Exhibit 10.19

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

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

CRUDE OIL PIPELINE

THROUGHPUT AND DEFICIENCY AGREEMENT

Between

SUNOCO PIPELINE L.P.

and

MOTIVA ENTERPRISES LLC

Dated as of December 15, 2006

 

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

 

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

MOTIVA AND SUNOCO PIPELINE

THROUGHPUT AND DEFICIENCY AGREEMENT

CRUDE OIL PIPELINE

This Throughput and Deficiency Agreement (“Agreement”) is made and entered into
this 15th day of December, 2006 by and between Sunoco Pipeline L.P. (“Sunoco”),
a Texas limited partnership with offices at 1735 Market Street, Suite LL,
Philadelphia, PA 19103, and MOTIVA ENTERPRISES LLC, a Delaware Limited Liability
Company (“Motiva”), with offices at 700 Milam Street, 11th Floor, Houston TX
77002. (The parties to this Agreement may from time to time be referred to
individually as a “Party” or collectively as the “Parties”.) This Agreement
represents the commercial arrangement between the Parties.

WITNESSETH

WHEREAS, Sunoco Partners Marketing & Terminals L.P., an Affiliate of Sunoco
(“Sunoco Partners”), owns and operates a marine storage and terminaling facility
which is located at or near Nederland, Texas (the “Nederland Terminal”) for the
storage and throughput of crude oil.

WHEREAS, Sunoco will be the owner and operator of a pipeline that includes
approximately 12.1 miles of 30” pipeline from the Nederland Terminal to the
fence-line of the Port Arthur Refinery, as further described in EXHIBIT A (the
“Pipeline”).

WHEREAS, Sunoco proposes to design, engineer, construct and cause the Pipeline
to achieve Pipeline Mechanical Completion by no later than January 1, 2010,
which Pipeline will be used, among other things, to provide services for the
receipt, transportation, and delivery of Crude Oil.

 

-2-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

WHEREAS, Motiva is a refining and marketing company that owns a refinery and
related facilities located at Port Arthur, Jefferson County, Texas, including
the facility located in Port Neches, Texas (the “Port Arthur Refinery”).

WHEREAS, Motiva and Sunoco Partners will enter into a Marine Dock and
Terminaling Agreement whereby Motiva will use the marine docks and storage
capacity at the Nederland Terminal for Motiva’s Crude Oil (the “Terminaling
Agreement”).

WHEREAS, Motiva desires to transport Crude Oil through the Pipeline from the
Nederland Terminal to the Port Arthur Refinery in consideration for the
Incentive Tariff.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements contained herein, and of other good and valuable consideration, the
receipt, adequacy and sufficiency of which are acknowledged, and intending to be
legally bound hereby, Sunoco and Motiva agree as follows:

SECTION 1

DEFINITIONS

Unless otherwise required by the content, the terms defined in this Section 1
shall have, for all purposes of this Agreement, the respective meanings set
forth in this Section. All Section numbers used in this Agreement refer to
Sections of this Agreement unless otherwise specifically described:

“Accounting Period” shall have the meaning as set forth in Section 5 (b).

“Affiliate” shall mean, with respect to any Party, any corporation, partnership,
limited liability company, trust, or other entity controlling, controlled by, or
under common control with that Party.

“Agreement” shall mean this Throughput and Deficiency Agreement and all exhibits
and appendices hereto as originally executed or as may from time to time be
supplemented or amended by agreement of the Parties.

 

-3-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

“API” shall have the meaning as set forth in Section 7 (b).

“Audit” shall have the meaning as set forth in Section 22.

“Authorizations” shall have the meaning as set forth in Section 3 (d).

“Book Balance” shall have the meaning as set forth in Section 6 (d)(i).

“Barrel” shall mean 42 United States standard gallons at 60 degrees Fahrenheit.

“Commencement Date” shall have the meaning as set forth in Section 3 (g).

“Contract Year” shall mean the period beginning on the Commencement Date or any
anniversary thereof and ending 365 consecutive days (366 consecutive days in the
case a period has February 29th) later.

“Crude” or “Crude Oil” shall mean any grade of crude oil.

“Deficiency” shall have the meaning given in Section 5.

“Deficiency Payment” shall have the meaning as set forth in Section 5 (c).

“Destination” shall mean the intake flange(s) for Crude Oil at the Port Arthur
Refinery.

“Dispute” shall have the meaning as set forth in Section 21 (a).

“Effective Date” shall mean the date of execution and delivery of this Agreement
by the Parties.

“Ending Stock” shall have the meaning as set forth in Section 6 (d)(ii).

“Facility Mechanical Completion” with respect to (i) the additional tankage at
the Nederland Terminal, as required pursuant to the Terminaling Agreement, or
(ii) the expansion project at the Port Arthur Refinery, shall mean that the
relevant facility is in-service and fully operational, with all construction and
testing complete.

“FERC” shall have the meaning as set forth in Section 9 (a).

“First Offer Notice” shall have the meaning as set forth in Section 25 (a).

“Force Majeure” shall have the meaning set forth in Section 17 (a).

“Force Majeure Deficiency Volume” shall have the meaning set forth in Section 17
(d).

“Incentive Tariff” shall have the meaning set forth in Section 9(a).

“Minimum Volume Obligation” shall have the meaning as set forth in Section 5
(b).

“Nederland Terminal” shall have the meaning as set forth in the recitals.

 

-4-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

“Notice of Dispute” shall have the meaning as set forth in Section 21 (b).

“Origin” or “Origin Point” shall mean the inlet flange to the Pipeline at the
Nederland Terminal and/or the facility in Port Neches, Texas that is part of the
Port Arthur Refinery.

“Parties” shall mean Sunoco and Motiva or their permitted assigns, and “Party”
shall mean any one of the Parties as the case may be.

“Pipeline” shall have the meaning as set forth in the recitals.

“Pipeline Mechanical Completion” shall mean that the construction of the
Pipeline is complete, with all testing complete (including hydrotesting), and
the Pipeline is capable of delivering to the Port Arthur Refinery the quantities
of Crude Oil specified in this Agreement.

“Pre-Commencement Date Obligation” shall have the meaning as set forth in
Section 3 (f)(iii).

“[******] Option” shall have the meaning as set forth in Section 3 (h).

“Sunoco Partners” shall have the meaning as set forth in the recitals.

“Term” shall have the meaning as set forth in Section 2.

“Third Party Purchaser” shall have the meaning as set forth in Section 24 (a).

“Terminaling Agreement” shall have the meaning as set forth in the recitals.

“Work Product” has the meaning as set forth in Section 12 (b).

SECTION 2

TERM

This Agreement shall be in full force and effect on the Effective Date; however,
the Term of this Agreement shall commence upon the Commencement Date (defined in
Section 3 (g)) and, subject to termination provisions set forth herein, shall
continue for a period of ten (10) Contract Years (the “Term”). The Parties agree
to enter good faith renewal negotiations following receipt of written
notification by one Party to the other no later than four (4) years prior to the
end of the Term. If the Parties cannot agree on terms and conditions of a
renewal of this Agreement within six (6) months from the date of the written
notification, this Agreement will terminate at the end of the Term.

 

-5-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

SECTION 3

CONSTRUCTION AND COMMENCEMENT DATE

(a) Sunoco, at its sole cost and expense, will design, engineer, modify,
construct, and equip the Pipeline, or cause the Pipeline to be designed,
engineered, modified, constructed, and equipped, in accordance with the
specifications listed in EXHIBIT A. Without limitation to the foregoing, EXHIBIT
A shall also include a construction schedule for the Pipeline, construction
progress reporting procedures, and capacity requirements designed to ensure that
the Pipeline will have sufficient capacity to receive, transport and deliver
Crude Oil from the Origin to the Destination. Should Motiva desire to change the
scope of the Pipeline after the Effective Date or during the Term hereof, the
Parties will work together in good faith to implement any such change.

(b) Motiva will allow Sunoco access to the Port Arthur Refinery, subject to
Motiva’s normal security control and safety procedures, as required during the
Term of this Agreement. Sunoco’s construction and subsequent operation of the
Pipeline pursuant to this Agreement shall be in such a manner as to cause
minimum interference with the operations of Motiva and of other contractors
providing services to Motiva at or outside of the Port Arthur Refinery, and
Sunoco shall take and cause Sunoco’s and every subcontractors’ employees,
agents, licensees, and permitees to take, all necessary precautions (including
those required by Motiva’s safety regulations) to protect the Port Arthur
Refinery premises and all persons and property thereon from damage or injury.
Each time Sunoco is upon the Port Arthur Refinery premises, it shall leave the
premises clean and free of all equipment, waste materials and rubbish.

(c) Motiva, at its option, may be represented on Sunoco’s construction team and
may have a representative present at any and all times at all locations where
Sunoco or its subcontractors are engaged in the construction and/or operation of
the Pipeline, in each case in an observer capacity only; provided, however, that
Motiva shall have no rights to direct or control the construction and/or
operation of the Pipeline.

 

-6-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(d) Sunoco shall apply for and use commercially reasonable efforts to secure
commercially reasonable terms on all rights-of-way (whether from private parties
or any governmental agency or authority), licenses, permits, property rights of
ingress and egress, certificates, servitudes, judgments, orders, rulings,
patents or patent licenses, operating agreements, and other authorizations
(collectively “Authorizations”) as may be required for the purpose of providing,
modifying, constructing, operating and maintaining the Pipeline. Motiva shall
use commercially reasonable efforts to comply with any commercially reasonable
request from Sunoco for assistance in seeking Authorizations.

