Agreement

Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

Exhibit 10.1
PIPELINES, TANKAGE AND LOADING RACK
THROUGHPUT AGREEMENT
(TULSA EAST)
     This Pipelines, Tankage and Loading Rack Throughput Agreement (this “Agreement”) is dated as of December 1, 2009, by and between Holly Refining & Marketing-Tulsa, LLC (“Holly Tulsa”) and HEP Tulsa LLC (“HEP Tulsa”). Each of Holly Tulsa and HEP Tulsa are individually referred to herein as a “Party” and collectively as the “Parties.”
RECITALS:
     WHEREAS, pursuant to that certain Asset Sale and Purchase Agreement dated as of October 1, 2009 (the “Purchase Agreement”) by and among Holly Tulsa, HEP Tulsa and Sinclair Tulsa Refining Company, Holly Tulsa acquired certain refining assets and other related assets located in Tulsa, Oklahoma and HEP Tulsa acquired certain assets related to the refining assets acquired by Holly Tulsa (the “HEP Purchased Assets”);
     WHEREAS, in connection with the closing of the transactions contemplated by the Purchase Agreement, Holly Tulsa and HEP Tulsa desire to enter into this Agreement to, among other things, set forth the terms and conditions under which HEP Tulsa will provide certain transportation, storage and loading services for Holly Tulsa.
     NOW, THEREFORE, in consideration of the covenants and obligations contained herein, the Parties hereby agree as follows:
     Section 1. Definitions
     Capitalized terms used throughout this Agreement and not otherwise defined herein shall have the meanings set forth below.
     “Affiliate” means, with 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, Holly Tulsa, on the one hand, and HEP Tulsa, on the other hand, shall not be considered affiliates of each other.
     “Agreement” has the meaning set forth in the preamble to this Agreement.
     “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.
     “Arbitrable Dispute” means any and all disputes, Claims, controversies and other matters in question between Holly Tulsa and HEP Tulsa, arising out of or relating to this Agreement or the alleged breach hereof, or in any way relating to the subject matter of this Agreement regardless of whether (a) allegedly extra-contractual in nature, (b) sounding in contract, tort or otherwise, (c) provided for by Applicable Law or otherwise or (d) seeking damages or any other relief, whether at law, in equity or otherwise.
     “Assumed OPEX” means the amount set forth on Schedule IV attached hereto.
     “bpd” means barrels per day.
     “Claim” means any existing or threatened future claim, demand, suit, action, investigation, proceeding, governmental action or cause of action of any kind or character (in each case, whether civil, criminal, investigative or administrative), known or unknown, under any theory, including those based on theories of contract, tort, statutory liability, strict liability, employer liability, premises liability, products liability, breach of warranty or malpractice.
     “Claimant” has the meaning set forth in Section 13(e).
     “Closing Date” has the meaning for such term contained in the Purchase Agreement.
     “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.
     “Covered Environmental Losses” has the meaning set forth in Section 10(a).
     “Damaged Party” has the meaning set forth in Section 12(b).
     “Deficiency Notice” has the meaning set forth in Section 9(a).
     “Deficiency Payment” has the meaning set forth in Section 9(a).
     “DRA” has the meaning set forth in Section 2(f).
     “Effective Time” means 12:01 a.m., Dallas, Texas time, on December 1, 2009.
     “Environmental Laws” means all federal, state, and local laws, statutes, rules, regulations, orders, and ordinances, now or hereafter in effect, relating to protection of the
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

2


 

environment including, without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other environmental conservation and protection laws, each as amended from time to time.
     “Force Majeure” means acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, wars, blockades, insurrections, riots, storms, floods, washouts, arrests, the order of any Governmental Authority having jurisdiction while the same is in force and effect, civil disturbances, explosions, breakage, accident to machinery, storage tanks or lines of pipe, inability to obtain or unavoidable delay in obtaining material or equipment, and any other causes whether of the kind herein enumerated or otherwise not reasonably within the control of the Party claiming suspension and which by the exercise of due diligence such Party is unable to prevent or overcome. Notwithstanding anything in this Agreement to the contrary, inability of a Party to make payments when due, be profitable or to secure funds, arrange bank loans or other financing, obtain credit or have adequate capacity or production (other than for reasons of Force Majeure) shall not be regarded as events of Force Majeure.
     “Force Majeure Notice” has the meaning set forth in Section 4(b).
     “Governmental Authority” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.
     “Hazardous Substance” means (a) any substance that is designated, defined, or classified as a hazardous waste, hazardous material, pollutant, contaminant, or toxic or hazardous substance, or that is otherwise regulated under any Environmental Law, including, without limitation, any hazardous substance as defined under the Comprehensive Environmental Response, Compensation, and Liability Act, and (b) petroleum, crude oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other refined petroleum hydrocarbons.
     “Heavy Products” means fuel oil, asphalt, coker feed, vacuum tower bottoms, atmospheric tower bottoms, pitch, or roofing flux.
     “HEP Purchased Assets” has the meaning set forth in the recitals to this Agreement.
     “HEP Tulsa” has the meaning set forth in the preamble to this Agreement.
     “HEP Tulsa Payment Obligations” has the meaning set forth in Section 15(a).
     “Holly” means Holly Corporation, a Delaware corporation.
     “Holly Tulsa” has the meaning set forth in the preamble to this Agreement.
     “Holly Tulsa Payment Obligations” has the meaning set forth in Section 14(a).
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

3


 

     “Indemnified Party” means the Persons seeking indemnification in accordance with Section 10.
     “Indemnifying Party” means the Person from whom indemnification may be required in accordance with Section 10.
     “LPG Products” means propane, refinery grade propylene, normal butane, and isobutane.
     “Loading Racks” means the light products, asphalt and propane loading racks located at the Refinery and more specifically described in the Purchase Agreement.
     “Loading Racks Tariff” means the amount set forth on Schedule III attached hereto.
     “Minimum Loading Racks Revenue Commitment” has the meaning set forth in Section 2(c)(i).
     “Minimum Loading Racks Throughput” means 26,000 bpd of Refined Products, LPG Products, and Heavy Products, in the aggregate, on average for each Contract Quarter.
     “Minimum Pipeline Revenue Commitment” has the meaning set forth in Section 2(a)(i).
     “Minimum Pipeline Throughput” means 60,000 bpd of Refined Products, in the aggregate, on average for each Contract Quarter.
     “Minimum Tankage Revenue Commitment” has the meaning set forth in Section 2(b)(i).
     “Minimum Tankage Throughput” means 80,000 bpd of Refined Products, in the aggregate, on average for each Contract Quarter.
     “Omnibus Agreement” means the Second Amended and Restated Omnibus Agreement, dated as of August 1, 2009, by and among Holly, the Partnership and certain of their respective subsidiaries.
     “Operating Partnership” means Holly Energy Partners-Operating, L.P., a Delaware limited partnership.
     “OPEX Recovery Amount” means an amount equal to (a) the difference between the percentage increase in PPI for a given year minus seven percent (7%) multiplied by (b) the then-current Assumed OPEX.
     “Parties” or “Party” has the meaning set forth in the preamble to this Agreement.
     “Partnership” means Holly Energy Partners, L.P., a Delaware limited partnership.
     “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.
     “Pipeline Tariff” means the amount set forth on Schedule I attached hereto.
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

4


 

