Exhibit 10.1

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

This CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT, dated as of July 26, 2013 (this “ Agreement ”), is by and among PHILLIPS 66 PARTNERS LP, a Delaware limited partnership (the “ Partnership ”), PHILLIPS 66 PARTNERS GP LLC, a Delaware limited liability company and the general partner of the Partnership (the “ General Partner ”), PHILLIPS 66 PARTNERS HOLDINGS LLC, a Delaware limited liability company ( “ Holdings ”), 66 PIPELINE LLC,  a Delaware limited liability company (“ 66 Pipeline ”), PHILLIPS 66 COMPANY, a Delaware corporation (“ Phillips 66 Company ”), PHILLIPS TEXAS PIPELINE COMPANY, LTD., a Texas limited partnership (“ Phillips Texas Pipeline ”), PHILLIPS 66 CARRIER LLC, a Delaware limited liability company (“ Carrier ”) and PHILLIPS 66 PIPELINE LLC, a Delaware limited liability company (“ Phillips 66 Pipeline ”) (each, a “ Party ” and collectively, the “ Parties ”).

RECITALS

WHEREAS , the General Partner and Phillips 66 Company have caused the formation of the Partnership, pursuant to the Delaware Revised Uniform Limited Partnership Act (as amended from time to time, the “ Delaware Partnership Act ”), for the purpose of owning, operating, developing and acquiring primarily fee-based crude oil, refined petroleum product and natural gas liquids pipelines and terminals and other transportation and midstream assets, as well as engaging in any other business activity that is approved by the General Partner and that lawfully may be conducted by a limited partnership organized under the Delaware Partnership Act.

WHEREAS , in order to accomplish the objectives and purposes in the preceding recital, each of the following actions has been taken prior to the date hereof:

1.             66 Pipeline filed a certificate of conversion under the Delaware Limited Liability Company Act (as amended from time to time, the “ Delaware LLC Act ”) and converted from a Delaware corporation named “66 Pipe Line Company” to a Delaware limited liability company;

2.             Phillips 66 Company formed the General Partner under the Delaware LLC Act and contributed $1,000 in exchange for all of the limited liability company interests in the General Partner;

3.             Phillips 66 Company, as the limited partner, and the General Partner, as the general partner, formed the Partnership under the Delaware Partnership Act and contributed $980 and $20, respectively, in exchange for a 98% limited partner interest (the “ Initial LP Interest ”) and a 2% general partner interest, respectively, in the Partnership;

4.             Phillips Texas Pipeline formed Carrier under the Delaware LLC Act and contributed $1,000 in exchange for all of the limited liability company interests in Carrier;

5.             Phillips Texas Pipeline formed Holdings under the Delaware LLC Act and contributed $1,000 in exchange for all of the limited liability company interests in Holdings;

6.             On or prior to June 1, 2013, pursuant to the contribution, conveyance and assumption documents set forth on Exhibit A (the “ Conveyance Documents ”), each of the following were consummated:

(a)          Phillips Texas Pipeline conveyed to Carrier, as a capital contribution, (i) its interest in all pipe and equipment and a majority of existing third party rights-of-way related to that certain pipeline referred to as the “Sweeny to Pasadena pipeline,” (ii) four of the five parcels of land held in fee by Phillips Texas Pipeline at that certain refined petroleum product terminal located in Pasadena, Texas (together with the assets described in 6(d)(iii)  and (iv)  below, the “ Pasadena Terminal ”) and (iii) one parcel of land held in fee at the Sweeny Refinery owned by Phillips 66 Company;

(b)          Phillips Texas Pipeline distributed (i) to 66 Pipeline, a 99% limited liability company interest in each of Holdings and Carrier and (ii) to Phillips 66 Pipeline, a 1% limited liability company interest in each of Holdings and Carrier, and 66 Pipeline and Phillips 66 Pipeline were each admitted as a member of each of Holdings and Carrier;

(c)           66 Pipeline distributed to Phillips 66 Pipeline (i) all of its 99% limited liability company interest in Holdings and (ii) all of its 99% limited liability company interest in Carrier;

(d)          Phillips 66 Pipeline conveyed to Carrier, as a capital contribution, each of the following:

(i)              (A) all pipe and equipment and all existing third-party rights-of-way in that certain Wood River to Hartford refined petroleum products pipeline and that certain Hartford to Explorer refined petroleum products pipeline (collectively, the “ Hartford Connector Pipelines ”) and the refined petroleum products terminal and storage system located in Hartford, Illinois (the “ Hartford Terminal ” and, together with the Hartford Connector Pipelines, the “ Hartford Connector Products System ”); (B) all third-party contracts related to the Hartford Connector Products System; and (C) all equipment, supplies and inventories of spare parts related to the Hartford Connector Products System;

(ii)           (A) all pipe and existing third-party rights-of-way in that certain Clifton Ridge to Lake Charles 20-inch crude oil pipeline; (B) all pipe and existing third-party rights-of-way in that certain Shell to Clifton Ridge crude oil pipeline; (C) all pipe and existing third-party rights-of-way in that certain Pecan Grove to Clifton Ridge crude oil pipeline (together with the pipelines described in clauses (ii)(A) and (B), the “ Clifton Ridge Crude Pipeline System ”); (D) all third-party contracts related to the Clifton Ridge Crude Pipeline System; and (E) all equipment, supplies and inventories of spare parts related to the Clifton Ridge Pipeline System;

(iii)        (A) all third-party contracts related to the assets comprising the Pasadena Terminal and (B) all equipment, supplies and inventories of spare parts related to the Pasadena Terminal; and

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(iv)       (A) one tract of land held in fee at the Hartford Terminal and (B) one tract of land held in fee at the Pasadena Terminal.

(e)           Phillips 66 Pipeline conveyed to Holdings, as a capital contribution, (i) all third-party contracts related to the assets comprising that certain crude oil terminal located on the Calcasieu River approximately ten miles from Phillips 66 Company’s Lake Charles Refinery (the “ Clifton Ridge Terminal ”) and the assets comprising that certain crude oil terminal, including a barge dock and related assets, located adjacent to the Clifton Ridge Terminal (the “ Pecan Grove Terminal ”) and (ii) all equipment, supplies and inventories of spare parts related to the Clifton Ridge Terminal and Pecan Grove Terminal;

(f)            Phillips 66 Pipeline conveyed to Holdings, as a capital contribution, 100% of the limited liability company interests in Carrier, and Holdings was admitted as a member of Carrier;

(g)           Phillips 66 Pipeline distributed to Phillips 66 Company 100% of the limited liability company interests in Holdings, and Phillips 66 Company was admitted as a member of Holdings;

(h)          Phillips 66 Company conveyed to Holdings, as a capital contribution, (i) the Clifton Ridge Terminal and the Pecan Grove Terminal, other than certain parcels of land on which Phillips 66 Company’s Sulphur lubricants facility is located and a certain right-of-way for a related lubricants pipeline, and (ii) goodwill;

(i)              Phillips 66 Company conveyed to Carrier, on behalf of Holdings, as a capital contribution, (A) the remainder of the existing third-party rights-of-way in the pipeline corridor related to the Sweeny to Pasadena pipeline; (B) the remainder of the existing third-party rights-of-way in the pipeline corridor related to the Clifton Ridge to Lake Charles 20-inch crude oil pipeline; (C) certain fee property in the pipeline corridor related to the Sweeny to Pasadena pipeline; (D) all pipeline and existing third-party rights-of-way extending from the barge dock at the Hartford Terminal to the other assets at the Hartford Terminal; and (E) all parcels of land held in fee by Phillips 66 Company at the Hartford Terminal, other than certain parcels of land on which Phillips 66 Company’s Hartford lubricants facility is located;

7.             Effective as of June 1, 2013, (a) pursuant to that certain Right of Way Agreement, dated as of May 31, 2013, by and between WRB Refining LP, a Delaware limited partnership (“ WRB Refining ”), and Carrier, WRB Refining granted to Carrier an easement for the Wood River to Hartford refined petroleum products pipeline and (b) pursuant to that certain Partial Assignment and Assumption and Bill of Sale Agreement, dated as of June 1, 2013, by and between WRB Refining and Carrier, WRB Refining assigned to Carrier an easement for the Hartford Connector Products System;

8.             Effective as of June 7, 2013, the Partnership, as borrower, and Holdings, as initial guarantor, entered into a $250 million senior unsecured revolving credit facility with RBS Securities Inc., as a joint lead arranger, JPMorgan Chase Bank, N.A., as the administrative agent,

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and several other commercial lending institutions in certain other roles and as lenders and letter of credit issuing banks; and

WHEREAS , concurrently with the consummation of the transactions contemplated hereby, each of the matters provided for in Article II will occur in accordance with its respective terms;

WHEREAS , if the Over-Allotment Option (as defined herein) is exercised, each of the matters provided for in Article III will occur in accordance with its respective terms; and

WHEREAS , the stockholders, members or partners of the Parties have taken or caused to be taken all corporate, limited liability company and partnership action, as the case may be, required to approve the transactions contemplated by this Agreement.

NOW, THEREFORE , in consideration of the mutual covenants, representations, warranties and agreements herein contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms below:

“ Closing Date ” means the date on which the closing of the purchase and sale of Common Units to the Underwriters pursuant to the Underwriting Agreement occurs.

“ Closing Time ” means the time on the Closing Date at which the closing of the purchase and sale of Common Units to the Underwriters pursuant to the Underwriting Agreement occurs.

“ Common Unit ” means a common unit representing a limited partner interest in the Partnership having the rights set forth in the Partnership Agreement.

“ Company Group ” means Phillips 66 Company, 66 Pipeline, Phillips Texas Pipeline, and Phillips 66 Pipeline.

“ Effective Time ” means 12:01 a.m. Eastern Time on the Closing Date.

“ General Partner Unit ” means a general partner unit representing a fractional part of the general partner interest in the Partnership having the rights set forth in the Partnership Agreement.

“ Offering ” means the initial public offering of the Partnership’s Common Units pursuant to the Registration Statement.

“ Omnibus Agreement ” means that certain Omnibus Agreement, dated as of the Closing Date, among Phillips 66 Company, Phillips 66 Pipeline, the General Partner and the Partnership, as such agreement may be amended, supplemented or restated from time to time.

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“ Option Period ” means the period from the Closing Date to the date that is thirty days after the Closing Date.

“ Option Units ” has the meaning set forth in Article III .

“ Original Partnership Agreement ” means that certain Agreement of Limited Partnership of the Partnership, dated as of February 21, 2013.

“ Over-Allotment Option ” has the meaning assigned to it in the Partnership Agreement.

“ Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of the Closing Date.

“ Partnership Group ” means the Partnership, the General Partner, Holdings and Carrier.

“ Registration Statement ” means the Registration Statement on Form S-1 filed with the United States Securities and Exchange Commission (Registration No. 333-187582), as amended.

“ Subordinated Unit ” means a subordinated unit representing a limited partner interest in the Partnership having the rights set forth in the Partnership Agreement.

“ Underwriters ” means the members of the underwriting syndicate listed in the Underwriting Agreement.

“ Underwriting Agreement ” means the firm commitment underwriting agreement entered into by and among the Partnership and the underwriters named in the Registration Statement with respect to the Offering.

ARTICLE II

CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS

Each of the following transactions set forth in Sections 2.1 through 2.6 shall be completed as of the Effective Time in the order set forth herein:

2.1          Execution of the Partnership Agreement .  The General Partner and Phillips 66 Company, as the organizational limited partner, shall amend and restate the Original Partnership Agreement by executing the Partnership Agreement in substantially the form included in Appendix A to the Registration Statement, with such changes as the General Partner and Phillips 66 Company may agree.

2.2          Contribution of QCR Balances . Phillips 66 Company hereby contributes its net receivable quick cash recall (“ QCR ”) balances to Holdings, as a capital contribution, such that each of Holdings and Carrier (through a further capital contribution from Holdings) can settle their respective individual net payable QCR balances under the existing treasury services

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management agreements in place between Phillips 66 Company and each of Holdings and Carrier on a cashless basis.

2.3          Prepayment of Certain Projects . (a) Phillips 66 Company hereby contributes $3.0 million to Holdings, as a capital contribution, and (b) Holdings hereby contributes $0.3 million to Carrier, as a capital contribution, in each case for the prepayment of certain projects to be completed by Holdings and Carrier, respectively, as contemplated in Article VIII of the Omnibus Agreement.

