Document:

Exhibit103

Execution Copy

LOCAL PROGRAMMING AND MARKETING AGREEMENT

THIS LOCAL PROGRAMMING AND MARKETING AGREEMENT (this “Agreement”) is made as of February 11, 2014, between YMF Media New York LLC, a Delaware limited liability company, and YMF Media New York Licensee LLC, a Delaware limited liability company (collectively, “Licensee”), and Emmis Radio LLC, an Indiana limited liability company (“Programmer”).

Recitals

A.Licensee owns and operates the following radio stations (the “Stations”) pursuant to licenses issued by the Federal Communications Commission (“FCC”):

WBLS(FM), New York, New York
WLIB(AM), New York, New York

B.Licensee desires to obtain programming for the Stations, and Programmer desires to provide programming for broadcast on the Stations on the terms set forth in this Agreement.

C.Licensee (as seller) and Programmer (along with Emmis Radio License, LLC, as buyer) are parties to an Asset Purchase Agreement (the “Purchase Agreement”) of even date herewith with respect to the Stations.  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Purchase Agreement.

Agreement

NOW, THEREFORE, taking the foregoing recitals into account, and in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

1.Term. The term of this Agreement (the “Term”) will begin on the later of:  (a) March 1, 2014, and (b) the date three (3) business days after HSR Clearance (the “Commencement Date”), provided, however, that, in the event that HSR Clearance is received less than three (3) business days prior to March 1, 2014, then the Commencement Date shall be March 1, 2014, and will continue until the Second Closing Date, unless earlier terminated in accordance with the terms of this Agreement (or extended by mutual written agreement).

2.Programming. During the Term, Licensee shall make available to Programmer all of the airtime on the Stations (including all of the primary and secondary program streams and ancillary uses) for programming provided by Programmer (the “Programs”) for broadcast twenty-four (24) hours per day, seven (7) days per week, excluding, at Licensee’s option, the period from 6:00 a.m. to 8:00 a.m. each Sunday morning (the “Broadcasting Period”). During the Term, Programmer will transmit the Programs to the Stations’ transmitting facilities and Licensee shall broadcast the Programs on the Stations, subject to the provisions of Section 5 below.

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3.Advertising. During the Term, Programmer will be exclusively responsible for the sale of advertising on the Stations and for the collection of accounts receivable arising therefrom, and Programmer shall be entitled to all revenue of the Stations (including, without limitation, from the Stations’ websites, tower income and ancillary revenue). During the Term, Licensee shall not sell any advertising on the Stations, except as provided by Section 6(b) below.

4.Payments. For the broadcast of the Programs and the other benefits made available to Programmer pursuant to this Agreement, during the Term, Programmer will pay Licensee as set forth on Schedule A attached hereto. To the extent reasonably necessary to perform this Agreement, during the Term, Licensee shall provide Programmer with the benefits of any of the Stations’ programming contracts and lease agreements, and Programmer shall perform the obligations of Licensee thereunder, to the extent of the benefits received.

5.Control.

(a)Notwithstanding anything to the contrary in this Agreement, Licensee shall retain ultimate control over the operation of the Stations and over all persons working at the Stations during the Term. Licensee shall bear responsibility for the Stations’ compliance with the rules, regulations and policies of the FCC and all other applicable laws. Without limiting the generality of the foregoing, Licensee will: (i) employ a manager for the Stations, who will report to Licensee and will direct the day-to-day operations of the Stations, and who shall have no employment, consulting, or other relationship with Programmer, (ii) employ a second employee for the Stations, who will report and be solely accountable to the manager (the “Licensee Employees”), and (iii) retain control over the policies, programming and operations of the Stations.

(b)Nothing contained herein shall prevent Licensee from (i) rejecting or refusing programs which Licensee believes to be contrary to the public interest, or (ii) substituting programs which Licensee believes to be of greater local or national importance or which are designed to address the problems, needs and interests of the local communities. Licensee reserves the right to (x) refuse to broadcast any Program containing matter which violates any right of any third party, which constitutes a personal attack, or which does not meet the requirements of the rules, regulations, and policies of the FCC, (y) preempt any Program in the event of a local, state, or national emergency, or (z) delete any commercial announcements that do not comply with the requirements of the FCC’s sponsorship identification policy. If in any month Licensee preempts any Programs, Licensee shall refund to Programmer such portion of the monthly payment made to Licensee pursuant to Section 5 hereof as the total time preempted bears to the total amount of time in the Broadcasting Period for such month.