(e) The design and construction of the Pipeline shall materially comply with all
applicable federal, state, and local laws, regulations, ordinances, orders, and
directives and generally accepted pipeline industry standards.

 

  (f)      (i) As of the Effective Date, Sunoco shall begin engineering and
other work with respect to the Pipeline and shall use all commercially
reasonable efforts to cause the Pipeline to achieve Pipeline Mechanical
Completion by no later than January 1, 2010, provided that this date shall be
extended by any period of Force Majeure, by delays due to regulatory matters or
inclement weather; or as may otherwise be agreed in writing by the Parties.

 

  (ii) Notwithstanding the foregoing, as an incentive to achieving Pipeline
Mechanical Completion ahead-of-schedule, Motiva will pay Sunoco the Incentive
Tariff outlined in EXHIBIT B-1, plus [******] (the “Incentive Payment”), if
(1) Sunoco achieves Pipeline Mechanical Completion by December 1, 2009; and
(2) Sunoco Partners achieves Facility Mechanical Completion at the Nederland
Terminal, as required pursuant to the Terminaling Agreement, by December 1,
2009. Such Incentive Payment will only apply on the first [******] Barrels
transported through the Pipeline during the first Contract Year.

 

  (iii)

Should Sunoco achieve Pipeline Mechanical Completion on or before December 1,
2009, and provided that Sunoco Partners has achieved Facility Mechanical
Completion of at least one storage tank at the Nederland

 

-7-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

Terminal, as required pursuant to the Terminaling Agreement, then upon notice by
Sunoco to Motiva of such Pipeline Mechanical Completion, Motiva shall ship Crude
Oil or cause Crude Oil to be shipped through the Pipeline, at the Incentive
Tariff outlined in EXHIBIT B-2, a minimum guaranteed volume of [******] Barrels
per month (the “Pre-Commencement Date Obligation”), from the date the Pipeline
becomes fully operational and in-service until the Commencement Date. Any excess
or shortfall of the Pre-Commencement Date Obligation during any month prior to
the Commencement Date shall be cumulatively carried forward to each succeeding
month. Should Motiva fail to ship the total Pre-Commencement Date Obligation by
the end of the month immediately preceding the Commencement Date, then Motiva
shall have the obligation to make a payment to Sunoco in an amount equal to the
amount of such shortfall in barrels for the Pre- Commencement Date Obligation
multiplied by the applicable tariff rate, and Motiva shall have no further
obligation to ship any shortfall of Pre-Commencement Date Obligation barrels.
Such payment to Sunoco will be made within fifteen (15) days after the
Commencement Date.

 

  (iv) Should Sunoco not achieve Pipeline Mechanical Completion by January 1,
2010, or should Sunoco Partners not achieve Facility Mechanical Completion of
the additional tankage at the Nederland Terminal, as required pursuant to the
Terminaling Agreement, by January 1, 2010, for reasons other than Force Majeure,
and should the Facility Mechanical Completion of the expansion project at the
Port Arthur Refinery have been achieved by that date, then Sunoco will credit
Motiva (in the form of Prepaid Transportation Credits) with the Incentive Fee
multiplied by the Minimum Volume Obligation for all Accounting Periods (or
portions of Accounting Periods) from January 1, 2010 until the Commencement
Date, subject to Motiva’s obligation to exercise its commercially reasonable
efforts to minimize such damages.

(g) The “Commencement Date” of this Agreement shall be the latter of: (i) the
date that the expansion project at the Port Arthur Refinery achieves Facility
Mechanical Completion; or (ii)

 

-8-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

the first day of the month following the date Sunoco notifies Motiva in writing
that Sunoco has achieved Pipeline Mechanical Completion of the Pipeline. Without
prejudice to the foregoing, if the Commencement Date has not occurred by July 1,
2010 because the expansion project at the Port Arthur Refinery has not achieved
Facility Mechanical Completion, then Motiva shall begin to pay the Incentive
Tariff to Sunoco, calculated based on the pro rata portion of the Minimum Volume
Obligation, for the time period from July 1, 2010 until the Commencement Date,
and such payment shall be considered a Deficiency Payment, subject to the
provisions of Section 5.

(h) Without prejudice to any other provision of this Agreement, Motiva shall
have the option, exercisable at any time before 11:59 p.m. on July 1, 2007, to
provide a written notice instructing Sunoco to proceed with the construction of
the dock and related facilities described on EXHIBIT C, under the terms
described therein (the “[******] Option”).

(i) Motiva agrees to provide Crude Oil for use as line fill for the Pipeline, in
a volume to be determined and notified to Motiva by Sunoco, following Sunoco’s
successful completion of hydrotesting of the Pipeline.

SECTION 4

OPERATION

(a) Subject to the terms and conditions of this Agreement, beginning on the
Commencement Date, Sunoco shall, at its sole cost and expense, operate and
maintain, or cause to be operated and maintained, the Pipeline and shall employ
generally accepted pipeline industry standards and pipeline industry practices
and procedures in the operation thereof. During the Term of this Agreement,
Sunoco will make commercially reasonable efforts to operate the Pipeline so as
not to disrupt the flow of ratable deliveries to the Port Arthur Refinery.
Sunoco and Motiva will share their respective relevant maintenance schedules on
an annual basis, and Sunoco will use commercially reasonable efforts to effect
maintenance on the Pipeline during the same maintenance period as Motiva’s.

(b) Sunoco will furnish adequate personnel, material, and services necessary for
the receipt, transportation, and delivery of Motiva’s Crude Oil hereunder.

 

-9-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(c) Sunoco agrees to use commercially reasonable efforts to deliver Crude Oil
under this Agreement in substantially the same volume and substantially the same
quality as the Crude Oil delivered to it for transportation hereunder. Sunoco
will take necessary action and install equipment and facilities deemed necessary
by Sunoco to accurately measure the volume, including the implementation of
procedures and necessary equipment to provide the Parties with custody transfer
metering of volume. The Parties shall sample and test Crude Oil in accordance
with Section 7 “Crude Oil Testing and Measurement” herein.

(d) The operation and maintenance of the Pipeline shall materially comply with
all applicable federal, state, and local laws, regulations, ordinances, orders,
and directives and generally accepted pipeline industry standards and industry
practices and procedures.

SECTION 5

VOLUME COMMITMENT AND DEFICIENCIES

(a) Motiva will ship or cause to be shipped on the Pipeline, from the Origin to
Destination, in consideration for the Incentive Tariff, an average volume of
[******] Barrels of Crude Oil per day during each Contract Year of the Term or
any renewal thereof.

(b) During each three (3) month period after the Commencement Date (each an
“Accounting Period”), Motiva shall ship or cause to be shipped on the Pipeline a
minimum volume obligation, defined as [******] Barrels of Crude Oil per day
multiplied by the number of days in each respective Accounting Period (the
“Minimum Volume Obligation”).

(c) At the conclusion of each Accounting Period, an accounting will be made of
the quantities of Crude Oil that Motiva has shipped or caused to be shipped on
the Pipeline during such Accounting Period. If, during any Accounting Period,
the shipments of Crude Oil that Motiva shipped or caused to be shipped on the
Pipeline do not meet or exceed the Minimum Volume Obligation, then Motiva shall
pay to Sunoco, within fifteen (15) days of written notice of such deficiency, an
amount equal to Sunoco’s then-current Incentive Tariff multiplied by the
difference between the quantity of Crude Oil that Motiva shipped or caused to be
shipped during such Accounting Period and the Minimum Volume Obligation (a
“Deficiency Payment”).

 

-10-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(d) Any such Deficiency Payment will be considered by Sunoco as a prepaid
transportation credit (a “Prepaid Transportation Credit”) of Motiva on the
Pipeline, which Motiva may use as a credit against the payment of transportation
charges at the then-current Incentive Tariff rate for any Crude Oil that Motiva
may ship on the Pipeline during future Accounting Periods. Any such Prepaid
Transportation Credits may be utilized by Motiva during the six (6) succeeding
Accounting Periods. In the event Motiva holds unused Prepaid Transportation
Credits at the time of the termination or expiration of this Agreement (except
for a termination by Sunoco for a Motiva default), Motiva shall have the two
(2) Accounting Periods immediately following such termination or expiration to
use such Prepaid Termination Credits, after which time any unused amount thereof
will expire.

(e) Motiva must first meet or exceed the Minimum Volume Obligation during the
applicable succeeding Accounting Period before any Prepaid Transportation
Credits may be applied against the transportation charges at the then-current
Incentive Tariff rate for quantities in excess of the Minimum Volume Obligation.
Notwithstanding, Motiva shall not be required to meet or exceed the Minimum
Volume Obligation in order to use Prepaid Transportation Credits during the two
(2) Accounting Periods immediately following the termination or expiration of
this Agreement.

(f) If Motiva is unable to meet the Minimum Volume Obligation for shipments on
the Pipeline during any Accounting Period due to Sunoco’s failure to operate the
Pipeline in accordance with the generally accepted pipeline industry standards
and pipeline industry practices and procedures used by a commercially reasonable
operator, the Minimum Volume Obligation for that Accounting Period will be
proportionally reduced by an amount equal to the volume of Crude Oil that Motiva
is unable to transport.

(g) If Motiva is unable to meet the Minimum Volume Obligation for shipments on
the Pipeline during any Accounting Period due to scheduled or unscheduled
maintenance or outages of the Pipeline or the Nederland Terminal, then the
Minimum Volume Obligation for that Accounting Period will be proportionally
reduced by an amount equal to the number of days that the Pipeline or the
Nederland Terminal was unavailable.

