SEC Contract Filing

Filing Date: 2017-11-08

Document Content:
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<TYPE>EX-10.6
<SEQUENCE>8
<FILENAME>d489751dex106.htm
<DESCRIPTION>EX-10.6
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<TITLE>EX-10.6</TITLE>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>Exhibit 10.6 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B><U>SUBLEASE RIGHTS AND ESCROW AGREEMENT </U></B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">This Sublease Rights and Escrow Agreement (this &#147;<U>Agreement</U>&#148;), effective as of November&nbsp;8, 2017 (the &#147;<U>Effective
Date</U>&#148;), is by and among Andeavor Logistics LP, a Delaware limited partnership (the &#147;<U>Partnership</U>&#148;), Tesoro Logistics GP, LLC, a Delaware limited liability company and the general partner of the Partnership (the
&#147;<U>General Partner</U>&#148;), Tesoro Logistics Operations LLC, a Delaware limited liability company (the &#147;<U>Operating Company</U>&#148;), and Tesoro Refining&nbsp;&amp; Marketing Company LLC, a Delaware limited liability company
(&#147;<U>TRMC</U>&#148;). The above-named entities are sometimes referred to in this Agreement individually as a &#147;<U>Party</U>&#148; and collectively as the &#147;<U>Parties</U>.&#148; </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>WHEREAS</B>, the Parties hereto have entered into that certain Contribution, Conveyance and Assumption Agreement, dated as of the date
hereof (the &#147;<U>Contribution Agreement</U>&#148;); </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>WHEREAS</B>,<B> </B>TRMC is the current tenant under that certain Aquatic
Lands Lease No. <FONT STYLE="white-space:nowrap">20-A121165,</FONT> dated August&nbsp;21, 2004 (the &#147;<U>Master Lease</U>&#148;), between TRMC and the State of Washington, acting through the Department of Natural Resources (&#147;<U>Master
Landlord</U>&#148;), covering the property in Skagit County, Washington, described in Exhibit A to the Master Lease (the &#147;<U>Anacortes Marine Terminal</U>&#148;); </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>WHEREAS</B>, the Parties entered into that certain Anacortes Marine Terminal Operating Agreement, dated as of the date hereof (the
&#147;<U>Operating Agreement</U>&#148;), pursuant to which the Operating Company will manage and operate the Anacortes Marine Terminal for TRMC on the terms and conditions included therein; and </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>WHEREAS</B>, the Parties desire to set forth the terms under which TRMC will sublease the Anacortes Marine Terminal to the Operating
Company on behalf of the General Partner and the Partnership and convey the Current Leasehold Improvements (as defined in the Operating Agreement) to the Operating Company on behalf of the General Partner and the Partnership, all on the terms and
conditions set forth herein; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>NOW, THEREFORE</B>, in consideration of the mutual covenants and agreements herein contained, the Parties
hereto agree as follows: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">1. <B>Definitions. </B>All capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the
Contribution Agreement and the Operating Agreement. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">1 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">2. <B><FONT STYLE="white-space:nowrap">Pre-Payment.</FONT> </B>$85&nbsp;million (the &#147;<U><FONT
STYLE="white-space:nowrap">Pre-Payment</FONT> Amount</U>&#148;) of the consideration paid by the Partnership to the General Partner pursuant to Section&nbsp;2.2 of the Contribution Agreement constitutes consideration related to the contribution of
the beneficial ownership of the Anacortes Marine Terminal from the General Partner to the Partnership. However, during any period for which the Partnership&#146;s use of and right to operate the Anacortes Marine Terminal pursuant to the Operating
Agreement, is more properly treated as an agreement governed by Section&nbsp;467 of the Code, the <FONT STYLE="white-space:nowrap">Pre-Payment</FONT> Amount shall be allocated according to Schedule 1. The
<FONT STYLE="white-space:nowrap">Pre-Payment</FONT> Amount shall be allocated ratably over the term of the Operating Agreement and that of the Sublease (as defined herein) when the Sublease is executed and the MTUTA (as defined herein) is
substituted for the Operating Agreement, according to the allocation schedule set forth in <U>Schedule 1</U> hereto. The Partnership and the Operating Company will recognize a fixed annual expense (Sch. 1 - Column (a)) for the use of and right to
operate the Anacortes Marine Terminal, partially offset by interest income (Sch. 1 - Column (b)), and the General Partner shall recognize a fixed annual income (Sch. 1 - Column (a)) from the use and operation of the Anacortes Marine Terminal,
partially offset by interest expense (Sch. 1 - Column (b)). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">3. <B>Sublease Rights. </B> </P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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