# Unocal Pipeline Company v. BP Pipelines (Alaska) Inc., Conoco Phillips Transportation Alaska, Inc., and ExxonMobil Pipeline Co. > Texas Court of Appeals, 1st District (Houston) · September 15, 2015 URL: https://www.frixlaw.com/law-library/cases/4068646 ## Case - **Court:** Texas Court of Appeals, 1st District (Houston) - **Decided:** September 15, 2015 - **Precedential status:** Published - **Opinion:** Opinion - **Cited by:** 0 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4068646 ## Opinion text ACCEPTED 01-15-00266-CV FIRST COURT OF APPEALS HOUSTON, TEXAS 9/15/2015 11:43:07 AM CHRISTOPHER PRINE CLERK NO. 01-15-00266-CV IN THE FIRST COURT OF APPEALS FILED IN 1st COURT OF APPEALS HOUSTON, TEXAS HOUSTON, TEXAS 9/15/2015 11:43:07 AM CHRISTOPHER A. PRINE Clerk UNOCAL PIPELINE COMPANY Appellant, v. BP PIPELINES (ALASKA) INC., ET AL. Appellees AMENDED APPENDIX TO BRIEF OF APPELLANT UNOCAL PIPELINE COMPANY PART ONE OF TWO: APPENDIX TABS A-F ORAL ARGUMENT REQUESTED GIBBS & BRUNS, L.L.P. Mark A. Giugliano mgiugliano@gibbsbruns.com TBA No. 24012702 Anthony N. Kaim akaim@gibbsbruns.com TBA No. 24065532 J. Benjamin Bireley bbireley@gibbsbruns.com TBA No. 24076086 1100 Louisiana, Suite 5300 Houston, Texas 77002 Telephone: (713) 650-8805 Facsimile: (713) 750-0903 ATTORNEYS FOR APPELLANT, UNOCAL PIPELINE COMPANY CERTIFICATE OF SERVICE I certify that on the 15th day of September, 2015 I served a copy of the foregoing document upon the following attorneys of record via electronic filing: Michael V. Powell Elizabeth L. Tiblets Locke Lord LLP 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201 Fax: (214) 756-8520 mpowell@lockelord.com etiblets@lockelord.com Steven G. Reed Lara E. Romansic Steptoe & Johnson LLP 1330 Connecticut Avenue, N.W. Washington, D.C. 20036-1795 Fax: (202) 429-3902 sreed@steptoe.com lromansic@steptoe.com /s/ Mark A. Giugliano . Mark A. Giugliano AMENDED APPENDIX TO BRIEF OF APPELLANT UNOCAL PIPELINE COMPANY A. Final judgment of the trial court, CR629-630 B. Trial court order regarding DR&R, SCR4:2415-2417 C. Trial court order regarding “Shall Pay Claim,” SCR6:3687-3688 D. TAPS Agreement, CR60-164 E. TAPS Operating Agreement, CR524-571 F. Federal Right-of-Way, CR166-305 G. Alaska Right-of-Way, CR307-442 H. Trial court order striking evidence, SCR4:2529-2538 I. Remaining Owners’ Motion for Partial Summary Judgment Regarding DR&R, CR39-58 J. Unocal’s Cross-Motion for Partial Summary Judgment Regarding DR&R, SCR3:1074-1109 K. Remaining Owners’ Summary Judgment Reply Regarding DR&R, CR464- 522 L. Unocal Motion for Partial Summary Judgment Regarding “Shall Pay Claim,” SCR4:2539-2549 M. Remaining Owners’ Motion to Dismiss the “Shall Pay Claim,” SCR3:2665- 2674 N. Remaining Owners’ Opposition to Unocal’s Motion for Partial Summary Judgment on the “Shall Pay Claim,” SCR6:3645-3650 O. Final Environmental Impact Statement for Renewal of the Federal Grant of the Trans-Alaska Pipeline System Right-of-Way, SCR3:1477-1480 P. Trial court order severing and consolidating into one action the DR&R claims and Unocal’s “Shall Pay Claim,” CR622-627 Q. Mobil 1999 Sales Solicitation, SCR3:1482-1488 R. 1980 proposed amendment, SCR3:1519-1521 S. Sept. 10, 1980 Exxon letter regarding proposed amendment, SCR3:1523- 1525 T. Dec. 19, 1980 Exxon letter regarding proposed amendment, SCR3:1527- 1528 U. In re Mobil Alaska Pipeline Co., Dkt. No. P-00-8, Order No. 1 (RCA June 20, 2000), SCR3:1769-1776 V. BP Pipelines (Alaska) Inc., et al., 134 FERC ¶63020 (March 10, 2011), SCR3:1798-1804 W. Internal Revenue Service Closing Agreement, SCR3:1718-1733 X. Trial court order denying motion to compel arbitration, SCR3:1060 Y. Remaining Owners’ First Amended Counterclaim, SCR5:2689-2709 Z. 2010 Alyeska DR&R estimate, SCR5:2947-2953 AA. 2003 Fluor Daniel DR&R estimate, SCR6:3280, 3285, 3397, 3424, 3426, and 3427 APP. A Final judgment of the trial court (CR629-630) 2/26/2015 3:54:02 PM - Chris Daniel District Clerk Harris County Envelope No: 4302740 By: CHEVALIER, BEVERLY Filed: 2/26/2015 3:54:02 PM CAUSE NO. 2013-06244ÿ UNOCAL PIPELINE COMPANY, § § Plaintiff, § IN THE DISTRICT COURT OF v. § § HARRIS COUNTY, TEXAS § BP PIPELINES (ALASKA) INC., § 165th JUDICIAL DISTRICT CONOCOPHILLIPS TRANSPORTATION § ALASKA, INC., and § EXXONMOBIL PIPELINE CO., § § Defendants. § PROPOSED FINAL JUDGMENT For the reasons set forth in this Court’s May 14, 2014, Order, this Court hereby ADJUDGES, DECLARES, AND DECREES as follows: I. The Trans-Alaska Pipeline System (“TAPS") Agreement does not transfer Plaintiff Unocal Pipeline Company’s dismantlement, removal or restoration (“DR&R”) obligations (as described in the Right of Way Leases for TAPS with the United States of America and the State of Alaska) to the Defendants BP Pipelines (Alaska) Inc., ConocoPhillips Transportation Alaska, Inc., or ExxonMobil Pipeline Co. when Plaintiff Unocal Pipeline Company discontinues operations. 2. Plaintiff Unocal Pipeline Company’s claim seeking a declaratory judgment that ,![t]he Remaining Owners are required to assume unconditionally the obligations to perform or pay for the Dismantlement, Removal, or Restoration of TAPS arising from the undivided interest in TAPS the Remaining Owners are acquiring from withdrawing Owner, [Unocal Pipeline Company]’' is DENIED and DISMISSED WITH PREJUDICE. RECORDER S MEMORANDUM This msirumenl a ol pooi quality ! at the time of imaging I 629 3. For the reasons set forth in this Court's November 10, 2014, Order, Plaintiff Unocal Pipeline Company’s claim for declaratory relief that “[t]he Trans-Alaska Pipeline System Agreement entitles the Departing Owners to receive their proportion of Net Salvage Value if it is determined to be positive, but does not obligate them to pay any portion of Net Salvage Value to the Remaining Owners if it is determined to be negative” is DISMISSED WITHOUT PREJUDICE. 4. All relief not expressly granted herein is DENIED. This judgment is final, disposes of all parties’ claims in this cause number, and is immediately appealable. Costs are taxed against the party incurring same. SIGNED this the 47 day of JUDGE PRESIDING 2 630 APP. B Trial court order regarding DR&R (SCR4:2415-2417) Cause No. 2013-06244 UNOCAL PIPELINE COMPANY, § IN THE DISTRICT CO Plaintiff, § § v. § § HARRIS COUNTY, TEXAi c BP PIPELINES (ALASKA) INC., § .: (c) Remaining Expansion Capacity 13 (d) Payment of Costs 13 (e) Exercise of Completion Option 13 (f) Review of Capacity 13 (g) Second Expansion 14 6.7 Additional Terminal Tankage 15 (a) Upon Expansion 15 (b) At Election of Parties 15 (c) Revision of Terminal Tankage Ownership 15 (d) Terminal Tankage Costs 15 (e) Options Not Applicable 15 ARTICLE VII TRANSFER OF INTERESTS IN TAPS SECTION 7.1 Definitions 15 (a) Affiliate 16 (b) Enabling Agreement 16 (c) Enabling Party 16 (d) Equity Security 16 (e) New Corporation 16 (f) Owner 16 (g) Shareholder 16 (h) Throughput Agreement 16 12 Preferential Right to Purchase 16 (a) Transfer of a Direct Interest in TAPS 16 (b) Indirect Transfers of an Interest in TAPS 17 12 Transfers not Subject to a Preferential Right to Purchase 17 (a) Merger. Consolidation or Reorganization 17 (b) Sale of Assets 17 (c) Transfers to an Affiliate 17 (i) Undivided Interest in TAPS 17 (ii) Equity Securities 17 (d) Formation of a New Corporation 17 (i) New Corporation as OWNER 17 (ii) New Corporation owns Equity Securities of OWNERS 18 (e) Dissolution or Liquidation of a New Corporation 18 (i) New Corporation is OWNER 18 (ii) New Corporation Holds Equity Securities of OWNERS 18 (f) Partial Distributions by New Corporation 18 (i) New Corporation is OWNER 18 (ii) New Corporation Holds Equity Securities of OWNERS . 18 (g) Increase or Reduction in the Outstanding Equity Securities of a New Corporation 18 iii 63 Page 5 of 1 05 SECTION 7.4 Expansions and Exercise of Preferential Rights by New Corporations 18 7.5 Required Terms for Sale of any Equity Security 19 7.6 Transfer Procedure Upon Exercise of Preferential Right Upon Sale of Equity Securities 19 7.7 Terms for Financing Arrangements 20 7.8 Successors and Assigns 20 ARTICLE VIII TERM OF AGREEMENT SECTION 8.1 Initial Term 21 S.2 Discontinuance of Operations by One or More Parties 21 (a) Definitions and General Provisions 21 (i) Term Notice 21 (i!) Positive Term Notice 21 (lii) Negative Term Notice 21 (b) Notices of Parties' Desires 21 (i) First Term Notice 21 t (ii) Second Term Notice 21 (c) Readjustments 22 — (d) Rights of Parties Determination of Salvage Value (e) Conveyance to Parties Desiring to Continue Operations 22 22 (f) Sale in Lieu of Acceptance of Net Salvage Value 22 8.3 Disposition of Properties Upon Termination of Agreement 23 ARTICLE IX FDERAL INCOME TAX ELECTION SECTION 9.1 Election to be Excluded from Partnership Regulations 23 ARTICLE X PAYMENT or COSTS AND EXPENSES SECTION 10.1 Payment of Costs and Expenses 24 ARTICLE XI ARBITRATION SECTION 11.1 Arbitration Procedure 24 i iv 64 Page 6 of 1 05 ARTICLE XII TECHNICAL INFORMATION, INVENTIONS AND PATENTS PM. SECTION 12.1 Technical Information 25 LL2 Patent Infringement 25 12.3 Inventions by Third Parties 25 12.4 Inventions by Parties 26 12JS Party Employees 28 12.6 Loaned Employees 26 12.7 Own Operations 27 12.8 Term 27 12.9 Associated Companies 27 ARTICLE XIII MINERAL DISCOVERIES SECTION 13.1 Mineral Discoveries 27 ARTICLE XIV GENERAL PROVISIONS SECTION 14.1 Notices 28 142 Laws and Regulations 28 14.3 Warranties 28 14.4 Law Governing 29 145 Entirety of Agreement 29 14.6 Captions or Headings .v»V 29 14.7 Effect of Prior Agreements 29 14.8 Establishment of Date of Commissioning 29 14.9 Counterparts 29 Exhibit A Map Exhibit B Construction Committee Exhibit C Enabling Agreement v 65 Page 7 of 1 05 INDEX OF DEFINITIONS TAPS Agreement Terra P ) Agreement 1 Date of this Agreement 1 Atlantic I BP 1 Humble 1 Amerada Hess 1 Home 1 Mobil 1 Pt. Corporation holds Equity Securities of OWNERS. The transfer by a New Corporation of dm type described in Subdivision 7.3(d) (U) to its Shareholders in proportion to their Equity Security interests in such New Corporation, of all of the Equity Securities of OWNERS held by such New Corporation in complete liquidation or dissolution thereof. (f) Partial Distributions by New Corporations. (I) New Corporation is OWNER. The conveyance by a New Corporation of the type described in Subdivision 7.3(d)(1) to one or more of Its Shareholders of the undivided interest in TAPS represented by the Equity Securities exchanged therefor or redeemed by such New Corporation; provided that the undivided interest in TAPS is acquired by the Shareholder for the purpose of sale if, after such conveyance, the Shareholder continues to own Equity Securities Issued by such New Corporation. (U) New Corporation holds Equity Securities of OWNERS. The transfer by a New Cor¬ poration of the type described in Subdivision 7.3(d) (U) to one or more of its Shareholders of the Equity Securities of on OWNER held by such New Corporation represented by the Equity Securities of the New Corporation exchanged therefor or redeemed by such New Corporation. ( g) Increase or Reduction in the outstanding Equity Securities of New Corporation. Except in connection with the eserrise of an expansion ngbt or preferential right by a New Corporation or one or more of its Subsidiaries, as provided in Section 7.4 hereafter, the increase or reduction bv a New Corporation of its issued and outstanding Equity Securities in a manner which does not vary the proportionate interests of the Shareholders of such New Corporation of either type described in Subdivision 7.3( d ) above. 7.4 Expansion* and Exercise of Preferential Rights by Nrw Corporations. In connection with the exercise of an expansion right or a preferential right by a New Corporation of either type described 18 85 Page 27 of 105 is Subdivision 73(d) or oaf or more of it* Subsidiaries, such New Corporation shall issue, repurchase or redeem its Equity Securities if necessary for th# purpose of adjusting the ownership Interest In *ueh New Corporation, so that after such adjustment a Shareholder or other holder of Equity Securities in such New Corporation shall own Equity Securities In such New Corporation representing the undivided interest in TAPS that such Shareholder or other holder of Equity Securities would have owned ii it had been the OWNER of its Initial Percentage of Ownership in TAPS as set forth tn column (2) of Table I in Section 3.1 of this Agreement and had exercised (or failed to exercise) its preferential rights and expansion rights as an OWNER of such an undivided interest in TAPS. In making such adjustment it wlR not be necessary that the voting rights of a Shareholder or other bolder of Equity Securities In such New Corporation be increased or decreased. The preferential right to purchase created in Section 73(b) shall not apply to any such issuance, repurchase or redemption of the Equity Securities of a New Corporation. 7.S Required Terms for Sale of any Equity Security. As an additional term of any sale, transfer or other disposition of any Equity Security to which a preferential right to purchase applies, the seller shall require the purchaser to assume, to the extent of the Interest being acquired, the obligations and liabilities of the seller and/or iu Affiliates under the terms and provisions of any Throughput Agreement theretofore executed by nidi seller and/or its Affiliates. If the purchaser has a Moody’s Bond Rating of Ana or better at the time of dosing of such purchase (either independently, or with a guarantee by its Parent Corporation), then such assumption (together, if the Parent Corporation’s guarantee is essentia) to such bond rating, with such further agreements of such Parent Corpora tic® as will bind such Parent Corporation to cause and enable such purchaser to discharge the obligations and liabilities assumed) shall, ii the Throughput Agreement so provides, release the idler and/or its Affiliates from such obligations and liabilities without the consent of ary party to such Throughput Agreement. If the purchaser does not ( either independently, or with a guarantee by its Parent Corpo¬ ration) have a Moody’s Bond Rating of Aaa or better at the time of closing of such purchase, then such assumption shall not release the seller and/or Its Affiliates from such obligations and liabilities under any such Throughput Agreement without the consent of all parties to such Throughput Agreement and their rercetion and assigns and. in the absence of any such release, such purchaser shall agree to indemnify ( together with such further agreements of the purchaser's Parent Corporation, if any. at will bind such Parent Corporation to cause and enable such purchaser to perform under such indem¬ nity agreement) the teller and/or its Affiliates against any low or liability occurring thereafter U a result of the purchaser's failure to discharge the obligations snd liabilities assumed. 