SECOND AMENDED AND RESTATED MASTER THROUGHPUT AGREEMENT (including Tankage and Loading Racks) by and between HOLLYFRONTIER REFINING & MARKETING LLC and HOLLY ENERGYPARTNERS-OPERATING, L.P. Effective as of March 31, 2016 TABLE OF CONTENTS

EX-10.1 2 d208257dex101.htm EX-10.1 EX-10.1

Exhibit 10.1

SECOND 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 March 31, 2016


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

     3   

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

     5   

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

     6   

ARTICLE 6 AGREEMENT NOT TO CHALLENGE PIPELINE TARIFFS

     7   

ARTICLE 7 EFFECTIVENESS AND TERM

     7   

ARTICLE 8 RIGHT TO ENTER INTO A NEW AGREEMENT

     7   

8.1

 

NEGOTIATION PURSUANT TO WRITTEN NOTICE

     7   

8.2

 

NEGOTIATION IN THE ABSENCE OF WRITTEN NOTICE

     8   

ARTICLE 9 NOTICES

     8   

ARTICLE 10 DEFICIENCY PAYMENTS

     8   

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

     9   

ARTICLE 12 INDEMNITY; LIMITATION OF DAMAGES

     9   

12.1

 

INDEMNITY; LIMITATION OF LIABILITY

     9   

12.2

 

SURVIVAL

     9   

 

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ARTICLE 13 MISCELLANEOUS

     10   

13.1

 

AMENDMENTS AND WAIVERS

     10   

13.2

 

SUCCESSORS AND ASSIGNS

     10   

13.3

 

SEVERABILITY

     10   

13.4

 

CHOICE OF LAW

     10   

13.5

 

RIGHTS OF LIMITED PARTNERS

     10   

13.6

 

FURTHER ASSURANCES

     11   

13.7

 

HEADINGS

     11   

ARTICLE 14 GUARANTEE BY HOLLYFRONTIER

     11   

14.1

 

PAYMENT GUARANTY

     11   

14.2

 

GUARANTY ABSOLUTE

     11   

14.3

 

WAIVER

     12   

14.4

 

SUBROGATION WAIVER

     12   

14.5

 

REINSTATEMENT

     12   

14.6

 

CONTINUING GUARANTY

     12   

14.7

 

NO DUTY TO PURSUE OTHERS

     12   

ARTICLE 15 GUARANTEE BY THE PARTNERSHIP

     12   

15.1

 

PAYMENT AND PERFORMANCE GUARANTY

     12   

15.2

 

GUARANTY ABSOLUTE

     13   

15.3

 

WAIVER

     13   

15.4

 

SUBROGATION WAIVER

     13   

15.5

 

REINSTATEMENT

     14   

15.6

 

CONTINUING GUARANTY

     14   

15.7

 

NO DUTY TO PURSUE OTHERS

     14   

 

EXHIBITS

Exhibit A – Definitions

Exhibit B – Interpretation

Exhibit C – Applicable Assets, Product, Minimum Capacity Commitment, Tariffs, Tariff Adjustments and Applicable Terms

Exhibit D – Measurement of Shipped Volumes

Exhibit E - Volumetric Gains and Losses; Line Fill; High-API Oil Surcharge

Exhibit F - Increases in Tariff Rates as a Result of Changes in Applicable Law

Exhibit G - Special Provisions: Malaga Pipeline System

Exhibit G-1 - Map of Pipeline System and Pipeline System Capacity by Segment

Exhibit G-2 – Construction Projects

Exhibit G-3 – Devon Lease Connections

Exhibit H – Special Provisions: El Dorado Assets

Exhibit H-1 - El Dorado Loading Rack

Exhibit H-2 – El Dorado Tankage

Exhibit H-3 – Specifications for New Tank

Exhibit I - Special Provisions: Cheyenne Assets

Exhibit I-1 - Cheyenne Loading Rack

Exhibit I-2 - Cheyenne Receiving Assets

Exhibit I-3 – Cheyenne Tankage

Exhibit I-4 – Specification for New Tanks

Exhibit J – Special Provisions: Tulsa East Assets

 

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Exhibit J-1 - Tulsa Group 1 Loading Rack

Exhibit J-2 - Tulsa Group 1 Pipeline

Exhibit J-3 – Tulsa Group 1 Tankage

Exhibit J-4 – Tulsa Group 2 Loading Rack

Exhibit J-5 – Tulsa Group 2 Tankage

Exhibit K – Special Provisions: El Dorado Crude Tank Farm Assets

Exhibit K-1 – El Dorado Crude Tankage and Jayhawk Tankage

Exhibit K-2 – El Dorado Terminal Quality Specifications

Exhibit L-1 – Tulsa West Tankage

Exhibit L-2 – Special Provisions: Tulsa West Tankage

 

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SECOND AMENDED AND RESTATED

MASTER THROUGHPUT AGREEMENT

This Second Amended and Restated Master Throughput Agreement (this “Agreement”) is dated as of August 8, 2016, to be effective as of the Effective Time (as defined below) by and between HOLLYFRONTIER REFINING & MARKETING LLC (“HFRM”) and HOLLY ENERGY PARTNERS-OPERATING, L.P. (“HEP Operating”). Each of HFRM and HEP Operating are collectively referred to herein as the “Parties.”

RECITALS:

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

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

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

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

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

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

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

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

 

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certain transportation, storage and loading services with respect to the Applicable Assets, as defined below, and pursuant to which the Parties agreed that such services would no longer be provided pursuant to the Prior Agreements.

I. The Original Master Throughput Agreement has been further amended and restated, resulting in that certain Amended and Restated Master Throughput Agreement, effective February 22, 2016 (the “Amended and Restated Master Throughput Agreement”).

J. The Parties now desire to amend and restate the Amended and Restated Master Throughput Agreement in its entirety as follows.

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

ARTICLE 1

DEFINITIONS AND INTERPRETATIONS

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

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

ARTICLE 2

AGREEMENT TO USE SERVICES

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

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

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

 

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(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.

