PHILLIPS 66 PARTNERS LP (Form: 8-K, Received: 03/03/2014 16:46:31)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

_______________________________________

Date of Report: February 28, 2014

(Date of earliest event reported)

Phillips 66 Partners LP

(Exact name of registrant as specified in its charter)



Delaware	001-36011	38-3899432
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

3010 Briarpark Drive

Houston, Texas 77042

(Address of principal executive offices and zip code)

(855) 283-9237

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 1.01	Entry into a Material Definitive Agreement

As previously announced, on February 13, 2014, Phillips 66 Partners LP (the “Partnership”) entered into a Contribution, Conveyance and Assumption Agreement (the “Contribution Agreement”) with Phillips 66 Partners GP LLC (the “General Partner”) and Phillips 66 Company (“P66 Company”), a wholly-owned subsidiary of Phillips 66 (“PSX”). Pursuant to the terms of the Contribution Agreement, the Partnership agreed to acquire from P66 Company the Gold Product Pipeline System, also known as the “Gold Line System,” and two refinery-grade propylene storage spheres located in Medford, Oklahoma, known as the “Medford Spheres” (collectively, the “Acquired Assets”) (the “Acquisition”). The total consideration for the Acquisition was $700 million, which included $400 million in cash; the issuance of 3,530,595 common units of the Partnership (“Common Units”) to P66 Company; the issuance of 72,053 general partner units of the Partnership to the General Partner to maintain its 2% general partner interest in the Partnership; and the assumption by the Partnership of a 5-year, $160 million note payable to a subsidiary of P66 Company. The Acquisition closed on February 28, 2014, with an effective date of March 1, 2014 (the “Effective Date”). In connection with the Acquisition, the Partnership and its subsidiaries entered into the various agreements described below.

The above summary is qualified in its entirety by reference to the Contribution Agreement, a copy of which was filed as Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on February 13, 2014, and incorporated herein by reference.

First Amendment to the Omnibus Agreement

On February 28, 2014, the Partnership entered into a First Amendment to the Omnibus Agreement (the “Omnibus Amendment”) with the General Partner; P66 Company; Phillips 66 Pipeline LLC (“P66 Pipeline”); Phillips 66 Partners Holdings LLC, a wholly-owned subsidiary of the Partnership (“PSXP Holdings”); and Phillips 66 Carrier LLC, a wholly-owned subsidiary of PSXP Holdings (“PSXP Carrier”). The Omnibus Amendment amends the parties’ existing Omnibus Agreement to, among other things, provide for additional services to be provided to the Partnership by P66 Company in connection with the Acquired Assets and increase the monthly operational and administrative support fee payable by the Partnership to P66 Company from $1,144,000 to $2,302,300, prorated from the Effective Date.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Omnibus Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Amendment to the Operational Services Agreement

On February 28, 2014, PSXP Holdings and PSXP Carrier entered into a First Amendment to the Operational Services Agreement (the “Operational Services Amendment”) with P66 Pipeline. The Operational Services Amendment amends the parties’ existing Operational Services Agreement to, among other things, provide that the services provided to the Partnership by P66 Pipeline under the Operational Services Agreement will also be provided in support of the Acquired Assets.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Operational Services Amendment, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.

Gold Line Origination Services Agreement

On March 1, 2014, PSXP Carrier and P66 Pipeline entered into the Gold Line Origination Services Agreement the (“Origination Services Agreement”), pursuant to which P66 Pipeline will charge fees to PSXP Carrier for the provision of certain operational services by P66 Pipeline to PSXP Carrier in connection with the origination of petroleum products movements on the Gold Line System. The monthly fee payable by PSXP Carrier to P66 Pipeline is $110,000 and is subject to adjustment each year beginning in 2016 based on the Producer Price Index for Finished Goods. The Origination Services Agreement has a primary term of ten years and automatically extends for successive additional five-year renewal terms unless terminated by either party upon written notice to the other party no less than 180 days prior to the end of the initial term or any renewal term, as applicable.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Origination Services Agreement, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K and incorporated herein by reference.

Storage Services Agreement (Gold Line Storage)

On March 1, 2014, PSXP Carrier and P66 Company entered into a Storage Services Agreement (the “Gold Line Storage Agreement”), pursuant to which PSXP Carrier will charge fees to P66 Company for storing certain identified petroleum products in storage tanks located in Wichita, Kansas; Kansas City, Kansas; and Cahokia, Illinois. The fees payable by P66 Company to PSXP Carrier are subject to adjustment each year beginning on January 1, 2015, based on the Producer Price Index for Finished Goods. The Gold Line Storage Agreement has a primary term of five years and automatically extends for up to two additional five-year periods unless terminated by either party upon 180 days’ written notice to the other party prior to the end of the initial term or any renewal term, as applicable.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Gold Line Storage Agreement, a copy of which is filed as Exhibit 10.4 to this Current Report on Form 8-K and incorporated herein by reference.

Storage Services Agreement (Medford Storage Spheres)

On March 1, 2014, PSXP Holdings and P66 Company entered into a Storage Services Agreement (the “Medford Storage Agreement”), pursuant to which PSXP Holdings will charge fees to P66 Company for receiving and storing natural gas liquids and refinery grade propylene in the Medford Spheres. The fees payable by P66 Company to PSXP Holdings are subject to adjustment each year beginning on January 1, 2015, based on the Producer Price Index for Finished Goods. The Medford Storage Agreement has a primary term of ten years and automatically extends for up to two additional five-year periods unless terminated by either party upon 180 days' written notice to the other party prior to the end of the initial term or any renewal term, as applicable.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Medford Storage Agreement, a copy of which is filed as Exhibit 10.5 to this Current Report on Form 8-K and incorporated herein by reference.

Terminal Services Agreement (Terminals in Wichita, Kansas, Kansas City, Kansas, Paola, Kansas, Jefferson City, Missouri and Cahokia, Illinois)

On March 1, 2014, PSXP Carrier and P66 Company entered into a Terminal Services Agreement (the “Terminal Services Agreement”), pursuant to which PSXP Carrier will charge fees to P66 Company for receiving refined petroleum products, handling and storing such refined petroleum products, and delivering such refined petroleum products into pipelines and transport trucks at terminals located in Wichita, Kansas; Kansas City, Kansas; Paola, Kansas; Jefferson City, Missouri; and Cahokia, Illinois. P66 Company agreed to deliver certain minimum volumes of refined petroleum products for handling, storage and delivery at the terminals. The fees payable by P66 Company to PSXP Carrier are subject to adjustment each year beginning on January 1, 2015, based on the Producer Price Index for Finished Goods. The Terminal Services Agreement has a primary term of five years and may be renewed by P66 Company for up to two additional five-year periods upon 180 days' written notice from P66 Company to PSXP Carrier prior to the end of the initial term or any renewal term, as applicable.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Terminal Services Agreement, a copy of which is filed as Exhibit 10.6 to this Current Report on Form 8-K and incorporated herein by reference.

Transportation Services Agreement (Gold Line System)

On March 1, 2014, PSXP Carrier and P66 Company entered into a Transportation Services Agreement (the “Gold Line Transportation Services Agreement”), pursuant to which PSXP Carrier will charge fees to P66 Company for transporting refined petroleum products along four routes on the Gold Line System. P66 Company agreed to deliver certain minimum volumes of refined petroleum products for transportation on the Gold Line System. PSXP Carrier may file with the United States Federal Energy Regulatory Commission (“FERC”) to adjust tariff rates annually beginning on July 1, 2015, at a rate equal to the percentage change in the inflationary index promulgated by FERC. The Gold Line Transportation Services Agreement has a primary term of ten years and may be renewed by P66 Company for a single additional five-year period upon 180 days' written notice from P66 Company to PSXP Carrier prior to the end of the initial term.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Gold Line Transportation Services Agreement, a copy of which is filed as Exhibit 10.7 to this Current Report on Form 8-K and incorporated herein by reference.

Assignment, Assumption and Modification of Note

The information set forth under Item 2.03 below with respect to the Assignment, Assumption and Modification of Note is incorporated herein by reference.

Relationships

Each of the parties to the various agreements described above is a direct or indirect subsidiary or affiliate of PSX. As a result, certain individuals, including officers of PSX and officers and directors of the General Partner, serve as officers and/or directors of one or more of such entities. P66 Company currently (as of the date of this Current Report on Form 8-K) owns 19,858,957 Common Units and

35,217,112 subordinated units of the Partnership (“Subordinated Units”), collectively representing a 73.0% limited partner interest in the Partnership based on the number of Common Units and Subordinated Units outstanding as of March 1, 2014. P66 Company also owns an indirect 2% general partner interest in the Partnership and all of the Partnership’s incentive distribution rights through its ownership of the General Partner.



Item 2.01	Completion of Acquisition or Disposition of Assets

P ursuant to the terms and conditions of the Contribution Agreement, the Acquisition closed on February 28, 2014, with an effective date of March 1, 2014. The description of the Acquisition contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.



Item 2.03	Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On March 1, 2014, the Partnership entered into an Assignment, Assumption and Modification of Note (the “Assumption Agreement”) with P66 Company and Phillips Gas Company Shareholder, Inc. (the “Lender”), pursuant to which the Partnership assumed the obligations of P66 Company under a note payable to the Lender (the “Note”) in the original principal amount of $160 million. The Note has a term of five years and bears interest at the rate of three percent per annum. Interest on the Note is payable quarterly and all principal and any accrued and unpaid interest on the Note is due and payable at maturity on February 28, 2019.

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Assumption Agreement, which is filed as Exhibit 10.8 to this Current Report on Form 8-K and incorporated herein by reference.



Item 3.02	Unregistered Sales of Equity Securities

The description in Item 2.01 above of the Partnership’s issuance of Common Units to P66 Company on February 28, 2014, in connection with the closing of the Acquisition is incorporated in this Item 3.02 by reference. The issuance of the Common Units was completed in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended, under Section 4(a)(2), as a transaction by an issuer not involving a public offering.



Item 9.01	Financial Statements and Exhibits

(a) Financial Statements of Business Acquired.

The Partnership will file the financial statements required by this Item not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.

(b) Pro Forma Financial Information.

The Partnership will file the pro forma financial information required by this Item not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.

(d) Exhibits



Exhibit No.		Description
10.1	--	First Amendment to the Omnibus Agreement, dated as of February 28, 2014, by and among Phillips 66 Company, on behalf of itself and the other Phillips 66 Entities (as defined in the Omnibus Agreement), Phillips 66 Pipeline LLC, Phillips 66 Partners LP, Phillips 66 Partners Holdings LLC, Phillips 66 Carrier LLC and Phillips 66 Partners GP LLC
10.2	--	First Amendment to the Operational Services Agreement, dated as of February 28, 2014, by and between Phillips 66 Carrier LLC, Phillips 66 Partners Holdings LLC, and Phillips 66 Pipeline LLC
10.3	--	Gold Line Origination Services Agreement, dated as of March 1, 2014, by and between Phillips 66 Carrier LLC and Phillips 66 Pipeline LLC
10.4†	--	Storage Services Agreement (Gold Line), dated March 1, 2014, by and between Phillips 66 Carrier LLC and Phillips 66 Company
10.5†	--	Storage Services Agreement (Medford Spheres), dated March 1, 2014, by and between Phillips 66 Partners Holdings LLC and Phillips 66 Company
10.6†	--	Terminal Services Agreement, dated March 1, 2014, by and between Phillips 66 Carrier LLC and Phillips 66 Company
10.7	--	Transportation Services Agreement, dated March 1, 2014, by and between Phillips 66 Carrier LLC and Phillips 66 Company
10.8	--	Assignment, Assumption and Modification of Note, dated as of March 1, 2014, by and among Phillips 66 Company, Phillips 66 Partners LP, and Phillips Gas Company Shareholder, Inc.

_______________

† Confidential treatment has been requested for certain portions of this Exhibit pursuant to a confidential treatment

request filed with the Securities and Exchange Commission on March 3, 2014. Such portions have been

omitted and filed separately with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



		Phillips 66 Partners LP
	By:	Phillips 66 Partners GP LLC, its general partner

Dated: March 3, 2014	By:	/s/ J.T. Liberti
		J.T. Liberti Vice President and Chief Operating Officer

Index to Exhibits



Exhibit No.		Description
10.1	--	First Amendment to the Omnibus Agreement, dated as of February 28, 2014, by and among Phillips 66 Company, on behalf of itself and the other Phillips 66 Entities (as defined in the Omnibus Agreement), Phillips 66 Pipeline LLC, Phillips 66 Partners LP, Phillips 66 Partners Holdings LLC, Phillips 66 Carrier LLC and Phillips 66 Partners GP LLC
10.2	--	First Amendment to the Operational Services Agreement, dated as of February 28, 2014, by and between Phillips 66 Carrier LLC, Phillips 66 Partners Holdings LLC, and Phillips 66 Pipeline LLC
10.3	--	Gold Line Origination Services Agreement, dated as of March 1, 2014, by and between Phillips 66 Carrier LLC and Phillips 66 Pipeline LLC
10.4†	--	Storage Services Agreement (Gold Line), dated March 1, 2014, by and between Phillips 66 Carrier LLC and Phillips 66 Company
10.5†	--	Storage Services Agreement (Medford Spheres), dated March 1, 2014, by and between Phillips 66 Partners Holdings LLC and Phillips 66 Company
10.6†	--	Terminal Services Agreement, dated March 1, 2014, by and between Phillips 66 Carrier LLC and Phillips 66 Company
10.7	--	Transportation Services Agreement, dated March 1, 2014, by and between Phillips 66 Carrier LLC and Phillips 66 Company
10.8	--	Assignment, Assumption and Modification of Note, dated as of March 1, 2014, by and among Phillips 66 Company, Phillips 66 Partners LP, and Phillips Gas Company Shareholder, Inc.

_______________

† Confidential treatment has been requested for certain portions of this Exhibit pursuant to a confidential treatment

request filed with the Securities and Exchange Commission on March 3, 2014. Such portions have been

omitted and filed separately with the Securities and Exchange Commission.

Exhibit 10.1

Execution Version

FIRST AMENDMENT TO THE

OMNIBUS AGREEMENT

This First Amendment (this “ Amendment ”) to the Omnibus Agreement (the “ Omnibus Agreement ”) by and among Phillips 66 Company (“ Company ”), on behalf of itself and the other Phillips 66 Entities (as defined in the Omnibus Agreement), Phillips 66 Pipeline LLC (“ Pipeline ”), Phillips 66 Partners LP (the “ Partnership ”), Phillips 66 Partners Holdings LLC (“ Holdings ”), Phillips 66 Carrier LLC (“ Carrier ”) and Phillips 66 Partners GP LLC (the “ General Partner ”) is dated as of the 28th day of February 2014.

WHEREAS , the Effective Date of the Omnibus Agreement was July 26, 2013; and

WHEREAS, the Parties seek to amend the Omnibus Agreement to include certain assets that, by and among Company, the Partnership and the General Partner (such assets, the “ 2014 Contributed Assets ”).

NOW THEREFORE , for and in consideration of the forgoing, the mutual covenants, terms and conditions of the Agreement, as amended by this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:


1.	Unless otherwise noted, the capitalized terms used herein shall have the definitions set forth in the Omnibus Agreement.


2.	Section 1.01(aaa) of the Omnibus Agreement is hereby amended and restated in its entirety as follows:

“(aaa) “Services” means (a) the 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, and (b) any other operational and administrative support services that the Parties mutually agree will be provided by Company and its Affiliates from time to time in support of the Assets and any other assets acquired or developed by the Partnership Group (including the 2014 Contributed Assets).”


3.	Section 4.01(a) of the Omnibus Agreement is hereby amended and restated in its entirety as follows:

“(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, the Services. As consideration for the Services, the Partnership will pay Company an operational and administrative support fee of $2,302,300.00 per Month (as adjusted pursuant to Section 4.01(b) and (c), the “Operational and Administrative Support Fee”), 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 the 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 relevant 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.”


4.	Section 4.01(c) of the Omnibus Agreement is hereby amended and restated in its entirety as follows:

“(c) From time to time:


(i)	the Partnership will have the right to submit to Company a proposal to reduce 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 will have the right to submit to the Partnership a proposal 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 Operational and Administrative Support Fee shall be changed as of the first day of the Month following such agreement.”


5.	This Amendment shall be effective as of March 1, 2014.


6.	Except as expressly set forth herein, all other terms and conditions of the Omnibus Agreement shall remain in full force and effect.

[ Signature Pages Follow ]

IN WITNESS WHEREOF, the duly authorized representatives of the Parties have executed this Amendment as of the date first above written.



PHILLIPS 66 COMPANY
By:	/s/ T.G. Taylor
	T.G. Taylor
	Executive Vice President, Commercial, Marketing, Transportation and Business Development



PHILLIPS 66 PIPELINE LLC
By:	/s/ C.L. Brooks
	C.L. Brooks
	Vice President



PHILLIPS 66 PARTNERS LP
By:	Phillips 66 Partners GP, LLC, General Partner of Phillips 66 Partners LP
By:	/s/ J.T. Liberti
	J.T. Liberti
	Vice President and Chief Operating Officer



PHILLIPS 66 PARTNERS GP, LLC
By:	/s/ J.T. Liberti
	J.T. Liberti
	Vice President and Chief Operating Officer



PHILLIPS 66 PARTNERS HOLDINGS LLC
By:	Phillips 66 Partners LP, Sole Member of Phillips 66 Partners Holdings LLC
By:	Phillips 66 Partners GP, LLC, General Partner of Phillips 66 Partners LP
By:	/s/ J.T. Liberti
	J.T. Liberti
	Vice President and Chief Operating Officer



PHILLIPS 66 CARRIER LLC
By:	Phillips 66 Partners Holdings LLC, Sole Member of Phillips 66 Carrier LLC
By:	Phillips 66 Partners LP, Sole Member of Phillips 66 Partners Holdings LLC
By:	Phillips 66 Partners GP, LLC, General Partner of Phillips 66 Partners LP
By:	/s/ J.T. Liberti
	J.T. Liberti
	Vice President and Chief Operating Officer

Exhibit 10.2

Execution Version

FIRST AMENDMENT TO THE OPERATIONAL SERVICES AGREEMENT

This First Amendment to the Operational Services Agreement (“Amendment”) is made and entered into as of the 28th day of February, 2014, 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 .”

WITNESSETH:

WHEREAS , Company and Operator are parties to that certain Operational Services Agreement dated June 26, 2013 (the “Operational Services Agreement”);

WHEREAS , Company is acquiring an additional refined products pipeline, several terminals and a storage facility during the first quarter of 2014; and

WHEREAS , Company and Operator desire that Operator maintain and operate such assets for Company, and the parties hereto wish to amend the Operational Services Agreement accordingly.

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:


1.	Unless otherwise noted, the capitalized terms used herein shall have the definitions set forth in the Operational Services Agreement.


2.	Section 1.01(oo) and Section 1.01(pp) of the Operational Services Agreement are hereby renumbered as Section 1.01(pp) and Section 1.01(qq), respectively.


3.	Section 1.01(oo) is hereby added to the Operational Services Agreement as follows:

“(oo) “Storage Facilities” means the spheres, tanks and other storage facilities identified in Exhibit A hereto, and any other spheres, caverns, tanks or storage facilities used to store commodities that Operator agrees to operate on behalf of Company upon reasonable request by Company.”


4.	Unless otherwise determined by context, all occurrences of the term “Pipeline and Terminals” (or singular versions thereof) in the Operational Services Agreement shall be deemed to include reference to “Storage Facilities.”


5.	Exhibit A to the Operational Services Agreement is hereby deleted in its entirety and replaced by the First Amended Exhibit A attached hereto.


6.	Exhibit B to the Operational Services Agreement is hereby deleted in its entirety and replaced by the First Amended Exhibit B attached hereto.


7.	Exhibit C to the Operational Services Agreement is hereby deleted in its entirety and replaced by the First Amended Exhibit C attached hereto.


8.	Exhibit D to the Operational Services Agreement is hereby deleted in its entirety and replaced by the First Amended Exhibit D attached hereto.


9.	Exhibit E to the Operational Services Agreement is hereby deleted in its entirety and replaced by the First Amended Exhibit E attached hereto.


10.	Exhibit F to the Operational Services Agreement is hereby deleted in its entirety and replaced by the First Amended Exhibit F attached hereto.


11.	Exhibit G to the Operational Services Agreement is hereby deleted in its entirety and replaced by the First Amended Exhibit G attached hereto.


12.	This Amendment shall be effective as of March 1, 2014.


13.	Except as expressly set forth herein, all other terms and conditions of the Operational Services Agreement shall remain in full force and effect.

[Signature page follows.]

IN WITNESS WHEREOF , the Parties have caused this Agreement to be signed by their duly authorized officers as of the date first set forth above.



PHILLIPS 66 PIPELINE LLC
By:	/s/ C.L. Brooks
	C.L. Brooks
	Vice President



PHILLIPS 66 CARRIER LLC
By:	Phillips 66 Partners Holdings LLC, Sole Member of Phillips 66 Carrier LLC
By:	Phillips 66 Partners LP, Sole Member of Phillips 66 Partners Holdings LLC
By:	Phillips 66 Partners GP, LLC, General Partner of Phillips 66 Partners LP
By:	/s/ J.T. Liberti
	J.T. Liberti
	Vice President and Chief Operating Officer



PHILLIPS 66 PARTNERS HOLDINGS LLC
By:	Phillips 66 Partners LP, Sole Member of Phillips 66 Partners Holdings LLC
By:	Phillips 66 Partners GP, LLC, General Partner of Phillips 66 Partners LP
By:	/s/ J.T. Liberti
	J.T. Liberti
	Vice President and Chief Operating Officer

First Amended Exhibit A

Description of Pipelines, Terminals and Storage Facilities

Attached to and made a part of that certain Operational Services Agreement, dated June 26, 2013, as amended by the First Amendment to the Operational Services Agreement entered into as of the 28 ^th day of February 2014 but effective as of March 1, 2014, by and among Phillips 66 Carrier LLC, Phillips 66 Partners Holdings LLC and Phillips 66 Pipeline LLC:

Crude Oil Pipelines

Clifton Ridge to Lake Charles refinery - a 20” crude oil pipeline extending from the Clifton Ridge marine terminal to the Lake Charles Refinery, in Calcasieu Parish, Louisiana.

Pecan Grove to Clifton Ridge - a 12” crude oil pipeline extending from the Pecan Grove marine terminal to the Clifton Ridge marine terminal, in Calcasieu Parish, Louisiana.

Shell to Clifton Ridge - a 20” crude oil pipeline extending from Shell’s Houma to Houston pipeline to the Clifton Ridge marine terminal, in Calcasieu Parish Louisiana.

Refined Product Pipelines

Sweeny to Pasadena - a 12” refined products pipeline extending from the Sweeny Refinery, in Brazoria County, Texas to the Pasadena terminal, in Harris County, Texas.

Sweeny to Pasadena - a 18” refined products pipeline extending from the Sweeny Refinery, in Brazoria County, Texas to the Pasadena terminal, in Harris County, Texas.

Wood River to Hartford - a 12” refined products pipeline extending from the Wood River Refinery, in Madison County, Illinois to the Hartford terminal, in Madison County, Illinois.

Hartford to Explorer - a 24” refined products pipeline extending from the Hartford terminal, in Madison County, Illinois to the Explorer Pipeline system in Madison County, Illinois.

Gold Line - a multi-diameter refined products pipeline system extending from the Rocky Station fence line at Phillips 66 Pipeline LLC’s Borger Products Terminal located in Borger, Texas, to terminal facilities located in Wichita, Kansas, Paola, Kansas, Kansas City, Kansas, Jefferson City, Missouri and Cahokia, Illinois.

Terminals

Hartford Terminal . Hartford Terminal is located at or near Hartford, Illinois. The facility consists of a two-bay truck rack with 17,000 barrels of active terminaling capacity, 13 above-ground storage tanks with approximately 1.1 million barrels of total storage capacity. The Hartford barge dock consists of a single-berth barge loading facility, approximately 0.8 miles of 8-inch pipeline and approximately 0.8 miles of 14-inch pipeline from the Hartford terminal to the Hartford barge dock for delivery.

Pasadena Terminal . Pasadena Terminal is located at or near Pasadena, Texas and consists of a five-bay truck rack and tankage with 65,000 barrels per day of active terminaling capacity, 22 above ground storage tanks with approximately 3.2 million barrels of total storage capacity and a vapor combustion unit.

Clifton Ridge Terminal . Clifton Ridge Terminal is located at or near Sulphur, Louisiana and consists of a single-berth ship dock, 12 above-ground storage tanks with approximately 3.4 million barrels of total storage capacity and a truck offloading facility.

Pecan Grove Terminal . Pecan Grove terminal is adjacent to the Clifton Ridge Terminal. The facility consists of a single-berth barge dock and three above-ground storage tanks with 142,000 barrels of total storage capacity.

Wichita North Terminal . Wichita North Terminal is located in Wichita, Kansas adjacent to the Gold Line pipeline system. It consists of a two bay truck rack with 12,000 barrels of total storage capacity.

Paola Terminal . Paola Terminal is located in Paola, Kansas adjacent to the Gold Line pipeline system. It consists of 98,000 barrels of total storage capacity.

Kansas City Terminal . Kansas City Terminal is located in Kansas City, Kansas adjacent to the Gold Line pipeline system. It consists of a five bay truck rack with 66,000 barrels of total storage capacity.

Jeff City Terminal . Jeff City Terminal is located in Jefferson City, Missouri adjacent to the Gold Line pipeline system. It consists of a two bay truck rack with 16,000 barrels of total storage capacity.

East St. Louis Terminal . East St. Louis Terminal is located in Cahokia, Illinois adjacent to the Gold Line pipeline system. It consists of a six bay truck rack with 78,000 barrels of total storage capacity.

Storage Facilities

Medford Storage Spheres . Medford Storage Spheres are two above ground storage facilities located at the Central Division pipeline facility in Medford, Oklahoma. The working capacity of each sphere is 35,000 barrels, and the spheres are capable of receiving and storing natural gas liquids and petrochemicals, including refinery grade propylene.

Storage Tank Nos. 1001, 1002 and 1004 at the Wichita North Terminal . These storage tanks have a nominal shell capacity of 107,000 barrels, 107,000 barrels, and 108,000 barrels, respectively.

Storage Tank Nos. 8005 and 8010 at the Kansas City Terminal . These storage tanks have a nominal shell capacity of 80,000 barrels and 101,000 barrels, respectively.

Storage Tank Nos. 1503, 2001, 1302 at the East St. Louis Terminal . These storage tanks have a nominal shell capacity of 172,000 barrels, two hundred thousand 200,000 barrels and 135,000 barrels, respectively.

Storage Tank No. 4901 at the Paola Terminal . This storage tank has a nominal shell capacity of 98,000 barrels.

