UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 16, 2016
Tesoro Corporation
(Exact name of registrant as specified in its charter)


Delaware
 
1-3473
 
95-0862768
 
 
 
 
 
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)

19100 Ridgewood Pkwy
San Antonio, Texas
 
78259-1828
 
 
 
(Address of principal executive offices)
 
(Zip Code)

(210) 626-6000
(Registrant’s telephone number,
including area code)

Not Applicable
(Former name or former address, if
changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
 
 
 
o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
 
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
 
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 





EXPLANATORY NOTE

As previously announced, on July 1, 2016, Tesoro Corporation (“ Tesoro ”) entered into a Contribution, Conveyance and Assumption Agreement (the “ Contribution Agreement ”) with Tesoro Logistics LP (the “ Partnership ”), Tesoro Logistics GP, LLC (the “ General Partner ”), Tesoro Logistics Operations LLC (the “ Operating Company ”) and Tesoro Alaska Company LLC (“ TAC ”) that was previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “ SEC ”) on July 7, 2016. Pursuant to the Contribution Agreement, TAC agreed to contribute, through the General Partner and the Partnership, to the Operating Company the following assets (the “ Assets ”) in two stages:

Tankage with a shell capacity of approximately 3,500,000 barrels located at TAC’s refinery in Kenai, Alaska, related equipment and ancillary facilities used for the operation thereof (collectively, the “ Kenai Tankage ”); and
all of TAC’s limited liability company interests (the “ TAT Units ”) in Tesoro Alaska Terminals LLC, a wholly-owned subsidiary of TAC (“ TAT ”), which owns (a) a bulk tank farm and terminal facility located at the Port of Anchorage in Anchorage, Alaska with 580,000 barrels of in-service storage capacity for refined products and which facility includes a truck rack and a rail-loading facility, and (b) a terminal facility located at the Fairbanks International Airport in Fairbanks, Alaska, with 22,500 barrels of in-service capacity for refined products and which facility includes a truck rack.

As previously described in the Current Report on Form 8-K filed with the SEC on July 7, 2016, the first stage closed on July 1, 2016, pursuant to which TAC contributed the Kenai Tankage to the General Partner in exchange for additional membership interests in the General Partner. The General Partner contributed such assets to the Partnership in consideration of the receipt by the General Partner of approximately $239 million from the Partnership in cash, partly financed with borrowings under the Partnership’s acquisition credit facility, and the issuance of equity securities of the Partnership with a combined fair value of approximately $27 million. The equity was comprised of 162,375 general partner units sufficient to restore and maintain the General Partner’s 2% general partner interest in the Partnership and 390,282 common units. The Partnership then contributed such assets to the Operating Company.

In the second stage (the “ Second Closing ”), which closed on September 16, 2016 (the “ Second Closing Date ”), TAC contributed the TAT Units to the General Partner in exchange for additional membership interests in the General Partner. The General Partner contributed such assets to the Partnership in consideration of approximately $160 million from the Partnership in cash, which was financed with borrowings under the Partnership’s acquisition credit facility, and the issuance of equity securities of the Partnership with a combined fair value of approximately $18 million. The equity was comprised of 20,440 general partner units sufficient to restore and maintain the General Partner’s 2% general partner interest in the Partnership and 358,712 common units. The Partnership then contributed the TAT Units to the Operating Company.

The foregoing description is not complete and is qualified in its entirety by reference to the Contribution Agreement, which is incorporated by reference as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.

In connection with the Contribution Agreement, Tesoro, TAC, Tesoro Refining & Marketing Company LLC (“ TRMC ”), the General Partner, the Partnership and the Operating Company, as applicable, entered into the commercial agreements described below at the Second Closing.

Item 1.01
 
Entry into a Material Definitive Agreement.

Amendment No. 1 to Second Amended and Restated Master Terminalling Services Agreement

Effective on the Second Closing Date, TRMC, TAC and the Operating Company entered into Amendment No. 1 to the Second Amended and Restated Master Terminalling Services Agreement (the “ MTSA Amendment ”). The MTSA Amendment modifies the previously disclosed Second Amended and Restated Master Terminalling Services Agreement by and among TRMC, TAC (formerly known as Tesoro Alaska Company) and the Operating Company dated as of May 3, 2013 (the “ MTSA ”) so that the MTSA no longer applies to the terminal operated by the Operating Company in Anchorage, Alaska and to remove TAC as a party to the MTSA.

The foregoing description is not complete and is qualified in its entirety by reference to the MTSA Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.