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

(d) Reduction for Non-Force Majeure Operational Difficulties. If HFRM is unable to transport, store and/or load on, in or at any Applicable Asset the volumes of Products required to meet the Minimum Revenue Commitment for such Applicable Asset for a particular Contract Quarter as a result of HEP 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.

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.

 

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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 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,

 

4


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 movement and accept movements of Products in a manner that is consistent with the historical dealings between the Parties and their Affiliates, as such dealings may change from time to time.

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

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

2.12 Increases in Tariff Rates. If new Applicable Laws are enacted that require HEP Operating to make capital expenditures with respect to the Applicable Assets, HEP Operating may amend the Applicable Tariffs in the manner set forth in Exhibit F, in order to recover HEP 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.

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

 

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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.

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.

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

 

6


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, tariffs (including joint tariffs) of HEP Operating (or its Affiliates) that HEP Operating (or its Affiliate) has filed or may file containing rates, rules or regulations that are in effect at any time during the Applicable Term and regulate the transportation of the Products on any Pipelines, and (b) not to protest or file a complaint, nor cause their Affiliates to protest or file a complaint, nor encourage or recommend to any other Person that it protest or file a complaint, or voluntarily assist in any way any other Person in protesting or filing a complaint, with respect to regulatory filings that HEP Operating or its Affiliate has made or may make at any time during the Applicable Term to change tariffs (including joint tariffs) for transportation of Products on any Pipelines, in each case so long as such tariffs, regulatory filings or rates changed do not conflict with the terms of this Agreement.

ARTICLE 7

EFFECTIVENESS AND APPLICABLE TERM

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

ARTICLE 8

RIGHT TO ENTER INTO A NEW AGREEMENT

8.1. Negotiation Pursuant to Written Notice. In the event that HFRM provides prior written notice to HEP Operating of the desire of HFRM to extend this Agreement for a specific group of Applicable Assets by written mutual agreement of the Parties pursuant to Article 7, the Parties shall negotiate in good faith to extend this Agreement by written mutual agreement with respect to such specific group of Applicable Assets, but, if such negotiations fail to produce a written mutual agreement for extension by a date six months prior to the termination date for such group of Applicable Assets, then HEP Operating shall have the right to negotiate to enter into one or more throughput, tankage or transportation services agreements for 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

 

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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.

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.

 

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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.

ARTICLE 11

RIGHT OF FIRST REFUSAL

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

ARTICLE 12

INDEMNITY; LIMITATION OF DAMAGES

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

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

 

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ARTICLE 13

MISCELLANEOUS

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

13.2 Successors and Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and permitted assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned without the prior written consent of HFRM (in the case of any assignment by HEP Operating) or HEP Operating (in the case of any assignment by HFRM), in each case, such consent is not to be unreasonably withheld or delayed; provided, however, that (i) HEP Operating may make such an assignment (including a partial pro rata assignment) to an Affiliate of HEP Operating without 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 make a collateral assignment of its rights and obligations hereunder and/or grant a security interest in its rights and obligations hereunder, and HEP Operating shall execute an acknowledgement of such collateral assignment in such form as may from time-to-time be reasonably requested, and (iv) HEP Operating may make a collateral assignment of its rights hereunder and/or grant a security interest in its rights and obligations hereunder to a bona fide third party lender or debt holder, or trustee or representative for any of them, without 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.

 

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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.

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

ARTICLE 14

GUARANTEE BY HOLLYFRONTIER

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

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

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

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

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

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

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

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

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

 

11


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.

 

12


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 Payment Obligations, (ii) be binding upon the Partnership and each of its respective successors and assigns and (iii) inure to the benefit of and be enforceable by HFRM and their respective successors, transferees and assigns.

15.7 No Duty to Pursue Others. It shall not be necessary for HFRM (and the Partnership hereby waives any rights which the Partnership may have to require HFRM), in order to enforce such payment by the Partnership, first to (i) institute suit or exhaust its remedies against HEP Operating or others liable on the HEP Operating Obligations or any other person, (ii) enforce 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.]

 

14


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

 

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

/s/ Michael C. Jennings

  Michael C. Jennings
  Chief Executive Officer
HFRM:
HollyFrontier Refining & Marketing LLC
By:  

/s/ George J. Damiris

  George J. Damiris
  Chief Executive Officer and President

 

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


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

/s/ George J. Damiris

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

/s/ Michael C. Jennings

  Michael C. Jennings
  Chief Executive Officer

 

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


Exhibit A

to

Second Amended and Restated

Master Throughput Agreement

 

 

Definitions

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

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

Agreement” has the meaning set forth in the preamble to this Agreement.

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

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 and Tulsa West Tankage individually; and “Applicable Assets” means all of the foregoing assets, collectively.

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

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

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

 

Exhibit A-1


ASTM” means ASTM International.

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.

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 Refinery and more specifically described in Exhibit I-1 attached hereto.

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

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

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

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

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

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

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

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

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

 

Exhibit A-2


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

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

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

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

Devon Lease Connections” has the meaning set forth in Exhibit G-3.

DRA” has the meaning set forth in Section 2.6.

Effective Time” means 12:01 a.m., Dallas, Texas time, on March 31, 2016.

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

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

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

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

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

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

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

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

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

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

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

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

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

Exercise Notice” has the meaning set forth in Exhibit F.

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

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

 

Exhibit A-3


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

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

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

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

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

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

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

HFRM” has the meaning set forth in the Preamble.

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

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

HollyFrontier” means HollyFrontier Corporation, a Delaware corporation.

Holly Tulsa” means Holly Refining & Marketing – Tulsa LLC.

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

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

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

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

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

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

Lovington Loading Rack” means that certain asphalt loading rack located at the Lovington, New Mexico refinery.

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

 

Exhibit A-4


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

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

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, as depicted on Exhibit G-1 (Map of Pipeline System and Pipeline System Capacity by Segment), and (b) with the volume capacities as set forth on Exhibit G-1, described on Exhibit G-2 (Construction Projects) and described on Exhibit G-3 (Devon Lease Connections).