(h) If Motiva is unable to meet the Minimum Volume Obligation for shipments on
the Pipeline during any Accounting Period due to scheduled or unscheduled
maintenance or outages of

 

-11-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

the Port Arthur Refinery, then the Minimum Volume Obligation for that Accounting
Period will be proportionally reduced by an amount equal to the number of days
that the Port Arthur Refinery was unavailable, provided that in no event shall
Motiva’s Minimum Volume Obligation be reduced on account of more than one
maintenance or outage at the Port Arthur Refinery (whether scheduled or
unscheduled) during the Term.

(i) Without prejudice to the foregoing, should Motiva cause the Pipeline to
deliver Crude Oil temporarily to the Port Arthur Refinery facility in Port
Neches, Texas, and should Motiva then cause the Pipeline to deliver that same
Crude Oil to the Port Arthur Refinery facility in Port Arthur, Texas, then such
deliveries shall be considered a single shipment, and (i) Motiva shall pay the
Incentive Tariff once for such shipment; and (ii) such shipment shall count only
once against the Minimum Volume Obligation.

SECTION 6

CRUDE OIL LOSS

(a) Sunoco shall at all times use reasonable care and diligence to preserve and
protect the Crude Oil from damage or loss while in Sunoco’s custody. Except for
losses or damage caused by or contributed to by the actions of Motiva or
Motiva’s employees, agents, authorized representatives or contractors, Sunoco
shall be liable to Motiva for all damage to or loss of such Crude Oil per grade
to the extent caused by Sunoco’s negligence, gross negligence or willful
misconduct. Sunoco’s liability under this Section shall be limited to payment
for lost or damaged Crude Oil as set forth herein, and shall not include
consequential damages, including punitive or exemplary damages. Sunoco also
shall not be liable for damage to Crude Oil that is due to a Force Majeure
event.

(b) As soon as reasonably possible after the end of each Contract Year during
the Term of this Agreement, but in any event no later than thirty (30) days
following the end of the Contract Year, Sunoco shall account to Motiva for all
Crude Oil that Motiva shipped or caused to be shipped through the Pipeline
during the prior Contract Year. Sunoco shall be liable to Motiva for Crude Oil
losses as calculated in accordance with Section 6(d) excluding:

 

  (i) a total tolerance for Crude Oil handled under this Agreement and the
Terminaling Agreement to cover normal handing and evaporation losses, not

 

-12-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

to exceed, in the aggregate between this Agreement and the Terminaling Agreement
[******] of the quantity of Crude Oil delivered to and stored at the Nederland
Terminal and/or throughput in the Pipeline for Motiva’s account during such
Contract Year;

 

  (ii) any losses or shortages of any such Crude Oil during such Contract Year
resulting from casualties not caused or contributed to by the negligence of
Sunoco, Sunoco’s other customers, or third parties, or their agents, servants or
employees.

(c) In the event that this Agreement is terminated at a time other than the
close of a Contract Year, Sunoco shall be liable for quantities of Crude Oil
lost or unaccounted for during such fractional Contract Year, computed in
accordance with the provisions hereof. Sunoco shall account to Motiva as soon
after the termination of this Agreement as is reasonably possible.

(d) Losses of Crude Oil shall be determined on a monthly basis by subtracting
the Book Balance from the Ending Stock, as follows:

 

  (i) the “Book Balance” shall be the stock of Crude Oil in the Nederland
Terminal and the Pipeline at the beginning of that month, plus receipts of Crude
Oil into the Nederland Terminal at the flange connection of Sunoco Partners’
receiving line at the discharge line of the delivering vessel (measured in
accordance with Section 7), minus the sum of deliveries of Crude Oil to the
flange connection downstream of the meter bank at the entrance to the Port
Arthur Refinery (located at the Miller Tank Farm);

 

  (ii) the “Ending Stock” is the actual volume of Crude Oil in the Nederland
Terminal and the Pipeline at the end of that month.

Once the loss is determined, the tolerances and adjustments of Section 6(b)
above and in the corresponding provisions in the Terminaling Agreement shall be
applied to arrive at an adjusted loss for such calendar month. This adjusted
loss difference will be determined monthly and accumulated, in order to arrive
at an accurate loss for the Contract Year involved.

 

-13-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(e) At the end of each Contract Year, Sunoco shall pay to Motiva, for each
Barrel of Crude Oil unaccounted for or lost in the aggregate under this
Agreement and the Terminaling Agreement, for which Sunoco is liable under the
provisions of this Section and the corresponding provisions of the Terminaling
Agreement, an amount equal to the price settlement for which the loss was
accrued. The value of the Crude Oil for determining the price settlement shall
be based upon the average posting for the month of settlement, based on the
applicable published quote for each Crude Oil grade as defined in EXHIBIT D, for
the month in which such loss occurred. Subject to Motiva’s reasonable approval,
Sunoco may provide substitute Crude Oil as payment for unaccounted for or lost
Crude Oil.

(f) In the event the measurements described in Section 6(d) above, or in the
corresponding provisions under the Terminaling Agreement, indicate an aggregate
net gain of Crude Oil during any period, the amount of and title to any such
Crude Oil gained shall remain with Motiva.

(g) For the avoidance of doubt, it is the intent of the parties hereto that the
gains, losses and tolerances be measured in the aggregate across both the
Nederland Terminal and the Pipeline.

SECTION 7

CRUDE OIL TESTING AND MEASUREMENT

(a) The quality of the Crude Oil handled pursuant to this Agreement shall be
determined by Sunoco. Motiva or its designated representative shall have the
right to observe any such quality testing and to draw split samples of the Crude
Oil. The quantity of Crude Oil handled hereunder shall be determined by the
custody transfer meter.

(b) Meter proving procedures and reports shall be in accordance with current
American Petroleum Institute (“API”) guidelines. Meter tickets shall be mutually
agreed upon and signed by both parties and together with the meter proving
report shall be the only recognized documents for custody transfer.

(c) It is agreed that, unless such is not possible due to instrument or
mechanical failure of meters, the measurement system proving and calibration is
to be made at the custody transfer

 

-14-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

meter. The measurement system shall be proven and calibrated during each
calendar month or for each crude type or for a flow rate change of more than +/-
10%, or for a gravity change more than 5° from the prior calibration, or any
condition which results in a meter factor variation of more than .0010. The
meter will be proved and witnessed monthly.

(d) It is agreed that in the event of meter failure during the course of
transfer and discharge operations at the custody transfer meter, adjustment will
be made based on pipeline information supplied by Motiva and Sunoco.

(e) Unless otherwise provided for herein, applicable sections of the API Manual
of Petroleum Measurement Standards are to be observed and apply as to any
measurement by mutually agreeable meters and/or pipeline measurement, as well as
the sampling of Crude Oil at the custody transfer meter.

SECTION 8

TITLE AND CUSTODY

Title to the Crude Oil transported in the Pipeline shall always remain with
Motiva. Notwithstanding, Sunoco shall be deemed to have custody of and
responsibility for the Crude Oil, starting from the Origin, through the
Pipeline, and ending at the point when the Crude Oil reaches the Destination.
Provided that should Motiva cause the Pipeline to deliver Crude Oil temporarily
to the Port Arthur Refinery facility in Port Neches, Texas, Motiva shall have
custody and responsibility of the Crude Oil while it is located at the Port
Neches facility.

SECTION 9

COMMON CARRIAGE-PUBLISHED TARIFF

(a) Sunoco is expected to be a common carrier for hire with respect to the
operation of the Pipeline. The transportation of any Crude Oil hereunder through
the Pipeline shall be based on the applicable rules and regulations set forth in
the tariff that Sunoco will file or cause to be filed with the Federal Energy
Regulatory Commission (“FERC”) covering the movement of Crude Oil from the
Origin to the Destination (the “Incentive Tariff”).

(b) The initial tariff rates under the Incentive Tariff are set forth in EXHIBIT
B-1. The applicable rates, rules, and regulations set forth in the Incentive
Tariff may be adjusted by Sunoco to reflect the terms and conditions set forth
in this Agreement in accordance with the applicable rules and regulations of the
FERC.

 

-15-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(c) The Incentive Tariff may be adjusted only on each annual anniversary of the
Effective Date to reflect the positive or negative rate of change, if any, in
the final Producers Price Index for Finished Goods (seasonally adjusted) as
published by the U.S. Department of Labor, Bureau of Labor Statistics, for such
period, and such adjusted consideration shall be effective for the subsequent
year. Adjustments will be calculated as follows:

Adjusted Fee = Incentive Tariff for the immediately prior year + Adjustment

Where: Adjustment = [P2/P1 – 1] x (Incentive Tariff for the immediately prior
year)

Where: P1 is the final Producers Price Index for Finished Goods (PP1 –
FG)(seasonally adjusted) as published by the U.S. Department of Labor, Bureau of
Labor Statistics, for the year immediately preceding the prior year.

Where: P2 is the final Producers Price Index for Finished Goods (PP2 –
FG)(seasonally adjusted) as published by the U.S. Department of Labor, Bureau of
Labor Statistics, for the prior contract year.

The adjustment calculated herein shall be capped at [******] per year during the
period beginning on the Effective Date and ending on the Commencement Date. The
Parties agree that the Incentive Tariff for any year shall not be lower than the
Incentive Tariff in effect on the Effective Date.