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Alaska Terminalling Services Agreement

Effective as of the Second Closing Date, TAC, the Operating Company, TAT, the General Partner and the Partnership entered into the Alaska Terminalling Services Agreement (the “ Alaska TSA ”) which supersedes in its entirety that certain Terminalling Services Agreement - Nikiski, dated as of July 1, 2014 by and among TAC, the Operating Company, the General Partner and the Partnership. The Alaska TSA has an initial term of ten years and TAC has the option to extend the term of the Alaska TSA for up to two renewal terms of five years each. Under the Alasksa TSA, the Operating Company will provide TAC with (i) commingled storage and throughput services at the Operating Company’s terminals in Anchorage, Fairbanks and Nikiski, Alaska (each a “ Terminal ” and collectively, the “ Terminals ”), (ii) dedicated storage and rail-loading services at its Anchorage Terminal, and (iii) various other services listed in the Alaska TSA and any terminal service order. TAC and the Operating Company have agreed on terminal minimum throughput commitments at each of the Terminals. The Operating Company will charge throughput fees for each barrel distributed through the Terminals in addition to separate fees for providing various ancillary services such as ethanol blending and additive injection. If TAC fails to throughput at any Terminal aggregate volumes for such Terminal equal to or greater than its minimum throughput commitment for such Terminal, then TAC will pay the Operating Company a shortfall payment equal to the difference between the fees that would have been charged had TAC met its throughput commitment and the amount charged for the volumes that TAC actually throughput at such Terminal. The Operating Company will also charge rail services fees and if TAC fails to throughput aggregate rail volumes that are equal to or greater than its minimum rail commitment, TAC will pay the Operating Company a shortfall payment equal to the difference between the fees that would have been charged had TAC met its minimum rail commitment and the amount actually charged for the rail throughput services. In addition to the foregoing fees, TAC will also pay dedicated storage fees to the Operating Company for the storage services it receives at the Anchorage Terminal and other pass-through charges. For up to two years after the termination of the Alaska TSA, and provided that the termination was not due to TAC’s default, TAC may exercise a right of first refusal on any new terminalling services agreement the Operating Company offers to a third party.

The foregoing description is not complete and is qualified in its entirety by reference to the Alaska TSA which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.

Second Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation

The parties to the Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation dated as of December 6, 2013 (the “ Prior Representation and Services Agreement ”) have entered into a Second Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation (the “ Amended Representation and Services Agreement ”) with certain additional parties that amends and restates the Prior Representation and Services Agreement to add such new parties and to clarify certain of the parties’ obligations under the agreement. Under the Amended Representation and Services Agreement, Tesoro Companies, Inc. (“ TCI ”), Tesoro Maritime Company (“ TMC ”), TRMC, TAC, Kenai Pipe Line Company (“ KPL ”), Tesoro Alaska Pipeline Company LLC (“ TAPL ”), Carson Cogeneration Company (“ CCC ”), Tesoro Great Plains Midstream LLC (“ TGP ”), Tesoro Great Plains Gathering and Marketing LLC (“ TGPGM ”), BakkenLink Pipeline LLC (“ BLP ”), ND Land Holdings LLC (“ NDLH ”), the Operating Company, Tesoro High Plains Pipeline Company LLC (“ THPP ”), Tesoro Logistics Pipelines LLC (“ TLP ”), Tesoro Logistics Northwest Pipeline LLC (“ TLNP ”), Tesoro SoCal Pipeline Company, LLC (“ TSCP ”), QEP Field Services, LLC (“ QEPFS ”), QEPM Gathering I, LLC (“ QGI ”), Green River Processing, LLC (“ GRP ”), Rendezvous Pipeline Company, LLC (“ RPL ”) and TAT are each a party, and TCI, TRMC, TAC, KPL, CCC, TGP, TGPGM, BLP and NDLH are each individually a “ Tesoro Party ” and collectively the “ Tesoro Parties ,” and the Operating Company, TLP, TLNP, TAPL, THPP, QEPFS, TSCP, QGI, GRP, RPL and TAT are each individually a “ TLLP Party ” and collectively the “ TLLP Parties .”

Pursuant to the Amended Representation and Services Agreement, the Tesoro Parties and the TLLP Parties have agreed (i) that TCI will act as the sole representative for the Tesoro Parties and the TLLP Parties as a member in the Marine Preservation Association (the “ MPA ”), and TCI shall perform the duties and responsibilities of a member in MPA on behalf of both the Tesoro Parties and the TLLP Parties; and (ii) to the allocation among and between the Tesoro Parties and TLLP Parties of costs and expenses associated with oil spill contingency planning, response and remediation activities, such costs and expenses to include: MPA operating costs; fees charged by the Marine Spill Response Corporation (“ MSRC ”) to provide oil spill response and contingency planning for property owned, leased, subleased or operated by any Tesoro Party or any TLLP Party and for vessels charted by TMC; incident response costs incurred by the MPA, MSRC, the Tesoro Parties or the TLLP Parties, and related remediation.

