8-K
HOLLY ENERGY PARTNERS LP false 0001283140 0001283140 2019-10-02 2019-10-02

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 3, 2019 (October 2, 2019)

 

HOLLY ENERGY PARTNERS, L.P.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-32225

 

20-0833098

(State of

Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification Number)

2828 N. Harwood, Suite 1300, Dallas, Texas 75201

(Address of Principal Executive Offices)

(214) 871-3555

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to 12(b) of the Securities Exchange Act of 1934:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Limited Partner Units

 

HEP

 

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


Item 1.01 Entry into a Material Definitive Agreement

Background

On October 2, 2019, HEP Cushing LLC (“HEP Cushing”), a wholly-owned subsidiary of Holly Energy Partners, L.P. (“HEP”), and Plains Marketing, L.P. (“PMLP”), a wholly-owned subsidiary of Plains All American Pipeline, L.P. (“Plains”), formed a 50/50 joint venture, Cushing Connect Pipeline & Terminal LLC (the “Joint Venture”), for (i) the development and construction of a new 160,000 barrel per day common carrier crude oil pipeline (the “Cushing Connect Pipeline”) that will connect the Cushing, Oklahoma crude oil hub to the Tulsa, Oklahoma refining complex owned by HollyFrontier Tulsa Refining LLC (“HFTR”), a wholly-owned subsidiary of HollyFrontier Corporation (“HollyFrontier”) and (ii) the ownership and operation of 1.5 million barrels of crude oil storage in Cushing, Oklahoma.

Sixth Amended and Restated Master Throughput Agreement

On October 2, 2019, Holly Energy Partners – Operating, L.P. (“HEP Operating”), a wholly-owned subsidiary of HEP, and HollyFrontier Refining & Marketing LLC (“HFRM”), a wholly-owned subsidiary of HollyFrontier, entered into the Sixth Amended and Restated Master Throughput Agreement (the “Sixth Amended and Restated Master Throughput Agreement”). The Sixth Amended and Restated Master Throughput Agreement amends and restates in its entirety the Fifth Amended and Restated Master Throughput Agreement, dated effective July 1, 2019. Pursuant to the Sixth Amended and Restated Master Throughput Agreement, among other things, HFRM agreed to (a) minimum throughput commitments on the Cushing Connect Pipeline and (b) pay HEP Operating tariffs associated with product movements on the Cushing Connect Pipeline. The tariffs are subject to adjustment as provided in the Sixth Amended and Restated Master Throughput Agreement. The arrangement with respect to the Cushing Connect Pipeline has an initial term, which will commence on the date on which, in the reasonable opinion of HEP Operating, the Cushing Connect Pipeline and the applicable connections are available for service and will conclude in March 2036, unless earlier terminated. The arrangement with respect to the Cushing Connect Pipeline will automatically renew for successive two year terms, unless terminated prior to the next successive term. HollyFrontier will guarantee the obligations of HFRM under the arrangement, and HEP will guarantee the obligations of HEP Operating.

The description of the Sixth Amended and Restated Master Throughput Agreement herein is qualified by reference to the copy thereof filed as Exhibit 10.1 to this report, which is incorporated by reference into this report in its entirety.

Twentieth Amended and Restated Omnibus Agreement

On October 2, 2019, HollyFrontier, HEP and certain of their respective subsidiaries entered into the Twentieth Amended and Restated Omnibus Agreement (the “Twentieth Amended and Restated Omnibus Agreement”). The Twentieth Amended and Restated Omnibus Agreement amends and restates in its entirety the Nineteenth Amended and Restated Omnibus Agreement, dated effective June 1, 2018, to, among other things, add HEP Cushing as a party and subject the equity interests of HEP Cushing in the Joint Venture to HollyFrontier’s right of first refusal, subject to the limitations provided therein, including any rights of Plains arising under the operating agreement of the Joint Venture.

The description of the Twentieth Amended and Restated Omnibus Agreement herein is qualified by reference to the copy thereof filed as Exhibit 10.2 to this report, which is incorporated by reference into this report in its entirety.

Item 7.01. Regulation FD Disclosure.

On October 2, 2019, HEP and Plains issued a joint press release announcing the Joint Venture. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein in its entirety.

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The information contained in, or incorporated into, this Item 7.01 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference to such filing.

Item 9.01 Financial Statements and Exhibits.

(d)    Exhibits.

Exhibit
No.

   

Description

         
 

10.1

   

Sixth Amended and Restated Master Throughput Agreement, dated as of October 2, 2019, by and between HollyFrontier Refining & Marketing LLC and Holly Energy Partners – Operating, L.P.

         
 

10.2

   

Twentieth Amended and Restated Omnibus Agreement, dated as of October 2, 2019, by and between HollyFrontier Corporation, Holly Energy Partners, L.P. and certain of their respective subsidiaries

         
 

99.1

   

Joint Press Release dated October 2, 2019

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document)

2


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HOLLY ENERGY PARTNERS, L.P.

     

By:

 

HEP LOGISTICS HOLDINGS, L.P.

its General Partner

     

By:

 

HOLLY LOGISTIC SERVICES, L.L.C.

its General Partner

     

By:

 

/s/ Richard L. Voliva III

Name:

 

Richard L. Voliva III

Title:

 

Executive Vice President and Chief Financial Officer

Date:    October 3, 2019

3

EX-10.1

Exhibit 10.1

SIXTH AMENDED AND RESTATED

MASTER THROUGHPUT AGREEMENT

(including Tankage and Loading Racks)

by and between

HOLLYFRONTIER REFINING & MARKETING LLC

and

HOLLY ENERGY PARTNERS-OPERATING, L.P.

Effective as of October 2, 2019


TABLE OF CONTENTS

 

ARTICLE 1 DEFINITIONS AND INTERPRETATIONS

     2  

1.1

 

DEFINITIONS

     2  

1.2

 

INTERPRETATION

     2  

ARTICLE 2 AGREEMENT TO USE SERVICES

     2  

2.1

 

INTENT

     2  

2.2

 

MINIMUM REVENUE COMMITMENTS

     2  

2.3

 

MEASUREMENT OF SHIPPED VOLUMES

     3  

2.4

 

VOLUMETRIC GAINS AND LOSSES; LINE FILL; HIGH-API OIL SURCHARGE

     4  

2.5

 

OBLIGATIONS OF HEP OPERATING

     4  

2.6

 

DRAG REDUCING AGENTS AND ADDITIVES

     4  

2.7

 

CHANGE IN THE DIRECTION; PRODUCT SERVICE OR ORIGINATION AND DESTINATION OF THE PIPELINE SYSTEM

     4  

2.8

 

NOTIFICATION OF UTILIZATION

     5  

2.9

 

SCHEDULING AND ACCEPTING MOVEMENT

     5  

2.10

 

TAXES

     5  

2.11

 

TIMING OF PAYMENTS

     5  

2.12

 

INCREASES IN TARIFF RATES

     5  

2.13

 

REMOVAL OF TANK FROM SERVICE

     6  

2.14

  NO GUARANTEED MINIMUM      6  

ARTICLE 3 AGREEMENT TO REMAIN SHIPPER

     6  

ARTICLE 4 NOTIFICATION OF REFINERY SHUT-DOWN OR RECONFIGURATION

     6  

ARTICLE 5 FORCE MAJEURE

     7  

ARTICLE 6 AGREEMENT NOT TO CHALLENGE PIPELINE TARIFFS

     7  

ARTICLE 7 EFFECTIVENESS AND TERM

     7  

ARTICLE 8 RIGHT TO ENTER INTO A NEW AGREEMENT

     8  

8.1

 

NEGOTIATION PURSUANT TO WRITTEN NOTICE

     8  

8.2

 

NEGOTIATION IN THE ABSENCE OF WRITTEN NOTICE

     8  

ARTICLE 9 NOTICES

     9  

ARTICLE 10 DEFICIENCY PAYMENTS

     9  

10.1

 

DEFICIENCY NOTICE; DEFICIENCY PAYMENTS

     9  

10.2

 

DISPUTED DEFICIENCY NOTICES

     9  

10.3

 

PAYMENT OF AMOUNTS NO LONGER DISPUTED

     9  

10.4

 

CONTRACT QUARTERS INDEPENDENT

     9  

ARTICLE 11 RIGHT OF FIRST REFUSAL

     10  

ARTICLE 12 INDEMNITY; LIMITATION OF DAMAGES

     10  

12.1

 

INDEMNITY; LIMITATION OF LIABILITY

     10  

12.2

 

SURVIVAL

     10  

ARTICLE 13 MISCELLANEOUS

     10  

13.1

 

AMENDMENTS AND WAIVERS

     10  

 

i


13.2

 

SUCCESSORS AND ASSIGNS

     11  

13.3

 

SEVERABILITY

     11  

13.4

 

CHOICE OF LAW

     11  

13.5

 

RIGHTS OF LIMITED PARTNERS

     11  

13.6

 

FURTHER ASSURANCES

     11  

13.7

 

HEADINGS

     12  

ARTICLE 14 GUARANTEE BY HOLLYFRONTIER

     12  

14.1

 

PAYMENT GUARANTY

     12  

14.2

 

GUARANTY ABSOLUTE

     12  

14.3

 

WAIVER

     13  

14.4

 

SUBROGATION WAIVER

     13  

14.5

 

REINSTATEMENT

     13  

14.6

 

CONTINUING GUARANTY

     13  

14.7

 

NO DUTY TO PURSUE OTHERS

     13  

ARTICLE 15 GUARANTEE BY THE PARTNERSHIP

     13  

15.1

 

PAYMENT AND PERFORMANCE GUARANTY

     13  

15.2

 

GUARANTY ABSOLUTE

     14  

15.3

 

WAIVER

     14  

15.4

 

SUBROGATION WAIVER

     14  

15.5

 

REINSTATEMENT

     15  

15.6

 

CONTINUING GUARANTY

     15  

15.7

 

NO DUTY TO PURSUE OTHERS

     15  

EXHIBITS

 

Exhibit A – Definitions
Exhibit B – Interpretation
Exhibit C – Applicable Assets, Product, Minimum Capacity Commitment, Tariffs, Tariff Adjustments and Applicable Terms
Exhibit D – Measurement of Shipped Volumes
Exhibit E – Volumetric Gains and Losses; Line Fill; High-API Oil Surcharge
Exhibit F – Increases in Tariff Rates as a Result of Changes in Applicable Law
Exhibit G – Special Provisions: Malaga Pipeline System
Exhibit G-1 – Construction Projects
Exhibit G-2 – Devon Lease Connections
Exhibit H – Special Provisions: El Dorado Assets
Exhibit H-1 – El Dorado Loading Rack
Exhibit H-2 – El Dorado Tankage
Exhibit H-3 – Specifications for New Tank
Exhibit I – Special Provisions: Cheyenne Assets
Exhibit I-1 – Cheyenne Loading Rack
Exhibit I-2 – Cheyenne Receiving Assets
Exhibit I-3 – Cheyenne Tankage
Exhibit J – Special Provisions: Tulsa East Assets
Exhibit J-1 – Tulsa Group 1 Loading Rack

 

ii


Exhibit J-2 – Tulsa Group 1 Pipeline
Exhibit J-3 – Tulsa Group 1 Tankage
Exhibit J-4 – Tulsa Group 2 Loading Rack
Exhibit J-5 – Tulsa Group 2 Tankage
Exhibit K – Special Provisions: El Dorado Crude Tank Farm Assets
Exhibit K-1 – El Dorado Crude Tankage and Jayhawk Tankage
Exhibit K-2 – El Dorado Terminal Quality Specifications
Exhibit L-1 – Tulsa West Tankage
Exhibit L-2 – Special Provisions: Tulsa West Tankage
Exhibit M – Special Provisions: Orla Truck Terminal
Exhibit N-1 – Refined Products Pipelines
Exhibit N-2 –Refined Products Terminals and Terminalling Fees
Exhibit N-3 – Special Provisions: Refined Products Pipelines and Refined Products Terminals
Exhibit O-1 – Special Provisions: Cushing Connect Pipeline
Exhibit O-2 – Specifications for Cushing Tulsa Interconnection System

 

iii


SIXTH AMENDED AND RESTATED

MASTER THROUGHPUT AGREEMENT

This Sixth Amended and Restated Master Throughput Agreement (this “Agreement”) is dated and effective as of the Effective Time (as defined below) by and between HOLLYFRONTIER REFINING & MARKETING LLC (“HFRM”) and HOLLY ENERGY PARTNERS—OPERATING, L.P. (“HEP Operating”). Each of HFRM and HEP Operating are collectively referred to herein as the “Parties.”

RECITALS:

A. In connection with that certain Pipeline Throughput Agreement (Roadrunner), dated as of December 1, 2009, between HFRM (as successor in interest to HollyFrontier Navajo) and HEP Operating, HEP Operating agreed to provide certain transportation services for HFRM on the Roadrunner Pipeline, as defined below.

B. In connection with that certain Loading Rack Throughput Agreement (Lovington), dated as of March 31, 2010, between HFRM (as successor in interest to HollyFrontier Navajo) and HEP Operating (as successor in interest to Holly Energy Storage-Lovington LLC), HEP Operating agreed to provide certain loading services for HFRM with respect to the Lovington Loading Rack, as defined below.

C. In connection with that Second Amended and Restated Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East), dated as of August 31, 2011, between HFRM (as successor in interest to Holly Refining and Marketing-Tulsa LLC) and HEP Operating (as successor in interest to HEP Tulsa LLC and Holly Energy Storage—Tulsa LLC), HEP Operating agreed to provide certain transportation, storage and loading services to HFRM with respect to the Tulsa Interconnecting Pipelines, as defined below.

D. In connection with that certain First Amended and Restated Tankage, Loading Rack and Crude Oil Receiving Throughput Agreement (Cheyenne), dated as of January 11, 2012 between HFRM (as successor in interest to Frontier Refining LLC) and HEP Operating (as successor in interest to Cheyenne Logistics LLC), HEP Operating agreed to provide certain storage and loading services to HFRM with respect to the Cheyenne Assets, as defined below.

E. In connection with that certain Second Amended and Restated Pipeline Delivery, Tankage and Loading Rack Throughput Agreement (El Dorado), dated as of January 7, 2014 between HFRM (as successor in interest to Frontier El Dorado Refining LLC) and HEP Operating (as successor in interest to El Dorado Logistics LLC), HEP Operating agreed to provide certain transportation, storage and loading services to HFRM with respect to the El Dorado Assets, as defined below.

F. In connection with that certain Amended and Restated Transportation Services Agreement (Malaga), dated September 26, 2014, between HFRM and HEP Operating, HEP Operating agreed to provide certain transportation services to HFRM with respect to the Malaga Pipeline System, as defined below.

G. HEP Operating owns certain other pipelines, tankage and other assets which it desires to utilize to provide transportation, storage and loading services for HFRM.

H. The Parties entered into that certain Master Throughput Agreement, effective January 1, 2015 (the “Original Master Throughput Agreement”) pursuant to which HEP Operating agreed to provide certain transportation, storage and loading services with respect to the Applicable Assets, as defined below, and pursuant to which the Parties agreed that such services would no longer be provided pursuant to the Prior Agreements.

 

1


I. The Original Master Throughput Agreement has been further amended and restated, resulting in that certain Fifth Amended and Restated Master Throughput Agreement, effective July 1, 2019 (the “Previous Amended and Restated Master Throughput Agreement”).

J. The Parties now desire to amend and restate the Previous Amended and Restated Master Throughput Agreement in its entirety as follows to, among other things, add the Cushing Connect Pipeline, as defined below.

NOW, THEREFORE, in consideration of the covenants and obligations contained herein, the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS AND INTERPRETATIONS

1.1 Definitions. Capitalized terms used throughout this Agreement and not otherwise defined herein shall have the meanings set forth on Exhibit A.

1.2 Interpretation. Matters relating to the interpretation of this Agreement are set forth on Exhibit B.

ARTICLE 2

AGREEMENT TO USE SERVICES

2.1 Intent. The Parties intend to be strictly bound by the terms set forth in this Agreement, which sets forth revenues to HEP Operating to be paid by HFRM, and requires HEP Operating to provide certain transportation, storage and loading services to HFRM. The principal objective of HEP Operating is for HFRM to meet or exceed its obligations with respect to the Minimum Revenue Commitment. The principal objective of HFRM is for HEP Operating to provide services to HFRM in a manner that enables HFRM to transport, store and/or load Products on, in or at the Applicable Assets. It is the Parties’ further intent that the terms and provisions of this Agreement shall be effective and govern from and after the Effective Time. Any matter first arising prior to the Effective Time shall be governed by the respective agreement relating thereto referenced in the Recitals.

2.2 Minimum Revenue Commitments. During the Applicable Term and subject to the terms and conditions of this Agreement, and as further set forth in Exhibit C, HFRM agrees as follows:

(a) Capacity and Revenue Commitment. Subject to Article 4, HFRM shall pay HEP Operating Applicable Tariffs for use of the Applicable Assets and associated services as provided herein that result in the payment of an amount that will satisfy the Minimum Revenue Commitment in exchange for HEP Operating providing HFRM a minimum capacity in each of the Applicable Assets equal to the Minimum Capacity Commitment. The “Minimum Revenue Commitment” shall be the aggregate sum of the revenue to HEP Operating for each Contract Quarter determined by multiplying the Minimum Throughput Commitment for each Applicable Asset for such Contract Quarter, by the Base Tariff for such Applicable Asset in effect for such Contract Quarter. The “Minimum Capacity Commitment” means the amount set forth on Exhibit C for each Applicable Asset.

 

2


(b) Applicable Tariffs. HFRM shall pay (i) the applicable Base Tariffs for all quantities of Product transported, stored or loaded at, on or through the Applicable Assets in each Contract Quarter during the Applicable Term up to and including the applicable Incentive Tariff Threshold for such Applicable Asset set forth on Exhibit C, (ii) the applicable Incentive Tariff for quantities in excess of the Incentive Tariff Threshold and, (iii) if applicable, the Excess Tariff for the Applicable Asset for quantities in excess of the Excess Tariff Threshold. HFRM shall pay the applicable fees for all quantities of Product transported, stored or loaded at, on or through the Refined Products Terminals in each Contract Quarter during the Applicable Term set forth on Exhibit N-2.

(c) Adjustment of Applicable Tariffs. The Applicable Tariffs shall be adjusted in the manner set forth on Exhibit C. To evidence the Parties’ agreement to each adjusted Applicable Tariff, the Parties may, but shall not be required to, execute an amended, modified, revised or updated Exhibit C and attach it to this Agreement. If executed, such amended, modified, revised or updated Exhibit C shall be sequentially numbered (e.g. Exhibit C-1, Exhibit C-2, etc.), dated and appended as an additional exhibit to this Agreement and shall replace the prior version of Exhibit C in its entirety, after its date of effectiveness. The applicable fees in respect of the Refined Products Terminals shall be adjusted as set forth on Exhibit N-2.

(d) Reduction for Non-Force Majeure Operational Difficulties. If HFRM is unable to transport, store and/or load on, in or at any Applicable Asset the volumes of Products required to meet the Minimum Revenue Commitment for such Applicable Asset for a particular Contract Quarter as a result of HEP Operating’s operational difficulties, prorationing, or the inability to provide sufficient capacity for the Minimum Throughput Commitment, then the Minimum Revenue Commitment applicable to the Contract Quarter during which HFRM is unable to transport, store and/or load such volumes of Products will be reduced by an amount equal to: (A) the volume of Products that HFRM was unable to transport, store and/or load on, in or at such Applicable Assets (but not to exceed the Minimum Throughput Commitment), as a result of HEP Operating’s operational difficulties, prorationing or inability to provide sufficient capacity on the Applicable Assets to achieve the Minimum Throughput Commitment, multiplied by (B) the applicable Base Tariff. This Section 2.2(d) shall not apply in the event HEP Operating gives notice of a Force Majeure event in accordance with the terms of the Omnibus Agreement, in which case the Minimum Revenue Commitment shall be suspended to the extent contemplated in Article IX of the Omnibus Agreement.

(e) Pro-Rationing for Partial Periods. Notwithstanding the other portions of this Section 2.2, in the event that the commencement date of the Applicable Term for any group of Applicable Assets is any date other than the first day of a Contract Quarter, then the Minimum Revenue Commitment, Minimum Throughput Commitment, and any applicable Incentive Tariffs for the initial partial Contract Quarter with respect to such group of Applicable Assets shall be prorated based upon the number of days actually in such partial Contract Quarter. Similarly, notwithstanding the other portions of this Section 2.2 if the last day of the Applicable Term for any group of Applicable Assets is on a day other than the last day of a Contract Quarter, then the Minimum Revenue Commitment, Minimum Throughput Commitment, and any applicable Incentive Tariff for the final partial Contract Quarter with respect to such group of Applicable Assets shall be prorated based upon the number of days actually in such partial Contract Quarter and the initial Contract Quarter.

2.3 Measurement of Shipped Volumes. Matters with respect to the measurement of shipped volumes are set forth on Exhibit D.

 

3


2.4 Volumetric Gains and Losses; Line Fill; High-API Oil Surcharge. Matters with respect to volumetric gains and losses, line fill and high-API oil surcharges are set forth on Exhibit E.

2.5 Obligations of HEP Operating. During the Applicable Term and subject to the terms and conditions of this Agreement, HEP Operating agrees to:

(a) own or lease, operate and maintain (directly or through a Subsidiary) the Applicable Assets and all related assets necessary to handle the applicable Products from HFRM;

(b) make available for HFRM’s use the capacity of the Applicable Assets of at least the Minimum Capacity Commitment;

(c) provide the services required under this Agreement and perform all operations relating to the Applicable Assets, including tank gauging, tank maintenance, loading trucks, interaction with third party pipelines and customer interface for access agreements (as applicable) and performance of all operations and maintenance for the Applicable Assets;

(d) maintain adequate property and liability insurance covering the Applicable Assets and any related assets owned by HEP Operating or its affiliates and necessary for the operation of the Applicable Assets; and

(e) at the request of HFRM, and subject in any case to any applicable common carrier proration duties and commitments to other third-party shippers, use commercially reasonable efforts to transport, store and/or load on the Applicable Assets for HFRM each month during the Applicable Term the quantity of Products that HFRM designates from time to time, but in no event less than the Minimum Capacity Commitment.

Notwithstanding the first sentence of this Section 2.5, subject to the dispute resolution provisions of the Omnibus Agreement and with respect to the Tulsa Assets, the Tulsa Purchase Agreements, HEP Operating or its Affiliate is free to sell any of its assets, including any Applicable Assets, and HFRM is free to merge with another entity and to sell all of its assets or equity to another entity at any time.

2.6 Drag Reducing Agents and Additives. If HEP Operating determines that adding drag reducing agents (“DRA”) to the Products is reasonably required to move the Products in the quantities necessary to meet HFRM’s schedule or as may be otherwise be required to safely move such quantities of Products or that additives should be used in the operation of the Applicable Assets, HEP Operating shall provide HFRM with an analysis of the proposed cost and benefits thereof. In the event that HFRM agrees to use such additives as proposed by HEP Operating, HFRM shall reimburse HEP Operating for the costs of adding any DRA or additives. If HEP Operating reasonably determines that additives or chemicals must be added to any of the pipelines included in the Applicable Assets to prevent or control internal corrosion of the pipe, then HFRM shall reimburse HEP Operating for the direct cost of the chemical and associated injection equipment.

2.7 Change in the Direction; Product Service or Origination and Destination of the Pipeline System. Without HFRM’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), HEP Operating shall not (i) reverse the direction of flow of any Pipeline; (ii) change, alter or modify the Product service of any Pipeline; or (iii) change, alter or modify the origination or destination of any Pipeline; provided, however, that HEP Operating may take any necessary emergency action to prevent or remedy a release of Products from a Pipeline without obtaining the consent required by

 

4


this Section 2.7. HFRM shall have the right to reverse the direction of flow of any segment of a Pipeline where it is the sole shipper of Products if, in each case, HFRM agrees to (1) reimburse HEP Operating for the additional costs and expenses incurred by HEP Operating as a result of such change in direction (both to reverse and re-reverse); (2) reimburse HEP Operating for all costs arising out of HEP Operating’s inability to perform under any transportation service contract due to the reversal of the direction of flow of the Pipeline; and (3) pay the Applicable Tariffs in accordance with this Agreement, for any such flow reversal. With respect to the Malaga Pipeline System, the foregoing shall apply regardless of whether the Product shipped in such manner reaches an injection point for the Centurion Pipeline or Plains Pipeline. HEP Operating shall not acquire any right, title or interest in the Products, and all title to and ownership of the Products while the same is in the possession of HEP Operating shall be and shall remain exclusively in HFRM. HEP Operating shall not represent itself to any third party as the owner of any of the Products and shall hold the same in trust for HFRM. HFRM shall advise HEP Operating in writing of any change in Product ownership while in the Applicable Assets. If any of HFRM’s Product is sold, exchanged, or otherwise changes ownership while in the Applicable Assets, HFRM shall nonetheless be responsible for the terms and conditions of this Agreement the same as if Products had been owned by HFRM.

2.8 Notification of Utilization. Upon request by HEP Operating, HFRM will provide to HEP Operating written notification of HFRM’s reasonable good faith estimate of its anticipated future utilization of the Applicable Assets as soon as reasonably practicable after receiving such request.

2.9 Scheduling and Accepting Movement. HEP Operating will use its reasonable commercial efforts to schedule and accept movements of Products in a manner that is consistent with the historical dealings between the Parties and their Affiliates, as such dealings may change from time to time.

2.10 Taxes. HFRM will pay all taxes, import duties, license fees and other charges by any Governmental Authority levied on or with respect to the Products handled by HFRM for transportation, storage and/or loading by HEP Operating. Should either Party be required to pay or collect any taxes, duties, charges and or assessments pursuant to any Applicable Law or authority now in effect or hereafter to become effective which are payable by the any other Party pursuant to this Section 2.10 the proper Party shall promptly reimburse the other Party therefor.

2.11 Timing of Payments. HFRM will make payments to HEP Operating by electronic payment with immediately available funds on a monthly basis during the Applicable Term with respect to services rendered or reimbursable costs or expenses incurred by HEP Operating under this Agreement in the prior month. Payments not received by HEP Operating on or prior to the tenth day following the invoice date will accrue interest at the Prime Rate from the applicable payment date until paid.

2.12 Increases in Tariff Rates. If new Applicable Laws are enacted that require HEP Operating to make capital expenditures with respect to the Applicable Assets, HEP Operating may amend the Applicable Tariffs in the manner set forth in Exhibit F, in order to recover HEP Operating’s cost of complying with such new Applicable Laws (as determined in good faith and including a reasonable return). HFRM and HEP Operating shall use their reasonable commercial efforts to comply with such new Applicable Laws, and shall negotiate in good faith to mitigate the impact of such new Applicable Laws and to determine the amount of the new Applicable Tariff rates. If HFRM and HEP Operating are unable to agree on the amount of the new Applicable Tariff rates that HEP Operating will charge, such Applicable Tariff rates will be resolved in the manner provided for in the Omnibus Agreement. Any other applicable exhibit to this Agreement will be updated, amended or revised, as applicable, in accordance with this Agreement to reflect any changes in Applicable Tariff rates established in accordance with this Section 2.12.

 

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2.13 Removal of Tank from Service. The Parties agree that if a tank included in the Applicable Assets is removed from service, then HEP Operating will not be required to utilize, operate or maintain such tank or provide the services required under this Agreement with respect to such tank (and there will be no adjustment to the applicable Minimum Revenue Commitment). The Parties acknowledge that provisions relating to the inspection, repair and maintenance of tanks included in the Applicable Assets are set forth in the Master Lease and Access Agreement, and such provisions are in addition to, and not in substitution of, the terms set forth in this Section 2.13.

2.14 No Guaranteed Minimum. Notwithstanding anything to the contrary set forth in this Agreement, there is no requirement that HFRM deliver any minimum quantity of Product for transport, storage, handling or loading on, over or in the Applicable Assets, it being understood that HFRM’s obligation for failing to ship, store or load sufficient quantities of Product to satisfy the Minimum Revenue Commitment is to make Deficiency Payments as provided in Article 10.

2.15 Ethanol Blending. For any Applicable Asset at which HEP Operating provides ethanol blending services to HFRM, HEP Operating agrees to allow HFRM or its representative to perform (i) periodic audits of the ethanol blending operation to assess whether the overall volumes of ethanol used by HEP Operating are consistent with HFRM’s ethanol blending specifications and that the ethanol was blended with HFRM’s gasoline or blend stock; and (ii) periodic sampling and testing of the gasoline produced subsequent to the ethanol blending and periodic inspections to ensure the contractual requirements between HEP Operating and HFRM are being met.

ARTICLE 3

AGREEMENT TO REMAIN SHIPPER

With respect to any Product that is transported, stored or loaded in connection with any of the Applicable Assets by HFRM, HFRM agrees that it will continue acting in the capacity of the shipper of any such Product for its own account at all times that such Product is being transported, stored, handled or loaded in the Applicable Assets.

ARTICLE 4

NOTIFICATION OF REFINERY SHUT-DOWN OR RECONFIGURATION

If a Refinery shuts down or the Refinery owner reconfigures the Refinery or any portion of the Refinery (excluding planned maintenance turnarounds) and HFRM reasonably believes in good faith that such shut down or reconfiguration will jeopardize its ability to satisfy its applicable Minimum Revenue Commitments under this Agreement, then within 90 days of the delivery of the written notice of the planned shut down or reconfiguration, HFRM shall (A) propose a new Minimum Revenue Commitment under this Agreement, as applicable, such that the ratio of the new applicable Minimum Revenue Commitment under this Agreement over the anticipated production level following the shut down or reconfiguration will be approximately equal to the ratio of the original applicable Minimum Revenue Commitment under this Agreement over the original production level and (B) propose the date on which the new Minimum Revenue Commitment under this Agreement shall take effect. Unless objected to by HEP Operating within 60 days of receipt by HEP Operating of such proposal, such new Minimum Revenue Commitment under this Agreement shall become effective as of the date proposed by HFRM. To the extent that HEP Operating does not agree with HFRM’s proposal, any changes in HFRM’s obligations under this Agreement, or the date on which such changes will take effect, will be determined pursuant to the dispute resolution provisions of the Omnibus Agreement. Any applicable exhibit to this Agreement will be updated, amended or revised, as applicable, in accordance with this Agreement to reflect any change in the applicable Minimum Revenue Commitment under this Agreement agreed to in accordance with this Section 4.1.

 

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In addition, in the event of a partial shutdown or a reconfiguration of the Navajo Refinery, HFRM agrees to utilize the Refined Products Pipelines and the Navajo Refinery truck rack for 100% of the Navajo Refinery output for the duration of such partial shutdown or reconfiguration.

ARTICLE 5

FORCE MAJEURE

The rights and obligations of the Parties upon the occurrence of an event of Force Majeure will be determined in the manner set forth in the Omnibus Agreement; provided that (a) any suspension of the obligations of the Parties under this Agreement as a result of an event of Force Majeure shall extend the Applicable Term (to the extent so affected) for a period equivalent to the duration of the inability set forth in the Force Majeure Notice, (b) HFRM will be required to pay any amounts accrued and due under this Agreement at the time of the Force Majeure event, and (c) if a Force Majeure event prevents either Party from performing substantially all of their respective obligations under this Agreement relating to a group of Applicable Assets for a period of more than one (1) year, this Agreement may be terminated as to such Applicable Assets (but not as to unaffected Applicable Assets) by either Party providing written notice thereof to the other Party.

ARTICLE 6

AGREEMENT NOT TO CHALLENGE PIPELINE TARIFFS

HFRM agrees to any tariff rate changes for Pipelines in accordance with this Agreement. HFRM agrees (a) not to challenge, nor to cause their Affiliates to challenge, nor to encourage or recommend to any other Person that it challenge, or voluntarily assist in any way any other Person in challenging, in any forum, interstate or intrastate tariffs (including joint tariffs) of HEP Operating (or its Affiliates) that HEP Operating (or its Affiliate) has filed or may file containing rates, rules or regulations that are in effect at any time during the Applicable Term and regulate the transportation of the Products on any Pipelines, (b) not to protest or file a complaint, nor cause their Affiliates to protest or file a complaint, nor encourage or recommend to any other Person that it protest or file a complaint, or voluntarily assist in any way any other Person in protesting or filing a complaint, with respect to regulatory filings that HEP Operating or its Affiliate has made or may make at any time during the Applicable Term to change interstate or intrastate tariffs (including joint tariffs) for transportation of Products on any Pipelines, and (c) not to seek, nor cause any of its Affiliates to seek, nor encourage or recommend to any other Person that it seek, or voluntarily assist in any way any other Person in seeking, regulatory review of, or regulatory jurisdiction over, the contractual rates charged at any time during the term of this Agreement by HEP Operating for terminalling services or to challenge, in any forum, such rates or changes to such rates, in each case so long as such tariffs, regulatory filings or rates changed do not conflict with the terms of this Agreement.

ARTICLE 7

EFFECTIVENESS AND APPLICABLE TERM

This Agreement shall be effective as to each group of Applicable Assets as of the date and time set forth on Exhibit C (or, in the case of the Refined Products Terminals, Exhibit N-2) and shall terminate with respect to each group of Applicable Assets as of the date and time set forth on Exhibit C (or, in the case of

 

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the Refined Products Terminals, Exhibit N-2), unless extended by written mutual agreement of the Parties or as set forth in Article 8 (each, the “Applicable Term”). The Party desiring to extend this Agreement with respect to any group of Applicable Assets pursuant to this Article 7 shall provide prior written notice to the other Party of its desire to so extend this Agreement; such written notice shall be provided not more than twenty-four (24) months and not less than the later of twelve (12) months prior to the date of termination of the Applicable Term or ten (10) days after receipt of a written request from the other Party (which request may be delivered no earlier than twelve (12) months prior to the date of termination of the Applicable Term) to provide any such notice or lose such right.

