Delaware | 1-36232 | 90-1006559 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
One Valero Way San Antonio, Texas | 78249 | |
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
• | Houston Terminal. Valero Houston operates a crude oil, intermediates, and refined petroleum products terminal that supports Valero’s Houston, Texas refinery (the Houston Terminal). The terminal is located on the Houston ship channel and has storage tanks with 3.6 million barrels of storage capacity. |
• | St. Charles Terminal. Valero Louisiana operates a crude oil, intermediates, and refined petroleum products terminal that supports Valero’s St. Charles Refinery located in Norco, Louisiana (the St. Charles Terminal). The terminal is located on the Mississippi River and has storage tanks with 10 million barrels of storage capacity. |
• | the indemnification obligations of Valero and the Partnership under the Omnibus Agreement were extended to apply to the Houston Terminal and the St. Charles Terminal in substantially the same manner as the assets acquired by the Partnership in its initial public offering; |
• | the annual administrative fee payable by the Partnership was increased from $9.3 million per year to $10.4 million per year. The increase in the fee of $1.1 million will be prorated for the remainder of 2015 based on the number of days from March 1, 2015 to December 31, 2015; and |
• | the grant to Valero of a right of first refusal with respect to the Houston Terminal and the St. Charles Terminal. |
• | Houston Terminal. The Partnership will charge Valero for terminaling services at the Houston Terminal. Valero will pay a fee of $0.227 per barrel for throughput volumes up to 315,921 barrels per day and $0.05 per barrel for throughput volumes in excess of 315,921 barrels per day. Valero will be obligated to deliver for throughput a quarterly average of at least 300,000 barrels per day at the terminal. |
• | St. Charles Terminal. The Partnership will charge Valero for terminaling services at the St. Charles Terminal. Valero will pay a fee of $0.516 per barrel for throughput volumes up to 435,695 barrels per day and $0.05 per barrel for throughput volumes in excess of 435,695 barrels per day. Valero will be obligated to deliver for throughput a quarterly average of at least 390,000 barrels per day at the terminal. |
Exhibit No. | Description | |
10.01 | Contribution Agreement, dated March 1, 2015, by and among Valero Refining-New Orleans, L.L.C., Valero Terminaling and Distribution Company, and Valero Energy Partners LP. | |
10.02 | Amended and Restated Omnibus Agreement, dated July 1, 2014, by and among Valero Energy Corporation, Valero Marketing and Supply Company, Valero Terminaling and Distribution Company, The Premcor Refining Group Inc., The Premcor Pipeline Co., Valero Energy Partners LP, Valero Energy Partners GP LLC, Valero Partners Operating Co. LLC, Valero Partners EP, LLC, Valero Partners Lucas, LLC, Valero Partners Memphis, LLC, Valero Partners North Texas, LLC, Valero Partners South Texas, LLC and Valero Partners Wynnewood, LLC - incorporated by reference to Exhibit 10.2 to the Partnership’s Current Report on Form 8-K dated July 1, 2014, and filed July 1, 2014 (SEC File No. 1-36232). | |
10.03 | Amendment and Restatement of Schedules to Amended and Restated Omnibus Agreement, dated March 1, 2015, by and among Valero Energy Corporation, Valero Marketing and Supply Company, Valero Partners Memphis, LLC, Valero Terminaling and Distribution Company, The Premcor Refining Group Inc., The Premcor Pipeline Co., Valero Energy Partners LP, Valero Energy Partners GP LLC, Valero Partners Operating Co. LLC, Valero Partners EP, LLC, Valero Partners Lucas, LLC, Valero Partners North Texas, LLC, Valero Partners South Texas, LLC, Valero Partners Wynnewood, LLC, Valero Partners Houston, LLC and Valero Partners Louisiana, LLC. | |
10.04 | Amended and Restated Services and Secondment Agreement, dated March 1, 2015, by and among Valero Services, Inc., Valero Refining Company-Tennessee, L.L.C., Valero Refining-Texas, L.P., and Valero Energy Partners GP LLC. | |
10.05 | Master Terminal Services Agreement, dated December 16, 2013, by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company - incorporated by reference to Exhibit 10.7 to the Partnership’s Current Report on Form 8-K dated December 16, 2013, and filed December 20, 2013 (SEC File No. 1-36232). |
10.06 | Terminal Services Schedule (Houston Terminal), dated March 1, 2015, by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company. | |
10.07 | Terminal Services Schedule (St. Charles Terminal), dated March 1, 2015, by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company. | |
10.08 | Lease and Access Agreement dated as of March 1, 2015, between Valero Refining-Texas, L.P. and Valero Partners Houston, LLC. | |
10.09 | Lease and Access Agreement dated as of March 1, 2015, between Valero Refining-New Orleans, L.L.C. and Valero Partners Louisiana, LLC. | |
10.10 | Subordinated Credit Agreement dated as of March 2, 2015, by and between Valero Energy Partners LP and Valero Energy Corporation and the parties named therein. | |
23.1 | Consent of KPMG LLP, independent registered public accounting firm. | |
99.1 | Audited historical combined financial statements of the Houston and St. Charles Terminal Services Business as of and for the years ended December 31, 2014 and 2013, together with the related notes to the combined financial statements. | |
99.2 | Unaudited pro forma consolidated financial statements of Valero Energy Partners LP as of December 31, 2014 and for each of the years in the three-year period ended December 31, 2014, together with the related notes to the unaudited pro forma consolidated financial statements. | |
VALERO ENERGY PARTNERS LP | |||
(Registrant) | |||
By: | Valero Energy Partners GP LLC, | ||
its general partner | |||
Date: | March 5, 2015 | By: | /s/ Donna M. Titzman |
Donna M. Titzman | |||
Senior Vice President, Chief Financial Officer, | |||
and Treasurer | |||
(Principal Financial and Accounting Officer) |
ARTICLE I DEFINED TERMS | 1 | |
1.1 | Defined Terms | 1 |
ARTICLE II Contributions | 8 | |
2.1 | Contributions | 8 |
2.2 | Consideration and General Partner Unit Issuance | 8 |
2.3 | Proration of Certain Taxes | 8 |
2.4 | Certain Adjustments | 9 |
ARTICLE III CLOSING | 10 | |
3.1 | Closing | 10 |
3.2 | Deliveries by the Contributors | 10 |
3.3 | Deliveries by the Partnership | 11 |
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS | 11 | |
4.1 | Organization; Ownership; Preemptive Rights | 11 |
4.2 | Authorization | 12 |
4.3 | No Conflicts or Violations; No Consents or Approvals Required | 13 |
4.4 | Absence of Litigation; Compliance with Law | 13 |
4.5 | Bankruptcy | 13 |
4.6 | Brokers and Finders | 14 |
4.7 | Tax Matters | 14 |
4.8 | Title to and Condition of Assets | 14 |
4.9 | Financial Matters | 15 |
4.10 | No Adverse Changes | 15 |
4.11 | Environmental Matters | 15 |
4.12 | Contracts | 15 |
4.13 | Employees | 16 |
4.14 | Investment Company Act | 16 |
4.15 | Acquisition as Investment | 16 |
4.16 | Conflicts Committee Matters | 16 |
4.17 | Opportunity for Independent Investigation | 17 |
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP | 17 | |
5.1 | Organization | 17 |
5.2 | Authorization | 17 |
5.3 | Validly Issued Units | 17 |
5.4 | No Conflicts or Violations; No Consents or Approvals Required | 18 |
5.5 | Absence of Litigation | 18 |
5.6 | Brokers and Finders | 18 |
5.7 | Opportunity for Independent Investigation | 18 |
5.8 | Acquisition as Investment | 18 |
ARTICLE VI COVENANTS | 19 | |
6.1 | Additional Agreements | 19 |
6.2 | Further Assurances | 19 |
6.3 | Cooperation on Tax Matters | 19 |
6.4 | Cooperation for Litigation and Other Actions | 20 |
6.5 | Retention of and Access to Books and Records | 20 |
6.6 | Tanks Under Construction | 21 |
6.7 | NYSE | 21 |
ARTICLE VII INDEMNIFICATION | 21 | |
7.1 | Indemnification | 21 |
7.2 | Defense of Third-Party Claims | 21 |
7.3 | Direct Claims | 22 |
7.4 | Limitations | 23 |
7.5 | Remedies Under Ancillary Documents | 23 |
7.6 | Tax Related Adjustments and Tax Reporting of Transactions | 23 |
7.7 | Express Negligence Rule | 24 |
ARTICLE VIII MISCELLANEOUS | 24 | |
8.1 | WAIVERS AND DISCLAIMERS | 24 |
8.2 | Expenses | 25 |
8.3 | Notices | 25 |
8.4 | Severability | 26 |
8.5 | Governing Law | 26 |
8.6 | Confidentiality | 26 |
8.7 | Parties in Interest | 27 |
8.8 | Assignment of Agreement | 27 |
8.9 | Captions | 27 |
8.10 | Counterparts | 27 |
8.11 | Integration | 28 |
8.12 | Amendment; Waiver | 28 |
ARTICLE IX INTERPRETATION | 28 | |
9.1 | Interpretation | 28 |
9.2 | References, Gender, Number | 29 |
Exhibits: | ||
Exhibit A | — | Amended and Restated Omnibus Agreement Schedules |
Exhibit B | — | Terminaling Services Schedule (Houston Terminal) |
Exhibit C | — | Terminaling Services Schedule (St. Charles Terminal) |
Exhibit D-1 | — | Houston Lease Agreement |
Exhibit D-2 | — | St. Charles Lease Agreement |
Exhibit E | — | Assignment Document |
Exhibit F | — | Amended and Restated Services and Secondment Agreement |
Exhibit G | — | Intercompany Loan Agreement |
Exhibit H-1 | — | Houston Assignment |
Exhibit H-2 | — | St. Charles Assignment |
VALERO REFINING-NEW ORLEANS, L.L.C. | VALERO TERMINALING AND DISTRIBUTION COMPANY | ||||||
By: | /s/ R. Lane Riggs | By: | /s/ R. Lane Riggs | ||||
Name: R. Lane Riggs Title: Executive Vice President | Name: R. Lane Riggs Title: Executive Vice President | ||||||
VALERO ENERGY PARTNERS LP | |||||||
By: Valero Energy Partners GP LLC, as the General Partner of Valero Energy Partners LP | |||||||
By: | /s/ Richard F. Lashway | ||||||
Name: Richard F. Lashway Title: President and Chief Operating Officer |
ASSIGNORS: VALERO REFINING-NEW ORLEANS, L.L.C. | |
By: | /s/ J. Stephen Gilbert |
Name: | J. Stephen Gilbert |
Title: | Senior Vice President and Secretary |
VALERO TERMINALING AND DISTRIBUTION COMPANY | |
By: | /s/ J. Stephen Gilbert |
Name: | J. Stephen Gilbert |
Title: | Senior Vice President and Secretary |
GENERAL PARTNER: VALERO ENERGY PARTNERS GP LLC | |
By: | /s/ Richard F. Lashway |
Name: | Richard F. Lashway |
Title: | President and Chief Operating Officer |
ASSIGNEE: VALERO ENERGY PARTNERS LP By: VALERO ENERGY PARTNERS GP LLC, as general partner of Valero Energy Partners LP | |
By: | /s/ Donna M. Titzman |
Name: | Donna M. Titzman |
Title: | Senior Vice President, CFO and Treasurer |
VALERO ENERGY CORPORATION By: /s/ R. Lane Riggs Name: R. Lane Riggs Title: Executive Vice President - Refining Operations and Engineering | VALERO MARKETING AND SUPPLY COMPANY By: /s/ R. Lane Riggs Name: R. Lane Riggs Title: Executive Vice President |
VALERO TERMINALING AND DISTRIBUTION COMPANY By: /s/ R. Lane Riggs Name: R. Lane Riggs Title: Executive Vice President | THE PREMCOR REFINING GROUP INC. By: /s/ R. Lane Riggs Name: R. Lane Riggs Title: Executive Vice President |
THE PREMCOR PIPELINE CO. By: /s/ R. Lane Riggs Name: R. Lane Riggs Title: Executive Vice President | VALERO ENERGY PARTNERS LP By: Valero Energy Partners GP LLC, its general partner By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer |
VALERO ENERGY PARTNERS GP LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer | VALERO PARTNERS OPERATING CO. LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer |
VALERO PARTNERS EP, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer | VALERO PARTNERS LUCAS, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer |
VALERO PARTNERS MEMPHIS, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer | VALERO PARTNERS NORTH TEXAS, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer |
VALERO PARTNERS SOUTH TEXAS, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer | VALERO PARTNERS WYNNEWOOD, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer |
VALERO PARTNERS LOUISIANA, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer | VALERO PARTNERS HOUSTON, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer |
1. | As it relates to the Lucas Terminal and the West Memphis Terminal: |
(a) | Valero shall indemnify the Partnership Group for the remediation of, other corrective actions required with respect to, and other Losses (if any) arising out of any Hazardous Substances on, under, about or migrating from the Lucas Terminal or the West Memphis Terminal prior to December 16, 2013 (collectively, “Existing Contamination Liabilities”) with respect to which Valero, prior to December 16, 2013 (i) received indemnification from a third party pursuant to a written agreement (an “Indemnification Agreement”), or (ii) placed a third party on notice that Valero believes such third party is legally liable (whether such liability arises by contract, statute, common law or otherwise); provided that such indemnification of the Partnership by Valero shall apply only if and to the extent that Valero is actually able to secure payment or performance by the third party with respect to the Existing Contamination Liabilities; and |
(b) | As between Valero and the Partnership Group, Valero shall retain responsibility for Existing Contamination Liabilities to the extent, and only to the extent that Valero is actually able to secure payment or performance by a third party with respect to the Existing Contamination Liabilities as provided in paragraph (a) above. |
(c) | The obligations of Valero under paragraphs (a) and (b) above are subject to the satisfaction of each of the following conditions, the failure of any one or more of which shall excuse Valero from its obligations, to the extent it is prejudiced thereby: |
2. | As it relates to the Houston Terminal Assets and St. Charles Terminal Assets: |