7.6 Transfer Procedure Upon Exercise of Preferential Right Upon Sole of Equity Securities. Every OWNER exercising a preferential right to purchase an undivided interest in TAPS upon the sale, transfer or other disposition of Equity Securities shall in addition to paying the offering price of the Equity Securities, assume that portion of the long-term indebtedness attributable, at the time of closing of luch purchase, to the undivided interest in TAPS being acquired and, to the extent of the Interest being acquired, the obligations and liabilities of the seller of such Equity Securities and/or Its Affiliates under the terms and provisions of any Throughput Agreement theretofore executed by such seller and/or Us Affiliates. If the exercising OWNER has a Moody's Bond Rating of Aaa or better at the time of doting of such purchase (either independently, or with a guarantee by its Parent Corporation), then the assumption by said OWNER (together, if the Parent Corporation's guarantee is essential to such bond rating, with such further agreements of such Parent Corporation as will bind such Parent Corporation to cause and enable such OWNER to discharge the obligations and liabilities assumed ) shall if the terms of such long-term indebtedness and the Throughput Agreement so pro¬ ride respectively, release the obligor of such long-term indebtedness and the seller and/or its Affiliates under taid Throughput Agreement without the consent of any holder of such indebtedness or any party to said Throughput Agreement. If the exercising OWNER does not (either independently, or with a guarantee of its Parent Corporation) have a Moody’s Bond Rating of Aaa or better at the time of closing of such purchase, then such assumption shall not release the obligor of such long-term 19 86 Page 28 of 105 indebtedness or the cellar and/or its Affiliates from such obligations »nH liabilities under any such Throughput Agreement without the respective consents of the holders of such indebtedness and the parties to such Throughput Agreement and their successors and assigns and, in the absence of any such release, such OWNER shall agree to indemnify (together with such further agreements of the OWNER'S Parent Corporation, if any. as will bind such Parent Corporation to cause and enable such OWNER to perform under such Indemnity agreement) the obligor of such long-term indebtedness and the seller and/or its Affiliates which are parties to such Throughput Agreement against any loss or liability occurring thereafter as s result of the OWNER'S failure to pay the long-term indebtedness or to discharge the obligations and liabilities assumed. If the long-term indebtedness can be prepaid, then the exercising OWNER may elect to prepay such indebtedness. In which event such OWNER will not be required to assume such long-term indebtedness or any obligation under a Through¬ put Agreement. The seller may elect to (a ) make arrangements to as to b« able to convey, and to convey, directly to such OWNER an undivided Interest in TAPS, or (b) cause sad enable such undivided interest to be conveyed to such OWNER, or (c) transfer the appropriate number of Equity Securities to such OWNER, whereupon such OWNER shall immediately exchange such Equity Securities for such undivided interest; provided such seller shall be responsible far and shall indemnify such OWNER against any federal or state income tax liability directly resulting from suds transfer or exchange in excess of any such tax liability upon such OWNER which would have been incurred as a result of transfers under (a) and (b) above. 7.7 Terns for Financing Arrangements. Each OWNER, for itself and its respective successors and assigns, agrees that it shall: (a) Maks reasonable efforts to exclude from any agreement provisions which would prohibit the transfer of Equity Securities or an undivided interest in the System in the manner provided herein to an OWNER exercising its preferential rights hereunder. (b) Include in any long-term indebtedness, the proceeds of which are to be used for the purpose of financing an OWNER'S undivided interest to TAPS, and to any associated Throughput Agreement terms and provisions authorising any purchaser having a Moody's Bond Rating of Aaa or better at the time of dosing of such purchase ( either independently, or with a guarantee by its Parent Corporation ) (i) to assume such long-term indebtedness and thereby release the obligor without the consent of any holder of such indebtedness, (if) to assume the obligations and liabilities under say associated Throughput Agree¬ ment and thereby release the seller and/or its Affiliates from such obligations and liabilities in such Throughput Agreement without the consent of any party to such Throughput Agree¬ ment; and (c) Make reasonable efforts to include as a term of all long-term indebtedness, the proceeds of which are to be used for the purpose of financing an OWNER'S undivided interest to TAPS, a prevision permitting such indebtedness to be payable at any time without any additional cost, penalty or other expense by an OWNER exerasing a preferential ngbt pursuant to Section 7.8. 7.8 Successors and Assigns. In the event that any OWNER hereafter causae all or any part of its undivided interest in TAPS to be transferred to an Affiliate or all of Its undivided interest to TAPS to be transferred to a New Corporation or die Equity Securities of OWNERS are transferred by their Parent Corporations to a New Corporation, then the transferor shall execute an F.naMtng Agreement with respect to such Affiliate or New Corporation; provided, that any such transferor's obligations under the Enabling Agreement as to a New Corporation shall be to the proportion that its Equity Security ownership to such New Corporation bean to the total Equity Security ownership to such New Corporation. 20 87 Page 29 of105 Any transfer of an undivided interest in TAPS shall be subject to this Agreement and shall require the transferee to assume all of the obligations of an "OWNER” and a Party under this Agreement and all commitments made pursuant hereto and its proportionate part of all costs and expenses of TAPS. Any such transferee shall be deemed to be an OWNER and a Party under this Agreement upon (1) the execution by such transferee of a Ratification Agreement confirming and adopting this Agreement and (u) the execution of an Enabling Agreement by a Parent Corporation, if any, of such transferee. ARTICLE Vm TERM or ACKZEMZNT 8.1 Initial Term. This Agreement shall be in effect from the Date of this Agreement and until the expiration of thirty (30) years from the Date of Commissioning, with successive five (5) year renewal terms thereafter so long as at least two Parties hereto desire to continue operations here¬ under. Such initial thirty (30) year term and any such successive five (S) year renewal term are each hereinafter sometimes referred to as an 'Agreement Term." If, at the end of any Agreement Term, less than two Parties desire to continue operations hereunder, this Agreement shall terminate 8.2 Discontinuance of Operations by One or More Parties. If at the expiration of any Agree¬ ment Term, any one or more of the Parties hereto desire to discontinue operations hereunder and any two Parties hereto desire to continue operations hereunder, then the following shall apply: (a) Definitions and General Provisions. As used in this Section 8-2, the following terms shall have the respective meanings indicated: (i ) “Tern Notice' means a wntten notice stating whether or not the Party giving same desires to continue or discontinue operations hereunder for the next succeeding Agreement Term, (11) ‘Positive Term Notice* means a written notice that the Party giving same desires to continue operations hereunder for the next succeeding Agreement Term, and (lii) ‘Negative Term Notice' means a written notice that the Party giving same does not desire to continue operations hereunder for the next succeeding Agreement Term. All Term Notices (whether positive or negative) given pursuant to this Section 8.2 shall be given to Operator and to all the other Parties hereto. If any Party who is required by the provisions of this Section 8.2 to give a Term Notice fails to give same within the applicable time limit herein provided for. then as of the end of the last day upon which such Party could have given such Term Notice in compliance with this Section 8.2, such Party shall be deemed for all pur¬ poses under this Section to have given a Positive Term Notice. (b) Notice of Parties' Desires. Prior to the expiration of each Agreement Term, the Parties hereto shall give Term Notices in accordance with the following: (1) Firsi Term Notice. Not less than ninety (90) days prior to the expiration of each such Agreement Term, each Party hereto shall give a Term Notion. If such notice is a Negative Term Notice, it shall be final and may not be changed or revoked without the written consent of all Parties hereto. ( li) Second Term Notice. If one or more Parties hereto so give a Negative Term Notice pursuant to Subdivision (1) next above, then not less than eighty (80) days prior to the expiration of the then current Agreement Term, Operator shall give written notice of such fact to the Party or Parties hereto who have given a Positive Term Notice, specifying the Party or Parties who have given a Negative Term Notice. In such event, then not less then seventy (70) days prior to the expiration of the then current Agreement Term, each Party 21 88 Page 30 of 105 who hot previously given * Poritfv* Tom* Node* may recotuxW whether or not It desires to continue operations hereunder for the next succeeding Agreement Term, And shell give to Operator Another Term Notice (width mey be either pa*ittve or negativo, *t such Party's option), ecd «oy Negative Term Notice so given by any such party shall be final and shall supersede and replace the Positive Term Notice previously given by such Party (e) Readjustments. If. as of sixty (00) days prior to the expiration of the then current Agreement Term, at least two of the Parties hereto have given Positive Trim Notices which have not been replaced or superseded by Negative Term Notice* pursuant to subdivision (b) of this Section 8.2, this Agreement shall continue tn effect for the next suooeeding Agreement Term. Upon the completion of all transfers of undivided interest in TAPS, the Parties desiring to con¬ tinue operations hereunder shell formally amend Table ! in Section 3.1 of this Agreement to reflect the Percentages of Ownership in TAPS each has aapiired from the Party or Parties desiring to discontinue operations. — (d) flight* of Parties Determination of Saluege Value. The Parties desiring to continue operations hereunder may do so following the applicable Agreement Term, but the Pasty or Parties who have elected not to continue operations hereunder shall not be charged with any past of the expenses, costs and habtlltiee thereafter incurred in the operation, maintenance and repair of TAPS except as provided in rubsection (f) hereof, and such Party or Parties discontinuing operations hereunder shall not be entitled to accept any further tenders for shipment. All Parties owning an interest in TAPS shall endeavor mutually to agree within sixty ( 00) days alter ter¬ mination of the applicable Agreement Term, upon the reasonable net salvage value of the TAPS properties, including transferable interests in land, material, equipment and all other items of value (herein called *Net Salvage Value'), and if such Parties are unable to mutually agree upon such salvage value within the time fixed, then the matter shall be submitted to arbitration, using the procedure set forth In Section 11.1 hereof. (e) Conveyance to Partin Dutring to Continue Operations. Upon establishing the Net Salvage Value as above provided, the Parties desiring to continue operations shall pay to the Party or Pasties desiring to discontinue operations Its or their proper proportion of such Net Salvage Value (such proper proportion being determined aa to each Party deairing to discontinue opera¬ tions hereunder by multiplying such Party's Percentage of Ownership times the Net Salvage Value) and upon receipt of such payment, such Party or Parties shall convey to the purchasing Parties >11 of Its or their interest in TAPS and all rights in connection therewith. Such convey¬ ance shall contain a special warranty of title, shall be made subject to this Agreement and shall require the transferees to assume the obligations accruing under this Agreement subsequent tn the lost day of the Agreement Term during which such Party or Parties made the election to discontinue operations hereunder as to the interest covered thereby, each transferee severally Assuming such obligations insofar as they relate to the interest acquired by it. Unless otherwise agreed between them at the time, it is understood that, as between the Parties desiring to continue operation of TAPS hereunder, they shall purchase and own the interest of the Party or Pvties desiring to discontinue such operation in the ratio that each purchasing Pasty’s Percentage of Ownership tn TAPS prior to the purchase bears to the total of all of the purchasing Parties’ Per¬ centages of Ownership in the System prior to such purchase. (I) Sole ARTICLE XIII McKERsi DUCOYTJOTS 13.1 Mineral Discoveries. Any information or data pertaining to the existence or discovery of 1 minerals or other natural resources which is revealed, discovered or observed in the construction of the System, or arising in connection therewith, shall be deemed the common property of all Parties and held by each and every Party for the benefit of all Parties. Any mineral rights, mining claims and 1 other similar rights in minerals or other natural resources excepting, however, rights in oil and gas located within five (5) miles from the perimeter of anv area of construction of the System, acquired, directly or indirectly, as a result of information or data obtained as above provided, hv any i one or more of the Parties, within three (3) yean from the completion of the construction of the Initial Design Capacity, nr within three (3) yean from termination of any governmental withdrawal of the affected land from mineral location or leasing, whichever is the later date, shall be held for the benefit of all of the Parties in their respective Percentages of Ownership; provided, however, that .1 in no event shall such requirement apply to any acquisition made after ten (10) yean from said completion of construction. Upon request, such rights or interests shall be transferred, in undivided Interests, to all of rh« Parties in their respective Percentages of Ownership at the time of any such J discovery as soon as practicable after the time of any such acquisition, subject to reimbursement to the acquiring Party of respective, proportionate shares of acquisition costs. All core samples, survey data and other mineral and natural resource information obtained by the Contractor shall, if requested by them, bo made available to each of the Parties. J 27 94 Page 36 of 105 ARTICLE XIV GENERAL PROVISIONS 14.1 Notices. Except u provided in Subsections (b) and (c) of Section IX all notices provided for in this Agreement shall be given by letter or telegram addressed to Party or Parties as may be required for the particular notice, at its or their addresses stated below, or such other addresses as they may hereafter provide by letter or telegram addressed to each of the Parties: ATLANTIC Atlantic Pipe Line Company 600 Fifth Avenue New York, New York 10020 BP (Duplicate Notice) BP Pipe Line Corporation Midland Building Cleveland, Ohio 44115 BP Alaska Inc. 270 Park Avenue New York, New York 10017 HUMBLE Humble Pipe Line Company P.O. Box 2220 Houston. Texas 77001 AMERADA HESS Amerada Hess Corporation One Hess Plaza Woodbridge, New Jersey 07095 HOME Home Pipe Line Company 304 Sixth Avenue, S.W. Calgary 1, Alberta, Canada MOBIL Mobil Pipe Line Company P.O. Box 900 Dallas. Texas 75221 PHHUPS Phillips Petroleum Company Supply & Transportation Dept. Bartlesville, Oklahoma 74003 UNION Union Oil Company of California P.O. Box 7000 Los Angeles, California 90054 The depositing in the United States Mail of a letter properly addressed with proper postage affixed and the filing of a telegram with the telegraph office with all charges prepaid shall each be considered proper notice to the addressee of the contents of such letter or telegram. 