                                                                        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.,   §                                                 .:<
CONOCOPHILLIPS TRANSPORTATION,§
ALASKA, INC., AND             §
EXXONMOBIL PIPELINE CO.,      §
      Defendants.             §                              165TH DISTRICT COURT



                   ORDER GRANTING DEFENDANTS' FIRST AMENDED
     MOTION FOR PARTIAL SUMMARY JUDGMENT CONCERNING DR&R OBLIGATIONS and
     ORDER DENYING PLAINTIFF'S CROSS MOTION FOR PARTIAL SUMMARY JUDGMENT

       The Court considered the First Amended Motion for Partial Summary Judgment ofBP Pipelines

(Alaska) Inc., ConocoPhillips Transportation Alaska, Inc., and ExxonMobil Pipeline Company

(collectively, "Defendants" or "Remaining Owners") and the Cross-Motion for Partial Summary

Judgment ofUnocal Pipeline Company ("UPC"), the materials contained therein, all papers filed in

response thereto, all evidence admitted in connection therewith, all pleadings on file, and the oral

arguments of counsel. After considering the law in connection with all of the above, the Court finds that

Defendants' First Amended Motion for Partial Summary Judgment should be granted and UPC's Cross-

Motion for Partial Summary Judgment should be denied.


       In 1970, a group of major oil companies entered into agreement(s) to construct and maintain the

Trans-Alaska Pipeline System ("TAPS"). In 1974, the parties entered into lease agreements with the

State of Alaska, the United States and private individuals to secure easements and rights ofway to build

the pipeline and its accompanying roads and facilities.

                                                                                     , MEMORANDUM
                                                                       RECORDER St IS ol poor quality
                                                                       ThiS 1nstrumen
                                                                             at the ume ollmagmg




                                                                                                        2415
        Today, UPC wants to discontinue operations and revert its interest in the pipeline to the

Remaining Owners. The question before the Court is, when the pipeline ceases operations, at some

unknown time in the future, who will have the financial burden to pay to dismantle and remove the

pipeline and restore the rights-of-way ("DR&R obligations), an amount which may cost millions of

dollars. In order for UPC to receive a release from the United States and Alaska for its proportionate

share of the DR&R obligations, UPC seeks a ruling from this Court that, when it ceases operations and

reverts its ownership back to the Remaining Owners, it also transfers its DR&R obligations. The

Remaining Owners argue that, under the terms of the TAPS Agreement, only UPC's ownership and

obligations transfer to the Remaining Owners and not its DR&R obligations. By its ruling here, this court

holds that the TAPS Agreement does not transfer the DR&R obligations from UPC to the Remaining

Owners when UPC discontinues operations.


       The DR&R obligations do not transfer .from UPC to the Remaining Owners because the TAPS

Agreement does not transfer the DR&R obligations when a party discontinues its operations. The parties

primarily argue over the application of §§7.8 and 8.2(e) of the contract. 1 Section 8.2(e) requires the

Remaining Owners to "assume the obligations accruing under this Agreement" when UPC discontinues

its operations. Section 8.2(e) does not contain the additional express language of Section 7.8 that "all

commitments made pursuant hereto" also transfer. Since Section 8.2(e) fails to include provisions

expressly incorporating the Right-of-Way leases that give rise to the DR&R obligations, the DR&R

obligations do not transfer to the Remaining Owners when UPC discontinues operations.




1
 The parties also refer to Section 8.3 but that is inapplicable here because 8.3 contemplates complete
termination of the entire project and how salvage, sale, or cleanup would occur under those inapplicable
circumstances.




                                                                                             2416
      It is therefore ORDERED that Defendants' First Amended Motion for Partial Summary


Judgment is GRANTED.


      It is further ORDERED that PlaintiffUPC's Cross-Motion for Partial Summary


Judgment that the Remaining Owners must Assume UPC's DR&R Obligations is DENIED.


      SIGNED on this




                                                                                   2417
                    APP. C
Trial court order regarding “Shall Pay Claim”
              (SCR6:3687-3688)
1

                         2013-06244A / Court: 165
                                    CAUSE NO 2013-06244

    UNOCAL PIPELINE COMPANY                      (       IN THE DISTRICT COURT
                                                 (
           Plaintiff,                            (
                                                 (
    v                                            (

                                                                                            HM
                                                 (       HARRIS COUNTY, TEXAS
    BP PIPELINES (ALASKA) INC.,                  (
    CONOCOPHILLIPS TRANSPORTATION                (
    ALASKA, INC., AND EXXONMOBIL                 (
    PIPELINE CO.,                                c
                                                 (
           Defendants.                           (       165th JUDICIAL COURT

          ORDER ON PLAINTIFFS MOTION FOR PARTIAL SUMMARY IUDGMENT
         (on Plaintiff s Motion for Declaratory ludgment - Net Salvage Valuel and
         DEFENDANTS' MOTION TO DISMISS PLAINTIFFS MOTION FOR PARTIAL
                         SUMMARY IUDGMENT fLack of jurisdiction)

           On September 24, 2014, the Parties argued the Plaintiffs Motion for Partial
    Summary Judgment relating to Net Salvage Value. The Defendants argue that
    because the issue is not ripe, the Court does not have jurisdiction to consider it. The
    basis for the jurisdictional challenge is not complicated.
           This case involves the contractual obligations surrounding a joint venture
    entered into by 5 major oil companies to build and operate the Alaska pipeline       1

    The fundamental issue in this case is whether the Plaintiff   remains   contractually
    obligated to pay its proportionate share of the DR&R costs2 after it withdraws from
    the joint venture Through a myriad of motions and machinations, the parties
    continue to litigate that premier issue, and it is this issue that drives the entire case.

    The parties have estimated that the DR&R costs will be in the billions of dollars, if
    and when they are required to pay.
           "Net Salvage Value" may or may not include DR&R costs. This cannot be
                                                                                              ;2T
                                                                                                               s
    known until the Arbitration Panel is convened and can consider whether to includJ&5ÿ 'cJH o hs                 i


    -
      Trans Alaska Pipeline System Agreement , executed in 1970 ("TAPS Agreement'ÿ
                                                                                                     •3 lajZ
    and the Amended and Restated Agreement for the Operation and Maintenance oÿ
    the Alaska Pipeline System, updated December 1977 ("OA")
                                                                                                 Q
                                                                                                     §   fx
    2 DR&R is, in essence, the costs associated with the dismantling of the pipeline




                                                                                            3687
1


    DR&R costs. Meanwhile, this Court entered an order on May 14, 2014, currently on
    appeal, which held that the Plaintiff was not relieved of its DR&R obligations by
    initiating the withdrawal process provided for   in   Section 8.2 of the TAPS Agreement.
           Plaintiff argues that it might be subject to double penalty in the event the
    Court of Appeals upholds this Court's ruling from May 14, 2014 AND the Arbitration
    Panel includes DR&R costs in its calculations.
           Defendants respond (in open court and on the record) that, if the Court of
    Appeals upholds this Court's May ruling, it will not seek DR&R costs in the
    arbitration hearing.
           The issue is not ripe for determination by this Court, and, for this reason, the
    Plaintiffs Motion for Summary Judgment on the issue of Net Salvage Value must be
    denied. It is, therefore,
           ORDERED, ADJUDGED and DECREED that the Plaintiffs Motion for Partial
    Summary Judgment on the issue of Net Salvage Value is DENIED and it is further
    ORDERED, ADJUDGED and DECREED that the Defendants' Motion to Dismiss the
    Plaintiffs Motion for Partial Summary Judgment on the issue of Net Salvage Value is
    GRANTED.




    SIGNED the    /&_ day of            bof     2014.




                                                JUDGÿffiysABETH RAY




                                                sss?  at the time ot
                                                                       imaging




                                                                                          3688
    APP. D
TAPS Agreement
  (CR60-164)
                                         Page 1 of 1 05




TRANS ALASKA PIPELINE SYSTEM AGREEMENT

              BT 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




                                                   60
                                                                                    Page 2 of 1 05



                    TRANS ALASKA PIPELINE SYSTEM AGREEMENT
                                       TABLE OF CONTENTS
                                                                                   Pjj.
Index of Definitions                                                                vi

Parties                                                                              1

                                             ARTICLE I
                                    DESCRIPTION OF PIPELINE SYSTEM
    SECTION
       1.1 Description                                                              1
          1.2   Design Capacity                                                      1

                                             ARTICLE II
                                       DESIGN AND CONSTRUCTION
    SECTION
          2.1 Design and Construction Contract                    .                  I
          2.2 Construction Committee                                                 2
                (a) Members and Alternates                                           2
                (b) Meetings                                                         o

                                     ...
                (c) Action Without Meeting                                           2
                                    ...
                ( d) Committee Secretary                                             2
                (e) Certificates  ......
                                       .                                             3
                (f) Other expenses  .... .                                           3

          2.3   Powers and Functions of the Construction Committee                   3
          2.4   Effect of Construction Committee Action on Parties                   3

                                            ARTICLE III
                                          OWNERSHIP OP TAPS
    SECTION
          3.1   Ownership of TAPS                                                    3
          3.2   Ownership of Terminal Tankage                                        4
          3.3   Payment of Costs of Initial Design Capacity and Terminal Tankage    5
          3.4   Record Title                                                        5
          3.3   Form of Conveyance                                                  6

                                            ARTICLE IV
                                  OPERATION AS INDIVIDUAL COMPANIES
    SECTION
       4.1 Individual Common Carriers                                               6
       4.2 Tariffs                                                                  6
       4.3 Other Plans of Operation                                                 6

                                                   i




                                                                                              61
                                                                           Page 3 of 1 05




                                     ARTICLE V
                              OPERATION AND MAINTENANCE
                                                                           2*
SECTION
   S.I Operating Agreement                                                   S
   5.2 Power* Reserved to the Parties                                        0
   5.3 Selection of a Successor Operator                                     6

                                     ARTICLE VI
                                       EXPANSION
SECTION
   6.1 Total Expansion Capacity .                                             7
          (a) Total Expansion Capacity                                       7
          (b) Determination of Expansion Stages                              7
          (c) Revision of Expansions                                          7

   6.2   Expansion Rights of the Parties                                     7
          (a) According to Percentage of Ownership                           7
           (b) Revision of Table II                                          S
          (c) Remaining Expansion Capacity                                   S
           (d) Initiation of Expansions                                      S
   0J Commencement of        Construction of an Expansion                     9
        (a) Proposal of an Expansion                                          9
        (b) Insufficient Participation
                                           —Apportionment
                                                           —
                                                           Withdrawal of


                                                    —
               Proposal                                                       9
        ( c) Insufficient Expansion Capacity Apportionment                    9
         (d) Reinstatement of Withdrawn Proposal                              9
        (a) Elimination of Excess Capacity                                    9
        (f) Construction of Expansion                                        10
        (g) Adjustment of Percentages of Ownership                           10
   0.4   Distribution of Costs in Expansion                                  10
           (a) Initial Payment of Cost of New Facilities                     10
           (b) Redistribution of Expansion and Pre-Expansion Costs           10
           (c) Redistribution of Terminal Tankage Costs                      11
           (d) Payment                                                       11
   0.5   Review and Adjustment                                               11
           (a) Review and Adjustment                                         11
           (b) Protection of Design Capacity                                 12
   0.0   Expansion Prior to Date of Commissioning                            12
           (a) Election by Certain Parties                                   12
           (b) Settlement                                                    12
                                               ii




                                                                                     62
                                                                                           Page 4 of 1 05



                                                                                    ?ss*
>
             (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.<ll.p«                                                  1
Union                                                      1
Party and Parties                                          I
Owner and Owners                                           1
TAPS or System                                             1
Initial Design Capacity                                    1
Contract                                                   I
Contractor                                                 1



                                                                               —
Construction Committee .                                   2
Member                                                     2
                                                                           I
Alternate                                                  2
Committee Secretary                                        2
Construction Project Budget                               .3
Budget Amendment      .                                    3
Percentages of Ownership                                   3
Operator                                                   e
Operating Agreement                                        6
Alyeska                                                    6
Total Expansion Capacity                                   7
Expansions                                                 7
First Expansion                                            7
First Expansion Capacity                                   7
Second Expansion                                           7
Second Expansion Capacity                                  7
Initial Percentage                                         8
Remaining Expansion Capacity                               8
Excess Capacity                                            8
Excess Party                                               9

                                       vi                                  !




                                                                      66
                                                        Page 8 of 1 05



                                             TAPS Agreement
 Term                                             P»W
Purchasing Party                                    9
Date of Completion .                               10
Cost of all pre-expansion facilities               11
Post Expansion Percentage                          12
Inareasing Party                                   12
Allocation Factor                                  12
Allocation Ratio                                   12
Settlement                                         12
Reducing Party                                     12
Completion Option                                  12
Option Party                                       12
Final Option                                       14
Final Option Capacity                              14
Affiliate                                          16
Subsidiary                                         16
Parent Corporation                                 16
Enabling Agreement                                 16
Enabling Party                                     16
Equity Security                                    16
New Corporation                                    16
OWNER                                              16
Shareholder                                        16
Throughput Agreement                               16
Merging Party                                      17
Selling Party                                      17
Agreement Term                                     21
Term Notice                                        21
Positive Term Notice                               21
Negative Term Notice                               21
Net Salvage Value                                  22
Saleable Value               .                     23
Technical Information                              25
Party Employee .                                   26
Loaned Employee                                    28
Project Improvement                                26
Own Operations                                     27
Associated Companies                               27
Date of Commissioning                              29

                                       vii




                                                                  67
                                                                                                     Page 9 of 1 05



                       TRANS ALASKA PIPELINE SYSTEM AGREEMENT
         THIS AGREEMENT (the “Agreement-), entered into as of August 27, 1970 (the “Date of this
     Agreement-) by and among ATLANTIC PIPE LINT COMPANY, a Pennsylvania corporation ( "ATLANTIC- ) ,
     BP PIPE LINE CORPORATION, a Delaware corporation ("BP”), HUMBLE PIPE LIKE COMPACT, a Delaware
     corporation ("Humble"). AMERADA HESS CORPORATION, a Delaware corporation (“Amerada Hess”),
     HOME PIPE LINE COMPANY, a Delaware corporation (“Home"). Moan. PIPE LINE COMPANY, a Delaware
     corporation (“Mobil"), PHILLIPS PETROLEUM COMPANY, a Delaware corporation (“Phillips"), and
     UNION OIL COMPANY or CALIFORNIA, a California corporation ("Union"), (herein sometimes individ¬
     ually called Tarty" or "Owner” and collectively called Tarties” or “Owners’);

                                                WIYNESSEYH :
          WHEREAS, the respective Parties to this Agreement have previously agreed to design and construct
     an undivided interest forty-eight Inch diameter petroleum pipeline system from a point In the Prudboe
     Bay area of the North Slope m the State of Alaska to a point in or near Valdez, Alaska, including
     suitable pump stations, mnlragg terminals, docks, communications facilities and other facilities; and

         WHEREAS, the Parties to this Agreement desire to revise and amend in their entirety their existing
     agreements for the construction, ownership and operation of said petroleum pipeline system,

          THEREFORE, in consideration of the mutual covenants herein contained, the Parties agree to the
     following provisions for the construction, ownership and operation of said petroleum pipeline system;

                                                    .ARTICLE I
                                        DESOUTTTON or PTYELIN* STTTEM
          1.1 Description. The pipeline system, which will be known for purposes of Identification as die
     Trans Alaska Pipeline System (hereinafter referred to as "TAPS" or "System"), shall consist of a
     forty-eight (48) inch diameter petroleum pipeline extending from a point in the Prudboe Bay area of
     the North Slope of the State of Alaska to a point in or near the City of Valdez in the State of Alaska,
     together with suitable pump stations, tankage, terminals, docks, communications facilities and other
     facilities as generally shown on Exhibit A attached hereto and made a part of this Agreement.
          1.2 Design Capacity. The initial design capacity of the pipeline and pump stations will be
 .   approximately Six Hundred Thousand (600,000) barrels per day. Tankage, terminals, docks, com¬
_•   munications facilities and other facilities will be designed so that the over-all initial design capacity
     of the System will be approximately Six Hundred Thousand ( 600,000) barrels per day ("Initial Design
     Capacity”). TAPS will be designed to permit expansion of capacity to approximately Two Million
     (2.000.000) barrels per day.

                                                    ARTICLE    n
                                           DESICN   AND   CONSTRUCTION
          2.1 Design and Construction Contract By the execution and delivery of this Agreement, each
     Party hereby confirms that h has simultaneously executed and delivered the Agreement for the Design
     and Construction of the Trans Alaska Pipeline System (“Contract"), dated as of August 27, 1970, by
     and between the Parties hereto and ALYESEA PIPELINE SERVICE COMPANY, a Delaware corporation
     ("Contractor"). Pursuant to the terms of the Contract, the Parties appoint and authorize Contractor,
I    as agent for the Parties, to engineer, design and construct the System (including all related facilities).
1    Contractor, on behalf of the parties hereto, shall be responsible for the diligent and exp'iditious per¬
     formance of this work, shall select all subcontractors to be employed to perform engineering, design,




                                                                                                                  68
                                                                                                Page 10 of 105




construction and other related ecrvioc* ud shall supervise (heir activities to the end that   all such work
is performed in the best and soundest way, all as further provided in the Contract

     2-2 Construction Committee. The Parties recognize that it is necessary and desirable to establish
                                                                                                                   )
a committee for the efficient administration of the Contract on behalf of the Parties and to exercise
certain of the functions reserved to the Parties thereunder. A committee to be knows as the construc¬
tion committee ('Construction Committee*) is hereby established for these purposes.
         ( a) Member* and Alternate*. Each Party shall designate one representative as it* member
    ("Member*) on the Construction Committee and shall designate one representative as the Mem¬
    ber's alternate ("Alternate*) who shall represent the Party on the Construction Committee only in
    the absence of the Member Each Party whose Percentage of Ownership (as defined in Section
    3.1) appearing in Column (2) on Table I in Section 3.1 is at least Twenty-Five percent (23%)
    may designate one additional representative as a second Member and one additional representa¬
    tive as his Alternate. Exhibit B attached hereto contains the name, address and telephone number
    of each Party's M«mber(s) and Alternate* s ) on the Construction Committee. Each Party reserves
    the right from HIM to time to change its Member*s ) or Alternate* s) and their respective addresses
    and telephone numbers by giving written notice of any such change to the secretary of the Con¬
    struction Committee {“Committee Secretary”).
         (b) Meeting*. The Construction Committee may bold monthly meetings at which the Con¬
    tractor shall present progress reports on the project and such other meetings as may be requested
    by any Member or by the Contractor. All such requests shall be made in writing, or by telephooe
    confirmed in writing, to the Committee Secretary and shall state the matters to be considered at
    such meeting. The Committee Secretary shill notify each Member at least three (3) days in
    advance of any meeting of the date, time, place and purpose of the meeting. If such notice is
    given by telephone, it shall be confirmed in writing, by telegram, cable or letter to the Member
    so notified. Failure to give such notice shall not nullify any action taken at any meeting if each
    Party not re protected at such meeting by its Member* s) or Alternate**) shall waive such notice
    in writing signed by said Party's Member(s) or Alternate(s), either before or after the meeting.
    The Construction Committee shall establish rules and procedures for the conduct of meetings.
    including but not limited to the selection of a chairman and the attendance of advisors; provided
                                                                                                                   I
                                                                                                                       —
    that such rules and procedures shall not contradict any provisions of Sections 2-2 and 2.3.
         ( c ) Action Without Meeting, ft is recognized that matters requiring the immediate decision
    of the Construction Committee may arise from time to time. Any Member or the Contractor may
    propose that any matter upon which the Construction Committee is authorized to act be decided
    pursuant to the informal procedure established hereunder by giving notice to the Committee
    Secretary, which notice may be given in writing, by letter, telegram or cable, or by telephone,
    confirmed in writing. The Committee Secretary shall immediately notify each Member by tele¬
    phone of the matter to be decided and shall confirm surh notice by telegram. 1/ the Committee
    Secretary is unable to contact a Member by telephone, he shall immediately notify that Members
    Alternate, which notice shall be confirmed in writing to both the Member and his Alternate.
    Each Member or Alternate, os the case may be, shall notify the Committee Secretary in writing.
    by letter, telegram or cable, or by telephooe confirmed in writing of his approval or disapproval
    of the matter for decision. As soon as the Committee Secretary shall ascertain that a matter has
    been approved or disapproved, he shall notify all Members of the result, which notification, if
    made by telephone, shall be confirmed in writing to each Member
         (d) Committee Secretory. The Construction Committee shall appoint a Committee Secre¬
    tary and an Assistant Committee Secretary. In addition to the functions assigned to the Com¬
    mittee Secretary in subdivisions (b) and (e) of this Section 2.2, he shall prepare and retain
    custody of the original record book which will contain the minutes of all meetings, notices.
    written confirmations, certificates, and, as the Construction Committee shall direct, all other

                                                   S




                                                                                                              69
                                                                                               Page II of 105



   document* and communications relating to the Construction Committee. Duplicate copies of all
   materials in the record book shall be promptly mailed by the Committee Secretary to each
   Member. The record book shall be kept available for inspection by duly authorized representatives
   of the Parties hereto at all times and, upon termination of the Construction Committee, shall bo
   delivered to one of the Parties for safekeeping under such terms as the Construction Committee
   shall approve. All expenses incurred in connection with the performance of the duties of the
   Committee Secretary shall be borne by the Parties in proportion to their Percentages of Ownership
   in TAPS then appearing in Column (2) of Table 1 in Section 3.1 under such arrangements as the
   Construction Committee «hall approve. The Committee Secretary shall serve at the pleasure of
   the Construction Committee. The Assistant Committee Secretary shall perform the duties of the
   Committee Secretary in the event of the absence of the Committee Secretary.
        (e) Certificatei. The Committee Secretary may issue certificates with respect to actions of
   the Construction Committee. The Contractor and other third parties shall be entitled to rely on
   such certificates if they are countersigned by any Member or Alternate (other than the Membcr(s)
   or Alternateÿ}, if any, representing the Party employing the Committee Secretary).
        (f) Other Expense*. Except as provided in Subdivision (d) of this Section 2.2. each Party,
   shall pay all expenses incurred by it relating to its representation on the Construction Committee.

    2.3 Powers and Functions of the Construction Committee. The Construction Committee is
hereby authorized to exercise only the powers and functions specified as foDows:
        (a) The approval of any 'Construction Project Budget’ or "Budget Amendment" prepared
    and submitted by the Contractor pursuant to the Contract
        (b) All other matters which the Contractor is expressly required or permitted to submit to
    the Parties for decision or approval under the Contract.
        (c) All powers and functions delegated to the Construction Committee in Article* II, III.
    and VI of this Agreement.

All matters properly presented to the Construction Committee for determination shall be approved
upon the affirmative vote of Member(s) or Alternated s), as the case may be, representing Three (3)
or more Parties having Percentages of Ownership in TAPS then appearing in Column (2) of Table I
of Section 3.1 which aggregate at least Sixty-six and Two-thirds percent (66% Tc) cl the total owner¬
ship interest in TAPS,

     2.4 Effect of Construction Committee Action on Parties. Any and all decisions which die Con¬
struction Committee is authorized to moke under Section 2.3 shall be conclusively binding on all
Parties to this Agreement and shall have the same effect as a separate agreement on the matter by and
among the Parties hereto.
                                            .ARTICLE     m
                                         OwxrasHip     or TAPS
    3.1 Ownership of TAPS. TAPS (including but not limited to all fee titles, easements, leases.
permits, nghts-of-way and other interests in land) shall be owned by the Parties hereto with each Party's
undivided interest in TAPS, except as provided in Section 3.2 with respect to terminal tankage, being
equal to its percentage of ownership ('Percentage of Ownership") in TAPS as set forth in Column (2)         *
of Table I below, as such Percentage of Ownership may be amended from time to time as hereinafter
provided. The initial Percentage of Ownership of each Party in TAPS and the estimated initial daily
barecl design capacity of each Party in TAPS are set forth opposite such Party's name in Columns
(2) and (3), respectively, of Table I below, with such percentages and capacities both being those
which are applicable before an)’ expansion of TAPS capacity has been made pursuant to Article VT
of this Agreement.

                                                   3




                                                                                                            70
                                                                                             Page 1 2 of 1 05




                                                TABLE I
                                                                (»)                  (3)
                                                             PMMiH
               (1)                                               af                                             \
              p“«r                                           Ownmbp              iBMa/Pay)
             Atlantic                                         2730%                195.000
             BP                                               27,50                195,000
             Humble                                           25.00                150,000
             .Amerada Hess                                     3.00                 18,000
             Home                                              2.00                 12,000
             Mobil                                             8.50                 51,000
             Phillips                                          3.25                 19,500
             Union                                             325                  19,500

                            Totals                           100.00%               900,000

     Within nine (9) months after the Date of Commissioning of TAPS, the estimated capacities set
faith in Column (3) of Table I above will be reviewed by the Construction Committee and adjusted
to reflect changes in design capacities which are required based on line length, elevations, pipe, pump¬
ing equipment, and station spacing of TAPS as installed; and if there are any such changes, a formal
amendment to the Agreement shall be prepared and circulated to the Parties by the Construction Com¬
mittee, and the Parties will execute such formal amendment revising Column ( 3 ) above so as to credit
to each Party its percentage, as then set forth in Column (2) above, of the revised design capacity
of TAPS. It is further contemplated that Columns (1), (2). and/or (3) of Table I above will be
revised to reflect changes resulting from any Expansion of TAPS pursuant to Article VI hereof, or
changes of ownership in TAPS resulting from transfers made in accordance with Article VTI hereof.
Any reference in this Agreement to said Columns (1), (2) and/or (3) above shall, unless the context
clearly requires a different meaning, constitute a reference to the latest revision of such Columns as
of the time when the Agreement is to be applied. .Any reference in this Agreement to the Tercentage(i)
of Ownership in TAPS" shall unless the context clearly requires a different meaning, mean such
percentage/ 1 ) ax determined in accordance with what is then the latest revision of Columns (1)
and (2) above.
     32 Ownership of Terminal Tankage. Terminal tankage ( including tanks, tank farm piping, and
tank farm land ) shall be owned by the Parties hereto with each Party’s undivided interest in terminal
tankage being equal to its undivided interest percentage as set forth in Column (2) of Table LA below,
as such undivided interest percentage may be changed from time to time as hereinafter provided.
The total terminal tankage to be constructed as a part of the Initial Design Capacity shall be not leu
than Six Million (6,000.000) barrels capacity. The initial undivided interest percentage of each Party
in terminal tankage and the initial tankage capacity of each Party are set forth opposite such Party's
name in Columns (2) and (3), respectively, of Table LA below, with such percentages and capacities
both being those which arc applicable before any increase in tankage capacity has been made pursuant
to this Section 3.2 or pursuant to Article VI.
                                               TABLE IA
                                                                (SI                 (3)
                                                             UmlWded              Taoka«a
                rn
               Party
                                                                                  C*pa«ity
                                                                                   (Bbb.)
             Atlantic                                         27.50%             1650,000
             BP                                               2750               1,650,000
             Humble                                           25.00              1,500,000
             .Amerada Haas                                     100                 180,000
             Home                                              2.00                120,000
             Mobil                                             8.50               510,000
             Phillips   .                                      325                 195,000
             Union                                             325                 195,000
                            Totals                           100.00%             6,000,000
                                                                                                                ;
                                                   4




                                                                                                           71
                                                                                                 Page 13 of 105



     Within six (6) months after the date on which the Contractor notifies the Parties the con¬
struction   of TAPS has commenced, each Party, if any, desiring additaonoi tankage capacity to be
constructed as pan of the Initial Design Capacity shall specify by notice to each other Party the
terminal tankage capacity in addition to its capacity then set forth in Column (3) of Table LA which
It desires to have constructed. IS aggregate additional capacity u nominated equal to not less than
One-Half (Vi) the capacity of a Five Hundred Ten Thousand (510.000) barrel capacity tunic, addi¬
tional terminal tankage capacity shall be contmicted at a port of the initial Design Capacity at least
equal to such aggregate additional capacity, to the nearest whole Five Hundred Ten Thousand
(510,000) barret capacity tank, of additional terminal tankage capacity specified by all Parties noeni-
natiag additional capacity. If pursuant to the foregoing more or less additional terminal tankage
capacity Is to be constructed than the capacity nominated in the aggregate by all of the Parties
desiring additional tankage capacity, the additional terminal tankage capacity to be constructed shall
be allocated among such Parties in the proportion that each such Party's additional tankage capacity
nomination bears to the total additional tankage capacity nomination of »U such Parties or u such
Parties may otherwise agree. In the event of any change in tankage capacity to be constructed as a
part of the Initial Design Capacity, the Construction Committee shall cause to be prepared and circu¬
lated to the Parties hereto, and the Parties hereto shall execute a formal amendment to this Agreement
revising Columns (2) and (3) of Table I A of this Section 32 crediting to each Party its revised undi¬
 vided interest percentage and revised tankage capacity. Columns (1), (2) and/or (3) of Tabic 1A in
this Section 3.2 will also be revised to reflect changes resulting from any Expansion of TAPS or the
construction of additional tankage capacity for any Party pursuant to Article VI hereof, or changes ©f
ownership in TAPS. No Party shall be entitled at any time, without the consent in writing of all other
 Parties, to have tankage capacity constructed which would result in its ownership of tankage capacity
in excess of the aggregate of fifteen ( 15) days storage capacity for its daily System throughput capacity
 then constructed or under construction plus the capacity of One ( 1 ) Five Hundred Ten Thoutimd
 (510,000) barrel capacity tank.

     3.3 Payment of Costs of Initial Delian Capacity and Terminal Tankage. The total cost of the
Zmtial Design Capacity, except terminal tankage, shall be initially paid by the Parties in accordance
with their respective Percentages of Ownership in TAP5 appearing in Column (2) of Table 1 in
Section 3.1 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 LA in Section 3.2.


     3.4 Record Title. All land rights, including but not limited to fee titles, easements, leases.
permits, rights-of-way  and other Interests In land, required for the design, construction, operation and
maintenance of TAPS     shall be conveyed to or acquired for the Parties (in all of their names or in the
name of one Party as trustee for the benefit of all Parties). All instruments and conveyances evidencing
such land rights or the trust instruments relating thereto shall indicate each Party's respective interest
therein which interest will be the Party's Percentage of Ownership as it appears in Column (2) of
Tabic I in Section 3.1 or its undivided interest percentage in terminal tankage as it appears in Column
(2) of Table LA of Section 3.2. as the case mav be. at the time the land right b acquired or conveyed
to the Parties. When required or permitted under applicable law. such instruments and conveyances
shall be recorded, filed or otherwise made a matter of public record as so required or permitted. The
Parties will cooperate to enable each Party to receive such instruments and conveyances is may be
necessary to evidence such Party's legal title to or beneficial interest in TAPS ( including all land rights
therein) ns reflected by its Percentage of Ownership as It appears in Column (2) of Table I in Section
3.1, or its then undivided interest percentage in terminal tankage os its appears In Column (2) of Table
IA of Section 3.2, as the case may be, as amended from time to time pursuant to this Agreement
Whenever a Party's Percentage of Ownership or its undivided interest percentage in terminal tankage is
reduced by reason of an adiustment as provided in Article VT hereof or by agreement of the Parties
hereto so that such Party holds apparent legal title to or a beneficial interest in a greater Percentage of

                                                     5




                                                                                                               72
                                                                                               Page 1 4 ofl 05




Ownenhip in TAPS or greater undivided interest percentage in terminal tankage than is then owned
by such Party (except where such Party holds legal tide as trustee for the benefit of the Parties hereto),
such Party shall convey tide to       portion of its legal or beneficial ownenhip in TAPS ( including all
land rights included therein) which exceeds the Percentage of Ownenhip or undivided interest percent¬
age in terminal tankage it is then entitled to own to one or more Parties who by reason of an Expansion
then own greater Percentages of Ownenbip or greater undivided interests in terminal tankage than that
evidenced by their apparent legal title or beneficial interest.
     3*5 Farm of Convey          Each Party executing a conveyance as grantor of any interest in TAPS
(including an undivided interest in terminal tankage) shall warrant title to the interest conveyed
against rUiim by, through or under the grantor, but no further. Each such conveyance shall recite
that the interests conveyed thereby are subject to the terms of this Agreement

                                              ABTICLE IV
                                 OrauTioM    AS   iNorvmuAi. COMTANIXS
    4L Individual Common Carriers. From and after the Date of Commissioning of TAPS, each
Pasty, its successors and assigns, shall utilize its undivided interest in TAPS solely as an individual
common carrier facility.
      42 Tends. Each Party shall separately publish and file tariffs in its own name in accordance
with any applicable state and federal laws and regulations covering its share of the capacity In TAPS
and shall collect for Its own account all revenues payable by shippers under such tariffs. The Operator
( as defined in Section 5.1) shall not be a sect for any Party in connection with acceptance from shippers
of tenders for shipment of petroleum, it being understood that each Pasty, as to its capacity in TAPS.
is the carrier.

     43. Other Hans of Operation. Nothing in Sections 41 or 42 shall be deemed to prohibit any
plan of operation approved by any governmental authority having jurisdiction in accordance with any
valid and applicable order, rule, regulation and/or law.
                                              ABTICLE V
                                     OrnuTioN     AMD    MASXTTMANCX
    5.1 Operating Agreement. The operation and maintenance of TAPS shall be performed under
an operating agreement between the Parties to this Agreement and an operator (“Operator”) selected
by the Parties hereto. By the execution and delivery of this Agreement, each Party hereby severally
confirms that it intends to execute an agreement (“Operating Agreement”) in such form as shall be
unanimously agreed to by the Parties hereto with ALTZSIA PTMUNZ Snmcr COMPANT, a Delaware
corporation ( "Alyeska" ) as agent for the operation and maintenance of TAPS.
    AH references to Operator in this Agreement shall mean Alyeska so long as the Operating Agree¬
ment and any extensions thereof shall remain in full force and effect or, in the event the Operating
Agreement is terminated, the corporation selected as Operator pursuant to Section 5-3 of this Agreement

     5.2 Powers Reserved to the Parties. The Operating Agreement shall reserve certain powers and
functions to the Parties. All matters required to be approved by the Parties* shall be approved upon the
affirmative vote of Three (3) or more Parties having Percentages of Ownership as then appearing
in Column (2) of Table I of Section 3.1 which aggregate at least Sixty-six and Two-thirds percent
( 06%%) of the total ownenhip interest in TAPS.

    5.3 Selection of a Successor Operator. The Operating Agreement shall provide that the Operator
or the Parties to the Operating Agreement may terminate the Operating Agreement subject to the

                                                     0




                                                                                                             73
                                                                                            Page 15 of 105



conditions contained therein. In the event of such termination, a new operator may be selected by Three
(3) or more Parties having Percentages of Ownership which aggregate at least Sixty-si* and Two-
thirds percent (66%%) of the total ownership interest in TAPS. The Parties selecting the new
operator shall execute a written notice which shall be sent to all other Parties not executing such
notice. If the person selected as the new operator shall accept this duty, such new operator shall
execute and send to each Party hereto an instrument accepting such appointment as Operator under
the terms and provisions of the Operating Agreement (including the termination provisions thereof)        v
and agreeing to discharge the duties of the Operator thereunder from and after the effective date of
his appointment as Operator. Such instrument shall be binding upon each Party to the Operating
Agreement, and shall have the same effect 2s the several agreements by and between each Party and
the new operator to operate and maintain TAPS under the terms and provisions of the Operating
Agreement from Bnd after the effective date of the appointment of the new operator as Operator.
If the termination of the Operator is effective upon the expiration of the initial term or any renewal
term of the Operating Agreement, the new operator shall serve as Operator for the next succeeding
Agreement Term. If the termination shall be effective during the initial term or any renewal term.
 the new operator shall serve as Operator for the remainder of the current term. In either case, the
new operator shall thereafter serve as Operator for each successive term unless and until such new
operator shall be terminated sooner as Operator under the termination provisions of the Operating
Agreement.

                                            ARTICLE VI
                                              EXPANSION
     6.1 Total Expansion Capacity. The System will be designed for expansion in accordance with
the following plan :
           (a) Total Expansion Capacity. TAPS will be designed for and may be expanded to approxi¬
     mately Two Million ( 2,000,000 ) barrels per day. Accordingly, based on the estimated minimum
     Initial Design Capacity of Six Hundred Thousand (600,000) barrels per day, the total increase
     in design capacity (herein called "Total Expansion Capacity") attainable from Expansion is
     approximately One Million Four Hundred Thousand (1,400,000) barrels per day.
           (b) Determination of Expansion Stages. It is the intention of the Parties hereto that the
     design capacity of TAPS will be increased in two economically logical stages ("Expansions").
     The first Expansion (“First Expansion") will consist of the construction of three pump stations
     and of the related storage tanks, terminal facilities, communications system and other required
     facilities to result in an increase of capacity of approximately Six Hundred Thousand (600,000)
     barrels per day ("First Expansion Capacity"). The second Expansion ("Second Expansion") will
     consist of the construction of four pump stations and of the necessary associated facilities to
     increase the capacity of TAPS by approximately Eight Hundred Thousand (800,000) barrels per
     day (“Second Expansion Capacity").
         (e) Revision of Expansions. If. as a result of a revision of Table II in Subsection (a) of
    Section 6.2 pursuant to Subsection (b) of Section 6.2 or an adjustment of Table I in Section 3.1
    pursuant to Section 0.5 or Subsection (f) of Section 6.6. the Construction Committee shall deter¬
    mine that a revision is necessary in the First Expansion Capacity or Second Expansion Capacity,
    a formal amendment of this Agreement revising Subsection (b) of Section 6.1 shall be executed
    by the Parties hereto to reflect such revision.

   0.2 Expansion Rights of the Parties. The rights of the respective Parties hereto to participate tn
Expansions shall be determined in accordance with the following provisions:
        (a) According to Percentage of Ownership, The right of each Party to share in the Total
    Expansion Capacity shall be determined by its initial Percentage of Ownership m TAPS as

                                                  7




                                                                                                          74
                                                                                        Page 1 6 ofl 05




      niin«J in accordance with Columns (1) nod (2) of Table I in Section 3.1 before toy revision
other than a revision to record a transfer of an internet in the system of such Columns is made
('Initial Percentage’), to the end that die total increase in estimated design capacity in barrels
                                                                                                            \
per day initially available to each Party from all Expansions shall be as shown In Table II, as
follows.

                                           TAiLE
                                                                           (SI
                m                                                     Cspacitv (B/PI
              las.
             Atlantic                                                     385,000
             BP                                                           385,000
             Humble                                                       350,000
             Amerada Hess                                                  42,000
             Home                                                          28,000
             Mobil                                                        119.000
             Phillips                                                      45.500
             Union                                                         45.500
                           Total                                        1,400.000


     (b) Revision of Table II. At the time of the review of the Initial Design Capacity required
under Section 3.1 the Total Expansion Capacity shall be reviewed by the Construction Com¬
mittee and, if such review indicates that such quantity of Total Expansion Capacity is not
accurate, Column (2) of Table II above will be revised by the Construction Committee, in which
event the Construction Committee shall then prepare and circulate to the Parties hereto, and the
                                                                                                            )   -
Parties hereto will execute, a formal amendment to this Agreement revising Subsections (a) and
(b) of Section 6.1 and revising Table II above to credit to each Party hereto its then Percentage
of Ownership of the revised quantity of Total Expansion Capacity.
     (c) Remaining Expansion Capacity. Except as provided in Subsection (c) of Section 8.6,
Table II shall be revised at the tone the First Expansion is initiated pursuant to Subsection (d)
of this Section 6-2 bv adding Column ( 3 ) thereto, which shall set forth the remaining increase in
design capacity which is available to each Party from the Second Expansion, and the Parties shall
execute a formal amendment to this Agreement revising such Table II by adding such Column (3)
in which each Party shall be credited with the amount remaining ('Remaining Expansion
Capacity") after subtracting the amount of expansion capacity which such Party is to receive
in the First Expansion from the amount of the Total Expansion Capacity then credited to such
Party in Table II. If any Party shall have a deficit in Column (3) as a result of this revision, the
amount of such deficit shall be excess capacity ("Excess Capacity*).
     (d) Initiation of Expansions. For the purposes of this Article VI, an Expansion shall be
deemed to have been initiated at such time as (i) it has been proposed pursuant to Subsection (a)
of Section 6.3 hereof, and (ii) one of the following has occurred (x) there has been a sufficient
undertaking by one Party or agreement to participate therein by two or more Parties so that the
proposal therefor is no longer subject to withdrawal pursuant to the last sentence of Subsection (b)
of Section 8.3, or (y) a withdrawn proposal has been reinstated pursuant to Subsection (d) of
Section 6.3; provided, however, except as set forth in Section 6.8, the Second Expansion shall not
be initiated unless any Excess Capacity resulting from the First Expansion has been eliminated

                                               8




                                                                                                       75
                                                                                                Page 17 of 105



    as provided in Subjection (*) of Section 6.3 and Pasties then having a majority of the Remaining
    Expansion Capacity agree to the Expansion. The Contractor shall notify all parties of the date on
    which each Expansion is initiated.
     6.3 Commencement of the Construction of an Expansion, (a) Proposal of an Expansion.
Except os otherwise provided In Section 8 6, any Party may propose the First Expansion at any time
after the Date of Commissioning of the Initial Design Capacity and the Second Expansion may bo
proposed by any Party at any time after the First Expansion has been initiated (but not necessarily
commenced or completed) by giving written notice to the other Partita hereto. Within Forty-five (45)
days after each such notice is given, each other Party shall notify all other Parties in writing as to
whether It desires to participate in the proposed Expansion. Failure to give such notice shall be deemed
an election not to participate. In the notifications provided above, each Party ( including the Party pro¬
posing the Expansion) shall state the increase in design capacity, if any, desired by that Party from
the particular Expansion. Any such statement that a Party desires to participate in an Expansion


                                   —                   —
shall constitute such Party's agreement to participate therein. In the amount stated in the notification.
     ( b) Insufficient Participation Apportionment W'lf hdrau al of Proposal. Should the aggregate
of the desired increases in design capacity in the above-provided notifications be less than the increase
io design Capacity for the proposed stage of Expansion, the remainder of such increase shall be divided
among one or more of the Parties as they may mutually agree. However, if all of the remainder is not
so taken within seventy-five (75) days from the date the proposal is made, then the entire proposal
shall be deemed to be withdrawn as of the end of such 75-day period, subject to reinstatement as pro¬
vided in Subsection (d) of this Section 6,3

                                           —
      (c) Insufficient Expansion Capacity Apportionment. Should the aggregate of the desired
increases in design capacity set forth in the above-provided notifications total more than the increase
in design capacity for the proposed stage of Expansion, the increase to design capacity for such
Expansion shall be apportioned pro rata among the Parties having the right to and desiring to partici¬
pate therein on the basis of their respective Remaining Expansion Capacities. Notwithstanding the
next preceding sentence, however, no Party participating in an Expansion shall be requited to accept
more capacity thin its desired increase in design capacity, as set forth in its above-provided notifica¬
tion, And any design capacity made available as a result of the refusal of one or more participants in
an Expansion to accept all or any portion of the capacity In excess of the capacity requested in the
notification shall be apportioned among the remaining participants who agree to take such available
capacity, in proportion to their respective Remaining Expansion Capacities.
     (d) Reinstatement of Withdrawn Proposal. Whenever any proposal for any Expansion is with¬
drawn pursuant to the last sentence uf Subsection (b) or (c) of this Section 6.3, the Forty who pro¬
posed such Expansion, mny. by giving written notice to the other Parties within thirty ( 30 ) days next
following the expiration of the 75-day period described in said Subsection (b) or (c), reinstate such
proposil, in which case the Expansion covered by auch proposal shall be deemed to have been initiated.
Such notice of reinstatement shall constitute the agreement of the Party giving same to take that
part of the design capacity provided by such Expansion which has not been theretofore taken by -my
other party pursuant to Subsections (a), (b) and/or (c).
     (ei Elimination of Excess Capacity. Except as provided to Subsection (c) of Section 6.6, if
any Party ("Excess Party") shall have Excess Capacity upon the completion of the First Expansion.
every Party having Remaining Expansion Capacity shall have an option to purchase from the Excess
Party all or anv part of such Excess Capacity, up to but not in excess of the amount of the purchasing
Party's then existing Remaining Expansion Capacity, by giving written notice to the Excess Party,
specifying the amouat of such Excets Capacity which the Party giving the notice ("Purchasing Party*)
desires to purchase. Effective as of the first day of the first calendar month which begins after the
elapse of thirty (30) days following the giving of such nobce, (i) the Purchasing Party shall become
the owner of the amount of such Excess Capacity specified to the Purchasing Party’s said notice;

                                                   9




                                                                                                             76
                                                                                               Page 18 of 105




 (U) the Purchasing Party'* Remaining Expansion Capacity shall be reduced by the amount of capacity
 tbut purchased: (id) the Excess Party's Excess Capacity shall likewise be reduced by such amount
thus sold; (iv) the capacity thus purchased shall no longer be considered to be 'Excess Capacity*:
and (v) the tabulations appearing in Table I in Section 11 and io Table U of Section 6.2 shall
be revised accordingly by a formal amendment hereto executed by all Parties. As consideration
 for the acquisition of the portion of Excess Capacity so purchased, the Purchasing Party shall pay to
 the Excel* Party a sum determined by multiplying the original cast of aQ design capacity acquired by
the Fwas Party in tach Expansion ( including but not limited to coats incurred by the Excess Party
 as a mult of redistribution* pursuant to Section 0.4 hereof, and revisions of such redistributions),
 without any allowance for depreciation, by a fraction, the numerator of which shall be the design
 capacity thus purchased, and the denominator of which shall be the total design capacity originally
 acquired by tb* Excess Party in such Expansion, each expressed in barrels per day. Any purchase of
 design capacity pursuant to this Subsection (e) shall not be subject to the preferential option to
 purchase set forth in Section 7.2. The option provided for in this Subsection (e) may be exercised
 at any time and from time to time by any Party or Parties having such option, until all of the Excess
 Capacity has been purchased in one or more purchases by one or more Parties having the option. If
 two or more Parties desire to exercise such option to purchase Excess Capacity and the total capacity
 desired to be purchased by such Parties exceeds the amount of Excess Capacity then remaining
 available for purchase under the provisions of tins Subsection, the right of each Party who has elected
 to purchase all or any portion of the Excess Capacity available for purchase (hall be determined by the
 order in which said notice* of exercise of option have been given, as determined by postmarks tad/ os
 by telegraph company records, with the notice which has been given first in time to have priority over
the subsequent notices.
       (f) Construction of Expansion, When an Expansion has been initiated, the Parties shall proceed
to   have such Expansion accomplished pursuant to the provisions of Article II.
     (g) Adjustment of Percentages of Ownership. Whtu the new facilities are completed, tested
and substantially ready for operation, the Contractor shall notify all Parties of the date on which
operation of such facilities will commence ("Date of Completion’) which in no event shall be prior to
the Date of Commissioning. Except as provided In Section 00, the design capacity of each Party shall
                                                                                                                I   -
be adflated on the Date of Completion to reflect the design capacity (if any) acquired by each Party
in the Expansion; and the Percentages of Ownership of the Parties shall be revised so that the Percent¬
age of Ownership of each Party after the Expansion will be the same as the percentage which it owns
of the deiign capacity of the System after the Expansion. The tabulations set forth in Table I in Sec¬
tion 3.1 shall be revised accordingly by a formal amendment to this Agreement which shall be effective
as of the Date of Completion of the Expansion to which the revision relates.

    6.4 Distribution ai Costs hi Krpamion. Except as otherwise provided In Subsections (d), (•)
and (f) of Section 6.6, costs shall be distributed among the Parties as follows:
         (a) Initial Payment of Cost of New Facilities. The total cost of the new facilities (includ¬
    ing, but not limited to, any related costs that may be incurred in rearranging existing facilities)
    required for any Expansion shall be initially paid by the Parties acquiring Increases in design
    capacity or terminal tankage capacity os a result of the Expansion. Such total cost shall be
    distributed among said Parties pro rata in accordance with the distribution of the increase in
    design capacity or terminal tankage capacity among them.
         (b) Redistribution of Expansion and Pre-Expansion Costs. Effective as of the Date of
    Completion of on Expansion, said total cost of the new facilities (including but not limited to any
      related oosti that may be incurred in rearranging existing facilities) other than terminal n nVag*
      shall be redistributed among all Parties in accordance with the Percentages of Ownership as they
      appear in Table I of Section 3.1 after the ad(uatmeot pursuant to Subsection (g) of Section 0.3,
      Simultaneously, the cost of all pre-expansion facilities shall be similarly redistributed, and a

                                                   10




                                                                                                           77
                                                                                               Page 19 of 105



    settlement among all the Parties with respect to all facilities shall be made. Said cost of all pro-
    expansion facilities to be redistributed shall be determined from the accounts of the Parties ( main¬
    tained by the Contractor in accordance with the F.C.C. Uniform System of Accounts) on (lie basis
    Of (i) the accumulated investment in "carrier property’" under the I.C.C. Uniform System of
    Accounts less retirements, and before provisions for depreciation and amortization and (ii) other
    costs and expenses paid or incurred, incident to the planning, development, design and construc¬
     tion of TAPS by all Parties as provided in the nest succeeding paragraph of this Subsection (b).
    There shall be included in investment in 'earner property" for the purpose of the above redistri¬
     butions. as interest during construction for each month preceding the commencement of con¬
     struction of the Initial Design Capacity and during the period of construction of the Initial
     Design Capacity and each Expansion interest on the accumulated balance (exclusive of interest
     included therein pursuant to this sentence) of investment in the "carrier property* under con¬
     struction as of the end of the preceding month, calculated at an annual rate equivalent to 125%
     of the ben rate of interest of the First National City Bank of New York, New York on ninety-day
     loans to substantial and responsible commercial borrowers as such rate shall change from time
     to time during the construction period, each such change to become effective on the date of
     announcement of such change by the Bank
         Each Party shall, within six months after the Date of this Agreement, submit to the Con¬
    struction Committee   an accounting setting forth the amount of all of the above described other
    costs and expenses paid Or incurred by it to the Date of this Agreement for which it has not been
     reimbursed. All such costs and expenses which have previously been approved pursuant to prior
    agreements of the Parties or which the Construction Committee may approve shall be included
    in the accounts maintained by the Contractor. As of the time any redistribution of costs is made
    pursuant to this Section 6.4. the term ‘cost of all pre-expansion facilities* means (I) the cost of
    all facilities which are a part of the Initial Design Capacity, plus (Si) the cost of the First
    Expansion in the case of the Second Expansion.
         (c ) Redistribution of Terminal Tankage Costs. Effective as of the Date of Completion of an
    Expansion, the cost of all terminal tankage, including interest during construction calculated at
    provided in Subsection (b) of this Section 6.4. shall be redistributed so that each Party pays the
    portion of the total cost of all terminal tankage capacity equivalent to its then undivided interest
    in the total terminal tankage act forth in Table 1A in Section 3 2.

         ( d) Payment. Except as otherwise provided In Section 6.6, the amounts due upon any redis¬
    tribution shall be payable within thirty (30) days after the date the Contractor shall notify the
    Parties of such amounts and shall bear interest from the Date of Completion of the Expansion
    until the day payment is made at a rate equal to 125% of the best rate of interest of the Fust
    National City Bank of New York. New York, on ninety-day loans to substantial and responsible
    commercial borrowers as such rate shall change from time to time, each such change to become
    effective on the date of announcement of such change of said Bank; provided that if such rate of
    interest shall be unlawful under applicable law, then it shall be reduced to the highest lawful rate.

     8,5 Review and Adjustment (a) Review and Adjustment. Except as provided la Subsection
(f) of Section 6.8. the design capacities then appearing in Column (3) of Table I in Sectioo 31 will
be reviewed within six (6) months after the construction of any Expansion has been completed and,
if necessary, adjusted by the Construction Committee to reflect experience with operations of TAPS
as then expanded. Such tabulations will be revised and a formal amendment hereto will be prepared
by the Construction Committee and executed by the Parties hereto to reflect changes, If any, which
shall be effective as of the Date of Completion of the Expansion to which such changes relate. If such
adjustment is necessary, then Columns (2) and (3) of Table I in Section 3.1 and Column (3) of
Table II in Subsection (a) of Section 62 shall be revised so that the Percentages of Ownership and
Remaining Expansion Capacity available to each Party are adjusted to reflect the revision of the

                                                  11




                                                                                                            78
                                                                                              Page 20 of 105




design capacity- of TAPS, u then expanded. At mch time, than shall be a further review of the
redistribution made pursuant to Section 0.4 and further redistribution shell be made, if nccessarv,
to put the Parties in the position they would have been in had the formal amendment executed pur¬
suant to this Section 3.5 been executed prior to the time the redistribution pursuant to Section 6.4
was made. Any further redistribution payments shall be made and shall bear iuterMt as provided in
the provision of this Article VI governing the Expansion to which such further redistribution relates.
      (b) Protection of Design Capacity. In the event a reduction in design capacity is required pur¬
suant to Subsection (a), no Party shall be deprived of any design capacity owned by It prior to the
initiation of the Expansion. Any reduction shall be borne solely by the Parties participating m the
Expansion in the same proportions that they acquired design capacity in the Expansion.

    0.6 Expansion Prior to Data of Commissioning, Subject to the terms and conditions hereinafter
provided, any Party may propose that the First Expansion be initiated prior to the Date of Commis¬
sioning of Use Initial Design Capacity. If the Fint Expaxssion is to initiated, then the post expansion
Percentage of Ownership (Tost Expansion Percentage*) shall be computed for each Party, which
shall be the percentage which the sum of the design capacity set forth next to such Party's name in
Column (3) of Table 1 in Section 3.1 and the design capacity which it has agreed to acquire so the
Fint Expansion is of the sum of the Initial Design Capacity and the First Expansion Capacity.
     Any Party whose Port Expansion Percentage exceeds its Initial Percentage is hereinafter referred
to aa an Increasing Party* and the amount by which its Post Expansion Percentage exceeds its Initial
Percentage is hereto referred to aa it* ‘Allocation Factor*. If there is more than ona Increasing Party,
the ratio of each Increasing Party's Allocation Factor to the sum of all Increasing Parties' Allocation
Factors is herein culled itx ‘Allocation Ratio".
    (o) Election by Certain Parties. Any Party whose Initial Percentage exceeds its Post Expansion
Percentage shall elect either :
         (i) to reduce its Initial Percentage in the System to its Past Expansion Percentage. (This
    election is herein referred to as a “Settlement* and a Party electing Settlement is a ‘Reducing
    P*ty);or
         (11) to retain an option to purchase an amount of First Expansion Capacity equal to the
    difference between the design capacity, if any, it initially agrees to acquire in the First Expansion
    and an amount of design capacity not to exceed to its Initial Percentage of First Expansion
    Capacity, which option may be exercised in whole or in part at any time, but only once, on or
    prior to the Thirtieth (30th) day after the Date of Completion of the Expansion. (TTiis election is
    herein referred to as ‘Completion Option" and any Party electing the Completion Option is
    herr in referred to as an ‘Option Party". )
Each Party not electing to acquire at least its Initial Percentage of the First Expansion Capacity shall
specify in Its notice pursuant to Subsection (a) of Section 0.3 which of the above options it shall
elect and failure to so specify shall be deemed an election of Settlement
     (b) Settlement The Percentage of Ownership and the design capacity of each Reducing Party
shall be reduced to Us Post Expansion Percentage of the Initial Design Capacity ia Columns (2) and
(3) of Table I in Section 3.L The Percentage of Ownership and design capacity of each Reducing
Party in excess of its Post Expansion Percentage shall be acquired by the Increasing Parties m the
proportions determined by their respective Allocation Ratio*. A formal amendment of this Agreement
shall be executed by the Parties to reflect the foregoing revisions in Columns (2) and (3) of Table I
in Section 3.1 effective as of the date the Expansion is initiated. Each Reducing Party shall be
paid ao amount determined by multiplying the total amount of costs which would be includable
in a redistribution pursuant to Subsection (b) of Section 6.4, as then appears in the account of the
Reducing Party maintained by the Contractor on the date the Expansion is initiated, by a fraction,
the numerator of which shall be the Reducing Party's Initial Percentage minus its Post Expansion

                                                   12




                                                                                                            79
                                                                                                Page 21 of 105



Percentage and the denominator of which shall be its Initial Percentage. This amount shall be paid
by the Increasing Parties in the proportions determined by their respective Allocation Ratios, and
suck amounts shall be payable within the time period specified in end shell bear interest from the
effective date of a redistribution until the day payment is made at the rate specified in Subsection { d)
of Section 6.4.
     (c) Remaining Expansion Capacity. Table II in Subsection (a) of Section 6.2 shall be revised
by a formal amendment hereto by adding a Column (3A) in which each Party will be credited with
Remaining Expansion Capacity in the Second Expansion equal to its Percentage of Ownership, after any
adjustment pursuant to Subsection (b). No Parti' shall be deemed to have Excess Capacity' pursuant
to Subsection (b) of Section 6.2 after the First Expansion is initiated pursuant to this Section 6 8

     ( d ) Payment of Cotit. The Parties will execute a formal amendment of the Contract to provide
that all costs, other than costs for which settlement has been provided for in Subsection (b). charged
or to he charged to the undivided interest accounts of the Parties by the Contractor shall be charged
as follows:
           (f) Costs incuned or to be Incurred to complete the Initial Design Capacity shall be charged
     to the Parties In proportion to then Percentages of Ownership, after the amendment provided in
     Subsection ( b) of this Section 66. and
           (ii) The costs of the First Expansion shall be charged to the accounts of the Parties in pro*
     portion to their Post Expansion Percentages.
     (e) Exercise of Completion Option. Any Option Party may exercise its Completion Option by
notice in writing to each Increasing Party which notice shall specify:
          (i) the amount of design capacity which such Option Party is electing to acquire; or
          (ii) that it is electing not to acquire any design capacity pursuant to the Completion Option.
      Any party failing to exercise its Completion Option on or prior to the expiration date specified in
Subsection (a)(ii) of this Section 6.6 shall be deemed to have elected not to acquire any additional
design capacitv pursuant to its Completion Option. Any design capacity acquired by any Party exer¬
cising its Completion Option shall be acquired from ail Increasing Parties in the proportions deter¬
 mined by their respective Allocation Ratios.
      Each Option Party exercising its Completion Option prior to the Date of Completion of
the First Expansion shall be deemed to be the Owner of such design capacity for purposes of
utilizing such capacity as a common comer from and after the Date of Completion. Any Option
Party' exercising its Completion Option after the Detc of Completion shall become the Owner of any
design capacity it elects to acquire upon the first day of the first calendar month which begins after the
elapse of 30 days following the day the Completion Option is exercised. A formal amendment of
this Agreement shall be executed by the Parties to reflect the foregoing changes In Percentages of
Ownership and design capacities in Table I In Section 31 effective rs of the Date of Completion of
the Expansion. Effective as of the same date, a redistribution of costs determined as provided in and
including interest during construction calculated as provided tn Subsection (b) of Section 6.4 shall
be made between the Parties retaining a Completion Option and all Increasing Parties. The amounts
due upon distributions under Subsection 6.6(e) shall lie payable within the time specified in and
shall bear interest from the effective date of the redistribution until the day payment is made at
the rate specified in Subsection (d) of Section 8.4; provided, however, that any Party obligated
to make any such payment may elect to defer payment for a period of time, if any. of up to
six (6 ) months after the date of die exercise of the Completion Option to which such paymeot relates.
      (f) Reciew of Capacity The Construction Committee shall review and adjust the design capaci¬
ties appearing in Column (3) of Table I In Section 3.1 not earlier than nine (9) months and sot later
than nine (9) months and one (1) day after the Date of Completion of the First Expansion which re¬
view and adjustment, if any, will be in substitution for the reviews required pursuant to Sections 3.1

                                                   13




                                                                                                             80
                                                                                               Page 22 of 105




tad 65. If on adjustment is required, each Party will be entitled to tbe Percentage of Ownership then
appearing opposite Its name in Cokaxm (2) of Table I in Section 3.1 of tbe revised capacity of tbe
System, as       expanded; provided, however, that no Party shall obtain tesa capacity then tbe amount            )
appearing in Column (3) of Table I in Section 3.1 after tbe adjustment, if any, pursuant to Subsection
(b) of this Section 6.6. Any defeat in capacity causing tbe above proviso to be elective shall be borne
by tbe Parties acquiring tbe Expansion Capacity in tbe proportion in which they have acquired such
Expansion Capacity, determined after tbe exercise of the Completion Option. A formal amendment
to Ibis Agreement will be prepared by the Construction Committor and executed by the Parties hereto
to redact the revision of tbe design capacities.
     (g) Second Expansion. Any Party may propose the Second Expansion at any time after the
period for review and adjustment of design capacity required in Subjection (f) has elapsed. Any
Party not agreeing to acquire its entire Remaining Expansion Capacity at die date the Second Expan¬
sion is initiated may elect to retain the right to acquire up to the amount of its Remaining Expansion
Capacity (after the revision of Column (3A) in Table II has been made to reflect the acquisition of
design capacity in the Second Expansion by all Parties participating therein) at any time during the
two yuan following the Date of Completion of the Second Expansion. This right is hereafter referred
to as the 'Final Option'. Any Party electing tbe Final Option shall so specify in its notification for
the Second Expansion pursuant to tbe procedures provided in Subsection (a) of Section 6.3. The
adjustment of Percentages of Ownership pursuant to Subsection (g) of Section 6.3, tbe redistribution
of costs pursuant to Section 6.4, and tbe review and adjustment, if necessary, pursuant to Section Go
shall be made as specified in said Sections as if tbe Final Option did not exist, except that no Party
electing tbe Final Option shall be entitled to a redistribution of costs until its final Option has been
exercised, has been waived or has expired. Tbe Final Option shall be exercised or waived by notice
in writing to each of tbe Parties whose amount of design capacity acquired in the Second Expansion
exceeds its Remaining Expansion Capacity as provided in Subsection (c) of this Section 6.6. The
amount of such excess u berrsnafter referred to os Final Option Capacity (*Fiaal Option Capacity’)
which shall be represented as a deficit in Column (3A) of Table II. Each Final Option notice shall
specify:
          (1) the amount of design capacity such Party is electing to acquire; or
         (ii) that the exercising Party has elected to waive the right to acquire any design capacity
     pursuant to the Final Option.
                                                                                                                  I
                                                                                                                      —
     Upon termination of the two year exercise period, any Party electing but not exercising the
Final Option shall be deemed to have waived its right to acquire any additional design capacity.
     Any design capacity acquired by any Party exercising its Final Option shall be obtained from
all Parties then having Final Option Capacity in the proportions which each ruch Party’s Final Option
Capacity bean to the total Final Option Capacity of all Parties then having Final Option Capacity.
Any Party mcresung its Final Option shall become the Owner of any design capacity it elects to
acquire as of the first day of tlie first calendar month which begins after the elapse of thirty (30) days
following the day the Final Option is exercised. A formal amendment to reflect the changes In
Percentages of Ownership and design capacities In Table I in Section 3.1 and changes ui Remaining
Expansion Capacities and Final Option Capacities in Column (3A) of Table 11 shall be executed by
all Parties which shall be effective as of the date the Final Option is exercised or expires. Effective
at of the same date, a redistribution of costs determined as provided in, and including interest
during construction calculated as provided in. Subtectioo (b) of Section 6.4 shall be made between
the Party exercising its Final Option and all Parties from which Final Option Capacity' was so
acquired, u if tbe Percentage of Ownership appearing opposite the names of the Parties in Column
(2) of Table I, as amended pursuant to this Subsection, had been owned by them at the time of the
redistribution upon completion of the Second Expansion. Payment of the amounts due upon distri¬
butions under this Subsection (g) of this Section 66 shall be payable within the time specified in and
shad bear interest from tbe effective date of tbe redistribution until the day payment is made at the rate

                                                   14




                                                                                                             81
                                                                                               Page 23 of 105


specified in Subsection (d) of Section 8.4; provided that any Party obligated to make any such payment
may elect to defer payment for a period of time of up to six months after the date of the axerdsa of the
Final Option to which such payment relates.

