exv10w2






Exhibit 10.2




AMENDED AND RESTATED




INTERMEDIATE PIPELINES AGREEMENT




     This Amended and Restated Intermediate Pipelines Agreement (this “Agreement”) is dated
as of June 1, 2009, by and among Holly Corporation, a Delaware corporation (“Holly”),
Navajo Refining Company, L.L.C., a Delaware limited liability company (formerly Navajo Refining
Company, L.P.) (“Navajo Refining” and, together with Holly, the “Holly Entities”),
Holly Energy Partners, L.P., a Delaware limited partnership (the “Partnership”), Holly
Energy Partners-Operating, L.P., a Delaware limited partnership (the “Operating
Partnership”), HEP Pipeline, L.L.C., a Delaware limited liability company (“HEP
Pipeline”), Lovington-Artesia, L.L.C., a Delaware limited liability company
(“Lovington-Artesia”), HEP Logistics Holdings, L.P., a Delaware limited partnership (the
“General Partner”), Holly Logistic Services, L.L.C., a Delaware limited liability company
(“Holly GP”), and HEP Logistics GP, L.L.C., a Delaware limited liability company (“OLP
GP” and, together with the Partnership, the Operating Partnership, HEP Pipeline,
Lovington-Artesia, the General Partner and Holly GP, the “Partnership Entities”), and
amends and restates in its entirety the Pipelines Agreement dated July 8, 2005 (the “Original
Pipelines Agreement”), among the Holly Entities and the Partnership Entities other than
Lovington-Artesia. Each of the Holly Entities and the Partnership Entities are individually
referred to herein as a “Party” and collectively as the “Parties.”



RECITALS:




     WHEREAS, Pursuant to that certain Purchase and Sale Agreement dated as of July 6, 2005 (the
“2005 Purchase Agreement”) by and among Holly, Navajo Refining, Navajo Pipeline Co., L.P.
(“Navajo Pipeline”), the Partnership, the Operating Partnership and HEP Pipeline, Navajo
Pipeline and Navajo Refining transferred and conveyed to HEP Pipeline, and HEP Pipeline acquired,
certain of the Intermediate Product Pipelines which historically were utilized by the Holly
Entities to transport Intermediate Products;



     WHEREAS, in connection with the closing of the transactions contemplated by the 2005 Purchase
Agreement the Parties entered into the Original Pipelines Agreement pursuant to which the Holly
Entities continued to transport Intermediate Products in the Intermediate Product Pipelines and the
Partnership provides transportation services to the Holly Entities;



     WHEREAS, Lovington-Artesia is the owner of a newly constructed 16” pipeline (the “16”
Pipeline”) currently running 65 miles from Holly’s crude oil distillation and vacuum
distillation facilities in Lovington, New Mexico to Holly’s petroleum refinery in Artesia, New
Mexico;



     WHEREAS, pursuant to that certain LLC Interest Purchase Agreement dated as of June 1, 2009
(the “2009 Purchase Agreement”) by and among Holly, Navajo Pipeline and the Operating
Partnership, Navajo Pipeline has agreed to transfer and convey to the Operating Partnership, and
the Operating Partnership has agreed to acquire, all of the membership interests of
Lovington-Artesia, and thereby acquire the 16” Pipeline;



 









 





     WHEREAS, as of the date hereof, the Holly Entities and the Partnership Entities desire to
amend and restate the Original Pipelines Agreement to, among other things, include the 16”
Pipeline.



     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.



     “16” Pipeline” has the meaning set forth in the recitals to this Agreement.



     “2005 Purchase Agreement” has the meaning set forth in the recitals to this Agreement.



     “2009 Purchase Agreement” has the meaning set forth in the recitals to this Agreement.



     “Additives” has the meaning set forth in Section 2(d).



     “Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is under common control
with, the Person in question, excluding, in the case of Holly, the Partnership Entities.



     “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 by any Governmental Authority having or asserting
jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each
case as amended (including, 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 any of the Partnership Entities, on the one hand, and any of the Holly
Entities, on the other hand, 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.



     “Artesia Refinery” means the refining facilities owned by Navajo Refining in Artesia,
New Mexico.



     “bpd” means barrels per day.



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     “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 11(f).



     “Conflicts Committee” means the Conflicts Committee of Holly Logistic Services,
L.L.C., as general partner of HEP Logistics Holdings, L.P., the sole general partner of the
Partnership.



     “Contract Quarter” means a three-month period that commences on July 1, October 1,
January 1, or April 1, and ends on September 30, December 31, March 31 or June 30, respectively,
except that the initial Contract Quarter commenced on July 8, 2005.



     “Contract Year” means a year that commences on July 1 and ends on the last day of
June, except that the initial Contract Year commenced on July 8, 2005.



     “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.



     “Controlled Affiliates” means with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries is controlled by such Person, excluding
in the case of Holly, the Partnership Entities.



     “Deficiency Notice” has the meaning set forth in Section 9(a).



     “Deficiency Payment” has the meaning set forth in Section 9(a).



     “Effective Date” means July 8, 2005.



     “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 court or 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.



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



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     “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.



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



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



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



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



     “Incentive Tariff” has the meaning set forth in Section 2(b)(ii).



     “Intermediate Products” means crude oil, gas oil, diesel, kerosene, casinghead,
naphtha, normal butane and isobutane, all of which should be characteristically equal to like
products that have been transported on the Intermediate Product Pipelines after January 1, 2003.



     “Intermediate Product Pipelines” means the pipelines described on Exhibit A
attached hereto.