The Amended Representation and Services Agreement also provides for reimbursement to any TLLP Party or its parent, Tesoro, in those instances where TLLP facilities that are operated, leased or subleased by a TLLP Party, but are owned or leased by a Tesoro Party, and the Tesoro Party or Tesoro is required to post or provide a parent guaranty or a Certificate of Financial Responsibility (“ COFR ”) to demonstrate adequate financial ability to pay for any incident response costs that might be associated

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with incidents at such TLLP facility. The TLLP Party operating, leasing or subleasing the TLLP facility shall release, defend, indemnify and hold harmless the Tesoro Party owning or leasing such TLLP facility, and Tesoro will be (i) subrogated to the rights of such Tesoro Party to receive such reimbursement to the extent that Tesoro is obligated to pay or guarantee payment of such incident response costs pursuant to any such parent guaranty or COFR and (ii) entitled to receive reimbursement from TLLP for any incremental costs or expenses incurred by it or a Tesoro Party in connection with the posting of a COFR for a TLLP facility.

The Amended Representation and Services Agreement continues until December 31, 2016, and thereafter renews for successive periods of one year, unless terminated by any party upon 60 days advance written notice. The parties may periodically evaluate whether the allocation and methods of paying the costs and expenses set forth in the Amended Representation and Services Agreement remain appropriate under conditions as they may exist from time to time. At any time after December 31, 2016, any party may request good faith renegotiation of all or any part of the Amended Representation and Services Agreement, and in the event the Parties are unable to reach a consensus on any appropriate adjustments, then any party may terminate the Amended Representation and Services Agreement upon ten days advance written notice as to subsequent costs incurred by TCI, but such termination will not invalidate the Amended Representation and Services Agreement as to costs incurred by TCI prior to such termination. Upon termination of the Amended Representation and Services Agreement, TCI may rescind its designation of the TLLP Parties and the Tesoro Parties as covered entities with respect to TCI’s membership in MPA.

Each of the parties to the Amended Representation and Services Agreement is either a direct or indirect subsidiary of Tesoro. As a result, certain individuals, including officers and directors of Tesoro and the General Partner, serve as officers and/or directors of more than one of such other entities.

The foregoing description is not complete and is qualified in its entirety by reference to the Amended Representation and Services Agreement which is filed as Exhibit 10.3 to this Current Report on Form 8-K and incorporated herein by reference.

Third Amended and Restated Schedules to the Third Amended and Restated Omnibus Agreement

Tesoro entered into the Third Amended and Restated Schedules to the Third Amended and Restated Omnibus Agreement (“ Amended Omnibus Schedules ”) with the General Partner, the Partnership, TRMC, TAC and TCI, which amend and restate the schedules to the Third Amended and Restated Omnibus Agreement to include the TAT Units subject to the Contribution Agreement.

The foregoing description is not complete and is qualified in its entirety by reference to the Amended Omnibus Schedules, which are filed as Exhibit 10.4 to this Current Report on Form 8-K and incorporated herein by reference.

Relationships

Each of the Partnership, the General Partner, TRMC, TAC, TAT, TCI and the Operating Company is a direct or indirect subsidiary of Tesoro. As a result, certain individuals, including officers and directors of Tesoro and the General Partner, serve as officers and/or directors of more than one of such other entities. After the Second Closing, the General Partner, as the general partner of the Partnership, holds 2,083,330 general partner units of the Partnership, which represents a 2% general partner interest, and 8,783,117 common units of the Partnership, which represents an 8.43% limited partner interest in the Partnership. Tesoro, together with TRMC (including the 151,021 common units held by Carson Cogeneration Company, a wholly-owned subsidiary of TRMC), TAC and the General Partner, holds 33,194,109 common units of the Partnership, which represents an approximate 31.9% limited partner interest, in addition to the 2% general partner interest in the Partnership discussed above.

Item 2.01
 
Completion of Acquisition or Disposition of Assets.

The description in the Explanatory Note and Item 1.01 above of the Second Closing of the contribution of the Assets by TAC, through the General Partner and the Partnership, to the Operating Company is incorporated into this Item 2.01 by reference.