SECTION 10

MARINE DOCK AND TERMINALING AGREEMENT

Contemporaneously with the execution of this Agreement, Motiva will enter into
the Terminaling Agreement with Sunoco Partners, with respect to the storage and
handling of Crude Oil through the Nederland Terminal. Under the terms of the
Terminaling Agreement, Motiva will deliver Crude Oil to the Nederland Terminal
for subsequent deliveries into the Pipeline, based on the terms and conditions
set forth in such agreement.

 

-16-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

SECTION 11

PRICE AND PAYMENT

(a) Sunoco shall invoice Motiva on or before the tenth (10th) day of each month
for amounts owing for the preceding month under the terms of this Agreement. Any
payments under this Agreement shall be due and payable within twenty (20) days
from the invoice date, regardless of whether received before, on, or after the
tenth (10th) day of the month. Payment of the amount specified on the invoice
shall be made by electronic funds transfer of immediately available funds to the
bank and bank account set forth on each invoice. For any invoice submitted
hereunder, Sunoco shall promptly provide any supporting documentation reasonably
requested by Motiva.

(b) In the event Motiva disputes any portion of any invoice, Motiva shall
promptly notify Sunoco in writing of the disputed portion and pay the undisputed
portion according to the terms of this Section. After receipt of such notice,
Sunoco shall promptly work with Motiva to resolve the dispute. If the parties
are unable to resolve such dispute within thirty (30) days after receipt of such
notice, the parties will submit to arbitration in accordance with the Governing
Law clause in Section 21 herein.

(c) Should Motiva fail to pay part or all of the amount of any undisputed
invoice or any disputed invoice which has been resolved for a period of sixty
(60) days following the due date thereof, then Sunoco may charge interest at the
prime rate charged by Citibank, N.A., New York, New York (or any successor
thereof) on the unpaid portion of the invoice, computed from the date payment is
due until the date payment is received. If such failure to pay continues for
sixty (60) day after such payment is due, Sunoco, in addition to any other
remedy it may have hereunder or otherwise, may suspend further service for
Motiva under this Agreement until such undisputed amount is paid.

SECTION 12

DEFAULT/TERMINATION

(a) Either Party may terminate this Agreement by written notice to the other
Party if the other Party shall become insolvent or shall make an assignment for
the benefit of creditors, or if any of the business or property of either Party
shall come into the possession of a receiver or of any other governmental or
court agency acting on behalf of creditors, or if any proceedings under any

 

-17-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

bankruptcy or insolvency act or acts for the relief of debtors shall be
commenced against, by or in respect of either Party, or if any execution shall
be issued against the property of either Party, or if any judgment against
either Party, not fully bonded, shall remain unpaid in whole or in part for at
least sixty (60) days after the entry thereof. Any termination pursuant to this
paragraph shall become effective on the date specified in the Party’s notice,
but in no event prior to actual receipt by the other Party.

(b) Notwithstanding anything in this Agreement to the contrary, Motiva shall
have the right, without cause and for its sole convenience, to cancel this
Agreement in its entirety at any time prior to the Commencement Date. If Motiva
cancels this Agreement, Motiva shall also cancel the Terminaling Agreement in
accordance with its terms. If Motiva cancels this Agreement as herein provided,
Sunoco shall have the option to either (i) retain ownership of the Pipeline,
including but not limited to permits, engineering documents, and equipment
delivered on order; or (ii) assign to Motiva all right, title and interest in
and to the Pipeline to the extent of the construction completed in performance
of this Agreement on the date of the termination (“Work Product”), including but
not limited to permits, engineering documents, and equipment delivered or on
order. The Work Product shall, in that event, be the sole and exclusive property
of Motiva and may be used for any purpose Motiva desires without additional fee
or cost. If Sunoco elects to retain ownership of the Pipeline, Motiva shall have
no further obligations to Sunoco hereunder. If Sunoco elects to assign the
Pipeline and Work Product to Motiva, Motiva shall pay as follows:

 

  (i) if Motiva cancels this Agreement at any time during the calendar year
2007, Motiva will reimburse Sunoco for the lesser of (1) the actual reasonable
expenses (including interest on the capital expenditures to date, at the prime
rate charged by Citibank, N.A., New York, New York (or any successor thereof))
Sunoco has incurred from the Effective Date until the date notice of termination
is given by Motiva, subject to verification by Motiva; or (2) the pro rata
percentage of Sunoco’s quarterly forecast of expenses for 2007 as scheduled on
EXHIBIT A, calculated based on when the notice is given by Motiva, subject to
verification by Motiva;

 

-18-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

  (ii) If Motiva cancels this Agreement at any time from January 1, 2008 through
the Commencement Date, Motiva will pay to Sunoco an amount equal to the capital
expenditures (including interest on the capital expenditures to date, at the
prime rate charged by Citibank, N.A., New York, New York (or any successor
thereof)) incurred by Sunoco for the Pipeline from the Effective Date until the
date notice of termination is given by Motiva, plus a return on those capital
expenditures of [******], subject to Motiva’s verification rights.

(c) In addition to any other provisions of this Agreement relative to default,
it is understood and agreed that if either Party hereto shall fail to
substantially perform any of the material covenants or obligations imposed upon
it under and by virtue of this Agreement, and such non-performance is not the
result of Force Majeure, then in such event the other Party hereto may, at its
option, terminate this Agreement by proceeding as follows: The Party not in
default shall cause a written notice to be served on the Party in default
stating specifically the cause for terminating this Agreement and declaring it
to be the intention of the Party giving notice to terminate the same; whereupon
the Party in default shall have thirty (30) days after the service of the notice
in which to remedy or remove the cause or causes stated in the notice for
terminating the Agreement. If within the thirty (30) day period the Party in
default does so remedy or remove said cause or causes, then such notice shall be
withdrawn and this Agreement shall continue in full force and effect. In case
the Party in default does not so remedy or remove the cause or causes within the
thirty (30) day period, then, at the option of the Party giving the notice, this
Agreement shall become null and void from and after the expiration of the thirty
(30) day period.

(d) If a default cannot be reasonably cured within the thirty (30) day period
and the Party in default has commenced to remedy the cause of default within
such thirty (30) day period and continues diligently pursuing such remedy after
such thirty (30) day period, then the Party not in default may not terminate
this Agreement until such time as the Party in default stops diligently pursuing
a remedy of the default or it becomes obvious after ninety (90) days following
such thirty (30) day period that a remedy of the default is not immediately
forthcoming. Any cancellation of this Agreement pursuant to the provisions of
this Section 12 shall be without prejudice to the rights of either Party
including, but not limited to: 1) the right to collect any amounts then due such
Party

 

-19-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

under the provisions of this Agreement; provided, however, that Motiva shall
have no obligation to pay any Deficiency Payments if Sunoco is the Party in
default and unable to remedy such default; and 2) the right of Motiva to receive
any Crude Oil for which it has paid the charges hereunder but has not received
prior to the time of cancellation.

SECTION 13

LIMITATION OF LIABILITY

NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR LOSS OF PROFITS, INDIRECT,
SPECIAL, EXEMPLARY OR PUNITIVE OR CONSEQUENTIAL DAMAGES RESULTING FROM THE
BREACH OF THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBLE
EXISTENCE OF SUCH DAMAGES. ANY ACTION BY EITHER PARTY AGAINST THE OTHER ARISING
FROM OR CONNECTED TO THIS AGREEMENT MUST BE BROUGHT WITHIN TWO (2) YEARS AFTER
THE CAUSE OF ACTION AROSE.

SECTION 14

TAXES/INSURANCE

(a) Taxes. Motiva shall pay any and all taxes, assessment, or charges levied on
the Crude Oil covered herein, including property taxes on the inventory owned by
Motiva. Sunoco shall pay any and all taxes, assessments or charges levied on the
Pipeline (real property and/or personal tax) or services performed.

The Incentive Tariff described in EXHIBIT B-1 shall include all applicable taxes
and fees and shall not be subject to additional adjustment for any tax or fee.

(b) Insurance. Sunoco shall maintain, at its sole cost, at all times while
performing under this Agreement, the following minimum insurance coverage with
providers satisfactory to Motiva:

 

•     Workers’ Compensation

  Limit: Statutory

•     Employers’ Liability

  Limit: $5,000,000 each occurrence

 

-20-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

For all its employees engaged in performing any services for Sunoco under a
Terminal Schedule, Worker’s Compensation Insurance and/or Longshoremen’s and
Harborworker’s Compensation Insurance, or similar social insurance in accordance
with and endorsed by Law which may be applicable to those employees.

 

•     Commercial General Liability

  Limit: $10,000,000 each occurrence

Commercial General Liability Insurance (including, but not limited to,
contractual liability) with combined personal injury and property damage.

 

•     Automobile Liability

  Limit: $10,000,000 each accident

Business or Commercial Automobile Liability insurance covering all vehicles used
in performing any work pursuant to this Agreement, with such policy endorsed
appropriately when hazardous materials transportation is involved.

Where permissible by law, insurance policies shall provide a waiver of
subrogation in favor of Motiva, allow for the separation of insureds, shall be
considered primary insurance to any insurance maintained by Motiva, and give
Motiva thirty (30) days written notice of cancellation or material change. Any
deductible or retention of insurable risks shall be for Sunoco’s account. The
Insurance required in this section and each certificate evidencing the Insurance
shall name Motiva (and its members, subsidiaries, affiliates, and joint venture
partners to the extent of their interest) an additional insured as it pertains
to this Agreement, without regard to the allocation of liability provisions
which may be contained in this Agreement, to the extent of any claim, loss, or
liability within the scope of the required Insurance. Sunoco has the right to
self-insure any of the aforementioned coverages, provided that Sunoco will
provide Motiva with a letter evidencing such self-insurance.

