CRUDE OIL SUPPLY AND THROUGHPUT SERVICES AGREEMENT by and between GEL TEX MARKETING, LLC, a Delaware limited liability company and a Genesis Energy, LLC affiliate, and LAZARUS ENERGY LLC, a Delaware limited liability company Dated as of August 12, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"Affiliate"  means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified, and in addition, with respect to the Lazarus, (a) any director or officer of such Person or of any Person referred to above  or  (b) if  any  Person  in  above  is  an  individual,  any  member  of  the  immediate  family (including parents, spouse and children) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust.  As used in this definition, "control" (including, with its correlative meanings, "controlled by" and "under common control with") means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of Equity Interests, by contract or otherwise); provided that, in any event, (i)  any Person who owns directly or indirectly ten percent (10%) or more of the Equity Interests having ordinary voting power for the election of directors or other governing body of a corporation or ten percent (10%) or more of the Equity Interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person, and (ii) any subsidiary of any Lazarus shall be deemed to be an Affiliate of Lazarus.

 

 

 

 

 

 

"Crude Oil" means all crude oil, condensate and other liquid hydrocarbon substances. "Dispute  Resolution  Agreement" means that  certain  Dispute Resolution Agreement, dated of even date herewith,  by and  between Lazarus, GEL and certain of their respective Affiliates, and any amendments, modifications and restatements thereof.

 

 

 

 

 

 

 

 

"Interim Agreement" means that certain Interim Throughput Services Agreement dated January  11,  2011  by  and  between  Lazarus  and  Genesis  Crude  Oil,  LP,  a  Delaware  limited partnership,  and  any  amendments,  modifications  and  restatements  thereof,  attached  hereto  as Exhibit C.

 

 

 

"▇▇▇▇▇  Product" means the Crude Oil and other Hydrocarbons refined and processed by Lazarus at the Facility pursuant to the terms of this Agreement "Offer Notice" has the meaning set forth in Section 10.1. "Option"  has the meaning set forth in Section 10.1.

 

 

 

"Person" means an individual, corporation,  partnership,  limited liability company, joint venture, trust or unincorporated  organization, joint stock company or other similar organization, government or any political subdivision thereof, a court, or any other legal entity, whether acting in an individual, fiduciary or other capacity.

 

 

 

 

 

Tank No.51	10,000 Bbls
Tank No. 53	55,000 Bbls
Tank No. 54	55,000 Bbls

 

 

 

1.5      Amendment of Defined Instruments.   Unless the context otherwise requires or unless otherwise provided herein, the terms defined in this Agreement which refer to a particular agreement, instrument or document also refer to and include all renewals, extensions, modifications,  amendments  and  restatement of  such  agreement,  instrument  or  document. Nothing contained in this Section 1.5 will be construed to authorize any renewal, extension, modification, amendment or restatement.

 

1.6      References and Titles.   All references in this Agreement to exhibits, schedules, articles, sections, subsections and other subdivisions refer to the exhibits, schedules, articles, sections, subsections and other subdivisions of this Agreement unless expressly provided otherwise.   The words "this Agreement," "this instrument," "herein," "hereof," "hereby," "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular  subdivision  unless  expressly  so  limited.  The  phrases  "this  section"  and  "this subsection" and similar phrases refer only to the sections or subsections of this Agreement in which those phrases occur.  The word "or" is not exclusive; the word "including" (in its various forms)  means "including  without  limitation."    Pronouns  in  masculine, feminine and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.  The word "will" shall be construed to have the same meaning and effect as the word "shall."  Unless the context requires otherwise (a) any reference herein to any law shall be construed as referring to such law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time, (b) any reference herein to any Person shall be construed to include such Person's successors and assigns (subject to the restrictions contained herein), (c) with respect to the determination of any time period, the word "from" means "from and including" and the word "to" means "to and including." No provision of this Agreement or any other Contract Document shall be interpreted or construed against any Person solely because such Person or its legal representative drafted such provision.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)      Tank  Storage  Fee.   GEL  shall pay to Lazarus  a rate of $0.50  per shell barrel  per  month  for the  use  of the Storage  Tanks  (the "Tank  Storage  Fee"), for the limited purpose of providing funds to Lazarus for start up of operations at the Facility. Lazarus shall receive the Tank Storage Fee as a part of, and the Tank Storage Fee shall be included in the calculation of the Distribution of Gross Profits (as defined in the Joint Marketing Agreement), until such time as GEL determines, in consultation with Lazarus, that  the  Tank  Storage  Fee  is  no longer  necessary  to  fund  Lazarus'  operations  at  the Facility.  GEL shall be reimbursed for all Tank Storage Fees paid in accordance with the terms of the Joint Marketing Agreement.

