CONTRIBUTION, CONVEYANCE AND ASSUMPTION

AGREEMENT

This Contribution, Conveyance and Assumption Agreement (this “ Agreement ”), dated as of the Execution Date (as defined below), is by and among Tesoro Logistics LP, a Delaware limited partnership (the “ Partnership ”), Tesoro Logistics GP, LLC, a Delaware limited liability company and the general partner of the Partnership (the “ General Partner ”), Tesoro Logistics Operations LLC, a Delaware limited liability company (the “ Operating Company ”), Tesoro Corporation, a Delaware corporation (“ Tesoro ”), and Tesoro Refining and Marketing Company, a Delaware corporation (“ TRMC ”). The above-named entities are sometimes referred to in this Agreement individually as a “Party” and collectively as the “ Parties .”

RECITALS

WHEREAS , TRMC is the owner of the newly-constructed Anacortes Rail Facility located in Anacortes, Washington (the “ Facility ”); and

WHEREAS , TRMC desires to contribute certain assets to the General Partner, the General Partner desires to contribute those assets to the Partnership and the Partnership desires to contribute those assets to the Operating Company, all on the terms and conditions set forth herein.

NOW, THEREFORE , in consideration of the mutual covenants, representations, warranties and agreements herein contained, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used herein shall have the respective meanings ascribed to such terms below:

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

“ Amended and Restated Operational Services Agreement ” means that certain Amended and Restated Operational Services Agreement dated as of April 1, 2012, among Tesoro, Tesoro Companies Inc., TRMC, the General Partner, the Operating Company, Tesoro Alaska Company and Tesoro High Plains Pipeline Company.

“ Assets ” means the Facility, including a four-track unloading platform, two receiving and departing tracks capable of handling a 100-car unit train, two additional short track spurs to store and allow minor repair of railcars, pumps, piping and other ancillary equipment to allow for the direct offloading to the storage facility, and gates and fencing associated with the Facility, as well as certain other related assets and properties that are either located on the same parcels of real estate as those assets and properties or used in connection therewith, and all contracts, permits, licenses and other intangible rights of TRMC to the extent assignable, and to the extent used in connection with the

ownership and operation of any of the other assets and properties described above, which assets are listed in detail on Exhibit A to this Agreement; provided, however, that with respect to Section 2.2 and Section 2.3 , the Assets shall also include the TTA and the MTUA.

“ Common Unit ” means a common unit representing a limited partner interest in the Partnership having the rights set forth in the Partnership Agreement.

“ Excluded Assets and Liabilities ” has the meaning set forth in Section 2.1(c) of this Agreement.

“ Execution Date ” means November 15, 2012.

“ Facility ” has the meaning set forth in the Recitals.

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

“ General Partner Contribution ” has the meaning set forth in Section 2.2(a) of this Agreement.

“ General Partner Unit ” means a general partner unit representing a general partner interest in the Partnership having the rights set forth in the Partnership Agreement.

“ Material Adverse Effect ” has the meaning set forth in Section 3.4(a) of this Agreement.

“ MTUA ” means that certain Anacortes Mutual Track Use Agreement to be executed on the Execution Date among the General Partner, the Partnership, the Operating Company and TRMC, pursuant to which the parties will specify joint use of certain railroad track, including any switches and other ancillary equipment required to use such track, effective as of the “Commencement Date” as defined therein.

“ Operating Company ” has the meaning set forth in the introduction to this Agreement.

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

“ Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of April 26, 2011.

“ Partnership Contribution ” has the meaning set forth in Section 2.3 of this Agreement.

“ Partnership Group ” has the meaning set forth in the Second Amended and Restated Omnibus Agreement.

“ Party ” or “ Parties ” is defined in the introduction to this Agreement.

“ Permitted Liens ” has the meaning set forth in Section 2.1(a) of this Agreement.

“ Second Amended and Restated Omnibus Agreement ” means that certain Second Amended and Restated Omnibus Agreement dated as of the Execution Date, among Tesoro, TRMC, Tesoro Companies, Inc., a Delaware corporation, Tesoro Alaska Company, a Delaware corporation, the General Partner and the Partnership, as such agreement may be amended, supplemented or restated from time to time.

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

“ TTA ” means that certain Anacortes Track Use and Throughput Agreement to be executed on the Execution Date among the General Partner, the Partnership, the Operating Company and TRMC, pursuant to which the Operating Company will provide TRMC with use of the track and offloading facility as well as the service of offloading crude or other agreed products from unit trains effective as of the “Commencement Date” as defined therein.

“ Transaction Documents ” has the meaning set forth in Section 3.4(a) of this Agreement.

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

“ TRMC Contribution ” has the meaning set forth in Section 2.1(a) of this Agreement.

ARTICLE II

CONTRIBUTIONS AND ACKNOWLEDGEMENTS

(a)      Effective as of the Execution Date, TRMC hereby assigns, transfers, contributes, grants, bargains, conveys, sets over and delivers to the General Partner, its successors and its assigns, for its and their own use forever, the entire right, title, interest, responsibilities, coverages and liabilities of TRMC in and to the Assets, including any responsibilities, coverages and liabilities under any permit or license included in the Assets, free and clear of all liens and encumbrances of any kind or nature, other than as set forth on Exhibit B to this Agreement (the “ Permitted Liens ”). The contribution described in this Section 2.1(a) shall be referred to in this Agreement as the “ TRMC Contribution .” TRMC makes the TRMC Contribution in exchange for an additional 7% membership interest in the General Partner, and the General Partner accepts the TRMC Contribution as a contribution to the capital of the General Partner.

(b)      The Parties hereby acknowledge and agree that TRMC owns certain assets and properties (including any and all petroleum and hydrocarbon inventory) and has certain responsibilities, coverages and liabilities that might otherwise be considered as part of the Assets as set forth on Exhibit C to this Agreement (collectively, the “ Excluded Assets and Liabilities ”), and that the Excluded Assets and Liabilities are

being retained by TRMC and are not being contributed or transferred as part of the TRMC Contribution.

Section 2.2      Conveyances by the General Partner to the Partnership .

(a)      Effective as of the Execution Date and immediately after the completion of the TRMC Contribution, the General Partner hereby assigns, transfers, contributes, grants, bargains, conveys, sets over and delivers to the Partnership, its successors and its assigns, for its and their own use forever, the entire right, title, interest, responsibilities, coverages and liabilities of the General Partner in and to the Assets, including any responsibilities, coverages and liabilities under any permit or license included in such Assets, free and clear of all liens and encumbrances of any kind or nature, other than the Permitted Liens. The contribution described in this Section 2.2(a) shall be referred to in this Agreement as the “ General Partner Contribution .”

(b)      The General Partner shall make the General Partner Contribution in exchange for the payment or issuance of the following as of the Execution Date in consideration of the conveyance and transfer of all of the Assets as of the Execution Date as set forth herein:

(i)      $162 million in cash;

(ii)      the issuance to the General Partner of 93,289 general partner units in the Partnership to restore and maintain the General Partner’s two percent (2%) general partner interest in the Partnership; and

(iii)      the issuance to the General Partner of 309,838 Common Units, representing slightly less than a one percent (1%) limited partner interest in the Partnership.

(c)      The Partnership hereby accepts the Assets, including the TTA and the MTUA, as a contribution to the capital of the Partnership.

Section 2.3      Conveyances by the Partnership to the Operating Company . Effective as of the Execution Date and immediately after the completion of the General Partner Contribution, the Partnership hereby assigns, transfers, contributes, grants, bargains, conveys, sets over and delivers to the Operating Company, its successors and its assigns, for its and their own use forever, the entire right, title, interest, responsibilities, coverages and liabilities of the Partnership in and to the Assets, including any responsibilities, coverages and liabilities under any permit or license included in the Assets, free and clear of all liens and encumbrances of any kind or nature, other than the Permitted Liens. The contribution described in this Section 2.3 shall be referred to in this Agreement as the “ Partnership Contribution .” The Partnership hereby makes the Partnership Contribution as a capital contribution to the capital of the Operating Company and the Operating Company hereby accepts the Assets, including the TTA and the MTUA, as a contribution to the capital of the Operating Company.

Section 2.4      Actions and Deliveries . The Parties acknowledge that the following actions and deliveries shall occur as set forth below:

(a)      if agreed upon at a future date by the General Partner and Tesoro, the General Partner shall loan the funds it shall receive pursuant to Section 2.2 to Tesoro pursuant to a 10-year promissory note in the form attached as Exhibit D to this Agreement;

(b)      as of the Execution Date, TRMC shall execute and deliver documents and instruments necessary and appropriate to convey the applicable Assets directly to the Operating Company, in the form attached hereto as Exhibit E and other customary forms as may be agreed by the Parties;

(c)      as of the Execution Date, the parties to the TTA have executed and delivered the TTA;

(d)      as of the Execution Date, the parties to the MTUA have executed and delivered the MTUA;

(e)      as of the Execution Date, the parties to the Second Amended and Restated Omnibus Agreement have executed and delivered the Second Amended and Restated Omnibus Agreement;

(f)      as of the Execution Date, the parties to the Amended and Restated Operational Services Agreement have executed and delivered an amendment and restatement of the schedules to the Amended and Restated Operational Services Agreement;

(g)      as of the Execution Date, TRMC and the Operating Company have executed and delivered a ground lease agreement related to the real property under the Facility and such other matters as included therein in form and substance satisfactory to both parties;

(h)      as of the Execution Date, TRMC and the Operating Company have executed and delivered a quitclaim deed with respect to the Assets identified on Exhibit A applicable to such quitclaim in form and substance satisfactory to both parties;

(i)      as of the Execution Date, or at a later date if necessary pursuant to Section 3.6 , TRMC and the Operating Company have executed consent and assignment agreements for the assignment of certain of the contracts listed on Exhibit A , all in form and substance satisfactory to both parties;

(j)      as of the Execution Date, the Parties and the parties to the other Transaction Documents have executed a closing escrow agreement to effect the closing into escrow with McGuireWoods LLP of all documents and instruments related to the closing as of the Execution Date; and

(k)      as of the Execution Date, the conflicts committee of the board of the directors of the General Partner has received the opinion of Simmons International, the financial advisor to the conflicts committee of the board of directors of the General Partner, that the consideration to be paid to the General Partner pursuant to Section 2.2 of this Agreement is fair from a financial point of view to the Partnership and the holders of common units of the Partnership other than Tesoro, the General Partner or any of their respective affiliates.

ARTICLE III

REPRESENTATIONS

Section 3.1      Representations of TRMC . TRMC hereby represents and warrants to the General Partner, the Partnership and the Operating Company as of the Execution Date as follows:

(a)      the Assets are in good working condition, suitable for the purposes for which they are being used in accordance with accepted industry standards and all applicable laws and regulations;

(b)      TRMC has title to the Assets that is sufficient to operate the Assets in accordance with their intended and historical use, subject to all recorded matters and all physical conditions in existence as of the Execution Date;

(c)      to TRMC’s knowledge, after reasonable investigation, there are no terms in any agreements included in the Assets that would materially impair the rights granted to the Partnership Group pursuant to the transactions contemplated by this Agreement; and

(d)      the Assets have been designed and constructed to allow the Facility to have sufficient capacity to perform at the rate of one one-hundred car unit train per day, subject to applicable permit restrictions.

Section 3.2      Representation of the General Partner . The General Partner hereby represents and warrants to TRMC as of the Execution Date that the General Partner has full power and authority to act as general partner of the Partnership in all material respects.

Section 3.3      Representation of the Partnership . The Partnership hereby represents and warrants to the General Partner and Tesoro as of the Execution Date that the Common Units and the general partner units of the Partnership issued to the General Partner pursuant to Section 2.2(a) have been duly authorized for issuance and sale to the General Partner and, when issued and delivered by the Partnership pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued and fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in Sections 17-607 and 17-804 of the Delaware Limited Partnership Act).

Section 3.4      Representations of the Parties . Each Party represents and warrants, severally as to only itself and not jointly, to the other Parties as of the Execution Date:

(a)      The applicable Party has been duly formed or incorporated and is validly existing as a limited partnership, limited liability company or corporation, as applicable, in good standing under the laws of its jurisdiction of organization with full power and authority to enter into and perform its obligations under this Agreement and the other documents contemplated herein (the “ Transaction Documents ”) to which it is a party, to own or lease and to operate its properties currently owned or leased or to be owned or leased and to conduct its business. The applicable Party is duly qualified to do business as a foreign corporation, limited liability company or limited partnership, as applicable, and is in good standing under the laws of each jurisdiction which requires such qualification, except where the failure to be so qualified or registered would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties, taken as a whole, whether or not arising from transactions in the ordinary course of business, of such Party (a “ Material Adverse Effect ”).

(b)      The applicable Party has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and perform its respective obligations thereunder. All corporate, partnership and limited liability company action, as the case may be, required to be taken by the applicable Party or any of its stockholders, members or partners for the execution and delivery by the applicable Party of the Transaction Documents to which it is a party and the consummation of the transactions contemplated thereby has been validly taken.

(c)      For the applicable Party, each of the Transaction Documents to which it is a party is a valid and legally binding agreement of such Party enforceable against such Party in accordance with its terms; except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); provided further; that the indemnity, contribution and exoneration provisions contained in any of the Transaction Documents may be limited by applicable laws and public policy.

(d)      Neither the execution, delivery and performance of the Transaction Documents by the applicable Party that is a party thereto nor the consummation of the transactions contemplated by the Transaction Documents conflict or will conflict with, or result or will result in, a breach or violation of or a default under (or an event that, with notice or lapse of time or both would constitute such an event), or imposition of any lien, charge or encumbrance upon any property or assets of any of the applicable Party pursuant to, (i) the partnership agreement, limited liability company agreement, certificate of limited partnership, certificate of formation or conversion, certificate of articles of incorporation, bylaws or other constituent document of the applicable Party, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement,

loan agreement or other agreement, obligation, condition, covenant or instrument to which the applicable Party is a party or bound or to which its property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the applicable Party of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over such Party or any of its properties in a proceeding to which it or its property is a party, except in the case of clause (ii), liens, charges or encumbrances arising under security documents for the collateral pledged under such Party’s applicable credit agreements and except in the case of clause (iii), where such breach or violation would not reasonably be expected to have a Material Adverse Effect.

(e)      No permit, consent, approval, authorization, order, registration, filing or qualification of or with any court, governmental agency or body having jurisdiction over the applicable Party or any of its properties or assets is required in connection with the execution, delivery and performance of the Transaction Documents by the applicable Party, the execution, delivery and performance by the applicable Party that is a party thereto of its respective obligations under the Transaction Documents or the consummation of the transactions contemplated by the Transaction Documents other than (i) any filing related to the sale of the Common Units under this Agreement with federal or state securities laws authorities, and (ii) consents that have been obtained, except in the case of clause (ii) where the failure to obtain such consent would not reasonably be expected to have a Material Adverse Effect.

(f)      No action, suit, proceeding, inquiry or investigation by or before any court or governmental or other regulatory or administrative agency, authority or body or any arbitrator involving the applicable Party or its property is pending or, to the knowledge of the applicable Party, threatened or contemplated that (i) would individually or in the aggregate reasonably be expected to have a material adverse effect on the performance of the Transaction Documents or the consummation of any of the transactions contemplated therein, or (ii) would individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

Section 3.5      Survival . The Operating Company shall provide written notice to TRMC of any breach of the representation in Section 3.1(d) of this Agreement prior to the second anniversary date of the Execution Date. After the second anniversary of the Execution Date, TRMC’s representation in Section 3.1(d) shall no longer be effective.

Section 3.6      Cooperation on Assignment . If any of the consents and assignments referenced in Section 2.4(i) are not able to be executed on the Execution Date, the Parties shall cooperate and use commercially reasonable efforts to have such consents and assignments executed at the earliest practicable time. To the extent that any such consents and assignments cannot be obtained, the Parties will use their commercially reasonable efforts to take such actions as may be possible without violation or breach of any applicable contract to effectively to grant the Operating Company the economic benefits of, and impose upon the Operating Company the economic burdens of, such contracts.

ARTICLE IV

COVENANTS

Section 4.1      Further Assurances . From time to time after the Execution Date, and without any further consideration, the Parties agree to execute, acknowledge and deliver all such additional deeds, assignments, bills of sale, conveyances, instruments, notices, releases, acquittances and other documents, and to do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate (a) more fully to assure that the applicable Parties own all of the properties, rights, titles, interests, estates, remedies, powers and privileges granted by this Agreement, or which are intended to be so granted, (b) more fully and effectively to vest in the applicable Parties and their respective successors and assigns beneficial and record title to the interests contributed and assigned by this Agreement or intended to be so (including any actions required to effect the assignment and conveyance of the Assets as of the Execution Date), and (c) more fully and effectively to carry out the purposes and intent of this Agreement. Further, each Party shall grant to the other Party and their respective agents and representatives access to their respective property after the Execution Date during normal business hours and subject to standard safety and security procedures of the applicable Party for purposes of the operation of their respective businesses, as contemplated hereunder and under the documents referenced herein.

Section 4.2      Indemnity by TRMC . TRMC shall indemnify, defend and hold harmless the Partnership and the Operating Company from and against any Losses (as defined in the Second Amended and Restated Omnibus Agreement) suffered or incurred by those Parties by reason of or arising out of TRMC’s breach of the representation in Section 3.1(d) , to the extent that TRMC is notified in writing of any of the foregoing prior to the end of the survival period set forth in Section 3.5 . Such indemnification shall be made in accordance with the procedures set forth in Section 3.6 of the Second Amended and Restated Omnibus Agreement and shall also be subject to the provisions of Section 3.7(d) of the Second Amended and Restated Omnibus Agreement.

ARTICLE V

MISCELLANEOUS

Section 5.1      Costs . Each Party shall pay its own costs and expenses with respect to the transactions contemplated by this Agreement; except as follows:

(a)      the Partnership and TRMC shall each pay one-half of (i) the sales, use and similar taxes arising out of the contributions, conveyances and deliveries to be made under Article II , (ii) all documentary, filing, recording, transfer, deed and conveyance taxes and fees required in connection therewith, (iii) legal fees and costs of McGuireWoods LLP and Latham & Watkins LLP, and (iv) any other customary closing costs associated with the contributions of the Assets; and

(b)      the Partnership shall pay all of the costs and expenses of the conflicts committee of the board of directors of the General Partner, including, but not

limited to, the advisory and legal fees and costs of Andrews Kurth LLP and Simmons International.