(a) | For the following Houston Tanks and St. Charles Tanks (the “Scheduled A Tanks”): |
(b) | For the following St. Charles Tanks (the “Scheduled B Tanks”): |
(c) | For purposes of this Schedule, the following terms shall have the means set forth below: |
3. | As it relates to the St. Charles Terminal Assets and the Houston Terminal Assets, |
(a) | The Parties acknowledge that certain Facility Pipelines and Refinery Pipelines (as those terms are defined in the St. Charles Lease and the Houston Lease) may be buried below ground. Valero by and through its Subsidiaries as the property owner or for other logistical or environmental reasons may, in its or their sole discretion, desire to relocate all or portions of those buried Facility Pipelines and Refinery Pipelines above ground. If Valero by and through its Subsidiaries desires to relocate all or portions of any buried Facility Pipelines or Refinery Pipelines above ground, Valero by and through its Subsidiaries shall give the Partnership Group written notice that it desires to raise certain sections of the Facility Pipelines and Refinery Pipelines and the Partnership Group and Valero by and through its Subsidiaries shall work together to set a schedule for such work. The cost of raising the Facility Pipelines and Refinery Pipelines shall be borne exclusively by Valero or its applicable Subsidiary performing the work. |
(b) | Partnership Group may also desire that certain of the buried Facility Pipelines be brought above ground. In its sole discretion, Partnership Group may give notice to Valero or its applicable Subsidiary that it intends to raise certain sections of the Facility Pipelines and the Partnership Group and Valero by and through its Subsidiaries shall work together to set a schedule for such work and all such work shall be performed in compliance with the terms of the St. Charles Lease or the Houston Lease, as applicable. In this case, the cost of raising the Facility Pipelines shall be borne exclusively by the Partnership Group or its applicable Subsidiary performing the work. |
(c) | Until such time as the buried Facility Pipelines and Refinery Pipelines are raised above grade, there shall be a rebuttable presumption that any contamination found in connection with such buried Facility Pipelines and Refinery Pipelines occurred prior to the Closing Date and the liability for such contamination will remain with Valero and Valero shall indemnify, defend and hold harmless each Group Member from any Losses related to such retained liability. Valero may rebut this presumption by establishing by clear and convincing evidence that the contamination resulted from the Partnership Group operations. |
4. | As it relates to the St. Charles Terminal Assets and the Houston Terminal Assets, Valero, by and through its applicable Subsidiary, operates groundwater monitoring and remedial systems at the St. Charles Refinery and the Houston Refinery and will retain the liability for contamination existing as of the Closing Date remediated through these systems and the obligation to maintain these existing systems until such time as the relevant Governmental Authority grants closure in writing or the Partnership Group and Valero mutually agree that further operation is not necessary. Valero shall indemnify, defend and hold harmless each Group Member from any Losses related to such retained liability; provided, however, in the event that the Partnership Group has a release to the environment after the Closing Date and this release has a material adverse impact on the existing remedial system or triggers new remedial obligations, the Partnership Group shall reimburse Valero for the additional costs incurred as a result of the post-closure release. |
5. | From time to time environmental and safety obligations may arise that the parties had not anticipated. The Partnership Group and Valero agree to cooperate and in good faith to fairly allocate the liabilities and to work cooperatively to minimize the cost of addressing any such environmental and safety obligations. |
• | Accounting Governance |
• | Corporate Accounting |
• | Internal and External Reporting |
• | Federal income tax services |
• | Operations Accounting |
• | State and local tax services |
• | Transactional tax services |
• | Acquisitions & Divestitures |
• | Commercial |
• | Corporate |
• | Environmental |
• | Labor & Employment |
• | Litigation support |
• | Procurement / General Contracting |
• | Regulatory |
• | Tariff Maintenance |
• | Clinic |
• | Health Club |
• | Mail Center/ Mail Services |
• | Office Space including building maintenance |
• | Security |
• | Finance Services |
• | Cash Management |
• | Credit Services |
ROFO Asset | ROFO Asset Owner |
Parkway Products Pipeline* | Valero Terminaling and Distribution Company |
Hartford Crude Terminal | The Premcor Refining Group Inc. |
Fannett Storage Facility | The Premcor Pipeline Co. |
ROFR Asset | ROFT Asset Owner |
McKee Products System*† | Valero Partner EP, LLC |
Memphis truck rack* | Valero Partners Memphis, LLC |
Lucas Crude System* | Valero Partners Lucas, LLC |
McKee Crude System** | Valero Partners North Texas, LLC |
Three Rivers Crude System** | Valero Partners South Texas, LLC |
Wynnewood Products System** | Valero Partners Wynnewood, LLC |
Houston Terminal Assets*** | Valero Partners Houston, LLC |
St. Charles Terminal Assets*** | Valero Partners Louisiana, LLC |
Depiction | Mark | Goods/Services | Status | Application Number | Reg. Number | Reg. Date | Applicant |
V Valero Energy Partners LP & Design | Storage, distribution, transportation, shipping and delivery of oil, products derived from oil, renewable fuels such as ethanol and bio-diesel, and other hydrocarbon-based products via pipelines, trucks, railcars, and marine vessels (IC 39) | Application – Intent to Use, filing date August 9, 2013 | Serial Number 86033483 | 4594277 | 8/26/14 | Valero Energy Partners GP LLC |
Depiction | Mark | Goods/Services | Status | Application Number | Reg. Number | Reg. Date | Applicant |
VALERO | VALERO (word mark) | Storage, distribution, transportation, shipping and delivery of oil, products derived from oil, renewable fuels such as ethanol and bio-diesel, and other hydrocarbon-based products via pipelines, trucks, railcars, and marine vessels (IC 39) | Application – Use in commerce, filing date August 1, 2013 | Serial Number 86026506 | 4494828 | 3/11/14 | Valero Marketing and Supply Company |
Depiction | Mark | Goods/Services | Status | Application Number | Reg. Number | Reg. Date | Applicant |
V Valero & Design | Storage, distribution, transportation, shipping and delivery of oil, products derived from oil, renewable fuels such as ethanol and bio-diesel, and other hydrocarbon-based products via pipelines, trucks, railcars, and marine vessels (IC 39) | Application – Use in commerce, filing date August 7, 2013 | Serial Number 86031469 | 4494933 | 3/11/14 | Valero Marketing and Supply Company | |
V & Design | Storage, distribution, transportation, shipping and delivery of oil, products derived from oil, renewable fuels such as ethanol and bio-diesel, and other hydrocarbon-based products via pipelines, trucks, railcars, and marine vessels (IC 39) | Application – Use in commerce, filing date August 5, 2013 | Serial Number 86028938 | 4494906 | 3/11/14 | Valero Marketing and Supply Company |
1. | Contribution, Conveyance and Assumption Agreement, dated as of December 16, 2013, by and among the General Partner, the Partnership, Valero, OLLC, VTDC, Premcor Pipeline, Premcor Refining and Valero Refining Company-Tennessee, L.L.C. |
Closing Date | Identification Deadline | Environmental De Minimis Loss | Environmental Deductible | Right-of-Way Deductible | Other Losses Deductible |
December 16, 2013 | December 16, 2018 | $10,000 | $100,000 | $200,000 | $200,000 |
2. | Purchase and Sale Agreement, dated as of July 1, 2014, by and among The Shamrock Pipe Line Corporation, Valero Plains Company LLC, VTDC, Valero Partners North Texas, LLC, Valero Partners South Texas, LLC and Valero Partners Operating Co. LLC. |
Closing Date | Identification Deadline | Environmental De Minimis Loss | Environmental Deductible | Right-of-Way Deductible | Other Losses Deductible |
July 1, 2014 | July 1, 2019 | $10,000 | $100,000 | $200,000 | $200,000 |
3. | Contribution Agreement, dated as of March 1, 2015, by and among Valero Terminaling and Distribution Company, Valero Refining-New Orleans, L.L.C. and Valero Energy Partners LP. |
Closing Date | Identification Deadline | Environmental De Minimis Loss | Environmental Deductible | Right-of-Way Deductible | Other Losses Deductible |
March 1, 2015 | March 1, 2020 | $10,000 | $100,000 | $200,000 | $200,000 |
(b) | such end date for any Seconded Employees as may be mutually agreed by the Parties (the “End Date”); |
(c) | a withdrawal, departure, resignation or termination of such Seconded Employees under Section 2.3; and |
(d) | a termination of Secondment of such Seconded Employees under Section 2.4. |
(a) | be ultimately and fully responsible for the daily work assignments of the Seconded Employees (and with respect to Shared Seconded Employees, during those times that the Shared Seconded Employees are performing services for GP hereunder), including supervision of their day-to-day work activities and performance consistent with the job functions associated with the Operational Services; |
(b) | set the hours of work and the holidays and vacation schedules (other than with respect to Shared Seconded Employees, as to which GP and the Operators shall jointly determine) for Seconded Employees; and |
(c) | have the right to determine training that will be received by the Seconded Employees. |
(a) | salary and wages (including payroll and withholding taxes associated therewith); |
(b) | cash bonuses; |
(c) | costs of matching and other employer 401(k) contributions; |
(d) | costs of pension benefit accruals; |
(e) | any cash expense associated with any deferred compensation plan; |
(f) | vacation, sick leave, personal leave, maternity leave and any other federal or state mandated leave; |
(g) | healthcare coverage, including medical, dental, vision and prescription drug coverage; |
(h) | flexible benefits plan, including medical care and dependent care expense reimbursement programs; |
(i) | short-term disability benefits and long-term disability insurance premiums; |
(j) | workers’ compensation insurance; |
(k) | premiums for life insurance, accidental death and dismemberment insurance and any other insurance provided to the Seconded Employees by the Operators; |
(l) | the vesting of any long-term incentive awards, whether granted before or during the Period of Secondment; |
(m) | Termination Costs; |
(n) | business travel expenses and other business expenses reimbursed in the normal course by the Operators, such as subscriptions to business-related periodicals and dues to professional business organizations; |
(o) | any other employee benefit or compensation arrangement customarily provided to all employees by the Operators for which the Operators incur costs with respect to Seconded Employees; and |
(p) | any sales taxes imposed upon the provision of any taxable services provided under this Agreement; provided, however, that, GP and the Operators contemplate that the |
(a) | Termination Costs with respect to any Shared Seconded Employee shall be allocated between the Parties based upon the Allocation Percentage, provided that the Parties agree in advance to terminate such Shared Seconded Employee; otherwise, a Party who terminates a Shared Seconded Employee without first consulting with the other Party (including an actual or alleged constructive termination) shall be solely responsible for all Termination Costs related to such termination, other than any Termination Costs arising solely out of the gross negligence or willful misconduct of the other Party; |
(b) | travel expenses and other expenses incurred with respect to and/or reimbursable to a Shared Seconded Employee shall be paid by the Party for whom the Shared Seconded Employee was working at the time they were incurred, except that expenses related to activities that benefit both GP and the Employing Operator (e.g. some types of training) shall be shared by the affected Parties in accordance with the Allocation Percentage (or such other allocation as may be agreed between the affected Parties); and |
(c) | the taxes described in Section 3.2(p) shall be reimbursable in full by GP. |
By: /s/ R. Lane Riggs | |
Name: | R. Lane Riggs |
Title: | Executive Vice President |
By /s/ R. Lane Riggs | |
Name: | R. Lane Riggs |
Title: | Executive Vice President |
By: | Valero Tejas Company LLC, its |
general partner |
By: /s/ R. Lane Riggs | |
Name: | R. Lane Riggs |
Title: | Executive Vice President |
By /s/ Richard F. Lashway | |
Name: | Richard F. Lashway |
Title: | President and Chief Operating Officer |
Operators: | Asset Owners: | ||
VRTC | Valero Refining Company-Tennessee, L.L.C. | VMKS | Valero MKS Logistics, L.L.C. |
VRT | Valero Refining-Texas, L.P. | VPEP | Valero Partners El Paso, LLC |
VSI | Valero Services, Inc. | VPH | Valero Partners Houston, LLC |
VP Lucas | Valero Partners Lucas, LLC | ||
VP La. | Valero Partners Louisiana, LLC | ||
VPM | Valero Partners Memphis, LLC | ||
VPNT | Valero Partners North Texas, LLC | ||
VPP | Valero Partners PAPS, LLC | ||
VPST | Valero Partners South Texas, LLC | ||
VPW | Valero Partners Wynnewood, LLC | ||
VPWM | Valero Partners West Memphis, LLC |
Asset | Asset Owner | Service Date | Employing Operator | Fee Structure |