 

(b)     Tank or Pipeline  Cleaning.   GEL acknowledges  that, as of the Effective Date, the Storage Tanks and related pipeline system are acceptable for its use.  Upon termination  of this Agreement, GEL shall remove its Crude Oil from the Storage Tanks, Facility and pipeline system and will return the Storage Tanks to the same condition they were as of the Effective Date.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.1      Filings.  Lazarus shall file any and all information returns and rendition forms as may be required by any governmental authority with respect to the Crude Oil.  In addition to any other charges to be paid by GEL hereunder, Lazarus shall pay GEL for taxes, duties, import fees, assessments or other charges (hereinafter collectively "Taxes") levied by any governmental body upon GEL's Crude Oil stored in Storage Tanks or elsewhere on Lazarus's premises and or on the storing, handling, shipping, disposing, transportation or use thereof which Lazarus may be required to pay or collect.  Lazarus shall also pay for any additional or increased Taxes levied upon GEL by reason of Lazarus's storage of: Crude Oil on, or use or occupancy of, Lazarus's Storage Tanks or premises or any building, structure or equipment thereon; provided, however, that Lazarus shall not pay any more than its proportionate share of such Taxes attributable to GEL's Crude Oil.  Such Taxes or increased or additional Taxes shall be paid by Lazarus upon receipt of written notice thereof from GEL or any Governmental Authority.

 

6.2      New Taxes.  Should any new tax, fee or levy be imposed upon Lazarus by any governmental body or agency because of Lazarus's terminal operations, or should Lazarus be required  by  new  governmental regulation to  install additional equipment or to  modify the Facility  or  standard  handling  procedures  in  order  to  continue  to  provide  the  services contemplated by this Agreement, then and in any such event, Lazarus shall be required to pay all of the amounts owed for such new tax, fee, levy, equipment cost (including installation cost) or handling cost.  In the event Lazarus shall fail to pay such Taxes or increased or additional Taxes or such new taxes, equipment costs or handling costs as provided herein, then same may be paid by GEL, and the amount thereof shall be charged to Lazarus by GEL and shall be payable with the storage or other charges next due after presentation of said invoice by GEL.   LAZARUS SHALL DEFEND, HOLD HARMLESS AND INDEMNIFY GEL, ITS MANAGER, AND THEIR RESPECTIVE PARENTS, SUBSIDIARIES AND AFFILIATES FROM AND AGAINST ANY AND ALL EXPENSES AND LIABILITY (INCLUDING WITHOUT LIMITATION   FINES,   PENALTIES   AND   REASONABLE   ATTORNEYS'   FEES)   IN RESPECT TO THE COLLECTION, DISBURSEMENT AND REPORTING OF ALL SUCH TAXES.

 

6.3      Collection of Excise Taxes.  GEL shall be solely responsible for collecting and disbursing any and all federal, state and/or local excise taxes now or hereinafter enacted and payable in respect to any and all Crude Oil delivered hereunder, and GEL shall be solely responsible for  reporting  and/or  filing  any tax  returns in  connection  with same;  provided, however, that such tax returns shall be filed by GEL only for Crude Oil that is inventory stored at the Facility.

 

 

 

 

8.1     Indemnity.    LAZARUS SHALL DEFEND, HOLD HARMLESS AND INDEMNIFY  GEL,  ITS  MANAGER,  AND  THEIR  RESPECTIVE  PARENTS, SUBSIDIARIES  AND  AFFILIATES  FROM  AND  AGAINST  ALL  CLAIMS,  LOSSES, SUITS, LIABILITY AND EXPENSE (OTHER THAN FOR CRUDE OIL LOSS, DAMAGE OR CONTAMINATION) CAUSED BY OR RESULTING FROM GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF ITS EMPLOYEES, AGENTS, OR CONTRACTORS  IN   THE   PERFORMANCE  OF   THIS  AGREEMENT.  GEL  SHALL DEFEND,  HOLD  HARMLESS  AND  INDEMNIFY  LAZARUS,  ITS  MANAGER,  AND THEIR   RESPECTIVE   PARENTS,   SUBSIDIARIES  AND   AFFILIATES   FROM  AND AGAINST  ALL CLAIMS,  LOSSES, SUITS, LIABILITY  AND EXPENSE  CAUSED BY OR RESULTING  FROM  (I)  GROSS  NEGLIGENCE  OR  WILLFUL  MISCONDUCT  ON  THE PART  OF  GEL,  ITS  EMPLOYEES,  AGENTS  OR  CONTRACTORS  (INCLUDING,  BUT NOT LIMITED  TO, ANY CONTRACTORS  TRANSPORTING CRUDE  OIL TO OR FROM THE FACILITY)  IN THE PERFORMANCE  OF THIS AGREEMENT,  AND (II) LIABILITY ARISING OUT OF THE FAlLURE OF CRUDE OIL TO MEET THE GCO PROVIDED SPECIFICATIONS  AT THE TIME OF DELIVERY.

