EXHIBIT 10.3
SECOND AMENDMENT TO THE SERVICES AGREEMENT
This SECOND AMENDMENT TO THE SERVICES AGREEMENT (“Second Amendment”) is entered
into on August 5, 2013, but effective as of July 1, 2013 (the “Second Amendment
Effective Date”), by and between OILTANKING PARTNERS, L.P., a Delaware limited
partnership (the “Partnership”), OTLP GP, LLC, a Delaware limited liability
company and the general partner of the Partnership (the “General Partner”),
OILTANKING BEAUMONT SPECIALTY PRODUCTS, LLC, a Texas limited liability company
(“Specialty Products”), and OILTANKING NORTH AMERICA, LLC, a Delaware limited
liability company (“OTNA”). The above-named entities are sometimes referred to
in this Second Amendment each as a “Party” and collectively as the “Parties.”
R E C I T A L S:
1.    The Parties have heretofore entered into that certain Services Agreement,
dated and effective as of July 19, 2011 (the “Original Services Agreement”),
which among other things, evidences the Parties’ agreement with respect to (i)
the amount to be paid by the Partnership for certain selling, general,
administrative and operating services to be performed by OTNA and its affiliates
as well as direct expenses incurred by OTNA and its affiliates for and on behalf
of the Partnership and its subsidiaries and (ii) certain indemnification
obligations regarding such services.
2.    The Parties have heretofore entered into a First Amendment to the Services
Agreement on December 31, 2011, but effective as of July 19, 2011 (the “First
Amendment”), which among other things, modifies the reimbursement provisions for
certain expenditures that OTNA incurs or payments that OTNA makes on behalf of
the Partnership and its subsidiaries, and provides for the payment to OTNA of a
fixed fee for certain specified services. The Original Services Agreement as
amended by the First Amendment is herein referred to as the “Services
Agreement.”
3.    The Parties desire to further amend the Services Agreement to increase the
amount of the SG&A Fee (as defined in the Services Agreement) and the SP SG&A
Fee (as defined in the Services Agreement) and (ii) amend and restate Schedule A
to the Services Agreement to include administrative office space.
In consideration of the agreements contained herein, and for other good and
valuable consideration, the Parties hereby amend the Services Agreement as
follows:
ARTICLE I
DEFINED TERMS

1.1    Defined Terms. All capitalized terms which are used but not defined in
this Second Amendment shall have meanings assigned to such terms in the Services
Agreement.

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ARTICLE II
AMENDMENTS TO THE SERVICES AGREEMENT

2.1    The Services Agreement is hereby amended as follows:

(a)Section 2.1(d) of the Services Agreement is hereby revised and amended in its
entirety to read as follows:

“(d)    Subject to the provisions of this Section 2.1(d) and effective as of
Second Amendment Effective Date, OTNA shall be entitled to compensation for the
Services listed in Schedule A (except as set specifically set forth in Schedule
A) (i) from the Partnership Group equal to a fee of $18,453,000 per year,
payable in equal monthly installments (the “SG&A Fee”) and (ii) from Specialty
Products equal to a fee of $372,000 per year payable in equal monthly
installments (the “SP SG&A Fee”). Also subject to the provisions of this Section
2.1(d), OTNA shall be entitled to reimbursement from Specialty Products for all
cash expenses and expenditures that OTNA incurs or payments OTNA makes on behalf
of Specialty Products for OTNA-sourced operator services only (i.e., not
including third-party operators), estimated at $285,000 per year (the “SP
Operator Expenses,” which is not an absolute limit). The SG&A Fee, the SP SG&A
Fee and the SP Operator Expenses (each an “Expenses Amount” and collectively,
the “Expenses Amounts”) shall each be subject to adjustment as follows:
(i)Beginning January 1, 2015 and continuing on January 1 of each year
thereafter, each Expenses Amount shall be increased by the percentage increase,
if any, in the Consumer Price Index - All Urban Consumers, U.S. City Average,
Not Seasonally Adjusted (the “CPI”). The base index (“Base CPI”) shall be the
published CPI as of the month of Effective Date, which shall be compared with
the first or subsequent anniversary date indices (each, a “Final CPI”). The
percentage change will be calculated to the third decimal place and applied to
such Expenses Amount to determine the adjustments to the Expenses Amount in
accordance with the following formula:

Final CPI - Base CPI x Expenses Amount = Adjustment Amount
Base CPI
If the product of the foregoing formula is negative, there shall be no
adjustment to the given Expenses Amount. In the event that the CPI is no longer
kept or published, OTNA shall establish an alternative method of adjusting the
Expenses Amounts based on a then currently published inflation index.

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(ii)If after the Second Amendment Effective Date, the Partnership Group or
Specialty Products completes any acquisition of assets or businesses or the
business of the Partnership Group or Specialty Products otherwise expands, then
the Expenses Amounts shall be appropriately increased, as applicable, in order
to account for adjustments in the nature and extent of the Services provided by
OTNA to the Partnership Entities and Specialty Products, with any such increases
in the Expenses Amounts to be subject to the prior approval of the Conflicts
Committee. Any issues that the Parties are not able to resolve pursuant to the
foregoing sentence shall be resolved in accordance with Section 6.12.

(iii)The Parties will meet at least biannually to review the scope of the
Services, the standards of performance, performance metrics and activity levels
and, if applicable, any adjustments to the Expenses Amounts. The Parties will
use their good-faith efforts to resolve any issues concerning Service standards,
performance metrics or changes in the Expenses Amounts, with any increase or
decrease in the Expenses Amounts to be subject to the prior approval of the
Conflicts Committee. Any issues that the Parties are not able to resolve
pursuant to the foregoing sentence shall be resolved in accordance with Section
6.12.

The SG&A Fee and the SP SG&A Fee are separate and apart from and do not include
reimbursement for direct costs and expenses incurred by OTNA to provide the
Services listed in Schedule B, publicly traded partnership expenses of the
Partnership Group as provided in Section 2.2 or for insurance reimbursements as
provided in Section 2.3.”
(b)Section 6.6 of the Services Agreement is hereby revised and amended in its
entirety to read as follows:

“6.6 Notices. All notices or other communications required or permitted to be
given hereunder shall be in writing and shall be delivered by hand or sent by
facsimile or sent, postage prepaid, by registered, certified or express mail or
reputable overnight courier service and shall be deemed given when so delivered
by hand or facsimile, or if mailed, three days after mailing (one business day
in the case of express mail or overnight courier service), as follows (or at
such other address for a Party as shall be specified by notice given in
accordance with this Section 6.6):
OTNA:
Oiltanking North America, LLC
333 Clay Street, Suite 2400
Houston, Texas 77002
Attention: Brian C. Brantley

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Partnership:
Oiltanking Partners, L.P.
333 Clay Street, Suite 2400
Houston, Texas 77002
Attention: Brian C. Brantley

General Partner:
OTLP GP, LLC
333 Clay Street, Suite 2400
Houston, Texas 77002
Attention: Brian C. Brantley

Specialty Products:
Oiltanking Beaumont Specialty Products, LLC
333 Clay Street, Suite 2400
Houston, Texas 77002
Attention: Brian C. Brantley”

(c)Schedule A to the Services Agreement is hereby amended and restated in its
entirety as set forth in Schedule A attached hereto.

ARTICLE III
MISCELLANEOUS

3.1    Binding Effect. This Second Amendment shall bind and inure to the benefit
of and be enforceable by the Parties hereto and their respective successors and
permitted assigns.

3.2    No Third Party Beneficiaries. Except as otherwise provided, this Second
Amendment is for the sole benefit of the Parties and their successors and
permitted assigns, and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the Parties and their successors and
permitted assigns, any legal or equitable rights hereunder, whether as
third-party beneficiaries or otherwise.

3.3    Amendments. No amendment to this Second Amendment shall be effective
unless it is in writing and signed by each Party hereto.