Master Lease and Access Agreement” means that certain Master Lease and Access Agreement dated as of the date hereof among certain of the Affiliates of HEP Operating and the owners of the Refineries.

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

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

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

MSCFD” means thousands of cubic feet per day.

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

Navajo” has the meaning set forth in the Preamble.

New Tank” means the new petroleum products storage tankage to be added to the Applicable Assets as identified on Exhibits H, I 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-5


Omnibus Agreement” means the Fifteenth Amended and Restated Omnibus Agreement, dated as of the date hereof.

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

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

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, and the El Dorado Delivery Lines, and any other pipeline included in the Applicable Assets.

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

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

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

Products” has the meaning set forth in Exhibit C.

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

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

Refined Products” means gasoline, kerosene, ethanol and diesel fuel.

 

Exhibit A-6


Refinery” means the Lovington, New Mexico refinery owned by Navajo; the El Dorado, Kansas refinery owned by Frontier El Dorado; the Cheyenne, Wyoming refinery owned by Frontier Refining; and the Tulsa, Oklahoma refinery owned by Holly Tulsa.

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

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

Subsidiary” means with respect to any Person (the “Owner”), any corporation or other Person of which securities or other interests having the power to elect a majority of that 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.

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

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

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

Tulsa East Refinery” means the refinery owned by Holly Tulsa and located at 905 West 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 Holly Tulsa, HEP Tulsa LLC and Holly Energy Storage – Tulsa.

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

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

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

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

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

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

 

Exhibit A-7


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

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

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

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

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

 

Exhibit A-8


Exhibit B

to

Second 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

Second 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
  $0.5334/bbl2   40,000
bpd2
  $0.3137/bbl   —      FERC Adjustment   —      July 1, 2015   —      12:01 a.m. on June 1, 2013 to Sept. 1, 2024 (the “Malaga Commencement Date”)

 

* Tariffs listed on this Exhibit are effective as of July 1, 2015, other than the Base Tariff with respect to the El Dorado Assets – Pipelines, which is effective as of February 22, 2016, the Base Tariff with respect to the Tulsa West Tankage, which is effective as of March 31, 2016 and the Tulsa East Assets – Tulsa Group 1 Tankage, which is effective as of May 1, 2016.

 

1  As may be adjusted pursuant to Exhibit G.

 

2  During the first five years of the Applicable Term, following the Malaga Commencement Date, HFRM shall pay HEP Operating an extra surcharge per barrel (the “Surcharge Tariff”). The Surcharge Tariff for each Contract Quarter is equal to:

Actual Construction Costs – $38,500,000

Minimum Pipeline Throughput × 365× 5

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

 

Exhibit C-1


Applicable
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
   $0.1625/bbl   125,000 bpd
of
Intermediate
and Refined
Product
   $0.01/bbl   —     PPI Adjustment   3% in any calendar year (applicable to each individual tariff)   July 1, 2012     —        12:01 a.m. on Nov. 1, 2011 to 12:01 a.m. on Oct. 31, 2026; provided that with respect to 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
   $0.4793 /
bbl3,4
  154,000 bpd
of Products
   $0.2167/bbl   —                        
     Loading Rack         20,000
bpd
   20,000 bpd    $0.2708/bbl   —      —     —                        

 

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

                      Final Construction Cost                      

0.9 × 8.1928 × Minimum Tankage Throughput × 365

For example, if the Final Construction Costs = $1,500,000, the per barrel increase in the Tankage Base Tariff would be calculated as follows:

$1,500,000/(0.9 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.

 

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    $0.3251/bbl    50,600 bpd    $0.1517/bbl   —      PPI Adjustment   3% in any calendar year (applicable to each individual tariff)4    July 1, 2012   —      12:01 a.m. on Nov. 1, 2011 to 12:01 a.m. on Oct. 31, 2026; provided that with respect to (a) Cheyenne New Tank 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    $0.4673/bbl3,5    45,100 bpd    $0.2167/bbl   —                       
     Cheyenne Loading Rack              41,000 bpd    $0.2708/bbl    None    —     —                       

 

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

 

Exhibit C-3


Applicable
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    $0.1116/bbl         —     —      PPI Adjustment   3% in any calendar year (applicable to each individual tariff)    July 1, 2011   —      11:59 p.m. on Mar. 31, 2010 to 12:01 a.m. on Dec. 1, 2024
                           
    

Tulsa Group 1

Tankage

   Various    1,362,550 bbls    80,000 bpd    $0.3960/bbl    Each throughput barrel over the Minimum Throughput Commitment but less than or equal to the Excess Tariff Threshold    $0.1116/bbl   $0.2455/bbl (over 120,000 bpd of Refined Products, in the aggregate on average for each Contract Quarter)                       
                           
    

Tulsa Group 1

Loading Rack

   Various    26,000 bpd    26,000 bpd    $0.3348/bbl    —      —     —                         
                           
    

Tulsa Group 2

Tankage

   Various    2,122,644 bbl    90,000 bpd    $0.4605/bbl    Each throughput barrel over the Minimum Throughput Commitment but less than or equal to the Excess Tariff Threshold    $0.1116/bbl   $0.2455/bbl (over 120,000 bpd of Refined Products, in the aggregate on average for each Contract Quarter)                       
                           
    

Tulsa Group 2

Loading Rack

        1,800 bpd    1,800 bpd    $0.3906/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 Interconnect-ing Pipelines6         Distillate
Interconnect-
ing Pipeline
– 45,000 bpd
(maximum)
  45,000 bpd   $0.2267/bbl
(to 45,000
bpd in the
aggregate,
on
average
for each
Contract
Quarter)
  Over 45,000 bpd and less than or equal to 65,000 bpd    $0.0758/bbl   $0.0541/bbl
(over
65,000
bpd of
Refined
Products,
in the
aggregate
on
average
for each
Contract
Quarter)
                   
               Gasoline
Interconnect-
ing 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   64,000   $0.0693/   —      —     —                      

 

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)