SECTION 15

INDEPENDENT CONTRACTOR

In performing the services pursuant to this Agreement, Sunoco is acting solely
as an independent contractor maintaining complete control over its employees and
operations. Neither Party is authorized to take any action in any way whatsoever
for or on behalf of the other, except as may be necessary to prevent injury to
persons or property, or, to contain, reduce or clean up any spills that may
occur.

 

-21-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

SECTION 16

MANAGEMENT OF HEALTH, SAFETY, AND ENVIRONMENTAL

PROTECTION SPILLS/ENVIRONMENTAL POLLUTION

While on Port Arthur Refinery premises, Sunoco shall take all reasonable
precautions in connection with this agreement to (1) ensure the safety and
health of Sunoco’s personnel and third parties; (2) ensure the impact of their
activities on the environment is minimized; and (3) to protect all property
whatsoever. Sunoco shall, while on Port Arthur Refinery premises:

(a) Have formal documented safe working procedures sufficient to provide control
over the activities in support of this Agreement, including techniques for the
identification and mitigation of risks;

(b) Promptly advise Motiva of any incident involving Motiva’s Crude Oil handled
under this Agreement and provide written follow-up information on any related
investigation and corrective action within 14 days of incident.

(c) Motiva reserves the right to confirm compliance with this Section by means
of a physical inspection of Sunoco’s premises and a review of Sunoco’s records
and operating procedures for the Pipeline, at Motiva’s expense.

(d) In the event of any Crude Oil spill or discharge or other environmental
pollution caused by or in connection with the handling of Motiva’s Crude Oil,
Sunoco shall commence containment or clean-up operations and shall notify Motiva
promptly of such operations. Unless such spill or discharge referred to in this
Section 16 is the result of Motiva’s negligence, all costs of containment or
clean-up shall be borne by Sunoco. In the event a third Party is legally liable
for costs and expenses borne by Motiva under this Section, Sunoco shall
cooperate with Motiva for the purpose of obtaining reimbursement.

(e) Sunoco shall obtain, read, understand and comply with Motiva’s Port Arthur
Refinery’s rules and regulations which set forth standards of conduct, safety,
health, environmental,

 

-22-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

and certain procedures to which Sunoco must adhere on Motiva’s Port Arthur
Refinery’s premises. Sunoco will instruct its employees, and subcontractors as
to the requirements and will enforce compliance. Any personnel not complying
with Motiva’s Port Arthur Refinery’s rules and regulations will be promptly
removed from Motiva’s Port Arthur Refinery premises at Motiva’s discretion.
Should there be a conflict between this Agreement and the local requirements of
the Port Arthur Refinery, the more stringent requirement of the two shall apply.

(f) Motiva shall obtain, read, understand and comply with Sunoco’s rules and
regulations which set forth standards of conduct, safety, health, environmental,
and certain procedures to which Motiva must adhere on Sunoco’s premises. Motiva
will instruct its employees, and subcontractors as to the requirements and will
enforce compliance. Any personnel not complying with Sunoco’s rules and
regulations will be promptly removed from Sunoco’s premises at Sunoco’s
discretion. Should there be a conflict between this Agreement and the local
requirements of Sunoco’s premises, the more stringent requirement of the two
shall apply.

SECTION 17

FORCE MAJEURE

(a) For purposes of this Agreement, “Force Majeure” shall mean, the occurrence
of any of the following, for the period of time, if any, that the performance of
a Party’s material obligations under this Agreement are actually, materially,
and reasonably delayed or prevented thereby, acts of God; strikes; lockouts;
boycotts; picketing; labor or other industrial disturbance; explosions; nuclear
reaction or radiation, radioactive contamination; acts of a public enemy; fires;
acts of terrorism; explosions; material breakage of or material accidents to the
Pipeline, lines of pipe, storage tanks, docks; wars (declared or undeclared);
blockades; insurrections; riots; epidemics; landslides; earthquakes; storms;
hurricanes; lightning; floods; extreme cold or freezing; extreme heat; washouts;
arrests and restraints of governments (but excluding restraints occurring as a
result of any violations, by the Party claiming the right to delay performance,
of applicable law or the terms and provisions of this Agreement); confiscation
or seizure by any government or public authority; compliance with any federal,
state, or local law, or with any regulation, order, or rule of domestic or
international governmental agencies, or authorities or representatives of any
domestic or international government acting under claim or color of authority,
including compliance with permitting regulation for the Pipeline; the
commandeering or requisitioning by United States civil or military

 

-23-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

authorities of any raw or component materials, Crude Oil, or facilities
including, but not limited to, producing, manufacturing, transportation, and
delivery facilities, and perils of navigation, even when occasioned by
negligence, malfeasance, default, or errors in judgment; civil disturbances; or
any other causes, whether of the kind herein enumerated or otherwise, the
foregoing of which in any event are not (i) reasonably within the control of the
Party (or its Affiliates) claiming the right to delay performance or (ii) the
result of the gross negligence or willful misconduct of the Party (or its
Affiliates) claiming the right to delay performance. Force Majeure shall not
include (i) increases in costs of materials; or (ii) a party’s financial
inability to perform.

(b) Subject to the provisions of this Section 17, if a Party is prevented from
performing its obligations under this Agreement due to an event of Force
Majeure, then, to the extent that it is affected by the event of Force Majeure,
the obligations of that Party shall be deferred during the continuance of that
Party’s inability to perform caused by the event of Force Majeure, but for no
longer period. If a Force Majeure event renders any Party unable, in whole or in
part, to carry out its obligations under this Agreement, that Party must give
the other Party notice and full particulars in writing as soon as practicable
after the occurrence of the causes relied on, or give notice by telephone and
follow the notice with a written confirmation within forty-eight (48) hours. The
Party providing the notice shall use commercially reasonable efforts to
(i) ameliorate the conditions; (ii) resume the continuation of its performance
under this Agreement; and (iii) minimize the impact of the condition on the
other Parties. No Party shall be compelled to resolve any strikes, lockouts, or
other industrial disputes other than as it shall determine to be in its best
interests.

(c) If a Force Majeure event declared by Sunoco results in Motiva being unable
to transport the Minimum Volume Obligation during one or multiple Accounting
Periods, then the Minimum Volume Obligation for that Accounting Period (and any
successive Accounting Period, if applicable), shall be reduced in the same
proportion and for the same period of time as Motiva’s ability to transport is
so affected, and Motiva shall have no obligation (including payment obligation)
for any amount in excess of the reduced volume. If a Force Majeure event extends
(or is reasonably expected to extend) beyond two hundred seventy (270) days, or
upon notice from Sunoco that such Force Majeure event is reasonably expected to
extend beyond two hundred seventy (270) days, Motiva may terminate this
Agreement, negotiate new Incentive Tariffs and/or negotiate to extend the Term.

 

-24-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(d) If a Force Majeure event declared by Motiva results in Motiva being unable
to ship all or part of the Minimum Volume Obligation through the Pipeline or
receive all or part the Minimum Volume Obligation at the Port Arthur Refinery
during an Accounting Period, then upon resolution of that Force Majeure event,
Sunoco shall calculate a “Force Majeure Deficiency Volume,” defined herein as
being equal to (1) the Minimum Volume Obligation for the affected Accounting
Period(s); divided by (2) the total number of calendar days in the affected
Accounting Period(s); multiplied by (3) the number of days that the Force
Majeure event was in effect; minus (4) the actual volume of Crude Oil that
Motiva shipped through the Pipeline, if any, during the period affected by the
Force Majeure event.

 

  (i) The occurrence of a Force Majeure event will not relieve Motiva of the
obligation to ship the Force Majeure Deficiency Volume during the Term of this
Agreement. Notwithstanding, Motiva shall not be required to pay a Deficiency
Payment for any Force Majeure Deficiency Volume, as long as Motiva ships the
Force Majeure Deficiency Volume during any future Accounting Period or
Accounting Periods during the Term.

 

  (ii) At the end of any Accounting Period during the Term, Motiva shall have
the option to notify Sunoco that Motiva wishes to apply any volumes of Crude Oil
that Motiva shipped through the Pipeline during that Accounting Period in excess
of the Minimum Volume Obligation to reduce any previously incurred Force Majeure
Deficiency Volume.

 

  (iii) If a Force Majeure Deficiency Volume remains upon the expiration or
termination of this Agreement, then Motiva shall have the right, during a time
period corresponding to the number of days that the Force Majeure was in effect,
to ship the Force Majeure Deficiency Volume at the Incentive Tariff rate. Motiva
shall be required to pay a Deficiency Payment for any Force Majeure Deficiency
Volume that remains at the conclusion of this time period.

 

-25-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

SECTION 18

GOVERNMENTAL LAWS, RULES, AND REGULATIONS

(a) This Agreement shall be subject to all valid and applicable federal, state,
and local laws, rules, regulations, tariffs, and orders affecting either Sunoco
or Motiva.

(b) Motiva expressly relieves Sunoco of any and all obligations hereunder to
provide facilities or services when the facilities or services are contrary to
any law, regulation, or ruling.