Section 5.2      Headings; References; Interpretation . All Article and Section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, including, without limitation, all Schedules and Exhibits attached hereto, and not to any particular provision of this Agreement. All references herein to Articles, Sections, Schedules and Exhibits shall, unless the context requires a different construction, be deemed to be references to the Articles and Sections of this Agreement and the Schedules and Exhibits attached hereto, and all such Schedules and Exhibits attached hereto are hereby incorporated herein and made a part hereof for all purposes. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders, and the singular shall include the plural and vice versa. The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation,” “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.

Section 5.3      Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

Section 5.4      No Third Party Rights . The provisions of this Agreement are intended to bind the Parties as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies, and no person is or is intended to be a third party beneficiary of any of the provisions of this Agreement.

Section 5.5      Counterparts . This Agreement may be executed in any number of counterparts (including facsimile or .pdf copies) with the same effect as if all Parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument.

Section 5.6      Applicable Law; Forum, Venue and Jurisdiction . This Agreement shall be construed in accordance with and governed by the laws of the State of Texas, without regard to the principles of conflicts of law. Each of the Parties (a) irrevocably agrees that any claims, suits, actions or proceedings arising out of or relating in any way to this Agreement shall be exclusively brought in any federal court of competent jurisdiction situated in the United States District Court for the Western District of Texas, San Antonio Division, or if such federal court declines to exercise or does not have jurisdiction, in the district court of Bexar County, Texas, in each case regardless of whether such claims, suits, actions or proceedings sound in contract, tort, fraud or

otherwise, are based on common law, statutory, equitable, legal or other grounds, or are derivative or direct claims; (b) irrevocably submits to the exclusive jurisdiction of the United States District Court for the Western District of Texas, San Antonio Division, or if such federal court declines to exercise or does not have jurisdiction, of the district court of Bexar County, Texas in connection with any such claim, suit, action or proceeding; (c) agrees not to, and waives any right to, assert in any such claim, suit, action or proceeding that (i) it is not personally subject to the jurisdiction of the United States District Court for the Western District of Texas, San Antonio Division, or the district court of Bexar County, Texas, or of any other court to which proceedings in such courts may be appealed, (ii) such claim, suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of such claim, suit, action or proceeding is improper; (d) expressly waives any requirement for the posting of a bond by a party bringing such claim, suit, action or proceeding; and (e) consents to process being served in any such claim, suit, action or proceeding by mailing, certified mail, return receipt requested, a copy thereof to such party at the address in effect for notices hereunder or by personal service within or without the State of Texas, and agrees that service in such forms shall constitute good and sufficient service of process and notice thereof; provided, however, that nothing in clause (e) hereof shall affect or limit any right to serve process in any other manner permitted by law.

Section 5.7      Severability . If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the Parties as expressed in this Agreement at the time of execution of this Agreement.

Section 5.8      Amendment or Modification . This Agreement may be amended or modified from time to time only by the written agreement of all the Parties. Each such instrument shall be reduced to writing and shall be designated on its face as an amendment to this Agreement. Notwithstanding anything in the foregoing to the contrary, any amendment executed by the Partnership or any of its subsidiaries shall not be effective unless and until the execution of such amendment has been approved by the conflicts committee of the General Partner’s board of directors.

Section 5.9      Integration . THIS AGREEMENT AND THE INSTRUMENTS REFERENCED HEREIN SUPERSEDE ALL PREVIOUS UNDERSTANDINGS OR AGREEMENTS AMONG THE PARTIES, WHETHER ORAL OR WRITTEN, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT AND SUCH INSTRUMENTS. THIS AGREEMENT AND SUCH INSTRUMENTS CONTAIN THE ENTIRE UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO UNDERSTANDING, REPRESENTATION, PROMISE OR AGREEMENT, WHETHER ORAL OR WRITTEN, IS INTENDED TO BE OR SHALL BE INCLUDED IN OR FORM PART

OF THIS AGREEMENT UNLESS IT IS CONTAINED IN A WRITTEN AMENDMENT HERETO EXECUTED BY THE PARTIES HERETO AFTER THE DATE OF THIS AGREEMENT.

Section 5.10      Specific Performance . The Parties agree that money damages may not be a sufficient remedy for any breach of this Agreement and that in addition to any other remedy available at law or equity, the Parties shall be entitled to seek specific performance and injunctive or other equitable relief as a remedy for any Party’s breach of this Agreement. The Parties agree that no bond shall be required for any injunctive relief in connection with a breach of this Agreement.

Section 5.11      Deed; Bill of Sale; Assignment . To the extent required and permitted by applicable law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of the assets and interests referenced herein.

Section 5.12      Notice . All notices or requests or consents provided for by, or permitted to be given pursuant to, this Agreement must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by delivering such notice in person or by facsimile to such Party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by facsimile shall be effective upon actual receipt if received during the recipient’s normal business hours or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below or at such other address as such Party may stipulate to the other Parties in the manner provided in this Section 5.12 .

If to the Tesoro or TRMC:

Tesoro Corporation

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

Attn: Charles S. Parrish

Facsimile: (210) 745-4494

If to the General Partner, the Partnership or the Operating Company:

Tesoro Logistics LP

c/o Tesoro Logistics GP, LLC, its General Partner

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

Attn: Charles S. Parrish

Facsimile: (210) 745-4494

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties to this Agreement have caused it to be duly executed as of the Execution Date.

EXHIBIT A

Assets

The following assets as listed on TRMC’s asset ledger as of the date hereof:

Asset	Cost Ctr	Description
CRUDE PUMPS	21370	Three pumps. Asset Tag # 1404, 1405 and 1406. 250 HP VFD's
OIL WATER SEWER PUMPS	21370	Two pumps. Asset Tag # 1408 and 1409. 200 HP motors.
RAILROAD TRACKS	21370	Approximately 22,278 Track Feet (two rails). This breakout of track excludes the track in the unloading platform. All track is installed on ballast and concrete ties, except for the switches which are installed on wood ties.
UNLOADING PLATFORM SYSTEM	21370	Oily water sewer header and discharge piping, crude header and discharge piping, firewater system surrounding the platform with monitors, vapor equalization header and branch piping, potable water system (All Piping approximately 29,400 linear feet). Ballast and 6,400 feet of railroad tracks installed on the unloading pad.
ADMIN BUILDING	21370	Double-wide trailer, single-wide trailer, desks, chairs, and tables.

    

EXHIBIT B

Permitted Liens

Liens, claims, charges, options, encumbrances, mortgages, pledges or security interests as follows:

(a)     incurred and made in the ordinary course of business in connection with worker’s compensation;

(b)    that secure the performance of bids, tenders, leases, contracts (other than for the repayment of debt), statutory obligations, surety, customs and appeal bonds and other obligations of like nature, incurred as an incident to and in the ordinary course of business;

(c)     imposed by law, such as carriers’, warehouseman’s, mechanics’, materialmen’s, landlords’, laborers’, suppliers’ and vendors’ liens, incurred in good faith in the ordinary course of business and that secure obligations that are not yet due or delinquent or which are being contested in good faith by appropriate proceedings as to which the TRMC has set aside on its books adequate reserves;

(d)    that secure the payment of taxes, either not yet due or delinquent or being contested in good faith by appropriate legal or administrative proceedings and as to which TRMC has set aside on its books adequate reserves;

(e)     zoning restrictions, easements, licenses, rights of way, declarations, reservations, provisions, covenants, conditions, waivers or restrictions on the use of property (and with respect to leasehold interests, mortgages, obligations and liens incurred, created, assumed or permitted to exist and arising by, through or under a landlord or owner of the leased property, with or without consent of the lessee);

(f)     on property existing at the time such property was acquired by the TRMC (provided, that they were not created in contemplation of the acquisition of such property by TRMC);

(g)     created by Operating Company; and

(h)     pursuant to the Agreement, the Second Amended and Restated Omnibus Agreement, the Amended and Restated Operational Services Agreement and the TTA.

EXHIBIT C

Excluded Assets and Liabilities

Offsite control system in the Facility.

EXHIBIT D

Form of 10-Year Promissory Note

(See Attached.)

FOR VALUE RECEIVED , TESORO CORPORATION, a Delaware corporation, having an address at 19100 Ridgewood Parkway, San Antonio, Texas 78259 (“ Maker ”) promises to pay to the order of TESORO LOGISTICS GP, LLC, a Delaware limited liability company, having an address at 19100 Ridgewood Parkway, San Antonio, Texas 78259 (“ Payee ”) the principal sum of THIRTY FIVE MILLION EIGHT HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($35,875,000). Maker also promises to pay to Payee interest on the outstanding principal amount of this Note, from time to time, at the rate equal to the greater of (i) [the ________ 2012 applicable Federal interest rate that will be published by the IRS during the third week of _________ 2012] [ three percent (3.00%) ] and (ii) the “Applicable Federal Rate” (as defined in and determined under Section 1274(d) of the Internal Revenue Code of 1986, as amended) in effect on the date hereof. Interest shall be computed on the basis of a year of 365 (or 366) days and shall be due and payable in arrears on a quarterly basis within five (5) business days of the last day of each fiscal quarter.

Maker shall pay all obligations in lawful money of the United States in immediately available funds, free and clear of, and without deduction or offset for, any present or future taxes, levies, imposts, charges, withholdings, or liabilities with respect thereto; or any other defenses, offsets, set-offs, claims, counterclaims, credits, or deductions of any kind. Maker’s obligations under this Note are completely independent of all circumstances whatsoever other than as this Note expressly states.

1.      Maturity, Prepayment . The principal and accrued but unpaid interest on this Note shall be due and payable on demand, and if no demand has been made prior thereto, on [________], 2022. Maker may prepay this Note at any time, in whole or in part, without notice, penalty, or premium, provided only that Maker simultaneously pays interest to the date of such prepayment.

2.      Subordination. Payee’s rights under this Note, including rights to the payment of principal or interest, shall be expressly subordinated to the rights of the Lenders and the Agent in the Secured Obligations under Maker’s Fifth Amended and Restated Credit Agreement, dated as of March 16, 2011, among Maker, the financial institutions party thereto, and JPMorgan Chase Bank, National Association, as Administrative Agent, as amended through the date hereof and as the same may be amended, restated, supplemented or otherwise modified from time to time (each capitalized

term used in this Section 2 and not otherwise defined herein shall have the meaning given to it in such Credit Agreement).

3.      Post-Maturity Interest, Etc. Any amount of principal or interest which is not paid when due, whether at maturity or otherwise, shall bear interest from the date when due until said principal or interest amount is paid in full, payable on demand, at the per annum rate of six percent (6.0%).

4.      Waivers . Maker and any endorsers and guarantors of this Note, and all others who may become liable for all or any part of the obligations evidenced by this Note, severally waive presentment for payment, protest, notice of protest, dishonor, notice of dishonor, demand, notice of non-payment, and the benefit of all statutes, ordinances, judicial rulings, and other legal principles of any kind, now or hereafter enacted or in force, affording any right of cure or any right to a stay of execution or extension of time for payment or exempting any property of such person from levy and sale upon execution of any judgment obtained by the holder in respect of this Note. THE PARTIES WAIVE JURY TRIAL IN ANY ACTION TO ENFORCE OR INTERPRET, OR OTHERWISE ARISING FROM, THIS NOTE.

5.      GOVERNING LAW . THIS NOTE AND THE PARTIES’ RIGHTS UNDER THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK NOTWITHSTANDING ANY PRINCIPLES OF CONFLICTS OF LAW.

6.      Severability . If any provision of this Note is invalid or unenforceable, then the other provisions shall remain in full force and effect and shall be liberally construed in favor of Payee.

Maker has executed and delivered this Note as of the Note Date.

EXHIBIT E

Forms of Conveyance Documents

Bill of Sale, Assignment and Assumption (see attached)

BILL OF SALE, ASSIGNMENT AND ASSUMPTION

This Bill of Sale, Assignment and Assumption, dated to be effective as of __________, 2012, (this “Instrument”) is made, executed and delivered by Tesoro Refining and Marketing Company, a Delaware corporation (“TRMC”) in favor of Tesoro Logistics Operations LLC, a Delaware limited liability company (“Operating Company”).

WHEREAS, TRMC and Operating Company, along with other parties, have entered into a Contribution, Conveyance and Assumption Agreement dated as of the date hereof (the “Contribution Agreement”); and

WHEREAS, the execution and delivery of this Instrument by TRMC and Operating Company is a condition to the obligations of all of the parties to the Contribution Agreement to consummate the transactions contemplated thereby.

NOW, THEREFORE, in consideration of the premises above and the mutual agreements set forth in the Contribution Agreement, and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.     Bill of Sale and Assignment of Assets . TRMC hereby sells, transfers, conveys, assigns, grants, bargains, sets over, releases, delivers, vests and confirms unto Operating Company and its successors and assigns, forever, the entire right, title and interest of TRMC, free and clear of all liens and encumbrances of any kind or nature, other than Permitted Liens (as defined in the Contribution Agreement), in and to any and all of the Assets (as defined and described in the Contribution Agreement, which includes the assets set forth on Schedule A attached hereto). Notwithstanding anything contained in this Instrument to the contrary, the Assets shall not include any of the Excluded Assets and Liabilities (both as defined in the Contribution Agreement).

2.     Assignment and Assumption . TRMC hereby assigns to Operating Company all of TRMC’s responsibilities, coverages and liabilities of TRMC in and to the Assets, as described in the Contribution Agreement, and Operating Company hereby agrees to assume, pay, discharge and perform when due all of the those responsibilities, coverages and liabilities. Notwithstanding the foregoing, Operating Company does not assume, or agree to pay, discharge or perform when due, any Excluded Assets and Liabilities (as defined in the Contribution Agreement).

3.     Further Assurances . TRMC hereby covenants and agrees that, at any time and from time to time after the date of this Instrument, at Operating Company's request, TRMC will execute and deliver such documents and instruments of conveyance and transfer as Operating Company may reasonably request to consummate more effectively the contribution of the Assets as contemplated by the Contribution Agreement and to vest in Operating Company title to the Assets transferred under this Instrument.

(a)     Successors in Interest . This Instrument shall be binding upon and inure to the benefit of the parties and their respective permitted successors, permitted assigns and legal representatives.

(b)     Schedule; Number; Gender; Captions . The schedule to this Instrument is hereby incorporated into, and made a part of, this Instrument. Whenever the context so requires, the singular number shall include the plural and the plural shall include the singular, and the gender of any pronoun shall include the other genders. Titles and captions of or in this Instrument are inserted only as a matter of convenience and for reference and in no way affect the scope or intent of this Instrument.

(c)     Applicable Law . This Instrument shall be governed by and construed in accordance with the Laws of the State of Texas.

(d)     Severability . If any provision of this Instrument shall be held invalid, illegal or unenforceable, the validity, legality or enforceability of the other provisions of this Instrument shall not be affected thereby, and there shall be deemed substituted for the provision at issue a valid, legal and enforceable provision as similar as possible to the provision at issue.

(e)     Amendment . This Instrument may not be amended except by an instrument in writing signed by Operating Company and TRMC.

(f)     Counterparts . This Instrument may be executed in any number of counterparts (including facsimile or .pdf copies) with the same effect as if all parties hereto had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF , this Bill of Sale, Assignment and Assumption has been executed by the parties as of the date first above written.

                    

SCHEDULE A TO

BILL OF SALE, ASSIGNMENT AND ASSUMPTION

ASSETS

The Assets shall include (other than the Excluded Assets and Liabilities) all of TRMC’s right, title, interest, responsibilities, coverages and liabilities of TRMC in the Assets (as defined in the Contribution Agreement), including, but not limited to the following:

SECOND AMENDED AND RESTATED OMNIBUS AGREEMENT

This SECOND AMENDED AND RESTATED OMNIBUS AGREEMENT (the “ Agreement ”) is entered into on, and effective as of, November 15, 2012, among Tesoro Corporation, a Delaware corporation (“ Tesoro ”), on behalf of itself and the other Tesoro Entities (as defined herein), Tesoro Refining and Marketing Company, a Delaware corporation (“ Tesoro Refining and Marketing ”), Tesoro Companies, Inc., a Delaware corporation (“ Tesoro Companies ”), Tesoro Alaska Company, a Delaware company (“ Tesoro Alaska ”), Tesoro Logistics LP, a Delaware limited partnership (the “ Partnership ”), and Tesoro Logistics GP, LLC, a Delaware limited liability company (the “ General Partner ”). The above-named entities are sometimes referred to in this Agreement each as a “ Party ” and collectively as the “ Parties .”

R E C I T A L S:

1.    The Parties executed that certain Amended and Restated Omnibus Agreement dated as of April 1, 2012, and amended by that certain Amendment No. 1 to Amended and Restated Omnibus Agreement dated as of September 14, 2012 (together, the “ Original Agreement ”).

2.    The Parties desired by their execution of the Original Agreement to evidence their understanding, as more fully set forth in Article II , with respect to certain business opportunities that the Tesoro Entities (as defined herein) will not engage in for so long as the Partnership is an Affiliate of Tesoro.

3.    The Parties desired by their execution of the Original Agreement to evidence their understanding, as more fully set forth in Article III , with respect to certain indemnification obligations of the Parties to each other.

4.    The Parties desired by their execution of the Original Agreement to evidence their understanding, as more fully set forth in Article IV , with respect to the amount to be paid by the Partnership for the centralized corporate services to be performed by the General Partner and its Affiliates (as defined herein) for and on behalf of the Partnership Group (as defined herein).

5.    The Parties desired by their execution of the Original Agreement to evidence their understanding, as more fully set forth in Article V , with respect to certain maintenance capital and other expenditures to be reimbursed by Tesoro Refining and Marketing to the Partnership Group.

6.    The Parties desired by their execution of the Original Agreement to evidence their understanding, as more fully set forth in Article VI , with respect to the Partnership Group’s right of first offer with respect to the ROFO Assets (as defined herein).

7.    The Parties desired by their execution of the Original Agreement to evidence their understanding, as more fully set forth in Article VII , with respect to the granting of a license from Tesoro to the Partnership Group and the General Partner.

8.    The Parties desired by their execution of the Original Agreement to evidence their understanding, as more fully set forth in Article VIII , with respect to the transfer of the

Represented Employees (as defined herein) from Tesoro Refining and Marketing to the General Partner and the Partnership Group’s right to use certain vehicles leased by the General Partner.

9.     The Parties desire to amend and restate the Original Agreement to allow, among other items, for the application of the terms hereof to additional contributions of assets from the Tesoro Entities to the Partnership Group.

In consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1      Definitions . As used in this Agreement, the following terms shall have the respective meanings set forth below:

“ Administrative Fee ” is defined in Section 4.1 .

