UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 21, 2017

Phillips 66
(Exact name of registrant as specified in its charter)

 
					
Delaware	 	001-35349	 	45-3779385	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	
2331 CityWest Blvd.
Houston, Texas 77042
(Address of principal executive offices and zip code)
(281) 293-6600
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

Item 8.01	Other Events.	
On April 21, 2017, Phillips 66, a Delaware corporation (“Phillips 66”), completed the private offering of $300,000,000 aggregate principal amount of its Floating Rate Notes due 2019 (the “2019 Notes”) and $300,000,000 aggregate principal amount of its Floating Rate Notes due 2020 (the “2020 Notes” and, together with the 2019 Notes, the “Notes”), in each case fully and unconditionally guaranteed by Phillips 66 Company, a Delaware corporation and wholly owned subsidiary of Phillips 66 (“Phillips 66 Company”), which were issued pursuant to the Indenture, dated as of April 21, 2017 (the “Indenture”), among Phillips 66, as issuer, Phillips 66 Company, as guarantor, and Wells Fargo Bank, National Association, as trustee, and in accordance with the Terms Agreement (including the provisions of the Purchase Agreement incorporated by reference in the Terms Agreement), dated April 11, 2017 (the “Terms Agreement”), among Phillips 66, Phillips 66 Company and the several Initial Purchasers named in Schedule A to the Terms Agreement.
Phillips 66 expects to use the net proceeds from the Notes, together with a portion of the proceeds from an expected $900 million of term loans, which Phillips 66 expects to enter into substantially concurrently with the issuance of the Notes, to repay its outstanding 2.950% Senior Notes due 2017, for capital expenditures and for general corporate purposes.
Subject to certain conditions set forth in the Indenture, Phillips 66 may cause Phillips 66 Partners LP to issue a series of notes in exchange for all or a portion of a series of the Notes then outstanding (the “Exchange Notes”) without the consent of the holders of the Notes. The Exchange Notes will be fully and unconditionally guaranteed by Phillips 66 and Phillips 66 Company.
A copy of the Terms Agreement (including the provisions of the Purchase Agreement incorporated by reference in the Terms Agreement), the Indenture and the form of the terms of Notes of each series have been filed as Exhibits 1.1, 4.1 and 4.2, respectively, to this report and are incorporated herein by reference.
 
Item 9.01	Financial Statements and Exhibits.	
(d) Exhibits. See “Exhibit Index” attached to this Current Report on Form 8-K, which is incorporated by reference herein.
 
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	 		 		 	PHILLIPS 66	
				
Dated: April 21, 2017	 		 	By:	 	/s/ Paula A. Johnson	
	 		 		 	Paula A. Johnson	
	 		 		 	Executive Vice President, Legal and
Government Affairs, General Counsel and
Corporate Secretary	

EXHIBIT INDEX

1.1	  	Terms Agreement (including the provisions of the Purchase Agreement incorporated by reference in the Terms Agreement), dated April 11, 2017, among Phillips 66, Phillips 66 Company and the several Initial Purchasers named in Schedule A to the Terms Agreement.	
		
4.1	  	Indenture, dated as of April 21, 2017, among Phillips 66, as issuer, Phillips 66 Company, as guarantor, and Wells Fargo Bank, National Association, as trustee, in respect of senior debt securities of Phillips 66.	
		
4.2	  	Form of the terms of the 2019 Notes and the 2020 Notes, including the form of the 2019 Notes and the 2020 Notes.	

Exhibit 1.1
Phillips 66
Debt Securities
fully and unconditionally guaranteed by Phillips 66 Company
PURCHASE AGREEMENT
1. Introductory. Phillips 66, a Delaware corporation (the “ Parent ”), and Phillips 66 Company, a Delaware corporation (“ Phillips 66 Company ” or the “ Guarantor ”), propose that the Parent will issue and sell from time to time certain of its unsecured debt securities (the “ Debt Securities ”) that will be fully and unconditionally guaranteed by Phillips 66 Company (the Debt Securities, including the guarantee relating thereto by the Guarantor (the “ Guarantee ”), being hereinafter called the “ Securities ”). The Securities will be issued under an indenture, to be dated as of the Closing Date (as defined below) (the “ Indenture ”), among the Parent, the Guarantor and Wells Fargo Bank, National Association, as trustee (the “ Trustee ”), in one or more series, which series may vary as to interest rates, maturities, redemption provisions, selling prices and other terms, with all such terms for any particular series of the Securities being determined at the time of sale. Particular series of the Securities will be sold pursuant to a Terms Agreement referred to in Section 3, for resale in accordance with terms of offering determined at the time of sale.
The Securities involved in any such offering are hereinafter referred to as the “ Offered Securities ”. The firm or firms which agree to purchase the Offered Securities, as set forth in a Terms Agreement referred to in Section 3 hereof, are hereinafter referred to as the “ Initial Purchasers ” (which term shall include any person substituted for an Initial Purchaser pursuant to Section 8 hereof) of such securities, and the representative or representatives of the Initial Purchasers, if any, specified in a Terms Agreement referred to in Section 3 hereof are hereinafter referred to as the “ Representatives ”; provided, however, that if the Terms Agreement does not specify any representative of the Initial Purchasers, the term “Representatives”, as used in this Agreement (other than in Sections 2(d) and 7 and the second sentence of Section 3), shall mean the Initial Purchasers.
The holders of the Offered Securities, including the Initial Purchasers and their direct and indirect transferees, will be entitled to the benefits of a registration rights agreement, to be dated as of the Closing Date (the “ Registration Rights Agreement ”), among the Parent, the Guarantor and the Initial Purchasers, pursuant to which the Parent and the Guarantor will be required to file with the Securities and Exchange Commission (the “ Commission ”), under the circumstances set forth therein, (i) one or more registration statements under the Securities Act of 1933 (as amended, the “ Act ,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder) relating to additional series of debt securities of the Parent with terms substantially identical to each series of the Offered Securities (the “ Registered Securities ”) to be offered in exchange for the Offered Securities (the “ Exchange Offer ”) and (ii) a shelf registration statement pursuant to Rule 415 under the Act relating to the resale by certain holders of the Offered Securities, and in each case, to use their commercially reasonable efforts to cause such registration statements to be declared effective.

In each case in exchange for a new series of Securities (the “ Exchange Securities ”) issued in exchange for all or a portion of a previously issued series of Securities, having identical terms to the Securities exchanged, subject to exceptions set forth in the Indenture and the Final Offering Memorandum, (as defined below), the Parent may cause, subject to certain conditions set forth in the Indenture, (i) Phillips 66 Company to issue Exchange Securities in exchange for Securities of the Parent, which Exchange Securities shall be guaranteed by the Parent, (ii) Phillips 66 Project Development Inc. (“ PDI ”) to issue Exchange Securities in exchange for Exchange Securities of Phillips 66 Company, which Exchange Securities shall be guaranteed by the Parent and Phillips 66 Company, and (iii) Phillips 66 Partners LP (“ PSXP ” and, along with Phillips 66 Company and PDI, each an “ Eligible Exchange Securities Issuer ”) to issue Exchange Securities in exchange for Exchange Securities of PDI, which Exchange Securities shall be guaranteed by the Parent and Phillips 66 Company.
The Parent understands that the Initial Purchasers propose to make an offering of the Offered Securities on the terms and in the manner set forth herein and in the Disclosure Package (as defined below) and agree that the Initial Purchasers may resell, subject to the conditions set forth herein, all or a portion of the Offered Securities to purchasers (the “ Subsequent Purchasers ”) on the terms set forth in the Disclosure Package (the first time when resales of the Securities are made, as set forth in any Terms Agreement referred to in Section 3 entered into in connection with a specified offering of the Offered Securities, is referred to as the “ Execution Time ”). The Parent acknowledges and agrees that the Initial Purchasers may offer and sell the Offered Securities to or through any affiliate of an Initial Purchaser and that any such affiliate may offer and sell the Offered Securities purchased by it to or through any Initial Purchaser. The Offered Securities are to be offered and sold to or by the Initial Purchasers without being registered with the Commission under the Act in reliance upon exemptions therefrom. Pursuant to the terms of the Offered Securities and the Indenture, investors who acquire Offered Securities shall be deemed to have agreed that Offered Securities may only be resold or otherwise transferred, after the date hereof, if such Securities are registered for sale under the Act or if an exemption from the registration requirements of the Act is available (including the exemptions afforded by Rule 144A under the Act (“ Rule 144A ”) or Regulation S under the Act (“ Regulation S ”)).
In connection with each offering of Offered Securities, the Parent and the Guarantor will prepare and deliver to each Initial Purchaser copies of a preliminary offering memorandum (the “ Preliminary Offering Memorandum ”) and a pricing supplement (the “ Pricing Supplement ”) describing the terms of the Offered Securities, each for use by such Initial Purchaser in connection with its solicitation of offers to purchase or offering of the Offered Securities. “ Disclosure Package” shall mean, with respect to any specific offering of the Offered Securities, (i) the Preliminary Offering Memorandum used most recently prior to the Execution Time and (ii) the Pricing Supplement identified in Schedule B to the Terms Agreement. Promptly after the Terms Agreement is executed and delivered, the Parent will prepare and deliver to each Initial Purchaser a final offering memorandum dated the date of such Terms Agreement (the “ Final Offering Memorandum ”).
 
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The Parent hereby confirms that it has authorized the use of the Preliminary Offering Memorandum, the other materials contained in the Disclosure Package and the Final Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchasers in the manner contemplated by this Agreement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Preliminary Offering Memorandum.
2. Representations and Warranties of the Parent . The Parent, as of the Execution Time and as of the Closing Date, represents and warrants to, and agrees with, each Initial Purchaser that:
(a) No Registration . Subject to the accuracy of the representations and warranties of the Initial Purchasers set forth in the Terms Agreement referred to in Section 3 hereof and compliance by the Initial Purchasers with the procedures set forth in Section 6 hereof, it is not necessary in connection with the issuance, offer, sale and delivery of the Offered Securities to the Initial Purchasers and the offer, resale and delivery of the Offered Securities by the Initial Purchasers to each Subsequent Purchaser in the manner contemplated by this Agreement and the Preliminary Offering Memorandum, the Disclosure Package and the Final Offering Memorandum to register the Offered Securities under the Act or, until such time as the Registered Securities are issued pursuant to an effective registration statement, to qualify the Indenture under the Trust Indenture Act of 1939 (as amended, the “ Trust Indenture Act ,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder).
(b) No Similar Offerings or General Solicitations . None of the Parent, the Guarantor or any of their respective affiliates (as such term is defined in Rule 501(b) under the Act) (each, an “ Affiliate ”) or any person acting on their behalf (other than the Initial Purchasers, as to whom the Parent makes no representation or warranty) has, within the six-month period prior to the date of the Terms Agreement, directly or indirectly, sold, solicited any offer to buy or offered to sell or otherwise negotiated in respect of, or will, directly or indirectly, sell, solicit any offer to buy or offer to sell or otherwise negotiate in respect of, in the United States or to any United States citizen or resident (each as defined in Regulation S and collectively “ U.S. Persons ”), any security in a manner so as to cause such security to be integrated with the sale of the Offered Securities in a manner that would require the Offered Securities to be registered under the Act. None of the Parent, the Guarantor or any of their respective Affiliates or any person acting on their behalf (other than the Initial Purchasers, as to whom the Parent makes no representation or warranty) has engaged or will engage, in connection with the offering of the Offered Securities, in an offer to sell or in a solicitation of an offer to buy the Offered Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Act or in a manner involving a public offering within the meaning of Section 4(a)(2) of the Act. With respect to those Offered Securities sold in reliance upon Rule 903 of Regulation S, (i) none of the Parent, the Guarantor or any of their respective Affiliates or any person acting on its or their behalf (other than the Initial
 
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Purchasers, as to whom the Parent makes no representation or warranty) has engaged or will engage in an offer to sell or a solicitation of an offer to buy the Offered Securities by means of any “directed selling efforts” within the meaning of Rule 902(c) of Regulation S and (ii) each of the Parent, the Guarantor and their respective Affiliates and any person acting on their behalf (other than the Initial Purchasers, as to whom the Parent makes no representation or warranty) has complied and will comply with the offering restrictions set forth in Regulation S.
(c) Rule 144A Eligibility . The Offered Securities are eligible for resale pursuant to Rule 144A and will not be, at the Closing Date, of the same class as securities listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934 (as amended, the “ Exchange Act ,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder) or quoted in any automated interdealer quotation system.
(d) Disclosure Package and Final Offering Memorandum . Neither the Disclosure Package, as of the Execution Time, nor the Final Offering Memorandum, as of its date or (as amended or supplemented in accordance with Section 4(a), as applicable) as of the Closing Date, contains or will contain an untrue statement of a material fact or omits or will omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and agreement shall not apply to statements in or omissions from the Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto made in reliance upon and in conformity with information relating to any Initial Purchaser furnished to the Parent or its subsidiaries in writing by or on behalf of any Initial Purchaser through the Representatives expressly for use in the Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto, as the case may be, it being understood that the only such information consists of the information described in the Terms Agreement. The Disclosure Package contains, and the Final Offering Memorandum will contain, all the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Act. The Parent and its subsidiaries have not distributed and will not distribute, prior to the later of the Closing Date and the completion of the Initial Purchasers’ distribution of the Offered Securities, any offering material in connection with the offering and sale of the Securities other than the Disclosure Package, the Final Offering Memorandum and any electronic road show or other written communication used in accordance with Section 4(a) hereof.
(e) Additional Written Communications . The Parent, the Guarantor and their subsidiaries, including their agents and representatives (other than the Initial Purchasers, as to whom the Parent makes no representation or warranty), have not prepared, made, used, authorized, approved, referred to or distributed and will not prepare, make, use, authorize, approve, refer to or distribute any written communication that constitutes an offer to sell or solicitation of an offer to buy the Offered Securities other than (i) the Disclosure Package, (ii) the Final Offering Memorandum and (iii) any electronic road show or other written communications, in each case used in accordance with Section 4(a). Each such communication by the Parent, the Guarantor and their
 
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subsidiaries or their respective agents and representatives pursuant to clause (iii) of the preceding sentence (each, a “ Company Additional Written Communication ”), when taken together with the Disclosure Package, did not as of the Execution Time, and at the Closing Date will not, conflict with the information contained in the Disclosure Package or the Final Offering Memorandum or contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and agreement shall not apply to statements in or omissions from each such Company Additional Written Communication made in reliance upon and in conformity with information furnished to the Parent or its subsidiaries in writing by or on behalf of any Initial Purchaser through the Representatives expressly for use in any Company Additional Written Communication, it being understood that the only such information consists of the information described in the Terms Agreement.
(f) No Conflicts . The execution, delivery and performance by the Parent and the Guarantor of the Indenture, the Offered Securities, the Guarantee, the Registration Rights Agreement and the Terms Agreement (including the provisions of this Agreement), as applicable, the issuance and sale of the Offered Securities by the Parent and of the Guarantee by the Guarantor and compliance by the Parent and the Guarantor with the terms and provisions thereof, and the issuance of Exchange Securities by each Eligible Exchange Securities Issuer and the guarantee thereof by the Parent and Phillips 66 Company and compliance with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, (i) the Delaware General Corporation Law, the Delaware Revised Uniform Limited Partnership Act, the laws of the State of Texas or the federal laws of the United States that could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), business, properties or results of operations of the Parent and its subsidiaries taken as a whole (a “ Material Adverse Effect ”), or (ii) any agreement or instrument to which the Parent, the Guarantor, PDI or PSXP is a party or by which the Parent, the Guarantor, PDI or PSXP is bound or to which any of the properties of the Parent, the Guarantor, PDI or PSXP is subject that could reasonably be expected to have a Material Adverse Effect, or (iii) the certificate of incorporation or certificate of limited partnership (as the case may be) or by-laws or agreement of limited partnership (as the case may be) of the Parent, the Guarantor, PDI or PSXP.
(g) No Violation or Default . Neither the Parent nor the Guarantor is (i) in violation of its certificate of incorporation or by-laws, (ii) in default under any agreement or instrument to which the Parent or the Guarantor is a party or by which the Parent or the Guarantor is bound or to which any of the properties of the Parent or the Guarantor is subject, or (iii) in violation of any law, ordinance, governmental rule or regulation or court decree to which it may be subject, which default or violation in the case of clause (ii) or (iii) could reasonably be expected to have a Material Adverse Effect.
(h) Financial Statements . The consolidated financial statements of the Parent, the Guarantor and their consolidated subsidiaries, together with the related notes thereto, included or incorporated by reference in the Disclosure Package and the Final Offering
 
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Memorandum, present fairly the financial position of the Parent and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements comply in all material respects as to form with the accounting requirements of the Act and have been prepared in conformity with generally accepted accounting principles in the United States (“ GAAP ”) applied on a consistent basis throughout the periods involved, except as otherwise noted therein or as may be expressly stated in the related notes thereto.
The consolidated financial statements of PSXP and its consolidated subsidiaries, together with the related notes thereto, included or incorporated by reference in the Disclosure Package and the Final Offering Memorandum, present fairly the financial position of PSXP and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements comply in all material respects as to form with the accounting requirements of the Act and have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved, except as otherwise noted therein or as may be expressly stated in the related notes thereto.
The interactive data in eXtensible Business Reporting Language furnished with the Exchange Act filings incorporated by reference in the Disclosure Package and the Final Offering Memorandum fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto. All non-GAAP financial information included in the Disclosure Package and the Final Offering Memorandum, if any, complies with the requirements of Item 10 of Regulation S-K under the Act. The selected financial data set forth in Item 6 of the Parent’s most recent Annual Report on Form 10-K (the “ Selected Financial Data ”) and included or incorporated by reference in the Disclosure Package and the Final Offering Memorandum, fairly present the information included therein. The information under the heading “Ratio of Earnings to Fixed Charges” in the Disclosure Package and the Final Offering Memorandum has been prepared in accordance with the requirements of the Act, has been derived, where applicable, from the financial statements included or incorporated by reference in the Disclosure Package and the Final Offering Memorandum, and fairly presents the information included therein.
(i) Anti-Money Laundering . The operations of the Parent and its consolidated subsidiaries are and have been conducted at all times in material compliance with applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions where the Parent or any of its consolidated subsidiaries conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental or regulatory agency (collectively, the “ Anti-Money Laundering Laws ”) and no action, suit or proceeding by or before any court or governmental or regulatory agency, authority or body or any arbitrator involving the Parent or any of its consolidated subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Parent or the Guarantor, threatened, the outcome of which could reasonably be expected to be material in the context of the offering of the Offered Securities.
 
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(j) Anti-Corruption . Neither the Parent nor any of its consolidated subsidiaries, nor to the knowledge of the Parent or the Guarantor, any agent, director, officer, employee or other person associated with or acting on behalf of the Parent and its consolidated subsidiaries has, since May 1, 2012, (i) used any funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery or anti-corruption laws (collectively, the “ Anti-Corruption Laws ”); or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Parent and its consolidated subsidiaries have instituted, maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable Anti-Corruption Laws.
(k) Sanctions . Neither the Parent, nor any of its consolidated subsidiaries, nor to the knowledge of the Parent or the Guarantor, any agent, director, officer, employee or other person associated with or acting on behalf of the Parent or its consolidated subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. Government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, or Her Majesty’s Treasury (collectively, “ Sanctions ”), nor is the Parent or any of its consolidated subsidiaries located, organized or resident in a country or territory that is the subject or the target of Sanctions, including, without limitation, Cuba, Iran, North Korea, Sudan and Syria (each, a “ Sanctioned Country ”); and the Parent will not directly or indirectly use the proceeds of the offering of the Offered Securities hereunder, or lend, contribute or otherwise make available such proceeds to any consolidated subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or the target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as initial purchaser, advisor, investor or otherwise) of Sanctions or the Anti-Corruption Laws. Since May 1, 2012, the Parent and its consolidated subsidiaries have not engaged in, and are not now knowingly engaged in, any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of relevant Sanctions or with any Sanctioned Country.
 
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(l) Stabilization . Each of the Parent and the Guarantor has not taken and will not take, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of the Offered Securities or of any security of the Parent to facilitate the sale or resale of the Offered Securities.
3. Purchase and Offering of Offered Securities . The obligation of the Initial Purchasers to purchase the Offered Securities will be evidenced by an agreement or exchange of other written communications (“ Terms Agreement ”) at the time the Parent determines to sell the Offered Securities. The Terms Agreement will incorporate by reference the provisions of this Agreement, except as otherwise provided therein, and will specify the firm or firms which will be Initial Purchasers, the names of any Representatives, the principal amount of the Offered Securities to be purchased by each Initial Purchaser, the commission or fee to be paid to the Initial Purchasers and the terms of the Offered Securities not already specified in the Indenture, including, but not limited to, interest rate, maturity, any redemption provisions and any sinking fund requirements. The Terms Agreement will also specify the time and date of delivery and payment (such time and date or such other time not later than seven full business days thereafter as the Representatives and the Parent agree as the time for payment and delivery, being herein and in the Terms Agreement referred to as the “ Closing Date ”), the place of delivery and payment and any details of the terms of offering that should be reflected in the offering memorandum relating to the offering of the Offered Securities. For purposes of Rule 15c6-1 under the Exchange Act, the Closing Date (if later than the otherwise applicable settlement date) shall be the date for payment of funds and delivery of securities for all the Offered Securities sold pursuant to the offering. The obligations of the Initial Purchasers to purchase the Offered Securities will be several and not joint. It is understood that the Initial Purchasers propose to offer the Offered Securities for sale as set forth in the Final Offering Memorandum.
If the Terms Agreement specifies “Book-Entry Only” settlement or otherwise states that the provisions of this paragraph shall apply, the Parent will deliver against payment of the cash purchase price the Offered Securities in the form of one or more permanent global securities in definitive form (the “ Global Securities ”) deposited with the Trustee as custodian for The Depository Trust Company (“ DTC ”) and registered in the name of Cede & Co., as nominee for DTC. The Global Securities will be made available for inspection by the Representatives not later than 5:00 pm, New York City time, on the business day prior to the Closing Date. Interests in any permanent global securities will be held only in book-entry form through DTC, except in the limited circumstances described in the Final Offering Memorandum. Payment for the Offered Securities shall be made by the Initial Purchasers in Federal (same day) funds by official check or checks or wire transfer to an account previously designated by the Parent at a bank acceptable to the Representatives, in each case drawn to the order of the Parent at the place of payment specified in the Terms Agreement on the Closing Date, against delivery to the Trustee as custodian for DTC of the Global Securities representing all of the Offered Securities.
 
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4. Certain Agreements of the Parent . The Parent covenants and agrees with the several Initial Purchasers that, in connection with each offering of Offered Securities:
(a) Amendments or Supplements . As promptly as practicable following the Execution Time and in any event not later than the second business day following the date hereof, the Parent will prepare and deliver to the Initial Purchasers the Final Offering Memorandum, which shall consist of the Preliminary Offering Memorandum as modified only by the information contained in the Pricing Supplement. The Parent will not finalize the Final Offering Memorandum, amend or supplement the Preliminary Offering Memorandum, the Pricing Supplement or any other materials contained in the Disclosure Package and will not amend or supplement the Final Offering Memorandum prior to the Closing Date, in each case unless the Representatives shall previously have been furnished a copy of the proposed Final Offering Memorandum, amendment or supplement and shall not have objected to the Final Offering Memorandum or such amendment or supplement. Before making, preparing, using, authorizing, approving or distributing any Company Additional Written Communication, the Parent will furnish to the Representatives a copy of such written communication for review and will not make, prepare, use, authorize, approve or distribute any such written communication to which the Representatives reasonably object.
(b) Notice and Effect of Material Events; Ongoing Compliance of Offering Memorandum .
(i) If at any time prior to the Closing Date (x) any event shall occur or condition shall exist as a result of which the Disclosure Package as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (y) it is necessary to amend or supplement the Disclosure Package to comply with law, the Parent and the Guarantor will immediately notify the Initial Purchasers thereof and forthwith prepare and (subject to Section 4(a) hereof) furnish, at their own expense, to the Initial Purchasers such amendments or supplements to the Disclosure Package as may be necessary so that the statements in the Disclosure Package as so amended or supplemented will not, in the light of the circumstances under which they were made, be misleading or so that the Disclosure Package will comply with all applicable law.
(ii) If, prior to the completion of the placement of the Offered Securities by the Initial Purchasers with the Subsequent Purchasers, (x) any event shall occur or condition shall exist as a result of which the Final Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Final Offering Memorandum is delivered to a Subsequent Purchaser, not misleading or (y) it is necessary to amend or supplement the Final Offering Memorandum to comply with law, the Parent and the Guarantor will immediately notify the Initial Purchasers thereof and forthwith prepare and (subject to Section 4(a) hereof)
 
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furnish, at their own expense, to the Initial Purchasers such amendments or supplements to the Final Offering Memorandum, as may be necessary so that the statements in the Final Offering Memorandum as so amended or supplemented will not, in the light of the circumstances at the time of sale of the Offered Securities, be misleading or so that the Final Offering Memorandum, as so amended or supplemented, will comply with all applicable law.
(iii) The Parent will advise the Representatives promptly, and confirm such advice in writing, (x) of the issuance by any governmental or regulatory authority of any order preventing or suspending the use of any of the Disclosure Package or the Final Offering Memorandum or the initiation or threatening of any proceeding for that purpose and (y) of the receipt by the Parent of any notice with respect to any suspension of the qualification of the Offered Securities for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Parent will use its commercially reasonable efforts to prevent the issuance of any such order preventing or suspending the use of any of the Disclosure Package or the Final Offering Memorandum or suspending any such qualification of the Offered Securities and, if any such order is issued, will use its commercially reasonable efforts to obtain as soon as possible the withdrawal thereof.
The Parent hereby expressly acknowledges that the indemnification and contribution provisions of Section 7 hereof are specifically applicable and relate to each offering memorandum, amendment or supplement referred to in this Section 4.
(c) Delivery of Copies . As promptly as practicable, the Parent agrees to furnish the Initial Purchasers, without charge, as many copies of the Preliminary Offering Memorandum and other materials contained in the Disclosure Package, the Final Offering Memorandum, any Company Additional Written Communication and any amendments or supplements thereto as they may reasonably request.
(d) DTC, Euroclear and Clearstream . The Parent will cooperate with the Initial Purchasers and use its best efforts to permit the Offered Securities to be eligible for clearance and settlement through the facilities of the Depositary, Euroclear Bank S.A./N.V., as operator of the Euroclear System (“ Euroclear ”), and Clearstream Banking société anonyme (“ Clearstream ”).
(e) Rule 144A Information . While the Offered Securities remain outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) under the Act, the Parent and the Guarantor will, during any period in which the Parent is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, furnish to holders of the Offered Securities and prospective purchasers of the Offered Securities designated by such holders, upon the request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Act.
 
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(f) No Resales by the Parent . The Parent will not, and will not permit any of its affiliates (as defined in Rule 144 under the Act) to, resell any of the Offered Securities that have been reacquired by any of them.
(g) Legend . Each certificate for an Offered Security will bear the legend contained in “Transfer Restrictions” in the Preliminary Offering Memorandum for the time period and upon the other terms stated in the Preliminary Offering Memorandum.
(h) Blue Sky Compliance . The Parent will use its commercially reasonable efforts to arrange for the qualification of the Offered Securities for offer and sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Representatives designate and will continue such qualifications in effect so long as required for the distribution of the Offered Securities; provided, however, that neither the Parent nor Phillips 66 Company will be required in connection therewith to register or qualify as a foreign corporation where it would not otherwise be so qualified or to execute a general consent to service of process in any jurisdiction or subject itself to taxation in any jurisdiction where it would not otherwise be so subject. The Parent will promptly advise the Representatives of the receipt by it or Phillips 66 Company of any notification with respect to the suspension of the qualification of the Offered Securities for offer and sale in any such jurisdiction or the initiation or threatening of any proceeding for such purpose.
(i) Expenses . Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Parent will pay all costs and expenses incident to the performance of its obligations under the Terms Agreement (including the provisions of this Agreement), for any filing fees or other expenses (including reasonable fees and disbursements of counsel) in connection with qualification of the Offered Securities for sale and determination of their eligibility for investment under the laws of such jurisdictions as the Representatives may designate in accordance with Section 4(h) and the printing of memoranda relating thereto; any fees charged by investment rating agencies for the rating of the Offered Securities; any applicable filing fee incident to, and the reasonable fees and disbursements of counsel for the Initial Purchasers in connection with, the preparation of any Blue Sky memorandum and review by the Financial Industry Regulatory Authority, Inc., if any, of the terms of sale of the Offered Securities; any fees and expenses of the Trustee and any paying agent (including related fees and expenses of any counsel to such parties); any travel expenses of the Parent’s officers and employees and any other expenses of the Parent in connection with attending or hosting meetings with prospective purchasers of Securities; any costs incident to the issuance and delivery of the Offered Securities (including printing and engraving costs) and any necessary issue, transfer or other stamp taxes in that connection; all expenses and application fees incurred in connection with the application for the inclusion of the Offered Securities for book-entry transfer by DTC; and for expenses incurred in preparing, printing and distributing the Final Offering Memorandum, any preliminary offering memoranda or any other amendments or supplements to the Final Offering Memorandum to the Initial Purchasers. Except as provided in Section 4(i), Section 7 and Section 9 hereof, the Initial Purchasers shall pay their own expenses, including the fees and disbursements of counsel.
 