SECTION 19

NEW LAW OR REGULATION

(a) In the event that during the term of this Agreement, any existing codes and
applicable law, codes, or regulations are amended or new laws, codes and
regulations are enacted or promulgated which, in either case, (1) generally
apply to, affect, or impact all domestic, common carrier crude oil pipelines
which are located (whether entirely or partially) in the State of Texas and
which are of comparable size, age, throughput capacity, and operational
capability as the Pipeline, and (2) will require Sunoco to incur (i) a capital
expense improvement to the Pipeline in excess of [******] prior to the end of
the Term, or (ii) an increase in the cost of operating the Pipeline in excess of
[******] per Contract Year, Sunoco shall, upon written notice to Motiva, have
the right to initiate negotiations for an adjustment in any of the applicable
tariff rates which are set forth in the Incentive Tariff in order to compensate
Sunoco for the required improvements. In such event, Sunoco shall submit such
written notice to Motiva as far in advance of the effective date of such new or
amended law, code or regulation as is reasonably practicable, so as to permit
the Parties to negotiate a mutually acceptable adjustment to the tariff rates
set forth in the Incentive Tariff.

(b) In connection with Sunoco’s request to initiate negotiations to adjust any
of the tariff rates set forth in the Incentive Tariff for the Pipeline, Sunoco
shall provide Motiva, at least ninety (90) days in advance of the effective date
of any tariff adjustment, with a proper showing of the governmental requirement
for such improvements, with a detailed description of the costs and expenses
that Sunoco would incur for such improvements, and an explanation of how such
improvements are the most cost effective means to conform to such governmental
requirements. Motiva shall have the right to verify such estimated costs and to
inspect any of Sunoco’s records related thereto.

 

-26-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(c) If the Parties hereto are unable to mutually agree on an adjustment in the
applicable tariff rates set forth in the Incentive Tariff before it becomes
necessary for Sunoco to take such action so as to be in compliance with the new
or amended law, code or regulation, Sunoco shall charge, and Motiva shall pay
the new tariff rate as specified by Sunoco; provided, however, that Motiva may
dispute the new tariff. In such event, Sunoco shall seek to resolve such dispute
in accordance with the procedures set forth in Section 21 hereof, and in the
event such procedures result in a new tariff that is lower than that imposed by
Sunoco, Sunoco shall refund to Motiva the amounts paid in excess of the new
tariff so determined, for each volume of Crude Oil shipped on the Pipeline
during the period in which the dispute was pending resolution, plus interest at
the Prime rate charged by Citibank, N.A., New York, calculated from the date of
the Sunoco notice provided under Section 19 (a) until the date such new tariff
is determined in accordance with Section 21.

SECTION 20

INDEMNIFICATION

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW AND EXCEPT AS SPECIFIED
OTHERWISE ELSEWHERE IN THE AGREEMENT:

SUNOCO SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS MOTIVA, ITS MEMBERS, AFFILIATES
AND SUBSIDIARY COMPANIES AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,
SUBCONTRACTORS, AND AGENTS FROM AND AGAINST ANY LOSS, DAMAGE, CLAIM, SUIT,
LIABILITY, FINE, PENALTY, JUDGMENT AND/OR EXPENSE (INCLUDING ATTORNEYS’ FEES AND
OTHER COSTS OF LITIGATION) (COLLECTIVELY “LIABILITY(IES)”), (A) ARISING FROM
(I) INJURY, DISEASE OR DEATH OF ANY PERSONS, (II) DAMAGE TO OR LOSS OF ANY
PROPERTY (INCLUDING BUT NOT LIMITED TO MOTIVA’S PORT ARTHUR REFINERY OR ANY
CRUDE OIL), OR (III) DISCHARGES OR SPILLS OR LEAKS OF CRUDE OIL, CAUSED BY OR
RESULTING FROM THE NEGLIGENT ACTS OR OMISSIONS OR WILLFUL MISCONDUCT OF SUNOCO,
ITS EMPLOYEES, AGENTS, OR CONTRACTORS, IN SUNOCO’S PERFORMANCE OF THIS
AGREEMENT; OR (B) ARISING OUT OF SUNOCO’S FAILURE, OR ITS EMPLOYEES’, AGENTS’,
OR CONTRACTORS’ FAILURE TO COMPLY WITH ALL APPLICABLE FEDERAL, STATE, OR LOCAL
GOVERNMENTAL LAWS, REGULATIONS, AND RULES.

 

-27-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

MOTIVA SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS SUNOCO, ITS PARENT, AFFILIATES
AND SUBSIDIARY COMPANIES AND THEIR DIRECTORS, OFFICERS, SUBCONTRACTORS,
EMPLOYEES AND AGENTS FROM AND AGAINST ANY LIABILITIES, (A) ARISING FROM
(I) INJURY, DISEASE OR DEATH OF ANY PERSONS, (II) DAMAGE TO OR LOSS OF ANY
PROPERTY (INCLUDING, BUT NOT LIMITED TO SUNOCO’S FACILITIES), OR (III)
DISCHARGES OR SPILLS OR LEAKS OF CRUDE OIL, CAUSED BY OR RESULTING FROM THE
NEGLIGENT ACTS OR OMISSIONS OR WILLFUL MISCONDUCT OF MOTIVA IN THE PERFORMANCE
OF THIS AGREEMENT; OR (B) ARISING OUT OF MOTIVA’S FAILURE TO COMPLY WITH ALL
APPLICABLE FEDERAL, STATE, OR LOCAL GOVERNMENTAL LAWS, REGULATIONS, AND RULES.

IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, OR
PUNITIVE LOSS, DAMAGE, OR EXPENSES (INCLUDING LOST PROFITS OR SAVINGS) EVEN IF
IT HAS BEEN ADVISED OF THEIR POSSIBLE EXISTENCE. ANY CLAIM BY EITHER PARTY FOR
INDEMNIFICATION HEREUNDER MUST BE BROUGHT WITHIN TWO (2) YEARS AFTER THE CAUSE
OF ACTION AROSE.

Sunoco or Motiva, as soon as practicable after receiving notice of any claim for
indemnification hereunder, shall furnish to the other full particulars within
its knowledge thereof and shall render all reasonable assistance requested by
the other Party. Each shall have the right, but not the duty to participate, at
its own expense, with counsel of its own selection, in the defense and/or
settlement thereof without relieving the other of any obligations hereunder. The
Parties’ obligations under this Section shall survive any termination of the
Agreement. The foregoing indemnities shall not limit the insurance coverage
applicable to Sunoco or Motiva under this Agreement.

 

-28-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

SECTION 21

GOVERNING LAW AND ARBITRATION

(a) This Agreement shall be interpreted and construed in accordance with the
laws of the State of Texas, without regard to conflict of law principles.

(b) In the event of a dispute, controversy, or claim arising out of or relating
to this Agreement (“Dispute”), the Parties shall first undertake to settle their
Dispute by good faith negotiations. Any Party may commence this process by
serving the other Party with a written notice of the Dispute (a “Notice of
Dispute”) that shall briefly describe the nature of the Dispute and the relief
or remedy requested. If for any reason whatsoever the Dispute has not been
settled within thirty (30) days of service of the Notice of Dispute, then the
Parties agree to submit the Dispute to non-binding mediation with a neutral
mediator selected by the Parties. The costs of such mediator will borne equally
by the Parties. If the Parties cannot agree on a mediator or if the Dispute
cannot be settled at mediation within one hundred twenty (120) days of service
of the Notice of Dispute, then the Parties agree to submit the Dispute to
arbitration in Houston, Texas in accordance with the then-current CPR
International Institute for Conflict Prevention and Resolution Rules for
Non-Administered Arbitration of the CPR International Institute for Conflict
Prevention and Resolution and this provision. The arbitration shall be governed
by the United States Arbitration Act, 9 U.S.C. Sections 1-16, to the exclusion
of any provisions of state law inconsistent therewith or which would produce a
different result. Judgment upon the award rendered by the arbitrators may be
entered by any court having jurisdiction. The arbitration shall be held in
Houston, Texas or such other location as may be convenient and agreed to in
writing by the Parties. There shall be three arbitrators, one of which shall be
selected by each Party and the third to be selected by the other two
arbitrators. The arbitrators shall determine the Dispute of the Parties and
render a final award in accordance with the substantive law of the State of
Texas, excluding the conflicts provisions of such law. The arbitrators shall set
forth the reasons for the award in writing. The terms hereof shall not limit any
obligation of a Party to defend, indemnify or hold harmless another Party
against court proceedings or other claims, losses, damages, or expenses. In the
event any ancillary dispute between the Parties arises out of the Dispute, it
may be resolved in the arbitration proceedings.

 

-29-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

SECTION 22

RIGHT TO AUDIT

Motiva shall have the right, at reasonable times and on reasonable notice (but
in no event on less than two (2) weeks notice), to audit the books and records
of Sunoco as these records pertain to Motiva’s shipments on the Pipeline. Audits
may be performed by the employees, independent accounting firms, and other
designated representatives of Motiva (including internal auditing personnel—the
selection of these personnel being subject to the sole consent of Sunoco, which
consent shall not be unreasonably withheld) at Motiva’s sole cost and expense.
Sunoco shall, at Motiva’s expense, fully cooperate with Motiva’s representatives
to accomplish the audit as expeditiously as possible.

SECTION 23

BUSINESS STANDARDS

Sunoco shall establish and maintain precautions to prevent its employees, agents
or representatives from making, receiving, providing or offering substantial
gifts, entertainment, payments, loans or other consideration to employees,
agents or representatives of Motiva for the purpose of influencing those persons
to act contrary to Motiva’s best interests. This obligation shall apply to the
activities of the employees of Sunoco in their relations with the employees of
Motiva and their families and/or third parties arising from this Agreement.
Further, Sunoco agrees that all financial settlements, billings and reports
rendered to Motiva or its representative shall reflect properly the facts about
all activities and transactions handled for the account of Motiva.

