Document:

HFC Ex 10.4 9-30-2013 10Q3

Execution Version

Exhibit 10.4
SECOND AMENDED AND RESTATED 
THROUGHPUT AGREEMENT
(TUCSON TERMINAL)

This Second Amended and Restated Throughput Agreement (the “Agreement”) is made and entered into as of September 19, 2013 to be effective as of June 1, 2013 (the “Effective Date”), by and among HollyFrontier Refining & Marketing LLC, a Delaware limited liability company (formerly Holly Refining and Marketing LLC) (“HFRM”), HEP Refining, L.L.C., a Delaware limited liability Company (“HEP Refining”), and Holly Energy Partners - Operating, L.P., a Delaware limited partnership (the “Operating Partnership”), and amends and restates in its entirety the First Amended and Restated Throughput Agreement entered into as of April 1, 2008 (as amended, the “First Amended and Restated Throughput Agreement”), by and among HFRM, the Operating Partnership, Holly Energy Partners, L.P., a Delaware limited partnership,  HEP Logistics  Holdings, L.P., a Delaware limited partnership, Holly Logistic Services, L.L.C., a Delaware limited liability company, HEP Logistics GP, L.L.C., a Delaware limited liability company, Navajo Refining Company, L.L.C., a Delaware limited liability company (successor to Navajo Refining Company, L.P.), and HollyFrontier Corporation (formerly known as Holly Corporation), a Delaware corporation.  HFRM, HEP Refining and the Operating Partnership are referred to herein each individually as a “Party,” and together as the “Parties.” 
WITNESSETH:
WHEREAS, the Operating Partnership and HEP Refining currently provide HFRM certain terminalling services (the “Services”) at HEP Refining’s Tucson, Arizona, facility (the “Tucson Terminal”) in connection with the receipt, storage and measurement of Refined Products, which Services are governed by the Refined Products Pipelines and Terminals Agreement; and
WHEREAS, the Parties desire to enter this Second Amended and Restated Throughput Agreement to provide for a minimum throughput commitment by HFRM at the Tucson Terminal and a guaranteed capacity commitment by the Operating Partnership and HEP Refining at the Tucson Terminal;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the Parties hereby agree:
1.Definitions.  Capitalized terms not otherwise defined herein shall have the meanings set forth in that certain Amended and Restated Refined Products Pipelines and Terminal Agreement dated as of December 1, 2009, to be effective as of February 1, 2009 (as may be amended, modified or supplemented from time to time, the “Refined Products Pipelines and Terminals Agreement”).
2.Effect on Refined Products Pipelines and Terminals Agreement.  The Refined Products Pipelines and Terminals Agreement shall remain in full force and effect, and as of the date first written above, as supplemented and amended by the terms of this Agreement.
3.Guaranteed Throughput. 
(a)During the Term of this Agreement (as such term is defined herein), HFRM shall pay the terminal service fee rate for truck rack deliveries of $0.3827 for each barrel (the “Terminal Service Fee”) for which Services are provided at the Tucson Terminal.  In addition, HFRM agrees to throughput or cause to be throughput to the Tucson Terminal an average of eight thousand (8,000) bpd of Refined Products multiplied by the number of days in a quarter (the “Guaranteed Throughput”).  For the avoidance of doubt, the per barrel fees paid by HFRM with respect to the barrels throughput to the Tucson Terminal and the 