     8.7 Additional Terminal Tankage, (a) Upon Expansion, Within three (3) months after notice
to the Parties that an Expansion has been initiated, each Party shall specify by notice to each other
Party the terminal tankage capacity, if any. tn addition to its capacity then set forth in Column (3)
of Table IA. after any change therein pursuant to Section 3.2, which it desires to have constructed
as a part of the E.vpanslon subject to the tankage capacity ownership limitation set forth in Section 3.2.
If additional capacity is nominated equal to not less than one- half (H) the capacity of a Five Hundred
Ten Thousand (310,000) barrel capacity tank, additional terminal tankage capacity shall be con¬
structed os a part of the Expansion equalling the aggregate amount, to the nearest whole Five
Hundred Ten Thousand (310,000) barrel capacity tank, of additional terminal tankage capacity
specified by all Parties nominating additional capacity. If pursuant to the foregoing more or less
additional terminal tankage capacity is to be constructed than the capacity nominated in the aggregate
by all of the Parties desiring additional tankage capacity, the additional terminal tankage capacity
to be constructed shall be allocated among such Parties in the ratio that each such Party's additional
tankage capacity nomination bean to the total additional tankage capacity nomination of all such
Parties or as such Parties may agree.
     (b) At Election of Parties. Subject to the tankage capacity ownership limitation set forth in
Section 3 2, any Party or Parties may at any time cause to be constructed additional tankage capacity
of not less than the capacity of one or more Five Hundred Ten Thousand (510.000) barrel capacity
tanks by giving written notice to each other Party and the Contractor. Such notice shall constitute
the undertaking of such Parry or Parties to bear the cost of constructing such additional tankage
capacity which the Contractor shall cause to be constructed for the account of such Party or Parties
subject to the provisions of Subsection (d) of this Section 6.7.
      (c) Revision of Terminal Tankage Ownership, la the event of any change its total tankage
rapacity as a result of the construction of additional tankage capacity pursuant to this Section 6.7,
the Construction Committee shall, upon die completion of such additional tankage, cause to be pre¬
pared and circulated to the Parties hereto, and the Parties hereto shall execute, a formal amendment
to this Agreement revising Columns (2) and (3) of Table IA in Section 3.2 crediting to each Party
its revised ownership percentage of and revised quantity of tankage capacity.
     ( d ) Terminal Tankage Costs. The cost of additional terminal tankage constructed os a part of
any Expansion or constructed pursuant to the provisions of Subsection (b) of this Section 6.7 shall
be borne during construction by the Parties participating in the construction of additional tankage
in the proportion that each such Party's additional tankage capacity to be constructed bears to the
total tankage capacity to be constructed for all such Parties. The cost of terminal tankage shall be
redistributed upon the completion of each Expansion as provided in Subsection (c) of Section 6.4.
and the cost of any additional tankage constructed at the election of one or more of the Parties shall
be redistributed after completion as provided m Subsection (c) of Section 6.4 upon any subsequent
redistribution of terminal tankage costs thereunder.
    (e) Options Sot Applicable. The Excess Capacity Option under Subsection (e) of Section 6L3,
the Completion Option under Subsection ( a ) of Section 6.6, and the Final Option under Subsection
(g) of Section 6.6 shall not include the nght to acquire any terminal tankage capacity from any Party.

                                             ARTICLE VO
                                    TaA-vinn or IMTZHUTS CM TAPS
   7.1 Definitions. Wherever the following terms are used in this Article VII they shall have the
meanings assigned to them tn this Section 7.1.

                                                   15




                                                                                                             82
                                                                                                    Page 24 of 105




            (a) 'Affiliate' of any corporation means (i) a company (herein sometimes called 'Sub¬
       sidiary*) of which all of the outstanding capital stock is owned directly or indirectly by such
       corporation, (ii) a company (herein sometimes called "Parent Corporation') which owns directly
       or indirectly all of the outstanding capital stock of such corporation, (ill) a company of which
       all of the outstanding capital stock Is owned direcdy or indirectly by a Parent Corporation of
       such corporation, or ( !v) in the case of BP. any company of which all of the outstanding capital
       stock is owned directly or indirectly by The British Petroleum Company Limited and/or The
       Standard Oil Company (Ohio).
            (b) “Enabling Agreement" means the agreement attached hereto is Exhibit C and any
       other similar agreement executed on behalf of persons hereafter becoming Parties to this
       Agreement.
           (e) 'Enabling    Parti/’ means any person   executing an Enabling Agreement.
            (d) 'Equity Security' means any stock or similar security, certificate of Interest or the
       participation in any profit sharing agreement, preorganizatloa certificate or subscription, trans¬
       ferable share, voting trust certificate or certificate of deposit for an equity security, or certificate
       of interest in a business trust; or any band or dabeature or other security convertible, with or
       without consideration. Into such a security, or carrying any warrant or right to subscribe to or
       purchase such a security; or any such warrant or right.
           (e) 'New Corporation' means any corporation of the types described in Subsections 7,3(d)(i)
       and (11).
           (f) “OWNER’ means any Party to this Agreement owning an undivided interest in TAPS.
          (g) ’Shareholder’ means any OWNER who transfers Us undivided interest in TAi             a
       New Corporation of the type described In Subsection 7.3(d)(1) and its successors and assigns.
            (h) "Throughput Agreement' means any throughput agreement or other covenant or under¬
       taking by any Affiliate of an OWNER or by any Shareholder or any Affiliate of a Shareholder or                  I   ~~
       by any shareholder or any Affiliate of a shareholder of a New Corporation of the type described
       in Subsection 7-3(d)(ii) for the purpose of aiding the financing of an Interest in the System, or
       any assignment thereof.

       72 Preferential Right to Purchase. Except as otherwise expressly provided in Sections 72 and
7.4:
            (a) Tranefer of a Direct Interest in TAPS. An OWNER may sell, transfer or otherwise
       dispose of all or any part cf its undivided interest in TAPS but only by a sale for cash and only
       after offering such interest to all other OWNERS who are 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, prospective 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) day* after the giving of said notice to elect to
       purchase such interest upon the same term*, 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 the right
       to complete said sale in accordance with said offer within sixty (60) day* after the expiration of
       said 45-day period; provided, that, if the OWNER desiring to sell fails so to complete raid rale
       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 who desired to tell
       shall not complete said sale unless and until said offer again has been presented to the other

                                                       16




                                                                                                                  83
                                                                                                Page 25 of105


    OWNERS, as hereinabove provided, and the said other OWNERS again have failed to elect to
    purchase on the same terms and conditions of said offer. If more than one OWNER desires to
    |oin 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.
            (b) Indirect Transfers of an Interest In TAPS. The foregoing shall also apply to (i) any
    sale, transfer or other disposition of any Equity Security Issued fay 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 entitled to exercise a preferential right to acquire the
    undivided Interest in the System represented by such Equity Securities pursuant to Section 7.0;
    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 subsidiaries of such
    New Corporation) shall have the preferential right described in clause (i) above, and (b) every
    non-selling bolder 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 Corporation ( whether
    or not such New Corporation is an OWNER) shall be determined by multiplying the undivided
    interest in the System owned by such 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.

    7-3 Transfer not Subject to a Preferential Right to Purchase. The following transactions shall
not be subject to the preferential right to purchase granted in Section 7-2:
         (a) Merger, Consolidation or Reorganisation. Any merger, consolidation or reorganization
    between an OWNER or holder of Equity Securities issued by a New Corporation, or the Parent
    Corporation of either ( "Merging Party"), and one or more of Us Affiliates or third parties; provided
    that the preferential right shall apply to any merger, consolidation or reorganizatiun with a third
    party if the Merging Party (either independently or together with any Affiliates who are also
    parties to such merger, consolidation or reorganization ) does not have assets, other then its
    interest, directly or indirectly, in the assets of TAPS at least equal in value to such interest
    in the assets of TAPS.
         (b) Sale of Asset]. A sale, transfer, or other disposition by an OWNER or holder of Equity
    Securities issued by a New Corporation, or the Parent Corporation of either ("Selling Party*), of
    all or substantially all of its assets; provided that the preferential right shall apply if the Selling
    Party (either independently or together with any Affiliates who are also selling, transferring or
    otherwise disposing of all or substantially all of their assets to the same transferee or an Affiliate
    of the same transferee) does not have assets other than its interest, directly or indirectly in the
    assets of TAPS at least equal in value to such interest in the assets of TAPS.
         ( C ) Transfers to on Affiliate
                 (i) Undivided Interest in TAPS. The sale, transfer or other disposition to an Affiliate
            of all or any part of an OWNER'S undivided interest in TAPS.
                 (ii) Equity Securities. The sale, transfer or other disposition of any Equity Security
            issued by an OWNER by or from a Shareholder or other holder of such Equity Security to an
            Affiliate or a trustee or trustees of a retirement plan of such Shareholder or of such other
            holder or of an .Affiliate of such Shareholder or other holder ( the ownership by such trustee
            Or trustees not to exceed twenty percent (20%) of all Equity Securities issued by an
            OWNER).
            ( d ) Formation of a New Corporation.
                 (i) New Corporation os OWNER. The transfer by two or more OWNERS of their
            entire respective undivided interests to TAPS to a New Corporation, aD of the Equity

                                                     17




                                                                                                              84
                                                                                                   Page 26 of 1 05



        Seaxriftw of which are owned or will be owned after such transfer, by such transferors,
        tUr Affiliate* and/or the trustee or trustees of such transferors or their Affiliates' retirement
        plan (the ownership by such trustee or trustees not to exceed twenty percent (20%) of
        the Equity Securities issued by such New Corporation) ; provided that the ownership In the
                                                                                                                     i
        aggregate oi each clear of Equity Securities of such New Corporation by each such trans¬
        feror (end Its Affiliate s and/or the trustee or trustees of its or its Affiliate's retirement plan)
        *K«n bo proportionate to the undivided interest In the System transferred to such New
        Corporation by such transferor relative to the undivided interest in the System transferred
        to such New Corporation by the other transferors.
             (ii) New Corporation ownt Equity Securities of OWNERS. The transfer of the Equity
        Securities of two or mare OWNERS by their Parent Corporations to a New Corporation, all
        of the Equity Securities of which are owned or will be owned after such transfer, by said
        Parent Corporations (and/or their Affiliates): provided that the ownership of the Equity
        Securities of such New Corporation by each Parent Corporation (and/or its Affiliates) shall
        be proportionate to the undivided interest in TAPS represented by the Equity Securities of
        the OWNER tmufamd to such New Corporation by such Parent Corporation relative to
        the undivided interest in TAPS represented by the Equity Securities of the other OWNERS
        transferred to such New Corporation by the other Parent Corporations.
        (e) Dissolution or Liquidation of a New Corporation.
             (I) New Corporation it OWNER. The transfer by a New Corporation of the type de¬
        scribed in Subdivision 7 3(d)(1) to its Shareholders, in proportion to their respective Equity
        Security interests in such New Corporation, of die entire undivided interest in TAPS of such
        New Corporation in complete liquidation or dissolution thereof.
             (U) Nau> 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 <n Lira of Acceptance of Net Salvage Value. Any Party desiring to discontinue
operations may, in lieu of accepting payment on the basis of Net Salvage Value as provided
above, reaarve the right for a period of six months after the expiration of tha Agreement Term
in which it elected to discontinue operations to negotiate for a sola of Its entire interest in TAPS
( subject to the option of die Parties desiring to continue operations to purchase same in accord¬
ance with Section 7.2) by so specifying in writing (i) at the time of giving its Negative Term
Notice as before provided, or (ii) by notice to the Operator and all Parties hereto within tec
days (10) after the Net Salvage Value is determined. If thereafter such Party is not successful

                                              22




                                                                                                       89
                                                                                                   Page 31 of 105


    in effecting a tale within the six man tinbefore described, such Party shell then be obligated to
    accept payment for its interest in TAPS upon the basis of Net Salvage Value as before provided.
    less the portion of maintenance, repair and replacement expenses corresponding to jucb Party's
    Percentage of Ownership in TAPS incurred between the date of expiration of the applicable
    Agreement Term and the end of the six months or the earlier date when decision may be made
    to accept payment on the basis of Net Salvage Value; and such Party shall then be further
    obligated to convey its interest in TAPS to the Parties desiring to continue operations hereunder.
    as before provided. If such Party is successful in effecting a sale, then upon the effective date
    thereof the purchaser shall become entitled to utilize the capacity tn TAPS representing tbo
    Interest purchased, shall pay the portion of capital expenditures and maintenance, tepair and
    replacement expenses incurred between the date of expiration of the applicable Agreement Term
    and the effective date of purchase corresponding to the interest acquired, and shall become
    obligated as of such effective date to pay die portion of all expenses, costs and liabilities there¬
    after incurred in operating, maintaining, repairing, and providing replacements and additions to
    TAPS corresponding to the interest acquired, and shall be bound to all the obligations and shall
    have ail the rights under this Agreement of the Party from whom the interest was purchased.

     8-3 Disposition of Properties Upon Termination of Agreement. Upon termination of this Agree¬
ment TAPS shall be either continued in operation by the Parties under a new agreement, sold in place
for continued operation or salvage by others, or salvaged by the Partin as they may agree unanimously.
If they cannot so agree, TAPS shall be purged of all petroleum with each Party accepting its portion of
the line ftQ, tank working stocks and tank bottoms, and all TAPS properties (including transferable In¬
terests In land, materials, equipment and all other items of value ) shall be salvaged as necessary and
divided between the Parties in accordance with their respective Percentages of Ownership, or shall
be sold at public or private sale, as the Parties may agree, with proper division between the Parties
of the proceeds of such sale. Each Party shall bear that share of the cost of salvaging and disposing
of material and cleaning up the premises which is equal to its Percentage of Ownership. Any agree¬
ment to sell the facilities in place, as provided heretofore, shall include and he subject to a prefer¬
ential option for each Party to purchase the properties by meeting the highest price offered therefor.
and if more than one Pasty chooses to exercise such option, each shall be entitled tn do so tn the
proportion that its Percentage of Ownership in TAPS bean to the total Percentages of Ownership in
TAPS of all those desiring to exercise the option. Also if salvage and disposition of the properties
between the Parties, as provided heretofore. Is necessary because of inability of the Parties to agree
unanimously upon any other course of action, each Party shall have a preferential option, before any
salvage is begun, to purchase the properties at the salable value of the transferable interests in land plus
the net salvage value of the material, equipment and other items of value (herein called “Salable
Value”), such Salable Value to be determined by agreement of the Parties or by arbitration, using
the procedure set forth in Section 11.1 hereof; and if more than one Party chooses to exercise such
option, each shall be entitled to do so in the proportion that its respective Percentage of Ownership
bears to the total Percentages of Ownership of all Parties desiring to exercise the option.

                                              ARTICLE IX
                                     Fcnoui. INCOME TAX ELECTION
     9.1 Election to be Excluded from Partnership Regulations. Each Party hereto hereby elects
that it and the operations covered by this Agreement be excluded from the application of Suhchapter K
of Chapter 1 of Subtitle A of the Internal Revenue Code of 1954. as permitted and authorized by
Section 761 of such Coda and the regulations promulgated thereunder or similar laws and regulations
hereinafter enacted or promulgated. The Parties hereby agree to execute such evidence of the election
as may be required by regulations issued under said Subchapter L Should the regulations require
each Pasty to execute additional evidences, each Party agrees to execute or Join in the execution

                                                    23




                                                                                                               90
                                                                                            Page 32 of 105



thereof. The election hereby made and the other provisions of thb Section shall apply in like manner
bo 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 the election, each of the Parties         I
represents that the income derived fay such Party from the operations under this Agreement can be
adequately determined without the computation of partnership taxable income.

                                           ARTICLE X
                                   PATMXNT or COSTS AND Exnxsxi
     10.1 Payment oi Coats and Expenses. The Parties hereto agree that all costs and expenses
incurred in the construction of TAPS, including costs and expenses as incurred prior to the Date of
this Agreement ( except any interest and other expenses related to the assignment of interests in TAPS
between the Parties) which would have been properly chargeable to the Parties If incurred by the
Contractor under the Contract, shall be paid by the Parties with each Party hereby agreeing to pay
the portion of all such costs and expenses equal to its Initial Percentage. Each Party hereby agrees
that it shall pay or provide for the payment of all costs and expenses properly chargeable to it under
and in accordance with the Contract and the Operating Agreement and under this Agreement


                                             ARTICLE XI
                                              AnmuTioN
    11.1 Arbitration Procedure. The procedure aet forth in this Section 1L1 shall apply whenever a
determination of any of the following two matters    is to be made by arbitration pursuant to the
respective provisions of this Agreement shown below, in which event the Parties shall select two
arbitrators in accordance with "(a)* or “(b)" below, whichever is applicable:
          (a) A determination of Net Salvage Value pursuant to Subsection (d) of Section 3.2, in which
     event within ten (10) days after it has been determined that the Parties cannot mutually agree
     upon the Net Salvage Value, the Party or Parties desiring to discontinue operations shall select
     one arbitrator and the Parties desiring to continue operations hereunder shall select another
    arbitrator,
        (b) A determination of Salable Value pursuant to Section 8.3, in which event within ten (10)
    days after it has been determined that the Parties cannot mutually agree upon the Salable Value,
    the Party or Parties desiring to exercise the option provided for in said Section 8.3 shall select
    one arbitrator, and the other Party or Parties hereto shall select another arbitrator.

The two arbitrators thus selected in accordance with subsections (a) or (b) hereof, as the case may
be, shall select a third arbitrator. If any such group shall fail to choose an arbitrator within the time
required heretofore or if the arbitrators chosen cannot agree upon the choice of a third arbitrator
within thirty (30) days after the last one is named, then such arbitrator or arbitrators shall be
appointed by the person who is then the Chief Judge of the United States District Court for the
Southern District of Texas. It shall be the duty of foe arbitrators promptly to arrive at a decision
as to Net Salvage Value or Salable Value, as the case may be, and foe decision of any two of said
arbitrators in writing shall be binding upon all Parties hereto. The cost of foe arbitration shall be
borne by all foe Parties according to their Percentages of Ownership in TAPS. A majority of foe
arbitrators may determine the place or places at which will be held any hearing in connection with
foe arbitration. Each Party hereto shall be given reasonable advance notioe of foe time and place
of any such hearing. Each side shall have foe right to be heard and to be represented by counsel
at any such hearing, and it shall not be necessary to observe foe rules of evidence which are applicable
to an action in a court at law.

                                                   24




                                                                                                            91
                                                                                                   Page 33 of105


                                                   ARTICLE XII
                                 TCCKNICAL INTORMATON, Lwevnows AXD FATEFCTJ
         12.1 Technical Information. Each Party shall have access to all technical information received
     by the Contractor, or resulting from, or utilized in the design, construction or operation of the System
     ( Technical Information* )
               (a) Each Party shall own an undivided interest equivalent to its Percentage of Ownership
          In the System in all Technical Information, the cost of which is includable for the purposes of a
         redistribution pursuant to Subsection (b) of Section 6.4. and shall have the right to use and dispose
         of said Technical Information in any manner it, in its sole discretion, deems appropriate,
             (b) With regard to all other Technical Information (i.e. Technical Information not within
         the scope of Subsection (a) of this Section 12.1), each Party shall have:
                     (1) the right to use said other Technical Information in its operations;
                   (2) the right to disclose said other Technical Information to its Associated Companies
              for use by them in their operations; and,
                   (3) the right to disclose said other Technical Information to third parties who ate par¬
              ticipants in a joint operation with such Party or Its Associated Companies for use in such
              operation;

         provided, however, that as to any such other Technical Information as is the proprietary Technical
         Information of one of said Parties and/or its Associated Companies and is clearly designated as
         proprietary, the other Parties each agree:
                  (i) to exercise the same degree of care in maintaining said proprietary Technical Infor¬
              mation confidential as it exercises with regard to its own proprietary technical information;
                  (ii) to disclose said proprietary Technical Information referred to in this proviso only to
              those of its Associated Companies which are obligated to exorcise the aforesaid degree of care;
              and,
                   (iii) to disclose said proprietary Technical Information referred to in this proviso only to
              third parties who are participants in a joint operation with said Party or its Associated Com¬
              panies and who arc obligated to exercise the aforesaid degree of care:

I    Nothing in this Section 12.1 shall grant or convey or be deemed to grant or convey any right whatso¬
     ever under any patent

          12.2 Patent Infringement With reference to. but only with reference to, operations conducted
L    pursuant to this Agreement each Party agrees to hold each other Parti/ free and harmless from any and
     all claims of patent infringement which are based on any patents owned or controlled by it or any
     of its Associated Companies and which are based upon inventions made prior to or during the period
l    that it is a Party to this agreement.

          12.3 Inventions by Third Parties. Each Party agrees that any patent or patent application cover¬
     ing an invention or discovery which arises nut of any separate research or development program car¬
L    ried out for the Parties by the Contractor or by a third party for the development of equipment facili¬
     ties, or techniques needed in the System shall belong jointly to the Parties and each of said Parties
     shall have an undivided interest in each such patent and patent application equivalent to each Party’s
     Percentage of Ownership in the System The ownership interests in patent rights acquired under this
L    Section 12.3 by any Party which ceases to be a Party shall pass to such Party's transferee, as pro¬
     vided in Article VII of this Agreement; provided, however, that in assigning its ownership inter-
                                                          25


L.



                                                                                                                  92
                                                                                             Page 34 of 105




erts in such patents the Party may reserve for Itself and its Associated Companies a royalty free license
to use in its Own Operations ( hereinafter defined I the Inventions covered by such patent rights. The
Parties agree that title to any such patent or patent application may be held in the name of one                 )
Party for the benefit of all Parties.
     114 Inventions by Parties. The Parties spec that any patent or patent application covering
an invention or discovery which arises out of any separate research or development program earned
out by one of the Parties or one of its Associated Companies, the costs and expenses of which have
bean paid far by the Contractor as agent for all Parties, shall belong to said Party or said Associated
Company but each of the other Parties shall have:
            (a) A nonexclusive, worldwide, irrevocable, royalty-free, non transferable right under said
      patents and patent applications to use the inventions or discoveries covered thereby in such of
     its Own Operations including oil production, pipeline, and related operations; and
            (b) An irrevocable right to extend to its Associated Companies a ncoexeclusive. worldwide.
      irrevocable, royalty-free, noatranif arable right under said patents and patent applications to use
      the inventions or discoveries covered thereby in such of its Own Operations, including oil produc¬
      tion, pipeline, and related operations.

      12.5 Party Fmplrijee* To facilitate the procurement of an experienced staff it is contemplated
that employees of the Parties and of their respective Associated Companies ("Party Employee") will be
assigned to work for Contractor pursuant to service contracts between the Party and die Contractor.
Each Party hereto agrees on behalf of itself and its Associated Companies that any and all of hi
employee* who become Party Employees will be released from such portion of such Party Employees
obligation to assign inventions to such Party or Associated Company as may be required to enable such
Party Employee to accept the obligation imposed by Contractor upon its employees with respect to
Inventions made by Contractor's employees relating to or useful in the System during their term of
employment by Contractor.
      12.6 Loaned Employee*. In addition to the Party Employees referred to in Section 12.5, each
Party may from time to time be requested by Contractor to assign or cause to be tttigntd one or more
                                                                                                                 |   -
of its employees or employees of an Associated Company to assist the Contractor for a temporary
period and such employee or mployeee may be of the type that are generally subject to the obligation
to disclose to, and only to, their employer any improvements or inventions that they may make or
conceive relating Co, or useful In, the oil business. Inchidtng pipeline operations, and to assign such
 improvements and inventions and any patent rights based thereon to said employer. If any luefa
employee ("Loaned Employee") so assigned to temporarily assist the Contractor makes a project
Improvement which is hereby defined for the purpose of this Agreement as an Improvement or inven¬
 tion. whether or not patentable, which is (f) conceived or made by such Loaned Employee during the
 time lie is assigned to assist the Contractor and which (ii) relate* to or is useful in the design, con¬
struction and operation of the System ("Project Improvement"), then such Project Improvement
 shall be disclosed to the Contractor so that such Project Improvement may be considered by the
Contractor for application In said operations. Each Party hereby agrees as follows:
            (a) That each Loaned Employee assigned by a Party or one of the Associated Companies to
       temporarily assist the Contractor will be instructed that be is to disclose to the Contractor any
      Project Improvement, notwithstanding any agreement that such employee ha* setsred into with
       his employer.
            (b) That in the event a disclosure of a Project Improvement Is made to the Contractor by
      said Loaned Employee or in the event such Project Improvement is otherwise made available
       to the Contractor by said Loaned Employee, said Party agrees to grant and hereby grants or will
      cause its Associated Company assigning the Loaned Employee to grant to the Contractor and to
      each of the other Parties:
                (I) a nonexclusive, worldwide, irrevocable, royalty-free, nontransferable right under
            patents and patent applications coveting said Project Improvement to use said Project
                                                                                                                 )
                                                    26




                                                                                                            93
                                                                                                   Page 35 of 105


                  Improvement In operations conducted under this Agreement and in its Own Operations,
                  including oil production, pipeline, and related operations; and
                       (2) an irrevocable right to extend to their respective Associated Companies a non¬
|                 exclusive. worldwide, irrevocable, royalty-free, nontramferable right under patents and
                  patent applications covering said Project Improvement to use said Project Improvement
                  in said Associated Companies' Own Operations, including oil production, pipeline, and
                  related operations.
            12.7 Own Operations. For the purpose of Sections 12.4 and 12.6 of this Article XII, the term
         "Own Operations" means:
                 (a) Operations wholly owned by a Party, or by one or more Associated Companies of a
            Party, or by a Party and one or more of its Associated Companies; and
                 (b) Operations in which a Party and/or an Associated Company owns less than the entire
            interest irrespective of the magnitude of said interest and irrespective of whether said interest
            is in the form of a stock interest or in the form of a direct ownership of physical assets, but only
            to the extent of such Party's and/or Associated Company's interest.
              128 Term. Parties agree that nothing in the Article XII shall be deemed to grant or convey
         any rights in any invention or discovery, whether or not patentable or patented, which is conceived
sLj      more than two years after the Date of Completion of the Second Expansion or January 1. 1978, which¬
         ever is the earlier. The Parties further agree that nothing in this Article XII shall be deemed to grant
         or convey any right in Technical Information of any Party or its Associated Companies developed more
ill      than two years after the Date of Completion of the Second Expansion or January 1. 1978, whichever
         is earlier,
              129 Associated Companies. An Associated Company of a Party moans (a) any company of
         which at least 50% of the voting stock is owned directly or indirectly by the Party in question, (b) a
xt       company whit* owns direedy or indirectly at least 50% of the voting stock of the Party in question.
         (c) a company of which at least 50% of the voting stock is owned direedy or indirectly by any
         company which also owns direedy or indirccdy at least 50% of the voting stock of the Party In question
ii       and (d) in the case of BP. any company of which at least 50% of the voting stock is held directly or
         indirectly by The Standard Oil Company (Ohio) and/cr The British Petroleum Company Limited.

    \>                                              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


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                                                                                                           . H®
                                                                                                         * **



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                                                                                  £ PS MS                                         CC
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                                                           to                               PS Mi

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                                                                                                        of         AL**“*

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                                                                                                             A
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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
                  <1)                                   of           Capacity
                 Part                                Ownership      (Bbls./Dav)

            ARCO Pipe Line Company                     21.001        243,600
            Sohio Pipe Line Company                    33.34         386,744
            Exxon Pipeline Company                     20.00         232,000
            Amerada Hess Pipeline Corporation           1.50          17,400
            Mobil Alaska Pipeline Company              5.00           58,000
            Phillips Alaska Pipeline Corporation       1.66           19,256
            Union Alaska Pipeline Company              1.66           19,256
            BP Pipelines Inc.                         15.84          183,744
                                                     100. 00Z      17l60, 000
    l
                 2. Table II in Section 6.2 of the said Agreement is amended
            to read as follows:
                                         TABLE II
                                                                           (3)
                                                         (2)            Remaining
                                                     Expansion          Expansion
                  (1)                                Capacity           Capacity
                 Party                                 (B/D)              (B/D)

            ARCO Pipe Line Company                    372,350           162,540
            Sohio Pipe Line Company                   372,350           258,050
            Exxon Pipeline Company                    338,500           154,800
            Amerada Hess Pipeline Corporation          40,620            11.610
            Home Pipeline Company                      27,080             -6-
            Mobil Alaska Pipeline Company             115,090            38,700
            Phillips Alaska Pipeline Corporation       44,005            12,850
            Union Alaska Pipeline Company               44.005           12,850
            BP Pipelines Inc.                            -6-            122,600
                                                     1,354,000          774, OOD



        l
                                                       XR-     000040
                                                                             4v
                                                                             138
                                                                   Page 80 of 1 05




        Fifth Amendment to
l       Trans Alaska Pipeline System Agreement
        Page Three
           3. Subsection (a) of Section 6.5 of the Agreement ia amended by
        inserting the words "and Subsection (h)M after the words "Sub¬
        section (f)" in the first sentence of that Subsection (a).
           4. Subsection (b) of Section 6.1 of the Agreement is amended and
        restated in its entirety to read as follows:
               (b) Determination of Expansion Stages. It is the
          intention of the Parties hereto that the design capacity
          of TAPS will be Increased in two (2) economically logical
          stages ("Expansions"). The First Expansion ("First Expansion")
          will consist of the construction of three (3) pump stations
          and of the related storage tanks, terminal facilities, com¬
          munications system and ocher required facilities to result in
          on Increase of capacity of approximately Six Hundred Thousand
          (600 M) barrels per day ("First Expansion Capacity"). The
          Second Expansion ("Second Expansion") will consist of the
          construction of four pump stations and of the necessary
          associated facilities to increase the capacity of TAPS by
          approximately Eight Hundred Thousand (600 M) barrels per
          day ("Second Expansion Capacity"); provided, that a portion
          of Che Second Expansion may be accomplished in subscages (herein
          "Substage(s)") as described in Exhibit "D" attached hereto and
    l     made a part of this Agreement in accord with the provisions of
          Subsection (h) of Section 6.6 of this Agreement. Each Sub¬
          stage shall be designed utilizing the engineering criteria
          currently applicable to the existing System in order to
          achieve the same operating integrity. In the event any
          Substage or Substages are initiated consisting of an
          estimated design capacity of less chan 800 M barrels per
          day, references in other provisions of this Agreement to
          Expansion shall be deemed to be a reference to such Substage
          or Subscages.
           5. The first sentence of Subsection (g) of Section 6.6 of
        the Agreement is amended and restated in its entirety to read
        "Any Party may propose the balance of the Second Expansion or any
        subscage thereof defined by unanimous agreement of the Owners at any
        time after the First Substage described in Exhibit D hereto has been
        initiated, but not necessarily completed."

            6. Section 6.6 of this Agreement is amended by adding the
        following Subsection (h) :




                                                 XR-
                                                       000041
                                                                            4*
                                                                            139
                                                                Page 81 of 105



    Fifth Amendment to
    Trans Alaska Pipeline System Agreement
1   Page Four

           (h)   * Substages.


                (1) Initiation. Any Party may propose the
          initiation of one or more Substages of the Second
          Expansion as defined in Subsection (b) of Section 6.1.
          If Parties having 511 of Substage Capacity Entitlement
          shown below in Subsection (h)(2) agree that the Sub¬
          stage or Substages may be initiated, such Substage (s)
          may be initiated utilizing the procedures set forth
          in Section 6.3. If the aggregate of the desired
          increases of Design Capacity stated in written
          notices provided by the Parties exceeds the Design
          Capacity of the proposed Substage(s), the Design
          Capacity of such Substage (s) shall be apportioned
          among the Parties desiring to participate In such
          Substage (s) in proportion to their respective Sub-
          stage Capacity Entitlement Percentages shown below
          in Subsection (h)(2) of -this Section 6.6 rather than
          in proportion to their respective remaining capacities
          as indicated in Subsection (c) of said Section 6.3.
          In other respects. Section 6.3 as originally written
          shall remain unchanged and shall govern the initiation
          of all Substages.
l
                 (2) Substage Capacity Entitlement. The magnitude
           of each Party's right to participate in any Substage
           proposed is referred to as "Substage Capacity Entitle¬
           ment". The Substage Capacity Entitlement of each Party,
           expressed as a percentage of the design capacity to be
           obtained from such Subs cage, in each and every Substage
           proposed (whether before or after the Date of Cotnolssloning
           of the System, the completion of the First Expansion or
           any previously initiated Substage) , shall be the percentage
           shown below:
                  Party                        Percentages

          ARCO Pipe Line Company                 21.00%
          Sohio Pipe Line Company                33.34
          Exxon Pipeline Company                 20.00
          Amerada Hess Pipeline Corporation       1.50
          Mobil Alaska Pipeline Company           5.00
          Phillips Alaska Pipeline Corporation    1.66
          Union Alaska Pipeline Company           1.66
          BP Pipelines Inc.                      15.84
                                                 100.00%

l
                                                   XR-
                                                           000042


                                                                          140
                                                           Page 82 of 105




fifth Amendment to
Trans Alaska Pipeline System Agreement
Page Five

            Provided, however, that no Owner may participate
            in any Substage if at the time notice of partici¬
            pation is required as specified in Section 6.3 (a),
            such Owner has a Substage Option as to any Substage
            which option has not been exercised, waived or
            allowed to expire.
                  (3) Substage Option. In response to any proposal
            for the initiation of one or more Substages, each Party
            not then agreeing to take its full Substage Capacity
            Entitlement therefrom may elect to retain an option to
            acquire all or any part of such Substage Capacity Entitle¬
            ment which it does not agree to take in response to such
            proposal. This option is referred to as "Substage
            Option". Any Party electing to retain a Substage Option
            snail so specify jLn its written notice given to all other
            Parties in response to any proposal to initiate one or
            more Substages utilizing procedures sec forth in Sub¬
            section (a) of Section £.3.
                 (A) Substage Option Capacity, The amount of design
            capacity taken by a Party from any Substage in excess
            of such Party's Substage Capacity Entitlement and held
            subject to one or more Substage Options retained by
            other Parties shall be referred to as "Substage Option
            Capacity" until such Substage Options are exercised,
            waived or allowed to expire.
                  (5) Construction of Substage. When any Substage
            is initiated, the Parties shall proceed to have such
            Substage accomplished pursuant to the provisions of
            Article II. All costs and expenses incurred in connection
            with each Substage Initiated, including the cost of
            rearranging existing facilities made necessary thereby,
            shall be initially paid by the Parties taking all or any
            part of their Substage Capacity Entitlement relating to
            such Substage in accordance with the percentage distri¬
            bution among them of the increase in design capacity
            from such Substage at the time of its initiation.
                 (6) Adjustment of Percentages of Ownership and
            Redistribution. Each time a Substage is initiated, the
            Remaining Expansion Capacity of each Party shall be
            reduced by the amount of its Substage Capacity Entitle¬
            ment (in barrels/day of design capacity) related to


                                             XR-
                                                   000043
                                                                  <£N
                                                                   141
                                                                     Page 83 of 105

            Fifth Amendment to
            Trans Alaska Pipeline System Agreement
            Page Six

l                    such Substage and Column (3) of Table II found in
                     Subsection (a) of Section 6.2 shall be adjusted
                     accordingly by a formal amendment to this Agreement
                     executed by all Partita. Effective as of the Date
                     of Completion of each Substage (and thereafter, on
                     the effective date of the exercising of each Sub¬
                     stage Option related thereto) there shall be an
                     adjustment of Percentages of Ownership pursuant to
                     Subsection (g) of Section 6.3 and a redistribution
                     of costs pursuant to Section 6. A as if no Substage
                     Options existed, except that no Party retaining a
                     Substage Option shall be entitled to a redistribution
                     of costs following completion of the Substage as to
                     which a Substage Option was retained unless such Sub-
                     stage Option has been exercised, has been waived or has
                     expired*. The amount due upon any redistribution under
                     this 5ubsection (h) shall be determined as follows:
                                 (i) Upon the Date of Completion of any
                            Substage, or.. upon the waiver or expiration of
                            any Substage Option, the amounts due shall be
                            determined as provided in, and including interest
                            during construction as provided in, Subsection (b)
                            of Section 6. A. Amounts due and payable upon the
                            Date of Completion shall bear Interest from the
    »                       Date of Completion until paid. Amounts due and
                            payable upon the waiver or expiration of any Sub-
                            stage Option shall bear interest from the date of
                            waiver or expiration until paid.
                                (li) Upon the exercising of any Substage
                            Option, the amounts due shall be determined as
                            provided in, and including Interest during con¬
                            struction as provided in, Subsection (b) of
                            Section 6. A and redistribution shall be made
                            between the Party exercising a Substage Option
                            and the Party or Parties holding the Substage
                            Option Capacity thereby acquired as if the Per¬
                            centage of Ownership appearing opposite their
                            names in Column (2) of Table I found in Section 3,
                            as amended pursuant to this Subsection (h)(6) of
                            this Section 6.6, had been owned by them upon
                            completion of the Substage as to which the Sub¬
                            stage Option so exercised was retained. Such
                            amounts sKall bear interest from the date such
                            exercising Party becomes the Owner of such
                            capacity as provided in Subsection (g)(7) of
                            this Section 6.6. until paid.
                               (lii) Upon the completion of the Review of
        l                   Capacity of any Subscage(s), the amounts due, if

                                                         XR-           4



                                                                               142
                                                             Page 84 of 1 05



    Fifth Amendment to
    Trans Alaska Pipeline System Agreement
    Page Seven
\

                   any. shall be determined as provided in, and
                   Including interest during construction as pro¬
                   vided in. Subsection (b) of Section 6.4 as
                   necessary to put the Parties in the position,
                   as to payment of costs, they would have been in
                   had the formal amendments executed pursuant to
                   Subsection (h)(9) of this Section 6.6 following
                   the completion of such Review of Capacity been
                   executed effective as of the Date of Completion
                   of auch Substage(s). Such amounts shall bear
                   interest from the date of review until paid.

              Subsection (d) of Section 6.4 shall be controlling as
              to the period within which the amounts due and payable
              shall be paid and as to the Interest rate which will
              be applicable. Any Party obligated to make such a
              payment may elect to defer such payment for an addi¬
              tional period of time, up to six months after the date
              of the exercise, waiver or expiry of a Substage Option
              to which such payment relates, at the same rate of
              interest.

l                   (7) Rules Relating to Substage Options. Substage
              Options may be exercised in whole or in part; but if any
              Substage Option is exercised as to less then all of the
              design capacity covered thereby, that Substage Option
              shall be deemed to have been waived aa to the remainder
              of the design capacity covered thereby. Substage Options
              may be exercised only against Substage Option Capacity
              obtained in the same Substage as the Substage Option
              being exercised. Substage Options held by each Party
              shall be exercised or waived sequentially, in the order
              in which they were retained. Each Substage Option shall
              be exercised or waived by notice in writing to each of
              the other Partlea then holding Substage Option Capacity
              acquired in the same Substage es to which the Substege
              Option being exercised or waived was retained. Each
              such notice shall either (a) specify the amount of design
              capacity the Party sending aucn notice is electing to
              acquire, or (b) state that the Party sending such notice
              is electing to waive its right to acquire design capacity
              pursuant to thfe Substage Option which is the subject of
              said notice. Any Party holding a Substage Option may
              exercise or waive same at any time prior to the expiration
              of two years following the Date of Completion of the Sub¬
              stage as to which it was retained or January 1, 1990,
              whichever occurs later. Any Substage Option retained


                                                  XR-   000045


                                                                       143
                                                             “Page 85 oflOS




    Fifth Amendment to
v   Trans Alaska Pipeline System Agreement
    Page Eight

             which is not exercised or waived within two years
             following the Date of Completion of the Substage as
             to which it was retained or January 1, 1990, whichever
             occurs later shall be deemed to have expired at the
             end of such period. Parties exercising Substage
             Options shall acaulre design capacity from all other
             Parties thep holding Substage Option Capacity subject
             to the Substage Option being exercised in the pro¬
             portions in which such Substage Option Capacity held
             by each such Party bears to the total of such Substage
             Option Capacity held by all such Parties. Any Party
             exercising a Substage Option shall become the Owner of
             the design capacity as to which such option is exercised
             as of the first day of the first calendar month which
             begins after the expiration of thirty (30) days fol¬
             lowing the date of notice by which its Substage Option
             is exercised.
                    (8) Revision of Table I. Following the completion
             of each Substage and following the exercising of each
             Substage Option, a formal amendment to this Agreement
l            shall be executed by the Parties revising Table I in Sec-
             tion 3.1 to reflect the results of the adjustment of
             Percentages of Ownership as provided for in Subsection
             (h)(6) of this Section 6.6. Such amendment shall be
             effective as of the Date of Completion of such Substage
             or as of the effective date of transfer of ownership
             resulting from the exercising of such Substage Option as
             provided for in said Subsection (h)(6), whichever is
              applicable .

                   (9) Review of Design Capacity. The Construction
              Committee shall review and, if necessa ry, adjust the
              design capacities appearing in Column (3) of Table I
              of Section 3.1, not earlier than three hundred thirty-
              five (335) days and no later than three hundred sixty-
              five (365) days after the Date of Completion of each
              Substage in the order in which such Substages are
              initiated, provided the System has operated without
              major disruption an aggregate of 335 days (but not
              necessarily 335 consecutive days) , and provided further
              that if the System has not operated without major dis¬
              ruption for such time, such review will be delayed until
              the System has so operated and will be completed within
              thirty (30) days thereafter. These reviews and adjust¬
1             ments will be in substitution for any other review

                                                      :
                                                XR-       000046


                                                                      144
                                                               Page 86 of 105




l   Fifth Amendment to

              -
    Trans Alaska Pipeline System Agreement
    Page Mine

          and adjustment related to any Substage. Upon such review
          the design capacity of the System and any Substage shall
          be determined as set out in Subsection (h) (10) of this
          Section 6.6. If any adjustment in design capacity is
          required following any such review, each Party's share
          of the design capacity appearing opposlte its name in
          Column (3) of Table I in Section 3.1 will be adjusted
          to reflect such Party’s Percentage of Ownership of the
          adjusted design capacity of the System, as then expanded;
          provided, however, any deficit or increase in additional
          design capacity provided by the Substage just completed
          as revealed by any such review, shall be deducted from
          or added to the capacities of the Parties acquiring the
          design capacity provided by such Substage in the pro¬
          portions in which they have agreed to acquire such
          design capacity either when the Substage was initiated
          or by later exercise of Substage Options. A formal
          amendment to this Agreement will be executed by all
          Parties hereto to reflect the revision of the design
          capacity and any adjustments of Percentages of Owner¬
          ship in Column (2) of Table I in Section 3.1, and a
          redistribution will be made in accordance with Sub¬
          section (h)(6) (Hi) of this Section 6.6. If any Sub¬
          stage is initiated before a previously initiated
          Substage is completed and this fact creates significant
          difficulties in obtaining a satisfactory review of
          design capacity following completion of the earlier
          Substage, the Construction Committee may, in its
          discretion, defer the review of capacity following com¬
          pletion of the earlier Substage and combine same with
          the review of capacity following completion of the
          later Substage. In such event, the additional design
          capacity found to have been provided by both of such
          Substages shall be divided between and attributed to
          such Substages in proportion to their relative design
          capacities as determined at the time of the proposal
          pursuant to Subsection 6.6(g)(1). In the event of a
          deficit or Increase, the design capacity covered by
          Substage Option Capacity reviewed and held subject to
          Substage options shall be adjusted by formal amendment
          of this Agreement, executed by all Parties, revising
          Columns (2) and (3) of Table III which is described
          below in Subsection (h) (11) of this Section 6.6 and/or
          the subsequently created, sequentially numbered, and
          similarly structured Table or Tables in which such Sub¬
          stage Options are recorded.

                                                       '
                                                           000047
                                                 XR-
                                                                      4,v
                                                                       145
                                                                Page 87 of 105




    Flfch Amendment Co
1   Trans Alaska Pipeline System Agreement
    Page Tan

                (10) Determination of Design Capacity.  Upon review
           of capacity of any Substage or Substages, thedesign capa¬
           city of Che System shall be the maximum dailycapacity
           (expressed in barrels per day and measured atPump
          Station 1) which the System is capable of achieving at
          the time of the review with all facilities operational,
          adjusted for seasonal variation over a year for a petro¬
          leum with properties as shown in Exhibit "F" attached
          hereto and made a part hereof, and corrected to a 60* F
          volume using ASTMD  -1250, Table 6 entitled "Reduction
          of Volume to 60 Deg F against API Gravity at 60 Deg F"
          dated 1952. The adjustments required hereinabove for
          seasonal variations and the petroleum properties shall
          be calculated utilizing the hydraulics program of the
          operator of the System.

           The additional design capacity provided by any Substage
           shall be the difference between the design capacity of
           the System as determined in this Subsection (h)(10)
           and the design capacity shown in Column (3) of Table I,
           Section 3.1 prior to the adjustment made upon the Date
           of Completion of such Substage.
                (11) Table III. If one or more Substage Options
           are retained by any of the Parties at the time the
           First Substage is initiated, a formal amendment of
           this Agreement creating Table III, will be executed
           by the Parties. Table III will be structured as set
           forth in Exhibit "E" attached hereto and made a part
           hereof and as to the First Substage will show in
           Column (2) design capacity covered by SubsCage Option
           Capacity held subject to Substage Options. Similarly, if
           Substage Options are retained when subsequent Substages
           are initiated, formal amendments shall be executed by
           the Parties creating additional Tables for each such Sub¬
           stage initiated, covering Substage Options retained, as
           to each of these Substages, and structured in the same
           manner as Table III. As Substage Options reflected by such
           Tables are exercised, waived or allowed to expire, such
           Tables will be revised, by formal amendment of this
           Agreement, until all Substage Options covered thereby
           have been exercised, waived or allowed to expire.



(


                                                   ;
                                             XR-
                                                       000048

                                                                        146
                                                                Page 88 of 105




(.
     Fifth Amendment to
     Trans Alaska Pipeline System Agreement
     Page Eleven

     This 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 TESTIMONY WHEREOF this 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 ALASKA PIPELINE
I.                                   CORPORATION

     By.                             By.

     EXXON PIPELINE COMPANY          UNION ALASKA PIPELINE COMPANY

     By.           v   VT-I-TC*Cy-   By.

     AMERADA HESS PIPELINE           BP PIPELINES INC.
     CORPORATION

     By.                             By.




I
                                                   XR-
                                                         000049



                                                                        147
                                        Ev   IT D
              TO FIFTH AMENDMENT TO TRANS    HOTPIPELINE SYSTEM AGREEMENT
                    DESCRIPTION OF SUBSTAGES OF THE SECOKD EXPANSION

                     BASE CAPACITY
                     (INITIAL AND        FIRST             SECOND           THIRD
                     FIRST EXPANSION)    SUBSTAGE          SUBSTAGE         SUBSTAGE
Dealgn
Capacity
of System           1.160 MBD
Additional                               PUTSping Unit     PS #7 With       PS #5 With
Facilities                               at Pump           2 Permanent      2 Permanent
Required                                 Station 2         Pumping          Pumping
                                                           Units            Unite
Approximate   f
Design -
Capacity                                             (1)
of System                                1,360 MBD         1 ,420 MBD       1,520 MBD
Additional          Topping Units, BWT Tankage, Vapor Recovery Compression and Bertha
Miscellaneous       and other ancillary facilities to be added as a part of each
Facilities          Substage as required for more economical operation or as required
Required            by applicable laws or regulations.

Note (1)    Contingency Pumping Unit and the third unit and repiplng of Pump Station 8
            which were approved by the Owners under the May 20, 1977 Agreement for the
            Operation and Maintenance of the Trans Alaska Pipeline System are to be
            Included in the First Substage for the purpose of determining the Design
            Capacity of the First Substage but the costs of which will be Included in
            costa of Che Initial Design Capacity and the First Expansion for the
            purpose of any redistributions.

Note (2)    At the time each Subatage is initiated, the Design Capacity to be achieved
            by such Substage will be determined by the Construction Committee upon                n
            review of a current study by Operator. Such Design Capacity shall Include            ac
                                                                                                  Ci
            all known capacity optimizations and fine tuning programs, other than use            GO
                                                                                                  O
            of drag reduction additive, which might reasonably be expected aa a result
            of the construction of such Substage.
                                                                   XR-                           g
                                                                            00f\r\t-~.     ft*
                                                                                          148
                                                                   Page 90 of 105
    V



                                   EXHIBIT E
           TO FIFTH AMENDMENT TO TRANS ALASKA PIPELINE SYSTEM AGREEMENT
                                   TABLE III
                            Substage Options Retained
                                 First Substage

                                                     (2)                (3)
                                               Design Capacity    Substage Optlo?
                                               Covered By Sub¬    Capacity Held
                                               stage Options      Subject To
                 (1)                           Retained           Sub stage Op tio:
                Party                          (Bbls./Day)        (Bbls . /Dav)


        ARCO Pipe Line Company
        Sohlo Pipe Line Company
        Exxon Pipeline Company
        Amerada Hess Pipeline Corporation
        Mobil Alaska Pipeline Company
        Phillips Alaska Pipeline Corporation
        Union Alaska Pipeline Company
        BP Pipelines Inc.

i




                                                           XR-
                                                                 000058


                                                                              149
        *



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                                                                                                                                                                                                           XB-                000059                •s
                                                                                                                                                                                                                                        150
                                                             Page 92 of 1 05



                  SIXTH AMENDMENT TO THE
          TRANS ALASKA PIPELINE SY5TEM AGREEMENT



     This Sixth Amendment to the Trans Alaska Pipeline
System Agreement entered into as of the 16th 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, Onion Alaska Pipeline Company and
BP Pipelines Inc. (herein called "Parties" or "Owners"):

                     W I T N E S_SETH:

     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 supple¬
mented is herein called "Agreement"), which provides for the
design and construction of the Trans Alaska Pipeline System
(herein called "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.
     WHEREAS, pursuant to Subsections (a) and (b) of Section
6.6 of the Agreement, Owners have heretofore initiated and
constructed the First Expansion with a design capacity of
580,000 barrels per day, and

     WHEREAS, Owners have done all things pursuant to the
Agreement necessary to initiate, effective as of March 16,
1979, the First Substage of the Second Expansion, as generally
described in Exhibit D of the Fifth Amendment, which will
increase the design capacity approximately 200,000 barrels
per day, and

     WHEREAS, three Owners retained Substage Options in the
First Substage, and

     WHEREAS, the actions of Owners in connection with the
First Substage require amendment of the Agreement as provided
in Section 6.6 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:




                                                                     151
                                                             Page 93 of 105


Sixth Amendment to the
Trans Alaska Pipeline System Agreement
Page Two


     1.   Table II in Section 6.2 of the said Agreement is
amended to read as follows:
                          TABLE II
                                                             (3)
                                            (2)        Remaining
                                         Expansion     Expansion
           (1)                           Capacity      Capacity
          Part-                            (B/P)         (B/D)

ARCO Pipe Line Company                     372,350      120, 540
Sohio Pipe Line Company                    372,350      191,370
Exxon Pipeline Company                     338,500      114,800
Amerada Hess Pipeline Corporation           40,620        8,610
Home Pipeline Company                       27,080        -0-
Mobil Alaska Pipeline Company              115,090       28,700
Phillips Alaska Pipeline Corporation        44,005        9,530
Union Alaska Pipeline Company               44,005        9,530
BP Pipelines Inc.                            -0-         90,920

                                         1,354,000      574,000
     2.   Table III as provided in Section 6.6 of the Agreement
and Exhibit E to the Fifth Amendment to Trans Alaska Pipeline
System Agreement is added as follows:

                          TABLE III
                  Substage Options Retained
                  _    First Substage  _
                                              (2)            (3)
                                         Design        Substage
                                         Capacity      Option
                                         Covered       Capacity
                                         By Substage   Held Subject
                                         Options       To Substage
           (1)                           Retained      Options
          Part;                          (Bbls./Day)   (Bbls./Day)

ARCO Pipe Line Company                          -0-          3,875
Sohio Pipe Line Company                         -0-          6,152
Exxon Pipeline Company                          -0-          3,690
Amerada Hess Pipeline Corporation               -0-           -0-
Mobil Alaska Pipeline Company                 10,000           0
Phillips Alaska Pipeline Corporation           3,320          -0-
Union Alaska Pipeline Company                  3,320          -0-
BP Pipelines Inc.                               -0-          2,923

                                              16,640     16,640




                                                                     152
                                                              Page 94 of 1 05



Sixth Amendment to the
Trans Alaska Pipeline System Agreement
Page Three


     This 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 TESTIMONY WHEREOF this 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 ALASKA PIPELINE CORPORATION


By.                                     By.


EXXON PIPELINE COMPANY                  UNION ALASKA PIPELINE COMPANY


By.                                     By.


AMERADA HESS PIPELINE CORPORATION       BP PIPELINES INC.


By                                  •   By.




                                                                        153
                                                             Page 95 of 1 05


                 SEVENTH AMENDMENT TO THE
          TRANS ALASKA PIPELINE SYSTEM AGREEMENT



     This Seventh Amendment to the Trans Alaska Pipeline
System Agreement entered into as of the 22nd day of May
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 Pipeline Company and
BP Pipelines Inc. (herein called "Parties" or "Owners"):


                       W I T N E S S E T Hi

     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 supple¬
mented is herein called "Agreement"), which provides for the
design and construction of the Trans Alaska Pipeline System
(herein called "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.

     WHEREAS, pursuant to Subsections (a) and (b) of Section
6.6 of the Agreement, Owners have heretofore initiated and
constructed the First Expansion with a design capacity of
580,000 barrels per day, and

     WHEREAS, Owners have heretofore initiated the First
Substage of the Second Expansion with a design capacity of
approximately 200,000 barrels per day, and

     WHEREAS, Owners have done all things pursuant to the
Agreement necessary to initiate, effective as of May 22,
1979, the Second Substage of the Second Expansion, as
generally described in Exhibit D of the Fifth Amendment,
which will increase the design capacity approximately 60,000
barrels per day, and

     WHEREAS, four Owners retained Substage Options in the
Second Substage, and

     WHEREAS , the actions of Owners in connection with the
Second Substage require amendment of the Agreement as provided
in Section 6.6 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:




                                                                      154
                                                                 Page 96 of 1 05
r
    Seventh Amendment to the
    Trans Alaska Pipeline System Agreement
    Page Two


         1.   Table II in Section 6.2 of the said Agreement is
    amended to read a9 follows :

                              TABLE II
                                                                  (3)
                                                   (2)         Remaining
                                             Expansion         Expansion
                (1)                          Capacity          Capacity
               Party                           (B/P)             (B/D)

    ARCO Pipe Line Company                     372,350         107,940
    Sohio Pipe Line Company                    372,350         171,366
    Exxon Pipeline Company                     338,500         102,000
    Amerada Hess Pipeline Corporation          40,620            7,710
    Horae Pipeline Company                     27,080            -0-
    Mobil Alaska Pipeline Company             115,090           25,700
    Phillips Alaska Pipeline Corporation           44,005         8,534
    Union Alaska Pipeline Company                  44,005         8,534
    BP Pipelines Inc.                               -0-          81,416

                                             1,354,000          514,000

         2.   Table IV as provided in Section 6.6 of the Agreement
    is added as follows:

                               TABLE IV

                       _                     _
                       Substage Options Retained
                            Second Substage
                                                   (2)            (3)
                                             Design            Substage
                                             Capacity          Option
                                             Covered           Capacity
                                             By Substage       Held Subject
                                             Options           To Substage
                (1)                          Retained          Options
               Party                         (Bbls./Day)       (Bbls./Day)

    ARCO Pipe Line Company                           -0-          1,162
    Sohio Pipe Line Company                        20,004          -0-
    Exxon Pipeline Company                           -0-          1,107
    Amerada Hess Pipeline Corporation                -0-           -0-
    Mobil Alaska Pipeline Company                   3,000          -0-
    Phillips Alaska Pipeline Corporation                 996       -0-
    Union Alaska Pipeline Company                        996       -0-
    BP Pipelines Inc.                                -0-         22,727

                                                   24,996        24,996




                                                                           155
                                                           Page 97 of 1 05



Seventh Amendment to the
Trans Alaska Pipeline System Agreement
Page Three


     This 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 TESTIMONY WHEREOF this 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_\         i                      By.
     *   t


SOHIO PIPE LINE COMPANY             PHILLIPS ALASKA PIPELINE CORPORATIO!-


By                                  By


EXXON PIPELINE COMPANY              UNION ALASKA PIPELINE COMPANY

By                                  By


AMERADA HESS PIPELINE CORPORATION   BP PIPELINES INC.


By                                  By




                                                                    156
                                                                Page 98 of 1 05




                 EIGHTH AMENDMENT TO TRANSALASKA
                     PIPELINE SYSTEM AGREEMEHT

     This Eighth Amendment to the Trans Alaska Pipeline System
Agreement, entered into as of the first day of September, 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 pipel ine 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 constructed the
First Expansion of the System and have effected redistribution of
construction costs as a result of that Expansion, and
     WHEREAS, Owners have provided that the Second Expansion be
divided into Substages to facilitate expansion of the System in
increments as the need therefor may be anticipated, and
      WHEREAS, Owners have initiated the First and Second Substages
of  the Second Expansion, which substages are presently under
construction, completion of which may require redistribution of
costs according to the provisions of Section 6.4 of the Agreement,
and
     WHEREAS, the said Section 6.4 provides for redistribution of
the costs of pre-expansion and new facilities in accordance with
Owners' Percentages of Ownership in TAPS, except terminal tankage,
which Percentages of Ownership, after completion of the said FirBt
and Second Substages, will differ from Owners' Percentages of
Ownership in terminal tankage, and
     WHEREAS, the Agreement contains no provision for dividing or
allocating costs of facilities used both for operation of pipeline
and for operation of terminal tankage to those two categories of
facilities, and Owners desire to amend the Agreement to make
provision therefor and to make other amendments related to redis¬
tribution, all as hereinafter provided;


                                                  XR-     000050

                                                                         157
                                                                 Page 99 of 1 05




Eighth Amendment to
Trans Alaska Pipeline System Agreement
Page Two


     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
chat the Agreement shall be and is hereby amended as follows:
 1. The third sentence of Subsection (b) of Section 6.4 of the
    Agreement is replaced with the following:

      Said cost of all facilities to be redistributed shall be
      determined from the accounts of the Parties (maintained by the
      Contractor in accordance with the Uniform System of Accounts
      prescribed by the Federal Energy Regulatory Commission) on the
      basis of the accumulated net equity of all of the Parties in
      the System, as shown by the books of account of Contractor as
      adjusted to insure that each party bears a share of opieratin
                                                                   S
      costs commensurate with its. Percentage of Ownership wh en sue
      costs were incurred, including other costs and expenses paid
      or incurred, incident to the planning, development, design and
      construction of TAPS by all Parties as provided in the next
      succeeding paragraph of this Subsection (b). The account
      balances used to determine net equity shall be those reflected
      as of the close of the month in which redistribution is to
      occur. Allocation of the net equity determined in the manner
      and on the date specified above shall be made to each class of
      facilities (terminal tankage and pipeline facilities other
      than terminal tankage) in the proportion that the balance as
      of the date specified of Account 30, Carrier Property, in-
      eluding costs allocated pursuant to Subsection (e) herein
      below, for each class of facilities , as defined above, bears
      to the total System Carrier Property. Construction Work in
      Progress (Primary Property Account 187) shall be excluded in
      determining the proportion.