“ Affiliate ” is defined in the Partnership Agreement.

“ Annual Environmental Deductible ” is defined in Section 3.7 .

“ Annual ROW Deductible ” is defined in Section 3.7 .

“ Assets ” means all logistics assets, including, but not limited to, all gathering pipelines, transportation pipelines, storage tanks, trucks, truck racks, terminal facilities, wharves, rail tracks, offices and related equipment, real estate and other assets, or portions thereof, conveyed, contributed or otherwise transferred or intended to be conveyed, contributed or otherwise transferred pursuant to a Contribution Agreement to any member of the Partnership Group, or, with respect to a Contribution Agreement, owned by, leased by or necessary for the operation of the business, properties or assets of any member of the Partnership Group, prior to or as of the applicable Closing Date.

“ Closing Date ” means the applicable date for each Contribution Agreement as set forth on Schedule VII to this Agreement.

“ Conflicts Committee ” is defined in the Partnership Agreement.

“ Contribution Agreement ” means the applicable contribution agreement identified on Schedule VII to this Agreement, together with the applicable additional conveyance documents and instruments contemplated or referenced thereunder.

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether (a) through ownership of securities of any class of a Person entitling the holders thereof to vote on a regular basis in the election of members of the board of directors or other governing body of such Person, (b) by contract, or (c) otherwise.

“ Covered Environmental Losses ” is defined in Section 3.1 .

“ Environmental Laws ” means all federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally enforceable requirements and rules of common law now or hereafter in effect, relating to pollution or protection of human health and the environment including, without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other environmental conservation and protection laws, each as amended from time to time.

“ Environmental Permit ” means any permit, approval, identification number, license, registration, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law.

“ First Deadline Date ” means the applicable date for each Contribution Agreement set forth on Schedule VII to this Agreement.

“ Hazardous Substance ” means (a) any substance that is designated, defined or classified as a hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or hazardous substance, or terms of similar meaning, or that is otherwise regulated under any Environmental Law, including, without limitation, any hazardous substance as defined under the Comprehensive Environmental Response, Compensation, and Liability Act, as amended, and (b) petroleum, oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other refined petroleum hydrocarbons.

“ Identification Deadline ” means either (a) the Second Deadline Date, or (b) if a Partnership Change of Control has occurred, the earlier of (i) the First Deadline Date and (ii) the date of the occurrence of a Partnership Change of Control. 

“ Indemnified Party ” means the Partnership Group or the Tesoro Entities, as the case may be, in its capacity as the party entitled to indemnification in accordance with Article III .

“ Indemnifying Party ” means with respect to a Contribution Agreement, the Partnership Group or the Tesoro Indemnifying Parties, as the case may be, in their respective capacity as the party from whom indemnification may be sought in accordance with Article III .

“ License ” is defined in Section 7.1 .

“ Limited Partner ” is defined in the Partnership Agreement.

“ Losses ” means any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent.

“ Marks ” is defined in Section 7.1 .

“ Name ” is defined in Section 7.1 .

“ NuStar Agreement ” means that certain Pipeline Control Center Services Agreement dated December 24, 2002 between Kaneb Pipe Line Operating Partnership, L.P., a Delaware limited partnership, and Tesoro High Plains Pipeline Company, a Delaware corporation.

“ Offer ” is defined in Section 2.3 .

“ Original Agreement ” is defined in the recitals to this Agreement.

“ Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of Tesoro Logistics LP dated as of April 26, 2011.

“ Partnership Change of Control ” means Tesoro ceases to Control the general partner of the Partnership.

“ Partnership Group ” means the Partnership and any of its Subsidiaries, treated as a single consolidated entity.

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

“ Partnership Security ” is defined in the Partnership Agreement.

“ Party ” and “ Parties ” are defined in the introduction to this Agreement.

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

“ Pipeline Rate Regulatory Agencies ” means the applicable federal, state and local governmental or regulatory agencies having jurisdiction over rates to be charged for services provided with respect to the Assets contributed under a Contribution Agreement.

“ Proposed Transaction ” is defined in Section 6.2(a) .

“ Prudent Industry Practice ” means such practices, methods, acts, techniques, and standards as are in effect at the time in question that are consistent with the higher of (a) the standards generally followed by the United States pipeline, terminalling and rail industries and (b) the standards applied or followed by Tesoro or its Affiliates in the performance of similar tasks or projects, or by the Partnership Group or its Affiliates in the performance of similar tasks or projects.

“ Registration Statement ” means the Registration Statement on Form S-1 filed by the Partnership with the United States Securities and Exchange Commission (Registration No. 333-171525), as amended.

“ Represented Employees ” is defined in Section 8.1(a) .

“ Retained Assets ” means with respect to a particular Contribution Agreement, all assets owned by any of the Tesoro Entities that were not directly or indirectly conveyed, contributed or otherwise transferred to the Partnership Group pursuant to that Contribution Agreement or the other documents referred to in that Contribution Agreement, including, for the avoidance of doubt, all gathering pipelines, transportation pipelines, storage tanks, trucks, truck racks, terminal facilities, offices and related equipment, real estate and other related assets, or portions thereof owned by any of the Tesoro Entities and located in Hawaii; provided, however, that once any such assets have been directly or indirectly conveyed, contributed or otherwise transferred to the Partnership Group pursuant to any other Contribution Agreement or the other documents referred to in any other Contribution Agreement, such assets shall not be included in the definition of “Retained Assets” for purposes of the first-referenced Contribution Agreement in this definition with respect to the period on or after the Closing Date under that other Contribution Agreement.

“ ROFO Asset Owner ” means, with respect to a ROFO Asset, the applicable Tesoro Entity set forth opposite such ROFO Asset on Schedule V to this Agreement.

“ ROFO Assets ” means the assets listed on Schedule V to this Agreement.

“ ROFO Notice ” is defined in Section 6.2(a) .

“ ROFO Period ” is defined in Section 6.1(a) .

“ ROFO Response ” is defined in Section 6.2(a) .

“ Second Deadline Date ” means the applicable date for each Contribution Agreement as set forth on Schedule VII to this Agreement.

“ Schedules ” means Schedules I through VII attached to this Agreement, as may be amended and restated pursuant to Section 9.2.

“ Subject Assets ” is defined in Section 2.2(c) .

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

“ Tesoro Entities ” means Tesoro and any Person Controlled, directly or indirectly, by Tesoro other than the General Partner or a member of the Partnership Group; and “ Tesoro Entity ” means any of the Tesoro Entities.

“ Tesoro Indemnifying Parties ” is defined in Section 3.1(a) .

“ Tesoro Indemnified Parties ” is defined in Section 3.4 .

“ Third Deadline Date ” means the applicable date for each Contribution Agreement as set forth on Schedule VII to this Agreement.

“ Transfer ” means to, directly or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of, whether in one or a series of transactions.

ARTICLE II

BUSINESS OPPORTUNITIES

2.1      Restricted Activities . Except as permitted by Section 2.2 , the General Partner and each of the Tesoro Entities shall be prohibited from owning, operating, engaging in, acquiring, or investing in any business that owns or operates crude oil or refined products pipelines, terminals or storage facilities in the United States.

2.2      Permitted Exceptions . Notwithstanding any provision of Section 2.1 to the contrary, the Tesoro Entities may engage in the following activities under the following circumstances:

(a)      the ownership and/or operation of any of the Retained Assets (including replacements or expansions of the Retained Assets);

(b)      the acquisition, ownership or operation of any logistics asset, including, without limitation, any crude oil or refined products pipeline, terminal or storage facility, that is acquired or constructed by a Tesoro Entity and that is (i) within, directly connected to, substantially dedicated to, or an integral part of, any refinery owned, acquired or constructed by a Tesoro Entity or (ii) acquired or constructed by a Tesoro Entity to replace an Asset of the Partnership Group that no longer provides services to any Tesoro Entity due to the occurrence of a force majeure event under a commercial contract between one or more Tesoro Entities and one or more members of the Partnership Group that prevents the Partnership Group from providing services under such commercial contract;

(c)      the acquisition, ownership or operation of any asset or group of related assets used in the activities described in Section 2.1 that are acquired or constructed by a Tesoro Entity after April 26, 2011 (the “ Subject Assets ”) if:

(i)      the fair market value of the Subject Assets (as determined in good faith by the Board of Directors, or other governing body, of the Tesoro Entity that will own the Subject Assets) is less than $5 million at the time of such acquisition by the Tesoro Entity or completion of construction, as the case may be; or

(ii)      in the case of an acquisition or the construction of Subject Assets with a fair market value (as determined in good faith by the Board of Directors, or other governing body, of the Tesoro Entity that will own the Subject Assets) equal to or greater than $5 million at the time of such acquisition by a Tesoro Entity or the completion of construction, as applicable, the Partnership has been offered the opportunity to purchase the Subject Assets in accordance with Section 2.3 and the Partnership has elected not to purchase the Subject Assets; and

(d)      the ownership of equity interests in the General Partner and the Partnership Group.

2.3      Procedures .

(a)      If a Tesoro Entity acquires or constructs Subject Assets as described in Section 2.2(c)(ii) , then not later than six months after the consummation of the acquisition or the completion of construction by such Tesoro Entity of the Subject Assets, as the case may be, the Tesoro Entity shall notify the General Partner in writing of such acquisition or construction and offer the Partnership Group the opportunity to purchase such Subject Assets in accordance with this Section 2.3 (the “ Offer ”). The Offer shall set forth the terms relating to the purchase of the Subject Assets and, if any Tesoro Entity desires to utilize the Subject Assets, the Offer will also include the terms on which the Partnership Group will provide services to the Tesoro Entity to enable the Tesoro Entity to utilize the Subject Assets. As soon as practicable, but in any event within 60 days after receipt of the Offer, the General Partner shall notify the Tesoro Entity in writing that either (i) the General Partner has elected not to cause a Partnership Group Member to purchase the Subject Assets, in which event the Tesoro Entity shall be forever free to continue to own or operate such Subject Assets, or (ii) the General Partner has elected to cause a Partnership Group Member to purchase the Subject Assets, in which event the procedures outlined in the remainder of this Section 2.3 shall apply.

(b)      If the Tesoro Entity and the General Partner are able to agree on the fair market value of the Subject Assets that are subject to the Offer and the other terms of the Offer including, without limitation, the terms, if any, on which the Partnership Group will provide services to the Tesoro Entity to enable the Tesoro Entity to utilize the Subject Assets, within 60 days after receipt by the General Partner of the Offer, a Partnership Group Member shall purchase the Subject Assets for the agreed upon fair market value as soon as commercially practicable after such agreement has been reached and, if applicable, enter into an agreement with the Tesoro Entity to provide services in a manner consistent with the Offer.

(c)      If the Tesoro Entity and the General Partner are unable to agree on the fair market value of the Subject Assets that are subject to the Offer or the other terms of the Offer including, if applicable, the terms on which the Partnership Group will provide services to the Tesoro Entity to enable the Tesoro Entity to utilize the Subject Assets, within 60 days after receipt by the General Partner of the Offer, the Tesoro Entity and the General Partner will engage a mutually agreed upon, nationally recognized investment banking firm to determine the fair market value of the Subject Assets and any other terms on which the Partnership Group and the Tesoro Entity are unable to agree. The investment banking firm will determine the fair market value of the Subject Assets and any other terms on which the Partnership Group and the

Tesoro Entity are unable to agree within 30 days of its engagement and furnish the Tesoro Entity and the General Partner its determination. The fees of the investment banking firm will be split equally between the Tesoro Entity and the Partnership Group. Once the investment banking firm has submitted its determination of the fair market value of the Subject Assets and any other terms on which the Partnership Group and the Tesoro Entity are unable to agree, the General Partner will have the right, but not the obligation to cause a Partnership Group Member to purchase the Subject Assets pursuant to the Offer, as modified by the determination of the investment banking firm. If the General Partner elects to cause a Partnership Group Member to purchase the Subject Assets, then the Partnership Group Member shall purchase the Subject Assets under the terms of the Offer, as modified by the determination of the investment banking firm as soon as commercially practicable after such determination and, if applicable, enter into an agreement with the Tesoro Entity to provide services in a manner consistent with the Offer, as modified by the determination of the investment banking firm.

2.4      Scope of Prohibition . Except as provided in this Article II and the Partnership Agreement, each Tesoro Entity shall be free to engage in any business activity, including those that may be in direct competition with any Partnership Group Member.

2.5      Enforcement . The Tesoro Entities agree and acknowledge that the Partnership Group does not have an adequate remedy at law for the breach by the Tesoro Entities of the covenants and agreements set forth in this Article II , and that any breach by the Tesoro Entities of the covenants and agreements set forth in this Article II would result in irreparable injury to the Partnership Group. The Tesoro Entities further agree and acknowledge that any Partnership Group Member may, in addition to the other remedies which may be available to the Partnership Group, file a suit in equity to enjoin the Tesoro Entities from such breach, and consent to the issuance of injunctive relief under this Agreement.

ARTICLE III

INDEMNIFICATION

(a)      Subject to Section 3.2 and Section 3.7 and with respect to Assets conveyed, contributed or otherwise transferred pursuant to a Contribution Agreement, each of the Tesoro Entities set forth on Schedule VII attached to this Agreement with respect to that Contribution Agreement (the “ Tesoro Indemnifying Parties ”), severally and not jointly, shall indemnify, defend and hold harmless the Partnership Group from and against any Losses suffered or incurred by the Partnership Group, directly or indirectly, or as a result of any claim by a third party, by reason of or arising out of:

(i)      any violation or correction of violation of Environmental Laws;

(ii)      any event, condition or environmental matter associated with or arising from the ownership or operation of the Assets (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets at non-Asset locations) including, without limitation, (A) the cost and expense of any investigation, assessment,

evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws, (B) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense of any environmental or toxic tort pre-trial, trial, or appellate legal or litigation support work;

(iii)      any event, condition or environmental matter or legal action pending as of the Closing Date against the Tesoro Entities, a true and correct summary of which with respect to Assets conveyed, contributed or otherwise transferred pursuant to a particular Contribution Agreement is described on Schedule I to this Agreement; and

(iv)      any event, condition or environmental matter associated with or arising from the Retained Assets, whether occurring before or after the Closing Date;

provided , however , that with respect to any violation under Section 3.1(a)(i) or any event, condition or environmental matter included under Section 3.1(a)(ii) that is associated with the ownership or operation of the Assets conveyed, contributed or otherwise transferred pursuant to a particular Contribution Agreement, the Tesoro Indemnifying Parties will be obligated to indemnify the Partnership Group only to the extent that such violation, event, condition or environmental matter (x) occurred before the Closing Date for that Contribution Agreement under then-applicable Environmental Laws and (y)(i) such violation, event, condition or environmental matter is set forth on Schedule II to this Agreement or (ii) Tesoro is notified in writing of such violation, event, condition or environmental matter prior to the applicable Identification Deadline ( Sections 3.1(a)(i) through (iv) collectively, with respect to that Contribution Agreement being “ Covered Environmental Losses ”).

(b)      The Partnership Group shall indemnify, defend and hold harmless the Tesoro Entities from and against any Losses suffered or incurred by the Tesoro Entities, directly or indirectly, or as a result of any claim by a third party, by reason of or arising out of:

(i)      any violation or correction of violation of Environmental Laws associated with or arising from the ownership or operation of the Assets; and

(ii)      any event, condition or environmental matter associated with or arising from the ownership or operation of the Assets (including, but not limited to, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets at non-Asset locations) including, without limitation, (A) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws, (B) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense for any environmental or toxic tort pre-trial, trial, or appellate legal or litigation support work;

and regardless of whether such violation under Section 3.1(b)(i) or such event, condition or environmental matter included under Section 3.1(b)(ii) occurred before or after the Closing Date, in each case, to the extent that any of the foregoing are not Covered Environmental Losses for

which the Partnership Group is entitled to indemnification from the Tesoro Indemnifying Parties under this Article III without giving effect to the Annual Environmental Deductible.

3.2      Right of Way Indemnification . Subject to Section 3.7 and any applicable limitations set forth in Schedule VII with respect to Assets conveyed, contributed or otherwise transferred pursuant to a particular Contribution Agreement, and with respect to Assets conveyed, contributed or otherwise transferred pursuant to a particular Contribution Agreement, each of the Tesoro Indemnifying Parties, severally and not jointly, shall indemnify, defend and hold harmless the Partnership Group from and against any Losses suffered or incurred by the Partnership Group by reason of or arising out of (a) the failure of the applicable Partnership Group Member (or other party specified on Schedule VII) to be the owner of such valid and indefeasible easement rights or fee ownership or leasehold interests in and to the lands on which any crude oil or refined products pipeline or related pump station, wharf, storage tank, terminal, rail tracks or truck rack or any related facility or equipment conveyed or contributed to the applicable Partnership Group Member on the applicable Closing Date is located as of the Closing Date, and such failure renders the Partnership Group liable to a third party or unable to use or operate the Assets in substantially the same manner that the Assets were used and operated by the applicable Tesoro Entity immediately prior to the Closing Date; (b) the failure of the applicable Partnership Group Member to have the consents, licenses and permits necessary to allow any such pipeline referred to in clause (a) of this Section 3.2 to cross the roads, waterways, railroads and other areas upon which any such pipeline is located as of the Closing Date, and such failure renders the Partnership Group liable to a third party or unable to use or operate the Assets in substantially the same manner that the Assets were used and operated by the applicable Tesoro Entity immediately prior to the Closing Date; and (c) the cost of curing any condition set forth in clause (a) or (b) of this Section 3.2 that does not allow any Asset to be operated in accordance with Prudent Industry Practice, in each case to the extent that Tesoro is notified in writing of any of the foregoing prior to the Identification Deadline.