Storage Tank Nos. 6813 and 6818 at the East St. Louis Terminal . Each of these storage tanks has a nominal shell storage capacity of 80,000 barrels.

First Amended Exhibit B

Maintenance Services


(a)	Day-to-day routine and emergency supervision, administrative liaison and related services required in connection with the maintenance and repair of the Pipelines and Terminals.


(b)	Provision of communications, inspection, surveillance, flow control, corrosion control, and monitoring.


(c)	Maintenance and repair of the Pipelines and Terminals within such maintenance/repair parameters and specifications as may be in accordance with sound engineering and maintenance practices and applicable Laws.


(d)	Implementation of a preventative maintenance program for the Pipelines and Terminals, including, without limitation, periodic testing, adjustment and maintenance of the Pipelines and Terminals, in each case in accordance with prudent maintenance practices and applicable Laws.


(e)	Implementation of a tank maintenance and integrity program for the Pipelines and Terminals, including, without limitation, periodic testing, maintenance, repair and/or replacement in each case in accordance with prudent maintenance practices and applicable Laws.


(f)	Implementation of a marine facility maintenance and integrity program for the Terminals, including, without limitation, dredging, maintenance, repair, and/or replacement in each case in accordance with prudent maintenance practices and applicable Laws.


(g)	Preparation and retention of appropriate records and logs as required by applicable Laws and that a prudent provider of maintenance services would maintain regarding the Pipelines and Terminals, which records and logs shall be made available to Company upon request.


(h)	Reconstruction, reconditioning, overhaul or replacement of the Pipelines and Terminals.


(i)	Establishment of safety, health, environmental, training, emergency response, spill response and other programs in connection with the maintenance and repair of the Pipelines and Terminals, in each case as may be required by prudent maintenance practices or under applicable Laws.


(j)	Providing technical services for purposes of trouble-shooting problems, improving Pipeline and Terminal performance, upgrading the Pipelines and Terminals, repairing the Pipelines and Terminals or meeting regulatory or safety requirements.


(k)	Maintaining compliance with all applicable federal, state and local environmental, health and safety Laws; in addition, conducting all environmental investigation and remediation activities, as required by federal, state and local environmental Laws and/or prudent business practices.


(l)	Facilitate the acquisition of all materials (including spare parts inventories), equipment, services, supplies and labor necessary for the maintenance and repair of the Pipelines and Terminals.


(m)	Perform all planning, design and engineering functions related to the maintenance and repair of the Pipelines and Terminals; selecting contractors and material suppliers for such activities.


(n)	Advise Company of major plans or significant changes in the maintenance or repair of the Pipelines and Terminals.


(o)	Close Pipeline valves in connection with a response to any emergency affecting the Pipelines. The Pipelines shall remain down until such time that it is determined safe by Company (in consultation with Operator) to resume operation. For normal scheduled maintenance, Operator will provide Company with sufficient advance Notice for Company’s planning purposes.


(p)	Prepare excavation plans for Pipeline right-of-way work, and advise Company of any right-of-way work which could threaten the integrity of the Pipelines.


(q)	Such other Pipeline and Terminal maintenance, repair and related services as Company may request from time to time.

(r)

The Maintenance Services to be performed by Operator hereunder shall include, but shall not be limited to, Pipeline repairs, Terminal repairs, aerial pipeline patrols, population density counts, right-of-way maintenance, gas leakage surveys, pipeline pigging operations, cathodic protection work as required by all governmental regulatory agencies, tank cleaning, tank repair and truck rack maintenance. Operator will maintain suitable meter station, valve inspection and meter proving maintenance programs. Any operating or maintenance deficiencies so discovered in the Pipelines or Terminals, or any appurtenances thereto, will be corrected by Operator. Operator will provide inspectors for monitoring work performed by others in the vicinity of the Pipelines and Terminals.

(s)

Right-of-Way maintenance shall include, but not be limited to, filling of washes, mowing weeds and brush, and repair fences. In all cases where Company’s Pipelines are exposed above the ground, fences, barricades or other suitable protection shall be erected to protect the Pipelines and associated equipment from damage due to mowers, trucks or other vehicles. In the event that any known excavation is to be performed in the vicinity of Company’s Pipelines by Operator or third parties, Operator shall locate, flag and identify the pertinent lines. Operator shall also provide a qualified inspector on-site during periods of construction activity. If a Company Pipeline should be damaged, a prompt report shall be forwarded to Company describing the incident, extent of damage, and recommended course of action.

First Amended Exhibit C

Operating Services


(a)	Day-to-day routine and emergency supervision of the operation of the Pipelines and Terminals.


(b)	Operation of the Pipelines and Terminals’ pump stations and other facilities within such operating parameters and specifications as may be in accordance with sound engineering and operating practices and applicable Laws.


(c)	Preparation and retention of appropriate records and logs as required by applicable Laws and that a prudent provider of operating services would maintain regarding the Pipelines and Terminals, which records and logs shall be made available to Company upon request.


(d)	Operator shall perform monitoring and control services (SCADA) for the Pipelines. Operator shall be responsible for the maintenance of the Pipeline meter station equipment required for performance of monitoring and control services, product analysis, and custody transfer measurements in accordance with Company requirements and/or generally accepted industry practices.


(e)	Operator shall conduct the actual operations and maintenance of the Pipelines and Terminals in accordance with the directions for product and feedstock movements given by Company, and shall employ such of its own or outside personnel as may be necessary to perform this operation and maintenance.


(f)	Determine net volume received and delivered by utilizing measurement facilities comprised of components of standard make, installed, operated and maintained in accordance with the latest edition of the American Petroleum Institute Manual of Petroleum Measurement Standards and standard industry practices, and reconcile book inventory with actual inventory.


(g)	Payment of damages in accordance with Section 2.06 of the Agreement occurring as a result of, or settlement of, claims made in connection with the Pipelines and Terminals and Operator’s operation, maintenance and repair activities.

(h)

Operator shall include the operation of the Pipeline meter stations including calibration of measurement and product analysis equipment, operation of booster pumps, providing custody measurement as required by Company and the coordination of product and feedstock movements as directed by Company. Operator will provide sufficient on-the-job and outside training to its employees and contractors operating and maintaining the Pipelines and Terminals for the operation thereof in a safe and efficient manner in accordance with applicable Operator and governmental rules and regulations and Laws. Operator shall prepare, file and renew, as applicable, all operating licenses and/or permits as directed by Company. Operator shall also be responsible for arranging for payment of any fees in regard to operation of the Pipelines and Terminals.


(i)	Operator will close Pipeline valves in connection with a response to any emergency involving the Pipelines. The Pipelines shall remain down until such time as it is deemed safe by Company (in consultation with Operator) to resume operation.


(j)	Such other operating services as Company may request from time to time.

First Amended Exhibit D

Administrative Services


(a)	As directed by Company, preparation, filing and renewal, as applicable, of tariffs with FERC and/or state agencies.


(b)	As directed by Company, preparation and filing of permits, permit updates, and other documents required by any regulatory body or government agency, federal, state or local, if any, having jurisdiction over Operator, Company or their respective businesses.


(c)	Maintain fixed asset records of the Pipelines, Terminals and/or other regulated pipeline systems or terminals that Operator may operate upon request by Company and acceptance by Operator.


(d)	Product quality and assurance.


(e)	Such other administrative services as Company may request from time to time.

First Amended Exhibit E

Construction Services


(a)	Construction, reconstruction, reconditioning, overhaul and replacement of Pipelines and Terminals and their related facilities.


(b)	Provide such oversight and management services as may be necessary in connection with the activities described in item (a) above.


(c)	Perform all planning, design and engineering functions related to the activities described in item (a) above as may be necessary.


(d)	Facilitate the acquisition of all materials, equipment, services, supplies and labor necessary for and related to the activities described in item (a) above.


(e)	Prepare and/or assist in the preparation of capital project (AFE) documents for approval by Company.

First Amended Exhibit F

Accounting Procedures

This Exhibit shall govern the Accounting Procedures with regard to the billing and/or reimbursement of costs incurred by Operator in connection with the performance by Operator of the Services pursuant to the Agreement. These Accounting Procedures shall be effective from the date hereof until replaced or modified by mutual agreement of the Parties.


1.	General Provisions


(a)	Statements and Billings . Operator shall record Company’s financial transactions resulting from the Agreement in Operator’s financial system and allow Company to access its records in that system.


(b)	Payments by Company . Company shall pay all charges from Operator in accordance with Section 3.05 of the Agreement.

(c)

Adjustments . Except as otherwise provided in the Agreement, the actual payment of any such bills shall not prejudice the right of Company to protest or question the correctness or appropriateness thereof; provided, however, that all bills and statements rendered to Company during any calendar Year shall conclusively be presumed to be true and correct after twenty-four (24) Months following the end of any such calendar Year, unless prior to the end of said twenty-four (24) Month period Company takes written exception thereto and makes a claim against Operator for adjustment.


(d)	Financial Records . Operator shall maintain accurate books and records in accordance with GAAP (as may be modified by FERC requirements) and in accordance with the prescribed accounting requirements or system of accounts mandated by any regulatory body or government agency, both federal and state, if any, having jurisdiction over Operator, Company, or their respective businesses.

2. Determination of Costs, Expenses and Expenditures

Subject to the limitations and determinations hereinafter prescribed and the provisions of the Agreement, Operator shall be reimbursed for all costs, expenses, expenditures and fees by or on behalf of Operator in connection with the provision of the Services. Such reimbursement shall include any necessary Direct Costs (as defined in Paragraph 3 below) and the applicable portion of the Management Fee (as defined in the Omnibus Agreement).

(a)

It is the intent of the Parties that Services provided by employees of Operator shall be budgeted and billed by Operator on a Direct Cost basis pursuant to Section 3.03(a) of the Agreement to the extent that is feasible to measure and account for the Services directly provided by such employees to Operator by means of time sheets or other methods approved by Company. Direct Costs billed to Company shall normally include field operation and maintenance personnel, administrative personnel supporting Company on a full time or near full time basis, and Home Office personnel

(such as engineering and drafting personnel) typically assigned directly to Company-related projects whose time is accounted for by time sheets or other methods approved by Company.


(b)	It is the intent of the Parties that routine, ongoing Services (Home Office Overhead, General and Administrative Costs (hereinafter “G&A Costs”)) benefiting Company that are not feasible to measure and account for on a Direct Cost basis shall be billed by Operator as part of the Operational and Administrative Services Fee under the Omnibus Agreement.


(c)	It is the intent of the Parties that any G&A Costs associated with Company capital projects be billed as a Direct Cost and submitted as a line item on capital appropriations submitted by Operator to Company for approval. Such G&A Costs shall not be included in the Operational and Administrative Services Fee under the Omnibus Agreement.

(d)

Operator reserves the right to submit for Company review and approval unusual G&A Costs that do not fit normal business billing patterns. Such costs might be for items that in Operator’s judgment are outside the scope of the Administrative Fee work such as engineering and drafting. (An example of this might be Operator’s attorney devoting several weeks exclusively to Company to handle a Company related issue.)

3. Direct Costs

Reimbursement of Operator shall include, but shall not be limited to, the right to reimbursement for the following Direct Costs:


(a)	Labor and Benefits .

Salaries and wages of Operator’s employees (or employees of Operator’s Affiliate) directly assigned to the operation, maintenance, project work, or other work relating to Company’s Pipelines and Terminals, including that portion of such employees’ time related to ancillary activities such as training required by Operator, and in any other activities required of Operator pursuant to the Agreement.

ii.

Operator’s costs of all payroll taxes, and benefits and allowances and any other payment paid or contributed by Operator which is measured by Operator’s employees’ compensation; the above to include without limitation F.I.C.A., Operator’s costs of holiday, vacation, sickness and disability and other customary allowances, Operator’s current costs of established plans for employees’ group life insurance, hospitalization, retirement, stock purchase, and other benefit plans of a like nature. Such costs will be charged on a percentage assessment rate on the amount of salaries and wages chargeable to Company under Paragraph 3(a)(i) above. The percentage assessment rate shall be based on Operator’s actual cost experience. Company payment to Operator for Operator’s workers’ compensation insurance premium is provided for in Paragraph 3(h) below and not in this Paragraph 3(a)(ii).


(b)	Plant, Property and Equipment . The cost of plant, property and equipment purchased, leased or rented from suppliers and vendors expressly for the purpose of providing Services to Company under the Agreement.

(c)

Materials, Supplies, Tools and Miscellaneous Equipment . Any materials, supplies, tools and miscellaneous equipment purchased or furnished by Operator for the benefit of Company shall be priced at cost. Equipment provided by Company warehouse shall be priced at replacement value. For equipment or materials that are transported to a location by Operator for the benefit of Company, any costs or expenses incurred by Operator in connection therewith shall be reimbursed

at cost. Operator shall make reasonable efforts to ensure costs for such materials, supplies, tools and miscellaneous equipment are compatible with industry norms.

(d)

Reimbursable Expenses of Employees . Operator shall bill Company for reasonable personal expenses of its (or its Affiliates’) employees whose salaries, wages and labor costs are chargeable under Paragraph 3(a)(i) above. Such reasonable personal expense shall include out-of-pocket expenditures incurred by employees in the performance of their duties on behalf of Company and which were reimbursed under the terms of Operator’s official policy governing reimbursable employee expenses.

(e)

Autos, Trucks and Heavy Mobile Work Equipment . All automotive, truck and other mobile equipment shall be charged on a direct charge basis that is consistent with Operators practices in charging such costs to its own facilities. When a driver or operator is furnished with any such equipment, the rental rate of such equipment shall not include wages and expenses of the driver or operator if they will be charged separately.


(f)	Permits, Licenses and Bond . Cost of permits, licenses and bond premiums necessary to perform and provide Services for the Pipelines and Terminals.

(g)

Outside Services . The cost of outside services and expertise, including but not limited to engineering, fees from consultants on regulatory matters, provided that the outside services rendered were for the benefit of Company under the Agreement, including the cost of contract services required or necessary in the opinion of Operator in connection with the provision of the Services. Operator shall make reasonable efforts to ensure costs for such services are competitive with industry norms.


(h)	Insurance . Workers’ compensation insurance premiums paid or allocated as respects Operator’s employees performing Services under the Agreement, not to exceed state manual rates for such insurance on a guaranteed cost basis and charged as an amount per $100 of payroll.


(i)	Utilities, Communication and Power . All costs incurred by Operator on behalf of Company for utility, communication and power services, plus fuel costs.


(j)	Maintenance and Repair . All costs incurred to maintain the Pipelines and Terminals and related facilities, periodically inspect the Pipelines and Terminals for damages or other conditions that could affect the safe, efficient and economical operation of the Pipelines and Terminals, and perform such repairs to the Pipelines and Terminals as may be required.

(k)

Legal Expenses and Claims . (i) All costs and expenses, net of insurance proceeds, of handling, investigating and settling litigation or Claims arising by reason of the provision of the Services, or necessary to protect or recover any of Company’s property, including, but not limited to, attorneys fees, court costs, cost of investigation or procuring evidence and any judgments paid or amounts paid in settlement or satisfaction of any such litigation or claims. (Note: a “baseload” level of in-house legal assistance for Company is provided and is included by Operator in the Operational and Administrative Services Fee under the Omnibus Agreement.)

(l)

Damages and Losses to Pipelines and Terminals . To the extent not covered by insurance, all costs or expenses necessary for the repair or replacement of the Pipelines and Terminals made necessary because of damages or losses incurred by fire, floods, earthquake, storm, theft, chemicals spills, accident, or other cause, except those costs or expenses which Operator is liable for pursuant to Article VI of the Agreement to which this Exhibit is attached. Operator shall furnish Company Notice of damages or losses incurred as soon as practicable after a report thereof has been received.


(m)	Right-of-Way Costs . The costs of rights-of-way and land purchases, damages and appraisals, and legal, regulatory and permit fees specifically related thereto.

(n)

Taxes . All Taxes of every kind and nature assessed or levied upon or incurred in connection with the Pipelines and Terminals that have been paid by Operator for the benefit of Company, including any charges or penalties for late payment thereof, provided such late charge or fee did not arise from Operator’s gross negligence of willful misconduct in the filing and payment of the appropriate Tax.


(o)	Regulatory Costs . The cost of complying with mandated regulatory programs, including, but not limited to, DOT operator qualification training.


(p)	Other Expenditures . Any other expenditure not covered or dealt with in the foregoing provisions of Paragraphs 3(a) through (o), and that is incurred by Operator in the necessary and proper conduct of the Services, and that may be captured and billed to Company on a Direct Cost basis.

First Amended Exhibit G

Arbitration Procedure

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

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


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


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

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

Exhibit 10.3

Execution Version

GOLD LINE ORIGINATION SERVICES AGREEMENT

This Gold Line Origination Services Agreement is made and entered into as of the Effective Date, by and between PHILLIPS 66 CARRIER LLC , a Delaware limited liability company (“ Carrier ”) and PHILLIPS 66 PIPELINE LLC , a Delaware limited liability company (“ Operator ”).

WITNESSETH:

WHEREAS , Carrier owns a refined products pipeline system originating outside of the fence line at Operator’s Rocky Station (as hereinafter defined) near the Borger Refinery in Borger, Texas (“ Borger Refinery ”), and continuing to terminals located in Wichita, Kansas; Kansas City, Kansas; Paola, Kansas; Jefferson City, Missouri; and Cahokia , Illinois (“ Gold Line ”);

WHEREAS , the facilities and equipment at Rocky Station are used to originate the product on the Gold Line and other pipelines that connect upstream of the fence line at Rocky Station; and

WHEREAS , Carrier has requested that Operator use the facilities and equipment at Rocky Station to originate the transportation transactions for the Gold Line and Operator has agreed to provide this service.

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 Carrier and Operator, Carrier and Operator agree as follows:


ArticleI	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 Agreement (as hereinafter defined):

(a)

“ 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 clause (i) above. Other than solely for the purpose of Section 3.01 , Carrier and Operator shall not be considered Affiliates of one another.


(b)	“ Agreement ” means this Gold Line Origination 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.

(c)

“ 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.


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


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

(f)

“ 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.


(g)	“ Claim Notice ” has the meaning set forth in Section 4.04 hereof.


(h)	“ 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.


(i)	“ 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.


(j)	“ Effective Date ” means March 1, 2014.


(k)	“ Force Majeure ” has the meaning set forth in Section 6.02.


(l)	“ Indemnified Party ” or “ Indemnified Parties ” has the meaning set forth in Section 4.01.


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

(n)

“ 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 Carrier, 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.


(o)	“ Month ” 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.


(p)	“Non-routine Work” has the meaning set forth in Article II.


(q)	“ 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.


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


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


(t)	“ Operational Services Agreement ” means that certain Operational Services Agreement dated as of July 26, 2013, as amended from time to time, by and among the Parties and the other parties thereto.


(u)	“ Parties ” means Carrier and Operator, collectively.


(v)	“ Partnership Change of Control ” means Phillips 66 Company, a Delaware corporation, ceases to Control the general partner of Phillips 66 Partners LP by virtue of any affiliate of Phillips 66 Company

being removed as the general partner of Phillips 66 Partners LP under the terms of the limited partnership agreement of Phillips 66 Partners LP.


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


(x)	“ 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.


(y)	“ Pricing Expert ” has the meaning set forth in Section 5.07(b).


(z)	“ Rocky Station ” means that certain pipeline station owned by Operator and located outside of the fence line at the Borger Refinery in Borger, Texas, including all facilities and equipment included therein, as shown on Exhibit A attached hereto.


(aa)	“ 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 other Law shall be deemed also to refer to all rules, regulations and directives promulgated thereunder (and to any successor provision).


ArticleII	Responsibilities of Operator

2.01 Routine Services to be Provided by Operator . During the term of this Agreement, and subject to the terms and conditions hereof, Operator agrees to provide, or cause its Affiliates to provide, day-to-day routine or emergency operation, maintenance and repair of the facilities and equipment at Rocky Station and such other services as are necessary to physically originate product scheduled on the Gold Line, including but not limited to the services set forth on Exhibit B attached hereto (“ Origination Services ”). Certain of the Origination Services, including dehydration, filtration, pig launching, mainline boosting, facility control, barrel staging, sampling, custody transfer measurement and meter proving, will be provided using facilities at Rocky Station dedicated to the Gold Line. Certain other of the Origination Services, including firewall protection and wastewater treatment, will be provided using non-dedicated or shared facilities at Rocky Station.

(a)

In the event the cost of any operation, maintenance, repair or replacement of any facilities and equipment at Rocky Station that are necessary to perform the Origination Services (“Required Facilities”) equals or exceeds $130,000.00, and such operation, maintenance, repair or replacement is not part of the Origination Services (“ Non-routine Work ”), Operator shall seek prior approval from Carrier before performing any work on such facilities or equipment. To the extent the Non-routine Work is for non-dedicated facilities at Rocky Station, Operator will seek Carrier’s approval of its proportionate share of the costs to be determined based Carrier’s portion of the total volumes originating at the Rocky Station over the prior twelve (12) Months. If Carrier gives its approval of such costs, Operator will undertake such Non-routine Work and the Origination Fee (as hereinafter defined) will be increased, or an alternate mechanism shall be adopted, to allow Operator to recover over time Carrier’s proportionate share of the costs incurred by Operator in undertaking such Non-

routine Work. In the event Carrier does not give its approval for Non-routine Work and Operator reasonably determines that such Non-routine Work is necessary to comply with the requirements set forth herein, then Operator may terminate this Agreement, effective no earlier than 60 Days following delivery of Notice to Carrier.


(b)	In the event of an emergency situation requiring immediate Non-routine Work, Operator shall perform any Non-routine Work necessary to address or resolve the emergency situation. To the extent any such Non-routine Work will involve the expenditure of $130,000.00 or more, Operator shall promptly notify Carrier of the emergency situation requiring such Non-routine Work.

(c)

If new Laws require Operator to make substantial and unanticipated expenditures in connection with the provision of the Origination Services, Carrier will reimburse Operator for Carrier’s proportionate share of the costs incurred by Operator in complying with such Laws or, at Carrier’s option and if the Parties agree, the Origination Fee will be increased or an alternate mechanism will be adopted to allow Operator to recover over time Carrier’s proportionate share of the costs incurred by Operator in complying with such Laws. Carrier’s proportionate share shall be determined based on Carrier’s portion of the total volumes originating at the Rocky Station over the prior twelve (12) Months.

(d)

Operator shall maintain a true and correct set of records pertaining to all activities relating to its performance of the Origination Services and any Non-routine Work hereunder. 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 Origination Services or Non-routine Work was performed. Carrier, or its authorized representative or representatives, shall have the right during Operator’s Normal Business Hours to audit, copy and inspect, at Carrier’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 Carrier during any calendar Year and shall be completed within a reasonable time frame not to exceed thirty (30) Days. Carrier 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. Carrier 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.

2.02 Manner of Performing/Providing Services . The Origination Services shall be performed and provided in an efficient and prudent manner with the same degree of diligence and care that Operator would exercise in providing similar services with respect to its own operations and in all respects in accordance with all applicable Laws relating to Operator, Carrier and the Gold Line. Operator shall provide the Origination Services in a safe, professional and economical manner and shall advise Carrier in a timely fashion of all matters of significance that could affect the safety or economics relating to the Origination Services so that Carrier can make appropriate decisions with respect thereto.


ArticleIII	Financial Accounting and Billing Practices

3.01 Compensation . As consideration for the Origination Services, Carrier shall pay Operator a fee, initially in the amount of $110,000.00 per Month (as may be adjusted in accordance with the provisions of this Agreement, the “ Origination Fee ”) no later than the 21st Day of the Month in which the Origination Services are rendered, provided that if such Day is not a Business Day, then Carrier 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 (or if the Origination Fee is adjusted pursuant to this Agreement in the middle of any Month), then the Origination Fee for the relevant 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. As long as Carrier is an Affiliate of Operator, Carrier and Operator may settle the financial obligations to Operator through Operator’s normal interaffiliate settlement processes.

3.02 Adjustments. As of January 1, 2016, and as of January 1 of each year thereafter while this Agreement is in effect, Operator may adjust the Origination Fee by a percentage equal to the greater of zero and the positive change in the Producer Price Index for Finished Goods (Series ID WPUSOP3000) (the “ PPI-FG ”), as reported during the Month of October immediately before the effective date of the adjustment, with respect to the 12-Month period ending at the end of the Month of September immediately preceding such publication, provided that if, with respect to any such 12-Month period or periods, the PPI-FG has decreased, Operator may subsequently increase the Origination Fee only to the extent that the percentage change in the PPI-FG since the most recent previous increase in such fees is greater than the aggregate amount of the cumulative decreases in the PPI-FG during the intervening period or periods.

3.03 Origination Fee Reopener . No more frequently than once with respect to the Initial Term or any individual Renewal Term, as applicable, either Carrier or Operator may, upon delivery of Notice to the other Party, initiate negotiations between the Parties for the purpose of revising the Origination Fee; provided, however , that such Notice may not be delivered (a) in the case of the Initial Term, prior to the fifth anniversary of the Effective Date and (b) in the case of any Renewal Term, prior to the date that is 90 Days prior to the commencement of such Renewal Term. Immediately upon receipt of such Notice, Carrier and Operator will negotiate in good faith to revise the Origination Fee. Unless the Parties agree otherwise, if the negotiation is not concluded within 120 Days following receipt of such Notice, Carrier and Operator will be deemed to be unable to agree upon a revised Origination Fee for purposes of Section 5.07 and the Origination Fee then in effect shall not be revised pursuant to this Section 3.03. However, if Carrier does not negotiate in good faith, or if Carrier requires changes to the Origination Fee that are not commercially reasonable, then Carrier’s Purchase Option as described in Section 5.07 shall be forfeited.


ArticleIV	Liability Standard and Indemnification

4.01 Liability Standard . Notwithstanding anything herein to the contrary, Operator shall only be liable to Carrier for gross negligence or willful or wanton misconduct in the performance of its obligations hereunder, AND 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 (EACH AN “INDEMNIFIED PARTY” AND COLLECTIVELY, “INDEMNIFIED PARTIES”) SHALL BE LIABLE TO CARRIER OR PERSONS WHO HAVE ACQUIRED INTERESTS IN CARRIER, 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 THE INDEMNIFIED PARTIES SHALL NOT BE LIABLE FOR THEIR OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE OR WILLFUL OR WANTON MISCONDUCT) (SOLE, PARTIAL OR CONCURRENT).

4.02 Indemnification . FROM AND AFTER THE DATE OF THIS AGREEMENT, CARRIER SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNIFIED PARTIES FROM, AGAINST AND IN RESPECT OF ANY AND ALL CLAIMS ASSERTED BY OR ON BEHALF OF ANY PERSON OTHER THAN CARRIER ARISING FROM, RELATING TO, OR ASSOCIATED WITH THE PERFORMANCE OR PROVISION OR FAILURE TO PERFORM OR PROVIDE BY OPERATOR

ANY OF THE ORIGINATION SERVICES OR THE FAILURE BY CARRIER 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.