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(j) Clear Market . The Parent will not, and will cause Phillips 66 Company not to, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Commission a registration statement under the Act relating to any United States dollar-denominated debt securities issued or guaranteed by the Parent or Phillips 66 Company and having a maturity of more than one year from the date of issue or any security convertible into or exchangeable or exercisable for any such debt security, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing, without the prior written consent of the Representatives, for a period beginning at the time of execution of the Terms Agreement and ending the number of days after the Closing Date specified under “Blackout” in the Terms Agreement (other than as contemplated by this Agreement and to register the Registered Securities).
(k) Pricing Supplement . The Parent will prepare the Pricing Supplement, containing solely a description of the terms of the Offered Securities and the offering thereof, in the form approved by the Representatives. The Parent consents to the use by any Initial Purchaser of an additional writing that (i) is not a Company Additional Written Communication and (ii) contains only information (A) describing the preliminary offering terms of the Offered Securities or their offering or information that describes the final terms of the Offered Securities or their offering and (B) that is included in the Pricing Supplement.
5. Conditions of the Obligations of the Initial Purchasers . The obligations of the several Initial Purchasers to purchase and pay for the Offered Securities will be subject to the accuracy of the representations and warranties on the part of the Parent and the Guarantor herein, to the accuracy of the statements of the Parent and the Guarantor officers made pursuant to the provisions hereof, to the performance by each of the Parent and the Guarantor of their respective obligations hereunder and to the following additional conditions precedent:
(a) Parent Comfort Letter . The Representatives, on behalf of the Initial Purchasers, shall have received a letter, dated as of the Execution Time, of Ernst & Young LLP confirming that they are independent registered public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and any schedules audited by them and included or incorporated by reference in the Final Offering Memorandum and the Disclosure Package comply as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published Rules and Regulations adopted by the SEC;
(ii) they have performed the procedures specified by the Public Company Accounting Oversight Board for a review of interim financial information as described in AU722, Interim Financial Information, on any unaudited financial statements included in the Disclosure Package or the Final Offering Memorandum;
 
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(iii) on the basis of the review referred to in clause (ii) above, a reading of the latest available interim financial statements of the Parent, inquiries of officials of the Parent who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any, included in the Disclosure Package or the Final Offering Memorandum do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the related published Rules and Regulations or any material modifications should be made to such unaudited financial statements for them to be in conformity with generally accepted accounting principles;
(B) if any unaudited “capsule” information is contained in the Disclosure Package or the Final Offering Memorandum, the unaudited consolidated total revenues, net income and net income per share amounts or other amounts constituting such “capsule” information and described in such letter do not agree with the corresponding amounts set forth in the unaudited consolidated financial statements or were not determined on a basis substantially consistent with that of the corresponding amounts in the audited statements of income;
(C) if (and only if) any consolidated balance sheet for the Parent is available for any period subsequent to the latest consolidated balance sheet included in the Disclosure Package or the Final Offering Memorandum, at the date of the latest available consolidated balance sheet of the Parent read by such accountants, there was any change in the capital stock, any increase in total debt, any decrease in consolidated net current assets (working capital) or any decrease in stockholders’ equity, as compared with amounts shown on the latest consolidated balance sheet included in the Disclosure Package or the Final Offering Memorandum;
(D) at a subsequent specified date not more than three business days prior to the date of such letter, there was any change greater than 1% in the capital stock, or any increase greater than 1% in total debt, as compared with the latest available consolidated balance sheet; or
(E) if (and only if) any income statement for the Parent is available for any period subsequent to the latest consolidated balance sheet included in the Disclosure Package or the Final Offering Memorandum, for the period from the closing date of the latest income statement included in the Disclosure Package or the Final Offering Memorandum to the closing date of the latest available income statement read by such accountants there were any decreases, as compared with the corresponding period of the previous year and with the period of corresponding length ended the date of the latest income statement included in the Disclosure Package or the Final Offering Memorandum, in consolidated total revenues or net income;
 
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except in all cases set forth in clauses (C), (D) and (E) above for changes, increases or decreases which the Disclosure Package and the Final Offering Memorandum discloses have occurred or may occur or which are described in such letter;
(iv) they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Final Offering Memorandum and the Disclosure Package (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Parent and its subsidiaries subject to the internal controls of the Parent’s accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter; and
(v) they have read any pro forma financial information which is included in the Disclosure Package or the Final Offering Memorandum and performed the additional procedures contemplated by Example D of Statement of Auditing Standards No. 72.
All financial statements and schedules included in material incorporated by reference into the Disclosure Package or the Final Offering Memorandum shall be deemed included in the Disclosure Package or the Final Offering Memorandum for purposes of this subsection.
(b) PSXP Comfort Letters . The Representatives, on behalf of the Initial Purchasers, shall have received a letter, dated as of the Execution Time, of Ernst & Young LLP, in form and substance satisfactory to the Representatives, with respect to the consolidated balance sheets of PSXP as of December 31, 2016 and 2015, and the related consolidated statements of operations, changes in members’ equity and cash flows of PSXP for each of the three years in the three-year period ended December 31, 2016, containing statements and information of the type ordinarily included in accountants’ “comfort letters”. The Representatives, on behalf of the Initial Purchasers, shall have received a letter, dated as of the Execution Time, of Deloitte & Touche LLP, in form and substance satisfactory to the Representatives, with respect to the consolidated balance sheets of each of DCP Sand Hills Pipeline, LLC (“ Sand Hills ”) and DCP Southern Hills Pipeline, LLC (“ Southern Hills ”) as of December 31, 2016 and 2015, and the related consolidated statements of operations, changes in members’ equity and cash flows of Sand Hills for the year ended December 31, 2016 and for the period from March 2, 2015 through December 31, 2015, and the related consolidated statements of operations, changes in members’ equity and cash flows of Southern Hills for each of the years in the two-year period ended December 31, 2016, containing statements and information of the type ordinarily included in accountants’ “comfort letters”.
 
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(c) Material Adverse Change . Subsequent to the execution of the Terms Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Parent and its subsidiaries, taken as one enterprise, which, in the judgment of a majority in interest of the Initial Purchasers including any Representatives, is material and adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Offered Securities; (ii) any downgrading in the rating of the Offered Securities or any other debt securities of the Parent by any “nationally recognized statistical rating organization” (as defined in Section 3(a)(62) of the Exchange Act), or any public announcement that any such organization has under surveillance or review its rating of the Offered Securities or any other debt securities of the Parent (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (iii) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange or any suspension of trading of any securities of the Parent on any exchange or in the over-the-counter market; (iv) any banking moratorium declared by U.S. Federal or New York authorities; or (v) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any other substantial national or international calamity or emergency if, in the judgment of a majority in interest of the Initial Purchasers including any Representatives, the effect of any such outbreak, escalation, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Offered Securities.
(d) Opinion of Counsel for the Parent . The Representatives, on behalf of the Initial Purchasers, shall have received an opinion, dated the Closing Date, of Bracewell LLP, counsel for the Parent to the effect that:
(i) each of the Parent, the Guarantor, PDI and PSXP has been duly formed and each is validly existing and in good standing under the laws of the State of Delaware, with all corporate or limited partnership, as the case may be, power and authority to own its properties and conduct its business as described in the Disclosure Package and the Final Offering Memorandum;
(ii) the Indenture, the Registration Rights Agreement and the Terms Agreement (including this Agreement) have been duly authorized, executed and delivered by each of the Parent and the Guarantor, to the extent a signatory thereto; the Debt Securities have been duly authorized, executed, issued and delivered by the Parent in accordance with the provisions of the Indenture; the Indenture, the Registration Rights Agreement and the Debt Securities are valid and legally binding obligations of the Parent, enforceable against the Parent, in accordance with their terms, except in each case to the extent such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or
 
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transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity (whether considered in a proceeding in equity or at law); the Guarantee has been duly authorized, executed and delivered by the Guarantor in accordance with the provisions of the Indenture and is a valid and legally binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except to the extent such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity (whether considered in a proceeding in equity or at law); and the Offered Securities, the Indenture and the Registration Rights Agreement conform in all material respects to the respective descriptions thereof contained in the Disclosure Package and the Final Offering Memorandum;
(iii) the Registered Securities to be issued pursuant to the Indenture have been duly authorized by the Parent, the related guarantee of the Registered Securities by the Guarantor has been duly authorized by the Guarantor, and when the Registered Securities are issued in accordance with the terms of the Indenture and the related guarantee of the Registered Securities is issued and has become effective in accordance with the terms of the Indenture, each will be valid and legally binding obligations of the Parent and the Guarantor, as the case may be, enforceable against the Parent and the Guarantor, as the case may be, in accordance with its terms, except to the extent such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity (whether considered in a proceeding in equity or at law);
(iv) no consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required under the Delaware General Corporation Law, the laws of the State of Texas or the federal laws of the United States for the consummation of the transactions contemplated by the Terms Agreement (including the provisions of this Agreement) in connection with the issuance or sale of the Offered Securities by the Parent and the Guarantor, except (x) with respect to the Registration Rights Agreement and the transactions contemplated thereunder, the filing of one or more registration statements by the Parent and the Guarantor with the Commission pursuant to the Act, an order by the Commission declaring each such registration statement effective and the qualification of the Indenture under the Trust Indenture Act; and (y) as may be required under state securities or “blue sky” laws in connection with the purchase and distribution of the Offered Securities by the Initial Purchasers and with respect to the Registration Rights Agreement and the transactions contemplated thereunder;
(v) the execution, delivery and performance by the Parent and the Guarantor of the Indenture, the Offered Securities, the Registration Rights Agreement and the Terms Agreement (including the provisions of this
 
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Agreement), as applicable, and the issuance and sale of the Debt Securities by the Parent and of the Guarantee by the Guarantor, and compliance by the Parent and the Guarantor with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, the Delaware General Corporation Law, the laws of the State of Texas or the federal laws of the United States; and the Parent has all necessary corporate power and authority to authorize, issue and sell the Debt Securities and the Guarantor has all necessary corporate power and authority to authorize and issue the Guarantee as contemplated by the Terms Agreement (including the provisions of this Agreement);
(vi) assuming the accuracy of the representations and warranties of the Parent, the Guarantor and the Initial Purchasers in the Terms Agreement (including the provisions of this Agreement) and the due performance by the Parent, the Guarantor and the Initial Purchasers of the agreements and undertakings contained therein, neither registration of the Offered Securities under the Act nor qualification of the Indenture under the Trust Indenture Act is required for (i) the offer, sale and delivery of the Offered Securities by the Parent and the Guarantor to the Initial Purchasers and (ii) the initial resale of the Offered Securities by the Initial Purchasers, in each case in the manner contemplated by the Terms Agreement (including the provisions of this Agreement), the Disclosure Package and the Final Offering Memorandum. Such counsel need not express any opinion, however, as to when or under what circumstances any Offered Securities sold by the Initial Purchasers may be reoffered or resold; and
(vii) none of the Parent, the Guarantor, PDI or PSXP is, nor after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Preliminary Offering Memorandum and the Final Offering Memorandum will be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
(e) Opinion and Statement of Internal Counsel for the Parent . The Representatives, on behalf of the Initial Purchasers, shall have received an opinion and statement, dated the Closing Date, of Michael L. Riggs, Deputy General Counsel for the Parent, to the effect that:
(i) the Parent is duly qualified to do business as a foreign corporation in good standing in all jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect;
(ii) the Parent has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Disclosure Package and the Final Offering
 
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Memorandum and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect; all of the issued shares of capital stock of Phillips 66 Company have been duly and validly authorized and issued and are fully paid and non-assessable; except as set forth in the Final Offering Memorandum, all of the issued shares of capital stock of Phillips 66 Company, where applicable, are owned directly or indirectly by the Parent, free and clear of all liens, encumbrances, equities or claims;
(iii) the execution, delivery and performance by the Parent and Phillips 66 Company, as applicable, of the Indenture, the Registration Rights Agreement, the Offered Securities, the Guarantee and the Terms Agreement (including the provisions of this Agreement) and the issuance and sale of the Offered Securities and the Guarantee by the Parent and Phillips 66 Company, as applicable, the performance by the Parent and Phillips 66 Company under the Indenture, and compliance by the Parent and Phillips 66 Company, as applicable, with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, any agreement or instrument to which the Parent or Phillips 66 Company is a party or by which the Parent or Phillips 66 Company is bound or to which any of the properties of the Parent or Phillips 66 Company is subject, in each case to the extent that such breach, violation or default could reasonably be expected to have a Material Adverse Effect, or the charter or by-laws of the Parent or Phillips 66 Company;
(iv) the descriptions in the Final Offering Memorandum of statutes, legal and governmental proceedings and contracts and other documents are accurate in all material respects and fairly present the information required to be shown; and
(v) such counsel does not know of any legal or governmental proceedings pending or threatened to which the Parent or any of its subsidiaries is a party or to which any of the properties of the Parent or any of its subsidiaries is subject that, in such counsel’s judgment, are required to be described in the Final Offering Memorandum and are not so described or of any contracts or other documents that are required to be described in the Final Offering Memorandum that are not described or filed as required.
Such counsel shall also state that such counsel has participated in conferences with officers and other representatives of the Parent, representatives of the independent registered public accounting firm of the Parent, representatives of the Initial Purchasers and counsel to the Initial Purchasers at which the contents of the Final Offering Memorandum and the Disclosure Package were discussed and, although such counsel did not independently verify such information and is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Final Offering Memorandum and the Disclosure Package, on the basis of the foregoing no facts came to such counsel’s attention that led such counsel to believe that the Final Offering Memorandum (other than the financial statements and schedules, the
 
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notes thereto and the auditors’ report thereon, management’s report on internal control over financial reporting, if any, and the other financial, numerical, statistical and accounting data included or incorporated by reference therein, or omitted therefrom, as to which such counsel need not comment) as of its date or as of the Closing Date included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or that the Disclosure Package (other than the financial statements and schedules, the notes thereto and the auditors’ report thereon, management’s report on internal control over financial reporting, if any, and the other financial, numerical, statistical and accounting data included or incorporated by reference therein, or omitted therefrom, as to which such counsel need not comment) as of the Execution Time included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f) Opinion of Counsel for the Initial Purchasers . The Representatives, on behalf of the Initial Purchasers, shall have received from Cravath, Swaine & Moore LLP, counsel for the Initial Purchasers, such opinion or opinions, dated the Closing Date, with respect to the incorporation of the Parent and the Guarantor, the validity of the Offered Securities, the Final Offering Memorandum, the Disclosure Package and other related matters as the Representatives may require, and the Parent and the Guarantor shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.
(g) Officers’ Certificate . The Representatives, on behalf of the Initial Purchasers, shall have received a certificate, dated the Closing Date, of the President or any Vice President and a principal financial or accounting officer or Treasurer of the Parent in which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Parent in this Agreement are true and correct, that each of the Parent and the Guarantor has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, that, subsequent to the date of the most recent financial statements of the Parent incorporated by reference in the Final Offering Memorandum, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Parent and its subsidiaries taken as a whole except as set forth in or contemplated by the Disclosure Package and the Final Offering Memorandum or as described in such certificate.
(h) Bringdown Comfort Letters . The Representatives, on behalf of the Initial Purchasers, shall have received letters, dated the Closing Date, of Ernst & Young LLP and Deloitte & Touche LLP, as applicable, which meet the requirements of subsections (a) and (b) of this Section, except that the specified date referred to in such subsections will be a date not more than three days prior to the Closing Date for the purposes of this subsection.
 
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(i) The Parent will furnish the Representatives with such conformed copies of such opinions, certificates, letters and documents as the Representatives reasonably request. The Representatives may in their sole discretion waive on behalf of the Initial Purchasers compliance with any conditions to the obligations of the Initial Purchasers under this Agreement and the Terms Agreement.
If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, the Terms Agreement and this Agreement may be terminated by the Representatives by notice to the Parent at any time at or prior to the Closing Date, and such termination shall be without liability of any party to any other party except as provided in Section 4(i) and except that Sections 2, 4, 7, 9 and 16 hereof shall survive any such termination and remain in full force and effect.
6. Offer, Sale and Resale Procedures . Each of the Initial Purchasers, on the one hand, and the Parent and the Guarantor, on the other hand, hereby agree to observe the following procedures in connection with the offer and sale of the Offered Securities:
(a) Offers and sales of the Offered Securities will be made only by the Initial Purchasers or Affiliates thereof qualified to do so in the jurisdictions in which such offers or sales are made. Each such offer or sale shall only be made to persons whom the offeror or seller reasonably believes to be “qualified institutional buyers” (within the meaning of Rule 144A) or non-U.S. persons outside the United States to whom the offeror or seller reasonably believes offers and sales of the Offered Securities may be made in reliance upon Regulation S upon the terms and conditions set forth in Schedule C to the Terms Agreement, which Schedule C is hereby expressly made a part hereof.
(b) The Offered Securities will be offered by approaching prospective Subsequent Purchasers on an individual basis. No general solicitation or general advertising (within the meaning of Rule 502 under the Act) will be used in the United States in connection with the offering of the Securities.
(c) Upon original issuance by the Parent, and until such time as the same is no longer required under the applicable requirements of the Act, the Offered Securities (and all Exchange Securities and other securities issued in exchange therefor or in substitution thereof, other than the Registered Securities) shall bear the following legend:
“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
 
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SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED HEREBY.”
Following the resale of the Offered Securities by the Initial Purchasers to Subsequent Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be liable or responsible to the Parent or the Guarantor for any losses, damages or liabilities suffered or incurred by the Parent or the Guarantor, including any losses, damages or liabilities under the Act, arising from or relating to any resale or transfer of any Offered Security.
 
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7. Indemnification and Contribution .
(a) Indemnification of the Initial Purchasers . The Parent will indemnify and hold harmless each Initial Purchaser, its partners, directors and officers and each person, if any, who controls such Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any losses, claims, damages or liabilities, joint or several, to which such Initial Purchaser may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Preliminary Offering Memorandum, the Disclosure Package, any Company Additional Written Communication, the Final Offering Memorandum, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Initial Purchaser for any legal or other expenses reasonably incurred by such Initial Purchaser in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Parent will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Parent by any Initial Purchaser through the Representatives, if any, specifically for use therein, it being understood and agreed that the only such information furnished by any Initial Purchaser consists of the information described as such in the Terms Agreement.
(b) Indemnity of the Parent and the Guarantor . Each Initial Purchaser will severally and not jointly indemnify and hold harmless the Parent and Phillips 66 Company, their respective directors and officers and each person, if any, who controls the Parent or Phillips 66 Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities to which the Parent or Phillips 66 Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Preliminary Offering Memorandum, the Disclosure Package, any Company Additional Written Communication, the Final Offering Memorandum, or any amendment or supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Parent by such Initial Purchaser through the Representatives, if any, specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Parent or Phillips 66 Company in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by any Initial Purchaser consists of the information described as such in the Terms Agreement.
 
22

(c) Notice and Procedures . Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify in writing the indemnifying party of the commencement thereof; but the omission so to notify in writing the indemnifying party (i) will not relieve it from liability under subsection (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of fault, culpability or a failure to act by or on behalf of an indemnified party.
(d) Contribution . If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Parent and the Guarantor, on the one hand and the Initial Purchasers on the other from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Parent and the Guarantor, on the one hand and the Initial Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Parent and the Guarantor on the one hand and the Initial Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Parent bear to the total fees paid to (including any discounts and commissions received by) the Initial Purchasers. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Parent or the Initial Purchasers and the parties’ relative intent, knowledge, access to
 
23

information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Initial Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities purchased by it and distributed to the Subsequent Purchasers were offered to the Subsequent Purchasers exceeds the amount of any damages which such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations in this subsection (d) to contribute are several in proportion to their respective purchase obligations and not joint.
(e) Non-Exclusive Remedies . The obligations of the Parent under this Section shall be in addition to any liability which the Parent may otherwise have and shall extend, upon the same terms and conditions, to the partners, directors, officers and each person, if any, who controls any Initial Purchaser within the meaning of the Act; and the obligations of the Initial Purchasers under this Section shall be in addition to any liability which the respective Initial Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each director of the Parent or Phillips 66 Company and to each person, if any, who controls the Parent or Phillips 66 Company within the meaning of the Act.
(f) The Parent and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations in subsection (d) above.
8. Default of Initial Purchasers . If any Initial Purchaser or Initial Purchasers default in their obligations to purchase Offered Securities under the Terms Agreement (including the provisions of this Agreement) and the aggregate principal amount of Offered Securities that such defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase does not exceed 10% of the total principal amount of Offered Securities, the Representatives may make arrangements satisfactory to the Parent for the purchase of such Offered Securities by other persons, including any of the Initial Purchasers, but if no such arrangements are made by the Closing Date, the non-defaulting Initial Purchasers shall be obligated severally, in proportion to their respective commitments under the Terms Agreement (including the provisions of this Agreement), to purchase the Offered Securities that such defaulting Initial Purchasers agreed but failed to purchase. If any Initial Purchaser or Initial Purchasers so default and the aggregate principal amount of Offered Securities with respect to which such default or defaults occur exceeds 10% of the total principal amount of Offered Securities and arrangements satisfactory to the Representatives and the Parent for the purchase of such Offered
 
24

Securities by other persons are not made within 36 hours after such default, the Terms Agreement (including the provisions of this Agreement) will terminate without liability on the part of any non-defaulting Initial Purchaser and the Parent, except as provided in Section 9. As used in this Agreement, the term “Initial Purchaser” includes any person substituted for an Initial Purchaser under this Section. Nothing herein will relieve a defaulting Initial Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations . The respective indemnities, agreements, rights of contribution, representations, warranties and other statements of the Parent or the Guarantor or their respective officers and of the several Initial Purchasers set forth in or made pursuant to the Terms Agreement (including the provisions of this Agreement) will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Initial Purchaser or the Parent, the Guarantor or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If the Terms Agreement is terminated pursuant to Section 8 or if for any reason the purchase of the Offered Securities by the Initial Purchasers is not consummated, the Parent shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 4(i) and the respective obligations of the Parent and the Initial Purchasers pursuant to Section 8 shall remain in effect. If the purchase of the Offered Securities by the Initial Purchasers is not consummated for any reason other than solely because of the termination of the Terms Agreement pursuant to Section 8 or the occurrence of any event specified in clause (iii), (iv) or (v) of Section 5(b), the Parent will reimburse the Initial Purchasers for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Offered Securities.
10. No Fiduciary Duty . The Parent hereby acknowledges and agrees that (i) the purchase and sale of any Offered Securities pursuant to this Agreement and the applicable Terms Agreement is an arm’s-length commercial transaction between the Parent and the Guarantor, on the one hand, and the Initial Purchasers and any affiliate through which it may be acting, on the other, (ii) the Initial Purchasers are acting as principal and not as an agent, financial advisor or fiduciary of the Parent or the Guarantor and (iii) the Parent’s engagement of the Initial Purchasers in connection with any offering and the process leading up to the offering of any Offered Securities is as independent contractors and not in any other capacity. Furthermore, the Parent agrees that it is solely responsible for making its own judgments in connection with any offering (irrespective of whether any of the Initial Purchasers has advised or is currently advising the Parent or Phillips 66 Company on related or other matters). The Parent agrees that it will not claim that the Initial Purchasers have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Parent or the Guarantor, in connection with such offering or the process leading thereto.
11. Notices . All communications hereunder will be in writing and, if sent to the Initial Purchasers, will be mailed, delivered or sent by facsimile and confirmed to them at their address furnished to the Parent in writing for the purpose of communications hereunder or, if sent to the Parent, will be mailed, delivered or sent by facsimile and
 
25

confirmed to it at Phillips 66, Houston Operations Center, 1075 W. Sam Houston Parkway N. Suite 200, Houston, TX 77043, Facsimile: (832) 765-9870, Attention: Treasurer, or such other address as the Parent may notify the Initial Purchasers.
12. Successors . The Terms Agreement (including the provisions of this Agreement) will inure to the benefit of and be binding upon the Parent, the Guarantor and such Initial Purchasers as are identified in the Terms Agreement and their respective successors and the officers and directors and controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder.
13. Representation of Initial Purchasers . Any Representatives will act for the several Initial Purchasers in connection with the financing described in the Terms Agreement, and any action under such Terms Agreement (including the provisions of this Agreement) taken by the Representatives will be binding upon all the Initial Purchasers.
14. Counterparts . The Terms Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same agreement.
15. Effect of Headings . The Article and Section headings herein are for convenience only and shall not affect the meaning or interpretation of this Agreement.
16. Applicable Law . This Agreement and the Terms Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws.
17. Jurisdiction. Each of the Parent and the Guarantor hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to the Terms Agreement (including the provisions of this Agreement) or the transactions contemplated thereby.
18. Waiver of Jury Trial . Each of the Parent and the Guarantor and each of the Initial Purchasers hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
 
26

Phillips 66 (the “Parent”)
Debt Securities
fully and unconditionally guaranteed by Phillips 66 Company
TERMS AGREEMENT
April 11, 2017
 
To:	The Representatives of the Initial Purchasers identified herein	
 
Ladies	& Gentlemen:	
The Parent agrees to sell to the several Initial Purchasers named in Schedule A hereto for their respective accounts, on and subject to the terms and conditions of the Purchase Agreement dated April 11, 2017 (“ Purchase Agreement ”), the following securities (“ Offered Securities ”) on the following terms:

Title:	  	$300,000,000 Floating Rate Notes Due 2019 (“ 2019 Notes ”).	
		
	  	$300,000,000 Floating Rate Notes Due 2020 (“ 2020 Notes ”).	
		
Principal Amount:	  	$300,000,000 of 2019 Notes.	
		
	  	$300,000,000 of 2020 Notes.	
		
Interest:	  	Floating rate equal to three-month LIBOR plus 0.65% per annum on the 2019 Notes from April 21, 2017, payable quarterly in arrears on January 15, April 15, July 15 and October 15, commencing July 17, 2017 (the next succeeding business day after July 15, 2017).	
		
	  	Floating rate equal to three-month LIBOR plus 0.75% per annum on the 2020 Notes from April 21, 2017, payable quarterly in arrears on January 15, April 15, July 15 and October 15, commencing July 17, 2017 (the next succeeding business day after July 15, 2017).	
		
Maturity:	  	April 15, 2019 for the 2019 Notes.	
		
	  	April 15, 2020 for the 2020 Notes.	
Optional Redemption: The Parent may elect to redeem any or all of the notes of a series beginning on the first business day after the date that is one year following the date of issuance of the Offered Securities and at any time thereafter, upon 30 days’ notice, at a price equal to the principal amount of notes redeemed plus accrued but unpaid interest to, but not including, the redemption date. If any notes are exchanged for Exchange Securities, Phillips 66 Partners may elect to redeem the

Exchange Securities, in whole and not in part, at any time beginning on the later of the issuance date of such Exchange Notes and the first business day after the date that is one year following the date of the initial issuance of the notes, upon 30 days’ notice to the holders of such Exchange Securities, at a price equal to the principal amount of Exchange Securities redeemed plus accrued but unpaid interest to, but not including, the redemption date
Sinking Fund : None.
Listing : None.
Purchase Price: 99.70% of principal amount of the 2019 Notes and 99.65% of principal amount of the 2020 Notes, plus, in each case, accrued interest, if any, from April 21, 2017.
Initial Purchasers’ Fee: 0.30% of principal amount of the 2019 Notes and 0.35% of principal amount of the 2020 Notes.
Expected Reoffering Price: 100.00% of principal amount of the 2019 Notes, and 100.00% of principal amount of the 2020 Notes, in each case subject to change by the Representatives.
Closing: 10 A.M., New York City time, on April 21, 2017, at the offices of Cravath, Swaine & Moore LLP, 825 Eighth Avenue, New York, New York 10019 in Federal (same day) funds.
Settlement and Trading : Book-Entry Only via DTC.
Blackout : Until 14 days after the Closing Date.
Names and Addresses of Representatives:
Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
BNP Paribas Securities Corp.
787 7th Avenue
New York, NY 10019
RBC Capital Markets, LLC
200 Vesey Street, 8th Floor
New York, NY 10281
TD Securities (USA) LLC
31 West 52nd Street
New York, NY 10019
 
2

Execution Time: 5:00 p.m., New York City time, on the date hereof.
The respective principal amounts of the Offered Securities to be purchased by each of the Initial Purchasers are set forth opposite their names in Schedule A hereto.
The provisions of the Purchase Agreement are incorporated herein by reference. Capitalized terms used but not defined herein shall have the respective meanings given such terms in the Purchase Agreement.
Each of the Initial Purchasers severally and not jointly represents and warrants to, and agrees with, the Parent that:
(a) it will offer and sell Offered Securities only to (i) persons who it reasonably believes are “qualified institutional buyers” within the meaning of Rule 144A in transactions meeting the requirements of Rule 144A or (ii) upon the terms and conditions set forth in Schedule C hereto;
(b) it is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Act; and
(c) it will not offer or sell Offered Securities by any form of general solicitation or general advertising, including but not limited to the methods described in Rule 502(c) under the Act.
For purposes of Sections 2 and 7 of the Purchase Agreement, the only information furnished to the Parent by the Representatives on behalf of any Initial Purchaser for use in the Preliminary Offering Memorandum consists of the following information in the Preliminary Offering Memorandum furnished on behalf of each Initial Purchaser: the fifth and eighth paragraphs and the third sentence of the seventh paragraph under the caption “Plan of Distribution” in the Preliminary Offering Memorandum and the Final Offering Memorandum.
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each Initial Purchaser has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of Offered Securities which are the subject of the offering contemplated by the Preliminary Offering Memorandum and the Final Offering Memorandum to the public in that Relevant Member State other than:
(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;
 
3

(b) to fewer than 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the representatives for any such offer; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive;
provided that no such offer of the Offered Securities shall require the Parent, the Guarantor or any Initial Purchaser to publish a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer of the Offered Securities to the public” in relation to any Offered Securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Offered Securities to be offered so as to enable an investor to decide to purchase or subscribe the Offered Securities , as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression. “2010 PD Amending Directive” means Directive 2010/73/EU.
United Kingdom
Each Initial Purchaser has represented and agreed that it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act of 2000 (the “ FSMA ”)) received by it in connection with the issue or sale of the Offered Securities in circumstances in which Section 21(1) of the FSMA does not apply to Phillips 66 or Phillips 66 Company and it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the notes in, from or otherwise involving the United Kingdom.
 