3.3      Pipeline Control Center Services Indemnification and Related Matters . With respect to the Assets contributed pursuant to the “Initial Contribution Agreement” set forth on Schedule VII , Tesoro Refining and Marketing shall indemnify, defend and hold harmless the Partnership Group from and against any Losses suffered or incurred by the Partnership Group during the period commencing on the Closing Date and ending on April 26, 2016, in excess of $15,000 per month as a result of (a) the non-renewal or failure to extend the terms of the NuStar Agreement beyond December 31, 2012, (b) an increase in the service fee described in Section 2.1 of the NuStar Agreement or (c) the cost and expense of any third-party service provider or operator or any Tesoro Entity providing control and monitoring functions (including, but not limited to pipeline scheduling, leak detection, reconciliation of oil transfer tickets, data reporting, customer support, SCADA systems support, satellite communication, compliance and regulatory services, general technical support and operations, maintenance and emergency response manuals) on or for the High Plains pipeline system, provided , however , that Tesoro Refining and Marketing shall not be required to indemnify, defend and hold harmless the Partnership Group from and against any Losses suffered or incurred by the Partnership Group pursuant to this Section 3.3 in excess of $2,500,000. At any time before April 26, 2016, the Partnership Group may request in writing that Tesoro Refining and Marketing construct a control room that is adequate to enable the Partnership Group to control and monitor the High Plains pipeline system in accordance with Prudent Industry Practice for the sole purposes of providing such services. In

the event of such request, Tesoro Refining and Marketing shall, within 30 days of receipt of such request, notify the Partnership Group of (i) its intent to, and shall use commercially reasonable efforts to, promptly construct or (ii) its intent to, and shall, bear the cost of constructing, a control room, subject to a maximum amount of $2,500,000 less any amounts previously paid to the Partnership Group under this Section 3.3.

3.4      Represented Employees . With respect to Assets conveyed, contributed or otherwise transferred pursuant to a particular Contribution Agreement, and if applicable, the General Partner shall indemnify, defend and hold harmless each of the Tesoro Entities set forth on Schedule VII attached to this Agreement with respect to that Contribution Agreement (the “ Tesoro Indemnified Parties ”) from and against any Losses suffered or incurred by the Tesoro Indemnified Parties by reason of or arising out of the transfer of the Represented Employees to the General Partner pursuant to Section 8.1 and the employment of the Represented Employees by the General Partner, including any Losses suffered or incurred resulting from actions taken, or liabilities incurred by the Tesoro Indemnified Parties with respect to the Represented Employees in connection with applicable collective bargaining agreements covering such Represented Employees.

(a)      In addition to and not in limitation of the indemnification provided under Sections 3.1(a) , 3.2 , and 3.3 and with respect to a respective Contribution Agreement, each of the Tesoro Indemnifying Parties, severally and not jointly, shall indemnify, defend, and hold harmless the Partnership Group from and against any Losses suffered or incurred by the Partnership Group by reason of or arising out of (i) events and conditions associated with the ownership or operation of the Assets and occurring before the applicable Closing Date (other than Covered Environmental Losses, which are provided for under Sections 3.1 , and those Losses provided for under Section 3.2 ) to the extent that Tesoro is notified in writing of any of the foregoing prior to the Third Deadline Date, (ii) any pending (as of the applicable Closing Date) legal actions against the Tesoro Entities set forth on Schedule III to this Agreement, (iii) events and conditions associated with the Retained Assets and whether occurring before or after the Closing Date, (iv) the failure to obtain any necessary consent from the Pipeline Rate Regulatory Agencies, if applicable, and (v) all federal, state and local income tax liabilities attributable to the ownership or operation of the Assets prior to the Closing Date, including under Treasury Regulation Section 1.1502-6 (or any similar provision of state or local law), and any such income tax liabilities of the Tesoro Entities that may result from the consummation of the formation transactions for the Partnership Group and the General Partner occurring on or prior to the Closing Date.

(b)      In addition to and not in limitation of the indemnification provided under Section 3.1(b) or 3.4 or the Partnership Agreement, the Partnership Group shall indemnify, defend, and hold harmless the Tesoro Entities from and against any Losses suffered or incurred by the Tesoro Entities by reason of or arising out of events and conditions associated with the ownership or operation of the Assets and occurring after the Closing Date (other than Covered Environmental Losses which are provided for under Section 3.1 ), unless such indemnification would not be permitted under the Partnership Agreement by reason of one of the provisos contained in Section 7.7(a) of the Partnership Agreement.

(a)      The Indemnified Party agrees that within a reasonable period of time after it becomes aware of facts giving rise to a claim for indemnification under this Article III , it will provide notice thereof in writing to the Indemnifying Party, specifying the nature of and specific basis for such claim.

(b)      The Indemnifying Party shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the Indemnified Party that are covered by the indemnification under this Article III , including, without limitation, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such claim or any matter or any issues relating thereto; provided , however , that no such settlement shall be entered into without the consent of the Indemnified Party unless it includes a full release of the Indemnified Party from such claim.

(c)      The Indemnified Party agrees to cooperate in good faith and in a commercially reasonable manner with the Indemnifying Party, with respect to all aspects of the defense of any claims covered by the indemnification under this Article III , including, without limitation, the prompt furnishing to the Indemnifying Party of any correspondence or other notice relating thereto that the Indemnified Party may receive, permitting the name of the Indemnified Party to be utilized in connection with such defense, the making available to the Indemnifying Party of any files, records or other information of the Indemnified Party that the Indemnifying Party considers relevant to such defense, the making available to the Indemnifying Party of any employees of the Indemnified Party and the granting to the Indemnifying Party of reasonable access rights to the properties and facilities of the Indemnified Party; provided , however , that in connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party and further agrees to maintain the confidentiality of all files, records, and other information furnished by the Indemnified Party pursuant to this Section 3.6 . In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in connection with the defense of any claims covered by the indemnification set forth in this Article III ; provided , however , that the Indemnified Party may, at its own option, cost and expense, hire and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party informed as to the status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense.

(d)      In determining the amount of any Losses for which the Indemnified Party is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance proceeds realized by the Indemnified Party, and such correlative insurance benefit shall be net of any incremental insurance premium that becomes due and payable by the Indemnified Party as a result of such claim and (ii) all amounts recovered by the Indemnified Party under contractual indemnities from third Persons.

(a)      The Tesoro Indemnifying Parties shall not, in any calendar year, be obligated to indemnify, defend and hold harmless the Partnership Group for a Covered Environmental Loss under Section 3.1(a)(ii) until such time as the aggregate amount of all Covered Environmental Losses in such calendar year exceeds the amount listed on Schedule VIII under “Annual Environmental Deductible” (the “ Annual Environmental Deductible ”), at which time the Tesoro Indemnifying Parties shall be obligated to indemnify the Partnership Group for the amount of Covered Environmental Losses under Section 3.1(a)(ii) that are in excess of the Annual Environmental Deductible that are incurred by the Partnership Group in such calendar year. The Tesoro Indemnifying Parties shall not, in any calendar year, be obligated to indemnify, defend and hold harmless the Partnership Group for any individual Loss under Section 3.2 until such time as the aggregate amount of all Losses under Section 3.2 that are in such calendar year exceeds the amount listed on Schedule VIII under “Annual ROW Deductible” (the “ Annual ROW Deductible ”), at which time the Tesoro Indemnifying Parties shall be obligated to indemnify the Partnership Group for all Losses under Section 3.2 in excess of the Annual ROW Deductible that are incurred by the Partnership Group in such calendar year.

(b)      With respect to Sections 3.1 , 3.2 and 3.5(a) , each of the Tesoro Indemnifying Parties shall only be required to indemnify the Partnership Group for Covered Environmental Losses under Section 3.1 , Losses under Section 3.2 or Losses under Section 3.5(a) incurred in connection with or related to Assets conveyed, contributed or otherwise transferred to the Partnership Group by such Tesoro Indemnifying Party .

(c)      For the avoidance of doubt, there is no monetary cap on the amount of indemnity coverage provided by any Indemnifying Party under this Article III .

(d)      NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT SHALL ANY PARTY’S INDEMNIFICATION OBLIGATION HEREUNDER COVER OR INCLUDE CONSEQUENTIAL, INDIRECT, INCIDENTAL, PUNITIVE, EXEMPLARY, SPECIAL OR SIMILAR DAMAGES OR LOST PROFITS SUFFERED BY ANY OTHER PARTY ENTITLED TO INDEMNIFICATION UNDER THIS AGREEMENT.

ARTICLE IV

CORPORATE SERVICES

(a)      Tesoro agrees to provide, and agrees to cause its Affiliates to provide, on behalf of the General Partner, for the Partnership Group’s benefit all of the centralized corporate services that Tesoro and its Affiliates have traditionally provided in connection with the Assets including, without limitation, the general and administrative services listed on Schedule IV to this Agreement. As consideration for such services, the Partnership will pay Tesoro an administrative fee (the “ Administrative Fee ”) of $2.5 million per year, payable in equal monthly installments on or before the tenth business day of each month, commencing in the first month

following the Closing Date. The Administrative Fee for the 2011 fiscal year will be prorated based on the number of days from the Closing Date to December 31, 2011. Tesoro may increase or decrease the Administrative Fee on each April 26 of each subsequent year, commencing on April 26, 2013, by a percentage equal to the change in the Consumer Price Index — All Urban Consumers, U.S. City Average, Not Seasonally Adjusted over the previous 12 calendar months or to reflect any increase in the cost of providing centralized corporate services to the Partnership Group due to changes in any law, rule or regulation applicable to Tesoro or the Partnership Group, including any interpretation of such laws, rules or regulations.

(b)      At the end of each calendar year, the Partnership will have the right to submit to Tesoro a proposal to reduce the amount of the Administrative Fee for that year if the Partnership believes, in good faith, that the centralized corporate services performed by Tesoro and its Affiliates for the benefit of the Partnership Group for the year in question do not justify payment of the full Administrative Fee for that year. If the Partnership submits such a proposal to Tesoro, Tesoro agrees that it will negotiate in good faith with the Partnership to determine if the Administrative Fee for that year should be reduced and, if so, the amount of such reduction. If the Parties agree that the Administrative Fee for that year should be reduced, then Tesoro shall promptly pay to the Partnership the amount of any reduction for that year.

(c)      The Partnership Group shall reimburse Tesoro for all other direct or allocated costs and expenses incurred by Tesoro and its Affiliates on behalf of the Partnership Group, including, but not limited to the following; provided, however, that the costs and expenses described in subsections (i) through (vi) below shall not apply with respect to employees of the General Partner, Tesoro or its Affiliates that are providing the services listed on Schedule IV:

(i)      salaries of employees of the General Partner, Tesoro or its Affiliates, to the extent, but only to the extent, such employees perform services for the Partnership Group, provided that for employees that do not devote all of their business time to the Partnership Group, such expenses shall be based on the annual weighted average of time spent and number of employees devoting services to the Partnership Group;

(ii)      except as otherwise provided in Section 4.1(c)(vi) below, the cost of employee benefits relating to employees of the General Partner, Tesoro or its Affiliates, including 401(k), pension, bonuses and health insurance benefits (but excluding Tesoro stock-based compensation expense), to the extent, but only to the extent, such employees perform services for the Partnership Group, provided that for employees that do not devote all of their business time to the Partnership Group, such expenses shall be based on the annual weighted average of time spent and number of employees devoting their services to the Partnership Group

(iii)      any expenses incurred or payments made by Tesoro or its Affiliates for insurance coverage with respect to the Assets or the business of the Partnership Group;

(iv)      all expenses and expenditures incurred by Tesoro or its Affiliates as a result of the Partnership becoming and continuing as a publicly traded entity, including, but not limited to, costs associated with annual and quarterly reports, independent auditor fees,

partnership governance and compliance, registrar and transfer agent fees, tax return and Schedule K-1 preparation and distribution, legal fees and independent director compensation;

(v)      all sales, use, excise, value added or similar taxes, if any, that may be applicable from time to time with respect to the services provided by Tesoro and its Affiliates to the Partnership Group pursuant to Section 4.1(a) ;

(vi)      any severance or similar amounts (“ Severance Amounts ”) due to the President of the General Partner or the Vice President, Operations of the General Partner in the event of a Change of Control (or similar term, in each case as defined in the applicable management stability agreement) of Tesoro under the terms of their respective management stability agreements with Tesoro, provided that such reimbursement shall be based on the percentage of time spent by such employee on the business of the Partnership Group during the last completed payroll period immediately preceding the date of such Change of Control. Notwithstanding anything in this Agreement to the contrary, in no event will the Partnership Group reimburse Tesoro for, or otherwise in any way be responsible for, (A) any Severance Amounts due to any employee of the General Partner, Tesoro or its Affiliates (other than the President of the General Partner or the Vice President, Operations of the General Partner) in the event of a Change of Control (or similar term, in each case as defined in the applicable Employment Agreement) of Tesoro, or (B) any Tesoro stock-based compensation expense related to accelerated vesting of Tesoro equity awards. For the purposes of this Section 4.1(c)(vi) , the term “ Employment Agreement ” shall include any employment agreement, management stability agreement or similar agreement between Tesoro and any employee of the General Partner, Tesoro or its Affiliates; and

(vii)      any other expenses listed on Schedule IV and identified as applicable to this clause (vii).

Such reimbursements shall be made on or before the tenth business day of the month following the month such costs and expenses are incurred, other than reimbursements solely related to bonuses for employees of the General Partner, which shall be reimbursed on or prior to the last business day of the month that such bonuses are paid. For the avoidance of doubt, the costs and expenses set forth in Section 4.1(c) shall be paid by the Partnership Group in addition to, and not as a part of or included in, the Administrative Fee.

ARTICLE V

CAPITAL AND OTHER EXPENDITURES

5.1      Reimbursement of Maintenance Capital and Other Expenditures . Tesoro Refining and Marketing will either reimburse the Partnership or reimburse the General Partner and the General Partner will reimburse the Partnership, as applicable, on a dollar-for-dollar basis, without duplication, for each of the following:

(a)      during the period commencing on April 26, 2011 and ending on the Second Deadline Date, expenses incurred by the Partnership Group solely in order to comply with vapor recovery or combustion and spill containment requirements associated with the Assets;

(b)      expenses incurred by the Partnership Group for repairs and maintenance to storage tanks included as part of the Assets and expenses that are made solely in order to comply with current minimum standards under (i) the U.S. Department of Transportation’s Pipeline Integrity Management Rule 49 CFR 195.452 and (ii) American Petroleum Institute (API) Standard 653 for Aboveground Storage Tanks, but only if and to the extent that such repairs and maintenance are identified before, during or as a result of the first scheduled API 653 inspections that occur after the Closing Date (and this clause (b) shall apply only to the Initial Contribution Agreement, the Amorco Contribution Agreement and the Long Beach Contribution Agreement, all listed on Schedule VII); and

(c)      those certain capital and expense projects related to the Assets and described on Schedule VI to this Agreement.

ARTICLE VI

RIGHT OF FIRST OFFER

(a)      Each ROFO Asset Owner hereby grants to the Partnership Group a right of first offer until April 26, 2021 (the “ ROFO Period ”) on any ROFO Asset set forth next to such ROFO Asset Owner’s name on Schedule V to this Agreement to the extent that such ROFO Asset Owner proposes to Transfer any ROFO Asset (other than to an Affiliate who agrees in writing that such ROFO Asset remains subject to the provisions of this Article VI and such Affiliate assumes the obligations under this Article VI with respect to such ROFO Asset) or enter into any agreement to do any of the foregoing during the ROFO Period.

(b)      The Parties acknowledge that any Transfer of ROFO Assets pursuant to the Partnership Group’s right of first offer is subject to the terms of all existing agreements with respect to the ROFO Assets; provided , however , that Tesoro represents and warrants that, to its knowledge after reasonable investigation, there are no terms in such agreements that would materially impair the rights granted to the Partnership Group pursuant to this Article VI with respect to any ROFO Asset.

(a)      In the event a ROFO Asset Owner proposes to Transfer any applicable ROFO Asset (other than to an Affiliate) during the ROFO Period (a “ Proposed Transaction ”), such ROFO Asset Owner shall, prior to entering into any such Proposed Transaction, first give notice in writing to the Partnership Group (the “ ROFO Notice ”) of its intention to enter into such Proposed Transaction. The ROFO Notice shall include any material terms, conditions and details as would be necessary for a Partnership Group Member to make a responsive offer to enter into the Proposed Transaction with the applicable ROFO Asset Owner, which terms, conditions and details shall at a minimum include any terms, condition or details that such ROFO Asset Owner would propose to provide to non-Affiliates in connection with the Proposed Transaction. The Partnership Group shall have 60 days following receipt of the ROFO Notice to propose an offer to enter into the Proposed Transaction with such ROFO Asset Owner (the “ ROFO Response ”). The ROFO Response shall set forth the terms and conditions (including,

without limitation, the purchase price the applicable Partnership Group Member proposes to pay for the ROFO Asset and the other terms of the purchase including, if requested by a Tesoro Entity, the terms on which the Partnership Group Member will provide services to the Tesoro Entity to enable the Tesoro Entity to utilize the applicable ROFO Asset) pursuant to which the Partnership Group would be willing to enter into a binding agreement for the Proposed Transaction. The decision to issue the ROFO Response and the terms of the ROFO Response shall be subject to approval by the Conflicts Committee. If no ROFO Response is delivered by the Partnership Group within such 60-day period, then the Partnership Group shall be deemed to have waived its right of first offer with respect to such ROFO Asset.

(b)      Unless the ROFO Response is rejected pursuant to written notice delivered by the applicable ROFO Asset Owner to the applicable Partnership Group Member within 60 days of the delivery of the ROFO Response, such ROFO Response shall be deemed to have been accepted by the applicable ROFO Asset Owner and such ROFO Asset Owner shall enter into an agreement with the applicable Partnership Group Member providing for the consummation of the Proposed Transaction upon the terms set forth in the ROFO Response and, if applicable, the Partnership Group Member will enter into an agreement with the Tesoro Entity setting forth the terms on which the Partnership Group Member will provide services to the Tesoro Entity to enable the Tesoro Entity to utilize the ROFO Asset. Unless otherwise agreed between the applicable Tesoro Entity and Partnership Group Member, the terms of the purchase and sale agreement will include the following:

(i)      the Partnership Group Member will deliver the agreed purchase price (in cash, Partnership Securities, an interest-bearing promissory note, or any combination thereof);

(ii)      the applicable ROFO Asset Owner will represent that it has title to the ROFO Assets that is sufficient to operate the ROFO Assets in accordance with their intended and historical use, subject to all recorded matters and all physical conditions in existence on the closing date for the purchase of the applicable ROFO Asset, plus any other such matters as the Partnership Group Member may approve. If the Partnership Group Member desires to obtain any title insurance with respect to the ROFO Asset, the full cost and expense of obtaining the same (including but not limited to the cost of title examination, document duplication and policy premium) shall be borne by the Partnership Group Member;

(iii)      the applicable ROFO Asset Owner will grant to the Partnership Group Member the right, exercisable at the Partnership Group Member’s risk and expense prior to the delivery of the ROFO Response, to make such surveys, tests and inspections of the ROFO Asset as the Partnership Group Member may deem desirable, so long as such surveys, tests or inspections do not damage the ROFO Asset or interfere with the activities of the applicable ROFO Asset Owner;

(iv)      the closing date for the purchase of the ROFO Asset shall occur no later than 180 days following receipt by ROFO Asset Owner of the ROFO Response pursuant to Section 6.2(a) ;

(v)      the applicable ROFO Asset Owner and Partnership Group Member shall use commercially reasonable efforts to do or cause to be done all things that may be reasonably necessary or advisable to effectuate the consummation of any transactions contemplated by this Section 6.2(b) , including causing its respective Affiliates to execute, deliver and perform all documents, notices, amendments, certificates, instruments and consents required in connection therewith; and

(vi)      neither the applicable ROFO Asset Owner nor the applicable Partnership Group Member shall have any obligation to sell or buy the applicable ROFO Asset if any of the consents referred to in Section 6.1(b)(v) has not been obtained.

