Document:

exv10w4

Exhibit 10.4

Execution Version

SERVICES AGREEMENT

     This SERVICES AGREEMENT is entered into as of the 19th day of July, 2011 (the “Effective
Date”), by and between OILTANKING PARTNERS, L.P., a Delaware limited partnership (the
“Partnership”), OTLP GP, LLC, a Delaware limited liability company and the general partner of the
Partnership (the “General Partner”), OILTANKING BEAUMONT SPECIALTY PRODUCTS, LLC, a Texas limited
liability company (“Specialty Products”), and OILTANKING NORTH AMERICA, LLC, a Delaware limited
liability company (“OTNA”). The above-named entities are sometimes referred to in this Agreement
each as a “Party” and collectively as the “Parties.”

     WHEREAS, the Partnership Group (as hereinafter defined) desires to obtain certain services
from OTNA and OTNA desires to provide certain services to the Partnership Group;

     NOW, THEREFORE, in consideration of the premises and covenants, conditions and agreements
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

     For purposes of this Agreement, the following terms shall have the following meanings:

     “Administrative Representative(s)” has the meaning given such term in Section 6.15(a).

     “Affiliate” means, with respect to any Person, any other Person who directly or indirectly
controls, is controlled by, or is under direct or indirect common control with, such Person, and
includes any Person in like relation to an Affiliate. A Person shall be deemed to “control”
another Person if such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise; and the term “controlled” shall have a similar
meaning. Without limiting the generality of the foregoing, it is agreed that any Person that owns
or controls, directly or indirectly, 50% or more of the voting securities of another Person shall
be deemed for purposes of this Agreement to control such other Person.

     “Arbitration Award” has the meaning given such term in Section 6.12.

     “Base CPI” has the meaning given such term in Section 2.1(d)(i).

     “Business” has the meaning given such term in Section 2.1(a).

     “Cause” has the meaning given such term in the Partnership Agreement.

 

 

     “Change of Control” means, with respect to any Person (the “Applicable Person”), any of the
following events:

     (a) any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the Applicable Person’s assets to any
other Person, unless immediately following such sale, lease, exchange or other transfer
such assets are owned, directly or indirectly, by the Applicable Person;

     (b) the dissolution or liquidation of the Applicable Person;

     (c) the consolidation or merger of the Applicable Person with or into another Person,
other than any such transaction where:

          (i) the outstanding Voting Securities of the Applicable Person are changed
into or exchanged for Voting Securities of the surviving Person or its parent; and

          (ii) the holders of the Voting Securities of the Applicable Person immediately
prior to such transaction own, directly or indirectly, not less than a majority of
the outstanding Voting Securities of the surviving Person or its parent immediately
after such transaction; and

     (d) a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the
Exchange Act) being or becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Exchange Act) of more than 50% of all of the then outstanding Voting Securities
of the Applicable Person, except in a merger or consolidation that would not constitute a
Change of Control under clause (c) above.

     “Closing Date” means the date of the closing of the initial public offering of common units of
the Partnership.

     “Conflicts Committee” has the meaning given such term in the Partnership Agreement.

     “CPI” has the meaning given such term in Section 2.1(d)(i).

     “Damages” has the meaning given such term in Section 5.1.

     “Discussion Date” has the meaning given such term in Section 6.16.

     “Effective Date” has the meaning given such term in the preamble to this Agreement.

     “Estimate Invoice” has the meaning given to such term in Section 2.6.

 

 

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Expiration Date” has the meaning given such term in Section 3.1

     “Extension Periods” has the meaning given such term in Section 3.1.

     “Final CPI” has the meaning given such term in Section 2.1(d)(i).

     “General Partner” has the meaning given such term in the preamble to this Agreement.

     “Governmental Authority” means:

     (a) any domestic or foreign government, whether national, federal, state provincial,
territorial, municipal or local (whether administrative, legislative, executive or
otherwise);

     (b) any agency, authority, ministry, department, regulatory body, court, central bank,
bureau, board or other instrumentality having legislative, judicial, taxing, regulatory,
prosecutorial or administrative powers or functions of, or pertaining to, government;

     (c) any court, tribunal, commission, individual, arbitrator, arbitration panel or
other body having adjudicative, regulatory, judicial, quasi-judicial, administrative or
similar functions; and

     (d) any other body or entity created under the authority of or otherwise subject to
the jurisdiction of any of the foregoing, including any stock or other securities exchange
or professional association.

	 	 	“Indemnified Party” has the meaning given such term in Section 5.2(b).

	 	 	“Indemnifying Party” has the meaning given such term in Section 5.2(b).

     “OTA” has the meaning given such term in Section 2.1(a).

     “OTNA” has the meaning given such term in the preamble to this Agreement.

     “OTNA Indemnitees” has the meaning given such term in Section 5.1.

     “Partnership” has the meaning given such term in the preamble to this Agreement.

     “Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership
of the Partnership, as it may be amended from time to time.

     “Partnership Entities” means the Partnership and each other member of the Partnership Group;
and “Partnership Entity” means any of the Partnership Entities.

 

 

     “Partnership Group” means the Partnership and its Subsidiaries other than Specialty Products.

     “Party” or “Parties” has the meaning given such term in the preamble to this Agreement.

     “Person” is to be construed broadly and includes an individual, partnership, corporation,
business trust, limited liability company, limited liability partnership, joint stock company,
trust, unincorporated association, joint venture or other entity or a Governmental Authority.

     “Representatives” has the meaning given such term in Section 5.1.

     “Sales Taxes” has the meaning given such term in Section 6.1(b).

     “Services” has the meaning given such term in Section 2.1(a).

     “SG&A Expenses Limit” has the meaning given such term in Section 2.1(d).

     “Shortfall Amount” has the meaning given such term in Section 2.6.

     “SP Operator Expenses” has the meaning given such term in Section 2.1(d).

     “SP SG&A Expenses Limit” has the meaning given such term in Section 2.1(d).

     “Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of
the voting power of shares entitled (without regard to the occurrence of any contingency) to vote
in the election of directors or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such
Person or a combination thereof, (b) a partnership (whether general or limited) in which such
Person or a Subsidiary of such Person is, at the date of determination, a general or limited
partner of such partnership, but only if more than 50% of the partnership interests of such
partnership (considering all of the partnership interests of the partnership as a single class) is
owned, directly or indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a
corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a
combination thereof, directly or indirectly, at the date of determination, has (i) at least a
majority ownership interest or (ii) the power to elect or direct the election of a majority of the
directors or other governing body of such Person.

     “Terminated Service” has the meaning given such term in Section 3.2.

     “Third-Party Claim” has the meaning given such term in Section 5.2(a).

     “True Up Invoice” has the meaning given to such term in Section 2.6.

 

 

     “Voting Securities” of a Person means securities of any class of such Person entitling the
holders thereof to vote in the election of, or to appoint, members of the board of directors or
other similar governing body of the Person; provided, that if such Person is a limited partnership,
Voting Securities of such Person shall be the general partner interest in such Person.

ARTICLE 2

SERVICES

     2.1 Provision, Allocation and Reimbursement for Services.

     (a) OTNA agrees to provide the Partnership Entities and Specialty Products with
certain selling, general, administrative and operating services necessary to run the
business of the Partnership Group (the “Business”) and the business of Specialty Products
(the “SP Business”), which services may include, without limitation, those services set
forth in Schedule A and Schedule B (collectively, the “Services”). The Services shall be
substantially similar in nature and quality to the services of each such type previously
provided by Oiltanking Holding Americas, Inc., a Delaware corporation (“OTA”), in
connection with its management and operation of the Business and the SP Business prior to
OTA’s acquisition by the Partnership.

     (b) OTNA shall provide the Services to the Partnership Entities and Specialty Products
in a manner that is in the good faith judgment of OTNA commercially reasonable; provided,
that for so long as OTNA exercises at least the same degree of care, skill and prudence in
providing the Services as customarily exercised by it in providing Services to OTA and its
Affiliates (other than the Partnership Group and Specialty Products), then OTNA will be
deemed to have provided such Services in a commercially reasonable manner. EXCEPT AS SET
FORTH IN THE PRECEDING SENTENCE, OTNA MAKES NO (AND HEREBY DISCLAIMS AND NEGATES ANY AND
ALL) WARRANTIES OR REPRESENTATIONS WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
SERVICES. IN NO EVENT SHALL OTNA OR ANY OF ITS AFFILIATES BE LIABLE TO ANY MEMBER OF THE
PARTNERSHIP GROUP OR TO SPECIALTY PRODUCTS OR TO ANY OTHER PERSON FOR ANY EXEMPLARY,
PUNITIVE, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES RESULTING FROM ANY ERROR
IN THE PERFORMANCE OF THE SERVICES, REGARDLESS OF WHETHER THE PERSON PROVIDING SUCH
SERVICES, ITS AFFILIATES, OR OTHERS MAY BE WHOLLY, CONCURRENTLY, PARTIALLY, OR SOLELY
NEGLIGENT OR OTHERWISE AT FAULT.

