TULSA EQUIPMENT AND THROUGHPUT AGREEMENT
Exhibit 10.3
EXECUTION VERSION
This Tulsa Equipment and Throughput Agreement is being entered into on August 1, 2009 (this
“Agreement”), by and between Xxxxx Refining & Marketing — Tulsa LLC, a Delaware
corporation, (“Tulsa Refining”), and HEP Tulsa LLC, a Delaware limited liability company
(“HEP Tulsa”). Each of Tulsa Refining and HEP Tulsa is individually referred to herein as
a “Party” and collectively as the “Parties.”
RECITALS:
WHEREAS, on June 1, 2009, Tulsa Refining acquired the Tulsa Refinery, including the Tulsa
Loading Racks (each as defined below), from Sunoco, Inc. (R&M);
WHEREAS, on the date hereof, HEP Tulsa is acquiring the Tulsa Loading Racks from Tulsa
Refining pursuant to an Asset Purchase Agreement (the “Asset Purchase Agreement”) and will
be granted certain access and other rights with respect to the Tulsa Loading Racks pursuant to a
Facility Sites, Access and Rail Line License Agreement;
WHEREAS, HEP Tulsa is substantially dependent upon Tulsa Refining for the volumes of Products
(as defined below) handled at the Tulsa Loading Racks such that a significant reduction in Tulsa
Refining’s use of the Tulsa Loading Racks would likely result in a correspondingly significant
reduction in the financial and commercial success of HEP Tulsa; and
WHEREAS,
Tulsa Refining and HEP Tulsa desire to enter into this Agreement.
NOW, THEREFORE, the parties to this Agreement hereby agree 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, excluding, in the case of Tulsa Refining, the Partnership Group
Members and excluding, in the case of HEP Tulsa, the Xxxxx Group Members.
“Agreement” has the meaning set forth in the introduction.
“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.
“Arbitrable Dispute” means any and all disputes, Claims, controversies and other
matters in question between HEP Tulsa, on the one hand, and Tulsa Refining, on the other hand,
arising out of or relating to this Agreement or the alleged breach hereof, or in any way relating
to the subject matter of this 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.
“Asset Purchase Agreement” has the meaning set forth in the recitals.
“Base Tariff” has the meaning set forth in Section 2(a)(ii).
“bpd” means barrels per day.
“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.
“Claimant” has the meaning set forth in Section 13(f).
“Contract Year” means a year that commences on July 1 and ends on the last day of
June, except that the initial Contract Year shall commence on August 1, 2009.
“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.
“Deficiency Notice” has the meaning set forth in Section 11(a).
“Deficiency Payment” has the meaning set forth in Section 11(a).
“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, without limitation, the federal Comprehensive Environmental Response,
Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource
Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the
Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous
Materials Transportation Act, and other environmental conservation and protection laws, each as
amended from time to time.
“Force Majeure” means acts of God, strikes, lockouts or other industrial disturbances,
acts of the public enemy, wars, blockades, insurrections, riots, storms, floods, washouts, arrests,
the order of any court or Governmental Authority having jurisdiction while the same is in force and
effect, civil disturbances, explosions, breakage, accident to machinery, storage tanks or lines of
pipe, inability to obtain or unavoidable delay in obtaining material or equipment, and any other
causes whether of the kind herein enumerated or otherwise not reasonably within the
2
control of the party claiming suspension and which by the exercise of due diligence such party
is unable to prevent or overcome.
“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, without
limitation, 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 Tulsa” has the meaning set forth in the introduction.
“Xxxxx Group” means Xxxxx Corporation, a Delaware corporation, and Tulsa Refining and
any Subsidiary of Tulsa Refining, treated as a single consolidated entity.
“Xxxxx Group Member” means any member of the Xxxxx Group.
“Incentive Tariff” has the meaning set forth in Section 2(a)(ii).
“Indemnified Party” means the party to this Agreement seeking indemnification under
Section 5.
“Indemnifying Party” means the party to this Agreement from whom indemnification is
sought under Section 5.
“Limited Partner” has the meaning set forth in the Partnership Agreement.
“Minimum Revenue Commitment” has the meaning set forth in Section 2(a)(i).
“Minimum Throughput” has the meaning set forth in Section 2(a)(ii).
“Omnibus Agreement” means the Second Amended and Restated Omnibus Agreement, dated as
of August 1, 2009, among Xxxxx Corporation, the Partnership and certain of their respective
subsidiaries, as amended from time-to-time.
“PPI” has the meaning set forth in Section 2(a)(iii).
“Partnership” means Xxxxx Energy Partners, L.P., a Delaware limited partnership.
“Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of Xxxxx Energy Partners, L.P., dated July 13, 2004, as amended by Amendment No. 1 to
the First Amended and Restated Agreement of Limited Partnership of Xxxxx Energy
3
Partners, L.P., dated February 28, 2005, as amended by Amendment No. 2 to the First Amended
and Restated Agreement of Limited Partnership of Xxxxx Energy Partners, L.P., dated July 6, 2005,
as amended by Amendment No. 3 to the First Amended and Restated Agreement of Limited Partnership of
Xxxxx Energy Partners, L.P., dated April 11, 2008, as such agreement is in effect on the date of
this Agreement. 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 to this Agreement.
“Partnership Group” means the Partnership, Xxxxx Energy Partners — Operating, L.P. and
any Subsidiary of any such Person, treated as a single consolidated entity.
“Partnership Group Member” means any member of the Partnership Group.
“Party” or “Parties” has the meaning set forth in the introduction.
“Payment Obligations” has the meaning set forth in Section 14(a).
“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.
“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.
“Products” means gasolines, diesel fuel, jet fuel, kerosene, heating oil, distillates,
transmix, liquefied petroleum gas, natural gas liquids, blend stocks, specialty lubricants,
ethanol, gas oil, naphtha, xxxxx feed, and any other feedstock or blendstock that may be moved
across the Tulsa Loading Racks.
“Purchase Option Agreement” means the Tulsa Purchase Option Agreement, dated August 1,
2009, between Tulsa Refining and HEP Tulsa.
“Refund” has the meaning set forth in Section 11(c).