(c)      If the Partnership Group has not timely delivered a ROFO Response as specified above with respect to a Proposed Transaction that is subject to a ROFO Notice, the applicable ROFO Asset Owner shall be free to enter into a Proposed Transaction with any third party on terms and conditions no more favorable to such third party than those set forth in the ROFO Notice. If a ROFO Response with respect to any Proposed Transaction is rejected by the applicable ROFO Asset Owner, such ROFO Asset Owner shall be free to enter into a Proposed Transaction with any third party (i) on terms and conditions (excluding those relating to price) that are not more favorable in the aggregate to such third party than those proposed in respect of the Partnership Group in the ROFO Response and (ii) at a price equal to no less than 100% of the price offered by the applicable Partnership Group Member in the ROFO Response to such ROFO Asset Owner.

ARTICLE VII

LICENSE OF NAME AND MARK

7.1      Grant of License . Upon the terms and conditions set forth in this Article VII , Tesoro hereby grants and conveys to each of the entities currently or hereafter comprising a part of the Partnership Group a nontransferable, nonexclusive, royalty-free right and license (“ License ”) to use the name “Tesoro” (the “ Name ”) and any other trademarks owned by Tesoro which contain the Name (collectively, the “ Marks ”).

7.2      Ownership and Quality . The Partnership agrees that ownership of the Name and the Marks and the goodwill relating thereto shall remain vested in Tesoro both during the term of this License and thereafter, and the Partnership further agrees, and agrees to cause the other members of the Partnership Group, never to challenge, contest or question the validity of Tesoro’s ownership of the Name and Marks or any registration thereto by Tesoro. In connection with the use of the Name and the Mark, the Partnership and any other member of the Partnership Group shall not in any manner represent that they have any ownership in the Name and the Marks or registration thereof except as set forth herein, and the Partnership, on behalf of itself and the other members of the Partnership Group, acknowledge that the use of the Name and the Marks shall not create any right, title or interest in or to the Name and the Mark, and all use of the Name and the Marks by the Partnership or any other member of the Partnership Group, shall inure to the benefit of Tesoro. The Partnership agrees, and agrees to cause the other members of the Partnership Group, to use the Name and Marks in accordance with such quality standards established by Tesoro and communicated to the Partnership from time to time, it being understood that the products and services offered by the members of the Partnership Group

immediately before the Closing Date are of a quality that is acceptable to Tesoro and justifies the License.

7.3      Termination . The License shall terminate upon a termination of this Agreement pursuant to Section 9.4 .

ARTICLE VIII

REPRESENTED EMPLOYEES; VEHICLE LEASES

8.1      Transfer of Represented Employees . The Parties acknowledge and agree that certain Tesoro Refining and Marketing employees then covered by collective bargaining agreements with Tesoro Refining and Marketing existing as of a Closing Date (the “ Represented Employees ”) have been or will be transferred to and shall become employees of the General Partner on or before the end of the fiscal year in which that Closing Date occurred. The Parties agree to cooperate and shall take all action necessary to effectuate such transfer and shall comply with the terms of the applicable collective bargaining agreements with respect to the Represented Employees.

8.2      Vehicle Leases . The Parties acknowledge and agree that the members of the Partnership Group shall have the right to use any vehicles leased by the General Partner for use in the operation of the Partnership Group’s business.

ARTICLE IX

MISCELLANEOUS

9.1      Choice of Law; Submission to Jurisdiction . This Agreement shall be subject to and governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federal courts in the State of Texas and to venue in San Antonio, Texas.

9.2      Notice . All notices or requests or consents provided for by, or permitted to be given pursuant to, this Agreement must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by delivering such notice in person or by facsimile to such Party. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by facsimile shall be effective upon actual receipt if received during the recipient’s normal business hours or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below or at such other address as such Party may stipulate to the other Parties in the manner provided in this Section 9.2 .

If to the Tesoro Entities:

Tesoro Corporation

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

Attn: Charles S. Parrish

Facsimile: (210) 745-4494

If to the Partnership Group:

Tesoro Logistics LP

c/o Tesoro Logistics GP, LLC, its General Partner

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

Attn: Charles S. Parrish

Facsimile: (210) 745-4494

9.3      Entire Agreement . This Agreement together with the Schedules attached hereto (which are incorporated herein by reference) constitute the entire agreement of the Parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein.

9.4      Termination of Agreement . This Agreement, other than the provisions set forth in Article III hereof, may be terminated by Tesoro or the Partnership upon a Partnership Change of Control. For the avoidance of doubt, the Parties’ indemnification obligations under Article III shall survive the termination of this Agreement in accordance with their respective terms.

9.5      Amendment or Modification . This Agreement may be amended or modified from time to time only by the written agreement of all the Parties hereto. Each such instrument shall be reduced to writing and shall be designated on its face an “Amendment” or an “Addendum” to this Agreement.

9.6      Assignment . No Party shall have the right to assign its rights or obligations under this Agreement without the consent of the other Parties hereto; provided , however , that the Partnership may make a collateral assignment of this Agreement solely to secure working capital financing for the Partnership.

9.7      Counterparts . This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile transmission or in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart hereof.

9.8      Severability . If any provision of this Agreement shall be held invalid or unenforceable by a court or regulatory body of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect.

9.9      Further Assurances . In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

9.10      Rights of Limited Partners . The provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no Limited Partner of the Partnership shall have the right, separate and apart from the Partnership, to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement.

9.11      Amendment and Restatement . This Agreement amends and restates the Original Agreement in its entirety and the Parties agree that the terms and provisions of this Agreement replace the terms and provisions of the Original Agreement, which is no longer in force, as of the date hereof.

9.12      Amendment of Schedules . The Parties may amend and restate the Schedules at any time without otherwise amending or restating this Agreement by the execution by all of the Parties of a cover page to the amended Schedules in the form attached hereto as Exhibit A. Such amended and restated Schedules shall replace the prior Schedules as of the date of execution of the cover page and shall be incorporated by reference into this Agreement for all purposes.

IN WITNESS WHEREOF , the Parties have executed this Agreement on, and effective as of, the Closing Date.

TESORO CORPORATION

Daniel R. Romasko

Executive Vice President, Operations

TESORO REFINING AND MARKETING COMPANY

Daniel R. Romasko

Executive Vice President, Operations

TESORO COMPANIES, INC.

Daniel R. Romasko

Executive Vice President, Operations

TESORO ALASKA COMPANY

Daniel R. Romasko

Executive Vice President, Operations

TESORO LOGISTICS LP

its general partner

Phillip M. Anderson

President

TESORO LOGISTICS GP, LLC

Phillip M. Anderson

President

EXHIBIT A

FORM OF COVER PAGE FOR
AMENDMENT AND RESTATEMENT OF SCHEDULES
TO SECOND AMENDED AND RESTATED OMNIBUS AGREEMENT

A Second Amended and Restated Omnibus Agreement was executed as of November __, 2012 (the “Second Amended and Restated Omnibus Agreement”), among Tesoro Corporation, on behalf of itself and the other Tesoro Entities, Tesoro Refining and Marketing Company, Tesoro Companies, Inc., Tesoro Alaska Company, Tesoro Logistics LP and Tesoro Logistics GP, LLC. Capitalized terms not otherwise defined in this document shall have the terms set forth in the Second Amended and Restated Omnibus Agreement.

The Parties agree that the Schedules are hereby amended and restated in their entirety as of the date hereof to be as attached hereto. Pursuant to Section 9.12 of the Second Amended and Restated Omnibus Agreement, such amended and restated Schedules shall replace the prior Schedules as of the date hereof and shall be incorporated by reference into the Second Amended and Restated Omnibus Agreement for all purposes.

Executed as of _______________, 20___.

Schedule I

Pending Environmental Litigation

For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :

None.

For Long Beach Contribution Agreement listed on Schedule VII :

The soil and groundwater on the southern central portion of the site near the 24 inch crude oil line have been impacted with hydrocarbons from a release from the line first observed in September 2011. The California Regional Water Quality Control Board issued an Investigative Order dated September 30, 2011 and to date all requirements of the order have been met. Additional investigative or remedial activities may be required.

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

Schedule II

Environmental Matters

For Initial Contribution Agreement set forth on Schedule VII :

1. Anchorage #1 Terminal soil and groundwater have been impacted by gasoline and diesel releases from previously buried pipelines. The site is considered characterized and is currently undergoing removal of product from the water table, groundwater treatment, and long-term monitoring.

2. Anchorage #2 Terminal soil and groundwater have been impacted by gasoline releases occurring prior to Tesoro’s purchase of the facility. The site is considered characterized and is currently undergoing groundwater monitoring and treatment. Off-site groundwater investigations are scheduled for 2012.

3. Stockton Terminal soil and groundwater have been impacted by gasoline and diesel releases from pipelines and/or product storage tanks. The site is considered substantially characterized and is undergoing groundwater treatment and groundwater monitoring. Off-site groundwater impacts are commingled with neighboring petroleum storage terminals.

4. Burley Terminal groundwater was impacted by gasoline releases occurring prior to Tesoro’s purchase of the facility. Groundwater impacts were commingled with neighboring petroleum storage terminals. Hydrocarbon concentrations in groundwater samples do not exceed previously established target levels for groundwater and surface water protection. Regulatory closure is pending.

5. Wilmington Sales Terminal soil and groundwater have been impacted by gasoline releases occurring prior to Tesoro’s purchase of the facility. Groundwater investigation and monitoring is on-going. Tesoro is indemnified by the previous owner for Investigation and remediation obligations.

6. Salt Lake City Terminal soil and groundwater have been impacted by gasoline and diesel releases from pipelines and/or product storage tanks occurring prior to Tesoro’s purchase of the facility. The site is considered characterized and is currently undergoing removal of product from the water table and long-term monitoring. There are no known soil or groundwater impacts at the Northwest Crude Oil tank farm.

7. The Stockton Terminal emits volatile organic compounds (VOCs) below “major source” emission criteria. In 2010, the San Joaquin Air Quality Management District announced it is reducing its major source threshold. When the Stockton Terminal expands its operations or increases throughput, the potential to emit VOC will increase and the Stockton terminal will become subject to regulation as a major source. This will require a Title V Air Operating Permit. In addition, the Stockton facility will be required to install an automated continuous emission monitor at a cost of approximately $75,000.

Schedule II

Environmental Matters
(continued)

For Amorco Contribution Agreement set forth on Schedule VII :

1.     The soil and groundwater on the site of the Tankage, as defined in the Amorco Contribution Agreement, have been impacted by methyl tertiary butyl ether releases from previously buried pipelines. The site is considered characterized and is currently undergoing removal of methyl tertiary butyl ether from the water table, groundwater treatment, and long-term monitoring.

2.     Any environmental violation or contamination due to SHPL, as defined in the Amorco Contribution Agreement, being underground prior to the Closing Date.

For Long Beach Contribution Agreement listed on Schedule VII :

1.     Any environmental violation or contamination, as defined in the Long Beach Contribution Agreement, prior to the Closing Date.

2.     Any anomalies in the Pipeline System that require repair as discovered by the first internal line inspection of any portion of the Pipeline System for which TRMC is notified in writing prior to the First Deadline Date.

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

Schedule III

Pending Litigation

For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :

None.

For Long Beach Contribution Agreement listed on Schedule VII :

None.

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

Schedule IV

Section 4.1(a): General and Administrative Services

Section 4.1(c)(vii): Other Reimbursable Expenses

For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :

None.

For Long Beach Contribution Agreement listed on Schedule VII :

Upon the effectiveness of the BAUTA (as defined in the Long Beach Contribution Agreement) and only to the extent actually paid by TRMC, all oil spill response costs, including, but not limited to, any costs for oil spill response services provided by the Marine Preservation Association or the Marine Spill Response Corporation that Tesoro incurs related to the Assets included in the Long Beach Contribution Agreement.

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

Schedule VI

Existing Capital and Expense Projects

For Initial Contribution Agreement listed on Schedule VII :

1.     That certain project related to AFE # 102120001, which provides for side stream ethanol blending into all gasoline at the Salt Lake City terminal by adding truck ethanol unloading capability, utilizing the existing premium day tank for ethanol and delivering premium direct from the Salt Lake City refinery tankage. New ethanol truck unloading facilities will be installed. New Pumps will also be installed for delivering higher volumes of premium gasoline from the Salt Lake City refinery to the Salt Lake City terminal. An ethanol injection skid will be installed along with piping changing to the existing Salt Lake City terminal to allow the ethanol to be injected in the gasoline stream.

2.     That certain project number 2010113058 at the Mandan refinery, to update additive equipment to allow the offering of Shell additized gasoline.

3.     That certain project related to AFE # 107120005, which provides for ratio ethanol blending into gasoline on the rack at the Burley, Idaho Terminal by adding truck ethanol unloading capability, adding tankage for ethanol storage and installing new ethanol meters associated with each gasoline loading arm. New ethanol truck unloading facilities will also be installed.

4.     That certain project number 2007000263 at the Mandan refinery, to update the truck rack sprinkler system.

5.     That certain project number 2010113017 at the Mandan refinery, to upgrade the rack blending hydraulic system to reduce/eliminate inaccurate blends at the load rack.

6.     That certain project number 2011433001 at the Mandan refinery, to move the JP8 to new bay and have three bays for loading product across the rack.

7.     That certain project number 2011432602 at the Stockton terminal, install a continuous vapor emission monitor on the vapor recovery unit for compliance with air quality regulations.

For Amorco Contribution Agreement listed on Schedule VII :

1.     That certain project related to AFE# 097100014 and AFE# 107100014 at the Amorco terminal, which provide repairs and upgrades to the wharf regarding MOTEMS standards.

2.     That certain project related to AFE# 112100001 at the Amorco terminal, which installs a jet mixer system for crude lab testing.

3.     All other major expense projects that are within the scope of open Work Orders as of the Effective Date.

Schedule VI

Existing Capital and Expense Projects
(continued)

For Long Beach Contribution Agreement listed on Schedule VII :

1.     That certain project related to AFE# 072104079 titled “UG Piping – LBT” related to underground pipeline repairs at the Terminal. In addition, any subsequent new projects to address the same specific under-ground piping issues per AFE# 072104079 (i.e. a second phase UG Piping project) that would occur on or before the end of year 2015.

2     That certain project related to the TCM# 2009002129 titled “LBT, B84A & 86 Loading Arm Replacements” which repairs or replaces the loading arms at the Terminal and any related AFE project that will occur upon final project approval to substantial repair or replace the loading arms at the Terminal.

3.     Any remaining costs of those certain projects related to the leak detection on the Terminal and Terminal Pipelines which are substantially complete and include AFE# 107110002, AFE# 117110001, AFE# 117110003, AFE# 117110002, and AFE# 125120002.

4.     Any cost that may be incurred to adjust diesel fuel tank vents near light fixtures after a review is conducted and if action is deemed necessary.

5.     Costs related to substantial repair or replacement project scheduled for 2012 and 2013 for the pipeline segments in the portion of the Southern California Edison right-of-way area immediately adjacent to the marine terminal to address corrosion.

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

1.     Any capital costs or expenses that may be incurred for the installation of a custody transfer meter.

2.     Any remaining costs and commitments related to AFE #11210041 for the Anacortes Rail Facility.

Schedule VIII

Indemnification Deductibles

Annual Environmental Deductible

$600,000

Annual ROW Deductible

$600,000

Schedule IX

Special Indemnification Provisions

For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :

Addition to Right of Way Indemnification . As of the Closing Date for the Amorco Contribution Agreement, Tesoro Refining and Marketing shall own the leasehold rights in the “Wharf Lease” issued by the California State Lands Commission and the easements, rights of way and permits for the “SHPL,” all as defined in the Amorco Contribution Agreement, and the Partnership Group shall provide operational, maintenance and management services with respect to such Assets pursuant to the MTUTA. Title to Wharf Lease rights and the SHPL are scheduled to be contributed to the Partnership Group at a later date, as set forth in the Amorco Contribution Agreement. The Right of Way Indemnification set forth in Section 3.2 herein applies to the extent that a Loss arises with respect to a Partnership Group Member's interests under the MTUTA before title to such Assets is contributed to the Partnership Group Member or with respect to a Partnership Group Member's failure to become the owner of such valid and indefeasible easement rights or fee ownership or leasehold interests in such Assets after they are finally contributed to the Partnership Group as contemplated in the Amorco Contribution Agreement. The Closing Date provided for in this Agreement shall be as set forth above, without regard to when title to these Assets is finally contributed to a Partnership Group Member.

For Long Beach Contribution Agreement listed on Schedule VII :

Addition to Right of Way Indemnification . As of the Closing Date for the Long Beach Contribution Agreement, Tesoro Refining and Marketing shall own the leasehold rights in the “Terminal Lease” issued by the Port of Long Beach and the easements, rights of way and permits for the “Terminal Pipelines,” all as defined in the Long Beach Contribution Agreement, and the Partnership Group shall provide operational, maintenance and management services with respect to such Assets pursuant to the Long Beach Operating Agreement, as defined in the Long Beach Contribution Agreement. Title to Terminal Lease rights and the Terminal Pipelines are scheduled to be contributed to the Partnership Group at a later date, as set forth in the Long Beach Contribution Agreement. The Right of Way Indemnification set forth in Section 3.2 herein applies to the extent that a Loss arises with respect to a Partnership Group Member's interests under the BAUTA before title to such Assets is contributed to the Partnership Group Member or with respect to a Partnership Group Member's failure to become the owner of such valid and indefeasible easement rights or fee ownership or leasehold interests in such Assets after they are finally contributed to the Partnership Group as contemplated in the Long Beach Contribution Agreement. The Closing Date provided for in this Agreement shall be as set forth above, without regard to when title to these Assets is finally contributed to a Partnership Group Member.