               Interconnect-
ing Pipeline –
10,000
MSCFD of

hydrogen
(maximum)

 

  MSCFD    MSCF/
day
                                    
               Refinery Fuel
Gas

Interconnect-
ing Pipeline –
32,000
MSCFD of
refinery fuel
gas
(maximum)

 

                                             
               Refinery Sour
Fuel Gas
Interconnecting
Pipeline –
22,000
MSCFD of
refinery sour
fuel gas
(maximum)
                                             
                           
Lovington Assets    Lovington Loading Rack    Asphalt and any other petroleum or petroleum based or derived products    4,000 bpd   4,000
bpd
   $0.3906/bbl         —     —      PPI 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   $0.7174/bbl   Each throughput barrel over the Minimum Throughput Commitment   $0.3757/bbl8   —      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   $0.091/bbl   Each throughput barrel over the Minimum Throughput Commitment   $0.01/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
               
Tulsa West Tankage   Tankage   Crude/Lef   396,000 bpd   80,000 bpd   $0.218/bbl   —     —     —      PPI Adjustment   Subject to 1% minimum / 3% cap9    July 1, 2017   $649,896   12:01 a.m. on March 31, 2016 to 12:01 a.m. on March 31, 2026

 

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%).

 

Exhibit C-7


Applicable Tariff Adjustments

FERC Adjustment:

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

PPI Adjustment:

Each Applicable Tariff shall be adjusted on July 1 of each calendar year by an amount equal to the upper change in the annual change rounded to four decimal places of the Producers Price Index-Commodities-Finished Goods, (PPI), et al. (“PPI”), produced by the U.S. Department of Labor, Bureaus of Labor Statistics. The series ID is 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.

Index no longer Published

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

 

Exhibit C-8


Exhibit D

to

Second Amended and Restated

Master Throughput Agreement

 

 

Measurement of Shipped Volumes

 

Applicable Asset            
      Type of Applicable Asset    Measurement of Volumes
Malaga Pipeline System    Pipelines   

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

Whites City Road Station to HEP Artesia Station

Whites City Road Station to Beeson Station

Whites City Road Station to Plains Pipeline Bisti Connection

HEP Artesia Station to Beeson Station

HEP Artesia Station to Plains Pipeline Bisti Connection

Beeson Station to Plains Pipeline Bisti Connection

 

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

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

HEP Artesia Station to Beeson Station (8-inch)

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

 

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

 

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

El Dorado

Assets

   Pipelines   

Pipeline delivery throughput shall be determined by the shipments of Products by pipeline (and not over the Loading Racks) from the El Dorado Refinery.

 

   Tankage   

Tankage throughput shall be determined by the sum of Products shipped from the El Dorado Refinery but not including shipments of coke and sulfur. For the avoidance of doubt, no Tankage throughput fees shall be paid for movements of Products within the El Dorado Refinery.

 

   Loading Rack    The Loading Rack Tariff will be paid for all quantities of Products or other materials loaded at the Loading Racks or the asphalt loading rack and any Products or other materials shipped using the weight scales.
Cheyenne Assets    Cheyenne Receiving Assets   

Crude Oil throughput shall be determined by the total shipments of Crude Oil by pipeline, truck and rail received at the Cheyenne Refinery.

 

   Cheyenne Tankage   

Tankage throughput shall be determined by the sum of Products shipped by the Refinery but not including shipments of coke and sulfur. For the avoidance of doubt, no Tankage throughput fees shall be paid for movements of Products within the Cheyenne Refinery.

 

   Cheyenne Loading Rack    The Applicable Tariff for the Loading Rack will be paid for (A) all quantities of Products shipped out of the Cheyenne Refinery by pipeline or asphalt loading racks, and (B) all quantities of Products, Crude Oil and any other materials (such as coke and sulfur) loaded at the Loading Racks or the weight scales.

 

Exhibit D-1


Applicable Asset    Type of Applicable Asset    Measurement of Volumes
Tulsa East Assets    Pipelines   

Pipeline throughput will be determined by the quantities of Refined Product shipped on the Tulsa Pipelines.

 

     Group 1 Tankage   

Group 1 Tankage throughput shall be determined by the sum of Refined Products shipped on the Pipelines and loaded at the Group 1 Loading Rack. Any streams moved internally within the Tulsa East Refinery will not be included in determining the volumes for any Minimum Revenue Commitment for the Group 1 Tankage.1

 

   Group 1 Loading Rack   

The Group 1 Loading Rack Tariff will be paid for all quantities of Products loaded at the Group 1 Loading Rack.

 

   Group 2 Tankage   

Group 2 Tankage throughput shall be determined by the sum of pipeline quantities of Crude Oil and Intermediate Products received at the Tulsa East Refinery, including Crude Oil and Intermediate Products received at the Tulsa East Refinery from the Tulsa West Refinery. Any streams moved internally within the Tulsa East Refinery will not be included in determining the volumes for any Minimum Revenue Commitment for the Group 2 Tankage. Any Refined Products received from the Tulsa West Refinery or moved out of the Tulsa East Refinery will not be included in determining the volumes for the Minimum Revenue Commitment for the Group 2 Tankage.1

 

   Group 2 Loading Rack   

The Group 2 Loading Rack Tariff will be paid for all quantities of Products loaded at the Group 2 Loading Rack.

 

   Interconnecting Pipelines   

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

 

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

Lovington Assets    Loading Rack    The Loading Rack Tariff will be paid for all quantities of Products loaded at the Lovington Loading Rack.
Roadrunner Assets    N/A    N/A
El Dorado Crude Tank Farm Assets    El Dorado Crude Tankage    El Dorado Tankage throughput shall be determined by the sum of the pipeline quantities of Product received at the El Dorado Crude Tankage, based on custody transfer meters. For avoidance of doubt, no throughput fees shall be paid for movements of Products among the El Dorado Crude Tankage.
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.

 

1  For the avoidance of doubt, any high sulfur diesel fuel that HFRM may transport from the Tulsa West Refinery through the Group 1 Tankage or Group 2 Tankage for processing in the Tulsa East 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.

