Exhibit 10.46

Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed by NuStar Energy L.P. with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. The omitted portions are found on Annex 3.
Omissions are designated as [****].

PEREGRINO CRUDE OIL

PURCHASE/SALE AGREEMENT

BETWEEN

STATOIL BRASIL ÓLEO E GÁS LIMITADA

AND

NUSTAR MARKETING LLC

NOVEMBER 17, 2010

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This agreement (“Agreement”) is made and entered into this 17th day of November
2010 under the following terms and conditions:

1. CONTRACT PARTIES:

 

SELLER:

   Statoil Óleo e Gás Limitada (SBOG)    Praia de Botafogo, 228/ 4th floor,
Suites 401 and 406 to 414    22250-040 Rio de Janeiro, RJ, Brazil    Corporate
Taxpayers’ Registration (CNPJ) No. 04.028.583/0001-10

 

 

 

BUYER:

   NuStar Marketing LLC    2330 North Loop 1604 West    San Antonio, TX 78248

2. DEFINITIONS:

Except where the context otherwise indicates, the following terms shall have the
meaning ascribed to them in this Clause 2, and shall include plural and
singular:

“Affiliate” shall mean any company or other legal entity directly or indirectly
owning more than fifty percent (50%) of, or otherwise controlling or being
controlled by a Party to the Agreement or any company or other legal entity
controlling or being controlled directly or indirectly by any company or other
legal entity having direct or indirect control over that Party.

“Agreement” shall mean this Peregrino Crude Oil Purchase/Sale Agreement, as it
may be amended, modified, supplemented, extended, renewed or restated from time
to time in accordance with the terms hereof, including the Annexes, Appendices
and Exhibits hereto.

“All Fast” shall mean the time during which Vessel is completely moored and
secured at the Delivery Port.

“API” shall mean American Petroleum Institute.

 

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“ASTM” shall mean American Society for Testing and Materials.

“Barrel” “bbl” or “BBL” shall mean a volume of forty-two (42) US gallons
corrected for temperature to sixty (60) degrees Fahrenheit.

“Base Quantity” shall have the meaning ascribed to it in Clause 5 “Contract
Volume and Delivery Restrictions.”

“Berth” shall mean the mooring, dock, anchorage, submarine line, single point or
single buoy mooring facility, offshore location, alongside barges or lighters or
any other place of Delivery.

“Business Day” shall mean a day on which commercial banks are open for business,
including dealing in foreign exchange and foreign currency deposits, in New
York, New York and in Rio de Janeiro, Brazil.

“Cargo” shall mean any particular quantity of the Oil Delivered or to be
Delivered unto Buyer as set out in the Agreement.

“Completion of Delivery” shall, in respect of a Cargo, mean the final
disconnection of cargo transfer hose(s)/arms(s) following Delivery.

“Customary Anchorage” shall mean recognized anchorage for or within the
designated port for Delivery.

“Day” shall mean a calendar day.

“Delivery” shall mean the placing of the Oil at the disposal of the Buyer at the
time and place agreed upon in the Agreement.

“Delivery Port(s)” shall, in respect of a Cargo, mean the port(s) nominated by
Buyer and accepted by Seller for Delivery of such Cargo in accordance with this
Agreement.

“Delivery Window” shall mean the Delivery period as determined and communicated
according to Clause 8 (“Nominations”).

“Demurrage” shall mean the time in excess of the Laytime allowed to Buyer
calculated as per Clause 18 (“Laytime and Demurrage”) and/or the agreed damages
payable by Buyer to Seller for such calculation of Demurrage or excess time for
Time Chartered Vessels.

 

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“Diluent” shall mean the oil used by the FPSO Terminal operator for the more
efficient loading of Vessels at the FPSO Terminal.

“Dollars” or “USD” or “US Dollars” or “$” shall mean dollars of the United
States of America.

“Embargoed Country” shall mean a country that is subject to a substantially
comprehensive trade embargo imposed by any of: (i) the Federative Republic of
Brazil, (ii) the Kingdom of Norway, (iii) the United States of America, or
(iv) any other country from which the sale in question is executed.

“Force Majeure” shall have the meaning set forth in Clause 10.

“FPSO Terminal” shall mean the floating production, storage and offloading
vessel installed at the Peregrino field.

“Gallon” means a U.S. standard gallon of two hundred thirty-one (231) cubic
inches at sixty (60) degrees Fahrenheit.

“Governmental Authority” shall mean any federal, state, regional, local, or
municipal governmental body, agency, instrumentality, authority or entity of the
Federative Republic of Brazil or the United States of America established or
controlled by a government or sub-division thereof, including any legislative,
administrative or judicial body, or any person purporting to act therefore.

“Guarantor” shall have the meaning ascribed to it in Clause 15 (“Security for
Payment”).

“Indemnifying Party(ies)” shall have the meaning ascribed to it in Clause 21
(“Indemnification”).

“Indemnified Party(ies)” shall have the meaning ascribed to it in Clause 21
(“Indemnification”).

“Independent Inspector” shall mean a company that is approved by the applicable
U.S. regulatory body that is mutually appointed by the Parties for reporting the
determination of quality and quantity of the Oil.

“Incoterms” shall mean the terms as published by the International Chamber of
Commerce (“ICC”) in the ICC Official Rules for the Interpretation of Trade Terms
(2000 edition).

“L.C.” shall have the meaning ascribed to it in Clause 15 (“Security for
Payment”).

 

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“Material Adverse Change” shall have the meaning ascribed to it in Clause 15
(“Security for Payment”).

“Month” means a calendar month. Where a specified Month is defined as Month “M,”
Month M-1 shall mean the Month prior to Month M and Month M+1 shall mean the
Month subsequent to Month M.

“MTSA” shall have the meaning ascribed to it in Section 30(a).

“New York Banking Days” means a Day, other than a Saturday or Sunday, on which
banks are open for general commercial business in New York, New York.

“NOR” shall mean Notice of Readiness.

“Normal Refinery Operations” shall mean periods of time when the Refinery is
operating in a routine manner with all operating units on-line and specifically
excludes both maintenance turnarounds and shutdown periods.

“NSV” shall mean net standard volume.

“NuStar” shall mean Buyer and/or any of its Affiliates.

“OCIMF” shall have the meaning ascribed to it in Clause 19 (“Lightering;
Laytime”).

“Oil” shall mean the crude oil specified in Clause 4 (“Quality”).

“Optional Quantity” shall have the meaning ascribed to it in Clause 5 (“Contract
Volume and Delivery Restrictions”).

“Part Cargo” shall mean when a Cargo is Delivered on a Vessel such that the
volume of the Cargo does not substantially fill the Vessel.

“Party” shall mean either Seller or Buyer.

“Parties” shall mean Seller and Buyer together.

“Person” shall mean an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, any other business entity or a
governmental entity (or any department, agency or political subdivision
thereof).

“Refinery” shall mean the petroleum processing and refining facilities located
in Paulsboro, NJ that are owned and operated by Buyer’s Affiliate, NuStar
Asphalt Refining, LLC.

 

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“Security Regulations” shall include the International Code for Security of
Ships and of Port Facilities (“ISPS Code”) and relevant amendments to Chapter XI
of the International Convention for the Safety of Life at Sea, and similar laws
and regulations pertaining to the security of ports, terminals and facilities.

“Third-Party Claim(s)” shall mean a claim by any Person other than: (i) Seller
or any of its Affiliates; or (ii) Buyer or any of its Affiliates.

“Transportation Facility(ies)” shall mean the Vessel and/or lightering
facilities.

“U.S.” or “United States” means the United States of America.

“USCG” means U.S. Coast Guard.

“Vessel” shall mean the tank ship or barge whether owned or chartered or
otherwise obtained by Seller and employed by Seller to transport the Oil to the
Delivery Port.

“Win Three” shall have the meaning ascribed to it in Clause 8 (“Nominations”).

“Win Ten” shall have the meaning ascribed to it in Clause 8 (“Nominations”).

“Year” shall mean a period of twelve (12) consecutive Months.

3. TERM OF AGREEMENT

The Agreement shall commence upon Seller beginning production of the Oil at the
FPSO Terminal and making Oil available for Buyer to nominate as per Clause 8
(“Nominations”). The Agreement shall expire either after; (i) thirty-six
(36) Months following Completion of Delivery of the first Base Quantity Cargo or
(ii) on December 31, 2014, whichever first occurs, and after all other
obligations under the Agreement have been fulfilled.

4. QUALITY

The Oil shall be Peregrino Crude oil of normal export quality from the Campos
Basin offshore Brazil as is made available at the FPSO Terminal at the time of
loading.

Seller warrants that the Oil at Delivery shall be at a maximum viscosity of six
hundred centistokes (600 cSt) and at a maximum temperature of one hundred and
fifty eight degrees Fahrenheit (158º F).

 

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5. CONTRACT VOLUME AND DELIVERY RESTRICTIONS

Seller shall sell and Deliver and Buyer shall purchase and take Delivery of the
Oil to its Refinery system under the Agreement as follows:

a) Base Quantity.

Except as may be expressly excused in accordance with the Agreement, in each
Year of the Agreement, during periods of Normal Refinery Operations, a volume of
Oil equal to ten thousand (10,000) Barrels per Day multiplied by the number of
Days in such Year subject to an annual tolerance of plus/minus one hundred
thousand (100,000) barrels.

During the initial production build-up at the FPSO Terminal, Seller shall have
the option to Deliver lower volumes to allow Seller to meet its other term
contractual obligations; provided that any reduction in volumes shall be
allocated among Seller’s term customers (including Buyer) on a fair and
approximately ratable basis. Seller will not sell any spot volumes before
meeting the contractual obligation to Buyer set forth above and subject to
Clause 11 b) (ii). For the purposes of this section, the initial production
build-up at the FPSO Terminal shall be the later of; (i) six (6) Months
following Completion of Delivery of the first Base Crude Quantity Cargo or
(ii) on June 30, 2012.

b) Optional Additional Base Quantity.

 

  i) Subject to paragraph b) ii) immediately below, for the period beginning on
the commencement date of the Agreement and ending at 5:00 PM (New York
prevailing time) on December 31, 2010, Buyer shall have the option to increase
the Base Quantity by an additional five thousand (5,000) Barrels of Oil per Day,
thereby increasing the Base Quantity to fifteen thousand (15,000) Barrels of Oil
per Day by giving written notice to Seller. Pricing for any such additional Oil
shall be the same as for the Base Quantity. If Seller does not receive such
written notice to increase the Base Quantity during this specified period, the
Base Quantity shall remain fixed at ten thousand (10,000) Barrels per Day for
the term of the Agreement.

