Document:

exv10w39

 

Exhibit 10.39

CONTRIBUTION AGREEMENT

     This Contribution Agreement, dated effective as of June 1, 2006 is entered into by and among
Diamond Shamrock Refining and Marketing Company, a Delaware corporation (“DSRMC”)
and Valero GP Holdings, LLC, a Delaware limited liability company (“VEH”). The
foregoing shall be referred to individually as a “Party” and collectively as the
“Parties”.

R E C I T A L S:

     WHEREAS, DSRMC owns a 51.540982% limited liability company interest in VEH
(“VEH Interest”) and a 100% limited liability company interest (the
“Member Interest”) in Valero GP, LLC, a Delaware limited liability company;

     WHEREAS, DSRMC desires to make a capital contribution of 100% of the Member
Interest to VEH in exchange for an additional 0.051103% VEH Interest;

     WHEREAS, DSRMC desires to own an aggregate 51.592085% VEH Interest upon the
completion of the transactions contemplated hereby;

     NOW, THEREFORE, in consideration of their mutual undertakings and agreements
hereunder, the Parties undertake and agree as follows:

ARTICLE I

Definitions

1.1 Definitions. The following capitalized terms have the meanings given below:

     (a) “Agreement” means this Contribution Agreement.

     (b) “DSRMC” is defined in the introductory paragraph of the Agreement.

     (c) “Member Interest” is defined in the recitals to the Agreement.

     (d) “Party” is defined in the introductory paragraph of the Agreement.

     (e) “VEH” is defined in the introductory paragraph of the Agreement.

     (f) “VEH Interest” is defined in the recitals to the Agreement.

ARTICLE II

Transactions

2.1 Contribution of Valero GP LLC Member Interests to VEH. DSRMC hereby grants,
contributes, transfers, assigns and conveys to VEH, its successors and assigns, 100% of the Member
Interest, and VEH hereby accepts the Member Interest as a capital contribution in exchange for a
0.051103% VEH Interest.

 

 

     TO HAVE AND TO HOLD 100% of the Member Interest unto VEH, its successors and assigns, together
with all and singular the rights and appurtenances thereto in anywise belonging, subject, however,
to the terms and conditions stated in this Agreement, forever.

2.2 General Provisions. Notwithstanding anything to the contrary contained in this
Agreement, none of the Parties shall be deemed to have assumed, and the Member Interest has not
been or is not being contributed subject to any liens or security interests securing consensual
indebtedness covering the Member Interest.

ARTICLE III

FURTHER ASSURANCES

3.1 Further Assurances. From time to time after the date hereof, and without any
further consideration, the Parties agree to execute, acknowledge and deliver all such additional
deeds, assignments, bills of sale, conveyances, instruments, notices, releases, acquittances and
other documents, and will do all such other acts and things, all in accordance with applicable law,
as may be necessary or appropriate (a) more fully to assure that the applicable Parties own all of
the properties, rights, titles, interests, estates, remedies, powers and privileges granted by this
Agreement, or which are intended to be so granted (b) more fully and effectively to vest in the
applicable Parties and their respective successors and assigns beneficial and record title to the
interests contributed and assigned by this Agreement or intended so to be and to more fully and
effectively carry out the purposes and intent of this Agreement.

3.2 Other Assurances. From time to time after the date hereof, and without any further
consideration, each of the Parties shall execute, acknowledge and deliver all such additional
instruments, notices and other documents, and will do all such other acts and things, all in
accordance with applicable law, as may be necessary or appropriate to more fully and effectively
carry out the purposes and intent of this Agreement.

ARTICLE IV

MISCELLANEOUS

4.1 Headings; References; Interpretation. All Article and Section headings in this
Agreement are for convenience only and shall not be deemed to control or affect the meaning or
construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and
words of similar import, when used in this Agreement, shall refer to this Agreement as a whole,
including without limitation, all Schedules attached hereto, and not to any particular provision of
this Agreement. All references herein to Articles, Sections, and Schedules shall, unless the
context requires a different construction, be deemed to be references to the Articles, Sections and
Schedules of this Agreement, respectively, and all such Schedules attached hereto are hereby
incorporated herein and made a part hereof for all purposes. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall include all other
genders, and the singular shall include the plural and vice versa. The use herein of the word
“including” following any general statement, term or matter shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not non-limiting language (such as “without
limitation,” “but not limited to,” or words of similar import) is used with reference thereto, but

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rather shall be deemed to refer to all other items or matters that could reasonably fall
within the broadest possible scope of such general statement, term or matter.

4.2 Successors and Assigns. The Agreement shall be binding upon and inure to the
benefit of the parties signatory hereto and their respective successors and assigns.