Schedule IX

Special Indemnification Provisions
(continued)

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

Other . Notwithstanding any other provisions of (i) this Second Amended and Restated Omnibus Agreement, (ii) the Anacortes Track Use and Throughput Agreement among the General Partner, the Partnership, Tesoro Logistics LP (the “Operating Company”) and Tesoro Refining and Marketing, (iii) the Anacortes Mutual Track Use Agreement among the General Partner, the Partnership, the Operating Company and Tesoro Refining and Marketing, and (iv) the Ground Lease between Tesoro Refining and Marketing and the Operating Company, all dated as of November 15, 2012, the parties hereto agree that the indemnification provisions of any of those agreements shall control over any of the other agreements to the extent the subject matter of the indemnification is specifically referenced or provided for in that agreement.  For the avoidance of doubt, the indemnification provisions of this Second Amended and Restated Omnibus Agreement shall be subordinate to the respective indemnification provisions of each of the other agreements referenced above.

ANACORTES TRACK USE

AND THROUGHPUT AGREEMENT

This ANACORTES TRACK USE AND THROUGHPUT AGREEMENT (this “ Agreement ”) is dated effective as of the Commencement Date (as defined below in Section 3), by and between Tesoro Logistics Operations LLC, a Delaware limited liability company (“ TLO ”), and for purposes of Section 23 only, Tesoro Logistics GP, LLC, a Delaware limited liability company (“ General Partner ”) and Tesoro Logistics LP, a Delaware limited partnership (“ Partnership ”), on the one hand, and Tesoro Refining and Marketing Company, a Delaware corporation (“ TRMC ”), on the other hand.

RECITALS

WHEREAS , TRMC owns a crude oil refinery located in Anacortes, Skagit County, Washington (the " Anacortes Refinery ");

WHEREAS , TRMC sources its crude oil supply for the Anacortes Refinery from various suppliers and transports such supply through various modes of transportation, including marine vessel, pipeline, truck, and railcar;

WHEREAS , TLO owns and operates a four-track rail unloading facility adjacent to the Anacortes Refinery, which includes (i) two receiving and two departing tracks capable of handling 100-railcar unit trains (collectively, “ unit trains , and each individually, a “ unit train ”) and manifest railcars (as defined below); (ii) two short track spurs for storage and repair of railcars; (iii) pumps, piping and other ancillary equipment to allow for the direct offloading of crude oil (and other crude petroleum products, as agreed between the parties on a case-by-case basis) into TRMC’s pipelines connecting its storage facilities at the Anacortes Refinery; (iv) one flat bed pick up truck; and (v) gates and fencing surrounding the unloading facility (collectively, and as more specifically depicted on Schedule I attached hereto, the “ Anacortes Rail Unloading Facility ”);

WHEREAS , TRMC desires and has requested that TLO (i) use the Anacortes Rail Unloading Facility for the delivery of TRMC’s crude oil by unit train to the Anacortes Refinery, (ii) receive, switch, connect and disconnect, store and provide minor repairs to TRMC’s railcars, (iii) offload and throughput TRMC’s crude oil from TRMC’s unit trains into storage at the Anacortes Refinery, (iv) reassemble and return the unit trains to the location indicated by TRMC; and (v) provide TRMC with certain ancillary services with respect to the immediately foregoing, all subject to and upon the terms and conditions of this Agreement; and

WHEREAS , TRMC and TLO desire to enter this Agreement to memorialize the terms of their commercial relationship.

NOW, THEREFORE, in consideration of the covenants and obligations contained herein, the Parties (as defined below) to this Agreement hereby agree as follows:

SECTION 1 DEFINITIONS

Capitalized terms used throughout this Agreement shall have the meanings set forth below, unless otherwise specifically defined herein.

“ Agreement ” has the meaning set forth in the Preamble.

“ Anacortes Rail Unloading Facility ” has the meaning set forth in the Recitals.

“ Anacortes Refinery ” has the meaning set forth in the Recitals.

“ API ” means the American Petroleum Institute.

“ Applicable Law ” means any applicable statute, law, regulation, ordinance, rule, determination, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, requirement, or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect.

“ ASTM ” means the American Society for Testing and Materials.

“ Barrel ” means a volume equal to 42 U.S. gallons or 231 cubic inches, each at 60 degrees Fahrenheit under one atmosphere of pressure, net of basic sediment and water.

“ BNSF ” means the BNSF Railway Company.

“ BNSF Agreements ” means that certain (i) Locomotive and Telemetry Device Use and Liability Agreement by and between BNSF and TLO dated September 1, 2012 (“ LULA ”), as wholly assigned to TLO on the date hereof, and (ii) BNSF Railway Company Industry Track Agreement by and between BNSF and TLO dated August 31, 2012 (“ ITA ”), as partially assigned to TLO on the date hereof.

“ Business Day ” means a day, other than a Saturday or Sunday, on which banks in New York, New York are open for the general transaction of business.

“ Commencement Date ” has the meaning set forth in Section 3 .

“ Confidential Information ” means all confidential, proprietary or non-public information of a Party, whether set forth in writing, orally or in any other manner, including all non-public information and material of such Party (and of companies with which such Party has entered into confidentiality agreements) that another Party obtains knowledge of or access to, including non-public information regarding products, processes, business strategies and plans, customer lists, research and development programs, computer programs, hardware configuration information, technical drawings, algorithms, know-how, formulas, processes, ideas, inventions (whether patentable or not), trade secrets, schematics and other technical, business, marketing and product development plans, revenues, expenses, earnings projections, forecasts, strategies, and other non-public business, technological, and financial information.

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

“ CPI-U ” ” means Consumer Price Index for all Urban Consumers, Not Seasonally Adjusted, U.S. City Average, for All Items (Series ID CUUR0000SA0, CUUS0000SA0) as published by the Bureau of Labor Statistics of the United States Department of Labor.

“ Crude Oil ” means crude petroleum, synthetic crude oil, topped crude oil, condensate, and all associated blends thereof.

“ Deemed Credit Amount ” has the meaning set forth in Section 5(c).

“ Environmental Liabilities ” means all obligations, responsibilities, liabilities, costs and expenses caused by, arising from, incurred in connection with, relating in any way to or otherwise required or incurred to achieve or maintain compliance with, Health, Safety and Environmental Laws, as the same are in effect from time to time, including (A) fines and penalties or other criminal sanctions arising by reason of violations of Health, Safety and Environmental Laws; (B) any responsibility for any litigation, threatened litigation or claims arising under or by reason of actual or alleged violations of Health, Safety and Environmental Laws; (C) third party bodily injury or wrongful death claims arising under or by reason of actual or alleged violations of Health, Safety and Environmental Laws; (D) liabilities and obligations with respect to third party property damage claims relating to, arising under, or by reason of actual or alleged violations of Health, Safety and Environmental Laws; and (E) any and all obligations, responsibilities, liabilities, costs and expenses caused by, arising from, incurred in connection with or relating in any way to clean-up, restoration or remediation of any property under Health, Safety and Environmental Laws;

“ Excess Throughput Volume Fee ” has the meaning set forth in Section 5(a)(ii).

“ Extension Period ” has the meaning set forth in Section 4 .

“ Force Majeure ” means circumstances not reasonably within the control of TLO and which, by the exercise of due diligence, TLO is unable to prevent or overcome that prevent performance of TLO’s obligations, including: acts of God, strikes, lockouts or other industrial disturbances, wars, riots, fires, floods, storms, orders of courts or Governmental Authorities, explosions, terrorist acts, breakage, accident to machinery, storage tanks or lines of pipe and inability to obtain or unavoidable delays in obtaining material or equipment and similar events. A Party’s inability economically to perform its obligations hereunder does not constitute an event of Force Majeure.

“ Force Majeure Notice ” has the meaning set forth in Section 21(a) .

“ Force Majeure Period ” has the meaning set forth in Section 21(a) .

“ General Partner ” has the meaning set forth in the Preamble.

“ Governmental Authority ” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body, port authority, federal or state railroad administration or commission or other authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

“ Health, Safety and Environmental Laws ” means any and all past or present local, state, and federal laws, principles of common law, statutes, ordinances, regulations, rules, orders, permits, standards, or requirements (including consent decrees, judicial decisions, judgments, injunctions and administrative orders issued or approved thereunder), together with all related amendments and implementing regulations and all common law, pertaining to or regulating pollution, environmental protection, health and safety of persons, pipeline safety, natural resource damages, conservation of resources, wildlife, waste management, the use, storage, generation, production, treatment, emission, discharge, remediation, removal, disposal or transport or any other activity related to a toxic or hazardous substance, waste or material (including crude petroleum and its fractions or derivatives thereof), or any other environmental matter, including without limitation: the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. Section 9601 et. seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et. seq.; the Toxic Substances

Control Act, as amended, 15 U.S.C. Section 2601 et. seq.; the Clean Air Act, as amended, 42 U.S.C. Section 7401 et. seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et. seq.; the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. Section 3009(f) et. seq.; the Emergency Planning and Community Right-to-Know Act of 1986, as amended, 42 U.S.C. Section 11001 et seq.; the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Section 651 et. seq.; and the Hazardous Liquid Pipeline Safety Act, as amended, 49 U.S.C. Section 60101 et. seq.

“ manifest railcar ” has the meaning set forth in Section 6.

“ Minimum Throughput Volume ” means an aggregate volume of 1,216,667 Barrels of Products per Month offloaded and throughput at the Anacortes Rail Unloading Facility (40,000 Barrels per day multiplied by 365 days divided by 12), provided , however , that the Minimum Throughput Volume during the Month in which the Commencement Date occurs shall be prorated in accordance with the ratio of the number of days, including and following the Commencement Date, in such Month to the total number of days in such Month.

“ Month ” means a calendar month, except that the first Month under this Agreement shall begin on the Commencement Date and end on the last day of that calendar month.

“ MTVF ” has the meaning set forth in Section 5(a)(i) .

“ Off-Spec Product ” means Product that fails to meet TLO’s minimum specifications.

“ Omnibus Agreement ” means that certain Second Amended and Restated Omnibus Agreement dated as of November 15, 2012, as amended from time to time, by and among Tesoro Corporation, Tesoro Companies, Inc., TRMC, Tesoro Alaska Company, the General Partner, the Partnership and TLO.

“ Partnership ” has the meaning set forth in the Preamble.

“ Partnership Change of Control ” means Tesoro Corporation ceases to Control the General Partner.

“ Party ” or “ Parties ” means that each of TLO and TRMC is a “Party” and collectively are the “Parties” to this Agreement.

“ Person ” means any individual, partnership, limited partnership, joint venture, corporation, limited liability company, limited liability partnership, trust, unincorporated organization or Governmental Authority or any department or agency thereof.

“ Product ” or “ Products ” means Crude Oil and such other refined petroleum products as are mutually agreed upon by the Parties.

“ Purchase First Offer Period ” has the meaning set forth in Section 23(e) .

“ Purchase Right of First Refusal ” has the meaning set forth in Section 23(e) .

“ railcar ” means a unit train railcar and/or a manifest railcar, as the particular context or situation requires.

“ Receiving Party Personnel ” has the meaning set forth in Section 27(d) .

“ Services ” has the meaning set forth in Section 13(a) .

“ Shortfall Credit ” has the meaning set forth in Section 9(a) .

“ Term ” and “ Initial Term ” each have the meaning set forth in Section 4 .

“ Termination Notice ” has the meaning set forth in Section 21(b) .

“ TLO ” has the meaning set forth in the Preamble.

“ TLO Indemnitee ” and “ TLO Indemnitees ” have the meaning set forth in Section 19(b) .

“ TRMC ” has the meaning set forth in the Preamble.

“ TRMC Indemnitee ” and “ TRMC Indemnitees ” have the meaning set forth in Section 19(a) .

“ TTA First Offer Period ” has the meaning set forth in Section 22(e) .

“ TTA Right of First Refusal ” has the meaning set forth in Section 22(e) .

“ unit train ” has the meaning set forth in the Recitals.

“ Waste ” means any spent or remnant commercial chemical products, previously of beneficial use, or other inherently waste-like material; provided, however, that any residual Product that retains, in the judgment of the Parties, a beneficial use, including recycling, oil recovery and re-refining, is not Waste unless it is designated for disposal.

Subject to the terms and conditions of this Agreement, the BNSF Agreements, TLO’s operating permits, the limitations of the Anacortes Rail Unloading Facility and all Applicable Law, TLO shall use the Anacortes Rail Unloading Facility to provide Services for TRMC’s nominated unit trains for the unloading of Products to be delivered to the Anacortes Rail Unloading Facility by TRMC, and each Month during the Term, TRMC shall nominate and deliver for offload and throughput at the Anacortes Rail Unloading Facility the Minimum Throughput Volume, subject to reduction as set forth herein.

The “ Commencement Date ” will be November 15, 2012.

Commencing on the Commencement Date, the initial term of this Agreement shall be for a period of ten (10) years until the anniversary of the Commencement Date in 2022 (the “ Initial Term ”), provided, however, that TRMC may, at its sole option, extend the Initial Term for up to two (2) renewal terms of five (5) years each (each, an “ Extension Period ”) by providing written notice of its intent to TLO no less than ninety (90) days prior to the end of the Initial Term or the then-current Extension Period. The Initial Term and any extensions of this Agreement as provided above, shall be referred to herein as the “ Term ”.    

(a)     Offload and Throughput Fees . TRMC agrees to pay to TLO the following fees for all Barrels of Product offloaded and throughput at Anacortes Rail Unloading Facility:

(i)    A Minimum Throughput Volume Fee (the “ MTVF ”) of $1,861,501 per Month (which is $1.53/Barrel multiplied by the Minimum Throughput Volume), subject to escalation as provided in Section 8 below; plus

(ii)    a $0.75 per Barrel offloading and throughput fee for Product volumes in excess of the Minimum Throughput Volume (“ Excess Throughput Volume Fee ”), subject to escalation as provided in Section 8 below.

(b)      MTVF Relief . During any Month that the Anacortes Rail Unloading Facility is unavailable to receive any of TRMC’s unit trains on a day in which such unit train is scheduled to have access to the Anacortes Rail Unloading Facility, for any reason other than TRMC’s actions, including without limitation, TLO’s actions, Force Majeure, and the actions of a Governmental Authority, and such unavailability prevents TRMC from offloading and throughputting, then the Minimum Throughput Volume and the MTVF for such Month will be reduced in proportion to the number of days in such Month when TRMC’s unit trains were prevented from having access to the Anacortes Rail Unloading Facility as a result of the Anacortes Rail Unloading Facility being unavailable, divided by the total days in such Month; provided, however, that the foregoing reduction to the Minimum Throughput Volume and MTVF shall not exceed the actual reduction in volume of, and offload and throughput fees charged for, such Product handled by TLO.

(c)     Offset for Deemed Credit Amount . During any Month where (i) TRMC does not schedule any railcars for the use of, or otherwise fails to offload and throughput Product at, the Anacortes Rail Unloading Facility, and/or (ii) TRMC has temporarily or permanently suspended operations at the Anacortes Refinery, such that in either or both cases, the number of railcars to be offloaded and throughput during such Month would be zero (0), then TRMC shall be credited $70,000 per month (the “ Deemed Credit Amount ”), and the Deemed Credit Amount shall be offset against the MTVF for such Month.

During any Month under the Term of this Agreement, TRMC may request that the Services include receipt of manifest railcars, in addition to, or in lieu of, unit train railcars nominated by TRMC for offload and throughput at the Anacortes Rail Unloading Facility; provided that all nominations made by TRMC are made in accordance with Annex B , including without limitation, providing sufficient advance notice. For purposes of this Agreement, a “ manifest railcar ” means any single unit railcar in a shipment of Product to the Anacortes Rail Unloading Facility for which BNSF would owe payment to TLO under Section 1.3 of the ITA. Upon receipt of such request, TLO may consent, such consent not to be unreasonably withheld, to accept such manifest railcars proposal by TRMC. TLO shall not be required to consent to any requests that would require Services to be performed that are not authorized under existing agreements with BNSF or other third party contractors, provided that TLO shall make commercially reasonable efforts to negotiate suitable arrangements with such contractors to authorize such Services. TLO shall also not be required to consent to any proposal that would require new, expanded or modified facilities and equipment. Fees for any and all Product volumes received at the Anacortes Rail Unloading Facility via manifest railcars shall be at the same per barrel rate specified in Section 5(a)(i) above for the Minimum Throughput Volume (as escalated from time to time pursuant to Section 8 ), plus any applicable

surcharge to reimburse TLO for any incremental costs or expenses incurred by TLO in connection with the offload and throughput of such manifest railcars and volumes. Any and all Product volumes received during a Month at the Anacortes Rail Unloading Facility via manifest railcars shall be credited against TRMC’s Minimum Throughput Volume for such Month.

(a)    TRMC shall reimburse TLO for, or TLO shall be permitted to charge TRMC an additional per Barrel surcharge for any and all of the following:

(i)      The actual cost of any capital expenditures that TLO agrees to make upon TRMC’s written request;

(ii)      The costs that TLO incurs in complying with any new Applicable Laws that affect the Anacortes Rail Unloading Facility or services provided by TLO to TRMC hereunder; provided , that (A) compliance by TLO with any such new law or regulation requires substantial unanticipated capital expenditures by TLO, (B) TLO has made good faith efforts to mitigate the effect of any such law or regulation and (C) TLO has negotiated in good faith with TRMC in order to agree on the level of any such surcharge;

(iii)      All taxes (other than ad valorem taxes, property taxes, income taxes, gross receipt taxes, payroll taxes and similar taxes) that TLO specifically incurs on TRMC’s behalf for the services TLO provides to TRMC hereunder, if such reimbursement is not prohibited by law;

(iv)      Subject to Sections 14(d) and 18(b) , any demurrage assessed by BNSF or under Applicable Law and paid directly by TLO;

(v)      All costs incurred in connection with (1) any laboratory tests or specific railcar sampling requested by TRMC under Section 10 , and (2) the detention and storage of railcars, pursuant to Section 13 (d) ;

(vi)      The actual cost of any surcharges incurred by TLO in connection with the offload of and throughput from manifest railcars pursuant to Section 6 above; and

(vii)      All incremental costs or surcharges incurred by TLO from third party contractors in connection with the unloading of and throughput from any unit train that is not comprised of the full complement of one (100) hundred railcars; provided that such incremental costs or surcharges may only be assessed when, in a given Month, TRMC nominates (A) three or more unit trains with less than ninety (90) railcars in each such unit train, or (B) one or more unit trains with less than eighty (80) railcars in each such unit train.