ARTICLE 8

RIGHT TO ENTER INTO A NEW AGREEMENT

8.1. Negotiation Pursuant to Written Notice. In the event that HFRM provides prior written notice to HEP Operating of the desire of HFRM to extend this Agreement for a specific group of Applicable Assets by written mutual agreement of the Parties pursuant to Article 7, the Parties shall negotiate in good faith to extend this Agreement by written mutual agreement with respect to such specific group of Applicable Assets, but, if such negotiations fail to produce a written mutual agreement for extension by a date six months prior to the termination date for such group of Applicable Assets, then HEP Operating shall have the right to negotiate to enter into one or more throughput, tankage or transportation services agreements for HFRM’s Minimum Capacity Commitment for such Applicable Assets with one or more third parties to begin after the date of termination, provided, however, that until the end of one year following termination without renewal of this Agreement for such group of Applicable Assets, HFRM will have the right to enter into a new throughput, tankage or transportation services or transportation services agreement with HEP Operating with respect to its Minimum Capacity Commitment on the date of termination on commercial terms that substantially match the terms upon which HEP Operating proposes to enter into an agreement with a third party for similar services with respect to all or a material portion of such capacity of such group of Applicable Assets. In such circumstances, HEP Operating shall give HFRM at least forty-five (45) days prior written notice of any proposed new throughput agreement with a third party, and such notice shall inform HFRM of the fee schedules, tariffs, duration and any other material terms of the proposed third party agreement. HFRM shall have forty-five (45) days following receipt of such notice to agree to the terms specified in the notice or HFRM shall lose the rights specified by this Section 8.1 with respect to the capacity that is the subject of such notice.

8.2. Negotiation in the Absence of Written Notice. In the event that HFRM fails to provide prior written notice to HEP Operating of the desire of HFRM to extend this Agreement for a specific group of Applicable Assets by written mutual agreement of the Parties pursuant to Article 7, HEP Operating shall have the right, during the period from the date of HFRM’s failure to provide written notice pursuant to Article 7 to the date of termination of this Agreement, to negotiate to enter into one or more throughput, tankage or transportation services agreements for HFRM’s Minimum Capacity Commitment for the such group of Applicable Assets with one or more third parties to begin after the date of termination; provided, however, that at any time during the twelve (12) months prior to the expiration of the Applicable Term, HFRM will have the right to enter into a new throughput, tankage agreement with HEP Operating with respect to its existing Minimum Capacity Commitment at such time on commercial terms that substantially match the terms upon which HEP Operating proposes to enter into an agreement with a third party for similar services with respect to all or a material portion of such capacity on such group of Applicable Assets. In such circumstances, HEP Operating shall give HFRM forty-five (45) days prior written notice of any proposed new agreement with a third party, and such notice shall inform HFRM of the fee schedules, tariffs, duration and any other material terms of the proposed third party agreement and HFRM shall have forty-five (45) days following receipt of such notice to agree to the terms specified in the notice or HFRM shall lose the rights specified by this Section 8.2 with respect to the capacity that is the subject of such notice.

 

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ARTICLE 9

NOTICES

Any notice or other communication given under this Agreement shall be in writing and shall be provided in the manner set forth in the Omnibus Agreement.

ARTICLE 10

DEFICIENCY PAYMENTS

10.1 Deficiency Notice; Deficiency Payments. As soon as practicable following the end of each Contract Quarter under this Agreement, HEP Operating shall deliver to HFRM a written notice (the “Deficiency Notice”) detailing any failure of HFRM to meet any of the Minimum Revenue Commitments set forth on Exhibit C; provided, however, that HFRM’s obligations pursuant to the Minimum Revenue Commitment shall be assessed on a quarterly basis for the purposes of this Article 10. Notwithstanding the previous sentence, any deficiency owed by HFRM due to its failure to satisfy any Minimum Revenue Commitment, if any, set forth on Exhibit C, as to any Applicable Asset for a Contract Quarter shall be offset by any revenue owed to HEP Operating in excess of any Minimum Revenue Commitment for such Contract Quarter set forth on Exhibit C from any other Applicable Asset at the same location. The Deficiency Notice shall (i) specify in reasonable detail the nature of any deficiency and (ii) specify the approximate dollar amount that HEP Operating believes would have been paid by HFRM to HEP Operating if HFRM had complied with its Minimum Revenue Commitment obligations pursuant to this Agreement (the “Deficiency Payment”). HFRM shall pay the Deficiency Payment to HEP Operating upon the later of: (A) ten (10) days after their receipt of the Deficiency Notice and (B) thirty (30) days following the end of the related Contract Quarter.

10.2 Disputed Deficiency Notices. If HFRM disagrees with the Deficiency Notice, then, following the payment of the undisputed portion of the Deficiency Payment to HEP Operating, if any, HFRM shall send written notice thereof regarding the disputed portion of the Deficiency Payment to HEP Operating. Thereafter, a senior officer of HollyFrontier (on behalf of HFRM) and a senior officer of the Partnership (on behalf of HEP Operating) shall meet or communicate by telephone at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary and shall negotiate in good faith to attempt to resolve any differences that they may have with respect to matters specified in the Deficiency Notice. During the 30-day period following the payment of the Deficiency Payment, HFRM shall have access to the working papers of HEP Operating relating to the Deficiency Notice. If such differences are not resolved within thirty (30) days following HFRM’s receipt of the Deficiency Notice, HFRM and HEP Operating shall, within forty-five (45) days following HFRM’s receipt of the Deficiency Notice, submit any and all matters which remain in dispute and which were properly included in the Deficiency Notice to dispute resolution in accordance with the Omnibus Agreement.

10.3 Payment of Amounts No Longer Disputed. If it is finally determined pursuant to this Article 10 that HFRM is required to pay any or all of the disputed portion of the Deficiency Payment, HFRM shall promptly pay such amount to HEP Operating, together with interest thereon at the Prime Rate, in immediately available funds.

10.4 Contract Quarters Independent. The fact that HFRM has exceeded or fallen short of the Minimum Revenue Commitment with respect to any Contract Quarter shall not be considered in determining whether HFRM meets, exceeds or falls short of the Minimum Revenue Commitment with respect to any other Contract Quarter, and the amount of any such excess or shortfall shall not be counted towards or against the Minimum Revenue Commitment with respect to any other Contract Quarter.

 

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ARTICLE 11

RIGHT OF FIRST REFUSAL

The Parties acknowledge the right of first refusal of HollyFrontier with respect to the Applicable Assets other than the Tulsa Assets as provided in the Omnibus Agreement, and the right of first refusal of HollyFrontier with respect to the Tulsa Assets as provided in the Tulsa Purchase Agreements.

ARTICLE 12

INDEMNITY; LIMITATION OF DAMAGES

12.1 Indemnity; Limitation of Liability. The Parties acknowledge and agree that the provisions relating to indemnity and limitation of liability are set forth in the Omnibus Agreement. Notwithstanding anything in this Agreement or the Omnibus Agreement to the contrary and solely for the purpose of determining which of HFRM or HEP Operating shall be liable in a particular circumstance, neither HFRM or HEP Operating shall be liable to the other Party for any loss, damage, injury, judgment, claim, cost, expense or other liability suffered or incurred (collectively, “Damages”) by such Party except to the extent set forth in the Omnibus Agreement and to the extent that HFRM or HEP Operating causes such Damages or owns or operates the assets or other property in question responsible for causing such Damages.

12.2 Survival. The provisions of this Article 12 shall survive the termination of this Agreement.

ARTICLE 13

MISCELLANEOUS

13.1 Amendments and Waivers. No amendment or modification of this Agreement shall be valid unless it is in writing and signed by the Parties. No waiver of any provision of this Agreement shall be valid unless it is in writing and signed by the Party against whom the waiver is sought to be enforced. Any of the exhibits to this Agreement may be amended, modified, revised or updated by the Parties if each of the Parties executes an amended, modified, revised or updated exhibit, and attaches it to this Agreement. Such amended, modified, revised or updated exhibits shall be sequentially numbered (e.g. Exhibit A-1, Exhibit A-2, etc.), dated and appended as an additional exhibit to this Agreement and shall replace the prior exhibit, in its entirety, after its date of effectiveness, except as specified therein. No failure or delay in exercising any right hereunder, and no course of conduct, shall operate as a waiver of any provision of this Agreement. No single or partial exercise of a right hereunder shall preclude further or complete exercise of that right or any other right hereunder.

 

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13.2 Successors and Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and permitted assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned without the prior written consent of HFRM (in the case of any assignment by HEP Operating) or HEP Operating (in the case of any assignment by HFRM), in each case, such consent is not to be unreasonably withheld or delayed; provided, however, that (i) HEP Operating may make such an assignment (including a partial pro rata assignment) to an Affiliate of HEP Operating without HFRM’s consent, (ii) HFRM may make such an assignment (including a pro rata partial assignment) to an Affiliate of HFRM without HEP Operating’s consent, (iii) HFRM may, without HEP Operating’s prior written consent, make a partial assignment to any third party that acquires assets of HollyFrontier that rely on the services provided by HEP Operating on the Refined Products Pipelines and the Refined Products Terminals if such Person (1) is reasonably capable of performing HFRM’s obligations (or its pro rata portion of such obligations) under this Agreement assigned to such Person, which determination shall be made by HFRM in its reasonable judgment and (2) has agreed in writing to assume the obligations of HFRM assigned to such Person, (iv) HEP Operating may, without HFRM’s prior written consent, make a partial assignment to any third party that acquires any of the Refined Products Pipelines or the Refined Products Terminals if such Person (1) is reasonably capable of performing HEP Operating’s obligations (or its pro rata portion of such obligations) under this Agreement assigned to such Person, which determination shall be made by HEP Operating in its reasonable judgment and (2) has agreed in writing to assume the obligations of HEP Operating assigned to such Person, (v) HFRM may make a collateral assignment of its rights and obligations hereunder and/or grant a security interest in its rights and obligations hereunder, and HEP Operating shall execute an acknowledgement of such collateral assignment in such form as may from time-to-time be reasonably requested, and (vi) HEP Operating may make a collateral assignment of its rights hereunder and/or grant a security interest in its rights and obligations hereunder to a bona fide third party lender or debt holder, or trustee or representative for any of them, without HFRM’s consent, if such third party lender, debt holder or trustee shall have executed and delivered to HFRM a non-disturbance agreement in such form as is reasonably satisfactory to HFRM and such third party lender, debt holder or trustee, and HFRM executes an acknowledgement of such collateral assignment in such form as may from time to time be reasonably requested. Any attempt to make an assignment otherwise than as permitted by the foregoing shall be null and void. The Parties agree to require their respective successors, if any, to expressly assume, in a form of agreement reasonably acceptable to the other Parties, their obligations under this Agreement.

13.3 Severability. If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.

13.4 Choice of Law. This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.

13.5 Rights of Limited Partners. The provisions of this Agreement are enforceable solely by the Parties, and no limited partner of the Partnership shall have the right, separate and apart from the Partnership, to enforce any provision of this Agreement or to compel any Party to comply with the terms of this Agreement.

13.6 Further Assurances. In connection with this Agreement and all transactions contemplated by this Agreement, each signatory Party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

 

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13.7 Headings. Headings of the Sections of this Agreement are for convenience of the Parties only and shall be given no substantive or interpretative effect whatsoever. All references in this Agreement to Sections are to Sections of this Agreement unless otherwise stated.

13.8 Filed Tariffs. Nothing in this Agreement shall alter the liabilities and obligations of the Parties as may be set forth in the rules and regulations tariffs for the Applicable Assets.

ARTICLE 14

GUARANTEE BY HOLLYFRONTIER

14.1 Payment Guaranty. HollyFrontier unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to HEP Operating the punctual and complete payment in full when due of all amounts due from HFRM under this Agreement (collectively, the “HFRM Payment Obligations”). HollyFrontier agrees that HEP Operating shall be entitled to enforce directly against HollyFrontier any of the HFRM Payment Obligations.

14.2 Guaranty Absolute. HollyFrontier hereby guarantees that the HFRM Payment Obligations will be paid strictly in accordance with the terms of the Agreement. The obligations of HollyFrontier under this Agreement constitute a present and continuing guaranty of payment, and not of collection or collectability. The liability of HollyFrontier under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:

(a) any assignment or other transfer of this Agreement or any of the rights thereunder of HEP Operating;

(b) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to this Agreement;

(c) any acceptance by HEP Operating of partial payment or performance from HFRM;

(d) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to HFRM or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding;

(e) any absence of any notice to, or knowledge of, HollyFrontier, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (i) through (iv); or

(f) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.

The obligations of HollyFrontier hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the HFRM Payment Obligations or otherwise.

 

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14.3 Waiver. HollyFrontier hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the HFRM Payment Obligations and any requirement for HEP Operating to protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against HFRM, any other entity or any collateral.

14.4 Subrogation Waiver. HollyFrontier agrees that for so long as there is a current or ongoing default or breach of this Agreement by HFRM, HollyFrontier shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from HFRM for any payments made by HollyFrontier under this Article 14, and HollyFrontier hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter acquire against HFRM during any period of default or breach of this Agreement by HFRM until such time as there is no current or ongoing default or breach of this Agreement by HFRM.

14.5 Reinstatement. The obligations of HollyFrontier under this Article 14 shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the HFRM Payment Obligations is rescinded or must otherwise be returned to HFRM or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of HFRM or such other entity, or for any other reason, all as though such payment had not been made.

14.6 Continuing Guaranty. This Article 14 is a continuing guaranty and shall (i) remain in full force and effect until the first to occur of the indefeasible payment in full of all of the HFRM Payment Obligations, (ii) be binding upon HollyFrontier, its successors and assigns and (iii) inure to the benefit of and be enforceable by HEP Operating and its respective successors, transferees and assigns.

14.7 No Duty to Pursue Others. It shall not be necessary for HEP Operating (and HollyFrontier hereby waives any rights which HollyFrontier may have to require HEP Operating), in order to enforce such payment by HollyFrontier, first to (i) institute suit or exhaust its remedies against HFRM or others liable on the HFRM Payment Obligations or any other person, (ii) enforce HEP Operating’s rights against any other guarantors of the HFRM Payment Obligations, (iii) join HFRM or any others liable on the HFRM Payment Obligations in any action seeking to enforce this Article 14, (iv) exhaust any remedies available to HEP Operating against any security which shall ever have been given to secure the HFRM Payment Obligations, or (v) resort to any other means of obtaining payment of the HFRM Payment Obligations.

ARTICLE 15

GUARANTEE BY THE PARTNERSHIP

15.1 Payment and Performance Guaranty. The Partnership unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to HFRM the punctual and complete payment in full when due of all amounts due from HEP Operating under this Agreement (collectively, the “HEP Operating Payment Obligations”) and the punctual and complete performance of all other obligations of HEP Operating under this Agreement (collectively, the “HEP Operating Performance Obligations”, together with the HEP Operating Payment Obligations, the “HEP Operating Obligations”). The Partnership agrees that HFRM shall be entitled to enforce directly against the Partnership any of the HEP Operating Obligations.

 

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15.2 Guaranty Absolute. The Partnership hereby guarantees that the HEP Operating Payment Obligations will be paid, and the HEP Performance Obligations will be performed, strictly in accordance with the terms of this Agreement. The obligations of the Partnership under this Agreement constitute a present and continuing guaranty of payment and performance, and not of collection or collectability. The liability of the Partnership under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:

(a) any assignment or other transfer of this Agreement or any of the rights thereunder of HFRM;

(b) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to this Agreement;

(c) any acceptance by HFRM of partial payment or performance from HEP Operating;

(d) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to HEP Operating or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding;

(e) any absence of any notice to, or knowledge of, the Partnership, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (i) through (iv); or

(f) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.

The obligations of the Partnership hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the HEP Operating Obligations or otherwise.

15.3 Waiver. The Partnership hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the HEP Operating Payment Obligations and any requirement for HFRM to protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against HEP Operating, any other entity or any collateral.

15.4 Subrogation Waiver. The Partnership agrees that for so long as there is a current or ongoing default or breach of this Agreement by HEP Operating, the Partnership shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from HEP Operating for any payments made by the Partnership under this Article 15, and each of the Partnership hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter acquire against HEP Operating during any period of default or breach of this Agreement by HEP Operating until such time as there is no current or ongoing default or breach of this Agreement by HEP Operating.

 

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15.5 Reinstatement. The obligations of the Partnership under this Article 15 shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the HEP Operating Payment Obligations is rescinded or must otherwise be returned to HEP Operating or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of HEP Operating or such other entity, or for any other reason, all as though such payment had not been made.

15.6 Continuing Guaranty. This Article 15 is a continuing guaranty and shall (i) remain in full force and effect until the first to occur of the indefeasible payment and/or performance in full of all of the HEP Operating Obligations, (ii) be binding upon the Partnership and each of its respective successors and assigns and (iii) inure to the benefit of and be enforceable by HFRM and their respective successors, transferees and assigns.

15.7 No Duty to Pursue Others. It shall not be necessary for HFRM (and the Partnership hereby waives any rights which the Partnership may have to require HFRM), in order to enforce such payment by the Partnership, first to (i) institute suit or exhaust its remedies against HEP Operating or others liable on the HEP Operating Obligations or any other person, (ii) enforce HFRM’s rights against any other guarantors of the HEP Operating Obligations, (iii) join HEP Operating or any others liable on the HEP Operating Obligations in any action seeking to enforce this Article 15, (iv) exhaust any remedies available to HFRM against any security which shall ever have been given to secure the HEP Operating Obligations, or (v) resort to any other means of obtaining payment of the HEP Operating Obligations.

[Remainder of page intentionally left blank. Signature pages follow.]

 

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IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of the date first written above to be effective as of the Effective Time.

 

HEP OPERATING:
Holly Energy Partners - Operating, L.P.
By:  

/s/ Richard L. Voliva III

  Richard L. Voliva III
  Executive Vice President & Chief Financial Officer
HFRM:  
HollyFrontier Refining & Marketing LLC
By:  

/s/ Thomas G. Creery

  Thomas G. Creery
  Chief Executive Officer and President

[Signature Page 1 of 2 to the Sixth Amended and Restated Master Throughput Agreement]


ACKNOWLEDGED AND AGREED
FOR PURPOSES OF Section 10.2
AND Article 14:
HOLLYFRONTIER CORPORATION
By:  

/s/ George J. Damiris

  George J. Damiris
  Chief Executive Officer and President
ACKNOWLEDGED AND AGREED
FOR PURPOSES OF Section 10.2
AND Article 15:
HOLLY ENERGY PARTNERS, L.P.
By:   HEP Logistics Holdings, L.P.,
  its General Partner
By:   Holly Logistic Services, L.L.C.,
  its General Partner
By:  

/s/ Richard L. Voliva III

          Richard L. Voliva III
          EVP and Chief Financial Officer

[Signature Page 2 of 2 to the Sixth Amended and Restated Master Throughput Agreement]

 


Exhibit A

to

Sixth Amended and Restated

Master Throughput Agreement

 

Definitions

Actual Construction Costs” has the meaning set forth in Exhibit C.

Actual OPEX” has the meaning set forth in Exhibit L-2.

Affiliate” means, with to respect to a specified person, any other person controlling, controlled by or under common control with that first person. As used in this definition, the term “control” includes (i) with respect to any person having voting securities or the equivalent and elected directors, managers or persons performing similar functions, the ownership of or power to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the power to vote in the election of directors, managers or persons performing similar functions, (ii) ownership of 50% or more of the equity or equivalent interest in any person and (iii) the ability to direct the business and affairs of any person by acting as a general partner, manager or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, HFRM, on the one hand, and HEP Operating, on the other hand, shall not be considered affiliates of each other.

Agreement” has the meaning set forth in the preamble to this Agreement, as the same may be amended from time to time.

API” means the American Petroleum Institute.

API 653” means the Above Ground Storage Tank Inspector Program issued by the API as API Standard 653, as amended and supplemented from time to time.

API Gravity” means the API index of specific gravity of a liquid petroleum expressed as degrees, as such index would be calculated on the date hereof.

Applicable Asset” means each of the Cheyenne Assets, El Dorado Assets, Lovington Loading Rack, Malaga Pipeline System, Roadrunner Pipeline, Tulsa Assets, El Dorado Crude Tank Farm Assets, the Tulsa West Tankage, the Catoosa Lubes Terminal, the Orla Truck Terminal, the Refined Products Pipelines, the Refined Products Terminals, the Cushing Connect Pipeline and, solely with respect to Section 2.2, Section 2.14, Article 7 and Article 10 of this Agreement, the El Dorado Connector Pipeline, individually; and “Applicable Assets” means all of the foregoing assets, collectively.

Applicable Law” means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination of, any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, without limitation, all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question.

Applicable Tariff” means the Base Tariff and, to the extent applicable, the Incentive Tariff.

 

Exhibit A-1


Applicable Term” has the meaning set forth in Article 7.

ASTM” means ASTM International.

Artesia Bloomfield Pipeline” means the refined products pipelines described on Exhibit N-1 attached hereto, as such Exhibit may be amended or revised from time-to-time by mutual agreement of HFRM and HEP Operating.

Artesia Moriarty Pipeline” means the refined products pipelines described on Exhibit N-1 attached hereto, as such Exhibit may be amended or revised from time-to-time by mutual agreement of HFRM and HEP Operating.

Assumed OPEX” means, with respect to any Applicable Asset, the amount set forth on Exhibit C with respect to such Applicable Asset.

Barrel” means 42 Gallons.

Base Tariff” means the Base Tariff applicable to the quantity of Product transported, stored or loaded in connection with an Applicable Asset as set forth on Exhibit C, as such Base Tariff may be adjusted pursuant to the terms of this Agreement.

bpd” means Barrels per day.

Business Day” means any day other than Saturday, Sunday or other day upon which commercial banks in Dallas, Texas are authorized by law to close.

Catoosa Lubes Terminal” means that certain water port terminal and related facilities located in Rogers County, Oklahoma, near the Port of Catoosa, Oklahoma, and more fully described in that certain Amended and Restated Lease Agreement, dated August 1, 2007, between the City of Tulsa-Rogers County Port Authority (the “Port Authority”) and Petro Source Terminals, LLC, as amended by that certain First Amendment of Amended and Restated Lease Agreement, dated August 1, 2017, between the Port Authority and NGL Crude Terminals, LLC, as modified by that certain Lease Assignment and Assumption Agreement, dated June 1, 2018, between the Port Authority, NGL Crude Terminals, LLC and HEP Oklahoma LLC.

Centurion Pipeline” means that certain 10” pipeline system operated by Centurion Pipeline L.P. and originating from Centurion’s Artesia Station located within Township 18S and Range 27E, approximately 1 mile south of HEP Operating’s Abo Station.

Cheyenne Assets” means the Cheyenne Receiving Assets, Cheyenne Loading Rack and the Cheyenne Tankage.

Cheyenne Loading Rack” means the refined products truck loading rack and the two (2) propane loading spots located at the Cheyenne Refinery and more specifically described in Exhibit I-1.

Cheyenne Receiving Assets” means the pipelines set forth on Exhibit I-2.

Cheyenne Refinery” means the refinery owned by HollyFrontier Cheyenne Refining LLC and located in Cheyenne, Wyoming.

Cheyenne RCRA Order” means the administrative order set forth in Exhibit I.

 

Exhibit A-2


Cheyenne Tankage” means the tanks set forth on Exhibit I-3.

Claim” means any existing or threatened future claim, demand, suit, action, investigation, proceeding, governmental action or cause of action of any kind or character (in each case, whether civil, criminal, investigative or administrative), known or unknown, under any theory, including those based on theories of contract, tort, statutory liability, strict liability, employer liability, premises liability, products liability, breach of warranty or malpractice.

Closing Date” has the meaning for each Applicable Asset set forth in the Omnibus Agreement.

Construction Projects” has the meaning set forth in Article 2.

Contract Quarter” means a three-month period that commences on January 1, April 1, July 1 or October 1 and ends on March 31, June 30, September 30, or December 31, respectively.

Control” (including with correlative meaning, the term “controlled by”) means, as used with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

Crude Agreement” means the Third Amended and Restated Crude Pipelines and Tankage Agreement, dated as of March 12, 2015, by and among HFRM, HEP Operating and certain other Affiliates of HFRM and HEP Operating.

Crude Oil” means the direct liquid product of oil wells, oil processing plants, the indirect liquid petroleum products of oil or gas wells, oil sands or a mixture of such products, but does not include natural gas liquids, Refined Products, naphtha, gas oil, LEF (lube extraction feedstocks) or any other refined products.

Cushing Connect Commencement Date” means the date on which, in the reasonable opinion of HEP Operating, the Cushing Connect Pipeline and the Cushing Tulsa Interconnection System are available for service and operating as expected by HEP Operating in delivering Crude Oil, which date has been specified in a written notice from HEP Operating to HFRM at least 60 days prior to the Cushing Connect Commencement Date.

Cushing Connect Pipeline” means that certain approximately 50 mile, 16” pipeline to be constructed by Cushing Connect Pipeline Holdings LLC, a subsidiary of Cushing Connect, to transport Crude Oil from the Cushing Terminal to the Tulsa East Refinery and Tulsa West Refinery.

Cushing Connect Capacity Use Agreement” has the meaning set forth in Exhibit O-1.

Cushing Terminal” means the Crude Oil storage, blending and terminalling facility terminal located in Cushing, Oklahoma and owned and operated by Plains Marketing, L.P., a Texas limited partnership.

Cushing Tulsa Interconnection System” means those modifications to certain pipeline and tank connectivity within the Tulsa East Refinery and Tulsa West Refinery to accommodate and connect the Cushing Connect Pipeline, which shall be constructed by HEP Operating as specified in Exhibit O-1 and Exhibit O-2.

Deficiency Notice” has the meaning set forth in Section 10.1.

 

Exhibit A-3


Deficiency Payment” has the meaning set forth in Section 10.1.

Devon” means Devon Energy Production Company, L.P., and its Affiliates.

Devon Lease Connections” has the meaning set forth in Exhibit G-2.

DRA” has the meaning set forth in Section 2.6.

Effective Time” means 12:01 a.m., Dallas, Texas time, on October 2, 2019.

El Dorado Assets” means the El Dorado Loading Rack and the El Dorado Tankage.

El Dorado Connector Pipeline” means that certain crude oil pipeline connecting the El Dorado Crude Tankage to the Pony Express Pipeline, which pipeline is owned by a Person that is not an Affiliate of either HFRM or HEP Operating.

El Dorado Crude Tank Farm Assets” means the El Dorado Delivery Lines and the El Dorado Crude Tankage.

El Dorado Crude Tank Farm Consideration Period” has the meaning set forth in Exhibit K.

El Dorado Crude Tank Farm Quality Specifications” has the meaning set forth in Exhibit K.

El Dorado Crude Tankage” means the tankage identified on Exhibit K-1.

El Dorado Delivery Lines” has the meaning set forth in Exhibit K.

El Dorado Loading Rack” means the Refined Products truck loading rack and the propane loading rack located at the El Dorado Refinery and more specifically described on Exhibit H-1.

El Dorado Minimum Working Capacity” has the meaning set forth in Exhibit K.

El Dorado Quality Specifications” means those specifications set forth in Exhibit K-2.

El Dorado Refinery” means the refinery owned by HollyFrontier El Dorado Refining LLC and located in El Dorado, Kansas.

El Dorado Tankage” means the tanks set forth on Exhibit H-2.

El Dorado Terminal” means the tank farm owned by HEP Operating and located in El Dorado, Kansas.

Environmental Law” has the meaning set forth in the Omnibus Agreement.

Excess Tariff Threshold” has the meaning set forth in Exhibit C.

FERC Oil Pipeline Index” has the meaning set forth in Section 3(a)(iii)(B).

Final Construction Cost” means the final aggregate construction cost of a New Tank, as contemplated by Exhibit H, Exhibit I and Exhibit J.

Force Majeure” has the meaning set forth in the Omnibus Agreement.

 

Exhibit A-4


Force Majeure Notice” has the meaning set forth in the Omnibus Agreement.

Gallon” means a United States gallon of two hundred thirty-one (231) cubic inches of liquid at sixty degrees (60°) Fahrenheit, and at the equivalent vapor pressure of the liquid.

Governmental Authority” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

Heavy Products” means fuel oil, asphalt, coker feed, vacuum tower bottoms, atmospheric tower bottoms, pitch or roofing flux.

HEP Operating” has the meaning set forth in the Preamble.

HEP Operating Payment Obligations” has the meaning set forth in Section 15.1.

HFRM” has the meaning set forth in the Preamble.

HFRM Payment Obligations” has the meaning set forth in Section 14.1.

High-API Oil Surcharge” has the meaning set forth in Section 2.4.

HollyFrontier” means HollyFrontier Corporation, a Delaware corporation.

HollyFrontier Navajo” means HollyFrontier Navajo Refining LLC.

HollyFrontier Tulsa” means HollyFrontier Tulsa Refining LLC.

Incentive Tariff” means the Incentive Tariff applicable to the quantity of Product transported, stored or loaded in connection with an Applicable Asset as set forth on Exhibit C, as such Incentive Tariff may be adjusted pursuant to the terms of this Agreement.

Intermediate Products” means non-finished intermediate products, including high sulfur diesel fuel for DHT feed, jet fuel, naphtha for reformer feed, gas oil or LEF for FCC feed, reformate, light straight run, hydrogen, fuel gas and sour fuel gas.

Jayhawk” means Jayhawk Pipeline, L.L.C. (or its successors to the Jayhawk Tankage).

Jayhawk Lease” means the lease between HEP-Operating and Jayhawk for the Jayhawk Tankage in existence as of the commencement of the Applicable Term.

Jayhawk Tankage” means the tankage identified in Exhibit K-1.

Lovington Loading Rack” means that certain asphalt loading rack located at the Navajo Refinery.

LPG Products” means propane, refinery grade propylene, normal butane and isobutane.

Malaga Capacity Estimate” has the meaning set forth in Exhibit G.

 

Exhibit A-5


Malaga Commencement Date” means the date on which, in the reasonable opinion of HEP Operating, the Malaga Pipeline System is available for service and operating as expected in delivering Crude Oil, which date has been specified in written notice from HEP Operating to HFRM at least 60 days prior to the Malaga Commencement Date; provided, however, that if the Malaga Pipeline System is, in the discretion of HEP Operating, substantially complete, then the parties may agree in writing to a commencement date prior to the Malaga Pipeline System being fully completed.

Malaga Construction Projects” has the meaning set forth in Exhibit G.

Malaga Exercise Notice” has the meaning set forth in Exhibit G.

Malaga Initial Period” means the period beginning on the Malaga Commencement Date through and including final day of the 20th full Contract Quarter following the Malaga Commencement Date.

Malaga Pipeline System” means the pipeline systems (a) extending from the (i) Whites City Road Station to the HEP Operating Artesia Station, from (ii) Devon Parkway field to the Millman Station and the HEP Operating Artesia Station, (iii) HEP Operating Artesia Station to the Beeson Station, (iv) the Beeson Station to the Anderson Ranch Pipeline, (v) Devon Hackberry field to the Beeson Station, and (v) Beeson Station to the Plains Pipeline, including in each case all related lease connection pipelines, storage facilities, crude oil gathering tanks, and truck off-loading facilities, and (b) with the volume capacities described on Exhibit G-1 (Construction Projects) and described on Exhibit G-2 (Devon Lease Connections).

MAPL Lease” means that certain Pipeline Lease Agreement, dated March 11, 1996, as amended by the Corrected Amendment to Pipeline Lease Agreement, effective as of October 11, 2005, by and between Mid-America Pipeline Company, LLC and HEP Pipeline, L.L.C., as may be further amended, modified or supplemented from time to time.

Master Lease and Access Agreement” means that certain Fifth Amended and Restated Master Lease and Access Agreement dated as of October 29, 2018 among certain of the Affiliates of HEP Operating and the owners of the Refineries, as the same may be amended from time to time.

Minimum Capacity Commitment” has the meaning set forth in Section 2.2(a).

Minimum Revenue Commitment” has the meaning set forth in Section 2.2(a).

Minimum Throughput Commitment” means the quantity of Product to be transported, stored or loaded in connection with an Applicable Asset, as set forth on Exhibit C, as such amount may be adjusted pursuant to the terms of this Agreement.

MSCFD” means thousands of standard cubic feet per day.

MVP Pipeline” has the meaning set forth in Exhibit K.

Navajo Refinery” means the refinery owned by HollyFrontier Navajo and located in Artesia, New Mexico and operated in conjunction with facilities located in Lovington, New Mexico.

New Tank” means the new petroleum products storage tankage to be added to the Applicable Assets as identified on Exhibits H and J.

New Tank Commencement Date” means, with respect to each New Tank, the first day of the calendar month after the date on which, in the reasonable opinion of HEP Operating, such New Tank is mechanically complete, available for service and operating as expected in storing the Product for which such New Tank was designed, which date has been specified in written notice from HEP Operating to HFRM at least 30 days prior to such date.

 

Exhibit A-6


Omnibus Agreement” means the Nineteenth Amended and Restated Omnibus Agreement dated October 29, 2018, as the same may be amended from time to time.

OPEX Reimbursement Amount” has the meaning set forth in Exhibit L-2.

Original Master Throughput Agreement” has the meaning set forth in the Recitals.

Orla Truck Terminal” means a truck terminal in Orla, Texas to be constructed by HEP Fin-Tex/Trust-River, L.P., consisting primarily of a truck rack with three loading bays and a tank with shell capacity of approximately 50,000 barrels, which will be connected to the Artesia-Orla Pipeline, as further described in Exhibit M.

Orla Commencement Date” means the date on which, in the reasonable opinion of HEP Operating, the Orla Truck Terminal is available for service and operating as expected in delivering refined product, which date has been specified in written notice from HEP Operating to HFRM at least 60 days prior to the Orla Commencement Date; provided, however, that if the Orla Truck Terminal is, in the discretion of HEP Operating, substantially complete, then the parties may agree in writing to a commencement date prior to the Orla Truck Terminal being fully completed.

Osage Pipeline” has the meaning set forth in Exhibit K.

Parties” has the meaning set forth in the Preamble.

Partnership” means Holly Energy Partners, L.P., a Delaware limited partnership.

Party” has the meaning set forth in the Preamble.

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

Pipelines” means the Malaga Pipeline System, Roadrunner Pipeline, the Tulsa Pipelines, the Tulsa Interconnecting Pipelines, the Refined Products Pipelines, the Cushing Connect Pipeline and the El Dorado Delivery Lines, and any other pipeline included in the Applicable Assets.

Plains Pipeline” means that certain 16” diameter pipeline operated by Plains All American Pipeline, L. P. and located in Lea County, New Mexico and which crosses the HEP Anderson Ranch gathering system in Township 18 South, Range 32 East.

