules of the principal national securities exchange on which a class of Partnership Interests of the Partnership are listed or admitted to trading, as amended from time to time. “ Independent Director ” shall mean Directors meeting independence standards required of directors who serve on an audit committee of a board of directors established by the Securities Exchange Act of 1934 and the rules and regulations of the Securities and Exchange Commission thereunder and by the national securities exchange on which any class of Partnership Interests of the Partnership are listed or admitted to trading.

(d) Chairman of the Board . The Sole Member may appoint a chairman (the “ Chairman ”) of the Board. The Chairman of the Board, if appointed, shall be a member of the Board and shall preside at all meetings of the Board and of the partners of the Partnership. The Chairman of the Board shall not be an Officer by virtue of being the Chairman of the Board but may otherwise be an Officer. The Chairman of the Board may be removed either with or without cause at any time by the Sole Member. No removal or resignation as Chairman of the Board shall affect such Chairman’s status as a Director unless such person is also removed or resigns as a Director.

 

Section 5.3 Term of Office .

Once designated pursuant to Section 5.1 , a Director shall continue in office until the removal of such Director in accordance with the provisions of this Agreement or until the earlier death or resignation of such Director. Any Director may resign at any time by giving written notice of such Director’s resignation to the Board. Any such resignation shall take effect at the time the Board receives such notice or at any later effective time specified in such notice. Unless otherwise specified in such notice, the acceptance by the Board of such Director’s resignation shall not be necessary to make such resignation effective. Notwithstanding anything herein or under applicable law to the contrary, any Director may be removed at any time with or without cause by the Sole Member.

 

Section 5.4 Meetings of the Board and Committees .

(a) Meetings . The Board (or any committee of the Board) shall meet at such time and at such place as the Chairman of the Board (or the chairman of such committee) may designate. Written notice of all regular meetings of the Board (or any committee of the Board) must be given to all Directors (or all members of such committee) at least two days prior to the regular meeting of the Board (or such committee). Special meetings of the Board (or any committee of the Board) shall be held at the request of the Chairman, a majority of the Directors (or a majority of the members of such committee) or the Sole Member upon at least two days (if the meeting is to be held in person) or twenty-four hours (if the meeting is to be held telephonically) oral or written notice to the Directors (or the members of such committee) or

 

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upon such shorter notice as may be approved by the Directors (or the members of such committee), which approval may be given before or after the relevant meeting to which the notice relates. All notices and other communications to be given to Directors (or members of a committee) shall be sufficiently given for all purposes hereunder if in writing and delivered by hand, courier or overnight delivery service or three days after being mailed by certified or registered mail, return receipt requested, with appropriate postage prepaid, or when received in the form of a telegram, as an attachment to an electronic mail message or facsimile, and shall be directed to the address, electronic mail address or facsimile number as such Director (or member) shall designate by notice to the Company. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board (or committee) need be specified in the notice of such meeting. Any Director (or member of such committee) may waive the requirement of such notice as to such Director (or such member).

(b) Conduct of Meetings . Any meeting of the Board (or any committee of the Board) may be held in person or by telephone conference or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.

(c) Quorum . Fifty percent or more of all Directors (or members of a committee of the Board), present in person or participating in accordance with Section 5.4(b) , shall constitute a quorum for the transaction of business, but if at any meeting of the Board (or committee) there shall be less than a quorum present, a majority of the Directors (or members of a committee) present may adjourn the meeting without further notice. The Directors (or members of a committee) present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough Directors (or members of a committee) to leave less than a quorum; provided , however , that only the acts of the Directors (or members of a committee) meeting the requirements of Section 5.5 shall be deemed to be acts of the Board (or such committee).

 

Section 5.5 Voting .

Except as otherwise provided in this Agreement, the effectiveness of any vote, consent or other action of the Board (or any committee) in respect of any matter shall require either (i) the presence of a quorum and the affirmative vote of at least a majority of the Directors (or members of such committee) present or (ii) the written consent (in lieu of meeting) of the Directors (or members of such committee) having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting of the Board (or any committee) at which all Directors (or members of such committee) entitled to vote thereon were present and voted. Any Director may vote in person or by proxy (pursuant to a power of attorney) on any matter that is to be voted on by the Board at a meeting thereof.

 

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Section 5.6 Responsibility and Authority of the Board .

(a) General. Except as otherwise provided in this Agreement, the relative authority and functions of the Board, on the one hand, and the Officers, on the other hand, shall be identical to the relative authority and functions of the board of directors and officers, respectively, of a corporation organized under the General Corporation Law of the State of Delaware. The Officers shall be vested with such powers and duties as are set forth in Section 6.1 hereof and as are specified by the Board from time to time. Accordingly, except as otherwise specifically provided in this Agreement, the day-to-day activities of the Company shall be conducted on the Company’s behalf by the Officers who shall be agents of the Company. In addition to the powers and authorities expressly conferred on the Board by this Agreement, the Board may exercise all such powers of the Company and do all such acts and things as are not restricted by this Agreement, the Partnership Agreement, the Act or applicable law.

(b) Member Consent Required for Extraordinary Matters . Notwithstanding anything herein to the contrary, the Board will not take any action without approval of the Sole Member with respect to an extraordinary matter that would have, or would reasonably be expected to have, a material effect, directly or indirectly, on the Sole Member’s interests in the Company. The type of extraordinary matter referred to in the prior sentence which requires approval of the Sole Member shall include, but not be limited to, the following: (i) commencement of any action relating to bankruptcy, insolvency, reorganization or relief of debtors by the Company, the Partnership or a material Subsidiary thereof; (ii) a merger, consolidation, recapitalization or similar transaction involving the Company, the Partnership or a material Subsidiary thereof; (iii) a sale, exchange or other transfer not in the ordinary course of business of a substantial portion of the assets of the Partnership or a material Subsidiary of the Partnership, viewed on a consolidated basis, in one or a series of related transactions; (iv) dissolution or liquidation of the Company or the Partnership; and (v) a material amendment of the Partnership Agreement. An extraordinary matter will be deemed approved by the Sole Member if the Board receives a written, facsimile or electronic instruction evidencing such approval from the Sole Member or if a majority of the Directors that do not qualify as Independent Directors because of their affiliation with the Sole Member, approve such matter. To the fullest extent permitted by law, a Director, acting as such, shall have no duty, responsibility or liability to the Sole Member with respect to any action by the Board approved by the Sole Member.

(c) Member-Managed Decisions .

Notwithstanding anything herein to the contrary, the Sole Member shall have exclusive authority over the internal business and affairs of the Company that do not relate to management and control of the Partnership and its subsidiaries. For illustrative purposes, the internal business and affairs of the Company where the Sole Member shall have exclusive authority include (i) the amount and timing of distributions paid by the Company, (ii) the issuance or repurchase of any equity interests in the Company, (iii) the prosecution, settlement or management of any claim made directly against the Company, (iv) the decision to sell, convey, transfer or pledge any asset of the Company, (v) the decision to amend, modify or waive any rights relating to the assets of

 

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the Company and (vi) the decision to enter into any agreement to incur an obligation of the Company other than an agreement entered into for and on behalf of the Partnership for which the Company is liable exclusively by virtue of the Company’s capacity as general partner of the Partnership or of any of its Affiliates.

In addition, notwithstanding anything herein to the contrary, the Sole Member shall have exclusive authority to cause the Company to exercise the rights of the Company as general partner of the Partnership (or those exercisable after the Company ceases to be the general partner of the Partnership) where (a) the Company makes a determination or takes or declines to take any other action in its individual capacity under the Partnership Agreement or (b) where the Partnership Agreement permits the Company to make a determination or take or decline to take any other action in its sole discretion. For illustrative purposes, a list of provisions where the Company would be acting in its individual capacity or is permitted to act in its sole discretion is contained in Appendix A hereto.

 

Section 5.7 Devotion of Time .

The Directors shall not be obligated and shall not be expected to devote all of their time or business efforts to the affairs of the Company (except, to the extent appropriate, in their capacity as officers or as employees of the Company or any Affiliate of the Company).

 

Section 5.8 Certificate of Formation .

WRSW caused the Certificate of Formation to be filed with the Secretary of State of the State of Delaware as required by the Act and certain other certificates or documents it determined in its discretion to be necessary or appropriate for the qualification and operation of the Company in certain other states. The Board shall use all reasonable efforts to cause to be filed such additional certificates or documents as may be determined by the Board to be necessary or appropriate for the formation, continuation, qualification and operation of a limited liability company in the State of Delaware or any other state in which the Company may elect to do business or own property. To the extent that such action is determined by the Board to be necessary or appropriate, the Board shall cause the Officers to file amendments to and restatements of the Certificate of Formation and do all things to maintain the Company as a limited liability company under the laws of the State of Delaware or of any other state in which the Company may elect to do business or own property.

 

Section 5.9 Benefit Plans .

The Board may propose and adopt on behalf of the Company employee benefit plans, employee programs and employee practices, or cause the Company to issue interests of the

 

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Company (or to exercise its authority to cause the Partnership to issue Partnership Interests), in connection with or pursuant to any employee benefit plan, employee program or employee practice maintained or sponsored by any Group Member or any Affiliate thereof, in each case for the benefit of employees of the Company, any Group Member or any Affiliate thereof, or any of them, in respect of services performed, directly or indirectly, for the benefit of any Group Member.

 

Section 5.10 Indemnification .

(a) To the fullest extent permitted by law but subject to the limitations expressly provided in this Agreement, all Indemnitees shall be indemnified and held harmless by the Company from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all threatened, pending or completed claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, and whether formal or informal and including appeals, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee and acting (or refraining to act) in such capacity on behalf of or for the benefit of the Company; provided , that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 5.10 , the Indemnitee acted in bad faith or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful. Any indemnification pursuant to this Section 5.10 shall be made only out of the assets of the Company, it being agreed that the Sole Member shall not be personally liable for such indemnification and shall have no obligation to contribute or loan any monies or property to the Company to enable it to effectuate such indemnification.

(b) To the fullest extent permitted by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to Section 5.10(a) in appearing at, participating in or defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 5.10 , that the Indemnitee is not entitled to be indemnified upon receipt by the Company of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be ultimately determined that the Indemnitee is not entitled to be indemnified as authorized by this Section 5.10 .

(c) The indemnification provided by this Section 5.10 shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, as a matter of law, in equity or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity, and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.

 

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(d) The Company may purchase and maintain (or reimburse the Sole Member or its Affiliates for the cost of) insurance, on behalf of the Directors, the Officers, the Sole Member, its Affiliates, the Indemnitees and such other Persons as the Sole Member shall determine, against any liability that may be asserted against, or expense that may be incurred by, such Person in connection with the Company’s activities or such Person’s activities on behalf of the Company, regardless of whether the Company would have the power to indemnify such Person against such liability under the provisions of this Agreement.

(e) For purposes of this Section 5.10 , the Company shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Company also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning of Section 5.10(a) ; and action taken or omitted by an Indemnitee with respect to any employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the best interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that is in the best interests of the Company.

(f) An Indemnitee shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any person or entity (including any other Indemnitee and any expert or advisor retained by or on behalf of the Company or the Board) as to matters the Indemnitee reasonably believes to be within such other person’s or entity’s professional or expert competence.

(g) In no event may an Indemnitee subject the Sole Member to personal liability by reason of the indemnification provisions set forth in this Agreement.

(h) An Indemnitee shall not be denied indemnification in whole or in part under this Section 5.10 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

(i) The provisions of this Section 5.10 are for the benefit of the Indemnitees and their heirs, successors, assigns, executors and administrators and shall not be deemed to create any rights for the benefit of any other Persons.

(j) No amendment, modification or repeal of this Section 5.10 shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Company, nor the obligations of the Company to indemnify any such Indemnitee under and in accordance with the provisions of this Section 5.10 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

 

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Section 5.11 Liability of Indemnitees .

(a) Notwithstanding anything to the contrary set forth in this Agreement or the Partnership Agreement, no Indemnitee shall be liable for monetary damages to the Company, the Sole Member or any other Persons who have acquired interests in the Company, for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was criminal.

(b) To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Company or to the Sole Member and any other Indemnitee acting in connection with the Company’s business or affairs shall not be liable to the Company, the Sole Member or any other Indemnitee for its good faith reliance on the provisions of this Agreement.

(c) Any amendment, modification or repeal of this Section 5.11 shall be prospective only and shall not in any way affect the limitations on the liability of the Indemnitees under this Section 5.11 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

 

Section 5.12 Reliance by Third Parties .

Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Company shall be entitled to assume that any Officer authorized by the Board to act for and on behalf of and in the name of the Company has full power and authority to encumber, sell or otherwise use in any manner any and all assets of the Company and to enter into any authorized contracts on behalf of the Company, and such Person shall be entitled to deal with any such Officer as if it were the Company’s sole party in interest, both legally and beneficially. The Sole Member hereby waives any and all defenses or other remedies that may be available against such Person to contest, negate or disaffirm any action of any such Officer in connection with any such dealing. In no event shall any Person dealing with any such Officer or its representatives be obligated to ascertain that the terms of the Agreement have been complied with or to inquire into the necessity or expedience of any act or action of any such Officer or its representatives. Each

 

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and every certificate, document or other instrument executed on behalf of the Company by any Officer authorized by the Board shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (a) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (b) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of and in the name of the Company and (c) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Company.

 

Section 5.13 Other Business of Members .

(a) Existing Business Ventures . The Sole Member, each Director and their respective affiliates may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Company or the Partnership, and the Company, the Partnership, the Directors and the Sole Member shall have no rights by virtue of this Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Company or the Partnership, shall not be deemed wrongful or improper.

(b) Business Opportunities . None of the Sole Member, any Director or any of their respective affiliates shall be obligated to present any particular investment opportunity to the Company or the Partnership even if such opportunity is of a character that the Company, the Partnership or any of their respective subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and the Sole Member, each Director or any of their respective affiliates shall have the right to take for such person’s own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment opportunity.

ARTICLE VI

OFFICERS

 

Section 6.1 Officers .

(a) Generally . The Board shall appoint agents of the Company, referred to as “ Officers ” of the Company as described in this Section 6.1 , who shall be responsible for the day-to-day business affairs of the Company, subject to the overall direction and control of the Board. Unless provided otherwise by the Board, the Officers shall have the titles, power, authority and duties described below in this Section 6.1 .

(b) Titles and Number . The Officers shall be one or more Presidents, any and all Vice Presidents, the Secretary and any and all Assistant Secretaries and any Treasurer and any

 

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and all Assistant Treasurers and any other Officers appointed pursuant to this Section 6.1 . There shall be appointed from time to time, in accordance with this Section 6.1 , such Vice Presidents, Secretaries, Assistant Secretaries, Treasurers and Assistant Treasurers as the Board may desire. Any Person may hold two or more offices.

(i) President/Chief Executive Officer . The Board shall elect one or more individuals to serve, subject to the direction and supervision of the Board, as the President and/or Chief Executive Officer of the Company and shall have general and active management and control of the affairs and business and general supervision of the Company, and the Partnership and its subsidiaries, and its officers, agents and employees, and shall perform all duties incident to the office of chief executive officer of the Company and such other duties as may be prescribed from time to time by the Board. Each President and/or Chief Executive Officer shall have the nonexclusive authority to sign on behalf of the Company any deeds, mortgages, leases, bonds, notes, certificates, contracts or other instruments, except in cases where the execution thereof shall be expressly delegated by the Board or by this Agreement to some other Officer or agent of the Company or shall be required by law to be otherwise executed. In the absence of the Chairman, or the Vice Chairman, if there is one, or in the event of the Chairman’s inability or refusal to act, a President and/or Chief Executive Officer shall perform the duties of the Chairman, and each President and/or Chief Executive Officer, when so acting, shall have all of the powers of the Chairman.

(ii) Vice Presidents . The Board, in its discretion, may elect one or more Vice Presidents. In the absence of any President and Chief Executive Officer or in the event of a President’s or Chief Executive Officer’s inability or refusal to act, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of a President and/or Chief Executive Officer, and the Vice President, when so acting, shall have all of the powers and be subject to all the restrictions upon a President and/or Chief Executive Officer. Each Vice President shall perform such other duties as from time to time may be assigned by a President and/or Chief Executive Officer or the Board.

(iii) Secretary and Assistant Secretaries . The Board, in its discretion, may elect a Secretary and one or more Assistant Secretaries. The Secretary shall record or cause to be recorded in books provided for that purpose the minutes of the meetings or actions of the Board, of the Sole Member and of the partners of the Partnership, shall see that all notices are duly given in accordance with the provisions of this Agreement and as required by law, shall be custodian of all records (other than financial), shall see that the books, reports, statements, certificates and all other documents and records required by law are properly kept and filed, and, in general, shall perform all duties incident to the office of Secretary and such other duties as may, from time to time, be assigned to

 

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him by this Agreement, the Board or a President. The Assistant Secretaries shall exercise the powers of the Secretary during that Officer’s absence or inability or refusal to act.

(iv) Treasurer and Assistant Treasurers . The Board, in its discretion, may elect a Treasurer and one or more Assistant Treasurers. The Treasurer shall keep or cause to be kept the books of account of the Company and shall render statements of the financial affairs of the Company in such form and as often as required by this Agreement, the Board or a President. The Treasurer, subject to the order of the Board, shall have the custody of all funds and securities of the Company. The Treasurer shall perform all other duties commonly incident to his office and shall perform such other duties and have such other powers as this Agreement, the Board or a President, shall designate from time to time. The Assistant Treasurers shall exercise the power of the Treasurer during that Officer’s absence or inability or refusal to act. Each of the Assistant Treasurers shall possess the same power as the Treasurer to sign all certificates, contracts, obligations and other instruments of the Company. If no Treasurer or Assistant Treasurer is appointed and serving or in the absence of the appointed Treasurer and Assistant Treasurer, a President or such other Officer as the Board shall select, shall have the powers and duties conferred upon the Treasurer.

(c) Other Officers and Agents . The Board may appoint such other Officers and agents as may from time to time appear to be necessary or advisable in the conduct of the affairs of the Company, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board.

(d) Appointment and Term of Office . The Officers shall be appointed by the Board at such time and for such terms as the Board shall determine. Any Officer may be removed, with or without cause, only by the Board. Vacancies in any office may be filled only by the Board.

(e) Powers of Attorney . The Board may grant powers of attorney or other authority as appropriate to establish and evidence the authority of the Officers and other Persons.

(f) Officers’ Delegation of Authority . Unless otherwise provided by resolution of the Board, no Officer shall have the power or authority to delegate to any Person such Officer’s rights and powers as an Officer to manage the business and affairs of the Company.

 

Section 6.2 Compensation .

The Officers shall receive such compensation for their services as may be designated by the Board or any committee thereof established for the purpose of setting compensation.

 

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ARTICLE VII

BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 7.1 Records and Accounting .

The Board shall keep or cause to be kept at the principal office of the Company appropriate books and records with respect to the Company’s business. The books of account of the Company shall be (i) maintained on the basis of a fiscal year that is the calendar year and (ii) maintained on an accrual basis in accordance with U.S. generally accepted accounting principles, consistently applied.

 

Section 7.2 Reports .

With respect to each calendar year, the Board shall prepare, or cause to be prepared, and deliver, or cause to be delivered, to the Sole Member:

(a) Within 120 days after the end of such calendar year, a profit and loss statement and a statement of cash flows for such year and a balance sheet as of the end of such year.

(b) Such federal, state and local income tax returns and such other accounting, tax information and schedules as shall be necessary for the preparation by the Sole Member on or before June 15 following the end of each calendar year of its income tax return with respect to such year.

 

Section 7.3 Bank Accounts .

Funds of the Company shall be deposited in such banks or other depositories as shall be designated from time to time by the Board. All withdrawals from any such depository shall be made only as authorized by the Board and shall be made only by check, wire transfer, debit memorandum or other written instruction.

 

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ARTICLE VIII

DISSOLUTION AND LIQUIDATION

 

Section 8.1 Dissolution .

(a) The Company shall be of perpetual duration; however, the Company shall dissolve, and its affairs shall be wound up, upon:

(i) an election to dissolve the Company by the Sole Member;

(ii) the entry of a decree of judicial dissolution of the Company pursuant to the provisions of the Act; or

(iii) a merger or consolidation under the Act where the Company is not the surviving entity in such merger or consolidation.

(b) No other event shall cause a dissolution of the Company.

 

Section 8.2 Effect of Dissolution .

Except as otherwise provided in this Agreement, upon the dissolution of the Company, the Sole Member shall take such actions as may be required pursuant to the Act and shall proceed to wind up, liquidate and terminate the business and affairs of the Company. In connection with such winding up, the Sole Member shall have the authority to liquidate and reduce to cash (to the extent necessary or appropriate) the assets of the Company as promptly as is consistent with obtaining fair value therefor, to apply and distribute the proceeds of such liquidation and any remaining assets in accordance with the provisions of Section 8.3 , and to do any and all acts and things authorized by, and in accordance with, the Act and other applicable laws for the purpose of winding up and liquidation.

 

Section 8.3 Application of Proceeds .

Upon dissolution and liquidation of the Company, the assets of the Company shall be applied and distributed in the following order of priority:

(a) First, to the payment of debts and liabilities of the Company (including to the Sole Member to the extent permitted by applicable law) and the expenses of liquidation;

(b) Second, to the setting up of such reserves as the Person required or authorized by law to wind up the Company’s affairs may reasonably deem necessary or appropriate for any disputed, contingent or unforeseen liabilities or obligations of the Company, provided that any such reserves shall be paid over by such Person to an escrow agent appointed by the Sole Member, to be held by such agent or its successor for such period as such Person shall deem advisable for the purpose of applying such reserves to the payment of such liabilities or obligations and, at the expiration of such period, the balance of such reserves, if any, shall be distributed as hereinafter provided; and

(c) Thereafter, the remainder to the Sole Member.

 

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ARTICLE IX

GENERAL PROVISIONS

 

Section 9.1 Addresses and Notices .

Any notice, demand, request, report or proxy materials required or permitted to be given or made to the Sole Member under this Agreement shall be in writing and shall be deemed given or made when delivered in person, when received by electronic message or facsimile or when sent by first class United States mail or by other means of written communication to the Sole Member at the address described below. Any notice to the Company shall be deemed given if received by a President at the principal office of the Company designated pursuant to Section 2.3 . The Company may rely and shall be protected in relying on any notice or other document from the Sole Member or other Person if believed by it to be genuine.

If to the Sole Member:

Western Refining Southwest, Inc.

123 W. Mills Avenue

El Paso, TX 79901

Attention: General Counsel

Facsimile: (602) 683-5701

E-mail: lbarfield@wnr.com

 

Section 9.2 Creditors .

None of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Company.

 

Section 9.3 Applicable Law .

This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.

 

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Section 9.4 Invalidity of Provisions .

If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

 

Section 9.5 Third Party Beneficiaries .

The Sole Member agrees that any Indemnitee shall be entitled to assert rights and remedies hereunder as a third-party beneficiary hereto with respect to those provisions of this Agreement affording a right, benefit or privilege to such Indemnitee.

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IN WITNESS WHEREOF, the Sole Member has executed this Agreement as of the date first written above.

 

WESTERN REFINING SOUTHWEST, INC.
  By:  

/s/ Jeff A. Stevens

    Name:   Jeff A. Stevens
    Title:   President and Chief Executive Officer
  By:  

/s/ Gary R. Dalke

    Name:   Gary R. Dalke
    Title:   Chief Financial Officer

 

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S IGNATURE P AGE


Appendix A

The following are provisions of the Partnership Agreement where the Company is permitted to act in its sole discretion or would be acting in its individual capacity. Capitalized terms used but not defined in this Appendix A have the meanings assigned to them in the Partnership Agreement.

(a) Section 2.4 (“ Purpose and Business ”), with respect to decisions to propose or approve the conduct by the Partnership of any business;

(b) Sections 4.6(a ) and (b) (“ Transfer of the General Partner’s General Partner Interest ”), solely with respect to the decision by the Company to transfer its general partner interest in the Partnership;

(c) Section 5.8 (“ Limited Preemptive Right ”), with respect to the right to purchase Partnership Interests from the Partnership;

(d) Section 6.9 (“ Entity-Level Taxation ”), with respect to the decision to reduce the Target Distributions;

(e) Section 7.6(d) (relating to the right of the Company and its Affiliates to purchase Units or other Partnership Securities and exercise rights related thereto);

(f) Section 7.7 (“ Indemnification ”), solely with respect to any decision by the Company to exercise its rights as an “Indemnitee”;

(g) Section 7.12 (“ Registration Rights of the General Partner and its Affiliates ”), solely with respect to any decision to exercise registration rights of the Company;

(h) Section 11.1 (“ Withdrawal of the General Partner ”), solely with respect to the decision by the Company to withdraw as General Partner of the Partnership and to giving notices required thereunder;

(i) Section 11.3(a) and (b) (“ Interest of Departing General Partner and Successor General Partner ”); and

(j) Section 15.1 (“ Right to Acquire Limited Partner Interests ”).

 

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A PPENDIX A

Exhibit 10.1

Execution Version

 

 

[Published CUSIP Number: 95931PAA6]

CREDIT AGREEMENT

Dated as of October 16, 2013

among

WESTERN REFINING LOGISTICS, LP,

as the Borrower,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent, Swingline Lender and

an L/C Issuer,

and

The Lenders Party Hereto

WELLS FARGO SECURITIES, LLC and SUNTRUST ROBINSON HUMPHREY, INC.,

as Joint Bookrunners

WELLS FARGO SECURITIES, LLC, SUNTRUST ROBINSON HUMPHREY, INC. and

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,

as Joint Lead Arrangers

SUNTRUST BANK and CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as

Co-Syndication Agents

 

 


TABLE OF CONTENTS

 

Section

       Page  
  ARTICLE I   
  DEFINITIONS AND ACCOUNTING TERMS   

1.01

 

Defined Terms

     1   

1.02

 

Other Interpretive Provisions

     33   

1.03

 

Accounting Terms

     34   

1.04

 

Rounding

     35   

1.05

 

Times of Day

     35   

1.06

 

Letter of Credit Amounts

     35   
  ARTICLE II   
  THE COMMITMENTS AND CREDIT EXTENSIONS   

2.01

 

The Borrowings

     36   

2.02

 

Borrowings, Conversions and Continuations of Loans

     36   

2.03

 

Letters of Credit

     38   

2.04

 

Prepayments

     46   

2.05

 

Termination or Reduction of Commitments

     48   

2.06

 

Repayment of Loans

     49   

2.07

 

Interest

     49   

2.08

 

Fees

     50   

2.09

 

Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate

     51   

2.10

 

Evidence of Debt

     51   

2.11

 

Payments Generally; Administrative Agent’s Clawback

     52   

2.12

 

Sharing of Payments by Lenders

     54   

2.13

 

Increase in Facility

     55   

2.14

 

Cash Collateral

     57   

2.15

 

Defaulting Lenders

     58   

2.16

 

Swingline Loans

     60   

2.17

 

Extension of Maturity Date

     61   
  ARTICLE III   
  TAXES, YIELD PROTECTION AND ILLEGALITY   

3.01

 

Taxes

     63   

3.02

 

Illegality

     68   

3.03

 

Inability to Determine Rates

     69   

3.04

 

Increased Costs; Reserves on Eurodollar Rate Loans

     69   

3.05

 

Compensation for Losses

     71   

3.06

 

Mitigation Obligations; Replacement of Lenders

     71   

3.07

 

Survival

     72   

 

i


  ARTICLE IV   
  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS   

4.01

 

Conditions of Closing Date

     72   

4.02

 

Conditions to All Credit Extensions

     76   
  ARTICLE V   
  REPRESENTATIONS AND WARRANTIES   

5.01

 

Existence, Qualification and Power

     77   

5.02

 

Authorization; No Contravention

     77   

5.03

 

Governmental Authorization; Other Consents

     78   

5.04

 

Binding Effect

     78   

5.05

 

Financial Statements; No Material Adverse Effect

     78   

5.06

 

Litigation

     79   

5.07

 

Material Contracts

     79   

5.08

 

Ownership of Property; Liens; Investments

     79   

5.09

 

Environmental Compliance

     81   

5.10

 

Insurance

     81   

5.11

 

Taxes

     81   

5.12

 

ERISA Compliance

     82   

5.13

 

Subsidiaries; Equity Interests; Loan Parties

     82   

5.14

 

Margin Regulations; Investment Company Act

     83   

5.15

 

Disclosure

     83   

5.16

 

Compliance with Laws

     83   

5.17

 

Solvency

     83   

5.18

 

Casualty, Etc.

     84   

5.19

 

Collateral Documents

     84   

5.20

 

State and Federal Regulation

     84   

5.21

 

U.S. Sanctions

     85   
  ARTICLE VI   
  AFFIRMATIVE COVENANTS   

6.01

 

Financial Statements

     85   

6.02

 

Certificates; Other Information

     86   

6.03

 

Notices

     89   

6.04

 

Payment of Obligations

     90   

6.05

 

Preservation of Existence, Etc.

     90   

6.06

 

Maintenance of Properties

     90   

6.07

 

Maintenance of Insurance

     91   

6.08

 

Compliance with Laws

     91   

6.09

 

Books and Records

     91   

6.10

 

Inspection Rights

     91   

6.11

 

Use of Proceeds

     92   

 

ii


6.12

 

Additional Subsidiaries; Additional Security

     92   

6.13

 

Compliance with Environmental Laws

     94   

6.14

 

Further Assurances

     94   

6.15

 

Compliance with Terms of Leaseholds

     95   

6.16

 

Material Contracts

     95   

6.17

 

Unrestricted Subsidiaries

     95   

6.18

 

Flood Insurance Laws

     96   

6.19

 

Post-Closing Matters

     96   
  ARTICLE VII   
  NEGATIVE COVENANTS   

7.01

 

Liens

     98   

7.02

 

Indebtedness

     101   

7.03

 

Investments

     102   

7.04

 

Fundamental Changes

     104   

7.05

 

Dispositions

     105   

7.06

 

Restricted Payments

     106   

7.07

 

Change in Nature of Business

     107   

7.08

 

Transactions with Affiliates

     107   

7.09

 

Burdensome Agreements

     107   

7.10

 

Use of Proceeds

     108   

7.11

 

Financial Covenants

     108   

7.12

 

Amendments of Organization Documents

     108   

7.13

 

Accounting Changes

     108   

7.14

 

Prepayments, Etc. of Indebtedness

     109   

7.15

 

Amendment, Etc. of Indebtedness

     109   

7.16

 

Swap Contracts

     109   

7.17

 

Deposit Accounts, Securities Accounts and Commodity Accounts

     109   

7.18

 

Material Contracts

     110   

7.19

 

Limitations on Activities of Borrower

     110   
  ARTICLE VIII   
  EVENTS OF DEFAULT AND REMEDIES   

8.01

 

Events of Default

     110   

8.02

 

Remedies upon Event of Default

     113   

8.03

 

Application of Funds

     113   
  ARTICLE IX   
  ADMINISTRATIVE AGENT   

9.01

 

Appointment and Authority

     115   

9.02

 

Rights as a Lender

     115   

9.03

 

Exculpatory Provisions

     116   

 

iii


9.04

 

Reliance by Administrative Agent

     117   

9.05

 

Delegation of Duties

     117   

9.06

 

Resignation of Administrative Agent

     117   

9.07

 

Non-Reliance on Administrative Agent and Other Lenders

     118   

9.08

 

No Other Duties, Etc.

     119   

9.09

 

Administrative Agent May File Proofs of Claim

     119   

9.10

 

Collateral and Guaranty Matters

     120   

9.11

 

Secured Cash Management Agreements and Secured Hedge Agreements

     121   
  ARTICLE X   
  MISCELLANEOUS   

10.01

 

Amendments, Etc.

     121   

10.02

 

Notices; Effectiveness; Electronic Communications

     123   

10.03

 

No Waiver; Cumulative Remedies; Enforcement

     125   

10.04

 

Expenses; Indemnity; Damage Waiver

     126   

10.05

 

Payments Set Aside

     128   

10.06

 

Successors and Assigns

     129   

10.07

 

Treatment of Certain Information; Confidentiality

     134   

10.08

 

Right of Setoff

     135   

10.09

 

Interest Rate Limitation

     136   

10.10

 

Counterparts; Integration; Effectiveness

     136   

10.11

 

Survival of Representations and Warranties

     136   

10.12

 

Severability

     137   

10.13

 

Replacement of Lenders

     137   

10.14

 

Governing Law; Jurisdiction; Etc.

     138   

10.15

 

Waiver of Jury Trial

     139   

10.16

 

No Advisory or Fiduciary Responsibility

     139   

10.17

 

Electronic Execution of Assignments and Certain Other Documents

     140   

10.18

 

USA Patriot Act

     140   

10.19

 

Time of the Essence

     140   

10.20

 

ENTIRE AGREEMENT

     140   

SIGNATURES

     S-1   

 

iv


SCHEDULES

 

2.01    Commitments and Applicable Percentages
5.06    Litigation
5.07    Material Contracts
5.08(d)    Existing Investments
5.13    Subsidiaries and Other Equity Investments; Loan Parties
6.12    Guarantors
6.19    Mortgaged Properties
6.19(a)(iii)    Property Exempt from Section 6.19(a)(iii) Requirements
7.02    Existing Indebtedness
7.05(k)    Scheduled Dispositions of Certain Property
7.06(d)    Scheduled Distributions of Certain Property
7.09    Burdensome Agreements
10.02    Administrative Agent’s Office, Certain Addresses for Notices

EXHIBITS

Form of

 

A-1    Loan Notice
A-2    Swingline Loan Notice
B    Note
C    Compliance Certificate
D-1    Assignment and Assumption
D-2    Administrative Questionnaire
E    Perfection Certificate
F    Security Agreement
G-1    U.S. Tax Certificate (For Foreign Lenders that are not Partnerships for U.S. Federal Income Tax Purposes)
G-2    U.S. Tax Certificate (For Foreign Participants that are not Partnerships for U.S. Federal Income Tax Purposes)
G-3    U.S. Tax Certificate (For Foreign Participants that are Partnerships for U.S. Federal Income Tax Purposes)
G-4    U.S. Tax Certificate (For Foreign Lenders that are Partnerships for U.S. Federal Income Tax Purposes)
H    Mortgage

 

v


CREDIT AGREEMENT

This CREDIT AGREEMENT (“ Agreement ”) is entered into as of October 16, 2013, among WESTERN REFINING LOGISTICS, LP, a Delaware limited partnership (the “ Borrower ”), each lender and L/C Issuer from time to time party hereto (collectively, the “ Lenders ” and individually, a “ Lender ”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Swingline Lender and L/C Issuer.

PRELIMINARY STATEMENTS :

The Borrower has requested that the Lenders provide a revolving credit facility, and the Lenders have indicated their willingness to lend and the L/C Issuer has indicated its willingness to issue letters of credit, in each case, on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

Additional Commitment Lenders ” has the meaning specified in 2.17(c)(iv) .

Adjusted Eurodollar Rate ” means for any Interest Period with respect to any Eurodollar Rate Loan, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1.00%) equal to the product of (a) the Eurodollar Rate for such Interest Period multiplied by (b) the Statutory Reserves.

Administrative Agent ” means Wells Fargo in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

Administrative Agent’s Office ” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 , or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

Administrative Questionnaire ” means an Administrative Questionnaire in substantially the form of Exhibit D-2 or any other form approved by the Administrative Agent.

Affiliate ” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

1


Aggregate Commitments ” means the Commitments of all the Lenders in effect from time to time. As of the Closing Date, the Aggregate Commitments are $300,000,000.

Agreement ” means this Credit Agreement.

Applicable Percentage ” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s Commitment at such time, subject to adjustment as provided in Section 2.15. If the commitment of each Lender to make Loans, the Swingline Lender to make Swingline Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 , or if the Aggregate Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

Applicable Rate ” means (a) from the Closing Date to the date on which the Administrative Agent receives a Compliance Certificate pursuant to Section 6.02(a)(i) for the fiscal quarter ending December 31, 2013, 0.75% per annum for Base Rate Loans, 1.75% per annum for Eurodollar Rate Loans and Letter of Credit Fees and 0.300% per annum for Commitment Fees and (b) after the date set forth in clause (a) above, the applicable percentage per annum set forth below determined by reference to the Consolidated Total Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a)(i) :

 

    

Applicable Rate

 

Pricing
Level

  

Consolidated Total Leverage Ratio

   Eurodollar Rate
(Letters of Credit)
    Base Rate
(Swingline Loans)
    Commitment
Fee
 
1    £ 2.00 to 1.0      1.75     0.75     0.300
2    > 2.00 to 1.0 £ 2.75 to 1.0      2.00     1.00     0.300
3    > 2.75 to 1.0 £ 3.50 to 1.0      2.25     1.25     0.375
4    > 3.50 to 1.0 £ 4.00 to 1.0      2.50     1.50     0.375
5    > 4.00 to 1.0      2.75     1.75     0.500

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Total Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(a)(i) ; provided , however , that if a Compliance Certificate is not delivered when due in accordance with such Section, then, upon the request of the Required Lenders, Pricing Level 5 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and in each case shall remain in effect until the date on which such Compliance Certificate is delivered.

 

2


Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of Section 2.09(b) .

Appropriate Lender ” means, at any time, (a) with respect to the Facility, a Lender that has a Commitment or holds a Loan at such time, (b) with respect to the Letter of Credit Sublimit, (i) the L/C Issuer and (ii) if any Letters of Credit have been issued pursuant to Section 2.03(a) , the Lenders and (c) with respect to the Swingline Commitment, the Swingline Lender.

Approved Fund ” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

Asset Sale ” means any Disposition by any Relevant Party of (a) any Equity Interest owned by such Relevant Party in any other Relevant Party or (b) all or any portion of the assets owned by any Relevant Party, provided that “Asset Sale” shall not include any Disposition pursuant to Section 7.05(a) , (b) , (c) , (d) , (e)  or (j) .

Assignee Group ” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b) ), and accepted by the Administrative Agent, in substantially the form of Exhibit D-1 or any other form approved by the Administrative Agent.

Attributable Indebtedness ” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP and (b) in respect of any Synthetic Lease Obligation of any Person, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease.

Auto-Extension Letter of Credit ” has the meaning specified in Section 2.03(b)(iii) .

Available Cash ” means “Available Cash” as defined in the Partnership Agreement as in effect on the Closing Date.

Availability Period ” means the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of all of the Commitments pursuant to Section 2.05 , and (c) the date of termination of the commitment of each Lender to make Loans, of the obligation of the L/C Issuer to make L/C Credit Extensions and the obligation of the Swingline Lender to make Swingline Loans, in each case pursuant to Section 8.02 .

 

3


Base Rate ” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Wells Fargo as its “prime rate”, and (c) the Adjusted Eurodollar Rate for a one-month interest period (as determined on such day) plus 1.00%. The “prime rate” is a rate set by Wells Fargo based upon various factors including Wells Fargo’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Wells Fargo shall take effect at the opening of business on the day specified in the public announcement of such change.

Base Rate Loan ” means a Loan (including any Swingline Loan) that bears interest based on the Base Rate.

Borrower ” has the meaning specified in the introductory paragraph hereto.

Borrower Materials ” has the meaning specified in Section 6.02 .

Borrowing ” means an extension of credit consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01 .

Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located or in New York City and, if such day relates to any Eurodollar Rate Loan, means any such day that is also a London Banking Day.

Capitalized Leases ” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

Cash Collateralize ” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect thereof (as the context may require), cash or deposit account balances or, if the L/C Issuer shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to (a) the Administrative Agent and (b) the L/C Issuer. “ Cash Collateral ” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

Cash Equivalents ” means:

(a) readily marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof having maturities of not more than 360 days from the date of acquisition thereof; provided that the full faith and credit of the United States of America is pledged in support thereof;

 

4


(b) time or demand deposits with, or certificates of deposit or bankers’ acceptances of, any branch of any commercial bank that (i)(A) is a Lender or (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as described in clause (c) of this definition or (iii) has combined capital and surplus of at least $1,000,000,000, in each case with maturities of not more than 180 days from the date of acquisition thereof;

(c) commercial paper issued by any Person organized under the laws of any state of the United States of America and rated at least “Prime-2” (or the then equivalent grade) by Moody’s or at least “A-2” (or the then equivalent grade) by S&P, in each case with maturities of not more than 180 days from the date of acquisition thereof; provided that if any such commercial paper is not rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, then in order to be considered a permissible Investment for purposes of Section 7.03(a), the following limitation shall apply: the Borrower and its Restricted Subsidiaries shall not hold more than $10,000,000 in the aggregate of such commercial paper issued by a single issuer; and

(d) Investments, classified in accordance with GAAP as current assets of the Borrower or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P, and the portfolios of which are limited solely to Investments of the character, quality and maturity described in clauses (a) , (b)  and (c)  of this definition.

Cash Management Agreement ” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements made or entered into at any time, or in effect at any time, whether directly or indirectly, and whether as a result of assignment or transfer or otherwise, between the Borrower or any Restricted Subsidiary and any Cash Management Bank.

Cash Management Bank ” means (a) a Lender or an Affiliate of a Lender that is a party to a Cash Management Agreement on the Closing Date or (b) any Person that, at the time it enters into a Cash Management Agreement, is a Lender or an Affiliate of a Lender, in each case, in its capacity as a party to such Cash Management Agreement.

CERCLA ” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

 

5


CERCLIS ” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

CFC ” means a Person that is a controlled foreign corporation under Section 957 of the Code.

Change in Law ” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

Change of Control ” means an event or series of events by which:

(a) the General Partner or any other direct or indirect Subsidiary of WNR shall cease to be the sole general partner of the Borrower; or

(b) WNR shall cease, directly or indirectly to own and control legally and beneficially greater than 50% of the Equity Interests in the General Partner;

(c) WNR shall cease, directly or indirectly to have the power to vote or direct the voting of Equity Interests in the General Partner having a majority of the ordinary voting power for the election of the board of directors (or similar governing body) of the General Partner; or

(d) either (i) WNR shall cease to be able, directly or indirectly, to appoint a majority of the members of the board of directors (or similar governing body) of the General Partner or (ii) the failure of the majority of the board of directors (or similar governing body) of the General Partner to be comprised of directors directly or indirectly appointed by WNR.

Closing Date ” means the first date all the conditions precedent in Section 4.01(a) are satisfied or waived in accordance with Section 10.01 .

Code ” means the Internal Revenue Code of 1986.

Collateral ” means all of the “ Collateral ” and “ Mortgaged Property ” referred to in the Collateral Documents and all of the other property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties.

 

6


Collateral Documents ” means, collectively, the Security Agreement, the Mortgages, each of the mortgages, collateral assignments, Joinder Agreements, security agreements, pledge agreements, deposit account control agreements or other similar agreements delivered to the Administrative Agent pursuant to Section 6.12 , and each of the other agreements, instruments or documents delivered pursuant hereto or in connection herewith that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

Commitment ” means, as to each Lender, its obligation to (a) make Loans to the Borrower pursuant to Section 2.01 , (b) purchase participations in L/C Obligations and (c) purchase participations in Swingline Obligations, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

Commitment Fee ” has the meaning specified in Section 2.08(a) .

Commodity Exchange Act ” shall mean the Commodity Exchange Act (7. U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

Compliance Certificate ” means a certificate substantially in the form of Exhibit C .

Connection Income Taxes ” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

Consolidated EBITDA ” means, for any Measurement Period, for the Borrower and its Restricted Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such Measurement Period plus , (a) without duplication, the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges, (ii) the provision for Federal, state, local and foreign income taxes payable (without duplication, net of, Federal, state, local and foreign income tax credits), (iii) depreciation and amortization expense, (iv) non-cash compensation expenses and charges, (v) unrealized net losses in the fair market value of any Swap Contract, (vi) other non-cash items reducing such Consolidated Net Income, (vii) fees and expenses incurred in connection with the Transactions and (viii) fees and expenses incurred in connection with the proposed or consummated incurrence of any Indebtedness permitted by Section 7.02 or the proposed or consummated making of any Investment (including any Permitted Acquisition) permitted by Section 7.03 (in each case of or by the Borrower and its Restricted Subsidiaries for such Measurement Period); provided that the aggregate amount of adjustments included in this clause (viii)  shall not exceed the greater of (A) $10,000,000 and (B) 10% of Consolidated EBITDA for the most recent Measurement Period (calculated without regard to such addition), in each case during any fiscal year, and minus (b) without duplication,

 

7


the following to the extent included in calculating such Consolidated Net Income: (A) unrealized net gains in the fair market value of any Swap Contract and (B) all non-cash items increasing Consolidated Net Income (in each case of or by the Borrower and its Restricted Subsidiaries for such Measurement Period). For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a “ Reference Period ”), if during such Reference Period (or, in the case of pro forma calculations, during the period from the last day of such Reference Period to and including the date as of which such calculation is made) the Borrower or any Restricted Subsidiary shall have made a Material Disposition or Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Disposition or Material Acquisition (and any incurrence or repayment of Indebtedness in connection therewith, other than ordinary course fluctuations in the drawn amount of revolving credit facilities) occurred on the first day of such Reference Period (with the Reference Period for the purposes of pro forma calculations being the most recent period of four consecutive fiscal quarters for which the relevant financial information is available), which may, in the case of a Material Acquisition, reflect (1) pro forma adjustments to the extent permitted to be reflected in pro forma financial statements prepared in accordance with Article 11 of Regulation S-X under the Securities Exchange Act of 1934 or (2) other adjustments satisfactory to the Administrative Agent in its sole discretion. As used in this definition, “ Material Acquisition ” means any acquisition of property or series of related acquisitions of property that (a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes common stock of any Person and (b) involves consideration in excess of $10,000,000; and “Material Disposition” means any sale, transfer or other disposition of property or series of related sales, transfers or other dispositions of property that (i) involves assets comprising all or substantially all of an operating unit of a business or involves common stock of any Person owned by the Borrower and the Restricted Subsidiaries and (ii) involves consideration in excess of $10,000,000. For purposes of calculating Consolidated EBITDA for the fiscal quarter of the Borrower ending December 31, 2013, the parties agree that Consolidated EBITDA for that part of such period occurring after October 1, 2013 and before the Closing Date shall be equal to (i) the actual number of days elapsed during that part of such period occurring prior to the Closing Date, multiplied by (ii) $175,000.

Consolidated Funded Indebtedness ” means, as of any date of determination, for the Borrower and its Restricted Subsidiaries on a consolidated basis, the sum (without duplication) of:

(a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including the Loans hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments representing obligations for borrowed money,

(b) the outstanding principal amount of all Attributable Indebtedness,

(c) all unreimbursed obligations under bankers’ acceptances and similar instruments and drawn letters of credit; provided that any unreimbursed amount under commercial letters of credit shall not constitute Consolidated Funded Indebtedness until three Business Days after such amount is drawn,

 

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(d) the outstanding principal amount of all obligations in respect of the deferred purchase price of property or services (other than accounts payable in the ordinary course of business),

(e) all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (d) above of Persons other than the Borrower or any Restricted Subsidiary, and

(f) all Indebtedness of the types referred to in clauses (a) through (e) above of any partnership or Joint Venture (other than a Joint Venture that is itself a corporation or limited liability company) in which the Borrower or a Restricted Subsidiary is a general partner or joint venturer, to the extent the Borrower or such Restricted Subsidiary is directly liable for the payment of such Indebtedness.

Consolidated Interest Charges ” means, with respect to the Borrower and its Restricted Subsidiaries on a consolidated basis for any Measurement Period, the sum (without duplication) of (a) all interest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, plus (b) the portion of rent expense under Capitalized Leases that is treated as interest in accordance with GAAP, plus (c) their net payments (or minus their net receipts) under Swap Contracts with respect to interest rates. For purposes of calculating Consolidated Interest Charges for the fiscal quarter of the Borrower ending December 31, 2013, the parties agree that Consolidated Interest Charges for that part of such period occurring after October 1, 2013 and before the Closing Date shall equal $0.

Consolidated Interest Coverage Ratio ” means, for any Measurement Period, the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Charges, in each case, of or by the Borrower and its Restricted Subsidiaries on a consolidated basis for such Measurement Period.

Consolidated Net Income ” means, for any Measurement Period, the net income (or loss) of the Borrower and its Restricted Subsidiaries on a consolidated basis for such Measurement Period; provided that (a) Consolidated Net Income shall exclude extraordinary gains and extraordinary losses for such Measurement Period, (b) Consolidated Net Income shall exclude the net income (or loss) of any Restricted Subsidiary during such Measurement Period to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of such income is not permitted by operation of the terms of its Organization Documents or any agreement, instrument or Law applicable to such Restricted Subsidiary during such Measurement Period, except to the extent such income is actually distributed, (c) except as provided in clause (d)  below, Consolidated Net Income shall exclude any income (or loss) for such Measurement Period of any Person if such Person is not the Borrower or a Restricted Subsidiary, and (d) Consolidated Net Income shall include the amount of net income actually distributed in cash during such Measurement Period to the Borrower or any Restricted

 

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Subsidiary from any Joint Venture or other Person that is not a Restricted Subsidiary (other than any dividends or other distributions in cash that are extraordinary, unusual or non-recurring in nature) and, in the case of a dividend or other distribution to a Restricted Subsidiary that is not a Loan Party, such Restricted Subsidiary is not precluded from further distributing such amount to the Borrower as described in clause (b) of this proviso.

Consolidated Senior Secured Leverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness of the Borrower and its Restricted Subsidiaries (other than such Consolidated Funded Indebtedness that is not secured by a Lien as of such date), less any unrestricted cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries up to $20,000,000 to (b) Consolidated EBITDA of the Borrower and its Restricted Subsidiaries for the most recently completed Measurement Period.

Consolidated Tangible Assets ” means at any date of determination, the total amount of consolidated assets of the Borrower and its Restricted Subsidiaries after deducting therefrom the value of all goodwill, trade names, trademarks, patents and other like intangible assets, all as set forth on the consolidated balance sheet of the Borrower.

Consolidated Total Leverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness of the Borrower and its Restricted Subsidiaries as of such date, less any unrestricted cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries up to $20,000,000 to (b) Consolidated EBITDA of the Borrower and its Restricted Subsidiaries for the most recently completed Measurement Period.

Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or any agreement, instrument or other contract to which such Person is a party or by which it or any of its property is bound.

Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise ( provided that individual natural persons who are members of a board of managers or board of directors of a Person shall not be deemed to Control such Person solely because of such membership). “ Controlling ” and “ Controlled ” have meanings correlative thereto.

Co-Syndication Agents ” means SunTrust and Credit Agricole, in their capacity as Co-Syndication Agents.

Credit Agricole ” means Credit Agricole Corporate and Investment Bank.

Credit Extension ” means each of the following: (a) a Borrowing, (b) a Swingline Borrowing and (c) an L/C Credit Extension.

Debtor Relief Laws ” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,

 

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rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

Default ” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

Default Rate ” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans under the Facility plus (iii) 2% per annum; provided , however , that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Eurodollar Rate Loan plus 2% per annum and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.

Defaulting Lender ” means, subject to Section 2.15(b) , any Lender that, as determined by the Administrative Agent, (a) has failed to (i) fund any portion of the Loans, Swingline Loans or participations in L/C Obligations required to be funded by it hereunder, within three Business Days of the date required to be funded by it hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of the failure to satisfy one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing), or (ii) pay to the Administrative Agent, the Swingline Lender, any L/C Issuer, or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within three Business Days of the date due, (b) has notified the Borrower, the Administrative Agent or any Lender that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on the failure to satisfy a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement), (c) has failed, within three Business Days after written request by the Administrative Agent, to confirm in a manner satisfactory to the Administrative Agent that it will comply with its funding obligations hereunder, or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

 

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Delaware Basin System Assets ” means the Pipeline Assets commonly known as the “Delaware Basin System” that consist of approximately 38 miles of 10” and 12” mainlines in Southeast New Mexico and West Texas (operated from a central control station in Bloomfield, New Mexico).

Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith. The granting or creation of a Lien is not a Disposition.

Documentation Agent ” means UBS Securities LLC.

Dollar ” and “ $ ” mean lawful money of the United States.

Domestic Subsidiary ” shall mean each Subsidiary that is not a Foreign Subsidiary.

Easement ” means any right-of-way agreement, easement, surface use agreement, or other similar document relating to any Pipeline Asset owned or held by any Relevant Party at the time in question.

Eligible Assignee ” means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii) and (v)  (subject to such consents, if any, as may be required under Section 10.06(b)(iii) ).

Energy Policy Act ” means the Energy Policy Act of 1992, Pub. L. No. 102-486, 106 Stat. 2776 (codified as amended in scattered sections of 15, 16, 20, 25, 42 U.S.C.).

Engagement Letter ” means the letter agreement, dated September 13, 2013, among the Borrower, WNR, WFS, STRH, Wells Fargo and SunTrust.

Environmental Laws ” means any and all Federal, state, local and foreign statutes, laws, regulations, ordinances, rules, or governmental restrictions, any and all judgments, orders, decrees, permits, concessions, grants, franchises, or licenses by any Governmental Authority, and any agreement with any Governmental Authority, relating to pollution and/or the protection of the environment or the release of any materials into the environment, including those related to releases of hazardous substances or wastes, air emissions and discharges to waste or public systems.

Environmental Liability ” means any liability, contingent or otherwise, arising under Environmental Laws (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any other Relevant Party directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, or (d) the release or threatened release of any Hazardous Materials into the environment.

 

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Environmental Permit ” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

Equity Interests ” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

ERISA ” means the Employee Retirement Income Security Act of 1974.

ERISA Affiliate ” means any trade or business (whether or not incorporated) that together with the Borrower is treated as a single employer under Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA with respect to a Pension Plan, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

Eurodollar Rate ” means:

(i) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to (i) the British Bankers Association LIBOR Rate or the successor thereto if the British Bankers Association is no longer making a LIBOR rate available (“ LIBOR ”), as published by Reuters (or such other commercially available source providing quotations of LIBOR as may be designated by the Administrative Agent from

 

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time to time) at approximately 11:00 a.m., London time, two London Banking Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period or, (ii) if such rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted and with a term equivalent to such Interest Period would be offered by Wells Fargo’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two London Banking Days prior to the commencement of such Interest Period; and

(ii) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to (i) LIBOR, at approximately 11:00 a.m., London time, on the date of determination, for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made or maintained and with a term equal to one month would be offered by Wells Fargo’s London Branch to major banks in the London interbank Eurodollar market at their request at the date and time of determination.

Eurodollar Rate Loan ” means a Loan that bears interest at a rate based on the Adjusted Eurodollar Rate.

Event of Default ” has the meaning specified in Section 8.01 .

Extending Lender ” has the meaning specified in 2.17(b) .

Extension Effective Date ” has the meaning specified in 2.17(b) .

Excluded Assets ” means (a) property and assets (including, for the avoidance of doubt, Pipeline Assets and Easements) the pledge or granting of a security interest in which would violate contractual restrictions or applicable law or would require the consent or approval of a third party, in each case, unless such restrictions are rendered ineffective under the Uniform Commercial Code of any applicable jurisdiction or, in the case of Equity Interests, unless such restriction is not contained in a bona fide agreement with a third party that is not an Affiliate of the Borrower; provided , however , that the Collateral shall include (and the definition of Excluded Assets shall not then include) any portion of such property or assets immediately at such time as the contractual or legal provisions referred to above shall no longer be applicable or such required consent shall have been received, (b) money, (c) motor vehicles, (d) letters of credit and letter of credit rights that do not constitute supporting obligations in respect of other collateral, (e) commercial tort claims in respect of which no complaint or counterclaim, as applicable, has been filed or in respect of which the amount claimed is less than $10,000,000, (f)

 

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Excluded Bank Accounts, (g) property or assets not required to be Collateral pursuant to the terms of Section 6.12(e) , (h) property or assets owned by an Excluded Subsidiary, unless such Excluded Subsidiary has elected to be a Loan Party, (i) any “intent-to-use” application for registration of a trademark or service mark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. §1051, prior to the filing of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act or an “Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with respect thereto, solely to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of any registration that issues from such intent-to-use application under applicable federal law and (j) property and assets with respect to which the Administrative Agent reasonably determines the time or expense of obtaining a pledge or grant of a security interest therein outweighs the benefits thereof.

Excluded Bank Accounts ” means any (a) bank accounts maintained by the Loan Parties which have a most recent 5-day average balance that does not exceed $2,000,000 in the aggregate and (b) bank accounts used for payroll, payroll taxes or employee benefits.

Excluded Subsidiary ” means any Subsidiary for which either of the following is true: (a) it is an Unrestricted Subsidiary or (b) it is not required to become a Loan Party pursuant to the terms of Section 6.12(e).

Excluded Swap Obligation ” shall mean with respect to any Guarantor, (a) any Swap Obligation if, and to the extent that all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, as applicable, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof), provided that if a Swap Obligation arises under a master agreement governing more than one Swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swaps for which such guarantee or security interest is or becomes illegal, or (b) any other Swap Obligation designated as an “Excluded Swap Obligation” of such Guarantor as specified in any agreement between the relevant Loan Parties and hedge counterparty applicable to such Swap Obligations, and agreed by the Administrative Agent. If a Swap Obligation arises under a master agreement governing more than one Swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swaps for which such guarantee or security interest is or becomes illegal.

Excluded Taxes ” means, with respect to the Administrative Agent, any Lender (including for purposes of this definition, the Swingline Lender or the L/C Issuer) or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with

 

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respect to an applicable interest in a Loan or Commitment pursuant to a Law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section  3.06(b) ) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section  3.01(a)(ii) , amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section  3.01(e) and (d) any Taxes imposed pursuant to FATCA.

Extraordinary Receipt ” means any cash received by or paid to or for the account of any Person from the proceeds of insurance (other than proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings) and condemnation awards (and payments in lieu thereof).

Facility ” means the credit facility under this Agreement.

FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to such intergovernmental agreement.

Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Wells Fargo on such day on such transactions as determined by the Administrative Agent.

FERC ” shall mean the Federal Energy Regulatory Commission or any of its successors.

FERC Jurisdictional Requirement ” means, with respect to properties that are part of the Pipeline Systems for which a Relevant Party has requested a waiver of the Interstate Commerce Act tariff filing and reporting requirements, any order or other requirement by the FERC, imposed at any time after the Closing Date, that requires any Relevant Party to take any action with respect to or as a result of a finding, that all or a portion of such properties are subject to FERC requirements, including any requirement for the filing of reports and/or tariffs at the FERC with respect to such properties, or any other FERC order or requirement that any Borrower or any Subsidiary comply with the regulations of the FERC with respect to such Properties.

 

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Finance Co ” shall mean any direct, wholly-owned Subsidiary of the Borrower incorporated to become or otherwise serving as a co-issuer or co-borrower of Indebtedness permitted by this Agreement, which Subsidiary meets the following conditions at all times: (a) the provisions of Section 6.12 have been complied with in respect of such Subsidiary, and such Subsidiary is a Restricted Subsidiary and a Loan Party, (b) such Subsidiary shall be a corporation, (c) such Subsidiary shall be a Domestic Subsidiary and (d) such Subsidiary has not (i) incurred, directly or indirectly any Indebtedness or any other obligation or liability whatsoever other than the Indebtedness that it was formed to co-issue or co-borrow (including, for the avoidance of doubt, any additional series, tranche or issuance of such type of Indebtedness) and for which it serves as co-issuer or co-borrower, (ii) engaged in any business, activity or transaction, or owned any property, assets or Equity Interests other than (A) performing its obligations and activities incidental to the co-issuance or co-borrowing of the Indebtedness that it was formed to co-issue or co-borrower and (B) other activities incidental to the maintenance of its existence, including legal, tax and accounting administration, (iii) consolidated with or merged with or into any Person, or (iv) failed to hold itself out to the public as a legal entity separate and distinct from all other Persons.

Fiscal Year-End 2011 Financial Statements ” means the audited combined balance sheet of the predecessor to the Borrower and its Subsidiaries for the fiscal year ended December 31, 2011, and the related combined statements of operations, division equity and cash flows for such fiscal year of the predecessor to the Borrower and its Subsidiaries then ended, including the notes thereto.

Fiscal Year-End 2012 Financial Statements ” means the audited combined balance sheet of the predecessor to the Borrower and its Subsidiaries for the fiscal year ended December 31, 2012, and the related combined statements of operations, division equity and cash flows for such fiscal year of the predecessor to the Borrower and its Subsidiaries then ended, including the notes thereto.

Flood Insurance Laws ” shall have the meaning assigned to such term in Section 6.18 .

Foreign Lender ” means a Lender that is not a U.S. Person (including such a Lender when acting in the capacity of the Swingline Lender or the L/C Issuer).

Foreign Subsidiary ” means any Subsidiary that is either (i) incorporated or organized under the laws of any jurisdiction other than the United States of America, any State thereof or the District of Columbia (other than an entity that is disregarded for U.S. Federal tax purposes and is a direct Subsidiary of an entity organized in the United States of America, any State thereof or the District of Columbia) and is a CFC, (ii) any Subsidiary of a Foreign Subsidiary or (iii) a disregarded entity for U.S. Federal tax purposes if substantially all of its assets consist of Equity Interests of one or more Foreign Subsidiaries.

 

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Four Corners Pipeline Assets ” means the Pipeline Assets commonly known as the “Four Corners System” that consist of approximately 257 miles of gathering and mainlines in northwestern New Mexico that gather and transport crude oil and condensate produced in the San Juan and Paradox Basin areas of New Mexico and Utah and deliver it to WNR’s refinery located in Gallup, New Mexico.

FRB ” means the Board of Governors of the Federal Reserve System of the United States.

Fronting Exposure ” means, at any time there is a Defaulting Lender, (a) with respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof and (b) with respect to the Swingline Lender, such Defaulting Lender’s Applicable Percentage of Swingline Loans other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

Fund ” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

General Partner ” means Western Refining Logistics GP, LLC, a Delaware limited liability company or any substitute or replacement general partner of the Borrower that is a direct or indirect Subsidiary of WNR.

Governmental Authority ” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

Guarantee ” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such

 

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Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “ Guarantee ” as a verb has a corresponding meaning.

Guarantors ” means, collectively, the Restricted Subsidiaries of the Borrower listed on Schedule 6.12 and each other Restricted Subsidiary of the Borrower that is required to execute and deliver a guaranty or guaranty supplement pursuant to Section 6.12 .

Guaranty ” means, collectively, the Guaranty made by the Guarantors in favor of the Secured Parties in the Security Agreement, together with each other guaranty and guaranty supplement delivered pursuant to Section 6.12 .

Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

Hedge Bank ” means (a) a Lender or an Affiliate of a Lender that is a party to a Swap Contract on the Closing Date or (b) any Person that, at the time it enters into a Swap Contract permitted under ARTICLE VI or ARTICLE VII is a Lender or an Affiliate of a Lender, in its capacity as a party to such Swap Contract.

IFRS ” means International Financial Reporting Standards as issued by the International Accounting Standards Board.

Indebtedness ” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person, whether current or long-term, for borrowed money and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments representing obligations for borrowed money;

 

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(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties and similar instruments;

(c) all obligations of such Person to pay the deferred purchase price of property or services (other than accounts payable in the ordinary course of business and not past due for more than 90 days after the date on which such account was due, unless being contested in good faith by appropriate proceedings and for which any reserves are required by GAAP are maintained);

(d) all Indebtedness (excluding prepaid interest thereon) of others secured by a Lien on property owned by such Person, whether or not such Indebtedness shall have been assumed by such Person or is limited in recourse;

(e) all Attributable Indebtedness of such Person;

(f) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any similar payment in respect of any Equity Interest in such Person on a date prior to the date that is 90 days after the Maturity Date, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

(g) all Guarantees of such Person in respect of any of the foregoing Indebtedness of another Person.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or Joint Venture (other than a Joint Venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer to the extent that such Person is directly liable therefor, which shall include any Guarantees thereof.

Indemnified Taxes ” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

Indemnitees ” has the meaning specified in Section 10.04(b) .

Ineligible Institution ” shall mean the Persons identified by the Borrower to the Administrative Agent (which shall furnish such information to the Lenders) in writing prior to the Closing Date.

Information ” has the meaning specified in Section 10.07 .

Information Memorandum ” means the information memorandum dated September 2013, used by the Joint Bookrunners in connection with the syndication of the Commitments.

 

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Interest Payment Date ” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Eurodollar Rate Loan and the Maturity Date; provided , however , that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates and (b) as to any Base Rate Loan, the last Business Day of each March, June, September and December and the Maturity Date.

Interest Period ” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Loan Notice or is ending twelve months thereafter if requested by the Borrower and consented to by all the Appropriate Lenders; provided that:

(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(c) no Interest Period shall extend beyond the Maturity Date.

Interstate Commerce Act ” means the body of law commonly known as the Interstate Commerce Act, codified at 49 U.S.C. App. §§ 1 et seq (1988).

Investment ” means, as to any Person, any direct or indirect acquisition or investment by such Person in another Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of Indebtedness of, or purchase or other acquisition of any other Indebtedness of or Equity Interest in, another Person, (c) the purchase or other acquisition (in one transaction or a series of related transactions) of all or any material portion of the assets of another Person or (d) the contribution of assets or property to a Joint Venture or Unrestricted Subsidiary. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

IRS ” means the United States Internal Revenue Service.

ISP ” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

 

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Issuer Documents ” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower (or any Restricted Subsidiary) or in favor of the L/C Issuer and relating to such Letter of Credit.

Joinder Agreement ” means an agreement in the form of Annex I to the Security Agreement.

Joint Lead Arrangers ” means, collectively, WFS, STRH and Credit Agricole.

Joint Venture ” means a corporation, limited liability company, limited partnership or statutory trust that is not a Subsidiary and that is owned jointly by a Relevant Party and one or more Persons other than the Borrower and its Subsidiaries.

Laws ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, licenses, authorizations and permits of, and agreements relating to the foregoing with, any Governmental Authority.

L/C Advance ” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage.

L/C Borrowing ” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced by means of a Borrowing.

L/C Credit Extension ” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

L/C Issuer ” means Wells Fargo or any other Lender appointed by the Borrower (with the approval of the Administrative Agent, such approval not to be unreasonably withheld or delayed, and the acceptance of such appointment by such Lender) in such capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder. The “L/C Issuer” means the relevant L/C Issuer or each L/C Issuer, as the case may be.

L/C Obligations ” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

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Lender ” has the meaning specified in the introductory paragraph hereto.

Lending Office ” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify in writing to the Borrower and the Administrative Agent.

Letter of Credit ” means any standby letter of credit issued hereunder.

Letter of Credit Application ” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

Letter of Credit Expiration Date ” means the day that is five Business Days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

Letter of Credit Fee ” has the meaning specified in Section 2.03(h) .

Letter of Credit Sublimit ” means an amount equal to $25,000,000 (or, if less, the Aggregate Commitments). The Letter of Credit Sublimit is part of, and not in addition to, the Facility.

Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way, other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

Loan ” means the loans specified in Section 2.01 .

Loan Documents ” means, collectively, (a) this Agreement, (b) the Notes, (c) the Collateral Documents, (d) the Engagement Letter, and (e) each Issuer Document.