2.4          Contribution of the Holdings Interest to the General Partner .  Phillips 66 Company hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to the General Partner a portion of its limited liability company interests in Holdings with a value equal to 2% of the equity value of the Partnership immediately after the Closing (the “ Holdings Interest ”), and the General Partner hereby accepts such Holdings Interest as a capital contribution from Phillips 66 Company. Notwithstanding any provision of the limited liability company agreement of Holdings (the “ Holdings LLC Agreement ”) to the contrary, the General Partner is hereby admitted to Holdings as a member of Holdings holding the Holdings Interest and hereby agrees that it is bound by the Holdings LLC Agreement.  Phillips 66 Company hereby continues as a member of Holdings with respect to the portion of its limited liability company interest in Holdings not transferred to the General Partner.

2.5          Contribution of the Holdings Interest to the Partnership .  The General Partner hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to the Partnership the Holdings Interest in exchange for (a) a continuation of the General Partner’s 2% general partner interest in the Partnership (represented by 1,437,433 General Partner Units) and (b) the issuance to the General Partner of all of the limited partner interests in the Partnership classified as “Incentive Distribution Rights” under the Partnership Agreement, and the Partnership hereby accepts such Holdings Interest.  Notwithstanding any provision of the Holdings LLC Agreement to the contrary, the Partnership is hereby admitted to Holdings as a member of Holdings and hereby agrees that it is bound by the Holdings LLC Agreement.   Immediately following such contribution of the Holdings Interest, Phillips 66 Company shall and does hereby continue as a member of Holdings, and the General Partner shall and does hereby cease to be a member of Holdings and shall thereupon cease to have or exercise any right or power as a member of Holdings, and Holdings is hereby continued without dissolution.

2.6          Additional Contribution of Holdings Interests .  Phillips 66 Company hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to the Partnership (a) all right, title and interest in and to all of Phillips 66 Company’s remaining limited liability company interests in Holdings in exchange for (a) 16,328,362 Common Units representing a 22.7% limited partner interest in the Partnership, and (b) 35,217,112 Subordinated Units representing a 49.0% limited partner interest in the Partnership, and the Partnership hereby accepts such limited liability company interests.  Immediately following such contribution of such limited liability company interests, the Partnership shall and does hereby continue as the sole member of Holdings and Phillips 66 Company shall and does hereby cease to be a member of Holdings and shall thereupon cease to have or exercise any right or power as a member of Holdings, and Holdings is continued without dissolution.  The Parties acknowledge and agree

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that, pursuant to and subject to the terms and conditions of the Omnibus Agreement, and in consideration of the Partnership’s issuance of Common Units and Subordinated Units to Phillips 66 Company under this Section 2.6 , Phillips 66 Company has granted to the Partnership Group a nontransferable, nonexclusive, royalty-free right and license to use the name “Phillips 66” (the “ Name ”) and any other trademarks owned by Company that contain the Name, the Name together with the distinctive shield graphic, the shield graphic alone, or the name “Phillips 66 Partners” together with the partial outline shield graphic.

Each of the following transactions set forth in Sections 2.7 through 2.9 shall be completed as of the Closing Time, and in any event only after completion of the transactions set forth in Sections 2.1 through 2.6 , in the order set forth herein:

2.7          Public Cash Contribution .  The Parties acknowledge that, in connection with the Offering, public investors, through the Underwriters, have made a capital contribution to the Partnership of $377,775,000 in cash in exchange for 16,425,000 Common Units (the “ Firm Units ”) representing a 22.9% limited partner interest in the Partnership, and new limited partners are being admitted to the Partnership in connection therewith.

2.8          Payment of Transaction Expenses and Retention of Proceeds by the Partnership .  The Parties acknowledge (a) the payment by the Partnership, in connection with the closing of the Offering, of transaction expenses in the amount of approximately $4.7 million, excluding underwriting discounts of $22,666,500 in the aggregate but including (i) a structuring fee of 0.375% of the gross proceeds of the Offering payable to certain of the Underwriters (the “ Structuring Fee ”), (ii) an advisory fee of $625,000 payable to Evercore Group L.L.C. and (iii) reimbursement of certain expenses by the Underwriters, and (b) the retention by the Partnership of $351.4 million for general partnership purposes, including (i) to prefund potential future acquisitions from Phillips 66 Company and its affiliates and third parties and potential future expansion capital expenditures and (ii) to fund ongoing working capital needs of Holdings.

2.9          Redemption of the Initial LP Interest from the Partnership and Return of Initial Capital Contribution .  The Partnership hereby redeems the Initial LP Interest held by Phillips 66 Company and hereby refunds and distributes to Phillips 66 Company the initial contribution, in the amount of $980, made by Phillips 66 Company in connection with the formation of the Partnership, along with any interest or other profit that resulted from the investment or other use of such initial contribution.

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ARTICLE III

EXERCISE OF OVER-ALLOTMENT OPTION

If the Over-Allotment Option is exercised in whole or in part, the Underwriters will contribute additional cash to the Partnership in exchange for up to an additional 2,463,750 Common Units representing a 3.4% limited partner interest in the Partnership (the “ Option Units ”) at the Offering price per Common Unit set forth in the Registration Statement, net of underwriting discounts and the Structuring Fee.  Upon the expiration of the Option Period, any Option Units not purchased by the Underwriters pursuant to the Underwriting Agreement will be issued on a deferred basis to Phillips 66 Company as part of the contribution transactions described in Section 2.6 .

ARTICLE IV

FURTHER ASSURANCES

From time to time after the date hereof, and without any further consideration, each of the Parties shall execute, acknowledge and deliver additional instruments, notices and other documents, and will do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate to more fully and effectively carry out the purposes and intent of this Agreement.  Without limiting the generality of the foregoing, the Parties acknowledge that the Parties have used their good faith efforts to identify all of the assets being contributed to the Partnership Group as required in connection with this Agreement.  However, due to the age of some of the assets and the difficulties in locating appropriate data with respect to some of the assets, it is possible that assets intended to be contributed ultimately to the Partnership Group were not identified and therefore are not included in the assets contributed to the Partnership Group as of the Effective Time.  It is the express intent of the Parties that the Partnership Group own all assets necessary to operate the assets that are identified in this Agreement and in the Registration Statement.  To the extent that any assets were not identified but are necessary to the operation of the assets that are so identified in this Agreement and in the Registration Statement, then the intent of the Parties is that all such unidentified assets are intended to be conveyed to the Partnership Group pursuant to this Agreement.  To the extent any such assets are identified at a later date, the Parties shall take all appropriate action required in order to convey such assets to the Partnership or any applicable Partnership Group subsidiaries.  Likewise, to the extent that any assets that are conveyed to the Partnership Group hereunder are later identified by the Parties as assets that the Parties did not intend to convey to the Partnership Group as reflected in the Registration Statement, the Parties shall take all appropriate action required to convey such assets to the appropriate Company Group member.

Furthermore, without limiting any liabilities of the Company Group or other remedies of the Partnership Group applicable under this Agreement or any other agreements, if and to the extent that the valid, complete and perfected transfer or assignment of any assets by any member of the Company Group to any member of the Partnership Group or the acquisition of any assets from any member of the Company Group by any member of the Partnership Group would be a violation of applicable law, or require any additional consents, approvals or notifications in connection with the transfer of such assets by any member of the Company Group to any member of the Partnership Group that have not been obtained or made by the Effective Time,

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then, unless the Parties shall otherwise mutually determine, the transfer or assignment of such assets to such member of the Partnership Group or the assumption of such assets by such member of the Partnership Group, as the case may be, shall be automatically deemed deferred and any such purported transfer, assignment or assumption shall be null and void until such time as all legal impediments are removed or such consents, approvals and notifications have been obtained or made.  Notwithstanding the foregoing, in such event the Company Group shall (a) hold such assets in trust for the benefit of the Partnership Group, (b) not transfer or assign such assets, in whole or in part, other than with the prior consent of the Partnership, and (c) use its reasonable best efforts to assure that each member of the Partnership Group receives all of the benefits of the assets attempted to have been transferred to it until such time as the attempted transfer is complete, and each member of the Partnership Group shall bear all costs associated with such assets (except costs associated with the attempted transfer or perfecting such transfer, and subject to offset of any benefits of the assets not received by the Partnership Group against associated costs incurred by the Company Group ) as if the transfer had been valid and complete.

ARTICLE V

ORDER OF COMPLETION AND EFFECTIVENESS OF TRANSACTIONS

5.1                                Order of Completion of Transactions .  The transactions provided for in Sections 2.1 through 2.6 shall be completed as of the Effective Time in the order set forth in Article II .  The transactions provided for in Sections 2.7 through 2.9 shall be completed as of the Closing Time in the order set forth in Article II .  Following the completion of the transactions set forth in Article II , the transactions provided for in Article III , if they occur, shall be completed.

5.2                                Effectiveness of Transactions .  Notwithstanding anything contained in this Agreement to the contrary, (a) none of the provisions of Sections 2.1 through 2.6 shall be operative or have any effect until the Effective Time and (b) none of the provisions of Sections 2.7 through 2.9 or Article III shall be operative or have any effect until the Closing Time, at which respective time all such applicable provisions shall be effective and operative in accordance with Section 5.1 without further action by any Party.

ARTICLE VI

MISCELLANEOUS

6.1                                Costs .  Except for the transaction expenses set forth in Section 2.8 , Holdings shall pay all expenses, fees and costs, including, but not limited to, all sales, use and similar taxes arising out of the contributions, distributions, conveyances and deliveries to be made under Article II and shall pay all documentary, filing, recording, transfer, deed and conveyance taxes and fees required in connection therewith.  In addition, Holdings shall be responsible for all costs, liabilities and expenses (including court costs and reasonable attorneys’ fees) incurred in connection with the implementation of any conveyance or delivery pursuant to Article IV (to the extent related to any of the contributions, distributions, conveyances and deliveries to be made under Article II ).

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6.2                                Headings; References; Interpretation .  All Article and Section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof.  The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, and not to any particular provision of this Agreement.  All references herein to Articles and Sections shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement.  All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders, and the singular shall include the plural and vice versa.  The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation,” “but not limited to” or other words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.

6.3                                Successors and Assigns .  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

6.4                                No Third Party Rights .  The provisions of this Agreement are intended to bind the Parties as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies, and no person is or is intended to be a third party beneficiary of any of the provisions of this Agreement.

6.5                                Counterparts .  This Agreement may be executed in any number of counterparts with the same effect as if all Parties had signed the same document.  All counterparts shall be construed together and shall constitute one and the same instrument.

6.6                                Applicable Law .  This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.  EACH OF THE PARTIES HERETO AGREES THAT THIS AGREEMENT INVOLVES AT LEAST U.S. $100,000.00 AND THAT THIS AGREEMENT HAS BEEN ENTERED INTO IN EXPRESS RELIANCE UPON 6 Del. C. § 2708.  EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES (i) TO BE SUBJECT TO THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND OF THE FEDERAL COURTS SITTING IN THE STATE OF DELAWARE, AND (ii) TO THE EXTENT SUCH PARTY IS NOT OTHERWISE SUBJECT TO SERVICE OF PROCESS IN THE STATE OF DELAWARE, TO APPOINT AND MAINTAIN AN AGENT IN THE STATE OF DELAWARE AS SUCH PARTY’S AGENT FOR ACCEPTANCE OF LEGAL PROCESS AND TO NOTIFY THE OTHER PARTIES OF THE NAME AND ADDRESS OF SUCH AGENT.

6.7                                Severability .  If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement.  Instead, this Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid and an equitable adjustment shall

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be made and necessary provision added so as to give effect to the intention of the Parties as expressed in this Agreement at the time of execution of this Agreement.

6.8                                Amendment or Modification .  This Agreement may be amended or modified from time to time only by the written agreement of all the Parties.  Each such instrument shall be reduced to writing and shall be designated on its face as an amendment to this Agreement.  Notwithstanding anything in the foregoing to the contrary, any amendment executed by the Partnership or any of its subsidiaries shall not be effective unless and until the execution of such amendment has been approved by the conflicts committee of the General Partner’s board of directors.

6.9                                Integration .  This Agreement and the instruments referenced herein and in the exhibits attached hereto supersede all previous understandings or agreements among the parties, whether oral or written, with respect to the subject matter of this Agreement and such instruments.  This Agreement and such instruments contain the entire understanding of the Parties with respect to the subject matter hereof and thereof.  There are no unwritten oral agreements between the parties.  No understanding, representation, promise or agreement, whether oral or written, is intended to be or shall be included in or from part of this Agreement unless it is contained in a written amendment hereto executed by the parties hereto after the date of this Agreement.