Pony Express Pipeline” has the meaning set forth in Exhibit K.

Previous Amended and Restated Master Throughput Agreement” has the meaning set forth in the Recitals.

Prime Rate” means the prime rate per annum announced by Union Bank, N.A., or if Union Bank, N.A. no longer announces a prime rate for any reason, the prime rate per annum announced by the largest U.S. bank measured by deposits from time to time as its base rate on corporate loans, automatically fluctuating upward or downward with each announcement of such prime rate.

 

Exhibit A-7


Prior Agreements” means those agreements set forth in Recitals A through F. For the avoidance of doubt, “Prior Agreements” do not include the following agreements (as amended, modified or supplemented and in effect from time to time): (a) Amended and Restated Intermediate Pipelines Agreement dated June 1, 2009, (b) Tulsa Equipment and Throughput Agreement dated August 1, 2009, (c) Second Amended and Restated Refined Product Pipelines and Terminals Agreement dated effective February 22, 2016, (d) Second Amended and Restated Throughput Agreement effective June 1, 2013, (e) Third Amended and Restated Crude Pipelines and Tankage Agreement dated March 12, 2015 and (f) Amended and Restated Unloading and Blending Services Agreement (Artesia) dated January 18, 2017.

Products” has the meaning set forth in Exhibit C.

Qualified Third-Party Throughput” has the meaning set forth in Exhibit C.

Refined Products” means gasoline, kerosene, ethanol, diesel fuel, jet fuel, heating oil, distillates, transmix, liquefied petroleum gas, natural gas liquids and blend stocks.

Refined Products Pipelines” means, collectively, (a) the South System, (b) the Artesia Moriarty Pipeline and (c) the Artesia Bloomfield Pipeline.

Refined Products Terminals” means the terminals described on Exhibit N-2 attached hereto, as such Exhibit may be amended or revised from time-to-time by mutual agreement of HFRM and HEP Operating.

Refineries” means the Navajo Refinery; the El Dorado Refinery; the Cheyenne Refinery; the Tulsa East Refinery and the Tulsa West Refinery.

Roadrunner Pipeline” means that certain 16” crude oil pipeline extending approximately 65 miles from the Slaughter station to Lovington, New Mexico.

Rose Rock Pipeline” has the meaning set forth in Exhibit K.

South System” means the refined products pipelines described on Exhibit N-1 attached hereto, as such Exhibit may be amended or revised from time-to-time by mutual agreement of HFRM and HEP Operating.

Subsequent Year” has the meaning set forth in Exhibit G.

Subsidiary” means with respect to any Person (the “Owner”), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interest having such power only upon the happening of a contingency that has not occurred), are held by the Owner or one or more of its Subsidiaries.

Successor Term” has the meaning set forth in Exhibit O-1.

Surcharge Tariff” has the meaning set forth in Exhibit C.

SUS” means Saybolt Universal Seconds as specified by ASTM Standard D2161-10, as amended, supplemented or replaced from time to time.

 

Exhibit A-8


Tulsa Assets” means the Tulsa Group 1 Tankage, Tulsa Group 1 Loading Rack, Tulsa Group 1 Pipeline, Tulsa Group 2 Tankage, Tulsa Group 2 Loading Rack and the Tulsa Interconnecting Pipelines.

Tulsa East Refinery” means the refinery owned by HollyFrontier Tulsa and located at 905 West 25th Street, Tulsa, Oklahoma 74107.

Tulsa Group 1 Purchase Agreement” means that certain Asset Sale and Purchase Agreement dated as of October 1, 2009 by and among HollyFrontier Tulsa, HEP Tulsa LLC and Holly Energy Storage – Tulsa.

Tulsa Group 1 Loading Rack” means the gas oil, asphalt and propane truck loading racks located at the Tulsa West Refinery and more specifically described in Exhibit J-1 attached hereto.

Tulsa Group 1 Tankage” means the tankage identified in Exhibit J-3 attached hereto.

Tulsa Group 2 Purchase Agreement” means that certain LLC Interest Purchase Agreement dated as of March 31, 2010 by and between HEP Tulsa LLC, Lea Refining Company, and HollyFrontier Tulsa.

Tulsa Group 2 Tankage” means the tankage identified in Exhibit J-5.

Tulsa Group 2 Loading Rack” means the rail loading rack located at the Tulsa West Refinery and more specifically described in Exhibit J-4.

Tulsa Interconnecting Pipelines” means the following pipelines between the Tulsa East Refinery and the Tulsa West Refinery: 1) the 12 inch raw gas oil/diesel line (the “Distillate Interconnecting Pipeline”), 2) the 12 inch naphtha/gasoline component line (the “Gasoline Interconnecting Pipeline”), 3) the 12 inch refinery fuel gas line (the “Refinery Fuel Gas Interconnecting Pipeline”), 4) the 8 inch hydrogen line (the “Hydrogen Interconnecting Pipeline”), and 5) the 10 inch refinery sour fuel gas line (the “Refinery Sour Fuel Gas Interconnecting Pipeline”) including delivery facilities from the Tulsa West Refinery and receipt facilities at the Tulsa East Refinery for the Distillate and Gasoline Interconnecting Pipelines, but not for the Refinery Fuel Gas, Hydrogen, and Refinery Sour Fuel Gas Interconnecting Pipelines.

Tulsa Group 1 Pipeline” means those two (2) product delivery lines extending from the Group 1 Tankage to interconnection points with the Magellan pipeline as more specifically described in Exhibit J-2 attached hereto.

Tulsa Purchase Agreements” means the Tulsa Group 1 Purchase Agreement and the Tulsa Group 2 Purchase Agreement.

Tulsa West Refinery” means the refinery owned by HollyFrontier Tulsa located at 1700 S. Union, Tulsa, Oklahoma 74107.

Tulsa West Tankage” means the tankage identified in Exhibit L-1.

Woods Cross Refinery” means the refinery owned and operated by HollyFrontier Woods Cross Refining LLC located at 1070 W. 500 South, West Bountiful, Utah.

Working Capacity” has the meaning set forth in Exhibit K.

 

Exhibit A-9


Exhibit B

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Interpretation

As used in this Agreement, unless a clear contrary intention appears:

(a) any reference to the singular includes the plural and vice versa, any reference to natural persons includes legal persons and vice versa, and any reference to a gender includes the other gender;

(b) the words “hereof”, “herein”, and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;

(c) any reference to Articles, Sections and Exhibits are, unless otherwise stated, references to Articles, Sections and Exhibits of or to this Agreement and references in any Section or definition to any clause means such clause of such Section or definition. The headings in this Agreement have been inserted for convenience only and shall not be taken into account in its interpretation;

(d) reference to any agreement (including this Agreement), document or instrument means such agreement, document, or instrument as amended, modified or supplemented and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of this Agreement;

(e) the Exhibits hereto form an integral part of this Agreement and are equally binding therewith. Any reference to “this Agreement” shall include such Exhibits;

(f) references to a Person shall include any permitted assignee or successor to such Party in accordance with this Agreement and reference to a Person in a particular capacity excludes such Person in any other capacity;

(g) if any period is referred to in this Agreement by way of reference to a number of days, the days shall be calculated exclusively of the first and inclusively of the last day unless the last day falls on a day that is not a Business Day in which case the last day shall be the next succeeding Business Day;

(h) the use of “or” is not intended to be exclusive unless explicitly indicated otherwise;

(i) references to “$” or to “dollars” shall mean the lawful currency of the United States of America; and

(j) the words “includes,” “including,” or any derivation thereof shall mean “including without limitation” or “including, but not limited to.”

 

Exhibit B-1


Exhibit C

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Applicable Assets, Product, Minimum Capacity Commitment, Tariffs, Tariff Adjustments and Applicable Terms*

 

Applicable
Assets

   Type of
Applicable
Asset
   Product    Minimum
Capacity
Commitment
(aggregate
capacity
unless
otherwise
noted)
   Minimum
Throughput
Commitment
(in the
aggregate,
on average,
for each
Contract
Quarter)
   Base Tariff
(applicable
to all
movements
below the
Incentive
Tariff
Threshold)
   Incentive
Tariff
Threshold
(in the
aggregate,
on average,
for each
Contract
Quarter)
   Incentive
Tariff
(applicable
to all
movements
at or above
the
Incentive
Tariff
Threshold)
   Excess
Tariff
(applicable
to all
movements
above the
Excess
Tariff
Thresholds
set forth
below, if
any)
     Tariff
Adjustment
   Tariff
Adjustment
Minimum/
Cap
     Tariff
Adjustment
Commencement
Date
   Assumed
OPEX
    

Applicable Term

(all times are
Dallas, TX time)

Malaga Pipeline System    Pipelines    Crude Oil    40,000 bpd1    40,000 bpd2    $0.5822/bbl2    40,000 bpd2    $0.3423/bbl      —        FERC
Adjustment
     —        July 1, 2015      —        12:01 a.m. on June 1, 2013 to Sept. 1, 2024 (the “Malaga Commencement Date”)

 

*

Tariffs listed on this Exhibit are effective as of July 1, 2019, except for tariffs for the Cushing Connect Pipeline, which are effective as of the Cushing Connect Commencement Date.

1 

As may be adjusted pursuant to Exhibit G.

2 

During the first five years of the Applicable Term, following the Malaga Commencement Date, HFRM shall pay HEP Operating an extra surcharge per barrel (the “Surcharge Tariff”). The Surcharge Tariff for each Contract Quarter is equal to (Actual Construction Costs – $38,500,000)/(Minimum Pipeline Throughput x 365 x 5) where “Actual Construction Costs” means the actual, reasonable and necessary costs, or as otherwise approved in writing by HFRM, incurred by HEP Operating to construct the Malaga Construction Projects and the Devon Lease Connections; provided, however, that the numerator of the formula for calculating the Surcharge Tariff (Actual Construction Costs – $38,500,000) shall not exceed $13,500,000 such that the maximum value for such numerator shall be $13,500,000. At the end of each Contract Quarter during the first five years of the Applicable Term, following the Malaga Commencement Date, HFRM shall pay HEP Operating an amount for each Contract Quarter determined by multiplying the Minimum Throughput Commitment for the Malaga Pipeline System for such Contract Quarter, by the Surcharge Tariff. The Surcharge Tariff is in addition to the Applicable Tariff to be paid by HFRM.

 

Exhibit C-1


Applicable
Assets

   Type of
Applicable
Asset
   Product    Minimum
Capacity
Commitment
(aggregate
capacity
unless
otherwise
noted)
   Minimum
Throughput
Commitment
(in the
aggregate,
on average,
for each
Contract
Quarter)
   Base Tariff
(applicable
to all
movements
below the
Incentive
Tariff
Threshold)
    Incentive
Tariff
Threshold
(in the
aggregate,
on average,
for each
Contract
Quarter)
     Incentive
Tariff
(applicable
to all
movements
at or above
the
Incentive
Tariff
Threshold)
     Excess
Tariff
(applicable
to all
movements
above the
Excess
Tariff
Thresholds
set forth
below, if
any)
     Tariff
Adjustment
   Tariff
Adjustment
Minimum/
Cap
    Tariff
Adjustment
Commencement
Date
   Assumed
OPEX
    

Applicable Term

(all times are
Dallas, TX time)

El Dorado Assets    Pipelines    Refined
Products

 

LPG
Products,

 

Intermediate
Products

 

Heavy
Products

   120,000
bpd of
aggregate
delivery
capacity
from the
Tankage
   120,000 bpd
of
Intermediate
and Refined
Product
   $ 0.1724/bbl      



125,000 bpd
of
Intermediate
and Refined
Product
 
 
 
 
 
   $ 0.0106/bbl        —        PPI
Adjustment
    





3% in any
calendar
year
(applicable
to each
individual
tariff)
 
 
 
 
 
 
 
  July 1, 2012      —        12:01 a.m. on Nov. 1, 2011 to 12:01 a.m. on Oct. 31, 2026; provided that with respect to the New Tank at the El Dorado Refinery, the Applicable Term shall be from 12:01 a.m. on the New Tank Commencement Date for such New Tank to the date occurring fifteen (15) years thereafter.
   Tankage       140,000
bpd of
aggregate
capacity in
the
Tankage
   140,000 bpd
of Products
   $ 0.5076/bbl 3,4     
154,000 bpd
of Products
 
 
   $ 0.2299/bbl        —                  
   Loading
Rack
      20,000 bpd    20,000 bpd    $ 0.2873/bbl       —          —          —                  

 

3 

From and after the New Tank Commencement Date established pursuant to Exhibit H, if any, the Tankage Base Tariff shall be increased by an amount per barrel equal to:

 

   Final Construction Cost   
   0.9 x 8.1928 x Minimum Tankage Throughput x 365   

For example, if the Final Construction Costs = $1,500,000, the per barrel increase in the Tankage Base Tariff would be calculated as follows: $1,500,000/(0.9 x 8.1928 x 140,000 x 365) = $0.0040.

 

4 

Reflects reduction in throughput fee effective January 1, 2015 as a result of the secondment arrangement at the El Dorado refinery. Also reflects reduction in throughput fee effective January 1, 2017 as a result of the sale of tanks 243 and 244 from El Dorado Logistics LLC to HollyFrontier El Dorado Refining LLC.

 

Exhibit C-2


Applicable
Assets

   Type of
Applicable
Asset
   Product    Minimum
Capacity
Commitment
(aggregate
capacity
unless
otherwise
noted)
   Minimum
Throughput
Commitment
(in the
aggregate,
on average,
for each
Contract
Quarter)
   Base Tariff
(applicable
to all
movements
below the
Incentive
Tariff
Threshold)
    Incentive
Tariff
Threshold
(in the
aggregate,
on
average,
for each
Contract
Quarter)
   Incentive
Tariff
(applicable
to all
movements
at or above
the
Incentive
Tariff
Threshold)
     Excess
Tariff
(applicable
to all
movements
above the
Excess
Tariff
Thresholds
set forth
below, if
any)
     Tariff
Adjustment
   Tariff
Adjustment
Minimum/
Cap
  Tariff
Adjustment
Commencement
Date
   Assumed
OPEX
    

Applicable Term

(all times are
Dallas, TX time)

Cheyenne Assets    Cheyenne
Receiving
Assets
   Crude Oil    41,000 bpd    46,000 bpd    $ 0.3449/bbl     50,600 bpd    $ 0.1610/bbl        —        PPI
Adjustment
   3% in any
calendar
year
(applicable
to each
individual
tariff)4
  July 1, 2012      —        12:01 a.m. on Nov. 1, 2011 to 12:01 a.m. on Oct. 31, 2026; provided that with respect to (a) Cheyenne New Tank No. 117, the Applicable Term shall be from 12:01 a.m. on December 4, 2014 to 12:01 a.m. on December 4, 2029, and (b) any New Tanks at the Cheyenne Refinery, the Applicable Term is 12:01 a.m. on the New Tank Commencement Date for each such New Tank to the date occurring fifteen (15) years thereafter.
   Cheyenne
Tankage
      46,000 bpd    41,000 bpd    $ 0.4957/bbl 3,5    45,100 bpd    $ 0.2299/bbl        —                  
   Cheyenne
Loading
Rack
         41,000 bpd    $ 0.2873/bbl     None      —          —                  

 

5 

Reflects reduction in throughput fee effective January 1, 2015 as a result of the secondment arrangement at the Cheyenne refinery.

 

Exhibit C-3


Applicable
Assets

   Type of
Applicable
Asset
   Product    Minimum
Capacity
Commitment
(aggregate
capacity
unless
otherwise
noted)
   Minimum
Throughput
Commitment
(in the
aggregate,
on average,
for each
Contract
Quarter)
   Base Tariff
(applicable
to all
movements
below the
Incentive
Tariff
Threshold)
     Incentive
Tariff
Threshold (in
the aggregate,
on average,
for each
Contract
Quarter)
     Incentive
Tariff
(applicable
to all
movements
at or above
the
Incentive
Tariff
Threshold)
     Excess
Tariff
(applicable
to all
movements
above the
Excess
Tariff
Thresholds
set forth
below, if
any)
    Tariff
Adjustment
   Tariff
Adjustment
Minimum/
Cap
  Tariff
Adjustment
Commencement
Date
   Assumed
OPEX
    

Applicable Term

(all times are
Dallas, TX time)

Tulsa East Assets    Tulsa
Pipelines
   Refined
Products
   60,000 bpd    60,000 bpd    $ 0.1183/bbl           —          —       PPI
Adjustment
   3% in any
calendar
year
(applicable
to each
individual
tariff)
  July 1, 2011      —        11:59 p.m. on Mar. 31, 2010 to 12:01 a.m. on Dec. 1, 2024
   Tulsa
Group 1

Tankage

   Various    1,362,550 bbls    80,000 bpd    $ 0.4201/bbl       








Each
throughput
barrel over the
Minimum
Throughput
Commitment
but less than
or equal to the
Excess Tariff
Threshold
 
 
 
 
 
 
 
 
 
 
   $ 0.1183/bbl       










$0.2605/bbl
(over
120,000
bpd of
Refined
Products,
in the
aggregate
on average
for each
Contract
Quarter)
 
 
 
 
 
 
 
 
 
 
 
 
            
   Tulsa
Group 1

Loading
Rack

   Various    26,000 bpd    26,000 bpd    $ 0.3551/bbl        —          —          —                 
   Tulsa
Group 2

Tankage

   Various    2,122,644 bbl    90,000 bpd    $ 0.4885/bbl       








Each
throughput
barrel over the
Minimum
Throughput
Commitment
but less than
or equal to the
Excess Tariff
Threshold
 
 
 
 
 
 
 
 
 
 
   $ 0.1183/bbl       










$0.2605/bbl
(over
120,000
bpd of
Refined
Products,
in the
aggregate
on average
for each
Contract
Quarter)
 
 
 
 
 
 
 
 
 
 
 
 
            
   Tulsa
Group 2

Loading
Rack

      1,800 bpd    1,800 bpd    $ 0.4144/bbl        —          —          —                 

 

Exhibit C-4


Applicable
Assets

   Type of
Applicable
Asset
  Product    Minimum
Capacity
Commitment
(aggregate
capacity unless
otherwise
noted)
  Minimum
Throughput
Commitment
(in the
aggregate, on
average, for
each Contract
Quarter)
   Base Tariff
(applicable
to all
movements
below the
Incentive
Tariff
Threshold)
    Incentive
Tariff
Threshold
(in the
aggregate,
on average,
for each
Contract
Quarter)
     Incentive
Tariff
(applicable
to all
movements
at or above
the
Incentive
Tariff
Threshold)
     Excess
Tariff
(applicable
to all
movements
above the
Excess
Tariff
Thresholds
set forth
below, if
any)
    Tariff
Adjustment
   Tariff
Adjustment
Minimum/
Cap
   Tariff
Adjustment
Commencement
Date
   Assumed
OPEX
    

Applicable Term

(all times are
Dallas, TX time)

   Tulsa
Interconnecting
Pipelines6
     Distillate
Interconnecting
Pipeline –
45,000 bpd
(maximum)
  45,000 bpd     






$0.2405/bbl
(to 45,000
bpd in the
aggregate,
on average
for each
Contract
Quarter)
 
 
 
 
 
 
 
 
   



Over 45,000
bpd and less
than or
equal to
65,000 bpd
 
 
 
 
 
     $0.0804/bbl       









$0.0574/bbl
(over
65,000 bpd
of Refined
Products,
in the
aggregate
on average
for each
Contract
Quarter)
 
 
 
 
 
 
 
 
 
 
 
             
        Gasoline
Interconnecting
Pipeline –
45,000 bpd
(maximum)
  45,000 bpd of
Intermediate
Products
shipped
between the
Tulsa East
Refinery and
the Tulsa West
Refinery via
the
Interconnecting
Pipelines
(excluding the
Distillate
Interconnecting
Pipeline and
the Tulsa
Pipelines
                        
        Hydrogen
Interconnecting
Pipeline –
10,000
MSCFD of
hydrogen
(maximum)
  64,000
MSCFD
    
$0.0735/
MSCF/day
 
 
    —          —          —                  

 

6 

The Minimum Interconnecting Pipeline Revenue Commitment shall be an amount of revenue to HEP Operating for each Contract Quarter determined by adding: 1) the Minimum Interconnecting Pipeline Liquid Throughput multiplied by the Interconnecting Pipeline Liquid Tariff, and 2) the Minimum Interconnecting Pipeline Gas Throughput multiplied by the Interconnecting Pipeline Gas Tariff.

 

Exhibit C-5


Applicable
Assets

   Type of
Applicable
Asset
   Product    Minimum
Capacity
Commitment
(aggregate
capacity unless
otherwise
noted)
  Minimum
Throughput
Commitment
(in the
aggregate,
on average,
for each
Contract
Quarter)
   Base Tariff
(applicable
to all
movements
below the
Incentive
Tariff
Threshold)
     Incentive
Tariff
Threshold
(in the
aggregate,
on
average,
for each
Contract
Quarter)
   Incentive
Tariff
(applicable
to all
movements
at or above
the
Incentive
Tariff
Threshold)
     Excess
Tariff
(applicable
to all
movements
above the
Excess
Tariff
Thresholds
set forth
below, if
any)
     Tariff
Adjustment
  Tariff
Adjustment
Minimum/
Cap
  Tariff
Adjustment
Commencement
Date
   Assumed
OPEX
    

Applicable Term

(all times are
Dallas, TX time)

         Refinery Fuel
Gas

Interconnecting
Pipeline –
32,000
MSCFD of
refinery fuel
gas
(maximum)

                          
         Refinery Sour
Fuel Gas
Interconnecting
Pipeline –
22,000
MSCFD of
refinery sour
fuel gas
(maximum)
                          
Lovington Assets    Lovington
Loading
Rack
   Asphalt
and any
other
petroleum
or
petroleum
based or
derived
products
   4,000 bpd   4,000 bpd      $0.4144/bbl           —          —        PPI
Adjustment4
  3% in any
calendar
year
  July 1, 2011      —        11:59 p.m. on Mar. 31, 2010 to 12:01 a.m. on Mar. 31, 2025

 

Exhibit C-6


Applicable
Assets

   Type of
Applicable
Asset
   Product    Minimum
Capacity
Commitment
(aggregate
capacity
unless
otherwise
noted)
     Minimum
Throughput
Commitment
(in the
aggregate,
on average,
for each
Contract
Quarter)
    Base Tariff
(applicable
to all
movements
below the
Incentive
Tariff
Threshold)
     Incentive
Tariff
Threshold
(in the
aggregate,
on average,
for each
Contract
Quarter)
     Incentive
Tariff
(applicable
to all
movements
at or above
the
Incentive
Tariff
Threshold)
    Excess
Tariff
(applicable
to all
movements
above the
Excess
Tariff
Thresholds
set forth
below, if
any)
     Tariff
Adjustment
   Tariff
Adjustment
Minimum/
Cap
  Tariff
Adjustment
Commencement
Date
   Assumed
OPEX
    

Applicable Term

(all times are
Dallas, TX time)

Roadrunner Assets    Pipelines    Crude Oil      40,000 bpd         40,000 bpd7     $ 0.7621/bbl       





Each
throughput
barrel over
the
Minimum
Throughput
Commitment
 
 
 
 
 
 
 
   $ 0.3991/bbl 8      —        PPI
Adjustment
   3% plus 12
of the PPI
increase in
excess of
3% for such
calendar
year.
  July 1, 2011      —        12:01 a.m. on Dec. 1, 2009 to 12:01 a.m. on Dec. 1, 2024
El Dorado Crude Tankage    Tankage    Crude Oil;
Intermediate
Products
     140,000 bpd        140,000 bpd     $ 0.1017/bbl       





Each
throughput
barrel over
the
Minimum
Throughput
Commitment
 
 
 
 
 
 
 
   $ 0.0107/bbl       —        PPI
Adjustment
   Subject
to 1%
minimum
/3% cap9
  July 1, 2016      —        12:01 a.m. on March 6, 2015 to 12:01 a.m. on March 6, 2025
El Dorado Connector Pipeline10    Pipelines    Crude Oil;
Intermediate
Products
     —          —       $ 0.0824/bbl        —          —         —        PPI
Adjustment
   Subject
to 1%
minimum
/3% cap9
  July 1, 2019      —        12:01 a.m. on January 1, 2018 to 12:01 a.m. on March 6, 2025.

 

7 

In the event that any third party transports Crude Oil on the Roadrunner Pipeline for ultimate delivery to HollyFrontier or any of its Subsidiaries and such third party pays throughput fees equal to or greater than the then-current base tariff for each such barrel of Crude Oil transported on the Roadrunner Pipeline for ultimate delivery to HollyFrontier or any of its Subsidiaries (“Qualified Third-Party Throughput”), then revenues paid to HEP Operating by such third party for such Qualified Third-Party Throughput shall be credited towards the Minimum Revenue Commitment hereunder for the Roadrunner Pipeline.

8 

If the average throughput for any Contract Quarter (including Qualified Third-Party Throughput) exceeds the Minimum Pipeline Throughput attributable to such Contract Quarter, then for each throughput barrel in excess of the Minimum Pipeline Throughput, HFRM shall pay HEP Operating throughput fees in the amount of the Pipeline Incentive Tariff.

9 

For the avoidance of doubt, if the change in PPI in any year is less than one percent (1%) it will be rounded up to one percent (1%) and if the change in PPI in any year is greater than three percent (3%) it will be rounded down to three percent (3%).

10 

See the definition of “Applicable Asset” in this Agreement.

 

Exhibit C-7


Applicable
Assets

   Type of
Applicable
Asset
   Product    Minimum
Capacity
Commitment
(aggregate
capacity
unless
otherwise
noted)
   Minimum
Throughput
Commitment
(in the
aggregate,
on average,
for each
Contract
Quarter)
   Base Tariff
(applicable to
all
movements
below the
Incentive
Tariff
Threshold)
   Incentive
Tariff
Threshold
(in the
aggregate,
on average,
for each
Contract
Quarter)
     Incentive
Tariff
(applicable to
all
movements
at or above
the Incentive
Tariff
Threshold)
     Excess
Tariff
(applicable
to all
movements
above the
Excess
Tariff
Thresholds
set forth
below, if
any)
     Tariff
Adjustment
   Tariff
Adjustment
Minimum/
Cap
    Tariff
Adjustment
Commencement
Date
   Assumed
OPEX
    

Applicable Term

(all times are
Dallas, TX time)

Tulsa West Tankage    Tankage    Crude/
Lef
   396,000
bpd
   80,000 bpd    $0.2296/bbl      —          —          —        PPI
Adjustment
    



Subject
to 1%
minimum
/ 3%
cap9
 
 
 
 
 
  July 1, 2017    $ 2,751,331      12:01 a.m. on March 31, 2016 to 12:01 a.m. on March 31, 2026
Catoosa Lubes Terminal    Tankage    Various    5,754,000
gallons/
month
   444,500
gallons/
month
   $0.2472/gallon      —          —          —        PPI
Adjustment
    



Subject
to 1%
minimum
/ 3%
cap9
 
 
 
 
 
  July 1, 2019      —        12:01 a.m. on June 1, 2018 to 12:01 a.m. on May 31, 2028
Orla Truck Terminal    Tankage
and Truck
Rack
   Refined
Product
   20,000 bpd    420,000
gallons/
day
   $0.0139/gallon     





Each
throughput
barrel over
the
Minimum
Throughput
Commitment
 
 
 
 
 
 
 
     $0.0070/gallon        —        PPI
Adjustment
    



Subject
to 1%
minimum
/ 3%
cap9
 
 
 
 
 
  July 1, 2019      —        12:01 a.m. on the Orla Commencement Date to the date occurring ten (10) years thereafter.
Refined Products Pipelines    South
System
   Refined
Product
   58,000 bpd    58,000 bpd    $1.9861/bbl      50,000 bpd        $1.2805/bbl        —        PPI
Adjustment
     —       July 1, 2020      —        12:01 a.m. on July 1, 2019 to 12:01 a.m. on July 1, 2029
   Artesia
Moriarty
   Refined
Product
   10,000 bpd    10,000 bpd    $1.9861/bbl      17,000 bpd        $1.2805/bbl        —        PPI
Adjustment
     —       July 1, 2020      —        12:01 a.m. on July 1, 2019 to 12:01 a.m. on July 1, 2029
   Artesia
Bloomfield
   Refined
Product
   3,000 bpd    3,000 bpd    $2.0563/bbl      —          —          —        PPI
Adjustment
     —       July 1, 2020      —        12:01 a.m. on July 1, 2019 to 12:01 a.m. on July 1, 2029

 

Exhibit C-8


Applicable
Assets

   Type of
Applicable
Asset
   Product    Minimum
Capacity
Commitment
(aggregate
capacity
unless
otherwise
noted)
   Minimum
Throughput
Commitment
(in the
aggregate,
on average,
for each
Contract
Quarter)
   Base Tariff
(applicable
to all
movements
below the
Incentive
Tariff
Threshold)
     Incentive
Tariff
Threshold
(in the
aggregate,
on average,
for each
Contract
Quarter)
   Incentive
Tariff
(applicable
to all
movements
at or above
the
Incentive
Tariff
Threshold)
     Excess
Tariff
(applicable
to all
movements
above the
Excess
Tariff
Thresholds
set forth
below, if
any)
     Tariff
Adjustment
   Tariff
Adjustment
Minimum/
Cap
  Tariff
Adjustment
Commencement
Date
   Assumed
OPEX
    

Applicable Term

(all times are
Dallas, TX time)

Cushing Connect Pipeline    Pipeline    Crude Oil    100,000 bpd    100,000 bpd    $ 0.36/bbl      Each
throughput
barrel over
the
Minimum
Throughput
Commitment
   $ 0.08/bbl        —        PPI
Adjustment
   Subject
to 0%
minimum
/ 2%
cap9
  July 1, 2021      —        12:01 a.m. on the Cushing Connect Commencement Date to 12:01 am on March 31, 2036, subject to automatic renewal provisions set forth on Exhibit O-1.

 

Exhibit C-9


Applicable Tariff Adjustments

FERC Adjustment:

Each Applicable Tariff shall be adjusted on July 1 of each index year during the Applicable Term by an amount equal to the percentage change, if any, between the two (2) immediately preceding index years, in the Federal Energy Regulation Commission Oil Pipeline Index (the “FERC Oil Pipeline Index”); provided, however, that if the percentage change, if any, between the two (2) immediately preceding index years in the FERC Oil Pipeline Index is negative, then there will be no change to the Applicable Tariffs.

PPI Adjustment:

Each Applicable Tariff shall be adjusted on July 1 of each calendar year by an amount equal to the upper change in the annual change rounded to four decimal places of the Producers Price Index-Commodities-Finished Goods, (PPI), et al. (“PPI”), produced by the U.S. Department of Labor, Bureaus of Labor Statistics. The series ID is WPUFD49207 as of June 1, 2016 – located at http://www.bls.gov/data/. The change factor shall be calculated as follows: annual PPI index (most current year) less annual PPI index (most current year minus 1) divided by annual PPI index (most current year minus 1). An example for year 2014 change is: [PPI (2013) – PPI (2012)] / PPI (2012) or (197.3 – 193.3) / 193.3 or .021 or 2.1%. If the PPI index change is negative in a given year then there will be no change in the tariff unless the tariff is subject to a minimum increase as defined elsewhere in Exhibit C.

Index no longer Published

If the either index is no longer published, the Parties shall negotiate in good faith to agree on a new index (as applicable) that gives comparable protection against inflation or deflation, and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the tariffs. If the Parties are unable to agree, a new index will be determined in accordance with the dispute resolution provisions set forth in the Omnibus Agreement, and the same method of adjustment for increases or decreases in the new index shall be used to calculate increases or decreases in the tariffs.

 

Exhibit C-10


Exhibit D

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Measurement of Shipped Volumes

 

Applicable Asset

  

Type of Applicable Asset

  

Measurement of Volumes

Malaga Pipeline System    Pipelines   

Quantities shipped on the Malaga Pipeline System shall be determined by measuring unique barrels of Crude Oil (either by counting barrels or calculating barrels based on available meter data) shipped on the following origin and destination pairings:

 

Whites City Road Station to HEP Artesia Station

Whites City Road Station to Beeson Station

Whites City Road Station to Plains Pipeline Bisti Connection

HEP Artesia Station to Beeson Station

HEP Artesia Station to Plains Pipeline Bisti Connection

Beeson Station to Plains Pipeline Bisti Connection

 

The origin and destination pairings listed above utilize the following segments of the Pipeline System:

 

Whites City Road Station to HEP Artesia Station (8-inch)

HEP Artesia Station to Beeson Station (8-inch)

Beeson Station to Plains Pipeline Bisti Connection (12-inch)

 

Shipments on any other segments of the Malaga Pipeline System will be charged the then-current tariff and fees under the Crude Agreement.

 

For the avoidance of doubt, a barrel shipped on multiple segments of the Malaga Pipeline System shall only be counted as one barrel in satisfaction of the Minimum Throughput Commitment and shall not count as a separate barrel on each such segment. For example, a barrel shipped from Whites City Road Station to the Plains Pipeline Bisti Connection shall count as one barrel in satisfaction of the Minimum Throughput Commitment, and not as three barrels since it flows on three segments of the Malaga Pipeline System.

El Dorado Assets    Pipelines    Pipeline delivery throughput shall be determined by the shipments of Products by pipeline (and not over the Loading Racks) from the El Dorado Refinery.
   Tankage    Tankage throughput shall be determined by the sum of Products shipped from the El Dorado Refinery but not including shipments of coke and sulfur. For the avoidance of doubt, no Tankage throughput fees shall be paid for movements of Products within the El Dorado Refinery.
   Loading Rack    The Loading Rack Tariff will be paid for all quantities of Products or other materials loaded at the Loading Racks or the asphalt loading rack and any Products or other materials shipped using the weight scales.
Cheyenne Assets    Cheyenne Receiving Assets    Crude Oil throughput shall be determined by the total shipments of Crude Oil by pipeline, truck and rail received at the Cheyenne Refinery.
   Cheyenne Tankage    Tankage throughput shall be determined by the sum of Products shipped by the Refinery but not including shipments of coke and sulfur. For the avoidance of doubt, no Tankage throughput fees shall be paid for movements of Products within the Cheyenne Refinery.