     “Pipelines” means those two (2) product delivery lines extending from the Tankage to interconnection points with the Magellan pipeline.
     “PPI” has the meaning set forth in Section 2(a)(ii).
     “Prime Rate” means the prime rate per annum announced by Union Bank, N.A., or if Union Bank, N.A. no longer announces a prime rate for any reason, the prime rate per annum announced by the largest U.S. bank measured by deposits from time to time as its base rate on corporate loans, automatically fluctuating upward or downward with each announcement of such prime rate.
     “Products” means Refined Products, LPG Products and Heavy Products.
     “Prudent Industry Practice” means such practices, methods, acts, techniques, and standards as are in effect at the time in question that are consistent with (a) the standards generally followed by the United States pipeline and terminalling industries or (b) such higher standards as may be applied or followed by Holly Tulsa and its Affiliates in the performance of similar tasks or projects, or by HEP Tulsa and its Affiliates in the performance of similar tasks or projects.
     “Purchase Agreement” has the meaning set forth in the recitals to this Agreement.
     “Refined Products” means gasoline, kerosene, ethanol, naphtha, gas oil, LEF (lube extraction feedstocks), and diesel fuel, except high sulfur diesel fuel that Holly Tulsa may transport from its existing Tulsa refinery through the Tankage for processing in the Refinery’s distillate hydrotreater. For the avoidance of doubt, any such high sulfur diesel fuel movements shall not be subject to any Tankage tariff, but the resulting ultra low sulfur diesel fuel produced from the high sulfur diesel fuel and then shipped from the Refinery via either the Pipelines or the Loading Racks shall be subject to the applicable Tankage tariffs.
     “Refinery” means the refinery formerly owned by Sinclair Tulsa Refining Company located in Tulsa, Oklahoma.
     “Refund” has the meaning set forth in Section 9(c).
     “Related Indemnified Parties” means, with respect to each Party hereto, such Party’s Affiliates, such Party and its Affiliates’ successors and assigns, and each of the respective directors and officers (or Persons in any similar capacity if such Person is not a corporation), employees, consultants and agents of such Party, its Affiliates and their respective successors and assigns.
     “Respondent” has the meaning set forth in Section 13(e).
     “Tankage” means the tanks set forth on Exhibit A attached hereto.
     “Tankage Base Tariff” means the amount set forth on Schedule II attached hereto.
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

5


 

     “Tankage Excess Throughput” means 120,000 bpd of Refined Products, in the aggregate, on average for each Contract Quarter.
     “Tankage Excess Tariff” means the amount set forth on Schedule II attached hereto.
     “Tankage Incentive Tariff” means the amount set forth on Schedule II attached hereto.
     “Term” has the meaning set forth in Section 6.
     “Toxic Tort” means a claim or cause of action arising from personal injury or property damage incurred by the plaintiff that is alleged to have been caused by exposure to, or contamination by, Hazardous Substances that have been released into the environment by or as a result of the actions or omissions of the defendant.
     Section 2. Agreement to Use Services Relating to Pipelines, Tankage and Loading Racks.
     The Parties intend to be strictly bound by the terms set forth in this Agreement, which sets forth revenues to HEP Tulsa to be paid by Holly Tulsa and requires HEP Tulsa to provide certain transportation, storage and loading services to Holly Tulsa. The principal objective of HEP Tulsa is for Holly Tulsa to meet or exceed its obligations with respect to the Minimum Pipeline Revenue Commitment, to meet or exceed its obligations with respect to the Minimum Tankage Revenue Commitment, and to meet or exceed its obligations with respect to the Minimum Loading Racks Revenue Commitment. The principal objective of Holly Tulsa is for HEP Tulsa to provide services to Holly Tulsa in a manner that enables Holly Tulsa to operate the Refinery.
     (a) Minimum Pipeline Revenue Commitment. During the Term and subject to the terms and conditions of this Agreement, Holly Tulsa agrees as follows:
     (i) Subject to Section 4, Holly Tulsa shall pay HEP Tulsa throughput fees associated with the Pipelines that will satisfy the Minimum Pipeline Revenue Commitment in exchange for HEP Tulsa providing Holly Tulsa a minimum of 60,000 barrels per day of aggregate capacity in the Pipelines. The “Minimum Pipeline Revenue Commitment” shall be an amount of revenue to HEP Tulsa for each Contract Quarter determined by multiplying the Minimum Pipeline Throughput by the Pipeline Tariff as such Pipeline Tariff may be revised pursuant to Section 2(a)(ii). Holly Tulsa will pay HEP Tulsa the Pipeline Tariff for all quantities of Refined Products shipped on the Pipelines. Notwithstanding the foregoing, in the event that the Effective Time is any date other than the first day of a Contract Quarter, then the Minimum Pipeline Revenue Commitment for the initial Contract Quarter shall be prorated based upon the number of days actually in such contract quarter and the initial Contract Quarter.
     (ii) The Pipeline Tariff shall be adjusted on July 1 of each calendar year commencing on July 1, 2011, by an amount equal to the upper change in the annual change rounded to four decimal places of the Producers Price Index-Commodities- Finished Goods, (PPI), et al. (“PPI”), produced by the U.S. Department of Labor, Bureaus of Labor Statistics; provided that the Pipeline Tariff shall never be increased by
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

6


 

more than 3% for any such calendar year. The series ID is WPUSOP3000 as of September 7, 2009 — located at http://www.bls.gov/data/. The change factor shall be calculated as follows: annual PPI index (most current year) less annual PPI index (most current year minus 1) divided by annual PPI index (most current year minus 1). An example for year 2009 change is: [PPI (2008) — PPI (2007)] / PPI (2007) or (177.1 — 166.6) / 166.6 or .063 or 6.3%. If the PPI index change is negative in a given year then there will be no change in the Pipeline Tariff. If the above index is no longer published, then Holly Tulsa and HEP Tulsa shall negotiate in good faith to agree on a new index that gives comparable protection against inflation, and the same method of adjustment for increases in the new index shall be used to calculate increases in the Pipeline Tariff. If Holly Tulsa and HEP Tulsa are unable to agree, a new index will be determined by binding arbitration in accordance with Section 13(e), and the same method of adjustment for increases in the new index shall be used to calculate increases in the Pipeline Tariff. To evidence the Parties’ agreement to each adjusted Pipeline Tariff, the Parties shall execute an amended, modified, revised or updated Schedule I and attach it to this Agreement. Such amended, modified, revised or updated Schedule I shall be sequentially numbered (e.g. Schedule I-1, Schedule I-2, etc.), dated and appended as an additional schedule to this Agreement and shall replace the prior version of Schedule I in its entirety.
     (iii) If Holly Tulsa is unable to transport on the Pipelines the volumes of Refined Products required to meet the Minimum Pipeline Revenue Commitment as a result of HEP Tulsa’s operational difficulties, prorationing, or the inability to provide sufficient capacity for the Minimum Pipeline Throughput, then the Minimum Pipeline Revenue Commitment applicable to the Contract Quarter during which Holly Tulsa is unable to transport such volumes of Refined Products will be reduced by an amount equal to: (A) the volume of Refined Products that Holly Tulsa was unable to transport on the Pipelines (but not to exceed the Minimum Pipeline Throughput), as a result of HEP Tulsa’s operational difficulties, prorationing or inability to provide sufficient capacity on the Pipelines to achieve the Minimum Pipeline Throughput, multiplied by (B) the Pipeline Tariff. This Section 2(a)(iii) shall not apply in the event HEP Tulsa gives notice of a Force Majeure event in accordance with Section 4, in which case the Minimum Pipeline Revenue Commitment shall be suspended in accordance with and as provided in Section 4.
     (b) Minimum Tankage Revenue Commitment; Tankage Tariffs. During the Term and subject to the terms and conditions of this Agreement, Holly Tulsa agrees as follows:
     (i) Subject to Section 4, Holly Tulsa shall pay HEP Tulsa throughput fees associated with the Tankage that will satisfy the Minimum Tankage Revenue Commitment in exchange for HEP Tulsa providing Holly Tulsa a minimum of 1,362,500 barrels of aggregate capacity in the Tankage. The “Minimum Tankage Revenue Commitment” shall be an amount of revenue to HEP Tulsa for each Contract Quarter determined by multiplying the Minimum Tankage Throughput by the Tankage Base Tariff as such Tankage Base Tariff may be revised pursuant to Section 2(b)(iii). Notwithstanding the foregoing, in the event that the Effective Time is any date other than the first day of a Contract Quarter, then the Minimum Tankage Revenue Commitment for
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