4.03 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 loss of profits or business interruptions, however they may be caused.

4.04 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 IV, such Indemnified Party shall provide Notice to Carrier (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 Carrier of the receipt of such Notice as provided in the first sentence of this Section 4.04; 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 Carrier 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 IV.


ArticleV	Term and Termination

5.01 Term . Unless terminated in accordance with Section 2.01(a), Section 5.02, Section 5.03 or Section 5.05, this Agreement shall have a primary term commencing on the Effective Date and continuing for ten (10) years (the “ Initial Term ”). At the end of the Initial Term, this Agreement shall automatically extend for successive five-year renewal terms (each a “ Renewal Term ”) unless terminated by Operator or Carrier upon Notice from the terminating Party to the other Party no less than one hundred and eighty (180) Days prior to the end of the expiration of the Initial Term or any Renewal Term, as applicable. The Initial Term, together with any Renewal Term, shall be referred to in this Agreement as the “ Term .”

5.02 Termination Following a Force Majeure Event.

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

5.03 Special Termination by Operator .

If refinery operations at the Borger Refinery are suspended for a period of at least 12 consecutive Months, then after a public announcement of such suspension is made, Operator may provide Notice to Carrier of its intent to terminate this Agreement and this Agreement will be so terminated twelve (12) Months following the date such Notice is received by Carrier. In the event, prior to the expiration of such 12-month period, a public announcement is made that operations will be resumed at the Borger Refinery, then such Notice shall be deemed revoked and this Agreement shall continue in full force and effect as if such Notice had never been delivered.

5.04 Termination by Carrier . Carrier 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 Carrier 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 Gold Line or Carrier’s business as it relates to the Gold Line, or (B) has engaged in a continued or regular pattern of gross negligence or willful or wanton misconduct that Carrier reasonably determines to pose a risk of resulting in a material adverse effect on the Gold Line or Carrier’s business as it relates to the Gold Line; provided that Carrier shall deliver to Operator Notice of any such affirmative finding, which shall include a reasonably detailed description of the basis therefor.

5.05 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.

5.06 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 Carrier its books and records relating to the Origination Services.

5.07 Purchase Option .

(a)

In the event (i) Operator intends to transfer any ownership interests in Rocky Station to a non-Affiliate, (ii) Carrier and Operator are unable to agree upon a revised Origination Fee as provided in accordance with Section 3.02, or (iii) Operator elects not to renew this Agreement in accordance with Section 5.01, then Carrier shall have the option to purchase (“ Purchase Option ”) a fifty percent (50%) undivided interest in Rocky Station based on the then-current market price of Rocky Station. In the event of clause (i) above, Operator must provide Notice to Carrier no later than sixty (60) Days prior to the effective date of the intended transfer. If Carrier elects to exercise its Purchase Option, Carrier must notify Operator within forty-five (45) Days of (i) Carrier’s receipt of Notice of the intended transfer, (ii) the date the Parties are deemed to be unable to agree upon the Origination Fee pursuant to Section 3.02 or (iii) Operator’s election not to renew this Agreement in accordance with Section 5.01.

(b)

If Carrier and Operator fail to agree upon the current market price of Rocky Station within 30 Days of Operator’s receipt of Carrier’s Notice that it will exercise the Purchase Option, the Parties shall engage a Pricing Expert to serve as an expert and resolve the matter (the “ Purchase Option Price Determination ”). The Pricing Expert shall be engaged within fifteen (15) Days from the date either Party delivers Notice to the other Party of its election to invoke the Purchase Option Price Determination as set forth in this Section 5.08(b). The “ Pricing Expert” shall be a Person with at least fifteen (15) years’ experience in the refined products supply and trading business who is knowledgeable about the provision of the Origination Services. Selection of the Pricing Expert shall be by mutual agreement of the Parties.

(c)

Within fifteen (15) Days of the engagement of the Pricing Expert, each of Carrier and Operator shall submit to the Pricing Expert its proposed current market price of Rocky Station, together with any documentation reasonably relevant to such matter (“ Pricing Submission ”). The Pricing Expert may pose, and shall consider each of the responses to, one set of written questions to each Party, to which

such Party shall respond within ten (10) Days of receipt. Each of the Parties shall instruct the Pricing Expert to render a determination of whether the price proposed by Carrier or Operator most nearly reflects the current market price of Rocky Station based upon actual and anticipated market conditions for the time period in consideration within twenty (20) Days of the Pricing Expert’s receipt of both Parties’ Pricing Submissions, regardless of whether the Pricing Expert has posed or the Parties have responded to written questions. For the avoidance of doubt, the Pricing Expert may select either the price proposed by Carrier or Operator, but no other price.


(d)	The price determined by the Pricing Expert shall be final and binding on the Parties except to the extent based on fraud or clear deviation from the requirements of this Agreement.


(e)	The costs of any Purchase Option Price Determination (excluding the cost of each Party’s and its respective advisors’ own preparation for and participation in a Purchase Option Price Determination) shall be shared equally by Carrier and Operator.


ArticleVI	Force Majeure

6.01 Force Majeure . If, because of an event of Force Majeure, either Party is rendered unable, wholly or in part, to carry out its obligations under this Agreement, other than the obligation to make money payments when due, and if such Party gives Notice and reasonably full particulars of such Force Majeure in writing to the other Party within a reasonable time after the occurrence of the cause relied upon, the Party giving such Notice, so far and to the extent that it is affected by such Force Majeure, shall not be liable in damages due to such Party’s failure to carry out its obligations under this Agreement; provided, however, that the cause of the event of Force Majeure shall be remedied with all reasonable dispatch.

6.02 Meaning of “Force Majeure” . As used herein, the term “Force Majeure” shall mean acts of God; strikes, lockouts or other industrial disturbances; acts of a public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, crevasses, subsidences, floods, washouts; arrests and restraints of the government, necessity for compliance with any court order, Law promulgated by any governmental authority having jurisdiction, either federal or state, civil or military; civil disturbances; shutdowns for purposes of necessary repairs; relocation or construction of facilities; breakage or accident to machinery or lines of pipe; the necessity for testing (as required by governmental authority or as deemed necessary by the testing Party for the safe operation thereof), the necessity of making repairs or alterations to machinery or lines of pipe; failure of surface equipment or pipelines; accidents, breakdowns, inability of either Party to obtain necessary material, supplies, permits or labor to perform or comply with any obligation or condition under this Agreement, or rights of way; and any other causes, whether of the kind herein enumerated or otherwise, which are not reasonably in the control of the Party claiming suspension.

6.03 Strikes or Lockouts . It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the Party having the difficulty and that the requirement in Section 6.01 that any event of Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the demands of an opposing party when such course is inadvisable in the discretion of the Party having the difficulty.

6.04 Performance by Carrier or Third Parties . If, because of an event of Force Majeure, Operator is unable to perform any part of the Origination Services, Carrier may perform such Origination Services itself or arrange for such Origination Services to be performed by a third party, but only for the duration of such event of Force Majeure.


ArticleVII	Notices

7.01 Notices . Unless otherwise specifically provided herein, 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; (ii) delivered and confirmed by telecopier or like transmission service; (iii) delivered by a reputable overnight courier delivery service; or (iv) sent by certified United States mail (postage prepaid, return receipt requested), addressed as follows:


If to Carrier:	Phillips 66 Carrier LLC

3010 Briarpark Drive

Houston, TX 77042

Attn: President

Copy to General Counsel


If to Operator:	Phillips 66 Pipeline LLC

3010 Briarpark Drive

Houston, TX 77042

Attn: President

7.02 Effective Date . Any Notice given in the manner set forth in Section 7.01 shall be effective upon actual receipt if received during the recipient’s Normal Business Hours or at the beginning of the recipient’s next Business Day if not received during the recipient’s Normal Business Hours.

7.03 Change of Address Notice . Either Party may change its Notice address by giving notice to the other Party in the manner set forth in Section 7.01; provided, however, that no change of address Notice shall be effective until actually received by the other Party.


ArticleVIII	Applicable Law

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


ArticleIX	Confidentiality

9.01 Confidentiality . During the term of this Agreement, each Party acknowledges that it will receive confidential business and technical information from or regarding the other Party. All information disclosed between the Parties will be deemed confidential, unless expressly designated otherwise at the time of disclosure. The receiving Party agrees not to disclose to any third Person, except as permitted herein, any confidential information it receives from the disclosing Party. The receiving Party agrees that it will not use the confidential information for any purpose other than the performance of this Agreement. The receiving Party may disclose confidential information: (i) when compelled by Law (but the receiving Party must notify the disclosing Party promptly of any request for such information before disclosing it, if practicable); and (ii) only to those employees, advisers, consultants, or representatives of the receiving Party who have a need to know (provided that such Persons are obligated to the receiving Party in a manner consistent with the terms of this Section). This Section 9.01 will be inoperative as to particular portion of the confidential information if such information (i) is or lawfully becomes available to the public through no fault of the receiving Party; (ii) was available to the receiving Party on a non-confidential bas is prior to its disclosure

to the receiving Party by the disclosing Party; (iii) becomes available to the receiving Party on a non-confidential basis from a source other than the disclosing Party when such source is entitled, to the best of the receiving Party’s knowledge, to make the disclosure to the receiving Party; or (iv) independently developed by or for the receiving Party by Persons who have not had access to the disclosing Party’s confidential information.


ArticleX	Disputes Between the Parties

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


ArticleXI	Miscellaneous

11.1 Assignability . Neither Party may assign its rights under this Agreement without the prior written consent of the other Party (which consent shall not be unreasonably delayed or withheld). However, either Party may assign this Agreement to any of its Affiliates by providing Notice to the other Party. Except as provided for herein, nothing in this Agreement is intended to confer any rights, benefits or obligations upon any Person other than the Parties and their respective successors and assigns.

11.2 Partnership Change in Control. Upon the occurrence of a Partnership Change in Control, Carrier shall provide Operator with Notice of such Partnership Change in Control at least 60 Days prior to the effective date thereof. At any time after six (6) months following receipt of such Notice, Operator may elect to terminate this Agreement, effective no earlier than the effective date of such Partnership Change in Control.

11.3 Compliance with Laws . This Agreement is in all respects subject to all Laws. The Parties shall at all times comply with all of these Laws as are applicable to their performance of this Agreement. If applicable, the Parties shall comply with the provisions of Executive Order 11246 (Equal Employment Opportunity), as amended, together with all rules, regulations and relevant orders of the United States Department of Labor. Notwithstanding the provisions of any other Section of this Agreement, Carrier shall have no liability hereunder for any fines, penalties, or other assessments by regulatory agencies if and to the extent such fines, penalties, or other assessments result from Operator’s sole negligence in performing its obligations hereunder.

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

11.5 Non-Waiver . The failure of either Party to enforce any provision, condition, covenant or requirement of this Agreement at any time shall not be construed to be a waiver of such provision, condition, covenant or requirement unless so notified by such Party in writing. No waiver by either Party of any default by the other Party in the performance of any provision, condition, covenant or requirement contained in this Agreement shall be deemed to be a waiver of, or in any manner release such other Party from performance of any other provision, condition, covenant or requirement herein contained, nor be deemed to be a waiver of the same provision, condition, covenant or requirement.

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

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

11.8 Survival . Any indemnification granted hereunder by one Party to another Party shall survive the termination of all or any part of this Agreement.

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

11.10 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 a Party by virtue of the authorship of any of the provisions of this Agreement.

11.11 Article Headings . The Article Headings used in this Agreement have been inserted only for convenience to facilitate reference and they shall not be determinative in construing the meaning, interpretation or application of any Article or provision hereof.

11.12 Exhibits . The exhibits referred to herein are attached hereto and by this reference are incorporated herein and made a part hereof. In the event there is any conflict between this Agreement and an exhibit, the provisions of this Agreement shall be deemed controlling.

11.13 Operation Services Agreement . The provisions of Section 2.06 (Claims), Article IV (Safety) and Section 5.01 (General Principles Regarding Relationship of the Parties) of the Operational Services Agreement (whether or not such agreement is in effect, terminated, suspended or expired) are incorporated by reference into this Agreement, mutatis mutandis.

[Signature page follows.]

IN WITNESS WHEREOF , the Parties have caused this Agreement to be signed by their duly authorized officers as of the Effective Date.



PHILLIPS 66 PIPELINE LLC
By:	/s/ C.L. Brooks
	C.L. Brooks
	Vice President



PHILLIPS 66 CARRIER LLC
By:	Phillips 66 Partners Holdings LLC, Sole Member of Phillips 66 Carrier LLC
By:	Phillips 66 Partners LP, Sole Member of Phillips 66 Partners Holdings LLC
By:	Phillips 66 Partners GP, LLC, General Partner of Phillips 66 Partners LP
By:	/s/ J.T. Liberti
	J.T. Liberti
	Vice President and Chief Operating Officer

Exhibit A

Rocky Station

Exhibit B

Origination Services


(a)	Day-to-day routine and emergency supervision, administrative liaison and related services required in connection with the maintenance and repair of Rocky Station.


(b)	Provision of communications, inspection, surveillance, flow control, corrosion control, and monitoring.


(c)	Maintenance and repair of Rocky Station within such maintenance/repair parameters and specifications as may be in accordance with sound engineering and maintenance practices and applicable Laws.


(d)	Implementation of a preventative maintenance program for Rocky Station, including, without limitation, periodic testing, adjustment and maintenance of Rocky Station, in accordance with prudent maintenance practices and applicable Laws.


(e)	Preparation and retention of appropriate records and logs as required by applicable Laws and that a prudent provider of maintenance services would maintain regarding Rocky Station, which records and logs shall be made available to Carrier upon request.


(f)	Reconstruction, reconditioning, overhaul or replacement of Rocky Station.


(g)	Establishment of safety, health, environmental, training, emergency response, spill response and other programs in connection with the maintenance and repair of Rocky Station, as may be required by prudent maintenance practices or under applicable Laws.


(h)	Providing technical services for purposes of trouble-shooting problems, improving performance, upgrading Rocky Station, repairing Rocky Station or meeting regulatory or safety requirements.


(i)	Maintaining compliance with all applicable federal, state and local environmental, health and safety Laws; in addition, conducting all environmental investigation and remediation activities, as required by federal, state and local environmental Laws and/or prudent business practices.


(j)	Facilitate the acquisition of all materials (including spare parts inventories), equipment, services, supplies and labor necessary for the maintenance and repair of Rocky Station.


(k)	Perform all planning, design and engineering functions related to the maintenance and repair of Rocky Station; selecting contractors and material suppliers for such activities.


(l)	Advise Carrier of major plans or significant changes in the maintenance or repair of Rocky Station.


(m)	Close valves in connection with a response to any emergency affecting Rocky Station. The valves shall remain closed until such time that it is determined safe by Carrier (in consultation with Operator) to resume operation. For normal scheduled maintenance, Operator will provide Carrier with sufficient advance Notice for Company’s planning purposes.


(n)	Such other maintenance, repair and related services on Rocky Station as Carrier may request from time to time.

(o)

The Services to be performed by Operator hereunder shall include, but shall not be limited to, repairs, aerial patrols, gas leakage surveys, pipeline pigging operations, cathodic protection work as required by all governmental regulatory agencies, tank cleaning, tank repair and truck rack maintenance. Operator will maintain suitable meter station, valve inspection and meter proving maintenance programs. Any operating or maintenance deficiencies so discovered at Rocky Station, or any appurtenances thereto, will be corrected by Operator. Operator will provide inspectors for monitoring work performed by others in the vicinity of Rocky Station.


(p)	Day-to-day routine and emergency supervision of the operation of Rocky Station.


(q)	Operation of the pump stations and other facilities within such operating parameters and specifications as may be in accordance with sound engineering and operating practices and applicable Laws.


(r)	Preparation and retention of appropriate records and logs as required by applicable Laws and that a prudent provider of operating services would maintain regarding Rocky Station, which records and logs shall be made available to Carrier upon request.


(s)	Operator shall perform monitoring and control services (SCADA) for Rocky Station. Operator shall be responsible for the maintenance of the Pipeline meter station equipment required for performance of monitoring and control services, product analysis, and custody transfer measurements in accordance with Carrier requirements and/or generally accepted industry practices.


(t)	Operator shall conduct the actual operations and maintenance of Rocky Station in accordance with the directions for product and feedstock movements given by Carrier, and shall employ such of its own or outside personnel as may be necessary to perform this operation and maintenance.


(u)	Determine net volume received and delivered by utilizing measurement facilities comprised of components of standard make, installed, operated and maintained in accordance with the latest edition of the American Petroleum Institute Manual of Petroleum Measurement Standards and standard industry practices, and reconcile book inventory with actual inventory.

(v)

Operator shall include the operation of Rocky Station including calibration of measurement and product analysis equipment, operation of booster pumps, providing custody measurement as required by Carrier and the coordination of product and feedstock movements as directed by Carrier. Operator will provide sufficient on-the-job and outside training to its employees and contractors operating and maintaining the Pipelines and Terminals for the operation thereof in a safe and efficient manner in accordance with applicable Operator and governmental rules and regulations and Laws. Operator shall prepare, file and renew, as applicable, all operating licenses and/or permits as directed by Carrier. Operator shall also be responsible for arranging for payment of any fees in regard to operation of Rocky Station.


(w)	Such other operating services as Carrier may request from time to time.

Exhibit C

Arbitration Procedure

(a)

(b)


(c)	The Parties shall have at least twenty (20) Days following the close of hearing within which to submit a brief (not to exceed eighteen (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).


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


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

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

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

Exhibit 10.4

STORAGE SERVICES AGREEMENT

This Storage Services Agreement is made and entered into as of the Effective Date by and between PHILLIPS 66 CARRIER LLC , a Delaware limited liability company (“ Carrier ”), and PHILLIPS 66 COMPANY , a Delaware corporation (“ Company ”).

Recitals

WHEREAS , Carrier owns certain tanks located at Carrier’s Wichita, Kansas terminal (“Tank Nos. 1001, 1002, and 1004”), Kansas City, Kansas terminal (“Tank Nos. 8005 and 8010”), and East St. Louis terminal located in Cahokia, Illinois (“Tank Nos. 1503, 2001 and 1302”) (the tanks may also be referred to individually as a “ Tank ” or collectively as the “ Tanks ”) that are suitable for receiving and storing refined petroleum products; and,

WHEREAS, Company desires to store refined petroleum products in the Tanks, and Carrier agrees to store refined petroleum products in the Tanks for Company, all upon the terms and conditions set forth in this Agreement.

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

Article I. Defined Terms

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


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


(b)	“Barrel” means 42 Gallons.


(c)	“Borger Products Facility” means that certain pipeline station, referred to as “Rocky Station,” owned by Company and located outside of the fence line at the Borger Refinery in Borger, Texas.


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


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


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

(g)

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


(h)	“Commodity” or “Commodities” means any of the commodities identified on Exhibit C.


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


(j)	“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.


(k)	“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.


(l)	“Effective Date” means March 1, 2014.

(m)

“Force Majeure” means: (i) acts of God, fires, floods or storms; (ii) compliance with orders of courts or Governmental Authorities; (iii) explosions, wars, terrorist acts or riots; (iv) inability to obtain or unavoidable delays in obtaining material or equipment; (v) accidental disruption of service; (vi) events or circumstances similar to the foregoing (including inability to obtain or unavoidable delays in obtaining material or equipment and disruption of service provided by third parties) that prevent a Party’s ability to perform its obligations under this Agreement, to the extent that such events or circumstances are beyond the Party’s reasonable control and could not have been prevented by the Party’s due diligence; (vii) strikes, lockouts or other industrial disturbances; and (viii) breakdown of refinery facilities, machinery, storage facilities, Tanks, or pipelines irrespective of the cause thereof.


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


(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)

“Law” means all constitutions, laws (including common law), treaties, statutes, orders, decrees, rules, injunctions, licenses, permits, approvals, agreements, regulations, codes and 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.


(q)	“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.


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


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


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


(u)	“Partnership Change in Control” means Phillips 66 ceases to Control the general partner of Phillips 66 Partners LP by virtue of any affiliate of Phillips 66 being removed as the general partner of Phillips 66 Partners LP under the terms of the limited partnership agreement of Phillips 66 Partners LP.


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


(w)	“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.


(x)	“PPI-FG” has the meaning set forth in Section 3.05.


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


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


(aa)	“Storage Variation” has the meaning set forth in Section 6.01.


(bb)	“Tank” and “Tanks” have the meaning set forth in the recitals.


(cc)	“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.

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

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

Article II. Term and Termination

Section 2.01 Term . The term of this Agreement shall commence on the Effective Date and shall continue for a primary term of five (5) years (“Primary Term”). At the end of the Primary Term, this Agreement shall automatically extend for up to two successive five (5) year periods (each, a “Renewal Term”), unless terminated by either Party upon written notice to the other Party no less than one hundred and eighty (180) Days prior to the expiration of the Primary Term or any Renewal Term, as applicable. After expiration of the second Renewal Term, if any, this Agreement will automatically extend for successive one (1) year terms (each also a “Renewal Term”) unless terminated by either Party upon written notice to the other Party no less than one hundred and eighty (180) Days prior to the expiration of the then current Renewal Term. The Primary Term, together with any Renewal Terms, shall be referred to in this Agreement as the “Term.”

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

Section 2.03 Special Termination by Carrier .

(a)

If Carrier’s use of all or part of the Tanks for the storage and handling of any Commodity is restrained, enjoined, restricted or terminated by (a) any Governmental Authority, (b) right of eminent domain or (c) the owner of leased land, Carrier, upon being notified of such restraint, enjoinder, restriction or termination, shall notify Company promptly upon learning of the likelihood of such event and Carrier may terminate this Agreement as to the affected Tank and services on the effective date of such restraint, enjoinder, restriction or termination.

(b)

Carrier shall have the right to terminate this Agreement upon 30 Days’ Notice to Company (i) in the event Carrier determines any testing or upgrading of the Tanks is required to satisfy or comply with Law or to comply with or remedy environmental concerns, or (ii) in the event of damage or destruction to, all or a portion of the Tanks, if in Carrier’s sole opinion such testing, upgrading, complying or repairing will require the expenditure of $5,000,000.00 or more to restore the Tanks to normal operations. Upon such termination, neither Party shall have any obligations to the other Party, provided that if Carrier terminates the Agreement pursuant to this Section 2.03(b) on any Day other than the last Day of a Month, Carrier shall promptly refund to Company that portion of such Month’s Scheduled Charges representing the number of Days between the termination date and the last Day of such Month, and provided further that the provisions of Section 2.04 shall survive such termination.

Section 2.04 Removal of Commodities.

(a)

Company, at its own expense, shall remove all of its Commodities from the Tanks no later than the later of (i) the effective date of the termination or expiration of this Agreement, and (ii) ten Days after receipt of Notice to terminate this Agreement in accordance with its terms, provided that Carrier may, in its sole discretion, agree in writing to extend the time for such removal. If, at the end of such period, Company has not removed all of its Commodities, then in addition to any other rights it may have under this Agreement, Carrier shall have the right to take possession of such Commodities and sell them at public or private sale. In the event of such a sale, Carrier shall withhold from the proceeds therefrom all amounts owed to it hereunder and all expenses of sale (including but not limited to reasonable attorneys’ fees and any amounts necessary to discharge any and all liens against the Commodities). The balance of the proceeds, if any, shall be remitted to Company.


(b)	Should any Commodities remain in the Tanks beyond the expiration or termination of this Agreement, Company shall remain obligated to perform all of the terms and conditions set forth in this Agreement (including, without limitation, Company’s

obligation to pay the monthly Storage Fee under Section 3.01(a), prorated for the period between such expiration or termination of this Agreement and the time all Commodities are removed from the Tanks) and, in addition, shall pay an additional “Holdover Fee” per Day or partial Day, determined in accordance with Exhibit A, until all Commodities are removed.


(c)	Company shall indemnify and hold the Carrier Affiliated Parties harmless from and against all Claims arising from or related to Company’s failure to remove any Commodities in accordance with this Section 2.04 or Carrier’s exercise of its right to take possession of Company’s Commodities and sell it in accordance with this Section 2.04.


(d)	Company will reimburse Carrier for any expense incurred by Carrier in connection with its or Company’s withdrawal of Commodities from the Tanks, including costs incurred to empty the Tanks.

Article III. Services

Section 3.01 Storage Services, Commitment and Charges.


(a)	Beginning on the Effective Date, Company shall pay a Monthly fee equal to the “Storage Fee” set forth on Exhibit A multiplied by the shell capacity of the Tanks.



Terminal	Tank	Shell Capacity (barrels)
Wichita	1001	107,000
Wichita	1002	107,000
Wichita	1004	108,000
East St. Louis	1503	172,000
East St. Louis	2001	200,000
East St. Louis	1302	135,000
Kansas City	8010	101,000
Kansas City	8005	80,000
Total Shell Capacity		1,010,000


(b)	Carrier shall accept Commodities from Company for storage and shall store a volume of Commodities up to the safe working capacity of the Tanks (subject to routine maintenance).


(c)	The volume of Commodities placed in the Tanks may not exceed the safe working capacity of the Tanks as determined by Carrier taking into account such factors as (i) the time needed to react to a potential overflow of the Tanks, (ii) storage injection and withdrawal rates, and (iii) other operating conditions.


(d)	Carrier shall maintain the Tanks in proper operating condition and in a manner that maintains the working capacity of the Tanks, to the extent commercially reasonable.

(e)

In the event any portion of the safe working capacity of the Tanks is not available for a period exceeding thirty (30) consecutive Days, then following such 30-Day period, the Storage Fee shall be proportionately reduced to reflect the amount of working capacity that is not available for storage in the Tanks. If and to the extent all or any portion of such working capacity again becomes available for storage in the Tanks, the Storage Fee shall be immediately increased to reflect the resumed storage availability.

Section 3.02 Laboratory Fees and Services .

(a)

If Carrier provides sampling, testing and/or other laboratory services requested by Company for Commodities at the Tanks, Carrier shall charge for each sampling and testing procedure performed as set forth in Carrier’s “Schedule of Rates for Laboratory Services”, as may be amended from time to time. Such services shall be provided by Company’s personnel at the Borger Products Facility, if possible. If Carrier contracts with another Person to perform laboratory services, all fees shall be billed to Company at Carrier’s cost.


(b)	Carrier’s liability for sampling and testing services is limited to the charge for the service provided.

Section 3.03 Additional Services . For services or functions that are not specifically provided for in this Agreement but are requested by Company and agreed to by Carrier, there may be a charge as agreed upon by the Parties in writing.

Section 3.04 Recovery of Certain Costs .

(a)

If Carrier agrees to make any expenditures at Company’s request, Company will reimburse Carrier for the actual amount paid by Carrier for such expenditures or, at Carrier’s option and if the Parties agree, any applicable fees set forth on Exhibit A will be increased or additional fees shall be added to Exhibit A or otherwise imposed to allow Carrier to recover the amount paid by Carrier for such expenditures over time from Company or another entity.