(c)Programmer shall cooperate with Licensee to ensure that EAS transmissions are properly performed in accordance with Licensee’s instructions. Each party shall deliver to the other a copy of any letters of complaint it receives with respect to the Stations and Licensee shall include such letters in the Stations’ public inspection files as appropriate.

6.Programs.

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(a)    Licensee acknowledges that it is familiar with the type of programming Programmer currently produces or licenses and has determined that the broadcast of such programming on the Stations would serve the public interest. Notwithstanding the foregoing, Programmer agrees not to change the format of the Stations without the prior written consent of Licensee. Programmer shall ensure that the contents of the Programs conform to all FCC rules, regulations and policies in all material respects. Programmer shall consult with Licensee in the selection of the Programs to ensure that the Programs’ content contains matters responsive to issues of public concern in the local communities, as those issues are made known to Programmer by Licensee. Licensee acknowledges that its right to broadcast the Programs is non-exclusive and that ownership of or license rights in the Programs shall be and remain vested in Programmer.

(b)    Licensee shall oversee and take ultimate responsibility with respect to the provision of equal opportunities, lowest unit charge, and reasonable access to political candidates, and compliance with the political broadcast rules of the FCC. During the Term,
Programmer shall cooperate with Licensee as Licensee complies with its political broadcast responsibilities, and shall supply such information promptly to Licensee as may be necessary to comply with the political broadcasting provisions of the FCC’s rules, the Communications Act of
1934, as amended, and federal election laws. Programmer shall release advertising availabilities to Licensee during the Broadcasting Period as necessary to permit Licensee to comply with the political broadcast rules of the FCC; provided, however, that revenue received by Licensee as a result of any such release of advertising time shall promptly be remitted to Programmer.

(c)    During the Term, Licensee and Programmer will maintain music licenses with respect to the Stations and the Programs, as appropriate.

7.Expenses. Licensee will pay for the Stations’ employees contemplated by Section 5(a), maintenance of all studio and transmitter equipment and all other operating costs required to be paid to maintain the Stations’ broadcast operations in accordance with FCC rules and policies and applicable law, and all utilities supplied to its main studio and transmitter sites (subject to reimbursement by Programmer as provided on Schedule A). The Licensee Employees will be responsible for the broadcast transmission of the Programs (once received at its transmitter site) and Licensee will be responsible for the salaries, taxes, insurance and related costs for the Licensee Employees (subject to reimbursement by Programmer as provided on Schedule A).

8.Employees. Subject to the provisions of the Purchase Agreement, Programmer may employ all personnel of Licensee, other than Licensee Employees.

9.Call Signs. During the Term, Licensee will retain all rights to the call letters of the Stations or any other call letters which may be assigned by the FCC for use by the Stations, and will ensure that proper station identification announcements are made with such call letters in accordance with FCC rules and regulations. Programmer shall include in the Programs an announcement at the beginning of each hour of such Programs to identify such call letters, as well as any other announcements required by the rules and regulations of the FCC. Programmer 

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is authorized to use such call letters in its Programs and in any promotional material in any media used in connection with the Programs.

10.Maintenance. During the Term, Licensee shall maintain the operating power of the Stations at the maximum level authorized by the FCC for the Stations and shall repair and maintain the Stations’ towers and transmitter sites and equipment in normal operating condition, ordinary wear and tear excepted.

11.Facilities. During the Term, Licensee shall provide Programmer access to and use of Licensee’s studio and office facilities located in the Stations’ market for purposes of performing this Agreement. When on Licensee’s premises, Programmer shall not act contrary to the terms of any lease for such premises or interfere with the business and operation of Licensee’s use of such premises.

12.Representations. Programmer and Licensee each represent and warrant to the other that (a) it has the power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, (b) it is in good standing in the jurisdiction of its organization and is qualified to do business in all jurisdictions where the nature of its business requires such qualification, (c) it has duly authorized this Agreement, and this Agreement is binding upon it, and (d) the execution, delivery, and performance by it of this Agreement does not conflict with, result in a breach of, or constitute a default or ground for termination under any material agreement to which it is a party or by which it is bound.

13.Purchase Agreement.  This Agreement shall terminate automatically upon the Second Closing under the Purchase Agreement.  This Agreement may be terminated by either party prior to the First Closing by written notice to the other in the event of any expiration or termination of the Purchase Agreement (an “Early Termination”).  If there is an Early Termination, Programmer shall reconvey to Licensee the Purchased Assets which Programmer assumed prior to the First Closing under the Purchase Agreement (the “Pre-Closing Purchased Assets”), and Licensee shall assume the Pre-Closing Purchased Assets and reemploy those Station employees hired by Programmer in connection with the commencement of the Term.  In connection therewith, Programmer and Licensee shall each execute such documents (including execution by Programmer of instruments of conveyance of the Pre-Closing Purchased Assets and execution by Licensee of instruments of assumption of the Pre-Closing Purchased Assets) as necessary or appropriate to give effect to such assignment and assumption.

