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):
February 22, 2016 (February 22, 2016)
HOLLYFRONTIER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 001-03876 | 75-1056913 | ||
(State of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
2828 N. Harwood, Suite 1300, Dallas, Texas 75201
(Address of Principal Executive Offices)
(214) 871-3555
(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 February 22, 2016, El Dorado Osage LLC (the Company ), an indirect wholly-owned subsidiary of HollyFrontier Corporation ( HollyFrontier ), acquired from Magellan OLP, L.P. ( Magellan ) a 50% limited liability company membership interest (the Osage Membership Interest ) in Osage Pipe Line Company, LLC ( Osage ) in exchange for a 20-year services agreement with HollyFrontier Refining & Marketing LLC ( HFRM ) a wholly-owned subsidiary of HollyFrontier and the direct parent of the Company, whereby Magellan will provide terminalling services for all of HFRMs products originating in Artesia, New Mexico that require terminalling in or through El Paso, Texas. Osage owns the 135-mile Osage pipeline (the Osage Pipeline ) that transports crude oil from Cushing, Oklahoma to El Dorado, Kansas. The other 50% limited liability company membership interest in Osage is owned by CHS Inc.
Immediately following the acquisition, on February 22, 2016, HFRM sold 100% of the limited liability company membership interest of the Company to Holly Energy Partners Operating, L.P. ( HEP Operating ), a wholly-owned subsidiary of Holly Energy Partners, L.P. ( HEP ). In exchange for the Company, HEP Refining Assets, L.P. ( HEP Refining Assets ), a wholly-owned subsidiary of HEP Operating, transferred its refined products terminal in El Paso, Texas and the associated land (the El Paso Hawkins Terminal ) to El Paso Logistics LLC ( El Paso Logistics ), a wholly-owned subsidiary of HollyFrontier. In addition, HEP Operating agreed to engage in the construction and expansion project described in greater detail below. The foregoing transactions are referred to herein as the Transactions .
HollyFrontier controls the general partner of HEP.
Transfer Agreements
In connection with the Transactions, (i) HFRM, as seller, HollyFrontier, as guarantor of certain of HFRMs obligations, HEP Operating, as buyer, and HEP, as guarantor of certain of HEP Operatings obligations, entered into the LLC Interest Purchase Agreement dated February 22, 2016 (the LLC Transfer Agreement ), and (ii) HEP Refining Assets, as seller, HEP, as guarantor of certain obligations of HEP Refining Assets, El Paso Logistics, as buyer, HollyFrontier, as guarantor of certain of obligations of El Paso Logistics, and HEP Operating entered into the Refined Products Terminal Transfer Agreement dated February 22, 2016 (the Terminal Transfer Agreement ).
Pursuant to the LLC Transfer Agreement, HFRM transferred the Company to HEP Operating. Pursuant to the Terminal Transfer Agreement, HEP Refining Assets transferred the El Paso Hawkins Terminal to El Paso Logistics on an as is basis.
The LLC Transfer Agreement provides that if, during any quarter during the five year period commencing on the date on which the HollyFrontier refinery in El Dorado, Kansas (the El Dorado Refinery ) connects to a pipeline other than the Osage Pipeline for the delivery of crude, HFRMs quarterly average daily volume on the Osage Pipeline is less than 105,000 barrels per day, other than as a result of events specified in the agreement, then HFRM will make a payment to HEP Operating as calculated in the agreement (the Volume Shortfall Payment ). Payment periods will toll during any event of force majeure at the El Dorado Refinery.
The LLC Transfer Agreement also provides that if the finally determined fair market value of the Osage Membership Interest (the Membership Interest Value ) is less than the finally determined fair market value of the El Paso Hawkins Terminal (the Terminal Value ), then HFRM will contribute to HEP an amount in cash equal to such difference. If the Membership Interest Value is greater than the Terminal Value (such differential being referred to as the Value Differential ), then HEP will amend its agreement of limited partnership to establish a special partnership interest to be issued to HEPs general partner (the Special General Partner Interest ). The capital account of the Special General Partner Interest would initially be equal to the Value Differential. The Special General Partner Interest would entitle HEPs general partner to allocations of cost recovery deductions available to HEP with respect to the tax basis of the Osage Membership Interest (and the underlying HEP assets attributable thereto) at the Sharing Rate (as defined below) until the capital account of the Special General Partner Interest is reduced to zero. The Sharing Rate is equal to (i) 100% minus (ii) the Terminal Value divided by the Membership Interest Value (expressed as a percentage). The Special General Partner Interest would have no voting or economic rights other than as described above.
The description of each of the LLC Transfer Agreement and the Terminal Transfer Agreement herein is qualified by reference to the copy thereof filed as Exhibit 10.1 and 10.2, respectively, to this report, which is incorporated by reference into this report in its entirety.
Second Amended and Restated Refined Products Pipelines and Terminals Agreement
On February 22, 2016, in connection with the Transactions, HFRM and HEP Operating (directly and as successor in interest to HEP Pipeline Assets, HEP Pipeline, HEP Refining Assets, HEP Refining, HEP Mountain Home and HEP Woods Cross) entered into the Second Amended and Restated Refined Products Pipelines and Terminals Agreement with an effective date of February 22, 2016 (the Second Amended and Restated Refined Products Pipelines and Terminals Agreement ). The Second Amended and Restated Refined Products Pipelines and Terminals Agreement amends and restates in its entirety that certain Amended and Restated Refined Products Pipelines and Terminals Agreement dated December 1, 2009 with an effective date of February 1, 2009, as amended by the First Amendment to Amended and Restated Refined Products Pipelines and Terminals Agreement dated November 7, 2013 with an effective date of September 30, 2013 to, among other things, provide that HEP Operating will construct, at its own expense and on behalf of HFRM, connections from two of HEP Operatings existing pipelines to the fence line of Magellan Midstream Partners, L.P.s terminal in El Paso, Texas and expand the capacity on certain segments of those pipelines (the New Connections ). The Second Amended and Restated Refined Products Pipelines and Terminals Agreement provides that HEP Operating will construct the New Connections as expeditiously as reasonably possible so that the New Connections will be completed and operational not later than September 1, 2017.
The Second Amended and Restated Refined Products Pipelines and Terminals Agreement also (i) provides that HEP Operating will provide transportation services to HFRM with respect to the New Connections and (ii) reduces by $1 million the minimum revenue commitment of HFRM from approximately $12.71 million per contract quarter to approximately $11.71 million per contract quarter.
The description of the Second Amended and Restated Refined Products Pipelines and Terminals Agreement herein is qualified by reference to the copy thereof filed as Exhibit 10.3 to this report, which is incorporated by reference into this report in its entirety.
Fourteenth Amended and Restated Omnibus Agreement
On February 22, 2016, in connection with the Transactions, HollyFrontier, HEP and certain of their respective subsidiaries entered into a Fourteenth Amended and Restated Omnibus Agreement with an effective date of February 22, 2016 (the Fourteenth Amended and Restated Omnibus Agreement ). The Fourteenth Amended and Restated Omnibus Agreement amends and restates in its entirety the Thirteenth Amended and Restated Omnibus Agreement dated effective as of November 1, 2015 to, among other things, subject the Company and the Companys interest in Osage to HollyFrontiers right of first refusal to purchase HEPs assets that serve HollyFrontiers refineries.
The description of the Fourteenth Amended and Restated Omnibus Agreement herein is qualified by reference to the copy thereof filed as Exhibit 10.4 to this report, which is incorporated by reference into this report in its entirety.
Amended and Restated Master Throughput Agreement
On February 22, 2016, in connection with the Transactions, HFRM and HEP Operating entered into the Amended and Restated Master Throughput Agreement with an effective date of February 22, 2016 (the Amended and Restated Master Throughput Agreement ). The Amended and Restated Master Throughput Agreement amends and restates in its entirety the Master Throughput Agreement dated October 16, 2015 with an effective date of January 1, 2015 to, among other things, reduce the incentive tariff threshold for the El Dorado pipelines from 132,000 barrels per day to 125,000 barrels per day and reduce the incentive tariff for the El Dorado pipelines from $0.0758 per barrel to $0.01 per barrel as partial consideration for the Volume Shortfall Payment.
The description of the Amended and Restated Master Throughput Agreement herein is qualified by reference to the copy thereof filed as Exhibit 10.5 to this report, which is incorporated by reference into this report in its entirety.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit
|
Description |
|
10.1 | LLC Interest Purchase Agreement dated February 22, 2016 by and among HollyFrontier Refining & Marketing LLC, HollyFrontier Corporation, Holly Energy Partners Operating, L.P. and Holly Energy Partners, L.P. | |
10.2 | Refined Products Terminal Transfer Agreement dated February 22, 2016 by and among HEP Refining Assets, L.P., Holly Energy Partners, L.P., El Paso Logistics LLC, HollyFrontier Corporation and Holly Energy Partners Operating, L.P. | |
10.3 | Second Amended and Restated Pipelines and Terminals Agreement dated February 22, 2016 by and among HollyFrontier Refining & Marketing LLC, HollyFrontier Corporation, Holly Energy Partners Operating, L.P. and Holly Energy Partners, L.P. | |
10.4 | Fourteenth Amended and Restated Omnibus Agreement dated February 22, 2016 by and among HollyFrontier Corporation, Holly Energy Partners, L.P. and certain of their respective subsidiaries | |
10.5 | Amended and Restated Master Throughput Agreement dated February 22, 2016 by and between HollyFrontier Refining & Marketing LLC and Holly Energy Partners Operating, L.P. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HOLLYFRONTIER CORPORATION | ||
By: |
/s/ Douglas S. Aron |
|
Name: | Douglas S. Aron | |
Title: |
Executive Vice President and Chief Financial Officer |
Date: February 22, 2016
EXHIBIT INDEX
Exhibit
|
Description |
|
10.1 | LLC Interest Purchase Agreement dated February 22, 2016 by and among HollyFrontier Refining & Marketing LLC, HollyFrontier Corporation, Holly Energy Partners Operating, L.P. and Holly Energy Partners, L.P. | |
10.2 | Refined Products Terminal Transfer Agreement dated February 22, 2016 by and among HEP Refining Assets, L.P., Holly Energy Partners, L.P., El Paso Logistics LLC, HollyFrontier Corporation and Holly Energy Partners Operating, L.P. | |
10.3 | Second Amended and Restated Pipelines and Terminals Agreement dated February 22, 2016 by and among HollyFrontier Refining & Marketing LLC, HollyFrontier Corporation, Holly Energy Partners Operating, L.P. and Holly Energy Partners, L.P. | |
10.4 | Fourteenth Amended and Restated Omnibus Agreement dated February 22, 2016 by and among HollyFrontier Corporation, Holly Energy Partners, L.P. and certain of their respective subsidiaries | |
10.5 | Amended and Restated Master Throughput Agreement dated February 22, 2016 by and between HollyFrontier Refining & Marketing LLC and Holly Energy Partners Operating, L.P. |
Exhibit 10.1
Execution Version
LLC INTEREST PURCHASE AGREEMENT
[El Dorado Osage LLC]
by and among
HOLLYFRONTIER REFINING & MARKETING LLC,
as Seller,
with
HOLLYFRONTIER CORPORATION,
as Guarantor
HOLLY ENERGY PARTNERS OPERATING, L.P.,
as Buyer
and
HOLLY ENERGY PARTNERS, L.P.
Solely in Respect of Section 2.2(c)
Effective as of February 22, 2016
TABLE OF CONTENTS
Page | ||||||
ARTICLE I - DEFINED TERMS |
2 | |||||
1.1 |
Definitions |
2 | ||||
1.2 |
Interpretation |
2 | ||||
ARTICLE II - PURCHASE OF LLC INTEREST |
2 | |||||
2.1 |
Transfer of LLC Interest |
2 | ||||
2.2 |
Obligations |
2 | ||||
ARTICLE III - CLOSING |
3 | |||||
3.1 |
Closing |
3 | ||||
3.2 |
Deliveries by Seller |
3 | ||||
3.3 |
Deliveries by Buyer |
4 | ||||
3.4 |
Closing Costs; Transfer Taxes and Fees |
4 | ||||
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF SELLER |
4 | |||||
4.1 |
Organization |
4 | ||||
4.2 |
Authorization |
5 | ||||
4.3 |
Company Status |
5 | ||||
4.4 |
No Conflicts or Violations; No Consents or Approvals Required |
5 | ||||
4.5 |
Absence of Litigation; Compliance with Law |
6 | ||||
4.6 |
Title to LLC Interest; Capitalization |
6 | ||||
4.7 |
No Undisclosed Liabilities |
7 | ||||
4.8 |
No Employees |
7 | ||||
4.9 |
Taxes |
7 | ||||
4.10 |
Brokers and Finders |
7 | ||||
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BUYER |
7 | |||||
5.1 |
Organization |
7 | ||||
5.2 |
Authorization |
7 | ||||
5.3 |
No Conflicts or Violations; No Consents or Approvals Required |
7 | ||||
5.4 |
Absence of Litigation |
8 | ||||
5.5 |
Brokers and Finders |
8 | ||||
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF HOLLYFRONTIER |
8 | |||||
6.1 |
Organization |
8 | ||||
6.2 |
Authorization |
8 | ||||
6.3 |
No Conflicts or Violations; No Consents or Approvals Required |
8 | ||||
6.4 |
Absence of Litigation |
9 | ||||
6.5 |
Brokers and Finders |
9 |
i
ARTICLE VII - COVENANTS |
9 | |||||
7.1 |
Additional Agreements |
9 | ||||
ARTICLE VIII - ADDITIONAL AGREEMENTS |
9 | |||||
8.1 |
Further Assurances |
9 | ||||
ARTICLE IX - INDEMNIFICATION |
9 | |||||
9.1 |
Indemnification of Buyer and Seller |
9 | ||||
9.2 |
Defense of Third-Party Claims |
9 | ||||
9.3 |
Direct Claims |
10 | ||||
9.4 |
Limitations |
10 | ||||
9.5 |
Tax Related Adjustments |
11 | ||||
ARTICLE X - MISCELLANEOUS |
11 | |||||
10.1 |
Expenses |
11 | ||||
10.2 |
Notices |
11 | ||||
10.3 |
Severability |
11 | ||||
10.4 |
Dispute Resolution |
11 | ||||
10.5 |
Governing Law; Jurisdiction; Waiver of Jury Trial |
12 | ||||
10.6 |
Parties in Interest |
12 | ||||
10.7 |
Assignment of Agreement |
12 | ||||
10.8 |
Captions |
12 | ||||
10.9 |
Counterparts |
12 | ||||
10.10 |
Director and Officer Liability |
12 | ||||
10.11 |
Integration |
12 | ||||
10.12 |
Effect of Agreement |
12 | ||||
10.13 |
Amendment; Waiver |
13 | ||||
10.14 |
Survival of Representations and Warranties |
13 | ||||
10.15 |
Waivers and Disclaimers |
13 | ||||
ARTICLE XI - GUARANTEE |
14 | |||||
11.1 |
Payment Guaranty |
14 | ||||
11.2 |
Guaranty Absolute |
14 | ||||
11.3 |
Waiver |
15 | ||||
11.4 |
Subrogation Waiver |
15 | ||||
11.5 |
Reinstatement |
15 | ||||
11.6 |
Continuing Guaranty |
15 | ||||
11.7 |
No Duty to Pursue Others |
15 |
ii
EXHIBITS AND SCHEDULES | ||
Exhibit A - | Definitions | |
Exhibit B - | Interpretation | |
Exhibit C - | Form of Amendment No. 5 | |
Exhibit D - | Form of Assignment | |
Schedule 4.3(a) |
Jurisdictions |
|
Schedule 4.4(a) |
Required Consents Seller |
|
Schedule 4.4(b) |
Required Consents Company |
|
Schedule 4.7 |
Undisclosed Liabilities |
|
Schedule 5.3 |
Required Consents Buyer |
|
Schedule 6.3 |
Required Consents HFC |
iii
LLC INTEREST PURCHASE AGREEMENT
[El Dorado Osage]
THIS LLC INTEREST PURCHASE AGREEMENT (this Agreement ) dated as of February 22, 2016 to be effective as of the Effective Time (as defined below), is made and entered into by and among HOLLYFRONTIER REFINING & MARKETING LLC, a Delaware limited liability company ( Seller ), HOLLYFRONTIER CORPORATION, a Delaware corporation ( HFC ), HOLLY ENERGY PARTNERS OPERATING, L.P. , a Delaware limited partnership ( Buyer ), HOLLY ENERGY PARTNERS, L.P. , a Delaware limited partnership (the Partnership ) and HEP LOGISTICS, L.P. , a Delaware limited liability company ( HEP General Partner ). Seller and Buyer are sometimes referred to in this Agreement each as a Party and collectively as the Parties . HFC joins this Agreement solely for the purpose of Articles VI and XI of this Agreement. The Partnership and HEP General Partner join this Agreement solely in respect of Section 2.2(c) .
WHEREAS , Seller is the sole member of El Dorado Osage LLC, a Delaware limited liability company (the Company );
WHEREAS , the Company is party to that certain Transfer of LLC Membership Interest Agreement by and among an Affiliate of Magellan Pipeline Company, L.P., a Delaware limited partnership, as seller ( Magellan ), and the Company, as buyer, dated the date hereof (the Magellan Agreement ), whereby the Company proposes to acquire a fifty percent (50%) limited liability company membership interest (the Osage Membership Interest ) in Osage Pipe Line Company, LLC, a Delaware limited liability company ( Osage ), pursuant to and on the terms provided in the Magellan Agreement;
WHEREAS , immediately following consummation of the transactions contemplated by the Magellan Agreement, including Sellers acquisition of the Osage Membership Interest, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all of the issued and outstanding limited liability company membership interests of the Company (the LLC Interest ) pursuant to and on the terms provided in this Agreement in exchange for the consideration set forth herein, including the transfer of the El Paso Hawkins Terminal pursuant to that certain Refined Products Terminal Transfer Agreement by and between HEP Refining Assets, L.P., a Delaware limited partnership and Affiliate of Buyer, as seller, and El Paso Logistics LLC, a Delaware limited liability company and Affiliate of Seller, as buyer, dated the date hereof (the Terminal Transfer Agreement );
WHEREAS , in connection with the acquisition of the LLC Interest and in addition to the other transactions contemplated by the Terminal Transfer Agreement, the Parties and their respective Affiliates desire to (i) enter into the Amended and Restated Omnibus Agreement (as defined below), (ii) enter into the Second Amended and Restated Pipelines and Terminals Agreement (as defined below), and (iii) enter into an amendment to the Amended and Restated Master Throughput Agreement (as defined below);
NOW, THEREFORE , in consideration of the foregoing and the covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINED TERMS
1.1. Definitions . Capitalized terms used throughout this Agreement and not otherwise defined herein shall have the meanings set forth on Exhibit A .
1.2. Interpretation . Matters relating to the interpretation of this Agreement are set forth on Exhibit B .
ARTICLE II
PURCHASE OF LLC INTEREST
2.1. Transfer of LLC Interest . Subject to all of the terms and conditions of this Agreement, Seller hereby sells, transfers and conveys to Buyer, and Buyer hereby purchases and acquires from Seller, the LLC Interest, free and clear of all Encumbrances.
2.2. Obligations . In connection with the transfer of the LLC Interest and the other transactions contemplated hereby:
(a) Concurrently with, and in consideration for, the transfer of the LLC Interest to Buyer, Buyer shall cause HEP Refining to transfer to El Paso Logistics the El Paso Hawkins Terminal pursuant to and in accordance with the Terminal Transfer Agreement and enter into the other transactions contemplated by this Agreement.
(b) If during any Contract Quarter during the five (5) year period commencing on the date on which the El Dorado refinery owned and operated by an affiliate of HFC connects to a pipeline other than the Osage Pipeline for the delivery of crude, Sellers Quarterly Average Daily Volume is less than 105,000 bpd for reasons attributable to Seller and not otherwise excused under the applicable tariffs for the Osage Pipeline or by an event of Force Majeure at the El Dorado Refinery (the Volume Shortfall ), Seller will pay to Buyer an amount equal to (a) 50% of the quality-appropriate posted tariff on the Osage Pipeline, per barrel, multiplied by (b) the Volume Shortfall, multiplied by (c) the number of days in such Contract Quarter (excluding any days excused under applicable tariffs for the Osage Pipeline or by an event of Force Majeure at the El Dorado Refinery). Such payment shall be made by Seller within ten (10) Business Days after receipt by Seller of an invoice therefor from Buyer, together with reasonably sufficient supporting documentation. In addition, on at least a Contract Quarter basis, Buyer shall provide Seller will all reasonably necessary reports and documentation supporting any requested payment pursuant to this Section 2.2(d) . Any suspension of the obligations of the Parties to ship on the Osage Pipeline as a result of Force Majeure shall extend the payment period provided for in this Section 2.2(b) (to the extent so affected) for a period equal to the duration of the inability caused by Force Majeure. Seller will be required to pay any amounts accrued and due under this Section 2.2(b) at the time of the Force Majeure event.
(c) Within a reasonable time after the Effective Time, Seller, in cooperation with Buyer, shall obtain an appraisal (the Appraisal ) of the fair market value of the (i) El Paso Hawkins Terminal (the Terminal Value ), and (ii) the Osage Membership Interest (the Membership Interest Value ) from an appraiser or appraisers of national reputation with experience appraising pipelines and terminals selected by Seller and to whom Buyer has no reasonable objection. Seller and Buyer shall each bear one-half of the fees and costs of the Appraisal.
2
(i) If within fifteen (15) days after delivery of the Appraisal to Buyer (the Objection Period ), Buyer has not given Seller written notice of an objection as to the Appraisal (which notice shall state in reasonable detail the basis of Buyers objections (the Objection Notice )), the Appraisal and determination of the Terminal Value and the Membership Interest Value as reflected in the Appraisal will be final, binding and conclusive on the Parties, absent fraud or manifest error.
(ii) In the event that the Terminal Value is less than the Membership Interest Value, the Parties will enter into Amendment No. 5 to First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P. substantially in the form of Exhibit C ( Amendment No. 5 ). In the event that the Terminal Value is more than the Membership Value, neither Party shall have any obligation to enter into Amendment No. 5, and Seller shall contribute to the Partnership an amount in cash equal to the excess of the Terminal Value over the Membership Value.
(iii) If Buyer timely gives Seller an Objection Notice within the Objection Period and if Seller and Buyer fail to resolve the issues raised by the Objection Notice within thirty (30) days after giving the Objection Notice, the Parties shall submit the issues remaining in dispute for resolution to a recognized independent appraisal company acceptable to the Parties (the Independent Appraiser ). The Independent Appraiser shall be directed to resolve only those issues in dispute and render a written report on the resolution of disputed issues with respect to the Terminal Value and/or the Membership Interest Value no later than sixty (60) days after the date on which the Independent Appraiser are engaged. Seller and Buyer shall use commercially reasonable efforts to furnish or cause to be furnished to the Independent Appraiser such documents and information related to the disputed issues as the Independent Appraiser may request and are available to such Party. Seller and Buyer shall each bear one-half of the fees and costs of the Independent Appraiser. The determination of the Terminal Value and the Membership Interest Value as reflected in the Independent Appraisers report will be final, binding and conclusive on the Parties, absent fraud or manifest error.
ARTICLE III
CLOSING
3.1. Closing . The closing of the transactions contemplated hereby (the Closing ) shall take place simultaneously with the execution of this Agreement. The date of the Closing is referred to herein as the Closing Date and the Closing is deemed to be effective as of 12:01 a.m., Dallas, Texas time, on the date hereof (the Effective Time ).
3.2. Deliveries by Seller . At the Closing, Seller shall deliver, or cause to be delivered, to Buyer the following:
(a) A counterpart to the assignment of limited liability company membership interests transferring the LLC Interest to Buyer, substantially in the form of Exhibit D (the Assignment ), duly executed by Seller.
(b) The original minute books, company books and membership registers for the Company.
3
(c) A counterpart of the Second Amended and Restated Refined Products Pipelines and Refined Products Terminals Agreement in a form mutually acceptable to the Parties (the Second Amended and Restated Pipelines and Terminals Agreement ), duly executed by Seller.
(d) A counterpart of the Fourteenth Amended and Restated Omnibus Agreement in a form mutually acceptable to the Parties (the Amended and Restated Omnibus Agreement ), duly executed by HFC and each applicable subsidiary of HFC (excluding the HEP Entities).
(e) A counterpart of the Amended and Master Throughput Agreement in a form mutually acceptable to the Parties (as the same may be amended from time to time hereafter, the Amended and Restated Master Throughput Agreement ), duly executed by HFC and each applicable subsidiary of HFC (excluding the HEP Entities).
(f) Evidence in form and substance satisfactory to Buyer of the release and termination of any Encumbrances on the LLC Interest, if any.
(g) A properly executed certificate, in the form prescribed by Treasury regulations under Section 1445 of the Code, stating that HFC (the person from whom Seller is disregarded as an entity for U.S. federal income tax purposes) is not a foreign person within the meaning of Section 1445 of the Code.
3.3. Deliveries by Buyer . At the Closing (or such later date as may be set forth below), Buyer shall deliver, or cause to be delivered, to Seller the following:
(a) A counterpart of the Assignment duly executed by Buyer.
(b) A counterpart of the Second Amended and Restated Pipelines and Terminals Agreement, duly executed by Buyer.
(c) A counterpart of the Amended and Restated Omnibus Agreement, duly executed by the Partnership and each applicable subsidiary of the Partnership.
(d) A counterpart of the Amended and Restated Master Throughput Agreement, duly executed by the Partnership and each applicable subsidiary of the Partnership.
3.4. Closing Costs; Transfer Taxes and Fees .
(a) Allocation of Costs . Buyer shall pay the cost of all sales, transfer and use taxes arising out of the transfer of the LLC Interest.
(b) Reimbursement . If a Party pays any tax agreed to be borne by the other Party under this Agreement, such other Party shall promptly reimburse the paying Party for the amounts so paid. If any Party receives any tax refund or credit applicable to a tax paid by another Party hereunder, the receiving Party shall promptly pay such amounts to the Party entitled thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that as of the Effective Time:
4.1. Organization . Seller is an entity duly organized, validly existing and in good standing under the Applicable Laws of the State of Delaware.
4
4.2. Authorization . Seller has full limited liability company power and authority to execute, deliver, and perform this Agreement and any Seller Ancillary Documents. The execution, delivery, and performance by Seller of this Agreement and the Seller Ancillary Documents and the consummation by Seller of the transactions contemplated hereby and thereby, have been duly authorized by all necessary limited liability company action of Seller. This Agreement has been duly executed and delivered by Seller and constitutes, and each Seller Ancillary Document executed or to be executed by Seller has been, or when executed will be, duly executed and delivered by Seller and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of Seller, enforceable against it in accordance with their terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Applicable Laws affecting creditors rights and remedies generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances.
4.3. Company Status .
(a) The Company is duly organized, validly existing and in good standing under the laws of the State of Delaware and (i) has all requisite limited liability company power and authority to own, operate, use or lease its properties and assets and to carry on its business as it is now being conducted, and (ii) is duly qualified to do business and is in good standing in each of the jurisdictions in which the ownership, operation or leasing of its properties and assets and the conduct of its business requires it to be so qualified, licensed or authorized, except, in the case of clause (ii), where the failure to have such power and authority or to be so qualified, licensed or authorized would not, individually or in the aggregate, be reasonably likely to cause a Material Adverse Effect on the Company. Schedule 4.3(a) lists all jurisdictions in which the Company is qualified to do business.
(b) The Company does not directly or indirectly, own any interest in any corporation, partnership, limited liability company, limited partnership, joint venture or other business association or entity, foreign or domestic.
(c) The Company was formed for the purpose of acquiring the Osage Membership Interest, has no assets except for the Osage Membership Interest, and has not conducted any business other than the ownership of the Osage Membership Interest.
(d) Seller has made available to Buyer a copy of the certificate of formation and limited liability company agreement of the Company, such copy being complete and correct and in full force and effect on the date hereof, and no amendment or modification of any such document has been filed, recorded or is pending or contemplated. The Company is not in violation of any provision of its certificate of formation or limited liability company agreement.
4.4. No Conflicts or Violations; No Consents or Approvals Required .
(a) The execution, delivery and performance by Seller of this Agreement and the other Seller Ancillary Documents does not, and the consummation of the transactions contemplated hereby and thereby will not, (i) violate, conflict with, or result in any breach of any provision of Sellers organizational documents or (ii) subject to obtaining the Consents or making the registrations, declarations or filings set forth in the last sentence of this Section (a), violate in any material respect any Applicable Law or material Contract binding upon Seller. Except as set forth on Schedule 4.4(a) , no Consent of any Governmental Authority or any other person is required for Seller in connection with Sellers execution, delivery or performance of this Agreement or the Seller Ancillary Documents or consummation of the transactions contemplated hereby or thereby.
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(b) The consummation of the transactions contemplated by this Agreement and the other Seller Ancillary Documents will not, (i) violate, conflict with, or result in any breach of any provision of the Companys organizational documents or (ii) subject to obtaining the Consents or making the registrations, declarations or filings set forth in the next sentence, violate in any material respect any Applicable Law or material contract binding upon the Company. Except as set forth on Schedule 4.4(b) , no Consent of any Governmental Authority or any other person is required for the Company in connection with the performance of this Agreement and the Seller Ancillary Documents or the consummation of the transactions contemplated hereby or thereby.
4.5. Absence of Litigation; Compliance with Law . There is no Action pending or, to the Knowledge of Seller, threatened against (i) the Company or (ii) Seller or any of its Affiliates relating to the transactions contemplated by this Agreement or the Ancillary Documents or which, if adversely determined, would reasonably be expected to materially impair the ability of Seller to perform its obligations and agreements under this Agreement or the Seller Ancillary Documents and to consummate the transactions contemplated hereby and thereby. The Company has operated in compliance with all Applicable Laws except as would not, individually or in the aggregate, be reasonably likely to cause a Material Adverse Effect on the Company.
4.6. Title to LLC Interest; Capitalization .
(a) Seller is the record owner of and has good and valid title to the LLC Interest, free and clear of all Encumbrances, and sole and unrestricted voting power and power of disposition with respect to all of the LLC Interest. Except for any Claims arising under this Agreement and any other agreement entered into by Seller in connection with this Agreement, Seller and its Affiliates have no Claims of any kind against the Company, or any of its officers, managers, directors or employees. The LLC Interest has been duly authorized and validly issued in accordance with Applicable Laws and the organizational documents of the Company, including its limited liability company agreement, and is fully paid (to the extent required by the limited liability company agreement of the Company) and nonassessable (except to the extent such nonassessability may be affected by Sections 18-607 and 18-804 of DLLCA).
(b) There are no options or rights to purchase or acquire, or agreements, arrangements, commitments or understandings relating to, the LLC Interest except pursuant to this Agreement and the Amended and Restated Omnibus Agreement. There are no (i) authorized or outstanding securities of or equity interests in the Company of any kind other than the LLC Interest, (ii) there are no outstanding options, warrants, subscriptions, puts, calls or other rights, agreements, arrangements or commitments (preemptive, contingent or otherwise) obligating Seller or Company to offer, issue, sell, redeem, repurchase, otherwise acquire or transfer, pledge or encumber any securities of or equity interest in the Company; and (iii) there are no outstanding securities or obligations of any kind of any of the Company that are convertible into or exercisable or exchangeable for any equity interest in the Company.
(c) Upon consummation of the transactions contemplated by this Agreement, Buyer will have the entire record and beneficial ownership of the LLC Interest, free and clear of all Encumbrances.
(d) Neither the ROFR Waiver Letter nor the Osage LLC Agreement has been amended, supplemented or otherwise modified. The acquisition by the Company of the Osage
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Membership Interest pursuant to the Magellan Agreement was, and the acquisition of the LLC Interest by Buyer pursuant to this Agreement is, a Proposed Transaction (as defined in the ROFR Waiver Letter) and is permitted under the Osage LLC Agreement without entitling the counterparty thereto to exercise any rights of first refusal or tagalong rights.
4.7. No Undisclosed Liabilities . Except as set forth on Schedule 4.7 , the Company does not now have any indebtedness or liability (whether absolute, accrued, contingent or otherwise) of any nature, other than its obligations under the Magellan Agreement, and (a) neither Seller (or any other HFC Entity, as the case may be) nor to Sellers Knowledge, any counterparty thereto, is in material breach of its obligations under the Magellan Agreement or ROFR Waiver Letter, and (b) neither the Company, nor to Sellers Knowledge, any counterparty thereto, is currently in material breach of its obligations under the Magellan Agreement.
4.8. No Employees . The Company does not now have nor has it ever had any employees.
4.9. Taxes . The Company and Osage have filed, on or before the applicable due date (including any extensions thereof), all material tax returns that they were required to file, and all such tax returns were accurate, correct, and complete in all material respects. All taxes due and owing by the Company and Osage have been paid in full or are being properly contested. The Company is, and at all time since its formation has been, disregarded as an entity separate from Seller for U.S. federal income tax purposes, and no election has been filed on or before the Closing Date that would change such classification on or after the Closing Date. Osage has been and is currently classified as a partnership for purposes of federal and state income tax laws.
4.10. Brokers and Finders . No investment banker, broker, finder, financial advisor or other intermediary has been retained by or is authorized to act on behalf of Seller who is entitled to receive from Buyer any fee or commission in connection with the transactions contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that as of the Effective Time:
5.1. Organization . Buyer is an entity duly organized, validly existing and in good standing under the Applicable Laws of the State of Delaware.
5.2. Authorization . Buyer has full partnership power and authority to execute, deliver, and perform this Agreement and any Buyer Ancillary Documents. The execution, delivery, and performance by Buyer of this Agreement and the Buyer Ancillary Documents and the consummation by Buyer of the transactions contemplated hereby and thereby, have been duly authorized by all necessary partnership action of Buyer. This Agreement has been duly executed and delivered by Buyer and constitutes, and each such Buyer Ancillary Document executed or to be executed Buyer has been, or when executed will be, duly executed and delivered by Buyer and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of Buyer, enforceable against it in accordance with their terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Applicable Laws affecting creditors rights and remedies generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances.
5.3. No Conflicts or Violations; No Consents or Approvals Required . The execution, delivery and performance by Buyer of this Agreement and the Buyer Ancillary Documents does not, and
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consummation of the transactions contemplated hereby and thereby will not, (i) violate, conflict with, or result in any breach of any provisions of Buyers organizational documents or (ii) subject to obtaining the Consents or making the registrations, declarations or filings set forth in the last sentence of this Section 5.3 , violate in any material respect any Applicable Law or material contract binding upon Buyer. Except as set forth on Schedule 5.3 , no Consent of any Governmental Authority or any other person is required for Buyer in connection with the Buyers execution, delivery or performance of this Agreement or the Buyer Ancillary Documents or the consummation of the transactions contemplated hereby and thereby.
5.4. Absence of Litigation . There is no Action pending or, to the Knowledge of Buyer, threatened against Buyer or any of its Affiliates relating to the transactions contemplated by this Agreement or the Buyer Ancillary Documents or which, if adversely determined, would reasonably be expected to materially impair the ability of Buyer to perform its obligations and agreements under this Agreement or the Buyer Ancillary Documents and to consummate the transactions contemplated hereby and thereby.
5.5. Brokers and Finders . No investment banker, broker, finder, financial advisor or other intermediary has been retained by or is authorized to act on behalf of Buyer who is entitled to receive from Seller any fee or commission in connection with the transactions contemplated by this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF HFC
HFC hereby represents and warrants to Buyer and Seller that as of the date of this Agreement:
6.1. Organization . HFC is an entity duly organized, validly existing and in good standing under the Applicable Laws of the State of Delaware.
6.2. Authorization . HFC has full corporate power and authority to execute, deliver, and perform its obligations under Articles VI and XI . The execution, delivery, and performance by HFC of its obligations under this Agreement and the consummation by HFC of the transactions contemplated hereby, have been duly authorized by all necessary corporate action of HFC. This Agreement has been duly executed and delivered by HFC and constitutes a valid and legally binding obligation of HFC with respect to Articles VI and XI , enforceable against it in accordance with their terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Applicable Laws affecting creditors rights and remedies generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances.
6.3. No Conflicts or Violations; No Consents or Approvals Required . The execution, delivery and performance by HFC of its obligations under this Agreement does not, and consummation of the transactions contemplated hereby will not, (i) violate, conflict with, or result in any breach of any provisions of HFCs organizational documents or (ii) subject to obtaining the Consents or making the registrations, declarations or filings set forth in the next sentence, violate any Applicable Law or material contract binding upon HFC. Except as set forth on Schedule 6.3 , no Consent of any Governmental Authority or any other person is required for HFC in connection with the execution, delivery and performance of its obligations this Agreement or the consummation by HFC of the transactions contemplated hereby.
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6.4. Absence of Litigation . There is no Action pending or, to the Knowledge of HFC, threatened against HFC or any of its Affiliates relating to the transactions contemplated by this Agreement or which, if adversely determined, would reasonably be expected to materially impair the ability of HFC to perform its obligations and agreements under this Agreement and to consummate the transactions contemplated hereby.
6.5. Brokers and Finders . No investment banker, broker, finder, financial advisor or other intermediary has been retained by or is authorized to act on behalf of HFC who is entitled to receive from Buyer any fee or commission in connection with the transactions contemplated by this Agreement.
ARTICLE VII
COVENANTS
7.1. Additional Agreements . Subject to the terms and conditions of this Agreement, the Ancillary Documents and the Amended and Restated Omnibus Agreement, each of the Parties shall use its commercially reasonable efforts to do, or cause to be taken all action and to do, or cause to be done, all things necessary, proper, or advisable under Applicable Laws to consummate and make effective the transactions contemplated by this Agreement. If at any time after the Closing Date any further action is necessary or desirable to carry out the purposes of this Agreement, the Parties and their duly authorized representatives shall use commercially reasonable efforts to take all such action.
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1. Further Assurances . After the Closing, each Party shall take such further actions, including obtaining consents to assignment from third parties, and execute such further documents as may be necessary or reasonably requested by the other Parties in order to effectuate the intent of this Agreement and the Ancillary Documents and to provide such other Parties with the intended benefits of this Agreement and the Ancillary Documents.
ARTICLE IX
INDEMNIFICATION
9.1. Indemnification of Buyer and Seller . From and after the Closing and subject to the provisions of this Article IX , (i) Seller agrees to indemnify and hold harmless the Buyer Indemnified Parties from and against any and all Buyer Indemnified Costs and (ii) Buyer agrees to indemnify and hold harmless the Seller Indemnified Parties from and against any and all Seller Indemnified Costs.
9.2. Defense of Third-Party Claims . An Indemnified Party shall give prompt written notice to Seller or Buyer, as applicable (the Indemnifying Party ), of the commencement or assertion of any action, proceeding, demand, or claim by a third party (collectively, a third- party action ) in respect of which such Indemnified Party seeks indemnification hereunder. Any failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it may have to such Indemnified Party under this Article IX unless the failure to give such notice materially and adversely prejudices the Indemnifying Party. The Indemnifying Party shall have the right to assume control of the defense of, settle, or otherwise dispose of such third-party action on such terms as it deems appropriate; provided , however , that:
(a) The Indemnified Party shall be entitled, at its own expense, to participate in the defense of such third-party action ( provided , however , that the Indemnifying Party shall pay the attorneys fees of the Indemnified Party if (i) the employment of separate counsel shall have been authorized in
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writing by the Indemnifying Party in connection with the defense of such third-party action, (ii) the Indemnifying Party shall not have employed counsel reasonably satisfactory to the Indemnified Party to have charge of such third-party action, (iii) the Indemnified Party shall have reasonably concluded that there may be defenses available to such Indemnified Party that are different from or additional to those available to the Indemnifying Party, or (iv) the Indemnified Partys counsel shall have advised the Indemnified Party in writing, with a copy delivered to the Indemnifying Party, that there is a material conflict of interest that could violate applicable standards of professional conduct to have common counsel);
(b) The Indemnifying Party shall obtain the prior written approval of the Indemnified Party before entering into or making any settlement, compromise, admission, or acknowledgment of the validity of such third-party action or any liability in respect thereof if, pursuant to or as a result of such settlement, compromise, admission, or acknowledgment, injunctive or other equitable relief would be imposed against the Indemnified Party or if, in the opinion of the Indemnified Party, such settlement, compromise, admission, or acknowledgment could have a Material Adverse Effect on its business;
(c) The Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by each claimant or plaintiff to each Indemnified Party of a release from all liability in respect of such third-party action; and
(d) The Indemnifying Party shall not be entitled to control (but shall be entitled to participate at its own expense in the defense of), and the Indemnified Party shall be entitled to have sole control over, the defense or settlement, compromise, admission, or acknowledgment of any third-party action (i) as to which the Indemnifying Party fails to assume the defense within a reasonable length of time or (ii) to the extent the third-party action seeks an order, injunction, or other equitable relief against the Indemnified Party which, if successful, would materially adversely affect the business, operations, assets, or financial condition of the Indemnified Party; provided, however, that the Indemnified Party shall make no settlement, compromise, admission, or acknowledgment that would give rise to liability on the part of any Indemnifying Party without the prior written consent of such Indemnifying Party.
The Parties shall extend reasonable cooperation in connection with the defense of any third-party action pursuant to this Article IX and, in connection therewith, shall furnish such records, information, and testimony and attend such conferences, discovery proceedings, hearings, trials, and appeals as may be reasonably requested.
9.3. Direct Claims . In any case in which an Indemnified Party seeks indemnification hereunder which is not subject to Section 9.2 because no third-party action is involved, the Indemnified Party shall notify the Indemnifying Party in writing of any Indemnified Costs which such Indemnified Party claims are subject to indemnification under the terms hereof. Subject to the limitations set forth in Section 9.4(a) , the failure of the Indemnified Party to exercise promptness in such notification shall not amount to a waiver of such claim unless the resulting delay materially prejudices the position of the Indemnifying Party with respect to such claim.
9.4. Limitations . The following provisions of this Section 9.4 shall limit the indemnification obligations hereunder:
(a) Limitation as to Time . The Indemnifying Party shall not be liable for any Indemnified Costs pursuant to this Article IX unless a written claim for indemnification in accordance with Section 9.2 or Section 9.3 is given by the Indemnified Party to the Indemnifying Party with respect thereto on or before 5:00 p.m., Dallas, Texas time, on the anniversary of the Closing Date; provided that the Indemnifying Party shall be liable for Indemnified Costs with respect to claims for indemnification
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for breach of the representations and warranties contained in Sections 4.1 (Organization), 4.2 (Authorization), 4.3(a) (Company Status), 4.6 (Title to LLC Interest; Capitalization), 4.9 (Taxes), 5.1 (Organization), 5.2 (Authorization), 6.1 (Organization) and 6.2 (Authorization), if a written claim for indemnification in accordance with Section 9.2 or Section 9.3 is given by the Indemnified Party to the Indemnifying Party at any time prior to the expiration of the applicable statute of limitations.
(b) Sole and Exclusive Remedy . Each Party acknowledges and agrees that, after the Closing Date, notwithstanding any other provision of this Agreement to the contrary, Buyers and the other Buyer Indemnified Parties and Seller and the other Seller Indemnified Parties sole and exclusive remedy with respect to the Indemnified Costs shall be in accordance with, and limited by, the provisions set forth in this Article IX . The Parties further acknowledge and agree that the foregoing is not the remedy for and does not limit the Parties remedies for matters covered by the indemnification provisions contained in the Amended and Restated Omnibus Agreement.
9.5. Tax Related Adjustments . Seller and Buyer agree that any payment of Indemnified Costs made hereunder by Buyer will be treated by the Parties on their tax returns as an adjustment to the taxable consideration received by Buyer in exchange for the El Paso Hawkins Terminal.
ARTICLE X
MISCELLANEOUS
10.1. Expenses . Except as provided in Section 3.4 of this Agreement, or as provided in the Ancillary Documents or the Amended and Restated Omnibus Agreement, all costs and expenses incurred by the Parties in connection with the consummation of the transactions contemplated hereby shall be borne solely and entirely by the Party which has incurred such expense.
10.2. Notices . Any notice or other communication given under this Agreement shall be in writing and shall be provided in the manner, and deemed delivered at the time, set forth in the Amended and Restated Omnibus Agreement.
10.3. Severability . If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced under Applicable Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated herein are not affected in any manner adverse to any Party. Upon such determination that any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated herein are consummated as originally contemplated to the fullest extent possible.
10.4. Dispute Resolution . Any Dispute arising out of or in connection with this Agreement, including any question regarding the existence, or validity or termination of this Agreement, shall be exclusively resolved in accordance with the provisions relating to dispute resolution set forth in the Amended and Restated Omnibus Agreement. Pending resolution of any Dispute between the Parties, the Parties shall continue to perform in good faith their respective obligations under this Agreement based upon the last agreed performance demonstrated prior to the Dispute.
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10.5. Governing Law; Jurisdiction; Waiver of Jury Trial . This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federal courts in the State of Texas and to venue in Dallas, Texas. EACH OF THE PARTIES IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
10.6. Parties in Interest . This Agreement shall be binding upon and inure solely to the benefit of each Party and their successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement.
10.7. Assignment of Agreement . At any time, the Parties may make a collateral assignment of their rights under this Agreement to any of their bona fide lenders or debt holders, or a trustee or a representative for any of them, and the non-assigning Parties shall execute an acknowledgment of such collateral assignment in such form as may from time to time be reasonably requested; provided, however , that unless written notice is given to the non-assigning Parties that any such collateral assignment has been foreclosed upon, such non-assigning Parties shall be entitled to deal exclusively with Seller or HFC, as the case may be, as to any matters arising under this Agreement, the Ancillary Documents or the Amended and Restated Omnibus Agreement (other than for delivery of notices required by any such collateral assignment). Except as otherwise provided in this Section 10.7 , neither this Agreement nor any of the rights, interests, or obligations hereunder may be assigned by any Party without the prior written consent of the other Parties.
10.8. Captions . The captions in this Agreement are for purposes of reference only and shall not limit or otherwise affect the interpretation hereof.
10.9. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
10.10. Director and Officer Liability . The directors, managers, officers, partners and stockholders of HFC, Buyer, Seller and their respective Affiliates shall not have any personal liability or obligation arising under this Agreement (including any claims that another party may assert) other than, if applicable, as a direct party to or as an assignee of this Agreement or pursuant to a written guarantee.
10.11. Integration . This Agreement and the Ancillary Documents supersede any previous understandings or agreements among the Parties, whether oral or written, with respect to their subject matter. This Agreement and the Ancillary Documents contain the entire understanding of the Parties with respect to the subject matter hereof and thereof. 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 or the Ancillary Documents unless it is contained in a written amendment hereto or thereto and executed by the Parties hereto or thereto after the date of this Agreement or the Ancillary Documents. To the extent that there is any conflict between the Ancillary Documents and this Agreement, this Agreement shall prevail.
10.12. Effect of Agreement . The Parties ratify and confirm that except as otherwise expressly provided herein, in the event this Agreement conflicts in any way with the Amended and Restated Omnibus Agreement, the terms and provisions of the Amended and Restated Omnibus Agreement shall control.
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10.13. Amendment; Waiver . This Agreement may be amended only in a writing signed by all parties hereto. Any waiver of rights hereunder must be set forth in writing. A waiver of any breach or failure to enforce any of the terms or conditions of this Agreement shall not in any way affect, limit or waive any partys rights at any time to enforce strict compliance thereafter with every term or condition of this Agreement.
10.14. Survival of Representations and Warranties . The representations and warranties set forth in this Agreement shall survive the Closing until 5:00 p.m., Dallas, Texas time on, on the anniversary of the Closing Date, except that the representations and warranties contained in Sections 4.1 (Organization), 4.2 (Authorization), 4.3(a) (Company Status), 4.6 (Title to LLC Interest; Capitalization), 4.9 (Taxes), 5.1 (Organization), 5.2 (Authorization), 6.1 (Organization) and 6.2 (Authorization) shall survive until the expiration of the applicable statute of limitations; provided, however, that any representation and warranty that is the subject of a claim for indemnification hereunder which claim was timely made pursuant to Section 9.4(a) shall survive with respect to such claim until such claim is finally paid or adjudicated.
10.15. WAIVERS AND DISCLAIMERS . NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES AND OTHER COVENANTS AND AGREEMENTS MADE BY THE PARTIES IN THIS AGREEMENT AND THE ANCILLARY DOCUMENTS AND THE AMENDED AND RESTATED OMNIBUS AGREEMENT, THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS MADE, DOES NOT MAKE, AND EACH SUCH PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (I) THE VALUE, NATURE, QUALITY OR CONDITION OF THE LLC INTEREST OR ANY ASSETS OWNED BY OSAGE, (II) THE INCOME TO BE DERIVED FROM THE LLC INTEREST OR THE ASSETS OWNED BY OSAGE, (III) THE SUITABILITY OF THE ASSETS OWNED BY OSAGE FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREWITH, (IV) THE COMPLIANCE OF OR BY THE ASSETS OWNED BY OSAGE OR THEIR OPERATION WITH ANY APPLICABLE LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING, ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (V) THE MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE ASSETS OWNED BY OSAGE. EXCEPT TO THE EXTENT PROVIDED IN THIS AGREEMENT THE ANCILLARY DOCUMENTS OR THE AMENDED AND RESTATED OMNIBUS AGREEMENT, NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE LLC INTEREST, THE COMPANY OR THE ASSETS OF OSAGE FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EXCEPT TO THE EXTENT PROVIDED IN THIS AGREEMENT THE ANCILLARY DOCUMENTS OR THE AMENDED AND RESTATED OMNIBUS AGREEMENT, EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE TRANSFER AND CONVEYANCE OF THE LLC INTEREST SHALL BE MADE IN AN AS IS, WHERE IS CONDITION WITH ALL FAULTS, AND THE LLC INTEREST IS TRANSFERRED AND CONVEYED SUBJECT TO ALL OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE THE TRANSFER AND CONVEYANCE OF THE LLC INTEREST OR THE TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES, WHETHER
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EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE LLC INTEREST, THE COMPANY OR THE ASSETS OF OSAGE THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE, EXCEPT AS SET FORTH IN THIS AGREEMENT THE ANCILLARY DOCUMENTS OR THE AMENDED AND RESTATED OMNIBUS AGREEMENT.
ARTICLE XI
GUARANTEE
11.1. Payment Guaranty . HFC unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to Buyer the punctual and complete payment in full when due of all Buyer Indemnified Costs by the Indemnifying Party under this Agreement (collectively, the Payment Obligations ). HFC agrees that Buyer shall be entitled to enforce directly against HFC any of the Payment Obligations.
11.2. Guaranty Absolute . HFC hereby guarantees that the Payment Obligations will be paid strictly in accordance with the terms of this Agreement. The obligations of HFC under this Agreement constitute a present and continuing guaranty of payment, and not of collection or collectability. The liability of HFC under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:
(a) any assignment or other transfer of the Agreement or any of the rights thereunder of Buyer;
(b) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to the Agreement;
(c) any acceptance by Buyer of partial payment or performance from the Indemnifying Party;
(d) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to the Indemnifying Party, or any action taken with respect to the Agreements by any trustee or receiver, or by any court, in any such proceeding;
(e) any absence of any notice to, or Knowledge of, HFC, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (a) through (d); or
(f) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.
The obligations of HFC hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Payment Obligations or otherwise.
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11.3. Waiver . HFC hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the Payment Obligations and any requirement for Buyer to protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against the Indemnifying Party, any other entity or any collateral.
11.4. Subrogation Waiver . HFC agrees that it shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from the Indemnifying Party for any payments made by HFC under this Article XI until all Payment Obligations have been indefeasibly paid, and HFC hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter acquire against the Indemnifying Party until all Payment Obligations have been indefeasibly paid.
11.5. Reinstatement . The obligations of HFC under this Article XI shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Payment Obligations is rescinded or must otherwise be returned to the Indemnifying Party or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of the Indemnifying Party or such other entity, or for any other reason, all as though such payment had not been made.
11.6. Continuing Guaranty . This Article XI is a continuing guaranty and shall (i) remain in full force and effect until the first to occur of the indefeasible payment in full of all of the Payment Obligations, (ii) be binding upon HFC, its successors and assigns and (iii) inure to the benefit of and be enforceable by Buyer and its successors, transferees and assigns.
11.7. No Duty to Pursue Others . It shall not be necessary for Buyer (and HFC hereby waives any rights which HFC may have to require Buyer), in order to enforce such payment by HFC, first to (i) institute suit or exhaust its remedies against the Indemnifying Party or others liable on the Payment Obligations or any other person, (ii) enforce Buyers rights against any other guarantors of the Payment Obligations, (iii) join the Indemnifying Party or any others liable on the Payment Obligations in any action seeking to enforce this Article XI , (iv) exhaust any remedies available to Buyer against any security which shall ever have been given to secure the Payment Obligations, or (v) resort to any other means of obtaining payment of the Payment Obligations.
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IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the Effective Time.
