Exhibit 10.12
EXECUTION COPY
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ANCILLARY EQUIPMENT SITE LEASE AND EASEMENT AGREEMENT
dated as of August 19, 1999
between
XXXXX REFINING & MARKETING, INC.
and
PORT XXXXXX XXXXX COMPANY L.P.
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS.................................................... 1
SECTION 1.1 Definitions....................................... 1
SECTION 1.2 Other Definitional Provisions..................... 1
ARTICLE II
LEASE AND GRANT OF EASEMENT.................................... 2
SECTION 2.1 Lease............................................. 2
SECTION 2.2 Grant of Easement................................. 2
SECTION 2.3 Easements Appurtenant............................. 2
SECTION 2.4 No Interference................................... 2
ARTICLE III
POSSESSION AND QUIET ENJOYMENT................................. 3
ARTICLE IV
TITLE.......................................................... 3
ARTICLE V
FIXTURES....................................................... 3
ARTICLE VI
CONSTRUCTION OBLIGATION........................................ 4
SECTION 6.1 Lessor to Upgrade Ancillary Equipment............. 4
SECTION 6.2 Scope of Work..................................... 4
SECTION 6.3 Assignment of Construction Contract............... 4
SECTION 6.4 Ancillary Equipment Letter of Credit.............. 5
ARTICLE VII
UNDERTAKINGS OF LESSOR; FURTHER ASSURANCES..................... 5
ARTICLE VIII
RESERVATIONS AND RESTRICTIONS.................................. 6
SECTION 8.1 Reservations...................................... 6
ARTICLE IX
MAINTENANCE; INSPECTION; COMPLIANCE WITH LAWS.................. 6
SECTION 9.1 Maintenance....................................... 6
SECTION 9.2 Inspection........................................ 7
SECTION 9.3 Compliance with Laws.............................. 7
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ARTICLE X
LIENS.......................................................... 8
SECTION 10.1 Lessee Liens..................................... 8
SECTION 10.2 Lessor Liens..................................... 8
ARTICLE XI
TAXES AND CHARGES.............................................. 8
SECTION 11.1 Taxes............................................ 8
SECTION 11.2 Apportionment.................................... 9
ARTICLE XII
INSURANCE...................................................... 9
SECTION 12.1 Lessor Insurance................................. 9
ARTICLE XIII
RENT........................................................... 10
SECTION 13.1 Initial Term..................................... 10
SECTION 13.2 Renewal Term..................................... 10
SECTION 13.3 Early Termination................................ 11
ARTICLE XIV
NONTERMINATION................................................. 11
ARTICLE XV
CONDEMNATION................................................... 12
ARTICLE XVI
BINDING EFFECT; SUCCESSORS AND ASSIGNS......................... 12
ARTICLE XVII
NON-REMOVAL OF FACILITY........................................ 12
ARTICLE XVIII
POSSESSION UPON TERMINATION.................................... 13
ARTICLE XIX
INDEMNITY...................................................... 13
SECTION 19.1 Lessee Indemnity................................. 13
SECTION 19.2 Lessor Indemnity................................. 13
ARTICLE XX
TERM........................................................... 14
SECTION 20.1 Ancillary Equipment Site Lease Term.............. 14
SECTION 20.2 Renewal Term..................................... 14
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ARTICLE XXI
MINERAL RIGHTS................................................. 15
ARTICLE XXII
MISCELLANEOUS.................................................. 15
SECTION 22.1 Assignment as Security for Lessee's Obligations.. 15
SECTION 22.2 Memorandum of Lease.............................. 15
SECTION 22.3 Relationship of the Parties...................... 16
SECTION 22.4 Time is of the Essence........................... 16
SECTION 22.5 Notices.......................................... 16
SECTION 22.6 Severability..................................... 17
SECTION 22.7 Amendment........................................ 17
SECTION 22.8 Headings, etc.................................... 17
SECTION 22.9 Counterparts..................................... 17
SECTION 22.10 GOVERNING LAW.................................... 17
SECTION 22.11 WAIVER OF JURY TRIAL............................. 17
ARTICLE XXIII
NO MERGER...................................................... 18
SECTION 23.1 No Merger........................................ 18
APPENDIX A -- DEFINITIONS
EXHIBITS
A Ancillary Equipment Site Description
B Ancillary Equipment Description
C Adjacent Refinery Property Description
D Lessor Ancillary Equipment Upgrade Description
E Turnarounds and Capital Maintenance Description
F Form of Consent and Assignment Agreement
G Form of Memorandum of Lease
H Ancillary Equipment Operating Fee Calculation
SCHEDULES
I Ancillary Equipment Site Permitted Liens
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SITE AND EQUIPMENT LEASE AND EASEMENT AGREEMENT (the "Ancillary
Equipment Site Lease"), dated as of August 19, 1999, between Xxxxx Refining &
Marketing, Inc., a Delaware corporation ("Lessor") and Port Xxxxxx Xxxxx Company
L.P., a Delaware limited partnership ("Lessee").
WHEREAS, the Lessor is the owner of the Ancillary Equipment Site and
the Ancillary Equipment;
WHEREAS, Lessee wishes to lease the Ancillary Equipment Site and the
Ancillary Equipment from Lessor and wishes Lessor to perform certain required
upgrades thereto in order for the Lessee to operate the Ancillary Equipment in
connection with the Xxxxx Complex; and
WHEREAS, Lessor wishes to perform such upgrades to the Ancillary
Equipment and lease the Ancillary Equipment and Ancillary Equipment Site to
Lessee;
NOW THEREFORE, for and in consideration of the mutual covenants,
premises and agreements set forth herein, and good and valuable consideration,
the receipt, sufficiency and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. Except as otherwise defined herein, the
capitalized terms used herein shall have the respective meanings assigned
thereto in Appendix A.
SECTION 1.2 Other Definitional Provisions.
-----------------------------
(a) The words "hereof," "herein", "hereto" and "hereunder" and words
of similar import when used in this Ancillary Equipment Site Lease shall
refer to this Ancillary Equipment Site Lease as a whole and not to any
particular provision of this Ancillary Equipment Site Lease, and Article,
Section and Schedule references are to this Ancillary Equipment Site Lease
unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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ARTICLE II
LEASE AND GRANT OF EASEMENT
SECTION 2.1 Lease. The Lessor hereby demises, leases and delivers to
the Lessee and Lessee hereby leases and accepts from Lessor the following
described properties for a term of years equal to the Ancillary Equipment Site
Lease Term, subject to all Permitted Liens now or hereafter in existence, the
following (such estates being referred to herein as the "Ancillary Equipment
Site Leasehold"):
(a) the real property (the "Ancillary Equipment Site") described
in Exhibit A; and
(b) all equipment, buildings, structures, fixtures and
improvements located on the Ancillary Equipment Site, including
without limitation those processing units described in Exhibit B.
SECTION 2.2 Grant of Easement. Lessor does hereby grant and convey
to Lessee a nonexclusive easement (the "Ancillary Equipment Easement") on, over
and under the Adjacent Refinery Property as more particularly described in
Exhibit C, for the purpose of ingress and egress, for the location and
maintenance of the Ancillary Equipment (including, without limitation, all
interconnection pipes, wiring, other pipelines and communication and utility
lines) and for any other purpose as may be necessary or desirable in connection
with the maintenance and operation of the Ancillary Equipment or the operation
of the Heavy Oil Processing Facility. The appurtenant non-exclusive easement
herein granted includes, without limitation, the right to use the twenty (20)
foot wide access easements described on Exhibit C hereto, connecting the
Ancillary Equipment Site to Texas Highway 870.
SECTION 2.3 Easements Appurtenant. The Ancillary Equipment Easement
shall be deemed to be appurtenant to the Ancillary Equipment Leasehold and shall
be for the benefit of the Lessee and its successors and assigns and any tenant
of the Ancillary Equipment Leasehold. Lessor agrees that it will not make any
use or permit any use of the land described in Exhibit C that would interfere
with the use and enjoyment of the Ancillary Equipment Easement or the operation
of the Ancillary Equipment Site in connection with the Xxxxx Complex by the
Lessee or its successors, assigns or subtenants at any time during the Ancillary
Equipment Site Lease Term, except to the extent that such use would not impair
(i) the ability of the Lessee or its successors, assigns or subtenants to
operate the Xxxxx Complex in accordance with the Base Case Financial Model or
(ii) any of the security interests granted or to be granted by the Xxxxx Company
to the Financing Parties pursuant to the Financing Documents.
SECTION 2.4 No Interference. With respect to any nonexclusive
easement granted pursuant to this Ancillary Equipment Site Lease, the Lessor
shall not grant or convey any easement or other interest (other than a Permitted
Lien) that, if used or enjoyed in accordance with its terms, would interfere
with the use and enjoyment of the Xxxxx Complex, the Ancillary Equipment
Leasehold or the Ancillary Equipment Easement or the operation of the Ancillary
Equipment or the Xxxxx Complex by the Lessee or its permitted successors,
assigns or subtenants at any time during the Ancillary Equipment Site Lease
Term, except to the extent that such
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easement or interest would not or impair (i) the ability of the Lessee or its
successors, assigns or subtenants to operate the Xxxxx Complex in accordance
with the Base Case Financial Model or (ii) any of the security interests granted
or to be granted by the Xxxxx Company to the Financing Parties pursuant to the
Financing Documents.
ARTICLE III
POSSESSION AND QUIET ENJOYMENT
The Lessor covenants with the Lessee that the Lessee will enjoy quiet
possession of the Ancillary Equipment Leasehold and the right to utilize the
Ancillary Equipment Easement, free from claims of persons in possession and
third parties claiming rights thereto.
ARTICLE IV
TITLE
The Lessor warrants and represents that it has (a) good and
indefeasible title to the Ancillary Equipment, the Ancillary Equipment Site and
to all property covered by the Ancillary Equipment Easement, in fee simple
absolute and (b) the right to convey the Ancillary Equipment Easement, in each
case free and clear of all liens and encumbrances, except for Permitted Liens.
The Lessor further warrants and represents that Permitted Liens in existence on
the date hereof do not and will not adversely affect the use of the Ancillary
Equipment, the Ancillary Equipment Site and the Ancillary Equipment Easement as
contemplated by the other Project Documents.
ARTICLE V
FIXTURES
As a material part of this Ancillary Equipment Site Lease, the Lessor
and Lessee agree and intend that each item representing part of the Ancillary
Equipment (including the Ancillary Equipment Upgrade) (a) is attached, affixed
and annexed to the Ancillary Equipment Site or the Ancillary Equipment Easement,
as the case may be, by agreement and intention of the parties, (b) shall remain
affixed to the Ancillary Equipment Site or the Ancillary Equipment Easement, as
the case may be, (c) shall be considered with respect to the interests of the
parties hereto as the real property of the Lessor, (d) shall be considered to
become fixtures to and a part of the Ancillary Equipment Site or the Ancillary
Equipment Easement, as the case may be, immediately upon being installed or
constructed on, or otherwise affixed or annexed to, the Ancillary Equipment
Site, (e) is adaptable to the uses and purposes for which the Ancillary
Equipment Site is being leased by Lessor to Lessee, and (f) cannot be removed
from the Ancillary Equipment Site without doing substantial injury and/or
material damage to the Ancillary Equipment Site.
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ARTICLE VI
CONSTRUCTION OBLIGATION
SECTION 6.1 Lessor to Upgrade Ancillary Equipment. The Lessor
covenants to construct and substantially complete, on or before October 1, 2000,
at Lessor's sole cost and expense, the additions, betterments and upgrades to
the Ancillary Equipment described on Exhibit D (the "Lessor Ancillary Equipment
Upgrade") pursuant to the Ancillary Equipment Upgrade Contract or otherwise.
Should Lessor fail to complete the Lessor Ancillary Equipment Upgrade by October
1, 2000, Lessor hereby agrees that Lessee may engage its own contractor(s) to
complete the Lessor Ancillary Equipment Upgrade at Lessor's expense.
SECTION 6.2 Scope of Work. Lessor shall perform or shall cause to be
performed all of the Lessor Ancillary Equipment Upgrade in accordance with the
specifications set forth on Exhibit D. Without limiting the generality of the
foregoing:
(a) All components shall be new (except for used equipment (x)
expressly specified as used on Exhibit D, (y) not required, pursuant to the
Exhibit D, to be new equipment or (z) otherwise agreed in writing by
Lessee) and of good quality when installed; shall meet the generally
accepted standard of quality applicable to the design and engineering of
refinery installations of similar size, type and design; shall be designed
and manufactured in accordance with recognized refinery and petrochemical
industry standards for such components and in accordance with the
Standards; and shall be free from defects and deficiencies in design,
materials and workmanship or otherwise;
(b) The Lessor Ancillary Equipment Upgrade shall be performed
and installed in accordance with the standards set forth on Exhibit D and
in accordance with workmanlike and good engineering practices;
(c) The Lessor Ancillary Equipment Upgrade shall be designed and
built to integrate with the Xxxxx Complex such that, upon completion, the
Heavy Oil Upgrade Project shall be capable of being operated (i) at the
Guaranteed Values as required by the Performance Test Standards; (ii) in
compliance with all Applicable Laws in effect on the date that the Lessee
issues a final completion certificate to the Contractor pursuant to the EPC
Contract; (iii) in accordance with the Standards; and (iv) free from
defects and deficiencies in design, materials and workmanship or otherwise;
and
(d) Lessor shall take all such actions, and shall direct the
Contractor to take all such actions, as may be required in connection with
the integration of the Ancillary Equipment with the Xxxxx Complex.
SECTION 6.3 Assignment of Construction Contract. As security for its
obligation to perform the Lessor Ancillary Equipment Upgrade, Lessor hereby
collaterally assigns to Lessee, and hereby grants to Lessee a security interest
in, all of Lessor's right, title and interest in and to any and all
construction, design, engineering or procurement contracts entered
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into by or on behalf of Lessor for the purpose of performing the Lessor
Ancillary Equipment Upgrade, including, without limitation, the Ancillary
Equipment Upgrade Contract.
SECTION 6.4 Ancillary Equipment Letter of Credit. For so long as
the Ancillary Equipment Upgrade is not substantially complete, the Lessor shall
provide and maintain in effect, for the benefit of the Contractor, the standby
letter as required by, and on the terms and conditions set forth in, the
Ancillary Equipment Upgrade Contract.
ARTICLE VII
UNDERTAKINGS OF LESSOR; FURTHER ASSURANCES
The Lessor covenants, represents and warrants to the Lessee that the
Ancillary Equipment Site Leasehold and the Ancillary Equipment Easement are
sufficient and will, at all times during the Ancillary Equipment Site Lease
Term, be sufficient or, if the same shall cease to be so sufficient, the Lessor
will at its expense take such action, including the conveyance of additional
easements and the grant of additional rights, as is reasonable or necessary, in
order to provide the Lessee with reasonable means of constructing, connecting,
operating, maintaining, replacing, renewing and repairing the Ancillary
Equipment including, but not limited to (a) reasonable means of transporting
materials to be processed to the Ancillary Equipment and transporting processed
material from the Ancillary Equipment to the Xxxxx Complex, (b) reasonable
access subject to regulatory restrictions to communications networks and sources
of electric power, natural gas and other utilities for operation of the
Ancillary Equipment, (c) reasonable access subject to regulatory restrictions to
sources of potable water, (d) reasonable access subject to regulatory
restrictions to areas for or means of disposing of waste materials generated by
the operation of the Ancillary Equipment, (e) reasonable access on the Ancillary
Equipment Site to a supply of hydrogen, by pipeline, by a hydrogen supply plant
commissioned by the Lessor and constructed by a hydrogen supplier on or near the
Ancillary Equipment Site or by another commercially reasonable alternative,
sufficient for the requirements of the Ancillary Equipment, and (f) existing
firewater systems, as they may be modified, necessary to maintain, protect and
preserve the Ancillary Equipment Site. At all times during the Ancillary
Equipment Site Lease Term the Lessor, at its expense, shall maintain the areas
covered by the Ancillary Equipment Easement in good condition and repair and in
accordance with Applicable Laws so that they will be available for the operation
of the Ancillary Equipment, including, without limitation, the maintenance of
roads, equipment, pumps, and pipelines located on areas covered by the Ancillary
Equipment Easement.