 

 

 

8.3       Compliance  with  Regulations. GEL  shall  execute  in  its  name,  pay for  and furnish to Lazarus  all information,  documents,  labels,  placards, containers  and other materials which may be required by statutes, ordinances, rules or regulations of OSHA, Departments of Transportation  or Energy, or the Interstate Commerce  Commission  or any other governmental body  or  agency  having  jurisdiction,  relating  to  the  describing,  packaging,  receiving,  storing, handling,  disposal  or  shipping  of  the  Crude  Oil  (hereinafter  collectively  the  "Regulations"), together  with  detailed  written  instructions  as to  their  use  and  disposition.    GEL FURTHER AGREES  TO  DEFEND,  HOLD  HARMLESS  AND  INDEMNIFY  LAZARUS,  ITS MANAGER,  AND  THEIR  RESPECTIVE   PARENTS,  SUBSIDIARIES  AND  AFFILIATES FROM   AND   AGAINST   ANY  FINES,  LOSS,   DAMAGE   OR  EXPENSE   (INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEYS' FEES) RESULTING FROM VIOLATION  OF  THE  REGULATIONS  RESULTING  FROM  THE  GROSS  NEGLIGENCE OR WILLFUL MISCONDUCT OF GEL OR ITS REPRESENTATIVES OR FROM ANY PROCEEDINGS  IN WHICH SUCH A VIOLATION OF THE REGULATIONS RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF GEL OR ITS REPRESENTATIVES IS CHARGED EXCEPT WHEN DIRECTLY ARISING FROM LAZARUS'S FAILURE TO REASONABLY FOLLOW THE WRITTEN INSTRUCTIONS OF GEL.

 

8.4     Environmental Indemnity.  NOTWITHSTANDING  ANYTHING TO THE CONTRARY   IN  THIS  AGREEMENT,   LAZARUS  SHALL  ASSUME  RESPONSIBILITY FOR,  AND  SHALL   INDEMNIFY   GEL,  ITS  MANAGER,   AND   THEIR  RESPECTIVE PARENTS, SUBSIDIARIES AND AFFILIATES FROM, AND AGAINST ALL CLAIMS, WITHOUT MONETARY  LIMIT, RELATING TO THE FOLLOWING:

 

 

 

 

 

GEL shall not be liable for any delay or nonperformance of its obligations under this Agreement when any of the foregoing is caused in whole or in part by any act of God or the public enemy or by labor troubles, strikes, lockouts, non-availability of labor, riots, fires, storms, lightning, floods, hurricanes, washouts, tornadoes, explosions, breakdown or failure of or accident to the Tank, pipelines, machinery or equipment, transportation embargoes or congestions, governmental embargoes or interventions, failure or delay of manufacturers or persons from whom GEL obtains equipment, materials or supplies to deliver the same or from any law, proclamation, regulation (including environmental protection regulations) or order of any government, governmental agency or court having or claiming to have jurisdiction over any part of the Facility (as defined in Article I) or rights-of-way, cancellation or withdrawal of permits by government, governmental agencies or any other cause beyond GEL's  reasonable control, whether such other can  be of the class herein specifically provided for or not and whether the cause is or is not existing on the date of this Agreement.  In the event of destruction of or damage to Lazarus' facilities, GEL shall not be required to furnish additional or alternate facilities. If any cause listed or referred to in this Article IX should result in GEL's delay or non performance of its obligations under this Agreement for a period of more than forty-five (45) days, then GEL shall have the right to cancel the Agreement by giving Lazarus written notice of cancellation. Upon  cancellation  pursuant to this Article  IX, GEL and Lazarus  will have no future obligations or rights under the Agreement other than Lazarus's  obligation to deliver Crude Oil in its possession to GEL.

 

 

 

10.1    Option to Build Additional Facilities.  Lazarus hereby grants GEL the exclusive option (the "Option") to build additional tank storage facilities for the storage of Crude Oil at the Facility and/or related equipment,  including  but not limited to truck racks, pipelines, or other storage  or transportation  facilities  (the "Additional  Facilities"),  which Option  shall be for the entire Term.   In the event that GEL elects to exercise the Option, GEL shall provide notice of such election to Lazarus and the Parties will mutually agree on the location of the Additional Facilities.   In connection  with the Option, Lazarus agrees that it will provide, free of all costs, claims  and  liabilities,  all necessary easements,  rights-of-way,  permits  and other  access rights which are necessary for the construction and use of the Additional Facilities, including, but not limited  to, access  to  all existing  or  yet to  be constructed  interconnection  points  and  related devices  and equipment  required to connect  the Additional  Facilities  to the Facility. Notwithstanding anything to the contrary in this Section 10.1, if, after the Initial Operation Date, Lazarus receives a bona fide offer from a third party to build the Additional Facilities, Lazarus shall provide written notice of such offer (the "Offer Notice") to GEL, and GEL shall have up to 30 days after it receives the Offer Notice (the "Response Period") to give notice to Lazarus of its intent to exercise the Option.  If GEL (a) provides notice to Lazarus of its intent not to exercise the Option or (b) does not provide any response to the Offer Notice during the Response Period, then GEL shall be deemed to have waived the Option.   If during the Response Period GEL affirmatively indicates to Lazarus in writing that it will exercise the Option, then GEL shall have 180 days after receipt by Lazarus of such written notice (the "Pre-Construction  Period") to (y) negotiate the consideration  and other terms for the post-construction operation of the Additional Facilities by Lazarus, such consideration and terms to be substantially similar to those under the Interim  Agreement  and (z)  begin construction  of the Additional  Facilities.   Unless otherwise agreed  upon  by the  Parties  in  writing,  if GEL  has not  begun construction  of  the Additional Facilities by the end of the Pre-Construction Period, then GEL shall be deemed to have forever waived its right to build the Additional Facilities, and Lazarus shall be free to allow any third party to build such Additional Facilities.