(b)      If TRMC objects to the level of any surcharge under items (i) through (iii) above, then TLO shall impose a surcharge for those expenditures as it deems, in its sole discretion, to be mandatory. The period of time over which such charges are recovered shall be determined by TLO in light of the remaining period in the Term of this Agreement and the projected future deliveries of Product to the Anacortes Rail Unloading Facility. In such case, if TLO determines that all or some costs to which TRMC has objected could be reduced or mitigated by changes in operation of the Anacortes Rail Unloading Facility, including taking a portion of the Anacortes Rail Unloading Facility out of service, reducing the capacity of the Anacortes Rail Unloading Facility, or restricting use of the Anacortes Rail Unloading Facility, then TRMC may request that TLO do so, rather than imposing a surcharge to

maintain service at a particular level, and in that event, TLO shall make reasonable efforts to accommodate such request; provided that TLO shall not be required to take any actions that it believes in good faith might result in a violation of any operating requirement and such reduction in capacity shall not be a Force Majeure event or other basis for any reduction in TRMC’s Minimum Throughput Volume or for a reduction in any fees except surcharges avoided by such reduction in capacity.

Starting July 1, 2013, all fees in Section 5(a) and the Deemed Credit Amount in Section 5(c) above shall automatically be increased on the first day of July for each year of the Term, by a percentage equal to the greater of zero or the positive change in the CPI-U for the prior calendar year, rounded to the nearest one-tenth of one percent.

(a)     Monthly Shortfall Credit . If, during any Month, the actual volume of Barrels offloaded and throughput by TRMC are less than the Minimum Throughput Volume, then TRMC shall nevertheless pay to TLO the MTVF. Upon Payment of the MTVF, TRMC shall receive a “ Shortfall Credit ” calculated as the difference between the Minimum Throughput Volume less the actual total volumes received during such month, multiplied by the sum of the MTVF, on a per Barrel basis.

(b)      Monthly Reconciliation . Actual volumes of Barrels offloaded and throughput at the Anacortes Rail Unloading Facility are to be determined Monthly, based upon receipts during the Month (as measured by custody transfer meter) and credited towards the Minimum Throughput Volume in such Month; provided, however, that during the start-up period of the Anacortes Rail Unloading Facility and until custody transfer metering becomes fully operational, TLO will utilize TRMC’s loading ticket receipts to measure throughput and TLO will reconcile to actual railcars received at the Anacortes Rail Unloading Facility during that Month. The Shortfall Credit shall be credited as follows:

(i)    the dollar amount of any Shortfall Credit included in the Monthly invoice will be posted as a credit to TRMC’s account and may be applied against amounts owed by TRMC for throughput volumes in excess of the Minimum Throughput Volume during any of the succeeding three (3) Months; and

(ii)     any portion of the Shortfall Credit that is not used by TRMC during the succeeding three (3) Months will expire at the end of said three (3) Month period relating to the respective credit and be reset to zero.

(c)     Fees & Costs Calculation . At the end of each Month, TLO will calculate the total fees and costs that TRMC incurred for offloading and throughput of Barrels at the Anacortes Rail Unloading Facility during such Month, as follows:

(i)    the MTVF; plus

(ii)     the Excess Throughput Volume Fees attributable to such Month; less

(iii)    any applicable Shortfall Credits to TRMC, but not to exceed the Excess Throughput Volume Fees for such Month; less

(iv)    the Deemed Credit Amount, if applicable; plus

(v)    any surcharges, reimbursements or pass-through costs for such Month pursuant to Section 7 .

(d)     Invoices . TLO will invoice TRMC Monthly, providing its calculations of all applicable items set forth above. All amounts set forth above shall be due and payable no later than ten (10) days after TRMC’s receipt of TLO’s invoice. The invoiced amount shall be for the items described above and other charges during the prior Month. Any past due payments owed by either Party shall accrue interest, payable on demand, at the lesser of (i) the rate of interest announced publicly by JPMorgan Chase Bank, in New York, New York, as JPMorgan Chase Bank’s prime rate (which Parties acknowledge and agree is announced by such bank and used by the Parties for reference purposes only and may not represent the lowest or best rate available to any of the customers of such bank or the Parties), plus four percent (4%), and (ii) the highest rate of interest (if any) permitted by Applicable Law, from the due date of the payment through the actual date of payment.

(e)     Disputed Amounts . If TRMC reasonably disputes any amount invoiced by TLO, TRMC shall pay the amount of the invoice when due and provide TLO with written notice stating the nature of the dispute prior to ninety (90) days after the due date of the invoice. TRMC and TLO shall use reasonable commercial diligence to resolve disputes in good faith and in a timely manner. All portions of the disputed amount determined to be owed TRMC shall be refunded to the TRMC within ten (10) days of the dispute resolution.  

(i)     Product Testing/Quality Analysis . Upon request and at the sole expense of TRMC (such expense to be negotiated at the time of such request and to include applicable labor and fees), TLO shall provide TRMC a laboratory report for each Product delivery by TRMC or TRMC’s supplier. TLO will not be obligated to receive Off-Spec Product for offload and throughput at the Anacortes Rail Unloading Facility, nor will TLO be obligated to accept Product that fails to meet the quality specifications set forth in any arrival notice. Further, TLO will not perform any Product quality analysis on behalf of TRMC unless TRMC so requests in writing. Any such quality analyses, including any costs for independent inspectors appointed by TRMC, are for TRMC’s account. TRMC or its designated independent inspector may observe TLO in any measurement or sampling.

(ii)     Off-Spec Product . TRMC at its sole cost and expense shall be responsible for all damages of any kind, in addition to commodity or Waste removal and cleaning costs resulting from the introduction of Off-Spec Product into the Anacortes Rail Unloading Facility. TRMC shall remove any Off-Spec Product or reimburse TLO for any and all expenses incurred in removing any such Off-Spec Product received into the Anacortes Rail Unloading Facility.

(iii)     Minimum Specifications . TLO retains at all times under the Term of this Agreement the right to establish and/or change TLO’s minimum specifications for any Product introduced at the Anacortes Rail Unloading Facility with thirty (30) days advance notice to TRMC. Changes will not affect previously accepted nominated volumes unless immediate action is required by Applicable Law. TLO’s minimum specifications shall allow the throughput of the grades and approximate qualities of Product specified in Annex A .

(iv)     Other Products . If TRMC wishes to offload and throughput Products outside of the minimum specifications noted above, TRMC must send a written request evidencing such desire sixty (60) days prior to any such potential offload and throughput, and TLO may consent to such request in its discretion, such consent not to be unreasonably withheld.

(b)     Product Warranty . TRMC warrants to TLO that all Product tendered by or for the account of TRMC for offload and throughput at the Anacortes Rail Unloading Facility will conform to TLO’s minimum specifications for such Product. TLO may rely upon the specifications and representations of TRMC as to Product quality.

(c)     Material Safety Data Sheet . TRMC will provide TLO with a Material Safety Data Sheet and any other information required by any federal, state, or local authority for all Product offloaded and throughput at the Anacortes Rail Unloading Facility. TRMC shall provide its customers with the appropriate information on all Products offloaded and throughput at the Anacortes Rail Unloading Facility.

All quantities of Products received at the Anacortes Rail Unloading Facility via railcar shall be measured by custody transfer meter in net Barrels using the applicable API and ASTM or equivalent standards; provided, however, that during the start-up period of the Anacortes Rail Unloading Facility, and at any time thereafter that custody transfer metering is not operational, all quantities of Products received via railcar at the Anacortes Rail Unloading Facility shall be determined based upon the loading tickets received by TRMC at the place of loading for TRMC’s railcars. Such loading tickets shall then be reconciled with the volumes in the actual railcars, as applicable, received at the Anacortes Rail Unloading Facility. All quantities shall be adjusted to net gallons at 60° F in accordance with ASTM D-1250 Petroleum Measurement Tables, or latest revisions thereof. Meters and temperature probes shall be calibrated according to applicable API standards. TRMC shall provide TLO with all reasonable documentation with respect to the volumes offloaded and throughput at the Rail Unloading Facility, including but not limited to, inspection reports, meter tickets or other similar documentation within three (3) Business Days of completion of unit train discharge.

(a)     Handling and Disposal of Waste . TLO and TRMC will comply with Applicable Law regarding the handling of Product and the disposal of any Waste. TRMC shall pay or reimburse TLO for removal from the Anacortes Rail Unloading Facility of any Waste or residuals, including all costs associated with any liabilities arising from such Waste or residual, to the extent such Waste and/or residuals are introduced, created or caused by TRMC or its Crude Oil at the Anacortes Rail Unloading Facility. TLO shall not be responsible whatsoever for any Waste or residuals caused or created in transit to the Anacortes Rail Unloading Facility. During such removal, the fees and charges set forth in this Agreement will remain in effect. Unless stated otherwise herein, TLO shall be responsible for any fines, penalties, claims, violations, or similar obligations related to TLO’s operation of the Anacortes Rail Unloading Facility.

(b)     Hazardous Materials—Reporting . TLO will report its handling of all hazardous materials for TRMC as required by Applicable Law. TRMC will accurately and properly represent the nature of all such materials to TLO. TRMC agrees to reimburse TLO for any reasonable, direct charges that TLO may be required to pay for the handling of Product, excluding penalties, fines or excess charges resulting from material errors or omissions in TLO’s reporting as required by Applicable Law.

(a)     Services . Subject to and in accordance with prudent industry practices, TLO shall offload and throughput TRMC’s Products at the Anacortes Rail Unloading Facility and provide such other services set forth for in this Agreement as well as the following: (i) unit train switching operations; (ii) connection and disconnection of unit train railcars; (iii) reassembly of unit trains; (iv) maintenance and repair of all offloading equipment; (v) provision and maintenance of the equipment necessary to perform the services contemplated by this Agreement; (vi) minor maintenance and repair of unit train railcars; and (vii) operation of the Anacortes Rail Unloading Facility (collectively, the “ Services ”).  TLO will timely provide TRMC with a copy of any regulatory compliance report filed by TLO regarding TRMC’s Product upon request by TRMC.  TLO will provide the labor and supervision necessary to perform the Services contemplated by this Agreement. TLO will maintain the Anacortes Rail Unloading Facility according to prudent industry practice and will use reasonable care in performing the Services consistent with customary industry practices.

(b)     Hours . The Anacortes Rail Unloading Facility will be available on 24/7/365 basis, as needed, except as provided for in Section 14(c) or in the event of a Force Majeure.

(c)     Volume Gains and Losses . TLO shall have no obligation to measure volume gains and losses and shall have no liability whatsoever for normal course physical losses that may result from the offloading and throughput of the Products at the Anacortes Rail Unloading Facility, except if such losses are caused by the gross negligence or willful misconduct of TLO. TRMC will bear any volume gains and losses that may result from the offloading and throughput of the Products at the Anacortes Rail Unloading Facility.

(d)     Major Damage to Unit Train Railcars . To the extent railcars are damaged and require immediate and/or major repair, and cannot be safely unloaded at the Anacortes Rail Unloading Facility, such railcars will be moved to the bad order track at TRMC’s sole risk and expense. TLO will notify TRMC in writing as soon as reasonably practical that damaged railcars have been moved to the bad order track. Once on the bad order track, TLO will use commercially reasonable efforts to unload and repair or remove such damaged railcars at TRMC’s sole risk and expense. Measurements, title, custody, Product quality and other data associated with the bad order railcars will be coordinated on between TLO and TRMC on a case-by-case basis. If TRMC does not use commercially reasonable efforts to promptly unload and repair or remove damaged railcars on the bad order track, then thirty (30) days after notification has been provided to TRMC, TLO may (i) remove such railcars from the Anacortes Rail Unloading Facility to an alternate site at TRMC’s sole cost and expense, and (ii) assess TRMC a fee for any railcars remaining on the bad order track. If, at any time the number of materially damaged railcars at the Anacortes Rail Unloading Facility should exceed the capacity of the bad order track, TLO shall promptly notify TRMC, and if TRMC does not immediately make suitable arrangements to have sufficient damaged railcars repaired or removed from the Anacortes Rail Unloading Facility, then remove such railcars from the Anacortes Rail Unloading Facility to an alternate site at TRMC’s sole cost and expense.

(a)      Nominations and Scheduling . TRMC shall nominate unit trains on a routine basis and in accordance with the procedures and railcar specifications outlined in Annex B . TLO shall provide TRMC’s unit trains non-discriminatory, priority access rights to access Anacortes Rail Unloading Facility to offload and throughput TRMC’s Products.

(b)     Utilization . TLO will not increase the total term commitments for utilization of the Anacortes Rail Unloading Facility or provide access to or use of the Anacortes Rail Unloading Facility to any third party without the prior written consent of TRMC, in TRMC’s sole discretion.

(c)     Unavailability due to Maintenance . The Anacortes Rail Unloading Facility may be unavailable for short periods of time due to routine maintenance and repair. To the extent (i) such routine maintenance and/or repair shall be for a period of seven (7) days or less, TLO shall use reasonable commercial efforts to provide TRMC at least thirty (30) days advance written notice of such planned maintenance and/or repair of the Anacortes Rail Unloading Facility, to the extent practicable, and (ii) such routine maintenance and/or repair shall be for a period greater than seven (7) days, TLO shall use reasonable commercial efforts to provide TRMC at least ninety (90) days advance written notice of such planned maintenance and/or repair of the Anacortes Rail Unloading Facility, and consult and coordinate with TRMC regarding the same, to the extent practicable. Notwithstanding any of the foregoing to the contrary, Section 5(b) hereof shall apply to any such unavailability.

(d)     Demurrage . TLO will not pay demurrage, except (i) if such demurrage is the result of TLO’s gross negligence or willful misconduct, or (ii) to the extent caused by TLO’s contractors, subcontractors or agents, and then only up to the amounts TLO is able to recover from its contractors, subcontractor and/or agents.

Title and the risk of loss or damage to the Product shall remain at all times with TRMC, subject to any lien in favor of TLO under Applicable Laws. TLO will have custody of Product from (a) the time a railcar containing Product enters the Anacortes Rail Unloading Facility and BNSF’s locomotive crew has disembarked from, and TLO’s or a TLO contractor’s locomotive crew has embarked onto, the locomotive used to transfer railcars to the Anacortes Rail Unloading Facility, until (b) the offloaded Products pass through the first pipeline flange connecting the delivery line to the Anacortes Refinery.

(a)     New Taxes and Assessments . Without duplication of matters addressed in Section 6 , which shall control with respect to such matters, TRMC shall promptly pay or reimburse TLO for any newly imposed taxes, duties, import fees, assessments or other charges of any federal, state, or local Governmental Authority that TLO is required to pay or collect, including oil spill response fund assessments, spill taxes, pollution control taxes, emission fees, charges, excises, duties, tariffs, inspections, if any, now or during the Term of this Agreement that are hereafter imposed on Product and on the transfer, handling or disposal of Waste, or on any other use thereof. Further, TRMC shall promptly pay or reimburse TLO for any additional or increased taxes levied upon TLO by reason of TRMC’s use of TLO’s leased premises or any equipment thereon. Notwithstanding the foregoing, each Party shall pay its own personal property, ad valorem, income, profit, franchise, or similar tax.

(b)     Excise Taxes . TRMC is responsible for the collecting and remitting of all applicable federal and state excise taxes on Product from its customers and accounts for which TRMC would ordinarily be responsible.

(c)     Exemption . If TRMC is exempt from the payment of any taxes allocated to TRMC under the foregoing provisions, TRMC shall furnish TLO with the proper exemption certificates.

(a)     Compliance with Applicable Law . TRMC certifies that none of the Products covered by this Agreement will be derived from Crude Oil, petrochemical, or gas which was produced, withdrawn from storage or imported in violation of any federal, state or other governmental law, nor in violation of any rule, regulation or promulgated by any governmental agency having jurisdiction in the premises.

(b)      Applicable Law . The Parties are entering into this Agreement in reliance upon and shall fully comply with all Applicable Law which directly or indirectly affects the Products throughput hereunder, or any receipt, throughput delivery, transportation, or handling of Products hereunder or the ownership, operation or condition of the Anacortes Rail Unloading Facility. Each Party shall be responsible for compliance with all Applicable Laws associated with such Party’s respective performance hereunder and the operation of such Party’s facilities. In the event any action or obligation imposed upon a Party under this Agreement shall at any time be in conflict with any requirement of Applicable Law, then this Agreement shall immediately be modified to conform the action or obligation so adversely affected to the requirements of the Applicable Law, and all other provisions of this Agreement shall remain effective.

(c)     New or Changed Applicable Law . If during the Term, any new Applicable Law becomes effective or any existing Applicable Law or its interpretation is materially changed, which change is not addressed by another provision of this Agreement and which has a material adverse economic impact upon a Party, then either Party, acting in good faith, shall have the option to request renegotiation of the relevant provisions of this Agreement with respect to future performance. The Parties shall then meet and negotiate in good faith amendments to this Agreement that will conform this Agreement to the new Applicable Law while preserving the Parties’ economic, operational, commercial and competitive arrangements in accordance with the understandings set forth herein.

(a)     Waiver of Consequential and Other Damages . In no event shall a Party be liable to the other party for any lost profits or indirect, special, incidental, consequential or punitive damages, no matter how characterized, relating to this Agreement and arising from any cause whatsoever, except with respect to indirect, special, incidental, consequential or punitive damages actually awarded to a third party or assessed by a Governmental Authority and for which a Party is properly entitled to indemnification from the other party Pursuant to the express provisions of this Agreement.

(b)     Demurrage . TLO assumes no liability for demurrage (whether related to unit train movements or otherwise), except if such demurrage is the result of TLO’s gross negligence or willful misconduct and except as provided in Section 14(d) .

(c)     No Guarantees or Warranties . Except as expressly provided in this Agreement, neither TRMC nor TLO makes any guarantees or warranties of any kind, expressed or implied. TLO specifically disclaims all implied warranties of any kind or nature, including any implied warranty of merchantability and/or any implied warranty of fitness for a particular purpose.

