Document:

Exhibit 10.8

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

 

TERMINAL SERVICES AGREEMENT

 

by and between

 

PHILLIPS 66 CARRIER LLC

 

and

 

PHILLIPS 66 COMPANY

 

for

 

Hartford, Illinois, and Pasadena, Texas

 

 

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

	
TABLE OF CONTENTS
    	
 
    
	
 
    	
 
    	
 
    
	
Article I. 
    	
Defined Terms
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Defined Terms
    	
1
    
	
Section 1.02
    	
Other Defined Terms
    	
5
    
	
Section 1.03
    	
Terms Generally
    	
5
    
	
 
    	
 
    	
 
    
	
Article II. 
    	
Term and Termination
    	
6
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Term
    	
6
    
	
Section 2.02
    	
Termination Following a Force Majeure Event
    	
6
    
	
Section 2.03
    	
Special Termination by Company
    	
6
    
	
Section 2.04
    	
Inventory Settlement
    	
6
    
	
Section 2.05
    	
Removal of Commodities
    	
6
    
	
 
    	
 
    	
 
    
	
Article III. 
    	
Minimum Commitments
    	
7
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
Quarterly Truck Rack Commitment
    	
7
    
	
Section 3.02
    	
Minimum Ethanol Blending Commitment
    	
8
    
	
Section 3.03
    	
Minimum Biodiesel Blending Commitment
    	
9
    
	
Section 3.04
    	
Minimum Quarterly Pasadena Pumpover Commitment
    	
9
    
	
Section 3.05
    	
Partial Period Proration
    	
10
    
	
Section 3.06
    	
Special Reduction of Minimum Quarterly Transportation   Commitment
    	
10
    
	
 
    	
 
    	
 
    
	
Article IV. 
    	
Charges
    	
11
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Scheduled Charges
    	
11
    
	
Section 4.02
    	
Recovery of Certain Costs
    	
11
    
	
Section 4.03
    	
Adjustments
    	
11
    
	
 
    	
 
    	
 
    
	
Article V. 
    	
Storage of Commodities
    	
11
    
	
 
    	
 
    	
 
    
	
Section 5.01
    	
Commingled Storage
    	
11
    
	
 
    	
 
    	
 
    
	
Article VI. 
    	
Redelivery of Commodities
    	
12
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Redelivery of Commodities
    	
12
    
	
Section 6.02
    	
Negative Inventory
    	
12
    
	
 
    	
 
    	
 
    
	
Article VII.
    	
Commodity Quality
    	
12
    
	
 
    	
 
    	
 
    
	
Section 7.01
    	
Verification by Carrier
    	
12
    
	
Section 7.02
    	
Sampling by Company
    	
12
    
	
Section 7.03
    	
Non-Conforming Commodities
    	
12
    
	
 
    	
 
    	
 
    
	
Article VIII. 
    	
Other Services
    	
13
    
	
 
    	
 
    	
 
    
	
Section 8.01
    	
Additive Injection
    	
13
    
	
Section 8.02
    	
Stevedoring
    	
13
    
	
Section 8.03
    	
Jet Fuel Handling
    	
14
    
	
Section 8.04
    	
Laboratory Fees and Services
    	
14
    
	
Section 8.05
    	
Hartford Pumpover
    	
14
    
	
Section 8.06
    	
Additional Services
    	
15
    
							

 

i

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

	
Article IX. 
    	
Operating Hours; Terminal Access
    	
15
    
	
 
    	
 
    	
 
    
	
Section 9.01
    	
Operating Hours
    	
15
    
	
Section 9.02
    	
Terminal Access
    	
15
    
	
 
    	
 
    	
 
    
	
Article X. 
    	
Storage Variations
    	
15
    
	
 
    	
 
    	
 
    
	
Section 10.01
    	
Storage Variations
    	
15
    
	
Section 10.02
    	
Loss Settlement
    	
15
    
	
 
    	
 
    	
 
    
	
Article XI. 
    	
Monthly Statement; Payment; Liens
    	
16
    
	
 
    	
 
    	
 
    
	
Section 11.01
    	
Monthly Statement
    	
16
    
	
Section 11.02
    	
Payment
    	
17
    
	
Section 11.03
    	
Liens
    	
17
    
	
 
    	
 
    	
 
    
	
Article XII. 
    	
Title; Custody
    	
17
    
	
 
    	
 
    	
 
    
	
Section 12.01
    	
Title
    	
17
    
	
Section 12.02
    	
Custody
    	
17
    
	
 
    	
 
    	
 
    
	
Article XIII. 
    	
Volume Determinations
    	
18
    
	
 
    	
 
    	
 
    
	
Section 13.01
    	
Volume Determinations - General
    	
18
    
	
Section 13.02
    	
Terminal Receipts and Withdrawals
    	
18
    
	
 
    	
 
    	
 
    
	
Article XIV. 
    	
Insurance
    	
19
    
	
 
    	
 
    	
 
    
	
Section 14.01
    	
Insurance
    	
19
    
	
 
    	
 
    	
 
    
	
Article XV. 
    	
Taxes
    	
19
    
	
 
    	
 
    	
 
    
	
Section 15.01
    	
Taxes
    	
19
    
	
 
    	
 
    	
 
    
	
Article XVI.  
    	
Health,   Safety and Environment
    	
20
    
	
 
    	
 
    	
 
    
	
Section 16.01
    	
Spills; Environmental Pollution
    	
20
    
	
Section 16.02
    	
Inspection
    	
20
    
	
Section 16.03
    	
Marine Terminals Particulars Questionnaire
    	
20
    
	
Section 16.04
    	
Incident Notification
    	
21
    
	
Section 16.05
    	
Vessel Vetting
    	
21
    
	
 
    	
 
    	
 
    
	
Article XVII. 
    	
Force Majeure
    	
21
    
	
 
    	
 
    	
 
    
	
Section 17.01
    	
Suspension during Force Majeure Events
    	
21
    
	
Section 17.02
    	
Obligation to Remedy Force Majeure Events
    	
22
    
	
Section 17.03
    	
Strikes and Lockouts
    	
22
    
	
Section 17.04
    	
Action in Emergencies
    	
22
    
	
 
    	
 
    	
 
    
	
Article XVIII. 
    	
Notices
    	
22
    
	
 
    	
 
    	
 
    
	
Section 18.01
    	
Notices
    	
22
    
	
Section 18.02
    	
Effective upon Receipt
    	
22
    
	
 
    	
 
    	
 
    
	
Article XIX. 
    	
Applicable Law
    	
23
    
	
 
    	
 
    	
 
    
	
Section 19.01
    	
Applicable Law
    	
23
    
				

 

ii

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

	
Article XX. 
    	
Limitation of Liability
    	
23
    
	
 
    	
 
    	
 
    
	
Section 20.01
    	
No Liability for Consequential Damages
    	
23
    
	
Section 20.02
    	
Limitation of Liability
    	
23
    
	
 
    	
 
    	
 
    
	
Article XXI. 
    	
Default
    	
23
    
	
 
    	
 
    	
 
    
	
Section 21.01
    	
Default
    	
23
    
	
Section 21.02
    	
Non-Exclusive Remedies
    	
23
    
	
Section 21.03
    	
Right to Terminate
    	
24
    
	
 
    	
 
    	
 
    
	
Article XXII. 
    	
Public Use
    	
24
    
	
 
    	
 
    	
 
    
	
Section 22.01
    	
Public Use
    	
24
    
	
 
    	
 
    	
 
    
	
Article XXIII. 
    	
Confidentiality
    	
24
    
	
 
    	
 
    	
 
    
	
Section 23.01
    	
Confidentiality
    	
24
    
	
 
    	
 
    	
 
    
	
Article XXIV. 
    	
Miscellaneous
    	
24
    
	
 
    	
 
    	
 
    
	
Section 24.01
    	
Disputes between the Parties
    	
24
    
	
Section 24.02
    	
Assignment
    	
25
    
	
Section 24.03
    	
Partnership Change in Control
    	
25
    
	
Section 24.04
    	
No Third-Party Rights
    	
25
    
	
Section 24.05
    	
Compliance with Laws
    	
25
    
	
Section 24.06
    	
Severability
    	
25
    
	
Section 24.07
    	
Non-Waiver
    	
26
    
	
Section 24.08
    	
Entire Agreement
    	
26
    
	
Section 24.09
    	
Amendments
    	
26
    
	
Section 24.10
    	
Survival
    	
26
    
	
Section 24.11
    	
Counterparts; Multiple Originals
    	
26
    
	
Section 24.12
    	
Exhibits
    	
26
    
	
Section 24.13
    	
Table of Contents; Headings; Subheadings
    	
26
    
	
Section 24.14
    	
Construction
    	
26
    
	
Section 24.15
    	
Business Practices
    	
27
    
	
Section 24.16
    	
Right of First Refusal
    	
27
    
	
Section 24.17
    	
Right of First Offer
    	
27
    
	
Section 24.18
    	
Effect of Company Restructuring
    	
27
    
	
Section 24.19
    	
Effect of Discontinuation of Publication
    	
27
    
							

 

Exhibit A — Commodities

Exhibit B — Scheduled Charges

Exhibit C — Dispute Resolution Procedures

 

iii

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

TERMINAL SERVICES AGREEMENT

 

THIS TERMINAL SERVICES AGREEMENT is made and entered into as of the Effective Date by and between PHILLIPS 66 CARRIER LLC, a Delaware limited liability company (“Carrier”), and PHILLIPS 66 COMPANY, a Delaware corporation (“Company”).

 

Recitals

 

WHEREAS, Carrier owns a certain terminal facility located at 2105 South Delmar Avenue, Hartford, Illinois 62048 (the “Hartford Terminal”), which is suitable for receiving refined petroleum products, handling and storing such refined petroleum products, and delivering such refined petroleum products into pipelines, barges and transport trucks;

 

WHEREAS, Carrier owns a certain terminal facility located at 233 North Phillips Road, Pasadena, Texas 77506 (the “Pasadena Terminal”), which is suitable for receiving refined petroleum products, handling and storing such refined petroleum products, and delivering such refined petroleum products into pipelines and transport trucks; and

 

WHEREAS, Company intends to deliver refined petroleum products to the Hartford Terminal and the Pasadena Terminal and desires to have such refined petroleum products stored, handled and delivered into pipelines, barges or transport trucks, as applicable, and Carrier desires to provide such services for Company, all upon the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, Carrier and Company agree as follows:

 

Article I.                                              Defined Terms

 

Section 1.01                             Defined Terms.  The following definitions shall for all purposes apply to the capitalized terms used in this Agreement:

 

(a)                                 “Agreement” means this Terminal Services Agreement, together with all exhibits attached hereto, as the same may be extended, supplemented or restated from time to time in accordance with the provisions hereof.

 

(b)                                 “Argus” means Argus Media Ltd. or any of its subsidiaries.

 

(c)                                  “Barrel” means 42 Gallons.

 

(d)                                “Biodiesel Blending Deficiency Payment” has the meaning set forth in Section 3.03(b).

 

1

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

(e)                                  “Business Day” means any Day except for Saturday, Sunday or an official holiday in the State of Texas.

 

(f)                                   “Calendar Quarter” means a period of three consecutive Months beginning on the first Day of each of January, April, July and October.

 

(g)                                  “Carrier” has the meaning set forth in the introductory paragraph.

 

(h)                                 “Carrier Affiliated Parties” means Carrier, Phillips 66 Partners LP and their respective contractors and the directors, officers, employees and agents of each of them.

 

(i)                                     “Claims” means any and all judgments, claims, causes of action, demands, lawsuits, suits, proceedings, governmental investigations or audits, losses, assessments, fines, penalties, administrative orders, obligations, costs, expenses, liabilities and damages, including interest, penalties, reasonable attorneys’ fees, disbursements and costs of investigations, deficiencies, levies, duties and imposts.

 

(j)                                    “Commitment” means the Minimum Quarterly Truck Rack Commitment, Minimum Quarterly Biodiesel Commitment, Minimum Quarterly Ethanol Commitment and Minimum Quarterly Pasadena Pumpover Commitment, as applicable.

 

(k)                                 “Commodity” or “Commodities” means any of the commodities identified in Exhibit A.

 

(l)                                     “Company” has the meaning set forth in the introductory paragraph.

 

(m)                             “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.

 

(n)                                 “Day” means the period of time commencing at 0000 hours on one calendar day and running until, but not including, 0000 hours on the next calendar day, according to local time in Houston, Texas.

 

(o)                                 “Effective Date” means the date of the closing of the initial public offering of common units representing limited partner interests of Phillips 66 Partners LP.

 

(p)                                 “Ethanol Blending Deficiency Payment” has the meaning set forth in Section 3.02(b).