Loan Notice ” means a notice of (a) a Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a) , which, if in writing, shall be substantially in the form of Exhibit A-1 .

Loan Parties ” means, collectively, the Borrower and each Guarantor.

London Banking Day ” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

Material Adverse Effect ” means (a) a material adverse change in, or a material adverse effect on, the operations, assets, business, or financial condition of the Borrower and its Subsidiaries, taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any Loan Document, or of the ability of any Loan

 

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Party to perform its payment obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

Material Contract ” means (a) the Contractual Obligations listed on Schedule 5.07 and (b) any Contractual Obligation between the WNR Group and their assignees, on the one hand, and a Relevant Party, on the other hand (the “ Parent Contracts ”), or one or more Contractual Obligations with the General Partner having the same practical effect as a Parent Contract, in each case, that is filed or required to be filed by the Borrower pursuant to Item 1.01 of Form 8-K. For the avoidance of doubt, it is understood that Contractual Obligations described in clauses (a)  and (b)  above shall continue to be Material Contracts notwithstanding any assignment by the counterparty thereto.

Material Permitted Acquisition ” means any Permitted Acquisition by the Borrower or any Restricted Subsidiary for consideration in excess of $10,000,000.

Maturity Date ” means October 16, 2018 or such later date to which any Lender has agreed to extend its Commitment pursuant to Section 2.17 ; provided , however , that if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.

Measurement Period ” means, at any date of determination, the most recently completed four fiscal quarters of the Borrower or, if fewer than four full consecutive fiscal quarters of the Borrower have been completed since the Closing Date, the fiscal quarters of the Borrower that have been completed since the Closing Date. For all purposes of this Agreement when determining (a) an amount of any item included in the calculation of a financial ratio or financial covenant for the fiscal quarter ended December 31, 2013, such amount for the Measurement Period then ended shall equal such item for such fiscal quarter multiplied by four; (b) an amount of any item included in the calculation of a financial ratio or financial covenant for the fiscal quarter ended March 31, 2014, such amount for the Measurement Period then ended shall equal such item for such fiscal quarter multiplied by four; (c) an amount of any item included in the calculation of a financial ratio or financial covenant for the fiscal quarter ended June 30, 2014, such amount for the Measurement Period then ended shall equal such item for the two fiscal quarters then ended multiplied by two; and (d) an amount of any item included in the calculation of a financial ratio or financial covenant for the fiscal quarter ended September 30, 2014, such amount for the Measurement Period then ended shall equal such item for the three fiscal quarters then ended multiplied by 4/3.

Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto.

Mortgage ” has the meaning specified in Section 6.19 .

Mortgage Policy ” has the meaning specified in Section 6.19 .

Mortgaged Properties ” means all Real Property and Easements required to be subject to a Mortgage that is delivered pursuant to the terms of this Agreement. For the avoidance of doubt, in no event shall “Mortgaged Properties” include any Real Property or Easement that constitutes an Excluded Asset.

 

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Multiemployer Plan ” means any employee benefit plan within the meaning of Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

Net Cash Proceeds ” means with respect to any Asset Sale by any Relevant Party, or any Extraordinary Receipt received or paid to the account of any Relevant Party, the excess, if any, of (i) the sum of cash and Cash Equivalents received in connection with such transaction (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of (A) the principal amount of any Indebtedness that is secured by the applicable asset and that is required to be repaid in connection with such transaction (other than Indebtedness under the Loan Documents), (B) the reasonable and customary out-of-pocket expenses incurred by such Relevant Party in connection with such transaction and (C) Taxes reasonably estimated to be actually payable within two years of the date of the relevant transaction as a result of any gain recognized in connection therewith.

Non-Extending Lenders ” has the meaning specified in Section 2.17(c)(iii) .

Non-Extension Notice Date ” has the meaning specified in Section 2.03(b)(iii) .

Non-Recourse Debt ” shall mean Indebtedness as to which neither the Borrower nor any of its Restricted Subsidiaries (i) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (ii) is directly or indirectly liable as a guarantor or otherwise or (iii) constitutes the lender.

Note ” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit B .

Notes Offering ” means the issuance by the Borrower or a Finance Co, whether in one offering or multiple offerings on an aggregate basis, of at least $100,000,000 of unsecured notes

NPL ” means the National Priorities List under CERCLA.

Obligations ” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, Swingline Loan, Letter of Credit, Secured Cash Management Agreement or Secured Hedge Agreement (other than any Excluded Swap Obligation), in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

 

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OFAC ” has the meaning specified in Section 5.21 .

Omnibus Agreement ” means the Omnibus Agreement, dated as of the Closing Date, among WNR, the Borrower, the General Partner, Western Refining Southwest, Inc., Western Refining Company, L.P. and Western Refining Wholesale, Inc.

Organization Documents ” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, Joint Venture, trust or other form of business entity, the partnership, Joint Venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

Other Connection Taxes ” with respect to any recipient, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

Other Taxes ” all present or future stamp or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section  3.06(b) ).

Outstanding Amount ” means (a) with respect to Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Loans occurring on such date; (b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts; and (c) with respect to any Swingline Obligations on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Swingline Loans occurring on such date.

Participant ” has the meaning specified in Section 10.06(d) .

 

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Participant Register ” has the meaning specified in Section 10.06(d) .

Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of Western Refining Logistics, LP, dated as of the Closing Date, between the General Partner and Western Refining Southwest, Inc.

PBGC ” means the Pension Benefit Guaranty Corporation.

Pension Funding Rules ” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

Pension Plan ” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is maintained or is contributed to by the Borrower or any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.

Perfection Certificate ” shall mean a certificate in the form of Exhibit E or any other form approved by the Administrative Agent.

Permitted Acquisition ” means an acquisition permitted under Section 7.03(g) .

Permitted Encumbrance ” has the meaning specified in Section 7.01 .

Person ” means any natural person, corporation, limited liability company, trust, Joint Venture, association, company, partnership, Governmental Authority or other entity.

Pipeline Assets ” means, collectively, all gathering systems, all tubes and pipelines used for the transportation of hydrocarbons (including crude oil and refined products), wherever located, whether now owned or hereafter acquired by any Loan Party, together with all equipment, contracts, fixtures, facilities, metering stations, compressors, improvements, records and other property appertaining thereto.

Pipeline System ” means each system of Pipeline Assets, Real Property and Easements relating thereto making up an integrated gathering system and gathering system, or other pipeline system.

Plan ” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) maintained by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

Platform ” has the meaning specified in Section 6.02 .

Public Lender ” has the meaning specified in Section 6.02 .

 

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Real Property ” shall mean, collectively, all right, title and interest of a Relevant Party in and to any and all parcels of real property owned or leased by a Relevant Party together with all improvements and appurtenant fixtures, easements, rights of way and other real property incidental to the ownership, lease or operation thereof, but excluding Easements.

Register ” has the meaning specified in Section 10.06(c) .

Registration Statement ” means the Registration Statement on Form S-1, under the Exchange Act, of the Borrower filed with the SEC on July 25, 2013, as amended prior to the Closing Date.

Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.

Relevant Parties ” means, collectively, the Borrower and the Restricted Subsidiaries.

Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived (under applicable regulations or otherwise).

Request for Credit Extension ” means (a) with respect to a Borrowing, conversion or continuation of Loans, a Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swingline Loan, a Swingline Loan Notice.

Required Lenders ” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swingline Obligations being deemed “held” by such Lender for purposes of this definition) and (b) aggregate unused Commitments; provided that the unused Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

Responsible Officer ” means the chief executive officer, president, chief financial officer, chief accounting officer, treasurer, assistant treasurer or any executive vice president, vice president, secretary or assistant secretary of a Loan Party or of the General Partner acting on behalf of a Loan Party or Loan Parties. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party or of the General Partner acting on behalf of a Loan Party or Loan Parties shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of the Borrower or any of its Subsidiaries, or any payment (whether in cash, securities or other property

 

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and including any sinking fund payment or similar deposit) on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to the Borrower’s or any Restricted Subsidiary’s stockholders, partners or members (or the equivalent of any thereof).

Restricted Subsidiary ” means any Subsidiary of the Borrower that is not an Unrestricted Subsidiary.

S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

Secured Cash Management Agreement ” means any Cash Management Agreement that is entered into by and between any Loan Party and any Cash Management Bank.

Secured Hedge Agreement ” means any Swap Contract permitted under ARTICLE VI or ARTICLE VII that is entered into by and between any Loan Party and any Hedge Bank. “Secured Hedge Agreement” shall not include any transactions or confirmations with a Lender or an Affiliate of such Lender entered into after such Lender ceases to be a Lender or such Affiliate ceases to be an Affiliate of such Lender.

Secured Parties ” means, collectively, the Administrative Agent, the Lenders, the Swingline Lender, the L/C Issuer, the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05 , and the other Persons the Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.

Security Agreement ” has the meaning specified in Section 4.01(a)(iii) .

Solvent ” and “ Solvency ” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

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State Pipeline Regulatory Agencies ” means any state Governmental Authority with jurisdiction with respect to any Pipeline Systems, and “ State Pipeline Regulatory Agency ” means any one of the foregoing.

Statutory Reserves ” means shall mean a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the FRB for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D). Eurodollar Rate Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to the Administrative Agent, any Lender or any L/C Issuer under such Regulation D or any comparable regulation. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

STRH ” means SunTrust Robinson Humphrey, Inc. and its successors.

Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) or (in the case of a partnership) a majority of the general partner interests are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “ Subsidiary ” or to “ Subsidiaries ” shall refer to a Subsidiary or Subsidiaries of the Borrower.

SunTrust ” means SunTrust Bank and its successors.

Swap ” shall mean any agreement, contract, or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

Swap Contracts ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, derivative contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master derivatives agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement.

 

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Swap Obligation ” shall mean, with respect to any person, any obligation to pay or perform under any Swap.

Swap Termination Value ” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

Swingline Borrowing ” shall mean a borrowing of Swingline Loans made by the Swingline Lender pursuant to Section 2.16.

Swingline Commitment ” shall mean, with respect to the Swingline Lender, the commitment of the Swingline Lender to make Swingline Loans pursuant to Section 2.16 . The aggregate amount of the Swingline Commitment is $10,000,000 (or, if less, the Aggregate Commitments).

Swingline Lender ” shall mean Wells Fargo, in its capacity as Swingline Lender.

Swingline Lender Notice ” has the meaning specified in Section 2.16(c) .

Swingline Loan ” shall mean any Swingline Loan made to the Borrower pursuant to Section 2.16 .

Swingline Loan Notice ” shall mean a request by the Borrower substantially in the form of Exhibit A-2 .

Swingline Obligations ” shall mean at any time the aggregate principal amount of all outstanding Swingline Borrowings at such time.

Synthetic Lease Obligation ” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person, but which, upon the insolvency or bankruptcy of such Person would be characterized as indebtedness of such Person (without regard to accounting treatment).

Taxes ” means all present or future taxes, levies, imposts, duties or assessments imposed by any Governmental Authority, including any withholdings or backup withholdings with respect thereto and any interest, additions to tax or penalties applicable thereto.

 

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Threshold Amount ” means $7,500,000.

Total Outstandings ” means the aggregate Outstanding Amount of all Loans (including Swingline Loans) and L/C Obligations.

Transactions ” means (i) the negotiation, execution, delivery and effectiveness of the Loan Documents, (ii) the establishment of, and the preparation for and consummation of the initial public offering of, the Borrower (including the negotiation, execution, delivery and effectiveness of agreements between the Borrower and its Subsidiaries, on the one hand, and the WNR Group, on the other hand, the conversion of the Restricted Subsidiaries from corporations into limited liability companies and distributions and contributions of assets (including Equity Interests) in connection therewith) and (iii) the payment of fees and expenses incurred in connection with any of the foregoing.

Type ” means, with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

UCC ” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “ UCC ” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

United States ” and “ U.S. ” mean the United States of America.

Unreimbursed Amount ” has the meaning specified in Section 2.03(c)(i) .

Unrestricted Subsidiary ” means any Subsidiary of the Borrower designated as such pursuant to Section 6.17(a) and any Subsidiary of an Unrestricted Subsidiary. As of the Closing Date, there are no Unrestricted Subsidiaries.

US Bank ” means U.S. Bank National Association and its successors.

USA Patriot Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56).

U.S. Person ” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

U.S. Tax Compliance Certificate ” has the meaning assigned to such term in Section 3.01(e)(ii)(B)(3) .

 

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Voting Stock ” means, with respect to any person, any class or classes of Equity Interests pursuant to which the holders thereof have the general voting power under ordinary circumstances to vote in the election of the board of directors or equivalent governing body of such person.

Wells Fargo ” means Wells Fargo Bank, National Association and its successors.

WFS ” means Wells Fargo Securities, LLC and its successors.

Withholding Agent ” means any Loan Party and the Administrative Agent.

WNR ” means Western Refining, Inc. and its successors.

WNR Credit Facility ” means the Second Amended and Restated Revolving Credit Agreement, dated as of April 11, 2013, among WNR, the lenders party thereto and Bank of America, N.A., as administrative agent, swingline lender and letter of credit issuer.

WNR Indenture ” means the Indenture, dated as of March 25, 2013, among WNR, guarantors party thereto and U.S. Bank National Association, as trustee, paying agent, registrar and transfer agent.

WNR Group ” means WNR and its Subsidiaries (other than the General Partner, the Borrower and the Borrower’s Subsidiaries).

1.02 Other Interpretive Provisions . With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented, amended and restated or otherwise modified (subject to any restrictions on such amendments, supplements, amendments and restatements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and

 

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Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “ asset ” and “ property ” shall be construed to have the same meaning and effect, unless the context otherwise requires, and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ;” the words “ to ” and “ until ” each mean “ to but excluding ;” and the word “ through ” means “ to and including .”

(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

1.03 Accounting Terms .

(a) Generally . All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, except (x) as may be required by changes in GAAP or (y) as may be required by IFRS if the Borrower is required to apply IFRS as provided in Section 1.03(b), in each case subject to Section 1.03(b) below; provided that notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Statement of Financial Accounting Standards 159, The Fair Value Option for Financial Assets and Financial Liabilities , or any successor thereto (including pursuant to the Accounting Standards Codification), to value any Indebtedness of the Borrower or any Subsidiary at “fair value”, as defined therein, (ii) without giving effect to any change to GAAP occurring after the Closing Date as a result of the adoption of any proposals set forth in the Proposed Accounting Standards Update , Leases (Topic 840) , issued by the Financial Accounting Standards Board on August 17, 2010, or any other proposals issued by the Financial Accounting Standards Board in connection therewith, in each case if such change would require treating any lease (or similar arrangement conveying the right to use) as a capital lease where such lease (or such similar arrangement) was not required to be so treated under GAAP as in effect on the Closing Date. Notwithstanding the foregoing, for purposes of all computations of amounts and ratios referred to herein, Indebtedness of the Borrower and its Restricted Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

 

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(b) Changes in GAAP; IFRS . If (x) at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document or (y) the Borrower is required (as advised by the Borrower’s outside auditors of nationally recognized standing) to apply IFRS rather than GAAP and such change would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP or such application of IFRS, as the case may be (subject in each case to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein (or prior to the application of IFRS, as applicable) and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP (or to such application of IFRS, as applicable).

1.04 Rounding . Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

1.05 Times of Day . Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

1.06 Letter of Credit Amounts . Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided , however , that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof after such time, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time; provided , further , however , that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic decreases in the stated amount thereof after such time (unless such Letter of Credit also provides for one or more automatic increases after such time), at the time of any such decrease and thereafter, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to such decrease.

 

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ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 The Borrowings . Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “ Loan ”) to the Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time the outstanding the amount of such Lender’s Commitment; provided , however , that after giving effect to any Borrowing, (i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations and Swingline Obligations shall not exceed such Lender’s Commitment. Within the limits of each Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this Section 2.01 , prepay under Section 2.04 , and reborrow under this Section 2.01 . Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

2.02 Borrowings, Conversions and Continuations of Loans .

(a) Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 12:00 noon (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans; provided , however , that if the Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 12:00 noon four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Appropriate Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. Not later than 11:00 a.m., three Business Days before the requested date of such Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Appropriate Lenders. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Section 2.03(c) , each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one

 

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Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Notwithstanding the foregoing, Swingline Loans may not be converted or continued.

(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in Section 2.02(a) . In the case of a Borrowing, each Appropriate Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 2:00 p.m. on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 , the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Wells Fargo with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided , however , that if, on the date a Loan Notice with respect to a Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first , shall be applied to the payment in full of any such L/C Borrowings, and second , shall be made available to the Borrower as provided above.

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.

(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Wells Fargo’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

 

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(e) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than seven (7) Interest Periods in effect.

2.03 Letters of Credit .

(a) The Letter of Credit Commitment .

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03 , (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or its Restricted Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b) , and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower or its Restricted Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations and Swingline Obligations shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

(ii) The L/C Issuer shall not issue any Letter of Credit if:

(A) subject to Section 2.03(b)(iii) , the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or

(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date or the Borrower shall have Cash Collateralized 103% of the full amount then available for drawing under such Letter of Credit.

 

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(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;

(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;

(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount less than $5,000,

(D) such Letter of Credit is to be denominated in a currency other than Dollars;

(E) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or

(F) any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate the L/C Issuer’s Fronting Exposure (after giving effect to Section 2.15(a)(iv) ) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has Fronting Exposure.

(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.

(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in

 

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ARTICLE IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in ARTICLE IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit .

(i) The Borrower may from time to time request that the L/C Issuer issue or amend a Letter of Credit by delivering to the L/C Issuer a Letter of Credit Application (with a copy to the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 12:00 noon at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the L/C Issuer may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the L/C Issuer may require. Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may reasonably require.

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in ARTICLE IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or enter

 

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into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Letter of Credit.

(iii) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “ Auto-Extension Letter of Credit ”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “ Non-Extension Notice Date ”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided , however , that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii)  of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations .

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof. Not later than 12:00 noon on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an “ Honor Date ”), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the L/C Issuer by such

 

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time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “ Unreimbursed Amount ”), and the amount of such Lender’s Applicable Percentage thereof. In such event, the Borrower shall be deemed to have requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Administrative Agent may apply Cash Collateral provided for this purpose) for the account of the L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 2:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii) , each Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender’s payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03 .

(iv) Until each Lender funds its Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Percentage of such amount shall be solely for the account of the L/C Issuer.

(v) Each Lender’s obligation to make Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c) , shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other

 

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occurrence, event or condition, whether or not similar to any of the foregoing; provided , however , that each Lender’s obligation to make Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrower of a Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.

(vi) If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii) , the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Loan included in the relevant Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.

(d) Repayment of Participations .

(i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c) , if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by the Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

 

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(e) Obligations Absolute . The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any of its Subsidiaries.

The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will immediately notify the L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.

(f) Role of L/C Issuer . Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant

 

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or assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct as determined in a nonappealable judgment of a court of competent jurisdiction; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided , however , that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (v)  of Section 2.03(e) ; provided , however , that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit, all as determined in the final nonappealable judgment of a court of competent jurisdiction. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

(g) Applicability of ISP . Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of Credit.

(h) Letter of Credit Fees . The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage a Letter of Credit fee (the “ Letter of Credit Fee ”) for each Letter of Credit equal to the Applicable Rate for Letters of Credit times the daily amount available to be drawn under such Letter of Credit; provided , however , any Letter of Credit Fees otherwise payable for the account of a Defaulting Lender with respect to any Letter of Credit as to which such Defaulting Lender has not provided Cash Collateral satisfactory to the L/C Issuer pursuant to this Section 2.03 shall be (A) payable, to the maximum extent permitted by applicable Law, to the other Lenders in accordance with the upward adjustments in their respective Applicable Percentages allocable to such Letter of Credit pursuant to Section 2.15(a)(iv) , (B) retained by the Borrower to the extent that the Borrower has provided Cash Collateral to cover Fronting Exposure that has not been reallocated pursuant to Section 2.15(a)(iv) , and (C) with the balance of such fee, if any, payable to the L/C Issuer for its own account. For purposes of computing the daily amount available to be drawn under any

 

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Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . Letter of Credit Fees shall be (i) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

(i) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer . The Borrower shall pay directly to the L/C Issuer for its own account a fronting fee with respect to each Letter of Credit, at a rate of 0.125% per annum, computed on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . In addition, the Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

(j) Conflict with Issuer Documents . In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

(k) Letters of Credit Issued for Restricted Subsidiaries . Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Restricted Subsidiary, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Restricted Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Restricted Subsidiaries.

2.04 Prepayments .

(a) Optional . (i) Subject to the last sentence of this Section 2.04(a)(i) , the Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Administrative Agent not later than 12:00 noon (1) three Business Days prior

 

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to any date of prepayment of Eurodollar Rate Loans and (2) on the date of prepayment of Base Rate Loans; (B) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (C) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Eurodollar Rate Loans. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable Percentage). If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; provided that any such notice may be contingent upon the consummation of a refinancing, acquisition, merger or disposition transaction and if such refinancing, acquisition, merger or disposition is not consummated on the date of repayment specified in such notice, such notice may be rescinded, or the date of prepayment specified therein extended, upon further notice from the Borrower to the Administrative Agent. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05 .

(ii) The Borrower may, upon notice to the Swingline Lender (with a copy to the Administrative Agent), at any time and from time to time, voluntarily prepay Swingline Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swingline Lender and the Administrative Agent not later than 2:00 p.m. on the date of prepayment and (ii) any such prepayment shall be in a minimum principal amount of the lesser of (x) $100,000 and (y) the aggregate principal amount of all Swingline Loans then outstanding. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the prepayment amount specified in such notice shall be due and payable on the date specified therein; provided that any such notice may be contingent upon the consummation of a refinancing, acquisition, merger or disposition transaction and if such refinancing, acquisition, merger or disposition is not consummated on the date of repayment specified in such notice, such notice may be rescinded, or the date of prepayment specified therein extended, upon further notice from the Borrower to the Administrative Agent.

(b) Mandatory .

(i) To the extent that the Net Cash Proceeds of any Asset Sale or Extraordinary Receipt exceeds $10,000,000, the Borrower shall prepay an aggregate principal amount of Loans equal to 100% of such excess Net Cash Proceeds promptly after receipt thereof (or if the Borrower in good faith intends to use such Net Cash Proceeds to acquire, improve or maintain Pipeline Assets, Real Property or Easements related to Pipeline Assets or for capital assets to be used in any line of business not prohibited by Section 7.07 , then on or before the 365th day after such Asset Sale to the

 

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extent that, within such 365 day period, the Relevant Parties have not used such Net Cash Proceeds for such purpose, provided , that prepayment shall be required with such Net Cash Proceeds promptly after any earlier date on which the Borrower has determined not to use such Net Cash Proceeds for any such purpose) (all such prepayments to be applied as set forth in clause (iii) below).

(ii) If for any reason the Total Outstandings at any time exceed the Aggregate Commitments, the Borrower shall immediately prepay Loans and L/C Borrowings and/or Cash Collateralize the L/C Obligations (other than the L/C Borrowings) in an aggregate amount equal to such excess; provided , however , that the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.04(b) unless after the prepayment in full of the Loans and L/C Borrowings, the Total Outstandings exceed the Aggregate Commitments then in effect.

(iii) Prepayments of the Facility made pursuant to this Section 2.04(b) shall be applied, first , ratably to the L/C Borrowings, second , ratably to the outstanding Swingline Borrowings, third , ratably to the outstanding Base Rate Loans (other than the Swingline Loans), fourth , ratably to the outstanding Eurodollar Rate Loans, and fifth , in the case of prepayments under Section 2.04(b)(ii) only, to Cash Collateralize the remaining L/C Obligations; and, in the case of prepayments of the Facility required pursuant to clause (i) or (ii)  of this Section 2.04(b) , the amount remaining, if any, after the prepayment in full of all L/C Borrowings and Loans outstanding at such time and, in the case of prepayments under Section 2.04(b)(ii) only, the Cash Collateralization of the remaining L/C Obligations in full, may be retained by the Borrower. Upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from the Borrower or any other Loan Party) to reimburse the L/C Issuer or the Lenders, as applicable. Prepayments of the Facility made pursuant to this Section 2.04(b) shall not result in a permanent reduction of the Commitments.

2.05 Termination or Reduction of Commitments .

(a) Optional . The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Commitments, the Swingline Commitment, or the Letter of Credit Sublimit, or from time to time permanently reduce the Aggregate Commitments, the Swingline Commitment or the Letter of Credit Sublimit; provided that (i) any such notice shall be received by the Administrative Agent not later than 12:00 noon five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof and (iii) the Borrower shall not terminate or reduce (A) the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Aggregate Commitments, (B) the Swingline Commitment if, after giving effect thereto, the Outstanding Amount of the Swingline Obligations would exceed the Swingline Commitment, or (C) the Letter of Credit Sublimit if, after giving effect thereto, the Outstanding Amount of L/C Obligations not fully Cash Collateralized hereunder would exceed the Letter of Credit Sublimit.

 

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(b) Application of Commitment Reductions; Payment of Fees . The Administrative Agent will promptly notify the Lenders of any termination or reduction of the Swingline Commitment, the Letter of Credit Sublimit or the Aggregate Commitments under this Section 2.05 . Upon any reduction of the Aggregate Commitments, the Commitment of each Lender shall be reduced by such Lender’s Applicable Percentage of such reduction amount. All fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination.

2.06 Repayment of Loans . The Borrower shall repay (i) to the Lenders on the Maturity Date the aggregate principal amount of all Loans outstanding on such date and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the 15 th or last day of a calendar month (or if either such date is not a Business Day, the next succeeding Business Day) and is at least seven Business Days after such Swingline Loan is made; provided that on each date that a Borrowing (other than a Borrowing that is required to finance the reimbursement of a L/C Advance as contemplated by Section 2.03(c) ) is made, the Borrower shall repay all Swingline Loans then outstanding.

2.07 Interest .

(a) Subject to the provisions of Section 2.07(b) , (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Adjusted Eurodollar Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.

(i) While any Event of Default under Sections 8.01(a) (with respect to payments of principal only) or 8.01(f) exists, the Borrower shall pay interest on all outstanding Obligations hereunder at a fluctuating interest rate per annum equal to the Default Rate to the fullest extent permitted by applicable Laws.

(ii) Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on all outstanding Obligations hereunder at a fluctuating interest rate per annum equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iii) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

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(b) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

2.08 Fees . In addition to certain fees described in Sections 2.03(h) and (i) :

(a) Commitment Fee . The Borrower shall pay to the Administrative Agent for the account of each Lender (other than a Defaulting Lender) such Lender’s Applicable Percentage of an aggregate commitment fee (the “ Commitment Fee ”) equal to the Applicable Rate times the actual daily amount by which the Aggregate Commitments at such time exceeds the sum of (i) the Outstanding Amount of Loans and (ii) the Outstanding Amount of L/C Obligations. The Commitment Fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in ARTICLE IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period. The Commitment Fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. For the purposes of calculating the Commitment Fee, the aggregate principal amount of Swingline Loans then outstanding shall be deemed to be zero unless the Lenders have funded their participations therein.

(b) Other Fees .

(i) The Borrower shall pay to the Joint Lead Arrangers and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Engagement Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

(ii) The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon by the Borrower in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

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2.09 Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate .

(a) All computations of interest for Base Rate Loans computed using the prime rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.11(a) , bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(b) If, as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, (i) the Consolidated Total Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Consolidated Total Leverage Ratio would have resulted in higher pricing for such period: (A) the Borrower shall promptly (but in any event within ten (10) Business Days), after the Borrower discovers such inaccuracy or the Borrower is notified by the Administrative Agent (on behalf of the Required Lenders) of such inaccuracy, as the case may be, deliver to the Administrative Agent correct financial information for such period, as necessary and (B) the Administrative Agent shall determine and notify the Borrower of the amount of interest that would have been due in respect of any of the outstanding Obligations and the amount of the Commitment Fees and Letter of Credit Fees, if any, during such period had the pricing been determined based on the correct calculation of the Consolidated Total Leverage Ratio. The Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders or the L/C Issuer, as the case may be, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or the L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or the L/C Issuer, as the case may be, under Section 2.03(c)(iii) , 2.03(h) or 2.07 or under ARTICLE VIII . The Borrower’s obligations under this paragraph shall survive the termination of the Aggregate Commitments and the repayment of all other Obligations hereunder.

2.10 Evidence of Debt .

(a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or

 

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any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note in registered form under Section 5f.103-1(c) of the United States Treasury Regulations, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note with respect to the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

(b) In addition to the accounts and records referred to in Section 2.10(a) , each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swingline Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

2.11 Payments Generally; Administrative Agent’s Clawback .

(a) General . All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 3:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 3:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

(b) (i)  Funding by Lenders; Presumption by Administrative Agent . Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02 ) and may, in reliance

 

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upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(i) Payments by Borrower; Presumptions by Administrative Agent . Unless the Administrative Agent shall have received notice from the Borrower prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders, the Swingline Lender or the L/C Issuer hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Appropriate Lenders, the Swingline Lender or the L/C Issuer, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Appropriate Lenders, the Swingline Lender or the L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, the Swingline Lender or the L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b)  shall be conclusive, absent manifest error.

(c) Failure to Satisfy Conditions Precedent . If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this ARTICLE II , and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in ARTICLE IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

 

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(d) Obligations of Lenders Several . The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and Swingline Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and, except as set forth in Section 2.15(a)(iv) , no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 10.04(c) .

(e) Funding Source . Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

(f) Insufficient Funds . If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then due hereunder, such funds shall be applied (i)  first , toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii)  second , toward payment of principal and L/C Borrowings then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and L/C Borrowings then due to such parties.

2.12 Sharing of Payments by Lenders . If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time) of payment on account of the Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and subparticipations in L/C Obligations or Swingline Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by

 

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the Lenders ratably in accordance with the aggregate amount of Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:

(i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii) the provisions of this Section shall not be construed to apply to (x) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (y) the application of Cash Collateral provided for in Section 2.15 , or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swingline Loans to any assignee or participant, other than an assignment to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

2.13 Increase in Facility .

(a) Request for Increase . Provided there exists no Event of Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Borrower may from time to time, request an increase in the Aggregate Commitments by an amount (for all such requests) not exceeding $200,000,000; provided that (i) any such request for an increase shall be in a minimum amount of $25,000,000 and (ii) the Borrower may make a maximum of four such requests. At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders (or such shorter time as determined in the sole discretion of the Administrative Agent)).

(b) Lender Elections to Increase . Each Lender shall notify the Administrative Agent in writing within such time period whether or not it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage or such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment. For the avoidance of doubt, no Lender’s Commitment may be increased without the prior written consent of such Lender.

 

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(c) Notification by Administrative Agent; Additional Lenders . The Administrative Agent shall notify the Borrower and each Lender of the Lenders’ responses to each request made hereunder. Subject to the approval of the Administrative Agent and the L/C Issuer (which approvals shall not be unreasonably withheld), the Borrower may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(d) Effective Date and Allocations . If the Aggregate Commitments are increased in accordance with this Section, the Administrative Agent and the Borrower shall determine the effective date (the “ Increase Effective Date ”) and the final allocation of such increase. The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Increase Effective Date.

(e) Conditions to Effectiveness of Increase . As a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent (i) a favorable opinion of counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, covering such matters as may be reasonably requested by the Administrative Agent in connection with such increase and (ii) a certificate of each Loan Party dated as of the Increase Effective Date signed by a Responsible Officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, (B) in the case of the Borrower, certifying, as of such date, giving effect to amounts drawn or to be drawn under the Facility (as increased pursuant to this Section 2.13 ) as of such date, pro forma compliance with the financial covenants contained in Section 7.11 as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.01(a) or (b) , and (C) in the case of the Borrower, certifying that, before and after giving effect to such increase, (1) the representations and warranties contained in ARTICLE V and the other Loan Documents are true and correct in all material respects (except with respect to representations and warranties which are expressly qualified by materiality, which shall be true and correct in all respects) on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (except with respect to representations and warranties which are expressly qualified by materiality, which shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Section 2.13 , the representations and warranties contained in subsections (a) and (b)  of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b) , respectively, of Section 6.01 , and (2) no Event of Default exists. The Borrower shall borrow additional Loans from the Lenders whose Commitments have been increased and/or prepay any Loans outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to Section 3.05 ) to the extent necessary to keep the outstanding Loans ratable with any revised Applicable Percentages arising from any nonratable increase in the Commitments under this Section.

 

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(f) For the avoidance of doubt, any increase in Commitments pursuant to this Section 2.13 and any Loans resulting therefrom shall have the same terms (other than upfront fees paid to the Lenders) as the other Commitments and Loans and shall be benefitted by the Guarantees from the Guarantors and secured on a pari passu basis by the Collateral.

(g) Conflicting Provisions . This Section shall supersede any provisions in Section 2.12 or 10.01 to the contrary.

2.14 Cash Collateral .

(a) Certain Credit Support Events . Upon the request of the Administrative Agent or the L/C Issuer (i) if the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the Borrower shall, in each case, immediately Cash Collateralize 103% of the then Outstanding Amount of all L/C Obligations. At any time that there shall exist a Defaulting Lender, immediately upon the request of the Administrative Agent or the L/C Issuer, the Borrower shall deliver to the Administrative Agent Cash Collateral in an amount sufficient to cover 103% of all Fronting Exposure (after giving effect to Section 2.15(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

(b) Grant of Security Interest . All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at Wells Fargo. The Borrower, and to the extent provided by any Lender, such Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the Swingline Lender, the L/C Issuer and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.14(c) . If at any time the Administrative Agent determines in good faith that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure and other obligations secured thereby, the Borrower or the relevant Defaulting Lender will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency.

(c) Application . Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.14 or Sections 2.03 , 2.04 , 2.15 or 8.02 in respect of Letters of Credit or Swingline Loans shall be held and applied to the satisfaction of the specific L/C Obligations, Swingline Loans, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may be provided for herein.

 

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(d) Release . Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations or events giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 10.06(b)(vi) )) or (ii) the Administrative Agent’s good faith determination that there exists excess Cash Collateral; provided , however , (x) that Cash Collateral furnished by or on behalf of a Loan Party shall not be released during the continuance of a Default or Event of Default (and following application as provided in this Section 2.14 may be otherwise applied in accordance with Section 8.03 ), and (y) the Person providing Cash Collateral and the L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

2.15 Defaulting Lenders . (a)  Adjustments . Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

(i) Waivers and Amendments . That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 10.01 .

(ii) Reallocation of Payments . Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of a Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to ARTICLE VIII or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to Section 10.08 ), shall be applied at such time or times as may be determined by the Administrative Agent as follows: first , to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second , to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to the L/C Issuer or the Swingline Lender hereunder; third , if so determined by the Administrative Agent or requested by the L/C Issuer or the Swingline Lender, to be held as Cash Collateral for future funding obligations of that Defaulting Lender of any participation in any Letter of Credit or Swingline Loan; fourth , as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth , if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Loans under this Agreement; sixth , to the payment of any amounts then owing to the Lenders, the Swingline Lender or the L/C Issuer as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Swingline Lender or the L/C Issuer

 

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against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; seventh , to the payment of any amounts then owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and eighth , to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such payment is a payment of the principal amount of any Loans, Swingline Loans or L/C Advances in respect of which that Defaulting Lender has not fully funded its appropriate share, such payment shall be applied solely to pay the Loans of, Swingline Loans of, and L/C Advances owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, Swingline Loans of, or L/C Borrowings owed to, that Defaulting Lender. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.15(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) Certain Fees . Each Defaulting Lender (x) shall not be entitled to receive any commitment fee pursuant to Section 2.08(a) for any period during which such Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to such Defaulting Lender) (and the Borrower shall (A) be required to pay to the L/C Issuer the amount of such fee allocable to its Fronting Exposure arising from that Defaulting Lender and (B) not be required to pay the remaining amount of such fee that otherwise would have been required to have been paid to such Defaulting Lender) and (y) shall be limited in its right to receive Letter of Credit Fees as provided in Section 2.03(h) .

(iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure . During any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit or Swingline Loans pursuant to Section 2.03 , the “Applicable Percentage” of each non-Defaulting Lender shall be computed without giving effect to the Commitment of that Defaulting Lender; provided , that, (i) each such reallocation shall be given effect only if, at the date the applicable Lender becomes a Defaulting Lender, no Default or Event of Default exists; and (ii) the aggregate obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit and Swingline Loans shall not exceed the positive difference, if any, of (1) the Commitment of that non-Defaulting Lender minus (2) the aggregate Outstanding Amount of the Loans of that Lender.

(b) Defaulting Lender Cure . If the Borrower, the Administrative Agent, the Swingline Lender and the L/C Issuer agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash

 

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Collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.15(a)(iv) ), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

2.16 Swingline Loans .

(a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Availability Period in U.S. Dollars, in an aggregate principal amount at any time outstanding that will not result in (x) the aggregate principal amount of outstanding Swingline Loans exceeding the Swingline Commitment or (y) the Total Outstandings exceeding the Aggregate Commitments; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Borrowing. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay or repay and reborrow Swingline Loans. All Swingline Loans shall be Base Rate Loans under this Agreement.

(b) To request a Swingline Borrowing, the Borrower shall notify the Swingline Lender of such request by telephone (confirmed by a Swingline Loan Notice by telecopy) not later than 2:00 p.m. on the day of the proposed Swingline Borrowing. Each such notice and Swingline Loan Notice shall be irrevocable and shall specify (i) the requested date (which shall be a Business Day) of the Swingline Borrowing, (ii) the amount of the requested Swingline Borrowing and (iii) the location and number of the Borrower’s account to which funds are to be disbursed. Each Swingline Loan shall be in a minimum principal amount of $100,000. The Swingline Lender shall make each Swingline Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 4:00 p.m. to the account requested by the Borrower.

(c) The Swingline Lender may by written notice (a “ Swingline Lender Notice ”) given to the Administrative Agent not later than 12:00 noon on any Business Day when Swingline Loans are outstanding, require the Lenders to acquire participations on such Business Day in all or a portion of the outstanding Swingline Loans made by it. Such notice shall specify the aggregate amount of such Swingline Loans in which the Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each such Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided

 

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above, to pay to the Administrative Agent for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees that its respective obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds not later than 2:00 pm on the Business Day specified in the Swingline Lender Notice (and Section 2.11 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph (c), and thereafter payments by the Borrower in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or any other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be remitted promptly to the Administrative Agent; any such amounts received by the Administrative Agent shall be remitted promptly by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.

2.17 Extension of Maturity Date .

(a) Not earlier than one year after the Closing Date, nor later than six months prior to the Maturity Date, the Borrower may, upon notice to the Administrative Agent (which shall promptly notify the Lenders), request a one-year extension of the Maturity Date then in effect; provided that not more than two such extensions shall be effected during the term of this Agreement. Within 30 days of delivery to the Lenders of such notice, each Lender shall notify the Administrative Agent whether or not it consents to such extension (which consent may be given or withheld in such Lender’s sole and absolute discretion). Any Lender not responding within the above time period shall be deemed not to have consented to such extension. The Administrative Agent shall promptly notify the Borrower and the Lenders of the Lenders’ responses.

(b) The Maturity Date shall be extended only if the Required Lenders (calculated prior to giving effect to any replacements of Lenders permitted herein) (the “ Extending Lenders ”) have consented thereto. If so extended, the Maturity Date, as to the Extending Lenders, shall be extended to the date which is one year after the Maturity Date then in effect, effective as of the

 

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date the Administrative Agent has received the documents required to be delivered by Section 2.17(c)(ii) (the “ Extension Effective Date ”). The Administrative Agent and the Borrower shall promptly confirm to the Lenders such extension and the Extension Effective Date.

(c) Notwithstanding the foregoing, the extension of the Maturity Date pursuant to this Section shall not be effective with respect to any Lender unless:

(i) on the Extension Effective Date, no Default shall have occurred and be continuing, and no Default shall occur, as a result of such extension;

(ii) the Borrower shall deliver to the Administrative Agent (A) copies of resolutions certified by a Responsible Officer of the Borrower, or such other evidence as may be satisfactory to the Administrative Agent, demonstrating that the Borrower’s incurrence of indebtedness hereunder with a Maturity Date as extended pursuant to this Section has been duly authorized by all necessary corporate action and (B) a certificate signed by a Responsible Officer of the Borrower dated as of the Extension Effective Date certifying that (1) before and after giving effect to such extension, the representations and warranties contained in Article V and the other Loan Documents made by it are true and correct in all material respects (except with respect to representations and warranties which are expressly qualified by materiality, which shall be true and correct in all respects) on and as of the Extension Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects (except with respect to representations and warranties which are expressly qualified by materiality, which shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Section 2.17 , the representations and warranties contained in subsections (a) and (b)  of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b) , respectively, of Section 6.01 , (2) before and after giving effect to such extension no Default exists or will exist, and (3) no event has occurred since the date of the most recent audited financial statements of the Borrower delivered pursuant to Section 6.01(a) and (b)  that has had, or would reasonably be expected to have, a Material Adverse Effect;

(iii) The Borrower shall pay any Loans outstanding on the Maturity Date (prior to giving effect to any extension) as to any non-extending Lenders (the “ Non-Extending Lenders ”) (and pay any additional amounts required pursuant to Section 3.05 ) to the extent necessary to keep outstanding Loans ratable with any revised and new Applicable Percentages of all the Lenders effective as of the Extension Effective Date;

(iv) On the Maturity Date applicable to each Non-Extending Lender, all or any part of such Non-Extending Lenders’ Applicable Percentage of the Outstanding Amount of L/C Obligations shall be reallocated among the Extending Lenders and any new Lenders that become Lenders pursuant to Section 2.17(d) (“ Additional Commitment Lenders ”) in accordance with their respective Applicable Percentages (calculated without regard to the Non-Extending Lenders’ Commitments) but only to the extent that such reallocation does not cause, with respect to any Extending Lender or Additional

 

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Commitment Lender, the aggregate Outstanding Amount of the Loans of such Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swingline Obligations, to exceed such Lender’s Commitments as in effect at such time; and

(v) If the reallocation described in the preceding clause (iv) cannot, or can only partially, be effected, the Borrower shall Cash Collateralize the L/C Obligations to the extent that, after giving effect to the reallocation pursuant to the preceding clause (iv) and the payment required by the preceding clause (iii), the Total Outstandings exceed the Commitments of the Extending Lenders and the Additional Commitment Lenders. The amount of Cash Collateral provided by the Borrower pursuant to this clause (v) shall reduce the Non-Extending Lenders’ Applicable Percentage of the Outstanding Amount of L/C Obligations (after giving effect to any partial reallocation pursuant to the preceding clause (iv)) on a pro rata basis; and each Non-Extending Lender’s Commitment to make Loans, purchase participations in Swingline Loans, and purchase participations in L/C Obligations with respect to Letters of Credit issued after such Maturity Date shall terminate.

(d) The Borrower shall have the right to replace each Non-Extending Lender in accordance with Section 10.13 .

(e) This Section shall supersede any provisions in Section 2.06 or 10.01 to the contrary.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes .

(i) Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall to the extent permitted by applicable Laws be made free and clear of and without reduction or withholding for any Taxes. If, however, applicable Law requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.

(ii) If any applicable Withholding Agent shall be required by the Code to withhold or deduct any Taxes, including both U.S. Federal backup withholding and withholding taxes, from any payment, then (A) the applicable Withholding Agent shall withhold or make such deductions as are determined by the Withholding Agent to be

 

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required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the applicable Withholding Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions of Indemnified Taxes applicable to additional sums payable under this Section) the Administrative Agent or Lender, as the case may be, receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(b) Payment of Other Taxes by the Borrower . Without limiting the provisions of subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) Tax Indemnifications .

(i) Without limiting the provisions of subsection (a) or (b)  above, the Borrower shall, and does hereby, indemnify the Administrative Agent and each Lender, and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) withheld or deducted by the Borrower or the Administrative Agent or paid by the Administrative Agent or the Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The Borrower shall also, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender, the Swingline Lender or the L/C Issuer for any reason fails to pay indefeasibly to the Administrative Agent as required by clause (ii) of this subsection. A certificate as to the amount of any such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(ii) Without limiting the provisions of subsection (a) or (b)  above, each Lender shall, and does hereby, indemnify the Borrower and the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel for the Borrower or the Administrative Agent) incurred by or asserted against the Borrower or the Administrative Agent by any Governmental Authority as a result of the failure by such Lender, as the case may be, to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such Lender, as the case may be, to the Borrower or the Administrative Agent pursuant to subsection (e) . A

 

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certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender, as the case may be, under this Agreement or any other Loan Document against any amount due to the Borrower or the Administrative Agent under this clause (ii) . The agreements in this clause (ii) shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all other Obligations.

(d) Evidence of Payments . As soon as practicable after any payment of Taxes by the Borrower or the Administrative Agent to a Governmental Authority as provided in this Section 3.01 , the Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.

(e) Status of Lenders; Tax Documentation .

(i) Each Lender shall deliver to the Borrower and to the Administrative Agent, at the time or times prescribed by applicable Laws or when reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Laws or by the taxing authorities of any jurisdiction and such other reasonably requested documentation or information as will permit the Borrower or the Administrative Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any other Loan Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C) such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of all payments to be made to such Lender by the Borrower pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in the applicable jurisdiction.

(ii) Without limiting the generality of the foregoing:

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax

(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such

 

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Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed originals of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit G-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “ U.S. Tax Compliance Certificate ”) and (y) executed originals of IRS Form W-8BEN; or

(4) to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or Exhibit G-3 , IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-4 on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative

 

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Agent), executed originals of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D) if a Payment made to a Lender or the Administrative Agent under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender or Administrative Agent were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender or Administrative Agent shall deliver to the Borrower and the Administrative Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender or Administrative Agent has complied with such obligations of such Lender or Administrative Agent under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement. If to any Lender’s knowledge, any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

(iii) Each Lender shall promptly (A) notify the Borrower and the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws of any jurisdiction that the Borrower or the Administrative Agent make any withholding or deduction for Taxes from amounts payable to such Lender.

(iv) Each Lender agrees that if, to its knowledge, any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or promptly notify the Borrower or the Administrative Agent in writing of its legal inability to do so.

(f) Treatment of Certain Refunds . Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted

 

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from funds paid for the account of such Lender, as the case may be. If the Administrative Agent or any Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

(g) Defined Terms . For purposes of this Section  3.01 , the term “Lender” includes Swingline Lender and the L/C Issuer and the term “applicable Law” includes FATCA.

3.02 Illegality . If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to the Eurodollar Rate, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans and (y) if such notice asserts the

 

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illegality of such Lender determining or charging interest rates based upon the Eurodollar Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurodollar Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurodollar Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

3.03 Inability to Determine Rates . If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with an existing or proposed Base Rate Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended, and (y) in the event of a determination described in the preceding sentence with respect to the Eurodollar Rate component of the Base Rate, the utilization of the Eurodollar Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

3.04 Increased Costs; Reserves on Eurodollar Rate Loans .

(a) Increased Costs Generally . If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Adjusted Eurodollar Rate) or the L/C Issuer;

(ii) subject any Lender to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its Loans, Commitments, Letter of Credit Obligations or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii) impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit or participation therein;

 

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and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan the interest on which is determined by reference to the Eurodollar Rate (or of maintaining its obligation to make any such Eurodollar Rate Loan), or to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the L/C Issuer, the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.

(b) Capital Requirements . If any Lender or the L/C Issuer determines that any Change in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if any, regarding capital requirements or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement . A certificate of a Lender or the L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b)  of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

(d) Delay in Requests . Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies

 

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the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

3.05 Compensation for Losses . Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower; or

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13 ;

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05 , each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Eurodollar Rate Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

3.06 Mitigation Obligations; Replacement of Lenders .

(a) Designation of a Different Lending Office . If any Lender requests compensation under Section 3.04 , or the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender, the L/C Issuer, or any Governmental Authority for the account of any Lender or the L/C Issuer pursuant to Section 3.01 , or if any Lender gives a notice pursuant to Section 3.02 , then such Lender or the L/C Issuer shall, as applicable, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender or the L/C Issuer, such designation or assignment (i) would eliminate

 

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or reduce amounts payable pursuant to Section 3.01 or 3.04 , as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02 , as applicable, and (ii) in each case, would not subject such Lender or the L/C Issuer, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or the L/C Issuer, as the case may be. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender or the L/C Issuer in connection with any such designation or assignment.

(b) Replacement of Lenders . If any Lender requests compensation under Section 3.04 , or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 or if any Lender has given notice pursuant to Section 3.02 and, in each case, such Lender has not eliminated any such payments or the need for such notice by designating a different Lending Office in accordance with Section 3.06(a) , the Borrower may replace such Lender in accordance with Section 10.13 .

3.07 Survival . All of the Borrower’s obligations under this ARTICLE III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01 Conditions of Closing Date . The occurrence of the Closing Date is subject to satisfaction of the following conditions precedent:

(a) The Administrative Agent’s receipt of the following (which receipt may be by means of telecopy or other electronic transmission followed by originals), and which, in the case of the documents listed in clauses (iv) through (x) of this Section 4.01(a), are each in form and substance reasonably satisfactory to the Administrative Agent and, when applicable, properly executed by a Responsible Officer of the signing Loan Party:

(i) executed counterparts of this Agreement;

(ii) a Note executed by the Borrower in favor of each Lender requesting a Note at least one Business Day prior to the Closing Date;

(iii) a guaranty and collateral agreement, in substantially the form of Exhibit F (together with each other guaranty, collateral agreement and Joinder Agreement delivered pursuant to Section 6.12 , in each case as amended, the “ Security Agreement ”), duly executed by each Loan Party, together with:

(A) the certificates, if any, representing pledged Equity Interests referred to therein that constitute certificated securities (within the meaning of Section 8-102(a)(4) of the UCC), accompanied by undated stock powers executed in blank and the instruments, if any, evidencing items of pledged Indebtedness in a face amount in excess of $10,000,000 indorsed in blank;

 

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(B) proper financing statements (including transmitting utility financing statements, as appropriate) in form appropriate for filing under the Uniform Commercial Code of all jurisdictions that the Administrative Agent may reasonably deem necessary or desirable in order to perfect the Liens created under the Security Agreement, covering the Collateral described in the Security Agreement;

(C) completed requests for information, dated on or before the date of the Closing Date, listing all effective financing statements filed in the jurisdictions referred to in clause (B) above that name any Loan Party as debtor, together with copies of such other financing statements; and

(D) evidence that all other actions that the Administrative Agent may deem necessary or desirable in order to perfect the Liens created under and contemplated by the Security Agreement has been taken (including receipt of duly executed payoff letters and UCC-3 termination statements, if applicable), other than with respect to the matters contemplated in Section 6.12(c) and Section 6.19 and subject to Section 6.12(b) ;

(iv) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party and certifying that attached thereto is (A) the certificate of limited partnership or formation of such party and all amendments thereto, certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of incorporation or formation and (B) the limited partnership agreement, limited liability company agreement or other governing document of such party as in effect on the Closing Date;

(v) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each Loan Party is validly existing, in good standing and qualified to engage in business in (i) its jurisdiction of organization and (ii) each other jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

 

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(vi) a legal opinion of (A) Davis Polk & Wardwell LLP, counsel to the Loan Parties, (B) Richards, Layton & Finger, P.A., Delaware counsel to the Loan Parties and (C) Rodey, Dickason, Sloan, Akin & Robb, P.A., New Mexico counsel to the Loan Parties, in each case addressed to the Administrative Agent and each Lender;

(vii) a certificate of a Responsible Officer of the Borrower either (A) attaching copies of all material consents and approvals of third parties that may be required in connection with (x) the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party and (y) the consummation of the initial public offering of the Borrower and all transactions related thereto (including any transfers of assets or Equity Interests to the Borrower and its Subsidiaries by its parent companies), and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such material consents or approvals are so required;

(viii) a certificate signed by a Responsible Officer of the Borrower certifying (A) that the conditions specified in Sections 4.02(a) and 4.02(b) , mutatis mutandis , have been satisfied, (B) that there has been no event or circumstance since December 31, 2012, that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect, (C) that there is no action, suit, investigation or proceeding pending or, to the knowledge of the Borrower, threatened in any court or before any arbitrator or Governmental Authority in respect of the Facility or that could reasonably be expected to have a Material Adverse Effect, (D) that the Borrower does not have any Unrestricted Subsidiaries, and (E) that except for indebtedness among the Borrower and its Subsidiaries permitted by this Agreement, the Borrower does not have any indebtedness for borrowed money, other than indebtedness for borrowed money under the Facility;

(ix) (A) a certificate attesting to the Solvency of the Loan Parties on a consolidated basis, after giving effect to the Transactions, from the Borrower’s chief financial officer and (B) a certificate attesting to the Solvency of WNR and its Subsidiaries on a consolidated basis, after giving effect to the consummation of the initial public offering of the Borrower, from WNR’s chief financial officer;

(x) evidence that all insurance (other than title insurance) required to be maintained pursuant to the Loan Documents has been obtained and is in effect, together with the certificates of insurance, naming the Administrative Agent, on behalf of the Lenders, as an additional insured or loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Loan Parties that constitute Collateral;

(b) the Administrative Agent and the Joint Lead Arrangers shall be reasonably satisfied with (A) the pro forma capital and ownership structure of the Borrower and its Restricted Subsidiaries and the equity holding arrangements and all agreements relating thereto and (B) the flow of funds in connection with the Closing Date; and

 

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(c) the applicable Relevant Parties shall have been released from their guarantees under the WNR Credit Facility and the WNR Indenture and the assets of such Relevant Parties shall have been released from the liens under the WNR Credit Facility, in each case in form and substance reasonably satisfactory to the Administrative Agent.

(d) (i) all fees and expenses (to the extent such expenses have been invoiced at least one Business Day prior to the Closing Date) required to be paid to the Administrative Agent and the Joint Lead Arrangers on or before the Closing Date shall have been paid and (ii) all fees required to be paid to the Lenders on or before the Closing Date shall have been paid.

(e) the Administrative Agent and the Joint Lead Arrangers shall have received, (i) copies of the Fiscal Year-End 2011 Financial Statements, the Fiscal Year-End 2012 Financial Statements and an unaudited combined balance sheet of the predecessor of the Borrower and its subsidiaries at June 30, 2013, and the related combined statements of operations, division equity and cash flows for the six months then ended, (ii) an unaudited pro forma combined balance sheet of the Borrower and its Subsidiaries at June 30, 2013 and unaudited pro forma combined statements of operations of the Borrower and its Subsidiaries for the year ended December 31, 2012 and the six months ended June 30, 2013, in each case giving pro forma effect to the initial public offering of the Borrower and the transactions contemplated hereby as if such initial public offering and the transactions had occurred as of such date (in the case of such balance sheet) or as of January 1, 2012 (in the case of the pro forma statement of operations for the year ended December 31, 2012) or January 1, 2013 (in the case of the pro forma statement of operations for the six months ended June 30, 2013) and (iii) projections prepared by management of balance sheets, income statements and cash flow statements of the Borrower and its Subsidiaries, which will be quarterly for the first year after the Closing Date and annually thereafter for the term of the Facility.

(f) the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced at least one (1) Business Day prior to or on the Closing Date.

(g) the Administrative Agent shall have received, at least five (5) Business Days prior to the Closing Date, all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including but not restricted to the USA Patriot Act.

(h) the Administrative Agent shall have received a duly completed and executed Perfection Certificate, in substance reasonably satisfactory to the Administrative Agent.

(i) the closing of the initial public offering of the Borrower shall have occurred, or shall substantially contemporaneously occur, and shall have resulted or will result in gross proceeds of at least $200,000,000.

 

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(j) the Material Contracts contemplated by the Registration Statement shall be in all material respects on the terms contemplated by the Registration Statement, shall be in full force and effect, and no default shall have occurred and be continuing thereunder.

(k) the Administrative Agent shall have received a certificate signed by a Responsible Officer of the Borrower certifying that no material force majeure, abandonment or suspension of operations shall have occurred in respect of WNR’s El Paso, Texas and Gallup, New Mexico refineries and that no disposition of any such refinery is currently contemplated.

Upon request upon or after the Closing Date, the Administrative Agent shall deliver to the Borrower and each Lender a written confirmation stating that the Closing Date has occurred and the date thereof.

Without limiting the generality of the provisions of the last paragraph of Section 9.03 , for purposes of determining compliance with the conditions specified in this Section 4.01 , each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

4.02 Conditions to All Credit Extensions .

The obligation of each Lender to honor any Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following conditions precedent:

(a) The representations and warranties of the Borrower and each other Loan Party contained in ARTICLE V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects (except with respect to representations and warranties which are expressly qualified by materiality, which shall be true and correct in all respects) on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (except with respect to representations and warranties which are expressly qualified by materiality, which shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in Sections 5.05(a) and (b)  shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b) , respectively.

(b) (i) No Default or Event of Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds thereof, and (ii) after giving effect to such proposed Credit Extension, the Total Outstandings would not exceed the Aggregate Commitments.

 

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(c) The Administrative Agent and, if applicable, the L/C Issuer, shall have received a Request for Credit Extension in accordance with the requirements hereof.

Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and 4.02(b) have been satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Administrative Agent and the Lenders that:

5.01 Existence, Qualification and Power . Each Relevant Party (a) is (i) duly organized or formed, (ii) validly existing and (iii) as applicable, in good standing under the Laws of the jurisdiction of its organization or formation, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (a)(iii), (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention . The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is a party have been duly authorized by all necessary company or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict in any material respect with, or result in any material breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any material Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law in any material respect.

 

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5.03 Governmental Authorization; Other Consents . Except (i) for the filing or recording of any deeds of trust, mortgages, financing statements or other instruments necessary for the perfection of the security interests granted in the Collateral pursuant to the Collateral Documents and (ii) for the authorizations, approvals, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect, no material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person that has not been obtained or made is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents or (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof, subject to Permitted Encumbrances).

5.04 Binding Effect . This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to the effect of any applicable Debtor Relief Laws and other laws affecting creditors’ rights generally, concepts of reasonableness and general equitable principles.

5.05 Financial Statements; No Material Adverse Effect .

(a) The Fiscal Year-End 2012 Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the predecessor to the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) disclose, as and to the extent required by GAAP, the indebtedness and other liabilities of the predecessor to the Borrower and its Subsidiaries as of the date thereof.

(b) The unaudited combined balance sheet of the predecessor to the Borrower and its Subsidiaries at June 30, 2013, and the related combined statements of operations, division equity and cash flows for the six months then ended (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present the financial condition of the predecessor to the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

 

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(c) The unaudited pro forma financial statements delivered pursuant to Section 4.01(e)(ii) (i) are derived from the historical combined financial statements of the predecessor to the Borrower and its Subsidiaries as of the date of, and for the periods covered by, such unaudited pro forma financial statements and (ii) contain such unaudited pro forma adjustments as the Borrower believes to be reasonable to reflect, on a pro forma basis, the consummation of the transactions contemplated hereby to occur on the Closing Date.

(d) The projections delivered pursuant to Section 4.01(e)(iii) were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such projections, and represented, at the time of delivery, the Borrower’s reasonable estimate of its future financial condition and performance.

(e) Since December 31, 2012, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

5.06 Litigation . Except as set forth on Schedule 5.06 , there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Restricted Subsidiaries or against any of their properties or revenues that either relates to the Loan Documents or has had or could reasonably be expected to have a Material Adverse Effect.

5.07 Material Contracts; No Default .

(a) Other than as set forth on Schedule 5.07 , as of the Closing Date there are no Material Contracts to which any Loan Party is a party.

(b) Except to the extent that any such default or termination both (i) could not reasonably be expected to result in a failure to comply with Section 7.11 in any future period and (ii) could not reasonably be expected to have a Material Adverse Effect, no Loan Party is in default under any Material Contracts and no Material Contract has terminated other than at its stated term.

5.08 Ownership of Property; Liens; Investments .

(a) Each Loan Party has good title to, or valid leasehold interests in, or valid right to use and/or occupy, all Real Property and Easements material to the ordinary conduct of its business, except for such defects in title that individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

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(b) Except to the extent that flood insurance complying with Section 6.18 hereof has been obtained with respect thereto, no building (defined as a structure with four walls and a roof) constituting Collateral that is located on any such Real Property or Easements is located in a special flood hazard area as designated by any Governmental Authority.

(c) [RESERVED];

(d) Schedule 5.08(d) sets forth a complete and accurate list of all Investments, other than Equity Interests in other Relevant Parties and cash and Cash Equivalents, that are held by any Loan Party on the Closing Date, showing as of the date hereof the amount, obligor or issuer and maturity, if any, thereof.

(e) To the knowledge of the Borrower, the Pipeline Systems are located upon the Real Property owned or leased by or as to which an Easement has been granted to, the applicable Relevant Parties (or their predecessors in interest) and their respective successors and assigns, except where the failure of the Pipeline Systems to be so located, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(f) To the knowledge of the Borrower, the Easements and Real Property held or leased by the applicable Relevant Parties establish a contiguous and continuous right-of-way for the Pipeline Systems and the applicable Relevant Parties and their respective successors and assigns possess the right to construct, operate and maintain the Pipeline Systems in, over, under or across the land covered thereby in accordance with prudent industry practice, except where the failure of such Easements and Real Property to so establish such right-of-way or so possess such rights, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(g) To the knowledge of the Borrower, the Pipeline Systems are located within the confines of the Easements and the other Real Property held or leased by the Relevant Parties and do not encroach outside of the Easements and Real Property held or leased by the Relevant Parties upon any adjoining property in any way that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(h) The Borrower and each of its Restricted Subsidiaries owns or has sufficient rights to use all the patents, trademarks, service marks, trade names, copyrights, trade secrets, know-how or other intellectual property rights necessary for the present conduct of its businesses, in each case without any known conflict with the rights of others, except in each case where the failure to own or have such rights, or such conflict, as the case may be, could reasonably be expected to have a Material Adverse Effect.

 

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5.09 Environmental Compliance .

(a) The Loan Parties and their respective Restricted Subsidiaries conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Borrower has reasonably concluded that such Environmental Laws and claims are not, individually or in the aggregate, reasonably expected to have a Material Adverse Effect.

(b) Except for matters that are not reasonably expected to have a Material Adverse Effect: (i) none of the properties currently or formerly owned or operated by any Loan Party is listed or proposed for listing on the NPL or on the CERCLIS or any analogous state or local list or is adjacent to any such property; (ii) to the knowledge of the Loan Parties (other than operating tanks present at the terminals or at other properties of the Loan Parties), there are no underground or above-ground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or operated by any Loan Party or, to the best of the knowledge of the Loan Parties, on any property formerly owned or operated by any Loan Party; (iii) to the knowledge of the Loan Parties, there is no asbestos or asbestos-containing material on any property currently owned or operated by any Loan Party; and (iv) Hazardous Materials have not been released, discharged or disposed of by any Loan Party on any property currently or formerly owned or operated by any Loan Party.

5.10 Insurance . The properties of the Borrower and its Restricted Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Restricted Subsidiary operates.

5.11 Taxes . The Borrower and its Subsidiaries have filed all material Federal, state and other tax returns and reports required to be filed, and have paid all material Federal, state and other taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided to the extent required by GAAP. There is no proposed tax assessment against the Borrower or any Subsidiary that would, if made, have a Material Adverse Effect. No Loan Party nor any Subsidiary thereof is a party to any tax sharing agreement except with other Relevant Parties.

 

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5.12 ERISA Compliance .

(a) Each Pension Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws. Each Pension Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS (or an application for such a letter is currently being processed by the IRS with respect thereto) or is maintained under a prototype document that has received a favorable opinion letter from the IRS and, to the best knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification. The Borrower and each ERISA Affiliate have made all required contributions that are due and owing to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

(b) There are no pending or, to the best knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Pension Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Pension Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(c) Except as could not reasonably be likely to result in a Material Adverse Effect, (i) no ERISA Event has occurred or could reasonably be expected to occur; (ii) the Borrower and each ERISA Affiliate have met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan and no waiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) no Pension Plan has been terminated by the plan administrator thereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction involving any Pension Plan that could be subject to Section 4069 or 4212(c) of ERISA.

5.13 Subsidiaries; Equity Interests; Loan Parties . As of the Closing Date, (a) no Loan Party has any Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13 , each identified as either Restricted or Unrestricted, (b) all of the outstanding Equity Interests in any such Subsidiaries that are owned by any Loan Party have been validly issued and are owned by the Loan Parties in the percentages specified on Part (a) of Schedule 5.13 , free and clear of, in the case of any such Restricted Subsidiaries, all Liens except those created under the Collateral Documents and (c) no Loan Party has any equity investments in any other corporation or entity other than those specifically disclosed in Part (b) of Schedule 5.13 . Set forth on Part (c) of Schedule 5.13 is a complete and accurate list of all Loan Parties as of the Closing Date, showing (as to each Loan Party) the jurisdiction of its organization, the address of its principal place of business and its U.S. taxpayer identification number. The copy of the charter of each Loan Party and each amendment thereto provided pursuant to Section 4.01(a)(iv) is a true and correct copy of each such document as of the Closing Date, each of which is valid and in full force and effect as of the Closing Date.

 

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5.14 Margin Regulations; Investment Company Act .

(a) None of the proceeds of any Loans have been used (i) to purchase or carry margin stock (within the meaning of Regulation U issued by the FRB) or (ii) in violation of Regulation U issued by the FRB.

(b) None of the Borrower or any other Loan Party is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

5.15 Disclosure . The reports, financial statements, certificates, Information Memorandum and other information furnished in writing by or on behalf of any Relevant Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case as modified or supplemented by other information so furnished), taken as a whole, do not contain any material misstatement of fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information and projected operations of Pipeline Systems and other assets, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time, it being understood that projected results may differ materially from actual results.

5.16 Compliance with Laws . Each Relevant Party is in compliance in all material respects with the requirements of all Laws (including in respect of State Pipeline Regulatory Authorities) and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

5.17 Solvency . The Borrower and its Restricted Subsidiaries, on a consolidated basis are Solvent.

 

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5.18 Casualty, Etc . Neither the businesses nor the properties of the Loan Parties are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. The Borrower and its Restricted Subsidiaries are not engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect. There is (i) no strike, labor dispute, slowdown or stoppage pending against the Borrower or any Restricted Subsidiary or, to the knowledge of the Borrower and each Restricted Subsidiary, threatened against the Borrower or any Restricted Subsidiary and (ii) to the knowledge of the Borrower and each Restricted Subsidiary, no union representation proceeding is pending with respect to the employees of the Borrower or any Restricted Subsidiary and no union organizing activities are taking place, except (with respect to any matter specified in clause (i) or (ii) above, either individually or in the aggregate) such as could not reasonably be expected to have a Material Adverse Effect.

5.19 Collateral Documents . Except as expressly contemplated by the Collateral Documents, the provisions of the Collateral Documents are effective to create in favor of the Administrative Agent for the benefit of the Secured Parties a legal, valid and enforceable first priority Lien (subject to any Permitted Encumbrances which would have priority over the Liens securing the Obligations) on all right, title and interest of the respective Loan Parties in the Collateral described therein.