Terminals, Offices and Truckhauls | ||||
Lucas Terminal 9405 West Port Arthur Road Beaumont, TX 77705 | VP Lucas | Dec. 16, 2013 | VSI | Pass Through |
West Memphis Terminal 1282 South 8th St. West Memphis, AR 72301 | VPWM | Dec. 16, 2013 | VSI | Pass Through |
Collierville Terminal 772 Wingo Road Byhalia, MS 38611 | VMKS | Dec. 16, 2013 | VRCT | Pass Through |
Memphis Truck Terminal 321 West Mallory Ave. Memphis, TN 38109 | VPM | Dec. 16, 2013 | VRCT | Pass Through |
Wynnewood System: Wynnewood Terminal Murray County, OK | VPW | July 1, 2014 | VSI | Pass Through |
Three Rivers Crude System: CR 422 Crude Oil Terminal Live Oak County, Texas Three Rivers Pipeline Office Live Oak County, Texas Three Rivers Meter Site Live Oak County, Texas | VPST | July 1, 2014 | VSI | Pass Through |
McKee Crude System: Clawson Station Hansford County, TX Coble Station Hutchinson County, TX Farnsworth Station Ochiltree County, TX Follett Station Lipscomb County, TX Frass Station Lipscomb County, TX | VPNT | July 1, 2014 | VSI | Pass Through |
Glazier Station Lipscomb County, TX Gruver Station Hansford County, TX Hitchland Station Hansford County, TX Hooker Station Texas County, OK McKee Station Moore County, TX McKee Valve & Meter Site and 8” Pipeline Moore County, TX Merten Station Gray County, TX Perryton Office & Pipe Yard Ochiltree County, Texas Perryton Station (Nos. 1, 2, 3 and 4) Ochiltree County, TX Piper Station (Nos. 1,2 and 3) Lipscomb County, TX Sunray Pump Station Sherman County, TX Tubbs Station Lipscomb County, TX Turpin Terminal Beaver County, OK Waka Station Ochiltree County, TX | ||||
St. Charles Terminal - Located in Norco, Louisiana | VP La. | March 1, 2015 | VSI | Flat Fee of $11,067,000 per calendar year |
Houston Terminal - Located in Houston, Texas | VPH | March 1, 2015 | VRT | Flat Fee of $6,323,000 per calendar year |
Pipelines | ||||
Port Arthur System: Nederland pipeline: A five-mile, 32-inch pipeline that delivers crude oil to the Lucas terminal from the Sunoco Logistics Nederland marine terminal. Lucas pipeline: A 12-mile, 30-inch pipeline that delivers crude oil from the Lucas terminal to the Valero Port Arthur refinery (1801 South Gulfway Dr., Port Arthur, Texas 77640). PAPS 20” Pipeline: A three-mile, 20-inch pipeline that delivers diesel from the Port Arthur refinery to the PAPS terminal. El Vista 20” Pipeline: A four-mile, 20-inch pipeline that delivers gasoline from the Port Arthur refinery to the El Vista terminal. 12-10 pipeline: An approximately 13 mile, 12-inch and 10-inch pipeline that delivers refined petroleum products from the Port Arthur refinery to the Enterprise TE Products pipeline connection, the Sunoco Logistics MagTex pipeline connection at their Hebert Terminal (15651 West Port Arthur Rd. Beaumont, TX 77705) and Oiltanking’s Beaumont marine terminal (6275 Highway 347 Beaumont TX 77705). | VP Lucas VP Lucas VPP VPP VPP | Dec. 16, 2013 | VSI | Pass Through |
Memphis System Collierville pipeline: Approximately 52 miles of 10- to 20-inch pipelines that deliver crude oil to the Valero Memphis refinery (543 West Mallory Ave., Memphis, Tennessee 38109) from the Collierville terminal. Shorthorn pipeline: Approximately seven miles of 14-inch pipeline that delivers diesel and gasoline produced at the Valero Memphis refinery to the West Memphis terminal, and two miles of 12-inch pipeline that delivers diesel and gasoline from the West Memphis terminal and the Valero Memphis refinery to Exxon’s Memphis refined petroleum products terminal (454 Wisconsin Ave., Memphis, TN 38106). | VMKS | Dec. 16, 2013 | Pass Through |
Memphis Airport pipeline system: A nine-mile, six-inch pipeline that delivers jet fuel produced at the Valero Memphis refinery to the Swissport Fueling, Inc. terminal (2491 Winchester Rd., Memphis, Tennessee 38116) located at the Memphis International Airport and a two-mile, six-inch pipeline that delivers jet fuel from the Valero Memphis refinery to the FedEx jet fuel terminal (2903 Sprankle Ave, Memphis, TN 38118) located at the Memphis International Airport | ||||
Wynnewood System: Wynnewood Pipeline. A twelve inch (12”) nominal diameter pipeline, approximately 30 miles in length, originating at the Valero Ardmore Refinery in Carter County, Oklahoma and terminating at the Valero Wynnewood Terminal in Murray County, Oklahoma | VPW | July 1, 2014 | VSI | Pass Through |
Three Rivers Crude System: CR 422 - Valero Ref #1-12. A twelve inch (12”) nominal diameter pipeline, approximately 3,225 feet / 0.61 miles in length, originating at the Valero CR 422 crude oil facility and terminating the Valero Three Rivers Refinery in Live Oak County, Texas. CR 422 - Valero Ref #2-12. A twelve inch (12”) nominal diameter pipeline, approximately 3,064 feet / 0.58 miles in length, originating at the Valero CR 422 crude oil facility and terminating the Valero Three Rivers Refinery in Live Oak County, Texas. CR 422 - Valero Ref #3-12. A twelve inch (12”) nominal diameter pipeline, approximately 3,139 feet / 0.59 miles in length, originating at the Valero CR 422 crude oil facility and terminating the Valero Three Rivers Refinery in Live Oak County, Texas. | VPST | July 1, 2014 | VSI | Pass Through |
McKee Crude System: Tubbs 4” - A four inch (4”) nominal diameter pipeline, approximately 73,081 feet / 13.84 miles in length, originating at The Shamrock Pipe Line Corporation’s Tubbs Station in Lipscomb County, Texas and terminating at The Shamrock Pipe Line Corporation’s Tubbs /Citizens scrapper trap site in Lipscomb County, Texas. | VPTN | July 1, 2014 | VSI | Pass Through |
Citizens 6” - A six inch (6”) nominal diameter pipeline, approximately 48,762 feet / 9.24 miles in length, originating at The Shamrock Pipe Line Corporation’s Tubbs/Citizens scrapper trap site in Lipscomb County, Texas and terminating at The Shamrock Pipe Line Corporation’s Piper Station in Lipscomb County, Texas. | ||||
Lipscomb 6” - A six inch (6”) nominal diameter pipeline, approximately 258,838 feet / 49.02 miles in length, originating at Frass Station in Lipscomb County, Texas and terminating at The Shamrock Pipe Line Corporation’s Perryton Station in Ochiltree County, Texas. | ||||
Perryton-Waka 10” - A ten inch (10”) nominal diameter pipeline, approximately 80,135 feet / 15.18 miles in length, originating at The Shamrock Pipe Line Corporation’s Perryton Station in Ochiltree County, Texas and terminating at The Shamrock Pipe Line Corporation’s Waka Station in Ochiltree County, Texas. | ||||
Perryton-Waka 6” - A six inch (6”) nominal diameter pipeline, approximately 80,657 feet / 15.28 miles in length, originating at The Shamrock Pipe Line Corporation’s Perryton Station in Ochiltree County, Texas and terminating at The Shamrock Pipe Line Corporation’s Waka Station in Ochiltree County, Texas. | ||||
Waka-Gruver 8” - An eight inch (8”) nominal diameter pipeline, approximately 133,047 feet / 25.19 miles in length, originating at The Shamrock Pipe Line Corporation’s Waka Station in Ochiltree County, Texas and terminating at The Shamrock Pipe Line Corporation’s Gruver Station in Hansford County, Texas. | ||||
Gruver-Clawson 8” - An eight inch (8”) nominal diameter pipeline, approximately 1,497 feet / 0.28 miles in length, originating at The Shamrock Pipe Line Corporation’s Gruver Station in Hansford County, Texas and terminating at NuStar Logistics, L.P.’s Clawson Station in Hansford County, Texas. | ||||
Clawson-Gruver 6” - A six inch (6”) nominal diameter pipeline, approximately 1,069 feet / 0.20 miles in length, originating at NuStar Logistics, L.P.’s Clawson Station in Hansford County, Texas and terminating at The Shamrock Pipe Line Corporation’s Gruver Station in Hansford County, Texas. | ||||
Turpin-Gruver 6” - A six inch (6”) nominal diameter pipeline, approximately 304,313 feet / 57.64 miles in length, originating at Valero Plains Company LLC’s Turpin Terminal in Beaver County, Oklahoma and terminating at The Shamrock Pipe Line Corporation’s Gruver Station in Hansford County, Texas. | ||||
Gruver-McKee 6” - A six inch (6”) nominal diameter pipeline, approximately 157,609 feet / 29.85 miles in length, originating at The Shamrock Pipe Line Corporation’s Gruver Station in Hansford County, Texas and terminating at The Shamrock Pipe Line Corporation’s McKee scrapper trap site in Moore County, Texas. | ||||
McKee - McKee Refinery 8” - An eight inch (8”) nominal diameter pipeline, approximately 4,747 feet / 0.90 miles in length, originating at The Shamrock Pipe Line Corporation’s McKee scrapper trap site in Moore County, Texas and terminating at the Valero McKee Refinery in Moore County, Texas. | ||||
Turpin 6” (Hansford County, TX) - A six inch (6”) nominal diameter pipeline, approximately 5,899 feet / 1.12 miles in length, originating west of SH 15 in Hansford County, Texas and terminating south of FM 1262 in Hansford County, Texas. | ||||
Turpin 6” (Moore County, TX) - A six inch (6”) nominal diameter pipeline, approximately 5,280 feet / 1.0 miles in length, originating at The Shamrock Pipe Line Corporation’s McKee scrapper trap site in Moore County, Texas and terminating at the Valero McKee Refinery in Moore County, Texas. |
• | Oversight and management services as may be necessary in connection with these activities . |
• | Planning, design and engineering functions related to the activities. |
• | Procurement of all materials, equipment, services, supplies and labor necessary for and related to the activities. |
Operational: | VP Pipelines & Terminals |
Tel: (210) 345-4057 | |
Fax: (210) 370-4801 | |
Invoice: | Troy Heard, Supervisor Accounting |
Tel: (210) 345-3219 | |
Fax: (210) 370-4355 |
Operational: | VP & General Manager - Houston Refinery |
Tel: (713) 923-3585 | |
Fax: (713) 923-3399 | |
Invoice: | Troy Heard, Supervisor Accounting |
Tel: (210) 345-3219 | |
Fax: (210) 370-4355 |
By: /s/ Richard F. Lashway | |
Name: | Richard F. Lashway |
Title: | President and Chief Operating Officer |
By: /s/ R. Lane Riggs | |
Name: | R. Lane Riggs |
Title: | Executive Vice President |
Houston Tank Ref # | Shell Capacity (bbls) | Diameter | Year Built |
215 | 132,000 | 150 | 1960 |
234 | 150,000 | 150 | 2007 |
232 | 73,000 | 120 | 1992 |
211 | 179,000 | 165 | 2015 |
212 | 179,000 | 165 | 2015 |
205 | 150,000 | 150 | 2008 |
228 | 110,000 | 150 | 1975 |
507 | 150,000 | 150 | 2013 |
511 | 132,000 | 150 | 2006 |
505 | 80,000 | 125 | 1974 |
226 | 65,000 | 110 | 2005 |
204 | 55,000 | 90 | 2014 |
210 | 54,000 | 95 | 2008 |
230 | 41,000 | 100 | 1991 |
506 | 78,000 | 125 | 1975 |
225 | 75,000 | 120 | 1971 |
227 | 153,000 | 150 | 2013 |
1 | 236,000 | 210 | 1990 |
2 | 295,000 | 210 | 2012 |
3¹ | 146,000 | 190 | 1968 |
4 | 220,000 | 190 | 2009 |
6 | 220,000 | 210 | 1991 |
901 | 77,000 | 110 | 2007 |
233 | 73,000 | 120 | 1992 |
907 | 50,000 | 90 | 2006 |
915 | 69,000 | 95 | 2014 |
917 | 31,000 | 75 | 1969 |
920 | 31,000 | 72 | 2006 |
909 | 4,450 | 35 | 1961 |
927 | 55,000 | 90 | 2007 |
912 | 8,100 | 43 | 1961 |
913 | 8,100 | 43 | 2008 |
918 | 28,000 | 75 | 1968 |
921 | 32,000 | 72 | 2009 |
224 | 40,000 | 80 | 1970 |
231 | 102,000 | 123 | 2004 |
216 | 60,000 | 100 | 1960 |
5² | 215,000 | 220 | 1977 |
TOTAL | 3,641,650 |
Operational: | VP Pipelines & Terminals |
Tel: (210) 345-4057 | |
Fax: (210) 370-4801 |
Invoice: | Troy Heard, Supervisor Accounting |
Tel: (210) 345-3219 | |
Fax: (210) 370-4355 |
Operational: | VP & General Manager – St. Charles Refinery |
Tel: (985) 764-5868 | |
Fax: (985) 764-2359 |
Invoice: | Troy Heard, Supervisor Accounting |
Tel: (210) 345-3219 | |
Fax: (210) 370-4355 |
By: /s/ Richard F. Lashway | |
Name: | Richard F. Lashway |
Title: | President and Chief Operating Officer |
By: /s/ R. Lane Riggs | |
Name: | R. Lane Riggs |
Title: | Executive Vice President |
St. Charles Tank Ref # | Shell Capacity (bbls) | Diameter | Year Built |
150-22 | 150,000 | 165 | 1995 |
150-23 | 150,000 | 165 | 1996 |
325-5 | 325,000 | 220 | 2009 |
325-6 | 325,000 | 220 | 2009 |
225-1 | 225,000 | 180 | 2014 |
225-2 | 225,000 | 180 | 2014 |
325-1 | 325,000 | 270 | 1981 |
325-2 | 325,000 | 270 | 1981 |
325-3 | 325,000 | 270 | 1981 |
325-4 | 325,000 | 270 | 2005 |
150-1 | 150,000 | 164 | 2013 |
150-2 | 150,000 | 180 | 1957 |
150-27 | 150,000 | 165 | 1996 |
45-1 | 50,000 | 90 | 1996 |
45-2 | 50,000 | 90 | 1984 |
150-26 | 150,000 | 165 | 1996 |
150-5 | 150,000 | 183 | 1973 |
37-1 | 37,000 | 94 | 1975 |
78 | 15,000 | 60 | 1950 |
80-1 | 80,000 | 120 | 1951 |
55-1 | 55,000 | 100 | 1949 |
55-8 | 55,000 | 115 | 1978 |
150-6 | 150,000 | 183 | 2013 |
150-17 | 150,000 | 183 | 1980 |
55-5 | 55,000 | 100 | 1956 |
55-6 | 55,000 | 100 | 1956 |
425-2 | 425,000 | 280 | 1981 |
130-1 | 130,000 | 150 | 1954 |
130-3 | 130,000 | 150 | 1954 |
150-18 | 150,000 | 183 | 1979 |
150-19 | 150,000 | 183 | 1979 |
325-7 | 325,000 | 220 | 2012 |
625-2 | 625,000 | 306 | 2014 |
130-2 | 130,000 | 150 | 1954 |
130-5 | 130,000 | 150 | 1954 |
425-3 | 425,000 | 280 | 1981 |
425-4 | 425,000 | 270 | 1981 |
150-4 | 150,000 | 183 | 1973 |
150-20 | 150,000 | 183 | 1980 |
80-3 | 80,000 | 134 | 2007 |
80-4 | 80,000 | 134 | 1954 |
67-1 | 67,000 | 110 | NA |
180-9 | 180,000 | 160 | 2008 |
100-3 | 100,000 | 135 | 2014 |
150-7 | 150,000 | 183 | 1973 |
150-8 | 150,000 | 183 | 1973 |
130-8 | 130,000 | 170 | 1972 |
425-1 | 425,000 | 280 | 1981 |
625-1 | 625,000 | 320 | 1981 |
130-6 | 130,000 | 150 | 1995 |
150-24 | 150,000 | 165 | 1995 |
77 | 15,000 | 56 | 1940 |
81 | 25,000 | 75 | 1946 |
150-25 | 150,000 | 165 | 1995 |
TOTAL | 10,004,000 |