7


 

the initial Contract Quarter shall be prorated based upon the number of days actually in such contract quarter and the initial Contract Quarter. Subject to (i) any Applicable Law and (ii) technical specifications of the Tankage, Holly Tulsa may request that HEP Tulsa change the service of any of the Tankage from storage of one Product to storage of a different Product; provided, however, that Holly Tulsa shall indemnify and hold HEP Tulsa harmless from and against all costs and expenses associated with any such changing of service including but not limited to costs of complying with any Applicable Law affecting such change of service.
     (ii) Tankage throughput shall be determined by the sum of Refined Products shipped on the Pipelines and loaded at the Loading Racks. If the average throughput for any Contract Quarter exceeds the Minimum Tankage Throughput attributable to such Contract Quarter then, (i) for each throughput barrel in excess of the Minimum Tankage Throughput but less than or equal to the Tankage Excess Throughput, Holly Tulsa shall pay HEP Tulsa throughput fees in the amount of the Tankage Incentive Tariff as such amount may be revised pursuant to Section 2(b)(iii) and (ii) for each throughput barrel in excess of the Tankage Excess Throughput, Holly Tulsa shall pay HEP Tulsa throughput fees in the amount of the Tankage Excess Tariff as such amount may be revised pursuant to Section 2(b)(iii).
     (iii) The Tankage Base Tariff, Tankage Incentive Tariff, and Tankage Excess Tariff shall each be adjusted on July 1 of each calendar year commencing on July 1, 2011, by an amount equal to the upper change in the annual change rounded to four decimal places of the PPI following the same procedure as set forth in Section 2(a)(ii) above (including the provisions regarding binding arbitration); provided that the Tankage Base Tariff, Tankage Incentive Tariff, and Tankage Excess Tariff shall never be increased by more than 3% for any such calendar year. To evidence the Parties’ agreement to each adjusted Tankage Base Tariff, Tankage Incentive Tariff, and Tankage Excess Tariff, the Parties shall execute an amended, modified, revised or updated Schedule II and attach it to this Agreement. Such amended, modified, revised or updated Schedule II shall be sequentially numbered (e.g. Schedule II-1, Schedule II-2, etc.), dated and appended as an additional schedule to this Agreement and shall replace the prior version of Schedule II in its entirety.
     (iv) If Holly Tulsa is unable to deliver to the Tankage the volumes of Refined Products required to meet the Minimum Tankage Revenue Commitment as a result of HEP Tulsa’s operational difficulties, prorationing or the inability to provide sufficient capacity, then the Minimum Tankage Revenue Commitment applicable to the Contract Quarter during which Holly Tulsa is unable to deliver such volumes of Refined Products will be reduced by an amount equal to: (A) the volume of Refined Products that Holly Tulsa was unable to deliver to the Tankage (but not to exceed the Minimum Tankage Throughput), as a result of HEP Tulsa’s operational difficulties, prorationing or inability to provide sufficient capacity to achieve the Minimum Tankage Throughput, multiplied by (B) the Tankage Base Tariff. This Section 2(b)(iv) shall not apply in the event HEP Tulsa gives notice of a Force Majeure event in accordance with Section 4, in which case the Minimum Tankage Revenue Commitment shall be suspended in accordance with and as provided in Section 4.
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

8


 

     (c) Minimum Loading Racks Revenue Commitment.
     (i) Subject to Section 4, Holly Tulsa shall pay HEP Tulsa throughput fees associated with the Loading Racks that will satisfy the Minimum Loading Racks Revenue Commitment in exchange for HEP Tulsa providing Holly Tulsa a minimum of 26,000 barrels per day of aggregate capacity at the Loading Racks. The “Minimum Loading Racks Revenue Commitment” shall be an amount of revenue to HEP Tulsa for each Contract Quarter determined by multiplying the Minimum Loading Racks Throughput by the Loading Racks Tariff as such Loading Racks Tariff may be revised pursuant to Section 2(c)(ii). Holly Tulsa will pay HEP Tulsa the Loading Racks Tariff for all quantities of Refined Products , LPG Products, and Heavy Products loaded at the Loading Racks. Notwithstanding the foregoing, in the event that the Effective Time is any date other than the first day of a Contract Quarter, then the Minimum Loading Racks Revenue Commitment for the initial Contract Quarter shall be prorated based upon the number of days actually in such contract quarter and the initial Contract Quarter.
     (ii) The Loading Racks Tariff shall be adjusted on July 1 of each calendar year commencing on July 1, 2011, by an amount equal to the upper change in the annual change rounded to four decimal places of the PPI following the same procedure as set forth in Section 2(a)(ii) above (including the provisions regarding binding arbitration); provided that the Loading Racks Tariff shall never be increased by more than 3% for any such calendar year. To evidence the Parties’ agreement to each adjusted Loading Racks Tariff, the Parties shall execute an amended, modified, revised or updated Schedule III and attach it to this Agreement. Such amended, modified, revised or updated Schedule III shall be sequentially numbered (e.g. Schedule III-1, Schedule III-2, etc.), dated and appended as an additional schedule to this Agreement and shall replace the prior version of Schedule III in its entirety.
     (iii) If Holly Tulsa is unable to load at the Loading Racks the volumes of Refined Products, LPG Products, or Heavy Products, in the aggregate, required to meet the Minimum Loading Racks Revenue Commitment as a result of HEP Tulsa’s operational difficulties, prorationing or the inability to provide sufficient capacity, then the Minimum Loading Racks Revenue Commitment applicable to the Contract Quarter during which Holly Tulsa is unable to load such volumes of Refined Products, LPG Products, or Heavy Products will be reduced for such period of time by an amount equal to: (A) the volume of Refined Products, LPG Products, or Heavy Products, in the aggregate, that Holly Tulsa was unable to load at the Loading Racks (but not to exceed the Minimum Loading Racks Throughput), as a result of HEP Tulsa’s operational difficulties, prorationing or inability to provide sufficient capacity to achieve the Minimum Loading Racks Throughput, multiplied by (B) the Loading Racks Tariff. This Section 2(c)(iii) shall not apply in the event HEP Tulsa gives notice of a Force Majeure event in accordance with Section 4, in which case the Minimum Loading Racks Revenue Commitment shall be suspended in accordance with and as provided in Section 4.
     (d) Volumetric Gains and Losses. Holly Tulsa shall, during the Term, (i) absorb all volumetric gains in the Pipelines, and (ii) be responsible for all volumetric losses in the Pipelines
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

9


 

up to a maximum of 0.5%. HEP Tulsa shall be responsible for all volumetric losses in excess of 0.5% in the Pipelines during the Term.
     (e) Obligations of HEP Tulsa. During the Term and subject to the terms and conditions of this Agreement, including Section 13(b), HEP Tulsa agrees to: (i) own or lease, operate and maintain the Pipelines, Tankage, and Loading Racks and all related assets necessary to handle the Products from Holly Tulsa; (ii) provide the services required under this Agreement and perform all operations relating the Pipelines, Tankage, and Loading Racks including, but not limited to, tank gauging, tank maintenance, tank dike maintenance, loading trucks, interaction with third party pipelines, and customer interface for access agreements; and (iii) maintain adequate property and liability insurance covering the Pipelines, Tankage, Loading Racks and any related assets owned by HEP and necessary for the operation of the Pipelines, Tankage, and Loading Racks. Notwithstanding the preceding sentence, subject to Section 13(b) of this Agreement and Article V of the Omnibus Agreement, HEP Tulsa is free to sell any of its assets, including assets that provide services under this Agreement, and Holly Tulsa is free to merge with another entity and to sell all of its assets or equity to another entity at any time.
     (f) Drag Reducing Agents and Additives. If HEP Tulsa determines that adding drag reducing agents (“DRA”) to the Refined Products is reasonably required to move Refined Products in the quantities necessary to meet Holly Tulsa’s schedule or as may be otherwise be required to safely move such quantities of Refined Products, HEP Tulsa shall provide Holly Tulsa with an analysis of the proposed cost and benefits thereof. In the event that Holly Tulsa agrees to use such additives as proposed by HEP Tulsa, Holly Tulsa shall reimburse HEP Tulsa for the costs of adding any DRA to the and Refined Products.
     (g) Change in Pipeline Direction; Product Service or Origination and Destination. Without Holly Tulsa’s prior written consent, HEP Tulsa shall not (i) reverse the direction of any of the Pipelines; (ii) change, alter or modify the product service of any of the Pipelines; or (iii) change, alter or modify the origination or destination of any of the Pipelines; provided, however, that HEP Tulsa may take any necessary emergency action to prevent or remedy a release of Refined Products from any of the Pipelines without obtaining the consent required by this Section 2(g). Holly Tulsa shall have the right to reverse the direction of any of the Pipelines if Holly Tulsa agrees to (i) reimburse HEP Tulsa for the additional costs and expenses incurred by HEP Tulsa as a result of such change in direction (both to reverse and re-reverse); (ii) reimburse the HEP Tulsa for all costs arising out of HEP Tulsa’s inability to perform under any transportation service contract due to the reversal of the direction of the Pipelines; and (iii) pay the Pipeline Tariff set forth on Schedule I, as it may be amended from time-to-time in accordance with this Agreement, for any such flow reversal.
     (h) Notification of Utilization. Upon request by HEP Tulsa, Holly Tulsa will provide to HEP Tulsa written notification of Holly Tulsa’s reasonable good faith estimate of their anticipated future utilization of Pipelines, Tankage, and Loading Racks as soon as reasonably practicable after receiving such request.
     (i) Scheduling and Accepting Movement. HEP Tulsa will use its reasonable commercial efforts to schedule movement and accept movements of Products in a manner that is
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