14.Events of Default.

(a)    The occurrence of any of the following will be deemed an Event of Default by Programmer under this Agreement: (i) Programmer fails to observe or perform any obligation contained in this Agreement in any material respect; or (ii) Programmer breaches any representation or warranty made by it under this Agreement in any material respect.

(b)    The occurrence of the following will be deemed an Event of Default by Licensee under this Agreement: (i) Licensee fails to observe or perform any obligation contained in this 

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Agreement in any material respect; or (ii) Licensee breaches any representation or warranty made by it under this Agreement in any material respect.

(c)    Notwithstanding the foregoing, an Event of Default will not be deemed to have occurred until fifteen (15) calendar days after the non-defaulting party has provided the defaulting party with written notice specifying the Event of Default and such Event of Default remains uncured. Upon the occurrence of an Event of Default, and in the absence of a timely cure pursuant to this Section 14, the non-defaulting party may terminate this Agreement, effective immediately upon written notice to the defaulting party.

15.Indemnification. Programmer shall indemnify and hold Licensee harmless against any and all liability arising from the broadcast of the Programs on the Stations, including, without limitation, all liability for indecency, libel, slander, illegal competition or trade practice, infringement of trademarks, trade names, or program titles, violation of rights of privacy, and infringement of copyrights and proprietary rights or any other violation of third party rights or FCC rules or other applicable law. Programmer further agrees to indemnify Licensee against any petitions to deny, petitions for revocation, petitions for orders to show cause, or other challenges based upon Programmer’s Programs brought by parties unrelated to and unaffiliated with Licensee to the extent that such challenges rely upon Programmer’s programming, and agrees to indemnify Licensee for any damage to the Stations’ assets caused by Programmer. Licensee shall indemnify and hold Programmer harmless against any and all liability arising from the broadcast of Licensee’s programming on the Stations, including, without limitation, all liability for indecency, libel, slander, illegal competition or trade practice, infringement of trademarks, trade names, or program titles, violation of rights of privacy, and infringement of copyrights and proprietary rights or any other violation of third party rights or FCC rules or other applicable law. The obligations under this Section 15 shall survive any termination of this Agreement.

16.Assignment. Neither party may assign this Agreement without the prior written consent of the other party hereto, not to be unreasonably withheld; provided, however, that the parties acknowledge and agree that this Agreement shall, without the need for further consent of the parties, be assigned by Licensee to WBLS, LLC and WBLS Licensee, LLC pursuant to the Purchase Agreement upon the First Closing.  The terms of this Agreement shall bind and inure to the benefit of the parties’ respective successors and any permitted assigns, and no assignment shall relieve any party of any obligation or liability under this Agreement. Nothing in this Agreement expressed or implied is intended or shall be construed to give any rights to any person or entity other than the parties hereto and their successors and permitted assigns.

17.Severability. If any court or governmental authority holds any provision in this Agreement invalid, illegal, or unenforceable under any applicable law, then so long as no party is deprived of the benefits of this Agreement in any material respect, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted and the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby. The obligations of the parties under this Agreement are subject to the rules, regulations and policies of the FCC and all other applicable laws. The parties agree that Licensee may file a copy of this Agreement with the FCC, and that Licensee shall place a copy of this Agreement in the Stations’ public inspection files.

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18.Notices. Any notice pursuant to this Agreement shall be in writing and shall be deemed delivered on the date of personal delivery or electronic delivery or confirmed facsimile transmission or confirmed delivery by a nationally recognized overnight courier service, or on the third (3rd) day after prepaid mailing by certified U.S. mail, return receipt requested, and shall be addressed as follows (or to such other address as any party may request by written notice): 

if to Licensee, then to:             YMF Media New York LLC 
395 Hudson Street, 7th Floor
New York, NY 10014 
    Attention:  Bill Cooper
Email:  bcooper@ymfmediallc.com

with a copy (which shall not             Greenberg Traurig LLP
constitute notice) to:         Terminus 200
3333 Piedmont Road NE, Suite 2500
Atlanta, GA  30305
Attention:  James S. Altenbach
Email:  altenbachj@gtlaw.com

if to Programmer, then to:            Emmis Radio LLC
One EMMIS Plaza
40 Monument Circle, Suite 700
Indianapolis,  IN  46204
Attention:  J. Scott Enright
Email:  legal@emmis.com

with a copy (which shall not             Edinger Associates PLLC
constitute notice) to:                 1875 I Street, NW, Suite 500
Washington, DC  20006
Attention:  Brook A. Edinger
Email:  bedinger@edingerlaw.net