Annual Tucson Fee (defined below) shall apply towards the Minimum Revenue Commitment set forth in Section 2(a)(i) of the Refined Products Pipelines and Terminals Agreement, and as adjusted pursuant to Section (2)(a)(ii) of the Refined Products Pipelines and Terminals Agreement.
(b)In the event HFRM fails to provide or cause to be provided the Guaranteed Throughput in any calendar quarter, HFRM shall be billed for and pay for any difference between the number of barrels actually delivered and the Guaranteed Throughput at the Terminal Service Fee (the “Deficiency”).  HFRM shall pay the Deficiency to the Operating Partnership within ten (10) days after its receipt of the bill for the Deficiency.
(c)If HFRM is unable for any quarter to throughput the volumes required to meet the Guaranteed Throughput as a result of the Operating Partnership’s operational difficulties, then upon written notice by HFRM to the Operating Partnership, the Guaranteed Throughput will be reduced for such quarter by an amount equal to the volume of Refined Products that HFRM is unable to terminal as a result of the Operating Partnership’s operational difficulties.
4.Guaranteed Capacity.  During the Term and subject to the terms and conditions of this Agreement and the Refined Products Pipelines and Terminals Agreement, and subject to HFRM’s satisfaction of its obligations hereunder, the Operating Partnership and HEP Refining, as applicable, shall operate and maintain, or cause to be operated and maintained, the Tucson Terminal so that at all times the Tucson Terminal has an available capacity to handle and store at least the Guaranteed Throughput for the exclusive use by HFRM for itself and for other shippers with whom HFRM contracts (the “Guaranteed Capacity”).  Any such contracts between any of HFRM and any third party shall be subject to all relevant terms and conditions that apply to the use of the Tucson Terminal by HFRM.
5.Continued Terminal Access.  During the Term, HEP Refining shall (a) continue, or cause to be continued, the term (including all available extensions) of the June 1, 1977 Lease Agreement, November 15, 1977 Supplemental Lease, October 1, 1984 Second Supplemental Lease Agreement, April 1, 1988 Third Supplemental Lease Agreement, April 1, 1992 Fourth Supplemental Lease Agreement and June 1, 2002 Fifth Supplemental Lease Agreement in effect with SFPP, L.P. and Support Terminals Operating Partnerships, L.P. (including any successors in interest thereto) for the property associated with the Tucson Terminal and (b) take any and all other commercially reasonable actions necessary to maintain, at a minimum, HEP Refining’s current rights, access and opportunities associated with the Tucson Terminal.
6.Non-Exclusive Use; Tucson Facility Fee.  The Parties agree that (a) HFRM shall not have the right to the exclusive use of the entire Tucson Terminal but rather only the right to the exclusive use of the Guaranteed Capacity at the Tucson Terminal, and (b) from and after the Effective Date of this Agreement, the annual fee payable for the Guaranteed Capacity shall be $36,000 (the “Annual Tucson Fee”), subject to annual adjustment on the first day of each Contract Year commencing July 1, 2014 for changes in the PPI occurring after the Effective Date of this Agreement, as provided in Exhibit C of the Refined Products Pipelines and Terminals Agreement.  
7.Term of the Agreement.  The term of this Agreement shall commence as of the Effective Date set forth above and terminate at 12:01 a.m. Dallas, Texas time on the date the Refined Products Pipelines and Terminals Agreement terminates (the “Term”), it being expressly intended that the term of this Agreement and the term of the Refined Products Pipelines and Terminals Agreement shall be coterminous; provided that HFRM shall have the right to extend the Term for ten (10) years by providing written notice to the Operating Partnership and HEP Refining of its intent to renew by no later than September 30, 2017, and the rates for the extended term shall be similarly increased on the first day of each Contract Year as specified in Section 6 above.

 
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8.Conforming Amendments to the Refined Products Pipelines and Terminals Agreement.  
(a)Section 2(d) (Facility Expansions and Modifications) of the Refined Products Pipelines and Terminals Agreement is hereby amended by adding the following language at the end of the section:
“Notwithstanding the foregoing, with respect to any facility expansions or modifications to the Refined Product Terminal located in Tucson, Arizona, the Partnership Entities shall consult with the Holly Entities but the Holly Entities shall not have consent or approval rights related to any facility expansions or modifications to the Refined Product Terminal located in Tucson, Arizona.”
(b)Exhibit C (Fee Schedule) of the Refined Products Pipelines and Terminals Agreement is hereby amended by deleting Section 8 of Exhibit C in its entirety and inserting in lieu thereof the following language: 
“For the Tucson terminal, effective as of June 1, 2013, the Holly Entities shall pay an annual fee of $36,000 for the non-exclusive use of the Tucson terminal facility and a $0.3827 per barrel terminal service fee.  The per barrel terminal service fee shall be adjusted on the first day of each Contract Year commencing July 1, 2013, and the annual fee shall be adjusted on the first day of each Contract Year commencing July 1, 2014, in each case by the PPI.”
9.Choice of Law.  This Agreement shall be subject to and governed by the laws of the State of Delaware, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.