 

  ii)

During the period ending at 5:00 PM (New York prevailing time) on December 31,
2010, if the additional Base Quantity option has not yet been exercised by Buyer
in accordance with Paragraph b) i) above, Seller may propose to cancel the
Additional Base Quantity

 

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option by providing written notice of this intention to Buyer. Buyer shall then
have three (3) Business Days from receipt of such notice from Seller (the
“Deadline”) to opt to take Delivery of the additional five thousand
(5,000) Barrels of Oil per Day. Pricing for any such additional Oil shall be the
same as for the Base Quantity. If Seller does not receive such written notice to
increase the Base Quantity from Buyer by the Deadline, the Base Quantity shall
remain fixed at ten thousand (10,000) Barrels per Day for the term of the
Agreement.

c) Optional Monthly Quantity.

Buyer shall have the option to purchase quantities of Oil in addition to the
Base Quantity (the “Optional Quantities”). The volume of the Optional Quantities
shall be limited to a maximum total of fifteen thousand (15,000) Barrels per Day
for each Year of the Agreement. If agreed between the Parties, the Optional
Quantities may be Delivered at a rate equal to twenty five thousand
(25,000) Barrels per Day in any Month of the Agreement.

In order to exercise this option, Buyer shall request such Optional Quantities
in accordance with the procedures set forth in Clause 8 (“Nominations”). The
Parties shall negotiate and seek agreement on a price for the Cargo or Cargoes
which constitute the Optional Quantities in accordance with Clause 9
(“Pricing”). Should Seller confirm the availability of additional quantities
meeting each request and the Parties reach agreement on price terms, then this
additional quantity (making a part of the Optional Quantity) shall be Delivered
according to the procedures in the Agreement.

d) Cargo Sizes.

The Oil shall be supplied in Cargoes in a normal range of volume between four
hundred thousand (400,000) Barrels and six hundred thousand (600,000) Barrels
into the Refinery. Seller has the option, with Buyer’s prior consent, to Deliver
Cargoes outside of the normal range of volume as specified above. Seller shall
communicate to Buyer its intention to nominate such a volume so that Buyer can
exercise its right to re-nominate subsequent Cargoes in accordance with Clause 8
(“Nominations”), and further, Seller will ensure that it can comply with any
changes to the Delivery volume(s) of subsequent Cargoes.

6. TITLE, RISK, AND DELIVERED VOLUMES

a) Title and Risk of Loss

 

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The Oil shall be Delivered Ex-Ship (“DES” per Incoterms) basis the Refinery into
two heated storage tanks solely dedicated to the storage of the Oil. Title and
risk of loss shall pass from Seller to Buyer as the Oil passes the final
permanent flange of the Vessel’s manifold connection at the Refinery.

b) Volume of Oil.

The volume of Oil Delivered shall be as determined per Clause 16 (“Inspection of
Quality and Quantity”) herein.

7. DELIVERY – VESSELS AND CARGO TOLERANCES

 

a) All Oil will be Delivered outside of U.S. Customs.

 

b) Each Vessel nominated is subject to Buyer’s acceptance, which shall not be
unreasonably withheld. The Delivering Vessel will be compatible with the
requirements of the Delivery Port and any lightering operations. Each lightering
vessel nominated by Buyer is subject to Seller’s acceptance, which shall not be
unreasonably withheld. The Parties agree to promptly advise the other for the
reason of any non-acceptance so that such Party may make reasonable efforts to
remedy, if possible, the event or cause of such unacceptability.

 

c) Seller shall Deliver Cargoes as per Paragraph C, Clause 5 (“Contract Volume
and Delivery Restrictions”) and always subject to any Refinery wharf and draft
restrictions. In addition, Seller has the option to Deliver smaller Cargoes
(with a volume outside of the normal tolerance range) if Buyer can make
commercially reasonable efforts to accommodate such variations from the normal
tolerance range. In such cases, Buyer shall have the right to re-nominate the
Delivery Window of any already nominated subsequent Deliveries so that Buyer
shall not be affected by the revised Delivery of Oil to maintain planned
Refinery operations.

 

d) In the case of any reduced draft restrictions at the Refinery, Buyer agrees
to compensate Seller for any dead freight suffered on the affected Cargoes based
on the applicable Charter Party agreement.

 

e) All Cargoes shall be subject to a volume tolerance of plus or minus five
percent (5%) in Seller’s option.

8. NOMINATIONS

 

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All nominations for Delivery of Oil under the Agreement shall be made as per
this Clause 8 (“Nominations”) and shall be subject to the approval of the FPSO
Terminal operator, which approval shall not be unreasonably withheld.

a) Base Contract Quantity.

 

  i)

Buyer shall nominate to Seller a provisional ten (10) Day Delivery Window for
each Cargo no later than forty-five (45) Days prior to the first (1st) Day of
Month M, where M is the Month of lifting at the FPSO, it being understood that
where the ten (10) Day Delivery Window Win Ten is in more than one Month(for
example, Days 1 through 5 in December and Days 6 through 10 in January), M will
refer to the first Month in that Win Ten (or, in the preceding example,
December)

 

  ii)

Seller shall confirm to Buyer a ten (10) Day Delivery Window , or “Win Ten” for
each Cargo, making commercially reasonable efforts to mirror Buyer’s Delivery
Window, no later than fifteen (15) Days prior to the first (1st) Day of Month M
described in i) above. It is agreed and understood by the Parties that Seller’s
confirmed Win Ten herein is subject to possible revision prior to the fifteenth
(15th) Day prior to the first (1st) Day of Month M described in i) above.

 

  iii) Seller shall narrow the Win Ten to a three (3) Day Delivery Window, or
“Win Three”, no later than twenty (20) Days prior to the first Day of such Win
Three.

 

  iv) In cases of unscheduled downtime at the Refinery as contemplated in Clause
11 (“Disruption to Delivery”), Buyer will have the option to take Delivery of
Oil into Buyer’s other terminals in the Caribbean and into the U.S. Gulf Coast
with Seller’s approval, which shall not be unreasonably withheld, with any
additional costs or savings for Buyer’s account.

 

  v) Should Seller include Diluent in any Cargo, at the time of loading of such
Cargo at the FPSO Terminal, Seller will advise Buyer of the quantity and nature
of the Diluent used.

 

  vi) Seller shall arrange for Vessel to notify Delivery Port of the following
estimated times of arrival (“ETA”): ninety-six (96), seventy-two (72),
forty-eight (48), twenty-four (24), twelve (12) and six (6) hours and when an
ETA changes plus or minus four (4) hours.

 

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b) Optional Quantity.

In the event that Buyer exercises the option to purchase Optional Quantities of
oil in accordance with Paragraph b) “Optional Quantity” of Clause 5 (“Contract
Volume and Delivery Restrictions”), the request for such an option shall be made
to Seller by Buyer and shall contain the following information:

 

  i) Approximate total volume required.

 

  ii) Required revisions to the appropriate Delivery Windows for all subsequent
Cargoes already nominated (either Win Ten or Win Three according to the
deadlines in Section a) of this Clause). Such revised nominations shall be made
in order to maintain the Refinery supply plan while allowing for sufficient
supply of Oil to operationally Deliver the additional volumes to the appropriate
Party at the appropriate time.

Within one (1) Business Day of receiving an Optional Quantity request from
Buyer, Seller shall confirm or reject Buyer’s request for the Optional Quantity.
If such additional volume can be Delivered, Seller will also indicate whether
Buyer’s revised nomination plan can be accepted by the FPSO terminal operator.

Should price agreement be reached between the Parties according to Paragraph b)
“Optional Quantity” in Clause 9 (“Pricing”), the new Delivery Windows shall also
be confirmed, and all appropriate procedures remaining for any revised Delivery
Windows shall be performed according to Section a) of this Clause for the Base
Quantities.

9. PRICING

a) Base Contract Quantity:

The price for the Base Contract Quantity to be sold by Seller and purchased by
Buyer hereunder shall be determined in accordance with Annex 3. The price per
Barrel net of sediment and water for the Oil delivered under the Agreement shall
be calculated using the following formula:

P = Maya + A, where “Maya” and “A” are defined in Annex 3.

b) Optional Quantity:

 

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The price per Barrel net of S&W for the contemplated volume of Oil delivered
from the optional availability contemplated in Clause 5, paragraph b) shall be
as agreed on a case by case basis between the Parties. Such price agreement
shall include all necessary differentials, pricing bases and pricing periods
required to form a completely transparent price for DES Delivery to the Delivery
Port. Such price shall be confirmed by Seller in writing to Buyer promptly after
full agreement is reached by way of an Optional Quantity Deal Confirmation in
the format as detailed in Annex 4.

10. FORCE MAJEURE

 

a) Neither Seller nor Buyer shall be responsible for any failure to fulfill
their respective obligations under the Agreement if fulfillment has been
prevented or curtailed by Force Majeure. For purposes hereof, “Force Majeure”
shall mean any circumstances whatsoever that are beyond the reasonable control
of Seller or Buyer, as the case may be, including without prejudice to the
generality of the foregoing, but not limited to:

 

  i) compliance with any order, demand or request of any government or of any
international, national, port, transportation, local or other authority or
agency or of any body or person purporting to be or to act for such authority or
agency;

 

  ii) any strike, lockout or labor dispute;

 

  iii) adverse weather, perils of the sea, or embargoes;

 

  iv) disruption or breakdown of Transportation Facilities, as long as not
caused by the Party claiming Force Majeure;

 

  v) fires, earthquakes, lightning, floods, explosions, storms, and other acts
of natural calamity or acts of God;

 

  vi) accidents at, closing of, or restrictions upon the use of mooring
facilities, docks, ports, pipelines, harbors or other navigational or
transportation mechanisms;

 

  vii) disruptions, breakdowns, explosions or accidents which may have a
materially adverse effect on storage facilities, refineries, terminals or other
facilities; and

 

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  viii) acts of war, hostilities (whether declared or undeclared) civil
commotion, blockades, terrorism, sabotage or acts of the public enemy;

provided, however, that nothing contained herein shall relieve Buyer of any of
its obligations to make payments due to Seller under the Agreement by the due
dates or according to the provisions of Clause 14 (“Payment and Additional
Capital Cost”), which obligations are absolute with respect to Cargoes received.