 

Exhibit D-2


Exhibit E

to

Second 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 Surcharge”) equal to the increased expenses (or lower revenues) or capital costs, as a direct result thereof, as agreed upon by the Parties. If the Parties are unable to agree upon the High-API Surcharge, the High-API Surcharge will be determined pursuant to the dispute resolution provisions of the Omnibus Agreement. Any amounts paid by HFRM as a High-API Surcharge shall not count toward satisfaction of any Minimum Revenue Commitment.
       
El Dorado Assets    —      —      —  
Cheyenne Assets    HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Cheyenne Receiving Assets, and (ii) be responsible for all volumetric losses in the Cheyenne Receiving Assets up to a maximum of 0.5%. HEP Operating shall, during the Applicable Term, be responsible for all volumetric losses in excess of 0.5% in the Cheyenne Receiving Assets. Gains and losses will be calculated for each Contract Quarter and offset against each other.    —      —  

 

Exhibit E-1


Applicable Assets    Volumetric Gains and Losses    Line Fill    High-API Oil Surcharge
Tulsa East Assets    HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Tulsa Pipelines, and (ii) be responsible for all volumetric losses in the Tulsa Pipelines up to a maximum of 0.5%. HEP Tulsa shall, during the Applicable Term, be responsible for all volumetric losses in excess of 0.5% in the Tulsa Pipelines. Gains and losses will be calculated for each Contract Quarter and offset against each other.    —      —  
       
Lovington Assets    —      —      —  
Roadrunner Assets    HFRM shall, during the Applicable Term, (i) absorb all volumetric gains in the Roadrunner Pipeline, and (ii) be responsible for all volumetric losses in the Roadrunner Pipeline up to a maximum of 0.5%. HEP Operating shall, during the Applicable Term, be responsible for all volumetric losses in excess of 0.5% in the Roadrunner Pipeline. Gains and losses will be calculated for each Contract Quarter and offset against each other.    —      —  
       
El Dorado Crude Tank Farm Assets    —      —      —  
     
Tulsa West Tankage    —      —      —  

 

Exhibit E-2


Exhibit F

to

Second Amended and Restated

Master Throughput Agreement

 

 

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

 

Applicable Assets      
      Types of Tariffs that may be increased (as applicable)    Threshold
Malaga Pipeline System   

Pipeline Base Tariff

Pipeline Incentive Tariff

   None
     
El Dorado Assets   

Pipeline Base Tariff

Tankage Base Tariff

Loading Rack Base Tariff

  

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

 

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

     
Cheyenne Assets   

Cheyenne Receiving Assets Base Tariff

Cheyenne Tankage Base Tariff

Cheyenne Loading Rack Base Tariff

  

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

 

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

     
Tulsa East Assets   

Tulsa Pipelines Base Tariff

Tulsa Group 1 Tankage Base Tariff

Tulsa Group 1 Loading Rack Tariff

Tulsa Group 2 Tankage Base Tariff

Tulsa Group 2 Loading Rack Tariff

 

  

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

 

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

 

Exhibit F-1


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

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

 

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

     
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.

 

Exhibit F-2


Exhibit G

to

Second Amended and Restated

Master Throughput Agreement

 

 

Special Provisions: Malaga Pipeline System

1. Construction Projects. HEP Operating agrees to use commercially reasonable efforts to (i) complete the construction projects set forth on Exhibit G-2 and (ii) build the 25 lease connections listed on Exhibit G-3 (the “Devon Lease Connections” and, together with the construction projects set forth on Exhibit G-2, the “Malaga Construction Projects”). With respect to Item 4 listed on Exhibit G-2, HFRM shall reimburse HEP Operating 100% of the actual costs and expenses of those Malaga Construction Projects. HEP Operating shall bear the costs of constructing all of the other Malaga Construction Projects listed on Exhibit G-2 and Exhibit G-3, other than Item 4 on Exhibit G-3.

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

2.1 Malaga Capacity Estimate. HFRM may initiate the process by which it will exercise its option by delivering to HEP Operating a written request for a statement of HEP 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.

2.4 Increase in Minimum Capacity Commitment and Minimum Throughput Commitment. If HFRM timely exercises its option at the end of the Malaga Initial Period or a

 

Exhibit G


Subsequent Year in accordance with this Section 2, then, with respect to the next Subsequent Year and the remainder of the Applicable Term thereafter:

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

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

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

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

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

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

 

Exhibit G


Exhibit G-1

to

Second Amended and Restated

Master Throughput Agreement

 

 

Map of Pipeline System and Pipeline System Capacity by Segment

See attached

 

Exhibit G-1


 

Exhibit G-1


Exhibit G-2

to

Second Amended and Restated

Master Throughput Agreement

 

 

Construction Projects

 

1. Whites City Road Station

 

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

 

2. HEP Artesia Station

 

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

 

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

 

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

 

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

 

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

 

  f. Build additional truck off loading facility at HEP Artesia Station.

 

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

 

3. HEP Beeson Station and Bisti Delivery

 

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

 

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

 

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

 

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

 

Exhibit G-2


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

 

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

 

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

 

Exhibit G-2


Exhibit G-3

to

Second Amended and Restated

Master Throughput Agreement

 

 

Devon Lease Connections

 