     (c) Subject to the provisions of Section 2.1(d) below, the Partnership Entities and
Specialty Products hereby agree to reimburse OTNA for all cash

expenses and expenditures that OTNA incurs or payments OTNA makes on behalf of the
Partnership Entities and Specialty Products for the Services;

 

 

provided that the Partnership
Entities and Specialty Products shall reimburse OTNA for any direct costs actually incurred
by OTNA in providing the Services and further provided that the Partnership Entities and
Specialty Products shall not be required to pay or reimburse OTNA for any services that
OTNA otherwise provides to support its own assets or the assets of Affiliates other than
the Partnership Group or Specialty Products.

     (d) Subject to the provisions of this Section 2.1(d), the amount for which OTNA shall
be entitled to reimbursement from the Partnership Group and from Specialty Products
pursuant to Section 2.1(c) for the Services listed in Schedule A (except as set
specifically set forth in Schedule A) shall not exceed $17 million per year (the “SG&A
Expenses Limit”), of which Specialty Products shall not be liable for more than $365,000
per year (the “SP SG&A Expenses Limit”). Also subject to the provisions of this Section
2.1(d), the amount for which OTNA shall be entitled to reimbursement from Specialty
Products pursuant to Section 2.1(c) for OTNA-sourced operator services only (i.e., not
including third party operators), as listed in Schedule B, shall be estimated at $285,000
per year (the “SP Operator Expenses,” which is not an absolute limit). The SG&A Expenses
Limit, the SP SG&A Expenses Limit and the SP Operator Expenses (each an “Expenses Amount”
and collectively, the “Expenses Amounts”) shall each be subject to adjustment as follows:

     (i) On each anniversary date of this Agreement, each Expenses Amount shall be
increased by the percentage increase, if any, in the Consumer Price Index — All
Urban Consumers, U.S. City Average, Not Seasonally Adjusted (the “CPI”). The base
index (“Base CPI ”) shall be the published CPI as of the month of Effective Date,
which shall be compared with the first or subsequent anniversary date indices
(each, a “Final CPI”). The percentage change will be calculated to the third
decimal place and applied to such Expenses Amount to determine the adjustments to
the Expenses Amounts in accordance with the following formulas:

     Final CPI — Base CPI x Expenses Amount = Adjustment Amount

                Base CPI

     If the products of the foregoing formula are negative, there shall be no adjustment
to the Expenses Amounts. In the event that the CPI is no longer kept or published,
OTNA shall establish an alternative method of adjusting the Expenses Amounts based
on a then currently published inflation index.

     (ii) If after the Closing Date, the Partnership Group or Specialty Products
completes any acquisition of assets or businesses or the business of the
Partnership Group or Specialty Products otherwise

expands, then the Expenses Amounts shall be appropriately increased, as
applicable, in order to account for adjustments in the nature and extent of

 

 

the

Services provided by OTNA to the Partnership Entities and Specialty Products, with
any such increases in the Expenses Amounts to be subject to the prior approval of
the Conflicts Committee. Any issues that the Parties are not able to resolve
pursuant to the foregoing sentence shall be resolved in accordance with Section
6.12.

     (iii) Beginning on the third anniversary of the term of this Agreement, the
Parties will meet at least annually on or about October 31 to review the scope of
the Services, the standards of performance, performance metrics and activity levels
and, if applicable, any adjustments to the Expenses Amounts. The Parties will use
their good-faith efforts to resolve any issues concerning Service standards,
performance metrics or changes in the Expenses Amounts, with any increase or
decrease (including as a result of termination of a specific service by the
Partnership Group as a result of Section 3.2 hereto) in the Expenses Amounts to be
subject to the prior approval of the Conflicts Committee. Any issues that the
Parties are not able to resolve pursuant to the foregoing sentence shall be
resolved in accordance with Section 6.12.

The SG&A Expenses Limit and the SP SG&A Expenses Limit shall not apply to reimbursement for
expenses for the Services listed in Schedule B, publicly traded partnership expenses of the
Partnership Group as provided in Section 2.2 or for insurance reimbursements as provided in
Section 2.3.

     2.2 Reimbursement for Publicly Traded Partnership Expenses. The Partnership Entities hereby agree to reimburse OTNA for all expenses and expenditures that
OTNA incurs or payments that it makes as a result of the Partnership becoming a publicly traded
partnership, including (but not limited to) expenses associated with annual and quarterly
reporting; tax return and Schedule K-1 preparation and distribution expenses; Sarbanes-Oxley
compliance expenses; expenses associated with listing on the New York Stock Exchange; independent
auditor fees; legal fees; investor relation expenses; and registrar and transfer agent fees. The
obligation of the Partnership Entities to reimburse OTNA pursuant to this Section 2.2 shall not be
subject to any monetary limitation, including the SG&A Expenses Limit set forth in Section 2.1.

     2.3 Reimbursement for Insurance. The Partnership Entities hereby agree to reimburse OTNA for all expenses that OTNA incurs or
payments that it makes on behalf of the Partnership Entities for insurance coverage with respect to
the Business. The obligation of the Partnership Entities to reimburse OTNA pursuant to this Section
2.3 shall not be subject to any monetary limitation, including the SG&A Expenses Limit set forth in
Section 2.1.

     2.4 Access. The Partnership Group and Specialty Products shall (a) make available on a timely basis to OTNA
all information and materials reasonably requested by OTNA to enable OTNA to provide the Services
to the Partnership Entities and Specialty Products; and (b) provide to OTNA reasonable access to
the Business to the

 

 

extent necessary for OTNA to provide the Services to the Partnership Entities
and Specialty Products.

     2.5 Cooperation. OTNA, the Partnership Group and Specialty Products shall cooperate with each other in all
reasonable respects in matters relating to the provision and receipt of the Services. Such
cooperation shall include (a) obtaining all consents, licenses or approvals and (b) making timely
decisions and granting timely approvals and acceptances, in each necessary to permit each Party to
perform its obligations hereunder.

     2.6 Payments. On or before the first business day of each month, OTNA shall send separate invoices to the
General Partner and to Specialty Products for those amounts of money associated with all expenses
or expenditures estimated by OTNA to be incurred or payments estimated by OTNA to be made by OTNA
during the given month that are to be reimbursed by the Partnership Entities and Specialty
Products, respectively, and pursuant to Sections 2.1, 2.2 and 2.3 hereof (each, an “Estimate
Invoice”). Subject to Section 2.7, the Partnership Entities and Specialty Products shall pay or
cause to be paid each Estimate Invoice within thirty (30) days after the date of the Estimate
Invoice. Any Estimate Invoice that is not paid within such thirty (30) day period shall be subject
to late charges, calculated based on a rate per annum equal to the ‘prime rate’ as set forth from
time to time in The Wall Street Journal, Eastern Edition, ‘Money Rates’ column (or the maximum
legal rate, whichever is lower), for each month or portion thereof that the statement is overdue.
The Estimate Invoices shall be “trued up” within ten (10) days of the end of each quarter based on
the actual amount of the expenses, expenditures or payments in respect of which estimates were made
in the immediately preceding quarter, and OTNA will deliver to the Partnership Entities and
Specialty Products revised invoices (each, a “True Up Invoice”) reflecting any adjustments to the
Estimate Invoices. The Partnership Entities and Specialty Products shall each pay or cause to be
paid any amount set forth in a True Up Invoice that is in OTNA’s favor (a “Shortfall Amount”)
within ten (10) days after the date of the True Up Invoice. Any Shortfall Amount that is not paid
within such ten-(10)-day period shall be subject to late charges, calculated based on a rate per
annum equal to the ‘prime rate’ as set forth from time to time in The Wall Street Journal, Eastern
Edition, ‘Money Rates’ column (or the maximum legal rate, whichever is lower), for each month or
portion thereof that the statement is overdue. OTNA shall credit against the next Estimate Invoice
any amount set forth in a True Up Invoice that is in the Partnership Entities’ or Specialty
Products’ favor.