The agreement and obligation of Lessor to provide electric utilities
and electric service, natural gas and gas service, potable water and water
service, and sanitary sewage service to the Ancillary Equipment Site is incident
to, dependent upon and inseparable from the landlord/tenant relationship
established by this Ancillary Equipment Site Lease, and such obligation shall
continue only for the Ancillary Equipment Site Lease Term and the existence of
such landlord/tenant relationship. All charges for potable water and sanitary
sewer services to be provided by Lessor to Lessee pursuant to the Services and
Supply Agreement are included in the rent payable to Lessor hereunder. The
calculation of the Ancillary Equipment Operating Fee as it
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relates to the provision of electricity and electric service and natural gas and
gas service to the Ancillary Equipment is intended only to provide a mechanism
for Lessor to recover from Lessee the cost of providing electricity and electric
service, and natural gas and gas service, to the Ancillary Equipment, and it is
not intended that Lessor shall make a profit by providing such utilities).
Lessee acknowledges, understands and agrees that none of such utilities may be
sold or resold by Lessee, and none of such utilities may be used by any other
party or for any other purpose other than in connection with its tenancy
hereunder.
ARTICLE VIII
RESERVATIONS AND RESTRICTIONS
SECTION 8.1 Reservations. The grant and conveyance of the Ancillary
Equipment Easement by the Lessor to the Lessee are subject to the following
reservations and understandings:
(a) The Lessor reserves the right to relocate all or any portion of
the Ancillary Equipment or other property of the Lessee located on the
Adjacent Refinery Property provided that such relocation (i) does not
subject such property to any Liens, conditions or other restrictions (other
than Permitted Liens) that are more burdensome to the Lessee than before
such relocation, (ii) is at the Lessor's expense and (iii) does not deprive
the Lessee of effective use of such property or make the use of such
property more expensive or burdensome or adversely affect the operation of
the Ancillary Equipment or the Xxxxx Complex, except to the extent that
such relocation would not impair (x) the ability of the Lessee or its
successors, assigns or subtenants to operate the Xxxxx Complex in
accordance with the Base Case Financial Model or (y) any of the security
interests granted or to be granted by the Xxxxx Company to the Financing
Parties pursuant to the Financing Documents.
(b) Subject to Section 2.2 and clause (a) of this Section 8.1, the
Lessor reserves the right to use, permit the use of, or grant easements or
licenses to use, any part of the Adjacent Refinery Property.
ARTICLE IX
MAINTENANCE; INSPECTION; COMPLIANCE WITH LAWS
SECTION 9.1 Maintenance. During the Ancillary Equipment Site Lease
Term, the Lessee shall take care of and maintain the Ancillary Equipment Site
and provide ordinary maintenance of the Ancillary Equipment, which shall not
include capital improvements. So long as the Services and Supply Agreement is in
effect, such performance with respect to maintenance of the Ancillary Equipment
Site as rendered by Lessor thereunder shall be deemed to fulfill Lessee's
obligations under this Section. Lessor shall be obligated to conduct scheduled
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turnarounds and capital maintenance on the Ancillary Equipment, in accordance
with Exhibit E hereto.
SECTION 9.2 Inspection. During the Ancillary Equipment Site Lease
Term, the Lessor and its authorized representatives may, at their own expense,
at reasonable times and by appointment on reasonable notice, inspect the
Ancillary Equipment Site and the Ancillary Equipment and any other property
located on the Ancillary Equipment Site.
SECTION 9.3 Compliance with Laws. (a) During the Ancillary Equipment
Site Lease Term, the Lessee, at its sole cost and expense, shall conform to,
comply with and take any and all action necessary to avoid or eliminate any
violation of any Applicable Laws applicable to the Ancillary Equipment Site and
the Ancillary Equipment, or the use or occupancy thereof, unless and to the
extent that (x) the Lessee shall be prosecuting in good faith a test, challenge,
appeal or proceeding for review of such Applicable Laws by appropriate
proceedings that do not involve any substantial risk of (i) foreclosure, sale,
forfeiture or loss of, or imposition of any Lien prohibited by Article X on the
Ancillary Equipment Site or any part thereof, (ii) extending the ultimate
imposition of such requirement beyond the termination of the Ancillary Equipment
Site Lease Term or (iii) any material claim against the Lessor, the Ancillary
Equipment Site or any property of the Lessor or (y) such violation relates to
the presence of or any failure to remediate environmental contamination existing
on or under the Ancillary Equipment Site prior to the date hereof. So long as
the Services and Supply Agreement is in effect, such performance with respect to
compliance with laws applicable to the Ancillary Equipment Site and the
Ancillary Equipment as may be rendered thereunder by the Lessor shall be deemed
to fulfill Lessee's obligations under this Section.
(b) During the Ancillary Equipment Site Lease Term, the Lessor,
at its sole cost and expense, shall conform to, comply with and take any and all
action necessary to avoid or eliminate any violation of any Applicable Laws
applicable to the Xxxxx Refinery Property (other than the Ancillary Equipment or
the Ancillary Equipment Site, except to the extent that such violation relates
to any environmental condition on or under the Ancillary Equipment Site prior to
the date hereof), or the use, ownership or occupancy thereof, unless and to the
extent that (x) the Lessor shall be prosecuting in good faith a test, challenge,
appeal or proceeding for review of such Applicable Laws by appropriate
proceedings that do not involve any substantial risk of (i) foreclosure, sale,
forfeiture or loss of, or imposition of any Lien prohibited by Article X on the
Xxxxx Refinery Property or any part thereof, (ii) extending the ultimate
imposition of such requirement beyond the termination of the Ancillary Equipment
Site Lease Term or (iii) any material claim against the Lessee, the Xxxxx
Refinery Property or any property of the Lessee, or (y) such violation could not
reasonably be expected to have a material adverse effect on the Ancillary
Equipment Site or the right of Lessee to use and enjoy the Ancillary Equipment
Easement.
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ARTICLE X
LIENS
SECTION 10.1 Lessee Liens. (a) During the Ancillary Equipment Site
Lease Term, the Lessee shall not directly or indirectly create, assume or suffer
to exist any Lien by any Person claiming by, through or under the Lessee, on or
with respect to the Ancillary Equipment Site, except Permitted Liens or any
other Lien against Ancillary Equipment Site or the Ancillary Equipment Easement
(i) in favor of any taxing authority by reason of the nonpayment by Lessor of
any Tax (other than Taxes being diligently contested in good faith in
appropriate proceedings), (ii) resulting from any act of Lessor or failure by
Lessor to take any action required hereunder, or (iii) arising in connection
with claims against Lessor.
(b) If any Lien, other than a Lien excepted under clause (a) of this
Section 10.1, on any property of the Lessor arising in connection with the
Lessee's use or occupation of the Ancillary Equipment Site or the Ancillary
Equipment Easement or work of any character performed by or at the direction of
the Lessee, shall arise at any time during the Ancillary Equipment Site Lease
Term, the Lessee shall promptly discharge it at its own cost and expense and
shall indemnify and hold harmless the Lessor from and against any loss, damage,
costs or expense (including legal fees and expenses) as a result of the
existence or enforcement of such Lien.
SECTION 10.2 Lessor Liens. During the Ancillary Equipment Site Lease
Term, the Lessor shall not directly or indirectly create, assume or suffer to
exist any Lessor Lien or any other Lien by any Person claiming by, through or
under the Lessor, on or with respect to the Xxxxx Refinery Property, except
Permitted Liens. If any Lien, other than a Permitted Lien, on any property of
the Lessee arising in connection with the Lessor's use, ownership or occupation
of the Xxxxx Refinery Property or work of any character performed by or at the
direction of the Lessor, shall arise at any time during the Ancillary Equipment
Site Lease Term, the Lessor shall promptly discharge it at its own cost and
expense and shall indemnify and hold harmless the Lessee from and against any
loss, damage, costs or expense (including legal fees and expenses) as a result
of the existence or enforcement of such Lien.
ARTICLE XI
TAXES AND CHARGES
SECTION 11.1 Taxes. (a) During the Ancillary Equipment Site Lease
Term, the Lessee shall pay or cause to be paid, before delinquency, any Tax
assessed, levied, imposed upon, or to become due and payable out of or in
respect of the use, ownership, possession, operation, control, maintenance
or insurance of the Ancillary Equipment Site.
(b) The Lessee shall have the right to contest in good faith, at the
Lessee's sole cost and expense, the amount or validity, in whole or in
part, of any Tax by appropriate proceedings, so long as such contest and
proceedings shall not involve any material risk of sale,
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forfeiture or loss of the Ancillary Equipment Site, or any part thereof or the
imposition of any Lien prohibited by Article X.
(c) During the Ancillary Equipment Site Lease Term, the Lessor shall
pay or cause to be paid, before delinquency, any tax assessed, levied, imposed
upon, or to become due and payable out of or in respect of the use, ownership,
possession, operation, control, maintenance or insurance of the Xxxxx Refinery
Property, other than Taxes payable by Lessee pursuant to clause (a) above.
(d) The Lessor shall have the right to contest in good faith, at the
Lessor's sole cost and expense, the amount or validity, in whole or in part, of
any tax, due and payable out of or in respect of the use, ownership, possession,
operation, control, maintenance or insurance of the Xxxxx Refinery Property by
appropriate proceedings, so long as such contest and proceedings shall not
involve any substantial risk of sale, forfeiture or loss of the Xxxxx Refinery
Property, or any part thereof or the imposition of any Lien prohibited by
Article X.
SECTION 11.2 Apportionment. If during the Ancillary Equipment Site
Lease Term the Ancillary Equipment Site shall not be separately assessed but
shall be assessed as part of a larger tract of land, then Lessor and Lessee
shall fairly and equitably apportion any Tax resulting from such assessment
based on (a) with respect to any tax assessed on equipment, the relative value
of the equipment being leased hereunder and any other equipment included in such
assessment, and (b) with respect to any land, the relative acreage of the land
comprising the Ancillary Equipment Site and any other land being taxed.
ARTICLE XII
INSURANCE
SECTION 12.1 Lessor Insurance. During the Ancillary Equipment Site
Lease Term, the Lessor shall, without cost to the Lessee, maintain or cause to
be maintained in effect with insurers of good national or international repute,
comprehensive general liability insurance policies with respect to the Xxxxx
Refinery Property, including the Ancillary Equipment and the Ancillary Equipment
Site, insuring against death and bodily injury, loss or damage to property of
others and such other risks as are customarily insured against in the petroleum
refining industry, all in such amounts and on terms described under the headings
"Construction Phase -- Operator" and "Operational Phase -- Operator" on Exhibit
J to the Common Security Agreement. Any insurance policies maintained in
accordance with this Section 12.2 shall name the Lessee and the Collateral
Trustee as additional insured parties thereunder. Copies or certificates of such
policies shall be delivered to the Lessee and the Collateral Trustee by the
Lessor.
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ARTICLE XIII
RENT
SECTION 13.1 Initial Term. (a) For and during the Ancillary
Equipment Site Initial Term, the Lessee shall pay the Lessor the following base
rental for use and occupancy of the Ancillary Equipment Site Leasehold and the
Ancillary Equipment Easement: consecutive quarterly installments with respect to
each calendar quarter, in arrears, due and payable on the last day of April,
July, October, and January commencing with the first such month after the Start-
up Date until the expiration or earlier termination of the Ancillary Equipment
Site Initial Term in an amount each quarter equal to (x) seven million six
hundred ninety thousand dollars ($7,690,000), multiplied by (y) the Inflation
Factor in effect in the month such installment is due; provided, however, that
the amount of the first such payment shall be pro rated in proportion to the
number of days in such quarter after the Start-up Date. Notwithstanding the fact
that payment of rent by the Lessee does not commence until the Start-up Date,
the parties intend that all rights, duties and obligations of the Lessor and
Lessee hereunder shall be enforceable as of the date hereof.
(b) In addition to the base rent payable under clause (a) above or
Section 13.2 below, the Lessee shall pay the Lessor the fee calculated in
accordance with the formula set forth in Exhibit H hereto (the "Ancillary
Equipment Operating Fee") on the twentieth (20th) calendar day of each month
after the Start-up Date during the Ancillary Equipment Site Lease Term for so
long as the Services and Supply Agreement is in effect, as additional rent, for
all Services and Supplies provided by Lessor to the Lessee pursuant to the
Services and Supply Agreement and related to the on-going operation of the
Ancillary Equipment. If Xxxxx R&M incurs increased costs for purchases of
catalysts or other consumable materials or other expenses related to its
operation the Ancillary Equipment which are intended to increase the net
revenues of the Xxxxx Company, then upon the written request of Xxxxx R&M the
parties shall meet to negotiate in good faith an equitable adjustment to the
calculation of the Ancillary Equipment Operating Fee to reflect such increased
costs; provided, however, that such adjustment shall not (i) have a material
adverse effect on the ability of the Xxxxx Company to operate in accordance with
the Base Case Financial Model and (ii) become effective until approved by the
Independent Engineer.
SECTION 13.2 Renewal Term. If Lessee has provided notice of exercise
of its option to extend the term hereof for an Ancillary Equipment Site Renewal
Term as provided in Section 20.2 hereof, Lessor and Lessee shall consult for the
purpose of determining the Fair Market Rental Value of the Ancillary Equipment
Site and the Ancillary Equipment as of the end of the Ancillary Equipment Site
Initial Term or the applicable Ancillary Equipment Site Renewal Term, as the
case may be, and any values agreed upon in writing shall constitute such Fair
Market Rental Value of the Ancillary Equipment for purposes of this Section
13.2. If Lessor and Lessee fail to agree upon such values on or prior to the
date six months prior to the expiration of the Ancillary Equipment Site Initial
Term or an Ancillary Equipment Site Renewal Term, as the case may be, either
party may request, by written notice to the other, that such values be
determined by the Appraisal Procedure. During any Ancillary Equipment Site
Renewal Term, the Lessee shall pay Lessor base rent determined in accordance
herewith quarterly in arrears for
11
use and occupancy of the Ancillary Equipment Site Leasehold and the Ancillary
Equipment Easement.
SECTION 13.3 Early Termination. Notwithstanding anything to the
contrary in Sections 13.1 or 13.2, the Ancillary Equipment Site Lease Term shall
end at such time as the Xxxxx Complex Ground Lease Term shall have ended.