     “Lovington-Artesia” has the meaning set forth in the recitals to this Agreement.



     “Lovington Refinery” means the crude oil distillation and vacuum distillation
facilities owned by Navajo Refining near Lovington, New Mexico.



     “Minimum Revenue Commitment” has the meaning set forth in Section 2(a)(i).



     “Navajo Pipeline” has the meaning set forth in the recitals to this Agreement.



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



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



     “Omnibus Agreement” means the Amended and Restated Omnibus Agreement, dated as of June
1, 2009, among Holly, the Partnership, the Operating Partnership, the General Partner, Holly GP,
OLP GP and Navajo Pipeline, as amended.



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



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



     “Parties” or “Party” has the meaning set forth in the preamble to this
Agreement.



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



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



     “PPI” has the meaning set forth in Section 2(a)(ii).



     “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.



     “Prime Rate” means the prime rate per annum announced by Union Bank of California,
N.A., or if Union Bank of California, 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.



     “Refineries” means, collectively, the Artesia Refinery and the Lovington Refinery.



     “Refund”
has the meaning set forth in Section 9(c).



     “Respondent”
has the meaning set forth in Section 11(f).



     “Term”
has the meaning set forth in Section 6.



     Section 2. Agreement to Use Services Relating to Pipelines.



     This Agreement sets forth a commercial arrangement consistent with historical operational
practices between the Holly Entities and the Partnership Entities as well as the objectives of the
Parties. The Parties intend to be strictly bound by the terms set forth in this Agreement, which
set forth the Minimum Revenue Commitment on the part of the Holly Entities and require the
Partnership Entities to provide certain transportation services to the Holly Entities. The
principal objective of the Partnership Entities is for the Holly Entities to meet or exceed the
Minimum Revenue Commitment. The principal objective of the Holly Entities is for the Partnership
Entities to provide services to the Holly Entities in a manner that enables the Holly Entities to
operate their assets in a manner at least as favorably as their historical practice when the Holly
Entities were the owners of the Intermediate Product Pipelines.



     (a) Minimum Revenue Commitment. During the Term and subject to the terms and
conditions of this Agreement, the Holly Entities agree as follows:




     (i) Subject to Section 3, during the Term the Holly Entities will transport on
the Intermediate Product Pipelines an amount of Intermediate Products in the aggregate that
will produce revenue to the Partnership Entities in an amount at least equal to $2,956,500
per Contract Quarter as such amount may be revised pursuant to Section 2(a)(ii) and
Schedule I attached hereto (the “Minimum Revenue Commitment”).
Notwithstanding the foregoing, in the event that the Effective Date is any date other than
the first day of a calendar quarter, then the Minimum Revenue Commitment for the initial
Contract Quarter shall be prorated based upon the number of days actually in such calendar
quarter and the initial Contract Quarter.



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     (ii) The Minimum Revenue Commitment shall be adjusted on July 1 of each Contract Year
commencing July 1, 2010, by an amount equal to 75% of the upper change in the annual change
rounded to four decimal places of the Producers Price Index-Commodities-Finished Goods,
(PPI), et al. (“PPI”), produced by the U.S. Department of Labor, Bureaus of Labor
Statistics. The series ID is WPUSOP3000 as of December 31, 2007 — 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 2006
change is: [PPI (2005) — PPI (2004)] / PPI (2004) or (155.7 — 148.5) / 148.5 or .0485 or
4.85%. If the PPI index change is negative in a given year then the annual change will be
deemed to be “zero.” If the above index is no longer published, the Holly Entities and the
Partnership Entities 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 Minimum Revenue Commitment. If
the Holly Entities and the Partnership Entities are unable to agree, a new index will be
determined by binding arbitration in accordance with Section 11(f), and the same
method of adjustment for increases in the new index shall be used to calculate increases in
the Minimum Revenue Commitment. To evidence the parties’ agreement to each adjusted Minimum
Revenue Commitment, Holly (on behalf of the Holly Entities) and Holly GP (on behalf of the
Partnership Entities) 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, except as specified
therein.




     (iii) If the Holly Entities are unable for a period in excess of thirty (30)
consecutive days to transport on the Intermediate Product Pipelines the volumes of
Intermediate Products required to meet the Minimum Revenue Commitment as a result of the
Partnership Entities’ operational difficulties, prorationing, or inability to provide the
100,000 bpd capacity, then upon written notice by the Holly Entities to the Partnership
Entities, the Minimum Revenue Commitment will be reduced for such period of time by an
amount equal to: (1) the volume of Intermediate Products that the Holly Entities are unable
to transport on the Intermediate Product Pipelines as a result of the Partnership Entities’
operational difficulties, prorationing or inability to provide the 100,000 bpd capacity
multiplied by (2) the applicable tariffs. This Section 2(a)(iii) shall not apply in
the event HEP gives notice of a Force Majeure event in accordance with Section 3, in
which case the Holly Entities’ Minimum Revenue Commitment shall be suspended in accordance
with and as provided in Section 3.



     (b) Tariffs.