 

(q)                                 “Force Majeure” means: (i) acts of God, fires, floods or storms; (ii) compliance with orders of courts or Governmental Authorities; (iii) explosions, wars, terrorist acts or riots; (iv) inability to obtain or unavoidable delays in obtaining material or equipment; (v) accidental disruption of service; (vi) events or circumstances

 

2

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

similar to the foregoing (including inability to obtain or unavoidable delays in obtaining material or equipment and disruption of service provided by third parties) that prevent a Party’s ability to perform its obligations under this Agreement, to the extent that such events or circumstances are beyond the Party’s reasonable control and could not have been prevented by the Party’s due diligence; (vii) strikes, lockouts or other industrial disturbances; and (viii) breakdown of refinery facilities, machinery, storage tanks or pipelines irrespective of the cause thereof.

 

(r)                                    “Gallon” means a United States gallon of two hundred thirty-one cubic inches of liquid at 60o Fahrenheit, and at the equivalent vapor pressure of the liquid.

 

(s)                                   “Governmental Authority” means any government, any governmental administration, agency, instrumentality or other instrumentality or other political subdivision thereof or any court, commission or other governmental authority of competent jurisdiction.

 

(t)                                    “Hartford Dock” means that certain marine dock facility owned by Carrier and located at Mile 197.4 to 197.7 (left descending bank) of the Upper Mississippi River in Madison County, Illinois.

 

(u)                                 “Hartford Terminal” has the meaning set forth in the Recitals.

 

(v)                                 “IIC” means a mutually acceptable independent inspection company.

 

(w)                               “Initial Term” has the meaning set forth in Section 2.01.

 

(x)                                 “LAC” has the meaning set forth in Section 8.01.

 

(y)                                 “Law” means all constitutions, laws (including common law), treaties, statutes, orders, decrees, rules, injunctions, licenses, permits, approvals, agreements, regulations, codes, ordinances issued by any Governmental Authority, including judicial or administrative orders, consents, decrees, and judgments, published directives, guidelines, governmental authorizations, requirements or other governmental restrictions which have the force of law, and determinations by, or interpretations of any of the foregoing by any Governmental Authority having jurisdiction over the matter in question and binding on a given Person, whether in effect as of the date hereof or thereafter and, in each case, as amended.

 

(z)                                  “Loss Settlement” has the meaning set forth in Section 10.02.

 

(aa)                          “Minimum Quarterly Biodiesel Commitment” has the meaning set forth in Section 3.03(a).

 

(bb)                          “Minimum Quarterly Ethanol Commitment” has the meaning set forth in Section 3.02(a).

 

3

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

(cc)                            “Minimum Quarterly Pasadena Pumpover Commitment” has the meaning set forth in Section 3.04(a).

 

(dd)                          “Minimum Quarterly Truck Rack Commitment” has the meaning set forth in Section 3.01(a).

 

(ee)                            “Month” or “Monthly” means a calendar month commencing at 0000 hours on the first Day thereof and running until, but not including, 0000 hours on the first Day of the following calendar month, according to local time in Houston, Texas.

 

(ff)                              “Monthly Storage Variation Amount” has the meaning set forth in Section 10.02.

 

(gg)                            “Non-Conforming Commodity” means any Commodity that fails to meet specifications established by Carrier for pipeline transportation of that Commodity (or in the absence of Carrier specifications, specifications established by Phillips 66 Pipeline LLC for such Commodity).

 

(hh)                          “Normal Business Hours” means the period of time commencing at 0800 hours on one Day and running until 1700 hours on the same Day, according to local time in Houston, Texas.

 

(ii)                                  “Notice” means any notice, request, instruction, correspondence or other communication permitted or required to be given under this Agreement.

 

(jj)                                “Parties” means Carrier and Company, collectively.

 

(kk)                          “Partnership Change in Control” means Phillips 66 ceases to Control the general partner of Phillips 66 Partners LP.

 

(ll)                                  “Party” means Carrier or Company, individually.

 

(mm)                  “Pasadena Pumpover Deficiency Payment” has the meaning set forth in Section 3.04(b).

 

(nn)                          “Pasadena Terminal” has the meaning set forth in the Recitals.

 

(oo)                          “Person” means, without limitation, an individual, corporation (including a non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Authority, and shall include any successor (by merger or otherwise) of such entity.

 

(pp)                          “PPI-FG” has the meaning set forth in Section 4.03.

 

(qq)                          “Proportionate Share” has the meaning set forth in Section 10.01.

 

(rr)                                “Renewal Term” has the meaning set forth in Section 2.01.

 

4

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

(ss)                              “Regular Terminal Operating Hours” means 24 hours per Day, 7 Days per week.

 

(tt)                                “Scheduled Charges” means those fees payable by Company for the services provided by Carrier hereunder, as set forth in Exhibit B.

 

(uu)                          “Storage Gain” has the meaning set forth in Section 10.01.

 

(vv)                          “Storage Loss” has the meaning set forth in Section 10.01.

 

(ww)                      “Storage Variation” has the meaning set forth in Section 10.01.

 

(xx)                          “Sweeny Refinery” means the refinery owned and operated by Company at Old Ocean, Texas.

 

(yy)                          “Tanks” means the storage tanks and all appurtenant and associated pipelines and pumps used in connection with the storage and handling of Company’s Commodities at a Terminal.

 

(zz)                            “TARs” has the meaning set forth in Section 8.01.

 

(aaa)                   “Taxes” means any income, sales, use, excise, transfer, and similar taxes, fees and charges (including ad valorem taxes), including any interest or penalties attributable thereto, imposed by any Governmental Authority.

 

(bbb)                   “Terminal” or “Terminals” means the Hartford Terminal or the Pasadena Terminal, as applicable.

 

(ccc)                      “Truck Rack Deficiency Payment” has the meaning set forth in Section 3.01.

 

(ddd)                   “Wood River Refinery” means the refinery owned by WRB Refining LP and operated by Company at Roxana, Illinois.

 

Section 1.02                             Other Defined Terms.  Other terms may be defined elsewhere in this Agreement, and, unless otherwise indicated, shall have such meanings throughout this Agreement.

 

Section 1.03                             Terms Generally.  The definitions in this Agreement shall apply equally to both singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The word “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  All references to Articles, Sections and Exhibits shall be deemed to be references to Articles and Sections of, and Exhibits to, this Agreement unless the context requires otherwise.

 

5

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Article II.                                         Term and Termination

 

Section 2.01                             Term.  This Agreement shall have a primary term commencing on the Effective Date and ending June 30, 2018 (the “Initial Term”), and may be renewed by Company, at Company’s sole option, for up to three successive renewal terms, each with a duration of five years (each, a “Renewal Term”), upon at least 180 Days’ written Notice from Company to Carrier prior to the end of the Initial Term or any Renewal Term.  The Initial Term and Renewal Terms, if any, shall be referred to in this Agreement as the “Term.”

 

Section 2.02                             Termination Following a Force Majeure Event.  If a Force Majeure event prevents Carrier or Company from performing its respective obligations under this Agreement for a period of more than 12 consecutive Months, this Agreement may be terminated by either Party at any time after the expiration of such 12-Month period upon at least 30 Days’ Notice to the other Party.

 

Section 2.03                             Special Termination by Company.  If (a) Company determines to totally or partially suspend refinery operations at the Sweeny Refinery or (b) WRB Refining LP determines to suspend refinery operations at the Wood River Refinery, in either case, for a period of at least 12 consecutive Months, the Parties will negotiate in good faith to agree upon a reduction of the applicable Commitment(s) to reflect such suspension of operations.  If the Parties are unable to agree to an appropriate reduction of the applicable Commitments(s), then after Company or WRB Refining LP (as the case may be) has made a public announcement of such suspension, Company may provide written Notice to Carrier of its intent to terminate this Agreement and this Agreement will terminate 12 Months following the date such Notice is received by Carrier. In the event Company or WRB Refinery LP (as the case may be) publicly announces, prior to the expiration of such 12-month period, its intent to resume operations at the Sweeney Refinery or the Wood River Refinery, as applicable, then such Notice shall be deemed revoked and this Agreement shall continue in full force and effect as if such Notice had never been delivered.

 

Section 2.04                             Inventory Settlement.  Upon expiration or termination of this Agreement, any outstanding inventory imbalance on Company’s account must be eliminated within 60 Days of termination and will be settled, for each Commodity, at Argus’s Monthly average price for that Commodity for the Month prior to the effective date of such expiration or termination.

 

Section 2.05                             Removal of Commodities.

 

(a)                                 Company, at its own expense, shall remove all of its Commodities from both Terminals no later than the later of (i) the effective date of the termination or expiration of this Agreement, or (ii) ten Days after receipt of Notice to terminate this Agreement in accordance with its terms, provided that Carrier may, in its sole discretion, agree in writing to extend the time for such removal.  If, at the end of such period, Company has not removed all of its Commodities, then in addition to

 

6

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

any other rights it may have under this Agreement, Carrier shall have the right to take possession of such Commodities and sell them at public or private sale.  In the event of such a sale, Carrier shall withhold from the proceeds therefrom all amounts owed to it hereunder and all expenses of sale (including but not limited to reasonable attorneys’ fees and any amounts necessary to discharge any and all liens against the Commodities).  The balance of the proceeds, if any, shall be remitted to Company.

 

(b)                                 Should any Commodity remain in any Tank(s) beyond the expiration or termination of this Agreement, Company shall remain obligated to perform all of the terms and conditions set forth in this Agreement and, in addition, shall pay an additional Holdover Fee per Barrel per Month or partial Month, as applicable, determined in accordance with Exhibit B, until all Commodities are removed.

 

(c)                                  Company shall indemnify and hold the Carrier Affiliated Parties harmless from and against all Claims arising from or related to Company’s failure to remove any Commodities in accordance with this Section 2.05 or Carrier’s exercise of its right to take possession of Company’s Commodities and sell the same in accordance with this Section 2.05.

 

Article III.                                    Minimum Commitments

 

Section 3.01                             Quarterly Truck Rack Commitment.

 

(a)                                 During each Calendar Quarter, Company shall tender a combined average of at least 55,000 Barrels per Day of Commodities for delivery at the Hartford Terminal truck rack and the Pasadena Terminal truck rack, in approximately ratable quantities (such combined average, the “Minimum Quarterly Truck Rack Commitment”) at the “Base Throughput Fee” determined in accordance with Exhibit B, and Carrier shall accept, store and redeliver such Commodities in accordance with the terms of this Agreement.

 

(b)                                 If Company fails to meet its Minimum Quarterly Truck Rack Commitment during any Calendar Quarter, then Company will pay Carrier a deficiency payment (each, a “Truck Rack Deficiency Payment”) equal to the volume of the deficiency multiplied by the “Base Throughput Fee” determined in accordance with Exhibit B.

 

(c)                                  The dollar amount of any Truck Rack Deficiency Payment paid by Company may be applied as a credit against any amounts incurred by Company and owed to Carrier with respect to volumes of Commodities delivered through the Hartford Terminal truck rack and the Pasadena Terminal truck rack in excess of Company’s Minimum Quarterly Truck Rack Commitment (or, if this Agreement expires or is terminated, to volumes that would have been in excess of Company’s Minimum Quarterly Truck Rack Commitment if this Agreement were still in effect) during any of the four Calendar Quarters immediately following the

 

7

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Calendar Quarter for which such Truck Rack Deficiency Payment was made, at the end of which time any unused credits arising from such Truck Rack Deficiency Payment will expire.  This Section 3.01(c) shall survive the expiration or termination of this Agreement.

 

(d)                                 Carrier shall provide truck rack capacity in addition to Company’s Minimum Quarterly Truck Rack Commitment on an “as available” basis, at the “Base Throughput Fee” determined in accordance with Exhibit B.

 

Section 3.02                             Minimum Ethanol Blending Commitment.

 

(a)                                 During each Calendar Quarter, Company shall tender for blending with gasoline, and Carrier shall blend, a volume of ethanol equal to 10% of the total volume of Company’s blended gasoline delivered at the Pasadena Terminal truck rack during such Calendar Quarter, in approximately ratable quantities (such volume, the “Minimum Quarterly Ethanol Commitment”), and for each Barrel of ethanol blended into gasoline, Company shall pay the “Ethanol Blending” fee determined in accordance with Exhibit B.  Company shall provide any ethanol required for Carrier to discharge its obligations under this Section 3.02.

 

(b)                                 If Company fails to meet its Minimum Quarterly Ethanol Commitment during any Calendar Quarter, then Company will pay Carrier a deficiency payment (each, an “Ethanol Blending Deficiency Payment”) in an amount equal to the volume of the deficiency multiplied by the “Ethanol Blending” fee determined in accordance with Exhibit B.

 

(c)                                  The dollar amount of any Ethanol Blending Deficiency Payment paid by Company may be applied as a credit against any amounts incurred by Company and owed to Carrier with respect to volumes of ethanol blended in excess of Company’s Minimum Quarterly Ethanol Commitment (or, if this Agreement expires or is terminated, to volumes that would have been in excess of Company’s Minimum Quarterly Ethanol Commitment if this Agreement were still in effect) during any of the four Calendar Quarters immediately following the Calendar Quarter for which such Ethanol Blending Deficiency Payment was made, at the end of which time any unused credits arising from such Ethanol Blending Deficiency Payment will expire.  This Section 3.02(c) shall survive the expiration or termination of this Agreement.