10


 

consistent with the historical dealings between the Parties, as such dealings may change from time to time.
     (j) Taxes. Holly Tulsa 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 Holly Tulsa for transportation, storage or loading by HEP Tulsa. Should any Party be required to pay or collect any taxes, duties, charges and or assessments pursuant to any Applicable Law or authority now in effect or hereafter to become effective which are payable by the any other Party pursuant to this Section 2(j) the proper Party shall promptly reimburse the other Party therefor.
     (k) Timing of Payments. Holly Tulsa will make payments to HEP Tulsa by electronic payment with immediately available funds on a monthly basis during the Term with respect to services rendered or reimbursable costs or expenses incurred by HEP Tulsa under this Agreement in the prior month. Payments not received by HEP Tulsa on or prior to the applicable payment date will accrue interest at the Prime Rate from the applicable payment date until paid.
     (l) Increases in Tariff Rates. If new Applicable Laws are enacted that require HEP Tulsa to make capital expenditures with respect to the Pipelines, Tankage or Loading Racks, HEP Tulsa may amend the Pipeline Tariff, Tankage Base Tariff, and Loading Racks Tariff, as applicable, in order to recover HEP Tulsa’s cost of complying with these Applicable Laws (as determined in good faith and including a reasonable return); provided, however, that HEP Tulsa may not amend the Pipeline Tariff, Tankage Base Tariff, or Loading Racks Tariff pursuant to this Section 2(l) unless and until HEP Tulsa has made capital expenditures of $2,000,000.00 in the aggregate with respect to the Pipelines, Tankage or Loading Racks in order to comply with such new Applicable Laws. Holly Tulsa and HEP Tulsa shall use their reasonable commercial efforts to comply with these Applicable Laws, and shall negotiate in good faith to mitigate the impact of these Applicable Laws and to determine the amount of the new tariff rates. If Holly Tulsa and HEP Tulsa are unable to agree on the amount of the new tariff rates that HEP Tulsa will charge, such tariff rates will be determined by binding arbitration in accordance with Section 13(e). Schedule I, Schedule II, Schedule III or any other applicable exhibit or schedule to this Agreement will be updated, amended or revised, as applicable, in accordance with this Agreement to reflect any changes in tariff rates agreed to in accordance with this Section 2(l).
     (m) Reimbursement of Operating Expenses. At the end of the first four (4) Contract Quarters, HEP Tulsa shall calculate its aggregate operating expenses incurred in the operation of the Pipelines, Tankage and Loading Racks pursuant to this Agreement. In the event that such aggregate operating expenses exceed the Assumed OPEX, (i) Holly Tulsa shall reimburse HEP Tulsa for such operating expenses incurred in excess of the Assumed OPEX, and (ii) HEP Tulsa shall increase the Tankage Base Tariff by the amount necessary to increase the Minimum Tankage Revenue Commitment by an amount equal to such aggregate operating expenses in excess of the Assumed OPEX for the remainder of the Term, and the Parties shall execute an amended, modified, revised or updated Schedule IV reflecting such aggregate operating expenses as the new Assumed OPEX. In the event that such aggregate operating expenses are less than the Assumed OPEX, HEP Tulsa shall decrease the Tankage Base Tariff by the amount necessary to decrease the Minimum Tankage Revenue Commitment by an amount equal to the difference between the Assumed OPEX and such actual operating expenses for the remainder of the Term, and the Parties shall execute an amended, modified, revised or updated Schedule IV
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

11


 

reflecting such aggregate operating expenses as the new Assumed OPEX. In the event that the PPI increase for any given year is greater than seven percent (7%), then, in addition to any other applicable increases during such year, HEP Tulsa shall increase the Tankage Base Tariff by an additional amount necessary to increase the Minimum Tankage Revenue Commitment by the OPEX Recovery Amount. Such OPEX Recovery Amount shall be added to the then-current Assumed OPEX, and the Parties shall execute an amended, modified, revised or updated Schedule IV reflecting the addition of such OPEX Recovery Amount to the Assumed OPEX.
     Section 3. Agreement to Remain Shipper
     With respect to any Products that are transported, stored or handled in connection with the Pipelines, Tankage or Loading Racks, as applicable, Holly Tulsa agrees that it will continue acting in the capacity of the shipper of any such Products for its own account at all times that such Products are being transported, stored or handled in the Pipelines, Tankage, or Loading Racks, as the case may be.
     Section 4. Notification of Shut-down or Reconfiguration; Force Majeure
     (a) Holly Tulsa must deliver to HEP Tulsa at least six months advance written notice of any planned shut down or reconfiguration (excluding planned maintenance turnarounds) of the Refinery or any portion of the Refinery that would reduce the Refinery’s output. Holly Tulsa will use its commercially reasonable efforts to mitigate any reduction in revenues or throughput obligations under this Agreement that would result from such a shut down or reconfiguration. If Holly Tulsa shuts down or reconfigures the Refinery or any portion of the Refinery (excluding planned maintenance turnarounds) and reasonably believes in good faith that such shut down or reconfiguration will jeopardize its ability to satisfy its Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment under this Agreement, then within 90 days of the delivery of the written notice of the planned shut down or reconfiguration, Holly Tulsa shall (i) propose a new Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment under this Agreement, as applicable, such that the ratio of the new Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment under this Agreement over the anticipated production level following the shut down or reconfiguration will be approximately equal to the ratio of the original Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment under this Agreement over the original production level and (ii) propose the date on which the new Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment under this Agreement shall take effect. Unless objected to by HEP Tulsa within 60 days of receipt by HEP Tulsa of such proposal, such new Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment under this Agreement shall become effective as of the date proposed by Holly Tulsa. To the extent that HEP Tulsa does not agree with Holly Tulsa’s proposal, any changes in Holly Tulsa’s obligations under this Agreement, or the date on which such changes will take effect, will be determined by binding arbitration in accordance with Section 13(e). Schedule I, Schedule II, or Schedule III or any other applicable exhibit or schedule to this Agreement will be updated, amended or revised, as applicable, in accordance with this Agreement to reflect any
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

12


 

change in the Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment under this Agreement agreed to in accordance with this Section 4(a).
     (b) In the event that any Party is rendered unable, wholly or in part, by a Force Majeure event from performing its obligations under this Agreement for a period of more than thirty (30) consecutive days, then, upon the delivery of notice and full particulars of the Force Majeure event in writing within a reasonable time after the occurrence of the Force Majeure event relied on (“Force Majeure Notice”), the obligations of the Parties, so far as they are affected by the Force Majeure event, shall be suspended for the duration of any inability so caused. Any suspension of the obligations of the Parties as a result of this Section 4(b) shall extend the Term (to the extent so affected) for a period equivalent to the duration of the inability set forth in the Force Majeure Notice. Holly Tulsa will be required to pay any amounts accrued and due under this Agreement at the time of the Force Majeure event. The cause of the Force Majeure event shall so far as possible be remedied with all reasonable dispatch, except that no Party shall be compelled to resolve any strikes, lockouts or other industrial disputes other than as it shall determine to be in its best interests. In the event a Force Majeure event prevents HEP Tulsa or Holly Tulsa from performing substantially all of their respective obligations under this Agreement for a period of more than one (1) year, this Agreement may be terminated by HEP Tulsa or Holly Tulsa by providing written notice thereof to the other Party.
     Section 5. Agreement Not to Challenge Tariffs
     Holly Tulsa agrees to any tariff rate changes for the Pipelines in accordance with this Agreement. Holly Tulsa 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 Tulsa that HEP Tulsa has filed or may file containing rates, rules or regulations that are in effect at any time during the Term and regulate the transportation of the Refined Products, 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 the HEP Tulsa has made or may make at any time during the Term to change tariffs (including joint tariffs) for transportation of Refined Products in each case so long as such tariffs, regulatory filings or rates changed do not conflict with the terms of this Agreement.
     Section 6. Effectiveness and Term
     This Agreement shall be effective as of the Effective Time, and shall terminate at 12:01 a.m. Dallas, Texas, time on December 1, 2024, unless extended by written mutual agreement of the Parties or as set forth in Section 7 (the “Term). The Party(ies) desiring to extend this Agreement pursuant to this Section 6 shall provide prior written notice to the other Parties of its desire to so extend this Agreement; such written notice shall be provided not more than twenty-four (24) months and not less than the later of twelve (12) months prior to the date of termination or ten (10) days after receipt of a written request from another Party (which request may be delivered no earlier than twelve (12) months prior to the date of termination) to provide any such notice or lose such right.
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