     (i) The tariff rates, and the rules and regulations applicable to intrastate service on
the Intermediate Product Pipelines shall be as set forth in Exhibit B attached
hereto and made a part hereof for all purposes, as such exhibit may be amended from
time-to-time in accordance with this Agreement. The non-incentive tariff rate as of June 1,
2009 of 0.5664 shall be adjusted on July 1 of each Contract Year commencing July 1, 2010, by
an amount equal to 75% of the percentage change, if any, rounded to four



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decimal places of the PPI calculated in accordance with the method set forth in
Section 2(a)(ii); provided, however, that if the PPI index change is
negative in a given year, then the non-incentive tariff rate shall be decreased by an amount
equal to 75% of such percentage change. If the PPI is no longer published, the Holly
Entities and the Partnership Entities shall negotiate in good faith to agree on a new index
that gives comparable protection against inflation or deflation, and the same method of
adjustment for increases or decreases in the new index shall be used to calculate increases
or decreases in the non-incentive tariff rates. If the Holly Entities and the Partnership
Entities are unable to agree, a new index will be determined by binding arbitration in
accordance with Section 11(f), and the same method of adjustment for increases or
decreases in the new index shall be used to calculate increases or decreases in the
non-incentive tariff rates. To evidence the parties agreement to each adjusted tariff rate,
Holly (on behalf of the Holly Entities) and Holly GP (on behalf of the Partnership Entities)
shall execute an amended, modified, revised or updated Exhibit B and attach it to
this Agreement. Such amended, modified, revised or updated Exhibit B shall be
sequentially numbered (e.g. Exhibit B-1, Exhibit B-2, etc.), dated and
appended as an additional exhibit to this Agreement and shall replace the prior version of
Exhibit B in its entirety, except as specified therein.




     (ii) Holly shall pay the Partnership an incentive tariff (the “Incentive
Tariff”) equal to $0.2981 per barrel, as of June 1, 2009, for barrels shipped in excess
of 100,000 bpd; provided, that the Partnership will receive its full base tariff of
$0.5664 per barrel escalated annually at PPI for any and all non-Holly-owned barrels shipped
on the Intermediate Product Pipelines. The Incentive Tariff shall be adjusted on July 1 of
each Contract Year, commencing July 1, 2010, as provided in Section 2(b)(i).



     (c) Obligations of the Partnership Entities. During the Term and subject to the terms
and conditions of this Agreement, including Section 11(c), the Partnership Entities agree
to own or lease, operate and maintain the assets necessary to accept the deliveries from the Holly
Entities and to provide the services required under this Agreement. Notwithstanding the preceding
sentence, subject to Section 11(c) of this Agreement and Article V of the Omnibus
Agreement, the Partnership Entities are free to sell any of their assets, including assets that
provide services under this Agreement, and the Partnership or any of the Partnership Entities are
free to merge with another entity (whether or not the Partnership or any of the Partnership
Entities is the surviving entity in such merger) and are free to sell all of their assets or all of
their equity to another entity at any time. At the request of the Holly Entities, and subject in
each case to any applicable common carrier proration duties, the Partnership Entities agree to use
commercially reasonable efforts to transport by pipeline for the Holly Entities each month during
the Term 100,000 bpd of Intermediate Products on the Intermediate Product Pipelines. To the extent
that the Holly Entities are entitled to an exception under Section 3 to their obligations
under Section 2(a), the corresponding obligations of the Partnership Entities under this
Section 2(c) will be proportionately reduced.



     (d) Pour Point Depressant and Additives. The Partnership Entities shall add pour
point depressant to the Intermediate Products as may be requested by the Holly Entities or as may
be otherwise required to move certain Intermediate Products in the quantities necessary to meet the
Holly Entities schedule. The Holly Entities agree to reimburse the Partnership Entities



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for the cost of adding pour point depressant to those certain Intermediate Products. All fuel
additives, dyes and other additives (“Additives”) requested to be added to the Holly
Entities’ Intermediate Products will be provided by the Holly Entities at no cost to the
Partnership Entities or, if the Partnership Entities provide Additives, then the Holly Entities
agree to promptly reimburse the Partnership Entities for the costs of the Additives. The
Partnership Entities will use commercially reasonable efforts to limit the use of pour point
depressant and Additives to the Intermediate Products to the amounts requested by the Holly
Entities.



     (e) Taxes. The Holly Entities will pay all taxes, import duties, license fees and
other charges by any Governmental Authority levied on or with respect to the Intermediate Products
delivered by the Holly Entities for transportation by the Partnership Entities in the Intermediate
Product Pipelines including, but not limited to, any New Mexico gross receipts and compensating
(use) taxes. The Holly Entities will reimburse the Partnership Entities for the New Mexico gross
receipts tax, but not income tax, levied on or with respect to the transportation services provided
by the Partnership Entities to the Holly Entities under this Agreement. Should any Party be
required to pay or collect any taxes, duties, charges and or assessments pursuant to any federal,
state, county or municipal law or authority now in effect or hereafter to become effective which
are payable by the any other Party pursuant to this Section 2(e) the proper Party shall
promptly reimburse the other Party therefor.



     (f) Timing of Payments. The Holly Entities will make payments to the Partnership
Entities by wire transfer of immediately available funds on a monthly basis during the Term with
respect to services rendered by the Partnership Entities under this Agreement in the prior month.
Payments not received by the Partnership Entities on or prior to the applicable payment date will
accrue interest at the Prime Rate from the applicable payment date until paid.