 

b) The Party seeking relief under (a) of this Section shall advise the other
Party in writing as soon as practicable of the circumstances causing the failure
to fulfill its obligations and shall thereafter provide such information as is
available regarding the progress and possible cessation of those circumstances,
including, to the extent feasible, the details and the expected duration of the
Force Majeure event and the volume of Oil affected. The Party claiming Force
Majeure shall notify the other Party when the Force Majeure event is terminated.
Subject to the provisions of Clause 11 (“Disruption to Delivery”), performance
of obligations under the Agreement shall be resumed as soon as reasonably
possible after such circumstances have ceased.

 

c) The Parties agree that the provisions of this Section shall not be used for
commercial gain.

 

d) In the event that either Party’s performance is suspended due to an event of
Force Majeure in excess of one hundred and twenty (120) Days from the date that
notice of such event is given, and so long as such event is continuing, the
affected Party may terminate this Agreement by written notice to the other
Party, and neither Party shall have any further liability to the other in
respect of this Agreement except for the rights and remedies previously accrued
under this Agreement.

11. DISRUPTION TO DELIVERY

The Parties agree that the provisions of this Clause shall not be used for
commercial gain.

 

a) Buyer’s Refinery System.

 

  i)

Scheduled Maintenance. Buyer shall give Seller at least ninety (90) Days’ notice
of any scheduled maintenance at the Refinery, which could affect the rate at
which Oil is Delivered, and as soon as reasonably possible. During such
scheduled maintenance, Buyer’s

 

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obligation to take Delivery of Oil from Seller will be reduced, to the extent
required, for the affected period.

 

  ii) Unscheduled Downtime. Unscheduled downtime at the Refinery due to an event
of Force Majeure shall be addressed in accordance with Clause 10 (“Force
Majeure”). During any period of unscheduled downtime not caused by an event of
Force Majeure, Buyer shall make reasonable attempts to take Delivery of Oil
under the Agreement. Should unscheduled downtime not caused by an event of Force
Majeure exceed five (5) Business Days, Buyer is entitled to request the
rescheduling of future Cargoes. However, Seller shall not be required to
reschedule or delay any Cargo that has been nominated by Buyer for Delivery
within the next forty-five (45) Day period immediately following the date Buyer
gives Seller notice of unscheduled downtime. If Seller fails to reschedule or
delay any Cargo during a period of unscheduled downtime, Buyer may re-sell the
Oil to third parties after first having offered such Oil to Seller at a
reasonable and fair market price. The Parties agree to cooperate and use
commercially reasonable efforts to reduce any supply disruptions during
unscheduled downtime.

 

b) Seller’s Production Facilities and Loading Terminal.

 

  i) Scheduled Maintenance. To the extent possible, Seller shall give Buyer at
least ninety (90) Days notice of any scheduled maintenance at the Peregrino
production field or FPSO Terminal that could affect Delivery of Oil under the
Agreement.

 

  ii) Supply Shortage. If, by reason of any of the causes described in this
Clause 11 (“Disruption to Delivery”), or by reason of production problems at the
FPSO Terminal or reduction of production by a Governmental Authority, a shortage
of supply occurs, then Seller has the right to freely withhold, reduce or
suspend Deliveries under this Agreement to a level below the nominated quantity
for that period as set forth below. Any shortage of supply shall result in
Seller first canceling any uncommitted spot volumes. If that is not sufficient
to deal with the supply shortage, then any further reduction shall be allocated
among Seller’s term customers on a fair and approximately ratable basis. For the
purposes hereof, Buyer shall be considered a term buyer of Oil.

12. DILUENT ADDITION AT THE FPSO TERMINAL

 

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Seller reserves the right to add Diluent at the FPSO Terminal during the loading
of any Cargo in order to control the viscosity of the Oil to enable safe and
efficient transportation of the Oil to Buyer. If such process occurs, then
Seller shall promptly advise Buyer of the volume of Diluent that is added. The
maximum amount of Diluent to be added shall be five percent (5%) of the total
volume of the Cargo and Seller will make commercially reasonable efforts to
minimize the quantity of Diluent.

13. COOPERATION WORDING

A minimum of eighteen (18) Months prior to the end of the Agreement, the Parties
agree to discuss in good faith a new agreement for Oil supply after the
completion of this Agreement, should it be in the Parties mutual interest to do
so.

14. PAYMENT AND ADDITIONAL CAPITAL COST

Payment for each Cargo shall be made forty-five (45) Days after the bill of
lading date at the FPSO Terminal (bill of lading date equals zero) and shall be
made without discount, deduction, withholding, set-off or counter claim in U.S.
Dollars by telegraphic transfer of immediately available funds (“same day
funds”) on or before the due date to the bank and account designated by Seller,
against presentation to Buyer of the documents expressly specified for
presentation for payment in accordance with Clause 22 (“Documents”), or in
absence of such documents upon presentation of Seller’s Letter of Indemnity as
set out in Clause 22 (“Documents”). In no event will any payment be made prior
to Completion of Delivery to Buyer.

For each Cargo, Buyer is responsible for, and Seller will include on its
invoice, an interest charge for the period starting thirty (30) Days after the
bill of lading date at the FPSO Terminal and ending on but excluding the
forty-fifth (45th) Day after the bill of lading date at the FPSO Terminal on the
basis of an annual rate corresponding to the three (3) month London Interbank
Offered Rate (“LIBOR”) (or such other interest rate as may be issued in
replacement thereof) plus one (1.0) percentage point.

Unless otherwise agreed to between the Parties, interest on overdue payments
shall be paid for the period starting on and including the due date and ending
on but excluding the value date of the payment, on the basis of an annual rate
corresponding to LIBOR (or such other interest rate as may be issued in
replacement thereof) plus three (3.0) percentage points.

If delivery is not completed forty-five (45) Days after the bill of lading date
at the FPSO Terminal payment for Cargo shall be made to Seller promptly within
forty-

 

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eight (48) hours after Completion of Delivery. If delivery is not completed
forty-five (45) Days after the bill of lading date at the FPSO Terminal for any
reason directly related to Seller or the Vessel, no interest shall be payable
from Buyer to Seller.

In the event the payment due date falls on a Saturday or a New York banking
holiday other than a Monday, then payment will be effected on the preceding New
York Banking Day. If the payment due date falls on a Sunday or a Monday which is
a banking holiday in New York, then the payment shall be effected on the next
New York Banking Day.

15. SECURITY FOR PAYMENT

 

a) Guaranty. Buyer’s ultimate parent company, NuStar Energy L.P. (“Guarantor”),
shall provide a parent company guaranty in a format, for a term and in an amount
that are acceptable to Seller. Based on Seller’s continued review and
Guarantor’s provision of a valid guaranty, Seller may provide an uncommitted
line of credit (for the purposes of this Clause “uncommitted” means a line of
credit that can be increased or decreased at any time), provided that there is
no Material Adverse Change to Buyer’s creditworthiness.

 

b) Letter of Credit; Pre-Payment. In the event that the uncommitted line of
credit is not sufficient to cover the anticipated open sales, Buyer shall post
an irrevocable stand-by letter of credit (“L.C.”) in a form and from a bank
reasonably acceptable to Seller at least three (3) New York Banking Days prior
to the first day of the Delivery Window for each Cargo or Partial Cargo. At
Buyer’s option, Buyer may instead provide, in lieu of the L.C. described in the
preceding sentence, a pre-payment three (3) New York Banking days prior to the
first Day of the Delivery Window. Seller shall pay Buyer interest for any such
prepayments based on the actual number of Days Buyer has prepaid early basis a
three hundred sixty (360) Day term at the overnight LIBOR rate. In the case of
an irrevocable stand-by letter of credit, Buyer must pay for all opening banking
charges related to any letter of credit all other charges shall be for the
account of the Seller.

In the event that the above payment security requirements are not met by Buyer,
Seller shall have, in its sole discretion the option to terminate this Agreement
without prejudice to any other rights or remedies hereunder.

For the purposes hereof, “Material Adverse Change” shall mean any change to
Buyer or its ultimate parent company that materially adversely affects the
creditworthiness of Buyer so as to reasonably and materially impair Buyer’s
ability to perform its obligations under this Agreement and which is not cured

 

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within ten (10) New York Banking Days. Material Adverse Change shall include,
but is not limited to, the following; any changes to the financial condition,
operations, business or prospects, including Buyer’s or Guarantor’s substantial
default under any credit instrument, failure to pay when due any principal of or
interest on any indebtedness of a substantial amount, or a substantial final
judicial or administrative judgment (in each case, “substantial” shall mean no
less than $50 million).

If a Material Adverse Change occurs, Seller may, at any time before payment has
been received by Seller, require Buyer to provide a stand-by letter of credit
or, at Buyer’s option in lieu of such stand-by letter of credit, Buyer may elect
to pre-pay any such payment (a “pre-payment’). Each such pre-payment shall be
for an amount to cover the estimated value of the Cargo for which the
pre-payment is being provided, and each such stand-by letter of credit shall be
(i) irrevocable and unconditional, (ii) in an amount equal to the estimated
value of the Cargo for which the stand-by letter of credit is being provided
(iii) issued in favor of Seller, by a bank or banks to be approved by Seller in
Seller’s reasonable discretion, and (iv) in a form reasonably acceptable to
Seller.

If a pre-payment or stand-by letter of credit has not been provided within ten
(10) New York Banking Days after Seller’s request thereof as a result of the
occurrence of a non-payment or a Material Adverse Change, then this Agreement
shall be deemed, without prejudice to any other rights or remedies hereunder,
terminated.

16. INSPECTION FOR QUANTITY AND QUALITY

 

a)

The quality and quantity of Oil Delivered by Seller to Buyer shall be determined
by an Independent Inspector acceptable to both Parties whom shall be appointed
by Seller. Acceptance of the Independent Inspector shall not be unreasonably
withheld by either Party. The costs of the Independent Inspector shall be shared
equally between the Parties. The Independent Inspector’s determinations as to
quantity, quality and line displacements/verification shall be in accordance
with the latest edition of API Manual of Petroleum Standards and will be binding
on both Parties and shall form the basis for invoicing, except for cases of
manifest error or fraud. Seller reserves the right to have, at Seller’s cost, a
representative to attend the Delivery and witness all aspects of the measurement
of the Oil outlined below, including, but not limited to, witnessing of shore
tank gauging, meter setting and any analysis. Buyer shall arrange necessary
clearance for Seller’s representative to gain access to all areas necessary to
conduct such witnessing. Seller will ensure that Seller’s representative
supplies his/her own Personal Protective Equipment (PPE) and follows all
established applicable

 

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laws, regulations, safety guidelines and policies while on Buyer’s grounds. Such
clearance shall not be unreasonably denied, but Buyer reserves the right to
reasonably deny access or eject representatives who do not comply with the
requirements of the preceding sentence.