19.Miscellaneous. This Agreement may be executed in separate counterparts, each of which will be deemed an original and all of which together will constitute one and the same agreement. No amendment or waiver of compliance with any provision hereof or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of such amendment, waiver, or consent is sought. This Agreement is not intended to be, and shall not be construed as, an agreement to form a partnership, agency relationship, or joint venture between the parties. Neither party shall be authorized to act as an agent of or otherwise to represent the other party. The construction and performance of this Agreement shall be governed by the laws of the State of New York without giving effect to the choice of law provisions thereof. This Agreement (including the Schedule hereto) constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings with respect to the subject matter hereof.

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20.Certifications. Licensee certifies that it maintains ultimate control over the
Stations’ facilities including, specifically, control over the Stations’ finances, personnel and programming. Programmer certifies that this Agreement complies with the provisions of 47 C.F.R. Sections 73.3555(a) and (c).

21.WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

[SIGNATURE PAGE FOLLOWS]

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SIGNATURE PAGE TO LOCAL PROGRAMMING AND MARKETING AGREEMENT

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first set forth above.

                    	
		
	LICENSEE:

	 
	 

	YMF MEDIA NEW YORK LLC

	

	

	By:
	/s/ L. Deon Levingston

	Name:
	L. Deon Levingston

	Title:
	President and GM

                    
                    	
		
	YMF MEDIA NEW YORK LICENSEE LLC

	 
	 

	By:
	/s/ L. Deon Levingston

	Name:
	L. Deon Levingston

	Title:
	President and GM

                    	
		
	PROGRAMMER:

	 
	 

	EMMIS RADIO LLC

	 
	 

	By:
	/s/ J. Scott Enright

	Name:
	J. Scott Enright

	Title:
	Executive Vice President, General Counsel and Secretary

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Schedule A

For the broadcast of the Programs, during the Term, Programmer will pay to Licensee monthly in arrears:  (a) until the First Closing Date, the sum of One Million Two Hundred Seventy-Five Thousand Dollars ($1,275,000), and (b) thereafter, the sum of Seven Hundred Thirty-Nine Thousand Five Hundred Dollars ($739,500), each prorated for any partial month, with the first payment due on the 75th day after the Commencement Date or the next business day if such day is not a business day, and succeeding monthly payments due on the same calendar day each month thereafter, provided, however, that all LMA payments due to Licensee under this paragraph which would otherwise be due and payable after the Second Closing Date shall be accelerated and paid at the Second Closing, and to the extent applicable, netted against all payments owing by Guarantor to Programmer or any affiliate of Programmer in respect of the WRKS Earnout, which shall also be accelerated to the Second Closing Date.

In addition, prior to the Commencement Date, Licensee shall submit to Programmer a proposed budget which shall set forth those monthly operating expenses for the Stations that are required to be paid by Licensee under FCC rules and policies, and which shall contain detailed line item categories of expenses, and which shall be subject to Programmer’s review and approval.  Any such budget that is approved by Programmer is referred to herein as the “Approved Budget.”  During the Term, Programmer will reimburse Licensee monthly in arrears, with the first payment due on the 75th day after the Commencement Date or the next business day if such day is not a business day, and succeeding monthly payments due on the same calendar day each month thereafter, for the reasonable operating expenses of the Stations incurred by Licensee in the ordinary course of business during the prior month for which Licensee has submitted to Programmer a written reimbursement request supported by appropriate documentation of expenses and which do not exceed the amounts set forth in the Approved Budget or the line item amounts set forth therein.2012-02-12 Exhibit 10.01 Tesoro Agreement

TRANS-FORELAND PIPELINE DEVELOPMENT AGREEMENT

This Trans-Foreland Pipeline Development Agreement (“Agreement”) is entered into as of February 6, 2014, with an effective date of January 1, 2014, by and between Tesoro Alaska Company, a Delaware corporation (“Tesoro”), Trans-Foreland Pipeline Company LLC, a Deleware limited liability company (“TFPC”) and Cook Inlet Energy, LLC, an Alaska limited liability company (“CIE”).  Tesoro and CIE are sometimes hereinafter collectively referred to as the “Parties” and each individually as a “Party.”