     2.7 Disputed Invoices. The Partnership Entities or Specialty Products may withhold payment on any portion of the
invoiced amount that it disputes in good faith if it provides OTNA with written notice of such
dispute (together with reasonable detail of the facts underlying such dispute) within ten (10) days
following the date of such invoice. The Administrative Representatives shall meet and attempt in
good faith to resolve the dispute. If within twenty (20) days the Administrative Representatives
have been unable to resolve the dispute, and if the dispute relates to whether amounts were
properly charged or Services actually performed, either Administrative Representative may submit
the dispute to an independent third party auditing firm that is mutually agreeable to OTNA, on the
one hand, and the Partnership Entities or Specialty Products, on the other hand. The Parties shall
cooperate with such auditing

 

 

firm and shall provide such auditing firm with access to such books
and records as may be reasonably necessary to permit a determination by such auditing firm. The
resolution by such auditing firm shall be final and binding on the Parties. Upon final
determination that any amount in dispute under this Section 2.7 is owed to OTNA, the Partnership
Entities or Specialty Products shall promptly pay to OTNA such amount, together with interest equal
to the ‘prime rate’ of interest on the original due date as published by The Wall Street Journal,
Eastern Edition, ‘Money Rates’ column (or the maximum legal rate, whichever is lower), accruing
from the original due date of such amount to the date of actual payment. The auditing firm shall
use commercially reasonable efforts to complete its work within thirty (30) days following its
engagement. The expenses of the auditing firm shall be apportioned equally between OTNA and the
Partnership Entities or Specialty Products.

     2.8 Audit. OTNA shall keep books of accounts and other records, in reasonable detail and in accordance with
generally accepted accounting principles and industry standards, consistently applied, with respect
to the provision of the Services and the fees charges, including time logs (or similar time
allocation materials), receipts and other related back-up materials. Such books of account and
other records shall be open for the Partnership Entities’ and Specialty Products’ inspection during
normal business hours upon at least ten (10) days’ prior written notice for twelve (12) months
following the end of the calendar year in which such Services were rendered. This inspection right
will include the right of the Partnership Entities and Specialty Products to have their accountants
or auditors review such books and records. If an audit reveals that the Partnership Entities or
Specialty Products paid more than the applicable fees for any applicable audited period or Service,
OTNA shall reimburse the Partnership Entities or Specialty Products for any amounts overpaid
together with interest equal to the ‘prime rate’ of interest on the original due date as published
by The Wall Street Journal, Eastern Edition, ‘Money Rates’ column (or the maximum legal rate,
whichever is lower), accruing from the date paid by the Partnership Entities or Specialty Products
to the date reimbursed by OTNA.

ARTICLE 3

TERM AND TERMINATION

     3.1 Term. The initial term of this Agreement will commence on the date hereof and, subject to the
provisions of Sections 3.3, 3.4 and 3.5 hereof, shall continue until the tenth anniversary thereof.
The term of this Agreement shall thereafter automatically renew for additional twelve-month
periods (“Extension Periods”) (such date and each anniversary thereof marking the expiration of an
Extension Period being hereinafter called the “Expiration Date”) unless and until any of the
Partnership, Specialty Products or OTNA provides to the other parties written notice not later than
one hundred eighty (180) days prior to the Expiration Date stating that the noticing Party does not
agree to extend the term of this Agreement for an additional Extension Period.

     3.2 Termination for Convenience. Any specific Service or subcategory of a Service may be terminated by the Partnership Group
or Specialty Products (each such specific Service or subcategory of a Service that has been
terminated by the Partnership Group or Specialty Products, a “Terminated Service”) at its
convenience upon thirty (30) days’ prior written notice to OTNA. At the request of the Partnership
Group or Specialty Products, OTNA shall continue to perform a Terminated Service and shall be
entitled to compensation for such Terminated Service in accordance with the terms of this Agreement
beyond such thirty (30)

 

 

day period for the period of time not to exceed ninety (90) days. At the
request of OTNA, the Partnership and Specialty Products will afford OTNA the period of time that is
reasonably required for OTNA to demobilize the personnel and operations that have been utilized in
respect of such Terminated Service and will reimburse OTNA for the costs and losses reasonably
incurred by OTNA in connection with the demobilization or termination of use of systems, personnel,
service contracts, machinery and equipment deployed by OTNA to provide any Services; provided,
however, that the amount of such costs and losses shall be subject to the mutual agreement of the
Partnership Group or Specialty Products, as applicable, and OTNA.

     3.3 Early Termination. In the event that any Party hereto (a) becomes insolvent, (b) commits an act of bankruptcy, (c)
takes advantage of any law for the benefit of debtors or such Party’s creditors, or (d) suffers a
receiver to be appointed for it or any of its property, the other party may, then or thereafter
during the continuation of such event, upon giving thirty (30) days’ prior written notice,
terminate this Agreement and exercise such other and further rights and remedies as it may have
pursuant to law.

     3.4 Breach. In the event of a material breach by OTNA, the Partnership Entities or Specialty Products of any
of their material obligations under this Agreement, including any failure by the Partnership
Entities or Specialty Products to make payments to OTNA when due, that is not cured in all material
respects within thirty (30) days after receiving written notice thereof from the non-breaching
Party, the non-breaching Party may terminate this
Agreement immediately by providing written notice of such termination, provided that the
withholding of payment by the Partnership or Specialty Products in accordance with Section 2.7
shall not constitute a breach of this Agreement.

     3.5 Change of Control. This Agreement shall terminate upon a Change of Control of the General Partner or the
Partnership, other than any Change of Control of the General Partner or the Partnership deemed to
have occurred pursuant to clause (iv) of the definition of Change of Control solely as a result of
a Change of Control of OTA. Notwithstanding any other provision of this Agreement, if the General
Partner is removed as general partner of the Partnership under circumstances where Cause does not
exist and common units held by the General Partner and its Affiliates are not voted in favor of
such removal, this Agreement may immediately thereupon be terminated by OTNA. The Partnership
shall provide OTNA with notice of any Change of Control of the General Partner or the Partnership
at least ninety (90) days prior to the effective date thereof.

     3.6 Amounts Due. In the event of a termination of this Agreement, OTNA shall be entitled to the immediate payment
of, and the Partnership Entities and Specialty Products shall, within ten (10) days, pay to OTNA,
all accrued amounts for Services, taxes and other amounts due under this Agreement as of the date
of termination. Payments not made within ten (10) days of termination of this Agreement shall be
subject to late charges as provided in Section 2.6.

 

 

     3.7 Effect of Termination. Upon expiration or termination of this Agreement, all rights and obligations of the Parties
under this Agreement shall terminate; provided, however, that such termination shall not affect or
excuse the performance of any Party (i) for any breach of this Agreement occurring prior to such
termination or (ii) under any of the following provisions of this Agreement that survive the
termination of this Agreement indefinitely: Section 2.6, Section 3.6, this Section 3.7 and Article
5 and Article 6 hereof.

ARTICLE 4

FORCE MAJEURE

     OTNA shall not be liable for any expense, loss or damage whatsoever arising out of any
interruption of Services or delay or failure to perform under this Agreement that is due to acts of
God, acts of a public enemy, acts of terrorism, acts of a nation or any state, territory, province
or other political division thereof, fires, floods, epidemics, riots, theft, quarantine
restrictions, freight embargoes or other similar causes beyond the reasonable control of OTNA. In
any such event, OTNA’s obligations hereunder shall be postponed for such time as its performance is
suspended or delayed on account thereof. OTNA will promptly notify the Partnership Group and
Specialty Products, either orally or in writing, upon learning of the occurrence of such event of
force majeure. Upon the cessation of
the force majeure event, OTNA will use commercially reasonable efforts to resume its
performance with the least practicable delay.

ARTICLE 5

INDEMNIFICATION AND INSURANCE

     5.1 Release. Except as specifically set forth in this Agreement, the Partnership Group and Specialty Products
hereby release OTNA and each of its employees, agents, members, managers, officers and directors
(collectively, the “Representatives” and together with OTNA, the “OTNA Indemnitees”), from and
against any and all claims, demands, complaints, liabilities, losses, damages, costs and expenses
(collectively, “Damages”) arising from, relating to or in connection with the provision of any
Service to, or the use of any Service by, the Partnership Entities, Specialty Products or any of
their Affiliates or any other Person using such Service, except to the extent that such Damages
were caused by acts or omissions of OTNA or its Representatives, which acts or omissions are
finally determined by a court or arbitral tribunal of competent jurisdiction to be the result of
the fraud, willful misconduct or gross negligence of such Person, in which case such OTNA
Indemnitee shall not be entitled to the benefits of this Section 5.1 to the extent that such
Damages were caused by such fraud, willful misconduct or gross negligence.