 2.   The fourth sentence of Subsection (b) of Section 6.4 of the
      Agreement shall be amended to read as follows:

      There shall be Included in net equity of the parties for the
      purpose of Che above redistributions, as interest during
      construction for each month preceding the commencement of
      construction of the Initial Design Capacity and during the
      period of construction Of the Initial Design Capacity and each
      Expansion interest on the aggregate of cash advances of the
      Owners for capital expenditures (exclusive of interest in¬
      cluded therein pursuant to this sentence) as of the end of the
      preceding month, such interest calculated at an annual rate
      equivalent to 1251 of the prime rate of interest of Citibank
      N.A., of New York, New York on ninety-day loans to substantial



                                                  XR-    000081

                                                                          158
                                                               Page 1 00 of 1 05




Eighth Amendment to
Trans Alaska Pipeline System Agreement
Page Three


      and responsible commercial borrowers as such rate shall change
      from time to time during the construction period, each such
      change to become effective on the date of announcement of such
      change by the Bank; provided that if such rate of Interest
      shall be unlawful under applicable law, then it shall be
      reduced to the highest lawful rate.
 3.   The first paragraph of Subsection (b) of Section 6.4 of the
      Agreement is amended by adding thereto the following sentence:
      In addition, for purposes of determining interest during
      construction pursuant to this Subsection (5) , the periods of
      construction of both Initial Design Capacity and First Expan¬
      sion Capacity shall be deemed to nave terminated on July 31 ,
      1977 and the total of such interest so determined shall be
      allocated to terminal tankage and to pipeline facilities ocher
      than terminal tankage in the proportion which the total net
      equity of Che Parties in each (including costs allocated to
      each pursuant to Subsection (e) hereinbelow) bears to the
      total net equity of the Parties in the entire System.
4.    Subsection (d) of Section 6.4 of the Agreement shall be amended
      by adding thereto Che following:

      Upon request of any Party, the Contractor shall notify all
      Parties, within ten (10) working days after the Date of
      Completion, of Contractor's estimate of amounts which will be
      due by all Parties upon any redistribution. Any Party obli¬
      gated to pay an amount due upon redistribution shall be
      entitled to pay its estimate of the amount to be due from chat
      Party and if payment of such estimated amount shall be made,
      no interest shall be due on the amount so paid from and after
      the date such amount is paid. Contractor shall notify the
      Parties within 45 days after the Dace of Completion of the
      Expansion of the amount due by all Parties upon any redis¬
      tribution.
 5. Section 6.4 of     the Agreement   is amended   by adding Sub¬
      section (e) as follows:
      (e) Allocation of Costs. For purposes of redistribution of
          expansion and pre-expansion costs pursuant to this Arti¬
          cle VI, all cost6 of facilities which are employed in sub¬
          stantia) portion in the operation of the System in connec¬
          tion with both terminal tankage and pipeline facilities



                                                    XR-   000082


                                                                          159
                                                              Page 101 of 105




Eighth Amendment to
Trans Alaska Pipeline System Agreement
Page Four



          other than terminal tankage shall be allocated to each
          class of facilities (terminal tankage or pipeline facili¬
          ties other than terminal tankage) in such proportions of
          use as shall be determined by Contractor and approved by
          the Owners Committee under the Agreement for the Operation
          and Maintenance of the Trans Alaska Pipeline System exe¬
          cuted by and between Owners as of May 20, 1977. Not-
          withstanding any other provision contained in this Agree¬
          ment, each facility, the cost of which is allocated to
          terminal tankage and to pipeline facilities other than
          terminal tankage, shall be owned by the Parties with each
          Party's undivided interest therein being eaual to the per¬
          centage of cost of such facility borne oy such Party,
          whether borne through a portion of the Initial cost of
          construction thereof -or through redistribution of cost
          thereof, as the case may be.
6.    The first paragraph of Section 3.1 of the Agreement is amended
      to read as follows:
      Ownership of TAPS. TAPS (including but not limited to all fee
      titles, easements, leases, permits, right-of-way and other
      Interests in land) shall be owned by the Parties hereto with
      each Party's undivided interests in TAPS, except as provided
      in Section 3.2 with respect to terminal tankage, being equal
      to its percentage of ownership ("Percentage of Ownership") in
      TAPS as set forth in Column (2) of Table 1 below, as such
      Percentage of Ownership may be amended from time to time as
      hereinafter provided, such amended percentage to be rounded
      and expressed in four decimals of a percent, e.g., 5.00001.
      The initial Percentage of Ownership of each Party in TAPS and
      the estimated initial dally barrel design capacity of each
      Party in TAPS are set forth opposite such Party's name in
      Columns (2) and (3), respectively, of Table I below, with such
      percentages and capacities both being those which are appli¬
      cable before any expansion of TAPS capacity has been made
      pursuant to Article VI of this Agreement.
 7.   Effective as of the Daÿe of Completion of the First Substage
      of the Second Expansion, Table I of Section 3.1 of the
      Agreement is amended to read as follows:




                                                  XR-
                                                          OOCOS3



                                                                       160
                                                                     Page 1 02 of 1 05




Eighth Amendment to
Trans Alaska Pipeline System Agreement
Page Five


                            TABLE 1
                                            (2)               (3)
                                         Percentage         Design
                (1)                         of             Capacity
               Party                     Ownership         (Bbls./Day)

ARCO Pipe Line Company                    21. 2849             289,475
Sohio Pipe Line Company                   33.7924              459,576
Exxon Pipeline Company                    20.2713              275,690
Amerada Hess Pipeline Corporation          1.5000               20,400
Mobil Alaska Pipeline Company              4.2647               58,000
Phillips Alaska Pipeline Corporation       1.4159               19,256
Union Alaska Pipeline Company              1.4159               19,256
BP Pipelines Inc.                         16.0549              218,347
                                         lOO.OOGOl         l,360,uUO

 B. 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 all other respects, the said Agreement shall continue in
full force and effect.
     IN TESTIMONY WHEREOF the parties hereto have caused this
Eighth Amendment to the Trans Alaska Pipeline System Agreement to
be executed as of the day and date fir6t appearing above.

AMERADA HESS PIPELINE           MOBIL ALASKA PIPELINE COMPANY
CORPORATION

                                By
                                                               President
ARCO PIPE LINE COMPANY          PHILLIPS ALASKA PIPELINE
                                CORPORATIONÿ.


By                              By
                                         M                 /

                                                     XR-   •

                                                               °00084

                                                                                161
                                                            Page 103 of 105




Eighth Amendment to
Trans Alaska Pipeline System Agreement
Page Six


BP PIPELINES INC.               S0HI0 PIPE LINE COMPANY

By.     C
               -- ....
EXXON PIPELINE COMPANY
                      a         B


                                UNION ALASKA PIPELINE COMPANY

By    ZS/ÿfcr..->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<   rC2             By.




                                                                                               164
        APP. E
TAPS Operating Agreement
     (CR524-571)
                              [Reflects changes made by 1st,
                               2d, 4th and 5th Amendments
                                Updated December 18, 1997]




 AMENDED AND RESTATED AGREEMENT

FOR THE OPERATION AND MAINTENANCE

               OF THE

   TRANS ALASKA PIPELINE SYSTEM

             BY AND AMONG

AMERADA HESS PIPELINE CORPORATION

 ARCO TRANSPORTATION ALASKA, INC.

      BP PIPELINES (ALASKA) INC.

      EXXON PIPELINE COMPANY

  MOBIL ALASKA PIPELINE COMPANY

PHILLIPS ALASKA PIPELINE CORPORATION

                 AND


     UNOCAL PIPELINE COMPANY




                                                     524
                               TABLE OF CONTENTS

                                                                  Page


SECTION
      1     DEFINITIONS                                                 2

SECTION
      2     TERM                                                        7
      2.1   Term                                                        8
      2.2   Disposition of Properties Upon Termination                  8
      2.3   Discontinuance of Operations by One or More Parties         8

SECTION
      3     DESCRIPTION OF SYSTEM AND OWNERSHIP                         8
      3.1   Description of System                                       8
      3.2   Ownership of the System                                     8

SECTION
      4     OWNERS COMMITTEE                                         9
      4.1   Owners Committee                                         9
            (a)     Members and Alternates                           9
            (b)     Meetings                                         9
            (c)     Action Without Meeting                           9
            (d)     Committee Secretary                             10
            (e)     Other Expenses                                  10
      4.2   Voting Procedures of the Owners Committee .             10
      4.3   Effect of Owners Committee Action on Parties            10
      4.4   Subcommittees                                           10

SECTION
      5     OPERATOR                                                11
      5.1   Operator                                                11
      5.2   Term of Initial Operator                                11
      5.3   Removal or Resignation of Operator                      11
      5.4   Selection of a Successor Operator .                     11

SECTION
      6     OPERATION                                               12
      6.1   Rights of Owners                                        12
      6.2   Individual Common Carrier                               12
      6.3
      6.4   Operator's Services
                               —
            Owners Committee Powers and Functions                   13
                                                                    13



                                           i
                                                                  525
                                                                        Page

      6.5   Acquisition of Land Rights . .                               14
      6.6   Personnel and Other Services                                 15
      6.7   Other Plans of Operation . . .                               15

SECTION
      7     OPERATING PROCEDURES                                         15
      7.1   Quality and Intermixing of Petroleum                         15
      7.2   Measurements of Receipts and Deliveries of Petroleum         16
            (a)    Quantity Measurements                                 16
                   (i)    Meters                                         16
                   (ii)   Calibration of Meters                          17
            (b)    Quality and Characteristic Analysis                   17
            (c)    Reporting to Owners                                   17
      7.3   Petroleum Losses and Gains                                   17
      7.4   Scheduling and Use of the System                             17
            (a)    Scheduling and Use of the Pipeline                    18
            (b)    Scheduling and Use of Terminal                        18
                   (i)                                          .
                          Scheduling of Liftings and Vessels . . .       18
                   (ii)   Preparation of Lifting Schedule                18
                   (iii)  Revision of Lifting Schedule                   19
                   (iv)   Notice of Revised Lifting Schedule . . . .     19
            (c)    Docks                                                 19
                   (i)    Assignment of Dock Space                       19
                   (ii)   Lifting Time                                   19
            (d)    Working Capacity                                      20
      7.5   Manuals                                                      21
      7.6   Base Inventory                                               21
      7.7   Transfers of Petroleum Within the System                     21
      7.8   Connections to the Pipeline                                  21
      7.9   Operation of Standby Pumping Units . . .                     21

SECTION
      8     TAXES                                                        22
      8.1   Reporting and Payment of Taxes                               22
      8.2   Election to be Excluded from Partnership Regulations         22

SECTION
      9     INSURANCE, CLAIMS AND PROTECTION OF OPERATOR                  22
      9.1   Operator's Insurance Program                                  22
      9.2   Claims                                                        23
            (a)    Handling by Operator                                   23
            (b)    Notice of Claims . . .                                 23



                                             ii
                                                                       526
                                                                                Page

             (c)    Limitation of Authority                                       23
                    (i)    Liability Claim                                        23
                    (ii)   Recovery Claim                                         24
                    (iii) Other Limitations of Authority                          24
             (d)    Reservation of Owners                                         24
      9.3    Indemnification of Operator                                          24
      9.4    Insurance Required by Government Regulation                          24
      9.5    Contractor's Insurance Program                                       24
      9.6    Special Insurance Provisions                                         25
      9.7    Report of Concentration of Values                                    25

SECTION
      10     MATERIALS, EQUIPMENT AND SUPPLIES . . .                              26
      10.1   Purchase                                                             26
      10.2   Disposal                                                             26
             (a)    Division in Kind                                              26
             (b)    Disposal by Sale                                              26
      10.3   Inventories of Materials and Supplies ....                           27
             (a)    Inventory of Materials and Supplies                           27
             (b)    Ownership of Materials and Supplies                           27

SECTION
      11     ACCOUNTING, BUDGETS, CHARGES AND AUTHORITIES                         28
      11.1   Maintenance of Accounts                                              28
      11.2   Budgets and Long-Range Plans                                         28
             (a)    Budgets                                                       28
             (b)   Long-Range Plans                                               28
             (c)   Budget Update                                                  28
             (d)   Additions and Other Changes                                    28
             (e)   Approvals                                                      28
      11.3  Authority for Expenditure                                             28
      11.4 Charges                                                                29
            (a)    Chargeable Items                                               29
            (b)
            (c)
                   Allocation of Charges and Credits
                   Allocation of Charges and Credits
                                                       ——   Fixed and Capital
                                                            Variable
                                                                                  29
                                                                                  29
      11.5  Reports and Information                                               30
      11.6 Cash Calls                                                             30
      11.7 Emergency Authority                                                    31
      11.8 Policies                                                               31
      11.9 Relocation Agreements                                                  32
      11.10 Audits                                                                32




                                           iii
                                                                                527
                                                               Page

SECTION
      12      TECHNICAL INFORMATION, INVENTIONS AND PATENTS,
              AND CONFIDENTIALITY                                33
      12.1    Technical Information                              33
      12.2    Inventions and Patents                             33
      12.3    Confidentiality                                    34
      12.4    Rights of Owners                                   34

SECTION
      13      ASSIGNMENT                                         34
      13.1    Successors and Assigns                             34

SECTION
      14      MINERAL DISCOVERIES                                34
      14.1    Mineral Discoveries .                              34

SECTION
      15      GENERAL PROVISIONS                                 35
      15.1    Notices                                            35
      15.2    Laws and Regulations and Agreements . . .          36
      15.3    Law Governing                                      36
      15.4    Entirety of Agreement                              36
      15.5    Captions or Headings                               36
      15.6    Counterparts                                       37
      15.7    Termination of Interim Operating Authority         37


                                        EXHIBITS

EXHIBIT A.   Operator’s Insurance Program                       A-l
EXHIBIT B.   Contractor's Insurance                             B-l
EXHIBIT C.   TAPS Capacity Table                                C-l
EXHIBIT D.   [Capacity Cushion]                                 D-l




                                             iv
                                                               528
                       AMENDED AND RESTATED AGREEMENT

                      FOR THE OPERATION AND MAINTENANCE

                                           OF THE

                           TRANS ALASKA PIPELINE SYSTEM

       THIS AMENDED AND RESTATED AGREEMENT (hereinafter sometimes called
"Operating Agreement"), is entered into as of October 10, 1994 (herein called the "Date of this
Agreement"), by and among AMERADA HESS PIPELINE CORPORATION a Delaware corporation
("Amerada Hess”), ARCO TRANSPORTATION ALASKA, INC., a Delaware corporation ("ARCO"),
BP PIPELINES (ALASKA) INC., a Delaware corporation ("BP"), EXXON PIPELINE COMPANY, a
Delaware corporation ("Exxon"), MOBIL ALASKA PIPELINE COMPANY, a Delaware corporation
("Mobil"), PHILLIPS ALASKA PIPELINE CORPORATION, a Delaware corporation ("Phillips"), and
UNOCAL PIPELINE COMPANY, a California corporation ("Unocal"), herein sometimes referred to
individually as "Party” or "Owner" and collectively as "Parties" or "Owners".


                                      WITNESSETH:

       WHEREAS, the Owners or their predecessors in interest entered into that certain Operating
Agreement (hereinafter called the "Original Agreement") on May 20, 1977, and have amended
the Original Agreement on various occasions; and

       WHEREAS, the Owners now desire to amend and restate the Original Agreement to
incorporate all such previous amendments and to make certain additional amendments to the
Original Agreement; and

        WHEREAS, each Owner is the holder of an undivided interest in a forty-eight inch (48")
diameter Petroleum pipeline and related facilities located in the State of Alaska as more fully
described in the agreement entitled "Trans Alaska Pipeline System Agreement" between the
Owners dated August 27, 1970, such pipeline and facilities being hereinafter sometimes referred
to as "System"; and

        WHEREAS, by reason of the Rights-of-Way Agreements and all applicable laws and
regulations each Owner is obligated to conduct any operation of its undivided interest in the
System as a common carrier facility and to appoint and maintain a common agent for the purposes
specified in the Rights-of-Way Agreements; and

        WHEREAS, to enable each Owner more efficiently to exercise its rights and to comply with
all laws, regulations and agreements the Owners enter into this agreement governing the operation
and maintenance of the System and the employment of an operator (herein referred to as Operator)
to perform on behalf of Owners certain services related to the physical act of operating and



                                               1
                                                                                          529
maintaining the System under the direction and control of the Owners in accordance with the terms
and conditions set out herein.

       Now THEREFORE, in consideration of the mutual covenants herein contained, the Owners
hereby amend and restate the Original Agreement as follows:


                                          SECTION 1

                                          DEFINITIONS

       Certain terms, as used in this Operating Agreement, are defined as follows:

       1.1                            —
             Actual Arrival Time the time according to Valdez, Alaska, local time, that a
Vessel communicates to the Operator its readiness to commence loading after entering the Prince
William Sound Vessel Traffic Service Area or an area subsequently designated by decision of the
Owners through the Owners Committee.

        1.2                                      —
               Actual Daily Pipeline Capacity for an Owner in a Month, an amount calculated
by Operator after the close of that Month and equal to the sum of: (a) the TAPS Capacity for that
Month, multiplied by that Owner's Percentage of Ownership in the Pipeline, (b) the Flow
Improvement, if any, for that Owner for that Month; and (c) the Capacity Cushion, if any, for that
Owner for that Month; such sum shall be expressed in Actual Standard Petroleum; provided.
however, that if an Upset Condition shall exist in a Month, each Owner's right to utilize the
Pipeline during the Upset Period shall be limited to transporting an amount of Petroleum
calculated by multiplying the Petroleum actually carried by the Pipeline during the Upset Period
by that Owner's Percentage of Ownership in the Pipeline. In arriving at such Actual Daily
Pipeline Capacity. Operator shall add to or subtract from that calculation the portion of
Adjustment Capacity added or subtracted in arriving at that Owner's Estimated Daily Pipeline
Capacity for the Month for which the calculation is made.

                                             —
        1.3 Actual Standard Petroleum A Petroleum with the same characteristics which
affect throughput (such as gravity and viscosity) as is calculated to result from theoretically
aggregating the Petroleum transported by all Owners during the Month for which the calculation
is made. Alternatively, Operator may. subject to the approval of the Owners through the Owners
Committee, designate a Petroleum transported in the System during the Month as the Actual
Standard Petroleum for that Month.

       1.4                            —
               Adjustment Capacity the total of the amounts for the third preceding Month by
which the actual average daily receipts of Petroleum at Pump Station No. 1 exceeded Actual Daily
Pipeline Capacity for all Owners who had such an excess.

       1.5    Approved Budgets      —
                                    the budgets approved by the Owners through the Owners
Committee in accordance with Section 11 .2 hereof.



                                                 2
                                                                                          530
        1.6     Associated Companies. An Associated Company of a Party means (a) any
company of which at least 50% of the voting stock is owned directly or indirectly by the Party in
question, (b) a company which owns directly or indirectly at least 50% of the voting stock of the
Party in question, and (c) a company of which at least 50% of the voting stock is owned directly
or indirectly by any company which also owns directly or indirectly at least 50% of the voting
stock of the Party in question.

       1.7      Barrel
                        —  42 U.S standard gallons at 60° Fahrenheit; provided that, unless
otherwise specifically stated. Barrel shall be a volumetric measure, with no adjustment for
characteristics of Petroleum that affect throughput (such as gravity and viscosity).

      1.8
Terminal Tankage Base Inventory.
                                —
             Base Inventory the total Volume of Petroleum in Pipeline Base Inventory and


       1.9                     —
              Calendar Year the period of time commencing at 0000 hours on January 1 and
ending at 2400 hours on the next succeeding December 31 according to Valdez, Alaska, local
time.

                                         —
        1.10 Date of Commissioning The date when custody of the first Petroleum tendered
for shipment through the System, after providing for Base Inventory, is actually accepted, which
date the Owners determined for all relevant purposes to be July 31, 1977.

       1.11         —
              Day the period of time commencing at 0000 hours on one day and running until
2400 hours on the same day according to Valdez, Alaska, local time.

                                                      —
        1.12 Design and Construction Agreement the agreement entitled "The Design and
Construction of the Trans Alaska Pipeline System" between the Owners or their predecessors in
interest and Alyeska Pipeline Service Company, dated August 27. 1970 as supplemented or
amended from time to time.

       1.13     Estimated Daily Pipeline Capacity
                                                      —   for an Owner in a Month, an amount
estimated by Operator prior to that Month and equal to the sum of: (a) the TAPS Capacity for that
Month, multiplied by that Owner’s Percentage of Ownership in the Pipeline; (b) the Flow
Improvement, if any. for that Owner for that Month, utilizing the Producer Estimate; and (c) the
Capacity Cushion, if any, for that Owner for that Month; such sum shall be expressed in Estimated
Standard Petroleum; provided, however, that if, at the lime the use of the Pipeline is being
scheduled under Section 7.4(a) for a Month, one or more events or circumstances are known or
planned to exist during that Month that, with a high degree of certainty, can be expected to
constitute an Upset Condition, then Operator shall schedule the use of the Pipeline in accordance
with the allocation procedures set forth in the proviso of Section 1.2 hereof. In arriving at such
Estimated Daily Pipeline Capacity, Operator shall:

              (a)   add a portion of Adjustment Capacity determined by multiplying Adjustment
       Capacity by a fraction the numerator of which is the amount, if any, by which such


                                                3
                                                                                         531
       Owner's Actual Daily Pipeline Capacity exceeded its actual average daily receipts of
       Petroleum at Pump Station No. 1 during the third preceding Month and the denominator
       is the total of such excesses for all Owners who had such an excess; or

              (b)     subtract the portion of Adjustment Capacity equal to the amount, if any. by
       which such Owner's average daily receipts of Petroleum at Pump Station No. 1 exceeded
       its Actual Daily Pipeline Capacity during the third preceding Month.

        1.14 Estimated Standard Petroleum — a Petroleum with the same characteristics which
affect throughput (such as gravity and viscosity) as is calculated to result from theoretically
aggregating the Petroleum expected to be transported by all Owners during the Month for which
the calculation is made. Alternatively, Operator may, subject to the approval of the Owners
through the Owners Committee, designate a Petroleum expected to be transported in the System
during the Month as the Estimated Standard Petroleum for that Month.


in land
       1.15
        required
                              —
               Land Rights easements, leases, fee titles, permits, licenses, and other interests
                 for the operation of the System.

                                    —
       1.16 Lifting Schedule the schedule of Vessels and liftings prepared by Operator in
accordance with Section 7.4(b)(ii) hereof as revised or changed in accordance with
Section 7.4(b)(iii) hereof.

      1.17 Oil Measurement Manual
                                                 —
                                           the manual referred to in Section 7.2 hereof as
approved by the Owners through the Owners Committee.

      1.18 Operating Expense(s)
and maintenance of the System.           —   all expense(s) incurred in connection with the operation


       1.19 Operator
Section 5 hereof.
                         —       the operator selected by the Owners in the manner described in



                                             —
      1.20 Owner's Base Inventory the Volume of Petroleum in the custody of any given
Owner, at any given time, that is a part of Base Inventory.

      1.21 Owner's Working Capacity
Tankage multiplied by Working Capacity.
                                                 —   an Owner's Percentage of Ownership in Terminal


                                                     —
       1.22 Owner's Working Inventory the Volume of Petroleum in the custody of any
given Owner, at any given time, that is a part of Working Inventory.

       1.23   Petroleum      —   unrefined liquid hydrocarbons including gas liquids.

       1.24   Pipeline   —   the Pipeline as defined in Section 3.1(a) hereof.




                                                     4
                                                                                             532
       1.25 Pipeline Base Inventory      — the total Volume of Petroleum in the Pipeline excluding
Petroleum in fuel tanks.

                                                           —
       1.26 Pipeline Fixed Operating Expense(s) expense(s) incurred in connection with
the operation and maintenance of the Pipeline not affected by the Volume of Pipeline throughput.
All expenses not classified as variable will be considered fixed.

                                                           —
       1.27 Pipeline Variable Operating Expense(s) expcnse(s) incurred in connection with
the operation and maintenance of the Pipeline which vary with the Volume of Pipeline throughput.

      1.28 Policies — the policies referred to in Section 11.8 hereof as approved by the
Owners through the Owners Committee.

      1.29 Port Information Manual
                                             —
                                           the manual referred to in Section 7.4 hereof as
approved by the Owners through the Owners Committee.

       1.30 Rights-of-Way Agreements           —the Right-of-Way Lease for the Trans-Alaska
Pipeline between the State of Alaska and Owners dated May 3, 1974 and the Agreement and Grant
of Right-of-Way for Trans-Alaska Pipeline between the United States of America and Owners
dated January 23, 1974 as amended or renewed from time to time.

       1.31 Scheduled Arrival Day        —the Day, stated in a Lifting Schedule, that a Vessel is
scheduled to enter the Prince William Sound Vessel Traffic Service Area or an area subsequently
designated by the Owners through the Owners Committee.

       1.32 System     —   the System as defined in Section 3.1 hereof.

                                  —
        1.33 TAPS Agreement agreement among the Owners or their predecessors in interest
entitled "Trans Alaska Pipeline System Agreement" dated August 27, 1970 as amended or
supplemented from time to time, providing for the design, construction and ownership of the
System.

       1.34   Terminal Tankage      —   the Terminal Tankage as defined in Section 3.1(b) hereof.

                                                       —
      1.35 Terminal Tankage Base Inventory the total Volume of Petroleum in Terminal
Tankage excluding Petroleum in fuel tanks and Working Capacity.

        1.36 Terminal Tankage Fixed Operating Expense(s)              —  expense(s) incurred in
connection with the operation and maintenance of Terminal Tankage not affected by the Volume
of deliveries out of the System at Valdez. Alaska. All expenses not classified as variable will be
considered fixed.




                                                   5
                                                                                         533
        1.37 Terminal Tankage Variable Operating Expense(s)
                                                                          —
                                                                      expense(s) incurred in
connection with the operation and maintenance of Terminal Tankage which vary with the Volume
of deliveries out of the System at Valdez, Alaska.

        1.38   Vessel(s)
                           —
                          any tanker, tank ship or vessel scheduled to call or calling at Valdez.
Alaska, to load Petroleum transported through the System.

        1.39   Volume      —   quantity expressed in Barrels.

                                     —
       1.40 Week or Weekly seven consecutive days commencing on Monday at 0000 hours
and running until 2400 hours on the next succeeding Sunday according to Valdez, Alaska, local
time.

                                         —
        1.41 Working Capacity the total capacity of all operational Terminal Tankage tanks
for the handling of Petroleum at Valdez, Alaska pending loading on Vessels, between 2’6" above
the bottom of the tank shell and 3'9” below the top of the tank shell, less the capacity, as
determined by the Operator, required to receive the Volume of Petroleum which should be moved
out of the Pipeline to prevent the internal pressure in the Pipeline from exceeding design limits in
the event its operation would be shut down.

       1.42    Working Inventory         — the total Volume of Petroleum in Working Capacity at any
given time.

                                                —
        1.43 100 Barrel-Mile Deliveries the number of Barrels of Petroleum delivered out
of the System multiplied by the number of miles each such Barrel was transported, divided by 100

                                         —
       1 .44 Month or Monthly a calendar month commencing at 0000 hours on the first day
thereof and running until 2400 hours on the last day thereof according to Valdez, Alaska, local
time.

                                         —
        1.45 Pumpability Factor that decimal fraction which expresses the relationship of
the ability of the System to transport a given Petroleum to the ability of the System to transport
Estimated Standard Petroleum or Actual Standard Petroleum, as the case may require.

                                     —
       1.46 TAPS Capacity the Pipeline's capacity set forth on Exhibit C attached hereto
and by this reference incorporated herein during the period of time set forth opposite such capacity
on Exhibit C attached hereto.

                                     —
        1.47 Upset Condition one or more events or circumstances affecting the Svstem and
resulting in a temporary decrease in the capability of the System that prevents the Pipeline from
transporting Petroleum actually available for transport through the Pipeline.

       1.48 Upset Period
but no longer.
                                 —   that portion of a Month during which an Upset Condition exists.




                                                    6
                                                                                            534
                                   —
        1.49 Flow Improvement the allocation among the Owners of flow improvement that
exceeds TAPS Capacity, whether achieved through the use of a drag reduction agent or through
other means; provided, however, that such flow improvement shall be exclusive of any Capacity
Cushion and shall be allocated only to the extent that it exceeds TAPS Capacity, and that excess
will be allocated among the Owners in proportion to their respective Percentages of Ownership
in the Pipeline.

       1.50
31, 2011:
              Capacity Cushion    —   for the period July 1, 1998, through and including December


              (i)     During a Month when 105% of the Producer Estimate exceeds the TAPS
       Capacity, the least of: (a) 105% of the Producer Estimate less TAPS Capacity; (b) 5% of
       the Producer Estimate; or (c) the difference between 1,700,000 Barrels per Day, and the
       Producer Estimate, if the Producer Estimate is less than 1,700,000 Barrels per Day; if the
       Producer Estimate is 1,700,000 Barrels per Day or more, there shall be no Capacity
       Cushion; and

            (ii)   During a Month when 105% of the Producer Estimate does not exceed the
       TAPS Capacity, there shall be no Capacity Cushion.

The Capacity Cushion shall be allocated among the Owners as set forth on Exhibit D attached
hereto and by this reference incorporated herein. The sharing of Capacity Cushion shall have no
impact on voting percentages or on any other rights or obligations under the TAPS Agreement or
this Operating Agreement; provided, however, that Petroleum flowing through the Pipeline,
whether by Capacity Cushion or otherwise, shall bear costs in accordance with Section 11-2(0 of
the 1985 Settlement Agreement with Respect to the Trans Alaska Pipeline System, as amended,
among the State of Alaska and the Owners; and, provided further, that an Owner’s share of
Capacity Cushion shall be transferable to any other Owner, whether with or without any other
asset, but any such transfer shall be subject to the provisions of Article VII of the TAPS
Agreement.

                                  —
       1.51 Producer Estimate the number of Barrels to be carried in the Pipeline in a given
Month as estimated by Operator based upon projections given to Operator by each entity
responsible for a connection to TAPS.


                                          SECTION 2

                                              TERM

       2.1      Term. This Operating Agreement shall become effective on the Date of this
Agreement and shall continue in effect until the TAPS Agreement is terminated in accordance with
Article VIII of the TAPS Agreement. If at any time any Owner shall be adjudicated bankrupt in
any court of competent jurisdiction, this Operating Agreement shall terminate.


                                                7
                                                                                         535
      2.2    Disposition of Properties Upon Termination. The provisions of Section 8.3 of
the TAPS Agreement shall govern the disposition of property upon termination of this Operating
Agreement.

      2.3 Discontinuance of Operations by One or More Parties. Section 8.2 of the TAPS
Agreement shall govern the discontinuance of operations by one or more Parties


                                           SECTION 3

                           DESCRIPTION OF SYSTEM AND OWNERSHIP

         3.1    Description of System. The "System" shall consist of a Petroleum pipeline
forty -eight inches (48") in diameter extending from a point at or near Prudhoe Bay. Alaska to a
point near Valdez. Alaska, together with suitable pump stations, tankage (exclusive of tankage
constructed by an Owner under the Fifth Supplemental Agreement to the TAPS Agreement).
docks, communications facilities, and other facilities, equipment and appurtenances exclusive of
intangible property but including all fee titles, easements, leases, permits, rights-of-way and other
interests in land as acquired, constructed or expanded pursuant to the TAPS Agreement or this
Operating Agreement.

       For the purposes of ownership and operation, the System shall consist of two components:

               (a)     Pipeline. All such System property of every nature and kind, both real and
       personal, exclusive of Terminal Tankage. These properties include, but are not limited to.
       the following described property: pipelines, pump stations, topping plants, pump station
       surge and fuel tankage, Petroleum measurement facilities, docks, ballast water treating
       facilities, and other related facilities, equipment and appurtenances.

               (b)     Terminal Tankage. All such System property at Valdez, Alaska, of every
       nature and  kind, both real and personal, associated with the holding of Petroleum pending
       delivery out of the System. Such facilities include, but are not limited to. the following
       described property: Petroleum tanks, tank farm manifolds, tank vent lines, vapor recovery
       system, power generation facilities and other related facilities, equipment and
       appurtenances.

        3.2     Ownership of the System. The Percentage of Ownership of each Owner in the
Pipeline or in the Terminal Tankage shall be as set forth respectively opposite each Owner's name
in Table I (Pipeline) or Table LA (Terminal Tankage) in Article 1H of the TAPS Agreement as such
Tables may be revised as provided therein. Any reference in this Operating Agreement to
Percentage(s) of Ownership in the Pipeline shall mean the percentage(s) set out in said Table I and
any references to Percentage(s) of Ownership in Terminal Tankage shall mean the percentage(s)
set out in Table IA according to the latest agreed upon revisions of Table I and I A of the TAPS
Agreement at the particular time when this Operating Agreement is to be applied.



                                                  8
                                                                                             536
                                           SECTION 4

                                      OWNERS COMMITTEE

        4.1    Owners Committee. In order to facilitate each Owner's individual direction and
control of the operations, the Owners recognize that it is necessary and desirable to establish a
committee through which, as to specific functions assigned to the committee in this Operating
Agreement, each Owner individually exercises certain of its rights inherent in its ownership of an
undivided interest in the System. A committee to be known as the Owners Committee is hereby
established as follows.

               (a)    Members and Alternates. Each Owner shall designate one representative
       as its member ("Member") on the Owners Committee and shall designate one
       representative as the Member’s alternate ("Alternate") who shall represent the Owner on
       the Owners Committee only in the absence of the Member. Each Owner shall give written
       notice to the secretary of the Owners Committee (Committee Secretary) of the names.
       addresses and telephone numbers of its Member and Alternate. Each Owner reserves the
       right from time to time to change its Member or Alternate and their respective addresses
       and telephone numbers by giving written notice of any such change to the Committee
       Secretary, who shall be responsible for keeping each Owner advised of the names,
       addresses and telephone numbers of each Member and Alternate.

               (b)     Meetings. The Owners Committee shall hold such meetings as may be
       requested by any Member (or in his absence by such Member’s Alternate). All such
       requests shall be made in writing, or by telephone confirmed in writing, to the Committee
       Secretary and shall state the matters to be considered at such meeting. The Committee
       Secretary shall notify each Member in writing at least three (3) days in advance of any
       meeting of the date, lime, place and purpose of the meeting. If such notice is given by
       telephone, it shall be confirmed in writing. Failure to give such notice shall not nullify any
       action taken at any meeting if each Owner not represented at such meeting by its Member
       or Alternate shall waive such notice in writing signed by said Owner’s Member or
       Alternate, either before or after the meeting. The Owners Committee shall establish rules
       and procedures for the conduct of meetings, including but not limited to the selection of
       a chairman and the attendance of advisors, provided that such rules and procedures shall
       not contradict any provision of this Operating Agreement.

              (c)     Action Without Meeting. It is recognized that matters requiring the
       immediate decision of the Owners Committee may arise from time to time. Any Member
       or the Operator may propose that any matter upon which the Owners Committee is
       authorized to act be decided pursuant to the informal procedure established hereunder by
       giving notice to the Committee Secretary, which notice may be given in writing, or by
       telephone, confirmed in writing. The Committee Secretary shall immediately notify each
       Member by telephone of the matter to be decided and shall confirm such notice in writing.



                                                 9
                                                                                             537
       If the Committee Secretary is unable to contact a Member by telephone, he shall
       immediately notify that Member's Alternate by telephone, which notice shall be confirmed
       in writing to both the Member and his Alternate. Each Member or Alternate, as the case
       may be, shall notify the Committee Secretary in writing or by telephone confirmed in
       writing of his approval or disapproval of the matter for decision As soon as the
       Committee Secretary shall ascertain that a matter has been approved or disapproved, he
       shall notify all Members of the result which notice shall be in writing, or by telephone.
       confirmed in writing to each Member.

              (d)      Committee Secretary. The Owners Committee shall appoint a Committee
       Secretary and an Assistant Committee Secretary In addition to the functions assigned to
       the Committee Secretary in subdivisions (b) and (c) of this Section 4.1, the Committee
       Secretary shall prepare and retain custody of the original record book which will contain
       the minutes of all meetings, notices, written confirmations, certificates, and, as the Owners
       Committee shall direct, all other documents and communications relating to the Owners
       Committee. Duplicate copies of all materials in the record book shall be promptly mailed
       by the Committee Secretary to each Member. The record book shall be kept available for
       inspection at all tunes by duly authorized representatives of the Owners and, upon
       termination of the Owners Committee, shall be delivered to one of the Owners for
       safekeeping under such terms as the Owners Committee shall approve. All expenses
       incurred in connection with the performance of the duties of the Committee Secretary shall
       be borne by the Owners in proportion to their Percentages of Ownership in the Pipeline
       under such arrangements as the Owners Committee shall approve. The Committee
       Secretary and Assistant Committee Secretary shall serve at the pleasure of the Owners
       Committee. The Assistant Committee Secretary shall perform the duties of the Committee
       Secretary at the request of or in the absence of the Committee Secretary.

              (e)  Other Expenses. Except as provided in Subdivision (d) of this paragraph.
       each Owner shall pay all expenses incurred by it relating to its representation on the
       Owners Committee.

       4.2     Voting Procedures of the Owners Committee. All matters requiring approval by
the Owners through the Owners Committee in this Operating Agreement may be approved only
upon the affirmative vote of Members or Alternates, as the case may be. representing three (3) or
more Owners having Percentages of Ownership in the Pipeline which aggregate at least sixty-six
and two-thirds percent (66%%).

      4.3 Effect of Owners Committee Action on Parties. Any and all determinations
which are properly made bv the Owners through the Owners Committee under this Operating
Agreement shall be conclusively binding on each and all of the Owners.

        4.4 Subcommittees. The Owners through the Owners Committee may establish such
subcommittees to act in an advisory capacity as the Owners Committee may deem necessary for
the efficient performance of its responsibilities under this Operating Agreement. Each such


                                                10
                                                                                            538
subcommittee shall conduct its affairs in accordance with policies and procedures established by
the Owners through the Owners Committee. Each Owner shall have the right to name one
representative to each subcommittee so established.


                                           SECTION 5

                                            OPERATOR

       5.1 Operator. Each Owner will contract with an Operator selected by the Owners to
perform on behalf of each Owner specific duties with regard to the physical operation and
maintenance of its undivided interest in the System as assigned to Operator under the terms and
provisions of this Operating Agreement, for the period of time determined under Section 5.2
hereof.

       5.2     Term of Initial Operator. Operator shall serve for an initial term of ten (10) years
commencing on the Date of this Agreement and thereafter for successive terms of five (5) years
each, unless prior thereto Operator is removed or resigns pursuant to Section 5.3 hereof or this
Operating Agreement is terminated, whichever occurs first.

       5.3     Removal or Resignation of Operator. Any Owner may, at any time, submit its
request to all other Owners for the removal of the Operator and if three (3) or more Owners,
having Percentages of Ownership in the Pipeline which aggregate at least sixty-six and two-thirds
percent (66%%), vote for such removal it shall be conclusively binding on all Owners and
Operator. The Operator shall be removed effective as of the date specified in a notice of removal
signed by the Owners who voted affirmatively for said removal and forwarded to Operator and/or
other Owners, but in no event shall such removal be effective less than one (1) year from the date
of the notice. Operator may resign, effective as of the last day of the initial term or any
succeeding five-year term by giving notice to all Owners not less than one (1) year prior to the last
day of such term.

       5.4     Selection of a Successor Operator. Upon the removal or resignation of an
Operator, all Owners will vote on the selection of a new Operator (herein called Successor
Operator) and the person selected by three (3) or more Owners having Percentages of Ownership
in the Pipeline which aggregate at least sixty-six and two-thirds percent (66%%) shall be
conclusively binding on all Owners. All Owners will be advised of the person selected as the
Successor Operator and if the said person accepts the selection as Successor Operator he shall
execute and send to each Owner an instrument accepting such selection as Operator under the
terms and provisions of this Operating Agreement (including the removal and resignation
provisions herein and any other agreements referred to herein) and agreeing to discharge the duties
of the Operator hereunder from and after the effective date of its selection as Operator. Such
instrument shall be binding upon each Owner and shall have the same effect as the several
agreements by and between each and every Owner and the Successor Operator to operate and
maintain the System under the terms and provisions of this Operating Agreement from and after



                                                 11
                                                                                            539
the effective date of the selection of the Successor Operator as Operator. If the removal or
resignation of the Operator is effective upon the expiration of the initial term or any succeeding
term, the Successor Operator shall serve as Operator for the next succeeding term. If the removal
or resignation shall be effective during the initial term or any succeeding term, the Successor
Operator shall serve as Operator for the remainder of the then current term. In either case, the
Successor Operator shall thereafter serve as Operator for each successive term unless and until
such Successor Operator shall be removed or shall sooner resign as Operator under the provisions
of Section 5.3 above or this Operating Agreement is terminated, whichever occurs first.


                                          SECTION 6

                                           OPERATION

        6.1     Rights of Owners. Each Owner, as the holder of an undivided interest in the
System, has and retains all the rights of ownership incident to its undivided interest subject only
to any applicable laws and regulations, the TAPS Agreement, the Rights-of-Way Agreements and
this Operating Agreement. To enable each Owner to exercise its rights, Operator, under the
direction and control of the Owners through the Owners Committee, will perform certain duties
related solely to the physical operation and maintenance of the System as set out in this Operating
Agreement and will act as the Owners' common agent to the extent required by the Rights-of-Way
Agreements.

        6.2    Individual Conunon Carrier. Each Owner is obligated to conduct the operation
of its undivided interest in the System as a common carrier facility and each Owner has agreed
that, from and after the Date of Commissioning, its undivided interest in the System will be
operated as an individual common carrier facility. In performance of such undertaking, each
Owner on its own behalf will in accordance with all applicable laws, regulations and agreements:

               (a)    separately publish and file tariffs in its own name

               (b)    separately solicit and receive tenders of Petroleum from shippers.

              (c)    separately arrange with its shippers for the transportation of any such
       tendered Petroleum.

              (d)     separately collect for its own account and freely dispose of any revenues
       from its individual and separate operations as a common carrier.

               (e)    separately arrange for and provide funds required to pay its share of
       expenses for the operation and maintenance of the System.

              (0     separately exercise such other rights and perform such other functions
       required to operate its undivided interest as an individual common carrier facility.



                                                12
                                                                                           540
Neither Operator, nor the Owners Committee, shall have any responsibility for, nor shall they take
any action on, matters which relate to common carrier responsibilities as set out in this
Section 6.2.

       6.3 Owners Committee           —   Powers and Functions. Each Owner will exercise
supervision of the Operator's services through its representative on the Owners Committee. The
Owners through the Owners Committee shall:

               (a)     approve budgets pursuant to Section 11.2 hereof.

              (b)    approve the acquisition in the name of the individual Owners of Land
       Rights, materials, supplies and services as required through the budget approval under
       Section 11.2 hereof.

               (c)    approve all manuals referred to in this Operating Agreement.

              (d)    establish standards and procedures for connections to the Pipeline as
       required by Section 7.8 hereof.

               (e)    approve settlement of claims, initiation of lawsuits and such other matters
       as required by Section 9.2 hereof.

              (f)    approve the disposal of material, equipment and facilities as required by
       Section 10.2 hereof.

              (g)     exercise such other authorities and powers as are delegated by the Owners
       under the terms of this Operating Agreement or as may be required to provide guidelines
       and policies to permit Operator to perform its services.

       6.4      Operator's Services. To enable each Owner to exercise its rights and to effectively
discharge its obligations as an individual common carrier, Operator will perform on behalf of each
Owner the services related solely to the physical operation and maintenance of the System. As
more specifically detailed in this Operating Agreement, Operator shall:

              (a)    perform such mechanical activities as may be required to transport and
       otherwise handle Petroleum in each individual Owner's share of System capacity and load
       on Vessels when and as requested by each Owner consistent with the terms of this
       Operating Agreement.

              (b)     submit to Owners recommended budgets, in accordance with Section 11.2
       hereof, for their consideration and approval through the Owners Committee.

               (c)    purchase or cause to be purchased for and in the name of Owners necessary
       materials, supplies and services and incur such expenses and commitments as required to



                                                13
                                                                                           541
       carry out the operations in accordance with Approved Budgets and within the limitations
       of this Operating Agreement.

              (d)     make timely payment of all proper charges, expenses, and liabilities
       incurred in connection with Approved Budgets and Section 11.3 hereof.

               (e)   coordinate the acquisition of Land Rights by the Owners as required for the
       physical operation of the System in accordance with Approved Budgets and Section 6.5
       hereof.

              (f)     act as coordinator of Owners' contact with government agencies where
       required by rules, laws or regulations and/or the Rights-of-Way Agreements relating to the
       physical operation and maintenance of the System.

              (g)    dispose of materials, equipment and facilities in accordance with
       Section 10.2 hereof.

               (h)    issue only such news items or otherwise engage in public affairs as will be
       consistent with guidelines issued by the Owners through the Owners Committee relating
       to the physical operation and maintenance of the facilities within the System.

               0)     perform such other activities and take such other action as may be required
       to carry out the Approved Budgets and other decisions made by the Owners through the
       Owners Committee, provided such activities or actions relate solely to the physical
       operation and maintenance of the System.

In performance of its activities pursuant to this Operating Agreement. Operator shall not do any
work which would constitute an expansion of the System as that term is used in Article VI of the
TAPS Agreement. Operator shall perform all its services under this Operating Agreement in a
good and workmanlike manner as a prudent Operator would under the same or similar
circumstances. Operator shall conduct all operations and maintenance of the System in accordance
with generally accepted practices in the pipeline industry to the end that the System is operated
within its design limitations for safe and efficient operations

       6.5      Acquisition of Land Rights. All Land Rights shall be acquired by the Owners
pursuant to an Approved Budget It is contemplated, however, that, for convenience, title to some
of the Land Rights, such as easements, leases, licenses and permits, may be acquired by and in
the name of a Trustee for all of the Owners, in which event the Trustee shall thereafter, as each
Owner may individually direct, promptly execute and deliver to all Owners or to one of them as
Trustee for all Owners such instruments of transfer, assignment and conveyance as may be
appropriate to evidence properly the undivided interest ownership of the particular Owner or
Owners. Condemnation may be used by any Owner or Owners to acquire Land Rights whenever
the terms and conditions asked for such Land Rights are unreasonable. Each Owner hereby
consents to join as a party plaintiff in any condemnation suit filed on conditions hereinafter defined



                                                 14
                                                                                              542
for the purpose of acquiring Land Rights needed for the operation and maintenance of the System
and authorizes any attorneys retained in such condemnation suit to join it as a party plaintiff in
such suit and to represent it for all purposes in such condemnation proceeding. Each Owner
further agrees that it will become qualified to the extent necessary to transact business in the State
of Alaska if it is necessary or desirable to do so in order to avoid delay in condemning any such
Land Rights. Each Owner shall qualify as promptly as practicable after it is determined that
qualification is necessary. All such Land Rights shall be acquired, whenever possible, in
assignable form. The cost of all such Land Rights shall be charged to the account of each Owner
in accordance with Sections 10 and 11 hereof.

        6.6    Personnel and Other Services. Operator in performing its duties under this
Operating Agreement shall engage the services of independent contractors to perform such parts
of the operation and maintenance of the System which cannot be performed by Operator’s
employees or which can more economically and just as efficiently be performed by independent
contractors as with Operator’s own employees. Operator shall employ only such personnel as are
required to perform its duties under this Operating Agreement and are within staffing limits
established by the Owners through the Owners Committee.

        6.7     Other Plans of Operation. Nothing in Section 6.2 hereof shall be deemed to
prohibit Owners from participating in any plan of operation required, approved, or permitted by
any governmental authority having jurisdiction in accordance with any valid and applicable order.
rule, regulation and/or law. and which is not inconsistent with any other provision hereof or the
TAPS Agreement.



                                           SECTION 7

                                    OPERATING PROCEDURES

       7.1     Quality and Intermixing of Petroleum.

       (a)      Only Petroleum will be accepted for transportation in the System. All Petroleum
transported through the System will be intermixed with other Petroleum shipments and shall be
subject to such changes in gravity, quality and other characteristics as may result from such
intermixing. No person shall be entitled to receive the identical Petroleum delivered into the
System. Delivery shall be out of the commingled stream or common stock. In order to insure that
no shipper will be materially damaged or benefited by changes in gravity, quality or other
characteristics due to intermixing in the System, each Owner will require shippers tendering it
Petroleum for transportation in its undivided interest in the System to participate in just and
nondiscriminatory adjustments among all shippers in the System for changes in gravity, quality
and certain other characteristics which materially affect the value of Petroleum transported in the
System. The Owners by agreement will establish, or cause to be established, a system for such
adjustments (herein referred to as Quality Bank).



                                                  15
                                                                                              543
       fl»       Petroleum will not be accepted for transportation in the System unless (i) it is
suitable for refining or use as a fuel and contains no more than thirty-five one hundredths of 1%
(0.35%) by volume of basic sediment and water, (ii) its temperature docs not exceed 142 QF,
provided that Petroleum may be accepted for transportation at any point in the System at a
temperature in excess of 142 F but only under such circumstances and during such times as
Operator hereunder determines, with approval of the Owners acting through the Owners
Committee under Section 4.2 hereof, will not result in violation of any design or operating
requirement for the System at any point in the System or result in inequities or discrimination as
between Owners or shippers, (iii) its hydrogen sulfide (H2S) content in solution does not exceed
50 parts per million by weight, and (iv) it will not result in the calculated combined stream of
Petroleum in the System under the custody of each Owner at any given entry point in the System
at any given time exceeding ten (10) parts per million hydrogen sulfide (H»S) content in solution
by weight, or the vapor pressure of such combined stream exceeding the greater of atmospheric
pressure or 14.7 psia at receipt temperature. In calculating the above specified characteristics of
the combined stream of Petroleum at any given entry point in the System under the custody of each
Owner only Petroleum delivered into the System by that Owner at the point and all points
upstream shall be considered. In no event will Petroleum be accepted for transportation in the
System unless its gravity, viscosity, pour point, vapor pressure and other characteristics are such
that it is readily susceptible to safe and efficient transportation through the System and will not
materially affect the characteristics of other Petroleum shipments for which adjustments arc not
or will not be available through the Quality Bank.

       (c)      Before any Petroleum will be accepted for transportation through the System which
is from any producing reservoir or processing plant from which Petroleum has not previously been
accepted for transportation, the Owner to whom such Petroleum is tendered shall give the Operator
and all other Owners written notice thereof at least thirty (30) days prior to its actual acceptance.
Such notice shall include a suitable assay of the tendered Petroleum and Operator's advice as to
the ability of the System to handle and transport such Petroleum safely and efficiently. During
such thirty (30) day period each Owner shall advise Operator of any objections to the acceptance
of such Petroleum solely on the basis of anticipated damage to the System or damage to the com¬
mingled stream of a kind for which just and reasonable compensation cannot be obtained through
the Quality Bank. If any Owner so objects, the matter shall be referred to the Owners through the
Owners Committee for resolution

       7.2     Measurements of Receipts and Deliveries of Petroleum. Operator shall ascertain
and record the quantity and quality of Petroleum received into and delivered out of the System as
follows:

               (a)     Quantity Measurements.

                      0)      Meters. Custody transfer measurement of all receipts into and
               deliveries out of the System shall be by meters except in instances where meters
               may not be operable or otherwise available in which case an alternate method
               provided for in the Oil Measurements Manual shall be used.



                                                 16
                                                                                             544
                      (ii)    Calibration of Meters. Operator shall calibrate or cause to be
              calibrated, in accordance with the Oil Measurements Manual, all tanks, meters, and
              meter provers to be used in the operation of the System, and at the reasonable
              request of any Owner, Operator will confirm the accuracy of existing meter prover
              base volumes and tank tables used in connection with the System.

              (b)    Quality and Characteristic Analysis. Basic sediment and water (BS&W),
       temperature, gravity, and other Petroleum quality tests shall be made by Operator in
       accordance with the Oil Measurements Manual.

              (c)     Reporting to Owners. Operator shall report to each Owner for all Petroleum
       received into and delivered out of the System for the account of such Owner on the basis
       of standards set forth in the Oil Measurements Manual.

      7.3 Petroleum Losses and Gains. All losses and gains of Petroleum from or in the
System shall be allocated by Operator among the Owners as hereinafter set forth:

              (a)    The total amount of any loss of Petroleum in the Pipeline exceeding 4,000
       Barrels occasioned by or resulting from any single identifiable event shall be allocated
       among all Owners based on their Percentage of Ownership in the Pipeline at the lime the
       loss occurs.

              (b)    The total amount of any loss of Petroleum in Terminal Tankage exceeding
      4,000 Barrels occasioned by or resulting from any single identifiable event shall be
      allocated among all Owners in the proportion that the Petroleum in the custody of each
      Owner in Terminal Tankage at the beginning of the Day on which the loss occurs bears to
      total Petroleum held in Terminal Tankage at the beginning of that Day.

              (c)    All gains and all other losses of Petroleum in the System or extractions from
      Petroleum in topping plants shall be allocated among all Owners in the proportion that the
      total 100 Barrel-Mile Deliveries for each Owner's account bears to the total of all 100
      Barrel-Mile Deliveries. Operator shall make such allocations monthly, but the cumulative
      net amount of such gains, losses or extractions shall be adjusted monthly on a
      Calendar-Year-to-Date basis within a Calendar Year.

        7.4 Scheduling and Use of the System. No Owner may transport through the System
a Volume of Petroleum in excess of such Owner's Actual Daily Pipeline Capacity. No Owner
may deliver out of the System a Volume of Petroleum in excess of the amount of Petroleum held
in that Owner's Working Inventory and Owner's Base Inventory. Each Owner shall first deliver
out of the System Petroleum held in its Owner's Working Inventory and may thereafter deliver
Petroleum held in its Owner's Base Inventory provided:

              (i)     the lifting was included in the Lifting Schedule, or will not adversely affect
       the scheduled lifting of any other Owner.



                                                17
                                                                                            545
               (ii)    the lifting will not impair the minimum required inventory operating levels
        as determined by Operator.

               (iii) the lifting Owner's Base Inventory at the commencement of each such lifting
        is equal to the Volume of Base Inventory such Owner is obligated to provide under
        Section 7.6 hereof.

In order to insure that each Owner has the opportunity to schedule and use an amount of Pipeline
capacity calculated as provided in this Section 7.4, the Owners agree that the scheduling and use
of the System shall be in accordance with the following provisions:

       (a)     Scheduling and Use of the Pipeline. By notice no later than 1200 hours Valdez.
Alaska, local lime of the first Operator Business Day of each Month, Operator will advise each
Owner (i) of the Estimated Daily Pipeline Capacity for each Owner for the succeeding Month and
(ii) of the Pumpability Factor of each Petroleum anticipated to be transported in the System during
such succeeding Month. By notice no later than 2400 hours Valdez, Alaska, local time of the
fifteenth Day (or, if the fifteenth Day is not an Operator Business Day, then of the first succeeding
Operator Business Day) of each Month, each Owner will advise Operator of its throughput
schedule for the succeeding Month. In order to facilitate Pipeline operations and prevent
discrimination among shippers, the Owners will approve nominations procedures for the Pipeline.
Each Owner will require shippers tendering it Petroleum for transportation in its undivided interest
in the System to comply with such nominations procedures. Any Owner may revise its throughput
schedule as allowed by such nominations procedures, provided that no Owner shall schedule or
deliver into the Pipeline more Petroleum than could be transported by the capacity allocated to
such Owner for transport through the Pipeline for that Month in accordance with this Section
7.4(a). Any Owner's failure for any reason to use fully its Estimated Daily Pipeline Capacity shall
not thereafter entitle it to schedule or use capacity in excess of its Estimated Daily Pipeline
Capacity.

       (b)     Scheduling and Use of Terminal.

                (i)     Scheduling of Liftings and Vessels. Any Owner expecting to commence
       lifting at the Terminal for the first time shall provide a one-Week notice prior to submitting
       the four-Week schedule required by this section. In addition to the requirements imposed
       by the immediately preceding sentence, each Owner will advise Operator of the schedule
       of Vessels it expects to call at the Terminal during the ensuing four-Week period,
       specifying for each Vessel scheduled for the first Week of such four-Week schedule and
       to the extent possible for the last three Weeks, the Volume to be lifted, name. Scheduled
       Arrival Day. and such other information as required by the Port Information Manual.

               (ii)   Preparation of Lifting Schedule. Within twenty-four (24) hours from the
       time Owners are required to provide the above Vessel and lifting schedule information.
       Operator shall prepare and submit to each Owner a preliminary composite schedule of such
       information together with projected daily Working Inventory for the applicable four-Week



                                                 18
                                                                                             546
period. If there are more proposed liftings on any Day during the first Week of such
four-Week period than can be accommodated by the Terminal and such conflicts cannot
be resolved voluntarily between the conflicting Owners, Operator shall resolve such
conflicts in accordance with the rules provided for in Section 7.4(c)(1), Assignment of
Dock Space. After resolution of all conflicts in accordance with these rules, the Lifting
Schedule then established shall be issued to each Owner.

        (iii) Revision of Lifting Schedule. Any changes or Vessel substitution may be
made to the Lifting Schedule established in 7.4(b)(ii) by any Owner upon written notice
to Operator at least seven (7) days in advance of a scheduled lifting subject to the
scheduling priority rules provided for in Section 7.4(c)(i). Changes or Vessel substitution
with less than seven (7) days notice may be made provided such changes or Vessel
substitution will not adversely affect any other Owner’s scheduled liftings, unless such
other Owner's prior written consent is obtained, and the changes or substituted Vessel
complies with the Port Information Manual.

        (iv)   Notice of Revised Lifting Schedule. When a revision or change is made to
the Lifting Schedule in accordance with 7.4(b)(iii) above, the Operator will promptly notify
all the Owners of the revised Lifting Schedule and the effective date of the revision.

(c)    Docks.

       (i)      Assignment   of Dock Space. Vessels shall be assigned dock space by
Operator in the order of Actual Arrival Time. Provided however, that.

              1.     adequate and appropriate inventories designated for lifting by such
       Vessel have been established, and

              2.     if in the Operator's prudent judgment such prioritization will
       optimize System deliveries.

Each Vessel shall dock when and as instructed by Operator. If any Vessel is unable to
dock when instructed. Operator shall dock the next Vessel waiting to be docked based on
the order of dock assignment until the Vessel that was unable to dock is able to dock.

        (ii)    Lifting Time. After a Vessel has been docked, it shall be allowed 24 hours,
if the Vessel is of two hundred twenty-five thousand (225,000) dead weight tons or less,
or 30 hours, if the Vessel is of greater than two hundred twenty-five thousand (225.000)
dead weight tons, from the time that Operator gives notice of readiness to commence either
loading or deballasting within which to complete its lifting and to release its last line from
a mooring point at the dock. If any Vessel fails to release its last mooring line before a
specified departure time contained in a notice from Operator (which specified departure
time shall not be earlier than the end of such 24-hour or 30-hour period, nor earlier than
four hours after Operator transmits such notice to the Vessel), the Owner scheduling such



                                         19
                                                                                      547
       Vessel shall thereafter pay a penalty of Two Thousand Dollars ($2,000) for each hour or
       part thereof such Vessel remains at the dock, while such dock is required to load another
       Vessel which has established an Actual Arrival Time The Operating Expense account of
       the Owner incurring the penalty shall be debited with the full amount of any such penalty
       and the Operating Expense accounts of all other Owners shall be credited with a pro rata
       share of such penalty prorated on the basis of the percentages of Ownership of the Pipeline
       of such other Owners.

               Any delay due to:

                      A.     any act or omission of Operator, or

                      B.     a local event or condition of general application (except mechanical
              equipment malfunction on the Vessel) not within the control of Operator, the
              Owner scheduling the Vessel or any other person responsible for the operation or
              control of such Vessel

       which act, event or condition prevents the Vessel from vacating the docks shall be added
       to the time until a Vessel is required to vacate the dock.

       (d)      Working Capacity. If, at the beginning of any Day, Working Inventory equals or
exceeds seventy-five percent (75%) of Working Capacity and any Owner’s Working Inventory is
in excess of such Owner’s Working Capacity, such Owner shall be charged a penalty of Twenty
Cents (20c) per Day per Barrel for each Barrel in such Owner’s Working Inventory in excess of
such Owner’s Working Capacity. The Operating Expense account of the Owner incurring the
penalty shall be debited with the full amount of any such penalty and the Operating Expense
accounts of the other Owners shall be credited with an amount determined by multiplying the total
amount of the penalty for any Day by a percentage determined for each Owner by dividing the
amount of that Owner’s Working Capacity at the beginning of that Day not being used by it by the
aggregate of all Owner's Working Capacity at the beginning of that Day not being used by its
Owner. In calculating the penalty under this Section 7.4(d), the number of excess Barrels at the
beginning of any Day shall be reduced by

               (i)    the number of Barrels scheduled to be lifted by a Vessel which has
       established an Actual Arrival Time at the beginning of any Day the penalty is applied but
       is unable to dock because the passage through Prince William Sound or Valdez Arm is
       closed to shipping due to an event or condition not within the control of the Owner
       incurring the penalty, and

               (ii)    the number of Barrels scheduled to be lifted by a Vessel which has docked
       but is unable to lift at the beginning of any Day due to any act or omission of Operator or
       due to any local event or condition of general application not within the control of
       Operator, the Owner scheduling such Vessel or any person responsible for the operation
       or control of such Vessel which does or would prevent all Vessels from loading.


                                               20
                                                                                          548
        7.5    Manuals. Owners will arrange for ihe preparation of all manuals referred to in this
Operating Agreement and such other manuals as are required for the safe and efficient operation
of the System, or the administration of this Operating Agreement or which are required by any
applicable law. regulation or agreement. Any such manuals or changes thereto shall be approved
by the Owners through the Owners Committee. If there arc any conflicts between the provisions
of such manuals and the terms of this Operating Agreement, this Operating Agreement shall
control.

        7.6    Base Inventor>'. 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 use other options to dispose of surplus materials, equipment
       or facilities pursuant to guidelines established by the Owners through the Owners
       Committee.

              (iii) A sale by any means of any items of materials, equipment or facilities
       having a Purchase Price or an appraised fair-market value of $1 ,000,000.00 or more must
       be approved in advance by the Owners through the Owners Committee.

              (iv)    Prior to the time any item of materials, equipment or facilities is put out for
       bid or otherwise put up for sale, any Owner will have an opportunity to buy such
       materials, equipment or facilities at the appraised fair-market value. If two or more
       Owners are interested in the same item and such Owners cannot arrive at a mutually
       acceptable solution, Operator will bid such item among the interested Owners and award
       the sale to the Owner making the highest bid provided such bid is not less than the
       appraised fair-market value.

              (v)     All proceeds derived from sales of materials, equipment and facilities shall
       be remitted by purchaser either directly to the Owners (including any Owner that purchases
       such equipment) in the proportion of their applicable Percentages of Ownership in such
       materials, equipment and facilities at the time of the sale or to a third party selected by the
       Owners who will distribute the proceeds as indicated above.

               (vi)   The disposal authority given to Operator in this Section 10.2(b) is revocable
       at will by any Owner except in cases where (prior to notice of such revocation) Operator
       has offered for bid any item of material, equipment or facilities or has contracted to sell
       such property.

       10.3    Inventories of Materials and Supplies.

       (a)      Inventory of Materials and Supplies. Operator shall maintain inventory accounting
records, as required by the Federal Energy Regulatory Commission, or any successor thereto with
respect to the regulation of oil pipelines, of all inventories of materials, supplies and uninstalled
spare equipment acquired or held for or in connection with operation or maintenance of the
System. At least once each Calendar Year Operator shall make a physical count of such
inventories. Each Owner who wishes to be represented at such count may do so. Failure of any
Owner to send a representative shall bind it to accept the physical inventory as submitted.

        (b)   Ownership of Materials and Supplies. Materials and supplies shall be owned by
the Owners in proportion to their Percentages of Ownership in the Pipeline or Terminal Tankage
as the case may be.


                                                 27
                                                                                             555
                                          SECTION 11

                     ACCOUNTING, BUDGETS, CHARGES AND AUTHORITIES

        11.1 Maintenance of Accounts. Operator shall maintain accurate accounting records
of all expenses, costs and liabilities incurred by it on behalf of Owners. All accounts shall be
maintained in accordance with generally accepted accounting principles, the Uniform Systems of
Accounts prescribed by the Federal Energy Regulatory Commission, or any successor thereto with
respect to the regulation of oil pipelines, for Oil Pipeline Companies.

       11.2    Budgets and Long-Range Plans.

       (a)      Budgets. In furtherance of each Owner’s effective exercise of control over the
operation of its undivided interest in the System, Operator shall prepare and present to the Owners
no later than July 1 of each Calendar Year for their approval through the Owners Committee no
later than December 1 of each Calendar Year annual budgets as required by the Owners through
the Owners Committee for the ensuing Calendar Year.

       (b)   Long-Range Plans. The Operator shall also prepare and submit to Owners no later
than July 1 of each Calendar Year a long-range plan detailing by Calendar Year estimated
Operating Expenses and Capital Expenditures for the next ensuing ten (10) Calendar Years.