14.2 Laws and Regulations. In the event any provision hereof shall be found to be violative of any order, rule, regulation, or law, such provision shall be deemed modified to the extent necessary to comply with such order, rule, regulation, or law, but only for the period of time such order, rule, regulation, or law is in effect. 143 Warranties. Each Party hereby represents and warrants to each other Party that it is a corporation duly organized and validly existing and in good standing under the laws of the jurisdic¬ tion of its incorporation and has all requisite corporate power and authority to enter into this Agree¬ ment; and that there is no action or proceeding pending or threatened, and no term or provision of any charter, by-law, mortgage, indenture, contract, judgment or decree which prevents or interferes with its entering into this Agreement or the validity of this Agreement. 28 95 Page 37 of105 u 14.4 Law Governing. All matters hereunder pertaining to rights and obligations under rights- of-way and other land permits shall be governed by the laws of the State of Alaska or the laws of the United States of America, as the case may be. All other matters pertaining to this Agreement and the rights and obligations of the Parties hereunder as between themselves shall be governed by and construed in accordance with the laws of the State of Texas. 14.5 Entirety of Agreement This Agreement constitutes the entire agreement among the Parties as to ownership of TAPS; arid no variation, modification or change herein shall be binding upon any : of them unless effectuated by an Instrument in writing properly executed by all Parties hereto. 14.6 Captions or Headings. The headings appearing at the beginning of each Section hereof and at the beginning of various of the Subsections and subdivisions hereof are all inserted and the 'Table of Contents" and the "Index to Definitions" appearing at the beginning of this Agreement are both included solely for convenience and none of them shall be considered or given any effect in construing this Agreement or any provision or provisions hereof, whether for the purpose of deter¬ mining the duties, obligations or liabilities of the Parties, or their intent as to any issue, matter or question which may arise. 14.7 Effect of Prior Agreements. This Agreement supersedes all prior agreements, understand¬ ings, and commitments whether oral or in writing (including but not limited to agreements dated Mi October 28, 1968, February 7, 1969, and November 18, 1969 by and among some or all of the Parties hereto), between the Parties concerning the subject matter herein, and all of such prior agreements and understandings with respect to the subject matter herein are merged into this Agreement. -J 14.8 Establishment of Date of Commissioning. As used in this Agreement, the expression “Date of Commissioning" or any words of similar import, shall mean the date, after the completion of the Initial Design Capacity of TAPS, as described in Section 1-2 hereof (before Expansion), when custody JLT of the first petroleum tendered for shipment through TAPS, after provision for line fill and tank bottoms, is actually accepted. Promptly after such event, all Parties shall execute a supplement hereto r, formally establishing and recording such date for aQ relevant purposes. 14.9 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument IN TESTIMONY WHEREOF, this Agreement is executed in several counterparts, each of which shall be considered an original, as of the Date of This Agreement. ATLANTIC PIPE Lure COMPANT By fs/ K C. DULANEY Vice President BP PTFE LINE CORPORATION J By /s/ EARL W UNKOH President J HUMBLE PIPE LINE COMPANY J By /$/ CHARLES E. SHAVER Director and Central Counsel J 29 96 Page 38 of 105 AMERADA HESS CORPORA now By It/ LZON HESS i Chairman of the Board HOME PIPE LINE COMPANY By /s/ R. B. COLEMAN Secretary MOBIL PIPE LINE COMPANY By 111 JAMES R. KTNTER Attorney-in-Fact and General Counsel PHILLIPS PETROLEUM COMPANY By It/ C. M. KTTTRKLL Vice President UNION OIL COMPANY OP CAUPOROA By /»/ JOHN M. HOPENS Attomey-in-Fact 30 97 Page 39 of 105 EXHIBIT A c o c € A N P c r ' A * f * It r 0 +r I* . p»uo*oe 6** **4 *MM7ÿ &PS Ml S * , .o®*-4 M Nf 3 tP S Ml4 . H® * ** * 6«mr»0 4 I o £ PS MS CC wi 2 4 to PS Mi /ypO* pr*£f, \”",T NIIM*»IVTO PS Ml *.ii r>5 : 4 1- PS fctl PS Mf 10 in5. 3 i PS Mil PS M I? VKMI O i EPMlNAL L Si O * i 0 9 of AL**“* i i s*°w f 6»if N A # £ « C 0 a c i •a * A c i f i J TRANS ALASKA PIPELINE SYSTEM ROUTE O STAGE OME STATIONS J STAG! TWO STATIONS A STAGE TMHII STATIONS O TEPMINAC J J 98 Page 40 of 1 05 EXHIBIT B CONSTRUCTION COMMITTEE Puty Member Alternate Atlantic Pipe Line Company .. (1) Thornton F. Bradshaw (1) Louis F. Davis Atlantic Richfield Company Atlantic Richfield Company I' 717 Fifth Avenue P. O. Bo* 2819 1 New York, New York 10022 (212 ) 758-2345 Dallas, Texas 75221 (214 ) 747-6484 (2) Louis M. Ream, Jr. Richard G. Dulaney Atlantic Richfield Company Atlantic Richfield Company 600 Fifth Avenue 900 Fifth Avenue New York. New York 10020 New York, New York 10020 (212) 246-3600 (212) 246-3800 11 BP Pipe Line Corporation (1) J, D. Harnett (1) E. W. Unruh BP Pipe Line Corporation BP Pipe Line Corporation Midland Building Midland Building Cleveland, Ohio 44115 Cleveland, Ohio 44115 (216 ) 575-4224 (216 ) 575-5352 (2) R. W. Adam (2) F. K. Rickwood V BP Alaska Inc. BP Alaska Inc. c/o BP North America Inc. 270 Park Avenue 620 Fifth Avenue New York, New York 10017 New York, New York 10020 (212) 973-8612 JPi (212 ) 973-8714 Humble Pipe Lin* Company T. D. Barrow R. H. Venn 1 Humble Oil & Refining Company P. O. Bo* 2180 Humble Oil Ar Refining Company P. O. Bo* 2180 Houston, Texas 77001 Houston, Texas 77001 i Amerada Hess Corporation (713 ) 221-4346 B. T. Deverin (713)221-6521 N. K. Trynin Amerada Hess Corporation .Amerada Hess Corporation i 1 Hess Plaza Woodbridge, New Jersey 07095 1 Hess Plaza Woodbridge, New Jersey 07095 (201) 638-3000 (201) 636-3000 i Home Pipe Line Company Robert W. Campbell Ian M. Drum Home Oil Company Limited Home Oil Company Limited 304 Sixth Avenue, S.W. 304 Sixth Avenue, S.W. J Calgarv, 1, .Alberta, Canada (403 ) 296-7041 Calgary, 1, Alberta, Canada (403 ) 268-7041 Mobil Pipe Line Company A. E. Murray E. J. Wacker, Jr. j Vice President-Planning, Supply and Trans¬ Vice President Mobil Pipe Line Company portation P. O. Box 900 North American Division Dallas, Texas 75221 J Mobil Oil Corporation 150 East 42nd Street New York. New York 10017 (214) 742-4131 (212 ) 883-3951 J J J 99 Page 41 of 105 Party Member Alternate Phillips Petroleum Company C. M. KittreU D. B. Taylor Supply and Transportation Supply and Transporta hon Department Department Phillips Petroleum Company Phillips Petroleum Company 144 Pnillins Building Annex 144 Phillips Building Annex Bartlesville, Oklahoma Bartlesville, Oklahoma 74004 74004 (918 ) 338-8600, Ext 7248 (918 ) 338-6600, Ext. 7022 Union Oil Company of California John M. Hopkins Loren F. Grandey Union Oil Company of Union Oil Company of California California Union Oil Center Union Oil Center Los Angeles, California Los Angeles, California 90017 90017 (213) 482-7600 (213 ) 482-7000 100 Page 42 of105 EXHIBIT C ENABLINC AGREEMENT THIS AGREEMENT made as of the 27th day of August, 1970, by and Among ATLANTIC RICHFIELD COMPANY, A Pennsylvania corporation, BP OIL CORPORATION, a Delaware corporation. HOME OIL COMPANY LIMITED, a Canadian corporation. HUMBLE OIL & REFIMNC COMPANY, a Delaware corpora* tioD, and MOBIL OIL CORPORATION, a New York corporation, (hereinafter sometimes collectively referred to as the 'Enabling Parties" and sometimes individually referred to as "Enabling Party”); WHEREAS. ATLANTIC PIPE LINE COMPANY, a Pennsylvania corporation ("Atlantic” ). BP PIPE LINE — CORPORATION, a Delaware corporation ("BP'*), HUMBLE Pin LINE COMPANY, a Delaware corporation ("Humble"), HOME PIPE LINE COMPANY, a Delaware corporation (*Home"). AMERADA HESS CORPORA¬ TION, a Delaware corporation ('Amerada Hess'), MOBIL PIPE LINE COMPANY, a Delaware corporation ("Mobil"), PHILLIPS PETROLEUM COMPANY, a Delaware corporation ("Phillips"), and UNION OB. COMPANY OP CALIFORNIA, a California corporation ("Union"), have entered into the Trans Alaska Pipeline System Agreement dated as of August 27, 1970 (TAPS Agreement") providing for the con¬ struction. ownership and operation of the pipeline system described therein. Now, THEREFORE, in consideration of the premises and the mutual undertakings of the parties herein contained, the parties agree that: 1. Each Enabling Party does hereby agree to exercise its rights as the owner of an Equity Security in its Subsidiaries or a New Corporation in which it or any of its Subsidiaries owns an Equity Security so as to cause and enable, only to the extent of such Enabling Party’s Equity Security interest, such Subsidiaries or New Corporation or Subsidiary of a New Corporation to per¬ form such Subsidiaries’ or New Corporation's or Subsidiary's of a New Corporation respective il obligations under the TAPS Agreement as that Agreement may duly be amended from time to time. Each Enabling Party further agrees that its obligations under this Enabling Agreement shall continue and extend to any subsequent transferee of such Subsidiary or Subsidiaries or New 1 Corporation which transferee is either a Subsidiary of such Enabling Party or is a New Corpora¬ tion in which such Enabling Party or any of its Subsidiaries owns an Equity Security, 2. Each Enabling Party agrees that it will cot sell, transfer or otherwise dispose of any 1 Equity Securities issued by the Subsidiary or Subsidiaries or New Corporation with respect to which it etecutes this Enabling Agreement so as to violate or permit the violation of the prefer¬ ential rights granted pursuant to Article VII of the TAPS Agreement. 1 3. This Enabling Agreement is executed solely for the benefit of such persons who are now or may hereafter be (i) an Owner, (ii) an Affiliate of an Owner, (Sii) a New Corporation or a Shareholder or holder of Equity Securities of a New Corporation or, (iv) the trustee or trustees J of a retirement plan of an Owner or its Affiliate; and no other party shall have any rights here¬ under 4. All terms used in this Agreement shall have the same meaning as set out in the TAPS J ' Agreement. 5, This Agreement may be executed in several original counterparts, any one or more of J which may be signed by all the parties hereto or by one or more of such parties. All such coun¬ terparts shall constitute but one and the same Agreement, and the aggregate of such counter¬ parts signed by one or more of the parties shall have the same force and effect as if all the parties to the aggregate counterparts had signed tbe same instrument. 4 1 j J 101 Page 43 of 105 IN WITNESS WHEREOF, the parties have entered into this Enabling Agreement as of the day and year first above written. (1) With respect to ATLANTIC PIPE LINE COMPANY, a Subsidiary of ATLANTIC RICHFIELD COMPANY: ATLANTIC RICHFIELD COMPANY By /*/ R. W. REED Financial Vice President (2) With respect to BP PIP* LINE CORPORATION, a Subsidiary of BP On. CORPORATION: BP On. CORPORATION By /*/ EARL W. UNRUH Vice President (3) With respect to HOME PIPE LINE COMPANY, a Subsidiary of HOME OIL COMPANY LIMITED: HOME OIL COMPANY LIMITED By Is/ R. B. COLEMAN Vice President (4) With respect to HUMBLE PIPE LINE COMPANY, a Subsidiary of HUMBLE OIL It REFENTNC COMPANY: HUMBLE OIL & REFENTNC COMPANY By Is/ T. D. BARROW President (5) With respect to MOBIL PIPE LIKE COMPANY, a Subsidiary of MOBIL OIL CORPORATION: MOBIL OIL CORPORATION By Is/ R. F. TUCKER Executive Vice President 2 102 Page 44 of 105 FIRST SUPPLEMENTAL AGREEMENT THIS AGREEMENT supplements the Trans Alaska Pipeline System Agreement (TAPS Agree¬ ment’) dated as of August 27, 1970, by and among ATLANTIC PIPE LINE COMPANY, BP PIPE LINZ CORPORATION, HUMBLE PIPE LINE COMPANY, AMERADA HESS CORPORATION, HOME PIPE LINE COMPANY, MOBIL PIPE LINE COMPANY, PHILLIPS PETROLEUM COMPANY, and UNION OIL COMPANY OP CALIFORNIA (’Owners’). Each of the Owners under the TAPS Agreement hereby agrees that: (1) If two or more Owners (’Owner Partners”) transfer any part of their respective undi¬ vided interests (including preferential and/or expansion rights) in the Trans Alaska Pipeline I * System (TAPS’) to a partnership ("Partnership"), (2) If any transfer of an undivided interest in TAPS by a Partnership is to the Owner Partneis in the proportions in which they transferred undivided interests in TAPS to the Partnership, (3) If any such transfer is otherwise consistent with the provisions of Section 7.3 of the TAPS Agreement, and (4) If the Partnership in formation, operation and termination is otherwise consistent with the provisions of the TAPS Agreement, then such transfen and the formation, operation and termination of the Partnership shall not be deemed to breach the TAPS Agreement This agreement may be executed in counterparts, each of which shall be deemed to be an original, but ail of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the Owners have entered into