     (g) Pipeline Direction. Without Holly’s prior written consent, which shall not be
unreasonably withheld, the Partnership Entities will not reverse the direction of any Intermediate
Product Pipeline or connect any other pipeline to the Intermediate Product Pipelines;
provided, however, that the Partnership Entities may take any necessary emergency action to
prevent or remedy a release of Intermediate Products from an Intermediate Product Pipeline without
obtaining the consent required by this Section 2(g). The Holly Entities shall have the
right to reverse the direction of any Intermediate Product Pipelines so long as the Holly Entities
agree to reimburse the Partnership Entities for the additional costs and expenses incurred by the
Partnership Entities as a result of changing the direction of any Intermediate Products on the
Intermediate Product Pipelines (both to reverse and re-reverse), and (ii) to pay the flow reversal
rates as set forth on Exhibit B, as it may be amended from time-to-time in accordance with
this Agreement. The tariff rates applicable to any such flow reversal shall be as set forth on
Exhibit B and shall be adjusted each year as provided in Section 2(a)(ii).



     (h) Notification of Utilization. When requested by the Partnership Entities, Holly
will provide to the Partnership Entities written notification of Holly’s reasonable good faith
estimate of its anticipated future utilization of the Intermediate Product Pipelines of the
Partnership Entities.



     (i) Scheduling of Product Movements. The Partnership Entities will use their
reasonable commercial efforts to schedule Intermediate Products movements and accept



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deliveries of Intermediate Products hereunder in a manner that is consistent with the
historical dealings between the Parties, as such dealings may change from time to time.



     (j) Increases in Pipeline Tariff Rates. If new Applicable Laws are enacted that
require the Partnership Entities to make substantial and unanticipated capital expenditures with
respect to the Intermediate Product Pipelines, the Partnership Entities may amend the tariff rates
in order to recover the Partnership Entities’ cost of complying with these Applicable Laws
(including a reasonable return). The Holly Entities and the Partnership Entities 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 the Holly Entities and the Partnership Entities are unable to agree on the amount of the
new tariff rates that the Partnership Entities will charge, such tariff rates will be determined by
binding arbitration in accordance with Section 11(f). Exhibit B 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(j).



     Section 3. Exceptions to Obligations



     Force Majeure. 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 30 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, 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 3 shall extend the Term. The Holly Entities 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 the Partnership Entities or the Holly Entities from performing
their respective obligations under this Agreement for a period of more than one year, this
Agreement may be terminated by the Partnership Entities or the Holly Entities. Nothing in this
Section 3 shall alter the liability of the Partnership Entities as set forth in the rules
and regulations tariffs for the Intermediate Product Pipelines attached hereto as Exhibit
B.



     Section 4. Agreement to Remain Shipper



     With respect to any Intermediate Products that are produced at a Refinery and transported in
any Intermediate Product Pipeline, the Holly Entities agree that they will continue their
historical commercial practice of owning such Intermediate Products from such point as such
Intermediate Products leave the Refinery until at least such point as they will not be further
transported in an Intermediate Product Pipeline and to continue acting in the capacity of the
shipper of any such Intermediate Products for their own account at all times that such Intermediate
Products are in an Intermediate Product Pipeline.



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     Section 5. Agreement Not to Challenge Tariffs



     The Holly Entities agree to any tariff rate changes for the Intermediate Product Pipelines
determined in accordance with this Agreement. The Holly Entities agree (a) not to challenge, nor
to cause their Controlled 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, intrastate tariffs (including joint tariffs) of the Partnership Entities that the
Partnership Entities have filed or may file containing rates, rules or regulations that are in
effect at any time during the Term and regulate the transportation of Intermediate Products, and
(b) not to protest or file a complaint, nor cause their Controlled 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 Partnership Entities have made or may make at any time during the Term
to change intrastate tariffs (including joint tariffs) for transportation of Intermediate 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 Date, and shall terminate at 12:01 a.m.
Dallas, Texas, time on June 1, 2024, unless extended by written mutual agreement of the Parties
hereto or as set forth in Section 7 (the “Term”); provided, however, that
Section 5 shall survive the termination of this Agreement; and provided, further,
that the Parties agree and acknowledge that the 16” Pipeline was added as an Intermediate Product
Pipeline under this Agreement as of the closing date of the 2009 Purchase Agreement. The Party
desiring to extend this Agreement pursuant to this Section 6 shall provide prior written
notice to the other Party of its desire to so extend this Agreement; such written notice shall be
provided not more than twenty-four (24) months and not less than the later of twelve (12) months
prior to the date of termination or ten (10) days after receipt of a written request from the other
party (which request may be delivered no earlier than twelve (12) months prior to the date of
termination) to provide any such notice or lose such right. The Holly Entities shall deliver
written notice to the Partnership Entities, not more than twenty-four (24) months prior to the date
of termination 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 the Partnership Entities (which request
may be delivered no earlier than twelve (12) months prior to the date of termination) to provide
such notice or lose such right, notifying the Partnership Entities as to whether the Holly Entities
desire to extend this Agreement beyond the date of termination.



     Section 7. Right to Enter into a New Agreement



     (a) In the event that the Holly Entities provide prior written notice to the Partnership
Entities of the desire of the Holly Entities 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 the Partnership Entities shall
have the right to negotiate to enter into one or more pipeline agreements with one or more third
parties to begin after the date of termination, provided that until the end of one year following