I.    RECITALS

1.    Tesoro and CIE each have an interest in developing, planning, constructing, and utilizing a crude oil transportation pipeline and related facilities (“Trans-Foreland Pipeline”) to connect the Kustatan Production Facility (“KPF”) located on the west side of Alaska’s Cook Inlet with the Kenai Pipe Line Company (“KPL”) tank farm located on the east side of Cook Inlet (“Trans‐Foreland Pipeline Project” or “Project”).  

2.    Tesoro and CIE have entered into certain letter agreements dated March 13, 2012, and January 2, 2013 (the “Existing Letter Agreements”), pursuant to which the Parties have agreed to fund and participate in certain initial activities regarding the Project, including initial permitting, cost estimating, design studies, constructability reviews, and miscellaneous engineering activities.  This Agreement constitutes a Definitive Agreement between the Parties as referenced in paragraph 6(iii) of the January 2, 2013 Existing Letter Agreement. 
3.    Tesoro has formed TFPC for the purpose of constructing the Project, and owning and operating the Trans-Foreland Pipeline, as more specifically provided below. 
4.    CIE is the owner of certain crude oil transportation-related assets located on the west side of Cook Inlet consisting of pipeline pigging facilities, two crude oil shipping pumps at KPF, approximately eight miles of 8” diameter onshore crude oil pipeline that connects KPF to the Trading Bay Production Facility (“Kustatan Pipeline”), and the related right-of-way (“ROW”) (collectively “CIE West-Side Assets”).  For clarity, the CIE West-Side Assets shall not include offshore pipelines extending to CIE’s production platforms, and the exact origination point for the pipeline included in the CIE West Side Assets will be determined by the engineering and design studies for the Project.  CIE currently estimates and represents the value of the CIE West-Side Assets to be approximately $7.2 million, based upon its determination of the original cost of those assets.  The Parties presently anticipate the utilization of the CIE West-Side Assets in conjunction with the Project to allow crude oil produced on the west side of Cook Inlet to reach the Trans-Foreland Pipeline, as presently planned.  

5.    The Parties anticipate that the Project, including the CIE West-Side Assets, will be dedicated to public service under the provisions of the Alaska Pipeline Act, AS 42.06, and thereby regulated by the Regulatory Commission of Alaska (“RCA”).

6.    Crude oil produced on the west side of Cook Inlet has been historically transported to the KPL tank farm through the combined use of Cook Inlet Pipeline Company (“CIPL”) transportation facilities and tanker vessels.  During a recent six month period, 1,686,602 bbls of 

crude oil were shipped via CIPL and tanker from the east to west sides of the Cook Inlet at a cost of approximately $6.22 per bbl (CIPL tariff of $3.21 per bbl, plus CISPRI charge of $0.3517 per bbl, plus 7 tanker loads at $640,000 each = $4,480,000 ÷ 1,686,602 bbls = $2.6562 per bbl marine vessel cost)(in the aggregate the “Alternative Shipping Cost”).  The Parties presently estimate that the Trans-Foreland Pipeline tariff will be less than the Alternative Shipping Cost.   

7.    The Parties further anticipate that either before or after the completion of the Project, Tesoro may, at its sole option, transfer its ownership interest in the Project and in TFPC to a subsidiary of Tesoro Logistics, LP (“TLLP”).

8.    The Parties are poised to proceed with the next phases of the Project and desire to enter into this Agreement for the purpose of governing their relationship with regard thereto. 

Based upon the foregoing Recitals, and good and valuable consideration the sufficiency of which is hereby acknowledged, the Parties agree as follows:

II.    TERMS AND CONDITIONS

1.    Trans-Foreland Pipeline Company.  TFPC, which is wholly owned by Tesoro, shall, subject to the provisions of paragraph II.2 below, fund, plan, construct, own, and operate the Project, at its sole cost and expense.  TFPC shall take such action as is necessary to obtain all required permits, rights-of-way, licenses and approvals, including those of governmental agencies or authorities, necessary for the planning, construction, ownership, and operation of the Project.  TFPC shall utilize services of CIE personnel, acting as contractors of TFPC, to assist in managing the Project and to otherwise assist in accomplishing tasks required of TFPC hereunder.  TFPC shall compensate CIE for such services at the rate of $20,000.00 per month (pro rated for any partial month), commencing January 1, 2014, and continuing monthly thereafter until the earlier of (a) the commissioning of the Project for operation, or (2) December 31, 2015.  CIE and its employees shall be independent contractors with respect to all such services performed, and those employees or other personnel shall not be employees of TFPC or Tesoro.