“Respondent” has the meaning set forth in Section 13(f).
“Subsidiary” means with respect to any Person, (a) a corporation of which more than
50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to
vote in the election of directors or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such
Person or a combination thereof, (b) a partnership (whether general or limited) in which such
Person or a Subsidiary of such Person is, at the date of determination, a general or limited
partner of such partnership, but only if more than 50% of the partnership interests of such
partnership (considering all of the partnership interests of the partnership as a single class) is
owned, directly or indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such
4
Person, or a combination thereof, or (c) any other Person (other than a corporation or a
partnership) in which such Person, one or more Subsidiaries of such Person, or a combination
thereof, directly or indirectly, at the date of determination, has (i) at least a majority
ownership interest or (ii) the power to elect or direct the election of a majority of the directors
or other governing body of such Person.
“Term” has the meaning set forth in Section 7.
“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.
“Tulsa Loading Racks” means the loading racks described on Exhibit A attached
hereto, as such Exhibit may be amended or revised from time-to-time by mutual agreement of Tulsa
Refining and HEP Tulsa.
“Tulsa Refinery” means the refinery owned by Tulsa Refining located at 0000 X. Xxxxx
Xxxxxx, Xxxxx, Xxxxxxxx 00000.
“Tulsa Refining” has the meaning set forth in the introduction.
Section 2. Agreement to Use Tulsa Loading Racks
The parties intend to be strictly bound by the commercial terms set forth in this Agreement.
The principal objective of HEP Tulsa is for Tulsa Refining to meet or exceed the 12,500 bpd minimum
volume commitment as calculated on a monthly basis.
(a) Throughput and Rate; Minimum Revenue Commitment. During the Term and subject to
the terms and conditions of this Agreement, Tulsa Refining agrees as follows:
(i) Subject to Section 3, Tulsa Refining will load or unload by tanker truck or rail
car at the Tulsa Loading Racks an amount of Products in the aggregate that will satisfy the Minimum
Revenue Commitment for each contract month. The “Minimum Revenue Commitment” shall be an
amount of revenue to HEP Tulsa for each contract month determined by multiplying the Minimum
Throughput times the Base Tariff.
(ii) Tulsa Refining will pay HEP Tulsa a fee of $0.60 per barrel (the “Base Tariff”),
as such Base Tariff may be revised pursuant to Section 2(a)(iii) and Schedule I
attached hereto, for the first 12,500 bpd of Products calculated on a monthly basis, or such other
amount of Products that is mutually agreed upon by the Parties pursuant to Section 3 (the
“Minimum Throughput”), received at or shipped from the Tulsa Loading Racks and a fee of
$0.30 per barrel (the “Incentive Tariff”), as such Incentive Tariff may be revised pursuant
to Section 2(a)(iii) and Schedule I attached hereto, for volumes in excess of the
Minimum Throughput received at or shipped from the Tulsa Loading Racks. No later than 15 days
after the end of each month during the Term, Tulsa Refining shall: (A) provide HEP Tulsa with a
report detailing the number of barrels of Products received at or shipped from the Tulsa Refinery
via the Tulsa Loading Racks for that month and (B) within ten days after receiving an invoice from
HEP Tulsa, pay HEP
5
Tulsa the payment owed pursuant to this Section 2(a)(ii) and Section 11.
Payments not received by HEP Tulsa on or prior to the applicable payment date will accrue interest
at the Prime Rate from the applicable payment date until paid.
(iii) Each of the Base Tariff and the Incentive Tariff shall be adjusted on July 1 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; provided,
however, that such adjustment shall not exceed 3.0% in any Contract Year. The series ID is
WPUSOP3000 as of December 31, 2007 — located at
xxxx://xxx.xxx.xxx/xxxx/. 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 2006 change is: [PPI (2005) — PPI (2004)] / PPI (2004) or (155.7 — 148.5) / 148.5 or .0485 or 4.85%, which would then be rounded down to 3.0% so as not to exceed the 3.0% cap. If the
PPI index change is negative in a given year then there will be no change in the Base Tariff or the
Incentive Tariff. If the above index is no longer published, the Parties shall 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
Base Tariff and the Incentive Tariff. If the Parties are unable to agree, a new index will be
determined by binding arbitration in accordance with Section 13(f), and the same method of
adjustment for increases in the new index shall be used to calculate increases in the Base Tariff
and the Incentive Tariff. To evidence the Parties agreement to each adjusted Base Tariff and
Incentive Tariff, the Parties shall execute an amended, modified, revised or updated Schedule
I and attach it to this Agreement. 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.
(b) Operation and Maintenance of Tulsa Loading Racks.
(i) During the Term, (1) HEP Tulsa hereby retains Tulsa Refining, and Tulsa Refining hereby
accepts such retention, to (at Tulsa Refining’s sole cost and expense) manage, operate and maintain
the Tulsa Loading Racks for and on behalf of HEP Tulsa; (2) HEP Tulsa hereby authorizes Tulsa
Refining to do and perform any and all acts and things necessary, requisite or proper for the
efficient and safe operation, maintenance, upkeep and repair of the Tulsa Loading Racks and to do
all other things that Tulsa Refining deems necessary or appropriate to the accomplishment of the
purposes of this Agreement, so that the Tulsa Loading Racks may be utilized to load or unload at
the Tulsa Loading Racks an average of 12,500 bpd of Products; and (3) Tulsa Refining shall manage
and direct such operation, maintenance, upkeep and repair in an efficient, safe and economical
manner and in accordance with all valid and applicable laws, rules and regulations of governmental
authorities.
(ii) During the Term, Tulsa Refining shall maintain in effect all material licenses,
authorizations, permissions or permits of a Governmental Authority necessary to operate the Tulsa
Loading Racks.
6
(c) Exclusive Use; Insurance.
(i) HEP Tulsa agrees that during the Term, Tulsa Refining and its Affiliates shall have the
exclusive right to use the Tulsa Loading Racks.
(ii) During the Term, Tulsa Refining agrees to carry and keep in full force and effect
insurance, including, without limitation, general liability and commercial property insurance,
covering the Tulsa Loading Racks for the protection of the Parties that is customary for businesses
of their type.