 

(d)                                 Carrier shall provide ethanol blending services in addition to Company’s Minimum Quarterly Ethanol Commitment on an “as available” basis, at the “Ethanol Blending” fee determined in accordance with Exhibit B.

 

(e)                                  Carrier’s and Company’s obligations under this Section 3.02 shall terminate immediately upon any change of Law that results in Company no longer being required to blend renewable fuel into gasoline offered for sale in the United States.

 

8

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Section 3.03                             Minimum Biodiesel Blending Commitment.

 

(a)                                 During each Calendar Quarter, Company shall tender for blending with diesel fuel, and Carrier shall blend, a volume of biodiesel equal to 5% of the total volume of Company’s blended diesel fuel delivered at the Hartford Terminal truck rack and the Pasadena Terminal truck rack during such Calendar Quarter, in approximately ratable quantities (such volume, the “Minimum Quarterly Biodiesel Commitment”), and for each Barrel of biodiesel blended into diesel fuel, Company shall pay the “Biodiesel Blending” fee determined in accordance with Exhibit B.  Company shall provide any biodiesel required for Carrier to discharge its obligations under this Section 3.03.

 

(b)                                 If Company fails to meet its Minimum Biodiesel Commitment during any Calendar Quarter, then Company will pay Carrier a deficiency payment (each, a “Biodiesel Blending Deficiency Payment”)in an amount equal to the volume of the deficiency multiplied by the “Biodiesel Blending” fee determined in accordance with Exhibit B.

 

(c)                                  The dollar amount of any Biodiesel Blending Deficiency Payment paid by Company may be applied as a credit against any amounts incurred by Company and owed to Carrier with respect to volumes of biodiesel blended in excess of Company’s Minimum Quarterly Biodiesel Commitment (or, if this Agreement expires or is terminated, to volumes that would have been in excess of Company’s Minimum Quarterly Biodiesel Commitment if this Agreement were still in effect) during any of the four Calendar Quarters immediately following the Calendar Quarter for which such Biodiesel Deficiency Payment was made, at the end of which time any unused credits arising from such Biodiesel Deficiency Payment will expire.  This Section 3.03(c) shall survive the expiration or termination of this Agreement.

 

(d)                                 Carrier shall provide biodiesel blending capacity in addition to Company’s Minimum Quarterly Biodiesel Commitment on an “as available” basis, at the “Biodiesel Blending” fee determined in accordance with Exhibit B.

 

(e)                                  Carrier’s and Company’s obligations under this Section 3.03 shall terminate immediately upon any change of Law that results in Company no longer being required to blend renewable fuel into diesel fuel offered for sale in the United States.

 

Section 3.04                             Minimum Quarterly Pasadena Pumpover Commitment.

 

(a)                                 During each Calendar Quarter, Company shall tender at the Pasadena Terminal for onward transportation via pipeline at least a combined average of 135,000 Barrels per Day of Commodities, in approximately ratable quantities (such average, the “Minimum Quarterly Pasadena Pumpover Commitment”).

 

9

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Company shall pay Carrier for pumpover services at a rate equal to the “Pasadena Pumpover Fee” determined in accordance with Exhibit B.

 

(b)                                 If Company fails to meet its Minimum Quarterly Pasadena Pumpover Commitment during any Calendar Quarter, then Company will pay Carrier a deficiency payment (each, a “Pasadena Pumpover Deficiency Payment”) equal to the volume of the deficiency multiplied by the “Pasadena Pumpover Fee” determined in accordance with Exhibit B.

 

(c)                                  The dollar amount of any Pasadena Pumpover Deficiency Payment paid by Company may be applied as a credit against any amounts incurred by Company and owed to Carrier with respect to volumes of Commodities delivered through the Pasadena Terminal in excess of Company’s Minimum Quarterly Pasadena Pumpover Commitment (or, if this Agreement expires or is terminated, to volumes that would have been in excess of Company’s Minimum Quarterly Pasadena Pumpover Commitment if this Agreement were still in effect) during any of the four Calendar Quarters immediately following the Calendar Quarter for which such Pasadena Pumpover Deficiency Payment was made, at the end of which time any unused credits arising from such Pasadena Pumpover Deficiency Payment will expire.  This Section 3.04(c) shall survive the expiration or termination of this Agreement.

 

(d)                                 Carrier shall provide pumpover services in addition to Company’s Minimum Quarterly Pasadena Pumpover Commitment on an “as available” basis at the “Pasadena Pumpover Fee” determined in accordance with Exhibit B.

 

Section 3.05                             Partial Period Proration.

 

(a)                                 If the Effective Date is any Day other than the first Day of a Calendar Quarter, or if this Agreement is terminated on any Day other than the last Day of a Calendar Quarter, then any calculation determined with respect to a Calendar Quarter will be prorated by a fraction, the numerator of which is the number of Days in that part of the Calendar Quarter beginning on the Effective Date or ending on the date of such termination, as the case may be, and the denominator of which is the number of Days in the Calendar Quarter.

 

(a)                                 If the Effective Date is any Day other than the first Day of a Month, or if this Agreement is terminated on any Day other than the last Day of a Month, then any quantity based on a Monthly determination will be prorated by a fraction, the numerator of which is the number of Days in that part of the Month beginning on the Effective Date or ending on the date of such termination, as the case may be, and the denominator of which is the number of Days in the Month.

 

Section 3.06                             Special Reduction of Minimum Quarterly Transportation Commitment.  If Carrier’s use of all or part of a Terminal for the storage and handling of Commodities shall be restrained, enjoined, restricted or terminated by (a) any Governmental Authority,

 

10

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

(b) right of eminent domain or (c) the owner of leased land, Carrier, upon being notified of such restraint, enjoinder, restriction or termination, shall notify Company and the applicable Commitment(s) shall be reduced to the extent that Holdings’ use of the applicable Terminal is so restrained, enjoined, restricted or terminated.

 

Article IV.                                     Charges

 

Section 4.01                             Scheduled Charges.  As compensation to Carrier for the services provided by it hereunder, Company shall pay to Carrier the Scheduled Charges determined in accordance with Exhibit B.

 

Section 4.02                             Recovery of Certain Costs.

 

(a)                                 If Carrier agrees to make any expenditures at Company’s request, Company will reimburse Carrier for such expenditures or, at Carrier’s option and if the Parties agree, any applicable fees set forth on Exhibit B will be increased, or additional fees shall be added to Exhibit B, or an alternate mechanism shall be adopted to allow Carrier to recover such expenditures over time.

 

(b)                                 If new Laws require Carrier to make substantial and unanticipated expenditures in connection with the services Carrier provides to Company under this Agreement, Company will reimburse Carrier for Company’s proportionate share of the costs of complying with such Laws, or at Carrier’s option and if the Parties agree, relevant periodic or unit charges will be increased or an alternate mechanism shall be adopted to allow Carrier to recover the amount paid for such costs over time.

 

Section 4.03                             Adjustments.  As of January 1, 2014, and as of January 1 of each year thereafter while this Agreement is in effect, Carrier may adjust each of the fees set forth on Exhibit B annually by a percentage equal to the greater of zero and the positive change in the Producer Price Index for Finished Goods (Series ID WPUSOP3000) (such Index, the “PPI-FG”), as reported during the Month of October immediately before the effective date of the adjustment, with respect to the 12-Month period ending at the end of the Month of September immediately preceding such publication, provided that if, with respect to any such 12-Month period or periods, the PPI-FG has decreased, Carrier may subsequently increase such fees only to the extent that the percentage change in the PPI-FG since the most recent previous increase in such fees is greater than the aggregate amount of the cumulative decreases in the PPI-FG during the intervening period or periods.

 

Article V.                                          Storage of Commodities

 

Section 5.01                             Commingled Storage.  Carrier is not required to store Company’s Commodities in dedicated storage.  Each Commodity may be stored in commingled storage in a Tank at a Terminal with a Commodity belonging to another Person; provided, however, that any Commodity belonging to another Person and commingled with a Commodity belonging to Company shall meet or exceed specifications established

 

11

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

by Carrier for pipeline transportation of that Commodity (or in the absence of Carrier specifications, specifications established by Phillips 66 Pipeline LLC for such Commodity) in effect on the date of receipt of Company’s Commodity.  Carrier shall not commingle Company’s Commodity with any other Commodity that does not meet such minimum Commodity specifications.

 

Article VI.                                     Redelivery of Commodities

 

Section 6.01                             Redelivery of Commodities.  Company shall provide any documentation reasonably required by Carrier to authorize withdrawals by or on behalf of Company from a Terminal.  Upon redelivery of Commodities to Company or its designated carrier or customer, Carrier shall have no further responsibility for any Claims arising out of possession or use of such Commodities.

 

Section 6.02                             Negative Inventory.  Company shall not withdraw from either Terminal a greater volume of any Commodity than it has in inventory at that Terminal on the Day of withdrawal.

 

Article VII.                                Commodity Quality

 

Section 7.01                             Verification by Carrier.  At Carrier’s request from time to time, the quality of any Commodity tendered into commingled storage for Company’s account hereunder shall be verified by an IIC analysis indicating that such Commodity so tendered meets Carrier’s minimum Commodity specifications.  Company shall provide Carrier with a copy of each such analysis.  All costs for each such analysis shall be borne by Company.  Carrier shall have the right to sample any Commodity tendered to Carrier for Company’s account hereunder for the purpose of confirming the accuracy of the analysis.  The costs of such confirmation shall be borne by Carrier.

 

Section 7.02                             Sampling by Company.  Company may, at its sole cost and expense, sample its Commodities in storage at a Terminal to satisfy itself that the minimum Commodity specifications are maintained.  If any such Company sample indicates the presence of any Commodity that does not meet or exceed Carrier’s minimum specifications for such Commodity in effect on the date of such sample, Company shall immediately notify Carrier by telephone and Company shall confirm such notification in writing by telecopy Notice.  If Company does not so notify Carrier, Carrier’s Commodity sample analysis shall be deemed to be conclusive and binding upon both Parties.

 

Section 7.03                             Non-Conforming Commodities.

 

(a)                                 Company agrees not to deliver, or cause to be delivered, any Non-Conforming Commodity, into storage in Tanks.

 

(b)                                 Company shall be liable for all reasonable costs and losses in curing, removing, or recovering any Non-Conforming Commodities except to the extent that such non-conformity is due to the negligence or willful misconduct of Carrier.  Carrier, at

 

12

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

its sole discretion, may attempt to blend the Non-Conforming Commodities, remove and dispose of the Non-Conforming Commodities, or, if necessary, recover any Non-Conforming Commodities from field locations and, except to the extent that such non-conformity is due to the negligence or willful misconduct of Carrier, Company shall reimburse Carrier for all reasonable costs associated therewith.  Except to the extent that a non-conformity is due to the negligence or willful misconduct of Carrier, if Company’s Non-Conforming Commodities cause any contamination, dilution or other damages to the Commodities of other customers of Carrier, Company agrees to indemnify, defend and hold the Carrier Affiliated Parties harmless from and against any Claims incurred by, or charged against any of the Carrier Affiliated Parties, as a result of such event and shall be responsible for all costs and liabilities associated with or incurred as a result of such event.

 

Article VIII.                           Other Services

 

Section 8.01                             Additive Injection.  Company shall provide additives (including red dye for injection into Company’s untaxed distillate Commodities) and skid-based storage for additives that Company desires to be blended into its Commodities at the Terminals.  Carrier shall provide an additive injection system and shall blend additives into Company’s Commodities as instructed by Company, and for each Barrel of a Commodity into which one or more additives are blended, Company shall pay to Carrier the “Other Additive Blending” fee determined in accordance with Exhibit B.  Company shall provide Carrier with target additization rates (“TARs”) which must be at least as high as the lowest additive concentration (“LAC”) as registered with the United States Environmental Protection Agency.  Carrier may increase the TAR as it deems necessary to maintain the LAC.  Carrier shall calibrate, monitor and maintain the red dye system and ensure the dyed Commodities meet requirements for untaxed distillates under applicable Law.

 

Section 8.02                             Stevedoring.

 

(a)                                 Carrier shall perform stevedoring services for Company’s Commodities at the Hartford Dock, including loading and unloading barges designated by Company and calling at the Hartford Dock and receiving or delivering Commodities at the Hartford Dock, and Company shall pay the applicable “Hartford Dock Fee” for such services determined in accordance with Exhibit B.  If Company wishes Carrier to provide stevedoring services for a Commodity not identified on Exhibit B, the Parties shall agree upon the applicable fee before Carrier will be required to provide such services.

 

(b)                                 Customer shall inform Carrier of the estimated time of arrival of each barge from which Commodities are to be loaded or unloaded at the Hartford Dock as soon as practicable and, to the extent practicable, at each of 72, 48 and 24 hours before such barge’s arrival.  If so informed, Carrier will make commercially reasonable efforts to provide such barge with berthing space within 24 hours after the master,

 

13

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

agent or representative of such barge tenders “notice of readiness” to Carrier, stating that the barge is ready in all respects to berth at the Hartford Dock to discharge Commodities.  Absent such information, Carrier shall make commercially reasonable efforts to provide such barge with berthing space to the extent that doing so would not be reasonably likely to impede a barge that has provided such information.