2.    CIE Option to Acquire Project.  In the event that Tesoro and TFPC do not have necessary board of director approval of Project completion and financing by December 31, 2015, or elect before such date, in their sole and absolute discretion, not to pursue the Project to completion, CIE shall have the right to purchase from Tesoro and TFPC: (a) all tangible property acquired by Tesoro and TFPC for the Project, including without limitation, pipe, valves and fittings, at Tesoro’s/TFPC’s cost for such property, and(b) Tesoro’s and TFPC’s intangible property, including without limitation, engineering, study data/results, plans, permits (to the extent transferable, but not including any privileged attorney client communications or attorney work product), at a price of $817,490 for such intangible property.  Tesoro and TFPC shall promptly notify CIE if they do not receive board approval or otherwise elect not to pursue the project to completion, and CIE shall have a period of up to ninety (90) days after such notice to exercise its rights to purchase such property.  Upon CIE’s request, Tesoro and TFPC shall provide CIE with an itemized accounting which evidences the cost of any tangible property acquired for the Project.  If Tesoro and TFPC elect not to pursue the Project, with the exception of the obligations under this paragraph 2 and paragraph 6 below, Tesoro, TFPC and CIE shall have no further obligations under this Agreement.  

3.    CIE West-Side Assets.  If TFPC and/or Tesoro elect to pursue completion of the Project on or before December 31, 2015, then the Parties shall enter into further agreements, on terms consistent with those outlined below.
(a)  TFPC and/or Tesoro shall purchase the CIE West-Side Assets from CIE prior to commissioning of the Project.  Such transaction shall be based upon a written purchase and sale agreement to be negotiated by and entered into between TFPC and/or Tesoro, and CIE and shall include such terms and conditions as are standard for such agreements.  The purchase price to be paid by TFPC and/or Tesoro for the CIE West-Side Assets shall be equal to the rate base amount approved by the RCA (whether through litigation or settlement) for such CIE West-Side Assets, but in no event shall be lower than $4 million or greater than $10 million.  TFPC and/or Tesoro shall make reasonable efforts to maximize the RCA approved rate base value attributable to the CIE West-Side Assets, within the parameters specified above.  To the extent that the parties find it desirable to conclude the purchase and sale of the CIE West-Side Assets prior to the above-referenced rate base approval by the RCA, the purchase price to be paid by TFPC and/or Tesoro at that time shall be $7.2 million, and such purchase price shall be subject to a post-closing true-up mechanism to rebalance the purchase price paid by TFPC and/or Tesoro to correspond to the amount of the approved rate base.  In accordance with such true-up mechanism, and subject to the minimum purchase price of $4 million and the maximum purchase price of $10 million, the difference between the purchase price paid by TFPC and/or Tesoro and the rate base for such CIE West-Side Assets as ultimately approved by the RCA in a final, non‐appealable order, shall be paid by one Party to the other, as the case may be.  
(b)  CIE and TFPC shall negotiate one or more ROW agreements, on reasonable terms and conditions, underwhich CIE will authorize TFPC to construct, operate and maintain a portion of the Trans-Foreland Pipeline along its presently planned route on properties owned in fee by CIE  The offshore portion of the Trans-Foreland Pipeline shall be on ROWs to be acquired by Tesoro or TFPC.  
(c)  TFPC and CIE shall negotiate and enter into a written agreement, including terms standard for such agreements, to be effective when the Trans-Foreland Pipeline becomes operational, pursuant to which CIE shall provide services to assist in the operation of the CIE West-Side Assets and any other TFPC assets located on the west side of Cook Inlet as designated by TFPC.  Such agreement shall include reasonable compensation to be paid by TFPC to CIE for such operational services and for reasonable actual expenses (i.e., power expense) incurred by CIE in the provision of such services.  

4.    Transporation Deduction/Utilization of Trans-Foreland Pipeline.  

(a)  Tesoro’s purchases of CIE crude oil under paragraph II.5 below shall deduct a mutually agreed upon transportation deduction.  The portion of such transportation deduction attributable to the Trans-Foreland Pipeline (including the CIE West-Side Assets) shall be based upon the first normalized 12 months of service, but shall not be greater than $5.91 per barrel for such initial 12 month period, which is ninety-five percent (95%) of the Alternative Shipping Cost.  Such portion of the transportation deduction for the second year of operation shall be no greater than the 

first year deduction, as adjusted by the Consumer Price Index applicable to Anchorage, Alaska during the last month of the initial 12 months of operation.  