SELLER : | ||||||
HOLLYFRONTIER REFINING & MARKETING LLC | ||||||
By: |
/s/ George J. Damiris |
|||||
George J. Damiris | ||||||
Chief Executive Officer and President | ||||||
BUYER : | ||||||
HOLLY ENERGY PARTNERS OPERATING, L.P. | ||||||
By: |
/s/ Michael C. Jennings |
|||||
Michael C. Jennings | ||||||
Chief Executive Officer |
ACKNOWLEDGED AND AGREED FOR | ||
THE PURPOSES ONLY OF ARTICLES VI and XI : | ||
HOLLYFRONTIER CORPORATION | ||
By: |
/s/ George J. Damiris |
|
George J. Damiris | ||
Chief Executive Officer and President |
[Signature Page to LLC Interest Purchase Agreement]
ACKNOWLEDGED AND AGREED FOR | ||
THE PURPOSES ONLY OF SECTION 2.2(c) : | ||
HOLLY ENERGY PARTNERS, L.P. | ||
By: | HEP Logistics Holdings, L.P., | |
its General Partner | ||
By: | Holly Logistic Services, L.L.C., | |
its General Partner | ||
By: |
/s/ Michael C. Jennings |
|
Michael C. Jennings | ||
Chief Executive Officer | ||
HEP LOGISTICS, L.P. | ||
By: |
/s/ Michael C. Jennings |
|
Michael C. Jennings | ||
Chief Executive Officer |
[Signature Page to LLC Interest Purchase Agreement]
EXHIBIT A
to
LLC INTEREST PURCHASE AGREEMENT
Definitions
Action means any claim, action, suit, investigation, inquiry, proceeding, condemnation or audit by or before any court or other Governmental Authority or any arbitration proceeding.
Affiliate means, with respect to a specified person, any other person controlling, controlled by or under common control with that first person. As used in this definition, the term control includes (i) with respect to any person having voting securities or the equivalent and elected directors, managers or persons performing similar functions, the ownership of or power to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the power to vote in the election of directors, managers or persons performing similar functions, (ii) ownership of 50% or more of the equity or equivalent interest in any person and (iii) the ability to direct the business and affairs of any person by acting as a general partner, manager or otherwise. Notwithstanding the foregoing, no HollyFrontier Entity will be considered an Affiliate of an HEP Entity, and no HEP Entity will be considered an Affiliate of a HFC Entity.
Agreement has the meaning set forth in the Preamble.
Amended and Restated Omnibus Agreement has the meaning set forth in Section 3.2(d) .
Amendment No. 5 has the meaning set forth in Section 2.2(c)(ii) .
Ancillary Documents means, collectively, the Buyer Ancillary Documents and the Seller Ancillary Documents.
Applicable Law means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, without limitation, all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question.
Appraisal has the meaning set forth in Section 2.2(c) .
Assignment has the meaning set forth in Section 3.2(a) .
bpd means barrels per day.
Business Day means any day other than Saturday, Sunday or other day upon which commercial banks in Dallas, Texas are authorized by law to close.
Buyer has the meaning set forth in the Preamble.
Buyer Ancillary Documents means each agreement, document, instrument or certificate to be delivered by Buyer, or their Affiliates, at the Closing pursuant to Section 3.3 and each other document or Contract entered into by Buyer, or the Partnership, or their Affiliates, in connection with this Agreement or the Closing.
Exhibit A-1
Buyer Indemnified Costs means, subject to Article IX , any and all damages, losses, Claims, assessments, judgments, liabilities, demands, charges, suits, penalties, costs, and expenses (including court costs and reasonable attorneys fees and expenses incurred in investigating and preparing for any litigation or proceeding) that any of the Buyer Indemnified Parties incurs and that arise out of or relate to any breach of a representation, warranty or covenant of Seller under this Agreement. Notwithstanding anything in the foregoing to the contrary, Buyer Indemnified Costs shall exclude any and all indirect, consequential, punitive, or exemplary damages (other than those that are a result of (a) a third-party action for such indirect, consequential, punitive or exemplary damages, or (b) the gross negligence or willful misconduct of Seller or, to the extent occurring before the Closing Date, the Company).
Buyer Indemnified Parties means Buyer and the Partnership and each officer, director, partner, manager, employee, consultant, stockholder, and Affiliate of Buyer and the Partnership, including, without limitation, the Company.
Claim means any existing or threatened future claim, demand, suit, action, investigation, proceeding, governmental action or cause of action of any kind or character (in each case, whether civil, criminal, investigative or administrative), known or unknown, under any theory, including those based on theories of contract, tort, statutory liability, strict liability, employer liability, premises liability, products liability, breach of warranty or malpractice.
Closing has the meaning set forth in Section 3.1 .
Closing Date has the meaning set forth in Section 3.1 .
Code means the Internal Revenue Code of 1986, as amended.
Company has the meaning set forth in the Recitals.
Consents means all notices to, authorizations, consents, Orders or approvals of, or registrations, declarations or filings with, or expiration of waiting periods imposed by, any Governmental Authority, and any notices to, consents or approvals of any other third party, in each case that are required by Applicable Law or by Contract in order to consummate the transactions contemplated by this Agreement and the Ancillary Documents.
Contract means any written or oral contract, agreement, indenture, instrument, note, bond, loan, lease, mortgage, franchise, license agreement, purchase order, binding bid or offer, binding term sheet or letter of intent or memorandum, commitment, letter of credit or any other legally binding arrangement, including any amendments or modifications thereof and waivers relating thereto.
Contract Quarter means each three-month calendar quarter, commencing January 1, 2016.
Dispute means any dispute or difference that arises between the Parties in connection with or arising out of this Agreement (including, any dispute as to the termination or invalidity of this Agreement or any provision of it).
DLLCA means the Delaware Limited Liability Company Act, 6 Del.C. §18-101 et seq ., as amended from time to time.
Exhibit A-2
Effective Time has the meaning set forth in Section 3.1 .
El Dorado Refinery means the petroleum refinery owned by HollyFrontier El Dorado Refining LLC and located in El Dorado, Kansas.
El Paso Hawkins Terminal has the meaning set forth in the Terminal Transfer Agreement.
El Paso Logistics means El Paso Logistics LLC, a Delaware limited liability company and Affiliate of Seller.
Encumbrance means any mortgage, pledge, charge, hypothecation, claim, easement right of purchase, security interest, deed of trust, conditional sales agreement, encumbrance, interest, option, lien, right of first refusal, right of way, defect in title, encroachments or other restriction, whether or not imposed by operation of Applicable Law, any voting trust or voting agreement, stockholder agreement or proxy.
Force Majeure has the meaning set forth in the Amended and Restated Omnibus Agreement.
Governmental Authority means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.
HEP Entities means Holly Logistic Services, L.L.C., HEP Logistics Holdings, L.P. and the Partnership and its direct and indirect subsidiaries.
HEP General Partner has the meaning set forth in the Preamble.
HEP Refining means HEP Refining Assets, L.P., a Delaware limited partnership and Affiliate of Buyer.
HFC has the meaning set forth in the Preamble.
HFC Entities means HFC and its direct and indirect subsidiaries other than the HEP Entities.
Indemnified Costs means Buyer Indemnified Costs and Seller Indemnified Costs, as applicable.
Indemnified Party means Buyer Indemnified Parties and Seller Indemnified Parties.
Indemnifying Party has the meaning set forth in Section 9.2 .
Independent Appraiser has the meaning set forth in Section 2.2(c)(iii) .
Knowledge and any variations thereof, or words to the same effect, means (i) with respect to Seller and HFC, actual knowledge after reasonable inquiry of George Damiris; and (ii) with respect to Buyer, actual knowledge after reasonable inquiry of Mark T. Cunningham and Richard L. Voliva III.
LLC Interest has the meaning set forth in the Recitals.
Exhibit A-3
Magellan has the meaning set forth in the Recitals.
Magellan Agreement has the meaning set forth in the Recitals.
Material Adverse Effect means any adverse change, circumstance, effect or condition in or relating to the assets, financial condition, results of operations, or business of any person that materially affects the business of such person or that materially impedes the ability of any person to consummate the transactions contemplated hereby, other than any change, circumstance, effect or condition in the refining or pipelines industries generally (including any change in the prices of crude oil, natural gas, natural gas liquids, feedstocks or refined products or other hydrocarbon products, industry margins or any regulatory changes or changes in Applicable Law) or in United States or global economic conditions or financial markets in general. Any determination as to whether any change, circumstance, effect or condition has a Material Adverse Effect shall be made only after taking into account all effective insurance coverages and effective third-party indemnifications with respect to such change, circumstance, effect or condition.
Membership Interest Value has the meaning set forth in Section 2.2(c) .
Objection Notice has the meaning set forth in Section 2.2(c)(i) .
Objection Period has the meaning set forth in Section 2.2(c)(i) .
Order means any order, writ, injunction, decree, compliance or consent order or decree, settlement agreement, schedule and similar binding legal agreement issued by or entered into with a Governmental Authority.
Osage has the meaning set forth in the Recitals.
Osage LLC Agreement means the Limited Liability Company Agreement of Osage dated March 2, 2004, as amended on or about the date hereof in connection with the transactions contemplated by this Agreement.
Osage Membership Interest has the meaning set forth in the Recitals.
Osage Pipeline means that certain pipeline system owned and operated by Osage and comprised of a 135-mile, 20-inch pipe line originating in Cushing, Oklahoma, and terminating within the El Dorado tank farm near El Dorado, Kansas, along with associated pumping and metering stations and equipment.
Partnership has the meanings set forth in the Preamble.
Party and Parties has the meanings set forth in the Preamble.
Payment Obligations has the meanings set forth in Section 11.1 .
Person means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, Governmental Authority or other entity.
Quarterly Average Daily Volume means the volume of product shipped on the Osage Pipeline during any Contract Quarter divided by the number of days in such Contract Quarter, expressed in terms of bpd.
Exhibit A-4
ROFR Waiver Letter means that certain letter agreement between Seller and McPherson Refinery Inc., a Kansas cooperative marketing association (formerly known as National Cooperative Refinery Association) dated as of December 1, 2015.
Second Amended and Restated Pipelines and Terminals Agreement has the meaning set forth in Section 3.2(c) .
Seller has the meaning set forth in the Preamble.
Seller Ancillary Documents means each agreement, document, instrument or certificate to be delivered by Seller, or its Affiliates, at the Closing pursuant to Section 3.2 and each other document or Contract entered into by Seller, or its Affiliates, in connection with this Agreement or the Closing.
Seller Indemnified Costs means any and all damages, losses, Claims, liabilities, demands, charges, suits, penalties, costs, and expenses (including court costs and reasonable attorneys fees and expenses incurred in investigating and preparing for any litigation or proceeding) that any of the Seller Indemnified Parties incurs and that arise out of or relate to any breach of a representation, warranty or covenant of Buyer or the Partnership under this Agreement. Notwithstanding anything in the foregoing to the contrary, Seller Indemnified Costs shall exclude any and all indirect, consequential, punitive or exemplary damages (other than those that are a result of (x) a third-party claim for such indirect, consequential, punitive or exemplary damages or (y) the gross negligence or willful misconduct of Buyer).
Seller Indemnified Parties means Seller and each officer, director, partner, manager, employee, consultant, stockholder, and Affiliate of Seller, including, without limitation, HFC.
Terminal Transfer Agreement has the meaning set forth in the Recitals.
Terminal Value has the meaning set forth in Section 2.2(c) .
third-party action has the meaning set forth in Section 9.2 .
Volume Shortfall has the meaning set forth in Section 2.2(b) .
Exhibit A-5
EXHIBIT B
to
LLC INTEREST PURCHASE AGREEMENT
Interpretation
As used in this Agreement, unless a clear contrary intention appears:
(a) any reference to the singular includes the plural and vice versa, any reference to natural persons includes legal persons and vice versa, and any reference to a gender includes the other gender;
(b) the words hereof, hereby, herein, and hereunder and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;
(c) any reference to Articles, Sections and Exhibits are, unless otherwise stated, references to Articles, Sections and Exhibits of or to this Agreement and references in any Section or definition to any clause means such clause of such Section or definition. The headings in this Agreement have been inserted for convenience only and shall not be taken into account in its interpretation;
(d) reference to any agreement (including this Agreement), document or instrument means such agreement, document, or instrument as amended, modified or supplemented and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of this Agreement;
(e) the Exhibits and Schedules hereto form an integral part of this Agreement and are equally binding therewith. Any reference to this Agreement shall include such Exhibits and Schedules;
(f) references to a Person shall include any permitted assignee or successor to such Party in accordance with this Agreement and reference to a Person in a particular capacity excludes such Person in any other capacity;
(g) if any period is referred to in this Agreement by way of reference to a number of days, the days shall be calculated exclusively of the first and inclusively of the last day unless the last day falls on a day that is not a Business Day in which case the last day shall be the next succeeding Business Day;
(h) the use of or is not intended to be exclusive unless explicitly indicated otherwise;
(i) references to $ or to dollars shall mean the lawful currency of the United States of America; and
(j) the words includes, including, or any derivation thereof shall mean including without limitation or including, but not limited to.
Exhibit B-1
EXHIBIT C
to
LLC INTEREST PURCHASE AGREEMENT
Form of Amendment No. 5
AMENDMENT NO. 5 TO
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP
OF
HOLLY ENERGY PARTNERS, L.P.
[●], 2016
This Amendment No. 5 (this Amendment No. 5 ) to the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P. (the Partnership ), dated as of July 13, 2004, as amended by Amendment No. 1 thereto dated as of February 28, 2005, Amendment No. 2 thereto dated as of July 6, 2005, Amendment No. 3 thereto dated as of April 11, 2008 and Amendment No. 4 thereto dated as of January 16, 2013 (as so amended, the Partnership Agreement ) is hereby adopted effective as of [●], 2016 by HEP Logistics Holdings, L.P., a Delaware limited partnership (the General Partner ), as general partner of the Partnership. Capitalized terms used but not defined herein have the meaning given such terms in the Partnership Agreement.
WHEREAS , Section 13.1(d)(i) of the Partnership Agreement provides that the General Partner, without the approval of any Partner, may amend any provision of the Partnership Agreement to reflect a change that the General Partner determines 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, and the General Partner has determined that this Amendment No. 5, in connection with the Osage Transactions (as defined below), 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;
WHEREAS , Section 5.6 of the Partnership Agreement provides that the General Partner, without the approval of any Limited Partners, may issue additional Partnership Securities, or classes or series thereof, for any Partnership purpose at any time and from time to time, and may issue such Partnership Securities for such consideration and on such terms and conditions as shall be established by the General Partner in its sole discretion, all without the approval of any Limited Partners; and the Subordination Period has expired;
WHEREAS , Section 13.1(g) of the Partnership Agreement provides that the General Partner, without the approval of any Partner, may amend any provision of the Partnership Agreement to reflect an amendment that the General Partner determined is necessary or appropriate in connection with the authorization of issuance of any class or series of Partnership Securities pursuant to Section 5.6 of the Partnership Agreement;
WHEREAS , prior to the date hereof, El Dorado Osage LLC, a Delaware limited liability company ( El Dorado Osage ), acquired a 50% membership interest in Osage Pipeline Company LLC, a Delaware limited liability company (the Osage Purchase ), pursuant to the Transfer of LLC Membership Interest Agreement by and among Magellan OLP, L.P., as seller, and El Dorado Osage, as buyer, dated February 22, 2016 (the Osage Purchase Agreement ); and, at the time of the Osage Purchase, El Dorado Osage was an Affiliate of HollyFrontier Refining & Marketing LLC, a Delaware limited liability company ( HFRM );
WHEREAS , prior to the date hereof, HFRM contributed all the membership interest in El Dorado Osage to Holly Energy Partners Operating, LP, a Delaware limited partnership and Affiliate of the Partnership ( Operating Partnership ), pursuant to and upon the terms and subject to the conditions set forth in the LLC Interest Purchase Agreement (the Osage LLC Interest Purchase Agreement ) by and among HFRM, HollyFrontier Corporation, a Delaware corporation, the Partnership, the General Partner and the Operating Partnership, dated February 22, 2016 (such contribution, together with the Osage Purchase, the Osage Transactions );
WHEREAS , pursuant to the terms of Section 2.2(c) of the Osage LLC Interest Purchase Agreement, the Partnership agreed to cause this Amendment No. 5 to be adopted under the circumstance described therein;
WHEREAS , the General Partner has determined that it is in the best interest of the Partnership to adopt this Amendment No. 5 in order to provide for the issuance of the Special General Partner Interest representing a general partner interest in the Partnership; and
WHEREAS , acting pursuant to the power and authority granted to it: (i) under Section 13.1(d)(i) of the Partnership Agreement, the General Partner has determined that this Amendment No. 5 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, and (ii) under Section 13.1(g) of the Partnership Agreement, the General Partner has determined that this Amendment No. 5 is necessary and appropriate in connection with the issuance of the Special General Partner Interest.
NOW, THEREFORE , the Partnership Agreement is amended as follows:
Section 1. Amendment Relating to the Special General Partner Interest .
(a) Section 1.1 is amended to add or amend and restate the following definitions in the appropriate alphabetical order:
(i) El Dorado Osage means El Dorado Osage LLC, a Delaware limited liability company.
(ii) Hawkins Terminal means a refined products terminal in El Paso, Texas, located on the real property more particularly described on Exhibit A to the Refined Products Terminal Transfer Agreement, dated February 22, 2016, by and among HEP Refining Assets, L.P., a Delaware limited partnership, the Partnership, El Paso Logistics LLC, a Delaware limited liability company, HFC and the Operating Partnership.
(iii) Hawkins Terminal Sharing Ratio means the ratio, expressed as a percentage, of the Terminal Value to the Membership Interest Value.
(iv) HFC means HollyFrontier Corporation, a Delaware corporation.
(v) HFRM means HollyFrontier Refining & Marketing LLC, a Delaware limited liability company.
(vi) Liquidation or Sale Loss means any Net Termination Loss recognized after the Liquidation Date or 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).
(vii) Membership Interest Value has the meaning ascribed to such term in the Osage LLC Interest Purchase Agreement.
(viii) Osage Interests means a 50% membership interest in Osage Pipeline Company LLC, a Delaware limited liability company.
(ix) Osage LLC Interest Purchase Agreement means that certain LLC Interest Purchase Agreement by and among HFRM, HFC, the Partnership, the General Partner and the Operating Partnership, dated February 22, 2016.
(x) Partnership Security means any class or series of equity interest in the Partnership (but excluding any options, rights, warrants and appreciation rights relating to an equity interest in the Partnership), including, without limitation, Common Units, Subordinated Units, Class B Subordinated Units, Incentive Distribution Rights and the Special General Partner Interest.
(xi) Percentage Interest means as of any date of determination (a) as to the General Partner (in its capacity as General Partner without reference to any Limited Partner Interests held by it), 2.0%, (b) as to any Unitholder or Assignee holding Units, the product obtained by multiplying (i) 98% less the percentage applicable to paragraph (c) by (ii) the quotient obtained by dividing (A) the number of Units held by such Unitholder or Assignee by (B) the total number of all Outstanding Units, and (c) as to the holders of additional Partnership Securities issued by the Partnership in accordance with Section 5.6, the percentage established as a part of such issuance. The Percentage Interest with respect to an Incentive Distribution Right and the Special General Partner Interest shall at all times be zero.
(xii) Special General Partner Interest means a Partnership Security which shall confer upon the holder thereof only the rights and obligations specifically provided in this Agreement with respect to the Special General Partner Interest (and no other rights otherwise available to holders of a Partnership Security).
(xiii) Special General Partner Interest Capital Account means the Capital Account of the Special General Partner Interest, which Capital Account shall be equal to the amount by which the Membership Interest Value is greater than the Terminal Value.
(xiv) Special General Partner Interest Sharing Ratio means 100% minus the Hawkins Terminal Sharing Ratio.
(xv) Terminal Value has the meaning ascribed to such term in the Osage LLC Interest Purchase Agreement.
(xvi) Unit means a Partnership Security that is designated as a Unit and shall include Common Units, Subordinated Units and Class B Subordinated Units, but shall not include (i) a General Partner Interest, (ii) Incentive Distribution Rights or (iii) the Special General Partner Interest.
(b) Article V is amended to add a new Section 5.13 creating a new Partnership Security to read in its entirety as follows:
Section 5.13. Establishment of Special General Partner Interest .
(a) General . The General Partner hereby designates and creates a Partnership Security designated as the Special General Partner Interest , having only the rights and preferences, and duties and obligations as set forth in this Section 5.13.
(b) Rights of the Special General Partner Interest . The Special General Partner Interest shall have the following rights and preferences and shall be subject to the following duties and obligations.
(i) Allocations . The holder of the Special General Partner Interest shall not be allocated (i) items of income, gain, loss or deduction with respect to such Special General Partner Interest, except to the extent provided by Section 6.1(d)(xiii), or (ii) Net Termination Gain or Net Termination Loss, except as provided in the last sentence of Section 6.1(c)(ii).
(iii) Distributions . Except as set forth in Section 12.4 with respect to an event of dissolution and liquidation of the Partnership, the holder of the Special General Partner Interest shall not be entitled to any distributions.
(iv) Voting Rights . Unless and to the extent otherwise required by the Delaware Act, the Special General Partner Interest shall not be entitled to vote on any matters, whether or not any other Partners are entitled to vote thereon.
(v) No Certificates . Unless the General Partner determines otherwise, the Special General Partner Interest shall not be evidenced by certificates and shall be reflected in the books and records of the transfer agent.
(vi) Registrar and Transfer Agent . The General Partner will act as registrar and transfer agent of the Special General Partner Interest.
(c) Section 6.1(c)(ii) of the Partnership Agreement is amended to add the following after 6.1(c)(ii)(C) as a proviso applying to each of (A), (B) and (C):
Provided, however, that in the event of allocating Liquidation or Sale Loss, if the Special General Partner Interest Capital Account has not previously been reduced to zero, Liquidation or Sale Loss shall be first allocated to the Special General Partner Interest until the Special General Partner Interest Capital Account is reduced to zero, and thereafter, any such loss remaining shall be allocated pursuant to Section 6.1(c)(ii)(A), (B) and (C), as applicable.
(d) Section 6.1(d) of the Partnership Agreement is amended to add a new Section 6.1(d)(xiii) as follows:
(xiii) Special General Partner Interest Cost Recovery Deductions . For any taxable period ending after the date of the Osage LLC Interest Purchase Agreement, any and all cost recovery deductions available to the Partnership with respect to the tax basis of the Osage Interests (and the underlying Partnership assets attributable thereto) shall be allocated as follows: (i) until the Special General Partner Interest Capital Account is reduced to zero (a) the Special General Partner Interest Sharing Ratio shall be allocated to the Special General Partner Interest and (b) the Hawkins Terminal Sharing Ratio shall be allocated in accordance with Section 6.1(a), (b) or (c), as applicable and (ii) thereafter, in accordance with Section 6.1(a), (b) or (c), as applicable.
Section 2. The appropriate officers of the General Partner are hereby authorized to make such further clarifying and conforming changes as they deem necessary or appropriate, and to interpret the Partnership Agreement, to give effect to the intent and purpose of this Amendment No. 5.
Section 3. Except as hereby amended, the Partnership Agreement shall remain in full force and effect.
Section 4. This Amendment shall be governed by, and interpreted in accordance with, the laws of the State of Delaware, all rights and remedies being governed by such laws without regard to principles of conflicts or laws.
[ Signature page follows ]
IN WITNESS WHEREOF, this Amendment has been executed as of the date first above written
GENERAL PARTNER : | ||
HEP Logistics Holdings, L.P. | ||
By: | Holly Logistic Services, L.L.C, its general partner | |
By: |
|
|
Name: | Michael C. Jennings | |
Title: | Chief Executive Officer |
EXHIBIT D
to
LLC INTEREST PURCHASE AGREEMENT
Form of Assignment
Execution Version
ASSIGNMENT OF LIMITED LIABILITY COMPANY INTERESTS
This Assignment of Limited Liability Company Interests ( Assignment ) is dated effective as of 12:01 a.m., Dallas, Texas time, on February 22, 2016 (the Effective Time ), by and between HollyFrontier Refining & Marketing LLC, a Delaware limited liability company ( Seller ), and Holly Energy Partners Operating, L.P., a Delaware limited partnership ( Buyer ). Buyer and Seller are referred to collectively herein as the Parties .
RECITALS
Reference is made to that certain LLC Interest Purchase Agreement dated effective as of February 22, 2016, among Buyer, Seller, HollyFrontier Corporation, a Delaware corporation, as guarantor, and Holly Energy Partners, L.P. solely in respect of Section 2.2(c), pursuant to which Seller has agreed to sell and assign to Buyer all of its limited liability company interests in El Dorado Osage LLC, a Delaware limited liability company (the Company ), representing one-hundred percent (100%) of the outstanding limited liability company interests in the Company, in accordance with the terms of such LLC Interest Purchase Agreement (such agreement, as the same may be amended, the Purchase Agreement ). Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.
This Assignment is delivered by Seller pursuant to the Purchase Agreement.
ASSIGNMENT
Now, therefore, in consideration of the premises and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. Subject to the representations, warranties and covenants of the parties contained in the Purchase Agreement, Seller hereby assigns to Buyer all of its limited liability company interests in the Company, representing one-hundred percent (100%) of the outstanding limited liability company interests in the Company, and any income, distributions, or other value associated therewith or deriving therefrom on and after the Effective Time (collectively, the Transferred Interests ).
2. Subject to the representations, warranties and covenants of the parties contained in the Purchase Agreement, Buyer hereby assumes, from and after the Effective Time, all obligations and liabilities of Seller with respect to the Transferred Interests arising from and after the Effective Time.
3. Seller hereby agrees to promptly execute and deliver any corrective assignments and other legal documents or notification reasonably requested by Buyer to give effect to the intent of this Assignment.
4. Seller hereby acknowledges and agrees that, as a result of this Assignment, it no longer has any limited liability company interest or equity interest in the Company, and it resigns as a member of the Company effective as of the Effective Time.
5. This Assignment shall be binding upon the Parties and their respective successors and assigns.
6. This Assignment shall be governed by and construed in accordance with the internal laws of the State of Delaware.
7. This Assignment is subject to the terms and conditions of the Purchase Agreement, and nothing contained herein shall be deemed to supersede, limit, amend, supplement, modify, vary or enlarge any of the rights, obligations, covenants, agreements, representations and warranties of the Parties under the Purchase Agreement, this Assignment being intended only to effect the transfer of the Transferred Interests from Seller to Buyer as contemplated in the Purchase Agreement. In the event of any conflict between the terms of this Assignment and the terms of the Purchase Agreement, the terms of the Purchase Agreement shall control.
8. This Assignment may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.
[ Remainder of Page Intentionally Left Blank ]
IN WITNESS WHEREOF, this Assignment is executed to be effective as of the Effective Time.
SELLER : | ||||||
HOLLYFRONTIER REFINING & MARKETING LLC | ||||||
By: |
|
|||||
George J. Damiris | ||||||
Chief Executive Officer and President | ||||||
BUYER : | ||||||
HOLLY ENERGY PARTNERS OPERATING, L.P. | ||||||
By: |
|
|||||
Michael C. Jennings | ||||||
Chief Executive Officer |
Execution Version
SCHEDULE 4.3(a)
to
LLC INTEREST PURCHASE AGREEMENT
Jurisdictions
Kansas
Oklahoma
Execution Version
SCHEDULE 4.4(a)
to
LLC INTEREST PURCHASE AGREEMENT
Required Consents - Seller
None.
Execution Version
SCHEDULE 4.4(b)
to
LLC INTEREST PURCHASE AGREEMENT
Required Consents - Company
None.
SCHEDULE 4.7
to
LLC INTEREST PURCHASE AGREEMENT
Undisclosed Liabilities
None.
SCHEDULE 5.3
to
LLC INTEREST PURCHASE AGREEMENT
Required Consents Buyer
None.
SCHEDULE 6.3
to
LLC INTEREST PURCHASE AGREEMENT
Required Consents - HFC
None.
Exhibit 10.2
Execution Version
REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT
by and between
HEP REFINING ASSETS, L.P.,
as Seller,
with
HOLLY ENERGY PARTNERS, L.P.,
as Guarantor of Seller,
EL PASO LOGISTICS LLC.
as Buyer,
HOLLYFRONTIER CORPORATION,
as Guarantor of Buyer,
and
HOLLY ENERGY PARTNERS OPERATING, L.P.
Solely in Respect of Section 6.2
Dated: February 22, 2016
TABLE OF CONTENTS
ARTICLE I - DEFINED TERMS |
2 | |||||
1.1 |
Definitions |
2 | ||||
1.2 |
Interpretation |
2 | ||||
ARTICLE II TRANSFER OF TERMINAL |
2 | |||||
2.1 |
Transfer of Terminal |
2 | ||||
2.2 |
Assumption of Liabilities |
2 | ||||
2.3 |
Excluded Liabilities |
2 | ||||
2.4 |
Excluded Assets |
2 | ||||
ARTICLE III - CLOSING |
3 | |||||
3.1 |
Closing |
3 | ||||
3.2 |
Deliveries by Seller |
3 | ||||
3.3 |
Deliveries by Buyer |
4 | ||||
3.4 |
Prorations; Closing Costs; Transfer Taxes and Fees |
4 | ||||
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF SELLER |
4 | |||||
4.1 |
Organization |
4 | ||||
4.2 |
Authorization |
5 | ||||
4.3 |
No Conflicts or Violations; No Consents or Approvals Required |
5 | ||||
4.4 |
Absence of Litigation |
5 | ||||
4.5 |
Title |
5 | ||||
4.6 |
Brokers and Finders |
5 | ||||
4.7 |
Taxes |
5 | ||||
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BUYER |
6 | |||||
5.1 |
Organization |
6 | ||||
5.2 |
Authorization |
6 | ||||
5.3 |
No Conflicts or Violations; No Consents or Approvals Required |
6 | ||||
5.4 |
Absence of Litigation |
6 | ||||
5.5 |
Brokers and Finders |
6 | ||||
ARTICLE VI - COVENANTS |
6 | |||||
6.1 |
Additional Agreements |
6 | ||||
6.2 |
Obligation to Modify Alon Documents |
7 | ||||
6.3 |
Site Access |
7 | ||||
ARTICLE VII - ADDITIONAL AGREEMENTS |
7 | |||||
7.1 |
Further Assurances |
7 | ||||
ARTICLE VIII - INDEMNIFICATION |
7 | |||||
8.1 |
Indemnification of Buyer and Seller |
7 | ||||
8.2 |
Defense of Third-Party Claims |
7 | ||||
8.3 |
Direct Claims |
8 |
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8.4 |
Limitations |
8 | ||||
8.5 |
Tax Related Adjustments |
9 | ||||
ARTICLE IX - MISCELLANEOUS |
9 | |||||
9.1 |
Expenses |
9 | ||||
9.2 |
Notices |
9 | ||||
9.3 |
Severability |
9 | ||||
9.4 |
Governing Law; Jurisdiction; Waiver of Jury Trial |
9 | ||||
9.5 |
Dispute Resolution |
9 | ||||
9.6 |
Parties in Interest |
10 | ||||
9.7 |
Assignment of Agreement |
10 | ||||
9.8 |
Captions |
10 | ||||
9.9 |
Counterparts |
10 | ||||
9.10 |
Director and Officer Liability |
10 | ||||
9.11 |
Integration |
10 | ||||
9.12 |
Effect of Agreement |
10 | ||||
9.13 |
Amendment; Waiver |
10 | ||||
9.14 |
Survival of Representations and Warranties |
11 | ||||
9.15 |
Waivers and Disclaimers |
11 | ||||
ARTICLE X - GUARANTEES |
12 | |||||
10.1 |
Guarantee by HFC |
12 | ||||
10.2 |
Guarantee by Partnership |
13 |
EXHIBITS AND SCHEDULES |
||||
EXHIBIT A |
|
Legal Description |
||
EXHIBIT B |
|
Definitions |
||
EXHIBIT C |
|
Interpretation |
||
EXHIBIT D |
|
Form of Special Warranty Deed |
||
EXHIBIT E |
|
Form of Bill of Sale and Assignment |
||
Schedule 2.1 |
Assigned Contracts |
|||
Schedule 2.4 |
Excluded Assets |
|||
Schedule 4.3 |
Required Consents Seller |
|||
Schedule 5.3 |
Required Consents Buyer |
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REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT
THIS REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT (this Agreement ) dated as of February 22, 2016 to be effective as of the Effective Time (as defined below), is made and entered into by and among HEP REFINING ASSETS, L.P., a Delaware limited partnership ( Seller ), HOLLY ENERGY PARTNERS, L.P., a Delaware limited partnership and Affiliate of Seller (the Partnership ), EL PASO LOGISTICS LLC, a Delaware limited liability company ( Buyer ), HOLLYFRONTIER CORPORATION, a Delaware corporation and an Affiliate of Buyer ( HFC ), and HOLLY ENERGY PARTNERS OPERATING, L.P., a Delaware limited partnership and an Affiliate of Seller ( HEP Operating ). Seller and Buyer are sometimes referred to in this Agreement each as a Party and collectively as the Parties . HFC joins this Agreement solely for the purpose of Section 10.1 of this Agreement. The Partnership joins this Agreement solely for the purpose of Section 10.2 of this Agreement. HEP Operating joins this Agreement solely for the purpose of Section 6.2 of this Agreement.
WHEREAS , Seller owns a refined products terminal in El Paso, Texas (the Terminal ), located on the real property more particularly described on Exhibit A (together with all easements, rights, titles and interests appurtenant thereto, the Real Property );
WHEREAS , the Terminal consists of all buildings, structures, and other physical improvements located on or affixed to the Real Property (the Improvements ) and all Permits, storage tanks, equipment, machinery, fixtures, and all other tangible personal property, except for the Excluded Assets (the Tangible Personal Property ) owned by Seller and used in connection with the ownership, maintenance, or operation of the Terminal and the Real Property;
WHEREAS, Seller has certain rights under Contracts that are assignable and relate exclusively to the ownership and operation of the Terminal (whether such Contracts are with Seller or an Affiliate of Seller), that are not Excluded Assets, as more particularly described on Schedule 2.1 (collectively, the Assigned Contracts );
WHEREAS , the Real Property, the Improvements, the Tangible Personal Property and the Assigned Contracts are collectively referred to herein as the Property ; provided, however, that Property shall not include any goods, products, and inventory that are owned by third parties and located on the Real Property or used in connection with the ownership and operation of the Terminal;
WHEREAS , concurrently with the entry into this Agreement, HollyFrontier Refining & Marketing LLC, a Delaware limited liability company and Affiliate of Buyer ( HFRM ), and HEP Operating, are entering into that certain LLC Interest Purchase Agreement (the LLC Transfer Agreement ) pursuant to which HEP Operating is purchasing all of the limited liability company membership interests of El Dorado Osage LLC, a Delaware limited liability company, from HFRM (the Osage Transaction );
WHEREAS , in connection with and as partial consideration for the Osage Transaction, Seller desires to convey to Buyer, and Buyer desire to receive from Seller, the Property in accordance with the terms and conditions set forth in this Agreement;
WHEREAS , in connection with the acquisition of the Property and in addition to the other transactions contemplated by the LLC Transfer Agreement, the Parties and their respective Affiliates desire to (i) enter into an Amended and Restated Master Systems Operating Agreement (as defined below), (ii) enter into the Second Amended and Restated Pipelines and Terminals Agreement (as defined below), containing, among other things, construction obligations of Affiliates of Seller, and (iii) enter an Amended and Restated Master Throughput Agreement (as defined below).
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NOW, THEREFORE , in consideration of the foregoing and the covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINED TERMS
1.1. Definitions . Capitalized terms used throughout this Agreement and not otherwise defined herein shall have the meanings set forth on Exhibit B .
1.2. Interpretation . Matters relating to the interpretation of this Agreement are set forth on Exhibit C .
ARTICLE II
TRANSFER OF TERMINAL
2.1 Transfer of Terminal . Subject to the terms and conditions of this Agreement, concurrently with the closing of the Osage Transaction and as partial consideration therefor, Seller agrees to convey and assign to Buyer, and Buyer agrees to accept from Seller, all of Sellers right, title, estate and interest in and to the Property and enter into the other transactions contemplated by this Agreement. The Parties acknowledge and agree that the Assigned Contracts included in the Property are identified on Schedule 2.1 .
2.2 Assumption of Liabilities . Buyer assumes and agrees to timely pay, perform and discharge all of the Terminal Liabilities to the full extent that Seller has heretofore or would have been in the future obligated to pay, perform and discharge the Terminal Liabilities were it not for the transfer of the Property to Buyer and delivery of this Agreement; provided , however , that said assumption and agreement to pay, perform and discharge the Terminal Liabilities shall not (a) increase the obligation of Buyer with respect to the Terminal Liabilities beyond that of Seller, (b) waive any valid defense that was available to Seller with respect to the Terminal Liabilities or (c) enlarge the rights or remedies of any third party under any of the Terminal Liabilities.
2.3 Excluded Liabilities . Notwithstanding anything to the contrary in this Agreement, including the terms and provisions of Section 2.2 , Buyer shall not be deemed to have assumed, and the Property is not being conveyed subject to (a) any Monetary Liens and all such Monetary Liens shall be deemed to be excluded from the assumption of Terminal Liabilities provided for in Section 2.2 , (b) the Alon Documents, and (c) any of the liabilities that are covered by the indemnities set forth in the Amended and Restated Omnibus Agreement, all of which shall be deemed to be excluded from the assumption of Terminal Liabilities provided for in Section 2.2 if and to the extent such liabilities are covered by such indemnities.
2.4 Excluded Assets . Notwithstanding anything in this Agreement to the contrary, the Property shall not include any of the Contracts, equipment, machinery or other tangible personal property described on Schedule 2.4 (the Excluded Assets ), which Excluded Assets shall be retained by Seller. Seller and Buyer shall negotiate in good faith to reach commercially reasonable terms on which any Excluded Assets located on the Property may remain on the Property; provided, however, that if Seller and Buyer do not reach agreement as aforesaid in respect of an Excluded Asset, Seller shall remove such Excluded Asset from the Property within a reasonable time after such failure to reach agreement occurs.
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ARTICLE III
CLOSING
3.1. Closing . The closing of the transactions contemplated hereby (the Closing ) shall take place simultaneously with the execution of this Agreement. The date of the Closing is referred to herein as the Closing Date and the Closing is deemed to be effective as of 12:01 a.m., Dallas, Texas time, on the date hereof (the Effective Time ).
3.2. Deliveries by Seller . At the Closing, Seller shall deliver, or cause to be delivered, to Buyer the following:
(a) a special warranty deed in substantially the form set forth on Exhibit D (the Deed ), conveying the Real Property and Improvements to Buyer, free and clear of all Encumbrances except the Permitted Encumbrances, duly executed by Seller.
(b) a bill of sale and assignment in substantially the form set forth on Exhibit E , transferring and assigning to Buyer all of the Tangible Personal Property, free and clear of all Monetary Liens, duly executed by Seller.
(c) evidence in form and substance satisfactory to Buyer of the release and termination of all Monetary Liens on the Property.
(d) to the extent assignable, assignment documents, duly executed by Seller, assigning each of the Permits held by Seller which are assignable by Seller to Buyer in accordance with Applicable Law.
(e) a properly executed certificate, in the form prescribed by Treasury regulations under Section 1445 of the Code, stating that the Partnership (the person from whom Seller is disregarded as an entity for U.S. federal income tax purposes) is not a foreign person within the meaning of Section 1445 of the Code.
(f) a counterpart of the Amended and Restated Master Systems Operating Agreement in a form mutually acceptable to the Parties (the Amended and Restated Master Systems Operating Agreement ), duly executed by the HEP Entities party thereto.
(g) a counterpart of the Amended and Restated Master Throughput Agreement in a form mutually acceptable to the Parties (the Amended and Restated Master Throughput Agreement ), duly executed by the HEP Entities party thereto.
(h) a counterpart of the Second Amended and Restated Refined Products Pipelines and Refined Products Terminals Agreement in a form mutually acceptable to the Parties (the Second Amended and Restated Pipelines and Terminals Agreement ), duly executed by the HEP Entities party thereto.
(i) the amount of any prorations, credits, debits, and adjustments owned by Seller pursuant to Section 3.4 .
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3.3. Deliveries by Buyer . At the Closing (or such later date as may be set forth below), Buyer shall deliver, or cause to be delivered, to Seller the following:
(a) a counterpart of the Amended and Restated Master Systems Operating Agreement, duly executed by the HFC Entities party thereto.
(b) a counterpart of the Amended and Restated Master Throughput Agreement, duly executed by the HFC Entities party thereto.
(c) a counterpart of the Second Amended and Restated Pipelines and Terminals Agreement, duly executed by the HFC Entities party thereto.
(d) the amount of any prorations, credits, debits, and adjustments owned by Buyer pursuant to Section 3.4 .
3.4. Prorations; Closing Costs; Transfer Taxes and Fees
(a) Buyer shall pay the cost of all sales, transfer and use taxes arising out of the transfer of the Property.
(b) On the Closing Date, or as promptly as practicable following the Closing Date, but in no event later than sixty (60) calendar days thereafter, the real, if any, and personal property taxes, water, gas, electricity and other utilities with respect to the Assets and the real estate interests and rights associated with the Property and local business or other license fees to the extent assigned and other similar periodic charges payable with respect to the Property shall be prorated between Buyer, on the one hand, and Seller, on the other hand, effective as of the Effective Time, with Seller being responsible for amounts related to the period prior to but excluding the Effective Time and Buyer being responsible for amounts related to the period at and after the Effective Time. If the final property tax rate or final assessed value for the current tax year is not established by the Closing Date, the prorations shall be made on the basis of the rate or assessed value in effect for the preceding tax year and shall be adjusted when the exact amounts are determined. All such prorations shall be based upon the most recent available assessed value available prior to the Closing Date.
(c) Seller shall pay all recording fees and other costs incidental to the recordation of the Deed.
(d) If a Party pays any tax agreed to be borne by the other Party under this Agreement, such other Party shall promptly reimburse the paying Party for the amounts so paid. If any Party receives any tax refund or credit applicable to a tax paid by another Party hereunder, the receiving Party shall promptly pay such amounts to the Party entitled thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that as of the Effective Time:
4.1. Organization . Seller is an entity duly organized, validly existing and in good standing under the Applicable Laws of the State of Delaware.
4
4.2. Authorization . Seller has full partnership power and authority to execute, deliver, and perform this Agreement and any Seller Ancillary Documents to which it is a party. The execution, delivery, and performance by Seller of this Agreement and the Seller Ancillary Documents to which it is a party and the consummation by Seller of the transactions contemplated hereby and thereby, have been duly authorized by all necessary partnership action of Seller. This Agreement has been duly executed and delivered by Seller and constitutes, and each Seller Ancillary Document executed or to be executed by Seller has been, or when executed will be, duly executed and delivered by Seller and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of Seller, enforceable against it in accordance with their terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Applicable Laws affecting creditors rights and remedies generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances.
4.3. No Conflicts or Violations; No Consents or Approvals Required . The execution, delivery and performance by Seller of this Agreement and the other Seller Ancillary Documents to which it is a party does not, and the consummation of the transactions contemplated hereby and thereby will not, (i) violate, conflict with, or result in any breach of any provision of Sellers organizational documents or (ii) subject to obtaining the Consents or making the registrations, declarations or filings set forth in the next sentence, violate in any material respect any Applicable Law or material Contract binding upon Seller. Except as set forth on Schedule 4.3 , no Consent of any Governmental Authority or any other person is required for Seller in connection with Sellers execution, delivery or performance of this Agreement or the Seller Ancillary Documents to which it is a party or consummation of the transactions contemplated hereby or thereby.
4.4. Absence of Litigation . There is no Action pending or, to the Knowledge of Seller, threatened against (i) the Property or (ii) Seller or any of its Affiliates relating to the transactions contemplated by this Agreement or the Seller Ancillary Documents or which, if adversely determined, would reasonably be expected to materially impair the ability of Seller to perform its obligations and agreements under this Agreement or the Seller Ancillary Documents and to consummate the transactions contemplated hereby and thereby.
4.5. Title . Seller is the record owner of and has good and marketable indefeasible fee simple title to Property, free and clear of all Encumbrances except Permitted Encumbrances. There are no options or rights to purchase or acquire, or agreements, arrangements, commitments or understandings relating to, the Property except pursuant to this Agreement, the Amended and Restated Omnibus Agreement or commercial agreements to which an HFC Entity is a party.
4.6. Brokers and Finders . No investment banker, broker, finder, financial advisor or other intermediary has been retained by or is authorized to act on behalf of Seller who is entitled to receive from Buyer any fee or commission in connection with the transactions contemplated by this Agreement.
4.7 Taxes . Seller has filed or caused to be filed all material Tax Returns required to be filed with respect to the Property on or prior to the date hereof and paid all Taxes attributable to the Property that have become due and payable on or prior to the date hereof. There are no liens (other than Permitted Encumbrances) currently pending attributable to any unpaid Taxes.
5
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that as of the Effective Time:
5.1. Organization . Buyer is an entity duly organized, validly existing and in good standing under the Applicable Laws of the State of Delaware.
5.2. Authorization . Buyer has full limited liability company power and authority to execute, deliver, and perform this Agreement and any Buyer Ancillary Documents to which it is a party. The execution, delivery, and performance by Buyer of this Agreement and the Buyer Ancillary Documents to which it is a party and the consummation by Buyer of the transactions contemplated hereby and thereby, have been duly authorized by all necessary limited liability company action of Buyer. This Agreement has been duly executed and delivered by Buyer and constitutes, and each such Buyer Ancillary Document executed or to be executed Buyer has been, or when executed will be, duly executed and delivered by Buyer and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of Buyer, enforceable against it in accordance with their terms, except to the extent that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Applicable Laws affecting creditors rights and remedies generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances.
5.3. No Conflicts or Violations; No Consents or Approvals Required . The execution, delivery and performance by Buyer of this Agreement and the Buyer Ancillary Documents to which it is a party does not, and consummation of the transactions contemplated hereby and thereby will not, (i) violate, conflict with, or result in any breach of any provisions of Buyers organizational documents or (ii) subject to obtaining the Consents or making the registrations, declarations or filings set forth in the next sentence, violate in any material respect any Applicable Law or material contract binding upon Buyer. Except as set forth on Schedule 5.3 , no Consent of any Governmental Authority or any other person is required for Buyer in connection with the Buyers execution, delivery or performance of this Agreement or the Buyer Ancillary Documents to which it is a party or the consummation of the transactions contemplated hereby and thereby.
5.4. Absence of Litigation . There is no Action pending or, to the Knowledge of Buyer, threatened against Buyer or any of its Affiliates relating to the transactions contemplated by this Agreement or the Buyer Ancillary Documents or which, if adversely determined, would reasonably be expected to materially impair the ability of Buyer to perform its obligations and agreements under this Agreement or the Buyer Ancillary Documents and to consummate the transactions contemplated hereby and thereby.
5.5. Brokers and Finders . No investment banker, broker, finder, financial advisor or other intermediary has been retained by or is authorized to act on behalf of Buyer who is entitled to receive from Seller any fee or commission in connection with the transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
6.1. Additional Agreements . Subject to the terms and conditions of this Agreement and the Ancillary Documents and the Amended and Restated Omnibus Agreement, each of the Parties shall use its commercially reasonable efforts to do, or cause to be taken all action and to do, or cause to be done, all
6
things necessary, proper, or advisable under Applicable Laws to consummate and make effective the transactions contemplated by this Agreement. If at any time after the Closing Date any further action is necessary or desirable to carry out the purposes of this Agreement, the Parties and their duly authorized representatives shall use commercially reasonable efforts to take all such action.
6.2. Obligation to Modify Alon Documents. Seller and HEP Operating shall use commercially reasonable efforts to modify the Alon Documents to remove the Property as a location for terminalling products pursuant to the Alon Documents.
6.3. Site Access . From time to time after the Effective Time, upon the request of either Party, the Parties will enter into good faith negotiations to enter into such easements or real property license agreements evidencing HEP Operatings right during the Term to maintain, operate and access the Excluded Assets located within the Terminal. Such agreement(s) shall include HFCs standard terms and conditions, with such modifications thereto as are mutually acceptable to the Parties.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Further Assurances . After the Closing, each Party shall take such further actions, including obtaining consents to assignment from third parties, and execute such further documents as may be necessary or reasonably requested by the other Parties in order to effectuate the intent of this Agreement and the Ancillary Documents and to provide such other Parties with the intended benefits of this Agreement and the Ancillary Documents.
ARTICLE VIII
INDEMNIFICATION
8.1. Indemnification of Buyer and Seller . From and after the Closing and subject to the provisions of this Article VIII , (i) Seller agrees to indemnify and hold harmless the Buyer Indemnified Parties from and against any and all Buyer Indemnified Costs and (ii) Buyer agrees to indemnify and hold harmless the Seller Indemnified Parties from and against any and all Seller Indemnified Costs.
8.2. Defense of Third-Party Claims . An Indemnified Party shall give prompt written notice to Seller or Buyer, as applicable (the Indemnifying Party ), of the commencement or assertion of any action, proceeding, demand, or claim by a third party (collectively, a third-party action) in respect of which such Indemnified Party seeks indemnification hereunder. Any failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it may have to such Indemnified Party under this Article VIII unless the failure to give such notice materially and adversely prejudices the Indemnifying Party. The Indemnifying Party shall have the right to assume control of the defense of, settle, or otherwise dispose of such third-party action on such terms as it deems appropriate; provided , however , that:
(a) The Indemnified Party shall be entitled, at its own expense, to participate in the defense of such third-party action ( provided , however , that the Indemnifying Party shall pay the attorneys fees of the Indemnified Party if (i) the employment of separate counsel shall have been authorized in writing by the Indemnifying Party in connection with the defense of such third-party action, (ii) the Indemnifying Party shall not have employed counsel reasonably satisfactory to the Indemnified Party to have charge of such third-party action, (iii) the Indemnified Party shall have reasonably concluded that there may be defenses available to such Indemnified Party that are different from or additional to those available to the Indemnifying Party, or (iv) the Indemnified Partys counsel shall have advised the Indemnified Party in writing, with a copy delivered to the Indemnifying Party, that there is a material conflict of interest that could violate applicable standards of professional conduct to have common counsel);
7
(b) The Indemnifying Party shall obtain the prior written approval of the Indemnified Party before entering into or making any settlement, compromise, admission, or acknowledgment of the validity of such third-party action or any liability in respect thereof if, pursuant to or as a result of such settlement, compromise, admission, or acknowledgment, injunctive or other equitable relief would be imposed against the Indemnified Party or if, in the opinion of the Indemnified Party, such settlement, compromise, admission, or acknowledgment could have a Material Adverse Effect on its business;
(c) The Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by each claimant or plaintiff to each Indemnified Party of a release from all liability in respect of such third-party action; and
(d) The Indemnifying Party shall not be entitled to control (but shall be entitled to participate at its own expense in the defense of), and the Indemnified Party shall be entitled to have sole control over, the defense or settlement, compromise, admission, or acknowledgment of any third-party action (i) as to which the Indemnifying Party fails to assume the defense within a reasonable length of time or (ii) to the extent the third-party action seeks an order, injunction, or other equitable relief against the Indemnified Party which, if successful, would materially adversely affect the business, operations, assets, or financial condition of the Indemnified Party; provided , however , that the Indemnified Party shall make no settlement, compromise, admission, or acknowledgment that would give rise to liability on the part of any Indemnifying Party without the prior written consent of such Indemnifying Party.
The Parties shall extend reasonable cooperation in connection with the defense of any third-party action pursuant to this Article VIII and, in connection therewith, shall furnish such records, information, and testimony and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested.
8.3. Direct Claims . In any case in which an Indemnified Party seeks indemnification hereunder which is not subject to Section 8.2 because no third-party action is involved, the Indemnified Party shall notify the Indemnifying Party in writing of any Indemnified Costs which such Indemnified Party claims are subject to indemnification under the terms hereof. Subject to the limitations set forth in Section 8.4(a) , the failure of the Indemnified Party to exercise promptness in such notification shall not amount to a waiver of such claim unless the resulting delay materially prejudices the position of the Indemnifying Party with respect to such claim.
8.4. Limitations . The following provisions of this Section 8.4 shall limit the indemnification obligations hereunder:
(a) Limitation as to Time . The Indemnifying Party shall not be liable for any Indemnified Costs pursuant to this Article VIII unless a written claim for indemnification in accordance with Section 8.2 or Section 8.3 is given by the Indemnified Party to the Indemnifying Party with respect thereto on or before 5:00 p.m., Dallas, Texas time, on the anniversary of the Closing Date; provided that the Indemnifying Party shall be liable for Indemnified Costs with respect to claims for indemnification for breach of the representations and warranties contained in Sections 4.1 (Organization), 4.2 (Authorization), 4.5 (Title), 5.1 (Organization) and 5.2 (Authorization), if a written claim for indemnification in accordance with Section 8.2 or Section 8.3 is given by the Indemnified Party to the Indemnifying Party at any time prior to the expiration of the applicable statute of limitations.
8
(b) Sole and Exclusive Remedy . Each Party acknowledges and agrees that, after the Closing Date, notwithstanding any other provision of this Agreement to the contrary, Buyers and the other Buyer Indemnified Parties and Seller and the other Seller Indemnified Parties sole and exclusive remedy with respect to the Indemnified Costs shall be in accordance with, and limited by, the provisions set forth in this Article VIII . The Parties further acknowledge and agree that the foregoing is not the remedy for and does not limit the Parties remedies for matters covered by the indemnification provisions contained in the Amended and Restated Omnibus Agreement.
8.5. Tax Related Adjustments . Seller and Buyer agree that any payment of Indemnified Costs made hereunder by Buyer will be treated by the Parties on their tax returns as an adjustment to the taxable consideration received by Buyer in exchange for the Terminal.
ARTICLE IX
MISCELLANEOUS
9.1. Expenses . Except as provided in Section 3.3 of this Agreement, or as provided in the Ancillary Documents or the Amended and Restated Omnibus Agreement, all costs and expenses incurred by the Parties in connection with this Agreement and the consummation of the transactions contemplated hereby shall be borne solely and entirely by the Party which has incurred such expense.