 

(c)                                  Carrier does not guarantee any particular rate at which a Commodity will be offloaded from a barge.

 

(d)                                 Carrier shall not be liable for any demurrage charges for any barge except to the extent caused by Carrier’s negligence, willful misconduct or breach of this Agreement.

 

(e)                                  In no event shall Carrier be responsible for any port expenses (including, but not limited to, pilotage, towage and linemen).

 

Section 8.03                             Jet Fuel Handling.  Carrier shall provide jet fuel handling services at the Pasadena Terminal, and Company shall pay the Monthly “Pasadena Terminal Jet Fuel Handling Fee” determined in accordance with Exhibit B.

 

Section 8.04                             Laboratory Fees and Services.

 

(a)                                 If Carrier provides sampling and testing services requested by Company for Commodities at the Hartford Terminal or the Pasadena Terminal, Carrier shall charge for each sampling and testing procedure performed as set forth in Carrier’s “Schedule of Rates for Laboratory Services” then in effect.  If Carrier contracts with another Person to perform laboratory services, all fees for such services shall be billed to Company at Carrier’s cost.

 

(b)                                 Carrier’s liability for sampling and testing services is limited to the charge for the service provided.  Carrier shall in no event be liable for special or consequential damages no matter how any losses or damages shall have occurred, including but not limited to any losses or damages caused by Carrier’s negligence. There are no guarantees or warranties of any kind, express or implied, including but not limited to any warranties of merchantability or fitness for a particular purpose whether arising by operation of law or otherwise as a result of services provided.

 

Section 8.05                             Hartford Pumpover.  Carrier shall provide pumpover services from the Hartford Terminal to connecting pipelines.  Except for pumpover services to the Explorer Pipeline at Wood River, Illinois (which services are governed by one of Carrier’s tariffs), Company shall pay Carrier for pumpover services at a rate equal to the “Hartford Pumpover Fee” determined in accordance with Exhibit B.

 

14

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Section 8.06                             Additional Services.  For any service or function not specifically provided for in this Agreement, requested by Company and agreed to by Carrier, there may be a charge or fee in an amount as agreed upon by the Parties in writing.

 

Article IX.                                    Operating Hours; Terminal Access

 

Section 9.01                             Operating Hours.  Subject to mechanical breakdowns, Commodity quality issues or other operational issues, each Terminal and the Hartford Dock shall be operated by Carrier during Regular Terminal Operating Hours.

 

Section 9.02                             Terminal Access.  As a condition to being granted access to either Terminal or the Hartford Dock, Company shall require all contractors, carriers and customers designated by it to deliver, receive, sample or inspect Company’s Commodities at such Terminal or the Hartford Dock or to provide any other service for Company, to sign and comply with a terminal access agreement in such form as Carrier may reasonably specify from time to time.  Further, Company shall cause all such designated contractors, carriers and customers to comply with all applicable Terminal rules and regulations and Carrier shall make copies of such rules and regulations available to Company and its designated carriers and customers at both Terminals.

 

Article X.                                         Storage Variations

 

Section 10.01                      Storage Variations.  Each Month, Carrier shall determine the physical inventory of each Commodity in storage and calculate the losses (“Storage Losses”) or gains (“Storage Gains”) of a type normally incurred in connection with handling Commodities while in storage (Storage Losses and Storage Gains together, “Storage Variations”) for each Commodity and for each Terminal, provided that for purposes of this Agreement, Storage Gains do not include gains that result from vapor recovery or butane blending.  Monthly Storage Variations for each Commodity shall be prorated to all Persons using the storage for that Commodity based upon their respective percentages of Terminal receipts of that Commodity for that Month (such proration being such Person’s “Proportionate Share”).  Company’s inventory of each such individual Commodity in storage at a Terminal shall then be adjusted each Month (increased or decreased) to reflect its Proportionate Share of the Storage Variation.  For clarity, this Article X relates only to the losses or gains of a type normally incurred in connection with handling Commodities while in storage and is an exception to and not a modification of the general provisions of Section 20.02.

 

Section 10.02                      Loss Settlement.  Separately for each Commodity and for each Month, Carrier shall calculate an amount (the “Monthly Storage Variation Amount”) equal to:

 

(i)                                     the average of the midpoint postings published by Argus for the relevant Commodity at the nearest benchmark location on each publication day during the relevant Month, multiplied by

 

15

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

(ii)                                  either:

 

(A)       if there is a net Storage Loss of the relevant Commodity during that Month (taking into account Storage Losses and Storage Gains at both Terminals and offsetting any Storage Gain of the relevant Commodity at one Terminal against any Storage Loss at the other Terminal), then the product of multiplying (1) negative one by (2) the volume of that net Storage Loss that is in excess of (a) 0.5% for ethanol and biodiesel, or (b) 0.25% for any other Commodity, or

 

(B)       if there is a net Storage Gain of the relevant Commodity during that Month (taking into account Storage Losses and Storage Gains at both Terminals and offsetting any Storage Gain of the relevant Commodity at one Terminal against any Storage Loss at the other Terminal), then the volume of that net Storage Gain.

 

(b)                                 With respect to each Commodity, if the sum of all Monthly Storage Variation Amounts for that Commodity during a Calendar Year (or, with respect to 2013, during the partial Calendar Year during which this Agreement is in effect) is a negative number, then no later than the 22nd day of February of the following Calendar Year (or, if such Day is not a Business Day, on the next Business Day), Carrier shall pay to Company the absolute value of that number.  Such payment(s) shall be made by automated clearing house to an account specified by Company from time to time, provided that as long as Carrier is an affiliate of Company, Carrier and Company may settle Carrier’s financial obligations to Company through Company’s normal interaffiliate settlement processes.  Any bank charges incurred by Carrier in remitting funds by automated clearing house shall be for Carrier’s account.

 

Article XI.                                    Monthly Statement; Payment; Liens

 

Section 11.01                      Monthly Statement.

 

(a)                                 Promptly after the end of each Month, Carrier shall provide Company with a statement showing the previous Month’s beginning inventory, receipts, withdrawals, ending inventory, Storage Variation adjustment, number of Barrels of Commodities additized (if any), and the Scheduled Charges due to Carrier (after application of any credit to which Company may be entitled pursuant to Section 3.01(c), Section 3.02(c), Section 3.03(c) or Section 3.04(c).  If requested by Company, Carrier shall provide Company with copies of individual tank gauge reports, pipeline meter tickets, and truck loading rack meter tickets for receipts and withdrawals at each Terminal for such Month, if available.

 

(b)                                 The Monthly statement for the last Month in each Calendar Quarter shall include any deficiency payment that may be due under Section 3.01(b), Section 3.02(b), Section 3.03(b) or Section 3.04(b).

 

16

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Section 11.02                      Payment.

 

(a)                                 Payment of the amount(s) identified on each Monthly statement shall be due, without discount, on the later of (i) two Business Days after such Monthly Statement is received, and (ii) the 22nd Day of the Month in which such Monthly statement is received, provided that if such Day is not a Business Day, then such payment shall be due, without interest, on the next Business Day.  Payments not paid by the due date shall bear interest at the rate of the lesser of 1.5% per Month or the maximum rate allowed by Law for each Month or portion of a Month thereafter during which such amount remains unpaid.

 

(b)                                 All payments shall be made to Carrier by automated clearing house to an account specified by Carrier from time to time, provided that as long as Carrier is an affiliate of Company, Carrier and Company may settle Company’s financial obligations to Carrier through Company’s normal interaffiliate settlement processes.  Any bank charges incurred by Company in remitting funds by automated clearing house shall be for Company’s account.  Acceptance by Carrier of any payment from Company for any charge or service after termination or expiration of this Agreement shall not be deemed a renewal of this Agreement or a waiver by Carrier of any default by Company hereunder.

 

(c)                                  If Company reasonably disputes any Monthly statement, in whole or in part, Company shall promptly notify Carrier in writing of the dispute and shall pay the undisputed portion according to the terms of this Section 11.02, and shall promptly seek to resolve the dispute including, if necessary, by arbitration as provided in Section 24.01.  An arbitral panel may award reasonable interest on any unpaid amount determined to have been due to Carrier but withheld in good faith.

 

Section 11.03                      Liens.  Company hereby grants to Carrier an irrevocable (a) lien on all of Company’s Commodities in storage at both Terminals and (b) power of attorney to dispose of such Commodities at fair market value to the extent of all amounts owed to Carrier by Company hereunder.

 

Article XII.                               Title; Custody

 

Section 12.01                      Title.  Title to all of Company’s Commodities received, stored, handled and loaded out by Carrier at a Terminal and at the Hartford Dock shall remain at all times in Company’s name.

 

Section 12.02                      Custody.  Custody of all Commodities received by Carrier hereunder from a connecting third party pipeline shall pass from such pipeline to Carrier when such Commodities pass the flange connection between such delivering pipeline and the relevant Terminal.  Custody of all Commodities withdrawn and delivered to Company hereunder shall pass from Carrier to Company when such Commodities pass through the flange connection (a) between the delivery hose at the relevant Terminal’s truck loading

 

17

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

rack and a receiving transport truck, (b) between the delivery hose at the Hartford Dock and a receiving barge, or (c) between the relevant Terminal and a receiving pipeline, as the case may be.

 

Article XIII.                          Volume Determinations

 

Section 13.01                      Volume Determinations - General.

 

(a)                                 All measurements, volume corrections and calibrations will be made in accordance with the most recent edition of the American Petroleum Institute’s Manual of Petroleum Measurement Standards.

 

(b)                                 All volume determinations shall be adjusted to a temperature of 60° Fahrenheit and a pressure of one standard atmosphere (14.7 PSIA) per the most recent edition of the American Petroleum Institute’s Manual of Petroleum Measurement Standards, Chapter 11 (viz., Table 6B, 6C, etc., whichever table is relevant to the Commodity being measured).

 

Section 13.02                      Terminal Receipts and Withdrawals.

 

(a)                                 All Commodities (except ethanol and biodiesel) delivered to trucks at racks will be determined by calibrated custody transfer grade meters.  Carrier will provide bills of lading indicating the net volume delivered into each truck including language required by the appropriate Governmental Authority to Company.

 

(b)                                 All Commodities (except ethanol and biodiesel) received from or delivered to pipelines will be determined by calibrated custody transfer grade meters.

 

(c)                                  All Commodities (except ethanol and biodiesel) received from or delivered to barges will be determined by an IIC using the measurement methods below and will be the basis for preparing relevant shipping documents except in cases of fraud or manifest error.  In the absence of an IIC, Carrier’s measurements will be final and binding except in cases of fraud or manifest error.  The volumes received from or delivered to barges shall be determined by one of the following measurement methods in the following order of preference:

 

(i)                                     Custody transfer grade meter(s);

 

(ii)                                  Shore tank(s) measurements (static tank), as determined by the IIC;

 

(iii)                               In the event of an active (versus static) shore tank during any part of the transfer, or if the IIC determines shore quantities to be inaccurate or not representative of the cargo transferred, quantity shall be based on the volumes as determined from measurements of the vessel before and after the transfer with application of a vessel experience factor, if determined valid and applicable by the IIC; or

 

18

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

(iv)                              In the event the IIC determines that the above custody transfer measurement points are inaccurate or not representative of the volume(s) of cargo transferred, the Parties agree to negotiate in good faith to agree upon a new basis for custody transfer volumes.

 

(d)                                 All ethanol received from pipeline or trucks will be determined by calibrated custody transfer grade meters, if such meters are available.  If custody transfer grade meters are not available for offloading, the volume shown on truck bills of lading (measured in Gallons or Barrels) shall be deemed to be the volume delivered into a Terminal.  Alternate measurement methods may be acceptable subject to review and approval by Carrier and Company.

 

(e)                                  All biodiesel received from trucks into a Terminal will be determined by calibrated custody transfer grade meters, if such meters are available.  If calibrated custody transfer grade meters are not available for offloading, the volume shown on truck bills of lading (measured in Gallons or Barrels) shall be deemed to be the volume delivered into a Terminal.  Alternate measurement methods may be acceptable subject to review and approval by Carrier and Company.

 

(f)                                   A Company representative may witness testing, calibration of equipment, meter reading, and gauging of Commodities at either Terminal, at Company’s expense.  In the absence of a Company representative, Carrier’s measurements shall be deemed to be accurate.

 

Article XIV.                           Insurance

 

Section 14.01                      Insurance.  Insurance for Company’s Commodities, if any, that may be desired by Company, shall be carried by Company at Company’s expense.  Should Company elect to carry Commodity insurance, then each policy of insurance shall be endorsed to provide a waiver of subrogation rights in favor of the Carrier Affiliated Parties.  Carrier shall not be liable to Company for Commodity losses or shortages for which Company is compensated by its insurer.