5.20 State and Federal Regulation .

In order to comply with the Interstate Commerce Act, the Energy Policy Act, and regulations promulgated by the FERC to implement those statutes, each Relevant Party, to the extent required, has on file with the FERC tariffs that govern transportation on the Pipeline Systems, except (i) any FERC Jurisdictional Requirement that has been ordered or imposed but for which the time period for compliance therewith has not expired, or any FERC Jurisdictional Requirement that has not yet been ordered, imposed or waived or (ii) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. None of the Relevant Parties or any other Person that now owns an interest in any of the Pipeline Systems has been within the past three (3) years or is the subject of a complaint, investigation or other proceeding at the FERC regarding their respective rates or practices with respect to the Pipeline Systems. No complaint or investigation is currently pending before the FERC, nor to the knowledge of the Relevant Party is any such complaint or investigation currently contemplated, that could result in, if adversely determined to the position or interest of the Relevant Party, or could reasonably be expected to result in, a Material Adverse Effect.

 

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5.21 U.S. Sanctions . No Relevant Party and, to the knowledge of the Relevant Parties, no controlled Affiliate is, or is owned or controlled by Persons that are, the subject of any sanctions administered by the Office of Foreign Asset Control (“ OFAC ”). The Relevant Parties will not knowingly use the proceeds of the Loans to fund any activities of any Person, or in any country, that is the subject of sanctions administered by OFAC, except as permitted under U.S. law.

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder (other than (A) contingent indemnification, expense reimbursement or yield protection obligations and (B) obligations and liabilities under Secured Cash Management Agreements and Secured Hedge Agreements as to which arrangements satisfactory to the applicable Cash Management Bank or Hedge Bank shall have been made) shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding (other than Letters of Credit that have been Cash Collateralized or as to which other arrangements satisfactory to the Administrative Agent and the L/C Issuer shall have been made), the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01 , 6.02 , 6.03 and 6.11 ) cause each Restricted Subsidiary to:

6.01 Financial Statements . Deliver to the Administrative Agent (which shall furnish such financial statements and information to the Lenders):

(a) By the date required to be delivered to the SEC (as such date may be extended by the SEC) but in no event later than 90 days after the end of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of operations, changes in partners’ equity and cash flows for such fiscal year (or, in the case of the fiscal year ending December 31, 2013, the period from the Closing Date through December 31, 2013), and starting with the financial statements delivered for the fiscal year ending December 31, 2014, to the extent required to be delivered to the SEC, setting forth in each case in comparative form the figures for the previous fiscal year (and, if there are any Unrestricted Subsidiaries, a reconciliation, reflecting such financial information for the Borrower and the Restricted Subsidiaries, on the one hand, and the Borrower and the Subsidiaries, on the other hand, reflecting adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries from such consolidated financial statements), all (except with respect to such reconciliation) prepared in accordance with GAAP, audited and accompanied by a report and opinion of Deloitte & Touche LLP or an independent certified public accountant of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;

 

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(b) By the date required to be delivered to the SEC (as such date may be extended by the SEC) but in no event later than 45 days (or 60 days in the case of the fiscal quarter ending September 30, 2013) after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statement of operations for such fiscal quarter and the related consolidated statements of operations and cash flow for the portion of the Borrower’s fiscal year then ended, and starting with the financial statements delivered for the fiscal quarter ending March 31, 2015, to the extent required to be delivered to the SEC, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year (and, if there are any Unrestricted Subsidiaries, a reconciliation, reflecting such financial information for the Borrower and the Restricted Subsidiaries, on the one hand, and the Borrower and the Subsidiaries, on the other hand, reflecting adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries from such consolidated financial statements), all (except with respect to such reconciliation) certified by a Responsible Officer of the Borrower as fairly presenting the financial condition, results of operations and cash flows of the Borrower and its Restricted Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes;

(c) within 60 days after December 31, 2014, and within 45 days after the end of each fiscal year of the Borrower thereafter, an annual budget of the Borrower and its Restricted Subsidiaries on a consolidated basis, including forecasts prepared by management of the Borrower, of projected debt balances, statements of operations and capital expenditure budget of the Borrower and its Restricted Subsidiaries on a quarterly basis for the immediately following fiscal year and in form, scope and detail substantially similar to the annual business plan and budget delivered to the General Partner (with the exception that the materials delivered under this Section 6.01(c) shall be presented on a quarterly basis).

As to any information contained in materials furnished pursuant to Section 6.01(c) , the Borrower shall not be separately required to furnish such information under Section 6.01(a) or (b)  above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in Sections 6.01(a) and (b)  above at the times specified therein.

6.02 Certificates; Other Information . Deliver to the Administrative Agent (which shall furnish such certificates and information to the Lenders):

(a) (i) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b) , (A) a duly completed Compliance Certificate signed by a Responsible Officer of the Borrower and (B) a management discussion and analysis required for filings with the SEC and (ii) concurrently with the delivery of the financial statements referred to in Section 6.01(a), an updated Perfection Certificate;

 

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(b) promptly after any request by the Administrative Agent, or any Lender through the Administrative Agent, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of any Loan Party or any audit of any of them;

(c) promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the public investors in the Borrower generally, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any national securities exchange, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(d) promptly after the furnishing thereof, copies of any statement or report furnished to any holder of loans, notes or debt securities in excess of the Threshold Amount of any Loan Party pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02 ;

(e) [RESERVED];

(f) promptly, and in any event within five Business Days after receipt thereof by any Loan Party, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of any Loan Party;

(g) not later than five Business Days after receipt thereof by any Loan Party, copies of all notices of default, demands, amendments, waivers and other modifications so received under or pursuant to any Material Contract, in each case only to the extent that the Borrower was required to file a report with the SEC on Form 8-K with respect thereto;

(h) promptly after the assertion or occurrence thereof, notice of any action or proceeding against or of any noncompliance by any Relevant Party with any Environmental Law or Environmental Permit that could reasonably be expected to have a Material Adverse Effect;

(i) promptly, and in any event within 45 days after the end of each year, a report of all new Material Contracts executed during such year and all Material Contracts that expired or were terminated during such year, in each case only to the extent that the Borrower was required to file a report with the SEC on Form 8-K with respect thereto;

(j) promptly, such additional information regarding the business, financial, legal or corporate affairs of any Relevant Party (including summaries of insurance coverage), or compliance with the terms of the Loan Documents, as the Administrative Agent, or the Required Lenders through the Administrative Agent, may from time to time reasonably request; and

 

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(k) promptly, upon consummation of a Material Permitted Acquisition, deliver an updated Perfection Certificate to the Administrative Agent and the Lenders, in substance reasonably satisfactory to the Administrative Agent.

Documents required to be delivered pursuant to Section 6.01 or Section 6.02 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower emails such documents to the Administrative Agent or the Lenders, as applicable, or posts such documents or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 10.02 ; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions ( i.e. , soft copies) of such documents. Notwithstanding anything contained herein, upon the request of the Administrative Agent, the Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(a) to the Administrative Agent. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or WFS will make available to the Lenders, the Swingline Lender and the L/C Issuer materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “ Borrower Materials ”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “ Platform ”) and (b) certain of the Lenders (each, a “ Public Lender ”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that it will identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, WFS, the Swingline Lender, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States Federal and state securities laws ( provided , however , that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07 ); (y) all Borrower Materials

 

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marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Administrative Agent and WFS shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.” Notwithstanding the foregoing, the Borrower shall be under no Obligation to mark any Borrower Materials “PUBLIC”.

6.03 Notices . Promptly notify the Administrative Agent (which shall furnish such notice and information to the Lenders) of:

(a) the occurrence of any Default;

(b) any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect;

(c) the occurrence of any ERISA Event;

(d) any material change in accounting policies or financial reporting practices by any Loan Party, including any determination by the Borrower referred to in Section 2.09(b) ;

(e) the (i) occurrence of any Asset Sale for which the Borrower is required to make a mandatory prepayment pursuant to Section 2.04(b)(i) and (ii) receipt of any Extraordinary Receipt for which the Borrower is required to make a mandatory prepayment pursuant to Section 2.04(b)(i) ;

(f) any notice, summons, citation, proceeding or order received from the FERC or any State Pipeline Regulatory Agency or any other Governmental Authority concerning the regulation of any material portion of the Pipeline Systems, in each case to the extent that such notice, summons, citation, proceeding or order could reasonably be expected to result in a Material Adverse Effect;

(g) (i) of any threatened or actual litigation against a Relevant Party involving amounts in dispute in excess of the Threshold Amount and (ii) of a default under or termination of a Material Contract if a filing on Form 8-K shall be required to be filed with the SEC in respect thereof; or

(h) of any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) with respect to assets or the business of the Relevant Parties that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

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Each notice pursuant to Section 6.03 (other than Section 6.03(e) or (f) ) shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity the provisions of this Agreement and any other Loan Document that have been breached.

6.04 Payment of Obligations . Pay and discharge as the same shall become due and payable all its material obligations and liabilities, including (a) all material tax liabilities, assessments and governmental charges or levies upon it or its properties or assets; (b) all material lawful claims which, if unpaid, would by law become a Lien upon its property; and (c) all Indebtedness in an aggregate amount in excess of the Threshold Amount, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement applicable to such Indebtedness, unless with respect to any obligation or liability described in clauses (a) , (b)  or (c) , (A) such obligation or liability is being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower and each applicable Restricted Subsidiary, as applicable or (B) the failure to make such payment could not reasonably be expected to have a Material Adverse Effect.

6.05 Preservation of Existence, Etc . (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05 ; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

6.06 Maintenance of Properties . (a) Maintain, preserve and protect all of its material properties and equipment (including, without limitation, all material properties and equipment included in the Pipeline Systems) necessary in the operation of its business in good working order and condition, ordinary wear and tear and casualty excepted; (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; (c) use the standard of care typical in the midstream industry in the operation and maintenance of its facilities, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; (d) maintain or cause the maintenance of the Easements for the Pipeline Systems and the other Real Property associated therewith, which individually and in the aggregate, could, if not maintained, reasonably be expected to have a Material Adverse Effect; (e) maintain such rights of ingress and egress necessary to permit the applicable Loan Parties to inspect, operate, repair and maintain the

 

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Pipeline Systems, the Easements and the other Real Property associated therewith to the extent that the failure to maintain such rights, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect and provided that the applicable Loan Parties may hire third parties to perform these functions; and (f) maintain all material agreements, licenses, permits and other rights required for any of the foregoing described in clauses (d), (e)  and (f)  of this Section 6.06 in full force and effect in accordance with their terms, timely make any payments due thereunder, and prevent any default thereunder that could result in a termination or loss thereof, except any such failure to maintain, pay or default that could not reasonably, individually or in the aggregate, be expected to cause a Material Adverse Effect.

6.07 Maintenance of Insurance . Maintain with financially sound and reputable insurance companies not Affiliates of the Borrower, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business (including business interruption insurance) of such types and in such amounts as are customarily carried under similar circumstances by such other Persons and providing (for so long as such provision is commercially available, provided that, if not so available, the Borrower has notified the Administrative Agent thereof) for not less than 30 days’ prior notice to the Administrative Agent of termination, lapse or cancellation of such insurance.

6.08 Compliance with Laws . Comply in all material respects with the requirements of all Laws (including without limitation, the Interstate Commerce Act, the Energy Policy Act, regulations promulgated by the FERC, rules, regulations and orders of any State Pipeline Regulatory Agency, anti-money laundering laws, the United States Foreign Corrupt Practices Act of 1977 and OFAC regulations) and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

6.09 Books and Records . (a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Restricted Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Restricted Subsidiary, as the case may be.

6.10 Inspection Rights . Permit representatives and independent contractors of the Administrative Agent (or, when an Event of Default exists, the Administrative Agent and one Lender selected by the

 

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Required Lenders) to visit and inspect any of its properties once per calendar year, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided , however , that when an Event of Default exists the Administrative Agent and one Lender selected by the Required Lenders (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice and as many times during any calendar year as the Administrative Agent or such Lender shall request.

6.11 Use of Proceeds . Use the proceeds of the Credit Extensions for working capital (including the issuance of Letters of Credit), acquisitions, distributions and other general business purposes not in contravention of any Law or of any Loan Document.

6.12 Additional Subsidiaries; Additional Security .

(a) Upon the formation or acquisition of any new direct or indirect Restricted Subsidiary by any Relevant Party, then the Borrower shall, at the Borrower’s expense:

(i) within thirty (30) days (or such longer period as permitted by the Administrative Agent in its sole discretion) after such formation or acquisition of such Restricted Subsidiary (other than an Excluded Subsidiary), cause such Restricted Subsidiary to duly execute and deliver to the Administrative Agent a Joinder Agreement and other Collateral Documents, as reasonably specified by and in form and substance reasonably satisfactory to the Administrative Agent, guaranteeing the Borrower’s obligations under the Loan Documents and securing payment of all the Obligations of such Restricted Subsidiary under the Loan Documents with a lien on such Restricted Subsidiary’s personal property of the types covered by the Security Agreement;

(ii) within thirty (30) days (or such longer period as permitted by the Administrative Agent in its sole discretion) after such formation or acquisition of such Restricted Subsidiary, take such actions, or cause the applicable Loan Party to take such actions, as may be necessary to ensure a valid first priority perfected Lien over 100% of the Equity Interests of such Restricted Subsidiary (unless such Equity Interests are Excluded Assets) held by the Borrower or the applicable Loan Party; and

(iii) within thirty (30) days (or such longer period as permitted by the Administrative Agent in its sole discretion) after such formation or acquisition, deliver to the Administrative Agent, upon the request of the Administrative Agent in its reasonable discretion, a signed copy of an opinion of counsel for the Loan Parties reasonably acceptable to the Administrative Agent relating to such Joinder Agreement and Collateral Documents as the Administrative Agent may reasonably request.

 

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(b) At any time upon the request of the Administrative Agent, promptly execute and deliver any and all further instruments and documents and take all such other action as the Administrative Agent may reasonably deem necessary or desirable in order to perfect, protect, and preserve the Liens of the Collateral Documents; provided that, anything in this Agreement or any other Loan Document to the contrary notwithstanding, neither the Borrower nor any Restricted Subsidiary shall be required to (i) enter into control agreements with respect to any securities accounts, commodity accounts or uncertificated securities, (ii) make any filings in the United States Patent and Trademark Office, or any other office in any jurisdiction outside of the United States, in respect of any patents, trademarks or patent or trademark licenses, (iii) make any filings outside the United States in respect of any copyrights or copyright licenses or any filings in the United States Copyright office in respect of immaterial copyrights or copyright licenses, (iv) make any fixture filings other than in connection with a mortgage (other than any transmitting utility filings), (v) deliver any instruments or certificated securities or other collateral, other than instruments evidencing indebtedness to the extent that the face amount of any such instrument exceeds $10,000,000 and certificated securities constituting equity interests in direct or indirect Subsidiaries of the Borrower or (vi) except for control agreements with respect to deposit accounts or as provided in (v) above, take any action to cause the Administrative Agent to have “control” of any Collateral.

(c) To the extent the Borrower or any Restricted Subsidiary (other than any Excluded Subsidiary) acquires, or to the extent that any Restricted Subsidiary that is formed or acquired by a Relevant Party owns or leases at the time of such acquisition or formation, any owned or leased Real Property or Easements (in the case of leased Real Property, only if leased from the WNR Group) (other than Excluded Assets), that individually or collectively as part of a Pipeline System exceed a fair market value (as reasonably determined by the Borrower) of $2,500,000, promptly, and in any event within sixty (60) days of such request (or such longer period as permitted by the Administrative Agent in its sole discretion), execute and deliver any and all instruments and documents necessary to grant Liens in such assets to the Administrative Agent for the benefit of the Secured Parties and take such other actions as the Administrative Agent may reasonably deem necessary or desirable in order to perfect, protect and preserve such Liens required herein. With respect to any such owned and leased Real Property or Easements, promptly upon request by the Administrative Agent, or the Required Lenders through the Administrative Agent, deliver such other information, instruments and documents (including, without limitation, opinions of counsel and in the case of Real Property other than Real Property relating to pipelines and related Easements, lenders title policies, surveys, zoning reports and existing engineering and environmental assessment reports) as the Administrative Agent (or its counsel) may reasonably request in connection with the satisfaction of the requirements set forth in this Section 6.12 , each in scope, amount, form and substance reasonably satisfactory to the Administrative Agent.

 

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(d) Notwithstanding the foregoing, the assets required to be pledged to the Administrative Agent under this Section shall not include Excluded Assets.

(e) Notwithstanding the foregoing, (1) the Equity Interests required to be delivered pursuant to this Section 6.12 shall not include any Equity Interests of a Foreign Subsidiary created or acquired after the Closing Date and (2) no Foreign Subsidiary shall be required to take the actions specified in this Section 6.12 ; provided the exception set forth in clause (1) above shall not apply to (A) Voting Stock of any Subsidiary which is a first-tier CFC representing 65% of the total voting power of all outstanding Voting Stock of such Subsidiary and (B) 100% of the first-tier CFC’s Equity Interests not constituting Voting Stock, except that any such Equity Interests constituting “stock entitled to vote” within the meaning of Treasury Regulation Section 1.956-2(c)(2) shall be treated as Voting Stock for purposes of this Section 6.12(e) .

6.13 Compliance with Environmental Laws . To the extent that failure to do any of the following could reasonably be expected to have a Material Adverse Effect: comply with all applicable Environmental Laws and Environmental Permits, obtain and renew all Environmental Permits necessary for its operations and properties, and conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws; provided , however , that neither the Borrower nor any of its Restricted Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances to the extent required by GAAP.

6.14 Further Assurances . Promptly upon reasonable request by (a) the Administrative Agent, or the Required Lenders through the Administrative Agent, correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, but subject to the proviso to Section 6.12(b), and (b) the Administrative Agent, or the Required Lenders through the Administrative Agent, do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or the Required Lenders through the Administrative Agent, may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Loan Documents, (ii) to the fullest extent permitted by applicable law, subject any Loan Party’s properties, assets, rights or interests (other than Excluded Assets) to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party is or is to be a party, and cause each of its Restricted Subsidiaries to do so.

 

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6.15 Compliance with Terms of Leaseholds . Make all payments and otherwise perform all obligations in respect of all leases of Real Property and Easements to which the Borrower or any of its Restricted Subsidiaries is a party, keep such leases in full force and effect and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled, notify the Administrative Agent of any material default by any party with respect to such leases and cooperate with the Administrative Agent in all respects to cure any such material default, and cause each of its Restricted Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

6.16 Material Contracts . Perform and observe in all material respects all of the terms and provisions of each Material Contract to be performed or observed by it within any grace period applicable thereto and, in accordance with prudent business practices, enforce its rights under each Material Contract, except, in any case, where the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

6.17 Unrestricted Subsidiaries . (a) The Borrower may at any time designate, by a certificate executed by a Responsible Officer of the Borrower, any Restricted Subsidiary as an Unrestricted Subsidiary; provided that (i) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (ii) the Borrower is in pro forma compliance with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.01(a) or (b)  and (iii) at all times after giving effect to such designation, (A) such Unrestricted Subsidiary shall have no Indebtedness other than Non-Recourse Debt, other than as contemplated by Section 7.02(d)(iii) , (B) neither the Borrower nor any Restricted Subsidiary will have any direct or indirect obligation for any obligation or liability of such Unrestricted Subsidiary, other than as contemplated by Section 7.02(d)(iii) and (C) neither the Borrower nor any Restricted Subsidiary will be required to maintain or preserve such Unrestricted Subsidiary’s financial condition or cause such Unrestricted Subsidiary to achieve any specified level of operating results, (iv) such Unrestricted Subsidiary does not own, directly or indirectly, any Equity Interests in the Borrower or any Restricted Subsidiary and (v) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for the purpose of any Indebtedness of the Borrower or its Restricted Subsidiaries. The designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by the Borrower or the relevant Restricted Subsidiary (as applicable) therein at the date of designation in an amount equal to the fair market value of all such Person’s outstanding Investment therein.

 

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(a) The Borrower may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary and an incurrence of Liens by a Restricted Subsidiary on the property of such Unrestricted Subsidiary then subject to any Liens, and such designation will only be permitted if (i) such Indebtedness is permitted under Section 7.02 and such Liens are permitted under Section 7.01 , (ii) no Default or Event of Default would be in existence immediately following such designation, (iii) all representations and warranties herein will be true and correct in all material respects as if remade at the time of such designation, except to the extent such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects as of such earlier date, (iv) the Borrower is in pro forma compliance with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.01(a) or (b)  and (v) such Subsidiary becomes a Loan Party to the extent required by Section 6.12 .

6.18 Flood Insurance Laws . To the extent any Mortgaged Property is subject to the provisions of the Flood Insurance Laws (as defined below), (a) (i) concurrently with the delivery of any Mortgage in favor of the Administrative Agent in connection therewith, and (ii) at any other time if necessary for compliance with applicable Flood Insurance Laws, provide the Administrative Agent with a standard flood hazard determination form for such Mortgaged Property and (b) if any building that forms a part of Mortgaged Property is located in an area designated a “flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), obtain flood insurance in such reasonable total amount as the Administrative Agent may from time to time reasonably require, and otherwise to ensure compliance with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as it may be amended from time to time (the “Flood Insurance Laws ”). In addition, to the extent the Borrower and the Loan Parties fail to obtain or maintain satisfactory flood insurance required pursuant to the preceding sentence with respect to any Mortgaged Property, the Administrative Agent shall be permitted, in its sole discretion, to obtain forced placed insurance at the Borrower’s expense to ensure compliance with any applicable Flood Insurance Laws.

6.19 Post-Closing Matters . (a) With respect to each Mortgaged Property described on Schedule 6.19 , within 60 days of the Closing Date or such later date determined by the Administrative Agent in its sole discretion, the Borrower shall deliver to the Administrative Agent:

(i) deeds of trust, trust deeds, mortgages, leasehold mortgages and leasehold deeds of trust covering such Mortgaged Property (together with the Assignments of Leases and Rents referred to therein, in each case as amended, the “ Mortgages ”), duly executed, acknowledged and delivered by the appropriate Loan Parties for recording in the recording

 

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office of each jurisdiction where such Mortgaged Property to be encumbered thereby is situated and in the form of Exhibit H (or as may otherwise be mutually agreed between the Borrower and the Administrative Agent);

(ii) a favorable opinion of one or more counsels to the Loan Parties, addressed to the Administrative Agent and each Lender, covering such matters as may be reasonably requested by the Administrative Agent in connection with the satisfaction of the requirements set forth in clause (a)  above;

(iii) other than with respect to Real Property (x) relating to pipelines and related Easements or (y) described on Schedule 6.19(a)(iii) , (A) a fully paid American Land Title Association Lender’s Extended Coverage title insurance policy, with endorsements and in amounts reasonably acceptable to the Administrative Agent, issued by a title insurer reasonably acceptable to the Administrative Agent, insuring the Mortgage to be a valid first and subsisting Lien on such Mortgaged Property, free and clear of all defects and encumbrances, other than Permitted Encumbrances and other exceptions that are acceptable to the Administrative Agent in its sole discretion (each a “ Mortgage Policy ”) and (B) American Land Title Association/American Congress on Surveying and Mapping form plat of survey or such other form plat of survey as is reasonably acceptable to the Administrative Agent, for which all necessary fees (where applicable) have been paid, certified to the Administrative Agent and the issuer of the Mortgage Policy pertaining to such Mortgaged Property in a manner reasonably satisfactory to the Administrative Agent by a land surveyor duly registered and licensed in the State in which the Mortgaged Property is located and reasonably acceptable to the Administrative Agent;

(iv) as to any Mortgaged Property (other than with respect to Real Property relating to pipelines and related Easements) that is leased from the WNR Group, a copy of the ground lease between the lessor and the applicable Loan Party, including all amendments thereto, and, (A) an estoppel certificate, and (B) a consent to the Mortgage encumbering the leasehold interest in such Mortgaged Property, in each case executed by the lessor of such Mortgaged Property, in form and substance reasonably acceptable to the Administrative Agent;

(v) if required under the law of the State in which the Mortgaged Property is located in order to perfect a security interest in fixtures, a UCC fixture filing naming the applicable Loan Party as debtor, filed in the applicable land records; and

(vi) flood certification(s) from a firm reasonably acceptable to the Administrative Agent covering any buildings (defined as structures with four walls and a roof) constituting Collateral showing whether or not such buildings are located in a special flood hazard area subject by federal regulation to mandatory flood insurance requirements.

(b) With respect to any Pipeline Asset or Easement that qualifies as an Excluded Asset pursuant to clause (a) of the definition thereof, the Borrower shall use commercially reasonable efforts to obtain any necessary consents to the grant of a Lien on and security interest in such Pipeline Asset and Easement to the Administrative Agent.

 

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(c) With respect to the acquisition of the Four Corners Pipeline Assets and the Delaware Basin System Assets which is contemplated by the Borrower’s Omnibus Agreement on the Closing Date but has not yet been consummated as of the Closing Date, the Borrower shall use commercially reasonable efforts to obtain any necessary consents to the transfer of such property and easements to a Loan Party.

(d) Within 60 days of the Closing Date or such later date determined by the Administrative Agent in its sole discretion, the Borrower shall deliver to the Administrative Agent deposit account control agreements satisfying the requirements set forth in the Security Agreement; and

(e) Within 60 days of the Closing Date or such later date determined by the Administrative Agent in its sole discretion, the Borrower shall deliver to the Administrative Agent such other information, instruments and documents as it (or its counsel) may reasonably request in connection with the satisfaction of the requirements set forth in clauses (a)  through (d)  above.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder (other than (A) contingent indemnification, expense reimbursement or yield protection obligations and (B) obligations and liabilities under Secured Cash Management Agreements and Secured Hedge Agreements as to which arrangements satisfactory to the applicable Cash Management Bank or Hedge Bank shall have been made) shall remain unpaid or unsatisfied, or any Letter of Credit (other than Letters of Credit that have been Cash Collateralized or as to which other arrangements satisfactory to the Administrative Agent and the L/C Issuer shall have been made) shall remain outstanding, the Borrower shall not, nor shall it permit any Restricted Subsidiary to, directly or indirectly:

7.01 Liens . Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following (collectively, the “ Permitted Encumbrances ”):

(a) Liens pursuant to any Loan Document;

(b) Liens for taxes not yet delinquent or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person to the extent required by GAAP;

(c) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, vendor’s, landlords’ and other like Liens arising in the ordinary course of business, securing obligations which are not past due for more than 90 days after the date on which such obligations became due, unless being contested in good faith by appropriate proceedings and for which any reserves required by GAAP are maintained;

 

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(d) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

(e) pledges or deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(f) easements, rights-of-way, restrictions (including zoning restrictions), covenants, licenses, encroachments, protrusions and other similar encumbrances, and minor title deficiencies on or with respect to any Real Property, any Easements or any Pipeline Systems which, in the aggregate, do not materially and adversely affect the value of the property subject thereto, materially interfere with the ordinary conduct of the business of the applicable Person, or individually or in the aggregate, have a Material Adverse Effect (for purposes hereof, title deficiencies shall be deemed to include, but are not limited to, defects in the chain of title, terms, conditions, exceptions, limitations, easements, servitudes, permits, surface leases and other similar rights in respect of surface operations, flood control, air rights, water rights, rights of others with respect to navigable waters, sewage and drainage rights and easements for pipelines, alleys, highways, telephone lines, power lines, railways and other easements and rights-of-way on, over or in respect of any of the properties of the Borrower or any of its Subsidiaries that are customarily granted in the midstream industry);

(g) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h) ;

(h) Liens (and financing statements associated therewith) securing Indebtedness permitted under Section 7.02(e) ; provided that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness, improvements and accessions to such property, insurance for such property, and the proceeds of the foregoing, and (ii) the principal amount of the Indebtedness secured thereby does not exceed the costs of acquiring such property;

(i) rights reserved to or vested in any Governmental Authority by the terms of any right, power, franchise, grant, license or permit, or by any provision of Law, to revoke or terminate any such right, power, franchise, grant, license or permit or to condemn or acquire by eminent domain or similar process;

(j) rights reserved to or vested by Law in any Governmental Authority to in any manner, control or regulate in any manner any of the properties of the Borrower or any of its Restricted Subsidiaries or the use thereof or the rights and interest of the Borrower or any of its Restricted Subsidiaries therein, in any manner and under any and all Laws;

 

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(k) licenses, sublicenses or cross-licenses of intellectual property granted in the ordinary course of business;

(l) Liens on property of a Person existing at the time such Person is merged into or consolidated with the Borrower or any Restricted Subsidiary of the Borrower or becomes a Restricted Subsidiary of the Borrower; provided that such Liens were not created in contemplation of such merger, consolidation or Investment and do not extend to any assets other than those of the Person merged into or consolidated with the Borrower or such Restricted Subsidiary or acquired by the Borrower or such Restricted Subsidiary, and the applicable Indebtedness secured by such Lien is permitted under Section 7.02(h) ;

(m) Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies, or under general depositary agreements, and burdening only deposit accounts or other funds maintained with a creditor depository institution;

(n) any interest or title of a lessor under any lease entered into by the Borrower or any Restricted Subsidiary in the ordinary course of its business covering only the assets so leased;

(o) Liens securing Indebtedness permitted under Section 7.02(g) ; provided that such Liens cover only (i) unearned premiums or dividends, (ii) loss payments which reduce the unearned premiums, subject however, to the interests of the Administrative Agent as mortgagee or loss payee and (iii) any interest in any state guarantee fund relating to any financed policy;

(p) Liens existing on the Closing Date (or, if later, the date on which the Borrower or a Subsidiary acquires the relevant asset) which are recorded in the relevant public real estate records and any renewals or extensions thereof; provided that, the Borrower shall use commercially reasonable efforts to remove from the record (or, if acceptable to the Administrative Agent, cause the title insurance company to insure over) any such Lien that can be removed using commercially reasonable efforts (to the extent not otherwise a Permitted Encumbrance) at the Administrative Agent’s request;

(q) with respect to any Mortgaged Property, matters disclosed in any final lender’s title insurance policy with respect to such Mortgaged Property that has been issued and delivered in accordance with Section 6.12 or Section 6.19 ;

(r) easements, rights-of-way, restrictions, covenants, servitudes, permits, licenses, encroachments, protrusions and other similar encumbrances on or rights with respect to any of the properties of the Borrower or any of its Subsidiaries that are granted in favor of any Affiliate of the Borrower in connection with the Transactions; and

(s) other Liens securing obligations in an aggregate amount not exceeding $10,000,000;

 

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provided , that nothing in this Section 7.01 shall in and of itself constitute or be deemed to constitute an agreement or acknowledgment by the Administrative Agent or any Lender that any Indebtedness subject to or secured by any Lien, right or other interest permitted under the subsections above ranks in priority to any Obligation.

7.02 Indebtedness . Create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness among Loan Parties or otherwise permitted pursuant to Section 7.03(c) ;

(b) Indebtedness under the Loan Documents;

(c) Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and any refinancings, refundings, renewals or extensions thereof; provided that the principal amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and the direct or any contingent obligor with respect thereto is not changed, as a result of or in connection with such refinancing, refunding, renewal or extension; and provided , still further , that the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Loan Parties or the Lenders than the terms of any agreement or instrument governing the Indebtedness being refinanced, refunded, renewed or extended and the interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness does not exceed the then applicable market interest rate;

(d) (i) Guarantees by any Loan Party of obligations of any other Loan Party that is otherwise permitted hereunder, (ii) Guarantees by a Restricted Subsidiary that is not a Loan Party of obligations of the Borrower or any Restricted Subsidiary, or (iii) Guarantees by a Loan Party of the obligations of a Joint Venture or Unrestricted Subsidiary, provided that in the case of this clause (iii)  such Guarantees may not be in respect of obligations the amount of which, when taken together with the amount of Investments made pursuant to Section 7.03(j) (other than Investments in the amount of return of capital permitted hereunder), exceeds $75,000,000 at any one time outstanding;

(e) Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations and purchase money obligations for equipment or other fixed or capital assets within the limitations set forth in Section 7.01(h ); provided , however , that the aggregate Attributable Indebtedness (or to the extent Attributable Indebtedness is not applicable, the aggregate principal amount) of all such Indebtedness referred to in this clause (e)  at any one time outstanding shall not exceed $25,000,000;

 

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(f) unsecured Indebtedness issued by the Borrower and/or Finance Co; provided , however , that, the incurrence thereof is subject to the following conditions: (i) the maturity date of any such Indebtedness shall be no earlier than the date that is six months after the Maturity Date, (ii) the documentation governing such Indebtedness shall not require any scheduled amortization prior to its maturity date, (iii) the terms and conditions of such Indebtedness, taken as a whole, shall be no more restrictive than the terms and conditions of this Agreement, (iv) the Borrower shall be in compliance with the financial covenants set forth in Section 7.11 after giving pro forma effect to such incurrence, as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.01(a) or (b) , (v) no Subsidiary that is not a Loan Party shall guarantee such Indebtedness, (vi) if such Indebtedness is subordinated, such Indebtedness shall have subordination terms customary for high yield subordinated Indebtedness and (vii) no Default or Event of Default shall have occurred and be continuing immediately after giving effect to the issuance of such Indebtedness;

(g) Indebtedness of the Borrower or any Restricted Subsidiary incurred in the ordinary course of business to finance the payment of premiums for a twelve-month period for insurance, provided that the aggregate outstanding principal amount of such Indebtedness shall not at any time exceed $5,000,000;

(h) Indebtedness of any Person that becomes a Restricted Subsidiary of the Borrower after the date hereof in accordance with the terms of Section 7.03 , which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary of the Borrower (and not incurred in contemplation of such Person’s becoming a Restricted Subsidiary of the Borrower); provided , however , that the aggregate of all such Indebtedness referred to in this clause (h)  at any one time outstanding shall not exceed $30,000,000; and

(i) unsecured Indebtedness of any Borrower and any Subsidiary not otherwise permitted by this Section in an aggregate principal amount not to exceed $10,000,000 in the aggregate at any time outstanding.

7.03 Investments . Make or hold any Investments, except:

(a) Investments held by the Borrower and its Restricted Subsidiaries in the form of Cash Equivalents;

(b) advances to officers, directors and employees of the Borrower and Restricted Subsidiaries in an aggregate amount not to exceed $500,000 at any time outstanding, for travel, entertainment, relocation and analogous ordinary business purposes;

(c) (i) Investments by the Borrower and its Restricted Subsidiaries in their respective Restricted Subsidiaries outstanding on the date hereof and (ii) additional Investments by the Borrower and its Restricted Subsidiaries in Loan Parties;

 

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(d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors;

(e) Guarantees permitted by Section 7.02 ;

(f) other Investments existing on the date hereof and set forth on Schedule 5.08(d) ;

(g) the purchase or other acquisition of all of the Equity Interests in, or all or any material portion of the property of, any Person that, upon the consummation thereof, in the case of the purchase or other acquisition of all of the Equity Interests in such Person, will become a Loan Party (including as a result of a merger or consolidation); provided that, with respect to each purchase or other acquisition made pursuant to this Section 7.03(g) :

(i) any such newly-created or acquired Person shall comply with the requirements of Section 6.12 ;

(ii) the lines of business of the Person to be (or the property of which is to be) so purchased or otherwise acquired shall not cause the Borrower to be in violation of Section 7.07 , such Person shall have its primary operations in the United States and such assets shall be primarily located in the United States; provided that the requirements under this clause (ii)  shall not apply to acquisitions contemplated by the Omnibus Agreement as in effect on the Closing Date;

(iii) the Borrower must be the surviving entity in any merger to which it is a party;

(iv) (A) immediately before and immediately after giving pro forma effect to any such purchase or other acquisition, no Event of Default shall have occurred and be continuing and (B) immediately after giving effect to such purchase or other acquisition, the Borrower and its Restricted Subsidiaries shall be in pro forma compliance with all of the covenants set forth in Section 7.11 , such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b)  as though such purchase or other acquisition had been consummated as of the first day of the Measurement Period covered thereby;

(v) such purchase or other acquisition shall be consummated on a non-hostile basis;

(vi) the Total Outstandings, after giving effect to such purchase or acquisition and any Credit Extension in connection therewith must be less than the product of (i) 90% and (ii) the amount of the Aggregate Commitments;

(vii) in the case of any such purchase or acquisition for consideration in excess of $10,000,000, promptly before the consummation of any such purchase or other acquisition, the Borrower shall deliver to the Administrative Agent a certificate of a Responsible Officer, in form and substance reasonably satisfactory to the Administrative Agent, certifying that all of the requirements set forth in this clause (g) shall be satisfied;

 

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(h) (i) other acquisitions and purchases to the extent that (A) the consideration in respect thereof consists of Equity Interests in the Borrower or (B) such acquisition or purchase is effected through a capital contribution to the Borrower, and (ii) Investments in Unrestricted Subsidiaries and Joint Ventures of assets to the extent acquired in reliance on clause (h)(i);

(i) Investments constituting partial consideration for Dispositions to the extent permitted under Section 7.05(g) ;

(j) (A) Investments by the Borrower and its Restricted Subsidiaries in Joint Ventures; provided that any Equity Interests in any such Joint Venture shall be pledged to the Administrative Agent for the ratable benefit of the Secured Parties under the Security Agreement and the Administrative Agent shall have received such other items in connection therewith as may be required by Section 6.12(b) ; or (B) Investments (including, but not limited to, Investments in Equity Interests, intercompany loans, and unsecured Guarantees of Indebtedness otherwise expressly permitted hereunder) after the Closing Date by Loan Parties in Unrestricted Subsidiaries; provided that the aggregate of all such Investments referred to in this clause (j)  and Section 7.02(d) at any one time outstanding shall not exceed the sum of $75,000,000 plus any return of capital actually received by the Borrower or any Restricted Subsidiary in respect of Investments made by them pursuant to this Section 7.03(j) ;

(k) other Investments at any one time outstanding not exceeding the greater of (A) $10,000,000 and (B) 5% of Consolidated Tangible Assets of the Borrower and its Restricted Subsidiaries at the time such Investment is made.

7.04 Fundamental Changes . Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of the assets (whether now owned or hereafter acquired) of the Borrower and its Restricted Subsidiaries, taken as a whole, to or in favor of any Person, except that, so long as no Default exists or would result therefrom:

(a) any Relevant Party may merge or consolidate with one or more Loan Parties; provided that if the Borrower is a party to such merger or consolidation, it shall be the continuing or surviving Person, and otherwise a Loan Party shall be the continuing or surviving Person;

(b) any Restricted Subsidiary that is not a Loan Party may merge or consolidate with the Borrower or any Restricted Subsidiary; provided that if the Borrower or a Restricted Subsidiary that is a Loan Party is a party to such merger or consolidation, it shall be the continuing or surviving Person;

 

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(c) any Loan Party may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or to another Loan Party;

(d) any Restricted Subsidiary that is not a Loan Party may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any Restricted Subsidiary; and

(e) each of the Borrower and any of its Restricted Subsidiaries may merge into or consolidate with any Person other than the Borrower or any of its Subsidiaries; provided , however , that in each case, immediately after giving effect thereto (i) in the case of any such merger or consolidation to which the Borrower is a party, the Borrower is the surviving Person and (ii) in the case of any other merger to which any Relevant Party (other than the Borrower) is a party, such Relevant Party is the surviving Person.

7.05 Dispositions . Make any Disposition except:

(a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

(b) Dispositions of (i) inventory, (ii) equipment, (iii) Cash Equivalents, (iv) overdue accounts receivable in connection with the compromise or collection thereof (and not in connection with any financing transaction), and (v) leases, subleases, rights of way, easements, licenses, and sublicenses that, individually and in the aggregate, do not materially interfere with the ordinary conduct of the business of the Borrower or its Restricted Subsidiaries and do not materially detract from the value or the use of the property which they affect, in each case in the ordinary course of business;

(c) Dispositions of equipment, Easements or Real Property to the extent that replacement property is acquired, substantially contemporaneously therewith;

(d) Dispositions of property (i) by any Loan Party to any other Loan Party or (ii) by a Restricted Subsidiary that is not a Loan Party to the Borrower or any Restricted Subsidiary;

(e) Dispositions in the nature of Liens permitted by Section 7.01 or permitted by 7.03 or 7.04 ;

(f) other Dispositions not exceeding $5,000,000 in aggregate book value in any fiscal year; or

 

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(g) so long as no Default exists or would result therefrom, Dispositions of assets not otherwise permitted under this Section 7.05 if, (i) determined as of the date of each such Disposition and after giving effect thereto, the aggregate book value of the assets sold under this subsection (g) in any fiscal year of the Borrower does not exceed $25,000,000 and (ii) at least 75% of the purchase price received by the applicable Relevant Party shall be in cash;

(h) Dispositions of property (i) resulting from the condemnation thereof or (ii) that has suffered a casualty (constituting a total loss or constructive total loss of such property), in each case upon or after receipt of the condemnation proceeds or insurance proceeds of such condemnation or casualty, as applicable;

(i) Dispositions of Equity Interests of Unrestricted Subsidiaries;

(j) Dispositions consisting of the abandonment or lapse of any registrations or any applications for registration of any intellectual property in the ordinary course of business; and

(k) Dispositions described in Schedule 7.05(k);

provided , however , that any Disposition pursuant to Section 7.05(c) , Section 7.05(f) , Section 7.05(g) , or to the extent consideration therefor exceeds $5,000,000, Section 7.05(i) , shall be for fair market value.

7.06 Restricted Payments . Declare or make, directly or indirectly, any Restricted Payment, except:

(a) (i) each Loan Party may make Restricted Payments to any other Loan Party, (ii) each Restricted Subsidiary that is not a Loan Party may make Restricted Payments to the Borrower or any Restricted Subsidiary and (iii) so long as no Default exists or would be caused thereby, each Restricted Subsidiary may make Restricted Payments to any Person other than a Relevant Party that owns a direct Equity Interest in such Restricted Subsidiary, so long as no Person other than a Restricted Subsidiary receives more than its ratable share of such Restricted Payments, determined according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payments are being made;

(b) the Borrower and each Restricted Subsidiary may declare and make dividends or distributions payable solely in Equity Interests of such Person;

(c) the Borrower and each Restricted Subsidiary may purchase, redeem or otherwise acquire its common Equity Interests with the proceeds received from the substantially concurrent issue of new common Equity Interests;

(d) the Borrower and each Restricted Subsidiary may make Restricted Payments described in Schedule 7.06(d) ;

 

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(e) the Borrower may purchase, redeem or otherwise acquire its common Equity Interests from the underwriters of the initial public offering of the Borrower in connection with any exercise of their “greenshoe” option as contemplated by the Registration Statement; and

(f) so long as no Default or Event of Default exists or would be caused thereby, and only to the extent permitted by its Partnership Agreement, the Borrower may make distributions to the holders of its Equity Interests up to the amount of Available Cash.

7.07 Change in Nature of Business . Engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Restricted Subsidiaries on the date hereof or any business substantially related or incidental thereto.

7.08 Transactions with Affiliates . Enter into any transaction of any kind with any Affiliate of the Borrower (other than a Loan Party), whether or not in the ordinary course of business, if such transaction involves consideration in excess of $1,000,000 or is otherwise material to the business of the Borrower and its Restricted Subsidiaries, other than on fair and reasonable terms substantially as favorable to the Borrower or such Restricted Subsidiary as would be obtainable by the Borrower or such Restricted Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate; provided that this Section does not prohibit (i) any Investment permitted under Section 7.03 , (ii) any merger, dissolution, liquidation, consolidation or Disposition permitted under Section 7.04 , (iii) any Restricted Payment permitted under Section 7.06 , (iv) the execution, delivery and performance of the Material Contracts listed on Schedule 5.07 as in effect on the date of this Agreement or, if applicable, to the extent modified as permitted under this Agreement or (v) the consummation of the Transactions.

7.09 Burdensome Agreements . Enter into or permit to exist any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) requires the grant of a Lien that would be in violation of Section 7.01 , or (b) limits the ability (i) of any Restricted Subsidiary to make Restricted Payments to, or otherwise transfer property to or invest in the Borrower or any Guarantor, except for any agreement in effect (A) on the date hereof and set forth on Schedule 7.09 or (B) at the time any Subsidiary becomes a Restricted Subsidiary of the Borrower, so long as such agreement was not entered into solely in contemplation of such Person becoming a Restricted Subsidiary of the Borrower, (ii) of any Restricted Subsidiary to Guarantee the Indebtedness of the Borrower; provided , however that this clause (ii) shall not prohibit provisions customarily included in the terms of Indebtedness incurred pursuant to Section 7.02(f) or (iii) of the Borrower or any Restricted Subsidiary to create, incur, assume or suffer to exist Liens in favor of the Administrative Agent for the benefit of the Secured Parties on property of such Person; provided , however , that this clause (iii) shall not prohibit (X) any negative pledge incurred or provided in favor of any holder of Indebtedness permitted under Section 7.02(e) solely to the extent any such

 

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negative pledge relates to the property financed by or the subject of such Indebtedness, (Y) customary limitations and restrictions contained in, and limited to, specific leases, licenses, conveyances and other contracts or (Z) customary non-assignment provisions in purchase and sale or exchange agreements or similar operational agreements, which restrict the transfer, assignment or encumbrance of the assets subject thereto.

7.10 Use of Proceeds . Use the proceeds of any Credit Extension, whether directly or indirectly, (a) to purchase or carry margin stock (within the meaning of Regulation U issued by the FRB) or (b) in violation of such Regulation U.

7.11 Financial Covenants .

(a) Consolidated Interest Coverage Ratio . Commencing with the Measurement Period ending December 31, 2013, permit the Consolidated Interest Coverage Ratio as of the end of any Measurement Period to be less than 2.50 to 1.00.

(b) Consolidated Total Leverage Ratio . Commencing with the Measurement Period ending December 31, 2013, permit the Consolidated Total Leverage Ratio as of the end of any Measurement Period to be greater than 4.00 to 1.00. Notwithstanding the foregoing, commencing with the Measurement Period ending on the last day of the fiscal quarter in which a Notes Offering occurs, and as of the end of any Measurement Period thereafter, the maximum permitted Consolidated Total Leverage Ratio shall increase to 4.50 to 1.00.

(c) Consolidated Senior Secured Leverage Ratio . Commencing with the Measurement Period ending on the last day of the fiscal quarter in which a Notes Offering occurs, and as of the end of any Measurement Period thereafter, permit the Consolidated Senior Secured Leverage Ratio to be greater than 3.50 to 1.00.

For purposes of any calculation for determining pro forma compliance with this Section 7.11 concurrently with or after a Notes Offering, the higher ratio in clause (b)  shall be used and the ratio in clause (c)  shall be tested.

7.12 Amendments of Organization Documents . Amend the Partnership Agreement or any of its Organization Documents in a manner that, taken as a whole, is materially adverse to the Lenders.

7.13 Accounting Changes . Make any (a) elective change in accounting policies or reporting practices, except as required by GAAP or as approved by the Borrower’s independent certified public accountants, or (b) change of fiscal year.

 

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7.14 Prepayments, Etc. of Indebtedness . Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination terms of, any subordinated Indebtedness, except regularly scheduled or required repayments or redemptions of Indebtedness set forth in Schedule 7.02 and refinancings and refundings of such Indebtedness in compliance with Section 7.02(c) .

7.15 Amendment, Etc. of Indebtedness . Amend or modify in any manner any term or condition of any Indebtedness incurred pursuant to Section 7.02(f) if, after giving effect to such amendment or modification as if made at the time such Indebtedness were issued, such Indebtedness would not have been allowed to be issued pursuant to Section 7.02(f) .

7.16 Swap Contracts . Enter into any Swap Contract unless such Swap Contract:

(a) is made (i) with a Person that is, at the time such Swap Contract is made, either a Lender or an Affiliate of a Lender, or (ii) with another counterparty rated at least A- or better by S&P or A3 or better by Moody’s; and

(b) is entered into to hedge the Relevant Parties’ exposure to fluctuations in prices or rates (or to wholly or partially offset or unwind previous Swap Contracts) and not for speculative purposes.

7.17 Deposit Accounts, Securities Accounts and Commodity Accounts .

(a) Neither the Borrower nor any other Loan Party shall hereafter establish and maintain, or otherwise deposit, allow to be deposited or hold any funds in, any deposit account (other than Excluded Bank Accounts), unless it complies with the provisions regarding such accounts set forth in the Security Agreement (including, without limitation, the notice provisions and the control agreement requirements).

(b) Neither the Borrower nor any other Loan Party shall create, incur, assume or permit to exist, directly or indirectly, any Lien or other claim on any deposit account, securities account or commodity account or the funds deposited therein (other than Liens permitted by Section 7.01 ).

 

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7.18 Material Contracts . Neither the Borrower nor any Restricted Subsidiary may amend or modify or grant any waiver or release under or terminate in any manner any Material Contract, if such amendment, modification, waiver, release or termination would be materially adverse to the Lenders or affect the assignability of any such contract or agreement in a manner that would have an adverse effect on the rights of the Secured Parties in the Collateral (including in such agreement as Collateral).

7.19 Limitations on Activities of Borrower . Without limiting any restrictions on the Borrower otherwise set forth in this Article VII , the Borrower shall not conduct or engage in any operations or business other than (i) those incidental to its ownership of the Equity Interests of its Subsidiaries, (ii) the maintenance of its legal existence, (iii) the performance of the Loan Documents, (iv) guaranteeing the obligations of its Subsidiaries to the extent permitted by this Agreement, (v) performance under the Partnership Agreement (vi) providing indemnification to officers and directors, (vii) any activities incidental to any of the foregoing, (viii) incurring Indebtedness permitted by Section 7.02 (other than Section 7.02(e) ), (ix) consummating the Transactions and (x) entry into, and performance of, the Material Contracts to which it is a party.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default . Any of the following shall constitute an Event of Default:

(a) Non-Payment . The Borrower or any other Loan Party fails to (i) pay when and as required to be paid herein, any amount of principal of any Loan, Swingline Loan or any L/C Obligation or deposit any funds as Cash Collateral in respect of L/C Obligations, or (ii) pay within five days after the same becomes due, any interest on any Loan, Swingline Loan or on any L/C Obligation, any fee due hereunder, or other amount payable hereunder or under any other Loan Document; or

(b) Specific Covenants . Any Loan Party fails to perform or observe any term, covenant or agreement contained in any of Section 6.03(a) , 6.05(a) (with respect to the Borrower and any Subsidiary existing on the Closing Date only), 6.07 , 6.11 , 6.18 , or ARTICLE VII ; or

(c) Other Defaults . Any Relevant Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or (b)  above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days after notice thereof to the Borrower from the Administrative Agent; or

(d) Representations and Warranties . Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Relevant

 

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Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect (except with respect to such representations, warranties, certifications or statements of fact which are expressly qualified by materiality, which shall be incorrect or misleading in any respect) when made or deemed made; or

(e) Cross-Default . (i) Any Relevant Party (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder) having an aggregate outstanding principal amount (including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with or without the giving of notice, if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which a Relevant Party is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which a Relevant Party is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by such Relevant Party as a result thereof is greater than the Threshold Amount; or

(f) Insolvency Proceedings, Etc . Any Relevant Party institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

(g) Attachment . Any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any Relevant Party and is not released, stayed, vacated or fully bonded within 30 days after its issue or levy; or

(h) Judgments . There is entered against any Relevant Party, (i) one or more final judgments or orders in an aggregate amount (as to all such judgments and orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer is rated at least “A” by A.M. Best Company, has been notified of the potential claim

 

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and does not dispute coverage) or (ii) one or more non-monetary judgments that have had, or that could reasonably be expected to have, a Material Adverse Effect, and, in either case, there is a period of 30 consecutive days during which a stay of enforcement of such final judgment, by reason of a pending appeal or otherwise, is not in effect; or

(i) ERISA . (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or would reasonably be expected to result in a Material Adverse Effect or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

(j) Invalidity of Loan Documents . Any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations (other than (A) contingent indemnification, expense reimbursement or yield protection obligations and (B) obligations and liabilities under Secured Cash Management Agreements and Secured Hedge Agreements as to which arrangements satisfactory to the applicable Cash Management Bank or Hedge Bank shall have been made), ceases to be in full force and effect; or any Relevant Party or any Affiliate thereof asserts in writing that any provision of any Loan Document is not the valid and enforceable obligation of such Relevant Party; or

(k) Change of Control . There occurs any Change of Control;

(l) Collateral Documents . Any Collateral Document after delivery thereof pursuant to Section 4.01 or 6.12 shall for any reason (other than pursuant to the terms of the Loan Documents) cease to create a valid first priority Lien (subject only to Permitted Encumbrances) on Collateral purported to be covered thereby;

(m) Termination or Default under the Material Contracts . There occurs (i) any default or defaults under the Material Contracts or (ii) any termination of the Material Contracts, in each case of clauses (i) and (ii), that would reasonably be expected to result in a Material Adverse Effect;

(n) Permanent or Indefinite Suspension of Operations . A period of 12 months shall have elapsed following the Borrower or its Subsidiaries’ receipt of a written notice from WNR or its Affiliates as to the permanent or indefinite suspension of operations at the El Paso, Texas refinery that would reasonably be expected to result in a Material Adverse Effect, unless the Borrower shall have, as of the time of the expiration of such 12-month period, established replacement business that is reasonably acceptable to the Administrative Agent or demonstrated to the Administrative Agent’s reasonable satisfaction that actions have been commenced to restore or replace business lost as a result of such suspension of operations; provided , for the avoidance of doubt, that if insurance proceeds or other cash is used by WNR or its Affiliates to satisfy all cash obligations that would have been payable to the Borrower or any Loan Party if the applicable Material Contract had survived to its stated term, then no Event of Default under this clause (n)  shall be deemed to have occurred as a result of such suspension of operations; or

 

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(o) Environmental . There occurs any actual Environmental Liability that has resulted in a Material Adverse Effect.

8.02 Remedies upon Event of Default . If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans, the Swingline Lender to make Swingline Loans, and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower;

(c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to 103% of the then Outstanding Amount thereof); and

(d) exercise on behalf of itself, the Lenders and the L/C Issuer all rights and remedies available to it, the Lenders and the L/C Issuer under the Loan Documents;

provided , however , that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans, the Swingline Lender to make Swingline Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

8.03 Application of Funds . After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02 ), any amounts received on account of the Obligations shall, subject to the provisions of Sections 2.14 and 2.15 , be applied by the Administrative Agent in the following order:

First , to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (other than principal, interest and Letter of Credit Fees, but including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under ARTICLE III ) payable to the Administrative Agent in its capacity as such;

 

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Second , to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders, the Swingline Lender and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders, the Swingline Lender and the L/C Issuer arising under the Loan Documents and amounts payable under ARTICLE III , ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third , to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, Swingline Loans, L/C Borrowings and other Obligations arising under the Loan Documents, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;

Fourth , to payment of that portion of the Obligations constituting unpaid principal of the Loans, Swingline Loans, L/C Borrowings and Obligations then owing under Secured Hedge Agreements and Secured Cash Management Agreements, ratably among the Lenders, the L/C Issuer, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth held by them;

Fifth , to the Administrative Agent for the account of the L/C Issuer, to Cash Collateralize 103% of that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant to Sections 2.03 and 2.14 ; and

Last , the balance, if any, after all of the Obligations (other than (A) contingent indemnification, expense reimbursement or yield protection obligations, in each case, as to which no claim has been made and (B) obligations and liabilities under Secured Cash Management Agreements and Secured Hedge Agreements as to which arrangements satisfactory to the applicable Cash Management Bank or Hedge Bank shall have been made) have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

Subject to Sections 2.03(c) and 2.14 , amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.

Notwithstanding the foregoing, Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash

 

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Management Bank or Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to the Credit Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of ARTICLE IX hereof for itself and its Affiliates as if a “Lender” party hereto.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01 Appointment and Authority .

(a) Each of the Lenders, the Swingline Lender and the L/C Issuer hereby irrevocably appoints Wells Fargo to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. Except as expressly set forth in Sections 9.06 and 9.10(a) , the provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders, the Swingline Lender and the L/C Issuer, and the Borrower shall not have rights as a third party beneficiary of any of such provisions.

(b) The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (including in its capacities as a potential Hedge Bank and a potential Cash Management Bank), the Swingline Lender and the L/C Issuer hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender, the Swingline Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent, shall be entitled to the benefits of all provisions of this ARTICLE IX and ARTICLE X (including Section 10.04(c) , as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

9.02 Rights as a Lender . The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may

 

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accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

9.03 Exculpatory Provisions . The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

(d) shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02 ) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower, a Lender, the Swingline Lender or the L/C Issuer.

(e) shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in ARTICLE IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

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9.04 Reliance by Administrative Agent . The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, the making of a Swingline Loan or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender, the Swingline Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender, the Swingline Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

9.05 Delegation of Duties . The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

9.06 Resignation of Administrative Agent . The Administrative Agent may at any time give notice of its resignation to the Lenders, the Swingline Issuer, the L/C Issuer and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a Lender with an office in the United States, or an Affiliate of any such Lender with an office in the United States; provided , however , if no Lender or Affiliate of a Lender is so appointed, then such successor does not need to be a Lender or an Affiliate of a Lender but shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may

 

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on behalf of the Lenders, the Swingline Lender and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders, the Swingline Lender or the L/C Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender, the Swingline Lender and the L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

Any resignation by Wells Fargo as Administrative Agent pursuant to this Section shall also constitute its resignation as Swingline Lender and L/C Issuer. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of Wells Fargo as the retiring Swingline Lender and L/C Issuer, (ii) the retiring Swingline Lender and L/C Issuer shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit issued by Wells Fargo.

9.07 Non-Reliance on Administrative Agent and Other Lenders . Each Lender, the Swingline Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender, the Swingline Lender and the L/C Issuer also acknowledges that it will, independently and without

 

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reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

9.08 No Other Duties, Etc . Anything herein to the contrary notwithstanding, none of the Joint Lead Arrangers, Documentation Agent or Co-Syndication Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender, the Swingline Lender or the L/C Issuer hereunder.

9.09 Administrative Agent May File Proofs of Claim . In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan, Swingline Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, Swingline Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Swingline Loan, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Swingline Lender, the L/C Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Swingline Lender, the L/C Issuer and the Administrative Agent under Sections 2.03(h) and (i) , 2.08 and 10.04 ) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender, Swingline Lender and the L/C Issuer to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders, the Swingline Lender and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.08 and 10.04 .

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender, the Swingline Lender or the

 

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L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender, the Swingline Lender or the L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender, the Swingline Lender or the L/C Issuer or in any such proceeding.

9.10 Collateral and Guaranty Matters . Each of the Lenders (including in its capacities as a potential Cash Management Bank and a potential Hedge Bank), the Swingline Lender, the L/C Issuer and the other Secured Parties irrevocably authorize the Administrative Agent to take the following actions, and the Administrative Agent hereby agrees to take such actions upon the Borrower’s request:

(a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of all of the Aggregate Commitments and payment in full of all Obligations (other than (A) contingent indemnification obligations and (B) obligations and liabilities under Secured Cash Management Agreements and Secured Hedge Agreements as to which arrangements satisfactory to the applicable Cash Management Bank or Hedge Bank shall have been made) and the expiration or termination of all Letters of Credit (other than Letters of Credit that have been Cash Collateralized or as to which other arrangements reasonably satisfactory to the Administrative Agent, the Swingline Lender and the L/C Issuer shall have been made), (ii) that is sold or Disposed of or to be sold contemporaneously with the release of such Lien or Disposed of as part of or in connection with any sale or Disposition permitted hereunder or under any other Loan Document, or (iii) if approved, authorized or ratified in writing in accordance with Section 10.01 ;

(b) to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Restricted Subsidiary as a result of a transaction permitted hereunder; and

(c) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Sections 7.01(h) , (n)  or (o) .

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of Collateral or other property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10 . In each case as specified in this Section 9.10 , the Administrative Agent will, at the Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral or other property from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.10 .

 

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9.11 Secured Cash Management Agreements and Secured Hedge Agreements . No Cash Management Bank or Hedge Bank that obtains the benefits of Section 8.03 , any Guaranty or any Collateral by virtue of the provisions hereof or of any Guaranty or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) or any Guaranty (including the release of any Guaranty) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this ARTICLE IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.

ARTICLE X

MISCELLANEOUS

10.01 Amendments, Etc . No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders or the Administrative Agent at the direction of the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided , however , that no such amendment, waiver or consent shall:

(a) waive any condition set forth in Section 4.01 (other than Section 4.01(d)(i) ), without the written consent of each Lender;

(b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02 ) without the written consent of such Lender;

(c) postpone any scheduled date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to any Lender hereunder or under such other Loan Document without the written consent of such Lender;

(d) reduce the principal of, or the rate of interest specified herein on, any Loan, Swingline Loan or L/C Borrowing, or (subject to clause (iii) of the second proviso to this Section 10.01 ) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to such amount; provided , however , that only the consent of the Required Lenders shall be necessary to amend (i) the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest or Letter of Credit Fees at the Default Rate or (ii) any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan, Swingline Loan or L/C Borrowing or to reduce any fee payable hereunder;

 

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(e) change Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender;

(f) change any provision of this Section 10.01 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

(g) except as provided in Section 9.10 , release all or substantially all of the Collateral in any transaction or series of related transactions (other than as contemplated by the Loan Documents), without the written consent of each Lender; or

(h) release all or substantially all of the value of the Guaranty, without the written consent of each Lender, except to the extent the release of any Subsidiary from the Guaranty is permitted pursuant to Section 9.10 (in which case such release may be made by the Administrative Agent acting alone);

and provided , further , that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iii) the Engagement Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto; and (iv) no amendment, waiver or consent shall, unless in writing and signed by the Swingline Lender in addition to the Lenders required above, affect the rights or duties of the Swingline Lender under this Agreement. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that without the consent of such Defaulting Lender (A) the Commitment of such Lender may not be increased or extended, (B) the amount of principal payable to such Lender may not be reduced (except as provided in Section 2.15 ) and (C) the voting provisions hereof with respect to such Lender may not be amended without the consent of such Lender.

If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender or each affected Lender and that has been approved by the Required Lenders, the Borrower may replace such non-consenting Lender in accordance with Section 10.13 ; provided that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Borrower to be made pursuant to this paragraph).

 

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10.02 Notices; Effectiveness; Electronic Communications .

(a) Notices Generally . Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in Section 10.02(b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrower, the Administrative Agent, the Swingline Lender or the L/C Issuer, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02 or such other address, telecopier number, electronic mail address or telephone number as shall be designated by such Person in writing to the other parties; and

(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire or such other address, telecopier number, electronic mail address or telephone number as shall be designated by such Person in writing to the other parties.

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b) .

(b) Electronic Communications . Notices and other communications to the Lenders, the Swingline Lender and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender, the Swingline Lender or the L/C Issuer pursuant to ARTICLE II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such

 

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notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(c) The Platform . THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “ Agent Parties ”) have any liability to the Borrower, any Lender, the Swingline Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided , however , that in no event shall any Agent Party have any liability to the Borrower, any Lender, the Swingline Lender, the L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

(d) Change of Address, Etc . Each of the Borrower, the Administrative Agent, the Swingline Lender and the L/C Issuer may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent, the Swingline Lender and the L/C Issuer. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal or state securities laws.

 

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(e) Reliance by Administrative Agent, the Swingline Lender, L/C Issuer and Lenders . The Administrative Agent, the Swingline Lender, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including electronic and telephonic Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, the Swingline Lender, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reasonable reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

10.03 No Waiver; Cumulative Remedies; Enforcement . No failure by any Lender, the Swingline Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders, the Swingline Lender and the L/C Issuer; provided , however , that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C Issuer from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer) hereunder and under the other Loan Documents, (c) the Swingline Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as Swingline Lender) hereunder and under the other Loan Documents, (d) any Lender from exercising setoff rights in accordance with Section 10.08 (subject to the terms of Section 2.12 ) or (e) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law, and provided , further , that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the

 

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Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c), (d) and (e) of the preceding proviso and subject to Section 2.12 , any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

10.04 Expenses; Indemnity; Damage Waiver .

(a) Costs and Expenses . The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of one primary outside counsel and one local counsel in each applicable jurisdiction, as necessary, and, in the case of an actual or perceived conflict of interest, additional conflicts counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Swingline Lender in connection with the extension of any Swingline Loan or any demand for payment thereunder, (iii) all reasonable out-of-pocket expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iv) all reasonable out-of-pocket expenses incurred by the Administrative Agent, any Lender or Swingline Lender or the L/C Issuer (including the reasonable fees, charges and disbursements of outside counsel), in connection with the enforcement or protection of its rights under this Agreement and the other Loan Documents, including, without limitation, its rights under this Section, and in connection with Loans made or Letters of Credit issued hereunder, including all such reasonable out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b) Indemnification by the Borrower . The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender, the Swingline Lender and the L/C Issuer, the Joint Lead Arrangers and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities, penalties and related expenses (including the reasonable fees, charges and disbursements of outside counsel), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan, Swingline Loan

 

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or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party or any of the Borrower’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE ; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or its Related Parties, (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee or its Related Parties for breach in bad faith of such Indemnitee’s or its Related Parties’ obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction or (z) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from a dispute among or between Indemnitees and not involving (i) any act or omission of the Borrower or (ii) such Indemnitee’s capacity or role as an agent or arranger with respect to the Loan Documents or the Loans; provided further that payments of expenses with respect to the negotiation, preparation, due diligence, administration, syndication, closing and enforcement of any of the Loan Documents will be limited to those provided for under Section 10.04(a) . This Section 10.04(b) shall not apply with respect to taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

(c) Reimbursement by Lenders . To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsection  (a) or (b)  of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing (and without limiting its obligation to do so), each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in connection with such capacity. The obligations of the Lenders under this subsection  (c) are subject to the provisions of Section 2.11(d) .

 

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(d) Waiver of Consequential Damages, Etc . No Indemnitee shall be liable to the Borrower, its Affiliates or any other Person, and the Borrower and its Affiliates will not be liable to any Indemnitee, its Affiliates or any other Person, for any claim on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan, Swingline Loan or Letter of Credit or the use of the proceeds thereof; provided, that, nothing contained in this Section 10.04(d) shall limit the Borrower’s indemnification obligations with respect to indirect, consequential or punitive damage claims, to the extent of the indemnification provided in Section 10.04(b) . No Indemnitee referred to in Section 10.04(b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

(e) Payments . All amounts due under this Section shall be payable not later than ten Business Days after written demand therefor accompanied by reasonably detailed supporting information.

(f) Survival . The agreements in this Section shall survive the resignation of the Administrative Agent, the Swingline Lender and the L/C Issuer, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

10.05 Payments Set Aside . To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent, the Swingline Lender, the L/C Issuer or any Lender, or the Administrative Agent, the Swingline Lender, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the Swingline Lender, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender, the Swingline Lender and the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders, the Swingline Lender and the L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

 

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10.06 Successors and Assigns .

(a) Successors and Assigns Generally . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 10.06(b) , (ii) by way of participation in accordance with the provisions of Section 10.06(d) , or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 10.06(f) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 10.06(d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Swingline Lender, the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders . Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment(s) and the Loans (including for purposes of this Section 10.06(b) , participations in Swingline Obligations and L/C Obligations) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i) Minimum Amounts .