 

Exhibit D-1


Applicable Asset

  

Type of Applicable Asset

  

Measurement of Volumes

   Cheyenne Loading Rack    The Applicable Tariff for the Loading Rack will be paid for (A) all quantities of Products shipped out of the Cheyenne Refinery by pipeline or asphalt loading racks, and (B) all quantities of Products, Crude Oil and any other materials (such as coke and sulfur) loaded at the Loading Racks or the weight scales.
Tulsa East Assets    Pipelines    Pipeline throughput will be determined by the quantities of Refined Product shipped on the Tulsa Pipelines.
   Group 1 Tankage    Group 1 Tankage throughput shall be determined by the sum of Refined Products shipped on the Pipelines and loaded at the Group 1 Loading Rack. Any streams moved internally within the Tulsa East Refinery will not be included in determining the volumes for any Minimum Revenue Commitment for the Group 1 Tankage.11
   Group 1 Loading Rack    The Group 1 Loading Rack Tariff will be paid for all quantities of Products loaded at the Group 1 Loading Rack.
   Group 2 Tankage    Group 2 Tankage throughput shall be determined by the sum of pipeline and truck quantities of Crude Oil and Intermediate Products received at the Tulsa East Refinery, including Crude Oil and Intermediate Products received at the Tulsa East Refinery from the Tulsa West Refinery. Any streams moved internally within the Tulsa East Refinery will not be included in determining the volumes for any Minimum Revenue Commitment for the Group 2 Tankage. Any Refined Products received from the Tulsa West Refinery or moved out of the Tulsa East Refinery will not be included in determining the volumes for the Minimum Revenue Commitment for the Group 2 Tankage.11
   Group 2 Loading Rack    The Group 2 Loading Rack Tariff will be paid for all quantities of Products loaded at the Group 2 Loading Rack.
   Interconnecting Pipelines   

The Interconnecting Pipeline Gas Throughput shall be determined by the sum of pipeline quantities of Intermediate Products shipped between the Tulsa East Refinery and the Tulsa West Refinery via the Hydrogen Interconnecting Pipeline, Refinery Fuel Gas Interconnecting Pipeline, and Refinery Sour Fuel Gas Interconnecting Pipeline.

 

The Interconnecting Pipeline Liquid Throughput shall be determined by the sum of pipeline quantities of Intermediate Products shipped between the Tulsa East Refinery and the Tulsa West Refinery via the Gasoline Interconnecting Pipeline and Distillate Interconnecting Pipeline.

Lovington Assets    Loading Rack    The Loading Rack Tariff will be paid for all quantities of Products loaded at the Lovington Loading Rack.
Roadrunner Assets    N/A    N/A
El Dorado Crude Tankage    Tankage    El Dorado Tankage throughput shall be determined by the sum of the pipeline quantities of Product received at the El Dorado Crude Tankage, based on custody transfer meters. For avoidance of doubt, no throughput fees shall be paid for movements of Products among the El Dorado Crude Tankage.
El Dorado Connector Pipeline12    Pipelines    El Dorado Connector Pipeline throughput shall be determined by the sum of the pipeline quantities of Product shipped from the Pony Express Pipeline to the El Dorado Crude Tankage via the El Dorado Connector Pipeline, based on measurement tickets from the meter owned by the Pony Express Pipeline and located upstream of the custody transfer flange.
Tulsa West Tankage    Tankage    Tulsa West Tankage throughput shall be determined by barrels of crude/lef deliveries at the following meters at the Tulsa West Refinery: #1387, #175, #176, #177, #178, #179, #180, #334, #1373 and #809.
Catoosa Lubes Terminal    Tankage    Catoosa Lubes Terminal throughput shall be determined by the sum of the products received by rail or truck at the Catoosa Lubes Terminal.

 

11 

For the avoidance of doubt, any high sulfur diesel fuel that HFRM may transport from the Tulsa West Refinery through the Group 1 Tankage or Group 2 Tankage for processing in the Tulsa East Refinery’s distillate hydrotreater shall be subject to the Group 2 Tankage Applicable Tariffs, and the resulting ultra low sulfur diesel fuel produced from the high sulfur diesel fuel and then shipped from the Tulsa East Refinery via either the Tulsa Pipelines or the loading rack located at the Tulsa East Refinery shall be subject to the applicable Group 1 Tankage Applicable Tariffs.

12 

See the definition of “Applicable Asset” in this Agreement.

 

Exhibit D-2


Applicable Asset

  

Type of Applicable Asset

  

Measurement of Volumes

Orla Truck Terminal    Tankage    Orla Truck Terminal throughput shall be determined by the sum of the pipeline quantities of Product received at the Orla Truck Terminal, based on custody transfer meters.
Refined Products Pipelines    Pipelines    Pipeline throughput will be determined by the quantities of Refined Product shipped on the Refined Products Pipelines.
Refined Products Terminals    Tankage and Truck Racks    Refined Products Terminals throughput shall be determined by the sum of the pipeline quantities of Refined Product received at each Refined Products Terminal, based on custody transfer meters, plus the sum of the volumes of ethanol and biodiesel received at the Refined Products Terminals by rail or truck.
Cushing Connect Pipeline    Pipeline    Cushing Connect Pipeline throughput shall be determined by the sum of pipeline quantities of Crude Oil received at the Tulsa East Refinery and Tulsa West Refinery.

 

Exhibit D-3


Exhibit E

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Volumetric Gains; Losses; Line Fill; High-API Oil Surcharge

 

Applicable Assets

  

Volumetric Gains and Losses

  

Line Fill

  

High-API Oil Surcharge

Malaga Pipeline System    HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Malaga Pipeline System, and (ii) be responsible for all volumetric losses in the Malaga Pipeline System up to a maximum of 0.5%. HEP Operating shall be responsible for all volumetric losses in excess of 0.5% in the Malaga Pipeline System during the Applicable Term. Volumetric gains and losses shall be calculated and measured in a manner consistent with how and when gains and losses are calculated in the Crude Agreement.    HFRM shall be responsible for line fill by pipeline segment in accordance with HEP Operating’s policies for each segment as published on the Partnership’s website from time to time.    In the event HFRM desires to ship Crude Oil on the Malaga Pipeline System with an API Gravity in excess of 50 degrees, HEP Operating may, in its sole discretion, (i) refuse to ship such Crude Oil, or (ii) ship such Crude Oil and charge HFRM a surcharge (the “High-API Oil Surcharge”) equal to the increased expenses (or lower revenues) or capital costs, as a direct result thereof, as agreed upon by the Parties. If the Parties are unable to agree upon the High-API Oil Surcharge, the High-API Oil Surcharge will be determined pursuant to the dispute resolution provisions of the Omnibus Agreement. Any amounts paid by HFRM as a High-API Oil Surcharge shall not count toward satisfaction of any Minimum Revenue Commitment.
El Dorado Assets         
Cheyenne Assets    HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Cheyenne Receiving Assets, and (ii) be responsible for all volumetric losses in the Cheyenne Receiving Assets up to a maximum of 0.5%. HEP Operating shall, during the Applicable Term, be responsible for all volumetric losses in excess of 0.5% in the Cheyenne Receiving Assets. Gains and losses will be calculated for each Contract Quarter and offset against each other.      

 

Exhibit E-1


Applicable Assets

  

Volumetric Gains and Losses

  

Line Fill

  

High-API Oil Surcharge

Tulsa East Assets    HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Tulsa Pipelines, and (ii) be responsible for all volumetric losses in the Tulsa Pipelines up to a maximum of 0.5%. HEP Tulsa shall, during the Applicable Term, be responsible for all volumetric losses in excess of 0.5% in the Tulsa Pipelines. Gains and losses will be calculated for each Contract Quarter and offset against each other.      
Lovington Assets         

 

Exhibit E-2


Applicable Assets

  

Volumetric Gains and Losses

  

Line Fill

  

High-API Oil Surcharge

Roadrunner Assets    HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Roadrunner Pipeline, and (ii) be responsible for all volumetric losses in the Roadrunner Pipeline up to a maximum of 0.5%. HEP Operating shall, during the Applicable Term, be responsible for all volumetric losses in excess of 0.5% in the Roadrunner Pipeline. Gains and losses will be calculated for each Contract Quarter and offset against each other.      
El Dorado Crude Tank Farm Assets         
Tulsa West Tankage         
Catoosa Lubes Terminal         
Orla Truck Terminal         
Refined Products Pipelines    As set forth in the tariffs listed on Exhibit N-1.      
Refined Products Terminals    HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Refined Products Terminals and (ii) be responsible for all volumetric losses in the Refined Products Terminals up to a maximum of 0.25%. HEP Operating shall, during the Applicable Term, be responsible for all volumetric losses in excess of 0.25%. Gains and losses will be calculated annually on October 1 of each year for the prior October 1 to September 30 period on a terminal by terminal basis and offset against each other.      
Cushing Connect Pipeline    HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Cushing Connect Pipeline, and (ii) be responsible for all volumetric losses in the Cushing Connect Pipeline up to a maximum of 0.5%. HEP Operating shall, during the Applicable Term, be responsible for all volumetric losses in excess of 0.5% in the Cushing Connect Pipeline. Gains and losses will be calculated for each Contract Quarter and offset against each other.      

 

Exhibit E-3


Exhibit F

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Increases in Tariff Rates as a Result of Changes in Applicable Law

 

Applicable Assets

 

Types of Tariffs that may be increased (as applicable)

  

Threshold

Malaga Pipeline System  

Pipeline Base Tariff

Pipeline Incentive Tariff

   None
El Dorado Assets  

Pipeline Base Tariff

Tankage Base Tariff

Loading Rack Base Tariff

  

No Base Tariff may be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the El Dorado Assets in order to comply with new Applicable Laws.

 

Thereafter, HEP Operating may amend the applicable Base Tariff to recover its full cost of complying with the new Applicable Laws and such recovery shall not be limited to amounts in excess of $1,000,000.

Cheyenne Assets  

Cheyenne Receiving Assets Base Tariff

Cheyenne Tankage Base Tariff

Cheyenne Loading Rack Base Tariff

  

No Base Tariff may be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the Cheyenne Assets in order to comply with new Applicable Laws.

 

Thereafter, HEP Operating may amend the applicable Base Tariff to recover its full cost of complying with such new Applicable Laws and such recovery shall not be limited to amounts in excess of $1,000,000.

Tulsa East Assets  

Tulsa Pipelines Base Tariff

Tulsa Group 1 Tankage Base Tariff

Tulsa Group 1 Loading Rack Tariff

Tulsa Group 2 Tankage Base Tariff

Tulsa Group 2 Loading Rack Tariff

   Base Tariff may not be amended until HEP Operating has made capital expenditures of $2,000,000 in the aggregate with respect to the Applicable Assets (excluding the Interconnecting Pipelines) in order to comply with new Applicable Laws.
  Tulsa Interconnecting Pipeline Base Tariff    Base Tariff may not be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the Interconnecting Pipelines in order to comply with new Applicable Laws.

 

Exhibit F-1


Applicable Assets

  

 

  

 

Lovington Assets    Base Tariff    Base Tariff may not be amended until HEP Operating has made capital expenditures of $500,000 in the aggregate with respect to the Lovington Loading Rack in order to comply with new Applicable Laws.
Roadrunner Assets    Pipeline Base Tariff    Base Tariff may not be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the Roadrunner Pipeline in order to comply with new Applicable Laws.
El Dorado Crude Tank Farm Assets    Base Tariff   

No Base Tariff may be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the El Dorado Crude Tank Farm Assets in order to comply with new Applicable Laws.

 

Thereafter, HEP Operating may amend the applicable Base Tariff to recover its full cost of complying with the new Applicable Laws and such recovery shall not be limited to amounts in excess of $1,000,000.

Tulsa West Tankage    Base Tariff   

No Base Tariff may be amended until HEP Operating has made capital expenditures of $2,000,000 in the aggregate with respect to the Tulsa West Tankage in order to comply with new Applicable Laws.

 

Thereafter, HEP Operating may amend the Base Tariff to recover its full cost of complying with the new Applicable Laws and such recovery shall not be limited to amounts in excess of $2,000,000.

Catoosa Lubes Terminal    Base Tariff   

No Base Tariff may be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the Catoosa Lubes Terminal in order to comply with new Applicable Laws.

 

Thereafter, HEP Operating may amend the applicable Base Tariff to recover its full cost of complying with the new Applicable Laws and such recovery shall not be limited to amounts in excess of $1,000,000.

Orla Truck Terminal    Base Tariff   

No Base Tariff may be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the Orla Truck Terminal in order to comply with new Applicable Laws.

 

Thereafter, HEP Operating may amend the applicable Base Tariff to recover its full cost of complying with the new Applicable Laws and such recovery shall not be limited to amounts in excess of $1,000,000.

 

Exhibit F-2


Applicable Assets

  

 

  

 

Refined Products Pipelines    Base Tariff   

No Base Tariff may be amended until HEP Operating has made capital expenditures of $5,000,000 in the aggregate with respect to the Refined Products Pipelines in order to comply with new Applicable Laws.

 

Thereafter, HEP Operating may file new tariff rates to amend the applicable Base Tariff to recover the cost of complying (including a reasonable return) with the new Applicable Laws and such recovery shall not be limited to amounts in excess of $5,000,000.

Refined Products Terminals    Terminalling Fees   

No fees on Exhibit N-2 may be amended until HEP Operating has made capital expenditures of $5,000,000 in the aggregate with respect to the Refined Products Terminals in order to comply with new Applicable Laws.

 

Thereafter, HEP Operating may amend the applicable fees to recover HFRM’s pro rata share of the cost of complying with the new Applicable Laws and such recovery shall not be limited to amounts in excess of $5,000,000.

Cushing Connect Pipeline    Base Tariff   

No Base Tariff may be amended until HEP Operating has made capital expenditures of $1,000,000 in the aggregate with respect to the Cushing Connect Pipeline in order to comply with new Applicable Laws.

 

Thereafter, HEP Operating may file new tariff rates to amend the applicable Base Tariff to recover the cost of complying (including a reasonable return) with the new Applicable Laws and such recovery shall not be limited to amounts in excess of $1,000,000.

 

Exhibit F-3


Exhibit G

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Special Provisions: Malaga Pipeline System

1. Construction Projects. HEP Operating has (i) completed the construction projects set forth on Exhibit G-1 and (ii) built the 25 lease connections listed on Exhibit G-2 (the “Devon Lease Connections” and, together with the construction projects set forth on Exhibit G-1, the “Malaga Construction Projects”). With respect to Item 4 listed on Exhibit G-1, HFRM reimbursed HEP Operating 100% of the actual costs and expenses of those Malaga Construction Projects. HEP Operating bore the costs of constructing all of the other Malaga Construction Projects listed on Exhibit G-1 and Exhibit G-2, other than Item 4 on Exhibit G-2.

2. Option to Increase Minimum Capacity Commitment Following the Malaga Initial Period. At the end of the Malaga Initial Period and once-a-year thereafter during the Applicable Term, HFRM shall have the option to increase (but not decrease) the Minimum Capacity Commitment for the Malaga Pipeline System applicable to the remainder of the Applicable Term, which option may be exercised as follows:

2.1 Malaga Capacity Estimate. HFRM may initiate the process by which it will exercise its option by delivering to HEP Operating a written request for a statement of HEP Operating’s good faith estimate of the total uncommitted pipeline capacity for the Malaga Pipeline System that will be available for the remaining Applicable Term (a “Malaga Capacity Estimate”), which request must be made, (i) in the case of the election available at the end of the Malaga Initial Applicable Period, no later than the one hundred twentieth (120th) day before the end of the Malaga Initial Period, and (ii) in the case of the election available at the end of each twelve (12) month period following the end of the Malaga Initial Period (each a “Subsequent Year”), the one-hundred twentieth (120) day before the end of such Subsequent Year.

2.2 Response to Request for Malaga Capacity Estimate. HEP Operating must respond to each request with a written Malaga Capacity Estimate within ten (10) days of HEP Operating’s receipt of such request.

2.3 Malaga Exercise Notice. To exercise its option, HFRM must provide HEP Operating a written notice of exercise (an “Malaga Exercise Notice”) no later than ninety (90) days prior to the end of the Malaga Initial Period or Subsequent Year (as applicable), which Malaga Exercise Notice must contain the amount (stated in bpd) by which HFRM desires to increase the Minimum Capacity Commitment for the Malaga Pipeline System for the next occurring Subsequent Year and the remainder of the Applicable Term. The amount of increase for which HFRM may exercise this option may not exceed the available uncommitted pipeline capacity for the Malaga Pipeline System as stated in the Malaga Capacity Estimate. If no written Malaga Exercise Notice is received by such ninetieth (90th) day, then HFRM will be deemed to have waived its option, though such waiver shall not preclude HFRM from exercising its option in Subsequent Years according the process set forth in this Section 2.

 

Exhibit G-1


2.4 Increase in Minimum Capacity Commitment and Minimum Throughput Commitment. If HFRM timely exercises its option at the end of the Malaga Initial Period or a Subsequent Year in accordance with this Section 2, then, with respect to the next Subsequent Year and the remainder of the Applicable Term thereafter:

(a) the Minimum Capacity Commitment for the Malaga Pipeline System shall be increased by the amount specified in the Malaga Exercise Notice; and

(b) the Minimum Throughput Commitment shall be increased by an amount equal to the increase in the Minimum Capacity Commitment for the Malaga Pipeline System.

For example, if HFRM exercises its option at the end of the Malaga Initial Period to increase the Minimum Capacity Commitment for the Malaga Pipeline System from 40,000 bpd to 50,000 bpd (a 25% increase), then the Minimum Throughput Commitment shall be increased to equal 50,000 bpd (a 25% increase). This will have the effect of increasing the Minimum Pipeline Revenue Commitment by the operation of Section 2.2(a) of the Agreement.

3. Third Party Shipping. During the Malaga Initial Period, HFRM shall have the exclusive right to utilize the entire capacity of the Malaga Pipeline System. After the end of the Malaga Initial Period, if HEP Operating contracts with third parties to ship Crude Oil on the Malaga Pipeline System thereafter during the Applicable Term, subject to the terms of this Agreement, then HEP Operating may not charge any such third party transportation services fees, throughput fees, or other fees that are equal to or less on a per barrel basis (taking into account all applicable incentive tariffs and surcharges) than those charged to HFRM under this Agreement unless such third party agrees to minimum volume and revenue commitments equal to or in excess of those to which HFRM is subject hereunder. In the event that a third party with whom HEP has contracted agrees to minimum volume and revenue commitments that are equal to those to which HFRM is subject hereunder, and the transportation services fees, throughput fees, or other fees are less on a per barrel basis (taking into account all applicable incentive tariffs and surcharges) than those charged to HFRM under this Agreement, then the tariff rates charged to HFRM under this Agreement shall be automatically reduced to be equal to such third party tariff rates.

4. Storage. In addition, following the Malaga Commencement Date, HEP Operating agrees, for no additional fees, to provide storage services of up to 70,000 barrels with regard to Crude Oil shipped using the Malaga Pipeline System (30,000 barrels at the Whites City Road Station and 40,000 barrels at the Beeson Station) and provide limited in-tank Crude Oil blending services when operationally feasible at the HEP Operating Artesia Station to the specifications of HFRM, as such specifications may be adjusted from time to time.

5. Additional Applicable Tariff. The Parties hereby acknowledge that the Applicable Tariffs are in addition to tariffs applicable to volumes shipped on the Devon Lease Connections pursuant to the Crude Agreement.

 

Exhibit G-2


Exhibit G-1

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Construction Projects

 

1.

Whites City Road Station

 

  a.

Built station at the intersection of the idle 8” pipe and Whites City County Road (coordinates _32.064421 Lat _104.135759_ Long). This station includes 30,000 barrels of tankage for crude to be injected into the 8” headed north. The amount of property to be leased or purchased will be sufficient to install up to 5 crude truck off-loading LACTS and their associated tanks.

 

2.

HEP Artesia Station

 

  a.

Reactivated 8” Malaga Pipeline from the Whites City Road Station to the existing 30,000 barrel tank at HEP Artesia Station.

 

  b.

Built connecting 8” line between the reactivated 8” Malaga Pipeline and HEP Artesia Station for receipts of sweet crude originating from the Whites City Road Station.

 

  c.

Tie-in Millman Station and Devon Parkway sweet crude deliveries into the HEP Artesia Station 30,000 barrel tank, i.e., Devon Parkway barrels connected into and delivered to the Artesia Station tank.

 

  d.

Sweet crude oil deliveries out of HEP Artesia Station tank connected for delivery to Abo station.

 

  e.

Built 6” connecting pipeline approximately 6 miles to receive sweet barrels from the Devon Parkway into existing Millman System.

 

  f.

Build additional truck off loading facility at HEP Artesia Station.

 

  g.

Built 8” 11-mile pipeline from HEP Artesia Station to Beeson Station.

 

3.

HEP Beeson Station and Bisti Delivery

 

  a.

Built approximately 40,000 barrels of tankage at Beeson Station to receive sweet crude.

 

  b.

Built 6” pipeline (approximately 12 miles) to receive sweet barrels from the Devon Hackberry field.

 

  c.

Built connection from Anderson Ranch gathering system to the Devon Hackberry to Beeson Station connecting pipeline. This connection will be made to deliver sweet barrels through the Anderson Ranch pipe and deliver into the tank at the Beeson Station.

 

Exhibit G-1-1


  d.

Installed pumping capacity necessary for delivery into Plains Pipeline at Bisti (to deliver at a rate of up to 80,000 bpd).

 

  e.

Built 12” 12-mile pipeline from Beeson Station to Plains Pipeline System connection at Bisti.

 

4.

Built NM sweet truck off-loading station at Whites City Road Station.*

 

*

HEP Operating was reimbursed by HFRM for the costs of managing and constructing (4). HEP Operating will at all times be the owner of (4), including during the period of construction.

 

Exhibit G-1-2


Exhibit G-2

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Devon Lease Connections

 

Battery Name

  

Field Name

  

Location

  

Status

Diamond    Parkway    32.6519528 N 104.0701295 W    Producing
Emerald    Parkway    32.6525348 N 104.1045269 W    Producing
Beryl    Parkway    32.6109502 N 104.0829194 W    Producing
Onyx    Parkway    32.638176 N 104.093915 W    Producing
Coral    Parkway    32.6253952 N 104.0745216 W    Producing
Turquoise    Parkway    32.6365513 N 104.0701851 W    Producing
Agate    Parkway    32.6520074 N 104.0873003 W    Producing
Jasper    Parkway    32.623619 N 104.090791 W    Producing
Beetle Juice 19 Fed #1H    Hackberry    32° 39’ 7.41” N 103° 54’ 4.05” W    Producing
Beetle Juice 19 Fed #3H    Hackberry    32° 39’ 9.054” N 103° 54’ 43.471” W    Producing
Capella 14 Fed #1H    Hackberry    32° 40’ 0.638” N 103° 50’ 4.152” W    Producing
Strawberry 7 Fed #2    Hackberry    32° 40’ 43” N 103° 54’ 20.8” W    Producing
Strawberry 7 Fed #4    Hackberry    32° 40’ 6.93” N 103° 54’ 4.28” W    Producing
Sirius 17 Fed #1H    Hackberry    32° 39’ 59.165” N 103° 54’ 2.605” W    Producing
Sirius 17 Fed #2H    Hackberry    32° 39’ 47.98” N 103° 53’ 2.44” W    Producing
Sirius 17 Fed #3H    Hackberry    32° 39’ 30.98” N 103° 53’ 56.18” W    Producing
Arcturus 18 Fed #1H    Hackberry    32° 39’ 59.66“N 103° 54’ 2.607” W    Producing
Arcturus 18 Fed #3H    Hackberry    32° 39’ 23.058” 103° 54’ 57.028” W    Producing
Rigel 20 Fed Com #1H    Hackberry    32° 39’ 7.185” N 103° 53’ 56.214” W    Producing
Rigel 20 Fed Com #3H    Hackberry    32° 38’ 36.881” N 103° 53’ 56.099” W    Producing
Regulus 26 Fed #1    Hackberry    32° 63’ 76.832” N 103° 83’ 24.245” W    Producing
Spica 25 Fed #1    Hackberry    32° 63’ 76.834” N 103° 83’ 22.620” W    Producing
Vega 29 Fed Com #1    Hackberry    32° 63’ 77.726” N 103° 88’ 57.377” W    Producing
Serene Sisters 25 Fed #1H    Hackberry    32° 43’ 31.099” N 103° 49’ 3.506” W    Producing
Serene Sisters 25 Fed #3H    Hackberry    32° 42’ 42.721” N 103° 49’ 32.488” W    Producing

 

Exhibit G-2-1


Exhibit H

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Special Provisions: El Dorado Assets

1. Change of Service. Subject to (i) any Applicable Law and (ii) technical specifications of the El Dorado Tankage, HFRM may request that HEP Operating change the service of any of the El Dorado Tankage from storage of one Product to storage of a different Product. If HEP Operating agrees to such request, HFRM shall indemnify and hold HEP Operating harmless from and against all costs and expenses associated with any such changing of service including costs of complying with any Applicable Law affecting such change of service.

2. Construction of New Tank. HEP Operating shall, or shall cause its Affiliate to, use its commercially reasonable efforts to construct a New Tank at the El Dorado Refinery in accordance with the specifications set forth on Exhibit H-3. If HEP Operating or its Affiliate should fail to complete the New Tank or if the New Tank Commencement Date does not occur for the New Tank for a reason related to the fault of HEP Operating or its Affiliate or a matter that is within or under the control of HEP Operating or its Affiliate, HEP Operating shall bear all costs, liabilities and expenses with respect to such incomplete New Tank, and if HEP Operating or its Affiliate should fail to complete the New Tank or if the New Tank Commencement Date does not occur for the New Tank for any other reason, HFRM shall reimburse HEP Operating or its Affiliate for all costs, liabilities and expenses incurred by HEP Operating or its Affiliate with respect to such incomplete New Tank. Promptly following the New Tank Commencement Date, HEP Operating will deliver a written certification to HFRM certifying the Final Construction Cost for the New Tank. Additionally, promptly following the New Tank Commencement Date, the Parties shall execute an amended Exhibit H-2 reflecting the addition of the New Tank and attach it to this Agreement. Such amended Exhibit H-2 shall be numbered Exhibit H-2.1, dated and appended as an additional schedule to this Agreement and shall replace the prior version of Exhibit H-2 in its entirety after its date of effectiveness.

 

Exhibit H-1


Exhibit H-1

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

El Dorado Loading Rack

The Refined Products Truck Loading Rack and the Propane Truck Loading Rack transferred to El Dorado Logistics pursuant to that certain Conveyance, Assignment and Bill of Sale (El Dorado), dated effective as of October 25, 2011, by and between Frontier El Dorado and El Dorado Logistics.

 

Exhibit H-1-1


Exhibit H-2

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

El Dorado Tankage

 

TANK ID NUMBER

  

CURRENT SERVICE/PRODUCT

  

NOMINAL CAPACITY, BBLS

1       DEMO
2       DEMO
3    ULSD    40,425
15    ULSD    12,422
16    Light Slop    28,880
17    Gasoline    92,740
18    Gasoline    88,600
19    Gasoline    90,733
20    Finish Gasoline    17,961
21    ULSD    120,639
23    ULSD    113,182
24    ULSD    119,269
25    Av Jet    65,117
29    CRU1 Feed    33,723
30    CRU2 Feed    39,417
31    ULSD    23,792
32    Finish Gasoline    74,847
64    Gasoline    17,961
65    Gasoline    17,941
66    Naptha    22,582
75    ULS k    24,938
78    ULS k    9,226
127    Heavy Slop    20,504
654    Sour Distilate    77,596
642    HTU2 Chg.    78,511
655    HTU2 Chg.    76,750
649    HTU4 CHg.    100,000
137    Gas Oil/Sour diesel    192,000
138    Gas Oil    193,742
139    Gas Oil    74,792
142    Gas Oil    191,563
143    Gas Oil    191,570
159    Slurry    9,778
167    Slurry    8,908
650    ULSD Dock    36,000
178    Coke Charge/Swing Tank    80,000
192**       DEMO

 

Exhibit H-2-1


TANK ID NUMBER

  

CURRENT SERVICE/PRODUCT

  

NOMINAL CAPACITY, BBLS

212    Coker Chg.    76,524
213    Asphalt    77,675
215    AV Jet    67,529
216    Alkylate    72,618
218    Gas Oil    77,675
219    Reformate    71,466
220    Swing Tank    71,495
221    Gasoline Swing    71,508
222    Gasoline Swing    71,509
223    Reformate    72,893
224    Jet Fuel    71,534
225    HTU1 Chg, kerosene    28,882
226    Finish Gasoline    27,679
227    Natural Gasoline    27,701
230    Diesel (RAM)    4,780
231    Light Cycle (RAM)    1,923
250    FCCU Gasoline    75,354
251    FCCU Gasoline    75,968
252    FCCU Gasoline    75,968
253    Natural Gasoline    74,653
254    Isomerate    19,318
255    Isomerate    19,318
256    TEL Wash    950
447    Finish Gasoline    17,730
448    Gasoline    16,109
453    Ethanol    5,121
457    HTU3 Chg, LSR    32,690
458    Isomerate    32,690
490    ULSD    116,094
600    Propane    625
601    Propane    625
602    Propane    625
603    Propane    625
604    Propane    625
605    Propane    625
606    Propane    625
607    Propane    625
608    Propane    625
609    Propane    625
610    Propane    625
611    Propane    625
612    Propane    625
613    Propane    625
614    Propane    625

 

Exhibit H-2-2


TANK ID NUMBER

  

CURRENT SERVICE/PRODUCT

  

NOMINAL CAPACITY, BBLS

615    Propane    625
616    Propane    625
617    Propane    625
618    Propane    625
619    Propane    625
620    Propane    575
621    Propane    100
640    Asphalt    66,859
641    Biodiesel    6,813
647    Asphalt    76,600
651    Heavy Atmospheric Gas Oil (HAGO)    32,346
653    HAGO    32,344
656    Diesel    500
657    Diesel    500

 

Exhibit H-2-3


Exhibit H-3

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Specifications for New Tank

 

TANK ID NUMBER

 

CURRENT

SERVICE/PRODUCT

 

NOMINAL CAPACITY,

BBLS

 

Exhibit H-3-1


Exhibit I

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Special Provisions: Cheyenne Assets

1. Change of Service. Subject to (i) any Applicable Law and (ii) technical specifications of the Cheyenne Tankage, HFRM may request that HEP Operating change the service of any of the Cheyenne Tankage from storage of one Product to storage of a different Product. If HEP Operating agrees to such request, HFRM shall indemnify and hold HEP Operating harmless from and against all costs and expenses associated with any such changing of service including costs of complying with any Applicable Law affecting such change of service.

 

Exhibit I-1


Exhibit I-1

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Cheyenne Loading Rack

The Refined Products Truck Loading Rack, including the Vapor Recovery Unit and the two (2) Propane Loading Spots transferred to Cheyenne Logistics pursuant to that certain Conveyance, Assignment and Bill of Sale (Cheyenne), dated effective as of October 25, 2011, by and between Frontier Cheyenne and Cheyenne Logistics.

 

Exhibit I-1-1


Exhibit I-2

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Cheyenne Receiving Assets

The four (4) Crude Oil LACTS Units, the Crude Oil Receiving Pipeline, and the petroleum storage tanks listed below under “Petroleum Storage Tanks” transferred to Cheyenne Logistics pursuant to that certain Conveyance, Assignment and Bill of Sale (Cheyenne), dated effective as of October 25, 2011, by and between Frontier Cheyenne and Cheyenne Logistics.

Petroleum Storage Tanks:

 

TANK ID NUMBER

 

CURRENT SERVICE/PRODUCT

 

NOMINAL

CAPACITY, BBLS

2-036     DEMO
2-063   Crude HSR   10,096
2-067   Crude LSR   10,093
2-072   Crude   80,581
2-073   Crude   80,551
2-074   Crude   79,766

 

Exhibit I-2-1


Exhibit I-3

to

Sixth Amended and Restated

Master Throughput Agreement

 

Cheyenne Tankage

 

TANK ID NUMBER

  

CURRENT

SERVICE/PRODUCT

  

NOMINAL CAPACITY, BBLS

1-107    Intermediate Distillate    69,942
1-013         DEMO
1-014    Low Sul. Diesel    24,677
1-015    No Lead Gas    24,677
1-016    Ethanol    2,564
1-017    Prem. No Lead Gas    5,034
1-020         DEMO
1-021    Sweet Naphtha / VRU    9,867
1-027    Slop Oil    4,000
1-028    BioDiesel    5,179
1-029    Coker Gas Oil    10,709
1-032    Diesel    10,124
1-033         DEMO
1-040         DEMO
1-048         DEMO
1-049         DEMO
1-050    Vacuum Bottoms    67,428
1-051    Slurry    24,938
1-052    PG 58-28 (Asphalt)    72,017
1-053    FCCU Slurry    13,506
1-054    FCCU Slurry    24,938
1-055    PG 58-28 (Asphalt)    54,499
1-056    Coker feed tank    61,709
1-058    Coker Gas Oil    10,493
1-090    PG 64-22 (Asphalt)    55,954
1-091         DEMO
1-093    PG 64-22 (Asphalt)    2,602
1-094    PG 64-22 (Asphalt)    2,602
1-095    PG 64-22 (Asphalt)    2,602
1-106    Naptha    120,000
1-108    Distillate    107,000
1-117    Vacuum Bottoms    69,942
2-015    ULSD    29,114
2-016    Diesel    28,046

 

Exhibit I-3-1


TANK ID NUMBER

  

CURRENT

SERVICE/PRODUCT

  

NOMINAL CAPACITY, BBLS

2-017    UC Crack (LCO / Coker Distillate)    28,562
2-020    Gas Oil    10,746
2-021    Gas Oil    10,746
2-022    UC Crack (LCO / Coker Distillate)    9,731
2-023    Coker Gas Oil    10,583
2-028    Cat Gas Oil    80,153
2-034    Reformate    23,234
2-035    Alkylate    24,190
2-036         DEMO
2-060    Burner/Distillate    9,846
2-061    Sweet Naphtha    10,096
2-062    Naptha    9,970
2-070    Sub Grade No Lead Gas    32,608
2-071    Premium No Lead Gas    32,612
2-075    Finished NL Gasoline    80,278
2-100    LSR/LSG    41,978
2-101    Diesel    42,051
2-102    No Lead Gas    80,278
2-104    Reformate    54,749
2-105    Cat Gas Oil    54,954
2-118    Light Straight Run    40,609
2-119    FCCU Cat Gas    40,609
2-161    Finished Diesel    40,485

 

Exhibit I-3-2


Exhibit J

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Special Provisions: Tulsa East Assets

1. Change of Tankage Service. Subject to (i) any Applicable Law and (ii) technical specifications of the Tulsa Group 1 Tankage or the Tulsa Group 2 Tankage, HFRM may request that HEP Operating change the service of any of the Tulsa Group 1 Tankage or the Tulsa Group 2 Tankage from storage of one Product to storage of a different Product; provided, however, that HFRM shall indemnify and hold HEP Operating harmless from and against all costs and expenses associated with any such changing of service including costs of complying with any Applicable Law affecting such change of service.