4

Very truly yours,
Phillips 66

	 	By:	 	/s/ John D. Zuklic	
	 		 	John D. Zuklic	
	 		 	Vice President and Treasurer	
Phillips 66 Company

	 	By:	 	/s/ John D. Zuklic	
	 		 	John D. Zuklic	
	 		 	Vice President and Treasurer	

The foregoing Terms Agreement is hereby confirmed
and accepted as of the date first above written.
Deutsche Bank Securities Inc.
BNP Paribas Securities Corp.
RBC Capital Markets, LLC
TD Securities (USA) LLC
Acting on behalf of themselves and as
the Representatives of the several Initial Purchasers.

The foregoing Terms Agreement is hereby confirmed
and accepted as of the date first above written.
Acting on behalf of themselves and as
the Representatives of the several Initial Purchasers.
Deutsche Bank Securities Inc.

	 	By:	 	/s/ Mary Hardgrove	
	 		 	Mary Hardgrove	
	 		 	Managing Director	
			
	 	By:	 	/s/ John Han	
	 		 	John Han	
	 		 	Director	

The foregoing Terms Agreement is hereby confirmed
and accepted as of the date first above written.
Acting on behalf of themselves and as
the Representatives of the several Initial Purchasers.
BNP Paribas Securities Corp.

	 	By:	 	/s/ Andrew Shapiro	
	 		 	Andrew Shapiro	
	 		 	Managing Director	

The foregoing Terms Agreement is hereby confirmed
and accepted as of the date first above written.

	 	Acting on behalf of themselves and as
the Representatives of the several Initial Purchasers.	
		
	 	RBC Capital Markets, LLC	
			
	 	By:	 	/s/ Scott G. Primrose	
	 		 	Scott G. Primrose	
	 		 	Authorized Signatory	

The foregoing Terms Agreement is hereby confirmed
and accepted as of the date first above written.

	 	Acting on behalf of themselves and as	
	 	the Representatives of the several Initial Purchasers.	
		
	 	TD Securities (USA) LLC	
			
	 	By:	 	/s/ Elsa Wang	
	 		 	Elsa Wang	
	 		 	Director	

SCHEDULE A

Initial Purchaser	  	Principal
Amount of
2019 Notes	 	  	Principal
Amount of
2020 Notes	 	
Deutsche Bank Securities Inc.	  	$	51,000,000.00	 	  	$	51,000,000.00	 	
BNP Paribas Securities Corp.	  	 	51,000,000.00	 	  	 	51,000,000.00	 	
RBC Capital Markets, LLC	  	 	51,000,000.00	 	  	 	51,000,000.00	 	
TD Securities (USA) LLC	  	 	51,000,000.00	 	  	 	51,000,000.00	 	
Barclays Capital Inc.	  	 	10,500,000.00	 	  	 	10,500,000.00	 	
Citigroup Global Markets Inc.	  	 	10,500,000.00	 	  	 	10,500,000.00	 	
Credit Suisse Securities (USA) LLC	  	 	10,500,000.00	 	  	 	10,500,000.00	 	
Goldman, Sachs & Co.	  	 	10,500,000.00	 	  	 	10,500,000.00	 	
J.P. Morgan Securities LLC	  	 	10,500,000.00	 	  	 	10,500,000.00	 	
Mizuho Securities USA Inc.	  	 	10,500,000.00	 	  	 	10,500,000.00	 	
MUFG Securities Americas Inc.	  	 	10,500,000.00	 	  	 	10,500,000.00	 	
Scotia Capital (USA) Inc.	  	 	10,500,000.00	 	  	 	10,500,000.00	 	
BNY Mellon Capital Markets, LLC	  	 	1,091,000.00	 	  	 	1,091,000.00	 	
Commerz Markets LLC	  	 	1,091,000.00	 	  	 	1,091,000.00	 	
Credit Agricole Securities (USA) Inc.	  	 	1,091,000.00	 	  	 	1,091,000.00	 	
HSBC Securities (USA) Inc.	  	 	1,091,000.00	 	  	 	1,091,000.00	 	
Lloyds Securities Inc.	  	 	1,091,000.00	 	  	 	1,091,000.00	 	
Lebenthal & Co., LLC	  	 	1,091,000.00	 	  	 	1,091,000.00	 	
SMBC Nikko Securities America, Inc.	  	 	1,091,000.00	 	  	 	1,091,000.00	 	
SunTrust Robinson Humphrey, Inc.	  	 	1,091,000.00	 	  	 	1,091,000.00	 	
UniCredit Capital Markets LLC	  	 	1,091,000.00	 	  	 	1,091,000.00	 	
U.S. Bancorp Investments, Inc.	  	 	1,091,000.00	 	  	 	1,091,000.00	 	
Wells Fargo Securities, LLC	  	 	1,090,000.00	 	  	 	1,090,000.00	 	
	  	 	 	 	  	 	 	 	
Total	  	$	300,000,000	 	  	$	300,000,000	 	

A-1

SCHEDULE B
Schedule of Pricing Supplements included in the Disclosure Package
1. Pricing Supplement dated April 11, 2017, relating to the final terms of the Offered Securities.
 
B-1

SCHEDULE C
Resale Pursuant to Regulation S . Each Initial Purchaser agrees that, other than in respect of offers and sales made pursuant to Rule 144A:
(a) It has not offered or sold and will not offer or sell the Offered Securities in the United States or to, or for the benefit or account of, a U.S. Person (other than a distributor), in each case, as defined in Rule 902 of Regulation S (i) as part of its distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the offering of the Offered Securities pursuant hereto and the Closing Date, other than in accordance with Regulation S or another exemption from the registration requirements of the Act. Each Initial Purchaser further agrees that, during such 40-day restricted period, it will not cause any advertisement with respect to the Offered Securities (including any “tombstone” advertisement) to be published in any newspaper or periodical or posted in any public place and will not issue any circular relating to the Offered Securities, except such advertisements as permitted by and include the statements required by Regulation S.
Each Initial Purchaser agrees that, at or prior to confirmation of a sale of Offered Securities by it to any distributor, dealer or person receiving a selling concession, fee or other remuneration during the 40-day restricted period referred to in Rule 903 of Regulation S, it will send to such distributor, dealer or person receiving a selling concession, fee or other remuneration a confirmation or notice to substantially the following effect:
“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the “ Act ”), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of your distribution at any time or (ii) otherwise until 40 days after the later of the date the Securities were first offered to persons other than distributors in reliance on Regulation S and the Closing Date, except in either case in accordance with Regulation S under the Act (or in accordance with Rule 144A under the Act or to accredited investors in transactions that are exempt from the registration requirements of the Act), and in connection with any subsequent sale by you of the Securities covered hereby in reliance on Regulation S under the Act during the period referred to above to any distributor, dealer or person receiving a selling concession, fee or other remuneration, you must deliver a notice to substantially the foregoing effect. Terms used above have the meanings assigned to them in Regulation S under the Act.”
Such Initial Purchaser agrees that the Offered Securities offered and sold in reliance on Regulation S will be represented upon issuance by a global security that may not be exchanged for definitive securities until the expiration of the 40-day restricted period referred to in Rule 903 of Regulation S and only upon certification of beneficial
 
C-1

ownership of such Offered Securities by non-U.S. persons or U.S. persons who purchased such Offered Securities in transactions that were exempt from the registration requirements of the Act.
 
C-2

Exhibit 4.1

PHILLIPS 66
and
PHILLIPS 66 COMPANY
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Trustee
Indenture
Dated as of April 21, 2017
Debt Securities

PHILLIPS 66
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF April 21, 2017

Section of Trust Indenture Act of 1939	  	Section(s) of Indenture	
Section 310	 	(a)(1)	  	7.10	
	 	(a)(2)	  	7.10	
	 	(a)(3)	  	Not Applicable	
	 	(a)(4)	  	Not Applicable	
	 	(a)(5)	  	7.10	
	 	(b)	  	7.08, 7.10	
Section 311	 	(a)	  	7.11	
	 	(b)	  	7.11	
	 	(c)	  	Not Applicable	
Section 312	 	(a)	  	2.07	
	 	(b)	  	12.03	
	 	(c)	  	12.03	
Section 313	 	(a)	  	7.06	
	 	(b)	  	7.06	
	 	(c)	  	7.06	
	 	(d)	  	7.06	
Section 314	 	(a)	  	4.03, 4.04	
	 	(b)	  	Not Applicable	
	 	(c)(1)	  	12.04	
	 	(c)(2)	  	12.04	
	 	(c)(3)	  	Not Applicable	
	 	(d)	  	Not Applicable	
	 	(e)	  	12.05	
Section 315	 	(a)	  	7.01(b)	
	 	(b)	  	7.05	
	 	(c)	  	7.01(a)	
	 	(d)	  	7.01(c)	
	 	(d)(1)	  	7.01(c)(1)	
	 	(d)(2)	  	7.01(c)(2)	
	 	(d)(3)	  	7.01(c)(3)	
	 	(e)	  	6.11	
Section 316	 	(a)(1)(A)	  	6.05	
	 	(a)(1)(B)	  	6.04	
	 	(a)(2)	  	Not Applicable	
	 	(a)(last sentence)	  	2.11	
	 	(b)	  	6.07	
Section 317	 	(a)(1)	  	6.08	
	 	(a)(2)	  	6.09	
	 	(b)	  	2.06	
Section 318	 	(a)	  	12.01	
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
 
i

TABLE OF CONTENTS

ARTICLE I         DEFINITIONS AND INCORPORATION BY REFERENCE	  	 	1	 	
			
SECTION 1.01.	 	Definitions	  	 	1	 	
SECTION 1.02.	 	Other Definitions	  	 	6	 	
SECTION 1.03.	 	Incorporation by Reference of Trust Indenture Act	  	 	6	 	
SECTION 1.04.	 	Rules of Construction	  	 	6	 	
		
ARTICLE II         THE SECURITIES	  	 	7	 	
			
SECTION 2.01.	 	Amount Unlimited; Issuable in Series	  	 	7	 	
SECTION 2.02.	 	Denominations	  	 	9	 	
SECTION 2.03.	 	Forms Generally	  	 	9	 	
SECTION 2.04.	 	Execution, Authentication, Delivery and Dating	  	 	10	 	
SECTION 2.05.	 	Registrar and Paying Agent	  	 	11	 	
SECTION 2.06.	 	Paying Agent to Hold Money in Trust	  	 	11	 	
SECTION 2.07.	 	Holder Lists	  	 	12	 	
SECTION 2.08.	 	Transfer and Exchange	  	 	12	 	
SECTION 2.09.	 	Replacement Securities	  	 	12	 	
SECTION 2.10.	 	Outstanding Securities	  	 	13	 	
SECTION 2.11.	 	Original Issue Discount, Foreign-Currency Denominated and Treasury Securities	  	 	13	 	
SECTION 2.12.	 	Temporary Securities	  	 	13	 	
SECTION 2.13.	 	Cancellation	  	 	13	 	
SECTION 2.14.	 	Payments; Defaulted Interest	  	 	14	 	
SECTION 2.15.	 	Persons Deemed Owners	  	 	14	 	
SECTION 2.16.	 	Computation of Interest	  	 	14	 	
SECTION 2.17.	 	Global Securities; Book-Entry Provisions	  	 	14	 	
SECTION 2.18.	 	CUSIP Numbers	  	 	16	 	
		
ARTICLE III         REDEMPTION	  	 	16	 	
			
SECTION 3.01.	 	Applicability of Article	  	 	16	 	
SECTION 3.02.	 	Notice to the Trustee	  	 	16	 	
SECTION 3.03.	 	Selection of Securities To Be Redeemed	  	 	16	 	
SECTION 3.04.	 	Notice of Redemption	  	 	17	 	
SECTION 3.05.	 	Effect of Notice of Redemption	  	 	17	 	
SECTION 3.06.	 	Deposit of Redemption Price	  	 	17	 	
SECTION 3.07.	 	Securities Redeemed or Purchased in Part	  	 	18	 	
SECTION 3.08.	 	Purchase of Securities	  	 	18	 	
SECTION 3.09.	 	Mandatory and Optional Sinking Funds	  	 	18	 	
SECTION 3.10.	 	Satisfaction of Sinking Fund Payments with Securities	  	 	18	 	
SECTION 3.11.	 	Redemption of Securities for Sinking Fund	  	 	18	 	
		
ARTICLE IV         COVENANTS SECTION	  	 	19	 	
			
SECTION 4.01.	 	Payment of Securities	  	 	19	 	
SECTION 4.02.	 	Maintenance of Office or Agency	  	 	19	 	
SECTION 4.03.	 	SEC Reports; Financial Statements	  	 	19	 	
SECTION 4.04.	 	Compliance Certificate	  	 	20	 	
SECTION 4.05.	 	Corporate Existence	  	 	20	 	
SECTION 4.06.	 	Waiver of Stay, Extension or Usury Laws	  	 	20	 	
SECTION 4.07.	 	Additional Amounts	  	 	21	 	
SECTION 4.08.	 	Limitation on Liens	  	 	21	 	
SECTION 4.09.	 	Limitation on Sale/Leaseback Transactions	  	 	21	 	
		
ARTICLE V         SUCCESSORS SECTION	  	 	22	 	
			
SECTION 5.01.	 	Limitations on Mergers and Consolidations	  	 	22	 	
SECTION 5.02.	 	Successor Person Substituted	  	 	22	 	
 
ii

							
ARTICLE VI         DEFAULTS AND REMEDIES SECTION	  	 	23	 	
			
SECTION 6.01.	 	Events of Default	  	 	23	 	
SECTION 6.02.	 	Acceleration	  	 	24	 	
SECTION 6.03.	 	Other Remedies	  	 	24	 	
SECTION 6.04.	 	Waiver of Defaults	  	 	24	 	
SECTION 6.05.	 	Control by Majority	  	 	25	 	
SECTION 6.06.	 	Limitations on Suits	  	 	25	 	
SECTION 6.07.	 	Rights of Holders to Receive Payment	  	 	25	 	
SECTION 6.08.	 	Collection Suit by Trustee	  	 	25	 	
SECTION 6.09.	 	Trustee May File Proofs of Claim	  	 	26	 	
SECTION 6.10.	 	Priorities	  	 	26	 	
SECTION 6.11.	 	Undertaking for Costs	  	 	27	 	
		
ARTICLE VII         TRUSTEE SECTION	  	 	27	 	
			
SECTION 7.01.	 	Duties of Trustee	  	 	27	 	
SECTION 7.02.	 	Rights of Trustee	  	 	28	 	
SECTION 7.03.	 	May Hold Securities	  	 	29	 	
SECTION 7.04.	 	Trustee’s Disclaimer	  	 	29	 	
SECTION 7.05.	 	Notice of Defaults	  	 	29	 	
SECTION 7.06.	 	Reports by Trustee to Holders	  	 	29	 	
SECTION 7.07.	 	Compensation and Indemnity	  	 	29	 	
SECTION 7.08.	 	Replacement of Trustee	  	 	30	 	
SECTION 7.09.	 	Successor Trustee by Merger, etc.	  	 	31	 	
SECTION 7.10.	 	Eligibility; Disqualification	  	 	31	 	
SECTION 7.11.	 	Preferential Collection of Claims Against the Issuer or any Guarantor	  	 	32	 	
		
ARTICLE VIII         DISCHARGE OF INDENTURE	  	 	32	 	
			
SECTION 8.01.	 	Termination of the Issuer’s and each Guarantor’s Obligations	  	 	32	 	
SECTION 8.02.	 	Application of Trust Money; Other Miscellaneous Provisions	  	 	34	 	
SECTION 8.03.	 	Repayment to Issuer or Guarantor	  	 	35	 	
SECTION 8.04.	 	Reinstatement	  	 	35	 	
		
ARTICLE IX         SUPPLEMENTAL INDENTURES AND AMENDMENTS	  	 	35	 	
			
SECTION 9.01.	 	Without Consent of Holders	  	 	35	 	
SECTION 9.02.	 	With Consent of Holders	  	 	36	 	
SECTION 9.03.	 	Compliance with Trust Indenture Act	  	 	37	 	
SECTION 9.04.	 	Revocation and Effect of Consents	  	 	37	 	
SECTION 9.05.	 	Notation on or Exchange of Securities	  	 	38	 	
SECTION 9.06.	 	Trustee to Sign Amendments, etc.	  	 	38	 	
		
ARTICLE X         GUARANTEE	  	 	38	 	
			
SECTION 10.01.	 	Guarantees	  	 	38	 	
SECTION 10.02.	 	Proceedings Against Guarantors	  	 	39	 	
SECTION 10.03.	 	Subrogation	  	 	39	 	
SECTION 10.04.	 	Guarantee for Benefit of Holders	  	 	39	 	
		
ARTICLE XI         EXCHANGE SECURITIES	  	 	40	 	
			
SECTION 11.01.	 	Issuance of Exchange Securities	  	 	40	 	
SECTION 11.02.	 	Selection of Existing Securities to be Exchanged; Denominations	  	 	40	 	
SECTION 11.03.	 	Additional Conditions to Exchange	  	 	40	 	
SECTION 11.04.	 	Notice of Exchange	  	 	42	 	
SECTION 11.05.	 	Effect of Notice of Exchange	  	 	43	 	
SECTION 11.06.	 	Deposit of Exchange Securities and Accrued Interest	  	 	43	 	
SECTION 11.07.	 	Securities Exchanged in Part	  	 	43	 	
 
iii

							
ARTICLE XII         MISCELLANEOUS	  	 	43	 	
			
SECTION 12.01.	 	Trust Indenture Act Controls	  	 	43	 	
SECTION 12.02.	 	Notices	  	 	43	 	
SECTION 12.03.	 	Communication by Holders with Other Holders	  	 	44	 	
SECTION 12.04.	 	Certificate and Opinion as to Conditions Precedent	  	 	45	 	
SECTION 12.05.	 	Statements Required in Certificate or Opinion	  	 	45	 	
SECTION 12.06.	 	Rules by Trustee and Agents	  	 	45	 	
SECTION 12.07.	 	Legal Holidays	  	 	45	 	
SECTION 12.08.	 	No Recourse Against Others	  	 	45	 	
SECTION 12.09.	 	Governing Law; Waiver of Jury Trial	  	 	45	 	
SECTION 12.10.	 	No Adverse Interpretation of Other Agreements	  	 	46	 	
SECTION 12.11.	 	Successors	  	 	46	 	
SECTION 12.12.	 	Severability	  	 	46	 	
SECTION 12.13.	 	Counterpart Originals	  	 	46	 	
SECTION 12.14.	 	Table of Contents, Headings, etc.	  	 	46	 	
SECTION 12.15.	 	U.S.A. Patriot Act	  	 	46	 	

iv

INDENTURE dated as of April 21, 2017 among Phillips 66, a Delaware corporation (“Parent”), Phillips 66 Company, a Delaware corporation (“P66 Company”), and Wells Fargo Bank, National Association, a national banking association, as trustee (the “Trustee”).
Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Securities (as defined herein) to be issued from time to time in one or more series as provided in this Indenture:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01.    Definitions.
“Additional Amounts” means any additional amounts required by the express terms of a Security or by or pursuant to a Board Resolution, under circumstances specified therein or pursuant thereto, to be paid by the Issuer or the Guarantors, as the case may be, with respect to certain taxes, assessments or other governmental charges imposed on certain Holders and that are owing to such Holders.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person. For purposes of this definition, “control” of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.
“Agent” means any Registrar or Paying Agent.
“Attributable Debt,” when used with respect to any Sale/Leaseback Transaction, means, as at the time of determination, the present value (discounted at the rate set forth or implicit in the terms of the lease included in such transaction) of the total obligations of the lessee for rental payments (other than amounts required to be paid on account of taxes, maintenance, repairs, insurance, assessments, utilities, operating and labor costs and other items which do not constitute payments for property rights) during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended). In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall be the lesser of the net amount determined assuming termination upon the first date such lease may be terminated (in which case the net amount shall also include the amount of the penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated) or the net amount determined assuming no such termination.
“Bankruptcy Law” means Title 11 of the United States Code or any similar federal, state or foreign law for the relief of debtors.
“Board of Directors,” when used with reference to Parent, the Issuer or any Guarantor, means the Board of Directors of Parent, the Issuer or such Guarantor, or in the event any such Person is a limited partnership, the Board of Directors of the general partner of such Person, as the case may be, or any committee thereof duly authorized, with respect to any particular matter, to act by or on behalf of the Board of Directors of Parent, the Issuer, such Guarantor, or such general partner, as the case may be.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of Parent, the Issuer or any Guarantor to have been duly adopted by the Board of Directors of Parent, the Issuer or such Guarantor, as the case may be, and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“Business Day” means any day that is not a Legal Holiday.
“Consolidated Adjusted Net Assets” means the total amount of assets less (1) all current liabilities (excluding the amount of those liabilities which are by their terms extendable or renewable at the option of the obligor to a date more than 12 months after the date as of which the amount is being determined and current maturities of long-term debt) and (2) total prepaid expenses and deferred charges, all as set forth on the most recent quarterly balance sheet of Parent and its consolidated subsidiaries and determined in accordance with GAAP.

“Corporate Trust Office of the Trustee” means the office of the Trustee located at 750 N. Saint Paul Place, Suite 1750, Dallas, Texas 75201, Attention: Corporate, Municipal and Escrow Services, and as may be located at such other address as the Trustee may give notice to Parent.
“Debt” means all notes, bonds, debentures or other similar evidences of debt for money borrowed.
“Default” means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default.
“Depositary” means, with respect to the Securities of any series issuable or issued in whole or in part in global form, the Person specified pursuant to Section 2.01 hereof as the initial Depositary with respect to the Securities of such series, until a successor shall have been appointed and become such pursuant to the applicable provision of this Indenture, and thereafter “Depositary” shall mean or include such successor.
“Dollar” or “$” means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debt.
“Eligible Exchange Securities Issuer” means each of P66 Company, PDI and PSXP.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute.
“Exchange Date” means the date established by Parent for an exchange of Existing Securities for Exchange Securities pursuant to Article XI.
“Exchange Securities” means a series of Securities issued by an Eligible Exchange Securities Issuer in exchange for all or a portion of a previously issued series of Securities in accordance with Article XI.
“Exchange Securities Issuer” means the Eligible Exchange Securities Issuer that issues Exchange Securities of a series pursuant to this Indenture in accordance with Article XI.
“Existing Securities” has the meaning set forth in Section 11.01.
“Funded Debt” means all Debt (including Debt incurred under any revolving credit, letter of credit or working capital facility) that matures by its terms, or that is renewable at the option of any obligor thereon to a date, more than one year after the date on which such Debt is originally incurred.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect from time to time.
“Global Security” means a Security that is issued in global form in the name of the Depositary with respect thereto or its nominee.
“Government Obligations” means, with respect to a series of Securities, direct obligations of the government that issues the currency in which the Securities of the series are payable for the payment of which the full faith and credit of such government is pledged, or obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such government, the payment of which is unconditionally guaranteed as a full faith and credit obligation by such government.
“Guarantee” shall mean the guarantee of the Issuer’s obligations under the Securities by a Guarantor as provided in Article X.
 
2

“Guarantor” means, (i) with respect to each series of Parent Securities, P66 Company, (ii) with respect to each series of Exchange Securities of which P66 Company is the Issuer, Parent, (iii) with respect to each series of Exchange Securities of which PDI or PSXP is the Issuer, each of Parent and P66 Company, and (iv) with respect to any series of Securities, each other Person, if any, named as a “Guarantor” of such series of Securities in one or more supplemental indentures establishing the terms of such series of Securities or in any other supplemental indenture relating to such series, until a successor to such Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Guarantor” shall mean such successor Person.
“Holder” means a Person in whose name a Security is registered.
“Indenture” means this Indenture as amended or supplemented from time to time pursuant to the provisions hereof, and includes the terms of a particular series of Securities established as contemplated by Section 2.01 (including a series of Exchange Securities permitted to be issued pursuant to Article XI).
“interest” means, when used with respect to an Original Issue Discount Security that by its terms bears interest only after Maturity, interest payable after Maturity.
“Interest Payment Date,” when used with respect to any Security, shall have the meaning assigned to such term in the Security as contemplated by Section 2.01.
“Issue Date” means, with respect to Securities of a series, the date on which the Securities of such series are originally issued under this Indenture.
“Issuer” means, in the case of Parent Securities, Parent and, in the case of Exchange Securities, the applicable Exchange Securities Issuer.
“Issuer Order” and “Issuer Request” mean, respectively, a written order or request signed in the name of the Issuer by two Officers of the Issuer and, in the case of an Issuer Order pursuant to Section 2.01 or 2.04, in the name of the applicable Guarantor by an Officer of such Guarantor, and delivered to the Trustee.
“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in any of The City of New York, New York; Houston, Texas or a Place of Payment are authorized or obligated by law, regulation or executive order to remain closed.
“Lien” means any mortgage, pledge, lien or security interest.
“Maturity” means, with respect to any Security, the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity thereof, or by declaration of acceleration, call for redemption or otherwise.
“Officer” means the Chairman of the Board, the President, any Vice Chairman of the Board, any Vice President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary of (a) Parent, (b) P66 Company, (c) PDI or (d) the general partner of PSXP, as applicable.
“Officers’ Certificate” means a certificate signed on behalf of an Issuer by two Officers and, in the case of an Officers’ Certificate of the Issuer pursuant to Section 2.01 or 2.04, by an Officer of such Issuer that meets the requirements of Sections 12.04 and 12.05; provided, that if the Issuer is PSXP, such Officers’ Certificate pursuant to Sections 2.01 or 2.04 shall be signed by an Officer of the general partner of PSXP.
“Opinion of Counsel” means a written opinion reasonably acceptable to the Trustee that meets the requirements of Sections 12.04 and 12.05. Such written opinion must be from legal counsel, and such counsel may be an employee of or counsel to Parent, the Issuer, any Guarantor or an Affiliate of Parent, the Issuer or any Guarantor.
“Original Issue Discount Security” means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.02.
 
3

“P66 Company” means Phillips 66 Company, a Delaware corporation.
“Parent” means Phillips 66, a Delaware corporation.
“Parent Securities” means a series of Securities issued pursuant to this Indenture in respect of which Parent is the Issuer and primary obligor.
“PDI” means Phillips 66 Project Development Inc., a Delaware corporation.
“Permitted Liens” means:
(i) Liens existing on the date of first issuance of a series of Securities (or in the case of a series of Securities constituting Exchange Securities, the date of first issuance of the relevant series of Existing Securities);
(ii) Liens on property or assets of, or any shares of stock of, or other equity interests in, or Debt of, any Person existing at the time such Person becomes a Subsidiary or a Principal Domestic Subsidiary or at the time such Person is merged into or consolidated with Parent or any Subsidiary or at the time of a sale, lease or other disposition of the properties of a Person (or a division thereof) as an entirety or substantially as an entirety to Parent or a Subsidiary;
(iii) Liens on assets (including improvements and accessions thereto and proceeds thereof) (a) existing at the time of acquisition thereof, (b) securing all or any portion of the cost of acquiring, constructing, improving, developing or expanding such assets or (c) securing Debt incurred prior to, at the time of, or within 24 months after, the later of the acquisition, the completion of construction, improvement, development or expansion or the commencement of commercial operation of such assets, for the purpose (in the case of this clause (c)) of (x) financing all or any part of the purchase price of such assets or (y) financing all or any part of the cost of construction, improvement, development or expansion of any such assets;
(iv) Liens in favor of Parent or any Subsidiary of Parent;
(v) Liens securing industrial development, pollution control or other revenue bonds issued or guaranteed by the United States of America, or any State, or any department, agency, instrumentality or political subdivision of either;
(vi) Liens on personal property, other than shares of stock or Debt of any Principal Domestic Subsidiary, securing loans maturing not more than one year from the date of the creation thereof;
(vii) statutory liens or landlords’, carriers’, warehouseman’s, mechanics’, suppliers’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate proceedings; and
(viii) any extensions, substitutions, replacements or renewals in whole or in part of a Lien enumerated in clauses (i) through (vii) above or any Debt secured by such a Lien; provided that (a) such new Lien shall be limited to all or part of the same property that secured the original Lien, plus improvements on such property, and (b) the principal amount of Debt secured by such Lien and not otherwise authorized by clauses (i) through (vii) above or otherwise permitted does not materially exceed the principal amount of Debt so secured plus any premium or fee payable in connection with any such extension, substitution, replacement or renewal.
“Person” means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint stock company, trust, unincorporated organization or government or other agency, instrumentality or political subdivision thereof or other entity of any kind.
“Place of Payment” means, with respect to the Securities of any series, the place or places where the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of that series are payable as specified in accordance with Section 2.01 subject to the provisions of Section 4.02.
“principal” of a Security means the principal of the Security plus, when appropriate, the premium, if any, on the Security.
 
