Document:

Exhibit 10.456

 

FIRST AMENDMENT

TO

AMENDED AND RESTATED LIMITED LIABILITY
COMPANY AGREEMENT

OF

BR BOCA JV MEMBER, LLC

 

THIS FIRST AMENDMENT
to the Amended and Restated Limited Liability Company Agreement (the “Amendment”) of BR BOCA JV MEMBER,
LLC, a Delaware limited liability company (the “Company”), is made as of February 15, 2017 and shall be effective
as of the 6th day of January, 2017 (the “Amendment Date”), by BRG BOCA, LLC, a Delaware limited liability
company (“BRG”), and BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND II, LLC, a Delaware limited liability company
(“SOIF II”) (each, a “Member” and together, the “Members”).

 

RECITALS

 

WHEREAS, BR Boca JV
Member, LLC was duly formed on June 21, 2016 pursuant to the Delaware Limited Liability Company Law, as amended from time to time
(the “Act”).

 

WHEREAS, the initial
members of the Company, BRG and SOIF II, entered into that certain Amended and Restated Limited Liability Company Agreement
for the Company dated effective as of January 6, 2017 (the “LLC Agreement”).

 

WHEREAS, the Members
desire to amend the LLC Agreement as of the Amendment Date to correct the scrivener’s error and otherwise on the terms and
conditions set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the agreements and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree that the LLC Agreement is hereby modified and amended as set forth below.
Capitalized terms used herein without definition shall have the meanings given in the LLC Agreement.

 

1.            Section 4(a)
is hereby deleted in its entirety and replaced with the following:

 

(a)          Subject to Sections
7(d) and 7(e), the Company, and each of the Manager and the Management Committee on behalf of the Company (as applicable), (i)
shall have and exercise all powers necessary, convenient, or incidental to accomplish its purposes as set forth in Section 3 and
(ii) subject to Section 3, shall have and exercise all of the powers and rights conferred upon limited liability companies formed
pursuant to the Act.

 

2.           The last sentence
of Section 5 is hereby deleted in its entirety and replaced with the following:

 

Subject
to Section 7, the Members may act by written consent.

 

3.           Sections 7(a),
7(b) and 7(c) are hereby deleted in their entirety, and are replaced with the following:

 

(a)       Subject
to Sections 7(d) and 7(e), as applicable, the business and affairs of the Company shall be managed by or under the direction of
the Manager. The initial Manager shall be SOIF II. The Manager shall hold office until such Manager’s dissolution, death
or resignation. Subject to the provisions of this Section 7 and Section 17, any successor Manager shall be appointed by a majority
of the Membership Interests. Upon exercise by BRG in its capacity as optionee under the Option Agreement, BRG shall automatically
succeed as, and become, Manager of the Company.

 

     

     

    

 

(b)       Powers.
Subject to Sections 3, 7(d) and 7(e), the Manager shall have the power to do any and all acts necessary, convenient or incidental
to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise. Subject to Sections 3,
7(d) and 7(e), the Manager has the authority to bind the Company.

 

(c)       Manager
as Agent. To the extent of its powers set forth in this Agreement and subject to Sections 7(d) and 7(e), the Manager is an
agent of the Company for the purpose of the Company’s business, and the actions of the Manager taken in accordance with such
powers set forth in this Agreement shall bind the Company.

 

4.          A new Section
7(e) is hereby added to the LLC Agreement, and shall read as follows:

 

(e)       Management
Committee. BRG and SOIF II hereby establish a management committee (the “Management Committee”) and, subject
to Section 7(d), grants to the Management Committee the sole and exclusive right, power and authority to make, approve or disapprove
all Major Decisions (as hereinafter defined) on behalf of the Company. The Management Committee may appoint individuals to act
its behalf pursuant to this Section 7(e), with such titles and authority as determined from time to time by the Management Committee.