 

b) The quantity determined will reflect full deduction for sediment and water,
measured in accordance with the latest API/ASTM standards and methods in effect
at the time of Delivery, as determined from a representative sample drawn by an
automatic in-line sampler*. In the event that an automatic in-line sampler is
not available, malfunctions during the transfer, the Independent Inspector
cannot verify the integrity of the sampler or the sampler container before or
after Delivery, or the Independent Inspector determines that the samples drawn
by such sampler are not representative of the Oil on board the Vessel on arrival
at the Delivery Port, then sediment and water deduction shall be determined from
Vessel’s arrival volumetrically correct composite sample plus free water.

 

c) The measurement of the quantity of Oil shall be carried out at the Delivery
Port in accordance with the latest API standards in effect at the time of
Delivery. The quantity of Oil shall be determined by any of the following
methods, in order of preference: (i) first, by proven meters at the Delivery
Port; (ii) second, if meters are unavailable, not proven, not functioning
correctly, then the outturn quantity shall be based on static shore tank
measurements at the Delivery Port with said static shore tanks being in optimum
measurement condition per API standards; including receiving shore tanks shall
contain sufficient product prior to receipt, to insure that the floating roofs
are afloat and clear of the critical zone by a minimum of six (6) inches, and
(iii) third, if shore tank(s) do not meet the standards noted in
(ii) immediately above and/or become active at any time during the transfer,
then by vessel figures on arrival, adjusted by a qualifying vessel experience
factor (“VEF”) as determined in accordance with API Chapter 17 section 9.

 

d) Line displacements/verifications (ship/shore or inner plant line circulation)
will be performed in accordance with API recommended practices. Any delays
incurred while in dispute after the first line displacement, including the
carrying out of a second displacement, and until Delivery has resumed, shall be
shared equally between the Parties.

*The use of an automatic in-line sampler, if available, is subject to the
successful completion of Seller’s inspection of the shore tanks, meters, and
other relevant equipment at the facility in question.

17. BERTH AND DELIVERY PORT

 

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a) Buyer shall exercise due diligence to provide a safe Berth free of all
wharfage, dockage and quay dues, which the Vessel can safely reach and leave; at
which she can lie and unload safely afloat, provided the vessel meets refinery
requirements. However, neither Buyer nor the Refinery shall be deemed to have
warranted the safety of public channels, fairways, approaches thereto,
anchorages or other publicly maintained areas and shall be under no liability in
respect thereof.

 

b) All service fees associated with the normal Delivery of Oil, including but
not limited to those for mooring, fresh water, steam, and all duties, taxes and
charges on the Vessel, including but not limited to fleeting and freight, shall
be for Seller.

 

c) Any cost associated with the Delivery of the Oil into another port(s) other
than the Refinery shall, unless for Seller’s or Vessel’s reason, be for the
account of Buyer. Any such other port(s) shall be as mutually agreed to between
the Parties.

 

d) Any cost of shifting to or from a Berth or another Berth, unless for Seller’s
or Vessel’s reason, shall be for the account of Buyer.

 

e) Seller shall ensure that Vessel shall comply with all applicable laws, rules,
and/or regulations of the federal, state, and local governmental, local and port
authorities at the Delivery Port.

 

f) The responsibility for the costs related to any stand-by or hold-in tugs
required at the Delivery Port shall be as agreed per discussions between the
Parties and shall be determined on a case-by-case basis.

18. LAYTIME AND DEMURRAGE

 

a) Time Allowed.

 

  i) Laytime allowed to Buyer for Seller to make Delivery of the Cargo shall be
thirty-six (36) hours, unless the Cargo is a Part Cargo.

 

  ii) In the event the Cargo is a Part Cargo, the laytime shall be pro rata of
the total laytime allowed for a full cargo according to this Clause. However,
the minimum allowed time to the Buyer shall be twelve (12) hours for a Part
Cargo.

 

  iii) The laytime allowed under this Agreement shall include Sundays and
holidays and during night.

 

b) Commencement of Time.

 

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  i) For laytime to commence a valid NOR shall be tendered by the Vessel to the
Buyer and/or any of their representatives (as the case may be) upon arrival at
the customary anchorage or the place where the Vessel is ordered to wait for
Delivery, whichever is applicable. NOR shall be given to the Delivery Port by
the Master, Captain, or Master’s Agent by electronic mail, facsimile, or letter.
If NOR is tendered prior to meeting the above criteria, the date and effective
time of the NOR will not be deemed tendered until said requirements have been
met.

 

  ii) If Seller fails to confirm a Win Ten or Win Three for in excess of 24
hours after the periods provided in Clauses 8.a.ii. and 8.a.iii, , laytime shall
not commence until the Vessel is All Fast to the dock and the associated costs
and expenses are for the account of Seller; provided, however, that the
foregoing with respect to costs and expenses shall not apply unless Buyer has
made reasonable efforts to contact Seller to prompt a response during the
referenced 24 hours.

 

  iii) For a Vessel tendering NOR within the Delivery Window as per Clause 8
(“Nominations”), laytime shall commence the earlier of six (6) hours after a
valid NOR is tendered or when Vessel is All Fast at the Berth.

 

  iv) For a Vessel tendering NOR prior to the first Day of the Delivery Window
as per Clause 8 (“Nominations”); laytime shall commence the earlier of six
(6) hours on the first (1st) Day of the said Delivery Window, or when the Vessel
is All Fast at the Berth.

 

  v) For a Vessel tendering NOR after the last Day of the Delivery Window as per
Clause 8 (“Nominations”), and without prejudice to Buyer’s rights under the
Agreement, (and Buyer shall make best efforts to berth the Vessel as soon as
possible after arrival); laytime shall commence when the Vessel is All Fast at
the Berth.

 

c) Completion of Time.

Laytime shall cease upon Completion of Delivery.

 

d) Exemptions to Time.

The following shall not count as laytime, or as Demurrage if the Vessel is on
Demurrage:

 

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  i) Any time attributable to the Seller, Vessel, Vessel operator, Vessel agent,
owner, master, officers, or crew, including:

 

  (a) violation of operating and/or safety regulations of the Refinery (or
applicable laws), or

 

  (b) failure to obtain or maintain the appropriate certificates of financial
responsibility, or

 

  (c) Time spent on inward passage, which includes moving to or from any
lightering area or customary Anchorage until the Vessel is All Fast at the
Refinery, or

 

  (d) Time spent in handling, loading/discharging, or shifting ballast, bilges,
slops or bunkering, or cleaning unless conducted concurrently with Cargo
transfer or other operation, or

 

  (e) Awaiting customs and immigration clearance, or

 

  (f) Strike, lockout, stoppage, or restraint of labor of Master, officers
and/or crew of the Vessel, tugs or pilots, or

 

  (g) Unseaworthiness of the Vessel, or

 

  (h) The cargo not being as was represented in this Agreement, or

 

  (i) Negligence of the Vessel, or

 

  (j) Due to breakdown of the Vessel, or

 

  (k) Awaiting tide, tugs, pilots, but excluding daylight pilots, or

 

  (l) Due to the appropriate authority imposing measures and/or restrictions on
the transfer of cargo under the auspices of the relevant Security Regulations,
or

 

  (m) Failure to be in compliance with the applicable USCG regulations, or the
failure to have other legally required documentation, including but not limited
to the Certificate of Compliance, or

 

  (n) Due to escape or threat of escape of Oil from the Vessel.

 

e) Time to Count as Half.

The following shall count as half laytime or half Demurrage:

 

  i) Breakdown or failure of equipment or machinery at the Refinery,

 

  ii) Time lost due to weather and/or sea conditions including, but not limited
to, tide, traffic, lightning, ice, fog, storm, wind, waves and/or swell,

 

  iii) Time lost due to random security inspections pursuant to any of the
Security Regulations,

 

  iv) Time lost in moving the Vessel due to blockage or closure of the port
beyond the control of Buyer or Seller.

 

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  v) Any time lost due to an event of Force Majeure.

 

  vi) Delays in berthing, loading and/or discharging for any reason attributable
to Security Regulations other than stipulated in Sections a through f of Clause
30.

 

f) Seller’s Warranty

Seller warrants that Vessel is capable of Cargo transfer within twenty-four
(24) hours (seven [7] hours more if crude oil washing is conducted) or can
maintain back pressure of one hundred pounds per square inch (100 PSI) at
Vessel’s manifold provided the Refinery permits. Time lost as a result of Vessel
being unable to transfer the Cargo as warranted above shall be adjusted as per
the ASDEM pumping performance calculation. If stripping or internal stripping is
conducted, an additional two (2) hours will be allowed for such operation. Any
time spent or lost, and over the aforementioned twenty-four (24) hour warranty
(as adjusted herein for crude oil washing and/or stripping and/or internal
stripping) shall not count as used Laytime or time on Demurrage, if on
Demurrage. Seller agrees it will use reasonable efforts to have Vessel maintain
back pressure of greater than one hundred pounds per square inch (100 PSI), to
the extent such Vessel may safely do so.

 

g) Demurrage

 

  i) If the Laytime is exceeded, Buyer shall, subject to the provisions of this
Clause, pay demurrage to Seller in respect of such excess time.

 

  ii) In the event that any delay in Delivery is due to Buyer’s actions or
otherwise for Buyer’s account hereunder, the rights of Seller against Buyer with
respect to such delay shall be limited to a claim for Demurrage in accordance
with the terms and conditions of this agreement.

 

  iii) The demurrage to be paid shall be calculated at the agreed demurrage rate
per day pro rata for part of a Day.

 

  (a) for Delivery by spot-chartered Vessel, the rate shall be that of the
relevant charter party for that voyage.

 

  (b) For Delivery by term or time-chartered transportation, the demurrage rate
shall be that agreed between Buyer and Seller representing the market rate for
the appropriate/applicable size of Vessel on or around the date of fixing as
shall be assessed by a mutually agreed independent and reputable broker.

 

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  iv) In no event shall Buyer be liable for a demurrage claim if such claim,
supported by appropriate available documentation, is not received by Buyer in
writing within ninety (90) Days of Delivery.

 

  v) Agreed demurrage shall be paid by Buyer to Seller no later than thirty
(30) days after agreement. In the event that payment has not been made by the
due date, interest on overdue payment shall be calculated in accordance with
Clause 14. (“Payment and Additional Capital Cost”).

 

  vi) No claims for special, indirect, incidental, exemplary, punitive, or
consequential damages of any nature, including any loss of revenue, profit, or
goodwill, shall be made by either Party relating to demurrage.