this Supplemental Agreement as of August 27, 1970. l! ATLANTIC PIPE LINE COMPANY By Is/ R. G. DULANEY ! Vice President BP PIPE LINE CORPORATION 1 By Is/ EARL W. UNRUH President HUMBLE PIPE LINE COMPANY i By /$/ CHARLES E. SHAVER Director and General J Counsel AMERADA HESS CORPORATION By /s/ LEON HESS Chairman of the Board J 1 J l J 103 Page 45 of 105 HOME PIPE LINE COMPANY By Is/ R. B. COLEMAN Secretary MOBIL PIPE LINE COMPANY By /&/ JAMES R. KINZZR Attomey-in- Fact and General Counsel PHILLIPS PETROLEUM COMPANY By /s/ C. M. KJTTREU. Vice President UNION OIL COMPANY OF CALIFORNIA By Isl JOHN M. HOPKINS - Attorney-in Fact 2 104 Page 46 of 105 SECOND SUPPLEMENTAL AGREEMENT Reference is made to the Tram Alaska Pipeline System Agreement, as amended and revised in its entirety as of August 27, 1970, ('TAPS Agreement") by and among the Undersigned relating to the construction, ownership and operation of a petroleum pipeline system from the North Slope to Valdez in the State of Alaska. The TAPS Agreement provides that the initial design capacity of this pipeline system will be approximately six hundred thousand (000,000) barrels per day (“Initial Design Capacity'). The undersigned recognize that the construction of this pipeline has been substantially delayed due to a number of causes not contemplated by the parties at the time it was initially agreed to con¬ struct the pipeline system and that the commencement of the actual construction continues to be delayed for a presently indeterminable period of time. The undersigned hereby agree to meet as soon as practicable after the necessary permits have been issued which allow the immediate construction of the pipeline system for the purpose of reviewing i ' the Initial Design Capacity of the proposed pipeline system in light of the then existing facts and cir¬ cumstances, and, if the undersigned shall unanimously agree, to amend the TAPS Agreement and any other agreements or contracts necessary to accomplish the agreed changes in the Initial Design Capacity of the pipeline system. •i* The undersigned also hereby agree that they shall meet on invitation of any Owner os soon as practicable after completion of the Second Expansion for the purpose of discussing the desirability of looping the TAPS pipeline. This agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. ATLANTIC POT LINE COMPANY By Is/ R. G. DULANEY Vice President BP PIPE LINE CORPORATION By /s/ EARL W. UNRUH President HUMBLE PIPE LINE COMPANY By /s/ CHARLES E. SHAVER Director and General Counsel j AMERADA HESS CORPORATION By /s/ LEON HESS J Chairman of the Board HOME PIPE LINE COMPANY J By /s/ R. B. COLEMAN Secretary J 1 105 Page 47 of 105 Moan. PIPE Lon COMPANY By Is/ JAMXS R. KINZER Attorney-fry- Fact and General Counsel PHILLIPS PETROLEUM COMPANY By (si C. M. KITTMLL Vice President UNION OIL COMPANY OP CAUPOKNIA By Is/ JOHN M. HOPDNS Attorney -in' Fact 2 I 106 Page 48 of 1 05 THIRD SUPPLEMENTAL AGREEMENT THIS AGREEMENT supplements the Trans Alaska Pipeline System Agreement (TAPS Agree* ment") dated as of August 27, 1970, by and among ATLANTIC PIPE LINE COMPANY, BP PIPE LINE CORPORATION, HUMBLE PIPE LINE COMPANY, AMERADA HESS CORPORATION. HOME PIPE LINE COM¬ PANY, MOBIL PIPE LINE COMPANY. PHILLIPS PETROLEUM COMPANY, and UNION OIL COMPANY OP CALIFORNIA (“Owners"). Each of the Owners under the TAPS Agreement hereby agrees that: (1) In connection with terminal tankage at Valdez. Alaska, notwithstanding anything con¬ tained in the TAPS Agreement to the contrary, the parties hereto recognize that certain of the Owners have problems of scheduling shipping and storage which are more acute as a result of their smaller interests in the System and in order to accomplish proper scheduling of shipping for such smaller interests, both in the pipeline system and in tanker withdrawals from the System, will use terminal tankage in excess of their proportionate volume of total terminal tankage from time lit to time. (2) Any Owner may make such use of unused terminal tankage storage capacity as is reason¬ ably necessary to accommodate the proper scheduling of shipments with the use of tankers of !1 appropriate size to meet such a schedule, provided that such Owner shall not use unused capacity in such a way as to infringe on any other Owners use of its proportionate volume of total terminal tankage. (3) In order to avoid such infringement, a proper demurrage schedule shall be created ii providing for a penalty for failure to withdraw the infringing storage upon reasonable notice from the operator of the System. Further, to avoid any Owner abusing the above described right, the Operating Agreement for TAPS shall provide that the Operator may refuse to accept additional shipments by any Owner whose use of such unused terminal tankage capacity infringes on any other Owner’s use of its proportionate volume of total terminal tankage. (4) Each party hereto shall negotiate in good faith and make every reasonable effort to resolve such shipping and storage problems in accordance herewith. Meetings to negotiate and resolve the matters referred to herein shall be held at the time and place requested by any party hereto and each party shall send a properly authorized representative to each such meeting. i This agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument IN WITNESS WHEREOF, the Owners have entered into this Third Supplemental Agreement as of August 27, 1970. ATLANTIC PIPE LINE COMPANY By ft/ R. G. DULANEY Vice President BP PIPE LINE CORPORATION By III EARL W. UNRUH J • President HUMBLE PIPE LINE COMPANY J By III CHARLES E. SHAVER Director and Central Counsel l 107 Page 49 of 1 05 AMERADA HESS CORPORATION By /s/ LEON HESS Chairman of the Board HOME PIPE LINE COMPANY By /s/ R. W. CAMPBELL Vice President MOBIL PIPE LINE COMPANY By / s/ JAMES R. KINZER Attorney An-Fact and General Counsel PHILLIPS PETROLEUM COMPANY By /si C. M. KITTRELL Vice President UNION OIL COMPANY or CALIFORNIA By /si JOHN M. HOFEXNI Attorney-in-Fact 2 108 Page 50 of 105 FOURTH SUPPLEMENTAL AGREEMENT THIS AGREEMENT supplements the Trans Alaska Pipeline System Agreement ("TAPS Agree¬ ment") dated as of August 27, 1970, by and among ATLANTIC PIPE LINE COMPANY, BP PIPE LINE CORPORATION, HUMBLE PIPE LINE COMPANY, AMERADA HESS CORPORATION, HOME PIPE LINE COMPANY, MOBIL PIPE LINE COMPANY, PHILLIPS PETROLEUM COMPANY, and UNION OIL COMPANY OF CALIFORNIA (“Owners'). Each of the Owners under the TAPS Agreement hereby agrees that: ! i The sale or transfer by a Shareholder in a New Corporation of the type described in sub¬ division 7.3(d)(1) of the TAPS Agreement to one or more of its other Shareholders of Equity Securities of such New Corporation representing not more than one-half of 1% undivided interest in TAPS, which sale or transfer is made to adjust ownership of the Equity Securities in such New Corporation between its Shareholders for the purpose of obtaining or maintaining desirable long term financing arrangements shall be an additional exception to the preferential rights provisions set forth in Section 7.3 of the TAPS Agreement This agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the Owners have entered into this Supplemental Agreement as of August 27, 1970. ATLANTIC PEPE LINE COMPANY By la/ R. G. DULANEY Vice President 1 BP PIPE LINE CORPORATION By /s/ EARL W. UNRUH President HUMBLE PIPE LINE COMPANY JL By Is/ CHARLES E. SHAVER Director and General Counsel AMERADA HESS CORPORATION By /s/ LEON HESS Chairman of the Board HOME PIPE LINE COMPANY By /*/ R. W. CAMPBELL J Vice President MOBIL PIPE LINE COMPANY J By /*/ JAMES R. KINZER Attorney-in- Fact and i General Counsel 1 109 Page 51 of 105 PHILLIPS PETROLEUM COMPANY By Is/ C. M. Krrram. Vice President UNION OIL COMPANY or CALITOKNIA By /*/ JOHN M. HOPKINS Attorney -in-Fact I a 110 Page 52 of105 FIFTH SUPPLEMENTAL AGREEMENT THIS AGREEMENT supplements the Trans Alaska Pipeline System Agreement (“TAPS Agree¬ ment") dated as of August 27, 1970, by and among ATLANTIC PIPE LINE COMPANY, BP PIPE LINE CORPORATION, HUMBLE PIPE LINE COMPANY, AMERADA HESS CORPORATION, HOME PIPE LINE COMPANY, MOBIL PIPE LINE COMPANY, PHILLIPS PETROLEUM COMPANY, and UNION OIL COMPANY OF CALIFORNIA ("Owners"), as supplemented and amended. Each of the Owners under the TAPS Agreement hereby agrees that, notwithstanding the provisions of the TAPS Agreement, it will, as a part of die initial pipeline construction, cause Alyeska Pipeline Service Company ("Alyeska") to construct for Amerada Hess Corporation ("Amerada Hess") as its sole property, one million five hundred thirty thousand ( 1,530,000 ) barrels of crude oil storage tank capacity composed of three (3) 510,000 barrel tanks or such other sire tanks identical to the other tanks constructed at the Valdez Terminal, provided that the total capacity of such other sized tanks shall be not less than 1,530,000 barrels, together with necessary and appropriate facilities to i connect such tanks to the delivery and loading facilities at the Valdez Terminal at Valdez, Alaska. Alyeska shall construct such tanks and facilities in accordance with generally accepted practices as in the remainder of the Valdez tank farm. Alyeska shall submit invoices for such construction to Amerada Hess which shall promptly make payment of such invoices in full. Thereafter, Alyeska shall operate such tanks and facilities for Amerada Hess in accordance with Amerada Hess' instructions and Amerada Hess shall reimburse Alyeska monthly for its total costs incurred in operating such facilities for Amerada Hess and .Amerada Hess shall pay the Owners a J reasonable monthly rental for the use of land utilized by such Amerada Hess tanks. Alyeska joins herein for the purpose of agreeing to comply with the terms hereof. X • Each Owner shall have the option to elect at any time, or from time to time, to have Alyeska build up to 1,530,000 barrels of crude oil storage tank capacity as such party's sole property on the same basis as such capacity is constructed for Amerada Hess, provided such space is available for the purpose of constructing and operating said storage based upon reasonable plans and expectations for total storage capacity for the pipeline system. This agreement shall be binding upon the successors and assigns of the respective parties hereto. This agreement may be executed in counterparts, each of which shall be deemed to be as original but all of which together shall constitute one and the same instrument. jl IN WITNESS WHEREOF the parties execute this agreement as of August 27. 1970. ATLANTIC PIPE LINE COMPANY By /s/ R. G. DULANEY Vice Prrsideni BP PIPE LINE CORPORATION By IS/ EARL W. UNTOH l President HUMBLE PIPE LINE COMPANY By /*/ CHARLES E. SHAVER Director and General ) Counsel 1 111 Page 53 of 105 AMERADA HESS CORPORATION By Is/ LEON HESS Chairman of the Board HOME PIPE LINE COMPANY By I si R. W. CAMPBELL Vice President MOBIL PIPE LINE COMPANY By /$/ JAMES R. KINZER Attorney-in- Pact and Ceneral Counsel PHILLIPS PETROLEUM COMPANY By Isl C. M. KITTRELL Vice President UNION OIL COMPANY OP CALITORNIA By /*/ JOHN M. HOPEINS Attorney-in-Fact ) - ALYESEA PIPELINE SERVICE COMPANY By Is/ E. L. PATTON President 2 ) 112 fageSÿof IflV AMENDMENT TO FIFTH SUPPLEMENTAL AGREEMENT THIS AMENDMENT to Fifth Supplemental Agreement to the Trans Alaska Pipeline System Agreement entered into by and among Amerada _ Hass Corporation, ARCO Pipe Line Company, Exxon Pipeline Company, Mobil Alaska Pipeline Company, Phillips Petroleum Company, Sohio Pipe Line Company, and Union Alaska Pipeline Company (herein ''Owners") as of July , 1974; WITNESSETH: WHEREAS by that certain Fifth Supplemental Agreement to the Trans Alaska Pipeline System Agreement entered into as of August 27, 1970, by and between the undersigned Owners or their predecessors in interest, Owners or their predecessors in Interest agreed to cause Alyeska Pipeline Service Company ("Alyeska") to construct for Amerada Hess Corporation, as its sole property, One Million Five Hundred Thirty Thousand (1.530,000) barrels of crude oil storage tank capacity at the Valdez terminal of the Trans Alaska Pipeline System end further to grant each Owner the option to elect to have Alyeska build the same quantity of crude oil storage tank capacity at the said terminal on the same basis as that constructed for Amerada Hess Corporation, and WHEREAS Amerada Hess Corporation has notified Owners that Amerada Hess no longer desires to have Alyeska construct any crude oil ( storage tank capacity for it, as its sole property, at the Valdez terminal, and WHEREAS Owners are willing to amend said Fifth Supplemental Agreement to relieve Owners of their obligation to cause Alyeska to construct crude oil storage tank capacity for Amerada Hess Corporation as its sole property and Amerada Hess Corporation desires to be relieved of its obligation to have such crude oil storage tank capacity constructe for it, as its sole property, and all parties hereto desire that any and all design and other work heretofore accomplished by Alyeska and material and equipment heretofore purchased or placed on order by Alyeska for construction of such crude oil storage tank capacity at* the" Valdez terminal be used by Alyeska to construct additional terminal tankage at Valdez pursuant to the provisions of sub-section 6.7 of tha TAPS Agreement; NOW THEREFORE KNOW ALL MEN BY THESE PRESENTS that for and in consideration of the mutual covenants contained herein the parties hereto agree that the Fifth Supplemental Agreement to the Trans Alaska Pipeline System Agreement shall be and is hereby amended to provide as follows: XR- 000098 113 - 2 - :, Page 55 of 1 05 . \ •; » * « • r 1) Owners are hereby relieved of any and all prior obli¬ gations to cause Alyeska to construct for Amerada Hess Corporation, as its sole property, any crude oil ( storage tank capacity at the Valdez terminal of the Trans Alaska Pipeline System and Amerada Hess Corpo¬ ration is hereby relieved of its prior obligation to have any such crude oil storage tank capacity con¬ structed for it. as its sole property. Owners, including Amerada Hess Corporation, agree that all things heretofore done by Alyeska 'in constructing or preparing to construct crude oil storage tank capacity at the Valdez terminal for Amerada Hess Corporation as its sole property and all materials and equipment of every kind acquired or purchased or placed on purchase order for use in construction of such crude oil storage tank capacity shall be used by. Alyeska to construct additional terminal tankage at the Valdez terminal, as and when such additional tankage is properly nominated by one or more Owners in the required quantities, pur¬ suant to subsection 6.7 of the TAPS Agreement. 