4

“Principal Domestic Subsidiary” means P66 Company and any Subsidiary (i) that has substantially all of its assets located in the United States, (ii) that owns a Principal Property and (iii) in which Parent’s direct or indirect capital investment, together with the outstanding balance of (a) any loans and advances made to such Subsidiary by Parent or any other Subsidiary and (b) any debt of such Subsidiary guaranteed by Parent or any other Subsidiary, exceeds $100,000,000.
“Principal Property” means any refinery or manufacturing plant (excluding any transportation or marketing facilities or assets) located in the United States, in each case owned by Parent or a Subsidiary, except any refinery or plant that, in the opinion of the Board of Directors of Parent, is not of material importance to the total business conducted by Parent and its consolidated subsidiaries.
“PSXP” means Phillips 66 Partners LP, a Delaware limited partnership.
“Redemption Date” means, with respect to any Security to be redeemed, the date fixed for such redemption by or pursuant to this Indenture.
“Redemption Price” means, with respect to any Security to be redeemed, the price at which it is to be redeemed pursuant to this Indenture.
“Responsible Officer” means any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
“Rule 144A Securities” means Securities of a series designated pursuant to Section 2.01 as entitled to the benefits of Section 4.03(b).
“Sale/Leaseback Transaction” means any arrangement with any Person pursuant to which Parent or any Subsidiary leases any Principal Property that has been or is to be sold or transferred by Parent or such Subsidiary to such Person, other than (1) temporary leases for a term, including renewals at the option of the lessee, of not more than three years, (2) leases between Parent and a Subsidiary or between Subsidiaries, (3) leases of Principal Property executed by the time of, or within 12 months after the latest of, the acquisition, the completion of construction or improvement, or the commencement of commercial operation of the Principal Property, and (4) arrangements pursuant to any provision of law with an effect similar to the former Section 168(f)(8) of the Internal Revenue Code of 1954.
“SEC” means the Securities and Exchange Commission.
“Securities” means Parent Securities and Exchange Securities authenticated and delivered under this Indenture.
“Security Custodian” means, with respect to Securities of a series issued in global form, the Trustee for Securities of such series, as custodian with respect to the Securities of such series, or any successor entity thereto.
“Stated Maturity” means, when used with respect to any Security or any installment of principal thereof or interest thereon, the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
“Subsidiary” means a Person at least a majority of the outstanding voting stock of which is owned, directly or indirectly, by Parent or by one or more other Subsidiaries, or by Parent and one or more other Subsidiaries. For the purposes of this definition, “voting stock” means stock having voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.
“TIA” means the Trust Indenture Act of 1939, as amended, as in effect on the date hereof.
“Trustee” means the Person named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture, and thereafter “Trustee” means each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series means the Trustee with respect to Securities of that series.
 
5

“United States” means the United States of America (including the States and the District of Columbia) and its territories and possessions, which include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.
“U.S. Government Obligations” means Government Obligations with respect to Securities payable in Dollars.
SECTION 1.02.    Other Definitions.

TERM	  	DEFINED IN
SECTION	
“Bankruptcy Custodian”	  	6.01	
“Conversion Event”	  	6.01	
“covenant defeasance”	  	8.01	
“Event of Default”	  	6.01	
“Exchange Rate”	  	2.11	
“Judgment Currency”	  	6.10	
“legal defeasance”	  	8.01	
“mandatory sinking fund payment”	  	3.09	
“optional sinking fund payment”	  	3.09	
“Paying Agent”	  	2.05	
“Registrar”	  	2.05	
“Required Currency”	  	6.10	
“Successor”	  	5.01	
SECTION 1.03.    Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture (and if the Indenture is not qualified under the TIA at that time, as if it were so qualified unless otherwise provided). The following TIA terms used in this Indenture have the following meanings:
“Commission” means the SEC.
“indenture securities” means the Securities.
“indenture security holder” means a Holder.
“indenture to be qualified” means this Indenture.
“indenture trustee” or “institutional trustee” means the Trustee.
“obligor” on the indenture securities means the Issuer, each Guarantor or any other obligor on the Securities.
All terms used in this Indenture that are defined by the TIA, defined by a TIA reference to another statute or defined by an SEC rule under the TIA have the meanings so assigned to them.
SECTION 1.04.    Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(3) “or” is not exclusive;
 
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(4) words in the singular include the plural, and in the plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) all references in this instrument to Articles and Sections are references to the corresponding Articles and Sections in and of this instrument.
ARTICLE II
THE SECURITIES
SECTION 2.01.    Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution of the Issuer, and set forth, or determined in the manner provided, in an Officers’ Certificate of the Issuer or in an Issuer Order, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series:
 
 	(1)	the title of the Securities of the series (which shall distinguish the Securities of the series from the Securities of all other series);	
 
 	(2)	whether the Securities of the series are Parent Securities or Exchange Securities and if such Securities are Exchange Securities, the applicable Exchange Securities Issuer (who shall constitute the “Issuer” of the Securities of the series for all purposes under this Indenture);	
 
 	(3)	in addition to the Guarantors specified in the definition of “Guarantor,” any additional Guarantors of the Securities of the series;	
 
 	(4)	if there is to be a limit, the limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.08, 2.09, 2.12, 2.17, 3.07 or 9.05 and except for any Securities which, pursuant to Section 2.04 or 2.17, are deemed never to have been authenticated and delivered hereunder); provided, however, that unless otherwise provided in the terms of the series, the authorized aggregate principal amount of such series may be increased before or after the issuance of any Securities of the series by a Board Resolution (or action pursuant to a Board Resolution) to such effect;	
 
 	(5)	whether any Securities of the series are to be issuable initially in temporary global form and whether any Securities of the series are to be issuable in permanent global form, as Global Securities or otherwise, and, if so, whether beneficial owners of interests in any such Global Security may exchange such interests for Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 2.17, and the initial Depositary and Security Custodian, if any, for any Global Security or Securities of such series;	
 
 	(6)	the manner in which any interest payable on a temporary Global Security on any Interest Payment Date will be paid if other than in the manner provided in Section 2.14;	
 
 	(7)	the date or dates on which the principal of and premium (if any) on the Securities of the series is payable or the method of determination thereof;	
 
 	(8)	the rate or rates, or the method of determination thereof, at which the Securities of the series shall bear interest, if any, whether and under what circumstances Additional Amounts with respect to such Securities shall be payable, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the record date for the interest payable on any Securities on any Interest Payment Date, or if other than provided herein, the Person to whom any interest on Securities of the series shall be payable;	
 
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 	(9)	the place or places where, subject to the provisions of Section 4.02, the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable;	
 
 	(10)	the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Issuer, if the Issuer is to have that option, and the manner in which the Issuer must exercise any such option, if different from those set forth herein;	
 
 	(11)	the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series are required to be redeemed by the Issuer, in whole or in part, and the manner in which the Issuer must redeem such Securities;	
 
 	(12)	the obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid in whole or in part pursuant to such obligation;	
 
 	(13)	if other than minimum denominations of $1,000 and any integral multiple of $1,000 in excess thereof, the denomination in which any Securities of that series shall be issuable;	
 
 	(14)	if other than Dollars, the currency or currencies (including composite currencies) or the form, including equity securities, other debt securities (including Securities), warrants or any other securities or property of Parent, any Exchange Securities Issuer, any Guarantor or any other Person, in which payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable;	
 
 	(15)	if the principal of, premium (if any) or interest on or any Additional Amounts with respect to the Securities of the series are to be payable, at the election of the Issuer or a Holder thereof, in a currency or currencies (including composite currencies) other than that in which the Securities are stated to be payable, the currency or currencies (including composite currencies) in which payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to Securities of such series as to which such election is made shall be payable, and the periods within which and the terms and conditions upon which such election is to be made;	
 
 	(16)	if the amount of payments of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series may be determined with reference to any commodities, currencies or indices, values, rates or prices or any other index or formula, the manner in which such amounts shall be determined;	
 
 	(17)	if other than the entire principal amount thereof, the portion of the principal amount of Securities of the series that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 6.02;	
 
 	(18)	any additional means of satisfaction and discharge of this Indenture and any additional conditions or limitations to discharge with respect to Securities of the series and the related Guarantees pursuant to Article VIII or any modifications of or deletions from such conditions or limitations;	
 
 	(19)	any deletions or modifications of or additions to the Events of Default set forth in Section 6.01 or covenants of Parent, any Exchange Securities Issuer or any Guarantor set forth in Article IV pertaining to the Securities of the series;	
 
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 	(20)	any restrictions or other provisions with respect to the transfer or exchange of Securities of the series, which may amend, supplement, modify or supersede those contained in this Article II;	
 
 	(21)	if the Securities of the series are to be convertible into or exchangeable for capital stock, other debt securities (including Securities), warrants, other equity securities or any other securities or property of Parent, any Exchange Securities Issuer, any Guarantor or any other Person, at the option of the Issuer or the Holder or upon the occurrence of any condition or event, the terms and conditions for such conversion or exchange;	
 
 	(22)	whether the Securities of the series are to be entitled to the benefit of Section 4.03(b) (and accordingly constitute Rule 144A Securities); and	
 
 	(23)	any other terms of the series (which terms shall not be prohibited by the provisions of this Indenture).	
All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 2.03) set forth, or determined in the manner provided, in the Officers’ Certificate or Issuer Order referred to above or in any applicable indenture supplemental hereto. Notwithstanding the foregoing, the terms of any series of Exchange Securities shall be set forth in a supplemental indenture hereto in accordance with Article XI.
If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action, together with such Board Resolution, shall be set forth in an Officers’ Certificate or certified by the Secretary or an Assistant Secretary of the Issuer and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate or Issuer Order setting forth the terms of the series.
SECTION 2.02.    Denominations.
The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 2.01. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series denominated in Dollars shall be issuable in minimum denominations of $1,000 and any integral multiple of $1,000 in excess thereof. The minimum denominations of the Securities may be changed in accordance with Article XI.
SECTION 2.03.    Forms Generally.
The Securities of each series shall be in fully registered form and in substantially such form or forms (including temporary or permanent global form) established by or pursuant to a Board Resolution of the Issuer or in one or more indentures supplemental hereto. Notwithstanding the foregoing, the form of Security in respect of any series of Exchange Securities shall be set forth in a supplemental indenture hereto in accordance with Article XI. The Securities may have notations, legends or endorsements required by law, securities exchange rule, the Issuer’s certificate of incorporation, bylaws or other similar governing documents, agreements to which the Issuer is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). A copy of the Board Resolution establishing the form or forms of Securities of any series shall be delivered to the Trustee at or prior to the delivery of the Issuer Order contemplated by Section 2.04 for the authentication and delivery of such Securities.
The definitive Securities of each series shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Officers executing such Securities, as evidenced by their execution thereof.
The Trustee’s certificate of authentication shall be in substantially the following form:
“This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee	
		
By:	 	 	
	 	Authorized Signatory”.	
 
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SECTION 2.04.    Execution, Authentication, Delivery and Dating.
Two Officers of the Issuer shall sign the Securities on behalf of the Issuer and, with respect to any Guarantees of the Securities, an Officer of the applicable Guarantor shall sign the Securities on behalf of such Guarantor, in each case by manual or facsimile signature.
If an Officer of the Issuer or a Guarantor whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall be valid nevertheless.
A Security shall not be entitled to any benefit under this Indenture or the related Guarantees or be valid or obligatory for any purpose until authenticated by the manual signature of an authorized signatory of the Trustee, which signature shall be conclusive evidence that the Security has been authenticated under this Indenture. Notwithstanding the foregoing, if any Security has been authenticated and delivered hereunder but never issued and sold by the Issuer, and the Issuer delivers such Security to the Trustee for cancellation as provided in Section 2.13, together with an Officers’ Certificate (which need not comply with Section 12.05 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Issuer, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture or the related Guarantees.
At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Securities of any series executed by the Issuer and the applicable Guarantors to the Trustee for authentication, and the Trustee shall authenticate and deliver such Securities for original issue upon an Issuer Order for the authentication and delivery of such Securities or pursuant to such procedures acceptable to the Trustee as may be specified from time to time by such Issuer Order. Such order shall specify the amount of the Securities to be authenticated, the date on which the original issue of Securities is to be authenticated, the name or names of the initial Holder or Holders and any other terms of the Securities of such series not otherwise determined. If provided for in such procedures, such Issuer Order may authorize (1) authentication and delivery of Securities of such series for original issue from time to time, with certain terms (including, without limitation, the Maturity dates or dates, original issue date or dates and interest rate or rates) that differ from Security to Security and (2) may authorize authentication and delivery pursuant to oral or electronic instructions from the Issuer or its duly authorized agent, which instructions shall be promptly confirmed in writing.
In authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive (in addition to the Issuer Order referred to above and the other documents required by Section 12.04), and (subject to Section 7.01) shall be fully protected in relying upon:
(a) in the case of Parent Securities, a copy of the Board Resolutions pursuant to which the terms and form of the Securities were established, certified by the Secretary or an Assistant Secretary of Parent to have been duly adopted by the Board of Directors and to be in full force and effect as of the date of such certificate, and if the terms and form of such Securities are established by an Officers’ Certificate pursuant to general authorization of the Board of Directors, such Officers’ Certificate;
(b) in the case of Parent Securities, an executed supplemental indenture, if any, and in the case of Exchange Securities, an executed supplemental indenture satisfying the requirements of Article XI;
(c) an Officers’ Certificate delivered in accordance with Sections 12.04 and 12.05; and
(d) an Opinion of Counsel to the effect that:
(i) the form of such Securities has been established in conformity with the provisions of this Indenture;
(ii) the terms of such Securities have been established in conformity with the provisions of this Indenture;
 
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(iii) when authenticated and delivered by the Trustee and issued by the Issuer in the manner and subject to any conditions specified in such Opinion of Counsel, such Securities, the related Guarantees and the supplemental indenture will constitute valid and binding obligations of the Issuer and each Guarantor, respectively, enforceable against the Issuer and each Guarantor, respectively, in accordance with their respective terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws in effect from time to time affecting the rights of creditors generally, and the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and
(iv) all conditions precedent to the authentication and delivery of the Securities and the execution of the supplemental indenture, have been complied with.
The Trustee shall not be required to authenticate such Securities if the issuance of such Securities pursuant to this Indenture would affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner not reasonably acceptable to the Trustee.
The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Issuer, any Guarantor or an Affiliate of the Issuer or such Guarantor.
Each Security shall be dated the date of its authentication.
SECTION 2.05.    Registrar and Paying Agent.
The Issuer shall maintain an office or agency for each series of Securities where Securities of such series may be presented for registration of transfer or exchange (“Registrar”) and an office or agency where Securities of such series may be presented for payment (“Paying Agent”). The Registrar shall keep a register of the Securities of such series and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent.
The Issuer shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Issuer shall notify the Trustee of the name and address of any Agent not a party to this Indenture. The Issuer may change any Paying Agent or Registrar without notice to any Holder. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuer, any Guarantor or any Subsidiary may act as Paying Agent or Registrar.
The Issuer initially appoints the Trustee as Registrar and Paying Agent.
SECTION 2.06.    Paying Agent to Hold Money in Trust.
The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or interest on or any Additional Amounts with respect to Securities and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. Upon payment over to the Trustee and upon accounting for any funds disbursed, the Paying Agent (if other than the Issuer, a Guarantor or a Subsidiary) shall have no further liability for the money. If the Issuer, a Guarantor or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Each Paying Agent shall otherwise comply with TIA Section 317(b).
 
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SECTION 2.07.    Holder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar with respect to a series of Securities, the Issuer shall furnish to the Trustee at least five Business Days before each Interest Payment Date with respect to such series of Securities, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of such series, and the Issuer shall otherwise comply with TIA Section 312(a).
SECTION 2.08.    Transfer and Exchange.
Except as set forth in Section 2.17 or as may be provided pursuant to Section 2.01:
When Securities of any series are presented to the Registrar with the request to register the transfer of such Securities or to exchange such Securities for an equal principal amount of Securities of the same series of like tenor and of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements and the requirements of this Indenture for such transactions are met; provided, however, that the Securities presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instruction of transfer in form reasonably satisfactory to the Registrar duly executed by the Holder thereof or by his attorney, duly authorized in writing, on which instruction the Registrar can rely.
To permit registrations of transfers and exchanges, the Issuer and each Guarantor shall execute and the Trustee shall authenticate Securities at the Registrar’s written request and submission of the Securities or Global Securities. No service charge shall be made to a Holder for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Issuer may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than such transfer tax or similar governmental charge payable upon exchanges pursuant to Section 2.12, 3.07 or 9.05). The Trustee shall authenticate Securities in accordance with the provisions of Section 2.04. Notwithstanding any other provisions of this Indenture to the contrary, the Issuer shall not be required to register the transfer or exchange of (a) any Security selected for redemption in whole or in part pursuant to Article III, except the unredeemed portion of any Security being redeemed in part, (b) any Security during the period beginning 15 Business Days prior to the mailing of notice of any offer to repurchase Securities of the series required pursuant to the terms thereof or of redemption of Securities of a series to be redeemed and ending at the close of business on the day of mailing, (c) any Security selected for exchange in whole or in part pursuant to Article XI, except the unredeemed portion of any Security being exchanged in part, or (d) any Security during the period beginning 15 Business Days prior to the mailing of notice of exchange of Securities of a series to be exchanged and ending at the close of business on the day of mailing.
The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Agent Members (as defined below) or beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
SECTION 2.09.    Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or if the Holder of a Security claims that the Security has been destroyed, lost or stolen and the Issuer and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of such Security, the Issuer shall issue, each Guarantor shall execute and the Trustee shall authenticate a replacement Security of the same series if the Trustee’s requirements are met. If any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Issuer in its discretion may, instead of issuing a new Security, pay such Security. Such Holder must furnish an indemnity bond that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, each Guarantor, the Trustee, any Agent or any authenticating agent from any loss that any of them may suffer if a Security is replaced. The Issuer and the Trustee may charge a Holder for their expenses in replacing a Security.
 
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Every replacement Security is an additional obligation of the Issuer.
SECTION 2.10.    Outstanding Securities.
The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation (including in connection with an issuance of Exchange Securities pursuant to Article XI), those reductions in the interest in a Global Security effected by the Trustee hereunder and those described in this Section 2.10 as not outstanding.
If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
A Security does not cease to be outstanding because the Issuer, any Guarantor or an Affiliate of the Issuer or any Guarantor holds the Security.
SECTION 2.11.    Original Issue Discount, Foreign-Currency Denominated and Treasury Securities.
In determining whether the Holders of the required principal amount of Securities have concurred in any direction, amendment, supplement, waiver or consent, (a) the principal amount of an Original Issue Discount Security shall be the principal amount thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 6.02, (b) the principal amount of a Security denominated in a foreign currency shall be the Dollar equivalent, as determined by the Issuer by reference to the noon buying rate in The City of New York for cable transfers for such currency, as such rate is certified for customs purposes by the Federal Reserve Bank of New York (the “Exchange Rate”) on the date of original issuance of such Security, of the principal amount (or, in the case of an Original Issue Discount Security, the Dollar equivalent, as determined by the Issuer by reference to the Exchange Rate on the date of original issuance of such Security, of the amount determined as provided in (a) above), of such Security and (c) Securities owned by the Issuer, any Guarantor or any other obligor upon the Securities or any Affiliate of the Issuer, or any Guarantor or of such other obligor shall be disregarded, except that, for the purpose of determining whether the Trustee shall be protected in relying upon any such direction, amendment, supplement, waiver or consent, only Securities that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.12.    Temporary Securities.
Until definitive Securities of any series are ready for delivery, the Issuer may prepare, the Issuer and each Guarantor shall execute and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities, but may have variations that the Issuer considers appropriate for temporary Securities. Without unreasonable delay, the Issuer shall prepare, the Issuer and each Guarantor shall execute and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.
SECTION 2.13.    Cancellation.
The Issuer or a Guarantor at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange, payment or redemption or for credit against any sinking fund payment. The Trustee shall cancel all Securities surrendered for registration of transfer, exchange, payment, redemption, replacement or cancellation or for credit against any sinking fund. All canceled Securities held by the Trustee shall be disposed of in accordance with the usual disposal procedures of the Trustee (subject to the record retention requirements of the Exchange Act). The Issuer may not issue new Securities to replace Securities that have been paid or that have been delivered to the Trustee for cancellation (other than Exchange Securities issued pursuant to Article XI).
 
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SECTION 2.14.    Payments; Defaulted Interest.
Unless otherwise provided as contemplated by Section 2.01, interest (except defaulted interest) on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Persons who are registered Holders of that Security at the close of business on the record date next preceding such Interest Payment Date, even if such Securities are canceled after such record date and on or before such Interest Payment Date. The Holder must surrender a Security to a Paying Agent to collect principal payments. Unless otherwise provided with respect to the Securities of any series, the Issuer will pay the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities in Dollars. Such amounts shall be payable at the offices of the Trustee or any Paying Agent, provided that at the option of the Issuer, the Issuer may pay such amounts (1) by wire transfer with respect to Global Securities or (2) by wire transfer to an account in the continental United States or check payable in such money mailed to a Holder’s registered address with respect to any Securities. Any accrued interest required to be paid in connection with an exchange pursuant to Article XI shall be paid to the Persons who are registered Holders of the Existing Securities to be exchanged as of the open of business on the applicable Exchange Date.
If the Issuer defaults in a payment of interest on the Securities of any series, the Issuer shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest on the defaulted interest, in each case at the rate provided in the Securities of such series and in Section 4.01. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on the Securities of any series and the date of the proposed payment. The Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. At least 15 days before any special record date selected by the Issuer, the Issuer (or the Trustee, in the name of and at the expense of the Issuer upon 20 days’ prior written notice from the Issuer setting forth such special record date and the interest amount to be paid) shall mail to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.
SECTION 2.15.    Persons Deemed Owners.
The Issuer, each Guarantor, the Trustee, any Agent and any authenticating agent may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payments of principal of, premium (if any) or interest on or any Additional Amounts with respect to such Security and for all other purposes. None of the Issuer, any Guarantor, the Trustee, any Agent or any authenticating agent shall be affected by any notice to the contrary.
SECTION 2.16.    Computation of Interest.
Except as otherwise specified as contemplated by Section 2.01 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a year comprising twelve 30-day months.
SECTION 2.17.    Global Securities; Book-Entry Provisions.
If Securities of a series are issuable in global form as a Global Security, as contemplated by Section 2.01, then, notwithstanding clause (13) of Section 2.01 and the provisions of Section 2.02, any such Global Security shall represent such of the outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of outstanding Securities from time to time endorsed thereon and that the aggregate amount of outstanding Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, transfers or redemptions. Any endorsement of a Global Security to reflect the amount, or any increase or decrease in the amount, of outstanding Securities represented thereby shall be made by the Trustee (i) in such manner and upon instructions given by such Person or Persons as shall be specified in such Security or in a Issuer Order to be delivered to the Trustee pursuant to Section 2.04 or (ii) otherwise in accordance with written instructions or such other written form of instructions as is customary for the Depositary for such Security, from such Depositary or its nominee on behalf of any Person having a beneficial interest in such Global Security. Subject to the provisions of Section 2.04 and, if applicable, Section 2.12, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified in such Security or in the applicable Issuer Order. With respect to the Securities of any series that are represented by a Global Security, the Issuer and each Guarantor authorize the execution and delivery by the Trustee of a letter of representations or other similar agreement or instrument in the form customarily provided for by the Depositary
 
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appointed with respect to such Global Security. Any Global Security may be deposited with the Depositary or its nominee, or may remain in the custody of the Trustee or the Security Custodian therefor pursuant to a FAST Balance Certificate Agreement or similar agreement between the Trustee and the Depositary. If an Issuer Order has been, or simultaneously is, delivered, any instructions by the Issuer with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 12.05 and need not be accompanied by an Opinion of Counsel.
Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary, or the Trustee or the Security Custodian as its custodian, or under such Global Security, and the Depositary may be treated by the Issuer, any Guarantor, the Trustee or the Security Custodian and any agent of the Issuer, any Guarantor, the Trustee or the Security Custodian as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, (i) the registered holder of a Global Security of a series may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action that a Holder of Securities of such series is entitled to take under this Indenture or the Securities of such series and (ii) nothing herein shall prevent the Issuer, any Guarantor, the Trustee or the Security Custodian, or any agent of the Issuer, any Guarantor, the Trustee or the Security Custodian, from giving effect to any written certification, proxy or other authorization furnished by the Depositary or shall impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a beneficial owner of any Security.
Notwithstanding Section 2.08, and except as otherwise provided pursuant to Section 2.01:
Transfers of a Global Security shall be limited to transfers of such Global Security in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in a Global Security may be transferred in accordance with the rules and procedures of the Depositary. Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in a Global Security if, and only if, either (1) the Depositary notifies the Issuer that it is unwilling or unable to continue as Depositary for the Global Security and a successor Depositary is not appointed by the Issuer within 90 days of such notice, (2) an Event of Default has occurred with respect to such series and is continuing and the Registrar has received a request from the Depositary to issue Securities in lieu of all or a portion of the Global Security (in which case the Issuer shall deliver Securities within 30 days of such request) or (3) the Issuer determines not to have the Securities represented by a Global Security.
In connection with any transfer of a portion of the beneficial interests in a Global Security to beneficial owners pursuant to this Section 2.17, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount equal to the principal amount of the beneficial interests in the Global Security to be transferred, and the Issuer and each Guarantor shall execute, and the Trustee upon receipt of an Issuer Order for the authentication and delivery of Securities shall authenticate and deliver, one or more Securities of the same series of like tenor and amount.
In connection with the transfer of all the beneficial interests in a Global Security to beneficial owners pursuant to this Section 2.17, the Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Issuer and each Guarantor shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interests in the Global Security, an equal aggregate principal amount of Securities of authorized denominations.
None of the Issuer, any Guarantor or the Trustee will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, Securities by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to such Securities. None of the Issuer, any Guarantor or the Trustee shall be liable for any delay by the related Global Security Holder or the Depositary in identifying the beneficial owners, and each such Person may conclusively rely on, and shall be protected in relying on, instructions from such Global Security Holder or the Depositary for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Securities to be issued).
The provisions of the last sentence of the third paragraph of Section 2.04 shall apply to any Global Security if such Global Security was never issued and sold by the Issuer and the Issuer delivers to the Trustee the Global Security together with an Officers’ Certificate (which need not comply with Section 12.05 and need not be
 
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accompanied by an Opinion of Counsel) with regard to the cancellation or reduction in the principal amount of Securities represented thereby, together with the written statement contemplated by the last sentence of the third paragraph of Section 2.04.
Notwithstanding the provisions of Sections 2.03 and 2.14, unless otherwise specified as contemplated by Section 2.01, payment of principal of, premium (if any) and interest on and any Additional Amounts with respect to any Global Security shall be made to the Person or Persons specified therein.
Neither the Trustee nor any Agent shall have any responsibility for any actions taken or not taken by the Depositary.
SECTION 2.18.    CUSIP Numbers.
The Issuer in issuing the Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption or exchange as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption or exchange and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption or exchange shall not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Trustee in writing of any change in the “CUSIP” numbers of the Securities.
ARTICLE III
REDEMPTION
SECTION 3.01.    Applicability of Article.
Securities of any series that are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 2.01 for Securities of any series) in accordance with this Article III.
SECTION 3.02.    Notice to the Trustee.
If the Issuer elects to redeem Securities of any series pursuant to this Indenture, it shall notify the Trustee of the Redemption Date and the principal amount of Securities of such series to be redeemed. The Issuer shall so notify the Trustee at least five Business Days before the giving of the notice of redemption pursuant to Section 3.04 (unless a shorter notice shall be satisfactory to the Trustee) by delivering to the Trustee an Officers’ Certificate stating that such redemption will comply with the provisions of this Indenture and of the Securities of such series. Any such notice may be canceled at any time prior to the mailing of such notice of such redemption to any Holder and shall thereupon be void and of no effect.
SECTION 3.03.    Selection of Securities To Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless all of the Securities of such series of a specified tenor are to be redeemed), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee from the outstanding Securities of such series (and tenor) not previously called for redemption, on a pro rata basis (or, in the case of Global Securities, pursuant to the applicable Depositary procedures).
The Trustee shall promptly notify the Issuer and the Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.
For purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities shall relate, in the case of any of the Securities redeemed or to be redeemed only in part, to the portion of the principal amount thereof which has been or is to be redeemed.
 
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SECTION 3.04.    Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at the address of such Holder appearing in the register of Securities maintained by the Registrar.
All notices of redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) that, unless the Issuer and the Guarantors default in making the redemption payment, interest on Securities called for redemption ceases to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Securities is to receive payment of the Redemption Price upon surrender to the Paying Agent of the Securities redeemed;
(4) if any Security is to be redeemed in part, the portion of the principal amount thereof to be redeemed and that on and after the Redemption Date, upon surrender for cancellation of such Security to the Paying Agent, a new Security or Securities in the aggregate principal amount equal to the unredeemed portion thereof will be issued without charge to the Holder;
(5) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price and the name and address of the Paying Agent;
(6) that the redemption is for a sinking or analogous fund, if such is the case; and
(7) the CUSIP number, if any, relating to such Securities, along with the statement in Section 2.18.
At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at its expense; provided that the Issuer shall have delivered to the Trustee, at least five Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 3.04 (unless a shorter notice shall be satisfactory to the Trustee), an Officers’ Certificate requesting that the Trustee give such notice with the form of such notice included as an exhibit thereto and setting forth the information required to be stated in such notice as provided in the preceding paragraph.
SECTION 3.05.    Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price. Upon surrender to the Paying Agent, such Securities called for redemption shall be paid at the Redemption Price, but interest installments whose maturity is on or prior to such Redemption Date will be payable on the relevant Interest Payment Dates to the Holders of record at the close of business on the relevant record dates specified pursuant to Section 2.01.
SECTION 3.06.    Deposit of Redemption Price.
On or prior to 11:00 a.m., New York City time, on any Redemption Date, the Issuer or a Guarantor shall deposit with the Trustee or the Paying Agent (or, if the Issuer or a Guarantor is acting as the Paying Agent, segregate and hold in trust as provided in Section 2.06) an amount of money in same day funds sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued and unpaid interest on and any Additional Amounts with respect to, the Securities or portions thereof which are to be redeemed on that date, other than Securities or portions thereof called for redemption on that date which have been delivered by the Issuer or a Guarantor to the Trustee for cancellation.
If the Issuer or a Guarantor complies with the preceding paragraph, then, unless the Issuer and the Guarantors default in the payment of such Redemption Price, interest on the Securities to be redeemed will cease to accrue on and after the applicable Redemption Date, whether or not such Securities are presented for payment, and the Holders of such Securities shall have no further rights with respect to such Securities except for the right to receive the
 
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Redemption Price upon surrender of such Securities. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal, premium, if any, any Additional Amounts, and, to the extent lawful, accrued interest thereon shall, until paid, bear interest from the Redemption Date at the rate specified pursuant to Section 2.01 or provided in the Securities or, in the case of Original Issue Discount Securities, such Securities’ yield to maturity.
SECTION 3.07.    Securities Redeemed or Purchased in Part.
Upon surrender to the Paying Agent of a Security to be redeemed in part, the Issuer and each Guarantor shall execute and the Trustee shall authenticate and deliver to the Holder of such Security without service charge to such Holder, upon delivery of an Issuer Order and an Officers’ Certificate and Opinion of Counsel pursuant to Sections 12.04 and 12.05, a new Security or Securities, of the same series and of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the unredeemed portion of the principal of the Security so surrendered that is not redeemed.
SECTION 3.08.    Purchase of Securities.
Unless otherwise specified as contemplated by Section 2.01, the Issuer, any Guarantor and any Affiliate of the Issuer or any Guarantor may, subject to applicable law, at any time purchase or otherwise acquire Securities in the open market or by private agreement. Any such acquisition shall not operate as or be deemed for any purpose to be a redemption of the indebtedness represented by such Securities. Any Securities purchased or acquired by the Issuer or a Guarantor may be delivered to the Trustee and, upon such delivery, the indebtedness represented thereby shall be deemed to be satisfied. Section 2.13 shall apply to all Securities so delivered.
SECTION 3.09.    Mandatory and Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment.” Unless otherwise provided by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.10. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series and by this Article III.
SECTION 3.10.    Satisfaction of Sinking Fund Payments with Securities.
The Issuer or any Guarantor may deliver outstanding Securities of a series (other than any previously called for redemption) and may apply as a credit Securities of a series that have been redeemed either at the election of the Issuer pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such series of Securities; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 3.11.    Redemption of Securities for Sinking Fund.
Not less than 45 days prior (unless a shorter period shall be satisfactory to the Trustee) to each sinking fund payment date for any series of Securities, the Issuer will deliver to the Trustee an Officers’ Certificate of the Issuer specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivery of or by crediting Securities of that series pursuant to Section 3.10 and will also deliver or cause to be delivered to the Trustee any Securities to be so delivered. Failure of the Issuer to timely deliver or cause to be delivered such Officers’ Certificate and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute the election of the Issuer that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof and that the Issuer will make no optional sinking fund payment with respect to such series as provided in this Section 3.11.
 