 

		(i)	For purposes of this Agreement, “Major Decision” means any decision for the
Company to take, or refrain from taking, any action or incurring any obligation with respect to the following matters (or the effectuation
of any such action or obligation):

 

		(A)	any merger, conversion or consolidation involving the Company or any subsidiary or the sale, lease,
transfer, exchange or other disposition of all or substantially all of the Company’s assets or all of the interests of the
Members in the Company, in one or a series of related transactions;

 

		(B)	any liquidation, dissolution or termination of the Company or any subsidiary;

 

		(C)	giving, granting or undertaking any options, rights of first refusal, deeds of trust, mortgages,
pledges, ground leases, security or other interests in or encumbering any real property owned by BR NCC Boca Apok Owner, LLC (such
real property, collectively, the “Property”), any portion thereof or any other material assets;

 

		(D)	selling, conveying or effecting any other direct or indirect transfer of the Property, any subsidiary
or other material asset of the Company or any portion thereof or the entering into of any agreement, commitment or assumption with
respect to any of the foregoing;

 

     

     

    

 

		(E)	acquiring, directly or through any subsidiaries, by purchase, ground lease or otherwise, any real
property or other material asset or the entry into of any agreement, commitment or assumption with respect to any of the foregoing,
or the making or posting of any deposit (refundable or non-refundable);

 

		(F)	taking any action by the Company or any subsidiary that is reasonably likely to result in any Member
or any of its affiliates having individual liability under any so called “bad boy” guaranties or similar agreements
provided to third party lenders in respect of financings relating to the Company, its subsidiaries or any of their assets which
provide for recourse as a result of willful misconduct, fraud or gross negligence or failure to comply with the covenants or any
other provisions of such “bad boy” guaranties;

 

		(G)	institute or settle any Company or subsidiary legal claims in excess of $50,000;

 

		(H)	employ, enter into any contract with (or materially modify any contract with), or otherwise compensate,
directly or indirectly, the Manager or any affiliate of the Manager;

 

		(I)	amend, modify, recast, refinance or replace any financing to which the Company or a subsidiary
is a party or which encumbers the Property or any portion thereof;
	 	 	 

			

		(J)	incur on behalf of the Company or a subsidiary during any year any capital expenditures in excess
of $50,000;

 

		(K)	make any loan to any Member, except as expressly provided for in this Agreement; or

 

		(L)	cause or permit the Company or a subsidiary to file for or fail to contest a bankruptcy proceeding,
or seek or permit a receivership or make an assignment for the benefit of its creditors.

 

		(ii)	The Management Committee shall consist of four (4) individuals appointed to act as “representatives”
of the Member that appointed him or her (the “Representatives”) as follows: (a) BRG shall be entitled to designate
two (2) Representatives to represent BRG; and (b) SOIF II shall be entitled to designate two (2) Representatives to represent SOIF
II. The initial Representatives of BRG shall be Christopher J. Vohs and Michael. L. Konig. The initial Representatives of SOIF
II shall be Jordan Ruddy and James G. Babb. BRG and SOIF II each represents, warrants and covenants that the Representatives designated
by them have, and shall at all times have, the full power and authority to make decisions and vote as a member of the Management
Committee, and that such Representatives’ votes as members of the Management Committee will be binding on each of them and
any transferee of all or a portion of their Interest; unless and until such time as BRG or SOIF II or their transferee notifies
the other Member of a change in a Representative, after which time this sentence shall apply only with respect to the replacement
Representative.

 

     

     

    

  

		(iii)	Each member of the Management Committee shall hold office until death, resignation or removal at
the pleasure of the Member that appointed him or her. If a vacancy occurs on the Management Committee, the party with the right
to appoint and remove such vacating Representative shall appoint his or her successor. A Member shall lose its right to have Representatives
on the Management Committee, and its Representatives on the Management Committee shall be deemed to be automatically removed, as
of the date on which such Member ceases to be a Member or as otherwise provided in this Agreement. If either BRG or SOIF II, or
any affiliate thereof (any such party, for purposes of this Section 7(e), the “Transferor Party”), transfers
all or a portion of its interest to any affiliate thereof pursuant to Section 16 hereof, which affiliate is thereafter admitted
as a Member pursuant to Section 18 hereof, such affiliate (the “Transferee Affiliate”) shall automatically,
and without any further action or authorization by any Member, succeed to the rights and powers of BRG or SOIF II (or the applicable
Transferee Affiliate) under this Section 7(e) as may be agreed to between the Transferor Party, on the one hand, and the Transferee
Affiliate to which the interest is being transferred, on the other hand, including the shared or unilateral right to appoint the
Representatives that the Transferor Party was theretofore entitled to appoint pursuant to Section 7(e)(ii) hereof.