(b)  Until such time as Tesoro shall have recovered its initial investment in the engineering and construction of the Trans-Foreland Pipeline in full, and provided that the Trans-Foreland Pipeline is available to transport crude oil and Tesoro and CIE have good faith negotiation obligations under paragraph II. 5 below, CIE shall not utilize CIPL facilities to transport crude oil which is bound for the east side of Cook Inlet.

(c)  So long as crude oil being produced by CIE on the west side of Cook Inlet is being shipped on the Trans-Foreland Pipeline, no less than sixty (60) days prior to TFPC’s filing of its initial or any revised intrastate rate(s) with the RCA, TFPC will provide CIE with all supporting data developed by TFPC, its affiliates and its or their respective consultants necessary to calculate such rate(s).  CIE, upon written request to TFPC, shall be permitted to verify the data used in calculating such rate(s) by a procedure agreed upon by the Parties, which shall include, if requested, an audit consisting of direct examination of original source data identified by TFPC as being all of the data relied upon in calculating the maximum rate.  The cost of any such examination or audit shall be borne by CIE.  CIE shall communicate to TFPC any question about, or disagreement with, the data used by TFPC or the manner in which such data was used to calculate the subject TFPC rate(s).  CIE and TFPC shall seek in good faith to resolve the questions or disagreements raised by CIE prior to the rate filing.

(d)  Insofar as any of the data or information provided by TFPC to CIE in conjunction with the disclosure required in paragraph II. 4(b) above is classified by TFPC as confidential within the meaning of 3 AAC 48.045-049, as amended from time to time, TFPC and CIE shall negotiate and enter into a confidentiality agreement, including terms standard for such agreements, under which the confidentiality of such data and information is maintained as confidential.

5.    Tesoro’s Purchase of CIE Crude.  If TFPC and/or Tesoro elect to pursue completion of the Project on or before December 31, 2015 then Tesoro and CIE shall negotiate in good faith a contract on market-based price terms for the purchase by Tesoro of all crude oil produced by CIE on the west side of Cook Inlet, up to the operating capacity of the Trans-Foreland Pipeline, for the shorter of (a) twenty years or (b) so long as Tesoro, any Tesoro affiliate, or TLLP or its subsidiaries own an interest in TFPC and the Nikiski, Alaska refinery.

6.    General Provisions.

(a)  Relationship.  Tesoro, TFPC, and CIE do not have by reason of this Agreement a partnership, fiduciary, co-venture, agency, or other similar relationship.

(b)  Costs, Expenses and Attorneys’ Fees.  Each Party will bear its own costs, expenses, and fees incurred in the negotiation and preparation of this Agreement, and in the consummation of the transaction contemplated hereby.  If either Party finds it necessary to take action to protect, preserve, or enforce its rights hereunder, the prevailing Party to such action shall be entitled to reimbursement from the non-prevailing Party of all costs, including actual expert witness fees and expenses, and actual attorneys’ fees expended or incurred by such prevailing Party in such action.

(c)  Amendment/Modification.  This Agreement may only be amended or modified in a writing signed by all Parties.

(d)  Interpretation/Parol Evidence.  This writing is intended by the Parties as a final expression of their agreement, and is intended as a complete and exclusive statement of the terms of their agreement, thereby superseding all oral negotiations and prior writings in respect to the subject matter hereof, including, without limitation, the Existing Letter Agreements referenced in the Recitals above.  For the avoidance of doubt, to the extent engineering or other costs or liabilities (other than payments or liabilities arising prior to the date of this Agreement) which were the subject of the Existing Letter Agreements remain unpaid, such matters shall still be subject to payment or satisfaction as specified in the Existing Letter Agreements.  Except as expressly provided herein, no course of prior dealings between the Parties and no usage of the trade shall be relevant to supplement or explain any term used in this Agreement.  Acceptance or acquiescence in a course of performance rendered under this Agreement shall not be relevant to determine the meaning of this Agreement, even though the accepting or acquiescing Party has knowledge of the nature of the performance and opportunity for objection.  The term “including” or “includes,” as used herein, shall mean “including, without limitation,” and “includes, without limitation.”

(e)  Severability of Provisions.  If any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or any remaining provisions of this Agreement, provided that such remaining portions or provisions can be construed in substance to constitute the agreement that the Parties intended to enter into in the first instance.

(f)  Alaska Law Applicable.  This Agreement and all documents executed in conjunction herewith shall be governed by and construed in accordance with the laws of the State of Alaska.