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If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $100,000 (or the Dollar equivalent thereof based on the applicable Exchange Rate on the date of original issue of the applicable Securities) or a lesser sum if the Issuer shall so request with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued and unpaid interest to the date fixed for redemption. If such amount shall be $100,000 (or the Dollar equivalent thereof as aforesaid) or less and the Issuer makes no such request then it shall be carried over until a sum in excess of $100,000 (or the Dollar equivalent thereof as aforesaid) is available. Not less than 30 days before each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.03 and cause notice of the redemption thereof to be given in the name of and at the expense of the Issuer in the manner provided in Section 3.04. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 3.05, 3.06 and 3.07.
ARTICLE IV
COVENANTS SECTION
SECTION 4.01.    Payment of Securities.
The Issuer shall pay the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of each series on the dates and in the manner provided in the Securities of such series and in this Indenture. Principal, premium, interest and any Additional Amounts shall be considered paid on the date due if the Paying Agent (other than the Issuer, a Guarantor or a Subsidiary) holds on that date money deposited by the Issuer or a Guarantor designated for and sufficient to pay all principal, premium, interest and any Additional Amounts then due.
The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium (if any), at a rate equal to the then applicable interest rate on the Securities to the extent lawful; and it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and any Additional Amounts (without regard to any applicable grace period) at the same rate to the extent lawful.
SECTION 4.02.    Maintenance of Office or Agency.
The Issuer will maintain in each Place of Payment for any series of Securities an office or agency (which may be an office of the Trustee, the Registrar or the Paying Agent) where Securities of that series may be presented for registration of transfer or exchange, where Securities of that series may be presented for payment and where notices and demands to or upon the Issuer or any Guarantor in respect of the Securities of that series and this Indenture may be served. Unless otherwise designated by the Issuer by written notice to the Trustee and each Guarantor, such office or agency shall be the office of the Trustee in The City of New York, which on the date hereof is located at 150 East 42nd Street, 40th Floor , New York, New York 10017. The Issuer will give prompt written notice to the Trustee and each Guarantor of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee and each Guarantor with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.
The Issuer may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Issuer will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
SECTION 4.03.    SEC Reports; Financial Statements.
(a) If the Issuer or any Guarantor is subject to the requirements of Section 13 or 15(d) of the Exchange Act, the Issuer or such Guarantor, as the case may be, shall file with the Trustee, within 15 days after it files the same with
 
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the SEC, copies of the annual and quarterly reports and the information, documents and other reports (or such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that the Issuer or such Guarantor is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act; provided, that the delivery obligation hereunder shall be deemed satisfied by the Issuer or such Guarantor if all such items are made available to the Trustee on the Issuer’s or such Guarantor’s website or the website of the SEC. If this Indenture is qualified under the TIA, but not otherwise, the Issuer and each Guarantor shall also comply with the provisions of TIA Section 314(a). Delivery of such reports, information and documents to the Trustee shall be for informational purposes only, and the Trustee’s receipt thereof shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including Parent’s or an Exchange Securities Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates or certificates delivered pursuant to Section 4.04). The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, any Issuer’s or any Guarantor’s compliance with this Section 4.03 with respect to the filing of such reports and such information, documents and other reports with the SEC or the making available of such reports and such information, documents and other reports on the Issuer’s or such Guarantor’s website or the website of the SEC.
(b) If Parent or the Issuer is not subject to the requirements of Section 13 or 15(d) of the Exchange Act, Parent shall or shall cause the Issuer to furnish to all Holders of Rule 144A Securities and prospective purchasers of Rule 144A Securities designated by the Holders of Rule 144A Securities, promptly upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) promulgated under the Securities Act of 1933, as amended.
SECTION 4.04.    Compliance Certificate.
(a) Each of the Issuer and each Guarantor shall deliver to the Trustee, within 120 days after the end of each fiscal year, a statement signed by an Officer of the Issuer or such Guarantor, as the case may be, which need not constitute an Officers’ Certificate, complying with TIA Section 314(a)(4) and stating that in the course of performance by the signing Officer of his or her duties as such Officer of the Issuer or such Guarantor, as the case may be, he or she would normally obtain knowledge of the keeping, observing, performing and fulfilling by the Issuer or such Guarantor, as the case may be, of its obligations under this Indenture, and further stating that to the best of his or her knowledge, the Issuer or such Guarantor, as the case may be, has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which such Officer may have knowledge and what action the Issuer or such Guarantor, as the case may be, is taking or proposes to take with respect thereto).
(b) The Issuer or a Guarantor shall, so long as Securities of any series are outstanding, deliver to the Trustee, forthwith upon any Officer of the Issuer (or the general partner of PSXP, if the Issuer is PSXP) or such Guarantor, as the case may be, becoming aware of any Default or Event of Default under this Indenture, an Officers’ Certificate specifying such Default or Event of Default and what action the Issuer or such Guarantor, as the case may be, is taking or proposes to take with respect thereto.
SECTION 4.05.    Corporate Existence.
Subject to Article V, each of the Issuer and each Guarantor shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence.
SECTION 4.06.    Waiver of Stay, Extension or Usury Laws.
Each of the Issuer and each Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive it from paying all or any portion of the principal of or interest on the Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) each of the Issuer and each Guarantor hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
 
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SECTION 4.07.    Additional Amounts.
If the Securities of a series expressly provide for the payment of Additional Amounts, the Issuer will pay to the Holder of any Security of such series Additional Amounts as expressly provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Security of any series or the net proceeds received from the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section 4.07 to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section 4.07 and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made.
The Issuer shall notify the Trustee in writing of the amounts and payment dates of any Additional Amounts that may become payable. The Trustee shall not at any time be under any duty or responsibility to any Holder of Securities of a series to determine any Additional Amounts, or with respect to the nature, extent or calculation of the Additional Amounts owed, or with respect to the method employed in such calculation of Additional Amounts.
SECTION 4.08.    Limitation on Liens.
Parent shall not, and shall not permit any Principal Domestic Subsidiary to, issue, assume or guarantee any Debt for borrowed money secured by any Lien upon any Principal Property or any shares of stock or Debt of any Principal Domestic Subsidiary (whether such Principal Property, shares of stock or Debt is now owned or hereafter acquired) without making effective provision whereby the Securities (together with, if Parent shall so determine, any other Debt or other obligation of Parent or any Subsidiary) shall be secured equally and ratably with (or, at the option of Parent, prior to) the Debt so secured for so long as such Debt is so secured. The foregoing restrictions will not, however, apply to Debt secured by Permitted Liens.
In addition, Parent and its Principal Domestic Subsidiaries may, without securing the Securities, issue, assume or guarantee Debt that would otherwise be subject to the foregoing restrictions in an aggregate principal amount that, together with all other such Debt of Parent and its Principal Domestic Subsidiaries that would otherwise be subject to the foregoing restrictions (not including Debt permitted to be secured under the definition of Permitted Liens) and the aggregate amount of Attributable Debt deemed outstanding with respect to Sale/Leaseback Transactions (reduced by the amount applied pursuant to Section 4.09(b)), does not at any one time exceed 10% of Consolidated Adjusted Net Assets.
The mortgage or pledge of any property of Parent or any Subsidiary in favor of the United States or any State, or any department, agency, instrumentality or political subdivision of either, to secure partial, progress, advance or other payments pursuant to the provisions of any contract or statute shall not be deemed to create “Debt” secured by “Liens” within the meaning of those terms as used in this Indenture.
SECTION 4.09.    Limitation on Sale/Leaseback Transactions.
Parent shall not, and shall not permit any Principal Domestic Subsidiary to, enter into any Sale/Leaseback Transaction with any Person (other than Parent or a Subsidiary) unless:
(a) Parent or such Principal Domestic Subsidiary would be entitled to incur Debt in a principal amount equal to the Attributable Debt with respect to such Sale/Leaseback Transaction secured by a Lien on the property subject to such Sale/Leaseback Transaction pursuant to Section 4.08 without equally and ratably securing the Securities pursuant to such covenant; or
(b) within a period commencing 12 months prior to the consummation of such Sale/Leaseback Transaction and ending 12 months after the consummation thereof, Parent or any Subsidiary shall have applied an amount equal to all or a portion of the net proceeds of such Sale/Leaseback Transaction (with any such amount not being so applied to be subject to Section 4.09(a)):
(1) to the voluntary defeasance or retirement of any Securities or any Funded Debt; or
 
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(2) to the acquisition, construction, improvement or expansion of one or more Principal Properties.
For these purposes, the net proceeds of a Sale/Leaseback Transaction means an amount equal to the greater of (i) the net proceeds of the sale or transfer of the property leased in such Sale/Leaseback Transaction and (ii) the fair value, as determined by the Board of Directors of Parent and evidenced by a Board Resolution, of such property at the time of entering into such Sale/Leaseback Transaction.
ARTICLE V
SUCCESSORS SECTION
SECTION 5.01.    Limitations on Mergers and Consolidations.
None of Parent, any Exchange Securities Issuer or any Guarantor shall, in any transaction or series of transactions, consolidate with or merge into any Person, or sell, lease, convey, transfer or otherwise dispose of all or substantially all of its assets to any Person (other than a consolidation with or merger into Parent, any Exchange Securities Issuer or any Guarantor or a sale, lease, conveyance, transfer or other disposition of all or substantially all of the assets of the Issuer to Parent or a Guarantor or of a Guarantor to Parent or Exchange Securities Issuer), unless:
(1) either (a) Parent, such Exchange Securities Issuer or such Guarantor, as the case may be, shall be the continuing Person or (b) the Person (if other than Parent, such Exchange Securities Issuer or such Guarantor) formed by such consolidation or into which Parent, such Exchange Securities Issuer or such Guarantor is merged, or to which such sale, lease, conveyance, transfer or other disposition shall be made (such Person, the “Successor”), is organized and validly existing under the laws of the United States, any political subdivision thereof or any State thereof or the District of Columbia, and expressly assumes by supplemental indenture, in the case of Parent, the due and punctual payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Parent Securities and the performance of Parent’s covenants and obligations under this Indenture and the Securities; or, in the case of an Exchange Securities Issuer, the due and punctual payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to all the Exchange Securities and the performance of such Exchange Securities Issuer’s covenants and obligations under this Indenture and the Exchange Securities; or, in the case of any Guarantor, the performance of such Guarantor’s Guarantee and the Guarantor’s covenants and obligations under this Indenture and the Securities;
(2) immediately after giving effect to such transaction or series of transactions, no Default or Event of Default shall have occurred and be continuing or would result therefrom; and
(3) Parent, such Exchange Securities Issuer or such Guarantor, as the case may be, delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that the transaction and such supplemental indenture comply with this Indenture.
SECTION 5.02.    Successor Person Substituted.
Upon any consolidation or merger of Parent, any Exchange Securities Issuer or any Guarantor, as the case may be, or any sale, lease, conveyance, transfer or other disposition of all or substantially all of the assets of Parent, any Exchange Securities Issuer or any Guarantor in accordance with Section 5.01, the Successor formed by such consolidation or into or with which Parent, such Exchange Securities Issuer or such Guarantor is merged or to which such sale, lease, conveyance, transfer or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of Parent, such Exchange Securities Issuer or such Guarantor, as the case may be, under this Indenture and the Securities with the same effect as if such Successor had been named as Parent, such Exchange Securities Issuer or such Guarantor, as the case may be, herein and the predecessor Parent, such Exchange Securities Issuer or such Guarantor, in the case of a sale, conveyance, transfer or other disposition, shall be released from all obligations under this Indenture, the Securities and, in the case of such Guarantor, its Guarantee.
 
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ARTICLE VI
DEFAULTS AND REMEDIES SECTION
SECTION 6.01.    Events of Default.
Unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the supplemental indenture or Board Resolution establishing such series of Securities or in the form of Security for such series, an “Event of Default,” wherever used herein with respect to Securities of any series, occurs if:
(1) there is a default in the payment of interest on or any Additional Amounts with respect to any Security of that series when the same becomes due and payable and such default continues for a period of 30 days;
(2) there is a default in the payment of (A) the principal of any Security of that series at its Maturity or (B) premium (if any) on any Security of that series when the same becomes due and payable;
(3) there is a default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series, and such default continues for a period of 30 days;
(4) Parent, an Exchange Securities Issuer or any Guarantor fails to comply with any of its other covenants or agreements in, or provisions of, the Securities of such series or this Indenture (other than an agreement, covenant or provision that has expressly been included in this Indenture solely for the benefit of one or more series of Securities other than that series) which shall not have been remedied within the specified period after written notice, as specified in the last paragraph of this Section 6.01;
(5) Parent, an Exchange Securities Issuer or any Guarantor pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian of it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that remains unstayed and in effect for 90 days and that:
(A) is for relief against Parent, an Exchange Securities Issuer or any Guarantor as debtor in an involuntary case,
(B) appoints a Bankruptcy Custodian of Parent, an Exchange Securities Issuer or any Guarantor or a Bankruptcy Custodian for all or substantially all of the property of Parent, such Exchange Securities Issuer or such Guarantor, or
(C) orders the liquidation of Parent, an Exchange Securities Issuer or any Guarantor; or
(7) any other Event of Default provided with respect to Securities of that series occurs.
The term “Bankruptcy Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
When a Default is cured, it ceases.
Notwithstanding the foregoing provisions of this Section 6.01, if the principal of, premium (if any) or interest on or Additional Amounts with respect to any Security is payable in a currency or currencies (including a composite currency) other than Dollars and such currency or currencies are not available to the Issuer or a Guarantor for
 
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making payment thereof due to the imposition of exchange controls or other circumstances beyond the control of the Issuer or any Guarantor (a “Conversion Event”), each of the Issuer and any Guarantor will be entitled to satisfy its obligations to Holders of the Securities by making such payment in Dollars in an amount equal to the Dollar equivalent of the amount payable in such other currency, as determined by the Issuer or any Guarantor, as the case may be, by reference to the Exchange Rate on the date of such payment, or, if such rate is not then available, on the basis of the most recently available Exchange Rate. Notwithstanding the foregoing provisions of this Section 6.01, any payment made under such circumstances in Dollars where the required payment is in a currency other than Dollars will not constitute an Event of Default under this Indenture.
Promptly after the occurrence of a Conversion Event, the Issuer or a Guarantor shall give written notice thereof to the Trustee; and the Trustee, promptly after receipt of such notice, shall give notice thereof in the manner provided in Section 12.02 to the Holders. Promptly after the making of any payment in Dollars as a result of a Conversion Event, the Issuer or a Guarantor, as the case may be, shall give notice in the manner provided in Section 12.02 to the Holders, setting forth the applicable Exchange Rate and describing the calculation of such payments.
A Default under clause (4) or (7) of this Section 6.01 is not an Event of Default until the Trustee notifies the Issuer and each Guarantor, or the Holders of at least 25% in principal amount of the then outstanding Securities of the series affected by such Default notify the Issuer, each Guarantor and the Trustee, of the Default, and the Issuer or such Guarantor, as the case may be, fails to cure the Default within 90 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a “Notice of Default.”
SECTION 6.02.    Acceleration.
If an Event of Default with respect to any Securities of any series at the time outstanding (other than an Event of Default specified in clause (5) or (6) of Section 6.01) occurs and is continuing, the Trustee by notice to the Issuer and each Guarantor, or the Holders of at least 25% in principal amount of the then outstanding Securities of the series affected by such Event of Default by notice to the Issuer, each Guarantor and the Trustee, may declare the principal of (or, if any such Securities are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) and all accrued and unpaid interest on all then outstanding Securities of such series, as the case may be, to be due and payable. Upon any such declaration, the amounts due and payable on the Securities shall be due and payable immediately. If an Event of Default specified in clause (5) or (6) of Section 6.01 hereof occurs, such amounts shall ipso facto become and be immediately due and payable without any declaration, notice or other act on the part of the Trustee or any Holder. The Holders of a majority in principal amount of the then outstanding Securities of the series affected by such Event of Default by written notice to the Trustee may rescind an acceleration and its consequences (other than nonpayment of principal of or premium or interest on or any Additional Amounts with respect to the Securities) if the rescission would not conflict with any judgment or decree and if all existing Events of Default with respect to Securities of that series have been cured or waived, except nonpayment of principal, premium, interest or any Additional Amounts that has become due solely because of the acceleration.
SECTION 6.03.    Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of, or premium, if any, or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
SECTION 6.04.    Waiver of Defaults.
Subject to Sections 6.07 and 9.02, the Holders of a majority in principal amount of the then outstanding Securities of any series by notice to the Trustee may waive an existing or past Default or Event of Default with respect to such series and its consequences (including waivers obtained in connection with a tender offer or exchange offer for Securities of such series or a solicitation of consents in respect of Securities of such series,
 
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provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of such series), except (1) a continuing Default or Event of Default in the payment of the principal of, or premium, if any, or interest on or any Additional Amounts with respect to any Security or (2) a continued Default in respect of a provision that under Section 9.02 cannot be amended or supplemented without the consent of each Holder affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05.    Control by Majority.
With respect to Securities of any series, the Holders of a majority in principal amount of the then outstanding Securities of such series may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it relating to or arising under an Event of Default described in clause (1), (2), (3), (4) or (7) of Section 6.01, and with respect to all Securities, the Holders of a majority in principal amount of all the then outstanding Securities affected may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it not relating to or arising under such an Event of Default. However, the Trustee may refuse to follow any direction that conflicts with applicable law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Holders, or that may involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion from Holders directing the Trustee against all losses and expenses caused by taking or not taking such action.
SECTION 6.06.    Limitations on Suits.
Subject to Section 6.07 hereof, a Holder of a Security of any series may pursue a remedy with respect to this Indenture or the Securities of such series only if:
(1) the Holder gives to the Trustee written notice of a continuing Event of Default with respect to such series;
(2) the Holders of at least 25% in principal amount of the then outstanding Securities of such series make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07.    Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal of and premium, if any, and interest on and any Additional Amounts with respect to the Security, on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder.
SECTION 6.08.    Collection Suit by Trustee.
If an Event of Default specified in clause (1) or (2) of Section 6.01 hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer or any
 
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Guarantor for the amount of principal, premium (if any), interest and any Additional Amounts remaining unpaid on the Securities of the series affected by the Event of Default, and interest on overdue principal and premium, if any, and, to the extent lawful, interest on overdue interest, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09.    Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or documents and to take such actions, including participating as a member, voting or otherwise, of any committee of creditors, as may be necessary or advisable to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Issuer or any Guarantor or their respective creditors or properties and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any Bankruptcy Custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties which the Holders of the Securities may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10.    Priorities.
If the Trustee collects any money pursuant to this Article VI, it shall pay out the money in the following order:
First : to the Trustee for amounts due under Section 7.07;
Second : to Holders for amounts due and unpaid on the Securities in respect of which or for the benefit of which such money has been collected, for principal, premium (if any), interest and any Additional Amounts ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium (if any), interest and any Additional Amounts, respectively; and
Third : to the Issuer.
The Trustee, upon prior written notice to the Issuer, may fix record dates and payment dates for any payment to Holders pursuant to this Article VI.
To the fullest extent allowed under applicable law, if for the purpose of obtaining a judgment against the Issuer or any Guarantor in any court it is necessary to convert the sum due in respect of the principal of, premium (if any) or interest on or Additional Amounts with respect to the Securities of any series (the “Required Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the Business Day in The City of New York next preceding that on which final judgment is given. None of the Issuer, any Guarantor or the Trustee shall be liable for any shortfall nor shall any of them benefit from any windfall in payments to Holders of Securities under this Section 6.10 caused by a change in exchange rates between the time the amount of a judgment against it is calculated as above and the time the Trustee converts the Judgment Currency into the Required Currency to make payments under this Section 6.10 to Holders of Securities, but payment of such judgment shall discharge all amounts owed by the Issuer and each Guarantor on the claim or claims underlying such judgment.
 
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SECTION 6.11.    Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in principal amount of the then outstanding Securities of any series.
ARTICLE VII
TRUSTEE SECTION
SECTION 7.01.    Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in such exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
(b) Except during the continuance of an Event of Default with respect to the Securities of any series:
(1) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such certificates and opinions to determine whether, on their face, they appear to conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(1) this paragraph does not limit the effect of Section 7.01(b);
(2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to the provisions of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity or security satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer and each Guarantor. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. Subject to Section 6.10, all money received by the Trustee shall, until applied as herein provided, be held in trust for the payment of the principal of, premium (if any) and interest on and Additional Amounts with respect to the Securities.
 
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SECTION 7.02.    Rights of Trustee.
(a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer and the Guarantors, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it may require instruction, an Officers’ Certificate or an Opinion of Counsel or both to be provided. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such instruction, Officers’ Certificate or Opinion of Counsel. The Trustee may consult at the Issuer’s expense with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer or any Guarantor shall be sufficient if signed by an Officer of the Issuer or such Guarantor, as the case may be.
(f) The Trustee shall not be obligated to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document.
(g) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
(h) The Trustee may request that the Issuer deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.
(i) The Trustee shall not be deemed to know or have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default or Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture.
(j) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(k) In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
 
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(l) The permissive rights of the Trustee to take certain actions under this Indenture shall not be construed as a duty unless so specified herein.
(m) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.
SECTION 7.03.    May Hold Securities.
The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Issuer, each Guarantor or any of their respective Affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights and duties. However, the Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04.    Trustee’s Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Issuer’s use of the proceeds from the Securities or any money paid to the Issuer or any Guarantor or upon the Issuer’s or any Guarantor’s direction under any provision hereof, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee and it shall not be responsible for any statement or recital herein or any statement in the Securities other than its certificate of authentication.
SECTION 7.05.    Notice of Defaults.
If a Default or Event of Default with respect to the Securities of any series occurs and is continuing and it is known to the Trustee as provided in Section 7.02(i) hereof, the Trustee shall mail to Holders of Securities of such series a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium (if any) and interest on and Additional Amounts or any sinking fund installment with respect to the Securities of such series, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Holders of Securities of such series.
SECTION 7.06.    Reports by Trustee to Holders.
Within 60 days after each September 15 of each year after the execution of this Indenture, the Trustee shall mail to Holders of a series, the Issuer and each Guarantor a brief report dated as of such reporting date that complies with TIA Section 313(a); provided, however, that if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date with respect to a series, no report need be transmitted to Holders of such series. The Trustee also shall comply with TIA Section 313(b). The Trustee shall also transmit by mail all reports if and as required by TIA Sections 313(c) and 313(d).
A copy of each report at the time of its mailing to Holders of a series of Securities shall be filed by the Issuer or the applicable Guarantor with the SEC and each securities exchange, if any, on which the Securities of such series are listed. The Issuer shall notify the Trustee if and when any series of Securities is listed on any securities exchange.
SECTION 7.07.    Compensation and Indemnity.
The Issuer agrees to pay to the Trustee for its acceptance of this Indenture and services hereunder such compensation as the Issuer and the Trustee shall from time to time agree in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer agrees to reimburse the Trustee upon request for all reasonable disbursements, advances and expenses incurred by it. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.
Parent and P66 Company, jointly and severally, hereby indemnify, defend, and protect the Trustee and any predecessor Trustee, and hold the Trustee and any predecessor Trustee harmless against, any and all loss, liability, damage, claim or reasonable expense, including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) and attorneys’ fees, incurred by it arising out of or in connection with the acceptance or
 
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administration of its duties under this Indenture, except as set forth in the next following paragraph. The Trustee shall notify Parent and P66 Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify Parent and P66 Company will not relieve Parent and P66 Company of their obligations hereunder. Parent shall defend the claim and the Trustee shall reasonably cooperate in the defense. The Trustee may have separate counsel and Parent shall pay the reasonable fees and expenses of such counsel. Parent need not pay for any settlement made without its consent, which consent will not be unreasonably withheld.
The Issuer shall not be obligated to reimburse any expense or indemnify against any loss or liability incurred by the Trustee through the Trustee’s negligence or willful misconduct as determined by a final, non-appealable judgment of a court of competent jurisdiction.
To secure the payment obligations of the Issuer in this Section 7.07, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal of, premium (if any) and interest on and any Additional Amounts with respect to Securities of any series. Such lien and the Issuer’s obligations under this Section 7.07 shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(5) or (6) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 7.08.    Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.
The Trustee may resign and be discharged at any time with respect to the Securities of one or more series by so notifying the Issuer and each Guarantor. The Holders of a majority in principal amount of the then outstanding Securities of any series may remove the Trustee with respect to the Securities of such series upon 30 days written notice by so notifying the Trustee, the Issuer and each Guarantor. The Issuer may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a Bankruptcy Custodian or public officer takes charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, with respect to the Securities of one or more series, the Issuer shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series). Within one year after the successor Trustee with respect to the Securities of any series takes office, the Holders of a majority in principal amount of the Securities of such series then outstanding may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.
If a successor Trustee with respect to the Securities of any series does not take office within 30 days after the retiring or removed Trustee resigns or is removed, the retiring or removed Trustee (at the expense of the Issuer), the Issuer, any Guarantor or the Holders of at least 10% in principal amount of the then outstanding Securities of such series may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
If the Trustee with respect to the Securities of a series fails to comply with Section 7.10, any Holder of Securities of such series may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee with respect to the Securities of such series.
 
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In case of the appointment of a successor Trustee with respect to all Securities, each such successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee, to the Issuer and to each Guarantor. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the retiring Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07.
In case of the appointment of a successor Trustee with respect to the Securities of one or more (but not all) series, the Issuer, each Guarantor, the retiring Trustee and each successor Trustee with respect to the Securities of one or more (but not all) series shall execute and deliver an indenture supplemental hereto in which each successor Trustee shall accept such appointment and that (1) shall confer to each successor Trustee all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall confirm that all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee. Nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, and each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee. Upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee shall have all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. On request of the Issuer or any successor Trustee, such retiring Trustee shall transfer to such successor Trustee all property held by such retiring Trustee as Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. Such retiring Trustee shall, however, have the right to deduct its unpaid fees and expenses, including attorneys’ fees.
Notwithstanding replacement of the Trustee or Trustees pursuant to this Section 7.08, the obligations of the Issuer under Section 7.07 shall continue for the benefit of the retiring Trustee or Trustees.
SECTION 7.09.    Successor Trustee by Merger, etc.
Subject to Section 7.10, if the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee; provided, however that such successor Trustee shall be otherwise qualified and eligible under this Article VII.
In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10.    Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which shall be a corporation or banking association organized and doing business under the laws of the United States, any State thereof or the District of Columbia and authorized under such laws to exercise corporate trust power, shall be subject to supervision or examination by Federal or State (or the District of Columbia) authority and shall have, or be a subsidiary of a bank or bank holding company having, a combined capital and surplus of at least $50 million as set forth in its most recent published annual report of condition.
The Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is subject to and shall comply with the provisions of TIA Section 310(b) during the period of time required by this Indenture. Nothing in this Indenture shall prevent the Trustee from filing with the SEC the application referred to in the penultimate paragraph of TIA Section 310(b).
 
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SECTION 7.11.    Preferential Collection of Claims Against the Issuer or any Guarantor.
The Trustee is subject to and shall comply with the provisions of TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01.    Termination of the Issuer’s and each Guarantor’s Obligations.
(a) This Indenture shall cease to be of further effect with respect to the Securities of a series (except that the Issuer’s obligations under Section 7.07, the Trustee’s and Paying Agent’s obligations under Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive), and the Trustee and each Guarantor, on demand of the Issuer, shall execute proper instruments acknowledging the satisfaction and discharge of this Indenture with respect to the Securities of such series, when:
(1) either:
(A) all outstanding Securities of such series theretofore authenticated and issued (other than destroyed, lost or stolen Securities that have been replaced or paid) have been delivered to the Trustee for cancellation; or
(B) all outstanding Securities of such series not theretofore delivered to the Trustee for cancellation:
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer,
and, in the case of clause (i), (ii) or (iii) above, the Issuer or a Guarantor has irrevocably deposited or caused to be deposited with the Trustee as funds (immediately available to the Holders in the case of clause (i)) in trust for such purpose (x) cash in an amount, or (y) Government Obligations, maturing as to principal and interest at such times and in such amounts as will ensure the availability of cash in an amount or (z) a combination thereof, which will be sufficient without consideration of any investment of interest, in the opinion (in the case of clauses (y) and (z)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the entire indebtedness on the Securities of such series for principal and interest to the date of such deposit (in the case of Securities which have become due and payable) or for principal, premium, if any, and interest to the Stated Maturity or Redemption Date, as the case may be; or
(C) the Issuer and each Guarantor have properly fulfilled such other means of satisfaction and discharge as is specified, as contemplated by Section 2.01, to be applicable to the Securities of such series;
(2) the Issuer or a Guarantor has paid or caused to be paid all other sums payable by them hereunder with respect to the Securities of such series; and
(3) the Issuer has delivered to the Trustee an Officers’ Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect.
 
