Exhibit 2.1

Execution Version

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

by and among

PHILLIPS 66 COMPANY

PHILLIPS 66 PROJECT DEVELOPMENT INC.

PHILLIPS 66 PARTNERS GP LLC

and

PHILLIPS 66 PARTNERS LP

dated as of

September 19, 2017

TABLE OF CONTENTS

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EXHIBITS AND SCHEDULES

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CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

This Contribution, Conveyance and Assumption Agreement (this “Agreement”) is made and entered into as of September 19, 2017 by and among Phillips 66 Company, a Delaware corporation (“P66 Company”), Phillips 66 Project Development Inc., a Delaware corporation (“PDI” and, together with P66 Company, the “P66 Parties”), Phillips 66 Partners GP LLC, a Delaware limited liability company (the “General Partner”), and Phillips 66 Partners LP, a Delaware limited partnership (the “Partnership”). P66 Company, PDI, the General Partner and the Partnership are sometimes referred to in this Agreement individually as a “Party” and collectively as the “Parties.”

RECITALS:

WHEREAS, P66 Company owns 100% of the common stock of PDI, and PDI owns 100% of the limited liability company interests in each of (a) Phillips 66 DE Holdings 20A LLC, a Delaware limited liability company (“DE A LLC”), (b) Phillips 66 DE Holdings 20B LLC, a Delaware limited liability company (“DE B LLC”), (c) Phillips 66 DE Holdings 20C LLC, a Delaware limited liability company (“DE C LLC”), (d) Phillips 66 DE Holdings 20D LLC, a Delaware limited liability company (“DE D LLC”), and (e) Phillips 66 DE Primary LLC, a Delaware limited liability company (“DE P LLC”), each of which owns an undivided 20% limited liability company interest in Phillips 66 DAPL Holdings LLC, a Delaware limited liability company (“DAPL Holdings”), and an undivided 20% limited liability company interest in Phillips 66 ETCO Holdings LLC, a Delaware limited liability company (“ETCO Holdings”);

WHEREAS, P66 Company owns, directly or indirectly, all of the limited partner interests in Merey Sweeny, L.P., a Delaware limited partnership (“MSLP”), and all of the limited liability company interests in Sweeny Coker, L.L.C., a Delaware limited liability company and the sole general partner of MSLP (“Sweeny Coker LLC”);

WHEREAS, MSLP has conveyed the Excluded Assets (as defined below) to P66 Company and, on the Closing Date, P66 Company shall contribute, assign, transfer and convey, or cause to be contributed, assigned, transferred and conveyed, all of the limited liability company interests in Sweeny Coker LLC and all of its limited partner interests in MSLP to PDI as a capital contribution, and definitive conveyance documents will be entered into for the conveyances described in this recital, forms of which have been made available to the Partnership (the “Prior Conveyances”);

WHEREAS, PDI intends to contribute its ownership interests in each of DE A LLC, DE B LLC, DE C LLC, DE D LLC, DE P LLC, MSLP, and Sweeny Coker LLC to the Partnership in exchange for the consideration, and on the other terms and conditions, set forth in this Agreement; and

WHEREAS, on the Closing Date (as defined below), each of the events and transactions set forth in Section 2.1 below shall occur.

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

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ARTICLE I
DEFINITIONS

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

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with, such specified Person through one or more intermediaries or otherwise; provided, however, that (a) with respect to P66 Company, the term “Affiliate” shall not include any Group Member, (b) with respect to the Partnership Group, the term “Affiliate” shall not include Phillips 66, P66 Company, PDI or any of their respective Subsidiaries (other than a Group Member), and (c) the Contributed Entities shall be deemed to be Affiliates of P66 Company (and not of any Group Member) prior to the Effective Date and Affiliates of the Partnership Group (and not of P66 Company) on and after the Effective Date.

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Amended & Restated Lease” means that certain Third Amended and Restated Lease between Phillips 66 Company and MSLP, in substantially the form attached hereto as Exhibit D.

“Amended and Restated Operational Services Agreement” means that certain Amended and Restated Operational Services Agreement by and among Phillips 66 Pipeline LLC, Phillips 66 Carrier LLC, and Phillips 66 Partners Holdings LLC, in substantially the form attached hereto as Exhibit A.

“Amended and Restated Shared Services Agreement” means that certain Amended and Restated Shared Services Agreement by and between P66 Company and MSLP, in substantially the form attached hereto as Exhibit F.

“Amended & Restated Tolling Services Agreement” means that certain Amended and Restated Tolling Services Agreement by and between MSLP and P66 Company, substantially in the form attached hereto as Exhibit G.

“Assets” means the DAPL Assets, the ETCO Assets and the MSLP Assets, collectively.

“Assignment and Assumption Agreement” means that certain Assignment and Assumption Agreement, dated as of August 1, 2017, by and among P66 Company and MSLP.

“Assignment of Interests” means that certain Assignment of Interests in substantially the form attached as Exhibit B hereto.

“Assignment of Term Note” means that certain Assignment and Assumption Agreement in substantially the form attached as Exhibit C hereto.

“Assumed Liabilities” has the meaning set forth in Section 2.4.

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“Businesses” means, collectively, the operations and business (a) as historically conducted by the P66 Parties and their Affiliates using the Assets and (b) as contemplated to be conducted, consistent with prudent industry practice, following the Effective Date by the Partnership Group using the Assets.

“Cap” has the meaning set forth in Section 8.8(a).

“Carrier” means Phillips 66 Carrier LLC, a Delaware limited liability company.

“Cash Consideration” has the meaning set forth in Section 2.2.

“Closing” has the meaning set forth in Section 7.1.

“Closing Date” has the meaning set forth in Section 7.1.

“Code” has the meaning set forth in Section 3.14(f).

“Commission” means the United States Securities and Exchange Commission.

“Common Units” has the meaning set forth in the Partnership Agreement.

“Conflicts Committee” has the meaning set forth in Section 3.6.

“Consent” has the meaning set forth in Section 3.4.

“Contract” means any contract, commitment, instrument, undertaking, lease, note, mortgage, indenture, settlement, Permit or other legally binding agreement.

“Contributed Entities” means DE A LLC, DE B LLC, DE C LLC, DE D LLC, DE P LLC, DAPL Holdings, ETCO Holdings, MSLP and Sweeny Coker LLC, collectively.

“Contributed Entity” means any of the Contributed Entities, individually.

“Contributed Interests” has the meaning set forth in Section 2.1(c).

“Control” means, where used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” have correlative meanings.

“Dakota Access” means Dakota Access, LLC, a Delaware limited liability company and the owner of the DAPL Assets.

“Damages” has the meaning set forth in Section 8.1.

“DAPL Assets” means, collectively, the Dakota Access Pipeline, a 1,172-mile crude oil pipeline system originating in the Bakken / Three Forks production area of North Dakota and extending to markets in the Midwest, and all other assets owned, held, used or held for use by

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Dakota Access or any of its Affiliates in connection with the operation of the Dakota Access Pipeline.

“DAPL Holdings” has the meaning set forth in the recitals to this Agreement.

“DE A LLC” has the meaning set forth in the recitals to this Agreement.

“DE B LLC” has the meaning set forth in the recitals to this Agreement.

“DE C LLC” has the meaning set forth in the recitals to this Agreement.

“DE D LLC” has the meaning set forth in the recitals to this Agreement.

“DE P LLC” has the meaning set forth in the recitals to this Agreement.

“Deductible” has the meaning set forth in Section 8.8(a).

“DSR Guaranty” means that certain guaranty dated and effective as of July 24, 2017, executed by Phillips 66 as an indirect owner of DAPL and ETCO, to provide for its pro rata share of six months’ interest coverage under the Credit Agreement dated as of August 2, 2016 among Dakota Access and Energy Transfer Crude Oil Company, as borrowers, the lenders named therein, and the other parties thereto.

“Energy Transfer Crude Oil Company” means Energy Transfer Crude Oil Company LLC, a Delaware limited liability company and the owner of the ETCO Assets.

“ETCO Assets” means, collectively, the Energy Transfer Crude Oil Pipeline, a crude oil pipeline system originating in Illinois and extending to markets in the U.S. Gulf Coast, and all other assets owned, held, used or held for use by Energy Transfer Crude Oil Company or any of its Affiliates in connection with the operation of the Energy Transfer Crude Oil Pipeline.

“Effective Date” means October 1, 2017.

“Effective Time” means 12:01 a.m. local time in Houston, Texas on the Closing Date, or such other time and date mutually agreed to by the Parties in writing.

“Environmental Laws” means any and all applicable federal, state and local laws and regulations and other legally enforceable requirements and rules of common law relating to the prevention of pollution or protection of human health or the environment or imposing liability or standards of conduct concerning any Hazardous Materials.

“ETCO Holdings” has the meaning set forth in the recitals to this Agreement.

“Excluded Assets” means any of the assets set forth on Schedule 1.1(a) hereto.

“Excluded Liabilities” has the meaning set forth in Section 2.5.

“Financial Advisor” has the meaning set forth in Section 3.6.

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“Financial and Operational Information” has the meaning set forth in Section 3.6.

“Financial Statements” has the meaning set forth in Section 3.15.

“Financing” has the meaning set forth in Section 5.10.

“Fundamental Representations” has the meaning set forth in Section 8.9.

“Funding Cap” means an amount equal to (i) $22,000,000 less (ii) 25% of any indebtedness or operating cash flow of DAPL Holdings or ETCO Holdings or their respective Subsidiaries (and also Dakota Access and Energy Transfer Crude Oil Company) used to fund the Specified Projects following the Closing Date.

“General Partner” has the meaning set forth in the preamble to this Agreement.

“General Partner Units” has the meaning set forth in the Partnership Agreement.

“Governmental Approval” has the meaning set forth in Section 3.4.

“Governmental Authority” means (a) the United States of America or any state or political subdivision thereof within the United States of America and (b) any court or any governmental or administrative department, commission, board, bureau or agency of the United States of America or of any state or political subdivision thereof within the United States of America.

“GP Contribution” has the meaning set forth in Section 2.1(a).

“Group Member” means a member of the Partnership Group.

“Hazardous Material” means (a) any “hazardous substance” as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, (b) any “hazardous waste” as defined in the Resource Conservation and Recovery Act, as amended, (c) any petroleum or petroleum product, (d) any polychlorinated biphenyl and (e) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under or within the meaning of any applicable Environmental Law.

“Holdings” has the meaning set forth in Section 2.1(d).

“Indemnity Claim” has the meaning set forth in Section 8.3.

“JV Assets” means the DAPL Assets and the ETCO Assets, collectively.

“JV Businesses” means, with respect to the JV Assets, collectively, the operations and business (a) as historically conducted by the Operator and its Affiliates using the DAPL Assets and/or the ETCO Assets, and (b) as contemplated to be conducted, consistent with prudent industry practice, following the Effective Date by the Operator and its Affiliates using the DAPL Assets and/or ETCO Assets.

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“JV Entities” means Dakota Access and Energy Transfer Crude Oil Company, collectively.

“JV Interests” has the meaning set forth in Section 3.8(d).

“Lease” means that certain Second Amended and Restated Lease between P66 Company and MSLP, dated August 1, 2017, relating to the lease of real property at the location of the MSLP Assets.

“Liability” or “Liabilities” means any direct or indirect liability, indebtedness, obligation, cost, expense, claim, loss, damage, deficiency, guaranty or endorsement of or by any Person, absolute or contingent, matured or unmatured, asserted or unasserted, accrued or unaccrued, due or to become due, liquidated or unliquidated.

“Lien” means any security interest, lien, deed of trust, mortgage, pledge, charge, claim, restriction, easement, encumbrance or other similar interest or right.

“Litigation” means any claims, fines, actions, suits, demands, investigations or proceedings or any arbitration or binding dispute resolution proceedings.

“LP Contribution” has the meaning set forth in Section 2.1(c).

“Material Adverse Effect” means any change, circumstance, effect or condition that (a) is, or could reasonably be expected to be, materially adverse to the business, financial condition, assets, liabilities or results of operations of the Businesses, the Assets or the Contributed Entities, taken as a whole, or (b) materially adversely affects, or could reasonably be expected to materially adversely affect, P66 Company’s ability to satisfy its obligations under the Transaction Documents or the Prior Conveyances.

“Material Contract” means (a) any Transportation Agreement that, as of the date hereof, is reasonably expected to result in revenues to any JV Entity in an amount greater than $15,000,000 during any calendar year, (b) any Contract relating to the ownership or operation of the Businesses or the ownership, use or operation of the Assets that, as of the date hereof, is reasonably expected to provide for revenues to or commitments of P66 Company or its Affiliates in an amount greater than $5,000,000 or any JV Entity in an amount greater than $15,000,000 during any calendar year and (c) any other Contract (other than any Contract granting any Permits, servitudes, easements or rights-of-way) materially affecting the ownership or operation of the Businesses or the ownership, use or operation of the Assets, the loss of which could, individually or in the aggregate, have a Material Adverse Effect.

“MSLP” has the meaning set forth in the recitals to this Agreement.

“MSLP Assets” means, collectively, (a) the petroleum coke producing facility comprised of a vacuum distillation unit, delayed coker unit, flare, cooling tower, instrument air skid, and certain underground facilities and tanks at the solid waste disposal facilities, each located within the Sweeny Refinery Complex located in Old Ocean, Texas, and (b) all other assets, other than the Excluded Assets, owned, held, used or held for use by MSLP or any of its Affiliates in connection with the operation of the assets referred to in clause (a) located at or near the Sweeny

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Refinery Complex. MSLP Assets include any intercompany receivable balance as of the Effective Time established with respect to any Prefunded Projects as described in Section 5.3.

“MSLP Environmental Facilities Revenue Bonds” means, collectively, the:  (i) $25,000,000 Brazos River Harbor Navigation District of Brazoria County, Texas Environmental Facilities Revenue Bonds (Merey Sweeny, L.P. Project) Series 1998, (ii) $12,500,000 Brazos River Harbor Navigation District of Brazoria County, Texas Environmental Facilities Revenue Bonds (Merey Sweeny, L.P. Project) Series 2000A, (iii) $12,500,000 Brazos River Harbor Navigation District of Brazoria County, Texas Environmental Facilities Revenue Bonds (Merey Sweeny, L.P. Project) Series 2000B, (iv) $12,500,000 Brazos River Harbor Navigation District of Brazoria County, Texas Environmental Facilities Revenue Bonds (Merey Sweeny, L.P. Project) Series 2001A, (v) $12,500,000 Brazos River Harbor Navigation District of Brazoria County, Texas Environmental Facilities Revenue Bonds (Merey Sweeny, L.P. Project) Series 2001B, (vi) $12,500,000 Brazos River Harbor Navigation District of Brazoria County, Texas Environmental Facilities Revenue Bonds (Merey Sweeny, L.P. Project) Series 2002A, and (vii) $12,500,000 Brazos River Harbor Navigation District of Brazoria County, Texas Environmental Facilities Revenue Bonds (Merey Sweeny, L.P. Project) Series 2002B.

“New Common Units” has the meaning set forth in Section 2.2.

“New GP Units” means a number of General Partner Units having an aggregate value equal to the amount required to maintain the General Partner’s 2% interest in the Partnership as of the Closing.

“NYSE” has the meaning set forth in Section 5.7.

“Omnibus Agreement” means that certain Omnibus Agreement, dated effective July 26, 2013, to be amended pursuant to the Omnibus Agreement Amendment, by and among P66 Company, Pipeline, the Partnership, the General Partner, Holdings and Carrier.

“Omnibus Agreement Amendment” means that certain Seventh Amendment to the Omnibus Agreement in substantially the form attached as Exhibit E hereto.

“Operator” means DAPL-ETCO Operations Management, LLC, a Delaware limited liability company.

“P66 Company” has the meaning set forth in the preamble to this Agreement.

“P66 Company Closing Certificate” has the meaning set forth in Section 6.2(c).

“P66 Indemnitees” has the meaning set forth in Section 8.1.

“P66 Parties” has the meaning set forth in the preamble to this Agreement.

“P66 Parties’ knowledge,” “knowledge of the P66 Parties” and similar phrases means the knowledge of the P66 Parties after reasonable inquiry with respect to the particular matter in question.

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“Partnership” has the meaning set forth in the preamble to this Agreement.

“Partnership Agreement” means that certain First Amended and Restated Agreement of Limited Partnership of Phillips 66 Partners LP, dated as of July 26, 2013, as amended by Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of Phillips 66 Partners LP, dated as of March 1, 2016, as may be further amended in connection with Closing.

“Partnership Closing Certificate” has the meaning set forth in Section 6.3(c).

“Partnership Group” means, collectively, the Partnership and its Subsidiaries, including, after the Closing, the Contributed Entities.

“Partnership Indemnitees” has the meaning set forth in Section 8.2.

“Partnership Material Adverse Effect” means any change, circumstance, effect or condition that is, or could reasonably be expected to be, materially adverse to the business, financial condition, assets, liabilities or results of operations of the Partnership Group, taken as a whole.

“Party” or “Parties” has the meaning set forth in the preamble to this Agreement.

“PDI” has the meaning set forth in the preamble to this Agreement.

“Permits” means permits, licenses, tariffs, certificates, orders, approvals, authorizations, grants, consents, concessions, warrants, franchises and similar rights and privileges.

“Permitted Liens” has the meaning set forth in Section 3.9(b).

“Person” means an individual or a corporation, firm, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.

“Pipeline” means Phillips 66 Pipeline LLC, a Delaware limited liability company.

“Post-Closing Settlement Obligation” means an amount equal to the (a) aggregate revenues (including revenues generated from third parties) less (b) general and administrative expenses, operating and maintenance expense, taxes and interest, in each case, of the P66 Parties and their respective Subsidiaries attributable solely to the MSLP Assets with respect to the period beginning on October 1, 2017 and ending at the Effective Time, with all of such revenues and expenses being determined in a manner consistent with the Financial and Operational Information.

“Prefunded Projects” has the meaning set forth in Section 5.3.

“Prior Conveyances” has the meaning set forth in the recitals to this Agreement.

“Securities Act” has the meaning set forth in Section 3.13.

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“Specified Matter” has the meaning set forth in Section 8.14.

“Specified Projects” has the meaning set forth in Section 2.5.

“Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the general or limited partner interests of such partnership is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof; or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

“Sweeny Coker LLC” has the meaning set forth in the recitals to this Agreement.

“Sweeny Refinery Complex” means the petroleum refinery and related assets owned and operated by Phillips 66 Company and its Affiliates and located at Old Ocean, Texas.