(g)  Submission to Jurisdiction.  Except as provided below, any legal action or proceeding with respect to this Agreement shall be brought in the courts of the State of Alaska for the Third Judicial District in Anchorage, or the courts of the United States of America for the District of Alaska, and in no other courts; and, by execution and delivery of this Agreement in Anchorage, Alaska, all Parties to this Agreement hereby accept for themselves and in respect of each of their properties, generally and unconditionally, the jurisdiction of the aforesaid courts.  The Parties hereby irrevocably and unconditionally waive any objection, including, without limitation, any objection to the laying of venue, or based on the grounds of forum non conveniens, which they or any of them may now or hereafter have to the bringing of any action or proceeding in such respective jurisdictions.  Notwithstanding anything herein to the contrary, the RCA has primary jurisdiction regarding any dispute arising from TFPC’s regulated terms and conditions of service, including tariff rates, and any legal action or proceedings with respect thereto shall be brought before the RCA.

(h)  Counterparts / Electronically Transmitted Signatures.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Facsimile or electronically transmitted signatures may be used, and, if used, shall bind the signatory in the same fashion as an original signature.  This Agreement shall be deemed fully executed by all Parties when signed by all Parties.

(i)  Advice of Legal Counsel; Construction of Agreement.  The Parties hereby acknowledge and warrant that, during negotiation of the transactions contemplated hereby, and in preparation of this Agreement, they have consulted with independent legal counsel of their own selection, respectively, and their decisions to enter into this Agreement are free and voluntary acts.  It is hereby agreed that this Agreement shall be construed impartially, notwithstanding any rule of law regarding the construction of a writing or any ambiguity in a writing against a drafting Party.

(j)  Effect of Headings.  The subject headings of the paragraphs and subparagraphs of this Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

(k)  Assignment.  No Assignment of this Agreement, or any right or obligation hereunder, shall be made without prior notice to and written consent of the other Party (which consent shall not be unreasonably withheld), except that any Party shall have the right to assign this Agreement to any affiliate without the prior written consent of the other Party.

(l)  Notices.  All notices and other communications given pursuant to this Agreement shall be in writing and shall be (a) mailed by first class, United States mail, postage prepaid, certified, return receipt requested, and addressed to the Parties hereto at the addresses listed below; (b) hand-delivered to the intended addressee; or (c) sent by nationally recognized, overnight courier.  All such notices shall also be sent by electronic transmission to the email addresses indicated below.  Notices sent by certified mail, postage prepaid, shall be effective three (3) business days after being deposited in the United States mail; all other notices shall be effective upon delivery to the addressee.  The Parties may change their addresses, including email addresses, by giving notice thereof to the other in conformity with this provision:

	
		
	If to Tesoro:
	Tesoro Alaska Company

	 
	19100 Ridgewood Parkway

	 
	San Antonio, TX 78259

	 
	Attn: Paul Cannizzo

	 
	Telephone: (210) 626-4259

	 
	Email: Paul.h.cannizzo@tsocorp.com

	 
	 

	With a copy to:
	Charles S. Parrish

	 
	EVP and General Counsel

	 
	19100 Ridgewood Parkway

	 
	e-mail adress: Charles.S.Parrish@tsocorp.com

	 
	 

	If to CIE:
	Cook Inlet Energy, LLC

	 
	601 West 5th Avenue, Suite 310

	 
	Anchorage, AK 99501

	 
	Attn: David Hall

	 
	Telephone: (907) 334-6745

	 
	Email: david.hall@cookinlet.net

	 
	 

	With a Copy to:
	Kurt C. yost

	 
	SVP and General counsel

	 
	9721 Cogdill Road, Suite 302

	 
	Knoxville, TN 37932

	 
	Telephone: (865) 2392-44337

	 
	Email: kyost@millerenergyresources.com

 

    

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth hereinabove.

	
		
	 
	TESORO ALASKA COMPANY

	 
	 

	 
	By: /s/ Gregory J. Goff

	 
	Gregory J. Goff

	 
	Chairman of the Board of Diretors and President

	 
	 

	 
	TRANS-FORELAND PIPELINE COMPANY LLC

	 
	 

	 
	By: /s/ Gregory J. Goff

	 
	Gregory J. Goff

	 
	Chairman of the Board of Manager

	 
	 

	 
	COOK INLET ENERGY, LLC

	 
	 

	 
	By: /s/ David M. Hall

	 
	David M. Hall

	 
	Chief Executive Officer

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