13


 

     Section 7. Right to Enter into a New Agreement
     (a) In the event that Holly Tulsa provides prior written notice to HEP Tulsa of the desire of Holly Tulsa to extend this Agreement by written mutual agreement of the Parties, the Parties shall negotiate in good faith to extend this Agreement by written mutual agreement, but, if such negotiations fail to produce a written mutual agreement for extension by a date six months prior to the termination date, then HEP Tulsa shall have the right to negotiate to enter into one or more pipelines, tankage and loading agreements with one or more third parties to begin after the date of termination, provided that until the end of one year following termination without renewal of this Agreement, Holly Tulsa will have the right to enter into a new pipelines, tankage and loading agreement with HEP Tulsa on commercial terms that substantially match the terms upon which HEP Tulsa propose to enter into an agreement with a third party for similar services with respect to all or a material portion of the Pipelines, Tankage, or Loading Racks. In such circumstances, HEP Tulsa shall give Holly Tulsa forty-five (45) days prior written notice of any proposed new pipelines, tankage and loading agreement with a third party, and such notice shall inform Holly Tulsa of the fee schedules, tariffs, duration and any other terms of the proposed third party agreement and Holly Tulsa shall have forty-five (45) days following receipt of such notice to agree to the terms specified in the notice or Holly Tulsa shall lose the rights specified by this Section 7(a) with respect to the assets that are the subject of such notice.
     (b) In the event that Holly Tulsa fails to provide prior written notice to HEP Tulsa of the desire of Holly Tulsa to extend this Agreement by written mutual agreement of the Parties pursuant to Section 6, HEP Tulsa shall have the right, during the period from the date of Holly Tulsa’s failure to provide written notice pursuant to Section 6 to the date of termination of this Agreement, to negotiate to enter into a new pipelines, tankage and loading agreement with a third party; provided, however, that at any time during the twelve (12) months prior to the expiration of the Term, Holly Tulsa will have the right to enter into a new pipelines, tankage and loading agreement with HEP Tulsa on commercial terms that substantially match the terms upon which HEP Tulsa propose to enter into an agreement with a third party for similar services with respect to all or a material portion of the Pipelines, Tankage, or Loading Racks. In such circumstances, HEP Tulsa shall give Holly Tulsa forty-five (45) days prior written notice of any proposed new pipelines, tankage and loading agreement with a third party, and such notice shall inform Holly Tulsa of the fee schedules, tariffs, duration and any other terms of the proposed third party agreement and Holly Tulsa shall have forty-five (45) days following receipt of such notice to agree to the terms specified in the notice or Holly Tulsa shall lose the rights specified by this Section 7(b) with respect to the assets that are the subject of such notice.
     Section 8. Notices
     (a) Any notice or other communication given under this Agreement shall be in writing and shall be (i) delivered personally, (ii) sent by documented overnight delivery service, (iii) sent by email transmission, or (iv) sent by first class mail, postage prepaid (certified or registered mail, return receipt requested). Such notice shall be deemed to have been duly given (x) if received, on the date of the delivery, with a receipt for delivery, (y) if refused, on the date of the refused delivery, with a receipt for refusal, or (z) with respect to email transmissions, on the date the recipient confirms receipt. Notices or other communications shall be directed to the following addresses:
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

14


 

Notices to Holly Tulsa:
c/o Holly Corporation
100 Crescent Court, Suite 1600
Dallas, Texas 75201
Attn: David L. Lamp
Email address: [email protected]
with a copy, which shall not constitute notice, but is required in order to give proper notice, to:
c/o Holly Corporation
100 Crescent Court, Suite 1600
Dallas, Texas 75201
Attn: General Counsel
Email address: [email protected]
Notices to HEP Tulsa:
c/o Holly Energy Partners, L.P.
100 Crescent Court, Suite 1600
Dallas, TX 75201
Attn: David G. Blair
Email address: [email protected]
with a copy, which shall not constitute notice, but is required in order to give proper notice, to:
c/o Holly Energy Partners, L.P.
100 Crescent Court, Suite 1600
Dallas, Texas 75201
Attn: General Counsel
Email address: [email protected]
     (b) Any Party may at any time change its address for service from time to time by giving notice to the other Parties in accordance with this Section 8.
     Section 9. Deficiency Payments
     (a) As soon as practicable following the end of each Contract Quarter under this Agreement, HEP Tulsa shall deliver to Holly Tulsa a written notice (the “Deficiency Notice”) detailing any failure of Holly Tulsa to meet their obligations under Section 2(a)(i), Section 2(b)(i), and Section 2(c)(i); provided, however, that Holly Tulsa’s obligations pursuant to the Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue Commitment, and the Minimum Loading Racks Revenue Commitment shall, in each case, be assessed on a quarterly basis for the purposes of this Section 9. Notwithstanding the previous sentence, any deficiency owed by Holly Tulsa due to its failure to satisfy the Minimum Pipeline Revenue Commitment,
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

15


 

Minimum Tankage Revenue Commitment, or the Minimum Loading Racks Revenue Commitment in any Contract Quarter shall be offset by any revenue owed to HEP Tulsa in excess of the Minimum Pipeline Revenue Commitment, Minimum Tankage Revenue Commitment, or the Minimum Loading Racks Revenue Commitment for such Contract Quarter. The Deficiency Notice shall (i) specify in reasonable detail the nature of any deficiency and (ii) specify the approximate dollar amount that HEP Tulsa believes would have been paid by Holly Tulsa to HEP Tulsa if Holly Tulsa had complied with its obligations pursuant to Section 2(a)(i), Section 2(b)(i), and Section 2(c)(i), as applicable (the “Deficiency Payment”). Holly Tulsa shall pay the Deficiency Payment to HEP Tulsa 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.
     (b) If Holly Tulsa disagrees with the Deficiency Notice, then, following the payment of the undisputed portion of the Deficiency Payment to HEP Tulsa, if any, Holly Tulsa shall send written notice thereof regarding the disputed portion of the Deficiency Payment to HEP Tulsa and a senior officer of Holly (on behalf of Holly Tulsa) and a senior officer of the Partnership (on behalf of HEP Tulsa) shall meet or communicate by telephone at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary and shall negotiate in good faith to attempt to resolve any differences that they may have with respect to matters specified in the Deficiency Notice. During the 30-day period following the payment of the Deficiency Payment, Holly Tulsa shall have access to the working papers of HEP Tulsa relating to the Deficiency Notice. If such differences are not resolved within thirty (30) days following Holly Tulsa’s receipt of the Deficiency Notice, Holly Tulsa and HEP Tulsa shall, within forty-five (45) days following Holly Tulsa’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 arbitration in accordance with Section 13(e).
     (c) If it is finally determined pursuant to this Section 9 that Holly Tulsa is required to pay any or all of the disputed portion of the Deficiency Payment, Holly Tulsa shall promptly pay such amount to HEP Tulsa, together with interest thereon at the Prime Rate, in immediately available funds.
     (d) The Parties acknowledge and agree that there shall be no carry-over of deficiency volumes with respect to the Minimum Pipeline Revenue Commitment, the Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment.
     (e) The Parties acknowledge and agree that the Minimum Pipeline Revenue Commitment, the Minimum Tankage Revenue Commitment, or Minimum Loading Racks Revenue Commitment shall not be aggregated for purposes of determining any deficiency pursuant to this Section 9.
     Section 10. Indemnification
     (a) Environmental Indemnification
     (i) Indemnification of HEP Tulsa. From and after the Closing Date, Holly Tulsa shall indemnify, defend and hold harmless HEP Tulsa and its Related Indemnified
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

16


 