     5.2 Indemnity.

     (a) Except as specifically set forth in this Agreement, the Partnership Group and
Specialty Products hereby agrees to indemnify, defend and hold harmless the OTNA
Indemnitees from and against any and all Damages arising from, relating to or in connection
with any demand, claim, proceeding or complaint by a third party (each, a “Third-Party
Claim”) in respect of the

 

 

provision of any to, or the use of any Services by, the
Partnership Group or Specialty Products, except to the extent that such Damages were caused
by acts or omissions of OTNA or the Representative, which acts or omissions are finally
determined by a court or arbitral tribunal of competent jurisdiction to be the result of
the fraud, willful misconduct or gross negligence of such Person, in which case, such OTNA
Indemnitee shall not be entitled to the benefits of this Section 5.2(a) to the extent that
such Damages were caused by such fraud, willful misconduct or gross negligence.

     (b) If a Third-Party Claim is made against any Person entitled to indemnification
pursuant to Section 5.2(a) (an “Indemnified Party”), and if such Indemnified Party intends
to seek indemnity with respect thereto under Section 5.2(a), such Indemnified Party shall
promptly notify in writing the party obligated to indemnify such Indemnified Party (the
“Indemnifying Party”) of the nature of the claim. The failure by the Indemnified Party to
give notice as provided above shall not relieve the Indemnifying Party of its obligations
under this Article 5,
except to the extent that the Indemnifying Party’s rights are actually prejudiced as a
result of such failure to give notice. Upon receipt of notice of the assertion of a claim,
the Indemnifying Party shall have the right to assume, reasonably and promptly, the defense
of the claim at its own expense. The Indemnified Party shall have the right to employ
separate counsel and to participate in (but not control) any such action, but the fees and
expenses of such counsel shall be at the expense of the Indemnified Party. If the
Indemnifying Party does not reasonably promptly assume the defense, the Indemnified Party
shall have the right to employ counsel and to control the defense against the claim, and
the reasonable fees and expenses of such counsel shall be at the expense of the
Indemnifying Party. The Indemnifying Party shall not enter into any settlement of a claim
that includes any term other than just a payment of money, nor any settlement of a claim
that does not include as an unconditional term thereof the giving by the claimant or
plaintiff to the Indemnified Party a full release from all liability with respect to the
claim, in each case, without the prior written consent of the Indemnified Party (which
consent shall not be unreasonably withheld). The Indemnified Party, if it shall control
the defense of the claim, shall not enter into any settlement of a claim without the prior
written consent of the Indemnifying Party (which consent shall not be unreasonably
withheld). The Indemnified Party shall provide all reasonable cooperation and assistance,
at the Indemnifying Party’s expense, in the defense of any claim for which indemnification
is available and shall furnish such records, information, testimony and attend such
conferences, discovery proceedings, hearings, trials and appeals as may reasonably be
requested.

 

 

ARTICLE 6

MISCELLANEOUS

     6.1 Taxes.

     (a) The Partnership Group and Specialty Products shall each bear all of their
respective taxes, duties and other similar charges (and any related interest and
penalties), imposed as a result of the Partnership Entities’ and Specialty Products’
receipt of Services under this Agreement, including any tax which any Partnership Entity or
Specialty Products is required to withhold or deduct from payments to any OTNA, except any
net income tax imposed upon OTNA.

     (b) Notwithstanding Section 6.1(a), the Partnership Group and Specialty Products are
each respectively liable for and will indemnify and hold harmless OTNA from all sales, use
and similar taxes (plus any penalties, fines or interest thereon) (collectively, “Sales
Taxes”) assessed, levied or imposed by any Governmental Authority on the provision of
Services by OTNA to the Partnership Entities and Specialty Products. OTNA shall collect
from the Partnership Entities and Specialty Products any Sales Tax that is due on the
Services it provides to the Partnership Entities and Specialty Products and shall pay such
Sales Tax so collected to the appropriate Governmental Authority.

     6.2 Assignment. This Agreement shall bind and inure to the benefit of and be enforceable by the Parties hereto
and their respective successors and permitted assigns. No Party may assign its rights or
obligations under this Agreement without the prior written consent of the other Parties hereto;
provided, however, that OTNA may assign its rights and obligations under this Agreement to any
Affiliate of OTNA. Any purported assignment or transfer in violation of this Section 6.2 shall be
null and void and of no effect.

     6.3 No Third Party Beneficiaries. Except as provided in Article 5, this Agreement is for the sole benefit of the Parties and their
successors and permitted assigns, and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the Parties and their successors and permitted assigns,
any legal or equitable rights hereunder, whether as third-party beneficiaries or otherwise.

     6.4 Amendments. Except as otherwise provided in this Agreement, including Section 6.15(b), no amendment to this
Agreement shall be effective unless it is in writing and signed by each Party hereto.

     6.5 Waivers. No failure or delay on the part of any Party in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The rights and remedies of
the Parties hereunder are cumulative and are not exclusive of any rights or remedies which they
would otherwise

 

 

have hereunder. No provision of this Agreement may be waived except pursuant to a
writing executed by the waiving Party.

     6.6 Notices. All notices or other communications required or permitted to be given hereunder shall be in
writing and shall be delivered by hand or sent by facsimile or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier service and shall be deemed
given when so delivered by hand or facsimile, or if mailed, three days after mailing (one business
day in the case of express mail or overnight courier service), as follows (or at such other address
for a Party as shall be specified by notice given in accordance with this Section 6.6):

OTNA:

Oiltanking North America, LLC

15631 Jacintoport Boulevard

Houston, Texas 77015

Attention: Jan P. Vogel

Partnership:

Oiltanking Partners, L.P.

15631 Jacintoport Boulevard

Houston, Texas 77015

Attention: Jan P. Vogel

General Partner:

OTLP GP, LLC

15631 Jacintoport Boulevard

Houston, Texas 77015

Attention: Jan P. Vogel

Specialty Products:

Oiltanking Beaumont Specialty Products, LLC

15631 Jacintoport Boulevard

Houston, Texas 77015

Attention: Jan P. Vogel

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

     6.8 Exhibits and Schedules; Interpretation. The headings contained in this Agreement or in any Schedule are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement. All Schedules
referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Any capitalized terms used in any Schedule but not otherwise defined therein, shall
have

 

 

the meaning as defined in this Agreement. When a reference is made in this Agreement to an
Article, Section or Schedule, such reference shall be to an Article or Section of, or a Schedule
to, this Agreement unless otherwise indicated. For all purposes hereof, the terms “include” and
“including” shall be deemed followed by the words “without limitation.” The words “hereof”,
“herein” and “hereunder” and words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this Agreement. No provision of
this Agreement shall be interpreted or construed against
any Party hereto solely because such Party or its legal representative drafted such provision.

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

     6.10 Entire Agreement. This Agreement, including the Schedules, constitute the entire agreement and understanding among
the Parties with respect to the subject matter hereof and supersedes all prior agreements and
understandings and negotiations, both written and oral, between the Parties with respect to the
subject matter of this Agreement. No representation, inducement, promise, understanding, condition
or warranty not set forth herein has been made or relied upon by any Party hereto.

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

     6.12 Arbitration. Any dispute, controversy or claim arising out of or in connection with this Agreement shall be
settled by final and binding arbitration conducted in Houston, Texas in accordance with the
Commercial Arbitration Rules of the American Arbitration Association by one or more arbitrators
designated in accordance with said Rules. All arbitrators must have not less than seven years
experience in the energy industry. The Parties agree that the award of the arbitral tribunal (the
“Arbitration Award”) shall be: (a) conclusive, final and binding upon the Parties; and (b) the sole
and exclusive remedy between the Parties regarding any and all claims and counterclaims presented
to the arbitral tribunal. All notices to be given in connection with the arbitration shall be as
provided in Section 6.6 of this Agreement. The Arbitration Award shall include interest, at a rate
determined as appropriate by the arbitrators, from the date of any breach or other violation of
this Agreement to the date when the Arbitration Award is paid in full. The Arbitration Award shall
also include the fixing of the expense of the arbitration and the assessment of the same, as is
appropriate in the opinion of the arbitrators, against either or both parties hereto. Each party
shall

 

 

otherwise bear its cost for its respective legal
fees, witnesses, depositions and other out-of-pocket expenses incurred in the course of the
arbitration.