 

		(iv)	The only Representatives required to constitute a quorum for a meeting of the Management Committee
shall be one (1) Representative appointed by BRG and one (1) Representative appointed by SOIF II; provided, however, that if BRG
has not appointed at least one (1) Representative to the Management Committee at the time of such meeting (for example, if each
BRG Representative has been removed and not replaced), then a quorum for a meeting of the Management Committee shall be one (1)
Representative appointed by SOIF II. Each of the two (2) Representatives appointed by SOIF II shall be entitled to cast two (2)
votes on any matter that comes before the Management Committee, and each of the Representatives appointed by BRG shall be entitled
to cast one (1) vote on any matter that comes before the Management Committee. Approval by the Management Committee of any matter
shall require the affirmative vote (including votes cast by proxy) of at least a majority of the votes of the Representatives then
in office voting at a duly held meeting of the Management Committee.

 

		(v)	Any meeting of the Management Committee may be held by conference telephone call, video conference
or through similar communications equipment by means of which all persons participating in the meeting can communicate with each
other. Participation in a telephonic and/or video conference meeting held pursuant to this Section 7(e) shall constitute presence
in person at such meeting.

 

     

     

    

 

		(vi)	Any action required or permitted to be taken at a meeting of the Management Committee may be taken
without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken,
shall be signed by the Representatives having not less than the minimum of votes that would be necessary to authorize or take such
action at a meeting at which all Representatives entitled to vote thereon were present and voted. All consents shall be filed with
the minutes of the proceedings of the Management Committee.

 

		(vii)	Except as otherwise expressly provided in this Agreement, none of the Members or their Representatives
(in their capacities as members of the Management Committee only) shall have any duties or liabilities to the Company or any other
Member (including any fiduciary duties), whether or not such duties or liabilities otherwise arise or exist in law or in equity,
and each Member hereby expressly waives any such duties or liabilities; provided, however, that this Section 7(e)(vii) shall not
eliminate or limit the liability of such Representatives or the Members (A) for acts or omissions that involve fraud, intentional
misconduct or a knowing and culpable violation of law, or (B) for any transaction not permitted or authorized under or pursuant
to this Agreement from which such Representative or Member derived a personal benefit unless the Management Committee has approved
in writing such transaction in accordance with this Agreement; provided, further, however, that the duty of care of each of such
Representatives and the Members is to not act with fraud, intentional misconduct or a knowing and culpable violation of law. Except
as provided in this Agreement, whenever in this Agreement a Representative of a Member and/or a Member is permitted or required
to make a decision affecting or involving the Company, any Member or any other person, such Representative and/or such Member shall
be entitled to consider only such interests and factors as he, she or it desires, including a particular Member’s interests,
and shall, to the fullest extent permitted by applicable law, have no duty or obligation to give any consideration to any interest
of or factors affecting the Company or any Member.

 

The LLC Agreement,
as amended, remains in full force and effect, unmodified except as specifically set forth herein. In the event of any conflict
between the provisions of this Amendment and the provisions of the LLC Agreement, the provisions of this Amendment shall govern
and control. This Amendment shall be governed by the laws of the State of Delaware.

 

[Remainder of page intentionally left
blank. Signature page follows.]

 

     

     

    

 

IN WITNESS WHEREOF, the Members have
executed this Amendment to be effective as of the Amendment Date set forth above.