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(b) Unless this Section 8.01(b) is specified as not being applicable to Securities of a series as contemplated by Section 2.01, the Issuer may, at its option, terminate certain of its and each Guarantor’s respective obligations under this Indenture (“covenant defeasance”) with respect to the Securities of a series if:
(1) the Issuer or a Guarantor has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders of Securities of such series, (i) money in the currency in which payment of the Securities of such series is to be made in an amount, or (ii) Government Obligations with respect to such series, maturing as to principal and interest at such times and in such amounts as will ensure the availability of money in the currency in which payment of the Securities of such series is to be made in an amount or (iii) a combination thereof, that is sufficient without consideration of any investment of interest, in the opinion (in the case of clauses (ii) and (iii)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay the principal of and premium (if any) and interest on all Securities of such series on each date that such principal, premium (if any) or interest is due and payable and (at the Stated Maturity thereof or upon redemption as provided in Section 8.01(e)) to pay all other sums payable by it hereunder; provided that the Trustee shall have been irrevocably instructed to apply such money and/or the proceeds of such Government Obligations to the payment of said principal, premium (if any) and interest with respect to the Securities of such series as the same shall become due;
(2) the Issuer has delivered to the Trustee an Officers’ Certificate stating that all conditions precedent to such covenant defeasance with respect to the Securities of such series have been complied with, and an Opinion of Counsel to the same effect;
(3) no Default or Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit;
(4) the Issuer shall have delivered to the Trustee an Opinion of Counsel from a nationally recognized counsel acceptable to the Trustee or a tax ruling to the effect that the Holders will not recognize income, gain or loss for U.S. Federal income tax purposes as a result of the Issuer’s exercise of its option under this Section 8.01(b) and will be subject to U.S. Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised;
(5) the Issuer and each Guarantor have complied with any additional conditions specified pursuant to Section 2.01 to be applicable to the discharge of Securities of such series pursuant to this Section 8.01; and
(6) such deposit and discharge shall not cause the Trustee to have a conflicting interest as defined in TIA Section 310(b).
In such event, this Indenture shall cease to be of further effect (except as set forth in this paragraph), and the Trustee and each Guarantor, on demand of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge under this Indenture. However, the Issuer’s and each Guarantor’s respective obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 7.07, 7.08, 8.04 and 10.01, the Trustee’s and Paying Agent’s obligations in Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive until all Securities of such series are no longer outstanding. Thereafter, only the Issuer’s obligations in Section 7.07 and the Trustee’s and Paying Agent’s obligations in Section 8.03 shall survive with respect to Securities of such series.
After such irrevocable deposit made pursuant to this Section 8.01(b) and satisfaction of the other conditions set forth herein, the Trustee upon request shall acknowledge in writing the discharge of the Issuer’s and each Guarantor’s obligations under this Indenture with respect to the Securities of such series except for those surviving obligations specified above.
In order to have money available on a payment date to pay principal of or premium (if any) or interest on the Securities, the Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. Government Obligations shall not be callable at the issuer’s option.
 
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(c) If the Issuer and each Guarantor have previously complied or are concurrently complying with Section 8.01(b) (other than any additional conditions specified pursuant to Section 2.01 that are expressly applicable only to covenant defeasance) with respect to Securities of a series, then, unless this Section 8.01(c) is specified as not being applicable to Securities of such series as contemplated by Section 2.01, the Issuer may elect that its and each Guarantor’s respective obligations to make payments with respect to Securities of such series be discharged (“legal defeasance”), if:
(1) no Default or Event of Default under clauses (5) and (6) of Section 6.01 hereof shall have occurred at any time during the period ending on the 91st day after the date of deposit contemplated by Section 8.01(b) (it being understood that this condition shall not be deemed satisfied until the expiration of such period);
(2) unless otherwise specified with respect to Securities of such series as contemplated by Section 2.01, the Issuer has delivered to the Trustee an Opinion of Counsel from a nationally recognized counsel acceptable to the Trustee to the effect referred to in Section 8.01(b)(4) with respect to such legal defeasance, which opinion is based on (i) a private ruling of the Internal Revenue Service addressed to the Issuer, (ii) a published ruling of the Internal Revenue Service pertaining to a comparable form of transaction or (iii) a change in the applicable federal income tax law (including regulations) after the date of this Indenture;
(3) the Issuer and each Guarantor have complied with any other conditions specified pursuant to Section 2.01 to be applicable to the legal defeasance of Securities of such series pursuant to this Section 8.01(c); and
(4) the Issuer has delivered to the Trustee an Issuer Request requesting such legal defeasance of the Securities of such series and an Officers’ Certificate stating that all conditions precedent with respect to such legal defeasance of the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect.
In such event, the Issuer and each Guarantor will be discharged from their respective obligations under this Indenture and the Securities of such series to pay principal of, premium (if any) and interest on, and any Additional Amounts with respect to, Securities of such series, the Issuer’s and each Guarantor’s respective obligations under Sections 4.01, 4.02 and 10.01 shall terminate with respect to such Securities, and the entire indebtedness of the Issuer evidenced by such Securities and of each Guarantor evidenced by the related Guarantees shall be deemed paid and discharged.
(d) If and to the extent additional or alternative means of satisfaction, discharge or defeasance of Securities of a series are specified to be applicable to such series as contemplated by Section 2.01, each of the Issuer and each Guarantor may terminate any or all of its obligations under this Indenture with respect to Securities of a series and any or all of its obligations under the Securities of such series if it fulfills such other means of satisfaction and discharge as may be so specified, as contemplated by Section 2.01, to be applicable to the Securities of such series.
(e) If Securities of any series subject to subsections (a), (b), (c) or (d) of this Section 8.01 are to be redeemed prior to their Stated Maturity, whether pursuant to any optional redemption provisions or in accordance with any mandatory or optional sinking fund provisions, the terms of the applicable trust arrangement shall provide for such redemption, and the Issuer shall make such arrangements as are reasonably satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer.
SECTION 8.02.    Application of Trust Money; Other Miscellaneous Provisions.
The Trustee or a trustee satisfactory to the Trustee and the Issuer shall hold in trust money or Government Obligations deposited with it pursuant to Section 8.01 hereof. It shall apply the deposited money and the money from Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series with respect to which the deposit was made.
The Issuer and each Guarantor shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against Government Obligations deposited with it pursuant to Section 8.01 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Securities.
 
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SECTION 8.03.    Repayment to Issuer or Guarantor.
The Trustee and the Paying Agent shall promptly pay to the Issuer or any Guarantor any excess money or Government Obligations (or proceeds therefrom) held by them at any time upon the written request of the Issuer.
Subject to the requirements of any applicable abandoned property laws, the Trustee and the Paying Agent shall pay to the Issuer upon written request any money held by them for the payment of principal, premium (if any), interest or any Additional Amounts that remain unclaimed for two years after the date upon which such payment shall have become due. After payment to the Issuer, Holders entitled to the money must look to the Issuer for payment as general creditors unless an applicable abandoned property law designates another Person, and all liability of the Trustee and the Paying Agent with respect to such money shall cease.
SECTION 8.04.    Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money or Government Obligations deposited with respect to Securities of any series in accordance with Section 8.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Issuer and each Guarantor under this Indenture with respect to the Securities of such series and under the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or the Paying Agent is permitted to apply all such money or Government Obligations in accordance with Section 8.01; provided, however, that if the Issuer or any Guarantor has made any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Securities because of the reinstatement of its obligations, the Issuer or such Guarantor, as the case may be, shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or Government Obligations held by the Trustee or the Paying Agent.
ARTICLE IX
SUPPLEMENTAL INDENTURES AND AMENDMENTS
SECTION 9.01.    Without Consent of Holders.
The Issuer, any Guarantor and the Trustee may amend or supplement this Indenture or the Securities or waive any provision hereof or thereof without the consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in place of certificated Securities, or to provide for the issuance of bearer Securities (with or without coupons);
(4) to provide any security for, or to add any guarantees of or additional obligors on, any series of Securities or the related Guarantees;
(5) to comply with any requirement in order to effect or maintain the qualification of this Indenture under the TIA;
(6) to add to the covenants of Parent, any Exchange Securities Issuer or any Guarantor for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series), or to surrender any right or power herein conferred upon Parent, any Exchange Securities Issuer or any Guarantor;
(7) to add any additional Events of Default with respect to all or any series of the Securities (and, if any Event of Default is applicable to less than all series of Securities, specifying the series to which such Event of Default is applicable);
 
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(8) to change or eliminate any of the provisions of this Indenture; provided that any such change or elimination shall become effective only when there is no outstanding Security of any series created prior to the execution of such amendment or supplemental indenture that is adversely affected in any material respect by such change in or elimination of such provision;
(9) to establish the form or terms of Securities of any series as permitted by Section 2.01;
(10) to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Section 8.01; provided, however, that any such action shall not adversely affect the interest of the Holders of Securities of such series or any other series of Securities in any material respect;
(11) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 7.08; or
(12) to evidence and provide for the exchange of Existing Securities and the issuance and terms of Exchange Securities in accordance with Article XI.
Upon the request of the Issuer, accompanied by a Board Resolution, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall, subject to Section 9.06, join with Parent, the Issuer and each Guarantor in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and make any further appropriate agreements and stipulations that may be therein contained.
SECTION 9.02.    With Consent of Holders.
Except as provided below in this Section 9.02, the Issuer, any Guarantor and the Trustee may amend or supplement this Indenture with the written consent (including consents obtained in connection with a tender offer or exchange offer for Securities of any one or more series or all series or a solicitation of consents in respect of Securities of any one or more series or all series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of each such series (but the terms of such offer or solicitation may vary from series to series)) of the Holders of at least a majority in principal amount of the then outstanding Securities of all series affected by such amendment or supplement (acting as one class).
Upon the request of the Issuer, accompanied by a Board Resolution, and upon the filing with the Trustee of evidence of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall, subject to Section 9.06, join with the Issuer and each Guarantor in the execution of such amendment or supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.
The Holders of a majority in principal amount of the then outstanding Securities of one or more series or of all series may waive compliance in a particular instance by Parent, any Exchange Securities Issuer or any Guarantor with any provision of this Indenture with respect to Securities of such series (including waivers obtained in connection with a tender offer or exchange offer for Securities of such series or a solicitation of consents in respect of Securities of such series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of such series (but the terms of such offer or solicitation may vary from series to series)).
However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not:
(1) reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest, including default interest, on any Security;
 
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(3) reduce the principal of, any premium on or any mandatory sinking fund payment with respect to, or change the Stated Maturity of, any Security or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.02;
(4) reduce the premium, if any, payable upon the redemption of any Security or change the time at which any Security may or shall be redeemed;
(5) change any obligation of the Issuer or a Guarantor to pay Additional Amounts with respect to any Security;
(6) change the coin or currency or currencies (including composite currencies) in which any Security or any premium, interest or Additional Amounts with respect thereto are payable;
(7) impair the right to institute suit for the enforcement of any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Security pursuant to Sections 6.07 and 6.08, except as limited by Section 6.06;
(8) make any change in the percentage of principal amount of Securities necessary to waive compliance with certain provisions of this Indenture pursuant to Section 6.04 or 6.07 or make any change in this sentence of Section 9.02; or
(9) waive a continuing Default or Event of Default in the payment of principal of, premium (if any) or interest on or Additional Amounts with respect to the Securities.
A supplemental indenture that changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.
The right of any Holder to participate in any consent required or sought pursuant to any provision of this Indenture (and the obligation of the Issuer or any Guarantor to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date identified by the Issuer or any Guarantor in a notice furnished to Holders in accordance with the terms of this Indenture.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall mail to the Holders of each Security affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver.
SECTION 9.03.    Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Securities shall comply in form and substance with the TIA as then in effect.
SECTION 9.04.    Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his or her Security or portion of a Security if the Trustee receives written notice of revocation before a date and time therefor identified by the Issuer or any Guarantor in a notice furnished to such Holder in accordance with the terms of this Indenture or, if no such date and time shall be identified, the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
The Issuer or any Guarantor may, but shall not be obligated to, fix a record date (which need not comply with TIA Section 316(c)) for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver or to take any other action under this Indenture. If a record date is fixed, then notwithstanding the
 
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provisions of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from Holders of the principal amount of Securities required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it is of the type described in any of clauses (1) through (9) of Section 9.02 hereof. In such case, the amendment, supplement or waiver shall bind each Holder who has consented to it and every subsequent Holder that evidences the same debt as the consenting Holder’s Security.
SECTION 9.05.    Notation on or Exchange of Securities.
If an amendment or supplement changes the terms of an outstanding Security, the Issuer may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security at the request of the Issuer regarding the changed terms and return it to the Holder. Alternatively, if the Issuer so determines, the Issuer in exchange for the Security shall issue, each Guarantor shall execute and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment or supplement.
Securities of any series authenticated and delivered after the execution of any amendment or supplement may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such amendment or supplement.
SECTION 9.06.    Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplement authorized pursuant to this Article if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment or supplement, the Trustee shall be entitled to receive, and, subject to Section 7.01 hereof, shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel provided at the expense of the Issuer or any Guarantor as conclusive evidence that such amendment or supplement is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Issuer and such Guarantor in accordance with its terms.
ARTICLE X
GUARANTEE
SECTION 10.01.    Guarantees.
Each Guarantor hereby unconditionally guarantees to the Holders from time to time of the Securities (a) the full and prompt payment of the principal of and any premium on any Security when and as the same shall become due, whether at the Stated Maturity thereof, by acceleration, redemption or otherwise, and (b) the full and prompt payment of any interest on and any Additional Amounts with respect to any Security when and as the same shall become due, subject in each case to any applicable grace period. Each payment by such Guarantor with respect to any Security shall be paid in the currency or currencies specified for payments on such Security as contemplated by Section 2.01 and pursuant to this Indenture. Each Guarantee hereunder constitutes a guarantee of payment and not of collection.
The obligations of each Guarantor hereunder with respect to a series of Securities shall be absolute and unconditional and, subject to Article VIII, shall remain in full force and effect until the entire principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of such series shall have been paid or provided for in accordance with the provisions of such series and of this Indenture, irrespective of the validity, regularity or enforceability of any Security of such series or this Indenture, any change or amendment thereto, the absence of any action to enforce the same, any waiver or consent by the Trustee or the Holder of any Security of such series with respect to any provision of such Security or this Indenture, the recovery of any judgment against the Issuer or any action to enforce the same, or any other circumstances that may otherwise constitute a legal
 
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or equitable discharge or defense of such Guarantor. Each Guarantor hereby waives presentment or demand of payment or notice to such Guarantor with respect to such Security and the obligations evidenced thereby or hereby. Each Guarantor further waives any right of set-off or counterclaim it may have against any Holder of a Security arising from any other obligations any such Holder may have to the Issuer or such Guarantor.
It is the intention of each Guarantor that such Guarantee not constitute a fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to the Guarantee. To effectuate the foregoing intention, the obligations of each Guarantor hereunder shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor (other than guarantees of such Guarantor in respect of subordinated debt) that are relevant under such laws, result in the obligations of such Guarantor hereunder not constituting a fraudulent transfer or conveyance.
SECTION 10.02.    Proceedings Against Guarantors.
In the event of a default in the payment of principal of or any premium on any Security when and as the same shall become due, whether at the Stated Maturity thereof, by acceleration, call for redemption or otherwise, or in the event of a default in any sinking fund payment, or in the event of a default in the payment of any interest on or any Additional Amounts with respect to any Security when and as the same shall become due, each of the Trustee and the Holder of such Security shall have the right to proceed first and directly against each Guarantor under this Indenture without first proceeding against the Issuer or exhausting any other remedies which the Trustee or such Holder may have and without resorting to any other security held by it.
The Trustee shall have the right, power and authority to do all things it deems necessary or advisable to enforce the provisions of this Indenture relating to each Guarantee and to protect the interests of the Holders of the Securities and, in the event of a default in payment of the principal of or any premium on any Security when and as the same shall become due, whether at the Stated Maturity thereof, by acceleration, call for redemption or otherwise, or in the event of a default in the payment of any interest on or any Additional Amounts with respect to any Security when and as the same shall become due, the Trustee may institute or appear in such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of its rights and the rights of the Holders, whether for the specific enforcement of any covenant or agreement in this Indenture relating to each Guarantee or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. Without limiting the generality of the foregoing, in the event of a default in payment of the principal of, premium (if any) and interest on or any Additional Amounts with respect to any Security when due, the Trustee may institute a judicial proceeding for the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against each Guarantor and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of each Guarantor, wherever situated.
SECTION 10.03.    Subrogation.
Each Guarantor shall be subrogated to all rights against the Issuer of any Holder of Securities of a series in respect of any amounts paid by such Guarantor pursuant to the provisions of such Guarantee; provided, however, that such Guarantor shall be entitled to enforce, or to receive any payments arising out of or based upon, such right of subrogation only after the principal of, premium (if any) and interest on and any Additional Amounts with respect to all Securities of such series have been paid in full.
SECTION 10.04.    Guarantee for Benefit of Holders.
Each Guarantee contained in this Indenture is entered into by such Guarantor for the benefit of the Holders from time to time of the Securities. Such provisions shall not be deemed to create any right in, or to be in whole or in part for the benefit of, any Person other than the Trustee, such Guarantor, the Holders from time to time of the Securities and their permitted successors and assigns.
 
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ARTICLE XI
EXCHANGE SECURITIES
SECTION 11.01.    Issuance of Exchange Securities.
Subject to the conditions set forth in this Article XI, Parent may cause one or more Eligible Exchange Securities Issuers to issue Exchange Securities in respect of all or a portion of the outstanding Securities of a series (the “Existing Securities”), in one transaction or a series of successive transactions, without the consent of the Holders of the Existing Securities. If Parent elects to exchange Existing Securities pursuant to this Indenture, it shall notify the Trustee of the Exchange Date, the principal amount of Existing Securities to be exchanged, and, in the event of a partial exchange, the applicable exchange rate ( e.g. , 1:1). Parent shall so notify the Trustee at least five Business Days before the Exchange Date (unless a shorter notice shall be satisfactory to the Trustee) by delivering to the Trustee an Officers’ Certificate and Opinion of Counsel stating that such exchange will comply with the provisions of this Indenture and of the Existing Securities. Any such notice to the Trustee may be canceled at any time prior to the mailing of the applicable notice of such exchange to any Holder pursuant to Section 11.04 and shall thereupon be void and of no effect.
Notwithstanding the foregoing, neither P66 Company nor PDI shall issue any Exchange Securities unless in a substantially concurrent transaction, PSXP shall issue an identical amount of Exchange Securities in accordance with this Article XI and the Exchange Securities issued by P66 Company and PDI, as applicable, shall have been cancelled. In the event an exchange of Existing Securities pursuant to this Article XI involves the issuance of Exchange Securities by more than one Exchange Securities Issuer in substantially concurrent transactions on the same Exchange Date, the references to “Exchange Securities” and “Exchange Securities Issuer” in Sections 11.03 and 11.04 shall apply only to the ultimate Exchange Securities issued and the ultimate Exchange Securities Issuer in such series of transactions and, for avoidance of doubt, only a single notice period and a single notice of exchange, as well as a single Opinion of Counsel pursuant to Section 11.03(10) and a single Officers’ Certificate pursuant to Section 11.03(11), shall be required in respect of such exchange.
SECTION 11.02.    Selection of Existing Securities to be Exchanged; Denominations.
If fewer than all the Existing Securities are to be exchanged, the particular Existing Securities to be exchanged shall be selected not more than 60 days prior to the Exchange Date by the Trustee (or, in the case of Global Securities, by the Depositary) from the outstanding Existing Securities of such series on a pro rata basis.
The minimum denominations of the Existing Securities to be exchanged will be reduced to $1.00 and any integral multiple of $1.00 in excess thereof. The minimum denominations of each series of Exchange Securities to be issued will be $1.00 and any integral multiple of $1.00 in excess thereof. In connection with any exchange, any fractional amounts of less than $1.00 of Existing Securities selected to be exchanged will be rounded to the nearest $1.00 (with $0.50 being rounded upwards).
The Trustee shall promptly notify Parent and the Registrar in writing of the Existing Securities selected for exchange and, in the case of any Existing Securities selected for partial exchange, the principal amount thereof to be exchanged.
For purposes of this Indenture, unless the context otherwise requires, all provisions relating to exchange of Existing Securities shall relate, in the case of any of the Existing Securities exchanged or to be exchanged only in part, to the portion of the principal amount thereof which has been or is to be exchanged.
SECTION 11.03.    Additional Conditions to Exchange.
In addition to compliance with the other provisions of this Article XI, it shall be a condition to any exchange pursuant to Section 11.01 that:
 
 	(1)	no Default shall have occurred and be continuing on the Exchange Date or will result from the exchange;	
 
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 	(2)	if fewer than all outstanding Existing Securities are to be exchanged, after giving effect to the exchange, no less than $150.0 million in aggregate principal amount of the Existing Securities shall remain outstanding;	
 
 	(3)	no issuance of Exchange Securities pursuant to an exchange shall be in an amount of less than $150.0 million in aggregate principal amount;	
 
 	(4)	each of Parent, P66 Company, the applicable Exchange Securities Issuer and the Trustee shall have executed a supplemental indenture, substantially in the form set forth as Exhibit A hereto, (i) providing for the issuance of the Exchange Securities by the Exchange Securities Issuer and the full and unconditional Guarantee of the Exchange Securities by each of Parent and P66 Company (if not itself the Exchange Securities Issuer) and (ii) establishing the form and the terms of the Exchange Securities, which shall be identical to those of the Existing Securities being exchanged, except for: the date from which interest accrues, the Persons to be the Issuer and the Guarantors, the minimum denominations of the Exchange Securities, the CUSIP numbers and the right of the Exchange Securities Issuer to redeem such Exchange Securities (which shall be limited to a redemption in full and not one or more redemptions in part but otherwise shall be identical to the redemption rights of the Existing Securities);	
 
 	(5)	each of Parent, P66 Company and the applicable Exchange Securities Issuer shall have executed and the Trustee shall have authenticated one or more Securities representing the Exchange Securities and deposited such Securities with the Depositary (or if not in the form of Global Securities, with the Trustee for delivery to the relevant Holders of the Existing Securities selected for exchange);	
 
 	(6)	the applicable Exchange Securities Issuer shall have obtained a CUSIP number, if necessary, in respect of the Exchange Securities;	
 
 	(7)	all accrued and unpaid interest on the Existing Securities to be exchanged, to but excluding the Exchange Date, shall be paid on the Exchange Date and interest shall begin to accrue on the Exchange Securities on the Exchange Date;	
 
 	(8)	on the Exchange Date, Parent shall have delivered or caused to be delivered to the Trustee for cancellation, Existing Securities in an aggregate principal amount equal to the aggregate principal amount of Exchange Securities to be issued on the Exchange Date;	
 
 	(9)	if the Existing Securities are entitled to the benefits of a registration rights agreement and the Exchange Securities Issuer is PSXP, then PSXP shall have entered into a registration rights agreement with substantially identical terms, or a joinder to such existing registration rights agreement, and Parent shall have delivered to the Trustee an Opinion of Counsel to the effect that such registration rights agreement has been duly authorized, executed and delivered by the Exchange Securities Issuer and constitutes a legal, valid and binding obligation of the Exchange Securities Issuer enforceable against the Exchange Securities Issuer in accordance with its terms (subject to customary enforceability exceptions);	
 
 	(10)	Parent shall have delivered to the Trustee an Opinion of Counsel to the effect that (i) the exchange and such supplemental indenture comply with this Indenture, (ii) such supplemental indenture has been duly authorized, executed and delivered by each of Parent, P66 Company and the applicable Exchange Securities Issuer and each of such supplemental indenture and the Indenture as so supplemented constitutes a legal, valid and binding obligation of each of Parent, P66 Company and the applicable Exchange Securities Issuer enforceable against each of Parent, P66 Company and the applicable Exchange Securities Issuer in accordance with its terms (subject to customary enforceability exceptions), (iii) the Exchange Securities have been duly authorized and executed and,when authenticated in accordance with the provisions of such supplemental indenture and the Indenture and delivered in exchange for the Existing Securities, will constitute a legal, valid and binding obligation of the applicable Exchange Securities Issuer entitled to the benefits of the Indenture as supplemented by such supplemental indenture and enforceable against the applicable Exchange Securities Issuer in accordance with their terms (subject to customary enforceability exceptions), and (iv) each Guarantee has been duly authorized and executed and, when the Exchange Securities are authenticated in accordance with the provisions of such supplemental indenture and the Indenture and delivered in exchange for the Existing Securities, will	
 
41

 	constitute a legal, valid and binding obligation of the applicable Guarantor entitled to the benefits of the Indenture as supplemented by such supplemental indenture and enforceable against the applicable Guarantor in accordance with its terms (subject to customary enforceability exceptions); and	
 
 	(11)	Parent or the applicable Exchange Securities Issuer shall have delivered to the Trustee an Officers’ Certificate stating that the exchange and such supplemental indenture comply with this Indenture.	
SECTION 11.04.    Notice of Exchange.
Notice of exchange shall be given by first-class mail, postage prepaid, mailed not less than five Business Days nor more than 60 days prior to the Exchange Date, to each Holder of Existing Securities to be exchanged, at the address of such Holder appearing in the register of Securities maintained by the Registrar.
All notices of exchange shall identify the Existing Securities to be exchanged and shall state:
 
 	(1)	the Exchange Date;	
 
 	(2)	the principal amount of Existing Securities to be exchanged;	
 
 	(3)	the amount of accrued and unpaid interest to be outstanding and payable on the Exchange Date in respect of each $1,000 principal amount of the Existing Securities, if such amount can be determined at the time of such notice;	
 
 	(3)	the identity of the Exchange Securities Issuer and, if more than one exchange is to occur on such Exchange Date in accordance with the second paragraph of Section 11.01, the identity of the Exchange Securities Issuer after giving effect to all such exchanges on such Exchange Date;	
 
 	(4)	that, unless (i) Parent, the applicable Issuer of the Existing Securities and any applicable Guarantor defaults in making the required payment of accrued interest or (ii) Parent, any applicable Guarantor and the applicable Exchange Securities Issuer fail to deliver the Exchange Securities, interest on Existing Securities called for exchange shall cease to accrue on and after the Exchange Date, and the only remaining right of the Holders of such Existing Securities to be exchanged shall be to receive payment of accrued and unpaid interest on such Existing Securities and an equal principal amount of Exchange Securities upon surrender to the Paying Agent of the Existing Securities exchanged;	
 
 	(5)	a summary of the U.S. Federal income tax consequences of the exchange for Holders of Existing Securities being exchanged;	
 
 	(6)	if any Existing Security is to be exchanged in part, the portion of the principal amount thereof to be exchanged and that on and after the Exchange Date, upon surrender for cancellation of such Existing Security to the Paying Agent, a new Security or Securities in the aggregate principal amount equal to the unexchanged portion thereof will be issued without charge to the Holder;	
 
 	(7)	that Existing Securities called for exchange must be surrendered to the Paying Agent to collect accrued and unpaid interest and receive the Exchange Securities, and the name and address of the Paying Agent; and	
 
 	(8)	the CUSIP number(s), if any, relating to such Existing Securities and the unexchanged portion thereof, and the CUSIP number of the Exchange Securities, along with the statement in Section 2.18.	
At Parent’s request, the Trustee shall give the notice of exchange in Parent’s name and at its expense; provided that Parent shall have delivered to the Trustee, at least five Business Days before the notice of exchange is required to be mailed or caused to be mailed to Holders pursuant to this Section 11.04 (unless a shorter notice shall be satisfactory to the Trustee), an Officers’ Certificate requesting that the Trustee give such notice with the form of such notice included as an exhibit thereto and setting forth the information required to be stated in such notice as provided in the preceding paragraph.
 