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

     6.14 Confidentiality; Title to Data.

     (a) Each of the Parties agrees that any confidential information of the other Party
received in the course of performance under this Agreement shall be kept strictly
confidential by the Parties, except that OTNA may, for the purpose of providing Services
pursuant to this Agreement, disclose such information to any of its Subsidiaries or to
third-party contractors; provided that any such third party shall have agreed to be bound
by this Section 6.14; and any Party may disclose such information to the extent reasonably
necessary in connection with the enforcement of this Agreement or as required by law, any
Governmental Authority or legal process, including any tax audit or litigation or if
requested by any Governmental Authority. The obligations under this Section 6.14 shall not
apply to (i) information that becomes generally available to the public other than as a
result of a disclosure, directly or indirectly, by the receiving Party or its Affiliates;
(ii) information that becomes available to a party on a non-confidential basis from a
source other than the other Party (provided that such source is not known by such party to
be bound by a confidentiality agreement with or other obligation of secrecy to the other
Party); (iii) information to the extent required by a court of competent jurisdiction or
other Governmental Authority or otherwise as required by law, including disclosure
obligations imposed under the United States federal securities laws; or (iv) information on
a “need-to-know” basis under an obligation of confidentiality to its, its Affiliates, and
its and its Affiliates’ consultants, legal counsel, employees, directors, officers,
accountants, banks and other financing sources and their advisors.

     (b) The Partnership Group and Specialty Products each respectively acknowledge that
the Partnership Group and Specialty Products will not acquire any right, title or interest
(including any license rights or rights of use) in any firmware or software, and the
licenses therefor that are owned by OTNA, by reason of the provision of the Services
provided hereunder.

     6.15 Administrative Representatives.

     (a) Each Party shall by notice to the other Party appoint one or more Representatives
(“Administrative Representative(s)”) to facilitate day-to-day communications and
performance under this Agreement. Each Party may treat an

 

 

act of an Administrative
Representative of any other Party as being authorized by such other Party to act for and
bind such Party. Each Party may replace its Administrative Representative by giving
written notice of the replacement to the other Parties.

     (b) No additional schedules, modifications to the existing Schedule or modifications
or amendments to this Agreement shall be effective unless and until executed by the
Administrative Representatives of each of OTNA and the Partnership.

     6.16 Dispute Resolution. If the Parties are unable to resolve any service or performance issues or if there is a material
breach of this Agreement that has not been corrected within thirty (30) days of receipt of notice
of such breach, the Administrative Representatives of the Parties in dispute shall meet promptly to
review and resolve such issues and breaches in good faith (the date on which such Persons first so
meet, the “Discussion Date”). If such Persons are unable to fully resolve any such issues and
breaches in good faith promptly after the Discussion Date, any remaining disputes shall be resolved
in accordance with Section 6.12.

     6.17 Overriding Obligations. Notwithstanding anything to the contrary, no term of this Agreement or the Schedules hereto
shall have the effect of obliging either to breach any legal or regulatory obligation to which such
Person may be subject, by virtue of either requiring such Person to act in a particular manner or
refrain from doing so.

[Rest of the page intentionally left blank]

 

 

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

	 	 	 	 	 	 	 	 	 

	OILTANKING PARTNERS, L.P.	 	OILTANKING NORTH AMERICA, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By: OTLP GP, LLC, its General Partner	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By: 

Name:

	 	/s/ Carlin G. Conner
 

Carlin G. Conner
	 	By:

Name:
	 	/s/ Carlin G. Conner
 

Carlin G. Conner
	 	 
	Title:

	 	President and Chief Executive Officer
	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	OTLP GP, LLC	 	OILTANKING BEAUMONT SPECIALTY PRODUCTS, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Carlin G. Conner
	 	By:
	 	/s/ Carlin G. Conner	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Carlin G. Conner
	 	Name:
	 	Carlin G. Conner	 	 
	Title:

	 	President and Chief Executive Officer
	 	Title:
	 	President and Chief Executive Officer	 	 

Signature Page to Services Agreement

 

 

SCHEDULE A

Services Subject to the SG&A Expenses Limit

and the SP SG&A Expenses Limit

	1)	 	executive,
	 
	2)	 	investor relations (provided that the SG&A Expenses Limit shall not apply to reimbursement of
expenses for investor relations services),
	 
	3)	 	sales and marketing,
	 
	4)	 	corporate legal for support of existing assets of the Partnership Group and Specialty
Products for support of existing assets of the Partnership Group and Specialty Products,
	 
	5)	 	accounting (provided that the SG&A Expenses Limit shall not apply to reimbursement of
expenses for accounting services that are to be to be reimbursed pursuant to Section 2.2),
	 
	6)	 	treasury and cash management,
	 
	7)	 	creditor management and collections,
	 
	8)	 	internal audit,
	 
	9)	 	tax reporting and administration for support of existing assets of the Partnership Group and
Specialty Products,
	 
	10)	 	insurance administration and claims processing,
	 
	11)	 	risk management,
	 
	12)	 	health, safety, security and environmental affairs for support of existing assets of the
Partnership Group and Specialty Products,
	 
	13)	 	human resources management for support of existing assets of the Partnership Group and
Specialty Products,
	 
	14)	 	payroll administration,
	 
	15)	 	internal training,
	 
	16)	 	engineering services for support of existing assets of the Partnership Group and Specialty
Products,
	 
	17)	 	Enterprise Resource Planning for support of existing assets of the Partnership Group and
Specialty Products, and

 

 

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

 

 

SCHEDULE B

Operations and Project Development Services

	1)	 	operations,
	 
	2)	 	maintenance and repair,
	 
	3)	 	inventory management,
	 
	4)	 	facilities management,
	 
	5)	 	services of third party consultants and advisers, and
	 
	6)	 	services and business development for support of new or expansion projects.exv10w6

Exhibit 10.6

Execution Version

TAX SHARING AGREEMENT

BY AND AMONG

OILTANKING HOLDING AMERICAS, INC.

AND

OILTANKING PARTNERS, L.P.

JULY 19, 2011

 

 

TAX SHARING AGREEMENT

BY AND AMONG

OILTANKING HOLDING AMERICAS, INC. AND OILTANKING PARTNERS, L.P.

          Tax Sharing Agreement (the “Agreement”), dated this 19th day of July, 2011, by and among
OILTANKING HOLDING AMERICAS, INC. (“OTA”), a Delaware corporation, and OILTANKING PARTNERS, L.P.
(the “Partnership”), a Delaware limited partnership.

RECITALS

          WHEREAS, OTA is the owner of the member interests of OTLP GP, LLC (the general partner of the
Partnership) and common and subordinated units of the Partnership;

          WHEREAS, the Partnership Group (as defined below) includes various entities that may be
required to join with OTA or its affiliates in the filing of a consolidated, combined or unitary
state tax return;

          WHEREAS, the Parties (as defined below) wish to set forth the general principles under which
they will allocate and share various Taxes (as defined below) and related liabilities;

          WHEREAS, OTA, on behalf of itself and its present and future subsidiaries other than the
Partnership Group (“OTA Group”), and the Partnership, on behalf of itself and its present and
future subsidiaries (the “Partnership Group”), are entering into this Agreement to provide for the
allocation among the OTA Group and the Partnership Group of all responsibilities, liabilities and
benefits relating to any Tax for which a Combined Return (as defined below) is filed for a taxable
period including or beginning on or after the Effective Date (as defined below) and to provide for
certain other matters;

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in
this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

Definitions

          1.1 Definitions. The following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and the plural forms of the terms defined):

          “Accounting Referee” is defined in Section 6.11 herein.

          “Code” means the Internal Revenue Code of 1986, as amended, or any successor thereto, as in
effect for the taxable period in question.

2

 

          “Combined Group” means a group of corporations or other entities that files a Combined Return.

          “Combined Return” means any Tax Return (other than a Tax Return for U.S. federal income taxes)
filed on a consolidated, combined (including nexus combination, worldwide combination, domestic
combination, line of business combination or any other form of combination) or unitary basis that
includes activities of any member of the OTA Group and any member of the Partnership Group.