“Tax” or “Taxes” means any federal, state, local or foreign income tax, ad valorem tax, excise tax, sales tax, use tax, franchise tax, real or personal property tax, transfer tax, gross receipts tax or other tax, assessment, duty, fee, levy or other governmental charge, together with and including any and all interest, fines, penalties, assessments, and additions to Tax resulting from, relating to, or incurred in connection with any of those or any contest or dispute thereof.

“Tax Authority” means any Governmental Authority having jurisdiction over the payment or reporting of any Tax.

“Tax Proceeding” has the meaning set forth in Section 5.8(b).

“Tax Return” means any report, statement, form, return or other document or information required to be supplied to a Tax Authority in connection with Taxes.

“Tolling Services Agreement” means that certain Tolling Services Agreement by and between MSLP and P66 Company, effective as of August 1, 2017.

“Transaction Debt” has the meaning set forth in Section 5.8(c).

“Transaction Documents” means, collectively, this Agreement, the Omnibus Agreement Amendment, the Amended and Restated Operational Services Agreement, the Amended and Restated Tolling Services Agreement, the Amended and Restated Lease, the Amended and Restated Shared Services Agreement, and the Assignment of Term Note.

“Transaction Taxes” has the meaning set forth in Section 2.6.

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“Transportation Agreements” means those certain Contracts between a JV Entity or the Operator, on the one hand, and the shippers party thereto, on the other hand, providing for take-or-pay or other volume commitments of specified volumes of crude or other products, as the case may be, to be shipped through the Energy Transfer Crude Oil Pipeline system or the Dakota Access Pipeline system, as the case may be, in consideration of the tariffs and fees set forth therein.

“Treasury Regulations” has the meaning set forth in Section 5.8(c).

ARTICLE II
CONTRIBUTIONS, CONVEYANCES, ACKNOWLEDGMENTS AND DISTRIBUTIONS

2.1                               Contributions.  On the Closing Date, on the terms and subject to the conditions of this Agreement, each of the following shall occur:

(a)                                 PDI shall contribute, assign, transfer and convey  to the General Partner, as a capital contribution, the limited liability company interests or limited partner interests, as applicable, in DE A LLC, DE B LLC, DE C LLC, DE D LLC, DE P LLC, MSLP and Sweeny Coker LLC with an aggregate value equal to an amount such that, immediately following the consummation of the transactions contemplated by this Agreement, the General Partner will maintain its 2% general partner interest in the Partnership (the “GP Contribution”), and the General Partner shall accept the contribution of the GP Contribution;

(b)                                 the General Partner shall contribute, assign, transfer and convey the GP Contribution to the Partnership in exchange for the consideration set forth in Section 2.2, and the Partnership shall accept the contribution of the GP Contribution;

(c)                                  PDI shall contribute, assign, transfer and convey to the Partnership its remaining limited liability company interest or limited partner interest, as applicable, in DE A LLC, DE B LLC, DE C LLC, DE D LLC, DE P LLC, MSLP and Sweeny Coker LLC (collectively, the “LP Contribution” and, together with the GP Contribution, the “Contributed Interests”), in exchange for the consideration set forth in Section 2.2, and the Partnership shall accept the contribution of the LP Contribution; and

(d)                                 The Partnership shall contribute, assign, transfer and convey the Contributed Interests to Phillips 66 Partners Holdings LLC, a Delaware limited liability company and wholly owned Subsidiary of the Partnership (“Holdings”), and Holdings shall accept the contribution of the Contributed Interests.

2.2                               Consideration.  At the Closing, in consideration for the contribution of the Contributed Interests, the Partnership shall: (a) deliver to PDI an amount in cash equal to $372,178,118  (“Cash Consideration”); (b) deliver to PDI the Assignment of Term Note, pursuant to which the Partnership shall assume approximately $450,000,000 of debt under which PDI will as of the Closing be the primary obligor; (c) assume the Assumed Liabilities (including the debt obligations set forth on Schedule 2.4 attached hereto); (d) issue to PDI a number of Common Units equal to 5,005,778 less the number of New GP Units (the “New Common Units”); and (e) issue to the General Partner the New GP Units.

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2.3                               Effective Time of Conveyances.  Notwithstanding anything to the contrary contained herein, to the extent the Closing occurs in accordance with the terms and conditions of this Agreement, the Parties acknowledge and agree that the Partnership shall be entitled to all of the rights of ownership of the Contributed Interests and shall be liable for and shall bear all of the Assumed Liabilities, in each case, from and after the Effective Time.

2.4                               Assumed Liabilities.  Except for Excluded Liabilities as provided in Section 2.5, at the Effective Time, the Partnership Group agrees to assume, and to pay, discharge and perform as and when due, all Liabilities that (a) first accrue, are caused by, arise out of, are associated with, are in respect of, or are incurred, in each case, at any time from and after the Effective Time, in connection with the ownership or operation of the Contributed Interests or the Contributed Entities or other activities occurring in connection with and attributable to the ownership or operation of the Contributed Interests or the Contributed Entities from and after the Effective Time or (b) are set forth on Schedule 2.4 (collectively, the “Assumed Liabilities”).

2.5                               Excluded Liabilities.  The Parties agree that, subject to the provisions of this Section 2.5, any Liabilities arising out of or attributable to the ownership or operation of the Contributed Interests or the Contributed Entities or other activities occurring in connection with and attributable to the ownership or operation of the Businesses  prior to the Effective Time other than those expressly identified as Assumed Liabilities in Section 2.4 are not part of the Assumed Liabilities, and neither the Partnership Group nor any member thereof has assumed, and shall not assume or become obligated with respect to, any Liability first incurred, accrued or arising out of or attributable to the ownership or operation of the Contributed Interests or the Contributed Entities or other activities occurring in connection with and attributable to the ownership or operation of the Contributed Interests or the Contributed Entities prior to the Effective Time, including any Liabilities of the P66 Parties or their Affiliates existing immediately prior to the Effective Time (other than Liabilities that are expressly identified as Assumed Liabilities in Section 2.4), whether or not described specifically in this Section 2.5 (collectively, the “Excluded Liabilities”), all of which shall remain the sole responsibility of, and be discharged and performed as and when due by, the P66 Parties or their Affiliates from and after the Effective Time.  The term “Excluded Liabilities” shall also include any and all Liabilities arising out of or attributable to the Prior Conveyances. The term “Excluded Liabilities” shall also include any and all capital calls issued to DAPL Holdings or ETCO Holdings by Dakota Access and Energy Transfer Crude Oil Company, respectively, that are required to be funded with respect to the capital projects described on Schedule 2.5 (the “Specified Projects”) to the extent such capital calls exceed, in the aggregate, the Funding Cap.

2.6                               Transaction Taxes.  All sales, use, transfer, real property transfer, filing, recordation, registration, business and occupation and similar Taxes arising from or associated with the transactions contemplated by this Agreement, other than Taxes based on income (“Transaction Taxes”), shall be borne fifty percent (50%) by PDI and fifty percent (50%) by the Partnership; provided, however, that in accordance with Section8.2(e), any Transaction Taxes imposed on the Prior Conveyances shall be borne one hundred percent (100%) by PDI. To the extent under applicable law the transferee is responsible for filing Tax Returns in respect of Transaction Taxes, the Partnership shall prepare and file all such Tax Returns. The Parties shall provide such certificates and other information and otherwise cooperate to the extent reasonably required to minimize Transaction Taxes.  The Party that is not responsible under applicable law

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for paying the Transaction Taxes shall pay its share of the Transaction Taxes to the responsible Party prior to the due date of such Taxes.

2.7                               Proration of 2017 Ad Valorem Taxes.  Ad valorem taxes relating to the MSLP  Assets for the year ending December 31, 2017 shall be prorated on a daily basis between the P66 Parties, on the one hand, and the Partnership, on the other hand, with the P66 Parties responsible for the prorated portion of such taxes for such period up to and including the Closing Date and the Partnership responsible for the prorated portion of such taxes after the Closing Date. The P66 Parties will be responsible for timely remitting all such ad valorem taxes imposed on or with respect to the MSLP Assets due prior to the Closing Date and the Partnership will be responsible for timely remitting all ad valorem taxes due on or after the Closing Date, to the relevant Tax Authority, and each of the P66 Parties and Partnership shall reimburse the other for its or their portion of such ad valorem taxes paid, in accordance with this Section 2.7.

2.8                               Distributions.  To the extent that the Partnership receives a distribution from the JV Entities related to activities prior to the Effective Date, any such distribution shall be prorated on a daily basis between PDI and the Partnership, with the Partnership retaining the prorated portion of any such distribution for the period beginning on October 1, 2017. The prorated portion of any such distribution for the period up to, but not including, the Effective Date shall be promptly paid by the Partnership to PDI, with the Partnership acting as PDI’s agent in respect to the collection and remittance of any such distribution to PDI.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE P66 PARTIES

The P66 Parties, jointly and severally, hereby represent and warrant to the Partnership that, as of the date hereof and as of Closing:

3.1                               Organization and Existence.

(a)                                 P66 Company has been duly organized and is validly existing and is in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease and operate the properties and assets it now owns, leases and operates and to carry on its business as and where such properties and assets are now owned or held and such business is now conducted.  P66 Company is duly qualified to transact business and is in good standing as a foreign entity in each other jurisdiction in which such qualification is required for the conduct of its business, except where the failure to so qualify or to be in good standing would not have a Material Adverse Effect.

(b)                                 PDI has been duly organized and is validly existing and in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease and operate the properties and assets it now owns, leases and operates and to carry on its business as and where such properties and assets are now owned or held and such business is now conducted. PDI is duly qualified to transact business and is in good standing as a foreign entity in each other jurisdiction in which such qualification is required for the conduct of its business, except where the failure to so qualify or to be in good standing would not have a Material Adverse Effect.

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(c)                                  Each of the Contributed Entities has been duly organized and is validly existing and in good standing under the laws of the jurisdiction of its formation, with full limited liability company power or limited partnership power, as applicable, and authority to own, lease, use and operate the properties and assets it now owns, leases, uses and operates and to carry on its business as and where such properties and assets are now owned or held and such business is now conducted.  Each Contributed Entity is duly qualified to transact business and is in good standing as a foreign entity in each other jurisdiction in which such qualification is required for the conduct of its business, except where the failure to so qualify or to be in good standing would not have a Material Adverse Effect.  The P66 Parties have delivered to the Partnership correct and complete copies of each Contributed Entity’s organizational documents, as amended to date.  There is no pending or, to the knowledge of P66 Company, threatened action for the dissolution, liquidation or insolvency of any Contributed Entity.

(d)                                 To the knowledge of the P66 Parties, (i) each of the JV Entities is a limited liability company organized and in good standing under the laws of the State of Delaware and (ii) is qualified to transact business and is in good standing as a foreign entity in each other jurisdiction in which such qualification is required for the conduct of its business, except where the failure to so qualify or to be in good standing would not have a Material Adverse Effect. The P66 Parties have delivered to the Partnership correct and complete copies of each JV Entity’s respective organizational documents, as amended to date.

(e)                                  Each of DE A LLC, DE B LLC, DE C LLC, DE D LLC and DE P LLC was formed for the sole purpose of owning the interests in DAPL Holdings or ETCO Holdings owned by it. Each of DAPL Holdings and ETCO Holdings was formed for the sole purpose of owning the interests in Dakota Access or Energy Transfer Crude Oil Company, as applicable, owned by it. As of the Closing, none of the Contributed Entities other than MSLP and Sweeny Coker LLC (x) has conducted any business or owned any assets since its respective date of formation other than (i) its direct ownership interest in the Contributed Entities in which it holds an ownership interest, (ii) the direct ownership interests of DAPL Holdings and ETCO Holdings in the JV Entities (and the pledge of such ownership interests), and (iii) its indirect ownership interest in the DAPL Assets and the ETCO Assets or (y) will have any material Liabilities other than the Assumed Liabilities, Liabilities that will be released or otherwise settled in full at the Closing and Liabilities arising out of the organizational documents of the JV Entities.

(f)                                   Sweeny Coker LLC was formed for the sole purpose of serving as the general partner of MSLP, and MSLP was formed for the sole purpose of owning the MSLP Assets and the Excluded Assets. As of the Closing, neither of Sweeny Coker LLC or MSLP (x) has conducted any business or owned any assets since its respective date of formation other than (i) with respect to Sweeny Coker LLC, its general partner interest in MSLP and its indirect ownership interest in the MSLP Assets and the Excluded Assets and (ii) with respect to MSLP, its ownership interest in the MSLP Assets and the Excluded Assets or (y) will have any material Liabilities other than the Assumed Liabilities or Liabilities that will be released or otherwise settled in full at the Closing.

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3.2                               Authority and Approval; Enforceability.

(a)                                 P66 Company has the corporate power and authority to execute and deliver this Agreement and any Transaction Document to which it is or will be a party, to consummate the transactions contemplated hereby and thereby and to perform all the terms and conditions hereof and thereof to be performed by it. The execution and delivery by P66 Company of this Agreement and any Transaction Document to which it is or will be a party, the performance by it of all the terms and conditions hereof and thereof to be performed by it and the consummation of the transactions contemplated hereby and thereby have been duly authorized and approved by all requisite corporate action of P66 Company.  Each of this Agreement and any Transaction Document to which P66 Company is or will be a party constitutes or will constitute, upon execution and delivery by P66 Company, the valid and binding obligation of P66 Company, enforceable against P66 Company in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement of creditors’ rights generally and by general principles of equity (whether applied in a proceeding at law or in equity).

(b)                                 PDI has the corporate power and authority to execute and deliver this Agreement and any Transaction Document to which it is or will be a party, to consummate the transactions contemplated hereby and thereby and to perform all the terms and conditions hereof and thereof to be performed by it. The execution and delivery by PDI of this Agreement and any Transaction Document to which it is or will be a party, the performance by it of all the terms and conditions hereof and thereof to be performed by it and the consummation of the transactions contemplated hereby and thereby have been duly authorized and approved by all requisite corporate action of PDI. Each of this Agreement and any Transaction Document to which PDI is or will be a party constitutes or will constitute, upon execution and delivery by PDI, the valid and binding obligation of PDI, enforceable against PDI in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement of creditors’ rights generally, and by general principles of equity (whether applied in a proceeding at law or in equity).

3.3                               No Conflict.  This Agreement and the Transaction Documents to which P66 Company and PDI are or will be a party, the execution and delivery hereof and thereof by the P66 Parties, and the Prior Conveyances do not, and the fulfillment and compliance with the terms and conditions hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not:

(a)                                 conflict with any of the provisions of the certificate of incorporation or bylaws of either of the P66 Parties or with any of the provisions of the organizational documents of any of the Contributed Entities or the JV Entities;

(b)                                 conflict with any provision of any law or administrative regulation or any judicial, administrative or arbitration order, award, judgment, writ, injunction or decree applicable to either of the P66 Parties or any Contributed Entity or, to the knowledge of the P66 Parties, any JV Entity;

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(c)                                  conflict with, result in a breach of, constitute a default under (whether with notice or the lapse of time or both) or accelerate or permit the acceleration of the performance required by, or require any consent, authorization or approval under, any material indenture, mortgage, lien or material agreement, contract, commitment or instrument to which either of the P66 Parties, any Contributed Entity or, to the knowledge of the P66 Parties, any JV Entity is a party or by which any of them is bound or to which any of the Contributed Interests are subject;

(d)                                 result in the creation of, or afford any person the right to obtain, any material Lien on the capital stock or other equity interests, property or assets of either of the P66 Parties or any Contributed Entity or, to the knowledge of the P66 Parties, any JV Entity under any such material indenture, mortgage, lien, agreement, contract, commitment or instrument; or

(e)                                  result in the revocation, cancellation, suspension or material modification, singly or in the aggregate, of any Governmental Approval  possessed by either of the P66 Parties, any Contributed Entity or, to the knowledge of the P66 Parties, any JV Entity that is necessary or desirable for the ownership, lease or operation of its or their respective properties and other assets in the conduct of its or their respective business as now conducted, including any Governmental Approvals under any applicable Environmental Law;

except, in the case of clauses (b), (c), (d) and (e), as would not have, individually or in the aggregate, a Material Adverse Effect or as will have been cured at or prior to the Closing.

3.4                               Consents.  Other than as set forth in Schedule 3.4 (each item so listed, a “Consent”) and except for notice to, or consent of, Governmental Authorities related to the transfer of environmental Permits, no consent, approval, license, permit, order, waiver, or authorization of, or registration, declaration, or filing with any Governmental Authority (each a “Governmental Approval”) or other person or entity is required to be obtained or made by or with respect to either of the P66 Parties, any Contributed Entity or, to the knowledge of the P66 Parties, any JV Entity in connection with:

(a)                                 the execution, delivery, and performance of this Agreement or the Transaction Documents, or the consummation of the transactions contemplated hereby and thereby;

(b)                                 the enforcement against either of the P66 Parties of its respective obligations hereunder and thereunder; or

(c)                                  following the Closing, (i) the Partnership Group’s ownership of the Contributed Entities or (ii) the conduct of the Businesses (or, with respect to the JV Assets, the JV Businesses);

except, in each case, as would not have, individually or in the aggregate, a Material Adverse Effect.

3.5                               Laws and Regulations; Litigation.  As of the date hereof, other than as set forth on Schedule 3.5 (or other than Litigation under any Environmental Law, which is the subject of Section 3.7), (a) there is no pending or, to the P66 Parties’ knowledge, threatened Litigation against any of the P66 Parties or the Contributed Entities, or against or affecting the Contributed

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Interests or the MSLP Assets or the ownership of the Contributed Interests or the ownership and operation of the MSLP Assets and (b) to the P66 Parties’ knowledge, there is no pending or threatened Litigation against the JV Entities or against or affecting the ownership and operation of the JV Assets, in the case of either clause  (a) or (b) that (i) would individually, or in the aggregate, have a Material Adverse Effect or (ii) seeks any material injunctive relief with respect to the Businesses or the Assets. Except as would not, individually or in the aggregate, have a Material Adverse Effect, (x) none of the Contributed Entities or, to the P66 Parties’ knowledge, the JV Entities is in violation of or in default under any law or regulation or under any order (other than Environmental Laws, which are the subject of Section 3.7) of any Governmental Authority applicable to it and (y) there is no Litigation (other than Litigation under any Environmental Law, which is the subject of Section 3.7) pending or, to the P66 Parties’ knowledge, threatened against or affecting the Contributed Entities or the P66 Parties’ respective ownership of the Contributed Interests or, to the P66 Parties’ knowledge, the JV Entities at law or in equity, by or before any Governmental Authority having jurisdiction over the P66 Parties or any of the Contributed Entities or the JV Entities.  Except as would not, individually or in the aggregate, have a Material Adverse Effect, no Litigation is pending or, to the P66 Parties’ knowledge, threatened to which either of the P66 Parties is or may become a party that questions or involves the validity or enforceability of any of its respective obligations under this Agreement or seeks to prevent or delay, or damages in connection with, the consummation of the transactions contemplated hereby.