(b)	If new Laws require Carrier to make substantial and unanticipated expenditures in connection with the services Carrier provides to Company under this Agreement, Company will reimburse Carrier for Company’s proportionate share of the costs of complying with such Laws, or at Carrier’s option and if the Parties agree, relevant

periodic or unit charges will be increased or an alternate mechanism shall be adopted to allow Carrier to recover such costs over time from Company or another entity.


(c)	If Carrier determines that the Tanks must be pumped, drained, purged or otherwise cleaned of residual volumes, Company will reimburse Carrier for the actual amount paid by Carrier for such cleaning services. Carrier and Company will work together to coordinate such cleaning activities to minimize disruption to the Parties’ respective commercial operations.

Section 3.05 Adjustments . As of January 1, 2015, and as of January 1 of each year thereafter while this Agreement is in effect, Carrier may increase each of the fees set forth on Exhibit A annually, by a percentage equal to the greater of zero and the positive change in the Producer Price Index for Finished Goods (Series ID WPUSOP3000) (the “ PPI-FG ”) , as reported during the Month of October immediately before the effective date of the adjustment , with respect to the 12-Month period ending at the end of the Month of September immediately preceding such publication, provided that if, with respect to any such 12-Month period or periods, the PPI-FG has decreased, Carrier may increase such fees only to the extent that the percentage change in the PPI-FG since the most recent previous increase in such fees is greater than the aggregate amount of the cumulative decreases in the PPI-FG during the intervening period or periods.

Article IV. Receipt and Redelivery of Commodities

Section 4.01 Receipt of Commodities . All Commodities shall be received into the Tanks via pipeline. Company will use commercially reasonable efforts to ensure that all Commodities it delivers hereunder shall comply with the applicable specifications set forth on Exhibit D . Carrier retains the right to inspect and reject any Commodities that do not conform to the applicable specifications, including the right, in Carrier’s sole judgment, to shut-off the valve into the Tanks. Custody of the Commodities shall pass to Carrier when such Commodities pass the flange connection between the delivering pipeline and the Tank.

Section 4.02 Redelivery of Commodities . All Commodities stored in the Tanks shall be delivered to Company via pipeline. Company shall be responsible for all commercial arrangements necessary to facilitate such deliveries. Carrier shall not be responsible for any damages and shall not be in breach of this Agreement in the event third parties will not physically accept deliveries from Carrier’s facilities. Custody of the Commodities shall pass from Carrier to the pipeline when such Commodities pass the flange connection between the Tank and the receiving pipeline.

Article V. Terminal Access

Section 5.01 Terminal Access . Terminal access by Company or its representatives shall be during Regular Terminal Operating Hours. As a condition to being granted access to the

Wichita, Kansas City or East St. Louis terminals, Company shall require all contractors, carriers and customers designated by it to deliver, receive, sample or inspect Company’s Commodities at the Tanks or to provide any other service for Company, to sign and comply with a terminal access agreement in such form as Carrier may reasonably specify from time to time. Further, Company shall cause all such designated contractors, carriers and customers to comply with all applicable terminal rules and regulations and Carrier shall make copies of such rules and regulations available to Company and its designated carriers and customers at the applicable terminal.

Article VI. Storage Variations

Section 6.01 Storage Variations . Company shall bear any losses or gains that may occur while Company’s Commodities are in storage at the Tanks (such losses or gains, the “ Storage Variations ”), except to the extent that Storage Variations result from Carrier’s negligence or willful misconduct or the negligence or willful misconduct of Carrier’s employees, agents, contractors or subcontractors.

Article VII. Monthly Statement; Payment; Liens

Section 7.01 Monthly Statement . Promptly after the end of each Month during the Term of this Agreement, Carrier shall provide Company with a statement showing the previous Month’s beginning inventory, receipts, withdrawals, ending inventory, Storage Variation adjustment and the Scheduled Charges due Carrier. If requested by Company, Carrier shall provide Company with copies of individual gauge reports and meter tickets for receipts and withdrawals at the Tanks for such Month, if available.

Section 7.02 Payment .

(a)

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

(b)

be for Company’s account. Acceptance by Carrier of any payment from Company for any charge or service after termination or expiration of this Agreement shall not be deemed a renewal of this Agreement or a waiver by Carrier of any default by Company hereunder.

(c)

If Company reasonably disputes any Monthly statement, in whole or in part, Company shall promptly notify Carrier in writing of the dispute and shall pay the undisputed portion according to the terms of this Section 7.02, and shall promptly seek to resolve the dispute including, if necessary, by arbitration as provided in Section 20.01. An arbitral panel may award reasonable interest on any unpaid amount determined to have been due to Carrier but withheld in good faith.

Section 7.03 Liens . Company hereby grants to Carrier an irrevocable (a) warehouseman’s lien on all of Company’s Commodities in storage at the Tanks and (b) power of attorney to dispose of such Commodities at fair market value to the extent of all amounts owed to Carrier by Company hereunder.

Article VIII. Title

Section 8.01 Title . Title to all of Company’s Commodities received, stored, and handled by Carrier shall remain at all times in Company’s name.

Article IX. Volume Determinations

Section 9.01 Volume Determinations .


(a)	All measurements, volume corrections and calibrations will be made in accordance with Carrier’s measurement procedures, which shall consist of the latest revision of Carrier’s Measurements Manual and the latest ASTM and API MPMS published methods and standards.


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


(c)	All Commodities received from or delivered to the Tanks will be determined by calibrated custody transfer grade meters.


(d)	A Company representative may witness testing, calibration of equipment, meter reading, and gauging of Commodities at the Tanks, at Company’s expense. In the

absence of a Company representative, Carrier’s measurements shall be deemed to be accurate.

Article X. Insurance

Section 10.01 Insurance . Property insurance covering loss or damage to Company’s Commodities, if any, that may be desired by Company, shall be carried by Company at Company’s expense. Should Company elect to carry such insurance, then each policy of insurance shall be endorsed to provide a waiver of subrogation rights in favor of the Carrier Affiliated Parties. Notwithstanding anything in this Agreement to the contrary, Carrier shall not be liable to Company for Commodities losses or shortages for which Company is compensated by its insurer.

Article XI. Taxes

Section 11.01 Taxes . Company shall be responsible for and shall pay all sales Taxes and similar Taxes on goods and services provided hereunder and any other Taxes now or hereafter imposed by any Governmental Authority in respect of or measured by Commodities handled or stored hereunder or the manufacture, storage, delivery, receipt, exchange or inspection thereof, and Company agrees to promptly reimburse Carrier for any such Taxes Carrier is legally required to pay, upon receipt of invoice therefor. Each Party is responsible for all Taxes in respect of its own real and personal property.

Article XII. Health, Safety and Environment

Section 12.01 Spills; Environmental Pollution .


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

(b)

negligence of both Carrier and Company or a third party pipeline, tank truck or transport trailer receiving Commodities on Company’s behalf, at its request or for its benefit, liability and costs of containment or clean-up shall be borne jointly by Carrier and Company in proportion to each Party’s respective negligence.


(c)	For purposes of this Section 12.01, the negligence of a third party pipeline, tank truck or transport trailer receiving Commodities on Company’s behalf, at its request or for its benefit, shall be attributed to Company.


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

Section 12.02 Inspection . Company may: (a) inspect the Tanks, including health, safety, and environmental audits by inspector(s) chosen by Company; (b) make physical checks of Commodities in storage at the Tanks; (c) audit Carrier’s health, safety, environmental, and operational records relating to the performance of this Agreement and otherwise to observe such performance , ; and (d) subject to the provisions of Section 5.01, enter upon the applicable terminal property for any of the foregoing purposes. For clarity, none of the rights identified in this Section 12.02 shall be exercised by Company in such manner as to substantially interfere with or diminish Carrier’s complete control and responsibility for the operation of the Tanks.

Section 12.03 Incident Notification . Both Parties undertake to notify the other as soon as reasonably practical, but in no event more than 24 hours, after becoming aware of any accident, spill or incident involving the other Party’s employees, agents, contractors, sub-contractors or their equipment, or Company’s Commodities at the Tanks and to provide reasonable assistance in investigating the circumstances of the accident, spill or incident. Notices required by this Section 12.03 shall be delivered in person, by telephone or by email:



If to Carrier: Phillips 66 Carrier LLC c/o Phillips 66 Pipeline LLC Attn: Bill Shepherd, Central Division Terminal Manager 3010 Briarpark Drive Houston, TX 77042 918.977-4640 bill.d.shepherd@p66.com	If to Company: Phillips 66 Company Attention: Manager Loss Control John Sweeney 3010 Briarpark Drive Houston, TX 77042 832.765-3017 john.e.sweeney@p66.com

shall be delivered to Company at IncidentFollowup@P66.com. Either Party may change its contact information upon Notice to the other in accordance with this Section 12.03 and Section 14.01.

Article XIII. Force Majeure

Section 13.01 Suspension during Force Majeure Events . As soon as possible upon the occurrence of a Force Majeure, a Party affected by a Force Majeure event shall provide the other Party with written notice of the occurrence of such Force Majeure event. Subject to Section 2.02, each Party’s obligations (other than an obligation to pay any amounts due to the other Party which shall not be suspended under this Section 13.01) shall be temporarily suspended during the occurrence of, and for the entire duration of, a Force Majeure event to the extent that such an event prevents Carrier from performing its obligations under this Agreement. Each Party’s obligations (other than an obligation to pay any amounts due to the other Party which shall not be suspended under this Section 13.01) shall be temporarily suspended beginning 20 Days after the commencement of, and for the entire remaining duration of, a Force Majeure event to the extent that such event prevents Company from performing its obligations under this Agreement.

Section 13.02 Obligation to Remedy Force Majeure Events . A Party affected by a Force Majeure event shall take commercially reasonable steps to remedy such situation so that it may resume its performance within a reasonable period of time.

Section 13.03 Strikes and Lockouts . The settlement of strikes, lockouts and other labor disturbances shall be entirely within the discretion of the affected Party and the requirement to remedy a Force Majeure event within a reasonable period of time shall not require the settlement of strikes or lockouts by acceding to the demands of an opposing Person when such course is inadvisable in the discretion of the Party having the difficulty.

Section 13.04 Action in Emergencies . Carrier may temporarily suspend performance of the services to prevent injuries to persons, damage to property or harm to the environment.

Article XIV. Notices

Section 14.01 Notices . Unless otherwise specifically provided in this Agreement, all Notices between the Parties given under or in relation to this Agreement shall be made in writing and shall be deemed to have been properly given if: (i) personally delivered (with written confirmation of receipt); or (ii) delivered by a recognized overnight delivery service (delivery fees prepaid), in either case to the appropriate address set forth below:



If to Carrier: Phillips 66 Partners Carrier LLC 3010 Briarpark Drive Houston, TX 77042 Attn: President With a copy to General Counsel, Transportation at the same address	If to Company: Phillips 66 Company Attn: General Manager, Supply & Distribution Pam McGinnis 3010 Briarpark Drive Houston, TX 77042 With a copy to General Counsel, at the same address

Either Party may change its address for Notice upon Notice to the other in accordance with this Section 14.01.

Section 14.02 Effective upon Receipt . Any Notice given in the manner set forth in Section 14.01 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 XV. Applicable Law

Section 15.01 Applicable Law . Regardless of the place of contracting, the place of performance or otherwise, this Agreement and all amendments, modifications, alterations or supplements to it, shall be governed and interpreted in accordance with the laws of the state of Texas, without regard to the principles of conflicts of law or any other principle that might apply the law of another jurisdiction.

Article XVI. Limitation of Liability

Section 16.01 No Liability for Consequential Damages . In no event shall either Party be liable to the other Party for, and no arbitral panel is authorized to award, any punitive, special, indirect or consequential damages of any kind or character resulting from or arising out of this Agreement, including, without limitation, loss of profits or business interruption, however they may be caused.

Section 16.02 Limitation of Liability . Notwithstanding anything to the contrary in this Agreement, Carrier shall in no event be liable for loss of, or damage to, any of Company’s Commodities except to the extent caused by Carrier’s negligence or willful misconduct, or the negligence or willful misconduct of Carrier’s employees, agents, contractors or subcontractors, in the safekeeping and handling of Company’s Commodities. In no event shall Carrier be liable for more than the replacement of lost or damaged Commodities or, at its option, payment of the replacement cost of any lost or damaged Commodities. Each Party shall be discharged from any and all liability with respect to services performed and

any loss or damage Claims arising out of this Agreement unless suit or action is commenced with respect to such services, loss or Claim within two (2) years after the cause of action arises.

Article XVII. Default

Section 17.01 Default . Subject to Section 17.03, should either Party default in the prompt performance and observance of any of the terms and conditions of this Agreement, and should such default continue for thirty (30) Days or more after Notice thereof by the non-defaulting Party to the defaulting Party, or should either Party become insolvent, commence a case for liquidation or reorganization under the United States Bankruptcy Code (or become the involuntary subject of a case for liquidation or reorganization under the United States Bankruptcy Code, if such case is not dismissed within thirty (30) Days) be placed in the hands of a state or federal receiver or make an assignment for the benefit of its creditors, then the other Party shall have the right, at its option, to terminate this Agreement immediately upon Notice to the other Party.

Section 17.02 Non-Exclusive Remedies . Except as otherwise provided, but subject to Article XVI, the remedies of Carrier and Company provided in this Agreement shall not be exclusive, but shall be cumulative and shall be in addition to all other remedies in favor of Carrier or Company, at Law or equity.

Section 17.03 Right to Terminate . Subject to Section 17.01, in the event of a default by Company, the Scheduled Charges theretofore accrued shall, at the option of Carrier, become immediately due and payable and Carrier shall also have the right, at its option, to terminate this Agreement immediately upon Notice to Company. In the event of a default by Carrier, Company shall also have the right, at its option, to terminate this Agreement immediately upon Notice to Carrier and withdraw its Commodities from the Tanks, provided Company has paid Carrier for the Scheduled Charges that have accrued to date of such withdrawal.

Article XVIII. Public Use

Section 18.01 Public Use . This Agreement is made as an accommodation to Company. In no event shall Carrier’s services hereunder be deemed to be those of a public utility or a common carrier. If any action is taken or threatened by any Governmental Authority to declare Carrier’s services hereunder to be those of a public utility or a common carrier, then, in that event, at the option of Carrier and upon Company’s receipt of Carrier’s Notice, Carrier may restructure and restate this Agreement or terminate this Agreement on the effective date of such action as to the affected Tank (s) or services.

Article XIX. Confidentiality

Section 19.01 Confidentiality . The Parties understand and agree that the Scheduled Charges are confidential as between the Parties. Each Party agrees not to disclose such confidential information to any third Person. Each Party may disclose confidential information to its advisors, consultants or representatives ( provided that such Persons agree to maintain the confidentiality thereof) or when compelled to do so by Law (but the disclosing Party must notify the other Party promptly of any such request for confidential information before disclosing it, if practicable, so that the other Party may seek a protective order or other appropriate remedy or waive compliance with this Section 19.01). In the event that the other Party does not obtain a protective order or other remedy or does not waive compliance with this Section 19.01, the disclosing Party shall disclose only that portion of the confidential information to which the compelling Person is legally entitled.

Article XX. Miscellaneous

Section 20.01 Disputes between the Parties . Any dispute between the Parties in connection with this Agreement shall be resolved by arbitration in accordance with the procedures set forth in Exhibit B, provided that either Party may seek a restraining order, temporary injunction, or other provisional relief in any court with jurisdiction over the subject matter of the dispute and sitting in Houston, Texas, if such Party in its sole judgment believes that such action is necessary to avoid irreparable injury or to preserve the status quo ante .

Section 20.02 Assignment . Neither Party may assign its rights under this Agreement without the prior written consent of the other Party. However, notwithstanding the immediately preceding sentence, either Party may assign this Agreement to any of its affiliates by providing written notice to the other Party, and Carrier may make collateral assignments of this Agreement to secure working capital or other financing.

Section 20.03 Partnership Change in Control . Upon the occurrence of a Partnership Change in Control, Carrier shall provide Company with Notice of such Partnership Change in Control at least sixty (60) Days prior to the effective date thereof. Within 180 days following receipt of such Notice, Company may elect to terminate this Agreement, effective no earlier than the effective date of such Partnership Change in Control.

Section 20.04 No Third-Party Rights . Except as expressly provided, nothing in this Agreement is intended to confer upon any Person other than the Parties, and their respective successors and assigns, any rights, benefits or obligations.

Section 20.05 Compliance with Laws . Each Party shall at all times comply with all Laws as are applicable to its performance of this Agreement.

Section 20.06 Severability . If any provision of this Agreement or the application thereof shall be found by any arbitral panel or court of competent jurisdiction to be invalid, illegal

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

Section 20.07 Non-Waiver . The failure of either Party to enforce any provision, condition, covenant or requirement of this Agreement at any time shall not be construed to be a waiver of such provision, condition, covenant or requirement unless the other Parties are so notified by such Party in writing. Any waiver by a Party of a default by any other Party in the performance of any provision, condition, covenant or requirement contained in this Agreement shall not be deemed to be a waiver of such provision, condition, covenant or requirement, nor shall any such waiver in any manner release such other Party from the performance of any other provision, condition, covenant or requirement.

Section 20.08 Entire Agreement . This Agreement, together with all Exhibits attached hereto, constitutes the entire Agreement between the Parties relating to its subject matter and it supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, between the Parties relating to the subject matter hereof, and there are no warranties, representations or other agreements between the Parties in connection with the subject matter hereof except as specifically set forth in, or contemplated by, this Agreement.

Section 20.09 Amendments . This Agreement shall not be modified or amended, in whole or in part, except by a written amendment signed by both Parties.

Section 20.10 Survival . Any indemnification granted hereunder by one Party to the other Party or any provision hereof providing for any payment to any Party that has accrued at time of expiration or termination shall survive the termination of all or any part of this Agreement.

Section 20.11 Counterparts; Multiple Originals . This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on each of the Parties. Each of the Parties may sign any number of copies of this Agreement. Each signed copy shall be deemed to be an original, but all of them together shall represent one and the same agreement.

Section 20.12 Exhibits . The Exhibits identified in this Agreement are incorporated in this Agreement and constitute a part of this Agreement. If there is any conflict between this Agreement and any Exhibit, the provisions of the Exhibit shall control.

Section 20.13 Table of Contents; Headings; Subheadings . The table of contents and the headings and subheadings of this Agreement have been inserted only for convenience to

facilitate reference and are not intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

Section 20.14 Construction . The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any of the provisions of this Agreement.

Section 20.15 Business Practices . Carrier shall use its best efforts to make certain that all billings, reports, and financial settlements rendered to or made with Company pursuant to this Agreement, or any revision of or amendments to this Agreement, will properly reflect the facts about all activities and transactions handled by authority of this Agreement and that the information shown on such billings, reports and settlement documents may be relied upon by Company as being complete and accurate in any further recording and reporting made by Company for whatever purposes. Carrier shall notify Company if Carrier discovers any errors in such billings, reports, or settlement documents.

[Signature page follows.]

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



PHILLIPS 66 CARRIER LLC
By:	Phillips 66 Partners Holdings LLC, Sole Member of Phillips 66 Carrier LLC
By:	Phillips 66 Partners LP, Sole Member of Phillips 66 Partners Holdings LLC
By:	Phillips 66 Partners GP, LLC, General Partner of Phillips 66 Partners LP
By:	/s/ J.T. Liberti
	J.T. Liberti
	Vice President and Chief Operating Officer



PHILLIPS 66 COMPANY
By:	/s/ T.G. Taylor
	T.G. Taylor
	Executive Vice President, Commercial, Marketing, Transportation and Business Development

Exhibit A

Scheduled Fees


1.	Storage Fee : $**/Barrel

2. Holdover Fee: $**/Day (or partial Day)


3.	Adjustment. Carrier may increase all charges set forth in Paragraphs 1 and 2 above annually beginning January 1, 2015, in accordance with Section 3.05.

Exhibit B

Dispute Resolution Procedures

(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)


(c)	The Parties shall have at least twenty (20) Days following the close of hearing within which to submit a brief (not to exceed eighteen (18) pages in length) and ten (10) 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).


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


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

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

Exhibit C

Commodities


•	Automotive Gasoline


•	Kerosene


•	Jet Fuel


•	JP8


•	Tractor Fuel


•	Diesel Fuel


•	Fuel Oil Distillates


•	Naphtha


•	Diluents

Exhibit D

Specifications

Exhibit 10.5

STORAGE SERVICES AGREEMENT

This Storage Services Agreement is made and entered into as of the Effective Date by and between PHILLIPS 66 PARTNERS HOLDINGS LLC , a Delaware limited liability company (“ Holdings ”), and PHILLIPS 66 COMPANY , a Delaware corporation (“ Company ”).

Recitals

WHEREAS , Holdings owns certain above ground storage facilities located at the Central Division Pipeline facility in Medford, Oklahoma (the “ Medford Spheres ”) that are suitable for receiving and storing natural gas liquids and refinery grade propylene (collectively, “ NGLs ”); and

WHEREAS, Company desires to store NGLs in the Medford Spheres, and Holdings agrees to store NGLs in the Medford Spheres for Company, all upon the terms and conditions set forth in this Agreement.

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

Article I. Defined Terms

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


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


(b)	“Barrel” means 42 Gallons.


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


(d)	“Capacity Commitment” has the meaning set forth in Section 3.01(b)(1).

(e)


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


(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)	“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.


(i)	“Effective Date” means March 1, 2014.

(j)

“Force Majeure” means: (i) acts of God, fires, floods or storms; (ii) compliance with orders of courts or Governmental Authorities; (iii) explosions, wars, terrorist acts or riots; (iv) inability to obtain or unavoidable delays in obtaining material or equipment; (v) accidental disruption of service; (vi) events or circumstances similar to the foregoing (including inability to obtain or unavoidable delays in obtaining material or equipment and disruption of service provided by third parties) that prevent a Party’s ability to perform its obligations under this Agreement, to the extent that such events or circumstances are beyond the Party’s reasonable control and could not have been prevented by the Party’s due diligence; (vii) strikes, lockouts or other industrial disturbances; and (viii) breakdown of refinery facilities, machinery, storage spheres or pipelines, irrespective of the cause thereof.


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


(l)	“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.


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


(n)	“Holdings Affiliated Parties” means Holdings, Phillips 66 Partners LP and each of their respective contractors, directors, officers, employees and agents.

(o)

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.


(p)	“Medford Spheres” has the meaning set forth in the Recitals.


(q)	“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.


(r)	“NGLs” has the meaning set forth in the Recitals.


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


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


(u)	“Parties” means Holdings and Company, collectively.


(v)	“Partnership Change in Control” means Phillips 66 ceases to Control the general partner of Phillips 66 Partners LP by virtue of any affiliate of Phillips 66 being removed as the general partner of Phillips 66 Partners LP under the terms of the limited partnership agreement of Phillips 66 Partners LP.


(w)	“Party” means Holdings or Company, individually.


(x)	“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.


(y)	“Ponca City Refinery” means the refinery located in Ponca City, Oklahoma.


(z)	“PPI-FG” has the meaning set forth in Section 3.05.


(aa)	“Regular Medford Spheres Operating Hours” means 24 hours per Day, 7 Days per week.


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


(cc)	“Storage Variation” has the meaning set forth in 6.01.


(dd)	“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.

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

Article II. Term and Termination

Section 2.01 Term . The term of this Agreement shall commence on the Effective Date and shall continue for a primary term of ten (10) years (“Primary Term”). At the end of the Primary Term, this Agreement shall automatically extend for up to two successive, five (5) year periods (each a “Renewal Term”), unless terminated by either Party upon Notice to the other Party no less than one hundred and eighty (180) Days prior to the expiration of the Primary Term or a Renewal Term, as applicable. After expiration of the second Renewal Term, if any, this Agreement will automatically extend for successive one (1) year terms (each also a “Renewal Term”) unless terminated by either Party upon Notice to the other Party no less than one hundred and eighty (180) Days prior to the expiration of the then current Renewal Term. The Primary Term, together with any Renewal Terms, shall be referred to in this Agreement as the “Term.” At least two years prior to the commencement of the first Renewal Term, either Party can invoke an option to renegotiate the Scheduled Fees set forth on the attached Exhibit A by providing written Notice to the other Party. If agreed to by the Parties, the renegotiated Scheduled Fees shall be effective at the commencement of the first Renewal Term.

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

Section 2.03 Special Termination by Holdings . Notwithstanding anything to the contrary in this Agreement:

(a)

If Holdings’s use of all or part of the Medford Spheres for the storage and handling of any NGL is restrained, enjoined, restricted or terminated by (i) any Governmental Authority, (ii) right of eminent domain or (iii) the owner of leased land, Holdings, upon being notified of such restraint, enjoinder, restriction or termination, shall notify Company promptly upon learning of the likelihood of such event and Holdings may terminate this Agreement as to the affected storage sphere and services on the effective date of such restraint, enjoinder, restriction or termination.

(b)

Holdings shall have the right to terminate this Agreement upon 30 Days’ Notice to Company (i) in the event Holdings determines any testing or upgrading of the Medford Spheres is required to satisfy or comply with Law or to comply with or remedy environmental concerns, or (ii) in the event of damage or destruction to, all or a portion of the Medford Spheres, if in Holdings’s sole opinion such testing, upgrading, complying or repairing will require the expenditure of $ 5,000,000.00 or more to restore the Medford Spheres to normal operations. Upon such termination, neither Party shall have any obligations to the other Party, provided that if Holdings terminates the Agreement pursuant to this Section 2.03(b) on any Day other than the last Day of a Month, Holdings shall promptly refund to Company that portion of such Month’s Scheduled Charges representing the number of Days between the termination date and the last Day of such Month, and provided further that the provisions of Section 2.04 shall survive such termination.

(c)

If the Ponca City Refinery’s operations are partially or completely suspended for a period of at least 12 consecutive Months, the Parties will negotiate in good faith to agree upon a reduction of the Capacity Commitment to reflect such suspension of operations. If the Parties are unable to agree to an appropriate reduction of any applicable Capacity Commitment, then, after Company has made a public announcement of such suspension, Company may provide Notice to Holdings of its intent to terminate this Agreement and this Agreement will terminate 12 Months following the date such Notice is received by Holdings. In the event Company publicly announces, prior to the expiration of such 12-Month period, its intent to resume operations at the Ponca City Refinery, then such Notice shall be deemed revoked and this Agreement shall continue in full force and effect as if such Notice had never been delivered.

Section 2.04 Removal of NGLs.