9.2. Notices. Any notice or other communication given under this Agreement shall be in writing and shall be provided in the manner, and deemed delivered at the time, set forth in the Amended and Restated Omnibus Agreement.
9.3. Severability . If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced under Applicable Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated herein are not affected in any manner adverse to any Party. Upon such determination that any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated herein are consummated as originally contemplated to the fullest extent possible.
9.4. Governing Law; Jurisdiction; Waiver of Jury Trial . This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federal courts in the State of Texas and to venue in Dallas, Texas. EACH OF THE PARTIES IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
9.5. Dispute Resolution . Any Dispute arising out of or in connection with this Agreement, including any question regarding the existence, validity or termination of this Agreement, shall be exclusively resolved in accordance with the provisions relating to dispute resolution set forth in the Amended and Restated Omnibus Agreement. Pending resolution of any Dispute between the Parties, the Parties shall continue to perform in good faith their respective obligations under this Agreement based upon the last agreed performance demonstrated prior to the Dispute.
9
9.6. Parties in Interest . This Agreement shall be binding upon and inure solely to the benefit of each Party and their successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement.
9.7. Assignment of Agreement . At any time, the Parties may make a collateral assignment of their rights under this Agreement to any of their bona fide lenders or debt holders, or a trustee or a representative for any of them, and the non-assigning Parties shall execute an acknowledgment of such collateral assignment in such form as may from time to time be reasonably requested; provided , however , that unless written notice is given to the non-assigning Parties that any such collateral assignment has been foreclosed upon, such non-assigning Parties shall be entitled to deal exclusively with Seller or HFC, as the case may be, as to any matters arising under this Agreement, the Ancillary Documents or the Amended and Restated Omnibus Agreement (other than for delivery of notices required by any such collateral assignment). Except as otherwise provided in this Section 9.7 , neither this Agreement nor any of the rights, interests, or obligations hereunder may be assigned by any Party without the prior written consent of the other Parties.
9.8. Captions . The captions in this Agreement are for purposes of reference only and shall not limit or otherwise affect the interpretation hereof.
9.9. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
9.10. Director and Officer Liability . The directors, managers, officers, partners and stockholders of HFC, Buyer, Seller and their respective Affiliates shall not have any personal liability or obligation arising under this Agreement (including any claims that another party may assert) other than, if applicable, as a direct party to or as an assignee of this Agreement or pursuant to a written guarantee.
9.11. Integration . This Agreement, the Ancillary Documents and the Amended and Restated Omnibus Agreement supersede any previous understandings or agreements among the Parties, whether oral or written, with respect to their subject matter. This Agreement, the Ancillary Documents and the Amended and Restated Omnibus Agreement contain the entire understanding of the Parties with respect to the subject matter hereof and thereof. 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, the Ancillary Documents or the Amended and Restated Omnibus Agreement unless it is contained in a written amendment hereto or thereto and executed by the Parties hereto or thereto after the date of this Agreement, the Ancillary Documents or the Amended and Restated Omnibus Agreement. To the extent that there is any conflict between the Ancillary Documents and this Agreement, this Agreement shall prevail.
9.12. Effect of Agreement . The Parties ratify and confirm that except as otherwise expressly provided herein, in the event this Agreement conflicts in any way with the Amended and Restated Omnibus Agreement, the terms and provisions of the Amended and Restated Omnibus Agreement shall control.
9.13. Amendment; Waiver . This Agreement may be amended only in a writing signed by all parties hereto. Any waiver of rights hereunder must be set forth in writing. A waiver of any breach or failure to enforce any of the terms or conditions of this Agreement shall not in any way affect, limit or waive any partys rights at any time to enforce strict compliance thereafter with every term or condition of this Agreement.
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9.14. Survival of Representations and Warranties . The representations and warranties set forth in this Agreement shall survive the Closing until 5:00 p.m., Dallas, Texas time on, on the anniversary of the Closing Date, except that the representations and warranties contained in Sections 4.1 (Organization), 4.2 (Authorization), 4.5 (Title), 5.1 (Organization) and 5.2 (Authorization) shall survive until the expiration of the applicable statute of limitations; provided , however , that any representation and warranty that is the subject of a claim for indemnification hereunder which claim was timely made pursuant to Section 8.2 or 8.3 shall survive with respect to such claim until such claim is finally paid or adjudicated.
9.15. WAIVERS AND DISCLAIMERS . NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES AND OTHER COVENANTS AND AGREEMENTS MADE BY THE PARTIES IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS AND THE AMENDED AND RESTATED OMNIBUS AGREEMENT, THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS MADE, DOES NOT MAKE, AND EACH SUCH PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (I) THE VALUE, NATURE, QUALITY OR CONDITION OF THE PROPERTY, (II) THE INCOME TO BE DERIVED FROM THE PROPERTY, (III) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREWITH, (IV) THE COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING, ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (V) THE MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY. EXCEPT TO THE EXTENT PROVIDED IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE AMENDED AND RESTATED OMNIBUS AGREEMENT NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EXCEPT TO THE EXTENT PROVIDED IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE AMENDED AND RESTATED OMNIBUS AGREEMENT, EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE TRANSFER AND CONVEYANCE OF THE PROPERTY SHALL BE MADE IN AN AS IS, WHERE IS CONDITION WITH ALL FAULTS, AND THE PROPERTY IS TRANSFERRED AND CONVEYED SUBJECT TO ALL OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE THE TRANSFER AND CONVEYANCE OF THE PROPERTY OR THE TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE PROPERTY THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE, EXCEPT AS SET FORTH IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE AMENDED AND RESTATED OMNIBUS AGREEMENT.
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ARTICLE X
GUARANTEES
10.1 Guarantee by HFC .
(a) Payment Guaranty . HFC unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to Seller the punctual and complete payment in full when due of all amounts due from Buyer under this Agreement (collectively, the Buyer Payment Obligations ). HFC agrees that Seller shall be entitled to enforce directly against HFC any of the Buyer Payment Obligations.
(b) Guaranty Absolute . HFC hereby guarantees that the Buyer Payment Obligations will be paid strictly in accordance with the terms of this Agreement. The obligations of HFC under this Agreement constitute a present and continuing guaranty of payment, and not of collection or collectability. The liability of HFC under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:
(i) any assignment or other transfer of this Agreement or any of the rights thereunder of Buyer;
(ii) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to this Agreement;
(iii) any acceptance by Seller of partial payment from Buyer;
(iv) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to Buyer or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding;
(v) any absence of any notice to, or knowledge of, HFC, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (i) through (iv); or
(vi) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.
The obligations of HFC hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Buyer Payment Obligations or otherwise.
(c) Waiver . HFC hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the Buyer Payment Obligations and any requirement for Seller to protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against Buyer, any other entity or any collateral.
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(d) Subrogation Waiver . HFC agrees that for so long as there is a current or ongoing default or breach of this Agreement by Buyer, HFC shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from Buyer for any payments made by HFC under this Section 10.1 , and HFC hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter acquire against Buyer during any period of default or breach of this Agreement by Buyer until such time as there is no current or ongoing default or breach of this Agreement by Buyer.
(e) Reinstatement . The obligations of HFC under this Section 10.1 shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Buyer Payment Obligations is rescinded or must otherwise be returned to Buyer or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of Buyer or such other entity, or for any other reason, all as though such payment had not been made.
(f) Continuing Guaranty . This Section 10.1 is a continuing guaranty and shall (i) remain in full force and effect until the first to occur of the indefeasible payment in full of all of the Buyer Payment Obligations, (ii) be binding upon HFC and its successors and assigns and (iii) inure to the benefit of and be enforceable by Seller and its successors, transferees and assigns.
(g) No Duty to Pursue Others . It shall not be necessary for Seller (and HFC hereby waives any rights which HFC may have to require Seller), in order to enforce such payment by HFC, first to (i) institute suit or exhaust its remedies against Buyer or others liable on the Buyer Payment Obligations or any other person, (ii) enforce Sellers rights against any other guarantors of the Buyer Payment Obligations, (iii) join Buyer or any others liable on the Buyer Payment Obligations in any action seeking to enforce this Section 10.1 , (iv) exhaust any remedies available to Seller against any security which shall ever have been given to secure the Buyer Payment Obligations, or (v) resort to any other means of obtaining payment of the Buyer Payment Obligations.
10.2 Guarantee by Partnership .
(a) Payment Guaranty . The Partnership unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to Buyer the punctual and complete payment in full when due of all amounts due from Seller under this Agreement (collectively, the Seller Obligations ). The Partnership agrees that Buyer shall be entitled to enforce directly against the Partnership any of the Seller Obligations.
(b) Guaranty Absolute . The Partnership hereby guarantees that the Seller Obligations will be paid strictly in accordance with the terms of this Agreement. The obligations of the Partnership under this Agreement constitute a present and continuing guaranty of payment, and not of collection or collectability. The liability of the Partnership under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:
(i) any assignment or other transfer of this Agreement or any of the rights thereunder of Buyer;
(ii) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to this Agreement;
(iii) any acceptance by Buyer of partial payment from Seller;
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(iv) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to Seller or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding;
(v) any absence of any notice to, or knowledge of, the Partnership, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (i) through (iv); or
(vi) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.
The obligations of the Partnership hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Seller Obligations or otherwise.
(c) Waiver . The Partnership hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the Seller Obligations and any requirement for Buyer to protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against Seller, any other entity or any collateral.
(d) Subrogation Waiver . The Partnership agrees that for so long as there is a current or ongoing default or breach of this Agreement by Seller, the Partnership shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from Seller for any payments made by the Partnership under this Section 10.2 , and the Partnership hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter acquire against Seller during any period of default or breach of this Agreement by Seller until such time as there is no current or ongoing default or breach of this Agreement by Seller.
(e) Reinstatement . The obligations of the Partnership under this Section 10.2 shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Seller Obligations is rescinded or must otherwise be returned to Seller or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of Seller or such other entity, or for any other reason, all as though such payment had not been made.
(f) Continuing Guaranty . This Section 10.2 is a continuing guaranty and shall (i) remain in full force and effect until the first to occur of the indefeasible payment and/or performance in full of all of the Seller Obligations, (ii) be binding upon the Partnership and its successors and assigns and (iii) inure to the benefit of and be enforceable by Buyer and its successors, transferees and assigns.
(g) No Duty to Pursue Others . It shall not be necessary for Buyer (and the Partnership hereby waives any rights which the Partnership may have to require Buyer), in order to enforce such payment by the Partnership, first to (i) institute suit or exhaust its remedies against Seller or others liable on the Seller Obligations or any other person, (ii) enforce Buyers rights against any other guarantors of the Seller Obligations, (iii) join the Partnership or any others liable on the Seller
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Obligations in any action seeking to enforce this Section 10.2 , (iv) exhaust any remedies available to Buyer against any security which shall ever have been given to secure the Seller Obligations or (v) resort to any other means of obtaining payment of the Seller Obligations.
[ The Remainder of this Page is Intentionally Left Blank]
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IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the Effective Time.
SELLER: | ||||||||
HEP REFINING ASSETS, L.P., a Delaware limited partnership | ||||||||
By: | HEP Refining GP, L.L.C., a Delaware limited liability company, its general partner | |||||||
By: | Navajo Refining Company, L.P., a Delaware limited partnership, its sole member | |||||||
By: | Navajo Refining GP, L.L.C., a Delaware limited liability company, its general partner | |||||||
By: |
/s/ Michael C. Jennings |
|||||||
Michael C. Jennings | ||||||||
Chief Executive Officer | ||||||||
BUYER: | ||||||||
EL PASO LOGISTICS LLC, a Delaware limited liability company | ||||||||
By: |
/s/ George J. Damiris |
|||||||
George J. Damiris | ||||||||
Chief Executive Officer and President |
[Signature Page to Refined Products Terminal Transfer Agreement]
ACKNOWLEDGED AND AGREED FOR | ||
THE PURPOSES ONLY OF SECTION 10.1 : | ||
HOLLYFRONTIER CORPORATION | ||
By: |
/s/ George J. Damiris |
|
George J. Damiris | ||
Chief Executive Officer and President | ||
ACKNOWLEDGED AND AGREED FOR | ||
THE PURPOSES ONLY OF SECTION 10.2 : | ||
HOLLY ENERGY PARTNERS, L.P. | ||
By: | HEP Logistics Holdings, L.P., | |
its General Partner | ||
By: | Holly Logistic Services, L.L.C., | |
its General Partner | ||
By: |
/s/ Michael C. Jennings |
|
Michael C. Jennings | ||
Chief Executive Officer | ||
ACKNOWLEDGED AND AGREED FOR | ||
THE PURPOSES ONLY OF SECTION 6.2 : | ||
HOLLY ENERGY PARTNERS - OPERATING, L.P. | ||
By: |
/s/ Michael C. Jennings |
|
Michael C. Jennings | ||
Chief Executive Officer |
[Signature Page to Refined Products Terminal Transfer Agreement]
EXHIBIT A
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REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT
Legal Description of Real Property
PARCEL 1:
Being a portion of Tract 1A2, Block 4, Ascarate Grant, City of El Paso, El Paso County, Texas and being more particularly described by metes and bounds as follows:
COMMENCING FOR REFERENCE at the most northeasterly corner of said Tract 1A2;
THENCE, along the north easterly line of said Tract 1A2, South 58 degrees 01 00 East, a distance of 3,218.47 feet to a point;
THENCE, leaving said northeasterly line. South 30 degrees 55 00 West, a distance of 150.06 feet to the POINT OF BEGINNING for the herein described Tract;
THENCE, South 58 degrees 01 00 East, a distance of 792.36 feet to a point for corner;
THENCE, South 32 degrees 35 17 West, a distance of 261.19 feet to a point for corner;
THENCE, North 57 degrees 37 10 West, a distance of 784.87 feet to a point for corner;
THENCE, North 30 degrees 55 00 East, a distance of 255.78 feet to the POINT OF BEGINNING and containing 4.679 acres of land.
PARCEL 2:
Being a portion of Tract 1 A3, Block 4, Ascarate Grant, City of El Paso, El Paso County, Texas and being more particularly described by metes and bounds as follows:
COMMENCING FOR REFERENCE at the most northeasterly corner of said Tract 1A3;
THENCE, along the northeasterly line of said Tract 1A3, South 58 degrees 01 00 East, a distance of 3,499.26 feet to a point;
THENCE, leaving said northeasterly line, South 32 degrees 14 00 West, a distance of 488.89 feet to the POINT OF BEGINNING for the herein described Tract;
THENCE, South 57 degrees 49 00 East, a distance of 909.00 feet to a point for corner;
THENCE, South 59 degrees 54 00 East, a distance of 141.10 feet to a point for comer;
THENCE, South 32 degrees 14 00 West, a distance of 335.13 feet to a point for comer;
THENCE, North 57 degrees 49 00 West, a distance of 1,050.00 feet to a point for corner;
THENCE, North 32 degrees 14 00 East, a distance of 330.00 feet to the POINT OF BEGINNING and containing 7.963 acres of land.
PARCEL 3:
Being a portion of Tract 1A8, Block 4, Ascarate Grant, .City of El Paso, El Paso County, Texas and being more particularly described by metes and bounds as follows:
COMMENCING FOR REFERENCE at the City Monument at the centerline intersection of Hawkins Boulevard and Tony Lama Street;
THENCE, along the center line of said Hawkins Boulevard, North 58 degrees 01 00 West, a distance of 1,263.28 feet to a City Monument at me beginning of a curve to the right;
Exhibit A-1
THENCE, leaving said center line. North 60 degrees 23 42 West, a distance of 453.15 feet to a point set 1/2 rebar in the south right-of-way line of said Hawkins Boulevard and POINT OF BEGINNING for the herein described tract;
THENCE, leaving said south right-of-way line and along the arc of a curve to the right (Delta Angle - 63 degrees 1631, Radius - 335.00 feet, Chord - North 89 degrees 15 26 West, 351.45 feet) a distance of 369.96 feet.to a set 1/2 rebar; .
THENCE, North 57 degrees 37 10 West, a distance of 558.04 feet to a set 1/2 rebar;
THENCE, North 32 degrees 35 17 East, a distance of 261.19 feet to a set 1/2 rebar in the south right-of-way line of a 150 feet wide City of El Paso drainage right-of-way;
THENCE, along the south line of said drainage right-of-way, South 58 degrees 01 00 East, a distance of 698.23 feet to a set 1/2 rebar in the south right-of-way line of said Hawkins Boulevard;
THENCE, along said south right-of-way line in a curve to the left South 29 degrees 59 56 East, 176.18 feet) a distance of 176.70 feet to the POINT OF BEGINNING and containing 202,904 square feet or 4.658 acres of land.
PARCEL 4:
Lots 39 to 55, inclusive, Block 8, East Side Industrial District Unit One, an addition to the City of El Paso, El Paso County, Texas, according to the map thereof on File in Book 1, Page 44, Plat Records, El Paso County, Texas.
Exhibit A-2
EXHIBIT B
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REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT
Definitions
Action means any claim, action, suit, investigation, inquiry, proceeding, condemnation or audit by or before any court or other Governmental Authority or any arbitration proceeding.
Affiliate means, with respect to a specified person, any other person controlling, controlled by or under common control with that first person. As used in this definition, the term control includes (i) with respect to any person having voting securities or the equivalent and elected directors, managers or persons performing similar functions, the ownership of or power to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the power to vote in the election of directors, managers or persons performing similar functions, (ii) ownership of 50% or more of the equity or equivalent interest in any person and (iii) the ability to direct the business and affairs of any person by acting as a general partner, manager or otherwise. Notwithstanding the foregoing, no HollyFrontier Entity will be considered an Affiliate of an HEP Entity, and no HEP Entity will be considered an Affiliate of a HFC Entity.
Alon means Alon USA, Inc.
Alon Documents means the following agreements between Seller and Alon: (a) Storage and Product Handling Agreement dated February 21, 1997, as amended, by and between the Partnership, successor-in-interest to Navajo Refining Company, L.L.C. and Alon, successor-in-interest to Fina Oil and Chemical Company, and (b) Pipeline Lease Agreement dated as of February 21, 1997, as amended, between Alon, as successor-in-interest to American Petroleum Pipe Line Company and HEP Operating, as successor-in-interest to Navajo Pipeline Company.
Agreement has the meaning set forth in the Preamble.
Amended and Restated Omnibus Agreement means that certain Fourteenth Amended and Restated Omnibus Agreement dated the date hereof among HFC and the Partnership and certain of their Affiliates.
Amended and Restated Master Systems Operating Agreement has the meaning set forth in Section 3.2(f) .
Amended and Restated Master Throughput Agreement has the meaning set forth in Section 3.2(g) .
Ancillary Documents means, collectively, the Buyer Ancillary Documents and the Seller Ancillary Documents.
Applicable Law means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by any Governmental Authority having or asserting jurisdiction over the matter or matters
Exhibit B-1
in question, whether now or hereafter in effect and in each case as amended (including, without limitation, all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question.
Assigned Contracts has the meaning set forth in the Recitals.
Business Day means any day other than Saturday, Sunday or other day upon which commercial banks in Dallas, Texas are authorized by law to close.
Buyer has the meaning set forth in the Preamble.
Buyer Ancillary Documents means each agreement, document, instrument or certificate to be delivered by Buyer, or their Affiliates, at the Closing pursuant to Section 3.3 and each other document or Contract entered into by Buyer, or its Affiliates, in connection with this Agreement or the Closing.
Buyer Indemnified Costs means, subject to Article VIII , any and all damages, losses, Claims, assessments, judgments, liabilities, demands, charges, suits, penalties, costs, and expenses (including court costs and reasonable attorneys fees and expenses incurred in investigating and preparing for any litigation or proceeding) that any of the Buyer Indemnified Parties incurs and that arise out of or relate to any breach of a representation, warranty or covenant of Seller under this Agreement. Notwithstanding anything in the foregoing to the contrary, Buyer Indemnified Costs shall exclude any and all indirect, consequential, punitive, or exemplary damages (other than those that are a result of (a) a third-party action for such indirect, consequential, punitive or exemplary damages, or (b) the gross negligence or willful misconduct of Seller or, to the extent occurring before the Closing Date, the Company).
Buyer Indemnified Parties means Buyer and HFC and each officer, director, partner, manager, employee, consultant, stockholder and Affiliate of Buyer and HFC.
Buyer Payment Obligations has the meaning set forth in Section 10.1 .
Claim means any existing or threatened future claim, demand, suit, action, investigation, proceeding, governmental action or cause of action of any kind or character (in each case, whether civil, criminal, investigative or administrative), known or unknown, under any theory, including those based on theories of contract, tort, statutory liability, strict liability, employer liability, premises liability, products liability, breach of warranty or malpractice.
Closing has the meaning set forth in Section 3.1 .
Closing Date has the meaning set forth in Section 3.1 .
Code means the Internal Revenue Code of 1986, as amended.
Consents means all notices to, authorizations, consents, Orders or approvals of, or registrations, declarations or filings with, or expiration of waiting periods imposed by, any Governmental Authority, and any notices to, consents or approvals of any other third party, in each case that are required by Applicable Law or by Contract in order to consummate the transactions contemplated by this Agreement and the Ancillary Documents.
Exhibit B-2
Contract means any written or oral contract, agreement, indenture, instrument, note, bond, loan, lease, mortgage, franchise, license agreement, purchase order, binding bid or offer, binding term sheet or letter of intent or memorandum, commitment, letter of credit or any other legally binding arrangement, including any amendments or modifications thereof and waivers relating thereto.
Deed has the meaning set forth in Section 3.2(a) .
Dispute means any dispute or difference that arises between the Parties in connection with or arising out of this Agreement (including, any dispute as to the termination or invalidity of this Agreement or any provision of it).
Effective Time has the meaning set forth in Section 3.1 .
Encumbrance means any mortgage, pledge, charge, hypothecation, claim, easement right of purchase, security interest, deed of trust, conditional sales agreement, encumbrance, interest, option, lien, right of first refusal, right of way, defect in title, encroachments or other restriction, whether or not imposed by operation of Applicable Law, any voting trust or voting agreement, stockholder agreement or proxy, created by, through or under Seller.
Excluded Assets has the meaning set forth in Section 2.4 .
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.
HEP Operating has the meaning set forth in the Preamble.
HFC has the meaning set forth in the Preamble.
HFC Entities means HFC and its direct and indirect subsidiaries other than the HEP Entities.
HFRM has the meaning set forth in the Recitals.
Improvements has the meaning set forth in the Recitals.
Indemnified Costs means Buyer Indemnified Costs and Seller Indemnified Costs, as applicable.
Indemnified Party means Buyer Indemnified Parties and Seller Indemnified Parties.
Indemnifying Party has the meaning set forth in Section 8.2 .
Knowledge and any variations thereof, or words to the same effect, means (i) with respect to Seller, actual knowledge after reasonable inquiry of Mark Cunningham and Richard Voliva; and (ii) with respect to Buyer, actual knowledge after reasonable inquiry of George Damiris.
LLC Transfer Agreement has the meaning set forth in the Recitals.
Exhibit B-3
Material Adverse Effect means any adverse change, circumstance, effect or condition in or relating to the assets, financial condition, results of operations, or business of any person that materially affects the business of such person or that materially impedes the ability of any person to consummate the transactions contemplated hereby, other than any change, circumstance, effect or condition in the refining or pipelines industries generally (including any change in the prices of crude oil, natural gas, natural gas liquids, feedstocks or refined products or other hydrocarbon products, industry margins or any regulatory changes or changes in Applicable Law) or in United States or global economic conditions or financial markets in general. Any determination as to whether any change, circumstance, effect or condition has a Material Adverse Effect shall be made only after taking into account all effective insurance coverages and effective third-party indemnifications with respect to such change, circumstance, effect or condition.
Monetary Liens means any mortgage, deed of trust, judgment lien or other similar financial encumbrance arising by, through or under Seller.
Osage Transaction has the meaning set forth in the Recitals.
Order means any order, writ, injunction, decree, compliance or consent order or decree, settlement agreement, schedule and similar binding legal agreement issued by or entered into with a Governmental Authority.
Partnership has the meaning set forth in the Preamble.
Party and Parties have the meanings set forth in the Preamble.
Permits means all material permits, licenses, variances, exemptions, Orders, franchises and approvals of all Governmental Authorities necessary for the lawful ownership and operation of the Terminal, including the Assets.
Permitted Encumbrances means recorded encumbrances, agreements, defects, restrictions and adverse claims covering the Property and all Applicable Laws, rules, regulations, ordinances, judgments and orders of governmental authorities or tribunals having or asserting jurisdiction over the Property and operations conducted thereon or therewith, in each case to the extent the same are valid and enforceable and affect the Property, including, without limitation (i) all matters that a current on the ground survey, title insurance commitment or policy, or visual inspection of the Property would reflect, (ii) the applicable liabilities assumed in Section 2.2 , and (iii) any additional matters specified in Permitted Encumbrances as defined in the Deed.
Person means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, Governmental Authority or other entity.
Property has the meaning set forth in the Recitals.
Real Property has the meaning set forth in the Recitals.
Seller has the meaning set forth in the Preamble.
Seller Ancillary Documents means each agreement, document, instrument or certificate to be delivered by Seller, or its Affiliates, at the Closing pursuant to Section 3.2 and each other document or Contract entered into by Seller, or its Affiliates, in connection with this Agreement or the Closing.
Exhibit B-4
Seller Indemnified Costs means any and all damages, losses, Claims, liabilities, demands, charges, suits, penalties, costs, and expenses (including court costs and reasonable attorneys fees and expenses incurred in investigating and preparing for any litigation or proceeding) that any of the Seller Indemnified Parties incur and that arise out of or relate to any breach of a representation, warranty or covenant of Buyer under this Agreement. Notwithstanding anything in the foregoing to the contrary, Seller Indemnified Costs shall exclude any and all indirect, consequential, punitive or exemplary damages (other than those that are a result of (x) a third-party claim for such indirect, consequential, punitive or exemplary damages or (y) the gross negligence or willful misconduct of Buyer).
Seller Indemnified Parties means Seller and each officer, director, partner, manager, employee, consultant, stockholder, and Affiliate of Seller, including the Partnership.
Seller Obligations has the meaning set forth in Section 10.2 .
Tangible Personal Property has the meaning set forth in the Recitals.
Tax or Taxes means (i) all taxes, assessments, fees, and other charges of any kind whatsoever imposed by any Governmental Authority, including any federal, state, local and/or foreign income tax, net worth tax, production tax, value added tax, withholding tax, gross receipts tax, profits tax, ad valorem tax, personal property tax, real property tax, sales tax, goods and services tax, transfer tax, use tax, excise tax, insurance tax, capital stock tax, franchise tax, payroll tax, employment tax, unemployment tax, disability tax, alternative or add-on minimum tax and estimated tax, (ii) any interest, fine, penalty or additions to tax imposed by a Governmental Authority in connection with any item described in clause (i), and (iii) any liability in respect of any item described in clauses (i) or (ii) above, that arises by reason of a contract, assumption, transferee, successor liability or operation of law.
Tax Return shall mean any report, return, information statement, schedule, attachment, payee statement or other information required to be provided to any Governmental Authority with respect to Taxes or any amendment thereof.
Terminal has the meaning set forth in the Recitals.
Terminal Liabilities means all obligations and liabilities associated with the Property, including the Assigned Contracts but excluding the Alon Documents and the liabilities identified in Section 2.3 .
third-party action has the meaning set forth in Section 8.2 .
Exhibit B-5
EXHIBIT C
to
REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT
Interpretation
As used in this Agreement, unless a clear contrary intention appears:
(a) any reference to the singular includes the plural and vice versa, any reference to natural persons includes legal persons and vice versa, and any reference to a gender includes the other gender;
(b) the words hereof, hereby, herein, and hereunder and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;
(c) any reference to Articles, Sections and Exhibits are, unless otherwise stated, references to Articles, Sections and Exhibits of or to this Agreement and references in any Section or definition to any clause means such clause of such Section or definition. The headings in this Agreement have been inserted for convenience only and shall not be taken into account in its interpretation;
(d) reference to any agreement (including this Agreement), document or instrument means such agreement, document, or instrument as amended, modified or supplemented and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of this Agreement;
(e) the Exhibits and Schedules hereto form an integral part of this Agreement and are equally binding therewith. Any reference to this Agreement shall include such Exhibits and Schedules;
(f) references to a person shall include any permitted assignee or successor to such Party in accordance with this Agreement and reference to a person in a particular capacity excludes such person in any other capacity;
(g) if any period is referred to in this Agreement by way of reference to a number of days, the days shall be calculated exclusively of the first and inclusively of the last day unless the last day falls on a day that is not a Business Day in which case the last day shall be the next succeeding Business Day;
(h) the use of or is not intended to be exclusive unless explicitly indicated otherwise;
(i) references to $ or to dollars shall mean the lawful currency of the United States of America; and
(j) the words includes, including, or any derivation thereof shall mean including without limitation or including, but not limited to.
Exhibit C-1
EXHIBIT D
to
REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT
Form of Deed
After Recording, Return To:
HollyFrontier Corporation
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
Attention: General Counsel
SPECIAL WARRANTY DEED
STATE OF TEXAS | § | |||
§ | KNOW ALL MEN BY THESE PRESENTS: | |||
COUNTY OF EL PASO | § |
HEP REFINING ASSETS, L.P., a Delaware limited partnership ( Grantor ), for and in consideration of the sum of $10.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, has GRANTED, BARGAINED, SOLD, and CONVEYED and by these presents does GRANT, BARGAIN, SELL, and CONVEY unto EL PASO LOGISTICS LLC, a Delaware limited liability company ( Grantee ) the real property in El Paso County, Texas, fully described in Exhibit A hereto, together with all easements, rights, titles, and interests appurtenant thereto (collectively, the Property ).
This Special Warranty Deed and the conveyance hereinabove set forth is executed by Grantor and accepted by Grantee subject to general real property taxes not now due and payable, all restrictions, reservations, easements, encumbrances, and other conditions of record as may be disclosed by a record examination of title to the Property, other than monetary liens and financial encumbrances arising by, through or under Grantor, and such matters as may be disclosed by a physical inspection of the Property (collectively, the Permitted Encumbrances ).
TO HAVE AND TO HOLD the Property, together with all and singular the rights and appurtenances thereunto in anywise belonging, unto Grantee, its successors and assigns forever, and Grantor does hereby bind itself, its successors and assigns, to WARRANT AND FOREVER DEFEND all and singular the title to the Property unto the said Grantee, its successors and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof by, through, or under Grantor but not otherwise, subject to the Permitted Encumbrances.
Grantees address is 2828 N. Harwood, Suite 1300, Dallas, Texas 75201.
Exhibit C-2
EXECUTED as of February , 2016.
HEP REFINING ASSETS, L.P., a Delaware limited partnership | ||||||||
By: HEP Refining GP, L.L.C., a Delaware limited liability company, its general partner | ||||||||
By: Navajo Refining Company, L.P., a Delaware limited partnership, its sole member | ||||||||
By: Navajo Refining GP, L.L.C., a Delaware limited liability company, its general partner | ||||||||
By: |
|
|||||||
Michael C. Jennings | ||||||||
Chief Executive Officer |
STATE OF TEXAS | § | |||
§ | ||||
COUNTY OF | § |
This instrument was acknowledged before me on February , 2016, by Michael C. Jennings, the Chief Executive Officer of Navajo Refining GP, L.L.C., a Delaware limited liability company, acting as the general partner of Navajo Refining Company, L.P., a Delaware limited partnership, acting as the sole member of HEP Refining GP, L.L.C., a Delaware limited liability company, acting as the general partner of HEP Refining Assets, L.P., a Delaware limited partnership.
|
Notary Public, State of Texas |
Exhibit C-3
EXHIBIT A
TO
SPECIAL WARRANTY DEED
(Legal Description of the Property)
PARCEL 1:
Being a portion of Tract 1A2, Block 4, Ascarate Grant, City of El Paso, El Paso County, Texas and being more particularly described by metes and bounds as follows:
COMMENCING FOR REFERENCE at the most northeasterly corner of said Tract 1A2;
THENCE, along the north easterly line of said Tract 1A2, South 58 degrees 01 00 East, a distance of 3,218.47 feet to a point;
THENCE, leaving said northeasterly line. South 30 degrees 55 00 West, a distance of 150.06 feet to the POINT OF BEGINNING for the herein described Tract;
THENCE, South 58 degrees 01 00 East, a distance of 792.36 feet to a point for corner;
THENCE, South 32 degrees 35 17 West, a distance of 261.19 feet to a point for corner;
THENCE, North 57 degrees 37 10 West, a distance of 784.87 feet to a point for corner;
THENCE, North 30 degrees 55 00 East, a distance of 255.78 feet to the POINT OF BEGINNING and containing 4.679 acres of land.
PARCEL 2:
Being a portion of Tract 1 A3, Block 4, Ascarate Grant, City of El Paso, El Paso County, Texas and being more particularly described by metes and bounds as follows:
COMMENCING FOR REFERENCE at the most northeasterly corner of said Tract 1A3;
THENCE, along the northeasterly line of said Tract 1A3, South 58 degrees 01 00 East, a distance of 3,499.26 feet to a point;
THENCE, leaving said northeasterly line, South 32 degrees 14 00 West, a distance of 488.89 feet to the POINT OF BEGINNING for the herein described Tract;
THENCE, South 57 degrees 49 00 East, a distance of 909.00 feet to a point for corner;
THENCE, South 59 degrees 54 00 East, a distance of 141.10 feet to a point for comer;
THENCE, South 32 degrees 14 00 West, a distance of 335.13 feet to a point for comer;
THENCE, North 57 degrees 4900 West, a distance of 1,050.00 feet to a point for corner;
THENCE, North 32 degrees 14 00 East, a distance of 330.00 feet to the POINT OF BEGINNING and containing 7.963 acres of land.
PARCEL 3:
Being a portion of Tract 1A8, Block 4, Ascarate Grant, .City of El Paso, El Paso County, Texas and being more particularly described by metes and bounds as follows:
COMMENCING FOR REFERENCE at the City Monument at the centerline intersection of Hawkins Boulevard and Tony Lama Street;
THENCE, along the center line of said Hawkins Boulevard, North 58 degrees 01 00 West, a distance of 1,263.28 feet to a City Monument at me beginning of a curve to the right;
THENCE, leaving said center line. North 60 degrees 23 42 West, a distance of 453.15 feet to a point set 1/2 rebar in the south right-of-way line of said Hawkins Boulevard and POINT OF BEGINNING for the herein described tract;
Exhibit D-1
THENCE, leaving said south right-of-way line and along the arc of a curve to the right (Delta Angle - 63 degrees 1631, Radius - 335.00 feet, Chord - North 89 degrees 15 26 West, 351.45 feet) a distance of 369.96 feet.to a set 1/2 rebar; .
THENCE, North 57 degrees 37 10 West, a distance of 558.04 feet to a set 1/2 rebar;
THENCE, North 32 degrees 35 17 East, a distance of 261.19 feet to a set 1/2 rebar in the south right-of-way line of a 150 feet wide City of El Paso drainage right-of-way;
THENCE, along the south line of said drainage right-of-way, South 58 degrees 01 00 East, a distance of 698.23 feet to a set 1/2 rebar in the south right-of-way line of said Hawkins Boulevard;
THENCE, along said south right-of-way line in a curve to the left South 29 degrees 59 56 East, 176.18 feet) a distance of 176.70 feet to the POINT OF BEGINNING and containing 202,904 square feet or 4.658 acres of land.
PARCEL 4:
Lots 39 to 55, inclusive, Block 8, East Side Industrial District Unit One, an addition to the City of El Paso, El Paso County, Texas, according to the map thereof on File in Book 1, Page 44, Plat Records, El Paso County, Texas.
Exhibit D-2
EXHIBIT E
to
REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT
Form of Bill of Sale
BILL OF SALE AND ASSIGNMENT
HEP REFINING ASSETS, L.P., a Delaware limited partnership ( Grantor ), for good and valuable consideration paid by EL PASO LOGISTICS LLC, a Delaware limited liability company ( Grantee ), the receipt and sufficiency of which are hereby acknowledged, has BARGAINED, SOLD, ASSIGNED and DELIVERED and by these presents does BARGAIN, SELL, ASSIGN and DELIVER unto Grantee all tangible personal property and fixtures owned by Grantor and used in connection with the ownership, maintenance, or operation of the real property described on Exhibit A or the improvements located thereon (the Property ).
This Bill of Sale is made and accepted expressly subject to the Permitted Encumbrances (as defined in the Refined Products Terminal Transfer Agreement dated the date hereof by and among Grantor, Grantee, Holly Energy Partners, L.P., HollyFrontier Corporation and Holly Energy Partners Operating, L.P.) (the Terminal Transfer Agreement ).
Notwithstanding anything in this Agreement to the contrary, this Bill of Sale shall not include any of the Excluded Assets described in the Terminal Transfer Agreement.
[Signatures on following page]
Exhibit D-3
EXECUTED as of February , 2016.
HEP REFINING ASSETS, L.P., a Delaware limited partnership | ||||||||
By: HEP Refining GP, L.L.C., a Delaware limited liability company, its general partner | ||||||||
By: Navajo Refining Company, L.P., a Delaware limited partnership, its sole member | ||||||||
By: Navajo Refining GP, L.L.C., a Delaware limited liability company, its general partner | ||||||||
By: |
|
|||||||
Michael C. Jennings | ||||||||
Chief Executive Officer |
Exhibit D-4
EXHIBIT A
TO
BILL OF SALE AND ASSIGNMENT
(Legal Description of the Property)
PARCEL 1:
Being a portion of Tract 1A2, Block 4, Ascarate Grant, City of El Paso, El Paso County, Texas and being more particularly described by metes and bounds as follows:
COMMENCING FOR REFERENCE at the most northeasterly corner of said Tract 1A2;
THENCE, along the north easterly line of said Tract 1A2, South 58 degrees 01 00 East, a distance of 3,218.47 feet to a point;
THENCE, leaving said northeasterly line. South 30 degrees 55 00 West, a distance of 150.06 feet to the POINT OF BEGINNING for the herein described Tract;
THENCE, South 58 degrees 01 00 East, a distance of 792.36 feet to a point for corner;
THENCE, South 32 degrees 35 17 West, a distance of 261.19 feet to a point for corner;
THENCE, North 57 degrees 37 10 West, a distance of 784.87 feet to a point for corner;
THENCE, North 30 degrees 55 00 East, a distance of 255.78 feet to the POINT OF BEGINNING and containing 4.679 acres of land.
PARCEL 2:
Being a portion of Tract 1 A3, Block 4, Ascarate Grant, City of El Paso, El Paso County, Texas and being more particularly described by metes and bounds as follows:
COMMENCING FOR REFERENCE at the most northeasterly corner of said Tract 1A3;
THENCE, along the northeasterly line of said Tract 1A3, South 58 degrees 01 00 East, a distance of 3,499.26 feet to a point;
THENCE, leaving said northeasterly line, South 32 degrees 14 00 West, a distance of 488.89 feet to the POINT OF BEGINNING for the herein described Tract;
THENCE, South 57 degrees 49 00 East, a distance of 909.00 feet to a point for corner;
THENCE, South 59 degrees 54 00 East, a distance of 141.10 feet to a point for comer;
THENCE, South 32 degrees 14 00 West, a distance of 335.13 feet to a point for comer;
THENCE, North 57 degrees 4900 West, a distance of 1,050.00 feet to a point for corner;
THENCE, North 32 degrees 14 00 East, a distance of 330.00 feet to the POINT OF BEGINNING and containing 7.963 acres of land.
PARCEL 3:
Being a portion of Tract 1A8, Block 4, Ascarate Grant, .City of El Paso, El Paso County, Texas and being more particularly described by metes and bounds as follows:
COMMENCING FOR REFERENCE at the City Monument at the centerline intersection of Hawkins Boulevard and Tony Lama Street;
THENCE, along the center line of said Hawkins Boulevard, North 58 degrees 01 00 West, a distance of 1,263.28 feet to a City Monument at me beginning of a curve to the right;
THENCE, leaving said center line. North 60 degrees 23 42 West, a distance of 453.15 feet to a point set 1/2 rebar in the south right-of-way line of said Hawkins Boulevard and POINT OF BEGINNING for the herein described tract;
Exhibit E-1
THENCE, leaving said south right-of-way line and along the arc of a curve to the right (Delta Angle - 63 degrees 1631, Radius - 335.00 feet, Chord - North 89 degrees 15 26 West, 351.45 feet) a distance of 369.96 feet.to a set 1/2 rebar; .
THENCE, North 57 degrees 37 10 West, a distance of 558.04 feet to a set 1/2 rebar;
THENCE, North 32 degrees 35 17 East, a distance of 261.19 feet to a set 1/2 rebar in the south right-of-way line of a 150 feet wide City of El Paso drainage right-of-way;
THENCE, along the south line of said drainage right-of-way, South 58 degrees 01 00 East, a distance of 698.23 feet to a set 1/2 rebar in the south right-of-way line of said Hawkins Boulevard;
THENCE, along said south right-of-way line in a curve to the left South 29 degrees 59 56 East, 176.18 feet) a distance of 176.70 feet to the POINT OF BEGINNING and containing 202,904 square feet or 4.658 acres of land.
PARCEL 4:
Lots 39 to 55, inclusive, Block 8, East Side Industrial District Unit One, an addition to the City of El Paso, El Paso County, Texas, according to the map thereof on File in Book 1, Page 44, Plat Records, El Paso County, Texas.
Exhibit E-2
SCHEDULE 2.1
to
REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT
Assigned Contracts
Agreements between Seller and third party carriers permitting access to the Terminal by such third party carriers.
Schedule 2.1
SCHEDULE 2.4
to
REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT
Excluded Assets
The Excluded Assets referenced in the foregoing Agreement are the following assets, as further identified on the diagram attached to this Schedule 2.4 :
(a) | 6 Manifold Piping 6 piping in the Eastside portion of the Hawkins Terminal including but not limited to: receiving pig trap; mainline valve MOV-1; flow meter; meter prover; piping and pipe rack inside terminal; launching pig trap; instrumentation including pressure and temperature transmitters and densitometer; |
(b) | Electrical and Controls in the Eastside portion of the Hawkins Terminal including but not limited to: PLC Cabinet and Pipeline PLC; Quickpanel inside Cut Shack; Satellite dish and communication equipment for SCADA; Pipeline UPS & MCC; and |
(c) | Electrical and Controls in the PD portion of the Hawkins Terminal including but not limited to: PLC Cabinet and Pipeline PLC. |
Schedule 2.4
Schedule 2.4
SCHEDULE 4.3
to
REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT
Required Consents - Seller
None
Schedule 4.3
SCHEDULE 5.3
to
REFINED PRODUCTS TERMINAL TRANSFER AGREEMENT
Required Consents - Buyer
None
Schedule 5.3
Exhibit 10.3
Execution Version
SECOND AMENDED AND RESTATED
REFINED PRODUCT PIPELINES AND TERMINALS AGREEMENT
between
HOLLYFRONTIER REFINING AND MARKETING LLC
and
HOLLY ENERGY PARTNERS-OPERATING, L.P.
Dated: February 22, 2016
TABLE OF CONTENTS
Page | ||||
Section 1 Definitions |
3 | |||
Section 2 Agreement to Use Services Relating to Pipelines and Terminals |
6 | |||
Section 3 Exceptions to HFRMs Obligations |
10 | |||
Section 4 Agreement to Remain Shipper |
11 | |||
Section 5 Agreement Not to Challenge Tariffs or Terminal Charges |
11 | |||
Section 6 Effectiveness and Term |
12 | |||
Section 7 Right to Enter into a New Agreement |
12 | |||
Section 8 Notices |
12 | |||
Section 9 Deficiency Payments |
13 | |||
Section 10 Right of First Refusal |
13 | |||
Section 11 Indemnity; Limitation of Damages |
13 | |||
Section 12 Miscellaneous |
14 | |||
Section 13 Guarantee by HollyFrontier |
15 | |||
Section 14 Guarantee by the Partnership |
16 |
SECOND AMENDED AND RESTATED
REFINED PRODUCT PIPELINES AND TERMINALS AGREEMENT
This Second Amended and Restated Refined Product Pipelines and Terminals Agreement (this Agreement ) is dated as of February 22, 2016, to be effective as of the Effective Time (as defined below) by and between HOLLYFRONTIER REFINING & MARKETING LLC ( HFRM ) and HOLLY ENERGY PARTNERS-OPERATING, L.P. ( HEP Operating ). Each of HFRM and HEP Operating are separately referred to herein as a Party and collectively referred to herein as the Parties .
RECITALS :
A. In connection with that certain Amended and Restated Refined Products Pipelines and Terminals Agreement dated as of February 1, 2009 (the Restated Pipelines and Terminals Agreement ) between HFRM (as successor in interest to Navajo Refining Company, L.L.C. and Holly Refining & Marketing Company Woods Cross) and HEP Operating (directly and as successor in interest to HEP Pipeline Assets, Limited Partnership, HEP Pipeline, L.L.C., HEP Refining Assets, L.P., HEP Refining, L.L.C., HEP Mountain Home, L.L.C. and HEP Woods Cross, L.L.C.), HEP Operating agreed to provide certain transportation and terminalling services to HFRM.
B. Effective as of September 30, 2013 the Parties entered into a certain First Amendment to the Restated Pipelines and Terminals Agreement (the First Amendment ) adjusting the list of Refined Products Terminals that are subject to the Restated Pipelines and Terminals Agreement.
C. The Parties now desire to further amend and restate the Restated Pipelines and Terminals Agreement and First Amendment in their entirety to add transportation services to be provided by HEP Operating with respect to an extension of an existing 12 pipeline and an existing 6 pipeline to the Magellan El Paso Terminal in El, Paso Texas, and to make certain other changes.
NOW, THEREFORE, the Parties to this Agreement hereby amend and restate the Restated Pipelines and Terminals Agreement and First Amendment in their entirety as follows:
Section 1. | Definitions . |
Capitalized terms used throughout this Agreement and not otherwise defined herein shall have the meanings set forth below.
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. Notwithstanding the foregoing, for purposes of this Agreement, HFRM, on the one hand, and HEP Operating, on the other hand, shall not be considered affiliates of each other.
Agreement has the meaning set forth in the preamble.
Applicable Law means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, without limitation, all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question.
3
bpd means barrels per day.
Contract Quarter means a three-month period that commences on July 1, October 1, January 1, or April 1, and ends on September 30, December 31, March 31 or June 30, respectively, except that the initial Contract Quarter commenced on July 13, 2004.
Contract Year means a year that commences on July 1 and ends on the last day of June, except that the initial Contract Year commenced on July 13, 2004.
Control (including with correlative meaning, the term controlled by ) means, as used with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
Damages has the meaning set forth in Section 11(a) .
Deficiency Notice has the meaning set forth in Section 9(a) .
Deficiency Payment has the meaning set forth in Section 9(a) .
DRA means drag reducing agents.
El Paso Hawkins Terminal means the refined products terminal located in El Paso, Texas being acquired by HFRM or its Affiliate from HEP Operating as of the Effective Time.
El Paso System Expansion has the meaning set forth in Exhibit E .
First Amendment has the meaning set forth in the recitals.
Force Majeure has the meaning set forth in the Omnibus Agreement.
Governmental Authority means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.
HEP Operating has the meaning set forth in the preamble.
HEP Operating Obligations has the meaning set forth in Section 14(a) .
HEP Operating Payment Obligations has the meaning set forth in Section 14(a) .
HEP Operating Performance Obligations has the meaning set forth in Section 14(a) .
HFRM has the meaning set forth in the preamble.
HFRM Payment Obligations has the meaning set forth in Section 13(a) .
4
HollyFrontier means HollyFrontier Corporation, a Delaware corporation.
HollyFrontier Navajo Refining means HollyFrontier Navajo Refining LLC, a Delaware limited liability company.
HollyFrontier Woods Cross Refining means HollyFrontier Woods Cross Refining LLC, a Delaware limited liability company.
Magellan El Paso Terminal means that certain Refined Products Terminal in El Paso, Texas operated by Magellan Pipeline Company, L.P., a Delaware limited partnership, or its Affiliates.
Minimum Revenue Commitment has the meaning set forth in Section 2(a)(i) .
Monthly Average Base Volume means an average daily volume of 14,500 barrels per day.
Navajo Refinery means the refining facilities owned by HollyFrontier Navajo Refining in Artesia and Lovington, New Mexico.
Omnibus Agreement means the Fourteenth Amended and Restated Omnibus Agreement, dated as of the date hereof, among HollyFrontier, the Partnership, and certain of their respective subsidiaries, as amended from time-to-time.
Partnership means Holly Energy Partners, L.P., a Delaware limited partnership.
Party and Parties have the meanings set forth in the preamble.
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.
PPI has the meaning set forth in Section 2(a)(ii) .
Prime Rate means the prime rate per annum announced by Union Bank, N.A., or if Union Bank, N.A. no longer announces a prime rate for any reason, the prime rate per annum announced by the largest U.S. bank measured by deposits from time to time as its base rate on corporate loans, automatically fluctuating upward or downward with each announcement of such prime rate.
Refined Products means gasolines, diesel fuel, jet fuel, kerosene, heating oil, distillates, transmix, liquefied petroleum gas, natural gas liquids and blend stocks.
Refined Product Pipelines means the pipelines described on Exhibit A attached hereto, as such Exhibit may be amended or revised from time-to-time by mutual agreement of HFRM and HEP Operating.
Refined Product Terminals means the terminals described on Exhibit B attached hereto, as such Exhibit may be amended or revised from time-to-time by mutual agreement of HFRM and HEP Operating.
Refinery means, each of the Navajo Refinery and the Woods Cross Refinery; collectively, the Refineries .
5
Refinery Owner means HollyFrontier Navajo Refining or HollyFrontier Woods Cross Refining.
Refund has the meaning set forth in Section 9(c) .
Restated Pipelines and Terminals Agreement has the meaning set forth in the recitals.
South System means the two pipeline systems operated by HEP Operating or its Affiliates extending from Artesia, New Mexico to El Paso, Texas, as such systems are described on Exhibit A . The two systems are designated as the El Paso 6 Pipeline and the El Paso 8/12 Pipeline. The El Paso 6 Pipeline consists of 156 miles of 6-inch pipeline originating at the Navajo Refinery and terminating at the El Paso Hawkins Terminal and, upon completion of the El Paso System Expansion, will include an additional approximately 200 feet of a lateral 6 Refined Products pipeline to the Magellan El Paso Terminal. The El Paso 6 Pipeline includes the Artesia, Gissler and No. 1 pump stations. The El Paso 8/12 Pipeline consists of 197 miles of 12-inch pipeline and 17 miles of 8-inch pipeline originating at the Artesia Refinery and terminating at the El Paso Hawkins Terminal and, upon completion of the El Paso System Expansion, will include an additional approximately 7 miles of a lateral 12 Refined Products pipeline to the Magellan El Paso Terminal. The El Paso 8/12 Pipeline system includes pump stations at Artesia, Orla and Hueco.
Term has the meaning set forth in Section 6 .
Woods Cross Refinery means the refinery owned by HollyFrontier Woods Cross Refining in Woods Cross, Utah.
Section 2. | Agreement to Use Services Relating to Pipelines and Terminals . |
The Parties intend to be strictly bound by the terms set forth in this Agreement, which set forth the Minimum Revenue Commitment on the part of HFRM and requires HEP Operating to provide certain transportation and terminalling services to HFRM. The principal objective of HEP Operating is for HFRM to meet or exceed the Minimum Revenue Commitment. The principal objective of HFRM is for HEP Operating to provide services to HFRM in a manner that enables HFRM to operate its assets in a manner at least as favorably as the historical course of dealing between the Parties.
(a) Minimum Revenue Commitment . During the Term and subject to the terms and conditions of this Agreement, HFRM agrees as follows:
(i) Subject to Section 3 , HFRM will transport on the Refined Product Pipelines and terminal in the Refined Product Terminals an amount of Refined Products in the aggregate that will produce revenue to HEP Operating in an amount at least equal to $11.706 million per Contract Quarter as of February 22, 2016, as such amount may be revised pursuant to Section 2(a)(ii) and Schedule I attached hereto (the Minimum Revenue Commitment ).
(ii) The Minimum Revenue Commitment shall be adjusted on the first day of each Contract Year by an amount equal to the upper change in the annual change rounded to four decimal places of the Producers Price Index-Commodities-Finished Goods, (PPI), et al. ( PPI ), produced by the U.S. Department of Labor, Bureaus of Labor Statistics. The series ID is WPUSOP3000 as of June 1, 2011 located at http://www.bls.gov/data/. The change factor shall be calculated as follows: annual PPI index (most current year) less annual PPI index (most current year minus 1) divided by annual PPI index (most current year minus 1). An example for year 2009 change is: [PPI (2008) PPI (2007)] / PPI (2007) or (177.1 166.6) / 166.6 or .063 or 6.3%. If the PPI index change is negative in a given year then the annual change will be deemed to be zero. If the above index is no longer published, the Parties shall
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negotiate in good faith to agree on a new index that gives comparable protection against inflation, and the same method of adjustment for increases in the new index shall be used to calculate increases in the Minimum Revenue Commitment. If the Parties are unable to agree, a new index will be determined in accordance with the dispute resolution provisions of the Omnibus Agreement, and the same method of adjustment for increases in the new index shall be used to calculate increases in the Minimum Revenue Commitment. To evidence the Parties agreement to each adjusted Minimum Revenue the Parties may, but shall not be required to, execute an amended, modified, revised or updated Schedule I and attach it to this Agreement. If so executed, such amended, modified, revised or updated Schedule I shall be sequentially numbered (e.g. Schedule I-1 , Schedule I-2 , etc.), dated and appended as an additional schedule to this Agreement and shall replace the prior version of Schedule I in its entirety, except as specified therein.