       (c)    Budget Update. In addition to the submittals provided for in Sections 11.2(a) and
(b) above. Operator shall submit for Owners' review through the Owners Committee budget
updates as required by the Owners through the Owners Committee

       (d)     Additions and Other Changes. Except in accordance with procedures approved by
the Owners through the Owners Committee, all additions or other changes to the Approved
Budgets shall be approved by the Owners through the Owners Committee. AH additions or other
changes in excess of One Million U.S. Dollars ($1,000,000.00) requested by Operator or any
Owner shall be submitted to each Owner no later than thirty (30) days prior to the date such
addition or other change is scheduled for review and approval.

       (e)      Approvals. Any Owners Committee Member (or its alternate) who is unable to
attend the Owners Committee meeting at which time the budgets are scheduled for approval vote
shall telecopy, employ other appropriate means of electronic communication, or mail his vote on
each item scheduled for consideration so that it will be received by Operator no later than three
(3) working days prior to the scheduled meeting date. Members (or their alternates) who do not
attend such committee meetings and who have not otherwise communicated their vote shall be
considered to have cast an affirmative vote on each item scheduled for consideration.

      11.3 Authority for Expenditure. Any Authority for Expenditure ("AFE") of at least
Five Million U.S. Dollars ($5,000,000). whether for capital expenditures (including retirement)


                                                28
                                                                                            556
or for operating expenses, for which there is a detailed item in the Approved Budgets shall be
approved by the Owners through the Owners Committee. In addition, any AFB of at least Two
Million U.S. Dollars ($2,000,000) for capital expenditures (including retirement) or for operating
expenses (i) for which there is not a detailed item in the Approved Budgets, or (ii) which is related
to design and long-lead material shall be approved by the Owners through the Owners Committee.
Any supplemental AFE of at least One Million U.S. Dollars ($1,000,000.00) requested by the
Operator shall be approved by the Owners through the Owners Committee. Operator may also
make expenditures in the case of emergencies as provided in Section 11 .7 hereof

      11.4 Charges. Operator shall on behalf of Owners promptly pay and discharge all
expenses, costs and liabilities incurred in operating and maintaining the System or in performing
Operator's service under this Operating Agreement.

               (a)     Chargeable Items. Any and all costs, expenses or liabilities incurred by
       Operator for or in connection with the operation and maintenance of the System or which
       are necessary in the performance of Operator’s services and responsibilities under this
       Operating Agreement shall be considered a proper charge to the accounts of the Owners.
       Each Owner agrees to pay its share of all such costs, expenses or liabilities in accordance
       with the provisions of this Operating Agreement. While any Owner is separately paying
       its share of any costs, expenses, taxes or liabilities under any provisions of this Operating
       Agreement, such Owner shall not be charged with a pro rata share of any such costs.
       expenses, taxes or liabilities. If any facility which is classified as either Pipeline or
       Terminal Tankage under Section 3 hereof is used to provide services to the other. Operator
       shall make an appropriate allocation of the costs of operating and maintaining such
       facilities between Pipeline and Terminal Tankage based on usage.

              (b)     Allocation of Charges and Credits
                                                                —
                                                               Fixed and Capital. Except as
       provided elsewhere in this Operating Agreement, all capital expenditures related to the
       Pipeline and all Pipeline Fixed Operating Expenses and related credits shall be allocated
       monthly among Owners in accordance with their respective Percentages of Ownership in
       the Pipeline and all capital expenditures related to Terminal Tankage and all Terminal
       Tankage Fixed Operating Expenses and related credits shall be allocated monthly among
       the Owners in accordance with their respective Percentages of Ownership in Terminal
       Tankage. Should the Percentages of Ownership change during a month. Operator shall
       prorate such charges accordingly on a Calendar Day basis.

               (c)     Allocation of Charges and Credits    —   Variable.

                       (i)   Pipeline Variable Operating Expenses and related credits shall be
               allocated among all Owners in the proportion that the total 100 Barrel-Mile
               Deliveries for each Owner's account bear to the total of all 100 Barrel-Mile
               Deliveries. Operator shall allocate such expenses monthly, adjusted to a Calendar
               Year-to-Date basis within a Calendar Year.



                                                 29
                                                                                             557
                       (»i)    Terminal Tankage Variable Operating Expenses and related credits
               shall be allocated among Owners in the proportion that the total deliveries out of
               the System at Valdez. Alaska, for each Owner's account bear to the total of all
               deliveries out of the System at Valdez, Alaska. Operator shall allocate such
               expenses monthly, adjusted to a Calendar Year-to-Date basis within a Calendar
               Year.

        11.5 Reports and Information. At the request of any Owner, Operator shall provide
such information, records, and repons as necessary for such Owner to properly accomplish
required reports to government agencies and provide such other information, records and reports
relating to an Owner’s undivided interest in the System as may be requested. In this connection,
each Owner shall promptly notify Operator of any and all changes in or additions to reporting
requirements prescribed by governmental and regulatory bodies which come to their attention and
which will affect Operator s preparation of the reports covered by this Section 11 .5 hereof.

       11.6    Cash Calls.

       (a)      Operator shall submit to Owners by the 12th day of each month a forecast of the
monthly cash requirements. Such forecast shall disclose separately the aggregate requirements lor
operating and capital expenditures by months for the next twelve (12) months and by Week for the
first eight (8) Weeks of said twelve (12) month period.

        (b)    Operator shall notify each Owner by telecopy or other appropriate means of
electronic communication on the last working day of each Week or Friday (whichever is earlier)
of the anticipated cash requirements for the next ensuing Week. Each Owner shall arrange to
deposit into Operator's designated account its share of such funds (as each Owner's share of such
funds shall be determined and adjusted from time to time by the Operator using appropriate
composite percentages and cash adjustments reflecting changes in actual expenditures between
Terminal Tankage facilities and System other than Terminal Tankage facilities in accord with
procedures approved by the Owners Committee hereunder) sufficient to meet Operator's cash
requirements and maintain Operator’s account at such minimum balance as shall be agreed to
between the bank and the Owners.

        (c)     Delinquent cash deposits by any Owner shall bear interest from the day such deposit
becomes delinquent and continuing until such delinquency is redressed at a rate of 125% of the
prime rate of interest of the Citibank N.A., 399 Park Avenue, New York, New York, on ninety-
day loans to substantial and responsible commercial borrowers as such rate shall change from time
to time, each such change to become effective on the effective date of such change of said Bank.
provided that if such rate of interest shall be unlawful under applicable law. then i*. shall be
reduced to the highest lawful rate. All interest paid by a delinquent Owner shall be paid to the
nondeliquent Owners in the proportions in which the nondeliquent Owners have provided funds
to meet the cash calls which delinquent Owners failed to provide. If any Owner shall be
delinquent for as much as thirty (30) days in any payment to Operator, Operator, as agent, and
for the benefit, of all Owners who are not deliquent, shall have, i addition to any other legal or



                                                30
                                                                                          558
equitable remedy available to the Parties, the right upon written notice to any shipper of such
delinquent Owner to have all payments to be made by such shipper under the tariffs of such Owner
covering its undivided interest herein to be made to Operator for application upon such Owner's
accounts; and such Owner agrees no shipper shall be required to determine whether proper
application is made by Operator of any payment made to Operator in accordance with this
provision. If, for any reason, Operator cannot collect such tariffs, Operator shall not accept any
shipments of Petroleum for the account of any delinquent Owner until such time as all delinquent
amounts, including interest thereon, have been paid in full.

       11.7    Emergency Authority.

       (a)   Operator is herein authorized to make immediate commitments or expenditures up
to $10,000,000 without prior approval as necessary to:

             (i)       Prevent imminent escape of oil, liquids or hydrocarbon vapors from the
       System.

               (ii)    Prevent imminent injury.

              (iii) Prevent, curtail, minimize or otherwise mitigate imminent damage to the
       environment or the property of Owners or third parties.

               (iv)    Prevent imminent failure or unplanned shutdown of the System.

             (v)     Restore the System to operating condition following any unplanned
       shutdown or failure.

               (vi)    Comply with emergency orders of any governmental agency.

        (b)     Upon the occurrence of any such events, Operator shall immediately notify each
Owner by cable, telecopy, other means of electronic communication or telephone as appropriate
and later confirm by letter specifying the occurrence, the action taken, estimated expenditure, any
further action required, and such other details as may be required for reporting to local, state, and
federal regulatory agencies.

       (c)     None of the provisions of this Operating Agreement shall be construed to limit or
deny the rights of Operator to take actions or expend funds as provided in this Section 11.7.

      11.8 Policies. Operator shall prepare and submit for approval by the Owners through
the Owners Committee Policies concerning, but not limited to, the following matters:

               (a)     Audit.

               (b)     Code of conduct/standards of professional interaction.



                                                 31
                                                                                             559
                (c)    Compliance with right-of-way agreements, permits, laws and
                       regulations.

               (d)     Conflict of interest.

               (e)     Contingency plans.

               (f)     Contributions.

               (g)     Environmental protection.

               (h)     Organization and authority.

               (i)     Political activities.

               0)      Quality program.

               <k)     Records management.

               (1)     Safety and loss prevention.

               (m)     Security.

               (n)     Substance abuse.

        11.9 Relocation Agreements. Operator as agent for each Owner may contract on behalf
of each Owner with any governmental agency or entity for lowering, adjusting, or relocating the
Pipeline if (i) the project is entirely reimbursable, (ii) the nonreimbursable portion does not exceed
$200,000 or (iii) the Owners are legally required to make such lowering adjusting or relocation
at their own expense. If the nonreimbursable part exceeds $200,000 [as in (ii) above] or if any
nonreimbursable part is for any nongovernmental third party, Operator shall secure the approval
of the Owners through the Owners Committee before proceeding. Nonreimbursable expenditures
will be charged to Pipeline Fixed Operating Expenses. Costs to be reimbursed shall include, but
not be limited to, applicable materials, contracts, salaries and benefits of Operator's employees,
and operating and administrative overhead as shall from time to time be determined and applied
on a percentage of direct labor basis, less any appropriate credits for salvageable materials net of
the cost of removal and disposal.

       11.10 Audits.

        (a)    As soon as practicable after the Date of Commissioning of the System, Operator
shall have an audit made of its accounts; this audit shall be repeated once in each Calendar Year
thereafter. Each Owner shall be furnished a copy of each Calendar Year’s audit before February
15 of the Calendar Year following the Calendar Year covered by the audit. Each such audit shall



                                                 32
                                                                                             560
be made by a Certified Public Accounting Firm selected and approved by (he Owners through the
Owners Committee, and the expense thereof shall be allocated among the Owners in accordance
with their Percentages of Ownership in the Pipeline.

         (b)    The Owners through the Owners Committee shall establish procedures for
performing all internal auditing, including, but not limited to, audits of all internal functions of
the Operator, contractors and vendors supplying services or materials to the Operator. The cost
of this function wilJ be segregated on the books of the Operator and will be charged to accounts
of all Owners in proportion to Percentage of Ownership in the Pipeline.

         (c)     In addition to the audits provided for in this Section 11.10 hereof, each Owner may
at its sole option and expense, but not more than once each Calendar Year, inspect the accounts,
review the internal controls and audit the contracts and records of Operator.


                                          SECTION 12

                    TECHNICAL INFORMATION, INVENTIONS AND PATENTS,

                                     AND CONFIDENTIALITY

        12.1 Technical Information. The Operator shall furnish or make available to each
Owner all technical information received by it or resulting from or utilized in the operation or
maintenance of the System and agrees to assert no ownership interest in any of the said technical
information against any of the Owners. In obtaining technical information from any Owner or its
Associated Companies or other third party. Operator will use its best endeavors to obtain from
each all such rights to disclose and use tins technical information. The Operator shall not assume
an obligation to keep information of an Owner or an Associated Company of an Owner or other
third party confidential without the prior express approval of Owners; provided, however, that
Operator may assume such an obligation in an emergency if the duration of the obligation does not
exceed three (3) years, and in such event Operator shall promptly notify each Owner of the
obligation.

       12.2     Inventions and Patents. Operator shall use its best endeavors to include as a term
of any research or development contract carried out for the Owners by third parties (other than
Owners or their Associated Companies) that any patents or patent applications resulting from any
such research or development shall be the property of the Owners. Operator shall enter into
suitable agreements with each of its employees and each employee of an Owner assigned to assist
the Operator (other than such Owner employees assigned to assist the Operator for a period less
than six (6) months) that inventions, patents, patent applications and other improvements which
relate to or are useful in the operation of the System made by such employees will be assigned to
and shall become the property of the Owners.




                                                33
                                                                                            561
        12.3 Confidentiality. Operator shall maintain and keep confidential all technical
information referred to in Section 12.1 above and shall not disclose any of said technical
information without the written consent of Owners except as provided in Section 12.1 hereof.
Operator shall also maintain and keep confidential all inventions referred to in Section 12.2 and
shall not disclose any of said inventions to parties other than Owners except to the extent necessary
for the filing of patent applications covering said inventions or filing of applications for
government permits. The aforesaid obligations of confidence and limitations on disclosure shall
no longer apply to any technical information or invention after said technical information or
inventions is in the public domain.

       12.4   Rights of Owners. The rights of Owners with respect to any technical information,
inventions and patents shall be in accordance with Article XII of the TAPS Agreement.


                                          SECTION 13

                                           ASSIGNMENT

        13.1 Successors and Assigns. Owners agree with each other that so long as this
Operating Agreement remains in force and effect, all sales or other transfers or assignments of
interests in the System must be made pursuant to the provisions of the TAPS Agreement and shall
be made subject to this Operating Agreement. All obligation and liabilities of the selling Owner
shall be assumed by the purchaser in the same manner as obligations and liabilities under the
TAPS Agreement. Such purchaser shall be required to execute a ratification of this Operating
Agreement and shall thereafter be one of the Owners hereunder for all purposes contemplated by
this Operating Agreement. The rights, duties and responsibilities of Operator under this Operating
Agreement shall not be assignable without the consent of all Owners except as herein expressly
authorized.


                                          SECTION 14

                                     MINERAL DISCOVERIES

       14.1 Mineral Discoveries. Operator shall maintain and keep confidential any
information relating to the existence or discovery of mineral or other natural resource information
obtained by Operator, its employees, agents, contractors, and subcontractors in connection with
the performance of its services under this Operating Agreement. Upon request of any Owner.
Operator shall promptly make available to or furnish to all Owners any such information.
Operator shall by the establishment of appropriate policies and procedures, insure that all
employees, agents, contractors, and subcontractors are contractually obligated to protect the rights
of the Owners in all such mineral and other natural resources discoveries in connection with the
operation or maintenance of the System.




                                                 34
                                                                                             562
                                        SECTION 15

                                    GENERAL PROVISIONS

        15.1 Notices. Except as otherwise provided in this Operating Agreement, all notices
provided for in this Agreement to be given in writing may be given by registered mail or by
telegram, cable, telecopy or other appropriate means of electronic communication confirmed by
registered mail addressed to Owners, as may be required for the particular notice, at their
addresses stated below or at such other address the Owners may provide by written notice to all
other Owners and Operator.

              AMERADA HESS                 Amerada Hess Pipeline Corporation
                                           1185 Avenue of the Americas
                                           New York, New York 10036

              ARCO                         ARCO Transportation Alaska, Inc.
                                           P.O. Box 100-360
                                           Anchorage, Alaska 99510

              BP                           BP Pipelines (Alaska) Inc.
                                           900 E. Benson Blvd.
                                           Anchorage, Alaska 99508

              EXXON                        Exxon Pipeline Company
                                           (800 Bell Street
                                           Houston, Texas 77002)
                                           P.O. Box 2220
                                           Houston, Texas 77252-2220

              MOBIL                        Mobil Alaska Pipeline Company
                                           P. O. Box 900
                                           Dallas, Texas 75221

              PHILLIPS                     Phillips Alaska Pipeline Corporation
                                           (6330 W. Loop South
                                           Belaire, Texas 77401)
                                           P. O. Box 1967
                                           Houston, Texas 77251-1967




                                              35
                                                                                        563
               UNOCAL                         Unocal Pipeline Company
                                              1201 West 5th Street
                                              Los Angeles. California 90017

Receipt by the sender of proof of delivery of notices hereunder shall be considered proper notice
to the addressee of the contents of such letter, telegram, cable, telecopy or other appropriate means
of electronic communication.

       15.2    Laws and Regulations and Agreements.

       (a)      This Operating Agreement is subject to all present and future valid orders, rules.
and regulations of any regulatory body having jurisdiction and to all applicable laws of and
agreements with the United States and the State of Alaska including but not limited to any orders.
rules, regulations, laws or agreements specifically referred to herein.

        (b)     Operator shall comply, and secure compliance by its contractors and subcontractors,
with all applicable orders, rules, and regulations of any regulatory body having jurisdiction and
all applicable laws of and agreements with the United States and the State of Alaska including but
not limited to requirements of the Rights-of-Way Agreements.

       15.3    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
Operating Agreement and the rights and obligations of each Owner and Operator as between them
shall be governed by and construed in accordance with the laws of the State of Texas.

        15.4 Entirety of Agreement. This Operating Agreement and the TAPS Agreement
constitute the entire agreement between Owners as to the design, construction, ownership.
expansion, operation and maintenance of the System, and no variation, modification, amendment
or change shall be binding upon any of them unless effectuated by an instrument in writing
properly executed by the Owners. If there are any conflicts between the provisions of this
Operating Agreement and the TAPS Agreement, the provisions of this Operating Agreement shall
be controlling, except on matters relating to the design, construction and expansion of the System.
The TAPS Agreement shall govern all matters relating to the design, construction and expansion
of the System. Effective upon its signing of this Operating Agreement, each Owner hereby agrees
that the provisions hereof tully satisfy all obligations of an Owner to enter into an Operating
Agreement pursuant to Section 5.2 of the TAPS Agreement and fully satisfy the rights and
obligations of each Owner under the Third Supplemental Agreement to the TAPS Agreement.
Upon the signing of this Operating Agreement the Third Supplemental Agreement to the TAPS
Agreement will be and is hereby cancelled.

       15.5 Captions or Headings. The headings appearing at the beginning of each section
hereof and the Table of Contents appearing at the beginning of this Operating Agreement are both
included solely for the convenience and none of them shall be considered or given any effect in



                                                 36
                                                                                             564
construing this Operating Agreement or any provision or provisions hereof, whether for the
purpose of determining the duties, obligations or liabilities of the Operator or Owners, or their
intent as to any issue, matter, or questions which may arise.

       15.6 Counterparts. This Operating Agreement amending and supplementing the TAPS
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.

       15.7 Termination of Interim Operating Authority. Upon the appointment of an
Operator under this Operating Agreement and the acceptance of such appointment by that
Operator, the interim authority given Alyeska Pipeline Service Company to perform services in
preparation for the efficient start-up and operation of TAPS by Letter Agreement which was
accepted by Alyeska Pipeline Service Company on May 11, 1976 shall terminate. All actions
taken by Alyeska Pipeline Service Company with the approval of the Construction Committee
pursuant to the above described Letter Agreement are hereby ratified and confirmed by each
Owner and shall be binding on each Owner until revised or cancelled by the Owners through the
Owners Committee.

        IN TESTIMONY WHEREOF, this Operating Agreement is executed by each of the Owners on
the date below such Owner's name but effective as of the Date of this Agreement.

                                            AMERADA HESS PIPELINE CORPORATION

                                            By.

                                            Date.

                                            ARCO TRANSPORTATION ALASKA, INC.

                                            By.

                                            Date.

                                            BP PIPELINES (ALASKA) INC.

                                            By.

                                            Date.




                                              37
                                                                                          565
EXXON PIPELINE COMPANY

By.

Date.

MOBIL ALASKA PIPELINE COMPANY

By.

Date.

PHILLIPS ALASKA PIPELINE CORPORATION

By.

Date.

UNOCAL PIPELINE COMPANY

By.

Date.




  38
                                       566
                                                                                      EXHIBIT A

                          OPERATOR S INSURANCE PROGRAM

        1.      Workers’ Compensation Insurance and Employer’s Liability Insurance          —This
insurance is to include coverage for United States Longshore and Harbor Workers' Compensation
Act. Outer Continental Shelf Lands Act and amendment to Coverage "B" Endorsement
Maritime Operations to cover Admiralty Benefits and Damages under the Jones Act. Operator        —
shall comply with the workers’ compensation laws of all applicable state and federal jurisdictions
by either qualifying as a self insurer in accordance with the regulations established by such
jurisdictions, or by purchasing a policy of workers’ compensation insurance in those jurisdictions
where qualification as a self insurer cannot be reasonably obtained, In the event such insurance
is purchased, it shall be underwritten with a rating and premium plan designed to develop, to the
maximum extent feasible, an annual cost based upon annual incurred losses, unless the number
of employees involved is too small to make this feasible, in which case a regular policy of
insurance may be purchased .

       2.     Commercial general liability insurance including blanket contractual liability
coverage with a combined single limit of $1,000,000 for injuries to persons or damage to property
each occurrence and in the aggregate annually. Operator may quality as a self insurer or insurance
coverage shall be purchased under a rating and premium plan designed to develop, to lire
maximum extent feasible, an annual cost directly related to annual incurred losses.

       3.       Business auto liability insurance, covering all owned, non-owned or hired vehicles
with a combined single limit of $1,000,000 per occurrence for bodily injury and property damage
liability. Operator may qualify as a self insurer or insurance coverage shall be purchased under
a rating a premium plan designed to develop, to the maximum extent feasible, an annual cost
directly related to annual incurred losses.

       4.      Full form protection and indemnity insurance on all owned and time chartered
vessels, if required, with a policy limit equal to the value of the vessel’s hulls or $5,000,000.
whichever is greater, and charterer’s liability insurance on all vessels with a limit of $5,000,000.
The protection and indemnity policy may exclude liability coverage for injuries to or death of
members of the crew of insured vessels and coverage for transportation, wages, maintenance and
cure, provided that such coverages are included in the liability coverage endorsements to any
workers' compensation insurance purchased pursuant to paragraph 1 of this Exhibit A.

       5.     Aircraft liability insurance covering liability arising out of the operation,
maintenance or use of owned, non-owned or chartered aircraft, including liability to passengers.
with a combined single limit of $5,000,000 for injuries to persons or damage to property each
occurrence.
       6.       Boiler insurance (limited form) covering all pressure vessels requiring inspection
under state or federal laws. Operator shall have the discretion of determining the limit of coverage
and the deductible per accident taking into consideration the primary purpose for this insurance
is to obtain the inspection and certification services offered by an insurer.

                                                                                            567
       7.     No insurance shall be carried by Operator covering the risks of loss to the System
property in which the Owners have an undivided interest or for business interruption resulting
from damage to the System.

       8.      Any Owner insuring its respective interest in the System property against risk of
loss or insuring its liability exposure to third parties arising out of the operation of the System,
whether such liability is direct or by virtue of its obligation to indemnify Operator hereunder,
hereby waives all rights of subrogation on behalf of its insurers against Operator and the other
Owners and in the absence of a right to waive subrogation shall have such policies of insurance
endorsed providing for such waiver.




                                                                                            568
                                                                                    EXHIBIT B

                               CONTRACTOR'S INSURANCE

       1.     Workers' Compensation Insurance and Employer's Liability Insurance in
accordance with the laws of the state where work is performed with limits for Employer's Liability
in the minimum amount of $100,000. This insurance is to include coverage for United States
Longshore and Harbor Workers' Compensation Act, Outer Continental Shelf Lands Act and
amendment to Coverage "B" Endorsement
and Damages under the Jones Act.
                                            —  Maritime Operations to cover Admiralty Benefits


       2.    Commercial General Liability Insurance, including Contractual Liability, with
minimum coverage of a combined single limit of $1,000,000 per occurrence for bodily injury and
property damage liability, with a $2,000,000 annual aggregate.

       3.      Business Auto Liability Insurance covering all owned, non-owned and hired
automobiles, specifically endorsed to cover as "owned automobiles” Alyeska-owned or leased
vehicles furnished for Contractor's use, with minimum coverage of a combined single limit of
$1,000,000 per occurrence for bodily injury and property damage liability.

      4.     If aircraft is owned or chartered by Contractor, Aircraft Liability including
Passenger Legal Liability Insurance in the combined minimum single limit of $5,000,000,

       5.     If marine vessels are employed in the operation and maintenance, Contractor shall
carry or require the Owners of vessels utilized on the job to carry Protection and Indemnity
Insurance with minimum limits of $5,000,000. (Charterer's and/or Owner’s limitation clause to
be deleted.)




                                                                                         569
                                                            EXHIBIT C

                          TAPS CAPACITY TABLE


                                          TAPS Capacity
                 Period                   Barrels per Day

       November 1, 1996 through             1,420,000
       December 31, 1996

      January 1, 1997 through               1,400,000
      December 31, 1997

      January 1, 1998 through               1,380,000
      December 31, 2002

      January 1, 2003 through               1,240,000
      December 31, 2003

      January 1, 2004 and thereafter        1,100,000


Note: Alll Volumes are in Barrels.




                                                               570
                                                                                EXHIBIT D



         The Capacity Cushion shall be allocated among the Owners as follows:

                   Amerada Hess Pipeline Corporation            0.035625
                   ARCO Transportation Alaska, Inc.             0.124590
                   BP Pipelines (Alaska) Inc.                   0.340022
                   Exxon Pipeline Company                       0.360675
                   Mobil Alaska Pipeline Company                0.073256
                   Phillips Alaska Pipeline Corporation         0.033625
                   Unocal Pipeline Company                      0.032207



F:\DL0976\TAP498\5500tt\OPAG-RSl WPD




                                                                                   571
       APP. F
Federal Right-of-Way
    (CR166-305)
                 Renewal
                   of the
  Agreement and Grant of Right-of-Way
                 for the
Trans-Alaska Pipeline and Related Facilities
                  between
       The United States of America
                    and
   Amerada Hess Pipeline Corporation,
        BP Pipelines (Alaska) Inc.,
      ExxonMobil Pipeline Company,
   Phillips Transportation Alaska, Inc.,
       Unocal Pipeline Company, and
 Williams Alaska Pipeline Company, L.L.C.




                  2003



                                               166
                                RENEWAL
                                  of the
                  AGREEMENT AND GRANT OF RIGHT OF WA Y
                                 for the
                      TRANS-ALASKA PIPELINE SYSTEM
                         AND RELATED FACILITIES
    This Renewal of the Federal Grant and Related Facilities ("Renewal") is made and entered
into this 8ÿ day of January, 2003 by and between the United States of America ("United
States"), acting through the Secretary of Interior, and Amerada Hess Pipeline Corporation. BP
Pipelines (Alaska) Inc., ExxonMobil Pipeline Company, Phillips Transportation Alaska, Inc.,
Unocal Pipeline Company, and Williams Alaska Pipeline Company, L.L.C. (collectively
"Companies" or "Permittees") whose mailing address is Alyeska Pipeline Service Company,
1835 South Bragaw, MS 569, Anchorage, Alaska 99512. The United States and the Companies
are sometimes referred to individually as a "party" and collectively as the "parties."

    WHEREAS, the Companies, current holders of the rights of way for the Trans-Alaska
Pipeline and its related facilities, as set forth below, have requested renewal of the January 23,
1974 Grant of Right-of-Way for the Trans-Alaska Pipeline, as amended ("Federal Grant"), the
serial numbers, legal descriptions, and other pertinent data for which is set forth in Exhibit A
Part-I hereto, and renewal of the grants for related facilities and other associated rights ("Related
Facilities"), the serial numbers, legal descriptions, and other pertinent data for which is set forth
in Exhibit A Part-13 hereto;

   WHEREAS the Secretary of the Interior has authority under the Trans-Alaska Pipeline
Authorization Act of 1973, 43 U.S.C. § 1652, and section 28 of the Mineral Leasing Act, as
amended. 30 U.S.C. § 185, to act upon the applications for renewal;
   WHEREAS the Secretary has determined that the requirements for renewal of the Grant and
Related Facilities have been met; and

    WHEREAS the parries recognize and acknowledge that the State of Alaska has renewed all
rights and interests held by the Companies in the Right-of-Way Lease. ADL 63574, and
associated rights for the Trans-Alaska Pipeline;

       NOW. therefore, the parties agree that;
           A. The Federal Grant and Related Facilities are renewed for the maximum term
           authorized by law, thirty (30) years.

           B. It is the intent of the parties that all rights and interests administered by the
           Department of the Interior held by the Companies are included within this Renewal.
           The parties shall take such reasonable actions, and execute and deliver any further
           instruments, agreements, documents, or other papers, as are reasonably requested by
           either party to affect this intent.

           C. This Renewal of the Federal Grant and Related Facilities is granted unto the
           Companies in their undivided interests, as follows:
                                                  2                                           167
   Amerada Hess Pipeline Corporation, an undivided interest of 1.5000% of the whole;
       BP Pipelines (Alaska) Inc., an undivided interest of 46.9263% of the whole;
     ExxonMobil Pipeline Company, an undivided interest of 20.3378% of the whole;
  Phillips Transportation Alaska, Inc., an undivided interest of 26.7953% of the whole;
      Unocal Pipeline Company, an undivided interest of 1.3561% of the whole; and
Williams Alaska Pipeline Company, L.L.C. an undivided interest of 3.0845% of the whole.

       D. Section 7(A) of the existing Federal Grant is amended to read as follows:

            The grant of the Right-of-Way as originally issued began on the 23r& day of
            January, 1974 and as renewed continuesfrom the 22/u* day of January, 2004,
            at noon, Washington, D.C. time, and shall come to an end and expire on the
            22nd day of January, 2034, at noon, Washington, D.C. time, unless prior
            thereto it is relinquished, abandoned, or otherwise terminated pursuant to the
            provisions of this Agreement or any applicable Federal law or regulation.

       E. The Exhibits that are attached to this Agreement and that are listed below in this
       subsection are, by this reference, incorporated into and made a part of this agreement
       as fully and effectually as if the Exhibits were set forth herein in their entirety:
                      Exhibit A: The Federal Grant dated January 23, 1974 (including its
                      existing Exhibits C, D, and E which remain unchanged by this
                      Renewal.)
                      Exhibit A-Part I: The Legal Descriptions for the Federal Grant of
                      Right-of-Way F-12505 and AA-5847 (which, with Part II below,
                      replace in its entirety the original Exhibit A to the Federal Grant);
                      Exhibit A-Part II: The current Legal Descriptions for the grunts for
                      Related Facilities (which, with Part I above, replace in its entirety the
                      original Exhibit A to the Federal Grant); and
              (4)     Exhibit B: Requirements of the Department of Defense Relating to
                      Military Installations, as amended, with attached letters from the
                      Director of Real Estate. Department of the Army, Office of the Chief
                      of Engineers, dated November 14, 1973, November 23, 1973, and the
                      Memorandum of Understanding between Alyeska Pipeline Service
                      Company and U.S. Army Corps of Engineers. (This Exhibit B
                      replaces, in its entirety, the original Exhibit B to the Federal Grant).
              (5)     Exhibit C: Section 15 (Guaranty) as amended by January 2003 Record
                      of Decision, Renewal of the Federal Right-of-Way for the
                      Trans-Alaska Pipeline and Related Facilities.
           F. Except as expressly amended in Subsection D and E above, all other current
           terms, covenants, and conditions of the existing Federal Grant, shall remain in
           full force and effect As an additional requirement, to be incorporated in the
           Renewal as section 15.F, every three years the Authorized Officer shall conduct
           an audit of the financial resources of the Owner Entities, or other guarantors, that
           provide the Section 15 guaranties. If the Secretary determines by the audit that
           the Section 15 guaranties are inadequate, the Secretary may require additional
           financial assurances and guarantees.


                                            3
                                                                                        168
                           __                            ;                              .
                                                                                                 ‘
                                                                                                                    :


               o    This Renewal may be signed TO counterpart. All such executed counterparts shall be
                    considered aa original and the original signature pages may be attached to a single
                    coumerpan   for purposes of recordation
                        i
                              - -
                          P *T- %           >_   .
                                                 •   i   *  •"                  **><


                      , .5 ,/\ *
    IN WITNESS WHEREOF, the parties have executed this Renewal and have agreed to its terms
    and conditions as of the date first above written.




.53EPK __
    UNITED STATES OF AMERICA



    Nam/
      -- -                           ;ÿ   r. .
                                                                 err
               <m

                                    «ÿ
                                *
    AMERADA HESS KTOLEVE CORPORATION                                                          Subscribed before m*
                                                                                              on this Sth day of
                                                                                              January, 2003.
                                                                                i
    Title: president, PhlUloa                                        Transport »tior>
                                                                                                                ?
             Mwiu.,, Inc.                            (see Note             below!
      V                                      .               .   .                            Notary PnNk District of Columbia
    BP PIPELINES (MÿSJÿINC                                                                  My Commission Expires April 30.2005
“V* *
    By
                                                                         _                   »
                                                                                                 "**r*ÿ* -IN?      ' jf'**/ Jk




I
          at
               mm
               ->    ~rn
    EXXONM(                                          E COMPANY

    Bv:             fy-Lyr/K#*?
    Title:          P-geSI<V.trtJ7~-


    PHILLIPS TRANSPORTATION ALASKA. INC




SSP*»                                       >£~—                       -rrÿr.
                                                                                                                    169
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STATE OF

                                              ]                                                         \
       THIS IS TO CERTIFY that on this                  day of Q                   2003, before
me appears /rÿ6oÿg7~ A                              the          *£3><
of Philips Trarssÿ»jtÿj"on Alaska, laf«rC successor to the TAPS ownership interest of Amerada
Hes* Pipeline Corporation who executed the foregoing Renewal and acknowledged voluntarily
signing the same on behalf of said corporation.

                                                   H-ataryPiÿhS
                                                   My Commission Expires:                   j
                                                                               STATE OF ALASKA
                                                                                 NOTARY PUBLIC
                                                                                      Carol Kelly
                                                                                                            c
STATE OF                            1                                          My Commftsipn iupkei August; TS 2SQ*
                                    ) ss.


       THIS IS TO CERTIFY' that on this
me appeared Alb.fYf
                                            _      S~iKRtvÿ>ÿ*
                                         ,, the TW*»« dfcrvf
                                                              day of   2003. before
of BP Pipelines (Alaska) Inc. who executed the foregoing Renewal and acknowledged
voluntarily signing the s»T|£j*y?ctuilf of said corporation,

                                                  'iltmifc         i\ £x&cds>t£v
                                                   Notary Public in and for the State of
                       f§   5(   NOTARY j P       My Commission Expires;
                       1*\ PUBLIC/                                                   % CommC9lcn &&m
                                                                                       t'fÿverrOarS. 200«

                                 IfovlC#
STATE OF      r   ,_
                       n
                            _

(jlkAij. it
       THIS
me appeared
of ExxonMobil
              %£TÿMc
               Pipeline
                        this ML
                                                     ,,tbc                           ---
                           Company who executed the foregoing Renews] and acknowledged
voluntarily signing the same on behalf of said cerporajipn,
                                                                                            >   2003, before




                                              ’ -Tvotejy
                                                                            -gabd.
                                                           Public in and for me -State of
             iAVERMEMiPORD                        My Commission Expires:
        hi    ***Afi***«*w*»
                                                     6                                               171
STATE OF




me     .
            THIS IS TO CERTIFY that on this
            .reared 7ffr8E&#er.jQ*
                                                v5
                                                        she
                                                           _   davo
                                                                 VrajÿÿvW
of Phillips Tr&nÿpomtioo Alaska, IrkC who executed the foregoing Renewal and acknowledged
                                                                                             _
                                                                                            . 2003, before

voluntarily siting the same on behalf of said corporation,


                                                    NotaryXuJjlicin and for the S;iftc)of
                                                    My Commisaon
                                                                                 NOTARY PUBLIC                 .
                                                                                      Carol Kftlly
STATE OF             /fjf& >'                                                  My CarertiKico tipams *DQIM 1 6 20Cj*




me appeared
            THIS IS TO.CERTIFtthal on this
                                               _
                      'ÿ.&AW....J&....U.££*#J!&..
                                               •the
                                                      /J*      day                          ,   _ --
                                                                                                2003, before
                                                                                                   11-
of Unocal Pipeline     Company    who   executed
voluntarily signing the same on behalf cf said
                                                 the foregoing Renewal and acknowledged

                                                        ,-i
                                                    S&asy jrwbli? in a?«I for the Sude'of   '"7v
                                                                                                    __
                                                                                                   * *-•$•
                                                    My Commission Expires: /* Y"#*f
                                                                               LAMA* MfNOXXSA
                                                                                 Notcry jMOfc

STATE OF Htf.it UA*UA,              >                                 9c         SSote at r<s*sa
                                                                             y*t Cownteton fxpraa
                                                                                OctOtWr&ZD*

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       THIS IS TO CERTIFY that on this               tog
                                                     dav of                   2003, before
me appeared fÿ*cl*n.U Mean’s.. ...             the    Jÿki
of William* Alaska Pipeline Company, L.LC. who executed the foregoing Renewal and
acknowledged voluntarily signing the same on behalf of said corporation,
                                                                          I3u.Ajj!*4rMji...-
                                                                                            ----
       A19S
         TkjL5A<stjKJ  CswMfc £«& 03484068
                                                    Notary Public in and for the State of fPk;;WÿAvv>w
                                                    My Commission Expires: £ 3 ~ ':G**te4S
                                                                         A#$.     01 vC        ?
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                                                                                            Grant.




                                                                                                                     173
       Agreement and Grant of
                   •St             5

Right-Of-Way fo, Trana-Alaak,
                                                   between
                                                                                                                                                            1
                                             United States, of America
                                           ;-The
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                         •>.                                  y             l                               ,   .     ,           ,s,.                 II
               Amerada Hess Corporation, •t
             #•
                ARCO Pipe Line Company,
            fr! Exxon
      :   4           Pipeline Company,
          tv.
           Mobil Alaska Pipeline Company,
                                                                                                       company
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                     jr    iumj[/s ?i cuuidim

                                                                                                            and                                         :

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                                                                                                                                                                174
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Agreement and Grant of Right-of-Way for Trans-Alaska
                      Pipeline
  Thia Agreement and Grant of Right-of-Way                           shall employ all practicable meaox and
( hereinafter referred to us the ‘'Agreement”}* is                   measures to preserve and protect thn en¬
entered into as of this *23rd day of Jaftunty, I #74                 vironment, ua provided in this Agree.
(hereinafter referred to ax the '‘Effective Date11),                 rnent.
by the United States of America, party of the first              (2) Tins partic* ahall balance anviroomeatal
pert (hereinafter referred to ns the “tmiiad                         amenities and valuw with wxmoroic proe-
Staten”), acting through the Secretary of the In¬                    ticalitiword technical capabilities, do ax
terior, andby                                                        to be  0,13latent with applicnble national

     Araareda Hess Corporation, a Delaware                           policies. In «o doing. the partial tim.ll
         Corporation,                                                take into account, among other considera¬
       ARCG Pipe Line Company, « Delaware                            tions. the following:
         Corporation,                                                   (a) The benefit or detriment to par¬
       Exxon Pipeline Company, a Delaware                                    son*, property and the environ¬
        Corporation,                                                        ment that nay be anticipated to
       Mobil .Alaska Pipeline Company, a Delaware                           result from a proposed course of
         Corporation.                                                         conduct;
       Phillips Petroleum Company, a Delaware                          (b) The particular environmental,
         Corporation,                                                     technical, and economical benefits
       Soldo Pipe tone Company, a Delaware                                or detriments nwwonably expected
         Corporation, and                                                 to float from a proposed counw of
       Union Alaska Pipeline Company, a California                            conduct;
       Corporation,                                                    (c) The effect on the enargy ureds of
parties of the second port (hereinafter sometimes                          the United States, including the
referred to as the “Original Pornuttecs”).                                 possible effect* of » disruption of
   Tbe parties hare entered into this Agreement                            national or regional oil supply,
taking into consideration the national authoriza¬                          that may result from a particular
tion*. directive#, and policies expressed in ap¬                            COURW of conduct
plicable legislation, including Section 202 of the               <•1) Permittees, shall manage, supervtae and
Trans- Alaska Pipeline Authorization Act, 87 Scat.                    implement the construction, operation.
S84,ef*«f. (1878).                                                    maimftnaooe and termination of the Pipe¬
     It iB the intent of the parties that, in the per¬               line System in accordance with sound
formance of this Agreement, the following prill’                     engineering practice, to the extent
ciplee shall apply :                                                 allowed by the State of the art and the de¬
     (l) In the- contraction ( Including, but not                    velopment of technology. In the sxamie
         limited to. design), operation, mainte¬                     ni then* functions, Permittees consent and
          nance (including but ac* limited to a con¬                 ahaii submit to such review, inspection
          tinuing and reasonable program A                           end compliance procedures relating to
          preventive maintenance) and termina¬                       construction, operation, maintenance and
             tion   of tb# Pipeline System. Permittee*               termination of the Pipeline System a*
     •Mrta— r*r*» fcam* tetwai mU>( «r* deftMt r* <ta tact
             •
                                                                     are provided for in thia .Agreement and
at    »U* A CIWSOAI w » &XMK O mnot. »«efc uroe ita
jaeltanttd   !>«*!*                                                  other applicable authorization* THe

                                                             i                                     176
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                                                                   178
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                               (
   B- The cooporittire agreement attached Hereto            ri<l*«l in suoscctiou E hereof. Pomuttees may Alt
OM Exhibit K U n*H Incorporated into, and in not            an Uf>plbiri<Ki for inodifiraUoii ui the Jlight-of-
intended to be mode » part of, this Agreement.               Way bound* rim provided that, after modification,
Sabi cooperative agreement in attached hereto               the Right-of-Way will include the ground occo-
cnly for in format ioonl purfosoa                           pi«t      the Pipeline plus fifty (50) feet, adjacent
                                                            thereto and such additions] land as authorized by
             5. Width of Right-of-Way                       :he Authorized Officer pursuant to Section 3

   &**
surface
       •>'
    MumMI* *the»IbpcllUc:
                 fifty                          ***
                                 (SO) (e« plus the          a«u.u.-u<, 9*4 .sup. regret by lubsrctuu E
                                                                                                              S
1-ro.ihil tveupjed by                   fWiW.    imr        hereof, >h» Kight-ef. Wey sbsll be u rtslir.sted on
S,.,r.   Ibtt up <« M nKbblmg <he <t«co.l
                                   i      Ubrel,

                                                              f* W»b» .brcc buudeed sud hsty              <f.y,
°*Jÿ6   hJÿto
e-ith suhwetien T> of/cno
                  Ti            .   •   e_,f   p    .       efter Ihc (far, ot Cufumiaicbinff of the Pipeline
                                                            (end, in U»        of eny eriditi™. delsr.on Vr el-
nroy eppi, for, o«l     lb,   AMhoc>«d  OSÿr »,y £££                 of ,Ke Pipeline Wtsu,up the d«e of
JS*   *                          m *ÿ                       Cemmieeiouieg.    -iSu   ou. hundred end eighty
teconfa
             •' Tÿ1L'
  *r.':the ruetwne                      o,ÿ2
                                    ,n in
                   far bnifiuding, .bet   hw judg-
                                                            (Wl dey,     XjaSgmM
                                                                              the  eddition, deletion or
                                                                                                 A(lh„ÿ
                                                                                                          elS.
                                                                                                              m.
meet i »i sr |S« e. e.
                                               *7           cer.tmn fully completed). Permute shall surrsy
eenttou ami mem!*uv« of tl*             %&»
                                       b«ter                „d provl(t
                                                                                ,   monum«,ta,:oo   to locate end
eowntewe,, or to protect the enT.ronrn.nt or
pitDUfl ax y.
                                                                      J    Ry,             tBd         51„:
                                                            proof of eonstrociioft of the Pipeline in accord¬
            5. Location of RIght-of-Way                     ant* Truth the applicable regidotionB of the De¬
                                                            partment; (2) such documents of relinquishment
  A. The site for each Construction Segment of              of land not included in the modified Right-of-Way,
the Pipeline shsll be determined in awordaB<*i              if any. as may be required by the Authorized Of-
with i he provisions of Stipulation 1.7.                    nrert fi) appropriate reference to applicaiitior
  U After completion of constriction of the                 ip which requests were made for Right-of-Way
Pipeline within a particular Mapping Segment.               widths greater than the normal limitations sped-
th» Vinkunl I-iiuls MiJijeet w the UIjrlit-of-Wuy           feed in Sort inn 3 of this Agreement, mid appft.
shalt Wn the land •occupied hy the Pipeline and. ir.        rations for modification of the Right-Of-Way
terms of surface (rwa«inu*ent. twotv-fiim (25)              boundaries *« preuddH m suiwrtion D hereof;
feet on each aide of the Pipeline moasitrod from            nnd (41 * map. *«r maps of wryey, prepared ti»
Its oMrenunot eetrrtnitiejL With rwqwct to Related          such manner a» VhalJ be required \ry the Aathor-
Facilitiea, »h« xvUBh shall he twenty-fira (25) fart        tied Officer, showing the final ‘‘a* built” location
iiroiuul the mrimeter of the Related Facility.              of tha completed Pipeline, including the final lo-
  r.   Upon completion of ronatroettonof the Pipe-          cations of all buried and above ground ixnprore-
line within a Mapping figment. M well a*                    menta, the centerline of the Riÿ»t.ofeWay. os
tlso liBuanrr of any authorization or directive that        definitely tocated. and, referenced to the rentcrSino,
the Autlwriwi (jffioer «iay twuo in tteordaure              tho boundaries of the Right of-Way, *A dtfttutely
with thfl provisions ot Section S hereof, Parmittew         located. Each portion of the Pipeline as depicted
ihall. if directed by tha Authorised Officer, phys-         on the said surrey map or maps, and for which a
ically mark ou the ground tlte proimsed bnuiwl-              Notice to Proceed, Or an authorization, i»utd in
orireof cite Rigltt of- Way uteuf It locations and ih       accordance with Stipulation 1.7.4.4 altering
such manner as is tcotp&abla to th« Authorized              either the route or the initially approved location
( >fRcor.                                                   along tho route of the Kight-of-Way, hae been is*
  D. Ac any time prior to the sixtieth (SOth) day            uned. sliall be refere«c«d to the relevant Notice to
procwUnjx rite filing of tlte map* of survey os pro-         Prooeod or authorization.
                                                        s
                                                                                                        179
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180
      llfll!!I||ll!i!| If III#
      iMfite I m tm i mm st   ii
         barm or damage to the environment (ift-                 the Pipeline, for inspection or monitoring pur*
         eluding bat not limited to areas of vepet*-             poses and for any other purpose or mason that »
         tiwi or Umber, fish or other wildlife popu*             reasonably consistent with any right or obligation
         lotions, or their habitats, or any other                of the United States under any law or regulation.
          natural resource).                                     this Agreement, or any other agreement, permit or
     (2) Provide adequate and appropriate means                  authorization relating in whole or in part to ail
         and proced urts for the repair and replace-             or any part of tha Pipeline.
         truant of improved or tangible property                   B. Tÿie right* of SOCMS and entry reserved in
         and the rehabilitation of natural rcoourot%            subsection A of this Section shall extend to and be
          (including but not limited to revegeta-               enjoyed by any contractor of the United States,
         tion, restocking fish or other wildlife j»op-          any subcontractors (at any tier) of the contractor
         utauoiu and nestebHahiftgtheir habitats}               and their reapeetire agent* and employees, as wall
         that shall bo seriously damaged or dr*                 as such other person*. as may bo designated from
        strayed if the immediate cause of the                   Ume-Uvtim* in writing by th* Authorised Officer.
        damagv or destruction sriaea in connect                    C There is reserved to the United States the
        tion with, or results from, the construe-               right to grant additional permits or 'M*jcnnnt*i for
        tion, operation, maintenance or wmuna-                  rightaÿ»f-«»y to third parties for compatible uaw
         tion at all or any part of the Pipeline                on, or adjnooflt to, the. lands subject to the Right'
         System.                                                of-Way. Before tbo United States grants an *d-
     (3) Provide for component and systems qual-                dhaonal right -of -way or permit for a compatible
         ity througli ndeqnats quality control man-             two, the United State* wiil notify Permittees
         ngeroeftt    and planning, and inspection              of its intention* and shall consult with Permittees
        and t«c procedures*.                                    before taking final action in that regard,
    (ÿ) Anmce that the arieetiatt of Permittees’
        cont roc tors, subcontractors and contract              12. Reimbursement of Department Expenses
        purchases of materials and *nric« art                      X               ahatl reunlmr* the United States
         baaed open tha above quality control                   f<*. 4JJ   munnable odmiftistrativo and other coats
         tf00* •rW’              .     •   .                    heretofore or hereafter incurred directly or in*
    W                                                           *"*& bv th, D,p«n*« for-. (!) prÿr*
        SrSlbTSSlltÿf of                                                     «w by Permittees in connection with
                                                                the Pipeline System ; and (2) monitoring the con¬
        tractors and subcontractor#.                            struction, operation, maintenance, and termination
    (€) Maintain quality determination record*                  of all or any part of the Pipeline System, includ¬
        on all of the above procedures to insure                ing without limitation those portion* of the Sys¬
        satisfactory      data       identification   and       tem that shall be located on State-owned lands.
         retrieval.                                                B. Subject to collection, receipt l* hereby ac¬
  10. Compliance With Notices To Proceed
                                                                knowledged by the Department of the mm of
                                                                Twelve Million Two Hundred Fifty Three
  All construction of. tha Pipeline System un-                  Thousand Seven Hundred Thirty and {XViOO
dertaken by Permittees shall comply in all respects             Pollare (flÿ-VTSO) which has been paid to the
with the provision* of .Vottres to Proceed that are             United ,St*u* by pertnlrtwu at the tiro* of axecu-
iwurd by the Authorized Officer.                                tion of thia Agreement. .Said sum represents the
                                                                amount of Uie costa referred to in syfeowxtcn A of
   lL Reservation of Certain Rights to the                      thia Section, which were incurred by the Depart¬
                United State*                                   ment through September .10. 197*,
  A. The United Sucre reserve* and shall have a                    C. Permittees shall hereafter pay to the United
continuing and rvammablo right of arc**# to any                 State* inch sums a* the Secretary ihull determine
part of the land* (Including tlm subsurface of,                 to be required to reimburse the Department forth*
and the air spore nbnve, such lands} that are sub*              rosta, referred to In subsection A of this Section, in*
jret to : lio Rÿ'.t nf.Wnv. vnd x contir.umg and                 ettrred or to be incurred bv it subsequent to S*p-
tvasreinlAw right of pin Vu-al entry to any pare of              tember SO, 197,1. Such payment* shall be made In

                                                            6
                                                                                                                 181
 accordant-* with the provision* of subsection. F of         subcontractor! relating lo the item* on in y par*
thi* Section.                                                Ucukr statement that shall be submitted in ac-
   D. Permittees acknowledge that the Depart¬                cordanc* with the jvrweduw outlined in Kateoetion
ment has employed or may employ one or more                  F of this Section, at the places where such book*,
independent consultant*, contractor* and svuicon-            record!) and document* are uaually maintained and
tractors and also has utilised and may utilize per-          at reaaonebla tunes; provided, funcexrtr, that writ¬
sonnet and wrrkea of other agencte* to assist It             ten notice of a desire to conduct such an audit
with: (1) processing applications heretofore or              must be given the Authorised Officer; (1) at least
hereafter died by Perroitteea in connection with            fifteen (15) days prior to such audit; and (2) by
the Pipeline System; and (2) monitoring the con¬            not later than the seventy-fifth (75th) day After
struction. operation, maibtwianc* ahd termination           the clou* of the quarter for which the books, rec¬
of th» Pipeline System. Before employing »ch                ords and documents are sought to be audited ; and
consultant*, contractors, or eubcontractore, the            protidod fvrtfur, that any such audita shall b«
Secretary aha)! notify Permittee? of such employ¬          completed within ninety (90) day* after receipt
 ment and shall inform th* Permittees of the par-           by Permittee* of the statement containing the
 paw of employment, th* scope of the work to b*             items to be audited.
 undertaken, the duration of the employment and                3. Nothing herein shall be deemed to require
 th* estimated cost thereof ; prpvidtd, Aowebrr,           th* Department, ita bureaus or office*. or its inde¬
this notion requirement shall not limit th* author¬         pendent consultant*, contractor! and w boon trac¬
ity of th* Secretary to wuer into Agreement* with          tor* to maintain boob, words or documents ocher
consultants, contractors or subcontractors. Cotta          than those usually maintained by them, provided
incurred by the Department in connection with the           that such books, records and documents reasonably
employment of consultant*, oantractors and sub¬            segregate and identify the ooeta for which reim¬
contractors and with respect to utilizing the per¬         bursement is required by this Section. Such books,
sonnel and wrrire* of other agencies shall ba »-            records and documents shall bt preserved or caused
cloded in th* costa for which th* Department is to         to bt preserved for a period of at least two (2)
b« reimbursed by Permittow und*r th* provuiecu             years after the Department submit* a statement
of «ub«<tion A of this Section.                            for reimbursement based oc such books, records
   E. Agreements entered into by the Secretary             and documents. The auditors or accountants desig¬
with respect to th« Pipeline System which result,          nated by Permittee* shall have reasonable access
in coat* for which reimbursement is required by            to, and the right to copy, at their expense, all such
thi* Section shall be drawn to avoid unn*c**a:y            books, records and documents, including all audit
employment of parwmnol and n«dlo*s oxp*nd iture            reports prepared by or furnished to th* Depart¬
of fund*. The Department shall administer this             ment, together with supporting documents in Ibe
Agreement and such other agreement* to reason¬             powesadon of the Department., concerning agree¬
ably tenure that am oc*wary employment of per¬             ments with other agencies employed by the De¬
sonae! and need Ices expenditure of fund* are              partment and with it* uidepemUint consultants.
avoided.                                                   contractors and subcontractor!, which result in
  F Reimbursement by Permittee*, a* provided               coats for which mmbursetnent w required by this
for in this Section and Section 18 hereof, shall           portion.
be mode for each quarter ending on the last day              L With respect to th* audit* by XVrmjttM* of
of March. June, September and Deoembar. On                 any books, records and document* of th* Depart¬
or baforii tha sixtieth (60tb) day aiUr the claw           ment and it* independent sor.*ulian«> contractor*
of each quarter, th* Authnrired Officer ahall sub¬         or subcontractors under agrwmnnts whieh result
mit to Permittees a written statement of th* costa         in costa for which reimburwmwit is required by
incurred by the Department during that quarter             this Section, lueh audk* shall bo conducted by
which are reimbursable.                                    independent certified public accountant*, it*ig-
  Ci. Permittee*shill have th* right to conduct, at        uated by Permittees. Prior to conducting any
their own expanse, reasonable audits by auditors           such audit*, such accountant* sitsll confer with
or accountant*, designated by Perreitfcw, of th*           the auditors auditing such consultants, contrac¬
books, records and documents, of the Department            tors or auboontractara for the Department for
and of its independent, consultants, contractors and       th* purpose of coordinating and expediting their

                                                       7
   m-*u   o-                                                                                       182
                       I
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                                                        183
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  11 5 a     sÿx«-IitIiIt   Iillillililllil
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                                             8   if
                                                 *1
                     Ibfiffi      I itpitii! i   fi r
fiMll!wiil li 0ii#lll®!l!
 to observe any audit allowed by this subsection             this Section, shall operate to preclude the United
and the Authorized Officer may have access to.               Suites from asserting any claim for direct (as op¬
and the right to copy, the audit report prepared             posed to consequential) momoy damages with re¬
by such accountants and furnished to Permittees.             spect to the damage or destruction that was so
Any complaint which Permittees may have as a                 repaired or replaced.
result of any audit under this subsection shall be             C. Except to tha extent that a claim by the
made only to the Authorized Officer and shall be             United States for money damages against any one
governed by the proceduro set forth in subsection            or more of the Permittees shall be barred in ac¬
J of this Section, to the extent applicable.                cordance with the provisions of subsections A and
                                                             B of this Section, Permittees shall be liable to the
13. Damage to United States Property; Repair,               United States, with respect to improved or tangi¬
     Replacement or Claim for Damages                       ble property of the United States, whether real,
                                                            personal or mixed, that is damaged or destroyed
   A. Subject to the provisions of subsection C04           in connection with or resulting from activities
(a)(2) of the Trans-Alaska Pipeline Authoriza¬              along or in the vicinity of the Right-of-Way in
tion Act, at the written demand of the Authorized           accordance with the provisions of Section 204 of
 Officer, Permittees:                                       the Trans-Alaska Pipeline Authorization Act.
      (!) shall repair or replace promptly, to the             D. In the event that a Permittee shall be liable
            written satisfaction of the Authorized          to the United Stated for any damage, destruction
           Officer, all improved or tangible property       or losa of improved or tangible property of the
          of the United States, whether real, per¬          United States whether real, personal or mired, tho
          sonal or mixed, that has been seriouily           collection by the United States of money damages
           damaged or destroyed and is included in          on account of the particular loss, damage or de¬
           the demand, and                                  struction, shall to the extent collected operate to
      (2) shall rehabilitate (including, but not            preclude the United States from enforcing the
           limited to, revegetation. restocking Hah         provisions of subjection A of this Section with
          or other wildlife populations and reestab¬        respect to such Ion, damage or destruction.
           lishing their habitats), to tha written
          satisfaction of tho Authorised Officer,              14. Indemnification of the United States
          any natural resource that shall be seri¬
          ously damaged or destroyed,                          A. Permittees shall indemnify and bold harm¬
                                                            less the United States, its agents and employees,
if the immediate cause of the damage or destruc¬            against and from any and all liabilities or dam¬
tion arises out of, is connected with, or results           ages of any nature whatsoever which the United
from, tha construction, operation, maintenance or           States, its agents, employees, contractors or sub¬
termination of all or any part of the Pipeline              contractors { at any tier) become legally obligated
System : providtd, hovtvtr, that Permittees shall           to pay, and which arise out of, or are connected
not be obligated to repair or replace any property          with, any one or more of the following: (1) the
or to rehabilitate any natural resource that was            construction, operation, maintenance or termina¬
damaged or destroyed: (a) by an act of war or               tion of the Pipeline System; (2) the approval (as
(b) solely by (i) the negligence of the United              distinguished from the ordering of a modification
State* and/or (ii) the negligence or willful mis¬           pursuant to Stipulation 1.3.2.) by the United
conduct of Person* who are authorized to enter              States, its agents, employees, contractors or sub¬
upon, use or occupy the damaged property or anas            contractors (at any tier), of any design, plan,
pursuant to any Federal tease, permit, or other             Construction Mode, construction or research per¬
written authorization that is issued for any use or         taining to the Pipeline System or any part thereof ;
purpose other than in connection with the cen-              or (3) the physical entry by any Person upon, or
*t racoon, operation, maintenance or termination            the use or occupancy by any Person of, any Fed¬
of the Pipeline.                                            eral Land that is the subject of any use or nght
    B- The repair or replacement by the Permittees          which is granted or afforded to Permittees, or to
of any improved or tangible property of the                 their respective agents, employees, contractors or
United States, as provided for in subsectoon A of           subcontractors (at any tier) in connection with the

                                                        9
                                                                                                     184
  Pipeline System : proruieui, Wfrff, that th* pro-           thereof). Mid may or may not directly or ihdi-
  visions of stem* (l) nod (3) of this Section shall          rectly n«n a legal or beneficial interest in the Per-
  not be deemed to spply to liabilities or damages!          onttee whoee liabilities and obligations are sought
 that are caused :{a) by an act of war ; or (» solely        to be guaranteed. In the case of multiple guaran¬
 ty ( i) the neghgenca of the Umtod States, and/or           ttrs that are acceptable to the Secretary, each shall
  (il) the negligrrvoc or willful misconduct of an           be severally liable for only its proportionate share
 agent, employee, contractor or subcontractor (at            of any sum or payment covered by the guaranty.
 any tier) of the United States not acting within tho           C. Each guaranty shall be satisfactory to the
 scope of his authority or employment, and/or (iii:          Secretary in ail respects Including, without l}ml-
 the negligence or willful misconduct of persons             tation, the form and substance of the guaranty,
 vhoare authorised to enter upon, uaeorooeupy the            the financial capability of a proposed guarantor,
damaged property or areas pursuant to any Fed-               the availability of such guarantor to service of
*r*i lease, permit, or other written authoriiation           process, the availability of the as»otsof such gunr-
tliat is issued for any use or purpose other than In         antor with respect to tho enforcement of jutlg-
oonneetroo with tli* construction, operation, main-          meni* against tli* guarantor, and the number of
ttnance or termination of the Pipeline Systenu               gnsraivtore that will I* ntowsary to guarantoo all
    B. Permittees shall be notified in writing of any       of the liabilities and obligation* which will be
claim for which indemnity under the provisions of           covered by a particular guaranty; provided, Aov-
this Section is sought, and such claim shall not be         nwr, that the Secretary shell not unreasonably
compromised without the written ooneant Of Par-              withhold his approval with respect to «. guaranty
rmttees, which consent Permittees agree shall not           or guarantor,
be untaaBonablr withheld or delayed.                           D. The Secretary rhall have the right at any
   C. The regulations of tha Oeoartmant relating            time, and from tune to time, to require the xsb-
to indemnification of the United States »gainst             statution and dalivery of a new form of guaranty
any liability for damages to life, person or prop-          in the event that so outstanding guaranty Is held         ''sar*
erty arising from the occupancy or u»e of the lands         to be invalid or usenforceabl*. in whole or in
under a right-of-way (4S CFK 2301.1-5if]                    part, by a court of competent jurisdiction or, that
(1972)) shall not be applicable to this Agreomonc           cha controlling law shall, by statute of judicial
                                                            decision, be » altered as to impair, prevent or
                  15. Guaranty                              nullify the enforcement or exercise of any right or
                                                            "P**0“    ,l>'        ««•
              .
 A. Upon win* notifed b, th, SKI.UX, to do
», KCH ParmiUM .hall a» to bo         d«li/««l
Ih. 3KKUT7 v,W ud unconditional *oar,My
of th. lull            xU
                                         »
            timclj papiutt of ,11 li.6ilUiK.ad
                                                              !***
                                                                       ?"***
                                                                          W
                                                            “* £“"*».<“>“?> **"
                                                                                   «*ÿ]* '•****"
                                                                                           « ,1"11
                                                                                                    ovUM.line
                                                                                                    ”•
                                                                                                   f"“
o«i*atiow of th. P.mAt» to the Cniwd State.
und,r or in oootwetion with this Amaaeit ot
                                                                             10
                                                                                “'“/ “if' ‘“’ff
aoj other tgrmm. potout or           aStoritKitat “"“f*“• »ÿ*««
                                                                   fWgf
                                                                           /*«W. that th,
                                                                                     *«“ f
                                                                         lbu “f
to b. W or tpnntod to tb. PtantitM. b, tb.
SKWttry th«     r5««                                         <* *n               tht
                                                                                     um? »'
                                                  flff “ hat, d»tiv.rwl. or are“ re,u>r,d
                       in who), or in part to aD or
                                                  ,ob«*t.uon                              to
    part of tho Plptlioo Srttom.
  Kaj
  B. It j.              that a propooof
                                         *u«ÿr                                   .UK b. «com„=„d t, rush

indiridcal partnor th«»f). an oaoc»Uon that n
authorised and empow,n»d to sue and be sued and
                                                                      Juil tododa.n    uppomlownt
                                                            for arriQf oi proceati tllJll b               to the
to hold the title to property in Hs own name (or            Sacrotary.
an individual associate thereof), a joint stock
company that is authored aud empowered to sno                          16. Laws and Regulations
and be sued and to bold the title to property in its         A. Permittees, and each of them, shall comply
own name (or any individual participant therein) .          with all applicable Federal law® *nd regulations,
or a business trust (or an individual settlor               existing or hereafter enacted or promulgated.
                                                       10                                                185
   B. In any avent, Permittees, and each of them,           quired by the provisions listed in subsection B of
shall comply with: (1) all regulation* hereafter            this Soctiou, tho United States shall have the right.
promulgated to implement the Trans-Alaska Pipe-             but not the obligation, to perform any or all of
line Authorization Act, tuid (2) all applicable            such actions at the sole expense of Permittees Prior
regulations hereafter promulgated to implement              to tlm deli very of any such demand, the Authorized
Section 28 of the Mineral Leasing Act of 1020. an           Office shall confer with Permittees, if he deems
amended.                                                    it practicable to do so, regarding the required
                                                            action or actions that are included in the damand.
            17. No Right of Set Off                        The Authorized Officer, following the procedure
                                                            outlined in subsection F of Section 12 hereof, shall
   A. With respect to any sum now or hereafter             submit to Permittees a statement of the expensas
owing, or claimed to be owing, to the United States         incurred by the United States during the preced¬
and that arises out of or is connected m any way            ing quarter in the {lerformarice by the United
with the. construction, operation, maintenance or          Stalls of any required action and, in tl*c absence of
termination of all or any part of the Pipeline Sys¬        a dispute, the amounts shown to be due on each
tem, Permittees, and each of them, shall not act           such statement shall he paid by Permittees in ac¬
off against, or otherwise deduct from, any such            cordance with the provisions of the 6aid last men¬
sum:                                                       tioned subsection. If any one or more of the Per¬
    ( 1 ) Any claim or j udgment for money of   any        mittees shall dispute the amount of any item in
        one or more of the Permittees against the          any statement that shall be rendered in accord¬
        United State* not arising out of the con¬          ance with the provisions of this Section, the pro¬
        struction, operation, maintenance or ter¬          cedures outlined in subsection J of Section 12 shall
        mination of all or any part of the Pipeline        apply with equal force and effect to any such dis¬
        System;                                            pute. Permittees may dispute whether the work in¬
    (2) Any claim or judgment for money of any             volved an action required by a provision listed in
        one or more of the Permittees against the          subsection B of this Section, whether Permittee*'
        United States chat arista out of the con¬          failure or refusal to jicrform any such action was
        struction, operation, maintenance or ter¬          justified, as well as the reasonableness of the speci¬
        mination of all or any part of the Pipe¬           fications for. and the cost of. such work.
        line System, if the sum now or hereafter              B. Required Action (In General) and Refer¬
                                                           ence :•
        owing, or claimed to be owing, to the
        United States is or shall be for any sum
        or charge required to be paid to the
                                                                Survey, map and mark Che Right-of-War
                                                                  Sec. 6.                                               —
        United State* pursuant to Section 8, Sec¬
        tion 12 or Section 18 hereof; or
    (3) Any claim or judgment for money of any                                          —
                                                                Repair, replace, rehabilitate property and
                                                                  natural i naoums Sec. 13.
                                                                Discharge liens—Sec. 10.
        one or more of the Permittees against the
        United States that arises out of. or pursu¬
        ant to, any statute administered by any
        department or agency of the United
        States oilier than the Department.
                                                                Abate any condition causing or threatening
                                                                  to cause a hazard, harm or damage Sec. 24.
                                                                Provide emergency aid—Sec. 30.
                                                                Provide an archeologist to perform certain
                                                                                                               —
                                                                  duti     Stip. L9.
   18. Right of United State* To Perform
  A. If. after thirty (30) days, or in an emergency
                                                                                  ——
                                                                Remove improvements and equipment and
                                                                  restore land Slip. 1.10.1.
                                                                Put areas "to bed" Stip. 1.10.2.
                                                                Protect certain improvements; remove ob¬
such shorter period as shall not be unreasonable,
following the making of a demand therefor by
the Authorized Officer, in the manner that b pro¬                                              —
                                                                  structions; repair damage to public utili¬
                                                                  ties and improvements Stip. 1.11.
                                                                Regulate public access—Stip. 1.12.1.
vided in Stipulation 1.6 for giving written notice*
Permittees, or their respective agents, employees,
contractors or subcontractors (at any tier), shall
fail or refuse to perform any of the actions re-
                                                                          —
                                                                Provide alternative routes for roads and
                                                                  trails Slip. 1.12.2.
                                                             •••s«e." refors to Stations of Ibis A*t**m*fil “Stlo." ftftn
                                                           tb« Stipulation*, actnebod as Exhibit 0 hereto.
                                                                                                                            :o


                                                      11
                                                                                                            186
                               —
     Proride public crossings Stip. 1.12.3.
     Screen, filter, suppress electronic devices—
       Stip. 1.13.1.
                                                             that results from any failure or refusal on iu part
                                                             to pay or satisfy any judgment or obligation that
                                                             arises out of or is connected in any way with the

           —
     Post the Right-Of-Way against hunting,
       etc. Stip. 1.14.1.
     Restore survey monuments, etc.—Stip. 1.135.
                                                             construction, operation, maintenance or termina¬
                                                             tion of all or any part of the Pipeline System.
                                                                B. However, Permittees shall prevent the fore-


                      —
     Take measures to protect health and safety ;
       state hazards Stip. 250.
                                             —
     Provide for environmental briefings Stip.
                                                             closure of any lien against any title, right, or inter¬
                                                             est of the United States in said lands.
                                                               C. The foregoing provisions of this Section shell
      2.1.1.
                   —
    Remove waste Stip 25.6.2.
    Stabilize disturbed areao—Stip. 2.455.
                                                             not be construed to constitute the consent of the
                                                             United States to the creation of any lien against
                                                             Federal Lands or to be in derogation of any pro-



                                    ——
    Rempve temporary fill nunps—Stip 2.4.35.                 hibidon or limitation with respect to such liens
    Seed and plant disturbed areas Stip 2.4.4.1.             that may now or hereafter exist.
    Dispose of excavated material Stip. 2.4.5.
    Provide for uninterrupted movement and safa                                20. Insolvency
       passage of fisli—Stip. 25.1.1.                          If at »ny          there shall be filed by or




                          ——
    Screen pump intakes Stip. 2.5.I.2.                       against anv Permittee, or anv guarantor fur-

                 —
    Plug, stabilize abandoned water diversion
      structuree Stip 2.5X3.
    Constroct levees, etc Stip. 2.5.I.4.
    Construct new channels Sup. 255.2.
                                                             nblhing * gÿnty » accordance with the provi-
                                                             wons 0f Section 15 hereof, in any court of com-
                                                             potent jurisdiction, a petition in bankruptcy or
                                                             insolvency or for reorganization or for the ap-
    Protect Fish Spawning Beds from sediment;                pointment of a receiver or trustee of all or a por-
      oonstruct settling basins—Stip 2.5.25.