2. Change of Interconnecting Pipeline Service. Subject to (i) any Applicable Law, (ii) technical specifications of the Tulsa Interconnecting Pipelines, and (iii) right-of-way and license agreements, HFRM may request that HEP Operating change the service of any of the Interconnecting Pipelines; provided, however, that HFRM shall indemnify and hold HEP Operating harmless from and against all costs and expenses associated with any such changing of service including costs of complying with any Applicable Law affecting such change of service.

3. Construction of New Tank. HEP Operating shall, or shall cause its Affiliate to, use its commercially reasonable efforts to construct a New Tank at the Tulsa Refinery in accordance with the specifications set forth on Exhibit J-6. If HEP Operating or its Affiliate should fail to complete the New Tank or if the New Tank Commencement Date does not occur for the New Tank for a reason related to the fault of HEP Operating or its Affiliate or a matter that is within or under the control of HEP Operating or its Affiliate, HEP Operating shall bear all costs, liabilities and expenses with respect to such incomplete New Tank, and if HEP Operating or its Affiliate should fail to complete the New Tank or if the New Tank Commencement Date does not occur for the New Tank for any other reason, HFRM shall reimburse HEP Operating or its Affiliate for all costs, liabilities and expenses incurred by HEP Operating or its Affiliate with respect to such incomplete New Tank. Promptly following the New Tank Commencement Date, HEP Operating will deliver a written certification to HFRM certifying the Final Construction Cost for the New Tank. Additionally, promptly following the New Tank Commencement Date, the Parties shall execute an amended Exhibit J-3 reflecting the addition of the New Tank and attach it to this Agreement. Such amended Exhibit J-3 shall be numbered Exhibit J-3.1, dated and appended as an additional schedule to this Agreement and shall replace the prior version of Exhibit J-3 in its entirety after its date of effectiveness.

 

Exhibit J-1


Exhibit J-1

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Tulsa Group 1 Loading Rack

The Propane Truck Loading Rack, Asphalt Truck Loading Rack and Gas Oil Truck Loading Rack transferred to HEP Tulsa LLC pursuant to that certain Bill of Sale, Assignment and Assumption Agreement, dated December 1, 2009, by and between Sinclair Tulsa Refining Company and HEP Tulsa LLC.

 

Exhibit J-1-1


Exhibit J-2

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Tulsa Group 1 Pipeline

The two Product Delivery Pipelines transferred to HEP Tulsa LLC pursuant to that certain Bill of Sale, Assignment and Assumption Agreement, dated December 1, 2009, by and between Sinclair Tulsa Refining Company and HEP Tulsa LLC.

 

Exhibit J-2-1


Exhibit J-3

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Tulsa Group 1 Tankage

 

TANK ID

 

REFINED PRODUCT

 

CAPACITY (BBLS)

10

  ULSD #2 (XT)   37,500

11

  ULSD #2 (XT)   37,500

12

  Naptha   32,000

45

  Decant   5,700

102

  Kerosene   37,500

103

  Kerosene   37,500

104A

  ULSD #2 (XT)   37,500

110

  ULSD #1   37,500

111

  Kerosene   37,500

115A

  ULSD #2 (XT)   151,000

215

  ULSD #2 (XT)   151,000

116

  Kerosene   50,860

117

  ULSD #2 (XT)   63,000

444A

  Gasoline Blendstock   32,832

450A

  Premium Unleaded   12,000

451

    DEMO

452A

  USLD #2 (XT)   12,000

464A

  Unleaded Regular   80,000

465

  Unleaded Regular   79,320

466

  Unleaded Regular   79,320

467A

  Unleaded Regular   80,000

470A

  Unleaded Regular   151,020

472

  Unleaded Regular   151,000

473A

  Premium Unleaded (ST)   151,020

601

  Unleaded Regular   19,000

602

  Premium Unleaded (ST)   10,000

603

  Out of Service   DEMO

605

  Ethanol   5,000

606

  Empty   500

 

Exhibit J-3-1


Exhibit J-4

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Tulsa Group 2 Loading Rack

The Rail Loading Rack transferred to HEP Tulsa LLC pursuant to that certain Conveyance, Assignment and Bill of Sale, dated March 31, 2010, by and between Holly Refining & Marketing – Tulsa LLC and HEP Tulsa LLC.

 

Exhibit J-4-1


Exhibit J-5

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Tulsa Group 2 Tankage

 

TANK ID

 

CURRENT SERVICE

 

CAPACITY (BBLS)

1

  Crude   130,450

2

  Crude   130,000

3

  Crude   116,579

8

  Crude   130,233

123

  CSO   37,500

471A

  Regular   151,020

107A

  Flux/Asphalt   55,954

108A

  Flux/Asphalt   37,500

109

  Flux/Asphalt   37,500

125

  Flux/Asphalt   37,500

131

  Flux/Asphalt   37,500
442       DEMO

445A

  Gasoline blendstock   32,787
446       DEMO

460

  LSR   80,000

461A

  LSR   80,000

17

  FCCU LCO   37,500

114

  Raw Diesel   131,000

9

  Raw gas oil   150,260

15

  Raw gas oil   130,000

16

  Raw gas oil-Sour   151,078

6A

  Raw naphtha   69,082

4

  Scanfiner feed   120,566

40

  Raw gas oil   5,734

41

  CSO   4,032

34

  Truck loading-64/22 asphalt   11,798

36A

  Truck loading-58/28 asphalt   11,500

124A

  Flux/Asphalt   37,500

18A

  Slop   37,500

31

  Slop   15,000

7A

  Naptha   69,082

14

  Naptha   55,000

 

Exhibit J-5-1


Exhibit J-6

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Specifications for New Tank

 

TANK ID NUMBER

 

CURRENT SERVICE/PRODUCT

 

NOMINAL CAPACITY,

BBLS

12   Naphtha   32,000

 

Exhibit J-6-1


Exhibit K

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Special Provisions: El Dorado Crude Tank Farm Assets

 

1.

El Dorado Terminal Operation. HEP Operating will use commercially reasonable efforts to maintain the El Dorado Terminal’s current connections to the pipelines owned and operated by (a) Tallgrass Energy Partners, LP (the “Pony Express Pipeline”), (b) Osage Pipe Line Company, LLC (the “Osage Pipeline”), (c) Rose Rock Midstream, L.P. (the “Rose Rock Pipeline”), and (d) MV Purchasing, LLC (the “MVP Pipeline”), but shall not be required to expend additional monies in connection therewith unless agreed separately in writing with HFRM. HFRM may request HEP Operating to connect the El Dorado Crude Tankage to new pipelines, whether owned by third parties or by HFRM, subject to HEP Operating’s approval of such connections and the engineering standards related to such; HEP Operating will not unreasonably withhold such approval. If HEP Operating approves any new connection requested by HFRM, HFRM will reimburse HEP Operating the actual expenses incurred by HEP Operating that are associated with such connection, plus an administrative charge of fifteen percent (15%). In addition, the Minimum Throughput Commitment will be increased to account for any additional expense HEP Operating bears in connection with ongoing operating expenses associated with such requested pipeline connection. Any HEP Operating expenditures requested by HFRM beyond pipeline connections will be negotiated separately.

 

2.

Tank Use. HEP Operating shall make available to HFRM on an exclusive basis the shell capacity, minimum and maximum capacities, and working capacity for the El Dorado Crude Tankage. HEP Operating will make at least two (2) of such tanks available for blending services at all times during the Applicable Term. HEP Operating and HFRM will work together to assign minimum and maximum capacities of each tank within sixty (60) days following the commencement of the Applicable Term. These minimum and maximum capacities will be set to allow the most working capacity available to HFRM within reasonable industry practices. The minimum and maximum capacity for each tank will be used to determine the working capacity of each tank (calculated by subtracting the minimum capacity from the maximum capacity for each Tank) (the “Working Capacity”). Once the Working Capacity is agreed upon, HEP may assign, in its sole discretion, new maximum and minimum capacities to each tank if required to allow for safe operation. If HEP determines it is necessary to reduce the aggregate Working Capacity to less than 650,000 Barrels (as such volume may be adjusted pursuant to Section 4 of this Exhibit K (the “El Dorado Minimum Working Capacity”), the Minimum Throughput Commitment will be reduced proportionately. HFRM may deliver or have delivered Product into the El Dorado Crude Tankage from the El Dorado Refinery, the Pony Express Pipeline, the Osage Pipeline the Rose Rock Pipeline or the MVP Pipeline. HFRM agrees not to deliver to the Terminal any Products which fail to meet the El Dorado Quality Specifications, or which would in any way be injurious to the El Dorado Crude Tankage, or that may not lawfully be handled in the Tankage. HFRM shall be responsible for and pay for all damages resulting from handling of any Products by HFRM, its designee, or its consignee; provided, however, so long as the Products meet the El Dorado Quality Specifications, HFRM shall not be responsible for damages arising from the negligence or willful misconduct of HEP, its agents, employees or contractors or from ordinary wear and tear.

 

Exhibit K-1


3.

Terminal Maintenance, Changes, or Installations. HEP Operating shall make the El Dorado Crude Tankage available for HFRM’s exclusive use except for times at which a tank must be taken out of service for routine maintenance, in which event HEP Operating will use commercially reasonable efforts to minimize the duration of the outage. HEP Operating may take more than one tank out of service due to unplanned maintenance, environmental, or operational occurrences and may schedule more than one tank out of service if the duration is minimal (i.e. less than 1 week for seal inspection or mixer repair on top of an API 653 of another tank), but HEP Operating will not schedule more than one tank out of service for extended overlapping periods (e.g., two API 653s at the same time overlapping 1+ weeks). HEP Operating will provide HFRM written notice at least forty-five (45) days prior to any scheduled maintenance, changes or installations affecting the El Dorado Crude Tankage. In the event HEP Operating cannot provide any or all of the services during any maintenance, changes or installations within the El Dorado Terminal, or if such maintenance, changes or installations causes HEP Operating to take any tank out of service and HEP Operating does not provide a substitute tank in the place of such tank, the Minimum Throughput Commitment shall be reduced by the Working Capacity of such out-of-service tank for the duration of such outage.

 

4.

Right of First Refusal. HEP Operating may not lease or pledge or commit to provide any storage services with respect to the El Dorado Crude Tankage or the Jayhawk Tankage (after the expiration of the Jayhawk Lease) at the El Dorado Terminal to a third party unless HEP Operating first offers to HFRM the exclusive right to use the Working Capacity of such tanks on substantially the same terms as HEP Operating has previously negotiated with a third party in arms-length negotiations. HFRM will have thirty (30) days (the “El Dorado Crude Tank Farm Consideration Period”) to consider the option to utilize such Working Capacity and to provide notice to HEP Operating of its election to accept or decline such Working Capacity. If HFRM has not notified HEP Operating within 30 days, then HEP Operating may proceed to enter into an agreement with the third party for such Working Capacity; provided, however, that if HEP Operating does not enter into an agreement with the third party within sixty (60) days following HFRM’s notice to decline or the expiration of the El Dorado Crude Tank Farm Consideration Period, then HFRM’s rights under this Section 4 will apply to any subsequent bona fide third party offer to HEP Operating regarding such Working Capacity.

 

5.

Jayhawk Tankage. In the event that the Jayhawk Lease expires or is otherwise terminated or cancelled for any reason and the Jayhawk Tankage are not leased within a reasonable time (not to exceed sixty 60) days) to a third party as contemplated by Section 4 of this Exhibit K, HEP Operating agrees to make the Working Capacity of the Jayhawk Tankage available for HFRM’s exclusive use, and HFRM agrees to increase the Minimum Throughput Commitment by an amount equal to (a) the monthly storage fee that Jayhawk paid to HEP Operating during the last 12 months of the Jayhawk Lease, divided by the Working Capacity of the Jayhawk Tankage, and the El Dorado Minimum Working Capacity shall be increased by an amount equal to two-thirds (2/3) of the Working Capacity of such Jayhawk Tankage. HFRM’s use of the Jayhawk Tankage will be added to this Agreement as an amendment with all terms and conditions being consistent with this Agreement, and thereafter the term “El Dorado Crude Tankage” as used herein shall include the Jayhawk Tankage.

 

6.

Right to Refuse. HEP Operating reserves the right to refuse receipt of any Product into the El Dorado Terminal, alternatively route such Product to another location, or take other appropriate action in regards to such Product if Product does not meet the El Dorado Quality Specifications. HFRM, if requested in writing, will provide HEP Operating with notice setting forth the quantity, quality, and specifications of Product to be delivered a minimum of four (4) hours prior to any delivery to the El Dorado Terminal. Any reasonable costs incurred by HEP Operating in connection with addressing or handling HFRM’s Product that does not meet the El Dorado Quality Specifications shall be borne by HFRM.

 

Exhibit K-2


7.

Terminal Damage or Destruction. If any part of the El Dorado Terminal or the El Dorado Crude Tankage are damaged or destroyed by fire or other casualty, HEP Operating shall have the discretion to reduce receipts into and deliveries out of the El Dorado Terminal and to allocate any remaining El Dorado Terminal capacity and throughput fairly and reasonably among various customers utilizing terminalling services at the El Dorado Terminal. HEP Operating may, but shall not be obligated to, repair or replace such damaged or destroyed terminal facilities or Tanks.

 

8.

Delivery Lines. The El Dorado Crude Tankage is connected to the El Dorado Refinery by two 16” delivery lines, together with associated piping necessary for Product movements into and out of the El Dorado Crude Tankage (the “El Dorado Delivery Lines”). HEP Operating will operate the El Dorado Delivery Lines for HFRM’s exclusive use. HEP Operating will operate one of the 16” El Dorado Delivery Lines for Product movements from the El Dorado Crude Tankage to the El Dorado Refinery with a capacity to deliver (a) 130,000 bpd based on a maximum viscosity of 350 SUS at 60 degrees Fahrenheit when operating only one El Dorado Delivery Line, and (b) 165,000 bpd based on a maximum viscosity of 350 SUS at 60 degrees Fahrenheit when operating both El Dorado Delivery Lines. HEP Operating will operate the other 16” El Dorado Delivery Line for bidirectional use. HEP Operating will maintain the El Dorado Delivery Lines to gravity feed Product to the El Dorado Refinery or, upon request of HFRM, to pump Product to the El Dorado Refinery at a pressure of at least 25 psig (when operating one El Dorado Delivery Line) and 50 psig (when operating both El Dorado Delivery Lines), as measured at the El Dorado Refinery receipt point. HEP Operating will maintain at least two (2) full-sized pumps for this service and will operate the pumps at HFRM’s request.

 

9.

Products Testing. At HFRM’s request and upon HEP Operating’s approval, such approval not to be unreasonably withheld, delayed or conditioned, HEP Operating shall provide sampling and testing services for HFRM’s Products at the El Dorado Terminal. All fees for Product testing shall be billed to HFRM at HEP Operating’s actual cost.

 

Exhibit K-3


Exhibit K-1

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

El Dorado Crude Tankage and Jayhawk Tankage

1. El Dorado Crude Tankage:

 

Tank ID Number

 

Current Service/Product

 

Nominal Capacity, BBLs

4150

  Crude   80,000

4153

  Crude   80,000

4154

  Crude   80,000

4155

  Crude   125,000

4156

  Crude   125,000

4157

  Crude   125,000

4158

  Crude   125,000

4159

  Crude   125,000

4160

  Crude   125,000

2. Jayhawk Tankage:

 

Tank ID Number

 

Current Service/Product

 

Nominal Capacity, BBLs

4151

  Crude   80,000

4152

  Crude   80,000

 

Exhibit K-1-1


Exhibit K-2

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

El Dorado Terminal Quality Specifications

Petroleum liquid that has a true vapor pressure equal to or greater than 1.5 psia but not greater than 11.1 psia.

 

Exhibit K-2-1


Exhibit L-1

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Tulsa West Tankage

 

TANK ID NUMBER

 

CURRENT

SERVICE/PRODUCT

 

NOMINAL CAPACITY, BBLS

13

  Crude/Lef   55,000

186

  Crude/Lef   55,000

187

  Crude/Lef   55,000

188

  Crude/Lef   55,000

244

  Crude/Lef   55,000

874

  Crude/Lef   121,000

 

Exhibit L-1-1


Exhibit L-2

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Special Provisions:

Tulsa West Tankage

1. XO Maintenance Operating Expense Adjustment. At the end of the Applicable Term, HEP Operating shall calculate the aggregate XO maintenance operating expenses incurred for the Tulsa West Tankage (“Actual OPEX”). In the event that the Actual OPEX exceeds the Assumed OPEX for the Tulsa West Tankage set forth on Exhibit C, HFRM shall, within ten (10) days of receiving an invoice from HEP Operating, reimburse HEP Operating an amount equal to (i) the Actual OPEX minus (ii) the Assumed OPEX (the “OPEX Reimbursement Amount”). In the event that the Actual OPEX is less than the Assumed OPEX for the Tulsa West Tankage set forth on Exhibit C, no adjustments shall be made and no amounts shall be reimbursed.

 

Exhibit L-2-1


Exhibit M

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Special Provisions: Orla Truck Terminal

Construction of Orla Truck Terminal. HEP Operating constructed the following:

 

   

approximately 50,000 BBL nominal capacity IFR tank

 

   

three lane diesel sales loading rack with associated piping and electrical and SCADA equipment that will have a throughput capacity, with further additions, of 30,000 bpd

 

   

an MCC/office building

 

   

paved access roadway, approximately .8 miles long, from the existing TXDOT FM road to the new HEP Loading Terminal

 

Exhibit M-1


Exhibit N-1

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Refined Products Pipelines

 

Pipeline

  

Origin and Destination

   Miles of
Pipeline
   Diameter
(inches)
  

Capacity
(Bpd)

South System

   Artesia, NM to El Paso, TX    156    6    19,000
   Artesia, NM to Orla, TX to El Paso, TX    221    12/8    95,000
  

Artesia, NM to El Paso, TX

(Magellan El Paso Terminal)

   140    6    24,000
  

Artesia, NM to El Paso, TX

(Magellan El Paso Terminal)

   210    12    100,000

Artesia Moriarty

   Artesia, NM to Moriarty, NM    215    12/8    27,000

Artesia Bloomfield

   Artesia, NM to Bloomfield, NM    406    12/8    Same as above

 

Exhibit N-1


Exhibit N-2

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Refined Products Terminals and Terminalling Fees

1. Refined Products Terminals.

 

Location

  

Storage Capacity (bbls)

  

Number of Tanks

Moriarty, NM

   211,000    9

Mountain Home, ID

   122,000    4

Spokane, WA

   532,000    32

Navajo Refinery truck rack

   N/A    N/A

Woods Cross Refinery truck rack

   N/A    N/A

2. Terminalling Fees. HEP Operating will charge the following fees for services at the Refined Products Terminals, as applicable:

 

Service

  

Fee

Truck Rack Delivery    $0.3500 per barrel
Handling Fees for Products Provided by Shipper (Ethanol, Biodiesel, Isobutane, etc)    $0.08 per blended barrel
Gasoline and Diesel Additives (lubricity, red dye, generic and proprietary gasoline additives, etc.)    $0.08 per additized barrel + Cost of Additive per additized barrel

For the avoidance of doubt, the Amended and Restated Unloading and Blending Services Agreement, which governs the ethanol and biodiesel blending services performed at the refined product truck rack by HEP Operating in Artesia, shall remain in full force and effect.

The fees shall be adjusted on July 1 of each calendar year by an amount equal to the upper change in the annual change rounded to four decimal places of the Producers Price Index-Commodities-Finished Goods, (PPI), et al. (“PPI”), produced by the U.S. Department of Labor, Bureaus of Labor Statistics. The series ID is WPUFD49207 as of June 1, 2016 – located at http://www.bls.gov/data/. The change factor shall be calculated as follows: annual PPI index (most current year) less annual PPI index (most current year minus 1) divided by annual PPI index (most current year minus 1). An example for year 2014 change is: [PPI (2013) – PPI (2012)] / PPI (2012) or (197.3 – 193.3) / 193.3 or .021 or 2.1%. If the PPI index change is negative in a given year then there will be no change in the fees.

3. Applicable Term. The Applicable Term with respect to the Refined Products Terminals shall commence at 12:01 a.m. on July 1, 2019 and end at 12:01 a.m. on July 1, 2029.

 

Exhibit N-2


Exhibit N-3

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Special Provisions: Refined Products Pipelines and Refined Products Terminals

1. Obligations of HEP Operating.

HFRM acknowledges and agrees that HEP Operating’s obligations pursuant to Section 2.5 of the Agreement with respect to the Refined Products Pipelines are subject to: (i) HEP Operating’s ability to renew the MAPL Lease, provided, that if the MAPL Lease is terminated or expires, HFRM and HEP Operating shall renegotiate the minimum volume commitment for the Artesia Bloomfield Pipeline and the Artesia Moriarty Pipeline taking into account the volumes that HFRM is unable to ship due to loss of pipeline space; and (ii) HEP Operating’s ability to permanently remove from service any of the pipelines comprising the South System if HEP Operating determines in good faith that such pipeline cannot be operated safely in accordance with HEP Operating’s historical operating practices; provided, that the remaining pipelines in the South System continue to provide sufficient capacity to allow HFRM to satisfy its minimum volume commitment on the South System.

2. Drag Reducing Agents and Additives.

HEP Operating will reimburse HFRM for the cost of DRA furnished by HFRM for use on the South System on a 50/50 basis until each of HFRM and HEP Operating expends $250,000 annually, with 100% of the cost over $500,000 annually to be covered by HFRM. HEP Operating will use its commercially reasonable efforts to minimize use of DRA on the South System and maximize use of HEP Operating’s existing horsepower; provided, that in the event HEP Operating determines that it is not economically advantageous for HEP Operating to operate the South System in a manner that maximizes use of HEP Operating’s existing horsepower and minimizes the use of DRA, then HEP Operating may use DRA in lieu of horsepower and the cost of such DRA is borne solely by HEP Operating and does not count towards HEP Operating’s share of the cost of DRA stated above.

3. Taxes.

Notwithstanding anything to the contrary in Section 2.10 of the Agreement, HFRM will reimburse HEP Operating for New Mexico gross receipts tax, if applicable, but not income tax, levied on or with respect to the services provided by HEP Operating to HFRM with respect to the Refined Products Pipelines and Refined Products Terminals.

4. Deficiency Payments.

Notwithstanding anything to the contrary in Article 10 of the Agreement, HFRM and HEP Operating agree that deficiency payments with respect to the Refined Products Pipelines will be credited against any payments owed by HFRM in the following four Contract Quarters in excess of the Minimum Commitment for such Calendar Quarters; provided, however, that HFRM will not receive credit for any deficiency payment in any of the following four Contract Quarters until they have met the Minimum Commitment in the succeeding Contract Quarter.

 

Exhibit N-3


Exhibit O-1

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Special Provisions: Cushing Connect Pipeline

1. Obligations of HEP Operating.

HFRM acknowledges and agrees that HEP Operating’s obligations pursuant to Section 2.5 of the Agreement with respect to the Cushing Connect Pipeline are subject to the continued effectiveness of the Capacity Use Agreement between HEP Operating and Cushing Connect Pipeline Holdings LLC, dated October 2, 2019 (as the same may be amended from time to time, the “Cushing Connect Capacity Use Agreement”).

2. Term.

Notwithstanding anything to the contrary in Article 7 of the Agreement and subject to Section 1 of this Exhibit O-1, HFRM and HEP Operating agree that the Applicable Term with respect to the Cushing Connect Pipeline will automatically terminate upon the expiration or earlier termination of the Cushing Connect Capacity Use Agreement.

Notwithstanding anything to the contrary in Article 7 of the Agreement, HFRM and HEP Operating agree that the Applicable Term with respect to the Cushing Connect Pipeline will automatically renew for successive two (2) year terms (each a “Successor Term”) unless either Party provides written notice to the other Party on or before two (2) years prior to the conclusion of the initial Applicable Term on March 31, 2036 or each Successor Term, as applicable; such written notice shall state the Party’s intent to terminate this Agreement with respect to the Cushing Connect Pipeline.

3. Construction; Reimbursement.

HEP Operating shall, or shall cause its Affiliate to, use its commercially reasonable efforts to construct the Cushing Tulsa Interconnection System. The specifications for the Cushing Tulsa Interconnection System are set forth on Exhibit O-2. HFRM shall reimburse HEP Operating for all costs, liabilities and expenses incurred by HEP Operating or its Affiliate in connection with the construction of the Cushing Tulsa Interconnection System, provided, that if HEP Operating or its Affiliate should fail to complete the Cushing Tulsa Interconnection System or if the Cushing Connect Commencement Date does not occur for a reason related to the fault of HEP Operating or its Affiliate or a matter that is solely within or under the control of HEP Operating or its Affiliate, HEP Operating shall bear all costs, liabilities and expenses with respect to the incomplete Cushing Tulsa Interconnection System, and provided, further, that if HEP Operating or its Affiliate should fail to complete the Cushing Tulsa Interconnection System or if the Cushing Connect Commencement Date does not occur for any other reason, HFRM shall reimburse HEP Operating or its Affiliate for all costs, liabilities and expenses incurred by HEP Operating or its Affiliate with respect to the incomplete Cushing Tulsa Interconnection System.

HEP Operating shall, or shall cause its Affiliate to, use its commercially reasonable efforts to construct such other pipeline, tank and other delivery point connections to accommodate and connect the Cushing Connect Pipeline as HFRM shall reasonably request from time to time, provided, that HFRM shall reimburse HEP Operating for all costs, liabilities and expenses incurred by HEP Operating or its Affiliate in connection with such additional construction, and provided, further, that if HEP Operating determines in good faith that any additional construction project requested by HFRM cannot be constructed or operated safely in accordance with HEP Operating’s historical operating practices, HEP Operating shall have no obligation to construct such additional construction project.

 

Exhibit O-1-1


4. Deficiency Payments.

Notwithstanding anything to the contrary in Article 10 of the Agreement, HFRM and HEP Operating agree that deficiency payments with respect to the Cushing Connect Pipeline will be credited against any payments owed by HFRM in the following four Contract Quarters in excess of the Minimum Commitment for such Calendar Quarters; provided, however, that HFRM will not receive credit for any deficiency payment in any of the following four Contract Quarters until they have met the Minimum Commitment in the succeeding Contract Quarter.

 

Exhibit O-1-2


Exhibit O-2

to

Sixth Amended and Restated

Master Throughput Agreement

 

 

Specifications for Cushing Tulsa Interconnection System

The Cushing Tulsa Interconnection System will be designed to receive crude oil from the Cushing Connect Pipeline at the Tulsa East Refinery and the Tulsa West Refinery.

 

1.

Tulsa West Refinery

 

  a.

The breakpoints of the Cushing Connect Pipeline and Cushing Tulsa Interconnection System will be the flange immediately downstream of the Cushing Connect Pipeline crude oil delivery meter that is to be located at the Tulsa West Refinery.

 

  b.

HEP Operating or its Affiliate will construct piping and fitting necessary to deliver crude oil from the breakpoint to tanks 13, 186, 187, 188, 244, and 874 at the Tulsa West Refinery at a rate of 7,000 barrels per hour.

 

2.

Tulsa East Refinery

 

  a.

The breakpoints of the Cushing Connect Pipeline and Cushing Tulsa Interconnection System will be the flange immediately downstream of the Cushing Connect Pipeline crude oil delivery meter that is to be located at the Tulsa East Refinery.

 

  b.

HEP Operating or its Affiliate will construct piping and fitting necessary to deliver crude oil from the breakpoint to tanks 1, 2, 3, and 8 at the Tulsa East Refinery at a rate of 7,000 barrels per hour.

 

Exhibit O-2-1

EX-10.2

Exhibit 10.2

 

 

 

TWENTIETH AMENDED AND RESTATED OMNIBUS AGREEMENT

among

HOLLYFRONTIER CORPORATION,

HOLLY ENERGY PARTNERS, L.P.

and

CERTAIN OF THEIR RESPECTIVE SUBSIDIARIES

October 2, 2019

 

 

 


TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS AND INTERPRETATIONS

     3  

1.1

  DEFINITIONS      3  

1.2

  INTERPRETATION      3  

ARTICLE II BUSINESS OPPORTUNITIES

     3  

2.1

  RESTRICTED BUSINESSES      3  

2.2

  PERMITTED EXCEPTIONS      3  

2.3

  RIGHT OF OFFER      4  

2.4

  PROCEDURE FOR OFFERING ACQUIRED OR CONSTRUCTED ASSETS TO HEP      5  

2.5

  SCOPE OF PROHIBITION      6  

2.6

  ENFORCEMENT      6  

2.7

  LIMITATION ON ACQUISITIONS OF PERMITTED ASSETS BY HEP GROUP MEMBERS      6  

2.8

  TERMINATION OF ARTICLE II      6  

ARTICLE III INDEMNIFICATION

     6  

3.1

  CONDITIONS OF INDEMNIFICATION BY THE HFC ENTITIES      6  

3.2

  INDEMNIFICATION BY THE HFC ENTITIES      7  

3.3

  CONDITIONS OF INDEMNIFICATION BY HEP ENTITIES      9  

3.4

  INDEMNIFICATION BY HEP ENTITIES      9  

3.5

  MUTUAL GENERAL INDEMNITY      9  

3.6

  EXCLUSIONS FROM INDEMNITY FOR POST-CLOSING DATE CLAIMS      10  

3.7

  INDEMNIFICATION PROCEDURES      10  

3.8

  LIMITATION ON INDEMNIFICATION OBLIGATIONS      12  

3.9

  WAIVER OF SUBROGATION      12  

ARTICLE IV GENERAL AND ADMINISTRATIVE EXPENSES

     13  

4.1

  GENERAL      13  

ARTICLE V RIGHT OF FIRST REFUSAL

     14  

5.1

  HFC RIGHT OF FIRST REFUSAL: PROHIBITION ON FURTHER TRANSFER OF TRANSFERRED ASSETS      14  

5.2

  PROCEDURES      15  

ARTICLE VI HFC PURCHASE OPTION

     17  

6.1

  OPTION TO PURCHASE TULSA TRANSFERRED ASSETS      17  

ARTICLE VII [INTENTIONALLY OMITTED]

     17  

ARTICLE VIII DISPUTE RESOLUTION

     17  

8.1

  DISPUTE RESOLUTION      17  

8.2

  ARBITRATION      18  

8.3

  CONFLICT      19  

ARTICLE IX FORCE MAJEURE

     19  

9.1

  FORCE MAJEURE      19  

ARTICLE X MISCELLANEOUS

     19  

10.1

  CHOICE OF LAW      19  

10.2

  NOTICES      20  

10.3

  ENTIRE AGREEMENT      20  

10.4

  AMENDMENT OR MODIFICATION      20  

10.5

  ASSIGNMENT      21  

 

i


10.6

  COUNTERPARTS      21  

10.7

  SEVERABILITY      21  

10.8

  FURTHER ASSURANCES      21  

10.9

  RIGHTS OF LIMITED PARTNERS      21  

10.10

  HEADINGS      21  

10.11

  LIMITATION OF DAMAGES      21  

10.12

  NATURE OF THE RELATIONSHIP      22  

EXHIBITS

 

Exhibit A - Omnibus Agreement Amendments

Exhibit B - Definitions

Exhibit C - Interpretation

Exhibit D - Asset Indemnification Summary

Exhibit E - Administrative Fee

 

ii


TWENTIETH AMENDED AND RESTATED

OMNIBUS AGREEMENT

THIS TWENTIETH AMENDED AND RESTATED OMNIBUS AGREEMENT (this “Agreement”) is being entered into effective as of October 2, 2019 (the “Effective Date”), by and among the following entities (all Delaware limited liability companies unless otherwise noted):

 

HollyFrontier Corporation, a Delaware corporation (“HFC”), and its Affiliates listed below (singularly, “HFC Entity”; and with HFC collectively, the “HFC Entities”):
  El Paso Operating LLC (“El Paso Operating”)
  HollyFrontier El Dorado Refining LLC (“HollyFrontier El Dorado”)
  HollyFrontier Cheyenne Refining LLC (“HollyFrontier Cheyenne”)
  HollyFrontier Tulsa Refining LLC (“HollyFrontier Tulsa”)
  HollyFrontier Woods Cross Refining LLC (“HollyFrontier Woods Cross”)
  Navajo Pipeline Co., L.P., a Delaware limited partnership (“Navajo Pipeline”)
  HollyFrontier Navajo Refining LLC (“HollyFrontier Navajo”)
               HollyFrontier Refining & Marketing LLC (“HFRM”)
  HollyFrontier Transportation LLC (“HollyFrontier Transportation”)
AND
Holly Energy Partners, L.P., a Delaware limited partnership (“HEP”), and its Affiliates listed below (singularly, “HEP Entity”; and with HEP collectively, the “HEP Entities”):
  Cheyenne Logistics LLC (“Cheyenne Logistics”)
  El Dorado Logistics LLC (“El Dorado Logistics”)
  El Dorado Operating LLC (“El Dorado Operating”)
  El Dorado Osage LLC (“El Dorado Osage”)
  Frontier Aspen LLC
  HEP Cushing LLC (“HEP Cushing”)
  HEP El Dorado LLC (“HEP El Dorado”)
  HEP Logistics GP, L.L.C. (the “OLP GP”)
  HEP Logistics Holdings, L.P., a Delaware limited partnership (the “General Partner”)
  HEP Mountain Home, L.L.C.
  HEP Navajo Southern, L.P., a Delaware limited partnership
  HEP Oklahoma LLC
  HEP Fin-Tex/Trust-River, L.P.

 

1


 

HEP Pipeline Assets, Limited Partnership, a Delaware limited partnership

            

 

HEP Pipeline GP, L.L.C.