(iii) If HFRM is unable for a period of time to transport on the Refined Product Pipelines or terminal in the Refined Product Terminals the volumes of Refined Products required to meet the Minimum Revenue Commitment as a result of HEP Operatings operational difficulties, prorationing or difficulties with pipeline connections, then upon written notice by HFRM to HEP Operating (which notice shall be given reasonably promptly after the occurrence of such difficulties or prorationing), the Minimum Revenue Commitment will be reduced for such period of time by an amount equal to: (1) the volume of Refined Products that HFRM was unable to transport on the Refined Product Pipelines or terminal in the Refined Product Terminals as a result of HEP Operatings operational difficulties, prorationing or difficulties with pipeline connections, multiplied by (2) the applicable tariffs and terminal service fees. This Section 2(a)(iii) shall not apply in the event HEP Operating gives notice of a Force Majeure event in accordance with Section 3(b) , in which case HFRMs Minimum Revenue Commitment shall be suspended in accordance with and as provided in Section 3(b) .
(b) Tariffs and Terminal Service Fees . The service fees that HFRM shall pay to HEP Operating for terminalling the Refined Products in the Refined Product Terminals under this Section 2 are set forth on the fee schedule attached hereto as Exhibit C , as such exhibit may be amended from time-to-time in accordance with this Agreement. The tariff rates, rules and regulations applicable to interstate and intrastate service on the Refined Product Pipelines shall be as set forth in the tariffs referred to in Exhibit D , as such exhibit may be amended from time-to-time in accordance with this Agreement. The tariff rates shall be adjusted on the first day of each Contract Year by an amount equal to the percentage change, if any, rounded to four decimal places of the PPI calculated in accordance with the method set forth in Section 2(a)(ii) ; provided, however, that if the PPI index change is negative in a given year, then the tariff rates shall be decreased by an amount equal to such percentage change. If the PPI is no longer published, the Parties shall negotiate in good faith to agree on a new index that gives comparable protection against inflation or deflation, and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the tariff rates. If the Parties are unable to agree, a new index will be determined by in accordance with the dispute resolution provisions of the Omnibus Agreement, and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the tariff rates. Notwithstanding that the Minimum Revenue Commitment will be determined on a Contract Year basis, the applicable fees, tariff rates and other charges provided for in this Agreement will become effective as of the date of this Agreement, or in the case of the Refined Product Pipeline tariff rates, as soon thereafter as those rates become effective. To evidence the Parties agreement to each adjusted tariff rate, the Parties may, but shall not be obligated to, execute an amended, modified, revised or updated Exhibit D and attach it to this Agreement. If executed, such amended, modified, revised or updated Exhibit D shall be sequentially numbered (e.g. Exhibit D-1 , Exhibit D-2 , etc.), dated and appended as an additional exhibit to this Agreement and shall replace the prior version of Exhibit D in its entirety, except as specified therein.
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(c) Obligations of HEP Operating . During the Term and subject to the terms and conditions of this Agreement, including Section 12(b) , HEP Operating agrees to own or lease, operate and maintain the assets necessary to accept the deliveries from HFRM and to provide the services required under this Agreement. Notwithstanding the preceding sentence, subject to Section 12(b) of this Agreement and Article V of the Omnibus Agreement, HEP Operating is free to sell any of its assets, including assets that provide services under this Agreement, and is free to merge with another entity (whether or not HEP Operating is the surviving entity in such merger) and is free to sell all of its assets or all of its equity to another entity at any time. At the request of HFRM, and subject in each case to any applicable common carrier proration duties, HEP Operating agrees to use commercially reasonable efforts to transport by pipeline for HFRM each month during the Term (i) up to 49,500 bpd of gasoline and 26,500 bpd of diesel fuel on the South System and (ii) up to 40,000 bpd of Refined Products from Artesia to Moriarty or Artesia to Bloomfield on HEP Operatings Artesia to Moriarty and Artesia to Bloomfield Refined Product Pipeline. HEP Operating agrees to provide terminalling services for HFRMs volumes of Refined Products transported to the Refined Product Terminals. To the extent that HFRM is entitled to an exception under Section 3 to its obligations under Section 2(a) , the corresponding obligations of HEP Operating under this Section 2(c) will be proportionately reduced.
(d) Facility Expansions and Modifications . From time-to-time the Parties may agree to expand or modify certain facilities covered by this Agreement, including refined product pipelines, refined product terminals and other facilities. In connection with the expansion or modification of such facilities, the Parties may agree to certain reimbursements, increased tariff rates or other payments or may otherwise revise the terms of this Agreement to address such projects. Attached to this Agreement as Exhibit E is a list of current expansion or modification projects agreed to by the Parties hereto and the terms of such projects. Exhibit E may be amended, modified, revised or updated from time-to-time in accordance with the terms of this Section 2(d) to evidence the Parties agreement to new expansion or modification projects; the completion, termination or revision of previously agreed to expansion or modification projects; or the modification of the terms of this Agreement in connection with the addition, completion, termination or revision of such expansion or modification projects. To evidence the Parties agreement to each new expansion or modification project or the completion, termination or revision of previously agreed to expansion or modification project or the modification of the terms of this Agreement in connection with the addition, completion, termination or revision of such expansion or modification projects, the Parties may, but shall not be obligated to, execute an amended, modified, revised or updated Exhibit E and attach it to this Agreement. If executed, such amended, modified, revised or updated Exhibit E shall be sequentially numbered (e.g. Exhibit E-1 , Exhibit E-2 , etc.), dated and appended as an additional exhibit to this Agreement and shall replace the prior version of Exhibit E in its entirety, except as specified therein.
(e) Ancillary Services . HEP Operating will provide ancillary services as have been provided historically, such as truck rack blending, tank sampling and tank-to-tank transfers, to HFRM. Except as set forth on Schedule II attached hereto, as it may be amended from time-to-time in accordance with this Agreement, the fees for such ancillary services are included in the fees established under this Agreement for services provided under Section 2(b) . All fuel additives, dyes, de-icers and other additives requested to be added to HFRMs Refined Products will be provided by HFRM at no cost to HEP Operating. If any ancillary services other than those set forth in this Section 2(e) are requested by HFRM that are different in kind, scope or frequency from the ancillary services that have been historically provided, then the Parties shall negotiate in good faith to determine the appropriate rates to be charged for such services. HFRM shall be responsible for maintaining the integrity of its operations and the quality of its products so as to not cause additional operating costs related to ancillary services to be incurred by HEP Operating.
(f) Pipeline Direction . Without HFRMs prior written consent, which shall not be unreasonably withheld or delayed, HEP Operating will not reverse the direction of any Refined Product
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Pipeline or, except as provided in Section 2(d) or Exhibit E , connect any other pipeline to the Refined Product Pipelines or Refined Product Terminals; provided, however, that HEP Operating may take any necessary emergency action to prevent or remedy a release of Refined Products from a Refined Product Pipeline or Refined Product Terminal without obtaining the consent required by this Section 2(f) .
(g) Product Gains and Losses .
(i) Prior to October 1, 2007, with respect to the Refined Product Terminals, (1) HEP Operating will be responsible for all product losses, determined on a quarterly basis and on a terminal by terminal basis, that are greater than 0.25% of the product terminalled in accordance with this Section 2 and (2) all product losses with respect to the Refined Product Terminals will be offset by product gains with respect to the Refined Product Terminals, if any, as determined on a quarterly basis and on a terminal by terminal basis. Product gains at the Refined Product Terminals, after any offsetting losses, will be the property of HEP Operating through September 30, 2007; and
(ii) Beginning with the 12 month period starting on October 1, 2007, with respect to the Refined Product Terminals, (1) HEP Operating will be responsible for all product losses, determined on an annual basis and on a terminal by terminal basis, for the 12 month period beginning on October 1 of each year, that are greater than 0.25% of the product terminalled in accordance with this Section 2 and (2) on a terminal by terminal basis, the amount of any product losses for any such 12 month period ending on the subsequent September 30 for which HEP Operating would otherwise be responsible shall be offset by the amount of any product gains for the same 12 month period and, beginning with the 12 month period starting on October 1, 2008, shall also be offset by any previously unused product gains for, and only for, the immediately preceding 12 month period. An amount of product gain shall be applied no more than once to reduce product losses for which HEP Operating would otherwise be responsible. Beginning on October 1, 2007, any product gains at the Refined Product Terminals, after any offsetting losses applied in accordance with this subsection, will be the property of HFRM.
(h) Taxes . HFRM will pay all taxes, import duties, license fees and other charges by any Governmental Authority levied on the Refined Products delivered by HFRM for transportation or storage by HEP Operating in the Refined Product Pipelines and Refined Product Terminals, including, but not limited to, any New Mexico gross receipts taxes, if applicable. HFRM will reimburse HEP Operating for the New Mexico gross receipts tax, if applicable, but not income tax, levied on or with respect to the transportation services provided by HEP Operating to HFRM under this Agreement. Should any Party be required to pay or collect any taxes, duties, charges and or assessments pursuant to any Applicable Law or authority now in effect or hereafter to become effective which are payable by the any other Party pursuant to this Section 2(h) the proper Party shall promptly reimburse the other Party therefor.
(i) Timing of Payments . HFRM will make payments to HEP Operating by electronic payment with immediately available funds on a monthly basis during the Term with respect to services rendered or reimbursable costs and expenses incurred by HEP Operating under this Agreement in the prior month. Payments not received by HEP Operating on or prior to the applicable payment date will accrue interest at the Prime Rate from the applicable payment date until paid.
(j) Notification of Utilization . When requested by HEP Operating, HFRM will provide to HEP Operating written notification of HFRMs reasonable good faith estimate of its anticipated future utilization of the assets of HEP Operating.
(k) Scheduling of Product Movements . HEP Operating will use its reasonable commercial efforts to schedule Refined Product movements and accept deliveries of Refined Products hereunder in a manner that is consistent with the historical dealings between the Parties, as such dealings may change from time to time.
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(l) Monthly Surcharge . If new Applicable Laws are enacted that require HEP Operating to make substantial and unanticipated capital expenditures with respect to the Refined Product Terminals, HEP Operating may impose a monthly surcharge to cover HFRMs pro rata share of HEP Operatings cost of complying with these Applicable Laws. The Parties shall use their reasonable commercial efforts to comply with these Applicable Laws and shall negotiate in good faith to mitigate the impact of these Applicable Laws and to determine the level of the monthly surcharge. If the Parties are unable to agree on the level of the monthly surcharge, such surcharge will be determined in accordance with the dispute resolution provisions of the Omnibus Agreement. Exhibit D or any other applicable exhibit or schedule to this Agreement will be updated, amended or revised, as applicable, in accordance with this Agreement to reflect any monthly surcharge agreed to in accordance with this Section 2(l) .
(m) Increases in Pipeline Tariff Rates . If new Applicable Laws are enacted that require HEP Operating to make substantial and unanticipated capital expenditures with respect to the Refined Product Pipelines, HEP Operating may file new tariff rates in order to recover HEP Operatings cost of complying with these Applicable Laws (including a reasonable return). The Parties shall use their reasonable commercial efforts to comply with these Applicable Laws, and shall negotiate in good faith to mitigate the impact of these Applicable Laws and to determine the amount of the new tariff rates. If the Parties are unable to agree on the amount of the new tariff rates that HEP Operating will file, such tariff rates will be determined in accordance with the dispute resolution provisions of the Omnibus Agreement. Exhibit D or any other applicable exhibit or schedule to this Agreement will be updated, amended or revised, as applicable, in accordance with this Agreement to reflect any changes in tariff rates agreed to in accordance with this Section 2(m) .
(n) Terminal Access Agreement . HFRM agrees to use its commercially reasonable efforts to enter into a terminal access agreement with any third party that uses the Refined Product Terminal located in Tucson, Arizona, or any other terminal owned by HEP Operating or its Affiliates where HFRM is the sole customer.
Section 3. | Exceptions to HFRMs Obligations . |
(a) Shut Down or Reconfiguration of Refineries . HFRM must deliver to HEP Operating at least twelve months advance written notice of any planned shut down or reconfiguration (excluding planned maintenance turnarounds) of any Refinery or any portion of a Refinery that would reduce such Refinerys output. HFRM will use its commercially reasonable efforts to mitigate any reduction in the Minimum Revenue Commitment that would result from such a shut down or reconfiguration. If a Refinery Owner shuts down or reconfigures any Refinery or any portion of a Refinery (excluding planned maintenance turnarounds) and HFRM reasonably believes in good faith that such shut down or reconfiguration will jeopardize its ability to satisfy the Minimum Revenue Commitment, then HFRM will utilize the Refined Product Pipelines for 100% of the available production from the Refineries to the extent necessary and available to satisfy the Minimum Revenue Commitment. In the event that such production is insufficient to satisfy the Minimum Revenue Commitment, then within 90 days of the delivery of the written notice of the planned shut down or reconfiguration, HFRM shall (i) propose a new Minimum Revenue Commitment, such that the ratio of the new Minimum Revenue Commitment under this Agreement over the anticipated production level following the shut down or reconfiguration will be approximately equal to the ratio of the original Minimum Revenue Commitment under this Agreement over the original production level and (ii) propose the date on which the new Minimum Revenue Commitment shall take effect. Unless objected to by HEP Operating within 60 days of receipt by HEP Operating of such proposal, such new Minimum Revenue Commitment shall become effective as of the
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date proposed by HFRM. To the extent that HEP Operating does not agree with HFRMs proposal, any changes in HFRMs obligations under this Agreement, or the date on which such changes will take effect, will be determined in accordance with the dispute resolution provisions of the Omnibus Agreement. Schedule I or any other applicable exhibit or schedule to this Agreement will be updated, amended or revised, as applicable, in accordance with this Agreement to reflect any change in HFRMs Minimum Revenue Commitment agreed to in accordance with this Section 3(a) .
(b) Force Majeure . The rights and obligations of the Parties upon the occurrence of an event of Force Majeure will be determined in the manner set forth in the Omnibus Agreement; provided that (a) any suspension of the obligations of the Parties under this Agreement as a result of an event of Force Majeure shall extend the Term (to the extent so affected) for a period equivalent to the duration of the inability set forth in the Force Majeure Notice, (b) HFRM will be required to pay any amounts accrued and due under this Agreement at the time of the Force Majeure event, and (c) if a Force Majeure event prevents either Party from performing substantially all of its respective obligations under this Agreement relating to a group of assets for a period of more than one (1) year, this Agreement may be terminated as to the affected Refined Products Pipeline(s) or Refined Products Terminal(s) (but not as to unaffected assets) by either Party providing written notice thereof to the other Party. Nothing in this Section 3(b) shall alter the liability of HEP Operating as set forth in the rules and regulations tariffs for the Refined Product Pipelines attached hereto as Exhibit D and Exhibit E .
Section 4. | Agreement to Remain Shipper . |
With respect to any Refined Products that are produced at a Refinery and transported in any Refined Product Pipeline or handled at any Refined Product Terminal, HFRM agrees that it will continue its historical commercial practice of owning such Refined Products from such point as such Refined Products leave the Refinery until at least such point as they will not be further transported in a Refined Product Pipeline or handled at a Refined Product Terminal and to continue acting in the capacity of the shipper of any such Refined Products for its own account at all times that such Refined Products are in a Refined Product Pipeline or being handled at the Refined Product Terminals.
Section 5. | Agreement Not to Challenge Tariffs or Terminal Charges . |
HFRM agrees to any tariff rate changes for the Refined Product Pipelines determined in accordance with this Agreement. HFRM agrees (a) not to challenge, nor to cause any of its Affiliates to challenge, nor to encourage or recommend to any other Person that it challenge, or voluntarily assist in any way any other Person in challenging, in any forum, interstate or intrastate tariffs (including joint tariffs) of HEP Operating that HEP Operating has filed or may file containing rates, rules or regulations that are in effect at any time during the Term and regulate the transportation of Refined Products, (b) not to protest or file a complaint, nor cause any of its Affiliates to protest or file a complaint, nor encourage or recommend to any other Person that it protest or file a complaint, or voluntarily assist in any way any other Person in protesting or filing a complaint, with respect to regulatory filings that HEP Operating has made or may make at any time during the Term to change interstate or intrastate tariffs (including joint tariffs) for transportation of Refined Products and (c) not to seek, nor cause any of its Affiliates to seek, nor encourage or recommend to any other Person that it seek, or voluntarily assist in any way any other Person in seeking, regulatory review of, or regulatory jurisdiction over, the contractual rates charged at any time during the term of this Agreement by HEP Operating for terminalling services or to challenge, in any forum, such rates or changes to such rates, in each case so long as such tariffs, regulatory filings or rates changed do not conflict with the terms of this Agreement.
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Section 6. | Effectiveness and Term . |
This Agreement shall be effective as of July 13, 2004 and shall terminate at 12:01 a.m. Dallas, Texas, time on July 1, 2019, unless extended by written mutual agreement of the Parties hereto or as set forth in Section 7 (the Term ); provided , however , that Section 5 and Section 11 shall survive the termination of this Agreement. The Party(ies) desiring to extend this Agreement pursuant to this Section 6 shall provide prior written notice to the other Parties of its desire to so extend this Agreement; such written notice shall be provided not more than twenty-four (24) months and not less than the later of twelve (12) months prior to the date of termination or ten (10) days after receipt of a written request from the other Party (which request may be delivered no earlier than twelve (12) months prior to the date of termination) to provide any such notice or lose such right.
Section 7. | Right to Enter into a New Agreement . |
(a) In the event that HFRM provides prior written notice to HEP Operating of the desire of HFRM to extend this Agreement by written mutual agreement of the Parties, the Parties shall negotiate in good faith to extend this Agreement by written mutual agreement, but, if such negotiations fail to produce a written mutual agreement for extension by a date six months prior to the termination date, then HEP Operating shall have the right to negotiate to enter into one or more pipeline and terminal agreements with one or more third parties to begin after the date of termination, provided that until the end of one year following termination without renewal of this Agreement, HFRM will have the right to enter into a new pipelines and terminals agreement with HEP Operating on commercial terms that substantially match the terms which HEP Operating proposes to enter into an agreement with a third party for similar services with respect to all or a material portion of the Refined Product Pipelines or Refined Product Terminals. In such circumstances, HEP Operating shall give HFRM forty-five (45) days prior written notice of any proposed new pipelines and terminals agreement with a third party, and such notice shall inform HFRM of the fee schedules, tariffs, duration and any other terms of the proposed third party agreement and HFRM shall have forty-five (45) days following receipt of such notice to agree to the terms specified in the notice or HFRM shall lose the rights specified by this Section 7(a) with respect to the assets that are the subject of such notice.
(b) In the event that HFRM fails to provide prior written notice to HEP Operating of the desire of HFRM to extend this Agreement by written mutual agreement of the Parties pursuant to Section 6 , HEP Operating shall have the right, during the period from the date of HFRMs failure to provide written notice pursuant to Section 6 to the date of termination of this Agreement, to negotiate to enter into a new pipelines and terminals agreement with a third party, provided however that at any time during the twelve (12) months prior to the expiration of the Term, HFRM will have the right to enter into a new pipelines and terminals agreement with HEP Operating on commercial terms that substantially match the terms upon which HEP Operating proposes to enter into an agreement with a third party for similar services with respect to all or a material portion of the Refined Product Pipelines or Refined Product Terminals. In such circumstances, HEP Operating shall give HFRM forty-five (45) days prior written notice of any proposed new pipelines agreement with a third party, and such notice shall inform HFRM of the fee schedules, tariffs, duration and any other terms of the proposed third party agreement and HFRM shall have forty-five (45) days following receipt of such notice to agree to the terms specified in the notice or HFRM shall lose the rights specified by this Section 7(b) with respect to the assets that are the subject of such notice.
Section 8. | Notices . |
Any notice or other communication given under this Agreement shall be in writing and shall be provided in the manner, and deemed delivered at the time, set forth in the Omnibus Agreement.
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Section 9. | Deficiency Payments . |
(a) As soon as practicable following the end of each Contract Quarter under this Agreement, HEP Operating shall deliver to HFRM a written notice (the Deficiency Notice ) detailing any failure of HFRM to meet any of its obligations under Section 2(a) ; provided that HFRMs obligations pursuant to the Minimum Revenue Commitment shall be assessed on a quarterly basis for the purposes of this Section 9 . The Deficiency Notice shall (i) specify in reasonable detail the nature of any deficiency and (ii) specify the approximate dollar amount that HEP Operating believes would have been paid by HFRM to HEP Operating if HFRM had complied with its obligations pursuant to Section 2(a) (the Deficiency Payment ). HFRM shall pay the Deficiency Payment to HEP Operating upon the later of: (A) ten (10) days after its receipt of the Deficiency Notice and (B) thirty (30) days following the end of the related Contract Quarter.
(b) If HFRM disagrees with the Deficiency Notice, then, following the payment of the Deficiency Payment to HEP Operating, HFRM shall send written notice thereof to HEP Operating and a senior officer of HollyFrontier (on behalf of HFRM) and a senior officer of the Partnership (on behalf of HEP Operating) shall meet or communicate by telephone at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary and shall negotiate in good faith to attempt to resolve any differences that they may have with respect to matters specified in the Deficiency Notice. During the 30 day period following the payment of the Deficiency Payment, HFRM shall have access to the working papers of HEP Operating relating to the Deficiency Notice. If such differences are not resolved within thirty (30) days following the payment of the Deficiency Payment, the Parties shall, within forty-five (45) days following the payment of the Deficiency Payment, submit any and all matters which remain in dispute and which were properly included in the Deficiency Notice to dispute resolution in accordance with the Omnibus Agreement.
(c) If it is finally determined pursuant to this Section 9 that HFRM is not required to make any or all of the Deficiency Payment (the Refund ), HEP Operating shall promptly pay to HFRM the Refund, together with interest thereon at the Prime Rate, in immediately available funds.
(d) Deficiency Payments will be credited against any payments owed by HFRM in the following four Contract Quarters in excess of the Minimum Revenue Commitments established by this Agreement for such Calendar Quarters; provided , however , that HFRM will not receive credit for any Deficiency Payment in any of the following four Contract Quarters until they have met the Minimum Revenue Commitment in the succeeding Contract Quarter.
Section 10. | Right of First Refusal . |
The Parties acknowledge the right of first refusal of HFRM with respect to the Refined Product Pipelines and Refined Product Terminals provided in the Omnibus Agreement.
Section 11. | Indemnity; Limitation of Damages . |
(a) The Parties acknowledge and agree that provisions relating to indemnity and limitation of liability are set forth in the Omnibus Agreement. Notwithstanding anything in this Agreement or the Omnibus Agreement to the contrary and solely for the purpose of determining which of HFRM or HEP Operating shall be liable in a particular circumstance, neither HFRM or HEP Operating shall be liable to the other Party for any loss, damage, injury, judgment, claim, cost, expense or other liability (collectively, Damages ) suffered or incurred by such Party except to the extent set forth in the Omnibus Agreement and to the extent that HFRM or HEP Operating causes such Damages or owns or operates the assets or other property in question responsible for causing such Damages.
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(b) The provisions of this Section 11 shall survive the termination of this Agreement.
Section 12. | Miscellaneous . |
(a) Amendments and Waivers . No amendment or modification of this Agreement shall be valid unless it is in writing and signed by the Parties. No waiver of any provision of this Agreement shall be valid unless it is in writing and signed by the Party against whom the waiver is sought to be enforced. Any of the exhibits or schedules to this Agreement may be amended, modified, revised or updated by the Parties if each of the Parties executes an amended, modified, revised or updated exhibit or schedule, as applicable, and attaches it to this Agreement. Such amended, modified, revised or updated exhibits or schedules shall be sequentially numbered (e.g. Exhibit A-1 , Exhibit A-2 , etc.), dated and appended as an additional exhibit or schedule to this Agreement and shall replace the prior exhibit or schedule, as applicable, in its entirety, except as specified therein. No failure or delay in exercising any right hereunder, and no course of conduct, shall operate as a waiver of any provision of this Agreement. No single or partial exercise of a right hereunder shall preclude further or complete exercise of that right or any other right hereunder.
(b) Successors and Assigns . This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and permitted assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned without the prior written consent of HFRM (in the case of any assignment by HEP Operating) or HEP Operating (in the case of any assignment by HFRM), in each case, such consent is not to be unreasonably withheld or delayed; provided , however , that (i) HEP Operating may make such an assignment (including a partial pro rata assignment) to an Affiliate of HEP Operating without HFRMs consent, (ii) HFRM may make such an assignment (including a partial pro rata assignment) to an Affiliate of HFRM without HEP Operatings consent, (iii) HFRM may, without HEP Operatings prior written consent, make such an assignment to any Person to which HFRM has sold any of its assets which assets rely on the services provided by HEP Operating under this Agreement if such Person (1) is reasonably capable of performing HFRMs obligations (or its pro rata portion of such obligations) under this Agreement assigned to such Person, which determination shall be made by HFRM in its reasonable judgment and (2) has agreed in writing to assume the obligations of HFRM assigned to such Person and (iv) HEP Operating may, without HFRMs prior written consent, make such an assignment to any Person to which HEP Operating has sold any of its transportation, storage or terminalling assets which assets provide services to HFRM under this Agreement if such Person (1) is reasonably capable of performing HEP Operatings obligations (or its pro rata portion of such obligations) under this Agreement assigned to such Person, which determination shall be made by HEP Operating in its reasonable judgment and (2) has agreed in writing to assume the obligations of HEP Operating assigned to such Person. Any attempt to make an assignment otherwise than as permitted by the foregoing shall be null and void. Each Party agrees to require its respective successors, if any, to expressly assume, in a form of agreement reasonably acceptable to the other Party, its obligations under this Agreement. The provisions of this Agreement are enforceable solely by the Parties.
(c) 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.
(d) Choice of Law . This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.
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(e) 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.
(f) Headings . Headings of the Sections of this Agreement are for convenience of the Parties only and shall be given no substantive or interpretative effect whatsoever. All references in this Agreement to Sections are to Sections of this Agreement unless otherwise stated.
(g) No Novation . This Agreement shall be considered an amendment and restatement of the Restated Pipelines and Terminals Agreement, and the Restated Pipelines and Terminals Agreement is hereby ratified, approved and confirmed in every respect. This Agreement is not intended to constitute a novation of the Restated Pipelines and Terminals Agreement and all of the obligations owing by the Parties under the Restated Pipelines and Terminals Agreement shall continue (and from and after the date of this Agreement, as amended hereby).
Section 13. | Guarantee by HollyFrontier . |
(a) Payment Guaranty . HollyFrontier unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to HEP Operating the punctual and complete payment in full when due of all amounts due from HFRM under this Agreement (collectively, the HFRM Payment Obligations ). HollyFrontier agrees that HEP Operating shall be entitled to enforce directly against HollyFrontier any of the HFRM Payment Obligations.
(b) Guaranty Absolute . HollyFrontier hereby guarantees that the HFRM Payment Obligations will be paid strictly in accordance with the terms of this Agreement. The obligations of HollyFrontier under this Agreement constitute a present and continuing guaranty of payment, and not of collection or collectability. The liability of HollyFrontier under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:
(i) any assignment or other transfer of this Agreement or any of the rights thereunder of HEP Operating;
(ii) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to this Agreement;
(iii) any acceptance by HEP Operating of partial payment or performance from HFRM;
(iv) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to HFRM or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding;
(v) any absence of any notice to, or knowledge of, Holly, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (i) through (iv); or
(vi) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.
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The obligations of HollyFrontier hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the HFRM Payment Obligations or otherwise.
(c) Waiver . HollyFrontier hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the HFRM Payment Obligations and any requirement for HEP Operating to protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against HFRM, any other entity or any collateral.
(d) Subrogation Waiver . HollyFrontier agrees that for so long as there is a current or ongoing default or breach of this Agreement by HFRM, HollyFrontier shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from HFRM for any payments made by HollyFrontier under this Section 13 , and HollyFrontier hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter acquire against HFRM during any period of default or breach of this Agreement by any of HFRM until such time as there is no current or ongoing default or breach of this Agreement by HFRM.
(e) Reinstatement . The obligations of HollyFrontier under this Section 13 shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the HFRM Payment Obligations is rescinded or must otherwise be returned to HFRM or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of HFRM or such other entity, or for any other reason, all as though such payment had not been made.
(f) Continuing Guaranty . This Section 13 is a continuing guaranty and shall (i) remain in full force and effect until the first to occur of the indefeasible payment in full of all of the HFRM Payment Obligations, (ii) be binding upon HollyFrontier, its successors and assigns and (iii) inure to the benefit of and be enforceable by HEP Operating and its respective successors, transferees and assigns.
(g) No Duty to Pursue Others . It shall not be necessary for HEP Operating (and HollyFrontier hereby waives any rights which HollyFrontier may have to require HEP Operating), in order to enforce such payment by HollyFrontier, first to (i) institute suit or exhaust its remedies against HFRM or others liable on the HFRM Payment Obligations or any other person, (ii) enforce HEP Operatings rights against any other guarantors of the HFRM Payment Obligations, (iii) join HFRM or any others liable on the HFRM Payment Obligations in any action seeking to enforce this Section 13 , (iv) exhaust any remedies available to HEP Operating against any security which shall ever have been given to secure the HFRM Payment Obligations, or (v) resort to any other means of obtaining payment of the HFRM Payment Obligations.
Section 14. | Guarantee by the Partnership . |
(a) Payment and Performance Guaranty . The Partnership unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to HFRM the punctual and complete payment in full when due of all amounts due from HEP Operating under this Agreement (collectively, the HEP Operating Payment Obligations ) and the punctual and complete performance of all other obligations of HEP Operating under this Agreement (collectively, the HEP Operating Performance Obligations , together with the HEP Operating Payment Obligations, the HEP Operating Obligations ). The Partnership agrees that HFRM shall be entitled to enforce directly against the Partnership any of the HEP Operating Obligations.
16
(b) Guaranty Absolute . The Partnership hereby guarantees that the HEP Operating Payment Obligations will be paid, and the HEP Performance Obligations will be performed, strictly in accordance with the terms of this Agreement. The obligations of the Partnership under this Agreement constitute a present and continuing guaranty of payment and performance, and not of collection or collectability. The liability of the Partnership under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:
(i) any assignment or other transfer of this Agreement or any of the rights thereunder of HFRM;
(ii) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to this Agreement;
(iii) any acceptance by HFRM of partial payment or performance from HEP Operating;
(iv) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to HEP Operating or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding;
(v) any absence of any notice to, or knowledge of, the Partnership, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (i) through (iv); or
(vi) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.
The obligations of the Partnership hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the HEP Operating Obligations or otherwise.
(c) Waiver . The Partnership hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the HEP Operating Payment Obligations and any requirement for HFRM to protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against HEP Operating, any other entity or any collateral.
(d) Subrogation Waiver . The Partnership agrees that for so long as there is a current or ongoing default or breach of this Agreement by HEP Operating, the Partnership shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from HEP Operating for any payments made by the Partnership under this Section 14 , and the Partnership hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter acquire against HEP Operating during any period of default or breach of this Agreement by HEP Operating until such time as there is no current or ongoing default or breach of this Agreement by HEP Operating.
17
(e) Reinstatement . The obligations of the Partnership under this Section 14 shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the HEP Operating Payment Obligations is rescinded or must otherwise be returned to HEP Operating or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of HEP Operating or such other entity, or for any other reason, all as though such payment had not been made.
(f) Continuing Guaranty . This Section 14 is a continuing guaranty and shall (i) remain in full force and effect until the first to occur of the indefeasible payment and/or performance in full of all of the HEP Operating Payment Obligations, (ii) be binding upon the Partnership and each of its respective successors and assigns and (iii) inure to the benefit of and be enforceable by HFRM and its respective successors, transferees and assigns.
(g) No Duty to Pursue Others . It shall not be necessary for HFRM (and the Partnership hereby waives any rights which the Partnership may have to require HFRM), in order to enforce such payment by the Partnership, first to (i) institute suit or exhaust its remedies against HEP Operating or others liable on the HEP Operating Obligations or any other person, (ii) enforce HFRMs rights against any other guarantors of the HEP Operating Obligations, (iii) join HEP Operating or any others liable on the HEP Operating Obligations in any action seeking to enforce this Section 14 , (iv) exhaust any remedies available to HFRM against any security which shall ever have been given to secure the HEP Operating Obligations, or (v) resort to any other means of obtaining payment of the HEP Operating Obligations.
[Remainder of Page Intentionally Left Blank]
18
IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of the date first written above to be effective as of the Effective Time.
HEP OPERATING: | ||||
Holly Energy Partners-Operating, L.P. | ||||
By: |
/s/ Michael C. Jennings |
|||
Name: | Michael C. Jennings | |||
Title: | Chief Executive Officer | |||
HFRM: | ||||
HollyFrontier Refining & Marketing LLC | ||||
By: |
/s/ George J. Damiris |
|||
Name: | George J. Damiris | |||
Title: | Chief Executive Officer and President |
[Signature Page 1 of 2 to the Second Amended and Restated Refined Products Pipelines and Refined Products Terminals Agreement]
ACKNOWLEDGED AND AGREED FOR | ||
PURPOSES OF SECTION 9(b) AND SECTION 13 : | ||
HOLLYFRONTIER CORPORATION | ||
By: |
/s/ George J. Damiris |
|
Name: | George J. Damiris | |
Title: | Chief Executive Officer and President | |
ACKNOWLEDGED AND AGREED FOR | ||
PURPOSES of SECTION 9(b) AND SECTION 14 : | ||
HOLLY ENERGY PARTNERS, L.P. | ||
By: | HEP Logistics Holdings, L.P., | |
its General Partner | ||
By: | Holly Logistic Services, L.L.C., | |
its General Partner | ||
By: |
/s/ Michael C. Jennings |
|
Name: | Michael C. Jennings | |
Title: | Chief Executive Officer |
[Signature Page 2 of 2 to the Second Amended and Restated Refined Products Pipelines and Refined Products Terminals Agreement]
SCHEDULE I
MINIMUM REVENUE COMMITMENT
Contract Year |
Minimum Revenue Commitment per
Contract Quarter |
|||
July 13, 2004 |
$ | 8.85 million | ||
July 1, 2005 |
$ | 9.171 million | ||
July 1, 2006 |
$ | 9.616 million | ||
July 1, 2007 |
$ | 9.906 million | ||
July 1, 2008 |
$ | 10.289 million | ||
July 1, 2009 |
$ | 10.937 million | ||
July 1, 2010 |
$ | 10.937 million | ||
July 1, 2011 |
$ | 11.400 million | ||
July 1, 2012 |
$ | 12.079 million | ||
July 1, 2013 |
$ | 12.313 million | ||
July 1, 2014 |
$ | 12.466 million | ||
July 1, 2015 |
$ | 12.706 million | ||
February 22, 2016 (1) |
$ | 11.706 million |
(1) | To be adjusted in accordance with Section 2(a)(ii) , commencing July 1, 2016. |
SCHEDULE II
ANCILLARY SERVICE FEES
As of February 22, 2016
Effective January 1, 2006, the Parties agree that HFRM will either reimburse HEP Operating for the actual cost of DRA added to HFRMs Refined Products or provide such DRA at no cost to HEP Operating; provided , however , that effective February 1, 2009, HEP Operating agrees to reimburse HFRM for the cost of DRA furnished by HFRM for use on the South System on a 50/50 basis until each of the Parties expends $250,000 annually, with 100% of the cost over $500,000 annually to be furnished by HFRM. HEP Operating agrees to use its commercially reasonable efforts to minimize the use of DRA and maximize the use of HEP Operatings existing horsepower; provided , however , that in the event HEP Operating determine that it is not economically advantageous for HEP Operating to operate the South System in a manner that maximizes the use of HEP Operatings existing horsepower and minimizes the use of DRA, then HEP Operating may use DRA in lieu of horsepower, provided that the cost of such DRA shall be borne solely by HEP Operating and shall not count towards HEP Operatings share of the cost of DRA stated above.
EXHIBIT A
REFINED PRODUCT PIPELINES
As of February 22, 2016
Origin and Destination |
Diameter
(inches) |
Approximate
Length (miles) |
Capacity
(bpd) |
|||
Artesia, NM to El Paso, TX (Hawkins Terminal) |
6 | 156 | 24,000 | |||
Artesia, NM to Orla, TX to El Paso, TX (Hawkins Terminal) |
12/8/12/8
(4)
12/8 (5) |
214 | 106,000 (1) | |||
Artesia, NM to El Paso, TX (Magellan El Paso Terminal) |
6 | 140 | 24,000 | |||
Artesia, NM to El Paso TX (Magellan El Paso Terminal) |
12 | 210 | 110,000 | |||
Artesia, NM to Moriarty, NM (2) |
12/8 | 215 | 45,000 (3) | |||
Moriarty, NM to Bloomfield, NM (2) |
8 | 191 | (3) |
(1) | Includes 17,500 bpd of capacity on the Orla to El Paso segment of this pipeline that is leased to Alon under capacity lease agreements. |
(2) | The White Lakes Junction to Moriarty segment of the Artesia to Moriarty pipeline and the Moriarty to Bloomfield pipeline is leased from Mid-America Pipeline Company, LLC under a long-term lease agreement. |
(3) | Capacity for this pipeline is reflected in the information for the Artesia to Moriarty pipeline. |
(4) | Prior to completion of the El Paso System Expansion. |
(5) | After completion of the El Paso System Expansion. |
EXHIBIT B
REFINED PRODUCT TERMINALS
As of February 1, 2016
Terminal Location |
Storage
Capacity (barrels) |
Number
of Tanks |
Supply
|
Mode of Delivery |
||||||
Moriarty, NM |
189,000 | 9 | Pipeline | Truck | ||||||
Bloomfield, NM |
193,000 | 7 | Pipeline | Truck | ||||||
Tucson, AZ (1) |
176,000 | 9 | Pipeline | Truck | ||||||
Mountain Home, ID (2) |
120,000 | 3 | Pipeline | Pipeline | ||||||
Spokane, WA |
333,000 | 32 | Pipeline/Rail | Truck | ||||||
Artesia facility truck rack |
N/A | N/A | Refinery | Truck | ||||||
Woods Cross facilities |
N/A | N/A | Refinery | Truck/Pipeline | ||||||
|
|
|||||||||
Total |
2,206,000 | |||||||||
|
|
(1) | The underlying ground at the Tucson terminal is leased. |
(2) | Handles only jet fuel. |
EXHIBIT C
FEE SCHEDULE
As of January 1, 2016
1. | HFRM will pay a terminal service fee of $0.375 per barrel for truck rack deliveries and $0.1250 per barrel for pipeline pump-over deliveries at each of the Refined Product Terminals, except that HFRM will pay $0.1381 per barrel for pipeline pump-over deliveries at the El Paso Hawkins Terminal. |
2. | HFRM will receive a discount of $0.1151 per barrel for truck rack deliveries at the Moriarty, New Mexico terminal that exceed the Monthly Average Base Volume. |
3. | HFRM will pay a service fee of $0.3124 per barrel for truck rack deliveries for facilities located within the Refineries. |
4. | HFRM will pay a handling fee of $0.6559 per barrel for the movement of isobutane, propane and normal butane within any of the Refined Product Terminals. |
5. | HFRM will pay a fee for lubricity additive injections to diesel fuel products, gasoline additive injections, red dye additive injections to diesel fuel products and ethanol injections made at the Refined Product Terminals. The fees for such injections, as well as the party responsible for supplying such additives, are set forth in the chart attached hereto as Exhibit C-1 . The Parties agree and understand that the fees set forth on Exhibit C-1 are subject to change based on changes in cost of such additives. |
6. | HFRM will supply, at its sole cost and expense, all clay and/or clay filters used in the clay filtration systems at the El Paso Hawkins Terminal. |
7. | Each of the service fees listed on this Exhibit C , except for the Tucson terminal, will adjust at the beginning of each Contract Year by a percentage equal to the percentage change in the service fee in effect at the end of each of the two preceding Contract Years in the index comprised of comparable fees posted by Kinder Morgan at its Phoenix, Tucson and Las Vegas terminals; provided , however , that no adjustment shall be made which would result in a decrease in any service fee. |
8. | For the Tucson terminal, beginning on April 4, 2008 and continuing until March 31, 2018, HFRM shall pay an annual fee of $37,149 for the exclusive use of the Tucson terminal facility and a $0.4025 per barrel terminal fee. Beginning July 1, 2009, both fees shall be increased on the first day of each Contract Year by the PPI. HFRM shall have the right to renew the exclusive use of the Tucson terminal for ten (10) years by providing written notice to HEP Operating of its intent to renew by no later than September 30, 2017, and the rates for the extended term shall be similarly increased on the first day of each Contract Year as specified above. |
EXHIBIT C-1
SCHEDULE OF ADDITIVE FEES
Terminal Name |
Red Dye
per bbl |
Gasoline
per bbl |
Lubricity
per bbl |
Ethanol
|
HOC
|
HOC
|
HOC
|
|||||||||
El Paso Hawkins Terminal |
NRC-shipper | No | No | $0.1691 | No | Yes | Yes | No | ||||||||
Artesia Rack |
NRC-shipper | $0.2416 | No | No | No | No | Yes | Yes | ||||||||
Tucson Terminal |
NRC-shipper | $0.0337 | $0.0474 | $0.0585 | $0.0474 | No | Yes | No | ||||||||
Moriarty Terminal |
NRC-shipper | No | No | $0.0581 | No | Yes | Yes | Yes | ||||||||
Bloomfield Terminal |
NRC-shipper | No | No | Inactive | No | Yes | Yes | Yes | ||||||||
Spokane Terminal |
HRM-shipper | $0.0301 | $0.0409 | $0.1691 | No | No | No | No | ||||||||
Woods Cross Terminal |
HRM-shipper | $0.0581 | No | 0.0581 | No | Yes | No | No | ||||||||
Burley Terminal |
HRM-shipper | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||
Boise Terminal |
HRM-shipper | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
EXHIBIT D
RULES AND REGULATIONS TARIFFS (INTERSTATE)
As of December 1, 2009
Holly Energy Partners Operating, L.P. F.E.R.C. No. 53.1.0
Holly Energy Partners Operating, L.P. F.E.R.C. No. 56.6.0
Holly Energy Partners Operating, L.P. New Mexico P.R.C No. 42
Holly Energy Partners Operating, L.P. New Mexico P.R.C No. 59.1.0
EXHIBIT E
FACILITY EXPANSIONS AND MODIFICATIONS
As of February 22, 2016
1. | El Paso System Expansion . |
(a) As of February 22, 2016, HEP Operating agrees to further expand the South System by (i) funding, constructing, owning and operating approximately 7 miles of new 12 Refined Products Pipeline from a point on the existing 8/12 Refined Products Pipeline to the property line of the Magellan El Paso Terminal, (ii) expanding the capacity of the Existing 8/12 Refined Products Pipeline to an instantaneous capacity of 98,000 bpd from Artesia, NM to the Magellan El Paso Terminal, (iii) adding approximately 1 mile of 6 Refined Products Pipeline from a point on the existing 6 Refined Products Pipeline to the Magellan El Paso Terminal, and (iv) causing such new extensions to be connected to the Magellan El Paso Terminal and the operator of the Magellan El Paso Terminal to share operational data with HEP Operating for the operation of such new connections (together with all related modifications, the El Paso System Expansion ).
(b) HEP Operating agrees to incur all costs reasonably necessary to effectuate the El Paso System Expansion.
(c) HEP Operating shall carry out the El Paso System Expansion as expeditiously as reasonably possible so that the project will be completed and operational not later than September 1, 2017.
Exhibit10.4
Execution Version
FOURTEENTH AMENDED AND RESTATED OMNIBUS AGREEMENT
among
HOLLYFRONTIER CORPORATION,
HOLLY ENERGY PARTNERS, L.P.
and
CERTAIN OF THEIR RESPECTIVE SUBSIDIARIES
TABLE OF CONTENTS
Page | ||||||
ARTICLE I DEFINITIONS AND INTERPRETATIONS |
2 | |||||
1.1 |
D EFINITIONS | 2 | ||||
1.2 |
I NTERPRETATION | 2 | ||||
ARTICLE II BUSINESS OPPORTUNITIES |
3 | |||||
2.1 |
R ESTRICTED B USINESSES | 3 | ||||
2.2 |
P ERMITTED E XCEPTIONS | 3 | ||||
2.3 |
R IGHT OF O FFER | 3 | ||||
2.4 |
P ROCEDURE FOR O FFERING A CQUIRED OR C ONSTRUCTED A SSETS TO HEP | 4 | ||||
2.5 |
S COPE OF P ROHIBITION | 6 | ||||
2.6 |
E NFORCEMENT | 6 | ||||
2.7 |
L IMITATION ON A CQUISITIONS OF P ERMITTED A SSETS BY HEP G ROUP M EMBERS | 6 | ||||
2.8 |
T ERMINATION OF A RTICLE II | 6 | ||||
ARTICLE III INDEMNIFICATION |
6 | |||||
3.1 |
C ONDITIONS OF I NDEMNIFICATION BY THE HFC E NTITIES | 6 | ||||
3.2 |
I NDEMNIFICATION BY THE HFC E NTITIES | 6 | ||||
3.3 |
C ONDITIONS OF I NDEMNIFICATION BY HEP E NTITIES | 8 | ||||
3.4 |
I NDEMNIFICATION BY HEP E NTITIES | 9 | ||||
3.5 |
M UTUAL G ENERAL I NDEMNITY | 9 | ||||
3.6 |
E XCLUSIONS FROM I NDEMNITY FOR P OST -C LOSING D ATE C LAIMS | 9 | ||||
3.7 |
I NDEMNIFICATION P ROCEDURES | 10 | ||||
3.8 |
L IMITATION ON I NDEMNIFICATION O BLIGATIONS | 11 | ||||
3.9 |
W AIVER OF S UBROGATION |
12 | ||||
ARTICLE IV GENERAL AND ADMINISTRATIVE EXPENSES |
13 | |||||
4.1 |
G ENERAL | 13 | ||||
ARTICLE V RIGHT OF FIRST REFUSAL |
14 | |||||
5.1 |
HFC R IGHT OF F IRST R EFUSAL : P ROHIBITION ON F URTHER T RANSFER OF T RANSFERRED A SSETS |
14 | ||||
5.2 |
P ROCEDURES | 14 | ||||
ARTICLE VI HFC PURCHASE OPTION |
17 | |||||
6.1 |
O PTION TO P URCHASE T ULSA T RANSFERRED A SSETS | 17 | ||||
ARTICLE VII API INSPECTIONS |
17 | |||||
7.1 |
API I NSPECTIONS | 17 | ||||
ARTICLE VIII DISPUTE RESOLUTION |
18 | |||||
8.1 |
D ISPUTE R ESOLUTION | 18 | ||||
8.2 |
A RBITRATION | 18 | ||||
8.3 |
C ONFLICT | 19 | ||||
ARTICLE IX FORCE MAJEURE |
19 | |||||
9.1 |
F ORCE M AJEURE | 19 | ||||
ARTICLE X MISCELLANEOUS |
20 | |||||
10.1 |
C HOICE OF L AW | 20 | ||||
10.2 |
N OTICES | 20 | ||||
10.3 |
E NTIRE A GREEMENT | 21 |
i
10.4 |
A MENDMENT OR M ODIFICATION | 21 | ||||
10.5 |
A SSIGNMENT | 21 | ||||
10.6 |
C OUNTERPARTS | 21 | ||||
10.7 |
S EVERABILITY | 21 | ||||
10.8 |
F URTHER A SSURANCES | 21 | ||||
10.9 |
R IGHTS OF L IMITED P ARTNERS | 21 | ||||
10.10 |
H EADINGS | 22 | ||||
10.11 |
L IMITATION OF D AMAGES | 22 | ||||
10.12 |
N ATURE OF THE R ELATIONSHIP | 22 |
EXHIBITS |
||||
Exhibit A - Omnibus Agreement Amendments |
||||
Exhibit B - Definitions |
||||
Exhibit C - Interpretation |
||||
Exhibit D - Asset Identification Summary |
||||
Exhibit E - Administrative Fee |
ii
FOURTEENTH AMENDED AND RESTATED
OMNIBUS AGREEMENT
THIS FOURTEENTH AMENDED AND RESTATED OMNIBUS AGREEMENT (this Agreement ) is being entered into on February 22, 2016 and effective as of February 22, 2016 (the Effective Date ), by and among the following entities (all Delaware limited liability companies unless otherwise noted):
HollyFrontier Corporation, a Delaware corporation ( HFC ), and its Affiliates listed below (singularly, HFC Entity ; and with HFC collectively, the HFC Entities ): |
El Paso Logistics LLC ( El Paso Logistics ) |
HollyFrontier El Dorado Refining LLC ( HollyFrontier El Dorado ) |
HollyFrontier Cheyenne Refining LLC ( HollyFrontier Cheyenne ) |
HollyFrontier Tulsa Refining LLC ( HollyFrontier Tulsa ) |
HollyFrontier Woods Cross Refining LLC ( HollyFrontier Woods Cross ) |
Navajo Pipeline Co., L.P., a Delaware limited partnership ( Navajo Pipeline ) |
HollyFrontier Navajo Refining LLC (HollyFrontier Navajo) |
HollyFrontier Refining & Marketing LLC ( HFRM ) |
AND |
Holly Energy Partners, L.P., a Delaware limited partnership ( HEP ), and its Affiliates listed below (singularly, HEP Entity ; and with HEP collectively, the HEP Entities ): |
Cheyenne Logistics LLC ( Cheyenne Logistics ) |
El Dorado Logistics LLC ( El Dorado Logistics ) |
El Dorado Operating LLC ( El Dorado Operating ) |
El Dorado Osage LLC ( El Dorado Osage ) |
HEP El Dorado LLC ( HEP El Dorado ) |
HEP Logistics GP, L.L.C. (the OLP GP ) |
HEP Logistics Holdings, L.P., a Delaware limited partnership (the General Partner ) |
HEP Mountain Home, L.L.C. |
HEP Navajo Southern, L.P., a Delaware limited partnership |
HEP Pipeline Assets, Limited Partnership, a Delaware limited partnership |
HEP Pipeline GP, L.L.C. |
HEP Pipeline, L.L.C. ( HEP Pipeline ) |
HEP Refining Assets, L.P., a Delaware limited partnership ( HEP Refining Assets ) |
HEP Refining GP, L.L.C. |
HEP Refining, L.L.C. ( HEP Refining ) |
1
HEP Tulsa LLC ( HEP Tulsa ) |
HEP UNEV Holdings LLC ( HEP UNEV ) |
HEP UNEV Pipeline LLC ( HEP UNEV Pipeline ) |
HEP Woods Cross, L.L.C. |
Holly Energy Partners Operating, L.P., a Delaware limited partnership (the Operating Partnership ) |
Holly Energy Storage - Lovington LLC |
Holly Logistic Services, L.L.C. ( Holly GP ), |
Lovington-Artesia, L.L.C. |
Roadrunner Pipeline, L.L.C. ( Roadrunner ) |
This Agreement amends and restates in its entirety the Thirteenth Amended and Restated Omnibus Agreement, effective as of November 1, 2015, among certain of the HFC Entities and certain of the HEP Entities which were signatories thereto (the Thirteenth Amended and Restated Omnibus Agreement ).
RECITALS:
WHEREAS, the Parties entered into an Omnibus Agreement on July 13, 2004 (as amended, the Original Omnibus Agreement ) to evidence their agreement with respect to various administrative, indemnity and other obligations, which agreement has been further amended and restated as set forth on Exhibit A , resulting in the Thirteenth Amended and Restated Omnibus Agreement.
WHEREAS, the Parties desire to amend and restate the Thirteenth Amended and Restated Omnibus Agreement as provided herein in order to, among other things, consolidate terms from various other agreements between the parties and to clarify terms as more particularly set forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the covenants, conditions and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
1.1 Definitions . Capitalized terms used throughout this Agreement and not otherwise defined herein shall have the meanings set forth on Exhibit B .
1.2 Interpretation . Matters relating to the interpretation of this Agreement are set forth on Exhibit C .
2
ARTICLE II
BUSINESS OPPORTUNITIES
2.1 Restricted Businesses . For so long as a HFC Group Member owns a controlling interest in the general partner of HEP, and except as permitted by Section 2.2 , Holly GP and each HFC Group Member shall be prohibited from engaging in or acquiring a controlling interest in or operating any business having assets or operations engaged in the Restricted Businesses.