 

10.2    Cost and Operation of Additional  Facilities.   In the event that GEL elects to exercise the Option provided for in Section 10.1, the costs of the construction of the Additional Facilities shall be at the sole cost and expense of GEL.  Upon completion of the construction of the Additional Facilities, Lazarus will operate such tanks on terms and for a period to be agreed to by the Parties.

 

ARTICLE XI

 

 

 

 

 

11.4     Survival  of  Obligations.    No  termination   of  this  Agreement,  for  whatever reason, shall relieve the Parties of or release the Parties from any indemnification  obligation set forth in this Agreement, or the obligations and provisions of Sections 4.4, 11.2, l.LQ.. or 11.10 of this Agreement, all of which shall survive such termination.

 

11.5   LIMITATION  OF LIABILITY.   NOTWITHSTANDING  ANY  OTHER PROVISION OF THIS AGREEMENT, NEITHER PARTY OR  ITS  AFFILIATES  SHALL HAVE  ANY  LIABILITY   TO  ANY  OTHER  PARTY   OR  ITS  AFFILIATES   FOR  ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL LOSS OR DAMAGE WHATSOEVER, OR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL (INCLUDING LOST PROFITS OR LOST INVESTMENT OPPORTUNITY) LIABILITY IN CONNECTION WITH ITS PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT,  WHETHER  SUCH  LIABILITY  ARISES  IN  CONTRACT,  TORT (INCLUDING NEGLIGENCE  AND STRICT LIABILITY), OR OTHERWISE.

 

11.6    Preservation of Liability. Neither this Agreement nor the exercise by any Party of (or the failure to so exercise) any right, power or remedy conferred herein or by law shall be construed as relieving any Party from liability hereunder.

 

11.7    Binding  Effect;  Duration.   The  rights  and obligations set forth under this Agreement are obligations that run with the land so as to be forever binding upon the Parties and their respective heirs, personal  representatives,  administrators,  successors and assigns.   Lazarus hereby agrees that GEL may file appropriate documentation in the real property county records of any jurisdiction as deemed necessary in the sole discretion of GEL to provide notice to third parties of the terms, covenants and conditions ofthis Agreement.

 

11.8    Notices. Any record, notice, demand or document which either Party is required or may desire to give hereunder shall be in writing and, except to the extent provided in the other provisions of this Agreement, given by messenger, facsimile or other electronic transmission, or United States registered or certified mail, postage prepaid, return receipt requested, addressed to such Party at its address and telecopy number shown  below, or at such other address as either Party shall have furnished to the other by notice given in accordance with this provision:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11.18  Acknowledgment of Exculpatory Provisions.  Each Party acknowledges that it (a) has had the benefit of independent legal counsel of its choosing in connection with the drafting and  negotiation of this Agreement, (b) has consulted (or had ample opportunity to consult) with its legal counsel with respect to this Agreement prior to the Effective Date, (c) has a duty to read-and has in fact read-this Agreement prior to executing it, (d) is fully informed and has notice of all of the terms and conditions of this Agreement.  Each Party further acknowledges that this Agreement obligates such Party to assume liability for and indemnify the other Party and other Persons against certain liabilities-including, in some instances, liabilities that arise from the negligence of the other Party and/or those other Persons.   Each Party agrees that it will not contest the validity or enforceability of any exculpatory provision in this Agreement on the basis that it had no notice or knowledge of the provision or that the provision is not "conspicuous."