 

Article XV.                                Taxes

 

Section 15.01                      Taxes.  Company shall be responsible for and shall pay all sales Taxes and similar Taxes on goods and services provided hereunder and any other Taxes now or hereafter imposed by any Governmental Authority in respect of or measured by Commodities handled or stored hereunder or the manufacture, storage, delivery, receipt, exchange or inspection thereof, and Company agrees to promptly reimburse Carrier for any such Taxes Carrier is legally required to pay, upon receipt of invoice therefor. Each Party is responsible for all Taxes in respect of its own real and personal property.

 

19

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Article XVI.                           Health, Safety and Environment

 

Section 16.01                      Spills; Environmental Pollution.

 

(a)                                 In the event of any Commodity spill or other environmentally polluting discharge caused by Carrier’s operation of a Terminal or the Hartford Dock, any clean-up associated with any such spill or discharge and any liability resulting from such spill or discharge, shall be the responsibility of Carrier, except to the extent such spill or discharge is caused by Company.

 

(b)                                 In the event and to the extent of any Commodity spill or other environmentally polluting discharge caused by Company or in connection with the operation of Company’s or a third party’s pipeline, barge, tank truck or transport trailer receiving Commodities on Company’s behalf, at its request or for its benefit, Carrier is authorized to commence containment or clean-up operations as deemed appropriate or necessary by Carrier or as required by any Governmental Authority, and Carrier shall notify Company of such operations as soon as practicable.  All liability and reasonable costs of containment or clean-up shall be borne by Company except that, in the event a spill or discharge is caused by the joint negligence of both Carrier and Company or a third party’s pipeline, barge, tank truck or transport trailer receiving Commodities on Company’s behalf, at its request or for its benefit, liability and costs of containment or clean-up shall be borne jointly by Carrier and Company in proportion to each Party’s respective negligence.

 

(c)                                  For purposes of this Section 16.01, the negligence of a third party pipeline, barge, tank truck or transport trailer receiving Commodities on Company’s behalf, at its request or for its benefit, shall be attributed to Company.

 

(d)                                 The Parties shall cooperate for the purpose of obtaining reimbursement if a third party is legally responsible for costs or expenses initially borne by Carrier or Company.

 

Section 16.02                      Inspection.  During Normal Business Hours, Company may: (a) inspect either Terminal and the Hartford Dock, including health, safety, and environmental audits by inspector(s) chosen by Company; (b) make physical checks of Commodities in storage at either Terminal, (c) audit Carrier’s health, safety, environmental, and operational records relating to the performance of this Agreement and otherwise observe such performance, and (d) subject to the provisions of Section 9.02, enter upon any Terminal or Hartford Dock property for any of the foregoing purposes.  For clarity, none of the rights identified in this Section 16.02 shall be exercised by Company in such manner as to substantially interfere with or diminish Carrier’s complete control and responsibility for the operation of the Terminals and the Hartford Dock.

 

Section 16.03                      Marine Terminals Particulars Questionnaire.  Carrier shall complete and submit relevant portions of the Marine Terminals Particulars Questionnaire promulgated

 

20

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

by the Oil Companies International Marine Forum as part of its Marine Terminal Information System, and available online at www.ocimf-mtis.org.

 

Section 16.04                      Incident Notification.  Both Parties undertake to notify the other as soon as reasonably practical, but in no event more than 24 hours, after becoming aware of any accident, spill or incident involving the other’s employees, agents, contractors, sub-contractors or their equipment, or Company’s Commodities at a Terminal or at the Hartford Dock and to provide reasonable assistance in investigating the circumstances of the accident, spill or incident.  Notices required by this Section 16.04 shall be delivered in person, by telephone or by email:

 

	
If   to Carrier (Hartford Terminal or Hartford Dock):
    	
If   to Carrier (Pasadena Terminal):
    	
If   to Company:
    
	
 
    	
 
    	
 
    
	
Phillips   66 Carrier LLC
    	
Phillips   66 Carrier LLC
    	
Phillips   66 Company
    
	
c/o   Phillips 66 Pipeline LLC
    	
c/o   Phillips 66 Pipeline LLC
    	
600   North Dairy Ashford Rd.
    
	
P.O. Box   1267
    	
3010   Briarpark Dr.
    	
Houston,   TX 77079
    
	
Bartlesville,   OK 74603
    	
Houston,   TX 77042
    	
Attn:   John E. Sweeney
    
	
Attn:   Bill D. Shepherd
    	
Attn:   Stephanie D. Webb
    	
Manager/Loss   Control
    
	
Division   Terminal Manager
    	
Division   Terminal Manager
    	
Telephone:   832-765-3017
    
	
Telephone:   918-977-4640
    	
Telephone:   832-765-1534
    	
Email:   john.e.sweeney@p66.com
    
	
Email:   bill.d.shepherd@p66.com
    	
Email:   stephanie.d.webb@p66.com
    	
 
    

 

an accident, spill or incident involving Company’s Commodities requires a report to be submitted to a Governmental Authority, this notification shall be made as soon as reasonably practical in compliance with applicable Law, and a copy of the required report shall be delivered to Company at IncidentFollowup@P66.com.  Either Party may change its contact information upon Notice to the other in accordance with this Section 16.04 and Section 18.01.

 

Section 16.05                      Vessel Vetting.  Company shall have procedures in place to ensure that all vessels accepted to call at the Hartford Dock meet minimum standards of safe operation as established by Carrier.  Carrier shall advise Company of specific requirements applicable to the Hartford Dock.

 

Article XVII.                      Force Majeure

 

Section 17.01                      Suspension during Force Majeure Events.  As soon as possible upon the occurrence of a Force Majeure, a Party affected by a Force Majeure event shall provide the other Party with written notice of the occurrence of such Force Majeure.  Each Party’s obligations (other than an obligation to pay any amounts due to the other Party) shall be temporarily suspended during the occurrence of, and for the entire duration of, a Force Majeure event to the extent that such an event prevents Carrier from performing its obligations under this Agreement.  Each Party’s obligations (other than an obligation to pay any amounts due to the other Party) shall be temporarily suspended beginning 20 Days after the commencement of, and for the entire remaining duration of, a Force Majeure event to the extent that such event prevents Company from performing its

 

21

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

obligations under this Agreement.  At the conclusion of the Force Majeure event, the Minimum Quarterly Truck Rack Commitment, Minimum Quarterly Ethanol Commitment, Minimum Quarterly Biodiesel Commitment or Minimum Quarterly Pasadena Pumpover Commitment with respect to each Calendar Quarter in which the Force Majeure event remained in effect shall be ratably reduced to reflect such suspension.

 

Section 17.02                      Obligation to Remedy Force Majeure Events.  A Party affected by a Force Majeure event shall take commercially reasonable steps to remedy such situation so that it may resume the full performance of its obligations under this Agreement within a reasonable period of time.

 

Section 17.03                      Strikes and Lockouts.  The settlement of strikes, lockouts and other labor disturbances shall be entirely within the discretion of the affected Party and the requirement to remedy a Force Majeure event within a reasonable period of time shall not require the settlement of strikes or lockouts by acceding to the demands of an opposing Person when such course is inadvisable in the discretion of the Party having the difficulty.

 

Section 17.04                      Action in Emergencies.  Carrier may temporarily suspend performance of the services to prevent injuries to persons, damage to property or harm to the environment.

 

Article XVIII.                 Notices

 

Section 18.01                      Notices.  Unless otherwise specifically provided in this Agreement, all Notices between the Parties given under or in relation to this Agreement shall be made in writing and shall be deemed to have been properly given if:  (i) personally delivered (with written confirmation of receipt); or (ii) delivered by a recognized overnight delivery service (delivery fees prepaid), in either case to the appropriate address set forth below:

 

	
If   to Carrier:
    	
If   to Company:
    
	
 
    	
 
    
	
Phillips   66 Carrier LLC
    	
Phillips   66 Company
    
	
c/o   Phillips 66 Pipeline LLC
    	
3010   Briarpark Dr.
    
	
3010   Briarpark Dr.
    	
Houston,   TX 77042
    
	
Houston,   TX 77042
    	
Attn:   General Counsel
    
	
Attn:   President
    	
 
    

 

Either Party may change its address for Notice upon Notice to the other in accordance with this Section 18.01.

 

Section 18.02                      Effective upon Receipt.  Any Notice given in the manner set forth in Section 18.01 shall be effective upon actual receipt if received during Normal Business Hours, or at the beginning of the recipient’s next Business Day if not received during Normal Business Hours.

 

22

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Article XIX.                          Applicable Law

 

Section 19.01                      Applicable Law.  Regardless of the place of contracting, place(s) of performance or otherwise, this Agreement and all amendments, modifications, alterations or supplements to it, shall be governed and interpreted in accordance with the laws of the state of Texas, without regard to the principles of conflicts of law or any other principle that might apply the law of another jurisdiction.

 

Article XX.                               Limitation of Liability

 

Section 20.01                      No Liability for Consequential Damages.  In no event shall either Party be liable to the other Party for, and no arbitral panel is authorized to award, any punitive, special, indirect or consequential damages of any kind or character resulting from or arising out of this Agreement, including, without limitation, loss of profits or business interruptions, however they may be caused.

 

Section 20.02                      Limitation of Liability.  Notwithstanding anything to the contrary in this Agreement, and except for Storage Variations, Carrier shall in no event be liable for loss of, or damage to, any Commodities of Company except to the extent caused by Carrier’s negligence, or the negligence of Carrier’s employees, agents, contractors or subcontractors, in the safekeeping and handling of any Commodity of Company.  In no event shall Carrier be liable for more than the replacement of lost or damaged Commodities or, at its option, payment of the replacement cost of any lost or damaged Commodities.  Each Party shall be discharged from any and all liability with respect to services performed and any loss or damage Claims arising out of this Agreement unless suit or action is commenced within two years after the applicable cause of action arises.

 

Article XXI.                          Default

 

Section 21.01                      Default.  Should either Party default in the prompt performance and observance of any of the terms and conditions of this Agreement, and should such default continue for 30 Days or more after Notice thereof by the non-defaulting Party to the defaulting Party, or should either Party become insolvent, commence a case for liquidation or reorganization under the United States Bankruptcy Code (or become the involuntary subject of a case for liquidation or reorganization under the United States Bankruptcy Code, if such case is not dismissed within 30 Days), be placed in the hands of a state or federal receiver or make an assignment for the benefit of its creditors, then the other Party shall have the right, at its option, to terminate this Agreement immediately upon Notice to the other Party.

 

Section 21.02                      Non-Exclusive Remedies.  Except as otherwise provided, the remedies of Carrier and Company provided in this Agreement shall not be exclusive, but shall be cumulative and shall be in addition to all other remedies in favor of Carrier or Company, at Law or equity.

 

23

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Section 21.03                      Right to Terminate.  In the event of a default by Company, the Scheduled Charges theretofore accrued shall, at the option of Carrier, become immediately due and payable and Carrier shall also have the right, at its option, to terminate this Agreement.  In the event of a default by Carrier, Company shall also have the right, at its option, to terminate this Agreement and withdraw its Commodities from both Terminals, provided Company has paid Carrier for any Scheduled Charges that have accrued to the date of such withdrawal.

 

Article XXII.                     Public Use

 

Section 22.01                      Public Use.  This Agreement is made as an accommodation to Company.  In no event shall Carrier’s services hereunder be deemed to be those of a public utility or a common carrier.  If any action is taken or threatened by any Governmental Authority to declare Carrier’s services hereunder to be those of a public utility or a common carrier, then, in that event, at the option of Carrier and upon Company’s receipt of Carrier’s Notice, Carrier may restructure and restate this Agreement or terminate this Agreement on the effective date of such action as to the affected Tank(s) or services.

 

Article XXIII.                Confidentiality

 

Section 23.01                      Confidentiality.  The Parties understand and agree that the Scheduled Charges are confidential as between the Parties.  Each Party agrees not to disclose such confidential information to any third Person.  Each Party may disclose confidential information to its advisors, consultants or representatives (provided that such Persons agree to maintain the confidentiality thereof) or when compelled to do so by Law (but the disclosing Party must notify the other Party promptly of any such request for confidential information before disclosing it, if practicable, so that the other Party may seek a protective order or other appropriate remedy or waive compliance with this Section 23.01).  In the event that the other Party does not obtain a protective order or other remedy or does not waive compliance with this Section 23.01, the disclosing Party shall disclose only that portion of the confidential information to which the compelling Person is legally entitled.

 

Article XXIV.                 Miscellaneous

 

Section 24.01                      Disputes between the Parties.  Any dispute between the Parties in connection with this Agreement shall be resolved by arbitration in accordance with the procedures set forth in Exhibit C, provided that either Party may seek a restraining order, temporary injunction, or other provisional relief in any court with jurisdiction over the subject matter of the dispute and sitting in Houston, Texas, if such Party in its sole judgment believes that such action is necessary to avoid irreparable injury or to preserve the status quo ante.

 

24

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Section 24.02                      Assignment.