6.10                         Deed; Bill of Sale; Assignment .  To the extent required and permitted by applicable law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of the assets and interests referenced herein.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the Parties to this Agreement have caused it to be duly executed as of the date first above written.

[Second signature page follows.]

First Signature page to Contribution Agreement

Second Signature page to Contribution Agreement

Exhibit A

Conveyance Documents

1.                                       Action of Contribution with Limited Warranty (Calcasieu Parish, Louisiana), dated May 31, 2013, by and between Phillips 66 Company and Holdings.

2.                                       Right of Way Agreement (Calcasieu Parish, Louisiana), dated May 31, 2013, by and between Phillips 66 Company and Carrier (Clifton Ridge to Westlake pipeline).

3.                                       Partial Assignment and Assumption and Bill of Sale Agreement (Calcasieu Parish, Louisiana), dated as of May 31, 2013, by and between Phillips 66 Company and Carrier (Clifton Ridge to Westlake pipeline).

4.                                       Assignment and Assumption and Bill of Sale Agreement (Calcasieu Parish, Louisiana), dated as of May 31, 2013, by and between Phillips 66 Company and Carrier.

5.                                       Assignment and Assumption and Bill of Sale Agreement (Calcasieu Parish, Louisiana), dated as of May 31, 2013, by and between Phillips 66 Pipeline and Carrier.

6.                                       Action of Contribution with Limited Warranty (Calcasieu Parish, Louisiana), dated May 31, 2013, by and between Phillips 66 Pipeline and Carrier.

7.                                       Right of Way Agreement (Calcasieu Parish, Louisiana), effective as of June 1, 2013, by and between Holdings and Carrier.

8.                                       Special Warranty Deed (Madison County, Illinois), dated May 31, 2013, by and between Phillips 66 Company and Carrier.

9.                                       Quitclaim Deed (Madison County, Illinois), dated May 31, 2013, by and between Phillips 66 Company and Carrier.

10.                                Assignment and Assumption and Bill of Sale Agreement (Madison County, Illinois), dated as of May 31, 2013, by and between Phillips 66 Company and Carrier.

11.                                Assignment and Assumption and Bill of Sale Agreement (Madison County, Illinois), dated as of May 31, 2013, by and between Phillips 66 Pipeline and Carrier.

12.                                Assignment and Assumption and Bill of Sale Agreement (Madison County, Illinois), dated as of May 31, 2013, by and between Phillips 66 Pipeline and Carrier.

13.                                Partial Assignment and Assumption and Bill of Sale Agreement (Madison County, Illinois), dated as of May 31, 2013, by and between Phillips 66 Pipeline and Carrier.

14.                                Special Warranty Deed (Madison County, Illinois), dated as of May 31, 2013, by and between Phillips 66 Pipeline and Carrier.

15.                                Right of Way Agreement (Madison County, Illinois), dated effective as of June  1, 2013, by and between WRB Refining and Carrier.

16.                               Partial Assignment and Assumption and Bill of Sale Agreement (Harris County, Texas), dated as of May 31, 2013, by and between Phillips 66 Company and Carrier.

17.                                Special Warranty Deed (Harris County, Texas), dated as of May 31, 2013, by and between Phillips 66 Company and Carrier.

Exhibit A-1

18.                                Partial Assignment and Assumption and Bill of Sale Agreement (Harris County, Texas), dated as of May 31, 2013, by and between Phillips 66 Pipeline and Carrier.

19.                                Special Warranty Deed (Harris County, Texas), dated as of May 31, 2013, by and between Phillips 66 Pipeline and Carrier.

20.                                Assignment and Assumption and Bill of Sale Agreement (Harris County, Texas), dated as of May 31, 2013, by and between Phillips Texas Pipeline and Carrier.

21.                                Special Warranty Deed (Harris County, Texas), dated as of May 31, 2013, by and between Phillips Texas Pipeline and Carrier.

22.                                Assignment and Assumption and Bill of Sale Agreement (Brazoria County, Texas), dated as of May 31, 2013, by and between Phillips 66 Company and Carrier.

23.                                Special Warranty Deed (Brazoria County, Texas), dated as of May 31, 2013, by and between Phillips 66 Company and Carrier.

24.                                Partial Assignment and Assumption and Bill of Sale Agreement (Brazoria County, Texas), dated as of May 31, 2013, by and between Phillips 66 Pipeline and Carrier.

25.                                Assignment and Assumption and Bill of Sale Agreement (Brazoria County, Texas), dated as of May 31, 2013, by and between Phillips Texas Pipeline and Carrier.

26.                                Special Warranty Deed (Brazoria County, Texas), dated as of May 31, 2013, by and between Phillips Texas Pipeline and Carrier.

27.                                Contribution, Conveyance and Assumption Agreement, dated as of May 31, 2013, by and between Phillips 66 Pipeline and Holdings.

28.                                Distribution Agreement, dated as of May 31, 2013, by and between 66 Pipeline and Phillips 66 Pipeline.

29.                                Distribution Agreement, dated as of May 31, 2013, by and between Phillips Texas Pipeline and 66 Pipeline.

30.                                Distribution Agreement, dated as of May 31, 2013, by and between Phillips Texas Pipeline and Phillips 66 Pipeline.

31.                                Distribution Agreement, dated as of May 31, 2013, by and between Phillips 66 Pipeline and Phillips 66 Company.

32.                                Partial Assignment and Assumption and Bill of Sale Agreement, dated as of June 1, 2013, by and between WRB Refining LP and Carrier.

Exhibit A-2

Exhibit 10.2

OMNIBUS AGREEMENT

by and among

PHILLIPS 66 COMPANY,

PHILLIPS 66 PIPELINE LLC,

PHILLIPS 66 PARTNERS LP,

PHILLIPS 66 PARTNERS HOLDINGS, LLC,

PHILLIPS 66 CARRIER LLC

and

PHILLIPS 66 PARTNERS GP LLC

Contents

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OMNIBUS AGREEMENT

This OMNIBUS AGREEMENT (“ Agreement ”) is entered into as of the Effective Date by and among PHILLIPS 66 COMPANY , a Delaware corporation (“ Company ”), on behalf of itself and the other Phillips 66 Entities (as defined herein), PHIILLIPS 66 PIPELINE LLC , a Delaware limited liability company (“ Pipeline ”), PHIILLIPS 66 PARTNERS LP , a Delaware limited partnership (the “ Partnership ”), PHILLIPS 66 PARTNERS HOLDINGS LLC , a Delaware limited liability company (“ Holdings ”), PHILLIPS 66 CARRIER LLC , a Delaware limited liability company (“ Carrier ”), and PHILLIPS 66 PARTNERS GP LLC , a Delaware limited liability company (the “ General Partner ”).

Recitals

WHEREAS , the Parties (as defined herein) desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article III , with respect to certain indemnification obligations of the Parties to each other.

WHEREAS , the Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article IV , with respect to the amount to be paid by the Partnership for the operational and administrative support services to be performed by the General Partner and its Affiliates (as defined herein) for and on behalf of the Partnership Group (as defined herein).

WHEREAS , the Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article V , with respect to the Partnership Group’s right of first offer with respect to the ROFO Assets (as defined herein).

WHEREAS , the Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article VI , with respect to the granting of a license to the Partnership Group and the General Partner to use the “Phillips 66” name and any other trademarks owned by the Company that contain such name.

WHEREAS, the Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article VII , with respect to certain projects that will be undertaken by the Partnership Group after the Effective Date and the prepayment by Company of certain amounts relating to such projects.

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

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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)                                  “ Affiliate ” has the meaning ascribed to that term in the Partnership Agreement.

(b)                                  “ Agreement ” means this Omnibus Agreement, together with all exhibits and schedules attached hereto, as the same may be amended, supplemented or restated from time to time in accordance with the provisions hereof.

(c)                                   “ Assets ” means all gathering pipelines, transportation pipelines, storage tanks, trucks, truck racks, terminal facilities, offices and related equipment, real estate and other assets, or portions thereof, conveyed, contributed or otherwise transferred or intended to be conveyed, contributed or otherwise transferred pursuant to the Contribution Agreement to any member of the Partnership Group, or owned by, leased by or necessary for the operation of the business, properties or assets of any member of the Partnership Group, prior to or as of the Effective Date.

(d)                                  “ Business Day ” means any Day except for Saturday, Sunday or a legal holiday in Texas.

(e)                                   “ Company ” has the meaning ascribed to that term in the introductory paragraph.

(f)                                    “ Contribution Agreement ” means that certain Contribution, Conveyance and Assumption Agreement, dated as of the Effective Date, among Company, the General Partner, the Partnership, Holdings, 66 Pipeline LLC, Phillips Texas Pipeline Company Ltd., Carrier and Phillips 66 Pipeline LLC, together with the additional conveyance documents and instruments contemplated or referenced thereunder, as such may be amended, supplemented or restated from time to time.

(g)                                   “ 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.

(h)                                  “ Covered Environmental Losses ” has the meaning ascribed to that term in Section 3.01(a) .

(i)                                      “ Covered Property Losses ” has the meaning ascribed to that term in Section 3.02 .

(j)                                     “ 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.

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

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(l)                                      “ Environmental Laws ” means all federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally enforceable requirements and rules of common law now or hereafter in effect, relating to (a) pollution or protection of human health, natural resources, wildlife and the environment including, without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other environmental conservation and protection laws and the regulations promulgated pursuant thereto, and any state or local counterparts, each as amended from time to time, and (b) the generation, manufacture, processing, distribution, use, treatment, storage, transport, or handling of any hazardous wastes.

(m)                              “ Environmental Permit ” means any permit, approval, identification number, license, registration, certification, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law, including applications for renewal of such permits in which the application allows for continued operation under the terms of an expired permit.

(n)                                  “ General Partner ” has the meaning ascribed to that term in the introductory paragraph.

(o)                                  “ 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.

(p)                                  “ Hazardous Substance ” means (a) any substance, whether solid, liquid, gaseous, semi-solid or any combination thereof, that is designated, defined or classified as a hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or hazardous substance, or terms of similar meaning, or that is otherwise regulated under any Environmental Law, including, without limitation, any hazardous substance as defined under the Comprehensive Environmental Response, Compensation, and Liability Act, as amended, and including friable asbestos and lead containing paints or coatings, radioactive materials, and polychlorinated biphenyls, and (b) petroleum, oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other refined petroleum hydrocarbons, solely to the extent regulated under applicable Environmental Laws.

(q)                                  “ Indemnified Party ” means any applicable Partnership Group Member or any applicable Phillips 66 Entity, as the case may be, in its capacity as the party entitled to indemnification in accordance with Article III .

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(r)                                     “ Indemnifying Party ” means either the Partnership or Company, as the case may be, in its capacity as the Party from which indemnification may be sought in accordance with Article III .

(s)                                    “ 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.

(t)                                     “ License ” has the meaning ascribed to that term in Section 6.01 .

(u)                                  “ Limited Partner ” has the meaning ascribed to that term in the Partnership Agreement.

(v)                                  “ Losses ” means any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent.

(w)                                “ Marks ” has the meaning ascribed to that term in Section 6.01 .

(x)                                  “ 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.

(y)                                  “ Name ” has the meaning ascribed to that term in Section 6.01 .

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

(aa)                           “ Operational and Administrative Support Fee ” has the meaning ascribed to that term in Section 4.01(a) .

(bb)                           “ Operational Services Agreement ” means that certain Operational Services Agreement, dated as of the Effective Date, among Carrier, Holdings and Phillips 66 Pipeline LLC, as such may be amended, supplemented or restated from time to time.

(cc)                             “ Parties ” means Company, Pipeline, the Partnership, Holdings, Carrier and the General Partner, collectively.

(dd)                           “ Partnership ” has the meaning ascribed to that term in the introductory paragraph.

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(ee)                             “ Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of the Effective Date, as such agreement is in effect on the Effective Date, to which reference is hereby made for all purposes of this Agreement.

(ff)                               “ Partnership Change of Control ” means Company ceases to Control the general partner of the Partnership.

(gg)                             “ Partnership Group ” means the Partnership and any of its Subsidiaries, treated as a single consolidated entity.

(hh)                           “ Partnership Group Member ” means any member of the Partnership Group.