 

[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S 13 24' 23" E, 261.29 feet (called S 13 24' E, 261.7 feet) to a four inch diameter iron pipe post fence ▇▇▇▇▇ marking the south most southeast ▇▇▇▇▇ of the tract herein described, same being the southeast ▇▇▇▇▇ of said 51.30 acre tract and re-entrant ▇▇▇▇▇ of said 200.008 acre tract;

 

N 13° 53' 37" W, 373.70 feet (called N 13° 51' W, 373.7 feet) to a fence post, and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This Interim  Throughput  Services  Agreement  ("Agreement") is made and entered  into this 11 day  of January,  2011 by and  between ▇▇▇▇▇▇▇  Petrolewn  Supply, LLC, a Delaware limited   liability   company   and  a  Genesis  Energy,   LLC  affiliate,   whose  address  is  ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇,  ▇▇▇▇▇▇▇▇▇  ▇▇▇▇▇ ("DPS"),  and  Lazarus Energy  Holdings,  LLC, a Delaware  limited  liability  company,  whose  address  is  ▇▇▇▇  ▇▇▇▇▇▇▇▇▇  ▇▇▇▇▇▇▇,  ▇▇▇▇▇  ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇  ▇▇▇▇▇ (11LAZARUS"), individually the "party" or collectively the "parties."

 

A.	Term of Agreement.

 

This Agreement shall have a term of one (1) month commencing on the date hereof, andshall automatically  be renewed for successive one (I) month terms, unless terminated by the parties as set forth in this Section III L.

B.

Tanks.

Throughput  Services  shall  be  made  available  to  DPS  through  the  utilization  of  the following Tanks:

 

Tank Number		Approximate Capacity		Product
51		10,000 Bbls		Crude
53		55,000 Bbls		Crude
54		55,000 Bbls		Crude

DPS shallnot  substitute the "Product" as specified above  without the prior written consent  of LAZARUS.  Tanks as referred to herein includes the singular and plural.

 

C.	Terminal Operating Hours.

 

LAZARUS shall ensure that the Terminal is available for Product transfers to/from the Tanks,   as  applicable for  truck. or  pipeline transfers, during   the following Operating Hours:   TERMINAL agrees   to  receive DPS's  Product from   and/or   redeliver DPS's  Product twenty-four (24) hours a day, seven (7) days a week.

D.	Services and Rates.

 

(1)

Tank Throughput Fee. DPS shall pay to LAZARUS for the use of the Tanks at the following monthly rate: $.50 per shell barrel (the "Tank Throughput Fee"). The Tank Throughput Fee shall be payable by DPS to LAZARUS in advance on or before the fifth (5th) day of each calendar month for which such Tank Throughput Fee is due; provided, however, that the Tank Throughput Fee due for the calendar month in which this Agreement commences shall be pro rated from the date of this Agreement and shall be payable upon execution of this Agreement.

 

(2)

Tanks or Pipeline Cleaning. DPS acknowledges that, at the commencement of the term  hereof,  the Tanks  and pipeline  system are acceptable for its use. Upon termination of this Agreement, DPS shall  remove its Product  from the Tanks and pipeline system  and will return the Tanks to the same condition as received.

 

(3)

Holdover. Unless this Agreement is superseded by a new agreement with respect to the subject matter thereof, pursuant to Section III L, in the event that any Product remains in the Tanks beyond the termination of this Agreement, DPS shall remain obligated to all of the terms and conditions of this Agreement. IN THE EVENT THAT LAZARUS INCURS ANY CHARGES OR LIABILITY TO THIRD PARTIES, INCLUDING BUT NOT LIMITED TO ENVIRONMENTAL LIABILITY UNDER FEDERAL, STATE OR LOCAL LAW, AS A RESULT OF DPS'S PRODUCT REMAINING IN THE TANKS AND ARISING OUT OF ANY ACTIONS OR OMISSIONS OF LAZARUS, LAZARUS SHALL BE RESPONSIBLE FOR, AND SHALL DEFEND, HOLD HARMLESS AND INDEMNIFY DPS, ITS DIRECTORS, OFFICERS, AND AFFILIATES FROM AND AGAINST ALL SUCH CHARGES OR LIABILITY.

 

(4)	Contracted  Seryices: For any service or ftmction not specifically  provided for in this Agreement,  which LAZARUS may request and DPS agrees to engage a third party to provide, ▇▇▇▇▇▇▇ ▇▇▇▇▇ pay for such services.

 

A.

Quality and Quantity. DPS acknowledges and agrees that it is familiar in all respects with LAZARUS's pipeline systems, and tank truck facilities to be provided under this Agreement. At their sole discretion, OPS shaH have a representative inspect and accept the Tanks and other fu.cilities as suitable in all respects for the Product and for DPS's needs before the initial receipt of Product by the Terminal. If DPS fails to do so, the Tanks and other facilities shall be deemed suitable in all respects for the Product and for DPS's n:▇▇▇▇. There will be no fees for mixing, blending and/or circulating Product(s) in the on-premises facilities. The degree of success, if any, from Tenninal's performance of such operations is dependent upon the particular characteristics of the Product(s) involved and is beyond the control of DPS. Unless otherwise specified in Section II, all inbound and outbound quantities of Product shall be detennined by gauging of TerminaJ>s/LAZARUS's Tanks or by Terminal's proven meters (if available). Tanks gauging shall be conducted by an independent inspector when requested, appointed by and prud for by DPS. If DPS fails to provide such inspector, LAZARUS's quantity determinations shall be conclusively presumed to be correct. In all cases, all quantity determinations shall be conclusively preswned to be correct after ninety (90) days from the date of measurement, reading, or gauging unless within such ninety (90) day period DPS objects to the quantity determination by notifying LAZARUS in writing.