 

	 	MEMBERS:
	 	
		BRG BOCA, LLC,
		a Delaware limited liability company

 

		By:	Bluerock Residential Holdings, L.P.,
		 	a Delaware limited partnership
	 	Its:	Sole Member

 

	 	By:	Bluerock Residential Growth REIT, Inc.,
	 	 	a Maryland corporation
	 	Its:	General Partner

 

	 	By: 	/s/ Michael L. Konig
	 	Name:	Michael L. Konig
	 	Title:	Chief Operating Officer, Secretary and General Counsel

 

	 	BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND II, LLC,
	 	a Delaware limited liability company

 

	 	By:	BR SOIF II Manager, LLC,
	 	 	a Delaware limited liability company
	 	Its:	Manager

 

	 	By: 	/s/ Jordan Ruddy
	 	Name: 	Jordan Ruddy
	 	Title:   	Authorized SignatoryExhibit

TESORO LOGISTICS LP
2011 LONG-TERM INCENTIVE PLAN
(as amended and restated to date)
PERFORMANCE PHANTOM UNIT AGREEMENT

Pursuant to this Performance Phantom Unit Agreement, dated as of February 16, 2017 (the “Agreement”), Tesoro Logistics GP, LLC (the “Company”), as the general partner of Tesoro Logistics LP (the “Partnership”), hereby grants to [___________] (the “Participant”) the following award of Phantom Units (“Phantom Units”), pursuant and subject to the terms and conditions of this Agreement and the Tesoro Logistics LP 2011 Long-Term Incentive Plan, as amended and restated to date (the “Plan”), the terms and conditions of which are hereby incorporated into this Agreement by reference.  Each Phantom Unit shall constitute a Phantom Unit under the terms of the Plan and is hereby granted in tandem with a corresponding DER, as further detailed in Section 3 below.  Except as otherwise expressly provided herein, all capitalized terms used in this Agreement, but not defined, shall have the meanings provided in the Plan.    

GRANT NOTICE

Subject to the terms and conditions of this Agreement, the principal features of this Award are as follows:   
		
	Target Number of Phantom Units:
	[________]

Grant Date:  February 16, 2017
Performance Period:  February 16, 2017 to February 16, 2020
DERs: Each Phantom Unit granted under this Agreement shall be issued in tandem with a corresponding DER, which shall entitle the Participant to receive payments in an amount equal to Partnership distributions in accordance with Section 3 of this Agreement.

TERMS AND CONDITIONS OF PHANTOM UNITS

1.Grant.  The Company hereby grants to the Participant, as of the Grant Date, an award of Phantom Units as set forth in the Grant Notice above, subject to all of the terms and conditions contained in this Agreement and the Plan.

2.Phantom Units.  Subject to Section 4 below, each Phantom Unit that vests shall represent the right to receive payment, in accordance with Section 5 below, in the form of one Unit.  Unless and until a Phantom Unit vests, the Participant will have no right to payment in respect of any such Phantom Unit.  Prior to actual payment in respect of any vested Phantom Unit, such Phantom Unit will represent an unsecured obligation of the Partnership, payable (if at all) only from the general assets of the Partnership.

3.Grant of Tandem DER. Each Phantom Unit granted hereunder is hereby granted in tandem with a corresponding DER, which DER shall remain outstanding from the Grant Date until the earlier of the payment or forfeiture of the Phantom Unit to which it corresponds.  Each vested DER shall entitle the Participant to receive payments, subject to and in accordance with this Agreement, in an amount equal to any distributions made by the Partnership in respect of the Units underlying the Phantom Units to which such DER relates.  Upon the vesting of a Phantom Unit, the DER with respect to such vested Phantom Unit 

shall also become vested.  Similarly, upon the forfeiture of a Phantom Unit, the DER with respect to such forfeited Phantom Unit shall also be forfeited.  DERs shall not entitle the Participant to any payments relating to distributions occurring after the earlier to occur of the applicable Phantom Unit payment date or the forfeiture of the Phantom Unit underlying such DER.   The DERs and any amounts that may become distributable in respect thereof shall be treated separately from the Phantom Units and the rights arising in connection therewith for purposes of Section 409A of the Code (including for purposes of the designation of time and form of payments required by Section 409A). 

4.Vesting and Termination.  