SECTION 24

ASSIGNMENT AND SUBCONTRACT

(a) If Motiva, prior to the expiration of the Term of this Agreement (and any
permitted extension thereof), enters into an agreement with a third-party
purchaser other than an Affiliate (a “Third-Party Purchaser”) to purchase the
Port Arthur Refinery (but not all or substantially all of Motiva’s assets),
Motiva shall notify Sunoco of the agreement and the name and address of the
Third-Party Purchaser, no later than ninety (90) days prior to the closing of
the sale of the Port Arthur Refinery. If Motiva is selling the Port Arthur
Refinery, it shall assign this Agreement to the Third-Party Purchaser, except
that Motiva will continue to be responsible for any payments due to Sunoco for
services provided by Sunoco to Motiva prior to the effective date of such
assignment.

 

-30-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(b) Neither Sunoco nor Motiva shall ever transfer, assign, or encumber this
Agreement without the prior written consent of each of the other Party, which
consent shall not be withheld if the transferee or assignee is credit-worthy and
has the financial, technical and commercial capability to fulfill the
transferring Party’s obligations under this Agreement, provided that the
transferring Party provides such evidence as the other Party may reasonably
request to verify the qualifications of the transferee or assignee. The
foregoing shall not apply to the following situations:

 

  (i) Motiva shall have the right to transfer or assign all of its rights under
this Agreement to any Affiliate of Motiva or any entity that is successor to all
or substantially all of Motiva’s assets, without the prior written consent of
Sunoco;

 

  (ii) Subject to Section 25, “First Right of Offer”, Sunoco shall have the
right to transfer or assign all of its rights and obligations under this
Agreement to any Affiliate, or any entity that is successor to all or
substantially all of its assets, without the prior written consent of the other
Party.

(c) Upon an assignment or transfer in compliance with Section 24 (b), the
transferring Party will cease to be responsible for the fulfillment of its
obligations under this Agreement, except for such obligations as arose before
the effective date of such assignment or transfer.

(d) Motiva shall have the right to subcontract all or any part of this Agreement
for all or any part of the Term, provided that in such event, Motiva shall
remain obligated to Sunoco for the fulfillment of Motiva’s obligations under
this Agreement.

SECTION 25

RIGHT OF FIRST OFFER

(a) If Sunoco decides to sell or otherwise transfer its ownership interest in
all or any part of the Pipeline (except to an Affiliate), Sunoco shall provide a
written notice to Motiva (the “First Offer Notice”) that specifies the interest
being sold, terms, conditions and price for the sale. The

 

-31-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

First Offer Notice shall constitute an offer to sell the relevant ownership
interest in the Pipeline to Motiva, for the price and under the terms and
conditions specified therein. Upon receipt of the First Offer Notice, Motiva
shall have a term of sixty (60) days to give written notice to Sunoco advising
as to whether Motiva elects to purchase Sunoco’s interest in the Pipeline or any
part thereof. In the event that Motiva declines to exercise such right, Sunoco
shall be free to contract to sell or transfer the relevant interest in the
Pipeline to a Third Party Purchaser at any time within six (6) months of the
expiration of the sixty (60) day period above (unless waived by Motiva) at a
price that is equal to or greater than the price specified in the First Offer
Notice and under terms and conditions that, taken as a whole, are no more
economically favorable than those described in the First Offer Notice.

(b) In the event of any permitted sale, assignment or other disposition of
Sunoco’s interest in the Pipeline or any part thereof, the party purchasing
Sunoco’s interest shall, at the closing for any permitted transfer, assume in
writing and agree to be bound by the provisions of this Agreement (and any other
associated agreements between Motiva and Sunoco that pertain to the Pipeline)
for all purposes. Without strict compliance with this Section 25, any transfer
or attempted transfer of Sunoco’s interest in the Nederland Terminal shall be
null and void.

SECTION 26

MISCELLANEOUS

(a) Waivers and Remedies. The failure of either Motiva or Sunoco to insist in
any one or more instances upon strict performance of any of the provisions of
this Agreement or to take advantage of any of its rights hereunder shall not be
construed as a subsequent waiver of any provisions or the relinquishment of any
rights for the future. Unless specifically provided otherwise in this Agreement,
the rights and remedies provided by this Agreement are cumulative, and the use
of any one right or remedy by a Party shall not preclude or waive its right to
use any or all other remedies. Rights and remedies hereunder are given in
addition to any other rights a Party may have by law or in equity unless
provided otherwise in this Agreement.

(b) As between the Parties, it shall be conclusively presumed that each and
every provision of this Agreement was drafted jointly by Sunoco and Motiva.

 

-32-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(c) Notices. Notices under this Agreement will be considered properly given when
mailed, registered or certified, or sent by a nationally recognized overnight
carrier, return receipt requested, with postage prepaid, or sent by facsimile or
telex and addressed as follows:

 

If to MOTIVA ENTERPRISES LLC:                                   MOTIVA
ENTERPRISES LLC                                   909 Fannin  
                                Houston, Texas 77010  
                                Attention: MOTIVA Supply Strategy Manager  
                                Facsimile No.: (713) 767-5666   If to SUNOCO
PIPELINE L.P.                                   SUNOCO PIPELINE L.P.  
                                1735 Market Street, Suite LL  
                                Philadelphia, PA 19103  
                                Attention: Vice-President  Business Development
                                  Facsimile No.: (215) 246-8287  
            With a copy to:                                   Attention: General
Counsel                                   SUNOCO PIPELINE L.P.  
                                1735 Market Street, Suite LL  
                                Philadelphia, PA 19103  
                                Facsimile No.: (215) 246-8113  

or to any addresses as may hereafter be designated by like notice. Notice given
by mail will be effective forty-eight (48) hours after it is placed in a mailbox
for mailing. Notice given by facsimile will be effective upon actual receipt if
received during the recipients normal business hours, or at the beginning of the
recipients next business day after receipt if not received during the recipients
normal business hours; provided that notices by facsimile are confirmed promptly
after transmission by delivery to the recipient of a copy thereof in writing by
certified mail or personal delivery.

 

-33-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(d) Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute but one and the same instrument.

(e) Entirety of Agreement. This Agreement and the provisions of the Terminaling
Agreement that are reflected herein, including any exhibits hereto, constitutes
the sole and entire agreement among the Parties with respect to its subject
matter and all other matters contained herein, superseding all prior
negotiations, statements, representations, correspondence, offers, discussions,
agreements, and understandings relating to this transaction. This Agreement may
not be modified or altered orally or in any manner other than by an express
agreement in writing signed by all persons or entities that are Parties to this
Agreement at that time. This Agreement and the terms and conditions contained
herein shall apply to and are binding upon the legal representatives,
successors, and assigns of the Parties.

(f) U.S.Dollars. All monetary amounts set forth herein are based on United
States Dollars.

(g) Survival of Termination. The Parties acknowledge and agree that any rights
of a Party arising under this Agreement prior to its termination or expiration,
including but not limited to a right to indemnification with respect to any
matter, shall survive the termination or expiration of this Agreement.

(h) Authority.

(1) Sunoco represents and warrants to the others that it is a limited
partnership duly organized under the laws of the State of Texas and that it is
qualified to do business in all jurisdictions relevant to its activities under
this Agreement.

(2) Motiva represents and warrants that it is a limited liability company duly
organized under the laws of its jurisdiction of organization and that it is
qualified to do business in all jurisdictions relevant to its activities under
this Agreement.

 

-34-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(3) Each Party represents and warrants that it has the requisite power and
authority to enter into and perform its obligations under this Agreement and
that, when executed and delivered to the other Party, this Agreement shall
constitute a valid and legally binding obligation of that Party.

(4) Each Party represents and warrants that the execution, delivery, and
performance by it of its obligations hereunder will not result in a breach of or
constitute a default under any provision of its corporate charter, articles of
incorporation, by-laws or certificate of limited partnership (for Sunoco);
limited liability company agreement (for Motiva); or any agreement or instrument
to which it is a Party and which is material to its performance of its
obligations hereunder or any order, judgment, or ruling of any court or
governmental agency to which it is a Party or by which it is bound.

(i) Savings Clause. If any term, covenant, or condition of this Agreement, or
the application thereof to any person or circumstance, shall to any extent be
held to be invalid or unenforceable, the remainder of this Agreement, or the
application of any such term, covenant, or condition to persons or circumstances
other than those as to which it has been held to be invalid or unenforceable,
shall not be affected thereby, and, except to the extent of any such invalidity
or unenforceability, this Agreement and each term, covenant, and condition of
the Agreement shall be valid and shall be enforced to the fullest extent
permitted by law.

(j) Headings Not Part of Agreement. Headings of articles, sections and
subsections of this Agreement are inserted for convenience of reference only;
they constitute no part of this Agreement and are not to be considered in the
construction or interpretation of this Agreement.

(k) No Third Party Beneficiaries. This Agreement is not intended to confer any
rights or benefits on any persons other than the Parties, and all third-Party
beneficiary rights are expressly denied.

 

-35-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

(l) Costs and Expenses. Except as otherwise provided herein, each party shall
bear its own costs and expenses, including but not limited to, attorney’s fees
incurred in connection with this Agreement.

(m) Confidentiality.