2) Each Owner, Including Amerada Hess Corporation, shall have the option to elect at any time, or from time to time in the future, to have Alyeska construct up to One Million Five Hundred Thirty Tbous end . (1,530,000) barrels of- crude oil storage tank capacity at tha said Valdez terminal, as such Owner's sola property, provided ( auch apace is available for the purpose of constructing and operating said storage based upon reasonable plana and expectations for total storage capacity for the System. Such crude oil storage tank capacity constructed for auch Owner shall be constructed in Five Hundred Ten Thousand (510.000) barrel tanks or such other size tanks identical to the other tanks constructed at the Valdes terminal. Alyeska shall construct such tank or tanks and facilities in accordance with generally accepted practices as in the remainder of the Valdez tank farm. During design and construction, Alyeska shall submit monthly invoices for tha cost of such design and con¬ struction to such Owner for whom such tank capacity is being constructed, and such Owner shall promptly make payment of such invoices in full. Thereafter, Alyeska shall operate such tanks and facilities for such Owner for whom constructed in accordance wich such Owner's Instructions and such Owner shall reimburse Alyeska monthly for its total costs Incurred in operating such facilities for such Owners, and such Owner shall pay all other Owners a reasonable monthly rental for use of land utilized by such Owner in the operation of such tank capacity. XR- 000033 114 * %• • Page 56 of 1 05 / - - 3 3) Alyeska Joins herein for Che purpose of agreeing Co ( comply with Che cerms hereof. , 4) This agreement shall be binding upon Che successors and assigns of Che respeccive parcies hereco. 5) . of . This ogreemenc may be executed in councerparcs each which shell be deemed co be an original buc all of which cogecher shall consclcuce one and Che same instrumenc. IN WITNESS WHEREOF each of che parcies hereco has caused chis instrumenc to be executed on its behalf by its authorized officer as of the day and date first mentioned above. ALYESKA PIPELINE SERVICE COMPANY AMERADA HESS CORPORATION By By ARCO PIPE LINE COMPANY By ( EXXON PIPELINE COMPANY By MOBIL AIAS Kk PIPErLINE COMPANY % By PHILLIPS PETROLEUM COMPANY By SOHIO PIPE LINE COMPANY By ONION ALASKA PIPELINE COMPANY By ( XR" OOOIOO 115 Page 57 of 105 C C SIXTH SUPPLEMENTAL AGREEMENT ( This Agreement supplements the Trans Alaska Pipeline System Agreement entered Into effective August 27, 1970, (Agreement) by and among the predecessors In Interest of Amerada Hess Pipeline Corporation. ARCO Pipe Line Company, BP Pipelines Inc., Exxon Pipeline Company, Mobil Alaska Pipeline Company, Phillips Alaska Pipeline Corporation. Sohlo Pipe Line Company and Union Alaska Pipeline Company, herein sometimes referred to Individually as "Party" or "Owner- and collectively as "Parties" or as "Owners". WITNESSETH: WHEREAS, Section 14. B of the TAPS Agreement requires that Owners Join 1n executing a written supplement formally establishing and recording the date for all relevant purposes on which custody of the first petroleum tendered for shipment through the System, after providing for base Inventory was actually accepted, and WHEREAS, notice was given to Owners by Alyeska Pipeline Service Company that base Inventory Including pipeline base Inventory and terminal tankage base Inventory was provided at 2400 hours on July 30, 1977, and WHEREAS, Section 1.1.1.7 of the Stipulations Of the Agreement and Grant of Right-of-Way for the Trans Alaska Pipeline between the United States of America and Permittees therein and Section 1.1.1,7 of the Stipulations of the RIght-of-Way Lease for the Trans Alaska Pipeline between the State of Alaska and Lessees therein respectively provide ( that written notice shall be given promptly to the Authorized Officer and to the Coirmlssloner of Natural Resources of the State of Alaska, NOW THEREFORE, each of the Owners under the Agreement hereby agrees that; 1. The Date of Conm1ss1on1ng as defined 1n the Agreement 1s formally established and recorded for all relevant purposes as July 31st, 1977. 2. Alyeska Pipeline Service company shall on behalf of each of the Owners promptly notify 1n writing both the Authorized Officer and the Commissioner of Natural Resources of the State of Alaska that first oil tendered for shipment through the pipeline after provisions for line fill and tank bottoms was accepted for custody by Owners on July 31st 1977. This Agreement may be executed in counterparts each of which shall be deemed to be an original, but all of which together shall constitute one and the same Instrument. ( XR- • OOOlQj 116 Page 58 of 105 c Sixth Supplement Agreement Page Two f In witness whereof the Owners have entered Into this Supplemental Agreement as of 1977 AMERADA HESS PIPELINE CORPORATION MOBIL ALASKA PIPELINE COMPANY By cPt •if. yyi By Title Tttle ARCO PIPE LINE COMPANY PHILLIPS ALASKA PIPELINE CORPORATION By By Title Title BP PIPELINES INC. SOHIO PIPE LINE COMPANY By By Title Title EXXON PIPELINE COMPANY UNION ALASKA PIPELINE COMPANY By By Title Title XR- 000102 117 Page 59 of 1 05 r FIRST AMENDMENT TO TRANS ALASKA PIPELINE SYSTEM AGREEMENT This First Amendment to the Trans Alaska Pipeline System Agreement entered into as of the 8th day of July, 1974, by and between Amerada Hess Corporation, ARCO Pipe Line Company, Exxon Pipeline Company, Mobil Alaska Pipeline Company, Phillips Petroleum Company, Sohio Pipe Line Company. Union Alaska Pipeline Company and BP Pipelines Inc. (herein called ’’Owners"): WITNESSETH: WHEREAS the parties hereto or their predecessors in interest entered into the Trans Alaska Pipeline System Agreement (herein "Agreement") as of August 27, 1970, which said Agreement provides for the design and construction of the Trans Alaska Pipeline System (herein "System") consisting of a forty-eight (48) inch diameter petroleum pipeline from Prudhoe Bay to Valdez. Alaska and its related facilities, and WHEREAS Home Pipe Line Company, a Delaware corporation, an original party to the Agreement, has subsequently assigned its interest in the System and the Agreement to other Owners of the System which are also parties hereto, and WHEREAS the said Agreement provides for the design and con¬ struction of the System to an initial design capacity of 600,000 barrels per day and further provides for design of the System for expansion of capacity in two economically logical stages designated "First Expansion" and "Second Expansion", respectively, all accord¬ ing to terms and conditions sec forth in the Agreement, and WHEREAS Owners have done all things pursuant to the Agreement necessary to initiate the First Expansion, effective as of July 8, 1974 which will increase design capacity 600.000 barrels per day (First Expansion Capacity) and result in redistribution of Per¬ centages of Ownership in the System, and WHEREAS pursuant to the said redistribution of Percentages of Ownership in the System. Sohio Pipe Line Company obtains f rom the other Owners an additional undivided 21.1% interest in the System which increases its Percentage of Ownership in the System to an undivided 49.18% interest, and WHEREAS Sohio Pipe Line Company has assigned to BP Pipelines Inc., a Delaware corporation, an undivided 15.847. interest in the System, effective as of July 17. 1974. which said assignment has reduced the Percentage of Ownership of Sohio Pipe Line Company in the System to an undivided 33.34% interest, and 118 Page 60 of 105 WHEREAS the said redistribution and assignment described above requires the Owners to amend the Agreement as provided in Sections 3.2 and 6.6 thereof in the respects set forth hereinbelov: NOW THEREFORE KNOW ALL MEN BY THESE PRESENTS that in con¬ sideration of the mutual covenants herein contained, and other good and valuable consideration, Owners hereby covenant and agree that the said Trans Alaska Pipeline System Agreement entered into by and between them or their predecessors in interest as of August 27, 1970 shall be and the 9ame hereby is amended as follows: J 1. Table I in Section 3.1 of the said Agreement is amended to read as follows: TABLE I (2) (3) Percentage Design (1) of Capacity Party Ownership . (Bbls /Day) ARCO Pipe Line Company 21 . 007. 252,000 (formerly Atlantic Pipe Line Company) Sohio Pipe Line Company 33.34 400,080 (formerly BP Pipe Line Corporation) Exxon Pipeline Company 20.00 240.000 (formerly Humble Pipe Line Company) Amerada Hess Corporation 1.50 18,000 Mobil Alaska Pipeline Company 5.00 60,000 (formerly Mobil Pipe Line Company) Phillips Petroleum Company 1.66 19,920 Union Alaska Pipeline Company 1.66 19,920 (formerly Union Oil Company of California) BP Pipelines Inc. (a) 15.84 190,080 Totals 100.007. 1,200,000 (a) With respect to the period from July 8 through July 16, 1974, Sohio Pipe Line Company's and BP Pipelines Inc. 's Percentages of Ownership and barrels of Design Capacity set forth above were held by Sohio Pipe Line Company. 2 119 ) r, Page 61 of 105 2. Table II in Section 6.2 of the said Agreement is amended to read as follows: TABLE II (2) (3) Expansion Remaining (1) Capacity Expansion Part' (B/D) Capacity ARC0 Pipe Line Company 385.000 168,000 J (formerly Atlantic Pipe Line Company) Sohio Pipe Line Company 385,000 266,720 (formerly BP Pipe Line Corporation) Exxon Pipeline Company 350,000 160,000 (formerly Humble Pipe Line Company) Amerada Hess Corporation 42,000 12,000 Home Pipeline Company 28,000 Mobil Alaska Pipeline Company 119,000 40.000 (formerly Mobil Pipe Line Company) PhillipB Petroleum Company 45.500 13,280 Union Alaska Pipeline Company 45.500 13,280 (formerly Union Oil Company of California) BP Pipelines Inc. 0>) 126,720 Totals 1,400,000 800,000 respect to the period from July 8 through July 16, 1974 Sohio Pipe Line Company's and BP Pipelines Inc.'s Remaining Expansion Capacity set forth above were held by Sohio Pipe Line Company. 3. All Owners agree that additional tankage with nominal or estimated capacity of 3,000,000 barrels shall be constructed at the Valdez terminal as part of Initial Design Capacity and that Table IA in Section 3.2 of the said Agreement Is amended to read 1 as follows: 3 - 120 / . Page 62 of105 TABLE IA (2) (3) Undivided Tankage (1) Interest Capacity Part Percentage . (3b 1 s ) ARCO Pipe Line Company 21.00 1,890,0c (formerly Atlantic Pine Line Company) Sohio Pipe Line Companyÿ/ 33.34 3,000, 6C (formerly BP Pipe Line Corporation) Exxon Pipeline Company 20.00 1,800. Of (formerly Humble Pipe Line Company) Amerada Hess Corporation 1.50 135, 0( "Mobil Alaska Pipeline Company 5.00 450,0' (formerly Mobil Pipe Line Company) Phillips Petroleum Company 1.66 149. A Union Alaska Pipeline Company 1.66 149.4 (formerly Union Oil Company of California) BP Pipelines Inc.(c> 15.84 1,425,6 Totals 100.007, 9.000.C (c)with respect to the period from July 8 through July 16. 1974 Sohio Pipe Line Company's and BP Pipelines Inc.'s Undivided Interest Percentages and barrels of Tankage Capacity set forth above were held by Sohio Pipe Line Company. f No Owner's net usable barrels of Terminal Tankage Capacity derived from the Terminal Tankage Capacity set forth in Column (3) of Table IA shall be reduced under the Agreement upon any further Expansion of the System if such Owner elects to retain such Terminal Tankage Capacity and specifies its election to do so by proper notice to each other Owner within 45 days after it has been notified chat such further Expansion has been proposed. Net usable barrels of Terminal Tankage Capacity shall be determines: after the tanks are completed by strapping and by deducting total tank bottoms and total unusable capacity provided at the top of such tanks for safety purposes in the event of seismic disturbance; The capacities shown in Column (3) of Table IA are nominal or esti¬ mated barrels of capacity. 4. Section 3.3 of the said Agreement is hereby amended to read as follows: All cos t6 Incurred or to be incurred from and after July 8, 1974 to complete the Initial Design Capacity and to complete the First Expansion Capacity shall be charged to and paid by the Parties in accordance with their respectiv Percentages of Ownership in the Trans Alaska Pipeline System as those Percentages of Ownership appear in Column (2) of Table I in Section 3.1 hereof, as the said Table I is amende - - 4 121 ) -• Page 63 of 105 by this First Amendment to the Trans Alaska Pipeline System Agreement. The total cost of terminal tankage constructed as a part of the Initial Design Capacity shall be initially paid by the Parties in accordance with their respective undivided interest percentages in terminal tankage appearing in Column (2) of Table IA in Section 3.2 hereof, as the said Table IA is amended by this First Amendment to the said Agreement. This First Amendment to the said Trans Alaska Pipeline 5. System Agreement may be executed in counterparts, each of which be deemed an original, but all of which together constitute one and the same instrument. IN TESTIMONY WHEREOF this First Amendment to the Trans Alaska Pipeline System Agreement is executed in several counterparts, each of which shall be considered an original, as of the day and date first appearing above. ARCO Pipe Line Company Mobil Alaska Pipeline Company ! By. ,.v- By _ H tfke/cciH C E. J. Wacker, Jr., Vice Preside ' i'/ Sohio Pipe Line Company i Phillips Petroleum Company By. Exxon Pipeline Company Union Alaska Pipeline Company ft , c. /' By. r_ */J- /x • 7 17 AmeradaÿIess Corporation BP Pipelines Inc. ! V 2 By. T Chairman of the Board 5 122 Page 64 of 1 05 * v SECOND AMENDMENT TO TRANS ALASKA PIPELINE SYSTEM AGREEMENT This Second Amendment to the Trans Alaska Pipeline System Agree¬ ment entered into as of the 15th day of December, 1976, by and between Amerada Hess Corporation, ARCO Pipe Line Company, Exxon Pipeline Company, Mobil Alaska Pipeline Company. Phillips Petroleum Company, Sohio Pipe Line Company, Union Alaska Pipeline Company and BP Pipelines Inc. (herein called "Parties" or "Owners"): WITNESSETH: WHEREAS, Owners or their predecessors in interest entered into the Trans Alaska Pipeline System Agreement (herein"Agreement") as of August 27, 1970, which provides for the design and construction of the Trans Alaska Pipeline System (herein "TAPS" or "System") consisting of a 4 B- inch diameter petroleum pipeline from Prudhoe Bay to Valdez, Alaska, and its related facilities, and WHEREAS, Owners desire to amend the Agreement as hereinafter pro- •ided: NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS: That in consid¬ eration of the mutual covenants herein contained and other good and valuable consideration, Owners hereby covenant and agree that Article XIII of the Agreement shall be and is hereby amended and restated in its entirety as follows: "13.1 Definitions When used in this Article XIII, the following terms shall be defined as sec forth below: (a) "Designated Area" shall mean all lands lying within five (5) miles of the centerline of the TAPS pipeline. (b) "Acquisition Period" means the period beginning August 27, 1970, and ending on the date three (3) years from and after the Date of Commissioning of the System; excepting, however, that as to all Mineral Interests located within lands withdrawn by governmental authority from mineral loca¬ tion or mineral leasing, the Acquisition Period shall expire on the dace three (3) years from and after termination of such withdrawal, or on the date ten (10) years from and after the Date of Commissioning of the System, whichever date is earlier. 