3.6                               Management Projections and Budgets.  The projections and budgets (the “Financial and Operational Information”) provided to the Partnership (including those provided to Evercore Partners (“Financial Advisor”), the financial advisor to the conflicts committee of the Board of Directors of the General Partner (the “Conflicts Committee”)) by P66 Company as part of the Partnership’s review of the Businesses, the Contributed Interests and the Assets in connection with this Agreement have a reasonable basis, were prepared in good faith and are consistent with P66 Company’s management’s current expectations. The other financial and operational information provided by P66 Company to Financial Advisor as part of its review of the proposed transaction for the Conflicts Committee is complete and correct in all material respects for the periods covered and is derived from and is consistent with the books and records of P66 Company.

3.7                               Environmental Matters.  With respect to the Businesses (and, with respect to the JV Assets, the JV Businesses), except as set forth on Schedule 3.7 or as would not (individually or in the aggregate) have a Material Adverse Effect:

(a)                                 the P66 Parties and the Contributed Entities and, to the P66 Parties’ knowledge, the JV Entities are in compliance with Environmental Laws;

(b)                                 none of the P66 Parties, the Contributed Entities or the MSLP Assets, or, to the P66 Parties’ knowledge, the JV Entities, the DAPL Assets or ETCO Assets, is the subject of any outstanding administrative or judicial order of judgment, agreement or arbitration award from any Governmental Authority under any Environmental Law relating to the Assets and requiring remediation or the payment of a fine or penalty;

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(c)                                  each of the P66 Parties, the Contributed Entities and, to the P66 Parties’ knowledge, the JV Entities has received all Permits required to be received by it under applicable Environmental Laws and that are necessary to conduct the Businesses (and, with respect to the JV Assets, the JV Businesses) as presently conducted or in light of the current stage of development or construction, and each of the P66 Parties, the Contributed Entities and, to the P66 Parties’ knowledge, the JV Entities is in compliance with all terms and conditions of any such Permits;

(d)                                 to the P66 Parties’ knowledge, none of the P66 Parties, the Contributed Entities or the JV Entities is subject to any pending or threatened Litigation under any Environmental Law with respect to the ownership or operation of the Assets; and

(e)                                  none of the P66 Parties, the Contributed Entities or, to the knowledge of the P66 Parties, the JV Entities has any liability in connection with the release into the environment of any Hazardous Material.

3.8                               Contributed Interests.

(a)                                 The Contributed Interests (i) constitute 100% of the limited liability company interests and partnership interests, as applicable, in the Contributed Entities and (ii) were duly authorized and validly issued and are fully paid and non-assessable (except as such non-assessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act or Sections 17-303, 17-607 and 17-804 of the Delaware Revised Uniform Limited Partnership Act, as applicable). The Contributed Interests are not directly or indirectly subject to and were not issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of local or state law applicable to such interests, any Contributed Entity’s organizational documents (or the organizational documents of any JV Entity), or any contract, arrangement or agreement to which P66 Company or any of its Subsidiaries is a party or to which it or any of its properties or assets is otherwise bound.

(b)                                 P66 Company or its Affiliates have good and valid record and beneficial title to the Contributed Interests, free and clear of any and all Liens, and, except as provided or created by the limited liability company agreement or other organizational or governance documents of any Contributed Entity, the Securities Act or applicable securities laws, the Contributed Interests are free and clear of any restrictions on transfer, Taxes, or claims. There are no options, warrants, purchase rights, contracts, commitments or other securities exercisable or exchangeable for any equity interests of the Contributed Entities, any other commitments or agreements providing for the issuance of additional equity interests in the Contributed Entities, or for the repurchase or redemption of the Contributed Interests, or any agreements of any kind that may obligate any Contributed Entity to issue, purchase, register for sale, redeem or otherwise acquire any of its equity interests. Immediately after the Closing, the Partnership will have good and valid record and beneficial title to the Contributed Interests, free and clear of any Liens.

(c)                                  Except as set forth on Schedule 3.8, each of DAPL Holdings and ETCO Holdings has good and valid record and beneficial title to the JV Interests  owned by it, free and

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clear of any and all Liens, and, except as provided or created by the limited liability company agreement or other organizational or governance documents of any JV Entity, the Securities Act or applicable securities laws, the JV Interests are free and clear of any restrictions on transfer, Taxes, or claims. Except as set forth on Schedule 3.8, to the knowledge of the P66 Parties and except as set forth in the organizational or governance documents of any JV Entity furnished to the Partnership prior to the date hereof, there are no options, warrants, purchase rights, Contracts, commitments or other securities exercisable or exchangeable for any equity interests of any JV Entity, any other commitments or agreements providing for the issuance of additional equity interests in any JV Entity, or for the repurchase or redemption of the JV Interests, or any agreements of any kind which may obligate any JV Entity to issue, purchase, register for sale, redeem or otherwise acquire any of its equity interests.

(d)                                 DAPL Holdings owns a direct twenty-five percent (25%) limited liability company interest in Dakota Access and ETCO Holdings owns a direct twenty-five percent (25%) limited liability company interest in Energy Transfer Crude Oil Company (such interests, collectively, the “JV Interests”).  The JV Interests (i) were duly authorized and validly issued and are fully paid and non-assessable (except as such non-assessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act) and (ii) except as set forth in Schedule 3.8, are not subject to and were not issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of local or state law applicable to such limited liability company interest, the organizational documents of any JV Entity, or any contract, arrangement or agreement to which any of the P66 Parties, Contributed Entities or JV Entities is a party or to which it or any of their respective properties or assets is otherwise bound.

3.9                               Assets.

(a)                                 Other than as set forth on Schedule 3.7, the MSLP Assets and, to the P66 Parties’ knowledge, the JV Assets, when considered together with the Amended and Restated Lease and the services provided by P66 Company and its Affiliates pursuant to the Omnibus Agreement, the Amended and Restated Operational Services Agreement, the Amended and Restated Tolling Services Agreement and the Amended and Restated Shared Services Agreement (each as contemplated to be entered into or amended as of the Closing, as applicable) and, with respect to the JV Assets, the services provided by the Operator, are sufficient to conduct the Businesses and, with respect to the JV Assets, the JV Businesses, in a manner materially consistent with the Financial and Operational Information.

(b)                                 P66 Company or its Affiliates are, and, as of the Effective Time, the applicable Contributed Entities will be, the owners of such valid easement rights, leasehold and/or fee ownership interests (including rights of way) in and to the lands on which any of the MSLP Assets are located that, when considered together with the Lease (as modified by the Amended and Restated Lease) and the services provided by P66 Company and its Affiliates pursuant to the Omnibus Agreement, the Amended and Restated Operational Services Agreement, the Amended and Restated Tolling Services Agreement and the Amended and Restated Shared Services Agreement (each as contemplated to be entered into or amended as of the Closing, as applicable), are sufficient to enable the Partnership to use or operate the MSLP Assets in substantially the same manner that the MSLP Assets were used and operated

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historically by P66 Company and its Affiliates. P66 Company or its Affiliates have, and, as of the Effective Time, the applicable Contributed Entities will have, valid and marketable title in fee to all fee-owned real property and interests in real property constituting part of the MSLP Assets, and good and valid title to the leasehold and easement estates in all other real property and interests in real property (including rights of way) constituting part of the MSLP Assets, in each case except as would not have a Material Adverse Effect.  Neither P66 Company nor its Affiliates has knowledge of any default or breach (or event which, with the giving of notice or passage of time, or both, would become a default or breach) under any lease, right of way or similar instrument pursuant to which it holds any such non-fee real property interest, in each case except as would not have a Material Adverse Effect.  P66 Company or its Affiliates own, and, as of the Effective Time, the applicable Contributed Entities will own, all such real property and interests in real property free and clear of any Liens except (i)  mechanics’, carriers’, workmen’s, repairmen’s or other similar Liens arising or incurred in the ordinary course of business that are not yet delinquent or can be paid without penalty or are being contested in good faith and by appropriate proceedings in respect thereof and for which an appropriate reserve has been established in accordance with U.S. generally accepted accounting principles, (ii) Liens for current Taxes that are not yet due and payable or are being contested in good faith and by appropriate proceedings in respect thereof and for which an appropriate reserve has been established in accordance with U.S. generally accepted accounting principles, (iii) Liens securing debt of any of the Contributed Entities that will be released prior to or as of the Closing and (iv) other imperfections of title or encumbrances that, individually or in the aggregate, could not reasonably be expected to materially interfere with the ordinary conduct of the Businesses (the Liens described in clauses (i), (ii), and (iii) above, being referred to collectively as “Permitted Liens”). To the P66 Parties’ knowledge, except as would not have, individually or in the aggregate, a Material Adverse Effect, there are no material gaps in contiguity between and among the tracts or parcels of real property or interests in real property comprising the routes or corridors used by or for any pipeline or gathering systems constituting part of the Assets, including, without limitation, the JV Assets.

(c)                                  The P66 Parties or their Affiliates have, and, as of the Effective Time, the applicable Contributed Entities will have, good and marketable title to all tangible personal property included in the MSLP Assets, free and clear of all Liens except Permitted Liens, other than tangible personal property owned on the date of this Agreement but subsequently sold or otherwise disposed of in the ordinary course of business consistent with prior practice. All tangible personal property included in the MSLP Assets is, in the aggregate, in good operating condition and repair (normal wear and tear excepted) and has been maintained in accordance with applicable laws and regulations, as well as generally accepted industry practice, and is sufficient for the purposes for which it is currently being used or held for use.

3.10                        Permits.  The P66 Parties or their Affiliates hold or have a valid right to use, and, as of the Effective Time, the applicable Contributed Entities will hold or have a valid right to use, all Permits (other than environmental Permits, which are the subject of Section 3.7) that are required to be held by them and are necessary for the conduct of the business conducted by MSLP and the ownership and operation of the MSLP Assets, each in compliance with applicable laws and regulations of applicable Governmental Authorities, except for those the failure of which to have, individually or in the aggregate, would not have a Material Adverse Effect.  The P66 Parties or their Affiliates have complied in all material respects with all terms and conditions

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thereof.  To the knowledge of the P66 Parties, each of the JV Entities holds or has a valid right to use all Permits (other than environmental Permits, which are the subject of Section 3.7) that are required to be held by them and are necessary for the conduct of the business conducted by the respective JV Entity and the ownership and operation of the JV Assets, each in compliance with applicable laws and regulations of applicable Governmental Authorities, except for those the failure of which to have, individually or in the aggregate, would not have a Material Adverse Effect.

3.11                        Insurance.

(a)                                 The P66 Parties or their Affiliates maintain policies of fire and casualty, liability and other forms of property and liability insurance (including self-insurance) related to the MSLP Assets and the business conducted by MSLP in such amounts, with such deductibles, and against such risks and losses as are, in their judgment, reasonable for such business and the MSLP Assets. To the P66 Parties’ knowledge, all such policies are in full force and effect, all premiums due and payable thereon have been paid, and no notice of cancellation or termination has been received with respect to any such policy that has not been replaced on substantially similar terms prior to the date of such cancellation.  To the P66 Parties’ knowledge, the activities and operations of the business conducted by MSLP has been conducted in a manner so as to conform in all material respects to all applicable provisions of those insurance policies.

(b)                                 To the P66 Parties’ knowledge, the JV Entities maintain policies of fire and casualty, liability and other forms of property and liability insurance (including self-insurance) related to the JV Assets and the business conducted by the JV Entities in such amounts, with such deductibles, and against such risks and losses as are, in their judgment, reasonable for such business and the JV Assets. To the P66 Parties’ knowledge, all such policies are in full force and effect, all premiums due and payable thereon have been paid, and no notice of cancellation or termination has been received with respect to any such policy that has not been replaced on substantially similar terms prior to the date of such cancellation.

3.12                        Brokerage Arrangements.  None of the P66 Parties or any of their Affiliates has entered, directly or indirectly, into any agreement with any person, firm or corporation that would obligate any Group Member to pay any commission, brokerage or “finder’s fee” or other fee in connection with this Agreement or the transactions contemplated hereby.

3.13                        Investment.  PDI is an “accredited investor” as such term is defined in Rule 501 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). PDI is not acquiring the New Common Units with a view to or for sale in connection with any distribution thereof or any other security related thereto within the meaning of the Securities Act.  PDI is familiar with investments of the nature of the New Common Units, understands that this investment involves substantial risks, has adequately investigated the Partnership and the New Common Units, and has substantial knowledge and experience in financial and business matters such that it is capable of evaluating, and has evaluated, the merits and risks inherent in purchasing the New Common Units, and is able to bear the economic risks of such investment. PDI has had the opportunity to visit with the Partnership and meet with the officers of the General Partner and other representatives to discuss the business, assets, liabilities, financial condition, and operations of the Partnership, has received all materials, documents and other

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information that PDI deems necessary or advisable to evaluate the Partnership and the New Common Units, and has made its own independent examination, investigation, analysis and evaluation of the Partnership and the New Common Units, including its own estimate of the value of the New Common Units.  PDI has undertaken such due diligence (including a review of the properties, liabilities, books, records and contracts of the Partnership) as PDI deems adequate. PDI acknowledges that the New Common Units have not been registered under applicable federal and state securities laws and that the New Common Units may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of unless such transfer, sale, assignment, pledge, hypothecation or other disposition is registered under applicable federal and state securities laws or pursuant to an exemption from registration under any federal or state securities laws.

3.14                        Taxes.

(a)                                 All Tax Returns that are required to be filed by or with respect to the Contributed Entities, the MSLP Assets or, to the P66 Parties’ knowledge, the JV Entities on or prior to the Closing Date (taking into account any valid extension of time within which to file) have been or will be timely filed on or prior to the Closing Date and all such Tax Returns are or will be true, correct and complete in all material respects.

(b)                                 All Taxes due and payable by or with respect to the Contributed Entities, the MSLP Assets or, to the P66 Parties’ knowledge, the JV Entities (in each case, whether or not shown on any Tax Return) have been fully paid and all deficiencies asserted or assessments made with respect to such Tax Returns have been paid in full or properly accrued for by the applicable Contributed Entity or by the applicable JV Entity, as the case may be.

(c)                                  No examination, audit, claim, assessment, levy, or administrative or judicial proceeding regarding any of the Tax Returns described in Section 3.14(a) or any Taxes of or with respect to the Contributed Entities, the MSLP Assets or, to the P66 Parties’ knowledge, the JV Entities, are currently pending or have been proposed in writing or have been threatened.

(d)                                 No waivers or extensions of statutes of limitations have been given or requested in writing with respect to any amount of Taxes of or with respect to the Contributed Entities, the MSLP Assets or, to the P66 Parties’ knowledge, the JV Entities, or any Tax Returns of or with respect to the Contributed Entities, the MSLP Assets or, to the P66 Parties’ knowledge, the JV Entities.

(e)                                  For U.S. federal income tax purposes, each of the Contributed Entities is currently, and has been since its respective inception, properly classified as an entity disregarded as separate from its owner.

(f)                                   To the P66 Parties’ knowledge, for U.S. federal income tax purposes, each of the JV Entities (i) is properly classified as a partnership and (ii) has in effect a valid election under Section 754 of the Internal Revenue Code of 1986, as amended (the “Code”).

(g)                                  The interest on the MSLP Environmental Facility Revenue Bonds is excludable from the gross income of the owners of the MSLP Environmental Facility Revenue

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Bonds for U.S. federal income tax purposes (subject to the exceptions under sections 147(a), 57(a)(5), 884 and 1375 of the Code).

(h)                                 No examination, audit, claim, assessment, levy or administrative or judicial proceeding with respect to any of the MSLP Environmental Facility Revenue Bonds are currently pending or have been proposed in writing or have been threatened.

3.15                        Financial Statements.

(a)                                 P66 Company has delivered to the Partnership the (i) audited balance sheets, as of December 31, 2016 and 2015, and the statements of operation and cash flows for each of the two years then ended, for each of Dakota Access, Energy Transfer Crude Oil Company, and MSLP and (ii) unaudited balance sheets, as of June 30, 2017, and the statements of operation and cash flows for the six (6) month period then ended, for MSLP and (iii) unaudited balance sheets, as of July 31, 2017, and the statements of operation and cash flows for the seven (7) month period then ended, for each of Dakota Access and Energy Transfer Crude Oil Company (collectively, the “Financial Statements”).

(b)                                 The Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles applied on a consistent basis throughout the periods covered, subject to, in the case of the unaudited Financial Statements, the absence of footnote disclosures.

(c)                                  As of the Effective Time, MSLP shall have approximately $50,000,000 to $60,000,000 of receivables from P66 Company or its Affiliates (i.e., receivables that comprise “MSLP Assets” rather than “Excluded Assets”) or cash on hand which relates to prepayments by P66 Company for the completion of the Prefunded Projects.

3.16                        Material Contracts.  The P66 Parties have made available to the Partnership a correct and complete copy of each Material Contract.  Each Material Contract is in full force and effect, and none of the P66 Parties or any Contributed Entity, or, to the knowledge of the P66 Parties, any JV Entity or any other party, is in breach or default thereunder and no event has occurred that upon receipt of notice or lapse of time or both would constitute any breach or default thereunder, except for such breaches or defaults as would not, individually or in the aggregate, have a Material Adverse Effect. None of the P66 Parties or any Contributed Entity or, to the P66 Parties’ knowledge, the JV Entities has given or received from any third party any notice of any action or intent to terminate or amend in any material respect any Material Contract.

3.17                        Outstanding Capital Commitments. The P66 Parties have provided the Partnership with a copy of the approved budgets for each of the JV Entities. Except as previously disclosed to the Partnership prior to the date hereof and reflected in the Financial and Operational Information, to the knowledge of the P66 Parties, there are no outstanding capital commitments or other expenditure commitments relating to the JV Entities that will require any of the P66 Parties, Contributed Entities or the Partnership Group to make any capital contributions, capital expenditures or pay any operating expenses in respect of the JV Entities other than those set forth in the applicable approved budget. Each of the capital projects set forth

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on the applicable approved budget, which capital projects represent all of the capital projects that are planned to be undertaken prior to the Effective Time in respect of any JV Entity, have been duly authorized and approved by the applicable JV Entity.

3.18                        No Adverse Changes.  Except as set forth in Schedule 3.18, since June 30, 2017:

(a)                                 there has not been a Material Adverse Effect;

(b)                                 to the knowledge of the P66 Parties, the Businesses and the Assets have been operated and maintained in the ordinary course of business consistent with past practices; and

(c)                                  there has not been any material damage or destruction to any material portion of the Assets other than such damage or destruction that has been repaired.