 

(1)

DPS agrees to use the Tank equipment and facilities of LAZARUSfferminal only for the storage of the Product specified in Section II of thls Agreement. LAZARUS shall be responsible for any damages, .including but not limited to all environmental liabilities arising out of any actions or omissions of LAZARUS related to storage of the Product. In any event, unless this Agreement is superseded by a new agreement with respect to the subject matter thereof, pursuant to Section III L, upon termination of this Agreement or any change in Product agreed by the parties, DPS shall remove and dispose of, at its expense, all residual material from LAZARUS's/Termioal's Tanks, equipment and/or facilities at DPS?s sole cost and expense

 

 

(1)

LAZARUS shall give DPS written documentation of the receipt and/or delivery of each shipment of Product, which notice shall specify (a) the name of the carrier, (b) the carrying vehicle or vessel, (c) the custody transfer point, (d) the type, grade, quantity and quality (including H2S content) of Product as required by Terminal, (e) the estimated time of arrival thereof and (f) any other pertinent infonnation, including without limitation any and all documentation required by law concerning the receipt, handling or storage of Product. This docwnentation shall be given for each twenty four (24) hours period as to trucks, and pipeline deliveries. The handling of trucks shall be in accordance with the rules, regulations and rates set forth in Section II of this Agreement. It is DPS's sole responsibility to arrange, coordinate and expedite all carrier movements. LAZARUS will cooperate in arranging, coordinating and expediting such movements, but any such cooperation shall not constitute a waiver of the provisions ofthis Section.

 

 

 

 

 

(2)

Should any new tax, fee or levy be imposed upon LAZARUS by any governmental body or agency because of LAZARUS's Terminal operations, or should LAZARUS be required by new governmental regulation to install additional equipment or to modify its facilities or standard handling procedures in order to continue to provide the services contemplated by this Agreement, then and in any such event, ▇▇▇▇▇▇▇ ▇▇▇▇ be required to pay such new tax, fee, levy, equipment cost (including installation cost) or handling cost. In the event LAZARUS shall fail to pay such Taxes or increased or additional Taxes or such new taxes, equipment costs or handling costs as provided herein, then same may be paid by DPS, and the amount thereof shall be charged to LAZARUS by DPS and shall be payable with the storage or other charges next due after presentation of said invoice by DPS. LAZARUS SHALL DEFEND, HOLD HARMLESS AND INDEMNIFY DPS, ITS MANAGER AND THEIR RESPECTIVE PARENTS, SUBSfDlARlES AND AFFILIATES FROM AND AGAINST ANY ANDALL EXPENSES AND LIABILITY (INCLUDING WITIIOUT LIMlTATlON FINES, PENALTIES AND REASONABLE ATIORNEYS' FEES) IN RESPECT TO THE COLLECTION, DfSBURSEMENT AND REPORTING OF ALL SUCH TAXES.

 

G.

Product Lien.   LAZARUS  shall  have, and DPS hereby grants to LAZARUS,  an express contractual  lien and security  interest upon all Products at any time stored, transferred or handled hereunder for all of the charges and amounts payable by DPS to LAZARUS hereunder.  Said contractual  lien and security interest may be foreclosed  by LAZARUS in accordance  with the provisions  of Unifonn  Commercial  Code of the State  of Texas in effect from time to time.  Such liens shall not be exclusive but shall be cumulative and in addition to all other legal and equitable liens, rights and remedies of LAZARUS. Notwithstanding  anything  to the contrary  contained  herein, the lien herein provided for shall   only  be  applicable   to  indebtedness   owed  to  LAZARUS   by  DPS   under  this Agreement.

 

 

 

H.	Collection of Excise Taxes.

 

(1)

DPS shall be solely responsible for collecting and disbursing any and all federal state and/or local excise taxes now or hereinafter enacted and payable in respec to any and all Product delivered hereunder, and DPS shall be solely responsible for reporting and/or filing any tax returns in connection with same.

 

(2)

In the event  that  LAZARUS  ever  becomes  liable  for  the federal  excise  tax in connection with the handling of DPS's Product, LAZARUS shall have the right to retain  DPS's  Product  until such  time  that DPS has provided  to LAZARUS  an irrevocable letter of credit (with a bank reasonably satisfactory  to LAZARUS) or other sufficient collateral  reasonably  calculated to indemnify LAZARUS against any federal excise  taxes, fines and penalties  that LAZARUS may be or become required to pay in connection with DPS's Product.