(a) | If subsequent to the date hereof increased quantities of any Lessor Services are reasonably required by Lessee in connection with its ownership, operation or maintenance of the Tank Farm Assets or any improvements or additions thereto, Lessor shall use commercially reasonable efforts to provide such increased quantities of such Lessor Services on the same terms and conditions set forth in Exhibit D, so long as the provision of such increased quantities does not interfere in any material respect with Lessor’s operations at the Refinery Site or require Lessor to make a capital improvement in order to provide such increased Lessor Services. If the provision by Lessor of increased quantities of any Lessor Services as requested by Lessee would require Lessor to make such a capital improvement, then Lessee may submit a request to Lessor. If increased quantities of any Lessor Services is requested by Lessee, and provided by Lessor, the Rent may be increased in accordance with Section 5.2 hereof. Notwithstanding anything to the contrary herein, in the event that (i) Lessee uses the Tank Farm Assets to provide services to third parties, (ii) Lessee’s provision of such third-party services results in a material increase of any Lessor Services required by Lessor Services, and (iii) provision of such Lessor Services is available to Lessee from third-party vendors on commercially reasonable terms, then Lessor may decline to provide such increased and additional Lessor Services. |
(b) | If subsequent to the date hereof Lessor Services not specifically described herein, but which are being produced or utilized by Lessor or its Affiliates in the normal course of their operations at the Refinery Site, are or become reasonably necessary to operate or maintain the Tank Farm Assets and any Improvements, Lessor shall use commercially reasonable efforts to provide such Lessor Services on terms and conditions consistent with the provision of the existing Lessor Services by Lessor. The Rent with respect to such additional Lessor Services may be increased in accordance with Section 5.2 hereof. |
(a) | FAILURE TO ANY EXTENT TO MAKE AVAILABLE, OR ANY SLOW-DOWN, STOPPAGE OR INTERRUPTION OF ANY LESSOR SERVICES DESCRIBED IN THIS ARTICLE 5 RESULTING FROM ANY CAUSE WHATSOEVER (OTHER THAN LESSOR’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) SHALL NOT RENDER LESSOR LIABLE IN ANY RESPECT FOR DAMAGES, NOR BE CONSTRUED AS AN EVICTION OF LESSEE (ACTUAL OR CONSTRUCTIVE) NOR RELIEVE LESSEE FROM FULFILLMENT OF ANY COVENANT OR AGREEMENT HEREOF. NEITHER LESSOR NOR ANY OF ITS LESSOR INDEMNIFIED PARTIES SHALL BE |
(b) | LESSEE ASSUMES ALL RISKS AND LIABILITIES IN CONNECTION WITH ITS USE OF ANY LESSOR SERVICES PROVIDED BY LESSOR PURSUANT TO THE TERMS OF THIS LEASE OTHER THAN TO THE EXTENT ARISING FROM LESSOR’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. LESSEE HAS NOT MADE, DOES NOT MAKE, AND SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS, OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE LESSOR SERVICES SO PROVIDED INCLUDING WITHOUT LIMITATION (A) THE NATURE, QUALITY, CHARACTER OR SUFFICIENCY OF FACILITIES AND EQUIPMENT UTILIZED TO SUPPLY THE LESSOR SERVICES TO LESSEE; (B) THE CONDITION OF THE LESSOR SERVICES; (C) ANY SPECIFIC PRESSURE OR VOLUME OF FIREWATER, IT BEING UNDERSTOOD THAT NO SUCH GUARANTEE IS PROVIDED BY LESSOR, AND THAT THERE MAY BE TIMES WHEN THE FIREWATER SERVICE TO EITHER OR BOTH THE TANKS AND THE REFINERY IS INTERRUPTED OR UNAVAILABLE, (D) THE COMPLIANCE OF OR BY THE LESSOR SERVICES WITH ANY APPLICABLE LAWS; (E) THE MERCHANTABILITY, OR FITNESS OF THE LESSOR SERVICES FOR A PARTICULAR PURPOSE; OR (F) ANY OTHER MATTER WITH RESPECT TO THE LESSOR SERVICES OR THEIR RESPECTIVE DELIVERY FACILITIES COLLECTIVELY THE “DISCLAIMED MATTERS”). LESSEE HEREBY WAIVES ANY SUCH DISCLAIMED MATTERS. FURTHER, LESSOR MAKES NO WARRANTY OR REPRESENTATION THAT THE LESSOR SERVICES CONFORM TO LESSEE’S SPECIFICATIONS OR ANY LEGAL OR INDUSTRY STANDARDS. |
(a) | Lessee shall provide Lessor with material safety data sheets (“MSDS”) on all Hazardous Substances brought onto the Premises or stored in the Tanks. |
(b) | Except with respect to those Hazardous Substances used, stored and otherwise handled by Lessee in conjunction with the operation of the Tank Farm Assets in accordance with the Permitted Use and used, stored, and otherwise handled in compliance with applicable Environmental Laws (Lessor hereby acknowledging that certain Hazardous Substances will be used, handled and stored in the ordinary course of operations), Lessee shall notify Lessor promptly upon the discovery by Lessee of any Hazardous Substances at, on or in the Premises, at concentrations exceeding those allowed by Environmental Laws or upon receipt of written communication from any governmental agency concerning the actual or alleged violation of an applicable Environmental Law in any way related to the Premises. Lessee shall provide notice to Lessor of any suit filed against Lessee or with respect to the Premises by any non-governmental third party alleging violations of applicable Environmental Law by Lessee (or anyone acting on behalf of Lessee) at the Premises. |
(c) | Lessor shall promptly notify Lessee of any Release of Hazardous Substances at or associated with Lessor’s refinery process to the extent adversely affecting the Premises or that could present an unreasonable risk to Lessee’s employees. |
(a) | Lessee’s failure or alleged failure to comply with Environmental Laws or its obligations under Article 10 hereof; |
(b) | any violation of Environmental Laws resulting or arising from Lessee’s occupancy of the Premises on or after the Commencement Date; or |
(c) | any environmental remediation or corrective action that is required by Environmental Law, to the extent resulting or arising from a Release on, under, about or migrating to or from the Premises occurring on or after the Commencement Date: including (A) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, risk-based closure activities, |
(a) | Lessee shall fail to make any payment of Rent or any other sums which are payable under this Lease when due, and such failure shall continue for a period of 10 days after receipt of written notice from Lessor of such failure, provided however, Lessor shall only be required to provide notice under this paragraph once during any calendar year; |
(b) | Lessee shall fail to comply with any term, provision or covenant of this Lease (other than the preceding subparagraph), and shall not cure, or have commenced to cure and pursue completion of the cure with due diligence, such failure within 30 days after written notice thereof to Lessee; provided however, that if any such default is of a nature that cannot reasonably be cured within 30 days and cure of such default has been commenced in good faith within such 30 day period, the commencement of the cure of such default within such 30 day period and the diligent prosecution to completion of such cure within a reasonable amount of time, but in any event within 120 days after the date Lessor sends the above-described notice, shall be deemed to be a cure of such default for purposes of this paragraph; or |
(c) | Lessee or any guarantor or surety of Lessee’s obligations hereunder shall (A) make a general assignment for the benefit of creditors; (B) commence any case, proceeding or other action seeking to have an order for relief entered on its behalf as a debtor or to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or of any substantial part of its property (collectively a “proceeding for relief”); (C) become the subject of any proceeding for relief which is not dismissed within 60 days of its filing or entry; (D) abandon the Premises for a period exceeding 180 days; or (E) be dissolved or otherwise fail to maintain its legal existence. |
(a) | Upon the occurrence of any default or Event of Default under this Lease which has not been cured as permitted pursuant to Section 13.1, Lessor shall have the right (without an election of remedies and without in any way limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such default or Event of Default) to do any one or more of the following: exercise all remedies available at law or equity including, without limitation, the bringing of an action for damages or an injunction on account of such default or Event of Default or for specific performance of this Lease, or: |
(1) | With or without terminating this Lease, may take any reasonable action to remedy any failure of Lessee to comply with or perform this Lease, and may enter the Premises as necessary notwithstanding the foregoing notice requirement described in Section 13.1, in the event of an emergency, to provide Lessee with such notice as is reasonable thereof. Lessee shall reimburse Lessor on written demand for all costs so incurred, plus a |
(2) | Terminate this Lease, in which event Lessee shall immediately surrender the Premises to Lessor, and if Lessee fails to do so, Lessor may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon (as applicable) and take possession of the Premises and expel or remove Lessee and any other person who may be occupying the Premises or any part thereof, by force if necessary (and Lessee hereby waives any claim for loss or damage by reason of such reentry, repossession, or removal), in which event Lessee shall pay to Lessor upon demand the sum of (i) all Rent and other amounts accrued hereunder to the date of termination, (ii) all amounts due under Section 13.2(b) below and (iii) damages in an amount equal to the total Rent that Lessee would have been required to pay for the remainder of the Term discounted to present value at a discount rate reasonably designated by Lessor diminished by any net sums thereafter received by Lessor through reletting the Premises during said period; or |
(3) | Terminate Lessee’s right of possession (but not this Lease), enter and repossess the Premises without further demand or notice of any kind to Lessee and without terminating this Lease, and remove all persons or property therefrom using such lawful force as may be necessary (and Lessee hereby waives any claim for loss or damage by reason of such reentry, repossession, or removal), in which event Lessee shall pay to Lessor upon demand (i) all Rent and other amounts accrued hereunder to the date of termination of possession, (ii) all amounts due from time to time under Section 13.2(b) below, and (iii) all Rent and other sums required hereunder to be paid by Lessee during the remainder of the Term as they become due, diminished by any net sums thereafter received by Lessor through reletting the Premises during said period. Reentry by Lessor in the Premises will not affect the obligations of Lessee hereunder for the unexpired Term. Lessor may bring action against Lessee to collect amounts due by Lessee on one or more occasions, without the necessity of Lessor’s waiting until expiration of the Term. Notwithstanding any such reletting without termination, Lessor may at any time thereafter elect in writing to terminate this Lease for such previous breach. |
(b) | Upon any Event of Default (after the expiration of any applicable notice and cure period), Lessee shall also pay to Lessor all necessary and reasonable costs and expenses incurred by Lessor, including court costs and reasonable attorneys’ fees, in (i) retaking or otherwise obtaining possession of the Premises, (ii) removing and storing Lessee’s or any other occupant’s property, (iii) repairing, restoring, altering, remodeling or otherwise returning the Premises into its original condition (normal wear and tear and casualty excepted), (iv) reletting all or any part of the Premises, (v) paying or performing the underlying obligation which Lessee failed to pay or |
(c) | Any self-help option granted to Lessor hereunder shall not release Lessee from its obligation to perform the terms, provisions, covenants and conditions set forth in this Lease and required to be performed by Lessee hereunder. |
(d) | The rights, remedies and recourses hereunder upon an Event of Default shall be cumulative and no right, remedy or recourse, whether or not exercised, shall be deemed to be in exclusion of any other right, remedy, or recourse. |
(e) | As described in Section 4.2 hereof, if Lessee fails to pay any amount due hereunder, as and when due, the amount due and unpaid shall bear interest at the Interest Rate from the date due until paid. |
(a) | Lessee to Repair Improvements. Subject to Section 14.2(b) below, if during the Term all or any portion of the Tank Farm Assets shall be damaged or destroyed by fire or other casualty, Lessee shall repair or restore the Tank Farm Assets. The work of repair or restoration, which shall be completed with due diligence, shall be |
(b) | Damage at the End of Lease. If, during the last three (3) years of the Term, any portion of the Tank Farm Assets shall be damaged by fire or other casualty in excess of 50% of the replacement cost thereof , then Lessee shall have the option, to be exercised within sixty (60) days after such event, to either (i) repair or restore the Tank Farm Assets as hereinabove provided, or (ii) terminate this Lease by notice to Lessor, which termination shall be deemed to be effective as of the date of the casualty. If Lessee terminates this Lease pursuant to this Section 14.2(b), Lessee shall surrender possession of the Premises to Lessor and will, at the request of Lessor from the insurance proceeds otherwise payable to Lessor, cause the Tank Farm Assets to be razed and the Premises to be leveled, cleaned, and otherwise put in good order. No termination of this Lease pursuant to this Section 14.2(b) will be effective until Lessee pays and performs all of Lessee’s duties and obligations in connection with the termination. |