3.19                        Prior Conveyances.  As of the Effective Time, each of the Prior Conveyances has been duly executed, acknowledged (where applicable) and delivered by the parties thereto in substantially the form provided by the P66 Parties to the Partnership prior to the date hereof.

3.20                        No Other Representations or Warranties; Schedules.  The P66 Parties make no other express or implied representation or warranty with respect to the Contributed Interests, the Contributed Entities, the Businesses, the Assets or the transactions contemplated by this Agreement, and disclaim any other representations or warranties. The disclosure of any matter or item in any schedule to this Agreement shall not be deemed to constitute an acknowledgment that any such matter is required to be disclosed.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

The Partnership hereby represents and warrants to the P66 Parties that as of the date hereof:

4.1                               Organization and Existence.  The Partnership is an entity duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all limited partnership power and authority to own the Contributed Interests. The Partnership is duly qualified to transact business as a limited partnership and is in good standing in each other jurisdiction in which such qualification is required for the conduct of its business, except where the failure to so qualify or to be in good standing does not have a Partnership Material Adverse Effect.

4.2                               Authority and Approval; Enforceability.  The Partnership has the requisite power and authority to execute and deliver this Agreement and any Transaction Document to which it is a party, to consummate the transactions contemplated hereby and thereby and to perform all the terms and conditions hereof and thereof to be performed by it.  The execution and delivery by the Partnership of this Agreement and any Transaction Document to which it is a party, the performance by it of all the terms and conditions hereof and thereof to be performed by it and the consummation of the transactions contemplated hereby and thereby have been duly authorized and approved by all requisite action of the Partnership.  Each of this Agreement and

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any Transaction Document to which the Partnership is a party constitutes the valid and binding obligation of the Partnership, enforceable against the Partnership in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement of creditors’ rights generally and by general principles of equity (whether applied in a proceeding at law or in equity).

4.3                               Delivery of Fairness Opinion.  Financial Advisor has delivered an opinion to the Conflicts Committee that the aggregate consideration to be paid by the Partnership as consideration for the Contributed Interests pursuant to this Agreement is fair to the Partnership and the common unitholders of the Partnership (other than the P66 Parties) from a financial point of view.

4.4                               Brokerage Arrangements.  The Partnership has not entered, directly or indirectly, into any agreement with any person, firm or corporation that would obligate the P66 Parties or any of their Affiliates (other than the Partnership) to pay any commission, brokerage or “finder’s fee” or other fee in connection with this Agreement or the transactions contemplated hereby.

4.5                               New Common Units and New GP Units.  The New Common Units and the New GP Units being issued at Closing will be, when issued in consideration for the contribution by the P66 Parties of the Contributed Interests, duly authorized, validly issued, fully paid and non-assessable (except as such non-assessability may be affected by the Delaware Revised Uniform Limited Partnership Act) and free of any preemptive or similar rights (other than those set forth in the Partnership Agreement).

ARTICLE V
COVENANTS, ETC.

5.1                               Conduct of the Businesses.  The P66 Parties covenant and agree that from and after the execution of this Agreement and until the Closing:

(a)                                 without the prior written consent of the Partnership, the P66 Parties will not, and will not permit any of the Contributed Entities to, sell, transfer, assign, convey or otherwise dispose of any of the Contributed Interests or, with respect to MSLP, the MSLP Assets;

(b)                                 the P66 Parties will not, and will not permit the Contributed Entities to, permit any Lien to be imposed on the Contributed Interests, other than Permitted Liens ;

(c)                                  the P66 Parties will not, and will not permit the Contributed Entities to, make, vote for or authorize any capital commitments or other expenditure commitments that will require any P66 Party, any Contributed Entity or the Partnership to make a capital contribution or other expenditure in respect of the Contributed Interests, MSLP or the JV Entities, except (i) as previously disclosed to the Partnership prior to the date hereof, (ii) to the extent such authorization is already granted and documented within the existing governance documents and delegations of authority of the applicable JV Entity or (iii) as set forth in the approved budgets of the JV Entities provided to the Partnership by the P66 Parties; and

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(d)                                 except as expressly provided in this Agreement, the P66 Parties will not, and will not permit the Contributed Entities to, agree to, consent to, promote, or vote in favor of (or not vote, if the effect of a failure to vote is a vote in favor of), or, to the extent they have such authority, permit the operator of the JV Entities to conduct the business of the JV Entities in a manner not in the ordinary course of business consistent with past practices or do any of the foregoing in clauses (a) through (c) beyond what such operator is already authorized and delegated to do pursuant to the existing governance documents and delegations of authority of the applicable JV Entity. However, in case of emergency, the P66 Parties are permitted to take, vote for and/or authorize all necessary and reasonable actions to resolve the emergency situation and then promptly inform the Partnership of same.

5.2                               Financial Statements.  P66 Company shall permit the Partnership and its representatives to contact P66 Company’s accountants, auditors and employees, and shall cause such accountants, auditors and employees to discuss, cooperate and provide information reasonably requested by the Partnership or its representatives, in order for the Partnership to prepare audited and unaudited historical financial statements with respect to the Businesses and/or Contributed Entities and pro forma financial statements of the Partnership, in each case that meet the requirements of Regulation S-X promulgated under the Securities Act and within the timeframe specified for the Partnership to file such financial statements on Form 8-K under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder. P66 Company shall cause its accountants, auditors and employees to cooperate with the Partnership with regards to responding to any comments from the Commission on such financial statements. The Partnership shall be responsible for and shall pay for or reimburse P66 Company for all costs incurred by P66 Company in connection with the external audit of any such financial statements (including reasonable accountants’ fees). The obligations of P66 Company under this Section 5.2 shall survive for five (5) years after the Closing.

5.3                               Prefunded Projects.  Prior to the Effective Time, P66 Company has contributed approximately $50,000,000 to $60,000,000 as prepayment for the completion of the projects set forth on Schedule 5.3 (the “Prefunded Projects”). The Partnership agrees, in consideration of such contributions in respect of the Prefunded Projects, and assuming compliance by P66 Company with the terms of the Tolling Services Agreement, that the Partnership will use its commercially reasonable efforts to complete, or cause the completion of, each such Prefunded Project in accordance with the specifications previously identified by P66 Company to the Partnership.  With regard to the next Scheduled Turnaround (as such term is defined in the Amended and Restated Tolling Services Agreement), in the event such prepayment is greater or less than the sum of the Aggregate Major Turnaround Cost and Aggregate Minor Turnaround Cost (as such terms are defined in the Amended and Restated Tolling Services Agreement) attributable to the period of time between the immediately prior Scheduled Turnaround and the Closing Date, the difference shall be either (a) promptly paid by P66 Company to the Partnership or (b) promptly refunded by the Partnership to P66 Company, as applicable. Subject to the other terms of this Agreement and except as provided in the Amended and Restated Tolling Services Agreement, the Partnership acknowledges and agrees that the Partnership will bear the full amount of the next Scheduled Turnaround’s costs attributable to the period of time following the Closing Date.

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5.4                               Independent Investigation.  The Partnership acknowledges that in making the decision to enter into this Agreement and to consummate the transactions contemplated hereby, it has relied solely on its own independent investigation of the Businesses, the Contributed Interests, the Contributed Entities, the JV Entities and the Assets and upon the express written representations, warranties and covenants in this Agreement.  Without diminishing the scope of the express written representations, warranties and covenants of the Parties and without affecting or impairing its right to rely thereon, THE PARTNERSHIP ACKNOWLEDGES THAT THE P66 PARTIES HAVE NOT MADE, AND THE P66 PARTIES HEREBY EXPRESSLY DISCLAIM AND NEGATE, ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, RELATING TO THE ASSETS, THE CONTRIBUTED INTERESTS, THE CONTRIBUTED ENTITIES, THE JV ENTITIES OR THE BUSINESSES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS) OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY INCLUDED IN THIS AGREEMENT.

5.5                               Post-Closing Payments.  The Parties acknowledge that the consideration payable by the Partnership for the Contributed Interests and Contributed Entities reflects the operational and other assumptions included in the Financial and Operational Information. Following the Closing, and in any event no later than December 31, 2017 if the Closing occurs, the P66 Parties shall pay to the Partnership an amount in cash equal to the greater of zero and the Post-Closing Settlement Obligation. Additionally, should any of the P66 Parties or any of their respective Subsidiaries, after Closing, receive any payments or distributions relating to the Contributed Interests or the Contributed Entities to which the Partnership or any of its Subsidiaries is entitled pursuant to this Agreement, then such P66 Party or its applicable Subsidiary shall, within thirty (30) days of receipt of such payments, forward such payments or distributions to the Partnership.  If any demand is made on any of the P66 Parties or any of their respective Subsidiaries after Closing to pay any invoice or other obligation contracted or incurred in connection with the ownership of the Contributed Interests or the ownership of the Contributed Entities or the operation of the Businesses, the Partnership shall pay the same to the extent such invoice or obligation constitutes an Assumed Liability. The Parties agree that (i) the P66 Parties’ obligation to pay the Post-Closing Settlement Obligation is in lieu of any obligation of the P66 Parties or their respective Subsidiaries to settle any payment obligations due to the MSLP Assets from outstanding trade receivables, if any, as of the Effective Time and (ii) the payment of the Post-Closing Settlement Obligation shall not in any event be deemed to be a payment under the Tolling Services Agreement or reduce any applicable minimum volume commitment for any period thereunder.

5.6                               Further Assurances.  On and after the Closing Date, the Parties shall cooperate and use their respective commercially reasonable efforts to take or cause to be taken all appropriate actions and do, or cause to be done, all things necessary or appropriate to make effective the transactions contemplated hereby, including the execution of any additional assignment or similar documents or instruments of transfer of any kind, the obtaining of consents which may be reasonably necessary or appropriate to carry out any of the provisions hereof and the taking of all such other actions as such Party may reasonably request to be taken by the other Party from to time to time, consistent with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement and transactions contemplated hereby.

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5.7                               NYSE Listing.  Prior to the Closing, the Partnership will use its reasonable best efforts to obtain approval for listing, subject to notice of issuance, the New Common Units on the New York Stock Exchange (the “NYSE”).

5.8                               Tax Covenants.

(a)                                 The Parties agree that the income related to the Assets for the period up to and including the Closing Date will be reflected on the federal income Tax Return of a P66 Party and that the appropriate P66 Party shall bear the liability for any Taxes associated with such income.  The Parties further agree that the income related to the Assets for the period after the Closing Date will be reflected on the federal income Tax Return of the Partnership and that the partners of the Partnership shall bear the liability for any Taxes associated with such income.

(b)                                 The Parties shall cooperate fully, and cause their Affiliates to cooperate fully, as and to the extent reasonably requested by the other Party, to accomplish the apportionment of income described pursuant to this Section 5.8, requests for the provision of any information or documentation within the knowledge or possession of the other Party as reasonably necessary to facilitate compliance with financial reporting obligations arising under FASB Accounting Standards Codification Topic 740, Income Taxes, and any audit, litigation or other proceeding (each a “Tax Proceeding”) with respect to Taxes.  Such cooperation shall include access to, the retention and (upon the other Party’s request) the provision of records and information which are reasonably relevant to any Tax Return or Tax Proceeding, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Partnership and P66 Company will use their respective commercially reasonable efforts to retain all books and records with respect to Tax matters pertinent to the Assets relating to any taxable period beginning before the Closing Date until the later of six years after the Closing Date or the expiration of the applicable statute of limitations of the respective taxable periods (including any extensions thereof), and to abide by all record retention agreements entered into with any Tax Authority.  The Partnership and P66 Company each agree, upon request, to use their respective commercially reasonable efforts to obtain any certificate or other document from any Tax Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed with respect to the transactions contemplated by this Agreement.

(c)                                  The Partnership intends to incur a borrowing or borrowings with respect to the transactions contemplated by Section 2.1 and Section 2.2, which will be considered recourse debt within the meaning of Section 1.752-1 of the Treasury Regulations (the “Treasury Regulations”) promulgated under the Code (the “Transaction Debt”).  The Parties intend that (i) (x) the distribution of the Cash Consideration to PDI shall be treated, pursuant to Treasury Regulation Section 1.163-8T and Notice 89-35 (Part VI), 1989-1 C.B. 675, as being made first out of proceeds of the Transaction Debt, and such repayment shall qualify to the maximum extent possible as a “debt-financed transfer” under Section 1.707-5(b) of the Treasury Regulations and (y) PDI’s allocable share of the Transaction Debt under Sections 1.752-2 and 1.707-5T(a)(2)(i) of the Treasury Regulations shall be determined in accordance with PDI’s interest in the Partnership’s profits, as determined by the General Partner; and (ii) the distribution of the Cash Consideration to PDI  in excess of amounts of the Transaction Debt as set forth in clause (i) hereof, if any, shall be made to reimburse PDI for capital expenditures described in

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Section 1.707-4(d) of the Treasury Regulations to the extent such distribution does not exceed the amount of capital expenditures described in Section 1.707-4(d) of the Treasury Regulations.  The Parties agree to act at all times in a manner consistent with this intended treatment of the Transaction Debt.

(d)                                 From and after Closing, the Partnership will operate the MSLP Assets in such a manner as is consistent with its historical operation of the MSLP Assets by P66 Company and its Affiliates and in any event will continue to operate the MSLP Assets in a manner that will maintain the current treatment for Tax purposes of any applicable agreements evidencing indebtedness relating to the MSLP Assets as set forth on Schedule 2.4.

(e)                                  From and after Closing, P66 Company will comply with the covenants and agreements in Section 3 of the Assignment and Assumption Agreement.

5.9                               Consents.  The P66 Parties shall use commercially reasonable efforts to obtain the Consents listed on Schedule 3.4. Within one year after Closing, the P66 Parties shall obtain all Consents listed in Schedule 3.4 and shall be responsible for all costs associated with obtaining such Consents and all Liabilities associated with failing to obtain any such Consent (and all such Liabilities shall be Excluded Liabilities for all purposes hereunder).

5.10                        Financing Cooperation. From and after the execution of this Agreement, the P66 Parties shall, and shall cause each of their Affiliates to, use commercially reasonable efforts to cause their representatives (including auditors) to provide all customary cooperation as reasonably requested by the Partnership to assist the Partnership in the arrangement of any capital markets debt or equity financing, any bank debt, or any other financing arrangements (the “Financing”) necessary or desirable to fund any amounts contemplated to be paid in connection with or promptly following the consummation of the transactions contemplated by this Agreement, including any necessary offering documents related thereto.

ARTICLE VI
CONDITIONS TO CLOSING

6.1                               Conditions to Each Party’s Obligation to Effect the Transactions.  The respective obligation of each Party to proceed with the Closing is subject to the satisfaction or waiver by each of the Parties (subject to applicable laws) on or prior to the Closing Date of all of the following conditions:

(a)                                 all necessary filings with and consents of any Governmental Authority required for the consummation of the transactions contemplated by this Agreement shall have been made and obtained; provided, however, that, prior to invoking this condition, the invoking Party shall have used commercially reasonable efforts to make or obtain such filings and consents;

(b)                                 no Party shall be subject to any decree, order or injunction of a court of competent jurisdiction that prohibits the consummation of the transactions contemplated hereby and no statute, rule, regulation, order, decree or injunction enacted, entered, or issued by any Governmental Authority, or other legal restraint or prohibition preventing the consummation of the transactions contemplated by this Agreement, shall be in effect; and

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(c)                                  the New Common Units shall have been approved for listing upon notice of issuance on the NYSE.

6.2                               Conditions to the Obligation of the Partnership.  The obligation of the Partnership to proceed with the Closing is subject to the satisfaction or waiver by the Partnership on or prior to the Closing Date of the following conditions:

(a)                                 the P66 Parties shall have performed in all material respects the covenants and agreements contained in this Agreement required to be performed by them on or prior to the Closing Date;

(b)                                 (i) the Fundamental Representations shall be true and correct (without regard to qualifications as to materiality or Material Adverse Effect contained therein) in all material respects as of the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case as of such earlier date), and (ii) the other representations and warranties of the P66 Parties made in this Agreement shall be true and correct in all respects (without regard to qualifications as to materiality or Material Adverse Effect contained therein, except in the case of the representation and warranty contained in Section 3.18(a)) as of the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case as of such earlier date), except in the case of clause (ii) where the failure of the representations and warranties to be true and correct, individually or in the aggregate, has not had a Material Adverse Effect;

(c)                                  the P66 Parties shall have delivered to the Partnership a certificate dated the Closing Date and signed by an authorized officer of each of the P66 Parties confirming the foregoing matters set forth in clauses (a) and (b) of this Section 6.2 (the “P66 Company Closing Certificate”);

(d)                                 the P66 Parties shall have delivered or caused the delivery of the Closing deliverables set forth in Section 7.2;

(e)                                  between the date hereof and the Closing Date, there shall not have been a Material Adverse Effect; and

(f)                                   the Partnership shall have received, on terms and conditions that are reasonably satisfactory to the Partnership, sufficient proceeds in the Financing necessary to fulfill its obligations required for Closing, and the Partnership shall have determined in good faith that it expects to be able to repay or refinance, on commercially reasonable terms, any indebtedness assumed by or assigned to the Partnership in connection with the transactions contemplated hereby.

6.3                               Conditions to the Obligation of the P66 Parties.  The obligation of the P66 Parties to proceed with the Closing is subject to the satisfaction or waiver by the P66 Parties on or prior to the Closing Date of the following conditions:

(a)                                 the Partnership shall have performed in all material respects the covenants and agreements contained in this Agreement required to be performed by it on or prior to the Closing Date;

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(b)                                 the representations and warranties of the Partnership made in this Agreement shall be true and correct in all respects (without regard to qualifications as to materiality or Partnership Material Adverse Effect contained therein) as of the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, in which case as of such earlier date), except where the failure of the representations and warranties to be true and correct, individually or in the aggregate, has not had a Partnership Material Adverse Effect;

(c)                                  the Partnership shall have delivered to the P66 Parties a certificate dated the Closing Date and signed by an authorized officer of the General Partner confirming the foregoing matters set forth in clauses (a) and (b) of this Section 6.3 (the “Partnership Closing Certificate”);

(d)                                 the Partnership shall have delivered or caused the delivery of the Closing deliverables set forth in Section 7.3; and

(e)                                  between the date hereof and the Closing Date, there shall not have been a Partnership Material Adverse Effect.