ARTICLE XIV
NONTERMINATION
Except as provided in Article XV and Section 13.3, this Agreement
shall not terminate, nor shall the Ancillary Equipment Easement or the Ancillary
Equipment Leasehold be extinguished, lost, conveyed or otherwise impaired, or be
merged into or with any other interest or estate in the Ancillary Equipment Site
or any other property interest, in whole or in part, by any cause or for any
reason whatsoever, including, without limitation, the following: any damage to
or destruction of all or any part of the Ancillary Equipment, or the taking of
the Ancillary Equipment or any portion thereof by condemnation, requisition,
eminent domain or otherwise, any prohibition, limitation or restriction of any
party's use of all or any part of the Ancillary Equipment Site, the Ancillary
Equipment, the Ancillary Equipment Easement, or the interference of such use by
any Person, or any eviction by paramount title or otherwise, the coincident
ownership by any Person (including the Lessee) of any estate or interest in the
Ancillary Equipment Easement and other rights granted and conveyed pursuant to
this Agreement with any estate or interest in the Ancillary Equipment Site or
the Ancillary Equipment, any inadequacy, incorrectness or failure of the
description of the Ancillary Equipment Site, the Ancillary Equipment Easement or
any other property or rights intended to be granted or conveyed by this
Agreement, any default in the performance or the observance by any party of any
of their respective covenants and agreements to be performed and observed by the
respective party under any of the Project Documents or the Financing Documents,
the insolvency, bankruptcy, reorganization or similar proceedings by or against
any party hereto (and in the event of a bankruptcy proceeding involving the
Lessor, it is expressly intended that Lessee shall have the rights and options
provided in (S) 365(h) of Title 11 of the United States Code), any nonuse or
excessive use of any Ancilla(i)abry Equipment Easement, any execution of the
security interest granted by the Lessee to the Collateral Trustee or subsequent
transfer or assignment of the rights hereunder, or any other reason whatsoever,
whether similar or dissimilar to any of the foregoing. It is intended and agreed
by the parties hereto that the Ancillary Equipment Leasehold, the Ancillary
Equipment Easement, and other rights granted and conveyed hereunder shall be
separate and independent covenants and agreements of the parties hereto and
that, except as provided in Article XV, no Ancillary Equipment Leasehold,
Ancillary Equipment Easement or other right granted or conveyed pursuant to this
Agreement may be terminated without the express consent of the Collateral
Trustee.
Except as expressly provided in subparagraph (e) above, the provisions
of this Article XIV shall not limit or restrict the remedies available to Lessor
or Lessee in the event of a default by Lessee or Lessor, as the case may be,
under this Ancillary Equipment Site Lease, and
12
all such remedies are hereby reserved to Lessor or Lessee, as the case may be,
including (without limitation) an action for damages and/or an action for
specific performance.
ARTICLE XV
CONDEMNATION
If all or such a substantial portion of the Ancillary Equipment Site
is condemned or transferred in lieu of condemnation and the remainder is not
sufficient to permit operation of the Ancillary Equipment on a commercial basis,
the Ancillary Equipment Site Lease Term shall terminate at the time title vests
in the condemning authority, and the net proceeds of the condemnation shall be
applied first to pay off any amounts outstanding under the Financing Documents
and the remainder, if any, shall be divided between the Lessee and the Lessor in
proportion to the fair market sales value of their respective interests in the
property condemned. If an insubstantial portion of the Site is condemned at any
time, the Ancillary Equipment Site Lease Term shall not terminate and net
proceeds of the condemnation shall be used first to restore the Ancillary
Equipment Site, with the balance divided between the Lessor and the Lessee in
proportion to the fair market sales value of their interests in the property
condemned. For the purposes of this Article XV, the net proceeds of a
condemnation shall mean the total condemnation proceeds less the costs and
expenses incurred in connection with the condemnation (including legal fees).
ARTICLE XVI
BINDING EFFECT; SUCCESSORS AND ASSIGNS
The terms and provisions of this Ancillary Equipment Site Lease, the
appurtenant easements herein provided, and the respective rights and obligations
hereunder of the Lessee and the Lessor shall be binding upon, and inure to the
benefit of, their respective permitted successors, assigns and sublessors,
including without limitation the Collateral Trustee, the Financing Parties and
any subsequent transferee or assignee thereof. Notwithstanding anything to the
contrary herein, no assignment of the rights of either party to this Ancillary
Equipment Site Lease to any Person shall be effective unless or until the rights
of such party under the other Xxxxx R&M Agreements are assigned to such Person
ARTICLE XVII
NON-REMOVAL OF FACILITY
It is understood by the parties hereto that the Lessor has constructed
and is conducting the improvements and betterments to the Ancillary Equipment
contemplated herein and the Ancillary Equipment Site and the Ancillary Equipment
is the property of, and is owned by, the Lessor. At the end of the Ancillary
Equipment Site Lease Term Lessee shall surrender the Ancillary Equipment to
Lessor in good order, subject to depreciation, ordinary wear and tear and
casualty loss, and lessee shall have no right or option to remove all or any
portion of the
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Ancillary Equipment upon expiration or termination of the Ancillary Equipment
Site Lease Term.
ARTICLE XVIII
POSSESSION UPON TERMINATION
The Lessee covenants and agrees that at the end of the Ancillary
Equipment Site Lease Term it will peaceably and quietly yield up and surrender
possession of the Ancillary Equipment Site and any property thereon to the
Lessor.
ARTICLE XIX
INDEMNITY
SECTION 19.1 Lessee Indemnity. During the Ancillary Equipment Site
Lease Term, the Lessee assumes liability for, and agrees to protect, defend,
indemnify, save and hold harmless and keep whole the Lessor from and against any
and all liabilities (including without limitation liabilities arising out of the
doctrine of strict liability), obligations, losses, claims, actions, suits,
causes of action, judgments, damages, penalties, costs, disbursements and
expenses (including without limitation counsel fees), whether founded or
unfounded, of whatsoever kind or nature, imposed on, incurred by or asserted
against the Lessor or any other Person, relating to or arising from (i) the
conduct, operation or management of, or any work, act or omission whatsoever
done in or on the Ancillary Equipment, the Ancillary Equipment Site or the
Ancillary Equipment Site Easement, (ii) any breach or default on the part of the
Lessee in the performance of any covenant or obligation on the part of the
Lessee to be performed pursuant to the terms of this Ancillary Equipment Site
Lease, (iii) any tortious act or negligence of the Lessee or any of the Lessee's
agents, contractors, servants, employees, invitees, licensees or guests with
respect to the Ancillary Equipment, the Ancillary Equipment Site or the
Ancillary Equipment Site Easement or any other property of the Lessee on the
Ancillary Equipment Site or (iv) any accident, injury or damage whatsoever
caused to any person or property in or on the Ancillary Equipment, the Ancillary
Equipment Site or the Ancillary Equipment Site Easement or any other property of
the Lessee on the Ancillary Equipment Site; provided, however, that the Lessee
shall not be required to indemnify the Lessor for any liability arising out of
acts or events occurring after the end of the Ancillary Equipment Site Lease
Term, and provided, further, however, that the Lessee shall not be required to
indemnify the Lessor for any liability arising out of any work, act or omission
whatsoever done by Lessor at any time (whether pursuant to the Services or
Supply Agreement or otherwise).
SECTION 19.2 Lessor Indemnity. During the Ancillary Equipment Site
Lease Term, the Lessor assumes liability for, and agrees to protect, defend,
indemnify, save and hold harmless and keep whole the Lessee from and against any
and all liabilities (including without limitation liabilities arising out of the
doctrine of strict liability), obligations, losses, claims, actions, suits,
causes of action, judgments, damages, penalties, costs, disbursements and
expenses (including without limitation counsel fees), whether founded or
unfounded, of whatsoever kind
14
or nature, imposed on, incurred by or asserted against the Lessee or any other
Person, relating to or arising from (i) the conduct, operation or management of,
or any work, act or omission whatsoever done in or on the Xxxxx Refinery
Property, other than in or on the Ancillary Equipment or the Ancillary Equipment
Site, (ii) any breach or default on the part of the Lessor in the performance of
any covenant or obligation on the part of the Lessor to be performed pursuant to
the terms of this Ancillary Equipment Site Lease, (iii) any tortious act or
negligence of the Lessor or any of the Lessor's agents, contractors, servants,
employees, invitees, licensees or guests with respect to the Xxxxx Refinery
Property, (iv) any accident, injury or damage whatsoever caused to any person or
property in or on the Xxxxx Refinery Property, other than the Ancillary
Equipment or the Ancillary Equipment Site (subject to the following subclause
(v)), or (v) any liability arising out of any work, act or omission whatsoever
done by Lessor at any time (whether pursuant to the Services and Supply
Agreement or otherwise); provided, however, that the Lessor shall not be
required to indemnify the Lessee for any liability arising out of acts or events
occurring after the end of the Ancillary Equipment Site Lease Term.
ARTICLE XX
TERM
SECTION 20.1 Ancillary Equipment Site Lease Term. The term of this
Ancillary Equipment Leasehold (the "Ancillary Equipment Site Lease Term") shall
commence on the date hereof and, unless this Ancillary Equipment Site Lease is
sooner terminated pursuant to the provisions hereof, the Ancillary Equipment
Site Lease Term shall end on the last day of the Ancillary Equipment Site
Initial Term or, if this Ancillary Equipment Site Lease is renewed pursuant to
Section 20.2 hereof, on the last day of the last Ancillary Equipment Site
Renewal Term. At the expiration of the Ancillary Equipment Site Lease Term the
Ancillary Equipment Easement granted and conveyed herein shall wholly terminate
and revert to the Lessor.
SECTION 20.2 Renewal Term. If this Ancillary Equipment Site Lease
shall not have been earlier terminated, Lessee shall be entitled, at its option
upon irrevocable written notice to Lessor given at least twelve months prior to
the end of the then-current Ancillary Equipment Site Lease Term, at the end of
the Ancillary Equipment Site Initial Term and each Ancillary Equipment Site
Renewal Term, to renew this Ancillary Equipment Site Lease for up to five (5)
additional terms of five years each (each, an "Ancillary Equipment Site Renewal
Term"). All of the provisions of this Lease shall be applicable during each
Ancillary Equipment Site Renewal Term, except that rent shall be determined in
accordance with Section 13.2 hereof. If Lessee gives written notice to Lessor as
aforesaid exercising its option for an Ancillary Equipment Site Renewal Term,
then Lessor and Lessee shall immediately begin the determination of Fair Market
Rental Value described in Section 13.2. Rent during each Ancillary Equipment
Site Renewal Term shall be payable quarterly in arrears.
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ARTICLE XXI
MINERAL RIGHTS
Lessor hereby reserves all of the oil, gas and other minerals in and
under the Ancillary Equipment Leasehold and that may be produced therefrom
(including the right to receive royalties under existing leases), waiving
hereby, for the term of the Ancillary Equipment Leasehold and any extensions
thereof, all its rights to use the surface of the land included in the Ancillary
Equipment Leasehold for the purpose of exploring for or producing the said oil,
gas and other minerals.
ARTICLE XXII
MISCELLANEOUS
22.1 SECTION Assignment as Security for Lessee's Obligations . To
secure the indebtedness evidenced by the Senior Debt, the Lessee will assign,
mortgage and convey pursuant to a deed of trust to the Collateral Trustee its
right, title and interest hereunder and in and to this Ancillary Equipment Site
Lease and the Ancillary Equipment Leasehold and Ancillary Equipment Easement
pursuant to the terms of the Financing Documents. The Lessor hereby consents to
(i) such assignment and mortgage and (ii) any further assignment or mortgage by
(x) the Collateral Trustee, any successors and assigns of the Collateral
Trustee, including, without limitation, any purchaser of the Ancillary Equipment
Leasehold at a trustee's sale, foreclosure sale, deed in lieu of foreclosure or
other transfer in connection with the Indenture or (y) any successor or assign
of any purchaser described in the preceding clause (x). Lessor agrees, in
connection with any such assignment under this Section 22.1, to enter into the
consent and assignment agreement substantially in the form of Exhibit F,
provided that such consent and assignment agreement in no way alters or amends
the respective rights and obligation and Lessee as set out in this Lease. In the
event of a termination of this Ancillary Equipment Site Lease pursuant to
Section 365 of the Bankruptcy Reform Act of 1984, as amended, or any other
present or future law permitting the termination of this Ancillary Equipment
Site Lease, Lessor hereby agrees to enter into a new lease, on the same terms as
this Ancillary Equipment Site Lease, with the Collateral Trustee or any other
mortgagee of the Ancillary Equipment Leasehold or any designee of any thereof,
provided that the Collateral Trustee, such other mortgagee or such designee
requests such a new lease within 60 days after receipt of notice from Lessor
that such termination has occurred.
SECTION 22.2 Memorandum of Lease . Lessee have executed a Memorandum
of this Ancillary Equipment Site Lease, in the form of Exhibit G hereto, which
promptly shall be recorded in the Official Public Records of Real Property of
Jefferson County, Texas, by Lessee at its expense. Upon expiration or
termination of this Ancillary Equipment Site Lease, the parties shall execute
and deliver, and Lessee shall record at its expense, a memorandum of expiration
or termination of this Ancillary Equipment Site Lease. Such obligation shall
survive the expiration or termination of this Ancillary Equipment Site Lease and
shall be specifically enforceable.
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SECTION 22.3 Relationship of the Parties. The only relationship
between Lessor and Lessee established and evidenced by this Ancillary Equipment
Site Lease is the relationship of landlord and tenant, and the only estates
intended to be conveyed to Lessee or otherwise evidenced hereby are the
leasehold estate of Lessee in and with respect to the Ancillary Equipment Site
and the Ancillary Equipment, and the appurtenant easement estates as herein
expressly provided. This Ancillary Equipment Site Lease is not intended to
grant, transfer, assign, convey or evidence any other estate in or to Lessee,
including (without limitation) any fee simple estate, determinable fee estate,
nor fee estate for years, in or to the Ancillary Equipment Site.
SECTION 22.4 Time is of the Essence. Time is of the essence of this
Ancillary Equipment Site Lease.
SECTION 22.5 Notices. Any notice, request, consent, waiver or other
communication required or permitted hereunder shall be effective only if it is
in writing and personally delivered by hand or by overnight courier or sent by
certified or registered mail, postage prepaid, return receipt requested,
addressed as follows:
If to Lessor:
Xxxxx Refining & Marketing, Inc.
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
If to Lessee:
Port Xxxxxx Xxxxx Company L.P.
Port Xxxxxx Refinery
0000 X. Xxxxxxx Xxxxx
Office Number 36
Port Xxxxxx, Texas 77640
Attention: X.X. Xxxx
(or if sent by U.S. Mail:
Port Xxxxxx Xxxxx Company L.P.
X.X. Xxx 000
Xxxx Xxxxxx, Xxxxx 00000-0000
Attention: X.X. Xxxx)
Any such notice, request, consent, waiver or other communication
required or permitted hereunder, whether to Lessor or Lessee, shall also be
personally delivered by hand or by overnight courier or sent by certified or
registered mail, postage prepaid, return receipt requested, to the Collateral
Trustee on behalf of the Financing Parties, addressed as follows:
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Bankers Trust Company
Corporate Trust & Agency Services
Four Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx XxXxxxxxx
SECTION 22.6 Severability. Any provision of this Ancillary Equipment
Site Lease that shall be prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 22.7 Amendment. Neither this Ancillary Equipment Site Lease
nor any of the terms hereof may be terminated, amended, supplemented, waived or
modified orally, but only by an instrument in writing signed by the party
against which the enforcement of the termination, amendment, supplement, waiver
or modification shall be sought and, unless and until the Lessor shall have
received written notice from the Collateral Trustee that the Liens securing the
Senior Debt have been released, the Collateral Trustee.