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

 
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IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of the Effective Date set forth above.
    
HOLLY ENERGY PARTNERS - OPERATING, L.P.
HEP REFINING, L.L.C.

            
By: /s/ Bruce R. Shaw    
Bruce R. Shaw
President

 

HOLLYFRONTIER REFINING & MARKETING LLC
        
    
By: /s/ Michael C. Jennings    
Michael C. Jennings
Chief Executive Officer and President

ACKNOWLEDGED AND AGREED 
FOR PURPOSES OF ACKNOWLEDGING
THE AMENDMENT AND RESTATEMENT OF 
THE FIRST AMENDED AND RESTATED 
THROUGHPUT AGREEMENT:

HOLLYFRONTIER CORPORATION

By: /s/ Michael C. Jennings    
Michael C. Jennings
Chief Executive Officer and President

HOLLY ENERGY PARTNERS, LP.
By:  HEP Logistics Holdings, L.P., its general partner
By:  Holly Logistic Services, L.L.C., its general partner
    

By: /s/ Bruce R. Shaw            
Bruce R. Shaw 
    President

[Signature page to the Second Amended and Restated Throughput Agreement (Tucson)]

ACKNOWLEDGED AND AGREED
FOR PURPOSES OF ACKNOWLEDGING
THE AMENDMENT AND RESTATEMENT OF 
THE FIRST AMENDED AND RESTATED 
THROUGHPUT AGREEMENT AND WITHDRAWAL
OF THE UNDERSIGNED AS PARTIES THERETO:

NAVAJO REFINING COMPANY, L.L.C.

By: /s/ Michael C. Jennings    
Michael C. Jennings
Chief Executive Officer and President

HOLLY LOGISTIC SERVICES, L.L.C.
HEP LOGISTICS GP, L.L.C.

    
By: /s/ Bruce R. Shaw                
Bruce R. Shaw
President

HEP LOGISTICS HOLDINGS, L.P.

By:  Holly Logistic Services, L.L.C., its general partner

    
By: /s/ Bruce R. Shaw            
Bruce R. Shaw 
    President

[Signature page to the Second Amended and Restated Throughput Agreement (Tucson)]

ACKNOWLEDGED AND AGREED
FOR PURPOSES OF ACKNOWLEDGING
THE FOREGOING AMENDMENT OF THE 
AMENDED AND RESTATED REFINED PRODUCT 
PIPELINES AND TERMINALS AGREEMENT:

HEP PIPELINE ASSETS, LIMITED PARTNERSHIP    
By:    HEP Pipeline GP, L.L.C., its general partner
By:    Holly Energy Partners – Operating, L.P.,                                 its sole member    

By:  /s/ Bruce R. Shaw             
    Bruce R. Shaw
President

HEP PIPELINE, L.L.C. 
HEP MOUNTAIN HOME, L.L.C. 
HEP WOODS CROSS, L.L.C.
By:    Holly Energy Partners – Operating, L.P., 
its sole member    

By:  /s/ Bruce R. Shaw             
    Bruce R. Shaw
President

HEP REFINING ASSETS, L.P.
By:  HEP Refining GP, L.L.C., its general partner
By:    Holly Energy Partners—Operating, L.P., 
its sole member

By:  /s/ Bruce R. Shaw             
    Bruce R. Shaw
President

[Signature page to the Second Amended and Restated Throughput Agreement (Tucson)]HFC Ex 10.5 9-30-2013 10Q3

Exhibit 10.5

SEVENTEENTH AMENDMENT
FRONTIER PRODUCTS OFFTAKE AGREEMENT
EL DORADO REFINERY

This Seventeenth Amendment to the Frontier Products Offtake Agreement, El Dorado Refinery (“Seventeenth Amendment”) by and between HollyFrontier Refining & Marketing LLC (“HFR”) and Shell Oil Products US (SOPUS), assignee of Equiva Trading Company (“ETCo”) is made and entered into this 27th day of August 2013, to be effective as of the effective date set forth below.  HFR and SOPUS are sometimes referred to herein individually as a Party and collectively as the Parties.