(a)	Company, at its own expense, shall remove all of its NGLs from the Medford Spheres no later than the later of (i) the effective date of the termination or expiration of this

Agreement and (ii) ten Days after receipt of Notice to terminate this Agreement in accordance with its terms, provided that Holdings may, in its sole discretion, agree in writing to extend the time for such removal. If, at the end of such period, Company has not removed all of its NGLs, then in addition to any other rights it may have under this Agreement, Holdings shall have the right to take possession of such NGLs and sell them at public or private sale. In the event of such a sale, Holdings shall withhold from the proceeds therefrom all amounts owed to it hereunder and all expenses of sale (including but not limited to reasonable attorneys’ fees and any amounts necessary to discharge any and all liens against the NGLs). The balance of the proceeds, if any, shall be remitted to Company.

(b)

Should any NGLs remain in the Medford Spheres beyond the expiration or termination of this Agreement, Company shall remain obligated to perform all of the terms and conditions set forth in this Agreement (including, without limitation, Company’s obligation to pay the monthly Storage Fee under Section 3.01(a), prorated for the period between such expiration or termination of this Agreement and the time all NGLs are removed from the Medford Spheres) and, in addition, shall pay an additional “Holdover Fee” per Day or partial Day, as set forth on Exhibit A, until all NGLs are removed.


(c)	Company shall indemnify and hold the Holdings Affiliated Parties harmless from and against all Claims arising from or related to Company’s failure to remove any NGLs in accordance with this Section 2.04 or Holdings’s exercise of its right to take possession of Company’s NGLs and sell them in accordance with this Section 2.04.


(d)	Company will reimburse Holdings for any expense incurred by Holdings in connection with its or Company’s withdrawal of NGLs from the Medford Spheres, including costs incurred to empty the Medford Spheres.

Article III. Services

Section 3.01 Storage Services, Capacity Commitment and Charges .


(a)	Beginning on the Effective Date, Company shall pay a Monthly fee equal to (i) the “Storage Fee” set forth on Exhibit A multiplied by (ii) the aggregate Working Capacity of the Medford Spheres. (“Working Capacity” is 35,000 Barrels in each of the two spheres). Company shall have exclusive use of the Medford Spheres for storing NGLs.


(b)	Beginning when the Medford Spheres are placed into commercial service:

(1)

Holdings shall accept from Company for storage and shall store up to the Working Capacity limit of both spheres (70,000 Barrels of NGLs in total) (the “Capacity Commitment”) in the Medford Spheres (subject to routine maintenance and the limitation described in Section 3.01(b)(2)), without commingling Company’s NGLs with any other commodity, and then deliver Company’s NGLs according to Company’s instructions.


(2)	The volume of NGLs placed in the Medford Spheres may not exceed the safe operating capacity of the Medford Spheres as determined by Holdings, taking into account such factors as (i) the time needed to react to a potential overflow of the spheres, (ii) storage injection and withdrawal rates, and (iii) other operating conditions.


(3)	Holdings shall maintain the Medford Spheres in proper operating condition and in a manner that maintains the working capacity of the Medford Spheres, to the extent commercially reasonable.


(c)	At all times during the Term of this Agreement, Holdings and Company shall use commercially reasonable efforts to work together to coordinate maintenance and other activities to minimize potential and adverse effects to the Ponca City Refinery.

(d)

Holdings shall provide Notice to Company of the date the Medford Spheres are first placed into commercial service. In the event the Medford Spheres are not first placed into commercial service on or before August 1, 2014, Company’s payment obligations with respect to scheduled fees under this Agreement shall be suspended effective August 1, 2014 until the Medford Spheres are placed into commercial service, and Company shall be relieved of any obligation to make payment for such period.

Section 3.02 Laboratory Fees and Services .

(a)

If Holdings provides sampling, testing and/or other laboratory services requested by Company for NGLs at the Medford Spheres, Holdings shall charge for each sampling and testing procedure performed as set forth in Holdings’s “Schedule of Rates for Laboratory Services”, as may be amended from time to time. Such services shall be provided by Company’s employees, at Holdings’ direction, at the Ponca City Refinery, if possible. If Holdings contracts with another Person to perform laboratory services, all fees shall be billed to Company at Holdings’s cost.


(b)	Holdings’s liability for sampling and testing services is limited to the charge for the service provided.

Section 3.03 Additional Services . For any service or function that are not specifically provided for in this Agreement but that are requested by Company and agreed to by Holdings, there shall be a charge in an amount as agreed upon by the Parties in writing.

Section 3.04 Recovery of Certain Costs .

(a)

If Holdings agrees to make any expenditures at Company’s request, Company will reimburse Holdings for the actual amount paid by Holdings for such expenditures or, at Holdings’s option and if the Parties agree, any applicable fees set forth on Exhibit A will be increased, or additional fees shall be added to Exhibit A, or imposed to allow Holdings to recover the amount paid by Holdings for such expenditures over time from Company or another entity.

(b)

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


(c)	If Holdings determines that the Medford Spheres must be pumped, drained, purged or otherwise cleaned of residual volumes, Company will reimburse Holdings for the actual amount paid by Holdings for such cleaning services. Holdings and Company will work together to coordinate such cleaning activities to minimize disruption on the Parties’ respective commercial operations.

Section 3.05 Adjustments . As of January 1, 2015, and as of January 1 of each year thereafter while this Agreement is in effect, Holdings may increase each of the fees set forth on Exhibit A annually, by a percentage equal to the greater of zero and the positive change in the Producer Price Index for Finished Goods (Series ID WPUSOP3000) (the “ PPI-FG ”) , as reported during the Month of October immediately before the effective date of the adjustment , with respect to the 12-Month period ending at the end of the Month of September immediately preceding such publication, provided that if, with respect to any such 12-Month period or periods, the PPI-FG has decreased, Holdings may increase such fees only to the extent that the percentage change in the PPI-FG since the most recent previous increase in such fees is greater than the aggregate amount of the cumulative decreases in the PPI-FG during the intervening period or periods.

Article IV. Receipt and Withdrawal of NGLs

Section 4.01 Receipt of NGLs . All NGLs shall be received into the Medford Spheres from the Ponca City Refinery via pipelines.

(a)

Flow Rates/Pressures. The Medford Spheres are designed to receive NGLs with a minimum flow rate of 80 Barrels of NGLs per hour, a minimum operating pressure of 270 pounds per square inch gauge, and a maximum operating pressure of 450 pounds per square inch gauge. Company shall be solely responsible for providing deliveries into the Medford Spheres at pressures sufficient to meet the requirements of Holdings. Company shall, at its sole cost and expense, deliver NGLs to the Medford Spheres. The Medford Spheres are designed to redeliver NGLs with a minimum flow rate of 1500 Barrels of NGLs per hour and a minimum operating pressure of 540 pounds per square inch gauge, and a maximum flow rate of 6250 Barrels of NGLs per hour and a maximum operating pressure of 740 pounds per square inch gauge.


(b)	Specifications. Company will use commercially reasonable efforts to ensure that all NGLs it delivers hereunder shall comply with the applicable specifications as outlined in Exhibit C. Holdings retains the right to inspect and reject any NGLs that do not conform to the applicable specifications, including the right, in Holdings’s sole judgment, to shut off the valve into the Medford Spheres.


(c)	Custody Transfer. Custody of all NGLs delivered from the Company into the Medford Spheres shall be transferred from Company to Holdings at the Company’s meter. Title to all of Company’s NGLs received, stored, and handled by Holdings at the Medford Spheres shall remain at all times in Company’s name.

Section 4.02 Redelivery of NGLs . All NGLs stored in the Medford Spheres shall be delivered to Company at Holdings’s pipeline connection with the ONEOK facilities or at any other pipeline connection determined by the Parties. Company shall be responsible for all commercial arrangements with ONEOK or other parties necessary to facilitate such deliveries. Holdings shall not be responsible for any damages and shall not be in breach of this Agreement in the event ONEOK or such other parties will not physically accept deliveries from Holdings’s facilities.

Article V. Access

Section 5.01 Access to the Medford Spheres . Access by Company or its representatives to the Medford Spheres shall be during Regular Medford Spheres Operating Hours. As a condition to being granted access to the Medford Spheres, Company shall require all contractors, carriers and customers designated by it to deliver, receive, sample or inspect Company’s NGLs at the Medford Spheres or to provide any other service for Company, to sign and comply with a terminal access agreement in such form as Holdings may reasonably specify from time to time. Further, Company shall cause all such designated contractors, carriers and customers to comply with all applicable Medford Spheres rules and regulations

and Holdings shall make copies of such rules and regulations available to Company and its designated carriers and customers at the Medford Spheres .

Article VI. Storage Variations

Section 6.01 Storage Variations . Company shall bear any losses or gains that may occur while Company’s NGLs are in storage at the Medford Spheres (such losses or gains, the “ Storage Variations ”), except to the extent that Storage Variations result from Holdings’s negligence or willful misconduct or the negligence or willful misconduct of Holdings’s employees, agents, contractors or subcontractors. Each Month, Holdings shall determine the physical inventory of NGLs and calculate the Storage Variation. Company’s inventory of NGLs in storage at the Medford Spheres shall then be adjusted (increased or decreased) each Month to reflect the Storage Variation.

Article VII. Monthly Statement; Payment; Liens

Section 7.01 Monthly Statement . Promptly after the end of each Month during the Term of this Agreement, Holdings shall provide Company with a statement showing the previous Month’s beginning inventory, receipts, withdrawals, ending inventory, Storage Variation adjustment and the Scheduled Charges due Holdings. If requested by Company, Holdings shall provide Company with copies of individual gauge reports and meter tickets for receipts and withdrawals at the Medford Spheres for such Month, if available.

Section 7.02 Payment .

(a)

(b)

All payments shall be made to Holdings by automated clearing house to an account specified by Holdings from time to time, provided that as long as Holdings is an affiliate of Company, Holdings and Company may settle Company’s financial obligations to Holdings through Company’s normal interaffiliate settlement processes. Any bank charges incurred by Company in remitting funds by automated clearing house shall be for Company’s account. Acceptance by Holdings of any payment from Company for any charge or service after termination or expiration of

this Agreement shall not be deemed a renewal of this Agreement or a waiver by Holdings of any default by Company hereunder.

(c)

If Company reasonably disputes any Monthly statement, in whole or in part, Company shall promptly notify Holdings in writing of the dispute and shall pay the undisputed portion according to the terms of this Section 7.02, and shall promptly seek to resolve the dispute including, if necessary, by arbitration as provided in Section 20.01. An arbitral panel may award reasonable interest on any unpaid amount determined to have been due to Holdings but withheld in good faith.

Section 7.03 Liens . Company hereby grants to Holdings an irrevocable (a) warehouseman’s lien on all of Company’s NGLs in storage at the Medford Spheres and (b) power of attorney to dispose of such NGL at fair market value to the extent of all amounts owed to Holdings by Company hereunder.

Article VIII. Volume Determinations

Section 8.01 Volume Determinations .


(a)	All measurements, volume corrections and calibrations will be made in accordance with Holdings’s measurement procedures, which shall consist of the latest revision of Holdings’s Measurements Manual and the latest ASTM and API MPMS published methods and standards.


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


(c)	All NGLs received from or delivered to the Medford Spheres will be determined by calibrated custody transfer grade meters.


(d)	A Company representative may witness testing, calibration of equipment, meter reading, and gauging of NGLs at the Medford Spheres, at Company’s expense. In the absence of a Company representative, Holdings’s measurements shall be deemed to be accurate.

Article IX. Insurance

Section 9.01 Insurance . Property insurance covering loss or damage to Company’s NGLs that may be desired by Company, shall be carried by Company at Company’s expense. Should Company elect to carry such insurance, then each policy of insurance shall be

endorsed to provide a waiver of subrogation rights in favor of the Holdings Affiliated Parties. Notwithstanding anything in this Agreement to the contrary, Holdings shall not be liable to Company for NGL losses or shortages for which Company is compensated by its insurer.

Article X. Taxes

Section 10.01 Taxes . Company shall be responsible for and shall pay all sales Taxes and similar Taxes on goods and services provided hereunder and any other Taxes now or hereafter imposed by any Governmental Authority in respect of or measured by NGLs handled or stored hereunder or the manufacture, storage, delivery, receipt, exchange or inspection thereof, and Company agrees to promptly reimburse Holdings for any such Taxes Holdings is legally required to pay, upon receipt of invoice therefor. Each Party is responsible for all Taxes in respect of its own real and personal property.

Article XI. Health, Safety and Environment

Section 11.01 Spills; Environmental Pollution .


(a)	In the event of any NGL spill or other environmentally polluting discharge caused by Holdings’s operation of the Medford Spheres, any clean-up resulting from any such spill or discharge and any liability resulting from such spill or discharge shall be the responsibility of Holdings except to the extent such spill or discharge is caused by Company or its affiliates other than Holdings.

(b)

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


(c)	For purposes of this Section 11.01, the negligence of a third party pipeline, tank truck or transport trailer receiving NGLs on Company’s behalf, at its request or for its benefit, shall be attributed to Company.


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

Section 11.02 Inspection . Company may: (a) inspect the Medford Spheres, including health, safety, and environmental audits by inspector(s) chosen by Company; (b) make physical checks of NGL in storage at the Medford Spheres; (c) audit Holdings’s health, safety, environmental, and operational records relating to the performance of this Agreement and otherwise to observe such performance , ; and (d) subject to the provisions of Section 5.01, enter upon Medford Spheres property for any of the foregoing purposes. For clarity, none of the rights identified in this Section 11.02 shall be exercised by Company in such manner as to substantially interfere with or diminish Holdings’s complete control and responsibility for the operation of the Medford Spheres.

Section 11.03 Incident Notification . Both Parties undertake to notify the other as soon as reasonably practical, but in no event more than 24 hours, after becoming aware of any accident, spill or incident involving the other Party’s employees, agents, contractors, sub-contractors or their equipment, or Company’s NGL at the Medford Spheres and to provide reasonable assistance in investigating the circumstances of the accident, spill or incident. Notices required by this Section 11.03 shall be delivered in person, by telephone or by email:



If to Holdings:	If to Company:
Phillips 66 Holdings LLC	Company Refining LP
c/o Phillips 66 Pipeline LLC	c/o Phillips 66 Company, Operator
3010 Briarpark Drive	1075 W. Sam Houston Parkway N.,
Houston, TX 77042	Suite 200
Attn: Manny Cortez	Houston, TX 77043
Central Division Pipeline Manager	Attn: Mike Baker
Phone: 918-977-4196	Phone: 832-765-3212
E-mail: manuel.cortez@p66.com	E-mail: Michael.E.Baker@p66.com

When an accident, spill or incident involving Company’s NGLs requires a report to be submitted to a Governmental Authority, this notification shall be made as soon as reasonably practical in compliance with applicable Law, and a copy of the required report shall be delivered to Company at IncidentFollowup@P66.com. Either Party may change its contact information upon Notice to the other in accordance with this Section 11.03 and Section 13.01.

Article XII. Force Majeure

Section 12.01 Suspension during Force Majeure Events . As soon as possible upon the occurrence of a Force Majeure, a Party affected by a Force Majeure event shall provide the other Party with Notice of the occurrence of such Force Majeure event. Subject to Section

2.02, each Party’s obligations (other than an obligation to pay any amounts due to the other Party which shall not be suspended under this Section 12.01) shall be temporarily suspended during the occurrence of, and for the entire duration of, a Force Majeure event to the extent that such an event prevents Holdings from performing its obligations under this Agreement. Each Party’s obligations (other than an obligation to pay any amounts due to the other Party which shall not be suspended under this Section 12.01) shall be temporarily suspended beginning 20 Days after the commencement of, and for the entire remaining duration of, a Force Majeure event to the extent that such event prevents Company from performing its obligations under this Agreement.

Section 12.02 Obligation to Remedy Force Majeure Events . A Party affected by a Force Majeure event shall take commercially reasonable steps to remedy such situation so that it may resume its performance within a reasonable period of time.

Section 12.03 Strikes and Lockouts . The settlement of strikes, lockouts and other labor disturbances shall be entirely within the discretion of the affected Party and the requirement to remedy a Force Majeure event within a reasonable period of time shall not require the settlement of strikes or lockouts by acceding to the demands of an opposing Person when such course is inadvisable in the discretion of the Party having the difficulty.

Section 12.04 Action in Emergencies . Holdings may temporarily suspend performance of the services to prevent injuries to persons, damage to property or harm to the environment.

Article XIII. Notices

Section 13.01 Notices . Unless otherwise specifically provided in this Agreement, all Notices between the Parties given under or in relation to this Agreement shall be made in writing and shall be deemed to have been properly given if: (i) personally delivered (with written confirmation of receipt); or (ii) delivered by a recognized overnight delivery service (delivery fees prepaid), in either case to the appropriate address set forth below:



If to Holdings:	If to Company:
Phillips 66 Partners Holdings LLC	Company Refining LP
3010 Briarpark Dr.	c/o Phillips 66 Company, Operator
Houston, TX 77042	Houston Operations Center,
Attn: President	1075 W. Sam Houston Parkway N.,
With copy to General Counsel,	Suite 200
Transportation at the same address	Houston, TX 77043
	Attn: General Counsel
	With copy to Michael E. Baker,
	Manager, Refinery NGL Trading
	at the same address

Either Party may change its address for Notice upon Notice to the other in accordance with this Section 13.01.

Section 13.02 Effective upon Receipt . Any Notice given in the manner set forth in Section 13.01 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 XIV. Applicable Law

Section 14.01 Applicable Law . Regardless of the place of contracting, the place of performance or otherwise, this Agreement and all amendments, modifications, alterations or supplements to it, shall be governed and interpreted in accordance with the laws of the state of Texas, without regard to the principles of conflicts of law or any other principle that might apply the law of another jurisdiction.

Article XV. Limitation of Liability

Section 15.01 No Liability for Consequential Damages . In no event shall either Party be liable to the other Party for, and no arbitral panel is authorized to award, any punitive, special, indirect or consequential damages of any kind or character resulting from or arising out of this Agreement, including, without limitation, loss of profits or business interruption, however they may be caused.

Section 15.02 Limitation of Liability . Notwithstanding anything to the contrary in this Agreement, Holdings shall in no event be liable for loss of, or damage to, any of Company’s NGLs except to the extent caused by Holdings’s negligence or willful misconduct, or the negligence or willful misconduct of Holdings’s employees, agents, contractors or subcontractors, in the safekeeping and handling of Company’s NGLs. In no event shall Holdings be liable for more than the replacement of lost or damaged NGLs or, at its option, payment of the replacement cost of any lost or damaged NGL. Each Party shall be discharged from any and all liability with respect to services performed and any loss or damage Claims arising out of this Agreement unless suit or action is commenced with respect to such services, loss or Claim within two (2) years after the cause of action arises.

Article XVI. Default

Section 16.01 Default . Subject to Section 16.03, should either Party default in the prompt performance and observance of any of the terms and conditions of this Agreement, and should such default continue for thirty (30) Days or more after Notice thereof by the non-defaulting Party to the defaulting Party, or should either Party become insolvent, commence

a case for liquidation or reorganization under the United States Bankruptcy Code (or become the involuntary subject of a case for liquidation or reorganization under the United States Bankruptcy Code, if such case is not dismissed within thirty (30) Days) be placed in the hands of a state or federal receiver or make an assignment for the benefit of its creditors, then the other Party shall have the right, at its option, to terminate this Agreement immediately upon Notice to the other Party.

Section 16.02 Non-Exclusive Remedies . Except as otherwise provided, but subject to Article XV, the remedies of Holdings and Company provided in this Agreement shall not be exclusive, but shall be cumulative and shall be in addition to all other remedies in favor of Holdings or Company, at Law or equity.

Section 16.03 Right to Terminate . Subject to Section 16.01, in the event of a default by Company, the Scheduled Charges theretofore accrued shall, at the option of Holdings, become immediately due and payable and Holdings shall also have the right, at its option, to terminate this Agreement immediately upon Notice to Company. In the event of a default by Holdings, Company shall also have the right, at its option, to terminate this Agreement immediately upon Notice to Holdings and withdraw its NGL from the Medford Spheres, provided Company has paid Holdings for the Scheduled Charges that have accrued to date of such withdrawal.

Article XVII. Public Use

Section 17.01 Public Use . This Agreement is made as an accommodation to Company. In no event shall Holdings’s services hereunder be deemed to be those of a public utility or a common carrier. If any action is taken or threatened by any Governmental Authority to declare Holdings’s services hereunder to be those of a public utility or a common carrier, then, in that event, at the option of Holdings and upon Company’s receipt of Holdings’s Notice, Holdings may restructure and restate this Agreement or terminate this Agreement on the effective date of such action as to the affected storage sphere(s) or services.

Article XVIII. Confidentiality

Section 18.01 Confidentiality . The Parties understand and agree that the Scheduled Charges are confidential as between the Parties. Each Party agrees not to disclose such confidential information to any third Person. Each Party may disclose confidential information to its advisors, consultants or representatives ( provided that such Persons agree to maintain the confidentiality thereof) or when compelled to do so by Law (but the disclosing Party must notify the other Party promptly of any such request for confidential information before disclosing it, if practicable, so that the other Party may seek a protective order or other appropriate remedy or waive compliance with this Section 18.01). In the event that the other

Party does not obtain a protective order or other remedy or does not waive compliance with this Section 18.01, the disclosing Party shall disclose only that portion of the confidential information to which the compelling Person is legally entitled.

Article XIX. Miscellaneous

Section 19.01 Disputes between the Parties . Any dispute between the Parties in connection with this Agreement shall be resolved by arbitration in accordance with the procedures set forth in Exhibit B, provided that either Party may seek a restraining order, temporary injunction, or other provisional relief in any court with jurisdiction over the subject matter of the dispute and sitting in Houston, Texas, if such Party in its sole judgment believes that such action is necessary to avoid irreparable injury or to preserve the status quo ante .

Section 19.02 Assignment . Neither Party may assign its rights under this Agreement without the prior written consent of the other Party. However, notwithstanding the immediately preceding sentence, either Party may assign this Agreement to any of its affiliates by providing Notice to the other Party, and Holdings may make collateral assignments of this Agreement to secure working capital or other financing.

Section 19.03 Partnership Change in Control . Upon the occurrence of a Partnership Change in Control, Holdings shall provide Company with Notice of such Partnership Change in Control at least sixty (60) Days prior to the effective date thereof. Within 180 days following receipt of such Notice, Company may elect to terminate this Agreement, effective no earlier than the effective date of such Partnership Change in Control.

Section 19.04 No Third-Party Rights . Except as expressly provided, nothing in this Agreement is intended to confer upon any Person other than the Parties, and their respective successors and assigns, any rights, benefits or obligations.

Section 19.05 Compliance with Laws . Each Party shall at all times comply with all Laws as are applicable to its performance of this Agreement.

Section 19.06 Severability . If any provision of this Agreement or the application thereof shall be found by any arbitral panel or court of competent jurisdiction to be invalid, illegal or unenforceable to any extent and for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the Parties. In any event, the remainder of this Agreement and the application of such remainder shall not be affected thereby and shall be enforced to the greatest extent permitted by Law.

Section 19.07 Non-Waiver . The failure of either Party to enforce any provision, condition, covenant or requirement of this Agreement at any time shall not be construed to be a waiver of such provision, condition, covenant or requirement unless the other Parties are so notified

by such Party in writing. Any waiver by a Party of a default by any other Party in the performance of any provision, condition, covenant or requirement contained in this Agreement shall not be deemed to be a waiver of such provision, condition, covenant or requirement, nor shall any such waiver in any manner release such other Party from the performance of any other provision, condition, covenant or requirement.

Section 19.08 Entire Agreement . This Agreement, together with all Exhibits attached hereto, constitutes the entire Agreement between the Parties relating to its subject matter and it supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, between the Parties relating to the subject matter hereof, and there are no warranties, representations or other agreements between the Parties in connection with the subject matter hereof except as specifically set forth in, or contemplated by, this Agreement.

Section 19.09 Amendments . This Agreement shall not be modified or amended, in whole or in part, except by a written amendment signed by both Parties.

Section 19.10 Survival . Any indemnification granted hereunder by one Party to the other Party or any provision hereof providing for any payment to any Party that has accrued at time of expiration or termination shall survive the termination of all or any part of this Agreement.

Section 19.11 Counterparts; Multiple Originals . This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on each of the Parties. Each of the Parties may sign any number of copies of this Agreement. Each signed copy shall be deemed to be an original, but all of them together shall represent one and the same agreement.

Section 19.12 Exhibits . The Exhibits identified in this Agreement are incorporated in this Agreement and constitute a part of this Agreement. If there is any conflict between this Agreement and any Exhibit, the provisions of the Exhibit shall control.

Section 19.13 Table of Contents; Headings; Subheadings . The table of contents and the headings and subheadings of this Agreement have been inserted only for convenience to facilitate reference and are not intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

Section 19.14 Construction . The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any of the provisions of this Agreement.

Section 19.15 Business Practices . Holdings shall use its best efforts to make certain that all billings, reports, and financial settlements rendered to or made with Company pursuant to this Agreement, or any revision of or amendments to this Agreement, will properly reflect the facts about all activities and transactions handled by authority of this Agreement and that the information shown on such billings, reports and settlement documents may be relied upon by Company as being complete and accurate in any further recording and reporting made by Company for whatever purposes. Holdings shall notify Company if Holdings discovers any errors in such billings, reports, or settlement documents.

[Signature page follows.]

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



PHILLIPS 66 PARTNERS HOLDINGS LLC
By:	Phillips 66 Partners LP, Sole Member of Phillips 66 Partners Holdings LLC
By:	Phillips 66 Partners GP, LLC, General Partner of Phillips 66 Partners LP
By:	/s/ J.T. Liberti
	J.T. Liberti
	Vice President and Chief Operating Officer



PHILLIPS 66 COMPANY
By:	/s/ T.G. Taylor
	T.G. Taylor
	Executive Vice President, Commercial, Marketing, Transportation and Business Development

Exhibit A

Scheduled Fees


1.	Storage Fee : $**/Barrel

2. Holdover Fee: $**/Day (or partial Day)

3. Adjustment. Holdings may increase all charges set forth in Paragraphs 1 and 2 above annually beginning January 1, 2015, in accordance with Section 3.05.

Exhibit B

Arbitration Procedure

(a)

(b)


(c)	The Parties shall have at least twenty (20) Days following the close of hearing within which to submit a brief (not to exceed eighteen (18) pages in length) and ten (10) 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).


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


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

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

EXHIBIT C

NGL SPECIFICATIONS

REFINERY GRADE PROPYLENE SPECIFICATIONS



Test Parameters	Specifications	Test Methods
Propylene	65 LV% Min.	D2163
Ethane & Lighter	2.0 LV% Max.	D2163
Butane & Heavier	1.0 LV% Max.	D2163
Methyl Acetylene	10.0 ppm wt.max	D2712
Propadiene	10.0 ppm wt.max	D2712
Carbon Monoxide	3 wt. PPM Max.	D2504
Carbon Dioxide	10 wt. PPM Max.	D2504
Total Sulfur	50 wt. PPM Max.	ASTM D-4045
Arsine	700 wt. PPB Max.	(Note 1)
Water	No Free Water	Visual
Methanol	5 wt. PPM Max.	UOP-845
Copper Strip Corrosion	#1 Max.	D1838

NOTES ON TEST METHODS: Method numbers listed above, beginning with the letter “D” are American Society for Testing and materials (ASTM) Standard Test Procedures. The most recent year revision for the procedures will be used.