 

(a)                                 Neither Party may assign its rights or delegate its duties under this Agreement without prior written consent of the other Party except:

 

(i)                                     if WRB Refining LP transfers the Wood River Refinery or if Company transfers the Sweeny Refinery, Company may assign this Agreement to the transferee of such asset subject to the provisions of Section 24.02(b); and

 

(ii)                                  Carrier may make collateral assignments of this Agreement to secure working capital financing;

 

provided, however, that in no event shall Company be required to consent to Carrier’s assignment of this Agreement to any Person that is engaged in the business of refining and marketing petroleum products (or that directly or indirectly Controls or is Controlled by a Person that is engaged in the business of refining and marketing petroleum products) in the states of Illinois, Louisiana, Missouri or Texas.

 

(b)                                 If Company assigns this Agreement relating to a single Terminal, then (i) Company’s Minimum Quarterly Truck Rack Commitment, Minimum Quarterly Ethanol Commitment, Minimum Quarterly Biodiesel Commitment and Minimum Pasadena Pumpover Commitment shall be allocated between the two Terminals consistent with Company’s historic use of such Terminals.

 

(c)                                  Upon an assignment or partial assignment of this Agreement by either Party, the assigned rights and obligations shall be novated into a new agreement with the assignee, and such assignee shall be responsible for the performance of the assigned obligations unless the non-assigning Party has reasonably determined that the assignee is not financially or operationally capable of performing such assigned obligations, in which case the assignor shall remain responsible for the performance of such assigned obligations.

 

Section 24.03                      Partnership Change in Control.  Company’s obligations hereunder shall not terminate in connection with a Partnership Change in Control.  Carrier shall provide Company with Notice of any Partnership Change in Control at least 60 Days prior to the effective date thereof.

 

Section 24.04                      No Third-Party Rights.  Except as expressly provided, nothing in this Agreement is intended to confer any rights, benefits or obligations to any Person other than the Parties and their respective successors and assigns.

 

Section 24.05                      Compliance with Laws.  Each Party shall at all times comply with all Laws as are applicable to its performance of this Agreement.

 

Section 24.06                      Severability.  If any provision of this Agreement or the application thereof shall be found by any arbitral panel or court of competent jurisdiction to be invalid,

 

25

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

illegal or unenforceable to any extent and for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the Parties.  In any event, the remainder of this Agreement and the application of such remainder shall not be affected thereby and shall be enforced to the greatest extent permitted by Law.

 

Section 24.07                      Non-Waiver.  The failure of either Party to enforce any provision, condition, covenant or requirement of this Agreement at any time shall not be construed to be a waiver of such provision, condition, covenant or requirement unless the other Parties are so notified by such Party in writing.  Any waiver by a Party of a default by any other Party in the performance of any provision, condition, covenant or requirement contained in this Agreement shall not be deemed to be a waiver of such provision, condition, covenant or requirement, nor shall any such waiver in any manner release such other Party from the performance of any other provision, condition, covenant or requirement.

 

Section 24.08                      Entire Agreement.  This Agreement, together with all exhibits attached hereto, constitutes the entire Agreement between the Parties relating to its subject matter and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, between the Parties relating to the subject matter hereof, and there are no warranties, representations or other agreements between the Parties in connection with the subject matter hereof except as specifically set forth in, or contemplated by, this Agreement.

 

Section 24.09                      Amendments.  This Agreement shall not be modified or amended, in whole or in part, except by a written amendment signed by both Parties.

 

Section 24.10                      Survival.  Any indemnification granted hereunder by one Party to the other Party shall survive the expiration or termination of all or any part of this Agreement.

 

Section 24.11                      Counterparts; Multiple Originals.  This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on each of the Parties.  Each of the Parties may sign any number of copies of this Agreement.  Each signed copy shall be deemed to be an original, but all of them together shall represent one and the same agreement.

 

Section 24.12                      Exhibits.  The exhibits identified in this Agreement are incorporated in this Agreement and constitute a part of this Agreement.  If there is any conflict between this Agreement and any exhibit, the provisions of the exhibit shall control.

 

Section 24.13                      Table of Contents; Headings; Subheadings.  The Table of Contents and the headings and subheadings of this Agreement have been inserted only for convenience to facilitate reference and are not intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

 

Section 24.14                      Construction.  The Parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or

 

26

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any of the provisions of this Agreement.

 

Section 24.15                      Business Practices.  Carrier shall use its best efforts to make certain that all billings, reports, and financial settlements rendered to or made with Company pursuant to this Agreement, or any revision of or amendments to this Agreement, will properly reflect the facts about all activities and transactions handled by authority of this Agreement and that the information shown on such billings, reports and settlement documents may be relied upon by Company as being complete and accurate in any further recording and reporting made by Company for whatever purposes.  Carrier shall notify Company if Carrier discovers any errors in such billings, reports, or settlement documents.

 

Section 24.16                      Right of First Refusal.  Carrier may not enter into any agreement with any Person other than Company with respect to terminaling services at the Hartford Terminal or Pasadena Terminal during the Term of this Agreement or upon the termination of this Agreement without first disclosing to Company all of the material terms and conditions of such an agreement and allowing Company not less than 60 Days within which to enter into an agreement upon the same terms and conditions.

 

Section 24.17                      Right of First Offer.  Company may not enter into any agreement with any Person other than Carrier with respect to terminaling services in connection with refined petroleum product distribution from the Sweeny Refinery or the Wood River Refinery without allowing Carrier an opportunity to offer to provide such services.

 

Section 24.18                      Effect of Company Restructuring.  If Company decides to restructure its supply, refining or sales operations at the Sweeny Refinery, or if WRB Refining LP decides to restructure its supply, refining or sales operations at the Wood River Refinery, in such a way as could reasonably be expected to materially and adversely affect the economics of Company’s performance of its obligations under this Agreement, then the Parties will negotiate in good faith concerning a reduction in Company’s commitment or an exchange of the Hartford Terminal or the Pasadena Terminal (whichever is adversely affected) for other assets not so affected.

 

Section 24.19                      Effect of Discontinuation of Publication.  If Argus ceases to provide the information to be obtained therefrom pursuant to this Agreement, the Parties shall negotiate in good faith to agree upon a replacement publication or pricing mechanism.

 

[Signature page follows.]

 

27

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

IN WITNESS WHEREOF, Carrier and Company have signed this Agreement as of the Effective Date.

 

	
 
    	
PHILLIPS   66 CARRIER LLC
    
	
 
    	
By:
    	
Phillips   66 Partners Holdings LLC
    
	
 
    	
 
    	
Sole   Member of Phillips 66 Carrier LLC
    
	
 
    	
By:
    	
Phillips   66 Partners LP,
    
	
 
    	
 
    	
Sole   Member of Phillips 66 Partners Holdings LLC
    
	
 
    	
By:
    	
Phillips   66 Partners GP LLC
    
	
 
    	
 
    	
General   Partner of Phillips 66 Partners LP
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   J.T. Liberti
    
	
 
    	
 
    	
J.T.   Liberti
    
	
 
    	
 
    	
Vice   President and Chief Operating Officer
    
	
 
    	
 
    	
of   Phillips 66 Partners GP LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PHILLIPS   66 COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   T.G. Taylor
    
	
 
    	
 
    	
T.G.   Taylor
    
	
 
    	
 
    	
Executive   Vice President, Commercial, Marketing,
    
	
 
    	
 
    	
Transportation   and Business Development
    

 

Signature Page/Terminal Services Agreement (Hartford and Pasadena)

 

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Exhibit A

 

Commodities

 

·                  Ultra Low Sulfur Diesel

·                  Aviation Gasoline

·                  Biodiesel

·                  Jet Fuel

·                  Slurry

·                  Natural Gasoline

·                  Reformate

·                  Fuel Oil

·                  Ethanol

·                  Butane

·                  Liquid Petroleum Gas

·                  Non-Premium Gasoline

·                  Non-Premium RBOB Gasoline

·                  Premium Gasoline

·                  Premium RBOB Gasoline

·                  Transmix

 

1

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Exhibit B

 

Scheduled Charges

 

	
1.
    	
Base   Throughput Fee:
    	
$**/Barrel
    
	
 
    	
 
    	
 
    
	
2.
    	
Blending   Fees:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Ethanol   Blending:
    	
$**/Barrel
    
	
 
    	
 
    	
 
    	
(applied   to volume of
    
	
 
    	
 
    	
 
    	
neat   ethanol blended)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Biodiesel   Blending:
    	
$**/Barrel
    
	
 
    	
 
    	
 
    	
(applied   to volume of
    
	
 
    	
 
    	
 
    	
neat   biodiesel blended)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Other   Additive Blending:
    	
$**/Barrel
    
	
 
    	
 
    	
(applied   to total
    
	
 
    	
 
    	
volume   blended)
    
	
 
    	
 
    	
 
    
	
3.
    	
Pasadena   Terminal Jet Fuel Handling:
    	
$**/Month(1)
    
	
 
    	
 
    	
 
    
	
4.
    	
Hartford   Dock Fees:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Dyed   diesel across barge dock:
    	
$**/Barrel
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Other   Commodities across barge dock:
    	
$**/Barrel
    
	
 
    	
 
    	
 
    
	
5.
    	
Pumpover   Fees:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Pasadena   Pumpover Fee:
    	
$**/Barrel
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Hartford   Pumpover Fee:
    	
$**/Barrel
    
	
 
    	
 
    	
 
    
	
6.
    	
Holdover   Fee.
    	
$**/Barrel/Month
    
	
 
    	
 
    	
(or partial Month)
    
	
 
    	
 
    	
 
    
	
7.
    	
Adjustment. Carrier may   adjust all charges set forth in Paragraphs 1, 2, 3, 4, 5 and 6 above annually   beginning January 1, 2014, in accordance with Section 4.03.
    
					

 

(1)  If the Effective Date is any day other than the first Day of a Month, or if this Agreement is terminated on any Day other than the last Day of a Month, then this Fee shall be prorated accordingly.

 

1

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

Exhibit C

 

Arbitration Procedure

 

Either Party may initiate dispute resolution procedures by sending a Notice to the other Party specifically stating the complaining Party’s Claim and by initiating binding arbitration in accordance with the Center for Public Resources Rules for Non-Administered Arbitration of Business Disputes, by three arbitrators who shall be neutral, independent, and generally knowledgeable about the type of transaction which gave rise to the dispute.  The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§ 1-16, provided that the arbitrators shall include in their report/award a list of findings, with supporting evidentiary references, upon which they have relied in making their decision.  Judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof.  The place of arbitration shall be Houston, Texas.

 

Notwithstanding anything herein and regardless of any procedures or rules of the Center for Public Resources, it is expressly agreed that the following shall apply and control over any other provision in this Agreement:

 

(a)                                 All offers, conduct, views, opinions and statements made in the course of negotiation or mediation by any of the Parties, their employees, agents, experts, attorneys and representatives, and by any mediator, are confidential, made for compromise and settlement, protected from disclosure under Federal and State Rules of Evidence and Procedure, and inadmissible and not discoverable for any purpose, including impeachment, in litigation or legal proceedings between the Parties, and shall not be disclosed to any Person who is not an agent, employee, expert or representative of the Parties, provided that evidence otherwise discoverable or admissible is not excluded from discovery or admission as a result of presentation or use in mediation.

 

(b)                                 Except to the extent that the Parties may agree upon selection of one or more arbitrators, the Center for Public Resources shall select arbitrators from a panel reviewed by the Parties.  The Parties shall be entitled to exercise peremptory strikes against one-third of the panel and may challenge other candidates for lack of neutrality or lack of qualifications. Challenges shall be resolved in accordance with Center for Public Resource rules.

 

(c)                                  The Parties shall have at least 20 Days following the close of hearing within which to submit a brief (not to exceed 18 pages in length) and ten Days from date of receipt of the opponent’s brief within which to respond thereto.

 

(d)                                 The Parties expressly agree that the arbitrators shall not award punitive damages, consequential damages, or attorneys’ fees (except attorneys’ fees specifically authorized by the Agreement).

 

1

 

TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

 

(e)                                  The fees and expenses of any mediator or arbitrator shall be shared equally by the Parties.

 

(f)                                   The Parties may, by written agreement (signed by both Parties), alter any time deadline or location(s) for meetings.

 

Time is of the essence for purposes of the provisions of this Exhibit.

 

2Exhibit 10.9

 

 

TAX SHARING AGREEMENT

 

by and among

 

PHILLIPS 66

 

and

 

PHILLIPS 66 PARTNERS LP

 

July 26, 2013

 

 

 

TAX SHARING AGREEMENT
 BY AND AMONG
 PHILLIPS 66 AND
 PHILLIPS 66 PARTNERS LP

 

Tax Sharing Agreement (the “Agreement”), dated this 26th day of July, 2013, by and among PHILLIPS 66, a Delaware corporation (“Phillips 66”), and PHILLIPS 66 PARTNERS LP, a Delaware limited partnership (the “Partnership”).