ARTICLE VII
CLOSING

7.1                               Closing.  Subject to the terms and conditions of this Agreement and unless otherwise agreed in writing by the P66 Parties and the Partnership, the closing (the “Closing”) of the transactions contemplated by this Agreement will be held at the offices of Latham & Watkins LLP, 811 Main Street, 37th Floor, Houston, Texas at 9:00 a.m., Houston, Texas time on the date that is three (3) business days immediately following the date of fulfillment or waiver (in accordance with the provisions hereof) of the last to be fulfilled or waived of the conditions set forth in Sections 6.1, 6.2 and 6.3 (other than those conditions that by their nature are to be fulfilled at or after the Closing, but subject to the fulfillment or waiver of such conditions), or such other time or date as mutually agreed to by the Parties.  The date on which the Closing occurs is referred to as the “Closing Date.”

7.2                               Deliveries by the P66 Parties.  At the Closing, the P66 Parties will deliver (or cause to be delivered) the following:

(a)                                 a counterpart to the Assignment of Interests, duly executed by the P66 Parties or their applicable Affiliates party thereto, with respect to the assignments of the Contributed Interests to the Partnership;

(b)                                 a counterpart to the Assignment of Term Note, duly executed by, among others, Phillips 66, P66 Company and PDI;

(c)                                  a counterpart to the Omnibus Agreement Amendment, duly executed by P66 Company and Pipeline;

(d)                                 a counterpart to the Amended and Restated Operational Services Agreement, duly executed by Pipeline;

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(e)                                  a counterpart to the Amended and Restated Lease, duly executed by P66 Company;

(f)                                   a counterpart to the Amended and Restated Tolling Services Agreement, duly executed by P66 Company;

(g)                                  a counterpart to the Amended and Restated Shared Services Agreement, duly executed by P66 Company;

(h)                                 the P66 Company Closing Certificate, duly executed by officers of P66 Company and PDI;

(i)                                     an executed statement described in Treasury Regulations section 1.1445-2(b)(2) certifying that PDI is neither a disregarded entity nor a foreign person within the meaning of the Code and the Treasury Regulations; and

(j)                                    such other documents, certificates and other instruments as may be reasonably requested by the Partnership prior to the Closing Date to carry out the intent and purposes of this Agreement.

7.3                               Deliveries by the Partnership.  At the Closing, the Partnership will deliver (or cause to be delivered) the following:

(a)                                 the New Common Units, by issuance of such New Common Units (in book-entry form) to PDI pursuant to instruction to the Partnership’s transfer agent or otherwise;

(b)                                 the New GP Units, by issuance of such New GP Units (in certificated or book-entry form) to the General Partner pursuant to instruction to the Partnership’s transfer agent or otherwise;

(c)                                  a counterpart to the Assignment of Interests, duly executed by the Partnership, the General Partner and Holdings;

(d)                                 a counterpart to the Assignment of Term Note, duly executed by the Partnership;

(e)                                  a counterpart to the Omnibus Agreement Amendment, duly executed by the Partnership, the General Partner and Holdings;

(f)                                   a counterpart to the Amended and Restated Operational Services Agreement, duly executed by Holdings and Carrier;

(g)                                  a counterpart to the Amended and Restated Lease, duly executed by MSLP;

(h)                                 a counterpart to the Amended and Restated Tolling Services Agreement, duly executed by MSLP;

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(i)                                     a counterpart to the Amended and Restated Shared Services Agreement, duly executed by MSLP;

(j)                                    the Partnership Closing Certificate, duly executed by an officer of the General Partner; and

(k)                                 such other documents, certificates and other instruments as may be reasonably requested by the P66 Parties prior to the Closing Date to carry out the intent and purposes of this Agreement.

ARTICLE VIII
INDEMNIFICATION

8.1                               Indemnification of P66 Company and Other Parties.  Solely for the purpose of indemnification in this Section 8.1, the representations and warranties of the Partnership in this Agreement shall be deemed to have been made without regard to any materiality or Partnership Material Adverse Effect or knowledge qualifiers.  From and after the Closing Date, subject to the other provisions of this Article VIII, the Partnership shall indemnify and hold the P66 Parties and their respective Affiliates, directors, officers, employees, agents and representatives (together with the P66 Parties, the “P66 Indemnitees”) harmless from and against any and all damages (including exemplary damages and penalties), losses, deficiencies, judgments, settlements, costs, expenses, obligations, fines, expenditures, claims and liabilities, including reasonable counsel fees and reasonable expenses of investigation, defending and prosecuting litigation (collectively, the “Damages”), suffered by the P66 Indemnitees as a result of, caused by, arising out of, or in any way relating to (a) any breach of a representation or warranty of the Partnership in this Agreement, (b) any breach of any agreement or covenant under this Agreement on the part of the Partnership or (c) any of the Assumed Liabilities.

8.2                               Indemnification of the Partnership and other Parties.  Solely for the purpose of indemnification in this Section 8.2, the representations and warranties of the P66 Parties in this Agreement (other than the representation and warranty contained in Section 3.18(a)) shall be deemed to have been made without regard to any materiality or Material Adverse Effect or knowledge qualifiers. From and after the Closing Date, subject to the other provisions of this Article VIII, the P66 Parties shall, jointly and severally, indemnify and hold the Group Members and their respective directors, officers, employees, agents and representatives (together with the Partnership, the “Partnership Indemnitees”) harmless from and against any and all Damages suffered by the Partnership Indemnitees as a result of, caused by, arising out of, or in any way relating to (a) any breach of a representation or warranty of the P66 Parties in this Agreement, (b) any breach of any agreement or covenant in this Agreement on the part of the P66 Parties, (c) any of the Excluded Liabilities, (d) the Specified Matter described in and subject to the terms of Section 8.14, or (e) any Transaction Taxes imposed on the Prior Conveyances.

8.3                               Demands.  Each indemnified party agrees that promptly upon its discovery of facts giving rise to a claim for indemnity under the provisions of this Agreement, including receipt by it of notice of any demand, assertion, claim, action or proceeding, judicial or otherwise, by any third party (such third party actions being collectively referred to herein as the “Indemnity Claim”), with respect to any matter as to which it claims to be entitled to indemnity

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under the provisions of this Agreement, it will give prompt notice thereof in writing to the indemnifying party, together with a statement of such information respecting any of the foregoing as it shall have.  Such notice shall include a formal demand for indemnification under this Agreement.  The indemnifying party shall not be obligated to indemnify the indemnified party with respect to any Indemnity Claim if the indemnified party failed to notify the indemnifying party thereof in accordance with the provisions of this Agreement to the extent that knowing failure to notify actually results in material prejudice or damage to the indemnifying party.

8.4                               Right to Contest and Defend.

(a)                                 The indemnifying party shall be entitled at its cost and expense to contest and defend by all appropriate legal proceedings any Indemnity Claim with respect to which it is called upon to indemnify the indemnified party under the provisions of this Agreement; provided, however, that notice of the intention to so contest shall be delivered by the indemnifying party to the indemnified party within twenty (20) days from the date of receipt by the indemnifying party of notice by the indemnified party of the assertion of the Indemnity Claim.  Any such contest may be conducted in the name and on behalf of the indemnifying party or the indemnified party as may be appropriate.  Such contest shall be conducted and prosecuted diligently to a final conclusion or settled in accordance with this Section 8.4 by reputable counsel employed by the indemnifying party and not reasonably objected to by the indemnified party, but the indemnified party shall have the right but not the obligation to participate in such proceedings and to be represented by counsel of its own choosing at its sole cost and expense.  The indemnifying party shall have full authority to determine all action to be taken with respect thereto; provided, however, that the indemnifying party will not have the authority to subject the indemnified party to any obligation whatsoever, other than the performance of purely ministerial tasks or obligations not involving material expense.  If the indemnifying party does not elect to contest any such Indemnity Claim or elects to contest such Indemnity Claim but fails diligently and promptly to prosecute or settle such claim, the indemnifying party shall be bound by the result obtained with respect thereto by the indemnified party. If the indemnifying party shall have assumed the defense of an Indemnity Claim, the indemnified party shall agree to any settlement, compromise or discharge of an Indemnity Claim that the indemnifying party may recommend and that by its terms obligates the indemnifying party to pay the full amount of the liability in connection with such Indemnity Claim, which releases the indemnified party completely in connection with such Indemnity Claim and which would not otherwise adversely affect the indemnified party.

(b)                                 Notwithstanding the foregoing, the indemnifying party shall not be entitled to assume the defense of any Indemnity Claim (and shall be liable for the reasonable fees and expenses of counsel incurred by the indemnified party in defending such Indemnity Claim) if the Indemnity Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the indemnified party which the indemnified party reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for money damages.  If such equitable relief or other relief portion of the Indemnity Claim can be so separated from that for money damages, the indemnifying party shall be entitled to assume the defense of the portion relating to money damages.

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8.5                               Cooperation.  If requested by the indemnifying party, the indemnified party agrees to cooperate with the indemnifying party and its counsel in contesting any Indemnity Claim that the indemnifying party elects to contest or, if appropriate, in making any counterclaim against the person asserting the Indemnity Claim, or any cross-complaint against any person, and the indemnifying party will reimburse the indemnified party for any expenses incurred by it in so cooperating.  At no cost or expense to the indemnified party, the indemnifying party shall cooperate with the indemnified party and its counsel in contesting any Indemnity Claim.

8.6                               Right to Participate.  The indemnified party agrees to afford the indemnifying party and its counsel the opportunity to be present at, and to participate in, conferences with all persons, including Governmental Authorities, asserting any Indemnity Claim against the indemnified party or conferences with representatives of or counsel for such persons.

8.7                               Payment of Damages.  The indemnification required hereunder shall be made by periodic payments of the amount thereof during the course of the investigation or defense, within ten (10) days as and when reasonably specific bills are received or loss, liability, claim, damage or expense is incurred and reasonable evidence thereof is delivered.  In calculating any amount to be paid by an indemnifying party by reason of the provisions of this Agreement, the amount shall be reduced by all reimbursements (including, without limitation, insurance proceeds) credited to or received by the other party related to the Damages.

8.8                               Limitations on Indemnification.

(a)                                 To the extent the Partnership Indemnitees are entitled to indemnification for Damages pursuant to Section 8.2(a) (but not including Damages for breaches of Fundamental Representations or the representations set forth in Section 3.15(c)), the P66 Parties shall not be liable for those Damages unless the aggregate amount of Damages exceeds $4,125,000 (the “Deductible”), and then only to the extent of any such excess; provided, however, that the P66 Parties shall not be liable for Damages pursuant to Section 8.2(a) (but not including Damages for breaches of Fundamental Representations or the representations set forth in Section 3.15(c)) that exceed, in the aggregate, $165,000,000 (the “Cap”) less the Deductible.

(b)                                 Notwithstanding Section 8.8(a) above, to the extent the Partnership Indemnitees are entitled to indemnification for Damages for claims arising from fraud or related to or arising from Taxes (including, without limitation, Damages for breach of the representations or warranties in Section 3.14), the P66 Parties shall be fully liable for such Damages without regard to the Deductible or the Cap. For the avoidance of doubt, the P66 Parties shall be fully liable for Damages pursuant to Sections 8.2(b), 8.2(c), 8.2(d) or 8.2(e) and for breaches of Fundamental Representations without regard to the Deductible or the Cap (subject, however, in the case of the Specified Matter, to the terms described in Section 8.14).

(c)                                  To the extent the P66 Indemnitees are entitled to indemnification for Damages pursuant to Section 8.1(a), the Partnership shall not be liable for those Damages unless the aggregate amount of Damages exceeds, in the aggregate, the Deductible, and then only to the extent of any such excess; provided, however, that the Partnership shall not be liable for Damages that exceed, in the aggregate, the Cap less the Deductible.

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(d)                                 Notwithstanding Section 8.8(c) above, to the extent the P66 Indemnitees are entitled to indemnification for Damages arising from fraud, the Partnership shall be fully liable for such Damages without regard to the Deductible or the Cap. For the avoidance of doubt, the Partnership shall be fully liable for Damages pursuant to Sections  8.1(b) or 8.1(c) without regard to the Deductible or the Cap.

8.9                               Survival.

(a)                                 The liability of the P66 Parties for the breach of any of the representations and warranties of the P66 Parties set forth in Sections 3.1, 3.2, 3.8 and 3.9 (the “Fundamental Representations”) shall be limited to claims for which the Partnership delivers written notice to the P66 Parties on or before the date that is three years after the Closing Date.  The liability of the P66 Parties for the breach of any of the representations and warranties of the P66 Parties set forth in Article III other than the Fundamental Representations shall be limited to claims for which the Partnership delivers written notice to the P66 Parties on or before the date that is eighteen months after the Closing Date. The liability of the P66 Parties for Damages for claims related to or arising from Taxes (including, without limitation, Damages for claims for breach of the representations or warranties in Section 3.14) shall be limited to claims for which the Partnership delivers written notice to the P66 Parties on or before the date that is ninety (90) days after the expiration of the applicable statute of limitations for assessment of the applicable Tax. The liability of the P66 Parties for the Specified Matter shall be limited to claims for which the Partnership delivers written notice to the P66 Parties on or before the date that is eighteen (18) months after the Closing Date.

(b)                                 The liability of the Partnership for the breach of any of the representations and warranties of the Partnership set forth in Article IV shall be limited to claims for which the P66 Parties deliver written notice to the Partnership on or before the date that is eighteen (18) months after the Closing Date.

8.10                        Sole Remedy.  After the Closing, no Party shall have liability under this Agreement or the transactions contemplated hereby except as is provided in this Article VIII other than claims or causes of action arising from fraud, and other than claims for specific performance or claims arising under any Transaction Documents (which claims shall be subject to the liability provisions of such Transaction Documents).

8.11                        Express Negligence Rule.  THE INDEMNIFICATION AND ASSUMPTION PROVISIONS PROVIDED FOR IN THIS AGREEMENT HAVE BEEN EXPRESSLY NEGOTIATED IN EVERY DETAIL, ARE INTENDED TO BE GIVEN FULL AND LITERAL EFFECT, AND SHALL BE APPLICABLE WHETHER OR NOT THE LIABILITIES, OBLIGATIONS, CLAIMS, JUDGMENTS, LOSSES, COSTS, EXPENSES OR DAMAGES IN QUESTION ARISE OR AROSE SOLELY OR IN PART FROM THE GROSS, ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF ANY INDEMNIFIED PARTY.  THE PARTNERSHIP AND THE P66 PARTIES ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND CONSTITUTES CONSPICUOUS NOTICE.  NOTICE IN THIS CONSPICUOUS NOTICE IS NOT INTENDED TO PROVIDE OR ALTER THE RIGHTS

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AND OBLIGATIONS OF THE PARTIES, ALL OF WHICH ARE SPECIFIED ELSEWHERE IN THIS AGREEMENT.

8.12                        Knowledge. The Partnership Indemnitees’ and the P66 Indemnitees’ rights under this Agreement or otherwise shall not be diminished by any investigation performed or knowledge acquired or capable of being acquired, whether before or after the date of this Agreement, regarding the accuracy or inaccuracy of any representation or warranty or the performance or non-performance of any covenant.

8.13                        Consideration Adjustment.  The Parties agree to treat all payments made pursuant to Section 5.3 and this Article VIII as adjustments to the consideration payable pursuant to Section 2.2 for Tax purposes, except as otherwise required by Law following a final determination by the U.S. Internal Revenue Service or a Governmental Authority with competent jurisdiction.

8.14                        Specified Matter.  The “Specified Matter” means Standing Rock Sioux Tribe v. United States Army Corps of Engineers, Civil Action No. 16-1534 (JEB) (and the two consolidated cases, Yankton Sioux Tribe v. United States Army Corps of Engineers, Civil Action No. 16-1796 (JEB); and Oglala Sioux Tribe v. United States Army Corps of Engineers, Civil Action No. 17-267 (JEB)),  United States District Court for the District of Columbia (and any other Litigation that is either (i) based on or arising from similar claims or (ii) involves DAPL Assets and was filed prior to the date of this Agreement). The Partnership Indemnitees shall be indemnified for all Damages of the Partnership Indemnitees associated with the Specified Matter in excess of $10 million in the aggregate but not to exceed $250 million in the aggregate. For the avoidance of doubt, “Damages” shall include costs and expenses of Dakota Access in defending such Litigation, costs of pipeline redirection, modification or other enhancements required by such Litigation and any reduction in the fair market value purchase price of the DAPL Assets due to reduced throughput as a result of such Litigation, in each case, after the date hereof and calculated in a manner taking into account DAPL Holdings’ ownership of a twenty-five percent (25%) limited liability company interest in Dakota Access.

ARTICLE IX
TERMINATION

9.1                               Events of Termination.  This Agreement may be terminated at any time prior to the Closing Date:

(a)                                 by mutual written consent of the P66 Parties and the Partnership;

(b)                                 by either the P66 Parties or the Partnership in writing after October 31, 2017, if the Closing has not occurred by that date, provided that as of such date the terminating Party is not in default under this Agreement;

(c)                                  by either the P66 Parties or the Partnership in writing without prejudice to other rights and remedies the terminating Party or its Affiliates may have (provided the terminating Party and its Affiliates are not otherwise in material default or breach of this Agreement, or have not failed or refused to close without justification hereunder), if the other Party or its Affiliates shall have (i) materially failed to perform its covenants or agreements

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contained herein required to be performed by such Party or its Affiliates on or prior to the Closing Date or (ii) materially breached any of its representations or warranties contained herein; provided, however, that in the case of clauses (i) or (ii), the defaulting Party shall have a period of thirty (30) days following written notice from the non-defaulting Party to cure any breach of this Agreement if the breach is curable; or

(d)                                 by either the P66 Parties or the Partnership in writing, without liability, if there shall be any order, writ, injunction or decree of any Governmental Authority binding on the Parties that prohibits or restrains any Party from consummating the transactions contemplated hereby; provided, however, that the applicable Party shall have used its reasonable best efforts to have any such order, writ, injunction or decree removed but it shall not have been removed within thirty (30) days after entry by the Governmental Authority.

9.2                               Effect of Termination.  In the event of the termination of this Agreement by a Party as provided in Section 9.1, this Agreement shall thereafter become void except for this Section 9.2 and Section 10.4.  Nothing in this Section 9.2 shall be deemed to release any Party from any liability for any breach by such Party of the terms and provisions of this Agreement or to impair any rights of any Party under this Agreement.  If this Agreement is terminated by either Party pursuant to Section 9.1(c), then the other Party shall reimburse such Party for its out-of-pocket expenses incurred in connection with the negotiation, execution and performance of this Agreement (including legal fees and fees paid to Financial Advisor, in either case incurred by the Partnership or the Conflicts Committee).