(1) All information generated or provided to any party or any Affiliate of any
Party, including but not limited to, (a) documents (and amendments thereto)
executed by, correspondence to or from and memoranda prepared by the other
Party, relating to the construction or operation of the Pipeline, including the
transportation, handling, and storage of Crude Oil, or any Audit, and (b) this
Agreement and any amendments hereto and all documents relating hereto, including
documents or reports regarding accounting or throughput matters, shall be
confidential and shall not be released to any entity other than a Party or its
Affiliates, without the express review and prior written consent of the other
Party.

(2) The confidentiality obligations shall not pertain to: (a) information which
is in the public domain; (b) information which is published or otherwise becomes
part of the public domain through no fault of the Parties or their Affiliates,
or the respective directors, officers, managers, employees, agents, advisors,
service providers or representatives of the Parties or their Affiliates;
(c) information which a Party can demonstrate was in such Party’s (or an
Affiliates of such Party’s) possession at the time of disclosure and was not
acquired by such Party directly or indirectly from the other Party on a
confidential basis; (d) information which becomes available to a Party on a
non-confidential basis (whether directly or indirectly) from a source which, to
the best of such Party’s knowledge, did not acquire the information on a
confidential basis; (e) information which is independently developed by a Party
not having access to the confidential information of the other Party; or
(f) information which is required to be disclosed (i) by federal or state law,
rule or regulation, stock exchange rules or by any applicable judgment, order or
decree of any court or governmental authority having jurisdiction in the
proceeding or (ii) in connection with the preparation of tax

 

-36-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

returns, communications with any governmental authority with respect thereto or
proceedings relating to taxes; provided, however, that the Party required to
disclose such information, to the extent practicable, shall provide the other
Party with prompt notice thereof so that other such Party may seek a protective
order or other appropriate remedy. In the event that a protective order or other
remedy is not obtained, the Party required to disclose such confidential
information will furnish only that portion of the information which the
disclosing Party is advised by an opinion of its counsel is required in
accordance with this section and such disclosing Party will exercise its best
efforts to obtain reliable assurance that confidential treatment shall be
accorded the information so furnished or disclosed.

(n) Publicity Releases. Sunoco, its employees, agents, and subcontractors shall
not prepare photographs, articles, press releases, or speeches about the
existence of, scope of, or construction or operation to be performed under this
Agreement or any generalities or details about Motiva’s Port Arthur Refinery
premises or business plans, or the Pipeline hereunder without Motiva’s prior
written consent. Applications for approval must be submitted to Motiva in
writing and outline the intended uses thereof. Neither Motiva nor Sunoco will
use the name or trademark of the other in any material prepared for public
announcement, general publication or distribution to any third party without
obtaining prior written permission of the other Party. Notwithstanding the
foregoing, and subject to Section 26(m) “Confidentiality”, either Party may
distribute a copy of this Agreement to any subsidiary, affiliate, agent, or
subcontractor for the purposes of performance hereunder.

{REMAINDER OF PAGE INTENTIONALLY LEFT BLANK—SIGNATURES FOLLOW}

 

-37-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the day and year first above written.

 

WITNESS:

      MOTIVA ENTERPRISES LLC

/s/ Michael W. Stokes

     

/s/ Forrest B. Lauher

      By:        

Forrest B. Lauher

      Title:        

Venture Manager

      Date: December 15, 2006

WITNESS:

      SUNOCO PIPELINE L.P.       By its general partner,       Sunoco Logistics
Partners Operations GP LLC

/s/ Bruce D. Davis, Jr.

     

/s/ Deborah M. Fretz

      By:        

Deborah M. Fretz

      Title:        

President

      Date: December 15, 2006

 

-38-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

EXHIBIT B-1

Tariff Information

1. The Incentive Tariff will apply for start-up volumes which are delivered
between Effective Date and Commencement Date. Such start-up volumes shall not
count toward the Minimum Annual Volume.

F.E.R.C. No.            

SUNOCO PIPELINE L.P.

LOCAL PIPELINE TARIFF

Applying On

CRUDE PETROLEUM

From

Nederland Terminal

Nederland, Texas

To

Motiva Port Arthur Refinery

Port Arthur, Texas

Governed, except as otherwise provided herein, by the rules and regulations
published in Sunoco Pipeline L.P.’s F.E.R.C. tariff No. 3, supplements thereto
and successive issues thereof.

The provisions published herein will, if effective, not result in an effect on
the quality of the human environment.

 

-39-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

EFFECTIVE:                     

 

Issued by:

   Compiled by:

[W] Deborah M. Fretz, President

   [W] Yiping Ren

Sunoco Logistics Partners

   Sunoco Logistics Partners

Operations GP LLC, the General Partner of

Sunoco Pipeline L.P.

  

Operations GP LLC, the General Partner of Sunoco

Pipeline L.P.

1735 Market Street, Suite LL

Philadelphia, PA 19103

  

1735 Market Street, Suite LL

Philadelphia, PA 19103

   (215) 977-6861    E-mail: yren@sunocologistics.com

 

Sunoco Pipeline L.P.    FERC No.         

 

TRUNK RATE

FROM    TO     

PTS IN TEXAS

  

PTS IN TEXAS

   Rate in Cents per Barrel of 42 U.S. Gallons       Base       Rate

Nederland Terminal

   Motiva Refinery,    [******]      

Jefferson, County

   Jefferson, County    Contract    Incentive    Rate*       [******]      

 

     

 

 

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

* Contract Incentive Rate Terms:

The Contract Incentive Rate set forth in this tariff applies to shipments of any
shipper contracting for transportation of a minimum guaranteed volume of
[******] barrels per year for a period of ten (10) years.

The Contract Incentive Rate will apply to volumes moved during a Contract Year.
The term “Contract Year” is defined as the twelve (12) month period beginning
with on the Commencement Date of the agreement or any anniversary thereof and
ending 365 consecutive days (366 consecutive days in the case a period has
February 29) later.

Exception to Item 40, F.E.R.C No. 3, Measurement, Testing, Volume Corrections
and Deductions

[******]

Page 2

 

-40-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

EXHIBIT B-2

Tariff Information for Early Volumes

F.E.R.C. No.            

SUNOCO PIPELINE L.P.

LOCAL PIPELINE TARIFF

Applying On

CRUDE PETROLEUM

From

Nederland Terminal

Nederland, Texas

To

Motiva Port Arthur Refinery

Port Arthur, Texas

Governed, except as otherwise provided herein, by the rules and regulations
published in Sunoco Pipeline L.P.’s F.E.R.C. tariff No. 3, supplements thereto
and successive issues thereof.

The provisions published herein will, if effective, not result in an effect on
the quality of the human environment.

 

-41-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

EFFECTIVE:                     

 

Issued by:

   Compiled by:

Deborah M. Fretz, President

   Yiping Ren

Sunoco Logistics Partners

   Sunoco Logistics Partners

Operations GP LLC, the General Partner of

Sunoco Pipeline L.P.

  

Operations GP LLC, the General Partner of Sunoco

Pipeline L.P.

1735 Market Street, Suite LL

Philadelphia, PA 19103

  

1735 Market Street, Suite LL

Philadelphia, PA 19103

   (215) 977-6861    E-mail: yren@sunocologistics.com

 

Sunoco Pipeline L.P.    FERC No.            

 

TRUNK RATE

FROM    TO               

PTS IN TEXAS

  

PTS IN TEXAS

   Rate in Cents per Barrel of 42 U.S. Gallons       Base       Rate

Nederland Terminal

   Motiva Refinery,    [******]      

Jefferson, County

   Jefferson, County    Contract    Incentive    Rate*       [******]      

 

     

 

 

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

* Contract Incentive Rate Terms:

  (1) The contract incentive rate set forth in this tariff applies to shipments
of any shipper contracting for transportation of a minimum guaranteed volume of
[******] barrels per month.

  (2) Should Shipper fail to ship the minimum guaranteed volume during any month
then Shipper shall have the obligation to ship the deficient volumes (minimum
guaranteed volumes less actual volumes shipped) during the immediate following
month plus the minimum guaranteed volume.

Exception to Item 40, F.E.R.C No. 3, Measurement, Testing, Volume Corrections
and Deductions

[******]

Page 2

 

-42-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

EXHIBIT C

[******] Option

[******]

 

-43-

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

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

EXHIBIT D

Quotes for Crude Oil Grades

At the end of each Contract Year, Sunoco shall pay to Motiva, for each Barrel of
Crude Oil unaccounted for or lost, for which Sunoco is liable under the
provisions of Section 6, an amount equal to the price settlement for the period
in which the loss was accrued.

The value for determining the price settlement shall be based upon the average
posting for the month of settlement on a delivered basis, based on the
applicable published quote for each Crude Oil grade.

The following example is for illustration purposes only:

Example: Price Settlement for Arabian Crude Oil will be the delivered price for
the specified Crude Oil grade basis the Platts WTI (prompt month average) for
the delivery month.

= Platts WTI (prompt month average) + Saudi OSP ex-ship U.S. Gulf Coast (for
delivery month and for applicable Crude Oil grade) + Delivery Costs

 

  1. Platts WTI monthly average is calculated using the WTI @ Cushing prices
published in Platts Oilgram Price Report.

 

  2. Saudi OSP for ex-ship deliveries to the U.S. Gulf Coast as published in a
mutually agreeable publication such as Petroleum Intelligence Weekly, Platt’s
Oilgram Price Report or ARGUS.

 

  3. Delivery cost will be determined based upon Motiva’s estimated lightering
cost per barrel and will be trued up when actual invoices are available. Motiva
will supply the supporting invoice.

 

-44-