      2.55.4.
                              —              —
    Repai r damage to Fish Spawning Beds Stip.
                                                             tion of the Permittee’s or such guarantor's
                                                             property, or if any Permittee, or any such
                                                             guarantor, makes an assignment for the benefit


                            —
    Assure big game passage Stip. 2.5.4.L
    Remove certain debris Stip. 2.75.5.
    Dispose of slash (where u otherwise di¬
                                                             of creditors or takes advantage of any insolvency
                                                             art, and. in the case of an involuntary proceed¬
                                                             ing. within sixty (60) days after tho initiation
      rected.”)—Stip- 2.7.25.
    Take certain mitigation measures Stip.
                                             —               of the proceeding the Permittee or such guaran¬
                                                             tor fails to secure a discontinuance of the pro¬



                     — —
      2.8.1.                                                 ceeding, the Secretary may, if the Secretary so
    Restore disturbed areas—Stip. 2.12.1.                    elects, at any time thereafter, declare such to be
    Stabilize slopes Stip. 2.125.                            a breach of this Agreement by the Permittee or,
    Dispose of certain materials Stip. 2.12.3,               in cases involving a guarantor, the Permittee for
      Stip. 2.12.4.                                          which the guaranty was furnished,
    Remove equipment and supplies—Stip. 2.12.5.
    Clean up, repair, if Oil or other pollutant is           21. Breach ; Extent of Liability of Permittees


                  —
      discharged—Stip. 2.14.4.
    Inspect welds Stip. 35.2.3.
                                             —
    Inspect Pipeline System construction Stip.
      3.25.4.
                                                                A. The liabilities and obligations of each Per¬
                                                             mittee under this Agreement are joint and several
                                                             except that the liabilities and obligations of each

                                   —
    Perform seismic monitoring Stip. 3.4.25.

                                                  ——
    Construct stilling basins ; stabilize pool sides.
      Stip. 3.65.1.
                                                             Permittee are several under the following Sec¬
                                                             tions: 2.D (Purpose of Grant; Limitation of Uae
                                                             to Permittee*), 3 (Transportation of Oil), 8 (Use
                                                             Charge for Right-Of-Way), 12 (Reimbursement
    Provide Oil spill containment structures                 of Department Expenses), 13.C (Damage to
      Stip. 3.11.1. Stip. 3.115.                             United States Property; Repair, Replacement or
                                                             Claim for Damages), 14 (Indemnification of
                      19. Liens
                                                             United States). 15 (Guaranty). 18 (Right of the
   A. Each Permittca shall, with reasonable dili-             United State* to Perform). 19.A (Liens), 20
gr-w-e. discharge any lien against Federal TAMS               (Insolvency). 22 (Tnuwfar), 32 (Release of

                                                        12                                                187
  Right-of-Way), 33. ft And 3.TC, to th* extent that         for tbo Srcrvta ry's written consent to tbe Trans-
  performanca may b* required by **$ than all of tb«         for by ftling with the Secretary all documents or
  Permitted (Agreements Among Permittees), «ÿ,              other informit ton that may bo required by law or
  (Acres* to Document*), 41 (Authority to Enter             regulation, this Agreement or sny other «grao-
  Agreament), Stipulation 1.4 i Common Ageot),              meat, permit, or authorization of the United
 and Stipulation 1.10.1 (Completion of Use} : pro-          Situs relating to the Pipeline System or any part
  re'rfad, hoveeen that M to any obligation to pay           thereof and, upon request (ran the Secretary, ouch
 money to the Halted States, each such Permittee            other documents and information as may be role*
 shell not be liable for any greater portion thereof         rent to the Secretary's determination.
 than on amount which is equal to the product of               D. Before the Secretary acta in connection with
 the total obligation or liability when multiplied          an application for hi* consent with respect to the
 by a fraction, the numerator thereof being the in-         Tran*fcr of an interest in the Right of Way. the
 dividual PormictaeV interest in the Right-ofAVay           Transferee shall demonstrate, to the satisfaction
 at the time of the breach (such interest being ex-         of the Secretary; thattho Transferee is capable of
 pressed as * peivenuga for purposes of the nu-             performing eJl of th* liabilities and obligations of
 merator). and the denominator tberof being th*             the Transferor relatiag to tli* interest to bo trans-
 aggregat* of all of the interacts ic the Right-of- ,       ferred. in ooMidaring an application for such con-
 Way thne were held by all of the Permittees at the *             the Secretary ihsfl male* a determination. in
 tiro# the obligation become* due and payable (the          accordance with Section $$()) of ths Mineral
 ogjrrefrat* of such intercut being expressed on a                    Act of 1920. as amended, concerning: (1)
|m*QyUgv for purpose*, of Ac denominator).                  tha technical capability of the Transferee, and i. U j
                                                            tho financial capability of the Transferee, or of the
                   22. Transfer                             Transferee together withy if any, its proposed


Secretary, Transfer tn whole or in part any righfi,             transferred
M* OT inur« in thb                o, <t» Wÿt-of-
W.y. Any n«h T™nrf.r «W 0,11. Whmp«c«
                                        .                       a u COTMÿklo              .„ Tnln<(M,
                                                                                             * ludit   %rA/„   ta.

thereto of the Secretary, ihal) b# abwhiteJy void,
and, at the option of the Secretary, shall be
deemed to bo obreoch of ihi. Agreement by rach
                                                                       STtolh  lilt
                                                                        K&&7?TvIZtSkZIl
                                                                                                               «
Permittee so violating this Agreement.
  B. Any Involuntary Peerage of Title with re-                                U°!,
*P-t to any right.  Se oHXret       in this Agree-
ment or the Right-of-Way that ‘hall be attempt*!


                                     L addition,
                                       Uÿidrtk
rt.ll, to*. «tt«


.
                     pcmLl      b,
at tli, option of tbe Sacrelaiy* toA, :n
lb. opde. of th, SccreUry. rt.ll b,
                                                 It
                                               to be
  breach Of ,h» Aercccucnt by th. aftcicd Pcre.it-
                                                            ™*
                                                               AU
                                                                   *ÿ1°™"* >»
                                                                              tw*“t
                                                                               .ml   ..
                                                                                      “> «•
                                                                                              fwrt«Sÿtti7<#
                                                                                          (ttttnur
                                                                                          -«»»
                                                                                       « =>“
                                                                                                    Tnn*<*
                                                                                                     or goÿotor.

tec: ,-HUWM. liwiwr. that oothilutu.lhi.nb-                 <*   > *h»caon -h«, .pply.oe for th. COMCOI
section shall be deemed to prohibit, or to limit in
acr oar, th. cxercifl. of »nr riÿht or option of the
                                                            0

                                                            .  "P*
                                                                           ...               .,
                                                                          rt.il not unreasonably with-
CoitcU Sutre uhder Senior. 20 of thia .tÿrecmcM.            W* "* J"*"1 <•f P                     twl
  C With irepM to any Tre«f*r thtt rtall re-                WWW*     or       h* Mlls'r‘t *•«»  Tr*“
                                                            “p
late to this             or the Right-Of-Way, the
Transferor, tbn Transferee and the guarantor or                  (l) At the time of, or before, the consumma¬
guarantors, if any, of r.h* Transferea shall apply                   tion of the Transfer, there shell hare oc*

                                                       13
                                                                                                         188
          curred any breach, by the Transferor or               H. The Sec retan,’ shall consent to the Transfer
          any predecessor of the Transferor, of this          of an interest in the Right-of-Way between:
           Agreement or of any other agreement,                    (1) Any of the Original Permittees, their
           permit, or authorization relating to the                     Affiliate* or any of them, or
          Pipeline System that the United States                  (2) One or more of the Original Permittees,
          may make with, issue to, or grant to the                     their Affiliates or any of them, and a cor¬
          Transferor, and that was not cured to the                    porate Transferee, all of the outstanding
         satisfaction of the United States before                      capital stock of which Transferee at the
          the consummation of the Transfer, or                         time of the Transfer is owned by one or
      (8) With respect to Transfers other than                         more of the Original Permiltem or their
          thoee referred to in subsection H of this                    Affiliate*, or
          Section, the Transferee, or the Transferee              (3) One or more of the Original Permittees,
          together with, if any, it* guarantor or                      their Affiliates or any of them, and a part¬
          guarantors as approved by the Secretary :                    nership consisting of two (2) or more of
          (a) is not, or are not, capable, in the judg¬                the Original Permitte« or their Affili¬
          ment of the Secretary, of performing all                     ate*;
         of the liabilities and obligations of the
         Transferor relating to the right, title or           provided, that the Transferor or Transferee »re
          interest to be transferred, or (b) shall re¬        not in breach of this Agreement; provided fur¬
         fuse to allow an audit and/or inspection             ther, that all applicable laws and regulations in
         as provided for in subsection E of this              effect at the time of Transfer are complied with;
         Section ; or                                         provided further, that the application for any
     (3) Applicable laws and regulations in effect            such Transfer be filed with the Secretary within
         at the time of a Transfer shall not have             eight (8) years of the Effective Date hereof or
         been complied with by the parties to the             prior to completion of construction of the Pipe¬
          Transfer.                                           line at its maximum design capacity (i.e. approxi¬
                                                              mately two million ( 2,000,000 ) barrel* per day)
   G. A Permittee seeking to be divested in whole             whichever shall first occur; and provided further,
or in part of its right, title, and interest in and to        that no substantial reduction in the financial
the Right-of-Woy and this Agreement in connec¬                worth of the Transferee (or its Parent), or of the
tion with a Transfer shall be released from its               Transferee (or its Parent) together with its
liabilities and obligations (accrued, contingent, or          guarantors, if any. has occurred since the date the
otherwise) to the United States under this Agree¬             Transferee (or its Psrent) acquired it* original
ment to the extent and limit that the Transferee              interest in the Right-of-Way.
issumea unconditionally the performance and ob¬
servance of each such liability and obligation, pro¬                23. Port Valdez Terminal Facility
vided:                                                           A. Tb* provisions of this Section shall apply
     (1) All of the provisions of this Agreement              to the construction end operation of the terminal
           with respect to the approval or disap¬             facility of the Pipeline System located at Port
          proval of the Transfer have been fully              Valdez, Alaska.
          complied with to the satisfaction of the               B. Permittees shall maintain and operate a
          Secretary ;                                         waste-water treatment facility in conjunction with
     (2) The Secretary has consented in writing to            the terminal facility at Port Valdex. AJ1 odly-
           to the Transfer: and                               water (including, but not limited to, discharge
     (3) Thereafter the Transfer and the attend¬              from fuel tanks, cargo tanks, ballast tanks, and
           ant assumption agreement, if any, are in           bilgva) discharged from any tanker or other sea¬
           fact duly consummated on the basis of              going, bulk Oil carrier (hereinafter referred to
           the document* previously presented to the          as * “Vessel’’) loading at or from the terminal
           Secretary for his review, and the Secre¬            facility shall be received and treated by said waste-
           tary is so notified in writing by the par¬          water treatment facility. Water discharged from
           ties to the Transfer.                               the waste-water treatment facility shall not oon-

                                                          U
                                                                                                            189
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                                                   191
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  liilitlyÿlis? fi? 111111*111*         -Uni
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lliipp mm          MilU
        s        i         2       a     a»
                           8       S
                                   c.
         amount of ballast water discharged on each occa¬                  25. Temporary Suspension Orders of
        sion, the amount of other oily water discharged on                         Authorized Officer
        each occasion, and the amount of Oil that was
         loaded on each occasion from the terminal facility.              A. The Authorized Officer may at any time
                                                                      order the temporary suspension of any or all con¬
           J. Permittees shall retain, for an appropriate             struction, operation, maintenance or termination
         period, as prescribed by the Authorised Officer, all         activities of Permittees, their agents, employee*,
        documents furnished to Permittee* pursuai t to                contractors or subcontractors ( at any tior) in con¬
        subsections E and F of this Section and the books             nection with tha Pipeline System, including but
        and records specified in subsection I of this Sec¬            not limited to the transportation of Oil, if in the
        tion; and the Authorised Officer shall have access            j udgment of the Authorized Officer :
        thereto at all reasonable tunes for the purpose of                  (1) An immediate temporary suspension of
        inspection and copying.                                                  such activities is necessary to protect : ( a)
           K. Permittees shall comply with all Federal,                          public health or safety (including, but
        State and local laws and regulations existing or                         not limited to, personal injury or loss of
        hereafter enacted or promulgated affecting in any                        life with respect to any Person or Per¬
        manner the construction and operation of the                             sons) ; or (b) the environment from im¬
        terminal facility. If any such law or regulation                         mediate, serious, substantial and irrepar¬
        governs specifically any particular requirement                          able harm or damage (including, but not
        or standard that is prescribed in this Section. Per¬                     limited to, harm or damage to areas of
        mittees shall comply with the requirement or                             vegetation or timber, fish or other wild¬
        standard established by such law or regulation                          life populations, or their habitats, or any
        and, so long as compliance is required, Permit¬                         other natural resource) ; or
        tees shall be relieved of any obligation to comply                  (2) Permittees, their respective agents, em¬
V£££P   with the particular requirement or standard of this                     ployees, contractors or subcontractors (at
        Section that is governed by such law or regulation.                     any tier) are failing or refusing, or have
                                                                                failed or refused, to comply with or ob¬
               24. Duty of Permittees To Abate                                  serve: (a) any provision of this Agree¬
                                                                                ment necessary to protect public health,
           A. Permittees promptly shall abate, either com¬                      safety or tha environment; or (b) any
        pletely or, as the case may be. as completely as                        order of th* Authorized Officer imple¬
        possible using their best efforts, any physical or                      menting ar.y such provision of this Agree¬
        mechanical procedure, activity, event or condition.                     ment or of any other agreement, permit
        existing or occurring at any time: (1) that is sus¬                     or authorization chat shall have been duly
        ceptible to abatement by Permittees, (2) which                          approved, issued or granted by the Secre¬
        arises out of, or could affect adversely, the con¬                      tary in connection with all or any part of
        struction, operation, maintenance or termination                        the Pipeline System.
        of all or any part of the Pipeline System, and (3)               B. The following shall be applicable to any tem¬
        that causes or threatens to cause: (a) a hazard to           porary suspension order that may be issued in
        the safety of workers or to public health or safety          accordance with the provisions of subsection A of
        (including but not limited to persona) injury or             this Section, if th* order would have the effect of
        loss of life with respect to any Person or Persons) ,        suspending (1) operation of the entire Pipeline,
        or (b) serious and irreparable harm or damage to             (2) transportation of Oil through the Pipeline,
        the environment (including but not limited to                (3) operation of the entire Valdez terminal
        areas of vegetation or timber, fish or other wildlife        facility, or (4) construction of an entire Con¬
        populations, or their habitats, or any other natural         struction Subdivision:
         resource)                                                         (a) If the order is issued in accordance with
           B. Permittees shall cause their respective                           subsection A(2) of this Section, the Au¬
        agents, employees, contractors and subcontractors                       thorized Officer shall transmit a copy of
         (at any tier) to observe and comply with the fore¬                     the order, and a preliminary report with
        going provisions of thi* Section.                                        respect Co the order, to the Secretary

                                                                J7                                                   192
             within aix («) hours after the order h«            G. Any temporary wspeasion order that is
             bten timed   and,  thereafter,  the Author*      given or usood in accordance with this Section
             i»d O Aker's report and the order will shall
             be reviewed promptly by tho Secretary ;         34ii.
                                                                   >     subject to the provisions of Stipulation

             provided, kowtvrr, that nothing herein                           25, Appeal Procedure
            shall retjalrt the Secretary to take any
            action following toch review; or                                 /'cm Temporary Sutpemion Order*
        (b) If the order it to ba issued in accordance           °f Aÿ-oriptd Officer; Appeal* from Denial*
            with subsection A (3) of tliis Section, the          °f Rwmption of Suspended AetMHte
            Autloorized Officer shall not awt the               (i) Permittees may appeal directly to the Sec-
            order unices and untU the Secretary givea        retary: (a) any temporary suspension order is.
            to the Authorized OAcer the Secretary's         sued by the Authorized Officer pursuant to Section
            prior written approval with reaped to           & of tint Agreement; and (bj any <Untal by the
           the order.                                        Authorized Officer of a request for resumption of
    C. Tlie Authorized Officer    altall give Permittees    actiritiee   suspended pursuant to »ch a temporary
  prior notice of the temporary     aurpension   order  as  --tuspoasion    order. If a right of appeal ia to ba
 lio (team*  practicable. If circumstance*    permit, the   preserved,     PermitteOi          file u notice of appeal
 Authorized Officer shall consult with Permittees.          with   the  Secretary     within fifteen   fl3) days from
 prior to issuing the   order,  to discuss  appropriate    ;#»*  elective    data  of  the order   or denial being ap*
 measures to (I) forthwith abate or avoid the               pealed.    The   notice   shall set   forth  with particu*
 harm or threatened harm that is the reason for             larity   the   order   or   dental   being   appealed. To
 the issuance of the order, or (3) effect compliance        perfect an appeal, Permitted shall file with the
 with tha prorisjoiri or order, whichever ia               Secretary within thirty (30) dAyu from the clfee*
applicable,                                                ti*» date of the order or denial being appealed a
    D. After a temporary suspension order has been         stat«m*nt     of the facta of dwnaattar and a statement
given by the Authorized Officer, Permittees shall                   applicable law, supplemented by such doeu*
 promptly comply with ail of tha provisions of the         mentation and arguments on the facts and the low- *
order and shall not resume any activity suspended               PerroitU'wi may wish to present to justify modi-
or curtailed thereby except M provided in this                “
                                                           ficatton or reversal of the order or denial. All
Agreement or pursuant to court ordar.                      statementt of fact shall be under oath.
   E. Any temporary suspension order which, m                 '
                                                               (&) Except as provided hereinafter in thi* See-
an emergency, is given orally shall confirmed
                                         he            in  *»«>.  the Secretary shall decide, the appeal within
writing, as provided for in Stipulation I.A2. Each         thirty   (30) days from the data Permittee*’ appeal
written order or written confirmation of an order          i*   perfected.   If the rkcretary does not reader a
shall net forth the reason* for the suspension. Each       decision    within   that time, die appeal shall ba con*
temporary suspension order shall be         limited,  in.  v. tiered  to  hare  been denied by tha S*rret*ry, and
sofar as is practicable, to the particular area or         »ueh   denial   shall constitute the final administrator*
activitv that is or may be affected by tha activitia*      dacimon of the Apartment.
or conditions that are the basis of the order. Each        Y
                                                               W               for any decision that may be made
order shall be effective as of the data and time           h>'    ** beervtary    after his review as provided for
                                                           :n


                                                    -
given, unless it ejwcifi* otherwise. Each order                                     of 5601lon 25 l"PW<* »n?
»W1 miiR in Ml font uninfect until moliiW                          »<  tl»  Sjnmcy, with mpect to «ny cppccl
or twrokM in writing b,fa
the Secretary.
                               ft*#*           0B«r           gf £SSS ZXSffiB
                                                            administrative decision of tha Department.
   F. Resumption of any suspended activity shall
 be promptly authorized by the Authorized Officer               Sÿped\ted Appeal*
 in writing when he is eatisfied that (1) tha harm             (1 > Permittee* shall be antitiad to an expedited
or threatened harm ha* been abated or          remedied,    appeal    to the Secretary from any temporary tut¬
or (8) Permittees have effected, or are ready, will-        pension order, or order denying resumption of sow¬
 ing and ebk to effect compliance with the prori-           pended icriritit* (except any refusal to issue a
 jinn or order, whichever is applicable,                    ffotico to Proceed or the imuar.ee of a Notice to
                                                                                                           193
                                                        1ft
                           I
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                         1 SIM? iff   ti'UtUml
                                          Hflif
                                                  S   s
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194
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promulgaled by the Secretary to impiwaejBt this                   winded, sad rule* and regulations and
provision,                                                       r**e rant ocdere of
                                                                                   the Secretary of Labor.
  B. Permittees agree that, during the period of             (5) Permittee* will fumiah all information
construction of the Pipeline System and for «w                   and report* required by Ezecutira Order
long a* the Pipeline System, or any portion                      JJTov 11246 of September 24, 1966, as
thereof, shall be in operation, or for so long as                amended, and by the nilaa, regulations.
thia Agreement shall bt» in effect, whichever ia the             and orders of the Secretary of Labor, or
longer:                                                          pursuant thereto, and will permit aura*
    (1) Permittee* will not discriminate against                 to Permittee*' books, record*, and ac¬
         any employee or applicant for employ¬                  count* by the Authorized Officer and the
         ment because of race, color, religion, sex,            Secretary of Labor for purpose* of in¬
         or national origin. Permittee* will take               vestigation to ascertain compliant* irjeh
         affirmative action to ensure that appli-               8twh rules. regulations. and orders.
         ran in are omployvd, and that employee*            (6) In the event of Pcrmittew‘ noncompli*
         are equally treated during employment,                 ante with thia equal opportunity danse
         without regard to their race, color, reli¬             or with any of said rata, regulations or
                                                                orders, this Agreement may he terminated
        gion, «x, oar national origin. Such action
        shall include, but sot be limited to the                or wrpendud in whole or b part by tht
         following: employment, upgrading, de¬                  Secretary, in aooordance with she pro
        motion, or transfer; recruitment or re¬                  msons of Section 403 of the Act of No¬
        cruitment advertising; layoff or termi¬                  vember 16. 19T8, 67 Seat 590 -:i&73) and
        nation; ratoa of pay or other forma of                   in th* manner provided in Section SI
        oorepensaticn; end selection for train¬                 hereof, and Permittees may be declared
        ing, including apprenticeship. Permittee*
                                                                ineligible for farther government con¬
        agree to poet is oonapicuou* place*, avail¬             tracts in accordance with procedures au¬
        able to employees and applicants for                    thorized in Executive Order No, 11216
        employment, nolle** to be provided by                   of September 24, 196ft, as amended, and
        tha Authorized Officer netting forth tha                such other sanction* may be imposed and
        provisions of this equal opportunity                    remedies invoked as provided in Execu¬
        clause,                                                 tive Order No. 11246 of September $4,
    (2) Permittees will, in all solicitations or ad¬
                                                                1966. as amended, or by rule, regulation,
                                                                or order of tha Secretary of La ho?, or as
       vertisement* for wnpioym placed by nr                    Mhenvbui provided by law.
       on behalf of Pemiveaa, state that all                (7) Permittee* will include the provisions of
       qualified applicants will receive cocunder-              an equal opportunity claim as established
       ation for employment without regard to                   by regulation of the Secretary in every
       me*, color, religion, mu, or national
                                                                contract, subcontract or purchase omer
       origin.                                                  unless r-xtmpud so that such provisions
   (3) Permittees w»JQ sand to each labor union                 will be binding upon each contractor, sub¬
       or representative of workers with which                  contractor fat any tier) or vendor. Pee-
       Peraultert hate a collective bargaining                  mi tiers will takesuch action with respect
       agreement or other contract or under¬                    to any contract, subcontract, or purchase
       standing, a notifx. to be provided by the                order as the Authorized Officer may direct
       Authorized Officer, advising the labor                   as a means of enforcing such provisions
       union o* workers' representative of Per¬                 including sanction* for noocorapllence:
       mittees' commitments under this equal                    providedÿ htnstrtr, that in the event Per¬
       opportunity clausa and shall poat copies                 mittees become involved in or are threat¬
       of the notice in conspicuous places avail¬               ened with litigation with a contractor,
       able to employ*** and applicants for                     subcontractor fat any tier) or vendor as
       wnployment-                                              a result of such direction by the Au¬
   (4) Permittees will comply with Exwati**                     thorized Officer. Permittees may request
       Order No. 11246 of September 24. 196!!. ofl              the United States to enter into such lrti-
                                                       20
                                                                                                   195
            gntion to protect the intervals of the          not permit Permittees’ employees to perform their
            United Stews.                                  sendees at any location, under Permittees' control,
     Permittees furthor agree thet they will be bound       where Segregated Facilities are maintained. Per¬
  by the equal opportunity clause (Le., subsections         mittees agree that a breach of this certification is
  (1) through (7) of this subsection B) with re*           a violation of the equal opportunity clause of this
 speet to their own employment practices when they         Agreement, As used in this certification, the term
  participate in federally assisted construction work.     “Segregated Facilities” means, but is not limited
    C. Permittees agree that they will assist and          to, any waiting rooms, work areas, rest rooms, and
  cooperate actively with the Authorized Officer           wash rooms, restaurants and othar eating areas,
 and the Secretary of Labor in obtaining the com¬          time clocks, locker rooms and other storage or
 pliance of contractors and subcontractors (at any        dressing areas, parking lots, drinking fountains,
 tier) with the equal opportunity clause and the           recreation or entertainment areas, transportation,
 rules, regulations, and relevant orders of the Sec¬       and housing facilities provided for employees
 retary of Labor, pursuant to the Executive Or¬            which are segregated by explicit directive or are
 der. that they will furnish the Authorized Officer       in fact segregated on the basis of race, color, re¬
 and the Secretary of Labor such information as           ligion, or national origin, becausa of habit, local
 they may require for the supervision of such com¬        custom or otherwise. Permittees further agree that
 pliance-, and that they will otherwise assist the         (except where Permittees have obtained identical
 Authorized Officer in the discharge of the Depart¬       certifications from proposed contractors and sub¬
 ment's primary responsibility for securing               contractors (at any tier) for specific time periods)
 compliance.                                              Permittee* will obtain identical certifications from
    D. Permittees further agree that they will re¬        proposed contractors and subcontractors (ae any
frain from entering into any contract or contract         tier) prior to the award of contracts or subcon¬
modification subject to Executive Order No. 11246         tracts exceeding 310,000 which are not exempt
of September 24, 1965, with a contractor debarred         from the provisions of the equal opportunity
from Government contracts and federally assist¬           clause; that Permittees will retain such certifica¬
ed construction contracts and will carry out such         tions in Permit tees' files; and that Permittees will
sanctions and penalties for violation of the equal        forward the following notice to such proposed
opportunity clause as may be imposed upon con¬            contractors and subcontractors (except where the
tractors and subcontractors by tho Authorized Of-         proposed contractors or subcontractors have sub¬
near or the Secretary of Labor pursuant to Part           mitted identical certifications for specific time
IT, Subpart D of the Executive Order. In addi¬            periods) . -NOTICE TO PROSPECTIVE CON¬
tion, Permittees agree that if they fail or refuse        TRACTORS AND SUBCONTRACTORS OF
to comply with these undertakings, the Secretary          REQUIREMENT FOR CERTIFICATION OF
may take any or all of the following actions:             NONSEGREGATED FACILITIES." A Certifi¬
terminate or suspend the Right-of-Way in whole            cation of Nonsegregated Facilities, as required by
or in part, in accordance with the provisions of          the order (32 F.R. T439, May 19, 1987) on Elimi¬
Section 403 of the Act of November 18, 1973, R7           nation of Segregated Facilities, by the Secretary of
Slat. 590 (1973). and in the manner provided in           Labor, must be submitted prior to the award of a
                                                          contract or subcontract exceeding 310.000 which
Section 31 hereof: refrain from extending any
further assistance to Permittees under the pro¬           is not exempt from the provisions of the equal
gram with respect to which the failure or refusal         opportunity clause. The certification may be sub¬
occurred until satisfactory assurena of future            mitted cither for each contract and subcontract or
compliance has been received from Permittees;             for all oontracta and subcontracts during a period
and refer the case to the Department of Justice                                                       .
                                                           (i.e., quarterly, semiannually, or annually)
for appropriate legal proceedings.                                29. Training of Alaska Natives
    E. By accepting this Agreement, Permittees
certify that Permittees do not and will not main¬            A. Permittees shall enter into an Agreement
tain or provide for Permittees' employees any             with the Secretary regarding recruitment, testing,
Segregated Facilities at any of Permittees' es¬           training, placement, employment, and job coun¬
tablishments and that Permittees do not and w-.ll         selling of Alaska Natives.

                                                     21
                                                                                                     196
                                                                       197
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                                                         198
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                                                  199
pJill? hpi«ill|lsll ilPi|5Hlil*l ililtllw!’
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                                EES
          number ) etch dated December 11, 1973;               or in connection with this Agreement or with
                                                               respect to all or eny pert of the Pipeline System,
    111) Assignment, Conveyance, and Transfer                  the Secretary shall have the right, after notice to
         Agreement, dated January 8, 1974, in                  the affected Permittee, to inspect and copy: (1)
         connection with the transfer by Union                 any document or record which a Permittee is re¬
         Oil Company of California to Union                   quired by this Agreement to make or maintain,
         Alaska Pipeline Company, a California                 (2) any document or record that at any time has
         Corporation, of all of the former com¬                been filed by a Permittee with any governmental
         pany's rights under all agreements relat¬            department or agency, access to which is not pro¬
         ing to the Trans- Alaska Pipeline System             hibited or limited by law or regulation, or (3)
         to which the former company is a party,              any abstract, summary or other document that
         and all real or pereona] property in which           may hare been prepared by any governmental
         the former company may have acquired                 department or agency in connection with any
         an ownership mtereet pursuant to inch                document or record referred to in (2) above.
         agreements, and under which Assign¬                     B. Subject to the requirement that the docu¬
         ment, Conveyance and Transfer Agree¬
                                                              ments or records, herein below referred to, shall
         ment Union Alaska Pipeline Company
                                                              be relevant to the exercise or enforcement by the
         assumes all undischarged obligations of
           Union Oil Company of California under              Secretary of his authority or the rights of the
          any and all of the above mentioned Trans-           United States under or in connection with this
           Alaska Pipeline System agreements.                 Agreement or with respect to all or any part of
   B. Said agreements are referred to collectively            the Pipeline System, the Secretary, after notice
as the “Ownership Agreements." Each affected                  to tha affected Permittee, may inspect and, with
Permittee shall file promptly with the Authorized             the consent of the affected Permittee ( which con¬
Officer true and complete copies of all modifica¬             sent each Permittee agree* will not be unreason¬
tions of the Ownership Agreements and of all                  ably withheld or delayed), may copy any docu¬
instruments superseding, supplementing, cancel¬               ment or reoora that has been or may hereafter be
ling or rescinding, in whole or in part, any one              filed by a Permittee with any governmental
or more of the Ownership Agreement*.                          agency, access to which is prohibited or limited
   C. In the event Permittees execute an “Operating           by law or regulation, and any abstract, summary
.Agreement*', as contemplated in Section 5.1 of the           or other document that may have been prepared
agreement described in subeection A(l) above in               by a governmental department or agency in con¬
this Section, or any like or similar agreement                nection with any such document or record; pro-
with respect to the operation, maintenance, or                vtderf, Aouwesr, that the rights of the Secretary
termination of all or any part of the Pipeline                under this subeection may be exercised only if,
System, Permittees shall file promptly with the               and to the extant that, tha provision constitutes
Authorized Officer a true and complete copy there¬            a valid waiver of any such prohibition or
of, together with like copies of all modifications of.        limitation.
and all agreements superseding, supplementing,                   G Nothing in this Section shall be deemed to
cancelling or rescinding, in whole or in part, the            limit, prohibit, or waive any right or privilege of
Operating Agreement or any such like or similar               the United States, and particularly of the Secre¬
 agreement.                                                   tary, to inspect or copy any document or record
                                                              under any authority granted pursuant to law or
            34. Access to Documents                            regulations.
  A. As to any documents or records not filed (or                       33. Rights of Third Parties
required to be filed under any other provision
of this Agreement) with the Secretary or the Au¬                The pertiea hereto do not intend to create
thorized Officer that shall be relevant to the ex¬            any rights under this Agreement that may be
ercise or enforcement by the Secretary of his au¬             enforced by third parties for their own benefit or
thority or the rights of the United States under              for the benefit of others.

                                                         25
                                                                                                     200
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        ARCO PIPE LINE COMPANY
           By /»/ C. T. CARTER
                    President




       EXXON PIPELINE COMPANY
          By /g/ W. S. SPANGLER
                   President




       MOBIL ALASKA PIPELINE COMPANY
          By /•/ E. J. WACKEB, JR.
                  Vice President


'mzr


       PHILLIPS PETROLEUM COMPANY
          By /s/ CARSTENS SLACK
                  Vice President




       SOHIO PIPE LINE COMPANY
           By /a/ ALLEN D. DORRIS
                   President




       UNION ALASKA PIPELINE COMPANY
           By /s/ SAM A. SNYDER
                 Vice President


             27                        202
                  !                                     P         *s-


           I Exhibit A                                       ?*   Fart I
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  J
      TAPS Renewal Legal Descriptions
ill   *   v rir w                   /”“•:¥Y                           r         "df     '   "
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                                                                                                                 203
                                    EXHIBIT A -Part I
                        TAPS Renewal Legal Descriptions
                Federal Grant of Right-of-Way F-12505 and AAf5847
Thoie lands within the Trans Alaska Pipeline System ('TAPS4') Right-Of-Way » described in:

       Plats   SM   (TAPS Centerline Monumentation Survey) filed January         7. 1981 in the
       Bartow, Fairbanks. Fort Gibbon and Rampart Recording Districts* respectively, and filed
       on January 32, 1981 in the Oiitina and Valdez. Recording Districts, respectively,
       Plats 2001*8 and 2001-5 (TAPS Centerline Monumentation Survey at Atigun Reroute,
       MP 200 Reroute and Pump Station {“?,$.%$ vicinity) filed January 10, 2001 in the
       Barrow and Fairbanks Recording Districts, respectively,
       Plats 95-1 (P.S. 2\ 95-2 (P.S. 3), and 95-3 (PJ$, 4) filed February 23, 1995 in the Barrow
       Recording District,

       Plats 95-11 (P.S. 5), 9M0 (P.S. 6) and 95-12 (PS. 7) and 95-14 (PS. 10) filed February
       23, 1993 in the Fairbanks Recording District,              Kt4 M


      Plat 95-1 (P,S, 6) filed February 23. 1995 in the Rampart Recording District,

       Plat 95*04 (P.S. 11) filed February 27. 1995 in the Chttrna Recording District*

       Plat 95-04 (P-S< 12) filed February 21,1995 in the Valdez Recording District,

      Plats 2001-6 (CS. Atigun). 2001-3 (Communication Site PCS"] Co?ta Hill), 2001-4
      (C.S. Slope) and 2001-5 (CS. Galbraith Lake) and 2001-7 (CS. Margaret Hill) filed
      January 10, 2001 in the Barrow Recording District,                   V
      Plats 2000-14 (C.S Gakona), 2000-13 (C,S, Round Top) and 2000-15 (CS. Stock) filed
      December 27. 7000 in the Chitina Recording District              .
                                                                           m
      Plats 2001-6 (C.S. Kaaruk), 2001-7 (CS. Coldfoot). 2001-8 (CS- Eagle). 2001*9 (C.S.
      Fish), 2001*41 <CS, Aggie), 2001-12 (C.S,Dormelly), 2001-13 <CS> Nicole Knob),
      2001-10 (C.S. Uvcngood) and 2001-14 (CS. Yost) filed January 10, 2001 hi the
      Fairbanks Recording District,
       Plat 20014 (CS, Bench) filed January 10, 2001 in the Rampart Recording District.

       Plata 2001-17 (C.S. Kimball Pass), 200M9 (CS. Tickel), 2001-18 (CS. Passive) and
       2001*20 (CS. Tsiha) filed December 28, 2000 in the Valdez Recording District,
       And further described in the TAPS Right-of-Way Boundary Description Report* Alytsks
       Manual No. ROW 214. as amended,




                                            Artnl-i                                        204
                             EXHIBIT A -Part I

                 TAPS Renewal Legal Descriptions
         Federal Grant of Right-of-Way F-12505 and AA-5847
And as further described in the following land parcel descriptions,:

       PARCEL DESCRIPTION
       F-12505 BEGINS

       UMIAT MERIDIAN

       T. 1 S..R. 14E..U.M.
       Sec. 2 EVi, 10 SEV*, 11, 15 NE14

       T.9S..R. 13 E.. U.M.
       Sec. 4, 5, 7, 8

       T.9S..R. 12E..U.M.
       Sec. 11, 12, 14, 15,16, 17, 19,20,30

       T.9S..R. 11E.. U.M.
       Sec. 25, 35, 36

       T. 10S..R. 11 E.. U.M.
       Sec. 2, 3, 10,11, 14, 23, 26, 35

       T. 11 S..R. 11E.. U.M.
       Sec. 1,2, 12, 13,24

       T. 11 S..R. 12 E.. U.M.
       19, 29, 30, 32


        Sec. 5, 8, 9, 16,21,28, 33

       T. 13 S.. R. 12 E.. U.M.
       Sec. 3, 9, 10, 15, 16,21,28,32, 33

       T. 14 S.. R. 12 E.. U.M.
       Sec. 5, 7, 8, 17. 20, 29, 32

       T. 15S..R. 12 E.. U.M.
       Sec. 5, 6, 7, 18, 19
       Sec. 8, 17 (C.S. Atigun)

       T. 15 S..R. 11 E..U.M.
       Sec. 23, 24, 26, 34, 35

                                      A Pan I -2                       205
                                                                     -   *          v*

                                           EXHIBIT A Part I
                                          :              •< v i\- *1*
                                                                                         i%


                                          D         f         ?• \       m   %mT%> * v*
          Sec.2,3.)>,l«,lSil9,2(),2H».3i)

      T,.MS,R,iO.ÿ,i-’M,

          Sto     M&jllSja Margaret Hitt)
                                          ‘t
                                               -         'ÿ




          * *       * * tu.          ..             ~
                                                                     4%      MgSJ
      T. 17 S„ R. 10E..U.M.
                         '

      &C.;2/                 '




                  JF-

      FAIRBANKS MERIDIAN
      T.37N..R, 10W..F.M.
          Sec. 25, 26, 35

      T: 36N..R. 10 W..F.M.
          Sec> 2, 3, 10, 15; 16, 21, 28, 33

      T.35N.,R,i>>W.,F,M.
          Sec. 4, 9, 16.21,28,33

      T. 34 M.. R. 10 W. F.M
      Sec. 4, 9, 10, 15. 22, 29, 27, 35.
          .
              ‘
                        »'   JT -fe":
      T. 33 N;.R.10W.. F.M.                         "•
      SliSifS'”
          Sec, 4, 9. 16,20,21, 29,31,32
•-ÿ

                   iAjf          «

          Sec. 6, 7* 8* 18, 19


      Sec. 25. 26. 32. 33. 34. 35
                        T * «r*
      T. 30 N..R. UW..F.M.
      Sec. 5, 6,7,18.19,30
                                 *r *ÿ**''ÿ.+
      T.30N..R. 12W..F.M,
       Sec. 25,36
                        V /
      t           m              *
                                                ,
                                                        A?anl~3                               206
                     EXHIBIT A - Part I

          TAPS Renewal Legal Descriptions
  Federal Grant of Right-of-Way F-12505 and AA-5847
T. 29N..R. 12 W.. F.M.
Sec. 1,11, 12, 13, 14

T. 28N..R. 12W..F.M.
Sec. 6 SEVA (C.S. Coldfoot)
Sec. 15 and 16, those portions
    within federal mining claim
    F-63334
Sec. 29, 30,31

T. 27 N..R. 12W..F.M.
Sec. 6

T. 27 N..R. 13 W„ F.M.
Sec. 1, 11, 12, 14, 23,26, 35

T. 26N..R. 13 W.. F.M.
Sec. 2,11, 14, 23,25,26, 36

T. 25 N.. R. 14 W„ F.M.
Sec. 35 NWV4 (C.S. Eagle)

T. 25 N..R. 13 W.. F.M.
Sec. 1, 12, 13, 23, 24, 26, 27, 33, 34


Sec. 6, 7

T. 24N..R. 13 W„ F.M.
Sec. 5,7,8,18

T. 24N..R. 14 W.. F.M.
Sec. 13, 23,24, 26,27,34


Sec. 3, 4, 8,9, 17, 18, 19, 30,31

T. 22 N„ R. 14W..F.M.
Sec. 6, 7,18,19,20,29, 32

T. 21 N.. R. 14 W., F.M.
Sec. 5, 6, 7, 18, 19,30,31



                                A Part I -4           207
                    •'ÿ4?ÿ
                                             EXHIBIT A Part I
                                                                  **
                                                                           -
                                                                           ’        ,Vft
                                                                                           'rÿ   Jr,


                    rp       j.   n,".   n              t     T            i   rv                      21.   :ÿ
                                                                                                                  i

                                                                                12S05ane
     T. 20 N..K. 13 W.. F.M                                                                            ** ffi r
     T. 2(1 N..R. ISW.. KM,
     sec. 2, 10. 11, IS, 22, 26, 27, 35
     T.19N..K,15W.,P-M.
     Sec. 2, 11.12,13.24
W-    '
          **" is?
     T.19N..R. 14 W.. F.M.
                                    % -ÿ%
     Sec. 19, 30. 31, 32




     T. 17 N„ R, 14 W.J.M,
     SiSCii. 1
                :%.%£>                   •      4_
     T. 17K.,R, 13 W..F.M.
     Sec, 6, 7, $, 17, 20, 21, 28, 33,34
                                                                       '

     .   <>C\
     T, 16 R. R, 13 W.,T.M.                                       =4* p,
     Sec. 3, 4, 10* 11 * 14, 15, 23,24, 25* 36

     I,:16N.,tRa2WÿM.e
      Sec. 31
       - "*% •••#*       •*
     T. 15 M..R. 12 W„F,M,
      360.6.7,17.18,20. 29,30,31
                                    -ÿ«*'    '-H*- *        •,.

     T,2iUUUt.ft.JeK
     See. 26 (CA Bench)



     T. 11N..R. 12W..FM.
     Sec. 1. 2, 12




                                                       A Part l -;3                                                   208
                      -sWt




                                           i|      •*
                             I!   !$ j   I 1 B*
V*&fe
                                           e ii a
        »
            S
                "*
t&-                               m                     I
IF                   a;                      21
                                                 £
                                             la, »      i
                                                        "SI
                                             §
                                             5.
                                             |

                                              i*




 209
                     EXHIBIT A -Part I

          TAPS Renewal Legal Descriptions
  Federal Grant of Right-of-Way F-12505 and AA-5847
T.4S..R.4E..F.M.
Sec. 2 NWW, NWSWV4, 3 NEW
                                                     ,v •*'
T. 10S..R. 10E..F.M.
Sec. 2 NEWSWW
Sec. 11 SWWSEWNEW, NEWSEW
USS 3293 A and B, Federal Reserve, Block 18 (in Section 24)
       Including federal reversionary interests in adjoining streets and alleys
USS 2626, Lot 2 (in Sec. 25, 26, 35)

T. 11 S„ R. 10E..F.M.
USS 2626, Lot 2 (in Sec. 2, 11)
Sec. 10, 11, 15, 22, 27 NWNWNV4, 34 NEWNWW, SV4NWV4

T. 12 S.. R. 10 E..F.M.
Sec. 3, 10
Sec. 15 SWWNWW, excluding Lot 20,
   NWV4SWW
Sec. 16, 21, 28, 32, 33

T. 13 S.. R. 10E..F.M.
Sec. 4, 9, 16, 20 SWW, 21
Sec. 28 and 29, those portions lying
    north of a line Vi mile north
    of the Richardson Highway
    (including C.S. Donnelly Dome)

F-12505 ENDS. AA-5847 BEGINS
T. 14 S.. R. 10 E.. F.M.
Sec. 5, 8. 17, 20, 29, 32

T. 15S..R.9E..F.M.
Sec. 27 (C.S. Nicole Knob)

T. 15S..R. 10 E.. F.M.
Sec. 6 SVi, 7, 18,19, 29, 30, 32

T. 16S..R. 10 E.. F.M.
Sec. 5, 8, 17, 20, 29, 32

T. 17 S..R. 10 E.. F.M.
Sec. 4,9,10, 14,15, 23,24, 25,36


                              APart 1-7                                      210
                      EXHIBIT A -Part I

          TAPS Renewal Legal Descriptions
  Federal Grant of Right-of-Way F-12505 and AA-5847

T. 18S..R. 10 E.. F.M.
Sec. 1, 12, 13,24, 25, 36

T. 19S..R. 10 E.. F.M.
Sec. 1, 12, 13

T. 19 S.. R. 11E.. F.M.
Sec. 18, 19, 20, 29, 32
Sec. 21 (C.S. Yost)

T. 22 S.. R. 12 E.. F.M.
Sec. 4, 9, 16, 21, 28, 29, 32


COPPER RIVER MERIDIAN

T. 14 N.. R. 1 W„ C.R.M.
Sec. 31

T. 13 N.. R. 1 W„ C.R.M.
Sec. 5, 6, 8, 17, 18, 20, 29, 32

T. 12 N.. R. 1 W„ C.R.M.
Sec. 5, 8, 17, 20, 29, 32, 33

T.11N..R. 1W„ C.R.M.
Sec. 4, 9, 16,21,28, 32, 33

T. 10 N.. R. 1 W„ C.R.M.
Sec. 5, 7, 8, 17, 18,20, 29,31,32

T. 9 N.. R. 1 W„ C.R.M.
Sec. 6, 7

T. 9 N.. R. 2 W„ C.R.M.
Sec. 12, 13
Sec. 23, Lot 6
Sec. 24
Sec. 25 NWWNWH
Sec. 26, 35

T. 8 N.. R. 2 W„ C.R.M.
Sec. 2, 11, 14, 23,24,25, 36


                                A Part I   -8         211
                                                         EXHIBIT A Parti
                                                         «                .. ...            .   .
              Federal QrantW:
                                                                                                •
                                                                                                    * AA-S84?
                                                                     f   -8   ;       •
                                                                                          * 4       * :.


          S>ec*. U 12» 13r 24*                               M
             'U* Vs * 1                           -
                                                                                  -
                                '

                                 *
          T.7N..R.1        CRM.
           Tract S within Sec, 6
           See. 35 NW&, those pomom east of
              the Richardson Midway (C,S. Gakona)
           *?>.' * Jj ” 1#ÿ*"**- ** •“*' *                                            1




     ••   176N..K. 2 W..C.R.M.


          Sac: 1. 12. 13, 24,25, 36
          OSS 10679, Lot 2 (ihSec. 25, 36}
              *.iAli
          TajsÿujL£m
                                                    .. -         '
                                                                         ' *ÿ'    !



:ÿ        Sec. 1,12, 13
          Sec, 24 N'ASM and Lo»43 and 44
          Sec, 25
          %                 ,                Tiipi—I
                                          *-:y :•ÿ'>•«




          Sec. 30 lot 2r lot 3, W0?Jk
          $&wr
          T.2 N..R. i W.. C.R.M.
          See. 3, 10,11,24,25

          Sec. 30 Lot 5
          Sec. 31 Lots 1, 2, 3, 4. S4SWU
          o   -   •*   oe           -jp      cpvx«ÿ          www



          Sec. 6 Lot 3. sp»WK, SBS
          •                 *></      •ÿ»ÿ       .. T




                                                                         >                                      212
                      EXHIBIT A - Part I

          TAPS Renewal Legal Descriptions
  Federal Grant of Right-of-Way F-12505 and AA-5847

T. 1 S.. R. 1 E.. C.R.M.
Sec. 3 Lot 4, SViNW'/i, E'/iSE'ÿSWU,
    SW/4SWV4SEV4
Sec. 4 Lot 1
Sec. 8 SE'/4 (C.S. Stuck)
Sec. 10, 14, 15
Sec. 23 excluding E'/iSW'/SNW'/iNEÿ
    and SÿSEÿSE'/i
Sec. 25 SWV4NWV4
Sec. 26 EViSE'/iNEVi, E’/zEÿEVi
Sec. 35 NE'/4

T. 2 S.. R. 1 E.. C.R.M.
Sec. 2 Lot 2, SWAXE'A, Lot 6,
    Lot 7, E'ASW/4
Sec. 11 WViNE»4NW'/4, Lot 2,
    Lot 4, W'/iSWW
Sec. 14 WVzNWV*
Sec. 15, 22, 27, 34

T. 3 S.. R. 1 E.. C.R.M.
Sec. 3 Lot 3
Sec. 4, 9,16,21,28,29, 32,33

T. 4 S.. R. 1 E., C.R.M.
Sec. 5, 8, 16, 17, 21, 22, 25, 26, 27, 36

T. 5 S.. R. 1 E.. C.R.M.      !

Sec. 1, 12, 13, 23, 24, 26, 27, 32, 33, 34

T.5S..R.2E..C.R.M.
Sec. 6, 7

T. 6 S.. R. 1 E.. C.R.M.
Sec. 5, 7,8,7, 18
Sec. 17 (C.S. Tiekel)

T. 6 S„ R. 1 W„ C.R.M.
Sec. 13, 24, 25

T. 6 S.. R. 1 E.. C.R.M.
Sec. 29, 30, 32




                                     -
                              A Part I 10             213
                     M£J»       ii'iwV*
                     EXHIBIT A- Pari 1

              TAPS Renewal Legal
     Federal Grant of Righl-of-'
                                   *
                                           .        aa«.
 c           Hs1*
               "&S
 5ÿ13,23. 24,26, 27,34
 See.SSNBÿlQS.lsaiM)
     ''




 y              -
                            ;



 AA-5847ENDS
Vÿlrinr.




                                * + **         «
                                A Part I   -   it          214
                             EXHIBIT A Part I

                 TAPS Renewal Legal Descriptions
         Federal Grant of Right-of-Way F-12505 and AA-5847
The following lands have been the subject of conveyances from the United States to the
State of Alaska since May 3, 1974:

       Umiat Meridian

       T. 1 N.. R. 15 E.. U.M.
       Sec. 6,7,18, 19

       T. 1 N.. R. 14 E.. U.M.
       Sec. 12, 13

       T. 1 N.. R. 14 E.. U.M.
       Sec. 24, 25, 26, 34, 35

       T. 1 S..R. 14 E.. U.M.
       Sec. 1, 14, 15 S‘A, 22,23, 27,34

       T. 2 S.. R. 14 E.. U.M.
       Sec. 3, 4, 9, 10,16,21,28,32, 33

       T.3S.. R. 14 E..U.M.
       Sec. 4, 8, 9, 16, 17, 20, 29, 32

       T.4S.. R. 13E..U.M.
       Sec. 2 SW'/*, 11 NW'/4

       T. 4 S.. R. 14 E.. U.M,
       Sec. 5,7,8,17,18,20, 29, 32

       T. 5 S.. R. 14 E.. U.M.
       Sec. 4,5,8, 16, 17,21,28, 29, 32

       T.6S..R. 14 E.. U.M.
       Sec. 5,6, 7,18, 19, 30,31,32

       T. 7 S.. R. 14 E.. U.M.
       Sec. 5,8,9, 16, 17,21,28, 29, 32

       T. 8 S„ R. 13 E.. U.M.
       Sec. 12, 13, 14, 16 SWV*, 17 SEV4, 23, 26, 27, 28, 32, 33

       T.8S..R. 14E..U.M.
       Sec. 5, 6, 7


                                     A Part 1-12                              215
                                           a* t - ..*»
                                      EXHIBIT A Part I    -
                                                 ,,       ,,   *ÿ*
                                                                     *



        Sec.«
%           u*    •
                      rs*   *   *ÿ?
        Fairbanks Meridian
    •e?*r                  S -3\rx
        T. 29N..R. 12 W, F.M.
        Sec, 23,26, 35

                 ima                       71,   •'   '

                 18,15.16,21 rad 2ft <


    t" T p >j     R;nW,FM.
    ’                  -               *
        4
J-
          OHW                         River
        Sec. 19, 2                     34,35
                                       Sy,
        T. 11N..R: 10W,>F.M,
        See, 1.2.12


        See.   7,8,15,ÿ47ÿ M25, 26
«#      e*L ..* ;                             .v
        T.11Q, 8 W.. F,M.
        Sac. 30,3ÿ32



                      ..
                R w 1;.M
        Sec 18.19, 20, 28, 29, 33
        T.»N„ R. 7W.. FM.
        Sec. 2, 3, 4.11,13.14,24

        Sec. 19,30, 31, 32




                                                                         216
                                                            .                   *        tM
                                                    EXHIBIT A -Part I
                                            w-          \               4
             4ÿ                 TAPS Renewal Erg
         u            V.        -H-V"       **“*>       «       <•
                                                                         JW '            WTOBP5F5W
                                                                                                Ss
         T, 9 N., R, 5 W„ F.ML
         Sec. 24 SE*4
        JV*.4 '<*.* t
         T.8K.R.6W..F.M.
         Sec. $, SA 9, 15* 16, 22, 23, 24, 25
                                                                           y&(K




         Sfic,30,3I,32
         M-»-                     ft




    *>
        »»«>
        *•
          . ~v   .

    i
         Sec. 30, 3 L 32
    MJS£ÿSL JCT   vzi                       -       »
                                                    fet
                                                            X


         T.6N..R. 4W..F.M
         Sec. 5, 8,9, i5, 16, 22, 23, 25, 26, 36

         T.6N..R.3W..F.M.
                                        'A*
i

        His
                                                                     ..oMBf.
                                                                     6Sj.V*              «
                                                                                                     at
                                                                                         M    *
                                                                            [
                                                                                              '5f:
                 Recreation
                     > ‘7i*sc          3P


         T.4N.. R. 3 W..P.M.
                                                                       •W*..
         See. 3, 10
         See-, R west of theBUWHiglway
         Sec. 13 south of the Elliott Highway
                                                %
                                                *S
                                                        :.S



         .Setal                                     r.„l
        B!                                  ’

                                            •w
                                              =r •*»•                s «    •
                                                                                    •:
                                                                                         £



                                                                4§»ÿf                                     217
                     EXHIBIT A - Part I

          TAPS Renewal Legal Descriptions
  Federal Grant of Right-of-Way F-12505 and AA-5847
Copper River Meridian

T. 13N..R. 1 W..C.R.M.
Sec. 29, 32

T, 12N..R. 1   W..C.R.M.
Sec. 24 SEV*

T. 4 S.. R. 2 E.. C.R.M.
Tract A (those portions
    comprising Sec. 15
    and 22)
Tract A (those portions
    comprising Sec. 28)

T.8S..R.2W..C.R.M.
Tract A (those portions comprising
   Sec. 1,2, 3,4, 7, 8, 9)

T. 8 S.. R. 3 W„ C.R.M.
Tract B (those portions comprising
    Sec. 12, 13, 14, 22, 23, 27,34)




                                      -
                            A Part I 15               218
                                                      EXHIBIT A -Part II
                                                             *"         y»~ V
                                             TAPS Renewal Legal Descriptions
                                     ?» Federal Grant of Right-of-Way, Related Facilities
...                              t                                 V'-r _*•’A? "         =.
Those rights covered riy t$m ri$m,<sf-my described in the grants retevcedbekwv:

ACCESS ROAD' A/K/A                                            SERIAL        Al&                TOWNSHIP RAN6E> MER,
    y
    •<*
             ACCESS
               'V
                     ROAD
                                              +
                                                              MEMBER SMV                       SECTIONS
           \       I                      i                   *
                                                                  *$£*" *            !


                                                              rf4ÿ?r •»                        T. I6S.. R, 10 F„. U.M.


107-APL-2A                                                    F-6464?       34                 T. 36#.. R..10W..EM,-
    A-         '«**ÿ•ÿ               %'                                                        Sec. 33

106-APL-28                                                    864646        35                 T:3SK.:R.IOW.,PM.
                         '
          "«
                                              106-AH2AMS.2B
                                              4,
                                                                                               S«. i6
                                                                                                +*                                •
96~APL*3                                                      864645        45                 T,22S.. R. I3 W.. RM.                                      ;ÿ

     -m|                                                                                       Sec. 26
85-APL-3                                                      864644        56                 iam.aj4w..BM,


78-APL-iA                                                     F-64643       63
                                                                                               Sec. 23
                                                                                                          ,XT
                                                                                                                      _                   .