(ii)                                   “ Partnership Interest ” has the meaning ascribed to that term in the Partnership Agreement.

(jj)                                 “ Party ” means Company, Pipeline, the Partnership, Holdings, Carrier or the General Partner, individually; and “ Parties ” means Company, Pipeline, the Partnership, Holdings, Carrier and the General Partner, collectively.

(kk)                           “ 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.

(ll)                                   “ Phillips 66 Entities ” means Company and any Person Controlled, directly or indirectly, by Company other than the General Partner or a Partnership Group Member; and “ Phillips 66 Entity ” means any of the Phillips 66 Entities.

(mm)                   “ Pipeline ” has the meaning ascribed to that term in the introductory paragraph.

(nn)                           “ PPI-FG ” has the meaning ascribed to that term in Section 4.01(b) .

(oo)                           “ Prefunded Projects ” has the meaning ascribed to that term in Section 7.01.

(pp)                           “ Proposed Transaction ” has the meaning ascribed to that term in Section 5.02(a) .

(qq)                           “ Prudent Industry Practice ” means such practices, methods, acts, techniques, and standards as are in effect at the time in question that are required by and in accordance with applicable Law and are consistent with the higher of (a) the standards generally followed by reputable owners and operators of crude oil and refined petroleum products pipelines and terminals in the United States, including the inland marine terminal industry, and (b) the standards applied or followed by Company or its Affiliates as owners or operators of such assets, or by the Partnership Group or its Affiliates as owners or operators of such assets.

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(rr)                                 “ Registration Statement ” means the Registration Statement on Form S-1 filed by the Partnership with the United States Securities and Exchange Commission (Registration No. 333-187582), as amended.

(ss)                               “ Retained Assets ” means all gathering pipelines, transportation pipelines, storage tanks, trucks, truck racks, terminal facilities, offices and related equipment, real estate and other related assets, or portions thereof, owned by any of the Phillips 66 Entities that were not directly or indirectly conveyed, contributed or otherwise transferred to the Partnership Group pursuant to the Contribution Agreement or the other documents referred to in the Contribution Agreement.

(tt)                                 “ ROFO Assets ” means Pipeline’s limited liability company interest in each of (i) Phillips 66 Sand Hills LLC, a Delaware limtied liability company, and (ii) Phillips 66 Southern Hills LLC, a Delaware limited liability company.

(uu)                           “ ROFO Notice ” has the meaning ascribed to that term in Section 5.02(a) .

(vv)                           “ ROFO Period ” has the meaning ascribed to that term in Section 5.01(a) .

(ww)                       “ ROFO Response ” has the meaning ascribed to that term in Section 5.02(a) .

(xx)                           “ 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.

(yy)                           “ Tax Sharing Agreement ” means that certain Tax Sharing Agreement, dated as of the Effective Date, between the Partnership and Phillips 66, a Delaware corporation, as such may be amended, supplemented or restated from time to time.

(zz)                             “ Transfer ” means to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of, whether in one or a series of transactions.

(aaa)                    “ Services ” has the meaning ascribed to that term in Section 4.01(a) .

(bbb)                    “ Subsidiary ” has the meaning ascribed to that term in the Partnership Agreement.

(ccc)                       “ Voting Stock ” means securities of any class of a Person entitling the holders thereof to vote on a regular basis in the election of members of the board of directors or other governing body of such Person.

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

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word “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  All references to Articles, Sections, Exhibits and schedules shall be deemed to be references to Articles and Sections of, and Exhibits and schedules to, this Agreement unless the context requires otherwise.

ARTICLE II.                      TERM

Section 2.01                              Term and Termination .   This Agreement shall commence on the Effective Date and shall continue in effect until terminated by a written agreement executed by all of the Parties.  At any time following the occurrence of a Partnership Change of Control, either Company or the Partnership may terminate this Agreement upon written Notice to the other and such termination shall be effective at the later of such Partnership Change of Control and the date specified in such Notice; provided, however, that the Parties’ indemnification obligations under Article III shall, to the fullest extent permitted by law, survive the termination of this Agreement in accordance with their respective terms.

ARTICLE III.                 INDEMNITY

Section 3.01                              Environmental Indemnification .

(a)                                  Subject to Section 3.01(b) , Company and Pipeline shall indemnify, defend and hold harmless the Partnership Group from and against any Losses suffered or incurred by the Partnership Group, directly or indirectly, or as a result of any claim by a third party, by reason of or arising out of the following (collectively, “ Covered Environmental Losses ”):

(i)              any violation or correction of a violation of Environmental Laws associated with or arising from the ownership or operation of the Assets;

(ii)           any event, condition or matter associated with or arising from the ownership or operation of the Assets (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets at non-Asset locations) that requires investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action under Environmental Laws, including, without limitation, (A) the cost and expense of any such activity, (B) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense of any environmental or toxic tort pre-trial, trial or appellate legal or litigation support work;

(iii)        any environmental event, condition or matter associated with or arising from the Retained Assets, whether occurring before or after the Effective Date.

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(b)                                  With respect to any discrete violation under Section 3.01(a)(i)  or any discrete environmental event, condition or matter included under Section 3.01(a)(ii) , Company and Pipeline will be obligated to indemnify the Partnership Group only if and to the extent that:

(i)              such violation, event, condition or environmental matter occurred before the Effective Date under then-applicable Environmental Laws; and

(ii)           either (A) such violation, event, condition or environmental matter is set forth on Schedule I attached hereto or (B) Company is notified in writing of such violation, event, condition or environmental matter prior to the fifth anniversary of the Effective Date.

For the avoidance of doubt, nothing in this Section 3.01(b)  shall apply to Company’s and Pipeline’s indemnification obligations under Section 3.01(a)(iii) .

(c)                                   The Partnership Group shall indemnify, defend and hold harmless each of the Phillips 66 Entities from and against any Losses suffered or incurred by the Phillips 66 Entities, directly or indirectly, or as a result of any claim by a third party, by reason of or arising out of:

(i)              any violation of Environmental Laws associated with or arising from the ownership or operation of the Assets; and

(ii)           any event, condition or matter associated with or arising from the ownership or operation of the Assets (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets at non-Asset locations) that requires investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action under Environmental Laws, including, without limitation, (A) the cost and expense of any such activity, (B) the cost and expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense of any environmental or toxic tort pre-trial, trial or appellate legal or litigation support work;

and regardless of whether such violation under Section 3.01(c)(i)  or such event, condition or environmental matter included under Section 3.01(c)(ii)  occurred before or after the Effective Date, in each case, to the extent that any of the foregoing do not constitute Covered Environmental Losses for which the Partnership Group is entitled to indemnification from Company and Pipeline under this Article III .

Section 3.02                              Right of Way and Real Property Indemnification .  Company and Pipeline shall indemnify, defend and hold harmless the Partnership Group from and against any

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Losses suffered or incurred by the Partnership Group by reason of or arising out of the following (collectively, “ Covered Property Losses ”):

(a)                                  the failure of the applicable Partnership Group Member to be the owner of such valid and indefeasible easement rights or fee ownership or leasehold interests in and to the lands on which any crude oil or refined products pipeline or related pump station, storage tank, terminal or truck rack or any related facility or equipment conveyed or contributed to the applicable Partnership Group Member on the Effective Date is located as of the Effective Date, and such failure renders the Partnership Group liable to a third party or unable to use or operate the Assets in substantially the same manner that the Assets were used and operated by the applicable Phillips 66 Entity immediately prior to the Effective Date as described in the Registration Statement;

(b)                                  the failure of the applicable Partnership Group Member to have the consents, licenses and permits necessary to allow any such pipeline referred to in clause (a) of this Section 3.02 to cross the roads, waterways, railroads and other areas upon which any such pipeline is located as of the Effective Date, and such failure renders the Partnership Group liable to a third party or unable to use or operate the Assets in substantially the same manner that the Assets were used and operated by the applicable Phillips 66 Entity immediately prior to the Effective Date as described in the Registration Statement; and

(c)                                   the cost of curing any condition set forth in clause (a)  or (b)  of this Section 3.02 that does not allow any Asset to be operated in accordance with Prudent Industry Practice;

in each case to the extent that Company is notified in writing of any of the foregoing prior to the fifth anniversary of the Effective Date.

Section 3.03                              Additional Indemnification by Company and Pipeline .  In addition to and not in limitation of the indemnification provided under Section 3.01(a)  and Section 3.02 , Company and Pipeline shall indemnify, defend, and hold harmless the Partnership Group from and against any Losses suffered or incurred by the Partnership Group by reason of or arising out of any of the following:

(a)                                  (i) the consummation of the transactions contemplated by the Contribution Agreement or (ii) events and conditions associated with the ownership or operation of the Assets and occurring before the Effective Date (other than Covered Environmental Losses, which are provided for under Section 3.01 , Covered Property Losses, which are provided for under Section 3.02 , and current liabilities incurred in the ordinary course of business that have been accrued but not paid prior to the Effective Date), to the extent that Company is notified in writing of any such Loss prior to the fifth anniversary of the Effective Date;

(b)                                  any litigation matters attributable to the ownership or operation of the Assets prior to the Effective Date, including any currently pending legal actions against any of

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the Phillips 66 Entities set forth on Schedule II attached hereto (“ Covered Litigation Matters ”);

(c)                                   events and conditions associated with the Retained Assets and whether occurring before or after the Effective Date;

(d)                                  all federal, state and local Tax liabilities attributable to the ownership or operation of the Assets prior to the Effective Date, including under Treasury Regulation Section 1.1502-6 (or any similar provision of state or local law), and any such Tax liabilities of any of the Phillips 66 Entities that may result from the consummation of the formation transactions for the Partnership Group and the General Partner occurring on or prior to the Effective Date or from the consummation of the transactions contemplated by the Contribution Agreement (other than real property taxes that have been accrued but not paid prior to the Effective Date); and

(e)                                   the failure of any Partnership Group Member to have on the Effective Date any consent, license, permit or approval necessary to allow such Partnership Group Member to own or operate the Assets in substantially the same manner described in the Registration Statement.

Section 3.04                              Additional Indemnification by the Partnership Group .   In addition to and not in limitation of the indemnification provided under Section 3.01(c)  or the Partnership Agreement, the Partnership Group shall indemnify, defend, and hold harmless Pipeline and the Phillips 66 Entities from and against any Losses suffered or incurred by Pipeline or the Phillips 66 Entities, or any of them, by reason of or arising out of events and conditions associated with the ownership or operation of the Assets and occurring after the Effective Date (other than Covered Environmental Losses which are provided for under Section 3.01 ), unless such indemnification would not be permitted under the Partnership Agreement by reason of one of the provisos contained in Section 7.7(a) of the Partnership Agreement.

Section 3.05                              Indemnification Procedures .

(a)                                  The Indemnified Party agrees that within a reasonable period of time after it becomes aware of facts giving rise to a claim for indemnification under this Article III , it will provide notice thereof in writing to the Indemnifying Party, specifying the nature of and specific basis for such claim.

(b)                                  The Indemnifying Party shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the Indemnified Party that are covered by the indemnification under this Article II , including, without limitation, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such claim or any matter or any issues relating thereto, provided that no such settlement shall be entered into without the consent of the Indemnified Party unless it includes a full and unconditional release of the Indemnified Party from such claim; provided,

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however, that no such settlement containing any form of injunctive or similar relief shall be entered into without the prior written consent of the Indemnified Party, which consent shall not be unreasonably delayed or withheld.

(c)                                   The Indemnified Party agrees to cooperate in good faith and in a commercially reasonable manner with the Indemnifying Party with respect to all aspects of the defense of, and the pursuit of any counterclaims with respect to, any claims covered by the indemnification under this Article III for which a request for indemnification is made, including, without limitation, the prompt furnishing to the Indemnifying Party of any correspondence or other notice relating thereto that the Indemnified Party may receive, permitting the name of the Indemnified Party to be utilized in connection with such defense or counterclaims, the making available to the Indemnifying Party of any files, records or other information of the Indemnified Party that the Indemnifying Party considers relevant to such defense or counterclaims, the making available to the Indemnifying Party of any employees of the Indemnified Party and the granting to the Indemnifying Party of reasonable access rights to the properties and facilities of the Indemnified Party, provided that in connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party and further agrees to maintain the confidentiality of all files, records, and other information furnished by the Indemnified Party pursuant to this Section 3.05(c) .  In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in connection with the defense of, or the pursuit of any counterclaims with respect to, any claims covered by the indemnification set forth in this Article III ; provided, however, that the Indemnified Party may, at its own option, cost and expense, engage and pay for counsel in connection with any such defense and counterclaims.  The Indemnifying Party agrees to keep any such counsel engaged by the Indemnified Party informed as to the status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense and counterclaims.