          “Effective Date” means 7:00 a.m., Central time, on July 19, 2011

          “Final Determination” means the final resolution of any Tax (or other matter) for a taxable
period, including related interest or penalties, that, under applicable law, is not subject to
further appeal, review or modification through proceedings or otherwise, including (i) by the
expiration of a statute of limitations or a period for the filing of claims for refunds, amending
Tax Returns, appealing from adverse determinations or recovering any refund (including by offset),
(ii) by a decision, judgment, decree or other order by a court of competent jurisdiction, which has
become final and unappealable, (iii) by a closing agreement, an accepted offer in compromise or a
comparable agreement under laws of the particular Tax Authority, (iv) by execution of a form under
the laws of a Tax Authority that is comparable to an Internal Revenue Service Form 870 or 870-AD
(excluding, however, with respect to a particular Tax Item for a particular taxable period any such
form that reserves (whether by its terms or by operation of law) the right of the taxpayer to file
a claim for refund and/or the right of the Tax Authority to assert a further deficiency with
respect to such Tax Item for such period) or (v) by any allowance of a refund or credit, but only
after the expiration of all periods during which such refund may be adjusted.

          “Notice” is defined in Section 6.1 herein.

          “OTA Group” is defined in the recitals to this Agreement.

          “Party” means each of OTA and the Partnership, and solely for purposes of this definition,
“OTA” includes the OTA Group and the Partnership includes the Partnership Group. Each of OTA and
the Partnership shall cause the OTA Group and the Partnership Group, respectively, to comply with
this Agreement.

          “Partnership Group” is defined in the Recitals to this Agreement.

          “Partnership Group Combined Tax Liability” means, with respect to any Tax, the Partnership
Group’s liability for such Tax owed with respect to a Combined Return for a taxable period, as
determined under Section 3.2 of this Agreement.

          “Partnership Group Deposit” is defined in Section 3.4 herein.

          “Partnership Group Members” means those entities included in the Partnership Group.

          “Partnership Group Pro Forma Combined Return” means a pro forma Combined Return or other
schedule prepared pursuant to Section 3.2 of this Agreement.

3

 

          “Reporting Entity” means the entity that is required by statute or rule to file the particular
Combined Return.

          “Tax Attribute” means a Tax Item of a member of the Partnership Group reflected on a Combined
Return that is comparable to one or more of the following attributes with respect to a U.S. federal
income tax consolidated tax return: a net operating loss, a net capital loss, an unused investment
credit, an unused foreign tax credit, an excess charitable contribution, a U.S. federal minimum tax
credit or a U.S. federal general business credit (but not tax basis or earnings and profits).

          “Tax Authority” means a domestic governmental authority (other than the United States) or any
subdivision, agency, commission or authority thereof or any quasi-governmental or private body
having jurisdiction over the assessment, determination, collection or imposition of any Tax
(excluding the U.S. Internal Revenue Service).

          “Tax Controversy” means any audit, examination, dispute, suit, action, litigation or other
judicial or administrative proceeding initiated by OTA or the Partnership or any Tax Authority.

          “Tax Item” means any item of income, gain, loss, deduction or credit, or other item reflected
on a Tax Return or any Tax Attribute.

          “Tax Return” means any return, report, certificate, form or similar statement or document
(including any related or supporting information or schedule attached thereto and any information
return, amended Tax Return, claim for refund or declaration of estimated tax) required to be
supplied to, or filed with, a Tax Authority in connection with the determination, assessment or
collection of any Tax or the administration of any laws, regulations or administrative requirements
relating to any Tax.

          “Tax” or “Taxes” means all forms of taxation, whenever created or imposed, and whether imposed
by a domestic, local, municipal, governmental, state, federation or other body, but excluding taxes
imposed by the United States, and without limiting the generality of the foregoing, shall include
net income, alternative or add-on minimum, gross income, sales, use, ad valorem, gross receipts,
value added, franchise, profits, license, transfer, recording, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, windfall profit, custom duty or other tax,
governmental fee or like assessment or charge of any kind whatsoever, together with any related
interest, penalties or other additions to tax, or additional amounts imposed by any such Tax
Authority.

Any term used but not capitalized herein that is defined in the Code or in the Treasury Regulations
thereunder shall, to the extent required by the context of the provision at issue, have the meaning
assigned to it in the Code or such regulation.

ARTICLE II

Preparation and Filing of Tax Returns

2.1 Manner of Filing

4

 

               (a) For periods that include the Effective Date and periods after the Effective Date, OTA
shall have the sole and exclusive responsibility for the preparation and filing of, and shall
cause the Reporting Entity to prepare and file, all Combined Returns. OTA shall be authorized
to take any and all action necessary or incidental to the preparation and filing of a
Combined Return, including, without limitation, (i) making elections and adopting
accounting methods, (ii) filing all extensions of time, including extensions of time for payment
of tax, (iii) filing claims for refund or credit or (iv) giving waivers or bonds.

               (b) For periods that include the Effective Date and periods after the Effective Date, the
Partnership Group shall have the sole and exclusive responsibility for the preparation and
filing of, and shall prepare and file or cause to be prepared and filed, all Tax Returns of the
Partnership Group Members that are not Combined Returns.

               (c) OTA shall have sole discretion to include, or cause to be included, in a Combined
Return for any Tax any member of the Partnership Group for which inclusion in such Combined
Return is elective; provided, however, that the Partnership Group Combined Tax Liability for any
period shall not exceed the aggregate of (x) each such elective Partnership Group Member’s
liability for such Tax for such period, computed as if such Partnership Group Member were not
included in such Combined Return and (y) the Partnership Group Combined Tax Liability calculated
for the Partnership Group Members for which inclusion is not elective. OTA shall provide pro
forma Tax Returns pursuant to Section 3.5 of this Agreement to support the calculation of the
amount of any decrease in the Partnership Group Combined Tax Liability pursuant to this Section
2.1(c).

          2.2 Franchise Tax Taxable Period. References to “taxable period” for any franchise or other
doing business Tax shall mean the taxable period during which the income, operations, assets or
capital comprising the base of such Tax is measured, regardless of whether the right to do business
for another taxable period is obtained by the payment of such franchise Tax.

ARTICLE III

Allocation of Taxes

          3.1 Liability of the Partnership Group for Combined Taxes. For each Tax for each taxable
period that includes or begins on or after the Effective Date and for which a Combined Return is
filed, the Partnership Group Members included in such Combined Return shall be liable to OTA for an
amount equal to the Partnership Group Combined Tax Liability in respect of such Tax.

          3.2 Partnership Group Combined Tax Liability. With respect to each Tax for each taxable
period that includes or begins on or after the Effective Date and for which a member of the
Partnership Group is included in a Combined Return, the Partnership Group Combined Tax Liability
for such Tax for such taxable period shall be the Tax for such taxable period as determined on a
Partnership Group Pro Forma Combined Return prepared:

               (a) by including only the Tax Items of the members of the Partnership Group that are included
in the Combined Return and computing the liability of the Partnership Group

5

 

Members for such Tax as
if such Partnership Group Members were included in a separate combined, consolidated or unitary
return that includes only the Partnership Group Members;

               (b) except as provided in Section 3.2(e) hereof, using all elections, accounting methods and
conventions used on the Combined Return for such period;

               (c) applying the Tax rate in effect for the Combined Return of the Combined Group for such
taxable period;

               (d) assuming that the Partnership Group elects not to carry back any net operating losses and

               (e) assuming that the Partnership Group’s utilization of any Tax Attribute carryforward or
carryback is limited to the Tax Attributes of the Partnership Group that would be available if the
Partnership Group Combined Tax Liability for each taxable period ending after the Effective Date
were determined in accordance with this Section 3.2.

          3.3 Preparation and Delivery of Pro Forma Tax Returns. Not later than 90 days following the
date on which a Combined Return is filed with the appropriate Tax Authority, OTA shall prepare and
deliver to the Partnership the related Partnership Group Pro Forma Combined Return calculating the
Partnership Group Combined Tax Liability attributable to the period covered by such filed Combined
Return.

          3.4 Payment of Tax. OTA shall timely pay (or shall cause to be timely paid) any Tax reflected
on a Combined Return and hold the Partnership harmless for all liability for such Tax. In the
event OTA is required to make an estimated payment or deposit of any Tax of any Combined Group
which includes any member of the Partnership Group, OTA shall calculate the portion, if any, of
such estimated payment or deposit attributable to the Partnership Group using a methodology similar
to that described in Section 3.2 (the “Partnership Group Deposit”) and shall present such
calculation to the Partnership. Within 5 days thereafter, the Partnership shall pay the
Partnership Group Deposit to OTA. Within 30 days after delivery by OTA of a Partnership Group Pro
Forma Combined Return to the Partnership calculating the Partnership Group Combined Tax Liability
with respect to a Combined Return, the Partnership shall pay to OTA such Partnership Group Combined
Tax Liability less the amount of any Partnership Group Deposit relating to the same Combined
Return.