19. LIGHTERING

Lightering of the Vessel at the Delivery Port shall only be with the written
consent of Seller which shall not be unreasonably withheld. Lightering at
Seller’s request shall be at Seller’s expense. If lightering is requested by
Buyer, the cost and expense of such lightering shall be for Buyer’s account and
all time used in such lightering together with all delay consequent thereupon
shall count against Laytime or time on demurrage. Buyer’s lightering vessel
shall be acceptable to and approved by Seller. Such acceptance shall not be
unreasonably withheld. Lightering shall be conducted in accordance with the
latest Oil Companies International Marine Forum, or OCIMF, guidelines for
ship-to-ship transfers.

20. WARRANTIES

 

a) Seller warrants that the Oil shall conform to the description and
specifications stated herein, that Seller has good and marketable title to the
Oil, that Seller has full right and authority to transfer such title and effect
Delivery of such Oil to Buyer, and that the Oil shall be Delivered free and
clear of any and all royalties, load port taxes, claims, liens and encumbrances.
There are no other guarantees or warranties, expressed or implied, of
merchantability, fitness, or suitability of the Oil for any particular purpose.
Seller shall not be responsible in any respect whatsoever for any loss, damage
or injury resulting from any hazard inherent in the nature of the Oil, due to a
naturally occurring substance in Oil.

In no event shall Seller be liable for any claim regarding the quality of the
Oil or quantity of any Cargo, unless such claim has been submitted by Buyer to
Seller in writing, including reasonable details of the specific facts on which
the

 

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claim is based and supporting documentation, within ninety (90) Days of the date
of Completion of Delivery. Should Buyer fail to submit such claim or provide
such details and/or any documentation within the above time limit, then any
liability of Seller for any such claim shall be extinguished

21. INDEMNIFICATION

 

a) Each Party (referred to as the “Indemnifying Party”) shall defend, indemnify
and hold the other Party (the “Indemnified Party”) harmless from and against any
and all losses, costs, damages and expenses of any kind (including penalties and
reasonable attorney’s fees) directly or indirectly arising from the Indemnifying
Party’s (i) breach of this Agreement; (ii) failure to comply with applicable
laws and regulations with respect to the sale, transportation, storage, handling
or disposal of the Oil, unless such liability results from the Indemnified
Party’s negligence or willful misconduct; or (iii) breach of representations,
covenants or warranties made herein.

 

b) The Parties’ obligations to defend, indemnify, and hold each other harmless
shall not vest any rights in any third party (whether a Governmental Authority
or private entity), nor shall they be considered an admission of liability or
responsibility for any purpose other than as specified herein.

 

c) Each Party shall notify the other as soon as practicable after receiving
notice of any suit brought against it within this indemnity, shall furnish to
the other the complete details within its knowledge and shall render all
reasonable assistance requested by the other in defense of such suit. Each Party
shall have the right but not the duty to participate, at its own expense, with
counsel of its own selection, in the defense and settlement thereof without
relieving the other of any obligations hereunder. No claim hereunder may be
settled or compromised (i) by the Indemnified Party without the consent of the
Indemnifying Party or (ii) by the Indemnifying Party without the consent of the
Indemnified Party.

22. DOCUMENTS

Seller shall provide the following documents to Buyer: i) Seller’s commercial
invoice (e-mail or fax format acceptable); ii) copies of the certificate of
quantity and quality at Delivery Port; iii) a copy of the certificate of origin;
iv) a non-negotiable Conhecimento de Transporte Aquaviário de Cargas (“CTAC”)
and v) two (2) original clean-on-board marine bills of lading issued or endorsed
to the order of Buyer; and master’s receipt for one (1) of three (3) original
clean-on-board marine bill of lading.

 

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If documents under iv) above are not available to Buyer when payment is due,
Seller shall provide to Buyer a letter of indemnity according to the following:

Quote

LETTER OF INDEMNITY

We refer to a cargo of              Barrels of              crude oil (Cargo)
Delivered from Vessel              at the port of              on             

Although we have sold and transferred title to the said Cargo to you, we have
been unable to provide you with the documents specified under the Agreement.

In consideration of your paying to us USD              being the full purchase
price of the above Cargo, we hereby expressly warrant that we have good and
marketable title to such crude oil free and clear of any royalties, load port
taxes, adverse claims, liens and encumbrances and that we have full right and
authority to transfer such title to you and to effect delivery of the said crude
oil.

We agree to protect, defend, indemnify and hold you harmless from and against
any and all damages, costs, legal fees and other expenses which you may suffer
from any breach of the above warranties or from the fact that you are paying us
the purchase price of the above Cargo without having in hand such documents as
specified under the Agreement, including but not limited to, any claims or
demands which may be made by any holder or transferee of any of the original
bills of lading and other shipping documents or by any other third party
claiming an interest in or lien on the Cargo or proceeds thereof.

We will make all reasonable efforts to obtain and surrender to you, as soon as
possible, the documents specified under the Agreement and this Letter of
Indemnity shall become null and void upon our tendering all such documents to
you.

Our obligation to indemnify you is subject to the condition that you give us
prompt notice of the assertion of any claims and full opportunity to conduct the
defense thereof, and that you do not settle any such claim(s) without our
approval.

This Letter of Indemnity shall be governed by and construed in accordance with
the laws of the State of New York and any disputes hereunder that cannot be
settled by mutual agreement between the Parties shall be subject to the
exclusive jurisdiction of the New York state courts for the Borough of
Manhattan.

Unquote

 

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23. DISPOSAL

The Buyer shall not knowingly sell, supply or deliver, directly or indirectly,
the Oil to an Embargoed Country in contravention of applicable trade embargo
requirements of Federative Republic of Brazil, the Kingdom of Norway or the
United States of America or any other country from which the Agreement is
executed.

The Seller undertakes to inform the Buyer as soon as practicable of any changes
in laws, regulations, rules or guidelines that become known to the Seller. At
any time the Seller may require the Buyer to provide any relevant documents for
the purpose of verifying the final destination of the Oil and the Buyer
undertakes to advise the Seller, upon request, of the destination of the Oil. If
at any time before delivery of the Oil, importation of the Oil at the designated
delivery terminal is prohibited by order of the Governmental Authorities of the
country in which the Oil has been produced or loaded or is to be imported, then
the Buyer shall arrange for delivery at an acceptable alternative port that is
not subject to any such prohibition. Any resulting additional costs incurred by
the Seller as a result of such alternative Delivery shall be refunded promptly
to the Seller by the Buyer.

In the event the Oil is disposed of by the Buyer to a third party in whole or
part, the Buyer shall ensure that all end users of the Oil abide by the
provisions set forth herein of this Clause and without delay provide the Seller
with all relevant information as the Seller may require related to such
alternative disposal including name of end user, name of refinery and any other
relevant information the Seller may reasonably deem necessary.

The Buyer’s failure to comply with any of the provisions of this Clause shall
entitle the Seller (without prejudice to any other rights and remedies it may
have under the Agreement) to cancel the Agreement, suspend further deliveries of
Oil under the Agreement or dispose of any undelivered Oil as it deems fit.

24. TAXES, DUTIES AND CHARGES

 

a) Ordinary agency fees, towage, pilotage and similar port charges, port duties
and other taxes against Vessel at the Delivery Port, shall be paid by Seller.

 

b) Buyer is the importer of record and shall comply with all applicable
governmental regulations governing said importation, procure all necessary
licenses and permissions, and shall pay or cause to be paid all duties, imposts
and taxes for its importation. Seller shall provide Buyer with sufficient
information to timely facilitate such importation and reporting.

 

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c) Seller shall be responsible for all duties, taxes and customs fees related to
the exportation of the Oil at the port of loading.

 

d) If value-added tax (“VAT”), goods and services tax (“GST”), sales tax and/or
other similar taxes apply, they should be separately identified on Seller’s
invoice and collected and paid by Seller to the appropriate Governmental
Authority.

 

e) Buyer and Seller shall comply with any tax treaties that may be in place
between the Federative Republic of Brazil or the United States of America.

25. SUSPENSION AND TERMINATION

 

a) Each Party may, so long as the events listed in Paragraphs i through viii
below continues, at its sole discretion and in addition to any other legal
remedies it may have, forthwith upon giving notice to the other Party either
suspend Deliveries of the Oil or terminate the Agreement if:

 

  i) as applicable to Seller, Buyer for any reason whatsoever fails to make any
payment due to Seller under the Agreement by due date; or

 

  ii) the other Party is in substantial or material breach of its obligations
under the Agreement; or

 

  iii) as applicable to the other Party, Buyer fails to take Delivery, or Seller
fails to make Delivery, of the Oil in accordance with the provisions of the
Agreement and such failure is not excused by any other provision of the
Agreement; or

 

  iv) a petition is filed with a court having jurisdiction or an order is made
or an effective resolution is passed for the dissolution, liquidation or winding
up of the other Party or its parent company; or

 

  v) there is a more than fifty one percent (51%) change in the direct or
indirectly ownership of the other Party; or

 

  vi) the other Party or its parent company becomes insolvent or is adjudged
bankrupt or makes an assignment for the benefit of its creditors or does not
pay, or is in Buyer’s or Seller’s, as applicable, reasonable opinion expected to
be unable or unwilling to pay, its debts as they become due; or

 

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  vii) a receiver is appointed or an encumbrancer takes possession of the whole
or a significant part of the assets or undertaking of the other Party or its
parent company; or

 

  viii) the other Party or its parent company ceases or threatens to cease to
carry on its business or a major part thereof or a distress, execution or other
process is levied or enforced or sued out upon or against any significant part
of the property of the other Party or its parent company and is not Delivered
within fourteen (14) Days.

 

b) If pursuant to the provisions of this Clause, a Party withholds, reduces or
suspends deliveries or receipts of the Oil, then such Party shall be under no
obligation to make up any quantity of the Oil which would have been delivered or
received but for such withholding, reduction or suspension.

 

c) Any termination of the Agreement shall be without prejudice to the rights and
obligations of each Party that have accrued as of the date of termination.