(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise

 

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consents (each such consent not to be unreasonably withheld or delayed); provided , however , that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

(ii) Proportionate Amounts . Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not apply to the Swingline Lender’s rights and obligations in respect of Swingline Loans;

(iii) Required Consents . No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed and to the extent the Borrower has not responded within five Business Days after receipt of written request for consent, the Borrower shall be deemed to have consented) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;

(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of any Commitment if such assignment is to a Person that is not a Lender with a Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender;

(C) the consent of the L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that initially establishes or increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and

(D) the consent of the Swingline Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that initially establishes or increases the obligation of the assignee to participate in exposure under any Swingline Loan (whether or not then outstanding).

(iv) Assignment and Assumption . The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided , however , that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

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(v) No Assignment to Certain Persons . No such assignment shall be made (A) to the Borrower or any of the Borrower’s Affiliates or Subsidiaries, (B) to any Defaulting Lender, or any of its Subsidiaries, or any Person who, upon becoming a lender hereunder, would constitute any of the foregoing Persons described in this clause (B), (C) to a natural person or (D) to any Ineligible Institution.

(vi) Certain Additional Payments . In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01 , 3.04 , 3.05 and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.06(d) .

(c) Register . The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the

 

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Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans, Swingline Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations . Any Lender may at any time, without the consent of, or notice to, the Borrower, the Administrative Agent, the Swingline Lender or the L/C Issuer, sell participations to any Person (other than a natural person, a Defaulting Lender, an Ineligible Institution or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “ Participant ”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in Swingline Obligations and L/C Obligations) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Borrower, the Administrative Agent, the Lenders, the Swingline Lender and the L/C Issuer shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and (iv) such Participant must agree to be bound by Section 10.07 . Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that delays or reduces any payment to such Participant. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01 , 3.04 and 3.05 (subject to the requirements and limitations therein) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.06(b) ; provided such Participant agrees to be subject to the provisions of Section 3.06 as if it were an assignee under paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.12 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment,

 

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loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e) Limitations upon Participant Rights . A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01 as though it were a Lender.

(f) Certain Pledges . Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or other central bank having jurisdiction over it; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(g) Resignation as Swingline Lender and L/C Issuer after Assignment . Notwithstanding anything to the contrary contained herein, if at any time Wells Fargo assigns all of its Commitment and Loans pursuant to Section 10.06(b) , Wells Fargo may, upon 30 days’ notice to the Borrower and the Lenders, resign as Swingline Lender and Wells Fargo may upon 30 days’ notice to the Borrower and the Lenders, resign as L/C Issuer. In the event of any such resignation as Swingline Lender and L/C Issuer, the Borrower shall be entitled to appoint from among the Lenders a successor Swingline Lender and L/C Issuer hereunder; provided , however , that no failure by the Borrower or the Lenders to appoint any such successor shall affect the resignation of Wells Fargo as Swingline Lender and Wells Fargo as L/C Issuer. If Wells Fargo resigns as Swingline Lender and Wells Fargo resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the Swingline Lender and L/C Issuer hereunder with respect to all Swingline Loans and Letters of Credit outstanding as of the effective date of its resignation as Swingline Lender and L/C Issuer and all Swingline Obligations and L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c) ). Upon the appointment of a successor Swingline Lender and L/C Issuer and the successor Swingline Lender’s and L/C Issuer’s acceptance thereof, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Swingline Lender and L/C Issuer, and (b) the successor Swingline Lender and L/C Issuer shall issue swingline loans and letters of credit in substitution for the Swingline Loans and the Letters of Credit, if any, outstanding at the time of

 

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such succession or make other arrangements satisfactory to Wells Fargo to effectively assume the obligations of Wells Fargo with respect to such Swingline Loans and Wells Fargo Letters of Credit.

(h) Notwithstanding anything to the contrary in this Agreement or in any other Loan Document, any assignment or participation made by a Lender in violation of the provisions of this Section 10.06 (including, without limitation, as a result of the making of any such assignment or the sale of any such participation (i) to an Ineligible Institution (unless the requisite consent has been obtained) or (ii) without any other required consent of the Borrower) shall be void ab initio and, in the case of assignments, the Ineligible Institution shall be deleted from the Register, and the Borrower shall be entitled to seek specific performance to unwind any such assignment or participation in addition to any other remedies available to the Borrower at law or in equity.

10.07 Treatment of Certain Information; Confidentiality . Each of the Administrative Agent, the Lenders, the Swingline Lender and the L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, trustees, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or by any order of any court or administrative agency or in any pending legal or administrative proceeding or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or any Eligible Assignee invited to be a Lender pursuant to Section 2.13(c) or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower, (h) to the extent requested by any Person providing insurance to the Administrative Agent, the Lenders, the Swingline Lender or the L/C Issuer relating to the Borrower and its obligations hereunder, (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the Swingline Lender, the L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower or any of its Affiliates, which source is not to the knowledge of the Administrative Agent, any Lender, the Swingline Lender, the L/C Issuer or any of their respective Affiliates in breach of any confidentiality obligations owing to the Borrower or any of its Affiliates with respect to such Information, or (j) to the extent needed to obtain a Committee on Uniform Securities Identification Procedures (CUSIP) number.

 

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For purposes of this Section, “ Information ” means all information received from any Relevant Party or any Subsidiary or Affiliate thereof relating to any Relevant Party or any Subsidiary thereof or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender, the Swingline Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by any Relevant Party or any Subsidiary or Affiliate thereof from a source that is not to the knowledge of the Administrative Agent, any Lender, the Swingline Lender, the L/C Issuer or any of their respective Affiliates in breach of any confidentiality obligations owing to any Relevant Party or any Subsidiary or Affiliate thereof with respect to such Information, provided that, in the case of information received from a Relevant Party or any Subsidiary or Affiliate thereof after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Each of the Administrative Agent, the Lenders, the Swingline Lender and the L/C Issuer acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States Federal and state securities Laws.

10.08 Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the Swingline Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender, the Swingline Lender or the L/C Issuer, irrespective of whether or not such Lender, the Swingline Lender or the L/C Issuer shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch or office of such Lender, the Swingline Lender or the L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness; provided , that in the event that any Defaulting Lender shall exercise any such right of setoff hereunder, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.15 and, pending such payment, shall be segregated by such Defaulting

 

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Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, the Swingline Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Swingline Lender, the L/C Issuer or their respective Affiliates may have. Each Lender, the Swingline Lender and the L/C Issuer agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

10.09 Interest Rate Limitation . Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “ Maximum Rate ”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

10.10 Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

10.11 Survival of Representations and Warranties . All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any

 

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investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

10.12 Severability . If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 10.12 , if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, the Swingline Lender or the L/C Issuer, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

10.13 Replacement of Lenders . If any Lender requests compensation under Section 3.04 , or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 , if any Lender is a Defaulting Lender or if any other circumstance exists hereunder that gives the Borrower the right to replace a Lender as a party hereto, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06 ), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(a) the Borrower or such assignee shall pay to the Administrative Agent the assignment fee specified in Section 10.06(b) ;

(b) such Lender shall receive payment of an amount equal to the outstanding principal of its Loans, Swingline Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05 ) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

 

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(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01 , such assignment is reasonably expected to result in a reduction in such compensation or payments thereafter; and

(d) such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. Upon receipt by the Lender being replaced of all amounts required to be paid to it pursuant to this Section 10.13 , the Administrative Agent shall be entitled (but not obligated) and authorized to execute an Assignment and Assumption on behalf of such replaced Lender, and any such Assignment and Assumption so executed by the Administrative Agent and the replacement Lender shall be effective for purposes of this Section 10.13 and Section 10.06 .

10.14 Governing Law; Jurisdiction; Etc .

(a) GOVERNING LAW . THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION . EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY HERETO MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE . EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT

 

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PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d) SERVICE OF PROCESS . TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02 . NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15 Waiver of Jury Trial . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16 No Advisory or Fiduciary Responsibility . In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, and WFS and STRH, in their capacities as Joint Lead Arrangers, are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, WFS and STRH, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, WFS and STRH each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not

 

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been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) neither the Administrative Agent, WFS nor STRH has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, WFS and STRH and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Administrative Agent, WFS nor STRH has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent, WFS and STRH with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

10.17 Electronic Execution of Assignments and Certain Other Documents . The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

10.18 USA Patriot Act . Each Lender that is subject to the USA Patriot Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the USA Patriot Act. The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act.

10.19 Time of the Essence . Time is of the essence of the Loan Documents.

10.20 ENTIRE AGREEMENT . THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

WESTERN REFINING LOGISTICS, LP
By: Western Refining Logistics GP, LLC, its general partner
By:  

/s/ Jeffrey S. Beyersdorfer

Name:   Jeffrey S. Beyersdorfer
Title:   Senior Vice President – Treasurer and Assistant Secretary

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:  

/s/ Andrew Ostrov

Name:   Andrew Ostrov
Title:   Director

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Lender, Swingline Lender and L/C Issuer
By:  

/s/ Andrew Ostrov

Name:   Andrew Ostrov
Title:   Director

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


SunTrust Bank,
as a Lender
By:  

/s/ John Kovarik

Name:   John Kovarik
Title:   Vice President

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


Credit Agricole Corporate & Investment Bank,
as a Lender
By:  

/s/ David Gurghigian

Name:   David Gurghigian
Title:   Managing Director
By:  

/s/ Michael Willis

Name:   Michael Willis
Title:   Managing Director

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


UBS LOAN FINANCE LLC,
as a Lender
By:  

/s/ Lana Gifas

Name:   Lana Gifas
Title:   Director
By:  

/s/ Joselin Fernandes

Name:   Joselin Fernandes
Title:   Associate Director

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


PNC Bank, National Association,
as a Lender
By:  

/s/ Chad Greene

Name:   Chad Greene
Title:   Officer

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


BANK OF AMERICA, N.A.,
as a Lender
By:  

/s/ Ronald E. McKaig

Name:   Ronald E. McKaig
Title:   Managing Director

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By:  

/s/ Daniel K. Hansen

Name:   Daniel K. Hansen
Title:   Vice President

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


BARCLAYS BANK PLC,
as a Lender
By:  

/s/ Vanessa A. Kurbatskiy

Name:   Vanessa A. Kurbatskiy
Title:   Vice President

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


COMERICA BANK,
as a Lender
By:  

/s/ Vontoba Terry

Name:   Vontoba Terry
Title:   Corporate Banking Officer

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


Deutsche Bank AG New York Branch,
as a Lender
By:  

/s/ Marcus M. Tarkington

Name:   Marcus M. Tarkington
Title:   Director
By:  

/s/ Anca Trifan

Name:   Anca Trifan
Title:   Managing Director

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


Goldman Sachs Bank USA,
as a Lender
By:  

/s/ Mark Walton

Name:   Mark Walton
Title:   Authorized Signatory

 

Western Refining Logistics, LP – Signature Page to Credit Agreement


Credit Suisse AG, Cayman Islands Branch,
as a Lender
By:  

/s/ Mikhail Faybusovich

Name:   Mikhail Faybusovich
Title:   Authorized Signatory
By:  

/s/ Tyler R. Smith

Name:   Tyler R. Smith
Title:   Authorized Signatory

 

Western Refining Logistics, LP – Signature Page to Credit Agreement

Exhibit 10.2

 

 

CONTRIBUTION, CONVEYANCE AND ASSUMPTION

AGREEMENT

by and among

WESTERN REFINING LOGISTICS LP

WESTERN REFINING LOGISTICS GP, LLC

WESTERN REFINING SOUTHWEST, INC.

SAN JUAN REFINING COMPANY, LLC

WESTERN REFINING PIPELINE, LLC

WESTERN REFINING TERMINALS, LLC

WESTERN REFINING COMPANY, L.P.

and

WESTERN REFINING, INC.

 

 

Dated as of October 16, 2013

 

 


CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

This Contribution, Conveyance and Assumption Agreement, dated as of October 16, 2013 (this “ Agreement ”), is by and among Western Refining Logistics, LP, a Delaware limited partnership (the “ Partnership ”), Western Refining Logistics GP, LLC, a Delaware limited liability company and the general partner of the Partnership (the “ General Partner ”), Western Refining Southwest, Inc., an Arizona corporation (“ WRSW ”), San Juan Refining Company, LLC, a New Mexico limited liability company (“ SJR ”), Western Refining Pipeline, LLC, a New Mexico limited liability company (“ WR Pipeline ”), Western Refining Terminals, LLC, a Delaware limited liability company (“ WR Terminals ”), Western Refining Company, L.P., a Delaware limited partnership (the “ WRCLP ”), and Western Refining Inc., a Delaware corporation (“ WNR ”). The above-named entities are sometimes referred to in this Agreement individually 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 WRSW have formed the Partnership, pursuant to the Delaware Revised Uniform Limited Partnership Act (the “ Delaware Partnership Act ”), for the purpose of owning, operating, developing and acquiring terminals, storage tanks, pipelines, and other logistics assets, as well as engaging in any other business activity that is approved by the General Partner and that lawfully may be conducted by a limited partnership organized under the Delaware Partnership Act.

WHEREAS, in order to accomplish the objectives and purposes in the preceding recital, the following actions have been taken in the following order prior to the date hereof:

1. WRSW formed the General Partner under the terms of the Delaware Limited Liability Act (the “ Delaware LLC Act ”) and contributed $1,000 in exchange for all of the limited liability company interests in the General Partner;

2. WRSW and the General Partner formed the Partnership under the terms of the Delaware Partnership Act and WRSW contributed $1,000 in exchange for a 100% limited partner interest in the Partnership (the “ Initial LP Interest ”) and the General Partner was issued a non-economic general partner interest in the Partnership (the “ GP Interest ”);

3. (a) San Juan Refining Company, a New Mexico corporation, and WRSW, as its sole stockholder, approved and executed an Agreement and Plan of Conversion, providing for the conversion of San Juan Refining Company into a New Mexico limited liability company and changing its name to “San Juan Refining Company, LLC”, and effected such conversion by the filing of a Certificate of Conversion and Articles of Organization with the Secretary of State of the State of New Mexico and (b) Western Refining Pipeline, a New Mexico corporation, and WRSW, as its sole stockholder, approved and executed an Agreement and Plan of Conversion, providing for the conversion of Western Refining Pipeline into a New Mexico limited liability company and changing its name to “Western Refining Pipeline, LLC”, and effected such conversion by the filing of a Certificate of Conversion and Articles of Organization with the Secretary of State of the State of New Mexico. In connection with their respective conversions, each of SJR and WR Pipeline elected to continue to be taxed as corporations for U.S. federal income tax purposes.

 

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4. Western Refining Terminals, Inc., an Arizona corporation, and WRSW, as its sole stockholder, approved the conversion of Western Refining Terminals, Inc. from an Arizona corporation to a Delaware corporation, and effected the conversion by filing a Certificate of Conversion and Certificate of Incorporation with the Secretary of State of the State of Delaware.

5. Western Refining Terminals, Inc., a Delaware corporation, and WRSW, as its sole member, approved the conversion of Western Refining Terminals, Inc. into a Delaware limited liability company and the corresponding changing of its name to “Western Refining Terminals, LLC” and effected the foregoing by filing a Certificate of Conversion and a Certificate of Formation with the Secretary of State of the State of Delaware. In connection with the conversion, WR Terminals elected to continue to be taxed as a corporation for U.S. federal income tax purposes.

6. Each of SJR, WR Pipeline and WR Terminals elected to be treated as a disregarded entity for U.S. federal income tax purposes.

WHEREAS , concurrently with the Closing, each of the matters provided for in Article II will occur in accordance with its respective terms;

WHEREAS , if the Option to Purchase Additional Units is exercised, each of the matters provided for in Article III will occur in accordance with its respective terms; and

WHEREAS , the stockholders, members or partners of the Parties have taken all corporate, 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, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms below:

Bloomfield Primary Lease ” means that certain Ground Lease and Access Agreement dated October 16, 2013 by and between SJR, as lessor, and WRSW, as lessee.

Bloomfield Sublease ” means that certain Ground Lease and Access Agreement dated October 16, 2013 by and between WRSW, as lessor, and WR Terminals, as lessee.

Common Unit ” means a common unit representing a limited partner interest in the Partnership having the rights set forth in the Partnership Agreement.

 

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Collateral ” means any and all “Collateral” under (and as defined in) the Second Amended and Restated Revolving Credit Agreement dated as of April 11, 2013, among WNR, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer.

Effective Time ” means 8:00 a.m. Central Time on the date of the Closing.

El Paso Lease ” means that certain Ground Lease and Access Agreement dated October 16, 2013 by and between WRCLP, as lessor, and WR Terminals, as lessee.

Gallup Lease ” means that certain Ground Lease and Access Agreement dated October 16, 2013 by and between WRSW, as lessor, and WR Terminals, as lessee.

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

Omnibus Agreement ” means that certain Omnibus Agreement, dated as of October 16, 2013, among WNR, WRSW, WRCLP, Western Refining Wholesale, Inc., an Arizona corporation, the Partnership and the General Partner, as such agreement may be amended, supplemented or restated from time to time.

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

Option Units ” means the Common Units that the Partnership will agree to issue upon an exercise of the Option to Purchase Additional Units.

Original Partnership Agreement ” means that certain Agreement of Limited Partnership of the Partnership, dated as of July 23, 2013.

Option to Purchase Additional Units ” has the meaning assigned to it in the Partnership Agreement.

Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of the date of this Agreement.

Partnership Group ” has the meaning set forth in the Omnibus Agreement.

Pipeline Agreement ” means that certain Pipeline and Gathering Services Agreement, dated as of October 16, 2013, among WRSW, WRCLP and WR Pipeline, as such agreement may be amended, supplemented or restated from time to time.

Registration Statement ” means the Registration Statement on Form S-1 filed by the Partnership with the United States Securities and Exchange Commission (Registration No. 333-171525), as amended.

Subordinated Units ” means a subordinated unit representing a limited partner interest in the Partnership having the rights set forth in the Partnership Agreement.

 

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Terminalling Agreement ” means that certain Terminalling, Transportation and Storage Services Agreement, dated as of October 16, 2013, among WRSW, WRCLP and WR Terminals, as such agreement may be amended, supplemented or restated from time to time.

Underwriters ” means the underwriting syndicate listed in the Underwriting Agreement.

Underwriting Agreement ” means a firm commitment underwriting agreement to be entered into between the Partnership and the underwriters named in the Registration Statement.

ARTICLE II

TRANSFERS, CONTRIBUTIONS, ACKNOWLEDGEMENTS AND DISTRIBUTIONS

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

Section 2.1 Distribution of Bloomfield Terminal to WRSW . SJR shall distribute certain logistics assets, including a refined products terminal in Bloomfield, New Mexico and certain assets related thereto, but expressly excluding the land underlying such assets, to WRSW, and WRSW shall accept such distribution, pursuant to the Conveyances Excluding Land, attached hereto as Exhibit 2.1(a)-1 and Exhibit 2.1(a)-2 , and a Bill of Sale and Assignment, attached hereto as Exhibit 2.1(b) .

Section 2.2 Distribution of Non-Operating 16” Pipeline to WRSW . WR Pipeline shall distribute certain assets, including (a) the non-operating segment of WR Pipeline’s 16” pipeline commonly referred to as the “Tex NewMex pipeline” and certain assets related thereto, and (b) all cash, inventory, receivables and other Collateral, in each case held by WR Pipeline, to WRSW, and WRSW shall accept such distribution, pursuant to a Pipeline Conveyance, attached hereto as Exhibit 2.2(a) , and a Bill of Sale and Assignment, attached hereto as Exhibit 2.2(b).

Section 2.3 Distribution of Flagstaff Terminal to WRSW WR Terminals shall distribute certain assets, including (a) a refined products terminal in Flagstaff, Arizona and certain assets related thereto, and (b) all cash, inventory, receivables and other Collateral, in each case held by WR Terminals, to WRSW, and WRSW shall accept such distribution, pursuant to a Special Warranty Deed, attached hereto as Exhibit 2.3(a) , and a Bill of Sale and Assignment, attached hereto as Exhibit 2.3(b) .

Section 2.4 Contribution of Four Corners System to WR Pipeline . WRSW shall contribute certain pipeline and gathering assets, including the gathering and mainline system commonly referred to as the “Four Corners System” and certain assets related thereto, to WR Pipeline, and WR Pipeline shall accept such contribution, pursuant to a Pipeline Conveyance, attached hereto as Exhibit 2.4(a) , and a Bill of Sale and Assignment, attached hereto as Exhibit 2.4(b) . Immediately prior to the foregoing contribution, Giant Industries, Inc. will assign and distribute a lease covering a portion of the “Four Corners System”, and the improvements and assets related to such lease, to WRSW, and WRSW shall accept such assignment and distribution pursuant to an Assignment and Assumption of Lease and Bill of Sale attached hereto as Exhibit 2.4(c) .

 

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Section 2.5 Contribution of Terminal Assets to WR Terminals . WRSW shall contribute certain terminal, transportation and storage assets to WR Terminals, including (a) a tank farm and a refined products terminal located within WRSW’s refinery in Gallup, New Mexico and certain assets related thereto, and (b) a refined products terminal in Bloomfield, New Mexico and certain assets related thereto, but in each instance expressly excluding the land underlying such assets, and WR Terminals shall accept such contribution, pursuant to the Conveyances Excluding Land, attached hereto as Exhibits 2.5(a)-1 , 2.5(a)-2 and 2.5(a)-3 , and a Bill of Sale and Assignment, attached hereto as Exhibit 2.5(b) .

Section 2.6 Execution of the Partnership Agreement . The Partnership, the General Partner and WRSW shall amend and restate the Original Partnership Agreement by executing the Partnership Agreement in substantially the form included in Appendix A to the Registration Statement, with such changes as the Partnership, the General Partner and WRSW may agree.

Section 2.7 Contribution of WR Pipeline and WR Terminals to the Partnership . WRSW hereby grants, contributes, bargains, conveys, 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 (i) 100% of the outstanding limited liability company interests in WR Pipeline and (ii) 100% of the outstanding limited liability company interests in WR Terminals (the “ WR Subsidiary Interests ”) in exchange for 16,167,270 Subordinated Units representing a 35% limited partner interest in the Partnership, (c) the issuance to the General Partner of all of the equity interests in the Partnership classified as “Incentive Distribution Rights” under the Partnership Agreement, (d) the right to receive, upon the expiration of the Option to Purchase Additional Units (i) a number of additional Common Units that is equal to the excess, if any, of (x) 2,062,500 over (y) the aggregate number of Common Units, if any, with respect to which the Underwriters have exercised the Option to Purchase Additional Units; provided that the issuance and purchase of such additional common units is computed within seven (7) Business Days (as defined in the Underwriting Agreement) of the expiration of the Option to Purchase Additional Units, and (ii) a distribution, potentially in whole or in part for reimbursement of pre-formation capital expenditures, in an amount equal to the aggregate amount of cash, if any, contributed by the Underwriters to the Partnership on the Option Closing Date(s) with respect to Common Units (together, the “ Deferred Issuance and Distribution ”) and (e) the right to receive $110,850,000 in proceeds from the Offering, potentially in whole or in part for reimbursement of pre-formation capital expenditures, and the Partnership hereby accepts the WR Subsidiary Interests as a contribution to the capital of the Partnership.

Section 2.8 Contribution of WRCLP Logistics Assets to the Partnership . WRCLP shall contribute (a) certain terminal, transportation and storage assets to WR Terminals, including (i) a tank farm, a products terminal, and an asphalt plant and terminal located within WRCLP’s refinery in El Paso, Texas and certain assets related thereto but expressly excluding the land underlying such assets, (ii) an asphalt terminal in Albuquerque, New Mexico and certain assets related thereto, (iii) an asphalt terminal in Phoenix, Arizona and certain assets related thereto, and (iv) WRCLP’s right, title and interest in and to an asphalt terminal in Tucson, Arizona and certain assets related thereto, and (b) certain pipeline and gathering assets to WR Pipeline, including (i) a crude oil station in McCamey, Texas and certain assets related thereto, and (ii) a 4” crude oil pipeline commonly referred to as the “Riverbend 4” Gathering Pipeline” and certain assets related thereto (such assets in (a) and (b), the “ WRCLP Contribution Assets ”), in exchange for (1) 6,998,500 Common Units and 6,643,730 Subordinated Units

 

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representing a 30% limited partner interest in the Partnership and (2) the right to receive $134,550,000 in proceeds from the Offering, potentially in whole or in part for reimbursement of pre-formation capital expenditures, and WR Terminals and WR Pipeline shall accept such contributions, pursuant to a Conveyance Excluding Land, attached hereto as Exhibit 2.8(a) , the Special Warranty Deeds, attached hereto as Exhibits 2.8(b)-1 and 2.8(b)-2 , an Assignment and Assumption of TEP Service Agreements, attached hereto as Exhibit 2.8(c) , a Pipeline Conveyance attached hereto as Exhibit 2.8(d) , and a Bill of Sale and Assignment/the Bills of Sale and Assignments, attached hereto as Exhibits 2.8(e)-1 and 2.8(e)-2 .

Section 2.9 Entry into Related Party Leases . (a) SJR and WRSW shall enter into the Bloomfield Primary Lease, attached hereto as Exhibit 2.9(a)-1 , and the Memorandum of Lease related to the Bloomfield Primary Lease, attached hereto as Exhibit 2.9(a)-2 ; (b) WRSW and WR Terminals shall enter into (i) the Bloomfield Sublease, attached hereto as Exhibit 2.9(b)(i)-1 , and the Memorandum of Lease related to the Bloomfield Sublease, attached hereto as Exhibit 2.9(b)(i)-2 , and (ii) the Gallup Lease, attached hereto as Exhibit 2.9(b)(ii)-1 , and the Memorandum of Lease related to the the Gallup Lease, attached hereto as Exhibit 2.9(b)(ii)-2 , and (c) WRCLP and WR Terminals shall enter into the El Paso Lease, attached hereto as Exhibit 2.9(c)-1 , and the Memorandum of Lease related to to the El Paso Lease, attached hereto as Exhibit 2.9(c)-2 .

Section 2.10 Public Cash Contribution . The Parties acknowledge that, in connection with the Offering, the public, through the Underwriters, has made a capital contribution to the Partnership of $347,875,000 in cash in exchange for 15,812,500 Common Units (the “ Firm Units ”) representing a 35% limited partner interest in the Partnership and new limited partners are being admitted to the Partnership in connection therewith.

Section 2.11 Payment of Transaction Expenses and Contribution of Proceeds by the Partnership . The Parties acknowledge (a) the payment by the Partnership, in connection with the Closing, of transaction expenses in the amount of approximately $2,800,000 million, excluding underwriting discounts of $19,700,000 in the aggregate but including a structuring fee of 0.50% of the gross proceeds of the Offering payable to two of the Underwriters (the “ Structuring Fee ”), (b) the distribution of approximately $110,850,000 to WRSW and $134,550,000 to WRCLP, potentially in whole or in part for reimbursement of pre-formation capital expenditures, and (c) the retention of the Partnership of approximately $75 million in net proceeds from the Offering to be used for general partnership purposes.

Section 2.12 Redemption of the Initial LP Interest from WRSW and Return of Initial Capital Contribution . The Partnership hereby redeems the Initial LP Interest held by WRSW and hereby refunds and distributes to WRSW the initial contribution, in the amount of $1,000, made by WRSW in connection with the formation of the Partnership, along with any interest or other profit that resulted from the investment or other use of such initial contribution.

ARTICLE III

EXERCISE OF OPTION TO PURCHASE ADDITIONAL UNITS

If the Option to Purchase Additional Units is exercised in whole or in part, the Underwriters will contribute additional cash to the Partnership in exchange for Option Units on

 

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the basis of the Offering price per Common Unit set forth in the Registration Statement, net of underwriting discounts and the Structuring Fee. Upon the conclusion of the Option to Purchase Additional Units, the Partnership shall take all action necessary to effect the Deferred Issuance and Distribution to WRSW.

ARTICLE IV

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 (a) 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, (b) 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 (c) more fully and effectively to carry out the purposes and intent of this Agreement.

ARTICLE V

EFFECTIVE TIME

Section 5.1 Order of Completion of Transactions . The transactions provided for in Article II of this Agreement shall be completed immediately following the Effective Time in the order set forth therein; and, following the completion of the transactions provided for in Article II , the transactions provided for in Article III , if they occur, shall be completed.

Section 5.2 Effective Time . Notwithstanding anything contained in this Agreement to the contrary, none of the provisions of Article II , Article III or Article IV shall be operative or have any effect until the Effective Time, at which time all such provisions shall be effective and operative in accordance with Section 5.1 without further action by any Party.

ARTICLE VI

MISCELLANEOUS

Section 6.1 Headings; References; Interpretation . All Article and Section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, including, without limitation, all Schedules and Exhibits attached hereto, and not to any particular provision of this Agreement. All references herein to Articles, Sections, Schedules and Exhibits shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement and the Schedules and Exhibits attached hereto, and all such Schedules and Exhibits attached hereto are hereby incorporated herein and made a part hereof for all purposes. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders, and the singular shall include the plural and vice versa. The use herein of the word “including” following

 

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any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation,” “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter. All references to limited partner interests representing a percentage of the total limited partner interest in the Partnership herein are calculated based on the number of Common Units expected to be outstanding following the expiration of the Option to Purchase Additional Units).

Section 6.2 Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

Section 6.3 No Third Party Rights . The provisions of this Agreement are intended to bind the Parties as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies, and no person is or is intended to be a third party beneficiary of any of the provisions of this Agreement.

Section 6.4 Counterparts . This Agreement may be executed in any number of counterparts with the same effect as if all Parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument.

Section 6.5 Applicable Law; Forum, Venue and Jurisdiction . This Agreement shall be governed by the laws of the State of Texas without giving effect to its conflict of laws principles. Each Party hereby irrevocably submits to the exclusive jurisdiction of any federal court of competent jurisdiction situated in the United States District Court for the Southern District of Texas sitting in Houston, Texas, or if such federal court declines to exercise or does not have jurisdiction, in the district court of Harris County, Texas. The Parties expressly and irrevocably submit to the jurisdiction of said Courts and irrevocably waive any objection which they may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of or relating to this Agreement brought in such Courts, irrevocably waive any claim that any such action, suit or proceeding brought in any such Court has been brought in an inconvenient forum and further irrevocably waive the right to object, with respect to such claim, action, suit or proceeding brought in any such Court, that such Court does not have jurisdiction over such Party. The Parties hereby irrevocably consent to the service of process by registered mail, postage prepaid, or by personal service within or without the State of Texas. Nothing contained herein shall affect the right to serve process in any manner permitted by law.

Section 6.6 Severability . If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the Parties as expressed in this Agreement at the time of execution of this Agreement.

 

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Section 6.7 Amendment or Modification . This Agreement may be amended or modified from time to time only by the written agreement of all the Parties. Each such instrument shall be reduced to writing and shall be designated on its face as an amendment to this Agreement. Notwithstanding anything in the foregoing to the contrary, any amendment executed by the Partnership or any of its subsidiaries shall not be effective unless and until the execution of such amendment has been approved by the conflicts committee of the General Partner’s board of directors.

Section 6.8 Integration . THIS AGREEMENT AND THE INSTRUMENTS REFERENCED HEREIN SUPERSEDE ALL PREVIOUS UNDERSTANDINGS OR AGREEMENTS AMONG THE PARTIES, WHETHER ORAL OR WRITTEN, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT AND SUCH INSTRUMENTS. THIS AGREEMENT AND SUCH INSTRUMENTS CONTAIN THE ENTIRE UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO UNDERSTANDING, REPRESENTATION, PROMISE OR AGREEMENT, WHETHER ORAL OR WRITTEN, IS INTENDED TO BE OR SHALL BE INCLUDED IN OR FORM PART OF THIS AGREEMENT UNLESS IT IS CONTAINED IN A WRITTEN AMENDMENT HERETO EXECUTED BY THE PARTIES HERETO AFTER THE DATE OF THIS AGREEMENT.

Section 6.9 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.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties to this Agreement have caused it to be duly executed as of the date first above written.

 

WESTERN REFINING LOGISTICS, LP     WESTERN REFINING INC.
By:   Western Refining Logistics GP, LLC,     By:  

/s/ Jeff A. Stevens

  its general partner       Jeff A. Stevens
        President and Chief Executive Officer
      WESTERN REFINING TERMINALS, LLC
By:  

/s/ Mark J. Smith

    By:  

/s/ Mark J. Smith

  Mark J. Smith       Mark J. Smith
  Executive Vice President       Executive Vice President
WESTERN REFINING LOGISTICS GP, LLC     WESTERN REFINING PIPELINE, LLC
By:  

/s/ Mark J. Smith

    By:  

/s/ Mark J. Smith

  Mark J. Smith       Mark J. Smith
  Executive Vice President       Executive Vice President
WESTERN REFINING SOUTHWEST INC.     WESTERN REFINING COMPANY, L.P.
        By: Western Refining Logistics GP, LLC, its general partner
By:  

/s/ Gary R. Dalke

    By:  

/s/ Gary R. Dalke

  Gary R. Dalke       Gary R. Dalke
  Chief Financial Officer       Chief Financial Officer
SAN JUAN REFINING COMPANY, LLC      
By:  

/s/ Gary R. Dalke

     
  Gary R. Dalke      
  Chief Financial Officer      

Signature Page to Contribution, Conveyance and Assumption Agreement

Exhibit 10.3

 

 

 

OMNIBUS AGREEMENT

among

WESTERN REFINING, INC.,

WESTERN REFINING LOGISTICS, LP,

WESTERN REFINING LOGISTICS GP, LLC,

and, solely for the limited purposes set forth herein,

WESTERN REFINING SOUTHWEST, INC.,

WESTERN REFINING COMPANY, L.P.

and

WESTERN REFINING WHOLESALE, INC.

 

 

 


OMNIBUS AGREEMENT

This OMNIBUS AGREEMENT (“ Agreement ”) is entered into on, and effective as of, the Closing Date (as defined herein) among Western Refining, Inc., a Delaware corporation (“ Western ”), on behalf of itself and the other Western Parties (as defined herein), Western Refining Logistics, LP, a Delaware limited partnership (the “ Partnership ”), Western Refining Logistics GP, LLC, a Delaware limited liability company (the “ General Partner ”) and, solely with respect to Articles IV and VII hereof, Western Refining Southwest, Inc., an Arizona corporation (“ WRSW ”), Western Refining Company, L.P., a Delaware limited partnership (“ WRCLP ”) and Western Refining Wholesale, Inc., an Arizona corporation (“ Wholesale ” and, together with WRSW and WRCLP, the “ ROFO Asset Owners ”). The above-named entities are sometimes referred to in this Agreement each as a “ Party ” and collectively as the “ Parties ”; provided that the ROFO Asset Owners are only considered to be Parties hereto with respect to Articles IV and VII hereof.

R E C I T A L S:

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 indemnification obligations of the Parties to each other.

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 certain general and administrative services to be performed by Western and its Affiliates (as defined herein) for and on behalf of the Partnership Group (as defined herein) and the Partnership’s obligations to reimburse Western and its Affiliates for certain costs and expenses incurred in connection therewith.

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 the Partnership Group’s right of first offer with respect to the ROFO Assets (as defined herein).

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 granting of a license from Western to the Partnership Group and the General Partner and the granting of a license from the Partnership to Western and its Affiliates, in each case with respect to certain intellectual property owned by the granting party.

In consideration of the promises 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:

Additional ROFO Assets ” is defined in Section 4.1.


Affiliate ” is defined in the Partnership Agreement.

Assets ” means all gathering pipelines, transportation pipelines, storage tanks, trucks, truck racks, terminal facilities, offices 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.

Closing Date ” means October 16, 2013.

Common Units ” is defined in the Partnership Agreement.

Conflicts Committee ” is defined in the Partnership Agreement.

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

control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

Covered Environmental Losses ” is defined in Section 2.1.

El Paso Refinery ” means the refinery owned and operated by Western Refining, Inc. or its Subsidiaries located in El Paso, Texas.

El Paso Refinery Assets ” means any of the Assets located at or contiguous with the El Paso Refinery, including the El Paso tank farms, El Paso refined products terminal, and El Paso asphalt plant and terminal.

Environmental Activity ” is defined in Section 2.1.

Environmental Deductible ” is defined in Section 2.5.

Environmental Laws ” 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 including, without limitation, 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 Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other environmental conservation and protection laws, each as amended from time to time.

 

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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.

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

Existing ROFO Assets ” means the assets listed on Schedule IV to this Agreement.

Hazardous Substance ” means (a) 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 under any Environmental Law, including, without limitation, any hazardous substance as defined under the Comprehensive Environmental Response, Compensation, and Liability Act, as amended, and (b) petroleum, oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other refined petroleum hydrocarbons.

Identification Deadline ” means October 16, 2018.

Indemnified Party ” means the Partnership Group or the Western Parties, as the case may be, in its capacity as the party entitled to indemnification in accordance with Article II.

Indemnifying Party ” means either the Partnership Group or the Western Parties, as the case may be, in its capacity as the party from whom indemnification may be sought in accordance with Article II.

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.

Non-Environmental Deductible ” is defined in Section 2.5.

Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of Western Refining 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 Western ceases to control the general partner of the Partnership.

Partnership Group ” means the Partnership and any of its Subsidiaries, treated as a single consolidated entity.

 

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

Partnership Security ” is defined in the Partnership Agreement.

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

Person ” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization association, government agency or political subdivision thereof or other entity.

Proposed Transaction ” is defined in Section 4.2(a).

Prudent Industry Practice ” means such practices, methods, acts, techniques, and standards as are in effect at the time in question that are consistent with the higher of (a) the standards generally followed by the United States pipeline and terminalling industries and (b) the standards applied or followed by Western or its Affiliates in the performance of similar tasks or projects, or by the Partnership Group or its Affiliates in the performance of similar tasks or projects.

Registration Statement ” means the Registration Statement on Form S-1 filed by the Partnership with the United States Securities and Exchange Commission (Registration No. 333-190135), as amended.

Retained Assets ” means all gathering pipelines, transportation pipelines, storage tanks, trucks, truck racks, terminal facilities, offices and related equipment, real estate and other related assets, or portions thereof owned by any of the Western Parties that were not directly or indirectly conveyed, contributed or otherwise transferred to the Partnership Group pursuant to the Contribution Agreement or the other documents referred to in the Contribution Agreement.

ROFO Asset Owner ” means, with respect to an Existing ROFO Asset, the applicable Western Party set forth opposite such ROFO Asset on Schedule IV to this Agreement and, with respect to an Additional ROFO Asset, the applicable Western Party that initially constructs or acquires such Additional ROFO Asset.

ROFO Assets ” is defined in Section 4.1(b).

ROFO Notice ” is defined in Section 4.2(a).

ROFO Period ” is defined in Section 4.1(a).

ROFO Region ” means Texas west of I-35, Arizona, Colorado, New Mexico, Utah and any additional areas to which the Parties may agree in writing.

ROFO Response ” is defined in Section 4.2(a).

Services Agreement ” means that certain Operational Services Agreement, by and among WRSW, WRCLP and the Partnership, dated as of the date hereof.

 

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

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 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 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 or other governing body of such Person.

Voting Stock ” means securities of any class of a Person entitling the holders thereof to vote on a regular basis in the election of members of the board of directors or other governing body of such Person.

Western License ” is defined in Section 5.1.

Western Marks ” is defined in Section 5.1.

Western Name ” is defined in Section 5.1.

Western Parties ” means Western and any Person controlled, directly or indirectly, by Western other than the General Partner or a member of the Partnership Group; and “ Western Party ” means any of the Western Parties.

WNRL License ” is defined in Section 5.3.

WNRL Marks ” is defined in Section 5.3.

WNRL Trademark ” is defined in Section 5.3.

ARTICLE II

Indemnification

2.1 Environmental Indemnification .

(a) Subject to Section 2.5, the Western Parties shall jointly and severally indemnify, defend and hold harmless the Partnership Group from and against any Losses suffered or incurred by the Partnership Group, directly or indirectly, or as a result of any claim by a third party, by reason of or arising out of:

(i) any violation or correction of violation of Environmental Laws arising from or relating to the ownership, operation or condition of the Assets at and prior to the Closing Date, provided Western is notified in writing of such violation or correction of violation prior to the Identification Deadline;

 

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(ii) any environmental event, condition or matter arising from or relating to the ownership, operation or condition of the Assets at and prior to the Closing Date (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets at non-Asset locations) including, without limitation, (A) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws (each, an “ Environmental Activity ”), (B) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense of any environmental or toxic tort pre-trial, trial, or appellate legal or litigation support work, provided Western is notified in writing of such environmental event, condition or matter prior to the Identification Deadline;

(iii) all environmental events, conditions or matters or currently pending legal actions described on Schedule I attached hereto, which schedule shall include all such events, conditions, matters or actions known to the Western Parties on the date of this Agreement relating to the Assets; and

(iv) any environmental event, condition or matter associated with or arising from the Retained Assets, whether occurring at, prior to or after the Closing Date, except to the extent caused by the gross negligence or willful misconduct of the Partnership Group occurring after the Closing Date;

(clauses (i) through (iv) collectively, “ Covered Environmental Losses ”).

(b) The Partnership Group shall jointly and severally indemnify, defend and hold harmless the Western Parties from and against any Losses suffered or incurred by the Western Parties, directly or indirectly, or as a result of any claim by a third party, by reason of or arising out of:

(i) any violation or correction of violation of Environmental Laws (x) arising from or relating to the ownership or condition of the Assets following the Closing Date or the operation of the Assets by the Partnership Group following the Closing Date or (y) arising from or relating to the ownership, operation or condition of the Assets at and prior to the Closing Date ; and

(ii) any environmental event, condition or matter (x) arising from or relating to the ownership or condition of the Assets following the Closing Date or the operation of the Assets by the Partnership Group following the Closing Date or (y) arising from or relating to the ownership, operation or condition of the Assets at and prior to the Closing Date (in each case, including, but not limited to, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets at non-Asset locations), in each case, including, without limitation, (A) the cost and expense of any Environmental Activity, (B) the cost or expense of the preparation and

 

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implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense for any environmental or toxic tort pre-trial, trial, or appellate legal or litigation support work;

in each case, to the extent that any of the foregoing are not Covered Environmental Losses for which the Partnership Group is entitled to indemnification from the Western Parties under this Article II without giving effect to the Environmental Deductible, and further to the extent that any of the foregoing are not (x) Liability Claims (as defined in the Services Agreement) or (y) losses, in each case, for which the Partnership Group is entitled to indemnification from any Western Parties under the Services Agreement.

2.2 Right of Way Indemnification . Subject to Section 2.5, the Western Parties shall jointly and severally indemnify, defend and hold harmless the Partnership Group from and against any Losses suffered or incurred by the Partnership Group by reason of or arising out of (a) the failure of the Western Parties to validly convey, assign or otherwise transfer to the Partnership Group such valid and indefeasible easement rights or fee ownership or leasehold interests in and to the lands on which any crude oil or refined products pipeline or related pump station, storage tank, terminal or truck rack or any related facility or equipment conveyed or contributed to the applicable Partnership Group Member on the Closing Date is located, and such failure renders the Partnership Group liable to a third party or unable to use or operate the Assets in substantially the same manner that the Assets were used and operated by the applicable Western Party immediately prior to the Closing Date as described in the Registration Statement; (b) the failure of the Western Parties to convey, assign or otherwise transfer to the Partnership Group the consents, licenses and permits necessary to allow any such pipeline referred to in clause (a) of this Section 2.2 to cross the roads, waterways, railroads and other areas upon which any such pipeline is located, and such failure renders the Partnership Group liable to a third party or unable to use or operate the Assets in substantially the same manner that the Assets were used and operated by the applicable Western Party immediately prior to the Closing Date as described in the Registration Statement; and (c) the cost of curing any condition set forth in clause (a) or (b) of this Section 2.2 that does not allow any Asset to be operated in accordance with Prudent Industry Practice, in each case to the extent that Western is notified in writing of any of the foregoing prior to the Identification Deadline.

2.3 Non-Environmental Indemnification .

(a) In addition to and not in limitation of the indemnification provided under Sections 2.1(a) and 2.2, the Western Parties shall jointly and severally indemnify, defend, and hold harmless the Partnership Group from and against any Losses suffered or incurred by the Partnership Group arising from or relating to (i) the ownership, operation or condition of the Assets at and prior to the Closing Date (other than Covered Environmental Losses, which are provided for under Sections 2.1, and those Losses provided for under Section 2.2) to the extent that Western is notified in writing of any of the foregoing prior to the Identification Deadline, (ii) any currently pending legal actions against the Western Parties set forth on Schedule II attached hereto, (iii) events and conditions associated with the Retained Assets, whether occurring at, before or after the Closing Date except to the extent caused by the gross negligence or willful misconduct of the Partnership Group occurring after the Closing Date, (iv) the failure to validly convey, assign or otherwise transfer any consent, license, permit or approval necessary

 

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for the Partnership Group to own or operate the Assets in substantially the same manner as owned or operated by the Western Parties immediately prior to the Closing Date, to the extent that Western is notified in writing of any of the foregoing prior to the Identification Deadline, and (v) all federal, state and local income tax liabilities attributable to the ownership, operation or condition of the Assets prior to the Closing Date, including under Treasury Regulation Section 1.1502-6 (or any similar provision of state or local law), and any such income tax liabilities of the Western Parties that may result from the consummation of the formation transactions for the Partnership Group and the General Partner occurring on or prior to the Closing Date.

(b) In addition to and not in limitation of the indemnification provided under Section 2.1(b) or the Partnership Agreement, the Partnership Group shall jointly and severally indemnify, defend, and hold harmless the Western Parties from and against any Losses suffered or incurred by the Western Parties arising from or relating to the ownership or condition of the Assets following the Closing Date or the operation of the Assets by the Partnership Group following the Closing Date (other than Covered Environmental Losses which are provided for under Section 2.1), in each case, to the extent that any of the foregoing are not (i) Liability Claims (as defined in the Services Agreement) or (ii) losses, in each case, for which the Partnership Group is entitled to indemnification from any Western Parties under Section 2.3(a) above or under the Services Agreement, and in each case, unless such indemnification would not be permitted under the Partnership Agreement by reason of one of the provisos contained in Section 7.7(a) of the Partnership Agreement.

2.4 Indemnification Procedures .

(a) The Indemnified Party agrees that within a reasonable period of time after it becomes aware of facts giving rise to a claim for indemnification under this Article II, it will provide notice thereof in writing to the Indemnifying Party, specifying the nature of and specific basis for such claim.

(b) 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 Article II, including, without limitation, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such claim or any matter or any issues relating thereto; provided , however , that no such settlement shall be entered into without the consent of the Indemnified Party unless it includes a full release of the Indemnified Party from such claim.

(c) The Indemnified Party agrees to cooperate in good faith and in a commercially reasonable manner with the Indemnifying Party, at the Indemnifying Party’s expense, with respect to all aspects of the defense of any claims covered by the indemnification under this Article II, 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 considers relevant to such defense, the making available to the Indemnifying Party of any employees of the Indemnified Party and the granting

 

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to the Indemnifying Party of reasonable access rights to the properties and facilities 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 maintain the confidentiality of all files, records, and other information furnished by the Indemnified Party pursuant to this Section 2.4. 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 Article II; 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 informed as to the status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense.

(d) In determining the amount of any loss, cost, damage or expense 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 Indemnified Party under contractual indemnities from third Persons.

2.5 Limitations Regarding Indemnification .

(a) With respect to Covered Environmental Losses under Section 2.1(a)(i) and Section 2.1(a)(ii), the Western Parties shall not be obligated to indemnify, defend and hold harmless the Partnership Group for any such Covered Environmental Loss until such time as the amount of such Covered Environmental Losses associated with an individual claim exceeds $100,000 (the “ Environmental Deductible ”), at which time the Western Parties shall be obligated to indemnify the Partnership Group for the amount of Covered Environmental Losses with respect to such claim under Section 2.1(a)(i) and Section 2.1(a)(ii) that are in excess of the Environmental Deductible that are incurred by the Partnership Group. The Western Parties shall not be obligated to indemnify, defend and hold harmless the Partnership Group for any individual Loss under Section 2.2, Section 2.3(a)(ii), Section 2.3(a)(iv) or Section 2.3(a)(v) until such time as the aggregate amount of all Losses under Section 2.2, Section 2.3(a)(ii), Section 2.3(a)(iv) and Section 2.3(a)(v) exceeds $200,000 (the “ Non-Environmental Deductible ”), at which time the Western Parties shall be obligated to indemnify the Partnership Group for all Losses under Section 2.2, Section 2.3(a)(ii), Section 2.3(a)(iv) and Section 2.3(a)(v) in excess of the Non-Environmental Deductible that are incurred by the Partnership Group.

(b) For the avoidance of doubt, there is no monetary cap on the amount of indemnity coverage provided by any Indemnifying Party under this Article II.

(c) Notwithstanding anything herein to the contrary, no Party shall be liable to any other Party for consequential, incidental or punitive damages, or for loss of profits or revenues incurred by such Party or any of 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 that the foregoing limitation is not intended and shall not affect special damages

 

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imposed in favor of unaffiliated Persons that are not Parties to this Agreement. THE PARTIES AGREE THAT THE RESTRICTIONS AND LIMITATIONS ON DAMAGES CONTAINED HEREIN DO NOT DEPRIVE THE PARTIES OF MINIMUM ADEQUATE REMEDIES UNDER TEXAS UCC SECTION 2-719 OR OTHER APPLICABLE LAW.

2.6 Access Rights . Upon reasonable advance notice, the Partnership Group shall afford to the directors, officers, employees, accountants, counsel, agents, consultants, auditors and other authorized representatives of Western reasonable access, during normal business hours, to the Assets in order to conduct any Environmental Activity that Western has agreed to perform or is responsible for performing or to otherwise observe, review or evaluate any matters for which the Partnership Group may seek indemnification from Western pursuant to this Article II; provided that any such access shall be conducted in a manner so as not to interfere unreasonably with the operation of the business of the Partnership Group and Western shall indemnify, defend and hold harmless the Partnership Group from and against any losses of the Partnership Group arising from personal injury or property damage as a result of the access granted hereby to the directors, officers, employees, accountants, counsel, agents, consultants, auditors and other authorized representatives of Western.

ARTICLE III

Services

3.1 Provision, Allocation and Reimbursement for Services .

(a) Western agrees to provide, and agrees to cause its Affiliates to provide, on behalf of the General Partner for the Partnership Group’s benefit, the selling, general and administrative services necessary to run the business of the Partnership Group (the “ Business ”), which services may include, without limitation, those services set forth in Schedule III to this Agreement (collectively, the “ Services ”). The Services shall be substantially similar in nature, quality and scope to the services of each such type previously provided by the Western Parties in connection with their management and operation of the Business and Assets prior to the contribution thereof to the Partnership.

(b) Notwithstanding anything herein to the contrary, and in recognition of the fact that the Services to be performed and provided by the Western Parties hereunder are to be furnished, performed and provided in exchange for the reimbursement provided herein, the Western Parties shall only be liable to the Partnership Group for gross negligence or willful misconduct in the performance of its obligations hereunder, AND NO WESTERN PARTY NOR ANY OF ITS AFFILIATES OR AGENTS AS SUCH WESTERN PARTY SHALL APPOINT TO PERFORM DUTIES HEREUNDER OR THEIR RESPECTIVE DIRECTORS, STOCKHOLDERS, OFFICERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES, SUCCESSORS, TRANSFEREES AND ASSIGNEES SHALL BE LIABLE TO THE PARTNERSHIP OR PERSONS WHO HAVE ACQUIRED INTERESTS IN THE PARTNERSHIP, WHETHER AS PARTNERS, ASSIGNEES OR OTHERWISE, FOR ERRORS IN JUDGMENT OR FOR ANY ACTS OR OMISSIONS THAT DO NOT CONSTITUTE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT .

 

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(c) Subject to Section 3.1(b), the Partnership Group Members hereby agree to reimburse the Western Parties for all cash expenses and expenditures that the Western Parties incur or payments the Western Parties make on behalf of the Partnership Group in connection with providing the Services, as well as for certain other direct or allocated costs and expenses incurred by the Western Parties on behalf of the Partnership Group including, but not limited to:

(i) all costs associated with its personnel performing services pursuant to this agreement on an allocation methodology reasonably determined by the Western Parties. This methodology will be determined by the Western Parties on an annual basis following the approval of the Operating Budget (as contemplated in the Operational Services Agreement) by the Partnership but no later than December 31 of the year preceding the year services are to be provided;

(ii) all reasonable out-of-pocket expenses of the Western Parties’ employees providing services pursuant to this Agreement which were reimbursed under the terms of such Western Party’s official policy governing reimbursable employee expenses;

(iii) all costs of outside services and expertise, including but not limited to fees from consultants, provided that the outside services rendered were for the benefit of the Partnership Group under the Agreement;

(iv) all net costs and expenses for handling, investigating and settling litigation or claims arising by reason of the provision of the Services, or necessary to protect or recover any of the Partnership’s property, including, but not limited to, attorneys’ fees, court costs, cost of investigation or procuring evidence and any judgments paid or amounts paid in settlement or satisfaction of any such litigation or claims;

(v) the cost of complying with mandated regulatory programs;

(vi) all expenses and expenditures incurred by Western or its Affiliates as a result of the Partnership becoming and continuing as a publicly traded entity, including, but not limited to, costs associated with quarterly and annual reports to unitholders, financial statement audit, tax returns and Schedule K-1 preparation and distribution, investor relations activities, registrar and transfer agent fees, incremental director and officer liability insurance premiums, and independent director compensation; and

(vii) 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 Western and its Affiliates to the Partnership Group pursuant to Section 3.1(a).

Such reimbursements shall be made on or before the twenty-first (21 st ) calendar day of the month following the month such costs and expenses are incurred. For the avoidance of doubt, (i) 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, certain expenses of the General Partner and its Affiliates that are reimbursed under the Partnership Agreement and (ii) to the extent that the costs and expenses of any Services are billed to the Partnership Group under the Services Agreement, it is the intent of the Parties that such Services shall not also be billed under this Agreement.

 

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ARTICLE IV

Right of First Offer

4.1 Right of First Offer to Purchase Certain Assets retained by Western Parties .

(a) Each ROFO Asset Owner hereby grants to the Partnership Group a right of first offer, until the earlier to occur of (i) the 10 th anniversary of the Closing Date or (ii) the date that the Partnership is no longer controlled by Western ((i) and (ii) collectively, the “ ROFO Period ”), on any Existing ROFO Asset set forth next to such ROFO Asset Owner’s name on Schedule IV to the extent that such ROFO Asset Owner proposes to Transfer any Existing ROFO Asset (other than to an Affiliate who agrees in writing that such Existing ROFO Asset remains subject to the provisions of this Article IV and such Affiliate assumes the obligations under this Article IV with respect to such Existing ROFO Asset) or enter into any agreement to do any of the foregoing during the ROFO Period.

(b) In addition, Western hereby grants to the Partnership Group, for the duration of the ROFO Period, a right of first offer to acquire additional logistics assets the Western Parties may construct or acquire in the future (the “ Additional ROFO Assets ” and together with the Existing ROFO Assets, the “ ROFO Assets ”) in the ROFO Region to the extent that such ROFO Asset Owner proposes to Transfer any Additional ROFO Asset (other than to an Affiliate who agrees in writing that such Additional ROFO Asset remains subject to the provisions of this Article IV and such Affiliate assumes the obligations under this Article IV with respect to such Additional ROFO Asset) or enter into any agreement to do any of the foregoing during the ROFO Period. Upon the construction or acquisition of any Additional ROFO Asset by any ROFO Asset Owner that is not a party to this Agreement, Western agrees to cause such entity to agree in writing that such Additional ROFO Asset is subject to the provisions of this Article IV and to assume the obligations under this Article IV with respect to such Additional ROFO Asset.

(c) The Parties acknowledge that any Transfer of ROFO Assets pursuant to the Partnership Group’s right of first offer is subject to the terms of all existing agreements with respect to the ROFO Assets (or, with respect to Additional ROFO Assets acquired from third parties, all agreements existing at the time of the acquisition of such ROFO Asset by a Western Party); provided , however , that the Western Parties represent and warrant that, to their 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 IV with respect to any ROFO Asset.

4.2 Procedures .

(a) In the event a ROFO Asset Owner proposes to Transfer any applicable ROFO Asset (other than to an Affiliate) during the ROFO Period (a “ Proposed Transaction ”), such ROFO Asset Owner shall, prior to entering into any such Proposed Transaction, first give notice in writing to the Partnership Group (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 a Partnership Group Member to make a responsive offer to enter into the Proposed Transaction with the applicable ROFO Asset Owner, which terms, conditions and details shall at a minimum include any terms, condition or details that such ROFO

 

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Asset Owner would propose to provide to non-Affiliates in connection with the Proposed Transaction. The Partnership Group shall have 45 days following receipt of the ROFO Notice to propose an offer to enter into the Proposed Transaction with such ROFO Asset Owner (the “ ROFO Response ”). The ROFO Response shall set forth the terms and conditions (including, without limitation, the purchase price the applicable Partnership Group Member proposes to pay for the ROFO Asset and the other terms of the purchase including, if requested by a Western Party, the terms on which the Partnership Group Member will provide services to the Western Party to enable the Western Party to utilize the applicable ROFO Asset) pursuant to which the Partnership Group would be willing to enter into a binding agreement for the Proposed Transaction. The decision to issue the ROFO Response and the terms of the ROFO Response shall be subject to approval by the Conflicts Committee. If no ROFO Response is delivered by the Partnership Group within such 45-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 applicable ROFO Asset Owner to the applicable Partnership Group Member within 45 days of the delivery of the ROFO Response, such ROFO Response shall be deemed to have been accepted by the applicable ROFO Asset Owner and such ROFO Asset Owner shall enter into an agreement with the applicable Partnership Group Member providing for the consummation of the Proposed Transaction upon the terms set forth in the ROFO Response and, if applicable, the Partnership Group Member will enter into an agreement with the Western Party setting forth the terms on which the Partnership Group Member will provide services to the Western Party to enable the Western Party to utilize the ROFO Asset. Unless otherwise agreed between the applicable Western Party and Partnership Group Member, the terms of the purchase and sale agreement will include the following:

(i) the Partnership Group Member will deliver the agreed purchase price (in cash, Partnership Securities, an interest-bearing promissory note, or any combination thereof);

(ii) the applicable ROFO Asset Owner will represent that it has title to the ROFO Assets that is sufficient to operate the ROFO Assets in accordance with their intended and historical use, subject to all recorded matters and all physical conditions in existence on the closing date for the purchase of the applicable ROFO Asset, plus any other such matters as the Partnership Group Member may approve. If the Partnership Group Member 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 Member;

(iii) the applicable ROFO Asset Owner will grant to the Partnership Group Member the right, exercisable at the Partnership Group Member’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 Member may deem desirable, so long as such surveys, tests or inspections do not damage the ROFO Asset or interfere with the activities of the applicable ROFO Asset Owner;

(iv) the Partnership Group Member will have the right to terminate its obligation to purchase the ROFO Asset under this Article IV if the results of any diligence under Section 4.2(b)(ii) or (iii) above are, in the reasonable opinion of the Partnership Group Member, unsatisfactory;

 

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(v) the closing date for the purchase of the ROFO Asset shall occur no later than 180 days following receipt by the Western Party of the ROFO Response pursuant to Section 4.2(a);

(vi) the applicable ROFO Asset Owner and Partnership Group Member 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 4.2(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 applicable ROFO Asset Owner nor the applicable Partnership Group Member shall have any obligation to sell or buy the applicable ROFO Asset if any of the consents referred to in Section 4.2(b) has not been obtained.

(c) 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 applicable ROFO Asset Owner 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 any Proposed Transaction is rejected by the applicable ROFO Asset Owner, such ROFO Asset Owner 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 100% of the price offered by the applicable Partnership Group Member in the ROFO Response to such ROFO Asset Owner.

ARTICLE V

License of Name and Mark

5.1 Grant of License by Western . Upon the terms and conditions set forth in this Article V, Western hereby grants and conveys to the Partnership and each of the entities currently or hereafter comprising a part of the Partnership Group a nontransferable, nonexclusive, royalty-free right and license (the “ Western License ”) to use the name “Western” (the “ Western Name ”) and any other trademarks and tradenames owned by Western listed on Schedule V (collectively, the “ Western Marks ”).

5.2 Ownership and Quality of Western Marks . The Partnership, on behalf of itself and the other Partnership Group Members, agrees that ownership of the Western Marks and the goodwill relating thereto shall remain vested in Western during the term of the Western License and thereafter. The Partnership agrees, and agrees to cause the other Partnership Group Members, never to challenge, contest or question the validity of Western’s ownership of the Western Marks or any registration thereof by Western. In connection with the use of the Western Marks, the Partnership and any other Partnership Group Member shall not in any manner

 

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represent that they have any ownership in the Western Marks or registration thereof. The Partnership, on behalf of itself and the other Partnership Group Members, acknowledges that the use of the Western Marks shall not create any right, title or interest in or to the Western Marks, and all use of the Western Marks by the Partnership or any other Partnership Group Member shall inure to the benefit of Western. The Partnership agrees, and agrees to cause the other Partnership Group Members, to use the Western Marks in accordance with such quality standards established by Western and communicated to the Partnership Group from time to time, it being understood that the products and services offered by the Partnership Group Members as of the Closing Date are of a quality that is acceptable to Western.

5.3 Grant of License by Partnership . Upon the terms and conditions set forth in this Article V, the General Partner, on behalf of the Partnership, hereby grants and conveys to Western and its Affiliates a nontransferable, nonexclusive, royalty-free right and license (the “ WNRL License ”) to use the “WNRL” name, logo and trademark (the “ WNRL Trademark ”) and any other trademarks and tradenames owned by the Partnership listed on Schedule V (collectively, the “ WNRL Marks ”).

5.4 Ownership and Quality of WNRL Marks . Western agrees, on behalf of itself and the Western Parties, that ownership of the WNRL Marks and the goodwill relating thereto shall remain vested in the Partnership, for the benefit of the Partnership, during the term of the WNRL License and thereafter. Western agrees, and agrees to cause the Western Parties, never to challenge, contest or question the validity of the Partnership’s ownership of the WNRL Marks or any registration thereof by the General Partner or the Partnership. In connection with the use of the WNRL Marks, neither Western nor any of the Western Parties shall in any manner represent that they have any ownership in the WNRL Marks or registration thereof. Western, on behalf of itself and the Western Parties, acknowledges that the use of the WNRL Marks shall not create any right, title or interest in or to the WNRL Marks, and all use of the WNRL Marks by Western or any of the Western Parties shall inure to the benefit of the General Partner and the Partnership. Western agrees, and agrees to cause the Western Parties, to use the WNRL Marks in accordance with such quality standards established by the General Partner, on behalf of and for the benefit of the Partnership, and communicated to Western from time to time

5.5 Termination . The Western License and the WNRL License shall terminate upon a termination of this Agreement pursuant to Section 7.4.

ARTICLE VI

Permits

6.1 Operation of Assets . From and after the Closing Date, and until such time as all Environmental Permits for the Assets have been transferred to the Partnership and its Subsidiaries in accordance with Section 6.2 , the Partnership and its Subsidiaries shall be allowed to operate the Assets under any Western Party’s existing Environmental Permits. This is intended by the Parties to be an interim, temporary measure.

 

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6.2 Transfer of Environmental Permits .

(a) Subject to Section 6.2(b), as soon as practicable following the date hereof, Western shall promptly file all applications needed for, and cooperate to arrange, the transfer of all Environmental Permits for the Assets which have not been transferred on or prior to the date hereof to the Partnership or its applicable Subsidiaries.

(b) On the earlier of (i) the date when Western no longer reasonably believes, in good faith, that the administrative burdens associated with the transfer of permits for El Paso Refinery Assets would interfere with the orderly issuance of Environmental Permits to authorize construction of Western’s crude expansion project at the El Paso Refinery, (ii) the date on which the Environmental Permits necessary for the El Paso Refinery crude oil expansion project are approved and (iii) October 16, 2014, Western shall promptly file all applications needed for, and cooperate to arrange, the transfer of all Environmental Permits for the El Paso Refinery Assets to the Partnership or its applicable Subsidiaries.

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 Texas, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federal courts in the State of Texas and to venue in Houston, Texas.

7.2 Notice . All notices or requests or consents provided for by, or permitted to be given pursuant to, this Agreement must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by delivering such notice in person or by facsimile to such Party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by facsimile shall be effective upon actual receipt if received during the recipient’s normal business hours or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below such Party’s signature to this Agreement or at such other address as such Party may stipulate to the other Parties in the manner provided in this Section 7.2.

If to the Western Parties (including any ROFO Asset Owner):

Western Refining, Inc. (or applicable subsidiary)

123 W. Mills Ave

El Paso, Texas 79901

Attn: President – Refining and Marketing

Facsimile: 602-683-5736

With a copy to:

Western Refining, Inc. (or applicable subsidiary)

123 W. Mills Ave

El Paso, Texas 79901

Attn: Office of the General Counsel

Facsimile: 602-797-2650

 

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If to the Partnership Group:

Western Refining Logistics, LP

c/o Western Refining Logistics GP, LLC, its General Partner

123 W. Mills Ave

El Paso, Texas 79901

Attn: Senior Vice President – Operations

Facsimile: 602-683-5737

With a copy to:

Western Refining Logistics, LP

c/o Western Refining Logistics GP, LLC, its General Partner

123 W. Mills Ave

El Paso, Texas 79901

Attn: Office of the General Counsel

Facsimile: 602-797-2650

7.3 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.

7.4 Termination of Agreement . This Agreement, other than the provisions set forth in Article II hereof, may be terminated by Western or the Partnership upon a Partnership Change of Control. For the avoidance of doubt, the Parties’ indemnification obligations under Article II shall survive the termination of this Agreement in accordance with their respective terms.

7.5 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.

7.6 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 working capital financing for the Partnership.

7.7 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.

 

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7.8 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.

7.9 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.

7.10 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 executed this Agreement on, and effective as of, the Closing Date.

 

WESTERN REFINING, INC.
By:  

/s/ Jeff A. Stevens

Name:   Jeff A. Stevens
Title:   President and Chief Executive Officer
WESTERN REFINING LOGISTICS, LP
By:   Western Refining Logistics GP, LLC, its general partner
By:  

/s/ Mark J. Smith

Name:   Mark J. Smith
Title:   President – Refining and Marketing
WESTERN REFINING LOGISTICS GP, LLC
By:  

/s/ Mark J. Smith

Name:   Mark J. Smith
Title:   President – Refining and Marketing
SOLELY FOR PURPOSES OF ARTICLES IV AND VII HEREOF:
WESTERN REFINING SOUTHWEST, INC.
By:  

/s/ Gary R. Dalke

Name:   Gary R. Dalke
Title:   Chief Financial Officer
WESTERN REFINING COMPANY, L.P.
By:   Western Refining GP, LLC, its general partner
By:  

/s/ Jeffrey S. Beyersdorfer

Name:   Jeffrey S. Beyersdorfer
Title:   Senior Vice President, Treasurer, Assistant Secretary
WESTERN REFINING WHOLESALE, INC.
By:  

/s/ William R. Jewell

Name:   William R. Jewell
Title:   Chief Accounting Officer

[Signature Page to Omnibus Agreement]


Schedule I

Known Environmental Matters

None.