SECTION 22.8 Headings, etc. Captions and headings in this Ancillary
Equipment Site Lease are for reference only and do not constitute a part of the
substance of this Ancillary Equipment Site Lease.
SECTION 22.9 Counterparts. This Ancillary Equipment Site Lease may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument. Delivery of an executed
signature page of this Ancillary Equipment Site Lease by facsimile transmission
shall be effective as delivery of a manually executed counterpart hereof.
SECTION 22.10 GOVERNING LAW. THIS ANCILLARY EQUIPMENT SITE LEASE HAS
BEEN DELIVERED IN, AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 22.11 WAIVER OF JURY TRIAL. THE LESSOR AND LESSEE HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS ANCILLARY EQUIPMENT SITE LEASE OR ANY OTHER PROJECT
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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ARTICLE XXIII
NO MERGER
SECTION 23.1 No Merger. So long as the Senior Debt is outstanding,
unless the Collateral Trustee shall otherwise expressly consent in writing, the
fee title to the Ancillary Equipment Site shall remain separate and distinct
from and shall not be merged into the leasehold estate demised to the Lessee
hereby.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Ancillary Equipment Site Lease and to be duly executed and delivered as of the
day and year first above written.
PORT XXXXXX XXXXX COMPANY L.P.
By: SABINE RIVER HOLDING CORP.,
General Partner
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
XXXXX REFINING & MARKETING, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
APPENDIX A -- DEFINITIONS TO THE:
Services and Supply Agreement
Product Purchase Agreement
Xxxxx Complex Ground Lease
Ancillary Equipment Site Lease
Transfer and Assignment Agreement
General Provisions
------------------
The following terms shall have the following meanings for all purposes
of the Services and Supply Agreement, the Product Purchase Agreement, Xxxxx
Complex Ground Lease, the Ancillary Equipment Site Lease and the Transfer and
Assignment Agreement, each referred to below, unless otherwise defined in such
agreements or the context thereof shall otherwise require, and such meanings
shall be equally applicable to both the singular and the plural forms of the
terms herein defined. In the case of any conflict between the provisions of
this Appendix A and the provisions of the main body of any of the above
agreements, the provisions of the main body of such agreement shall control the
construction of such agreement.
Unless the context otherwise requires, references to (i) agreements
shall include sections, schedules, exhibits and appendices thereto and shall be
deemed to mean and include such agreement (and sections, schedules, exhibits and
appendices) as the same may be amended, supplemented and otherwise modified from
time to time, (ii) parties to agreements or government agencies shall be deemed
to include the permitted successors and assigns of such parties and the
successors and assigns of such agencies and (iii) laws or regulations shall be
deemed to mean such laws or regulations as the same may be amended from time to
time and any superseding laws or regulations covering the same subject matter.
"Actual Xxxxx Capacity" means with respect to the Xxxxx, its capacity,
from time to time, to process feedstreams.
"Actual Crude Capacity" means with respect to the Ancillary Equipment,
its capacity, from time to time, to process crude oil.
"Actual Hydrocracker Capacity" means with respect to the Hydrocracker,
its capacity, from time to time, to process gas oil.
"Adjacent Refinery Property" means the land described on Exhibit B to
the Xxxxx Complex Ground Lease and also on Exhibit C to the Ancillary Equipment
Site Lease.
"Amine Treating Unit" means the amine treating unit constructed at the
Refinery and designated ATU 7841.
"Ancillary Equipment" means, collectively, the Crude Unit and the
other processing units described on Exhibit B to the Ancillary Equipment Site
Lease.
"Ancillary Equipment Easement" has the meaning given such term in
Section 2.2 of the Ancillary Equipment Site Lease.
20
"Ancillary Equipment Operating Fee" has the meaning given such term in
Section 13.2(b) of the Ancillary Equipment Site Lease.
"Ancillary Equipment Site" has the meaning given such term in Section
2.1 of the Ancillary Equipment Site Lease.
"Ancillary Equipment Site Initial Term" means the period commencing on
the August 19, 1999 and ending on August 19, 2029.
"Ancillary Equipment Site Lease" means the Ancillary Equipment Site
Lease and Easement Agreement, dated as of August 19, 1999, between Xxxxx R&M and
the Xxxxx Company.
"Ancillary Equipment Site Leasehold" has the meaning given such term
in Section 2.1 of the Ancillary Equipment Site Lease.
"Ancillary Equipment Site Lease Term" has the meaning given such term
in Article XX of the Ancillary Equipment Site Lease.
"Ancillary Equipment Site Renewal Term" means each period following
the end of the Ancillary Equipment Initial Term with respect to which Lessee has
the option to renew the Ancillary Equipment Site Lease pursuant to Article XX of
the Ancillary Equipment Site Lease.
"Ancillary Equipment Upgrade Contract" means the Reimbursable Contract
for Engineering, Procurement and Construction, dated as of March 24, 1998,
between Xxxxx R&M and the Contractor, as amended by Amendment No. One, dated as
of August 19, 1999, as further amended, supplemented or otherwise modified from
time to time.
"Annual Budget and Operating Plan" means, for any Operating Year, the
budget and operating plan in effect pursuant to Section 6 of the Services and
Supply Agreement.
"Applicable Law" means, collectively, (i) all Permits and (ii) all
laws, treaties, ordinances, judgments, decrees, injunctions, writs, orders and
stipulations of any court, arbitrator or governmental agency or authority and
statutes, rules, regulations, orders and interpretations thereof of any federal,
state, county, municipal, regional, environmental or other governmental body,
instrumentality, agency, authority, court or other body applicable from time to
time to the Refinery, the operation or maintenance of the Refinery, or the
performance of any obligations under the Xxxxx R&M Agreements, any other Project
Document or any other agreement entered into in connection therewith.
"Appraisal Procedure" with respect to any renewal option of any lease,
means a procedure whereby two independent Qualified Appraisers, one appointed by
the lessor and one by the lessee, shall agree upon the value, period, amount or
determination then the subject of an appraisal, as follows: If either the
lessor or the lessee shall determine that a value, period or amount of
determination to be determined under such lease or any related document cannot
21
timely be established by agreement, such party shall appoint its Qualified
Appraiser and give notice thereof to the other party, which shall appoint its
Qualified Appraiser within 10 days thereafter. If such other party does not
appoint its Qualified Appraiser within such ten day period, the determination of
the first Qualified Appraiser made within 20 days thereafter shall be conclusive
and binding on the lessor and the lessee. If within 20 days after appointment
of the second of the two Qualified Appraisers, such Qualified Appraisers are
unable to agree upon the value, period, amount or determination in question,
they jointly shall appoint a third Qualified Appraiser within 10 days
thereafter, or, if they do not do so, either the lessor or the lessee may
request the American Arbitration Association office in Houston, Texas (or if no
such office exists at such time, the American Arbitration Association office in
New York, New York), or any organization successor thereto, to appoint the third
Qualified Appraiser from a panel of arbitrators knowledgeable on the subject of
refinery land and asset valuations in the Texas Gulf Coast area. The decision
of the third Qualified Appraiser shall be given within 20 days after his
appointment. If three Qualified Appraisers shall be so appointed, the average
of all three determinations shall be conclusive and binding on the lessor and
the lessee unless the determination of one Qualified Appraiser is disparate from
the middle determination by more than twice the amount by which the third
determination is disparate from the middle determination, in which case the
determination of the most disparate Qualified Appraiser shall be excluded and
the average of the remaining two determinations shall be conclusive and binding
on the lessor and the lessee. The obligation to pay the fees and expenses of
Qualified Appraisers incurred in connection with any Appraisal Procedure shall
be divided equally between the lessor and the lessee.
"Auxiliary Facilities" has the meaning given such term in Article VI
of the Xxxxx Complex Ground Lease. "Auxiliary Rights" has the meaning given such
term in Article VI of of the Xxxxx Complex Ground Lease.
"Available Xxxxx Company Maya" means, for any day, the sum of (a) the
Contract Quantity for such day, plus (b) the extent, if any, that the Available
Xxxxx Company Maya for the preceding day exceeds the Actual Crude Capacity for
such preceding day.
"Available Xxxxx Company VTBs" means, for any day, the sum of (a) the
Xxxxx Company VTBs produced by the Crude Unit on such day, plus (b) the extent,
if any that Available Xxxxx Company VTBs for the preceding day exceeds Actual
Xxxxx Capacity for such preceding day.
"Base Case Financial Model" shall mean the financial model described
on Exhibit A to the Services and Supply Agreement.
"BPD" has the meaning given such term in the Long-Term Oil Supply
Agreement.
"Business Day" means any day other than Saturday, Sunday or a legal
holiday in the United States of America.
22
"Xxxxx Equipment" means all Xxxxx Refinery Property other than the
Ancillary Equipment.
"Xxxxx Hydrogen Supply Contract" means the Product Supply Agreement,
dated as of August 1, 1999, between Xxxxx R&M and Air Products, Inc.
"Xxxxx Xxxx" means Maya Crude Oil purchased by Xxxxx R&M.
"Xxxxx Processing Fee" means, for any monthly period, the total fees
due the Xxxxx Company from Xxxxx R&M for processing services provided pursuant
to Sections 3.5, 4.2 and 4.3.
"Xxxxx R&M" means Xxxxx Refining & Marketing, Inc., a Delaware
corporation.
"Xxxxx R&M Agreements" means, collectively, (i) the Services and
Supply Agreement, (ii) the Product Purchase Agreement, (ii) the Xxxxx Complex
Ground Lease and (iv) the Ancillary Equipment Site Lease.
"Xxxxx Refinery Property" means all real and personal property owned
by Xxxxx R&M and located at the Refinery.
"Xxxxx" means the delayed xxxxx to be constructed at the Refinery and
designated DCU 843.
"Xxxxx Company" means Port Xxxxxx Xxxxx Company L.P., a Delaware
limited partnership.
"Xxxxx Company Crude Oil Volume" means, on any day, the volume, stated
in BPD, of Xxxxx Company-owned crude oil processed through the Crude Unit.
"Xxxxx Company Maya" means Maya Crude Oil purchased by the Xxxxx
Company.
"Xxxxx Complex"means, collectively, the Xxxxx, the Hydrocracker, the
Sulfur Plant, the Sour Water Stripper, the Amine Treating Unit and the Xxxxx
Complex Offsites.
"Xxxxx Complex Design Capacity" means with respect to the Xxxxx
Complex, its nameplate capacity, stated in BPD, to process feedstocks.
"Xxxxx Complex Ground Lease" means the Xxxxx Complex Ground Lease and
Blanket Easement Agreement, dated as of August 19, 1999, between Xxxxx R&M and
the Xxxxx Company.
"Xxxxx Complex Ground Lease Term" has the meaning given such term in
Article XX of the Xxxxx Complex Ground Lease.
23
"Xxxxx Complex Initial Term" means the period commencing on August 19,
1999 and ending on August 19, 2029.
"Xxxxx Complex Leasehold" has the meaning given such term in Section
2.1 of the Xxxxx Complex Ground Lease.
"Xxxxx Complex Offsites" means, collectively, (a) the control room,
flare, cooling tower, sulfur loading facilities and power station no. 6 that are
being constructed pursuant to the a Contract and (b) the xxxxx feed tank nos.
108 and 109 that are being modified pursuant to the EPC Contract.
"Xxxxx Complex Renewal Term" means each period following the end of
the Initial Term with respect to which Lessee has the option to renew the Xxxxx
Complex Ground Lease pursuant to Article XX of the Xxxxx Complex Ground Lease.
"Xxxxx Complex Site" has the meaning give such term in Section 2.1(a)
of the Xxxxx Complex Ground Lease.
"Xxxxx Design Capacity" means with respect to the Xxxxx, its nameplate
capacity, stated in BPD, to process feedstocks.
"Collateral Trustee" means the collateral trustee granted a security
interest, on behalf of the Financing Parties, in the Senior Debt pursuant to the
Financing Documents and any successor collateral trustee thereunder.
"Common Security Agreement" means the Common Security Agreement, dated
as of August 19, 1999, among the Xxxxx Company, the Funding Company, Sabine,
Neches, Bankers Trust Company, as Collateral Trustee and Depositary Bank,
Deutsche Bank AG, New York Branch, as Administrative Agent, Winterthur
International Insurance Company Limited, as Oil Payment Insurers Administrative
Agent and HSBC Bank USA, as Capital Markets Trustee,
"Contract Quantity" means (a) for any day when the Long-Term Oil
Supply Agreement is in effect and PMI has not reduced the volume of Maya
available to the Xxxxx Company pursuant thereto, the "Contract Quantity" in
effect on such day pursuant to the Long-Term Oil Supply Agreement or such lesser
amount of Maya Crude Oil as may be purchased thereunder pursuant to Section 8.2
of the Long-Term Oil Supply Agreement, and (b) for any other day, the amount of
Maya Crude Oil sufficient to operate the Xxxxx at eighty percent of Actual Xxxxx
Capacity.
"Contractor" means Xxxxxx Xxxxxxx USA Corporation, a Delaware
corporation.
"Crude Design Capacity" means with respect to the Ancillary Equipment,
its nameplate capacity, stated in BPD, to process heavy crude oil.
24
"Crude Unit" means the crude unit and vacuum tower located at the
Refinery and collectively designated AVU-146.
"CRU 1344 Hydrotreater" means the naphtha hydrotreater located at the
Refinery and designated CRU 1344.
"Easements" has the meaning given such term in Section 2.2 of the
Xxxxx Complex Ground Lease.
"EPC Contract" means the Contract for Engineering, Procurement and
Construction Services, dated as of July 12, 1999, between the Xxxxx Company and
the Contractor, as amended, supplemented or otherwise modified from time to
time.
"Event of Force Majeure" means any event or circumstance if (i) such
event or circumstance is beyond the reasonable control of the affected party and
(ii) such event or circumstance is not the direct or indirect result of a
party's negligence or the failure of such party to perform any of its
obligations under the applicable Xxxxx R&M Agreement, including, without
limitation:
1. any interruption or cessation in delivery of Xxxxx Company Maya
to the Refinery, whether or not due to an event of force majeure
under the Long-Term Oil Supply Agreement;
2. acts of God, epidemic, earthquake, landslide, lightning, fire,
explosion, accident, tornado, drought, blight, famine, flood,
hurricane, or other extraordinary weather conditions more severe
than those experienced at any time in the last thirty (30) years
for the geographic area of the Refinery;
3. acts of a public enemy, war (declared or undeclared), blockade,
insurrection, riot or civil disturbance, sabotage, quarantine, or
any exercise of the power of eminent domain, police power,
condemnation or other taking by or on behalf of any public,
quasi-public or private entity;
4. laws, rules, regulations, orders, judgments or other acts of any
foreign, federal, state or local court, administrative agency,
governmental body or authority;
5. strikes, boycotts or lockouts, except any such strike, boycott or
lockout that is not national or industry-wide that involves the
employees of Xxxxx R&M; and
6. a partial or entire interruption or other failure of (a) the
supply of electricity, water, wastewater treatment, steam,
hydrogen or other utilities
25
to the Refinery or any part thereof, or (b) pipeline service,
ship or barge service, dock access or usage or other
transportation facilities.
"Excess Xxxxx Capacity" means, for any day, the extent that Actual
Xxxxx Capacity for such day exceeds the capacity necessary for the Xxxxx to
process the Available Xxxxx Company VTBs for such day.