 

RECITALS

 

WHEREAS, Phillips 66 is the common parent of an affiliated group of corporations within the meaning of Section 1504(a) of the Code (as defined below), which currently files a consolidated federal income tax return;

 

WHEREAS, the Partnership Group (as defined below) includes various entities that may be required to join with Phillips 66 in the filing of a consolidated, combined or unitary state tax return;

 

WHEREAS, the Parties wish to set forth the general principles under which they will allocate and share various Taxes (as defined below) and related liabilities;

 

WHEREAS, Phillips 66, on behalf of itself and its present and future subsidiaries other than the Partnership Group (“Phillips 66 Group”), and the Partnership, on behalf of itself and its present and future subsidiaries (the “Partnership Group”), are entering into this Agreement to provide for the allocation among the Phillips 66 Group and the Partnership Group of all responsibilities, liabilities and benefits relating to any Tax for which a Combined Return (as defined herein) is filed for a taxable period including or beginning on or after the Effective Date (as defined herein) and to provide for certain other matters;

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions, and covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01                             Definitions.  The following terms shall have the following meanings (such meanings to be equally applicable to both the singular and the plural forms of the terms defined):

 

“Accounting Referee” is defined in Section 6.11 herein.

 

“Code” means the Internal Revenue Code of 1986, as amended, or any successor thereto, as in effect for the taxable period in question.

 

 

“Combined Group” means a group of corporations or other entities that files a Combined Return.

 

“Combined Return” means any Tax Return (other than a Tax Return for Federal income taxes) filed on a consolidated, combined (including nexus combination, worldwide combination, domestic combination, line of business combination or any other form of combination), or unitary basis that includes activities of any member of the Phillips 66 Group and any member of the Partnership Group.

 

“Effective Date” means the date of the closing of the initial public offering of common units representing limited partner interests of the Partnership.

 

“Final Determination” means the final resolution of any Tax (or other matter) for a taxable period, including related interest or penalties, that, under applicable law, is not subject to further appeal, review or modification through proceedings or otherwise, including (i) by the expiration of a statute of limitations or a period for the filing of claims for refunds, amending Tax Returns, appealing from adverse determinations, or recovering any refund (including by offset), (ii) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable, (iii) by a closing agreement, an accepted offer in compromise, or a comparable agreement under laws of the particular Tax Authority, (iv) by execution of a form under the laws of a Tax Authority that is comparable to an Internal Revenue Service Form 870 or 870-AD (or any successor forms thereto) (excluding, however, with respect to a particular Tax Item for a particular taxable period any such form that reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund and/or the right of the Tax Authority to assert a further deficiency with respect to such Tax Item for such period) or (v) by any allowance of a refund or credit, but only after the expiration of all periods during which such refund may be adjusted.

 

“Notice” is defined in Section 6.01 herein.

 

“Partnership Group” is defined in the Recitals to this Agreement.

 

“Partnership Group Combined Tax Liability” means, with respect to any Tax, the Partnership Group’s liability for such Tax owed with respect to a Combined Return for a taxable period, as determined under Section 3.02 of this Agreement.

 

“Partnership Group Deposit” is defined in Section 3.04 herein.

 

“Partnership Group Members” means those entities included in the Partnership Group.

 

“Partnership Group Pro Forma Combined Return” means a pro forma Combined Return or other schedule prepared pursuant to Section 3.02 of this Agreement.

 

“Party” means each of Phillips 66 and the Partnership, and solely for purposes of this definition, “Phillips 66” includes the Phillips 66 Group and the “Partnership” includes the Partnership Group.  Each of Phillips 66 and the Partnership shall cause the Phillips 66 Group and the Partnership Group, respectively, to comply with this Agreement.

 

 

“Phillips 66 Group” is defined in the Recitals to this Agreement.

 

“Tax” or “Taxes” means all forms of taxation, whenever created or imposed, and whether imposed by a domestic, local, municipal, governmental, state, federation or other body, but excluding taxes imposed by the United States, and without limiting the generality of the foregoing, shall include net income, alternative or add-on minimum, gross income, sales, use, ad valorem, gross receipts, value added, franchise, profits, license, transfer, recording, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profit, custom duty, or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any related interest, penalties, or other additions to tax, or additional amounts imposed by any such Tax Authority.

 

“Tax Attribute” means a Tax Item of a member of the Partnership Group reflected on a Combined Return that is comparable to one or more of the following attributes with respect to a Federal income tax consolidated tax return:  a net operating loss, a net capital loss, an unused investment credit, an unused foreign tax credit, an excess charitable contribution, a U.S. federal minimum tax credit or a U.S. federal general business credit (but not tax basis or earnings and profits).

 

“Tax Authority” means a domestic governmental authority (other than the United States) or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (excluding the U.S. Internal Revenue Service).

 

“Tax Controversy” means any audit, examination, dispute, suit, action, litigation or other judicial or administrative proceeding initiated by Phillips 66 or the Partnership or any Tax Authority.

 

“Tax Item” means any item of income, gain, loss, deduction or credit, or other item reflected on a Tax Return or any Tax Attribute.

 

“Tax Return” means any return, report, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, amended Tax Return, claim for refund or declaration of estimated tax) required to be supplied to, or filed with, a Tax Authority in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.

 

Any term used but not capitalized herein that is defined in the Code or in the Treasury Regulations thereunder or, where relevant, in applicable state or local statutes or regulations shall, to the extent required by the context of the provision at issue, have the meaning assigned to it in the Code, Treasury Regulations or such state or local statute or regulation.

 

 

ARTICLE II

 

PREPARATION AND FILING OF TAX RETURNS

 

Section 2.01                             Manner of Filing.

 

(a)                                 For periods that include the Effective Date and periods after the Effective Date, Phillips 66 shall have the sole and exclusive responsibility for the preparation and filing of, and shall prepare and file, all Combined Returns or cause to be prepared and filed all Combined Returns.  Phillips 66 shall be authorized to take any and all action necessary or incidental to the preparation and filing of a Combined Return, including, without limitation, (i) making elections and adopting accounting methods, (ii) filing all extensions of time, including extensions of time for payment of tax, (iii) filing claims for refund or credit or (iv) giving waivers or bonds.

 

(b)                                 For periods that include the Effective Date and periods after the Effective Date, the Partnership Group shall have the sole and exclusive responsibility for the preparation and filing of, and shall prepare and file or cause to be prepared and filed, all Tax Returns of the Partnership Group Members that are not Combined Returns.

 

(c)                                  Phillips 66 shall have sole discretion to include, or cause to be included, in a Combined Return for any Tax any member of the Partnership Group for which inclusion in such Combined Return is elective; provided, however, that the Partnership Group Combined Tax Liability for any period shall not exceed the aggregate of (x) each such elective Partnership Group Member’s liability for such Tax for such period, computed as if such Partnership Group Member were not included in such Combined Return and (y) the Partnership Group Combined Tax Liability calculated for the Partnership Group Members for which inclusion is not elective.  Phillips 66 shall provide pro forma Tax Returns pursuant to Section 3.053 of this Agreement to support the calculation of the amount of any decrease in the Partnership Group Combined Tax Liability pursuant to this Section 2.01(c).

 

Section 2.02                             Franchise Tax Taxable Period.  References to “taxable period” for any franchise or other doing business Tax shall mean the taxable period during which the income, operations, assets or capital comprising the base of such Tax is measured, regardless of whether the right to do business for another taxable period is obtained by the payment of such franchise Tax.

 

ARTICLE III

 

ALLOCATION OF TAXES

 

Section 3.01                             Liability of the Partnership Group for Combined Taxes.  For each Tax for each taxable period that includes or begins on or after the Effective Date and for which a Combined Return is filed, the Partnership Group Members included in such Combined Return shall be liable to Phillips 66 for an amount equal to the Partnership Group Combined Tax Liability in respect of such Tax.

 

Section 3.02                             Partnership Group Combined Tax Liability.  With respect to each Tax for each taxable period that includes or begins on or after the Effective Date and for which a 

 

 

member of the Partnership Group is included in a Combined Return, the Partnership Group Combined Tax Liability for such Tax for such taxable period shall be the Tax for such taxable period as determined on a Partnership Group Pro Forma Combined Return prepared:

 

(a)                                 by including only the Tax Items of the members of the Partnership Group that are included in the Combined Return and computing the liability of the Partnership Group Members for such Tax as if such Partnership Group Members were included in a separate consolidated or unitary group;

 

(b)                                 except as provided in Section 3.02(e) hereof, using all elections, accounting methods and conventions appropriate for the includable Partnership Group Members as a stand-alone taxpayer for such period;

 

(c)                                  applying the Tax rate in effect for the Combined Return of the Combined Group for such taxable period;

 

(d)                                 assuming that the Partnership Group elects not to carry back any net operating losses; and

 

(e)                                  assuming that the Partnership Group’s utilization of any Tax Attribute carryforward or carryback is limited to the Tax Attributes of the Partnership Group that would be available if the Partnership Group Combined Tax Liability for each taxable period ending after the Effective Date were determined in accordance with this Section 3.02.

 

Section 3.03                             Preparation and Delivery of Pro Forma Tax Returns.  Not later than 90 days following the date on which a Combined Return is filed with the appropriate Tax Authority, Phillips 66 shall prepare and deliver to the Partnership the related Partnership Group Pro Forma Combined Return calculating the Partnership Group Combined Tax Liability attributable to the period covered by such filed Combined Return.

 

Section 3.04                             Payment of Tax.  Phillips 66 shall timely pay (or shall cause to be timely paid) any Tax reflected on a Combined Return and hold harmless the Partnership for all liability for such Tax.  In the event Phillips 66 is required to make an estimated payment or deposit of any Tax of any Combined Group which includes any member of the Partnership Group, Phillips 66 shall calculate the portion, if any, of such estimated payment or deposit attributable to the Partnership Group using a methodology similar to that described in Section 3.02 (the “Partnership Group Deposit”) and shall present such calculation to the Partnership.  Within 5 days thereafter, the Partnership shall pay the Partnership Group Deposit to Phillips 66.  Within 30 days after delivery by Phillips 66 of a Partnership Group Pro Forma Combined Return to the Partnership calculating the Partnership Group Combined Tax Liability with respect to a Combined Return, the Partnership shall pay to Phillips 66 such Partnership Group Combined Tax Liability less the amount of any Partnership Group Deposit relating to the same Combined Return.

 

Section 3.05                             Subsequent Changes in Treatment of Tax Items.  With respect to any Combined Return for any taxable period beginning on or after the Effective Date, in the event of a change in the treatment of any Tax Item of any member of a Combined Group as a result of a Final Determination, within 30 days following such Final Determination (i) Phillips 66 shall 

 

 

calculate the change, if any, to the Partnership Group Combined Tax Liability resulting from such change, (ii) Phillips 66 shall pay any decrease in the Partnership Group Combined Tax Liability to the Partnership and (iii) the Partnership shall pay any increase in the Partnership Group Combined Tax Liability to Phillips 66.

 

ARTICLE IV

 

CONTROL OF TAX PROCEEDINGS; COOPERATION AND EXCHANGE OF INFORMATION

 

Section 4.01                             Control of Proceedings.  Except as provided in this Article IV, Phillips 66 shall have full responsibility and discretion in handling, settling or contesting any Tax Controversy involving a Tax Return for which it has filing responsibility under this Agreement as well as any Tax Controversy attributable to a Tax Return for any taxable period ending before the Effective Date.  The Partnership shall have full responsibility and discretion in handling, settling or contesting any Tax Controversy involving a Tax Return for which it has filing responsibility under this Agreement.  Except as otherwise provided in this Article IV, any costs incurred in handling, settling or contesting any Tax Controversy shall be borne by the Party having full responsibility and discretion thereof.

 

Section 4.02                             Cooperation and Exchange of Information.

 

(a)                                 Each Party shall cooperate fully at such time and to the extent reasonably requested by any other Party in connection with the preparation and filing of any Tax Return or claim for refund, or the conduct of any audit, dispute, proceeding, suit or action concerning any issues or other matters considered in this Agreement.  Such cooperation shall include, without limitation, the following: (i) the retention and provision on demand of Tax Returns, books, records (including those concerning ownership and Tax basis of property which a Party may possess), documentation or other information relating to the Tax Returns, including accompanying schedules, related workpapers, and documents relating to rulings or other determinations by Taxing Authorities, until the expiration of the applicable statute of limitations (giving effect to any extension, waiver or mitigation thereof); (ii) the provision of additional information, including an explanation of material provided under clause (i) of this Section 4.02(a), to the extent such information is necessary or reasonably helpful in connection with the foregoing; (iii) the execution of any document that may be necessary or reasonably helpful in connection with the filing of a Tax Return by Phillips 66, the Partnership or of their respective subsidiaries, or in connection with any audit, dispute, proceeding, suit or action and (iv) such Party’s commercially reasonable efforts to obtain any documentation from a governmental authority or a third party that may be necessary or reasonably helpful in connection with any of the foregoing.

 

(b)                                 Each Party shall make its employees and facilities available on a reasonable and mutually convenient basis in connection with any of the foregoing matters.