2.2 Permitted Exceptions . Notwithstanding any provision of Section 2.1 to the contrary, Holly GP and the HFC Group Members may engage in the following activities under the following circumstances:
(a) | the ownership and/or operation of any of the Retained Assets (including replacements of the Retained Assets); |
(b) | any Restricted Businesses conducted by a HFC Group Member and Holly GP with the approval of the General Partner; |
(c) | the ownership and/or operation of Restricted Businesses by an HFC Entity or Holly GP in its capacity as general partner of HEP or its general partner; |
(d) | the ownership and/or operation of any asset or group of related assets used in the Restricted Business that are acquired or constructed by a HFC Group Member or Holly GP after the Closing Date (the Permitted Assets ), the fair market value of which (as determined in good faith by the Board of Directors of HFC) is as follows: |
(i) | less than $5 million at the time of such acquisition or good faith estimate of construction costs, as the case may be; or |
(ii) | equal to or greater than $5 million at the time of the acquisition or good faith estimate of construction costs; provided, HEP has been offered the opportunity to purchase the Permitted Assets in accordance with Section 2.3 and HEP has elected not to purchase the Permitted Assets; |
(e) | the ownership of the UNEV Profits Interest; |
(f) | the ownership of limited or any general partnership interests in HEP; and |
(g) | the ownership and/or operation of the El Paso Hawkins Terminal. |
2.3 Right of Offer .
(a) |
If Holly GP or a HFC Group Member becomes aware of an opportunity to acquire Permitted Assets with a fair market value (as determined in good faith by the Board of Directors of HFC) equal to or greater than $5 million, then, subject to Section 2.3(c) , as soon as practicable, Holly GP or such HFC Group Member shall notify HEP of such opportunity and deliver to HEP, or provide HEP access to all information prepared by or on behalf of, or material information submitted or delivered to, Holly GP or such HFC Group Member relating to such potential transaction. As soon as practicable, but in any event within 30 days after receipt |
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of such notification and information, HEP shall notify Holly GP or the HFC Group Member that it has either elected: |
(i) | not to cause a HEP Group Member to pursue the opportunity to purchase the Permitted Assets, or |
(ii) | to cause a HEP Group Member to pursue the opportunity to purchase the Permitted Assets, in which case the applicable Parties shall follow the procedures in Section 2.4 . |
(b) | If, at any time, HEP abandons such opportunity (as evidenced in writing by HEP to the HFC Group Member), Holly GP or the HFC Group Member may pursue such opportunity. Any Permitted Assets which are permitted to be acquired by Holly GP or a HFC Group Member must be so acquired: |
(i) | within 12 months of the later to occur of (A) the date that Holly GP or the HFC Group Member becomes able to pursue such acquisition in accordance with the provisions of this Section 2.3 , and (B) the date upon which all required governmental approvals to consummate such acquisition have been obtained, and |
(ii) | on terms not materially more favorable to Holly GP or the HFC Group Member than were offered to HEP. |
If either of these conditions are not satisfied, the opportunity must be reoffered to HEP in accordance with Section 2.3(a) .
(c) | Section 2.3(a) shall not apply if Holly GP or a HFC Group Member: |
(i) | becomes aware of an opportunity to make an acquisition that includes Permitted Assets and assets that are not Permitted Assets, and the Permitted Assets have a fair market value (as determined in good faith by the Board of Directors of HFC) equal to or greater than $5 million but comprise less than half of the fair market value (as determined in good faith by the Board of Directors of HFC) of the total assets being considered for acquisition, or |
(ii) | desires to construct Permitted Assets with an estimated construction cost (as determined in good faith by the Board of Directors of HFC) equal to or greater than $5 million; |
provided, however, that in each case Holly GP or a HFC Group Member, as the case may be, shall comply with Section 2.4 .
2.4 Procedure for Offering Acquired or Constructed Assets to HEP .
(a) |
Within 180 days after the consummation of the acquisition or the completion of construction by Holly GP or a HFC Group Member of the Permitted Assets, as the case may be, Holly GP or the HFC Group Member shall notify HEP in writing of such acquisition or construction and offer HEP the opportunity to purchase such Permitted Assets (the Offer ). The Offer shall set forth the terms |
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relating to the purchase of the Permitted Assets, and, if Holly GP or any HFC Group Member desires to utilize the Permitted Assets, the Offer will also include (i) the commercially reasonable terms on which the HEP Group will provide services to Holly GP or the HFC Group Member to enable Holly GP or the HFC Group Member to utilize the Permitted Assets and (ii) the terms of any service agreements, leases or access agreements to be provided to HEP by Holly GP or the HFC Group relating to such assets. As soon as practicable, but in any event within 30 days after receipt of such written notification, HEP shall notify Holly GP or the HFC Group Member in writing that HEP has elected (i) not to cause a HEP Group Member to purchase the Permitted Assets, in which event Holly GP or the HFC Group Member shall be forever free to continue to own or operate such Permitted Assets, or (ii) to cause a HEP Group Member to purchase the Permitted Assets, in which event Section 2.4(b) and Section 2.4(c) shall apply. |
(b) | If within 60 days after receipt by HEP of the Offer, Holly GP or the HFC Group Member and HEP are able to agree on the fair market value of the subject Permitted Assets and the other terms of the Offer including, the terms, if any, on which the HEP Group will provide services to Holly GP or the HFC Group Member to enable it to utilize the Permitted Assets, a HEP Group Member shall purchase the Permitted Assets for the agreed upon fair market value as soon as commercially practicable after such agreement has been reached and, if required by the Offer or otherwise agreed, enter into an agreement with Holly GP or the HFC Group Member to provide services in a manner consistent with the Offer. |
(c) | If Holly GP or the HFC Group Member and HEP are unable to agree within 60 days after receipt by HEP of the Offer on the fair market value of the subject Permitted Assets and/or the other terms of the Offer, Holly GP or the HFC Entity, on the one hand, and HEP, on the other hand, will engage a mutually agreed upon investment banking firm to determine the disputed terms. Such investment banking firm will determine the disputed terms within 30 days of its engagement and furnish Holly GP or the HFC Group Member, on the one hand, and HEP, on the other hand, its determination. The fees of the investment banking firm will be split equally between Holly GP or the HFC Group Member, on the one hand, and HEP, on the other hand. Once the investment banking firm has submitted its determination of the disputed terms, HEP will have the right, but not the obligation, to cause a HEP Group Member to purchase the Permitted Assets pursuant to the Offer as modified by the determination of the investment banking firm. HEP will provide written notice of its decision to Holly GP or the HFC Group Member within 30 days after the investment banking firm has submitted its determination. Failure to provide such notice within such 30-day period shall be deemed to constitute a decision not to purchase the Permitted Assets. If HEP elects to cause a HEP Group Member to purchase the Permitted Assets, then the HEP Group Member shall purchase the Permitted Assets pursuant to the Offer as modified by the determination of the investment banking firm as soon as commercially practicable after such determination and, if applicable, enter into an agreement with Holly GP or the HFC Group Member to provide services in a manner consistent with the Offer, as modified by the determination of the investment banking firm, if applicable. |
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2.5 Scope of Prohibition . Except as provided in this Article II and the Partnership Agreement, Holly GP and each HFC Group Member shall be free to engage in any business activity, including those that may be in direct competition with any HEP Group Member.
2.6 Enforcement . Holly GP and the HFC Group Members agree and acknowledge that the HEP Group does not have an adequate remedy at law for the breach by Holly GP and the HFC Group of the covenants and agreements set forth in this Article II , and that any breach by Holly GP and the HFC Group of the covenants and agreements set forth in this Article II would result in irreparable injury to the HEP Group. Holly GP and the HFC Group Members further agree and acknowledge that any HEP Group Member may, in addition to the other remedies that may be available to the HEP Group, file a suit in equity to enjoin Holly GP and the HFC Group from such breach and hereby consent to the issuance of injunctive relief under this Agreement.
2.7 Limitation on Acquisitions of Permitted Assets by HEP Group Members . Notwithstanding anything in this Agreement to the contrary, a HEP Group Member who is not a party to this Agreement is prohibited from acquiring Permitted Assets. In the event HEP desires a HEP Group Member who is not a party to this Agreement to acquire any Permitted Assets, then the General Partner shall first cause such HEP Group Member to become a party to this Agreement.
2.8 Termination of Article II . The provisions of this Article II may be terminated by HFC upon a Change of Control of HFC.
ARTICLE III
INDEMNIFICATION
3.1 Conditions of Indemnification by the HFC Entities . All indemnities set forth in Section 3.2 are subject to the following conditions:
(a) | Except for the indemnity in Sections 3.2(a)(ii) , (vii) and (viii) , indemnities apply only to the Transferred Assets and only until the applicable expiration date, if any, related to each such Transferred Asset shown on Exhibit D . |
(b) | The aggregate liability of the HFC Entities for all Covered Environmental Losses under Section 3.2(a) shall not exceed the amounts shown in column (b) on Exhibit D . The liability limits listed in column (b) represent separate individual limits for each location. |
(c) | Indemnities in Section 3.2(a)(i) apply only to the extent that such events or conditions occurred before the applicable Closing Date. |
3.2 Indemnification by the HFC Entities .
(a) | Subject to Section 3.1 , the HFC Entities shall indemnify, defend and hold harmless the HEP Entities from and against any Liability or Claim incurred by the HEP Entities or any Third Party to the extent arising out of: |
(i) | the Covered Environmental Losses relating to the Transferred Assets to the extent caused by the acts or omissions of an HFC Entity; |
(ii) | the ownership or operation by HFC and its Affiliates of any asset not constituting part of the Transferred Assets, except to the extent arising out of the negligent acts or omissions or willful misconduct of HEP or any of its Affiliates; |
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(iii) | the failure of the applicable HEP Entity to be the owner of valid and indefeasible easement rights or fee ownership for interests in and to the lands on which any pipeline or related pump station, tank farm or equipment conveyed or contributed or otherwise Transferred (including by way of a Transfer of the ownership interest of a Person or by operation of law) to the applicable HEP Entity on the applicable Closing Date; |
(iv) | the failure of the applicable HEP Entity to have the consents, licenses and permits necessary to allow any such Transferred Assets referred to in Section 3.2(a)(iii) to cross the roads, waterways, railroads and other areas upon which any such Transferred Assets are located as of the Closing Date; |
(v) | the cost of curing any condition set forth in clauses (iii) or (iv) above to the extent such conditions do not allow any Transferred Asset to be operated in accordance with Prudent Industry Practice; |
(vi) | the following: |
(A) | events and conditions associated with the operation of the Transferred Assets before the Closing Date (other than Covered Environmental Losses which are provided for under Section 3.2(a)(i) and events and conditions covered by Section 3.4 ); |
(B) | all legal actions pending against the HFC Entities on July 13, 2004; |
(C) | the completion of remediation projects at the respective HEP Entitys El Paso Hawkins Terminal, Albuquerque terminal and Mountain Home terminal that were ongoing or scheduled as of July 13, 2004; |
(D) | events and conditions associated with the Retained Assets and whether occurring before or after the Closing Date; and |
(E) | all federal, state and local tax liabilities attributable to the operation or ownership of the Transferred Assets prior to the applicable Closing Date, including any such tax liabilities of the HFC Entities that may result from the consummation of the formation transactions for the HEP Entities and the General Partner; |
(vii) | the operation by HEP and its Affiliates of any assets owned by HFC or any of its Affiliates, except to the extent arising out of the gross negligence or willful misconduct of HEP or any of its Affiliates; |
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(viii) | any failure to perform any covenant or agreement made or undertaken by HFC or its Affiliates in the (A) Master Lease and Access Agreement, or the exercise by HFC or its Affiliates of any rights and obligations under Section 2.2 thereof; or (B) Services and Secondment Agreement; except in either case to the extent arising out of the willful misconduct or negligence (standard negligence or gross negligence) of HEP or any of its Affiliates; and |
(ix) | any failure of HEP or any of its Affiliates to perform its obligations pursuant to the Storage and Handling Agreement to the extent arising after February 22, 2016, except to the extent arising out of gross negligence and willful misconduct of HEP or any of its Affiliates. |
(b) | The indemnities provided for in Section 3.2(a)(i) through (v) shall only apply if the HFC Entities are notified in writing of any of the foregoing prior to the applicable expiration date listed in column (b) on Exhibit D . |
(c) | The indemnities provided for in Section 3.2(a)(vi) shall only apply if to the extent that the HFC Entities are notified in writing of any of the following events and conditions within five years after the applicable Closing Date. |
(d) | Notwithstanding anything in this Agreement to the contrary, because HEP has been involved since the inception with the following Transferred Assets, as used in this Section 3.2 , the definition of Transferred Assets shall not include the 16 Lovington/Artesia Intermediate Pipeline, the Beeson Pipeline, the Roadrunner Pipeline, the Tulsa Interconnecting Pipelines, and the UNEV Pipeline. |
(e) | To the extent that a good faith Claim by the HEP Entities for indemnification under Section 3.2(a) arises from events or conditions at the Transferred Tanks or the soil immediately underneath the Transferred Tanks or the Transferred Tanks secondary containment, and the HFC Entities refuse to provide such indemnification, then the burden of proof shall be on the HFC Entities to demonstrate that the events or conditions giving rise to the Claim arose after the Closing Date. |
(f) | As used in this Section 3.2 , Affiliates of the Indemnifying Party shall not include the HEP Group Members when a HFC Entity is the Indemnifying Party and shall not include the HFC Group Members when the Indemnifying Party is a HEP Entity. |
3.3 Conditions of Indemnification by the HEP Entities . The indemnities set forth in Section 3.4 apply only to the extent that such events or conditions occurred on or after the applicable Closing Date, if any.
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3.4 Indemnification by the HEP Entities .
(a) | Subject to Section 3.3 , the HEP Entities shall indemnify, defend and hold harmless the HFC Entities from and against any Liability or Claim suffered or incurred by the HFC Entities or any Third Party to the extent arising from: |
(i) | the Covered Environmental Losses associated with operation of (A) the Other Assets, and (B) the Transferred Assets by a Person (other than a HFC Entity or ownership and operation of the Transferred Assets by a Person other than a HFC Entity); |
(ii) | operation by HEP and HEPs Affiliates of any asset owned by HFC or any of HFCs Affiliates but only to the extent caused by the gross negligence or willful misconduct of any of the HEP Entities; and |
(iii) | any failure to perform any covenant or agreement made or undertaken by any HEP or its Affiliates in the (A) Master Lease and Access Agreement, or the exercise by HEP or its Affiliates of any rights and obligations under Section 2.2 thereof; or (B) Services and Secondment Agreement; except in either case to the extent arising out of the willful misconduct or negligence (standard negligence or gross negligence) of HFC or any of its Affiliates. |
(b) | Nothing set forth in Section 3.4(a) shall make the HEP Entities responsible for any post-Closing Date negligent actions or omissions or willful misconduct by the HFC Entities. |
3.5 Mutual General Indemnity . Following the applicable Closing Dates, the HFC Entities and the HEP Entities, respectively, agree to indemnify, protect, defend and hold harmless each other from and against any and all Liabilities and Claims based upon, in connection with, relating to or arising out of their respective actions or inactions in connection with the operation of the Indemnifying Partys respective assets or any failure to comply with any Applicable Laws; in any case of or by any Indemnifying Party or its subcontractors, suppliers, materialmen, employees, agents, successors and assigns, or other persons directly or indirectly employed by them, including the following:
(a) | any injury to or death of any Person or the damage to or theft, destruction, loss or loss of use of, any property; or |
(b) | the failure to perform any covenant or agreement made or undertaken by the applicable Party in agreements with any of the other Parties. |
3.6 Exclusions from Indemnity for Post-Closing Date Claims . NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, FOR ANY LIABILITIES OR CLAIMS ARISING OUT OF EVENTS OCCURRING AFTER AN APPLICABLE CLOSING DATE:
(a) | EXCEPT AS EXPRESSLY PROVIDED IN SECTION 3.2(a)(vii) , THE INDEMNIFICATION OBLIGATIONS HEREIN SHALL NOT EXTEND TO THE PROPORTIONATE AMOUNT OF ANY SUCH LIABILITY OR CLAIM CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNITEE OR ITS AGENTS OR EMPLOYEES. |
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(b) | No statute, rule or regulation that precludes an injured party from bringing an action against a fellow employee or employer shall preclude a Party from seeking and obtaining a judicial determination of the fault or negligence of such Persons. |
(c) | Each Party shall be responsible for any insurance deductibles or self-insured retention arising out of any Liability or Claim to the extent such Liability or Claim arises out of the negligence or willful misconduct of such Party, except to the extent the subrogation waiver provided for in Section 3.9 applies to such Liability or Claim. |
3.7 Indemnification Procedures .
(a) | The Indemnified Party agrees that promptly after it becomes aware of facts giving rise to a Claim for indemnification under this Article III , 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 III , including, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided, however, that no such settlement shall be entered into without the consent of the Indemnified Party unless it includes a full release of the Indemnified Party from such matter or issues, as the case may be. |
(c) | The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with respect to all aspects of the defense of any Claims covered by the indemnification under this Article III , including, 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 and making available to the Indemnifying Party any employees of the Indemnified Party. |
(d) | In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in Section 3.7(c) 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 III ; 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. |
(e) | In connection with the indemnities in this Article III , Indemnifying Party: |
(i) | agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party; |
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(ii) | agrees to enter into a joint defense agreement with Indemnifying Party in order to allow communication by counsel if Indemnified Party elects to involve separate counsel; and |
(iii) | agrees to maintain the confidentiality of all files, records, and other information furnished by the Indemnified Party pursuant to this Section 3.8 . |
(f) | The amounts for which an Indemnified Party is entitled to indemnification under this Article III shall be reduced by the net amounts recovered by the Indemnified Party pursuant to contractual indemnities from any Third Party (other than pursuant to insurance policies that are not required to include a waiver of subrogation pursuant to Section 3.9 ) after deducting the reasonable unreimbursed out-of-pocket fees and expenses incurred by the Indemnified Party in recovering such amounts (the Net Recovery ). If the Indemnified Party receives a Net Recovery subsequent to an indemnification payment by the Indemnifying Party under this Article III , then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification payment up to Net Recovery. An Indemnified Party shall be obligated to pursue all contractual indemnities (including insurance claims) that such Indemnified Party has with any Third Party, provided, however, if the Indemnified Partys right to such indemnification is assignable, the Indemnified Party may, in its sole discretion and in lieu of pursuing such claim, elect to assign such indemnification claim to the Indemnifying Party to pursue and shall reasonably cooperate with the Indemnifying Party (including, making its relevant books, records, officers, information and testimony reasonably available to the Indemnifying Party) in the Indemnifying Partys pursuit of such claim. |
(g) | For avoidance of doubt, no Claim may be asserted pursuant to Section 3.2 or Section 3.4 following the applicable expiration of the indemnity related to such Claim; provided that any Claim asserted in writing prior to the expiration date of such indemnity that is the basis for such Claim shall survive until such Claim is finally resolved and satisfied. The date on which notification of a Claim for indemnification is received by the Indemnifying Party shall determine whether such Claim is timely made. |
3.8 Limitation on Indemnification Obligations .
(a) | Notwithstanding anything in this Agreement to the contrary, when referring to the indemnification obligations of the HFC Entities in Article III , the definition of HFC Entities shall be deemed to mean solely (i) the HFC Entity or HFC Entities that own or operate, or owned or operated immediately prior to the transfer to the HEP Entities, the Retained Asset, Transferred Asset or other property in question with respect to which indemnification is sought by reason of such HFC Entitys or HFC Entities ownership or operation of the Retained Asset, Transferred Asset or other property in question or that is responsible for causing such loss, damage, injury, judgment, claim, cost, expense or other liability suffered or incurred by the HEP Entities for which it is entitled to indemnification under Article III and (ii) HFC. |
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(b) | Notwithstanding anything in this Agreement to the contrary, when referring to the indemnification obligations of the HEP Entities in Article III , the definition of HEP Entities shall be deemed to mean solely (i) the HEP Entity or HEP Entities that own or operate, or previously owned or operated, the Transferred Asset or other property in question or that is responsible for causing such loss, damage, injury, judgment, claim, cost, expense or other liability suffered or incurred by the HFC Entities for which they are entitled to indemnification under Article III , (ii) HEP and (iii) Operating Partnership. |
(c) | For the avoidance of doubt, any indemnification obligations of the HFC Entities in Article III with respect to any indemnifiable losses incurred by or attributable to the UNEV Pipeline shall be (i) limited to an amount that is the product of (x) the amount of such losses, multiplied by (y) HEP UNEVs direct or indirect percentage ownership interest in the UNEV Pipeline at the time such losses were incurred and (ii) payable to, for the benefit of and recoverable solely by HEP UNEV or any HEP Entity designated by HEP UNEV (and not by UNEV Pipeline, LLC). |
3.9 Subrogation; Waiver of Subrogation . To the extent that any of the HFC Entities or HEP Entities in fact receive full indemnification payments pursuant to Section 3.2(a)(viii) or Section 3.4(a)(iii) hereof, as the case may be, the HFC Entity or HEP Entity paying such Claim shall be subrogated to the receiving partys rights with respect to the transaction or event requiring or giving rise to such indemnity. Notwithstanding the foregoing, each of the HFC Entities and the HEP Entities, hereby waives and releases, and shall cause their respective insurers, to waive and release, all rights against each other and any of their respective contractors, subsidiaries, consultants, agents and employees for loss or damages to any of the Transferred Assets to the extent of fire and other hazards covered by property insurance applicable to the property to which such loss or damage occurs, except such rights as they have to proceeds of such insurance. For the purposes of this Section 3.9 , all deductibles shall be considered insured losses. Without limiting the foregoing, all of the Parties policies of property insurance for the Transferred Assets shall be endorsed to provide a complete waiver for the benefit of the other Parties and their Affiliates of (i) any right of recovery which the insurer may have or acquire against the other Parties or any of its Affiliates, or its or their employees, officers or directors for payments made or to be made under such policies and (ii) any lien or right of subrogation which the insurer may have or acquire for payments made or to be made to any person or entity who asserts a Claim against such other Parties or any of its Affiliates, or its or their employees, officers or directors. The releases and waivers of subrogation set forth above in this paragraph shall apply notwithstanding any obligation of a Party to indemnify the other Party for the Claim(s) at issue.
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ARTICLE IV
GENERAL AND ADMINISTRATIVE EXPENSES
4.1 General .
(a) | The Operating Partnership will pay HFC an administrative fee (the Administrative Fee ) in the amount set forth on Exhibit E , payable in equal quarterly installments, for the provision by HFC and its Affiliates for the HEP Groups benefit of all the general and administrative services that HFC and its Affiliates provide, including, the general and administrative services listed on Exhibit E . |
(b) | HEP and HFC shall also periodically assess and increase the Administrative Fee in connection with expansions of the operations of the HEP Group through the acquisition or construction of new assets or businesses. |
(c) | At the end of each year, HEP will have the right to submit to HFC a proposal to reduce the amount of the Administrative Fee for that year if HEP believes in good faith that the general and administrative services performed by HFC and its Affiliates for the benefit of the HEP Group for the year in question do not justify payment of the full Administrative Fee for that year. If HEP submits such a proposal to HFC, HFC agrees that it will negotiate in good faith with HEP to determine if the Administrative Fee for that year should be reduced and, if so, the amount of such reduction. |
(d) | The Administrative Fee shall not include and the HEP Group shall reimburse HFC and its Affiliates for: |
(i) | salaries of employees of HFC or its Affiliates, to the extent, but only to the extent, such employees perform services for the HEP Group; |
(ii) | the cost of employee benefits relating to employees of HFC or its Affiliates, such as 401(k), pension, and health insurance benefits, to the extent, but only to the extent, such employees perform services for the HEP Group and have not been paid by HEP pursuant to the Master Site Services Agreement and the Services and Secondment Agreement; |
(iii) | any amounts payable under the Master Site Services Agreement and the Services and Secondment Agreement; |
(iv) | all sales, use, excise, value added or similar taxes, if any, that may be applicable from time to time in respect of the services provided by the HFC and its Affiliates to HEP pursuant to Section 4.1(a) ; and |
(v) | all premiums for insurance policies carried for and on behalf of HEP. |
(e) | Either HFC, on the one hand, or HEP, on the other hand, may terminate this Article IV , by providing the other with written notice of its election to do so at least six months prior to the proposed date of termination. |
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ARTICLE V
RIGHT OF FIRST REFUSAL
5.1 HFC Right of First Refusal: Prohibition on Transfer .
(a) | The HEP Entities hereby grant to HFC a right of first refusal on any proposed Transfer (other than a grant of a security interest to a bona fide third-party lender or a Transfer to another HEP Group Member) of any of the Assets. |
(b) | The HEP Entities are prohibited from Transferring any of the Assets to a HEP Group Member that is not a party to this Agreement. In the event the HEP Entities desire to Transfer any of the Assets to a HEP Group Member that is not a Party to this Agreement, they shall first cause the proposed transferee HEP Group Member to become a Party to this Agreement. |
(c) | The Parties acknowledge that all potential Transfers of Sale Assets pursuant to this Article V are subject to obtaining any and all required written consents of governmental authorities and other third parties and to the terms of all existing agreements in respect of the Sale Assets. |
(d) | Notwithstanding anything in this Agreement to the contrary, as used in Article V the definition of Assets shall not include the Tulsa Transferred Assets or the UNEV Pipeline, but shall expressly include the equity interests of UNEV Pipeline, LLC, HEP UNEV Pipeline, HEP UNEV, El Dorado Osage and Osage then owned directly or indirectly by the HEP Entities. |
5.2 Procedures .
(a) | If a HEP Entity proposes to Transfer any of the Assets to any Person pursuant to a bona fide third-party offer (an Acquisition Proposal ), then HEP shall promptly give written notice (a Disposition Notice ) thereof to HFC. The Disposition Notice shall set forth the following information in respect of the proposed Transfer: |
(i) | the name and address of the prospective acquiror (the Proposed Transferee ); |
(ii) | the Assets subject to the Acquisition Proposal (the Sale Assets ); |
(iii) | the purchase price offered by such Proposed Transferee (the Offer Price ); |
(iv) | reasonable detail concerning any non-cash portion of the proposed consideration, if any, to allow HFC to reasonably determine the fair market value of such non-cash consideration; |
(v) | the HEP Entities estimate of the fair market value of any non-cash consideration; and |
(vi) | all other material terms and conditions of the Acquisition Proposal that are then known to the HEP Entities. |
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(b) | To the extent the Acquisition Proposal consists of consideration other than cash (or in addition to cash) the Offer Price shall be deemed equal to the amount of any such cash plus the fair market value of such non-cash consideration. In the event HFC and the HEP Entities agree as to the fair market value of any non-cash consideration, HFC will provide written notice of its decision regarding the exercise of its right of first refusal to purchase the Sale Assets within 30 days of its receipt of the Disposition Notice (the First ROFR Acceptance Deadline ). Failure to provide such notice within such 30-day period shall be deemed to constitute a decision not to purchase the Sale Assets. |
(c) | In the event (i) HFCs determination of the fair market value of any non-cash consideration described in the Disposition Notice (to be determined by HFC within 30 days of receipt of such Disposition Notice) is less than the fair market value of such consideration as determined by the HEP Entities in the Disposition Notice and (ii) HFC and the HEP Entities are unable to mutually agree upon the fair market value of such non-cash consideration within 30 days after HFC notifies the HEP Entities of its determination thereof, the HEP Entities and HFC shall engage a mutually-agreed-upon investment banking firm to determine the fair market value of the non-cash consideration. Such investment banking firm shall be instructed to return its decision within 30 days after all material information is submitted thereto, which decision shall be final. The fees of the investment banking firm will be split equally between HFC and the HEP Entities. HFC will provide written notice of its decision regarding the exercise of its right of first refusal to purchase the Sale Assets to the HEP Entities within 30 days after the investment banking firm has submitted its determination (the Second ROFR Acceptance Deadline ). Failure to provide such notice within such 30-day period shall be deemed to constitute a decision by HFC not to purchase the Sale Assets. |
(d) | If HFC fails to exercise a right during any applicable period set forth in this Section 5.2 , HFC shall be deemed to have waived its rights with respect to such proposed disposition of the Sale Assets, but not with respect to any future offer of such Sale Assets. |
(e) | If HFC chooses to exercise its right of first refusal to purchase the Sale Assets under Sections 5.1(a) and 5.2(c) , HFC and the HEP Entities shall enter into a purchase and sale agreement for the Sale Assets which shall include the following terms: |
(i) | HFC will agree to deliver cash for the Offer Price (or any other consideration agreed to by HFC and the HEP Entities (each in their sole discretion)); |
(ii) | the HEP Entities will represent that they have good, indefeasible and unencumbered title to the Sale Assets, subject to all recorded and unrecorded matters and all physical conditions and other matters in existence on the closing date for the Sale Assets, plus any other reasonable and customary matters and such matters as HFC may approve, which approval will not be unreasonably withheld. If HFC desires to obtain any title insurance with respect to the Sale Assets, the full cost and expense of obtaining the same (including the cost of title examination, document duplication and policy premium) shall be borne by HFC; |
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(iii) | the HEP Entities will grant to HFC the right, exercisable at HFCs risk and expense, to conduct such surveys, tests and inspections of the Sale Assets as HFC may deem desirable, so long as such surveys, tests or inspections do not damage the Sale Assets or interfere with the activities of the HEP Entities thereon and so long as HFC has furnished the HEP Entities with evidence that adequate liability insurance is in full force and effect; |
(iv) | HFC will have the right to terminate its obligation to purchase the Sale Assets under this Article V if the results of any searches, surveys, tests or inspections conducted pursuant to Section 5.2(e)(ii) or Section 5.2(e)(iii) above are, in the reasonable opinion of HFC, unsatisfactory; |
(v) | the closing date for the purchase of the Sale Assets shall, unless otherwise agreed to by HFC and the HEP Entities, occur no later than 90 days following receipt by the HEP Entities of written notice by HFC of its intention to exercise its option to purchase the Sale Assets pursuant to Section 5.2(b) or (c) ; |
(vi) | the HEP Entities shall execute, have acknowledged and deliver to HFC a special warranty deed, assignment of easement, or comparable document, as appropriate, in the applicable jurisdiction, on the closing date for the purchase of the Sale Assets constituting real property interests conveying the Sale Assets unto HFC free and clear of all encumbrances created by the HEP Entities other than those set forth in Section 5.2(e)(ii) above; |
(vii) | the sale of any Sale Assets shall be made on an as is, where is and with all faults basis, and the instruments conveying such Sale Assets shall contain appropriate disclaimers; and |
(viii) | neither the HEP Entities nor HFC shall have any obligation to sell or buy the Sale Assets if any of the material consents referred to in Section 5.1(c) have not been obtained or such sale or purchase is prohibited by Applicable Law. |
(f) | HFC and the HEP Entities shall cooperate in good faith in obtaining all necessary governmental and other Third Party approvals, waivers and consents required for the closing. Any such closing shall be delayed, to the extent required, until the third Business Day following the expiration of any required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; provided, however, that such delay shall not exceed 120 days and, if governmental approvals and waiting periods shall not have been obtained or expired, as the case may be, by such 120th day, then HFC shall be deemed to have waived its right of first refusal with respect to the Sale Assets described in the Disposition Notice and thereafter neither HFC nor HEP shall have any further obligation under this Article V with respect to such Sale Assets unless such Sale Assets again become subject to this Article V pursuant to Section 5.2(g) . |
16
(g) | If the Transfer to the Proposed Transferee is not consummated in accordance with the terms of the Acquisition Proposal within the later of (i) 180 days after the later of the applicable ROFR Acceptance Deadline, and (ii) 10 days after the satisfaction of all governmental approval or filing requirements, if any, the Acquisition Proposal shall be deemed to lapse, and the HEP Entities may not Transfer any of the Sale Assets described in the Disposition Notice without complying again with the provisions of this Article V if and to the extent then applicable. |
ARTICLE VI
HFC PURCHASE OPTION
6.1 Option to Purchase Tulsa Transferred Assets . The Parties acknowledge the purchase options and right of first refusal granted to an Affiliate of HFC with respect to the Tulsa Transferred Assets in the Purchase Option Agreement.
ARTICLE VII
API INSPECTIONS
7.1 API Inspections . With respect only to the 2008 Tanks, the applicable HFC Entity that sold the particular tank(s) to the applicable HEP Entity shall, during the period that commences on the applicable Closing Date and ends five (5) years thereafter (the Initial Tank Inspection Period ) reimburse the applicable HEP Entity for the actual costs associated with the first regularly scheduled API 653 inspection (the Initial Tank Inspections ) and the costs associated with the replacement of the tank mixers on each of the Transferred Tanks after the Closing Date and any repairs required to be made to the 2008 Tanks as a result of any discovery made during the Initial Tank Inspections; provided, however, that
(a) | such HFC Entity shall not reimburse such HEP Entity with respect to the relocated crude oil Tank 437 in the Artesia refinery complex or the new crude oil tank to replace crude oil Tank 439 in the Artesia refinery complex more particularly described in the Purchase and Sale Agreement referenced in the definition of 2008 Crude Pipelines, Tanks and Related Assets, and |
(b) | upon expiration of the Initial Tank Inspection Period, all of the obligations of the applicable HFC Entity pursuant to this Article VII shall terminate, except that the Initial Tank Inspection Period shall be extended if, and only to the extent that |
(i) | inaccessibility of the 2008 Tanks during the Initial Tank Inspection Period caused the delay of an Initial Tank Inspection originally scheduled to be performed during the Initial Tank Inspection Period, and |
(ii) | the applicable HFC Entity received notice from the applicable HEP Entity regarding such delay at the time it occurred. |
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ARTICLE VIII
DISPUTE RESOLUTION
8.1 Dispute Resolution .
(a) | Any Arbitrable Dispute arising out of or in connection with this Agreement, including any question regarding the existence, validity or termination of this Agreement, shall be exclusively resolved in accordance with this Article VIII . |
(b) | In the event of a Arbitrable Dispute between an HFC Entity and an HEP Entity, the HFC Entity and the HEP Entity shall, within ten (10) days of a written request by either of them to the other, meet in good faith to resolve such Arbitrable Dispute in a meeting that includes individuals with authority to resolve the Arbitrable Dispute at such meeting. |
(c) | If the HFC Entity and the HEP Entity are unable to resolve the Arbitrable Dispute within ten (10) days after submission of such Arbitrable Dispute as provided in Section 8.1(b), either the HFC Entity or the HEP Entity may submit the matter to arbitration in accordance with the terms of Section 8.2 below. |
(d) | Pending resolution of any Arbitrable Dispute between the HFC Entity and the HEP Entity, the HFC Entity and the HEP Entity shall continue to perform in good faith their respective obligations under this Agreement based upon the last agreed performance demonstrated prior to the Arbitrable Dispute. |
(e) | Resolution of any Arbitrable Dispute between the HFC Entity and the HEP Entity involving payment of money by either the HFC Entity and the HEP Entity to the other shall include payment of interest at the Prime Rate from the original due date of such amount. |
(f) | Each of the HFC Entity and the HEP Entity shall, in addition to all rights provided herein or provided by Law, be entitled to the remedies of specific performance and injunction to enforce its rights hereunder. |
8.2 Arbitration . Any and all Arbitrable Disputes must be resolved through the use of binding arbitration using three arbitrators, in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code, as amended from time to time).
(a) | Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within the time period allowed by the applicable statute of limitations. Arbitration may be initiated by either party ( Claimant ) by delivering written notice to the other ( Respondent ) that the Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimants notice initiating binding arbitration must identify the arbitrator Claimant has appointed. The Respondent shall respond to Claimant within thirty (30) days after receipt of Claimants notice, identifying the arbitrator Respondent has appointed. If the Respondent fails for any reason to name an arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondents account. The two arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed. |
18
(b) | The hearing will be conducted in Dallas, Texas and commence within thirty (30) days after the selection of the third arbitrator. The parties and the arbitrators shall proceed diligently and in good faith in order that the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators will be binding on, and non-appealable by, the Claimant and Respondent. |
(c) | The Claimant will pay the compensation and expenses of the arbitrator named by it, and the Respondent will pay the compensation and expenses of the arbitrator named by or for it. The Claimant and Respondent will each pay one-half of the compensation and expenses of the third arbitrator. |
(d) | All arbitrators must (i) be neutral parties who have never been officers, directors or employees of any of the Parties or any of their Affiliates and who have not provided consulting services (directly or indirectly) for at least three (3) years prior to their appointment and (ii) have at least seven (7) years experience in the petroleum transportation industry. |
(e) | The arbitrators shall have no right to grant or award indirect, consequential, punitive or exemplary damages of any kind. |
(f) | The Arbitrable Disputes may be arbitrated in a common proceeding along with disputes under other agreements between the Claimant and Respondent to the extent that the issues raised in such disputes are related. Without the written consent of the Claimant and Respondent, no unrelated disputes (including those with Affiliates of either Claimant or Respondent) or Third Party disputes may be joined to an arbitration pursuant to this Agreement. |
8.3 Conflict . If there is any inconsistency between this Article VIII and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Article VIII will control the rights and obligations of the parties seeking arbitration.
ARTICLE IX
FORCE MAJEURE
9.1 Force Majeure . In the event of any Party being rendered unable, wholly or in part, by a Force Majeure event from performing its obligations under any of the Master Agreements, Services and Secondment Agreement or this Agreement for a period of more than thirty (30) consecutive days, then, upon the delivery of notice and full particulars of the Force Majeure event relied on ( Force Majeure Notice ) to the other affected Party(ies), the obligations of the Parties, so far are they are affected by the Force Majeure event, shall be suspended during the continuance of any inability so caused. The cause of the Force Majeure event shall, as far as possible, be remedied with all reasonable dispatch, except that no Party shall be compelled to resolve any strikes, lockouts or other industrial disputes other than as it shall determine to be in its best interests.
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ARTICLE X
MISCELLANEOUS
10.1 Choice of Law . This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.
10.2 Notices .
(a) | Any notice or other communication given under this Agreement shall be in writing and shall be (i) delivered personally, (ii) sent by documented overnight delivery service, (iii) sent by email transmission, or (iv) sent by first class mail, postage prepaid (certified or registered mail, return receipt requested). Such notice shall be deemed to have been duly given (x) if received, on the date of the delivery, with a receipt for delivery, (y) if refused, on the date of the refused delivery, with a receipt for refusal, or (z) with respect to email transmissions, on the date the recipient confirms receipt. Notices or other communications shall be directed to the following addresses: |
Notices to the HFC Entities:
HollyFrontier Corporation
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
Attention: President
Email address: president@hollyfrontier.com
with a copy, which shall not constitute notice, but is required in order to give proper notice, to:
HollyFrontier Corporation
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
Attention: General Counsel
Email address: general.counsel@hollyfrontier.com
Notices to the HEP Entities:
Holly Energy Partners, L.P.
c/o Holly Logistic Services, L.L.C.
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
Attention: President
Email address: president-HEP@hollyenergy.com
20
with a copy, which shall not constitute notice, but is required in order to give proper notice, to:
Holly Energy Partners, L.P.
c/o Holly Logistic Services, L.L.C.
2828 N. Harwood, Suite 1300
Dallas, Texas 75201
Attention: General Counsel
Email address: general.counsel@hollyenergy.com
(b) | Any Party may at any time change its address for service from time to time by giving notice to the other Parties in accordance with this Section 10.2 . |
10.3 Entire Agreement . This Agreement, together with the other agreements and instruments referred to herein, constitutes the entire agreement of the Parties relating to the matters contained herein, superseding as of the Effective Date all prior contracts or agreements (including the Original Omnibus Agreement), whether oral or written, relating to the matters contained herein. For avoidance of doubt the Eleventh Amended and Restated Omnibus Agreement, effective as of January 1, 2015, shall remain in full force and effect with respect to any event, act or omission occurring before January 1, 2015.
10.4 Amendment or Modification . No amendment or modification of this Agreement shall be valid unless it is in writing and signed by the parties hereto . No waiver of any provision of this Agreement shall be valid unless it is in writing and signed by the Party against whom the waiver is sought to be enforced. Any of the exhibits to this Agreement may be amended, modified, revised or updated by the Parties hereto if each of HFC (on behalf of the HFC Entities) and HEP (on behalf of the HEP Entities) execute an amended, modified, revised or updated exhibit or schedule, as applicable, and attach it to this Agreement. Such amended, modified, revised or updated exhibits shall be sequentially numbered (e.g. Exhibit A-1 , Exhibit A-2 , etc.), dated and appended as an additional exhibit or schedule to this Agreement and shall replace the prior exhibit or schedule, as applicable, in its entirety, except as specified therein. No failure or delay in exercising any right hereunder, and no course of conduct, shall operate as a waiver of any provision of this Agreement. No single or partial exercise of a right hereunder shall preclude further or complete exercise of that right or any other right hereunder.
10.5 Assignment . No Party shall have the right to assign any of its rights or obligations under this Agreement without the consent of the other Parties hereto.
10.6 Counterparts . This Agreement may be executed in any number of paper or electronic counterparts with the same effect as if all signatory parties had signed the same document. All such counterparts shall be construed together and shall constitute one and the same agreement.
10.7 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.
10.8 Further Assurances . In connection with this Agreement and all transactions contemplated by this Agreement, each 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.
10.9 Rights of Limited Partners . The provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no Limited Partner (as defined in the Partnership Agreement) of HEP
21
shall have the right, separate and apart from HEP, to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement. There are no Third Party beneficiaries to this Agreement.
10.10 Headings . Headings of the Sections of this Agreement are for convenience of the parties only and shall be given no substantive or interpretative effect whatsoever.
10.11 Limitation of Damages . N OTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER PROVISION OF THIS A GREEMENT AND EXCEPT FOR CLAIMS MADE BY THIRD PARTIES WHICH SHALL NOT BE LIMITED BY THIS S ECTION , THE P ARTIES AGREE THAT THE RECOVERY BY ANY PARTY , INCLUDING , PURSUANT TO A RTICLE III , OF ANY LIABILITIES , DAMAGES , COSTS OR OTHER EXPENSES (i) AS A RESULT OF ANY BREACH OR NONFULFILLMENT BY A PARTY OF ANY OF ITS COVENANTS , AGREEMENTS OR OTHER OBLIGATIONS UNDER THIS AGREEMENT OR (ii) BY REASON OF OR ARISING OUT OF ANY OF THE EVENTS , CONDITIONS OR OTHER MATTERS LISTED IN SECTIONS 3.2 OR 3.4 WHICH THE PARTIES HAVE AGREED TO INDEMNIFY THE OTHER PARTY AGAINST , SHALL BE LIMITED TO ACTUAL DAMAGES AND SHALL NOT INCLUDE OR APPLY TO , NOR SHALL ANY PARTY BE ENTITLED TO RECOVER , ANY INDIRECT , CONSEQUENTIAL , EXEMPLARY OR PUNITIVE DAMAGES ( INCLUDING , ANY DAMAGES ON ACCOUNT OF LOST PROFITS OR OPPORTUNITIES OR BUSINESS INTERRUPTION OR DIMINUTION IN VALUE ) SUFFERED OR INCURRED BY ANY P ARTY ; PROVIDED , HOWEVER , THAT SUCH RESTRICTION AND LIMITATION SHALL NOT APPLY TO A P ARTY S OBLIGATION TO INDEMNIFY THE OTHER P ARTY :
(X) AS A RESULT OF A THIRD PARTY CLAIM FOR SUCH INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES,
(Y) FOR CLAIMS THAT ARE COVERED BY INSURANCE AND ANY RELATED DEDUCTIBLES, OR
(Z) FOR INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING LIABILITIES ON ACCOUNT OF LOST PROFITS OR OPPORTUNITIES OR BUSINESS INTERRUPTION OR DIMINUTION IN VALUE) THAT ARE A RESULT OF SUCH INDEMNIFYING PARTYS OR ITS AFFILIATES GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
As used in this Section 10.11 , Affiliates of the Indemnifying Party shall not include the HEP Group Members when a HFC Entity is the Indemnifying Party and shall not include the HFC Group Members when the Indemnifying Party is a HEP Entity.
10.12 Nature of the Relationship . Notwithstanding the foregoing, nothing in this Agreement and no actions taken by the Parties shall constitute a partnership, joint venture, association or other co-operative entity among the Parties or authorize either Party to represent or contract on behalf of the other Party.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the Effective Date.
HFC ENTITIES: | ||||||
H OLLY F RONTIER C ORPORATION | ||||||
E L D ORADO L OGISTICS LLC | ||||||
H OLLY F RONTIER E L D ORADO R EFINING LLC | ||||||
H OLLY F RONTIER C HEYENNE R EFINING LLC | ||||||
H OLLY F RONTIER W OODS C ROSS R EFINING LLC | ||||||
H OLLY F RONTIER T ULSA R EFINING LLC | ||||||
N AVAJO P IPELINE C O ., L.P. | ||||||
H OLLY F RONTIER N AVAJO R EFINING LLC | ||||||
By: |
/s/ George J. Damiris |
|||||
Name: | George J. Damiris | |||||
Title: | Chief Executive Officer and President | |||||
HEP ENTITIES: | ||||||
H OLLY E NERGY P ARTNERS , L.P. | ||||||
By: | HEP Logistics Holdings, L.P. | |||||
Its General Partner | ||||||
By: | Holly Logistic Services, L.L.C. | |||||
Its General Partner | ||||||
By: |
/s/ Michael C. Jennings |
|||||
Name: | Michael C. Jennings | |||||
Title: | Chief Executive Officer |
[Signature Page 1 of 3 to Fourteenth Amended and Restated Omnibus Agreement]
C HEYENNE L OGISTICS LLC | ||||||
HEP L OGISTICS GP, L.L.C. | ||||||
HEP T ULSA LLC | ||||||
E L D ORADO L OGISTICS LLC | ||||||
EL D ORADO O PERATING LLC | ||||||
HEP UNEV H OLDINGS LLC | ||||||
HEP UNEV P IPELINE LLC | ||||||
H OLLY E NERGY S TORAGE L OVINGTON LLC | ||||||
H OLLY E NERGY P ARTNERS O PERATING , L.P. | ||||||
H OLLY L OGISTIC S ERVICES , L.L.C. | ||||||
R OADRUNNER P IPELINE , L.L.C. | ||||||
HEP E L D ORADO LLC | ||||||
EL DORADO OSAGE LLC | ||||||
By: |
/s/ Michael C. Jennings |
|||||
Name: | Michael C. Jennings | |||||
Title: | Chief Executive Officer | |||||
HEP L OGISTICS H OLDINGS , L.P. | ||||||
By: | Holly Logistic Services, L.L.C, | |||||
Its General Partner | ||||||
By: |
/s/ Michael C. Jennings |
|||||
Name: | Michael C. Jennings | |||||
Title: | Chief Executive Officer | |||||
HEP M OUNTAIN H OME , L.L.C. | ||||||
HEP P IPELINE GP, L.L.C. | ||||||
HEP P IPELINE , L.L.C. | ||||||
HEP R EFINING GP, L.L.C. | ||||||
HEP R EFINING , L.L.C. | ||||||
HEP W OODS C ROSS , L.L.C. | ||||||
L OVINGTON -A RTESIA , L.L.C. | ||||||
By: | HOLLY ENERGY PARTNERS OPERATING, L.P. | |||||
Sole Member | ||||||
By: |
/s/ Michael C. Jennings |
|||||
Name: | Michael C. Jennings | |||||
Title: | Chief Executive Officer |
[Signature Page 2 of 3 to Fourteenth Amended and Restated Omnibus Agreement]
HEP N AVAJO S OUTHERN , L.P. | ||||||
HEP P IPELINE A SSETS , L IMITED P ARTNERSHIP | ||||||
By: | HEP Pipeline GP, L.L.C. | |||||
Its General Partner | ||||||
By: |
/s/ Michael C. Jennings |
|||||
Name: | Michael C. Jennings | |||||
Title: | Chief Executive Officer | |||||
HEP R EFINING A SSETS , L.P. | ||||||
By: | HEP Refining GP, L.L.C. | |||||
Its General Partner | ||||||
By: |
/s/ Michael C. Jennings |
|||||
Name: | Michael C. Jennings | |||||
Title: | Chief Executive Officer |
[Signature Page 3 of 3 to Fourteenth Amended and Restated Omnibus Agreement]
Exhibit A
to
Fourteenth Amended and Restated Omnibus Agreement
Omnibus Agreement Amendments
Agreement |
Effective Date |
Reason for Amendment |
||
Original Omnibus Agreement | July 13, 2004 | n/a | ||
First Amended and Restated Omnibus Agreement | June 1, 2009 | 16 Lovington/Artesia Intermediate Pipeline Purchase Agreement | ||
Second Amended and Restated Omnibus Agreement | August 1, 2009 | Tulsa West (Sunoco) Asset Purchase Agreement | ||
Third Amended and Restated Omnibus Agreement | October 19, 2009 |
(i) Tulsa East (Sinclair) Purchase Agreement
(ii) Beeson Pipeline Purchase Agreement, and
(iii) Roadrunner Pipeline Purchase Agreement |
||
Fourth Amended and Restated Omnibus Agreement | March 31, 2010 | LLC Interest Purchase Agreement for certain Tulsa East Assets | ||
Fifth Amended and Restated Omnibus Agreement | August 31, 2011 | Tulsa Throughput Agreement | ||
Sixth Amended and Restated Omnibus Agreement | November 1, 2011 | LLC Interest Purchase Agreement for Cheyenne Assets and El Dorado Assets | ||
Seventh Amended and Restated Omnibus Agreement | July 12, 2012 | UNEV LLC Interest Purchase Agreement | ||
Eighth Amended and Restated Omnibus Agreement | June 1, 2013 | Malaga Throughput Agreement | ||
Ninth Amended and Restated Omnibus Agreement | January 7, 2014 | Amended and Restated El Dorado Throughput Agreement for the El Dorado New Tank No. 647 | ||
Tenth Amended and Restated Omnibus Agreement | September 26, 2014 | Amended and Restated Malaga Throughput Agreement | ||
Eleventh Amended and Restated Omnibus Agreement | January 1, 2015 | Unloading and Blending Services Agreement (Artesia) and Third Amended and Restated Crude Pipelines and Tankage Agreement (Beeson to Lovington System Expansion) | ||
Twelfth Amended and Restated Omnibus Agreement | January 1, 2015 | Artesia Railyard Facility, El Dorado Terminal, El Dorado New Tank No. 643 and Cheyenne New Tank No. 117 | ||
Thirteenth Amended and Restated Omnibus Agreement | November 2, 2015 | LLC Interest Purchase Agreement for certain El Dorado Refinery Assets |
A-1
Exhibit B
to
Fourteenth Amended and Restated Omnibus Agreement
Definitions
8 and 10 Lovington/Artesia Intermediate Pipelines means the 8-inch pipeline and the 10-inch pipeline, each running from Lovington, New Mexico to Artesia, New Mexico and owned by HEP Pipeline .
16 Lovington/Artesia Intermediate Pipeline means the 16-inch pipeline running from Lovington, New Mexico to Artesia, New Mexico, owned by Lovington-Artesia, L.L.C.
16 Lovington/Artesia Intermediate Pipeline Purchase Agreement means that certain LLC Interest Purchase Agreement dated as of June 1, 2009, by and among HFC, Navajo Pipeline and the Operating Partnership, pursuant to which Navajo Pipeline transferred and conveyed to the Operating Partnership, and the Operating Partnership acquired, all of the limited liability company interests of Lovington-Artesia, L.L.C., the entity that owns the 16 Lovington/Artesia Intermediate Pipeline.
2004 Product Pipelines, Terminal and Related Assets means the assets transferred under the July 13, 2004 Contribution, Conveyance and Assumption Agreement at the time of HEPs initial public offering.
2008 Crude Pipelines, Tanks and Related Assets means the Drop-Down Assets as defined in the Purchase and Sale Agreement, dated February 25, 2008, by and among HFC, Navajo Pipeline, Woods Cross Refining Company, L.L.C., a Delaware limited liability company, and HollyFrontier Navajo, as the seller parties, and HEP, the Operating Partnership, HEP Woods Cross, L.L.C., a Delaware limited liability company, and HEP Pipeline, as the buyer parties.
2008 Tanks means the Transferred Tanks included in the 2008 Crude Pipelines, Tanks and Related Assets.
Acquisition Proposal is defined in Section 5.2(a) .
Additional Lovington Assets means the Transferred Lovington Assets as defined in the March 2010 Drop Down LLC Interest Purchase Agreement.
Additional Tulsa East Assets means the Transferred Tulsa East Assets as defined in the March 2010 Drop Down LLC Interest Purchase Agreement.
Administrative Fee is defined in Section 4.1(a) .
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 is defined in the introduction to this Agreement.
B-1
Applicable Law means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question.
Arbitrable Dispute means any and all disputes, Claims, controversies and other matters in question between any of the HEP Entities, on the one hand, and any of the HFC Entities, on the other hand, arising out of or relating to this Agreement, the Master Agreements, or the Services and Secondment Agreement, or the alleged breach hereof and thereof, or in any way relating to the subject matter of this Agreement, the Master Agreements, or the Services and Secondment Agreement, regardless of whether (a) allegedly extra-contractual in nature, (b) sounding in contract, tort or otherwise, (c) provided for by Applicable Law or otherwise or (d) seeking damages or any other relief, whether at law, in equity or otherwise.
Artesia Blending Facility means the two tanks and related equipment for the unloading and blending of ethanol and biodiesel at the refined product truck rack located at the refinery owned by HollyFrontier Navajo in Artesia, New Mexico.
Artesia Rail Sublease Agreement means that certain Sublease Agreement effective as of November 1, 2014 by and between HEP Refining and HFRM, pursuant to which HEP Refining agreed to sublease to HFRM, and HFRM agreed to sublease from HEP Refining, the BNSF Land.
Artesia Rail Yard Facility means (a) the railroad track siding consisting of approximately 8,300 track feet of siding (rail storage) and two mainline switches and three industry switches located on certain land leased by HFRM from the Operating Partnership pursuant to the Artesia Track Lease Agreement, and (b) HEP Refinings leasehold interest, as tenant, under the BNSF Lease, and (c) HEP Refinings leasehold interest, as landlord, under the Rail Yard Sublease Agreement.
Artesia Track Agreement means that certain Track Lease Agreement effective as of November 1, 2014 by and between HEP Refining and HFRM, pursuant to which HEP Refining agreed to lease to HFRM, and HFRM agreed to lease from HEP Refining, the Artesia Rail Yard Facility.
Assets means the Transferred Assets and the Other Assets, collectively.
Beeson Pipeline means the 8 crude oil pipeline extending from Beeson station to Lovington, New Mexico, owned by HEP Pipeline.