(iii) During the Term if any of the Tulsa Loading Racks are damaged or destroyed, then Tulsa
Refining shall, in its sole discretion, either (x) rebuild or repair such damaged or destroyed
Tulsa Loading Racks or (y) pay HEP Tulsa an amount equal to the replacement cost of such damaged or
destroyed Tulsa Loading Racks. In the event the Parties are unable to agree on the replacement
cost of the Tulsa Loading Racks, the replacement cost shall be determined by binding arbitration in
accordance with Section 13(f).
(d) Equipment Expansions and Modifications. From time-to-time the parties may agree
to expand or modify certain equipment covered by this Agreement, including refined products loading
racks and other equipment. In connection with the expansion or modification of such equipment, 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 B is a list of current expansion or modification projects agreed to by the
parties hereto and the terms of such projects. Exhibit B may be amended, modified,
revised or updated from time-to-time 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 shall execute an
amended, modified, revised or updated Exhibit B and attach it to this Agreement. Such
amended, modified, revised or updated Exhibit B shall be sequentially numbered (e.g.
Exhibit X-0, Xxxxxxx X-0, etc.), dated and appended as an additional exhibit to
this Agreement and shall replace the prior version of Exhibit B in its entirety, except as
specified therein.
(e) Taxes. Tulsa Refining will pay all taxes, import duties, license fees and other
charges by any Governmental Authority levied on the Products delivered by Tulsa Refining for
transportation through the Tulsa Loading Racks. Subject to Article 3 of the Asset Purchase
Agreement, Tulsa Refining will pay all real property taxes by any Governmental Authority levied on
the real property on which the Tulsa Loading Racks are located and HEP Tulsa will pay all real
property taxes, if any, or personal property taxes by any Governmental Authority levied on the
Tulsa Loading Racks.
7
(f) Books and Records. During the Term, HEP Tulsa shall have the right, no more than
twice in any twelve month period, to review and audit Tulsa Refining’s books and records relating
to the volume of Products received at or shipped from the Tulsa Loading Racks for purposes of
verifying Tulsa Refining’s compliance with Section 2(a)(ii). Any review, audit or
investigation undertaken by HEP Tulsa shall be at HEP Tulsa’s own cost and expense.
(g) Monthly Surcharge. If new laws or regulations are enacted that require HEP Tulsa
to make substantial and unanticipated capital expenditures with respect to the Tulsa Loading Racks,
HEP Tulsa may impose a monthly surcharge to cover HEP Tulsa’s cost of complying with these laws or
regulations. Tulsa Refining and HEP Tulsa shall use their reasonable commercial efforts to comply
with these laws and regulations and shall negotiate in good faith to mitigate the impact of these
laws and regulations 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 by binding
arbitration in accordance with Section 13(f). Any 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(g).
Section 3. Exceptions to Tulsa Refining’s Obligations
(a) Shut Down or Reconfiguration of Tulsa Refinery. Tulsa Refining must deliver to
HEP Tulsa at least six months advance written notice of any planned shut down or reconfiguration
(excluding planned maintenance turnarounds) of the Tulsa Refinery or any portion of the Tulsa
Refinery that would reduce the Tulsa Refinery’s output. Tulsa Refining will use its commercially
reasonable efforts to mitigate any reduction in revenues or throughput obligations under this
Agreement that would result from such a shut down or reconfiguration. If Tulsa Refining shuts down
or reconfigures the Tulsa Refinery or any portion of the Tulsa Refinery (excluding planned
maintenance turnarounds) and reasonably believes in good faith that such shut down or
reconfiguration will jeopardize its ability to satisfy its Minimum Revenue Commitment under this
Agreement, then within 90 days of the delivery of the written notice of the planned shut down or
reconfiguration unless it is exercising its right to purchase the Tulsa Loading Racks pursuant to
Section 3(a) of the Purchase Option Agreement, Tulsa Refining 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 Tulsa within 60 days of receipt by HEP
Tulsa of such proposal, such new Minimum Revenue Commitment shall become effective as of the date
proposed by Tulsa Refining. To the extent that HEP Tulsa does not agree with Tulsa Refining’s
proposal, any changes in Tulsa Refining’s obligations under this Agreement, or the date on which
such changes will take effect, will be determined by binding arbitration in accordance with
Section 13(f). 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 Tulsa Refining’s Minimum Revenue Commitment agreed to in accordance with this
Section 3(a).
8
(b) Force Majeure. In the event that any party is rendered unable, wholly or in part,
by a Force Majeure event from performing its obligations under this Agreement for a period of more
than 30 days, then upon the delivery of notice and full particulars of the Force Majeure event in
writing within a reasonable time after the occurrence of the Force Majeure event relied on, the
obligations of the parties, so far as they are affected by the Force Majeure event, shall be
suspended for the duration of any inability so caused. Any suspension of the obligations of the
parties as a result of this Section 3(b) shall extend the Term. Tulsa Refining will be
required to pay any amounts accrued and due under this Agreement at the time of the Force Majeure
event. The cause of the Force Majeure event shall so 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. In the
event a Force Majeure event prevents HEP Tulsa or Tulsa Refining from performing its obligations
under this Agreement for a period of more than one year, this Agreement may be terminated by HEP
Tulsa or Tulsa Refining.
Section 4. Agreement to Remain Shipper
With respect to any Products that are produced at the Tulsa Refinery and handled at any Tulsa
Loading Rack, Tulsa Refining agrees that it will continue its historical commercial practice of
owning such Products handled at a Tulsa Loading Rack and to continue acting in the capacity of the
shipper of any such Products for its own account at all times that such Products are being handled
at the Tulsa Loading Racks.