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termination without renewal of this Agreement, the Holly Entities will have the right to enter
into a new pipelines agreement with the Partnership Entities on commercial terms that substantially
match the terms upon which the Partnership Entities propose to enter into an agreement with a third
party for similar services with respect to all or a material portion of the Intermediate Product
Pipelines. In such circumstances, the Partnership Entities shall give the Holly Entities
forty-five (45) days prior written notice of any proposed new pipelines agreement with a third
party, and such notice shall inform the Holly Entities of the fee schedules, tariffs, duration and
any other terms of the proposed third party agreement and the Holly Entities shall have forty-five
(45) days following receipt of such notice to agree to the terms specified in the notice or the
Holly Entities 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 the Holly Entities fail to provide prior written notice to the
Partnership Entities of the desire of the Holly Entities to extend this Agreement by written mutual
agreement of the Parties pursuant to Section 6, the Partnership Entities shall have the
right, during the period from the date of the Holly Entities’ 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 agreement with a third party, provided however that at any time during the
twelve (12) months prior to the expiration of the Term, the Holly Entities will have the right to
enter into a new pipelines agreement with the Partnership Entities on commercial terms that
substantially match the terms upon which the Partnership Entities propose to enter into an
agreement with a third party for similar services with respect to all or a material portion of the
Intermediate Product Pipelines. In such circumstances, the Partnership Entities shall give the
Holly Entities forty-five (45) days prior written notice of any proposed new pipelines agreement
with a third party, and such notice shall inform the Holly Entities of the fee schedules, tariffs,
duration and any other terms of the proposed third party agreement and the Holly Entities shall
have forty-five (45) days following receipt of such notice to agree to the terms specified in the
notice or the Holly Entities 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



     All notices or requests or consents provided for by, or permitted to be given pursuant to,
this Agreement must be in writing and must be given by depositing same in the United States mail,
addressed to the Person to be notified, postpaid, and registered or certified with return receipt
requested or by delivering such notice in person or by telecopier or telegram to such Party.
Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by
telegram or telecopier shall be effective upon actual receipt if received during the recipient’s
normal business hours or at the beginning of the recipient’s next business day after receipt if not
received during the recipient’s normal business hours. All notices to be sent to a Party pursuant
to this Agreement shall be sent to or made at the address set forth below or at such other address
as such Party may stipulate to the other Parties in the manner provided in this Section 8:



11









 




if to the Holly Entities:



Holly Corporation

100 Crescent Court

Suite 1600

Dallas, Texas 75201

Attn: David L. Lamp

Facsimile: 214-615-9379



if to the Partnership Entities:



Holly Energy Partners, L.P.

100 Crescent Court

Suite 1600

Dallas, Texas 75201

Attn: David G. Blair

Facsimile: 214-871-3441




     Section 9. Deficiency Payments



     (a) As soon as practicable following the end of each Contract Quarter under this Agreement,
the Partnership Entities shall deliver to the Holly Entities a written notice (the “Deficiency
Notice”) detailing any failure of the Holly Entities to meet their obligations under
Section 2(a)(i); provided that the Holly Entities’ obligations pursuant to the Minimum
Revenue Commitment shall be assessed on a quarterly basis for the purposes of this Section
9. The Deficiency Notice shall (i) specify in reasonable detail the nature of any deficiency
and (ii) specify the approximate dollar amount that the Partnership Entities believe would have
been paid by the Holly Entities to the Partnership Entities if the Holly Entities had complied with
their respective obligations pursuant to Section 2(a)(i) (the “Deficiency
Payment”). The Holly Entities shall pay the Deficiency Payment to the Partnership Entities
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 the Holly Entities disagree with the Deficiency Notice, then, following the payment of
the Deficiency Payment to the Partnership Entities, a senior officer of Holly (on behalf of the
Holly Entities) and a senior officer of Holly GP (on behalf of the Partnership Entities) 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, the Holly Entities shall have
access to the working papers of the Partnership Entities relating to the Deficiency Notice. If
such differences are not resolved within thirty (30) days following the payment of the Deficiency
Payment, the Holly Entities and the Partnership Entities shall, within forty-five (45) days
following the payment of the Deficiency Payment, submit any and all matters which remain in dispute
and which were properly included in the Deficiency Notice to arbitration in accordance with
Section 11(f).



12









 





     (c) If it is finally determined pursuant to this Section 9 that the Holly Entities are
not required to make any or all of the Deficiency Payment (the “Refund”), the Partnership
Entities shall promptly pay to the Holly Entities the Refund, together with interest thereon at the
Prime Rate, in immediately available funds.



     (d) Deficiency Payments will be credited against any payments owed by the Holly Entities in
the following four Contract Quarters in excess of the Minimum Revenue Commitments established by
this Agreement for such Contract Quarters; provided, however, that the Holly
Entities will not receive credit for any Deficiency Payment in any of the following four Contract
Quarters until it has met the Minimum Revenue Commitment in the succeeding Contract Quarter.



     Section 10. Right of First Refusal The Parties acknowledge the right of first
refusal of the Holly Entities with respect to the Intermediate Product Pipelines provided in the
Omnibus Agreement.



     Section 11. Miscellaneous



     (a) Intention as to Refineries. The Holly Entities represent to the Partnership
Entities that, as of the date of this Agreement, they are not considering a shut down of any of the
Refineries or any changes to any of the Refineries that would have a material adverse effect on the
operation of any of the Refineries.