4.3 No Third Party Rights. The provisions of this Agreement are intended to bind the
Parties signatory hereto as to each other and are not intended to and do not create rights in any
other person or confer upon any other person any benefits, rights or remedies and no person is or
is intended to be a third party beneficiary of any of the provisions of this Agreement.

4.4 Counterparts. This Agreement may be executed in any number of counterparts, all of
which together shall constitute one agreement binding on the Parties hereto.

4.5 Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Texas applicable to contracts made and to be performed wholly within
such state without giving effect to conflict of law principles thereof.

4.6 Severability. If any of the provisions of this Agreement are held by any court of
competent jurisdiction to contravene, or to be invalid under, the laws of any political body having
jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate
the entire Agreement. Instead, this Agreement shall be construed as if it did not contain the
particular provision or provisions held to be invalid, and an equitable adjustment shall be made
and necessary provision added so as to give effect to the intention of the Parties as expressed in
this Agreement at the time of execution of this Agreement.

4.7 Deed; Bill of Sale; Assignment. To the extent required and permitted by applicable
law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of the Member
Interest.

4.8 Amendment or Modification. This Agreement may be amended or modified from time to
time only by the written agreement of all the Parties hereto and affected thereby.

4.9 Integration. This Agreement and the instruments referenced herein supersede all
previous understandings or agreements among the Parties, whether oral or written, with respect to
its subject matter. This Agreement and such instruments contain the entire understanding of the
Parties with respect to the subject matter hereof and thereof. No understanding, representation,
promise or agreement, whether oral or written, is intended to be or shall be included in or form
part of this Agreement unless it is contained in a written amendment hereto executed by the
parties hereto after the date of this Agreement.

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     IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date
first written above.

	 	 	 	 	 
	 	DIAMOND SHAMROCK REFINING AND MARKETING COMPANY

 	 
	 	By:  	/s/
Jay D. Browning	 
	 	 	Name:  	Jay D. Browning	 
	 	 	Title:  	Senior Vice President and Corporate Secretary	 
	 
	 	VALERO GP HOLDINGS, LLC

 	 
	 	By:  	/s/
Curtis V. Anastasio	 
	 	 	Name:  	Curtis V. Anastasio	 
	 	 	Title:  	President and Chief Executive Officer	 
	 

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Exhibit 10.1

INDEPENDENT CONTRACTOR AGREEMENT

This Agreement is entered into as of the 26th day of June, 2006, between HEI, Inc. (“the
Company”) and Mark Thomas Enterprises LLC (“the Contractor”).

	1.	 	Independent Contractor. Subject to the terms and conditions of this Agreement, the
Company hereby engages the Contractor as an independent contractor to perform the services set
forth herein, and the Contractor hereby accepts such engagement. The Contractor has advised
the Company that its sole employee is Mark B. Thomas and Contractor agrees to assign Mark B.
Thomas to perform the Contractor’s duties and responsibilities in accordance with the terms of
this Agreement.
	 
	2.	 	Duties, Term, and Compensation. The Contractor’s duties, term of engagement,
compensation and provisions for payment thereof shall be as set forth in the attached Exhibit
A, which may be amended in writing from time to time, or supplemented with subsequent
estimates for services to be rendered by the Contractor and agreed to by the Company, and
which collectively are hereby incorporated by reference.
	 
	3.	 	Indemnification Agreement. The Company agrees to provide the Contractor with
Indemnification as set forth in Exhibit B.
	 
	4.	 	Expenses. During the term of this Agreement, the Contractor shall bill and the
Company shall reimburse Contractor for all reasonable out-of-pocket expenses which are
approved in advance in writing and which are incurred in connection with the performance of
the duties hereunder. Notwithstanding the foregoing, expenses for the time spent by
Consultant in traveling to and from Company facilities shall not be reimbursable.
	 
	5.	 	Written Reports. The Contractor shall provide such written reports as may be
reasonably requested. The Company may request that project plans, progress reports and a
final results report be provided by Consultant on a monthly basis.
	 
	6.	 	Inventions. Any and all inventions, discoveries, developments and innovations
conceived by the Contractor during this engagement relative to the duties under this Agreement
shall be the exclusive property of the Company; and the Contractor hereby assigns all right,
title, and interest in the same to the Company. Any and all inventions, discoveries,
developments and innovations conceived by the Contractor prior to the term of this Agreement
and utilized by him in rendering duties to the Company are hereby licensed to the Company for
use in its operations and for an infinite duration. This license is non-exclusive, and may be
assigned without the Contractor’s prior written approval by the Company to a wholly-owned
subsidiary of the Company.
	 