123 t Page 65 of 105 {c) "Mineral" {singular or plural) means any and every mineral of any nature, metallic or nonmetallic, except oil and gas. (d) "Mineral Interest" {singular) or "Mineral Interests" (plural) means property interests including any and all mining claims, leases, options, ownership and other rights, title or interests in, to, or of any Mineral existing in the Designated Area acquired directly or Indirectly as a result of Data obtained as provided in (e) below. (e) "Data" means any and all core samples, survey information, geological, geophysical or geochemical informa¬ tion and other information and data, concerning the discovery, existence, or nature of any Mineral, or oil or gas, within the Designated Area which is revealed, discovered or observed in the construction of the System or arising in connection therewith. (f) "Prospect" means an area of limited areal extent clearly based on logical geological localization for specific Minerals within the Designated Area. 13.2 Disclosure of Data {a) All Data revealed to or acquired, discovered or observed by any Party during the Acquisition Period, shall be the common property of all Parties and shall be revealed promptly to all Parties. (b) All Data obtained by the Contractor at any time shall be the common property of all Parties and shall be re¬ vealed to all Parties by the Contractor promptly if requested by any Party or if such Data appears significant in the good faith judgment of the Contractor. 13.3 Mineral Interests {a) Every Mineral Interest in a Prospect acquired by or for any of the Parties during the Acquisition Period shall be held for the benefit of all Parties in the same proportion as their respective Percentages of Ownership, subject to the election by each Party to accept or reject its respective proportionate part (herein called a "Share") of all Mineral Interests in the Prospect. (b) Whenever, during the Acquisition Period, a Mineral Interest in any Prospect is acquired by or for any of the Parties (called the "Acquiring Party", whether one or more) the Acquiring Party forthwith shall notify all other Parties (each of which is called a "Non-Acquiring Party") in writing, -2- 124 Page 66 of 1 05 • *> y describing in detail the Mineral Interest, its location, and all of the consideration, costs, terns, conditions and con¬ tractual obligations for or by reason of such acquisition (other than obligations implied by law) . The Acquiring Party shall furnish to each Non-Acquiring Party, along with the notice, a copy of all factual geological and other technical data concerning the Mineral Interest in the Prospect, and all information concerning the title thereto and possession thereof, which then has been obtained by or for the Acquiring Party. Each such notice shall constitute an offer, to each Non-Acquiring Party, to convey, assign or transfer to the Non-Acquiring Party its respective Share of all Mineral Interests in the Prospect; provided, however, that all Mineral Interests acquired within a Prospect shall be combined and treated in the same manner as individual Mineral Interests as to the obligations of the Acquiring Party and the rights and options of the Non- Acquiring Party. Each Non-Acquiring Party shall have the right and option to elect to accept or reject the offer at any time during the period of one year from and after the date of receipt of the notice. If a Party elects to accept the offer, it shall do so by written notice to the Acquring Party within the one year-, provided, however, that the Non -Acquiring Party shall elect to accept all or none of the Mineral Interests offered within a Prospect. Upon such election, the Acquiring Party forthwith shall assign, transfer and convey to each i Party accepting the offer such Party's Share of the Mineral Interests in the Prospect. Each Party receiving a Share of the Mineral Interests shall promptly bear and pay, or reimburse the Acquiring Party for, a proportionate part of the consider¬ ation and acquisition costs described in the offer, and there¬ after shall bear and pay a proportionate part of all rentals, royalties, assessment work, taxes, work obligations, and other liabilities and obligations, pertaining to the Mineral Interests in the Prospect. Each such Party's proportionate part of all 6uch payments, liabilities and obligations shall be equal to its Share in the Mineral Interests in the Prospect. (c) If a Party fails to accept an offer in the manner and during the period specified above, it shall be deemed to have rejected the offer, and shall have no rights or interests in or to the Mineral Interests in the Prospect as to which the offer was made. The Share rejected by such Party shall be divided among the Acquiring Party and all other Parties which have accepted their respective Shares and desire to have their Shares increased by distribution of the rejected Share. The rejected Share shall be distributed among all such Parties in the same proportion as their respective Shares bear to one another." -3- 125 Page 67 of 105 This Second Amendment to the said Trans Alaska Pipeline System Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together constitute one and the Bame Instrument. IN TESTIMONY WHEREOF, this Second Amendment to the Trans Alaska Pipeline System Agreement is executed in several counterparts , each of which shall be considered an original, as of the day and date first appearing above. ARCO Pipe Line Company Mobil Alaska Pipeline Company By By Sohio Pipe Line Company Phillips Petroleum Company By By Exxon Pipeline Company ,ÿ4 Union Alaska Pipeline Company / By By Amerada Hess Corporation BP Pipelines Inc. By By : i -4- 126 Page 68 of 105 THIRD AMENDMENT TO TRANS ALASKA PIPELINE SYSTEM AGREEMENT This Third Amendment to the Trans Alaska Pipeline System Agreement entered into as of the 31st day of March 1977, by and among Amerada Hess Pipeline Corporation, Exxon Pipeline Company, ARCO Pipe Line Company, Mobil Alaska Pipeline Company, Phillips Petroleum Company, Sohio Pipe Line Company, Union Alaska Pipeline Company, and BP Pipelines Inc. (herein individually called "Party" or "Owner" and collectively called "Parties" or "Owners") : WITNESSETH: WHEREAS, Owners or their predecessors in interest entered into the Trans Alaska Pipeline System Agreement as of August 27, 1970 hich agreement as supplemented and amended from time to time is herein referred to as the "Agreement"), which provides for the design ->d construction of Trans Alaska Pipeline System consisting of a 48- inch diameter petroleum pipeline fronr Prudhoe Bay to Valder, Alaska and related facilities (herein "TAPS"); and WHEREAS, Owners desire to amend the Agreement as herein provided: NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS: That in consideration of the mutual covenants herein contained and other good and valuable consideration the sufficiency of which is hereby acknow¬ ledged, Owners hereby covenant and agree that the Agreement shall be and is hereby amended as follows; 1. Section 7.2 of the Agreement is amended and restated in 127 Page 69 of 1 05 its entirety to read as follows: "7.2 Transferability of Interests. Except as otherwise expressly provided in Sections 7.3 and 7. A, an Owner may sell. transfer or otherwise dispose of all or any part of its un¬ divided interest in TAPS only by a sale for cash and only after offering such interest to all other Owners as provided in subsections (a) and (b) of this Section 7.2 and provided further that any Owner whose Percentage of Ownership in TAPS then appearing in Column (2) of Table I of Section 3.1 exceeds five percent (51) must first receive the prior written consent to the transfer of either (i) a majority of the other Owners or (11) Owners whose Percentage of Ownership in TAPS then appearing in Column (2) of Table 1 of Section 3.1 aggregate at least sixty-six and two-thirds percent (66-2/3%) of the total ownership in TAPS. Any Owner not giving notice of consent on or before the time allowed for completing a transfer pursuant to subsection (a) below shall be deemed to have withheld consent to such transfer. "(a) Transfer of a Direct Interest in TAPS. In addition to the consent requirement as provided above, an Owner desiring to sell, transfer or otherwise dispose of all or any part of its undivided interest in TAPS shall first offer such interest to all other Owners who arc hereby granted the preferential right to purchase such interest (but not a lesser or different interest) on the same terms offered by or to any bona fide, prospec¬ tive purchaser, who is ready, willing and able to so purchase same. The Owner desiring to sell shall promptly communicate in writing to the other Owners the offer made to or received by it ‘from a purchaser ready, willing and able to purchase the same, together with the name and address of such purchaser, and the other Owners shall thereupon have the right for a period of forty-five (45) days after the giving of said notice to elect to purchase such interest upon the same terms, by giving written notice within such 45-day period to the Owner desiring to sell the same. If none of the notified Owners so elect to purchase such Interest within such 45-day period, the Owner desiring to sell same shall have, subject to the consent requirement as provided for above, the right to complete said sale in accordance with said offer within sixty (60) days after the expiration of said 45-day period; provided, that, if the Owner desiring to sell falls so to complete said sale within said period of sixty (60) days, the preferential purchase right of the other Owners under this subsection (a) shall be considered as revived, and the Owner whodesired to sell shall not complete said sale unless and until said offer again has been presented to the ocher Owners, as hereln- -2- 128 Page 70 of 1 05 above provided, and the said other Owners again have failed to elect to purchase on the sane terms and conditions of said offer. If more than one Owner desires to join in the purchase of such interest then, unless otherwise agreed by the purchasing Owners, all such Owners shall purchase the same proportionately in the ratio that their Percentages of Ownership in TAPS prior to said purchase bear to each other. M(b) Indirect Transfers of an Interest in TAPS. In addition to the consent requirement as provided for above, the foregoing subparagraph (a) shall also apply to (1) any sale, transfer or other disposition of any Equity Security issued by an Owner (other than a New Corporation and other than any Owner which does not have an Enabling Party) , in which event every other Owner shall be en¬ titled to exercise a preferential right to acquire the undivided interest in the System represented by such Equity Securities pursuant to Section 7.6; and (ii) any sale, transfer or other disposition of any Equity Security issued by a New Corporation, in which event (a) every Owner (other than such New Corporation or any sub¬ sidiaries of such New Corporation) shall have the pref¬ erential right described in clause (i) above, and (b) every non-selling holder of Equity Securities issued by such New Corporation shall have a preferential right to purchase such Equity Securities pursuant to Section 7.5. The undivided interest in the System represented by the Equity Securities owned by any holder in a New Corpora¬ tion (whether or not such New Corporation is an Owner) shall be determined by multiplying the undivided interest in the System owned by suoh New Corporation and/or by all subsidiaries of such New Corporation by the Percentage of Ownership of such holder of all Equity Securities Issued by such New Corporation." 2. The caption and first clause of Section 7.3 of the Agree¬ ment is hereby amended to read as follows: "7.3 Transfers not Subject to Requirement of Consent and Preferential Right to Purchase. The following trans¬ actions shall not be subject to the requirement of consent and the preferential right to purchase set forth in Section 7.2 " 3. The last sentence of Section 7.4 of the Agreement is hereby amended to read as follows: "The requirement of consent and the preferential right -3- 129 Page 71 of 105 . • • i r of purchase as provided in Section 7.2 shall not apply to any such issuance, repurchase or redemption of the Equity Securities of a New Corporation." 4. Section 8.1 of the Agreement is amended and restated in its entirety to read as follows: "8.1 Initial Term. This Agreement shall be in effect from the date of this Agreement and until the ex¬ piration of thirty (30) years from the Dace of Conanission- ing, with successive five (5) year renewal terms there¬ after so long as at least two Parties hereto desire to continue operations hereunder. Such initial thirty (30) year term and any such successive five (5) year renewal term are each hereinafter sometimes referred to as an "Agreement Term." If at the end of any Agreement Term, less than two Parties desire to continue operations hereunder, this Agreement shall terminate. If, at any time, any Owner shall be adjudicated bankrupt by any court of competent Jurisdiction, this Agreement shall terminate." 5. This Third Amendment to the said Trans Alaska Pipeline System Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. IN WITNESS WHEREOF this Third Amendment to the Trans Alaska Pipeline System Agreement is executed in several counterparts, each of which shall be considered an original, as of the day and date first appearing above. ARCO Pipe Line Company Mobil Alaska Pipeline Company By Sohio Pipe Line Company Phillips Petroleum Company iy By -4- 130 Page 72 of 105 / of purchase as provided in Section 7.2 shall not apply to any such issuance, repurchase or redemption of the Equity Securities of a New Corporation." 4. Section 8.1 of the Agreement is amended and restated in Its entirety to read as follows: "8.1 Initial Term. This Agreement shall be in effect from the dace of this Agreement and until the ex¬ piration of thirty (30) years from the Dace of Commission¬ ing, with successive five (5) year renewal terms there¬ after so long as at least two Parties hereto desire to continue operations hereunder. Such initial thirty (30) year term and any such successive five (5) year renewal term are each hereinafter sometimes referred to as an "Agreement Term." If at the end of any Agreement Term, less than two Parties desire to continue operations hereunder, this Agreement shall terminate. If, at any time, any Owner shall be adjudicated bankrupt by any court of competent Jurisdiction, this Agreement shall terminate." 