42

SECTION 11.05.    Effect of Notice of Exchange.
Once notice of exchange is mailed, Existing Securities called for exchange must be surrendered to the Paying Agent on the Exchange Date to collect accrued and unpaid interest and receive the Exchange Securities. All accrued and unpaid interest on the Existing Securities to be exchanged shall be paid on the Exchange Date and interest shall begin to accrue on the Exchange Securities on the Exchange Date.
SECTION 11.06.    Deposit of Exchange Securities and Accrued Interest.
On or prior to 11:00 a.m., New York City time, on the Exchange Date, the Exchange Securities Issuer and the Guarantors shall deposit the Exchange Securities with the Depositary or the Security Custodian (or if not in the form of Global Securities, with the Trustee for delivery to the relevant Holders of the Existing Securities) and the applicable Issuer of the Existing Securities or a Guarantor of such Existing Securities shall deposit with the Trustee or the Paying Agent (or, if the Issuer or such Guarantor is acting as the Paying Agent, segregate and hold in trust as provided in Section 2.06) an amount of money in same day funds sufficient to pay the accrued and unpaid interest on and any Additional Amounts with respect to, the Existing Securities or portions thereof which are to be exchanged on the Exchange Date.
Unless (i) Parent, the applicable Issuer of the Existing Securities and any applicable Guarantor defaults in making the required payment of accrued interest or (ii) the Exchange Securities Issuer and the Guarantors fail to deliver the Exchange Securities, interest on Existing Securities called for exchange ceases to accrue on and after the Exchange Date, and the only remaining right of the Holders of such Existing Securities to be exchanged is to receive payment of accrued and unpaid interest on such Existing Securities and an equal principal amount of Exchange Securities upon surrender to the Paying Agent of the Existing Securities exchanged.
SECTION 11.07.    Securities Exchanged in Part.
Upon surrender to the Paying Agent of an Existing Security to be exchanged in part, the Issuer of such series of Existing Securities and each Guarantor thereof shall execute and the Trustee shall authenticate and deliver to the Holder of such Existing Security without service charge to such Holder, upon delivery of an Issuer Order and an Officers’ Certificate and Opinion of Counsel pursuant to Sections 12.04 and 12.05, a new Security or Securities identical to the series of Existing Securities being exchanged, but having a new CUSIP number, and of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the unexchanged portion of the principal of the Existing Security so surrendered that is not exchanged.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01.    Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by operation of TIA Section 318(c), the imposed duties shall control.
SECTION 12.02.    Notices.
Any notice or communication by Parent, any Exchange Securities Issuer, any Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telex, facsimile or overnight air courier guaranteeing next day delivery, to the other’s address:
If to Parent, any Exchange Securities Issuer or any Guarantor:
Phillips 66 Houston Operations Center
1075 W. Sam Houston Parkway N. Suite 200
Attn: General Counsel
Houston, TX 77043
Telephone: (281) 293-6600
Facsimile: (918) 977-8055
 
43

If to the Trustee:
Wells Fargo Bank, National Association
MAC T9263-170
750 N. St. Paul Place, Ste. 1750
Dallas, TX 75201
Attn: Corporate, Municipal & Escrow Services
Facsimile: (214) 756-7401
Parent, any Exchange Securities Issuer, any Guarantor or the Trustee by notice to the others may designate additional or different addresses for subsequent notices or communications.
All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class mail, postage prepaid, to the Holder’s address shown on the register kept by the Registrar, or in any case where the Depositary or its nominee is the Holder, any notice or communication will be given by the method specified by the Depositary. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is given in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, except in the case of notice to the Trustee, it is duly given only when received.
If Parent, any Exchange Securities Issuer or any Guarantor gives a notice or communication to Holders, it shall give a copy to the others and to the Trustee and each Agent at the same time.
All notices or communications, including without limitation notices to the Trustee, Parent, the Issuer or the Guarantors by Holders, shall be in writing, except as otherwise set forth herein.
In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice.
In addition to the foregoing, the Trustee agrees to accept and act upon notice, instructions or directions pursuant to this Indenture sent by unsecured e-mail or other similar unsecured electronic methods. If the party elects to give the Trustee e-mail instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.
SECTION 12.03.    Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Securities. Parent, the Issuer, each Guarantor, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).
 
44

SECTION 12.04.    Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuer or any Guarantor to the Trustee to take any action under this Indenture, the Issuer or such Guarantor, as the case may be, shall, if requested by the Trustee, furnish to the Trustee at the expense of the Issuer or such Guarantor, as the case may be:
(1) an Officers’ Certificate (which shall include the statements set forth in Section 12.05) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.
SECTION 12.05.    Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include:
(1) a statement that the Person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
SECTION 12.06.    Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or the Paying Agent may make reasonable rules and set reasonable requirements for its functions.
SECTION 12.07.    Legal Holidays.
Unless otherwise provided with respect to the Securities of any series, if a payment date is a Legal Holiday at a Place of Payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.
SECTION 12.08.    No Recourse Against Others.
A director, officer, employee, stockholder, partner or other owner of the Issuer, any Guarantor or the Trustee, as such, shall not have any liability for any obligations of the Issuer under the Securities, for any obligations of any Guarantor under any Guarantee, or for any obligations of the Issuer, any Guarantor or the Trustee under this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release shall be part of the consideration for the issue of Securities.
SECTION 12.09.    Governing Law; Waiver of Jury Trial.
THIS INDENTURE, THE SECURITIES AND THE GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
EACH OF PARENT AND P66 COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY.
 
45

SECTION 12.10.    No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt agreement of the Issuer, any Guarantor or any Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.11.    Successors.
All agreements of Parent, each Exchange Securities Issuer and each Guarantor in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 12.12.    Severability.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall, to the fullest extent permitted by applicable law, not in any way be affected or impaired thereby.
SECTION 12.13.    Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
SECTION 12.14.    Table of Contents, Headings, etc.
The table of contents, cross-reference table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof.
SECTION 12.15.    U.S.A. Patriot Act.
The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
 
46

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

PHILLIPS 66	
		
By:	 	/s/ John D. Zuklic	
	 	John D. Zuklic	
	 	Vice President and Treasurer	
	
PHILLIPS 66 COMPANY	
		
By:	 	/s/ John D. Zuklic	
	 	John D. Zuklic	
	 	Vice President and Treasurer	
	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee	
		
By:	 	/s/ Gregory S. Clarke	
Name:	 	Gregory S. Clarke	
Title:	 	Vice President	
 
[Signature Page to Indenture]

EXHIBIT A
FORM OF EXCHANGE SECURITIES SUPPLEMENTAL INDENTURE
[NUMBER] SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of [●], among [APPLICABLE EXCHANGE SECURITIES ISSUER], a [JURISDICTION] [ENTITY] (the “Exchange Securities Issuer”), PHILLIPS 66, a Delaware corporation (“Parent”), PHILLIPS 66 COMPANY, a Delaware corporation (“P66 Company”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trustee under the indenture referred to below (the “Trustee”).
W I T N E S S E T H :
WHEREAS, each of Parent and P66 Company has heretofore executed and delivered to the Trustee an Indenture, dated as of [●], 2017 (the “Base Indenture”), providing for the issuance from time to time of Securities in one or more series;
WHEREAS, pursuant to [a [Number] Supplemental Indenture]/[Officer’s Certificate] dated as of [●], 2017, among Parent, P66 Company and the Trustee, (such [Supplemental Indenture]/[Officer’s Certificate], together with the Base Indenture, the “Indenture”), Parent has issued a series of Securities designated as its [[●] Notes due [●]] (the “Existing Securities”);
WHEREAS, Article XI of the Base Indenture permits Parent, upon the satisfaction of the conditions set forth therein to cause the exchange of all or a portion of the outstanding Existing Securities for an equal principal amount of a new series of Exchange Securities issued by an Eligible Exchange Securities Issuer and guaranteed by Parent and P66 Company (if not itself the Exchange Securities Issuer);
WHEREAS, pursuant to Section 9.01 of the Base Indenture, Parent, P66 Company, the Exchange Securities Issuer and the Trustee are authorized to execute and deliver this Supplemental Indenture without the consent of the Holders of the Existing Securities; and
WHEREAS, all acts and requirements necessary to make this Supplemental Indenture a legal, valid and binding obligation of each of Parent, P66 Company and the Exchange Securities Issuer have been done;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Exchange Securities Issuer, Parent, P66 Company and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Existing Securities and the Exchange Securities as follows:
SECTION 1. Capitalized Terms. Capitalized terms used in this Supplemental Indenture (including the recitals hereto) without definition shall have the meanings set forth in the Base Indenture.
SECTION 2. Terms of Exchange Securities. (a) The terms of the Exchange Securities (including the form of note for Exchange Securities) shall be as set forth in Annex A hereto.
(b) [insert any applicable terms of Existing Securities not included in form of note for Exchange Securities].
(c) The Exchange Securities Issuer hereby agrees to be bound by all other applicable provisions of the Base Indenture and to constitute the “Issuer” of the Exchange Securities for all purposes under the Exchange Securities and the Indenture, and the Exchange Securities shall constitute a series of Securities under the Base Indenture.

SECTION 3. Agreement to Guarantee. Each of Parent and P66 Company (if not itself the Exchange Securities Issuer) hereby agrees, jointly and severally with all other Guarantors, if any, to fully and unconditionally guarantee the Exchange Securities Issuer’s obligations under the Exchange Securities and the Indenture on the terms and subject to the conditions set forth in Article X of the Indenture and to be bound by all other applicable provisions of the Exchange Securities and the Indenture.
SECTION 4. No Waiver. Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Supplemental Indenture, the Base Indenture or the Exchange Securities shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein and therein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Supplemental Indenture, the Indenture or the Exchange Securities at law, in equity, by statute or otherwise.
SECTION 5. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Securities heretofore or hereafter authenticated and delivered shall be bound hereby. For the avoidance of doubt, nothing in this Supplemental Indenture shall affect the terms of any Existing Securities that remain outstanding after giving effect to the issuance of the Exchange Securities.
SECTION 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUPPLEMENTAL INDENTURE, THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
EACH OF THE EXCHANGE SECURITIES ISSUER, PARENT, P66 COMPANY AND ANY OTHER GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY.
SECTION 7. Successors. All agreements of the Exchange Securities Issuer, Parent, P66 Company and any other Guarantor in this Supplemental Indenture and the Exchange Securities shall bind its respective successors. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.
SECTION 8. Severability. In case any provision in this Supplemental Indenture or in the Exchange Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall, to the fullest extent permitted by applicable law, not in any way be affected or impaired thereby.
SECTION 9. Counterpart Originals. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
SECTION 10. Effect of Headings. The headings of Sections of this Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof.
SECTION 11. Trustee. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture. The recitals and statements herein are deemed to be those of Parent, P66 Company and the Exchange Securities Issuer and not of the Trustee.

[Remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first written above.

[APPLICABLE EXCHANGE SECURITIES ISSUER], as Issuer,	
			
	 	By	 	 	
	 		 	Name:
Title:	
	
PHILLIPS 66, as Guarantor,	
			
	 	By	 	 	
	 		 	Name:
Title:	
	
PHILLIPS 66 COMPANY, as Guarantor,	
			
	 	By	 	 	
	 		 	Name:
Title:	
	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee,	
			
	 	By	 	 	
	 		 	Name:
Title:	

Annex A
[FORM OF FACE OF SECURITY]
[FOR GLOBAL SECURITIES: UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A NEW YORK CORPORATION (“DTC”), SHALL ACT AS THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE ISSUER AND THE REGISTRAR. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[ FOR RULE 144A GLOBAL NOTE : THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY TO (A) THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.]

[APPLICABLE EXCHANGE SECURITIES ISSUER]
[NOTES DUE [●]]
FULLY AND UNCONDITIONALLY GUARANTEED BY
PHILLIPS 66
PHILLIPS 66 COMPANY

	  	CUSIP No.                                     	
	  	ISIN No.                                     	
No.                                                   	  	$                                     	
[APPLICABLE EXCHANGE SECURITIES ISSUER], a [JURISDICTION] [ENTITY] (the “Issuer,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, promises to pay to [●] or registered assigns, the principal sum of [●] Dollars[, or such greater or lesser amount as indicated on the Schedule of Exchanges of Securities hereto,] on [●], 20[●].
Interest Payment Dates: [●] and [●]
Record Dates: [●] and [●]
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

IN WITNESS WHEREOF, the Issuer has caused this Security to be signed manually or by facsimile by its duly authorized officers.
Dated:

[APPLICABLE EXCHANGE SECURITIES ISSUER], as Exchange Securities Issuer,	
	
By	
                                                                              	
   Name:	
   Title:	
	
By	
                                                                              	
   Name:	
   Title:	
GUARANTEE
Phillips 66, a Delaware corporation, unconditionally guarantees to the holder of this Security, upon the terms and subject to the conditions set forth in the Indenture referenced on the reverse hereof, (a) the full and prompt payment of the principal of and any premium on this Security when and as the same shall become due, whether at the stated maturity thereof, by acceleration, redemption or otherwise, and (b) the full and prompt payment of interest on this Security when and as the same shall become due, subject to any applicable grace period.

PHILLIPS 66, as Guarantor	
	
By	
                                                                              	
   Name:	
   Title:	
Phillips 66 Company, a Delaware corporation, unconditionally guarantees to the holder of this Security, upon the terms and subject to the conditions set forth in the Indenture referenced on the reverse hereof, (a) the full and prompt payment of the principal of and any premium on this Security when and as the same shall become due, whether at the stated maturity thereof, by acceleration, redemption or otherwise, and (b) the full and prompt payment of interest on this Security when and as the same shall become due, subject to any applicable grace period.

PHILLIPS 66 COMPANY, as Guarantor	
	
By	
                                                                              	
   Name:	
   Title:	

Certificate of Authentication:
This is one of the Securities of the series
designated therein referred to in the within-
mentioned Indenture.
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee

By:	 	 	
			
Authorized Signatory	
	
Dated:	

[FORM OF REVERSE OF SECURITY]
APPLICABLE EXCHANGE SECURITIES ISSUER]
[NOTES DUE [●]]
FULLY AND UNCONDITIONALLY GUARANTEED BY
PHILLIPS 66
PHILLIPS 66 COMPANY
This Security is one of a duly authorized issue of [Notes Due [●]] (the “Securities”) of [APPLICABLE EXCHANGE SECURITIES ISSUER], a [JURISDICTION] [ENTITY] (the “Issuer”).
[INSERT REVERSE OF EXISTING SECURITY TO BE EXCHANGED AS REVISED IN ACCORDANCE WITH ARTICLE XI OF THE BASE INDENTURE]

Exhibit 4.2
PHILLIPS 66
Floating Rate Notes due 2019
Floating Rate Notes due 2020
Fully and Unconditionally Guaranteed by
PHILLIPS 66 COMPANY
Two series of Securities are hereby established pursuant to Section 2.01 of the Indenture, dated as of April 21, 2017 (the “Indenture”), among Phillips 66, as issuer (the “Company”), Phillips 66 Company, as guarantor (the “Guarantor”), and Wells Fargo Bank, National Association, as trustee (the “Trustee”), as follows:
1.    Each capitalized term used but not defined herein shall have the meaning assigned to such term in the Indenture.
2.    The title of the Floating Rate Notes due 2019 shall be “Floating Rate Notes due 2019” (the “2019 Notes”) and the title of the Floating Rate Notes due 2020 shall be “Floating Rate Notes due 2020” (the “2020 Notes” and, together with the 2019 Notes, the “Notes”).
3.    The limit upon the aggregate principal amount of the 2019 Notes and the 2020 Notes that may be authenticated and delivered under the Indenture (except for Notes of such series authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes of such series pursuant to Section 2.08, 2.09, 2.12, 2.17, 3.07, 9.05 or 11.07 of the Indenture and except for any Notes of such series which, pursuant to Section 2.04 or 2.17 of the Indenture, are deemed never to have been authenticated and delivered thereunder) is $300,000,000 and $300,000,000, respectively; provided, however, that the authorized aggregate principal amount of the Notes of each series may be increased before or after the issuance of any Notes of such series by a Board Resolution (or action pursuant to a Board Resolution) to such effect; provided further, however, that if any such additional Notes are not fungible for United States federal income tax purposes with Notes previously issued, such additional Notes will have a different CUSIP number than the Notes previously issued.
4.    The Notes of each series shall be issued upon original issuance in whole in the form of one or more Global Securities (the “Global Notes”). The Depository Trust Company and the Trustee are hereby designated as the Depositary and the Security Custodian, respectively, for the Global Notes under the Indenture.
5.    The Notes of each series and the Trustee’s certificate of authentication shall be substantially in the form of Annex A hereto (the “Form of Note”).
6.    The maturity date on which the principal of the 2019 Notes and the 2020 Notes is payable shall be April 15, 2019 and April 15, 2020, respectively.
7.    The Notes will bear interest at a floating rate of interest from April 21, 2017 or from the most recent Interest Payment Date (as defined below) to which interest has

been paid or provided for. The per annum interest rate for the period from April 21, 2017 to but not including the first Interest Payment Date (as defined below) will be equal to LIBOR on April 19, 2017, plus 65 basis points in the case of the 2019 Notes and 75 basis points in the case of the 2020 Notes (each such rate for the applicable series of Notes, the “Initial Interest Rate”). Following the initial Interest Period, the per annum interest rate on the Notes for each subsequent Interest Period shall be equal to LIBOR as determined on the related LIBOR Determination Date, plus 65 basis points in the case of the 2019 Notes and 75 basis points in the case of the 2020 Notes. The interest rate applicable to any day in a given Interest Period shall be either the Initial Interest Rate or the interest rate as reset on the LIBOR Determination Date immediately preceding the first day of such Interest Period.
Set forth below is a summary of certain of the defined terms used for purposes of determining the interest rate payable on the Notes.
“ Business Day ” means any day, other than a Saturday or Sunday, that is not a day on which banking institutions in any of The City of New York, New York, Houston, Texas or a place of payment are authorized or required by law or executive order to close.
“ Interest Period ” means the period from, and including, an Interest Payment Date to, but excluding, the next succeeding Interest Payment Date, except for the initial Interest Period, which shall be the period from, and including, April 21, 2017 to, but excluding, the Interest Payment Date occurring on July 17, 2017 (the next succeeding Business Day after July 15, 2017).
“ LIBOR ” means, with respect to an Interest Period, the rate (expressed as a percentage per annum) for deposits in U.S. dollars for a three-month period beginning on the second London Banking Day after the applicable LIBOR Determination Date that appears on Reuters Page LIBOR 01 as of 11:00 a.m., London time, on such LIBOR Determination Date. If Reuters Page LIBOR 01 does not include such a rate or is unavailable on a LIBOR Determination Date, the Issuer shall request the principal London office of each of four major banks in the London interbank market, as selected by the Issuer, to provide such bank’s offered quotation (expressed as a percentage per annum), as of approximately 11:00 a.m., London time, on such LIBOR Determination Date, to prime banks in the London interbank market for deposits in a Representative Amount of U.S. dollars for a three-month period beginning on the second London Banking Day after such LIBOR Determination Date. If at least two such offered quotations are so provided, the LIBOR rate for the Interest Period shall be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, the Issuer shall request each of three major banks in New York City, as selected by the Issuer, to provide such bank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on such LIBOR Determination Date, for loans in a Representative Amount in U.S. dollars to leading European banks for a three-month period beginning on the second London Banking Day after such LIBOR Determination Date. If at least two such rates are so provided, the LIBOR rate for the Interest Period shall be the arithmetic mean of such rates. If fewer than two such rates are so provided, then the LIBOR rate for the Interest Period shall be the rate in effect with respect to the immediately preceding Interest Period.
 
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“ LIBOR Determination Date ” means, with respect to an Interest Period, the London Banking Day that is two London Banking Days prior to the first day of such Interest Period.
“ London Banking Day ” is any day on which dealings in U.S. dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.
“ Representative Amount ” means a principal amount of not less than $1,000,000 for a single transaction in the relevant market at the relevant time.
“ Reuters Page LIBOR 01 ” means the display so designated on the Reuters 3000 Xtra (or such other page as may replace the LIBOR01 page on that service, or such other service as may be nominated by the ICE Benchmark Administration Limited, or ICE, or its successor, or such other entity assuming the responsibility of ICE or its successor in the event ICE or its successor no longer does so, as the successor service, for the purpose of displaying London interbank offered rates for U.S. dollar deposits).
Interest is payable on the Notes quarterly in arrears on January 15, April 15, July 15 and October 15 of each year (each, an “Interest Payment Date”). The initial Interest Payment Date shall be July 17 , 2017 (the next succeeding Business Day after July 15, 2017). The amount of interest for each day that the Notes are outstanding (the “Daily Interest Amount”) shall be calculated by dividing the interest rate in effect for such day by 360 and multiplying the result by the principal amount of the applicable series of Notes outstanding on such day. The amount of interest to be paid on the Notes for each Interest Period shall be calculated by adding such Daily Interest Amounts for each day in such Interest Period.
If any Interest Payment Date, other than the maturity date of the Notes, falls on a day that is not a Business Day, the Interest Payment Date shall be postponed to the next day that is a Business Day. If the maturity date of the Notes falls on a day that is not a Business Day, the payment of interest and principal shall be made on the next succeeding Business Day, and no interest on such payment shall accrue for the period from and after the maturity date. If any such Interest Payment Date (other than the maturity date) is postponed or brought forward as described above, the amount of interest for the relevant Interest Period shall be adjusted accordingly.
The interest payable on the Notes on any Interest Payment Date, subject to certain exceptions, shall be paid to the person in whose name the Notes are registered at the close of business on the 15th calendar day, whether or not a Business Day, immediately preceding the applicable Interest Payment Date; however, interest payable at maturity shall be paid to the person to whom principal is payable.
All percentages resulting from any of the above calculations shall be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts used in or resulting from such calculations shall be rounded to the nearest cent (with one-half cent being rounded upwards).
 
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Notwithstanding the foregoing, the interest rate on a series of Notes shall in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application.
The Trustee initially will act as the Calculation Agent in respect of the Notes. The Calculation Agent will, upon the written request of any holder of Notes, provide the interest rate then in effect with respect to the Notes. All calculations made by the Calculation Agent in the absence of manifest error will be conclusive for all purposes and binding on the Company, the Guarantor and the Holders of the Notes.
8.    No Additional Amounts with respect to the Notes shall be payable. The date from which interest shall accrue for the Notes of each series shall be April 21, 2017.
9.    The place or places where the principal of, premium (if any) on and interest on the Notes shall be payable shall be the office or agency of the Company maintained for that purpose, initially the office of the Trustee located at Corporate Trust Operations, MAC N9300-070, 600 South Fourth Street, Minneapolis, MN 55479 and any other office or agency maintained by the Company for such purpose. Payments in respect of Global Notes (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Holder of such Notes. In all other cases, at the option of the Company, payment of interest may be made by wire transfer to an account in the continental United States or check mailed to the address of the person entitled thereto as such address shall appear in the register of the Notes maintained by the Registrar.
10.    The Notes of each series are subject to redemption, in whole or in part, beginning on April 23, 2018 and at any time thereafter, at the option of the Company, upon not less than 30 nor more than 60 days’ prior notice as provided in the Indenture, at a redemption price equal to 100% of the principal amount of the Notes of that series to be redeemed. Upon any redemption, the Company shall pay accrued and unpaid interest on the Notes being redeemed to, but not including, the Redemption Date. Any Notes exchanged for Exchange Notes as provided below will no longer be redeemable by the Company, and instead the Exchange Notes (as defined below) will be redeemable by the Exchange Notes Issuer (as defined below). Unless there is a default in payment of the redemption price, on and after the Redemption Date, interest shall cease to accrue on the Notes or portions thereof called for redemption.
11.    Subject to certain conditions set forth in the Indenture, the Company may cause one or more Eligible Exchange Notes Issuers (as defined below) to issue one or more series of Exchange Notes (as defined below) for all or a portion of each series of Notes or the Exchange Notes outstanding, in one transaction or a series of successive transactions, without the consent of the Holders of the Notes or the Exchange Notes. The form and terms of the Exchange Notes shall be identical to those of the Notes being exchanged except for: the date from which interest accrues, the issuer and guarantors of the Exchange Notes, the minimum denomination of the Exchange Notes, any CUSIP number for the Exchange Notes and the right of the Exchange Notes Issuer to redeem such Exchange Notes as further specified in the Indenture. No issuance of Exchange Notes in respect of a series of Notes pursuant to an exchange shall be in an amount less than $150.0 million aggregate principal amount.
 
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Each of the Guarantor, PDI, and Phillips 66 Partners is an Eligible Exchange Notes Issuer. However, any issuance of Exchange Notes by the Guarantor or PDI may only be made as part of a series of transactions pursuant to which Phillips 66 Partners shall issue Exchange Notes immediately following the successive issuances of Exchange Notes by the Guarantor and PDI.
If fewer than all of the Notes of a series are to be exchanged, the Notes to be exchanged shall be selected not more than 60 days prior to the Exchange Date, from the Notes outstanding on a pro rata basis. Notice of an exchange shall be given not less than 5 Business Days nor more than 60 days before the Exchange Date to Holders of the Notes to be exchanged. Notes called for exchange must be surrendered to the Paying Agent on the Exchange Date to collect accrued and unpaid interest on the Notes to be exchanged and to receive the Exchange Notes. For any Holder that holds Notes that are exchanged in part, a new security or securities of the same series of the Notes surrendered for exchange but having a new CUSIP number shall be delivered to the Holder in exchange for the unexchanged portion of the principal of the Notes so surrendered that is not exchanged. In connection with any partial exchange, the Company shall reduce the minimum denomination of the applicable series of Notes to $1.00 with integral multiples of $1.00 in excess thereof, and the minimum denomination of the Exchange Notes also will be $1.00, with integral multiples of $1.00 in excess thereof. If a Holder would receive an amount of less than $1.00 in respect of its existing notes or Exchange Notes, such amounts shall be rounded to the nearest $1.00 (with $0.50 being rounded upwards).
Set forth below is a summary of certain of the defined terms used for purposes of the exchange of a series of Notes.
“ Eligible Exchange Notes Issuer ” means each of the Guarantor, PDI and Phillips 66 Partners.
“ Exchange Date ” means the date established by the Company for an exchange of Notes for Exchange Notes.
“ Exchange Notes ” means a series of notes issued by an Exchange Notes Issuer in exchange for all or a portion of a previously issued series of Notes or Exchange Notes.
“ Exchange Notes Issuer ” means the applicable Eligible Exchange Notes Issuer.
“ Issuer ” means (i) with respect to the Notes, the Company, and (ii) with respect to the Exchange Notes, the applicable Exchange Notes Issuer.
“ PDI ” means Phillips 66 Project Development, Inc., a Delaware corporation and a wholly owned subsidiary of the Guarantor.
“ Phillips 66 Partners ” means Phillips 66 Partners LP, a Delaware limited partnership.
12.    The Company shall have no obligation to redeem, purchase or repay Notes pursuant to any sinking fund or analogous provision or at the option of a Holder thereof.
 
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13.    The initial offering and sale of the Notes shall not be registered under the Securities Act or any state securities laws. The Notes shall be offered in reliance upon Rule 144A and Regulation S promulgated under the Securities Act. The Notes shall be entitled to the benefit of Section 4.03(b) of the Indenture (and accordingly constitute Rule 144A Securities, as defined in the Indenture).
14.    For so long as any of the Notes constitute “restricted securities” within the meaning of Rule 144(a)(3) promulgated under the Securities Act, the Company or the Issuer shall, if the Company or the Issuer is not then subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, furnish to any Holder or beneficial owner of such Notes, or to any prospective purchaser of such Notes designated by such Holder or beneficial owner, in each case upon the written request of such Holder, beneficial owner or prospective purchaser, the information required to be provided pursuant to Rule 144A(d)(4) promulgated under the Securities Act.
15.    Notes of each series initially sold to “qualified institutional buyers” (as defined in Rule 144A) (“QIBs”) in the United States in reliance on Rule 144A under the Securities Act (the “Rule 144A Notes”) shall be issued in the form of one or more permanent Global Securities of such series, without interest coupons, including appropriate legends as set forth herein (the “Rule 144A Global Notes” of such series), deposited with the Trustee, as Security Custodian for the Depositary. Notes of each series initially sold to non-U.S. persons outside the United States in offshore transactions in reliance on Regulation S under the Securities Act (the “Regulation S Notes”) shall be issued in the form of one or more permanent Global Securities of such series, without interest coupons, including appropriate legends as set forth herein (the “Regulation S Global Notes” of such series and together with the Rule 144A Global Notes of such series, the “Global Notes”), deposited with the Trustee, as Security Custodian for the Depositary.
16.    (a) Except as permitted by Section 16(b) or Section 17(c) hereof, each Global Note (and all Notes issued in exchange therefor or in substitution thereof) shall bear the following legend (the “Private Placement Legend”) and shall be subject to the transfer restrictions set forth therein (each defined term in the legend being defined as such for purposes of the legend only):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
 
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LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
(b)    Notwithstanding the foregoing, upon consummation of the Exchange Offer (as defined in the Registration Rights Agreement), the Company shall issue and, at the direction of the Company, the Trustee shall authenticate Registered Notes in exchange for Notes accepted for exchange in the Exchange Offer, which Registered Notes shall not bear the Private Placement Legend, and the Security Custodian shall rescind any restriction on the transfer of such Exchange Notes.
“ Additional Notes ” means any Notes issued under the Indenture in addition to the Original Notes, including any Registered Notes issued in exchange for such Additional Notes, having the same terms in all respects as the Original Notes, or in all respects except with respect to the initial Interest Payment Date and interest paid or payable on or prior to the first Interest Payment Date after the issuance of such Additional Notes and such Additional Notes may have different issuance prices, initial interest accrual dates or initial interest payment dates and may not have the benefit of any registration rights.
“ Initial Additional Notes ” means Additional Notes issued in an offering not registered under the Securities Act and any Notes issued in replacement thereof, but not including any Registered Notes issued in exchange therefor.
“ Initial Notes ” means the Notes issued on April 21, 2017 and any Notes issued in replacement thereof, but not including any Registered Notes issued in exchange therefor.
“ Original Notes ” means the Initial Notes and any Registered Notes issued in exchange therefor.
 