	7.	 	Confidentiality. The Contractor acknowledges that during the engagement he will have
access to and become acquainted with various trade secrets, inventions, innovations,
processes, information, records and specifications owned or licensed by the Company and/or
used by the Company in connection with the operation of its business including, without
limitation, the Company’s business and product processes, methods, customer lists, accounts
and procedures. The Contractor agrees that he will not disclose any of the aforesaid,
directly or indirectly, or use any of them in any manner, either during the term of this
Agreement or at any time thereafter, except as required in the course of this engagement with
the Company. All files, records, documents, blueprints, specifications, information, letters,
notes, media lists, original artwork/creative, notebooks, and similar items relating to the
business of the Company, whether prepared by the Contractor or otherwise coming into

 

 

	 	 	his possession, shall remain the exclusive property of the Company. The Contractor shall not
retain any copies of the foregoing without the Company’s prior written permission. Upon the
expiration or earlier termination of this Agreement, or whenever requested by the Company, the
Contractor shall immediately deliver to the Company all such files, records, documents,
specifications, information, and other items in his possession or under his control. The
Contractor further agrees that he will not disclose his retention as an independent contractor
or the terms of this Agreement to any person without the prior written consent of the Company
and shall at all times preserve the confidential nature of his relationship to the Company and
of the services hereunder.

	8.	 	Conflicts of Interest; Non-hire Provision. The Contractor represents that he is free
to enter into this Agreement and that this engagement does not violate the terms of any
agreement between the Contractor and any third party. Further, the Contractor, in rendering
his duties shall not utilize any invention, discovery, development, improvement, innovation,
or trade secret in which he does not have a proprietary interest. During the term of this
Agreement, the Contractor shall devote as much of his productive time, energy and abilities to
the performance of his duties hereunder as is necessary to perform the required duties in a
timely and productive manner. The Contractor is expressly free to perform services for other
parties while performing services for the Company. For a period of six months following any
termination, the Contractor shall not, directly or indirectly hire, solicit, or encourage to
leave the Company’s employment, any employee, consultant, or contractor of the Company or hire
any such employee, consultant, or contractor who has left the Company’s employment or
contractual engagement within one year of such employment or engagement without the written
consent of the Company.
	 
	9.	 	Merger. This Agreement shall not be terminated by the merger or consolidation of the
Company into or with any other entity.
	 
	10.	 	Termination. The Company may terminate this Agreement at any time by 10 working
days’ written notice to the Contractor. In addition, if the Contractor is convicted of any
crime or offense, fails or refuses to comply with the written policies or reasonable directive
of the Company, is guilty of serious misconduct in connection with performance hereunder, or
materially breaches provisions of this Agreement, the Company at any time may terminate the
engagement of the Contractor immediately and without prior written notice to the Contractor.
	 
	11.	 	Independent Contractor. This Agreement shall not render the Contractor an employee,
partner, agent of, or joint venturer with the Company for any purpose. The Contractor is and
will remain an independent contractor in its relationship to the Company. The Company shall
not be responsible for withholding taxes with respect to the Contractor’s compensation
hereunder. The Contractor shall have no claim against the Company hereunder or otherwise for
vacation pay, sick leave, retirement benefits, social security, worker’s compensation, health
or disability benefits, unemployment insurance benefits, or employee benefits of any kind.
	 
	12.	 	Successors and Assigns. All of the provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs, if any,
successors, and assigns.
	 
	13.	 	Choice of Law. The laws of the state of Minnesota shall govern the validity of this
Agreement, the construction of its terms and the interpretation of the rights and duties of
the parties hereto.
	 
	14.	 	Arbitration. Any controversies arising out of the terms of this Agreement or its
interpretation shall be settled in Minnesota in accordance with the rules of the American
Arbitration

 

 

	 	 	Association, and the judgment upon award may be entered in any court having jurisdiction
thereof.
	 
	15.	 	Headings.  Section headings are not to be considered a part of this Agreement and are
not intended to be a full and accurate description of the contents hereof.
	 
	16.	 	Waiver. Waiver by one party hereto of breach of any provision of this Agreement by
the other shall not operate or be construed as a continuing waiver.
	 
	17.	 	Assignment. The Contractor shall not assign any of his rights under this Agreement,
or delegate the performance of any of his duties hereunder, without the prior written consent
of the Company.
	 
	18.	 	Notices. Any and all notices, demands, or other communications required or desired
to be given hereunder by any party shall be in writing and shall be validly given or made to
another party if personally served, or if deposited in the United States mail, certified or
registered, postage prepaid, return receipt requested. If such notice or demand is served
personally, notice shall be deemed constructively made at the time of such personal service.
If such notice, demand or other communication is given by mail, such notice shall be
conclusively deemed given five days after deposit thereof in the United States mail addressed
to the party to whom such notice, demand or other communication is to be given as follows:

	 	 	 	 	 
	 

	 	If to the Contractor:
	 	Mark B. Thomas

Mark Thomas Enterprises, LLC

199 139th Avenue NW

Andover, MN 55304
	 
	 	 	 	 
	 

	 	If to the Company:
	 	HEI, Inc.