Schedule II

Pending Litigation

None.


Schedule III

General and Administrative Services

(1) Executive management services of Western employees who devote a portion of their business time to the business and affairs of the Partnership

(2) Financial and administrative services (including, but not limited to, financial and regulatory reporting, treasury and accounting)

(3) Information technology services

(4) Legal and compliance services

(5) Health, safety and environmental services

(6) Human resources services

(7) Insurance coverage under Western insurance policies

(8) Tax Services

(9) Procurement services

(10) Investor Relations; Government & Public affairs services

(11) Analytical & engineering services

(12) Business Development Services


Schedule IV

Existing ROFO Assets

 

Asset

  

Owner

TexNew Mex 16” Pipeline (Four Corners area, New Mexico) . A portion of Western’s 16-inch crude oil pipeline that is approximately 43 miles in length and connects the Partnership’s Bisti crude oil station to its Star Lake, New Mexico crude oil station.    WRSW
Jal NGL Terminal (Lea County, New Mexico) . A terminal that receives, stores, and ships various light hydrocarbon products or natural gas liquids (“NGLs”) via truck, rail, and pipeline. On an annual average basis, Western uses approximately 25% of this terminal’s throughput capacity primarily to receive and store butanes in support of its El Paso Refinery. Primary storage at the Jal NGL Terminal consists of four large NGL storage caverns, with combined storage capacity of approximately 562,000 barrels, that are connected to the Enterprise Products Partners L.P. (“Enterprise”) MAPL system connecting NGL hubs at Conway, Kansas and Mt. Belvieu, Texas. Brine ponds are available on site to support product movement in and out of the storage caverns. The terminal also includes 17 storage tanks with a combined shell storage capacity of approximately 15,000 barrels, and loading and unloading capacity of up to 6,000 bpd, utilizing either a three-bay truck rack or a rail loading facility located on the Texas-New Mexico Railroad that has 16 loading spots.    WRCLP
Crude Oil and Refined Products Trucking Fleet (Texas, New Mexico, Arizona, Colorado, Utah and California) . A fleet of approximately 190 crude oil and refined product truck transports. Twenty-nine crude truck transports in the Four Corners area gather approximately 9,100 bpd of crude oil. In addition, Western has a fleet of 156 refined product truck transports that operate in Texas, New Mexico, Arizona, Colorado, Utah, and California.    Wholesale


Asset

  

Owner

Wholesale Fuel/Jobber/Lube Facilities (Texas, New Mexico, Arizona, Colorado, Nevada, and California) . Wholesale operations that market and distribute approximately 73,900 bpd of Western’s refinery production. Western’s lubricant marketing, distribution and warehousing operations handle approximately one million gallons per month. Western’s wholesale operations distribute refined products and lubricants in Arizona, California, Colorado, Nevada, New Mexico, and Texas.    Wholesale


Schedule V

Trademarks, Tradenames & Patents

None.

Exhibit 10.4

 

 

 

OPERATIONAL SERVICES AGREEMENT

by and among

WESTERN REFINING SOUTHWEST, INC.,

WESTERN REFINING COMPANY, L.P.

and

WESTERN REFINING LOGISTICS, LP

 

 

 


TABLE OF CONTENTS

 

         Page  

Article I

 

Defined Terms

     2   

Article II

 

Responsibilities of the Western Parties

     7   

Article III

 

Financial Accounting and Billing Practices

     10   

Article IV

 

Safety

     13   

Article V

 

Relationship of the Parties

     13   

Article VI

 

Liability Standard and Indemnification

     13   

Article VII

 

Insurance

     15   

Article VIII

 

Term and Termination

     15   

Article X

 

Force Majeure

     17   

Article XI

 

Notices

     17   

Article XII

 

Applicable Law

     18   

Article XIII

 

Confidentiality

     18   

Article XIV

 

Disputes Between the Parties

     19   

Article XV

 

Assignability

     19   

Article XVI

 

Compliance with Laws

     19   

Article XVII

 

Severability

     20   

Article XVIII

 

Non-Waiver

     20   

Article XIX

 

Entire Agreement; Amendments

     20   

Article XX

 

Survival

     20   

Article XXI

 

Counterparts; Multiple Originals

     20   

Article XXII

 

Construction

     21   

Article XXIII

 

Article Headings; Exhibits

     21   

 

Exhibits

    
A   

Description of Pipelines and Terminals

B   

Operating Services

C   

Maintenance Services

D   

Administrative Services

E   

Construction Services

F   

Accounting Procedures

G   

Dispute Resolution Procedures


OPERATIONAL SERVICES AGREEMENT

This OPERATIONAL SERVICES AGREEMENT is made and entered into as of the 16 th day of October, 2013, by and between WESTERN REFINING LOGISTICS, LP , a Delaware limited partnership (“Partnership”), WESTERN REFINING SOUTHWEST, INC. , an Arizona corporation (“WRSW”) and WESTERN REFINING COMPANY, L.P. , a Delaware limited partnership (“WRCLP” and, together with WRSW, the “Western Parties”).

W I T N E S S E T H:

WHEREAS , the Partnership Group (as defined below) owns various pipeline and gathering assets and terminalling, transportation and storage assets; and

WHEREAS , certain Partnership Group Members (as defined below) have agreed to provide pipeline and gathering services and terminalling, transportation and storage services to the Western Parties pursuant to the terms of a Pipeline and Gathering Services Agreement, by and among WRCP, WRSW and WNRL Pipeline (as defined below) (the “Pipeline and Gathering Services Agreement”) and a Terminalling, Transportation and Storage Services Agreement, by and among WRCP, WRSW and WNRL Terminals (as defined below) (the “Terminalling, Transportation and Storage Services Agreement”) each entered into on the date hereof;

WHEREAS , the Western Parties have experience and expertise in the maintenance and operation of pipeline and gathering assets and terminalling, transportation and storage assets and can provide or make available to the Partnership Group the personnel, technology, and other resources necessary to maintain and operate such pipeline and gathering assets and terminalling, transportation and storage assets on behalf of the Partnership Group; and

WHEREAS , Partnership and the Western Parties desire that the Western Parties provide and make available to the Partnership Group the personnel, technology, and other resources necessary to maintain and operate such pipeline and gathering assets and terminalling, transportation and storage assets on behalf of the Partnership Group;

NOW , THEREFORE , for and in consideration of the foregoing, the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Partnership and the Western Parties, the Partnership and the Western Parties agree as follows:

Article I

Defined Terms

Section 1.01 Defined Terms . The following definitions shall for all purposes, unless clearly indicated to the contrary, apply to the capitalized terms used in this Operational Services Agreement:

(a) “Accounting Procedures” has the meaning set forth in Section 3.01 hereof and Exhibit F hereto.


(b) “Administrative Services” has the meaning set forth in Section 2.01(c) hereof.

(c) “Affiliate” means with respect to any Person: (i) any other Person which beneficially owns, directly or indirectly, fifty percent (50%) or more of such Person’s stock or fifty percent (50%) or more of the ownership interest entitled to vote in such Person, or (ii) any other Person as to which fifty percent (50%) or more of the voting stock or fifty percent (50%) or more of the ownership interest entitled to vote therein, is beneficially owned, directly or indirectly, either by such Person or by an affiliate of such Person as defined in (i) above. For the purposes of this Agreement, no Partnership Group Member, on the one hand, and any Western Party, on the other hand, are considered Affiliates.

(d) “Agreement” means this Operational Services Agreement, together with all exhibits attached hereto, as the same may be amended, supplemented or restated from time to time in accordance with the provisions hereof.

(e) “Bankruptcy” means, with respect to any Person, that: (i) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar applicable Law, or has any such petition filed or commenced against it which is not withdrawn or dismissed within thirty (30) Days, (ii) makes an assignment or any general arrangement for the benefit of creditors, (iii) otherwise becomes bankrupt or insolvent (however evidenced) or (iv) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets which is not withdrawn or dismissed within thirty (30) Days.

(f) “Business Day” means any Day except for Saturday, Sunday or a legal holiday in the State of Texas.

(g) “Category of Expenditure” means each of the types of capital and expense expenditures, or combinations thereof, for the Services set forth in Section 2.01 hereof and in accordance with the Accounting Procedures set forth in Exhibit F.

(h) “Partnership Change of Control” means Western Refining Inc. ceases to Control the general partner of the Partnership.

(i) “Claim” means any and all judgments, claims, causes of action, demands, lawsuits, suits, proceedings, governmental investigations or audits, losses, assessments, fines, penalties, administrative orders, obligations, costs, expenses, liabilities and damages (whether actual or consequential), including interest, penalties, reasonable attorneys’ fees, disbursements and costs of investigations, deficiencies, levies, duties and imposts.

(j) “Claim Notice” has the meaning set forth in Section 6.05 hereof

(k) “Construction Services” has the meaning set forth in Section 2.01(d) hereof.

 

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(l) “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

(m) “Day” means the period of time commencing at 00:00 hours on one calendar day and running until, but not including, 00:00 hours on the next calendar day, according to El Paso, Texas, local time.

(n) “Dispute Resolution Procedures” has the meaning set forth in Section 13.01 hereof.

(o) “DOT” means the United States Department of Transportation.

(p) “Effective Date” means the date of the closing of the initial public offering of common units representing limited partner interests in Western Refining Logistics, LP.

(q) “Extension Period” has the meaning set forth in Section 8.01 hereof.

(r) “FERC” means the Federal Energy Regulatory Commission.

(s) “Force Majeure” has the meaning set forth in Section 9.02 hereof.

(t) “GAAP” means United States generally accepted accounting principles.

(u) “Indemnified Parties” has the meaning set forth in Section 6.03(b) hereof.

(v) “Initial Term” has the meaning set forth in Section 8.01 hereof.

(w) “Law” means any applicable constitutional provision, statute, act, code, law, regulation ordinance, rule, ordinance, order, decree, ruling, proclamation, resolution, judgment, decision or declaration.

(x) “Liability Claim” means any Claim against any Western Party or the Partnership made by an unaffiliated person.

(y) “Maintenance Services” has the meaning set forth in Section 2.01(a) hereof

(z) “Material Default” means: (i) the failure of a Party to pay the other Party any material amount of money payable by that Party, except a failure related to a bona fide business dispute about the amount of such payment or the liability for such payment, not accompanied by a general failure by that Party to pay the amounts it owes under this Agreement, (ii) the general, continuing failure of a Party to perform its material obligations under this Agreement, except when excused by Force Majeure or by some other provision of this Agreement, and except a failure related to a bona fide dispute about any obligation, or (iii) with respect to the Partnership, its failure to approve any budgetary expense or capital project involving any pipeline integrity, compliance or regulatory issue that the Western Parties, in their reasonable judgment, deems necessary or required by any Law.

 

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(aa) “Month” or “Monthly” means a calendar month commencing at 0000 hours on the first Day thereof and running until, but not including, 0000 hours on the first Day of the following calendar month, according to El Paso, Texas, local time.

(bb) “Normal Business Hours” means the period of time commencing at 0800 hours on one Day and running until 1700 hours on the same Day, according to El Paso, Texas, local time.

(cc) “Notice” means any notice, request, instruction, correspondence or other communication permitted or required to be given under this Agreement in accordance with Article X hereof, or received from a Person who is not a Party.

(dd) “Omnibus Agreement” shall mean the Omnibus Agreement by and among Western Refining Inc., the Partnership, Western Refining Logistics GP, LLC, WRSW, WRCLP and Western Refining Wholesale, Inc.

(ee) “Operating Services” has the meaning set forth in Section 2.01(b) hereof.

(ff) “Overrun” has the meaning set forth in Section 3.03(b) hereof.

(gg) “Parties” means the Partnership and the Western Parties, collectively.

(hh) “Partnership” has the meaning set forth in the introductory paragraph hereof.

(ii) “Partnership Group” shall mean the Partnership and its Subsidiaries, which, as of the date of this Agreement, are WNRL Terminals and WNRL Pipeline.

(jj) “Partnership Group Member” means any member of the Partnership Group.

(kk) “Partnership Indemnified Parties” has the meaning set forth in Section 6.03(b) hereof.

(ll) “Party” means the Partnership or any Western Party, individually.

(mm) “Period of Secondment” has the meaning set forth in Section 2.03(b) hereof.

(nn) “Person” means, without limitation, an individual, corporation (including a non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or governmental body, and shall include any successor (by merger or otherwise) of such entity.

(oo) “Pipelines” means the crude oil pipelines, refined petroleum products pipelines, gathering assets and related facilities identified in Exhibit A hereto, and any other crude oil pipelines, natural gas pipelines, natural gas liquid pipelines, liquefied petroleum gas pipelines and refined petroleum products pipelines and related facilities that the Western Parties agree to operate on behalf of the Partnership upon reasonable request by the Partnership.

 

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(pp) “Recovery Claim” means any liability or claim which the Partnership has against one or more Persons.

(qq) “Seconded Employees” has the meaning set forth in Section 2.03(b) hereof.

(rr) “Service Provider”, with respect to any Service, means the Western Party providing such Service.

(ss) “Services” means the Maintenance Services, Operating Services, Administrative Services, Construction Services, and the other services included in Section 2.01 hereof, collectively.

(tt) “Subsidiary” means, with respect to any Person, any other Person as to which fifty percent (50%) or more of the voting stock or fifty percent (50%) or more of the ownership interest entitled to vote therein, is beneficially owned, directly or indirectly, with respect to such Person.

(uu) “Terminals” means the terminals and related facilities and other storage facilities and tank farms identified in Exhibit A hereto, and any other terminals and related facilities or other storage facilities or tank farms that the Western Parties agree to operate on behalf of the Partnership upon reasonable request by the Partnership.

(vv) “Western Indemnified Parties” has the meaning set forth in Section 6.03(a) hereof.

(ww) “Western Parties” has the meaning set forth in the introduction hereof.

(xx) “WNRL Pipeline” means Western Refining Pipeline, LLC, a Delaware limited liability company.

(yy) “WNRL Terminals” means Western Refining Terminals, LLC, a Delaware limited liability company.

(zz) “WRCLP” has the meaning set forth in the introduction hereof.

(aaa) “WRSW” has the meaning set forth in the introduction hereof.

(bbb) “Year” means a period of three hundred sixty five (365) consecutive Days, commencing on the date hereof, and it shall also include each successive three hundred sixty five (365) Day period; provided, however, that any Year which contains a date of February 29 shall consist of three hundred sixty six (366) Days.

Section 1.02 Terms Generally . The definitions in Section 1.01 shall apply equally to both singular and plural forms of the terms defined. Whenever the context may require, any

 

6


pronoun shall include the corresponding masculine, feminine and neuter forms. The word “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” All references herein to Articles, Sections and exhibits shall be deemed references to Articles and Sections of, and exhibits to, this Agreement unless the context shall otherwise require. Unless the context shall otherwise require, any reference to any federal, state or local statute, act, code or law shall be deemed also to refer to all rules, regulations and directives promulgated thereunder (and to any successor provision).

Article II

Responsibilities of the Western Parties

Section 2.01 Services to be Provided by the Western Parties . During the term of this Agreement, and subject to the terms and conditions hereof, the Western Parties shall be obligated to provide and make available to the Partnership Group the personnel, technology, and other resources necessary to perform and provide, or cause to be performed and provided, the following Services on behalf of the Partnership Group:

(a) Such services as may be required by the Partnership Group for the day-to-day operation of the Pipelines and Terminals. The Western Parties’ obligations to operate the Pipelines and Terminals shall include the obligation to perform and provide such operating services and activities as are described in Exhibit B (the “Operating Services”).

(b) Such services as may be required by the Partnership Group for the day-to-day routine and emergency maintenance and repair of the Pipelines and Terminals. The Western Parties’ obligation to maintain and repair the Pipelines and Terminals shall include the obligation to perform and provide such maintenance, repair and related services and activities as are described in Exhibit C (the “Maintenance Services”).

(c) Such administrative services as may be required by the Partnership Group in order for it to own the Pipelines and Terminals and conduct its day-to day business and affairs with respect to such Pipelines and Terminals, but excluding any Services (as defined in the Omnibus Agreement) provided to the Partnership Group under the Omnibus Agreement. The Western Parties’ obligation to provide administrative services shall include the obligation to perform and provide such administrative services as are described in Exhibit D (the “Administrative Services”).

(d) Such construction and related services as may be required by the Partnership Group from time to time in connection with the Pipelines and Terminals, consisting of the services described in Exhibit E (the “Construction Services”).

(e) Such other services related to the Pipelines and Terminals as the Parties may agree upon in writing from time to time.

Section 2.02 Manner of Performing/Providing Services . The Services to be performed and provided by the personnel made available pursuant to Section 2.03 by the Western Parties hereunder shall be performed and provided in an efficient and prudent manner with the same degree of diligence and care that the Western Parties would exercise if operating their own property and in all respects in accordance with all applicable Laws relating to the Western

 

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Parties, the Partnership and the Pipelines and Terminals, and the Partnership Group’s ownership and operation thereof. The personnel made available by the Western Parties shall operate the Pipelines and Terminals in a safe, professional and economical manner and, in a timely fashion, shall advise the Partnership of all matters of significance that could affect the safety or economics relating to their operation so that the Partnership can make appropriate decisions with respect thereto. The personnel made available by the Western Parties shall provide such Services in accordance with and subject to the terms of the budget that is submitted by it to and approved by the Partnership pursuant to Section 3.03 hereof.

Section 2.03 Personnel and Secondment.

(a) The Western Parties shall provide, or cause to be provided, to the Partnership the Seconded Employees (as defined in Section 2.03(b) below) and such other Persons (including consultants and professionals, service or other organizations)) as the Western Parties deem necessary or appropriate in order to permit the Western Parties to perform their duties and responsibilities hereunder in an efficient and prudent manner. Subject to the Western Parties’ right to be reimbursed for such expenses in accordance with the Accounting Procedures (as defined in Section 3.01), each Western Party shall pay all expenses incurred by it in connection with the retention of the Seconded Employees and such other Persons, including, but not limited to, compensation, salaries, wages and overhead and administrative expenses, charges to or incurred by such Western 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 Western Party may be union or non-union employees, and the Western Parties shall have the sole right to negotiate the terms and provisions of any labor or other agreements with the unions to which such employees belong. The Western Parties shall provide, or cause to be provided, all workers who will perform Services.

(b) During the term of this Agreement, the Western Parties shall, from time to time, designate certain of their employees to be seconded to the Partnership to perform duties at the Partnership’s assets or facilities or otherwise work on behalf of the Partnership in accordance with and subject to the terms of this Agreement. Each such employee who the Western Parties second to the Partnership shall, during the time that such employee is seconded to the Partnership under this Agreement (the “Period of Secondment”), be referred to individually herein as a “Seconded Employee” and, collectively, as the “Seconded Employees.” The Western Parties shall maintain a true, complete and accurate list of the Seconded Employees (the “Seconded Employee Schedule”). Seconded Employees may be added to or removed from the Seconded Employee Schedule from time to time by the Western Parties.

(c) The Seconded Employees will remain at all times employees of the Western Parties, but, in addition, during the Period of Secondment they will also be joint employees of the Partnership. For the avoidance of doubt, the Parties acknowledge that the Seconded Employees will, during the Period of Secondment, be called upon to perform services for both the Partnership and the Western Parties. The Western Parties retain the right to terminate the secondment of any Seconded Employee for any reason at any time or to hire or discharge the Seconded Employees with respect to their employment with the Western Parties. The Partnership will have the right to terminate the secondment to it of any Seconded Employee

 

8


for any reason at any time, upon prior written notice to the Western Parties, but at no time will the Partnership have the right to terminate any Seconded Employee’s employment by the Western Parties. Upon the termination of the secondment of any Seconded Employee, such Seconded Employee will cease performing services for the Partnership.

(d) In the course and scope of performing any Seconded Employee’s job functions for the Partnership, the Seconded Employee will report into the Partnership’s management structure, and will be under the direct management, supervision, direction and control of the Partnership with respect to such Seconded Employee’s day-to-day activities.

(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 Partnership assets or facilities or to provide management support on behalf of the Partnership are designated by the Partnership as supervisors to act on the behalf of the Partnership in supervising the Seconded Employees pursuant to Section 2.03(d) above. Any Seconded Employee so designated will be acting on the behalf of the Partnership when supervising the work of the Seconded Employees or when they are otherwise providing management or executive support on behalf of the Partnership.

(f) With respect to the Partnership Group operations in Texas, Service Provider shall obtain workers’ compensation coverage as defined by Texas Labor Code Section 401.011(44) on behalf of both the Western Parties and the Partnership, and the Partnership shall be considered an employer solely for the purposes of Texas Labor Code Section 401.011(18) and Section 408.001. With respect to the Partnership Group operations performed in any jurisdiction other than Texas, the Western Parties shall obtain workers’ compensation coverage as defined and required by Law on behalf of both the Western Parties and such Partnership Group Member, provided that such Partnership Group Member shall be considered an employer solely for the purposes of its status as a dual, joint- or co-employer under the relevant workers’ compensation regime.

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

Section 2.04 Use of Affiliates . In its performance of the Services hereunder, the Western Parties may, but shall not be obligated to, use the services of their or their Affiliates’ accounting, construction, purchasing, engineering, legal, planning, budgeting, operating, regulatory, and other departments.

Section 2.05 Contracts . Subject to the Agreement of Limited Partnership, as amended and restated from time to time, of the Partnership (the “Partnership Agreement”), each Western Party is authorized to execute, in its name and for the benefit of the Partnership Group, such contracts as may be necessary for such Western Party to carry out its responsibilities under this Agreement; provided , however , that no Western Party shall execute any contract in excess of Five Million Dollars ($5,000,000.00) or that covers a period longer than the term of this Agreement, unless such Western Party obtains the Partnership’s prior written approval.

 

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Section 2.06 Claims .

(a) Any Liability Claim or Recovery Claim, to the extent relating to the operation or maintenance of the Pipelines and Terminals, shall be defended, prosecuted or settled by the Western Parties, subject to the ultimate direction and control of the Partnership.

(b) The costs of handling a Liability Claim or a Recovery Claim, including reasonable costs of legal counsel, together with the amount of any settlement of or judgment rendered on a Liability Claim, including court costs, shall be paid by the Western Parties and shall be reimbursed by the Partnership. Any net amounts received by the Western Parties in settlement of a Recovery Claim or in payment of a judgment on a Recovery Claim shall be paid over to the Partnership.

(c) The Western Parties shall promptly notify the Partnership whenever any Western Party receives actual Notice of any claim against any member of the Partnership Group or any Western Party (in its capacity as Service Provider).

(d) Before making any settlement of any Liability Claim and before filing any lawsuit or making any settlement with respect to any Recovery Claim, the applicable Western Party shall give to the Partnership written Notice of the fact that it desires to file such suit or make such settlement (as the case may be), which Notice shall set forth the nature of the claim and the amount for which such Western Party proposes to sue or settle, and such Western Party shall not file any such suit nor make any such settlement without the approval of the Partnership, it being understood that the applicable Western Party shall have no obligation to disclose any information protected by legal privilege in such Notice.

Section 2.07 The Partnership Property . All property, equipment and material acquired solely on behalf of the Partnership Group by the Western Parties hereunder shall be deemed to be owned by the Partnership Group.

Article III

Financial Accounting and Billing Practices

Section 3.01 Accounting . Each Western Party shall keep a full and complete account of all costs and expenses incurred by it in connection with the performance and provision of the Services hereunder in the manner set forth in Exhibit F hereto (the “Accounting Procedures”).

Section 3.02 Compensation . Each Western Party shall be fully reimbursed by the Partnership for all necessary and reasonable costs, expenses and expenditures incurred by such Western Party on behalf of the Partnership in connection with the provision of the Services at the rates and in the manner set forth in the Accounting Procedures.

 

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Section 3.03 Budgets .

(a) By November 1st of each year, the Western Parties shall prepare and submit to the Partnership for approval a detailed maintenance, operating, and capital budget setting out the amounts the Western Parties propose to expend for such purposes during the next calendar Year, which budget shall, to the extent practicable, provide for a breakdown of expenses and expenditures on a Monthly basis, by Category of Expenditure and by asset as defined by the Western Parties. Upon the Partnership approval of such budget, the Western Parties shall have the authority to award and execute contracts within the expenditure limits set forth in such budget. When expense and capital appropriation requests are not required (such as with annual maintenance contracts), the Western Parties shall have the authority to award and execute such contracts without the additional approval of the Partnership, subject to Section 2.05 of this Agreement.

(b) If it appears at any time after the Western Parties receive a budget approved by the Partnership that the total actual expenditures for any calendar Year will exceed the total annual budgeted amount for such calendar Year, the Western Parties shall notify the Partnership of such expected excess expenditure as part of the normal Monthly billing process. If it subsequently appears that the total actual expenditures for any calendar Year will equal or exceed one hundred and ten percent (110%) of the total annual budgeted amount (“Overrun”), the Western Parties shall submit to the Partnership for approval an amendment to the then-applicable budget, together with an explanation of the reason(s) for the anticipated budget Overrun. As soon as practicable following the last Day of each Month, the Western Parties shall submit to the Partnership a Monthly report comparing actual expenditures for such Month to budgeted operating expenses and capital projects for such Month.

(c) The Partnership shall notify the Western Parties in writing of the approval or disapproval of any proposed budget or amendment thereto in writing within fifteen (15) Days after receipt thereof. In the event the Partnership does not so notify the Western Parties within such time period, or if the Partnership notifies the Western Parties that such budget or amendment has been disapproved, then until the Western Parties receive approval of a proposed budget or amendment: (i) the current approved budget shall remain in effect, and (ii) the Western Parties shall continue to have the authority to make expenditures with regard to items previously approved by the Partnership. If any such proposed budget or amendment is disapproved, the Western Parties shall submit a revised proposed budget or amendment to the Partnership for approval as soon as is reasonably practicable.

(d) The Western Parties shall meet with the Partnership a minimum of four (4) times during each calendar Year, upon request of the Partnership, or more if the Partnership reasonably requests, in order to review the budget and permit the Partnership to monitor the accuracy of the budget for current Year operations.

(e) The Parties agree that the maintenance, operating and capital budget for the remainder of 2013 shall be as presented by the Partnership to the Western Parties no later than the Effective Date.

 

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(f) Except as the Partnership may otherwise direct in writing, the approval by the Partnership of a budget or an amendment to a budget shall constitute the Partnership’s authorization of the Western Parties to incur the expenses contained in such budget or amendment.

Section 3.04 Safety, Environmental and Emergency Expenditures . Notwithstanding any other provision in this Agreement, the Western Parties may incur (and be reimbursed for) any expenditures or take any other actions as any Western Party in its reasonable judgment deems to be immediately necessary: (i) to protect the health and safety of Persons from immediate and present harm; (ii) to safeguard lives or property in connection with the initial response to any emergencies affecting the Pipelines and Terminals; (iii) to protect the environment from immediate and present harm; and (iv) proceed with maintenance or repair work necessary to keep the Pipelines and Terminals operating, or to restore the Pipelines and Terminals to operating conditions; however, it is also understood that every reasonable effort will be made by the Western Parties to notify the Partnership at the earliest possible convenience of such emergencies and expenditures involving same.

Section 3.05 Billing Practices . The Partnership shall pay and the Western Parties shall receive as full and complete compensation for the performance of the Services hereunder, the sum of the amounts becoming due as described in the Accounting Procedures. For Services provided by the Western Parties in any Month, payment by the Partnership shall be made no later than the 21st Day of the immediately following Month, provided that if such Day is not a Business Day, then the Partnership shall pay such amount without interest on the next Business Day. As long as the Western Parties are Affiliates of the Partnership, the Western Parties and the Partnership may settle the Partnership’s financial obligations to the Western Parties through the Western Parties’ normal intercompany settlement processes.

Section 3.06 Records and Audit Rights . The Western Parties shall maintain a true and correct set of records pertaining to all activities relating to their respective performance hereunder and all transactions related thereto. The Western Parties further agree to retain all such records for a period of time not less than two (2) Years following the end of the calendar Year in which the applicable Services were performed. The Partnership, or its authorized representative or representatives, shall have the right during any Western Party’s Normal Business Hours to audit, copy and inspect, at the Partnership’s sole cost and expense, any and all records of such Western Party relating to its performance of its obligations hereunder (but not any other books and records of such Western Party). Audits shall not be commenced more than once by the Partnership during each calendar Year and shall be completed within a reasonable time frame not to exceed thirty (30) Days. The Partnership may request information from the Western Parties’ books and records relating to the Western Parties’ obligations hereunder from time to time and such requests shall not constitute an audit for that calendar Year. The Partnership shall have two (2) Years after the end of a calendar Year during which to conduct an audit of any Western Party’s books and records for such calendar Year, and any Claim arising out of or based in whole or in part on the information produced or obtained by the performance of any such audit must be made, if at all, within such two (2) Year period.

 

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Article IV

Safety

Section 4.01 Safety Requirements . The Parties agree that the Western Parties will abide by, at a minimum, the safety requirements promulgated by the Western Parties from time to time with respect to the Pipelines and Terminals and in compliance with applicable Laws.

Article V

Relationship of the Parties

Section 5.01 General Principles Regarding Relationship of the Parties . The Parties agree that each Western Party shall provide the applicable Services to the Partnership Group as an independent contractor and not as an agent or representative of any member of the Partnership Group. This Agreement is not intended to and shall not create or otherwise form a partnership or joint venture between the Western Parties and the Partnership.

Section 5.02 Standard of Operational Control . The Parties agree that the Services shall be performed on behalf of and under the absolute direction and control of the Partnership. The Partnership shall have the right to monitor, consult with and give operational instructions to the Western Parties. The Western Parties shall not unreasonably refuse service requests or operational instructions of the Partnership.

Article VI

Liability Standard and Indemnification

Section 6.01 Liability Standard-Western Party to Partnership . Other than as set forth in Section 6.03 the Western Parties shall only be liable to the Partnership Group for gross negligence or willful misconduct in the performance of its obligations hereunder, AND NO WESTERN PARTY NOR ANY OF ITS AFFILIATES, AGENTS OR THEIR RESPECTIVE DIRECTORS, STOCKHOLDERS, OFFICERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES, SUCCESSORS, TRANSFEREES AND ASSIGNEES SHALL BE LIABLE TO THE PARTNERSHIP OR PERSONS WHO HAVE ACQUIRED INTERESTS IN THE PARTNERSHIP, WHETHER AS PARTNERS, ASSIGNEES OR OTHERWISE, FOR ERRORS IN JUDGMENT OR FOR ANY ACTS OR OMISSIONS THAT DO NOT CONSTITUTE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT .

Section 6.02 Responsibility for Affiliates and Agents . The Western Parties may exercise any of the powers granted to them by this Agreement and perform any of the duties imposed upon them hereunder either directly or by or through their respective Affiliates or agents, and the Western Parties shall not be responsible for any misconduct or negligence on the part of any such Affiliate or agent appointed by any Western Party with due care.

Section 6.03 Indemnification; Liability Claims .

(a) Notwithstanding anything else contained in this Agreement, the Partnership shall release, defend, protect, indemnify, and hold harmless each Western Party and every affiliate as such Western Party shall appoint to perform services hereunder and its and their

 

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respective directors, stockholders, officers, members, partners, employees, agents, consultants, representatives, successors, transferees and assigns (collectively, the “Western Indemnified Parties”) from and against any and all Liability Claims which are caused by or result in whole or in part from the performance or provision of any of the Services or the failure of the Partnership to perform any of its obligations under this Agreement; PROVIDED THAT THE PARTNERSHIP SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS ANY WESTERN INDEMNIFIED PARTY FROM AND AGAINST ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY WESTERN INDEMNIFIED PARTY.

(b) Notwithstanding anything else contained in this Agreement, the Western Parties shall, jointly and severally, release, defend, protect, indemnify, and hold harmless each Partnership Group Member and their respective directors, stockholders, officers, members, partners, employees, agents, consultants, representatives, successor, transferees and assigns (collectively, the “Partnership Indemnified Parties” and, together with the Western Indemnified Parties, the “Indemnified Parties”) from and against any and all Liability Claims which are caused by or result in whole or in part from the failure of the Western Parties to perform any of their obligations hereunder; PROVIDED THAT THE WESTERN PARTIES SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS THE PARTNERSHIP GROUP FROM AND AGAINST ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY PARTNERSHIP INDEMNIFIED PARTY.

Section 6.04 Consequential Damages . Notwithstanding anything herein to the contrary, neither Party shall be liable to the other Party for consequential, incidental or punitive damages, or for loss of profits or revenues incurred by such Party or any of 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 that the foregoing limitation is not intended and shall not affect special damages imposed in favor of unaffiliated Persons that are not Parties to this Agreement. THE PARTIES AGREE THAT THE RESTRICTIONS AND LIMITATIONS ON DAMAGES CONTAINED HEREIN DO NOT DEPRIVE THE PARTIES OF MINIMUM ADEQUATE REMEDIES UNDER TEXAS UCC SECTION 2-719 OR OTHER APPLICABLE LAW.

Section 6.05 Notice of Claims . Promptly after any Indemnified Party becomes aware of facts giving rise to a Claim by it for indemnification pursuant to this Article, such Indemnified Party shall provide Notice to the Partnership or the Western Parties, as applicable (a “Claim Notice”) outlining such Claim and a copy of all papers served with respect thereto (if any). For purposes of this Section, receipt by an Indemnified Party of Notice of any Claim by or from any Person other than a Party to this Agreement which gives rise to a Claim on behalf of such Indemnified Party shall require prompt Notice from the Indemnified Party to the Partnership or the Western Parties, as applicable, of the receipt of such Notice as provided in the first sentence of this Section 6.05; provided , however , that the failure of any Indemnified Party to give timely Notice shall not affect its rights to indemnification hereunder except to the extent that the Partnership or the Western Parties, as applicable, is or are materially prejudiced thereby. Each Claim Notice shall set forth all information regarding the Claim as the Indemnified Party shall then have and shall contain a statement to the extent that the Indemnified Party giving the Notice is making a Claim pursuant to a formal demand for indemnification under this Article VI.

 

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Article VII

Insurance

Section 7.01 Insurance .

(a) The Western Parties shall at all times during the term of this Agreement procure and maintain workers’ compensation insurance or similar insurance, including all such insurance as may be required by all applicable state and federal workers’ compensation Laws and such other Laws as may be applicable to the Services performed under this Agreement. The Western Parties shall at all times during the term of this Agreement cause the Partnership and its subsidiaries each to be an additional named insured on such workers’ compensation or similar insurance policies. Each Western Party shall cause its workers’ compensation and employers liability insurers to waive their rights of subrogation against the Partnership Group.

(b) The Western Parties may elect to self-insure all or any part of the insurance requirements set forth in Section 7.01(a) above to the extent allowed by applicable Law. If the Western Parties elect to self-insure, then the Western Parties shall respond to any insurance claim, with regard to waiving rights of subrogation against the Partnership Group, in the same manner as a commercial market insurance policy that waived subrogation rights against the Partnership Group would have responded to such insurance claim.

Section 7.02 Cost Reimbursement . Insurance as required in Section 7.01 hereof shall be a reimbursable cost pursuant to the Accounting Procedures.

Section 7.03 Required Contractor Coverage . The Western Parties shall require all contractors and subcontractors employed by them in performing and/or providing Services hereunder to procure and maintain: (i) workers’ compensation insurance or similar insurance, including all such insurance as may be required by all applicable state and federal workers’ compensation Laws and such other Laws as may be applicable to the Services provided by such contractors and subcontractors; (ii) employers’ liability insurance; (iii) commercial general liability insurance; and (iv) any other insurance that may be necessary or advisable, in each case, in amounts and with such terms as are reasonable and consistent with industry practice or as may be specified in writing by the Partnership Group, in each case, to the extent applicable, in amounts equal to or greater than those set forth on Schedule 7.03 . Further, the Western Parties shall require such contractors and subcontractors to cause their workers’ compensation and employers’ liability insurance insurers to waive their rights of subrogation against the Partnership Group, and to name the Partnership Group as an additional insured under any commercial general liability and or other appropriate insurance policies carried by such contractors and subcontractors.

Article VIII

Term and Termination

Section 8.01 Term . Unless terminated in accordance with Section 8.02, Section 8.03 or Section 8.04 below, this Agreement shall have a ten (10) Year primary term, commencing on the

 

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date hereof (the “Initial Term”); provided, however, that the Initial Term may be extended for up to two (2) renewal terms of five (5) Years each (each, an “Extension Period”) upon the mutual agreement in writing of the Parties no less than ninety (90) Days prior to the end of the Initial Term or the then current Extension Period.

Section 8.02 Termination by the Partnership . The Partnership shall have the right to terminate this Agreement immediately upon the Bankruptcy of any Western Party; provided that the Partnership shall deliver to the Western Parties Notice of any such affirmative finding, which shall include a reasonably detailed description of the basis therefor. Any specific Service may be terminated by the Partnership upon thirty (30) days’ prior written notice to the Western Parties.

Section 8.03 Termination by the Western Parties . The Western Parties shall have the right to terminate this Agreement or any Services provided hereunder: (i) immediately upon the Bankruptcy of the Partnership or (ii) on six (6) Months prior Notice upon the occurrence of a Partnership Change of Control. Notwithstanding the foregoing, if the Partnership ceases to Control, directly or indirectly, any member of the Partnership Group, then the Western Parties shall have the right to terminate this Agreement with respect to any Services provided to such Partnership Group Member.

Section 8.04 Right of Termination by Either Party . Any Party may terminate this Agreement upon prior written Notice to the other Party if:

(a) the other Party is in Material Default of any of its obligations under this Agreement; and

(i) the non-defaulting Party gives prior written Notice of such Material Default to the defaulting Party, which Notice shall set forth in reasonable detail the facts and circumstances of such Material Default; and

(ii) the defaulting Party fails to cure the Material Default within twenty (20) Business Days from receipt by the defaulting Party of the written Notice; or

(b) each of the Pipeline and Gathering Services Agreement and the Terminalling, Transportation and Storage Services Agreement are terminated in accordance with their terms.

In addition, any Party may terminate any specific Services provided under this Agreement related to the Pipeline and Gathering Services Agreement or the Terminalling, Transportation and Storage Services Agreement, as applicable, in the event either such agreement is terminated in accordance with its terms.

Section 8.05 Effect of Termination . The termination of this Agreement shall not relieve either Party of its obligations to pay amounts of money due hereunder which accrued prior to such termination. Upon termination, the Western Parties shall promptly make available to the Partnership their books and records relating to the Pipelines and Terminals.

 

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Article IX

Force Majeure

Section 9.01 Force Majeure . If, because of an event of Force Majeure, either Party is rendered unable, wholly or in part, to carry out its obligations under this Agreement, other than the obligation to make money payments when due, and if such Party gives Notice and reasonably full particulars of such Force Majeure in writing to the other Party within a reasonable time after the occurrence of the cause relied upon, the Party giving such Notice, so far and to the extent that it is affected by such Force Majeure, shall not be liable in damages due to such Party’s failure to carry out its obligations under this Agreement; provided , however , that the cause of the event of Force Majeure shall be remedied with all reasonable dispatch.

Section 9.02 Meaning of “Force Majeure” . As used herein, the term “Force Majeure” shall mean circumstances not reasonably within the control of the Party providing Notice under Section 9.01 and which, by the exercise of due diligence, such Party is unable to prevent or overcome that prevent performance of such Party’s obligations, including: acts of God, strikes, lockouts or other industrial disturbances, wars, riots, fires, floods, storms, orders of courts or Governmental Authorities, explosions, terrorist acts, accidental disruption of service, breakage, breakdown of machinery, storage tanks or lines of pipe and inability to obtain or unavoidable delays in obtaining material or equipment and similar events.

Section 9.03 Strikes or Lockouts . It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the Party having the difficulty and that the requirement in Section 9.01 that any event of Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the demands of an opposing party when such course is inadvisable in the discretion of the Party having the difficulty.

Section 9.04 Performance by the Partnership or Third Parties . If, because of an event of Force Majeure, any Western Party is unable to perform the Services required of it hereunder, the Partnership may perform such Services itself or arrange for such Services to be performed by a third party, but only for the duration of such event of Force Majeure.

Article X

Notices

Section 10.01 Notices . Unless otherwise specifically provided herein, all Notices between the Parties given under or in relation to this Agreement shall be made in writing and shall be deemed to have been properly given if: (i) personally delivered; (ii) delivered and confirmed by telecopier or like transmission service; (iii) delivered by a reputable overnight courier delivery service; or (iv) sent by certified United States mail (postage prepaid, return receipt requested), addressed as follows:

 

If to the Partnership:    Western Refining Logistics, LP
   123 W. Mills Ave.
   El Paso, TX 79901
   Attn: General Counsel

 

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If to WRSW:    Western Refining Southwest, Inc.
   123 W. Mills Ave.
   El Paso, TX 79901
   Attn: General Counsel
If to WRCLP:    Western Refining Company, L.P.
   123 W. Mills Ave.
   El Paso, TX 79901
   Attn: General Counsel

Section 10.02 Effective Date . Any Notice given in the manner set forth in Section 10.01 shall be effective upon actual receipt if received during the recipient’s Normal Business Hours or at the beginning of the recipient’s next Business Day if not received during the recipient’s Normal Business Hours.

Section 10.03 Change of Address Notice . Either Party may change its Notice address by giving notice to the other Party in the manner set forth in Section 10.01; provided , however , that no change of address Notice shall be effective until actually received by the other Party.

Article XI

Applicable Law

Section 11.01 Applicable Law . REGARDLESS OF THE PLACE OF CONTRACTING, PLACE(S) OF PERFORMANCE, OR OTHERWISE, THE PROVISIONS OF THIS AGREEMENT AND ALL AMENDMENTS, MODIFICATIONS, ALTERATIONS OR SUPPLEMENTS HERETO SHALL BE GOVERNED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OR ANY OTHER PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR INTERPRETATION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION.

Article XII

Confidentiality

Section 12.01 Confidentiality . During the performance of this Agreement, each Party acknowledges that it will receive confidential business and technical information from or regarding the other Party. All information disclosed between the Parties will be deemed confidential, unless expressly designated otherwise at the time of disclosure. The receiving Party agrees not to disclose to any third Person, except as permitted herein, any confidential information it receives from the disclosing Party. The receiving Party agrees that it will not use the confidential information for any purpose other than the performance of this Agreement. The receiving Party may disclose confidential information: (i) when compelled by Law (but the

 

18


receiving Party must notify the disclosing Party promptly of any request for such information before disclosing it, if practicable); and (ii) only to those employees, advisers, consultants, or representatives of the receiving Party who have a need to know (provided that such Persons are obligated to the receiving Party in a manner consistent with the terms of this Section). This Section will be inoperative as to particular portions of the confidential information if such information (i) is or lawfully becomes available to the public through no fault of the receiving Party; (ii) was available to the receiving Party on a non-confidential basis prior to its disclosure to the receiving Party by the disclosing Party; (iii) becomes available to the receiving Party on a non-confidential basis from a source other than the disclosing Party when such source is entitled, to the best of the receiving Party’s knowledge, to make the disclosure to the receiving Party; or (iv) independently developed by or for the receiving Party by Persons who have not had access to the disclosing Party’s confidential information.

Article XIII

Disputes Between the Parties

Section 13.01 Dispute Resolution . Any dispute between the Parties in connection with this Agreement shall be resolved in accordance with the procedures set forth in Exhibit G hereto (the “Dispute Resolution Procedures”); provided , however , that either Party may seek a restraining order, temporary injunction, or other provisional relief in any court with jurisdiction over the subject matter of the dispute and sitting in Houston, Texas, if such Party in its sole judgment believes that such action is necessary to avoid irreparable injury or to preserve the status quo ante .

Article XIV

Assignability

Section 14.01 Assignability . This Agreement shall inure to the benefit of and shall be binding upon the Parties and their respective successors and assigns; provided , however , that neither this Agreement nor any of the rights, benefits or obligations hereunder shall be assigned, by operation of Law or otherwise, by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld; provided, however that each of WRSW and WRCLP may assign its rights and obligations hereunder to an affiliate without the consent of any other Party. Except as provided for herein, nothing in this Agreement is intended to confer any rights, benefits or obligations upon any Person other than the Parties and their respective successors and assigns.

Article XV

Compliance with Laws

Section 15.01 Compliance with Laws . This Agreement is in all respects subject to all Laws. The Parties shall at all times comply with all of these Laws as are applicable to their performance of this Agreement.

 

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Article XVI

Severability

Section 16.01 Severability . If any provision of this Agreement or the application thereof shall be found by any arbitral panel or court of competent jurisdiction to be invalid, illegal or unenforceable, to any extent and for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the Parties. In any event, the remainder of this Agreement and the application of such remainder shall not be affected thereby and shall be enforced to the greatest extent permitted by Law.

Article XVII

Non-Waiver

Section 17.01 Non-Waiver . The failure of either Party to enforce any provision, condition, covenant or requirement of this Agreement at any time shall not be construed to be a waiver of such provision, condition, covenant or requirement unless so notified by such Party in writing. No waiver by either Party of any default by the other Party in the performance of any provision, condition, covenant or requirement contained in this Agreement shall be deemed to be a waiver of, or in any manner release such other Party from performance of any other provision, condition, covenant or requirement herein contained, nor be deemed to be a waiver of the same provision, condition, covenant or requirement.

Article XVIII

Entire Agreement; Amendments

Section 18.01 Entire Agreement . This Agreement, together with all exhibits attached hereto, constitutes the entire Agreement between the Parties relating to the subject matter hereof and it supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, between the Parties relating to the subject matter hereof, and there are no warranties, representations or other agreements between the Parties in connection with the subject matter hereof except as specifically set forth in, or contemplated by, this Agreement.

Section 18.02 Amendments . This Agreement shall not be modified or amended, in whole or in part, except by a written amendment signed by the Parties.

Article XIX

Survival

Section 19.01 Survival . Any indemnification granted hereunder by one Party to another Party shall survive the termination of all or any part of this Agreement.

Article XX

Counterparts; Multiple Originals

Section 20.01 Counterparts; Multiple Originals . This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the Parties. Each of the Parties may sign any number of copies of this Agreement. Each signed copy shall be deemed to be an original, but all of them together shall represent one and the same agreement.

 

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Article XXI

Construction

Section 21.01 Construction . The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring a Party by virtue of the authorship of any of the provisions of this Agreement.

Article XXII

Article Headings; Exhibits

Section 22.01 Article Headings . The Article Headings used in this Agreement have been inserted only for convenience to facilitate reference and they shall not be determinative in construing the meaning, interpretation or application of any Article or provision hereof

Section 22.02 Exhibits . The exhibits referred to herein are attached hereto and by this reference are incorporated herein and made a part hereof. In the event there is any conflict between this Agreement and an exhibit, the provisions of this Agreement shall be deemed controlling.

[Signature page follows.]

 

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IN WITNESS WHEREOF , the Parties have caused this Agreement to be signed by their duly authorized officers as of the date first set forth above.

 

WESTERN REFINING SOUTHWEST, INC.
By:  

/s/ Mark J. Smith

Name:   Mark J. Smith
Title:   President – Refining and Marketing
WESTERN REFINING COMPANY, L.P.
By:   Western Refining GP, LLC
  Its general partner
By:  

/s/ Mark J. Smith

Name:   Mark J. Smith
Title:   President – Refining and Marketing
WESTERN REFINING LOGISTICS, LP
By:   Western Refining Logistics GP, LLC
  Its general partner
By:  

/s/ Gary R. Dalke

Name:   Gary R. Dalke
Title:   Chief Financial Officer

Signature Page to Operational Services Agreement


Exhibit A

Description of Pipelines and Terminals

Pipelines

 

  Main 12-inch Pipeline, a 12-inch crude oil pipeline approximately 20 miles in length which connects the Mason Station crude oil facility to the T Station crude oil facility.

 

  West 10-inch Pipeline and CR-285 Crude Oil Station , a 10-inch crude oil pipeline approximately 7 miles in length which extends westward from the T Station crude oil facility.

 

  East 10-inch Pipeline and CR-1 Crude Oil Station , a 10-inch crude oil pipeline approximately 12 miles in length which extends eastward from the T Station crude oil facility and includes a two-bay truck loading and unloading location and associated storage.

 

  T Station Crude Oil Facility .

 

  Mason Station Crude Oil Facility ., which includes two 80,000 barrel crude oil storage tanks, a seven-bay truck loading and unloading location and nine automatic custody transfer units.

 

  McCamey Crude Oil Station located in Upton County, Texas which includes a four-bay truck rack and crude receipt tanks.

 

  Riverbend 4-inch Gathering Pipeline , a four-inch crude oil pipeline approximately 3 miles in length which connects the Riverbend crude oil tanks in Crane County, Texas owned by third parties to the Kinder Morgan Wink pipeline.

 

  San Juan 6-inch Pipeline , a six-inch crude oil pipeline approximately 18 miles in length which connects the Bloomfield terminal to the Bisti crude oil station.

 

  West 6-inch Pipeline , a six-inch crude oil pipeline approximately 77 miles in length which connects the Bisti crude oil station to Western’s Gallup Refinery.

 

  TexNew Mex 16” Pipeline Segment a 16-inch crude oil pipeline segment approximately 43 miles in length which connects the Bisti crude oil station to the Star Lake, New Mexico crude oil station.

 

  East 6-inch Pipeline a six-inch crude oil pipeline approximately 105 miles in length which connects the Pettigrew crude oil station to the Star Lake, New Mexico crude oil station and also to the Gallup Refinery operated by WRSW;

 

  Wingate 4-inch NGL Pipeline , a four-inch natural gas liquids pipeline approximately 14 miles in length which connects Phillips 66 Company’s NGL plant located in Gallup, New Mexico to the Gallup Refinery operated by WRSW.

 

  The Bisti, Star Lake, Lybrook, and Pettigrew Stations, which collectively have (i) 18 crude oil storage and breakout tanks with a total combined capacity of 356,449 barrels; (ii) four truck receipt locations and (iii) one intake connection point with the Navajo Nation Oil and Gas Company Running Horse pipeline.

Terminals

 

  El Paso Tank Farm, including 103 tanks with an aggregate shell storage capacity of approximately 5.1 million barrels, short pipelines that transfer products to and from the El Paso Refinery operated by WRCLP and storage tanks and to terminals or distribution pipelines and a rail loading facility.

 

  El Paso Refined Products Terminal , which has a capacity of approximately 45,000 bpd and includes 14 storage tanks with a combined shell storage capacity of 69,881 barrels and a six-bay truck loading rack.


  Gallup Tank Farm , which includes 58 storage tanks with a combined shell storage capacity of 903,692 barrels and a rail loading facility.

 

  Gallup Refined Products Terminal ., which has a capacity of up to approximately 34,000 bpd and includes eight storage tanks with a combined active shell storage capacity of 23,368 barrels and a six-bay truck loading rack.

 

  Bloomfield Terminal , which includes 23 storage tanks with combined shell storage capacity of 734,544 barrels.

 

  Albuquerque Refined Products Terminal includes a two-bay truck loading rack, nine storage tanks with a combined shell storage capacity of 185,666 barrels, pipeline connections and a rail loading facility.

 

  Asphalt Plant and Terminals including an asphalt plant and terminal in El Paso and three stand-alone asphalt terminals in Albuquerque, New Mexico and Phoenix and Tucson, Arizona.


Exhibit B

Operating Services

 

(a) Day-to-day routine and emergency supervision of the operation of the Pipelines and Terminals.

 

(b) Operations of the Pipelines and Terminals in accordance with prudent industry practice and the directions for product and feedstock movements given by the Partnership, including but not limited to operation of the Pipelines and Terminals’ pump stations and other facilities within such operating parameters and specifications as may be in accordance with sound engineering and operating practices and applicable Laws, operation of the Pipeline meter stations including calibration of measurement and product analysis equipment, operation of booster pumps, providing custody measurement as required by the Partnership and the coordination of product and feedstock movements as directed by the Partnership, in each case, employing such of its own or outside personnel as may be necessary to perform such operations.

 

(c) Provision of communications, inspection, surveillance, flow control, corrosion control, and monitoring.

 

(d) Establishment of safety, health, environmental, training, emergency response, spill response and other programs in connection with the operation of the Pipelines and Terminals, in each case as may be required by prudent practices or under applicable Laws.

 

(e) Preparation and retention of appropriate records and logs as required by applicable Laws and that a prudent provider of operating services would maintain regarding the Pipelines and Terminals, which records and logs shall be made available to the Partnership upon request.

 

(f) Monitoring and control services (SCADA) for the Pipelines. The Western Parties shall be responsible for the maintenance of the Pipeline instrument systems required for performance of monitoring and control services, product analysis, and custody transfer measurements in accordance with the Partnership requirements and/or generally accepted industry practices.

 

(g) Scheduling services for all products shipped into and delivered out of the Pipelines and Terminals. These scheduling services include consultation with refineries, third-party pipelines, third-party off-line delivery and shipper personnel.

 

(h) Coordination of all inventory management activities and assistance in the development and implementation of inventory control policies and guidelines regarding the Pipelines and Terminals.

 

(i) Determining net volume received and delivered by utilizing measurement facilities comprised of components of standard make, installed, operated and maintained in accordance with the latest edition of the American Petroleum Institute Manual of Petroleum Measurement Standards and standard industry practices, and reconcile book inventory with actual inventory.


(j) Payment of damages in accordance with Section 2.06 of the Agreement occurring as a result of, or settlement of, claims made in connection with the Pipelines and Terminals and the Western Parties’ operation, maintenance and repair activities.

 

(k) Sufficient on-the-job and outside training to its employees and contractors operating and maintaining the Pipelines and Terminals for the operation of the Pipelines and Terminals in a safe and efficient manner in accordance with the applicable Western Party and governmental rules and regulations and Laws.

 

(l) Preparation, filing and renewal, as applicable, of all operating licenses and/or permits as directed by the Partnership.

 

(m) Emergency response services, including but not limited to closing Pipeline valves in connection with a response to any emergency involving the Pipelines.

 

(n) Laboratory and analytical services including but not limited to product quality and assurance analysis.

 

(o) Additive procurement services and inventory management of additive inventories.

 

(p) Security services including but not limited to controlling access to Pipelines and Terminals and negotiation, execution and management of access agreements.

 

(q) Such other operating services as the Partnership may request from time to time.


Exhibit C

Maintenance Services

 

(a) Day-to-day routine and emergency supervision, administrative liaison and related services required in connection with the maintenance and repair of the Pipelines and Terminals.

 

(b) Maintenance and repair of the Pipelines and Terminals including but not limited to Pipeline repairs, Terminal repairs, aerial pipeline patrols, population density counts, right-of-way maintenance (including but not limited to filling of washes, mowing weeds and brush, repairing fences, erection and maintenance of fences, barricades or other suitable protection to protect the Pipelines and associated equipment from damage due to mowers, trucks or other vehicles, flagging and identification of Pipelines in the event of excavation in the vicinity of the Pipelines by the Western Parties or third parties), in each case, within such maintenance/repair parameters and specifications as may be in accordance with sound engineering and maintenance practices and applicable Laws.

 

(c) Implementation of a preventative maintenance program for the Pipelines and Terminals, including, without limitation, periodic testing, adjustment and maintenance of the Pipelines and Terminals, meter station and valve inspections and meter proving maintenance, in each case in accordance with prudent maintenance practices and applicable Laws.

 

(d) Implementation of a tank maintenance and integrity program for the Pipelines and Terminals, including, without limitation, periodic testing, maintenance, repair and/or replacement in each case in accordance with prudent maintenance practices and applicable Laws.

 

(e) Inspection services for monitoring work performed by others in the vicinity of the Pipelines and Terminals.

 

(f) Preparation and retention of appropriate records and logs as required by applicable Laws and that a prudent provider of maintenance services would maintain regarding the Pipelines and Terminals, which records and logs shall be made available to the Partnership upon request.

 

(g) Reconstruction, reconditioning, overhaul or replacement of the Pipelines and Terminals, as appropriate.

 

(h) Establishment of safety, health, environmental, training, emergency response, spill response and other programs in connection with the maintenance and repair of the Pipelines and Terminals, in each case as may be required by prudent maintenance practices or under applicable Laws.

 

(i) Technical services for trouble-shooting problems, improving Pipeline and Terminal performance, upgrading the Pipelines and Terminals, repairing the Pipelines and Terminals or meeting regulatory or safety requirements.


(j) Maintaining compliance with all applicable federal, state and local environmental, health and safety Laws including but not limited to conducting all environmental investigation and remediation activities, as required by federal, state and local environmental Laws and/or prudent business practices.

 

(k) Facilitating the acquisition of all materials (including spare parts inventories), equipment, services, supplies and labor necessary for the maintenance and repair of the Pipelines and Terminals.

 

(l) Performing all planning, design and engineering functions related to the maintenance and repair of the Pipelines and Terminals including but not limited to selecting and overseeing contractors and material suppliers for such activities.

 

(m) Advising the Partnership of major plans or significant changes in the maintenance or repair of the Pipelines and Terminals.

 

(n) Preparing excavation plans for Pipeline right-of-way work, and advising the Partnership of any right-of-way work which could threaten the integrity of the Pipelines.

 

(o) Such other Pipeline and Terminal maintenance, repair and related services as the Partnership may request from time to time.


Exhibit D

Administrative Services

 

(a) As directed by the Partnership, preparation, filing and renewal, as applicable, of tariffs with FERC and/or state agencies.

 

(b) As directed by the Partnership, preparation and filing of permits, permit updates, licenses and other documents required by any regulatory body or government agency, federal, state or local, if any, having jurisdiction over the Western Parties, the Partnership or their respective businesses.

 

(c) Maintenance of fixed asset records of the Pipelines, Terminals and/or other regulated pipeline systems or terminals that the Western Parties may operate upon request by the Partnership and acceptance by the Western Parties.

 

(d) Business development and associated planning and design services including but not limited to services relating to mergers and acquisitions and related expansion.

 

(e) Payment and billing services including but not limited to responsibility for arranging billing and/or payment of any fees relating to operation of the Pipelines and Terminals.

 

(f) Measurement and yield accounting services.

 

(g) Financial analysis services including provision of monthly statements of gains and losses and financial reconciliations.

 

(h) Such other administrative services (other than any Services (as defined in the Omnibus Agreement) provided under the Omnibus Agreement) as the Partnership may request from time to time.


Exhibit E

Construction Services

 

(a) Construction, reconstruction, reconditioning, overhaul and replacement of Pipelines and Terminals and their related facilities including but not limited to engineering, procurement, construction and project performance testing and services relating thereto.

 

(b) Oversight and management services as may be necessary in connection with the activities described in item (a) above, as may be necessary.

 

(c) Planning, design and engineering functions related to the activities described in item (a) above, as may be necessary.

 

(d) Procurement of all materials, equipment, services, supplies and labor necessary for and related to the activities described in item (a) above.

 

(e) Preparation and/or assistance in the preparation of capital project (AFE) documents for approval by the Partnership.


Exhibit F

Accounting Procedures

This Exhibit shall govern the Accounting Procedures with regard to the billing and/or reimbursement of costs incurred by the Western Parties (which, in their capacity providing Services are referred to as a “Service Provider”) in connection with the performance by a Service Provider of the Services pursuant to the Agreement. These Accounting Procedures shall be effective from the date hereof until replaced or modified by mutual agreement of the Parties.

1. General Provisions

 

(a) Statements and Billings . Service Provider shall record the Partnership’s financial transactions resulting from this Agreement in Service Provider’s financial system and allow the Partnership to access its records in that system.

 

(b) Payments by the Partnership . The Partnership shall pay all charges from Service Provider in accordance with Section 3.05 of the Agreement.

 

(c) Adjustments . Except as otherwise provided in the Agreement, the actual payment of any such bills shall not prejudice the right of the Partnership to protest or question the correctness or appropriateness thereof; provided , however , that all bills and statements rendered to the Partnership during any calendar Year shall conclusively be presumed to be true and correct after twenty-four (24) Months following the end of any such calendar Year, unless prior to the end of said twenty-four (24) Month period the Partnership takes written exception thereto and makes a claim against Service Provider for adjustment.

 

(d) Financial Records . Service Provider shall maintain accurate books and records in accordance with GAAP and shall provide such other information as required by FERC or any other regulatory body or government agency, both federal and state, if any, having jurisdiction over Service Provider, the Partnership, or their respective businesses.

 

(e) Omnibus Agreement . It is the intent of the Parties that any Services billed to the Partnership Group under the Omnibus Agreement or the Partnership Agreement shall not also be billed under this Agreement.

2. Service Provider Personnel Costs . The Service Provider shall bill the Partnership for all costs associated with its personnel performing services pursuant to this agreement on an allocation methodology reasonably determined by the Service Provider. This methodology will be determined by the Service Provider on an annual basis following the approval of the Operating Budget by the Partnership but no later than December 31 of the year preceding the year services are to be provided.


3. Direct Costs . Reimbursement of Service Provider shall include, but shall not be limited to, the right to reimbursement for the following Direct Costs, subject to Section 6.03 of the Agreement:

 

(a) Plant, Property and Equipment . The cost of plant, property and equipment purchased, leased or rented from suppliers and vendors expressly for the purpose of providing Services to the Partnership under the Agreement.

 

(b) Materials, Supplies, Tools and Miscellaneous Equipment . Any materials, supplies, tools and miscellaneous equipment purchased or furnished by Service Provider for the benefit of the Partnership shall be priced at cost. For equipment or materials that are transported to a location by Service Provider for the benefit of the Partnership, any costs or expenses incurred by Service Provider in connection therewith shall be reimbursed at cost. Service Provider shall make reasonable efforts to ensure costs for such materials, supplies, tools and miscellaneous equipment are compatible with industry norms.

 

(c) Reimbursable Expenses of Employees . Service Provider shall bill the Partnership for reasonable personal expenses of its (or its Affiliates’) employees providing services pursuant to this Agreement. Such reasonable personal expense shall include out-of-pocket expenditures incurred by employees in the performance of their duties on behalf of the Partnership and which were reimbursed under the terms of Service Provider’s official policy governing reimbursable employee expenses.

 

(d) Autos, Trucks and Heavy Mobile Work Equipment . All automotive, truck and other mobile equipment shall be charged on a direct charge basis that is consistent with Service Providers practices in charging such costs to its own facilities. When a driver or operator is furnished with any such equipment, the rental rate of such equipment shall not include wages and expenses of the driver or operator if they will be charged separately.

 

(e) Permits, Licenses and Bond . Cost of permits, licenses and bond premiums necessary to perform and provide Services for the Pipelines and Terminals.

 

(f) Outside Services . The cost of outside services and expertise, including but not limited to engineering, fees from consultants, provided that the outside services rendered were for the benefit of the Partnership under the Agreement. Service Provider shall make reasonable efforts to ensure costs for such services are competitive with industry norms.

 

(g) Insurance . Workers’ compensation insurance premiums paid or allocated as respects Service Provider’s employees performing Services under this Agreement, not to exceed state manual rates for such insurance on a guaranteed cost basis and charged as an amount per $100 of payroll.

 

(h) Utilities, Communication and Power . All costs including allocated costs incurred by Service Provider on behalf of the Partnership for utility, communication and power services, plus fuel costs.

 

(i)

Maintenance and Repair . All costs including allocated costs incurred to maintain the Pipelines and Terminals and related facilities, periodically inspect the Pipelines and


  Terminals for damages or other conditions that could affect the safe, efficient and economical operation of the Pipelines and Terminals, and perform such repairs to the Pipelines and Terminals as may be required.

 

(j) Legal Expenses and Claims . (i) All net costs and expenses for handling, investigating and settling litigation or Claims arising by reason of the provision of the Services, or necessary to protect or recover any of the Partnership’s property, including, but not limited to, attorneys fees, court costs, cost of investigation or procuring evidence and any judgments paid or amounts paid in settlement or satisfaction of any such litigation or claims.

 

(k) Damages and Losses to Pipelines and Terminal s . To the extent not covered by insurance or otherwise recovered by unaffiliated parties, all costs or expenses necessary for the repair or replacement of the Pipelines and Terminals made necessary because of damages or losses incurred by fire, floods, earthquake, storm, theft, chemicals spills, accident, or other cause, except those costs or expenses which Service Provider is liable for pursuant to Article VI of the Agreement to which this Exhibit is attached. Service Provider shall furnish the Partnership Notice of damages or losses incurred as soon as practicable after a report thereof has been received.

 

(l) Right-of-Way Costs . The costs of rights-of-way and land purchases, damages and appraisals, and legal, regulatory and permit fees specifically related thereto.

 

(m) Taxes . All Taxes of every kind and nature assessed or levied upon or incurred in connection with the Pipelines and Terminals that have been paid by Service Provider for the benefit of the Partnership, including any charges or penalties for late payment thereof to the extent caused or contributed to by the Partnership, provided such late charge or fee did not arise from Service Provider’s gross negligence of willful misconduct in the filing and payment of the appropriate Tax.

 

(n) Regulatory Costs . The cost of complying with mandated regulatory programs, including, but not limited to, DOT operator qualification training.

 

(o) Other Expenditures . Any other expenditure not covered or dealt with in the foregoing provisions, and that is incurred by Service Provider in the necessary and proper conduct of the Services, and that may be captured and billed to the Partnership on a Direct Cost basis.


Exhibit G

Dispute Resolution Procedures

1. Disputes . The Parties agree that if a dispute arises which is not capable of immediate commercial resolution between the Parties, it is in the best interests of the Parties for such dispute to be resolved in the shortest time and with the lowest cost of resolution practicable. Consequently, the Parties agree to attempt to resolve any dispute without resort to the courts utilizing the following procedures:

 

(a) The Party believing a dispute to exist will give the other Parties prompt written notice thereof (the “Dispute Notice”), setting forth in reasonable detail the facts alleged to give rise to such dispute, any relevant contractual provisions, the nature of any claimed default or breach and a statement of the manner in which such Party believes the dispute should be resolved.

 

(b) Within fifteen (15) days after receipt of any Dispute Notice, the Party against whom relief is sought in connection with such Dispute Notice shall deliver a written response (the “Dispute Response”), setting forth in reasonable detail its views of the facts alleged to give rise to such Dispute, any relevant contractual provisions, the nature of the claimed default or breach and a statement of the manner in which such Party believes the dispute should be resolved.

 

(c) If the Parties do not agree on the manner in which the dispute should be resolved, they shall arrange to hold a meeting (a “Dispute Meeting”) within fifteen (15) days after delivery of the Dispute Response. Each Party shall have in attendance at such Dispute Meeting a representative with the authority to resolve such Dispute. At the Dispute Meeting (and any adjournments thereof), the Parties shall negotiate in an attempt to agree as to whether a dispute exists, the exact nature of the dispute and the manner in which the dispute should be resolved. Any resolution of the dispute shall be evidenced by a written agreement setting forth in reasonable detail the actions to be taken by each Party. If no such resolution is reached within thirty (30) days after the initial Dispute Meeting (the “Dispute Negotiation Period”), the Parties may pursue the commencement of proceedings with respect to such dispute pursuant to Sections 2 or 3 below, as applicable.