(a)    Vesting.  Subject to Sections 4(b), (c) and (d) below, all or a portion of the Phantom Units shall vest as of the last day of the Performance Period (as indicated in the Grant Notice above) as set forth in the following table (for purposes of the table below performance of the Partnership shall be measured using the three-year cumulative TURs compared to the three-year cumulative relative TURs for the Peer Group over the Performance Period:
	
		
	Partnership’s Performance Relative to the Performance Peer Group’s Relative TUR
	Payout % of Target Number of Phantom Units

	<30th percentile
	0%

	30th percentile
	50%

	50th percentile
	100%

	75th percentile
	150%

	90th percentile +
	200%

Vesting between 30th percentile and 50th percentile performance, between 50th percentile performance and 75th percentile performance and between 75th percentile performance and 90th percentile performance will be determined by straight-line interpolation. 
(b)    Partial Accelerated Vesting in Certain Circumstances.  Subject to Section 4(d)(i) below, a pro-rated portion (based on the number of full months worked within the Performance Period divided by 36) of the Target Number of Phantom Units (as indicated in the Grant Notice above) shall vest upon the occurrence of any of the following events: a termination of the Participant’s Service prior to the last day of the Performance Period by reason of the Participant’s death or Disability.  
(c)    Change in Control.  In the event of a Change in Control, the Phantom Units shall either (i) be assumed or continued by the acquiring or surviving entity or (ii) vest upon the consummation of such Change in Control with respect to the greater of 100% of the Target Number of Phantom Units (as indicated in the Grant Notice above) or the actual number of Phantom Units that would have been earned based on performance through the date of the Change in Control.  If the Phantom Units are assumed or continued pursuant to the preceding sentence, the Phantom Units shall be converted into a time-based award with respect to the greater of the Target Number of Phantom Units (as indicated in the Grant Notice above) or the actual number of Phantom Units that would have been earned based on performance through the date of the Change in Control, which  converted Phantom Units shall vest based upon the Participant’s continued Service through the last day of the Performance Period.

(d)    Forfeiture; Certain Terminations.  
(i)     Notwithstanding the foregoing, but subject to Section 4(d)(ii) below, in the event of a termination of the Participant’s Service including a violation of Tesoro’s Code of Business Conduct, or involuntary termination without eligibility for severance under a Company sponsored severance plan or the occurrence of a Change in Control, as applicable, all Phantom Units that have not vested prior to or in connection with such termination of Service or Change in Control (or are not converted pursuant to Section 4(c) above) shall thereupon automatically be forfeited by the Participant without further action and without payment of consideration therefor.  Subject to Section 4(d)(ii) below, no portion of the Phantom Units which has not become vested at the date of the Participant’s termination of Service shall thereafter become vested.  For the avoidance of doubt, no Phantom Units shall become vested pursuant to Section 4(c) above in the event of a Change in Control following a termination of the Participant’s Service.
(ii)    Notwithstanding Section 4(d)(i) above, in the event of a termination of the Participant’s Service (A) as a result of the Participant’s Retirement at any time before the last day of the Performance Period or (B) at or after the one year anniversary of the commencement of the Performance Period but before the last day of the Performance Period (and not within two years following a Change in Control) by the Company, the Partnership or one of their Affiliates without Cause under circumstances qualifying for severance compensation under any severance plan sponsored by the Company, a portion of the Phantom Units shall not be forfeited in connection with such termination of Service, but shall instead remain outstanding and shall be eligible to vest on the last day of the Performance Period in accordance with this Section 4(c)(ii).  In the event of such a termination of Service, the number of Phantom Units that shall vest on the last day of the Performance Period, if any, shall be equal to the number of Phantom Units that would have vested under Section 4(a) had the Participant remained in Service with the Company, the Partnership or one of their Affiliates through the last day of the Performance Period, multiplied by a fraction, the numerator of which is the number of whole months of service by the Participant during the Performance Period and the denominator of which is the total number of whole months in the Performance Period.    
(iii)     Notwithstanding Section 4(d)(i) above, in the event of a termination of the Participant’s Service within two years following a Change in Control (A) as a result of the Participant’s resignation for Good Reason or (B) by the Company, the Partnership or one of their Affiliates without Cause, the Phantom Units shall not be forfeited in connection with such termination of Service, but shall instead immediately vest upon such termination of Service.  
(iv)     Effective as of the last day of the Performance Period, any portion of the Phantom Units that does not become vested in accordance with Section 4(a), 4(c), 4(d)(ii) or 4(d)(iii) above shall automatically be forfeited by the Participant without further action and without payment of consideration therefor.
(v)    In addition to the forfeiture provisions described above, this Award and all other equity-based compensation awards granted to you by the Company or any affiliate or Tesoro Corporation, in each case, to the extent outstanding and unvested at the time of any such breach, shall be subject to immediate forfeiture and recoupment (in full) by the Company upon the Participant’s breach, in any respect, of any of the covenants set forth in Section 9 hereof. 