"Excess Xxxxx Capacity Option" has the meaning given such term in
Section 4.2(a) of the Services and Supply Agreement.
"Excess Crude Capacity" means, for any day, the extent that Actual
Crude Capacity for such day exceeds the capacity necessary for the Ancillary
Equipment to process the Available Xxxxx Company Maya for such day and the light
crude oil necessary to process such Available Xxxxx Company Maya.
"Excess Crude Capacity Option" has the meaning given such term in
Section 3.5(b) of the Services and Supply Agreement.
"Excess Hydrocracker Capacity" means, for any day, the extent that
Actual Hydrocracker Capacity for such day exceeds the capacity necessary for the
Hydrocracker to process Xxxxx Company VGO produced by the Xxxxx on such day.
"Excess Hydrocracker Capacity Option" has the meaning given such term
in Section 4.3(a) of the Services and Supply Agreement.
"Fair Market Rental Value" shall mean, with respect to any land and/or
equipment to be leased pursuant to a lease, the value, which shall not in any
event be less than zero, that would be obtained in an arm's length transaction
for cash between an informed and willing lessee and an informed and willing
lessor, neither of whom is under any compulsion to lease, for the use of such
land and/or equipment for a given period, without regard, in the case of land,
(i) to the value of any equipment or improvements that are not included in such
lease but which are located on such land, (ii) to the value of any reversionary
interest of the lessor in any equipment or improvements located on such land,
whether or not included in such lease, or (iii) to the highest and best use of
such land.
"Final Completion" has the meaning given such term in the EPC
Contract.
"Financial Close" means the date when the initial funding of the
Senior Debt has occurred.
"Financing Documents" has the meaning given such term in the Common
Security Agreement.
"Financing Parties" means any lender or note purchaser that may at any
time be party to the Financing Documents and any trustee or agent acting on
their behalf.
26
"Funding Company" means Port Xxxxxx Finance Corp., a Delaware
corporation.
"GFU 241" means the distillate hydrotreater located at the Refinery
and designated GFU 241.
"GFU 242" means the distillate hydrotreater located at the Refinery
and designated GFU 242.
"GFU 243" means the distillate hydrotreater located at the Refinery
and designated GFU 243.
"Guaranteed Values" has the meaning given such term in the EPC
Contract.
"Heavy Oil Processing Facility" means, collectively, the Xxxxx Complex
and the Ancillary Equipment.
"Hydrocracker" or "HCU 942" means the hydrocracker to be constructed
at the Refinery and designated HCU 942.
"Hydrogen" means hydrogen purchased by the Xxxxx Company pursuant to
the Hydrogen Supply Agreement.
"Hydrogen Supply Agreement" means the Supply Agreement, dated as of
August 1, 1999, between the Xxxxx Company and Air Products, Inc.
"Independent Engineer" means Xxxxxx & Xxxxx, Inc., or successor
thereto appointed pursuant to the Financing Documents.
"Inflation Factor" shall mean, for any month, (a) the most current
Producer Price Index published by the U.S. Department of Labor, Bureau of
Statistics, divided by, (b) the Producer Price Index on August 19, 1999.
"Labor Costs" shall mean, with respect to any service provided by
Xxxxx R&M, all reasonable direct labor costs of Xxxxx R&M in performing such
service including wages, salaries, overtime charges, reasonable and customary
bonuses, payroll insurance and taxes and holidays, vacations, group medical,
dental and life insurance and other employee benefits.
"LCO" means light cycle oil.
"Lessor Ancillary Equipment Upgrade" shall have the meaning given such
term in Section 6.1 of the Ancillary Equipment Site Lease.
"Lien" any mortgage, security interest, pledge, hypothecation,
encumbrance or lien (statutory or other) of any kind or nature whatsoever.
27
"Long-Term Oil Supply Agreement" means the Maya Crude Oil Sale
Agreement, dated as of March 10, 1998, between PMI and Xxxxx R&M, as amended by
the First Amendment and Supplement to the Maya Crude Oil Sales Agreement, dated
as of August 19, 1999, and as assigned by Xxxxx R&M to the Xxxxx Company
pursuant to the Long-Term Oil Supply Agreement Assignment.
"Long-Term Oil Supply Agreement Assignment" means the Assignment of
the Long-Term Oil Supply Agreement, dated as of August 19, 1999, by Xxxxx R&M to
the Xxxxx Company.
"Maya Crude Oil" means Mexican crude oil of the "Maya" type, as more
particularly described in the Long-Term Oil Supply Agreement and, to the extent
necessary, such alternative crude oil(s) and/or other feedstock(s) that may be
used to produce the Required Product Mix.
"Neches" mean Neches River Holding Corp., a Delaware corporation.
"Operating Year" means (i) the period beginning on the Start-up Date
and ending on the last day of the calendar year in which the Start-up Date
occurs and (ii) each calendar year thereafter. All annual amounts set forth in
the Xxxxx R&M Agreements shall be adjusted pro rata for the first Operating
Year.
"Performance Test Standards" has the meaning given such term in the
EPC Contract.
"Permit" means any valid waiver, exemption, variance, franchise,
permit, authorization, license or similar order of or from any federal, state,
county, municipal, regional, environmental or other governmental body,
instrumentality, agency, authority, court or other body having jurisdiction over
the Refinery, the Xxxxx Complex or the Ancillary Equipment or the performance of
any obligation under any Xxxxx R&M Agreement, any Project Document or any other
agreement in connection therewith.
"Permitted Liens" means (i) the respective rights and interests
created by or under the Financing Documents and the Project Documents, (ii)
Liens for Taxes that either are not delinquent or are being contested in good
faith and by appropriate proceedings diligently conducted, so long as such
proceedings do not (a) involve a substantial risk of foreclosure, forfeiture,
loss or sale of any portion of the Xxxxx Refinery Property subject to the
Ancillary Equipment Site Lease or the Xxxxx Complex Ground Lease or interest
therein, (b) interfere with the use, possession or disposition of any Xxxxx
Refinery Property subject to the Ancillary Equipment Site Lease or the Xxxxx
Complex Ground Lease or interest therein or (c) interfere with the payment of
rent under the Ancillary Equipment Site Lease or the Xxxxx Complex Ground Lease;
(iii) materialmen's, mechanics', workmen's, repairmen's, employees', carriers',
warehousemen's and other like Liens arising in the ordinary course of business
for amounts that either are not more than 30 days past due or are being
contested in good faith by appropriate proceedings, so long as such proceedings
satisfy the conditions for the continuation of
28
proceedings to contest Taxes set forth in clause (ii) above; (iv) Liens of any
of the types referred to in clauses (ii) and (iii) above that have been bonded
for the full amount in dispute (or as to which other security arrangements
reasonably satisfactory to the Collateral Trustee have been made); (v) Liens
securing judgments, decrees or orders of any court (i) that are not currently
dischargeable or (ii) that have been discharged or stayed or appealed within
thirty (30) days after the date of such judgment, decree or order (in the case
of a stay or appeal, during the period of such stay or appeal); (vi) other Liens
that would not impair (x) the ability of the Xxxxx Company or its successors,
assigns or subtenants to operate the Xxxxx Complex in accordance with the Base
Case Financial Model or (y) any of the security interests granted, or to be
granted, by the Xxxxx Company to the Financing Parties pursuant to the Financing
Documents, (vii) with respect to the Ancillary Equipment Site Lease, the Liens
listed on Schedule I thereto; and (viii) with respect to the Xxxxx Complex
Ground Lease, the Liens listed on Schedule I thereto.
"Permitted Reimbursable Expenses" shall mean, with respect to any
service provided by Xxxxx R&M, any reasonable expense or expenditure incurred in
performance of such service including, without limitation, (i) Labor Costs, (ii)
purchases of spare parts, tools, equipment, consumables, materials and other
supplies necessary for performance of such service and (iii) direct cost of
subcontract labor or services needed to perform such service.
"Person" an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"PMI" means P.M.I. Comercio Internacional, S.A. de C.V., a corporation
organized under the laws of Mexico.
"Product Purchase Agreement" means the Product Purchase Agreement,
dated as of August 19, 1999, between Xxxxx R&M and the Xxxxx Company, as
amended, supplemented or otherwise modified from time to time.
"Products" means each product described under the heading "Product" on
Exhibits A-1 through A-42 to the Product Purchase Agreement.
"Project Documents" means, collectively, the Services and Supply
Agreement, the Product Purchase Agreement, the Long-Term Oil Supply Agreement,
the EPC Contract, the Xxxxx Complex Ground Lease, the Ancillary Equipment Site
Lease and the Hydrogen Supply Agreement.
"Prudent Industry Practice" means those practices, methods, equipment,
specifications and standards of safety and performance, as the same may change
from time to time, as are commonly used in refinery facilities in the United
States of a type and size similar to the Refinery.
"Qualified Appraiser" means an appraisal firm with a national
reputation and experience in appraising facilities of a nature and type similar
to the Refinery.
29
"Reconciliation Statement" has the meaning given such term in Section
7.2(a) of the Services and Supply Agreement.
"Refinery" means, collectively, the existing oil refinery owned by
Xxxxx R&M located in Port Xxxxxx, Texas, the Ancillary Equipment and the Xxxxx
Complex.
"Regulated Utilities" has the meaning given such term in Section
5.5(f) of the Services and Supply Agreement.
"Required Product Mix" means, from time to time, the quantity and
quality specifications of products to be produced by the Heavy Oil Processing
Facility pursuant to Section 2.2 of the Product Purchase Agreement.
"Sabine" means Sabine River Holding Corp., a Delaware corporation.
"Senior Debt" has the meaning given such term in the Common Security
Agreement.
"Senior Debt Obligations" means the obligations to pay principal and
interest on the disbursed Senior Debt, and all commissions, fees, indemnitees,
prepayment premiums and other amounts payable to the senior lenders under the
Financing Documents.
"Services" has the meaning set forth in Section 2.1 of the Services
and Supply Agreement.
"Services and Supply Agreement" means the Services and Supply
Agreement, dated as of August 19, 1999, between Xxxxx R&M and the Xxxxx Company,
as amended, supplemented or otherwise modified from time to time.
"Sour Water Stripper" means the sour water stripper to be constructed
at the Refinery and designated SWS-8747.
"Standards" means, in addition to any other standards set forth in the
EPC Contract, the technical requirements of the Project Documents, generally
accepted standards of professional care, skill, diligence and competence
applicable to engineering and construction and project management practices,
good refinery and petrochemical industry practices for oil refineries of similar
size, type and design to the Refinery, manufacturer's specifications and
warranty requirements and all Applicable Laws.
"Start-up Date" means the date on which hydrocarbons are first
introduced into the Xxxxx Complex for the processing of test runs under the EPC
Contract.
"Start-up Period" means the period from the Start-up Date until Final
Completion.
30
"Sulfur Plant" means the sulfur plant to be constructed at the
Refinery and designated SRU 545.
"Supplies" has the meaning set forth in Section 2.1 of the Services
and Supply Agreement.
"Tax" means, with respect to any site or parcel of land and the
improvements thereon, all real estate taxes and assessments, including
substitutes therefor or supplements thereto, assessed upon, levied against or
imposed on such land and improvements located thereon which accrue and are due
and payable during the term of the Xxxxx Complex Ground Lease. Notwithstanding
anything to the contrary contained herein, the term "Taxes" shall not include
any franchise, income, corporation, inheritance, succession, gift, estate,
realty transfer, capital or other tax which may be charged or assessed against
Lessor or any income, excess profit or revenue tax or any other tax which may be
assessed against or become a lien upon the Xxxxx Complex Site or the rent
accruing therefrom.
"Total Crude Oil Volume" means, for any day, the total daily volume,
stated in BPD, of crude oil processed by the Crude Unit.
"Transfer and Assignment Agreement" means the Transfer and Assignment
Agreement, dated as of August 19, 1999, between Xxxxx R&M and the Xxxxx Company,
as amended, supplemented or otherwise modified from time to time.
"VGO" means vacuum gas oil.
"VTBs" means vacuum tower bottoms.
"Warranties" means the requirements of all warranties and guarantees
applicable to equipment and structures constituting the Xxxxx Complex or the
Ancillary Equipment provided by the Contractor, subcontractors, vendors,
suppliers or others.
Exhibit A
Ancillary Equipment Site Lease
ANCILLARY EQUIPMENT SITE DESCRIPTION*
The Ancillary Equipment Site is composed of seven (7) Tracts of land described
by metes and bounds on Pages 2 though 12 of this Exhibit A. Tracts 8 through 14,
as described on pages 13 through 30 of this Exhibit A, are centerline
descriptions of twenty (20) foot wide access easements appurtenant to Lessee's
leasehold estate in and to Tracts 1 through 7.
Page 1 of 30
--------------
* Twenty nine pages of metes and bounds descriptions accompanying this Exhibit
have been omitted from the filing of this registration statement and shall be
made available to the Commission upon request.
Exhibit B
Ancillary Equipment Site Lease
ANCILLARY EQUIPMENT
Unit Refinery Designation
---- --------------------
Crude Unit and Vacuum Tower AVU 146
Distillate Hydrotreater (jet) GFU 242
and related Amine Regeneration
Unit and Compressor Equipment
Distillate Hydrotreater (diesel) GFU 243
Naptha Hydrotreater CRU 1344
Exhibit C
Ancillary Equipment Site Lease
ADJACENT REFINERY PROPERTY DESCRIPTION**
The Adjacent Refinery property is composed of eleven (11) Tracts of land
described by metes and bounds on Pages 2 through 30 of the Exhibit B; LESS AND
EXCEPT the parcels of land (Parcels "X," "X," "C," "D," "E," "F," "G," "H,"
"12," "13", "0", "J-2," "0.519 Acre Tract," "L," "M," and "N1") described by
metes and bounds on Pages 31 through 70 of this Exhibit C.
Page 1 of 70
---------------
** Sixty nine pages of metes and bounds descriptions accompanying this Exhibit
have been omitted from the filing of this registration statement and shall
be made available to the Commission upon request.
Exhibit D
Ancillary Equipment Site Lease
LESSOR ANCILLARY EQUIPMENT UPGRADE DESCRIPTION
A. AVU 146 CRUDE UNIT REVAMP
1.0 Project Description
Modification of the crude and vacuum unit will be required to process
250,000 BPSD of a Maya crude blend. To accomplish this, upgrading,
replacement, removal, and additions will be required for various pieces of
equipment and piping. Upgrading of process piping and exchanger shell
materials will be necessary for the higher temperature and pressure
operation. Modifications to the vacuum tower and H-101 Atmospheric
heater are also necessary. The internals of the desalters will be upgraded
and some of the existing steam turbine drivers will be replaced with motor
drivers. Some of the pumps, exchangers, piping and insulation also require
replacement. Modifications to instrumentation and electrical will be
needed. Some foundation work is also necessary.
2.0 Scope of Work
The following major changes, as depicted on the PFDs/PIDs for the Revamp
Study, are required for AVU-146 Crude Unit to process 250,000 BPSD
Maya/Arab light crude blend, plus up to 8,000 BPSD of slops:
2.1 New E-140A/B HDF Product/Crude to be installed in cold train.
2.2 Re-pipe the AGO/Crude Exchanger (E-109) to preheat raw crude in
parallel with HVGO/Crude Exchanger (E-129) before it is sent to the
desalters.