If to Lessor: |
Valero Refining-Texas, L.P. |
One Valero Way |
San Antonio, Texas 78249 |
Attention: General Counsel |
Facsimile: (210) 345-3214 |
If to Lessee: |
Valero Partners Houston, LLC |
One Valero Way |
San Antonio, Texas 78249 |
Attention: General Counsel |
Facsimile: (210) 345-3214 |
By: | /s/ R. Lane Riggs |
Name: | R. Lane Riggs |
Title: | Executive Vice President |
By: | /s/ Richard F. Lashway |
Name: | Richard F. Lashway |
Title: | President and Chief Operating Officer |
Houston Tank Ref # | Shell Capacity (bbls) | Diameter | Year Built |
215 | 132,000 | 150 | 1960 |
234 | 150,000 | 150 | 2007 |
232 | 73,000 | 120 | 1992 |
211 | 179,000 | 165 | 2015 |
212 | 179,000 | 165 | 2015 |
205 | 150,000 | 150 | 2008 |
228 | 110,000 | 150 | 1975 |
507 | 150,000 | 150 | 2013 |
511 | 132,000 | 150 | 2006 |
505 | 80,000 | 125 | 1974 |
226 | 65,000 | 110 | 2005 |
204 | 55,000 | 90 | 2014 |
210 | 54,000 | 95 | 2008 |
230 | 41,000 | 100 | 1991 |
506 | 78,000 | 125 | 1975 |
225 | 75,000 | 120 | 1971 |
227 | 153,000 | 150 | 2013 |
1 | 236,000 | 210 | 1990 |
2 | 295,000 | 210 | 2012 |
3 | 146,000 | 190 | 1968 |
4 | 220,000 | 190 | 2009 |
6 | 220,000 | 210 | 1991 |
901 | 77,000 | 110 | 2007 |
233 | 73,000 | 120 | 1992 |
907 | 50,000 | 90 | 2006 |
915 | 69,000 | 95 | 2014 |
917 | 31,000 | 75 | 1969 |
920 | 31,000 | 72 | 2006 |
909 | 4,450 | 35 | 1961 |
927 | 55,000 | 90 | 2007 |
912 | 8,100 | 43 | 1961 |
913 | 8,100 | 43 | 2008 |
918 | 28,000 | 75 | 1968 |
921 | 32,000 | 72 | 2009 |
224 | 40,000 | 80 | 1970 |
231 | 102,000 | 123 | 2004 |
216 | 60,000 | 100 | 1960 |
5 | 215,000 | 220 | 1977 |
TOTAL | 3,856,650 |
Houston Tank # | Shell Capacity (bbls) | Diameter | Year Built |
211 | 179,000 | 165 | 2015 |
212 | 179,000 | 165 | 2015 |
205 | 150,000 | 150 | 2008 |
228 | 110,000 | 150 | 1975 |
507 | 150,000 | 150 | 2013 |
511 | 132,000 | 150 | 2006 |
505 | 80,000 | 125 | 1974 |
226 | 65,000 | 110 | 2005 |
204 | 55,000 | 90 | 2014 |
210 | 54,000 | 95 | 2008 |
230 | 41,000 | 100 | 1991 |
506 | 78,000 | 125 | 1975 |
225 | 75,000 | 120 | 1971 |
227 | 153,000 | 150 | 2013 |
901 | 77,000 | 110 | 2007 |
907 | 50,000 | 90 | 2006 |
915 | 69,000 | 95 | 2014 |
917 | 31,000 | 75 | 1969 |
920 | 31,000 | 72 | 2006 |
909 | 4,450 | 35 | 1961 |
927 | 55,000 | 90 | 2007 |
912 | 8,100 | 43 | 1961 |
913 | 8,100 | 43 | 2008 |
918 | 28,000 | 75 | 1968 |
921 | 32,000 | 72 | 2009 |
224 | 40,000 | 80 | 1970 |
231 | 102,000 | 123 | 2004 |
Houston Tank # | Shell Capacity (bbls) | Diameter | Year Built |
215 | 132,000 | 150 | 1960 |
216 | 60,000 | 100 | 1960 |
232 | 73,000 | 120 | 1992 |
233 | 73,000 | 120 | 1992 |
234 | 150,000 | 150 | 2007 |
Houston Tank # | Shell Capacity (bbls) | Diameter | Year Built |
1 | 236,000 | 210 | 1990 |
2 | 295,000 | 210 | 2012 |
3 | 146,000 | 190 | 1968 |
4 | 220,000 | 190 | 2009 |
6 | 220,000 | 210 | 1991 |
5 | 215,000 | 220 | 1977 |
• | Utilities – All utilities (including gas, water, steam, industrial gases, electricity and telephone) will be furnished by Lessor for Lessee’s operation of the Tank Farm Assets consistent with past practice. If Lessee’s electrical load or use of other utilities at the Tank Farm Assets increases above historical rates, Lessor will only be required to supply the increased load to the extent Lessor’s existing utility infrastructure is capable of doing so without detriment to the safe and reliable operation of the Refinery. Lessee shall reimburse Lessor for all utilities consumed at the Tank Farm Assets, calculated in a manner mutually reasonably agreed to by the parties, at the same rates that Lessor is required to pay its provider, plus any taxes and other applicable fees (but without any markup by Lessor). If Lessor’s actual cost of providing electricity materially changes or Lessee’s use of electricity materially changes, Lessor or Lessee may request an adjustment to the Rent by an appropriate amount, and the other party will not unreasonably refuse to grant such adjustment. Lessee agrees to reasonably cooperate with Lessor, if requested by Lessor or required by Applicable Law or the rules of the utility provider, to cause all electricity used at the Tank Farm Assets to be separately metered or sub-metered at Lessee’s sole cost and expense. |
• | Wastewater Processing – To the extent allowed by Applicable Law, all waste water treatment will be supplied to Lessee by Lessor from existing Refinery Site sources. This treatment pertains to dock and sump materials generated during the normal course of operations and includes sump generated waste materials. The Parties acknowledge that Governmental Authorities may impose pre-treatment standards on any waste waters Lessee releases to Lessor for processing. If such pre-treatment standards are imposed, Lessor shall be responsible for ensuring that the relevant Lessee personnel are adequately trained to comply with such standards and for submitting any related and required reports with the applicable Governmental Authority. Lessee will supply field data to Lessor to fulfill any such reposting requirements. |
• | Fire and Emergency Protection – Lessor will provide response support in the event of an emergency. Lessor will maintain the existing tank farm fire water and emergency response system and any necessary improvements will be made by Lessor. As further provided below, Lessor does not make, and hereby expressly disclaims, any and all representations or warranties (whether express, implied or statutory) as to the delivery pressure or volume of firewater that may be available to the Tank Farm Assets, or as to any other aspects of any firewater services provided hereunder, and Lessee acknowledges that there may be times when the firewater service to the Tank Farm Assets is interrupted or unavailable. Lessee agrees that Lessor shall have access to the Tank Farm Assets to operate, repair, inspect and maintain portions of the Refinery firewater system located therein. |
• | Groundwater Monitoring. Lessor currently operates any existing groundwater monitoring and remedial systems and will retain the obligation to maintain the existing systems until such time as the applicable Governmental Authority grants closure or Lessee and Lessor mutually agree that further operation is not necessary. As set forth in the Omnibus Agreement, in the event that Lessee has a Release following the Effective Date of this Lease and the Release has a material adverse impact on the existing remedial system or triggers new remedial obligations, Lessee shall reimburse Lessor for the additional costs incurred as a result of the Release. |
• | Solid/Hazardous Waste Processing. Lessor shall provide solid/hazardous waste processing consistent with Applicable Law. |
• | LDAR Monitoring and Reporting. Lessor will provide to Lessee services necessary to perform leak detection, monitoring and reporting on all Tank Farm Assets within the Refinery Site as required by Applicable Law and any applicable consent decree. Lessor’s and Lessee’s employees will be included in the Refinery LDAR training program, which training program shall comply with the Clean Air Act and any applicable consent decree. Lessor will provide data to Lessee on all LDAR surveillance activities. |
• | Security. Lessor shall provide routine security patrols, general monitoring and surveillance, provided however Lessor be responsible for the loss of or damage to the Tank Farm Assets and Improvements. |
• | IT/Controls Infrastructure. – Lessee will be entitled to access and use all necessary IT/Controls infrastructures for the operation of the Tank Farm Assets. Lessor shall maintain all IT/Controls infrastructures. |
• | Laydown Areas/Storage for Spares. Lessor will provide laydown areas and storage for spares on an as-needed basis. |
• | Landscape Maintenance. Lessor will provide or cause to be provided landscape maintenance services to the Premises. |
• | Janitorial Services. Lessor will provide or cause to be provided janitorial services to the Premises. |
• | Non-hazardous Waste Handling and Collection. Lessor will provide or cause to be provided non-hazardous waste handling and collection services to the Premises, including vacuum truck services. |
(a) | If subsequent to the date hereof increased quantities of any Lessor Services are reasonably required by Lessee in connection with its ownership, operation or maintenance of the Tank Farm Assets or any improvements or additions thereto, Lessor shall use commercially reasonable efforts to provide such increased quantities of such Lessor Services on the same terms and conditions set forth in Exhibit D, so long as the provision of such increased quantities does not interfere in any material respect with Lessor’s operations at the Refinery Site or require Lessor to make a capital improvement in order to provide such increased Lessor Services. If the provision by Lessor of increased quantities of any Lessor Services as requested by Lessee would require Lessor to make such a capital improvement, then Lessee may |
(b) | If subsequent to the date hereof Lessor Services not specifically described herein, but which are being produced or utilized by Lessor or its Affiliates in the normal course of their operations at the Refinery Site, are or become reasonably necessary to operate or maintain the Tank Farm Assets and any Improvements, Lessor shall use commercially reasonable efforts to provide such Lessor Services on terms and conditions consistent with the provision of the existing Lessor Services by Lessor. The Rent with respect to such additional Lessor Services may be increased in accordance with Section 5.2 hereof. |
(a) | FAILURE TO ANY EXTENT TO MAKE AVAILABLE, OR ANY SLOW-DOWN, STOPPAGE OR INTERRUPTION OF ANY LESSOR SERVICES DESCRIBED IN THIS ARTICLE 5 RESULTING FROM ANY CAUSE WHATSOEVER (OTHER THAN LESSOR’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) SHALL NOT RENDER LESSOR LIABLE IN ANY RESPECT FOR DAMAGES, NOR BE CONSTRUED AS AN EVICTION OF LESSEE (ACTUAL OR CONSTRUCTIVE) NOR RELIEVE LESSEE FROM FULFILLMENT OF ANY COVENANT OR AGREEMENT HEREOF. NEITHER LESSOR NOR ANY OF ITS LESSOR INDEMNIFIED PARTIES SHALL BE LIABLE TO LESSEE OR ANY OF THE LESSEE INDEMNIFIED PARTIES FOR ANY LOSSES ARISING OUT OF THE PROVISION AND DELIVERY OF (OR FAILURE TO PROVIDE AND DELIVER) ANY LESSOR SERVICES, AND LESSEE HEREBY RELEASES THE LESSOR INDEMNIFIED PARTIES FROM ALL SUCH LOSSES. |
(b) | LESSEE ASSUMES ALL RISKS AND LIABILITIES IN CONNECTION WITH ITS USE OF ANY LESSOR SERVICES PROVIDED BY LESSOR PURSUANT TO THE TERMS OF THIS LEASE OTHER THAN TO THE EXTENT ARISING FROM LESSOR’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. LESSEE HAS NOT MADE, DOES NOT MAKE, AND SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS, OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, OR FUTURE, OF, AS TO, CONCERNING OR |
(a) | Lessee shall provide Lessor with material safety data sheets (“MSDS”) on all Hazardous Substances brought onto the Premises or stored in the Tanks. |
(b) | Except with respect to those Hazardous Substances used, stored and otherwise handled by Lessee in conjunction with the operation of the Tank Farm Assets in accordance with the Permitted Use and used, stored, and otherwise handled in compliance with applicable Environmental Laws (Lessor hereby acknowledging that certain Hazardous Substances will be used, handled and stored in the ordinary course of operations), Lessee shall notify Lessor promptly upon the discovery by Lessee of any Hazardous Substances at, on or in the Premises, at concentrations exceeding those allowed by Environmental Laws or upon receipt of written communication from any governmental agency concerning the actual or alleged violation of an applicable Environmental Law in any way related to the Premises. Lessee shall provide notice to Lessor of any suit filed against Lessee or with respect to the Premises by any non-governmental third party alleging violations of applicable Environmental Law by Lessee (or anyone acting on behalf of Lessee) at the Premises. |
(c) | Lessor shall promptly notify Lessee of any Release of Hazardous Substances at or associated with Lessor’s refinery process to the extent adversely affecting the Premises or that could present an unreasonable risk to Lessee’s employees. |
(a) | Lessee’s failure or alleged failure to comply with Environmental Laws or its obligations under Article 10 hereof; |
(b) | any violation of Environmental Laws resulting or arising from Lessee’s occupancy of the Premises on or after the Commencement Date; or |
(c) | any environmental remediation or corrective action that is required by Environmental Law, to the extent resulting or arising from a Release on, under, about or migrating to or from the Premises occurring on or after the Commencement Date: including (A) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, risk-based closure activities, or other corrective action required or necessary under Environmental Laws, and (B) the cost and expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws. |
(a) | Lessee shall fail to make any payment of Rent or any other sums which are payable under this Lease when due, and such failure shall continue for a period of 10 days after receipt of written notice from Lessor of such failure, provided however, Lessor shall only be required to provide notice under this paragraph once during any calendar year; |
(b) | Lessee shall fail to comply with any term, provision or covenant of this Lease (other than the preceding subparagraph), and shall not cure, or have commenced to cure and pursue completion of the cure with due diligence, such failure within 30 days |