2. Resolution of Disputes in Excess of $1,000,000.

 

(a) If any dispute between the Parties arising out of, or in connection with, this Contract involving an amount at issue in excess of $1,000,000 (“Material Dispute”) is unresolved after the Dispute Negotiation Period, then such Material Claim may be submitted to the exclusive jurisdiction of the state or federal court of competent jurisdiction sitting in Houston, Harris County, Texas. Any counterclaim arising out of, or in connection with, the Material Dispute shall be brought in the same proceeding.

 

(b)

Each Party submits to the jurisdiction of the state or federal court of competent jurisdiction sitting in Houston, Harris County, Texas. Each Party waives, to the fullest extent permitted by applicable law, any objection to venue in the state or federal court of competent jurisdiction sitting in Houston, Harris County, Texas or to or any claim of


  inconvenient forum of such court or of sovereign immunity with respect to Material Disputes. Each Party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any proceeding relating to this Agreement. Each Party agrees not to arbitrate any Material Disputes arising out of, or in connection with, the Agreement. Neither Party shall be precluded from pursuing arrest, attachment, and/or other conservatory, interlocutory, or interim actions in relation to the Contract in any court of competent jurisdiction. The prevailing Party in any lawsuit shall be entitled to an award of reasonable attorney fees.

 

(c) Each Party agrees to the service of any court process by registered or certified U.S. mail (return receipt requested) or by express mail courier delivered to the Party pursuant to the notice provision of this Agreement, In addition, each Party agrees that any other method of service allowed by applicable law may be used. All process and any accompanying complaint or other pleadings shall be in the English language and do not require officialization.

3. Resolution of Disputes Equal to or Below $1,000,000.

 

(a) If any dispute between the Parties involving an amount at issue which is less than or equal to $1,000,000 (“Non-Material Dispute”) is unresolved by the end of the Dispute Negotiation Period, the Parties agree that any such Non-Material Dispute shall be determined by confidential, binding, neutral arbitration as provided by the federal arbitration act and Texas substantive Law to be conducted in accordance with the JAMS Streamlined Arbitration Rules and Procedures by a single neutral arbitrator. The Parties agree that the arbitrator shall be a retired United States federal district judge, and in the event that no United States federal district judge is available, a retired judge. The Parties are giving up any rights each might possess to discovery and appeal of such Non-Material Disputes and to have such Non-Material Disputes litigated in a court or by jury trial. The agreement to this provision is voluntary.

 

(b) Unless the Parties agree otherwise, and except as hereinafter provided, the place of arbitration shall be Houston, Texas. The arbitrators shall issue a reasoned written decision and award which shall not exceed $1,000,000 exclusive of any interest, costs or any other amounts. The Parties expressly agree that the arbitrators shall not award punitive damages, consequential damages, or attorneys’ fees (except attorneys’ fees specifically authorized by the Agreement).

 

(c) The Parties shall bear equally the fees and expenses of the arbitration, unless the arbitrators decide otherwise. Each Party shall bear the costs of its own counsel, witnesses (if any) and employees, unless the arbitrators decide otherwise.

 

(d)

If the Parties are unable to agree upon a single arbitrator for a Non-Material Dispute within twenty (20) days of the date on which the Dispute Negotiation Period ends, each Party shall select an arbitrator within twenty-five (25) days of the date on which the Dispute Negotiation Period ends. If a Party fails to select an arbitrator within such period, the Houston, Texas office of JAMS shall appoint an arbitrator for such Party. The two individuals so selected shall select a third individual who shall serve as the arbitrator


  of the Non-Material Dispute. The arbitrator shall be selected no later than forty-five (45) days after the date on which the Dispute Negotiation Period ends, and, if possible, shall be experienced in legal and operational matters related to the industry of the Parties.

 

(e) The decision rendered by the arbitrator shall be considered the final and binding resolution of the Non-Material Dispute and will not be subject to appeal. No Party shall sue the other except for enforcement of the arbitrator’s decision if the other Party is not performing in accordance with the arbitrator’s decision.

4. General Provisions.

 

(a) The obligations of the Parties under this Exhibit G shall survive the expiration or termination of this Agreement.

 

(b) All offers, conduct, views, opinions and statements made in the course of negotiation or mediation by any of the Parties, their employees, agents, experts, attorneys and representatives, and by any mediator, are confidential, made for compromise and settlement, protected from disclosure under Federal and State Rules of Evidence and Procedure, and inadmissible and not discoverable for any purpose, including impeachment, in litigation or legal proceedings between the Parties, and shall not be disclosed to any Person who is not an agent, employee, expert or representative of the Parties, provided that evidence otherwise discoverable or admissible is not excluded from discovery or admission as a result of presentation or use in mediation.

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

Exhibit 10.5

PIPELINE AND GATHERING SERVICES AGREEMENT

This PIPELINE AND GATHERING SERVICES AGREEMENT (this “ Agreement ”) is dated as of October 16, 2013, by and among Western Refining Company, L.P., a Delaware limited partnership, and Western Refining Southwest, Inc., an Arizona corporation (collectively, “ WNR ”), on one hand, and Western Refining Pipeline, LLC, a Delaware limited liability company (“ WRPG ”), on the other. In consideration of the covenants and obligations contained herein, the Parties to this Agreement hereby agree as follows:

ARTICLE 1

DEFINITIONS

Capitalized terms used throughout this Agreement shall have the meanings set forth below, unless otherwise specifically defined herein.

Adjusted Minimum Commitments ” means the Adjusted Minimum Mainline Movement Commitment, Adjusted Minimum Truck Offloading Commitment, Adjusted Minimum Gathering and Injection Commitment and Adjusted Minimum Storage Reservation Commitment.

Adjusted Minimum Gathering and Injection Commitment ” means WNR’s Minimum Gathering and Injection Commitment, adjusted by deducting the applicable Stipulated Gathering and Injection Commitment for each Pipeline and Gathering System or Facility that is no longer subject to this Agreement.

Adjusted Minimum Mainline Movement Commitment ” means WNR’s Minimum Mainline Movement Commitment, adjusted by deducting the applicable Stipulated Mainline Movement Commitment set forth on Schedule 22.3 for each Pipeline and Gathering System or Facility that is no longer subject to this Agreement.

Adjusted Minimum Storage Reservation Commitment ” means WNR’s Minimum Storage Reservation Commitment adjusted by deducting the applicable Stipulated Storage Reservation Commitment for each Pipeline and Gathering System or Facility that is no longer subject to this Agreement.

Adjusted Minimum Truck Offloading Commitment ” means WNR’s Minimum Truck Offloading Commitment, adjusted by deducting the applicable Stipulated Truck Offloading Commitment set forth on Schedule 22.3 for each Pipeline and Gathering System or Facility that is no longer subject to this Agreement.

Agreement ” has the meaning set forth in the Preamble.

Applicable Law ” means any applicable statute, law, regulation, ordinance, rule, determination, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, requirement, or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect.

 

1


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Barrel ” and “ barrel ” means a volume equal to 42 U.S. gallons of 231 cubic inches each, at 60 degrees Fahrenheit under one atmosphere of pressure.

Base Invoice Amount ” has the meaning set forth in Section 7.1.

bpd ” means Barrels per day.

Business Day ” means a day, other than a Saturday or Sunday, on which banks in New York, New York are open for the general transaction of business.

Capacity Resolution ” has the meaning set forth in Section 23.3.

Carrier ” means WNR or a third-party agent or contractor hired by WNR, who is in the business of transporting volumes via tank truck or rail car.

Commencement Date ” has the meaning set forth in Section 2.1.

Confidential Information ” has the meaning set forth in Section 27.1.

Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

Credit ” has the meaning set forth in Section 7.4.

Definitive Agreement ” has the meaning set forth in Section 21.2.

Excess Amounts ” means:

(a) with respect to mainline movement volumes, the fee owed by WNR to WRPG for mainline movement volumes in excess of the Minimum Mainline Movement Commitment;

(b) with respect to truck offloading services, the fee owed by WNR to WRPG for truck offloading volumes in excess of the Minimum Truck Offloading Commitment;

(c) with respect to gathering and injection services, the fee owed by WNR to WRPG for gathering and injection services in excess of the Minimum Gathering and Injection Commitment; and

(d) with respect to storage services, the fee owed by WNR to WRPG for storage services in excess of the Minimum Storage Reservation Commitment.

 

2


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Extension Period ” has the meaning set forth in Section 3.1.

Facility ” means each of those facilities comprising the Pipeline and Gathering System described on Schedule 1.1.

FERC ” means the Federal Energy Regulatory Commission.

First Offer Period ” has the meaning set forth in Section 21.2.

Force Majeure ” means circumstances not reasonably within the control of WRPG and which, by the exercise of due diligence, WRPG is unable to prevent or overcome that prevent performance of WRPG’s obligations, including: acts of God, strikes, lockouts or other industrial disturbances, wars, riots, fires, floods, storms, orders of courts or Governmental Authorities, explosions, terrorist acts, accidental disruption of service, breakage, breakdown to machinery, storage tanks or lines of pipe and inability to obtain or unavoidable delays in obtaining material or equipment and similar events.

Force Majeure Notice ” and “ Force Majeure Period ” each have the meaning set forth in Section 22.1.

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.

Minimum Commitments ” means the Minimum Mainline Movement Commitment, Minimum Truck Offloading Commitment, Minimum Gathering and Injection Commitment, and Minimum Storage Reservation Commitment.

Minimum Gathering and Injection Commitment ” means the minimum gathering and injection services set forth on Schedule 4.4; provided however, that the Minimum Gathering and Injection Commitment during the Month in which the Commencement Date occurs shall be prorated in accordance with the ratio of the number of days including and following the Commencement Date in such Month to the total number of days in such Month.

Minimum Gathering and Injection Fee ” has the meaning set forth in Section 4.4.

Minimum Mainline Movement Commitment ” means the minimum mainline movement services set forth on Schedule 4.2; provided however, that the Minimum Mainline Movement Commitment during the Month in which the Commencement Date occurs shall be prorated in accordance with the ratio of the number of days including and following the Commencement Date in such Month to the total number of days in such Month.

Minimum Mainline Movement Fee ” has the meaning set forth in Section 4.2.

 

3


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Minimum Storage Reservation Commitment ” means the minimum storage reservation commitment set forth on Schedule 4.5; provided however, that the Minimum Storage Reservation Commitment during the Month in which the Commencement Date occurs shall be prorated in accordance with the ratio of the number of days including and following the Commencement Date in such Month to the total number of days in such Month.

Minimum Storage Reservation Fee ” has the meaning set forth in Section 4.5.

Minimum Truck Offloading Commitment ” means the minimum truck offloading services set forth on Schedule 4.3; provided however, that the Minimum Truck Offloading Commitment during the Month in which the Commencement Date occurs shall be prorated in accordance with the ratio of the number of days including and following the Commencement Date in such Month to the total number of days in such Month.

Minimum Truck Offloading Fee ” has the meaning set forth in Section 4.3.

Month ” means the period commencing on the Commencement Date and ending on the last day of the calendar month in which service begins and each successive calendar month thereafter.

Notice Period ” has the meaning set forth in Section 24.1.

Party” or “Parties ” means each of WNR and WRPG.

Partnership Change of Control ” means Western Refining, Inc., ceasing to Control, directly or indirectly, the general partner of Western Refining Logistics, LP.

Person ” means any individual, partnership, limited partnership, joint venture, corporation, limited liability company, limited liability partnership, trust, unincorporated organization or Governmental Authority or any department or agency thereof.

Pipeline and Gathering System ” means those assets described on Schedule 1.1.

Prime Rate ” means the prime interest rate as reported in the New York edition of the Wall Street Journal on the due date of the applicable payment.

Reasonable Efforts ” means as to a Person, commercially reasonable efforts of such Person without the obligations to pursue any litigation or pay or incur any material monetary payments; provided, however, that the foregoing shall not require or cause any Party to (a) waive any right it may have under other provisions of this Agreement, (b) grant any material accommodations, or (c) take or cause to be taken any action, or to do or cause to be done anything, contemplated by this Agreement to be taken or done or caused to be taken or done by the another Party hereto.

Refineries ” means the refineries owned and operated by Western Refining, Inc., located in El Paso, Texas, and Gallup, New Mexico.

Restoration ” has the meaning set forth in Section 23.2.

 

4


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Right of First Refusal ” has the meaning set forth in Section 21.2.

Second Offer Period ” has the meaning set forth in Section 21.2.

Shortfall Amount ” has the meaning set forth in Section 7.2.

Stipulated Commitments ” means the Stipulated Gathering and Injection Commitment, Stipulated Mainline Movement Commitment, Stipulated Storage Commitment and Stipulated Truck Offloading Commitment.

Stipulated Gathering and Injection Commitment ” means the stipulated volume in barrels as set forth for each Pipeline and Gathering System or Facility on Schedule 22.3.

Stipulated Mainline Movement Commitment ” means the stipulated volume in barrels as set forth for each Pipeline and Gathering System or Facility on Schedule 22.3.

“Stipulated Storage Commitment ” means the storage capacity for each Pipeline and Gathering System or Facility covered by the Minimum Product Storage Commitment as set forth on Schedule 22.3.

Stipulated Truck Offloading Commitment ” means the stipulated volume in barrels as set forth for each Pipeline and Gathering System or Facility on Schedule 22.3.

Suspension Notice ” has the meaning set forth in Section 24.1.

Term ” and “ Initial Term ” each have the meaning set forth in Section 3.1.

Termination Notice ” has the meaning set forth in Section 22.1.

WNR ” has the meaning set forth in the Preamble.

WRPG ” has the meaning set forth in the Preamble.

ARTICLE 2

COMMENCEMENT DATE

2.1 The date of this Agreement shall be the “ Commencement Date ”.

ARTICLE 3

TERM

3.1 The initial term of this Agreement shall commence on the Commencement Date and shall continue through October 16, 2023 (the “ Initial Term ”); provided, however, that the Initial Term may be extended for up to two (2) renewal terms of five (5) years each (each, an “ Extension Period ”) upon the mutual agreement in writing of WRPG and WNR no less than ninety (90) days prior to the end of the Initial Term or the then-current Extension Period. The Initial Term, and any extensions of this Agreement as provided above, shall be collectively referred to herein as the “ Term ”.

 

5


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

ARTICLE 4

SERVICES AND MINIMUM COMMITMENTS

4.1 Minimum Commitments. During the Term of this Agreement and subject to the terms and conditions of this Agreement, each Month WNR shall:

 

  (a) Throughput the Minimum Mainline Movement Commitment for which WNR shall pay a Minimum Mainline Movement Fee;

 

  (b) Offload the Minimum Truck Offloading Commitment for which WNR shall pay a Minimum Truck Offloading Fee;

 

  (c) Utilize gathering and injection services at the Minimum Gathering and Injection Commitment for which WNR shall pay a Minimum Gathering and Injection Fee; and

 

  (d) Reserve the Minimum Storage Reservation Commitment for which WNR shall pay a Minimum Storage Reservation Fee.

For the avoidance of doubt, these are monthly system-wide fee commitments for the Pipeline and Gathering System. During the Term of this Agreement and subject to the terms and conditions of this Agreement, each Month WRPG shall provide mainline movement services, truck offloading services, gathering and injection services and storage services at the Pipeline and Gathering System in no less than volumes covered under the Minimum Storage Reservation Commitment, the Minimum Mainline Movement Commitment, the Minimum Truck Offloading Commitment and the Minimum Gathering and Injection Commitment, as applicable.

4.2 Mainline Movement Services. WRPG shall provide mainline movement services and WNR shall pay the per barrel fee set forth on Schedule 4.2 for the volumes WNR throughputs on the Pipeline and Gathering System for the Minimum Mainline Movement Commitment. The aggregate of these fees on a monthly basis for the Pipeline and Gathering System shall be referred to as the “ Minimum Mainline Movement Fee .” Unless otherwise provided by an applicable tariff, WNR may utilize mainline movement services in excess of the volumes covered under the Minimum Mainline Movement Fee and, in such circumstances, WRPG shall prioritize WNR’s utilization of such mainline movement services over third-party customers. Any such excess mainline movement services will be at the per barrel fees set forth on Schedule 4.2. Subject to Article 13 and 14, WRPG may utilize any mainline movement capacity not being used by WNR to provide mainline movement services to third parties, provided, however, that WRPG shall be required, to the extent WNR desires to utilize any then-available capacity, to prioritize WNR’s utilization of such capacity over third-party customers.

4.3 Truck Offloading Services. WRPG shall provide truck offloading services and WNR shall pay the per barrel fee set forth on Schedule 4.3 for such truck offloading services for the Minimum Truck Offloading Commitment. The aggregate of these fees on a monthly basis

 

6


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

shall be referred to as the “ Minimum Truck Offloading Fee .” From time to time upon agreement of the Parties and to the extent there is available capacity, WNR may utilize truck offloading services in excess of the volumes covered under the Minimum Truck Offloading Fee and, in such circumstances, WRPG shall prioritize WNR’s utilization of such truck offloading services over third party customers. Any such excess truck offloading services will be at the per barrel fees set forth on Schedule 4.3. WRPG may utilize any truck offloading capacity not being used by WNR to provide truck offloading services to third parties, provided, however, that WRPG shall be required, to the extent WNR desires to utilize any then-available capacity, to prioritize WNR’s utilization of such capacity over third party customers.

4.4 Gathering and Injection Services. WRPG shall provide gathering and injection services and WNR shall pay the per barrel fee set forth on Schedule 4.4 for such gathering and injection services for the Minimum Gathering and Injection Commitment. The aggregate of these fees on a monthly basis shall be referred to as the “ Minimum Gathering and Injection Fee .” From time to time upon agreement of the Parties and to the extent there is available capacity, WNR may utilize gathering and injection services in excess of the volumes covered under the Minimum Gathering and Injection Fee and, in such circumstances, WRPG shall prioritize WNR’s utilization of such gathering and injection services over third party customers. Any such gathering and injection services will be at the per barrel fees set forth on Schedule 4.4. WRPG may utilize any gathering and injection capacity not being used by WNR to provide gathering and injection services to third parties, provided, however, that WRPG shall be required, to the extent WNR desires to utilize any then-available capacity, to prioritize WNR’s utilization of such capacity over third party customers.

4.5 Storage Services. WRPG shall provide storage services in storage tanks included in the Pipeline and Gathering System and WNR shall pay the monthly fee set forth on Schedule 4.5 to reserve, on a firm basis, the shell capacity set forth on Schedule 4.5. The aggregate of these fees on a monthly basis for the Pipeline and Gathering System shall be referred to as the “ Minimum Storage Reservation Fee .” WRPG may utilize any shell capacity not being used by WNR to provide storage to third parties, provided, however, that WRPG shall be required, to the extent WNR desires to utilize any then-available storage capacity, to prioritize WNR’s utilization of such storage capacity over third-party customers.

4.6 Additional Services. If WNR requests services different in kind, scope or frequency from services provided for in this Agreement, then the Parties shall negotiate in good faith to determine whether such services may be provided and the appropriate rates to be charged for such additional services.

ARTICLE 5

THIRD PARTY CREDIT

5.1 To the extent that any of the pipelines included in the Pipeline and Gathering System become prorated and WRPG is required to transport volumes or otherwise provide third party service on such pipelines or related assets such that insufficient capacity exists to provide the minimum levels of services contemplated by Section 4.2 through Section 4.6, any Shortfall Amount that would otherwise be payable by WNR pursuant to Section 7.2 shall be reduced by the aggregate amount of transportation and other fees received by WRPG with respect to the provision of any third party services that resulted in WRPG being unable to provide the minimum levels of services contemplated by Section 4.2 through Section 4.6.

 

7


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

ARTICLE 6

SURCHARGES; FEE ADJUSTMENTS

6.1 Surcharges. If WRPG agrees to make capital expenditures at WNR’s request or if new laws or regulations that affect any of the services WRPG provides to WNR under this Agreement are enacted or promulgated that require WRPG to make material (individually or in the aggregate) capital expenditures, WRPG shall have the right to impose a monthly surcharge on the services provided under this Agreement to cover the costs of such requested capital expenditures or WNR’s share of the costs of complying with these laws or regulations or in certain circumstances to file an increased tariff rate, but only after WRPG has made commercially reasonable efforts to mitigate the effect of such laws or regulations. For non-tariff rate matters, WNR’s share of such costs will be calculated based on the volumes of product WRPG has handled for WNR at the impacted Facility (e.g. – truck rack, storage tank, gathering and injection facility) during the previous three (3) months compared to the total volumes of product handled by WRPG at the impacted facility for the same period.

6.2 Mainline Movement Fee Adjustments. The Mainline Movement Fees shall be adjusted on July 1 of each year at a rate equal to the percentage change in any inflationary index promulgated by the FERC, in accordance with the FERC’s indexing methodology. In the event that the FERC terminates its indexing methodology, such fees shall be adjusted by a percentage equal to the change in the Producer Price Index for Finished Goods, seasonally adjusted, as published by the Department of Labor; provided, however, that in such event no Mainline Movement Fee shall be decreased below the Minimum Mainline Movement Fee in effect as of the Commencement Date.

6.3 Fee Adjustment for Other Services. All fees set forth in this Agreement other than the Mainline Movement Fee will be adjusted annually on July 1 of each year by a percentage equal to the change in the Producer Price Index for Finished Goods, seasonally adjusted, as published by the Department of Labor; provided, however, that no such fee shall be decreased below the applicable initial minimum fee in effect as of the Commencement Date.

ARTICLE 7

SHORTFALL PAYMENTS; CREDITS; PAYMENT

7.1 Base Invoice Amount. WRPG shall invoice WNR for fees owed to WRPG monthly based upon actual mainline movements, truck offloading, gathering and injection and storage services utilized (the “ Base Invoice Amount ”).

7.2 Shortfall Amount. If the Base Invoice Amount is less than the total of the Minimum Mainline Movement Fee, Minimum Truck Offloading Fee, Minimum Gathering and Injection Fee and Minimum Storage Reservation Fee for such month, and taking into account any credit due WNR pursuant to Article 5, WRPG shall also invoice WNR for such difference (the “ Shortfall Amount ).

 

8


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

7.3 Payment Terms. WNR shall pay all amounts due pursuant to Sections 6.1, 7.1, 7.2 and 15.1 within ten (10) calendar days after WNR’s receipt of WRPG’s invoices. Any undisputed past due payments owed by WNR to WRPG shall accrue interest, payable on demand, at a rate equal to the Prime Rate plus two percent per annum from the due date of the payment through the actual date of payment.

7.4 Shortfall Credit. The dollar amount of any Shortfall Amount attributable to mainline movements, truck offloading and gathering and injection services (but not storage) paid by WNR shall be posted as a credit (a “ Credit ”) to WNR’s account and may be applied against any Excess Amounts owed by WNR during any of the succeeding twelve (12) Months. Credits will be applied in the order in which such Credits accrue and any remaining portion of the Credit that is not used by WNR during the succeeding twelve (12) Months shall expire ( e.g ., a Credit that accrues in January 2013 will be available through January 2014, will expire at the end of January 2014, and must be applied prior to applying any Credit which accrued in February 2013).

ARTICLE 8

VOLUME LOSSES

8.1 Each Month, WRPG will invoice WNR for 0.20% of the crude oil volume delivered to WRPG by WNR for such Month as a volume loss at a price equal to such Month’s calendar day average for NYMEX WTI less $8.00 per barrel. Following the end of such Month, WRPG will calculate the actual volume loss and will provide a credit to WNR for the amount of such actual volume loss at a price equal to such Month’s calendar day average for NYMEX WTI less $8.00 per barrel.

ARTICLE 9

NOMINATIONS AND PROCEDURES

9.1 For Mainline Movement Services, WNR shall nominate volumes that it intends to ship in accordance with the procedures specified by WRPG and consistent with past practices.

9.2 For Truck Offloading Services, Gathering and Injection Services and Storage Services, such services shall be at such times and in such quantities as are specified by WNR with sufficient advance notice as may be specified by WRPG; provided that all such services shall be on a priority basis with respect to such services at WRPG’s pipelines and related ancillary facilities.

ARTICLE 10

CONTROL, CUSTODY, TRANSFER AND TITLE

10.1 Control. Control and operation of the Pipeline and Gathering System shall rest exclusively with WRPG. WRPG shall be an independent contractor with respect to all services it provides under this Agreement. WRPG may suspend operations at the Pipeline and Gathering System if WRPG believes that any Person, equipment, or the environment is at risk of injury or damage.

 

9


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

10.2 Custody .

 

  (a) Pipeline Receipts . For volumes received by pipeline, custody of the volumes shall pass to WRPG at the flange where it enters the Pipeline and Gathering System’s receiving line.

 

  (b) Pipeline Deliveries . For volumes delivered by pipeline, custody of the volumes shall pass to WNR at the flange where it exits the delivery line.

 

  (c) Truck . For receipts and deliveries of volumes to or from trucks, custody shall pass at the flange where the hoses at WRPG’s facility interconnect with the truck.

10.3 General . Unless provided otherwise by tariff, each Party shall be solely responsible for any loss, damage or injury to person or property or the environment, arising out of transportation, possession or use of such volumes while in that Party’s custody, subject to the loss allowance provisions or unless otherwise provided herein. Title to all volumes received in the Pipeline and Gathering System by or on behalf of WNR shall remain with WNR at all times. Both Parties acknowledge that this Agreement represents a bailment of such volumes by WNR to WRPG and not a consignment of such volumes, it being understood that WRPG has no authority hereunder to sell or seek purchasers for the volumes of WNR. WNR hereby warrants that it shall, at all times, have good title to and the right to deliver, throughput, store and receive volumes pursuant to the terms of this Agreement.

ARTICLE 11

PRODUCT QUALITY

11.1 WNR warrants that all volumes delivered under this Agreement shall meet the latest applicable pipeline specifications for such volumes and contain no deleterious substances or concentrations of any contaminants that may make it or its components commercially unacceptable in general industry application. WNR shall not deliver to any of the Pipeline and Gathering System any volumes which: (a) would in any way be injurious to any of the Pipeline and Gathering System; (b) would render any of the Pipeline and Gathering System unfit for the proper transportation or storage of similar products; (c) would contaminate or otherwise downgrade the quality of the products transported or stored; (d) may not be lawfully transported or stored at the Pipeline and Gathering System; or (e) otherwise do not meet applicable specifications for such volumes. If, however, there are volumes that do not have such applicable specifications, the specifications shall be mutually agreed upon by the Parties. Should WNR’s commingled volumes not meet or exceed the minimum quality standards set forth in this Agreement, WNR shall be liable for all loss, damage and cost incurred thereby, including damage to volumes of third parties commingled with WNR’s unfit volumes.

11.2 WRPG shall have the right to store compatible products received for WNR’s account with products belonging to WRPG or third parties in WRPG’s fungible products storage tanks. WRPG shall handle WNR’s fungible volumes in accordance with WRPG’s prevailing practices and procedures for handling such products. The quality of all volumes tendered into storage for WNR’s account shall be verified either by WNR’s refinery analysis or supplier’s

 

10


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

certification, such that volumes so tendered shall meet WRPG’s specifications. All costs for such analysis shall be borne solely by WNR. WRPG shall have the right to sample any volumes tendered to the Pipeline and Gathering System hereunder. The cost of such sampling shall be borne solely by WRPG. All volumes returned to WNR shall meet or exceed the product specifications of such volumes when delivered by WNR to WRPG.

11.3 WRPG shall exercise reasonable care to ensure that all volumes delivered by third Parties into commingled storage with WNR’s volumes meet applicable specifications for such product. In the event that WNR’s volumes are commingled with third-party volumes that do not meet or exceed the minimum quality standards set forth in this Agreement, WRPG shall be liable for all loss, damage and cost incurred thereby.

ARTICLE 12

MEASUREMENT

12.1 All quantities of volumes:

 

  (a) received or delivered by or into truck shall be measured and determined based upon the meter readings at each Pipeline and Gathering System, as reflected by delivery tickets or bills of lading, or if such meters are unavailable, by applicable calibration tables;

 

  (b) received and delivered by pipeline shall be measured and determined based upon the meter readings of the pipeline operator, as reflected by delivery tickets, or if such meters are unavailable, by applicable calibration tables, or such other method as may be specified in any applicable tariff.

 

  (c) delivered by book transfer shall be reflected by entries in the books of WRPG.

12.2 Meters and temperature probes shall be calibrated according to applicable API standards; provided, however, that those meters utilized to determine losses for purposes of Article 8 shall be calibrated monthly at WRPG’s sole expense. WNR shall have the right, at its sole expense, and in accordance with procedures at the applicable Pipeline and Gathering System or Facility, to independently certify said calibration. Storage tank gauging shall be performed by WRPG’s personnel. WRPG’s gauging shall be deemed accurate unless challenged by an independent certified gauger. WNR may perform joint gauging at its sole expense with WRPG’s personnel. If WNR should request an independent gauger, such gauger must be acceptable to WRPG, and such gauging shall be at WNR’s sole expense.

ARTICLE 13

TRANSPORTATION SERVICES; PRIORITY

13.1 In order to effectuate the underlying objectives of this Agreement and subject to Section 14.4 below, WRPG agrees as follows:

(a) Throughout the Term of this Agreement, WRPG shall take such action as may be necessary, including filing and continuing to maintain WRPG existing tariffs, to permit WNR to ship the full Minimum Mainline Movement Commitment.

 

11


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

(b) Prior to filing any new tariff with a Governmental Authority, WRPG shall consult with WNR. WRPG shall ensure that any new tariff does not in any way impinge upon or prejudice any of WNR’s rights under the terms of this Agreement.

(c) WRPG shall provide WNR with reasonable advance notice before taking any actions to shut down or reduce throughput rates on any segment of the Pipeline and Gathering System or any gathering line. Upon request by WNR, WRPG shall provide a reasonable explanation for the actions it is taking, and if an action is temporary, inform WNR of the expected duration and work cooperatively with WNR to eliminate or minimize any disruption to WNR’s activities.

ARTICLE 14

REGULATORY MATTERS

14.1 WNR and WRPG shall not, and shall cause their respective affiliates to not, commence or support any tariff filing, application, protest, complaint or other proceeding before the FERC or any other applicable state regulatory agency for the purpose of requesting the FERC or such other agency to accept or set transportation rates or rules that would be inconsistent with the terms of this Agreement, provided that WNR shall have the right to challenge any proposed changes in WRPG base tariff rates or rules to the extent the changes are inconsistent with the FERC’s indexing methodology or other rate changing methodologies.

14.2 In the event that the FERC or any other applicable state or federal regulatory agency takes any adverse action with respect to a WRPG tariff maintained pursuant to and in accordance with this Agreement, WRPG shall diligently defend such tariff, including appealing any such adverse action. If any such adverse action is not stayed pending appeal, or, if a final, non-appealable decision is ultimately issued by the FERC or any other applicable state regulatory agency and confirmed by the applicable court having final authority in the matter that requires WRPG to amend any tariff, and such adverse action or tariff amendment is fundamentally contradictory to the provisions of this Agreement, then the Parties shall negotiate in good faith to amend, either on a temporary or permanent basis, this Agreement to comply with any such adverse action or such final, non-appealable judgment but still retain the protections and structures, as well as the economic substance, reflected by its current terms to the maximum extent permissible. In the event the Parties are unable to reach agreement with respect to such an amendment within a reasonable period of time after the taking of such adverse action or the issuance of such final judgment, which shall not be less than thirty (30) days, then either Party may terminate this Agreement.

14.3 WNR hereby agrees it will: (i) take all such actions and do all such things as WRPG shall reasonably request in connection with its applications for, and the processing of any certificates, approvals and authorizations of Governmental Authorities that are necessary for WRPG to perform its obligations under this Agreement; (ii) at all times support the transportation rates specified in this Agreement as a rate that it has agreed to pay; (iii) not

 

12


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

directly or indirectly take any action that indicates a lack of support for the transportation rate and terms agreed to in this Agreement; (iv) not file any action, protest or complaint with FERC or any other applicable state regulatory agency with respect to the WRPG tariffs on file as of the date of this Agreement; and (v) not file any complaint or other action at FERC or any other applicable state regulatory agency with respect to the WRPG tariffs currently on file, including any increased rates based on the inflationary index referred to in this Agreement, except to the extent the changes are inconsistent with the FERC’s indexing methodology or other rate changing methodologies.

14.4 Each Party’s obligations under the terms and provisions of this Agreement, including but not limited to Article 13 and this Article 14, shall be subject to compliance with all present and future Applicable Laws of any Governmental Authority having jurisdiction.

ARTICLE 15

TAXES

15.1 WNR shall pay or cause to be paid all taxes, (other than (a) income taxes, gross receipt taxes, personalty and other property taxes and similar taxes) and non-routine, non-recurring, extraordinary regulatory and third-party fees imposed by any federal, state or local government that WRPG incurs on WNR’s behalf for the services provided by WRPG under this Agreement. If WRPG is required to pay any of the foregoing, WNR shall promptly reimburse WRPG in accordance with the payment terms set forth in this Agreement.

ARTICLE 16

LIMITATION ON LIABILITY

16.1 Notwithstanding anything to the contrary contained herein, except to the extent incorporated in any applicable rate or rule tariff, neither Party shall be liable or responsible to the other Party or such other Party’s affiliated Persons for any consequential, incidental, or punitive 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 that the foregoing limitation is not intended and shall not affect special damages imposed in favor of unaffiliated Persons that are not Parties to this Agreement. THE PARTIES AGREE THAT THE RESTRICTIONS AND LIMITATIONS ON DAMAGES CONTAINED HEREIN DO NOT DEPRIVE THE PARTIES OF MINIMUM ADEQUATE REMEDIES UNDER TEXAS UCC SECTION 2-719 OR OTHER APPLICABLE LAW. In addition, WRPG shall not be responsible for any loss, damage, demurrage, or expense due to delay in loading or unloading of WNR’s volumes except to the extent due to WRPG’s gross negligence or willful misconduct.

ARTICLE 17

INDEMNITIES

17.1 Notwithstanding anything to the contrary contained herein, except to the extent incorporated in any applicable Rate or Rule Tariff, WRPG shall release, defend, protect, indemnify, and hold harmless WNR from and against any and all demands, claims (including

 

13


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

third-party claims), losses, costs, suits, or causes of action (including, but not limited to, any judgments, losses, liabilities, fines, penalties, expenses, interest, reasonable legal fees, costs of suit, and damages, whether in law or equity and whether in contract, tort, or otherwise) for or relating to (i) personal or bodily injury to, or death of the employees of WNR and, as applicable, its Carriers, customers, representatives, and agents, (ii) loss of or damage to any property, products, material, and/or equipment belonging to WNR and, as applicable, its Carriers, customers, representatives, and agents, and each of their respective affiliates, contractors, and subcontractors (except for those volume losses provided for in Article 8), and (iii) loss of or damage to any other property, products, material, and/or equipment of any other description (except for those volume losses provided for in Article 8), and/or personal or bodily injury to, or death of any other person or persons; and with respect to clauses (i) through (iii) above, which is caused by or resulting in whole or in part from the acts and omissions of WRPG in connection with the ownership or operation of the Pipeline and Gathering System and Facility and the services provided hereunder, and, as applicable, its carriers, customers (other than WNR), representatives, and agents, or those of their respective employees with respect to such matters; PROVIDED THAT WRPG SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS WNR FROM AND AGAINST ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF WNR.

17.2 Notwithstanding anything to the contrary contained herein, except to the extent incorporated in any applicable Rate or Rule Tariff, WNR shall release, defend, protect, indemnify, and hold harmless WRPG and, and each of its respective affiliates, officers, directors, shareholders, agents, employees, successors-in-interest, and assignees from and against any and all demands, claims (including third-party claims), losses, costs, suits, or causes of action (including, but not limited to, any judgments, losses, liabilities, fines, penalties, expenses, interest, reasonable legal fees, costs of suit, and damages, whether in law or equity and whether in contract, tort, or otherwise) for or relating to (i) personal or bodily injury to, or death of the employees of WRPG and, as applicable, its carriers, customers, representatives, and agents; (ii) loss of or damage to any property, products, material, and/or equipment belonging to WRPG and, as applicable, its carriers, customers, representatives, and agents, and each of their respective affiliates, contractors, and subcontractors (except for those volume losses provided for in Article 8); (iii) loss of or damage to any other property, products, material, and/or equipment of any other description (except for those volume losses provided for in Article 8), and/or personal or bodily injury to, or death of any other person or persons; and with respect to clauses (i) through (iii) above, which is caused by or resulting in whole or in part from the acts and omissions of WNR, in connection with WNR’s and its customers’ use of the Pipeline and Gathering System and Facility and the services provided hereunder and WNR’s volumes stored hereunder, and, as applicable, its Carriers, customers, representatives, and agents, or those of their respective employees with respect to such matters; PROVIDED THAT WNR SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS WRPG FROM AND AGAINST ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF WRPG.

 

14


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

ARTICLE 18

INSURANCE

18.1 At all times during the Term of this Agreement and for a period of two (2) years after termination of this Agreement for any coverage maintained on a “claims-made” basis, WNR and/or its Carrier (if applicable) shall maintain at their expense the insurance in the amounts as may be specified in writing by WRPG to WNR. WNR shall require that its Carriers provide such insurance, and WNR shall be liable to WRPG for their failure to do so. Such insurance shall provide coverage to WRPG and such policies, other than Worker’s Compensation Insurance, shall include WRPG as an Additional Insured. Each policy shall provide that it is primary to and not contributory with any other insurance, including any self-insured retention, maintained by WRPG (which shall be excess) and each policy shall provide the full coverage required by this Agreement. All such insurance shall be written with carriers and underwriters acceptable to WRPG, and eligible to do business in the states where the Pipeline and Gathering System and Facility are located and having and maintaining an A.M. Best financial strength rating of no less than “A-” and financial size rating no less than “VII”; provided that WNR and/or the Carrier may procure worker’s compensation insurance from the state fund of the state where the Pipeline and Gathering System and Facility are located.

18.2 All such policies must be endorsed with a Waiver of Subrogation endorsement, effectively waiving rights of recovery under subrogation or otherwise, against WRPG, and shall contain where applicable, a severability of interest clause and a standard cross liability clause.

18.3 Upon execution of this Agreement and prior to the operation of any equipment by WNR, Carrier or its authorized drivers at the Pipeline and Gathering System and Facility, WNR and/or Carrier will furnish to WRPG, and at least annually thereafter (or at any other times upon request by WRPG) during the Term of this Agreement (and for any coverage maintained on a “claims-made” basis, for two (2) years after the termination of this Agreement), insurance certificates and/or certified copies of the original policies to evidence the insurance required herein, including on behalf of Carrier’s contractors providing authorized vehicles or authorized drivers. Such certificates shall be in the form of the “Accord” Certificate of Insurance, and reflect that they are for the benefit of WRPG and shall provide that there will be no material change in or cancellation of the policies unless WRPG is given at least thirty (30) days prior written notice. Certificates providing evidence of renewal of coverage shall be furnished to WRPG prior to policy expiration.

18.4 WNR and/or Carrier shall be solely responsible for any deductibles or self-insured retention.

18.5 WRPG may require each Carrier coming into the Pipeline and Gathering System or Facility to enter into a customary Access Agreement with WRPG and to carry the levels and types of insurance, with appropriate endorsements and certificates, specified for WNR hereunder.

 

15


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

ARTICLE 19

GOVERNMENT REGULATIONS

19.1 Product Certification . Each Party certifies that none of the products covered by this Agreement were derived from crude petroleum, petrochemical, or gas which was produced or withdrawn from storage in violation of any federal, state or other governmental law, nor in violation of any rule, regulation or promulgated by any governmental agency having jurisdiction in the premises.

19.2 Applicable Law . The Parties are entering into this Agreement in reliance upon and shall fully comply with all Applicable Law which directly or indirectly affects the products throughput hereunder, or any receipt, throughput delivery, transportation, handling or storage of products hereunder or the ownership, operation or condition of the Pipeline and Gathering System and Facility. Each Party shall be responsible for compliance with all Applicable Laws associated with such Party’s respective performance hereunder and the operation of such Party’s facilities. In the event any action or obligation imposed upon a Party under this Agreement shall at any time be in conflict with any requirement of Applicable Law, then this Agreement shall immediately be modified to conform the action or obligation so adversely affected to the requirements of the Applicable Law, and all other provisions of this Agreement shall remain effective.

19.3 New Or Changed Applicable Law . If during the Term, any new Applicable Law becomes effective or any existing Applicable Law or its interpretations is materially changed, which change is not addressed by another provision of this Agreement and which has a material adverse economic impact upon a Party, either Party, acting in good faith, shall have the option to request renegotiation of the relevant provisions of this Agreement with respect to future performance. The Parties shall then meet to negotiate in good faith amendments to this Agreement that will conform to the new Applicable Law while preserving the Parties’ economic, operational, commercial and competitive arrangements in accordance with the understandings set forth herein.

ARTICLE 20

TERMINATION

20.1 A Party shall be in default under this Agreement if:

(a) the Party materially breaches any provision of this Agreement and such breach is not cured within twenty (20) Business Days after notice thereof (which notice shall describe such breach in reasonable detail) is received by such Party; or

(b) the Party (i) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Applicable Law, or has any such petition filed or commenced against it which is not withdrawn or dismissed within thirty (30) days; (ii) makes an assignment or any general arrangement for the benefit of creditors; (iii) otherwise becomes bankrupt or insolvent (however evidenced); or (iv) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets which is not withdrawn or dismissed within thirty (30) days.

 

16


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

If any of the Parties is in default as described above, then the non-defaulting Party may: (i) terminate this Agreement upon notice to the defaulting Parties; (ii) withhold any payments due to the defaulting Parties under this Agreement; and/or (iii) pursue any other remedy at law or in equity.

20.2 WNR shall, upon expiration or termination of this Agreement, promptly remove all of its products including any downgraded and interface product from the Pipeline and Gathering System and Facility within thirty (30) days of such termination or expiration to the extent such removal is possible within this time frame. In the event all of the product is not removed within such thirty (30) day period, WNR shall be assessed storage fees to all products held in storage more than thirty (30) days beyond the termination or expiration of this Agreement until such time WNR’s entire product is removed from the Pipeline and Gathering System and Facility.

20.3 WNR shall, upon expiration or termination of this Agreement, promptly remove any and all of its owned equipment and restore the Pipeline and Gathering System and Facility to their condition prior to the installation of such equipment.

ARTICLE 21

RIGHT TO ENTER INTO NEW AGREEMENT; CAPACITY EXPANSION

21.1 Upon termination of this Agreement for reasons other than (a) a default by WNR pursuant to Section 20.1 or (b) any other termination of this Agreement initiated by WNR, WNR shall have the right to require WRPG to enter into a new Pipeline and Gathering Services agreement with WNR that (y) is consistent with the terms and objectives set forth in this Agreement and (z) has commercial terms that are, in the aggregate, substantially similar to fair market value terms as would be agreed by similarly-situated parties negotiating at arm’s length; provided, however; that the term of any such new transportation services agreement shall not extend beyond the term in effect under the previous Agreement at the time of Termination.

21.2 In the event that WRPG proposes to enter into a Pipeline and Gathering Services agreement with a third party upon the termination of this Agreement for reasons other than (a) a default pursuant to Section 20.1 by WNR or (b) any other termination of this Agreement initiated by WNR, WRPG shall give WNR thirty (30) days’ prior written notice of any proposed new Pipeline and Gathering Services agreement with a third party, including (x) details of all of the material terms and conditions thereof and (y) a thirty (30)-day period (beginning upon WNR’s receipt of such written notice) (the “ First Offer Period ”) in which WNR may make a good faith offer to enter into a new Pipeline and Gathering Services agreement with WRPG (the “ Right of First Refusal ”). If WNR makes an offer on terms no less favorable to WRPG than the third-party offer with respect to such Pipeline and Gathering Services agreement during the First Offer Period, then WRPG shall be obligated to enter into a Pipeline and Gathering Services agreement with WNR on the terms set forth in the notice. If WNR does not exercise its Right of First Refusal in the manner set forth above, WRPG may, for the next thirty (30) days, proceed with the negotiation of the third party Pipeline and Gathering Services agreement. If WRPG and the

 

17


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

party with which it is negotiating reach and sign a definitive agreement as to all material terms of a third party Pipeline and Gathering Services Agreement (the “ Definitive Agreement ”), WRPG shall immediately give WNR a full copy of the Definitive Agreement including all schedules and exhibits. WNR shall have thirty (30) days from the date of such notice (the “ Second Offer Period ”) to enter into an agreement with WRPG on the same terms and conditions contained in the Definitive Agreement.

21.3 If WRPG proposes the construction or acquisition of any new pipeline that connects to its Pipeline and Gathering System, any expansion or enhancement of capacity on any existing Pipeline on the Pipeline and Gathering System or any construction of new or the expansion of existing storage capacity associated with the Pipeline and Gathering System, then:

(a) WRPG shall give prior written notice of such proposal to WNR; and

(b) WNR will have a right of first refusal to reserve some portion or all of the additional throughput capacity or storage capacity on commercial terms that are equal or more favorable to WRPG than any commercial terms offered to WRPG by a third party.

ARTICLE 22

FORCE MAJEURE

22.1 As soon as possible upon the occurrence of a Force Majeure event, WRPG shall provide WNR with written notice of the occurrence of the event identifying the affected portion of the Pipeline and Gathering System and Facility (a “ Force Majeure Notice ”). WRPG shall identify in such Force Majeure Notice the approximate length of time that WRPG reasonably believes in good faith such Force Majeure shall continue (the “ Force Majeure Period ”). If WRPG 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, then at any time after WRPG delivers such Force Majeure Notice, either Party may terminate that portion of this Agreement relating to the affected portion of the Pipeline and Gathering System or Facility, but only upon delivery to the other Party of a notice (a “ Termination Notice ”) at least twelve (12) Months prior to the effectiveness of such termination; provided, however, that such Termination Notice shall be deemed cancelled and of no effect if the Force Majeure Period ends prior to the expiration of such twelve (12)-Month period. During the pendency of any Force Majeure Period, WRPG shall use Reasonable Efforts to continue to perform its obligations under this Agreement and to minimize or eliminate the adverse effects of such Force Majeure; provided however that WRPG shall not be required to settle any strikes or labor disputes by acceding to the demands of the opposing party or parties.

22.2 If, during the pendency of a Force Majeure event, WRPG is unable to meet the Minimum Commitments set forth in this Agreement, then affected commitments hereunder shall be proportionately reduced.

22.3 If this Agreement is terminated as to a Pipeline and Gathering System or Facility under this Article 22, then WNR’s Minimum Commitments shall be adjusted to the Adjusted Minimum Commitments for the remaining unaffected portion of the Pipeline and Gathering System or Facility.

 

18


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

22.4 For the avoidance of doubt, neither Party may exercise its right under this Article 22 to terminate this Agreement as a result of a Force Majeure with respect to any portion of the Pipeline and Gathering System or facilities that has been unaffected by, or has been restored to working order since, the applicable Force Majeure, including pursuant to a Restoration under Section 23.2(b).

ARTICLE 23

CAPABILITIES OF PIPELINE SYSTEM

23.1 Interruptions of Service. WRPG shall use reasonable commercial efforts to minimize the interruption of service on the Pipeline and Gathering System. WRPG shall promptly inform WNR of any anticipated interruption of service on any segment of the Pipeline and Gathering System affecting WRPG’s ability to receive crude oil or other petroleum products, as applicable, at any origin on the Pipeline and Gathering System or gathering pipeline connected to the Pipeline and Gathering System or to deliver crude oil or other petroleum products, as applicable, to Refineries, including relevant information about the nature, extent, cause and expected duration of the interruption and the actions WRPG is taking to resume full operations, provided that WRPG shall not have any liability for any failure to notify, or delay in notifying, WNR of any such matters except to the extent WNR has been materially prejudiced or damaged by such failure or delay.

23.2 Maintenance and Repair Standards.

(a) Subject to Force Majeure, interruptions for routine repair and maintenance consistent with applicable customary crude oil and other petroleum product pipeline standards, scheduling requirements as set forth in the applicable tariffs and any requirements of Applicable Law, WRPG shall accept for shipment on the Pipeline and Gathering System products that meet the quality specifications to which the Parties have agreed or of any applicable tariff. Further, WRPG shall maintain and repair all portions of the Pipeline and Gathering System in accordance with pipeline industry standards and in a manner which allows each Pipeline to be capable, subject to Force Majeure, of shipping, storing and delivering volumes of crude oil and other petroleum products which are no less than the Minimum Commitments for such Pipeline.

(b) If for any reason, including without limitation a Force Majeure event, the throughput capacity of any Pipeline and Gathering System or Facility falls below its Minimum Commitments, then (Y) during such period of reduced throughput WNR’s obligation to ship the Minimum Commitments shall be reduced as described in Article 22 above and (Z) within a reasonable period of time after the commencement of such reduction, WRPG shall make repairs to and/or replace the affected portion of the Pipeline and Gathering System or Facility to restore the capacity of such Pipeline and Gathering System or Facility such that it is capable of transporting the Minimum Commitments applicable to such Pipeline and Gathering System or Facility (collectively “ Restoration ”). Except as provided in Section 23.3 and 23.4, all such Restoration shall be at WRPG’s cost and expense unless the damage creating the need for such repairs was caused by the negligence or willful misconduct of WNR, its employees, agents, representatives or customers.

 

19


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

23.3 Capacity Resolution . In the event of (i) the failure of WRPG to maintain any Pipeline such that it can support and transport the Minimum Commitments, then either Party shall have the right to call a meeting between executives of both Parties by providing at least two (2) Business Days’ advance written notice. Any such meeting shall be held at a mutually agreeable location and will be attended by executives of both Parties each having sufficient authority to commit his or her respective Party to a Capacity Resolution (hereinafter defined). At the meeting, the Parties will negotiate in good faith with the objective of reaching a joint resolution for the Restoration of capacity on the affected portion of the Pipeline and Gathering System which will, among other things, specify steps to be taken by WRPG to fully accomplish Restoration and the deadlines by which the Restoration must be completed (the “ Capacity Resolution ”). Without limiting the generality of the foregoing, the Capacity Resolution shall set forth an agreed upon time schedule for the Restoration activities. Such time schedule shall be reasonable under the circumstances, consistent with customary pipeline transportation industry standards and shall take into consideration WRPG’s economic considerations relating to costs of the repairs and WNR’s requirements concerning the operation of the Refineries. In the event that WNR’s economic considerations justify incurring additional costs to restore the Pipeline and Gathering System in a more expedited manner than the time schedule determined in accordance with the preceding sentence, WNR may require WRPG to expedite the Restoration to the extent reasonably possible, subject to WNR’s payment, in advance, of the estimated incremental costs to be incurred as a result of the expedited time schedule. Upon completion, WNR shall pay the difference between the actual portion of Restoration costs to be paid by WNR pursuant to this Section 23.3 and the estimated amount paid under the preceding sentence within thirty (30) days after receipt of WRPG’s invoice therefor, or, if appropriate, WRPG shall pay WNR the excess of the estimate paid by WNR over WRPG’s actual costs as previously described within thirty (30) days after completion of the Restoration.

23.4 WNR’s Right To Cure . If at any time after the occurrence of a Partnership Change of Control or a sale of a Refinery, WRPG (a) refuses or fails to meet with WNR within the period set forth in Section 23.3, (b) fails to agree to perform a Capacity Resolution in accordance with the standards set forth in Section 23.3 or (iii) fails to perform its obligations in compliance with the terms of a Capacity Resolution, WNR may, as its sole remedy for any breach by WRPG of any of its obligations under Section 23.3, require WRPG to complete a Restoration of the affected portion of the Pipeline and Gathering System. Any such Restoration required under this Section 23.4 shall be completed by WRPG at WNR’s cost. WRPG shall use commercially reasonable efforts to continue to provide transportation of crude oil and other petroleum products tendered by WNR under the applicable tariffs while such Restoration is being completed. Any work performed by WRPG pursuant to this Section 23.4 shall be performed and completed in a good and workmanlike manner consistent with applicable pipeline industry standards and in accordance with all applicable laws, rules and/or regulations. Additionally, during such period after the occurrence of (x) a Partnership Change of Control or (y) a sale of a Refinery, WNR may exercise any remedies available to it under this Agreement (other than termination), including the right to immediately seek temporary and permanent injunctive relief for specific performance by WRPG of the applicable provisions of this Agreement, including, without limitation, the obligation to make Restorations described herein.

23.5 Commingled Storage . All storage and throughput of WNR’s volumes shall be on a fungible commingled basis, and WRPG may commingle such volumes with products of like

 

20


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

grade and kind. All tank heels shall be allocated among all storage users on a pro rata basis. Subject to any applicable tariff and Article 13 and 14, WRPG shall have the right to enter into arrangements with third parties to throughput and store volumes at each Pipeline and Gathering System and Facility, provided however, that, subject to any applicable tariff and Article 13 and 14, WRPG shall not enter into any third party arrangements that would restrict or limit the ability of WNR to throughput or store the Minimum Mainline Movement Commitment or Minimum Storage Reservation Commitment each Month without proration or allocation, on reasonable schedules consistent with WNR’s requirements, and to receive the services provided herein.

23.6 Dedicated Storage . In the event that the Parties determine to use dedicated storage tanks during the Term of this Agreement, such storage tanks and capacities shall be dedicated and used exclusively for the storage and throughput of WNR’s product. For those dedicated tanks, WNR shall be responsible for providing all tank heels required for operation of such tanks.

ARTICLE 24

SUSPENSION OF REFINERY OPERATIONS

24.1 In the event that WNR decides to permanently or indefinitely suspend refining operations, in full or in part, at any of WNR’s Refineries for a period that shall continue for at least twelve (12) consecutive Months, WNR may provide written notice to WRPG of WNR’s intent to terminate or proportionately reduce, as applicable, that part of this Agreement relating to the affected portion of the Pipeline and Gathering System or other facilities (the “ Suspension Notice ”). Such Suspension Notice shall be effective upon the expiration of the twelve (12)-Month period following the date such notice is sent (the “ Notice Period ”). If, however, WNR provides notice to WRPG, more than two Months prior to the expiration of the Notice Period, of its intent to resume operations at the applicable Refinery or portion thereof, then the Suspension Notice shall be deemed revoked and the applicable portion of this Agreement shall continue in full force and effect as if such Suspension Notice had never been delivered.

24.2 During the Notice Period:

(a) WRPG may provide transportation or storage services utilizing the affected portions of the Pipeline and Gathering System pursuant to one or more third-party agreements without the consent of WNR; and

(b) WNR’s Minimum Commitments shall be reduced to the extent of third party usage of such capacity provided that WNR shall still have access on a priority basis to the extent there is available capacity.

24.3 Upon the expiration of the Notice Period, WNR’s Minimum Commitments shall be adjusted to the Adjusted Minimum Commitments for the remaining unaffected portion of the Pipeline and Gathering System or facilities.

ARTICLE 25

ASSIGNMENT; PARTNERSHIP CHANGE OF CONTROL

25.1 WNR shall not assign any of its obligations hereunder without WRPG’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed;

 

21


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

provided , however ; that WNR may assign this Agreement, without WRPG’s consent, (a) to an affiliate; provided such assignment shall not relieve WNR of its obligations under this Agreement and (b) in connection with a sale by WNR of a Refinery associated with a portion of the Pipeline and Gathering System so long as the transferee: (i) agrees to assume all of WNR’s obligations under this Agreement with respect to such portion of the Pipeline and Gathering System; and (ii) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by WRPG in its reasonable judgment.

25.2 WRPG shall not assign any of its rights or obligations under this Agreement without WNR’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided , however, that (i) WRPG may assign this Agreement, without WNR’s consent, (a) to an affiliate; provided such assignment shall not relieve WRPG of its obligations under this Agreement and (b) in connection with a sale by WRPG of all or a portion of the Pipeline and Gathering System so long as the transferee: (A) agrees to assume all of WRPG’s obligations under this Agreement with respect to such portion of the Pipeline and Gathering System; (B) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by WNR in its reasonable judgment; and (C) is not a competitor of WNR; and (ii) WRPG shall be permitted to make a collateral assignment of this Agreement solely to secure working capital financing for WRPG.

25.3 If either WNR or WRPG assigns its rights or obligations under this Agreement relating to a specific portion of the Pipeline and Gathering System (other than to an affiliate), then:

(a) the Minimum Commitments with respect to the remaining portion of the Pipeline and Gathering System shall be converted to the Adjusted Minimum Commitments; and

(b) both WNR’s and WRPG’s obligations shall continue with respect to the remaining portion of the Pipeline and Gathering System.

25.4 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.

25.5 WNR’s obligations hereunder shall not terminate in connection with a Partnership Change of Control, provided however, that in the case of a Partnership Change of Control, WNR shall have the option to extend the Term of this Agreement as provided in Article 3. WRPG shall provide WNR with notice of any Partnership Change of Control at least sixty (60) days prior to the effective date thereof.

ARTICLE 26

NOTICE

26.1 All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (i) if by transmission by facsimile or hand

 

22


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

delivery, when delivered; (ii) 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; (iii) 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 (iv) if by e-mail one Business Day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows (or to such other address or to such other person as either Party will have last designated by notice to the other Party):

If to WNR, to:

Attn: President – Refining and Marketing

Western Refining Company, L.P.

Western Refining Southwest, Inc.

Western Refining Wholesale, Inc.

1250 W. Washington Street, Suite 101

Tempe, Arizona 85281

Facsimile: 602-683-5736

With a copy to:

Attn: Office of the General Counsel

Western Refining Company, L.P.

Western Refining Southwest, Inc.

Western Refining Wholesale, Inc.

1250 W. Washington Street, Suite 101

Tempe, Arizona 85281

Facsimile: 602-797-2650

If to WRPG, to:

Attn: Senior Vice President – Operations

Western Refining Pipeline, LLC

1250 W. Washington Street, Suite 101

Tempe, Arizona 85281

Facsimile: 602-683-5737

With a copy to:

Attn: Office of the General Counsel

Western Refining Pipeline, LLC

1250 W. Washington Street, Suite 101

Tempe, Arizona 85281

Facsimile: 603-797-2650

 

23


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

ARTICLE 27

CONFIDENTIAL INFORMATION

27.1 The Parties understand and agree that the terms and conditions of this Agreement, all documents referred to herein and all communications between the Parties regarding this Agreement and the Services (collectively, the “ Confidential Information ”) are confidential, shall only be used in connection with this Agreement and shall not, without the other Party’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, be disclosed by a Party to a third party at any time other than to: (i) a Party’s parent, affiliate or subsidiary entities, and their respective officers, directors, employees, accountants, attorneys or consultants; (ii) as may be necessary to enforce their respective rights under this Agreement; (iii) to the extent necessary or required by Laws, legal process, order of court or other judicial body, or pursuant to any government agency, regulatory body or security exchange; or (iv) to a purchaser or potential purchaser of all or substantially all of a Party’s assets or interests or to a potential purchaser of the assets or interest in any Pipeline and Gathering System or Facility which is under a written obligation of confidentiality to the Party disclosing such information and which agrees to be bound by the non-disclosure provisions herein. Notwithstanding anything herein to the contrary, the Parties may disclose the existence of and general terms regarding the Agreement to third parties, though not specific terms such as pricing, without the need for such consent. Confidential Information shall not include information which is or becomes available to the general public without fault of the receiving Party, was in the possession of the receiving Party on a non-confidential basis prior to receipt from the disclosing Party, is obtained by the receiving Party without confidentiality obligations, or is independently developed by the receiving Party without reference to or use of the disclosing Party’s Confidential Information. The obligations in this Article 27 shall survive the termination of this Agreement for a period of two (2) years.

ARTICLE 28

MISCELLANEOUS

28.1 Modification; Waiver . This Agreement may be terminated, amended or modified only by a written instrument executed by the Parties. Any of the terms and conditions of this Agreement may be waived in writing at any time by the Party entitled to the benefits thereof. No waiver of any of the terms and conditions of this Agreement, or any breach thereof, will be effective unless in writing signed by a duly authorized individual on behalf of the Party against which the waiver is sought to be enforced. No waiver of any term or condition or of any breach of this Agreement will be deemed or will constitute a waiver of any other term or condition or of any later breach (whether or not similar), nor will such waiver constitute a continuing waiver unless otherwise expressly provided.

28.2 Entire Agreement . This Agreement, together with the Schedules, constitutes the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings of the Parties in connection therewith.

28.3 Governing Law; Jurisdiction . This Agreement shall be governed by the laws of the State of Texas without giving effect to its conflict of laws principles. In the event any dispute between the Parties is not resolved by arbitration as set forth herein, each Party hereby

 

24


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

irrevocably submits to the exclusive jurisdiction of any federal court of competent jurisdiction situated in the United States District Court for the Southern District of Texas sitting in Houston, Texas, or if such federal court declines to exercise or does not have jurisdiction, in the district court of Harris County, Texas. The Parties expressly and irrevocably submit to the jurisdiction of said Courts and irrevocably waive any objection which they may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of or relating to this Agreement brought in such Courts, irrevocably waive any claim that any such action, suit or proceeding brought in any such Court has been brought in an inconvenient forum and further irrevocably waive the right to object, with respect to such claim, action, suit or proceeding brought in any such Court, that such Court does not have jurisdiction over such Party. The Parties hereby irrevocably consent to the service of process by registered mail, postage prepaid, or by personal service within or without the State of Texas. Nothing contained herein shall affect the right to serve process in any manner permitted by law.

28.4 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.

28.5 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.

28.6 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.

28.7 ARBITRATION. THE PARTIES AGREE THAT TO THE EXTENT ANY DISPUTE DOES NOT INVOLVE DISPUTED AMOUNTS IN EXCESS OF $1,000,000, ANY SUCH DISPUTE RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE DECIDED BY CONFIDENTIAL, BINDING NEUTRAL ARBITRATION AS PROVIDED BY TEXAS LAW TO BE CONDUCTED IN ACCORDANCE WITH THE JAMS STREAMLINED ARBITRATION RULES AND PROCEDURES BY A SINGLE NEUTRAL ARBITRATOR. THE PARTIES ARE GIVING UP ANY RIGHTS EACH MIGHT POSSESS TO DISCOVERY AND APPEAL OF SUCH DISPUTES AND TO HAVE SUCH DISPUTES LITIGATED IN A COURT OR BY JURY TRIAL. THE AGREEMENT TO THIS PROVISION IS VOLUNTARY. Unless the Parties agree otherwise, the place of any arbitration shall be Harris County, Texas. The arbitrators shall issue a reasoned written decision and award which shall not include any damages which are prohibited hereunder. The obligations of the Parties under this Section shall survive the expiration or termination of this Agreement. In the event that any dispute involves amounts in excess of $1,000,000, the Parties may litigate the dispute in accordance with the remaining provisions of this Agreement.

 

25


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

28.8 WAIVER OF JURY TRIAL . EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDINGS RELATING TO THIS AGREEMENT OR ANY PERFORMANCE OR FAILURE TO PERFORM OF ANY OBLIGATION HEREUNDER.

28.9 Schedules . Each of the Schedules attached hereto and referred to herein is hereby incorporated in and made a part of this Agreement as if set forth in full herein.

[SIGNATURE PAGES FOLLOW]

 

26


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

IN WITNESS WHEREOF , the Parties hereto have duly executed this Agreement as of the date first written above.

 

WESTERN REFINING COMPANY, L.P.
By:   Western Refining GP, LLC, its general partner
By:  

/s/ Mark J. Smith

Name:   Mark J. Smith
Title:   Executive Vice President
WESTERN REFINING SOUTHWEST, INC.
By:  

/s/ Gary R. Dalke

Name:   Gary R. Dalke
Title:   Chief Financial Officer
WESTERN REFINING PIPELINE, LLC
By:  

/s/ Lowry Barfield

Name:   Lowry Barfield
Title:   Senior Vice President – Legal, General Counsel and Secretary

Signature Page – Pipeline Agreement

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Schedule 1.1

Pipeline and Gathering System

A. Four Corners System

The Four Corners System includes:

 

  1. San Juan 6-inch Pipeline, a six-inch crude oil pipeline approximately 18 miles in length connecting the Bloomfield terminal operated by Western Refining Terminals, Inc. (“WRT”) to the Bisti crude oil station;

 

  2. West 6-inch Pipeline, a six-inch crude oil pipeline approximately 77 miles in length connecting the Bisti crude oil station to WNR’s Gallup Refinery;

 

  3. TexNew Mex 16” Pipeline Segment, a 16-inch crude oil pipeline approximately 43 miles in length connecting the Bisti crude oil station to the Star Lake, New Mexico crude oil station;

 

  4. East 6-inch Pipeline, a six-inch crude oil pipeline approximately 105 miles in length connecting the Pettigrew crude oil station to the Star Lake, New Mexico crude oil station and WNR’s Gallup Refinery;

 

  5. Wingate 4-inch NGL Pipeline, a four-inch NGL pipeline approximately 14 miles in length connecting Phillips 66’s NGL plant located in Gallup, New Mexico to WNR’s Gallup Refinery; and

 

  6. Other. The Bisti, Star Lake, Lybrook, and Pettigrew Stations combine to have (i) 18 crude oil storage and breakout tanks with a total combined capacity of 356,449 barrels; (ii) four truck receipt locations and (iii) a connection point with the Navajo Nation Oil and Gas Company Running Horse pipeline.

B. Permian/Delaware Basin System

The Permian/Delaware Basin System includes:

 

  1. Main 12-inch Pipeline, a 12-inch crude oil pipeline approximately 20 miles in length connecting the Mason Station crude oil facility to the T Station crude oil facility;

 

  2. West 10-inch Pipeline and CR-285 Crude Oil Station, a 10-inch crude oil pipeline approximately 7 miles in length extending westward from the T Station crude oil facility and a two-bay truck loading and unloading location with associated storage;

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

  3. East 10-inch Pipeline and CR-1 Crude Oil Station, a 10-inch crude oil pipeline approximately 12 miles in length extending eastward from the T Station crude oil facility and a two-bay truck loading and unloading location and associated storage permitting;

 

  4. T Station Crude Oil Facility, a crude oil station including a staging tank;

 

  5. Mason Station Crude Oil Facility, a crude oil facility including two 80,000 barrel crude oil storage tanks, a seven-bay truck loading and unloading location and nine automatic custody transfer units;

 

  6. McCamey Crude Oil Station, located in Upton County, Texas including a four-bay truck rack and crude receipt tanks; and

 

  7. Riverbend 4-inch Gathering Pipeline, a four-inch crude oil pipeline approximately 2.5 miles in length connecting Riverbend crude oil tanks in Crane County, Texas owned by third parties to the Kinder Morgan Wink pipeline.