     (b) Amendments and Waivers. No amendment or modification of this Agreement shall be
valid unless it is in writing and signed by the Parties and, in the case of any amendment or
modification adverse to the Partnership Entities, approved by the Conflicts Committee. 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, and, in the case of any waiver by the Partnership
Entities, approved by the Conflicts Committee. Except to the extent adverse to the Partnership
Entities (in which case the approval of the Conflicts Committee shall also be required), any of the
exhibits or schedules to this Agreement may be amended, modified, revised or updated by the Parties
if each of Holly (on behalf of the Holly Entities) and Holly GP (on behalf of the Partnership
Entities) execute an amended, modified, revised or updated exhibit or schedule, as applicable, and
attach it to this Agreement. Such amended, modified, revised or updated exhibits or schedules
shall be sequentially numbered (e.g. Exhibit A-1, Exhibit A-2, etc.), dated and appended as an
additional exhibit or schedule to this Agreement and shall replace the prior exhibit or schedule,
as applicable, in its entirety, except as specified therein. No failure or delay in exercising any
right hereunder, and no course of conduct, shall operate as a waiver of any provision of this
Agreement. No single or partial exercise of a right hereunder shall preclude further or complete
exercise of that right or any other right hereunder.



     (c) Successors and Assigns. This Agreement shall inure to the benefit of, and shall
be binding upon, the Holly Entities, the Partnership Entities 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 (in the case of any assignment by the
Partnership Entities) or the Conflicts Committee (in the case of any assignment by the Holly
Entities), in each case, such consent is not to be unreasonably withheld or delayed;
provided,



13









 




however, that (i) the Partnership Entities may make such an assignment (including a
partial pro rata assignment) to an Affiliate of the Partnership Entities without Holly’s consent,
(ii) the Holly Entities may make such an assignment (including a pro rata partial assignment) to an
Affiliate of the Holly Entities without the consent of the Conflicts Committee, (iii) the Holly
Entities may make a collateral assignment of their rights and obligations hereunder and/or grant a
security interest in all or a portion of the Intermediate Product Pipelines to any bona fide third
party lender or debt holder, or trustee or representative for any of them, and (iv) the Partnership
Entities may make a collateral assignment of their rights hereunder and/or grant a security
interest in all or a portion of the Intermediate Product Pipelines to a bona fide third party
lender or debt holder, or trustee or representative for any of them, if such third party lender,
debt holder or trustee shall have executed and delivered to the Holly Entities a non-disturbance
agreement in such form as is reasonably satisfactory to the Holly Entities and the Holly Entities
execute 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 acceptable to the other Parties, their obligations
under this Agreement.




     (d) 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.



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



     (f) 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 11(f) and the Commercial
Arbitration Rules or the Federal Arbitration Act, the terms of this Section 11(f) 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



14









 







arbitrators must (i) be neutral parties who have never been officers, directors or employees
of any of the Holly Entities, the Partnership Entities or any of their Affiliates and (ii) have not
less than seven (7) years experience in the energy industry. The hearing will be conducted in
Dallas, Texas and commence within thirty (30) days after the selection of the third arbitrator.
The Holly Entities, the Partnership Entities 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.



     (g) 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.



     (h) 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.



     (i) 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.



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




15









 








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



	 	 	 	 	 
	 	HOLLY CORPORATION

 	 
	 	By:  	/s/ David L. Lamp
 	 
	 	 	David L. Lamp, 	 
	 	 	President 	 
	 
	 	NAVAJO REFINING COMPANY, L.L.C.

 	 
	 	By:  	/s/ David L. Lamp
 	 
	 	 	David L. Lamp, 	 
	 	 	Executive Vice President 	 
	 
	 	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 	 
	 
	 	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 1 of 3 to the Amended and Restated Intermediate Pipelines Agreement]




 









 








	 	 	 	 	 
	 	HEP PIPELINE, L.L.C.

 	 
	 	By:  	 HOLLY ENERGY PARTNERS — OPERATING, L.P., 
     its sole member
 
	 	 	 
	 	By:  	                         HEP LOGISTICS GP, LLC, 
its general partner
 	 
	 
	 	 	 
	 	By:  	     /s/ David G. Blair
 	 
	 	 	David G. Blair, 	 
	 	 	Senior Vice President 	 
	 
	 	LOVINGTON-ARTESIA, L.L.C.

 	 
	 	By:  	 HOLLY ENERGY PARTNERS — OPERATING, L.P.,
its sole member
 	 
	 	 	 
	 	By:  	   HEP LOGISTICS GP, LLC, 
its general partner
 	 
	 
	 	 	 
	 	By:  	     /s/ David G. Blair
 	 
	 	 	David G. Blair, 	 
	 	 	Senior Vice President 	 
	 
	 	HEP LOGISTICS HOLDINGS, L.P.

 	 
	 	By:  	   HOLLY LOGISTIC SERVICES, L.L.C.,
its general partner
 	 
	 
	 	 	 
	 	By:  	     /s/ David G. Blair
 	 
	 	 	David G. Blair, 	 
	 	 	Senior Vice President 	 
	 
	 	HOLLY LOGISTIC SERVICES, L.L.C.

 	 
	 	By:  	/s/ David G. Blair
 	 
	 	 	David G. Blair, 	 
	 	 	Senior Vice President 	 
	 



[Signature Page 2 of 3 to the Amended and Restated Intermediate Pipelines Agreement]




 









 








	 	 	 	 	 
	 	HEP LOGISTICS GP, L.L.C.

 	 
	 	By:  	/s/ David G. Blair
 	 
	 	 	David G. Blair, 	 
	 	 	Senior Vice President 	 
	 



[Signature Page 3 of 3 to the Amended and Restated Intermediate Pipelines Agreement]





 











 





SCHEDULE I




MINIMUM REVENUE COMMITMENT




	 	 	 
	 	 	Minimum Revenue Commitment
	Contract Year	 	per Contract Quarter
	 	 	 
	July 8, 2005   	 	$2,956,500
	July 1, 2006   
	 	$3,099,846
	July 1, 2007   
	 	$3,193,418
	July 1, 2008   
	 	$3,316,853
	June 1, 2009(1)
	 	$5,168,400
	July 1, 2009(1)
	 	$5,168,400








 




			
	(1)	 	The Minimum Revenue Commitment per Contract
Quarter is a number agreed to by the Parties in connection
with the amendment and restatement to the Original Pipelines
Agreement and does not represent a mere PPI adjustment from
the Minimum Revenue Commitment per Contract Quarter for the
July 1, 2008 Contract Year.