  *r•v'
                             V                                                                '•SOCe?                ""


           KW,JtX
95-APL-4A                                                     822478        46                 T 26N., R ;|
                                                                                               Sec.26'                    J
1I6-APL6                                                      822386        23
#wK **                       £v
                                                                                               Sec. 19
-              -Jr - Jj                                                                  ‘                                    »       y            -=%
                                                                                          :
                                                                                              ***                    /gf                  *>-.

91-Aft.- IB                                                   F42365        50                 T. 23 N..R. 14 W..F.M.
                                                                  0T                           Sec. 19.30
                                                                                                •ÿ
                                                                                                      *&*..' >s, _ÿ«              4m          ..     «=
97-APt-S                                                      821263        44                 T. 28N'..R I? W F M.
                                                                                               Sec. 32
                         f                               t
                                              39-APL/AMS-4    82175?        103                Tl6S..B,.i,0E..EAt
                                                     W
                                               -**
                                                                                               Sec 32

38-APL4A                                                      821756        105
                                                                                              afÿ -N             .
                                                                                               T, 17S..R. 10 E,. EM.
                                                                                                                     * *           * -v
                                                                                                                                              *
                                                                                               Sec. 25
                                                                            -TV#
$dÿAPL-3                                                      F-2I740       85                 T.2.S..R. 3E-F.M.
                                                                                 m             Sec. 34, 33
                                                                                                     C.      >       ** *
                                                                                                     'ISir           1
                                                                                                                                              219
                                                                EXHIBIT
                                                                  '--•Miv
                                                                          A•' Part
                                                                               * *•
                                                                                   II
                                                                                 •<ÿ       -
                                           TAPS Renewal Legal Descriptions
                                      Federal ©rant ofRigW-of-Way, Related Facilities
ACCESS ROAD A/K/A
                                  "    *. —r- 7   ~             -
                                                                |y
                                                                            SERIAL ALG.
                                                                                                       f"*<       * *,*ÿ•*•* "j)

                                                                                                                              TOWNSHIP. RANGE, ME8.
                                                                                                                                          :               '



   ’ivFHF
            ACCESSROAD                                                      NUMBER SHT.                                       SECTIONS
                          y
                              -                                                                 A     **j|                    5=0.2.11.12,13
                                                                                                                                                                ¥
56*AH>3
   <#>


                  ft
                      r
                                                                            F-21740
                                                                                  i        3
                                                                                                      85.

                                                                                                     *28
                                                                                                                  '*’|£ppfp                                     —
MT-AH.aA                                                                    F-22727                                                i

                                                                                                                              3Mjrf "ÿÿ'ÿw
                                                                                                                                                                          '       '


                                                                                                                  <   .




91-APL-3                               91-APUAMS-3                          F-21693
                                                                                                                              g“»
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109-APl-IA                                                                  F-21653                  32                       TJP.5...R .11 E.».yAL
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                                                                             A Psrl II 2                                                                                  220
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                                                                              M                 Wf
                                                      -
                                        EXHIBIT A Part II
                       TAPS Renewal Legal Descriptions
                  Federal Grant of Right-Of-Way, Related Facilities
ACCESS ROAD A/K/A                          SERIAL ALGL                TOWNSHIP, RANGE, MER.
                       ACCESS ROAD         NUMBER SHT.                SECTIONS
I 10-APL-IB                                P-21517 31                 T. 15S.. R. H B.. C M.

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                                                                      Sec* 26

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                                                       EXHIBIT
                                                        * -r
                                                               A ~ Part if
                                                  *-              v
                TAPS Renewal legal Descriptions
           Federal Grant of Right-of-Way, Related Facilities
           -<*                           ; i V-ÿ-""
                     ** )         '*> *               fjt                                                                   '




ACCESS ROAD A/»A              SERIAL    ALC.       TOWNSHIP. RANGE. MER.
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                                                                          *P“II-4                                                                                  222
   ................
                                                    * r*            >    *«r

                                                   EXHfBiT A - Part II


          ......
                               4*ÿ                 r'                               *       i    >
                                                                                                        VÿA» &
                            TAPS Renewal Legal Descriptions
                       Federal Grant of HighMf-Way, Belated Facilities
   .          - .
ACCESS ROAD .VK/A
 110-APL-2
                  A.           >»
                        ACCESS ROAD
                                              -•
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                                                                SERIAL
                                                                NTMBER SOT.
                                                                F-207I3 30
                                                                                            '   i'r.
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                                                                                                            *'   •   a4/*
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                                                                                                                          SECTIONS
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                                                                                                                                                                        __ _ _                                   •&



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                                                                                                                          sec.s                                                  Or.
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107-APL-3                                                                                        34
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                                                                *V
                                                                        A Part I! 5     -                                                                                                       223
                                 EXHIBIT A -Part II
                      TAPS Renewal Legal Descriptions
                 Federal Grant of RighFof-Way, Related Facilities
ACCESS ROAD A/K/A                         SERIAL ALG.                              TOWNSHIP. RANGE, MER.


                                                 .....-
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93-APL-2          mmMm                    F-0645                  48               T-24N.. R. 13 W„ F.M.
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92.APLr6          92.APUAMS-6            *-20642                  49
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                                               A?*nn-«.                                                        224
                                                                :




                                                                EXHIBIT A Part II        -
                        TAPS Renewal Legal Descriptions
                   Federal Grantof Right-of-Way, Related Facilities
                   v l * **'* :
                  "*
    ACCESS ROAQ A/K/A
                                                                    9

                                                                        SERIAL  AEG.                 TOWiSSHIF* RANGE, MER.
                             ACCESS ROAD                                NtMBER SHT.                  SECTIONS
    M-AFL4                                                              P-20640 49                   T.24N.. R- 14 W.. F.M.
                                                                                                     Sec- 26
                                                                                                     rv!ÿ'
    92-APIÿ                  92-APUAMS-Z                                F-20638              49      T. 24N.R 14 W PM
                                                                                                     Sec. 34
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                                                                            APwitI~7                                                    225
                           EXHIBIT A - Part II
                TAPS Renewal Legal Descriptions
           Federal Grant of Right-of-Way, Related Facilities

ACCESS ROAD A/K/A              SERIAL          ALG.   TOWNSHIP, RANGE, MER.
            ACCESS ROAD        NUMBER          SHT.   SECTIONS
84-APL-2                       F-20611         57     T. 17 N.. R. 13 W„ F.M.
                                                      Sec. 28

84-APL-l                       F-20610         57     T. 17 N.. R. 13 W„ F.M.
                                                      Sec. 28

83-APL-3    83-APUAMS-3        F-20609         58     T. 16 N.. R. 13 W.. F.M.
                                                      Sec. 4

83-APL-2    83-APL/AMS-2       F-20608         58     T. 16N..R. 13 W.. F.M.
                                                      Sec. 14

82-APL-2    82-APIVAMS-2       F-20606         59     T. 15 N.. R. 12 W„ F.M.
                                                      Sec. 7

81-APL-4                       F-20605         60     T. 15N..R. 12 W„ F.M.
                                                      Sec. 29


81-APL-3    81-APL/AMS-3       F-20604         60     T. 15 N.. R. 12 W.. F.M.
                                                      Sec. 31

80-APL-2                       F-20600         61     T. 14N..R. 12 W.. F.M.
                                                      Sec. 34

79-APL-3                       F-20598         62     T. 13 N.. R. 12W. F.M.
                                                      Sec. 12

79-APL-2    79-APL/AMS-2       F-20597         62     T. 13N..R. 11 W.. F.M.
                                                      Sec. 17, 18

79-APL-l    79-APL/AMS-l       F-20596         62     T. 13 N., R. 11 W- F.M.
                                                      Sec. 22

78-APL-3    78-APL/AMS-3       F-20595         63     T. 13 N.ÿR. 11 W-. F.M.
                                                      Sec. 36

78-APL-l                       F-20594         63     T. 12N..R. 11 W-. F.M.
                                                      Sec. 1



                                A Part II -8                              226
                                          v
                                          |'                                      .
                                   .
                                          EXHIBIT A Part,- 1)
                                          yrJI   3 Wly C   y
                                                                   -
                                                                   tT                 j




                               TAPS Renewal Legal Descriptions
                          Federal Gram of Righf-pf-Way, Related Facilities
                            L {€.-'«*
         AD AM
ACCESS ROAD A2K/A                                SERIAL ALC.                              TOWNSHIP, RANGE, MER.
            ACCESS ROAD                          mpiRR/ SHT.
                                                                                          SECTIONSÿ
62-APL-l
                                                                                          Sec. 3 those pontons withio
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•|g*            If.
                                                                                              claims
  « -m      *   L                                                       ~ •*
45-AEW                                           &m$7                   97                T, iO SR. 10 E.. P.M.
                                                                              m           Sec. 26
44-APL-T A                                       F-20554                98                T.ltS~R.-lQ-g.JEM,
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44-APL-3                                         F40553.                98                T ii s:,R/idR.
                                                                                          Sec. 33. 34

40-APL-4                   40-APUAMS-4           P-20545                102
                                                                                          Sec. 19      '




                                                                                                             ...
40~AFLi                    40-APL/AMS'I          F-20542                m                                              .


                                                                                          Sec. 5
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3P-APL-?                                         F-20341                103
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37-APL4                                          F-20526                105               T. 17 3.. R. IQE.PM.
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                                                                                                                           227
                                EXHIBIT A - Part II

                     TAPS Renewal Legal Descriptions
                Federal Grant of Right-of-Way, Related Facilities
ACCESS ROAD A/K/A                   SERIAL            ALG.   TOWNSHIP, RANGE, MER.
                 ACCESS ROAD        NUMBER            SHT.   SECTIONS
108-APL-5                           F-88485           33     T. 16S..R. 10E..U.M.
                                                             Sec. 36

108-APL-1A                          F-88223           33     T. 37 N,. R. 10W..F.M.
                                                             Sec. 25

Pipeline Mile Post 102-APL-2A       F-88222           39     T.31N..R.   IQW..F.M.
("PLMP") 216.3                                               Sec. 18

Atigun Boat Ramp 114-APIVAMS-2C     F-88221           26     T. 11 S.. R. 12 E.. U.M.
                                                             Sec. 32
104-APL-0                           F-88220           37     T. 33 N.. R. 10W..F.M.
                                                             Sec. 35

86-APL-4B                           F-88219           55     T. 19 N.. R. 14 W.. F.M.
                                                             Sec. 30

104-APL-l                           F-88218           37     T. 33 N„ R. 10 W.. F.M.
                                                             Sec. 35

113-APIVAMS-2 113-APL-2             F-88197           27     T. 12 S.. R. 12 E.. U.M.
                                                             Sec. 28

112-AMS-2        112-APL-2          F-88195           29     T. 13S..R. 12 E.. U.M.
                                                             Sec. 28

108-APL-l                           F-88194           33     T. 36N..R. 10 W.. F.M.
                                                             Sec. 3

11 2-APL-4B                         F-88193           28     T. 1?S..R. 12 E.. U.M.
                                                             Sec. 9

107-APL/AMS-4                       F-88192           34     T. 3ft N..R. 10 W.. F.M.
                                                             Sec. 21

103-APL-3A                          F-88191           38     T. 3?N..R. 10 W.. F.M.
                                                             Sec. 9

102-APL-3A       102-AMS-3A         F-88190           40     T. 3}N.. R. 10W.. F.M.
                                                             Sec. 18


                                     A Part II - 10                               228
                                                                            .....
                                                  EXHIBIT A- Part II
                                                           vr
                                                         d*Yr:u~   *'
                                         TAPS Renewal Legal Descriptions
                                    Federal Grant of Right-oi-Way, Related Facilities
                           ,
 ACCESS HOAD A/KM                                                  SERI AL ALG.                      TOWNSHIP, RANGE, Mlfifc
             ACCESS ROAD
                    .
                                                                   NUMBER SHT.                       SECTIONS
                                                                                                -f   !
                                                                                                          *4ÿ   4,



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                                                                                                     t70;.1Ltm



 deafer                                                            AA-37B9* 105                                                    4
                                                   ,t.                                          w                        ,   . v.
 w-mj,xm4                                    APL-3                 AA-1II85 116
                                                                                                     Sec. 29



                                                                       AP«nU-l! ,                                             229
                                EXHIBIT A -Part II

                     TAPS Renewal Legal Descriptions
                Federal Grant of Right-of-Way, Related Facilities
ACCESS ROAD A/K/A                   SERIAL         ALG.    TOWNSHIP, RANGE, MER.
            ACCESS ROAD             NUMBER         SHT.    SECTIONS
9-APL-3A                            AA-9602        135     T.7S..R. 1 W..C.R.M.
                                                           Sec. 24

8-APL-                              AA-9589        136     T. 8S..R. 1 W..C.R.M.
                                                           Sec. 6

35-APL-6         35-APL/AMS-6       AA-9213        107     T. 19S..R. 11 E..F.M.
                                                           Sec. 28, 29

29-APL-l                            AA-9198        114     T. 11 N..R. 1 W„ C.R.M.
                                                           Sec. 16, 21

23-APL-1A                           AA-9189        120     T. 6 N.. R. 1 W.. C.R.M.
                                                           Sec. 27, 28, 29, 30

23-APL-1A                           AA-9189        120     T. 6 N.. R. 2 W.. C.R.M.
                                                           Sec. 25

19-APL-3                            AA-9166        125     T. 2 N.. R. 1 W.. C.R.M
                                                           Sec. 12

31-APL-3                            AA-8871        Ill &   T. 13 N.. R. 1 W„ C.R.M.
                                                   112     Sec. 6

31-APL-3                            AA-8871        Ill &   T. 13 N.. R. 2 W.. C.R.M.
                                                   112     Sec. 1

31-APL-3                            AA-8871        111 &   T. 14N..R. 1 W„ C.R.M.
                                                   112     Sec. 31

30-APL-l                            AA-8870        113     T. 12N..R. lW.. C.R.M.
                                                           Sec. 7, 8

26-APL/ AMR-3    26-APL-3           AA-8867        117     T. 9 N.. R. 2 W.. C.R.M,
                                                           Sec. 23, 24, 25

26-APL-2         26-APL/AMS-2       AA-8866        117     T.9N..R. 2 W..C.R.M.
                                                           Sec. 26, 35

22- APL- 1                          AA-8863        122     T.5N..R.2W..C.RM
                                                           Sec. 36


                                     APart n- 12                               230
                                       EXHIBIT A -Part H
                              I*tJ    a-Ta&v .’ >       •,.sgfe-.-v   -
                                                                                * ' ..
                          TAPS Renewal Legal Descriptions
                     Federal Grant of RigM-of-Way, Related Facilities
     ,       -S-ÿ,
ACCESS ROAD AIK/A
                     H4-.J   .*   *’ *'ÿ-   ~.S«
                                             SERIAL
                                                        'V- *’
                                                         ALG.                   TOVfflSHIP, RANGE, MER.
                                                                                                              ...                     -
                       ACCESS ROAD           MEMBER SHE                         SECTIONS
20-APE1                                                 >m
                                                        ~    ,"v
                                                                                                          mmt..:
                                                                                                             :4                   >



3%APL~2                                      AA-S857     105
                                                                                     12
                                                                                Sec.f;:                                  «*..
                                                                                    *             .
                                                                                                               A




37-AEL-l                                     AA-8S55     105                T. 18S.R.10H..F.M.
                                                                           a*                         -

                                                                            $ec-24
                                                               -<*S
                                                                                                                   j,-

                                                                                                                          K*
36A,APÿI.                                    AA-8S54     106                    ;

                                             Ap  a*      -*»
                                                                                                  v
36-APE1A                                     AA-8853     107
31-APL-l                                     AArSSSl     112
                                                               4                Sec. 19, 30

28-APE.C                                     AA.8S40V     IIS
                                              j$    * Y        *

                                                                      "*
                                                                            P           'r   s*                           £ /*-
28-APE1                .28,AK/ANES:a:        Stol-884S: 115                     y. HR: R. I w„ C.RM,

19-APEl,                                     AA-8845     :IS;;                  TIN R IP CRM.
                                                                                                          '

                                                                                Sec. 30
                                             „ ,T   V          if
                                             AA-8845     125
                                                                                Sec. 25
I’
                                               * .'      ••''                                * r«
17-APLT                                      AA-8845 127                        T.1S..R. IE..C.R7A
    ETV«                                                                        Sec, 3                         alww-jm,




17ÿAPI>S                                     AA-8842     127
             %)!                            “V                                  Scc.10


 17-AHAs                                      AA-8840     I28                   XlS.,R,iB.,c,te
*        »   «                                                                  Sec; 25




                                               AIW»-l|   '                                                               231
                          EXHIBIT A - Part II

                TAPS Renewal Legal Descriptions
           Federal Grant of Right-of-Way, Related Facilities
ACCESS ROAD A/K/A             SERIAL           ALG.    TOWNSHIP, RAiNGE, MER.
            ACCESS ROAD       NUMBER           SHT.    SECTIONS
12-APL-l                      AA-8829          132     T. 5 S.. R. 1 E.. C.'R.M.
                                                       Sec. 26, 27

11-APL-l                      AA-8827          133     T.6S..R. 1 E.. CiR.M.
                                                       Sec. 8

10-APL-3                      AA-8825          134     T.6S..R. IE. CiR.M.
                                                       Sec. 19

10-APL-3                      AA-8825          134     T. 6 S„ R. 1 W.. Cÿ.R.M.
                                                       Sec. 24

9-APL-4     9-APL/AMS-4       AA-8822          135     T. 7S..R. 1E..C.R.M
                                                       Sec. 8

9-APL-2                       AA-8820          135     T.7S..R. 1 W.      .R.M
                                                       Sec. 26

8-APL-2                       AA-8817          135 &   T.7S..R. 1 W     C.R.M
                                               136     Sec. 34




                               A Part II -14
                                                                            232
                                   EXHIBIT A           Part II

                      TAPS Renewal Legal Descriptions
                 Federal Grant of Right-of-Way, Related Facilities

Those rights covered by the rights-of-way described in the grants referenced below, which have
been the subject of conveyances from the United States to die State of Alaska since May 3, 1974:

ACCESS ROAD           A/K/A ACCESS         SERIAL            ALG. TOWNSHIP, RANGE,
                      ROAD                 NUMBER            SHT. MER. SECTIONS

77-APL-2                                   ADL415247         64     T. 12N..R. 10W.JF.M.
                                           F-20592                  Sec. 19        I

77-APL-l                                   ADL 415246        64     T. 12N..R. 10W.fF.M.
                                           F-20591                  Sec. 35

77-APL-l                                   ADL 415246        64     T. 11N..R. 10W..4 F.M
                                           F-20591                  Sec. 2

75-APL-2                                   ADL 415138        66     T. 11N..R.8W..F.M.
                                           F-20587                  Sec. 31       i



74-APL-5                                   ADL 415137        67     T. 10 N.. R. 8 W.. jF.M.
                                           F-20585                  Sec. 4

74-APL-3A            74-APL/AMS-3A         ADL 415136        67     T. 10N..R. 8 W..IF.M.
                                           F-21692                  Sec. 10,11       I
73-APL-l                                   ADL 415135        68     T. 10N..R.7W.JF.M
                                           F-20580                  Sec. 29, 30

128-APL-l                                  ADL 415108        11     T. 1 N.. R. 15 E.. tJ.M.
                                           F-86446                  Sec. 7              I


127-APL-3            127-AMS-3&4A          ADL 415107
                                           F-87269
                                                             12     T. 1 N..R. 14 E..
                                                                    Sec. 24             P .M.


127-APL-3            127-AMS-3&4A          ADL415107                T. 1N..R. 15 E.. U.M.
                                           F-87269                  Sec. 19

127-APL-2                                  ADL 415106        12     T. 1 N..R. 14 E.. IU.M.
                                           F-87320                  Sec. 26


126-APL/AMS-1A                             ADL 415105
                                           F-87249
                                                             13     T. 1 S..R. 14 E..
                                                                    Sec. 34
                                                                                        |U.M.


                                          A Pm II   - 15                                    233
                              EXHIBIT A        Part II

                     TAPS Renewal Legal Descriptions
                Federal Grant of Right-of-Way, Related Facilities
ACCESS ROAD        A/K/A ACCESS      SERIAL          ALG. TOWNSHIP, RANGE,
                   ROAD              NUMBER          SHT. MER. SECTIONS
126-APL-l          126-APL/AMS-l     ADL415104       13   T. 1 S.. R. 14 E.. U.M.
                                     F-20733              Sec. 34

125-APL-4          125-APL/AMS-4     ADL 415103      14       T.2S..R. 14E..U.M.
                                     F-20732                  Sec. 9, 10

125-APL-3          125-APL/AMS-3     .ADL 415102     14       T.2S..R. 14E..U.M.
                                     F-20731                  Sec. 21

125-APL/AMS-2                        ADL 415101      14
                                     F-87382                  Sec. 28

125-APL-l          125-APL/AMS-l     ADL 415100      14       T. 2 S.. R. 14 E., |J.M.
                                     F-87268                  Sec. 32, 33         I



123-APL-2          123-APL/AMS-2     ADL 415099      16       T.4S.. R. 14 E.. U.M.
                                     F-20728                  Sec. 17, 18

122-APL-5A                           ADL 415098      17       T. 5 S.. R. 14 E.. U.M.
                                     F-22960                  Sec. 4

122-APL-5                            ADL 415097      17       T. 5 S„ R. 14 E.. U.M.
                                     F-22959                  Sec. 4, 5

122-AMS-3          1 22-AMS-3A       ADL 415096      17       T. 5 S.. R. 14 E.. U.M.
                                     F-87383                  Sec. 9, 16

122-APL-3                            ADL 415095      17       T. 5 S.. R. 14 E.. U.M.
                                     F-21632                  Sec. 16            .
122-APL/AMS-l                        ADL 415094      18       T. 5 S.. R. 14 E.. p.M.
                                     F-87251                  Sec. 32

122-APL/AMS-l                        ADL 415094      18       T.6S..R. 14 E., U.M.
                                     F-87251                  Sec. 5

121-APL-5                            ADL 415093      18       T.6S., R. 14 E.. U.M.
                                     F-21588                  Sec. 5, 6         i

121-AMS-3                            ADL 415092          18   T.6S.. R. 14E..TJ.M.
                                     F-87219                  Sec. 17


                                    A Part H - 16
                                                                                    234
                                                ' A '4: \ A. v$|*.
                                           x-
                                                 EXHIBIT A Part II
                                                 t*.                ,%
                                                                      -    *               4             *
                                  TAPS Renewal Legal Descriptions
                             Federal Grant of Right-of-Way. Related Facilities
                                                                                                                               r                .
    ACCESS ROAD                 A/K/A ACCESS               SERIAL                              ALG,           TOWNSHIP BANGE,
                                ROAD                       NUMBER                              SHT. MER. SECTIONS                                              '




     c
         ’** V                                              '   4Pr                                           .«•        i,.

    litAPfetA                                              ADL41509I                                         T.6S..R 14E.U.M.
           %
    V        ;
                        -                                  F-21587

    12UAPM                      I2I-APL/AMS-               ADL 4)5090                          19

•
      iC*
    12DAFSB »
                                   9 9                 !
                                                           P-20721
                                                                I
                                                                At?- . ±1
                                                           .ADL 415089
                                                                                w
                                                                                               19
                                                                                                     -
                                                                                                             See. 32
                                                                                                             E5Tt»»J
                                                                                                              T.7S..K. 14&.U.M,
                                                                                                                                                    ...-   .



                                                           ES7218                                            Sec. 16

    120.AMS-2B                                              .ADL 415088                        19            T. TS..R, 14 E„ U.M.
    t        * -   **
                                                           F«35                                              See. 4, 5
                                                                                                                 -
    120- AMS 1A                                             ADL 415087                         19
                                                           F-87217
         H                                                                                                   s       ,   a>    it       .



    119A-APL-3                                             ADL4150S6                           20. 21
                                                           F-21537              '




    119-AN.-1                                               ADL 41508$              -
                                                                                               21            T.8&.R. BE.J
                                                           P-64649                                           Sep, 27                ;       "




    99.APL-0                    99-APL-l                   APL 41-084                          42
                                                           F-88246                                           Sec. 23
                                                           A    K     ‘
                                                                          Vj?           yÿ;;                                                    %
                                                                                                                                                               V
    98-A3>t-4A
         «fOj{m         k.
                                                           AW«»83 43
                                                           P-21619-'                       '*                Sec. 35
                                                                                               -I
                                                                                                                 *:£v>
    98-APL-4                                               ADL 415082                          43                                                                  i   •




                                                           F-20661                             wjc
                                                                                                             $m.                                v    "
                                                                                                                                                               "




    98-APL-l                                                ADL4I508J -43,44 T.?81S.„R,)2 WÿFM.
                                                            P-21625.         Sec. 20, 21

    78-APL-G                                                ADL 415080                         64            T. 12N..R. 11 W..F.M.
                                                            F- 22363

    76-APL-JA                                               ADL 413423                         65             T. 1 1 N,» R. 9 W.% EM.
                                                           E20390-                                            Sec- 16




                                                           A Finn -17                                                                                      235
                                              EXHIBIT A -Part II
                                 *       * *    •




ACCESS ROAD
                             ~ Grant oi
                        Federal
                                     *
                           A/K/A ACCESS
                                         /.....
                             TAPS Renewal legal Descriptions
                                        Right-of-way. Related Facilities
                                            4k  5
                                                 *>y   *

                                                     SERIAL
                                                               '*ÿ•', ,.<ÿ        »..(•


                                                                             ALG. TOWA'SHIP, RANGE.
                           ROAD                      NUMBER                  SOT. MER. SECTIONS
75-APL3                    75-API7AMS-3              ADL 413422              86   T. 11 N- R. 9 W..F.M.
                                                     F-20588                      Sec. 25, 26
74APL-2                                              ADL 413421              6?           T I0i4.,'B..8W.,FliA
                                                     W82                                  Sean;

w*m*                                                 ADL 413420
                                                     E-2(B?9
                                                                             70           T. 8     R. 6 W„ F.M.
                                                                                          Sec. 5. 8. 7
7I.APL-1                                                ADL 413419           70           T.8N.R.6W..F.M.
                                                       F-20578                            Sec; 9. 16
•H           ,*             •+           >•
                                                    . . -y ,
                                                           i(f       ••   •*-                      & •** -

70-APL-lM                  70-APL-I                  ADL 413418              Tl           T.8N..R.6W..F.M.
                  '<•
                                                     F-21544                              Sec. 25

69-APL.l

                                                                                                            —
                                                     ADL413417-              73
                                                                                          Seÿttv 12,14, 15* 2U
                                                        J                                 22,28.29,30

69-ARL-l                                             ADL 413417              73           T,7N.,RJW„F.M.
                                                     P-20577                              Sec, 7

                                                     ADL 413416              74           T.6N.. R.3W.. F.M.
                                                     F-2Q573                              Sec, 32
                                                     / %                                              •: ft . i
67-APL-l
 '
                                                     ADL 413416              74           T, 5 N- R. 3 W„ F.M.
     6
         *                                           F-20573                              See. 5.6

w                                                    ADL 413415
                                                     F- 20572
                                                                             75           T.5N..R.3W..F.M.
                                                                                          Sec. 22

66-APL-l                                             ADL 413414           75
                                                     P40571                               Sec, 34

6S-APL-3                                                                     76
<** V
<*F
       '
    «*««
                                                     F-20570                              5«. 2, 3 ;    .

65-AFL-l                                             ADL 413412              76
                                                     P-20569                              Sec.'13,.14



                                                                                                             236
                          EXHIBIT A -Part II

                TAPS Renewal Legal Descriptions
           Federal Grant of Right-of-Way, Related Facilities

ACCESS ROAD   A/K/A ACCESS      SERIAL          ALG. TOWNSHIP, RANGE,
              ROAD              NUMBER          SHT. MER. SECTIONS
64-APL-2                        ADL 413411      77   T. 4 N.. R. 2 W.. F.M.
                                F-20568              Sec. 22, 26, 27, 33, 34

67-APL-5      67-APL-5C         ADL 403074      74   T. 6 N.. R. 4 W.. F.M.
                                F-20576              Sec. 23




                               A Part II - 19                             237
                                     EXHIBIT A         Part I!

                      TAPS Renewal Legal Descriptions
                 Federal Grant of Right-of-Way, Related Facilities
Those lands within the TAPS fuel gas pipeline right-of-way described in Plat 2001-2 (Fuel Gas
Line Monumentation Survey) filed January 10, 2001 in the Barrow Recording District,
                            I

And further described in the TAPS Right-of-Way Boundary Description Report, Alyeska Manual
No. ROW 214, as amended,

And as further described in the following land parcel descriptions:

       PARCEL DESCRIPTION

       UMIAT MERIDIAN

       T.9S„   R. 13 E.. U.M.
       Sec. 3, 4, 5, 7, 8

       T. 9 S- R. 12 E.. U.M.
       Sec. 12, 13, 14, 15, 19,20,21,22

       T.9S..R. 11E.. U.M.
       Sec. 22, 23, 24, 27, 28, 33

       T. 10S..R. 11 E.. U.M.
       Sec. 3,4, 10,14, 15,23, 26,35

       T. 11 S..R. 11 E.. U.M.
       Sec. 2,11,12, 13,24




                                           A Part II - 20                             238
                                     EXHIBIT A -Part II

                      TAPS Renewal Legal Descriptions
                 Federal Grant of Right-of-Way, Related Facilities

Those lands within the TAPS fuel gas pipeline right-of-way described in Plat 2001-2 (Fuel Gas
Line Monumentation Survey) filed January 10, 2001 in the Banow Recording District,

And further described in the TAPS Right-of-Way Boundary Description Report, Alyeska
Manual No. ROW 214, as amended,

As it pertains to the following lands that have been the subject of conveyances from the United
States to the State of Alaska since May 3, 1974:

       PARCEL DESCRIPTION

       Umiat Meridian

       T. 1 N.. R. 15 E.. U.M.
       Sec. 6, 7

       T. 1 N.. R. 14 E.. U.M.
       Sec. 11, 12, 14, 15, 21, 22, 28, 32, 33

       T. 1 S.. R. 14 E.. U.M.
       Sec. 3,4, 9, 16,21,22, 27,34

       T. 2 S.. R. 14 E- U.M.
       Sec. 3, 4,9, 16,21,28, 32, 33

       T.3S..R. 14 E.. U.M.
       Sec. 5, 7,8,18, 19, 30,31

       T.4S.. R. 14 E.. U.M.
       Sec. 6, 7, 17, 18, 19, 20, 29, 30, 31, 32

       T.5S.. R. 14 E.. U.M.
       Sec. 4, 5,8, 16,17,21,28, 29, 32

       T. 6 S.. R. 14 E.. U.M.
       Sec. 5, 6, 7, 18, 19, 30,31,32

       T.7S.. R. 14 E.. U.M.
       Sec. 5, 8, 9, 16, 21, 28, 29, 32




                                            A Part 11-21                                 239
                          EXHIBIT A          Part II

               TAPS Renewal Legal Descriptions
          Federal Grant of Right-of-Way, Related Facilities

T. 8 S.. R. 14 E.. U.M.
Sec. 5, 6, 7, 8, 18

T. 8S..R. 13 E.. U.M.
Sec. 13,23,24,26, 27, 28,33,34




                                 A Part II - 22               240
                                  EXHIBIT A     - Part II
                     TAPS Renewal Legal Descriptions
                Federal Grant of Right-of-Way, Related Facilities

                        Federal Grant of Right of Way, F-84966
                        Prospect Power & Communication Line
Those Bureau of Land Management lands described in Alyeska Drawing No. D-47-P2979-E5,
Rev. 1 dated 6-85, and attached as Exhibit “A” to the above-referenced Federal Grant, located
within the following described lands:

       T. 23 N., R. 14 W.. F.M.
       Sec. 17 SWA




                      Federal Grant of Right of Way, AA-31239
                     Gulkana Communication Site & Access Road
Those Bureau of Land Management lands described in the drawings attached as Exhibit “A” to
the above-referenced Federal Grant, located within the following described lands:

       T. 9 N.. R. 2 W„ C.R.M.
       Sec. 26 SW'/iSEVi
       Sec. 35 NWWNEW




                                         APart II- 23                                  241
                                &                   It                      n Mnioll A                      m
     ’iv
           -Ko>          ”'X<                                                                                                      •%        •fr


    >&8    •   '•-••••
                         # $ÿ
                                m   {y         list of Applications and Accompanying Alignment
                                         <8;      Map and Site Location Drawings Identifying                                      &
                                                                                                                                       :<•
                                                &
                                                    m the General Route of the Pipeline
I




                                                                                    v                                            «HV
                                                                    '**' 3***             t   “   * *   V *f                            *•
                                                                                'ÿ




                                                         Si m   M                                               '
                                                                                                                        ;8

                                                                                     WM   Jl            I           H        i




                                                                                                                                 242
                                                      EXHIBIT A
     List of Applications and Accompanying Alignment
        Map and Site Location Drawings Identifying
              the General Route of the Pipeline
   A. The general route of ih» Pipeline is identi¬                                  (o) DM* of Survey
fied in the following applications, alignment map                                       Engineer\ Statement attached to
and site location drawings, filed: with the Bureau                                      Sheet 1 indicates that survey was
of tend Management:                                                                     made commencing August If), 1970
    (1) Alignment of the centerline of the line                                         thrash February 16. 197? (and
                                                                                        continuing as minor realignments
              (a) Application*                                                          occur) and that such survey is ac¬
                  BLM serial numbers                                                    curately represented upon the
                  AA-3847—sheets 1 to 26 inclusive                                      aforesaid sheets of the map with
                     -         —
                  F 1.2505 sheet* 26 to IBS inclusive
              (b) Description of Alignment Map
                  Aiyeska Pipeline Service Company
                                                                                        certain ozoeptiona that are noted
                                                                                         oo individual engineer’s state-
                  Trans Alaska Pipeline Svst«n                                      (d) Dote Alignment Map was nled
                  Dwg. Ko. AJL-40-G2                                                    September 18,1973
                  Sheets 1-138. inclusive (1*3 sheets                               (•) 3LM ojftce vher* fiUd
                  in all, including 23A, 3SA. 53A,                                      Alaska State Office
                  114 A and USA)                                                        Bureau of Land Management
                  Prudhoe Bay to Valdez                                                 355 Cordova Street

                                                                                                                                   —
                                    ..........
                  *B" OU Pipeline Alignment Map                                         Anchorage, Alaska
                  Scale tl'' -1,000"                                          (2> Locations of certain Related Facilities
                                                                                                                        '•

                                                                                                                    l




                                      —— -----—
                                )UI*MI taertU*
                                                                                                 •'1,"*£iagT',<m              °1Z!*
                           ... ........
         ---          .........



                                                                                             __
        tfi     »                                                              F-1S423          D-33-L 500                   1-13-79
                                      £*g£                   ™T-*                               D-SJ-L-500
                                                                                                D-34-L S00
                                                                                                                             1-13-77
                                                                                                                             t-12-n
        iSvi-.-i..  -                •.*-**»'        • «aa aiv**>(ÿ a#                          Th$S~L 500


                                   ——
                           »•••«•« »•*«« • •«.« *•».* w




                                       .....
                                     .....
                                       P-15430                                                  D-34-L 501
           .
        *7..                          »   »                                      1M32           D-37-L 502                   1-13-73

                                   • . F—15436
                                                                                                EH35-L SOI                   1-13-73
       glu.                    ~                 •**»««»«                ».                     D-40-L 300                   1-13-7*
                   .
               v V <•                     -mo
                     •« aaV}» aye’ll* v* v *     i                             AA               £M1-L 300                    1-13-72



                                                                               ....
                                                                               AA-SMI           D-42-L $00                   1-12-72
(b) Meehantul Rn/riesratwo         Shipment Sites:                                                     ’’   •
                                                                                                                I

        *Uv.—                                                                                   D-CO-L 00                    No Date
                                                                                                D-00-L 97                    No Date
                     ...                                                                        IMHft 98
                                                                                                D-00-L 99
                                                                                                                             NoDau
                                                                                                                             No Date
        *'ÿ

                                                               A-l
                                                                                           -     0-00-L100
                                                                                                 D-OO-L 101
                                                                                                                             No Date
                                                                                                                             Nft Date


                                                                                                                        243
                                                   suuM<)tet«*r                                                                                       Atei'MOM* Ji,X                                                        Jlnrajj
                                                                                                                                                                                                               a.’insj#


|b 1 Mechanic*:              Rcfriferatlsa Equ'p«nt H'.trn— Goxiticottl
                                                                                                                                                                                                         !>-00-L 102       No Date
           M                                                                                                                                                                                                      ias      No Date
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                                          EXHIBIT B

                      Requirements of the Department of Defense
                          Relating to Military Installations
A.     General Requirements

       1.      Entry upon military land for construction and routine operations and maintenance
shall be fully coordinated ten (10) days in advance of entry with the appropriate Installation
Commander/Gam son Commander having immediate jurisdiction over the property. Entry under
emergency conditions shall be coordinated expeditiously with the Installation
Commander/Garrison Commander.

               Due to the increased security measures and required coordination procedures at
Eielson AFB, notification of entry onto Eielson AFB for routine operations and maintenance
shall be coordinated at least 14 days in advance. If for construction outside of the existing right-
of-way, notification shall be coordinated at least 60 days prior to entry. Adjusting the advance
notification requirement will also allow the appropnate offices to provide authorization in an
expeditious manner.

       2.      Entry for all activities conducted by Permittees upon all military installations shall
be in strict compliance with post/base regulations, both existing or hereafter promulgated.
Permittees shall obtain copies of such regulations from the affected Installation
Commanders/Garrison Commanders.

       3.       Ingress and egress to military installation shall be confined to routes designated
by the Installation Commander/Garrison Commander. Such commander shall have the right to
modify or change the designated routes without advance notice to Permittees. Use of existing
military roads or other access routes across subject lands shall be non-exclusive.

        4.      Permittees shall reimburse the United States, through the Array or Air Force
installation affected, for any increased maintenance costs of existing military roads resulting
from or attributable to usage by Permittees. These costs shall be in addition to those
contemplated by Section 12 of this Agreement.

        5.     Permittees may construct permanent access and maintenance roads within the
Right-of-Way, provided such roads do not interfere with the surface use of the area by the
military, except during the construction phase.

       6.       Roads designated by the Installation Commander/Garrison Commander to require
intermittent  military usage may be closed. The Installation Commander/Garrison Commander
shall approve in advance all such closures. Any extended closure shall cause the road to be
treated as stated in Section 3 of these General Requirements.

        7.     Any overhead construction relating to the Pipeline shall provide for a minimum of
eighteen (18) feet of clearance above the existing road surface.


                                                                                              250
        . 8< .   Crossover road ramp construction relative to nwip grades., pipeline covet, sleeves,
                                  confonn 10              Pnri&l to the standards of the Alaska
Sttte
         9.      Rnal route selection, as mapped, and any subsequent changes thereto across
      ry lands will he approved by the aflectcd Installation Cocomandcx/Gamson Commander
priew to construction. The route of the Pipeline shall be located so as to avoid military
improvements and the Pipeline shall be constructed a minimum distance of three hundred
twenty-five (325) feet from perimeter fences surrounding ammunition and fuel storage areas.

         10.     No surface projection of the Pipeline shall be permitted within die drop rotte area
west of the main development ai Fort Greely.

       1 jb    Crowing of Army Petroleum Oil and Lubricant (POL) lines will be coordinated
with the affected Installation Commander/Garoson Commander and the Defense Energy Support
Center Commander, Alaska, 10470 22ta St. Elroendorf AFB AK 99506. and the Director of
Public Works, Real Estate Office on Fbrt Richardson, AX 99505.

        1 2.    The Pipeline traversing subject lands shall be buried from stations £400+00 sod to
8511+51 and from Stations 8554+70 to 8562+46 as shown on Alyeska Pipeline Service
Company Trans Alaska Pipeline System Drawing AL-00-C2, Sheet 45 of 138, Prodhoe Bay to
Valdez. Bunal depth and technique shall be sufficient to permit surface crossing of the Right'-of-
W#y by heavy tracked and wheeled vehicles at designated locations of existing roads and
runways. In the event that subsurface construction cannot be accomplished to the satisfaction of
the Installation Commandex/Garrison Commander, the Pipeline shall be relocated to an area or
areas where burial is permissible, or where surface construction can by authorized without
interruption of the military mission. Mode of construction between the aforementioned stations
shall require the prior conieoi of the Installation Commander/Gamson Commander.
        13. Disruption of. or interference with the operation and maintenance of any military
pipelines, utility and communication lines is prohibited except by authorization by the
Installation Commander/Garrison Commander. The Pipeline shall cross ail existing intersecting
pipelines, conduits, and cables with a minimum clearance of twelve (12) inches.

         14.   Maximum length of open trench or trenches during construction of the Pipeline
over and across the subject land shall not exceed one {1) mile at any given time without the prior
approval of the Installation Conraumder/GKrison Commander.

       15.    Suitable bridged crossings over open trenches shall be provided and maintained
where necessary to permit passage of military personnel and vehicles; timely notice of
requirements to be furnished by Installation ConunanderiGarrison Commander.

       16. In connection With Permittees' duties to repair, replace, and rehabilitate a*
provided for ut Section 13 of this Agreement, where borrowed soil materiel is necessary to
perform such duties, the location and method of obtaining the borrowed material shall be


                                                B-3                                         251
approved by the Installation Commander/Garrison Commander. All surplus material not
required for fill, backfill or grading shall be spread and leveled in an area designated by said
commander.

       17.      Permittees shall submit legal descriptions of the centerline of the Right-Of-Way
and permanent access and maintenance roads as constructed in, upon, over and across military-
controlled lands to the Installation Commander/Garrison Commander within ninety (90) days of
the completion of construction within a given military installation. Separate legal descriptions
shall be written for each noncontiguous tract of military-controlled land. Said legal descriptions
shall be accompanied by preliminary “as built" drawings (and final “as built" drawings shall be
furnished within three hundred and sixty (360) days) of said completion of the Pipeline and all
permanent access and maintenance roads, together with separate real estate maps in the event
sufficient survey information necessary to verify legal descriptions is not contained on the "as
built” drawings.

        18.    Permittees shall install mainline valves sufficient to control Oil flow in the
vicinity of populated area, ammunition/explosive and fuel storage areas.

       19.      Electrically operated devices installed as part of the Pipeline System which are
capable of producing radiations, electromagnetic or other interference, shall be screened, filtered
or otherwise suppressed to the extent that such devices will not adversely affect the function of
existing communication systems. In the event that physical obstructions, such as towers or
buildings are to be erected as part of the Pipeline System, their positioning shall be such that they
will not obstruct radiation patterns of line-of-site communication, navigation aids or other
communications, electronic or meteorological services.

         20.     Entry for construction and routine maintenance upon installations or crossings of
utility facilities under the control of or utilized by Air Force Communications System/White
Alice will be coordinated at least ten (10) days prior to entry with Alaska Communications
Region through Headquarters. Alaskan Air Command. ElmcndoTf Air Force Base. Entry under
emergency conditions will be coordinated expeditiously with the Region.

        21.     Should the Pipeline cross high voltage power transmission lines on Eiclson Air
Force Base, adequate precaution to the satisfaction of the Installation Commander/Garrison
Commander will be taken to insure that excessive sag or accidental power line breakage does not
create a safety hazard.

       22.     In the event unexploded munitions are discovered by Permittees during
construction activities, the construction activities shall immediately cease in that area.
Permittees shall notify the Installation Commander/Garrison Commander who will immediately
proceed to dispose of the munitions. Construction shall not proceed until authorized by the
installation Commander/Garrison Commander.
        23.     The United States reserves to itself the right to construct, use and maintain across,
over and/or under the Right-off-Way, oil and sewer lines, and other facilities, in such manner as
not to create an unreasonable interference with the use of the Right-of-Way.



                                                B-4                                            252
        24.     Any authorized use or occupation of the subject military lands in connection with
the construction, operation, maintenance or termination of the Pipeline System shall be subject to
such rules and regulations as the Installation Commanders/Garrison Commanders may from time
to time prescribe. The military departments reserve the right to modify or change conditions to
protect military interests as circumstances may from time to time warrant.

       25.     Transportation, storage and use of explosives during construction of the Pipeline
System shall be permitted only in conformance with the applicable installation regulations.
Permittees shall secure copies of these regulations from the Installation Commanders/Garrison
Commanders. Use of all explosives on military reservations shall be in strict conformance with
U.S. Army Corps of Engineers Safety Manual, and Permittees shall secure copies of this manual
from the Installation Commander/Gamson Commander. At least thirty (30) days in advance of
any underwater blasting, Permittees shall submit to the Installation Commander/Garrison
Commander a plan for such blasting. The plan shall set forth blasting locations, types and
amounts of explosives, date or dates of blasting, and the reason for blasting.

        26.    The use of pesticides and herbicides shall be in accordance with applicable
military regulations. An approved list of pesticides and herbicides, together with application
constraints shall be obtained from the Installation Commander/Garrison Commander

       27.     Permittees shall locate and/or install the Pipeline System in such manner so as to
preclude the creation of ground fog and/or ice fog conditions which will in any way decrease the
operational capability of the air fields located on Eielson Air Force Base. Fort Wain wright and
Fort Greely. Studies or other data supporting the location or construction techniques utilized by
Permittees to accomplish the requirements of this condition shall be submitted to the Installation
Commander/Garrison Commander for review and approval thirty (30) days prior to
commencement of construction on the lands herein described.

       28.      Prior to commencement of construction, Permittees shall submit a schedule of
their construction activities on the military installation involved. This schedule shall be in such
detail as may be required by the Installation Commander/Garrison Commander and during the
course of construction this schedule shall be updated and resubmitted as may be required by the
Installation Commander/Garrison Commander.

       29.    All required notifications pertaining to U.S. Army military should be addressed to
the Garrison Commander and the Director of Public Works.

B.     Definitions

        As used above, the following items have the meanings indicated

                       "Installation Commander/Garrison Commander*’: The Commanding
                       Officer of a military installation, E.g., Fort Wainwnght, Fort Greely,
                       Eielson Air Force Base.



                                                B -5                                       253
2.   “District Engineer”: The District Engineer, U.S. Army Engineer District,
     Alaska, Anchorage, Alaska




                              B-6                                        254
                                                            DEPARTMENT OF THE ARMY
                                                     OFFICE OF THE CHIEF OF ENGINEERS
                                                     WASHINGTON, D.C., November 23, 1973


Mr. DAVID E. LINDGREEN
Deputy Solicitor
Department of the Interior,
Washington, D.C.


       DEAR MR. LINDGREEN: By letter dated 14 November 1973 we furnished you certain
provisions to be included in the right-of-way permit for the construction of the Trans-Alaska
Pipeline. These provisions protect military interests where the pipeline right-of-way crosses or
otherwise affects military installations.

       In this letter we reserved the right to make reasonable modifications or changes from time
to time. We are furnishing herewith a revision of Exhibit E which clarifies the intent of various
paragraphs and eliminates certain paragraphs in which the provision is already adequately
covered in the stipulations of the Final Environmental Impact Statement.

       It is the intention of the Department of the Army and the Department of the Air Force to
permit the construction, operation, maintenance, and termination of the Trans-Alaska Pipeline in
a way that is compatible with both military operations and the Pipeline System, and that the
necessary approvals requested by the Pipeline System will not be unreasonably withheld.

                                                                                      Sincerely,
                                                                          WOODROW BERGE
                                                                         Director of Real Estate.

Note—The “revision” referred to above in this letter was modified in certain respects before
being incorporated into this Agreement and the Director of Real Estate, D.O.A., Office of Chief
of Engineers, has been apprised of the modifications in all material respects.




                                              B -7
                                                                                           255
                                                             DEPARTMENT OF THE ARMY
                                                     OFFICE OF THE CHIEF OF ENGINEERS,
                                                         Washington, D.C., November 14, 1973




MR. DAVID E. LINDGREEN
Deputy Solicitor
Department of the Interior
Washington, D.C.

        DEAR MR. LINDGREEN: This refers to our DAEN-CWZ-W letter dated 9 November
1973 concerning review of your 20 July 1973 draft permit on the construction of the Trans-
Alaska Pipeline. We indicated then that the permit should contain conditions to protect military
interests where the pipeline right-of-way crosses or otherwise affects military installations.

        We have prepared and are inclosing a set of such provisions to be incorporated in the
draft permit as Exhibit E.

        While these conditions are as accurate as we can foresee at this time, military exigencies
and local circumstances may require that reasonable modifications or changes be made from
time to time and the discretion to make such changes has been reserved in our proposed
Exhibit E.

                                                                                      Sincerely,
                                                                          WOODROW BERGE
                                                                         Director of Real Estate.




                                               B-8
                                                                                            256
                             Memorandum of Understanding
           WHEREAS, the United States of America, acting by and through the U.S. Army,
Coips of Engineers (hereinafter called the “Corps of Engineers”), is developing the Chena River
Lakes Project for the flood protection of the Fairbanks, Alaska area; and
           WHEREAS, the Alyeska Pipeline Service Company, as agent for and on behalf of the
owners thereof, listed below,

                                Amerada Hess Pipeline Corporation
                                      Arco Pipe Line Company
                                          BP Pipelines, Inc.
                                      Exxon Pipeline Company
                                 Mobil Alaska Pipeline Company
                                Phillips Alaska Pipeline Corporation
                                      Sohio Pipe Line Company
                                 Union Alaska Pipeline Company

(hereafter called the “Company”) has constructed the Trans-Alaska Pipeline over and across a
part of the area which is required for the construction, maintenance and operation of the Chena
River Lakes Project; and
           WHEREAS, the Trans-Alaska Pipeline across the Chena River Lakes Project area has
been constructed so that it will not interfere with the operation, maintenance, or repair of the
Project; and.
           WHEREAS, the Chena River Lakes Project, upon its completion, will have been
constructed in such a manner that the Corps of Engineers considers the integrity of the Trans-
Alaska Pipeline will not be imperiled by Project operation or maintenance; and,
           WHEREAS, it is imperative that both of the parties hereto cooperate in the
maintenance and operation of their respective facilities to avoid interference with each other;
           NOW, THEREFORE, it is agreed as follows:
           1. Without consultation with the official of the United States in charge of the Project
the facilities of the Company within the Chena River Lakes Project boundaries shall not be
altered or modified, nor shall other facilities be constructed by the Company so as to interfere
with the maintenance or operation of the Chena River Lakes Project, except any alteration or
modification or facilities constructed by order of the Department of Interior.




                                                  -
                                                B 9
                                                                                               257
                  2. Any routine excavation work which the Company performs, or causes to be
    performed within the boundaries of said Project, shall be first coordinated with and shall have the
approval of the official of the United States in cite of the Project, fj
               3. Any excavation work which the Company performs, or causes to be performed
    within the boundaries of said project, which must be done on an emergency basis, may be
    performed after notification of the official (or such official's office) of the United States m
charge of the Project; provided, the Company may proceed with emergency work as tong as
attempt (sic) to notify have been or are being matte.
                  4. Any excavation work which the Corps of Engineers performs, or causes to be
performed within that portion of the nght-of-way for the Trans-Alaska Pipeline which lies within
the Chena River Lakes Project, shall be first coordinated with and have the approval of the
official of said firm in charge of the involved section of the pipeline.
           5. = Tlte Company recognizes that operation of the Project will result occasionally in
    ',•     /yV ' ~ - jv- „*ÿ*"
              >          '                      •
                                                       'r‘ - , " : -
the overflowing, flooding: and submerging of portions of its right-of- way through the Chena
River Lakes Project, and that said overflowing, flooding, and submerging of its right-of-way,
may obstruct passage along or otherwise preclude the Company's full and unrestricted use of
said right-of-way, and the Company hereby consents thereto; provided, however, that such
consent by tlte Company shall in no way relieve the United States of America from any liability
arising out of any activity incktem to the construction, operation, or maintenance by it of the
Chena River Lakes Project except as herem provided
            6. The Company shall be notified sis soon as possible prior to or after any flooding
affecting the Pipeline right-of-way.




.
    — .....
    *
                  .
        urykssprevmusty authorÿ by
    Management,
                                       .    .                             •'

                                     # Aitthomed Office* of iho Office of Special Projects!, Btawra of Land

                                                         8-0                                                  258
DATED this 2nd day of May, 1980

                       ALYESKA PIPELINE SERVICE COMPANY
                       Agent for:

                       Amerada Hess Pipeline Corporation
                       ARCO Pipe Line Company
                       BP Pipelines Inc.
                       Exxon Pipeline Company
                       Mobil Alaska Pipeline Company
                       Phillips Alaska Pipeline Company
                       Sohio Pipe Line Company
                       Union Alaska Pipeline Company

                       By: Is/

                       UNITED STATES OF AMERICA
                       U.S. Army, Corps of Engineers

                       By: /s/
                           District Engineer
                          Alaska District




                                  B - 11
                                                           259
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                                                                         &l£r                                                                260
 DOD REQUESTED CHANGES TO REQUIREMENTS OF THE DOD RELATING TO
     MILITARY INSTALLATIONS (EXHIBIT B OF THE CURRENT GRANT)

A. General requirements:
Item 1: Due to the increased security measures and required coordination procedures at Eielson
AFB, notification of entry onto Eielson AFB for routine operations and maintenance shall be
coordinated at least 14 days in advance. If for construction outside of the existing right-of-way,
notification shall be coordinated at least 60 days prior to entry Adjusting the advance
notification requirement will allow the appropriate offices to provide authorization in an
expeditious manner.

Item 11: Crossing of Army Petroleum Oil and Lubricant (POL) lines will be coordinated with
the affected installation commander and the Defense Energy Support Center Commander,
Alaska, 10470 22nd St, Elmendorf AFB AK 99506, and the Director of Public Works, Real
Estate Office on Fort Richardson, AK 99505

All references to installation commander should be revised to read “Installation
Commander/Garrison Commander” as the Army no longer has installation commanders

All required notifications pertaining to U S. Army military should be addressed to the G-arrison
Commander and the Director of Public Works.




                                                                                             261
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     r t            Requirements  of the Department   of Defense %

#    m               J WTZ
                        Relating to Military Installations
                     •?
                                        Jt “C.411:
                               II          :I




                                                                                                               262
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  that subeurfltos construction cannot be ACCOOI-            roads, toother with vtp*nt* real HUM reaps b
 plishfd tothe satisfaction of the installation com-         the erabt saiSc:ent survey information ut-rcomry
 rnandor, the Pipeline shall be relocated to an              to verify legal descriptions is not soneamed on
 area or areas where burial » permiwibl*, or where           the "a# built” drawings.
surface const ruction can be authorised with*                1$. PermittoM shall install mainline valvw suffi¬
 out interruption of the military minwon. Mode               cient to control Oil flow in the vicinity of popu-
 of construction between the aforementioned sta¬                   area*, emmunkion/exploeive and fuel stor¬
 tions shall require rhe prior consent of the in*            age areas
atailation commander,
    ]*. Disruption of, or imarfcmico with the op*
                                                               19. Ktectr>ca»lv operated devices ;r.stalled u part
                                                             of the Pipeline System which are capable of pro¬
erntioit and maintenance of any military pipeline*           ducing radiation*, ciertoroagnette or other inter-
utility and t-oottnitnictuion Imre is prohibited ex¬
                                                             ferenre. shall bo screened, filtered or otherwise
cept by autitorixadoti hy tins- insuUadon com¬
                                                              .-Mipprcwod to the er.unt that such devices will not
mon <lor. 17* Pipeline shall cro« all existing in¬           adversely xffvct thu function of existing commtuti-
tersecting pipelines, conduits, and cables with a             .Mtion system*. In the event that physical obetruc-
minimum clearance of twelve <121 inches.                      tlooa. such os tower* or buildings are to be erected
   14. Maximum length of open trench or trenches              os part of the Pipeline System, their positioning
during construct ion of the Pipeline over and                chall be such that they will not obstruct radiation
across the subject land shall not exceed one (I)              patterns of line-of-rite OMnnumication, navigation
mile at sny given time without the prior approval            aidsor other communications, electronic or metero-
of the installation commander.                                Wgicol service*.
   15. Suitable bridged crossings over open trenches
                                                                fia Entry for construction and routine main-
shall be provided and maintained where necessary             tenone* upon installations or erodings of ntflity
u> permit passage of military personnel and ve¬
hicles; timely notice of requirements to be fur¬
                                                             faculties under th* control of or trttluad by Atr
                                                             Force Communications System /White Alio* will
nished by isstallattaa commander.                            be coordinated at least too \ 10) days prior to entry
   Id. In oocneetion with Permittees’ duties to re¬          with Alaska Communications Region through
pair, replace, and rehabilitate as provided for In           Headquarters. Alaskan Air Command, Elmendorf
Section 13 of this Agreement, where borrowed soil            Air Force Bose. Entry under emergency condi¬
material is neoewsory to perform such duties, the            tions will be coordinated i»xpediUouK> with the
location and method of obtaining the borrowed                Region.
maternal shall lie approved by the installation
commander, .ill surplus material not required for              81. Should the Pipeline crow? high voltage
fill, be cleft! I or grading shall be spread and leveled     P°"*r transmission Imre on EiaUon Air Force
in an area designated by said commander.                            adequate precaution to the satisfaction of
  17. Permittees shall submit legal descriptions of              inetallstion commander will be taken to insure
the centerline of the Riehr-of-Way and permanent             <h*t «c*a*ive sag or accidental power line break-
* ceres and maintenance roads as constructed to,
                                                             age doe* not create a safety hazard
upon, over and arrow miliiary-remtrolkd land*                   22. In the event ttnexploded munitions are dia-
to the installation commander within ninety (90)             covered by Permittees during construction activ-
days of the completion of construction within a              fciesÿh. construction activities shall immediately
        rn.liurr               S*p.r.l« I«U,
**"•
 wipticM A.U b. wotW to Md.
                                                             MU, U. IhM ,m. IWu™, ,toll notify ih, ik-
                                                             >ttl|Mi00                wko „n toroedUu)f pro.

                                                                      proc™*        authorised by the ajsvalU-
-re built” drawings (and final "as built” drew*
ings shall be famished within three hundred and
                                                             sh>U
                                                             u<m cocnm*r**fT'       '
sixty (3®5) days) of said completion of th* Pipe-              33. The Doited Stales reserve* to itrelf the right
line and all permanent access and maintenance                to construct, wee and maintain arrow, over and/or
                                                                                                              264
                                                           B-2
                       I M! *1


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Pipeline In a way that Is compatible with both military operations and the Pipeline System,
and that the necessary approvals requested by the Pipeline System will not be unreasonably
withheld.
      Sincerely,
                                                                    WOODsow BESOE,
                                                                  Director of Real Estate.

          —
     Non. The “revision” referred to above in this letter waa modified in certain respects
before being Incorporated Into this Agreement and the Director of Beal Estate, D.O.A.,
Office of Chief of Engineers, has been apprised of the modifications In all material respects.

                                                      DerjjiTMgjcr   or   THE Aaarr,
                                                  OmcE or   THE CHUT or Esoimw,
                                                      Washington, D.O., November H, 1973.
Mr. DAVID E. LnTDoatrr,
Deputy Solicitor,
Department of the Interior,
Washington, D.O.
     Daaa Ml Lnrooaaiv : This refers to our DAEN-CWZ-W letter dated 9 November 1973
concerning review of your 20 July 1973 draft permit on the contraction of the Trana-Alaska
Pipeline. We indicated then that the permit should contain conditions to protect military
Interests where the pipeline right-of-way crosses or otherwise affects military Installations.
     We have prepared and are Inclosing a sat of such provisions to be Incorporated In the
draft permit as Exhibit E.
     While these conditions are as accurate as we can foresee at this time, military exigencies
and local circumstances may require that reasonable modifications or changes be made from
time to time and the discretion to make such changes has been reserved in our proposed
Exhibit E.
     Sincerely,
                                                                     Wooolow BESOE,
                                                                   Director of Real Estate.




                                            B-4                                                   266
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                                                                                                                                                                                                                                                                                       268:>c
                                           15. Guaranty


A.  Upon being notified by the Secretary to do so. each Permittee shall cause to be delivered to
the Secretary a valid and unconditional guaranty of the full and timely payment of all liabilities
and obligations of the Permittee to the United States under or in connecuon with this Agreement
or any other agreement, permit or authorization to be issued or granted to the Permittees by the
Secretary that relates in whole or in part to all or any part of the Pipeline System.

B. It is recognized that a proposed guarantor of a Permittee may be a corporation (or an
individual stockholder thereof), a partnership (or an individual partner thereof), an association
that is authorized and empowered to sue and be sued and to hold the title to property in its own
name (or an individual associate thereof), a joint stock company that is authorized and
empowered to sue and be sued and to hold the title to property in its own name (or any individual
participant therein), or a business trust (or an individual settlor thereof), and may or may not
directly or indirectly own a legal or beneficial interest in the Permittee whose liabilities and
obligations are sought to be guaranteed. In the case of multiple guarantors that are acceptable to
the Secretary, each shall be severally liable for only its proportionate share of any sum or
payment covered by the guaranty.

C. Each guaranty shall be satisfactory to the Secretary in all respects including, without
limitation, the form and substance of the guaranty, the financial capability of a proposed
guarantor, the availability of such guarantor to service of process, the availability of the assets of
such guarantor with respect to the enforcement of judgments against the guarantor, and the
number of guarantors that will be necessary to guarantee all of the liabilities and obligauons
which will be covered by a particular guaranty; provided, however, that the Secretary shall not
unreasonably withhold his approval with respect to a guaranty or guarantor.

D. The Secretary shall have the right at any time, and from time to time, to require the
substitution and delivery of a new form of guaranty in the event that an outstanding guaranty is
held to be invalid or unenforceable, in whole or in part, by a court of competent jurisdiction or,
that the controlling law shall, by statute or judicial decision, be so altered as to impair, prevent or
nullify the enforcement or exercise of any right or option of the United Slates under an
outstanding guaranty; provided, however, that the outstanding guaranty (to the extent of its
validity or enforceability, if any) shall continue in full force and effect with respect to any claim.
suit, accrued liability or defense thereunder that exists at the time of substitution; provided
further, that the new form of guaranty, in each such case, shall be required as to all Permittees
that at the time of substitution have delivered, or are required to deliver, a guaranty.