Section 5. Indemnification
(a) Indemnification of HEP Tulsa. Tulsa Refining shall indemnify, defend and hold
harmless HEP Tulsa from and against any losses, damages, liabilities, Claims, demands, causes of
action, judgments, settlements, fines, penalties, costs, and expenses (including, without
limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or
character, known or unknown, fixed or contingent, suffered or incurred by HEP Tulsa, including
environmental and Toxic Tort losses, to the extent arising out of:
(i) events and conditions associated with the operation of the Tulsa Loading Racks and
occurring (x) before the date of this Agreement or (y) during the Term while Tulsa Refining is
operating the Tulsa Loading Racks (except, in the case of (y), to the extent arising out of (aa)
the gross negligence or willful misconduct of HEP Tulsa, its agents, employees, contractors,
Affiliates or assignees at the Tulsa Refinery in connection with activities undertaken by any such
Persons at or with respect to the Tulsa Refinery, or (bb) the operation of the Tulsa Loading Racks
at the direction of HEP Tulsa by any Person other than (A) Tulsa Refining or its Affiliates or (B)
a Person operating the Tulsa Loading Racks at the direction of Tulsa Refining or its Affiliates,
and in the case of (bb), arising out of the negligent acts or omissions or willful misconduct of
such Person),
(ii) all legal actions pending against Tulsa Refining on August 1, 2009,
(iii) all federal, state and local tax liabilities attributable to (A) the operation or
ownership of the Tulsa Loading Racks prior to the date of this Agreement and (B) the operation
9
of the Tulsa Loading Racks during the Term while Tulsa Refining is operating the Tulsa Loading
Racks,
(iv) any violation or correction of violation of Environmental Laws associated with the
ownership or operation of the Tulsa Loading Racks occurring (x) prior to the date of this Agreement
or (y) during the Term while Tulsa Refining is operating the Tulsa Loading Racks (except, in the
case of (y), to the extent associated with the operation of the Tulsa Loading Racks at the
direction of HEP Tulsa by any Person other than (1) Tulsa Refining or its Affiliates or (2) a
Person operating the Tulsa Loading Racks at the direction of Tulsa Refining or its Affiliates), or
(v) any environmental or Toxic Tort event or condition associated with ownership or operation
of the Tulsa Loading Racks (including, without limitation, the presence of Hazardous Substances on,
under, about or migrating to or from the Tulsa Loading Racks or the disposal or release of
Hazardous Substances generated by operation of the Tulsa Loading Racks) occurring (x) prior to the
date of this Agreement or (y) during the Term while Tulsa Refining is operating the Tulsa Loading
Racks (except, in the case of (y), to the extent associated with the operation of the Tulsa Loading
Racks at the direction of HEP Tulsa by any Person other than (1) Tulsa Refining or its Affiliates
or (2) a Person operating the Tulsa Loading Racks at the direction of Tulsa Refining or its
Affiliates), including, without limitation, (A) the cost and expense of any investigation,
assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or
other corrective action required or necessary under Environmental Laws, (B) the cost or expense of
the preparation and implementation of any closure, remedial, corrective action, or other plans
required or necessary under Environmental Laws, and (C) the cost and expense for any environmental
or Toxic Tort pre-trial, trial, or appellate legal or litigation support work.
(b) Indemnification of Tulsa Refining. HEP Tulsa shall indemnify, defend and hold
harmless Tulsa Refining from and against any losses, damages, liabilities, Claims, demands, causes
of action, judgments, settlements, fines, penalties, costs, and expenses (including, without
limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or
character, known or unknown, fixed or contingent, suffered or incurred by Tulsa Refining, including
environmental and Toxic Tort losses, to the extent arising out of:
(i) the gross negligence or willful misconduct of HEP Tulsa, its agents, employees,
contractors, Affiliates or assignees at the Tulsa Refinery in connection with activities undertaken
by any such Persons at or with respect to the Tulsa Refinery,
(ii) the operation of the Tulsa Loading Racks at the direction of HEP Tulsa by any Person
other than (x) Tulsa Refining or its Affiliates or (y) a Person operating the Tulsa Loading Racks
at the direction of Tulsa Refining or its Affiliates, and arising out of the negligent acts or
omissions or willful misconduct of such Person,
(iii) any violation or correction of violation of Environmental Laws associated with (x) the
operation of the Tulsa Loading Racks at the direction of HEP Tulsa by any Person other than (1)
Tulsa Refining or its Affiliates or (2) a Person operating the Tulsa Loading Racks
10
at the direction of Tulsa Refining or its Affiliates, or (y) the ownership of the Tulsa
Loading Racks after the Term by any Person other than Tulsa Refining or its Affiliates, or
(iv) any environmental or Toxic Tort event or condition associated with (x) the operation of
the Tulsa Loading Racks (including, without limitation, the presence of Hazardous Substances on,
under, about or migrating to or from the Tulsa Loading Racks or the disposal or release of
Hazardous Substances generated by operation of the Tulsa Loading Racks) at the direction of HEP
Tulsa by any Person other than (1) Tulsa Refining or its Affiliates or (2) a Person operating the
Tulsa Loading Racks at the direction of Tulsa Refining or its Affiliates, or (y) the ownership of
the Tulsa Loading Racks after the Term by any Person other than Tulsa Refining or its Affiliates
including, without limitation, (A) the cost and expense of any investigation, assessment,
evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective
action required or necessary under Environmental Laws, (B) the cost or expense of the preparation
and implementation of any closure, remedial, corrective action, or other plans required or
necessary under Environmental Laws, and (C) the cost and expense for any environmental or Toxic
Tort pre-trial, trial, or appellate legal or litigation support work,
(v) except to the extent arising prior to the date of this Agreement, all federal, state and
local tax liabilities attributable to the ownership of the Tulsa Loading Racks.
(c) Indemnification Procedures.
(i) The Indemnified Party agrees that promptly after it becomes aware of facts giving rise to
a claim for indemnification under this Section 5, it will provide notice thereof in writing
to the Indemnifying Party, specifying the nature of and specific basis for such claim.
(ii) The Indemnifying Party shall have the right to control all aspects of the defense of (and
any counterclaims with respect to) any claims brought against the Indemnified Party that are
covered by the indemnification under this Section 5, including, without limitation, the
selection of counsel, determination of whether to appeal any decision of any court and the settling
of any such matter or any issues relating thereto; provided, however, that no such
settlement shall be entered into without the consent of the Indemnified Party unless it includes a
full release of the Indemnified Party from such matter or issues, as the case may be.