Note 1: For arsine analysis use stain tubes. Alternatively, UOP Method 834-82, a charcoal adsorption/atomic spectrophotometer method may be used.

Exhibit 10.6

TERMINAL SERVICES AGREEMENT

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

Recitals

WHEREAS , Carrier owns certain terminal facilities suitable for receiving refined petroleum products, handling and storing such refined petroleum products, and delivering such refined petroleum products into pipelines and transport trucks at Wichita, Kansas (the “ Wichita North Terminal ”) Kansas City, Kansas (the “Kansas City Terminal ”), Paola, Kansas (the “Paola Terminal ”), Jefferson City, Missouri (the “ Jeff City Terminal ”) and Cahokia, Illinois (the “East St. Louis Terminal ”) (the Wichita North Terminal, Kansas City Terminal, Paola Terminal, and East St. Louis Terminal are generally referred to individually as a “ Terminal ” or collectively as the “ Terminals ”);

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

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

Article I. Defined Terms

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


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


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


(c)	“Barrel” means 42 Gallons.


(d)	“Base Throughput Fee” has the meaning set forth on Exhibit B.


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


(f)	“Borger Products Facility” means the Rocky Station facility owned by Phillips 66 Pipeline LLC in Borger, Texas.


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


(h)	“Butane” shall mean butane meeting the specifications set forth in Exhibit D, subject to Section 8.05.


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


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


(k)	“Carrier Affiliated Parties” means Carrier, Phillips 66 Partners LP and its and their respective contractors, directors, officers, employees and agents.

(l)


(m)	“Commitment” means the Minimum Quarterly Truck Rack Commitment, Minimum Quarterly Biodiesel Commitment, or Minimum Quarterly Ethanol Commitment, as applicable.


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


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


(p)	“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.


(q)	“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.


(r)	“Effective Date” means March 1, 2014.


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

(t)

“Force Majeure” means: (i) acts of God, fires, floods or storms; (ii) compliance with orders of courts or Governmental Authorities; (iii) explosions, wars, terrorist acts or riots; (iv) inability to obtain or unavoidable delays in obtaining material or equipment; (v) accidental disruption of service; (vi) events or circumstances similar to the foregoing (including inability to obtain or unavoidable delays in obtaining material or equipment and disruption of service provided by third parties) that prevent a Party’s ability to perform its obligations under this Agreement, to the extent that such events or circumstances are beyond the Party’s reasonable control and could not have been prevented by the Party’s due diligence; (vii) strikes, lockouts or other industrial disturbances; and (viii) breakdown of refinery facilities, machinery, storage tanks or pipelines irrespective of the cause thereof.


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


(v)	“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.


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


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


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

(z)


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


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


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


(dd)	“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.


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


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


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


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


(ii)	“Partnership Change in Control” means Phillips 66 ceases to Control the general partner of Phillips 66 Partners LP by virtue of any affiliate of Phillips 66 being removed as the general partner of Phillips 66 Partners LP under the terms of the limited partnership agreement of Phillips 66 Partners LP.


(jj)	“Party” means Carrier or Company, 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 Authority, and shall include any successor (by merger or otherwise) of such entity.


(ll)	“Ponca City Refinery” means the refinery owned by Phillips 66 located at Ponca City, Oklahoma.


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


(nn)	“Product” means any commodity owned by Company at the Kansas City Terminal, including gasoline.


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


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


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


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


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


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


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


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


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


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

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

Article II. Term and Termination

Section 2.01 Term . This Agreement shall have a primary term commencing on the Effective Date and continuing for five (5) years (the “ Initial Term ”), and may be renewed by Company for up to two successive, five-year renewal terms (each a “ Renewal Term ”) at Company’s sole option, upon at least 180 Days’ written Notice from Company to Carrier

prior to the end of the Initial Term or first Renewal Term, as applicable. The Initial Term, together with any Renewal Terms shall be referred to in this Agreement as the “Term.”

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

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

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

Section 2.05 Removal of Commodities .

(a)

Company, at its own expense, shall remove all of its Commodities from the Terminals no later than the later of (i) the effective date of the termination or expiration of this Agreement and (ii) ten Days after receipt of Notice to terminate this Agreement in accordance with its terms, provided that Carrier may, in its sole discretion, agree in writing to extend the time for such removal. If, at the end of such period, Company has not removed all of its Commodities, then in addition to any other rights it may have under this Agreement, Carrier shall have the right to take possession of such Commodities and sell them at public or private sale. In the event of such a sale, Carrier shall withhold from the proceeds therefrom all amounts owed to it hereunder and all expenses of sale (including but not limited to reasonable attorneys’ fees and any amounts necessary to discharge any and all liens against the Commodities). The balance of the proceeds, if any, shall be remitted to Company.

(b)

Should any Commodity remain in any Tank beyond the expiration or termination of this Agreement, Company shall remain obligated to perform all of the terms and conditions set forth in this Agreement (including, without limitation, Company’s obligation to pay the Minimum Quarterly Truck Rack Commitment under Section 3.01(a) and any other scheduled charges on Exhibit B that are owed, pro rated for the period between such expiration or termination of this Agreement and the time all Commodities are removed from the Tanks) and, in addition, shall pay an additional Holdover Fee per Barrel per Month or partial Month, as applicable, as set forth on Exhibit B, until all Commodities are removed.


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


(d)	Company will reimburse Carrier for any expense incurred by Carrier in connection with its or Company’s withdrawal of Commodities from the Terminals.

Article III. Minimum Commitments

Section 3.01 Quarterly Truck Rack Commitment .

(a)

During each Calendar Quarter, Company shall tender a combined average of at least 80,000 Barrels per Day of Commodities for delivery through the truck racks at the Terminals, in approximately ratable quantities (such combined average, the “ Minimum Quarterly Truck Rack Commitment ”) at the “Base Throughput Fee” determined in accordance with Exhibit B, and Carrier shall accept, store and redeliver such Commodities in accordance with the terms of this Agreement.


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

(c)

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

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


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

Section 3.02 Minimum Ethanol Blending Commitment .

(a)

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


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

(c)

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


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


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

Section 3.03 Minimum Biodiesel Blending Commitment.

(a)

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


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

(c)

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


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


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

Section 3.04 Partial Period Proration .

(a)

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

(b)

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

Section 3.05 Special Reduction of Minimum Quarterly Transportation Commitment. If Carrier’s use of all or part of a Terminal for the storage and handling of Commodities is restrained, enjoined, restricted or terminated by (a) any Governmental Authority, (b) right of eminent domain or (c) the owner of leased land, Carrier, upon being notified of such restraint, enjoinder, restriction or termination, shall notify Company and the applicable Commitment(s) shall be reduced to the extent that Carrier’s use of the applicable Terminal is so restrained, enjoined, restricted or terminated.

Article IV. Charges

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

Section 4.02 Recovery of Certain Costs .

(a)

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

(b)

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

to allow Carrier to recover the amount paid for such costs over time from Company or another entity.

Section 4.03 Adjustments . As of January 1, 2015, and as of January 1 of each year thereafter while this Agreement is in effect, Carrier may adjust each of the fees set forth on Exhibit B annually by a percentage equal to the greater of zero and the positive change in the Producer Price Index for Finished Goods (Series ID WPUSOP3000) (the “ PPI-FG ”), as reported during the Month of October immediately before the effective date of the adjustment, with respect to the 12-Month period ending at the end of the Month of September immediately preceding such publication, provided that if, with respect to any such 12-Month period or periods, the PPI-FG has decreased, Carrier may subsequently increase such fees to the extent that the percentage change in the PPI-FG since the most recent previous increase in such fees is greater than the aggregate amount of the cumulative decreases in the PPI-FG during the intervening period or periods. In addition, before each Anniversary, and with both parties’ mutual consent, the current market rate may be determined for each of the fees set forth on Exhibit B, as adjusted pursuant to this Section. If the current market rate for a fee is higher or lower than the fee to be in effect on the upcoming Anniversary, then Carrier may adjust such fee to the current market rate effective on the Anniversary. However, in no event shall any fee be reduced below the level of such fee set forth on Exhibit B as of the Effective Date.

Article V. Storage of Commodities

Section 5.01 Commingled Storage . The Parties acknowledge that while Carrier will provide storage at the Terminals as part of the “Base Throughput Fee” determined in accordance with Exhibit B, except as may be described in a separate storage service agreement(s), Carrier is not required to store Company’s Commodities in dedicated storage. Each Commodity may be stored in commingled storage in a Tank at a Terminal with a Commodity belonging to another Person; provided, however, that any Commodity belonging to another Person and commingled with a Commodity belonging to Company shall meet or exceed specifications established by Carrier for pipeline transportation of that Commodity (or in the absence of Carrier specifications, specifications established by Phillips 66 Pipeline LLC for such Commodity and delivered to Carrier) in effect on the date of receipt of Company’s Commodity. Carrier shall not commingle Company’s Commodity with any other Commodity that does not meet such minimum Commodity specifications.

Article VI. Redelivery of Commodities

Section 6.01 Redelivery of Commodities . Company shall provide any documentation reasonably required by Carrier to authorize withdrawals by or on behalf of Company from a Terminal. Upon redelivery of Commodities to Company or its designated carrier or

customer, Carrier shall have no further responsibility for any Claims arising out of possession or use of such Commodities.

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

Article VII. Commodity Quality

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

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

Section 7.03 Non-Conforming Commodities .


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

(b)

Company shall be liable for all reasonable costs and losses in curing, removing, or recovering any Non-Conforming Commodities except to the extent that such non-conformity is due to the negligence or willful misconduct of Carrier. Carrier, at its sole discretion, may attempt to blend the Non-Conforming Commodities, remove and dispose of the Non-Conforming Commodities, or, if necessary, recover any Non-Conforming Commodities from field locations and, except to the extent that such non-conformity is due to the negligence or willful misconduct of Carrier, Company shall reimburse Carrier for all reasonable costs associated therewith. Except to the extent that a non-conformity is due to the negligence or willful misconduct of Carrier, if Company’s Non-Conforming Commodities cause any contamination, dilution or

other damages to Carrier or to the Commodities of other customers of Carrier, Company agrees to indemnify, defend and hold the Carrier Affiliated Parties harmless from and against any Claims incurred by, or charged against any of the Carrier Affiliated Parties, as a result of such event and shall be responsible for all costs and liabilities associated with or incurred as a result of such event.

Article VIII. Other Services

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

Section 8.02 Jet Fuel Handling. Carrier shall provide jet fuel handling services at the Terminals, and Company shall pay the Monthly Jet Fuel Handling Fee determined in accordance with Exhibit B.

Section 8.03 Laboratory Fees and Services.

(a)

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


(b)	Carrier’s liability for sampling and testing services is limited to the charge for the service provided.

Section 8.04 Pumpover. Carrier shall provide pumpover services from the Terminals to connecting pipelines, and Company shall pay the applicable “Pumpover Fee” determined in accordance with Exhibit B.

Section 8.05 Butane Services. Beginning on the Effective Date, Company shall purchase and arrange for transportation of the Butane from Conway, Kansas to the Kansas City Terminal where Carrier will blend the Butane (to the extent provided and not to exceed Carrier’s capacity for Butane blending) with Company’s Product as the Company directs in writing. Each Month, Carrier shall notify Company as to the quantity of Butane to be blended into Company’s Product at the Kansas City Terminal. Company shall be responsible for making the Butane available to Carrier at the Terminal as needed throughout the month. Company will incur certain expenses associated with purchasing and transporting the Butane to the Kansas City Terminal, which expenses will be reflected as a deduction in the calculation of Carrier’s fee for performing the Butane blending service, as set forth in more detail on the attached Exhibit E.


(a)	Specifications. Company will use commercially reasonable efforts to assure that all Butane it delivers hereunder shall comply with the applicable specifications as outlined in Exhibit D. Carrier retains the right to inspect and reject any Butane that does not conform to the applicable specifications.

(b)

If Carrier’s ability to blend Company’s Products with Butane at the Kansas City Terminal is restrained, enjoined, restricted or terminated by (a) any Governmental Authority, (b) right of eminent domain or (c) the owner of leased land, Carrier, upon being notified of such restraint, enjoinder, restriction or termination, shall notify Company promptly upon learning of the likelihood of such event and Carrier’s obligation to provide Butane Services, shall, at Carrier’s option, terminate immediately upon delivery of such notice to Company.

(c)

Carrier shall have the right to terminate the offering of Butane blending services upon 30 Days’ written Notice to Company in the event Carrier determines any testing or upgrading of any portion of the Kansas City Terminal that is used for blending Product with Butane is required to satisfy or comply with Law or to comply with or remedy environmental concerns, or (ii) in the event of damage or destruction to, all or any portion of the Kansas City Terminal that is used for blending Butane with Products, if in Carrier’s sole opinion such testing, upgrading, complying or repairing will require the expenditure of $ 5,000,000.00 or more to restore the Terminal to normal operations.

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

Article IX. Terminal Access

Section 9.01 Terminal Access . Terminal access by Company or its representatives shall be during Regular Terminal Operating Hours. As a condition to being granted access to a Terminal, Company shall require all contractors, carriers and customers designated by it to deliver, receive, sample or inspect Company’s Commodities at such Terminal or to provide any other service for Company, to sign and comply with a terminal access agreement in such form as Carrier may reasonably specify from time to time. Further, Company shall cause all such designated contractors, carriers and customers to comply with all applicable Terminal rules and regulations and Carrier shall make copies of such rules and regulations available to Company and its designated carriers and customers at the Terminals.

Article X. Storage Variations

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

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


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


(b)	either:


(1)	if there is a Storage Loss of the relevant Commodity during that Month, then the product of multiplying (1) negative one by (2) the volume of that net Storage Loss that is in excess of ( a ) 0.5% for ethanol and biodiesel, or ( b ) 0.25% for any other Commodity, or


(2)	if there is a Storage Gain of the relevant Commodity during that Month, then the volume of that net Storage Gain.

Then, separately for each Terminal, Carrier will add each of the Monthly Storage Variation Amounts for each Commodity during the Calendar Year. If the sum of the Monthly Storage Variation Amounts for all Commodities at such Terminal during a Calendar Year (or, with respect to 2014, during the partial Calendar Year during which this Agreement is in effect) is a negative number, then no later than the 22 ^nd day of February of the following Calendar Year (or, if such Day is not a Business Day, on the next Business Day), Carrier shall pay to Company the absolute value of that number. Such payment shall be made by automated clearing house to an account specified by Company from time to time, provided that as long as Carrier is an affiliate of Company, Carrier and Company may settle Carrier’s financial obligations to Company through Company’s normal interaffiliate settlement processes. Any bank charges incurred by Carrier in remitting funds by automated clearing house shall be for Carrier’s account.

Article XI. Monthly Statement; Payment; Liens

Section 11.01 Monthly Statement .

(a)

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


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

(c)

On or before the end of each Month during the Term of this Agreement, Company shall provide Carrier with a statement showing the Company’s purchase price and actual transportation costs associated with the Butane blended with Company’s Product at the Kansas City Terminal during such Month. Promptly after the end of each Month during the Term of this Agreement, Carrier shall provide Company with a statement showing the previous Month’s Butane blending activities for Company and the Scheduled Charges due Carrier. If requested, Company shall provide Carrier with copies of individual invoices documenting Company’s purchase and transportation costs associated with delivering Butane to the Kansas City Terminal.

Section 11.02 Payment .

(a)

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

(b)

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

(c)

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

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

Article XII. Title; Custody

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

Section 12.02 Custody . Custody of all Commodities received by Carrier hereunder from a connecting third party pipeline or from a truck shall pass from such pipeline or truck to Carrier when such Commodities pass the flange connection between such delivering pipeline or truck and the relevant Terminal. Custody of all Commodities withdrawn and delivered to Company hereunder shall pass from Carrier to Company when such Commodities pass

through the flange connection (a) between the delivery hose at the relevant Terminal’s truck loading rack and a receiving transport truck or (b) between the relevant Terminal and a receiving pipeline, as the case may be.

Article XIII. Volume Determinations

Section 13.01 Volume Determinations - General .


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


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

Section 13.02 Terminal Receipts and Withdrawals .


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


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

(c)

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


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

Article XIV. Insurance

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

Article XV. Taxes

Section 15.01 Taxes . Except as set forth in Section 15.02, Company shall be responsible for and shall pay all sales Taxes and similar Taxes on goods and services provided hereunder and any other Taxes now or hereafter imposed by any Governmental Authority in respect of or measured by Commodities handled or stored hereunder or the manufacture, storage, delivery, receipt, exchange or inspection thereof, and Company agrees to promptly reimburse Carrier for any such Taxes Carrier is legally required to pay, upon receipt of invoice therefor. Each Party is responsible for all Taxes in respect of its own real and personal property.

Section 15.02 Butane. Carrier shall be responsible for and shall pay all sales Taxes and similar Taxes on goods and services provided using the Butane supplied by Company, and Carrier agrees to promptly reimburse Company for any such Taxes that Company is legally required to pay, upon receipt of invoice therefor.

Article XVI. Health, Safety and Environment

Section 16.01 Spills; Environmental Pollution .


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

(b)

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

Carrier and Company or a third party’s pipeline, tank truck or transport trailer receiving Commodities on Company’s behalf, at its request or for its benefit, liability and costs of containment or clean-up shall be borne jointly by Carrier and Company in proportion to each Party’s respective negligence.


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


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

Section 16.02 Inspection . During Normal Business Hours, Company may: (a) inspect a Terminal, including health, safety, and environmental audits by inspector(s) chosen by Company; (b) make physical checks of Commodities in storage at any Terminal, (c) audit Carrier’s health, safety, environmental, and operational records relating to the performance of this Agreement and otherwise observe such performance, and (d) subject to the provisions of 0, enter upon any Terminal property for any of the foregoing purposes. For clarity, none of the rights identified in this Section 16.02 shall be exercised by Company in such manner as to substantially interfere with or diminish Carrier’s complete control and responsibility for the operation of the Terminals.

Section 16.03 Incident Notification .

Both Parties undertake to notify the other as soon as reasonably practical, but in no event more than 24 hours, after becoming aware of any accident, spill or incident involving the other’s employees, agents, contractors, sub-contractors or their equipment, or Company’s Commodities at a Terminal and to provide reasonable assistance in investigating the circumstances of the accident, spill or incident. Notices required by this Section 16.03 shall be delivered in person, by telephone or by email:

If to Carrier (East St. Louis Terminal):

Phillips 66 Carrier LLC

c/o Phillips 66 Pipeline LLC

3010 Briarpark Dr.

Houston, TX 77042

Attn: Jim Mayse – Terminal Supervisor

Telephone: 618.857-6053

Email: jim.l.mayse@p66.com

If to Carrier (Kansas City Terminal):

Phillips 66 Carrier LLC

c/o Phillips 66 Pipeline LLC

3010 Briarpark Dr.

Houston, TX 77042

Attn: Rusty Lee – Terminal Supervisor

Telephone: 913.342-0510 Ext. 12

Email: rusty.d.lee@p66.com

If to Company:

Phillips 66 Company

600 North Dairy Ashford Rd.

Houston, TX 77079

Attn: John E. Sweeney

Manager/Loss Control

Telephone: 832-765-3017

Email: john.e.sweeney@p66.com

If to Carrier (Wichita North If to Carrier (Paola Terminal): If to Carrier (Jeff City Terminal):

Terminal):

Phillips 66 Carrier LLC Phillips 66 Carrier LLC Phillips 66 Carrier LLC

c/o Phillips 66 Pipeline LLC c/o Phillips 66 Pipeline LLC c/o Phillips 66 Pipeline LLC

3010 Briarpark Dr. 3010 Briarpark Dr. 3010 Briarpark Dr.

Houston, TX 77042 Houston, TX 77042 Houston, TX 77042

Attn: Andrew Smith – Terminal Attn: Rusty Lee – Terminal Attn: Mark Singleton – Terminal

Supervisor Supervisor Supervisor

Telephone: 316-838-3411 X2258 Telephone: 913.342-0510 Ext. 12 Telephone: 573.636-4984 Ext. 12

Email: Andrew.m.smith@p66.com Email: rusty.d.lee@p66.com Email: mark.a.singleton@p66.com

When an accident, spill or incident involving Company’s Commodities requires a report to be submitted to a Governmental Authority, this notification shall be made as soon as reasonably practical in compliance with applicable Law, and a copy of the required report shall be delivered to Company at IncidentFollowup@P66.com. Either Party may change its contact information upon Notice to the other in accordance with this Section 16.03 and Section 18.01.

Article XVII. Force Majeure

Section 17.01 Suspension during Force Majeure Events . As soon as possible upon the occurrence of a Force Majeure, a Party affected by a Force Majeure event shall provide the other Party with written notice of the occurrence of such Force Majeure event. Subject to Section 2.02, each Party’s obligations (other than an obligation to pay any amounts due to the other Party which shall not be suspended under this Section 17.01) shall be temporarily suspended during the occurrence of, and for the entire duration of, a Force Majeure event to the extent that such an event prevents Carrier from performing its obligations under this Agreement. Each Party’s obligations (other than an obligation to pay any amounts due to the other Party which shall not be suspended under this Section 17.01) shall be temporarily

suspended beginning 20 Days after the commencement of, and for the entire remaining duration of, a Force Majeure event to the extent that such event prevents Company from performing its obligations under this Agreement. At the conclusion of the Force Majeure event, the Minimum Quarterly Truck Rack Commitment, Minimum Quarterly Ethanol Commitment, or Minimum Quarterly Biodiesel Commitment with respect to each Calendar Quarter in which the suspension due to the Force Majeure event remained in effect shall be ratably reduced to reflect such suspension.

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

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

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

Article XVIII. Notices

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



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

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

Section 18.02 Effective upon Receipt . Any Notice given in the manner set forth in Section 18.01 shall be effective upon actual receipt if received during Normal Business Hours, or

at the beginning of the recipient’s next Business Day if not received during Normal Business Hours.

Article XIX. Applicable Law

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

Article XX. Limitation of Liability

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

Section 20.02 Limitation of Liability . Notwithstanding anything to the contrary in this Agreement, and except for Storage Variations, Carrier shall in no event be liable for loss of, or damage to, any Commodities of Company except to the extent caused by Carrier’s negligence or willful misconduct, or the negligence or willful misconduct of Carrier’s employees, agents, contractors or subcontractors, in the safekeeping and handling of any Commodity of Company. In no event shall Carrier be liable for more than the replacement of lost or damaged Commodities or, at its option, payment of the replacement cost of any lost or damaged Commodities. Each Party shall be discharged from any and all liability with respect to services performed and any loss or damage Claims arising out of this Agreement unless suit or action is commenced with respect to such services, loss or Claim within two (2) years after the applicable cause of action arises.

Article XXI. Default

Section 21.01 Default . Subject to Section 21.03, should either Party default in the prompt performance and observance of any of the terms and conditions of this Agreement, and should such default continue for thirty (30) Days or more after Notice thereof by the non-defaulting Party to the defaulting Party, or should either Party become insolvent, commence a case for liquidation or reorganization under the United States Bankruptcy Code (or become the involuntary subject of a case for liquidation or reorganization under the United States Bankruptcy Code, if such case is not dismissed within thirty (30) Days), be placed in the hands of a state or federal receiver or make an assignment for the benefit of its creditors,

then the other Party shall have the right, at its option, to terminate this Agreement immediately upon Notice to the other Party.

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

Section 21.03 Right to Terminate . Subject to Section 21.01, in the event of a default by Company, the Scheduled Charges theretofore accrued shall, at the option of Carrier, become immediately due and payable and Carrier shall also have the right, at its option, to terminate this Agreement. In the event of a default by Carrier, Company shall also have the right, at its option, to terminate this Agreement and withdraw its Commodities from the Terminals, provided Company has paid Carrier for any Scheduled Charges that have accrued to the date of such withdrawal.

Article XXII. Public Use

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

Article XXIII. Confidentiality

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

Article XXIV. Miscellaneous

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

Section 24.02 Assignment .


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


(1)	if Company transfers the Borger Products Facility or the Ponca City Refinery, Company may assign all of a portion of this Agreement to the transferee of such asset subject to the provisions of Section 24.02(b); and


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

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

(b)

If Company assigns any portion of the volume commitments set forth in this Agreement, then Company’s Minimum Quarterly Truck Rack Commitment, Minimum Quarterly Ethanol Commitment, and Minimum Quarterly Biodiesel Commitment shall be reduced accordingly; provided, however, that such reduction does not result in an adverse economic impact to Carrier (it being understood that a reduction would be deemed to have an adverse economic impact to Carrier if, without limitation (i) the reduction resulted in the truck rack throughput commitment being greater than the maximum practicable throughput capacity for the Terminals, (ii) the sum of Company’s and assignee’s volumetric commitments being less in aggregate than Company’s commitment was immediately prior to such assignment, or (iii) the reduction resulted in increased costs to Carrier.

(c)

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

obligations, in which case the assignor shall remain responsible for the performance of such assigned obligations.

Section 24.03 Partnership Change in Control . Upon the occurrence of a Partnership Change in Control, Carrier shall provide Company with Notice of such Partnership Change in Control at least 60 Days prior to the effective date thereof. Within 180 days following receipt of such Notice, Company may elect to terminate this Agreement, effective no earlier than the effective date of such Partnership Change in Control.

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

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

Section 24.06 Severability . If any provision of this Agreement or the application thereof shall be found by any arbitral panel or court of competent jurisdiction to be invalid, illegal or unenforceable to any extent and for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the Parties. In any event, the remainder of this Agreement and the application of such remainder shall not be affected thereby and shall be enforced to the greatest extent permitted by Law.

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

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

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

Section 24.10 Survival . Any indemnification granted hereunder by one Party to the other Party or any provision hereof providing for any payment to any Party that has accrued at time of expiration or termination shall survive the expiration or termination of all or any part of this Agreement.

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

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

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

Section 24.14 Construction . The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any of the provisions of this Agreement.

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

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

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

Section 24.18 Effect of Company Restructuring . If Company decides to restructure its supply, refining or sales operations at the Borger Products Facility in such a way as could reasonably be expected to materially and adversely affect the economics of Company’s performance of its obligations under this Agreement, then the Parties will negotiate in good faith concerning a reduction in Company’s commitment or an exchange of the applicable Terminals (whichever is adversely affected) for other assets not so affected.

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

[Signature page follows.]