                                                                                                  2
                                                                                                 269
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     tm ;ip   *                                               Jjfavrn


                                                                        , :
                                                                                  atesandopid
                                   to establish its   valid
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                                                                                            *               u
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     resources at the disposal of the Owner Entitle*, or ott                       „
                                                                                                **
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                                                                                                                   3
                                                                                                                 m
                                                                                                                 270
                                               EXHIBIT C
        Requirements of the Federal Power Commission
                  Relating to Power Sites
   A. With respect to any Federal Lands that are          the event the said land is required for such purposes, any
                                                          improvements or structures placed thereon which shall
classified, withdrawn or reserved for power pur¬
                                                          be found to interfere with such development shall be
poses, the grant of the Right-of-Way is, in ac¬           removed or relocated as may be necessary to eliminate
cordance witli the findings of the Federal Power          interference with reservoir or power development at no
Commission (Docket No. DA-112-Alaska, U.S.                cost to the United States, its permittees or licensees.
Department of the Interior, issued on December 6,           11. The Permittees herein shall not be deemed
1973) , made subject to :                                 to be “permittees or licensees” within the meaning
 •••   the retention of prior rights for reservoir or     of the aforesaid findings of the Federal Power
power development, and subject to the condition that in   Commission.




                                                      C-l



                                                                                                                  271
                                           Ofl&i

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                 I
              «««r        J%     I   EXHIBIT 0
                     V*                                                                ;X<|
                                                                                                                S'
                                                                                                             =•>:?.* o
*
     *
         Stipulationsfor the Agreement and Grant of Right-of-Way
    4*
                      j||!               .
                                           Mlpeline •f
                                                                               CC -X

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                                                                                                                                                             272
                                               EXHIBIT D
Stipulations for the Agreement and Grant of Right-of-Way
                for the Trans-Alaska Pipeline
                                                Table uf Content/?
      1       GENERAL                                                                                               IW
      tl
      1. S
      *•*                     ......
              Authorised 0®«rr. .....
                                 ....
              Definition*.........
              Responsibilities......


                                ----
                                   — — — ....
                                                                                                       v.... D-J
                                                                                                                r> s
                                                                                                                D-4




                                              —— -----
                                                 ——---------
                                                     --------
      1.4     Cowmou Ajent I’enni(««i                         r**»«                                w»...        I)-ft
      l. »    Authority of R<pr«*mUtive* of Att«W>tU*d OWwMid Ccmmne Agswt; Ordwa

      I A Onlm and Notices    .........
      I. T Nuttce* To froceed...
                                          .-------
                                           *
                                                      ------
                                                        -                       !
                                                                                                                D-fi
                                                                                                                D-«
      1. S Changes in Condition!)      ....                                                  *



                                                                                                   .....
                                                                                                                IWt
      Lfi Antiquities sad If tetorioaf                                                                          D-8
      1. 10                                                                                                     IV4fc
      1» 11 Ptibifc
      y 12 Regulation of Public JUMD         .......
                                              ....
                                               .......
                                                 ...
                                                  ........
                                                       ........                                                 LM0


                                                      ____......
                                                                                                                D-9
      L 13 ElorttoniesUy grated DwJce*.               -                                                         D-a
      L 14 Camÿng, Hunting, Hiding. and Trapping                                                                JM
      I- 15 Small Craft Faasisgr.-,                                                                             M



                                                 __—
                                                <•-«»-—




                                                                                                  —
                                                         ..
      4i 1« Protection of Sur«f.yMonum«tie
      I. If Ft* Prevention and Suppreaelon
      L IS SurveUiawe and Maintenance. .
      1.19 Housing and
      1. 20 Health «ftd Safety. < .....
                                                 .
                                               aa«a.a
                                                     —                                      -y~
                                                                                                 :~r £2
                                                                        i »a a*a»aaaa*o>aaM*a*«aaa<i
                                                                                                           . ZHB

                                                                                                           - SrS
                                                                                                           •    r     jef
            Conduct of Operations
      1.22 Applicability of Stiptrlatinaa.   - ...                                                ....... JH*   rv-io
      2
      21
          \
              ENVIRONMENTAL
                                 —. ..................
              EtYiWiuBWttl Hriefing. ..
                              .....
                                ...                      ,»                                                     D-10
                                                                                                                D-II

                             ------           ____
                                                 --- --
                                        *
      1                                                                                                         D-il
      %4
      2 ft
      2.6
      E7
      Z8
              Rrnnoa

              Clearing
                      Control


           Disturbance of Natural


                             ------
      It 0« Blghbof-Way Ttaffle..
                                    .........................
                                - ----
              Pish and ttiicUlfe Protection

                         —
              Material Sittw...



                                  ___
                                   ___ -
                                      -------
                                            - —
                                              -
                                               ..
                                                 - -
                                                    .... ----                   ——           »•!:““ a*
                                                                                                                W1
                                                                                                                D-12


                                                                                                                D~13
      Z 10 Aeatbvtica.....      ,---


                                         —                —
      Z 11 Uar of Ex pi nni vfS............................
      «h 12Restoration.    .......         .......
                                             ... ........  .. — —    —
                                                                 ------ «
                                                                                    ..
                                                                                                .....
                                                                                                  ..
                                                                                                  •«>o-v
                                                                                                           -
                                                                                                                D-»
                                                                                                                D-J4
                                                                                                                &-W



                                                                                               .....
      % 13 Reporting of W pfeeharg**-. .                                                     VM««***9           0-14
      Z 14 Contin««s»»y                                                                                         0-14
      2    TRCHNIC/il,

      a2      Wpcltas 3yat«n Standard*.. .     ...                         ..                              »v   1>45
      ZH
       3. 4
              Construction Mode Requirement*
              Earthquakes *®d Vault Displacement*.......                             ... ............           0-15
                                                                                                           . D-16
       Z ft
              fojpeStaWlfty.;.....
              Stream and Hood Haln Crocsiagn and Erosion ..                          ........:              *   OrlT
                                                                                                                D-l2
                                                                                                                o-i7
       RS     GUelcr Surges.....w.
                                            ---—...                                               •'ÿ•ÿ••           D-17
       3- «   Conainicrku Mid Operation
      A 10 Pipeline Oomwce
      8. 11 ConU»o»at of 051 Spills.                  —  D-J
                                                                  ...
                                                                           »ÿ       *;ÿ j   mi"
                                                                                                                0-1*
                                                                                                                    D-18
                                                                                                                    0-18




                                                                                                                            273
   1. GBNERAL                                             1.1.1.7. “Commissioning’' means the acceptance
                                                       und custody by Permittees of the first Oil tendered
   1.1. Definitions
                                                       for shipment through the Pipeline after provision
   1.1.1. As used in three Stipulations and else¬      for line fill and tank bottoms. Permittees shall, by
where in this “Agreement and Grant of Right-of-        written notice, promptly advise the Authorized
Way for Trans- Alaska Pipeline’'’, the following       Officer of the date upon which such acceptance and
terms haw the following meanings:                      custody takes place.
   l.l.l.l. “Access Roads” means the roads con¬          1-1.1 A “Construction Mode” moans the type of
structed or ueed by Permittees within, or for in¬      construction to be employed generally with regard
gress to and egress from, the Pipeline System.         to the Pipeline (e.g., whether the pipe will be
It does not include the proposed State highway         buried or elevated).
from the Yukon River to Pnidhoe Hay, Alaska, or           1.1.1.9. “Construction Segment" means a por¬
any other State highway.                               tion of the Pipeline System that constitutes a com¬
   1.1.1A “Affiliate” means (a) a Subsidiary of        plete physical entity or stage, in and of itself.
a Parent, or (b) tho Parent of the Subsidiary, or      which CAn be constructed, independently of any
(c) In the caw of a corporate Subsidiary, one or       other portion or stage of the Pipeline System, in
more corporations that share the Parent with the       a designated area or between two given geographi¬
Subsidiary by reason of the fact that all of the       cal points reasonably proximate to one another. It
outstanding capital stock of each of the corpora¬      ts not to be construed as referring to the entirety
tions that share the Parent is owned directly or       of the Pipeline or of the Pipeline System.
indirectly by the Parent, or (d) in the case of           1J J.10. “Construction Subdivision" means any
Sohlo Pipe Line Company, any corporation of            one of approximately six (6) large, lineal sections
which all of the outstanding capita) stock is owned    of the route of the Pipeline as determined by the
directly or indirectly by The Standard Oil Com¬        Authorized Officer after consulting with Permit¬
pany, an Ohio corporation, or The British Pe¬          tees.
troleum Company, Limited, a United Kingdom                1.1.1.11. “Department" means the Department
corporation, or both.                                  of the Interior of the United States, or any suc¬
   1.1.L3. “Authorized Officer" means the em¬          cessor department or agency.
ployee of the Department, designated by the Sec¬          1.1.1.12. “Final Design” comprises completed
retary, to whom the Secretary delegates the au¬        design documents. It shall include contract plans
thority to act on behalf of the Secretary pursuant     and specifications: proposed Construction Mode*;
to thin Agreement or such other Pcreon to whom         operational requirements necessary to justify de¬
the Authorized Officer redelegates his authority       signs; schedules; design analysis (including sam¬
 pursuant to the delegation of authority to            ple calculations for each particular design fea¬
the Authorized Officer from the Secretary.             ture) ; all functional and engineering criteria;
    l.l.l.l. “Business Entity” means an artificial     summaries of teste conducted and their results;
legal entity, formed to conduct one or more ven-       and other considerations pertinent to design and
turea for profit, or not for profit, that b duly au¬   project life expectancy.
thorized and empowered to sue and be sued, and to        1.1.1.13. “Involuntary Passage of Titln" means
hold the title to property, in its own name            a Transfer that is made by the exercise of a power
   1.1.1A “Category 1(c) Lends” means lands            of sale primarily for the benefit of creditors, or in
aelrrtcd by the State and not tentatively approved     accordance with the judgment, order or decree of a
and not withdrawn under section 11(a)(2) of the        court in bankruptcy, eminent domain or other
Alaska Native Claims Settlement Act                    similar proceedings, or pursuant to any act or res¬
   1.1.1.6. “Category 1(d) Lands” means lands Se¬      olution of a sovereign legislative body directing a
lected by the State and not tentatively approved       lawful taking of property.
and which were withdrawn under section 11(a)              1.1.1.14. “Mapping Segment*' means a Con¬
 (2) of the Alaska Native Claims Settlement Act        struction Subdivision, or any part thereof, as de¬
but which are not available for village or regional    termined by the Authorised Officer; provided,
selection under section 22(1) of the Alaska Native     howver, that with respect to a pump station,
Claims Settlement Act, R5 Stat 713, 43 U.S.C.          basic communication site, remote control valve
§l«n (1970).                                           site, mechanical refrigeration equipment site and

                                                   D-2



                                                                                                       274
any other like Related Facility, a Mapping Seg¬         computations to support the design concepts and
ment means the entire site.                             baste for project siring.
   1.1.1.15. “Notice to Proceed” means a permis¬          1.1.1.24. A. “Related Facilities” means those
sion to initiate Pipeline System construction that      structures, devices, improvements, and sites, the
is issued in accordance with Stipulation 1.7.           substantially continuous use of which is necessary
   UJ.16. “Oil” means unrefined liquid hydro¬           for the operation or maintenance of the Oil trans¬
carbons, including gas liquids.                         portation pipeline, including :
  1.1.1.17. “Parent" means a Person or Business              (1) line pipe and supporting structures;
Entity whose direct or indirect legal or beneficial          (2) pump stations, including associated
ownership interest in, or with respect to, a Trans¬              buildings, heliports, structures, yards and
feree or Permittee enable* that Person or Business              fo<xa»;
Entity to control the Transferee’s or the Permit¬           (8) valves and other control device*, and
tee’s management or policies.                                   structures housing them ;
   1.1.1.18. ‘‘Permittee” means any one of the Per¬         (4) monitoring and communications devices,
mittees.                                                        and structures housing them ;
  1J.1.19. “Permittees” means the Original Per¬             (5) Surge and storage tanks, and rolatnd con¬
mittees, or their respective successors or assigns              tainment structures;
bolding an undivided ownership interest in the              (6) bridges;
Right of -Way to the eatent sanctioned by the Sec¬
retary in accordance with the provisions of this            (7) terminals, including associated buildings,
Agreement.                                                      heliports, structures, yards, docks, and
                                                                fences;
   1.1.1.20. “Person” means a natural person.
                                                            (8) a gas fuel line and electrical power lines
  1.1.1.21. “Persons" means more than one Person.               necessary to serve the Pipeline;
  1.1.1.22. “Pipeline System" means all facilities          (0) retaining walls, berms, dikes, ditches,
located in Alaska used by Permittees in connec¬                 cut# and fills, including hydraulic con¬
tion with the construction, operation, maintenance               trol structures;
or termination of the Pipeline. This includes, but
is not limited to, the Pipeline, storage tanks, Ac¬         (10) storage buildings and structure*, and
orn Roads, communications sites, airfields, con¬                 areas for storage of supplira and
struction camps, materials sites, bridges, construc¬             equipment;
tion equipment and facilities at the origin station         (11) administrative buildings;
and at the Valdez terminal. This does not include           (12) cathodic protection devices;
facilities used in connection! with production of           (18) mechanical refrigeration equipment;
oil or gathering systems, nor does it include such               IM
things as urban administrative offices and similar          (14) such other facilities as the Authorized
facilities which arc only indirectly involved.                     Officer shall determine to be Related
   1.1.1.23. “Preliminary Design" means the es¬                    Facilities.
tablishment of project criteria (i.e., construction,       B. “Related Facilities” not authorized by this
including design, and operational concepts} neces¬      Agreement include roads and airports: Authoriza¬
sary to deliiteate the project to be constructed. As    tions for such Related Facilities shall be given by
a minimum it includes the following: design cri¬        other instruments.
teria and project concepts; evaluation of field data      C. “Related Facilities" does not mean those
 used to establish the design criteria; drawings        Structures, devices, improvements, sites,facilities
showing functional and technical requirements;          or areas, the use of which is temporary in nature
reports of all test data compiled during the data       such as those used only for construction purposes.
collection and preliminary design evaluation;           Among such are: temporary camps; temporary
standard drawings (if applicable) or drawings to        landing strips; temporary bridges ; temporary Ac-
support structural design concepts of each typical      ces* Roads;   temporary communications sites; tem¬
facility o? structure; proposed Construction            porary storage sites; disposal sites; and construc¬
Modes; outline project specifications; sample           tion use areas.

                                                      D-3




                                                                                                         275
  1.1.1.25. "Secretary" means the Secretary of               1.2. Responsibilities
the Interior of the United States, his delegate or           1.2.1. Except where the approval of the Author¬
lawful successor.                                        ised Offirer is required before Permittees may
  1.1.1.26. “Secretary of Labor" means the Sec¬          commence a particular operation, neither the
retary of Labor of the United States, his delegate       United States nor any of its agents or employees
or lawful successor.                                     agrees, or is in any way obligated, to examine or
  1.1.1.27. “Subsidiary" means a Businas Entity,         review any plan, design, specification, or other
that may or may not be a Permittee; the manage¬          document which may be filed with the Author¬
ment and policies of which are controlled by a           ised Officer by Permittees pursuant to these
Parent directly or indirectly through one or more        Stipulations.
intermediaries.                                             1.2J2. The absence of any comment by the Au¬
                                                         thorized Officer or any other agent, or employee or
  1.1.1.2*. "Transfer" means the passage of any
                                                         contractor of the United State* with respect to
right, title or interest in property (real, personal     any plan, design, specification, or other document
or mixed) by sale, grant, assignment, operation of       which may be filed by Permittee* with the Au¬
law or otherwise, and whether voluntary or not           thorized Officer shall not be deemed to represent, in
  1.1.1.29. “Transferee" means any Person, Busi¬         any way whatever any assent to, approval of, or
ness Entity or governmental or quasi -governmen¬         concurrence in such plan, design, specification, or
tal body or authority in which there is, or there is     other document or of any action proposed therein.
proposed to be, vested any right, title, or interest        1.2.3. With regard to the construction, opera¬
of a Permittee in the Agreement or the Right-of-         tion, maintenance and termination of the Pipe¬
Way pursuant to a Transfer.                              line System : (1) Permittees shall ensure full com¬
   l.l.t-30. “Transferor" means any Permittee            pliance with the provisions of this Agreement,
that makes, or that seeks to make, a Tranafer of any     including these Stipulations, by their agent*, em¬
right, title or interest in this Agreement, or the       ployees and contractors (including subcontractors
Rightof-Way.                                             of any tier) , and the employees of each of them.
                                                         (2) Unless clearly inapplicable, the requirements
  1.1.2. Terms defined elsewhere in this Agree¬
 ment:
         Term
     1. Agreement
                              _
     2. District Engineer... .1,               B-3
                                                  1
                                                         and prohibitions imposed upon Permittees by
                                                         these Stipulations are also imposed upon each
                                                          Permittee's agents, employees, contractors, and
                                                         subcontractors, and the employees of each of them.
                                                          (3) Failure or refusal of a Permittee's agents,
     3. Effective Date                            1
     4. Federal Lands                             2      employees, contractors, subcontractors, or their
     5. Fish Spawning Beds.                   D- 12      employees to comply with those Stipulations shall
     6. Installation Commander..               B-3        be deemed to bo the failure or refusal of the Per¬
     7. Oil Spill Control                     D-14        mittee. (4) Eoch Permittee shall require its agents,
     8. Operating Agreement                      25      contractors and subcontractors to include these



    12. Pipeline
    13. Put-to-Bed ..
     14. Right-of-Way
                          ______
     9. Operational Design Level.
    10. Original Permittees
    11. Ownership Agreements..

                          .      .
                                  -
                                              EM6
                                                  l
                                                 25
                                                  3
                                                D-9
                                                  2
                                                         Stipulations in all contracts and subcontracts
                                                          which are mterod into by any of them, together
                                                          with a provision that the othor contracting parly,
                                                          together with its agents, employees, contractors
                                                          and subcontractors, and the employees of each of
                                                          them, shall likewise be bound to comply with these
     15. Segregated Facilities                   21




                                        --
                                                         Stipulations.
     16. Standard Project Flood..             D-17           1.2.4. Permittees shall make separate applica¬
     17. Standdown Period                         16
                                                          tion, under applicable statutes and regulations, for
     18. Stipulations                              3
                                                          authorization to use or occupy Federal Lands in
     19. Thaw Stable Sand and Gravel          D-15
     20. Use Charge                                6      connection with the Pipeline System where the
     21. Vessel                                   14      lands are not within the Right-of-Way granted
     22. Waste        .                        D-ll        by this Agreement.

                                                       D-4




                                                                                                         276
   1.3. Authorized Officer                              termination of the Pipeline System at all time*
   L3JI. For purposes of information and review,         during this Agreement. Such agent shall be a
the Authorized Officer may call upon Permittees         citizen of the United States, or if a corporation,
at any time to furnish any or all data related to       a domestic corporation. Such agent shall lx: a resi¬
construction, operation, maintenance and termin¬        dent of Alaska, or if a corporation, shall be duly
ation activities undertaken in connection with the      authorised to conduct business in Alaska. Permit¬
Pipeline Syrtcm.                                        tees shall cause such agent to maintain in the City
   1JL2. The Authorized Officer may require Per¬        of Anchorage, Alaska, at all times during this
                                                        Agreement an office for the delivery of all docu¬
mittees to make such modification of the Pipeline
System, without liability or expense to the United      ments, orders, notices and other written communi¬
States, as he deems necessary to : protect or main¬     cations, as provided for in Stipulations 1.4.1.
tain stability of geologic material*; protect or        and 1.6.
maintain integrity of the Pipeline System; pre¬            1.4.3. In the event Permittees substitute a new
                                                        common agent at any time, Permittees shall give
vent serious and irreparable harm to the environ¬
ment (including but not limited to fish or wildlife     prompt written notice to the Authorised Officer of
                                                        such substitution, the name and office address in
population!, or their habitats) ; or remove hazards
                                                        Anchorage, Alaska, of the new agent, and a copy
to public health and safety.
                                                        of Permittees' agreement with the new agent. The
   U. Common Agent of Permittees                         United States shall be entitled to rely on each
   1.4.1. Permittees, and each of them, have ap¬        appointment until such time as a notice of the
pointed Alyeska Pipeline Service Company as             substitution of a new common agent takes effect.
their common agent to design and construct the          Kach such notion shall not take effect until two
Pipeline System under and pursuant to an agree¬          (2) full working day* after (and not including)
ment entitled “Agreement for the Design and             the date that, it was received by the Authorized
Construction of the Trans Alaska Pipeline Sys¬          Officer.
tem,” dated August 27,1270, and intend to appoint          LU, Upon the Transfer by any Permittee of
Alycaka Pipeline Service Company as their com¬          any right, title or interest of Permittee in the
mon agent to operate, maintain and terminate the        Kight-of-Wuy or this Agreement, the Transferee
Pipeline System under and generally pursuant to         shall promptly execute and deliver to the Au¬
an Operating Agreement referred to in Section           thorized Officer such documents as may be re-
6.1 of the “Trans Alaska Pipeline System Agree¬        squired to evidence the Transferee's appointment
ment,” dated August 27, 1270. A Power of At¬            and ratification of the then-acting common agent.
torney has been tiled with the Department of the           1.5. Authority of Representative* of Author¬
Interior by each Permittee appointing Aly«kn            ized Officer and Common Agent; Order* of
Pipeline Service Company the true and lawful            Authorized Officer.
agent and attorney-in-fact on behalf of each Per¬          1.5.1. No order or notice given to Permittee*} on
mittee with full power and authority to execute         behalf of the Secretary by the* Authorized Officer
and deliver any and all instruments in connection       or any other Person shall be effective as to Per¬
with the design, construction, or operation of the      mittees unless prior written notice of the delega¬
Pipeline System. Within the scope of such contrac¬      tion of authority to issue, such order or notice has
tual authority, such agent shall represent Permit¬       been given to Permittees in the manner provided
tees, and each of them, with respect to this Agree¬      in Stipulation 1.6.
ment. Such agent is and shall be empowered on              1JS.2. Permittees shall comply with each and
behalf of Permittees, and each of them, to accept       every lawful order directed U> thorn and that is
service of any process, pleadings or other docu¬        issued by the Secretary, the Authorized Officer or
ments in connection with any court or administra¬        by any duly authorized representative of the Au¬
tive proceeding relating in whole or in part to this     thorized Offioer-
Agreement or to all or any part of the Pipeline            1.5-3. Permittees shall cause the common agent
System and to which the United Statca shall bo a        of Permittees to maintain a sufficient number of
 party.                                                  its duly authorized representatives to allow for
   1.4-2. Permittees shall maintain a common agent       the prompt delivery to Permittees, or any of them,
 for the construction, operation, maintenance and        of alt notices, orders and other communications,

                                                   D-5



                                                                                                      277
written or oral, uf the Secretary or Authorized         has bean delivered, either by messenger during
Officer. Koch of the said reprcsenUtivM shall be        normal business hours or by means of registered or
 registered with the Authorized Officer, and shall      certified United Staten mail, portage prepaid, re¬
 be appropriately identified in such manner and on      turn receipt requested, to tho Secretary person¬
such terms ns the Authorized Officer shall pre¬         ally or to Office Room No. 6I&1 in the Department
scribe. Permittees shall cause the common agent         of the Interior Building, ISth 6 C Street*, North-
of Permittee* to consult with the Authorized Of¬        weft, Washington, D.C. dO‘240.
ficer at any time regarding the number and                1.6J>. All written notices and communications
location of such rep return tativm of the common        of any one or more of Permittees that are ad¬
agent.                                                  dressed to the Authorised Officer shall be deemed
   1.6. Order* and Notices                              to have been delivered and rewired by the ad¬
   1.6.1. All decisions, determinations, authoriza¬     dressee when the notice or communication has been
tions, approvals, consents, demands or directions       delivered, cither by messenger during normal burn-
that shall bo made or given by the Secretary or         neaa hours or by means of registered or certified
the Authorized Officer to any one or more of Per¬       United States mail, postage prepaid, return re¬
mittees in oanuertion with the enforcement or ad¬       ceipt requested, to the Authorized Officer per¬
ministration of this Agreement, any applicable law      sonally or to Office Room No. 405, 555 Cordova
or regulation, or any other agreement, permit or        Street, Anchorage, Alaska 99504.
authorization relating in whole or in part to all         1.6.6. The United States or Permittees, by writ¬
or any part of the Pipeline System shall, except        ten notice to the other, may change the office ad¬
as otherwise provided in Stipulation 1.6.21 of this     dress to which written notices, orders, or other
Stipulation, be in the form of a written order or       written communications may be addressed and
notice.                                                 delivered thereafter, subject, however, to the pro¬
  1.6L2. If, in the judgment of the Secretary or        visions of Stipulation 1.4.
the Authorized Officer, there is an emergency that         1.6.7. The regulations of the Department re¬
necessitates (lie immediate issuance to any one or      lating to notices or other communication* by mail
more of Permittees of an order or notice, such           (42 CFR ISIOJS) shall not be applicable to this
order or notice may be given orally, provided, kerw-    Agreement.
ever, that subsequent confirmation of the order or         1.7. Notices To Proceed
notice shall be given in writing as rapidly as is          1.7.1. Permission to construct.
practicable under the circumstances,                       1-7.1.1. Permittees shall not initiate any con¬
  1.6.3. AH written orders, notices or other writ¬      struction of the Pipeline System without prior
ten communications, including telegrams, relating       written permission of the Authorized Officer. Such
to any subject (and regardless of whether they do       permission shall be given solely by means of a
or do not relate to the design or construction of the   written Notice to Proceed issued by the Author¬
Pipeline System) that are addressed to any one          ized Officer. Each Notice to Proceed shall author¬
or more of Permittees shall be deemed to have           ize construction only as therein expressly slated
been delivered to and received by the addressee         and only for the particular Construction Segment
or addressees when the order, notice or other com¬      therein described.
munication has been delivered: (1) either by mes¬         1.7.1.2. Tike Authorized Officer shall issue a
senger during normal business hours or by means         Notice to Proceed only when in his judgment the
of registered or certified United States mail, port¬    construction (including design) and operation
age prepaid, return receipt requested, to the officii   proposals are in conformity with the provisions
of the common agent of Permittees at 1615 South         of these Stipulations.
Braga w Street, Anchorage, Alaska 99004, or (2)           1.7.1.3, By written notice, the Authorized Offi¬
personally to any authorized representative of th«      cer may revoke in whole or in part any Notice to
common agent.                                           Proofed which has been issued when in his judg¬
  1.6.1. All written notices and communications,        ment unforeseen conditions later arising require
including telegrams, of any one or more of Per¬         alterations in the Notice to Proeeod in order to:
mittees that are addresned to the Secretary shall be    protect or maintain nubility of geologic materials;
deemed to have been delivered to and received by        protect or maintain integrity of the Pipeline Sys¬
the Secretary when the notice or communication          tem ; prevent serious and irreparable harm to the

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                                                                                                     278
 environment (including but not limited to fiiih or          1.7.3.2. The summary network analysis diagram
 wildlife populations, or their habitat*) ; or remove     shall be updated at thirty (30) day intervals, as
 hazards to public health and nefety.                     significant change# occur, or as otherwise ap¬
    1.7.1A Prior to submission of any Preliminary         proved in writing by the Authorized Officer.
 Designs or applications for any Notice to Pro¬              1.7.4. Application for Notice to Proceed
 ceed, Permittees and the Authorized Officer shall           1.7.4.1. Permittees may apply for a Notice to
 agree to a schedule for the time, scope and quan¬        Proceed for only those Construction Segments for
 tity of such submissions and applications. The           which the Preliminary Design has been approved
 purpose of such schedule is to assure that Per-          in writing by the Authorized Officer or a waiver
 mittcea’ submissions and applications shall be rea¬      pursuant to Stipulation 1.7.2.2 has been issued !*•
sonable in scope, and filed in a reasonable time          writing by the Authorized Officer.
 frame, insofar as the workload thereby imposed              1.74.2. Before applying for a Notice to Proceed
on the Authorized Officer is concerned. Submittals        for a Construction Segment, Permittee* shall, in
and applications shall be filed in accordance with        such manner as shall be acceptable to the Author¬
said schedule, and the Authorised Officer may re¬         ized Officer, by survey, locate and clearly mark on
 fuse to consider any that are not so filed. The          the ground the proposed centerline of the line
schedule may be reviewed and revised from time            pipe to be located in the Mapping Segment within
to time as may be agreed upon by Permittees and           which the Construction Segment is to be con¬
the Authorized Officer.                                   structed and the location of all Belated Facilities
    1.7.2. Preliminary Design Submissions                 proposed to be constructed in the Mapping
    I.7.2.I. Prior to applying for a Notice to Pro¬       Segment.
ceed for any Construction Segment, Permittees               1.74.3. Each application for a Notice to Pro¬
shall submit the Preliminary Design for that Seg¬         ceed shall be supported by :
ment to the Authorized Officer for approval                    (1) A Final Design.
Where appropriate, each submission shall include               (2) All reports and result* of environmental
the criteria which justify the selection of the Con¬                studios conducted or considered by
struction Modes. The Authorized Officer shall ex¬                   Permittees.
peditiously review each submission and shall do so             (8) All data necessary to demonstrate com¬
within thirty (30) days from the date of his re¬                    pliance with the terms and conditions of
ceipt of the submission. The Authorized Officer                     these Stipulations with respect to that
may request additional information if he deems it                   particular Construction Segment.
necessary.                                                     (4) A detailed network analysis diagram for
   1.7.2.2. Iu appropriate cases, the Authorized                    the Construction Segment, including:
Officer may waive the requirement that a Prelim¬                    Permittees’ work schedules; consents,
inary Design be submitted. In this circumstance,                    permits or authorizations required by
Permittees may proc/vd to apply for a Notice to                     State and Federal agencies and their in¬
Proofed in accordance with Stipulation 1.7.4.                       terrelationships; design and review peri¬
   1.7.3. Summary Network Analysis Diagram                          ods; data collection activities; and con¬
   I.7.3.I. Prior to Final Design submissions, Per¬                 struction sequencing. The detailed net¬
mittees shall submit a summary network analysis                     work analysis diagram shall be updated
diagram for the entire project to the Authorized                    as required to reflect current status of
Officer. The summary network analysis diagram                       the project.
                                                               (5) A map or maps, prepared in such man¬
shall be time-scaled and shall include all activities
                                                                    ner as shall be acceptable to the Author¬
and contingencies which may reasonably be anti¬                     ized Officer, depicting thn proposed loca¬
cipated in connection with the project. The sum¬                    tion in the Mapping Segment within
mary network analysis diagram shall include:                        which the Construction Segment in to bo
       (1 ) Data collection activities ;                            constructed of : (1) the boundaries of nil
       (2) Submittal and approval activities;                       contiguous temporary use areas, and (2)
       (3) Pre-construction, const.ruc.tion and post-               all improvements, buried or above
            construction activities; and                            ground, that are to be constructed within
       (4) Other pertinent data.                                    the Mapping Segment. The Authorized
                                                    D-7




                                                                                                         279
          Officer shall not iaaue a Kotina to Proceed       IX Changes in Conditions
          with construction until he has approved           1.8.L Unforeseen conditions arising during con¬
         all relevant locations on the ground and        struction, operation, maintenance or termination
         temporary boundary markers have been            of the Pipeline System may make it necessary to
         set by Permittees to the satisfaction of        revise or amend these Stipulations to control or
         the Authorized Officer.                         prevent damage to the environment or hazard* to
     (6) Such other data on may be requested by          public health and safety. In that event, Permit¬
         the Authorized Officer either before sub¬       tees and the Authorized Officer shall agree a« to
         mission of the application for a Notice         what revisions or amendments shall be made. If
         to Proceed or at any time during the re¬        they are unable to agree, the Secretary shall have
           view period.
                                                         final authority to determine the matter.
                                                            1.9. Antiquities and Historical Sites
   1.7AA. During review of an application for a
 Notice to Proceed, the relevant portion of the            1.9.1. Permittees shall engag* an archeologist
                                                        approved by the Authorized Officer to provide
 route of the Pipeline may be modified by tho           surveillance, and inspection of the Pipeline System
 Authorized Officer, if, in Ills judgment, environ¬     for archeological values.
 mental conditions or new technological develop¬
                                                           1.9.2. If, in connection with any operation un¬
 ments warrant the modifications. If, during con¬       der this Agreement, or any other Agreement is¬
struction, adverse physical conditions are encoun¬      sued in connection with the Pipeline System, Per
 tered that were not known to exist, or that were        mittees encounter known or previously unknown
 known to exist but their significance was not fully     paleontological, archeological, or historical ritre,
appreciated when the Authorised Officer issued a        Permittere shall immediately notify the Author¬
 Notice to Ihrocecd for the portion of the Mapping      ized Officer and said archaologirt. Permittees'
Segment in which the physical conditions are en¬        archeologist shall investigate and provide an on-
countered, the Authorized Officer may authorize         the-ground opinion regarding tho protection meas¬
deviations from the initially approved location of       ures to be undertaken by Permittee*!. The Author¬
the Pipeline to another location along the same         ized Officer may suspend that portion of Permit¬
general route of the Pipeline at the point or points    tees’ operations necessary to preserve evidence
where the physical conditions are encountered, in¬      pending investigation of the rite.
cluding adequate room for structurally sound tran¬         1.9.3. Six oopies of all survey and excavation
sition. A deviation shall not be constructed with¬      reports shall be filed with the Authorized Officer.
out the prior written approval of the Authorized           1.10. Completion of Use
Officer and, if *o approved, shall conform in all         1.10J. Upon completion of the use of all, or a
respects to the provisions of the approval.             very substantial part, of the Right-of-Way or
   I.7.4.5. The Authorized Officer shall review         other portion of the Pipeline System, Permittees
each application for a Notice to Proceed and all        shall promptly remove all improvements and
data submitted in connection therewith within           equipment, except as otherwise approved in writ¬
ninety (90) days. Said ninety (90) day period           ing by the Authorized Officer, and shall restore
shall begin from the later of the following dates:      the land to a condition that is satisfactory to (lie
                                                        Authorized Officer or at the option of Permitted
   (1 ) Date of receipt by the Authorized Officer of    pay the coat of such removal and restoration. The
an application for a Notice to Proceed.                 satisfaction of the Authorized Officer shall be
   (2) Date of receipt by the Authorized Officer        stated in writing. Where approved in writing by
of the last submittal of additional data pursuant       the Authorized Officer, buried pipe may be left in
to this Stipulation.                                    place, provided all oil and residue are removed
   1.7.4.6. If the Authorized Officer requires Per¬     from the pipe and the ends are suitably capped.
mittees to submit additional data on one or more          1.102. All areas that do not constitute all, or a
occasions, the review period shall begin from the       very substantial port of the Right-of-Way or other
date of receipt by the Authorised Officer of the        portion of tha Pipeline System, utilized pursuant
last submittal.                                         to authorizations issued in connection with th*

                                                   D-8




                                                                                                       280
  Pipeline System, shall be Pui-to-Red by Permit¬           the Right of Way or Access Roads cross exist¬
  tees upon completion of their use unless otherwise        ing roads, foot-trails, winter trails, or other
   directed by the Authorized Officer. Put-to-Bed            righU-of-way.
   is used herein to mean that Access Roads, material          1-12.4. After completion of construction of the
  sites and other areas shall be left, in such stabilized    Pipeline System, and with the concurrence of Per¬
  condition that erosion will be minimized through          mittee, the Authorized Officer may designate areas
   the use of adequately designed and constructed           of the Right-of-Way to which the public shall
   wnterbars, reregetation and chemical surface con¬        haw free and unrestricted access.
  trol; that culverts and bridges shall be removed             1.12. Electronically Operated Devices
  by Permittees in a manner satisfactory to the                1.12.1. Permittee shall screen, filter, or other¬
   Authorized Officer, and that such roads* sitto and       wise suppres any electronically operated devices
  areas shall be closed to use. Permittee#’ rehabilita¬     that arc installed as part of the Pipeline System
  tion plans shall be approved in writing by the Au¬        which are capable of producing electromagnetic
  thorized Officer prior to termination of use of any       interference radiations so that such devices will
  such rood, or any port thereof, in accordance with        not adversely affect the functioning of existing
  Stipulation 2-12.                                         communications systems or navigational aids. In
      L1L Public Improvements                               the event that structures such as towera or build¬
     1-11.1. Permittees shall protect existing tele¬        ings arc to be erected as a part of the Pipeline
  phone, telegraph and transmission lints, roads,           System, their positioning shall be such that they
  trails, fenced, ditches and like improvements dur¬        will not obstruct radiation patterns of line-of-
  ing construction, operation, maintenance and ter¬         sight communications systems, navigational aids,
  mination of the Pipeline System. Permittees shall         or similar systems.
  not obstruct any road or trail with logs, slash, or          1.14. Camping, Hunting. Fishing and Trap¬
'\iehris. Damage caused by Permittees to public             ping
  utilities and improvements shall be promptly re¬            l.M.l. Permittees shall post the Righl-of-Way
  paired by Permittees to a condition which is satis¬       against camping, hunting, foiling, trapping and
  factory to the Authorized Officer.                        shooting within the Right-of-Way. Permittees
    1.12. Regulation of Public Access                       shall prohibit their employees, agents, contractors,
    1.12.1. During construction or termination ac           subcontractor*, and their employees, from engag¬
 Uvitics, Permittees may regulate or prohibit pub¬          ing in ouch activities.
 lic access to or upon any Acotes Road being used              1.143. Permittees shall inform tbeir employee*.
 for such activity. At all other times, Permittees          agent*, contractors, subcontractors, and their em¬
 shall permit free and unrestricted public access           ployees, of applicable laws and regulations relat¬
 to and upon Access Roads, except that with thn             ing to hunting, fohing,and trapping.
 written consent of the Authorized Officer, Per¬               1.15. Small Craft Passage
 mittees may regulate or prohibit public access and            1.15.1. The creation of any permanent obstruc¬
 vehicular traffic on Access Roads os required to           tion to the passage of small craft in streams is
 facilitate operations or to protect the public, wild¬      prohibited.
 life and livestock from hazards associated with               1.15. Protection of Survey Monuments
 operation and maintenance of the Pipeline Sys¬                1.16.1. Permittees shall mark and protect all
 tem. Permittees shall provide appropriate warn¬            geodetic survey monuments encountered during
 ings, flagmen, barricades, and other safety meas¬          the construction, operation, maintenance and ter¬
 ures when Permittees are using Access Roads or             mination of the Pipeline System. Those monuments
 regulating or prohibiting public access to or upon         are not to be disturbed; however, if such a dis¬
 Acoeee Roads.                                              turbance occurs, the Authorized Officer shall be
    1J2L2. During construction of the Pipeline Sys¬         immediately notified thereof in writing.
 tem, Permittees shall provide alternative routes             1.162. If any land survey monuments, corners,
 for existing roads and trails as determined by             or accessories (excluding geodetic survey monu¬
 the Authorized Officer whether or not these roads          ments) are destroyed, obliterated or damaged,
 or trails are recorded.                                    Permittees shall employ a qualified land surveyor
    1.123. Permittees shall make provisions for             to reestablish or restore name in accordance with
 suitable permonent crossings for the public where          the “Manual of Instruction for the Survey of Pub-
                                                        D-9



                                                                                                            281
 lie Lands” and shall record such surrey in the         tions systems, and reasonable surface and air
 appropriate records. Additional requirements far       transportation during the construction, operation,
 the protection of monuments, comers, and bear¬         maintenance and termination of the Pipeline Sys¬
 ing trees may be prescribed by the Authorized          tem. Whenever possible, Permittees shall be noti¬
 Officer.                                               fied in writing by the Authorized Officer in ad-
    1.17. Fire Prevention and Suppression               vanoe regarding the number of persoos for whom
    1.17.1. Permittee# shall promptly notify the        such services and facilities will be required.
 Authorized Officer and take all measures neces¬          1.20. Health and Safety
sary or appropriate for the prevention and sup¬           1.20.1. Permittees shall take all measures neces¬
 pression of fines in accordance with 48 CFR           sary to protect the health and safety of all per¬
 2801.1-5 (d). Permittees shall comply with the in¬     sons affected by their activities performed in con¬
structions and directions of the Authorized Of¬         nection with the construction, operation, mainte¬
 ficer concerning the use, prevention and suppres¬      nance or termination of the Pipeline System, and
sion of fires. Use of open fires in connection with     shall immediately abate any health or safety haz¬
 construction of the Pipeline System is prohibited     ards. Permittees shall immediately notify the
 unless authorized in writing by the Authorized         Authorized Officer of all serious accidents which
 Officer.                                              occur in connection with such activities.
   1.18. Surveillance and Maintenance                     1.21. Conductor Operations
   1.18.1. During the construction, operation,            1.21.1. Permittees shall perform all Pipeline
 maintenance and termination of the Pipeline Sys¬      System operations in a safe and workmanlike man¬
tem, Permittees shall conduct a surveillance and        ner so as to ensure the safety and integrity of the
 maintenance program applicable to the subarctic        Pipeline System, and shall at all times employ
and arctic environment This program shall be           and maintain personnel and equipment sufficient
designed to: (1) provide for public health and         for that purpose. Permittees shall immediately no¬
safety; (3) prevent damage to natural resources;       tify the Authorized Officer of any condition, prob¬
(3) prevent erosion; and (4) maintain Pipeline         lem, malfunction, or other occurrence which in
System integrity.                                      any way threatens the integrity of the Pipeline
   1.1K2. Permittees shall have a communication        System.
system that ensures the transmission of informa¬           132. Applicability of Stipulations
tion required for the safe operation of the Pipeline      1.22.1. Nothing in these Stipulations shall be
System.                                                oonstruod ss applying to activities of Permittees
  1.18.3. Permittees shall maintain complete and       that have no relation to the Pipeline System.
up-to-date records on construction, operation,
                                                          L22.2. Nothing in these Stipulations shall be
maintenance and termination activities performed       const rued to affect any right or cause of action
in connection with the Pipeline System. Such rec¬      that otherwise would be available to Permittees
ords shall include surveillance data, W*k and break    against any person other than the United States.
records, necessary operational data, modification
records and *ucb other data as the Authorized             2. ENVIRONMENTAL
Officer may require.                                      2.L Environmental Briefing
  1.18.4. Permittee* shall provide and maintain           2.1.1. Prior to, and during, construction of tho
Access Roads and airstrips, the number and lo¬         Pipeline System, Permittees shall provide for en¬
cation of which (hall be approved by the Auth¬         vironmental and other pertinent briefings for con¬
orized Officer, to ensure that Permittees' mainte¬     struction and other personnel by such Federal em¬
nance crews arid Federal and State representatives     ployees as may be designated by the Authorized
shall hare continuing arena to the Pipeline            Officer. Permittees shall arrange the time, place
System.                                                and attendance for such briefings upon requee* by
  1.19. Housing and Quarters                           the Authorized Officer. Permittees shall bear all
  1.19.1. Permittees shall furnish, on a reimbursa¬    coots of such briefings other than salary, per diem,
ble basis, such representatives of the United States   subsistence, and travel costs of Federal employees.
as may be designated by the Authorized Officer         In addition, Permittee® shall separately arrange
with adequate meals, living quarters and office        with the State of Alaska for sixh similar briefings
space, reasonable use of Permittees’ communica¬        as the State may desire.

                                                   l>-10



                                                                                                    282
  12. Pollution Control                                      2.2.6.2. All waste generated in construction, op¬
   2.2.1. General                                         eration, maintenance and termination of the Pipe¬
   2.2. LI. Permittee* shall conduct all activities as¬   line System shall be removed or otherwise dis¬
sociated with the Pipeline System in a manner that        posed of in a manner acceptable to the Authorized
will avoid or minimi** degradation of air, land           Officer. All applicable standards and guidelines
and water quality. In the construction, operation,        of the Alaska State Department of Environmental
maintenance and termination of tho Pipeline               Conservation, the United Slates Public Health
System, Permittees shall perform their activities         Service, the Environmental Protection Agency,
in accordance with applicable air and water qual-         and other Federal and State agencies shall be
ity standards, related facility siting standard*,         adhered to by Permittees. All incinerators shall
and related plans of implementation, including            meet the requirements of applicible Federal and
hut not limited to standards adopted pursuant to          State laws and regulations and shall be used with
the Clean Air Act, as amended, 42 U.S.C. § 18G7           maximum precautions to prevent foreet and tun¬
«t »*q., and the. Federal Water Pollution Control         dra firea. After incineration, material not con¬
Act, as amended, 33 U.S.C. fi 1321 ei t+q.                sumed in the incinerator shall be diapoard of in a
  222. Water and Land Pollution                           manner approved in writing by the Authorised
  22.2.1. Permittee* shall comply with applicable         Officer. Portable or permanent waste disposal sys¬
“Water Quality Standards" of the State of Alaska          tem* to be used shall be approved in writing by
as approved by the Environmental Protection               the Authorised Officer.
Agency.                                                      22. Buffer Stripe
  2.2.22. Mobile ground equipment shall not. be              22.1. Public Interest Areas
operated in InJcna, streams or rivers unless such            2.21.1. No construction activity in Connection
operation is approved in writing by the Author¬           with tho Pipeline System shall be conducted
ized Officer.                                             within one-half (Vfc) mile of any officially desig¬
  222. Thermal Pollution                                  nated Federal, State or municipal park, wildlife
  22J.L Permittees shall comply with the stand¬           refuge, research natural area, recreation area, rec¬
ards set for thermal pollution in the State of            reation site, or any registered National Historic
Alaska “Water Quality Standards,” as approved             Site or National Landmark, unless Such activity
by the Environmental Protection Agency.                   is approved in writing by the Authorized Officer.
   2JL-L Air Pollution and Ice Fog                           2.12. Vegetative Screen
   2.2. 4.1. Permittees shall utilize and operate all        2.12.1. Permittees shall not cut or remove any
facilitate and devices used in connection with the        vegetative cover within a minimum five hundred
Pipeline System so as to avoid or minimize air            (GOO) foot strip between State highways and ma¬
pollntion and ice fog. Facilities and deriem which        terial rite* unless such cutting or removal i* ap-
cannot be prevented from producing ice fog shall          p roved in writing by the Authorized Officer.
be located so as not to interfere with airfield*.            2112. Where the Right-of-way crosses State
communities or roads.                                     highways, a screen of vegetation native to the spe¬
  22.4.2. Emissions from equipment, installation*         cific retting shall be established over disturbed
and burning materials shall meet applicable Fed¬          area* unless otherwise approved in writing by the
eral and State air quality standards.                     Authorized Officer.
   2-2.5. Pesticides, Herbicides and other Chem              2.13. Streams
>cals                                                        2.111. The Pipeline System shall be located to
  12.5.1. Permittees shall use only non-persistent        as to provide three hundred (800) foot minimum
and immobilo types of pesticides, herbicides and          buffer strip* of undisturbed land along streams
other chemicals. Each chemical to bo ured and its         unless otherwise approved in writing by the Au¬
             constraint shall be approved in writ¬        thorized Officer.
ing by tho Authorized Officer prior to use.                  2.4. Erosion Control
  2.2.6. Sanitation and Waste Disposal                       2.4.1. General
  2.2.6.I. “Waste” means all discarded matter, in¬           2, 4.1.1. Pcmnittew shall perform all PipcJinn
cluding but not limited to human waste, trash,            System construction, operation, maintenance and
garbage, refuse, oil drums, petroleum products,           termination activities so a* to avoid or minimize
ashes and equipment.                                      disturbance to vegetation.
                                                      D-ll




                                                                                                        283
   £4.1.2. The design of the Pipeline System shall         2A.1J. Permittees ahall provide for uninter¬
provide for the construction of control facilities      rupted movement and safe passage of fish. Any
that will avoid or minimise erosion.                    artificial structure or any stream channel change
   24.1A The erosion control facilities shall be        that would cause a blockage to fish shall be pro¬
constructed to avoid induced and accelerated ero¬       vided with a fish passage structure or facility tliat
sion and to lessen the possibility of forming new       meets all Federal and State requirements. The
drainage channels resulting from Pipeline System        proposed design shall be submitted to the Author¬
activities. The facilities shall bo designed and op¬    ized Officer in accordance with Stipulation 1.7.
erations conducted in such a way as to aToid or           2A1JL Pump intakes shall be screened to pre¬
minimize disturbance to the. thermal regime.            vent harm to fish.
   2.4.2. Stabilization                                   2.5.1-1. Abandoned water diversion structures
   24.2.1. Surface materials taken from disturbed       shall be plugged and stabilized to prevent trap¬
areas shall be stockpiled and utilized during n«        ping    or stranding of fish.
toration unless otherwise approved in writing by           225.14. If material site# are approved adjacent
the Authorized Officer. Stabilization practices, as     to or in certain lake*, rivere, or streams, the Au¬
determined by the needs for specific sites, shall       thorized Officer may require Permittees to con¬
include but shall not be limited to seeding, plant¬     struct levees, l*rma or other suitable means to
ing, mulching, and the placement of mat binders,        protect fiah and fish passage and to prevent mira¬
toil binders, rock or gravel blankets, or structures.   tion of streams or lakes.
   24.2.2. All disturbed areas shall be left in a          2.5.2. Fish Spawning Beds
stabilized condition satisfactory to the Authorized        2.5.2.I. “Fish Spawning Beds” means the areas
Officer. Such satisfaction shall be stated in writing   where anadromous and resident fish deposit their
lay the Authorized Officer.                             ««**ÿ
   2.4A Creasing of Stream#, Rivera or Flood               2.5.222. Permittees shall avoid channel changes
Plains
                                                        in Fish Sjxawning Beds designated by the Author¬
   2.4 Al. Permittees shall prevent or ininimizo        ised Officer; however, where channel changes can¬
erosion at stream and river crossings and those         not he avoided in such beds, new channels shall bn
parts of the Pipeline System within flood plains,       constructed according to written standards sup¬
as defined in Stipulation 3.6.                          plied by tho Authorized Officer.
   24-1.2. Temporary arems over stream banks               2:5A3. Filth Spawning Beds shall be protected
shall be made through use of fill ramps rather          from sediment where soil material is expected to
than by cutting through stream hanks, unlws oth¬        be suspended in water as a result of construction
erwise approved in writing by the Authorized Offi¬      activities. Settling basins shall be constructed to
cer. Permittees shall remove such nunps upon ter¬       intercept silt before it reaches streams or lakes.
mination of seasonal or final use. Ramp materials          2.5.24. Permittees shall comply with any apo¬
shall be disposed of in a manner approved in writ'      dal requirements made by the Authorized Officer
ing by the Authorized Officer.                          for a tJtrcam system in order to protect Fish
   24.4. Seeding and Planting.                          Spawning Beds. Permittees shall repair all dam¬
   24.4.1. Seeding and planting of disturbed areas      age to Fish S]>awning Bedn caused by const ruc¬
shall he conducted as soon as practicable and, if       tion, operation, maintenance or termination of the
necessary, shall be repeated until vegetation is        Pipeline Syttem.
successful, unless otherwise approved in writing           22L1 Zones of Restricted Activities
by the Authorized Officer. All other restoration           2.5..1.1. Permittees’ activities in connection with
shall I# completed as soon as possible.                 the Pipeline System in key fish and wildlife areas
   24.5. Excavated Material                              nn y be restricted by tho Authorized Officer during
   24.5.1. Excavated material in excess of that          periods of fish and wildlife breeding, nesting,
required to backfill around any structure, includ¬      spawning, lambing or calving activity and during
 ing the pipe, shall be disposed of in a manner ap       major migrations of fish and wildlife. The Au¬
 proved in writing by the Authorized Officer.            thorized Officer shall give Permittees written
   2& Fish and Wildlife Protection                       notice of such restrictive action. From time to time,
   2.5.L Passage of Kiah                                 the Authorized Officer shall furnish Permittees

                                                    D-12



                                                                                                        284
a list of arena where such actions may be required,       the full stwmpog* value of the timber to be cut, re¬
 together with anticipated dates of restriction.         moved or destroyed-
    2.5.4. Big Game Movements                                2.72.2. All trots, snags, and other woody ma¬
    2.5.4.1. Permittees shall construct and maintain     terial cut in connection with clearing operations
 the Pipeline, both buried and abovo ground sec¬         shall be cut so that the resulting stumps shall not
 tions, so as to assure free passage and movement        be higher than six (6) inchrs measured from the
 of big game animals.                                    ground on the uphill side.
    2.6. Materials Sites                                    2.722. All trees, snags and other woody ma¬
    2.6.1. Purchase of Materials                         terial cut in connection with clearing operation*
    2.6.1.1. If Permittees require materials from        shall be felted into the area within the clearing
the public lands, Permittees shall make applica¬         boundaries and away from water courses.
 tion to purchase such materials in accordance with         2.72-4- Hand clearing shall be used in areas
43 CFR, Part 3610. Permittees shall submit a             where the Authorised Officer determines that use
mining plan in accordance with 43 CFR, Part 23.         of heavy equipment would be detrimental to exist¬
 No materials may be removed by Permitted with¬          ing conditions.
out the written approval of the Authorized Offi¬            2.72.5. All debris resulting from clearing oper¬
cer.                                                    ations and construction that may block stream flow,
    2.6.12. Insofar os possible, use of existing ma¬    delay fish passage, contribute to flood damage, or
terials sitea will be authorized in preference to        result in stream bed scour or erosion shall bo
new sites.                                               removed.
   2.6.12. Gravel and other construction materials          2.72.6. Logs shall not be skidded or yarded
shall not be taken from stream beds, river bods,        across any ftream without the written approval of
l&kc shores or other outlets of lakes, unless the        the Authorised Officer.
taking is approved in writing by the Authorized             2.72.7. No log landing shall be located within
Officer.                                                three-hundred (300) fret of any water course,
    2.6.2. Layout of Materials Sites                        2.7.22. All slash shall be disposed of in con¬
    2.62.1. Materials site boundaries shall be shaped   struction pads or Access Roads unless otherwise
in such a manner as to blond with surrounding           directed in writing by the Authorized Officer.
natural land patterns. Regardless of the layout             2.8. Disturbance of Natural Water
of materials rites, primary emphasis shall be               22.1. All activities of Permittees in connection
placed on prevention of soil erosion and damage to      with the Pipeline System that may create new
vegetation.                                             lakes, drain existing lakes, significantly divert
   2.7. Clearing                                        natural drainages, permanently alter stream hy¬
  2.7.1. Boundaries                                     draulics, or disturb significant areas of stream
   2.7.1.1. Permittees shall Identify approved          bods are prohibited unless such activities along
clearing boundariaa on the ground for each Con¬         with necessary mitigation measures arc approved
struction Segment prior to beginning clearing op¬       in writing by the Authorized Officer.
erations. AH timber and other vegetative material           2.9. Off Right-of-Way Traffic
outside, cloaring boundaries and all blazed, painted        2.9.1. Permittees shall not operate mobile
or posted tree* which are on or mark clearing           ground equipment off the Right-of-Way, Access
boundaries are reserved from cutting and re¬            Roads. State highways, or authorized areas, unless
moval with the exception of danger trees or snag*       approved in writing by the Authorized Officer or
designated as such by the Authorized Officer.           when necessary to prevent harm to any Person.
   2.72. Timber                                             2.10. Aesthetics
   2.72.1. Prior to initiating clearing operations,         2.10.1. Permittees shall consider aesthetic values
Permittees shall notify the Authorized Officer of       in planning, construction and operation of the
Die amount of merchantable timber, if any, which        Pipeline System. Where the Right-of-Way erotwes
will be cut, removed or destroyed in the construc¬      a State highway in forested terrain, the straight
tion and maintenance of the Pipeline System, and        length of the Pipeline Right-of-Way visible from
shall pay the United States in advance of such          the highway shall not exceed six hundred (600)
construction or maintenance activity, such sum of       feet in length, unless otherwise approved in writ¬
money as the Authorized Officer determines to be        ing by the Authorized Officer. The Authorised Of-
                                                   D-13



                                                                                                      285
ficer may impose such other requirement* as he             2.1 4. Contingency Plans
deems necessary to protect aesthetic values.              2.14.1. It is the policy of the Department of the
   2.1L Use of Explosives                               Interior that there should be no discharge of Oil
   2.11.1. Permittees 9hall subnut a plan for use of    ot other pollutant into or upon lands or waters.
explosives, including but not limited to blasting       Permittees must therefore recognize their prime
techniques, to the Authorised Officer in accord¬        responsibility for the protection of the. public and
ance with Stipulation 1.7.                              environment from the effects of spillage.
   2.11.2. No blasting shall be done under water or       2.14.2. Permittees shall submit their contin¬
within one quarter (%) mile of streams or lakes         gency plans to the Authorized Officer at least one-
without a permit from the Alaska Department of          hundred and eighty (180) days prior to scheduled
Fish and Game, when such a permit is required          start-up. The plans shall conform to this Stipula¬
by State law or regulation.                             tion and the National Oil Hazardous Substances
   2.12. Restoration                                   Pollution Contingency Plan. 30 F.R. 1021ft, August
   2.12.1. Arens disturbed by Permittees shall be       20, 1971, and shall : (1) include provisions for Oil
restored by Permittees to the satisfaction of the      Spill Control •; (2) specify that the action agen¬
Authorized Officer as stated in writing.               cies responsible for contingency plans in Alaska
   ZVLZ All cut and fill slopes shall be left in a     shall be among the first to be notified in the event
stable condition.                                      of any Pipeline System failure reeulting in an Oil
   2.12.3. Mutcrials from Access Roads, haul           spill; (3) provide for immediate corrective action
ramps, berms, dikes, and other earthen structures      including Oil Spill Control and restoration of
shall be disposed of os directed in writing by the     the affected resource; (4) provide that the Au¬
Authorised Officer.                                    thorized Officer shall approve any materials or
   2.12.4. Vegetation, overburden and other mate¬      device used for Oil Spill Control and shall ap¬
rials removed during clearing operations shall be      prove any disposal sites or techniques selected to
disposed of by Permittee in a manner approved          handle oily matter; and (ft) include separate and
in writing by the Authorised Officer.                  specific techniques and schedules for cleanup of
   2.12.5. Upon completion of restoration, Permit¬     Oil spills on land, lakes, rivers and streams, are.
tees shall immediately remove all equipment and        and estuaries.
supplies from thesite.                                    2.14.3. Prior to Pipeline start-up, such plans
   2.13. Reporting of Oil Discharges                   shall bo approved in writing by the Authorized
                                                       Officer, and Permittees shall demonstrate their
   2.13.1. A discharge of Oil by Permittees into or    capability and readiness to execute the plana. Per¬
upon the. navigable waters of the United States,       mittees shell update as appropriate the plans and
adjoining shoreline*, or into or upon the waters       methods of implementation thereof, which shall
of the contiguous zone in violation of the Federal     be submitted annually to the Authorized Officer
Water Pollution Control Act, as amended, 33            for his written approval.
U.S.C. § 1321 ft t*q. and the regulations issued
thereunder, or in violation of applicable laws of         2.14.4. If during any phase of the construction,
the State of Alaska and regulations issued there¬      operation, maintenance or termination of the Pipe¬
under, is prohibited. Permittees shall give im¬        line, any Oil or other pollutant should be dis¬
mediate notice of any such discharge to: (1) the       charged from the Pipeline System, the control
Authorised Officer; and (2) such other Federal         and total removal, disposal and cleaning up of
and State officials as are required by law to be       such Oil or other pollutant, wherever found, shall
given such notice.                                     be tho responsibility of Permittees, regardless of
   2.13.2. Permittees shall give immediate notice      fault. Upon failure of Permittees to control, dis¬
of any spill or '.callage of Oil or other pollutant    pose of, or clean up such discharge, the Author¬
from the Pipeline, the Valdez terminal facility,       ized Officer may take such measures as he deems
or any storage facility to: (1) the Authorized         necessary to control and clean up the discharge
Officer; and (2) such other Federal and State            < A* U.fd la this Stipulation 2,14.2. OU Split Cootrol la
officials as are. required by law to be given such     (ItOoed   at: It) detertlon of the spill; <2) locatlm of the
 notice. Any oral notice shall be confirmed in writ¬   spill ; (8) confinement ot the spill ; and (4) cleanup of the
 ing as soon as possible.                              aptll.

                                                   D-14



                                                                                                              286
at the full expense of Permittees. Such action by       sore compliance with the approved design specifi¬
 the Authorized Officer shall not relieve Permittees    cations and these Stipulations.
of any responsibility as provided heroin.                 .'1.2.2..,i. Welder qualification tests shall be by
   3. TECHNICAL                                        destructive means, except that operators of auto¬
   3.L General                                          matic welding equipment for girth welding of
   3.1.1. The following standards shall bo complied     tank seams shall ba tested by radiography in ac¬
 with in design, construction, operation and termi¬    cordance with ASME Boiler and Pressure Vessel
nation of the Pipeline System.                          Code, Section 9, Subsection Q- 21(b).
   3.2. Pipeline System Standards                         3.2.2.6. Lightning protection shall conform to
   33.1. General Standards
   3.2.I.I. All design, material and construction,      Protection Code—1968.”
                                                                                          —
                                                        the requirements of ANSI 05.1 1969, “Lightning

operation, maintenance and termination practice*          333. Standards for Access Roads
employed in the Pipeline System shall bo in ac¬           3.2.3.I. Design., materials and construction prac¬
cordance with safe and proven engineering prac¬        tices employed for Access Roads shall be in ac¬
tice and shall meet or exceed the following            cordance with safe and proven engineering prac¬
t&andarda :                                            tice and in accordance with the principles of con¬
      (1) US A. Standard Code for Pressure Pip¬        struction for secondary roads for the subarctic
           ing, ANSI B 31.4, “Liquid Petroleum         and arctic environments.
           Transportation Piping System."                 3333 Permittees shall submit a layout of each
      (2) Department of Transportation Regula¬         proposed Access Road for approval by the Author¬
           tions, 49 CFR, Part 195, “Transportation    ised Officer in accordance with Stipulation 1.7.
           of Liqiuds by Pipeline."                       3.23.3. Access Roads shall be constructed to
      (8) ASME Gas Piping Standard Committee,          widths suitable for safe operation of equipment
          15 Dec. 1970: “Guide for Gas Transmis¬       at the travel speeds proposed by Permittee*.
          sion and Distribution Piping System."           3.23.4. The maximum allowable grade shall be
      (4) Department of Transportation Regula¬         12 percent unless otherwise approved in writing
          tions, 49 CFR, Part 19*2, “Transportation    by the A uthorized Officer.
          of Natural and Other QM by Pipelines:           33. Construction Mode Requirements
          Minimum Federal Safety Standard*."              3.3.1. The selection of the Construction Mode
   33.13. Requirements in addition to those set        (elevated or buried) shall be governed by the fol¬
forth in the above minimum standards may be            lowing criteria: (1) There shall bean unobstructed
imposed by the Authorized Officer os necessary to      air space of at least two feet between the pipe and
reflect the impact of subarctic and arctic environ¬    ground surface; or (2) There shall be no girenter
ments. If any standard contains a provision which      heat transfer from the pipe to the ground than
is inconsistent with a provision in another stand¬     results from the use of an unobstructed air space
ard, the more stringent shall apply.                   of at least two (2) fret between the pipe and
   332. Special Standards                              ground surface; or (3) Below the level of tho pipe
   333-1. The design shall also provide for re¬        axis the ground shall consist of competent bed¬
motely controlled shutoff valves at each pump sta¬     rock, soil naturally devoid of permafrost, or if
tion ; remotely controlled mainline block valves       frozen, of Thaw- Stable Sand and Gravel.* Above
(intended to control spills) ; and additional valves   the. level of the pipe axis other materials may ho
located with tho best judgment regarding wildlife      present but it must be shown that they will remain
habitat, fish habitat, and potentially hazardous       stable under all credible conditions ; or (4) Results
areas.                                                 of a detailed field exploration program and anal¬
  3323 All practicable means shall be utilized         ysis indicate that pipe rupture and major terrain
to minimize injury to the ground organic layer.
  3323. Radiographic inspection of all main line         •Thaw-Stable Sand and Grovel in defined as material
                                                       meeting Hie following requirements: (a)    Material Ilea
girth welds and pressure testing of the Pipeline       within the claaaea GW. OP. SW. and 8P. (Unified Bag
shall be conducted by Permittees prior to placing      Classification) but will* up to 8% by weight pasalng the
                                                       #200 11.8. aUndard *lev»: if an Inorganic gmnalar soli
the system in operation.                               contain* more than 0& tinea than the #200 sieve. Its
  332.4. Permittees shall provide for continuous       thaw-stability most be Justified, (b) Th    in no   t-xpr-K*
                                                       Ittgvcgated  or massive) Ic*. (c) Thawing of the material
inspection of Pipeline System construction to «n-      in rUv will not remit In excess pore-pressure.