5. This Third Amendment to the said Trans Alaska Pipeline System Agreement may be executed in counterparts, each of which shall ue deemed an original, but all of which together constitute one and the same instrument. IN WITNESS WHEREOF this Third Amendment to the Trans Alaska Pipeline System Agreement is executed in several counterparts, each of which shall be considered an original, as of the day and date first appearing above. _ ARCO Pipe Line Company Kobll Alaska Pipeline Company By By Sohlo Pipe Line Company Phillips Petroleum Company QLLL By (/ UCE PRESIDE! -4- 131 Page 73 of 105 I of purchase as provided in Section 7.2 shall not apply to any such issuance, repurchase or redemption of the Equity Securities of a New Corporation." A. Section 8.1 of the Agreement is amended and restated in its entirety to read as follows: / "8.1 Initial Term. This Agreement shall be in effect from the date of this Agreement and until the ex¬ piration of thirty (30) years from the Date of Commission¬ ing, with successive five (5) year renewal terms there¬ after so long as at least two Parties hereto desire to continue operations hereunder. Such initial thirty (30) year term and any such successive five (5) year renewal term are each hereinafter sometimes referred to as an "Agreement Term." If at the end of any Agreement Term, less than two Parties desire to continue operations hereunder, this Agreement shall terminate. If, at any time, any Owner shall be adjudicated bankrupt by any court of competent Jurisdiction, this Agreement shall terminate." 5. This Third Amendment to the said Trans Alaska Pipeline System Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together constitute one and the same Instrument. IN WITNESS WHEREOF this Third Amendment to the Trans Alaska Pipeline System Agreement is executed in several counterparts, each of which shall be considered an original, as of the day and date first appearing above. ARCO Pipe Line Company Mobil Alaska Pipeline Company By By ' u J . L.l Cooper , President Sohlo Pipe Line Company Phillips Petroleum Company dy By 132 Page 74 of 105 of purchase as provided in Section 7.2 shall not apply to any such issuance, repurchase or redemption of the Equity / Securities of a New Corporation." 4. Section 8.1 of the Agreement is amended and restated in its entirety to read as follows: "8.1 Initial Term. This Agreement shall be in effect from the- dace of this Agreement and until the ex¬ piration of thirty (30) years from the Date of Commission¬ ing, with successive five (5) year renewal terms there¬ after so long as at least two Parties hereto desire to continue operations hereunder. Such initial thirty (30) year term and any such successive five (5) year renewal term are each hereinafter sometimes referred to as an "Agreement Term." If at the end of any Agreement Term, less than two Parties desire to continue operations hereunder, this Agreement shall terminate. If, at any time, any Owner shall be adjudicated bankrupt by any court of competent Jurisdiction, this Agreement shall terminate." 5. This Third Amendment to the said Trans Alaska Pipeline ystem Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. IN WITNESS WHEREOF this Third Amendment to the Trans Alaska Pipeline System Agreement is executed in several counterparts, each of which shall be considered an original, as of the day and dace first appearing above. ARCO Pipe Line Company Mobil Alaska Pipeline Company By By Sohio Pipe Line Company Phillips Petroleum Company •y By -4- 133 Page 75 of 105 f' FOURTH AMENDMENT TO TRANS ALASKA PIPELINE SYSTEM AGREEMENT This Fourth Amendment to the Trans Alaska Pipeline System Agreement entered into as of the first day of February, 1978, by and among Amerada Hess Pipeline Corporation, Exxon Pipeline Company, ARCO Pipe Line Company, Mobil Alaska Pipeline Company, Phillips Alaska Pipeline Corporation, Sohlo Pipe Line Company, Union Alaska Pipeline Company and BP Pipelines Inc., (herein individually called "Party" or "Owner" and collectively called "Parties" or "Owners"): WITNESSETH : WHEREAS, Owners or their predecessors in Interest entered into the Trans Alaska Pipeline System Agreement as of August 27, 1970 (which agreement as supplemented and amended from time to time is herein referred to as the "Agreement") , which provides for the design and construction of the Trans Alaska Pipeline System consisting of a 48 inch diameter petroleum pipeline from Prudhoe Bay to Valdez, Alaska and related facilities (herein called "TAPS") and WHEREAS, Owners desire to amend the Agreement as herein provided; NOW. THEREFORE, KNOW ALL MEN BY THESE PRESENTS: That in consideration of the mutual covenants herein contained and other good and valuable consideration the sufficiency of which is hereby acknowledged, Owners hereby covenant and agree as follows; 134 Page 76 of 105 ' f Fourth Amendment to Trans Alaska Pipeline System Agreement 1. The Agreement is hereby amended by deleting Section 7.7 thereof in its entirety. 2. Each Owner hereby agrees : (a) that the foregoing amendment shall be deemed to have been effective from and after the date of the Agreement, August 27, 1970; (b) that no right of action or claim of any nature has arisen or will arise against any Owner for its inability or failure to perform the terms of said Section 7.7 as it existed prior to the execution and delivery of this Fourth Amendment; and (c) that each Owner hereby waives any rights which it may have due to past performance or non-performance by any Owner of the terms of Section 7.7. 3. This Fourth Amendment to the said Trans Alaska Pipeline System Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. -2- 135 Page 77 of 1 05 Fourth Amendment to Trans Alaska Pipeline System Agreement IN WITNESS WHEREOF, this Fourth Amendment to the Trans Alaska Pipeline System Agreement is executed in several counterparts, each of which shall be considered an original, as of the day and date first appearing above. App#ov«c as ti fvti. ARCO PIPE LINE COMPANY .MOBIL ALASKA PIPELINE COMPANY Lagil Department By By. THEO 1. SOHIO PIPE LINE COMPANY PHILLIPS ALASKA PIPELINE CORPORATION By. By. EXXON PIPELINE COMPANY UNION ALASKA PIPELINE COMPANY By. By. AMERADA HESS PIPELINE CORPORATION BP PIPELINES INC. By. By. -3- 136 Page 78 of105 FIFTH AMENDMENT TO TRANS ALASKA PIPELINE SYSTEM AGREEMENT This Fifth Amendment to the Trans Alaska Pipeline System Agreement entered into as of the 13th day of March, 1979, by and between Amerada Hess Pipeline Corporation, ARCO Pipe Line Company. Exxon Pipeline Company, Mobil Alaska Pipeline Company. Phillips Alaska Pipeline Corporation, Sohio Pipe Line Company, Union Alaska Pipe¬ line Co mpany and BP Pipelines Inc. (herein called "Parties" or "Owners" WITNESSETH : WHEREAS, Owners or their predecessors in interest entered into the Trans Alaska Pipeline System Agreement as of August 27, 1970 (which agreement as amended and supplemented is herein called "Agreement") , which provides for the design and construction of the Trans Alaska Pipeline System (herein "TAPS" or "System") con¬ sisting of a 48-inch diameter petroleum pipeline from Prudhoe Bay to Valdez, Alaska, and its related facilities, with an initial design capacity of 600 M barrels per day capable of being expanded to 2 H barrels per day in two (2) economically logical expansion . stages (therein "First Expansion" and "Second Expansion") and UHEREAS, pursuant to Subsections (a) and (b) of Section 6.6 of the Agreement, Owners have heretofore initiated and constructed the First Expansion, and WHEREAS, Owners desire (1) to provide that the Second Expansion can be divided into substages to facilitate expansion of the design capacity of the System in smaller increment? as the need therefor is anticipated by Owners and (2) to make such other changes in said Agreement as Owners deem necessary to conform other provisions thereof to the division of the Second Expansion into subscages. and WHEREAS, the principles in this Fifth Amendment, unless otherwise provided herein, are not tn be considered as precedents for any subsequent amendment to the Agreement, and WHEREAS, Owners have agreed, that design capacity of the System shall hereafter be expressed in barrels per day at a temperature of 60* F, which requires modification of Table 1 in Section 3.1 of the Agree¬ ment and of Table II in Section 6.2 of the Agreement; NOW, THEREFORE. KNOW ALL MEN BY THESE PRESENTS: That in consideration of the mutual covenants herein contained and other good and valuable consideration, Owners hereby covenant and agree that the Agreement shall be and is hereby amended as follows : XR- 0000,19 137 Page 79 of 105 ;•* v FifCh Amendment to Trans Alaska Pipeline System Agreement Page Two 1. Table I in Section 3.1 of the said Agreement is amended to read as follows : TABLE I (2) (3) Percentage Design v • jL. BY. 9 XR- 00008s 162 Page 104 of 105 NINTH AMENDMENT TO TRANS ALASKA PIPELINE SYSTEM AGREEMENT This Ninth Amendment to the Trans Alaska Pipeline System Agreement, entered into as of the first day of December, 1980, by and among Amerada Hess Pipeline Corporation, ARCO Pipe Line Com¬ pany, BP Pipelines Inc., Exxon Pipeline Company, Mobil Alaska Pipeline Company, Phillips Alaska Pipeline Corporation, Sohio Pipe Line Company and Union Alaska Pipeline Company (herein called "Parties’1 or "Owners") WITNESSETH; WHEREAS, Owners or their predecessors in interest entered into the Trans Alaska Pipeline System Agreement as of August 27, 1970 (which agreement as amended and supplemented is herein called '‘Agreement"), which provides -for design and construction of the Trans Alaska Pipeline System (herein "TAPS” or "System") consisting of a 48-inch diameter petroleum pipeline from Prudhoe Bay to Valdez, Alaska, and its related facilities, with an Initial design capacity for petroleum at a temperature of 60° F of 580,000 barrels per day. capable of being expanded to 1,934,000 barrels per day in two economically logical expansion stages (therein "First Expansion" and "Second Expansion"), and WHEREAS, Owners have heretofore initiated and completed the First Expansion of the System and the First and Second Substages of the Second Expansion of the System, and have revised Table I of Section 3.1 of the Agreement as required upon completion of the said First Expansion and the said First Substage, and WHEREAS, the Agreement requires that Table I of Section 3.1 be further revised as the result of completion of the said Second Substage; NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS; That, in consideration of the mutual covenants herein contained and other good and valuable consideration, Owners hereby covenant and agree that the Agreement shall be and is hereby amended as follows: Effective as of the Date of Completion of the Second Substage of the Second Expansion, Table I of Section 3.1 of the Agreement is amended to read as follows: 163 Page 105 of 105 .* Ninth Amendment to Trans Alaska Pipeline System Agreement Page Two TABLE I (2) (3) Percentage Design (1) of Capacity Partv Ownership (Bbls./Day) ARC0 Pipe Line Company 21.3547 303,237 Sohio Pipe Line Company 33.3363 473,376 Exxon Pipeline Company 20.3378 288,797 Amerada Hess Pipeline Corporation 1.5000 21,300 Mobil Alaska Pipeline Company 4.0845 58,000 Phillips Alaska Pipeline Corporation 1.3561 19,256 Union Alaska Pipeline Company 1.3561 19,256 BP Pipelines Inc. 16.6745 236,778 IOO.OOOOI 1,420, CoO In all other respects, the -said Agreement shall continue in full force and effect. This Amendment to the said Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. IN TESTIMONY WHEREOF the parties hereto have caused this Ninth' Amendment to the Trans Alaska Pipeline System Agreement to be executed as of the day and date first appearing above. AMERADA HESS PIPELINE CORPORATION / MOBIL ALASKA PIPELINE COMPANY /b By. m, By. President ARCO PIPE LINE COMPANY PHILLIPS ALASKA PIPELINE CORPORATION-, By. By. », _£ BP PIPELINES INC. SOHIO PIPE LINE COMPANY By »»*•**« EXXON PIPELINE COMPANY UNION ALASKA fclPELINE COMPANY 1 — ~r'. Each Owner shall provide or cause to be provided a Volume of Petroleum for Pipeline Base Inventory as required to begin and maintain the operation of the System equivalent to its Percentage of Ownership in the Pipeline multiplied by the total Volume of Petroleum required for Pipeline Base Inventory. Each Owner shall also provide or cause to be provided a Volume of Petroleum for Terminal Tankage Base Inventory as required to begin and maintain the operation of the System equivalent to its Percentage of Ownership in the Terminal Tankage multiplied by the total Volume of Petroleum required for Terminal Tankage Base Inventory. Operator shall give written notice to each Owner specifying the time or limes after such notice that each Owner will be required to provide its share of Base Inventory required to commence operations. Subject to the lifting of Base Inventory as provided in Section 7.4 each Owner shall provide Base Inventory required to maintain its share when and as requested by Operator. If any Owner fails to provide its share of Base Inventory when and as requested by Operator, Operator may acquire the same and charge the cost thereof to the account of such Owner. 7.7 Transfers of Petroleum Within the System. Except as may result from a sale. transfer or assignment of an Owners interest in the System covered in Section 13 hereof, no Owner shall transfer its custodial responsibility for Petroleum within the System. Operator shall only account for transfers of Petroleum as a ticket transaction at receipt and delivery points. 7.8 Connections to the Pipeline. Connections shall be made to the Pipeline in accordance with all applicable laws and regulations and in accordance with standards and procedures which may be adopted by the Owners through the Owners Committee from time to time for the safe and efficient operation of the Pipeline. 7.9 Operation of Standby Pumping Units. Standby pumping units may be operated from lime to time in the discretion of the Operator. In the event Owners, or any of them. construct facilities qualifying as an Expansion or Substage, as those terms are used in the TAPS Agreement, and if the use of standby pumps as hereinabove authorized without the use of a drag reducing agent adds an increment of Design Capacity to that achieved by the defined Expansion facilities, the Design Capacity of the System shall include such increment attained by operating standby pumps. 