Parties from and against environmental and Toxic Tort losses (including, without limitation, economic losses, diminution in value suffered by third parties, and lost profits), damages, injuries (including, without limitation, personal injury and death), liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent, suffered or incurred by HEP Tulsa or its Related Indemnified Parties or any third party to the extent arising out of:
(A) any violation or correction of violation of Environmental Laws associated with the ownership or operation of the HEP Purchased Assets, or
(B) any event or condition associated with ownership or operation of the HEP Purchased Assets (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the HEP Purchased Assets or the disposal or release of Hazardous Substances generated by operation of the HEP Purchased Assets at non-HEP Purchased Asset locations), including, without limitation, (1) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws, (2) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (3) the cost and expense for any environmental or Toxic Tort pre-trial, trial, or appellate legal or litigation support work;
but only to the extent that such violation complained of under Section 10(a)(i)(A) or such events or conditions included under Section 10(a)(i)(B) occurred before the Closing Date (collectively, “Covered Environmental Losses”); or
     (ii) Burden of Proof for Tank Claims. To the extent that a good faith claim by HEP Tulsa or its Related Indemnified Parties for indemnification under Section 10(a)(i)(A) or Section 10(a)(i)(B) arises from events or conditions at the tanks included in the HEP Purchased Assets or the soil immediately underneath such tanks or such tanks’ secondary containment, and Holly Tulsa refuses to provide such indemnification, then the burden of proof shall be on Holly Tulsa to demonstrate that the events or conditions giving rise to the claim arose after the Closing Date.
     (iii) Indemnification of Holly Tulsa. HEP Tulsa shall indemnify, defend and hold harmless Holly Tulsa and its Related Indemnified Parties from and against environmental and Toxic Tort losses (including, without limitation, economic losses, diminution in value and lost profits suffered by third parties), damages, injuries (including, without limitation, personal injury and death), liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including,
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

17


 

without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent, suffered or incurred by Holly Tulsa and its Related Indemnified Parties or any third party to the extent arising out of:
(A) any violation or correction of violation of Environmental Laws associated with the operation of the HEP Purchased Assets by a Person other than a Holly Entity or ownership and operation of the HEP Purchased Assets by a Person other than a Holly Entity, or
(B) any event or condition associated with the operation of the HEP Purchased Assets by a Person other than Holly Tulsa and its Affiliates or ownership and operation of the HEP Purchased Assets by a Person other than Holly Tulsa and its Affiliates (including, but not limited to, the presence of Hazardous Substances on, under, about or migrating to or from the HEP Purchased Assets or the disposal or release of Hazardous Substances generated by operation of the HEP Purchased Assets at non-HEP Purchased Asset locations) except, where Holly Tulsa or one of its Affiliates is operating an HEP Purchased Asset, to the extent resulting from the negligent acts or omissions or willful misconduct of Holly Tulsa or such Affiliate including, without limitation, (1) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws, (2) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (3) the cost and expense for any environmental or Toxic Tort pre-trial, trial, or appellate legal or litigation support work;
but only to the extent such violation complained of under Section 10(a)(iii)(A) or such events or conditions included under Section 10(a)(iii)(B) occurred after the Closing Date; provided, however, that nothing stated above shall make HEP Tulsa responsible for any post-Closing Date negligent actions or omissions or willful misconduct by Holly Tulsa or its Affiliates.
(b) Indemnification Procedures.
     (i) The Indemnified Party agrees that promptly after it becomes aware of facts giving rise to a claim for indemnification under this Agreement, it will provide notice thereof in writing to the Indemnifying Party, specifying the nature of and specific basis for such claim.
     (ii) The Indemnifying Party shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

18


 

Indemnified Party that are covered by the indemnification under this Agreement, including, without limitation, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided, however, that no such settlement shall be entered into without the consent of the Indemnified Party unless it includes a full release of the Indemnified Party from such matter or issues, as the case may be.
     (iii) The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with respect to all aspects of the defense of any claims covered by the indemnification under this Agreement, including, without limitation, the prompt furnishing to the Indemnifying Party of any correspondence or other notice relating thereto that the Indemnified Party may receive, permitting the name of the Indemnified Party to be utilized in connection with such defense, the making available to the Indemnifying Party of any files, records or other information of the Indemnified Party that the Indemnifying Party considers relevant to such defense and the making available to the Indemnifying Party of any employees of the Indemnified Party; provided, however, that in connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party and further agrees to maintain the confidentiality of all files, records, and other information furnished by the Indemnified Party pursuant to this Section 10(b). In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in connection with the defense of any claims covered by the indemnification set forth in this Agreement; provided, however, that the Indemnified Party may, at its own option, cost and expense, hire and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party informed as to the status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense.
     (iv) In determining the amount of any loss, cost, damage or expense for which the Indemnified Party is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by all amounts recovered by the Indemnified Party under contractual indemnities (other than insurance policies) from third Persons. An Indemnified Party shall be obligated to pursue all contractual indemnities that such Indemnified Party has with third Persons outside of this Agreement, provided, however, if the Indemnified Party’s right to such indemnification is assignable, the Indemnified Party may, in its sole discretion and in lieu of pursuing such claim, elect to assign such indemnification claim to the Indemnifying Party to pursue and shall reasonably cooperate with the Indemnifying Party (including, without limitation, making its relevant books, records, officers, information and testimony reasonably available to the Indemnifying Party) in the Indemnifying Party’s pursuit of such claim. In the event the Indemnified Party recovers under a contractual indemnity from a third Person outside of this Agreement, the amount recovered, less the reasonable out-of-pocket fees and expenses incurred by the Indemnified Party in recovering such amounts, shall reduce the amount such Indemnified Party may recover under this Agreement and if the Indemnified Party receives any such amounts subsequent to an indemnification payment by the Indemnifying Party in respect of such losses, then such Indemnified Party shall promptly
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

19


 

reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification payment up to the amount so received by the Indemnified Party.
     (v) The date on which notification of a claim for indemnification is received by the Indemnifying Party shall determine whether such claim is timely made.
     (c) Survival of Indemnification. The provisions of this Section 10 shall survive the termination of this Agreement (including any termination following the sale of the HEP Purchased Assets).
     Section 11. Right of First Refusal. The Parties acknowledge the right of first refusal of Holly Tulsa with respect to the Pipelines, Tankage, and Loading Racks provided in the Omnibus Agreement.
     Section 12. Limitation of Damages.
     (a) NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF THIS AGREEMENT AND EXCEPT FOR CLAIMS MADE BY THIRD PARTIES WHICH SHALL NOT BE LIMITED BY THIS PARAGRAPH, THE PARTIES AGREE THAT THE RECOVERY BY ANY PARTY OF ANY LIABILITIES, DAMAGES, COSTS OR OTHER EXPENSES SUFFERED OR INCURRED BY IT AS A RESULT OF ANY BREACH OR NONFULFILLMENT BY A PARTY OF ANY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS OR OTHER OBLIGATIONS UNDER THIS AGREEMENT, SHALL BE LIMITED TO ACTUAL DAMAGES AND SHALL NOT INCLUDE OR APPLY TO, NOR SHALL ANY PARTY BE ENTITLED TO RECOVER, ANY INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT OF LOST PROFITS OR OPPORTUNITIES OR BUSINESS INTERRUPTION OR DIMINUTION IN VALUE) SUFFERED OR INCURRED BY ANY PARTY; PROVIDED, HOWEVER, THAT SUCH RESTRICTION AND LIMITATION SHALL NOT APPLY (x) AS A RESULT OF A THIRD PARTY CLAIM FOR SUCH INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES OR (y) TO INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT OF LOST PROFITS OR OPPORTUNITIES OR BUSINESS INTERRUPTION OR DIMINUTION IN VALUE) THAT ARE A RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE BREACHING OR NONFULFILLING PARTY OR ITS AFFILIATES.
     (b) Notwithstanding anything in this Agreement to the contrary and solely for the purpose of determining which of Holly Tulsa or HEP Tulsa, as applicable, shall be liable in a particular circumstance, no Party shall be liable to another Party for any loss, damage, injury, judgment, claim, cost, expense or other liability suffered or incurred by such Party (the “Damaged Party”) except to the extent that the Party causes such loss, damage, injury, judgment, claim, cost, expense or other liability suffered or incurred by the Damaged Party or owns or operates the Pipelines, Tankage, or Loading Racks or other property in question responsible for
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