(iii) The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with
respect to all aspects of the defense of any claims covered by the indemnification under this
Section 5, including, without limitation, the prompt furnishing to the Indemnifying Party
of any correspondence or other notice relating thereto that the Indemnified Party may receive,
permitting the name of the Indemnified Party to be utilized in connection with such defense, the
making available to the Indemnifying Party of any files, records or other information of the
Indemnified Party that the Indemnifying Party considers relevant to such defense and the making
available to the Indemnifying Party of any employees of the Indemnified Party; provided,
however, that in connection therewith the Indemnifying Party agrees to use reasonable
efforts to minimize the impact thereof on the operations of the Indemnified Party and further
agrees to maintain the confidentiality of all files, records, and other information furnished by
the Indemnified Party pursuant to this Section 5(c). In no event shall the obligation of
the
11
Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately
preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire and
pay for counsel in connection with the defense of any claims covered by the indemnification set
forth in this Section 5; 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.
(iv) In determining the amount of any loss, cost, damage or expense for which the Indemnified
Party is entitled to indemnification under this Agreement, the gross amount of the indemnification
will be reduced by all amounts recovered by the Indemnified Party under contractual indemnities
(other than insurance policies) from third Persons. An Indemnified Party shall be obligated to
pursue all contractual indemnities that such Indemnified Party has with third Persons outside of
this Agreement, provided, however, if the Indemnified Party’s 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, without limitation, making
its relevant books, records, officers, information and testimony reasonably available to the
Indemnifying Party) in the Indemnifying Party’s pursuit of such claim. In the event the
Indemnified Party recovers under a contractual indemnity from a third Person outside of this
Agreement, the amount recovered, less the reasonable out-of-pocket fees and expenses incurred by
the Indemnified Party in recovering such amounts, shall reduce the amount such Indemnified Party
may recover under this Section 5 and if the Indemnified Party receives any such amounts
subsequent to an indemnification payment by the Indemnifying Party in respect of such losses, 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 the amount so received by the Indemnified Party.
(v) The Indemnifying Party’s indemnification obligations, and the Indemnified Party’s
entitlement to indemnification, are subject to the limitation on damages contained in Section
13(i).
(d) Survival of Indemnification. The provisions of this Section 5 shall
survive the termination of this Agreement (including any termination following the sale of the
Tulsa Loading Racks pursuant to the Purchase Option Agreement).
Section 6. Consent to Third-Party Operator
If at any time Tulsa Refining does not operate, maintain and manage the Tulsa Loading Racks,
then the written consent of Tulsa Refining, which consent may not be unreasonably withheld, shall
be required before any Person, other than the owner of the Tulsa Loading Racks or its Affiliates,
operates, maintains or manages the Tulsa Loading Racks. This Section 6 shall survive any
termination of this Agreement and shall automatically terminate at such time as the Tulsa Refinery
and the Tulsa Loading Racks are owned by the same Person or an Affiliate of such Person.
12
Section 7. Effectiveness and Term
This Agreement shall be effective as of August 1, 2009 and shall terminate at 12:01 a.m.
Dallas, Texas, time on August 1, 2024, unless extended pursuant to Section 3(b) or by
written mutual agreement of the Parties hereto or as set forth in Section 8 or earlier
terminated pursuant to the Purchase Option Agreement (the “Term”). In the event Tulsa
Refining desires to extend this Agreement, it shall provide prior written notice to HEP Tulsa 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 HEP Tulsa (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 8. Right to Enter into a New Agreement
(a) In the event that Tulsa Refining provides prior written notice to HEP Tulsa of the desire
of Tulsa Refining 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 Tulsa shall have the right to negotiate to enter into one or more
throughput 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,
Tulsa Refining will have the right to enter into a new throughput agreement with HEP Tulsa on
commercial terms that substantially match the terms upon which HEP Tulsa proposes to enter into an
agreement with a third party for similar services with respect to all or a material portion of the
Tulsa Loading Racks. In such circumstances, HEP Tulsa shall give Tulsa Refining forty-five (45)
days prior written notice of any proposed new throughput agreement with a third party, and such
notice shall inform Tulsa Refining of the fee schedules, tariffs, duration and any other terms of
the proposed third party agreement and Tulsa Refining shall have forty-five (45) days following
receipt of such notice to agree to the terms specified in the notice or Tulsa Refining shall lose
the rights specified by this Section 8(a) with respect to the assets that are the subject
of such notice.
(b) In the event that Tulsa Refining fails to provide prior written notice to HEP Tulsa of its
desire to extend this Agreement by written mutual agreement of the Parties pursuant to Section
7, HEP Tulsa shall have the right, during the period from the date of Tulsa Refining’s failure
to provide written notice pursuant to Section 7 to the date of termination of this
Agreement, to negotiate to enter into a new throughput agreement with a third party, provided
however that at any time during the twelve (12) months prior to the expiration of the Term, Tulsa
Refining will have the right to enter into a new throughput agreement with HEP Tulsa on commercial
terms that substantially match the terms upon which HEP Tulsa proposes to enter into an agreement
with a third party for similar services with respect to all or a material portion of the Tulsa
Loading Racks. In such circumstances, HEP Tulsa shall give Tulsa Refining forty-five (45) days
prior written notice of any proposed new throughput agreement with a third party, and such notice
shall inform Tulsa Refining of the fee schedules, tariffs, duration and any other terms of the
proposed third party agreement and Tulsa Refining shall have forty-five (45) days following receipt
of such notice to agree to the terms specified in the notice or Tulsa Refining
13
shall lose the rights specified by this Section 8(b) with respect to the assets that
are the subject of such notice.
Section 9. Repurchase Right and Buyout of Remaining Term
Notwithstanding anything in this Agreement to the contrary, the parties acknowledge Tulsa
Refining’s right to purchase the Tulsa Loading Racks and/or buyout the remaining term of this
Agreement, and HEP Tulsa’s right to put the Tulsa Loading Racks to Tulsa Refining, upon the terms
set forth in the Purchase Option Agreement.