          3.5 Subsequent Changes in Treatment of Tax Items. With respect to any Combined Return for any
taxable period beginning on or after the Effective Date, in the event of a change in the treatment
of any Tax Item of any member of a Combined Group as a result of a Final Determination, within 30
days following such Final Determination (i) OTA shall calculate the change, if any, to the
Partnership Group Combined Tax Liability resulting from such change, (ii) OTA shall pay any
decrease in the Partnership Group Combined Tax Liability to the Partnership and (iii) the
Partnership shall pay any increase in the Partnership Group Combined Tax Liability to OTA.

6

 

ARTICLE IV

Control of Tax Proceedings; Cooperation and Exchange of Information

     4.1 Control of Proceedings. Except as provided in this Article IV, OTA shall have full
responsibility and discretion in handling, settling or contesting any Tax Controversy involving a
Tax Return for which it has filing responsibility under this Agreement as well as all Tax Returns
for all taxable periods ending before the Effective Date. The Partnership shall have full
responsibility and discretion in handling, settling or contesting any Tax Controversy
involving a Tax Return for which it has filing responsibility under this Agreement. Except as
otherwise provided in this Article IV, any costs incurred in handling, settling or contesting any
Tax Controversy shall be borne by the Party having full responsibility and discretion thereof.

     4.2 Cooperation and Exchange of Information.

               (a) Each Party shall cooperate fully at such time and to the extent reasonably requested by
any other Party in connection with the preparation and filing of any Tax Return or claim for
refund, or the conduct of any audit, dispute, proceeding, suit or action concerning any issues or
other matters considered in this Agreement. Such cooperation shall include, without limitation,
the following: (i) the retention and provision on demand of Tax Returns, books, records (including
those concerning ownership and Tax basis of property which a Party may possess), documentation or
other information relating to the Tax Returns, including accompanying schedules, related workpapers
and documents relating to rulings or other determinations by Taxing Authorities, until the
expiration of the applicable statute of limitations (giving effect to any extension, waiver or
mitigation thereof); (ii) the provision of additional information, including an explanation of
material provided under clause (i) of this Section 4.2(a), to the extent such information is
necessary or reasonably helpful in connection with the foregoing; (iii) the execution of any
document that may be necessary or reasonably helpful in connection with the filing of a Tax Return
by OTA, the Partnership or of their respective subsidiaries, or in connection with any audit,
dispute, proceeding, suit or action and (iv) such Party’s commercially reasonable efforts to obtain
any documentation from a governmental authority or a third party that may be necessary or
reasonably helpful in connection with any of the foregoing.

               (b) Each Party shall make its employees and facilities available on a reasonable and mutually
convenient basis in connection with any of the foregoing matters.

               (c) If any Party fails to provide any information requested pursuant to Section 4.2 hereof
within a reasonable period, as determined in good faith by the Party requesting the information,
then the requesting Party shall have the right to engage a public accounting firm to gather such
information, provided that 30 days’ prior written notice is given to the unresponsive Party. If
the unresponsive Party fails to provide the requested information within 30 days of receipt of such
notice, then such unresponsive Party shall permit the requesting Party’s public accounting firm
full access to all appropriate records or other information as reasonably necessary to comply with
this Section 4.2 and shall reimburse the requesting Party or pay directly all costs connected with
the requesting Party’s engagement of the public accounting firm.

7

 

ARTICLE V

Warranties and Representations; Payment Obligations

          5.1 Warranties and Representations Relating to Actions of OTA and the Partnership. Each of
OTA and the Partnership warrants and represents to the other that:

               (a) in the case of OTA, it is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite power to carry out the
transactions contemplated by this Agreement;

               (b) in the case of the Partnership, it is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and has all requisite power
to carry out the transactions contemplated by this Agreement;

               (c) it has duly and validly taken all action necessary to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions contemplated hereby;

               (d) this Agreement has been duly executed and delivered by it and constitutes its legal, valid
and binding obligation enforceable in accordance with its terms subject, as to the enforcement of
remedies, to (i) applicable bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally from time to time in effect and (ii)
general principles of equity, whether enforcement is sought in a proceeding at law or in equity and

               (e) the execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby or the compliance with any of the provisions of this Agreement will not (i)
conflict with or result in a breach of any provision of its certificate of incorporation, by-laws,
certificate of limited partnership, limited partnership agreement or general partnership agreement,
as the case may be, (ii) breach, violate or result in a default under any of the terms of any
agreement or other instrument or obligation to which it is a party or by which it or any of its
properties or assets may be bound or (iii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to it or affecting any of its properties or assets.

          5.2 Calculation of Payment Obligations. Except as otherwise provided under this Agreement, to
the extent that the payor Party has a payment obligation to the payee Party pursuant to this
Agreement, the payee Party shall provide the payor Party with its calculation of the amount of such
obligation. The documentation of such calculation shall provide sufficient detail to permit the
payor Party to reasonably understand the calculation. All payment obligations shall be made to the
payee Party or to the appropriate Tax Authority as specified by the payee Party within 30 days
after delivery by the payee Party to the payor Party of written notice of a payment obligation.
Any disputes with respect to payment obligations shall be resolved in accordance with Section 6.11
below.

          5.3 Prompt Performance. All actions required to be taken by any Party under this Agreement
shall be performed within the time prescribed for performance in this Agreement or if no period is
prescribed, such actions shall be performed promptly.

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          5.4 Interest. Payments pursuant to this Agreement that are not made within the period
prescribed therefor in this Agreement shall bear interest (compounded daily) from and including the
date immediately following the last date of such period through and including the date of payment
at a rate equal to the U.S. federal short-term rate or rates established pursuant to Section 6621
of the Code for the period during which such payment is due but unpaid.

          5.5 Tax Records. The Parties to this Agreement hereby agree to retain and provide on proper
demand by any Tax Authority (subject to any applicable privileges) the books, records,
documentation and other information relating to any Tax Return until the later of (i) the
expiration of the applicable statute of limitations (giving effect to any extension, waiver or
mitigation thereof), (ii) the date specified in an applicable records retention agreement entered
into with a Tax Authority, (iii) a Final Determination made with respect to such Tax Return and
(iv) the final resolution of any claim made under this Agreement for which such information is
relevant.

          5.6 Continuing Covenants. Each Party agrees (i) not to take any action reasonably expected to
result in a new or changed Tax Item that is detrimental to any other Party and (ii) to take any
action reasonably requested by any other Party that would reasonably be expected to result in a new
or changed Tax Item that produces a benefit or avoids a detriment to such other Party; provided
that such action does not result in any additional cost not fully compensated for by the requesting
Party. The Parties hereby acknowledge that the preceding sentence is not intended to limit, and
therefore shall not apply to, the rights of the Parties with respect to matters otherwise covered
by this Agreement.

ARTICLE VI

Miscellaneous Provisions

          6.1 Notice. Any notice, demand, claim or other communication required or permitted to be
given under this Agreement (a “Notice”) shall be in writing and may be personally served provided a
receipt is obtained therefor, or may be sent by certified mail return receipt requested postage
prepaid, to the Parties at the following addresses (or at such other address as one Party may
specify by notice to any other Party):

	 	 	 	 	 

	 

	 	OTA at:
	 	Oiltanking Holding Americas, Inc.
	 

	 	 	 	15631 Jacintoport Blvd.
	 

	 	 	 	Houston, Texas 77015
	 

	 	 	 	Attention: President
	 
	 	 	 	 
	 

	 	The Partnership at:
	 	Oiltanking Partners, L.P.
	 

	 	 	 	15631 Jacintoport Blvd.
	 

	 	 	 	Houston, Texas 77015
	 

	 	 	 	Attention: President and Chief Executive Officer

          A Notice which is delivered personally shall be deemed given as of the date specified on the
written receipt therefor. A Notice mailed as provided herein shall be deemed given on the

9

 

third business day following the date so mailed. Notification of a change of address may be given by any
Party to another in the manner provided in this Section 6.1 for providing a Notice.