ARTICLE X
MISCELLANEOUS

10.1                        Expenses.  Unless otherwise specifically provided in this Agreement, each Party shall pay its own expenses incident to this Agreement or the other Transaction Documents and all action taken in preparation for effecting the provisions of this Agreement and the other Transaction Documents.

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

10.3                        Right of Offset.  Each Party agrees that, in addition to, and without limitation of, any right of set-off, lien or counterclaim a Party may otherwise have, each Party shall have the right and be entitled, at its option, to offset (a) balances held by it or by any of its Affiliates for account of any other Party at any of its offices and (b) other obligations at any time owing by such Party in connection with any obligations to or for the credit or account of the other Party, against any principal of or interest on any of such other Party’s indebtedness or any other amount due and payable to such other Party hereunder that is not paid when due.

10.4                        Notices.  Unless otherwise specifically provided in this Agreement, any notice, request, instruction, correspondence or other document to be given under or in relation to this Agreement shall be made in writing and shall be deemed to have been properly given if:  (a) personally delivered (with written confirmation of receipt); or (b) delivered by a recognized

37

overnight delivery service (delivery fees prepaid), in either case to the appropriate address set forth below:

If to P66 Company or PDI, addressed to:

Phillips 66 Company
1075 W. Sam Houston Parkway N., Suite 200
Houston, Texas 77043
Attention: General Counsel

If to the Partnership or the General Partner, addressed to:

Phillips 66 Partners LP
c/o Phillips 66 Partners GP LLC
1075 W. Sam Houston Parkway N., Suite 200
Houston, Texas 77043
Attention: General Counsel

Any Party may change any address to which notice is to be given to it by giving notice as provided above of such change of address.

10.5                        Governing Law.  This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Texas without reference to principles of conflicts of law that would result in the application of the laws of another jurisdiction.

10.6                        Public Statements.  The Parties shall consult with each other and no Party shall issue any public announcement or statement with respect to the transactions contemplated hereby without the consent of the other Parties, which shall not be unreasonably withheld or delayed, unless the Party desiring to make such announcement or statement, after seeking such consent from the other Parties, obtains advice from legal counsel that a public announcement or statement is required by applicable law or securities exchange regulations.

10.7                        Form of Payment.  All payments hereunder shall be made in United States dollars and, unless the Parties making and receiving such payments shall agree otherwise or the provisions hereof provide otherwise, shall be made by wire or interbank transfer of immediately available funds on the date such payment is due to such account as the Party receiving payment may designate at least three (3) business days prior to the proposed date of payment.

10.8                        Entire Agreement; Amendments and Waivers.  This Agreement and the documents and instruments and other agreements specifically referred to herein or delivered pursuant hereto, including the exhibits and schedules hereto, (a) constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof and (b) are not intended to confer upon any other Person or entity any rights or remedies hereunder except as Article VIII or Article X contemplates or except as otherwise expressly provided herein or therein.  Each Party agrees that (i) no other Party (including its agents and representatives) has made any representation, warranty, covenant or agreement to or with such Party relating to this Agreement or the transactions contemplated hereby, other than those

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expressly set forth in the documents and instruments and other agreements specifically referred to herein or delivered pursuant hereto, including the exhibits and schedules hereto, and (ii) such Party has not relied upon any representation, warranty, covenant or agreement relating to this Agreement or the transactions contemplated hereby other than those referred to in clause (i) above.  No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the Parties.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver constitute a continuing waiver unless otherwise expressly provided.

10.9                        Binding Effect and Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns, but neither this Agreement nor any of the rights, benefits or obligations hereunder shall be assigned, by operation of law or otherwise, by any Party without the prior written consent of the other Parties.

10.10                 Severability.  If any provision of the Agreement is rendered or declared illegal or unenforceable by reason of any existing or subsequently enacted legislation or by decree of a court of last resort, the Parties shall meet promptly and negotiate substitute provisions for those rendered or declared illegal or unenforceable, but all of the remaining provisions of this Agreement shall remain in full force and effect and will not be affected or impaired in any way thereby.

10.11                 Interpretation.  The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document.

10.12                 Headings and Schedules.  The headings of the several Articles and Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.  The schedules referred to herein are attached hereto and incorporated herein by this reference, and unless the context expressly requires otherwise, those schedules are incorporated in the definition of “Agreement.”

10.13                 Counterparts.  This Agreement 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 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.

10.14                 Consent of Conflicts Committee.  Any amendment or waiver by the Partnership made prior to Closing shall be approved by the Conflicts Committee.

[Signature pages follow]

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

Signature page to Contribution Agreement

EXHIBIT A

AMENDED AND RESTATED OPERATIONAL SERVICES AGREEMENT

Exhibit A

AMENDED AND RESTATED

OPERATIONAL SERVICES AGREEMENT

by and among

PHILLIPS 66 CARRIER LLC,

PHILLIPS 66 PARTNERS HOLDINGS LLC

and

PHILLIPS 66 PIPELINE LLC

[Form of Amended and Restated Operational Services Agreement]

TABLE OF CONTENTS

Exhibits

[Form of Amended and Restated Operational Services Agreement]

i

AMENDED AND RESTATED OPERATIONAL SERVICES AGREEMENT

This AMENDED AND RESTATED OPERATIONAL SERVICES AGREEMENT is made and entered into as of the [·]th day of September, 2017, 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 owns various crude oil, refined product and natural gas liquid pipeline and terminal assets and storage facilities, as well as natural gas liquid fractionation facilities and refinery assets;

WHEREAS, Operator has experience and expertise in the maintenance and operation of similar assets and facilities and can provide or make available to Company the personnel, technology, and other resources necessary to maintain and operate such assets and facilities; and

WHEREAS, Company and Operator desire that Operator maintain and operate such assets and facilities for Company;

WHEREAS, Company and Operator entered into that certain Operational Services Agreement, dated as of June 26, 2014, as amended by the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment and Sixth Amendment thereto effective as of March 1, 2014, December 1, 2014, March 1, 2016, May 10, 2016, October 14, 2016 and November 17, 2016, respectively (the “Operational Services Agreement”); and

WHEREAS, Company and Operator desire to amend and restate the Operational Services Agreement in its entirety in the form of this Agreement.

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

Article I.

Defined Terms

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

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

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

[Form of Amended and Restated Operational Services Agreement]

(c)                                  “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with, such specified Person; provided, however, that for all purposes of this Agreement, (i) neither Phillips 66 Partners LP, a Delaware limited partnership, nor any Person controlled by Phillips 66 Partners LP shall be deemed to be an Affiliate of Phillips 66, a Delaware corporation, or any Person controlled by Phillips 66 (other than Persons controlled by Phillips 66 Partners LP) and (ii) neither Phillips 66 nor any Person controlled by Phillips 66 (other than Persons controlled by Phillips 66 Partners LP) shall be deemed to be an Affiliate of Phillips 66 Partners LP or any Person controlled by Phillips 66 Partners LP.

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

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

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

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

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

(i)                                    “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.

[Form of Amended and Restated Operational Services Agreement]

2

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

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

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

(m)                             “Control” including the correlative terms “Controlled by” or “under common Control with”, 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 the 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 Houston, Texas, local time.

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

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

(q)                                 “Effective Date” means October 1, 2017.

(r)                                  “FERC” means the Federal Energy Regulatory Commission.

(s)                                   “Force Majeure” has the meaning set forth in Section 10.02 hereof.

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

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

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

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

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

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

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

[Form of Amended and Restated Operational Services Agreement]

3

regulatory issue that Operator, in its reasonable judgment, deems necessary or required by any Law.

(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 Houston, Texas, local time.

(bb)                          “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.

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

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

(ee)                            “Operated Assets” means the assets and facilities identified in Exhibit A hereto, and any other assets and facilities that Operator agrees to operate on behalf of Company upon reasonable request by Company.

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

(gg)                          “Operational Services Agreement” has the meaning set forth in the recitals hereof.

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

(ii)                                “Overrun” has the meaning set forth in Section 3.03(b) hereof.

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

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

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

(mm)                  “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.

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

(oo)                          “Seconded Employees” has the meaning set forth in Section 2.03(a) hereof.

[Form of Amended and Restated Operational Services Agreement]

4

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

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

1.02                        Terms Generally.  The definitions in Section 1.01 shall apply equally to both singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The word “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” All references herein to Articles, Sections and exhibits shall be deemed references to Articles and Sections of, and exhibits to, this Agreement unless the context shall otherwise require.  Unless the context shall otherwise require, any reference to any federal, state or local statute, act, code or law shall be deemed also to refer to all rules, regulations and directives promulgated thereunder (and to any successor provision).

Article II.

Responsibilities of Operator

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

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

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

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

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

[Form of Amended and Restated Operational Services Agreement]

5

(e)                                  Such other services related to the Operated Assets as the Parties may agree upon in writing from time to time.

2.02                        Manner of Performing/Providing Services.  The Services to be performed and provided by Operator hereunder shall be performed and provided in an efficient and prudent manner with the same degree of diligence and care that Operator would exercise if operating its own property and in all respects in accordance with all applicable Laws relating to Operator, Company and the Operated Assets, and Company’s ownership and operation thereof.  Operator shall operate the Operated Assets in a safe, professional and economical manner and, in a timely fashion, shall advise Company of all matters of significance that could affect the safety or economics relating to their operation so that Company can make appropriate decisions with respect thereto.  Operator shall provide such Services in accordance with and subject to the terms of the budget that is submitted by it to and approved by Company pursuant to Section 3.03 hereof.

2.03                        Personnel.

(a)                                 In connection with providing the Services, Operator agrees to second certain of its and/or its Affiliates’ employees, including direct, borrowed, special, seconded, or statutory employees (collectively, the “Seconded Employees”), to Company, and Company agrees to accept the secondment of the Seconded Employees for the purpose of performing Services and working on behalf of Company in the furtherance of Company’s business objectives. The Seconded Employees will remain at all times employees of Operator or its Affiliate, as applicable, and Operator shall have supervision over such Seconded Employees, subject to the direction and control of Company as provided in Section 5.02.  In addition, when the Seconded Employees are performing Services and working on behalf of Company, the Seconded Employees will also be joint employees of Company during such period of secondment for the limited purposes described in this Section 2.03. The period of secondment for a particular Seconded Employee shall be at the discretion of either Operator or Company. Certain of such Seconded Employees shall consist of managerial or supervisory personnel who will act on behalf of the Company when providing direction, supervision and control of the other Seconded Employees as contemplated hereby.

(b)                                 In addition to such Seconded Employees, Operator may utilize such other Persons (including consultants and professionals, service or other organizations) as Operator deems necessary or appropriate in order to permit Operator to perform the Services in an efficient and prudent manner. Operator shall have supervision over such other Persons, subject to the direction and control of Company as provided in Section 5.02.  Operator shall provide, or cause to be provided, all workers who will perform Services.

(c)                                  Subject to Operator’s right to be reimbursed for such expenses in accordance with the Accounting Procedures (as defined in Section 3.01), Operator shall pay, or caused to be paid, all expenses incurred by it or its Affiliates, as applicable, in connection with the employment of such Seconded Employees or the retention of such other Persons, including, but not limited to, compensation, salaries, wages and overhead and administrative expenses, charges to or incurred by Operator, and, if applicable, social

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security taxes, workers compensation insurance, retirement and insurance benefits and other such expenses. Any such Seconded Employees supplied by Operator or its Affiliates may be union or non-union employees, and Operator or its Affiliates, as applicable, shall have the sole right to negotiate the terms and provisions of any labor or other agreements with the unions to which such Seconded Employees belong.

(d)                                 During the period of secondment, Operator shall provide, or cause to be provided, worker’s compensation insurance to cover all Seconded Employees performing Services on behalf of Company, and Operator will name, or caused to be named, Company as a named insured under such insurance policies.

(e)                                  With respect to Company’s operations in Texas, Operator shall obtain and maintain, or cause to be obtained and maintained, workers’ compensation insurance (as defined by Texas Labor Code Section 401.011(44)) on behalf of both Operator and Company, and Company shall be considered an employer of the Seconded Employees solely for the purposes of Texas Labor Code Section 401.011(18) and Section 408.001.

(f)                                   With respect to Company’s operations in Louisiana, Operator shall obtain and maintain, or cause to be obtained and maintained, worker’s compensation coverage (as defined by the Louisiana Worker’s Compensation Law, Louisiana Revised Statutes 23:1021 et seq.), and the provisions of Exhibit G (Coverage of Louisiana Worker’s Compensation Law) shall apply to the Parties and to the Seconded Employees.

(g)                                 With respect to Company’s operations performed in any jurisdiction other than Texas or Louisiana, to the extent that such jurisdiction may regard Company as an employer of any such Seconded Employee for the purposes of workers’ compensation coverage, including joint or dual employer or in a similar capacity, Operator shall obtain and maintain, or cause to be obtained and maintained, workers’ compensation coverage as defined and required by Law or as otherwise appropriate in the applicable jurisdiction, on behalf of both Operator and Company, provided that Company shall be considered an employer or in a similar capacity, solely for the purposes under the relevant workers’ compensation regime.

(h)                                 The Parties intend that the sole remedy of the Seconded Employees against either Operator or Company and their respective Affiliates for any workplace injury (including death) shall be under the worker’s compensation coverage provided by, or caused to be provided by, Operator.

(i)                                    Notwithstanding the foregoing, nothing herein shall preclude a Seconded Employee from participating in benefit plans generally available to employees of Operator.  For the avoidance of doubt, nothing in this Agreement is intended to have any effect on the right of a Seconded Employee to prosecute a workers’ compensation claim against Operator, Company or both.

2.04                        Affiliates.  In its performance of the Services hereunder, Operator may, but shall not be obligated to, use the services of Operator’s or its Affiliates’ accounting construction, purchasing,

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engineering, legal, planning, budgeting, operating, regulatory, and other departments.  Operator’s Services may include Services for and on behalf of Company’s Affiliates.

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

2.06                        Claims.

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

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

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

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

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

Article III.

Financial Accounting and Billing Practices

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

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

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3.03                        Budgets.

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

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

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

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

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

3.04                        Safety, Environmental and Emergency Expenditures.  Notwithstanding any other provision in this Agreement, Operator may incur (and be reimbursed for) any expenditures or take any other actions as Operator in its reasonable judgment deems to be immediately necessary:  (a) to protect the environment from immediate and present harm; (b) to protect the health and safety of Persons from immediate and present harm; (c) to safeguard lives or property

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in connection with the initial response to any emergencies affecting the Operated Assets; and (d) proceed with maintenance or repair work necessary to keep the Operated Assets operating, or to restore the Operated Assets to operating conditions; however, it is also understood that every reasonable effort will be made by Operator to notify Company at the earliest possible convenience of such emergencies and expenditures involving same.

3.05                        Billing Practices.  Company shall pay and Operator shall receive as full and complete compensation for the performance of the Services hereunder, the sum of the amounts becoming due as described in the Accounting Procedures.  For Services provided by Operator in any Month, payment by Company shall be made no later than the 21st Day of the immediately following Month, provided that if such Day is not a Business Day, then Company shall pay such amount without interest on the next Business Day.  As long as Operator and Company are Controlled by the same Person, Operator and Company may settle Company’s financial obligations to Operator through Operator’s normal interaffiliate settlement processes.

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

Article IV.
Safety

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

Article V.
Relationship of the Parties

5.01                        General Principles Regarding Relationship of the Parties.  The Parties agree that Operator shall provide the Services to Company as an independent contractor. Except for the limited purposes specifically set forth in this Agreement, the Parties agree that Operator’s provision of the Services to Company shall not be as an agent or representative of Company.

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This Agreement is not intended to and shall not create or otherwise form a partnership or joint venture between Operator and Company.

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

Article VI.
Liability Standard and Indemnification

6.01                        Liability Standard.  Notwithstanding anything herein to the contrary, and in recognition of the fact that the Services to be performed and provided by Operator hereunder are to be furnished, performed and provided in exchange for the reimbursement provided for in the Accounting Procedures, Operator shall only be liable to Company for gross negligence or willful or wanton misconduct in the performance of its obligations hereunder, AND NEITHER OPERATOR NOR SUCH OF ITS AFFILIATES OR AGENTS AS IT SHALL APPOINT TO PERFORM DUTIES HEREUNDER OR THEIR RESPECTIVE DIRECTORS, STOCKHOLDERS, OFFICERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES, SUCCESSORS, TRANSFEREES AND ASSIGNEES SHALL BE LIABLE TO COMPANY OR PERSONS WHO HAVE ACQUIRED INTERESTS IN COMPANY, WHETHER AS PARTNERS, ASSIGNEES OR OTHERWISE, FOR ERRORS IN JUDGMENT OR FOR ANY ACTS OR OMISSIONS THAT DO NOT CONSTITUTE GROSS NEGLIGENCE OR WILLFUL OR WANTON MISCONDUCT, IT BEING THE INTENTION OF THE PARTIES THAT NEITHER OPERATOR NOR SUCH OF ITS AFFILIATES OR AGENTS AS IT SHALL APPOINT TO PERFORM DUTIES HEREUNDER OR THEIR RESPECTIVE DIRECTORS, STOCKHOLDERS, OFFICERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES, SUCCESSORS, TRANSFEREES AND ASSIGNEES SHALL BE LIABLE FOR THEIR OWN NEGLIGENCE (SOLE, PARTIAL OR CONCURRENT).

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

6.03                        Indemnification.  FROM AND AFTER THE DATE OF THIS AGREEMENT, COMPANY SHALL INDEMNIFY AND HOLD HARMLESS OPERATOR AND EVERY AFFILIATE OF OPERATOR AS IT SHALL APPOINT TO PERFORM SERVICES HEREUNDER AND ITS AND THEIR RESPECTIVE DIRECTORS, STOCKHOLDERS, OFFICERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES, SUCCESSORS, TRANSFEREES AND ASSIGNEES (COLLECTIVELY THE “INDEMNIFIED PARTIES”) FROM, AGAINST AND IN RESPECT OF ANY AND ALL LIABILITY CLAIMS ASSERTED BY OR ON BEHALF OF ANY PERSON OTHER THAN COMPANY ARISING FROM, RELATING TO, OR

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ASSOCIATED WITH THE PERFORMANCE OR PROVISION OR FAILURE TO PERFORM OR PROVIDE BY OPERATOR ANY OF THE SERVICES OR THE FAILURE BY COMPANY TO PERFORM ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT, IN EACH CASE REGARDLESS OF WHETHER ANY SUCH CLAIM RESULTS FROM THE NEGLIGENCE (SOLE, PARTIAL OR CONCURRENT) OF OPERATOR OR ANY OF THE INDEMNIFIED PARTIES; PROVIDED, HOWEVER, THAT SUCH INDEMNIFICATION SHALL NOT EXTEND TO ANY AMOUNT OF DAMAGES THAT ARE DETERMINED TO BE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL OR WANTON MISCONDUCT OF THE INDEMNIFIED PARTY.