Beeson Pipeline Purchase Agreement means that certain Asset Purchase Agreement dated as of December 1, 2009, by and among HFC, Navajo Pipeline and HEP Pipeline, pursuant to which Navajo Pipeline agreed to transfer and convey to HEP Pipeline, and HEP Pipeline agreed to acquire, the Beeson Pipeline.
Beeson to Lovington System Expansion means the following project undertaken by HEP Pipeline: the installation of a larger pump at the Beeson station and the replacement of five miles of existing 8-inch pipeline with 10-inch pipeline beginning at the Beeson station end of the Beeson Pipeline.
B-2
BNSF Land means the land located in Eddy County, New Mexico leased to HEP Refining pursuant to the BNSF Lease.
BNSF Lease means that certain Lease of Land Including New Track Construction dated to be effective as of February 14, 2014, pursuant to which HEP Reining agreed to lease from BNSF Railway Company the BNSF Land.
Business Day means any day other than Saturday, Sunday or other day upon which commercial banks in Dallas, Texas are authorized by law to close.
Change of Control means, with respect to any Person (the Applicable Person ), any of the following events:
(a) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all of the Applicable Persons assets to any other Person unless immediately following such sale, lease, exchange, or other transfer such assets are owned, directly or indirectly, by the Applicable Person;
(b) the consolidation or merger of the Applicable Person with or into another Person pursuant to a transaction in which the outstanding Voting Securities of the Applicable Person are changed into or exchanged for cash, securities, or other property, other than any such transaction where
(i) the outstanding Voting Securities of the Applicable Person are changed into or exchanged for Voting Securities of a surviving Person or its parent and
(ii) the holders of the Voting Securities of the Applicable Person immediately prior to such transaction own, directly or indirectly, not less than a majority of the Voting Securities of the surviving Person or its parent immediately after such transaction; and
(c) a person or group (within the meaning of Sections 13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (in the case of HFC, other than a group consisting of some of all of the current control persons of HFC), being or becoming the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended) of more than 50% of all of the then outstanding Voting Securities of the Applicable Person, except in a merger or consolidation that would not constitute a Change of Control under clause (b) above.
Cheyenne Assets is defined in the November 2011 Frontier Drop Down LLC Interest Purchase Agreement.
Cheyenne Logistics is defined in the introduction to this Agreement.
Cheyenne New Tank means petroleum storage tank no. 117 located at the Cheyenne Refinery Complex.
Claim means any existing or threatened future claim, demand, suit, judgment, settlement, action, investigation, proceeding, governmental action, cause of action, claims, demands, causes of action, suits, judgments, settlements, fines, penalties, costs, and expenses (including court costs and reasonable attorneys and experts fees) of any kind or character (in each case, whether civil, criminal, investigative
B-3
or administrative), known or unknown, under any theory, including those based on theories of contract, tort, statutory liability, strict liability, employer liability, premises liability, products liability, breach of warranty or malpractice of any and every kind or character, known or unknown, fixed, contingent or suffered.
Claimant is defined in Section 8.2(a).
Closing Date means
(a) for all sections other than Articles III and VII , July 13, 2004, the date of the closing of HEPs initial public offering, and
(b) for purposes of Articles III and VII , Closing Date means, with respect to a group of assets, the effective date of the purchase of such assets or the stock, partnership interests or membership interests of the entity that directly or indirectly owns such assets, by a HEP Entity (such Closing Date being shown in Exhibit D , column (a)).
Contribution Agreement means that certain Contribution, Conveyance and Assumption Agreement, dated as of July 13, 2004, among HFC, Navajo Pipeline, the General Partner, HEP, the OLP GP, the Operating Partnership and certain other 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 means Environmental Claims to the extent arising from:
(a) | any violation or correction of violation of Environmental Laws associated with the ownership or operation of the Assets, or |
(b) | any event or condition associated with ownership or operation of the Assets (including, the presence of Hazardous Substances on, under, about or migrating from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets at any non-Asset locations), including: |
(i) | 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; |
(ii) | 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 |
(iii) | the cost and expense for any environmental or Toxic Tort pre-trial, trial, or appellate legal or litigation support work. |
Disposition Notice is defined in Section 5.2(a) .
Effective Date is defined in the introduction to this Agreement.
B-4
El Dorado Assets is defined in the November 2011 Frontier Drop Down LLC Interest Purchase Agreement.
El Dorado Logistics is defined in the introduction to this Agreement.
El Dorado Membership Purchase Agreement means that certain Membership Interest Purchase Agreement dated as of March 6, 2015 by and between El Dorado Logistics and Rimrock Midstream, LLC.
El Dorado New Tanks means (a) petroleum products storage tank no. 647 located at the El Dorado Refinery Complex, and (b) petroleum products storage tank no. 643 located at the El Dorado Refinery Complex.
El Dorado Operating is defined in the introduction to this Agreement.
El Dorado Osage is defined in the introduction to this Agreement.
El Dorado Osage LLC Interest Purchase Agreement means that certain LLC Interest Purchase Agreement effective as of February 22, 2016, by and among HFRM, HFC and the Operating Partnership, pursuant to which HFRM agreed to transfer to the Operating Partnership the entity that owns the Osage Membership Interest.
El Dorado Refinery Assets means Assets as defined in that certain LLC Interest Purchase Agreement dated as of October 30, 2015 and effective as of November 1, 2015 by and between HollyFrontier El Dorado, HFC and the Operating Partnership, pursuant to which HollyFrontier El Dorado agreed sell to the Operating Partnership all of the issued and outstanding limited liability company interests in the entity that owns the El Dorado Refinery Assets.
El Dorado Terminal means that certain petroleum products tank farm located in El Dorado Kansas, and more particularly described in the El Dorado Membership Purchase Agreement, as such terminal may be modified, expanded or upgraded from time to time.
El Dorado Throughput Agreement means that certain Second Amended and Restated Pipeline Delivery, Tankage and Loading Rack Throughput Agreement (El Dorado), dated as of January 7, 2014, and effective as of November 1, 2011, by and between HollyFrontier El Dorado and El Dorado Logistics LLC, pursuant to which El Dorado Logistics LLC constructed new storage tank assets.
El Paso Logistics is defined in the introduction to this Agreement.
El Paso Hawkins Terminal means the El Paso Hawkins Terminal as defined in that certain Refined Products Terminal Transfer Agreement effective as of February 22, 2016 between HEP Refining Assets and El Paso Logistics, pursuant to which El Paso Logistics acquired the El Paso Hawkins Terminal.
Environmental Claims means environmental and Toxic Tort Liabilities and Claims of any and every kind or character, known or unknown, fixed or contingent.
Environmental Costs means (i) 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, (ii) 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 (iii) the cost and expense for any Environmental Claim, including pre-trial, trial, or appellate legal or litigation support work.
B-5
Environmental Laws means all federal, state and local laws, statutes, rules, regulations, orders and ordinances, now or hereafter in effect, relating to protection of the environment, including the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other environmental conservation and protection laws, each as amended from time to time.
First ROFR Acceptance Deadline is defined in Section 5.2(b) .
Force Majeure means acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, wars (whether or not an official declaration is made thereof), terrorist attacks, blockades, insurrections, riots, epidemics, landslides, lightening, earthquakes, fires, hurricanes, storms, floods, washouts, freezeoffs, arrests, the order of any Governmental Authority having jurisdiction while the same is in force and effect, civil disturbances, explosions, breakage, accident to machinery, equipment, storage tanks or lines of pipe, repairs, maintenance, inability to obtain or unavoidable delay in obtaining permits, material or equipment, and any other causes whether of the kind herein enumerated or otherwise not reasonably within the control of the Party claiming suspension and which by the exercise of due diligence such Party is unable to prevent or overcome. Notwithstanding anything in this Agreement to the contrary, inability of a Party to make payments when due, be profitable or to secure funds, arrange bank loans or other financing, obtain credit or have adequate capacity or production (other than for reasons of Force Majeure) shall not be regarded as events of Force Majeure
General Partner is defined in the introduction to this Agreement.
Governmental Authority means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.
Hazardous Substance means (a) any substance that is designated, defined or classified as a hazardous waste, hazardous material, pollutant, contaminant, or toxic or hazardous substance, or that is otherwise regulated under any Environmental Law, including, any hazardous substance as defined under the Comprehensive Environmental Response, Compensation, and Liability Act, and (b) petroleum, crude oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel and other refined petroleum hydrocarbons.
HEP is defined in the introduction to this Agreement.
HEP El Dorado is defined in the introduction to this Agreement.
HEP Entities is defined in the introduction to this Agreement.
HEP Entity means any of the HEP Entities.
HEP Group means the HEP Entities and any Subsidiary of any such Person, all of which are treated as a single consolidated entity for purposes of this Agreement.
B-6
HEP Group Member means any member of the HEP Group.
HEP Pipeline is defined in the introduction to this Agreement.
HEP Refining is defined in the introduction to this Agreement.
HEP Refinery Assets is defined in the introduction to this Agreement.
HEP Tulsa is defined in the introduction to this Agreement.
HEP UNEV is defined in the introduction to this Agreement.
HEP UNEV Pipeline is defined in the introduction to this Agreement.
HFC is defined in the introduction to this Agreement.
HFC Group means the HFC Entities and any Person controlled, directly or indirectly, by HFC other than the HEP Entities.
HFC Group Member means any member of the HFC Group.
HFRM is defined in the introduction to this Agreement.
HollyFrontier Cheyenne is defined in the introduction to this Agreement.
HollyFrontier El Dorado is defined in the introduction to this Agreement.
HollyFrontier Navajo is defined in the introduction to this Agreement.
HollyFrontier Tulsa is defined in the introduction to this Agreement.
HollyFrontier Woods Cross is defined in the introduction to this Agreement.
Holly GP is defined in the introduction to this Agreement.
Indemnified Claims means losses, damages, liabilities, Claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including, court costs and reasonable attorneys and experts fees) of any and every kind or character.
Indemnified Party means all or part of either the HEP Entities or the HFC Entities, as the case may be, in their capacity as the parties entitled to indemnification in accordance with Article III .
Indemnifying Party means all or part of either the HEP Entities or the HFC Entities, as the case may be, in their capacity as the parties from whom indemnification may be required in accordance with Article III .
Initial Tank Inspections is defined in Section 7.1.
Initial Tank Inspection Period is defined in Section 7.1
Liability means with respect to any Person, any economic losses (including, diminution in value and lost profits suffered by third parties to the extent an Indemnified Party is required to pay for such damages), damages, injuries (including, personal injury and death), liabilities, of any and every kind or character, known or unknown, fixed, contingent or suffered.
B-7
Limited Partner is defined in the Partnership Agreement.
Malaga Pipeline System means the Pipeline System, as such term is defined in the Malaga TSA.
Malaga TSA means that certain Amended and Restated Transportation Services Agreement (Malaga) dated as of September 26, 2014 by and between HFRM and Operating Partnership, pursuant to which Operating Partnership provides certain transportation services for HFRM on the Malaga Pipeline System, as such agreement may be amended, modified or replaced from time to time.
March 2010 Drop Down LLC Interest Purchase Agreement means that certain LLC Interest Purchase Agreement dated as of March 31, 2010, by and among HFC, Lea Refining Company, HollyFrontier Tulsa, HEP Refining and HEP Tulsa, pursuant to which HFC, Lea Refining Company and HollyFrontier Tulsa agreed to transfer and convey to HEP Refining and HEP Tulsa the Additional Tulsa East Assets and the Additional Lovington Assets.
Master Agreements means the Master Lease and Access Agreement, Master Site Services Agreement, Master Throughput Agreement and Master Tolling Agreements.
Master Lease and Access Agreement means that certain Amended and Restated Master Lease and Access Agreement dated effective as of the Effective Date among certain of the HEP Entities and the Refinery Owners.
Master Site Services Agreement means that certain Amended and Restated Master Site Services Agreement dated effective as of the Effective Date among certain of the HEP Entities and the Refinery Owners.
Master Throughput Agreement means that certain Master Throughput Agreement effective as of January 1, 2015 between the Operating Partnership and HFRM.
Master Tolling Agreements means that certain Master Tolling Agreement (Refinery Assets) dated effective as of the Effective Date between HollyFrontier El Dorado and the Operating Partnership and that certain Master Tolling Agreement (Operating Assets) dated effective as of the Effective Date between HollyFrontier El Dorado and the Operating Partnership.
Navajo Pipeline is defined in the introduction to this Agreement.
Net Recovery is defined in Section 3.7(f) .
November 2011 Frontier Drop Down LLC Interest Purchase Agreement means that certain LLC Interest Purchase Agreement effective as of November 1, 2011, by and among HFC, HollyFrontier Cheyenne, HollyFrontier El Dorado, the Operating Partnership and HEP, pursuant to which HollyFrontier Cheyenne and HollyFrontier El Dorado agreed sell to the Operating Partnership the entities that own the Cheyenne Assets and the El Dorado Assets.
Offer is defined in Section 2.4(a)
Offer Price is defined in Section 5.2(a) (iii) .
B-8
OLP GP is defined in the introduction to this Agreement.
Operating Partnership is defined in the introduction to this Agreement.
Original Omnibus Agreement is defined in the recitals to this Agreement.
Osage means Osage Pipe Line Company, LLC, a Delaware limited liability company.
Osage Membership Interest means a fifty percent (50%) limited liability company membership interest in Osage.
Other Assets means those assets owned by a HEP Entity that serve the Refineries and were not conveyed, contributed, or otherwise transferred, directly or indirectly by the HFC Entities to the HEP Entities, as indicated in column (a) of Exhibit D , Part 2 ; provided, that for the purposes of Section 3.2 , Other Assets shall not include that certain 8 pipeline extending 50 miles from the White City Station that was formerly used as a refined products pipeline and that was conveyed to the HEP Entities as part of the 2004 Product Pipelines, Terminal and Related Assets.
Partnership Agreement means the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P. dated as of July 13, 2004 as amended or supplemented by the following:
Agreement |
Effective Date | |
Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P. |
February 28, 2005 | |
Amendment No. 2 to the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P. |
July 6, 2005 | |
Amendment No. 3 to the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P. |
April 11, 2008 | |
Limited Partial Waiver of Incentive Distribution Rights |
July 12, 2012 | |
Amendment No. 4 to the First Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P. |
January 16, 2013 |
No amendment or modification to the Partnership Agreement subsequent to the date of this Agreement shall be given effect for the purposes of this Agreement unless consented to by each of the Parties.
Party means any one of the entities listed on the signature page to this Agreement, collectively the Parties .
Permitted Assets is defined in Section 2.2(d).
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.
B-9
Post-Closing Covered Environmental Losses means, to the extent such violation, event or condition occurred after the Closing Date:
(a) | any violation or correction of violation of Environmental Laws associated with the operation of the Transferred Assets by a Person other than a HFC Entity or ownership and operation of the Transferred Assets by a Person other than a HFC Entity, or |
(b) | any event or condition associated with the ownership and/or operation of the Transferred Assets by a Person other than a HFC Entity (including the presence of Hazardous Substances on, under, about or migrating to or from the Transferred Assets or the disposal or release of Hazardous Substances generated by operation of the Transferred Assets) including, the Environmental Costs; |
provided, however, that nothing stated above shall make the HEP Entities responsible for any post-Closing Date negligent actions or omissions or willful misconduct by any of the HFC Entities.
Pre-Closing Covered Environmental Losses means, to the extent such violation, event or condition occurred before the Closing Date:
(a) | any violation or correction of violation of Environmental Laws associated with the ownership or operation of the Transferred Assets by a Person other than a HEP Entity or ownership and operation of the Transferred Assets by a Person other than a HEP Entity, or |
(b) | any event or condition associated with ownership and/or operation of the Transferred Assets by a Person other than a HEP Entity (including, the presence of Hazardous Substances on, under, about or migrating to or from the Transferred Assets or the disposal or release of Hazardous Substances generated by operation of the Transferred Assets), including, the Environmental Costs. |
provided, however, that nothing stated above shall make the HFC Entities responsible for any pre-Closing Date negligent actions omissions or willful misconduct by any of the HEP Entities.
Proposed Transferee is defined in Section 5.2(a)(i) .
Prudent Industry Practice means such practices, methods, acts, techniques, and standards as are in effect at the time in question that are consistent with (a) the standards generally followed by the United States pipeline and terminalling industries or (b) such higher standards as may be applied or followed by the HFC Entities in the performance of similar tasks or projects, or by the HEP Entities in the performance of similar tasks or projects.
Purchase Option Agreement has the meaning set forth in the Asset Purchase Agreement, dated August 1, 2009, between HollyFrontier Tulsa, as the seller, and HEP Tulsa, as the buyer.
Refinery or Refineries means each of the Refinery Complexes identified in the Master Lease and Access Agreement.
Refinery Owners means each of the HFC Entities that own one or more of the Refineries.
Respondent is defined in Section 8.2(a).
B-10
Restricted Business or Restricted Businesses means the ownership or operation of crude oil pipelines or terminals, intermediate petroleum product pipelines or terminals, refined petroleum products pipelines, terminals, truck racks or crude oil gathering systems in the continental United States.
Retained Assets means the pipelines, terminals and other assets and investments owned by any HFC Group Member on the date of the Contribution Agreement that were not conveyed, contributed or otherwise transferred to the HEP Entities pursuant to the Contribution Agreement or otherwise.
Roadrunner is defined in the introduction to this Agreement.
Roadrunner Pipeline means 16 crude oil pipeline extending from Slaughter station in Texas to Lovington, New Mexico owned by Roadrunner.
Roadrunner Pipeline Purchase Agreement means that certain LLC Interest Purchase Agreement dated as of December 1, 2009 by and among Navajo Pipeline and the Operating Partnership, pursuant to which the Operating Partnership acquired, all of the outstanding limited liability company interests of Roadrunner, the entity that owns the Roadrunner Pipeline.
ROFR Acceptance Deadline means the First ROFR Acceptance Deadline or the Second ROFR Acceptance Deadline, as applicable, both as defined in Section 5.2(b) and (c) .
Sale Assets is defined in Section 5.2(a)(ii) .
Second ROFR Acceptance Deadline is defined in Section 5.2(c).
Services and Secondment Agreement means that certain Amended and Restated Services and Secondment Agreement dated effective as of the Effective Date, by and among Holly GP, the Operating Partnership, Cheyenne Logistics, El Dorado Logistics, El Dorado Operating, HollyFrontier Payroll Services, Inc., a Delaware corporation, HollyFrontier Cheyenne and HollyFrontier El Dorado.
Sinclair means Sinclair Tulsa Refining Company.
Sinclair Purchase Agreement means that certain Asset Sale and Purchase Agreement dated as of October 19, 2009, by and among HollyFrontier Tulsa, HEP Tulsa and Sinclair, pursuant to which HEP Tulsa acquired the Sinclair Transferred Assets.
Sinclair Transferred Assets means the HEP Tulsa Assets as defined in the Sinclair Purchase Agreement.
Storage and Handling Agreement means that certain Storage and Handling Agreement dated February 21, 1997, between the Operating Partnership and Alon U.S.A., L.P., as amended effective January 1, 2004, September 1, 2008 and March 1, 2011.
Third Party means a Person which is not (a) HEP or an Affiliate of HEP, (b) HFC or an affiliate of HFC, (c) a Person that, after the signing of this Agreement becomes a successor entity of HEP, HFC or any of their respective Affiliates. An employee of HFC or HEP shall not be deemed an Affiliate.
Thirteenth Amended and Restated Omnibus Agreement is defined in the introduction to this Agreement.
B-11
Toxic Tort means a Claim or cause of action arising from personal injury or property damage incurred by the plaintiff that is alleged to have been caused by exposure to, or contamination by, Hazardous Substances that have been released into the environment by or as a result of the actions or omissions of the defendant.
Transfer including the correlative terms Transferring or Transferred means any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other encumbrance, or any other disposition (whether voluntary, involuntary or by operation of law) of the Assets.
Transferred Assets means all of the assets conveyed, contributed, or otherwise transferred, directly or indirectly (including by transfer or sale of the entity that owns such assets or the entity that owns the interests in the entity that owns such assets) that serve the Refineries, by the HFC Entities to the HEP Entities, as indicated in column (a) of Exhibit D , Part 1 ; provided that for the purposes of Section 3.2 , the term Transferred Assets shall include that certain 8 pipeline extending 50 miles from the White City Station that was formerly used as a refined products pipeline and that was conveyed to the HEP Entities as part of the 2004 Product Pipelines, Terminal and Related Assets.
Transferred Tanks means the tanks included in the Assets, as indicated in column (h) of Exhibit D .
Tulsa Interconnecting Pipelines means the Interconnecting Pipelines as defined in the Tulsa Throughput Agreement.
Tulsa Purchase Agreement means that certain Asset Purchase Agreement dated as of August 1, 2009, by and between HollyFrontier Tulsa and HEP Tulsa, pursuant to which HollyFrontier Tulsa transferred and conveyed to HEP Tulsa, and HEP Tulsa acquired, the Tulsa Transferred Assets.
Tulsa Throughput Agreement means that certain Second Amended and Restated Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East), dated as of August 31, 2011, pursuant to which HEP Tulsa agreed to provide transportation services to HollyFrontier Tulsa with respect to the Tulsa Interconnecting Pipelines.
Tulsa Transferred Assets means the Transferred Assets as defined in the Tulsa Purchase Agreement.
UNEV LLC Interest Purchase Agreement means that certain LLC Interest Purchase Agreement dated as of July 12, 2012, by and among HFC, HEP UNEV and HEP, pursuant to which HFC agreed to sell to HEP UNEV the entity that owns 75% of all of the issued and outstanding membership interests of UNEV Pipeline, LLC, the entity that owns the UNEV Pipeline.
UNEV Pipeline means, collectively, an approximately 400 mile, 12-inch refined products pipeline currently running from Woods Cross, Utah to Las Vegas, Nevada, related products terminals in or near Cedar City, Utah and Las Vegas, Nevada and other related assets owned by UNEV Pipeline, LLC.
UNEV Profits Interest means the membership interest in HEP UNEV held directly or indirectly by HFC.
Voting Securities 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.
B-12
Exhibit C
to
Fourteenth Amended and Restated Omnibus Agreement
Interpretation
As used in this Agreement, unless a clear contrary intention appears:
(a) any reference to the singular includes the plural and vice versa, any reference to natural persons includes legal persons and vice versa, and any reference to a gender includes the other gender;
(b) the words hereof, hereby, herein and hereunder and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;
(c) any reference to Articles, Sections and Exhibits are, unless otherwise stated, references to Articles, Sections and Exhibits of or to this Agreement and references in any Section or definition to any clause means such clause of such Section or definition. The headings in this Agreement have been inserted for convenience only and shall not be taken into account in its interpretation;
(d) reference to any agreement (including this Agreement), document or instrument means such agreement, document, or instrument as amended, modified or supplemented and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of this Agreement;
(e) the Exhibits hereto form an integral part of this Agreement and are equally binding therewith. Any reference to this Agreement shall include such Exhibits;
(f) references to a Person shall include any permitted assignee or successor to such Party in accordance with this Agreement and reference to a Person in a particular capacity excludes such Person in any other capacity;
(g) if any period is referred to in this Agreement by way of reference to a number of days, the days shall be calculated exclusively of the first and inclusively of the last day unless the last day falls on a day that is not a Business Day in which case the last day shall be the next succeeding Business Day;
(h) the use of or is not intended to be exclusive unless explicitly indicated otherwise;
(i) references to $ or to dollars shall mean the lawful currency of the United States of America; and
(j) the words includes, including, or any derivation thereof shall mean including without limitation or including, but not limited to.
C-1
Exhibit D
to
Fourteenth Amended and Restated Omnibus Agreement
Asset Indemnification Summary
Part 1: Transferred Assets:
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
|||||||
TRANSFERRED
|
HFC
(Expiration Date) |
HEP
|
RIGHT-OF-WAY |
ADDITIONAL
|
OPERATIONAL INDEMNITY |
RIGHT OF
FIRST
|
INCLUDES
|
|||||||
Indemnity from HFC to HEP for Pre-Closing Covered Environmental Losses under Section 3.2(a) / Aggregate cap on HFC environmental indemnity in Section 3.1(b) (expiration date of indemnity) |
Indemnity from HEP to HFC for Post-Closing Covered Environmental Losses under Section 3.4(a) |
Right-of-Way Indemnity under Sections 3.2(a)(iii) and 3.2(a)(iv) (expiration date of indemnity) |
Additional Indemnities under Section 3.2(a)(vi) (expiration date of indemnity) 1 | Additional Indemnities under Section 3.5 | Right of First Refusal under Article V | |||||||||
2004 Product | $15,000,000 | ü | ü | ü | ü | ü | No | |||||||
Pipelines, Terminal and Related Assets (July 13, 2004) |
(July 13, 2014) | (July 13, 2014) | (July 13, 2009) | |||||||||||
8 and 10 Lovington/Artesia Intermediate Pipelines (June 1, 2009) |
$2,500,000 (June 1, 2019) | ü |
ü (June 1, 2019) |
ü (June 1, 2014) |
ü | ü | No |
1 | Notification of Claim must be provided prior to date noted. |
D-1
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
|||||||
TRANSFERRED
CLOSING DATE |
HFC ENVIRONMENTAL (Expiration Date) |
HEP
|
RIGHT-OF-WAY |
ADDITIONAL
|
OPERATIONAL INDEMNITY |
RIGHT OF
FIRST
|
INCLUDES
|
|||||||
2008 Crude Pipelines, Tanks and Related Assets (March 1, 2008) |
$7,500,000 (March 1, 2023) |
ü |
ü (March 1, 2023) |
ü (March 1, 2013) |
ü | ü | Yes | |||||||
16 Lovington/Artesia Intermediate Pipeline (June 1, 2009) |
None | ü |
ü (June 1, 2019) |
ü (June 1, 2014) |
ü | ü | No | |||||||
Tulsa Transferred Assets (August 1, 2009) |
None | None | None | None | None | None 2 | No | |||||||
Beeson Pipeline (December 1, 2009) |
None | ü |
ü (December 1, 2019) |
ü (December 1, 2014) |
ü | ü | No | |||||||
Roadrunner Pipeline (December 1, 2009) |
None | ü |
ü (December 1, 2019) |
ü (December 1, 2014) |
ü | ü | No | |||||||
Additional Lovington Assets (March 31, 2010) |
$15,000,000 (March 31, 2020) |
ü |
ü (March 31, 2020) |
ü (March 31, 2015) |
ü | ü | No | |||||||
Additional Tulsa East Assets (March 31, 2010) |
unlimited(no expiration) | None | None | None | None | ü | No |
2 | Right of first refusal granted to an Affiliate of HFC with respect to the Tulsa Transferred Assets is contained in the Purchase Option Agreement. |
D-2
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
|||||||
TRANSFERRED
|
HFC ENVIRONMENTAL (Expiration Date) |
HEP
|
RIGHT-OF-WAY |
ADDITIONAL
INDEMNITIES |
OPERATIONAL INDEMNITY |
RIGHT OF
FIRST REFUSAL |
INCLUDES
|
|||||||
Sinclair Transferred Assets (October 19, 2009) | None | None | None | None | None | ü | Yes | |||||||
Tulsa Interconnecting Pipelines (August 31, 2011) | None | ü | (August 31, 2021) | (August 31, 2016) | ü | ü |
No |
|||||||
Cheyenne Assets (November 1, 2011) |
$15,000,000 (November 1, 2021) |
ü |
ü (November 1, 2021) |
ü
(November 1, 2016) |
ü | ü | Yes | |||||||
El Dorado Assets (November 1, 2011) |
$15,000,000 (November 1, 2021) |
ü |
ü (November 1, 2021) |
ü
(November 1, 2016) |
ü | ü | Yes | |||||||
UNEV Pipeline (July 12, 2012) | None | ü |
ü (July 12, 2022) |
ü
(July 12, 2017) |
ü | None 3 | No | |||||||
El Dorado Refinery Assets (November 1, 2015) |
$15,000,000 (November 1, 2025) |
ü |
ü (November 1, 2025) |
ü
(November 1, 2020) |
ü | ü | No | |||||||
Osage (February 22, 2016) | None | None | None | None | None | None 4 | No |
3 | However, the right of first refusal includes the equity interests of HEP UNEV Holdings LLC, HEP UNEV Pipeline LLC and UNEV Pipeline, LLC then owned directly or indirectly by the HEP Entities; provided, however, the right of first refusal on the equity interests of UNEV Pipeline, LLC is subject to any rights of the other member(s) of UNEV Pipeline, LLC. |
4 | However, the right of first refusal includes the equity interests of El Dorado Osage and Osage then owned directly or indirectly by the HEP Entities; provided, however, the right of first refusal on the equity interests of Osage is subject to any rights of the other member(s) of Osage. |
D-3
Part 2: Other Assets:
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) | |||||||
OTHER ASSET AND CLOSING DATE |
HFC ENVIRONMENTAL (Expiration Date) |
HEP ENVIRONMENTAL |
RIGHT-OF-WAY |
ADDITIONAL INDEMNITIES |
OPERATIONAL INDEMNITY |
RIGHT OF FIRST REFUSAL |
INCLUDES
TRANSFERRED TANKS |
|||||||
Indemnity from HFC to HEP for Pre-Closing Covered Environmental Losses under Section 3.2(a) / Aggregate cap on HFC environmental indemnity in Section 3.1(b) (expiration date of indemnity) |
Indemnity from HEP to HFC for Post-Closing Covered Environmental Losses under Section 3.4(a) |
Right-of-Way Indemnity under Sections 3.2(a)(iii) and 3.2(a)(iv) (expiration date of indemnity) |
Additional Indemnities under Section 3.2(a)(vi)(A) (expiration date of indemnity) 1 | Additional Indemnities under Section 3.5 | Right of First Refusal under Article V | |||||||||
Malaga Pipeline System (July 16, 2013, as amended by that certain Amended and Restated Transportation Services Agreement dated September 26, 2014) |
None 5 | ü | None | None | ü | ü | No | |||||||
El Dorado New Tank (Tank 647) (January 7, 2014) |
None | ü |
ü (January 7, 2024) |
None | ü | ü | No | |||||||
Artesia Railyard Facility (November 1, 2014) | None | ü | None | None | ü | ü | No | |||||||
El Dorado Terminal (March 6, 2015) |
None | ü | None | None | ü | ü | No | |||||||
Beeson to Lovington System Expansion (March 12, 2015) | None | ü | None | None | ü | ü | No | |||||||
Artesia Blending Facility (March 12, 2015) |
None | ü |
ü (March 12, 2025) |
None | ü | ü | No | |||||||
Cheyenne New Tank (Tank 117) (December 4, 2014) |
None | ü |
ü (December 4, 2029) |
None | ü | ü | No | |||||||
El Dorado New Tank (Tank 643) (February 4, 2014) |
None | ü |
ü (February 4, 2029) |
None | ü | ü | No |
5 | However, Section 3.1(a) covers the 8 pipeline extending 50 miles from White City Station that was formerly used as a refined products pipeline that was conveyed to HEP as part of the 2004 Product Pipelines, Terminal and Related Assets. |
D-4
Exhibit E
to
Fourteenth Amended and Restated Omnibus Agreement
Administrative Fee
Amount of Annual Administrative Fee | ||||
Years beginning July 13, 2004 through June 30, 2007 |
$ | 2,000,000 | ||
Years beginning July 1, 2007 through February 29, 2008 |
$ | 2,100,000 | ||
Years beginning from and after March 1, 2008 through December 31, 2014 |
$ | 2,300,000 | ||
Years beginning January 1, 2015 through December 31, 2015 |
$ | 2,380,500 | ||
Years beginning January 1, 2016 |
$ | 2,464,000 |
General and Administrative Services
(1) | executive services |
(2) | finance, including treasury, and administration services |
(3) | information technology services |
(4) | legal services |
(5) | corporate health, safety and environmental services |
(6) | human resources services |
(7) | procurement |
E-1
Exhibit 10.5
Execution Version
AMENDED AND RESTATED
MASTER THROUGHPUT AGREEMENT
(including Tankage and Loading Racks)
by and between
HOLLYFRONTIER REFINING & MARKETING LLC
and
HOLLY ENERGY PARTNERS-OPERATING, L.P.
Effective as of February 22, 2016
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS AND INTERPRETATIONS |
2 | |||||
1.1 |
D EFINITIONS |
2 | ||||
1.2 |
I NTERPRETATION |
2 | ||||
ARTICLE 2 AGREEMENT TO USE SERVICES |
2 | |||||
2.1 |
I NTENT |
2 | ||||
2.2 |
M INIMUM R EVENUE C OMMITMENTS |
2 | ||||
2.3 |
M EASUREMENT OF S HIPPED V OLUMES |
3 | ||||
2.4 |
V OLUMETRIC G AINS AND L OSSES ; L INE F ILL ; H IGH -API O IL S URCHARGE |
3 | ||||
2.5 |
O BLIGATIONS OF HEP O PERATING |
3 | ||||
2.6 |
D RAG R EDUCING A GENTS AND A DDITIVES |
4 | ||||
2.7 |
C HANGE IN THE D IRECTION ; P RODUCT S ERVICE OR O RIGINATION AND D ESTINATION OF THE P IPELINE S YSTEM |
4 | ||||
2.8 |
N OTIFICATION OF U TILIZATION |
5 | ||||
2.9 |
S CHEDULING AND A CCEPTING M OVEMENT |
5 | ||||
2.10 |
T AXES |
5 | ||||
2.11 |
T IMING OF P AYMENTS |
5 | ||||
2.12 |
I NCREASES IN T ARIFF R ATES |
5 | ||||
2.13 |
R EMOVAL OF T ANK FROM S ERVICE |
5 | ||||
2.14 |
N O G UARANTEED M INIMUM |
5 | ||||
ARTICLE 3 AGREEMENT TO REMAIN SHIPPER |
6 | |||||
ARTICLE 4 NOTIFICATION OF REFINERY SHUT-DOWN OR RECONFIGURATION |
6 | |||||
ARTICLE 5 FORCE MAJEURE |
6 | |||||
ARTICLE 6 AGREEMENT NOT TO CHALLENGE PIPELINE TARIFFS |
7 | |||||
ARTICLE 7 EFFECTIVENESS AND TERM |
7 | |||||
ARTICLE 8 RIGHT TO ENTER INTO A NEW AGREEMENT |
7 | |||||
8.1 |
N EGOTIATION P URSUANT TO W RITTEN N OTICE |
7 | ||||
8.2 |
N EGOTIATION IN THE A BSENCE OF W RITTEN N OTICE |
8 | ||||
ARTICLE 9 NOTICES |
8 | |||||
ARTICLE 10 DEFICIENCY PAYMENTS |
8 | |||||
10.1 |
D EFICIENCY N OTICE ; D EFICIENCY P AYMENTS |
8 | ||||
10.2 |
D ISPUTED D EFICIENCY N OTICES |
8 | ||||
10.3 |
P AYMENT OF A MOUNTS N O L ONGER D ISPUTED |
9 | ||||
10.4 |
C ONTRACT Q UARTERS I NDEPENDENT |
9 | ||||
ARTICLE 11 RIGHT OF FIRST REFUSAL |
9 | |||||
ARTICLE 12 INDEMNITY; LIMITATION OF DAMAGES |
9 | |||||
12.1 |
I NDEMNITY ; L IMITATION OF L IABILITY |
9 | ||||
12.2 |
S URVIVAL |
9 | ||||
ARTICLE 13 MISCELLANEOUS |
10 | |||||
13.1 |
A MENDMENTS AND W AIVERS |
10 |
i
13.2 |
S UCCESSORS AND A SSIGNS |
10 | ||||
13.3 |
S EVERABILITY |
10 | ||||
13.4 |
C HOICE OF L AW |
10 | ||||
13.5 |
R IGHTS OF L IMITED P ARTNERS |
10 | ||||
13.6 |
F URTHER A SSURANCES |
10 | ||||
13.7 |
H EADINGS |
11 | ||||
ARTICLE 14 GUARANTEE BY HOLLYFRONTIER |
11 | |||||
14.1 |
P AYMENT G UARANTY |
11 | ||||
14.2 |
G UARANTY A BSOLUTE |
11 | ||||
14.3 |
W AIVER |
12 | ||||
14.4 |
S UBROGATION W AIVER |
12 | ||||
14.5 |
R EINSTATEMENT |
12 | ||||
14.6 |
C ONTINUING G UARANTY |
12 | ||||
14.7 |
N O D UTY TO P URSUE O THERS |
12 | ||||
ARTICLE 15 GUARANTEE BY THE PARTNERSHIP |
12 | |||||
15.1 |
P AYMENT AND P ERFORMANCE G UARANTY |
12 | ||||
15.2 |
G UARANTY A BSOLUTE |
12 | ||||
15.3 |
W AIVER |
13 | ||||
15.4 |
S UBROGATION W AIVER |
13 | ||||
15.5 |
R EINSTATEMENT |
13 | ||||
15.6 |
C ONTINUING G UARANTY |
14 | ||||
15.7 |
N O D UTY TO P URSUE O THERS |
14 |
EXHIBITS
Exhibit A Definitions |
Exhibit B Interpretation |
Exhibit C Applicable Assets, Product, Minimum Capacity Commitment, Tariffs, Tariff Adjustments and Applicable Terms |
Exhibit D Measurement of Shipped Volumes |
Exhibit E - Volumetric Gains and Losses; Line Fill; High-API Oil Surcharge |
Exhibit F - Increases in Tariff Rates as a Result of Changes in Applicable Law |
Exhibit G - Special Provisions: Malaga Pipeline System |
Exhibit G-1 - Map of Pipeline System and Pipeline System Capacity by Segment |
Exhibit G-2 Construction Projects |
Exhibit G-3 Devon Lease Connections |
Exhibit H Special Provisions: El Dorado Assets |
Exhibit H-1 - El Dorado Loading Rack |
Exhibit H-2 El Dorado Tankage |
Exhibit H-3 Specifications for New Tank |
Exhibit I - Special Provisions: Cheyenne Assets |
Exhibit I-1 - Cheyenne Loading Rack |
Exhibit I-2 - Cheyenne Receiving Assets |
Exhibit I-3 Cheyenne Tankage |
Exhibit I-4 Specification for New Tanks |
Exhibit J Special Provisions: Tulsa East Assets |
ii
Exhibit J-1 - Tulsa Group 1 Loading Rack |
Exhibit J-2 - Tulsa Group 1 Pipeline |
Exhibit J-3 Tulsa Group 1 Tankage |
Exhibit J-4 Tulsa Group 2 Loading Rack |
Exhibit J-5 Tulsa Group 2 Tankage |
Exhibit K Special Provisions: El Dorado Crude Tank Farm Assets |
Exhibit K-1 El Dorado Crude Tankage and Jayhawk Tankage |
Exhibit K-2 El Dorado Terminal Quality Specifications |
iii
AMENDED AND RESTATED
MASTER THROUGHPUT AGREEMENT
This Amended and Restated Master Throughput Agreement (this Agreement ) is dated as of February 22, 2016, to be effective as of the Effective Time (as defined below) by and between HOLLYFRONTIER REFINING & MARKETING LLC ( HFRM ) and HOLLY ENERGY PARTNERS-OPERATING, L.P. ( HEP Operating ), and amends and restates in its entirety the Master Throughput Agreement dated October 16, 2015 (the Original Master Throughput Agreement ). Each of HFRM and HEP Operating are collectively referred to herein as the Parties .
RECITALS:
A. In connection with that certain Pipeline Throughput Agreement (Roadrunner), dated as of December 1, 2009, between HFRM (as successor in interest to Navajo Refining Company, L.L.C. ( Navajo )) and HEP Operating, HEP Operating agreed to provide certain transportation services for Navajo on the Roadrunner Pipeline, as defined below.
B. In connection with that certain Loading Rack Throughput Agreement (Lovington), dated as of March 31, 2010, between HFRM (as successor in interest to Navajo) and HEP Operating (as successor in interest to Holly Energy Storage-Lovington LLC), HEP Operating agreed to provide certain loading services for Navajo with respect to the Lovington Loading Rack, as defined below.
C. In connection with that Second Amended and Restated Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East), dated as of August 31, 2011, between HFRM (as successor in interest to Holly Refining and Marketing-Tulsa LLC) and HEP Operating (as successor in interest to HEP Tulsa LLC and Holly Energy Storage - Tulsa LLC), HEP Operating agreed to provide certain transportation, storage and loading services to HFRM with respect to the Tulsa Interconnecting Pipelines, as defined below.
D. In connection with that certain First Amended and Restated Tankage, Loading Rack and Crude Oil Receiving Throughput Agreement (Cheyenne), dated as of January 11, 2012 between HFRM (as successor in interest to Frontier Refining LLC) and HEP Operating (as successor in interest to Cheyenne Logistics LLC), HEP Operating agreed to provide certain storage and loading services to HFRM with respect to the Cheyenne Assets, as defined below.
E. In connection with that certain Second Amended and Restated Pipeline Delivery, Tankage and Loading Rack Throughput Agreement (El Dorado), dated as of January 7, 2014 between HFRM (as successor in interest to Frontier El Dorado Refining LLC) and HEP Operating (as successor in interest to El Dorado Logistics LLC), HEP Operating agreed to provide certain transportation, storage and loading services to HFRM with respect to the El Dorado Assets, as defined below.
F. In connection with that certain Amended and Restated Transportation Services Agreement (Malaga), dated September 26, 2014, between HFRM and HEP Operating, HEP Operating agreed to provide certain transportation services to HFRM with respect to the Malaga Pipeline System, as defined below.
G. HEP Operating owns certain other pipelines, tankage and other assets which it desires to utilize to provide transportation, storage and loading services for HFRM.
1
H. The Parties entered into the Original Master Throughput Agreement, pursuant to which HEP Operating agreed to provide certain transportation, storage and loading services with respect to the Applicable Assets, as defined below, and pursuant to which the Parties agreed that such services would no longer be provided pursuant to the Prior Agreements.
I. The Parties now desire to amend and restate the Original Master Throughput Agreement in its entirety as follows.
NOW, THEREFORE, in consideration of the covenants and obligations contained herein, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATIONS
1.1 Definitions . Capitalized terms used throughout this Agreement and not otherwise defined herein shall have the meanings set forth on Exhibit A .
1.2 Interpretation . Matters relating to the interpretation of this Agreement are set forth on Exhibit B .
ARTICLE 2
AGREEMENT TO USE SERVICES
2.1 Intent . The Parties intend to be strictly bound by the terms set forth in this Agreement, which sets forth revenues to HEP Operating to be paid by HFRM, and requires HEP Operating to provide certain transportation, storage and loading services to HFRM. The principal objective of HEP Operating is for HFRM to meet or exceed its obligations with respect to the Minimum Revenue Commitment. The principal objective of HFRM is for HEP Operating to provide services to HFRM in a manner that enables HFRM to transport, store and/or load Products on, in or at the Applicable Assets. It is the Parties further intent that the terms and provisions of this Agreement shall be effective and govern from and after the Effective Time. Any matter first arising prior to the Effective Time shall be governed by the respective agreement relating thereto referenced in the Recitals.
2.2 Minimum Revenue Commitments . During the Applicable Term and subject to the terms and conditions of this Agreement, and as further set forth in Exhibit C , HFRM agrees as follows:
(a) Capacity and Revenue Commitment . Subject to Article 4 , HFRM shall pay HEP Operating Applicable Tariffs for use of the Applicable Assets and associated services as provided herein that result in the payment of an amount that will satisfy the Minimum Revenue Commitment in exchange for HEP Operating providing HFRM a minimum capacity in each of the Applicable Assets equal to the Minimum Capacity Commitment. The Minimum Revenue Commitment shall be the aggregate sum of the revenue to HEP Operating for each Contract Quarter determined by multiplying the Minimum Throughput Commitment for each Applicable Asset for such Contract Quarter, by the Base Tariff for such Applicable Asset in effect for such Contract Quarter. The Minimum Capacity Commitment means the amount set forth on Exhibit C for each Applicable Asset.
(b) Applicable Tariffs . HFRM will pay the Applicable Base Tariffs for all quantities of Product transported, stored or loaded at, on or through the Applicable Assets in each Contract Quarter during the Applicable Term up to and including the Applicable Incentive Tariff Threshold for such Applicable Asset set forth on Exhibit C , shall pay the Applicable Incentive Tariff for quantities in excess of the Incentive Tariff Threshold and, if applicable, shall pay the Excess Tariff for the Applicable Asset for quantities in excess of the Excess Tariff Threshold.
2
(c) Adjustment of Applicable Tariffs . The Applicable Tariffs shall be adjusted in the manner set forth on Exhibit C . To evidence the Parties agreement to each adjusted Applicable Tariff, the Parties may, but shall not be required to, execute an amended, modified, revised or updated Exhibit C and attach it to this Agreement. If executed, such amended, modified, revised or updated Exhibit C shall be sequentially numbered ( e.g . Exhibit C-1 , Exhibit C-2 , etc .), dated and appended as an additional exhibit to this Agreement and shall replace the prior version of Exhibit C in its entirety, after its date of effectiveness.
(d) Reduction for Non-Force Majeure Operational Difficulties . If HFRM is unable to transport, store and/or load on, in or at any Applicable Asset the volumes of Products required to meet the Minimum Revenue Commitment for such Applicable Asset for a particular Contract Quarter as a result of HEP Operatings operational difficulties, prorationing, or the inability to provide sufficient capacity for the Minimum Throughput Commitment, then the Minimum Revenue Commitment applicable to the Contract Quarter during which HFRM is unable to transport, store and/or load such volumes of Products will be reduced by an amount equal to: (A) the volume of Products that HFRM was unable to transport, store and/or load on, in or at such Applicable Assets (but not to exceed the Minimum Throughput Commitment), as a result of HEP Operatings operational difficulties, prorationing or inability to provide sufficient capacity on the Applicable Assets to achieve the Minimum Throughput Commitment, multiplied by (B) the applicable Base Tariff. This Section 2.2(d) shall not apply in the event HEP Operating gives notice of a Force Majeure event in accordance with the terms of the Omnibus Agreement, in which case the Minimum Revenue Commitment shall be suspended to the extent contemplated in Article IX of the Omnibus Agreement.
(e) Pro-Rationing for Partial Periods . Notwithstanding the other portions of this Section 2.2 , in the event that the Effective Time is any date other than the first day of a Contract Quarter, then the Minimum Revenue Commitment, Minimum Throughput Commitment, and any applicable Incentive Tariffs for the initial partial Contract Quarter shall be prorated based upon the number of days actually in such partial Contract Quarter. Similarly, notwithstanding the other portions of this Section 2.2 if the end of the Applicable Term is on a day other than the last day of a Contract Quarter, then the Minimum Revenue Commitment, Minimum Throughput Commitment, and any applicable Incentive Tariff for the final partial Contract Quarter shall be prorated based upon the number of days actually in such partial Contract Quarter and the initial Contract Quarter.
2.3 Measurement of Shipped Volumes . Matters with respect to the measurement of shipped volumes are set forth on Exhibit D .
2.4 Volumetric Gains and Losses; Line Fill; High-API Oil Surcharge . Matters with respect to volumetric gains and losses, line fill and high-API oil surcharges are set forth on Exhibit E .
2.5 Obligations of HEP Operating . During the Applicable Term and subject to the terms and conditions of this Agreement, HEP Operating agrees to:
(a) own or lease, operate and maintain (directly or through a Subsidiary) the Applicable Assets and all related assets necessary to handle the applicable Products from HFRM;
(b) make available for HFRMs use the capacity of the Applicable Assets of at least the Minimum Capacity Commitment;
3
(c) provide the services required under this Agreement and perform all operations relating to the Applicable Assets, including tank gauging, tank maintenance, loading trucks, interaction with third party pipelines and customer interface for access agreements (as applicable) and performance of all operations and maintenance for the Applicable Assets;
(d) maintain adequate property and liability insurance covering the Applicable Assets and any related assets owned by HEP Operating or its affiliates and necessary for the operation of the Applicable Assets; and
(e) at the request of HFRM, and subject in any case to any applicable common carrier proration duties and commitments to other third-party shippers, use commercially reasonable efforts to transport, store and/or load on the Applicable Assets for HFRM each month during the Applicable Term the quantity of Products that HFRM designates from time to time, but in no event less than the Minimum Capacity Commitment.
Notwithstanding the first sentence of this Section 2.5 , subject to the dispute resolution provisions of the Omnibus Agreement and with respect to the Tulsa Applicable Assets, the Tulsa Purchase Agreements, HEP Operating or its Affiliate is free to sell any of its assets, including any Applicable Assets, and HFRM is free to merge with another entity and to sell all of its assets or equity to another entity at any time.
2.6 Drag Reducing Agents and Additives . If HEP Operating determines that adding drag reducing agents ( DRA ) to the Products is reasonably required to move the Products in the quantities necessary to meet HFRMs schedule or as may be otherwise be required to safely move such quantities of Products or that additives should be used in the operation of the Applicable Assets, HEP Operating shall provide HFRM with an analysis of the proposed cost and benefits thereof. In the event that HFRM agrees to use such additives as proposed by HEP Operating, HFRM shall reimburse HEP Operating for the costs of adding any DRA or additives. If HEP Operating reasonably determines that additives or chemicals must be added to any of the pipelines included in the Applicable Assets to prevent or control internal corrosion of the pipe, then HFRM shall reimburse HEP Operating for the direct cost of the chemical and associated injection equipment.
2.7 Change in the Direction; Product Service or Origination and Destination of the Pipeline System . Without HFRMs prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), HEP Operating shall not (i) reverse the direction of flow of any Pipeline; (ii) change, alter or modify the Product service of any Pipeline; or (iii) change, alter or modify the origination or destination of any Pipeline; provided , however , that HEP Operating may take any necessary emergency action to prevent or remedy a release of Products from a Pipeline without obtaining the consent required by this Section 2.7 . HFRM shall have the right to reverse the direction of flow of any segment of a Pipeline where it is the sole shipper of Products if, in each case, HFRM agrees to (1) reimburse HEP Operating for the additional costs and expenses incurred by HEP Operating as a result of such change in direction (both to reverse and re-reverse); (2) reimburse HEP Operating for all costs arising out of HEP Operatings inability to perform under any transportation service contract due to the reversal of the direction of flow of the Pipeline; and (3) pay the Applicable Tariffs in accordance with this Agreement, for any such flow reversal. With respect to the Malaga Pipeline System, the foregoing shall apply regardless of whether the Product shipped in such manner reaches an injection point for the Centurion Pipeline or Plains Pipeline. HEP Operating shall not acquire any right, title or interest in the Products, and all title to and ownership of the Products while the same is in the possession of HEP Operating shall be and shall remain exclusively in HFRM. HEP Operating shall not represent itself to any third party as the owner of any of the Products and shall hold the same in trust for HFRM. HFRM shall advise HEP
4
Operating in writing of any change in Product ownership while in the Applicable Assets. If any of HFRMs Product is sold, exchanged, or otherwise changes ownership while in the Applicable Assets, HFRM shall nonetheless be responsible for the terms and conditions of this Agreement the same as if Products had been owned by HFRM.
2.8 Notification of Utilization . Upon request by HEP Operating, HFRM will provide to HEP Operating written notification of HFRMs reasonable good faith estimate of its anticipated future utilization of the Applicable Assets as soon as reasonably practicable after receiving such request.
2.9 Scheduling and Accepting Movement . HEP Operating will use its reasonable commercial efforts to schedule movement and accept movements of Products in a manner that is consistent with the historical dealings between the Parties and their Affiliates, as such dealings may change from time to time.
2.10 Taxes . HFRM will pay all taxes, import duties, license fees and other charges by any Governmental Authority levied on or with respect to the Products handled by HFRM for transportation, storage and/or loading by HEP Operating. Should either Party be required to pay or collect any taxes, duties, charges and or assessments pursuant to any Applicable Law or authority now in effect or hereafter to become effective which are payable by the any other Party pursuant to this Section 2.10 the proper Party shall promptly reimburse the other Party therefor.
2.11 Timing of Payments . HFRM will make payments to HEP Operating by electronic payment with immediately available funds on a monthly basis during the Applicable Term with respect to services rendered or reimbursable costs or expenses incurred by HEP Operating under this Agreement in the prior month. Payments not received by HEP Operating on or prior to the tenth day following the invoice date will accrue interest at the Prime Rate from the applicable payment date until paid.
2.12 Increases in Tariff Rates . If new Applicable Laws are enacted that require HEP Operating to make capital expenditures with respect to the Applicable Assets, HEP Operating may amend the Applicable Tariffs in the manner set forth in Exhibit F , in order to recover HEP Operatings cost of complying with such new Applicable Laws (as determined in good faith and including a reasonable return). HFRM and HEP Operating shall use their reasonable commercial efforts to comply with such new Applicable Laws, and shall negotiate in good faith to mitigate the impact of such new Applicable Laws and to determine the amount of the new Applicable Tariff rates. If HFRM and HEP Operating are unable to agree on the amount of the new Applicable Tariff rates that HEP Operating will charge, such Applicable Tariff rates will be resolved in the manner provided for in the Omnibus Agreement. Any other applicable exhibit to this Agreement will be updated, amended or revised, as applicable, in accordance with this Agreement to reflect any changes in Applicable Tariff rates established in accordance with this Section 2.12 .
2.13 Removal of Tank from Service . The Parties agree that if a tank included in the Applicable Assets is removed from service, then HEP Operating will not be required to utilize, operate or maintain such tank or provide the services required under this Agreement with respect to such tank (and there will be no adjustment to the applicable Minimum Revenue Commitment). The Parties acknowledge that provisions relating to the inspection, repair and maintenance of tanks included in the Applicable Assets are set forth in the Master Lease and Access Agreement, and such provisions are in addition to, and not in substitution of, the terms set forth in this Section 2.13 .