 (e)    Definitions.
(i)    Retirement. For purposes of this Agreement, “Retirement” shall mean a Participant’s retirement from active Service (A) at or after age fifty-five (55) with five (5) years of service recognized by the Company, the Partnership or the applicable Affiliate, or (B) at or after age fifty (50) with eighty (80) points (with “points” meaning the sum of the Participant’s age and years of service recognized by the Company the Partnership or the applicable Affiliate at the time of retirement).  The determination of the Committee as to an individual’s Retirement shall be conclusive on all parties.

(ii)    Good Reason. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following: (A) without Participant's express written consent, the assignment to Participant of any duties inconsistent with the employment of Participant immediately prior to the Change in Control, or a significant diminution of Participant's positions, duties, responsibilities and status with the Company from those immediately prior to a Change in Control or a diminution in Participant's titles or offices as in effect immediately prior to a Change in Control, or any removal of Participant from, or any failure to reelect Participant to, any of such positions, (B) a material reduction by the Company, the Partnership or the applicable Affiliate in Participant's Base Salary, as in effect immediately prior to a Change in Control, (C) the failure by the Company to continue benefits, including but not limited to, thrift, pension, life insurance, and health plans, substantially equal in value, in the aggregate, to those in which Participant is participating or is eligible to participate at the time of the Change in Control except as otherwise required by the terms of such plans as in effect at the time of any Change in Control, (D) the failure by the Company, the Partnership or the applicable Affiliate to continue in effect any incentive plan or arrangement in which Participant is participating at the time of a Change in Control (or to substitute and continue other plans or arrangements providing the Participant with substantially similar benefits), except as otherwise required by the terms of such plans as in effect at the time of any Change in Control, (E) the occurrence of an event that meets the criteria set forth under the Company’s or the Partnership’s relocation policy, as in effect from time to time, with respect to which either (i) the Participant fails to provide express written consent to the relocation or (ii) the Company, the Partnership or the applicable Affiliate fails to provide the relocation benefit set forth in such policy; or (F) any failure by the Company, the Partnership or the applicable Affiliate to obtain the assumption of this Agreement by any successor or assign of the Company, the Partnership or the applicable Affiliate.

(iii)    TUR.  For purposes of this Agreement, “TUR” means, as applicable, the Partnership’s or a member of the Peer Group’s total unitholder return for the applicable Performance Period calculated based on the change in the trading price of the applicable units over the Performance Period and assuming the reinvestment of all distributions paid on units during such period, all as determined by the Committee in its discretion; provided, however, that (A) except as set forth in clause (B) below, for purposes of calculating the Partnership’s TUR for any Performance Period, the initial unit price and the final unit price, as applicable, as of any given date shall be equal to the Fair Market Value (as defined in the Plan) as of such date, and (B) for purposes of calculating the Partnership’s TUR for any Performance Period that commences with the date of the closing of the initial public offering of Units, the initial unit price shall be equal to the initial public offering price of a Unit.

(iv)    Peer Group.  For purposes of this Agreement, the “Peer Group” shall consist of the companies listed on the Term Sheet included herewith.  

5.Payment of Phantom Units and DERs.  