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Schedule 4.2

Minimum Mainline Movement Commitment and Minimum Mainline Movement Fee

A. Permian/Delaware Basin System

 

Service

   Mainline Movement Fee
(per barrel)
     Minimum Mainline
Movement Commitment

(barrels per month)
 

Mainline movement / Field to Mason Station

   $ 1.400         828,854   

B. Four Corners System

 

Service

   Mainline Movement Fee
(per barrel)
    Minimum Mainline
Movement Commitment
(barrels per month)
 

Pettigrew Station to Gallup refinery

   $ *     17,142   

Lybrook Station to Gallup refinery

   $ *     102,853   

Star Lake to Gallup refinery

   $ *     234,695   

Chaco Station to Bisti Station

   $ *     11,357   

Bisti Station to Gallup refinery

   $ *     254,741   

Bisti Injection Station to Gallup refinery

   $ *     94,900   

Blmfld Prod Term. To Bisti Inject. Or reverse

   $ *     95,023   

Bisti to Star Lake

   $ *     234,695   

Wingate to Gallup refinery (NGL liquids)

   $ *     29,565   

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Schedule 4.3

Minimum Truck Offloading Commitment and Minimum Truck Offloading Fee

A. Permian/Delaware Basin System

 

Service

   Minimum Truck
Offloading Fee
(per barrel)
    Minimum Truck
Offloading Commitment
(barrels per month)
 

Mason Station

   $ *     453,208   

McCamey Stations

   $ *     241,508   

B. Four Corners System

 

Service

   Minimum
Gathering and
Injection Fee
(per barrel)
    Minimum Gathering and
Injection Commitment
(barrels per month)
 

Gathering (Truck Offloading)

   $ *     303,762   

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Schedule 4.4

Minimum Gathering and Injection Commitment and Minimum Gathering and Injection Fee

A. Permian/Delaware Basin System

 

Service

   Minimum
Gathering and
Injection Fee
(per barrel)
    Minimum Gathering and
Injection Commitment
(barrels per month)
 

Pipeline gathering injection into system

   $ *     35,283   

B. Four Corners System

 

Service

   Minimum
Gathering and
Injection Fee
(per barrel)
    Minimum Gathering and
Injection Commitment
(barrels per month)
 

Pipeline injection connection in system

   $ *     602,667   

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Schedule 4.5

Minimum Storage Reservation Commitment and Minimum Storage Reservation Fee

A. Permian/Delaware Basin System

 

Service

   Minimum Storage
Reservation Fee

(per barrel)
     Minimum Storage
Reservation Commitment
 

Storage tanks

   $ **/month         210,000 barrels   

B. Four Corners System

 

Service

   Minimum Storage
Reservation Fee

(per barrel)
     Minimum Storage
Reservation Commitment
 

Storage tanks

   $ **/month         356,449 barrels   

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Schedule 20.3

Stipulated Minimum Commitment

A. Stipulated Minimum Mainline Movement Commitment – Permian/Delaware Basin System

 

Service

   Stipulated Minimum Mainline
Movement Commitment

(barrels per month)
 

Mainline movement / Field to Mason Station

     828,854   

B. Stipulated Minimum Mainline Movement Commitment – Permian/Delaware Basin System

 

Service

   Stipulated Minimum Mainline
Movement Commitment
(barrels per month)
 

Pipeline mainline movements

  

Pettigrew Station to Gallup refinery

     17,142   

Lybrook Station to Gallup refinery

     102,853   

Star Lake to Gallup refinery

     234,695   

Chaco Station to Bisti Station

     11,357   

Bisti Station to Gallup refinery

     254,741   

Bisti Injection Station to Gallup refinery

     94,900   

Blmfld Prod Term. To Bisti Inject. Or reverse

     95,023   

Bisti to Star Lake

     234,695   

Wingate to Gallup refinery (NGL liquids)

     29,565   

C. Stipulated Minimum Truck Offloading Commitment – Permian/Delaware Basin System

 

Service

   Stipulated Truck Offloading
Commitment
(barrels per month)
 

Gathering (Truck Offloading):

  

Mason Station

     453,208   

McCamey Stations

     241,508   

D. Stipulated Minimum Truck Offloading Commitment – Four Corners System

 

Service

   Stipulated Minimum Truck
Offloading Commitment
(barrels per month)
 

Gathering (Truck Offloading)

     303,762   

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

E. Stipulated Minimum Gathering and Injection Commitment – Permian/Delaware Basin System

 

Service

   Minimum Gathering and Injection
Commitment
(barrels per month)
 

Pipeline gathering injection into system

     35,283   

F. Stipulated Minimum Gathering and Injection Commitment – Four Corners System

 

Service

   Minimum Gathering and Injection
Commitment
(barrels per month)
 

Pipeline injection connection in system

     602,667   

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

Exhibit 10.6

TERMINALLING, TRANSPORTATION AND STORAGE SERVICES AGREEMENT

This TERMINALLING, TRANSPORTATION AND STORAGE SERVICES AGREEMENT (the “ Agreement ”) is dated as of October 16, 2013, by and among Western Refining Company, L.P., a Delaware limited partnership, Western Refining Southwest, Inc., an Arizona Corporation (collectively, “ WNR ”), on the one hand, and Western Refining Terminals, LLC, a Delaware limited liability company (“ WRT ”), on the other. In consideration of the covenants and obligations contained herein, the Parties to this Agreement hereby agree as follows:

ARTICLE 1

DEFINITIONS

Capitalized terms used throughout this Agreement shall have the meanings set forth below, unless otherwise specifically defined herein.

Additive Facilities ” has the meaning set forth in Section 17.1.

Additized Gasoline ” has the meaning set forth in Section 18.1.

Adjusted Minimum Asphalt Processing and Blending Commitment ” means WNR’s Minimum Asphalt Processing and Blending Commitment, adjusted by deducting the applicable Stipulated Asphalt Processing and Blending Commitment for each Asphalt Terminal that is no longer subject to this Agreement.

Adjusted Minimum Asphalt Storage Commitment ” means WNR’s Minimum Asphalt Storage Commitment adjusted by deducting the applicable Stipulated Asphalt Storage Commitment for each Asphalt Terminal that is no longer subject to this Agreement.

Adjusted Minimum Asphalt Throughput Commitment ” means WNR’s Minimum Asphalt Throughput Commitment, adjusted by deducting the applicable Stipulated Asphalt Throughput Commitment for each Asphalt Terminal that is no longer subject to this Agreement.

Adjusted Minimum Commitments ” means the Adjusted Minimum Product Throughput Commitment, Adjusted Minimum Asphalt Throughput Commitment, Adjusted Minimum Product Additive and Blending Commitment, Adjusted Minimum Asphalt Processing and Blending Commitment, Adjusted Minimum Product Storage Commitment and the Adjusted Minimum Asphalt Storage Commitment.

Adjusted Minimum Product Additive and Blending Commitment ” means WNR’s Minimum Product Additive and Blending Commitment, adjusted by deducting the applicable Stipulated Product Additive and Blending Commitment for each Product Terminal that is no longer subject to this Agreement.

 

1


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Adjusted Minimum Product Storage Commitment ” means WNR’s Minimum Product Storage Commitment adjusted by deducting the applicable Stipulated Product Storage Commitment for each Product Terminal that is no longer subject to this Agreement.

Adjusted Minimum Product Throughput Commitment ” means WNR’s Minimum Product Throughput Commitment, adjusted by deducting the applicable Stipulated Product Throughput Commitment for each Product Terminal that is no longer subject to this Agreement.

Agreement ” has the meaning set forth in the Preamble.

Applicable Law ” means any applicable statute, law, regulation, ordinance, rule, determination, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, requirement, or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect.

Asphalt Processing and Blending Services ” means the following services: air-blowing (oxidation) and blending (PPA, Hydrolene and other additives).

Asphalt Terminals ” means WRT’s asphalt plant and terminal located in El Paso, Texas, and three stand-alone asphalt terminals located in Albuquerque, New Mexico; Phoenix, Arizona; and Tucson, Arizona.

Asphalt Third Party Credit ” has the meaning set forth in Section 6.2.

Average Daily Third Party Asphalt Terminal Utilization ” has the meaning set forth in Section 6.2.

Average Daily Third Party Product Terminal Utilization ” has the meaning set forth in Section 6.1.

Barrel ” and “ barrel ” means a volume equal to 42 U.S. gallons of 231 cubic inches each adjusted to net gallons at 60° F in accordance with ASTM D-1250 Petroleum Measurement Tables, or the latest revisions thereof.

Base Gasoline ” has the meaning set forth in Section 18.1.

Base Invoice Amount ” has the meaning set forth in Section 8.1.

Blending Instructions ” has the meaning set forth in Section 21.3.

bpd ” means Barrels per day.

Business Day ” means a day, other than a Saturday or Sunday, on which banks in New York, New York are open for the general transaction of business.

 

2


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Capacity Resolution ” has the meaning set forth in Section 31.3.

Carrier ” means WNR or a third-party agent or contractor hired by WNR, who is in the business of transporting volumes via tank truck or rail car.

Commencement Date ” has the meaning set forth in Section 2.1

Confidential Information ” has the meaning set forth in Section 35.1.

Contro l” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

Credit ” has the meaning set forth in Section 8.4.

DCA ” has the meaning set forth in Section 18.1.

Definitive Agreement ” has the meaning set forth in Section 29.2.

EPA ” has the meaning set forth in Section 18.1.

Ethanol Services ” has the meaning set forth in Section 21.1.

Excess Amounts ” means:

(a) with respect to Product throughput services, the fee owed by WNR to WRT for such services in excess of the Minimum Product Throughput Commitment;

(b) with respect to asphalt throughput services, the fee owed by WNR to WRT such services in excess of the Minimum Asphalt Throughput Commitment;

(c) with respect to Product Additive and Blending Services, the fee owed by WNR to WRT for such services in excess of the Minimum Product Additive and Blending Commitment; and

(d) with respect to Asphalt Processing and Blending Services, the fee owed by WNR to WRT for such services in excess of the Minimum Asphalt Processing and Blending Commitment.

Extension Period ” has the meaning set forth in Section 3.1.

First Offer Period ” has the meaning set forth in Section 29.2.

Force Majeure ” means circumstances not reasonably within the control of WRT and which, by the exercise of due diligence, WRT is unable to prevent or overcome that prevent performance of WRT’s obligations, including: acts of God, strikes, lockouts or other industrial disturbances, wars, riots, fires, floods, storms, orders of courts or Governmental Authorities, explosions,

 

3


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

terrorist acts, accidental disruption of service, breakage, breakdown of machinery, storage tanks or lines of pipe and inability to obtain or unavoidable delays in obtaining material or equipment and similar events.

Force Majeure Notice ” has the meaning set forth in Section 30.1.

Force Majeure Period ” has the meaning set forth in Section 30.1.

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.

LAC ” has the meaning set forth in Section 18.1.

Minimum Asphalt Processing and Blending Commitment ” means the aggregate minimum processing and blending services set forth on Schedule 5.1; provided however, that the Minimum Asphalt Processing and Blending Commitment during the Month in which the Commencement Date occurs shall be prorated in accordance with the ratio of the number of days including and following the Commencement Date in such Month to the total number of days in such Month.

Minimum Asphalt Processing and Blending Fee ” has the meaning set forth in Section 5.4.

Minimum Asphalt Storage Commitment ” means the aggregate minimum asphalt storage services set forth on Schedule 5.1; provided, however, that the Minimum Asphalt Storage Commitment during the Month in which the Commencement Date occurs shall be prorated in accordance with the ratio of the number of days including and following the Commencement Date in such Month to the total number of days in such Month.

Minimum Asphalt Storage Reservation Fee ” has the meaning set forth in Section 5.2.

Minimum Asphalt Throughput Commitment ” means an aggregate amount of asphalt for each mode of ingress or egress as set forth on Schedule 5.1; provided however, that the Minimum Asphalt Throughput Commitment during the Month in which the Commencement Date occurs shall be prorated in accordance with the ratio of the number of days including and following the Commencement Date in such Month to the total number of days in such Month.

Minimum Asphalt Throughput Fee ” has the meaning set forth in Section 5.3.

Minimum Commitments ” means the Minimum Product Storage Commitment, Minimum Product Throughput Commitment, Minimum Product Additive and Blending Commitment, Minimum Asphalt Storage Commitment, Minimum Asphalt Throughput Commitment and Minimum Asphalt Processing and Blending Commitment.

 

4


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Minimum Product Additive and Blending Commitment ” means the aggregate minimum additive and blending services set forth on Schedule 4.1; provided however, that the Minimum Product Additive and Blending Commitment during the Month in which the Commencement Date occurs shall be prorated in accordance with the ratio of the number of days including and following the Commencement Date in such Month to the total number of days in such Month.

Minimum Product Additive and Blending Fee ” has the meaning set forth in Section 4.4.

Minimum Product Storage Commitment ” means the aggregate minimum Product storage services set forth on Schedule 4.1; provided however, that the Minimum Product Storage Commitment during the Month in which the Commencement Date occurs shall be prorated in accordance with the ratio of the number of days including and following the Commencement Date in such Month to the total number of days in such Month.

Minimum Product Storage Reservation Fee ” has the meaning set forth in Section 4.2.

Minimum Product Throughput Commitment ” means an aggregate amount of Product for each mode of ingress or egress as set forth on Schedule 4.1; provided however, that the Minimum Product Throughput Commitment during the Month in which the Commencement Date occurs shall be prorated in accordance with the ratio of the number of days including and following the Commencement Date in such Month to the total number of days in such Month.

Minimum Product Throughput Fee ” has the meaning set forth in Section 4.3.

Modified Minimum Asphalt Storage Reservation Fee ” means the Minimum Asphalt Storage Reservation Fee for a given Month less any Asphalt Third Party Credit owed to WNR for such Month.

Modified Minimum Product Storage Reservation Fee ” means the Minimum Product Storage Reservation Fee for a given Month less any Product Third Party Credit owed to WNR for such Month.

Month ” means the period commencing on the Commencement Date and ending on the last day of the calendar month in which service begins and each successive calendar month thereafter.

Notice Period ” has the meaning set forth in Section 28.1.

Partnership ” means Western Refining Logistics, LP, a Delaware limited partnership, WRT’s parent entity.

Partnership Change of Control ” means Western Refining, Inc., ceasing to Control, directly or indirectly, the general partner of the Partnership.

Party” or “Parties ” means each of WNR and WRT.

 

5


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Person ” means any individual, partnership, limited partnership, joint venture, corporation, limited liability company, limited liability partnership, trust, unincorporated organization or Governmental Authority or any department or agency thereof.

Prime Rate ” means the prime interest rate as reported in the New York edition of the Wall Street Journal on the due date of the applicable payment.

Product ” means crude oil, blendstocks and refined products.

Product Additive and Blending Services ” means ethanol and biodiesel blending and the injection of the following additives (loading racks and non-rack): generic gasoline additive, corrosion inhibitor #1, corrosion inhibitor #2, lubricity/conductivity additive, red dye, diesel winter additive, jet additive, anti-static additive, pour point depressant, premium diesel additive and any other additives that may be offered by WRT.

Product Terminals ” means WRT’s terminals and tank farms located at each of WNR’s refineries in El Paso, Texas, and Gallup, New Mexico, and stand-alone refined petroleum product terminals located in Bloomfield, New Mexico and Albuquerque, New Mexico.

Product Third Party Credit ” has the meaning set forth in Section 6.1.

Red Dye ” has the meaning set forth in Section 19.1.

Refineries ” means the refineries owned and operated by subsidiaries of Western Refining, Inc., located in El Paso, Texas, and Gallup, New Mexico.

Restoration ” has the meaning set forth in Section 31.2.

Right of First Refusal ” has the meaning set forth in Section 29.2.

Second Offer Period ” has the meaning set forth in Section 29.2.

Shortfall Amount ” has the meaning set forth in Section 8.2.

Stipulated Asphalt Processing and Blending Commitment ” means the stipulated total barrels as set forth for each Asphalt Terminal on Schedule 30.3.

Stipulated Asphalt Storage Commitment ” means the storage capacity at each Asphalt Terminal covered by the Minimum Asphalt Storage Commitment.

Stipulated Asphalt Throughput Commitment ” means the stipulated asphalt volume (pipeline, rail or truck) in barrels per month as set forth for each Asphalt Terminal on Schedule 30.3.

Stipulated Commitments ” means the Stipulated Product Additive and Blending Commitment, Stipulated Asphalt Processing and Blending Commitment, Stipulated Product Storage Commitment, Stipulated Asphalt Storage Commitment, Stipulated Product Throughput Commitment and Stipulated Asphalt Throughput Commitment.

 

6


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Stipulated Product Additive and Blending Commitment ” means the stipulated total barrels as set forth for each Terminal on Schedule 30.3.

Stipulated Product Storage Commitment ” means the storage capacity at each Product Terminal covered by the Minimum Product Storage Commitment.

Stipulated Product Throughput Commitment ” means the stipulated Product volume (pipeline, rail or truck) in barrels as set forth for each Product Terminal on Schedule 30.3.

Suspension Notice ” has the meaning set forth in Section 28.1.

Term ” and “ Initial Term ” shall each have the meaning set forth in Section 3.1.

Terminals ” means the Asphalt Terminals and the Product Terminals.

Termination Notice ” has the meaning set forth in Section 30.1.

Third Party Credits ” means the Asphalt Terminal Third Party Credits and the Product Third Party Credits.

Transmix ” has the meaning set forth in Section 14.1.

WNR ” has the meaning set forth in the Preamble.

WRT ” has the meaning set forth in the Preamble.

 

7


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

ARTICLE 2

COMMENCEMENT DATE

2.1 The date of this Agreement shall be the “ Commencement Date ”.

ARTICLE 3

TERM

3.1 The initial term of this Agreement shall commence on the Commencement Date and shall continue through October 16, 2023 (the “ Initial Term ”); provided, however, that the Initial Term may be extended for up to two (2) renewal terms of five (5) years each (each, an “ Extension Period ”) upon the mutual agreement in writing of WRT and WNR no less than ninety (90) days prior to the end of the Initial Term or the then-current Extension Period. The Initial Term, and any extensions of this Agreement as provided above, shall collectively be referred to herein as the “ Term .”

ARTICLE 4

MINIMUM PRODUCT COMMITMENTS

4.1 Minimum Product Commitments. During the Term of this Agreement and subject to the terms and conditions of this Agreement, each Month WNR shall:

 

  (a) Reserve the Minimum Product Storage Commitment at the Product Terminals for which WNR shall pay a Minimum Product Storage Reservation Fee;

 

  (b) Throughput the Minimum Product Throughput Commitment at the Product Terminals for which WNR shall pay a Minimum Product Throughput Fee; and

 

  (c) Utilize additive and blending services at the Product Terminals at the Minimum Product Additive and Blending Commitment for which WNR shall pay a Minimum Product Additive and Blending Fee.

For the avoidance of doubt, these are monthly system-wide fee commitments for all Product Terminals. During the Term of this Agreement and subject to the terms and conditions of this Agreement, each Month WRT shall provide storage services, throughput services and Product Additive and Blending Services at the Product Terminals in no less than the volumes covered under the Minimum Product Storage Commitment, the Minimum Product Throughput Commitment and the Minimum Product Additive and Blending Commitment, as applicable.

4.2 Product Storage Reservation Fee. WRT shall provide Product storage services and WNR shall pay the monthly fee set forth on Schedule 4.2 to reserve, on a firm basis, the Minimum Product Storage Commitment at the Product Terminals. The aggregate of these fees on a monthly basis for all Product Terminals shall be referred to as the “ Minimum Product Storage Reservation Fee .” WRT may utilize any shell capacity not being used by WNR to provide storage to third parties, provided, however, that (i) WNR shall be entitled to a corresponding Product Third Party Credit, as defined below, and (ii) WRT shall be required, to the extent WNR desires to utilize any then-available storage capacity, to prioritize WNR’s utilization of such storage capacity over third-party customers.

 

8


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

4.3 Product Throughput Fees. WRT shall provide Product throughput services and WNR shall pay the per barrel fees set forth on Schedule 4.2 for the Product volumes WNR throughputs at the Product Terminals for the Minimum Product Throughput Commitment. The aggregate of these fees on a monthly basis for all Product Terminals shall be referred to as the “ Minimum Product Throughput Fee .” From time to time upon agreement of the Parties and to the extent there is available capacity at any given Product Terminal, WNR may utilize Product throughput capacity in excess of the Minimum Product Throughput Commitment and, in such circumstances, WRT shall prioritize WNR’s utilization of such throughput capacity over third-party customers. Any such excess Product throughput volumes will be at the per barrel throughput fees set forth on Schedule 4.2. WRT may utilize any throughput capacity not being used by WNR to provide throughput to third parties, provided, however, that WRT shall be required, to the extent WNR desires to utilize any then-available throughput capacity, to prioritize WNR’s utilization of such throughput capacity over third-party customers.

4.4 Product Additive and Blending Fees. WRT shall provide the Product Additive and Blending Services and WNR shall pay the per barrel fees set forth on Schedule 4.2 for such Product Additive and Blending Services for the Minimum Product Additive and Blending Commitment. The aggregate of these fees on a monthly basis shall be referred to as the “ Minimum Product Additive and Blending Fee .” From time to time upon agreement of the Parties and to the extent there is available capacity at any given Product Terminal, WNR may utilize Product Additive and Blending Services in excess of the Minimum Product Additive and Blending Commitment and, in such circumstances, WRT shall prioritize WNR’s utilization of such Product Additive and Blending Services over third-party customers. Any such excess Product Additive and Blending Services will be at the per barrel fees set forth on Schedule 4.2. In addition, WNR shall reimburse WRT for the costs (including shipping, delivery and other ancillary costs) of all additives WRT injects or blends into volumes tendered by or on behalf of WNR at the Product Terminals. WRT may utilize any additive and blending capacity not being used by WNR to provide additive and blending services to third parties, provided, however, that WRT shall be required, to the extent WNR desires to utilize any then-available additive and blending capacity, to prioritize WNR’s utilization of such additive and blending capacity over third-party customers.

4.5 Additional Services. If WNR requests services related to Products different in kind, scope or frequency from services provided for in this Agreement, then the Parties shall negotiate in good faith to determine whether such services may be provided and the appropriate rates to be charged for such additional services.

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

ARTICLE 5

MINIMUM ASPHALT COMMITMENTS

5.1 Minimum Asphalt Commitments. During the Term of this Agreement and subject to the terms and conditions of this Agreement, each month WNR shall:

(a) Reserve the Minimum Asphalt Storage Commitment at the Asphalt Terminals for which WNR shall pay the Minimum Asphalt Storage Reservation Fee;

(b) Throughput the Minimum Asphalt Throughput Commitment at the Asphalt Terminals for which WNR shall pay the Minimum Asphalt Throughput Fee; and,

(c) Utilize asphalt processing and blending services at the Asphalt Terminals at the Minimum Asphalt Processing and Blending Commitment for which WNR shall pay a Minimum Asphalt Processing and Blending Fee.

For the avoidance of doubt, these are monthly system-wide fee commitments for all Asphalt Terminals. During the Term of this Agreement and subject to the terms and conditions of this Agreement, each Month WRT shall provide asphalt storage services, asphalt throughput services and Asphalt Processing and Blending Services at the Asphalt Terminals in, at a minimum, the volumes covered under the Minimum Asphalt Storage Commitment, the Minimum Asphalt Throughput Commitment and the Minimum Asphalt Processing and Blending Commitment, as applicable.

5.2 Asphalt Storage Reservation Fee. WRT shall provide asphalt storage services and WNR shall pay a monthly fee set forth on Schedule 5.2 to reserve, on a firm basis, the Minimum Asphalt Storage Commitment at the Asphalt Terminals. The aggregate of these fees on a monthly basis for all Asphalt Terminals shall be referred to as the “ Minimum Asphalt Storage Reservation Fee .” WRT may utilize any shell capacity not being used by WNR to provide storage to third parties, provided, however, that (i) WNR shall be entitled to a corresponding Asphalt Third Party Credit, as defined below, and (ii) WRT shall be required, to the extent WNR desires to utilize any then-available storage capacity, to prioritize WNR’s utilization of such storage capacity over third-party customers.

5.3 Asphalt Throughput Fees. WRT shall provide asphalt throughput services and WNR shall pay the per barrel fees set forth on Schedule 5.2 for the asphalt volumes throughput at the Asphalt Terminals for the Minimum Asphalt Throughput Commitment. The aggregate of these fees on a monthly basis for all Asphalt Terminals shall be referred to as the “ Minimum Asphalt Throughput Fee .” From time to time upon agreement of the Parties and to the extent there is available capacity at any given Asphalt Terminal, WNR may utilize Asphalt throughput capacity in excess of the Minimum Asphalt Throughput Commitment and, in such circumstances, WRT shall prioritize WNR’s utilization of such throughput capacity over third-party customers. Any such excess Product throughput volumes will be at the per barrel throughput fees set forth on Schedule 5.2. WRT may utilize any throughput capacity not being used by WNR to provide throughput to third parties, provided, however, that WRT shall be required, to the extent WNR desires to utilize any then-available storage capacity, to prioritize WNR’s utilization of such storage capacity over third-party customers.

 

10


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

5.4 Asphalt Processing and Blending Fees. WRT shall provide the Asphalt Processing and Blending Services and WNR shall pay the per barrel fees set forth on Schedule 5.2 for the Asphalt Processing and Blending Services for the Minimum Asphalt Processing and Blending Commitment. The aggregate of these fees on a monthly basis shall be referred to as the “ Minimum Asphalt Processing and Blending Fee .” From time to time upon agreement of the Parties and to the extent there is available capacity at any given Asphalt Terminal, WNR may utilize Asphalt Processing and Blending Services in excess of the Minimum Asphalt Processing and Blending Commitment and, in such circumstances, WRT shall prioritize WNR’s utilization of such asphalt processing and blending services over third party customers. Any such excess Asphalt Processing and Blending Services shall be at the per barrel fees set forth on Schedule 5.2. In addition, WNR shall reimburse WRT for the costs (including shipping, delivery and other ancillary costs) of all additives WRT injects or blends into volumes tendered by or on behalf of WNR at the Asphalt Terminals. WRT may utilize any asphalt processing and blending capacity not being used by WNR to provide asphalt processing and blending to third parties, provided, however, that WRT shall be required, to the extent WNR desires to utilize any then-available asphalt processing and blending capacity, to prioritize WNR’s utilization of such asphalt processing and blending capacity over third-party customers.

5.5 Additional Services. If WNR requests services related to asphalt different in kind, scope or frequency from services provided for in this Agreement, then the Parties shall negotiate in good faith to determine whether such services may be provided and the appropriate rates to be charged for such additional services.

ARTICLE 6

THIRD PARTY CREDITS

6.1 Product Third Party Credit. At the conclusion of each Month, WRT shall calculate the “ Average Daily Third Party Product Terminal Utilization ” of the Product Terminal storage, which shall be a fraction, (i) the numerator of which is the sum of, for each day in such Month, the number of barrels of Product stored for third parties in the shell capacity set forth on Schedule 4.1 and (ii) the denominator of which is (x) the aggregate shell capacity set forth on Schedule 4.1 multiplied by (y) the number of days in such Month. For each Month, the product of the Average Daily Third Party Product Terminal Utilization and the Minimum Product Storage Reservation Fee shall be the “ Product Third Party Credit ”. Each Month, the total fees due to WRT for Product storage services at Product Terminals will be reduced (but not below zero) by the amount of such Product Third Party Credit.

6.2 Asphalt Third Party Credit. At the conclusion of each Month, WRT shall calculate the “ Average Daily Third Party Asphalt Terminal Utilization ” of the Asphalt Terminal storage, which shall be a fraction, (i) the numerator of which is the sum of, for each day in such Month, the number of barrels of Product stored for third parties in the shell capacity set forth on Schedule 5.1 and (ii) the denominator of which is (x) the aggregate shell capacity set forth on Schedule 5.1 multiplied by (y) the number of days in such Month. For each Month, the product of the Average Daily Third Party Asphalt Terminal Utilization and the Minimum Asphalt Storage Reservation Fee shall be the “ Asphalt Third Party Credit ”. Each Month, the total fees due to WRT for asphalt storage services at the Asphalt Terminals will be reduced (but not below zero) by the amount of such Asphalt Third Party Credit.

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

ARTICLE 7

SURCHARGES; FEE ADJUSTMENTS

7.1 Surcharges. If WRT agrees to make capital expenditures at WNR’s request or if new laws or regulations that affect any of the services WRT provides to WNR under this Agreement are enacted or promulgated that require WRT to make material (individually or in the aggregate) capital expenditures, WRT shall have the right to impose a monthly surcharge on the services provided under this Agreement to cover the costs of such requested capital expenditures or WNR’s share of the costs of complying with these laws or regulations but only after WRT has made commercially reasonable efforts to mitigate the effect of such laws or regulations. WNR’s share of such costs will be calculated based on the volumes of product WRT has handled for WNR during the previous three (3) months compared to the total volumes of product handled by WRT for the same period.

7.2 Fee Adjustments. All fees set forth in this Agreement shall be adjusted on July 1 of each year by a percentage equal to the change in the Producer Price Index for Finished Goods, seasonally adjusted, as published by the Department of Labor; provided, however, that no fee shall be decreased below the applicable initial minimum fee in effect as of the Commencement Date.

ARTICLE 8

PAYMENT; SHORTFALL PAYMENTS

8.1 Base Invoice Amount. WRT shall invoice WNR for fees owed to WRT monthly based upon actual storage utilized, actual throughput and actual additive, blending and processing services utilized (the “ Base Invoice Amount ”).

8.2 Shortfall Amount. If the Base Invoice Amount is less than the total of the Modified Minimum Product Storage Reservation Fee, Minimum Product Throughput Fee, Minimum Product Additive and Blending Fee, Modified Minimum Asphalt Storage Reservation Fee, Minimum Asphalt Throughput Fee, and Minimum Asphalt Processing and Blending Fee for such month WRT shall also invoice WNR for such difference (the “ Shortfall Amount ).

8.3 Payment Terms. WNR shall pay all amounts due pursuant to Sections 7.1, 8.1, 8.2 and 10.1 within ten (10) calendar days after WNR’s receipt of WRT’s invoices. Any undisputed past due payments owed by WNR to WRT shall accrue interest, payable on demand, at a rate equal to the Prime Rate plus two percent per annum from the due date of the payment through the actual date of payment.

8.4 Shortfall Credit. The dollar amount of any Shortfall Amount attributable to throughput, additive, blending and processing services (but not storage) paid by WNR shall be posted as a credit (a “ Credit ”) to WNR’s account and may be applied against any Excess Amounts owed by WNR during any of the succeeding twelve (12) Months. Credits will be applied in the order in which such Credits accrue and any remaining portion of the Credit that is not used by WNR during the succeeding twelve (12) Months shall expire ( e.g ., a Credit that accrues in January 2013 will be available through January 2014, will expire at the end of January 2014, and must be applied prior to applying any Credit which accrued in February 2013).

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

ARTICLE 9

VOLUME LOSSES

WRT shall bear the risk of loss for Products volumes throughput by WRT at a Product Terminal to the extent that such losses exceed 0.20% of the Products volumes throughput by WRT at such Product Terminal. Volumes and losses of Products volumes shall be determined and accounted for as of the end of each Month. If volume losses of any Products exceed 0.20% during any particular Month, WRT shall pay WNR for the difference between the actual loss and the 0.20% allowance at a price per barrel for crude oil equal to such Month’s calendar day average for NYMEX WTI less $8.00 per barrel and for all Products other than crude oil equal to the Oil Price Information Service Gulf Coast monthly average for such Product.

ARTICLE 10

REIMBURSEMENT

10.1 WNR shall pay, cause to be paid or reimburse WRT for all taxes (other than income taxes, gross receipt taxes, personalty and other property taxes and similar taxes) and non-routine, non-recurring extraordinary regulatory and third-party fees imposed by any federal, state, local, foreign or other government that WRT incurs on WNR’s behalf for the services provided to WNR under this Agreement. In addition, Western will reimburse WRT for the actual cost of any capital expenditures WRT makes at WNR’s request. WRT and WNR will negotiate in good faith to agree on the amount of such reimbursement.

10.2 If cleaning of any tanks is performed by WRT at the specific request of WNR, WNR shall reimburse WRT for all costs to clean, degas or otherwise prepare the tank(s).

10.3 All of the foregoing reimbursements, together with the additive cost reimbursements described in Sections 4.4 and 5.4, shall be made in accordance with the payment terms set forth in Section 8.3.

ARTICLE 11

CONTROL, CUSTODY, TRANSFER AND TITLE

11.1 Control. Control and operation of the Terminal shall rest exclusively with WRT. WRT shall be an independent contractor with respect to all services it provides under this Agreement. WRT may suspend operations at the Terminal if WRT believes that any Person, equipment, or the environment is at risk of injury or damage.

11.2 Custody.

(a) Pipeline Receipts . For volumes received into a Terminal by pipeline, custody of the volumes shall pass to WRT at the flange where it enters the Terminal’s receiving line.

 

  (b) Pipeline Deliveries . For volumes delivered by a Terminal into a pipeline, custody of the volumes shall pass to WNR at the flange where it exits the Terminal’s delivery line.

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

  (c) Rail . For volumes received by rail, custody shall pass to WRT at the flange where the hoses at WRT’s facility interconnect with the rail car.

 

  (d) Truck . For receipts and deliveries of volumes to or from trucks, custody shall pass at the flange where the hoses at WRT’s facility interconnect with the truck.

11.3 General . Each Party shall be solely responsible for any loss, damage or injury to person or property or the environment, arising out of transportation, possession or use of such volumes while in that Party’s custody, subject to the loss allowance provisions hereof or unless otherwise provided herein. Title to all volumes received in the Terminals by or on behalf of WNR shall remain with WNR at all times. Both Parties acknowledge that this Agreement represents a bailment of such volumes by WNR to WRT and not a consignment of such volumes, it being understood that WRT has no authority hereunder to sell or seek purchasers for the volumes of WNR, except as provided in Section 14 below. WNR hereby warrants that it shall, at all times, have good title to and the right to deliver, throughput, store and receive volumes pursuant to the terms of this Agreement. WNR shall at all times be the blender of record and shall retain and be entitled to any renewable identification numbers.

ARTICLE 12

PRODUCT QUALITY

12.1 WNR warrants that all volumes delivered under this Agreement shall meet the latest applicable specifications for such volumes and contain no deleterious substances or concentrations of any contaminants that may make it or its components commercially unacceptable in general industry application. WNR shall not deliver to any of the Terminals any volumes which: (a) would in any way be injurious to any of the Terminals; (b) would render any of the Terminals unfit for the proper storage of similar products; (c) would contaminate or otherwise downgrade the quality of the products stored; (d) may not be lawfully stored at the Terminals; or (e) otherwise do not meet applicable specifications for such volumes. If, however, there are volumes that do not have such applicable specifications, the specifications shall be mutually agreed upon by the Parties. Should WNR’s commingled volumes not meet or exceed the minimum quality standards set forth in this Agreement, WNR shall be liable for all loss, damage and cost incurred thereby, including damage to volumes of third parties commingled with WNR’s unfit volumes.

12.2 WRT shall have the right to store compatible products received for WNR’s account with products belonging to WRT or third parties in WRT’s fungible products storage tanks. WRT shall handle WNR’s fungible volumes in accordance with WRT’s prevailing practices and procedures for handling such products. The quality of all volumes tendered into storage for WNR’s account shall be verified either by WNR’s refinery analysis or supplier’s certification, such that volumes so tendered shall meet WRT’s specifications. All costs for such analysis shall be borne solely by WNR. WRT shall have the right to sample any volumes tendered to the Terminals hereunder. The cost of such sampling shall be borne solely by WRT. All volumes returned to WNR shall meet or exceed the product specifications of such volumes when delivered by WNR to WRT.

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

12.3 WRT shall exercise reasonable care to ensure that all volumes delivered by third Parties into commingled storage with WNR’s volumes meet applicable specifications for such Product. In the event that WNR’s volumes are commingled with third-party volumes that do not meet or exceed the minimum quality standards set forth in this Agreement, WRT shall be liable for all loss, damage and cost incurred thereby.

ARTICLE 13

MEASUREMENT

13.1 All quantities of volumes:

 

  (a) received or delivered by or into truck or rail shall be measured and determined based upon the meter readings at each Terminal, as reflected by delivery tickets or bills of lading, or if such meters are unavailable, by applicable calibration tables;

 

  (b) received and delivered by pipeline shall be measured and determined based upon the meter readings of the pipeline operator, as reflected by delivery tickets, or if such meters are unavailable, by applicable calibration tables.

 

  (c) delivered by book transfer shall be reflected by entries in the books of WRT.

13.2 Meters and temperature probes shall be calibrated according to applicable API standards; provided, however, that those meters utilized to determine losses for purposes of Article 9 shall be calibrated monthly at WRT’s sole expense. WNR shall have the right, at its sole expense, and in accordance procedures at the applicable Terminal, to independently certify said calibration. Storage tank gauging shall be performed by WRT’s personnel. WRT’s gauging shall be deemed accurate unless challenged by an independent certified gauger. WNR may perform joint gauging at its sole expense with WRT’s personnel. If WNR should request an independent gauger, such gauger must be acceptable to WRT, and such gauging shall be at WNR’s sole expense.

ARTICLE 14

PRODUCT DOWNGRADE AND INTERFACE

14.1 Volumes downgraded as a result of ordinary Terminal or pipeline operations including line flushing, rack meter provings or other necessary Terminal operations shall not constitute losses for which WRT is liable to WNR. WRT shall account for the volumes downgraded, and WNR’s inventory of volumes and/or interface shall be adjusted, provided that, in some cases interface volumes (“ Transmix ”) received shall be ratably shared between WNR and other customers receiving volumes in the same shipment or stored in commingled storage. WNR shall remove its Transmix upon notice from WRT and shall be subject to applicable throughput fees upon its removal. If Transmix is not removed within fifteen (15) days after notification, WRT shall have the right to sell such Transmix at market rates and return any proceeds to WNR, less applicable throughput fees and storage and delivery costs in effect at the time of such sale.

 

15


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

ARTICLE 15

PRODUCT DELIVERIES, RECEIPTS AND WITHDRAWALS

15.1 All supervised deliveries, receipts and withdrawals hereunder shall be made within the normal business hours of each Terminal and at such times as may be required by WNR upon prior notice and approval by WRT, all in accordance with the agreed-upon scheduling. Unsupervised deliveries, receipts and withdrawals shall be made only with WRT’s prior approval and in strict accordance with WRT’s current operating procedures for the Terminals. WNR warrants that all vehicles permitted to enter the Terminals on behalf of WNR shall meet all requirements and standards promulgated by applicable regulatory authority including the Department of Transportation, the Occupational Safety and Health Administration, and the EPA. WNR further warrants that it shall only send to the Terminals those employees, agents and other representatives acting on behalf of and at WNR’s direction who have been properly instructed as to the characteristics and safe hauling methods associated with the products to be loaded and hauled. WNR further agrees to be responsible to WRT for the performance under this Agreement by its third party agents and/or representatives receiving volumes at the Terminals.

15.2 WNR shall withdraw from the Terminals only those volumes that it is authorized to withdraw hereunder. WNR shall neither duplicate nor permit the duplication of any loading device ( i.e., card lock access) provided hereunder. WNR shall be fully and solely responsible for all volumes loaded through the use of the loading devices issued to WNR in accordance with this Agreement; provided, however ; that WNR shall not have any responsibility or liability hereunder in the event that the load authorization system provided hereunder fails or malfunctions in any way.

15.3 Both Parties shall abide by all federal, state and local statutes, laws and ordinances and all rules and regulations which are promulgated by WRT and which are either furnished to WNR or posted at the Terminals, with respect to the use of the Terminals. It is understood and agreed by WNR that these rules and regulations may be changed, amended or modified by WRT at any time. All changes, amendments and modifications shall become binding upon WNR ten (10) days following the posting of a copy at the affected Terminals or the receipt by WNR of a copy, whichever occurs sooner.

15.4 For all purposes hereunder, WNR’s jobbers, distributors, Carriers, haulers and other customers designated in writing or otherwise by WNR to have loading privileges under this Agreement or having possession of any loading device furnished to WNR pursuant to this Agreement, together with their respective officers, servants and employees, shall, when they access the Terminals, be deemed to be representatives of WNR.

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

ARTICLE 16

DELIVERIES INTO TRANSPORT TRUCKS

16.1 Prior to transporting any volumes loaded into transport trucks at the Terminals, WNR and its Carriers shall make or cause to be made, the following certifications on the delivery receipt or bill of lading covering the products received:

the materials being transported are properly classified, described, packaged, marked and labeled, and are in proper condition for transportation according to the applicable regulations of the Department of Transportation; the cargo tank used for this shipment is a proper container for the commodity loaded therein and complies with Department of Transportation specifications and the cargo tank is properly placarded and marked to comply with regulations pertaining to hazardous materials.

16.2 WRT may require each Carrier coming into the Terminals to enter into a customary Access Agreement with WRT and to carry the levels and types of insurance, with appropriate endorsements and certificates, specified for WNR hereunder.

ARTICLE 17

LUBRICITY, CONDUCTIVITY AND OTHER ADDITIVES

17.1 WRT owns, maintains and operates facilities to provide lubricity, conductivity and other additives as set forth in Schedule 4.2 and 5.2 (the “ Additive Facilities ”) at each of the Terminals. WRT shall continue to maintain and operate such Additive Facilities in accordance with customary industry standards during the term of this Agreement, including all required reporting and record keeping prescribed by Applicable Law.

17.2 During the term of this Agreement, WRT shall arrange for purchase and delivery of any and all required additives for injection through the Additive Facilities at the Terminals.

17.3 During the term of this Agreement, WRT shall inject into all Ultra Low Sulfur Diesel delivered to WNR at the Terminals an amount and type of additives that it determines to be sufficient to comply with current ASTM diesel lubricity and conductivity specifications. WRT shall, upon request, provide WNR with documentation of additive specifications and additive injection, which WRT shall keep on file at each Terminal.

17.4 The cost for these services is set forth on Schedule 4.2.

ARTICLE 18

DCA ADDITIVE INJECTION

18.1 All gasoline volumes leaving the Product Terminals shall be additized (“ Additized Gasoline ”). As an exception, WRT shall accommodate a request from WNR to lift base gasoline from the Product Terminals. In that case, the bill of lading issued by WRT shall label all such volumes as base gasoline (“ Base Gasoline ”). WRT shall provide a generic Deposit Control Additive (“ DCA ”) injection service, including all required reporting and record keeping prescribed by Applicable Law. The additive supplied shall be a U.S. Environmental Protection

 

17


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Agency (“ EPA ”) certified DCA. Subject to the other provisions hereof, WNR may request WRT to instead inject a different proprietary DCA into certain gasoline delivered hereunder, instead of the generic DCA provided by WRT, and WRT shall accommodate such requests, subject to WNR providing a suitable Additized Gasoline system for such proprietary additive. WRT shall ensure that such additive is injected into all appropriate gasoline volumes delivered to WNR at a rate no lower than the Lowest Allowable Concentration (“ LAC ”) at which such additive was certified. The gasoline additization rate shall be determined by WNR, but shall not be less than 1.1 times the LAC specified by the respective additive manufacturer or supplier. WRT shall accommodate WNR’s requests for higher additive injection rates in accordance with the fees in Schedule 4.2 of this Agreement. WNR shall submit all such requests in writing to WRT.

18.2 Notwithstanding the above, WNR shall be solely responsible for registering with the EPA or any other government agency its use of generic or proprietary additive in its fuels, as required by Applicable Law. WNR shall submit to each applicable Product Terminal evidence of registration in compliance with 40 C.F.R. Part 80. WNR shall also be responsible for full compliance with any quarterly or other regulatory reporting requirements, and any other requirements under Applicable Law, rule or regulation related to use of generic or proprietary additive in WNR’s volumes.

18.3 The cost for these services is set forth on Schedule 4.2.

ARTICLE 19

RED DYE INJECTION

19.1 WRT shall provide a generic red dye additive (“ Red Dye ”) injection service for diesel, including all required reporting and recordkeeping prescribed by Applicable Law. WRT shall be responsible for determining the injection rates, Red Dye inventory levels, meter readings, and calculations of actual treat rates, in compliance with the minimum levels prescribed by the Internal Revenue Service.

19.2 WNR is responsible for designating which of its accounts shall be authorized to use Red Dye diesel injection services. WRT equipment shall enable designated Carriers and accounts to inject Red Dye upon request prior to loading diesel volumes at Product Terminals. WNR’s and its Carrier shall be solely responsible for designating that a load of diesel volumes be injected with Red Dye, and WRT shall have no liability with regard to whether a load is additized with Red Dye. WRT shall not be responsible for any loss, damage or liability that arises from Carrier injecting or failing to inject Red Dye into WNR’s volumes.

19.3 The cost for these services is set forth on Schedule 4.2.

ARTICLE 20

SPECIAL ADDITIVE EQUIPMENT

20.1 To the extent WNR requests new additive equipment, and subject to the other provisions set forth herein and the availability of suitable space in a Terminal, WRT shall install and maintain at the Terminals, at WNR’s sole risk, cost and expense, such special additive equipment as may be desirable for volumes to be delivered to WNR’s account hereunder. The

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

engineering and installation of any fixture, equipment or appurtenance placed on the Terminals in respect thereof shall be subject to WRT’s prior approval. During the Term of this Agreement, WRT shall operate the special additive equipment, and WRT shall be paid a fee for such operation to be mutually agreed upon by the Parties prior to the installation of such equipment. The location, installation, and maintenance of such special additive equipment shall be as specified in writing by WNR and agreed to by WRT.

20.2 Subject to the supervision of WNR, WRT or its designee shall install the special additive equipment. WNR shall be responsible for 100% of all costs of the additional Additized Gasoline system, including without limitation, costs associated with any required piping, nozzles, fittings, equipment, injection panels, labor and/or installation thereof, and if any existing load rack equipment will not support such additional additive system, then WNR shall bear all costs of enlarging or renovating such load rack to support the additional additive system requested by WNR. WNR shall reimburse WRT for any such costs incurred by WRT within ten days after receipt of an invoice from WRT for such costs. Upon completion of the installation of the additional Additized Gasoline system, the Additized Gasoline system shall become the property of WRT, free and clear of any security interest or lien.

20.3 WNR shall reimburse WRT for any and all necessary modifications to an additional additive system required by WNR during the Term of this Agreement.

ARTICLE 21

ETHANOL BLENDING SERVICES

21.1 Where ethanol receiving, storage and blending facilities are available at a Product Terminal, and upon WNR’s request, WRT shall receive, store and blend ethanol into WNR’s gasoline at a Product Terminal (“ Ethanol Services ”). WRT shall provide and operate all equipment required for the Ethanol Services. The equipment shall consist of truck and/or rail unloading racks, tanks, pumps, motors, injectors, computer control, and any other ancillary equipment necessary for the providing of the Ethanol Services.

21.2 WNR shall be solely responsible for supplying inventories of ethanol at its own expense, including the scheduling and transporting of ethanol into the Terminals, subject to mutually agreeable notice and scheduling procedures specified by WRT. WRT shall receive WNR’s ethanol into fungible ethanol storage at the Product Terminal.

21.3 WNR shall provide, in writing, to each Product Terminal where Ethanol Services are requested by WNR, the desired blending ratio of ethanol to gasoline, including the minimum Octane (R+M/2) rating (“ Blending Instructions ”), for each grade of WNR’s gasoline volumes, prior to blending. WRT shall not change the blending ratios without the prior written authorization of WNR.

21.4 WRT shall maintain for a minimum of five (5) years written or electronic records of the type and volume of oxygenate blended into WNR’s gasoline.

21.5 WRT shall maintain an industry standard quality assurance oversight program of the ethanol blending process. WRT shall provide WNR with an end-of-year report that, at a minimum, summarizes the volume of WNR’s gasoline received by WRT, the volume of oxygenate added to WNR’s gasoline, and total volume of blended gasoline.

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

21.6 WRT shall allow WNR or its agents to monitor the oxygenate blending operation by periodic audit, sampling, testing and/or records review to ensure the overall volumes and type of oxygenate blended into gasoline is consistent with the oxygenate claimed by WNR as required by 40 CFR 80.101(d)(4)(ii)(B)(2).

21.7 WRT shall rely on Blending Instructions and data provided by WNR in performing its obligations under this Agreement. WNR agrees to be solely responsible for all claims arising from WRT’s use of or reliance on these Blending Instructions and data.

21.8 When performing the Ethanol Services as per WNR’s Blending Instructions, WRT shall not certify to WNR that blended gasoline does or shall meet ASTM D 4814 or any Federal, State, or Local regulatory specifications. WNR agrees that it is receiving from WRT the Blended Gasoline in an “AS IS, WHERE IS” condition without warranties of any kind, including any warranties of merchantability or fitness for a particular purpose, or its ability to meet ASTM or regulatory specifications.

21.9 The cost for these services is set forth on Schedule 4.2.

ARTICLE 22

ACCOUNTING PROVISIONS AND DOCUMENTATION

22.1 WRT shall furnish WNR with the following reports covering services hereunder involving WNR’s volumes:

(a) Within ten (10) Business Days following the end of the Month, a statement showing, by product: (i) WNR’s monthly aggregate deliveries into the Terminals; (ii) WNR’s monthly receipts from the Terminals; (iii) calculation of all of WNR’s monthly storage and handling fees; (iv) WNR’s opening inventory for the preceding Month; (v) appropriate monthly loss allowance adjustments (as applicable in accordance with Article 9); and (vi) WNR’s closing inventory for the preceding Month.

(b) A copy of any meter calibration report, to be available for inspection upon reasonable request by WNR at the Terminals following any calibration.

(c) Upon delivery from the Terminals and to the extent available, a hard copy bill of lading to the Carrier for each truck or rail delivery. Upon reasonable request only, a hard copy bill of lading shall be provided to WNR’s accounting group. Upon each truck delivery from the Terminals, bill of lading information shall be sent electronically through General Electric Information Services Petroex System or other mutually agreeable system.

(d) Transfer documents for each in-tank transfer.

22.2 WRT shall be required to maintain the capabilities to support truck load authorization technologies at each Terminal. However, costs incurred by WRT for periodic

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

software updates, replacement of loading systems or software or other upgrades made at the request of WNR shall be recoverable from WNR either as a lump sum payment or through an increase in terminalling fees. Notwithstanding the foregoing, if an update, replacement or upgrade is made other than at WNR’s request, WRT and WNR shall mutually agree on a fee for such update, replacement or upgrade.

ARTICLE 23

AUDIT AND CLAIMS PERIOD

23.1 Each Party and its duly authorized agents and/or representatives shall have reasonable access to the accounting records and other documents maintained by the other Party which relate to this Agreement, and shall have the right to audit such records at any reasonable time or times during the Term of this Agreement and for a period of up to three years after termination of this Agreement. Claims as to shortage in quantity or defects in quality shall be made by written notice within thirty (30) days after the delivery in question or shall be deemed to have been waived.

ARTICLE 24

LIMITATION ON LIABILITY

24.1 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, incidental, or punitive 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 that the foregoing limitation is not intended and shall not affect special damages imposed in favor of unaffiliated Persons that are not Parties to this Agreement. THE PARTIES AGREE THAT THE RESTRICTIONS AND LIMITATIONS ON DAMAGES CONTAINED HEREIN DO NOT DEPRIVE THE PARTIES OF MINIMUM ADEQUATE REMEDIES UNDER TEXAS UCC SECTION 2-719 OR OTHER APPLICABLE LAW. In addition, WRT shall not be responsible for any loss, damage, demurrage, or expense due to delay in loading or unloading of WNR’s Product or Asphalt except to the extent due to WRT’s gross negligence or willful misconduct.

ARTICLE 25

INDEMNITIES

25.1 Notwithstanding anything else contained in this Agreement, WRT shall release, defend, protect, indemnify, and hold harmless WNR from and against any and all demands, claims (including third party claims), losses, costs, suits, or causes of action (including, but not limited to, any judgments, losses, liabilities, fines, penalties, expenses, interest, reasonable legal fees, costs of suit, and damages, whether in law or equity and whether in contract, tort, or otherwise) for or relating to (i) personal or bodily injury to, or death of the employees of WNR and, as applicable, its Carriers, customers, representatives, and agents, (ii) loss of or damage to any property, products, material, and/or equipment belonging to WNR and, as applicable, its Carriers, customers, representatives, and agents, and each of their respective affiliates, contractors, and subcontractors (except for those volume losses provided for in Article 9), and

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

(iii) loss of or damage to any other property, products, material, and/or equipment of any other description (except for those volume losses provided for in Article 9), and/or personal or bodily injury to, or death of any other person or persons; and with respect to clauses (i) through (iii) above, which is caused by or resulting in whole or in part from the acts and omissions of WRT in connection with the ownership or operation of the Terminals and the services provided hereunder, and, as applicable, its carriers, customers (other than WNR), representatives, and agents, or those of their respective employees with respect to such matters; PROVIDED THAT WRT SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS WNR FROM AND AGAINST ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF WNR.

25.2 Notwithstanding anything else contained in this Agreement, WNR shall release, defend, protect, indemnify, and hold harmless WRT and, and each of its respective affiliates, officers, directors, shareholders, agents, employees, successors-in-interest, and assignees from and against any and all demands, claims (including third-party claims), losses, costs, suits, or causes of action (including, but not limited to, any judgments, losses, liabilities, fines, penalties, expenses, interest, reasonable legal fees, costs of suit, and damages, whether in law or equity and whether in contract, tort, or otherwise) for or relating to (i) personal or bodily injury to, or death of the employees of WRT and, as applicable, its carriers, customers, representatives, and agents; (ii) loss of or damage to any property, products, material, and/or equipment belonging to WRT and, as applicable, its carriers, customers, representatives, and agents, and each of their respective affiliates, contractors, and subcontractors (except for those volume losses provided for in Article 9); (iii) loss of or damage to any other property, products, material, and/or equipment of any other description (except for those volume losses provided for in Article 9), and/or personal or bodily injury to, or death of any other person or persons; and with respect to clauses (i) through (iii) above, which is caused by or resulting in whole or in part from the acts and omissions of WNR, in connection with WNR’s and its customers’ use of the Terminals and the services provided hereunder and WNR’s volumes stored hereunder, and, as applicable, its Carriers, customers, representatives, and agents, or those of their respective employees with respect to such matters; PROVIDED THAT WNR SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS WRT FROM AND AGAINST ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF WRT.

ARTICLE 26

INSURANCE

26.1 At all times during the Term of this Agreement and for a period of two (2) years after termination of this Agreement for any coverage maintained on a “claims-made” basis, WNR and/or its Carrier (if applicable) shall maintain at their expense the insurance in the amounts as may be specified in writing by WRT to WNR. WNR shall require that its Carriers provide such insurance, and WNR shall be liable to WRT for their failure to do so. Such insurance shall provide coverage to WRT and such policies, other than Worker’s Compensation Insurance, shall include WRT as an Additional Insured. Each policy shall provide that it is primary to and not contributory with any other insurance, including any self-insured retention, maintained by WRT (which shall be excess) and each policy shall provide the full coverage

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

required by this Agreement. All such insurance shall be written with carriers and underwriters acceptable to WRT, and eligible to do business in the states where the Terminals are located and having and maintaining an A.M. Best financial strength rating of no less than “A-” and financial size rating no less than “VII”; provided that WNR and/or the Carrier may procure worker’s compensation insurance from the state fund of the state where the Terminal(s) are located.

26.2 All such policies must be endorsed with a Waiver of Subrogation endorsement, effectively waiving rights of recovery under subrogation or otherwise, against WRT, and shall contain where applicable, a severability of interest clause and a standard cross liability clause.

26.3 Upon execution of this Agreement and prior to the operation of any equipment by WNR, Carrier or its authorized drivers at the Terminals, WNR and/or Carrier will furnish to WRT, and at least annually thereafter (or at any other times upon request by WRT) during the Term of this Agreement (and for any coverage maintained on a “claims-made” basis, for two (2) years after the termination of this Agreement), insurance certificates and/or certified copies of the original policies to evidence the insurance required herein, including on behalf of Carrier’s contractors providing authorized vehicles or authorized drivers. Such certificates shall be in the form of the “Accord” Certificate of Insurance, and reflect that they are for the benefit of WRT and shall provide that there will be no material change in or cancellation of the policies unless WRT is given at least thirty (30) days prior written notice. Certificates providing evidence of renewal of coverage shall be furnished to WRT prior to policy expiration.

26.4 WNR and/or Carrier shall be solely responsible for any deductibles or self-insured retention.

ARTICLE 27

GOVERNMENT REGULATIONS

27.1 Product Certification . Each Party certifies that none of the products covered by this Agreement were derived from crude petroleum, petrochemical, or gas which was produced or withdrawn from storage in violation of any federal, state or other governmental law, nor in violation of any rule, regulation or promulgated by any governmental agency having jurisdiction in the premises.

27.2 Applicable Law . The Parties are entering into this Agreement in reliance upon and shall fully comply with all Applicable Law which directly or indirectly affects the products throughput hereunder, or any receipt, throughput delivery, transportation, handling or storage of products hereunder or the ownership, operation or condition of each Terminal. Each Party shall be responsible for compliance with all Applicable Laws associated with such Party’s respective performance hereunder and the operation of such Party’s facilities. In the event any action or obligation imposed upon a Party under this Agreement shall at any time be in conflict with any requirement of Applicable Law, then this Agreement shall immediately be modified to conform the action or obligation so adversely affected to the requirements of the Applicable Law, and all other provisions of this Agreement shall remain effective.

27.3 New Or Changed Applicable Law : If during the Term, any new Applicable Law becomes effective or any existing Applicable Law or its interpretations is materially changed,

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

which change is not addressed by another provision of this Agreement and which has a material adverse economic impact upon a Party, either Party, acting in good faith, shall have the option to request renegotiation of the relevant provisions of this Agreement with respect to future performance. The Parties shall then meet to negotiate in good faith amendments to this Agreement that will conform to the new Applicable Law while preserving the Parties’ economic, operational, commercial and competitive arrangements in accordance with the understandings set forth herein.

ARTICLE 28

SUSPENSION OF REFINERY OPERATIONS

28.1 In the event that WNR decides to permanently or indefinitely suspend, in full or in part, refining operations at any of WNR’s Refineries for a period that shall continue for at least twelve (12) consecutive Months, WNR may provide written notice to WRT of WNR’s intent to terminate or proportionately reduce, as applicable, that part of this Agreement relating to the affected Terminals or other facilities at the end of such twelve (12)-Month period (the “ Suspension Notice ”). Such Suspension Notice shall be effective upon the expiration of the twelve (12)-Month period following the date such notice is sent (the “ Notice Period ”). If, however, WNR provides notice to WRT, more than two Months prior to the expiration of the Notice Period, of its intent to resume operations at the applicable Refinery or portion thereof, then the Suspension Notice shall be deemed revoked and the applicable portion of this Agreement shall continue in full force and effect as if such Suspension Notice had never been delivered.

28.2 During the Notice Period:

(a) WRT may provide terminalling and/or storage services utilizing the affected Terminals pursuant to one or more third party agreements without the consent of WNR; and

(b) WNR’s Minimum Commitments shall be reduced to the extent of third party usage of such capacity provided that WNR shall still have access on a priority basis to the extent there is available capacity.

28.3 Upon the expiration of the Notice Period, then WNR’s Minimum Commitments shall be adjusted to the Adjusted Minimum Commitments for the remaining unaffected Terminals, by deducting the applicable Stipulated Commitments for the Terminal so removed from this Agreement.

ARTICLE 29

RIGHT TO ENTER INTO NEW AGREEMENT; CAPACITY EXPANSION

29.1 Upon termination of this Agreement for reasons other than (a) a default by WNR pursuant to Section 32.1 or (b) any other termination of this Agreement initiated by WNR, WNR shall have the right to require WRT to enter into a new Terminalling, Transportation and Storage Services agreement with WNR that (y) is consistent with the terms and objectives set forth in this Agreement and (z) has commercial terms that are, in the aggregate, substantially similar to fair market value terms as would be agreed by similarly-situated parties negotiating at arm’s length; provided, however; that the term of any such new transportation services agreement shall not extend beyond the term in effect under the previous Agreement at the time of Termination.

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

29.2 In the event that WRT proposes to enter into a Terminalling, Transportation and Storage Services agreement with a third party upon the termination of this Agreement for reasons other than (a) a default by WNR pursuant to Section 32.1 or (b) any other termination of this Agreement initiated by WNR, WRT shall give WNR thirty (30) days’ prior written notice of any proposed new Terminalling, Transportation and Storage Services agreement with a third party, including (x) details of all of the material terms and conditions thereof and (y) a thirty (30)-day period (beginning upon WNR’s receipt of such written notice) (the “ First Offer Period ”) in which WNR may make a good faith offer to enter into a new Terminalling, Transportation and Storage Services agreement with WRT (the “ Right of First Refusal ”). If WNR makes an offer on terms no less favorable to WRT than the third-party offer with respect to such Terminalling, Transportation and Storage Services agreement during the First Offer Period, then WRT shall be obligated to enter into a Terminalling, Transportation and Storage Services agreement with WNR on the terms set forth in the notice. If WNR does not exercise its Right of First Refusal in the manner set forth above, WRT may, for the next thirty (30) days, proceed with the negotiation of the third party Terminalling, Transportation and Storage Services agreement. If WRT and the party with which it is negotiating reach and sign a definitive agreement as to all material terms of a third party Terminalling, Transportation and Storage Services Agreement (the “ Definitive Agreement ”), WRT shall immediately give WNR a full copy of the Definitive Agreement including all schedules and exhibits. WNR shall have thirty (30) days from the date of such notice (the “ Second Offer Period ”) to enter into an agreement with WRT on the same terms and conditions contained in the Definitive Agreement.

29.3 If WRT proposes the construction or acquisition of any new Terminal or related facility that connects to any Terminal facility, any expansion or enhancement of capacity on any existing Terminal or Terminal facility or any construction of new or the expansion of existing storage capacity associated with the Terminal, then:

(a) WRT shall give prior written notice of such proposal to WNR; and

(b) WNR will have a right of first refusal to reserve some portion or all of the additional throughput capacity or storage capacity on commercial terms that are equal or more favorable to WRT than any commercial terms offered to WRT by a third party.

ARTICLE 30

FORCE MAJEURE

30.1 As soon as possible upon the occurrence of a Force Majeure event, WRT shall provide WNR with written notice of the event identifying the affected Terminals and facilities (a “ Force Majeure Notice ”). WRT shall also identify in such Force Majeure Notice the approximate length of time that WRT reasonably believes in good faith such Force Majeure shall continue (the “ Force Majeure Period ”). If WRT 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, then, subject to Article 32 below, at any time after WRT delivers such Force Majeure Notice, either Party may terminate that portion of this Agreement

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

relating to the affected Terminal(s), but only upon delivery to the other Party of a notice (a “ Termination Notice ”) at least twelve (12) Months prior to the effectiveness of such termination; provided, however; that such Termination Notice shall be deemed cancelled and of no effect if the Force Majeure Period ends prior to the expiration of such twelve (12)-Month period.

30.2 If, during the pendency of a Force Majeure event, WRT is unable to meet the Minimum Commitments set forth in this Agreement, then affected commitments hereunder shall be proportionately reduced.

30.3 If this Agreement is terminated as to a Terminal or facility under this Article 30, then WNR’s Minimum Commitments shall be adjusted to the Adjusted Minimum Commitments, by deducting the applicable Stipulated Commitments for the Terminal so removed from this Agreement.

30.4 For the avoidance of doubt, neither Party may exercise its right under this Article 30 to terminate this Agreement as a result of a Force Majeure with respect to any Terminal that has been unaffected by, or has been restored to working order since, the applicable Force Majeure, including pursuant to a Restoration under Article 31.

ARTICLE 31

CAPABILITIES OF FACILITIES

31.1 Interruptions of Service . WRT shall use reasonable commercial efforts to minimize the interruption of service at each Terminal and any portion thereof. WRT shall promptly inform WNR operational personnel of any anticipated partial or complete interruption of service at any Terminal, including relevant information about the nature, extent, cause and expected duration of the interruption and the actions WRT is taking to resume full operations, provided that WRT shall not have any liability for any failure to notify, or delay in notifying, WNR of any such matters except to the extent WNR has been materially prejudiced or damaged by such failure or delay.

31.2 Maintenance and Repair Standards . Subject to Force Majeure and interruptions for routine repair and maintenance, consistent with customary terminal industry standards, WRT shall maintain each Terminal in a condition and with a capacity sufficient to throughput a volume of WNR’s products at least equal to the respective Minimum Commitments for such Terminal. WRT’s obligations may be temporarily suspended during the occurrence of, and for the entire duration of, a Force Majeure or other interruption of service that prevents WRT from terminalling the Minimum Commitments hereunder. To the extent WRT is prevented from terminalling volumes equal to the full Minimum Commitments for reasons of Force Majeure or other interruption of service, then WNR’s obligation to throughput the Minimum Commitments and pay any Shortfall Payment shall be reduced proportionately. At such time as WRT is capable of terminalling volumes equal to the Minimum Commitments, WNR’s obligation to store or throughput these amounts shall be restored. If, for any reason, the throughput or storage capacity of any Terminal should fall below that required by WNR for that Terminal, then within a reasonable period of time after the commencement of such reduction, WRT shall make repairs to the Terminal to restore the Terminal to the storage or throughput capacity required by WNR (“ Restoration ”). Except as provided below in Section 31.3 and 31.4, all of such Restoration shall

 

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be at WRT’s cost and expense, unless the damage creating the need for such repairs was caused by the negligence or willful misconduct of WNR, its employees, agents, representatives or customers.

31.3 Capacity Resolution . In the event of the failure of WRT to maintain any Terminal in a condition and with a capacity sufficient to throughput a volume of WNR’s products as required by WNR, then either Party shall have the right to call a meeting between executives of both Parties by providing at least two (2) Business Days’ advance written notice. Any such meeting shall be held at a mutually agreeable location and will be attended by executives of both Parties each having sufficient authority to commit his or her respective Party to a Capacity Resolution (hereinafter defined). At the meeting, the Parties will negotiate in good faith with the objective of reaching a joint resolution for the Restoration of capacity on the Terminal which will, among other things, specify steps to be taken by WRT to fully accomplish Restoration and the deadlines by which the Restoration must be completed (the “ Capacity Resolution ”). Without limiting the generality of the foregoing, the Capacity Resolution shall set forth an agreed upon time schedule for the Restoration activities. Such time schedule shall be reasonable under the circumstances, consistent with customary terminal industry standards and shall take into consideration WRT’s economic considerations relating to costs of the repairs and WNR’s requirements concerning its refining and marketing operations. WRT shall use commercially reasonable efforts to continue to provide storage and throughput of WNR’s products at the affected Terminal, to the extent the Terminal has capability of doing so, during the period before Restoration is completed. In the event that WNR’s economic considerations justify incurring additional costs to restore the Terminal in a more expedited manner than the time schedule determined in accordance with the preceding sentence, WNR may require WRT to expedite the Restoration to the extent reasonably possible, subject to WNR’s payment, in advance, of the estimated incremental costs to be incurred as a result of the expedited time schedule. Upon completion, WNR shall pay the difference between the actual portion of Restoration costs to be paid by WNR pursuant to this Section 31.3 and the estimated amount paid under the preceding sentence within thirty (30) days after receipt of WRT’s invoice therefor, or, if appropriate, WRT shall pay WNR the excess of the estimate paid by WNR over WRT’s actual costs as previously described within thirty (30) days after completion of the Restoration.