20


 

causing such loss, damage, injury, judgment, claim, cost, expense or other liability suffered or incurred by the Damaged Party.
     Section 13. Miscellaneous
     (a) Amendments and Waivers. No amendment or modification of this Agreement shall be valid unless it is in writing and signed by the Parties. No waiver of any provision of this Agreement shall be valid unless it is in writing and signed by the Party against whom the waiver is sought to be enforced. Any of the exhibits or schedules to this Agreement may be amended, modified, revised or updated by the Parties if each of the Parties executes an amended, modified, revised or updated exhibit or schedule, as applicable, and attaches it to this Agreement. Such amended, modified, revised or updated exhibits or schedules shall be sequentially numbered (e.g. Schedule I-1, Schedule I-2, etc.), dated and appended as an additional exhibit or schedule to this Agreement and shall replace the prior exhibit or schedule, as applicable, in its entirety, except as specified therein. No failure or delay in exercising any right hereunder, and no course of conduct, shall operate as a waiver of any provision of this Agreement. No single or partial exercise of a right hereunder shall preclude further or complete exercise of that right or any other right hereunder.
     (b) Successors and Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, Holly Tulsa, HEP Tulsa and their respective successors and permitted assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned without the prior written consent of Holly Tulsa (in the case of any assignment by HEP Tulsa) or HEP Tulsa (in the case of any assignment by Holly Tulsa), in each case, such consent is not to be unreasonably withheld or delayed; provided, however, that (i) HEP Tulsa may make such an assignment (including a partial pro rata assignment) to an Affiliate of HEP Tulsa without Holly Tulsa’s consent, (ii) Holly Tulsa may make such an assignment (including a pro rata partial assignment) to an Affiliate of Holly Tulsa without HEP Tulsa’s consent, (iii) Holly Tulsa may make a collateral assignment of their rights and obligations hereunder, and (iv) HEP Tulsa may make a collateral assignment of their rights hereunder and/or grant a security interest in all or a portion of the Pipelines, Tankage, and Loading Racks to a bona fide third party lender or debt holder, or trustee or representative for any of them, without Holly Tulsa’s consent, if such third party lender, debt holder or trustee shall have executed and delivered to Holly Tulsa a non-disturbance agreement in such form as is reasonably satisfactory to Holly Tulsa and Holly Tulsa 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.
     (c) Severability. If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.
     (d) Choice of Law. This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

21


 

     (e) Arbitration Provision. Any and all Arbitrable Disputes must be resolved through the use of binding arbitration using three arbitrators, in accordance with the Commercial Arbitration Rules of the American Arbitration Association, as supplemented to the extent necessary to determine any procedural appeal questions by the Federal Arbitration Act (Title 9 of the United States Code). If there is any inconsistency between this Section 13(e) and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms of this Section 13(e) will control the rights and obligations of the Parties. Arbitration must be initiated within the time limits set forth in this Agreement, or if no such limits apply, then within a reasonable time or the time period allowed by the applicable statute of limitations. Arbitration may be initiated by a Party (“Claimant”) serving written notice on the other Party (“Respondent”) that the Claimant elects to refer the Arbitrable Dispute to binding arbitration. Claimant’s notice initiating binding arbitration must identify the arbitrator Claimant has appointed. The Respondent shall respond to Claimant within thirty (30) days after receipt of Claimant’s notice, identifying the arbitrator Respondent has appointed. If the Respondent fails for any reason to name an arbitrator within the 30-day period, Claimant shall petition the American Arbitration Association for appointment of an arbitrator for Respondent’s account. The two arbitrators so chosen shall select a third arbitrator within thirty (30) days after the second arbitrator has been appointed. The Claimant will pay the compensation and expenses of the arbitrator named by it, and the Respondent will pay the compensation and expenses of the arbitrator named by or for it. The costs of petitioning for the appointment of an arbitrator, if any, shall be paid by Respondent. The Claimant and Respondent will each pay one-half of the compensation and expenses of the third arbitrator. All arbitrators must (i) be neutral parties who have never been officers, directors or employees of any of Holly Tulsa, HEP Tulsa or any of their Affiliates and (ii) have not less than seven (7) years experience in the petroleum transportation industry. The hearing will be conducted in Dallas, Texas and commence within thirty (30) days after the selection of the third arbitrator. Holly Tulsa, HEP Tulsa and the arbitrators shall proceed diligently and in good faith in order that the award may be made as promptly as possible. Except as provided in the Federal Arbitration Act, the decision of the arbitrators will be binding on and non-appealable by the Parties hereto. The arbitrators shall have no right to grant or award indirect, consequential, punitive or exemplary damages of any kind. The Arbitrable Disputes may be arbitrated in a common proceeding along with disputes under other agreements between Holly Tulsa, HEP Tulsa or their Affiliates to the extent that the issues raised in such disputes are related. Without the written consent of the Parties, no unrelated disputes or third party disputes may be joined to an arbitration pursuant to this Agreement.
     (f) 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.
     (g) Further Assurances. In connection with this Agreement and all transactions contemplated by this Agreement, each signatory Party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

22


 

     (h) Headings. Headings of the Sections of this Agreement are for convenience of the Parties only and shall be given no substantive or interpretative effect whatsoever. All references in this Agreement to Sections are to Sections of this Agreement unless otherwise stated.
     Section 14. Guarantee by Holly
     (a) Payment and Performance Guaranty. Holly unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to HEP Tulsa the punctual and complete payment in full when due of all amounts due from Holly Tulsa under the Agreement (collectively, the “Holly Tulsa Payment Obligations”). Holly agrees that HEP Tulsa shall be entitled to enforce directly against Holly any of the Holly Tulsa Payment Obligations.
     (b) Guaranty Absolute. Holly hereby guarantees that the Holly Tulsa Payment Obligations will be paid strictly in accordance with the terms of the Agreement. The obligations of Holly under this Agreement constitute a present and continuing guaranty of payment, and not of collection or collectability. The liability of Holly under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:
     (i) any assignment or other transfer of the Agreement or any of the rights thereunder of HEP Tulsa;
     (ii) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to the Agreement;
     (iii) any acceptance by HEP Tulsa of partial payment or performance from Holly Tulsa;
     (iv) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to Holly Tulsa or any action taken with respect to the Agreement by any trustee or receiver, or by any court, in any such proceeding;
     (v) any absence of any notice to, or knowledge of, Holly, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (i) through (iv); or
     (vi) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.
     The obligations of Holly 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 Holly Tulsa Payment Obligations or otherwise.
     (c) Waiver. Holly hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the Holly Tulsa Payment Obligations and any requirement for HEP Tulsa to protect, secure, perfect or insure any security
Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

23


 

interest or lien or any property subject thereto or exhaust any right or take any action against Holly Tulsa, any other entity or any collateral.
     (d) Subrogation Waiver. Holly agrees that for so long as there is a current or ongoing default or breach of this Agreement by Holly Tulsa, Holly shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from Holly Tulsa for any payments made by Holly under this Section 14, and Holly 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 Holly Tulsa during any period of default or breach of this Agreement by Holly Tulsa until such time as there is no current or ongoing default or breach of this Agreement by Holly Tulsa.
     (e) Reinstatement. The obligations of Holly under this Section 14 shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Holly Tulsa Payment Obligations is rescinded or must otherwise be returned to Holly Tulsa or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of Holly Tulsa or such other entity, or for any other reason, all as though such payment had not been made.
     (f) Continuing Guaranty. This Section 14 is a continuing guaranty and shall (i) remain in full force and effect until the first to occur of the indefeasible payment in full of all of the Holly Tulsa Payment Obligations, (ii) be binding upon Holly, its successors and assigns and (iii) inure to the benefit of and be enforceable by HEP Tulsa and its respective successors, transferees and assigns.
     (g) No Duty to Pursue Others. It shall not be necessary for HEP Tulsa (and Holly hereby waives any rights which Holly may have to require HEP Tulsa), in order to enforce such payment by Holly, first to (i) institute suit or exhaust its remedies against Holly Tulsa or others liable on the Holly Tulsa Payment Obligations or any other person, (ii) enforce HEP Tulsa’s rights against any other guarantors of the Holly Tulsa Payment Obligations, (iii) join Holly Tulsa or any others liable on the Holly Tulsa Payment Obligations in any action seeking to enforce this Section 14, (iv) exhaust any remedies available to HEP Tulsa against any security which shall ever have been given to secure the Holly Tulsa Payment Obligations, or (v) resort to any other means of obtaining payment of the Holly Tulsa Payment Obligations.
     Section 15. Guarantee by the Partnership and Operating Partnership.
     (a) Payment and Performance Guaranty. Each of the Partnership and the Operating Partnership unconditionally, absolutely, continually and irrevocably guarantees, as principal and not as surety, to Holly Tulsa the punctual and complete payment in full when due of all amounts due from HEP Tulsa under the Agreement (collectively, the “HEP Tulsa Payment Obligations”). Each of the Partnership and the Operating Partnership agrees that Holly Tulsa shall be entitled to enforce directly against the Partnership and the Operating Partnership any of the HEP Tulsa Payment Obligations.
Pipelines, Tankage and Loadings Racks Throughput Agreement (Tulsa East)