I.	Insurance.

(l)

Product Insurance: DPS hereby acknowledges tenns specified herein do not contemplate or include liability for loss of or damage to the Product or an allowance for Hability insurance covering the Product. LAZARUS agrees to secure and maintain in effect a contract of property insurance, to the full market value of all Products stored, transferred or handled hereunder, insuring against all risks of loss, damage or contamination of the Product, including, but not limited to, evaporation, shrinkage, line loss, clingage, discoloration. contamination, damage, destruction or any other loss or damage, and to have DPS 's name inserted as an additional insured in said policies, and DPS shall be deemed to be co-insured, whether so named or not, and to secure a waiver of assignment and/or subrogation from the property underwriters in favor of DPS on account of any Product claims paid by such underwriters. Whether or not LAZARUS procures and maintains insurance as provided herein, LAZARUS shall be liable to and hold DPS, its agents and employees, its manager, and their respective parents, subsidiaries and affiliates hannless from any and all claims, demands, losses, costs and expenses for Product loss, damage or contamination, of whatsoever kind and howsoever arising. In any claim or suit for Product loss, damage or contamination, it will be presumed that such insurance, if it had been procured and maintained, would have covered the occurrence, ▇▇▇▇, damage or contamination in question. AU deductibles under such property insurance policies shall be for the account of LAZARUS. ▇▇▇▇▇▇▇ ▇▇▇▇▇ provide to DPS satisfactory evidence that it has complied with the property insurance requirements of this Agreement prior to the delivery of any Product to the Terminal.

 

(2)

Liability Insurance: LAZARUS shall secure and maintain in effect liability insurance covering their respective liabilities hereunder, including defense and indemnity obligations, with minimum limits of $5 million and including a waiver of subrogation in favor of the other party to the extent of the liabilities assumed by. the primary insured hereunder.   LAZARUS  shall provide to DPS satisfactory evidence of  compliance  with  their respective liability  insurance  requirements under this Agreement.

J.	Liability and Indemnity.

 

(1)

LAZARUS SHALL DEFEND, HOLD HARMLESS AND INDEMNIFY DPS FROM AND AGAINST ALL CLAIMS, LOSSES, SUITS, LIABILITY AND EXPENSE(OTHER THAN FOR PRODUCT LOSS, DAMAGE OR CONTAMINATION) CAUSED BY OR RESULTING FROM GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF ITS EMPLOYEES, AGENTS, OR CONTRACTORS IN THE PERFORMANCE OF THIS AGREEMENT. DPS SHALL DEFEND, HOLD HARMLESS AND INDEMNIFY LAZARUS, ITS MANAGER, AND THEIR RESPECTIVE PARENTS, SUBSIDIARIES AND AFFILIATES FROM AND AGAINST ALL CLAIMS, LOSSES, SUITS, LIABILITY AND EXPENSE CAUSED BY OR RESULTING FROM (I) GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF DPS, ITS E:MPLOYEES, AGENTS OR CONTRACTORS (INCLUDING, BUT NOT LIMITED TO, ANY CONTRACTORS TRANSPORTING PRODUCT TO OR FROM THE TERMINAL) IN THE PERFORMANCE OF TillS AGREEMENT, AND (II) LIABILITY ARISING FROM THE CHEMICAL CHARACTERISTICS OF THE PRODUCT WHETHER FOR PERSONAL INJURY, DEATH OR PROPERTY DAMAGE.

 

(2)

DPS shall not be liable for evaporation, shrinkage, line loss, clingage, or discoloration of the Product stored, transferred or handled hereunder, stored in the Tank or while the Product is in the process of being received into, stored or redelivered out of the Tank to the extent that such evaporation, shrinkage, line loss, clingage or discoloration affects an amount of Product in excess of one percent (1%) of the total amount of Product in the Tanks (the "Loss Threshold"), and DPS shall not be liable for contam-ination, damage, destruction or any other loss or damage to such Product except when caused by DPS' failUre to usc reasonable care in the safekeeping and handling of the Product. DPS shall be liable for evaporation, shrinkage, line loss, clingage or discoloration of the Product to the extent that such evaporation, shrinkage, line loss, clingage or discoloration affects an amount of Product less than the Loss Threshold. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT IN THE EVENT OF ANY LOSS OF OR DAMAGE TO DPS'S PRODUCT, DPS SHALL NEVER BE LIABLE FOR PUNlTJVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS REGARDLESS OF HOW OR BY WHOM SUCH LOSS OR DAMAGE SHALL HAVE OCCURRED OR BEEN CAUSED.