                                                   D-15



                                                                                                              287
dittrupUon will not occur at any place from soil                 tiotw shall be approved in writing by the Author¬
 instability. Effects and their interaction, which               ized Officer) ; (2) rapid programmed shut¬
are to be analysed on a mile by mile basis to justify            down and prompt close inspection of system
the proposed Construction Mode, shall include but                integrity in the event of ground motion reaching
not. be limited to, thaw plug stability, differential            the Operational Design 1-cvel; and (3) a special
settlement, seismic loading and weakening, and                   contingency plan for Oil Spill Control for each
 possible movement resulting from slope insta¬                   such warn Wally hazardous area which shall be
bility.*                                                         filed in accordance with Stipulation 2.14. This
   As a prerequisite for the U9e of this criterion, an           plan shall specifically consider expected field con¬
acceptable comprehensive monitoring system of                    ditions in the particular area in the aftermath of a
the Pipeline shall be developed which will include               destructive earthquake.
but not be limited to making deformation meas¬                      3.4.2. Fault Displacement*
urements sufficiently sensitive and prompt to de¬                   3.4.2L1. Prior to applying for a Notice to Pro¬
tect the approach to operational tolerance limits                ceed for any Construction Segment, Permittee*
(which shall be clearly specified) of the Pipeline;              •hall satisfy the Authorixad Officer that all recog¬
design specifications, operational requirements,                 nizable or reasonably inferred faults or fault
and feasibility analysis of such monitoring system               zones along the alignment within that segment
shall be submitted in accordance with Stipulation                have been identified and delineated, and that thn
1.7. Such system shall be operational prior to                   risk of Oil leakage resulting from fault movement
transmission of Oil through the Pipeline.                        and ground deformation has been adequately as¬
   3.4. Earthquakes and Fault Displacements                      sessed and provided for in the design of the Pipe¬
   &4.1. Earthquakes                                             line for that segment. Evaluation of said risk
                                                                 shall be based on geologic, geomorphic, geodetic,
   3.4.1.1. The Pipeline System shall be designed,               seismic, and other appropriate, scientific evidence
where technically feasible, by appropriate appli¬                of past or present fault behavior and shall be com¬
cation of modern, statc-of-the art seismic design                patible with the design earthquakes tabulated
procedures to prevent any Oil leakage from Lite ef¬              above and with observed relationships between
fects (including seismic shaking, ground deforma¬                earthquake magnitude and extent and amount of
tion and earthquake-induced mass movements) of
                                                                 deformation and fault slip within the fault zone.
earthquakes distributed along the route as follows :                3.4.2.2. Minimum design criteria for a segment
                                                    Klahtfr
Zone :                                            magnltu it     of the Pipeline traversing a fault zone that is rea¬
    Valdez to Willow Lake                                tt      sonably interpreted as active, shall be: (1) that
    Willow Lake to Paxwn                                 ro      the Pipelino resist failure resulting in leakage
    Puiaon to Dona el ly Done.
    Donnelly Dome l© 87 da*. N
                                      .......            0.0
                                                         7.0
                                                                 from two feet of horizontal and/or vectWal din-
   C7 deg, N. to I'nuihoe lUy                           as       placement in the foundation material anywhere
                                                                 within the fault zone ; and (2) that no storage tank
  34.1.2. Where such design is not technically                   or pump station be located within the fault zone.
feasible, the potential damage from an Oil spill                    3.4.2..'). Where the Pipeline cnoares a fault or
shall be minimized by special design provisions                  lies within a fault zone that is reasonably inter¬
that shall include, but shall not be limited to: (1)
                                                                 preted as active, Permittees shall monitor crustal
a network of ground-motion detectors that con¬
                                                                 deformation in the vicinity of thn Pipeline. Such
tinuously monitor, rooord and instantaneously sig¬
                                                                 monitoring shall include annual geodetic observa¬
nal tha occurrence of ground motion in the vicin¬
                                                                 tion of permanent reference marks established
ity of the Pipeline reaching the Operational
                                                                 on stable ground. Said reference marks shall be
Design Iicvel ' (the critical levels of ground mu¬
                                                                  positioned so as to form closed figures and to pro¬
  * lire* tine of mil variability abd/or unique hydrologic        vide for detection of relative horizontal and ver¬
condition* la active flood plain*, some of the requirement*      tical displacement* as small as 0.10 ft. across prin¬
of Stipulation S-Z.l may not be met In those location!. In
anch caaaw proposed design* Including apodal doatgn              cipal individual faults within the fault zone and
and/or conatnictl tlon procedure* whore required by throe        to provide for monitoring of crustal strain with
condition* mint lie »u limit ted with JuatUlcatlon to the An-
thorlaed Officer for approval In accordance with Stipula¬        an abnolut* error of two parts per million within
tion U                                                            the fault zona. Further, where annual slip on a
  * Hlzlint level that mold not product general pipe deforma¬
tion auflkleot to limit oporatlooa.                              fault exceeds 0-10 ft for two successive yearn,
                                                              D-16



                                                                                                               288
Permittees ahull install recording or telemetering     of scour, channel migration, undercutting, ice
alip-metera. Data obtained from tbe monitoring         forces and degradation of permafnxet.
8 Kali be provided to the Authorized Officer at spe¬      3.6.1.1.1X In flood plains, appropriate construc¬
cified regular intervals throughout the operational    tion procedures shall be used wherever there is
life of the Pipeline. Said data shall be u*od by the   potential channelization along the pipe.
Permittees to aid in the initiation of corrective         3X1.1.1X The pipe trench excavation slmJI
 measures to protect the Pipeline from failure         stop an adequate distance from the water crossing
caused by tectonic deformation that would re¬          to leave a protective plug (unexcavated material)
sult in leakage.                                       at each bank. Three plugs shall be left in place
   3.5. Slope Stability                                until the stream lied excavation is complete and
   3X1. Areas subject to mudflows, landslides,         the pipe laying operation is begun. The plugs shall
avalanches, rock falls and other types of masts        not be completely removed until absolutely neces¬
movements shall be avoided where practicable in        sary. The trench shall be hackfllled with stable
locating the Pipeline. Where such avoidance is         materia] as soon as the pipe is laid.
not practicable, the Pipeline design, based upon          3X1.2. Culverts and Bridges.
detailed field investigations and analysis, shall         3.6.1.2.1. Culverts and bridges necessary for
provide measures to prevent the occurrence of, or      maintenance of the Pipeline shall be designed to
protect the Pipeline against, the effects of maw       accommodate a fifty (50) -year flood in accordance
movements,                                             with criteria established by the American Associa¬
  3.6. Stream and Flood Plain Crossings and            tion of State llighway Officials and the Federal
Erosion                                                Highway Administration and endorsed by the
  3.6.1. General                                       State of Alaska Department of Highway*.
  3X1.1. For each region through which the Pipe¬          3.6.2. Erosion
line passes, the Pipeline shall be designed to with¬      3,6.2.1. Where necessary because of outfall ero¬
stand or aocommod&te the effects (including            sion, stilling basins shall be constructed at the out¬
runoff, stream and flood plain eroskm, meander         flow end of culverts. To prevent erosion the pool
cutoffs, lateral migration, ice-jams, and icings) of   sides shall be stabilized by appropriate methods;
those meteorologic, hydrologic (including surface      e,g., by the use of riprap.
and subsurface) and hydraulic conditions con¬             3.6.2.2. Slopes of cuts through stream banka
sidered reasonably possible for the region. The        shall be designed and constructed to minimize ero¬
following standards shall apply to such Pipeline       sion and prevent slide*.
design:                                                   3.6.2 3. Erosion control procedures shall accom¬
  3.6.1.1.1. For stream encasing* and portions of      modate and be based on the runoff produced by
the Pipelino within the flood plain.                   the maximum rainfall rale and snow melt rate
                                                       combination reasonably characteristic of the re¬
   3X1.1.1.1. The Pipeline shall crow streams          gion. The procedures shall also accommodate ef¬
underground unless a different means of crowing
                                                       fects that result from thawing produced by
ia approved in writing by the Authorized Officer.      flowing or ponded water on permafrost terrain.
   3X1.1.1.2. The design Rood shall bo based on          3.7. Sen Wave*
tho concept of the “Standard Project Flood” as de¬       3.7.1. Oil transfer facilities at the Valdez termi¬
fined in Corps of Engineers Bulletin 52-8, Part 1.     nal shall be protected by cut-off devices designed
   3.6.1.1.1.3. The depth of channel scour shall be    and located to prevent major Oil leakage from
established by appropriate field investigations and    breaking of pipes by destructive w» waves com¬
theoretical calculations using those combinations      parable to those generated in Port Valdez by llie
of water velocity nnd depth that yield the maxi¬       March 27, 1964 earthquake. Design for such pro¬
mum value. At the point of maximum scour, the          tective features shall bo submitted in accordance
cover over tho pipe shall be at least twenty (20)      with Stipulation 1.7.
percent of the computed scour, but not less than         3X Glacier Surges
four (4) feet.                                           3X1. Surveillance systems sufficient to give ade¬
   3.6.1.1.1.4. For overhead crearing* comparable      quate warning of impending surge* on any glacier
analyst* shall ho made to ensure that support          that could damage the Pipeline shall be instituted
structures are adequately protected from the effects   prior to transmission of Oil through the pipe. Pro-
                                                   D-17


                                                                                                     289
cedures for initiation and operation of such sur¬      lection over the entire surface of the pipe; (4)
veillance systems and protective procedures in the     details of plans for monitoring cathodic protection
event of such surges shall be submited in accord¬      current including spacing of current monitors;
ance with Stipulation 1.7.                              (5) provision for periodic intensive surveys of
  3.9. Construction and Operation                       trouble spots, regular preventive maintenance sur¬
  3.9J. All construction, operation, maintenance,       veys and special provisions for abnormal potential
and termination activities in connection with the      patterns resulting from the crossing of the Pipe¬
Pipeline System shall be conducted so as to avoid      line by other pipelines or cables; and (8) infor¬
or minimize thermal and other environmental            mation on precautions to be taken to prevent
changes and to provide maximum protection to fish      internal corrosion of the Pipeline. Permittees shall
and wildlife and their habitat, and people. All        also provide for periodic internal pitting surveys
working platforms, pads, fills and other surface       by electro-magnetic or other means.
modifications shall be planned and executed in such       3.11. Containment of Oil Spills
a way that any resulting degradation of perma¬            3.11.1. Permittees shall provide Oil spill con¬
frost will not jeopardize the Pipeline foundations.    tainment dikes or other structures around storage
   3.9.2. Acceptable plans, procedures and quality     tanks at pump stations and at the Valdez terminal.
controls that ensure compliance with Stipulation       The volume of the containment structures shall be
3.9.1 shall be submitted in accordance with Stipu¬     at least: (1) one-hundred ten (110) percent of the
lation 1.7.                                            total storage volume of the storage, tanks in the
   3.10. Pipeline Corrosion                            relevant area, plus (2) a volume sufficient for
   3.10.1. Permittees shall provide detailed plans     maximum trapped precipitation and runoff which
for corrosion resistant design and methods for         might be impounded at the time of the spill. Such
early detection of corrosion. These shall include:     structures shall be constructed to withstand failure
(1) pipe material and welding techniques to be
                                                       from earthquakes in accordance with Stipulation
used and information on their particular suitabil¬
                                                       3.4 and shall be impervious so as to provide
ity for the environment involved; (2) details on
the external pipe protection to be provided (coat¬     seepage-free storage until disposal of their con¬
ing, wrapping, etc.), including information on         tents can be effected safely without contamination
variation of the coating process to cope with varia¬   of the surrounding area.
tions in environmental factors along the Pipeline         3.11.2. Permittees shall provide containment
route; (3) plans for cathodic protection including     dikes or other structures to minimize effects of Oil
details of impressed ground sources and controls       spilla at critical locations along the Pipeline in ac¬
to ensure continuous maintenance of adequate pro-      cordance with Stipulation 2.14.




                                                   D-18


                                                                                                    290
AMENDMENT #1   -   1976   REFERENCE 1.8 OF EXHIBIT D

3.11.3

Permittees shall provide containment dikes or     other!   structures

around any other permanent or temporary point of storage,

transfer or handling of fuel or lubricants and shaljl also

provide containment dikes or other structures around permanent

or temporary points of storage, transfer or handling of other

substances when directed to do so by the Authorized Officer




                                   D-19




                                                                        291
                EXHIBIT E
        COOPERATIVE AGREEMENT
                 between
UNITED STATES DEPARTMENT OF THE INTERIOR
                  and
           STATE OF ALASKA
              regarding the
    PROPOSED TRANS-ALASKA PIPELINE




                                     292
                                             EXHIBIT E
          COOPERATIVE AGREEMENT
                  between
 UNITED STATES DEPARTMENT OF THE INTERIOR
                            and
                    STATE OF ALASKA
                       regarding the
             PROPOSED TRANS-ALASKA PIPELINE
   THIS AGREEMENT, effective thus 8th day               and enforce rights-of-way and other authoriza¬
of January, 1074, by and between the United States      tions that are necessary for or related to the con¬
Department of the Interior (hereinafter referred        struction of the Trans-Alaska oil pipeline system;
to as the “Department”) and the State of Alaska            WHEREAS, the Legislature of Alaska, in spe¬
 (hereinafter referred to as the “State”), which        cial session, has enacted legislation to establish
together are hereinafter referred to jointly as         authority and guidelines for a right-of-way lease
“Parties,”                                              for that system;
                WITNESSETH                                 WHEREAS, the Secretary will designate a
  WHEREAS, the State has the authority pur¬             Federal Authorized Officer and the Governor of
suant to AS 38.05.020 to enter into this agreement      Alaska will appoint a State Pipeline Coordinator
with the Department in order to protect the lands,      who will, respectively, have general supervision
waters and natural environment of Alaska;               and control over the functions in Alaska of the
   WHEREAS, the Secretary of the Interior               Department and the State with respect to the con¬
 (hereinafter referred to as the “Secretary”) has       struction of the pipeline system ;
the authority to enter into agreements involving           WHEREAS, it is anticipated that detailed
the improvement, management, use and protection         technical and environmental stipulations relating
of the public lands and their resources pursuant        to construction of the pipeline system will be in¬
to Section 102 of the Public Lund Administration        corporated in the right-of-way and other authori¬
Act, 74 Stat. 506 (1060), 43 U.S.C. § 1363 (1970) ;     zations of each of the Parties, and that the State
   WHEREAS, the Parties have been requested             and Federal stipulations will be similar in all
to issue rights of-way and other authorizations for     major respects;
the construction of an oil pipeline system from
                                                           WHEREAS, it is necessary to provide for re¬
Prudhoe Bay to Valdez, A laska ;
   WHEREAS, the Congress of the United States           view and approval of designs and surveillance of
has determined that early construction of such an       construction activities in order to assure compli¬
oil pipeline system is in the national interest and     ance with the aforesaid stipulations; and
has authorized and directed the Secretary and              WHEREAS, it is the purpose of this agreement
other appropriate Federal officers and agencies to      to promote an effective working relationship be¬
issue and take all necessary action to administer       tween the Parties in order to provide maximum

                                                      E-l



                                                                                                     293
protection for the environment without unneces¬          and each will be effective in accordance with the
sary delays in construction of the pipeline system ;     following terms:
  NOW, THEREFORE, the Parties agree as                                                  >
                                                              (a) Lands in category* 1 (c will be tentatively
follows:                                                          approved or patented te the State no Int¬
                                                                  er than fifteen (15) days after compli-
     I. LAN D&—LEASE AND PERMIT                                   nnre by the Parties with all applicable
                                                                  regulations. The Parties will immedi¬
  1. The State and Department recognize the fol¬
                                                                  ately initiate and expeditionsly complete
lowing categories of land to bo made subject to
                                                                  such compliance. The State will there¬
the rights-of-way and other authorizations of the
                                                                  upon immediately proceed to issue a
State or the Department and that such lands con¬
                                                                  right-of-way lease or other grant and
stitute all of the land along the proposed pipeline
                                                                  such authorizations as are necessary for
right-of-way thnt is not owned by private parties                 construction and o|>erAtion of the pipe-
and therefore is subject to the authority of either
                                                                  hue system on said lands.
the Department or the State to authorize rights-             (b) The Department will take all necessary
of-way.
                                                                 action preparatory to tentatively approv¬
    (a) Lands patented to the State.                             ing or patenting the lands in category 1
    (b) Lauds selected by and tentatively ap¬
                                                                 (d) te the State within twenty-five (85)
        proved to tlie State and not withdrawn                   days from the effective date of this
        under section 11(a)(8) of the Alaska                     agreement and will tentatively approve
        Native Claims Settlement Act, 85 StaL                    or patent those lands promptly upon re¬
        696,43 U.S.C.8 1610 (1970).                              ceipt of notice from the Commissioner of
    (c) Lands selected by the State and not tenta¬
                                                                 Natural Resources that the State is pre¬
          tively approved and not. withdrawn under               pared to issue a right-of-way lease or
         section 11(a)(2) of the Alaska Native                   other grant, and such other authorizations
          Claims.Settlement Act.                                 aa 111% necessary for construction and op¬
     (d) 1-ands selected by the State and not                    eration of the pipeline system on said
          tentatively approved and which were                    land*.
          withdrawn under section 11(a) (2) of the           (c) The Federal right-of-way in and to
          Alaska Native Claims Settlement Act but                lands in categories 1(c) or 1(d), or both,
          which are not available for village or re¬             will vest in the Parties receiving it on the
          gional selection under section 22(1) of                date it is issued by the Department but
          the Alaska Native ClaimsSettlement Act,                only upon the occurrence of one of the
          85 Stet. 718, 43 U.S.C. § 1621 (1970).                 following events, whichever occurs first:
     (c) Isinds selected by the State, both tenta¬                  (i) The Commissioner of Natural Re¬
          tively approved and not tentatively ap¬                        sources notifies the Secretary in
          proved, and withdrawn under section                            writing that it is essential for the
          11(a)(2) of the Alaska Native Claims                           expeditious construction of the
          Settlement Act.                                                pipeline system that the Federal
     (f) IÿLiids beneath navigable waters as defined                     right-of-way in and to some or all
          in Section 2 of the Submerged Lands Act,                       of the lands in categories 1 (c) or
          67 Stat. 29, 43 U.S.C. § 1301 ( 1970) .                        1(d), or both, vest in the Parties
     (g) Lands in Federal ownership that have
          not been selected by the. State.                               receiving it; or
  2. The State will issue its right-of-way and other
                                                                    (ii) The lands in category 1(d) have
                                                                         not been tentatively approved to
authorizations for lands in categories 1(a), 1(b),
and 1(f). The Department will issue its rights-of-                       the State and a valid State right-
way and other authorizations for lands in cate¬                          of-way lease or other grant in and
gories1(e) and 1(g).                                                     to those landB has not been Issued
  3. Both the State right-of-way lease or other                          for the construction and operation
grant and the Federal right-of-way authorization                         of the pipeline system by March
will include the lands in categories 1(c) and 1(d)                       10. 1974; or

                                                       E-2

                                                                                                     294
            (iii) The lands in category 1(c) have             (b) Except as prohibited by law or by the
                 not been tentatively approved tu                 Department's pipeline right-of-way
                 the StAtc. and A valid State right-              agreement with the owners of the Trans-
                 of wav lease or other grant in and               Alaska pipeline, (but the owners will be
                 to those lands has not been issued               required by the State right-of way lease
                 for the construction and operation               to make the same available to the State),
                 of the pipeline system by June 1,                the Parties will share fully all informa¬
                 1074;                                            tion concerning the construction of the
   Provided as conditions: First, that the Federal                pipeline system and the surveillance
right-of-way is mode subject to the State's valid                 thereof. The State and the Federal or¬
pre-existing rights, if any, in and to thorn lands;               ganizations will have complete and im-
Second, that upon either valid tentative approval                 mediate, access to the information of tho
or valid patent of any of tho«c lands to the. State,              other, on request, and there will be regu¬
the existence or subsequent issuance of a valid                   lar exchange of information regarding
State right-of-way lease or other grant in and to                 design reviews, application for and is¬
theme lands terminates the Federal right of- way                 suances of notices to proceed, temporary
and other authorizations, and the State right-of-                 suspension orders, modification orders,
way lease or other grant thereupon applies in all                 reports on compliance in the field, con¬
respects to those lands; Third, that the parties                  struction change recommendations, all
who receive the Federal right-of-way and other                    submissions by the holders of the rights-
authorizations agree in writing to the first and                  of-way, all third party contractor reports,
second conditions herein and that they will not                   applications for and Issuance of permb-
challenge the validity of the State’s right-of-way               aiou to reaume activity, and all other sim¬
lease or oilier grant on the basis of the existence               ilar information. The timing, location,
of tlie Federal right-of-way and other authoriza¬                 method and type of information ex¬
tions or their interest therein, and the Federal                  changed shall be governed by the objec¬
right-of-way recites these three conditions; and,                 tive of the fullest possible access to infor¬
Fourth, that the Department will male* every rea¬                 mation practical in order to maximize
sonable effort to tentatively approve and patent                  the decision- making capability of the
the lands to the State expeditiously.                             Parties.
                                                               (e) The Parties will have full and free ac¬
              IL SURVEILLANCE                                      cess to the lands of each other for all pur¬
   1. While the Parties will establish and main¬                   poses relating to the surveillance of the
tain separate organizations to assure compliance                   pipeline system and the enforcement of
with the terms and stipulations of their respective                all State and Federal statutes and regula¬
right-of-way authorizations and with their respec¬                 tions
tive statutes and regulations, they will sock to co¬        2. All applications for notices to proceed, to¬
ordinate the activities of thee* organizations as        gether with supporting documents, will be re¬
fully as possible. In the execution of their respec¬     viewed by both the State Pipeline Coordinator and
tive responsibilities the Parties will seek to pro¬      the Federal Authorized Officer.
vide maximum protection for the environment                 The State right-of-way lease will contain pro¬
without unnecessary delays in construction of the        visions regarding notices to proceed that assure
pipeline. Pursuant to this general agreement, it is      review by the Pipeline Coordinator within the
further agreed that :                                    same time period xs provided in the Department’s
      (a) The Parties will endeavor, both in cen-        right-of-way authorisation}. The Authorized Of¬
          tral offices and in the field, to locate all   ficer or his designee, on behalf of the Department,
          personnel in the surveillance effort, in¬
          cluding agents and third party contrac¬        may issue notices to proceed involving construc¬
          tors, in common locations and to utilize,      tion of any portion of the pipeline system. The
          insofar as possible, common logistical         Pipeline Coordinator or his designee, an behalf
          support, with the objective of maximizing      of the State, may issue, notices to proceed with re¬
          communication between the two organi¬          spect to any construction of the pipeline system
          zations.                                       on State lands, and no notice to proceed on lands

                                                     E~3



                                                                                                            295
subject to the SUto right-of-way lease will be ef¬       provisions therefor in any lease or conveyance it
fective unless signed by the State Pipeline Co¬          may issue or grant with respect to the lands em¬
ordinator.                                               braced in the Valdez terminal site.
   8. On lands subject to the Federal right-of-way
authorizations, the Department will determine                III. STATE HIGHWAY AND STATE
compliance with the terms and stipulations regu¬                        AIRPORTS
lating the construction of the pipeline system. On
lands subject to the Federal right-of-way author¬           1. The Department agrees to take such action
ization, where applicable statutes and regulations       pursuant to the Trans- Alaska Pipeline Authori¬
of the State providing for the protection of re¬         zation Act of November 16, 1978, P.L. 98-158, as
sources, the environment, or public health, safety       arc necessary for the State to construct a public
or general welfare, impose additional require¬           highway from the Yukon River to Prudhoe Bay.
ments to, or more stringent standards than, those        The State agrees to construct tho highway accord¬
required by the Federal terms and stipulations for       ing to the Highway and Airport Stipulations at¬
pipeline construction, operation or maintenance,         tached hereto as Exhibit “A” and, if the State
the State law will control.                              contracts to build the highway, to include said
   4. On lands subject to the State right-of-way         stipulations as a part of any agreement with its
lease, the determination of compliance with those        contractors.
terms and stipulations regulating the construction          2. The State has furnished the Department a
of the pipeline system which do not directly affect      map of tha intended location of the highway, and
the physical integrity of the pipeline, but which        upon completion of construction of the highway
are necessary for the protection of State lands and      will file with the Department a map of definite
resources shall be made exclusively by the State.        location of the highway of similar scale.
On such lands the State or the Department may               8. The Deportment agrees to lease three sites
issue any orders necessary to assure compliance          for public airports pursuant to the Trans-Alaska
with those terms and stipulations regulating the         Pipeline Authorization Act (tuprxx). The Stats
construction of the pipeline system that are neces¬      agrees to build the airports according to those
sary to protect the physical integrity of the pipe¬      provisions of the Ilighway and Airport Stipula¬
line.                                                    tions that are pertinent to airport construction,
    5. The Parties recognize that the unique charac¬     and if the State contracts to build the airports, to
teristics of the arctic and subarctic environment        include said stipulations as a part of any agree¬
require special efforts to provide it with optimum       ment with such contractors.
protection. The Parties will make every reason¬             4. Tha Department agrees to take all actions
able effort to ensure that construction and opera¬       nnctt«ary to provide to the State, under nonex¬
tion methods and activities will be planned and          clusive permits, the free use of gravel or other
executed so as to minimize environmental degra¬          materials necessary for construction of the State
dation.                                                  highway and the State airports pursuant to the
    6. Fish and wildlife protection is regarded by       Trans-Alaska Pipeline Authorization Act (tu-
the Parties as a special responsibility of the sur¬      pra). All free use permit* issued by tho Depart¬
veillance effort which extends with common con¬          ment for such material niton shall include provi¬
cern over the length of the pipeline. The Parties        sions of the Highway and Airport Stipulations
 will encourage the formation, to the extent prac¬       applicable to material site*.
 ticable, of a cooperative effort for such protection,      3. The State shall hare the right and responsi¬
sharing the fish and game personnel and informa¬         bility to enforce the applicable provisions of the
 tion resources of both the State and Federal Gov¬        Highway and Airport Stipulations referring to
ernments, and the application of this cooperative         the construction of the State highway and State
effort over both State and Federal lands.                airports.
    7. The Department shall have full and free ac¬                    IV. MISCELLANEOUS
 cess at all times to the Valdez terminal site for the
 purpose ol enforcing the Department’s ttipula-            1. Tho Federal Authorized Officer and the State
 tiona at that facility. The State will assure such      Pipeline Coordinator will develop procedures to
 access to the Depsrtment by making appropriate          implement the provisions of this agreement.

                                                     E-4



                                                                                                     296
  {. In the implementation of this agreement.                dooms it necessary or desirable to terminate this
each Party will avoid unnecessary employment of              agreement at an earlier time, it may do so after
personnel and needless expenditure of funds.                 giving the other Party sixty (60) dayB advance
                                                             written notice thereof.
  3. This agreement shall remain in effect until               IN WITNESS WHEREOF, the Parties hereto
construction of the Trans-Alaska pipeline is com¬            have executed this agreement as of the date shown
pleted. However, in the event that either Party              below:
STATE or ALASKA                                              UNITED STATES ar AMERICA
/•/ WILLIAM A. EUAN                                          DEPARTMENT or THE INTERIOR
   TITLE: Governor                                           /«/ HOOKE* C. B. MORTON
          State of Alaska                                       Title: Secretary of the
      January 8, 1974                                                  Interior

                                            EXHIBIT A
                              Highway and Airport Stipulations
   J. DEFINITIONS                                              2. PROCEDURES
   LI. “Highway” means the State highway from               2.1. Regulation of Public Access
the Yukon River to Prudhoe Bay, Alaska; and                 2.1.1. During construction of the Highway, the
includes all permanent roads, bridges, tunnels,          State shall provide alternative routes for existing
drainage structures, signs, guardrails, protective        roads and trails across public lands.
structures, and appurtenances related thereto or            2.1.2. The State shall make provisions for suit¬
used in connection therewith.                            able permanent crossings for the public where the
                                                         Highway right-of-way crosses existing roads, toot-
   1.2. “Airports" means the three public airports       trails, winter trails, or other rights of-way.
for which the State of Alaska made application on           2.2. Applicability of Stipulations
March 20, 1970, under 49 IJ.S.C. §8 211-214 (1970).         2A1. Nothing in these Stipulations shall he con¬
  1.3. “State Pipeline Coordinator" means that           strued as applying to activities of the State that
individual designated by the State of Alaska with        have no relation to the Highway or Airports.
authority over and responsibility for the super¬            ?      Nothing in these Stipulations shall be con¬
vision of design review and construction of the          strued to affect any right or cause of action that
Pipeline System or his designee.                         otherwise would be available to the State against
  14. “Federal Authorised Officer" means the             any person other than the United States.
Secretary of the Interior, or a person delegated            Z& Responsibilities
to exercise his authority with respect to the Pipe¬         2.3.1. With regard to the construction of the
line System.                                             Highway and Airports: (1) The State shall en¬
  1.5. “Contractor" means the individual, corpo¬         sure full compliance with the terms and conditions
                                                         of these Stipulations by its agents, employees and
ration, or other entity, or the subcontractor or         contractors (including subcontractors of any tier),
agent of such individual, corporation or other           and the employees of each of them. (2) Unless
entity, with which the State of Alaska contracts to      clearly inapplicable, the requirements and pro¬
build the Highway or Airport*. In the event that         hibitions imposed upon the State by these Stipula¬
                                                         tions are also imposed upon the State's agents,
the State undertakes to build the Highway or Air¬        employees, contractors, and subcontractors, and
 port* itself, “Contractor" shall mean the State of      the employees of each of them. (3) Failure or re¬
 Alaska.                                                 fusal of the State’s agents, employees, contractors,
   1.6. “Notice to Proceed" means a document             subcontractors, or their employer* to comply with
                                                         these Stipulations shall be deemed to be the failure
signed by the State Pipeline Coordinator author¬         or refusal of the State. (4) The State shall require
izing some aspect of the construction of the             its agents, contractors, and subcontractors to in¬
 Highway or Airports.                                    clude these Stipulations in all contracts and sub-
                                                      E-ÿ5



                                                                                                     297
contracts, which am entered into by any of them,        determine the matter if the Airports are involved,
together with a provision that the other contract¬      and the Stale Pipeline Coordinator shall hare final
ing party, together with its agents, employees,         authority to determine the matter if the Highway
contractors, subcontractors, and the employees of       is involved.
each of them, shall likewise be bound to comply
with these Stipulations.                                 J. CONTRACTOR STIPULATIONS-GEN-
   2J32. The State shall make separate applica¬         ERAL
tion, under applicable statutes and regulations, for
authorization to use or occupy Federal lands in            3.1. Equal Employment Opportunity
connection with the Highway or Airports where              Hy accepting thi* contract, Contractor agree*
the lands are not within the Highway right-of-way       that, during the period of construction of the
or Airport leases. This shall include material sites.   Highway and Airports, or for NO long as this
comp sites, waste areas, storage areas, access roads,   permit shall be in effect, whichever a the longer,
Me,                                                     be shall comply with this Stipulation.
   2-3.3. The Federal Authorised Officer may re¬           3.1.1. Contractor will not discriminate against
quire modification of the Highway or Airports,          any employee or applicant for employment be¬
without liability or expenw to the United Staten,       cause of race, color, religion, sex, or national ori¬
as neofKsary to protect the integrity of the Tranv-     gin. Contractor will take affirmative action to
A tasks Pipeline.                                       ensure that applicants arc employed, and that em¬
    2.4. Highway Design Approval                        ployees are equally treated during employment,
   2.4.1. The State shall require detailed design       without regard to their race, color, religion, sex,
submittals from Contractor for all river and            or national origin. Such action shall include, but
st ream crossings.                                      not be limited to, the following: employment, up¬
   24.2. All such submittals shall be reviewed by       grading, demotion, or transfer; recruitment or
the State Pipeline Coordinator for conformity           recruitment advertising; layoff or termination;
with the Stipulations set forth herein.                 rates of pay or other forms of compensation; and
   2.4.3. Upon approval of such design, a Notice        selection for training, including apprenticeship.
to Proceed shall be executed and transmitted to the     Contractor agrees to poet in conspicuous places,
Contractor. Such document shall authorize the           available to employees and applicants for em¬
commencement of construction on the element of          ployment, notice* to be approved by the. Author¬
the Highway for which design is approved.               ized Officer setting forth tbs provirion of this
   2.5. Suspension of Construction                      equal opportunity clause.
   24.1. Tn the event the State Pipeline Coordi¬           3.1.2. Contractor will, in all wilicitation* or
nator determines that the Contractor is in violation    advertisements for employees placed by or on be¬
of those Stipulations, he may order suspension of       half of Contractor, state that all qualified appli¬
that portion of the. work in violation.                 cants will receive consideration for employment
   24.2. In the event that the Federal Authorized       without regard to raoc, religion, acx, color or na¬
Officer determines that the Contractor is in viola¬     tional origin.
tion of these Stipulations, he may recommend that          3.14. Contractor will send to each labor union
the State Pipeline Coordinator order suspension of      or representative of workers with which Con¬
that portion of the work he deems to be in viola¬       tractor has a collective bargaining agreement or
tion.                                                   other contract or understanding, a notice, to be
    2J6L Changes in Conditions                          provided by the Authorized Officer, advising the
    Unforeseen conditions arising during design or      labor union or worker’s representatives of Con¬
construction of the Highway or Airports may             tractor commitments under this equal opportunity
make it necessary to revise or amend these Stipu¬       clause and shall post copies of the notico in con¬
lations to protect the environment and the public       spicuous places available to employees and appli¬
interest In that event, the Federal Authorized Of¬      cants for employment.
ficer and the State Pipeline Coordinator, shall            3.14. Contractor will comply with Executive
agree as to what revisions or amendment* shall be       Order No. 11246 of September 24, 1966, as
mode. If they are unable to agree, the. Federal         amended, and rulee and regulation* and relevant
 Authorized Officer shall hare final authority to       orders of the Secretary of Latar.
                                                    E-6


                                                                                                   298
  3.1.5. Contractor will furnish all information        Secretary of Labor in obtaining tha compliance
and reports required by Executive Order Na              of Contractors and subcontractors with the equal
11246 of September 34, 1965, as amended, and by         opportunity clause and the rules regulation*, and
the rules, regulations, and orders of the Secretary     relevant orders of the Secretary of Labor, that it
of Labor, or pursuant thereto, and will permit          wilt furnish the State Pipeline Coordinator and
access to Contractor's books, records, and account*     the Federal Authorized Officer and the Secretary
by the State Pipeline Coordinator and the Fed¬          of Labor such information os they may require
eral Authorized Officer and the Secretary of            for the supervision of such compliance, and that
Labor for purposes of investigation to ascertain        it will otherwise ansiat the State Pipeline Coordi¬
compliance with such rule*, regulations, and            nator in securing compliance.
orders.                                                    3.1.10. Contractor further agrees that it will re¬
   3J.6. In the event of Contractor's noncompli¬        frain from entering into any contract or contract
ance with this equal opportunity clause or with         modification subject to Executive Order No. 1124$
any of said rules, regulations, or orders, this con¬    of September 24, 18*5, as amended, with a Con¬
tract may be cancelled, terminated or suspended         tractor debarred from, or who has not demon¬
in whole or in part and Contractor may be de¬           strated eligibility for, Government contracts and
clared ineligible for further government con¬           federally assisted construction contracts pursu¬
tract* or permits in accordance with procedures         ant to the Executive Order and will carry out such
authorized in Executive Order No. 11246 of Sep¬         sanctions and penalties for violation of the equal
tember 24, 1965, ae amended, and such other sanc¬       opportunity clause as may be imposed upon Con¬
tions may be imposed and remedies invoked as            tractors and subcontractors by the Federal Au¬
provided in Executive Order No. 11246 of Sep¬           thorin'! Offirer or the Secretary of Labor, pur¬
tember 24, 1965, a* amended, or by rule, regula¬        suant to Part II, Subpart D, of the Executive
tion, or Older of the Secretary of Labor, or as         Order. In addition, Contractor agrees that if it
otherwise provided by law.                              fails or refuses to comply with these undertakings,
  3.1.7. Contractor will include the provisions of      the State Pipeline Coordinator may take any or
this equal opportunity clause in every contract,        all of the following actions: Cancel, terminate, or
subcontract or purchase order unless exempted           suspend in whole or in part this contract; refrain
by rules, regulations, or orders of the Secretary       from extending any further assistance to Con¬
of Labor issued pursuant to Section 204 of Exec¬        tractor under the program with respect to which
utive Order No. 11246 of September 24, 1965, as         the failure or refusal occurred until satisfactory
amended, so that such provisions will be binding        assurance of future compliance has been received
upon each contractor, subcontractor or vendor.          from the Contractor; and refer the cans to the
Contractor will take such action with respect to        Department of Justice for legal proceeding*.
any contract, sulicontraot, or purchase order as           3.1.11. Certification of Nonsegrcgated Facil¬
the Authorized Officer may direct as a means of         ities*
enforcing such provisions including sanctions for          By accepting this contract. Contractor ocrtifica
noncompliance; provided, however, that in the           that Contractor dota not and will not maintain
event Contractor becomes involved in, or is threat¬     or provide for Contractor's employees any segre¬
ened with, litigation with a contractor, subcon¬        gated facilities at any of Contractor's establish¬
tractor or vendor as a result of such direction by      ments, and that Contractor does not and will not
the State Pipeline Coordinator, Contractor may          permit Contractor's employee* to perform their
request the United State* to enter into such liti¬      services at any location, under Contractor's con¬
gation to protect the interest* of the United States.   trol, where segregated facilities are maintained.
   3.1 A. Contractor further agrees that it will be     Contractor agree* that a breach of this certification
bound by the above equal opportunity clause with        is a violation of tlic equal opportunity clause of
respect to it* own employment practices when it         this permit- As used in this certification, the term
participate* in federally assisted construction         “segregated facilities" means, but Is not limited
work.                                                   to, any waiting rooms, work areas restrooms and
   3.1.9. Contractor agrees that it will assist and     washrooms restaurants and other rating areas,
cooperate actively with tha State Pipeline Coordi¬      time clock*, locker rooms and other storage or
nator and the Federal Authorized Officer and the        dressing areas, parking lots, drinking fountains,

                                                    E-7




                                                                                                      299
 recreation o: entertainment areas, transportation,       of any perron arising from or connected with the
and housing facilities provided for employees             construction of the Highway or Airports
 which «rr segregated by explicit directive or are           3L3. Federal, State and Loral Law* and Regu¬
in fact segregated on the basis of race, color, re¬        lation*
ligion, or national origin, because of habit, local          Contractor shall comply with applicable Federal
custom or (dherwisc. Contractor further agree*            and State laws and all regulation* issued there¬
that (except where Contractor has obtained iden¬           under, existing or hereafter enacted or promul¬
tical certifications from proposed Contractors and        gated, affecting in any manner construction of the
subcontractor* for specific time periods) Contrac¬         High way or A irporta.
tor will oh<:>'n identical certification* from pro¬          ILL Antiquities and Historical Site*
posed Centre ' irs and subcontractors prior to the           Contractor shall engage an archeologist ap¬
award of co.iti " fa or subcontract* exceeding $10,-       proved by the Federal Authorised Officer to pro¬
000 will* i are i *» exempt from the provision* of        vide anrreillanee and inspection of the Highway
the equr opportunity clause; the Contractor will          and Airport sited for archeological value*. If, in
retain M h . ertr ations in Contractor's film; and        connection with any operation under this contract,
the Coi- raefm i 11 forward tlie following notice         or any other contract entered in connection with
to such ;m«|eiM-<l Contractors and subcontractors         the Highway or Airports, Contractor encounters
(except where tl e proposed Contractors or sub¬           known or previously unknown paleontological.
contract- .ra hnve submitted identical certifications     archeological, or historical sited, Contractor shall
for spec lie time periods) : “NOTICE TO PRO¬              immediately notify the Federal Authorized Offi¬
SPECTIVE CONTRACTORS ANDSUBCON-                           cer and the State Pipeline Coordinator and said
TRAOT IRS OK REQUIREMENT FOR CER-                         archeologist. Contractor’s orrheologift shall in¬
TIFICA TION OF NON-SEGREGATED FA-                         vestigate and provide an on-the-ground opinion
CIL.ITIKS." A Certification of Nonwgregated               regarding the protective measure* to be under¬
Facilities, a* required by the order (32 F-R. 74.?®,      taken by Contractor. The Federal Authorised
May 19, 1967) « F.limination of Segregated Fa¬            Officer may suspend that portion of Contractor's
cilities, by the Secretary of Labor, mutt be sub¬         operations necessary to preserve evidence pending
mitted pi ior to the award of a contract or subcon¬       investigation of the site.
tract exe ediug el 0,000 which is not exempt from            Six (6) copies of all survey and excavation re¬
the provi ions of the equal opportunity clause. The       ports shall be filed with the Federal Authorized
certifies! on m*ti be submitted cither for each con¬      Officer and the State Pipeline Coordinator.
tract and KUIH-OI tract or for all contracts and sub¬        3.5. Termination of Uae
contracts during a jwriod (i.a, quarterly, semi¬             Upon termination of use of any part of the
annually, or annually ).                                  Highway or Airport*, Contractor shall remove all
                                                          improvements and equipment, excejit a* otherwise
   3-2. Liabilities and Responsibilities of Con¬
tractor                                                   approved in writing by the State. Pipeline Coor¬
                                                          dinator os to the Highway, and the Federal Au¬
   Contract *r a) all abate any condition existing        thorized Officer as to the Airport*, and shall re¬
with re*!* • to the construction of the Highway
           -
or Airfiort that causes or threaten* to cause seri¬
ous and irreipai.ihle harm or damage to any per¬
                                                          store the land to a condition that is satisfactory
                                                          to them. The satisfaction of the State Pipeline
                                                          Coordinator and Federal Authorized Officer shall
ron, structure, property, land, fish and wildlife and
                                                          be stated in writing.
their habti its, or other resource. Any State or
                                                             All Aeow» Roads shall be "put-to bed” by Con¬
Federal pi iperty and fish and wildlife habitat           tractor upon completion of their use unless other¬
harmed oi Innmged by the Contractor in connec¬            wise directed by the Federal Authorized Officer.
tion with tl cremst ruction of the Highway or Air¬        *Put-to-bod" is used herein to mean that such
bus. rega- lie s of fault, shall be reconstructed,        roads shall 1* left in such ctabilizcd condition that
repaired a; I r habilitated by the. Contractor to         erosion will 1)* minimized through the use of ade¬
the writtm -*t:. ‘faction of the State Pipeline Co¬       quately designed and constructed woterbara, re-
ordinator. i ml rector shall be liable in accordance      vegetation, and chemical surface control ; that cul¬
with appli hie law* for loss or damage to prop¬           verts and hridgm shall be removed by Contractor
erty of othei* w for bodily injurie* to or the death      in a manner mtisfactory to the Federal Author-
                                                        E-8



                                                                                                      300
ized Officer; and that such roads shall be closed to   pression of fires. Use of open fi> in connection
use. Contractor's rehabilitation plan shall he ap¬     with construction of the Highw: or Airports is
proved in writing by the State Pipeline Coor¬          prohibited unless authorized in writing by the
dinator and the Federal Authorised Officer prior       State Pipeline Coordinator as to te Highway or
to termination of use of any such road or any part     the Federal Authorized Officer a? 0 the Airports.
thereof.                                                  3.11. Health and Safety
   3.6. Public Improvement*                               Contractor shall take all meas* >s neorosary to
  Contractor shall protect existing improvements       protect the health and safety o' ill persons af¬
on Federal and State lands during construction of      fected by its activities perform in connection
the Highway or Airports. Except as authorized          with the construction of the Higl ay or Airports
for temporary purpotws by the State Pipeline Co¬       and shall immediately abate any ealth or safety
ordinator and Federal Authorized Officer, the Con-     hazards. Contractor shall immediately notify the
tractor shall not obstruct any road or trail with      State Pipeline Coordinator of n't serious acci¬
logs, stash, or debris.                                dents which occur in connection • Ih such activi-
  3.7. Camping, Hunting, Fishing, and Trap¬            tie*.
ping
   Contractor shall satisfy the State Pipeline Co¬      4. CONTRACTOR STIPUI TIONS-EN-
ordinator that it has and will adequately inform       VIRONMENTAL
its employees, agents, contractors, subcontractors,
                                                          4.1. Environmental Briefing
and their employees, of applicable laws and regu
1st ions relating to hunting, fishing, and trapping.
                                                          Prior to and during construct i of the High¬
                                                       way and Airports, Contractor ? til provide for
   3Jk Small Craft Passage
                                                       environmental and other pertin it briefings of
   The creation of any permanent obstruction to
                                                       construction and other personnel v such Federal
the navigation of smalt craft in streams is pro¬
                                                       and State employee® as may be d ignated by the
hibited.
                                                       Federal Authorized Officer and ti- State Pipeline
   3.9. Survey Monuments
   Contractor shall marie and protect all geodetic     Coordinator. Contractor shall e uig* the time,
                                                       piece and attendance for each bailing* upon their
survey monument*; encountered during the con¬          request.
struction of the Highway or Airports. Throe mon¬
uments are not to be disturbed; however, if such          4.2. Pollution Control
a disturbance occurs, the Federal Authorized Of¬          4.2.1. General
ficer shall be immediately notified thereof in            Contractor shall conduct all a *tlV' ies associated
writing.                                               with the Highway and Airport 6 in A manner that
   If any land survey monuments, corners, or ac¬       will avoid or minimize degradation of air, land
cessories (excluding geodetic survey monuments)        and water quality. In the coneti notion of the
are destroyed, obliterated or damaged, Contractor      Highway and Airports, Contract- u shall perform
shall employ a qualified land surveyor to reestab¬     its activities in accordance with applicable air
lish or restore same in accordance with the “Man¬      and water quality standards and relttcd plans of
ual of Instructions for the Survey of Public           implementation, including emission standards,
Lands” and shall record such survey in the ap¬         adopted pursuant to the Clean Air Act, as
propriate records. Additional requirements for the     amended (42 U.S.C., sec. 1857, et s*q.), and the
protection of monuments, corners, and hearing          Federal Water Pollution Control Act, as amended
                                                       (83 U.S.C.,sec 1160).
trees niay be prescribed by the Federal Authorized
Officer.                                                  4.2.2. Water and Land Pollution
   3.10. Fire Prevention and Suppression                  4.2.2-1. Contractor shall comply with applicable
   Contractor sliall promptly notify the State         ‘ÿ"Water Quality Standards” of the St-tfe of Alaska
Pipeline Coordinator and the Federal Authorized        as approved by the Environmental Protection
Officer and take all measures necessary and ap¬        Agency.
 propriate for the prevention and suppression of          4.9.9- 2. Mobil* ground equipment shall not b*
fires in accordance with 43 CFR 2ft01.1-5(d). Con¬     operated in lake*, streams, or riven unless such
tractor shall comply with their instructions and       operation is approved in writing by the Stats
directions concerning the u**, prevention and sup¬      Pipeline- Coordinator.
                                                   E-9



                                                                                                     301
   422. Air Pollution and Ioe Fog                         •1.3*2. Streams
  4.22.1. Contractor shall utilize and operate all        The Highway clearing limits shall bo limited
facilities and devices used in connection with the     mi as to provide three hundred (300) foot mini¬
construction of the Highway and Airports in s&ch       mum buffer stripe of undisturbed land along
a way so as to avoid or minimize air pollution         streams unless otherwise approved under 2.4
and k» fog.                                            herein.
   4222. Emissions from equipment, installa¬              4.4. Erosion Control
tions, and burning materials shall meet applicable        •1.1.1. Contractor shall conduct all Highway and
Federal and State air quality standards.               Airport construction activities so as to avoid or
   424. Pesticides, Herbicides, and other Chem¬        minimize disturbance to vegetation.
icals                                                     4.4.2. The design of the Highway and Airports
  Contractor shall use only non-persistent and         shall provide for the construction of eroeaon con¬
immobile types of pesticides, herbicides nnd other     trol facilities that will avoid or minimise erosion.
chemicals. Each chemical to be used and its ap¬           4.4.3. The erosion control facilities shall be con¬
plication constraint shnll be apjwoved in writing      structed to avoid erosion and to lessen the possibil¬
by the State Pipeline Coordinator prior to use.        ity of forming new drainage channels resulting
   42.5. Sanitation and Waste Disposal                 from Highway or Airport construction activities.
   4.25.1. “Waste” means all discarded matter, in¬     The facilities shall be designed and constructed in
cluding but not limited to human waste, trash,         such a way as to avoid or minimize disturbance to
garbage, refuse, oil drums, petroleum prodotfe,        the thermal regime.
ashes and equipment.                                      4.4.4. Stabilization
   4252. All waste generated in construction of           4. 4. 4.1. Surface materials taken from disturbed
the Highway and Airports shall be removed or           areas shall be stockpiled and utilized during res¬
otherwise disposed of in a manner acceptable to        toration unless otherwise approved in writing by
the State Pipeline Coordinator. All applicable         Die State Pipeline Coordinator as to the Highway
standards and guidelines of the Alaska State De¬       and by the Federal Authorized Officer as to the
partment of Environmental Conservation, the            Airports. Stabilization practices, as determined
United States Public Health Service, the Envi¬         by the needs for specific sites, shall include but
ronmental Protection Agency, and other Federal         shall not be limited to seeding, planting, mulching,
and State agencies shall be adhered to by Con¬         and the placement of mat binder*, soil binders,
tractor. All incinerators shall meet the require¬       rock or gravel blankets, or itractort*.
ments of applicable Federal and State law* and            4.4.42. All disturbed areas shall be left in a
regulations and shall be used with maximum pre¬        stabilized condition satisfactory to the State
cautions to prevent forest and tundra fires. After     Pipeline Coordinator as to the Highway and the
incineration, material not consumed in the incin¬       Federal Authorized Officer as to the Airports.
erator shall be disposed of in a manner approved       Such satisfaction shall be stated in writing.
 in writing by the State Pipeline Coordinator.            4.4.5. Crossings of Streams, Rivers or Flood
 Portable or permanent waste disposal systems to        Plains
 be used shall be approved in writing by the State
                                                          4454. Contractor shall prevent or minimize
 Pipeline Coordinator.                                  erosion at streams and river crtx&ings and those
   42. Buffer Strips
                                                        parts of the Highway or Airports within flood
    42.1. Public Interest Anas                          plains.
    No construction activity in connection with the
 Highway or Airports shall be conducted within             4422. Temporary aero* over stream banks
 one-half (Vi) mile of any officially designated       shall be made through urn of fill ramps rather
 Federal, State or municipal |ark, wildlife refuge.     than by cutting through stream bonks, unless
 research natural area, recreation area, recreation     otherwise np prored In writing by the State Pipe¬
 site, or any registered National Historic Site or      line Coordinator.
  National Landmark, unlwa v»ch activity in ap¬           4452. Timing and methods of crossings shall
  proved in writing by the Federal Authorized Offi¬     be subject to control and alteration by the State
 cer M to Federal areas or the State Pipeline Co¬       Pipeline Coordinator to protect fish passage and
 ordinator aa to State areas.                           spawning and aquatic resources generally.

                                                     E-10


                                                                                                   302
   4.4.6. Seeding and Planting                          activities Settling basins shall be constructed to
   Seeding and planting of disturbed areas shall        intercept silt before, it retches streams or lake*.
be conducted os soon as practicable and, if nocee-         4554. Contractor shall comply with any spe¬
»Oi shall be repeated until vegetation is success¬      cial requirements made by the State Pipeline Co¬
ful, unless otherwise approved in writing by tho        ordinator for a stream system in order to protect
State Pipeline. Coordinator. All other restoration      Fish Spawning Beds. Contractor shall repair all
shall be completed as noon as possible.                 damage to Fish Spawning Beds caused by corn-
   4.4.7. Excavated Material                            struetkin of the Highway or Airports.
   Excavated material not utilized for Highway or          455. Zones of Restricted Activities
Airport construction shall be disposed of in a man¬        Contractor's activities in connection with the
ner approved in writing by the Federal Authorized       construction of the Highway or Airports tn key
Officer, if wasted outside of the facility right-of-    fish and wildlife areas may be restricted by the
way.                                                    Stete Pipeline Coordinator during periods of fish
   45. Fish and Wildlife Protection                     and wildlife breeding, nesting, spawning, lambing
   4.1LL Passage of Fish                                or calving activity and during major migrations
   45.1.1. Contractor shall provide for uninter¬        of fish and wildlife. The State Pipeline Coordi¬
rupted movement and safe passage of fish. Any           nator shall provide Contractor written notice of
artificial structure or any stream channel change       such restrictive action. From time to time, the
that would cause a blockage of fish shall be pro¬       State Pipeline Coordinator shall furnish Con¬
vided with a fish passage structure or facility that    tractor a list of areas where such actions may be
meets all Federal and State requirements. The pro¬      required, together with anticipated dates of
posed design shall be submitted to the State Pipe¬      restriction.
line Coordinator in accordance with Stipulation           4.6. Material Sites                          V
2.4.1.                                                    45.1. Acquisition of Materials
   45.1.2. Pump intakos shall be screened to pre¬         1.6.1 J. If Contractor requires materials from
vent harm to fish.                                      the public lands, Contractor shall request the
   45.15. Abandoned water diversion structures          State of Alaska to make application, in accord-
shall be removed or filled to prevent trapping or       anre with 43 CFK, Part 8621, “Free U» of Min¬
stranding of fish.                                      eral Materials.” Contractor shall submit a mining
                                                        plan In accordance with 43 CFR, Part 23. No
   4.5.1.4. If materia] sites are approved adjacent
to or in certain lakes, rivers, or streams, the State
                                                        materials may be removed by Contractor without
                                                        the written approval of the Federal Authorized
Pipeline Coordinator, either on his own initiative
                                                        Oflicer.
or at the request of the Federal Authorized Officer,
                                                           4.6.15. Insofar as jtoesible, use of existing ma¬
may require the Contractor to construct levees,
berms, or other suitable means to protect fish and      terial sites will be authorized in preference to
                                                        new sites.
fish passage and to prevent ailtation of streams or        4.65. Layout of Material Sites
lakes.                                                     Materia] site boundaries should be shaped in
   45.2. Fish Spawning Bods                             such a manner as to blend with surrounding nat¬
   45.2.1. “Fish Spawning Beds’* moans the areas        ural land patterns. Regardless of the layout of
where anadnxnous and resident fish deposit their        material sites, primary emphasis shall be placed
                                                        on prevention of soil erosion and damage to vege¬
  45.25. Contractor shall avoid channel changes         tation.
in Fish Spawning Bods designated by the State              4.7. Clearing
Pipeline Coordinator; however, where channel               47.1. Boundaries
change* cannot be avoided in such beds, new                Contractor shall identify approved clearing
channels shall be constructed according to writ¬        boundaries on the ground prior to beginning
ten standards Supplied by the State Pipeline            clearing operations. All timber and other vegeta¬
Coordinator.                                            tive material outside clearing boundaries and all
  4555. Fish Spawning Beds shall be protected           blazed, painted or posted trees which are on or
from nediment where soil material is expected to        mark clearing boundaries are reserved from cut¬
be suspended in water as a result of construction       ting and removal with the exception of danger

                                                    E-U



                                                                                                      303
trees or   snog* designated s$ such by the State       thorized Officer as to the Airports and the State
Pipeline Coordinator.                                   Pipeline Coordinator as to the Highway.
   4.7.2. Timber                                           42. Off Right-of-Way Traffic
   4.724. Prior to initiating clearing operations,         Contractor shall not operate mobile ground
Contractor shall notify the Federal Authorized         equipment off the Highway or Airport construc¬
Officer of the amount of merchantable timber, if        tions limits or authorized areas unices approved in
any, which will be cut, removed, or destroyed in       writing by the Federal Authorized Officer as to
the construction of the Highway or Airports, and       the Airports and the State Pipeline Coordinator
rfiall request that the State make separate appli¬     as to the Highway, or when necessary to prevent
cation for the free use of such timber in accord¬      harm to any person.
ance with 43 CFR, Part 6510.                              •140. Aesthetics
   4.722. All trees, snags, or other woody ma¬            The Federal Authorized Officer or State Pipe¬
terial cut in connection with clearing operations      line Coordinator may impose such requirements
shall be cut so the resulting stumps shall not         as he deems necessary to protect aesthetic values.
be higher than six (6) inches measured from the           441. Restoration
ground on the uphill side.                                4414. Areas disturbed by Contractor shall be
   4.7.23. All trees, snags, and other woody ma¬       restored by Contractor to the satisfaction of the
terial oat in  connection  with clearing  operations   State Pipeline Coordinator as to the Highway, and
shall be failed   into the arcs within  the clearing   the Federal Authorized Officer as to the Airports.
boundaries and away from water counsea.                as stated in writing.
   4.73.4. Hand clearing shall be used in areas           4412. All cut and fill slopes shall be left in »
where the State Pipeline Coordinator as to the         stable  condition.
Highway and the Federal Authorized Officer as             4413.   Materials from the Highway and Air-
to the Airports, determine that, use of heavy equip¬   porta,  haul ramps, berms, dikte, and other earthen
ment would be detrimental to existing condition*.      structures  shall  be disposed of as directed by the
   4.73.5. All debris resulting from clearing oper¬    State  Pipeline  Coordinator  ax to the Highway and
ations and construction that may block stream          the  Federal   Authorized  Officer ax to the Airport
flow, delay fish passage, contribute to flood dam¬        4.11.4. Vegetation, overburden, and other ma¬
age, or result in stream bed scour or erosion shall    terials removed during clearing operations shall
be removed.                                            be disposed of by Contractor in a manner ap¬
   4.72.6. Logs shall not. be skidded or yarded        proved in writing by the State Pipeline Coordi¬
across any stream without the written approval       . nator  as to the Highway and the Federal Author¬
of the State Pipeline Contractor.                      ized Officer as to the Airports.
   4.72.7. No log landing shall be located within         4.112. Upon completion of restoration, Con¬
three hundred (300) feel of any water course, ex¬      tractor   immediately ahall remove all equipment
cept where impractical, then only with the writ¬       and  supplies  from tho site.
ten approval of the State Pipeline Coordinator.           R. CONTRACTOR STIPULATIONS-
   4.72.8. All slash shall be disposed of within       TECHNICAL
the Highway right-of-way or Airport lease un¬
less otherwise directed in writing by the Federal         The following requirements shall be complied
Authorized Officer as to the Airports or the State     with in drsign and construction of Highways and
Pipeline Coordinator as to the Highway.                Airports.
   4.8. Disturbance of Natural Waters                     54. Special Standards
   All activities of Contractor in connection with        644. All precon9tmction, construction, and
the construction of the Highway or Airports that       poet-const ruction operations shall be. conducted to
may create new lakes, drain existing lakes, sig¬       minimize permafrost degradation and damage to
nificantly divert natural drainages, permanently       the  environment, and to provide maximum pro¬
alter stream hydraulics, or disturb significant        tection  to wildlife and human beings.
areas of stream beds are prohibited unless such           542. Temporary bridges shall be located so as
activities along with necessary mitigation meas¬       to reserve the superior site and alignment for fu¬
ures are aDorovsd in writing by the Federal Au¬        ture permanent bridges.

                                                  E-12




                                                                                                      304
   5.1.3. Embankment sections shall be used in       outflow end of culverts. To prevent erosion the
preference to excavated sections wherever prac¬      pool sides shall be established by appropriate
ticable and, in general, the Highway shall follow    methods; e.g., by the use of riprap.
terrain features.                                       5.4. Slope Stability
   5.1.4. Unless otherwise approved by the State        Areas subject to mudflows, landslide::, mudslides,
Pipeline Coordinator, organic material resulting     avalanches, rock falls, and other types of mass
from clearing operations shall not be incorporated   movements shall be avoided where practicable in
in the road prism, but may be used as a mat over¬    locating the Highway and Airports. Where such
lay below the road prism.                            avoidance is not practical, the Highway or Air¬
   5.2. Permanent Culverts and Bridges               port design, based upon detailed field investiga¬
   Culverts and bridges shall be designed to ac¬     tions and analysis, shall provide measures to pre¬
commodate a 50-year flood in accordance with         vent the occurrence of, or protect the Highway or
criteria established by the American Association     Airports against the effects of mass movements.
of State Highway Officials and the Federal High¬
way Administration.                                     5.5. Construction Operations
   5.3. Erosion                                         5J.1. All pre-construction and construction ac¬
   5.3.1. Erosion control procedures shall accom¬    tivities shall be conducted so as to avoid or mini¬
modate and be based on the runoff produced by        mize thermal and other environmental changes
storm and snow melt conditions having a 50-year      and to provide maximum protection to fish and
occurrence interval. The procedure shall also ac¬    wildlife and their habitat, and people. All surface
commodate effects that result from thawing pro¬      modifications shall be planned and executed in such
duced by flowing or ponded water on permafrost       a way that any resulting degradation of perma¬
terrain.                                             frost will not jeopardize adjoining structure
  5.3.2. Slopes of cuts through stream banks shall   foundations.
be designed and constructed to minimize erosion        5.5.2. Acceptable plans, procedures and qunlity
and prevent slides.                                  controls that ensure compliance witli these Stipu¬
  5.3.3. Where necessary because of outfall ero¬     lations shall be submitted in accordance with Stip¬
sion, stilling basins shall be constructed at the    ulation 2.4.1,




                                                E-13




                                                                                                     305