3.4    Further Assurances. The Parties agree to execute such additional
instruments, agreements and documents and to take such other actions, as may be
necessary to effect the purposes of this Second Amendment.

3.5    Counterparts. This Second Amendment may be executed in two or more
counterparts, and by facsimile, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.

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3.6    Severability. If any term or other provision of this Second Amendment is
invalid, illegal or incapable of being enforced by any applicable rule of law or
public policy, all other conditions and provisions of this Second Amendment
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any Party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the Parties
hereto shall negotiate in good faith to modify this Second Amendment so as to
effect the original intent of the Parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are fulfilled
to the extent possible.

3.7    Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF TEXAS
APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE
WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE WHICH WOULD
RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE.

3.8    Effect of Amendment. This Second Amendment only amends the Services
Agreement as specifically provided herein and all other provisions of the
Services Agreement are hereby ratified and confirmed and shall remain in full
force and effect.

[Signature page follows]
    

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IN WITNESS WHEREOF, the undersigned have executed this Second Amendment as of
the day and year first above written.
 
OILTANKING PARTNERS, L.P.
 
 
By: OTLP GP, LLC, its General Partner
 
 
 
 
 
 
By:
/s/ Anne-Marie Ainsworth
 
 
Name:
Anne-Marie Ainsworth
 
 
Title:
President and Chief Executive Officer
 
 
 
 
 
 
By:
/s/ Jonathan Z. Ackerman
 
 
Name:
Jonathan Z. Ackerman
 
 
Title:
Administrative Representative
 
 
 
 
 
 
OILTANKING NORTH AMERICA, LLC
 
 
 
 
 
 
By:
/s/ Anne-Marie Ainsworth
 
 
Name:
Anne-Marie Ainsworth
 
 
Title:
President and Chief Executive Officer
 
 
 
 
 
 
By:
/s/ Donna Hymel
 
 
Name:
Donna Hymel
 
 
Title:
Administrative Representative
 
 
 
 
 
 
OTLP GP, LLC
 
 
 
 
 
 
By:
/s/ Anne-Marie Ainsworth
 
 
Name:
Anne-Marie Ainsworth
 
 
Title:
President and Chief Executive Officer
 
 
 
 
 
 
OILTANKING BEAUMONT SPECIALTY
 
 
PRODUCTS, LLC
 
 
 
 
 
 
By:
/s/ Anne-Marie Ainsworth
 
 
Name:
Anne-Marie Ainsworth
 
 
Title:
President and Chief Executive Officer
 

Signature Page to Second Amendment to the Services Agreement

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SCHEDULE A
Services Included within the SG&A Fee and the SP SG&A Fee

1)
executive officer compensation and related expenses,

2)
investor relations (provided that the SG&A Fee and the SP SG&A Fee shall not
include, and shall be paid separate and apart from, reimbursement of expenses
for investor relations services that are to be reimbursed pursuant to Section
2.2),

3)
sales and marketing,

4)
corporate legal for support of existing assets of the Partnership Group and
Specialty Products for support of existing assets of the Partnership Group and
Specialty Products,

5)
accounting (provided that the SG&A Fee and the SP SG&A Fee shall not include,
and shall be paid separate and apart from, reimbursement of expenses for
accounting services that are to be reimbursed pursuant to Section 2.2),

6)
treasury and cash management,

7)
creditor management and collections,

8)
internal audit,

9)
tax reporting and administration for support of existing assets of the
Partnership Group and Specialty Products,

10)
insurance administration and claims processing,

11)
risk management,

12)
health, safety, security and environmental affairs for support of existing
assets of the Partnership Group and Specialty Products,

13)
human resources management for support of existing assets of the Partnership
Group and Specialty Products,

14)
payroll administration,

15)
internal training,

16)
engineering services for support of existing assets of the Partnership Group and
Specialty Products,

17)
Enterprise Resource Planning for support of existing assets of the Partnership
Group and Specialty Products,

18)
information technology for support of existing assets of the Partnership Group
and Specialty Products, and

19)
administrative office space for support of existing assets of the Partnership
Group and Specialty Products.

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