(d)                                  In determining the amount of any loss, cost, damage or expense for which the Indemnified Party is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance proceeds realized by the Indemnified Party, and such correlative insurance benefit shall be net of any incremental insurance premium that becomes due and payable by the Indemnified Party as a result of such claim and (ii) all amounts recovered by the Indemnified Party under contractual indemnities from third Persons.

(e)                                   With respect to Covered Environmental Losses, Company shall have the sole right and authority to manage any remediation required by Law, and, upon reasonable request from Company, the Partnership will, and will cause each Partnership Group Member to, cooperate with Company and its contractors or subcontractors to facilitate such remediation.

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Section 3.06                              Limitations on Indemnity Coverage .

(a)                                  With respect to Covered Environmental Losses under Sections 3.01(a)(i)  or 3.01(a)(ii) , neither Company nor Pipeline shall be obligated to indemnify, defend and hold harmless any Partnership Group Member until such time as the total aggregate amount of such Covered Environmental Losses exceeds $100,000 (the “ Environmental Deductible ”), at which time Company and Pipeline shall be obligated to indemnify the Partnership Group for the excess of such Covered Environmental Losses over the Environmental Deductible; provided, however , that to the extent any cure or remediation of any environmental matter is required under Sections 3.01(a)(i)  or 3.01(a)(ii) , Company and Pipeline will be obligated to indemnify the Partnership Group only to the extent of any cure or remediation that is required by Law (after giving effect to the Environmental Deductible).  For the avoidance of doubt, it is agreed that the Environmental Deductible shall not apply to any Covered Environmental Losses incurred by any Partnership Group Member related to the matters set forth on Schedule I attached hereto.

(b)                                  With respect to Covered Property Losses under Section 3.02 and Covered Litigation Matters under Section 3.03(b), neither Company nor Pipeline shall be obligated to indemnify, defend and hold harmless any Partnership Group Member until such time as the total aggregate amount of (i) such Covered Property Losses exceeds $200,000 (the “ Property Deductible ”) and (ii) Losses incurred by the Partnership Group for such Covered Litigation Matters exceeds $200,000 (the “ Litigation Deductible ”), at which time Company and Pipeline shall be obligated to indemnify the Partnership Group for the excess of (x) such Covered Property Losses over the Property Deductible or (y) such Losses incurred by the Partnership Group for such Covered Litigation Matters exceeds the Litigation Deductible; provided, however , that to the extent the Partnership Group attempts to cure any any matter for which it is entitled to indemnification under Section 3.02 , Company and Pipeline will be obligated to indemnify the Partnership Group only to the extent of any reasonably required cure (after giving effect to the Property Deductible). For the avoidance of doubt, it is agreed that the Litigation Deductible shall not apply to any Losses incurred by any Partnership Group Member related to the matters set forth on Schedule II attached hereto.

(c)                                   For the avoidance of doubt, there is no deductible with respect to the indemnification owed by any Indemnifying Party under any portion of this Article III other than as described in this Section 3.06 , and there is no monetary cap on the amount of indemnity coverage provided by any Indemnifying Party under this Article III other than as described in this Section 3.06 .

ARTICLE IV.                  SERVICES

Section 4.01                              Operational and Administrative Services .

(a)                                  Company agrees to provide, and agrees to cause its Affiliates to provide, on behalf of the General Partner and for the Partnership Group’s benefit, certain

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operational and administrative support services that Company and its Affiliates have traditionally provided in connection with the Assets, including the services listed on Schedule III to this Agreement (“ Services ”).  As consideration for the Services, the Partnership will pay Company an operational and administrative support fee (the “ Operational and Administrative Support Fee ”) of $1,144,000 per Month, payable without discount no later than the 21st Day of the Month in which Services are rendered, provided that if such Day is not a Business Day, then Partnership shall pay such amount without interest on the next Business Day.  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 the Operational and Administrative Support Fee for the revelant Month shall be prorated based on the ratio of the number of days in the relevant partial Month to the number of days in the relevant full Month.

(b)                                  Company may increase the Operational and Administrative Support Fee on each anniversary of the Effective Date (or, if the Effective Date is any day other than the first day of a Month, on the first day of the Month following each anniversary of the Effective Date) by a percentage equal to the greater of zero and the positive change in the Producer Price Index for Finished Goods (“ PPI-FG ”), provided that if, with respect to any annual period or periods, the PPI-FG has decreased, Company may increase the Operational and Administrative Support Fee only to the extent that the percentage increase in the PPI-FG since the most recent previous increase in the Operational and Administrative Support Fee exceeds the cumulative decreases in the PPI-FG during the intervening periods.

(c)                                   From time to time, but not more frequently than once during any calendar year:

(i)              the Partnership will have the right to submit to Company a proposal to reduce the amount of the Operational and Administrative Support Fee if the Partnership believes, in good faith, that the prospective value of the Services to be performed by Company and its Affiliates for the benefit of the Partnership Group will be less than the Operational and Administrative Support Fee in effect at such time; and

(ii)    Company may propose to increase the Operational and Administrative Support Fee if Company believes, in good faith, that the prospective cost of the Services to be performed by Company and its Affiliates for the benefit of the Partnership Group (including costs incurred by reason of the Partnership’s acquisition or development of assets or changes in the complexity of the Partnership’s operations) will exceed the Operational and Administrative Support Fee in effect at such time.

If either Party submits such a proposal to the other Party, both Parties will negotiate in good faith to determine if the Operational and Administrative Support Fee should be changed and, if so, the amount of such change.  If the Parties agree that the Operational and Administrative Support Fee should be changed, then the

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Operational and Administrative Support Fee shall be changed as of the first day of the Month following such agreement.

Section 4.02                              Reimbursable Costs .

(a)                                  The Partnership Group shall reimburse Company for all other direct or allocated costs and expenses incurred by Company and its Affiliates on behalf of the Partnership Group including, but not limited to:

(i)                        salaries and related costs (including employment taxes) of employees of Company or its Affiliates (other than executive officers of the General Partner who devote less than a majority of their working time to the Partnership Group), and the cost of individual contractors to the extent, but only to the extent, such employees or contractors perform services for the Partnership Group that are directly related to the Services;

(ii)                     the cost (including employment taxes and similar expenses) of employee benefits relating to employees of Company or its Affiliates, including, but not limited to, 401(k), pension, bonuses and health insurance benefits, to the extent, but only to the extent, such employees perform services for the Partnership Group that are directly related to the Services;

(iii)                  any expenses incurred or payments made by Company or its Affiliates for insurance coverage with respect to the assets or the business of the Partnership Group;

(iv)                 all expenses and expenditures incurred by Company or its Affiliates as a result of the Partnership becoming and continuing as a publicly traded entity, including, but not limited to, costs associated with annual and quarterly reports, independent director and auditor fees, Partnership governance and compliance, registrar and transfer agent fees, tax return and Schedule K-1 preparation and distribution, legal fees and independent director compensation; and

(v)                    all sales, use, excise, value-added or similar taxes, if any, that may be applicable from time to time with respect to the Services.

(b)                                  As long as the General Partner is an Affiliate of Company, the Partnership and Company may settle the Partnership Group’s financial obligations to Company through Company’s normal interaffiliate settlement processes.  Except as provided in the immediately preceding sentence, the amount of any reimbursements due to Company under this Section 4.02 shall be paid by the Partnership Group no later than the 22nd Day of the Month following the Month in which the applicable reimbursable costs or expenses are incurred, provided that if such Day is not a Business Day, then the Partnership Group shall pay such amount without interest on the next Business Day.

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(c)                                   For the avoidance of doubt, the costs and expenses set forth in Section 4.02(a)  shall be paid by the Partnership Group in addition to, and not as a part of or included in, the Operational and Administrative Support Fee.

ARTICLE V.                       RIGHT OF FIRST OFFER

Section 5.01                              Right of First Offer to Purchase Certain Assets .

(a)                                  Pipeline hereby grants to the Partnership a right of first offer for a period (the “ ROFO Period ”) beginning at the Effective Date and ending at the earlier of (i) five years from the Effective Date and (ii) upon the occurrence of a Partnership Change of Control on all or any part of the ROFO Assets to the extent that Pipeline proposes to Transfer all or any part of either ROFO Asset; provided, however, that Pipeline may Transfer all or any part of either ROFO Asset to an Affiliate of Pipeline that agrees in writing that such ROFO Asset remains subject to the provisions of this Article V and such Affiliate assumes the obligations of Pipeline under this Article V with respect to such ROFO Asset, and such Transfer shall not be subject to the Partnership Group’s right of first offer.

(b)                                  The Parties acknowledge that any Transfer of all or any part of any ROFO Asset pursuant to the Partnership’s right of first offer is subject to the terms of all existing agreements with respect to the ROFO Assets and shall be subject to and conditioned on the obtaining of any and all necessary consents of securityholders, Governmental Authorities, lenders or other third parties; provided, however, that Company and Pipeline hereby represent and warrant that, to their knowledge after reasonable investigation, there are no terms in such agreements that would materially impair the rights granted to the Partnership Group pursuant to this Article V with respect to any ROFO Asset.

Section 5.02                              Procedures .

(a)                                  In the event Pipeline proposes to Transfer all or any part of any applicable ROFO Asset (other than to an Affiliate in accordance with Section 5.01(a) ) during the ROFO Period (a “ Proposed Transaction ”), Pipeline shall, prior to entering into any such Proposed Transaction, first give notice in writing to the Partnership (the “ ROFO Notice ”) of its intention to enter into such Proposed Transaction.  The ROFO Notice shall include any material terms, conditions and details as would be necessary for the Partnership to make a responsive offer to enter into the Proposed Transaction with Pipeline, which terms, conditions and details shall at a minimum include any terms, condition or details that Pipeline would propose to provide to non-Affiliates in connection with the Proposed Transaction.  If the Partnership determines to purchase the ROFO Assets, the Partnership shall have 60 days following receipt of the ROFO Notice to propose an offer to enter into the Proposed Transaction with Pipeline (the “ ROFO Response ”).  The ROFO Response shall set forth the terms and conditions (including, without limitation, the purchase price the Partnership proposes to pay for the ROFO Asset and the other terms of the purchase) pursuant to which the Partnership would be willing to

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enter into a binding agreement for the Proposed Transaction. If no ROFO Response is delivered by the Partnership within such 60-day period, then the Partnership shall be deemed to have waived its right of first offer with respect to such ROFO Asset, subject to Section 5.02(c) .

(b)                                  Unless the ROFO Response is rejected pursuant to written notice delivered by Pipeline to the Partnership within 60 days of the delivery to Pipeline of the ROFO Response, such ROFO Response shall be deemed to have been accepted by Pipeline, and Pipeline shall enter into an agreement with the Partnership providing for the consummation of the Proposed Transaction upon the terms set forth in the ROFO Response.  Unless otherwise agreed between Pipeline and the Partnership, the terms of the purchase and sale agreement will include the following:

(i)                        the Partnership will deliver the agreed purchase price (in cash, Partnership Securities, an interest-bearing promissory note, or any combination thereof);

(ii)                     Pipeline will represent that it has title to the applicable ROFO Asset that is sufficient to own and operate the applicable ROFO Asset in accordance with its intended and historical use, subject to all recorded matters and all physical conditions in existence on the closing date for the purchase of the applicable ROFO Asset, plus any other such matters as the Partnership may approve;

(iii)                  the closing date for the purchase of the ROFO Asset shall occur no later than 180 days following receipt by Pipeline of the ROFO Response pursuant to Section 5.02(a) ;

(iv)                 each of Pipeline and the Partnership shall use commercially reasonable efforts to do or cause to be done all things that may be reasonably necessary or advisable to effectuate the consummation of any transactions contemplated by this Section 5.02(b) , including causing its respective Affiliates to execute, deliver and perform all documents, notices, amendments, certificates, instruments and consents required in connection therewith; and

(v)                    neither Pipeline nor the Partnership shall have any obligation to sell or buy the applicable ROFO Asset if any consent referred to in Section 5.01(b)  has not been obtained.