 

d) The Parties agree that if at any time during the term of the Agreement, any
laws or regulations are changed or new laws or regulations have become or are
due to become effective, whether by law, decree or regulation or by response to
the insistence or request of any governmental or public authority or any person
purporting to act for such organizations, and the material effect of such
changed or new law or regulation is

 

  i) not covered by any other provision of the Agreement;

and

 

  ii) has or will have a material and substantial adverse economic effect on the
Seller or Buyer,

then the affected Party shall have the option to negotiate in good faith with
the unaffected Party based on such changed or new laws or regulations the
price(s) or other relevant terms of the Agreement. Such option may be exercised
by the affected Party at any time after such changed or new laws or regulations
are notified by giving notice to the unaffected Party. Such notice shall contain
the new price(s) or terms and conditions proposed by the affected Party and the
information explaining the material and substantial adverse economic affect that
it imposes on the affected Party. If the Parties do not agree upon the new
price(s) or terms and conditions within thirty (30) days after the date of the
affected Party’s notice, the unaffected Party shall have the right to terminate
the Agreement immediately at the end of such thirty (30) Day period. Any Oil
Delivered during such thirty (30) Day period shall be sold and purchased at the
price(s) and on the terms and conditions

 

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specified under the Agreement without any adjustment in respect of the new or
changed regulations.

26. LIABILITY

Except for Third Party Claims for such damages, the Parties’ liability for
damages under this Agreement is limited to direct, actual damages only and
neither Party shall be liable for lost profits or other business interruption
damages, or special, consequential, punitive, exemplary damages, in tort,
contract or otherwise, of any kind, arising out of or in any way connected with
the performance, the suspension of performance, the failure to perform, or the
termination of this Agreement. Each Party acknowledges the duty to mitigate
damages hereunder.

27. ASSIGNMENT

Neither Party shall assign any of its rights and obligations under the
Agreement, in whole or in part, without the prior written consent of the other
Party. The assigning Party shall remain jointly and severally liable for the
full performance by the assignee(s) or any subsequent assigns(s) of its/their
obligations with regard to the Agreement. Seller shall, however, have the right
to assign all or part of its rights and obligations under the Agreement to an
unaffiliated party which is a Peregrino equity partner with Seller subject to
Buyer’s acceptance which shall not be unreasonably withheld.

28. APPLICABLE LAW, LITIGATION AND ARBITRATION

 

a) Except as provided in this Clause, the existence, validity, interpretation
and enforcement of the Agreement, and any controversy, claim or dispute there
under, whether in contract, tort, equity or otherwise, shall be governed by,
construed and enforced in accordance with the laws of the State of New York
(without reference to its choice of law doctrine). The United Nations convention
on contracts for the international sale of goods (1980) shall not apply.

 

b) The Parties shall make every attempt in good faith and within ten (10) Days
following receipt from either Party of a written notice of such controversy,
claim or dispute, to resolve by mutual agreement such controversy, claim or
dispute by direct dialogue between senior management of both Parties. If a
resolution is not achieved within thirty (30) Days from the initiation of such
discussions, the matter shall be settled as provided in this Clause.

 

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c) Except as provided for in Paragraphs (d), (e) and (f) below, each Party
irrevocably: (i) submits to the exclusive jurisdiction of the United States
Federal District Court for the Southern District of New York located in the
Borough of Manhattan or, if such court declines to exercise or does not have
jurisdiction, in any New York state court in the Borough of Manhattan, and to
service of process as provided by New York law, and (ii) waives any objection
which it may have at any time to the laying of venue of any proceedings brought
in any such court, waives any claim that such proceedings have been brought in
an inconvenient forum and further waives the right to object, with respect to
such proceedings, that such court does not have jurisdiction over such Party.
Further, each Party waives, to the fullest extent permitted by applicable law,
any right it may have to a trial by jury in respect of any proceedings relating
to this Agreement. Nothing in the Agreement precludes either Party from bringing
proceedings in any other jurisdiction in order to enforce any judgment obtained
in any proceedings referred to in this Paragraph, nor will the bringing of such
enforcement proceedings in any one or more jurisdictions preclude the bringing
of enforcement proceedings in any other jurisdiction.

 

d) Any controversy, claim or dispute (other than such as described in Paragraphs
(e) and (f) below) that may arise in connection with or as a result of this
Agreement, where the amount in dispute does not exceed the sum of USD two
hundred and fifty thousand ($250,000.00), and which the Parties are unable to
resolve by mutual agreement, shall be settled by arbitration in New York, New
York before three (3) disinterested arbitrators in accordance with the
international arbitration rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof, provided, however, that the Parties may mutually
elect to proceed with only one (1) arbitrator. Each Party shall appoint one
(1) arbitrator and the third (3rd) arbitrator, who shall act as chairman, shall
be appointed by the American Arbitration Association, provided that each
arbitrator shall be knowledgeable and experienced in the international sale and
purchase of crude oil. The arbitration shall be conducted in English, and the
arbitral award shall be final and binding on both Parties without appeal to any
court. Any controversy, claim or dispute (other than such as described in
Paragraphs (e) and (f) below) that may arise in connection with or as a result
of this Agreement, where the amount in dispute equals or exceeds the sum of USD
two hundred and fifty thousand ($250,000.00), and which the Parties are unable
to resolve by mutual agreement, shall be settled pursuant to the provisions of
Paragraph (c) herein.

 

e)

Any controversy, claim or dispute that may arise in connection with or as a
result of Clause 18 (“Laytime and Demurrage”) or Clause 16 (“Inspection for
Quantity and Quality”), where the amount in dispute does not exceed the sum

 

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of USD two hundred thousand ($200,000.00), and which the Parties are unable to
resolve by mutual agreement, shall be settled by the “Shortened Arbitration
Procedure” of the Society of Maritime Arbitrators, Inc. (“SMA”) of New York in
New York, New York pursuant to the “Rules for the Shortened Arbitration
Procedure of the Society of Maritime Arbitrators, Inc.” then in force. The
arbitration shall be conducted in English and the arbitral award shall be final
and binding on both Parties without appeal to any court, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. In addition to the requirements of Paragraph (a) above,
any such controversy, claim or dispute shall also be governed by, construed and
enforced under the maritime law of the United States without giving effect to
its conflict of laws principles.

 

f) Any controversy, claim or dispute that may arise in connection with or as a
result of Clause 18 (“Laytime and Demurrage”) or Clause 16 (“Inspection for
Quantity and Quality”), where the amount in dispute equals or exceeds the sum of
USD two hundred thousand ($200,000.00) but is less than USD five hundred
thousand ($500,000.00), and which the Parties are unable to resolve by mutual
agreement, shall be settled by arbitration in New York, New York pursuant to the
“Maritime Arbitration Rules” of the SMA then in force. Each Party shall appoint
one (1) arbitrator and the third (3rd) arbitrator, who shall act as chairman,
shall be appointed by the SMA, provided that all three (3) arbitrators shall be
knowledgeable and experienced in the international sale and purchase of crude
oil and further that all three (3) arbitrators shall be members of SMA. The
arbitration shall be conducted in English and the arbitral award shall be final
and binding on both Parties without appeal to any court, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. In addition to the requirements of Paragraph (a) above,
any such controversy, claim or dispute shall also be governed by, construed and
enforced under the maritime law of the United States without giving effect to
its conflict of laws principles. For any controversy, claim or dispute that may
arise in connection with or as a result of Clause 18 (“Laytime and Demurrage”)
or Clause 16 (“Inspection for Quantity and Quality”), where the amount in
dispute exceeds the sum of USD five hundred thousand ($500,000.00), and which
the Parties are unable to resolve by mutual agreement, shall be settled pursuant
to the provisions of Paragraph (c) above.

Governing law and the service of process shall be according to laws of the State
of New York.

29. VOICE RECORDING

 

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The Parties agree that each may electronically record all telephone
conversations between them, with or without the use of a warning tone. To the
extent required by law, each Party agrees to obtain the consent of its employees
and agents to such recording.

30. ISPS COMPLIANCE

 

a) Seller shall arrange that the Vessel shall comply with the requirements of
the International Code for the Security of Ships and of Port Facilities and any
relevant amendments to Chapter XI of SOLAS (“ISPS Code”) and, where the Delivery
Port is within the U.S. and U.S. territories or waters, with the U.S. Maritime
Transportation Security Act of 2002 (“MTSA”).

 

b) The Vessel shall when required submit a Declaration of Security (“DOS”) to
the appropriate authorities prior to arrival at the Delivery Port.

 

c) Notwithstanding any prior acceptance of the Vessel by Buyer, if at any time
prior to the arrival of the Vessel at the Delivery Port the Vessel ceases to
comply with the requirements of the ISPS Code and, where the Delivery Port is
within the U.S.A. and U.S. territories or waters, with the MTSA:

 

  i. Buyer shall have the right not to berth such nominated Vessel at the
Delivery Port and any laytime or time on Demurrage, if on Demurrage, resulting
there from shall not be for the account of the Buyer.

 

  ii. Seller shall be obliged to substitute such nominated vessel with a vessel
complying with the requirements of the ISPS Code and, where the Delivery Port is
within the U.S. and U.S. territories or waters, with the MTSA.

 

d) Seller warrants to Buyer that all Seller-designated laden ports, facilities,
or terminals for this Agreement are in compliance with the ISPS Code and similar
laws and regulations pertaining to the security of ports, facilities, or
terminals. Buyer warrants to Seller that all Buyer-designated unladen ports,
facilities, or terminals for this Agreement are in compliance with the ISPS Code
and similar laws and regulations pertaining to the security of ports,
facilities, or terminals.

 

e)

Any costs or expenses in respect of the Vessel including demurrage or any
additional charge, fee or duty levied on the Vessel at the Delivery Port and
actually incurred by the Seller resulting directly from the failure of the
Delivery Port to comply with the requirements of the ISPS Code and, if located
within the U.S.A. and U.S. territories or waters, with the MTSA shall be for the

 

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account of the Buyer, including but not limited to the time required or costs
incurred by the Vessel in taking any action or any special or additional
security measures required by the ISPS code or MTSA.

 

f) Buyer’s liability to Seller for any costs, losses or expenses incurred by the
Vessel, the charterers, or the Vessel owners (excluding consequential damages)
resulting from the failure of the Delivery Port to comply with the requirements
of the ISPS Code and, where located within the U.S. and U.S. territories or
waters, with the MTSA shall be limited to the payment of demurrage and costs
actually incurred by Seller in accordance with the provisions herein, except to
the extent such failure was due to Buyer’s willful breach of these provisions or
applicable law.

 

g) Expenses solely attributable to Security Regulations that are not otherwise
specifically allocated in this Clause shall be apportioned between the Parties
consistent with the apportionment of delays set forth in Sections a through f of
this Clause.

31. GENERAL PROVISIONS

 

a) The failure of Seller or Buyer at any time to require performance by the
other Party of any provision hereof shall in no way affect the right of a Party
to request any performance which may be due thereafter pursuant to such
provision, nor shall the waiver by Seller or Buyer of any breach of any
provision of the Agreement be taken or held to be a waiver of any subsequent
breach of such provision.