Battery Name

   Field Name   

Location

   Status

Diamond

   Parkway    32 ###-###-#### N 104.0701295 W    Producing

Emerald

   Parkway    32 ###-###-#### N 104.1045269 W    Producing

Beryl

   Parkway    32 ###-###-#### N 104.0829194 W    Producing

Onyx

   Parkway    32.638176 N 104.093915 W    Producing

Coral

   Parkway    32 ###-###-#### N 104.0745216 W    Producing

Turquoise

   Parkway    32 ###-###-#### N 104.0701851 W    Producing

Agate

   Parkway    32 ###-###-#### N 104.0873003 W    Producing

Jasper

   Parkway    32.623619 N 104.090791 W    Producing

Beetle Juice 19 Fed #1H

   Hackberry    32° 39’ 7.41” N 103° 54’ 4.05” W    Producing

Beetle Juice 19 Fed #3H

   Hackberry    32° 39’ 9.054” N 103° 54’ 43.471” W    Producing

Capella 14 Fed #1H

   Hackberry    32° 40’ 0.638” N 103° 50’ 4.152” W    Producing

Strawberry 7 Fed #2

   Hackberry    32° 40’ 43” N 103° 54’ 20.8” W    Producing

Strawberry 7 Fed #4

   Hackberry    32° 40’ 6.93” N 103° 54’ 4.28” W    Producing

Sirius 17 Fed #1H

   Hackberry    32° 39’ 59.165” N 103° 54’ 2.605” W    Producing

Sirius 17 Fed #2H

   Hackberry    32° 39’ 47.98” N 103° 53’ 2.44” W    Producing

Sirius 17 Fed #3H

   Hackberry    32° 39’ 30.98” N 103° 53’ 56.18” W    Producing

Arcturus 18 Fed #1H

   Hackberry    32° 39’ 59.66“N 103° 54’ 2.607” W    Producing

Arcturus 18 Fed #3H

   Hackberry    32° 39’ 23.058” 103° 54’ 57.028” W    Producing

Rigel 20 Fed Com #1H

   Hackberry    32° 39’ 7.185” N 103° 53’ 56.214” W    Producing

Rigel 20 Fed Com #3H

   Hackberry    32° 38’ 36.881” N 103° 53’ 56.099” W    Producing

Regulus 26 Fed #1

   Hackberry    32° 63’ 76.832” N 103° 83’ 24.245” W    Producing

Spica 25 Fed #1

   Hackberry    32° 63’ 76.834” N 103° 83’ 22.620” W    Producing

Vega 29 Fed Com #1

   Hackberry    32° 63’ 77.726” N 103° 88’ 57.377” W    Producing

Serene Sisters 25 Fed #1H

   Hackberry    32° 43’ 31.099” N 103° 49’ 3.506” W    Producing

Serene Sisters 25 Fed #3H

   Hackberry    32° 42’ 42.721” N 103° 49’ 32.488” W    Producing

 

Exhibit G-3


Exhibit H

to

Second 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


Exhibit H-1

to

Second Amended and Restated

Master Throughput Agreement

 

 

El Dorado Loading Rack

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

 

Exhibit H-1


Exhibit H-2

to

Second Amended and Restated

Master Throughput Agreement

 

 

El Dorado Tankage

 

TANK ID NUMBER

   CURRENT
SERVICE/PRODUCT
   NOMINAL CAPACITY, BBLS

1

   Naptha    2,885

2

   Naptha    2,885

3

   ULSD    40,425

15

   ULSD    12,422

16

   Light Slop    28,880

17

   Gasoline    92,740

18

   Gasoline    88,600

19

   Gasoline    90,733

20

   Finish Gasoline    17,961

21

   ULSD    120,639

23

   ULSD    113,182

24

   ULSD    119,269

25

   Av Jet    65,117

29

   CRU1 Feed    33,723

30

   CRU2 Feed    39,417

31

   ULSD    23,792

32

   Finish Gasoline    74,847

64

   Gasoline    17,961

65

   Gasoline    17,941

66

   Naptha    22,582

75

   ULS k    24,938

78

   ULS k    9,226

127

   Heavy Slop    20,504

652

   Sour Distilate    90,000

642

   HTU2 Chg.    78,511

134

   HTU2 Chg.    76,492

649

   HTU4 CHg.    100,000

137

   Gas Oil/Sour diesel    191,899

138

   Gas Oil    194,091

139

   Gas Oil    74,792

142

   Gas Oil    191,563

143

   Gas Oil    191,570

159

   Slurry    9,778

167

   Slurry    8,908

650

   ULSD Dock    36,000

178

   Coke Charge/Swing Tank    80,000

 

Exhibit H-2


TANK ID NUMBER

   CURRENT
SERVICE/PRODUCT
   NOMINAL CAPACITY, BBLS

192

   Idled    8,908

212

   Coker Chg.    76,524

213

   Asphalt    77,675

215

   AV Jet    67,529

216

   Alkylate    72,618

218

   Gas Oil    77,675

219

   Reformate    71,466

220

   Swing Tank    71,495

221

   Gasoline Swing    71,508

222

   Gasoline Swing    71,509

223

   Reformate    72,893

224

   Jet Fuel    71,534

225

   HTU1 Chg, kerosene    28,882

226

   Finish Gasoline    27,679

227

   Natural Gasoline    27,701

230

   Diesel (RAM)    4,780

231

   Light Cycle (RAM)    1,923

243

   Toluene    11,300

244

   Toluene    10,175

250

   FCCU Gasoline    75,354

251

   FCCU Gasoline    75,968

252

   FCCU Gasoline    75,968

253

   Natural Gasoline    74,653

254

   Isomerate    19,318

255

   Isomerate    19,318

256

   TEL Wash    950

447

   Finish Gasoline    17,730

448

   Gasoline    16,109

453

   Ethanol    5,121

457

   HTU3 Chg, LSR    32,690

458

   Isomerate    32,690

490

   ULSD    116,094

600

   Propane    625

601

   Propane    625

602

   Propane    625

603

   Propane    625

604

   Propane    625

605

   Propane    625

606

   Propane    625

607

   Propane    625

608

   Propane    625

609

   Propane    625

610

   Propane    625

 

Exhibit H-2


TANK ID NUMBER

   CURRENT
SERVICE/PRODUCT
   NOMINAL CAPACITY, BBLS

611

   Propane    625

612

   Propane    625

613

   Propane    625

614

   Propane    625

615

   Propane    625

616

   Propane    625

617

   Propane    625

618

   Propane    625

619

   Propane    625

620

   Propane    575

621

   Propane    100

640

   Asphalt    66,859

641

   Biodiesel    6,813

647

   Asphalt    76,600

 

Exhibit H-2


Exhibit H-3

to

Second Amended and Restated

Master Throughput Agreement

 