Item 7.01
 
Regulation FD Disclosure.

On September 16, 2016, Tesoro issued a press release announcing the consummation of the Second Closing. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

The information above is being furnished, not filed, pursuant to Item 7.01 of Form 8-K. Accordingly, the information in Item 7.01 of this Current Report, including Exhibit 99.1, will not be subject to liability under Section 18 of the Securities Exchange Act

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of 1934, as amended (the “ Exchange Act ”), and will not be incorporated by reference into any registration statement or other document filed by the Partnership under the Securities Act or the Exchange Act, unless specifically identified therein as being incorporated by reference.

Item 9.01
 
Financial Statements and Exhibits.

(d) Exhibits.
 
2.1
Contribution, Conveyance and Assumption Agreement, dated as of July 1, 2016, by and among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Alaska Company LLC and Tesoro Corporation (incorporated by reference herein to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on July 7, 2016, File No. 1-3473).
 
 
 
 
10.1
Amendment No. 1 to the Second Amended and Restated Master Terminalling Services Agreement dated as of September 16, 2016, by and among Tesoro Refining and Marketing Company LLC, Tesoro Alaska Company LLC and Tesoro Logistics Operations LLC.
 
 
 
 
10.2
Alaska Terminalling Services Agreement, dated as of September 16, 2016 by and among Tesoro Alaska Company LLC, Tesoro Logistics Operations LLC, Tesoro Alaska Terminals LLC, Tesoro Logistics GP, LLC and Tesoro Logistics LP.
 
 
 
 
10.3
Second Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation, dated as of September 16, 2016, by and among Tesoro Companies, Inc., Tesoro Maritime Company, Tesoro Refining & Marketing Company LLC, Tesoro Alaska Company LLC, Kenai Pipe Line Company, Tesoro Alaska Pipeline Company LLC, Carson Cogeneration Company, Tesoro Great Plains Midstream LLC, Tesoro Great Plains Gathering & Marketing LLC, BakkenLink Pipeline LLC, ND Land Holdings LLC, Tesoro Logistics Operations LLC, Tesoro High Plains Pipeline Company LLC, Tesoro Logistics Pipelines LLC, Tesoro Logistics Northwest Pipeline LLC, Tesoro SoCal Pipeline Company LLC, QEP Field Services, LLC, QEPM Gathering I, LLC, Green River Processing, LLC, Rendezvous Pipeline Company, LLC and Tesoro Alaska Terminals LLC.
 
 
 
 
10.4
Third Amended and Restated Schedules to the Third Amended and Restated Omnibus Agreement, dated as of September 16, 2016, by and among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP and Tesoro Logistics GP, LLC.
 
 
 
 
99.1
Press Release of Tesoro Corporation issued on September 16, 2016.


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: September 22, 2016
 
 
 
 
 
 
TESORO CORPORATION
 
 
By:
/s/ STEVEN M. STERIN
 
 
 
Steven M. Sterin
 
 
 
Executive Vice President, Chief Financial Officer and Corporate Development
 


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Index to Exhibits
Exhibit Number
 
Description
 
 
 
2.1
 
Contribution, Conveyance and Assumption Agreement, dated as of July 1, 2016, by and among Tesoro Logistics LP, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC, Tesoro Alaska Company LLC and Tesoro Corporation (incorporated by reference herein to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on July 7, 2016, File No. 1-3473).
 
 
 
10.1
 
Amendment No. 1 to the Second Amended and Restated Master Terminalling Services Agreement dated as of September 16, 2016, by and among Tesoro Refining and Marketing Company LLC, Tesoro Alaska Company LLC and Tesoro Logistics Operations LLC.
 
 
 
10.2
 
Alaska Terminalling Services Agreement, dated as of September 16, 2016 by and among Tesoro Alaska Company LLC, Tesoro Logistics Operations LLC, Tesoro Alaska Terminals LLC, Tesoro Logistics GP, LLC and Tesoro Logistics LP.
 
 
 
10.3
 
Second Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation, dated as of September 16, 2016, by and among Tesoro Companies, Inc., Tesoro Maritime Company, Tesoro Refining & Marketing Company LLC, Tesoro Alaska Company LLC, Kenai Pipe Line Company, Tesoro Alaska Pipeline Company LLC, Carson Cogeneration Company, Tesoro Great Plains Midstream LLC, Tesoro Great Plains Gathering & Marketing LLC, BakkenLink Pipeline LLC, ND Land Holdings LLC, Tesoro Logistics Operations LLC, Tesoro High Plains Pipeline Company LLC, Tesoro Logistics Pipelines LLC, Tesoro Logistics Northwest Pipeline LLC, Tesoro SoCal Pipeline Company LLC, QEP Field Services, LLC, QEPM Gathering I, LLC, Green River Processing, LLC, Rendezvous Pipeline Company, LLC and Tesoro Alaska Terminals LLC.
 