1495 Steiger Lake Lane

Victoria, MN 55386

	 	 	Any party hereto may change its address for purposes of this paragraph by written notice given
in the manner provided above.
	 
	19.	 	Modification or Amendment. No amendment, change or modification of this Agreement
shall be valid unless in writing signed by the parties hereto.
	 
	20.	 	Entire Understanding. This document and any exhibit attached constitute the entire
understanding and agreement of the parties, and any and all prior agreements, understandings,
and representations are hereby terminated and canceled in their entirety and are of no further
force and effect.
	 
	21.	 	Unenforceability of Provisions. If any provision of this Agreement, or any portion
thereof, is held to be invalid and unenforceable, then the remainder of this Agreement shall
nevertheless remain in full force and effect.

IN WITNESS WHEREOF the undersigned have executed this Agreement as of the day and year first
written above. The parties hereto agree that facsimile signatures shall be as effective as if
originals.

	 	 	 	 	 	 	 	 	 	 	 
	HEI, Inc.	 	Mark Thomas Enterprises LLC
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Mack V. Traynor, III
	 	By:
	 	/s/ Mark B. Thomas	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Its:

	 	Chief Executive Officer
	 	Its:
	 	President	 	 	 	 

 

 

EXHIBIT A

DUTIES, TERM, AND COMPENSATION

			
	DUTIES:	 	The Contractor’s employee, Mark B. Thomas, will perform as a
consultant and as the Chief Financial Officer and Principal
Accounting Officer of the Company during the time periods as
described in the Term section of this Exhibit A, with such duties
and responsibilities of the consultant, Chief Financial Officer
and Principal Accounting Officer as shall be mutually agreed upon
by the Company and the Contractor; provided, however, that it is
acknowledged and agreed that Mr. Thomas, in his capacity as Chief
Financial Officer, shall certify the Company’s financial
statements as required by applicable law and regulations. Mr.
Thomas will report directly to the Chief Executive Officer (CEO)
and to any other party designated by the CEO in connection with
the performance of the duties under this Agreement.

			
	TERM:	 	This engagement shall commence upon execution of this Agreement
and shall continue in full force and effect until December 31,
2006. The Contractor will perform the duties of a consultant
until July 11, 2006, and shall assume the duties of Chief
Financial Officer and Principal Accounting Officer on July 12,
2006. The Agreement may only be extended thereafter by mutual
agreement, unless terminated earlier by operation of and in
accordance with this Agreement.

COMPENSATION:

			
	 	 	The Company shall pay Contractor $15,000 per month during the term of this
Agreement provided that Mr. Thomas spends 60% to 80% of his time performing the
Contractor’s obligations pursuant to the terms of this Agreement. In the event Mr.
Thomas spends less than 60% of his time performing the Contractor’s obligations,
the Contractor’s compensation shall be reduced on a pro rata basis. Such
compensation shall be payable within 15 days of the end of each calendar month
during the term of this Agreement.

 

 

EXHIBIT B

INDEMNIFICATION AGREEMENT

The Company hereby agrees to indemnify and hold harmless the Contractor, its officers,
directors, shareholders and employees for any claim, cross-claim, third-party claim,
counterclaim for contribution, assertion of claim, loss, cost, fees (including attorney’s
fees), expenses or other damages arising out of or resulting from:

	 	a.	 	Contractor’s performance of its duties under the Agreement;
	 
	 	b.	 	any claims of any nature whatsoever by third parties relating to
actions or inactions of Company or Contractor in performance of its duties
hereunder; or actions of Company’s employees or personnel; past employees or
personnel; or past, present or future prospective employees or personnel; or of
any past, present, or future employees or prospective employees of any entity for
which the Company undertakes or is alleged to have had a duty to undertake to
perform services such as are contemplated hereunder, it being the intent herein
that all risk of claims by third parties be assumed by the Company, except as
provided in paragraph (d) below.

Upon receipt by the Contractor or notice to the Contractor of any claim or demand for payment
and/or reimbursement of any amount claimed by any third party relating to any of the types of
claims set forth at Paragraphs a. or b. above, the Contractor shall promptly give the Company
written notice of such claim or demand.

The Company shall, upon receipt of such notice from the Contractor either pay such claim or
demand or undertake to defend against the claim or demand on the Contractor’s behalf.

Notwithstanding the foregoing, the Company shall not indemnify the Contractor for any claims
arising from the Contractor’s own negligence in performance of its duties, and by this
indemnification agreement waives none of its rights to either enforce this Agreement against
Contractor or make a claim against the Contractor for damages resulting from Contractor’s
breach or negligence in performance of its duties hereunder.

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