 

HEP Pipeline, L.L.C. (“HEP Pipeline”)

 

HEP Refining Assets, L.P., a Delaware limited partnership (“HEP Refining Assets”)

 

HEP Refining GP, L.L.C.

 

HEP Refining, L.L.C. (“HEP Refining”)

 

HEP Tulsa LLC (“HEP Tulsa”)

 

HEP UNEV Holdings LLC (“HEP UNEV”)

 

HEP UNEV Pipeline LLC (“HEP UNEV Pipeline”)

 

HEP Woods Cross, L.L.C.

 

Holly Energy Partners – Operating, L.P., a Delaware limited partnership (the “Operating Partnership”)

 

Holly Energy Storage – Lovington LLC

 

Holly Logistic Services, L.L.C. (“Holly GP”),

 

Lovington-Artesia, L.L.C.

 

NWNAL LLC

 

Roadrunner Pipeline, L.L.C. (“Roadrunner”)

 

SLC Pipeline LLC

 

Woods Cross Operating LLC (“Woods Cross Operating”)

This Agreement amends and restates in its entirety the Nineteenth Amended and Restated Omnibus Agreement which was entered into on October 29, 2018 and effective as of June 1, 2018, among certain of the HFC Entities and certain of the HEP Entities which were signatories thereto (the “Previous Amended and Restated Omnibus Agreement”).

RECITALS:

WHEREAS, the Parties entered into an Omnibus Agreement on July 13, 2004 (as amended, the “Original Omnibus Agreement”) to evidence their agreement with respect to various administrative, indemnity and other obligations, which agreement has been further amended and restated as set forth on Exhibit A, resulting in the Previous Amended and Restated Omnibus Agreement.

WHEREAS, the Parties desire to amend and restate the Previous Amended and Restated Omnibus Agreement as provided herein in order to, among other things, consolidate terms from various other agreements between the parties and to clarify terms as more particularly set forth herein.

 

2


AGREEMENT:

NOW, THEREFORE, in consideration of the premises and the covenants, conditions and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATIONS

1.1 Definitions. Capitalized terms used throughout this Agreement and not otherwise defined herein shall have the meanings set forth on Exhibit B.

1.2 Interpretation. Matters relating to the interpretation of this Agreement are set forth on Exhibit C.

ARTICLE II

BUSINESS OPPORTUNITIES

2.1 Restricted Businesses. For so long as a HFC Group Member owns a controlling interest in the general partner of HEP, and except as permitted by Section 2.2, Holly GP and each HFC Group Member shall be prohibited from engaging in or acquiring a controlling interest in or operating any business having assets or operations engaged in the Restricted Businesses.

2.2 Permitted Exceptions. Notwithstanding any provision of Section 2.1 to the contrary, Holly GP and the HFC Group Members may engage in the following activities under the following circumstances:

 

  (a)

the ownership and/or operation of any of the Retained Assets (including replacements of the Retained Assets);

 

  (b)

any Restricted Businesses conducted by a HFC Group Member and Holly GP with the approval of the General Partner;

 

  (c)

the ownership and/or operation of Restricted Businesses by an HFC Entity or Holly GP in its capacity as general partner of HEP or its general partner;

 

  (d)

the ownership and/or operation of any asset or group of related assets used in the Restricted Business that are acquired or constructed by a HFC Group Member or Holly GP after the Closing Date (the “Permitted Assets”), the fair market value of which (as determined in good faith by the Board of Directors of HFC) is as follows:

 

  (i)

less than $5 million at the time of such acquisition or good faith estimate of construction costs, as the case may be; or

 

  (ii)

equal to or greater than $5 million at the time of the acquisition or good faith estimate of construction costs; provided, HEP has been offered the opportunity to purchase the Permitted Assets in accordance with Section 2.3 and HEP has elected not to purchase the Permitted Assets;

 

  (e)

the ownership of the UNEV Profits Interest;

 

  (f)

the ownership of limited or any general partnership interests in HEP; and

 

  (g)

the ownership and/or operation of the El Paso Hawkins Terminal.

 

3


2.3 Right of Offer.

 

  (a)

If Holly GP or a HFC Group Member becomes aware of an opportunity to acquire Permitted Assets with a fair market value (as determined in good faith by the Board of Directors of HFC) equal to or greater than $5 million, then, subject to Section 2.3(c), as soon as practicable, Holly GP or such HFC Group Member shall notify HEP of such opportunity and deliver to HEP, or provide HEP access to all information prepared by or on behalf of, or material information submitted or delivered to, Holly GP or such HFC Group Member relating to such potential transaction. As soon as practicable, but in any event within 30 days after receipt of such notification and information, HEP shall notify Holly GP or the HFC Group Member that it has either elected:

 

  (i)

not to cause a HEP Group Member to pursue the opportunity to purchase the Permitted Assets, or

 

  (ii)

to cause a HEP Group Member to pursue the opportunity to purchase the Permitted Assets, in which case the applicable Parties shall follow the procedures in Section 2.4.

 

  (b)

If, at any time, HEP abandons such opportunity (as evidenced in writing by HEP to the HFC Group Member), Holly GP or the HFC Group Member may pursue such opportunity. Any Permitted Assets which are permitted to be acquired by Holly GP or a HFC Group Member must be so acquired:

 

  (i)

within 12 months of the later to occur of the date that Holly GP or the HFC Group Member becomes able to pursue such acquisition in accordance with the provisions of this Section 2.3, and (b) the date upon which all required governmental approvals to consummate such acquisition have been obtained, and

 

  (ii)

on terms not materially more favorable to Holly GP or the HFC Group Member than were offered to HEP.

If either of these conditions are not satisfied, the opportunity must be reoffered to HEP in accordance with Section 2.3(a).

 

  (c)

Section 2.3(a) shall not apply if Holly GP or a HFC Group Member:

 

  (i)

becomes aware of an opportunity to make an acquisition that includes Permitted Assets and assets that are not Permitted Assets, and the Permitted Assets have a fair market value (as determined in good faith by the Board of Directors of HFC) equal to or greater than $5 million but comprise less than half of the fair market value (as determined in good faith by the Board of Directors of HFC) of the total assets being considered for acquisition, or

 

  (ii)

desires to construct Permitted Assets with an estimated construction cost (as determined in good faith by the Board of Directors of HFC) equal to or greater than $5 million;

 

4


provided, however, that in each case Holly GP or a HFC Group Member, as the case may be, shall comply with Section 2.4.

2.4 Procedure for Offering Acquired or Constructed Assets to HEP.

 

  (a)

Within 180 days after the consummation of the acquisition or the completion of construction by Holly GP or a HFC Group Member of the Permitted Assets, as the case may be, Holly GP or the HFC Group Member shall notify HEP in writing of such acquisition or construction and offer HEP the opportunity to purchase such Permitted Assets (the “Offer”). The Offer shall set forth the terms relating to the purchase of the Permitted Assets, and, if Holly GP or any HFC Group Member desires to utilize the Permitted Assets, the Offer will also include (i) the commercially reasonable terms on which the HEP Group will provide services to Holly GP or the HFC Group Member to enable Holly GP or the HFC Group Member to utilize the Permitted Assets and (ii) the terms of any service agreements, leases or access agreements to be provided to HEP by Holly GP or the HFC Group relating to such assets. As soon as practicable, but in any event within 30 days after receipt of such written notification, HEP shall notify Holly GP or the HFC Group Member in writing that HEP has elected (i) not to cause a HEP Group Member to purchase the Permitted Assets, in which event Holly GP or the HFC Group Member shall be forever free to continue to own or operate such Permitted Assets, or (ii) to cause a HEP Group Member to purchase the Permitted Assets, in which event Section 2.4(b) and Section 2.4(c) shall apply.

 

  (b)

If within 60 days after receipt by HEP of the Offer, Holly GP or the HFC Group Member and HEP are able to agree on the fair market value of the subject Permitted Assets and the other terms of the Offer including, the terms, if any, on which the HEP Group will provide services to Holly GP or the HFC Group Member to enable it to utilize the Permitted Assets, a HEP Group Member shall purchase the Permitted Assets for the agreed upon fair market value as soon as commercially practicable after such agreement has been reached and, if required by the Offer or otherwise agreed, enter into an agreement with Holly GP or the HFC Group Member to provide services in a manner consistent with the Offer.

 

  (c)

If Holly GP or the HFC Group Member and HEP are unable to agree within 60 days after receipt by HEP of the Offer on the fair market value of the subject Permitted Assets and/or the other terms of the Offer, Holly GP or the HFC Entity, on the one hand, and HEP, on the other hand, will engage a mutually agreed upon investment banking firm to determine the disputed terms. Such investment banking firm will determine the disputed terms within 30 days of its engagement and furnish Holly GP or the HFC Group Member, on the one hand, and HEP, on the other hand, its determination. The fees of the investment banking firm will be split equally between Holly GP or the HFC Group Member, on the one hand, and HEP, on the other hand. Once the investment banking firm has submitted its determination of the disputed terms, HEP will have the right, but not the obligation, to cause a HEP Group Member to purchase the Permitted Assets pursuant to the Offer as modified by the determination of the investment banking firm. HEP will provide written notice of its decision to Holly GP or the HFC Group Member within 30 days after the investment banking firm has submitted its determination. Failure to provide such notice within such 30-day period shall be deemed to constitute a decision not to purchase the Permitted Assets. If HEP elects to cause

 

5


  a HEP Group Member to purchase the Permitted Assets, then the HEP Group Member shall purchase the Permitted Assets pursuant to the Offer as modified by the determination of the investment banking firm as soon as commercially practicable after such determination and, if applicable, enter into an agreement with Holly GP or the HFC Group Member to provide services in a manner consistent with the Offer, as modified by the determination of the investment banking firm, if applicable.

2.5 Scope of Prohibition. Except as provided in this Article II and the Partnership Agreement, Holly GP and each HFC Group Member shall be free to engage in any business activity, including those that may be in direct competition with any HEP Group Member.

2.6 Enforcement. Holly GP and the HFC Group Members agree and acknowledge that the HEP Group does not have an adequate remedy at law for the breach by Holly GP and the HFC Group of the covenants and agreements set forth in this Article II, and that any breach by Holly GP and the HFC Group of the covenants and agreements set forth in this Article II would result in irreparable injury to the HEP Group. Holly GP and the HFC Group Members further agree and acknowledge that any HEP Group Member may, in addition to the other remedies that may be available to the HEP Group, file a suit in equity to enjoin Holly GP and the HFC Group from such breach and hereby consent to the issuance of injunctive relief under this Agreement.

2.7 Limitation on Acquisitions of Permitted Assets by HEP Group Members. Notwithstanding anything in this Agreement to the contrary, a HEP Group Member who is not a party to this Agreement is prohibited from acquiring Permitted Assets. In the event HEP desires a HEP Group Member who is not a party to this Agreement to acquire any Permitted Assets, then the General Partner shall first cause such HEP Group Member to become a party to this Agreement.

2.8 Termination of Article II. The provisions of this Article II may be terminated by HFC upon a Change of Control of HFC.

ARTICLE III

INDEMNIFICATION

3.1 Conditions of Indemnification by the HFC Entities. All indemnities set forth in Section 3.2 are subject to the following conditions:

 

  (a)

Except for the indemnity in Sections 3.2(a)(ii), (vii) and (viii), indemnities apply only to the Transferred Assets and only until the applicable expiration date, if any, related to each such Transferred Asset shown on Exhibit D.

 

  (b)

The aggregate liability of the HFC Entities for all Covered Environmental Losses under Section 3.2(a) shall not exceed the amounts shown in column (b) on Exhibit D. The liability limits listed in column (b) represent separate individual limits for each location.

 

  (c)

Indemnities in Section 3.2(a)(i) apply only to the extent that such events or conditions occurred before the applicable Closing Date.

 

6


3.2 Indemnification by the HFC Entities.

 

  (a)

Subject to Section 3.1, the HFC Entities shall indemnify, defend and hold harmless the HEP Entities from and against any Liability or Claim incurred by the HEP Entities or any Third Party to the extent arising out of:

 

  (i)

the Covered Environmental Losses relating to the Transferred Assets to the extent caused by the acts or omissions of an HFC Entity;

 

  (ii)

the ownership or operation by HFC and its Affiliates of any asset not constituting part of the Transferred Assets, except to the extent arising out of the negligent acts or omissions or willful misconduct of HEP or any of its Affiliates;

 

  (iii)

the failure of the applicable HEP Entity to be the owner of valid and indefeasible easement rights or fee ownership for interests in and to the lands on which any pipeline or related pump station, tank farm or equipment conveyed or contributed or otherwise Transferred (including by way of a Transfer of the ownership interest of a Person or by operation of law) to the applicable HEP Entity on the applicable Closing Date;

 

  (iv)

the failure of the applicable HEP Entity to have the consents, licenses and permits necessary to allow any such Transferred Assets referred to in Section 3.2(a)(iii) to cross the roads, waterways, railroads and other areas upon which any such Transferred Assets are located as of the Closing Date;

 

  (v)

the cost of curing any condition set forth in clauses (iii) or (iv) above to the extent such conditions do not allow any Transferred Asset to be operated in accordance with Prudent Industry Practice;

 

  (vi)

the following:

 

  (A)

events and conditions associated with the operation of the Transferred Assets before the Closing Date (other than Covered Environmental Losses which are provided for under Section 3.2(a)(i) and events and conditions covered by Section 3.4);

 

  (B)

all legal actions pending against the HFC Entities on July 13, 2004;

 

  (C)

the completion of remediation projects at the respective HEP Entity’s El Paso Hawkins Terminal, Albuquerque terminal and Mountain Home terminal that were ongoing or scheduled as of July 13, 2004;

 

  (D)

events and conditions associated with the Retained Assets and whether occurring before or after the Closing Date;

 

  (E)

all federal, state and local tax liabilities attributable to the operation or ownership of the Transferred Assets prior to the applicable Closing Date, including any such tax liabilities of the HFC Entities that may result from the consummation of the formation transactions for the HEP Entities and the General Partner; and

 

7


  (F)

any breach by HollyFrontier Tulsa of the representations and warranties set forth in Section 3.9 of the Master Lease and Access Agreement.

 

  (vii)

the operation by HEP and its Affiliates of any assets owned by HFC or any of its Affiliates, except to the extent arising out of the gross negligence or willful misconduct of HEP or any of its Affiliates;

 

  (viii)

any failure to perform any covenant or agreement made or undertaken by HFC or its Affiliates in the (A) Master Lease and Access Agreement, or the exercise by HFC or its Affiliates of any rights and obligations under Section 2.2 thereof; or (B) Services and Secondment Agreement; except in either case to the extent arising out of the willful misconduct or negligence (standard negligence or gross negligence) of HEP or any of its Affiliates; and

 

  (ix)

any failure of HEP or any of its Affiliates to perform its obligations pursuant to the Storage and Handling Agreement to the extent arising after February 22, 2016, except to the extent arising out of gross negligence and willful misconduct of HEP or any of its Affiliates.

 

  (b)

The indemnities provided for in Section 3.2(a)(i) through (v) shall only apply if the HFC Entities are notified in writing of any of the foregoing prior to the applicable expiration date listed in column (b) on Exhibit D.

 

  (c)

The indemnities provided for in Section 3.2(a)(vi) shall only apply if to the extent that the HFC Entities are notified in writing of any of the following events and conditions within five years after the applicable Closing Date.

 

  (d)

Notwithstanding anything in this Agreement to the contrary, because HEP has been involved since the inception with the following Transferred Assets, as used in this Section 3.2, the definition of “Transferred Assets” shall not include the 16” Lovington/Artesia Intermediate Pipeline, the Beeson Pipeline, the Roadrunner Pipeline, the Tulsa Interconnecting Pipelines, and the UNEV Pipeline.

 

  (e)

To the extent that a good faith Claim by the HEP Entities for indemnification under Section 3.2(a) arises from events or conditions at the Transferred Tanks or the soil immediately underneath the Transferred Tanks or the Transferred Tanks’ secondary containment, and the HFC Entities refuse to provide such indemnification, then the burden of proof shall be on the HFC Entities to demonstrate that the events or conditions giving rise to the Claim arose after the Closing Date.

 

  (f)

As used in this Section 3.2, “Affiliates” of the Indemnifying Party shall not include the HEP Group Members when a HFC Entity is the Indemnifying Party and shall not include the HFC Group Members when the Indemnifying Party is a HEP Entity.

 

8


3.3 Conditions of Indemnification by the HEP Entities. The indemnities set forth in Section 3.4 apply only to the extent that such events or conditions occurred on or after the applicable Closing Date, if any.

3.4 Indemnification by the HEP Entities.

 

  (a)

Subject to Section 3.3, the HEP Entities shall indemnify, defend and hold harmless the HFC Entities from and against any Liability or Claim suffered or incurred by the HFC Entities or any Third Party to the extent arising from:

 

  (i)

the Covered Environmental Losses associated with operation of (A) the Other Assets (except as otherwise indicated in Exhibit D, Part 2), and (B) the Transferred Assets by a Person (other than a HFC Entity or ownership and operation of the Transferred Assets by a Person other than a HFC Entity);

 

  (ii)

operation by HEP and HEP’s Affiliates of any asset owned by HFC or any of HFC’s Affiliates but only to the extent caused by the gross negligence or willful misconduct of any of the HEP Entities; and

 

  (iii)

any failure to perform any covenant or agreement made or undertaken by any HEP or its Affiliates in the (A) Master Lease and Access Agreement, or the exercise by HEP or its Affiliates of any rights and obligations under Section 2.2 thereof; or (B) Services and Secondment Agreement; except in either case to the extent arising out of the willful misconduct or negligence (standard negligence or gross negligence) of HFC or any of its Affiliates.

 

  (b)

Nothing set forth in Section 3.4(a) shall make the HEP Entities responsible for any post-Closing Date negligent actions or omissions or willful misconduct by the HFC Entities.

 

  (c)

Notwithstanding Section 3.4(a)(i), the indemnity provided for in Section 3.4(a)(i) shall only apply to the El Dorado Repurchased Tanks to the extent the Environmental Losses arise from a violation, correction, event or condition occurring during the period that El Dorado Logistics owned such Repurchased Tanks.

3.5 Mutual General Indemnity. Following the applicable Closing Dates, the HFC Entities and the HEP Entities, respectively, agree to indemnify, protect, defend and hold harmless each other from and against any and all Liabilities and Claims based upon, in connection with, relating to or arising out of their respective actions or inactions in connection with the operation of the Indemnifying Party’s respective assets or any failure to comply with any Applicable Laws; in any case of or by any Indemnifying Party or its subcontractors, suppliers, materialmen, employees, agents, successors and assigns, or other persons directly or indirectly employed by them, including the following:

 

  (a)

any injury to or death of any Person or the damage to or theft, destruction, loss or loss of use of, any property; or

 

  (b)

the failure to perform any covenant or agreement made or undertaken by the applicable Party in agreements with any of the other Parties.

 

9


3.6 Exclusions from Indemnity for Post-Closing Date Claims. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, FOR ANY LIABILITIES OR CLAIMS ARISING OUT OF EVENTS OCCURRING AFTER AN APPLICABLE CLOSING DATE:

 

  (a)

EXCEPT AS EXPRESSLY PROVIDED IN SECTION 3.2(a)(vii), THE INDEMNIFICATION OBLIGATIONS HEREIN SHALL NOT EXTEND TO THE PROPORTIONATE AMOUNT OF ANY SUCH LIABILITY OR CLAIM CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNITEE OR ITS AGENTS OR EMPLOYEES.

 

  (b)

No statute, rule or regulation that precludes an injured party from bringing an action against a fellow employee or employer shall preclude a Party from seeking and obtaining a judicial determination of the fault or negligence of such Persons.

 

  (c)

Each Party shall be responsible for any insurance deductibles or self-insured retention arising out of any Liability or Claim to the extent such Liability or Claim arises out of the negligence or willful misconduct of such Party, except to the extent the subrogation waiver provided for in Section 3.9 applies to such Liability or Claim.

3.7 Indemnification Procedures.

 

  (a)

The Indemnified Party agrees that promptly after it becomes aware of facts giving rise to a Claim for indemnification under this Article III, it will provide notice thereof in writing to the Indemnifying Party, specifying the nature of and specific basis for such Claim.

 

  (b)

The Indemnifying Party shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the Indemnified Party that are covered by the indemnification under this Article III, including, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided, however, that no such settlement shall be entered into without the consent of the Indemnified Party unless it includes a full release of the Indemnified Party from such matter or issues, as the case may be.

 

  (c)

The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with respect to all aspects of the defense of any Claims covered by the indemnification under this Article III, including, the prompt furnishing to the Indemnifying Party of any correspondence or other notice relating thereto that the Indemnified Party may receive, permitting the name of the Indemnified Party to be utilized in connection with such defense, the making available to the Indemnifying Party of any files, records or other information of the Indemnified Party that the Indemnifying Party considers relevant to such defense and making available to the Indemnifying Party any employees of the Indemnified Party.

 

  (d)

In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in Section 3.7(c) be construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in connection with the defense of any Claims covered by the indemnification set forth in this Article III; provided, however, that the Indemnified Party may, at its own option, cost and

 

10


  expense, hire and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party informed as to the status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense.

 

  (e)

In connection with the indemnities in this Article III, Indemnifying Party:

 

  (i)

agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party;

 

  (ii)

agrees to enter into a joint defense agreement with Indemnifying Party in order to allow communication by counsel if Indemnified Party elects to involve separate counsel; and

 

  (iii)

agrees to maintain the confidentiality of all files, records, and other information furnished by the Indemnified Party pursuant to this Section 3.7.

 

  (f)

The amounts for which an Indemnified Party is entitled to indemnification under this Article III shall be reduced by the net amounts recovered by the Indemnified Party pursuant to contractual indemnities from any Third Party (other than pursuant to insurance policies that are not required to include a waiver of subrogation pursuant to Section 3.9) after deducting the reasonable unreimbursed out-of-pocket fees and expenses incurred by the Indemnified Party in recovering such amounts (the “Net Recovery”). If the Indemnified Party receives a Net Recovery subsequent to an indemnification payment by the Indemnifying Party under this Article III, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification payment up to Net Recovery. An Indemnified Party shall be obligated to pursue all contractual indemnities (including insurance claims) that such Indemnified Party has with any Third Party, provided, however, if the Indemnified Party’s right to such indemnification is assignable, the Indemnified Party may, in its sole discretion and in lieu of pursuing such claim, elect to assign such indemnification claim to the Indemnifying Party to pursue and shall reasonably cooperate with the Indemnifying Party (including, making its relevant books, records, officers, information and testimony reasonably available to the Indemnifying Party) in the Indemnifying Party’s pursuit of such claim.

 

  (g)

For avoidance of doubt, no Claim may be asserted pursuant to Section 3.2 or Section 3.4 following the applicable expiration of the indemnity related to such Claim; provided that any Claim asserted in writing prior to the expiration date of such indemnity that is the basis for such Claim shall survive until such Claim is finally resolved and satisfied. The date on which notification of a Claim for indemnification is received by the Indemnifying Party shall determine whether such Claim is timely made.

 

11


3.8 Limitation on Indemnification Obligations.

 

  (a)

Notwithstanding anything in this Agreement to the contrary, when referring to the indemnification obligations of the HFC Entities in Article III, the definition of HFC Entities shall be deemed to mean solely (i) the HFC Entity or HFC Entities that own or operate, or owned or operated immediately prior to the transfer to the HEP Entities, the Retained Asset, Transferred Asset or other property in question with respect to which indemnification is sought by reason of such HFC Entity’s or HFC Entities’ ownership or operation of the Retained Asset, Transferred Asset or other property in question or that is responsible for causing such loss, damage, injury, judgment, claim, cost, expense or other liability suffered or incurred by the HEP Entities for which it is entitled to indemnification under Article III and (ii) HFC.

 

  (b)

Notwithstanding anything in this Agreement to the contrary, when referring to the indemnification obligations of the HEP Entities in Article III, the definition of HEP Entities shall be deemed to mean solely (i) the HEP Entity or HEP Entities that own or operate, or previously owned or operated, the Transferred Asset or other property in question or that is responsible for causing such loss, damage, injury, judgment, claim, cost, expense or other liability suffered or incurred by the HFC Entities for which they are entitled to indemnification under Article III, (ii) HEP and Operating Partnership.

 

  (c)

For the avoidance of doubt, any indemnification obligations of the HFC Entities in Article III with respect to any indemnifiable losses incurred by or attributable to the UNEV Pipeline shall be (i) limited to an amount that is the product of (x) the amount of such losses, multiplied by (y) HEP UNEV’s direct or indirect percentage ownership interest in the UNEV Pipeline at the time such losses were incurred and (ii) payable to, for the benefit of and recoverable solely by HEP UNEV or any HEP Entity designated by HEP UNEV (and not by UNEV Pipeline, LLC).

3.9 Subrogation; Waiver of Subrogation. To the extent that any of the HFC Entities or HEP Entities in fact receive full indemnification payments pursuant to Section 3.2(a)(viii) or Section 3.4(a)(iii) hereof, as the case may be, the HFC Entity or HEP Entity paying such Claim shall be subrogated to the receiving party’s rights with respect to the transaction or event requiring or giving rise to such indemnity. Notwithstanding the foregoing, each of the HFC Entities and the HEP Entities, hereby waives and releases, and shall cause their respective insurers, to waive and release, all rights against each other and any of their respective contractors, subsidiaries, consultants, agents and employees for loss or damages to any of the Transferred Assets to the extent of fire and other hazards covered by property insurance applicable to the property to which such loss or damage occurs, except such rights as they have to proceeds of such insurance. For the purposes of this Section 3.9, all deductibles shall be considered insured losses. Without limiting the foregoing, all of the Parties’ policies of property insurance for the Transferred Assets shall be endorsed to provide a complete waiver for the benefit of the other Parties and their Affiliates of (i) any right of recovery which the insurer may have or acquire against the other Parties or any of its Affiliates, or its or their employees, officers or directors for payments made or to be made under such policies and (ii) any lien or right of subrogation which the insurer may have or acquire for payments made or to be made to any person or entity who asserts a Claim against such other Parties or any of its Affiliates, or its or their employees, officers or directors. The releases and waivers of subrogation set forth above in this paragraph shall apply notwithstanding any obligation of a Party to indemnify the other Party for the Claim(s) at issue.

 

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ARTICLE IV

GENERAL AND ADMINISTRATIVE EXPENSES

4.1 General.

 

  (a)

The Operating Partnership will pay HFC an administrative fee (the “Administrative Fee”), payable in equal quarterly installments, for the provision by HFC and its Affiliates for the HEP Group’s benefit of all the general and administrative services that HFC and its Affiliates provide, including, the general and administrative services listed on Exhibit E.

 

  (b)

The Administrative Fee shall be adjusted on July 1, 2018, effective as of January 1, 2018, by an amount equal to the PPI Adjustment. Thereafter, the Administrative Fee shall be adjusted on July 1 of each calendar year, commencing on July 1, 2019, by an amount equal to the PPI Adjustment. If the PPI is no longer published, then HFC and HEP shall negotiate in good faith to agree on a new index that gives comparable protection against inflation, and the same method of adjustment for increases in the new index shall be used to calculate increases in the Administrative Fee. If the Parties are unable to agree, a new index will be determined by the dispute resolution process in Article VIII.

 

  (c)

At the end of each year, either Party will have the right to submit to the other Party a proposal to change the Administrative Fee for that year and/or the method of adjusting the Administrative Fee if either Party believes in good faith that the general and administrative services performed by HFC and its Affiliates for the benefit of the HEP Group for the year in question are inconsistent with the Administrative Fee for that year. If either Party submits such a proposal, the Parties agree that they will negotiate in good faith to determine if the Administrative Fee for that year should be changed and, if so, the amount of such change. If the Parties are unable to agree, the Parties will submit the matter to dispute resolution pursuant to Article VIII.

 

  (d)

The Administrative Fee shall not include and the HEP Group shall reimburse HFC and its Affiliates for:

 

  (i)

salaries of employees of HFC or its Affiliates, to the extent, but only to the extent, such employees perform services for the HEP Group;

 

  (ii)

the cost of employee benefits relating to employees of HFC or its Affiliates, such as 401(k), pension, and health insurance benefits, to the extent, but only to the extent, such employees perform services for the HEP Group and have not been paid by HEP pursuant to the Master Site Services Agreement and the Services and Secondment Agreement;

 

  (iii)

any amounts payable under the Master Site Services Agreement and the Services and Secondment Agreement;

 

  (iv)

all sales, use, excise, value added or similar taxes, if any, that may be applicable from time to time in respect of the services provided by the HFC and its Affiliates to HEP pursuant to Section 4.1(a); and

 

  (v)

all premiums for insurance policies carried for and on behalf of HEP.

 

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  (e)

Either HFC, on the one hand, or HEP, on the other hand, may terminate this Article IV, by providing the other with written notice of its election to do so at least six months prior to the proposed date of termination.

ARTICLE V

RIGHT OF FIRST REFUSAL

5.1 HFC Right of First Refusal: Prohibition on Transfer.

 

  (a)

The HEP Entities hereby grant to HFC a right of first refusal on any proposed Transfer (other than a grant of a security interest to a bona fide third-party lender or a Transfer to another HEP Group Member) of any of the Assets.

 

  (b)

The HEP Entities are prohibited from Transferring any of the Assets to a HEP Group Member that is not a party to this Agreement. In the event the HEP Entities desire to Transfer any of the Assets to a HEP Group Member that is not a Party to this Agreement, they shall first cause the proposed transferee HEP Group Member to become a Party to this Agreement.

 

  (c)

The Parties acknowledge that all potential Transfers of Sale Assets pursuant to this Article V are subject to obtaining any and all required written consents of governmental authorities and other third parties and to the terms of all existing agreements in respect of the Sale Assets.

 

  (d)

Notwithstanding anything in this Agreement to the contrary, as used in Article V the definition of “Assets” shall not include the Tulsa Transferred Assets, the UNEV Pipeline, the Osage Pipeline or the Cushing Connect Pipeline, but shall expressly include the equity interests of UNEV Pipeline, LLC, HEP UNEV Pipeline, HEP UNEV, El Dorado Osage, Osage, HEP Cushing and Cushing Connect then owned directly or indirectly by the HEP Entities.

 

  (e)

Notwithstanding anything in this Agreement to the contrary, the Parties acknowledge that all potential Transfers of the Orla Truck Terminal pursuant to this Article V are subject to the rights of ALON pursuant to the ALON Purchase Agreement.

 

  (f)

Notwithstanding anything in this Agreement to the contrary, the Parties acknowledge that all potential transfers of the equity interests of UNEV Pipeline, LLC, Osage and Cushing Connect are subject to the rights of the other members of UNEV Pipeline, LLC, Osage and Cushing Connect, respectively, pursuant to the applicable limited liability company operating agreement.

 

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5.2 Procedures.

 

  (a)

If a HEP Entity proposes to Transfer any of the Assets to any Person pursuant to a bona fide third-party offer (an “Acquisition Proposal”), then HEP shall promptly give written notice (a “Disposition Notice”) thereof to HFC. The Disposition Notice shall set forth the following information in respect of the proposed Transfer:

 

  (i)

the name and address of the prospective acquiror (the “Proposed Transferee”);

 

  (ii)

the Assets subject to the Acquisition Proposal (the “Sale Assets”);

 

  (iii)

the purchase price offered by such Proposed Transferee (the “Offer Price”);

 

  (iv)

reasonable detail concerning any non-cash portion of the proposed consideration, if any, to allow HFC to reasonably determine the fair market value of such non-cash consideration;

 

  (v)

the HEP Entities’ estimate of the fair market value of any non-cash consideration; and

 

  (vi)

all other material terms and conditions of the Acquisition Proposal that are then known to the HEP Entities.

 

  (b)

To the extent the Acquisition Proposal consists of consideration other than cash (or in addition to cash) the Offer Price shall be deemed equal to the amount of any such cash plus the fair market value of such non-cash consideration. In the event HFC and the HEP Entities agree as to the fair market value of any non-cash consideration, HFC will provide written notice of its decision regarding the exercise of its right of first refusal to purchase the Sale Assets within 30 days of its receipt of the Disposition Notice (the “First ROFR Acceptance Deadline”). Failure to provide such notice within such 30-day period shall be deemed to constitute a decision not to purchase the Sale Assets.

 

  (c)

In the event (i) HFC’s determination of the fair market value of any non-cash consideration described in the Disposition Notice (to be determined by HFC within 30 days of receipt of such Disposition Notice) is less than the fair market value of such consideration as determined by the HEP Entities in the Disposition Notice and (ii) HFC and the HEP Entities are unable to mutually agree upon the fair market value of such non-cash consideration within 30 days after HFC notifies the HEP Entities of its determination thereof, the HEP Entities and HFC shall engage a mutually-agreed-upon investment banking firm to determine the fair market value of the non-cash consideration. Such investment banking firm shall be instructed to return its decision within 30 days after all material information is submitted thereto, which decision shall be final. The fees of the investment banking firm will be split equally between HFC and the HEP Entities. HFC will provide written notice of its decision regarding the exercise of its right of first refusal to purchase the Sale Assets to the HEP Entities within 30 days after the investment banking firm has submitted its determination (the “Second ROFR Acceptance Deadline”). Failure to provide such notice within such 30-day period shall be deemed to constitute a decision by HFC not to purchase the Sale Assets.

 

  (d)

If HFC fails to exercise a right during any applicable period set forth in this Section 5.2, HFC shall be deemed to have waived its rights with respect to such proposed disposition of the Sale Assets, but not with respect to any future offer of such Sale Assets.