 

(c)                                  If any Party fails to provide any information requested pursuant to Section 4.02 hereof within a reasonable period, as determined in good faith by the Party requesting the information, then the requesting Party shall have the right to engage a public accounting firm to 

 

 

gather such information, provided that 30 days’ prior written notice is given to the unresponsive Party.  If the unresponsive Party fails to provide the requested information within 30 days of receipt of such notice, then such unresponsive Party shall permit the requesting Party’s public accounting firm full access to all appropriate records or other information as reasonably necessary to comply with this Section 4.02 and shall reimburse the requesting Party or pay directly all costs connected with the requesting Party’s engagement of the public accounting firm.

 

ARTICLE V

 

WARRANTIES AND REPRESENTATIONS; PAYMENT OBLIGATIONS

 

Section 5.01                             Warranties and Representations Relating to Actions of Phillips 66 and the Partnership.  Each of Phillips 66 and the Partnership warrants and represents to the other that:

 

(a)                                 in the case of Phillips 66, it is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power to carry out the transactions contemplated by this Agreement;

 

(b)                                 in the case of the Partnership, it is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power to carry out the transactions contemplated by this Agreement;

 

(c)                                  it has duly and validly taken all action necessary to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby;

 

(d)                                 this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation enforceable in accordance with its terms subject, as to the enforcement of remedies, to (i) applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally from time to time in effect and (ii) to general principles of equity, whether enforcement is sought in a proceeding at law or in equity and

 

(e)                                  the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, or the compliance with any of the provisions of this Agreement will not (i) conflict with or result in a breach of any provision of its certificate of incorporation, by-laws, certificate of limited partnership, limited partnership agreement or other organizational or governing documents, (ii) breach, violate or result in a default under any of the terms of any agreement or other instrument or obligation to which it is a party or by which it or any of its properties or assets may be bound, or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to it or affecting any of its properties or assets.

 

Section 5.02                             Calculation of Payment Obligations.  Except as otherwise provided under this Agreement, to the extent that the payor Party has a payment obligation to the payee Party pursuant to this Agreement, the payee Party shall provide the payor Party with its calculation of the amount of such obligation.  The documentation of such calculation shall provide sufficient detail to permit the payor Party to reasonably understand the calculation.  All payment

 

 

obligations shall be made to the payee Party or to the appropriate Tax Authority as specified by the payee Party within 30 days after delivery by the payee Party to the payor Party of written notice of a payment obligation.  Any disputes with respect to payment obligations shall be resolved in accordance with Section 6.11 below.

 

Section 5.03                             Prompt Performance.  All actions required to be taken by any Party under this Agreement shall be performed within the time prescribed for performance in this Agreement, or if no period is prescribed, such actions shall be performed promptly.

 

Section 5.04                             Interest.  Payments pursuant to this Agreement that are not made within the period prescribed therefor in this Agreement shall bear interest (compounded daily) from and including the date immediately following the last date of such period through and including the date of payment at a rate equal to the Federal short-term rate or rates established pursuant to Section 6621 of the Code for the period during which such payment is due but unpaid.

 

Section 5.05                             Tax Records.  The Parties to this Agreement hereby agree to retain and provide on proper demand by any Tax Authority (subject to any applicable privileges) the books, records, documentation and other information relating to any Tax Return until the later of (a) the expiration of the applicable statute of limitations (giving effect to any extension, waiver or mitigation thereof), (b) the date specified in an applicable records retention agreement entered into with a Tax Authority, (c) a Final Determination made with respect to such Tax Return and (d) the final resolution of any claim made under this Agreement for which such information is relevant.

 

Section 5.06                             Continuing Covenants.  Each Party agrees (1) not to take any action reasonably expected to result in a new or changed Tax Item that is detrimental to any other Party and (2) to take any action reasonably requested by any other Party that would reasonably be expected to result in a new or changed Tax Item that produces a benefit or avoids a detriment to such other Party; provided that such action does not result in any additional cost not fully compensated for by the requesting Party.  The Parties hereby acknowledge that the preceding sentence is not intended to limit, and therefore shall not apply to, the rights of the Parties with respect to matters otherwise covered by this Agreement.

 

ARTICLE VI

 

MISCELLANEOUS PROVISIONS

 

Section 6.01                             Notice.  Any notice, demand, claim, or other communication required or permitted to be given under this Agreement (a “Notice”) shall be in writing and may be personally served provided a receipt is obtained therefor, or may be sent by certified mail return receipt requested postage prepaid, to the Parties at the following addresses (or at such other address as one Party may specify by notice to any other Party):

 

 

 

Phillips 66 at:                       Phillips 66

3010 Briarpark Dr.

Houston, Texas 77042

Attention:  General Counsel

 

Partnership at:                 Phillips 66 Partners LP

c/o Phillips 66 Partners GP LLC

3010 Briarpark Dr.

Houston, Texas 77042

Attention:  President

 

A Notice which is delivered personally shall be deemed given as of the date specified on the written receipt therefor.  A Notice mailed as provided herein shall be deemed given on the third business day following the date so mailed.  Notification of a change of address may be given by any Party to another in the manner provided in this Section 6.01 for providing a Notice.

 

Section 6.02                             Required Payments.  Unless otherwise provided in this Agreement, any payment of Tax required shall be due within 30 days of a Final Determination of the amount of such Tax.

 

Section 6.03                             Injunctions.  The Parties acknowledge that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached.  The Parties hereto shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court having jurisdiction, such remedy being in addition to any other remedy to which they may be entitled at law or in equity.

 

Section 6.04                             Further Assurances.  Subject to the provisions hereof, the Parties hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions, as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby.  Subject to the provisions hereof, each of the Parties shall, in connection with entering into this Agreement, perform its obligations hereunder and take any and all actions relating hereto, comply with all applicable laws, regulations, orders, and decrees, obtain all required consents and approvals and make all required filings with any governmental agency, other regulatory or administrative agency, commission or similar authority and promptly provide the other Parties with all such information as such Parties may reasonably request in order to be able to comply with the provisions of this sentence.

 

Section 6.05                             Parties in Interest.  Except as herein otherwise specifically provided, nothing in this Agreement expressed or implied is intended to confer any right or benefit upon any person, firm or corporation other than the Parties and their respective successors and permitted assigns.

 

Section 6.06                             Setoff.  Except as provided by Section 2.01(c) of this Agreement, all payments to be made under this Agreement shall be made without setoff, counterclaim or withholding, all of which are, to the fullest extent permitted by law, expressly waived.

 

 

Section 6.07                             Change of Law.  If, due to any change in applicable law or regulations or the interpretation thereof by any court of law or other governing body having jurisdiction subsequent to the date of this Agreement, performance of any provision of this Agreement or any transaction contemplated hereby shall become impracticable or impossible, the Parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision.

 

Section 6.08                             Termination and Survival.  Notwithstanding anything in this Agreement to the contrary, this Agreement shall remain in effect and its provisions shall survive for the full period of all applicable statutes of limitation (giving effect to any extension, waiver or mitigation thereof) or until otherwise agreed to in writing by Phillips 66 and the Partnership, or their respective successors and permitted assigns.

 

Section 6.09                             Amendments; No Waivers.

 

(a)                                 Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Phillips 66 and the Partnership, or in the case of a waiver, by the Party against whom the waiver is to be effective.

 

(b)                                 No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

Section 6.10                             Governing Law and Interpretation.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed in the State of Delaware.

 

Section 6.11                             Resolution of Certain Disputes.  To the fullest extent permitted by law, any disagreement between the Parties with respect to any matter that is the subject of this Agreement, including, without limitation, any disagreement with respect to any calculation or other determinations by Phillips 66 hereunder, which is not resolved by mutual agreement of the Parties, shall be resolved by a nationally recognized independent accounting firm chosen by and mutually acceptable to the Parties hereto (an “Accounting Referee”).  Such Accounting Referee shall be chosen by the Parties within 15 business days from the date on which one Party serves written notice on another Party requesting the appointment of an Accounting Referee, provided that such notice specifically describes the calculations to be considered and resolved by the Accounting Referee.  In the event the Parties cannot agree on the selection of an Accounting Referee, then the Accounting Referee shall be any office or branch of the public accounting firm of Ernst & Young LLP.  The Accounting Referee shall resolve any such disagreements as specified in the notice within 30 days of appointment; provided, however, that no Party shall be required to deliver any document or take any other action pursuant to this Section 6.11 if it determines that such action would result in the waiver of any legal privilege or any detriment to its business.  To the fullest extent permitted by law, any resolution of an issue submitted to the Accounting Referee shall be final and binding on the Parties hereto without further recourse.  The Parties shall share the costs and fees of the Accounting Referee equally.

 

 

Section 6.12                             Confidentiality.  Except to the extent required to protect a Party’s interests in a Tax Controversy, each Party shall hold and shall cause its consultants and advisors to hold in strict confidence, unless compelled to disclose by judicial or administrative process or, by other requirements of law, all information (other than any such information relating solely to the business or affairs of such Party) concerning another Party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (i) previously known by the Party to which it was furnished, (ii) in the public domain through no fault of such Party or (iii) later lawfully acquired from other sources by the Party to which it was furnished), and each Party shall not release or disclose such information to any other person, except its auditors, attorneys, financial advisors, bankers and other consultants and advisors who shall be advised of the provisions of this Agreement.  Each Party shall be deemed to have satisfied its obligation to hold confidential information concerning or supplied by another Party if it exercises the same care as it takes to preserve confidentiality for its own similar information.

 

Section 6.13                             Costs, Expenses and Attorneys’ Fees.  Except as expressly set forth in this Agreement, each Party shall bear its own costs and expenses incurred pursuant to this Agreement.  In the event a Party to this Agreement brings an action or proceeding for the breach or enforcement of this Agreement, the prevailing party in such action, proceeding, or appeal, whether or not such action, proceeding or appeal proceeds to final judgment, shall, to the fullest extent permitted by law, be entitled to recover as an element of its costs, and not as damages, such reasonable attorneys’ fees as may be awarded in the action, proceeding or appeal in addition to whatever other relief the prevailing party may be entitled.  For purposes of this Section 6.13, the “prevailing party” shall be the Party who is entitled to recover its costs; a Party not entitled to recover its costs shall not recover attorneys’ fees.  No sum for attorneys’ fees shall be counted in calculating the amount of the judgment for purposes of determining whether a Party is entitled to recover its costs or reasonable attorneys’ fees.

 

Section 6.14                             Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

Section 6.15                             Severability.  The Parties hereby agree that, if any provision of this Agreement should be adjudicated to be invalid or unenforceable, such provision shall be deemed deleted herefrom with respect, and only with respect, to the operation of such provision in the particular jurisdiction in which such adjudication was made, and only to the extent of the invalidity, and any such invalidity or unenforceability in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  All other remaining provisions of this Agreement shall remain in full force and effect for the particular jurisdiction and all other jurisdictions.

 

Section 6.16                             Entire Agreement.

 

(a)                                 This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all other agreements, whether or not written, in respect of any Tax between the Phillips 66 Group and the Partnership Group.

 

 

(b)                                 In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of any other agreement between the Phillips 66 Group and the Partnership Group the provisions of this Agreement shall take precedence and to such extent shall be deemed to supersede such conflicting provisions under the other agreement.

 

Section 6.17                             Assignment.  This Agreement is being entered into by Phillips 66 and the Partnership on behalf of themselves and each member of the Phillips 66 Group and the Partnership Group.  This Agreement shall constitute a direct obligation of each such member and shall be deemed to have been readopted and affirmed on behalf of any entity that becomes a member of the Phillips 66 Group or the Partnership Group in the future.  Each of Phillips 66 and the Partnership hereby guarantee the performance of all actions, agreements and obligations provided for under this Agreement of each member of the Phillips 66 Group and the Partnership Group, respectively.  Each of Phillips 66 and the Partnership shall, upon the written request of the other, cause any of their respective group members to formally execute this Agreement.  This Agreement shall be binding upon, and shall inure to the benefit of, the successors, assigns and persons controlling any of the entities bound hereby for so long as such successors, assigns or controlling persons are members of the Phillips 66 Group or the Partnership Group or their successors and assigns.

 

Section 6.18                             Fair Meaning.  The parties intend that this Agreement shall be construed in accordance with its fair meaning and shall not be construed strictly against the drafter.

 

Section 6.19                             Titles and Headings.  Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part or to affect the meaning or interpretation of this Agreement.

 

Section 6.20                             Construction.  In this Agreement, unless the context otherwise requires the terms “herein,” “hereof,” and “hereunder” refer to this Agreement.

 

 

IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Agreement as of the day and year first above written.

 

 

	
 
    	
PHILLIPS   66
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tim G. Taylor
    
	
 
    	
 
    	
Tim   G. Taylor
    
	
 
    	
 
    	
Executive   Vice President, Commercial, 

Marketing,   Transportation and Business 

Development
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PHILLIPS   66 PARTNERS LP
    
	
 
    	
 
    
	
 
    	
By:
    	
Phillips   66 Partners GP LLC, 
    
	
 
    	
 
    	
its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   J.T. Liberti
    
	
 
    	
 
    	
J.T.   Liberti
    
	
 
    	
 
    	
Vice   President and Chief Operating Officer

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