2.14 No Guaranteed Minimum . Notwithstanding anything to the contrary set forth in this Agreement, there is no requirement that HFRM deliver any minimum quantity of Product for transport,
5
storage, handling or loading on, over or in the Applicable Assets, it being understood that HFRMs obligation for failing to ship, store or load sufficient quantities of Product to satisfy the Minimum Revenue Commitment is to make Deficiency Payments as provided in Article 10 .
ARTICLE 3
AGREEMENT TO REMAIN SHIPPER
With respect to any Product that is transported, stored or loaded in connection with any of the Applicable Assets by HFRM, HFRM agrees that it will continue acting in the capacity of the shipper of any such Product for its own account at all times that such Product is being transported, stored, handled or loaded in the Applicable Assets.
ARTICLE 4
NOTIFICATION OF REFINERY SHUT-DOWN OR RECONFIGURATION
If a Refinery shuts down or the Refinery owner reconfigures the Refinery or any portion of the Refinery (excluding planned maintenance turnarounds) and HFRM reasonably believes in good faith that such shut down or reconfiguration will jeopardize its ability to satisfy its applicable Minimum Revenue Commitments under this Agreement, then within 90 days of the delivery of the written notice of the planned shut down or reconfiguration, HFRM shall (A) propose a new Minimum Revenue Commitment under this Agreement, as applicable, such that the ratio of the new applicable Minimum Revenue Commitment under this Agreement over the anticipated production level following the shut down or reconfiguration will be approximately equal to the ratio of the original applicable Minimum Revenue Commitment under this Agreement over the original production level and (B) propose the date on which the new Minimum Revenue Commitment under this Agreement shall take effect. Unless objected to by HEP Operating within 60 days of receipt by HEP Operating of such proposal, such new Minimum Revenue Commitment under this Agreement shall become effective as of the date proposed by HFRM. To the extent that HEP Operating does not agree with HFRMs proposal, any changes in HFRMs obligations under this Agreement, or the date on which such changes will take effect, will be determined pursuant to the dispute resolution provisions of the Omnibus Agreement. Any applicable exhibit to this Agreement will be updated, amended or revised, as applicable, in accordance with this Agreement to reflect any change in the applicable Minimum Revenue Commitment under this Agreement agreed to in accordance with this Section 4.1 .
ARTICLE 5
FORCE MAJEURE
The rights and obligations of the Parties upon the occurrence of an event of Force Majeure will be determined in the manner set forth in the Omnibus Agreement; provided that (a) any suspension of the obligations of the Parties under this Agreement as a result of an event of Force Majeure shall extend the Applicable Term (to the extent so affected) for a period equivalent to the duration of the inability set forth in the Force Majeure Notice, (b) HFRM will be required to pay any amounts accrued and due under this Agreement at the time of the Force Majeure event, and (c) if a Force Majeure event prevents either Party from performing substantially all of their respective obligations under this Agreement relating to a group of Applicable Assets for a period of more than one (1) year, this Agreement may be terminated as to such Applicable Assets (but not as to unaffected Applicable Assets) by either Party providing written notice thereof to the other Party.
6
ARTICLE 6
AGREEMENT NOT TO CHALLENGE PIPELINE TARIFFS
HFRM agrees to any tariff rate changes for Pipelines in accordance with this Agreement. HFRM agrees (a) not to challenge, nor to cause their Affiliates to challenge, nor to encourage or recommend to any other Person that it challenge, or voluntarily assist in any way any other Person in challenging, in any forum, tariffs (including joint tariffs) of HEP Operating (or its Affiliates) that HEP Operating (or its Affiliate) has filed or may file containing rates, rules or regulations that are in effect at any time during the Applicable Term and regulate the transportation of the Products on any Pipelines, and (b) not to protest or file a complaint, nor cause their Affiliates to protest or file a complaint, nor encourage or recommend to any other Person that it protest or file a complaint, or voluntarily assist in any way any other Person in protesting or filing a complaint, with respect to regulatory filings that HEP Operating or its Affiliate has made or may make at any time during the Applicable Term to change tariffs (including joint tariffs) for transportation of Products on any Pipelines, in each case so long as such tariffs, regulatory filings or rates changed do not conflict with the terms of this Agreement.
ARTICLE 7
EFFECTIVENESS AND APPLICABLE TERM
This Agreement shall be effective as to each group of Applicable Assets as of the Effective Time as set forth on Exhibit C and shall terminate with respect to each group of Applicable Assets as set forth on Exhibit C , unless extended by written mutual agreement of the Parties or as set forth in Article 8 (each, the Applicable Term ). The Party desiring to extend this Agreement with respect to any group of Applicable Assets pursuant to this Article 7 shall provide prior written notice to the other Party of its desire to so extend this Agreement; such written notice shall be provided not more than twenty-four (24) months and not less than the later of twelve (12) months prior to the date of termination of the Applicable Term or ten (10) days after receipt of a written request from the other Party (which request may be delivered no earlier than twelve (12) months prior to the date of termination of the Applicable Term) to provide any such notice or lose such right.
ARTICLE 8
RIGHT TO ENTER INTO A NEW AGREEMENT
8.1. Negotiation Pursuant to Written Notice . In the event that HFRM provides prior written notice to HEP Operating of the desire of HFRM to extend this Agreement for a specific group of Applicable Assets by written mutual agreement of the Parties pursuant to Article 7 , the Parties shall negotiate in good faith to extend this Agreement by written mutual agreement with respect to such specific group of Applicable Assets, but, if such negotiations fail to produce a written mutual agreement for extension by a date six months prior to the termination date for such group of Applicable Assets, then HEP Operating shall have the right to negotiate to enter into one or more throughput, tankage or transportation services agreements for HFRMs Minimum Capacity Commitment for such Applicable Assets with one or more third parties to begin after the date of termination, provided , however , that until the end of one year following termination without renewal of this Agreement for such group of Applicable Assets, HFRM will have the right to enter into a new throughput, tankage or transportation services or transportation services agreement with HEP Operating with respect to its Minimum Capacity Commitment on the date of termination on commercial terms that substantially match the terms upon which HEP Operating proposes to enter into an agreement with a third party for similar services with respect to all or a material portion of such capacity of such group of Applicable Assets. In such circumstances, HEP Operating shall give HFRM at least forty-five (45) days prior written notice of any proposed new throughput agreement with a third party, and such notice shall inform HFRM of the fee
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schedules, tariffs, duration and any other material terms of the proposed third party agreement. HFRM shall have forty-five (45) days following receipt of such notice to agree to the terms specified in the notice or HFRM shall lose the rights specified by this Section 8.1 with respect to the capacity that is the subject of such notice.
8.2. Negotiation in the Absence of Written Notice . In the event that HFRM fails to provide prior written notice to HEP Operating of the desire of HFRM to extend this Agreement for a specific group of Applicable Assets by written mutual agreement of the Parties pursuant to Article 7 , HEP Operating shall have the right, during the period from the date of HFRMs failure to provide written notice pursuant to Article 7 to the date of termination of this Agreement, to negotiate to enter into one or more throughput, tankage or transportation services agreements for HFRMs Minimum Capacity Commitment for the such group of Applicable Assets with one or more third parties to begin after the date of termination; provided, however , that at any time during the twelve (12) months prior to the expiration of the Applicable Term, HFRM will have the right to enter into a new throughput, tankage agreement with HEP Operating with respect to its existing Minimum Capacity Commitment at such time on commercial terms that substantially match the terms upon which HEP Operating proposes to enter into an agreement with a third party for similar services with respect to all or a material portion of such capacity on such group of Applicable Assets. In such circumstances, HEP Operating shall give HFRM forty-five (45) days prior written notice of any proposed new agreement with a third party, and such notice shall inform HFRM of the fee schedules, tariffs, duration and any other material terms of the proposed third party agreement and HFRM shall have forty-five (45) days following receipt of such notice to agree to the terms specified in the notice or HFRM shall lose the rights specified by this Section 8.2 with respect to the capacity that is the subject of such notice.
ARTICLE 9
NOTICES
Any notice or other communication given under this Agreement shall be in writing and shall be provided in the manner set forth in the Omnibus Agreement.
ARTICLE 10
DEFICIENCY PAYMENTS
10.1 Deficiency Notice; Deficiency Payments . As soon as practicable following the end of each Contract Quarter under this Agreement, HEP Operating shall deliver to HFRM a written notice (the Deficiency Notice ) detailing any failure of HFRM to meet any of the Minimum Revenue Commitments set forth on Exhibit C ; provided, however , that HFRMs obligations pursuant to the Minimum Revenue Commitment shall be assessed on a quarterly basis for the purposes of this Article 10 . Notwithstanding the previous sentence, any deficiency owed by HFRM due to its failure to satisfy any Minimum Revenue Commitment, if any, set forth on Exhibit C , as to any Applicable Asset for a Contract Quarter shall be offset by any revenue owed to HEP Operating in excess of any Minimum Revenue Commitment for such Contract Quarter set forth on Exhibit C from any other Applicable Asset at the same location. The Deficiency Notice shall (i) specify in reasonable detail the nature of any deficiency and (ii) specify the approximate dollar amount that HEP Operating believes would have been paid by HFRM to HEP Operating if HFRM had complied with its Minimum Revenue Commitment obligations pursuant to this Agreement (the Deficiency Payment ). HFRM shall pay the Deficiency Payment to HEP Operating upon the later of: (A) ten (10) days after their receipt of the Deficiency Notice and (B) thirty (30) days following the end of the related Contract Quarter.
10.2 Disputed Deficiency Notices . If HFRM disagrees with the Deficiency Notice, then, following the payment of the undisputed portion of the Deficiency Payment to HEP Operating, if any,
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HFRM shall send written notice thereof regarding the disputed portion of the Deficiency Payment to HEP Operating. Thereafter, a senior officer of HollyFrontier (on behalf of HFRM) and a senior officer of the Partnership (on behalf of HEP Operating) shall meet or communicate by telephone at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary and shall negotiate in good faith to attempt to resolve any differences that they may have with respect to matters specified in the Deficiency Notice. During the 30-day period following the payment of the Deficiency Payment, HFRM shall have access to the working papers of HEP Operating relating to the Deficiency Notice. If such differences are not resolved within thirty (30) days following HFRMs receipt of the Deficiency Notice, HFRM and HEP Operating shall, within forty-five (45) days following HFRMs receipt of the Deficiency Notice, submit any and all matters which remain in dispute and which were properly included in the Deficiency Notice to dispute resolution in accordance with the Omnibus Agreement.
10.3 Payment of Amounts No Longer Disputed . If it is finally determined pursuant to this Article 10 that HFRM is required to pay any or all of the disputed portion of the Deficiency Payment, HFRM shall promptly pay such amount to HEP Operating, together with interest thereon at the Prime Rate, in immediately available funds.
10.4 Contract Quarters Independent . The fact that HFRM has exceeded or fallen short of the Minimum Revenue Commitment with respect to any Contract Quarter shall not be considered in determining whether HFRM meets, exceeds or falls short of the Minimum Revenue Commitment with respect to any other Contract Quarter, and the amount of any such excess or shortfall shall not be counted towards or against the Minimum Revenue Commitment with respect to any other Contract Quarter.
ARTICLE 11
RIGHT OF FIRST REFUSAL
The Parties acknowledge the right of first refusal of HollyFrontier with respect to the Applicable Assets other than the Tulsa Assets as provided in the Omnibus Agreement, and the right of first refusal of HollyFrontier with respect to the Tulsa Assets as provided in the Tulsa Purchase Agreements.
ARTICLE 12
INDEMNITY; LIMITATION OF DAMAGES
12.1 Indemnity; Limitation of Liability . The Parties acknowledge and agree that the provisions relating to indemnity and limitation of liability are set forth in the Omnibus Agreement. Notwithstanding anything in this Agreement or the Omnibus Agreement to the contrary and solely for the purpose of determining which of HFRM or HEP Operating shall be liable in a particular circumstance, neither HFRM or HEP Operating shall be liable to the other Party for any loss, damage, injury, judgment, claim, cost, expense or other liability suffered or incurred (collectively, Damages ) by such Party except to the extent set forth in the Omnibus Agreement and to the extent that HFRM or HEP Operating causes such Damages or owns or operates the assets or other property in question responsible for causing such Damages.
12.2 Survival . The provisions of this Article 12 shall survive the termination of this Agreement.
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ARTICLE 13
MISCELLANEOUS
13.1 Amendments and Waivers . No amendment or modification of this Agreement shall be valid unless it is in writing and signed by the Parties. No waiver of any provision of this Agreement shall be valid unless it is in writing and signed by the Party against whom the waiver is sought to be enforced. Any of the exhibits to this Agreement may be amended, modified, revised or updated by the Parties if each of the Parties executes an amended, modified, revised or updated exhibit, and attaches it to this Agreement. Such amended, modified, revised or updated exhibits shall be sequentially numbered ( e.g. Exhibit A-1 , Exhibit A-2 , etc .), dated and appended as an additional exhibit to this Agreement and shall replace the prior exhibit, in its entirety, after its date of effectiveness, except as specified therein. No failure or delay in exercising any right hereunder, and no course of conduct, shall operate as a waiver of any provision of this Agreement. No single or partial exercise of a right hereunder shall preclude further or complete exercise of that right or any other right hereunder.
13.2 Successors and Assigns . This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and permitted assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned without the prior written consent of HFRM (in the case of any assignment by HEP Operating) or HEP Operating (in the case of any assignment by HFRM), in each case, such consent is not to be unreasonably withheld or delayed; provided , however , that (i) HEP Operating may make such an assignment (including a partial pro rata assignment) to an Affiliate of HEP Operating without HFRMs consent, (ii) HFRM may make such an assignment (including a pro rata partial assignment) to an Affiliate of HFRM without HEP Operatings consent, (iii) HFRM may make a collateral assignment of its rights and obligations hereunder and/or grant a security interest in its rights and obligations hereunder, and HEP Operating shall execute an acknowledgement of such collateral assignment in such form as may from time-to-time be reasonably requested, and (iv) HEP Operating may make a collateral assignment of its rights hereunder and/or grant a security interest in its rights and obligations hereunder to a bona fide third party lender or debt holder, or trustee or representative for any of them, without HFRMs consent, if such third party lender, debt holder or trustee shall have executed and delivered to HFRM a non-disturbance agreement in such form as is reasonably satisfactory to HFRM and such third party lender, debt holder or trustee, and HFRM executes an acknowledgement of such collateral assignment in such form as may from time to time be reasonably requested. Any attempt to make an assignment otherwise than as permitted by the foregoing shall be null and void. The Parties agree to require their respective successors, if any, to expressly assume, in a form of agreement reasonably acceptable to the other Parties, their obligations under this Agreement.
13.3 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.
13.4 Choice of Law . This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.
13.5 Rights of Limited Partners . The provisions of this Agreement are enforceable solely by the Parties, 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 comply with the terms of this Agreement.
13.6 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.
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13.7 Headings . Headings of the Sections of this Agreement are for convenience of the Parties only and shall be given no substantive or interpretative effect whatsoever. All references in this Agreement to Sections are to Sections of this Agreement unless otherwise stated.
ARTICLE 14
GUARANTEE BY HOLLYFRONTIER
14.1 Payment Guaranty . HollyFrontier unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to HEP Operating the punctual and complete payment in full when due of all amounts due from HFRM under this Agreement (collectively, the HFRM Payment Obligations ). HollyFrontier agrees that HEP Operating shall be entitled to enforce directly against HollyFrontier any of the HFRM Payment Obligations.
14.2 Guaranty Absolute . HollyFrontier hereby guarantees that the HFRM Payment Obligations will be paid strictly in accordance with the terms of the Agreement. The obligations of HollyFrontier under this Agreement constitute a present and continuing guaranty of payment, and not of collection or collectability. The liability of HollyFrontier under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:
(a) any assignment or other transfer of this Agreement or any of the rights thereunder of HEP Operating;
(b) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to this Agreement;
(c) any acceptance by HEP Operating of partial payment or performance from HFRM;
(d) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to HFRM or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding;
(e) any absence of any notice to, or knowledge of, HollyFrontier, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (i) through (iv); or
(f) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.
The obligations of HollyFrontier hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the HFRM Payment Obligations or otherwise.
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14.3 Waiver . HollyFrontier hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the HFRM Payment Obligations and any requirement for HEP Operating to protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against HFRM, any other entity or any collateral.
14.4 Subrogation Waiver . HollyFrontier agrees that for so long as there is a current or ongoing default or breach of this Agreement by HFRM, HollyFrontier shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from HFRM for any payments made by HollyFrontier under this Article 14 , and HollyFrontier hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter acquire against HFRM during any period of default or breach of this Agreement by HFRM until such time as there is no current or ongoing default or breach of this Agreement by HFRM.
14.5 Reinstatement . The obligations of HollyFrontier under this Article 14 shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the HFRM Payment Obligations is rescinded or must otherwise be returned to HFRM or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of HFRM or such other entity, or for any other reason, all as though such payment had not been made.
14.6 Continuing Guaranty . This Article 14 is a continuing guaranty and shall (i) remain in full force and effect until the first to occur of the indefeasible payment in full of all of the HFRM Payment Obligations, (ii) be binding upon HollyFrontier, its successors and assigns and (iii) inure to the benefit of and be enforceable by HEP Operating and its respective successors, transferees and assigns.
14.7 No Duty to Pursue Others . It shall not be necessary for HEP Operating (and HollyFrontier hereby waives any rights which HollyFrontier may have to require HEP Operating), in order to enforce such payment by HollyFrontier, first to (i) institute suit or exhaust its remedies against HFRM or others liable on the HFRM Payment Obligations or any other person, (ii) enforce HEP Operatings rights against any other guarantors of the HFRM Payment Obligations, (iii) join HFRM or any others liable on the HFRM Payment Obligations in any action seeking to enforce this Article 14 , (iv) exhaust any remedies available to HEP Operating against any security which shall ever have been given to secure the HFRM Payment Obligations, or (v) resort to any other means of obtaining payment of the HFRM Payment Obligations.
ARTICLE 15
GUARANTEE BY THE PARTNERSHIP
15.1 Payment and Performance Guaranty . The Partnership unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to HFRM the punctual and complete payment in full when due of all amounts due from HEP Operating under this Agreement (collectively, the HEP Operating Payment Obligations ) and the punctual and complete performance of all other obligations of HEP Operating under this Agreement (collectively, the HEP Operating Performance Obligations , together with the HEP Operating Payment Obligations, the HEP Operating Obligations ). The Partnership agrees that HFRM shall be entitled to enforce directly against the Partnership any of the HEP Operating Obligations.
15.2 Guaranty Absolute . The Partnership hereby guarantees that the HEP Operating Payment Obligations will be paid, and the HEP Performance Obligations will be performed, strictly in accordance
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with the terms of this Agreement. The obligations of the Partnership under this Agreement constitute a present and continuing guaranty of payment and performance, and not of collection or collectability. The liability of the Partnership under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:
(a) any assignment or other transfer of this Agreement or any of the rights thereunder of HFRM;
(b) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to this Agreement;
(c) any acceptance by HFRM of partial payment or performance from HEP Operating;
(d) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to HEP Operating or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding;
(e) any absence of any notice to, or knowledge of, the Partnership, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (i) through (iv); or
(f) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.
The obligations of the Partnership hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the HEP Operating Obligations or otherwise.
15.3 Waiver . The Partnership hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the HEP Operating Payment Obligations and any requirement for HFRM to protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against HEP Operating, any other entity or any collateral.
15.4 Subrogation Waiver . The Partnership agrees that for so long as there is a current or ongoing default or breach of this Agreement by HEP Operating, the Partnership shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from HEP Operating for any payments made by the Partnership under this Article 15 , and each of the Partnership hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter acquire against HEP Operating during any period of default or breach of this Agreement by HEP Operating until such time as there is no current or ongoing default or breach of this Agreement by HEP Operating.
15.5 Reinstatement . The obligations of the Partnership under this Article 15 shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the HEP
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Operating Payment Obligations is rescinded or must otherwise be returned to HEP Operating or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of HEP Operating or such other entity, or for any other reason, all as though such payment had not been made.
15.6 Continuing Guaranty . This Article 15 is a continuing guaranty and shall (i) remain in full force and effect until the first to occur of the indefeasible payment and/or performance in full of all of the HEP Operating Payment Obligations, (ii) be binding upon the Partnership and each of its respective successors and assigns and (iii) inure to the benefit of and be enforceable by HFRM and their respective successors, transferees and assigns.
15.7 No Duty to Pursue Others . It shall not be necessary for HFRM (and the Partnership hereby waives any rights which the Partnership may have to require HFRM), in order to enforce such payment by the Partnership, first to (i) institute suit or exhaust its remedies against HEP Operating or others liable on the HEP Operating Obligations or any other person, (ii) enforce HFRMs rights against any other guarantors of the HEP Operating Obligations, (iii) join HEP Operating or any others liable on the HEP Operating Obligations in any action seeking to enforce this Article 15 , (iv) exhaust any remedies available to HFRM against any security which shall ever have been given to secure the HEP Operating Obligations, or (v) resort to any other means of obtaining payment of the HEP Operating Obligations.
[Remainder of page intentionally left blank. Signature pages follow.]
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IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of the date first written above to be effective as of the Effective Time.
HEP OPERATING: | ||
Holly Energy Partners-Operating, L.P. | ||
By: |
/s/ Michael C. Jennings |
|
Michael C. Jennings | ||
Chief Executive Officer | ||
HFRM: | ||
HollyFrontier Refining & Marketing LLC | ||
By: |
/s/ George J. Damiris |
|
George J. Damiris | ||
Chief Executive Officer and President |
[Signature Page 1 of 2 to the Amended and Restated Master Throughput Agreement]
ACKNOWLEDGED AND AGREED | ||
FOR PURPOSES OF Section 10.2 | ||
AND Article 14 : | ||
HOLLYFRONTIER CORPORATION | ||
By: |
/s/ George J. Damiris |
|
George J. Damiris | ||
Chief Executive Officer and President | ||
ACKNOWLEDGED AND AGREED FOR PURPOSES OF Section 10.2 AND Article 15 : |
||
HOLLY ENERGY PARTNERS, L.P. | ||
By: | HEP Logistics Holdings, L.P., | |
its General Partner | ||
By: | Holly Logistic Services, L.L.C., | |
its General Partner | ||
By: |
/s/ Michael C. Jennings |
|
Michael C. Jennings | ||
Chief Executive Officer |
[Signature Page 2 of 2 to the Amended and Restated Master Throughput Agreement]
Exhibit A
to
Amended and Restated
Master Throughput Agreement
Definitions
Actual Construction Costs has the meaning set forth in Exhibit C .
Affiliate means, with to respect to a specified person, any other person controlling, controlled by or under common control with that first person. As used in this definition, the term control includes (i) with respect to any person having voting securities or the equivalent and elected directors, managers or persons performing similar functions, the ownership of or power to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the power to vote in the election of directors, managers or persons performing similar functions, (ii) ownership of 50% or more of the equity or equivalent interest in any person and (iii) the ability to direct the business and affairs of any person by acting as a general partner, manager or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, HFRM, on the one hand, and HEP Operating, on the other hand, shall not be considered affiliates of each other.
Agreement has the meaning set forth in the preamble to this Agreement.
API means the American Petroleum Institute.
API 653 means the Above Ground Storage Tank Inspector Program issued by the API as API Standard 653, as amended and supplemented from time to time.
API Gravity means the API index of specific gravity of a liquid petroleum expressed as degrees, as such index would be calculated on the date hereof.
Applicable Asset means each of the Cheyenne Assets, El Dorado Assets, Lovington Loading Rack, Malaga Pipeline System, Roadrunner Pipeline, Tulsa Assets and El Dorado Crude Tank Farm Assets individually; and Applicable Assets means all of the foregoing assets, collectively.
Applicable Law means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination of, any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, without limitation, all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question.
Applicable Tariff means the Base Tariff and, to the extent applicable, the Incentive Tariff.
Applicable Term has the meaning set forth in Article 7 .
ASTM means ASTM International.
Barrel means 42 Gallons.
Exhibit A-1
Base Tariff means the Base Tariff applicable to the quantity of Product transported, stored or loaded in connection with an Applicable Asset as set forth on Exhibit C , as such Base Tariff may be adjusted pursuant to the terms of this Agreement.
bpd means Barrels per day.
Business Day means any day other than Saturday, Sunday or other day upon which commercial banks in Dallas, Texas are authorized by law to close.
Centurion Pipeline means that certain 10 pipeline system operated by Centurion Pipeline L.P. and originating from Centurions Artesia Station located within Township 18S and Range 27E, approximately 1 mile south of HEP Operatings Abo Station.
Cheyenne Assets means the Cheyenne Receiving Assets, Cheyenne Loading Rack and the Cheyenne Tankage.
Cheyenne Loading Rack means the refined products truck loading rack and the two (2) propane loading spots located at the Refinery and more specifically described in Exhibit I-1 attached hereto.
Cheyenne Receiving Assets means the pipelines set forth on Exhibit I-2 .
Cheyenne RCRA Order means the administrative order set forth in Exhibit I .
Cheyenne Tankage means the tanks set forth on Exhibit I-3 .
Claim means any existing or threatened future claim, demand, suit, action, investigation, proceeding, governmental action or cause of action of any kind or character (in each case, whether civil, criminal, investigative or administrative), known or unknown, under any theory, including those based on theories of contract, tort, statutory liability, strict liability, employer liability, premises liability, products liability, breach of warranty or malpractice.
Closing Date has the meaning for each Applicable Asset set forth in the Omnibus Agreement.
Construction Projects has the meaning set forth in Article 2 .
Contract Quarter means a three-month period that commences on January 1, April 1, July 1 or October 1 and ends on March 31, June 30, September 30, or December 31, respectively.
Control (including with correlative meaning, the term controlled by) means, as used with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
Crude Agreement means the Third Amended and Restated Crude Pipelines and Tankage Agreement, dated as of March 12, 2015, by and among HFRM, HEP Operating and certain other Affiliates of HFRM and HEP Operating.
Crude Oil means the direct liquid product of oil wells, oil processing plants, the indirect liquid petroleum products of oil or gas wells, oil sands or a mixture of such products, but does not include natural gas liquids, Refined Products, naphtha, gas oil, LEF (lube extraction feedstocks) or any other refined products.
Deficiency Notice has the meaning set forth in Section 10.1 .
Exhibit A-2
Deficiency Payment has the meaning set forth in Section 10.1 .
Devon means Devon Energy Production Company, L.P., and its Affiliates .
Devon Lease Connections has the meaning set forth in Exhibit G-3 .
DRA has the meaning set forth in Section 2.6 .
Effective Time means 12:01 a.m., Dallas, Texas time, on February 22, 2016.
El Dorado Assets means the El Dorado Loading Rack and the El Dorado Tankage.
El Dorado Crude Tank Farm Assets means the El Dorado Delivery Lines and the El Dorado Crude Tankage.
El Dorado Crude Tank Farm Consideration Period has the meaning set forth in Exhibit K .
El Dorado Crude Tank Farm Quality Specifications has the meaning set forth in Exhibit K .
El Dorado Crude Tankage means the tankage identified on Exhibit K-1 .
El Dorado Delivery Lines has the meaning set forth in Exhibit K .
El Dorado Minimum Working Capacity has the meaning set forth in Exhibit K .
El Dorado Quality Specifications means those specifications set forth in Exhibit K-2 .
El Dorado Terminal means the tank farm owned by HEP Operating and located in El Dorado, Kansas.
El Dorado Loading Rack means the Refined Products truck loading rack and the propane loading rack located at the El Dorado Refinery and more specifically described on Exhibit H-1 .
El Dorado Tankage means the tanks set forth on Exhibit H-2 .
Environmental Law has the meaning set forth in the Omnibus Agreement.
Excess Tariff Threshold has the meaning set forth in Exhibit C .
Exercise Notice has the meaning set forth in Exhibit F .
FERC Oil Pipeline Index has the meaning set forth in Section 3(a)(iii)(B) .
Final Construction Cost has the meaning set forth in Exhibit I .
Force Majeure has the meaning set forth in the Omnibus Agreement.
Force Majeure Notice has the meaning set forth in the Omnibus Agreement.
Gallon means a United States gallon of two hundred thirty-one (231) cubic inches of liquid at sixty degrees (60°) Fahrenheit, and at the equivalent vapor pressure of the liquid.
Exhibit A-3
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.
Heavy Products means fuel oil, asphalt, coker feed, vacuum tower bottoms, atmospheric tower bottoms, pitch or roofing flux.
HEP Operating has the meaning set forth in the Preamble.
HEP Operating Payment Obligations has the meaning set forth in Section 15.1 .
HFRM has the meaning set forth in the Preamble.
HFRM Payment Obligations has the meaning set forth in Section 14.1 .
High-API Surcharge has the meaning set forth in Section 2.4 .
HollyFrontier means HollyFrontier Corporation, a Delaware corporation.
Holly Tulsa means Holly Refining & Marketing Tulsa LLC.
Incentive Tariff means the Incentive Tariff applicable to the quantity of Product transported, stored or loaded in connection with an Applicable Asset as set forth on Exhibit C , as such Incentive Tariff may be adjusted pursuant to the terms of this Agreement.
Intermediate Products means non-finished intermediate products, including high sulfur diesel fuel for DHT feed, jet fuel, naphtha for reformer feed, gas oil or LEF for FCC feed, reformate, light straight run, hydrogen, fuel gas and sour fuel gas.
Jayhawk means Jayhawk Pipeline, L.L.C. (or its successors to the Jayhawk Tankage).
Jayhawk Lease means the lease between HEP-Operating and Jayhawk for the Jayhawk Tankage in existence as of the commencement of the Applicable Term.
Jayhawk Tankage means the tankage identified in Exhibit K-1 .
Lovington Loading Rack means that certain asphalt loading rack located at the Lovington, New Mexico refinery.
LPG Products means propane, refinery grade propylene, normal butane and isobutane.
Malaga Capacity Estimate has the meaning set forth in Exhibit G .
Malaga Commencement Date means the date on which, in the reasonable opinion of HEP Operating, the Malaga Pipeline System is available for service and operating as expected in delivering Crude Oil, which date has been specified in written notice from HEP Operating to HFRM at least 60 days prior to the Malaga Commencement Date; provided, however , that if the Malaga Pipeline System is, in the discretion of HEP Operating, substantially complete, then the parties may agree in writing to a commencement date prior to the Malaga Pipeline System being fully completed.
Exhibit A-4
Malaga Construction Projects has the meaning set forth in Exhibit G .
Malaga Exercise Notice has the meaning set forth in Exhibit G .
Malaga Initial Period means the period beginning on the Malaga Commencement Date through and including final day of the 20 th full Contract Quarter following the Malaga Commencement Date.
Malaga Pipeline System means the pipeline systems (a) extending from the (i) Whites City Road Station to the HEP Operating Artesia Station, from (ii) Devon Parkway field to the Millman Station and the HEP Operating Artesia Station, (iii) HEP Operating Artesia Station to the Beeson Station, (iv) the Beeson Station to the Anderson Ranch Pipeline, (v) Devon Hackberry field to the Beeson Station, and (v) Beeson Station to the Plains Pipeline, including in each case all related lease connection pipelines, storage facilities, crude oil gathering tanks, and truck off-loading facilities, as depicted on Exhibit G-1 (Map of Pipeline System and Pipeline System Capacity by Segment), and (b) with the volume capacities as set forth on Exhibit G-1 , described on Exhibit G-2 (Construction Projects) and described on Exhibit G-3 (Devon Lease Connections).
Master Lease and Access Agreement means that certain Master Lease and Access Agreement dated as of the date hereof among certain of the Affiliates of HEP Operating and the owners of the Refineries.
Minimum Capacity Commitment has the meaning set forth in Section 2.2(a) .
Minimum Revenue Commitment has the meaning set forth in Section 2.2(a) .
Minimum Throughput Commitment means the quantity of Product to be transported, stored or loaded in connection with an Applicable Asset, as set forth on Exhibit C , as such amount may be adjusted pursuant to the terms of this Agreement.
MSCFD means thousands of cubic feet per day.
MVP Pipeline has the meaning set forth in Exhibit K .
Navajo has the meaning set forth in the Preamble.
New Tank means the new petroleum products storage tankage to be added to the Applicable Assets as identified on Exhibits H and I .
New Tank Commencement Date means, with respect to each New Tank, the first day of the calendar month after the date on which, in the reasonable opinion of HEP Operating, such New Tank is mechanically complete, available for service and operating as expected in storing the Product for which such New Tank was designed, which date has been specified in written notice from HEP Operating to HFRM at least 30 days prior to such date.
Omnibus Agreement means the Twelfth Amended and Restated Omnibus Agreement, dated as of the date hereof.
Original Master Throughput Agreement has the meaning set forth in the Preamble.
Osage Pipeline has the meaning set forth in Exhibit K .
Parties has the meaning set forth in the Preamble.
Exhibit A-5
Partnership means Holly Energy Partners, L.P., a Delaware limited partnership.
Party has the meaning set forth in the Preamble.
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.
Pipelines means the Malaga Pipeline System, Roadrunner Pipeline, the Tulsa Pipelines, the Tulsa Interconnecting Pipelines, and the El Dorado Delivery Lines, and any other pipeline included in the Applicable Assets.
Plains Pipeline means that certain 16 diameter pipeline operated by Plains All American Pipeline, L. P. and located in Lea County, New Mexico and which crosses the HEP Anderson Ranch gathering system in Township 18 South, Range 32 East.
Prime Rate means the prime rate per annum announced by Union Bank, N.A., or if Union Bank, N.A. no longer announces a prime rate for any reason, the prime rate per annum announced by the largest U.S. bank measured by deposits from time to time as its base rate on corporate loans, automatically fluctuating upward or downward with each announcement of such prime rate.
Prior Agreements means those agreements set forth in Recitals A through F. For the avoidance of doubt, Prior Agreements do not include the following agreements (as amended, modified or supplemented and in effect from time to time): (a) Amended and Restated Intermediate Pipelines Agreement dated June 1, 2009, (b) Tulsa Equipment and Throughput Agreement dated August 1, 2009, (c) Amended and Restated Refined Product Pipelines and Terminals Agreement effective February 1, 2009, (d) Second Amended and Restated Throughput Agreement effective June 1, 2013, (e) Third Amended and Restated Crude Pipelines and Tankage Agreement dated March 12, 2015, and (f) Unloading and Blending Services Agreement (Artesia) dated March 12, 2015.
Products has the meaning set forth in Exhibit C .
Qualified Third-Party Throughput has the meaning set forth in Exhibit C .
Red Rock Pipeline has the meaning set forth in Exhibit K .
Refined Products means gasoline, kerosene, ethanol and diesel fuel.
Refinery means the Lovington, New Mexico refinery owned by Navajo; the El Dorado, Kansas refinery owned by Frontier El Dorado; the Cheyenne, Wyoming refinery owned by Frontier Refining; and the Tulsa, Oklahoma refinery owned by Holly Tulsa.
Roadrunner Pipeline means that certain 16 crude oil pipeline extending approximately 65 miles from the Slaughter station to Lovington, New Mexico.
Subsequent Year has the meaning set forth in Exhibit G .
Subsidiary means with respect to any Person (the Owner ), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporations or other Persons board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interest having such power only upon the happening of a contingency that has not occurred), are held by the Owner or one or more of its Subsidiaries.
Exhibit A-6
Surcharge Tariff has the meaning set forth in Exhibit C .
SUS means Saybolt Universal Seconds as specified by ASTM Standard D2161-10, as amended, supplemented or replaced from time to time.
Tulsa Assets means the Tulsa Group 1 Tankage, Tulsa Group 1 Loading Rack, Tulsa Group 1 Pipeline, Tulsa Group 2 Tankage, Tulsa Group 2 Loading Rack and the Tulsa Interconnecting Pipelines.
Tulsa East Refinery means the refinery owned by Holly Tulsa and located at 905 West 25 th Street, Tulsa, Oklahoma 74107.
Tulsa Group 1 Purchase Agreement means that certain Asset Sale and Purchase Agreement dated as of October 1, 2009 by and among Holly Tulsa, HEP Tulsa LLC and Holly Energy Storage Tulsa.
Tulsa Group 1 Loading Rack means the gas oil, asphalt and propane truck loading racks located at the Tulsa West Refinery and more specifically described in Exhibit J-1 attached hereto.
Tulsa Group 1 Tankage means the tankage identified in Exhibit J-3 attached hereto.
Tulsa Group 2 Purchase Agreement means that certain LLC Interest Purchase Agreement dated as of March 31, 2010 by and between HEP Tulsa LLC, Lea Refining Company, and Holly Tulsa.
Tulsa Group 2 Tankage means the tankage identified in Exhibit J-5 .
Tulsa Group 2 Loading Rack means the rail loading rack located at the Tulsa West Refinery and more specifically described in Exhibit J-4 .
Tulsa Interconnecting Pipelines means the following pipelines between the Tulsa East Refinery and the Tulsa West Refinery: 1) the 12 inch raw gas oil/diesel line (the Distillate Interconnecting Pipeline ), 2) the 12 inch naphtha/gasoline component line (the Gasoline Interconnecting Pipeline ), 3) the 12 inch refinery fuel gas line (the Refinery Fuel Gas Interconnecting Pipeline ), 4) the 8 inch hydrogen line (the Hydrogen Interconnecting Pipeline ), and 5) the 10 inch refinery sour fuel gas line (the Refinery Sour Fuel Gas Interconnecting Pipeline ) including delivery facilities from the Tulsa West Refinery and receipt facilities at the Tulsa East Refinery for the Distillate and Gasoline Interconnecting Pipelines, but not for the Refinery Fuel Gas, Hydrogen, and Refinery Sour Fuel Gas Interconnecting Pipelines.
Tulsa Group 1 Pipeline means those two (2) product delivery lines extending from the Group 1 Tankage to interconnection points with the Magellan pipeline as more specifically described in Exhibit J-2 attached hereto.
Tulsa Purchase Agreements means the Tulsa Group 1 Purchase Agreement and the Tulsa Group 2 Purchase Agreement.
Tulsa West Refinery means the refinery owned by Holly Tulsa located at 1700 S. Union, Tulsa, Oklahoma.
Working Capacity has the meaning set forth in Exhibit K .
Exhibit A-7
Exhibit B
to
Amended and Restated
Master Throughput Agreement
Interpretation
As used in this Agreement, unless a clear contrary intention appears:
(a) any reference to the singular includes the plural and vice versa, any reference to natural persons includes legal persons and vice versa, and any reference to a gender includes the other gender;
(b) the words hereof, herein, and hereunder and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;
(c) any reference to Articles, Sections and Exhibits are, unless otherwise stated, references to Articles, Sections and Exhibits of or to this Agreement and references in any Section or definition to any clause means such clause of such Section or definition. The headings in this Agreement have been inserted for convenience only and shall not be taken into account in its interpretation;
(d) reference to any agreement (including this Agreement), document or instrument means such agreement, document, or instrument as amended, modified or supplemented and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of this Agreement;
(e) the Exhibits hereto form an integral part of this Agreement and are equally binding therewith. Any reference to this Agreement shall include such Exhibits;
(f) references to a Person shall include any permitted assignee or successor to such Party in accordance with this Agreement and reference to a Person in a particular capacity excludes such Person in any other capacity;
(g) if any period is referred to in this Agreement by way of reference to a number of days, the days shall be calculated exclusively of the first and inclusively of the last day unless the last day falls on a day that is not a Business Day in which case the last day shall be the next succeeding Business Day;
(h) the use of or is not intended to be exclusive unless explicitly indicated otherwise;
(i) references to $ or to dollars shall mean the lawful currency of the United States of America; and
(j) the words includes, including, or any derivation thereof shall mean including without limitation or including, but not limited to.
Exhibit B-1
Exhibit C
to
Amended and Restated
Master Throughput Agreement
Applicable Assets, Product, Minimum Capacity Commitment, Tariffs, Tariff Adjustments and Applicable Terms*
Applicable
|
Type of
|
Product |
Minimum
|
Minimum
(in the
|
Base Tariff (applicable
to
all
Tariff
|
Incentive
for each
Contract
|
Incentive
(applicable to all movements at or above the Incentive
Rate
|
Excess
|
Tariff
|
Tariff
|
Tariff
|
Applicable Term
(all times are Dallas,
|
||||||||||||
Malaga Pipeline System | Pipelines | Crude Oil | 40,000 bpd 1 | 40,000 bpd 2 | $0.5334/bbl 2 | 40,000 bpd 2 | $0.3137/bbl | | FERC Adjustment | | July 1, 2015 | 12:01 a.m. on June 1, 2013 to Sept. 1, 2024 (the Malaga Commencement Date ) |
* | Tariffs listed on this Exhibit are effective as of July 1, 2015, other than tariffs with respect to the El Dorado Assets Pipelines, which are effective as of February 22, 2016. |
1 | As may be adjusted pursuant to Exhibit G . |
2 | During the first five years of the Applicable Term, following the Malaga Commencement Date, HFRM shall pay HEP Operating an extra surcharge per barrel (the Surcharge Tariff ). The Surcharge Tariff for each Contract Quarter is equal to: |
Actual Construction Costs $38,500,000
Minimum Pipeline Throughput × 365 × 5
where Actual Construction Costs means the actual, reasonable and necessary costs, or as otherwise approved in writing by HFRM, incurred by HEP Operating to construct the Malaga Construction Projects and the Devon Lease Connections; provided, however, that the numerator of the formula for calculating the Surcharge Tariff (Actual Construction Costs $38,500,000) shall not exceed $13,500,000 such that the maximum value for such numerator shall be $13,500,000. At the end of each Contract Quarter during the first five years of the Applicable Term, following the Malaga Commencement Date, HFRM shall pay HEP Operating an amount for each Contract Quarter determined by multiplying the Minimum Throughput Commitment for the Malaga Pipeline System for such Contract Quarter, by the Surcharge Tariff. The Surcharge Tariff is in addition to the Applicable Tariff to be paid by HFRM.
Exhibit C-1
Applicable
|
Type of
|
Product |
Minimum
unless
|
Minimum
(in the
|
Base Tariff (applicable
to
all
Tariff
|
Incentive
Tariff
for each
Contract
|
Incentive
(applicable to all movements at or above the Incentive
Rate
|
Excess
|
Tariff
|
Tariff
|
Tariff
|
Applicable Term
(all times are Dallas,
|
||||||||||||
El Dorado Assets | Pipelines |
Refined Products
LPG Products,
Intermediate Products
Heavy Products |
120,000 bpd of aggregate delivery capacity from the Tankage | 120,000 bpd of Intermediate and Refined Product | $0.1625/bbl | 125,000 bpd of Intermediate and Refined Product | $0.01/bbl | | PPI Adjustment | 3% in any calendar year (applicable to each individual tariff) | July 1, 2012 | 12:01 a.m. on Nov. 1, 2011 to 12:01 a.m. on Oct. 31, 2026; provided that with respect to (a) El Dorado Tank No. 643, the Applicable Term is 12:01 a.m. on February 4, 2014 to 12:01 a.m. on February 4, 2029, and (b) the New Tanks at the El Dorado Refinery, the Applicable Term shall be from 12:01 a.m. on the New Tank Commencement Date for such New Tank to the date occurring fifteen (15) years thereafter. | ||||||||||||
Tankage | 140,000 bpd of aggregate capacity in the Tankage | 140,000 bpd of Products | $0.4793 /bbl 3 , 4 | 154,000 bpd of Products | $0.2167/bbl | | ||||||||||||||||||
Loading Rack | 20,000 bpd | 20,000 bpd | $0.2708/bbl | | | |
3 | From and after the New Tank Commencement Date established pursuant to Exhibit H , if any, the Tankage Base Tariff shall be increased by an amount per barrel equal to: |
Final Construction Cost
0.9 × 8.1928 × Minimum Tankage Throughput × 365
For example, if the Final Construction Costs = $1,500,000, the per barrel increase in the Tankage Base Tariff would be calculated as follows: $1,500,000/(0.9 × 8.1928 × 140,000 × 365) = $0.0040.
4 | Reflects reduction in throughput fee effective January 1, 2015 as a result of the secondment arrangement at the El Dorado refinery. |
Exhibit C-2
Applicable
|
Type of
|
Product |
Minimum
unless
|
Minimum
(in the
|
Base Tariff (applicable to all
movements
Tariff
|
Incentive
Tariff
for each
Contract
|
Incentive
(applicable to all movements at or above the Incentive
Rate
|
Excess
|
Tariff
|
Tariff
|
Tariff
|
Applicable Term
(all times are Dallas,
|
||||||||||||
Cheyenne Assets | Cheyenne Receiving Assets | Crude Oil | 41,000 bpd | 46,000 bpd | $0.3251/bbl | 50,600 bpd | $0.1517/bbl | | PPI Adjustment | 3% in any calendar year (applicable to each individual tariff) 4 | July 1, 2012 | 12:01 a.m. on Nov. 1, 2011 to 12:01 a.m. on Oct. 31, 2026; provided that with respect to (a) Cheyenne New Tank Nos. 117, the Applicable Term shall be from 12:01 a.m. on December 4, 2014 to 12:01 a.m. on December 4, 2029, and (b) any New Tanks at the Cheyenne Refinery, the Applicable Term is 12:01 a.m. on the New Tank Commencement Date for each such New Tank to the date occurring fifteen (15) years thereafter. | ||||||||||||
Cheyenne Tankage | 46,000 bpd | 41,000 bpd | $0.4673/bbl 3, 5 | 45,100 bpd | $0.2167/bbl | | ||||||||||||||||||
Cheyenne Loading Rack | 41,000 bpd | $0.2708/bbl | None | | |
5 | Reflects reduction in throughput fee effective January 1, 2015 as a result of the secondment arrangement at the Cheyenne refinery. |
Exhibit C-3
Applicable
|
Type of
|
Product |
Minimum
unless otherwise noted) |
Minimum
(in the
|
Base Tariff (applicable to all
movements
Tariff
|
Incentive
Tariff
for each
Contract
|
Incentive
(applicable to all movements at or above the Incentive
Rate
|
Excess
Tariff
to
all
Excess
Tariff
set forth below, if any) |
Tariff
|
Tariff
|
Tariff
|
Applicable Term
(all times are Dallas,
|
||||||||||||
Tulsa East Assets |
Tulsa Pipelines
|
Refined Products | 60,000 bpd | 60,000 bpd | $0.1116/bbl | | | PPI Adjustment | 3% in any calendar year (applicable to each individual tariff) | July 1, 2011 | 11:59 p.m. on Mar. 31, 2010 to 12:01 a.m. on Dec. 1, 2024 | |||||||||||||
Tulsa Group 1 Tankage |
Various | 1,362,550 bbls | 80,000 bpd | $0.3839/bbl |
Each throughput barrel over the Minimum Throughput Commitment but less than or equal to the Excess Tariff Threshold
|
$0.1116/bbl | $0.2455/bbl (over 120,000 bpd of Refined Products, in the aggregate on average for each Contract Quarter) | |||||||||||||||||
Tulsa Group 1 Loading Rack
|
Various | 26,000 bpd | 26,000 bpd | $0.3348/bbl | | | | |||||||||||||||||
Tulsa Group 2 Tankage |
Various | 2,122,644 bbl | 90,000 bpd | $0.4605/bbl |
Each throughput barrel over the Minimum Throughput Commitment but less than or equal to the Excess Tariff Thresshold
|
$0.1116/bbl | $0.2455/bbl (over 120,000 bpd of Refined Products, in the aggregate on average for each Contract Quarter) | |||||||||||||||||
Tulsa Group 2 Loading Rack |
1,800 bpd | 1,800 bpd | $0.3906/bbl | | | |
Exhibit C-4
Applicable
|
Type of
Applicable
|
Product |
Minimum Capacity Commitment (aggregate capacity unless
otherwise
|
Minimum Throughput Commitment (in the aggregate, on
average, for
Quarter) |
Base Tariff (applicable to all
movements
Tariff
|
Incentive
Tariff
for each
Contract
|
Incentive
(applicable to all movements at or above the Incentive
Rate
|
Excess
Tariff
to
all
Excess
Tariff
set forth below, if any) |
Tariff
|
Tariff
|
Tariff
|
Applicable Term
(all times are Dallas,
|
||||||||||||
Tulsa Interconnecting Pipelines 6 |
Distillate Interconnecting Pipeline 45,000 bpd (maximum)
|
45,000 bpd | $0.2267/bbl (to 45,000 bpd in the aggregate, on average for each Contract Quarter) | Over 45,000 bpd and less than or equal to 65,000 bpd | $0.0758/bbl | $0.0541/bbl (over 65,000 bpd of Refined Products, in the aggregate on average for each Contract Quarter) | ||||||||||||||||||
Gasoline Interconnecting Pipeline 45,000 bpd (maximum) |
45,000 bpd of Intermediate Products shipped between the Tulsa East Refinery and the Tulsa West Refinery via the Interconnecting Pipelines (excluding the Distillate Interconnecting Pipeline and the Tulsa Pipelines
|
|||||||||||||||||||||||
Hydrogen Interconnecting Pipeline | 64,000 MSCFD |
$0.0693/ MSCF/day |
| | |
6 | The Minimum Interconnecting Pipeline Revenue Commitment shall be an amount of revenue to HEP Operating for each Contract Quarter determined by adding: 1) the Minimum Interconnecting Pipeline Liquid Throughput multiplied by the Interconnecting Pipeline Liquid Tariff, and 2) the Minimum Interconnecting Pipeline Gas Throughput multiplied by the Interconnecting Pipeline Gas Tariff. |
Exhibit C-5
Applicable
|
Type of
|
Product |
Minimum
Capacity
capacity unless otherwise noted) |
Minimum
(in the
|
Base Tariff (applicable
to
all
Tariff
|
Incentive
for each
Contract
|
Incentive
(applicable to all movements at or above the Incentive
Rate
|
Excess
|
Tariff
|
Tariff
|
Tariff
|
Applicable Term
(all times are Dallas,
|
||||||||||||
10,000 MSCFD of hydrogen (maximum) | ||||||||||||||||||||||||
Refinery Fuel Gas Interconnecting Pipeline 32,000 MSCFD of refinery fuel gas (maximum) |
||||||||||||||||||||||||
Refinery Sour Fuel Gas Interconnecting Pipeline 22,000 MSCFD of refinery sour fuel gas (maximum) | ||||||||||||||||||||||||
Lovington Assets | Lovington Loading Rack | Asphalt and any other petroleum or petroleum based or derived products | 4,000 bpd | 4,000 bpd | $0.3906/bbl | | | PPI Adjustment 4 | 3% in any calendar year | July 1, 2011 | 11:59 p.m. on Mar. 31, 2010 to 12:01 a.m. on Mar. 31, 2025 |
Exhibit C-6
Applicable
|
Type of
|
Product |
Minimum
|
Minimum
(in the
|
Base Tariff (applicable
to
all
Tariff
|
Incentive
for each
Contract
|
Incentive
(applicable to all movements at or above the Incentive
Rate
|
Excess
|
Tariff
|
Tariff
|
Tariff
|
Applicable Term
(all times are Dallas,
|
||||||||||||
Roadrunner Assets | Pipelines | Crude Oil | 40,000 bpd | 40,000 bpd 7 | $0.7174/bbl | Each throughput barrel over the Minimum Throughput Commitment | $0.3757/bbl 8 | | PPI Adjustment | 3% plus 1 ⁄ 2 of the PPI increase in excess of 3% for such calendar year. | July 1, 2011 | 12:01 a.m. on Dec. 1, 2009 to 12:01 a.m. on Dec. 1, 2024 | ||||||||||||
El Dorado Crude Tankage 9 | Tankage | Crude Oil; Intermediate Products | 140,000 bpd | 140,000 bpd | $0.091/bbl | Each throughput barrel over the Minimum Throughput Commitment | $0.01/bbl | | PPI Adjustment | Subject to 1% minimum / 3% cap 10 | July 1, 2016 | 12:01 a.m. on March 6, 2015 to 12:01 a.m. on March 6, 2025 |
7 | In the event that any third party transports Crude Oil on the Roadrunner Pipeline for ultimate delivery to HollyFrontier or any of its Subsidiaries and such third party pays throughput fees equal to or greater than the then-current base tariff for each such barrel of Crude Oil transported on the Roadrunner Pipeline for ultimate delivery to HollyFrontier or any of its Subsidiaries ( Qualified Third-Party Throughput ), then revenues paid to HEP Operating by such third party for such Qualified Third-Party Throughput shall be credited towards the Minimum Revenue Commitment hereunder for the Roadrunner Pipeline. |
8 | If the average throughput for any Contract Quarter (including Qualified Third-Party Throughput) exceeds the Minimum Pipeline Throughput attributable to such Contract Quarter, then for each throughput barrel in excess of the Minimum Pipeline Throughput, HFRM shall pay HEP Operating throughput fees in the amount of the Pipeline Incentive Tariff. |
9 | El Dorado Crude Tankage was added to this Agreement on March 6, 2015. |
10 | For the avoidance of doubt, if the change in PPI in any year is less than one percent (1%) it will be rounded up to one percent (1%) and if the change in PPI in any year is greater than three percent (3%) it will be rounded down to three percent (3%). |
Exhibit C-7
Applicable Tariff Adjustments
FERC Adjustment:
Each Applicable Tariff shall be adjusted on July 1 of each index year during the Applicable Term by an amount equal to the percentage change, if any, between the two (2) immediately preceding index years, in the Federal Energy Regulation Commission Oil Pipeline Index (the FERC Oil Pipeline Index ); provided , however , that if the percentage change, if any, between the two (2) immediately preceding index years in the FERC Oil Pipeline Index is negative, then there will be no change to the Applicable Tariffs.