 

Specifications for New Tank

 

TANK ID NUMBER

   CURRENT
SERVICE/PRODUCT
   NOMINAL CAPACITY, BBLS

651

   Heavy Atmospheric Gas Oil
(GASO)
   32,000

 

Exhibit H-3


Exhibit I

to

Second Amended and Restated

Master Throughput Agreement

 

 

Special Provisions: Cheyenne Assets

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

2. Construction of New Tank. HEP Operating shall, or shall cause its Affiliate to, use its commercially reasonable efforts to construct a New Tank at the Cheyenne Refinery in accordance with the specifications set forth on Exhibit I-4. 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 I-2 reflecting the addition of the New Tank and attach it to this Agreement. Such amended Exhibit I-2 shall be numbered Exhibit I-2.1, dated and appended as an additional schedule to this Agreement and shall replace the prior version of Exhibit I-2 in its entirety after its date of effectiveness.

 

Exhibit I


Exhibit I-1

to

Second Amended and Restated

Master Throughput Agreement

 

 

Cheyenne Loading Rack

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

 

Exhibit I-1


Exhibit I-2

to

Second Amended and Restated

Master Throughput Agreement

 

 

Cheyenne Receiving Assets

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

Petroleum Storage Tanks:

 

TANK ID NUMBER

   CURRENT SERVICE/PRODUCT    NOMINAL
CAPACITY, BBLS

2-036

   Recovered Oil / Crude slop    5,056

2-063

   Crude HSR    10,096

2-067

   Crude LSR    10,093

2-072

   Crude    80,581

2-073

   Crude    80,551

2-074

   Crude    79,766

 

Exhibit I-2


Exhibit I-3

to

Second Amended and Restated

Master Throughput Agreement

 

 

Cheyenne Tankage

 

TANK ID NUMBER

   CURRENT
SERVICE/PRODUCT
   NOMINAL CAPACITY, BBLS

1-107

   Intermediate Distillate    69,942

1-013

   Coker Distillate    1,914

1-014

   Low Sul. Diesel    24,677

1-015

   No Lead Gas    24,677

1-016

   Ethanol    2,564

1-017

   Prem. No Lead Gas    5,034

1-020

   FCC Slurry Oil    5,018

1-021

   Sweet Naphtha / VRU    9,867

1-027

   Slop Oil    4,000

1-028

   BioDiesel    5,179

1-029

   Coker Gas Oil    10,709

1-032

   Diesel    10,124

1-033

   Coker Distillate    10,342

1-040

   FCC Slurry Oil    10,121

1-048

   Coker Distillate    1,341

1-049

   Coker Distillate    1,341

1-050

   Vacuum Bottoms    67,428

1-051

   Slurry    24,938

1-052

   PG 58-28 (Asphalt)    72,017

1-053

   FCCU Slurry    13,506

1-054

   FCCU Slurry    24,938

1-055

   PG 58-28 (Asphalt)    54,499

1-056

   Coker feed tank    61,709

1-058

   Coker Gas Oil    10,493

1-090

   PG 64-22 (Asphalt)    55,954

1-091

   PG 58-28 (Asphalt)    55,954

1-093

   PG 64-22 (Asphalt)    2,602

1-094

   PG 64-22 (Asphalt)    2,602

1-095

   PG 64-22 (Asphalt)    2,602

1-106

   Naptha    120,000

1-108

   Distillate    107,000

1-117

   Vacuum Bottoms    69,942

2-015

   Diesel    28,870

2-016

   Diesel    28,046

2-017

   UC Crack (LCO / Coker Distillate)    28,562

 

Exhibit I-3


TANK ID NUMBER

   CURRENT
SERVICE/PRODUCT
   NOMINAL CAPACITY, BBLS

2-020

   Gas Oil    10,746

2-021

   Gas Oil    10,746

2-022

   UC Crack (LCO / Coker Distillate)    9,731

2-023

   Coker Gas Oil    10,583

2-028

   Cat Gas Oil    80,153

2-034

   Reformate    23,234

2-035

   Alkylate    24,190

2-060

   Burner/Distillate    9,846

2-061

   Sweet Naphtha    10,096

2-062

   Naptha    9,970

2-070

   Sub Grade No Lead Gas    32,608

2-071

   Premium No Lead Gas    32,612

2-075

   Finished NL gasoline    80,278

2-100

   LSR/LSG    41,978

2-101

   Diesel    42,051

2-102

   No Lead Gas    80,278

2-104

   Reformate    54,749

2-105

   Cat Gas Oil    54,954

2-118

   Light Straight Run    40,609

2-119

   FCCU Cat Gas    40,609

2-161

   Finished Diesel    40,485

 

Exhibit I-3


Exhibit I-4

to

Second Amended and Restated

Master Throughput Agreement

 

 

Specifications for New Tank

 

TANK ID NUMBER

   CURRENT
SERVICE/PRODUCT
     NOMINAL CAPACITY, BBLS  
     
     
     

 

Exhibit I-4


Exhibit J

to

Second 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


Exhibit J-1

to

Second Amended and Restated

Master Throughput Agreement

 

 

Tulsa Group 1 Loading Rack

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

 

Exhibit J-1


Exhibit J-2

to

Second Amended and Restated

Master Throughput Agreement

 

 

Tulsa Group 1 Pipeline

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

 

Exhibit J-2


Exhibit J-3

to

Second 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
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
115    ULSD #2 (XT)    150,421
215    ULSD #2 (XT)    150,421
116    Kerosene    37,500
117    ULSD #2 (XT)    63,300
444A    Naptha    32,000
450A    Premium Unleaded    12,574
451    USLD #2 (XT)    11,700
452A    USLD #2 (XT)    12,000
464A    Unleaded Regular    73,000
465    Unleaded Regular    79,320
466    Unleaded Regular    79,320
467A    Unleaded Regular    73,000
470A    Unleaded Regular    151,020
472    Unleaded Regular    151,000
473A    Premium Unleaded (ST)    151,020
601    Unleaded Regular    18,634
602    Premium Unleaded (ST)    10,743
603    USLD #2 (XT)    2,000
605    Ethanol    3,528
606    Empty    500