(a)    Phantom Units.    Unpaid, vested Phantom Units shall be paid to the Participant in the form of Units in a lump-sum as soon as reasonably practical, but not later than 45 days, following the date on which such Phantom Units vest.  Payments of any Phantom Units that vest in accordance herewith shall be made to the Participant (or in the event of the Participant’s death, to the Participant’s estate) in whole Units in accordance with this Section 5.
(b)    DERs.    Unpaid, vested DERs shall be paid to the Participant as follows: as soon as reasonably practical, but not later than 45 days, following the date on which a Phantom Unit and related DER vests, the Participant shall be paid an amount in cash equal to the amount then credited to the DERs with respect to such Phantom Unit.
(c)    Potential Six-Month Delay.  Notwithstanding anything to the contrary in this Agreement, no amounts payable under this Agreement shall be paid to the Participant prior to the expiration of the 6-month period following his “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) (a “Separation from Service”) to the extent that the Company determines that paying such amounts prior to the expiration of such 6-month period would result in a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code.  If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of the applicable 6-month period (or such earlier date upon which such amounts can be paid under Section 409A of the Code without resulting in a prohibited distribution, including as a result of the Participant’s death), such amounts shall be paid to the Participant.
6.Tax Withholding.  Unless otherwise determined by the Committee, the Company and/or its Affiliates shall withhold Units otherwise issuable in respect of such Phantom Units having a fair market value equal to the sums required to be withheld.  In the event that Units that would otherwise be issued in payment of the Phantom Units are used to satisfy such withholding obligations, the number of Units which shall be so withheld shall be limited to the number of Units which have a fair market value (which, in the case of a broker-assisted transaction, shall be determined by the Committee, consistent with applicable provisions of the Code) on the date of withholding equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates (or such other rates that will not cause an adverse accounting consequence or cost) for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income.

7.Rights as Unit Holder.  Neither the Participant nor any person claiming under or through the Participant shall have any of the rights or privileges of a holder of Units in respect of any Units that may become deliverable hereunder unless and until certificates representing such Units shall have been issued or recorded in book entry form on the records of the Partnership or its transfer agents or registrars, and delivered in certificate or book entry form to the Participant or any person claiming under or through the Participant.

8.Partnership Agreement.  Units issued upon payment of the Phantom Units shall be subject to the terms of the Plan and the terms of the Partnership Agreement.  Upon the issuance of Units to the Participant, the Participant shall, automatically and without further action on his or her part, (i) be admitted 

to the Partnership as a Limited Partner (as defined in the Partnership Agreement) with respect to the Units, and (ii) become bound, and be deemed to have agreed to be bound, by the terms of the Partnership Agreement.    

9.Covenants.   The Participant’s services to the Company are unique, extraordinary and essential to the business of the Company and its affiliates, particularly in view of the Participant’s access to the Company’s or its affiliates’ confidential information and trade secrets.  Accordingly, in consideration of this award of Phantom Units and by accepting this award of Phantom Units, the Participant agrees as follows:

(a)    The Participant agrees that the Participant will not, without the prior written approval of the Board, at any time during the term of the Participant’s employment with the Company or its affiliates and for a period of one year following the date on which the Participant’s employment with the Company and its affiliates terminates (the “Restricted Period”), directly or indirectly, serve as an officer, director, owner, contractor, consultant, or employee of any the following organizations (or any of their respective subsidiaries or divisions) or Tesoro Corporation:  Magellan Midstream Partners, L.P.; Enbridge Energy Partners, L.P.; Western Gas Partners, L.P.; Buckeye Partners, L.P.; EnLink Midstream Partners, L.P.; DCP Midstream Partners, L.P.; NuStar Energy L.P.; ONEOK Partners.; Genesis Energy, L.P.; Holly Energy Partners, L.P. ; MPLX L.P.; HollyFrontier Corporation; Marathon Petroleum Corporation; PBF Energy, Inc.; Phillips 66 and Valero Energy Corporation, or otherwise engage in any business activity directly or indirectly competitive with the business of the Company or its affiliates (or their respective subsidiaries or divisions) as in effect from time to time.  
(b)     The Participant agrees that during the Restricted Period, the Participant will not, alone or in conjunction with another party, hire, solicit for hire, aid in or facilitate the hire, or cause to be hired, either as an employee, contractor or consultant, any individual who is currently engaged, or was engaged at any time during the six (6) month period prior such event, as an employee, contractor or consultant of the Company or any of its affiliates (or their respective subsidiaries or divisions).  
(c)    The Participant agrees and understands that the Company and its affiliates own and/or control information and material which is not generally available to third parties and which the Company or its affiliates consider confidential, including, without limitation, methods, products, processes, customer lists, trade secrets and other information applicable to its business and that it may from time to time acquire, improve or produce additional methods, products, processes, customers lists, trade secrets and other information (collectively, the “Confidential Information”).  The Participant acknowledges that each element of the Confidential Information constitutes a unique and valuable asset of the Company and its affiliates, and that certain items of the Confidential Information have been acquired from third parties upon the express condition that such items would not be disclosed to the Company and its officers and agents other than in the ordinary course of business.  The Participant acknowledges that disclosure of the Confidential Information to and/or use by anyone other than in the Company’s or its affiliates’ ordinary course of business would result in irreparable and continuing damage to the Company and its affiliates.  Accordingly, the Participant agrees to hold the Confidential Information in the strictest secrecy, and covenant that, during the term of the Participant’s employment with the Company and its affiliates or at any time thereafter, the Participant will not, without the prior written consent of the Board, directly or indirectly, allow any element of the Confidential Information to be disclosed, 