PPI Adjustment:
Each Applicable Tariff shall be adjusted on July 1 of each calendar year by an amount equal to the upper change in the annual change rounded to four decimal places of the Producers Price Index-Commodities-Finished Goods, (PPI), et al. ( PPI ), produced by the U.S. Department of Labor, Bureaus of Labor Statistics. The series ID is WPUSOP3000 as June 1, 2011 located at http://www.bls.gov/data/ . The change factor shall be calculated as follows: annual PPI index (most current year) less annual PPI index (most current year minus 1) divided by annual PPI index (most current year minus 1). An example for year 2009 change is: [PPI (2008) PPI (2007)] / PPI (2007) or (177.1 166.6) / 166.6 or .063 or 6.3%. If the PPI index change is negative in a given year then there will be no change in the tariff.
Index no longer Published
If the either index is no longer published, the Parties shall negotiate in good faith to agree on a new index (as applicable) that gives comparable protection against inflation or deflation, and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the tariffs. If the Parties are unable to agree, a new index will be determined in accordance with the dispute resolution provisions set forth in the Omnibus Agreement, and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the tariffs.
Exhibit C-8
Exhibit D
to
Amended and Restated
Master Throughput Agreement
Measurement of Shipped Volumes
Applicable Asset |
Type of Applicable Asset |
Measurement of Volumes |
||
Malaga Pipeline System |
Pipelines |
Quantities shipped on the Malaga Pipeline System shall be determined by measuring unique barrels of Crude Oil (either by counting barrels or calculating barrels based on available meter data) shipped on the following origin and destination pairings:
Whites City Road Station to HEP Artesia Station Whites City Road Station to Beeson Station Whites City Road Station to Plains Pipeline Bisti Connection HEP Artesia Station to Beeson Station HEP Artesia Station to Plains Pipeline Bisti Connection Beeson Station to Plains Pipeline Bisti Connection
The origin and destination pairings listed above utilize the following segments of the Pipeline System:
Whites City Road Station to HEP Artesia Station (8-inch) HEP Artesia Station to Beeson Station (8-inch) Beeson Station to Plains Pipeline Bisti Connection (12-inch)
Shipments on any other segments of the Malaga Pipeline System will be charged the then-current tariff and fees under the Crude Agreement.
For the avoidance of doubt, a barrel shipped on multiple segments of the Malaga Pipeline System shall only be counted as one barrel in satisfaction of the Minimum Throughput Commitment and shall not count as a separate barrel on each such segment. For example, a barrel shipped from Whites City Road Station to the Plains Pipeline Bisti Connection shall count as one barrel in satisfaction of the Minimum Throughput Commitment, and not as three barrels since it flows on three segments of the Malaga Pipeline System. |
||
El Dorado Assets |
Pipelines |
Pipeline delivery throughput shall be determined by the shipments of Products by pipeline (and not over the Loading Racks) from the El Dorado Refinery.
|
||
Tankage |
Tankage throughput shall be determined by the sum of Products shipped from the El Dorado Refinery but not including shipments of coke and sulfur. For the avoidance of doubt, no Tankage throughput fees shall be paid for movements of Products within the El Dorado Refinery.
|
|||
Loading Rack |
The Loading Rack Tariff will be paid for all quantities of Products or other materials loaded at the Loading Racks or the asphalt loading rack and any Products or other materials shipped using the weight scales.
|
|||
Cheyenne Assets |
Cheyenne Receiving Assets |
Crude Oil throughput shall be determined by the total shipments of Crude Oil by pipeline, truck and rail received at the Cheyenne Refinery.
|
||
Cheyenne Tankage |
Tankage throughput shall be determined by the sum of Products shipped by the Refinery but not including shipments of coke and sulfur. For the avoidance of doubt, no Tankage throughput fees shall be paid for movements of Products within the Cheyenne Refinery.
|
|||
Cheyenne Loading Rack |
The Applicable Tariff for the Loading Rack will be paid for (A) all quantities of Products shipped out of the Cheyenne Refinery by pipeline or asphalt loading racks, and (B) all quantities of Products, Crude Oil and any other materials (such as coke and sulfur) loaded at the Loading Racks or the weight scales. |
Exhibit D-1
Applicable Asset |
Type of Applicable Asset |
Measurement of Volumes |
||
Tulsa East Assets | Pipelines |
Pipeline throughput will be determined by the quantities of Refined Product shipped on the Tulsa Pipelines.
|
||
Group 1 Tankage |
Group 1 Tankage throughput shall be determined by the sum of Refined Products shipped on the Pipelines and loaded at the Group 1 Loading Rack. Any streams moved internally within the Tulsa East Refinery will not be included in determining the volumes for any Minimum Revenue Commitment for the Group 1 Tankage. 1
|
|||
Group 1 Loading Rack |
The Group 1 Loading Rack Tariff will be paid for all quantities of Products loaded at the Group 1 Loading Rack.
|
|||
Group 2 Tankage |
Group 2 Tankage throughput shall be determined by the sum of pipeline quantities of Crude Oil and Intermediate Products received at the Tulsa East Refinery, including Crude Oil and Intermediate Products received at the Tulsa East Refinery from the Tulsa West Refinery. Any streams moved internally within the Tulsa East Refinery will not be included in determining the volumes for any Minimum Revenue Commitment for the Group 2 Tankage. Any Refined Products received from the Tulsa West Refinery or moved out of the Tulsa East Refinery will not be included in determining the volumes for the Minimum Revenue Commitment for the Group 2 Tankage. 1
|
|||
Group 2 Loading Rack |
The Group 2 Loading Rack Tariff will be paid for all quantities of Products loaded at the Group 2 Loading Rack.
|
|||
Interconnecting Pipelines |
The Interconnecting Pipeline Gas Throughput shall be determined by the sum of pipeline quantities of Intermediate Products shipped between the Tulsa East Refinery and the Tulsa West Refinery via the Hydrogen Interconnecting Pipeline, Refinery Fuel Gas Interconnecting Pipeline, and Refinery Sour Fuel Gas Interconnecting Pipeline.
The Interconnecting Pipeline Liquid Throughput shall be determined by the sum of pipeline quantities of Intermediate Products shipped between the Tulsa East Refinery and the Tulsa West Refinery via the Gasoline Interconnecting Pipeline and Distillate Interconnecting Pipeline.
|
|||
Lovington Assets | Loading Rack |
The Loading Rack Tariff will be paid for all quantities of Products loaded at the Lovington Loading Rack.
|
||
Roadrunner Assets | N/A |
N/A
|
||
El Dorado Crude Tank Farm Assets | El Dorado Crude Tankage | El Dorado Tankage throughput shall be determined by the sum of the pipeline quantities of Product received at the El Dorado Crude Tankage, based on custody transfer meters. For avoidance of doubt, no throughput fees shall be paid for movements of Products among the El Dorado Crude Tankage. |
1 | For the avoidance of doubt, any high sulfur diesel fuel that HFRM may transport from the Tulsa West Refinery through the Group 1 Tankage or Group 2 Tankage for processing in the Tulsa East Refinerys distillate hydrotreater shall be subject to the Group 2 Tankage Applicable Tariffs, and the resulting ultra low sulfur diesel fuel produced from the high sulfur diesel fuel and then shipped from the Tulsa East Refinery via either the Tulsa Pipelines or the loading rack located at the Tulsa East Refinery shall be subject to the applicable Group 1 Tankage Applicable Tariffs. |
Exhibit D-2
Exhibit E
to
Amended and Restated
Master Throughput Agreement
Volumetric Gains; Losses; Line Fill; High-API Oil Surcharge
Applicable Assets |
Volumetric Gains and Losses |
Line Fill |
High-API Oil Surcharge |
|||
Malaga Pipeline System | HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Malaga Pipeline System, and (ii) be responsible for all volumetric losses in the Malaga Pipeline System up to a maximum of 0.5%. HEP Operating shall be responsible for all volumetric losses in excess of 0.5% in the Malaga Pipeline System during the Applicable Term. Volumetric gains and losses shall be calculated and measured in a manner consistent with how and when gains and losses are calculated in the Crude Agreement. | HFRM shall be responsible for line fill by pipeline segment in accordance with HEP Operatings policies for each segment as published on the Partnerships website from time to time. | In the event HFRM desires to ship Crude Oil on the Malaga Pipeline System with an API Gravity in excess of 50 degrees, HEP Operating may, in its sole discretion, (i) refuse to ship such Crude Oil, or (ii) ship such Crude Oil and charge HFRM a surcharge (the High-API Surcharge ) equal to the increased expenses (or lower revenues) or capital costs, as a direct result thereof, as agreed upon by the Parties. If the Parties are unable to agree upon the High-API Surcharge, the High-API Surcharge will be determined pursuant to the dispute resolution provisions of the Omnibus Agreement. Any amounts paid by HFRM as a High-API Surcharge shall not count toward satisfaction of any Minimum Revenue Commitment. | |||
El Dorado Assets |
|
|
|
|||
Cheyenne Assets |
HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Cheyenne Receiving Assets, and (ii) be responsible for all volumetric losses in the Cheyenne Receiving Assets up to a maximum of 0.5%. HEP Operating shall, during the Applicable Term, be responsible for all volumetric losses in excess of 0.5% in the Cheyenne Receiving Assets. Gains and losses will be calculated for each Contract Quarter and offset against each other. |
|
|
Exhibit E-1
Applicable Assets |
Volumetric Gains and Losses |
Line Fill |
High-API Oil Surcharge |
|||
Tulsa East Assets | HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Tulsa Pipelines, and (ii) be responsible for all volumetric losses in the Tulsa Pipelines up to a maximum of 0.5%. HEP Tulsa shall, during the Applicable Term, be responsible for all volumetric losses in excess of 0.5% in the Tulsa Pipelines. Gains and losses will be calculated for each Contract Quarter and offset against each other. | | | |||
Lovington Assets |
|
|
|
|||
Roadrunner Assets |
HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Roadrunner Pipeline, and (ii) be responsible for all volumetric losses in the Roadrunner Pipeline up to a maximum of 0.5%. HEP Operating shall, during the Applicable Term, be responsible for all volumetric losses in excess of 0.5% in the Roadrunner Pipeline. Gains and losses will be calculated for each Contract Quarter and offset against each other. |
|
|
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El Dorado Crude Tank Farm Assets |
|
|
|
Exhibit E-2
Exhibit F
to
Amended and Restated
Master Throughput Agreement
Increases in Tariff Rates as a Result of Changes in Applicable Law
Applicable Assets |
||||
Types of Tariffs that may be increased (as applicable) | Threshold | |||
Malaga Pipeline System |
Pipeline Base Tariff Pipeline Incentive Tariff |
None | ||
El Dorado Assets |
Pipeline Base Tariff Tankage Base Tariff Loading Rack Base Tariff |
No Base Tariff may be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the El Dorado Assets in order to comply with new Applicable Laws.
Thereafter, HEP Operating may amend the applicable Base Tariff to recover its full cost of complying with the new Applicable Laws and such recovery shall not be limited to amounts in excess of $1,000,000. |
||
Cheyenne Assets |
Cheyenne Receiving Assets Base Tariff Cheyenne Tankage Base Tariff Cheyenne Loading Rack Base Tariff |
No Base Tariff may be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the Cheyenne Assets in order to comply with new Applicable Laws.
Thereafter, HEP Operating may amend the applicable Base Tariff to recover its full cost of complying with such new Applicable Laws and such recovery shall not be limited to amounts in excess of $1,000,000. |
||
Tulsa East Assets |
Tulsa Pipelines Base Tariff Tulsa Group 1 Tankage Base Tariff Tulsa Group 1 Loading Rack Tariff Tulsa Group 2 Tankage Base Tariff Tulsa Group 2 Loading Rack Tariff |
Base Tariff may not be amended until HEP Operating has made capital expenditures of $2,000,000 in the aggregate with respect to the Applicable Assets (excluding the Interconnecting Pipelines) in order to comply with new Applicable Laws. | ||
Tulsa Interconnecting Pipeline Base Tariff |
Base Tariff may not be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the Interconnecting Pipelines in order to comply with new Applicable Laws. |
|||
Lovington Assets | Base Tariff | Base Tariff may not be amended until HEP Operating has made capital expenditures of $500,000 in the aggregate with respect to the Lovington Loading Rack in order to comply with new Applicable Laws. |
Exhibit F-1
Applicable Assets |
||||
Roadrunner Assets | Pipeline Base Tariff | Base Tariff may not be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the Roadrunner Pipeline in order to comply with new Applicable Laws. | ||
El Dorado Crude Tank Farm Assets | Base Tariff |
No Base Tariff may be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the El Dorado Crude Tank Farm Assets in order to comply with new Applicable Laws.
Thereafter, HEP Operating may amend the applicable Base Tariff to recover its full cost of complying with the new Applicable Laws and such recovery shall not be limited to amounts in excess of $1,000,000. |
Exhibit F-2
Exhibit G
to
Amended and Restated
Master Throughput Agreement
Special Provisions: Malaga Pipeline System
1. Construction Projects . HEP Operating agrees to use commercially reasonable efforts to (i) complete the construction projects set forth on Exhibit G-2 and (ii) build the 25 lease connections listed on Exhibit G-3 (the Devon Lease Connections and, together with the construction projects set forth on Exhibit G-2 , the Malaga Construction Projects ). With respect to Item 4 listed on Exhibit G-2 , HFRM shall reimburse HEP Operating 100% of the actual costs and expenses of those Malaga Construction Projects. HEP Operating shall bear the costs of constructing all of the other Malaga Construction Projects listed on Exhibit G-2 and Exhibit G-3 , other than Item 4 on Exhibit G-3 .
2. Option to Increase Minimum Capacity Commitment Following the Malaga Initial Period . At the end of the Malaga Initial Period and once-a-year thereafter during the Applicable Term, HFRM shall have the option to increase (but not decrease) the Minimum Capacity Commitment for the Malaga Pipeline System applicable to the remainder of the Applicable Term, which option may be exercised as follows:
2.1 Malaga Capacity Estimate . HFRM may initiate the process by which it will exercise its option by delivering to HEP Operating a written request for a statement of HEP Operatings good faith estimate of the total uncommitted pipeline capacity for the Malaga Pipeline System that will be available for the remaining Applicable Term (a Malaga Capacity Estimate ), which request must be made, (i) in the case of the election available at the end of the Malaga Initial Applicable Period, no later than the one hundred twentieth (120 th ) day before the end of the Malaga Initial Period, and (ii) in the case of the election available at the end of each twelve (12) month period following the end of the Malaga Initial Period (each a Subsequent Year ), the one-hundred twentieth (120) day before the end of such Subsequent Year.
2.2 Response to Request for Malaga Capacity Estimate . HEP Operating must respond to each request with a written Malaga Capacity Estimate within ten (10) days of HEP Operatings receipt of such request.
2.3 Malaga Exercise Notice . To exercise its option, HFRM must provide HEP Operating a written notice of exercise (an Malaga Exercise Notice ) no later than ninety (90) days prior to the end of the Malaga Initial Period or Subsequent Year (as applicable), which Malaga Exercise Notice must contain the amount (stated in bpd) by which HFRM desires to increase the Minimum Capacity Commitment for the Malaga Pipeline System for the next occurring Subsequent Year and the remainder of the Applicable Term. The amount of increase for which HFRM may exercise this option may not exceed the available uncommitted pipeline capacity for the Malaga Pipeline System as stated in the Malaga Capacity Estimate. If no written Malaga Exercise Notice is received by such ninetieth (90 th ) day, then HFRM will be deemed to have waived its option, though such waiver shall not preclude HFRM from exercising its option in Subsequent Years according the process set forth in this Section 2 .
2.4 Increase in Minimum Capacity Commitment and Minimum Throughput Commitment . If HFRM timely exercises its option at the end of the Malaga Initial Period or a
Exhibit G
Subsequent Year in accordance with this Section 2 , then, with respect to the next Subsequent Year and the remainder of the Applicable Term thereafter:
(a) the Minimum Capacity Commitment for the Malaga Pipeline System shall be increased by the amount specified in the Malaga Exercise Notice; and
(b) the Minimum Throughput Commitment shall be increased by an amount equal to the increase in the Minimum Capacity Commitment for the Malaga Pipeline System.
For example, if HFRM exercises its option at the end of the Malaga Initial Period to increase the Minimum Capacity Commitment for the Malaga Pipeline System from 40,000 bpd to 50,000 bpd (a 25% increase), then the Minimum Throughput Commitment shall be increased to equal 50,000 bpd (a 25% increase). This will have the effect of increasing the Minimum Pipeline Revenue Commitment by the operation of Section 2.2(a) of the Agreement.
3. Third Party Shipping . During the Malaga Initial Period, HFRM shall have the exclusive right to utilize the entire capacity of the Malaga Pipeline System. After the end of the Malaga Initial Period, if HEP Operating contracts with third parties to ship Crude Oil on the Malaga Pipeline System thereafter during the Applicable Term, subject to the terms of this Agreement, then HEP Operating may not charge any such third party transportation services fees, throughput fees, or other fees that are equal to or less on a per barrel basis (taking into account all applicable incentive tariffs and surcharges) than those charged to HFRM under this Agreement unless such third party agrees to minimum volume and revenue commitments equal to or in excess of those to which HFRM is subject hereunder. In the event that a third party with whom HEP has contracted agrees to minimum volume and revenue commitments that are equal to those to which HFRM is subject hereunder, and the transportation services fees, throughput fees, or other fees are less on a per barrel basis (taking into account all applicable incentive tariffs and surcharges) than those charged to HFRM under this Agreement, then the tariff rates charged to HFRM under this Agreement shall be automatically reduced to be equal to such third party tariff rates.
4. Storage . In addition, following the Malaga Commencement Date, HEP Operating agrees, for no additional fees, to provide storage services of up to 70,000 barrels with regard to Crude Oil shipped using the Malaga Pipeline System (30,000 barrels at the Whites City Road Station and 40,000 barrels at the Beeson Station) and provide limited in-tank Crude Oil blending services when operationally feasible at the HEP Operating Artesia Station to the specifications of HFRM, as such specifications may be adjusted from time to time.
5. Additional Applicable Tariff . The Parties hereby acknowledge that the Applicable Tariffs are in addition to tariffs applicable to volumes shipped on the Devon Lease Connections pursuant to the Crude Agreement.
Exhibit G
Exhibit G-1
to
Amended and Restated
Master Throughput Agreement
Map of Pipeline System and Pipeline System Capacity by Segment
See attached
Exhibit G-1
Exhibit G-1
Exhibit G-2
to
Amended and Restated
Master Throughput Agreement
Construction Projects
1. | Whites City Road Station |
a. | Build station at the intersection of the idle 8 pipe and Whites City County Road (coordinates _32.064421 Lat _104.135759_ Long). This station should include 30,000 barrels of tankage for crude to be injected into the 8 headed north. The amount of property to be leased or purchased will be sufficient to install up to 5 crude truck off-loading LACTS and their associated tanks. |
2. | HEP Artesia Station |
a. | Reactivate 8 Malaga Pipeline from the Whites City Road Station to the existing 30,000 barrel tank at HEP Artesia Station. |
b. | Build connecting 8 line between the reactivated 8 Malaga Pipeline and HEP Artesia Station for receipts of sweet crude originating from the Whites City Road Station. |
c. | Tie-in Millman Station and Devon Parkway sweet crude deliveries into the HEP Artesia Station 30,000 barrel tank, i.e., Devon Parkway barrels will be connected into and delivered to the Artesia Station tank. |
d. | Sweet crude oil deliveries out of HEP Artesia Station tank will be connected for delivery to Abo station. |
e. | Build 6 connecting pipeline approximately 6 miles to receive sweet barrels from the Devon Parkway into existing Millman System. |
f. | Build additional truck off loading facility at HEP Artesia Station. |
g. | Build 8 11-mile pipeline from HEP Artesia Station to Beeson Station. |
3. | HEP Beeson Station and Bisti Delivery |
a. | Build approximately 40,000 barrels of tankage at Beeson Station to receive sweet crude. |
b. | Build 6 pipeline (approximately 12 miles) to receive sweet barrels from the Devon Hackberry field. |
c. | Build connection from Anderson Ranch gathering system to the Devon Hackberry to Beeson Station connecting pipeline. This connection will be made to deliver sweet barrels through the Anderson Ranch pipe and deliver into the tank at the Beeson Station. |
d. | Install pumping capacity necessary for delivery into Plains Pipeline at Bisti (to deliver at a rate of up to 80,000 bpd). |
Exhibit G-2
e. | Build 12 12-mile pipeline from Beeson Station to Plains Pipeline System connection at Bisti. |
4. | Build NM sweet truck off-loading station at Whites City Road Station.* |
* | HEP Operating will manage and construct (4) above and be reimbursed by HFRM for the costs of managing and constructing (4). HEP Operating will at all times be the owner of (4), including during the period of construction. |
Exhibit G-2
Exhibit G-3
to
Amended and Restated
Master Throughput Agreement
Devon Lease Connections
Battery Name |
Field Name |
Location |
Status |
|||
Diamond | Parkway | 32.6519528 N 104.0701295 W | Producing | |||
Emerald | Parkway | 32.6525348 N 104.1045269 W | Producing | |||
Beryl | Parkway | 32.6109502 N 104.0829194 W | Producing | |||
Onyx | Parkway | 32.638176 N 104.093915 W | Producing | |||
Coral | Parkway | 32.6253952 N 104.0745216 W | Producing | |||
Turquoise | Parkway | 32.6365513 N 104.0701851 W | Producing | |||
Agate | Parkway | 32.6520074 N 104.0873003 W | Producing | |||
Jasper | Parkway | 32.623619 N 104.090791 W | Producing | |||
Beetle Juice 19 Fed #1H | Hackberry | 32° 39 7.41 N 103° 54 4.05 W | Producing | |||
Beetle Juice 19 Fed #3H | Hackberry | 32° 39 9.054 N 103° 54 43.471 W | Producing | |||
Capella 14 Fed #1H | Hackberry | 32° 40 0.638 N 103° 50 4.152 W | Producing | |||
Strawberry 7 Fed #2 | Hackberry | 32° 40 43 N 103° 54 20.8 W | Producing | |||
Strawberry 7 Fed #4 | Hackberry | 32° 40 6.93 N 103° 54 4.28 W | Producing | |||
Sirius 17 Fed #1H | Hackberry | 32° 39 59.165 N 103° 54 2.605 W | Producing | |||
Sirius 17 Fed #2H | Hackberry | 32° 39 47.98 N 103° 53 2.44 W | Producing | |||
Sirius 17 Fed #3H | Hackberry | 32° 39 30.98 N 103° 53 56.18 W | Producing | |||
Arcturus 18 Fed #1H | Hackberry | 32° 39 59.66 N 103° 54 2.607 W | Producing | |||
Arcturus 18 Fed #3H | Hackberry | 32° 39 23.058 103° 54 57.028 W | Producing | |||
Rigel 20 Fed Com #1H | Hackberry | 32° 39 7.185 N 103° 53 56.214 W | Producing | |||
Rigel 20 Fed Com #3H | Hackberry | 32° 38 36.881 N 103° 53 56.099 W | Producing | |||
Regulus 26 Fed #1 | Hackberry | 32° 63 76.832 N 103° 83 24.245 W | Producing | |||
Spica 25 Fed #1 | Hackberry | 32° 63 76.834 N 103° 83 22.620 W | Producing | |||
Vega 29 Fed Com #1 | Hackberry | 32° 63 77.726 N 103° 88 57.377 W | Producing | |||
Serene Sisters 25 Fed #1H | Hackberry | 32° 43 31.099 N 103° 49 3.506 W | Producing | |||
Serene Sisters 25 Fed #3H | Hackberry | 32° 42 42.721 N 103° 49 32.488 W | Producing |
Exhibit G-3
Exhibit H
to
Amended and Restated
Master Throughput Agreement
Special Provisions: El Dorado Assets
1. Change of Service . Subject to (i) any Applicable Law and (ii) technical specifications of the El Dorado Tankage, HFRM may request that HEP Operating change the service of any of the El Dorado Tankage from storage of one Product to storage of a different Product. If HEP Operating agrees to such request, HFRM shall indemnify and hold HEP Operating harmless from and against all costs and expenses associated with any such changing of service including costs of complying with any Applicable Law affecting such change of service.
2. Construction of New Tank . HEP Operating shall, or shall cause its Affiliate to, use its commercially reasonable efforts to construct a New Tank at the El Dorado Refinery in accordance with the specifications set forth on Exhibit H-3 . If HEP Operating or its Affiliate should fail to complete the New Tank is not completed or if the New Tank Commencement Date does not occur for the New Tank for a reason related to the fault of HEP Operating or its Affiliate or a matter that is within or under the control of HEP Operating or its Affiliate, HEP Operating shall bear all costs, liabilities and expenses with respect to such incomplete New Tank, and if HEP Operating or its Affiliate should fail to complete the New Tank or if the New Tank Commencement Date does not occur for the New Tank for any other reason, HFRM shall reimburse HEP Operating or its Affiliate for all costs, liabilities and expenses incurred by HEP Operating or its Affiliate with respect to such incomplete New Tank. Promptly following the New Tank Commencement Date, HEP Operating will deliver a written certification to HFRM certifying the final aggregate construction costs for the New Tank (the Final Construction Cost ). Additionally, promptly following the New Tank Commencement Date, the Parties shall execute an amended Exhibit H-2 reflecting the addition of the New Tank and attach it to this Agreement. Such amended Exhibit H-2 shall be numbered Exhibit H-2.1 , dated and appended as an additional schedule to this Agreement and shall replace the prior version of Exhibit H-2 in its entirety after its date of effectiveness.
Exhibit H
Exhibit H-1
to
Amended and Restated
Master Throughput Agreement
El Dorado Loading Rack
The Refined Products Truck Loading Rack and the Propane Truck Loading Rack transferred to El Dorado Logistics pursuant to that certain Conveyance, Assignment and Bill of Sale (El Dorado), dated effective as of October 25, 2011, by and between Frontier El Dorado and El Dorado Logistics.
Exhibit H-1
Exhibit H-2
to
Amended and Restated
Master Throughput Agreement
El Dorado Tankage
TANK ID NUMBER |
CURRENT SERVICE/PRODUCT |
NOMINAL CAPACITY, BBLS |
||
1 | Naptha | 2,885 | ||
2 | Naptha | 2,885 | ||
3 | ULSD | 40,425 | ||
15 | ULSD | 12,422 | ||
16 | Light Slop | 28,880 | ||
17 | Gasoline | 92,740 | ||
18 | Gasoline | 88,600 | ||
19 | Gasoline | 90,733 | ||
20 | Finish Gasoline | 17,961 | ||
21 | ULSD | 120,639 | ||
23 | ULSD | 113,182 | ||
24 | ULSD | 119,269 | ||
25 | Av Jet | 65,117 | ||
29 | CRU1 Feed | 33,723 | ||
30 | CRU2 Feed | 39,417 | ||
31 | ULSD | 23,792 | ||
32 | Finish Gasoline | 74,847 | ||
64 | Gasoline | 17,961 | ||
65 | Gasoline | 17,941 | ||
66 | Naptha | 22,582 | ||
75 | ULS k | 24,938 | ||
78 | ULS k | 9,226 | ||
127 | Heavy Slop | 20,504 | ||
652 | Sour Distilate | 90,000 | ||
642 | HTU2 Chg. | 78,511 | ||
134 | HTU2 Chg. | 76,492 | ||
649 | HTU4 CHg. | 100,000 | ||
137 | Gas Oil/Sour diesel | 191,899 | ||
138 | Gas Oil | 194,091 | ||
139 | Gas Oil | 74,792 | ||
142 | Gas Oil | 191,563 | ||
143 | Gas Oil | 191,570 | ||
159 | Slurry | 9,778 | ||
167 | Slurry | 8,908 | ||
650 | ULSD Dock | 36,000 | ||
178 | Coke Charge/Swing Tank | 80,000 |
Exhibit H-2
TANK ID NUMBER |
CURRENT SERVICE/PRODUCT |
NOMINAL CAPACITY, BBLS |
||
192 | Idled | 8,908 | ||
212 | Coker Chg. | 76,524 | ||
213 | Asphalt | 77,675 | ||
215 | AV Jet | 67,529 | ||
216 | Alkylate | 72,618 | ||
218 | Gas Oil | 77,675 | ||
219 | Reformate | 71,466 | ||
220 | Swing Tank | 71,495 | ||
221 | Gasoline Swing | 71,508 | ||
222 | Gasoline Swing | 71,509 | ||
223 | Reformate | 72,893 | ||
224 | Jet Fuel | 71,534 | ||
225 | HTU1 Chg, kerosene | 28,882 | ||
226 | Finish Gasoline | 27,679 | ||
227 | Natural Gasoline | 27,701 | ||
230 | Diesel (RAM) | 4,780 | ||
231 | Light Cycle (RAM) | 1,923 | ||
243 | Toluene | 11,300 | ||
244 | Toluene | 10,175 | ||
250 | FCCU Gasoline | 75,354 | ||
251 | FCCU Gasoline | 75,968 | ||
252 | FCCU Gasoline | 75,968 | ||
253 | Natural Gasoline | 74,653 | ||
254 | Isomerate | 19,318 | ||
255 | Isomerate | 19,318 | ||
256 | TEL Wash | 950 | ||
447 | Finish Gasoline | 17,730 | ||
448 | Gasoline | 16,109 | ||
453 | Ethanol | 5,121 | ||
457 | HTU3 Chg, LSR | 32,690 | ||
458 | Isomerate | 32,690 | ||
490 | ULSD | 116,094 | ||
600 | Propane | 625 | ||
601 | Propane | 625 | ||
602 | Propane | 625 | ||
603 | Propane | 625 | ||
604 | Propane | 625 | ||
605 | Propane | 625 | ||
606 | Propane | 625 | ||
607 | Propane | 625 | ||
608 | Propane | 625 | ||
609 | Propane | 625 | ||
610 | Propane | 625 |
Exhibit H-2
TANK ID NUMBER |
CURRENT SERVICE/PRODUCT |
NOMINAL CAPACITY, BBLS |
||
611 | Propane | 625 | ||
612 | Propane | 625 | ||
613 | Propane | 625 | ||
614 | Propane | 625 | ||
615 | Propane | 625 | ||
616 | Propane | 625 | ||
617 | Propane | 625 | ||
618 | Propane | 625 | ||
619 | Propane | 625 | ||
620 | Propane | 575 | ||
621 | Propane | 100 | ||
640 | Asphalt | 66,859 | ||
641 | Biodiesel | 6,813 | ||
643 | Sour distillate | 90,600 | ||
647 | Asphalt | 76,600 |
Exhibit H-2
Exhibit H-3
to
Amended and Restated
Master Throughput Agreement
Specifications for New Tank
TANK ID NUMBER |
CURRENT SERVICE/PRODUCT |
NOMINAL CAPACITY, BBLS |
||
651 | Heavy Atmospheric Gas Oil (GASO) | 32,000 |
Exhibit H-3
Exhibit I
to
Amended and Restated
Master Throughput Agreement
Special Provisions: Cheyenne Assets
1. Change of Service . Subject to (i) any Applicable Law and (ii) technical specifications of the Cheyenne Tankage, HFRM may request that HEP Operating change the service of any of the Cheyenne Tankage from storage of one Product to storage of a different Product. If HEP Operating agrees to such request, HFRM shall indemnify and hold HEP Operating harmless from and against all costs and expenses associated with any such changing of service including costs of complying with any Applicable Law affecting such change of service.
2. Construction of New Tank . HEP Operating shall, or shall cause its Affiliate to, use its commercially reasonable efforts to construct a New Tank at the Cheyenne Refinery in accordance with the specifications set forth on Exhibit I-3 . If HEP Operating or its Affiliate should fail to complete the New Tank is not completed or if the New Tank Commencement Date does not occur for the New Tank for a reason related to the fault of HEP Operating or its Affiliate or a matter that is within or under the control of HEP Operating or its Affiliate, HEP Operating shall bear all costs, liabilities and expenses with respect to such incomplete New Tank, and if HEP Operating or its Affiliate should fail to complete the New Tank or if the New Tank Commencement Date does not occur for the New Tank for any other reason, HFRM shall reimburse HEP Operating or its Affiliate for all costs, liabilities and expenses incurred by HEP Operating or its Affiliate with respect to such incomplete New Tank. Promptly following the New Tank Commencement Date, HEP Operating will deliver a written certification to HFRM certifying the final aggregate construction costs for the New Tank (the Final Construction Cost ). Additionally, promptly following the New Tank Commencement Date, the Parties shall execute an amended Exhibit I-2 reflecting the addition of the New Tank and attach it to this Agreement. Such amended Exhibit I-2 shall be numbered Exhibit I-2.1 , dated and appended as an additional schedule to this Agreement and shall replace the prior version of Exhibit I-2 in its entirety after its date of effectiveness.
Exhibit I
Exhibit I-1
to
Amended and Restated
Master Throughput Agreement
Cheyenne Loading Rack
The Refined Products Truck Loading Rack, including the Vapor Recovery Unit and the two (2) Propane Loading Spots transferred to Cheyenne Logistics pursuant to that certain Conveyance, Assignment and Bill of Sale (Cheyenne), dated effective as of October 25, 2011, by and between Frontier Cheyenne and Cheyenne Logistics.
Exhibit I-1
Exhibit I-2
to
Amended and Restated
Master Throughput Agreement
Cheyenne Receiving Assets
The four (4) Crude Oil LACTS Units, the Crude Oil Receiving Pipeline, and the petroleum storage tanks listed below under Petroleum Storage Tanks transferred to Cheyenne Logistics pursuant to that certain Conveyance, Assignment and Bill of Sale (Cheyenne), dated effective as of October 25, 2011, by and between Frontier Cheyenne and Cheyenne Logistics.
Petroleum Storage Tanks:
TANK ID NUMBER |
CURRENT SERVICE/PRODUCT |
NOMINAL CAPACITY, BBLS |
||
2-036 | Recovered Oil / Crude slop | 5,056 | ||
2-063 | Crude HSR | 10,096 | ||
2-067 | Crude LSR | 10,093 | ||
2-072 | Crude | 80,581 | ||
2-073 | Crude | 80,551 | ||
2-074 | Crude | 79,766 |
Exhibit I-2
Exhibit I-3
to
Amended and Restated
Master Throughput Agreement
Cheyenne Tankage
TANK ID NUMBER |
CURRENT SERVICE/PRODUCT |
NOMINAL CAPACITY, BBLS |
||
1-107 | Intermediate Distillate | 69,942 | ||
1-013 | Coker Distillate | 1,914 | ||
1-014 | Low Sul. Diesel | 24,677 | ||
1-015 | No Lead Gas | 24,677 | ||
1-016 | Ethanol | 2,564 | ||
1-017 | Prem. No Lead Gas | 5,034 | ||
1-020 | FCC Slurry Oil | 5,018 | ||
1-021 | Sweet Naphtha / VRU | 9,867 | ||
1-027 | Slop Oil | 4,000 | ||
1-028 | BioDiesel | 5,179 | ||
1-029 | Coker Gas Oil | 10,709 | ||
1-032 | Diesel | 10,124 | ||
1-033 | Coker Distillate | 10,342 | ||
1-040 | FCC Slurry Oil | 10,121 | ||
1-048 | Coker Distillate | 1,341 | ||
1-049 | Coker Distillate | 1,341 | ||
1-050 | Vacuum Bottoms | 67,428 | ||
1-051 | Slurry | 24,938 | ||
1-052 | PG 58-28 (Asphalt) | 72,017 | ||
1-053 | FCCU Slurry | 13,506 | ||
1-054 | FCCU Slurry | 24,938 | ||
1-055 | PG 58-28 (Asphalt) | 54,499 | ||
1-056 | Coker feed tank | 61,709 | ||
1-058 | Coker Gas Oil | 10,493 | ||
1-090 | PG 64-22 (Asphalt) | 55,954 | ||
1-091 | PG 58-28 (Asphalt) | 55,954 | ||
1-093 | PG 64-22 (Asphalt) | 2,602 | ||
1-094 | PG 64-22 (Asphalt) | 2,602 | ||
1-095 | PG 64-22 (Asphalt) | 2,602 | ||
1-106 | Naptha | 120,000 | ||
1-108 | Distillate | 107,000 | ||
1-117 | Vacuum Bottoms | 69,942 | ||
2-015 | Diesel | 28,870 | ||
2-016 | Diesel | 28,046 | ||
2-017 | UC Crack (LCO / Coker Distillate) | 28,562 |
Exhibit I-3
TANK ID NUMBER |
CURRENT SERVICE/PRODUCT |
NOMINAL CAPACITY, BBLS |
||
2-020 | Gas Oil | 10,746 | ||
2-021 | Gas Oil | 10,746 | ||
2-022 | UC Crack (LCO / Coker Distillate) | 9,731 | ||
2-023 | Coker Gas Oil | 10,583 | ||
2-028 | Cat Gas Oil | 80,153 | ||
2-034 | Reformate | 23,234 | ||
2-035 | Alkylate | 24,190 | ||
2-060 | Burner/Distillate | 9,846 | ||
2-061 | Sweet Naphtha | 10,096 | ||
2-062 | Naptha | 9,970 | ||
2-070 | Sub Grade No Lead Gas | 32,608 | ||
2-071 | Premium No Lead Gas | 32,612 | ||
2-075 | Finished NL gasoline | 80,278 | ||
2-100 | LSR/LSG | 41,978 | ||
2-101 | Diesel | 42,051 | ||
2-102 | No Lead Gas | 80,278 | ||
2-104 | Reformate | 54,749 | ||
2-105 | Cat Gas Oil | 54,954 | ||
2-118 | Light Straight Run | 40,609 | ||
2-119 | FCCU Cat Gas | 40,609 | ||
2-161 | Finished Diesel | 40,485 |
Exhibit I-3
Exhibit I-.4
to
Amended and Restated
Master Throughput Agreement
Specifications for New Tank
TANK ID NUMBER |
CURRENT SERVICE/PRODUCT |
NOMINAL CAPACITY, BBLS |
||
Exhibit I-4
Exhibit J
to
Amended and Restated
Master Throughput Agreement
Special Provisions: Tulsa East Assets
1. Change of Tankage Service . Subject to (i) any Applicable Law and (ii) technical specifications of the Tulsa Group 1 Tankage or the Tulsa Group 2 Tankage, HFRM may request that HEP Operating change the service of any of the Tulsa Group 1 Tankage or the Tulsa Group 2 Tankage from storage of one Product to storage of a different Product; provided, however , that HFRM shall indemnify and hold HEP Operating harmless from and against all costs and expenses associated with any such changing of service including costs of complying with any Applicable Law affecting such change of service.
2. Change of Interconnecting Pipeline Service . Subject to (i) any Applicable Law, (ii) technical specifications of the Tulsa Interconnecting Pipelines, and (iii) right-of-way and license agreements, HFRM may request that HEP Operating change the service of any of the Interconnecting Pipelines; provided, however, that HFRM shall indemnify and hold HEP Operating harmless from and against all costs and expenses associated with any such changing of service including costs of complying with any Applicable Law affecting such change of service.
Exhibit J
Exhibit J-1
to
Amended and Restated
Master Throughput Agreement
Tulsa Group 1 Loading Rack
The Propane Truck Loading Rack, Asphalt Truck Loading Rack and Gas Oil Truck Loading Rack transferred to HEP Tulsa LLC pursuant to that certain Bill of Sale, Assignment and Assumption Agreement, dated December 1, 2009, by and between Sinclair Tulsa Refining Company and HEP Tulsa LLC.
Exhibit J-1
Exhibit J-2
to
Amended and Restated
Master Throughput Agreement
Tulsa Group 1 Pipeline
The two Product Delivery Pipelines transferred to HEP Tulsa LLC pursuant to that certain Bill of Sale, Assignment and Assumption Agreement, dated December 1, 2009, by and between Sinclair Tulsa Refining Company and HEP Tulsa LLC.
Exhibit J-2
Exhibit J-3
to
Amended and Restated
Master Throughput Agreement
Tulsa Group 1 Tankage
TANK ID |
REFINED PRODUCT |
CAPACITY (BBLS) |
||
10 |
ULSD #2 (XT) | 37,500 | ||
11 |
ULSD #2 (XT) | 37,500 | ||
102 |
Kerosene | 37,500 | ||
103 |
Kerosene | 37,500 | ||
104A |
ULSD #2 (XT) | 37,500 | ||
110 |
ULSD #1 | 37,500 | ||
111 |
Kerosene | 37,500 | ||
115 |
ULSD #2 (XT) | 150,421 | ||
215 |
ULSD #2 (XT) | 150,421 | ||
116 |
Kerosene | 37,500 | ||
117 |
ULSD #2 (XT) | 63,300 | ||
450A |
Premium Unleaded | 12,574 | ||
451 |
USLD #2 (XT) | 11,700 | ||
452A |
USLD #2 (XT) | 12,000 | ||
464A |
Unleaded Regular | 73,000 | ||
465 |
Unleaded Regular | 79,320 | ||
466 |
Unleaded Regular | 79,320 | ||
467A |
Unleaded Regular | 73,000 | ||
470A |
Unleaded Regular | 151,020 | ||
472 |
Unleaded Regular | 151,000 | ||
473A |
Premium Unleaded (ST) | 151,020 | ||
601 |
Unleaded Regular | 18,634 | ||
602 |
Premium Unleaded (ST) | 10,743 | ||
603 |
USLD #2 (XT) | 2,000 | ||
605 |
Ethanol | 3,528 | ||
606 |
Empty | 500 |
Exhibit J-3
Exhibit J-4
to
Amended and Restated
Master Throughput Agreement
Tulsa Group 2 Loading Rack
The Rail Loading Rack transferred to HEP Tulsa LLC pursuant to that certain Conveyance, Assignment and Bill of Sale, dated March 31, 2010, by and between Holly Refining & Marketing Tulsa LLC and HEP Tulsa LLC.
Exhibit J-4
Exhibit J-5
to
Amended and Restated
Master Throughput Agreement
Tulsa Group 2 Tankage
TANK ID |
CURRENT SERVICE |
CAPACITY (BBLS) |
||
1 |
Crude | 130,450 | ||
2 |
Crude | 130,000 | ||
3 |
Crude | 116,579 | ||
8 |
Crude | 130,233 | ||
123 |
CSO | 37,500 | ||
471 |
Unleaded Gasoline | 71,371 | ||
107A |
Flux/Asphalt | 55,954 | ||
108A |
Flux/Asphalt | 37,500 | ||
109 |
Flux/Asphalt | 37,500 | ||
125 |
Flux/Asphalt | 37,500 | ||
131 |
Flux/Asphalt | 37,500 | ||
442 |
Gasoline blendstock | 11,700 | ||
445A |
Gasoline blendstock | 32,787 | ||
446 |
Gasoline blendstock | 11,700 | ||
444A |
Gasoline blendstock | 32,832 | ||
460 |
LSR | 80,000 | ||
461A |
LSR | 80,000 | ||
17 |
FCCU LCO | 37,500 | ||
114 |
Raw Diesel | 131,000 | ||
9 |
Raw gas oil | 150,260 | ||
15 |
Raw gas oil | 130,000 | ||
16 |
Raw gas oil-Sour | 151,078 | ||
6A |
Raw naphtha | 69,082 | ||
4 |
Scanfiner feed | 120,566 | ||
40 |
Raw gas oil | 5,734 | ||
41 |
CSO | 4,032 | ||
34 |
Truck loading-64/22 asphalt | 11,798 | ||
36A |
Truck loading-58/28 asphalt | 11,500 | ||
124A |
Flux/Asphalt | 37,500 | ||
18A |
Slop | 37,500 | ||
31 |
Slop | 15,000 | ||
7A |
Naptha | 69,082 | ||
14 |
Naptha | 55,000 |
Exhibit J-5
Exhibit K
to
Amended and Restated
Master Throughput Agreement
Special Provisions: El Dorado Crude Tank Farm Assets
1. | El Dorado Terminal Operation . HEP Operating will use commercially reasonable efforts to maintain the El Dorado Terminals current connections to the pipelines owned and operated by (a) Osage Pipe Line Company, LLC (the Osage Pipeline ), (b) Rose Rock Midstream, L.P. (the Rose Rock Pipeline ), and (c) MV Purchasing, LLC (the MVP Pipeline ), but shall not be required to expend additional monies in connection therewith unless agreed separately in writing with HFRM. HFRM may request HEP Operating to connect the El Dorado Crude Tankage to new pipelines, whether owned by third parties or by HFRM, subject to HEP Operatings approval of such connections and the engineering standards related to such; HEP Operating will not unreasonably withhold such approval. If HEP Operating approves any new connection requested by HFRM, HFRM will reimburse HEP Operating the actual expenses incurred by HEP Operating that are associated with such connection, plus an administrative charge of fifteen percent (15%). In addition, the Minimum Throughput Commitment will be increased to account for any additional expense HEP Operating bears in connection with ongoing operating expenses associated with such requested pipeline connection. Any HEP Operating expenditures requested by HFRM beyond pipeline connections will be negotiated separately. |
2. | Tank Use . HEP Operating shall make available to HFRM on an exclusive basis the shell capacity, minimum and maximum capacities, and working capacity for the El Dorado Crude Tankage. HEP Operating will make at least two (2) of such tanks available for blending services at all times during the Applicable Term. HEP Operating and HFRM will work together to assign minimum and maximum capacities of each tank within sixty (60) days following the commencement of the Applicable Term. These minimum and maximum capacities will be set to allow the most working capacity available to HFRM within reasonable industry practices. The minimum and maximum capacity for each tank will be used to determine the working capacity of each tank (calculated by subtracting the minimum capacity from the maximum capacity for each Tank) (the Working Capacity ). Once the Working Capacity is agreed upon, HEP may assign, in its sole discretion, new maximum and minimum capacities to each tank if required to allow for safe operation. If HEP determines it is necessary to reduce the aggregate Working Capacity to less than 650,000 Barrels (as such volume may be adjusted pursuant to Section 4 of this Exhibit K (the El Dorado Minimum Working Capacity ), the Minimum Throughput Commitment will be reduced proportionately. HFRM may deliver or have delivered Product into the El Dorado Crude Tankage from the El Dorado Refinery, the Osage Pipeline, the Rose Rock Pipeline or the MVP Pipeline. HFRM agrees not to deliver to the Terminal any Products which fail to meet the El Dorado Quality Specifications, or which would in any way be injurious to the El Dorado Crude Tankage, or that may not lawfully be handled in the Tankage. HFRM shall be responsible for and pay for all damages resulting from handling of any Products by HFRM, its designee, or its consignee; provided, however, so long as the Products meet the El Dorado Quality Specifications, HFRM shall not be responsible for damages arising from the negligence or willful misconduct of HEP, its agents, employees or contractors or from ordinary wear and tear. |
3. |
Terminal Maintenance, Changes, or Installations . HEP Operating shall make the El Dorado Crude Tankage available for HFRMs exclusive use except for times at which a tank must be taken out of service for routine maintenance, in which event HEP Operating will use |
Exhibit K
commercially reasonable efforts to minimize the duration of the outage. HEP Operating may take more than one tank out of service due to unplanned maintenance, environmental, or operational occurrences and may schedule more than one tank out of service if the duration is minimal (i.e. less than 1 week for seal inspection or mixer repair on top of an API 653 of another tank), but HEP Operating will not schedule more than one tank out of service for extended overlapping periods (e.g., two API 653s at the same time overlapping 1+ weeks). HEP Operating will provide HFRM written notice at least forty-five (45) days prior to any scheduled maintenance, changes or installations affecting the El Dorado Crude Tankage. In the event HEP Operating cannot provide any or all of the services during any maintenance, changes or installations within the El Dorado Terminal, or if such maintenance, changes or installations causes HEP Operating to take any tank out of service and HEP Operating does not provide a substitute tank in the place of such tank, the Minimum Throughput Commitment shall be reduced by the Working Capacity of such out-of-service tank for the duration of such outage. |
4. | Right of First Refusal . HEP Operating may not lease or pledge or commit to provide any storage services with respect to the El Dorado Crude Tankage or the Jayhawk Tankage (after the expiration of the Jayhawk Lease) at the El Dorado Terminal to a third party unless HEP Operating first offers to HFRM the exclusive right to use the Working Capacity of such tanks on substantially the same terms as HEP Operating has previously negotiated with a third party in arms-length negotiations. HFRM will have thirty (30) days (the El Dorado Crude Tank Farm Consideration Period ) to consider the option to utilize such Working Capacity and to provide notice to HEP Operating of its election to accept or decline such Working Capacity. If HFRM has not notified HEP Operating within 30 days, then HEP Operating may proceed to enter into an agreement with the third party for such Working Capacity; provided, however, that if HEP Operating does not enter into an agreement with the third party within sixty (60) days following HFRMs notice to decline or the expiration of the El Dorado Crude Tank Farm Consideration Period, then HFRMs rights under this Section 4 will apply to any subsequent bona fide third party offer to HEP Operating regarding such Working Capacity. |
5. | Jayhawk Tankage . In the event that the Jayhawk Lease expires or is otherwise terminated or cancelled for any reason and the Jayhawk Tankage are not leased within a reasonable time (not to exceed sixty 60) days) to a third party as contemplated by Section 4 of this Exhibit K , HEP Operating agrees to make the Working Capacity of the Jayhawk Tankage available for HFRMs exclusive use, and HFRM agrees to increase the Minimum Throughput Commitment by an amount equal to (a) the monthly storage fee that Jayhawk paid to HEP Operating during the last 12 months of the Jayhawk Lease, divided b y the Working Capacity of the Jayhawk Tankage, and the El Dorado Minimum Working Capacity shall be increased by an amount equal to two-thirds (2/3) of the Working Capacity of such Jayhawk Tankage. HFRMs use of the Jayhawk Tankage will be added to this Agreement as an amendment with all terms and conditions being consistent with this Agreement, and thereafter the term El Dorado Crude Tankage as used herein shall include the Jayhawk Tankage. |
6. | Right to Refuse. HEP Operating reserves the right to refuse receipt of any Product into the El Dorado Terminal, alternatively route such Product to another location, or take other appropriate action in regards to such Product if Product does not meet the El Dorado Quality Specifications. HFRM, if requested in writing, will provide HEP Operating with notice setting forth the quantity, quality, and specifications of Product to be delivered a minimum of four (4) hours prior to any delivery to the El Dorado Terminal. Any reasonable costs incurred by HEP Operating in connection with addressing or handling HFRMs Product that does not meet the El Dorado Quality Specifications shall be borne by HFRM. |
Exhibit K
7. | Terminal Damage or Destruction. If any part of the El Dorado Terminal or the El Dorado Crude Tankage are damaged or destroyed by fire or other casualty, HEP Operating shall have the discretion to reduce receipts into and deliveries out of the El Dorado Terminal and to allocate any remaining El Dorado Terminal capacity and throughput fairly and reasonably among various customers utilizing terminalling services at the El Dorado Terminal. HEP Operating may, but shall not be obligated to, repair or replace such damaged or destroyed terminal facilities or Tanks. |
8. | Delivery Lines . The El Dorado Crude Tankage is connected to the El Dorado Refinery by two 16 delivery lines, together with associated piping necessary for Product movements into and out of the El Dorado Crude Tankage (the El Dorado Delivery Lines ). HEP Operating will operate the El Dorado Delivery Lines for HFRMs exclusive use. HEP Operating will operate one of the 16 El Dorado Delivery Lines for Product movements from the El Dorado Crude Tankage to the El Dorado Refinery with a capacity to deliver (a) 130,000 bpd based on a maximum viscosity of 350 SUS at 60 degrees Fahrenheit when operating only one El Dorado Delivery Line, and (b) 165,000 bpd based on a maximum viscosity of 350 SUS at 60 degrees Fahrenheit when operating both El Dorado Delivery Lines. HEP Operating will operate the other 16 El Dorado Delivery Line for bidirectional use. HEP Operating will maintain the El Dorado Delivery Lines to gravity feed Product to the El Dorado Refinery or, upon request of HFRM, to pump Product to the El Dorado Refinery at a pressure of at least 25 psig (when operating one El Dorado Delivery Line) and 50 psig (when operating both El Dorado Delivery Lines), as measured at the El Dorado Refinery receipt point. HEP Operating will maintain at least two (2) full-sized pumps for this service and will operate the pumps at HFRMs request. |
9. | Products Testing . At HFRMs request and upon HEP Operatings approval, such approval not to be unreasonably withheld, delayed or conditioned, HEP Operating shall provide sampling and testing services for HFRMs Products at the El Dorado Terminal. All fees for Product testing shall be billed to HFRM at HEP Operatings actual cost. |
Exhibit K
Exhibit K-1
to
Amended and Restated
Master Throughput Agreement
El Dorado Crude Tankage and Jayhawk Tankage
1. | El Dorado Crude Tankage : |
Tank ID Number |
Current Service/Product |
Nominal Capacity, BBLs |
||
4150 |
Crude | 80,000 | ||
4153 |
Crude | 80,000 | ||
4154 |
Crude | 80,000 | ||
4155 |
Crude | 125,000 | ||
4156 |
Crude | 125,000 | ||
4157 |
Crude | 125,000 | ||
4158 |
Crude | 125,000 | ||
4159 |
Crude | 125,000 | ||
4160 |
Crude | 125,000 |
2. | Jayhawk Tankage : |
Tank ID Number |
Current Service/Product |
Nominal Capacity, BBLs |
||
4151 |
Crude | 80,000 | ||
4152 |
Crude | 80,000 |
Exhibit K-1
Exhibit K-2
to
Amended and Restated
Master Throughput Agreement
El Dorado Terminal Quality Specifications
Petroleum liquid that has a true vapor pressure equal to or greater than 1.5 psia but not greater than 11.1 psia.
Exhibit K-2