          6.2 Required Payments. Unless otherwise provided in this Agreement, any payment of Tax
required shall be due within 30 days of a Final Determination of the amount of such Tax.

          6.3 Injunctions. The Parties acknowledge that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with its specific
terms or were otherwise breached. The Parties hereto shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions of this Agreement in any court having jurisdiction, such remedy being in
addition to any other remedy to which they may be entitled at law or in equity.

          6.4 Further Assurances. Subject to the provisions hereof, the Parties hereto shall make,
execute, acknowledge and deliver such other instruments and documents, and take all such other
actions, as may be reasonably required in order to effectuate the purposes of this Agreement and to
consummate the transactions contemplated hereby. Subject to the provisions hereof, each of the
Parties shall, in connection with entering into this Agreement, perform its obligations hereunder
and take any and all actions relating hereto, comply with all applicable laws, regulations, orders
and decrees, obtain all required consents and approvals and make all required filings with any
governmental agency, other regulatory or administrative agency, commission or similar authority and
promptly provide the other Parties with all such information as such Parties may reasonably request
in order to be able to comply with the provisions of this sentence.

          6.5 Parties in Interest. Except as herein otherwise specifically provided, nothing in this
Agreement expressed or implied is intended to confer any right or benefit upon any person, firm or
corporation other than the Parties and their respective successors and permitted assigns.

          6.6 Setoff. Except as provided by Section 2.1(c) of this Agreement, all payments to be made
under this Agreement shall be made without setoff, counterclaim or withholding, all of which are
expressly waived.

          6.7 Change of Law. If, due to any change in applicable law or regulations or the
interpretation thereof by any court of law or other governing body having jurisdiction subsequent
to the date of this Agreement, performance of any provision of this Agreement or any transaction
contemplated hereby shall become impracticable or impossible, the Parties hereto shall use their
best efforts to find and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such provision.

          6.8 Termination and Survival. Notwithstanding anything in this Agreement to the contrary,
this Agreement shall remain in effect and its provisions shall survive for the full period of all
applicable statutes of limitation (giving effect to any extension, waiver or mitigation thereof) or
until otherwise agreed to in writing by OTA and the Partnership, or their successors.

          6.9 Amendments; No Waivers.

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               (a) Any provision of this Agreement may be amended or waived if, and only if, such amendment
or waiver is in writing and signed, in the case of an amendment, by OTA and the Partnership, or in
the case of a waiver, by the Party against whom the waiver is to be effective.

               (b) No failure or delay by any Party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege.

          6.10 Governing Law and Interpretation. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made and to be performed
in the State of Delaware.

          6.11 Resolution of Certain Disputes. Any disagreement between the Parties with respect to any
matter that is the subject of this Agreement, including, without limitation, any disagreement with
respect to any calculation or other determinations by OTA hereunder, which is not resolved by
mutual agreement of the Parties, shall be resolved by a nationally recognized independent
accounting firm chosen by and mutually acceptable to the Parties hereto (an “Accounting Referee”).
Such Accounting Referee shall be chosen by the Parties within fifteen (15) business days from the
date on which one Party serves written notice on another Party requesting the appointment of an
Accounting Referee, provided that such notice specifically describes the calculations to be
considered and resolved by the Accounting Referee. In the event the Parties cannot agree on the
selection of an Accounting Referee, then the Accounting Referee shall be any office or branch of
the public accounting firm of PricewaterhouseCoopers LLP. The Accounting Referee shall resolve any
such disagreements as specified in the notice within 30 days of appointment; provided, however,
that no Party shall be required to deliver any document or take any other action pursuant to this
Section 6.11 if it determines that such action would result in the waiver of any legal privilege or
any detriment to its business. Any resolution of an issue submitted to the Accounting Referee
shall be final and binding on the Parties hereto without further recourse. The Parties shall share
the costs and fees of the Accounting Referee equally.

          6.12 Confidentiality. Except to the extent required to protect a Party’s interests in a Tax
Controversy, each Party shall hold and shall cause its consultants and advisors to hold in strict
confidence, unless compelled to disclose by judicial or administrative process or, in the opinion
of its counsel, by other requirements of law, all information (other than any such information
relating solely to the business or affairs of such Party) concerning another Party or its
representatives pursuant to this Agreement (except to the extent that such information can be shown
to have been (i) previously known by the Party to which it was furnished, (ii) in the public domain
through no fault of such Party or (iii) later lawfully acquired from other sources by the Party to
which it was furnished), and each Party shall not release or disclose such information to any other
person, except its auditors, attorneys, financial advisors, bankers and other consultants and
advisors who shall be advised of the provisions of this Agreement. Each Party shall be deemed to
have satisfied its obligation to hold confidential information concerning or supplied by another
Party if it exercises the same care as it takes to preserve confidentiality for its own similar
information.

11

 

          6.13 Costs, Expenses and Attorneys’ Fees. Except as expressly set forth in this Agreement,
each Party shall bear its own costs and expenses incurred pursuant to this Agreement. In the event
a Party to this Agreement brings an action or proceeding for the breach or enforcement of this
Agreement, the prevailing party in such action, proceeding or appeal, whether or not such action,
proceeding or appeal proceeds to final judgment, shall be entitled to recover as an element of its
costs, and not as damages, such reasonable attorneys’ fees as may be
awarded in the action, proceeding or appeal in addition to whatever other relief the
prevailing party may be entitled. For purposes of this Section 6.13, the “prevailing party” shall
be the Party who is entitled to recover its costs; a Party not entitled to recover its costs shall
not recover attorneys’ fees. No sum for attorneys’ fees shall be counted in calculating the amount
of the judgment for purposes of determining whether a Party is entitled to recover its costs or
attorneys’ fees.

          6.14 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute one and the same
instrument.

          6.15 Severability. The Parties hereby agree that, if any provision of this Agreement should
be adjudicated to be invalid or unenforceable, such provision shall be deemed deleted herefrom with
respect, and only with respect, to the operation of such provision in the particular jurisdiction
in which such adjudication was made, and only to the extent of the invalidity, and any such
invalidity or unenforceability in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. All other remaining provisions of this
Agreement shall remain in full force and effect for the particular jurisdiction and all other
jurisdictions.

          6.16 Entire Agreement.

               (a) This Agreement contains the entire agreement between the Parties with respect to the
subject matter hereof and supersedes all other agreements, whether or not written, in respect of
any Tax between the OTA Group and the Partnership Group.

               (b) In the event of any conflict or inconsistency between the provisions of this Agreement and
the provisions of any other agreement between the OTA Group and the Partnership Group, the
provisions of this Agreement shall take precedence and to such extent shall be deemed to supersede
such conflicting provisions under the other agreement.

          6.17 Assignment. This Agreement is being entered into by OTA and the Partnership on behalf of
themselves and each member of the OTA Group and the Partnership Group. This Agreement shall
constitute a direct obligation of each such member and shall be deemed to have been readopted and
affirmed on behalf of any entity that becomes a member of the OTA Group or the Partnership Group in
the future. Each of OTA and the Partnership hereby guarantee the performance of all actions,
agreements and obligations provided for under this Agreement of each member of the OTA Group and
the Partnership Group, respectively. Each of OTA and the Partnership shall, upon the written
request of the other, cause any of their respective group members to formally execute this
Agreement. This Agreement shall be binding upon, and shall inure to the benefit of, the
successors, assigns and persons controlling any of the entities bound

12

 

hereby for so long as such
successors, assigns or controlling persons are members of the OTA Group or the Partnership Group or
their successors and assigns.

          6.18 Fair Meaning. This Agreement shall be construed in accordance with its fair meaning and
shall not be construed strictly against the drafter.

          6.19 Titles and Headings. Titles and headings to sections herein are inserted for the
convenience of reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.

          6.20 Construction. In this Agreement, unless the context otherwise requires, the terms
“herein,” “hereof” and “hereunder” refer to this Agreement.

[Signature Page Follows]

13

 

          IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Agreement as of the
day and year first above written.

	 	 	 	 	 	 	 

	 	 	OILTANKING HOLDING AMERICAS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Carlin G. Conner
 

	 	 
	 

	 	Name:
	 	Carlin G. Conner	 	 
	 

	 	Title:
	 	President	 	 
	 
	 	 	 	 	 	 
	 	 	OILTANKING PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	OTLP GP, LLC,

its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Carlin G. Conner
 

	 	 
	 

	 	Name:
	 	Carlin G. Conner	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 

Signature Page to Tax Sharing Agreement

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