WITNESSETH:

WHEREAS, the Parties entered into the Frontier Products Offtake Agreement, El Dorado Refinery dated October 19, 1999 (hereinafter referred to as (“the Agreement”) and desire to amend certain provisions of the Agreement; and
    
WHEREAS, the Parties entered into the First Amendment, Products Offtake Agreement, El Dorado Refinery dated the 18th day of September, 2000 (hereinafter referred to as the “First Amendment”); and 

WHEREAS, the Parties entered into the Second Amendment, Products Offtake Agreement, El Dorado Refinery dated the 21st day of September, 2000 (hereinafter referred to as the “Second Amendment”); and

WHEREAS, the Parties entered into the Third Amendment, Products Offtake Agreement, El Dorado Refinery dated the 19th day of December, 2000 (hereinafter referred to as the “Third Amendment”); and

WHEREAS, the Parties entered into the Fourth Amendment, Products Offtake Agreement, El Dorado Refinery dated the 22nd day of February, 2001 (hereinafter referred to as the “Fourth Amendment”); and 

WHEREAS, the Parties entered into the Fifth Amendment, Products Offtake Agreement, El Dorado Refinery dated the 14th day of August, 2001 (hereinafter referred to as the “Fifth Amendment”); and

WHEREAS, the Parties entered into the Sixth Amendment, Products Offtake Agreement, El Dorado Refinery dated the 5th day of November, 2001 (hereinafter referred to as the “Sixth Amendment”); and

WHEREAS, the Parties entered into the Seventh Amendment, Products Offtake Agreement, El Dorado Refinery dated the 22nd day of April 2002 (hereinafter referred to as the “Seventh Amendment”); and 

WHEREAS, the Parties entered into the Eight Amendment, Products Offtake Agreement, El Dorado Refinery dated the 30th day of May 2003 (hereinafter referred to as the “Eight Amendment”); 

WHEREAS, the Parties entered into the Ninth Amendment, Products Offtake Agreement, El Dorado Refinery dated the 25th day of May 2004 (hereinafter referred to as the “Ninth Amendment”); and

WHEREAS, the Parties entered into the Tenth Amendment, Products Offtake Agreement, El Dorado Refinery dated the 3rd  day of May 2005 (hereinafter referred to as the “Tenth Amendment”); and

WHEREAS, the Parties entered into the Eleventh Amendment, Products Offtake Agreement, El Dorado Refinery dated the 31st  day of March 2006 (hereinafter referred to as the “Eleventh Amendment”); and

WHEREAS, the Parties entered into the Twelfth Amendment, Products Offtake Agreement, El Dorado Refinery dated the 11th  day of May 2006 (hereinafter referred to as the “Twelfth Amendment”); and

WHEREAS, the Parties entered into the Thirteenth Amendment, Products Offtake Agreement, El Dorado Refinery dated the 30th  day of September 2007 (hereinafter referred to as the “Thirteenth  Amendment”); and

WHEREAS, the Parties entered into the Fourteenth Amendment, Products Offtake Agreement, El Dorado Refinery dated the 7th day of April 2008 (hereinafter referred to as the “Fourteenth  Amendment”); and

WHEREAS, the Parties entered into the Fifteenth Amendment, Products Offtake Agreement, El Dorado Refinery dated the 28th day of May 2008 (hereinafter referred to as the “Fifteenth Amendment”);

WHEREAS, the Parties entered into the Sixteenth Amendment, Products Offtake Agreement, El Dorado Refinery dated the 1st day of December 2009 (hereinafter referred to as the “Sixteenth Amendment”);