 

15


  (e)

If HFC chooses to exercise its right of first refusal to purchase the Sale Assets under Sections 5.1(a) and 5.2(c), HFC and the HEP Entities shall enter into a purchase and sale agreement for the Sale Assets which shall include the following terms:

 

  (i)

HFC will agree to deliver cash for the Offer Price (or any other consideration agreed to by HFC and the HEP Entities (each in their sole discretion));

 

  (ii)

the HEP Entities will represent that they have good, indefeasible and unencumbered title to the Sale Assets, subject to all recorded and unrecorded matters and all physical conditions and other matters in existence on the closing date for the Sale Assets, plus any other reasonable and customary matters and such matters as HFC may approve, which approval will not be unreasonably withheld. If HFC desires to obtain any title insurance with respect to the Sale Assets, the full cost and expense of obtaining the same (including the cost of title examination, document duplication and policy premium) shall be borne by HFC;

 

  (iii)

the HEP Entities will grant to HFC the right, exercisable at HFC’s risk and expense, to conduct such surveys, tests and inspections of the Sale Assets as HFC may deem desirable, so long as such surveys, tests or inspections do not damage the Sale Assets or interfere with the activities of the HEP Entities thereon and so long as HFC has furnished the HEP Entities with evidence that adequate liability insurance is in full force and effect;

 

  (iv)

HFC will have the right to terminate its obligation to purchase the Sale Assets under this Article V if the results of any searches, surveys, tests or inspections conducted pursuant to Section 5.2(e)(ii) or Section 5.2(e)(iii) above are, in the reasonable opinion of HFC, unsatisfactory;

 

  (v)

the closing date for the purchase of the Sale Assets shall, unless otherwise agreed to by HFC and the HEP Entities, occur no later than 90 days following receipt by the HEP Entities of written notice by HFC of its intention to exercise its option to purchase the Sale Assets pursuant to Section 5.2(b) or (c);

 

  (vi)

the HEP Entities shall execute, have acknowledged and deliver to HFC a special warranty deed, assignment of easement, or comparable document, as appropriate, in the applicable jurisdiction, on the closing date for the purchase of the Sale Assets constituting real property interests conveying the Sale Assets unto HFC free and clear of all encumbrances created by the HEP Entities other than those set forth in Section 5.2(e)(ii) above;

 

  (vii)

the sale of any Sale Assets shall be made on an “as is,” “where is” and “with all faults” basis, and the instruments conveying such Sale Assets shall contain appropriate disclaimers; and

 

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  (viii)

neither the HEP Entities nor HFC shall have any obligation to sell or buy the Sale Assets if any of the material consents referred to in Section 5.1(c) have not been obtained or such sale or purchase is prohibited by Applicable Law.

 

  (f)

HFC and the HEP Entities shall cooperate in good faith in obtaining all necessary governmental and other Third Party approvals, waivers and consents required for the closing. Any such closing shall be delayed, to the extent required, until the third Business Day following the expiration of any required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; provided, however, that such delay shall not exceed 120 days and, if governmental approvals and waiting periods shall not have been obtained or expired, as the case may be, by such 120th day, then HFC shall be deemed to have waived its right of first refusal with respect to the Sale Assets described in the Disposition Notice and thereafter neither HFC nor HEP shall have any further obligation under this Article V with respect to such Sale Assets unless such Sale Assets again become subject to this Article V pursuant to Section 5.2(g).

 

  (g)

If the Transfer to the Proposed Transferee is not consummated in accordance with the terms of the Acquisition Proposal within the later of (i) 180 days after the later of the applicable ROFR Acceptance Deadline, and (ii) 10 days after the satisfaction of all governmental approval or filing requirements, if any, the Acquisition Proposal shall be deemed to lapse, and the HEP Entities may not Transfer any of the Sale Assets described in the Disposition Notice without complying again with the provisions of this Article V if and to the extent then applicable.

ARTICLE VI

HFC PURCHASE OPTION

6.1 Option to Purchase Tulsa Transferred Assets. The Parties acknowledge the purchase options and right of first refusal granted to an Affiliate of HFC with respect to the Tulsa Transferred Assets in the Purchase Option Agreement.

ARTICLE VII

[Intentionally Omitted]

ARTICLE VIII

DISPUTE RESOLUTION

8.1 Dispute Resolution.

 

  (a)

Any Arbitrable Dispute arising out of or in connection with this Agreement, including any question regarding the existence, validity or termination of this Agreement, shall be exclusively resolved in accordance with this Article VIII.

 

  (b)

In the event of a Arbitrable Dispute between an HFC Entity and an HEP Entity, the HFC Entity and the HEP Entity shall, within ten (10) days of a written request by either of them to the other, meet in good faith to resolve such Arbitrable Dispute in a meeting that includes individuals with authority to resolve the Arbitrable Dispute at such meeting.

 

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  (c)

If the HFC Entity and the HEP Entity are unable to resolve the Arbitrable Dispute within ten (10) days after submission of such Arbitrable Dispute as provided in Section 8.1(b), either the HFC Entity or the HEP Entity may submit the matter to arbitration in accordance with the terms of Section 8.2 below.

 

  (d)

Pending resolution of any Arbitrable Dispute between the HFC Entity and the HEP Entity, the HFC Entity and the HEP Entity shall continue to perform in good faith their respective obligations under this Agreement based upon the last agreed performance demonstrated prior to the Arbitrable Dispute.

 

  (e)

Resolution of any Arbitrable Dispute between the HFC Entity and the HEP Entity involving payment of money by either the HFC Entity and the HEP Entity to the other shall include payment of interest at the Prime Rate from the original due date of such amount.

 

  (f)

Each of the HFC Entity and the HEP Entity shall, in addition to all rights provided herein or provided by Law, be entitled to the remedies of specific performance and injunction to enforce its rights hereunder.

8.2 Arbitration. Any and all Arbitrable Disputes must be resolved through the use of binding arbitration using three arbitrators, in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code, as amended from time to time).

 

  (a)

Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within the time period allowed by the applicable statute of limitations. Arbitration may be initiated by either party (“Claimant”) by delivering written notice to the other (“Respondent”) that the Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. The Respondent shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If the Respondent fails for any reason to name an arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed.

 

  (b)

The hearing will be conducted in Dallas, Texas and commence within thirty (30) days after the selection of the third arbitrator. The parties and the arbitrators shall proceed diligently and in good faith in order that the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators will be binding on, and non-appealable by, the Claimant and Respondent.

 

  (c)

The Claimant will pay the compensation and expenses of the arbitrator named by it, and the Respondent will pay the compensation and expenses of the arbitrator named by or for it. The Claimant and Respondent will each pay one-half of the compensation and expenses of the third arbitrator.

 

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  (d)

All arbitrators must (i) be neutral parties who have never been officers, directors or employees of any of the Parties or any of their Affiliates and who have not provided consulting services (directly or indirectly) for at least three (3) years prior to their appointment and (ii) have at least seven (7) years’ experience in the petroleum transportation industry.

 

  (e)

The arbitrators shall have no right to grant or award indirect, consequential, punitive or exemplary damages of any kind.

 

  (f)

The Arbitrable Disputes may be arbitrated in a common proceeding along with disputes under other agreements between the Claimant and Respondent to the extent that the issues raised in such disputes are related. Without the written consent of the Claimant and Respondent, no unrelated disputes (including those with Affiliates of either Claimant or Respondent) or Third Party disputes may be joined to an arbitration pursuant to this Agreement.

8.3 Conflict. If there is any inconsistency between this Article VIII and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Article VIII will control the rights and obligations of the parties seeking arbitration.

ARTICLE IX

FORCE MAJEURE

9.1 Force Majeure. In the event of any Party being rendered unable, wholly or in part, by a Force Majeure event from performing its obligations under any of the Master Agreements, Services and Secondment Agreement or this Agreement for a period of more than thirty (30) consecutive days, then, upon the delivery of notice and full particulars of the Force Majeure event relied on (“Force Majeure Notice”) to the other affected Party(ies), the obligations of the Parties, so far are they are affected by the Force Majeure event, shall be suspended during the continuance of any inability so caused. The cause of the Force Majeure event shall, as far as possible, be remedied with all reasonable dispatch, except that no Party shall be compelled to resolve any strikes, lockouts or other industrial disputes other than as it shall determine to be in its best interests.

ARTICLE X

MISCELLANEOUS

10.1 Choice of Law. This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.

 

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10.2 Notices.

 

  (a)

Any notice or other communication given under this Agreement shall be in writing and shall be delivered personally, sent by documented overnight delivery service, sent by email transmission, or sent by first class mail, postage prepaid (certified or registered mail, return receipt requested). Such notice shall be deemed to have been duly given (x) if received, on the date of the delivery, with a receipt for delivery, (y) if refused, on the date of the refused delivery, with a receipt for refusal, or (z) with respect to email transmissions, on the date the recipient confirms receipt. Notices or other communications shall be directed to the following addresses:

Notices to the HFC Entities:

HollyFrontier Corporation

2828 N. Harwood, Suite 1300

Dallas, Texas 75201

Attention: President

Email address: president@hollyfrontier.com

with a copy, which shall not constitute notice, but is required in order to give proper notice, to:

HollyFrontier Corporation

2828 N. Harwood, Suite 1300

Dallas, Texas 75201

Attention: General Counsel

Email address: generalcounsel@hollyfrontier.com

Notices to the HEP Entities:

Holly Energy Partners, L.P.

c/o Holly Logistic Services, L.L.C.

2828 N. Harwood, Suite 1300

Dallas, Texas 75201

Attention: President

Email address: president-HEP@hollyenergy.com

with a copy, which shall not constitute notice, but is required in order to give proper notice, to:

Holly Energy Partners, L.P.

c/o Holly Logistic Services, L.L.C.

2828 N. Harwood, Suite 1300

Dallas, Texas 75201

Attention: General Counsel

Email address: generalcounsel@hollyenergy.com

 

  (b)

Any Party may at any time change its address for service from time to time by giving notice to the other Parties in accordance with this Section 10.2.

10.3 Entire Agreement. This Agreement, together with the other agreements and instruments referred to herein, constitutes the entire agreement of the Parties relating to the matters contained herein, superseding as of the Effective Date all prior contracts or agreements (including the Original Omnibus Agreement), whether oral or written, relating to the matters contained herein. For avoidance of doubt the Eleventh Amended and Restated Omnibus Agreement, effective as of January 1, 2015, shall remain in full force and effect with respect to any event, act or omission occurring before January 1, 2015.

10.4 Amendment or Modification. No amendment or modification of this Agreement shall be valid unless it is in writing and signed by the parties hereto. No waiver of any provision of this Agreement shall be valid unless it is in writing and signed by the Party against whom the waiver is sought to be enforced. Any of the exhibits to this Agreement may be amended, modified, revised or updated by the Parties hereto if each of HFC (on behalf of the HFC Entities) and HEP (on behalf of the HEP Entities) execute an amended,

 

20


modified, revised or updated exhibit or schedule, as applicable, and attach it to this Agreement. Such amended, modified, revised or updated exhibits shall be sequentially numbered (e.g. Exhibit A-1, Exhibit A-2, etc.), dated and appended as an additional exhibit or schedule to this Agreement and shall replace the prior exhibit or schedule, as applicable, in its entirety, except as specified therein. No failure or delay in exercising any right hereunder, and no course of conduct, shall operate as a waiver of any provision of this Agreement. No single or partial exercise of a right hereunder shall preclude further or complete exercise of that right or any other right hereunder.

10.5 Assignment. No Party shall have the right to assign any of its rights or obligations under this Agreement without the consent of the other Parties hereto.

10.6 Counterparts. This Agreement may be executed in any number of paper or electronic counterparts with the same effect as if all signatory parties had signed the same document. All such counterparts shall be construed together and shall constitute one and the same agreement.

10.7 Severability. If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.

10.8 Further Assurances. In connection with this Agreement and all transactions contemplated by this Agreement, each Party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

10.9 Rights of Limited Partners. The provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no Limited Partner (as defined in the Partnership Agreement) of HEP shall have the right, separate and apart from HEP, to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement. There are no Third Party beneficiaries to this Agreement.

10.10 Headings. Headings of the Sections of this Agreement are for convenience of the parties only and shall be given no substantive or interpretative effect whatsoever.

10.11 Limitation of Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER PROVISION OF THIS AGREEMENT AND EXCEPT FOR CLAIMS MADE BY THIRD PARTIES WHICH SHALL NOT BE LIMITED BY THIS SECTION, THE PARTIES AGREE THAT THE RECOVERY BY ANY PARTY, INCLUDING, PURSUANT TO ARTICLE III, OF ANY LIABILITIES, DAMAGES, COSTS OR OTHER EXPENSES (i) AS A RESULT OF ANY BREACH OR NONFULFILLMENT BY A PARTY OF ANY OF ITS COVENANTS, AGREEMENTS OR OTHER OBLIGATIONS UNDER THIS AGREEMENT OR (ii) BY REASON OF OR ARISING OUT OF ANY OF THE EVENTS, CONDITIONS OR OTHER MATTERS LISTED IN SECTIONS 3.2 OR 3.4 WHICH THE PARTIES HAVE AGREED TO INDEMNIFY THE OTHER PARTY AGAINST, SHALL BE LIMITED TO ACTUAL DAMAGES AND SHALL NOT INCLUDE OR APPLY TO, NOR SHALL ANY PARTY BE ENTITLED TO RECOVER, ANY INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING, ANY DAMAGES ON ACCOUNT OF LOST PROFITS OR OPPORTUNITIES OR BUSINESS INTERRUPTION OR DIMINUTION IN VALUE) SUFFERED OR INCURRED BY ANY PARTY; PROVIDED, HOWEVER, THAT SUCH RESTRICTION AND LIMITATION SHALL NOT APPLY TO A PARTYS OBLIGATION TO INDEMNIFY THE OTHER PARTY:

(X) AS A RESULT OF A THIRD PARTY CLAIM FOR SUCH INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES,

 

21


(Y) FOR CLAIMS THAT ARE COVERED BY INSURANCE AND ANY RELATED DEDUCTIBLES, OR

(Z) FOR INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING LIABILITIES ON ACCOUNT OF LOST PROFITS OR OPPORTUNITIES OR BUSINESS INTERRUPTION OR DIMINUTION IN VALUE) THAT ARE A RESULT OF SUCH INDEMNIFYING PARTYS OR ITS AFFILIATESGROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

As used in this Section 10.11, “Affiliates” of the Indemnifying Party shall not include the HEP Group Members when a HFC Entity is the Indemnifying Party and shall not include the HFC Group Members when the Indemnifying Party is a HEP Entity.

10.12 Nature of the Relationship. Notwithstanding the foregoing, nothing in this Agreement and no actions taken by the Parties shall constitute a partnership, joint venture, association or other co-operative entity among the Parties or authorize either Party to represent or contract on behalf of the other Party.

[Remainder of Page Intentionally Left Blank]

 

22


IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the Effective Date.

 

HFC ENTITIES:

HOLLYFRONTIER CORPORATION

HOLLYFRONTIER EL DORADO REFINING LLC

HOLLYFRONTIER CHEYENNE REFINING LLC

HOLLYFRONTIER WOODS CROSS REFINING LLC

HOLLYFRONTIER TULSA REFINING LLC

NAVAJO PIPELINE CO., L.P.

HOLLYFRONTIER NAVAJO REFINING LLC

EL PASO OPERATING LLC

HOLLYFRONTIER TRANSPORTATION LLC

By:  

/s/ Thomas G. Creery

Name:

 

Thomas G. Creery

Title:   Senior Vice President, Commercial
HEP ENTITIES:

HOLLY ENERGY PARTNERS, L.P.

By:

 

HEP Logistics Holdings, L.P.

Its General Partner

 

By:

 

Holly Logistic Services, L.L.C.

Its General Partner

  By:  

/s/ Richard L. Voliva III

 

Name:

 

Richard L. Voliva III

 

Title:

 

Executive Vice President and Chief Financial

Officer

HEP LOGISTICS HOLDINGS, L.P.

By:

 

Holly Logistic Services, L.L.C,

Its General Partner

By:  

/s/ Richard L. Voliva III

Name:

 

Richard L. Voliva III

Title:

 

Executive Vice President and

Chief Financial Officer

[Signature Page 1 of 2 to Twentieth Amended and Restated Omnibus Agreement]

 


CHEYENNE LOGISTICS LLC

EL DORADO LOGISTICS LLC

EL DORADO OPERATING LLC

EL DORADO OSAGE LLC

FRONTIER ASPEN LLC

HEP CUSHING LLC

HEP EL DORADO LLC

HEP FIN-TEX/TRUST-RIVER, L.P.

HEP OKLAHOMA LLC

HEP LOGISTICS GP, L.L.C.

HEP MOUNTAIN HOME, L.L.C.

HEP PIPELINE ASSETS, LIMITED PARTNERSHIP

HEP PIPELINE GP, L.L.C.

HEP PIPELINE, L.L.C.

HEP REFINING ASSETS, L.P.

HEP REFINING GP, L.L.C.

HEP REFINING, L.L.C.

HEP TULSA LLC

HEP UNEV HOLDINGS LLC

HEP UNEV PIPELINE LLC

HEP WOODS CROSS, L.L.C.

HOLLY ENERGY PARTNERS – OPERATING, L.P.

HOLLY ENERGY STORAGE – LOVINGTON LLC

HOLLY LOGISTIC SERVICES, L.L.C.

LOVINGTON-ARTESIA, L.L.C.

NWNAL LLC

ROADRUNNER PIPELINE, L.L.C.

SLC PIPELINE LLC

WOODS CROSS OPERATING LLC

By:  

/s/ Richard L. Voliva III

Name:

 

Richard L. Voliva III

Title:

 

Executive Vice President and Chief Financial

Officer

HEP NAVAJO SOUTHERN, L.P.

By:

 

HEP Pipeline GP, L.L.C.

Its General Partner

  By:  

/s/ Richard L. Voliva III

 

Name:

 

Richard L. Voliva III

 

Title:

 

Executive Vice President and Chief

Financial Officer

[Signature Page 2 of 2 to Twentieth Amended and Restated Omnibus Agreement]

 


Exhibit A

to

Twentieth Amended and Restated Omnibus Agreement

 

 

Omnibus Agreement Amendments

 

Agreement

  

Effective Date

  

Reason for Amendment

Original Omnibus Agreement    July 13, 2004    n/a
First Amended and Restated Omnibus Agreement    June 1, 2009    16” Lovington/Artesia Intermediate Pipeline Purchase Agreement
Second Amended and Restated Omnibus Agreement    August 1, 2009    Tulsa West (Sunoco) Asset Purchase Agreement
Third Amended and Restated Omnibus Agreement    October 19, 2009   

(i) Tulsa East (Sinclair) Purchase Agreement

(ii) Beeson Pipeline Purchase Agreement, and

(iii) Roadrunner Pipeline Purchase Agreement

Fourth Amended and Restated Omnibus Agreement    March 31, 2010    LLC Interest Purchase Agreement for certain Tulsa East Assets
Fifth Amended and Restated Omnibus Agreement    August 31, 2011    Tulsa Throughput Agreement
Sixth Amended and Restated Omnibus Agreement    November 1, 2011    LLC Interest Purchase Agreement for Cheyenne Assets and El Dorado Assets
Seventh Amended and Restated Omnibus Agreement    July 12, 2012    UNEV LLC Interest Purchase Agreement
Eighth Amended and Restated Omnibus Agreement    June 1, 2013    Malaga Throughput Agreement
Ninth Amended and Restated Omnibus Agreement    January 7, 2014   

Amended and Restated El Dorado Throughput Agreement for the El Dorado

New Tank No. 647

Tenth Amended and Restated Omnibus Agreement    September 26, 2014    Amended and Restated Malaga Throughput Agreement
Eleventh Amended and Restated Omnibus Agreement    January 1, 2015    Unloading and Blending Services Agreement (Artesia) and Third Amended and Restated Crude Pipelines and Tankage Agreement (Beeson to Lovington System Expansion)
Twelfth Amended and Restated Omnibus Agreement    January 1, 2015    Artesia Rail Yard Facility, El Dorado Terminal and Cheyenne New Tank No. 117
Thirteenth Amended and Restated Omnibus Agreement    November 2, 2015    LLC Interest Purchase Agreement for the membership interest of El Dorado Operating
Fourteenth Amended and Restated Omnibus Agreement    February 22, 2016    LLC Interest Purchase Agreement for the Osage Membership Interest
Fifteenth Amended and Restated Omnibus Agreement    March 31, 2016    Tulsa West Crude Tank Assets and Tulsa New Tanks

 

A-1


Sixteenth Amended and

Restated Omnibus Agreement

   October 1, 2016    LLC Interest Purchase Agreement for the membership interest of Woods Cross Operating
Seventeenth Amended and Restated Omnibus Agreement    January 1, 2017    El Dorado Repurchased Tanks
Eighteenth Amended and Restated Omnibus Agreement    December 8, 2017    North Loco Tanks, SLC Pipeline, Frontier Aspen Pipeline and NWNAL Assets
Nineteenth Amended and Restated Omnibus Agreement    June 1, 2018    Tulsa Rail Yard Facility, Catoosa Lubes Terminal and Orla Truck Terminal

 

 

A-2


Exhibit B

to

Twentieth Amended and Restated Omnibus Agreement

 

 

Definitions

8” and 10” Lovington/Artesia Intermediate Pipelines” means the 8-inch pipeline and the 10-inch pipeline, each running from Lovington, New Mexico to Artesia, New Mexico and owned by HEP Pipeline.

16” Lovington/Artesia Intermediate Pipeline” means the 16-inch pipeline running from Lovington, New Mexico to Artesia, New Mexico, owned by Lovington-Artesia, L.L.C.

16” Lovington/Artesia Intermediate Pipeline Purchase Agreement” means that certain LLC Interest Purchase Agreement dated as of June 1, 2009, by and among HFC, Navajo Pipeline and the Operating Partnership, pursuant to which Navajo Pipeline transferred and conveyed to the Operating Partnership, and the Operating Partnership acquired, all of the limited liability company interests of Lovington-Artesia, L.L.C., the entity that owns the 16” Lovington/Artesia Intermediate Pipeline.

2004 Product Pipelines, Terminal and Related Assets” means the assets transferred under the July 13, 2004 Contribution, Conveyance and Assumption Agreement at the time of HEP’s initial public offering.

2008 Crude Pipelines, Tanks and Related Assets” means the Drop-Down Assets as defined in the Purchase and Sale Agreement, dated February 25, 2008, by and among HFC, Navajo Pipeline, Woods Cross Refining Company, L.L.C., a Delaware limited liability company, and HollyFrontier Navajo, as the seller parties, and HEP, the Operating Partnership, HEP Woods Cross, L.L.C., a Delaware limited liability company, and HEP Pipeline, as the buyer parties.

2008 Tanks” means the Transferred Tanks included in the 2008 Crude Pipelines, Tanks and Related Assets.

Acquisition Proposal” is defined in Section 5.2(a).

Additional Lovington Assets” means the Transferred Lovington Assets as defined in the March 2010 Drop Down LLC Interest Purchase Agreement.

Additional Tulsa East Assets” means the Transferred Tulsa East Assets as defined in the March 2010 Drop Down LLC Interest Purchase Agreement.

Administrative Fee” is defined in Section 4.1(a).

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

Agreement” is defined in the introduction to this Agreement.

 

B-1


ALON” means ALON USA, LP, a Texas limited partnership.

ALON Purchase Agreement” means that Pipelines and Terminals Agreement, dated as of February 28, 2005, by and among ALON and HEP.

Applicable Law” means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question.

Arbitrable Dispute” means any and all disputes, Claims, controversies and other matters in question between any of the HEP Entities, on the one hand, and any of the HFC Entities, on the other hand, arising out of or relating to this Agreement, the Master Agreements, or the Services and Secondment Agreement, or the alleged breach hereof and thereof, or in any way relating to the subject matter of this Agreement, the Master Agreements, or the Services and Secondment Agreement, regardless of whether (a) allegedly extra-contractual in nature, (b) sounding in contract, tort or otherwise, (c) provided for by Applicable Law or otherwise or (d) seeking damages or any other relief, whether at law, in equity or otherwise.

Artesia Blending Facility” means the two tanks and related equipment for the unloading and blending of ethanol and biodiesel at the refined product truck rack located at the refinery owned by HollyFrontier Navajo in Artesia, New Mexico.

Artesia-Orla Pipeline” means the 12” refined products pipeline extending from the refinery owned by HollyFrontier Navajo in Artesia, New Mexico to the Orla Truck Terminal, which pipeline is owned by HEP Pipeline.

Artesia Rail Yard Facility” means (a) the railroad track siding consisting of approximately 8,300 track feet of siding (rail storage) and two mainline switches and three industry switches located on certain land leased by HFRM from the Operating Partnership pursuant to that certain Track Lease Agreement effective as of November 1, 2014 by and between HEP Refining and HFRM, pursuant to which HEP Refining agreed to lease to HFRM, and HFRM agreed to lease from HEP Refining, the Artesia Rail Yard Facility, and (b) HEP Refining’s leasehold interest, as tenant, under the BNSF Lease (New Mexico), and (c) HEP Refining’s leasehold interest, as landlord, under that certain Sublease Agreement effective as of November 1, 2014 by and between HEP Refining and HFRM, pursuant to which HEP Refining agreed to sublease to HFRM, and HFRM agreed to sublease from HEP Refining, the BNSF Land (New Mexico).

Assets” means the Transferred Assets and the Other Assets, collectively.

Beeson Pipeline” means the 8” crude oil pipeline extending from Beeson station to Lovington, New Mexico, owned by HEP Pipeline.

Beeson Pipeline Purchase Agreement” means that certain Asset Purchase Agreement dated as of December 1, 2009, by and among HFC, Navajo Pipeline and HEP Pipeline, pursuant to which Navajo Pipeline agreed to transfer and convey to HEP Pipeline, and HEP Pipeline agreed to acquire, the Beeson Pipeline.

 

B-2


Beeson to Lovington System Expansion” means the following project undertaken by HEP Pipeline: the installation of a larger pump at the Beeson station and the replacement of five miles of existing 8-inch pipeline with 10-inch pipeline beginning at the Beeson station end of the Beeson Pipeline.

BNSF Land (New Mexico)” means the land located in Eddy County, New Mexico leased to HEP Refining pursuant to the BNSF Lease (New Mexico).

BNSF Land (Tulsa)” means the land located in Tulsa County, Oklahoma leased to HEP Tulsa pursuant to the BNSF Lease (Tulsa).

BNSF Lease (New Mexico)” means that certain Lease of Land Including New Track Construction dated to be effective as of February 14, 2014, pursuant to which HEP Reining agreed to lease from BNSF Railway Company the BNSF Land (New Mexico).

BNSF Lease (Tulsa)” means that certain Lease of Land for Construction/Rehabilitation of Track dated to be effective as of June 23, 2016, pursuant to which HEP Tulsa agreed to lease from BNSF Railway Company the BNSF Land (Tulsa).

Business Day” means any day other than Saturday, Sunday or other day upon which commercial banks in Dallas, Texas are authorized by law to close.

Catoosa Lubes Terminal” means that certain water port terminal and related facilities located in Rogers County, Oklahoma, near the Port of Catoosa, Oklahoma, and more fully described in that certain Amended and Restated Lease Agreement, dated August 1, 2007, between the City of Tulsa-Rogers County Port Authority (the “Port Authority”) and Petro Source Terminals, LLC, as amended by that certain First Amendment of Amended and Restated Lease Agreement, dated August 1, 2017, between the Port Authority and NGL Crude Terminals, LLC, as modified by that certain Lease Assignment and Assumption Agreement, dated June 1, 2018, between the Port Authority, NGL Crude Terminals, LLC and HEP Oklahoma LLC.

Change of Control” means, with respect to any Person (the “Applicable Person”), any of the following events:

(a) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all of the Applicable Person’s assets to any other Person unless immediately following such sale, lease, exchange, or other transfer such assets are owned, directly or indirectly, by the Applicable Person;

(b) the consolidation or merger of the Applicable Person with or into another Person pursuant to a transaction in which the outstanding Voting Securities of the Applicable Person are changed into or exchanged for cash, securities, or other property, other than any such transaction where

(i) the outstanding Voting Securities of the Applicable Person are changed into or exchanged for Voting Securities of a surviving Person or its parent and

(ii) the holders of the Voting Securities of the Applicable Person immediately prior to such transaction own, directly or indirectly, not less than a majority of the Voting Securities of the surviving Person or its parent immediately after such transaction; and

 

B-3


(c) a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (in the case of HFC, other than a group consisting of some of all of the current control persons of HFC), being or becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended) of more than 50% of all of the then outstanding Voting Securities of the Applicable Person, except in a merger or consolidation that would not constitute a Change of Control under clause (b) above.

Cheyenne Assets” is defined in the November 2011 Frontier Drop Down LLC Interest Purchase Agreement.

Cheyenne Logistics” is defined in the introduction to this Agreement.

Cheyenne New Tank” means petroleum storage tank no. 117 located at the Cheyenne Refinery Complex.

Claim” means any existing or threatened future claim, demand, suit, judgment, settlement, action, investigation, proceeding, governmental action, cause of action, claims, demands, causes of action, suits, judgments, settlements, fines, penalties, costs, and expenses (including court costs and reasonable attorneys’ and experts’ fees) of any kind or character (in each case, whether civil, criminal, investigative or administrative), known or unknown, under any theory, including those based on theories of contract, tort, statutory liability, strict liability, employer liability, premises liability, products liability, breach of warranty or malpractice of any and every kind or character, known or unknown, fixed, contingent or suffered.

Claimant” is defined in Section 8.2(a).

Closing Date” means

(a) for all sections other than Articles III and VII, July 13, 2004, the date of the closing of HEP’s initial public offering, and

(b) for purposes of Articles III and VII, Closing Date means, with respect to a group of assets, the effective date of the purchase of such assets or the stock, partnership interests or membership interests of the entity that directly or indirectly owns such assets, by a HEP Entity (such Closing Date being shown in Exhibit D, column (a)).

Contribution Agreement” means that certain Contribution, Conveyance and Assumption Agreement, dated as of July 13, 2004, among HFC, Navajo Pipeline, the General Partner, HEP, the OLP GP, the Operating Partnership and certain other parties, together with the additional conveyance documents and instruments contemplated or referenced thereunder.

control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

Covered Environmental Losses” means Environmental Claims to the extent arising from:

 

  (a)

any violation or correction of violation of Environmental Laws associated with the ownership or operation of the Assets, or

 

B-4


  (b)

any event or condition associated with ownership or operation of the Assets (including, the presence of Hazardous Substances on, under, about or migrating from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets at any non-Asset locations), including:

 

  (i)

the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws;

 

  (ii)

the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws; and

 

  (iii)

the cost and expense for any environmental or Toxic Tort pre-trial, trial, or appellate legal or litigation support work.

Cushing Connect” means Cushing Connect Pipeline & Terminal LLC, a Delaware limited liability company.

Cushing Connect Pipeline” means that certain approximately 50 mile, 16” pipeline to be constructed by Cushing Connect Pipeline Holdings LLC, a subsidiary of Cushing Connect, to transport crude oil from the Cushing Terminal to the Tulsa East Refinery and Tulsa West Refinery.

Cushing Terminal” means the crude oil storage, blending and terminalling facility terminal located in Cushing, Oklahoma and owned and operated by Plains Marketing, L.P., a Texas limited partnership.

Disposition Notice” is defined in Section 5.2(a).

Effective Date” is defined in the introduction to this Agreement.

El Dorado Assets” is defined in the November 2011 Frontier Drop Down LLC Interest Purchase Agreement.

El Dorado Logistics” is defined in the introduction to this Agreement.

El Dorado New Tank” means petroleum products storage tanks no. 647 and no. 651 located at the El Dorado Refinery Complex.

El Dorado Operating” is defined in the introduction to this Agreement.

El Dorado Osage” is defined in the introduction to this Agreement.

El Dorado Refinery Assets” means “Assets” as defined in that certain LLC Interest Purchase Agreement dated as of October 30, 2015 and effective as of November 1, 2015 by and among HollyFrontier El Dorado, HFC and the Operating Partnership, pursuant to which HollyFrontier El Dorado agreed sell to the Operating Partnership all of the issued and outstanding limited liability company interests in El Dorado Operating.

El Dorado Repurchased Tanks” means tank 243 and tank 244 located at the El Dorado Terminal that were repurchased by HollyFrontier El Dorado from El Dorado Logistics effective January 1, 2017.

El Dorado Terminal” means that certain petroleum products tank farm located in El Dorado Kansas, and more particularly described in that certain Membership Interest Purchase Agreement dated as of March 6, 2015 by and between El Dorado Logistics and Rimrock Midstream, LLC, as such terminal may be modified, expanded or upgraded from time to time.

 

B-5


El Paso Hawkins Terminal” means the El Paso Hawkins Terminal as defined in that certain Refined Products Terminal Transfer Agreement effective as of February 22, 2016 between HEP Refining Assets and El Paso Operating, pursuant to which El Paso Operating acquired the El Paso Hawkins Terminal.

El Paso Operating” is defined in the introduction to this Agreement.

Environmental Claims” means environmental and Toxic Tort Liabilities and Claims of any and every kind or character, known or unknown, fixed or contingent.

Environmental Costs” means (i) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws, (ii) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (iii) the cost and expense for any Environmental Claim, including pre-trial, trial, or appellate legal or litigation support work.

Environmental Laws” means all federal, state and local laws, statutes, rules, regulations, orders and ordinances, now or hereafter in effect, relating to protection of the environment, including the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other environmental conservation and protection laws, each as amended from time to time.

First ROFR Acceptance Deadline” is defined in Section 5.2(b).

Force Majeure” means acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, wars (whether or not an official declaration is made thereof), terrorist attacks, blockades, insurrections, riots, epidemics, landslides, lightening, earthquakes, fires, hurricanes, storms, floods, washouts, freezeoffs, arrests, the order of any Governmental Authority having jurisdiction while the same is in force and effect, civil disturbances, explosions, breakage, accident to machinery, equipment, storage tanks or lines of pipe, repairs, maintenance, inability to obtain or unavoidable delay in obtaining permits, material or equipment, and any other causes whether of the kind herein enumerated or otherwise not reasonably within the control of the Party claiming suspension and which by the exercise of due diligence such Party is unable to prevent or overcome. Notwithstanding anything in this Agreement to the contrary, inability of a Party to make payments when due, be profitable or to secure funds, arrange bank loans or other financing, obtain credit or have adequate capacity or production (other than for reasons of Force Majeure) shall not be regarded as events of Force Majeure.

Frontier Aspen Pipeline” means the Frontier Aspen Pipeline as defined in the Frontier Aspen Membership Purchase Agreement.

Frontier Aspen Membership Purchase Agreement” means that certain Membership Interest Purchase Agreement dated effective August 7, 2017 between Plains Pipeline, L.P. and HEP Casper SLC, LLC.

General Partner” is defined in the introduction to this Agreement.