(c)                                   If the Partnership has not timely delivered a ROFO Response as specified above with respect to a Proposed Transaction that is subject to a ROFO Notice, Pipeline shall be free to enter into a Proposed Transaction with any third party on terms and conditions no more favorable to such third party than those set forth in the ROFO Notice.  If Pipeline rejects a ROFO Response with respect to any Proposed Transaction, Pipeline shall be free to enter into a Proposed Transaction with any third party (i) on terms and conditions (excluding those relating to price) that are

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not more favorable in the aggregate to such third party than those proposed in respect of the Partnership Group in the ROFO Response and (ii) at a price equal to no less than 100% of the price offered by the Partnership in the ROFO Response to Pipeline.

(d)                                  The Partnership can assign its rights and obligations under this Article V to any Partnership Group Member.

ARTICLE VI.                  LICENSE OF NAME AND MARK

Section 6.01                              Grant of License .   Upon the terms and conditions set forth in this Article VI , Company hereby grants and conveys to each of the entities currently or hereafter comprising a part of the Partnership Group a nontransferable, nonexclusive, royalty-free right and license (“ License ”) to use the name “Phillips 66” (the “ Name ”) and any other trademarks owned by Company that contain the Name, the Name together with the distinctive shield graphic, the shield graphic alone, or the name “Phillips 66 Partners” together with the partial outline shield graphic (collectively, the “ Marks ”).

Section 6.02                              Ownership and Quality .   The Partnership agrees that ownership of the Name and the Marks and the goodwill relating thereto shall remain vested in Company both during the term of this License and thereafter, and the Partnership further agrees, and agrees to cause the other Partnership Group Members, never to challenge, contest or question the validity of Company’s ownership of the Name and Marks or any registration thereof by Company.  In connection with the use of the Name and the Mark, the Partnership and any other Partnership Group Members shall not in any manner represent that they have any ownership in the Name and the Marks or registration thereof except as set forth herein, and the Partnership, on behalf of itself and the other Partnership Group Members, acknowledge that the use of the Name and the Marks shall not create any right, title or interest in or to the Name and the Mark, and all use of the Name and the Marks by the Partnership or any other Partnership Group Members, shall inure to the benefit of Company. The Partnership agrees, and agrees to cause the other Partnership Group Members, to use the Name and Marks in accordance with such quality standards established by Company and communicated to the Partnership from time to time, it being understood that the products and services offered by the Partnership Group Members immediately before the Effective Date are of a quality that is acceptable to Company and justifies the License.

Section 6.03                              Termination .   The License shall terminate upon any termination of this Agreement.

ARTICLE VII.             PREFUNDED PROJECTS

Section 7.01                              Prefunded Projects . Prior to the Effective Date, Company has contributed $3.0 million to Holdings, and Holdings has contributed $0.3 million to Carrier, in each case as prepayment for the completion of the projects set forth on Schedule IV (the “ Prefunded Projects ”). Holdings and Carrier hereby agree, in consideration of such contributions, that Holdings and Carrier will use their respective commercially

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reasonable efforts to complete, or cause the completion, of each Prefunded Project in accordance with such specifications and on or before such dates as shall be reasonably agreed by the Parties following the Effective Date. The Parties acknowledge and agree that Holdings or Carrier, as applicable, will bear any costs and expenses associated with the completion of the Prefunded Projects in excess of the amounts contributed to them prior to the Effective Date.

ARTICLE VIII.        NOTICES

Section 8.01                              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:

A Party may change its address for Notice upon Notice to each other Party in accordance with this Section 8.01 .

Section 8.02                              Effective upon Receipt .   Any Notice given in the manner set forth in Section 8.01 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.

ARTICLE IX.                 APPLICABLE LAW

Section 9.01                              Applicable Law .   Regardless of the place of contracting, place(s) of performance or otherwise, this Agreement and all amendments, modifications, alterations or supplements hereto, 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 X.                      LIMITATION OF LIABILITY

Section 10.01                       No Liability for Consequential Damages .   Except as provided in Article III , in no event shall a Party be liable to another 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 10.02                       Limitation of Liability .   Except as provided in Article III , each Party shall be discharged from any and all liability with respect to Losses arising out of this

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Agreement unless suit or action is commenced within two years after the cause of action arises.

ARTICLE XI.                 MISCELLANEOUS

Section 11.01                       Disputes between the Parties .   Any dispute between or among the Parties in connection with this Agreement shall be resolved by arbitration in accordance with the procedures set forth in Exhibit A ; provided, however, that a 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 .

Section 11.02                       Assignment .   No Party may assign its rights or delegate its duties under this Agreement without prior written consent of each other Party; provided, however, that (a) Company may delegate any of its duties and obligations hereunder to any Phillips 66 Entity and (b) the Partnership can assign its rights under Article V to any Partnership Group Member.

Section 11.03                       No Third-Party Rights .   Except as expressly provided in this Agreement, 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 permitted assigns.  No Limited Partner shall have any right, separate and apart from the Partnership, to enforce any provision of this Agreement or to compel any Party to comply with the terms of this Agreement.

Section 11.04                       Compliance with Laws .   Each Party shall at all times comply with all Laws as are applicable to its performance of this Agreement.

Section 11.05                       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, illegal or unenforceable to any extent and for any reason, this Agreement 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 11.06                       Non-Waiver .   The failure of any 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 11.07                       Entire Agreement .   This Agreement, together with all exhibits and schedules attached hereto, the Tax Sharing Agreement (with respect to tax matters) and

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the Operational Services Agreement (with respect to employee reimbursement matters), constitute the entire agreement among the Parties relating to the subject matter hereof and supersede 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, the Tax Sharing Agreement (with respect to tax matters) and the Operational Services Agreement (with respect to employee reimbursement matters).

Section 11.08                       Amendments .   This Agreement shall not be modified or amended, in whole or in part, except by a written amendment signed by all of the Parties.

Section 11.09                       Survival .   Any indemnification granted hereunder by a Party to any other Party shall survive the termination of this Agreement in accordance with the terms of the indemnification.

Section 11.10                       Counterparts; Multiple Originals .   This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding 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, and all of them together shall represent one and the same agreement.

Section 11.11                       Exhibits and Schedules .   The exhibits and schedules attached to this Agreement are incorporated into and constitute part of this Agreement.  If there is any conflict between this Agreement and any exhibit or schedule, the provisions of the exhibit or schedule shall control.

Section 11.12                       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 11.13                       Construction .   The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or 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 any Party by virtue of the authorship of any of the provisions of this Agreement.

Section 11.14                       Business Practices .   Company shall use its best efforts to make certain that all billings, reports, and financial settlements rendered to or made with the Partnership Group 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 the Partnership Group as being complete and accurate in any further recording and reporting made by the Partnership Group for

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whatever purposes.  Company shall notify the Partnership if Company discovers any errors in such billings, reports, or settlement documents.

[Signature pages follow.]

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

[Second signature page follows.]

First Signature page to Omnibus Agreement

Second Signature page to Omnibus Agreement

Exhibit A

Arbitration Procedure

A Party may initiate dispute resolution procedures by sending a Notice to each 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).

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(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 the Parties), alter any time deadline or location(s) for meetings.

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

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Schedule III
Services

Schedule IV
Prefunded Projects

Debottlenecking project at Clifton Ridge terminal, including the installation of a custody transfer meter, prover and sampler at the Pecan Grove barge dock.

Repair and maintenance of Tank 27 at Clifton Ridge terminal.

Complete connection to Shell Houston-Houma Pipeline at Clifton Ridge terminal.

Repair of mooring dolphin at Hartford barge dock.

Exhibit 10.3

OPERATIONAL SERVICES AGREEMENT

by and among

PHILLIPS 66 CARRIER LLC,

 PHILLIPS 66 PARTNERS HOLDINGS LLC

and

PHILLIPS 66 PIPELINE LLC

TABLE OF CONTENTS

i

OPERATIONAL SERVICES AGREEMENT

This OPERATIONAL SERVICES AGREEMENT is made and entered into as of the 26th day of July, 2013, by and between PHILLIPS 66 CARRIER LLC , a Delaware limited liability company (“ Carrier ”), PHILLIPS 66 PARTNERS HOLDINGS LLC, a Delaware limited liability company (“ Holdings ”) and PHILLIPS 66  PIPELINE LLC , a Delaware limited liability company (“ Operator ”).  Carrier and Holdings are collectively referred to herein as “ Company ”.

W I T N E S S E T H :

WHEREAS , Company owns various crude oil and refined products pipelines and terminal assets; and

WHEREAS , Operator has experience and expertise in the maintenance and operation of pipelines and terminals and can provide or make available to Company the personnel, technology, and other resources necessary to maintain and operate such crude oil and refined products pipelines and terminal assets; and

WHEREAS , Company and Operator desire that Operator maintain and operate such crude oil and refined products pipelines and terminal assets for Company;

NOW , THEREFORE , for and in consideration of the foregoing, the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Company and Operator, Company and Operator agree as follows:

Article I.                                                                             Defined Terms

1.01                         Defined Terms .  The following definitions shall for all purposes, unless clearly indicated to the contrary, apply to the capitalized terms used in this Operational Services Agreement:

(a)                                  “ Accounting Procedures ” has the meaning set forth in Section 3.01 hereof and Exhibit F hereto.

(b)                                  “ Administrative Services ” has the meaning set forth in Section 2.01(c) hereof.

(c)                                   “ Affiliate ” means with respect to any Person:  (i) any other Person which beneficially owns, directly or indirectly, fifty percent (50%) or more of such Person’s stock or fifty percent (50%) or more of the ownership interest entitled to vote in such Person, or (ii) any other Person as to which fifty percent (50%) or more of the voting stock or fifty percent (50%) or more of the ownership interest entitled to vote therein, is beneficially owned, directly or indirectly, either by such Person or by an affiliate of such Person as defined in (i) above.  For the purposes of this Agreement, Company and Operator are not considered Affiliates.

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

(e)                                   “ Bankruptcy ” means, with respect to any Person, that:  (i) such Person (A) makes a general assignment for the benefit of creditors; (B) files a voluntary bankruptcy petition; (C) becomes the subject of an order for relief or is declared insolvent in any federal or state bankruptcy or insolvency proceedings; (D) files a petition or answer seeking for such Person, a reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any Law; (E) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Person in a proceeding of the type described in subclauses (A) through (D) of this clause (i); or (F) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of such Person or of all or any substantial part of such Person’s properties; or (ii) against such Person, a proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any Law has been commenced, and 120 Days have expired without dismissal thereof or with respect to which, without such Person’s consent or acquiescence, a trustee, receiver, or liquidator of such Person or all or any substantial part of such Person’s properties has been appointed and 90 Days have expired after the date of expiration of a stay, if the appointment has not previously been vacated.

(f)                                    “ Business Day ” means any Day except for Saturday, Sunday or a legal holiday in the State of Texas.

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

(h)                                  “ Category of Expenditure ” means each of the types of capital and expense expenditures, or combinations thereof, for the Services set forth in Section 2.01 hereof and in accordance with the Accounting Procedures set forth in Exhibit F.

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

(j)                                    “ Claim ” 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 (whether actual or consequential), including interest, penalties, reasonable attorneys’ fees, disbursements and costs of investigations, deficiencies, levies, duties and imposts.

(k)                                  “ Claim Notice ” has the meaning set forth in Section 6.05 hereof.

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

(m)                              “ Construction Services ” has the meaning set forth in Section 2.01(d) hereof.

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(n)                                  “ 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.

(o)                                  “ 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 Houston, Texas, local time.

(p)                                  “ Dispute Resolution Procedures ” has the meaning set forth in Section 14.01 hereof.

(q)                                  “ DOT ” means the United States Department of Transportation.

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

(u)                                  “ GAAP ” means United States generally accepted accounting principles.

(v)                                  “ Holdings ” has the meaning set forth in the introductory paragraph hereof.

(w)                                “ Indemnified Parties ” has the meaning set forth in Section 6.03 hereof.

(x)                                  “ Law ” means any applicable constitutional provision, statute, act, code, law, regulation ordinance, rule, ordinance, order, decree, ruling, proclamation, resolution, judgment, decision or declaration.

(y)                                  “ Liability Claim ” means any Claim against Operator or Company, except Claims made by employees under any workers compensation Law or those fully covered by insurance.

(z)                                   “ Maintenance Services ” has the meaning set forth in Section 2.01(a) hereof.