Schedule I-1





 









 








EXHIBIT A




INTERMEDIATE PRODUCT PIPELINES



“Intermediate Product Pipelines” means (i) approximately 65 miles of 8” feedstock pipeline and 10”
feedstock pipeline, each of which begins at the inlet flange of the delivery manifold motor
operated valves at the Lovington Refinery, near Lovington, New Mexico and ends at the outlet flange
of the turbine meter at the Artesia Refinery in Artesia, New Mexico, along with any and all
connection facilities, including the Enterprise/MAPL connection, field booster pump stations, spare
parts, pipes, valves, motors and miscellaneous equipment directly associated with the 8” inch and
10” feedstock pipelines and (ii) approximately 65 miles of 16” feedstock pipeline which begins at
the inlet flange of the delivery manifold motor operated valves at the Lovington Refinery, near
Lovington, New Mexico and ends at the downstream flange of the motor operated valve header that is
immediately downstream of the positive displacement meter at the Artesia Refinery in Artesia, New
Mexico, along with can booster pump at Lovington, mainline booster pumps at Lovington, spare parts,
pipes, valves, motors, and miscellaneous equipment directly associated with the 16 inch feedstock
pipeline.





A-1









 








EXHIBIT B




Attached to and made

Part of the Amended and Restated Intermediate Pipelines Agreement,

dated June 1, 2009




RATES, RULES AND REGULATIONS




TABLE OF RATES




RATES IN CENTS PER BARREL OF 42 UNITED STATES GALLONS




	 	 	 	 	 	 	 
	ORIGIN	 	 	 	 	 	RATE
	CARRIER’S RECEIVING POINT	 	DESTINATION	 	RATE	 	TYPE
	Beeson Station and 

Lovington, New Mexico
	 	Artesia, New Mexico
	 	0.5664
	 	Non-Incentive
	 	 	0.2981
	 	Incentive
	Barnsdal Station
	 	Lovington, New Mexico
	 	0.5664
	 	Flow Reversal
	Artesia, New Mexico
	 	Lovington, New Mexico
	 	0.5664
	 	Flow Reversal





INCENTIVE RATE TERMS: See Section 2(b)(ii) of the Agreement for the Incentive Rate terms.



NON-INCENTIVE RATE TERMS: See Section 2(b)(i) of the Agreement for the Non-Incentive Rate terms.



FLOW REVERSAL RATE TERMS: See Section 2(g) of the Agreement for additional Flow Reversal terms.





 









 








RULES AND REGULATIONS



Company will receive Intermediate Products for interstate transportation only to established
delivery stations on its own lines, and lines of connecting pipeline companies, on the following
conditions:




	 	 	 	 	 	 	 
	Item No.	 	Subject	 	Application
	 	5	 	 	Definitions
	 	As used in these rules and regulations, the following terms have the following meanings:

	 	 	 	 	 	 	“Barrels” means 42 United States gallons at sixty degrees (60°) Fahrenheit.

	 	 	 	 	 	 	“Carrier” means Holly Energy Partners — Operating, L.P.

	 	 	 	 	 	 	“Company” means Holly Energy Partners — Operating, L.P.

	 	 	 	 	 	 	“Consignee” means the party to whom a Shipper has ordered the delivery of Intermediate
Products.

	 	 	 	 	 	 	“Intermediate Products” means crude oil, gas oil, diesel, kerosene, casinghead,
naphtha, normal butane and isobutane, all of which should be characteristically equal
to like products that have been transported on the Intermediate Product Pipelines after
January 1, 2003.

	 	 	 	 	 	 	“Nomination” means an offer by a Shipper to Carrier of a stated quantity of
Intermediate Products for transportation from origin to specified destination.


	 	 	 	 	 	 	
“Shipment” means a volume of Intermediate Products offered to and accepted by Carrier
for transportation.

	 	 	 	 	 	 	“Shipper” means the party who contracts with the Carrier for transportation of
Intermediate Products under the terms of this tariff.

	 	 	 	 	 	 	“Transmix” means the mixture that occurs in normal pipeline operations between
non-compatible Intermediate Products.

	 	 	 	 	 	 	 

	 	10	 	 	Specifications
and
Acceptance
of
Product
	 	Intermediate Products will be accepted for transportation at such time as Intermediate
Products of same quality and specifications are currently being transported from
receiving point to destination. Prior to acceptance of Intermediate Products for
transportation the Company may require from the Shipper a certificate setting forth, in
detail, the specifications of each shipment of Intermediate Products. Carrier may also
make such tests as it deems necessary.

	 	 	 	 	 	 	All additives and inhibitors to be included in Shipper’s Intermediate Products must
first be approved by the Carrier before such Intermediate Products will be accepted for
transportation. If Intermediate Products tendered by Shipper do not contain corrosion
inhibitor compound which is satisfactory to Carrier, then Carrier may, at Shipper’s
expense, inject corrosion inhibitor compound in the Intermediate Products to be
transported, and Shipper and Consignee will accept delivery of shipments at destination
containing portions of the corrosion inhibitor compound.