 

(3)

DPS shall execute in its name, pay for and furnish to LAZARUS/Terminal all information, documents, labels, placards, containers and other materials which may be required by statutes, ordinances, rules or regulations of OSHA, Departments of Transportation or Energy, or the Interstate Commerce Co ission or any other governmental body or agency having jurisdiction, relatmg to the describing, packaging, receiving, storing, handling, disposal or shipping of the Product (hereinafter collectively the "Regulations"), together with detailed written instructions as to their use and disposition, DPS FURTHER AGREES TO DEFEND, HOLD HARMLESS AND INDEMNIFY LAZARUS, ITS MANAGER, AND THEIR RESPECTIVE PARENTS, SUBSIDIARIES AND AFFILIATES FROM AND AGAINST ANY FINES, LOSS, DAMAGE OR EXPENSE (INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEYS' FEES) RESULTING FROM VIOLATION OF THE REGULATIONS RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF DPS OR ITS REPRESENTATIVES OR FROM ANY PROCEEDINGS IN WHICH SUCH A VIOLATION OF THE REGULATIONS RESULTING FROM TilE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF DPS OR ITS REPRESENTATIVES IS CHARGED EXCEPT WHEN DIRECTLY ARISING FROM LAZARUS'S FAlLURE TO REASONABLY FOLLOW THE WRITTEN INSTRUCTIONS OFDPS.

 

(4)	EXCEPT AS EXPRESSLY HEREIN PROVIDED, THERE ARE NO GUARANTEES OR WARRANTIES OR REPRESENTATIONS BY DPS OF ANYKIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WHETHER ARlSING BY OPERATJON OF LAW OR OTHERWISE.

 

K.

Force Majeure. DPS shall not be liable for any delay or nonperfonnance of its obligations under this Agreement when any of the foregoing is caused in whole or in part by any act of God or the public enemy or by labor troubles, strikes, lockouts, non availabil:jty of labor, riots, fires, storms, lightning, floods, hurricanes, washouts, tornadoes, explosions, breakdown or failure of or accident to the Tanks, pipelines, rna<:hinery or equipment, transportation embargoes or congestions, governmental embargoes or inte1ventLons, failure or delay of manufacturers or persons from whom DPS obtains equipment, materials or supplies to deliver the same or from any law, proclamation, regulation (including envirownental protection regulations) or order of any government, governmental agency or court having or claiming to have juriscliction over any part of the Terminal (as defined in Section I of this Agreement) or rights-of-way, cancell ation or withdrawal of permits by government, governmental agencies or any other cause beyond OPS's reasonable con1rol, whether such other can be of the class herein specifically provided for or not and whether the cause is or is not existing on the date of this Agreement In the event of destruction of or damage to LAZARUS's facilities, DPS shall not be required to furnish additional or alternate facilities. If any cause listed or referred to in this Section liT should result in DPS's delay or non performance of its obligations under this Agreement for a period of more than forty-five (45) days, then DPS shall have the right to cancel the Agreement by giving LAZARUS written notice of cancellation.   Upon cancellation pursuant to this Section HI, DPS and LAZARUS  will  have  no future obligations or  rights  under  the Agreement other  than LAZARUS's obligation to deliver Product in its possession to DPS.

(1)	The parties  enter  into  an agreement  with  respect  to  the subject  matter  hereof which expressly  superedes this Agreement, in accordance with the tenns of that certain Letter oflntent, dated December 28, 2011, between LAZARUS and DPS.

 

(2)

Without prejudice to any other right or remedy,  the unexcused failure of either party to carry out any tenn or provision of this Agreement for a period of forty­ five (45) days after written notice specifying such failure has been given by the other  party,  shall  constitute   good  cause  for  immediate   termination  of  this Agreement by such other party.

 

(3)

If use of LAZARUS's equipment and facilities for storage and/or handling of the Product is restrained or enjoined by judicial process or terminated by any governmental authority or terminated by right of eminent domain, DPS may, at its option and without liability to LAZARUS, terminate this Agreement upon forty five (45) days written notice to LAZARUS.

 

(4)	DPS provides at least thirty (30) days prior written notice to LAZARUS that DPS desires to terminate this Agreement; provided, that all Tanks have been cleaned in accordance with this Agreement, and all deposits have been paid as set forth in this Agreement.

 

(5)	LAZARUS provides at least thirty (30) days prior written notice to DPS that LAZARUS desires to terminate this Agreement, in which even DPS shall clean the Tanks in accordance with this Agreement by the end of the lease term.

 

M.	Modification.  This  Agreement  shall  not  be  modified  or  changed  except  by written instrument executed by a duly authorized officer of each of the parties hereto.

 

N.

Notices. Aoy notice by either party hereto to 1he other shall be in writing and be deemed to have been Jl'IOperly given if delivered personally or mailed, postage prepaid, to said party by certified mail, return receipt requested, addressed to such party at its address shown on the first page of this Agreement, unless and until another address shall have been specified in writing by said party.

 

 

 

 

 

 

 

 

 

This Amendment Number One to Interim Throughput Services Agreement ("Amendment") is made and entered into this .11_ day of March, 2011, by and between GENESIS CRUDE OIL,LP, a Delaware limited partnership, whose address is 919 ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇  ▇▇▇▇▇., (''GCO" or "DPS") and LAZARUS ENERGY HOLDINGS, LLC, a Delaware limited liability company, whose address is  ▇▇▇▇  ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,  ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("'Lazarus").