 

Exhibit J-3


Exhibit J-4

to

Second Amended and Restated

Master Throughput Agreement

 

 

Tulsa Group 2 Loading Rack

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

 

Exhibit J-4


Exhibit J-5

to

Second Amended and Restated

Master Throughput Agreement

 

 

Tulsa Group 2 Tankage

 

TANK ID

  

CURRENT SERVICE

  

CAPACITY (BBLS)

1    Crude    130,450
2    Crude    130,000
3    Crude    116,579
8    Crude    130,233
123    CSO    37,500
471    Unleaded Gasoline    71,371
107A    Flux/Asphalt    55,954
108A    Flux/Asphalt    37,500
109    Flux/Asphalt    37,500
125    Flux/Asphalt    37,500
131    Flux/Asphalt    37,500
442    Gasoline blendstock    11,700
445A    Gasoline blendstock    32,787
446    Gasoline blendstock    11,700
460    LSR    80,000
461A    LSR    80,000
17    FCCU LCO    37,500
114    Raw Diesel    131,000
9    Raw gas oil    150,260
15    Raw gas oil    130,000
16    Raw gas oil-Sour    151,078
6A    Raw naphtha    69,082
4    Scanfiner feed    120,566
40    Raw gas oil    5,734
41    CSO    4,032
34    Truck loading-64/22 asphalt    11,798
36A    Truck loading-58/28 asphalt    11,500
124A    Flux/Asphalt    37,500
18A    Slop    37,500
31    Slop    15,000
7A    Naptha    69,082
14    Naptha    55,000

 

Exhibit J-5


Exhibit J-6

to

Second 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


Exhibit K

to

Second 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) Osage Pipe Line Company, LLC (the “Osage Pipeline”), (b) Rose Rock Midstream, L.P. (the “Rose Rock Pipeline”), and (c) MV Purchasing, LLC (the “MVP Pipeline”), but shall not be required to expend additional monies in connection therewith unless agreed separately in writing with HFRM. HFRM may request HEP Operating to connect the El Dorado Crude Tankage to new pipelines, whether owned by third parties or by HFRM, subject to HEP 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 Osage Pipeline, the Rose Rock Pipeline or the MVP Pipeline. HFRM agrees not to deliver to the Terminal any Products which fail to meet the El Dorado Quality Specifications, or which would in any way be injurious to the El Dorado Crude Tankage, or that may not lawfully be handled in the Tankage. HFRM shall be responsible for and pay for all damages resulting from handling of any Products by HFRM, its designee, or its consignee; provided, however, so long as the Products meet the El Dorado Quality Specifications, HFRM shall not be responsible for damages arising from the negligence or willful misconduct of HEP, its agents, employees or contractors or from ordinary wear and tear.

 

3.

Terminal Maintenance, Changes, or Installations. HEP Operating shall make the El Dorado Crude Tankage available for 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

 

Exhibit K


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

 

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


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


Exhibit K-1

to

Second Amended and Restated

Master Throughput Agreement

 

 

El Dorado Crude Tankage and Jayhawk Tankage

 

1. El Dorado Crude Tankage:

 

Tank ID Number

   Current Service/Product    Nominal Capacity, BBLs
4150    Crude    80,000
4153    Crude    80,000
4154    Crude    80,000
4155    Crude    125,000
4156    Crude    125,000
4157    Crude    125,000
4158    Crude    125,000
4159    Crude    125,000
4160    Crude    125,000

 

2. Jayhawk Tankage:

 

Tank ID Number

   Current Service/Product    Nominal Capacity, BBLs
4151    Crude    80,000
4152    Crude    80,000

 

Exhibit K-1


Exhibit K-2

to

Second 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


Exhibit L-1

to

Second 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


Exhibit L-2

to

Second Amended and Restated

Master Throughput Agreement

 

 

Special Provisions:

Tulsa West Tankage

1. Operating Expense Adjustment. At the end of the first four (4) Contract Quarters during the Applicable Term, HEP Operating shall calculate the aggregate operating expenses incurred in the operation of the Tulsa West Tankage (but such calculation shall not include extraordinary and non-recurring items of expense that are not reasonably expected to recur in future periods during the Applicable Term) (“Initial OPEX”). In the event that the Initial OPEX exceeds the Assumed OPEX for the Tulsa West Tankage set forth on Exhibit C, (A) HFRM shall, within ten (10) days of receiving an invoice from HEP Operating, reimburse HEP Operating an amount equal to (i) the Inital OPEX minus (ii) the Assumed OPEX (the “OPEX Reimbursement Amount”), and (B) from and after the first four (4) Contract Quarters during the Applicable Term, HEP Operating shall, increase the Base Tariff for the Tulsa West Tankage by the amount necessary to allow HEP Operating to recover the OPEX Reimbursement Amount during each subsequent four (4) Contract Quarter period for the remainder of the Applicable Term, and the Parties shall execute an amended, modified, revised or updated Exhibit C reflecting such aggregate OPEX as the new Assumed OPEX for the Tulsa West Tankage. In the event that the Initial OPEX is less than the Assumed OPEX for the Tulsa West Tankage, HEP Operating shall decrease the Base Tariff for the Tulsa West Tankage by the amount necessary to account for the difference between the Assumed OPEX for the Tulsa West Tankage and the Initial OPEX for each subsequent four (4) Contract Quarter Period for the remainder of the Applicable Term, and the Parties shall execute an amended, modified, revised or updated Exhibit C reflecting the Initial OPEX as the new Assumed OPEX for the Tulsa West Tankage.

2. Tank Inspections. Except with respect to Tanks 186 and 187, HFRM will reimburse HEP Operating for the cost of performing the first API 653 inspection on each of the tanks included in the Tulsa West Tankage and any repairs or tests or consequential remediation that may be required to be made to such assets as a result of any discovery made during such inspection.

 

Exhibit L-2