WHEREAS Platt’s Oil Service intends to discontinue posting a quote for Group3 Regular Mogas with effect from September 13th 2013;

WHEREAS Platt’s Oil Service intends to start posting a quote for 84 Octane CBOB for Group3 (“CBOB”) with effect from September 16th 2013;
    
WHEREAS, the Parties desire to modify the pricing for Mogas based on the new CBOB quotation;

WHEREAS, the Parties recognize that to modify the specification of Mogas, requires an amendment to the Product Quality paragraph for  Schedule B – Mogas as previously amended by the Seventh, Ninth, Tenth, Eleventh, and Fifteenth Amendments; and 

WHEREAS, the Parties recognize that to modify the pricing of Mogas, requires an amendment to the Product Pricing paragraph for  Schedule B – Mogas as previously amended by the First, Fifth, Sixth, Seventh, Ninth, Tenth, Eleventh, and Fifteenth Amendments; and

WHEREAS, the Parties desire to make this Seventeenth Amendment effective beginning with product delivered September 16th, 2013; and 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth below the Parties agree to amend and restate portions of Schedule B – Mogas, and covenant as follows:

1.The Product Quality section of Schedule B is hereby amended and restated in its entirety as follows:
Product Quality - Mogas must meet the specifications as listed below, as appropriate:
- Published Magellan Pipeline Specifications for Magellan Central and Magellan Mountain Systems; 
- and Published Nustar Energy Specifications for Nustar East Refined Products Pipeline System .

		
	2.
	The Provisional Product Pricing section of Schedule B is hereby amended and restated in its entirety as follows:

Provisional Product Pricing – SOPUS will pay HFR  the mean of the monthly low and high price for Magellan V Grade (CBOB), which is quoted by Platt’s Oil Service as  84 Octane CBOB in the Group 3 market in cents per gallon FOB custody transfer point plus 0.32 cents per gallon.  The formula of Platt’s Midwest/Group 3 mean of monthly low and high price shall be defined as Gasoline Base Price.
Suboctane 82.5 (V1) Grade, high RVP: Gasoline Base Price – 1.5 cpg + 0.32 cpg
82.5 (V1) Grade, 7.8 psi RVP: Gasoline Base Price – 1.5 cpg + 0.32 cpg + 6.0 cpg
Suboctane (V78) Grade, 7.8 psi RVP: Gasoline Base Price + 0.32 cpg + 6.0 cpg
91 Premium (A0 or A1) Grade, 7.8 psi RVP: Platt’s Group 3 Premium Price + 0.32 cpg + 8.5 cpg

Suboctane (V68) Grade, 6.8 psi RVP: Gasoline Base Price + 0.32 cpg + 11.0 cpg
91 Premium (A1) Grade , 6.8 psi RVP: Platt’s Group 3 Premium Price + 0.32 cpg + 15.0 cpg
    

 

EFFECTIVE DATE

This Seventeenth Amendment will be effective beginning with product delivered September 16, 2013.

		
	3.
	This Seventeenth Amendment is hereby incorporated into the Agreement for all intents and purposes and all terms, provisions and definitions in the Agreement shall apply hereto.  The Agreement and this Seventeenth Amendment set forth in its entirety the agreement of HFR and SOPUS with respect to the subject matter hereof.  Except as explicitly stated herein, no other provisions of the Agreement, or any prior Amendments are affected by this Seventeenth Amendment and they remain in full force and effect.

In witness whereof, the Parties have below affixed the signature of their authorized representatives, who warrant that they are legally empowered to bind the Party on whose behalf they have signed.

HollyFrontier Refining & Marketing LLC        Shell Oil Products US

By      /s/ George Damiris                By      /s/ Thomas Melodick    
Name George Damiris                Name  Thomas E. Melodick    
Title  SVP, Supply & Mktg                Title    Supply Contracts and Negotiations Manager
Date  29 AUG 13                    Date    August 27, 2013

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