 

B-6


Governmental Authority” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

Hazardous Substance” means (a) any substance that is designated, defined or classified as a hazardous waste, hazardous material, pollutant, contaminant, or toxic or hazardous substance, or that is otherwise regulated under any Environmental Law, including, any hazardous substance as defined under the Comprehensive Environmental Response, Compensation, and Liability Act, and (b) petroleum, crude oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel and other refined petroleum hydrocarbons.

HEP” is defined in the introduction to this Agreement.

HEP Cushing” is defined in the introduction to this Agreement.

HEP El Dorado” is defined in the introduction to this Agreement.

HEP Entities” is defined in the introduction to this Agreement.

HEP Entity” means any of the HEP Entities.

HEP Group” means the HEP Entities and any Subsidiary of any such Person, all of which are treated as a single consolidated entity for purposes of this Agreement.

HEP Group Member” means any member of the HEP Group.

HEP Pipeline” is defined in the introduction to this Agreement.

HEP Refining” is defined in the introduction to this Agreement.

HEP Refining Assets” is defined in the introduction to this Agreement.

HEP Tulsa” is defined in the introduction to this Agreement.

HEP UNEV” is defined in the introduction to this Agreement.

HEP UNEV Pipeline” is defined in the introduction to this Agreement.

HFC” is defined in the introduction to this Agreement.

HFC Group” means the HFC Entities and any Person controlled, directly or indirectly, by HFC other than the HEP Entities.

HFC Group Member” means any member of the HFC Group.

HFRM” is defined in the introduction to this Agreement.

HollyFrontier Cheyenne” is defined in the introduction to this Agreement.

HollyFrontier El Dorado” is defined in the introduction to this Agreement.

 

B-7


HollyFrontier Navajo” is defined in the introduction to this Agreement.

HollyFrontier Transportation” is defined in the introduction of this Agreement.

HollyFrontier Tulsa” is defined in the introduction to this Agreement.

HollyFrontier Woods Cross” is defined in the introduction to this Agreement.

Holly GP” is defined in the introduction to this Agreement.

Indemnified Claims” means losses, damages, liabilities, Claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character.

Indemnified Party” means all or part of either the HEP Entities or the HFC Entities, as the case may be, in their capacity as the parties entitled to indemnification in accordance with Article III.

Indemnifying Party” means all or part of either the HEP Entities or the HFC Entities, as the case may be, in their capacity as the parties from whom indemnification may be required in accordance with Article III.

Liability” means with respect to any Person, any economic losses (including, diminution in value and lost profits suffered by third parties to the extent an Indemnified Party is required to pay for such damages), damages, injuries (including, personal injury and death), liabilities, of any and every kind or character, known or unknown, fixed, contingent or suffered.

Limited Partner” is defined in the Partnership Agreement.

Malaga Pipeline System” means the Pipeline System, as such term is defined in the Malaga TSA.

Malaga TSA” means that certain Amended and Restated Transportation Services Agreement (Malaga) dated as of September 26, 2014 by and between HFRM and Operating Partnership, pursuant to which Operating Partnership provides certain transportation services for HFRM on the Malaga Pipeline System, as such agreement may be amended, modified or replaced from time to time.

March 2010 Drop Down LLC Interest Purchase Agreement” means that certain LLC Interest Purchase Agreement dated as of March 31, 2010, by and among HFC, Lea Refining Company, HollyFrontier Tulsa, HEP Refining and HEP Tulsa, pursuant to which HFC, Lea Refining Company and HollyFrontier Tulsa agreed to transfer and convey to HEP Refining and HEP Tulsa the Additional Tulsa East Assets and the Additional Lovington Assets.

Master Agreements” means the Master Lease and Access Agreement, Master Site Services Agreement, Master Systems Operating Agreement, Master Throughput Agreement and Master Tolling Agreements.

Master Lease and Access Agreement” means that certain Fifth Amended and Restated Master Lease and Access Agreement dated effective as of October 29, 2018 among certain of the HEP Entities and the Refinery Owners.

 

B-8


Master Site Services Agreement” means that certain Third Amended and Restated Master Site Services Agreement dated effective as of October 1, 2016, as amended, among certain of the HEP Entities and the Refinery Owners.

Master Systems Operating Agreement” means that certain Amended and Restated Master Systems Operating Agreement dated as of February 22, 2016 among certain of the HEP Entities and the Refinery Owners.

Master Throughput Agreement” means that certain Sixth Amended and Restated Master Throughput Agreement effective as of October 2, 2019, between the Operating Partnership and HFRM.

Master Tolling Agreements” means that certain Master Tolling Agreement (Refinery Assets) dated effective as of November 1, 2015, as amended dated effective as of January 1, 2017, between HollyFrontier El Dorado and the Operating Partnership, and that certain Amended and Restated Master Tolling Agreement (Operating Assets) dated effective as of October 1, 2016, as amended dated effective as of January 1, 2017, between HollyFrontier El Dorado, HollyFrontier Woods Cross and the Operating Partnership, and as amended by that certain Second Amendment to Amended and Restated Master Tolling Agreement (Operating Assets) dated October 29, 2018.

Navajo Pipeline” is defined in the introduction to this Agreement.

Net Recovery” is defined in Section 3.7(f).

NWNAL Assets” means those assets described in Section 8(a)(i)(2) of the SLC Pipeline Membership Purchase Agreement.

North Loco Tanks” means the Facilities as defined in that certain Conveyance, Assignment and Bill of Sale (Tanks 1075, 1076 and 1077) effective as of December 8, 2017 by and between HollyFrontier Transportation and HEP Pipeline.

November 2011 Frontier Drop Down LLC Interest Purchase Agreement” means that certain LLC Interest Purchase Agreement effective as of November 1, 2011, by and among HFC, HollyFrontier Cheyenne, HollyFrontier El Dorado, the Operating Partnership and HEP, pursuant to which HollyFrontier Cheyenne and HollyFrontier El Dorado agreed sell to the Operating Partnership the entities that own the Cheyenne Assets and the El Dorado Assets.

Offer” is defined in Section 2.4(a)

Offer Price” is defined in Section 5.2(a)(iii).

OLP GP” is defined in the introduction to this Agreement.

Operating Partnership” is defined in the introduction to this Agreement.

Original Omnibus Agreement” is defined in the recitals to this Agreement.

Orla Truck Terminal means a truck terminal in Orla, Texas to be constructed by HEP Fin-Tex/Trust-River, L.P., consisting primarily of a truck rack with three loading bays and a tank with shell capacity of approximately 50,000 barrels, which will be connected to the Artesia-Orla Pipeline.

Osage” means Osage Pipe Line Company, LLC, a Delaware limited liability company.

 

B-9


Osage Pipeline” means that certain 135-mile, 20-inch pipe line originating in Cushing, Oklahoma and terminating within the El Dorado Terminal, along with associated pumping and metering stations and equipment owned by Osage.

Osage Membership Interest” means a fifty percent (50%) limited liability company membership interest in Osage.

Other Assets” means those assets owned by a HEP Entity that serve the Refineries and were not conveyed, contributed, or otherwise transferred, directly or indirectly by the HFC Entities to the HEP Entities, as indicated in column (a) of Exhibit D, Part 2; provided, that for the purposes of Section 3.2, Other Assets shall not include that certain 8” pipeline extending 50 miles from the White City Station that was formerly used as a refined products pipeline and that was conveyed to the HEP Entities as part of the 2004 Product Pipelines, Terminal and Related Assets.

Partnership Agreement” means the Second Amended and Restated Agreement of Limited Partnership of Holly Energy Partners, L.P. dated as of October 31, 2017. No amendment or modification to the Partnership Agreement subsequent to the date of this Agreement shall be given effect for the purposes of this Agreement unless consented to by each of the Parties.

Party” means any one of the entities listed on the signature page to this Agreement, collectively the “Parties”.

Permitted Assets” is defined in Section 2.2(d).

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

Post-Closing Covered Environmental Losses” means, to the extent such violation, event or condition occurred after the Closing Date:

 

  (a)

any violation or correction of violation of Environmental Laws associated with the operation of the Transferred Assets by a Person other than a HFC Entity or ownership and operation of the Transferred Assets by a Person other than a HFC Entity, or

 

  (b)

any event or condition associated with the ownership and/or operation of the Transferred Assets by a Person other than a HFC Entity (including the presence of Hazardous Substances on, under, about or migrating to or from the Transferred Assets or the disposal or release of Hazardous Substances generated by operation of the Transferred Assets) including, the Environmental Costs;

provided, however, that nothing stated above shall make the HEP Entities responsible for any post-Closing Date negligent actions or omissions or willful misconduct by any of the HFC Entities.

PPI” means the Producers Price Index-Commodities-Finished Goods, (PPI), et al.

PPI Adjustment” means the upper change in the annual change rounded to four decimal places of the PPI, produced by the U.S. Department of Labor, Bureaus of Labor Statistics. The series ID is WPUFD49207 – located at http://www.bls.gov/data/. The change factor shall be calculated as follows: annual PPI index (most current year) less annual PPI index (most current year minus 1) divided by annual PPI index (most current year minus 1). An example for year 2014 change is: PPI (2013) – PPI (2012)] / PPI (2012) or (197.3 – 193.3) / 193.3 or .021 or 2.1%. If the PPI change is negative in a given year then there will be no change in the Administrative Fee.

 

B-10


Pre-Closing Covered Environmental Losses” means, to the extent such violation, event or condition occurred before the Closing Date:

 

  (a)

any violation or correction of violation of Environmental Laws associated with the ownership or operation of the Transferred Assets by a Person other than a HEP Entity or ownership and operation of the Transferred Assets by a Person other than a HEP Entity, or

 

  (b)

any event or condition associated with ownership and/or operation of the Transferred Assets by a Person other than a HEP Entity (including, the presence of Hazardous Substances on, under, about or migrating to or from the Transferred Assets or the disposal or release of Hazardous Substances generated by operation of the Transferred Assets), including, the Environmental Costs.

provided, however, that nothing stated above shall make the HFC Entities responsible for any pre-Closing Date negligent actions omissions or willful misconduct by any of the HEP Entities.

Previous Amended and Restated Omnibus Agreement” is defined in the introduction to this Agreement.

Proposed Transferee” is defined in Section 5.2(a)(i).

Prudent Industry Practice” means such practices, methods, acts, techniques, and standards as are in effect at the time in question that are consistent with (a) the standards generally followed by the United States pipeline and terminalling industries or (b) such higher standards as may be applied or followed by the HFC Entities in the performance of similar tasks or projects, or by the HEP Entities in the performance of similar tasks or projects.

Purchase Option Agreement” has the meaning set forth in the Asset Purchase Agreement, dated August 1, 2009, between HollyFrontier Tulsa, as the seller, and HEP Tulsa, as the buyer.

Refinery” or “Refineries” means each of the Refinery Complexes identified in the Master Lease and Access Agreement.

Refinery Owners” means each of the HFC Entities that own one or more of the Refineries.

Respondent” is defined in Section 8.2(a).

Restricted Business” or “Restricted Businesses” means the ownership or operation of crude oil pipelines or terminals, intermediate petroleum product pipelines or terminals, refined petroleum products pipelines, terminals, truck racks or crude oil gathering systems in the continental United States.

Retained Assets” means the pipelines, terminals and other assets and investments owned by any HFC Group Member on the date of the Contribution Agreement that were not conveyed, contributed or otherwise transferred to the HEP Entities pursuant to the Contribution Agreement or otherwise.

Roadrunner” is defined in the introduction to this Agreement.

 

B-11


Roadrunner Pipeline” means 16” crude oil pipeline extending from Slaughter station in Texas to Lovington, New Mexico owned by Roadrunner.

Roadrunner Pipeline Purchase Agreement” means that certain LLC Interest Purchase Agreement dated as of December 1, 2009 by and among Navajo Pipeline and the Operating Partnership, pursuant to which the Operating Partnership acquired, all of the outstanding limited liability company interests of Roadrunner, the entity that owns the Roadrunner Pipeline.

ROFR Acceptance Deadline” means the First ROFR Acceptance Deadline or the Second ROFR Acceptance Deadline, as applicable, both as defined in Section 5.2(b) and (c).

Sale Assets” is defined in Section 5.2(a)(ii).

Second ROFR Acceptance Deadline” is defined in Section 5.2(c).

Services and Secondment Agreement” means that certain Third Amended and Restated Services and Secondment Agreement dated effective as of October 1, 2016, by and among Holly GP, the Operating Partnership, Cheyenne Logistics, El Dorado Logistics, El Dorado Operating, HEP Tulsa, Woods Cross Operating, HollyFrontier Payroll Services, Inc., a Delaware corporation, HollyFrontier Cheyenne, HollyFrontier El Dorado, HollyFrontier Tulsa and HollyFrontier Woods Cross.

Sinclair” means Sinclair Tulsa Refining Company.

Sinclair Purchase Agreement” means that certain Asset Sale and Purchase Agreement dated as of October 19, 2009, by and among HollyFrontier Tulsa, HEP Tulsa and Sinclair, pursuant to which HEP Tulsa acquired the Sinclair Transferred Assets.

Sinclair Transferred Assets” means the HEP Tulsa Assets as defined in the Sinclair Purchase Agreement.

SLC Pipeline” means the SLC Pipeline as defined in the SLC Pipeline Membership Interest Purchase Agreement.

SLC Pipeline Membership Purchase Agreement” means that certain Membership Interest Purchase Agreement dated effective August 7, 2017, between Rocky Mountain Pipeline System LLC and HEP SLC, LLC.

Storage and Handling Agreement” means that certain Storage and Handling Agreement dated February 21, 1997, between the Operating Partnership and Alon U.S.A., L.P., as amended effective January 1, 2004, September 1, 2008 and March 1, 2011.

Third Party” means a Person which is not (a) HEP or an Affiliate of HEP, (b) HFC or an affiliate of HFC, (c) a Person that, after the signing of this Agreement becomes a successor entity of HEP, HFC or any of their respective Affiliates. An employee of HFC or HEP shall not be deemed an Affiliate.

Toxic Tort” means a Claim or cause of action arising from personal injury or property damage incurred by the plaintiff that is alleged to have been caused by exposure to, or contamination by, Hazardous Substances that have been released into the environment by or as a result of the actions or omissions of the defendant.

 

B-12


Transfer” including the correlative terms “Transferring” or “Transferred” means any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation or other encumbrance, or any other disposition (whether voluntary, involuntary or by operation of law) of the Assets.

Transferred Assets” means all of the assets conveyed, contributed, or otherwise transferred, directly or indirectly (including by transfer or sale of the entity that owns such assets or the entity that owns the interests in the entity that owns such assets) that serve the Refineries, by the HFC Entities to the HEP Entities, as indicated in column (a) of Exhibit D, Part 1; provided that for the purposes of Section 3.2, the term “Transferred Assets” shall include (a) that certain 8” pipeline extending 50 miles from the White City Station that was formerly used as a refined products pipeline and that was conveyed to the HEP Entities as part of the 2004 Product Pipelines, Terminal and Related Assets, and (b) the Tulsa West Crude Tank Assets.

Transferred Tanks” means the tanks included in the Assets, as indicated in column (h) of Exhibit D, provided however that from and after January 1, 2017, such tanks shall not include the El Dorado Repurchased Tanks.

Tulsa East Refinery” means the refinery owned by HollyFrontier Tulsa and located at 905 West 25th Street, Tulsa, Oklahoma 74107.

Tulsa Interconnecting Pipelines” means the Interconnecting Pipelines as defined in the Tulsa Throughput Agreement.

Tulsa New Tanks” means petroleum products storage tank nos. 45 and 444A located at the Tulsa Refinery Complex.

Tulsa Purchase Agreement” means that certain Asset Purchase Agreement dated as of August 1, 2009, by and between HollyFrontier Tulsa and HEP Tulsa, pursuant to which HollyFrontier Tulsa transferred and conveyed to HEP Tulsa, and HEP Tulsa acquired, the Tulsa Transferred Assets.

Tulsa Rail Yard Facility” means (a) the railroad track siding consisting of approximately (i) Five Thousand Twenty (5,020) track feet of runaround track, (ii) Seven Thousand Three Hundred (7,300) of inbound and outbound track, (iii) One Thousand Three Hundred (1,300) track feet of maintenance and engine storage track, (iv) Nine Thousand Eight Hundred Eighty (9,880) track fee of rail car storage, (v) One (1) mainline switch, and (vi) Fifteen (15) industry switches located on certain land situated at or near the railway station of Tulsa, County of Tulsa, Oklahoma and leased by HFRM from HEP Tulsa pursuant to that certain Track Lease Agreement effective as of December 13, 2017 by and between HEP Tulsa and HFRM, pursuant to which HEP Tulsa agreed to lease to HFRM, and HFRM agreed to lease from HEP Tulsa, the Tulsa Rail Yard Facility, (b) HEP Tulsa’s leasehold interest, as tenant, under the BNSF Lease (Tulsa), pursuant to which HEP Tulsa agreed to lease from BNSF Railway Company the BNSF Land (Tulsa), (c) HEP Tulsa’s leasehold interest, as landlord, under that certain Sublease Agreement effective as of December 13, 2017 by and between HEP Tulsa and HFRM, pursuant to which HEP Tulsa agreed to sublease to HFRM, and HFRM agreed to sublease from HEP Tulsa, the BNSF Land (Tulsa), (d) HEP Tulsa’s interest, as licensee, under that certain Equipment Sites, Access and Rail Line License Agreement, effective August 1, 2009, between HollyFrontier Tulsa and HEP Tulsa, as amended by that certain First Amendment to Equipment Sites, Access and Rail Line License Agreement, effective as of December 13, 2017, by and between HollyFrontier Tulsa and HEP Tulsa, and (e) HEP Tulsa’s interest, as sublicensor, under that Sublicense Agreement effective December 13, 2017, between HEP Tulsa and HFRM.

Tulsa Throughput Agreement” means that certain Second Amended and Restated Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East), dated as of August 31, 2011, pursuant to which HEP Tulsa agreed to provide transportation services to HollyFrontier Tulsa with respect to the Tulsa Interconnecting Pipelines.

 

B-13


Tulsa Transferred Assets” means the Transferred Assets as defined in the Tulsa Purchase Agreement.

Tulsa West Refinery” means the refinery owned by HollyFrontier Tulsa located at 1700 S. Union Ave., Tulsa, Oklahoma 74107.

Tulsa West Crude Tank Assets” means the Leased Property as defined in the Bill of Sale, Assignment and Assumption Agreement dated as of March 31, 2016 between Plains Marketing, L.P. and HEP Tulsa.

UNEV LLC Interest Purchase Agreement” means that certain LLC Interest Purchase Agreement dated as of July 12, 2012, by and among HFC, HEP UNEV and HEP, pursuant to which HFC agreed to sell to HEP UNEV the entity that owns 75% of all of the issued and outstanding membership interests of UNEV Pipeline, LLC, the entity that owns the UNEV Pipeline.

UNEV Pipeline” means, collectively, an approximately 400 mile, 12-inch refined products pipeline currently running from Woods Cross, Utah to Las Vegas, Nevada, related products terminals in or near Cedar City, Utah and Las Vegas, Nevada and other related assets owned by UNEV Pipeline, LLC.

UNEV Profits Interest” means the membership interest in HEP UNEV held directly or indirectly by HFC.

Voting Securities” means securities of any class of a Person entitling the holders thereof to vote on a regular basis in the election of members of the board of directors or other governing body of such Person.

Wood Cross Operating” is defined in the introduction to this Agreement.

Woods Cross Refinery Assets” has the meaning ascribed to the term “Assets” in that certain LLC Interest Purchase Agreement dated as of October 3, 2016 and effective as of October 1, 2016 by and among HollyFrontier Woods Cross, HFC and the Operating Partnership, pursuant to which HollyFrontier Woods Cross agreed to sell to the Operating Partnership all of the issued and outstanding limited liability company interests in Woods Cross Operating.

 

B-14


Exhibit C

to

Twentieth Amended and Restated Omnibus Agreement

 

 

Interpretation

As used in this Agreement, unless a clear contrary intention appears:

(a) any reference to the singular includes the plural and vice versa, any reference to natural persons includes legal persons and vice versa, and any reference to a gender includes the other gender;

(b) the words “hereof”, “hereby”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;

(c) any reference to Articles, Sections and Exhibits are, unless otherwise stated, references to Articles, Sections and Exhibits of or to this Agreement and references in any Section or definition to any clause means such clause of such Section or definition. The headings in this Agreement have been inserted for convenience only and shall not be taken into account in its interpretation;

(d) reference to any agreement (including this Agreement), document or instrument means such agreement, document, or instrument as amended, modified or supplemented and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of this Agreement;

(e) the Exhibits hereto form an integral part of this Agreement and are equally binding therewith. Any reference to “this Agreement” shall include such Exhibits;

(f) references to a Person shall include any permitted assignee or successor to such Party in accordance with this Agreement and reference to a Person in a particular capacity excludes such Person in any other capacity;

(g) if any period is referred to in this Agreement by way of reference to a number of days, the days shall be calculated exclusively of the first and inclusively of the last day unless the last day falls on a day that is not a Business Day in which case the last day shall be the next succeeding Business Day;

(h) the use of “or” is not intended to be exclusive unless explicitly indicated otherwise;

(i) references to “$” or to “dollars” shall mean the lawful currency of the United States of America; and

(j) the words “includes,” “including,” or any derivation thereof shall mean “including without limitation” or “including, but not limited to.”

 

 

C-1


Exhibit D

to

Twentieth Amended and Restated Omnibus Agreement

 

 

Asset Indemnification Summary

Part 1: Transferred Assets:

 

(a)

  

(b)

  

(c)

  

(d)

  

(e)

  

(f)

  

(g)

  

(h)

TRANSFERRED

ASSET AND

CLOSING DATE

  

HFC

ENVIRONMENTAL

(Expiration Date)

  

HEP

ENVIRONMENTAL1

  

RIGHT-OF-WAY

  

ADDITIONAL

INDEMNITIES

  

OPERATIONAL

INDEMNITY

  

RIGHT OF

FIRST

REFUSAL

  

INCLUDES

TRANSFERRED

TANKS

  

Indemnity from HFC to HEP for Pre-Closing Covered Environmental Losses under Section 3.2(a) / Aggregate cap on HFC environmental indemnity in

Section 3.1(b) (expiration date of indemnity)

   Indemnity from HEP to HFC for Post-Closing Covered Environmental Losses under Section 3.4(a)   

Right-of-Way Indemnity under Sections 3.2(a)(iii) and 3.2(a)(iv)

(expiration date of indemnity)

  

Additional Indemnities under Section 3.2(a)(vi)

(expiration date of indemnity)2

   Additional Indemnities under Section 3.5    Right of First Refusal under Article V   
2004 Product Pipelines, Terminal and Related Assets (July 13, 2004)   

$15,000,000

(July 13, 2014)

     

(July 13, 2014)

  

(July 13, 2009)

         No

8” and 10”

Lovington/Artesia Intermediate Pipelines

(June 1, 2009)

  

$2,500,000

(June 1, 2019)

     

(June 1, 2019)

  

(June 1, 2014)

         No

 

1 

Where subsurface rights are not transferred to the HEP Entities, the HEP Entities have no liabilities for subsurface contamination unless caused by an HEP Entity.

2 

Notification of Claim must be provided prior to date noted.

 

D-1


(a)

  

(b)

  

(c)

  

(d)

  

(e)

  

(f)

  

(g)

  

(h)

TRANSFERRED

ASSET AND

CLOSING DATE

  

HFC ENVIRONMENTAL

(Expiration Date)

  

HEP

ENVIRONMENTAL

  

RIGHT-OF-WAY

  

ADDITIONAL

INDEMNITIES

  

OPERATIONAL

INDEMNITY

  

RIGHT OF

FIRST

REFUSAL

  

INCLUDES
TRANSFERRED
TANKS

2008 Crude Pipelines, Tanks and Related Assets

(March 1, 2008)

  

$7,500,000

(March 1, 2023)

     

(March 1, 2023)

  

(March 1, 2013)

         Yes

16” Lovington/Artesia Intermediate Pipeline

(June 1, 2009)

   None      

(June 1, 2019)

  

(June 1, 2014)

         No

Tulsa Transferred Assets

(August 1, 2009)

   None    None    None    None    None    None 3    No

Beeson Pipeline

(December 1, 2009)

   None      

(December 1, 2019)

  

(December 1, 2014)

         No

Roadrunner Pipeline

(December 1, 2009)

   None      

(December 1, 2019)

  

(December 1, 2014)

         No

Additional Lovington Assets

(March 31, 2010)

  

$15,000,000

(March 31, 2020)

     

(March 31, 2020)

  

(March 31, 2015)

         No

Additional Tulsa East Assets

(March 31, 2010)

  

unlimited

(no expiration)

   None    None    None    None       No

Sinclair Transferred Assets

(October 19, 2009)

   None    None    None    None    None       Yes

Tulsa Interconnecting Pipelines

(August 31, 2011)

   None       (August 31, 2021)    (August 31, 2016)          No

 

3 

Right of first refusal granted to an Affiliate of HFC with respect to the Tulsa Transferred Assets is contained in the Purchase Option Agreement.

 

D-2


(a)

  

(b)

  

(c)

  

(d)

  

(e)

  

(f)

  

(g)

  

(h)

TRANSFERRED

ASSET AND

CLOSING DATE

  

HFC

ENVIRONMENTAL

(Expiration Date)

  

HEP

ENVIRONMENTAL

  

RIGHT-OF-WAY

  

ADDITIONAL

INDEMNITIES

  

OPERATIONAL

INDEMNITY

  

RIGHT OF

FIRST

REFUSAL

  

INCLUDES

TRANSFERRED

TANKS

Cheyenne Assets (November 1, 2011)    $15,000,000 (November 1, 2021)      

(November 1, 2021)

  

(November 1, 2016)

         Yes

El Dorado Assets

(November 1, 2011)

  

$15,000,000

(November 1, 2021)

   4    

(November 1, 2021)

  

(November 1, 2016)

         Yes

UNEV Pipeline

(July 12, 2012)

   None      

(July 12, 2022)

  

(July 12, 2017)

      None 5    No

El Dorado Refinery Assets

(November 1, 2015)

  

$15,000,000

(November 1, 2025)

     

(November 1, 2025)

  

(November 1, 2020)

         No

Osage Pipeline

(February 22, 2016)

   None    None    None    None    None    None 6    No

Tulsa West Crude Tank Assets

(11:59 p.m., March 31, 2016)

  

$5,000,000

(11:59 p.m., March 31, 2026)

      None   

(11:59 p.m., March 31, 2021)7

         No

Woods Cross Refinery Assets

October 1, 2016

  

$15,000,000

October 1, 2026

     

October 1, 2026

  

October 1, 2026

         No

North Loco Tanks

(December 8, 2017)

   None    None    None    None    None       No

 

 

4 

However, with respect to the El Dorado Repurchased Tanks, such indemnity is subject to the limitation set forth in Section 3.4(c).

5 

However, the right of first refusal includes the equity interests of HEP UNEV Holdings LLC, HEP UNEV Pipeline LLC and UNEV Pipeline, LLC then owned directly or indirectly by the HEP Entities; provided, however, the right of first refusal on the equity interests of UNEV Pipeline, LLC is subject to any rights of the other member(s) of UNEV Pipeline, LLC.

6 

However, the right of first refusal includes the equity interests of El Dorado Osage and Osage then owned directly or indirectly by the HEP Entities; provided, however, the right of first refusal on the equity interests of Osage is subject to any rights of the other member(s) of Osage.

7 

Notwithstanding such expiration date, the indemnity provided for in Section 3.2(a)(vi)(F) applies only to the Tulsa West Crude Tank Assets and expired at 11:59 p.m. on March 31, 2017.

 

D-3


Part 2: Other Assets:

 

(a)

  

(b)

  

(c)

  

(d)

  

(e)

  

(f)

  

(g)

  

(h)

OTHER ASSET AND

CLOSING DATE

  

HFC ENVIRONMENTAL

(Expiration Date)

  

HEP

ENVIRONMENTAL

  

RIGHT-OF-WAY

  

ADDITIONAL

INDEMNITIES

  

OPERATIONAL

INDEMNITY

  

RIGHT OF

FIRST
REFUSAL

  

INCLUDES
TRANSFERRED
TANKS

   Indemnity from HFC to HEP for Pre-Closing Covered Environmental Losses under Section 3.2(a) / Aggregate cap on HFC environmental indemnity in Section 3.1(b) (expiration date of indemnity)   

Indemnity from HEP to HFC for Post-Closing Covered Environmental Losses under

Section 3.4(a)

  

Right-of-Way Indemnity under Sections 3.2(a)(iii) and 3.2(a)(iv)

(expiration date of indemnity)

  

Additional Indemnities under Section 3.2(a)

(vi)(A)

(expiration date of indemnity)1

   Additional Indemnities under Section 3.5    Right of First Refusal under Article V   
Malaga Pipeline System (July 16, 2013, as amended by that certain Amended and Restated Transportation Services Agreement dated September 26, 2014)    None 8       None    None          No

El Dorado New Tank

(Tank 647)

(January 7, 2014)

   None      

(January 7, 2024)

   None          No

Artesia Rail Yard Facility

(November 1, 2014)

   None       None    None          No

El Dorado Terminal

(March 6, 2015)

   None       None    None          No

 

8 

However, Section 3.1(a) covers the 8” pipeline extending 50 miles from White City Station that was formerly used as a refined products pipeline that was conveyed to HEP as part of the 2004 Product Pipelines, Terminal and Related Assets.

 

D-4


(a)

  

(b)

  

(c)

  

(d)

  

(e)

  

(f)

  

(g)

  

(h)

OTHER ASSET AND

CLOSING DATE

  

HFC ENVIRONMENTAL

(Expiration Date)

  

HEP

ENVIRONMENTAL

  

RIGHT-OF-WAY

  

ADDITIONAL

INDEMNITIES

  

OPERATIONAL

INDEMNITY

  

RIGHT OF

FIRST
REFUSAL

  

INCLUDES

TRANSFERRED

TANKS

Beeson to Lovington System Expansion

(March 12, 2015)

   None       None    None          No

Artesia Blending Facility

(March 12, 2015)

   None      

(March 12, 2025)

   None          No

Cheyenne New Tank

(Tank 117)

(December 4, 2014)

   None      

(December 4, 2029)

   None          No

Tulsa New Tanks

(Tanks 45 and 444A)

(May 1, 2016)

   None      

(May 1, 2026)

   None          No

El Dorado New Tank

(Tank 651)

(September 12, 2016)

   None      

(September 12, 2026)

   None          No

SLC Pipeline

(October 31, 2017)

   None    None    None    None    None       No

Frontier Aspen Pipeline

(October 31, 2017)

   None    None    None    None    None       No

NWNAL Assets

(October 31, 2017)

   None    None    None    None    None       No

Tulsa Rail Yard Facility

(December 13, 2017)

   None       None    None          No

Catoosa Lubes Terminal

(June 1, 2018)

   None       None    None          No

Orla Truck Terminal

(the Orla Commencement Date)9

   None       None    None       10     No

Cushing Connect Pipeline

(the Cushing Connect Commencement Date)9

   None    None    None    None    None    None11    No

 

9 

As defined in the Master Throughput Agreement.

10 

HFC right of first refusal subject to the rights of ALON under the ALON Purchase Agreement.

11 

However, the right of first refusal includes the equity interests of Cushing Connect then owned directly or indirectly by the HEP Entities; provided, however, the right of first refusal on the equity interests of Cushing Connect is subject to any rights of the other member(s) of Cushing Connect.

 

D-5


Exhibit E

to

Twentieth Amended and Restated Omnibus Agreement

 

 

General and Administrative Services

 

  (1)

Executive services

 

  (2)

Finance, including treasury, and administration services

 

  (3)

Information technology services

 

  (4)

Internal audit services

 

  (5)

Legal services

 

  (6)

Corporate health, safety and environmental services

 

  (7)

Human resources services

 

  (8)

Procurement

 

  (9)

Corporate operations team services

 

E-1

EX-99.1

Exhibit 99.1

Holly Energy Partners and Plains All American Announce Cushing Connect Joint Venture

DALLAS—(BUSINESS WIRE) — Holly Energy Partners, L.P. (NYSE:HEP) (“HEP”) and Plains All American Pipeline (NYSE: PAA) (“Plains”) today announced the formation of a 50/50 joint venture, Cushing Connect Pipeline & Terminal LLC (the “Joint Venture”), for (i) the development and construction of a new 160,000 barrel per day common carrier crude oil pipeline (the “Pipeline”) that will connect the Cushing, Oklahoma crude oil hub to the Tulsa, Oklahoma refining complex owned by a subsidiary of HollyFrontier Corporation (NYSE: HFC) and (ii) the ownership and operation of 1.5 million barrels of crude oil storage in Cushing, Oklahoma (the “JV Terminal”). The JV Terminal is expected to be in service during the second quarter of 2020, and the Pipeline is expected to be in service during the first quarter of 2021. Long-term commercial agreements have been entered into to support the Joint Venture assets.

The Joint Venture will contract with an affiliate of HEP to manage the construction and operation of the Pipeline and with an affiliate of Plains to manage the operation of the JV Terminal. The total Joint Venture investment will be shared proportionately among the partners and is estimated to total approximately $130 million, including the existing JV Terminal contributed by Plains valued at approximately $40 million. The Joint Venture is expected to generate an initial annual EBITDA multiple of approximately 8x to 9x once the JV Terminal and Pipeline are placed into Joint Venture service.

“The new Joint Venture will provide growth to HEP by insourcing logistics spend and provide the capability to supply 100% of HFC’s Tulsa Refinery crude throughput,” commented George Damiris, Chief Executive Officer of the general partner of Holly Energy Partners. “Our partnership with Plains generates HEP growth while providing HFC long-term control of a strategic asset.”

“This win-win Joint Venture aligns with our strategy of optimizing existing assets to provide value-chain solutions for long-term industry partners in a capital efficient manner,” stated Jeremy Goebel, Executive Vice President – Commercial, Plains All American. “This investment expands our relationship with a key operational hub service customer and provides additional long-term alignment on movements to the Tulsa refinery.”

About Holly Energy Partners, L.P.:

Holly Energy Partners, L.P., headquartered in Dallas, Texas, provides petroleum product and crude oil transportation, terminalling, storage and throughput services to the petroleum i