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“ Registered Notes ” means the Notes issued pursuant to the Indenture in exchange for, and up to an aggregate principal amount equal to, the Initial Notes or Initial Additional Notes of such series in compliance with the terms of a Registration Rights Agreement and containing terms substantially identical to the Initial Notes or Initial Additional Notes of such series (except that (i) such Registered Notes will be registered under the Securities Act and will not be subject to transfer restrictions or bear the Private Placement Legend (as defined in Section 16(a)), and (ii) the provisions relating to Additional Interest (as defined in Annex A hereto) will be eliminated).
“ Registration Rights Agreement ” means (i) the Registration Rights Agreement dated April 21, 2017 among the Company, the Guarantor and the Initial Purchasers party thereto with respect to the Initial Notes, and (ii) with respect to any Additional Notes or Exchange Notes, any registration rights agreements or joinder to the Registration Rights Agreement between the Company and the Initial Purchasers party thereto and, if applicable, the Exchange Notes Issuer of such Exchange Notes, relating to rights given by the Company to the purchasers of Additional Notes to register such Additional Notes or exchange them for Notes registered under the Securities Act.
17.    (a) The following provisions shall apply with respect to any proposed transfer of a Rule 144A Note prior to the expiration of the holding period applicable to sales of such Notes under Rule 144 of the Securities Act, and the Security Custodian shall refuse to register any transfer of such Notes not complying with the restrictions set forth in the Private Placement Legend and in this Section 17. In addition to the requirements set forth in Section 2.08 of the Indenture, Rule 144A Notes that are presented or surrendered for registration of transfer or exchange pursuant to Section 2.08 of the Indenture shall be accompanied by the following additional information and documents, as applicable, upon which the Security Custodian may conclusively rely:
(i)    if such Notes are being delivered to the Security Custodian by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect (in substantially the form of Annex B hereto);
(ii)    if such Notes are being transferred (1) to a QIB in accordance with Rule 144A, (2) pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or (3) pursuant to an effective registration statement under the Securities Act, a certification to that effect from such Holder (in substantially the form of Annex B hereto);
(iii)    if such Notes are being transferred pursuant to an exemption from registration in accordance with Rule 903 or Rule 904 of Regulation S, certifications to that effect from such Holder (in substantially the form of Annex B and Annex C hereto) and an Opinion of Counsel to that effect if the Company or the Trustee so requests; or
(iv)    if such Notes are being transferred in reliance on and in compliance with another exemption from the registration requirements of the Securities Act, a certification to that effect from such Holder (in substantially the form of Annex B hereto) and an Opinion of Counsel to that effect if the Company or the Trustee so requests.
 
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(b)    The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depositary, in accordance with Section 2.08 of the Indenture and Section 16 and Section 17 hereof (including the restrictions on transfer set forth therein and herein) and the rules and procedures of the Depositary therefor, which shall include restrictions on transfer comparable to those set forth therein and herein to the extent required by the Securities Act.
(c)    If Notes are issued upon the registration of transfer, exchange or replacement of Notes not bearing the Private Placement Legend, the Notes so issued shall not bear such legend. If Notes are issued upon the registration or transfer, exchange or replacement of Notes bearing the Private Placement Legend, or if a request is made to remove the Private Placement Legend on a Note, the Notes so issued shall bear the Private Placement Legend, or the Private Placement Legend shall not be removed, as the case may be, unless there is delivered to the Company and the Trustee such satisfactory evidence, which may include an Opinion of Counsel of recognized standing licensed to practice law in the State of New York and experienced in matters involving the Securities Act, as may be reasonably required by the Company or the Trustee that neither the Private Placement Legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S, that such Notes are not “restricted securities” within the meaning of Rule 144 or that such Notes were transferred pursuant to an effective registration statement under the Securities Act. Upon provision of such satisfactory evidence, the Trustee, at the direction of the Company, shall authenticate and deliver a Note that does not bear the Private Placement Legend. If a Private Placement Legend is removed from the face of a Note and the Note is subsequently held by an Affiliate of the Company, the Private Placement Legend shall be reinstated.
(d)    Notwithstanding anything herein to the contrary, neither the Trustee nor the Security Custodian shall have any responsibility to receive any letters, opinions or certifications, nor any responsibility to monitor compliance with any transfer restrictions, in connection with any transfer or exchange of any beneficial interest in a Global Security for a beneficial interest in the same Global Security.
18.    In order to comply with applicable tax laws, rules and regulations (inclusive of directives, guidelines and interpretations promulgated by competent authorities) in effect from time to time (“Applicable Tax Law”) to which a foreign financial institution, issuer, trustee, paying agent, holder or other institution is or has agreed to be subject related to the Indenture and the Notes, the Company and the Guarantor agree (i) to provide to the Trustee sufficient information about holders or other applicable parties and/or transactions related to the Indenture and the Notes (including any modification to the terms of such transactions) so that the Trustee can determine whether it has tax-related obligations under Applicable Tax Law, (ii) that the Trustee shall be entitled to make any withholding or deduction from payments under the Indenture to the extent necessary to comply with Applicable Tax Law for which the Trustee shall not have any liability and (iii) to hold harmless the Trustee for any losses it may suffer due to the actions it takes to comply with such Applicable Tax Law. The terms of this section shall survive the termination of the Indenture.
 
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Annex A
[FORM OF FACE OF SECURITY]
[ FOR GLOBAL SECURITIES : UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A NEW YORK CORPORATION (“DTC”), SHALL ACT AS THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE COMPANY AND THE REGISTRAR. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[ FOR RESTRICTED SECURITIES : THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
 
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SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.]
PHILLIPS 66
[FLOATING RATE NOTE DUE 2019]
[FLOATING RATE NOTE DUE 2020]
FULLY AND UNCONDITIONALLY GUARANTEED BY
PHILLIPS 66 COMPANY
CUSIP No.                     
ISIN No.                     

No.                     	  	$                       	
Phillips 66, a Delaware corporation (the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, promises to pay to                      or registered assigns, the principal sum of                      Dollars[, or such greater or lesser amount as indicated on the Schedule of Exchanges of Securities hereto,] 1 on April 15, [2019] [2020].

Interest Payment Dates:	  	January 15, April 15, July 15 and October 15	
		
Record Dates:	  	The close of business on the 15th calendar day, whether or not a Business Day, immediately preceding the applicable Interest Payment Date	
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

1  	To be included only if the Security is a Global Security	
 
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IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officers.
Dated:                     

PHILLIPS 66	
		
By:	 	 	
	 	Name:	
	 	Title:	
		
By:	 	 	
	 	Name:	
	 	Title:	
GUARANTEE
Phillips 66 Company, a Delaware corporation, unconditionally guarantees to the holder of this Security, upon the terms and subject to the conditions set forth in the Indenture referenced on the reverse hereof, (a) the full and prompt payment of the principal of and any premium on this Security when and as the same shall become due, whether at the stated maturity thereof, by acceleration, redemption or otherwise, and (b) the full and prompt payment of interest on this Security when and as the same shall become due, subject to any applicable grace period.

PHILLIPS 66 COMPANY	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
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Certificate of Authentication:
This is one of the Securities of the series
designated therein referred to in the within-
mentioned Indenture.

WELLS FARGO BANK, NATIONAL ASSOCIATION as Trustee	
		
By:	 	 	
	 	Authorized Signatory	
Dated:                     
 
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[FORM OF REVERSE OF SECURITY]
PHILLIPS 66
[FLOATING RATE NOTE DUE 2019]
[FLOATING RATE NOTE DUE 2020]
FULLY AND UNCONDITIONALLY GUARANTEED BY
PHILLIPS 66 COMPANY
This Security is one of a duly authorized issue of [Floating Rate Notes due 2019] [Floating Rate Notes due 2020] (the “Securities”) of Phillips 66, a Delaware corporation (the “Company”).
1.     Interest . The Company promises to pay interest on the principal amount of this Security at a floating rate of interest, reset quarterly, from the date of original issuance or from the most recent Interest Payment Date to which interest has been paid or provided for until maturity [and shall pay the Additional Interest payable pursuant to the Registration Rights Agreement referred to below. References herein to “interest” include any such Additional Interest then owing]. The Company will pay interest quarterly in arrears on January 15, April 15, July 15 and October 15 of each year (each an “Interest Payment Date”), or if any such day is not a Business Day, on the next succeeding Business Day. The per annum interest rate for the period from the issue date to but not including the first Interest Payment Date (as defined below) will be equal to LIBOR on April 19, 2017, plus [65][75] basis points (the “Initial Interest Rate”). Following the initial Interest Period, the per annum interest rate on the Securities for each subsequent Interest Period will be equal to LIBOR as determined on the related LIBOR Determination Date (as defined below), plus [65][75] basis points. The interest rate applicable to any day in a given Interest Period shall be either the Initial Interest Rate or the interest rate as reset on the LIBOR Determination Date immediately preceding the first day of such Interest Period. Interest on the Securities shall accrue from the most recent Interest Payment Date on which interest has been paid or, if no interest has been paid, from April 21, 2017; provided that if there is no existing Default in the payment of interest, and if this Security is authenticated between a record date referred to on the face hereof (each, a “Record Date”) and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further , that the first Interest Payment Date shall be July 17, 2017 (the next succeeding Business Day after July 15, 2017). The Company shall pay interest on overdue principal and premium (if any) from time to time at a rate equal to the interest rate then in effect; it shall pay interest on overdue installments of interest (without regard to any applicable grace periods) from time to time at the same rate to the extent lawful. The amount of interest for each day that the Securities are outstanding (the “Daily Interest Amount”) shall be calculated by dividing the interest rate in effect for such day by 360 and multiplying the result by the principal amount of the Securities outstanding on such day. The amount of interest to be paid on the Securities for each Interest Period shall be calculated by adding such Daily Interest Amounts for each day in such Interest Period.
If any Interest Payment Date, other than the maturity date of the Securities, falls on a day that is not a Business Day, the Interest Payment Date shall be postponed to the next day that is a Business Day. If the maturity date of the Securities falls on a day that is not a Business
 
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Day, the payment of interest and principal shall be made on the next succeeding Business Day, and no interest on such payment shall accrue for the period from and after the maturity date. If any such Interest Payment Date (other than the maturity date) is postponed or brought forward as described above, the amount of interest for the relevant Interest Period shall be adjusted accordingly.
Set forth below is a summary of certain of the defined terms used for purposes of determining the interest rate payable on the Securities.
“ Business Day ” means any day, other than a Saturday or Sunday, that is not a day on which banking institutions in any of The City of New York, New York, Houston, Texas or a place of payment are authorized or required by law or executive order to close.
“ Interest Period ” means the period from, and including, an Interest Payment Date to, but excluding, the next succeeding Interest Payment Date, except for the initial Interest Period, which will be the period from, and including, April 21, 2017 to, but excluding, the Interest Payment Date occurring on July 17, 2017 (the next succeeding Business Day after July 15, 2017).
“ LIBOR ” means, with respect to an Interest Period, the rate (expressed as a percentage per annum) for deposits in U.S. dollars for a three-month period beginning on the second London Banking Day after the applicable LIBOR Determination Date that appears on Reuters Page LIBOR 01 as of 11:00 a.m., London time, on such LIBOR Determination Date. If Reuters Page LIBOR 01 does not include such a rate or is unavailable on a LIBOR Determination Date, the Issuer shall request the principal London office of each of four major banks in the London interbank market, as selected by the Issuer, to provide such bank’s offered quotation (expressed as a percentage per annum), as of approximately 11:00 a.m., London time, on such LIBOR Determination Date, to prime banks in the London interbank market for deposits in a Representative Amount of U.S. dollars for a three-month period beginning on the second London Banking Day after such LIBOR Determination Date. If at least two such offered quotations are so provided, the LIBOR rate for the Interest Period shall be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, the Issuer shall request each of three major banks in New York City, as selected by the Issuer, to provide such bank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on such LIBOR Determination Date, for loans in a Representative Amount in U.S. dollars to leading European banks for a three-month period beginning on the second London Banking Day after such LIBOR Determination Date. If at least two such rates are so provided, the LIBOR rate for the Interest Period shall be the arithmetic mean of such rates. If fewer than two such rates are so provided, then the LIBOR rate for the Interest Period shall be the rate in effect with respect to the immediately preceding Interest Period.
“ LIBOR Determination Date ” means, with respect to an Interest Period, the London Banking Day that is two London Banking Days prior to the first day of such Interest Period.
“ London Banking Day ” is any day on which dealings in U.S. dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.
“ Representative Amount ” means a principal amount of not less than $1,000,000 for a single transaction in the relevant market at the relevant time.
 
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“ Reuters Page LIBOR 01 ” means the display so designated on the Reuters 3000 Xtra (or such other page as may replace the LIBOR01 page on that service, or such other service as may be nominated by the ICE Benchmark Administration Limited, or ICE, or its successor, or such other entity assuming the responsibility of ICE or its successor in the event ICE or its successor no longer does so, as the successor service, for the purpose of displaying London interbank offered rates for U.S. dollar deposits).
2.     Additional Interest. If, under the terms of the Registration Rights Agreement dated April 21, 2017 among the Company, Phillips 66 Company, a Delaware corporation (the “Guarantor”), and Deutsche Bank Securities Inc., BNP Paribas Securities Corp., RBC Capital Markets, LLC and TD Securities (USA) LLC, a Registration Default occurs with respect to this Security, the interest rate on this Security shall be increased by (i) 0.25% per annum for the first 90-day period beginning on the day immediately following such Registration Default and (ii) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case until and including the date such Registration Default ends, up to a maximum increase of 1.00% per annum (any such interest being referred to herein as “Additional Interest”).
3.     Method of Payment . The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the Record Date next preceding the Interest Payment Date, even if such Securities are canceled after such Record Date and on or before such Interest Payment Date. The Holder must surrender this Security to a Paying Agent to collect principal payments. The Company shall pay the principal of, premium (if any) on and interest on the Securities in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Such amounts shall be payable at the offices of the Trustee (as defined below), provided that at the option of the Company, the Company may pay such amounts (1) by wire transfer with respect to Global Securities or (2) by wire transfer to an account in the continental United States or check payable in such money mailed to a Holder’s registered address with respect to any Securities.
4.     Paying Agent and Registrar . Initially, Wells Fargo Bank, National Association (the “Trustee”), the trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar, co-registrar or additional paying agent without notice to any Holder. The Company, the Guarantor or any Subsidiary of the Company may act in any such capacity.
 
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5.     Guarantee . Phillips 66 Company unconditionally guarantees to the Holders from time to time of the Securities, upon the terms and subject to the conditions set forth in the Indenture (as defined below), (a) the full and prompt payment of the principal of and any premium on the Securities when and as the same shall become due, whether at the Stated Maturity thereof, by acceleration, redemption or otherwise, and (b) the full and prompt payment of any interest on the Securities when and as the same shall become due, subject to any applicable grace period. The Guarantee constitutes a guarantee of payment and not of collection. In the event of a default in the payment of principal of or any premium on the Securities when and as the same shall become due, whether at the Stated Maturity thereof, by acceleration, call for redemption or otherwise, or in the event of a default in the payment of any interest on the Securities when and as the same shall become due, subject to any applicable grace period, each of the Trustee and the Holders of the Securities shall have the right to proceed first and directly against the Guarantor under the Indenture without first proceeding against the Company or exhausting any other remedies which the Trustee or such Holder may have and without resorting to any other security held by it.
6.     Indenture . The Company issued the Securities under an Indenture, dated as of April 21, 2017 (the “Indenture”), among the Company, the Guarantor and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”), as in effect on the date of execution of the Indenture. The Securities are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms and for the definitions of capitalized terms used but not defined herein. The Securities are unsecured general obligations of the Company limited to $[300,000,000] $[300,000,000] in aggregate principal amount; provided, however , that the authorized aggregate principal amount of the Securities may be increased before or after the issuance of any Securities by a Board Resolution (or action pursuant to a Board Resolution) to such effect; provided further, however, that the authorized aggregate principal amount of the Securities may be increased only if the additional Securities issued will be fungible with the original Securities for United States federal income tax purposes. The Indenture provides for the issuance of other series of debt securities (including the Securities, the “Debt Securities”) thereunder.
7.     Denominations, Transfer, Exchange . The Securities are in registered form without coupons in minimum denominations of $1,000 and any integral multiples of $1,000 above such amount, subject to the terms of the issuance of Exchange Securities. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. Neither the Company, the Trustee nor the Registrar shall be required to register the transfer or exchange of (a) any Security selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part, or (b) any Security during the period beginning 15 Business Days before the mailing of notice of redemption of Securities to be redeemed and ending at the close of business on the day of mailing.
8.     Persons Deemed Owners . The registered Holder of a Security shall be treated as its owner for all purposes.
 
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9.     Redemption . The Securities are subject to redemption, in whole or in part, beginning on April 23, 2018 and at any time thereafter, at the option of the Company, upon not less than 30 nor more than 60 days’ prior notice as provided in the Indenture, at a Redemption Price equal to 100% of the principal amount of the Securities to be redeemed. Upon any redemption, the Company shall pay accrued and unpaid interest on the Securities being redeemed to, but not including, the Redemption Date. Any Securities exchanged for Exchange Securities as provided below will no longer be redeemable by the Company, and instead the Exchange Securities will be redeemable by the Exchange Securities Issuer. Unless there is a default in payment of the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the Securities or portions thereof called for redemption.
10.     Issuance of Exchange Securities . Subject to certain conditions set forth in the Indenture, the Company may cause one or more Eligible Exchange Securities Issuers to issue one or more series of Exchange Securities for all or a portion of the Securities or the Exchange Securities outstanding, in one transaction or a series of successive transactions, without the consent of the Holders of the Securities or the Exchange Securities. The form and terms of the Exchange Securities shall be identical to those of the Securities being exchanged except for: the date from which interest accrues, the issuer and guarantors of the Exchange Securities, the minimum denomination of the Exchange Securities, any CUSIP number for the Exchange Securities and the right of the Exchange Securities Issuer to redeem such Exchange Securities as further specified in the Indenture. No issuance of Exchange Securities in respect of Securities pursuant to an exchange shall be in an amount less than $150.0 million aggregate principal amount.
Each of the Guarantor, PDI, and Phillips 66 Partners is an Eligible Exchange Securities Issuer. However, any issuance of Exchange Securities by the Guarantor or PDI may only be made as part of a series of transactions pursuant to which Phillips 66 Partners shall issue Exchange Securities immediately following the successive issuances of Exchange Securities by the Guarantor and PDI.
If fewer than all of the Securities are to be exchanged, the Securities to be exchanged shall be selected not more than 60 days prior to the Exchange Date, from the Securities outstanding on a pro rata basis. Notice of an exchange shall be given not less than 5 Business Days nor more than 60 days before the Exchange Date to Holders of the Securities to be exchanged. Securities called for exchange must be surrendered to the Paying Agent on the Exchange Date to collect accrued and unpaid interest on the Securities to be exchanged and to receive the Exchange Securities. For any Holder that holds Securities that are exchanged in part, a new security or securities having a new CUSIP number shall be delivered to the Holder in exchange for the unexchanged portion of the principal of the Securities so surrendered that is not exchanged. In connection with any partial exchange, the Company shall reduce the minimum denomination of the Securities to $1.00 with integral multiples of $1.00 in excess thereof, and the minimum denomination of the Exchange Securities also will be $1.00 with integral multiples of $1.00 in excess thereof. If a Holder would receive an amount of less than $1.00 in respect of its existing Securities or Exchange Securities, such amounts shall be rounded to the nearest $1.00 (with $0.50 being rounded upwards).
Set forth below is a summary of certain of the defined terms used for purposes of the exchange of a series of Securities.
 
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“ Eligible Exchange Notes Issuer ” means each of the Guarantor, PDI and Phillips 66 Partners.
“ Exchange Date ” means the date established by the Company for an exchange of Securities for Exchange Securities.
“ Exchange Securities ” means a series of notes issued by an Exchange Notes Issuer in exchange for all or a portion of previously issued Notes or Exchange Notes.
“ Exchange Securities Issuer ” means the applicable Eligible Exchange Securities Issuer.
“ Issuer ” means (i) with respect to the Securities, the Company, and (ii) with respect to the Exchange Securities, the applicable Exchange Securities Issuer.
“ PDI ” means Phillips 66 Project Development, Inc., a Delaware corporation and a wholly owned subsidiary of the Guarantor.
“ Phillips 66 Partners ” means Phillips 66 Partners LP, a Delaware limited partnership.
11.     Amendments and Waivers . Subject to certain exceptions and limitations, the Indenture or the Securities may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Securities of all series affected by such amendment or supplement (acting as one class), and any existing or past Default or Event of Default under, or compliance with any provision of, the Indenture may be waived (other than any continuing Default or Event of Default in the payment of the principal of, premium (if any) on or interest on the Securities) by the Holders of at least a majority in principal amount of the then outstanding Securities of any series or of all series (acting as one class) in accordance with the terms of the Indenture. Without the consent of any Holder, the Company, the Guarantor and the Trustee may amend or supplement the Indenture or the Securities or waive any provision of either: (i) to cure any ambiguity, omission, defect or inconsistency; (ii) if required, to provide for the assumption of the obligations of the Company, the Guarantor or any Exchange Securities Issuer under the Indenture in the case of the merger, consolidation or asset transfer permitted under the Indenture; (iii) to provide for uncertificated Securities in addition to or in place of certificated Securities or to provide for the issuance of bearer Securities (with or without coupons); (iv) to provide any security for, or to add any guarantees of or additional obligors on, the Securities or the related Guarantees; (v) to comply with any requirement in order to effect or maintain the qualification of the Indenture under the TIA; (vi) to add to the covenants of the Company, any Exchange Securities Issuer or any Guarantor for the benefit of the Holders of the Securities, or to surrender any right or power conferred by the Indenture upon the Company, any Exchange Securities Issuer or any Guarantor; (vii) to add any additional Events of Default with respect to all or any series of the Debt Securities; (viii) to change or eliminate any of the provisions of the Indenture, provided that no outstanding Security is adversely affected in any material respect; (ix) to establish the form or terms of Securities of any series; (x) to supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of the Securities pursuant to the Indenture, provided that no interest of any Holders of Securities is adversely affected in any material respect; (xi) to evidence and
 
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provide for the acceptance of appointment under the Indenture by a successor Trustee with respect to the Securities and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than one Trustee, pursuant to the requirements of the Indenture; or (xii) to evidence and provide for the exchange of Existing Securities and the issuance and terms of the Exchange Securities in accordance with the Indenture.
The right of any Holder to participate in any consent required or sought pursuant to any provision of the Indenture (and the obligation of the Company or the Guarantor to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date identified by the Company or the Guarantor in a notice furnished to Holders in accordance with the terms of the Indenture.
Without the consent of each Holder affected, the Company may not (i) reduce the amount of Debt Securities whose Holders must consent to an amendment, supplement or waiver; (ii) reduce the rate of or change the time for payment of interest, including default interest, on any Security; (iii) reduce the principal of or premium on or any mandatory sinking fund payment with respect to, or change the Stated Maturity of, any Security or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to the Indenture; (iv) reduce the premium, if any, payable upon the redemption of any Security or change the time at which any Security may or shall be redeemed; (v) change any obligation of the Issuer or a Guarantor to pay Additional Amounts with respect to any Security; (vi) change the coin or currency in which any Security or any premium, interest or Additional Amounts with respect thereto is payable; (vii) impair the right to institute suit for the enforcement of any payment of principal of or premium (if any) or interest on any Security, except as provided in the Indenture; (viii) make any change in the percentage of principal amount of Debt Securities necessary to waive compliance with certain provisions of the Indenture or make any change in the provision for modification; or (ix) waive a continuing Default or Event of Default, each as defined in the Indenture, in the payment of principal of or premium (if any) or interest on the Securities.
A supplemental indenture that changes or eliminates any covenant or other provision of the Indenture which has expressly been included solely for the benefit of one or more particular series of Debt Securities under the Indenture, or which modifies the rights of the Holders of Debt Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under the Indenture of the Holders of Debt Securities of any other series.
12.     Defaults and Remedies . Events of Default are defined in the Indenture and generally include: (i) default for 30 days in payment of any interest on the Securities or any Additional Amounts with respect to any Security; (ii) default in any payment of principal of or premium, if any, on the Securities when due and payable; (iii) default by the Company, any Exchange Securities Issuer or the Guarantor in compliance with any of its other covenants or agreements in, or provisions of, the Securities or in the Indenture which shall not have been remedied within 90 days after written notice by the Trustee or by the holders of at least 25% in principal amount of the Securities then outstanding; or (iv) certain events involving bankruptcy, insolvency or reorganization of the Company, an Exchange Securities Issuer or the Guarantor. If
 
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an Event of Default occurs and is continuing, the Trustee by notice to the Company and the Guarantor, or the Holders of at least 25% in principal amount of the then outstanding Securities of the series affected by such Event of Default by notice to the Company, the Guarantor and the Trustee, may declare the principal of and interest on all the Securities to be immediately due and payable, except that in the case of an Event of Default arising from certain events of bankruptcy, insolvency or reorganization of the Company or the Guarantor, all outstanding Debt Securities under the Indenture become due and payable immediately without further action or notice. The amount due and payable upon the acceleration of any Security is equal to 100% of the principal amount thereof plus accrued interest to the date of payment. Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing default (except a default in payment of principal, premium or interest) if it determines that withholding notice is in their interests. The Company and the Guarantor must furnish annual compliance certificates to the Trustee.
13.     Discharge Prior to Maturity . The Indenture with respect to the Securities shall be discharged and canceled upon the payment of all of the Securities and shall be discharged except for certain obligations upon the irrevocable deposit with the Trustee of any combination of funds and U.S. Government Obligations sufficient for such payment.
14.     Trustee Dealings with Company and Guarantor . The Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and may make loans to, accept deposits from, and perform services for the Company, the Guarantor or any of their respective Affiliates, and may otherwise deal with the Company, the Guarantor or any such Affiliates, as if it were not Trustee.
15.     No Recourse Against Others . A director, officer, employee, stockholder, partner or other owner of the Company, the Guarantor or the Trustee, as such, shall not have any liability for any obligations of the Company under the Securities, for any obligations of the Guarantor under the Guarantee or for any obligations of the Company, the Guarantor or the Trustee under the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release shall be part of the consideration for the issue of Securities.
16.     Authentication . This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.
17.     CUSIP Numbers . Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities as a convenience to the Holders of the Securities. No representation is made as to the accuracy of such numbers as printed on the Securities and reliance may be placed only on the other identification numbers printed thereon.
 
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18.     Abbreviations . Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Request may be made to:
Phillips 66
2331 CityWest Blvd.
Houston, Texas 77042
Telephone: (281) 293-6600
Attention: Treasurer
 
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SCHEDULE OF EXCHANGES OF SECURITIES*
The following exchanges of a part of this Global Security for other Securities have been made:

Date  of Exchange	 	Amount of
Decrease in
Principal Amount
of this  Global  Security	 	Amount of
Increase in
Principal Amount
of this Global Security	 	Principal Amount
of this Global
Security Following
Such Decrease
or  Increase	 	Signature of
Authorized Officer
of Trustee or
Security  Custodian	

	 		 		 		 		

*	To be included only if the Security is a Global Security	
 
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ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to

(Insert assignee’s social security or tax I.D. number)

 

 
(Print or type assignee’s name, address and zip code)
and irrevocably appoint                                                                                                                                                                                 
as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Date:                     	  		  	Your Signature:	 	 	
	  		  		 	(Sign exactly as your name appears on
the face of this Security)	

Signature Guarantee:	 	 	
	 	(Participant in a Recognized
Signature Guaranty Medallion Program)	
 
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Annex B
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
 
Re:	[Floating Rate Notes due 2019] [Floating Rate Notes due 2020] (the “Notes”) of Phillips 66 (the “Company”)	
This Certificate relates to $          principal amount of Notes held in *          book-entry or *          definitive form by                      (the “Transferor”).
The Transferor has requested the Security Custodian by written order to exchange or register the transfer of a Note or Notes or beneficial interests therein (the “Transfer”).
In connection with such request and in respect of each such Note or beneficial interest therein, the Transferor does hereby certify that the Transferor is familiar with the Indenture relating to the above-captioned Notes and that the Transfer does not require registration under the Securities Act of 1933, as amended (the “Securities Act”), because:*
 
☐	Such Note or beneficial interest is being acquired for the Transferor’s own account without transfer.	
 
☐	Such Note or beneficial interest is being transferred to (i) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act), in accordance with Rule 144A under the Securities Act, that is purchasing for its own account or for the account of another qualified institutional buyer, in each case to whom notice is given that the Transfer is being made in reliance on Rule 144A; or (ii) to a non-U.S. person in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act (and in the case of clause (ii), based upon an opinion of counsel if the Company or the Trustee so requests, together with a certification in substantially the form of Annex C to the Board Resolution, Officers’ Certificate or Company Order setting forth the terms of the Notes pursuant to the Indenture).	
 
☐	Such Note or beneficial interest is being transferred pursuant to (i) an exemption from the registration requirements of the Securities Act provided by Rule 144 or (ii) an effective registration statement under the Securities Act.	
 
☐	Such Note or beneficial interest is being transferred in reliance on and in compliance with another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel if the Company or the Trustee so requests).	

*	Fill in blank or check appropriate box, as applicable.	
 
B-1

			
[INSERT NAME OF TRANSFEROR]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	 	Address:	
 
B-2

Annex C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S
 
Re:	[Floating Rate Notes due 2019] [Floating Rate Notes due 2020] (the “Notes”) of Phillips 66 (the “Company”)	
This Certificate relates to $          principal amount of Notes held in *          book-entry or *          definitive form by                      (the “Transferor”).
The Transferor has requested the Security Custodian by written order to exchange or register the transfer of a Note or Notes or beneficial interests therein (the “Transfer”) for an interest in the Regulation S Global Note to be held with [Euroclear] [Clearstream] through the Depositary (in each case as defined in the Indenture related to the above-referenced Notes or the related Board Resolution, Officers’ Certificate or Company Order (each as defined in the Indenture)).
In connection with such request and in respect of each such Note or beneficial interest therein, the Transferor does hereby certify that the Transferor is familiar with such Indenture and Board Resolution, Officers’ Certificate or Company Order and that:
 
 	(a)	the offer of such Notes or beneficial interests was not made to a person in the United States or for the benefit of a person in the United States (other than an Initial Purchaser);	
 
 	(b)	at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the transferee was outside the United States; or the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was prearranged with a buyer in the United States;	
 
 	(c)	no directed selling efforts have been made by the Transferor in the United States in contravention of the requirements of Rule 903(a) or Rule 904(a) of Regulation S under the U.S. Securities Act of 1933 (the “Securities Act”), as applicable; and	
 
 	(d)	the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.	

*	Fill in blank or check appropriate box, as applicable.	
 
C-1

The Company and the Trustee are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S under the Securities Act.

[INSERT NAME OF TRANSFEROR]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	 	Address:	
 
C-2