2.3 New E-141 VTB/crude to be installed in parallel with E-140 A/B.
2.4 Convert one back of the E-103'6 to LVGO/Laude service.
2.5 Modify the existing desalters (D-101 & D-102) to bielectric design,
as specified by the desalter vendor. This includes new internals,
transactors, and peripherals.
2.6 Re-pipe the desalted crude preheat train to heat crude in the
following sequence:
2.6.1 HDF Pumparound and Product/Crude Exchangers (E-107 A/B will be
new E-142 A/B HRF PA/Crude installed upstream of E-107's.
2.6.2 New E-144 A/B AGO/Crude installed upstream of E-131's.
2.6.3 Vacuum Tower Bottoms/Crude Exchangers (E-131 A/D) are to
remain in service with the addition of 5 new shells.
Exhibit D
Ancillary Equipment Site Lease
2.7 Revamp existing H-101 Heater from an 8 pass design to 16 pass design.
2.8 Replace the ATU Bottoms Pumps (P-112 A/B) with larger pumps and 1
motor 1 turbine driver.
2.9 Install larger drivers on P-111-A/B AGO Product Pumps.
2.10 Install structured packing in T-108 vacuum tower wash bed.
2.11 Upgrade T-108 vacuum ejector system with new ejectors, new 2nd stage
vacuum condenser, and new vacuum off gas compressor to run in parallel
with existing.
2.12 Remove the demister pads in the Vacuum Tower (T-108) below the LVGO
and HVGO sections.
2.13 Xxxxxxx X-000 xxxx xxx xxxx X-000 A/B inlet to T-101 atmos tower.
2.14 Replace the VTU Bottoms Pumps (P-123 A/B/C) with two new larger pumps
and motor, 1 turbine driver.
2.15 Replace the VTU Bottoms Booster Pumps (P-130 A/B/C) with two new
larger pumps and motor, 1 turbine driver.
2.16 Some foundation work will be required. Foundations will be needed for
the new exchangers and larger pumps. New support structure and
foundations may be needed. Existing foundations will be modified where
possible for other replacement equipment.
2.17 New electrical work will be needed for the larger pumps and desalter
internals. Existing electrical will be utilized for replacement
equipment where possible.
Numerous piping modifications are required to achieve these processing changes.
3
Exhibit D
Ancillary Equipment Site Lease
B. GFU 242 JET HYDROTREATER REVAMP
1.0 Project Description
Modifications of existing GFU Jet Hydrotreater Unit will be necessary to
process approximately 30,000 bpd of Maya kerosene to produce Jet 55. Those
modifications include minor work on the effluent cold separator and
installing a new air cooler. Minor amounts of new piping, piping
replacements and insulation will be required. With the exception of
electrical to a new fair cooler, the instrumentation and electrical
basically remains unchanged.
2.0 Scope of Work
GFU 242 Jet Hydrotreater Unit will process approximately 30,000 B/D of
Kerosene range material for the Maya case producing Jet 55. The design
charge rate and operating conditions are basically the same as current feed
rates and conditions and therefore only a few modifications are required. A
cursory evaluation was performed to check hydraulics, etc. Based on that
evaluation, few changes are required. The primary changes involve
relocating a used reactor from GFU 243 due to the higher sulfur content in
the feed, improving the separation facilities downstream of the reactor,
and installing water wash facilities due to the higher levels of sulfur.
Modifications include:
2.1 New piping from condensate source to tie in before C-204.
2.2 Modify existing Reactor Effluent Cold Separator, F-208, to accommodate
a new F-208R water pot. Reuse all existing instrumentation associated
with the present external water boot. It will be reused for the new
connected boot.
2.3 Install new F-207 High Temperature Separator.
2.4 Install new water boot on F-210 Low Temperature Separator.
2.5 Re-rate F-203 Recycle Gas Compressor Dry Drum.
2.6 Install a new air cooler, C-214, Hot High Pressure Separator Vapor.
4
Exhibit D
Ancillary Equipment Site Lease
2.7 New foundations will be required for the new air cooler (C-214).
Minimal foundation work will be required for the modified reactor
effluent cold separator (F-208R).
2.8 Install D-201 Reactor (Relocated from GFU 243).
2.9 With the exception of electrical to the new air cooler C-214, the
electrical remains unchanged.
2.10 Existing instrumentation will be utilized.
5
Exhibit D
Ancillary Equipment Site Lease
C. GFU 243 DIESEL HYDROTREATER
1.0 Project Description
GFU 243 Diesel Hydrotreater will produce 37,000 BPSD of low sulfur
diesel. The unit will be treating a higher sulfur feedstock and the
existing reactor is too small to achieve acceptable space velocities. The
reactors are being replaced to achieve the higher space velocities which
improves catalyst life. Some of the piping in the reactor loop and amine
system is being replaced to reduce the pressure drop in those systems.
2.0 Scope of Work
2.1 Replace existing hydrotreating reactors with new reactors to
increase the space velocity through the reactor and thereby achieve
longer catalyst life.
2.2 Replace miscellaneous piping and equipment nozzles in the reactor
loop to reduce pressure drop in the system.
2.3 Replace the distributor in Product Stripper, E-303, to achieve
better steam stripping of the product diesel.
2.4 Install new amine regenerator cooler, C-309, to achieve better
cooling in the amine system.
2.5 Replace miscellaneous piping in the amine system to reduce pressure
drop.
6
Exhibit D
Ancillary Equipment Site Lease
D. NHT 1344 NAPHTHA HYDROTREATER MODIFICATIONS
1.0 Project Description
Naphtha Hydrotreater NHT 1344 is the hydrotreater for the reformer. The
unit processes 51,000 bpd of naphtha. Because the naphtha from the Maya
crude contains more sulfur than current feedstocks, modifications are being
made to treat the higher nitrogen and sulfur while achieving acceptable
catalyst life, improve the water wash capability, and reduce pressure drop
in the reactor loop.
2.0 Scope of Work
Modifications include:
2.1 Modify the reactor piping system such that the existing guard bed
reactor operates as a hydrotreating reactor in series with the
existing hydrotreating reactor.
2.2 Replace existing E-49 Reactor feed-effluent exchanger to reduce
pressure drop in the reactor loop.
2.3 Replace the P-36 water wash pumps with larger pumps.
7
Exhibit E
Ancillary Equipment Site Lease
AVU 146 Turnaround/Capital Maintenance
Turnaround Maintenance
1. Replace miscellaneous pipe details, remove dead legs, and install temporary
pump out piping.
2. Repair VOC leaks.
3. Renew flare grating on top four platforms
4. Replace flare tip/steam ring/pilots
5. Clean and/or renew tube bundles for the following exchangers: X-000,
X-000, X-000, X-000X, X-000, X-000, X-000X, and E-129B.
6. Perform miscellaneous repairs on furnaces: replace peep sight openings,
replace miscellaneous hanger supports, replace bent tubes, report door
sheet on air duct, and replace thermowells.
7. Install actuator on T-104.
8. Revise sample system for vacuum recycle on T-108 vacuum tower.
9. Repair P-122 A/B pump strainer.
10. Install nitrogen purge system.
11. Replace miscellaneous valves.
12. Replace miscellaneous pressure relief valves per PSV and Flare study.
13. Install pressure taps on T-101 Atmospheric Tower.
14. Tie vacuum off-gas into wet-gas system.
15. Pipe up cutting oil to pump discharge on P-122 A/B.
16. Clean cooling water system to remove deposits.
Capital Maintenance
1. Install new stripping trays in T-101 Atmospheric Tower
2. Install additional heavy distillate fuel/ago trays in T-101 Atmospheric
Tower
3. Upgrade the wash zone packing in T-108 Vacuum Tower from a Glitsch Grid to
structured packing.
Exhibit E
Ancillary Equipment Site Lease
GFU-242 Turnaround/Capital Maintenance
Turnaround Maintenance
1. Install new channel head and bundle in C-201 Stripper Reboiler, replace the
bundles in C-203-1 and C-203-2, retube No. 9 Seal Oil Cooler, and replace
No. 10 Seal Oil Cooler channel head.
2. Repair cooling tower as necessary-to be determined during shutdown.
Capital Maintenance
3. Lo-Nox Burners
4. Renew or repair F-408 Fuel Gas K.O. Drum
2
Exhibit E
Ancillary Equipment Site Lease
GFU 243 Turnaround/Capital Maintenance
Turnaround Maintenance
1. Change and repair Amine Regenerator tray damage, if needed.
2. Check and clean Cold High Pressure Separator and replace demister pad, if
needed.
3. Pull, clean, and test X-000 X/X, X-000 X/X, X-000, X-000 A/B exchangers;
retube C-305; externally clean all finned coolers. Repair or replace if
needed.
4. Check trays in E-303 Product Stripper and repair or replace as needed.
5. Check demister pad in F-302 Make-up Compressor Suction Drum and repair or
replace as needed.
6. Clean and replace demister pad in F-306 Low Pressure Hot Flash Drum, if
needed.
7. Clean and replace demister pad in F-307 Low Pressure Separator, if needed.
8. Clean and inspect F-308 Rich Amine Flash Drum and Low Pressure Contactor
and repair or replace as needed.
9. Check demister pad in F-314 Fuel Gas K.O. Drum, repair to renew or replace
as needed.
10. Check filter elements in F-333/333A Coalescers, replace if needed.
11. Check demister pad in F-305 Product Water Coalescer, replace or repair as
needed.
12. Inspect and miscellaneous mechanical and refractory repairs of furnace
13. Miscellaneous repairs on lube pumps and compressors
14. Clean, inspect, repair and reset all unit PSVs
15. Repair VOC leaks
16. Miscellaneous piping and other repairs.
Similar work was completed in early 1999.
3
Exhibit E
Ancillary Equipment Site Lease
CRU 1344 Turnaround/Capital Maintenance
Turnaround Maintenance
1. Pull, clean, and test the E-34 exchangers
2. Change catalyst in R-31 Reactor
3. Change feed filter
4. Replace miscellaneous valves around filter.
4
Exhibit F
Ancillary Equipment Site Lease
FORM OF ASSIGNMENT AND CONSENT AGREEMENT
CONSENT AND AGREEMENT, dated as of August 19, 1999, among XXXXX REFINING &
MARKETING, INC., a Delaware corporation ("Xxxxx R&M"), BANKERS TRUST COMPANY, a
New York banking corporation, as Collateral Trustee for the benefit of the
Secured Parties (as hereinafter defined) (in such capacity, together with its
successors and assigns, the "Collateral Trustee"), and PORT XXXXXX XXXXX COMPANY
L.P., a Delaware limited partnership (the "Partnership").
WHEREAS, the Partnership is constructing and will own and operate a new
delayed xxxxx facility and certain related refinery equipment, located at Xxxxx
R&M's refinery in Port Xxxxxx, Texas (the "Xxxxx Complex");
WHEREAS, Xxxxx R&M and the Partnership have entered into (i) the Services
and Supply Agreement (the "SSA"), (ii) the Product Purchase Agreement (the
"PPA"), (iii) the Xxxxx Complex Ground Lease and Blanket Easement Agreement (the
"Ground Lease"), (iv) the Ancillary Equipment Site Lease and Easement Agreement
(the "Site Lease") and (v) the Transfer and Assignment Agreement (the "Transfer
and Assignment"), each of which is dated as of August 19, 1999 (all five
agreements, as amended, supplemented or otherwise modified from time to time,
collectively, the "Agreements"), in connection with the construction and
operation of the Xxxxx Complex;
WHEREAS, in order to finance the construction and operation of the Xxxxx
Complex, the Partnership has entered into financing arrangements (as the same
may be amended, supplemented or otherwise modified, or extended or refinanced,
from time to time, the "Financing Arrangements") with the banks and other
financial institutions from time to time parties thereto (together with their
respective successors and assigns, the "Financing Parties");
WHEREAS, the Financing Arrangements provide, among other things, for the
making of the loans and other extensions of credit to the Partnership, the
proceeds of which are to be applied to finance the construction of the Xxxxx
Complex;
WHEREAS, the loans, bonds and other obligations of the Partnership incurred
in connection with the Financing Arrangements will be secured by substantially
all of the assets of the Partnership pursuant to a Common Security Agreement,
dated as of August, 19, 1999, entered into by the Partnership in favor of the
Collateral Trustee, pursuant to which the Partnership has assigned to the
Collateral Trustee for the benefit of the Secured Parties, as collateral
security for the Senior Debt Obligations, all of the Partnership's right, title
and interest in, to and under among other things the Agreements;
WHEREAS, it is a condition to the obligations of the Financing Parties
under the Financing Arrangements that Xxxxx R&M execute and deliver this
Consent;
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NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS.
(a) Defined Terms. The following terms shall have the meanings indicated:
"Agreements" has the meaning specified in the recitals to this
Consent.
"Xxxxx Complex" has the meaning specified in the recitals.
"Collateral Trustee" has the meaning specified in the caption of
this Consent.
"Common Security Agreement" means the Common Security Agreement,
dated as of August 19, 1999, among the Partnership, the Collateral
Trustee and the other parties named therein, as the same may be
amended, supplemented or otherwise modified from time to time.
"Consent" means this Consent and Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Xxxxx R&M" has the meaning specified in the caption of this
Consent.
"Default Notice" has the meaning specified in Section 5(a).
"Event of Default" means any of the events listed in Section 10.1
of the Common Security Agreement.
"Financing Arrangements" has the meaning specified in the
recitals to this Consent.
"Financing Documents" means the Common Security Agreement and any
other agreement or instrument entered into by the Partnership or any
other Person pursuant to the Financing Arrangements which secures,
evidences or governs payment or performance of any of the Senior Debt
Obligations.
"Financing Parties" has the meaning specified in the recitals to
this Consent.
"Ground Lease" has the meaning specified in the recitals to this
Consent.
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"Nominee" has the meaning specified in Section 5(b).
"Notice" has the meaning specified in Section 5(a).
"Partnership" has the meaning specified in the caption of this
Consent.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other legal entity of whatever
nature.
"Project Revenue Account" has the meaning specified in the Common
Security Agreement.
"PPA" has the meaning specified in the recitals to this Consent.
"Refinancing" means any financing transaction or debt offering
transaction, or series of such transactions, all or part of the
proceeds of which are used to repay the Senior Debt Obligations or
otherwise are used to provide financing for the Xxxxx Complex.
"Replacement Party" has the meaning specified in Section 5(c).
"Secured Parties" has the meaning specified in the Common
Security Agreement.
"Senior Debt Obligations" has the meaning specified in the Common
Security Agreement.
"Site Lease" has the meaning specified in the recitals to this
Consent.
"SSA" has the meaning specified in the recitals to this Consent.
"Transfer and Assignment" has the meaning specified in the
recitals to this Consent.
"Transferee" has the meaning specified in Section 5(b)(i).
(b) Other Definitional Provisions.
(i) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Consent shall refer to this Consent
as a whole and not to any particular provision of this Consent, and
section and subsection references are to this Consent unless otherwise
specified.
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(ii) Each reference in this Consent to an agreement, instrument
or document shall be deemed to refer to such agreement, instrument or
document as the same may be amended, supplemented or otherwise
modified from time to time.
(iii) Any term defined by reference to an agreement, instrument
or other document shall have the meaning so assigned to it whether or
not such agreement, instrument or document is in effect.
(iv) Each reference in this Consent to a Person shall be deemed
to include such Person's successors and assigns.
SECTION 2. CONSENTS TO ASSIGNMENTS, ETC.