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

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

Article VII.
Insurance

7.01                        Insurance.

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

(b)                                 Operator may elect to self-insure, or cause to be self-insured, all or any part of the insurance requirements set forth in Section 7.01(a) above to the extent allowed by applicable Law.  If self-insured, then Operator shall respond to, or cause to be responded to, any insurance claim, with regard to waiving rights of subrogation against the

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Company, in the same manner as a commercial market insurance policy that waived subrogation rights against the Company would have responded to such insurance claim.

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

7.03                        Required Contractor Coverage.  Operator shall require all contractors and subcontractors employed by Operator in performing and/or providing Services hereunder to procure and maintain the following insurance:  (a) workers’ compensation insurance or similar insurance, including all such insurance as may be required by all applicable state and federal workers’ compensation Laws and such other Laws as may be applicable to the Services provided by such contractors and subcontractors; (b) employers’ liability insurance with amounts required by Law or One Million Dollars ($1,000,000.00) per occurrence, whichever is greater; (c) commercial general liability insurance on an occurrence form covering liabilities for death and personal injury and liabilities for loss or damage to property with a combined single limit of not less than One Million Dollars ($1,000,000.00) per occurrence, which insurance must cover all Services conducted by such contractors and subcontractors related to this Agreement; and (d) business vehicle insurance covering liabilities for death of or injury to any one Person and liabilities for loss of or damage to property resulting from any one (1) accident with a combined single limit of not less than One Million Dollars ($1,000,000.00) per occurrence.  Further, Operator shall require such contractors and subcontractors to cause their workers’ compensation and employers’ liability insurance insurers to waive their rights of subrogation against Company, and to name Company as an additional insured under any commercial general liability and business vehicle liability insurance policies carried by such contractors and subcontractors.

Article VIII.
Term and Termination

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

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

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

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

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

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

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

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

Article IX.
Alcohol and Controlled Substances

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

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Article X.
Force Majeure

10.01                 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.

10.02                 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.

10.03                 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 10.01 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.

10.04                 Performance by Company or Third Parties.  If, because of an event of Force Majeure, Operator is unable to perform the Services required of it hereunder, Company may perform such Services itself or arrange for such Services to be performed by a third party, but only for the duration of such event of Force Majeure.

Article XI.
Notices

11.01                 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:  (a) personally delivered; (b) delivered and confirmed by telecopier or similar transmission service; (c) delivered by a reputable overnight courier delivery service; or

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(d) sent by certified United States mail (postage prepaid, return receipt requested), addressed as follows:

11.02                 Effective Date.  Any Notice given in the manner set forth in Section 11.01 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.

11.03                 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 11.01; provided, however, that no change of address Notice shall be effective until actually received by the other Party.

Article XII.
Applicable Law

12.01                 Applicable Law.  REGARDLESS OF THE PLACE OF CONTRACTING, PLACE(S) OF PERFORMANCE, OR OTHERWISE, THE PROVISIONS OF THIS AGREEMENT AND ALL AMENDMENTS, MODIFICATIONS, ALTERATIONS OR SUPPLEMENTS HERETO SHALL BE GOVERNED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OR ANY OTHER PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR INTERPRETATION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION.

Article XIII.
Confidentiality

13.01                 Confidentiality.  During the performance 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

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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:  (a) 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 (b) 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 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.

Article XIV.
Disputes Between the Parties

14.01                 Dispute Resolution.  THIS AGREEMENT, AND ANY ACTIONS, CLAIMS, DEMANDS OR SETTLEMENTS HEREUNDER, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO ANY CONFLICTS OF LAW PRINCIPLES WHICH MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS (AS APPLICABLE) LOCATED IN HOUSTON, TEXAS, AND TO ALL COURTS COMPETENT TO HEAR AND DETERMINE APPEALS THEREFROM, AND WAIVES ANY OBJECTIONS THAT A SUIT, ACTION OR PROCEEDING SHOULD BE BROUGHT IN ANOTHER COURT AND ANY OBJECTIONS TO INCONVENIENT FORUM.

Article XV.
Assignability

15.01                 Assignability.  This Agreement shall inure to the benefit of and shall be binding upon the Parties and their respective successors and assigns; provided, however, that neither this Agreement nor any of the rights, benefits or obligations hereunder shall be assigned, by operation of Law or otherwise, by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld.  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.

Article XVI.
Compliance with Laws

16.01                 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

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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, Company 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.

Article XVII.
Severability

17.01                 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.

Article XVIII.
Non-Waiver

18.01                 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.

Article XIX.
Entire Agreement; Amendments

19.01                 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.

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

Article XX.
Survival

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

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Article XXI.
Counterparts; Multiple Originals

21.01                 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.

Article XXII.
Construction

22.01                 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.

Article XXIII.
Article Headings; Exhibits

23.01                 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

23.02                 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.

[Signature page follows.]

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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.

Signature Page to Amended and Restated Operational Services Agreement

[Form of Amended and Restated Operational Services Agreement]

Exhibit A
Description of Operated Assets

Attached to and made a part of that certain Amended and Restated Operational Services Agreement (the “Agreement”), dated September [·], 2017, 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.

CushPo — a 18” crude oil pipeline extending from Phillips 66 Carrier LLC’s, Cushing Crude Terminal in Cushing, Oklahoma to Phillips 66 Carrier LLC’s Ponca Crude Terminal in Ponca City, Oklahoma.

Glacier Pipeline System — a multi-diameter crude oil pipeline system extending from the United States-Canadian border near Carway, Alberta to the Billings ExxonMobil Refinery in Billings, Montana.

Line O — a 10” crude oil pipeline extending from Phillips 66 Partners Holdings LLC’s Buxton Crude Terminal in Cushing, Oklahoma to the Borger Refinery located in Borger, Texas

Line WA — a multi-diameter crude oil pipeline extending from the Odessa Station near Goldsmith, Texas to the Borger Refinery located in Borger, Texas.

Line 80 — a 8” crude oil pipeline extending from Gains Station near Hobbs, New Mexico to the Borger Refinery located in Borger, Texas.

North Texas Gathering Pipeline System — a multi-diameter crude oil pipeline system that gathers products in the various fields of North Texas and transports products to the Wichita Falls Station in Wichita Falls, Texas.

Oklahoma Mainline Pipeline System - a 12” crude oil pipeline extending from the Wichita Falls Station in Wichita Falls, Texas to Phillips 66 Carrier LLC’s Ponca Crude Terminal in Ponca City Oklahoma.

West Texas Gathering —a multi-diameter crude oil pipeline system that gathers crude oil in the various fields of West Texas to supply Line WA and Line 80.

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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 in Borger, Texas to terminal facilities located in Wichita, Kansas; Paola, Kansas; Kansas City, Kansas; Jefferson City, Missouri; and Cahokia, Illinois.

Cross Channel Connector — a 20” refined products pipeline extending from the Pasadena Terminal in Pasadena, Texas to terminal facilities located at Kinder Morgan’s Pasadena Terminal and the Galena Park Station in Galena Park, Texas, and terminating at the Holland Avenue Junction in Galena Park, Texas.

Standish Pipeline — a 18” refined products pipeline extending from the Ponca City Refinery in Ponca City, Oklahoma to the Wichita North Terminal in Wichita, Kansas.

ATA Pipeline - a multi-diameter refined products pipeline extending from the Amarillo Terminal in Amarillo, Texas to the Albuquerque Terminal in Albuquerque, New Mexico.

BAM Pipeline — a multi-diameter refined products pipeline extending from the Borger Refinery in Borger, Texas to the Amarillo Terminal in Amarillo, Texas.

Cherokee East — a multi-diameter refined products pipeline system extending from the Ponca City Refinery in Ponca City, Oklahoma to terminal facilities in Jenks, Oklahoma and Mount Vernon, Missouri.

Cherokee North — a multi-diameter, two-leg refined products pipeline system extending from the Ponca City Refinery in Ponca City, Oklahoma to the Arkansas City Junction in Arkansas City, Oklahoma and the 21st Street Junction in Wichita, Kansas.

Cherokee South — a 8”, multi-leg refined products pipeline system extending from the Ponca City Refinery in Ponca City, Oklahoma to the Oklahoma City Terminal in Oklahoma City, Oklahoma, the Will Rogers Airport in Oklahoma City, Oklahoma and Tinker Air Force Base in Oklahoma City, Oklahoma.

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Medford Triangle — a multi-diameter, multi-leg refined products pipeline system extending from the Ponca City Refinery in Ponca City, Oklahoma to the Medford Storage Spheres in Medford, Oklahoma and the Oneok Terminal in Medford, Oklahoma.

SAAL Pipeline - a 6” refined products pipeline extending from the Amarillo Terminal in Amarillo, Texas to the Lubbock Terminal in Lubbock, Texas.

Seminoe Pipeline — a 8” refined products pipeline extending from the Billings Refinery in Billings, Montana to terminal facilities in Sheridan, Wyoming and Casper, Wyoming and to the Tisdale Junction and Sinclair Junction in Wyoming.

Other Pipelines

River Parish Pipeline System — a refined products pipeline system and associated facilities located in any one or more of the following nine (9) parishes: Ascension, Assumption, Iberville, Jefferson, Lafourche, Plaquemines, St. Charles, St. James, and St. John the Baptist, and including approximately 300 miles of multi-diameter pipeline (formerly the “Texaco Expanded NGL Distribution System” or “TENDS”), approximately eighty-six (86) miles of regulated pipeline comprised of one 8-inch to 20-inch diameter pipeline (formerly the “VP Pipeline”), and approximately one hundred thirteen (113) miles of regulated pipeline comprised of one 6-inch to 8-inch diameter pipeline (formerly the “EP Pipeline”).  The system includes approximately fifteen (15) miles of idled pipeline and segments of approximately ten (10) miles of 8-inch abandoned pipeline.

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 terminal ling 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 terminal ling 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.

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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.

Bayway Terminal. Bayway Terminal is located in Linden, New Jersey adjacent to the Bayway Refinery.  It consists of a four-track, 120 rail car crude oil receiving facility with a planned unloading capacity of 75,000 barrels per day that delivers crude oil to storage tanks at the adjacent refinery.

Ferndale Terminal. Ferndale Terminal is located in Ferndale, Washington adjacent to the Ferndale Refinery.  It consists of a two-track, 54 rail car crude oil receiving facility with a planned unloading capacity of 30,000 barrels per day that delivers crude oil to storage tanks at the adjacent refinery.

Albuquerque Terminal. Albuquerque Terminal is located in Albuquerque, New Mexico, adjacent to the ATA Pipeline. It consists of a three-bay truck rack with 232,000 barrels of total storage capacity.

Amarillo Terminal. Amarillo Terminal is located in Amarillo, Texas, adjacent to the BAM Pipeline, the SAAL Pipeline and the ATA Pipeline. It consists of a five-bay truck rack with 268,000 barrels of total storage capacity.

Billings Crude Terminal. Billings Crude Terminal is located in Billings, Montana, at the Phillips 66 Company Billings Refinery. It consists of 245,000 barrels of total storage capacity.

Buffalo Terminal. Buffalo Terminal is located near Buffalo Montana.  It consists of two meter skid units, three injection pumps and two crude tanks with approximately 300,000 barrels of total storage capacity.

Buxton Terminal.  Buxton Terminal is located in Cushing, Oklahoma.  It consists of two crude storage tanks with a total capacity of 400,000 barrels.

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Casper Terminal. Casper Terminal is located in Casper, Wyoming adjacent to the Seminoe Pipeline. It consists of a two bay-truck rack with 300,000 barrels of total storage capacity.

Cushing Terminal. Cushing Terminal is located in Cushing, Oklahoma.  It consists of one tank with a lease automatic custody transfer unit and two storage tanks with a total storage capacity of 220,000 barrels.

Glenpool Terminal.  Glenpool Terminal is located in Jenks, Oklahoma adjacent to the Cherokee East pipeline system. It consists of a two-bay truck rack with 514,000 barrels of total storage capacity.

Linden Terminal. Linden Terminal is located Linden, New Jersey.  It consists of a nine-bay refined products truck rack and a three-bay NGL truck rack with 331,000 barrels of refined products storage.

Lubbock Terminal. Lubbock Terminal is located in Lubbock, Texas adjacent to the SAAL Pipeline.  It consists of a three-bay truck rack with 176,000 barrels of total storage capacity.

Mount Vernon Terminal.  Mount Vernon Terminal is located in Mount Vernon, Missouri, adjacent to the Cherokee East pipeline system.  It consists of a four-bay refined products truck rack and a two-bay NGL truck rack with 359,000 barrels of refined products storage capacity and 118,000 barrels of NGL storage capacity.

Oklahoma City Terminal.  Oklahoma City Terminal is located in Oklahoma City, Oklahoma adjacent to the Cherokee South pipeline system. It consists of a four-bay truck rack with 290,000 barrels of total storage capacity.

Ponca City Terminal.  Ponca City Terminal is located in Ponca City, Oklahoma adjacent to the Ponca City Refinery. It consists of a two-bay refined products truck rack and a two-bay NGL truck rack with 2,500 barrels of refined products storage capacity.

Ponca Crude Terminal. Ponca Crude Terminal is located in Ponca City, Oklahoma.  It consists of three lease automatic custody transfer units and 15 above-ground crude oil storage tanks with approximately 1.2 million barrels of total storage capacity.

Sheridan Terminal. Sheridan Terminal is located in Sheridan, Wyoming adjacent to the Seminoe Pipeline. It consists of a two-bay truck rack with 94,000 barrels of total storage capacity.

Tremley Point Terminal. Tremley Point Terminal is located in Linden, New Jersey. It consists of a three-bay refined products truck rack, 1,400,000 barrels of total storage capacity and a dock facility consisting of two vessel berths.

Wichita South Terminal.  Wichita South Terminal is located in Wichita, Kansas adjacent to the Cherokee North pipeline system. It consists of 230,000 barrels of total storage capacity.

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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.

Clemens Facility. The Clemens Facility includes underground salt dome storage caverns for LPG storage, brine ponds, a leach plant, multiple buildings, associated pipes/pumps, water supply wells, associated properties, and off-site disposal wells. These facilities are located near Brazoria, Texas. Products produced at the Sweeny Fractionator are stored in the underground caverns and then transported via pipeline to the Freeport LPG Export Terminal or the Mount Belvieu market hub.

Sorrento Storage Facility. The Sorrento Storage Facility includes the Sorrento underground salt dome storage caverns, all pumps, topside facilities, and an out-of-service brine pit located in Ascension Parish, Louisiana. The caverns consist of one cavern in active LPG storage service, two inactive caverns, and one plugged and abandoned cavern.

Refinery and Natural Gas Liquid Facilities

Sweeny Fractionator. The Sweeny Fractionator is a Natural Gas Liquid fractionation facility located in Old Ocean, Texas, close to the Sweeny Refinery. The Sweeny Fractionator includes the associated cooling tower (G0054022) and flare (G0056044), the substation (G006010), and the offplots (G0068044). It processes y-grade (mixed natural gas liquids) and produces purity ethane, propane, isobutane, normal butane and natural gasoline (C5+) for sale in local petrochemical markets or to supply the Freeport LPG Export Terminal.

Merey Sweeny Coker Facility. The Merey Sweeny Coker Facility is comprised of a petroleum coke producing facility comprised of a vacuum dilation unit, a 58,000 bpd, two (2) train, four (4) coke drum delayed coker unit, flare, cooling tower with five (5) bays, instrument air skid with

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two compressors, underground facilities for firewater and sewer services, and tanks for intermediate storage of vacuum resid at the solid waste disposal facility located within the Sweeny Refinery Complex near Old Ocean, Texas. Incoming atmospheric resid feed is processed through heaters and coke drums to produce coke for sale in local markets. Other products separated from the resid during the coke producing process are sent for further processing in other facilities in the Sweeny Complex.

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Exhibit B
Maintenance Services

Attached to and made a part of that certain Amended and Restated Operational Services Agreement (the “Agreement”), dated September [·], 2017, by and among Phillips 66 Carrier LLC, Phillips 66 Partners Holdings LLC and Phillips 66 Pipeline LLC

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

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

(c)                                  Maintenance and repair of the Operated Assets 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 Operated Assets, including, without limitation, periodic testing, adjustment and maintenance of the Operated Assets, in each case in accordance with prudent maintenance practices and applicable Laws.

(e)                                  Implementation of a tank maintenance and integrity program for the Operated Assets, 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 Operated Assets, 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 Operated Assets, which records and logs shall be made available to Company upon request.

(h)                                 Reconstruction, reconditioning, overhaul or replacement of the Operated Assets.

(i)                                     Establishment of safety, health, environmental, training, emergency response, spill response and other programs in connection with the maintenance and repair of the Operated Assets, 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 Operated Assets performance, upgrading the Operated Assets, repairing the Operated Assets 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

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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 Operated Assets.

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

(n)                                 Advise Company of major plans or significant changes in the maintenance or repair of the Operated Assets.

(o)                                 Close pipeline valves in connection with a response to any emergency affecting the Operated Assets. 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 Operated Assets 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 Operated Assets, or any appurtenances thereto, will be corrected by Operator. Operator will provide inspectors for monitoring work performed by others in the vicinity of the Operated Assets.

(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.

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Exhibit C
Operating Services

Attached to and made a part of that certain Amended and Restated Operational Services Agreement (the “Agreement”), dated September [·], 2017, by and among Phillips 66 Carrier LLC, Phillips 66 Partners Holdings LLC and Phillips 66 Pipeline LLC

(a)                                 Day-to-day routine and emergency supervision of the operation of the Operated Assets.

(b)                                 Operation of the Operated Assets’ 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 Operated Assets, which records and logs shall be made available to Company upon request.

(d)                                 Operator shall perform monitoring and control services (SCADA) for the pipelines included in the Operated Assets. 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 Operated Assets 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 Operated Assets 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 Operated Assets 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 Operated Assets.

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

(j)                                    Operation of the Operated Assets’ rail car receiving facilities within such operating parameters and specifications as may be in accordance with sound engineering and operating practices and applicable Laws.

(k)                                 Perform rail car inspections at Operated Assets, where applicable. For rail cars owned by Operator or its Affiliates, perform onsite running repairs on the following: break shoes and keys, air hose and air hose hangers, end running board welds, end still weld and loose platforms, knuckles, lock blocks, thowers, pins, cotter key replacement in break rigging, replacement of top and bottom outlet cover secure chains, replacement and/or securing of appliance bolts, securing of bottom and top railing, air hose replacement, tool tighten and torque packing nuts, manway gaskets, handhold, sill steps and end and side rails.