21 549 SECTION 8 TAXES 8.1 Reporting and Payment of Taxes. (a) Taxes. Each Owner shall separately report and pay all franchise taxes and taxes on or measured by income relative to its operations as a separate common carrier or to its undivided interest in the System. Operator, under the direction and control of Owners and as agent for each Owner, shall (i) prepare and file reports and returns, in connection with any taxes other than franchise taxes and taxes on or measured by income and (ii) pay such taxes on or before the date due. Each Owner may request Operator, under the direction and control of and acting separately as agent for each requesting Owner, to contest any such taxes subject to the provisions for handling claims as provided in Section 9.2 hereof. (b) Tat Information. Upon the request of any Owner, Operator shall promptly furnish information needed by such requesting Owner relative to preparation and payment of its taxes. Where Operator is handling the reporting and payment of any taxes for an Owner hereunder, each Owner upon request from Operator shall furnish Operator with the necessary information required to report and pay such taxes. 8.2 Election to be Excluded from Partnership Regulations. Each Owner hereby elects that it and the operations covered by this Agreement be excluded from the application of Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code of 1954, as amended, or such portion or portions thereof as the Secretary of the Treasury of the United States or his delegate shall permit by election to be excluded therefrom. Operator is hereby authorized and directed to execute on behalf of the Owners such additional evidence of the election as may be required by regulations issued under said Subchapter K. Should the regulations require each Owner to execute such additional evidence, each Owner agrees to execute or join in the execution thereof. The election hereby made and the other provisions of this paragraph shall apply in a like manner to applicable state laws, regulations, and rulings now in effect or hereafter enacted that have an effect similar to the federal provisions referred to herein. In making this election, each Owner hereby states that the income derived from the operations under this Operating Agreement can be adequately determined without computation of partnership income. SECTION 9 INSURANCE, CLAIMS AND PROTECTION OF OPERATOR 9.1 Operator's Insurance Program. Operator shall carry and keep in force only the insurance coverages specified in the Exhibit A attached hereto, captioned "Operator's Insurance Program" with insurance companies acceptable to the Owners through the Owners Committee protecting Operator and each Owner. Operator shall charge all costs and expenses for such 22 550 insurance to Pipeline Fixed Operating Expenses. The insurance coverages set out in Exhibit A shall not be modified or revised except by agreement of the Owners. 9.2 Claims. (a) Handling by Operator. Subject to the provisions of Sections 9.2(a), (b) and (c) hereof, any claim or suit which arises out of the operation and maintenance of the System of either of the following types: (i) Any claim or suit against the Operator and/or Owners hereto (herein called a "Liability Claim") except those fully covered by insurance as provided in this Section 9 and those which are for the value of Petroleum lost covered in Section 7.3 hereof; (ii) Any claim or suit which the Operator and/or Owners have against persons who are not parties to this Operating Agreement except condemnation proceedings covered in Section 6.5 hereof (herein called a "Recovery Claim"); shall, except as hereinafter provided, be handled by Operator, who as agent for Owners shall litigate, appeal, and/or settle same subject to Section 9.2(c) hereof. The costs of handling such Liability Claim or Recovery Claim, including, but not limited to. expenses for litigation and investigation, reasonable costs for legal counsel and court costs shall be paid by Operator and such costs or any amounts received by Operator in settlement or payment of a judgment on a Recovery Claim or any amounts paid by Operator in settlement or payment of a judgment or fine on a Liability Claim shall be credited or charged to Pipeline Fixed Operating Expenses if such amounts are related to the Pipeline or to Terminal Tankage Fixed Operating Expenses if such amounts are related to Terminal Tankage. (b) Notice of Claims. Operator shall promptly notify each Owner in advance of filing any Recovery Claim and immediately upon notice of the filing of any Liability Claim. For Recovery Claims or Liability Claims estimated not to exceed $250,000, Operator shall indicate in its notice to each Owner whether the claim constitutes a Special Interest Claim. For purposes of this Subsection 9.2, a Special Interest Claim means one involving significant public, regulatory, or political implications for the Operator or the Owners, a claim likely to result in major precedent, a claim that has the potential to result in significant liability or a punitive damage award, or a claim involving patent or common carrier issues. (c) Limitation of Authority. Operator’s authority with respect to any Liability Claim or Recovery Claim is subject to the following: (i> Liability Claim. Operator shall obtain the approval of the Owners through the Owners Committee before litigating, appealing, settling, paying, or otherwise compromising any Liability Claim estimated to exceed $250,000, any Special Interest Claim, or any claim in a case in which any Owner is named as a party. 23 551 (ii) Recovery Claim. Operator shall obtain the approval of the Owners through the Owners Committee before filing, litigating, appealing, settling or otherwise compromising any Recovery Claim estimated to exceed $250,000 or any Special Interest Claim. (iii) Other Limitations of Authority. The Operator shall also comply with other more stringent limitations of its authority approved by the Owners through the Owners Committee. (d) Reservation of Owners. Notwithstanding the provisions of this Section 9, each Owner retains the right to be eliminated as a party plaintiff to any Recovery Claim except in cases where such Owner is an indispensable party to any such Recovery Claim. In the event any Owner is eliminated as a party plaintiff to any Recovery Claim said Owner shall not be responsible for any costs or expenses associated with the handling of such claim nor will said Owner participate in the proceeds of any sums recovered. In addition to counsel employed by Operator, each Owner reserves the right to be represented in any Liability Claim or Recovery Claim by counsel selected by such Owner and employed at its own expense. 9.3 Indemnification of Operator. To the extent that Operator or its employees are not protected by insurance carried by either Operator or other third parties, each Owner agrees to indemnify and hold harmless Operator and its employees from and against all claims and causes of actions for injury to and death of persons and all damages to and destruction of property, in whole or in part, caused by. resulting from or arising out of any act or omission of Operator or Operator's employees, servants, agents, contractors, subcontractors or two or more of them pursuant to this Operating Agreement, even though such act or omission constitutes gross negligence. The obligations of each Owner under this Section 9.3 shall be limited to an amount which is equal to the product of the total indemnity obligation of all Owners multiplied by each Owner’s Percentage of Ownership in the Pipeline. 9.4 Insurance Required by Government Regulation. If insurance is required by any governmental body or to meet any statutory requirement and such insurance is not being carried by Operator, each Owner, as to its applicable Percentage of Ownership, will supply evidence of insurance or self insurance to meet the requirement. If none of the Owners is able, except by the purchase of new coverage, to meet such requirement, the Operator will if authorized by all the Owners arrange to purchase such insurance for all the Owners and charge the premiums to the appropriate Fixed Operating Expense account 9.5 Contractor's Insurance Program. (a) Operator shall require all contractors to carry the minimum insurance as specified in Exhibit B. attached hereto and made a pan hereof and shall take full advantage of all insurance normally carried by contractors utilized hereunder, the cost of which would ordinarily be included in contractor’s contract price in any event. Operator shall not require insurance above the minimums set forth in Exhibit B. The contractor's insurance requirements as set forth in this 24 552 paragraph and Exhibit B may, however, be modified or revised for any contractor or for all contractors by action of the Owners through the Owners Committee. Also, Operator may modify such requirements on a case by case basis if in Operator's opinion either exposure does not warrant coverage to the extent set forth in Exhibit B or such insurance is not available to the contractor at a reasonable premium. (b) Except as stated in sections (i) and (ii) below. Operator shall use its best efforts to include in any contract entered into by Operator, as agent for each Owner, with a contractor, a provision that the contractor will be required to indemnify and save harmless Operator and each Owner against injury to or death of persoas or damage to or loss of property caused in whole or in part by the joint and/or concurrent negligence of Operator, Owners, contractor, subcontractors, or third parties, or their agents, employees or representatives. (i) Contractors need not be required to indemnify Operator or Owners for loss or damage solely caused by the negligence of Operator or Owners or Operator and Owners. (ii) Contractors shall not be liable to Operator or Owners for damage to property of Owners occurring prior to the acceptance of the contractors' work, unless the contractors have insurance coverage, or are otherwise reimbursed for such damages to property. (0 Contractors shall not ordinarily be required to provide performance bonds: However, Operator may require a performance bond if it deems it necessary and desirable under particular circumstances. (d) All policies of insurance carried by contractors and their subcontractors shall contain a waiver of subrogation against Operator, its employees and stockholders, and each Owner, its employees, stockholders and affiliated companies. 9.6 Special Insurance Provisions. (a) In the event the Owners so request, Operator shall insert clauses in all contracts with contractors and subcontractors reserving the right to purchase, maintain and keep in force at its sole cost any insurance that it may therein specify. (b) All purchases and shipments of materials, equipment, supplies or property of any type by Operator or for Operator by any contractor or subcontractor shall be on an ex-insurance basis to the extent possible regardless of the hazards or risks assumed, provided however, thi« risk assumption shall not inure to the benefit of any carrier, common or contract, except an Owner in this Operating Agreement. 9.7 Report of Concentration of Values. Operator shall furnish each Owner with a "Concentration of Values Report" each year to meet risk management requirements. 25 553 SECTION 10 MATERIALS, EQUIPMENT AND SUPPLIES 10.1 Purchase. Operator shall purchase in the name of and on behalf of each Owner all materials, equipment and supplies required to operate and maintain the System. Provided, however, that each Owner shall provide or cause to be provided, in kind, its share of the fuel gas BTU requirements for the operation of pump stations NOS. 1 through 4 inclusive along the Pipeline. Each Owner's share of such total fuel gas BTU requirements shall be determined each month by multiplying the total requirement for that month by a fraction, the numerator of which is the estimated scheduled 100 Barrel-Mile Deliveries for such Owner's account for that month and the denominator of which is the total of such deliveries for all Owners' accounts for that month and with adjustments for differences between actual and estimated shares being made for each month during the following month. Operator will accept such fuel gas at a point near pump station NO. 1 at Prudhoe Bay, Alaska as designated by Operator. If any Owner fails to furnish its share of such fuel gas in kind, Operator may purchase the same and the cost thereof shall be for the account of such Owner. 10.2 Disposal. Subject to the limitations below, the Operator shall have authority to declare any materials, equipment or facilities no longer required for the operation or maintenance of the System as surplus. Operator shall notify the Owners through the Owners Committee of any declaration in which such excess materials, equipment or facilities have a Purchase Price in excess of $1,000,000. Operator’s declaration that any materials, equipment or facilities with a Purchase Price in excess of $5,000,000 are surplus shall be subject to approval of the Owners through the Owners Committee. (a) Division in Kind. With regard to units of a similar kind of personalty which are susceptible of division in a manner which will enable each Owner of an undivided interest therein to receive a unit or units which would not exceed the value of that Owner's applicable Percentage of Ownership in the total number of such units, each Owner shall be entitled to receive in kind and separately dispose of its share of all such materials, equipment, or facilities purchased pursuant to this Operating Agreement (b) Disposal by Sale. Notwithstanding Section 10.2(a), above, each Owner authorizes the Operator as agent for each Owner to dispose of for cash its undivided interest in any surplus materials, equipment and facilities purchased pursuant to this Operating Agreement subject to the following conditions: (i) In instances where an appraisal is required, Operator shall obtain from an independent appraiser an opinion of the fair-market value of such materials, equipment or facilities. Purchase Price as used in this Section 10.2 shall mean the original cost of any item plus the costs of any improvements or additions thereto and any costs incurred in transporting such item to Alaska. 26 554 (ii) Operator may sell any item of materials, equipment or facilities by competitive bidding, public auction, bid invitation or long-term sales agreement. Operator may also make negotiated and special opportunity sales to third parties provided the sales price exceeds the appraised fair market value of the materials, equipment or facilities in question. Operator may also [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4068646. Public record. Not legal advice.