	 	 	 	 	 	 	Intermediate Products will be accepted for transportation when Shipper has made
necessary arrangements (a) to provide facilities to tender such Intermediate Products
and deliver same at Carrier’s receiving manifold at the origin at pumping rates and
pressures as required by Carrier, and (b) to provide facilities at the destination to
receive the Intermediate Products tendered for transportation at flow rates and
pressures as required by Carrier.

	 	 	 	 	 	 	Carrier may require Shipper to supply adequate buffer material when necessary for
quality control purposes to maintain segregation of Shipments of Intermediate Products.

	 	 	 	 	 	 	 

	 	15	 	 	Shipments-
Nominations and
Minimum
Tender
	 	Shipper will be required to schedule its Intermediate Products for delivery into
Carrier’s receiving tanks or suction manifold at the origin to meet the cycle within
which Carrier schedules the Intermediate Products to move. Intermediate Products shall
be available for shipment 24 hours before the scheduled date for movement into the
Carrier’s pipeline system. Shipper shall deliver Intermediate Products to Carrier at a
pressure no greater than 256 psig and at a flowing pressure of at least 100 psig, at a
temperature of no greater than 135 degrees Fahrenheit.







B-2









 






	 	 	 	 	 	 	 
	Item No.	 	Subject	 	Application
	 	20	 	 	Mixing with

Other

Refined

Petroleum

Products
	 	Carrier will endeavor to deliver substantially the same Intermediate Products as
received from Shipper to the extent permitted by Carrier’s facilities. However, all
shipments will be accepted for transportation only on condition that it shall be
subject to such changes in gravity or quality while in transit as may result from the
mixture with other Intermediate Products in the pipelines.

	 	 	 	 	 	 	Carrier will allocate all Transmix to Shipper. Shipper must accept delivery of
Transmix from Carrier no later than 5 days after notification that Transmix is
available for distribution to Shipper. Shipper will have sole responsibility for the
disposition of its Transmix.

	 	 	 	 	 	 	 

	 	25	 	 	Refined
Petroleum
Products
to be Free
from Liens
and
Charges
	 	Company shall have the right to decline to receive any Intermediate Products which may
be involved in litigation or the title of which may be in dispute, and it may require
of the Shipper satisfactory evidence of his perfect and unencumbered title or
satisfactory indemnity bond to protect Company.

	 	 	 	 	 	 	 

	 	30	 	 	Commodity
	 	Company is engaged in the transportation of Intermediate Products exclusively and
therefore will not accept any other commodity for transportation.

	 	 	 	 	 	 	 

	 	40	 	 	Liability
of
Carrier
	 	Carrier shall not be liable for loss of Intermediate Products in its custody, damage
thereto, or delay caused by fire, storm, flood, epidemics, Acts of God, riots,
insurrection, rebellion, war, act of the public enemy, quarantine, nuclear or atomic
explosion, strikes, picketing, or other labor stoppages, whether of Carrier’s employees
or other, the authority of law, requisition or necessity of Government of the United
States in time of war, default of Shipper or Shipper’s Consignee or any other cause not
due to the sole negligence of Carrier, whether similar or dissimilar to the cause
herein enumerated. In the event of such loss, Shipper shall bear the loss.
Transportation charges will be assessed only on the quantity delivered net of volume
corrections as set forth in Item No. 45 herein.

	 	 	 	 	 	 	 

	 	45	 	 	Gauging,
Testing,
and
Volume
Corrections
	 	Shipments tendered to Carrier for transportation shall be tested by a representative of
Carrier, and gauged or measured by automatic equipment approved by Carrier or by other
methods acceptable in the industry, at locations designated by Carrier. The Shipper
shall have the privilege of being present or represented at the gauging and testing.
Quantities will be computed from correctly compiled tank tables or by Carrier approved
meters. Corrections will be made for temperature from observed degrees Fahrenheit to
sixty degrees (60°) Fahrenheit.

	 	 	 	 	 	 	Shipper shall bear the actual product losses for shrinkage and evaporation incident to
pipeline transportation up to a maximum of twenty-five hundredths (0.25) of a percent.
Carrier shall offset such product losses with any product gains and shall determine the
net product losses on a calendar quarterly basis.

	 	 	 	 	 	 	 

	 	55	 	 	Line Fill
	 	Either prior to or after the acceptance of Shipments for transportation through
Carrier’s pipeline system, Carrier may, upon reasonable notice, require each Shipper to
provide a pro rata part of the volume of Intermediate Products necessary for pipeline
fill. Intermediate Products provided by a Shipper for this purpose may be withdrawn
from the system only with the prior approval of Carrier or after reasonable notice of
such Shipper’s intention.







B-3









 






	 	 	 	 	 	 	 
	Item No.	 	Subject	 	Application
	 	65	 	 	Claims,

Suits,

Time

for

Filing
	 	As a condition precedent to recovery, claims must be filed in writing with Carrier
within nine (9) months after delivery of the property, or in case of failure to make
delivery, then within nine (9) months after a reasonable time for delivery has elapsed;
and suits shall be instituted against Carrier only within two (2) years and one (1) day
from the day when notice in writing is given by Carrier to the claimant that Carrier
has disallowed the claim or any part or parts thereof specified in the notice. Where
claims are not filed or suits are not instituted thereon in accordance with the
foregoing provisions, Carrier shall not be liable, and such claims will not be paid.








B-4