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

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Exhibit D
Administrative Services

Attached to and made a part of that certain Amended and Restated Operational Services Agreement (the “Agreement”), dated September [·], 2017, by and among Phillips 66 Carrier LLC, Phillips 66 Partners Holdings LLC and Phillips 66 Pipeline LLC

(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 Operated Assets 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.

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Exhibit E
Construction Services

Attached to and made a part of that certain Amended and Restated Operational Services Agreement (the “Agreement”), dated September [·], 2017, by and among Phillips 66 Carrier LLC, Phillips 66 Partners Holdings LLC and Phillips 66 Pipeline LLC

(a)                                 Construction, reconstruction, reconditioning, overhaul and replacement of Operated Assets 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.

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Exhibit F
Accounting Procedures

Attached to and made a part of that certain Amended and Restated Operational Services Agreement (the “Agreement”), dated  September [·], 2017, by and among Phillips 66 Carrier LLC, Phillips 66 Partners Holdings LLC and Phillips 66 Pipeline LLC

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

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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.

(i)                                     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 Operated Assets, 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.

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(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 Operated Assets.

(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 Operated Assets and related facilities, periodically inspect the Operated Assets for damages or other conditions that could affect the safe, efficient and economical operation of the Operated Assets, and perform such repairs to the Operated Assets 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,

[Form of Amended and Restated Operational Services Agreement]

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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 Operated Assets.  To the extent not covered by insurance, all costs or expenses necessary for the repair or replacement of the Operated Assets 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 Operated Assets 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.

[Form of Amended and Restated Operational Services Agreement]

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Exhibit G
Coverage of Louisiana Workers’ Compensation Law

Attached to and made a part of that certain Amended and Restated Operational Services Agreement (the “Agreement”), dated September [·], 2017, by and among Phillips 66 Carrier LLC, Phillips 66 Partners Holdings LLC and Phillips 66 Pipeline LLC.

The following provisions and terms shall apply in all cases where employees of Operator and its Affiliates (“employees” defined to include direct, borrowed, special, seconded or statutory employees) are covered by the Louisiana Workers’ Compensation Law, Louisiana Revised Statutes (“La. R.S.”) 23:1021 et seq, as to Work or services performed under this Agreement:

1.             In all cases where employees (as defined above) are covered by the Louisiana Workers’ Compensation Law, La. R.S. 23:1021 et seq., Company and Operator agree that the work and operations performed by Operator and its employees pursuant to the Agreement are an integral part of and are essential to the ability of Company and its Affiliates to generate goods, products and services, and that Operator’s work and services shall be considered part of Company’s and its Affiliates  trade, business, and occupation, for purposes of La. R.S. 23:1061. Furthermore, Company and Operator agree that Company and its Affiliates are the principal or statutory employer of Operator’s employees for purposes of La. R.S. 23:1061 only. Irrespective of Company’s and its Affiliates’ status either as the principal or statutory employer or as the special employer (as defined in La. R.S. 23:1031) of Operator’s employees, and regardless of any other relationship or alleged relationship between Company and Operator’s employees, Operator shall be and remain at all times primarily responsible for the payment of Louisiana workers’ compensation benefits to such employees. This Exhibit is limited to and shall apply only in and to the extent of instances involving coverage of the Louisiana Worker’s Compensation Law.

2.             Notwithstanding any other provision of this Agreement, Operator shall, in addition to and without limitation of other insurance requirements, under all circumstances cause insurance described in Article VII  of the Agreement to be endorsed to designate, protect, and insure Company and its Affiliates in any employment or alleged employment capacity including, but not limited to, as an alternate employer, as a principal and statutory employer, as a borrowing or “special” employer, as a seconded employer and as a maritime employer against all claims whatsoever, whether for workers’ compensation benefits, maintenance and cure, wages, death benefits, disability, or otherwise, related to employment or use of Operator’s employees or any other workers furnished by Operator to perform work under this Agreement  and shall cause such insurers and their underwriters to waive unconditionally any rights of subrogation against Company and its Affiliates.

[Form of Amended and Restated Operational Services Agreement]

EXHIBIT B

FORM OF ASSIGNMENT OF INTERESTS

Exhibit B

ASSIGNMENT OF EQUITY INTERESTS

PHILLIPS 66 DE HOLDINGS 20A LLC

PHILLIPS 66 DE HOLDINGS 20B LLC

PHILLIPS 66 DE HOLDINGS 20C LLC

PHILLIPS 66 DE HOLDINGS 20D LLC

PHILLIPS 66 DE PRIMARY LLC

MEREY SWEENY L.P.

SWEENY COKER, L.L.C.

THIS ASSIGNMENT OF EQUITY INTERESTS (this “Agreement”) is made effective as of October 1, 2017 (the “Effective Time”), by and between Phillips 66 Company, a Delaware corporation (“P66 Company”), Phillips 66 Project Development Inc., a Delaware corporation (“PDI”), Phillips 66 Partners GP LLC, a Delaware limited liability company (the “General Partner”), Phillips 66 Partners LP, a Delaware limited partnership (the “Partnership”), and Phillips 66 Partners Holdings LLC, a Delaware limited liability company (“Holdings”).  Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Contribution Agreement (as defined below).

RECITALS

WHEREAS, reference is made to that certain Contribution, Conveyance and Assumption Agreement (the “Contribution Agreement”), dated as of September [  ], 2017, by and among P66 Company, PDI, the General Partner and the Partnership;

WHEREAS, PDI is the sole member of each of Phillips 66 DE Holdings 20A LLC (formerly known as Phillips 66 PDI Sub 20 LLC), a Delaware limited liability company (“DE A LLC”), Phillips 66 DE Holdings 20B LLC (formerly known as Phillips 66 PDI Sub 24 LLC), a Delaware limited liability company (“DE B LLC”), Phillips 66 DE Holdings 20C LLC (formerly known as Phillips 66 PDI Sub 25NV LLC), a Delaware limited liability company (“DE C LLC”), Phillips 66 DE Holdings 20D LLC (formerly known as Phillips 66 PDI Sub 26 LLC), a Delaware limited liability company (“DE D LLC”), and Phillips 66 DE Primary LLC (formerly known as Phillips 66 PDI Sub 25V LLC), a Delaware limited liability company (“DE P LLC” and, together with DE A LLC, DE B LLC, DE C LLC and DE D LLC, the “DE LLCs”);

WHEREAS, reference is made to (a) that certain Limited Liability Company Agreement of Phillips 66 PDI Sub 20 LLC, dated October 13, 2014 (the “DE A LLC Agreement”); (b) that certain Limited Liability Company Agreement of Phillips 66 PDI Sub 24 LLC, dated October 9, 2014 (the “DE B LLC Agreement”); (c) that certain Limited Liability Company Agreement of Phillips 66 PDI Sub 25NV LLC, a Delaware limited liability company, dated October 9, 2014 (the “DE C LLC Agreement”); (d) that certain Limited Liability Company Agreement of Phillips 66 PDI Sub 26 LLC, dated October 9, 2014 (the “DE D LLC Agreement”) and (e) that certain Limited Liability Company Agreement of Phillips 66 PDI Sub 25V, dated October 9, 2014 (the “DE P LLC Agreement”) (clauses (a) through (e), collectively, the “DE LLC Agreements”);

WHEREAS, P66 Company owns (a) all of the limited partner interests (the “MSLP Interests”) in Merey Sweeny, L.P., a Delaware limited partnership (“MSLP”), and (b) all of the

[Form of Assignment of Equity Interests]

limited liability company interests (the “Sweeny Coker LLC Interests”) in Sweeny Coker, L.L.C., a Delaware limited liability company and the sole general partner of MSLP (“Sweeny Coker LLC” and, together with the DE LLCs and MSLP, the “Contributed Entities”);

WHEREAS, reference is also made to (a) that certain Second Amended and Restated Limited Partnership Agreement of MSLP, dated June 18, 1999, as amended February 15, 2010 (as so amended the “MSLP Partnership Agreement”) and (b) that certain Second Amended and Restated Limited Liability Company Agreement of Sweeny Coker, L.L.C., dated June 18, 1999, as amended March 6, 2017 (as so amended, the “Sweeny Coker LLC Agreement” and, together with the DE LLC Agreements, the “LLC Agreements”);

WHEREAS, pursuant to this Agreement:

(a)           P66 Company desires to assign to PDI all of P66 Company’s right, title and interest in and to the MSLP Interests and the Sweeny Coker LLC Interests (collectively, the “P66 Company Assigned Interests”), and PDI desires to accept P66 Company’s assignment of such P66 Company Assigned Interests;

(b)           PDI desires to assign to the General Partner and the Partnership, collectively, all of PDI’s right, title and interest in and to (i) the P66 Company Assigned Interests and (ii) 100% of the limited liability company interests of each of the DE LLCs, and the General Partner and the Partnership desire to accept PDI’s assignment of such interests;

(c)           the General Partner desires to assign to the Partnership all of the General Partner’s right, title and interest in and to the interests transferred to it pursuant to this Agreement, and the Partnership desires to accept the General Partner’s assignment of such interests; and

(d)           the Partnership desires to assign to Holdings all of the Partnership’s right, title and interest in and to the interests transferred to it pursuant to this Agreement, and Holdings desires to accept the Partnership’s assignment of such interests;

WHEREAS, after giving effect to each of the assignments described in the recitals above, Holdings will own 100% of the P66 Company Assigned Interests and 100% of the limited liability company interests of each of the DE LLCs and will be (a) the sole member of Sweeny Coker, L.L.C. and each of the DE LLCs and (b) the sole limited partner of MSLP.

NOW, THEREFORE, in consideration of the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

1.             Assignment.

(a)           Effective as of the Effective Time, P66 Company hereby irrevocably assigns, transfers, and conveys to PDI all of its right, title and interest in and to the P66 Company Assigned Interests and all such rights and obligations associated with such interests as set forth in the MSLP Partnership Agreement, the Sweeny Coker LLC Agreement, the Delaware Limited Liability

[Form of Assignment of Equity Interests]

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Company Act (as amended, the “LLC Act”) and the Delaware Revised Uniform Limited Partnership Act (as amended, the “LP Act”), as applicable.

(b)           Effective immediately following PDI’s acceptance of the P66 Company Assigned Interests (the “PDI Interim Effective Time”), PDI hereby irrevocably assigns, transfers, and conveys:

(i)                                     to the General Partner:

(A)                               [  ]% of the limited liability company interests in each of the DE LLCs and all such rights and obligations associated with such interests as set forth in the DE LLC Agreements and the LLC Act;

(B)                               [  ]% of the limited liability company interests in Sweeny Coker LLC and all such rights and obligations associated with such interests as set forth in the Sweeny Coker LLC Agreement and the LLC Act; and

(C)                               [  ]% of the limited partner interests in MSLP and all such rights and obligations associated with such interests as set forth in the MSLP Partnership Agreement and the LP Act (clauses (A) through (C), collectively, the “Assigned GP Interests”); and

(ii)                                  to the Partnership:

(A)                               all of the remaining limited liability company interests in the DE LLCs and Sweeny Coker LLC and all such rights and obligations associated with such interests as set forth in the LLC Agreements and the LLC Act; and

(B)                               all of the remaining limited partner interests in MSLP and all such rights and obligations associated with such interests as set forth in the MSLP Partnership Agreement and the LP Act (clauses (A) and (B), collectively, the “Assigned LP Interests” and, together with the Assigned GP Interests, the “Assigned Interests”).

(c)           Effective as of immediately following the assignments described in Section 1(b)(i) (the “GP Interim Effective Time”), the General Partner hereby irrevocably assigns, transfers, and conveys to the Partnership all of its right, title and interest in and to the Assigned GP Interests, together with all such rights and obligations associated with such interests as set forth in the MSLP Partnership Agreement, the LLC Agreements, the LLC Act and the LP Act, as applicable.

(d)           Effective as of immediately following the assignments described in Section 1(b)(ii) and Section 1(c) (the “Partnership Effective Time”), the Partnership hereby irrevocably assigns, transfers, and conveys to Holdings all of its right, title and interest in and to the Assigned Interests, together with all such rights and obligations associated with such interests as set forth in the MSLP Partnership Agreement, the LLC Agreements, the LLC Act and the LP Act, as applicable.

[Form of Assignment of Equity Interests]

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2.             Acceptance, Assumption and Acknowledgment.

(a)           Effective as of the Effective Time, PDI hereby accepts P66 Company’s assignment of the P66 Company Assigned Interests pursuant to Section 1(a) and hereby acknowledges and agrees to be bound by the terms of the MSLP Partnership Agreement and the Sweeny Coker LLC Agreement as a limited partner of MSLP and as a member of Sweeny Coker LLC, respectively, and assumes and agrees to perform all of P66 Company’s agreements and obligations existing or arising with respect to the P66 Company Assigned Interests.

(b)           Effective as of the PDI Interim Effective Time, each of the General Partner and the Partnership hereby accepts PDI’s assignment of the Assigned GP Interests pursuant to Section 1(b)(i) and the Assigned LP Interests pursuant to Section 1(b)(ii), respectively, and hereby acknowledges and agrees to be bound by the terms of the MSLP Partnership Agreement and the LLC Agreements as a limited partner of MSLP and as a member of each of the DE LLCs and Sweeny Coker LLC, respectively, and assumes and agrees to perform all of PDI’s agreements and obligations existing or arising with respect to the Assigned GP Interests or Assigned LP Interests, as applicable.

(c)           Effective as of the GP Interim Effective Time, the Partnership hereby accepts the General Partner’s assignment of the Assigned GP Interests pursuant to Section 1(c) and assumes and agrees to perform all of the General Partner’s agreements and obligations existing or arising with respect to the Assigned GP Interests.

(d)           Effective as of the Partnership Effective Time, Holdings hereby accepts the Partnership’s assignment of the Assigned Interests pursuant to Section 1(d) and hereby acknowledges and agrees to be bound by the terms of the MSLP Partnership Agreement and the LLC Agreements as a limited partner of MSLP and as the sole member of each of the DE LLCs and Sweeny Coker LLC, respectively, and assumes and agrees to perform all of the Partnership’s agreements and obligations existing or arising with respect to the Assigned Interests.

3.             Effect of Assignments.

(a)           Effective as of the Effective Time and notwithstanding any provision of the MSLP Partnership Agreement or the Sweeny Coker LLC Agreement to the contrary: (i) PDI shall own the P66 Company Assigned Interests in accordance with this Agreement; (ii) PDI is hereby admitted as a limited partner of MSLP and as a member Sweeny Coker LLC, and this Agreement shall be included in the books and records of MSLP and Sweeny Coker LLC to reflect such admission; (iii) immediately following the admission of PDI as a limited partner of MSLP, P66 Company hereby ceases to be a limited partner of MSLP and ceases to have any right, title or interest in or to the the MSLP Interests and shall have no further obligations with respect to the MSLP Interests or otherwise under the MSLP Partnership Agreement; (iv) immediately following the admission of PDI as a member of Sweeny Coker LLC, P66 Company hereby ceases to be a member of Sweeny Coker LLC and ceases to have any right, title or interest in or to the Sweeny Coker LLC Interests and shall have no further obligations with respect to the Sweeny Coker LLC Interests or otherwise under the Sweeny Coker LLC Agreement; and (v) each of MSLP and Sweeny Coker LLC is hereby continued without dissolution.

[Form of Assignment of Equity Interests]

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(b)           Effective as of the PDI Interim Effective Time and notwithstanding any provision of the MSLP Partnership Agreement or any of the LLC Agreements to the contrary: (i) the General Partner and the Partnership shall own the GP Membership Interests and the LP Membership Interests, respectively, in accordance with this Agreement; (ii) the General Partner is hereby admitted as (A) a limited partner of MSLP and (B) a member of each of the DE LLCs and Sweeny Coker LLC, as applicable, with respect to the Assigned GP Interests, and this Agreement shall be included in the books and records of each of the Contributed Entities to reflect such admission; (iii) the Partnership is hereby admitted as (A) a limited partner of MSLP and (B) a member of each of the DE LLCs and Sweeny Coker LLC, as applicable, with respect to the Assigned LP Interests, and this Agreement shall be included in the books and records of each of the Contributed Entities to reflect such admission; (iv) immediately following the admission of the General Partner and the Partnership as limited partners or members, as applicable, of each Contributed Entity, PDI hereby ceases to be a limited partner or member, as applicable, of such Contributed Entity and ceases to have any right, title or interest in or to the Assigned Interests and shall have no further obligations with respect to the Assigned Interests or otherwise under the MSLP Partnership Agreement or the LLC Agreements; and (v) each of the Contributed Entities is hereby continued without dissolution.

(c)           Effective as of the GP Interim Effective Time and notwithstanding any provision of the MSLP Partnership Agreement or any of the LLC Agreements to the contrary: (i) the Partnership shall own the Assigned GP Interests in accordance with this Agreement; (ii) the General Partner hereby ceases to be a limited partner or member, as applicable, of such Contributed Entity and ceases to have any right, title or interest in or to the Assigned Interests and shall have no further obligations with respect to the Assigned Interests or otherwise under the MSLP Partnership Agreement or the LLC Agreements; (iii) the Partnership shall continue as the sole member of each of the Contributed Entities; and (iv) each of the Contributed Entities is hereby continued without dissolution.

(d)           Effective as of the Partnership Effective Time and notwithstanding any provision of the MSLP Partnership Agreement or any of the LLC Agreements to the contrary: (i) Holdings shall own the Assigned Interests in accordance with this Agreement; (ii) Holdings is hereby admitted as (A) a limited partner of MSLP and (B) a member of each of the DE LLCs and Sweeny Coker LLC, as applicable, with respect to the Assigned GP Interests, and this Agreement shall be included in the books and records of each of the Assigned Entities to reflect such admission; (iii) immediately following the admission of Holdings as a substitute limited partner or as a substitute member, as applicable, of each Contributed Entity, the Partnership hereby ceases to be a limited partner or member, as applicable, of such Contributed Entity, and ceases to have any right, title or interest in or to the Assigned Interests and shall have no further obligations with respect to the Assigned Interests or otherwise under the MSLP Partnership Agreement or the LLC Agreements; (iv) each of the Contributed Entities is hereby continued without dissolution; and (v) all references (A) to P66 Company in each of the MSLP Partnership Agreement and the Sweeny Coker LLC Agreement and (B) to PDI in each of the DE LLC Agreements, in each case are hereby deleted and “Phillips 66 Partners Holdings LLC” is hereby substituted in lieu thereof.

4.             Choice of Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the principles of conflict of laws of that state.

[Form of Assignment of Equity Interests]