Xxxxx R&M hereby:
(a) acknowledges that the Secured Parties are entering into the
Financing Arrangements in reliance upon the performance by Xxxxx R&M of its
obligations under the Agreements and this Consent, and irrevocably consents
to the assignment of the Agreements, pursuant to Section 12.5 of the SSA,
Section 9.11 of the PPA, Section 22.1 of the Ground Lease, Section 22.1 of
the Site Lease and Section 5.5 of the Transfer and Assignment, to the
Collateral Trustee for the benefit of the Secured Parties as collateral
security for the Senior Debt Obligations of all of Partnership's right,
title and interest, (whether now existing or hereafter arising) in, to and
arising under the Agreements;
(b) irrevocably consents, pursuant to Section 12.5 of the SSA,
Section 9.11 of the PPA, Section 22.1 of the Ground Lease and Section 22.1
of the Site Lease and Section 5.5 of the Transfer and Assignment, to any
subsequent assignment of any of the Agreements by the Collateral Trustee
pursuant to Section 5(b), upon and after receipt by Xxxxx R&M of written
notice from the Collateral Trustee that it desires to exercise its rights
and remedies as a secured party, or as trustee for the benefit of the
Secured Parties, in respect of the Senior Debt Obligations (but without any
right or obligation of Xxxxx R&M to know or confirm whether any such
subsequent assignment is permitted under the Financing Documents),
including the acquisition of all of the Partnership's existing and future
rights under the Agreements by sale, foreclosure or otherwise, or the
construction and/or operation of the Xxxxx Complex pending sale or
foreclosure through a receiver or otherwise, or the assignment of the
Agreements to any Person who is a Transferee; and Xxxxx R&M will, at the
request of any such Transferee, enter into a consent and agreement in
connection therewith having terms the same as the terms of this Consent,
except such terms as may be inapplicable;
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(c) confirms that the assignment of the Partnership's right, title
and interest in, to and arising under the Agreements pursuant to Section
6.06 of the Common Security Agreement is in accordance with all applicable
provisions of the Agreements;
(d) irrevocably agrees that the Collateral Trustee and the other
Secured Parties shall not be subject to any liability or obligation under
any of the Agreements nor shall the Collateral Trustee or any Secured Party
be obligated or required (A) to perform any of the Partnership's
obligations under any of the Agreements or (B) to take any action to
collect or enforce any claim for payment assigned to it under the Common
Security Agreement or otherwise;
(e) acknowledges the right of the Collateral Trustee and the other
Secured Parties to cure defaults by the Partnership under any of the
Agreements pursuant to the terms of this Consent (notwithstanding anything
to the contrary contained in such Agreement), without assuming or being
responsible for any of the obligations of the Partnership thereunder;
(f) acknowledges the right of the Collateral Trustee, following the
occurrence of an Event of Default under the Common Security Agreement, to
exercise its rights thereunder as a secured creditor and collateral
assignee of the Agreements to make all demands, give all notices, take all
actions and exercise all rights of the Partnership under the Agreements and
to enforce the Agreements against Xxxxx R&M, notwithstanding anything to
the contrary contained in any of the Agreements (but without any right or
obligation of Xxxxx R&M to know or confirm whether any such subsequent
assignment is permitted under the Financing Documents);
(g) acknowledges and irrevocably agrees, notwithstanding anything to
the contrary contained in any of the Agreements, but subject to the
provisions of this Consent, that none of the following shall constitute in
and of itself, as between Xxxxx R&M and the Collateral Trustee or any other
Secured Party, a default or breach by Partnership under any of the
Agreements:
(i) the collateral assignment of any of the Agreements to the
Collateral Trustee for the benefit of the Secured Parties;
(ii) the sale, foreclosure or other enforcement by the Collateral
Trustee or any other Secured Party of secured creditor remedies;
(iii) the acquisition of the rights of the Partnership under any
of the Agreements by the Collateral Trustee or any other Person as a result
of sale or foreclosure (or acceptance of an absolute assignment of the
Agreements in lieu of sale or foreclosure) or the exercise of other secured
creditor remedies; or
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(iv) the assignment of any of the Agreements by the Collateral
Trustee or any other Secured Party or a Nominee to any other Person,
following the acquisition of the Agreements by the Collateral Trustee or
any other Secured Party or Nominee in the exercise of rights and remedies
as a secured creditor (or in lieu of the exercise of such rights and
remedies); and
(h) irrevocably agrees at the request of the Partnership, to enter
into a consent and agreement in connection with a Refinancing having terms
the same as this Consent, except such terms as may be inapplicable or other
non-substantive change.
SECTION 3. PAYMENT OF ASSIGNED SUMS
Until notified in writing by the Collateral Trustee that the Senior Debt
Obligations have been paid in full, Xxxxx R&M shall pay by wire transfer in U.S.
dollars of same day funds directly to the Project Revenue Account or as
otherwise instructed in writing by the Collateral Trustee any and all amounts,
if any, payable by Xxxxx R&M to the Partnership under the Agreements or as a
result of a breach thereof. The making of such payment into the Project Revenue
Account, and the currency of such payment are of the essence of this Consent.
All amounts paid to the Collateral Trustee shall be accompanied by a notice
specifying the amount of such payment and the purpose for which such payment is
being made. After Xxxxx R&M has been notified in writing by the Collateral
Trustee that the Senior Debt Obligations have been paid in full, Xxxxx R&M shall
pay such amounts directly to Partnership.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF XXXXX R&M
Xxxxx R&M hereby represents and warrants that:
(a) Organization. It is a corporation duly organized and existing
under the laws of Delaware and has the legal capacity to enter into and
perform this Consent.
(b) Government Authorizations. It has obtained all necessary
authorizations from the competent governmental authorities for the
execution of this Consent and the performance of its obligations hereunder.
(c) Corporate Authority. The execution and performance by Xxxxx R&M
of this Consent has been duly authorized by all necessary corporate action.
This Consent has been duly executed by Xxxxx R&M and, assuming the due
authorization and execution of this Consent by the Partnership and the
Collateral Trustee, constitutes the legal, valid and binding obligation of
Xxxxx R&M, enforceable against Xxxxx R&M in accordance with its terms.
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(d) No Conflict. Neither the execution of this Consent by Xxxxx R&M
nor the performance by Xxxxx R&M of its obligations hereunder will conflict
with or result in any breach of, or constitute a violation of or default
under, any applicable law or regulation, Xxxxx R&M's charter or by-laws, or
any indenture, mortgage, deed of trust, or other instrument or agreement
(including, without limitation, any negative pledge or similar clause), to
which Xxxxx R&M or any of its affiliates is a party, or by which any of
them may be bound, or to which any of their respective property or assets
may be subject.
(e) No Litigation. No lawsuit or other proceeding is pending or, to
the knowledge of Xxxxx R&M, threatened against Xxxxx R&M which, if
determined adversely to Xxxxx R&M, may materially and adversely affect its
business or financial condition or the consummation of the transactions
contemplated by, or the performance of its obligations under, this Consent
or any of the Agreements. No action or proceeding has been instituted and
no order, decree, injunction or judgment of any kind from any court or
other governmental authority has been issued to avoid, restrain or in any
other manner prevent the consummation of the transactions contemplated by
this Consent or any of the Agreements.
(f) Enforcement. The Agreements and this Consent are in proper legal
form to be enforced against Xxxxx R&M, and it is not necessary to ensure
the legality, validity, enforceability or admissibility into evidence of
the Agreements or this Consent that they be filed, recorded or enrolled
with any governmental authority, or that any such document be stamped with
any stamp, registration or similar transaction tax.
(g) Execution, Delivery; Binding Agreements. The Agreements are in
full force and effect and none of the Agreements have been assigned by
Xxxxx R&M. Except for the assignments referred to in Section 2(a) hereof,
Xxxxx R&M has not received any notice of transfer or assignment of any of
the Agreements by the Partnership.
(h) No Default or Amendment. Neither Xxxxx R&M nor, to its knowledge,
the Partnership is in default under any of the Agreements. Xxxxx R&M has no
existing claims, counterclaims, offsets or defenses against the Partnership
in respect of any of the Agreements. None of the Agreements have been
amended, modified or supplemented in any manner.
SECTION 5. RIGHTS OF COLLATERAL TRUSTEE
Xxxxx R&M agrees that the Collateral Trustee, for the benefit of the
Secured Parties, so long as any Senior Debt Obligations remain outstanding,
shall have the following rights with respect to the Agreements:
(a) Notwithstanding anything to the contrary contained in any of the
Agreements, none of the Agreements shall be terminated or canceled by
action of Xxxxx R&M as the
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result of any breach or default of the Partnership without prior notice in
writing to the Collateral Trustee, specifying the basis therefor
(hereinafter called a "Notice"). In the event of a default by Partnership
under any of the Agreements, Xxxxx R&M (i) will give prompt written notice
to the Collateral Trustee (a "Default Notice") of such default and any cure
period pursuant to such Agreement (the "Partnership's Cure Period"), (ii)
will allow the Collateral Trustee and the other Secured Parties to cure
such default during the Partnership's Cure Period (whether or not the
Partnership or any equity investor in the Partnership also has the right to
cure such default during such period) and (iii) prior to the exercise by
Xxxxx R&M of any right to terminate such Agreement, will afford the
Collateral Trustee and the other Secured Parties the longer of (A) 120 days
after the receipt by the Collateral Trustee of the Default Notice and (B)
60 days after the expiration of the Partnership's Cure Period (the "Secured
Parties' Cure Period") to cure such default, provided that the Secured
Parties' Cure Period shall be extended for such longer period of time as is
necessary as long as the Collateral Trustee or any other Secured Party
shall be diligently acting in good faith to cure such default or to obtain
title to the Xxxxx Complex; and provided, further, that notwithstanding the
foregoing, in no event shall the Secured Parties' Cure Period with respect
to a payment default by the Partnership exceed 90 days after the Default
Notice from Xxxxx R&M. No curing of any defaults under such Agreement shall
be construed as an assumption by the Collateral Trustee or the Secured
Party of any of the obligations, covenants or agreements of the Partnership
under such Agreement.
(b) If the Collateral Trustee or any other Secured Party, or a
Nominee (as defined below), shall become the legal or beneficial owner of
the Xxxxx Complex, or shall become entitled to cause the disposition of the
Xxxxx Complex pursuant to the exercise of its rights and remedies as a
secured creditor, then:
(i) Such Person, at its election, may continue the Agreements by
delivering to Xxxxx R&M a written notice of continuation. Such Person may
thereafter cause the Partnership's interest in the Agreements to be
transferred to itself or to a third party by delivering to Xxxxx R&M a
written notice of such transfer and an agreement from such Person or such
third party satisfying the conditions of Section 5(b)(ii) hereof (such
Person or such third party, as the case may be, being herein called a
"Transferee"), and in the event of any transfer and any successive
transfers thereafter, (A) Xxxxx R&M will continue to perform, for the
benefit of such Transferee, its obligations under the Agreements pursuant
to its terms as modified hereby, without regard to any default by the
Partnership thereunder, (B) the Partnership shall remain liable to Xxxxx
R&M for all its obligations and duties under the Agreements, and (C) any
Transferee shall become liable, not personally but solely to the extent of
its direct or indirect right, title and interest in and to the Xxxxx
Complex and the operating contracts relating thereto, to perform the duties
and obligations of the Partnership under the Agreements only as arise in
respect of the period commencing on the date of such Transferee's
succession. Only the Transferee, and
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not the Person delivering a notice of continuation, shall have liabilities
and obligations under the Agreements.
(ii) Any agreement delivered pursuant to the second sentence of
subparagraph (i) of this Section 5(b) shall provide that the Transferee
shall (A) assume and agree to perform all future obligations of the
Partnership under the Agreements and agree to be bound by the terms of the
Agreements in connection therewith and (B) be bound by all actions taken
and notices given by the parties under the Agreements prior to any such
transfer.
(iii) As used in this Section 5, "Nominee" shall mean (A) any
Person or entity that is directly or indirectly owned and controlled by the
Collateral Trustee, the Collateral Trustee or any other Secured Party and
(B) which has acquired the Partnership's right, title and interest in the
Xxxxx Complex.
(c) If (i) the Partnership or a trustee or receiver or any Person
exercising the powers of a trustee or receiver in any bankruptcy,
insolvency, receivership, arrangement, liquidation or similar proceeding
applicable to the Partnership rejects any of the Agreements, or (ii) any of
the Agreements is terminated (x) by reason of any bankruptcy, insolvency,
receivership, arrangement, liquidation or similar proceeding applicable to
the Partnership or (y) by reason of any default by the Partnership under
such Agreement, and if, in any such case, within 90 days after such
termination, the Collateral Trustee shall so request, Xxxxx R&M will
execute and deliver to the Collateral Trustee, one or more of the Secured
Parties, a Nominee or a Transferee, as shall be designated by the
Collateral Trustee (herein called the "Replacement Party"), a new contract
with the Replacement Party. The new contract shall contain substantially
the same terms and provisions as such Agreement for the balance of the
unexpired term thereof.
(d) If the Collateral Trustee, for the benefit of the Secured
Parties, or any Replacement Party is prohibited from curing any default by
the Partnership under any of the Agreements by any process, stay or
injunctions issued by any governmental authority or pursuant to any
bankruptcy or insolvency proceeding involving the Partnership, then the
Secured Parties' Cure Period shall be extended for the period of such
prohibition.
SECTION 6. AGREEMENTS OF XXXXX R&M
(a) Continuation of Performance. Xxxxx R&M agrees to continue the
performance of its obligations under each of the Agreements notwithstanding
any default by the Partnership under any Financing Document, or the
exercise by any Person of its rights under any Financing Document.
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(b) No Set-Offs, Deductions or Counterclaim. Xxxxx R&M agrees that no
amounts due to the Partnership under any of the Agreements shall be subject
to any reduction for any set-off, deduction, counterclaim or otherwise
based upon any claim against the Partnership. Xxxxx R&M shall not assert
any claim it may have by reason of the Partnership's default under any of
the Agreements as a defense to performance of its obligations under any
other agreement with the Partnership or any affiliate of the Partnership or
under this Consent. Nothing contained in this paragraph (c) shall waive
Xxxxx R&M's rights to enforce any such claim as a cause of action against
the Partnership.
(c) Compliance with Instructions from Collateral Trustee. Xxxxx R&M
hereby agrees that it shall (i) comply with any and all written
instructions received from the Collateral Trustee pursuant to the Financing
Documents, (ii) treat such instructions as coming directly from the
Partnership, (iii) disregard any contradictory instructions received from
the Partnership and (iv) with effect as of the date of receipt of such
instructions, direct to the Collateral Trustee (with a copy to the
Partnership) all communications and correspondence arising out of or in
connection with any of the Agreements.
(d) Notices. All notices or other communications to be delivered to
the Collateral Trustee or any of the other Secured Parties pursuant to this
Consent or any of the Agreements shall be delivered to the Collateral
Trustee at the address specified in Section 8 below and, in the case of
Xxxxx R&M or the Partnership, to each of these respective entities at the
addresses specified in Section 8 below.
(e) Amendments of Agreements, Etc. Xxxxx R&M will not agree to any
amendment, cancellation or early termination of any of the Agreements, and
will not assign its rights or obligations under any of the Agreements to a
third party, without the prior written consent of the Collateral Trustee.