(aa)                           “ Material Default ” means:  (i) the failure of a Party to pay the other Party any material amount of money payable by that Party, except a failure related to a bona fide business dispute about the amount of such payment or the liability for such payment, not accompanied by a general failure by that Party to pay the amounts it owes under this Agreement, (ii) the general, continuing failure of a Party to perform its material obligations under this Agreement, except when excused by Force Majeure or by some other provision of this Agreement, and except a failure related to a bona fide dispute about any obligation, or (iii) with respect to Company, its failure to approve any budgetary expense or capital project involving any pipeline integrity, compliance or regulatory issue that Operator, in its reasonable judgment, deems necessary or required by any Law.

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(bb)                           “ 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 Houston, Texas, local time.

(cc)                             “ 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 Houston, Texas, local time.

(dd)                           “ Notice ” means any notice, request, instruction, correspondence or other communication permitted or required to be given under this Agreement in accordance with Article XI hereof, or received from a Person who is not a Party.

(ee)                             “ Omnibus Agreement ” shall mean the Omnibus Agreement by and among Phillips 66 Company, Phillips 66 Pipeline LLC, Phillips 66 Partners LP and Phillips 66 Partners GP LLC.

(ff)                               “ Operating Services ” has the meaning set forth in Section 2.01(b) hereof.

(gg)                           “ Operator ” has the meaning set forth in the introductory paragraph hereof.

(jj)                                 “ Party ” means Carrier, Holdings or Operator, individually.

(kk)                           “ 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 body, and shall include any successor (by merger or otherwise) of such entity.

(ll)                                 “ Pipelines ” means the crude oil pipelines and refined petroleum products pipelines and related facilities identified in Exhibit A hereto, and any other crude oil pipelines, natural gas pipelines, natural gas liquid pipelines, liquefied petroleum gas pipelines and refined petroleum products pipelines and related facilities that Operator agrees to operate on behalf of Company upon reasonable request by Company.

(mm)                   “ Recovery Claim ” means any liability or claim which Company has against one or more Persons.

(nn)                           “ Services ” means the Maintenance Services, Operating Services, Administrative Services, Construction Services, and the other services included in Section 2.01 hereof, collectively.

(oo)                           “ Terminals ” means the terminals and related facilities identified in Exhibit A hereto, and any other terminals and related facilities that Operator agrees to operate on behalf of Company upon reasonable request by Company.

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(pp)                           “ Year ” means a period of three hundred sixty five (365) consecutive Days, commencing on the date hereof, and it shall also include each successive three hundred sixty five (365) Day period; provided, however, that any Year which contains a date of February 29 shall consist of three hundred sixty six (366) Days.

1.02                         Terms Generally .  The definitions in Section 1.01 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 herein to Articles, Sections and exhibits shall be deemed references to Articles and Sections of, and exhibits to, this Agreement unless the context shall otherwise require.  Unless the context shall otherwise require, any reference to any federal, state or local statute, act, code or law shall be deemed also to refer to all rules, regulations and directives promulgated thereunder (and to any successor provision).

Article II.                                                                        Responsibilities of Operator

2.01                         Services to be Provided by Operator .  During the term of this Agreement, and subject to the terms and conditions hereof, Operator shall be obligated to perform and provide, or cause to be performed and provided, the following Services:

(a)                                  Such services as may be required by Company for the day-to-day routine and emergency maintenance and repair of the Pipelines and Terminals.  Operator’s obligation to maintain and repair the Pipelines and Terminals shall include the obligation to perform and provide such maintenance, repair and related services and activities as are described in Exhibit B (the “ Maintenance Services ”).

(b)                                  Such services as may be required by Company for the day-to-day operation of the Pipelines and Terminals.  Operator’s obligation to operate the Pipelines and Terminals shall include the obligation to perform and provide such operating services and activities as are described in Exhibit C (the “ Operating Services ”).

(c)                                   Such administrative services as may be required by Company in order for it to own the Pipelines and Terminals and conduct its business and affairs from time to time.  Operator’s obligation to provide administrative services shall include the obligation to perform and provide such administrative services as are described in Exhibit D (the “ Administrative Services ”).

(d)                                  Such construction and related services as may be required by Company from time to time in connection with the Pipelines and Terminals, consisting of the services described in Exhibit E (the “ Construction Services ”).

(e)                                   Such other services related to the Pipelines and Terminals as the Parties may agree upon in writing from time to time.

2.02                         Manner of Performing/Providing Services .  The Services to be performed and provided by Operator hereunder shall be performed and provided in an efficient and prudent manner with the same degree of diligence and care that Operator would exercise if operating its

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own property and in all respects in accordance with all applicable Laws relating to Operator, Company and the Pipelines and Terminals, and Company’s ownership and operation thereof.  Operator shall operate the Pipelines and Terminals in a safe, professional and economical manner and, in a timely fashion, shall advise Company of all matters of significance that could affect the safety or economics relating to their operation so that Company can make appropriate decisions with respect thereto.  Operator shall provide such Services in accordance with and subject to the terms of the budget that is submitted by it to and approved by Company pursuant to Section 3.03 hereof.

2.03                         Personnel .  Operator shall utilize and have supervision, subject to the ultimate direction and control of Company, over such Persons (including consultants and professionals, service or other organizations) as Operator deems necessary or appropriate in order to permit Operator to perform its duties and responsibilities hereunder in an efficient and prudent manner.  Subject to Operator’s right to be reimbursed for such expenses in accordance with the Accounting Procedures (as defined in Section 3.01), Operator shall pay all expenses incurred by it in connection with the retention of such Persons, including, but not limited to, compensation, salaries, wages and overhead and administrative expenses, charges to or incurred by Operator, and, if applicable, social security taxes, workers compensation insurance, retirement and insurance benefits and other such expenses.  Any such Persons retained by Operator may be union or non-union employees, and Operator shall have the sole right to negotiate the terms and provisions of any labor or other agreements with the unions to which such employees belong.  Operator shall provide, or cause to be provided, all workers who will perform Services.  With respect to Company operations in Texas, Operator shall obtain workers’ compensation coverage as defined by Texas Labor Code Section 401.011(44) on behalf of both Operator and Company, and Company shall be considered an employer solely for the purposes of Texas Labor Code Section 401.011(18) and Section 408.001.  With respect to Company operations performed in any jurisdiction other than Texas, to the extent that such jurisdiction would regard Company as a joint or dual employer of any such employee, Operator shall obtain workers’ compensation coverage as defined and required by Law on behalf of both Operator and Company, provided that Company shall be considered an employer solely for the purposes of its status as a joint or dual employer under the relevant workers’ compensation regime.

2.04                         Use of Affiliates .  In its performance of the Services hereunder, Operator may, but shall not be obligated to, use the services of Operator’s or its Affiliates’ accounting, construction, purchasing, engineering, legal, planning, budgeting, operating, regulatory, and other departments.

2.05                         Contracts .  Operator is authorized to execute, in its name and for the benefit of Company, such contracts as may be necessary for Operator to carry out its responsibilities under this Agreement; provided, however, that Operator shall not execute any contract in excess of Five Million Dollars ($5,000,000.00), or that covers a period longer than the term of this Agreement, unless Operator obtains Company’s prior written approval.

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2.06                         Claims .

(a)                                  Any Liability Claim or Recovery Claim, to the extent relating to the operation or maintenance of the Pipelines and Terminals, shall be defended, prosecuted or settled by Operator, subject to the ultimate direction and control of Company.

(b)                                  The costs of handling a Liability Claim or a Recovery Claim, including reasonable costs of legal counsel, together with the amount of any settlement of or judgment rendered on a Liability Claim, including court costs, shall be paid by Operator and shall be reimbursed by Company.  Any amounts received by Operator in settlement of a Recovery Claim or in payment of a judgment on a Recovery Claim shall be paid over to Company.

(c)                                   Operator shall promptly notify Company whenever Operator receives actual Notice of any claim against Company or Operator (in its capacity as Operator).

(d)                                  Before making any settlement of any Liability Claim and before filing any lawsuit or making any settlement with respect to any Recovery Claim, Operator shall give to Company written Notice of the fact that it desires to file such suit or make such settlement (as the case may be), which Notice shall set forth the nature of the claim and the amount for which Operator proposes to sue or settle, and Operator shall not file any such suit nor make any such settlement without the approval of Company.

2.07                         Company Property .  All property, equipment and material acquired solely on behalf of Company by Operator hereunder shall be deemed to be owned by Company.

Article III.                                                                   Financial Accounting and Billing Practices

3.01                         Accounting .  Operator shall keep a full and complete account of all costs and expenses incurred by it in connection with the performance and provision of the Services hereunder in the manner set forth in the Accounting Procedures.

3.02                         Compensation .  Operator shall be fully reimbursed by Company for all necessary and reasonable costs, expenses and expenditures incurred by Operator on behalf of Company in connection with the provision of the Services at the rates and in the manner set forth in the Accounting Procedures.

3.03                         Budgets .

(a)                                  By November 1 st  of each year, Operator shall prepare and submit to Company for approval a detailed maintenance, operating, and capital budget setting out the amounts Operator proposes to expend for such purposes during the next calendar Year, which budget shall, to the extent practicable, provide for a breakdown of expenses and expenditures on a Monthly basis, by Category of Expenditure and by asset as defined by Operator. Upon Company approval of such budget, Operator shall have the authority to award and execute contracts within the expenditure limits set forth in such budget.  When expense and capital appropriation requests are not required (such as with annual maintenance contracts), Operator shall have the authority to award and execute such contracts without additional Company approval, subject to Section 2.05 of this Agreement.

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(b)                                  If it appears at any time after Operator receives a budget approved by Company that the total actual expenditures for any calendar Year will exceed the total annual budgeted amount for such calendar Year, Operator shall notify Company of such expected excess expenditure as part of the normal Monthly billing process.  If it subsequently appears that the total actual expenditures for any calendar Year will exceed ten percent (10%) of the total annual budgeted amount (“ Overrun ”), Operator shall submit to Company for approval an amendment to the then-applicable budget, together with an explanation of the reason(s) for the anticipated budget Overrun.  As soon as practicable following the last Day of each Month, Operator shall submit to Company a Monthly report comparing actual expenditures for such Month to budgeted operating expenses and capital projects for such Month.

(c)                                   Company shall notify Operator in writing of the approval or disapproval of any proposed budget or amendment thereto in writing within fifteen (15) Days after receipt thereof.  In the event Company does not so notify Operator within such time period, or if Company notifies Operator that such budget or amendment has been disapproved, then until Operator receives approval of a proposed budget or amendment:  (i) the current approved budget shall remain in effect, and (ii) Operator shall continue to have the authority to make expenditures with regard to items previously approved by Company.  If any such proposed budget or amendment is disapproved, Operator shall submit a revised proposed budget or amendment to Company for approval as soon as is reasonably practicable.

(d)                                  Operator shall meet with Company a minimum of four (4) times during each calendar Year, or more if Company requests, in order to review the budget and permit Company to monitor the accuracy of the budget for current Year operations.

(e)                                   The Parties agree that the maintenance, operating and capital budget for 2013 shall be as presented by Company to Operator no later than the Effective Date.

(f)                                    Except as Company may otherwise direct in writing, the approval by Company of a budget or an amendment to a budget shall constitute Company’s authorization of Operator to incur the expenses contained in such budget or amendment.

3.04                         Safety, Environmental and Emergency Expenditures .  Notwithstanding any other provision in this Agreement, Operator may incur (and be reimbursed for) any expenditures or take any other actions as Operator in its reasonable judgment deems to be immediately necessary:  (i) to protect the environment from immediate and present harm; (ii) to protect the health and safety of Persons from immediate and present harm; (iii) to safeguard lives or property in connection with the initial response to any emergencies affecting the Pipelines and Terminals; and (iv) proceed with maintenance or repair work necessary to keep the Pipelines and Terminals operating, or to restore the Pipelines and Terminals to operating conditions; however, it is also understood that every reasonable effort will be made by Operator to notify Company at the earliest possible convenience of such emergencies and expenditures involving same.

3.05                         Billing Practices .  Company shall pay and Operator shall receive as full and complete compensation for the performance of the Services hereunder, the sum of the amounts becoming due as described in the Accounting Procedures.  For Services provided by Operator in any

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Month, payment by Company shall be made no later than the 21 st  Day of the immediately following Month, provided that if such Day is not a Business Day, then Company shall pay such amount without interest on the next Business Day.  As long as Operator is an Affiliate of Company, the Operator and Company may settle Company’s financial obligations to Operator through Operator’s normal interaffiliate settlement processes.