(c) | Lessee or any guarantor or surety of Lessee’s obligations hereunder shall (A) make a general assignment for the benefit of creditors; (B) commence any case, proceeding or other action seeking to have an order for relief entered on its behalf as a debtor or to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or of any substantial part of its property (collectively a “proceeding for relief”); (C) become the subject of any proceeding for relief which is not dismissed within 60 days of its filing or entry; (D) abandon the Premises for a period exceeding 180 days; or (E) be dissolved or otherwise fail to maintain its legal existence. |
(a) | Upon the occurrence of any default or Event of Default under this Lease which has not been cured as permitted pursuant to Section 13.1, Lessor shall have the right (without an election of remedies and without in any way limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such default or Event of Default) to do any one or more of the following: exercise all remedies available at law or equity including, without limitation, the bringing of an action for damages or an injunction on account of such default or Event of Default or for specific performance of this Lease, or: |
(1) | With or without terminating this Lease, may take any reasonable action to remedy any failure of Lessee to comply with or perform this Lease, and may enter the Premises as necessary notwithstanding the foregoing notice requirement described in Section 13.1, in the event of an emergency, to provide Lessee with such notice as is reasonable thereof. Lessee shall reimburse Lessor on written demand for all costs so incurred, plus a reasonable charge to compensate Lessor for the additional administrative burden. |
(2) | Terminate this Lease, in which event Lessee shall immediately surrender the Premises to Lessor, and if Lessee fails to do so, Lessor may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon (as applicable) and take possession of the Premises and expel or remove Lessee and any other person who may be occupying the Premises or any part thereof, by force if necessary (and Lessee hereby waives any claim for loss or damage by reason of such reentry, repossession, or removal), in |
(3) | Terminate Lessee’s right of possession (but not this Lease), enter and repossess the Premises without further demand or notice of any kind to Lessee and without terminating this Lease, and remove all persons or property therefrom using such lawful force as may be necessary (and Lessee hereby waives any claim for loss or damage by reason of such reentry, repossession, or removal), in which event Lessee shall pay to Lessor upon demand (i) all Rent and other amounts accrued hereunder to the date of termination of possession, (ii) all amounts due from time to time under Section 13.2(b) below, and (iii) all Rent and other sums required hereunder to be paid by Lessee during the remainder of the Term as they become due, diminished by any net sums thereafter received by Lessor through reletting the Premises during said period. Reentry by Lessor in the Premises will not affect the obligations of Lessee hereunder for the unexpired Term. Lessor may bring action against Lessee to collect amounts due by Lessee on one or more occasions, without the necessity of Lessor’s waiting until expiration of the Term. Notwithstanding any such reletting without termination, Lessor may at any time thereafter elect in writing to terminate this Lease for such previous breach. |
(b) | Upon any Event of Default (after the expiration of any applicable notice and cure period), Lessee shall also pay to Lessor all necessary and reasonable costs and expenses incurred by Lessor, including court costs and reasonable attorneys’ fees, in (i) retaking or otherwise obtaining possession of the Premises, (ii) removing and storing Lessee’s or any other occupant’s property, (iii) repairing, restoring, altering, remodeling or otherwise returning the Premises into its original condition (normal wear and tear and casualty excepted), (iv) reletting all or any part of the Premises, (v) paying or performing the underlying obligation which Lessee failed to pay or perform, and (vi) enforcing any of Lessor ‘s rights or remedies arising as a consequence of the Event of Default. |
(c) | Any self-help option granted to Lessor hereunder shall not release Lessee from its obligation to perform the terms, provisions, covenants and conditions set forth in this Lease and required to be performed by Lessee hereunder. |
(d) | The rights, remedies and recourses hereunder upon an Event of Default shall be cumulative and no right, remedy or recourse, whether or not exercised, shall be deemed to be in exclusion of any other right, remedy, or recourse. |
(e) | As described in Section 4.2 hereof, if Lessee fails to pay any amount due hereunder, as and when due, the amount due and unpaid shall bear interest at the Interest Rate from the date due until paid. |
(a) | Lessee to Repair Improvements. Subject to Section 14.2(b) below, if during the Term all or any portion of the Tank Farm Assets shall be damaged or destroyed by fire or other casualty, Lessee shall repair or restore the Tank Farm Assets. The work of repair or restoration, which shall be completed with due diligence, shall be commenced within a reasonable time after the damage or loss occurs. Rent and Monthly Payment shall not abate while the Tank Farm Assets are being repaired or restored. |
(b) | Damage at the End of Lease. If, during the last three (3) years of the Term, any portion of the Tank Farm Assets shall be damaged by fire or other casualty in excess of 50% of the replacement cost thereof , then Lessee shall have the option, to be exercised within sixty (60) days after such event, to either (i) repair or restore the Tank Farm Assets as hereinabove provided, or (ii) terminate this Lease by notice to Lessor, which termination shall be deemed to be effective as of the date of the casualty. If Lessee terminates this Lease pursuant to this Section 14.2(b), Lessee |
If to Lessor: |
Valero Refining-New Orleans, L.L.C. |
One Valero Way |
San Antonio, Texas 78249 |
Attention: General Counsel |
Facsimile: (210) 345-3214 |
If to Lessee: |
Valero Partners Louisiana, LLC |
One Valero Way |
San Antonio, Texas 78249 |
Attention: General Counsel |
Facsimile: (210) 345-3214 |
By: | /s/ R. Lane Riggs |
Name: | R. Lane Riggs |
Title: | Executive Vice President |
By: | /s/ Richard F. Lashway |
Name: | Richard F. Lashway |
Title: | President and Chief Operating Officer |
St. Charles Tank Ref # | Shell Capacity (bbls) | Diameter | Year Built |
150-22 | 150,000 | 165 | 1995 |
150-23 | 150,000 | 165 | 1996 |
325-5 | 325,000 | 220 | 2009 |
325-6 | 325,000 | 220 | 2009 |
225-1 | 225,000 | 180 | 2014 |
225-2 | 225,000 | 180 | 2014 |
325-1 | 325,000 | 270 | 1981 |
325-2 | 325,000 | 270 | 1981 |
325-3 | 325,000 | 270 | 1981 |
325-4 | 325,000 | 270 | 2005 |
150-1 | 150,000 | 164 | 2013 |
150-2 | 150,000 | 180 | 1957 |
150-27 | 150,000 | 165 | 1996 |
45-1 | 50,000 | 90 | 1996 |
45-2 | 50,000 | 90 | 1984 |
150-26 | 150,000 | 165 | 1996 |
150-5 | 150,000 | 183 | 1973 |
37-1 | 37,000 | 94 | 1975 |
78 | 15,000 | 60 | 1950 |
80-1 | 80,000 | 120 | 1951 |
55-1 | 55,000 | 100 | 1949 |
55-8 | 55,000 | 115 | 1978 |
150-6 | 150,000 | 183 | 2013 |
150-17 | 150,000 | 183 | 1980 |
55-5 | 55,000 | 100 | 1956 |
55-6 | 55,000 | 100 | 1956 |
425-2 | 425,000 | 280 | 1981 |
130-1 | 130,000 | 150 | 1954 |
130-3 | 130,000 | 150 | 1954 |
150-18 | 150,000 | 183 | 1979 |
150-19 | 150,000 | 183 | 1979 |
325-7 | 325,000 | 220 | 2012 |
625-2 | 625,000 | 306 | 2014 |
130-2 | 130,000 | 150 | 1954 |
130-5 | 130,000 | 150 | 1954 |
425-3 | 425,000 | 280 | 1981 |
425-4 | 425,000 | 270 | 1981 |
150-4 | 150,000 | 183 | 1973 |
150-20 | 150,000 | 183 | 1980 |
80-3 | 80,000 | 134 | 2007 |
80-4 | 80,000 | 134 | 1954 |
67-1 | 67,000 | 110 | NA |
180-9 | 180,000 | 160 | 2008 |
100-3 | 100,000 | 135 | 2014 |
150-7 | 150,000 | 183 | 1973 |
150-8 | 150,000 | 183 | 1973 |
130-8 | 130,000 | 170 | 1972 |
425-1 | 425,000 | 280 | 1981 |
625-1 | 625,000 | 320 | 1981 |
130-6 | 130,000 | 150 | 1995 |
150-24 | 150,000 | 165 | 1995 |
77 | 15,000 | 56 | 1940 |
81 | 25,000 | 75 | 1946 |
150-25 | 150,000 | 165 | 1995 |
TOTAL | 10,004,000 |
St. Charles Tank # | Shell Capacity (bbls) | Diameter | Year Built |
325-1 | 325,000 | 270 | 1981 |
325-2 | 325,000 | 270 | 1981 |
325-3 | 325,000 | 270 | 1981 |
325-4 | 325,000 | 270 | 2005 |
St. Charles Tank # | Shell Capacity (bbls) | Diameter | Year Built |
425-2 | 425,000 | 280 | 1981 |
425-3 | 425,000 | 280 | 1981 |
425-4 | 425,000 | 270 | 1981 |
425-1 | 425,000 | 280 | 1981 |
625-1 | 625,000 | 320 | 1981 |
St. Charles Tank # | Shell Capacity (bbls) | Diameter | Year Built |
325-5 | 325,000 | 220 | 2009 |
325-6 | 325,000 | 220 | 2009 |
225-1 | 225,000 | 180 | 2014 |
225-2 | 225,000 | 180 | 2014 |
150-1 | 150,000 | 164 | 2013 |
150-2 | 150,000 | 180 | 1957 |
150-5 | 150,000 | 183 | 1973 |
150-6 | 150,000 | 183 | 2013 |
150-17 | 150,000 | 183 | 1980 |
55-5 | 55,000 | 100 | 1956 |
55-6 | 55,000 | 100 | 1956 |
130-1 | 130,000 | 150 | 1954 |
130-3 | 130,000 | 150 | 1954 |
150-18 | 150,000 | 183 | 1979 |
150-19 | 150,000 | 183 | 1979 |
325-7 | 325,000 | 220 | 2012 |
625-2 | 625,000 | 306 | 2014 |
130-2 | 130,000 | 150 | 1954 |
130-5 | 130,000 | 150 | 1954 |
150-4 | 150,000 | 183 | 1973 |
150-20 | 150,000 | 183 | 1980 |
80-3 | 80,000 | 134 | 2007 |
80-4 | 80,000 | 134 | 1954 |
180-9 | 180,000 | 160 | 2008 |
100-3 | 100,000 | 135 | 2014 |
150-7 | 150,000 | 183 | 1973 |
150-8 | 150,000 | 183 | 1973 |
130-8 | 130,000 | 170 | 1972 |
130-6 | 130,000 | 150 | 1995 |
St. Charles Tank # | Shell Capacity (bbls) | Diameter | Year Built |
150-22 | 150,000 | 165 | 1995 |
150-23 | 150,000 | 165 | 1996 |
150-27 | 150,000 | 165 | 1996 |
45-1 | 50,000 | 90 | 1996 |
45-2 | 50,000 | 90 | 1984 |
150-26 | 150,000 | 165 | 1996 |
67-1 | 67,000 | 110 | 0 |
150-24 | 150,000 | 165 | 1995 |
150-25 | 150,000 | 165 | 1995 |
St. Charles Tank # | Shell Capacity (bbls) | Diameter | Year Built |
37-1 | 37,000 | 94 | 1975 |
55-1 | 55,000 | 100 | 1949 |
55-8 | 55,000 | 115 | 1978 |
St. Charles Tank # | Shell Capacity (bbls) | Diameter | Year Built |
78 | 15,000 | 60 | 1950 |
80-1 | 80,000 | 120 | 1951 |
77 | 15,000 | 56 | 1940 |
81 | 25,000 | 75 | 1946 |
• | Utilities – All utilities (including gas, water, steam, industrial gases, electricity and telephone) will be furnished by Lessor for Lessee’s operation of the Tank Farm Assets consistent with past practice. If Lessee’s electrical load or use of other utilities at the Tank Farm Assets increases above historical rates, Lessor will only be required to supply the increased load to the extent Lessor’s existing utility infrastructure is capable of doing so without detriment to the safe and reliable operation of the Refinery. Lessee shall reimburse Lessor for all utilities consumed at the Tank Farm Assets, calculated in a manner mutually reasonably agreed to by the parties, at the same rates that Lessor is required to pay its provider, plus any taxes and other applicable fees (but without any markup by Lessor). If Lessor’s actual cost of providing electricity materially changes or Lessee’s use of electricity materially changes, Lessor or Lessee may request an adjustment to the Rent by an appropriate amount, and the other party will not unreasonably refuse to grant such adjustment. Lessee agrees to reasonably cooperate with Lessor, if requested by Lessor or required by Applicable Law or the rules of the utility provider, to cause all electricity used at the Tank Farm Assets to be separately metered or sub-metered at Lessee’s sole cost and expense. |
• | Wastewater Processing – To the extent allowed by Applicable Law, all waste water treatment will be supplied to Lessee by Lessor from existing Refinery Site sources. This treatment pertains to dock and sump materials generated during the normal course of operations and includes sump generated waste materials. The Parties acknowledge that Governmental Authorities may impose pre-treatment standards on any waste waters Lessee releases to Lessor for processing. If such pre-treatment standards are imposed, Lessor shall be responsible for ensuring that the relevant Lessee personnel are adequately trained to comply with such standards and for submitting any related and required reports with the applicable Governmental Authority. Lessee will supply field data to Lessor to fulfill any such reposting requirements. |
• | Fire and Emergency Protection – Lessor will provide response support in the event of an emergency. Lessor will maintain the existing tank farm fire water and emergency response system and any necessary improvements will be made by Lessor. As further provided below, Lessor does not make, and hereby expressly disclaims, any and all representations or warranties (whether express, implied or statutory) as to the delivery pressure or volume of firewater that may be available to the Tank Farm Assets, or as to any other aspects of any firewater services provided hereunder, and Lessee acknowledges that there may be times when the firewater service to the Tank Farm Assets is interrupted or unavailable. Lessee agrees that Lessor shall have access to the Tank Farm Assets to operate, repair, inspect and maintain portions of the Refinery firewater system located therein. |