Section 10. 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 Tulsa Refining:
Xxxxx Refining & Marketing — Tulsa LLC
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Lamp
Email address: president @xxxxxxxxx.xxx
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Lamp
Email address: president @xxxxxxxxx.xxx
with a copy, which shall not constitute notice, but is required in order to give proper notice, to:
Xxxxx Refining & Marketing — Tulsa LLC
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: General Counsel
Email address: xxxxxxxxxxxxxx@xxxxxxxxx.xxx
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: General Counsel
Email address: xxxxxxxxxxxxxx@xxxxxxxxx.xxx
14
Notices to HEP Tulsa:
HEP Tulsa LLC
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxx
Email address: XXX-XXX@xxxxxxxxxxx.xxx
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxx
Email address: XXX-XXX@xxxxxxxxxxx.xxx
with a copy, which shall not constitute notice, but is required in
order to give proper notice, to:
HEP Tulsa LLC
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: General Counsel
Email address: xxxxxxxxxxxxxx@xxxxxxxxx.xxx
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: General Counsel
Email address: xxxxxxxxxxxxxx@xxxxxxxxx.xxx
(b) Either Party may at any time change its address for service from time to time by giving
notice to the other Party in accordance with this Section 10.
Section 11. Deficiency Payments
(a) As soon as practicable following the end of each contract month under this Agreement, HEP
Tulsa shall deliver to Tulsa Refining a written notice (the “Deficiency Notice”) detailing
any failure of Tulsa Refining to meet its obligations under Section 2(a)(i); provided that
Tulsa Refining’s obligations pursuant to its Minimum Revenue Commitment in Section 2(a)(i)
shall be assessed on a monthly basis for purposes of this Section 11. The Deficiency
Notice shall (i) specify in reasonable detail the nature of any deficiency and (ii) specify the
approximate dollar amount that HEP Tulsa believes would have been paid by Tulsa Refining to HEP
Tulsa if Tulsa Refining had complied with its respective obligations pursuant to Section
2(a)(i) (the “Deficiency Payment”). Tulsa Refining shall pay the Deficiency Payment to
HEP Tulsa 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 month.
(b) If Tulsa Refining disagrees with the Deficiency Notice, then, following the payment of the
Deficiency Payment to HEP Tulsa, a senior officer of Tulsa Refining and a senior officer of HEP
Tulsa 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, Tulsa Refining
shall have access to the working papers of HEP Tulsa relating to the Deficiency Notice. If such
differences are not resolved within thirty (30) days following the payment of the Deficiency
Payment, Tulsa Refining and HEP Tulsa 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 arbitration in accordance with Section 13(f).
15
(c) If it is finally determined pursuant to this Section 11 that Tulsa Refining is not
required to make any or all of the Deficiency Payment (the “Refund”), HEP Tulsa shall
promptly pay to Tulsa Refining the Refund, together with interest thereon at the Prime Rate, in
immediately available funds.
(d) The parties acknowledge and agree that there shall be no carry-over of deficiency volumes
with respect to Tulsa Refining’s Minimum Revenue Commitment under Section 2(a).
Section 12. Right of First Refusal
The Parties acknowledge the right of first refusal of Tulsa Refining with respect to the Tulsa
Loading Racks provided in the Purchase Option Agreement.
Section 13. Miscellaneous
(a) Intention as to Tulsa Refinery. Tulsa Refining represents to HEP Tulsa that, as
of August 1, 2009, it is not considering a shut down of the Tulsa Refinery or any changes to the
Tulsa Refinery that would have a material adverse effect on the operation of the Tulsa Refinery.
(b) 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 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 or schedules shall be sequentially numbered (e.g.
Exhibit X-0, Xxxxxxx X-0, 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.
(c) Successors and Assigns.
(i) This Agreement shall inure to the benefit of, and shall be binding upon, Tulsa Refining,
HEP Tulsa 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 Tulsa
Refining (in the case of any assignment by HEP Tulsa) or HEP Tulsa (in the case of any assignment
by Tulsa Refining); provided, however, that (i) HEP Tulsa may make such an
assignment (including a partial pro rata assignment) to an Affiliate of HEP Tulsa without Tulsa
Refining’s consent, (ii) Tulsa Refining may make such an assignment (including a pro rata partial
assignment) to an Affiliate of Tulsa Refining without the consent of HEP Tulsa, (iii) Tulsa
Refining may make a collateral assignment of its rights and obligations hereunder and/or grant a
security interest in its rights and obligations to all or a portion of the Tulsa Loading Racks to
any bona fide third party lender or debt holder, or trustee or representative for any of them
without the consent of HEP Tulsa, (iv) HEP Tulsa may make a collateral assignment of its rights
hereunder and/or grant a security interest in its rights and obligations hereunder to a
16
bona fide third party lender or debt holder, or trustee or representative for any of them
without Tulsa Refining’s consent, if such third party lender, debt holder or trustee shall have
executed and delivered to Tulsa Refining a non-disturbance agreement in such form as is reasonably
satisfactory to Tulsa Refining and such third party lender, debt holder, or trustee, (v) HEP Tulsa
may assign all of its rights and obligations under this Agreement to any Person to whom it
transfers the Tulsa Loading Racks without Tulsa Refining’s consent, and (vi) Tulsa Refining may
assign all of its rights and obligations under this Agreement to any third party(ies) that acquire
the Tulsa Refinery without the consent of HEP Tulsa. 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 Party, their obligations under this Agreement.
(ii) HEP Tulsa agrees that it will require any Person to whom it transfers the Tulsa Loading
Racks to expressly assume all of HEP Tulsa’s obligations under this Agreement and the Purchase
Option Agreement, in a form of agreement reasonably acceptable to Tulsa Refining.
(d) 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.
(e) 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.