 

b) The Agreement and all information obtained by one Party from the other Party
shall be treated as confidential; provided, however, that if a Party is required
to disclose any such information by any court or legislative or administrative
body (including without limitation: by oral question, interrogatory, request for
production, subpoena, civil investigation demand or by the U.S. Securities and
Exchange Commission) or by governmental law or regulation (expressly including
the U.S. Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder), the Party shall, to the extent not
prohibited by applicable law, provide the other Party with prompt notice of such
requirement. Seller shall have the right to disclose any relevant operational
details related to the Agreement to its Peregrino equity partner(s) including,
but not limited to, planned or unplanned shutdowns of NuStar’s Refinery system.

 

c) The headings appearing in the Agreement are for convenience only.

 

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d) Any modification of and addition to the Agreement shall be made in writing
signed by both Parties.

 

e) Each Party hereto agrees to comply with all laws, rules, regulations,
ordinances, and requirements of federal, state, and local governmental or
regulatory bodies that are applicable to this Agreement and to the performance
of such Party’s obligations hereunder.

 

f) This contract contains the entire agreement between the Parties with respect
to the subject matter hereof and all proposals, negotiations and representations
with reference thereto are merged herein.

 

g) If any provision of this Agreement shall be found to be illegal, invalid or
unenforceable by any court or administrative body of competent jurisdiction,
then such provision shall, as to such jurisdiction, be ineffective to the extent
of such illegality, prohibition, or unenforceability without invalidating the
remaining provisions hereof which shall remain in force and effect, and the
finding of any such illegality, prohibition, or unenforceability shall not
invalidate or render unenforceable such provision in any other jurisdiction. The
Parties agree, in the circumstances referred to in this Clause, to negotiate in
good faith to agree on a legal, valid and enforceable provision to substitute
for any illegal, invalid or unenforceable provision which achieves to the
greatest extent possible the same effect as would have been achieved by the
illegal, invalid or unenforceable provision.

32. NOTICES

Unless otherwise agreed in writing, any notices, statements, requests or other
communications to be given to either Party pursuant to the Agreement shall be
effective upon receipt by the addressee and sufficiently made if sent by post
(by airmail if airmail is possible) postage paid, or by facsimile transmission
or other means of data transmission to the address of the other Party specified
for this purpose below-

If to Seller:

Statoil Óleo e Gás Limitada (SBOG)

c/o Statoil Marketing and Trading (US) Inc.

1055 Washington Blvd. – 7th Floor

Stamford, CT 06901

Attention: Crude Oil Operations

Fax Number: (203) 978-6958

Telephone Number: (203) 978-6900

E-mail: uscrudeops@statoil.com

 

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With copy to:

Statoil Marketing and Trading (US) Inc.

1055 Washington Blvd. – 7th Floor

Stamford, CT 06901

Attention: General Counsel

Fax Number: (203) 978-6952

Telephone Number: (203) 978-6900

and

Statoil Óleo e Gás Limitada (SBOG)

Praia de Botafogo, 228/ 4th floor, Suites 401 and 406 to 414

22250-040 Rio de Janeiro, RJ, Brazil

Attention: Pedro Paulo Saraceni

Fax Number: 55 21 3479-0248

Telephone Number: 55 21 9346-6275

E-mail: ppsa@statoil.com

If to Buyer:

NuStar Marketing LLC

2330 North Loop 1604 West

San Antonio, TX 78248

Attention: SVP- Trading & Supply

Fax Number: (210) 918-5413

Telephone Number: (210) 918-2822

E-mail: paul.brattlof@nustarenergy.com

33. ANTI-CORRUPTION AND FACILITATION PAYMENTS:

 

a) Buyer and the Seller shall respectively comply with all applicable laws,
rules, regulations, decrees and/or official governmental orders relating to
anti-bribery and anti-money laundering of:

 

  i) The Kingdom of Norway,

 

  ii) Federative Republic of Brazil,

 

  iii) The United States of America,

and

 

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  iv) Any country in which this Agreement is partly or wholly executed, relating
to anti-bribery and anti-money laundering.

 

b) In connection with the implementation of this Agreement both Parties
therefore represent and agree not to:

 

  i) Directly or indirectly, give or offer any improper advantage to anyone for
the purpose of influencing the performance of the Agreement, or

 

  ii) For itself or anyone else, directly or indirectly, request, receive or
accept an offer of an improper advantage for the purpose of influencing the
performance of the Agreement, or

 

  iii) Make use of any third party in its fulfillment of obligations under this
agreement without requiring such third party to agree to comply with
substantially identical provisions as set forth herein.

The Parties represent and warrant to comply with, and to use reasonable
endeavors to procure that relevant third parties used for fulfilling the
Parties’ respective obligations under the Agreement comply with, all laws,
rules, regulations, decrees or official governmental orders prohibiting bribery,
corruption and money laundering applicable to the Party in question or its
ultimate parent company.

A Party may terminate the Agreement, forthwith upon written notice to the other,
if the other Party is in breach of the above.

All financial settlements, billings and reports in connection with the Agreement
shall properly reflect the facts related to any activities and transactions
handled for the account of the other Party. The data may be relied upon as being
complete and accurate in any further recordings and reporting made by the
Parties or any of their representatives, for whatever purpose.

34. HSE, Drug and Alcohol Policy

The Parties represent that they are fully conversant with one another’s
respective HSE policy and the ethical standards and requirements as provided to
each other under separate cover, as the same may be amended from time to time.

The Parties agree that all business will be conducted in the most responsible
manner to ensure that the operations involve minimum risk to people, the
environment and equipment. The shared targets for the operation of the trade

 

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are zero personnel injuries, zero spills and environmental damage and zero
equipment damage.

Each Party shall notify the other of any incidents in connection with their
performance under this Agreement related to HSE issues including any pollution
incidents that require notice to any Governmental Authorities, further
investigation or other response action under any applicable environmental laws
and/or regulations.

Each Party agrees to issue HSE performance data not older than six (6) months
upon request of the other Party covering any recordable incidents during the
relevant period. Such reports shall provide a brief description of the incident
and appropriate follow-up action taken.

The Party responsible for employing the Vessel for the transport of the Oil
under the Agreement shall warrant that at all times the Vessel will strictly
observe the HSE provisions, policy or guidelines in force at any terminal or
place that it is required to use in the execution of this Agreement and, if
relevant, the ports or places where such Terminals are situated and the roads or
railway network used for the transport and conduct its performance of the
transport in accordance with any such regulations in force at such place or
port.

Without prejudice to the generality of the foregoing and in the event of
delivery by Vessel or the transport of the Oil, the Party responsible for the
employment of the Vessel shall warrant that such Vessel shall strictly adhere to
the Exxon’s Drug and Alcohol Policy as well as those envisaged under Oil
Companies International Maritime Forum (“OCIMF”) guidelines issued in June 1995
as may be amended from time to time, and any other laws, regulations, or rules
of the jurisdictions in which the Vessel may execute performance.

Furthermore, the applicable Party shall warrant that personnel employed by the
Vessel on such Vessel shall specifically and strictly observe the respective
national or regional legislations with respect to alcohol and drug consumption
prior to and whilst at work.

Should the Vessel, or it’s employees, representatives or sub-contractors fail to
observe all of the guidelines and/or directions of the applicable Terminal or
national or regional legislation pertaining to HSE that results in losses,
damages, costs, expenses or fines or any other costs against the Party not
providing the transport, the Party who has undertaken the provision of transport
shall indemnify the other Party in respect of such losses, damages, costs,
expenses, fines.

 

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35. CONFLICT OF INTEREST

Except as otherwise expressly provided herein, no director, employee or agent of
either Party, its subcontractors or vendors, shall give or receive from any
director, employee or agent of the other Party or any Affiliate any commission,
fee, rebate, gift or entertainment of significant cost or value in connection
with this Agreement. In addition, no director, employee or agent of either
Party, its subcontractors or vendors, shall enter into any business arrangement
with any director, employee or agent of the other Party or any Affiliate who is
not acting as a representative of such Party or its Affiliate without prior
written notification thereof. Any representative(s) authorized by either Party
may audit the applicable records of the last three (3) Years of the other Party
for the sole purpose of determining whether there has been compliance with this
Clause. All financial settlements, reports, and billings rendered to the company
are to properly reflect the facts about all activities and transactions.

36. RIGHT TO AUDIT

Each Party and its duly authorized representatives shall have access to the
accounting records and other documents maintained by the other Party which
relate to materials being sold or delivered to the other Party under this
Agreement and shall have the right to audit such records at any reasonable time
or times, upon prior written notice, during the term or within five (5) Years
after the termination of this Agreement.

37. INVALIDITY

If any provision of this Agreement shall be (in whole or in part) determined to
be null and void, voidable or invalid by a court of competent jurisdiction, then
for such period that the same is void or invalid, it shall be deemed to be
deleted from this Agreement and the remaining portions of this Agreement shall
remain in full force and effect.

38. REPRESENTATIONS AND WARRANTIES

 

a) Buyer Representations.  Buyer represents and warrants to Seller that:

 

  i)

Buyer acknowledges and agrees that Seller is entering into the Agreement in
reliance on the regulations affecting directly or directly or indirectly the Oil
sold under the Agreement in effect on the date of the Agreement. Such
regulations include, but are not limited to, those relating to the production,
acquisition,

 

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gathering, manufacturing, transportation, storage, trading or delivery of the
Oil to the extent such regulations affect the Seller or the Seller’s
suppliers(s).

 

  ii) Buyer is a Delaware limited liability company duly organized and validly
existing under the laws of the jurisdiction of its organization;

 

  iii) this Agreement has been duly authorized by all necessary corporate or
other action of Buyer; and constitutes the legal, valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms;

 

  iv) neither the execution of this Agreement by Buyer nor the performance by
Buyer of its obligations hereunder will conflict with or result in any breach
of, or constitute a violation of or default under, any applicable law, its
charter or by-laws.

 

  v) unless permitted as set forth herein or otherwise specifically agreed,
Buyer is purchasing the Oil hereunder exclusively for its own use;

 

  vi) no lawsuit or other proceeding is pending or, to the knowledge of Buyer,
threatened against Seller which, if determined adversely to Buyer, may
materially and adversely affect its business or financial condition or the
consummation of the transactions contemplated by, or the performance of its
obligations under, this Agreement; and no action or proceeding has been
instituted, and no order, decree, injunction or judgment of any kind from any
court or other governmental authority has been issued, to avoid, restrain or in
any other manner prevent the consummation of the transactions contemplated by
this Agreement

 

  vii) Buyer has not been contacted by or negotiated with any finder, broker or
other intermediary for the purchase of the Oil and no such person is entitled to
any compensation with respect to this Agreement or the sale of Oil hereunder;
and

 

  viii) none of Buyer’s directors, employees or agents has given or will give
any commission, fee, rebate, gift or entertainment of significant value in
connection with this Agreement, it being agreed that representatives of Seller
may audit the applicable records of Buyer solely for the purpose of determining
whether there has been compliance with this Section a) of this Clause.