published or used, nor permit the Confidential Information to be discussed, published or used, either by himself or by any third parties, except in effecting the Participant’s duties for the Company and its affiliates in the ordinary course of business.
10.No Effect on Service.  Nothing in this Agreement or in the Plan shall be construed as giving the Participant the right to be retained in the employ or service of the Company or any Affiliate.  Furthermore, the Company and its Affiliates may at any time dismiss the Participant from employment or consulting free from any liability or any claim under the Plan or this Agreement, unless otherwise expressly provided in the Plan, this Agreement or other written agreement.

11.Severability.  If any provision of this Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, such provision shall be construed or deemed amended to conform to the applicable law or, if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of this Agreement, such provision shall be stricken as to such jurisdiction, and the remainder of this Agreement shall remain in full force and effect.

12.Amendments, Suspension and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board or the Committee.  Except as provided in the preceding sentence, this Agreement cannot be modified, altered or amended, except by an agreement, in writing, signed by both the Partnership and the Participant.

13.Code Section 409A.  None of the Phantom Units, the DERs or any amounts paid pursuant to this Agreement are intended to constitute or provide for a deferral of compensation that is subject to Section 409A of the Code.  Nevertheless, to the extent that the Committee determines that the Phantom Units or DERs may not be exempt from (or compliant with) Section 409A of the Code, the Committee may (but shall not be required to) amend this Agreement in a manner intended to comply with the requirements of Section 409A of the Code or an exemption therefrom (including amendments with retroactive effect), or take any other actions as it deems necessary or appropriate to (a) exempt the Phantom Units or DERs from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Phantom Units or DERs, or (b) comply with the requirements of Section 409A of the Code.  To the extent applicable, this Agreement shall be interpreted in accordance with the provisions of Section 409A of the Code.  Notwithstanding anything in this Agreement to the contrary, to the extent that any payment or benefit hereunder constitutes non-exempt “nonqualified deferred compensation” for purposes of Section 409A of the Code, and such payment or benefit would otherwise be payable or distributable hereunder by reason of the Participant’s termination of Service, all references to the Participant’s termination of Service shall be construed to mean a Separation from Service, and the Participant shall not be considered to have a termination of Service unless such termination constitutes a Separation from Service with respect to the Participant.

14.Adjustments; Clawback.  The Participant acknowledges that the Phantom Units are subject to modification and termination in certain events as provided in this Agreement and Section 7 of the Plan.  The Participant further acknowledges that the Phantom Units, DERs and Units issuable hereunder are subject to clawback as provided in Section 8(o) of the Plan.

15.Successors and Assigns.  The Company or the Partnership may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company and the Partnership.  Subject to the restrictions on transfer 

contained herein, this Agreement shall be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.

16.Headings.  Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Agreement or any provision hereof.

17.Acceptance.  You are required to accept this Award on-line with Fidelity at netbenefits.fidelity.com.   This Award must be accepted prior to the vesting date; otherwise, the Award will forfeit.  If you don’t accept your Award prior to your termination of employment and your termination is due to death or disability, your Award will be considered accepted and will follow the terms for these specified terminations as noted above.

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