24


 

     (b) Guaranty Absolute. Each of the Partnership and the Operating Partnership hereby guarantees that the HEP Tulsa Payment Obligations will be paid strictly in accordance with the terms of the Agreement. The obligations of each of the Partnership and the Operating Partnership under this Agreement constitute a present and continuing guaranty of payment, and not of collection or collectability. The liability of each of the Partnership and the Operating Partnership under this Agreement shall be absolute, unconditional, present, continuing and irrevocable irrespective of:
     (i) any assignment or other transfer of the Agreement or any of the rights thereunder of Holly Tulsa;
     (ii) any amendment, waiver, renewal, extension or release of or any consent to or departure from or other action or inaction related to the Agreement;
     (iii) any acceptance by Holly Tulsa of partial payment or performance from HEP Tulsa;
     (iv) any bankruptcy, insolvency, reorganization, arrangement, composition, adjustment, dissolution, liquidation or other like proceeding relating to HEP Tulsa or any action taken with respect to the Agreement by any trustee or receiver, or by any court, in any such proceeding;
     (v) any absence of any notice to, or knowledge of, the Partnership or the Operating Partnership, of the existence or occurrence of any of the matters or events set forth in the foregoing subsections (i) through (iv); or
     (vi) any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor.
     The obligations of each of the Partnership and the Operating 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 Tulsa Payment Obligations or otherwise.
     (c) Waiver. Each of the Partnership and the Operating Partnership hereby waives promptness, diligence, all setoffs, presentments, protests and notice of acceptance and any other notice relating to any of the HEP Tulsa Payment Obligations and any requirement for Holly Tulsa to protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against HEP Tulsa, any other entity or any collateral.
     (d) Subrogation Waiver. Each of the Partnership and the Operating Partnership agrees that for so long as there is a current or ongoing default or breach of this Agreement by HEP Tulsa, the Partnership and the Operating Partnership shall not have any rights (direct or indirect) of subrogation, contribution, reimbursement, indemnification or other rights of payment or recovery from HEP Tulsa for any payments made by the Partnership or the Operating Partnership under this Section 15, and each of the Partnership and the Operating Partnership
Pipelines, Tankage and Loadings Racks Throughput Agreement (Tulsa East)

25


 

hereby irrevocably waives and releases, absolutely and unconditionally, any such rights of subrogation, contribution, reimbursement, indemnification and other rights of payment or recovery it may now have or hereafter acquire against HEP Tulsa during any period of default or breach of this Agreement by HEP Tulsa until such time as there is no current or ongoing default or breach of this Agreement by HEP Tulsa.
     (e) Reinstatement. The obligations of the Partnership and the Operating Partnership under this Section 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 Tulsa Payment Obligations is rescinded or must otherwise be returned to HEP Tulsa or any other entity, upon the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation or reorganization of HEP Tulsa or such other entity, or for any other reason, all as though such payment had not been made.
     (f) Continuing Guaranty. This Section 15 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 HEP Tulsa Payment Obligations, (ii) be binding upon the Partnership, the Operating Partnership, and each of their respective successors and assigns and (iii) inure to the benefit of and be enforceable by Holly Tulsa and their respective successors, transferees and assigns.
     (g) No Duty to Pursue Others. It shall not be necessary for Holly Tulsa (and each of the Partnership and the Operating Partnership hereby waives any rights which the Partnership or the Operating Partnership, as applicable, may have to require Holly Tulsa), in order to enforce such payment by the Partnership or the Operating Partnership, first to (i) institute suit or exhaust its remedies against HEP Tulsa or others liable on the HEP Tulsa Payment Obligations or any other person, (ii) enforce Holly Tulsa’ rights against any other guarantors of the HEP Tulsa Payment Obligations, (iii) join HEP Tulsa or any others liable on the HEP Tulsa Payment Obligations in any action seeking to enforce this Section 15, (iv) exhaust any remedies available to Holly Tulsa against any security which shall ever have been given to secure the HEP Tulsa Payment Obligations, or (v) resort to any other means of obtaining payment of the HEP Tulsa Payment Obligations.
[Remainder of page intentionally left blank. Signature pages follow.]
Pipelines, Tankage and Loadings Racks Throughput Agreement (Tulsa East)

26


 

     IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of the date first written above.
         
  HEP TULSA:

HEP TULSA LLC
 
 
  By:   /s/ David G. Blair   
    David G. Blair   
    Senior Vice President   
 
  HOLLY TULSA:

HOLLY REFINING & MARKETING — TULSA LLC
 
 
  By:   /s/ David L. Lamp   
    David L. Lamp   
    President   
 
ACKNOWLEDGED AND AGREED
FOR PURPOSES OF Section 9(b)
AND Section 14:
         
HOLLY CORPORATION
 
 
By:   /s/ David L. Lamp   
  David L. Lamp   
  President   
 
Signature Page 1 of 2 to the Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

 


 

ACKNOWLEDGED AND AGREED
FOR PURPOSES OF Section 9(b)
AND Section 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/ David G. Blair   
  David G. Blair   
  Senior Vice President   
 
ACKNOWLEDGED AND AGREED
FOR PURPOSES OF Section 15:
     
HOLLY ENERGY PARTNERS-OPERATING, L.P.
 
   
By:
  HEP Logistics GP, L.L.C.,
 
  its General Partner
         
By:   /s/ David G. Blair   
  David G. Blair   
  Senior Vice President   
 
Signature Page 2 of 2 to the Pipelines, Tankage and Loading Rack Throughput Agreement (Tulsa East)

 


 

SCHEDULE I
PIPELINE TARIFF
Pipeline Tariff
 
$0.10 per barrel
Schedule I-1

 


 

SCHEDULE II
TANKAGE TARIFFS
Tankage Base Tariff
 
$0.30 per barrel
Tankage Incentive Tariff
 
$0.10 per barrel
Tankage Excess Tariff
 
$0.22 per barrel
Schedule II-1

 


 

SCHEDULE III
LOADING RACKS TARIFF
Loading Racks Tariff
 
$0.30 per barrel
Schedule III-1

 


 

SCHEDULE IV
ASSUMED OPEX
Assumed OPEX
 
$1,702,000.00
Schedule IV-1

 


 

EXHIBIT A
TANKAGE
             
TANK ID   REFINED PRODUCT   CAPACITY (BBLS)  
10
  ULSD #2 (XT)     37,500  
11
  ULSD #2 (XT)     37,500  
102
  Kerosene     37,500  
103
  Kerosene     37,500  
104
  ULSD #2 (XT)     37,500  
110
  ULSD #1     37,500  
111
  Kerosene     37,500  
115A
  ULSD #2 (XT)     151,000  
115B
  ULSD #2 (XT)     151,000  
116
  Kerosene     37,500  
117
  ULSD #2 (XT)     63,000  
450
  Premium Unleaded     12,000  
451
  USLD #2 (XT)     12,000  
452
  USLD #2 (XT)     12,000  
464
  Unleaded Regular     80,000  
465
  Unleaded Regular     74,000  
466
  Unleaded Regular     80,000  
467
  Unleaded Regular     80,000  
470
  Unleaded Regular     80,000  
472
  Unleaded Regular     151,000  
473
  Premium Unleaded (ST)     80,000  
601
  Unleaded Regular     19,000  
602
  Premium Unleaded (ST)     10,000  
603
  USLD #2 (XT)     2,000  
605
  Ethanol     5,000  
606
  Empty     500  
Exhibit A