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



PHILLIPS 66 CARRIER LLC
By:	Phillips 66 Partners Holdings LLC, Sole Member of Phillips 66 Carrier LLC
By:	Phillips 66 Partners LP, Sole Member of Phillips 66 Partners Holdings LLC
By:	Phillips 66 Partners GP, LLC, General Partner of Phillips 66 Partners LP
By:	/s/ J.T. Liberti
	J.T. Liberti
	Vice President and Chief Operating Officer



PHILLIPS 66 COMPANY
By:	/s/ T.G. Taylor
	T.G. Taylor
	Executive Vice President, Commercial, Marketing, Transportation and Business Development

Signature Page/ Terminal Services Agreement

Exhibit A

Commodities


•	Ultra Low Sulfur Diesel


•	Aviation Gasoline


•	Biodiesel


•	Jet Fuel


•	Slurry


•	Natural Gasoline


•	Reformate


•	Fuel Oil


•	Ethanol


•	Butane


•	Liquid Petroleum Gas


•	Non-Premium Gasoline


•	Non-Premium RBOB Gasoline


•	Premium Gasoline


•	Premium RBOB Gasoline


•	Transmix

Exhibit A/Page 1

Exhibit B

Scheduled Charges


1.	Base Throughput Fee (Rack Rate) : $**/Barrel (applied to total volume blended)


2.	Blending Fees :


Ethanol Blending:	$**/Barrel (applied to volume of neat ethanol blended)


Biodiesel Blending:	$**/Barrel (applied to volume of neat biodiesel blended)


Other Additive Blending:	$**/Barrel (applied to total volume blended)


Red Dye Injection:	$**/Barrel (applied to total dyed volume)


3.	Jet Fuel Handling : $**/Barrel (applied to total volume

blended)


4.	AvGas Handling at Kansas City : $**/Barrel (applied to total volume

blended)


5.	Pumpover Fees :

East St. Louis Pumpover Fee: $**/Barrel (applied to outbound

and inbound volume into connecting third party pipelines)

6. Holdover Fee . $**/Barrel/Month

(or partial Month)


7.	Adjustment . Carrier may adjust all charges set forth in Paragraphs 1, 2, 3, 4, 5 and 6 above annually beginning January 1, 2015, in accordance with Section 4.03.

Exhibit B/Page 1

Exhibit B/Page 2

Exhibit C

Arbitration Procedure

(a)

(b)


(c)	The Parties shall have at least twenty (20) Days following the close of hearing within which to submit a brief (not to exceed eighteen (18) pages in length) and ten (10) 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).


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


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

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

EXHIBIT D

BUTANE SPECIFICATIONS



Refinery Grade Butane Limits
Property	Test Method	Limit
Olefins, max, lv%	ASTM D2163	10.0
Aromatics, max, lv%	ASTM D2163	2.0
Benzene, max, lv%	ASTM D2163	0.03
Sulfur, max, ppm	ASTM D6667 (D4468 or D3246 can be used if correlated back to D6667)	30
Bill of lading review	Not Applicable	must state “refinery”
Vapor Pressure at 100F, max, psig	ASTM D1267, D2598, or D6897	70
Pentane and heavier, max, vol%	ASTM D2163	Report
Corrosion, copper strip, max, rating	ASTM D1838	1
Hydrogen Sulfide	ASTM D2420	Pass
Free Water Content	Visual inspection	None

EXHIBIT E

Butane Blending Service Fees

Carrier’s fee for performing the Butane blending service shall be calculated as follows:

The difference between the dollar value of the Monthly Gasoline Value and the dollar value of the Monthly Butane Value.

Definitions:


1.	Monthly Gasoline Value (MGV): the number of Barrels of Butane blended during the Month (BVB) at the Kansas City Terminal multiplied by the current per-barrel Monthly average ** posting value for subgrade gasoline.


2.	Monthly Butane Value: the BVB at the Kansas City Terminal multiplied by the sum of the following per-Barrel expenses:


a.	Butane Price (BP): Current per Barrel Monthly average ** posting value for Butane (non-blended).


b.	Transportation (T): **


c.	Company Procurement Fee (P): $** per Barrel.


d.	RIN Fee (RF): Per- Barrel fee associated with any RIN obligation created from blending Butane. RF is calculated as follows:

As a formula, the Butane Blending Service Fee above is expressed as:

Exhibit 10.7

Execution Version

________________________________________________________________________

TRANSPORTATION SERVICES AGREEMENT

by and between

PHILLIPS 66 CARRIER LLC

and

PHILLIPS 66 COMPANY

for

the Gold Pipeline System

________________________________________________________________________

TABLE OF CONTENTS



Article I.	Defined Terms
Section 1.01	Defined Terms	1
Section 1.02	Other Defined Terms	4
Section 1.03	Terms Generally	5
Article II.	Term and Termination
Section 2.01	Term	5
Section 2.02	Termination Following a Force Majeure Event	5
Section 2.03	Special Modification by Company	5
Article III.	Minimum Commitments
Section 3.01	Minimum Quarterly Transportation Commitments	5
Section 3.02	Loss of Available Capacity	7
Section 3.03	Partial Period Proration	7
Section 3.04	Special Reduction of Minimum Quarterly Transportation Commitment	7
Section 3.05	Reallocation of Minimum Quarterly Transportation Commitments	7
Article IV.	Tariffs
Section 4.01	Tariff	8
Section 4.02	Adjustment	8
Section 4.03	No Challenge of Rates	8
Section 4.04	Recovery of Certain Costs	9
Article V.	Scheduling
Section 5.01	Scheduling	9
Article VI.	Quality
Section 6.01	Quality	9
Article VII.	Monthly Statement; Payment; Liens
Section 7.01	Monthly Statement	10
Section 7.02	Payment	10
Section 7.03	Liens	11
Article VIII.	Title; Custody
Section 8.01	Title	11
Section 8.02	Custody	11
Article IX.	Volume Determinations
Section 9.01	Volume Determinations - General	11
Section 9.02	Company’s Right to Witness	11
Section 9.03	Delivery Determination	12
Article X.	Insurance
Section 10.01	Insurance	12
Article XI.	Taxes
Section 11.01	Taxes	12
Article XII.	Health, Safety and Environment
Section 12.01	Spills; Environmental Pollution	12
Article XIII.	Force Majeure
Section 13.01	Suspension during Force Majeure Events	13
Section 13.02	Obligation to Remedy Force Majeure Events	13



Section 13.03	Strikes and Lockouts	13
Section 13.04	Action in Emergencies	13
Article XIV.	Notices
Section 14.01	Notices	13
Section 14.02	Effective upon Receipt	14
Article XV.	Applicable Law
Section 15.01	Applicable Law	14
Article XVI.	Limitation of Liability
Section 16.01	No Liability for Consequential Damages	14
Section 16.02	Limitation of Liability	14
Article XVII.	Default
Section 17.01	Default	15
Section 17.02	Non-Exclusive Remedies	15
Section 17.03	Right to Terminate	15
Article XVIII.	Miscellaneous
Section 18.01	Disputes between the Parties	15
Section 18.02	Assignment	15
Section 18.03	Partnership Change in Control	16
Section 18.04	No Third-Party Rights	16
Section 18.05	Compliance with Laws	16
Section 18.06	Severability	17
Section 18.07	Non-Waiver	17
Section 18.08	Entire Agreement	17
Section 18.09	Amendments	17
Section 18.10	Survival	17
Section 18.11	Counterparts; Multiple Originals	17
Section 18.12	Exhibits	17
Section 18.13	Table of Contents; Headings; Subheadings	17
Section 18.14	Construction	18
Section 18.15	Business Practices	18
Section 18.16	Effect of Company Restructuring	18
Section 18.17	Effect of Discontinuation of Publication	18

Exhibits

Exhibit A – Dispute Resolution Procedures

TRANSPORTATION SERVICES AGREEMENT

This transportation services agreement is made and entered into as of the Effective Date by and between PHILLIPS 66 CARRIER LLC , a Delaware limited liability company (“ Carrier ”), and PHILLIPS 66 COMPANY , a Delaware corporation (“ Company ”).

Recitals

WHEREAS , Carrier owns a refined petroleum product pipeline system (the “Gold Pipeline System” or “Pipeline” ) extending from the Rocky Station fence line at Phillips 66 Pipeline LLC’s Borger Products Refinery in Borger, Texas (the “ Borger Refinery ”) to terminal facilities located in Wichita, Kansas (the “ Wichita North Terminal ”), Paola, Kansas (the “ Paola Terminal ”), Kansas City, Kansas (the “ Kansas City Terminal ”), Jefferson City, Missouri (the “ Jeff City Terminal ”), and Cahokia, Illinois (the “ East St. Louis Terminal ” and, along with the Wichita North Terminal, the Paola Terminal, the Kansas City Terminal and the Jeff City Terminal, each a “ Terminal ” or, collectively, the “ Terminals ”); and

WHEREAS, Company intends to deliver refined petroleum products to Origin Points for transportation to Destination Points on the Gold Pipeline System, and Carrier desires to provide such transportation on the Gold Pipeline System for Company, all upon the terms and conditions set forth in this Agreement.

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

Article I. Defined Terms

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


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


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


(c)	“Barrel” means 42 Gallons.


(d)	“Borger Refinery” has the meaning set forth in the Recitals.


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


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


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


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


(i)	“Carrier Tariff” means Carrier’s FERC Tariff Nos. 31.9.0 or 30.3.0 as applicable, and any supplements thereto or reissues thereof.

(j)


(k)	“Commodity” or “Commodities” means any of the commodities permitted by the applicable FERC tariff.


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


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


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


(o)	“Destination Point” means a Terminal (or such other delivery point as Carrier may agree to) to which Carrier shall transport Commodities.


(p)	“Effective Date” means March 1, 2014.


(q)	“FERC” means the United States Federal Energy Regulatory Commission.

(r)

industrial disturbances; and (viii) breakdown of refinery facilities, machinery, storage tanks or pipelines irrespective of the cause thereof.


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


(t)	“Gold Pipeline System” has the meaning set forth in the Recitals.


(u)	“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.


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


(w)	“Joint Participating Tariff” means Heartland FERC Tariff No. 35.3.0 or Magellan FERC Tariff No. 160.8.0, as applicable, and any supplements thereto or reissues thereof, as well as any other joint tariffs involving the Gold Pipeline System in which Carrier may participate.

(x)


(y)	“Loss Allowance Fee” has the meaning set forth in Section 4.01(a).


(z)	“Minimum Quarterly Transportation Commitment” has the meaning set forth in Section 3.01(a).


(aa)	“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.


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


(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 local time in Houston, Texas.


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


(ee)	“Origin Point” means each of the Company’s (or its affiliates’) pipeline connection points located at the Borger Refinery, the Wichita Terminal, or such other point(s) as Carrier may establish, where a Commodity may be accepted for transportation on the Gold Pipeline System.


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


(gg)	“Partnership Change in Control” means Phillips 66 ceases to Control the general partner of Phillips 66 Partners LP by virtue of any affiliate of Phillips 66 being removed as the general partner of Phillips 66 Partners LP under the terms of the limited partnership agreement of Phillips 66 Partners LP.


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


(ii)	“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.


(jj)	“Pipeline” has the meaning set forth in the Recitals.


(kk)	“Ponca City Refinery” has the meaning set forth in Section 18.02(a)(ii).


(ll)	“Quarterly Deficiency Payment” has the meaning set forth in Section 3.01(b).


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


(nn)	“Route” has the meaning set forth in Section 3.02.


(oo)	“Tariff Rate” means the rate applicable from time to time to the shipment of a Commodity through the Pipeline under the terms of the Carrier Tariff or Joint Participating Tariff, which shall be the rate in effect at the Effective Date, adjusted from time to time as provided in Section 4.02 .


(pp)	“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.


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


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

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

Article II. Term and Termination

Section 2.01 Term . This Agreement shall have a primary term commencing on the Effective Date and continuing for ten (10) years (the “ Initial Term ”), and may be renewed by Company, at Company’s sole option, for a single five (5)-year renewal term (the “ Renewal Term ”) upon at least 180 Days’ written Notice from Company to Carrier prior to the end of the Initial Term. The Initial Term and the Renewal Term, if applicable, shall be referred to in this Agreement as the “ Term .”

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

Section 2.03 Special Modification by Company . If Company determines to completely suspend refinery operations at the Borger Refinery for a period of at least 12 consecutive Months, then after Company has made a public announcement of such suspension, Company may provide written Notice to Carrier of its intent to modify this Agreement by deleting the Minimum Quarterly Transportation Commitment (as hereinafter defined) applicable to the Borger Refinery Origin Point and Wichita North Terminal Destination Point as set forth in Section 3.01(a), and this Agreement will be so modified 12 Months following the date such Notice is received by Carrier. In the event Company publicly announces, prior to the expiration of such 12-month period, its intent to resume operations at the Borger Refinery, then such Notice shall be deemed revoked and this Agreement shall continue unmodified in full force and effect as if such Notice had never been delivered.

Article III. Minimum Commitments

Section 3.01 Minimum Quarterly Transportation Commitments .

(a)

During each Calendar Quarter, Company shall tender at the applicable Origin Point (as identified below) for transportation on the Gold Pipeline System to or through the applicable Destination Point (as defined below) an aggregate average of at least the number of Barrels per Day of Commodities set forth below, in approximately ratable quantities (each such average, the applicable “ Minimum Quarterly Transportation Commitment ” applicable to such Origin Point and Destination Point) at the applicable Tariff Rate in effect at the time of the tender. Volumes tendered by Company on any Joint Participating Tariff shall not be applicable to the Minimum Quarterly Transportation Commitment.



Origin Point	Destination Point	Minimum Quarterly Transportation Commitment
Borger Refinery	Wichita North Terminal		54,000 Barrels per Day
Wichita North Terminal	Kansas City Terminal		45,000 Barrels per Day
Wichita North Terminal	Jeff City Terminal		7,000 Barrels per Day
Wichita North Terminal	East St. Louis Terminal		10,000 Barrels per Day


(b)	If Company fails to meet any of its Minimum Quarterly Transportation Commitments for any Route during any Calendar Quarter, then Company will pay Carrier an aggregate deficiency payment ( “ Quarterly Deficiency Payment ”) equal to:


(i)	the sum of the volumes of each such deficiency for each Route (the “ Total Deficiency ”) multiplied by the applicable Tariff Rate in effect as of the last Day for the relevant Calendar Quarter, plus


(ii)	0.25% of the Total Deficiency multiplied by the average midpoint of the prices published by Argus for unleaded gasoline for Group 3 on each publication Day during that Calendar Quarter.


(c)	The dollar amount of any Quarterly Deficiency Payment paid by Company shall be applied as a credit against any amounts incurred by Company and owed to Carrier with respect to volumes of Commodities tendered for transportation to any Destination Point in excess of Company’s applicable Minimum Quarterly Transportation Commitment (or, if this Agreement expires or is terminated, to

volumes that would have been in excess of any of Company’s applicable Minimum Quarterly Transportation Commitments if this Agreement were still in effect) during any of the four Calendar Quarters immediately following the Calendar Quarter for which such Quarterly Deficiency Payment was made, at the end of which time any unused credits arising from such Quarterly Deficiency Payment will expire. This Section 3.01(c) shall survive the expiration or termination of this Agreement.


(d)	Carrier shall provide transportation services from each Origin Point to each applicable Destination Point identified above in addition to Company’s applicable Minimum Quarterly Transportation Commitment on an “as available” basis at the Tariff Rate in effect at the time of the tender.

Section 3.02 Loss of Available Capacity . If, for any reason (other than outages caused by Carrier’s planned maintenance), the average daily capacity of any segment of the Pipeline between any pair of Origin Point and Destination Point as set forth in the chart in Section 3.01(a) (a “ Route ”) during a given Calendar Quarter is less than the Company’s Minimum Quarterly Transportation Commitment for such Calendar Quarter applicable to such Route, or if the capacity of any Route of the Pipeline is required to be allocated among shippers with the result that the average daily capacity of such Route available to Company during a given Calendar Quarter is less than the Company’s Minimum Quarterly Transportation Commitment for such Calendar Quarter applicable to such Route, then Company’s Minimum Quarterly Transportation Commitment for the applicable Calendar Quarter applicable to such Route shall be reduced to equal the average daily capacity available to Company for such Route during such Calendar Quarter.

Section 3.03 Partial Period Proration .

(a)

(b)

Section 3.04 Special Reduction of Minimum Quarterly Transportation Commitment. If Carrier’s use of all or part of the Gold Pipeline System for transportation of any Commodity is restrained, enjoined, restricted or terminated by (a) any Governmental Authority, (b) right of eminent domain or (c) the owner of leased land, Carrier, upon being notified of such restraint, enjoinder, restriction or termination, shall notify Company and the Minimum Quarterly Transportation Commitment shall be reduced to the extent that Carrier’s use of the part of the Gold Pipeline System is restrained, enjoined, restricted or terminated.

Section 3.05 Reallocation of Minimum Quarterly Transportation Commitments . Company shall be permitted to reallocate its Minimum Quarterly Transportation Commitments among the Routes once per calendar year, provided that such reallocation of the Minimum Quarterly Transportation Commitments do not result in an adverse economic impact to Carrier (it being understood that a reallocation would be deemed to have an adverse economic impact to Carrier if, without limitation, (i) the reallocation resulted in the Minimum Quarterly Transportation Commitment for any Route being greater than the maximum practicable throughput capacity for such Route, (ii) the reallocation resulted in the aggregate Minimum Quarterly Transportation Commitment for all four Routes being less than it was immediately prior to the allocation, or (iii) the reallocation resulted in increased costs to Carrier, in each case without taking into account any other modifications to the Minimum Quarterly Transportation Commitment permitted by this Agreement). Such reallocation shall require Company provide written notice to Carrier not less than 60 Days prior to the effective date of such reallocation. Once effective, the modified Minimum Quarterly Transportation Commitments shall remain in effect until the termination of this Agreement unless subsequently reallocated in accordance with this Section 3.05.

Article IV. Tariffs

Section 4.01 Tariff . Shipments under this Agreement shall be subject to, and the Parties shall be required to comply with, the provisions of the applicable Carrier Tariff or Joint Participating Tariff, as applicable.


(a)	Company shall pay to Carrier a Monthly fee (the “ Loss Allowance Fee ”) equal to 0.25% of an aggregate amount equal to the total number of Barrels in aggregate of each Commodity injected into the Pipeline at an Origin Point during the relevant Month multiplied by the average midpoint of the prices published by Argus Group 3 for that Commodity on each publication Day during that Month; and


(b)	Carrier shall be entitled to the value of volume gained in transit and shall be responsible for the value of any volume lost in transit. Company shall pay Carrier the value of any volume gained, and Carrier shall pay Company the value of any volume lost, with the value of a Commodity being equal to the average midpoint of the prices

published by Argus Group 3 for that Commodity on each publication Day during that Month.

For clarity, the Loss Allowance Fee described in Section 4.01(a) and the entitlement and obligation described in Section 4.01 (b) relate only to losses or gains of a type normally incurred in connection with the transportation of Commodities and are exceptions to and not modifications of the general provisions of Section 16.02.

Section 4.02 Adjustment . Carrier may file with FERC to adjust Tariff Rates annually beginning July 1, 2015, at a rate equal to the percentage change in the inflationary index promulgated by FERC, in accordance with FERC’s indexing methodology. If FERC terminates its indexing methodology and does not adopt a new methodology, the parties will negotiate in good faith any adjustments to existing Tariff Rates.

Section 4.03 No Challenge of Rates . Each of Company and Carrier agrees not to commence or support any tariff filing, application, protest, complaint, petition, motion, or other proceeding before FERC for the purpose of requesting that FERC accept or set Tariff Rates applicable to the Gold Pipeline System which are inconsistent with this Agreement; provided, however, that Company reserves its rights under FERC regulations to challenge any proposed changes in the Tariff Rate (a) to the extent that such changes are inconsistent with the indexing method provided in 18 C.F.R. §342.3, or (b) through other rate changing methodologies under 18 C.F.R. §342.4.

Section 4.04 Recovery of Certain Costs . If Carrier agrees to make any expenditures at Company’s request, Company will reimburse Carrier for such expenditures or, at Carrier’s option, Carrier may amend the Carrier Tariff or seek to amend the Joint Participating Tariff (with assistance from Company which shall not be unreasonably withheld or delayed) in order to increase the Tariff Rate so that Carrier may recover the amounts paid for such expenditures over time. If new Laws require Carrier to make substantial and unanticipated expenditures in connection with the services Carrier provides to Company under this Agreement, Company will reimburse Carrier for Company’s proportionate share of the costs of complying with such Laws, or at Carrier’s option, Carrier may amend the Carrier Tariff or seek to amend the Joint Participating Tariff (with assistance from Company which shall not be unreasonably withheld or delayed) in order to increase the Tariff Rate so that Carrier may recover such costs over time.

Article V. Scheduling

Section 5.01 Scheduling . For each Origin Point, Company shall provide Carrier with a written schedule by the tenth Day of the Month preceding the Month during which injections into the Pipeline are to be made, advising Carrier of the volumes of each Commodity to be tendered for transportation, and estimated date(s) of such tenders. Carrier will review and

confirm its ability to receive according to the schedule by the 20th Day of such preceding Month.

Article VI. Quality

Section 6.01 Quality .


(a)	Company agrees not to deliver or cause to be delivered into the Pipeline any Non-Conforming Commodity.

(b)

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

Article VII. Monthly Statement; Payment; Liens

Section 7.01 Monthly Statement .

(a)

Promptly after the end of each Month, Carrier shall provide Company with a statement for such Month, showing for each Commodity nominated on Carrier’s FERC Tariff No. 31.9.0: (i) the volume injected into a Pipeline at an Origin Point, (ii) the Loss Allowance Fee due Carrier, and (iii) the tariff due to Carrier (after application of any credit to which Company may be entitled pursuant to Section 3.01(c) and settlement of any obligations under Section 4.04. If requested by Company, Carrier shall provide Company with copies of individual meter tickets for such Month, if available. For Commodities nominated on a Joint Participating Tariff, similar information should be obtained from the applicable third party.


(b)	The Monthly statement for the last Month in each Calendar Quarter shall include any Quarterly Deficiency Payment that may be due and payable by the Company pursuant to Section 3.01.

Section 7.02 Payment .

(a)

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

(b)

(c)

If Company reasonably disputes any Monthly statement, in whole or in part, Company shall promptly notify Carrier in writing of the dispute and shall pay the undisputed portion according to the terms of this Section 7.02, and shall promptly seek to resolve the dispute including, if necessary, by arbitration as provided in Section 18.01. An arbitral panel may award reasonable interest on any unpaid amount determined to have been due to Carrier but withheld in good faith.

Section 7.03 Liens . Company hereby grants to Carrier an irrevocable (a) warehouseman’s lien on all of Company’s Commodities in transit and (b) power of attorney to dispose of such Commodities at fair market value to the extent of all amounts owed to Carrier by Company hereunder.

Article VIII. Title; Custody

Section 8.01 Title . Company shall retain title to all of Company’s Commodities in transit on the Pipeline at all times. This provision does not preclude Company from any intraline transfer of title to a third party; in the event of such a transfer, such third party, and not

Carrier, shall have title to the affected Commodity according to the terms of the relevant agreement between Company and such third party it being understood that upon any such transfer of title, Company shall retain any and all liabilities accrued under this Agreement in respect of such Commodities.

Section 8.02 Custody . Carrier shall be deemed to have custody of a Commodity injected into the Pipeline from the time such Commodity passes through the flange connection between the relevant Origin Point and the Pipeline until it is delivered to Company or, at the direction of Company, to a third party through the flange connection at the applicable Destination Point.

Article IX. Volume Determinations

Section 9.01 Volume Determinations - General .


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


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


(c)	All Commodities delivered to or received from the Pipeline will be determined by calibrated custody transfer grade meters.

Section 9.02 Company’s Right to Witness . A Company representative may witness the testing, calibration of equipment and meter reading, at Company’s expense. In the absence of a Company representative, Carrier’s measurements shall be deemed to be accurate.

Section 9.03 Delivery Determination . The volumes of Company’s Commodities delivered hereunder shall be determined by Carrier’s meter at the point nearest before the applicable custody transfer point and recorded on a bill of lading.

Article X. Insurance

Section 10.01 Insurance . Property insurance covering loss or damage to Company’s Commodities that may be desired by Company, shall be carried by Company at Company’s expense. Should Company elect to carry such insurance, then each policy of insurance shall be endorsed to provide a waiver of subrogation rights in favor of the Carrier Affiliated Parties. Notwithstanding anything in this Agreement to the contrary, Carrier shall not be

liable to Company for Commodity losses or shortages for which Company is compensated by its insurer.

Article XI. Taxes

Article XII. Health, Safety and Environment

Section 12.01 Spills; Environmental Pollution .


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

(b)


(c)	For purposes of this Section 12.01, the negligence of a third party pipeline, tank truck or transport trailer receiving Commodities on Company’s behalf, at its request or for its benefit shall be attributed to Company.


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

Article XIII. Force Majeure

Section 13.02 Obligation to Remedy Force Majeure Events . A Party affected by a Force Majeure event shall take commercially reasonable steps to remedy such situation so that it may resume the full performance of its obligations under this Agreement within a reasonable period of time.

Section 13.04 Action in Emergencies . Carrier may temporarily suspend performance of the services to prevent injuries to persons, damage to property or harm to the environment.

Article XIV. Notices

If to Carrier: If to Company:

Phillips 66 Carrier LLC            Phillips 66 Company
c/o Phillips 66 Pipeline LLC            Attn: General Manager Supply
3010 Briarpark Dr.                and Distribution

Houston, TX 77042 3010 Briarpark Dr.

Attn: President Transportation Houston, TX 77042

With copy to General Counsel With copy to General Counsel

at same address at same address

Either Party may change its address for Notice upon Notice to the other Party in accordance with this Section 14.01.

Article XV. Applicable Law

Section 15.01 Applicable Law . Regardless of the place of contracting, the place of performance or otherwise, this Agreement and all amendments, modifications, alterations or supplements to it, shall be governed and interpreted in accordance with the laws of the state of Texas without regard to the principles of conflicts of law or any other principle that might apply the law of another jurisdiction.

Article XVI. Limitation of Liability

Section 16.02 Limitation of Liability . Notwithstanding anything to the contrary in this Agreement, Carrier shall in no event be liable for loss of, or damage to, any Commodities of Company except to the extent caused by Carrier’s negligence or willful misconduct, or the negligence or willful misconduct of Carrier’s employees, agents, contractors or subcontractors, in the safekeeping and handling of any Commodity of Company. In no event shall Carrier be liable for more than the replacement of lost or damaged Commodities or, at its option, payment of the replacement cost of any lost or damaged Commodities. Each Party shall be discharged from any and all liability with respect to services performed and any loss or damage Claims arising out of this Agreement unless suit or action is commenced

with respect to such services, loss or Claim within two (2) years after the applicable cause of action arises.