(f) Arbitration Provision. 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). If there is any inconsistency between this Section 13(f) and the Commercial
Arbitration Rules or the Federal Arbitration Act, the terms of this Section 13(f) will
control the rights and obligations of the Parties. Arbitration must be initiated within the time
limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or
the time period allowed by the applicable statute of limitations. Arbitration may be initiated by
a Party (“Claimant”) serving written notice on the other Party (“Respondent”) that
the Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice
initiating binding arbitration must identify the arbitrator Claimant has appointed. The Respondent
shall respond to Claimant within thirty (30) days after receipt of Claimant’s 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 Respondent’s account. The two arbitrators so chosen shall
select a third arbitrator within thirty (30) days after the second arbitrator has been appointed.
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 costs
of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. The
Claimant and Respondent will each pay one-half of the compensation and expenses of the third
arbitrator. All arbitrators must (i) be neutral parties who have never been officers, directors or
employees of
17
any of Tulsa Refining, HEP Tulsa or any of their Affiliates and (ii) have not less than seven
(7) years experience in the energy industry. The hearing will be conducted in Dallas, Texas and
commence within thirty (30) days after the selection of the third arbitrator. Tulsa Refining, HEP
Tulsa and the arbitrators shall proceed diligently and in good faith in order that the award may be
made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of
the arbitrators will be binding on and non-appealable by the Parties hereto. The arbitrators shall
have no right to grant or award indirect, consequential, punitive or exemplary damages of any kind.
The Arbitrable Disputes may be arbitrated in a common proceeding along with disputes under other
agreements between the Tulsa Refining, HEP Tulsa or their Affiliates to the extent that the issues
raised in such disputes are related. Without the written consent of the Parties, no unrelated
disputes or third party disputes may be joined to an arbitration pursuant to this Agreement.
(g) 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.
(h) 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.
(i) Limitation of Damages. NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY
OTHER PROVISION OF THIS AGREEMENT AND EXCEPT FOR CLAIMS MADE BY THIRD PARTIES WHICH SHALL NOT BE
LIMITED BY THIS PARAGRAPH, THE PARTIES AGREE THAT THE RECOVERY BY ANY PARTY, INCLUDING PURSUANT TO
SECTION 5, OF ANY LIABILITIES, DAMAGES, COSTS OR OTHER EXPENSES SUFFERED OR INCURRED BY IT (i) AS A
RESULT OF ANY BREACH OR NONFULFILLMENT BY A PARTY OF ANY OF ITS REPRESENTATIONS, WARRANTIES,
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 SECTION 5(a) OR SECTION 5(b) 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, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT
OF LOST PROFITS OR OPPORTUNITIES OR BUSINESS INTERRUPTION OR DIMINUTION IN VALUE) SUFFERED OR
INCURRED BY ANY PARTY; PROVIDED, HOWEVER, THAT SUCH RESTRICTION AND LIMITATION
SHALL NOT APPLY TO A PARTY’S OBLIGATION TO INDEMNIFY THE OTHER PARTY UNDER SECTION 5(a) OR SECTION
5(b) HEREOF, AS APPLICABLE, (Y) AS A RESULT OF A THIRD PARTY CLAIM FOR SUCH INDIRECT,
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES AGAINST SUCH INDEMNIFIED PARTY, OR (Z) FOR INDIRECT,
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT
OF LOST PROFITS OR OPPORTUNITIES OR BUSINESS INTERRUPTION OR
18
DIMINUTION IN VALUE) THAT ARE A RESULT OF SUCH INDEMNIFYING PARTY’S OR ITS AFFILIATES’ GROSS
NEGLIGENCE OR WILLFULL MISCONDUCT.
(j) Notice to Third Parties. Tulsa Refining authorizes HEP Tulsa to file in the
applicable recording office in the State of Delaware a UCC-1 Financing Statement (i) listing Tulsa
Refining as “Debtor”, (ii) listing HEP Tulsa as “Secured Party” and (iii) checking the
“Lessee/Lessor” as an alternative designation. The Parties agree that such UCC-1 Financing
Statement is solely to provide notice to third parties of HEP Tulsa’s ownership of the Tulsa
Loading Racks, that such financing statement shall not evidence a security interest in any of Tulsa
Refining’s personal property, and that no such security interest is granted or deemed to be granted
hereunder.
Section 14. Guarantee
(a) Payment and Performance Guaranty. The Partnership unconditionally, absolutely,
continually and irrevocably guarantees, as principal and not as surety, to Tulsa Refining the
punctual and complete payment in full when due of all amounts due from HEP Tulsa under the
Agreement (collectively, the “Payment Obligations”). The Partnership agrees that Tulsa
Refining shall be entitled to enforce directly against the Partnership any of the Payment
Obligations.
(b) Guaranty Absolute. The Partnership hereby guarantees that the Payment Obligations
will be paid strictly in accordance with the terms of the Agreement. The obligations of the
Partnership under this Agreement constitute a present and continuing guaranty of payment, and not
of collection or collectibility. 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 the Agreement or any of the rights thereunder of Tulsa
Refining;
(ii) any amendment, waiver, renewal, extension or release of or any consent to or departure
from or other action or inaction related to the Agreement;
(iii) any acceptance by Tulsa Refining of partial payment or performance from HEP Tulsa;
(iv) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment,
dissolution, liquidation or other like proceeding relating to HEP Tulsa or any action taken with
respect to the 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.
19
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 Payment 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 Payment
Obligations and any requirement for Tulsa Refining 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 Tulsa, any other entity or any collateral.
(d) Subrogation Waiver. The Partnership agrees that it shall not have any rights
(direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights
of payment or recovery from HEP Tulsa for any payments made by the Partnership under this
Section 14 until all Payment Obligations have been indefeasibly paid, 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 Tulsa until all Payment Obligations have been
indefeasibly paid.
(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 Payment Obligations is rescinded or must otherwise be returned to HEP Tulsa
or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition,
liquidation or reorganization of HEP Tulsa 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 in full of
all of the Payment Obligations, (ii) be binding upon the Partnership, its successors and assigns
and (iii) inure to the benefit of and be enforceable by Tulsa Refining and its successors,
transferees and assigns.