31.4 WNR’s Right To Cure . If at any time after the occurrence of (x) a Partnership Change of Control or (y) a sale of a Refinery, WRT either (i) refuses or fails to meet with WNR within the period set forth in Section 31.3, (ii) fails to agree to perform a Capacity Resolution in accordance with the standards set forth in Section 31.3, or (iii) fails to perform its obligations in compliance with the terms of a Capacity Resolution, WNR may, as its sole remedy for any breach by WRT of any of its obligations under Section 31.3, require WRT to complete a Restoration of the affected Terminal, subject to and to the extent permitted under the terms, conditions and/or restrictions of applicable leases, permits and/or Applicable Law. Any such Restoration required under this Section 31.4 shall be completed by WRT at WNR’s cost. WRT shall use commercially reasonable efforts to continue to provide storage and throughput of WNR’s products at the affected Terminal, during the period while such Restoration is being completed. Any work performed by WRT pursuant to this Section 31.4 shall be performed and completed in a good and workmanlike manner consistent with applicable industry standards and in accordance with all applicable laws, rules and/or regulations. Additionally, during such period

 

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TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

after the occurrence of (x) a Partnership Change of Control or (y) a sale of a Refinery, WNR may exercise any remedies available to it under this Agreement (other than termination), including the right to immediately seek temporary and permanent injunctive relief for specific performance by WRT of the applicable provisions of this Agreement, including, without limitation, the obligation to make Restorations as described herein.

31.5 Commingled Storage . All storage and throughput of WNR’s volumes shall be on a fungible commingled basis, and WRT may commingle such volumes with products of like grade and kind. All tank heels shall be allocated among all storage users on a pro rata basis. WRT shall have the right to enter into arrangements with third parties to throughput and store volumes at each Terminal, provided however, that WRT shall not enter into any third party arrangements that would restrict or limit the ability of WNR to throughput or store the Minimum Product Throughput Commitment, Minimum Asphalt Throughput Commitment, Minimum Product Storage Commitment or Minimum Asphalt Storage Commitment at each Terminal each Month without proration or allocation, on reasonable schedules consistent with WNR’s requirements, and to receive the services provided herein.

31.6 Dedicated Storage . In the event that the Parties determine to use dedicated storage tanks during the Term of this Agreement, such storage tanks and capacities shall be dedicated and used exclusively for the storage and throughput of WNR’s product. For those dedicated tanks, WNR shall be responsible for providing all tank heels required for operation of such tanks.

ARTICLE 32

TERMINATION

32.1 Termination for Default. A Party shall be in default under this Agreement if:

(a) the Party materially breaches any provision of this Agreement and such breach is not cured within twenty (20) Business Days after notice thereof (which notice shall describe such breach in reasonable detail) is received by such Party; or

(b) the Party (i) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Applicable Law, or has any such petition filed or commenced against it which is not withdrawn or dismissed within thirty (30) days, (ii) makes an assignment or any general arrangement for the benefit of creditors, (iii) otherwise becomes bankrupt or insolvent (however evidenced) or (iv) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets which is not withdrawn or dismissed within thirty (30) days.

If any of the Parties is in default as described above, then the non-defaulting Party may: (i) terminate this Agreement upon notice to the defaulting Parties; (ii) withhold any payments due to the defaulting Parties under this Agreement; and/or (iii) pursue any other remedy at law or in equity.

 

28


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

32.2 WNR shall, upon expiration or termination of this Agreement, promptly remove all of its products including any downgraded and interface product from the Terminals within thirty (30) days of such termination or expiration to the extent such removal is possible within this time frame. In the event all of the product is not removed within such thirty (30) day period, WNR shall be assessed storage fees to all products held in storage more than thirty (30) days beyond the termination or expiration of this Agreement until such time WNR’s entire product is removed from the Terminals.

32.3 WNR shall, upon expiration or termination of this Agreement, promptly remove any and all of its owned equipment not purchased by WRT pursuant to Article 20 above, and restore the Terminals to their condition prior to the installation of such equipment.

ARTICLE 33

ASSIGNMENT; PARTNERSHIP CHANGE OF CONTROL

33.1 WNR shall not assign any of its obligations hereunder without WRT’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided , however ; that WNR may assign this Agreement, without WRT’s consent, (a) to an affiliate; provided such assignment shall not relieve WNR of its obligations under this Agreement and (b) in connection with a sale by WNR of a Refinery associated with one of WRT’s Terminals so long as the transferee: (i) agrees to assume all of WNR’s obligations under this Agreement with respect to the associated Terminal(s); and (ii) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by WRT in its reasonable judgment.

33.2 WRT shall not assign any of its rights or obligations under this Agreement without WNR’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided , however, that (i) WRT may assign this Agreement, without WNR’s consent, (a) to an affiliate; provided such assignment shall not relieve WRT of its obligations under this Agreement and (b) in connection with a sale by WRT of one or more of its Terminals so long as the transferee: (A) agrees to assume all of WRT’s obligations under this Agreement with respect to the associated Terminal(s); (B) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by WNR in its reasonable judgment; and (C) is not a competitor of WNR; and (ii) WRT shall be permitted to make a collateral assignment of this Agreement solely to secure working capital financing for WRT.

33.3 If either WNR or WRT assigns its rights or obligations under this Agreement relating to a specific Terminal (other than an assignment to an affiliate), then:

(a) the Minimum Commitments with respect to such Terminal shall be converted to the Adjusted Minimum Commitments, excluding such transferred Terminal; and,

(b) both WNR’s and WRT’s obligations shall continue with respect to the remaining Terminals.

 

29


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

33.4 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.

33.5 WNR’s obligations hereunder shall not terminate in connection with a Partnership Change of Control, provided however, that in the case of a Partnership Change of Control, WNR shall have the option to extend the Term of this Agreement as provided in Article 3.

ARTICLE 34

NOTICE

34.1 All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (i) if by transmission by facsimile or hand delivery, when delivered; (ii) 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; (iii) 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 (iv) if by e-mail, one Business Day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows (or to such other address or to such other person as either Party will have last designated by notice to the other Party):

If to WNR, to:

Attn: President – Refining & Marketing

Western Refining Company, L.P.

Western Refining Southwest, Inc.

1250 W. Washington Street, Suite 101

Tempe, Arizona 85281

Facsimile: 602-683-5736

With a copy to:

Attn: Office of the General Counsel

Western Refining Company, L.P.

Western Refining Southwest, Inc.

Western Refining Wholesale, Inc.

1250 W. Washington Street, Suite 101

Tempe, Arizona 85281

Facsimile: 602-797-2650

 

30


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

If to WRT, to:

Attn: Senior Vice President - Operations

Western Refining Terminals, LLC

1250 W. Washington Street, Suite 101

Tempe, Arizona 85281

Facsimile: 602-683-5737

With a copy to:

Attn: Office of the General Counsel

Western Refining Terminals, LLC

1250 W. Washington Street, Suite 101

Tempe, Arizona 85281

Facsimile: 602-797-2650

ARTICLE 35

CONFIDENTIAL INFORMATION

35.1 The Parties understand and agree that the terms and conditions of this Agreement, all documents referred to herein and all communications between the Parties regarding this Agreement and the Services (collectively, the “ Confidential Information ”) are confidential, shall only be used in connection with this Agreement and shall not, without the other Party’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, be disclosed by a Party to a third party at any time other than to: (i) a Party’s parent, affiliate or subsidiary entities, and their respective officers, directors, employees, accountants, attorneys or consultants; (ii) as may be necessary to enforce their respective rights under this Agreement; (iii) to the extent necessary or required by Laws, legal process, order of court or other judicial body, or pursuant to any government agency, regulatory body or security exchange; or (iv) to a purchaser or potential purchaser of all or substantially all of a Party’s assets or interests or to a potential purchaser of the assets or interest in any Terminal or facility which is under a written obligation of confidentiality to the Party disclosing such information and which agrees to be bound by the non-disclosure provisions herein. Notwithstanding anything herein to the contrary, the Parties may disclose the existence of and general terms regarding the Agreement to third parties, though not specific terms such as pricing, without the need for such consent. Confidential Information shall not include information which is or becomes available to the general public without fault of the receiving Party, was in the possession of the receiving Party on a non-confidential basis prior to receipt from the disclosing Party, is obtained by the receiving Party without confidentiality obligations, or is independently developed by the receiving Party without reference to or use of the disclosing Party’s Confidential Information. The obligations in this Article 35 shall survive the termination of this Agreement for a period of two (2) years.

ARTICLE 36

MISCELLANEOUS

36.1 Modification; Waiver . This Agreement may be terminated, amended or modified only by a written instrument executed by the Parties. Any of the terms and conditions of this Agreement may be waived in writing at any time by the Party entitled to the benefits thereof. No waiver of any of the terms and conditions of this Agreement, or any breach thereof, will be effective unless in writing signed by a duly authorized individual on behalf of the Party against

 

31


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

which the waiver is sought to be enforced. No waiver of any term or condition or of any breach of this Agreement will be deemed or will constitute a waiver of any other term or condition or of any later breach (whether or not similar), nor will such waiver constitute a continuing waiver unless otherwise expressly provided.

36.2 Entire Agreement . This Agreement, together with the Schedules, constitutes the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings of the Parties in connection therewith.

36.3 Governing Law; Jurisdiction . This Agreement shall be governed by the laws of the State of Texas without giving effect to its conflict of laws principles. In the event any dispute between the Parties is not resolved by arbitration as set forth herein, each Party hereby irrevocably submits to the exclusive jurisdiction of any federal court of competent jurisdiction situated in the United States District Court for the Southern District of Texas sitting in Houston, Texas, or if such federal court declines to exercise or does not have jurisdiction, in the district court of Harris County, Texas. The Parties expressly and irrevocably submit to the jurisdiction of said Courts and irrevocably waive any objection which they may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of or relating to this Agreement brought in such Courts, irrevocably waive any claim that any such action, suit or proceeding brought in any such Court has been brought in an inconvenient forum and further irrevocably waive the right to object, with respect to such claim, action, suit or proceeding brought in any such Court, that such Court does not have jurisdiction over such Party. The Parties hereby irrevocably consent to the service of process by registered mail, postage prepaid, or by personal service within or without the State of Texas. Nothing contained herein shall affect the right to serve process in any manner permitted by law.

36.4 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.

36.5 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.

36.6 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.

36.7 ARBITRATION. THE PARTIES AGREE THAT TO THE EXTENT ANY DISPUTE DOES NOT INVOLVE DISPUTED AMOUNTS IN EXCESS OF $1,000,000, ANY SUCH DISPUTE RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE

 

32


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

DECIDED BY CONFIDENTIAL, BINDING NEUTRAL ARBITRATION AS PROVIDED BY TEXAS LAW TO BE CONDUCTED IN ACCORDANCE WITH THE JAMS STREAMLINED ARBITRATION RULES AND PROCEDURES BY A SINGLE NEUTRAL ARBITRATOR. THE PARTIES ARE GIVING UP ANY RIGHTS EACH MIGHT POSSESS TO DISCOVERY AND APPEAL OF SUCH DISPUTES AND TO HAVE SUCH DISPUTES LITIGATED IN A COURT OR BY JURY TRIAL. THE AGREEMENT TO THIS PROVISION IS VOLUNTARY. Unless the Parties agree otherwise, the place of any arbitration shall be Harris County, Texas. The arbitrators shall issue a reasoned written decision and award which shall not include any damages which are prohibited hereunder. The obligations of the Parties under this Section shall survive the expiration or termination of this Agreement. In the event that any dispute involves amounts in excess of $1,000,000, the Parties may litigate the dispute in accordance with the remaining provisions of this Agreement.

36.8 WAIVER OF JURY TRIAL . EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDINGS RELATING TO THIS AGREEMENT OR ANY PERFORMANCE OR FAILURE TO PERFORM OF ANY OBLIGATION HEREUNDER.

36.9 Schedules . Each of the Schedules attached hereto and referred to herein is hereby incorporated in and made a part of this Agreement as if set forth in full herein.

[Remainder of this page intentionally left blank.]

 

33


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

IN WITNESS WHEREOF , the Parties hereto have duly executed this Agreement as of the date first above written.

 

WESTERN REFINING COMPANY, L.P.
By:   Western Refining GP, LLC, its general partner
By:  

/s/ Mark J. Smith

Name:   Mark J. Smith
Title:   Executive Vice President
WESTERN REFINING SOUTHWEST, INC.
By:  

/s/ Gary R. Dalke

Name:   Gary R. Dalke
Title:   Chief Financial Officer
WESTERN REFINING TERMINALS, LLC
By:  

/s/ Lowry Barfield

Name:   Lowry Barfield
Title:   Senior Vice President – Legal, General Counsel and Secretary

Signature Page – Terminalling Agreement

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Schedule 4.1

Minimum Product Commitments

A. Minimum Product Storage Commitment

 

Terminal/Tank Type

   Minimum Product
Storage
Commitment

(barrels)
 

Albuquerque, NM

  

Standard Tankage

     167,516   

Bloomfield, NM

  

Standard Tankage

     606,152   

Gallup, NM

  

Standard Tankage

     839,347   

Bullets & spheres

     64,345   

El Paso, TX

  

Standard Tankage

     4,961,705   

Asphalt Tankage

     131,408   

Bullets & spheres

     88,122   

B. Minimum Product Additive and Blending Commitment

 

Terminal

   Minimum
Additive
Injection
Commitment

(Loading Rack)
(barrels/month)
     Minimum
Additive
Injection
Commitment
(Non-Rack)

(barrels/month)
     Minimum
Ethanol and
Biodiesel
Blending
Commitment
 

Albuquerque, NM

     130,134         —           130,133   

El Paso, TX

     209,261         2,656,010         238,577   

Gallup, NM

     336,045         1,326,761         99,006   

Bloomfield, NM

     214,133         —           110,000   

C. Minimum Product Throughput Commitment

 

Description

   Minimum Product Throughput
Commitment

(barrels/ month)
 

Pipeline Inbound/Outbound

     6,826,633   

Rail Inbound/Outbound

     353,944   

Truck Inbound/Outbound

     1,661,686   

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Schedule 4.2

Minimum Product Fees

A. Minimum Product Storage Reservation Fee

 

Terminal/Tank Type

   Minimum Product
Storage Capacity

(barrels)
     Monthly Rate
($/barrel)
 

Albuquerque, NM

     

Standard Tankage

     167,516         *

Bloomfield, NM

     

Standard Tankage

     606,152         *

Gallup, NM

     

Standard Tankage

     839,347         *

Bullets & spheres

     64,345         *

El Paso, TX

     

Standard Tankage

     4,961,705         *

Asphalt Tankage

     131,408         *

Bullets & spheres

     88,122         *

B. Minimum Product Additive and Blending Fee

 

Description of Services

   Rate
($/barrel)
 

Additive injection fee (loading racks)

   $ *

Additive injection fee (non-rack)

   $ *

Ethanol and biodiesel blending

   $ *

C. Minimum Product Throughput Fee

 

Description

   Rate
($/ barrel)
 

Pipeline Inbound/Outbound

   $ *

Rail Inbound/Outbound

   $ *

Truck Inbound/Outbound

   $ *

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Schedule 5.1

Minimum Asphalt Commitments

A. Minimum Asphalt Storage Commitment

 

Terminal

   Non-Asphalt
Minimum Storage
Commitment

(barrels)
     Asphalt Minimum
Storage
Commitment

(barrels)
 

Albuquerque, NM

     1,462         37,479   

El Paso, TX

     —           202,043   

Phoenix, AZ

     1,475         22,300   

Tucson, AZ

     —           208,709   
  

 

 

    

 

 

 
     2,937         470,531   

B. Minimum Asphalt Throughput Commitment

 

Description

   Minimum Asphalt Throughput
Commitment

(barrels/month)
 

Pipeline Inbound/Outbound

     133,333   

Rail or Truck Inbound/Outbound

     350,000   

C. Minimum Asphalt Processing and Blending Commitment

 

Terminal

   Minimum
Asphalt Air-
Blowing
Commitment
(barrels/month)
     Minimum
Asphalt
Blending
Commitment
(barrels/month)
 

El Paso, TX

     113,333         24,000   

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Schedule 5.2

Minimum Asphalt Fees

A. Minimum Asphalt Storage Reservation Fees

 

Terminal

   Non-Asphalt
Minimum
Storage
Commitment

(barrels)
     Standard
Tankage
Monthly
Rate
($/barrel)
    Asphalt
Minimum
Storage
Commitment

(barrels)
     Asphalt
Tankage
Monthly
Rate
($/barrel)
 

Albuquerque, NM

     1,462         *     37,479         *

El Paso, TX

     —           *     202,043         *

Phoenix, AZ

     1,475         *     22,300         *

Tucson, AZ

     —           *     208,709         *
  

 

 

      

 

 

    
     2,937           470,531      

B. Minimum Asphalt Throughput Fees

 

Description

   Rate
(per barrel)
 

Pipeline Inbound/Outbound

   $ *

Rail or Truck Inbound/Outbound

   $ *

C. Minimum Asphalt Processing and Blending Fees

 

Description of Services

   Rate
(per barrel)
 

Air-blowing (Oxidation)

   $ *

Blending (PPA, Hydrolene ® and other additives)

   $ *

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Schedule 30.3

Stipulated Commitments

A. Stipulated Product Storage Commitment

 

Terminal/Tank Type

   Stipulated Product
Storage
Commitment

(barrels/month)
 

Albuquerque, NM

  

Standard Tankage

     167,516   

Bloomfield, NM

  

Standard Tankage

     606,152   

Gallup, NM

  

Standard Tankage

     839,347   

Bullets & spheres

     64,345   

El Paso, TX

  

Standard Tankage

     4,961,705   

Asphalt Tankage

     131,408   

Bullets & spheres

     88,122   

B. Stipulated Product Throughput Commitment

 

Terminal

   Pipeline In/Out
(barrels/month)
     Rail or Truck
In/Out

(barrels/month)
 

Albuquerque, NM

     96,733         281,600   

El Paso, TX

     5,625,457         653,252   

Gallup, NM

     763,410         765,138   

Bloomfield, NM

     341,033         315,640   

Phoenix, AZ

     —           —     

Tucson, AZ

     —           —     

C. Stipulated Product Additive and Blending Commitment

 

Terminal

   Stipulated
Product Additive
and Blending
Commitment
(barrels/month)
 

Albuquerque, NM

     260,267   

El Paso, TX

     3,103,848   

Gallup, NM

     1,761,812   

Bloomfield, NM

     324,133   

Total:

     5,450,060   

 


TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

D. Stipulated Asphalt Storage Commitment

 

Terminal

   Standard Tankage
Firm Capacity

(barrels/month)
     Asphalt Tankage
Firm Capacity

(barrels/month)
 

Albuquerque, NM

     1,462         37,479   

El Paso, TX

     —           202,043   

Phoenix, AZ

     1,475         22,300   

Tucson, AZ

     —           208,709   
  

 

 

    

 

 

 
     2,937         470,531   

E. Stipulated Asphalt Throughput Commitment

 

Terminal

   Asphalt Pipeline
In/Out

(barrels/month)
     Asphalt Rail or
Truck In/Out

(barrels/month)
 

Albuquerque, NM

     —           37,500   

El Paso, TX

     133,333         133,334   

Gallup, NM

     —           —     

Bloomfield, NM

     —           —     

Phoenix, AZ

     —           108,333   

Tucson, AZ

     —           70,833   

F. Stipulated Asphalt Processing and Blending Commitment

 

Terminal

   Asphalt
Processing and
Blending
(barrels/month)
 

El Paso, TX

     137,333   

 

Exhibit 10.7

WESTERN REFINING LOGISTICS, LP

2013 LONG-TERM INCENTIVE PLAN

Section 1. Purpose of the Plan . The Western Refining Logistics, LP 2013 Long-Term Incentive Plan (the “ Plan ”) has been adopted effective immediately prior to the effective date of the initial public offering of Western Refining Logistics, LP (the “ Effective Date ”) by Western Refining Logistics GP, LLC, a Delaware limited liability company, the general partner (“ General Partner ”) of Western Refining Logistics, LP, a Delaware limited partnership (the “ Partnership ”). The Plan is intended to promote the interests of the General Partner, the Partnership and their Affiliates by providing to Employees, Consultants and Directors incentive compensation awards to encourage superior performance. The Plan is also contemplated to enhance the ability of the General Partner, the Partnership and their Affiliates to attract and retain the services of individuals who are essential for the growth and profitability of the Partnership and to encourage them to devote their best efforts to advancing the business of the Partnership.

Section 2. Definitions . As used in the Plan, the following terms shall have the meanings set forth below:

(a) “ 409A Award ” means an Award that constitutes a “deferral of compensation” within the meaning of the 409A Regulations, whether by design, due to a subsequent modification in the terms and conditions of such Award or as a result of a change in applicable law following the date of grant of such Award, and that is not exempt from Section 409A of the Code pursuant to an applicable exemption.

(b) “ 409A Regulations ” means the applicable Treasury regulations and other interpretive guidance promulgated pursuant to Section 409A of the Code.

(c) “ Affiliate ” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

(d) “ Award ” means an Option, Unit Appreciation Right, Restricted Unit, Phantom Unit, Unit Award, Substitute Award, Other Unit Based Award or Cash Award granted under the Plan or Performance Awards and includes, as appropriate, any tandem DERs granted with respect to an Award (other than a Restricted Unit or Unit Award).

(e) “ Award Agreement ” means the written or electronic agreement by which an Award shall be evidenced.

(f) “ Board ” means the Board of Directors of the General Partner.

(g) “ Cash Award ” means an award denominated in cash.

(h) “ Change of Control ” means, and shall be deemed to have occurred upon one or more of the following events:

(i) any “person” or “group” within the meaning of those terms as used in Sections 13(d) and 14(d)(2) of the Exchange Act, other than members of the General Partner, the


Partnership, or an Affiliate of either the General Partner or the Partnership, shall become the beneficial owner, by way of merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the voting power of the voting securities of the General Partner or the Partnership;

(ii) the limited partners of the General Partner or the Partnership approve, in one transaction or a series of transactions, a plan of complete liquidation of the General Partner or the Partnership;

(iii) the sale or other disposition by either the General Partner or the Partnership of all or substantially all of its assets in one or more transactions to any Person other than an Affiliate;

(iv) the General Partner or an Affiliate of the General Partner or the Partnership ceases to be the general partner of the Partnership;

(v) any event that is a “Corporate Change” under Section 4.5(c)(1),(2), or (3) of the 2010 Incentive Plan of Western Refining, Inc., as amended; or

(vi) any other event specified as a “ Change of Control ” in an applicable Award Agreement.

Notwithstanding the above, with respect to a 409A Award, a “Change of Control” shall not occur unless that Change of Control also constitutes a “change in the ownership of a corporation,” a “change in the effective control of a corporation,” or a “change in the ownership of a substantial portion of a corporation’s assets,” in each case, within the meaning of 1.409A-3(i)(5) of the 409A Regulations, as applied to non-corporate entities.

(i) “ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

(j) “ Committee ” means the Board or such committee as may be appointed by the Board to administer the Plan, which alternative committee may be the board of directors or managers of any Affiliate or a committee therefore.

(k) “ Consultant ” means an individual who renders consulting or advisory services to the General Partner, the Partnership or an Affiliate of either.

(l) “ Director ” means a member of the Board or the board of directors of an Affiliate of the General Partner who is not an Employee or a Consultant (other than in that individual’s capacity as a Director).

(m) “ Distribution Equivalent Right ” or “ DER ” means a contingent right, granted alone or in tandem with a specific Award (other than a Restricted Unit or Unit Award), to receive with respect to each Unit subject to the Award an amount in cash, Units and/or Phantom Units, as determined by the Committee in its sole discretion, equal in value to the distributions made by the Partnership with respect to a Unit during the period such Award is outstanding.

(n) “ Effective Date ” has the meaning set forth in Section 1.

(o) “ Employee ” means an employee of the General Partner or an Affiliate of the General Partner.

(p) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

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(q) “ Fair Market Value ” means, on any relevant date, the closing sales price of a Unit on the principal national securities exchange or other market in which trading in Units occurs on the last market trading day prior to the applicable day (or, if there is no trading in the Units on such date, on the next preceding day on which there was trading) as reported in The Wall Street Journal (or other reporting service approved by the Committee). If Units are not traded on a national securities exchange or other market at the time a determination of Fair Market Value is required to be made hereunder, the determination of Fair Market Value shall be made by the Committee in good faith using a “reasonable application of a reasonable valuation method” within the meaning of the 409A Regulations (specifically, Section 1.409A-l(b)(5)(iv)(B) of the 409A Regulations).

(r) “ General Partner ” has the meaning set forth in Section 1.

(s) “ Option ” means an option to purchase Units granted under the Plan.

(t) “ Other Unit Based Award ” means an Award granted to an Employee, Director or Consultant pursuant to Section 6(f).

(u) “ Participant ” means an Employee, Consultant or Director granted an Award under the Plan.

(v) “ Partnership ” has the meaning set forth in Section 1.

(w) “ Performance Award ” means a right granted to an Employee, Director or Consultant pursuant to Section 6(i), to receive an Award based upon performance criteria specified by the Committee.

(x) “ Person ” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, governmental agency or political subdivision thereof or other entity.

(y) “ Phantom Unit ” means a notional Unit granted under the Plan which upon vesting entitles the Participant to receive, at the time of settlement, a Unit or an amount of cash equal to the Fair Market Value of a Unit, as determined by the Committee in its sole discretion.

(z) “ Plan ” has the meaning set forth in Section 1.

(aa) “ Qualified Member ” means a member of the Committee who is a “nonemployee director” within the meaning of Rule 16b-3(b)(3).

(bb) “ Restricted Period ” means the period established by the Committee with respect to an Award during which the Award remains subject to forfeiture and is either not exercisable by or payable to the Participant, as the case may be.

(cc) “ Restricted Unit ” means a Unit granted under the Plan that is subject to a Restricted Period.

(dd) “ Rule 16b-3 ” means Rule 16b-3 promulgated by the SEC under the Exchange Act or any successor rule or regulation thereto as in effect from time to time.

(ee) “ SEC ” means the Securities and Exchange Commission, or any successor thereto.

(ff) “ Substitute Award ” means an award granted pursuant to Section 6(h) of the Plan.

 

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(gg) “ Unit Distribution Right ” or “ UDR ” means a distribution made by the Partnership with respect to a Restricted Unit.

(hh) “ Unit ” means a common unit of the Partnership.

(ii) “ Unit Appreciation Right ” means a contingent right granted under the Plan that entitles the holder to receive, in cash or Units, as determined by the Committee in its sole discretion, an amount equal to the excess of the Fair Market Value of a Unit on the exercise date of the Unit Appreciation Right (or another specified date) over the exercise price of the Unit Appreciation Right.

(jj) “ Unit Award ” means a grant of a Unit that is not subject to a Restricted Period.

Section 3. Administration .

(a) Authority of the Committee . The Plan shall be administered by the Committee. A majority of the Committee shall constitute a quorum, and the acts of the members of the Committee who are present at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of the Committee in writing, shall be the acts of the Committee. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Units to be covered by Awards; (iv) determine the terms and conditions of any Award, consistent with the terms of the Plan, which terms may include any provision regarding the acceleration of vesting or waiver of forfeiture restrictions or any other condition or limitation regarding an Award, based on such factors as the Committee shall determine, in its sole discretion; (v) determine whether, to what extent, and under what circumstances Awards may be vested, settled, exercised, canceled, or forfeited; (vi) interpret and administer the Plan and any instrument or agreement relating to an Award made under the Plan; (vii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (viii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or an Award Agreement in such manner and to such extent as the Committee deems necessary or appropriate. The determinations of the Committee on the matters referred to in this Section 3(a) shall be final and conclusive.

(b) Manner and Exercise of Committee Authority . At any time that a member of the Committee is not a Qualified Member, any action of the Committee relating to an Award granted or to be granted to a Participant who is then subject to Section 16 of the Exchange Act in respect of the Partnership may be taken either (i) by a subcommittee, designated by the Committee, composed solely of two or more Qualified Members, or (ii) by the Committee but with each such member who is not a Qualified Member abstaining or recusing himself or herself from such action; provided , however , that upon such abstention or recusal the Committee remains composed solely of two or more Qualified Members. Such action, authorized by such a subcommittee or by the Committee upon the abstention or recusal of such non-Qualified Member(s), shall be the action of the Committee for all purposes of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including, without limitation, the General Partner, the Partnership, any Affiliate, any Participant, and any beneficiary of a Participant. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting the power or authority of the Committee. Subject to the Plan and any applicable law, the Committee, in its sole discretion, may delegate any or all of its powers and duties under the Plan, including the power to grant Awards under the Plan, to the Chief

 

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Executive Officer of the General Partner, subject to such limitations on such delegated powers and duties as the Committee may impose, if any, and provided that the Committee may not delegate its duties where such delegation would violate state corporate law, or with respect to making Awards to, or otherwise with respect to Awards granted to, Participants who are subject to Section 16(b) of the Exchange Act. Upon any such delegation, all references in the Plan to the “Committee,” other than in Section 7, shall be deemed to include the Chief Executive Officer. Any such delegation shall not limit the Chief Executive Officer’s right to receive Awards under the Plan; provided , however , the Chief Executive Officer may not grant Awards to himself, a Director or any executive officer of the General Partner or an Affiliate, or take any action with respect to any Award previously granted to himself, an individual who is an executive officer or a Director. Under no circumstances shall any such delegation result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Partnership.

(c) Limitation of Liability . The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the General Partner, the Partnership or their Affiliates, the General Partner’s or the Partnership’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee and any officer or employee of the General Partner, the Partnership or any of their Affiliates acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to this Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the General Partner with respect to any such action or determination.

(d) Exemptions from Section 16(b) Liability . It is the intent of the General Partner that the grant of any Awards to, or other transaction by, a Participant who is subject to Section 16 of the Exchange Act shall be exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 or another applicable exemption (except for transactions acknowledged by the Participant in writing to be non-exempt). Accordingly, if any provision of the Plan or any Award Agreement does not comply with the requirements of Rule 16b-3 or such other exemption as then applicable to any such transaction, such provision shall be construed or deemed amended to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such Participant shall avoid liability under Section 16(b) of the Exchange Act.

Section 4. Units .

(a) Limits on Units Deliverable . Subject to adjustment as provided in Section 4(c) and Section 7, the number of Units that may be delivered with respect to Awards under the Plan is 4,500,000. Units withheld from an Award or surrendered by a Participant to satisfy the Partnership’s or an Affiliate’s tax withholding obligations (including the withholding of Units with respect to Restricted Units) or to satisfy the payment of any exercise price with respect to the Award shall not be considered to be Units delivered under the Plan for this purpose. If any Award is forfeited, cancelled, exercised, settled in cash, or otherwise terminates or expires without the actual delivery of Units pursuant to such Award (the grant of Restricted Units is not a delivery of Units for this purpose), the Units subject to such Award shall again be available for Awards under the Plan (including Units not delivered in connection with the exercise of an Option or Unit Appreciation Right). There shall not be any limitation on the number of Awards that may be granted and paid in cash.

(b) Sources of Units Deliverable Under Awards . Any Units delivered pursuant to an Award shall consist, in whole or in part, of Units acquired in the open market, from any Affiliate, the Partnership or any other Person, or any combination of the foregoing, as determined by the Committee in its discretion.

 

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(c) Anti-dilution Adjustments . Notwithstanding anything contained in Section 7, with respect to any “equity restructuring” event that could result in an additional compensation expense to the General Partner or the Partnership pursuant to the provisions of FASB Accounting Standards Codification, Topic 718 if adjustments to Awards with respect to such event were discretionary, the Committee shall equitably adjust the number and type of Units covered by each outstanding Award and the terms and conditions, including the exercise price and performance criteria (if any), of such Award to equitably reflect such restructuring event and shall adjust the number and type of Units (or other securities or property) with respect to which Awards may be granted after such event. With respect to any other similar event that would not result in an accounting charge under FASB Accounting Standards Codification, Topic 718 if the adjustment to Awards with respect to such event were subject to discretionary action, the Committee shall have complete discretion to adjust Awards in such manner as it deems appropriate with respect to such other event. In the event the Committee makes any adjustment pursuant to the foregoing provisions of this Section 4(c), the Committee shall make a corresponding and proportionate adjustment with respect to the maximum number of Units that may be delivered with respect to Awards under the Plan as provided in Section 4(a) and the kind of Units or other securities available for grant under the Plan.

(d) Additional Issuances . Except as hereinbefore expressly provided, the issuance by the General Partner or the Partnership of Units for cash, property, labor or services, upon direct sale, or upon the conversion of Units or obligations of the General Partner or the Partnership convertible into such Units, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of Units subject to Awards theretofore granted pursuant to the Plan.

Section 5. Eligibility . Any Employee, Consultant or Director shall be eligible to be designated a Participant and receive an Award under the Plan. If the Units issuable pursuant to an Award are intended to be registered with the SEC on Form S-8, then only Employees, Consultants, and Directors of the Partnership or a parent or subsidiary of the Partnership (within the meaning of General Instruction A.1(a) to Form S-8) will be eligible to receive such an Award.

Section 6. Awards .

(a) General . Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 7(a)), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of employment by the Participant, or termination of the Participant’s service relationship with the General Partner, the Partnership, or their Affiliates, and terms permitting a Participant to make elections relating to his or her Award. The Committee shall retain full power and discretion to accelerate, waive or modify, at any time, any term or condition of an Award that is not mandatory under the Plan; provided , however , that the Committee shall not have any discretion to accelerate the terms of payment of any Award that provides for a deferral of compensation under Section 409A the Code and the 409A Regulations if such acceleration would subject a Participant to additional taxes under Section 409A the Code and the 409A Regulations.

(b) Options . The Committee may grant Options that are intended to comply with Section 1.409A-l(b)(5)(i)(A) of the 409A Regulations only to Employees, Consultants or Directors performing services on the date of grant for the Partnership or a corporation or other type of entity in a chain of corporations or other entities in which each corporation or other entity has a “controlling interest” in another corporation or entity in the chain, starting with the Partnership and ending with the corporation or other entity for which the Employee, Consultant or Director performs services. For purposes of this Section 6(b), “controlling interest” means (i) in the case of a corporation, ownership of

 

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stock possessing at least 50% of total combined voting power of all classes of stock of such corporation entitled to vote or at least 50% of the total value of shares of all classes of stock of such corporation; (ii) in the case of a partnership, ownership of at least 50% of the profits interest or capital interest of such partnership; (iii) in the case of a sole proprietorship, ownership of the sole proprietorship; or (iv) in the case of a trust or estate, ownership of an actuarial interest (as defined in Section 1.414(c)-2(b)(2)(ii) of the 409A Regulations) of at least 50% of such trust or estate. The Committee may grant Options that are otherwise exempt from or compliant with Section 409A of the Code to any eligible Employee, Consultant or Director. The Committee shall have the authority to determine the number of Units to be covered by each Option, the purchase price therefore and the Restricted Period and other conditions and limitations applicable to the exercise of the Option, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan.

(i) Exercise Price . The exercise price per Unit purchasable under an Option that does not provide for the deferral of compensation under the 409A Regulations shall be determined by the Committee at the time the Option is granted but, except with respect to Substitute Awards, may not be less than the Fair Market Value of a Unit as of the date of grant of the Option. For purposes of this Section 6(b)(i), the Fair Market Value of a Unit shall be determined as of the date of grant. The exercise price per Unit purchasable under an Option that does not provide for the deferral of compensation by reason of satisfying the short-term deferral rule set forth in the 409A Regulations or that is compliant with Section 409A of the Code shall be determined by the Committee at the time the Option is granted.

(ii) Time and Method of Exercise . The Committee shall determine the exercise terms and the Restricted Period with respect to an Option grant, which may include, without limitation, a provision for accelerated vesting upon the achievement of specified performance goals or other events, and the method or methods by which payment of the exercise price with respect thereto may be made or deemed to have been made, which may include, without limitation, cash, check acceptable to the General Partner, withholding Units from an Award, a “cashless-broker” exercise through procedures approved by the General Partner, or any combination of the above methods, having a Fair Market Value on the exercise date equal to the relevant exercise price.

(iii) Forfeitures . Except as otherwise provided in the terms of the Award Agreement, upon termination of a Participant’s employment or service to the General Partner and its Affiliates or membership on the Board or the board of directors of an Affiliate, whichever is applicable, for any reason during the applicable Restricted Period, all unvested Options shall be forfeited by the Participant. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Options; provided that the waiver contemplated under this Section 6(b)(iii) shall be effective only to the extent that such waiver will not cause the Participant’s Options that are designed to satisfy Section 409A of the Code to fail to satisfy such Section.

(c) Unit Appreciation Rights . The Committee may grant Unit Appreciation Rights that are intended to comply with Section 1.409A-l(b)(5)(i)(B) of the 409A Regulations only to Employees, Consultants or Directors performing services on the date of grant for the Partnership or a corporation or other type of entity in a chain of corporations or other entities in which each corporation or other entity has a “controlling interest” in another corporation or entity in the chain, starting with the Partnership and ending with the corporation or other entity for which the Employee, Consultant or Director performs services. For purposes of this Section 6(c), “controlling interest” means (i) in the case of a corporation, ownership of stock possessing at least 50% of total combined voting power of all classes of stock of such

 

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corporation entitled to vote or at least 50% of the total value of shares of all classes of stock of such corporation; (ii) in the case of a partnership, ownership of at least 50% of the profits interest or capital interest of such partnership; (iii) in the case of a sole proprietorship, ownership of the sole proprietorship; or (iv) in the case of a trust or estate, ownership of an actuarial interest (as defined in Section 1.414(c)-2(b)(2)(ii) of the 409A Regulations) of at least 50% of such trust or estate. The Committee may grant Unit Appreciation Rights that are otherwise exempt from or compliant with Section 409A of the Code to any eligible Employee, Consultant or Director. The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Unit Appreciation Rights shall be granted, the number of Units to be covered by each grant, whether Units or cash shall be delivered upon exercise, the exercise price therefor and the conditions and limitations applicable to the exercise of the Unit Appreciation Rights, including the following terms and conditions and such additional terms and conditions as the Committee shall determine, that are not inconsistent with the provisions of the Plan.

(i) Exercise Price . The exercise price per Unit Appreciation Right that does not provide for the deferral of compensation under the 409A Regulations shall be determined by the Committee at the time the Unit Appreciation Right is granted but, except with respect to Substitute Awards, may not be less than the Fair Market Value of a Unit as of the date of grant of the Unit Appreciation Right. For purposes of this Section 6(c)(i), the Fair Market Value of a Unit shall be determined as of the date of grant. The exercise price per Unit Appreciation Right that does not provide for the deferral of compensation by reason of satisfying the short-term deferral rule set forth in the 409A Regulations or that is compliant with Section 409A of the Code shall be determined by the Committee at the time the Unit Appreciation Right is granted.

(ii) Time of Exercise . The Committee shall determine the Restricted Period and the time or times at which a Unit Appreciation Right may be exercised in whole or in part, which may include, without limitation, accelerated vesting upon the achievement of specified performance goals or other events.

(iii) Forfeitures . Except as otherwise provided in the terms of the Award Agreement, upon termination of a Participant’s employment with or service to the General Partner, the Partnership and their Affiliates or membership on the Board or the board of directors of an Affiliate, whichever is applicable, for any reason during the applicable Restricted Period, all outstanding Unit Appreciation Rights awarded to the Participant shall be automatically forfeited on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Unit Appreciation Rights.

(d) Restricted Units and Phantom Units . The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Restricted Units or Phantom Units shall be granted, the number of Restricted Units or Phantom Units to be granted to each such Participant, the Restricted Period, the conditions under which the Restricted Units or Phantom Units may become vested or forfeited and such other terms and conditions as the Committee may establish with respect to such Awards.

(i) UDRs . To the extent provided by the Committee, in its discretion, a grant of Restricted Units may provide that the distributions made by the Partnership with respect to the Restricted Units shall be subject to the same forfeiture and other restrictions as the Restricted Unit and, if restricted, such distributions shall be held, without interest, until the Restricted Unit vests or is forfeited with the UDR being paid or forfeited at the same time, as the case may be. In addition, the Committee may provide that such distributions be used to acquire additional Restricted Units for the Participant. Such additional Restricted Units may be subject to such vesting and other terms as the Committee may prescribe. Absent such a restriction on the UDRs in the Award Agreement, UDRs shall be paid to the holder of the Restricted Unit without restriction

 

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at the same time as cash distributions are paid by the Partnership to its unitholders. Notwithstanding the foregoing, UDRs shall only be paid in a manner that is either exempt from or in compliance with Section 409A of the Code.

(ii) Forfeitures . Except as otherwise provided in the terms of the applicable Award Agreement, upon termination of a Participant’s employment with or services to the General Partner and its Affiliates or membership on the Board or the board of directors of an Affiliate, whichever is applicable, for any reason during the applicable Restricted Period, all outstanding, unvested Restricted Units and Phantom Units awarded to the Participant shall be automatically forfeited on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Restricted Units and/or Phantom Units; provided that the waiver contemplated under this Section 6(d)(ii) shall be effective only to the extent that such waiver will not cause the Participant’s Restricted Units and/or Phantom Units that are designed to satisfy Section 409A of the Code to fail to satisfy such Section.

(iii) Lapse of Restrictions .

(A) Phantom Units . No later than the 70 th calendar day following the vesting of each Phantom Unit that is not granted as a Performance Award, subject to the provisions of Section 8(b), the Participant shall be entitled to settlement of such Phantom Unit and shall receive one Unit or an amount in cash equal to the Fair Market Value of a Unit (for purposes of this Section 6(f)(iii), as calculated on the last day of the Restricted Period), as determined by the Committee in its discretion.

(B) Restricted Units . Upon the vesting of each Restricted Unit, subject to satisfying the tax withholding obligations of Section 8(b), the Participant shall be entitled to have the restrictions removed from his or her Award so that the Participant then holds an unrestricted Unit.

(e) Unit Awards . The Committee shall have the authority to grant a Unit Award under the Plan to any Employee, Consultant or Director in a number determined by the Committee in its discretion, as a bonus or additional compensation or in lieu of cash compensation the individual is otherwise entitled to receive, in such amounts as the Committee determines to be appropriate.

(f) Other Unit Based Awards . The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Units, as deemed by the Committee to be consistent with the purposes of this Plan, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Units, purchase rights for Units, Awards with value and payment contingent upon performance of the Partnership or any other factors designated by the Committee, and Awards valued by reference to the book value of Units or the value of securities of or the performance of specified Affiliates of the General Partner or the Partnership. The Committee shall determine the terms and conditions of such Awards. Units delivered pursuant to an Award in the nature of a purchase right granted under this Section 6(f) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Units, other Awards, or other property, as the Committee shall determine. Cash awards, as an element of or supplement to, or independent of any other Award under this Plan, may also be granted pursuant to this Section 6(f).

(g) DERs . To the extent provided by the Committee, in its discretion, an Award (other than a Restricted Unit or Unit Award) may include a tandem DER grant, which may provide that such DERs shall be paid directly to the Participant, be reinvested into additional Awards, be credited to a

 

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bookkeeping account (with or without interest in the discretion of the Committee) subject to the same vesting restrictions as the tandem Award, or be subject to such other provisions or restrictions as determined by the Committee in its discretion. Absent a contrary provision in the Award Agreement, DERs shall be paid to the Participant without restriction at the same time as ordinary cash distributions are paid by the Partnership to its unitholders. Notwithstanding the foregoing, DERs shall only be paid in a manner that is either exempt from or in compliance with Section 409A of the Code.

(h) Substitute Awards . Awards may be granted under the Plan in substitution for similar awards held by individuals who become Employees, Consultants or Directors as a result of a merger, consolidation or acquisition by the Partnership or an Affiliate of another entity or the assets of another entity. Such Substitute Awards that are Options or Unit Appreciation Rights may have exercise prices less than the Fair Market Value of a Unit on the date of the substitution if such substitution complies with Section 409A of the Code and the 409A Regulations and other applicable laws and exchange rules.

(i) Performance Awards . The right of a Participant to receive a grant, and the right of a Participant to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to reduce or increase the amounts payable under any Award subject to performance conditions.

(i) Performance Goals Generally . The performance goals for such Performance Awards shall consist of one or more business criteria or individual performance criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 6(i). The Committee may determine that such Performance Awards shall be granted, exercised, and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be achieved as a condition to grant, exercise and/or settlement of such Performance Awards. The Committee shall establish any such performance conditions and goals based on one or more business criteria for the General Partner and/or the Partnership, on a consolidated basis, and/or for specified Affiliates or business or geographical units of the Partnership, as determined by the Committee in its discretion, which may include (but are not limited to) one or more of the following: (A) earnings per Unit; (B) revenues; (C) cash flow; (D) cash flow from operations; (E) cash flow return; (F) return on net assets; (G) return on assets; (H) return on investment; (I) return on capital; (J) return on equity; (K) economic value added; (L) operating margin; (M) contribution margin; (N) net income; (O) net income per Unit; (P) pretax earnings; (Q) pretax earnings before interest, depreciation and amortization; (R) pretax operating earnings after interest expense and before incentives, service fees, and extraordinary or special items; (S) total unitholder return; (T) debt reduction; (U) market share; (V) change in the Fair Market Value of the Units; (W) operating income; (X) gross margin; (Y) price per Unit; (Z) economic value added; (AA) safety record; (BB) environmental compliance; (CC) budget compliance; (DD) cash return on capitalization; (EE) revenue ratios (per service provider or per customer); (FF) return on capital compared to cost of capital; (GG) return on capital employed; (HH) return on invested capital; (II) unitholder value; (JJ) net cash flow; (KK) EBITDA (earnings before interest, income taxes, non-cash impairment loss, depreciation and amortization (or any combination thereof)); (LL) cost reductions and cost ratios; and (MM) any of the above goals determined on an absolute or relative basis or as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of comparable companies. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants.

 

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(ii) Performance Periods . Achievement of performance goals in respect of such Performance Awards shall be measured over a performance period of up to ten years, as specified by the Committee. Performance goals shall be established by the Committtee not later than 90 days after the beginning of any performance period applicable to such Performance Awards.

(iii) Settlement .

(A) At the end of each performance period, the Committee shall determine the amount, if any, of the amount of the potential Performance Award otherwise payable to each Participant. In order to be eligible to receive such payment, the Participant must continue to provide services to the Partnership, the General Partner, or one of their Affiliates through the first January 15 following the end of the performance period (the “ Continuous Service Date ”). Provided that the Participant has met this service requirement, the amount determined by the Committee, if any, shall be paid to the Participant no later than March 15 of the year following the Continuous Service Date. The following example is provided to illustrate the timing of payment provision enumerated in the preceding sentence: If the performance period is the 2013 calendar year then the Participant must continue to provide services to the Partnership, the General Partner, or one of their Affiliates through January 15, 2014 (the Continuous Service Date) and the Performance Award must be settled no later than March 15, 2015.

(B) Settlement of such Performance Awards shall be in cash, Units, other Awards or other property, in the discretion of the Committee. The Committee may, in its discretion, reduce or increase the amount of a settlement otherwise to be made in connection with such Performance Awards. The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant prior to the end of a performance period or settlement of Performance Awards.

(j) Certain Provisions Applicable to Awards .

(i) Stand-Alone, Additional, Tandem and Substitute Awards . Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award granted under the Plan or any award granted under any other plan of the Partnership or any Affiliate. Awards granted in addition to, in substitution for, or in tandem with other Awards or awards granted under any other plan of the Partnership or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards. If an Award is granted in substitution or exchange for another Award, the Committee shall require the surrender of such other Award in consideration for the grant of the new Award. Awards under the Plan may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the General Partner, the Partnership, or any Affiliate, in which the value of Units subject to the Award is equivalent in value to the cash compensation, or in which the exercise price, grant price, or purchase price of the Award in the nature of a right that may be exercised is equal to the Fair Market Value of the underlying Units minus the value of the cash compensation surrendered. Awards granted pursuant to the preceding sentence shall be designed, awarded and settled in a manner that does not result in additional taxes under Section 409A the Code and the 409A Regulations.

(ii) Limits on Transfer of Awards .

(A) Except as provided in Section 6(j)(ii)(C) below, each Option and Unit Appreciation Right shall be exercisable only by the Participant during the Participant’s lifetime, or by the Person to whom the Participant’s rights shall pass by will or the laws of descent and distribution.

 

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(B) Except as provided in Section 6(j)(ii)(C) below, no Award, other than a Unit Award, and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the General Partner, the Partnership or any Affiliate.

(C) To the extent specifically provided by the Committee with respect to an Option or Unit Appreciation Right, an Option or Unit Appreciation Right may be transferred by a Participant without consideration to immediate family members or related family trusts, limited partnerships or similar entities or on such terms and conditions as the Committee may from time to time establish.

(iii) Term of Awards . The term of each Award shall be for such period as may be determined by the Committee.

(iv) Form and Timing of Payment under Awards; Deferrals . Subject to the terms of the Plan and any applicable Award agreement, payments to be made by the General Partner, the Partnership, or any Affiliate upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including without limitation cash, Units, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis; provided , however , that any such deferred payment will be set forth in the agreement evidencing such Award and/or otherwise made in a manner that will not result in additional taxes under Section 409A the Code and the 409A Regulations. Except as otherwise provided herein, the settlement of any Award may be accelerated, and cash paid in lieu of Units in connection with such settlement, in the discretion of the Committee or upon occurrence of one or more specified events (in addition to a Change of Control). Installment or deferred payments may be required by the Committee (subject to Section 7(a) of the Plan, including the consent provisions thereof in the case of any deferral of an outstanding Award not provided for in the original Award Agreement) or permitted at the election of the Participant on terms and conditions established by the Committee and in compliance with Section 409A the Code and the 409A Regulations. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of DERs or other amounts in respect of installment or deferred payments denominated in Units. This Plan shall not constitute an “employee benefit plan” for purposes of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

(v) Issuance of Units . The Units or other securities of the Partnership delivered pursuant to an Award may be evidenced in any manner deemed appropriate by the Committee in its sole discretion, including, but not limited to, in the form of a certificate issued in the name of the Participant or by book entry, electronic or otherwise and shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any stock exchange upon which such Units or other securities are then listed, and any applicable federal or state laws, and the Committee may cause a legend or legends to be inscribed on any such certificates to make appropriate reference to such restrictions.

(vi) Consideration for Grants . Awards may be granted for such consideration, including services, as the Committee shall determine.

(vii) Delivery of Units or other Securities and Payment by Participant of Consideration . Notwithstanding anything in the Plan or any Award Agreement to the contrary, delivery of Units pursuant to the exercise, vesting and/or settlement of an Award may be deferred

 

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for any period during which, in the good faith determination of the Committee, the General Partner is not reasonably able to obtain Units to deliver pursuant to such Award without violating applicable law or the applicable rules or regulations of any governmental agency or authority or securities exchange. No Units or other securities shall be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement (including, without limitation, any exercise price or tax withholding) is received by the General Partner.

(viii) Additional Agreements . Each Employee, Consultant or Director to whom an Award is granted under this Plan may be required to agree in writing, as a condition to the grant of such Award or otherwise, to subject an Award that is exercised or settled following such Person’s termination of services with the General Partner, the Partnership or their Affiliates to a general release of claims and/or a noncompetition and/or non-disparagement agreement in favor of the General Partner, the Partnership, and their Affiliates, with such other terms and conditions of such agreement(s) to be determined in good faith by the Committee.

(ix) Termination of Employment . Except as provided herein, the treatment of an Award upon a termination of employment or any other service relationship by and between a Participant and the General Partner, the Partnership, or any Affiliate shall be specified in the Award Agreement controlling such Award.

(x) Compliance with Law . Each Employee, Consultant or Director to whom an Award is granted under this Plan shall not sell or otherwise dispose of any Unit that is acquired upon grant or vesting of an Award in any manner that would constitute a violation of any applicable federal or state securities laws, the Plan or the rules, regulations or other requirements of the SEC or any stock exchange upon which the Units are then listed.

Section 7. Amendment and Termination . Except to the extent prohibited by applicable law:

(a) Amendments to the Plan and Awards . Except as required by applicable law or the rules of the principal securities exchange, if any, on which the Units are traded, the Board or the Committee may amend, alter, suspend, discontinue, or terminate the Plan in any manner, including increasing the number of Units available for Awards under the Plan, without the consent of any partner, Participant, other holder or beneficiary of an Award, or any other Person. Notwithstanding the foregoing, the Committee may waive any conditions or rights under, amend any terms of, or alter any Award theretofore granted, provided that no change, other than pursuant to Section 7(b), 7(c), 7(d), 7(e), or 7(g) below, in any Award shall materially reduce the rights or benefits of a Participant with respect to an Award without the consent of such Participant.

(b) Subdivision or Consolidation of Units . The terms of an Award and the number of Units authorized pursuant to Section 4 for issuance under the Plan shall be subject to adjustment from time to time, in accordance with the following provisions:

(i) If at any time, or from time to time, the Partnership shall subdivide as a whole (by reclassification, by a Unit split, by the issuance of a distribution on Units payable in Units, or otherwise) or in the event the Partnership distributes an extraordinary cash dividend the number of Units then outstanding into a greater number of Units, then, as appropriate, (A) the maximum number of Units available for the Plan or in connection with Awards as provided in Sections 4 shall be increased proportionately, and the kind of other securities available for the Plan shall be appropriately adjusted, (B) the number of Units (or other kind of securities) that may be acquired under any then outstanding Award shall be increased proportionately, and (C) the price

 

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(including the exercise price) for each Unit (or other kind of securities) subject to then outstanding Awards shall be reduced proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.

(ii) If at any time, or from time to time, the Partnership shall consolidate as a whole (by reclassification, by reverse Unit split, extraordinary repurchase, or otherwise) the number of Units then outstanding into a lesser number of Units, (A) the maximum number of Units for the Plan or available in connection with Awards as provided in Sections 4 shall be decreased proportionately, and the kind of other securities available for the Plan shall be appropriately adjusted, (B) the number of Units (or other kind of securities) that may be acquired under any then outstanding Award shall be decreased proportionately, and (C) the price (including the exercise price) for each Unit (or other kind of securities) subject to then outstanding Awards shall be increased proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.

(iii) Whenever the number of Units subject to outstanding Awards and the price for each Unit subject to outstanding Awards are required to be adjusted as provided in this Section 7(b), the Committee shall promptly prepare a notice setting forth, in reasonable detail, the event requiring adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the change in price and the number of Units, other securities, cash, or property purchasable subject to each Award after giving effect to the adjustments. The Committee shall promptly provide each affected Participant with such notice.

(iv) Adjustments under Sections 7(b)(i) and (ii) shall be made by the Committee, and its determination as to what adjustments shall be made and the extent thereof shall be final, binding, and conclusive. No fractional interest shall be issued under the Plan on account of any such adjustments.

(c) Recapitalizations . If the Partnership recapitalizes, reclassifies its equity securities, or otherwise changes its capital structure (a “ recapitalization ”) without a Change of Control, the number and class of Units covered by an Award theretofore granted shall be adjusted so that such Award shall thereafter cover the number and class of Units and securities to which the holder would have been entitled pursuant to the terms of the recapitalization if, immediately prior to the recapitalization, the holder had been the holder of record of the number of Units then covered by such Award and the Unit limitations provided in Section 4 shall be adjusted in a manner consistent with the recapitalization.

(d) Additional Issuances . Except as expressly provided herein, the issuance by the Partnership of units of any class or securities convertible into units of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of units or obligations of the Partnership convertible into such units or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of Units subject to Awards theretofore granted or the purchase price per Unit, if applicable.

(e) Change of Control . Notwithstanding any other provisions of the Plan or any Award Agreement to the contrary, upon a Change of Control the Committee, acting in its sole discretion without the consent or approval of any holder, may affect one or more of the following alternatives, which may vary among individual holders and which may vary among Awards: (i) remove any applicable forfeiture restrictions on any Award; (ii) accelerate the time of exercisability or the time at which the Restricted Period shall lapse to a specific date, before or after such Change of Control, specified by the Committee; (iii) require the mandatory surrender to the General Partner or the Partnership by selected holders of some or all of the outstanding Awards held by such holders (irrespective of whether such

 

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Awards are then subject to a Restricted Period or other restrictions pursuant to the Plan) as of a date, before or after such Change of Control, specified by the Committee, in which event the Committee shall thereupon cancel such Awards and pay to each holder an amount of cash per Unit equal to the amount calculated in Section 7(f) (the “ Change of Control Price ”) less the exercise price, if any, applicable to such Awards; provided , however , that to the extent the exercise price of an Option or a Unit Appreciation Right exceeds the Change of Control Price, no consideration will be paid with respect to that Award; (iv) cancel Awards that remain subject to a Restricted Period as of the date of a Change of Control without payment of any consideration to the Participant for such Awards; or (v) make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change of Control (including, but not limited to, the substitution of Awards for new awards); provided , however , that the Committee may determine in its sole discretion that no adjustment is necessary to Awards then outstanding.

(f) Change of Control Price . The “ Change of Control Price ” shall equal the amount determined in clause (i), (ii), (iii), (iv) or (v), whichever is applicable, as follows: (i) the per Unit price offered to Unit holders in any merger or consolidation; (ii) the per Unit value of the Units immediately before the Change of Control without regard to assets sold in the Change of Control and assuming the General Partner or the Partnership, as applicable, has received the consideration paid for the assets in the case of a sale of the assets; (iii) the amount distributed per Unit in a dissolution transaction; (iv) the price per Unit offered to Unit holders in any tender offer or exchange offer whereby a Change of Control takes place; or (v) if such Change of Control occurs other than pursuant to a transaction described in clauses (i), (ii), (iii), or (iv) of this Section 7(f), the Fair Market Value per Unit of the Units that may otherwise be obtained with respect to such Awards or to which such Awards track, as determined by the Committee as of the date determined by the Committee to be the date of cancellation and surrender of such Awards. In the event that the consideration offered to unitholders of the Partnership in any transaction described in this Section 7(f) or Section 7(e) consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered which is other than cash.

(g) Impact of Corporate Events on Awards Generally . In the event of changes in the outstanding Units by reason of a recapitalization, reorganization, merger, consolidation, combination, exchange or other relevant change in capitalization occurring after the date of the grant of any Award and not otherwise provided for by this Section 7, any outstanding Awards and any Award Agreements evidencing such Awards shall be subject to adjustment by the Committee at its discretion, which adjustment may, in the Committee’s discretion, be described in the Award Agreement and may include, but not be limited to, adjustments as to the number and price of Units or other consideration subject to such Awards, accelerated vesting (in full or in part) of such Awards, conversion of such Awards into awards denominated in the securities or other interests of any successor Person, or the cash settlement of such Awards in exchange for the cancellation thereof. In the event of any such change in the outstanding Units, the aggregate number of Units available under this Plan may be appropriately adjusted by the Committee, whose determination shall be conclusive.

Section 8. General Provisions .

(a) No Rights to Award . No Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants. The terms and conditions of Awards need not be the same with respect to each recipient.

(b) Tax Withholding . Unless other arrangements have been made that are acceptable to the General Partner or an Affiliate, the Partnership or Affiliate is authorized to deduct, withhold, or cause to be deducted or withheld, from any Award, from any payment due or transfer made under any Award or from any compensation or other amount owing to a Participant the amount (in cash, Units, Units that would otherwise be issued pursuant to such Award or other property) of any applicable taxes payable in respect of the grant or settlement of an Award, its exercise, the lapse of restrictions thereon, or

 

15


any other payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the General Partner or Affiliate to satisfy its withholding obligations for the payment of such taxes. Notwithstanding the foregoing, with respect to any Participant who is subject to Rule 16b-3, such tax withholding automatically shall be effected by the General Partner either by (i) “netting” or withholding Units otherwise deliverable to the Participant on the vesting or payment of such Award, or (ii) requiring the Participant to pay an amount equal to the applicable taxes payable in cash.

(c) No Right to Employment or Services . The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the General Partner or any Affiliate, to continue providing consulting services, or to remain on the Board, as applicable. Furthermore, the General Partner or an Affiliate may at any time dismiss a Participant from employment or his or her service relationship free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan, any Award Agreement or other agreement.

(d) Governing Law . The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware without regard to its conflicts of laws principles.

(e) Severability . If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable law or, if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. If any of the terms or provisions of the Plan or any Award Agreement conflict with the requirements of Rule 16b-3 (as those terms or provisions are applied to Participants who are subject to Section 16(b) of the Exchange Act), then those conflicting terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of Rule 16b-3 (unless the Board or the Committee, as appropriate, has expressly determined that the Plan or such Award should not comply with Rule 16b-3).

(f) Other Laws . The Committee may refuse to issue or transfer any Units or other consideration under an Award if, in its sole discretion, it determines that the issuance or transfer of such Units or such other consideration might violate any applicable law or regulation, the rules of the principal securities exchange on which the Units are then traded, or entitle the Partnership or an Affiliate to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the General Partner by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary.

(g) No Trust or Fund Created . Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the General Partner or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the General Partner or any Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the General Partner or such Affiliate.

(h) No Fractional Units . No fractional Units shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine in its sole discretion whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Units or whether such fractional Units or any rights thereto shall be canceled, terminated, or otherwise eliminated with or without consideration.

 

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(i) Headings . Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

(j) Facility of Payment . Any amounts payable hereunder to any individual under legal disability or who, in the judgment of the Committee, is unable to manage properly his financial affairs, may be paid to the legal representative of such individual, or may be applied for the benefit of such individual in any manner that the Committee may select, and the General Partner shall be relieved of any further liability for payment of such amounts.

(k) Allocation of Costs . Nothing herein shall be deemed to override, amend, or modify any cost sharing arrangement, omnibus agreement, or other arrangement between the General Partner, the Partnership, and any Affiliate regarding the sharing of costs between those entities.

(l) Gender and Number . Words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural.

(m) Compliance with Section 409A . Nothing in the Plan or any Award Agreement shall operate or be construed to cause the Plan or an Award to fail to comply with the requirements of Section 409A of the Code. The applicable provisions of Section 409A the Code and the 409A Regulations are hereby incorporated by reference and shall control over any Plan or Award Agreement provision in conflict therewith. All 409A Awards shall be designed to comply with Section 409A of the Code.

(n) Specified Employee under Section 409A of the Code . Subject to any other restrictions or limitations contained herein, in the event that a “specified employee” (as defined under Section 409A of the Code and the 409A Regulations) becomes entitled to a payment under an Award which is a 409A Award on account of a “separation from service” (as defined under Section 409A of the Code and the 409A Regulations), to the extent required by the Code, such payment shall not occur until the date that is six months plus one day from the date of such separation from service. Any amount that is otherwise payable within the six-month period described herein will be aggregated and paid in a lump sum without interest.

(o) No Guarantee of Tax Consequences . None of the Board, the Committee, the Partnership nor the General Partner makes any commitment or guarantee that any federal, state or local tax treatment will (or will not) apply or be available to any Participant.

Section 9. Term of the Plan . The Plan shall be effective on the date on which it is adopted by the Board and shall continue until the earliest of (i) the date terminated by the Board, (ii) all Units available under the Plan have been delivered to Participants, or (iii) the 10th anniversary of the date the Plan is adopted by the Board. However, any Award granted prior to such termination, and the authority of the Board or Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award, shall extend beyond such termination date.

 

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Exhibit 99.1

 

Investor and Analyst Contact:        Media Contact:
Jeffrey S. Beyersdorfer        Gary Hanson
(602) 286-1530        (602) 286-1777

WESTERN REFINING LOGISTICS, LP

COMPLETES INITIAL PUBLIC OFFERING

EL PASO, Texas – October 9, 2013—Western Refining Logistics, LP (“WNRL”), a Delaware limited partnership and wholly owned subsidiary of Western Refining, Inc. (“Western”) (NYSE:WNR) announced today that it has completed its initial public offering of 15,812,500 common units representing limited partner interests in WNRL, at $22.00 per unit, pursuant to a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission (“SEC”). The number of units issued at closing included 2,062,500 common units issued pursuant to full exercise of the underwriter’s over-allotment option. The common units of WNRL trade on the New York Stock Exchange under the symbol “WNRL”.

Net proceeds received by WNRL from the sale of the 15,812,500 common units totaled approximately $280 million, after deducing the underwriting discount and structuring fee, but before taking into account estimated offering expenses. The public owns a 35% limited partner interest in WNRL following the completion of the offering.

BofA Merrill Lynch and Barclays are acting as lead joint book-running managers and structuring agents for the offering.

Goldman, Sachs & Co. and Wells Fargo Securities are acting as joint book-running managers for this offering, and Credit Suisse, Deutsche Bank Securities, UBS Investment Bank, Credit Agricole CIB and SunTrust Robinson Humphrey are acting as co-managers for this offering.

A registration statement relating to these securities has been filed with, and declared effective by, the SEC. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offer of common units will be made only by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933. A copy of the prospectus relating to the offering may be obtained on the SEC’s web site at http://www.sec.gov under the registrant’s name, “Western Refining Logistics, LP,” or from the offices listed below:

 

BofA Merrill Lynch    Barclays
222 Broadway, 7th Floor    c/o Broadridge Financial Solutions
New York, NY 10038    1155 Long Island Avenue
Attn: Prospectus Department    Edgewood, NY 11717
Email: dg.prospectus_requests@baml.com    Email: Barclaysprospectus@broadridge.com
   Toll free: (888) 603-5847


Goldman, Sachs & Co.    Wells Fargo Securities
Attn: Prospectus Department    Attn: Equity Syndicate Dept.
200 West Street    375 Park Avenue
New York, NY 10282    New York, NY 10152
Email: prospectus-ny@ny.email.gs.com    Email: cmclientsupport@wellsfargo.com
Telephone: (866) 471-2526   

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Western Refining Logistics, LP 1

Headquartered in El Paso, Texas, WNRL is a fee-based, growth oriented Delaware limited partnership recently formed by Western to own, operate, develop, and acquire terminals, storage tanks, pipelines, and other logistics assets.

Forward-Looking Statements

This news release contains “forward-looking statements” which are based on current plans and expectations and involve a number of risks and uncertainties that could cause actual results and events to vary materially, including but not limited to the inability to complete the initial public offering. For a full discussion of these risks and uncertainties, please refer to the “Risk Factors” section of the Registration Statement on Form S-1 initially filed by WNRL on July 25, 2013, and the information included in subsequent amendments and other filings. These forward-looking statements are based on and include our expectations as of the date hereof. Subsequent events and market developments could cause our expectations to change. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if new information becomes available, except as may be required by applicable law.

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1 NOTE: This may be updated to provide a more comprehensive overview of the MLP.