• | Groundwater Monitoring. Lessor currently operates any existing groundwater monitoring and remedial systems and will retain the obligation to maintain the existing systems until such time as the applicable Governmental Authority grants closure or Lessee and Lessor mutually agree that further operation is not necessary. As set forth in the Omnibus Agreement, in the event that Lessee has a Release following the Effective Date of this Lease and the Release has a material adverse impact on the existing remedial system or triggers new remedial obligations, Lessee shall reimburse Lessor for the additional costs incurred as a result of the Release. |
• | Solid/Hazardous Waste Processing. Lessor shall provide solid/hazardous waste processing consistent with Applicable Law. |
• | LDAR Monitoring and Reporting. Lessor will provide to Lessee services necessary to perform leak detection, monitoring and reporting on all Tank Farm Assets within the Refinery Site as required by Applicable Law and any applicable consent decree. Lessor’s and Lessee’s employees will be included in the Refinery LDAR training program, which training program shall comply with the Clean Air Act and any applicable consent decree. Lessor will provide data to Lessee on all LDAR surveillance activities. |
• | Security. Lessor shall provide routine security patrols, general monitoring and surveillance, provided however Lessor be responsible for the loss of or damage to the Tank Farm Assets and Improvements. |
• | IT/Controls Infrastructure. – Lessee will be entitled to access and use all necessary IT/Controls infrastructures for the operation of the Tank Farm Assets. Lessor shall maintain all IT/Controls infrastructures. |
• | Laydown Areas/Storage for Spares. Lessor will provide laydown areas and storage for spares on an as-needed basis. |
• | Landscape Maintenance. Lessor will provide or cause to be provided landscape maintenance services to the Premises. |
• | Janitorial Services. Lessor will provide or cause to be provided janitorial services to the Premises. |
• | Non-hazardous Waste Handling and Collection. Lessor will provide or cause to be provided non-hazardous waste handling and collection services to the Premises, including vacuum truck services. |
Section 1.01 | Defined Terms | 1 | |
Section 1.02 | Classification of Borrowings | 16 | |
Section 1.03 | Terms Generally | 16 | |
Section 1.04 | Accounting Terms; GAAP | 16 |
Section 2.01 | Term Loan | 17 | |
Section 2.02 | Borrowing Mechanics | 17 | |
Section 2.03 | Requests for Fundings | 17 | |
Section 2.04 | Interest Elections | 18 | |
Section 2.05 | Repayment of Term Loan; Evidence of Debt | 19 | |
Section 2.06 | Prepayment of Term Loan | 19 | |
Section 2.07 | Interest | 19 | |
Section 2.08 | Alternate Rate of Interest | 20 | |
Section 2.09 | Taxes | 20 | |
Section 2.10 | Payments Generally | 21 |
Section 3.01 | Corporate Existence and Power | 21 | |
Section 3.02 | Corporate and Governmental Authorization; Contravention | 21 | |
Section 3.03 | Enforceability | 22 | |
Section 3.04 | Financial Information | 22 | |
Section 3.05 | Litigation; No Material Adverse Effect | 22 | |
Section 3.06 | Environmental Matters | 22 | |
Section 3.07 | Taxes | 23 | |
Section 3.08 | Solvency | 23 | |
Section 3.09 | Compliance with Laws | 23 | |
Section 3.10 | Title to Properties | 23 |
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Section 5.01 | Financial Reporting Requirements | 24 |
Section 5.02 | Notices | 25 |
Section 5.03 | Existence; Conduct of Business | 25 |
Section 5.04 | Payment of Taxes | 25 |
Section 5.05 | Maintenance of Property; Insurance | 25 |
Section 5.06 | Compliance with Laws | 26 |
Section 5.07 | Books and Records; Inspection Rights | 26 |
Section 5.08 | Use of Proceeds | 26 |
Section 5.09 | First Tier Subsidiaries; Additional Guarantors | 26 |
Section 5.10 | Designation and Conversion of Restricted and Unrestricted Subsidiaries; Certain other Matters Pertaining to Unrestricted Subsidiaries | 26 |
Section 5.11 | Employee Matters | 27 |
Section 6.01 | Liens | 28 |
Section 6.02 | Fundamental Changes; Dispositions | 31 |
Section 6.03 | Indebtedness; Securitization Transactions; Sale/Leaseback Transactions | 31 |
Section 6.04 | Restricted Payments | 34 |
Section 6.05 | Changes in Organization Documents | 34 |
Section 6.06 | Restrictive Agreements | 34 |
Section 6.07 | Change in Nature of Business | 35 |
Section 6.08 | Consolidated Leverage Ratio | 35 |
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Section 9.01 | Notices | 41 |
Section 9.02 | Waivers; Amendments | 42 |
Section 9.03 | Successors and Assigns | 42 |
Section 9.04 | Counterparts; Integration; Effectiveness | 42 |
Section 9.05 | Severability | 42 |
Section 9.06 | Governing Law; Consent to Service of Process | 43 |
Section 9.07 | Headings | 43 |
Section 9.08 | Interest Rate Limitation | 43 |
Section 9.09 | No Liability of General Partner | 43 |
Section 10.01 | Guarantee | 43 |
Section 10.02 | Waiver of Subrogation | 44 |
Section 10.03 | Amendments, Etc., with respect to the Guaranteed Obligations | 44 |
Section 10.04 | Guarantee Absolute and Unconditional | 44 |
Section 10.05 | Reinstatement | 45 |
Section 10.06 | Payments | 45 |
Section 10.07 | Additional Guarantors | 45 |
Section 10.08 | Guaranty Release Matters | 45 |
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Annex A | – Leverage-Based Pricing Grid |
Annex B | – Ratings-Based Pricing Grid |
Exhibit A | – Form of Promissory Note |
Exhibit B | – Form of Guarantee Joinder |
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(i) | the aggregate amount of the requested funding; |
(ii) | the date of such funding, which shall be a Business Day; |
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By: /s/ Donna M. Titzman | ||
Name: | Donna M. Titzman | |
Title: | Senior Vice President, Chief Financial | |
Officer, and Treasurer |
By: /s/ Donna M. Titzman | ||
Name: | Donna M. Titzman | |
Title: | Senior Vice President and Treasurer |
By: /s/ Michael S. Ciskowski | ||
Name: | Michael S. Ciskowski | |
Title: | Executive Vice President and Chief | |
Financial Officer |
Consolidated Leverage Ratio | Level 1 | Level 2 | Level 3 | Level 4 |
≤ 2.75:1.00 | > 2.75:100 but ≤ 3.50:1.00 | > 3.50:100 but ≤ 4.25:1.00 | > 4.25:1.00 | |
LIBOR Margin | 1.250% | 1.500% | 1.750% | 2.00% |
Prime Rate Margin | 0.250% | 0.500% | 0.750% | 1.00% |
Designated Ratings | Level 1 | Level 2 | Level 3 | Level 4 | Level 5 |
≥BBB+/Baa1 | BBB/Baa2 | BBB-/Baa3 | BB+/Ba1 | ≤BB+/Ba1 | |
LIBOR Margin | 1.125% | 1.250% | 1.500% | 1.750% | 2.00% |
Prime Rate Margin | 0.125% | 0.250% | 0.500% | 0.750% | 1.00% |
$_________ | [ ], 2015 |
By:_______________________________________ | ||
Name: | ||
Title: |
Date | Amount of Term Loan | Amount of Principal Paid or Prepaid | Unpaid Principal Balance | Notation Made By |
______________________________________ |
[NAME OF ADDITIONAL GUARANTOR] |
By: | ________________________________ |
Name: | ________________________ |
Title: | _________________________ |
December 31, | ||||||||
2014 | 2013 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | — | $ | — | ||||
Total current assets | — | — | ||||||
Property and equipment, at cost | 344,261 | 286,339 | ||||||
Accumulated depreciation | (48,570 | ) | (38,430 | ) | ||||
Property and equipment, net | 295,691 | 247,909 | ||||||
Total assets | $ | 295,691 | $ | 247,909 | ||||
LIABILITIES AND NET INVESTMENT | ||||||||
Commitments and contingencies | ||||||||
Net investment | $ | 295,691 | $ | 247,909 | ||||
Total liabilities and net investment | $ | 295,691 | $ | 247,909 |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Operating revenues | $ | — | $ | — | ||||
Costs and expenses: | ||||||||
Operating expenses | 38,788 | 36,324 | ||||||
General and administrative expenses | 267 | 261 | ||||||
Depreciation expense | 10,502 | 8,906 | ||||||
Total costs and expenses | 49,557 | 45,491 | ||||||
Net loss | $ | (49,557 | ) | $ | (45,491 | ) |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Balance as of beginning of year | $ | 247,909 | $ | 168,140 | ||||
Net loss | (49,557 | ) | (45,491 | ) | ||||
Net transfers from Valero | 97,339 | 125,260 | ||||||
Balance as of end of year | $ | 295,691 | $ | 247,909 |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (49,557 | ) | $ | (45,491 | ) | ||
Adjustment to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation expense | 10,502 | 8,906 | ||||||
Net cash used in operating activities | (39,055 | ) | (36,585 | ) | ||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (58,701 | ) | (87,918 | ) | ||||
Net cash used in investing activities | (58,701 | ) | (87,918 | ) | ||||
Cash flows from financing activities: | ||||||||
Net transfers from Valero | 97,756 | 124,503 | ||||||
Net cash provided by financing activities | 97,756 | 124,503 | ||||||
Net change in cash and cash equivalents | — | — | ||||||
Cash and cash equivalents as of beginning of year | — | — | ||||||
Cash and cash equivalents as of end of year | $ | — | $ | — |
1. | BUSINESS AND BASIS OF PRESENTATION |
• | Houston Terminal. The Houston Terminal operates a crude oil, intermediates, and refined petroleum products terminal that supports Valero’s Houston, Texas refinery. The terminal is located on the Houston ship channel and has storage tanks with 3.6 million barrels of storage capacity. |
• | St. Charles Terminal. The St. Charles Terminal operates a crude oil, intermediates, and refined petroleum products terminal that supports Valero’s St. Charles Refinery located in Norco, Louisiana. The terminal is located on the Mississippi River and has storage tanks with 10 million barrels of storage capacity. |
3. | RELATED-PARTY TRANSACTIONS |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Operating expenses | $ | 16,144 | $ | 15,842 | ||||
General and administrative expenses | 267 | 261 |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Net transfers from Valero per statements of changes in net investment | $ | 97,339 | $ | 125,260 | ||||
Less: Noncash transfers from (to) Valero | (417 | ) | 757 | |||||
Net transfers from Valero per statements of cash flows | $ | 97,756 | $ | 124,503 |
4. | PROPERTY AND EQUIPMENT |
December 31, | ||||||||
2014 | 2013 | |||||||
Terminals and related assets | $ | 321,725 | $ | 184,158 | ||||
Construction-in-progress | 22,536 | 102,181 | ||||||
Property and equipment, at cost | 344,261 | 286,339 | ||||||
Accumulated depreciation | (48,570 | ) | (38,430 | ) | ||||
Property and equipment, net | $ | 295,691 | $ | 247,909 |
6. | EMPLOYEE BENEFIT PLANS |
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Pension and postretirement costs | $ | 12 | $ | 22 | ||||
Defined contribution plan costs | 10 | 8 | ||||||
Stock-based compensation costs | 2 | 2 |
• | Houston Terminal. The Houston Terminal operates a crude oil, intermediates, and refined petroleum products terminal that supports Valero’s Houston, Texas refinery. The terminal is located on the Houston ship channel and has storage tanks with 3.6 million barrels of storage capacity. |
• | St. Charles Terminal. The St. Charles Terminal operates a crude oil, intermediates, and refined petroleum products terminal that supports Valero’s St. Charles Refinery located in Norco, Louisiana. The terminal is located on the Mississippi River and has storage tanks with 10 million barrels of storage capacity. |
• | the acquisition of the Houston and St. Charles Terminal Services Business from Valero for total consideration of $671.2 million consisting of (i) a cash distribution of $571.2 million and (ii) 1,908,100 common units and 38,941 general partner units having an aggregate value, collectively, of $100.0 million. We funded the cash distribution to Valero with $211.2 million of our cash on hand, $200.0 million of borrowings under our revolving credit facility, and $160.0 million of proceeds from a subordinated loan agreement with Valero. |
• | our entry into additional schedules to our commercial agreements with Valero, and the recognition of terminaling revenue under those schedules for the volumes throughput and handled by the Acquired Business during the periods presented; |
• | our entry into amended and restated schedules to our omnibus agreement with Valero; |
• | our general partner’s entry into an amended and restated services and secondment agreement with Valero; |
• | the payment of insurance premiums in excess of those allocated by Valero in the combined financial statements of the Acquired Business for business interruption, property, and third-party liability insurance coverage; |
• | the payment of rent expense on land located at Valero’s Houston Refinery and St. Charles Refinery; |
• | the estimated interest expense that would have been incurred had we borrowed $160.0 million under the subordinated loan agreement with Valero and $200.0 million under the revolving credit facility; and |
• | the reduction in the deferred tax liability related to a reduction in the apportionment rate of the Texas margin tax and associated adjustment for the tax basis in the Acquired Business. |
Historical | Acquired Business | Pro Forma Adjustments | Pro Forma | |||||||||||||||
(Audited) | (Audited) | |||||||||||||||||
ASSETS | ||||||||||||||||||
Current assets: | ||||||||||||||||||
Cash and cash equivalents | $ | 236,579 | $ | — | $ | (211,551 | ) | (a) | $ | 25,028 | ||||||||
Receivables from related party | 8,499 | — | — | 8,499 | ||||||||||||||
Prepaid expenses and other | 727 | — | — | 727 | ||||||||||||||
Total current assets | 245,805 | — | (211,551 | ) | 34,254 | |||||||||||||
Property and equipment, at cost | 474,843 | 344,261 | — | 819,104 | ||||||||||||||
Accumulated depreciation | (125,960 | ) | (48,570 | ) | — | (174,530 | ) | |||||||||||
Property and equipment, net | 348,883 | 295,691 | — | 644,574 | ||||||||||||||
Deferred charges and other assets, net | 1,385 | — | — | 1,385 | ||||||||||||||