(g) No Duty to Pursue Others. It shall not be necessary for Tulsa Refining (and the
Partnership hereby waives any rights which the Partnership may have to require Tulsa Refining), in
order to enforce such payment by the Partnership, first to (i) institute suit or exhaust its
remedies against HEP Tulsa or others liable on the Payment Obligations or any other person, (ii)
enforce Tulsa Refining’s rights against any other guarantors of the Payment Obligations, (iii) join
HEP Tulsa or any others liable on the Payment Obligations in any action seeking to enforce this
Section 14, (iv) exhaust any remedies available to Tulsa Refining 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.
[Remainder of Page Intentionally Left Blank]
20
IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of the date first
written above.
XXXXX REFINING & MARKETING — TULSA LLC |
||||
By: | /s/ Xxxxx X. Lamp | |||
Xxxxx X. Lamp | ||||
President | ||||
HEP TULSA LLC |
||||
By: | /s/ Xxxxx X. Xxxxx | |||
Xxxxx X. Xxxxx | ||||
Senior Vice President | ||||
ACKNOWLEDGED AND AGREED FOR PURPOSES OF Section 14: XXXXX ENERGY PARTNERS, L.P. |
||||
By: | HEP Logistics Holdings, L.P., its General Partner |
|||
By: | Xxxxx Logistic Services, L.L.C., its General Partner |
|||
By: | /s/ Xxxxx X. Xxxxx | |||
Xxxxx X. Xxxxx | ||||
Senior Vice President | ||||
Signature Page 1 of 1 to the Tulsa Equipment and Throughput Agreement
SCHEDULE I
TARIFFS
Incentive Tariff | ||||||||
Base Tariff | (For volumes in excess of | |||||||
Contract Year | (For the first 12,500 bpd) | 12,500 bpd) | ||||||
August 1, 2009 |
$0.60 per barrel | $0.30 per barrel |
Schedule I
EXHIBIT A
TULSA
LOADING RACKS
As of August 1, 2009
The following descriptions are of the above ground loading equipment located at the Tulsa Refinery
that are subject to this Agreement. The drawings attached to this Exhibit show the detail of the
rail track footage acquired by HEP Tulsa. All other above ground piping and improvements located
on these drawings was purchased by HEP Tulsa.
#1. Lube Oil Rail Rack — A covered finished lube oil rail car loading rack consisting of 10 rail
spots, 12 loading arms, two loading lines, a gear oil line, steam, air and water lines. There are
rail tracks located on both the north and south sides of this loading rack. The rack is used to
load multiple finished lube oil products. The rack is located in Section 11, Township 19 North,
Range 12 East, I.B.M., Tulsa County, Oklahoma. See Drawing Number 1 for more detail.
#2. Wax Rail Car Rack — An uncovered wax loading rack consisting of four rail spots. The rack is
served by two tracks. The rack is located in Section 10, Township 19 North, Range 12 East, I.B.M.,
Tulsa County, Oklahoma. See Drawing Number 2 for more detail.
#3. Black Oil Rail Rack — An uncovered black oil rail car loading rack consisting of four rail
loading arms and a total of seven car loading capabilities. There are two tracks at this rack
which serve both the north and south sides of this rack. This rack is located in Section 10,
Township 19 North, Range 12 East, I.B.M., Tulsa County, Oklahoma. See Drawing Number 3 for more
detail.
#4. Lube Oil Truck Rack — A covered four bay lube oil loading rack. There are eight loading
spots and the capability to load two trucks at one time. There are scales on each bay, however,
the scale on bay two and four are not functional at this time. This rack is located in Section 11,
Township 19 North, Range 12 East, I.B.M., Tulsa County, Oklahoma. See Drawing Number 4 for more
detail.
#5. Extract Truck Rack — A covered single bay truck rack for loading finished extract products.
There is a scale at this loading rack. This rack is located in Section 10, Township 19 North,
Range 12 East, I.B.M. Tulsa County, Oklahoma. See Drawing Number 5 for more detail.
#6. [Intentionally omitted]
#7. Wax Truck Rack — A covered single bay truck rack for loading finish waxes. There is a scale
at this loading rack. This rack is located in Section 10, Township 19 North, Range 12 East,
I.B.M., Tulsa County, Oklahoma. See Drawing Number 7 for more detail.
#8. Extract Rail Rack — An uncovered four spot finished extract loading rack. This rack is
located in Section 10, Township 19 North, Range 12 East, I.B.M., Tulsa County, Oklahoma. See
Drawing Number 8 for more detail.
A-1
#9. Bright Stock Rail Rack — An uncovered bright stock rail car loading rack consisting of eight
rail spots and dual tracks with four loading arms.
#10. Diesel Rail Car Loading Rack — An uncovered diesel rail car loading rack with the capability
of loading seven cars through the four rail loading arms. This rack has dual tracks.
#11. L-70 Rail Rack — An uncovered rail car loading rack consisting of three rail spots. This
rack has dual tracks.
Racks 9, 10, and 11 are contiguous racks served by dual tracks located in Section 10, Township 19
North, Range 12 East, I.B.M., Tulsa County, Oklahoma. See Drawings Numbered 9, 10 and 11 for more
detail.
#12. [Intentionally omitted]
#13. Soft Wax MEK Truck Rack — An uncovered truck loading rack with a single spot. There is no
scale at this location. This rack is located in Section 11, Township 19 North, Range 12 East,
I.B.M., Tulsa County, Oklahoma. See Drawing Number 13 for more detail.
The Parties agree that the Tulsa Loading Racks do not include the following loading racks located
at the Tulsa Refinery (which loading racks are owned by Tulsa Refining or its Affiliates):
• | The Gasoline/Diesel Fuel/Jet Fuel truck loading rack | ||
• | The Asphalt Resid rail car loading rack and the Asphalt Resid truck loading dock |
A-2
Drawing Number 1
A-3
Drawing Number 2
A-4
Drawing Number 3
A-5
Drawing Number 4
A-6
Drawing Number 5
A-7
Drawing Number 7
A-8
Drawing Number 8
A-9
Drawing Number 9, 10 and 11
A-10
Drawing Number 9, 10 and 11 (continued)
A-11
Drawing Number 13
A-12
EXHIBIT B
EQUIPMENT EXPANSIONS AND MODIFICATIONS
As of August 1, 2009
As of August 1, 2009
None.
B-1