(f) Reservation of Rights. Xxxxx R&M expressly reserves all rights
and remedies available at law or in equity under the Agreements, except to
the extent expressly modified in this Consent.
(g) Copies of Notices to Partnership. Xxxxx R&M will deliver to the
Collateral Trustee a copy of each notice given by it to the Partnership
concurrently with delivery of such notice to the Partnership.
SECTION 7. FURTHER ASSURANCES
The parties hereto hereby agree to provide to each other such
documents and to take such other action as may be reasonably necessary to
effectuate fully the purposes of this Consent.
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SECTION 8. NOTICES
All notices and other communication under or in connection with this
Consent shall be in writing, shall refer on their face to the applicable
Agreement(s) (although failure to so refer shall not render any such notice or
communication ineffective), shall be sent by first class registered or certified
mail, by facsimile, by hand or by overnight courier service and shall be
addressed:
(i) if to Xxxxx R&M, in accordance with the Agreements;
(ii) if to the Collateral Trustee, to
Bankers Trust Company
Corporate Trust & Agency Services
Four Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 10006
Attention: Xxxxx XxXxxxxxx
(iii) if to the Partnership, in accordance with the Agreements; or
(iv) to such other address as Xxxxx R&M, the Partnership or the
Collateral Trustee, as the case may be, may designated by prior written
notice to the other parties given pursuant hereto.
SECTION 9. MISCELLANEOUS
(a) Separate Counterparts; Amendments, Waiver. This Consent may be
executed in separate counterparts, each of which when so executed and delivered
shall be an original but all of such counterparts together shall constitute one
and the same instrument. Neither this Consent nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified except by an instrument in
writing signed by Xxxxx R&M, the Collateral Trustee and the Partnership.
(b) Severability. Any provision of this Consent which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
(c) Successors and Assigns. This Consent shall be binding upon and
inure to the benefit of Xxxxx R&M, the Collateral Trustee, the other Secured
Parties, the Partnership and their respective successors and permitted assigns.
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(d) GOVERNING LAW. THIS CONSENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(e) Submission to Jurisdiction. Xxxxx R&M hereby irrevocably and
unconditionally: (i) submits for itself and its property in any legal action or
proceeding relating to this Consent, or for recognition and enforcement of any
judgment in respect thereof or the enforcement of an award rendered pursuant to
Section 11.6 of the SSA and Section 9.7 of the PPA, to the non-exclusive general
jurisdiction of the courts of the State of New York located in the Borough of
Manhattan, City of New York and the Federal courts of the U.S. for the Southern
District of New York located in the Borough of Manhattan, City of New York; and,
(ii) notwithstanding anything to the contrary contained in the Agreements,
consents that any action or proceeding in connection with the Agreements may be
brought by the Collateral Trustee and the Financing Parties in such courts and
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim the same.
(f) Enforcement of Judgments. Xxxxx R&M agrees that a final judgment
against it in any action, suit or proceeding brought in any New York State or
Federal court in accordance with paragraph (e) above shall be conclusive and may
be enforced in any jurisdiction by suit on the judgment, a certified copy of
which judgment shall be conclusive evidence thereof, or by any other means
provided by law.
(g) No Implied Waiver. Failure or delay on the part of any party
hereto to exercise a right under this Consent shall not operate as a waiver
thereof; nor shall any single or partial exercise of a right preclude any other
future exercise thereof.
(h) Agent for Service of Process. Xxxxx R&M hereby irrevocably and
unconditionally appoints CT Corporation, with an office on the date hereof at
0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its agent, which shall
be a commercial process agent (the "Process Administrative Agent") to receive on
behalf of Xxxxx R&M and its property service of copies of the summons and
complaint and any other process which may be served in any such action or
proceeding in such New York State or Federal court. In any such action or
proceeding, such service may be made on Xxxxx R&M by delivering a copy of such
process to Xxxxx R&M in care of the Process Administrative Agent at the Process
Administrative Agent's above address and by depositing a copy of such process in
the mails by certified or registered air mail, addressed to Xxxxx R&M at its
address set forth beneath its signature hereto (such service to be effective
upon such receipt by the Process Administrative Agent and the depositing of such
process in the mails as aforesaid). Xxxxx R&M hereby further irrevocably and
unconditionally authorizes and directs such Process Administrative Agent to
accept such service on its behalf. If for any reason the Process Administrative
Agent shall cease to be
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available to act as such, Xxxxx R&M agrees to designate a new agent in New York
City on the terms and for the purposes of this provision satisfactory to the
Collateral Trustee. As an alternate method of service, Xxxxx R&M irrevocably and
unconditionally consents to the service of any and all process in any such
action or proceeding in such New York State or Federal court by mailing of
copies of such process to Xxxxx R&M by certified or registered air mail at its
address set forth in the Agreements, such service to become effective 30 days
after such mailing. Nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction. Xxxxx R&M hereby agrees that, to the fullest extent
permitted by applicable law, a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
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XXXXX REFINING & MARKETING, INC.
By: ____________________________________
Name:
Title:
Acknowledged and agreed:
BANKERS TRUST COMPANY, as Collateral
Trustee for the benefit of the Secured
Parties
By: _________________________________
Name:
Title:
PORT XXXXXX XXXXX COMPANY L.P.
By: SABINE RIVER HOLDING CORP.,
as General Partner
By: _____________________________
Name:
Title:
Exhibit G
Ancillary Equipment Site Lease
FORM OF MEMORANDUM OF LEASE
MEMORANDUM OF ANCILLARY EQUIPMENT SITE LEASE
AND EASEMENT AGREEMENT
----------------------
THE STATE OF TEXAS )
) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF JEFFERSON )
THAT, XXXXX REFINING & MARKETING, INC., a Delaware corporation ("Lessor"),
and PORT XXXXXX XXXXX COMPANY L.P., a Delaware limited partnership ("Lessee"),
have made and entered into that certain Ancillary Equipment Site Lease and
Easement Agreement dated effective as of August 19, 1999 (the "Ancillary
Equipment Site Lease") with respect to the tracts of land described on Exhibit A
attached hereto and made a part hereof for all purposes (collectively, the
"Ancillary Equipment Site").
1 Defined Terms. All defined terms used in this Memorandum shall have
the respective meanings provided for such defined terms in the Ancillary
Equipment Site Lease.
2 Lease. On and subject to the terms, provisions and conditions of the
Ancillary Equipment Site Lease, Lessor has leased, let, demised and rented the
Ancillary Equipment Site and the Ancillary Equipment to Lessee, and Lessee has
leased and accepted the Ancillary Equipment Site and the Ancillary Equipment
from Lessor, for an initial lease term (the "Ancillary Equipment Site Initial
Term") commencing on the date hereof and ending on August 19, 2029.
3 Options to Renew. The Ancillary Equipment Site Lease provides that, on
and subject to the terms, provisions and conditions set forth therein, Lessee
shall have the right and option to extend the Ancillary Equipment Site Initial
Term for up to five (5) additional terms of five (5) years each (each, an
"Ancillary Equipment Site Renewal Term").
4 Appurtenant Easement. The grant by Lessor to Lessee under the Ancillary
Equipment Site Lease includes a nonexclusive easement, appurtenant to the
Ancillary Equipment Site Leasehold and for the Ancillary Equipment Site Lease
Term, on, over and under the Adjacent Refinery Property, as more particularly
described in Exhibit B attached hereto and made a part hereof for all purposes,
for the purpose of ingress and egress to and from the Ancillary Equipment Site,
for the location and maintenance of the Ancillary Equipment (including, without
limitation, all interconnection pipes, wiring, other pipelines and communication
and utility lines), and for any other purpose as may be necessary or desirable
in connection with the maintenance and operation of the Ancillary Equipment, or
the operation of the Heavy Oil Processing Facility.
2
5 Controlling Document. This Memorandum has been executed by Lessor and
Lessee pursuant to the provisions of the Ancillary Equipment Site Lease, for
recordation in the Official Public Records of Real Property of Jefferson County,
Texas, and it is the intent of this Memorandum to give record notice that Lessor
and Lessee have entered into the Ancillary Equipment Site Lease for the
Ancillary Equipment Site and the Ancillary Equipment. It is not the purpose of
this Memorandum to amend, modify, eliminate, or add to the provisions of such
Ancillary Equipment Site Lease. In the event and to the extent of any conflict
between the terms of this Memorandum and the terms of the Ancillary Equipment
Site Lease, the terms of the Ancillary Equipment Site Lease shall supersede and
control.
6 Successors and Assigns. The rights and obligations of the parties to the
Ancillary Equipment Site Lease shall be binding upon, and shall inure to the
benefit of, the respective permitted successors and assigns of the parties (but
without affecting any restrictions on assignment and subletting set forth in the
Ancillary Equipment Site Lease).
IN WITNESS WHEREOF, Lessor and Lessee have executed this Memorandum of
Ancillary Equipment Site Lease and Easement Agreement to be effective as of the
date first set forth above.
LESSEE: LESSOR:
PORT XXXXXX XXXXX COMPANY L.P., a XXXXX REFINING & MARKETING, INC., a
Delaware limited partnership Delaware corporation
By: Sabine River Holding Corp., a
Delaware corporation, its sole By:
general partner Name:
Title:
By:
Name:
Title:
3
STATE OF )
)
COUNTY OF )
This instrument was acknowledged before me on August __, 1999, by
____________________________________________, the _________________________ of
XXXXX REFINING & MARKETING, INC., a Delaware corporation, on behalf of said
corporation.
Notary Public, State of
STATE OF )
)
COUNTY OF )
This instrument was acknowledged before me on August __, 1999, by
________________________________, the ___________________________ of Sabine
River Holding Corp., a Delaware corporation and the sole general partner of PORT
XXXXXX XXXXX COMPANY L.P., a Delaware limited partnership, on behalf of said
limited partnership.
Notary Public, State of
List of Exhibits:
Exhibit A - Description of the Ancillary Equipment Site
Exhibit B - Description of the Adjacent Refinery Property
Exhibit H
Ancillary Equipment Site Lease
ANCILLARY EQUIPMENT OPERATING FEE CALCULATION
The Xxxxx Company shall pay Xxxxx R&M for the processing of crude oil through
the Ancillary Equipment each day according to the following formula:
Crude Unit Fee + GFU 243 Fee + GFU 242 Fee + CRU 1344
Hydrotreater Fee
Where:
1. Crude Unit Fee Definitions
--------------------------
"Crude Unit Fee" means, for any day, the sum of
(i) Crude Unit Fixed, (ii) Crude Unit Non-Fuel Variable,
(iii) Crude Unit Fuel Variable and (iv) Crude Unit
Electricity Variable.
"Crude Unit Fixed" means, for any day, (i)
250,000, multiplied by (ii) $0.148, multiplied by (iii)
the Inflation Factor for such day.
"Crude Unit Non-Fuel Variable" means, for any
day, (i) Total Crude Oil Volume for such day, multiplied
by (ii) $0.005, multiplied by (iv) the Inflation Factor
for such day.
"Crude Unit Fuel Variable" means, for any day,
(i) Total Crude Oil Volume for such day, multiplied by
(ii) $0.239, multiplied by (iii) (x) the Current Period
Fuel, divided by (y) $2.24 Price.
"Crude Unit Electricity Variable" means, for any
day, (i) Total Crude Oil Volume for such day, multiplied
by (ii) $0.016, multiplied by (iii) (x) the Current
Period Electricity Price, divided by (y) $0.029.
2. GFU 243 Fee Definitions
-----------------------
"GFU 243 Fee" means, for any day, the sum of (i)
XXX 000 Xxxxx, (xx) GFU 243 Non-Fuel Variable, (iii) GFU
243 Fuel Variable and (iv) GFU 243 Electricity Variable.
2
"GFU 243 Fixed" means, for any day, (i) 43,000,
multiplied by (ii) $0.238, multiplied by (iii) the
Inflation Factor for such day.
"GFU 243 Non-Fuel Variable" means, for any day,
(i) total number of barrels of feedstreams processed
through GFU 243 on such day, multiplied by (ii) $0.094,
multiplied by (iii) the Inflation Factor for such day.
"GFU 243 Fuel Variable" means, for any day, (i)
total number of barrels of feedstreams processed through
GFU 243 on such day, multiplied by (ii) $0.330,
multiplied by (iii) (x) the Current Period Fuel Price,
divided by (y) $2.24.
"GFU 243 Electricity Variable" means, for any
day, (i) total number of barrels of feedstreams processed
through GFU 243 on such day, multiplied by (ii) 0.042,
multiplied by (iii) (x) the Current Period Electricity
Price, divided by (y) $0.029.
3. GFU 242 Fee Definitions
-----------------------
"GFU 242 Fee" means, for any day, the sum of
(i) XXX 000 Xxxxx, (xx) GFU 242 Non-Fuel Variable, (iii)
GFU 242 Fuel Variable and (iv) GFU 242 Electricity
Variable.
"GFU 242 Fixed" means, for any day, (i) 32,000,
multiplied by (ii) $0.221, multiplied by (iii) the
Inflation Factor for such day.
"GFU 242 Non-Fuel Variable" means, for any day,
(i) total number of barrels of feedstreams processed
through GFU 242 on such day, multiplied by (ii) $0.017,
multiplied by (iii) the Inflation Factor for such day.
"GFU 242 Fuel Variable" means, for any day, (i)
total number of barrels of feedstreams processed through
GFU 242 on such day, multiplied by (ii) $ 0.342,
multiplied by (iii) (x) the Current Period Fuel Price,
divided by (y) $2.24.
"GFU 242 Electricity Variable" means, for any
day, (i) total number of barrels of feedstreams processed
through GFU 242 on such day, multiplied by (ii) $0.014,
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multiplied by (iii) (x) the Current Period Electricity
Price, divided by (y) $0.029.
4. CRU 1344 Hydrotreater Fee Definitions
-------------------------------------
"CRU 1344 Hydrotreater Fee" means, for any day,
the sum of (i) CRU 1344 Hydrotreater Fixed, (ii) CRU 1344
Hydrotreater Non-Fuel Variable, (iii) CRU 1344
Hydrotreater Fuel Variable and (iv) CRU 1344 Hydrotreater
Electricity Variable.
"CRU 1344 Hydrotreater Fixed" means, for any
day, (i) 51,500, multiplied by (ii) $0.139, multiplied by
(iii) the Inflation Factor for such day.
"CRU 1344 Hydrotreater Non-Fuel Variable" means,
for any day, (i) the number of barrels of feedstreams
processed through CRU 1344 Hydrotreater on such day,
multiplied by, (ii) $0.020, multiplied by (iii) the
Inflation Factor for such day.
"CRU 1344 Hydrotreater Fuel Variable" means, for
any day, (i) the number of barrels of feedstreams
processed through CRU 1344 Hydrotreater on such day,
multiplied by (ii) $0.159, multiplied by (iii) (x) the
Current Period Fuel Price, divided by (y) $2.24.
"CRU 1344 Hydrotreater Electricity Variable"
means, for any day, the number of barrels of feedstreams
processed through CRU 1344 Hydrotreater on such day,
multiplied by (ii) $0.012, multiplied by (iii) (x) the
Current Period Electricity Price, divided by (y) $0.029.
5. General Definitions
-------------------
"Current Period Fuel Price" means, for any day,
the MMBTU Price (as defined in Schedule 5.5.3) for month
in which such day occurs.
"Current Period Electricity Price" means, for
any day, the KWH Price (as defined in Schedule 5.5.1) for
the month in which such day occurs.