3.06                         Records and Audit Rights .  Operator shall maintain a true and correct set of records pertaining to all activities relating to its performance hereunder and all transactions related thereto.  Operator further agrees to retain all such records for a period of time not less than two (2) Years following the end of the calendar Year in which the applicable Services were performed. Company, or its authorized representative or representatives, shall have the right during Operator’s Normal Business Hours to audit, copy and inspect, at Company’s sole cost and expense, any and all records of Operator relating to its performance of its obligations hereunder (but not any other books and records of Operator).  Audits shall not be commenced more than once by Company during each calendar Year and shall be completed within a reasonable time frame not to exceed thirty (30) Days.  Company may request information from Operator’s books and records relating to Operator’s obligations hereunder from time to time and such requests shall not constitute an audit for that calendar Year.  Company shall have two (2) Years after the end of a calendar Year during which to conduct an audit of Operator’s books and records for such calendar Year, and any Claim arising out of or based in whole or in part on the information produced or obtained by the performance of any such audit must be made, if at all, within such two (2) Year period.

Article IV.                                                                    Safety

4.01                         Safety Requirements .  Company agrees that Operator will abide by, at a minimum, the safety requirements promulgated by Operator from time to time with respect to the Pipelines and Terminals and in compliance with applicable Laws.

Article V.                                                                         Relationship of the Parties

5.01                         General Principles Regarding Relationship of the Parties .  The Parties agree that Operator shall provide the Services to Company as an independent contractor and not as an agent or representative of Company.  This Agreement is not intended to and shall not create or otherwise form a partnership or joint venture between Operator and Company.

5.02                         Standard of Operational Control .  The Parties agree that the Services shall be performed under the absolute direction and control of Company.  Company shall have the right to monitor, consult with and give operational instructions to Operator.  Operator shall not unreasonably refuse service requests or operational instructions of Company.

Article VI.                                                                    Liability Standard and Indemnification

6.01                         Liability Standard .  Notwithstanding anything herein to the contrary, and in recognition of the fact that the Services to be performed and provided by Operator hereunder are to be furnished, performed and provided in exchange for the reimbursement provided for in the Accounting Procedures, Operator shall only be liable to Company for gross negligence or willful or wanton misconduct in the performance of its obligations hereunder, AND NEITHER

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OPERATOR NOR SUCH OF ITS AFFILIATES OR AGENTS AS IT SHALL APPOINT TO PERFORM DUTIES HEREUNDER OR THEIR RESPECTIVE DIRECTORS, STOCKHOLDERS, OFFICERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES, SUCCESSORS, TRANSFERREES AND ASSIGNEES SHALL BE LIABLE TO COMPANY OR PERSONS WHO HAVE ACQUIRED INTERESTS IN COMPANY, WHETHER AS PARTNERS, ASSIGNEES OR OTHERWISE, FOR ERRORS IN JUDGMENT OR FOR ANY ACTS OR OMISSIONS THAT DO NOT CONSTITUTE GROSS NEGLIGENCE OR WILLFUL OR WANTON MISCONDUCT, IT BEING THE INTENTION OF THE PARTIES THAT NEITHER OPERATOR NOR SUCH OF ITS AFFILIATES OR AGENTS AS IT SHALL APPOINT TO PERFORM DUTIES HEREUNDER OR THEIR RESPECTIVE DIRECTORS, STOCKHOLDERS, OFFICERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES, SUCCESSORS, TRANSFEREES AND ASSIGNEES SHALL BE LIABLE FOR THEIR OWN NEGLIGENCE (SOLE, PARTIAL OR CONCURRENT).

6.02                         Responsibility for Affiliates and Agents .  Operator may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its Affiliates or agents, and Operator shall not be responsible for any misconduct or negligence on the part of any such Affiliate or agent appointed by Operator with due care.

6.03                         Indemnification .  FROM AND AFTER THE DATE OF THIS AGREEMENT, COMPANY SHALL INDEMNIFY AND HOLD HARMLESS OPERATOR AND EVERY AFFILIATE OF OPERATOR AS IT SHALL APPOINT TO PERFORM SERVICES HEREUNDER AND ITS AND THEIR RESPECTIVE DIRECTORS, STOCKHOLDERS, OFFICERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES, SUCCESSORS, TRANSFEREES AND ASSIGNEES (COLLECTIVELY THE “INDEMNIFIED PARTIES”) FROM, AGAINST AND IN RESPECT OF ANY AND ALL LIABILITY CLAIMS ASSERTED BY OR ON BEHALF OF ANY PERSON OTHER THAN COMPANY ARISING FROM, RELATING TO, OR ASSOCIATED WITH THE PERFORMANCE OR PROVISION OR FAILURE TO PERFORM OR PROVIDE BY OPERATOR ANY OF THE SERVICES OR THE FAILURE BY COMPANY TO PERFORM ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT, IN EACH CASE REGARDLESS OF WHETHER ANY SUCH CLAIM RESULTS FROM THE NEGLIGENCE (SOLE, PARTIAL OR CONCURRENT) OF OPERATOR OR ANY OF THE INDEMNIFIED PARTIES; PROVIDED, HOWEVER, THAT SUCH INDEMNIFICATION SHALL NOT EXTEND TO ANY AMOUNT OF DAMAGES THAT ARE DETERMINED TO BE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL OR WANTON MISCONDUCT OF THE INDEMNIFIED PARTY.

6.04                         Consequential Damages .  Notwithstanding anything herein to the contrary, neither Party shall be liable to the other Party for special, indirect or consequential damages resulting from or arising out of this Agreement, including, without limitation, loss of profits or business interruptions, however they may be caused.

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6.05                         Notice of Claims .  Promptly after any Indemnified Party becomes aware of facts giving rise to a Claim by it for indemnification pursuant to this Article, such Indemnified Party shall provide Notice to Company (a “ Claim Notice ”) outlining such Claim and a copy of all papers served with respect thereto (if any).  For purposes of this Section, receipt by an Indemnified Party of Notice of any Claim by or from any Person other than a Party to this Agreement which gives rise to a Claim on behalf of such Indemnified Party shall require prompt Notice from the Indemnified Party to Company of the receipt of such Notice as provided in the first sentence of this Section 6.05; provided, however, that the failure of any Indemnified Party to give timely Notice shall not affect its rights to indemnification hereunder except to the extent that Company is materially prejudiced thereby.  Each Claim Notice shall set forth all information regarding the Claim as the Indemnified Party shall then have and shall contain a statement to the extent that the Indemnified Party giving the Notice is making a Claim pursuant to a formal demand for indemnification under this Article VI.

Article VII.                                                               Insurance

7.01                         Insurance .

(a)                                  Operator shall at all times during the term of this Agreement procure and maintain workers’ compensation insurance or similar insurance, including all such insurance as may be required by all applicable state and federal workers’ compensation Laws and such other Laws as may be applicable to the Services performed under this Agreement.  Operator shall cause its workers’ compensation and employers liability insurers to waive their rights of subrogation against Company.

(b)                                  Operator may elect to self-insure all or any part of the insurance requirements set forth in Section 7.01(a) above to the extent allowed by applicable Law.  If Operator elects to self-insure, then Operator shall respond to any insurance claim, with regard to waiving rights of subrogation against Company, in the same manner as a commercial market insurance policy that waived subrogation rights against Company would have responded to such insurance claim.

7.02                         Cost Reimbursement .  Insurance as required in Section 7.01 hereof shall be a reimbursable cost pursuant to the Accounting Procedures.

7.03                         Required Contractor Coverage .  Operator shall require all contractors and subcontractors employed by Operator in performing and/or providing Services hereunder to procure and maintain the following insurance:  (i) workers’ compensation insurance or similar insurance, including all such insurance as may be required by all applicable state and federal workers’ compensation Laws and such other Laws as may be applicable to the Services provided by such contractors and subcontractors; (ii) employers’ liability insurance with amounts required by Law or One Million Dollars ($1,000,000.00) per occurrence, whichever is greater; (iii) commercial general liability insurance on an occurrence form covering liabilities for death and personal injury and liabilities for loss or damage to property with a combined single limit of not less than One Million Dollars ($1,000,000.00) per occurrence, which insurance must cover all Services conducted by such contractors and subcontractors related to this Agreement; and (iv) business vehicle insurance covering liabilities for death of or injury to any one Person and

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liabilities for loss of or damage to property resulting from any one (1) accident with a combined single limit of not less than One Million Dollars ($1,000,000.00) per occurrence.  Further, Operator shall require such contractors and subcontractors to cause their workers’ compensation and employers’ liability insurance insurers to waive their rights of subrogation against Company, and to name Company as an additional insured under any commercial general liability and business vehicle liability insurance policies carried by such contractors and subcontractors.

Article VIII.                                                          Term and Termination

8.01                         Term .  Unless terminated in accordance with Section 8.02, Section 8.03 or Section 8.04 below, this Agreement shall have a five (5) Year primary term, commencing on the date hereof, and this Agreement shall continue in full force and effect thereafter unless it is terminated by either Party at the end of the primary term or at any time thereafter by giving not less than six (6) Months prior Notice of such termination to the other Party.

8.02                         Termination by Company .  Company shall have the right to terminate this Agreement immediately upon the occurrence of any of the following events:  (i) upon the Bankruptcy of Operator; or (ii) upon a finding by Company that Operator (A) has been grossly negligent or engaged in willful or wanton misconduct in the performance of its obligations hereunder and that such gross negligence or willful or wanton misconduct has had a material adverse effect on the Pipelines and Terminals or Company’s business as it relates to the Pipelines and Terminals, or (B) has engaged in a continued or regular pattern or gross negligence or willful or wanton misconduct that Company reasonably determines to pose a risk of resulting in a material adverse effect on the Pipelines and Terminals or Company’s business as it relates to the Pipelines and Terminals; provided that Company shall deliver to Operator Notice of any such affirmative finding, which shall include a reasonably detailed description of the basis therefor.

8.03                         Termination by Operator .  Operator shall have the right to terminate this Agreement or any Services provided hereunder:  (i) immediately upon the Bankruptcy of Company or (ii) on six (6) Months prior Notice upon the occurrence of a Partnership Change of Control. Notwithstanding the foregoing, if Phillips 66 Partners LP ceases to Control, directly or indirectly, either Carrier or Holdings, as the case may be, then Operator shall have the right to terminate this Agreement with respect to any Services provided to Carrier or Holdings, as applicable.

8.04                         Right of Termination by Either Party .  Any Party may terminate this Agreement at any time upon sixty (60) Days prior Notice to the other Party if:

(a)                                  the other Party is in Material Default of any of its obligations under this Agreement; and

(b)                                  the non-defaulting Party gives Notice of such Material Default to the defaulting Party, which Notice shall set forth in reasonable detail the facts and circumstances of such Material Default; and

(c)                                   the defaulting Party fails to cure the Material Default within thirty (30) Days, or, for a Material Default not reasonably susceptible to cure within that period, to undertake to cure such Material Default and thereafter to diligently continue such efforts until the Material Default is cured.

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8.05                         Effect of Termination .  The termination of this Agreement shall not relieve either Party of its obligations to pay amounts of money due hereunder which accrued prior to such termination.  Upon termination, Operator shall promptly make available to Company its books and records relating to the Pipelines and Terminals.

Article IX.                                                                   Alcohol and Controlled Substances

9.01                         Substance Abuse .  Operator shall prohibit the use, possession, distribution, sale or storage of illegal or controlled substances, and substance-related paraphernalia, by its personnel while performing Services hereunder or while located on Company premises.  Operator shall perform or cause to be performed all actions necessary for compliance with any applicable Laws pertaining to illegal or controlled substances, specifically including, but not limited to, the Drug-Free Workplace Act of 1988 (41 U.S.C. §§ 701-707) and DOT regulations applicable to operators of pipeline facilities subject to applicable 49 C.F.R. Part 199.  Unless prohibited by Law, Operator shall require all personnel who enter Company premises to consent to searches, whether performed by Company or appropriate law enforcement officials, of the vehicles and other personal effects of such personnel for monitoring the presence of any illegal or controlled substances or substance-related paraphernalia.  Company reserves the right, exercisable in Company’s sole discretion, to bar any of Operator’s personnel from performing Services hereunder, so long as such discretion is not exercised in violation of any governing Law.  Such discretion shall apply with respect to, but not be limited to, any personnel whom Company reasonably suspects to be involved with illegal or controlled substances, and such discretion shall not be unreasonably exercised.