Total assets | $ | 596,073 | $ | 295,691 | $ | (211,551 | ) | $ | 680,213 | |||||||||
LIABILITIES AND PARTNERS’ CAPITAL | ||||||||||||||||||
Current liabilities: | ||||||||||||||||||
Current portion of capital lease obligations | $ | 1,200 | $ | — | $ | — | $ | 1,200 | ||||||||||
Accounts payable – related parties | 4,297 | — | — | 4,297 | ||||||||||||||
Accrued liabilities | 1,054 | — | — | 1,054 | ||||||||||||||
Taxes other than income taxes | 765 | — | — | 765 | ||||||||||||||
Deferred revenue from related party | 124 | — | — | 124 | ||||||||||||||
Total current liabilities | 7,440 | — | — | 7,440 | ||||||||||||||
Capital lease obligations, net of current portion | 1,519 | — | — | 1,519 | ||||||||||||||
Debt, less current portion | — | — | 360,000 | (b) | 360,000 | |||||||||||||
Deferred income taxes | 830 | — | (144 | ) | (c) | 686 | ||||||||||||
Other long-term liabilities | 1,065 | — | — | 1,065 | ||||||||||||||
Partners’ capital: | ||||||||||||||||||
Common unitholders – public | 374,954 | — | (100 | ) | (d) | 374,854 | ||||||||||||
Common unitholder – Valero | 58,844 | — | (18,250 | ) | (d) | 40,594 | ||||||||||||
Subordinated unitholder – Valero | 146,804 | — | (248,871 | ) | (d) | (102,067 | ) | |||||||||||
General partner – Valero | 4,617 | — | (8,495 | ) | (d) | (3,878 | ) | |||||||||||
Net investment | — | 295,691 | (295,691 | ) | (e) | — | ||||||||||||
Total partners’ capital | 585,219 | 295,691 | (571,407 | ) | 309,503 | |||||||||||||
Total liabilities and partners’ capital | $ | 596,073 | $ | 295,691 | $ | (211,551 | ) | $ | 680,213 |
Historical | Acquired Business | Pro Forma Adjustments | Pro Forma | ||||||||||||||||
(Audited) | (Audited) | ||||||||||||||||||
Operating revenues – related party | $ | 129,180 | $ | — | $ | 108,726 | (f) | $ | 237,906 | ||||||||||
Costs and expenses: | |||||||||||||||||||
Operating expenses | 31,719 | 38,788 | 1,766 | (g) | 72,273 | ||||||||||||||
General and administrative expenses | 12,330 | 267 | 833 | (h) | 13,430 | ||||||||||||||
Depreciation expense | 16,451 | 10,502 | — | 26,953 | |||||||||||||||
Total costs and expenses | 60,500 | 49,557 | 2,599 | 112,656 | |||||||||||||||
Operating income (loss) | 68,680 | (49,557 | ) | 106,127 | 125,250 | ||||||||||||||
Other income, net | 1,504 | — | — | 1,504 | |||||||||||||||
Interest expense | (872 | ) | — | (4,706 | ) | (i) | (5,578 | ) | |||||||||||
Income (loss) before income taxes | 69,312 | (49,557 | ) | 101,421 | 121,176 | ||||||||||||||
Income tax expense | 548 | — | 175 | (j) | 723 | ||||||||||||||
Net income (loss) | 68,764 | (49,557 | ) | 101,246 | 120,453 | ||||||||||||||
Less: Net income (loss) attributable to Predecessor | 9,483 | (49,557 | ) | 49,557 | 9,483 | ||||||||||||||
Net income attributable to partners | 59,281 | — | 51,689 | 110,970 | |||||||||||||||
Less: General partner’s interest in net income | 1,379 | — | 1,041 | (k) | 2,420 | ||||||||||||||
Limited partners’ interest in net income | $ | 57,902 | $ | — | $ | 50,648 | $ | 108,550 | |||||||||||
Net income per limited partner unit – basic and diluted: | |||||||||||||||||||
Common units | $ | 1.01 | $ | 1.83 | (l) | ||||||||||||||
Subordinated units | $ | 1.01 | $ | 1.83 | (l) | ||||||||||||||
Weighted-average limited partner units outstanding: | |||||||||||||||||||
Common units – basic | 28,790 | 1,908 | (l) | 30,698 | |||||||||||||||
Common units – diluted | 28,791 | 1,908 | (l) | 30,699 | |||||||||||||||
Subordinated units – basic and diluted | 28,790 | — | 28,790 |
Historical | Acquired Business | Pro Forma Adjustments | Pro Forma | ||||||||||||||||
(Audited) | (Audited) | ||||||||||||||||||
Operating revenues – related party | $ | 124,985 | $ | — | $ | 109,093 | (f) | $ | 234,078 | ||||||||||
Costs and expenses: | |||||||||||||||||||
Operating expenses | 32,205 | 36,324 | 23 | (g) | 68,552 | ||||||||||||||
General and administrative expenses | 7,195 | 261 | 839 | (h) | 8,295 | ||||||||||||||
Depreciation expense | 16,256 | 8,906 | — | 25,162 | |||||||||||||||
Total costs and expenses | 55,656 | 45,491 | 862 | 102,009 | |||||||||||||||
Operating income (loss) | 69,329 | (45,491 | ) | 108,231 | 132,069 | ||||||||||||||
Other income, net | 309 | — | — | 309 | |||||||||||||||
Interest expense | (198 | ) | — | (5,159 | ) | (i) | (5,357 | ) | |||||||||||
Income (loss) before income taxes | 69,440 | (45,491 | ) | 103,072 | 127,021 | ||||||||||||||
Income tax expense | 1,434 | — | 71 | (j) | 1,505 | ||||||||||||||
Net income (loss) | 68,006 | (45,491 | ) | 103,001 | 125,516 | ||||||||||||||
Less: Net income (loss) attributable to Predecessor | 65,965 | (45,491 | ) | 100,480 | 120,954 | ||||||||||||||
Net income attributable to partners | 2,041 | — | 2,521 | 4,562 | |||||||||||||||
Less: General partner’s interest in net income | 41 | — | 50 | (k) | 91 | ||||||||||||||
Limited partners’ interest in net income | $ | 2,000 | $ | — | $ | 2,471 | $ | 4,471 | |||||||||||
Net income per limited partner unit – basic and diluted: | |||||||||||||||||||
Common units | $ | 0.03 | $ | 0.08 | (l) | ||||||||||||||
Subordinated units | $ | 0.03 | $ | 0.08 | (l) | ||||||||||||||
Weighted-average limited partner units outstanding – basic and diluted: | |||||||||||||||||||
Common units | 28,790 | 1,908 | (l) | 30,698 | |||||||||||||||
Subordinated units | 28,790 | — | 28,790 |
Historical | Acquired Business | Pro Forma | ||||||||||
(Audited) | (Unaudited) | |||||||||||
Operating revenues – related party | $ | 115,889 | $ | — | $ | 115,889 | ||||||
Costs and expenses: | ||||||||||||
Operating expenses | 34,473 | 37,902 | 72,375 | |||||||||
General and administrative expenses | 6,546 | 235 | 6,781 | |||||||||
Depreciation expense | 16,550 | 6,522 | 23,072 | |||||||||
Total costs and expenses | 57,569 | 44,659 | 102,228 | |||||||||
Operating income (loss) | 58,320 | (44,659 | ) | 13,661 | ||||||||
Other income, net | 337 | — | 337 | |||||||||
Interest expense | (307 | ) | — | (307 | ) | |||||||
Income (loss) before income taxes | 58,350 | (44,659 | ) | 13,691 | ||||||||
Income tax expense | 553 | — | 553 | |||||||||
Net income (loss) | $ | 57,797 | $ | (44,659 | ) | $ | 13,138 |
(a) | This adjustment reflects the following increases and decreases to cash: |
• | Increases to cash: $200.0 million borrowing under our revolving credit agreement and $160.0 million of proceeds from a subordinated loan agreement with Valero. |
• | Decreases to cash: payment of $571.2 million as part of the total consideration for the Acquired Business and estimated transaction costs of $351,000 associated with the Acquisition. |
(b) | This adjustment reflects the $200.0 million of borrowings under our revolving credit agreement and $160.0 million of borrowings under the subordinated loan agreement with Valero. |
(c) | This adjustment reflects the reduction in the deferred tax liability related to a reduction in the apportionment rate of the Texas margin tax and associated adjustment for the tax basis in the Acquired Business. |
(d) | This adjustment reflects the following increases and decreases to partners’ capital (in thousands): |
Estimated Transaction Costs | Issuance of Common and General Partner Units | Excess Consideration | Pro Forma Adjustments | |||||||||||||
Common unitholders – public | $ | (100 | ) | $ | — | $ | — | $ | (100 | ) | ||||||
Common unitholder – Valero | (78 | ) | 98,000 | (116,172 | ) | (18,250 | ) | |||||||||
Subordinated unitholder – Valero | (166 | ) | — | (248,705 | ) | (248,871 | ) | |||||||||
General partner – Valero | (7 | ) | 2,000 | (10,488 | ) | (8,495 | ) | |||||||||
Total | $ | (351 | ) | $ | 100,000 | $ | (375,365 | ) | $ | (275,716 | ) |
(e) | This adjustment reflects the elimination of Valero’s net investment in the Acquired Business, and its reclassification to partners’ capital (see Note (d)). |
(f) | This adjustment reflects revenues associated with the Partnership’s entry into additional schedules to our commercial agreements with Valero related to the Acquired Business. Revenues were calculated using the throughput rates included in those schedules. Volumes used were historical volumes throughput and handled by the assets of the Acquired Business. |
(g) | This adjustment reflects the following increases to operating expenses: |
• | a net increase of $2.5 million for each of the years ended December 31, 2014 and 2013 for insurance premiums in excess of those allocated by Valero in the combined financial statements of the Acquired Business for business interruption, property, and third-party liability insurance coverage. |
• | a net decrease of $1.3 million and net increase of $458,000 for the years ended December 31, 2014 and 2013, respectively, for the payment of rent expense on land located at Valero’s Houston Refinery and St. Charles Refinery, net of rent expense and other facility-related expenses, including utilities, allocated to the Acquired Business. |
• | a net increase of $493,000 and net decrease of $3.0 million for the years ended December 31, 2014 and 2013, respectively, for the annual secondment fee of $17.4 million payable by the Partnership to Valero related to the Acquired Business, net of employee-related expenses allocated to the Acquired Business. |
(h) | This adjustment reflects a net increase of $833,000 and $839,000 for the years ended December 31, 2014 and 2013, respectively, to general and administrative expenses for the annual administrative fee payable by the Partnership to Valero in excess of such expenses allocated to the Acquired Business. The annual administrative fee increased from $9.3 million to $10.4 million as of March 1, 2015, for the management of our day-to-day operations after the closing of the Acquisition under the amended and restated schedules to our omnibus agreement. |
(i) | This adjustment reflects variable interest expense at 1.41% and 1.44% for the years ended December 31, 2014 and 2013, respectively, on the $160.0 million of borrowings under the subordinated loan agreement with Valero and $200.0 million of borrowings under our revolving credit agreement, partially offset by a reduction of $355,000 and $15,000 in the years ended December 31, 2014 and 2013, respectively, in the commitment fee for the unutilized portion of the revolving credit agreement. A change of 0.125% in the interest rate associated with the borrowings would result in a $450,000 change in annual interest expense. |
(j) | This adjustment reflects the increase in tax expense attributable to the Texas margin tax. |
(k) | The purpose of this adjustment is to reflect our general partner’s interest in our net income. We compute net income allocated to the general partnership interest by applying the provisions of our partnership agreement as more fully described in Note (l). |
(l) | Basic and diluted net income per limited partner unit is determined pursuant to the two-class method for master limited partnerships. The two-class method is an earnings allocation formula that is used to determine earnings to our general partner, common unitholders, and participating securities according to (i) distributions pertaining to each period’s net income and (ii) participation rights in undistributed earnings. |
Year Ended December 31, 2014 | ||||||||||||||||||||
Limited Partners | ||||||||||||||||||||
General Partner | Common Units | Subordinated Units | Restricted Units | Total | ||||||||||||||||
Allocation of pro forma net income to determine pro forma net income available to limited partners: | ||||||||||||||||||||
Distributions, excluding general partner’s IDRs | $ | 1,147 | $ | 28,887 | $ | 27,091 | $ | — | $ | 57,125 | ||||||||||
General partner’s IDRs | 200 | — | — | — | 200 | |||||||||||||||
DERs | — | — | — | 6 | 6 | |||||||||||||||
Distributions and DERs declared | 1,347 | 28,887 | 27,091 | 6 | 57,331 | |||||||||||||||
Undistributed earnings | 1,073 | 27,124 | 25,438 | 4 | 53,639 | |||||||||||||||
Pro forma net income available to limited partners – basic | $ | 2,420 | 56,011 | 52,529 | $ | 10 | $ | 110,970 | ||||||||||||
Add: DERs | 10 | — | ||||||||||||||||||
Pro forma net income available to limited partners – diluted | $ | 56,021 | $ | 52,529 | ||||||||||||||||
Pro forma net income per limited partner unit – basic: | ||||||||||||||||||||
Weighted-average units outstanding | 30,698 | 28,790 | ||||||||||||||||||
Pro forma net income per limited partner unit – basic | $ | 1.83 | $ | 1.83 | ||||||||||||||||
Pro forma net income per limited partner unit – diluted: | ||||||||||||||||||||
Weighted-average units outstanding | 30,698 | 28,790 | ||||||||||||||||||
Common equivalent units for restricted units | 1 | — | ||||||||||||||||||
Weighted-average units outstanding – diluted | 30,699 | 28,790 | ||||||||||||||||||
Pro forma net income per limited partner unit – diluted | $ | 1.83 | $ | 1.83 |
Year Ended December 31, 2013 | ||||||||||||||||
Limited Partners | ||||||||||||||||
General Partner | Common Units | Subordinated Units | Total | |||||||||||||
Allocation of pro forma net income to determine pro forma net income available to limited partners: | ||||||||||||||||
Distributions | $ | 45 | $ | 1,136 | $ | 1,065 | $ | 2,246 | ||||||||
Undistributed earnings | 46 | 1,171 | 1,099 | 2,316 | ||||||||||||
Pro forma net income available to limited partners – basic and diluted | $ | 91 | $ | 2,307 | $ | 2,164 | $ | 4,562 | ||||||||
Pro forma net income per limited partner unit – basic and diluted: | ||||||||||||||||
Weighted-average units outstanding | 30,698 | 28,790 | ||||||||||||||
Pro forma net income per limited partner unit – basic and diluted | $ | 0.08 | $ | 0.08 |
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