 

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b) Seller Representations.  Seller represents and warrants to Buyer that:

 

  i) Seller acknowledges and agrees that Buyer is entering into the Agreement in
reliance on the regulations affecting directly or directly or indirectly the Oil
sold under the Agreement in effect on the date of the Agreement. Such
regulations include, but are not limited to, those relating to the production,
acquisition, gathering, manufacturing, transportation, storage, trading or
delivery of the Oil to the extent such regulations affect the Seller or the
Seller’s suppliers(s).

 

  ii) Seller is a corporation duly organized and existing under the laws of the
Federative Republic of Brazil having the legal capacity to enter into and
perform this Agreement;

 

  iii) this Agreement has been duly authorized by all necessary corporate or
other action of Seller; and constitutes the legal, valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms;

 

  iv) neither the execution of this Agreement by Seller nor the performance by
Seller of its obligations hereunder will conflict with or result in any breach
of, or constitute a violation of or default under, any applicable law, its
charter or by-laws.

 

  v) no lawsuit or other proceeding is pending or, to the knowledge of Seller,
threatened against Seller which, if determined adversely to Seller, may
materially and adversely affect its business or financial condition or the
consummation of the transactions contemplated by, or the performance of its
obligations under, this Agreement; and no action or proceeding has been
instituted, and no order, decree, injunction or judgment of any kind from any
court or other governmental authority has been issued, to avoid, restrain or in
any other manner prevent the consummation of the transactions contemplated by
this Agreement;

 

  vi) Seller has not been contacted by or negotiated with any finder, broker or
other intermediary for the sale of Oil hereunder, and no person or entity is
entitled to any compensation with respect to this Agreement or the sale of Oil
hereunder; and

 

  vii)

no director, employee or agent of Seller has given or will give any commission,
fee, rebate, gift or entertainment of significant value in connection with this
Agreement, it being agreed that representatives of Buyer may audit the
applicable records of Seller

 

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solely for the purpose of determining whether there has been compliance with
this Section b) of this Clause.

39. OTHER TERMS

For anything not specifically covered in the Agreement, NuStar Marketing LLC
Marine Provisions Effective May 23, 2008 (the “Marine Provisions”), as attached
hereto, shall apply.

Any terms not covered in the Agreement or the Marine Provisions shall be
governed by Incoterms (2000 edition).

40. ATTACHMENTS

            Annex 1 — Material Safety Data Sheets

            Annex 2 — NuStar Marketing LLC Marine Provisions Effective May 23,
2008

            Annex 3 — Pricing

            Annex 4 — Optional Quantity Deal Confirmation

In witness whereof, the Parties hereto, by their proper officers thereunto duly
authorized, have executed and delivered this Agreement in duplicate, on the date
first herein mentioned.

Agreed:

 

Statoil Óleo e Gás Limitada By:  

/s/ Tor Martin Anfinnsen

Print Name:   Tor Martin Anfinnsen Title:   Senior Vice-President Oil Trading
and Supply

 

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Date:  

November 17, 2010

NuStar Marketing LLC By:  

/s/ Paul Brattlof

Print Name:  

Paul Brattlof

Title:  

Senior Vice President

Date:  

November 17, 2010

 

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Annex 1 — Material Safety Data Sheet — To be provided under separate cover at a
later date.

Annex 2 — NuStar Marketing LLC Marine Provisions Effective May 23, 2008 —
Attached.

(The remainder of this page has been left intentionally blank.)

 

Annex 1 and 2, Page 1 of 1

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed by NuStar Energy L.P. with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. The omitted portions are found on Annex 3.
Omissions are designated as [****].    LOGO [g145166g46b69.jpg]

 

Annex 3 — Pricing for Base Contract Quantity

The price per Barrel net of sediment and water for the Base Contract Quantity of
Oil delivered under the Agreement shall be calculated using the following
formula:

P = Maya + A

Where:

Maya is Maya crude oil and will be equal to the arithmetic average of the daily
prices as assessed in the [****] under the heading [****] effective for twenty
(20) consecutive pricing days after the NOR date at Discharge (NOR date equals
day zero).

Where for the initial period up to and including December 31, 2012:

A1 = ([****] * ([****] – [****])) + $[****]

For the period after December 31, 2012:

A2 = ([****] * ([****] – [****])) + $[****]

And where:

[****] crude and will be equal to the arithmetic average of the daily prices as
assessed in the [****] under the heading [****] for [****] month [****].

[****] is the [****] and will be the [****] under the heading of [****] in
[****].

This differential A applies to calculate the price P when the differential A is
in the range “B”:

 

Time Period:   “B” Volumes delivered during first 12 months of the first
delivery of the Oil to Buyer (“Period 1”):   [****] From the end of Period 1
through 31st. Dec. 2012:   [****] Volumes delivered during calendar year 2013:  
[****] Volumes delivered during calendar year 2014:   [****]

Should the differential A be outside this range “B,” the Parties will follow the
procedure below.

 

Annex 3, Page 1 of 3

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Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed by NuStar Energy L.P. with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. The omitted portions are found on Annex 3.
Omissions are designated as [****].    LOGO [g145166g46b69.jpg]

 

No later than [****] days following the [****] day of Month M-1, Buyer and
Seller will agree on delivery of the cargo of the Oil and the differential A to
be used, following the procedure below:

Should the differential A be lower than the low limit of “B,” Buyer has the
right to buy the Oil at the floor differential of “B” [****]. If Seller has not
by the close of business (“COB”) (5 p.m. U.S. Central time) on the [****] day
following the [****] day of Month M-1 received notice of Buyer’s rejection of a
floor price, the low limit of “B” shall be deemed to be accepted by Buyer.
Should Buyer elect not to accept the floor price, Buyer and Seller may agree a
differential between the low limit of “B” and the differential A. Should neither
of these alternative differentials be acceptable to Buyer, Seller has the option
on or prior to COB the [****] day following Month M-1 to either cancel the
cargo(es) or to sell this cargo to Buyer at the differential A. Should Seller
fail to make such an election, then it is deemed that Seller agrees to deliver
the cargo to Buyer at the differential A.

Example 1: during Period 1, by [****], the differential A for March is
determined to be [****]. By no later than COB on [****], Buyer fails to notify
Seller whether it wants to buy at [****]. Buyer is deemed to have accepted a
price of [****].

Example 2: during Period 1, by [****], the differential A for March is
determined to be [****]. By no later than COB on [****], Buyer notifies Seller
it does not want to buy at [****]. Seller and Buyer cannot agree to a
differential between [****] and [****]. Seller agrees, by COB on [****], to sell
the cargo to Buyer at [****].

Should the differential A be above [****] Buyer has the right to buy the Oil at
the differential A. If Seller has not by COB on the [****] day following the
[****] day of Month M-1, received notice of Buyer’s rejection of buying the Oil
at the differential A, this differential A shall be deemed to be accepted by
Buyer. Should Buyer elect not to accept the differential A, Buyer and Seller may
agree a differential between [****] and the differential A. Should neither of
these alternative differentials be acceptable to Buyer, Seller has the option to
either cancel the cargo(es) or to sell this cargo to Buyer at the Cap
differential of [****]. Should Seller fail to make such an election, then it is
deemed that Seller accepts to deliver the cargo to Buyer at a differential of
[****].

Example 1: during Period 1, by [****], the differential A for April is
determined to be [****]. By no later than COB on [****], Buyer fails

 

Annex 3, Page 2 of 3

--------------------------------------------------------------------------------

Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed by NuStar Energy L.P. with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. The omitted portions are found on Annex 3.
Omissions are designated as [****].

 

   LOGO [g145166g46b69.jpg]

 

to notify Seller whether it wants to buy at [****]. Buyer is deemed to have
accepted a price of [****].

Example 2: during Period 1, by [****], the differential A for April is
determined to be [****]. By no later than COB on [****], Buyer notifies Seller
it does not want to buy at [****]. Seller and Buyer cannot agree to a
differential between [****] and [****]. Seller agrees, by COB on [****], to sell
the cargo to Buyer at [****].

Should either Maya, [****] or [****] quotations cease to be representative or
change significantly in their representation at any time during the term of the
Crude Sales Purchase Agreement, or if the quality of Maya, [****] or [****]
change materially during the term of the Crude Sales Purchase Agreement, then
the Parties agree to promptly meet, discuss and agree in good faith appropriate
adjustments to the Crude Sales Purchase Agreement to maintain the original
intent of the Parties.

 

Annex 3, Page 3 of 3

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   LOGO [g145166g46b69.jpg]

 

Annex 4 — Optional Quantity Deal Confirmation

Form of Part 1 (Specific Provisions) of Agreement

 

 

Agreement for the Purchase and Sale of Crude Oil (Delivered Ex Ship)

 

DEAL NO.:

  

XXXXXXXXX

CONTRACT DATE:   

XXXXXX

SELLER:   

Statoil Óleo e Gás Limitada

  

Praia de Botafogo, 228/ 4th floor

  

Suites 401 and 406 to 414

  

22250-040 Rio de Janeiro, RJ, Brazil

BUYER:   

NuStar Marketing LLC

  

2330 North Loop 1604 West

  

San Antonio, TX 78248

QUALITY:   

PEREGRINO

QUANTITY:   

XXXXXXXX        (US BBLS)

TOLERANCE:   

XXXXX

TOLERANCE OPTION:    SELLER’S PLACE OF DELIVERY:   

XXXXXXX BY VESSEL (DES), AT ONE SAFE BERTH

PERIOD OF DELIVERY:    XXXXXXX PRICE AND CURRENCY:    BASIS:    XXXXXXXX
DIFFERENTIAL:    XXXXXXXX PERIOD:    XXXXXXXX PAYMENT TERM:    XXXXXXX CREDIT
TERMS:    XXXXXXX

This Part 1 of the Agreement is hereby combined with Part 2 of the Agreement, as
set forth in the Peregrino Crude Oil Purchase/Sale Agreement between the Parties
dated November 17, 2010 to form the Parties’ Agreement.

Regards

Statoil Óleo e Gás Limitada

 

Annex 4, Page 1 of 1