(a)    Notwithstanding anything else contained in this Agreement, TLO shall release, defend, protect, indemnify, and hold harmless TRMC and each of its respective affiliates, officers, directors, shareholders, agents, employees, successors-in-interest and assignees (each individually, a “ TRMC

Indemnitee ”, and collectively, the “ TRMC Indemnitees ”), from and against any and all demands, claims (including third-party claims), losses, costs, suits, or causes of action (including, but not limited to, any judgments, losses, liabilities, fines, penalties, expenses, interest, reasonable legal fees, costs of suit, and damages, whether in law or equity and whether in contract, tort, or otherwise) for or relating to (i) personal or bodily injury to, or death of the employees of any TRMC Indemnitee and, as applicable, its carriers, customers, representatives, and agents, (ii) loss of or damage to any property, products, material, and/or equipment belonging to any TRMC Indemnitee and, as applicable, its carriers, customers, representatives, and agents, and each of their respective affiliates, contractors, and subcontractors (except for demurrage and volume losses, as provided for herein), (iii) loss of or damage to any other property, products, material, and/or equipment of any other description (except for demurrage and volume losses, as provided for herein), and/or personal or bodily injury to, or death of any other Person or Persons; and and (iv) Environmental Liabilities; and with respect to clauses (i) through (iv) above, to the extent (x) caused by or resulting from the wrongful acts and omissions of TLO in connection with the ownership or operation of the Anacortes Rail Unloading Facility and the services provided hereunder, and, as applicable, its carriers, customers (other than the TRMC Indemnities), representatives, and agents, or those of their respective employees with respect to such matters, or (y) otherwise caused by violations of this Agreement by TLO or its carriers, customers (other than the TRMC Indemnitees), representatives, and agents. NOTWITHSTANDING THE FOREGOING, TLO SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS ANY TRMC INDEMNITEE FROM AND AGAINST ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH TRMC INDEMNITEE. Furthermore, with respect to any Product lost due to a spill at the Anacortes Rail Unloading Facility, to the extent recoverable from its contractors, subcontractors or agents pursuant to any indemnification obligations of such contractor, subcontractor or agent to TLO, TLO will pass through to TRMC any indemnification payment made by such contractor, subcontractor or agent to TLO in respect of the value of such Product lost.

(b)    Notwithstanding anything else contained in this Agreement, TRMC shall release, defend, protect, indemnify, and hold harmless TLO and each of its respective affiliates, officers, directors, shareholders, agents, employees, successors-in-interest and assignees (each individually, a “ TLO Indemnitee ”, and collectively, the “ TLO Indemnitees ”) from and against any and all demands, claims (including third-party claims), losses, costs, suits, or causes of action (including, but not limited to, any judgments, losses, liabilities, fines, penalties, expenses, interest, reasonable legal fees, costs of suit, and damages, whether in law or equity and whether in contract, tort, or otherwise) for or relating to (i) personal or bodily injury to, or death of the employees of any TLO Indemnitee and, as applicable, its carriers, customers, representatives, and agents; (ii) loss of or damage to any property, products, material, and/or equipment belonging to any TLO Indemnitee and, as applicable, its carriers, customers, representatives, and agents, and each of their respective affiliates, contractors, and subcontractors (except for demurrage and volume losses, as provided for herein); (iii) loss of or damage to any other property, products, material, and/or equipment of any other description (except for demurrage and volume losses, as provided for herein), and/or personal or bodily injury to, or death of any other Person or Persons; and (iv) Environmental Liabilities; and with respect to clauses (i) through (iv) above, to the extent (x) caused by or resulting from the wrongful acts and omissions of TRMC, in connection with TRMC’s use of the Anacortes Rail Unloading Facility and the services provided hereunder and TRMC’s Products stored hereunder, and, as applicable, its carriers, customers, representatives, and agents, or those of their respective employees with respect to such matters; or (y) or otherwise caused by violations of this Agreement by TRMC, or, as applicable, its carriers, customers, representatives, and agents. NOTWITHSTANDING THE FOREGOING, TRMC SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS ANY TLO INDEMNITEE FROM AND AGAINST ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, GROSS NEGLIGENCE OR

WILLFUL MISCONDUCT OF SUCH TLO INDEMNITEE. For the avoidance of doubt, nothing herein shall constitute a release by TRMC of any demurrage or volume losses that are caused by the TLO’s gross negligence, breach of this Agreement or willful misconduct.

(c)    Notwithstanding any other provisions of (i) this Agreement, (ii) the Omnibus Agreement, (iii) the Anacortes Mutual Track Use Agreement among the General Partner, the Partnership, the TLO and TRMC, and (iv) that certain Ground Lease between TRMC and TLO, all dated as of the date hereof, the Parties hereto agree that the indemnification provisions of any of the agreements specified in items (i) through (iv) immediately above shall control over any of the other agreements to the extent the subject matter of the indemnification is specifically referenced or provided for in that agreement. For the avoidance of doubt, the indemnification provisions of the Omnibus Agreement shall be subordinate to the respective indemnification provisions of each of the other agreements referenced above.

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

OF FIRST REFUSAL

(a)    Termination for Default. A Party shall be in default under this Agreement if:

(i)    the Party materially breaches any provision of this Agreement and such breach is not cured within fifteen (15) Business Days after notice thereof (which notice shall describe such breach in reasonable detail) is received by such Party; or

(ii)    the Party (A) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Applicable Law, or has any such petition filed or commenced against it, (B) makes an assignment or any general arrangement for the benefit of creditors, (C) otherwise becomes bankrupt or insolvent (however evidenced) or (D) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets.

If either Party is in default as described above, then the non-defaulting Party may: (1) terminate this Agreement upon notice to the defaulting Party; (2) withhold any payments due to the defaulting Party under this Agreement; and/or (3) pursue any other remedy at law or in equity.

(c)     Right to Enter New Agreement . Upon termination of this Agreement for reasons other than (x) a default by TRMC, (y) any termination of this Agreement initiated by TRMC pursuant to

Section 21 , or (z) a termination by reason of TRMC’s failure to exercise a renewal term option under Section 4 , TRMC shall have the right to require TLO to enter into a track use and throughput agreement with TRMC that (i) is consistent with the terms set forth in this Agreement, (ii) relates to the Anacortes Rail Unloading Facility that are the subject matter of this Agreement, and (iii) has commercial terms that are, in the aggregate, equal to or more favorable to TLO than fair market value terms as would be agreed by similarly-situated parties negotiating at arm’s length; provided, however, that the term of any such new track use and throughput agreement shall not extend beyond April 30, 2032.

(d)     Right of First Refusal . In the event that TLO proposes to enter into a track use and throughput agreement with a third party upon the termination of this Agreement for reasons other than (x) by default by TRMC, (y) any termination of this Agreement initiated by TRMC pursuant to Section 21 , or (z) a termination by reason of TRMC’s failure to exercise a renewal term option under Section 4 , TLO shall give TRMC ninety (90) days prior written notice of any proposed new track use and throughput agreement with a third party, including (i) details of all of the material terms and conditions thereof and (ii) a thirty (30)-day period (beginning upon TRMC’s receipt of such written notice) (the “ TTA First Offer Period ”) in which TRMC may make a good faith offer to enter into a new track use and throughput agreement with TLO (the “ TTA Right of First Refusal ”).  If TRMC makes an offer on terms no less favorable to TLO than the third-party offer with respect to such track use and throughput agreement during the TTA First Offer Period, then TLO shall be obligated to enter into a track use and throughput agreement with TRMC on the terms set forth in subsection (c) above. If TRMC does not exercise its TTA Right of First Refusal in the manner set forth above, TLO may, for the next ninety (90) days, proceed with the negotiation of the third-party track use and throughput agreement. If no third-party track use and throughput agreement is consummated during such ninety-day period, the terms and conditions of this Section 20(e) shall again become effective. Notwithstanding anything contained in this Section 20(e) to the contrary, TRMC’s TTA Right of First Refusal shall only be available and exercisable for a period of one hundred twenty (120) days after termination of this Agreement for reasons other than (x) by default by TRMC, (y) any other termination of this Agreement initiated by TRMC pursuant to Section 21 , or (z) a termination by reason of TRMC’s failure to exercise a renewal term option under Section 4 .

(a)    As soon as possible upon the occurrence of a Force Majeure, TLO shall provide TRMC with written notice of the occurrence of such Force Majeure (a “ Force Majeure Notice ”). TLO shall identify in such Force Majeure Notice the approximate length of time that TLO reasonably believes in good faith such Force Majeure shall continue (the “ Force Majeure Period ”). If TLO is unable to perform or is delayed in performing, in whole or in part, its obligations hereunder as a result of such Force Majeure, then TLO’s obligations shall be suspended during, but no longer than, the continuance of such Force Majeure event. If TLO advises in any Force Majeure Notice that it reasonably believes in good faith that the Force Majeure Period shall continue for more than twelve (12) consecutive Months, then at any time after TLO delivers such Force Majeure Notice, either Party may terminate this Agreement, but only upon delivery to the other Party of a notice (a “ Termination Notice ”) at least twelve (12) Months prior to the expiration of the Force Majeure Period; provided , however ; that such Termination Notice shall be deemed cancelled and of no effect if the Force Majeure Period ends prior to the expiration of such twelve-Month period.

(b)    Notwithstanding the foregoing, if TRMC delivers a Termination Notice to TLO (the “ TRMC Termination Notice ”) and, within thirty (30) days after receiving such TRMC Termination Notice, TLO notifies TRMC that TLO reasonably believes in good faith that it shall be capable of fully performing its obligations under this Agreement within a reasonable period of time, then the TRMC

Termination Notice shall be deemed revoked and this Agreement shall continue in full force and effect as if such TRMC Termination Notice had never been given.

(a)    TRMC is not permitted to suspend or reduce its obligations under this Agreement in connection with a shutdown of the Anacortes Refinery for scheduled turnarounds or other regular servicing or maintenance. If refining operations at the Anacortes Refinery are suspended for any reason (including Anacortes Refinery turnarounds and other scheduled maintenance), then TRMC shall remain liable for the MTFV and any reimbursements or surcharges under this Agreement for the duration of the suspension. TRMC shall provide at least thirty (30) days’ prior written notice of any suspension of operations at the Refinery due to a planned turnaround or scheduled maintenance.

(b)     Further, in the event that TRMC decides to permanently or indefinitely suspend refining operations for any reason at the Anacortes Refinery, TRMC shall still remain liable for the MTVF and any reimbursements or surcharges under this Agreement for the duration of the suspension or the remaining Term, whichever is longer; provided, however, that TLO shall make commercially reasonable efforts to develop third party use of some or all of the Anacortes Rail Unloading Facility, and any net proceeds received from such development, net of costs (including without limitation any amortized capital costs for conversion of the Anacortes Rail Unloading Facility or the installation of new connections) shall be credited towards TRMC’s Minimum Throughout Volume obligations.

CHANGE OF CONTROL

(a)    On the Commencement Date, the General Partner shall assign all of its rights and obligations under this Agreement to the Partnership. The Partnership shall immediately assign its rights and obligations hereunder to TLO. Upon such assignment to TLO, TLO shall have all of the respective rights and obligations set forth herein during the Term of this Agreement.

(b)    Except as otherwise provided in this Section 23 , TRMC shall not assign any of its rights or obligations under this Agreement without TLO’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided , however , that TRMC may assign this Agreement without TLO’s consent in connection with a sale by TRMC of the Anacortes Refinery so long as the transferee: (i) agrees to assume all of TRMC’s obligations under this Agreement and (ii) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by TRMC in its reasonable judgment.

(c)    TLO shall not assign any of its rights or obligations under this Agreement without TRMC’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided , however , that (i) subject to Section 23(d) below, TLO may assign this Agreement without TRMC’s consent in connection with a sale by TLO of all or substantially all of the Anacortes Rail Unloading Facility so long as the transferee: (A) agrees to assume all of TLO’s obligations under this Agreement; (B) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by TLO in its reasonable judgment; and (C) is not a competitor of TRMC; and (ii) TLO shall be permitted to make a collateral assignment of this Agreement solely to secure working capital financing for TLO.

( d)    Any assignment that is not undertaken in accordance with the provisions set forth above shall be null and void ab initio . A Party making any assignment shall promptly notify the other Party of such

assignment, regardless of whether consent is required. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

(e)      In the event that at any time during the Term hereof, as it may be extended under Section 4 , TLO proposes to sell of all or substantially all of the Anacortes Rail Unloading Facility to a third party, TLO shall give TRMC ninety (90) days’ prior written notice of any such sale, including (i) details of all of the material terms and conditions thereof, including without limitation, a firm commitment by a capable third party purchaser to purchase all or substantially all of the the Anacortes Rail Unloading Facility at specified price, and (ii) a sixty (60)-day period (beginning upon TRMC’s receipt of such written notice) (the “ Purchase First Offer Period ”) in which TRMC may make a good faith offer to purchase all or substantially all of the Anacortes Rail Unloading Facility from TLO (the “ Purchase Right of First Refusal ”).  If TRMC makes an offer on terms no less favorable to TLO than the third-party offer with respect to such sale during the Purchase First Offer Period, then TLO shall be obligated to sell all or substantially all of the Rail Unloading Facility to TRMC on the same terms set forth in such offer to purchase by the third party. If TRMC does not exercise its Purchase Right of First Refusal in the manner set forth above, TLO may, for the next ninety (90) days, proceed with the negotiation of the sale of the Anacortes Rail Unloading Facility. If such sale is not consummated during such ninety (90) period, the terms and conditions of this Section 23(e) shall again become effective.

(f)      TRMC’s obligations hereunder shall not terminate in connection with a Partnership Change of Control, provided, however, that in the case of any Partnership Change of Control or the sale of all or substantially all of the Anacortes Rail Unloading Facility to a purchaser other than TRMC, TRMC shall retain the option to extend the Term of this Agreement as provided in Section 4 , and the Identification Date (as defined in the Omnibus Agreement) shall be deemed to have occurred, if it has not already occurred by reason of the passage of time. TLO shall provide TRMC with notice of any Partnership Change of Control at least sixty (60) days prior to the effective date thereof.

(a)    At all times during the Term of this Agreement and for a period of two (2) years after termination of this Agreement for any coverage maintained on a “claims-made” or “occurrence” basis, each Party shall maintain at its expense the below listed insurance in the amounts specified below which are minimum requirements. Such insurance shall provide coverage to each Party, as applicable, and such policies, other than Worker’s Compensation Insurance, shall include each Party as an Additional Insured, as applicable. Each policy shall provide that it is primary to and not contributory with any other insurance, including any self-insured retention, maintained by either Party (which shall be excess) and each policy shall provide the full coverage required by this Agreement. All such insurance shall be written with carriers and underwriters acceptable to both Parties, and eligible to do business in the State of Washington and having and maintaining an A.M. Best financial strength rating of no less than “A-“ and financial size rating no less than “VII”; provided that either Party may procure worker’s compensation insurance from the State of Washington. All limits listed below are required MINIMUM LIMITS:

(i)    Workers Compensation and Occupational Disease Insurance which fully complies with Applicable Law of the State of Washington, in limits not less than statutory requirements;

(ii)    Employers Liability Insurance with a minimum limit of $1,000,000 for each accident, covering injury or death to any employee which may be outside the scope of the worker’s compensation statute of the jurisdiction in which the worker’s service is performed, and in the aggregate as respects occupational disease;

(iii)    Commercial General Liability Insurance, with minimum limits of $1,000,000 combined single limit per occurrence for bodily injury and property damage liability, or such higher limits as may be required by either Party or by Applicable Law from time to time. This policy shall include Broad Form Contractual Liability insurance coverage which shall specifically apply to the obligations assumed in this Agreement by the Parties;

(iv)    Automobile Liability Insurance covering all owned, non-owned and hired vehicles, with minimum limits of $1,000,000 combined single limit per occurrence for bodily injury and property damage liability, or such higher limit(s) as may be required by either Party or by Applicable Law from time to time. Limits of liability for this insurance must be not less than $1,000,000 per occurrence;

(v)     Excess (Umbrella) Liability Insurance with limits not less than $4,000,000 per occurrence. Additional excess limits may be utilized to supplement inadequate limits in the primary policies required in items (ii), (iii), and (iv) above; and

(vi)    Property Insurance, which property insurance shall be first-party property insurance to adequately cover the value of any property owned by a Party and related to such Party’s performance under this Agreement, including personal property of others.

(b)    All such policies must be endorsed with a Waiver of Subrogation endorsement, effectively waiving rights of recovery under subrogation or otherwise, against either Party, as applicable, and shall contain where applicable, a severability of interest clause and a standard cross liability clause.

(c)    Upon execution of this Agreement and prior to the operation of any equipment by either Party, each Party will furnish to the other Party, and at least annually thereafter (or at any other times upon request by a Party) during the Term of this Agreement (and for any coverage maintained on a “claims-made” basis, for two (2) years after the termination of this Agreement), insurance certificates and/or certified copies of the original policies to evidence the insurance required herein. Such certificates shall be in the form of the “Accord” Certificate of Insurance, and reflect that they are for the benefit of such Party and shall provide that there will be no material change in or cancellation of the policies unless such Party is given at least thirty (30) days prior written notice. Certificates providing evidence of renewal of coverage shall be furnished to each Party prior to policy expiration.

(d)    Each Party shall be solely responsible for any applicable deductibles or self-insured retention.

All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (i) if by transmission by facsimile or hand delivery, when delivered; (ii) if mailed via the official governmental mail system, five (5) business days after mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (iii) if mailed by an internationally recognized overnight express mail service such as Federal Express, UPS, or DHL Worldwide, one (1) business day after deposit therewith prepaid; or (iv) by e-mail one (1) business day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses set forth on Schedule 25 attached hereto. Either Party may, at any time and from time to time may, modify and/or supplement Schedule 25 by providing the other Party with a substitute Schedule 25 , changing the addresses for such Party, without requiring amendment of this Agreement.

(a)    Either Party shall have the right, at its sole cost and expense, upon forty-five (45) days prior written notice, to audit the books, accounts, and records of the other Party directly related to that Party and related to an invoice of the other Party to verify the accuracy of such invoice, or as otherwise appropriate to audit performance under this Agreement. Under no circumstances shall the scope of such audit include the books, accounts or records of a third party. All audited information shall be kept confidential pursuant to the terms of this Agreement. The audited Party will not be required to divulge any information that identifies specific volumes attributable to any customer other than the auditing TRMC, or that is otherwise in violation of any applicable anti-competition laws, rules or regulations a third-party auditor may be required to enter into a confidentiality agreement if it is deemed necessary by the Party being audited. Under no circumstances may an auditor disclose third-party information, including, but not limited to third-party TRMC identities and third-party pricing information, to the Party exercising its right for an audit without the written permission of the Party being audited. The Party being audited will have sole discretion whether to permit such disclosure.

(b)    Within one-hundred and eighty (180) days of an audit commencing, all final audit findings must be presented to the Party being audited. Subject to the time limitations set forth herein, the Parties will negotiate in good faith to verify and promptly settle claims pursuant to this clause; provided that any claim not filed with the appropriate court of law within twenty-four (24) Months of the date of the invoice in question shall be waived.