Article XVII. Default

Section 17.01 Default . Subject to Section 17.03, should either Party default in the prompt performance and observance of any of the terms and conditions of this Agreement, and should such default continue for thirty (30) Days or more after Notice thereof by the non-defaulting Party to the defaulting Party, or should either Party become insolvent, commence a case for liquidation or reorganization under the United States Bankruptcy Code (or become the involuntary subject of a case for liquidation or reorganization under the United States Bankruptcy Code, if such case is not dismissed within thirty (30) Days), be placed in the hands of a state or federal receiver or make an assignment for the benefit of its creditors, then the other Party shall have the right, at its option, to terminate this Agreement immediately upon Notice to the other Party.

Section 17.03 Right to Terminate . Subject to Section 17.01, in the event of a default by Company, the amounts theretofore accrued shall, at the option of Carrier, become immediately due and payable and Carrier shall also have the right, at its option, to terminate this Agreement. In the event of a default by Carrier, Company shall also have the right, at its option, to terminate this Agreement, provided Company has paid Carrier for the amounts that have accrued to the date of such termination.

Article XVIII. Miscellaneous

Section 18.01 Disputes between the Parties . Any dispute between the Parties in connection with this Agreement shall be resolved by arbitration in accordance with the procedures set forth in Exhibit B; provided, however, that either Party may seek a restraining order, temporary injunction, or other provisional relief in any court with jurisdiction over the subject matter of the dispute and sitting in Houston, Texas, if such Party in its sole judgment believes that such action is necessary to avoid irreparable injury or to preserve the status quo ante .

Section 18.02 Assignment .


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


(i)	if Company transfers the Borger Refinery, Company may assign this Agreement to the transferee of the Borger Refinery subject to the provisions of Section 18.02(b);

(ii)

if Company transfers the Ponca City Refinery located in Ponca City, Oklahoma (the “ Ponca City Refinery ”), Company may assign a portion of this Agreement to the transferee of the Ponca City Refinery, subject to the provisions of Section 18.02(b), and allocate its applicable Minimum Quarterly Transportation Commitments with respect to the Routes between itself and the transferee, provided that such reallocation of the Minimum Quarterly Transportation Commitment does not result in an adverse economic impact to Carrier (it being understood that a reallocation would be deemed to have an adverse economic impact to Carrier if, without limitation, (i) the reallocation resulted in the aggregate Minimum Quarterly Transportation Commitment for any Route being greater than the maximum practicable throughput capacity for such Route, (ii) the reallocation resulted in the aggregate Minimum Quarterly Transportation Commitment for all four Routes (whether the responsibility of Company or its assignee(s)) being less than it was immediately prior to the allocation, or (iii) the reallocation resulted in increased costs to Carrier, in each case without taking into account any other modifications to the Minimum Quarterly Transportation Commitment permitted by this Agreement); and


(iii)	Carrier may make collateral assignments of this Agreement to secure working capital or other financing:

provided; however, that in no event shall Company be required to consent to Carrier’s assignment of this Agreement to any Person that is engaged in the business of refining and marketing petroleum products (or that directly or indirectly Controls or is Controlled by a Person that is engaged in the business of refining and marketing petroleum products) in the states of Texas, Kansas, Illinois or Missouri. Notwithstanding anything in this Section 18.02(a) to the contrary, either Party may assign this Agreement to any of its affiliates by providing written notice to the other Party.

(b)

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

Section 18.03 Partnership Change in Control . Upon the occurrence of a Partnership Change in Control, Carrier shall provide Company with Notice of such Partnership Change

in Control at least 60 Days prior to the effective date thereof. Within 180 days following receipt of such Notice, Company may elect to terminate this Agreement, effective no earlier than the effective date of such Partnership Change in Control.

Section 18.04 No Third-Party Rights . Except as expressly provided, nothing in this Agreement is intended to confer any rights, benefits or obligations to any Person other than the Parties and their respective successors and assigns.

Section 18.05 Compliance with Laws . Each Party shall at all times comply with all Laws as are applicable to its performance of this Agreement.

Section 18.06 Severability . If any provision of this Agreement or the application thereof shall be found by any arbitral panel or court of competent jurisdiction to be invalid, illegal or unenforceable to any extent and for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the Parties. In any event, the remainder of this Agreement and the application of such remainder shall not be affected thereby and shall be enforced to the greatest extent permitted by Law.

Section 18.07 Non-Waiver . The failure of either Party to enforce any provision, condition, covenant or requirement of this Agreement at any time shall not be construed to be a waiver of such provision, condition, covenant or requirement unless the other Parties are so notified by such Party in writing. Any waiver by a Party of a default by any other Party in the performance of any provision, condition, covenant or requirement contained in this Agreement shall not be deemed to be a waiver of such provision, condition, covenant or requirement, nor shall any such waiver in any manner release such other Party from the performance of any other provision, condition, covenant or requirement.

Section 18.08 Entire Agreement . This Agreement, together with all Exhibits attached hereto, constitutes the entire Agreement between the Parties relating to its subject matter and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, between the Parties relating to the subject matter hereof, and there are no warranties, representations or other agreements between the Parties in connection with the subject matter hereof except as specifically set forth in, or contemplated by, this Agreement.

Section 18.09 Amendments . This Agreement shall not be modified or amended, in whole or in part, except by a written amendment signed by both Parties.

Section 18.10 Survival . Any indemnification granted hereunder by one Party to the other Party or any provision hereof providing for any payment to any Party that has accrued at time of expiration or termination shall survive the expiration or termination of all or any part of this Agreement.

Section 18.11 Counterparts; Multiple Originals . This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on each of the Parties. Each of the Parties may sign any number of copies of this Agreement. Each signed copy shall be deemed to be an original, but all of them together shall represent one and the same agreement.

Section 18.12 Exhibits . The Exhibits identified in this Agreement are incorporated in this Agreement and constitute a part of this Agreement. If there is any conflict between this Agreement and any Exhibit, the provisions of the Exhibit shall control.

Section 18.13 Table of Contents; Headings; Subheadings . The table of contents and the headings and subheadings of this Agreement have been inserted only for convenience to facilitate reference and are not intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

Section 18.14 Construction . The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any of the provisions of this Agreement.

Section 18.15 Business Practices . Carrier shall use its best efforts to make certain that all billings, reports, and financial settlements rendered to or made with Company pursuant to this Agreement, or any revision of or amendments to this Agreement, will properly reflect the facts about all activities and transactions handled by authority of this Agreement and that the information shown on such billings, reports and settlement documents may be relied upon by Company as being complete and accurate in any further recording and reporting made by Company for whatever purposes. Carrier shall notify Company if Carrier discovers any errors in such billings, reports, or settlement documents.

Section 18.16 Effect of Company Restructuring . If Company decides to restructure its supply, refining or sales operations at any of the Terminals in such a way as could reasonably be expected to materially and adversely affect the economics of Company’s performance of its obligations under this Agreement, then the Parties will negotiate in good faith a reduction in Company’s Minimum Quarterly Transportation Commitments or an exchange of the Pipeline for other assets not so affected.

Section 18.17 Effect of Discontinuation of Publication . If Argus ceases to provide the information to be obtained therefrom pursuant to this Agreement, the Parties shall negotiate in good faith to agree upon a replacement publication or pricing mechanism.

[Signature page follows.]

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



PHILLIPS 66 CARRIER LLC
By:	Phillips 66 Partners Holdings LLC, Sole Member of Phillips 66 Carrier LLC
By:	Phillips 66 Partners LP, Sole Member of Phillips 66 Partners Holdings LLC
By:	Phillips 66 Partners GP, LLC, General Partner of Phillips 66 Partners LP
By:	/s/ J.T. Liberti
	J.T. Liberti
	Vice President and Chief Operating Officer



PHILLIPS 66 COMPANY
By:	/s/ T.G. Taylor
	T.G. Taylor
	Executive Vice President, Commercial, Marketing, Transportation and Business Development

Exhibit A

Arbitration Procedure

(a)

(b)


(c)	The Parties shall have at least twenty (20) Days following the close of hearing within which to submit a brief (not to exceed eighteen (18) pages in length) and ten (10) 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).

Exhibit A/Page 1


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


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

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

Exhibit A/Page 2

EXECUTION COPY

Exhibit 10.8

ASSIGNMENT, ASSUMPTION AND MODIFICATION OF NOTE

THIS ASSIGNMENT, ASSUMPTION AND MODIFICATION OF NOTE (“ Assumption ”) is dated effective as of March 1, 2014 by and among Phillips 66 Company, a Delaware corporation (“ Original Borrower ”), Phillips 66 Partners LP, a Delaware limited partnership (“ New Borrower ”), and Phillips Gas Company Shareholder, Inc., a Delaware corporation (“ Lender ”).

WITNESSETH:

WHEREAS, Original Borrower executed and delivered to Lender a Term Loan Note dated February 13, 2014 in the original principal amount of One Hundred Sixty Million and No/100’s Dollars ($160,000,000.00) (the “ Original Note ”), which Original Note is attached hereto as Exhibit A ;

WHEREAS, as partial consideration for the contribution by Original Borrower to New Borrower of certain assets, New Borrower will, with Lender’s consent, assume Original Borrower’s obligations and liabilities under the Original Note, as amended hereby;

NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Original Borrower hereby irrevocably assigns to New Borrower, without recourse to Original Borrower, all of Original Borrower’s obligations under the Original Note, as amended by this Assumption. New Borrower hereby assumes, as its direct and primary obligation, all of Original Borrower’s obligations under the Original Note, as amended by this Assumption, and agrees to pay Lender the outstanding principal balance due on, and all interest which accrues on and in accordance with the terms of, the Original Note as amended hereby. From and after the date hereof, all references in the Original Note to “Borrower” as defined in the Original Note shall be deemed to be a reference to New Borrower as the Borrower.

2. The parties hereto agree that, as of the date hereof (a) the outstanding principal balance on the Original Note is One Hundred and Sixty Million and No/100’s Dollars ($160,000,000.00) and (b) there is no “Event of Default” (as defined under the Original Note) or any event which, with the passage of time or the giving of notice, or both, would become an “Event of Default.”

3. The Original Note is amended as follows:


(a)	Subsection (c) under “Event of Default” on page 2 is hereby amended in its entirety to read as follows:

EXECUTION COPY

“ (c)(i) Phillips 66, a Delaware corporation, ceases to own, directly or indirectly, a majority of the equity interests of, or ceases to Control, the Borrower’s general partner (the “ General Partner ”); or (ii) the General Partner ceases to be the sole general partner of, or ceases to Control, the Borrower. “ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person or entity, whether through the ability to exercise voting power, by contract or otherwise.”


(b)	A new paragraph is added at the end of the Original Note as follows:

“It is hereby understood and agreed that the General Partner shall have no liability, as general partner or otherwise, for the payment of any amount owing or to be owing hereunder. Lender agrees for itself and its successors and assigns that no claim arising against Borrower under this Note shall be asserted against the General Partner or its assets. Notwithstanding the foregoing, nothing in this paragraph shall be construed so as to prevent Lender from commencing any action, suit or proceeding with respect to or causing legal papers to be served upon the General Partner for the purpose of obtaining jurisdiction over Borrower.”


(c)	The Original Note as amended hereby will be guaranteed by a guaranty to be executed and delivered by the Original Borrower as of the date hereof in the form attached hereto as Exhibit B (the “ Guaranty ”).


4.	The parties hereto intend that, except as provided in this Assumption, this Assumption shall not release, diminish, impair, reduce, or, except as expressly stated herein, otherwise affect any of the obligations under the Original Note. The parties hereto agree to take such further action as may be necessary or appropriate to effect the purposes of this Assignment.


5.	Lender hereby releases the Original Borrower from its obligations under the Original Note, as amended hereby, and agrees that Original Borrower is no longer a “Borrower” under the Original Note. From and after the date hereof, Original Borrower will be liable only as guarantor under the Guaranty.


6.	This Assumption and the rights and obligations of the parties under this Assumption shall be governed by and construed and interpreted in accordance with the laws of the State of Texas, without giving effect to the principles of conflicts of laws of that state. This Assumption is binding on and shall inure to the benefit of the signatories hereto

EXECUTION COPY

and their respective successors and assigns. This instrument may be executed in one or more counterparts, including electronic, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. In the event that any signature is delivered by facsimile or other electronic transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.


7.	THIS ASSUMPTION REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.

[ Remainder of Page Intentionally Left Blank. Signature Pages Follow.]

EXECUTION COPY

ORIGINAL BORROWER:

Phillips 66 Company

By: /s/ Brian R. Wenzel

Name: Brian R. Wenzel

Title: Vice President and Treasurer

NEW BORROWER:

Phillips 66 Partners LP

By: Phillips 66 Partners GP LLC, its

General Partner

By: /s/ Brian R. Wenzel

Name: Brian R. Wenzel

Title: Vice President and Treasurer

LENDER:

Phillips Gas Company Shareholder, Inc.

By: /s/ Brian R. Wenzel

Name: Brian R. Wenzel

Title: Vice President and Treasurer

EXHIBIT A

[Attach Executed Original Note]

EXECUTION COPY

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. IT MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.

TERM LOAN NOTE



$160,000,000.00	February 13, 2014

For value received, the undersigned Phillips 66 Company, a Delaware corporation, with principal offices at 3010 Briarpark Drive, Houston, TX 77042 (“Borrower"), hereby promises to pay to the order of Phillips 66 Gas Company Shareholder, Inc., a Delaware corporation, with principal offices at 3010 Briarpark Dr., Houston, TX 77042 (“Lender"), the principal amount of One Hundred Sixty Million and No/100’s Dollars ($160,000,000.00) (the "Loan") all as required by this Term Loan Note (this "Note"). The Loan is not revolving and any amounts repaid may not be reborrowed by Borrower.

Subject to the terms mad conditions of this Note, Borrower agrees to repay to Lender the aggregate outstanding principal balance of the Loan, together with accrued and unpaid interest thereon as set forth below, on February 28, 2019 (the "Maturity Date") or such earlier date upon which the maturity of the Loan may have been accelerated pursuant to the terms hereof.

The Loan shall bear interest on the unpaid principal balance, from the date of borrowing to the date of payment at the rate of three percent (3%) per annum. Such interest shall be (i) calculated based upon a year of 360 days for the actual number of days elapsed and (ii) paid, as applicable, (A) quarterly in arrears on the first day following the last day of each calendar quarter, beginning on July 1, 2014, and (B) on the Maturity Date. If Borrower fails to pay any principal or interest payment as and when due, any amount not paid shall bear interest at the rate of five percent (5 %) per annum instead of the interest rate stated above, from the date due to the date on which such amount is paid in full.

Notwithstanding the foregoing or any other provision of this Note, interest on the Loan and other amounts due hereunder at any time shall be limited to the highest lawful rate that may be charged under the laws of the State of Texas at such time (the "Highest Lawful Rate"). It is the intention of Lender and Borrower to conform strictly to any applicable usury laws. Accordingly, notwithstanding any term of this Note to the contrary, if Lender contracts for, charges, or receives any consideration that constitutes

interest in excess of the Highest Lawful Rate, then any such excess shall be canceled automatically and, if previously paid, shall at Lender’s option be applied to the outstanding amount of the Loan or refunded to Borrower. In determining whether any interest exceeds the Highest Lawful Rate, such interest shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread in equal parts throughout the term of this Note.

Lender s hall record in its records the amount of all payments of principal and interest on the Loan. Any failure of Lender to make such recordings, however, shall not affect Borrower’s repayment obligations. Lender’s records shall be presumptive evidence of the principal and interest owed by Borrower, absent manifest error.

All payments made under this Note shaI1 be made without setoff or counterclaim not later than 5:00 P.M. (Houston, Texas, time) on the day when due in lawful money of the United States of America to Lender at its address set forth above or such other location as Lender shall designate in writing to Borrower. Whenever any payment to be made under this Note shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of the payment of interest. "Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in Houston, TX are authorized or required by law to close.

If any one or more of the following events (each, an "Event of Default") shall occur and be continuing:

(a) Borrower shall fail to pay (i) any principal of the Loan as and when due in accordance with the terms hereof; (ii) any interest on the Loan within five Business Days after any such interest becomes due in accordance with the terms hereof; or (iii) any other amount payable hereunder, within ten Business Days after any such other amount becomes due in accordance with the terms hereof; or

(b) Borrower shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of itself or of all or a substantial part of its property, (ii) become unable, admit in writing its inability or fail to pay its debts generally as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent, (v) commence a voluntary case under the federal bankruptcy laws of the United States of America or file a voluntary petition or answer seeking reorganization, an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a

petition filed against it in any bankruptcy, reorganization or insolvency proceeding, or action shall be taken by it for the purpose of effecting any of the foregoing, or (vi) if without the application, approval or consent of Borrower, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking in respect of Borrower an order for relief or an adjudication in bankruptcy, reorganization, dissolution, winding up, liquidation, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Borrower or of all or any substantial all of its assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Borrower in good faith, the same shall (A) result in the entry of an order for relief or any such adjudication or appointment or (B) continue undismissed or unstayed for any period of 90 consecutive days; or

(c) Phillips 66 ceases to own, directly or indirectly, a majority of the equity interests of, or ceases to Control, the Borrower. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person or entity, whether through the ability to exercise voting power, by contract or otherwise;

then, and in any such event, (A) if such event is an Event of Default specified in clauses (iv), (v) or (vi) of clause (b) above, automatically the Loan (with accrued interest thereon) shall immediately become due and payable and (B) if such event is any other Event of Default, Lender may by notice of default to Borrower, declare the Loan (with accrued interest thereon) to be due and payable forthwith, whereupon the same shall immediately become due and payable. Presentment, demand, protest, notice of intent to accelerate, notice of acceleration, and all other notices of any kind are hereby expressly waived by Borrower.

No failure or delay by Lender to exercise any right or power shall operate as a waiver thereof, nor shall any partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power preclude any other or further exercise of such right or power. No waiver of any right or power of Lender in this Note shall be effective unless given in writing signed by Lender. This Note may not be amended or modified except by a writing signed by the parties hereto. All notices under this Note shall be in writing and delivered to the parties hereto at their respective principal offices stated at the beginning hereof.

Borrower shall reimburse Lender on demand for any fees or other expenses reasonably incurred by Lender in connection with the enforcement of this Note and the collection of the Loan and any other amounts due Lender hereunder.

This Note shall be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Lender may assign its lights and obligations under this Note without Borrower’s consent. Borrower may not assign this Note or delegate any of its duties hereunder without the express written consent of Lender.

Borrower expressly represents and warrants to Lender that (i) no promise or agreement not expressed in this Note has been made by Lender, (ii) Borrower is not relying upon any statement or representation of Lender and (iii) Borrower is relying on its own judgment and has been represented by legal counsel other than Lender in this matter.

This Note shall be construed in accordance with and governed by the laws of the State of Texas. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

If any term or provision of this Note shall be determined to be illegal or unenforceable, all other terms and provisions of this Note shall nevertheless remain effective and shall be enforced to the fullest extent permitted by applicable law.

Borrower agrees (a) to furnish upon request to Lender such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as Lender may reasonably request for the purpose of carrying out the intent of this Note.

THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.

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Executed as of the day and year first above written.



BORROWER: PHILLIPS 66 COMPANY
By:	/s/ Brian R. Wenzel
Name:	Brian R. Wenzel
Title:	Vice President and Treasurer

EXHIBIT B

Form of Guaranty Attached

GUARANTY

This Guaranty (“ Guaranty ”) dated effective as of March 1, 2014, is made by Phillips 66 Company, a Delaware corporation (“ Guarantor ”), in favor of Phillips Gas Company Shareholder, Inc., a Delaware corporation (“ Guaranteed Party ”).

WITNESSETH:

WHEREAS, Phillips 66 Partners LP, a Delaware limited partnership (“ PSXP ”), is an indirect subsidiary of Guarantor and a publicly traded master limited partnership; and

WHEREAS, Guaranteed Party is a wholly-owned subsidiary of Guarantor and is currently owed $160,000,000.00 by Guarantor pursuant to that certain Term Promissory Note dated as of February 13, 2014 ( as amended, modified, restated or renewed, the “ Note ”);

WHEREAS, as partial consideration for the contribution by Guarantor to PSXP of certain assets, PSXP will, with Guaranteed Party’s consent, assume Guarantor’s obligations and liabilities under the Note;

WHEREAS, Guaranteed Party’s consent to such assignment and assumption is subject to the condition that Guarantor execute this Guaranty in favor of Guaranteed Party;

NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

1. Guaranty . Guarantor unconditionally and absolutely guarantees, as a continuing guaranty of payment and not merely collection, the payment of all monies owed by PSXP to Guaranteed Party that become due and payable in accordance with the terms of the Note (the “ Guaranteed Obligations ”) plus Guaranteed Party’s reasonable costs and expenses, including reasonable attorney’s fees, incurred by Guaranteed Party to collect the underlying indebtedness or to enforce any of its rights hereunder (the “ Collection Costs ”). If Guaranteed Party notifies Guarantor in writing by proper notice that Guaranteed Party is drawing on this Guaranty for the payment of all or any part of the Guaranteed Obligations, Guarantor shall pay or cause to be paid the amount of such Guaranteed Obligations to Guaranteed Party within five Business Days after receipt of such notice. “ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in Houston, TX are authorized or required by law to close.

2. Limit . Guarantor’s liability under this Guaranty is specifically limited to the payment of the Guaranteed Obligations that PSXP is expressly required to pay under the Note (even if such

Guaranteed Obligations are deemed to be damages), plus any Collection Costs. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS GUARANTY, GUARANTOR SHALL NOT BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE EXCEPT TO THE EXTENT EXPRESSLY PROVIDED FOR IN THE NOTE TO BE DUE FROM PSXP TO GUARANTEED PARTY.

3. Term . This Guaranty shall terminate on full and final payment of the Guaranteed Obligations.

4. Nature of Guaranty . Guarantor’s obligations hereunder with respect to any Guaranteed Obligation shall not be limited, diminished, or otherwise affected by the existence, validity, enforceability, perfection, release, or extent of any collateral for such Guaranteed Obligations. Guaranteed Party will not be obligated to file any claim relating to the Guaranteed Obligations owing to it in the event that PSXP becomes subject to a bankruptcy, reorganization, or similar proceeding, and the failure of Guaranteed Party to so file shall not affect Guarantor’s obligations hereunder. If after receipt from PSXP of any payment of all or any part of the Guaranteed Obligations, Guaranteed Party is compelled to surrender or voluntarily surrenders such payment to any person because such payment is or may be avoided, invalidated, set aside, or determined to be a preference, fraudulent conveyance, or impermissible set-off under bankruptcy, insolvency, reorganization or similar laws affecting creditor’s rights, then the Guaranteed Obligations or part thereof intended to be satisfied shall be reinstated or returned by Guaranteed Party, and this Guaranty shall continue to be effective as if such payment had not been made or value received notwithstanding any revocation thereof.

5. Representations and Warranties . Guarantor represents and warrants to Guaranteed Party on the date hereof that (a) it is duly organized and validly existing and in good standing under the laws of the jurisdiction in which it was organized and has the power and authority to execute, deliver and perform this Guaranty; (b) the execution, delivery and performance of this Guaranty require no action by, or filing with, any governmental body or any court having jurisdiction over Guarantor; and (c) this Guaranty constitutes the legal, valid and binding obligations of Guarantor, enforceable against Guarantor in accordance with its terms, subject, as to enforceability only, to applicable bankruptcy, moratorium, insolvency or similar laws affecting the rights of creditors generally and to general principles of equity.

6. Subrogation . Subject to the second sentence of this paragraph, Guarantor waives its right to be subrogated to the rights of Guaranteed Party against PSXP with respect to any Guaranteed Obligations paid by Guarantor until all Guaranteed Obligations have been paid in full to Guaranteed Party and Guarantor has fully satisfied all of Guarantor’s obligations under this Guaranty. If Guarantor shall make any payment to Guaranteed Party pursuant to this Guaranty, it shall (to the extent of the payment(s) so made) be subrogated to Guaranteed Party’s rights against PSXP;

provided, however, that Guarantor agrees that it shall take no action to exercise such rights until the payment in full to Guaranteed Party of all Guaranteed Obligations of PSXP under the Note.

7. Amendment of Guaranty . No term or provision of this Guaranty shall be amended, modified, waived, or supplemented except in writing signed by Guarantor and Guaranteed Party.

8. Waivers . Guarantor hereby waives (a) notice of acceptance of this Guaranty; (b) presentment and demand concerning the liabilities of Guarantor; (c) any right to require that any action or proceeding be brought against PSXP or any other person, or to require that Guaranteed Party seek enforcement of any performance against PSXP or any other person, prior to any action against Guarantor under the terms hereof; (d) notice of any modifications, renewals, replacements, or extensions of the Note; (e) notice of any extension of time for the payment of sums due and payable to Guaranteed Party; (f) with respect to any notes or evidences of indebtedness received by Guaranteed Party from PSXP, notice of presentment, demand for payment or notice of protest; and (g) notice of any dishonor or default by, or disputes with, PSXP. Except as to applicable statutes of limitation, no delay of Guaranteed Party in the exercise of, or failure to exercise, any rights hereunder shall operate as a waiver of such rights or a release of Guarantor from any obligations hereunder. Guarantor consents to the renewal, compromise, extension, acceleration or other changes in the time of payment or other terms of the Guaranteed Obligations, any acceptance or release of collateral, or any changes or modifications to the terms of the Note, without in any way releasing or discharging Guarantor from its obligations hereunder.

9. Notice . Any notice, request, instruction, correspondence or other document to be given hereunder (herein collectively called “ Notice ”) shall be in writing and delivered personally or mailed by certified mail, postage prepaid and return receipt requested, or by facsimile, to Guarantor or to Guaranteed Party at their respective addresses set forth below. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by facsimile shall be effective upon actual receipt if received during the recipient’s normal business hours, or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours. Guarantor and Guaranteed Party may change any address to which Notice is to be given to such party by giving Notice thereof as provided above.



If to Guaranteed Party: Phillips 66 Gas Shareholder, Inc. Attn: Vice President and Treasurer Houston Operations Center (HOC) 1075 W. Sam Houston Parkway N., Ste 200 Houston, TX 77043 Facsimile: 832-765-0210	If to Guarantor: Phillips 66 Company Attn: Vice President and Treasurer Houston Operations Center (HOC) 1075 W. Sam Houston Parkway N., Ste 200 Houston, TX 77043 Facsimile: 832-765-0210

10. Assignability . This Guaranty (a) may be assigned by Guaranteed Party without Guarantor’s consent and (b) may not be assigned by Guarantor without the prior written consent of Guaranteed Party.

11. GOVERNING LAW . THIS GUARANTY SHALL BE IN ALL RESPECTS GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

12. FINAL AGREEMENT . THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.

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PHILLIPS 66 COMPANY
By:	/s/ Brian R. Wenzel
Name:	Brian R. Wenzel
Title:	Vice President and Treasurer