 
 
10.4
 
Third Amended and Restated Schedules to the Third Amended and Restated Omnibus Agreement, dated as of September 16, 2016, by and among Tesoro Corporation, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP and Tesoro Logistics GP, LLC.
 
 
 
99.1
 
Press Release of Tesoro Corporation issued on September 16, 2016.


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Exhibit 10.1

AMENDMENT NO. 1 TO
SECOND AMENDED AND RESTATED
MASTER TERMINALLING SERVICES AGREEMENT

This AMENDMENT NO. 1 (this “ Amendment ”) is effective as of September 16, 2016 (the “ Effective Date ”), by and between Tesoro Refining & Marketing Company LLC, a Delaware limited liability company (“ TRMC ”), Tesoro Alaska Company LLC, a Delaware limited liability company (“ TAC ”), and Tesoro Logistics Operations LLC, a Delaware limited liability company (“ TLO ”), each individually a “Party” and collectively referred to as “ Parties .”
RECITALS
WHEREAS, TRMC, TAC and TLO entered into that certain Second Amended and Restated Master Terminalling Services Agreement dated as of May 3, 2013 (the “ MTSA ”). Capitalized terms used in this Amendment but not defined herein shall have the same meanings as set forth in the MTSA.
WHEREAS , the Parties hereto desire to amend the MTSA to end its application to the Anchorage Terminal of TLO (the “ Anchorage Terminal ”), as a result of the execution by TAC and TLO contemporaneously herewith of a new Terminalling Services Agreement for the Anchorage Terminal.
NOW, THEREFORE, in consideration of the covenants and obligations contained herein, the Parties to this Amendment hereby agree as follows:
1.
AMENDMENT OF MTSA

The MTSA is hereby amended as follows as of the Effective Date:

(a) From and after the Effective Date, TAC shall no longer be a Party to the MTSA and all references in the MTSA to “Tesoro” shall refer only to TRMC.

(b) The definition of “Refineries” in Section 1 of the MTSA is amended to delete the reference to “Kenai, Alaska”.

(c) Section 10(d) of the MTSA is amended and restated in its entirety to read as follows:

Marine . For receipts and deliveries to or from marine vessel at Vancouver, custody shall pass at the flange where TLO’s facility interconnects with the hoses connected to the marine vessel.”
(d) All references to the Anchorage Terminal in Section 8(a) and Schedules A and B to the MTSA are deleted. The total Stipulated Volume in Schedule A is reduced from 108,400 barrels per day to 99,400 barrels per day. The reference to “Alaska Refinery” in Schedule B to the MTSA is deleted.



2. MISCELLANEOUS

(a)     Legal Effect . Other than as amended hereby, the MTSA remains in full force and effect and unmodified.
(b)     Counterparts . This Amendment may be executed in one or more counterparts (including by facsimile or portable document format (pdf)) for the convenience of the Parties hereto, each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement.
[SIGNATURE PAGES FOLLOW]

- 2 -


IN WITNESS WHEREOF , the Parties hereto have duly executed this Amendment as of the Effective Date.

TESORO REFINING AND MARKETING COMPANY LLC
 
TESORO LOGISTICS OPERATIONS LLC
 
 
 
 
 
 
 
 
TESORO ALASKA COMPANY LLC
 
 
 
 
 
 
 
 
By:
/s/ Gregory J. Goff
 
By:
/s/ Phillip M. Anderson
 
Gregory J. Goff
 
 
Phillip M. Anderson
 
President
 
 
President


Signature Page to Amendment No. 1 to Second Amended and Restated
Master Terminalling Services Agreement


Exhibit 10.2

ALASKA TERMINALLING SERVICES AGREEMENT
This Terminalling Services Agreement - Anchorage (the “ Agreement ”) is dated as of September 16, 2016, by and between Tesoro Alaska Company LLC, a Delaware limited liability company (“ Customer ”), and Tesoro Logistics Operations LLC, a Delaware limited liability company (“ TLO ”), and its wholly owned subsidiary, Tesoro Alaska Terminals, LLC, a Delaware limited liability company (“TAT”), and for purposes of Section 34(a) only, Tesoro Logistics GP, LLC, a Delaware limited liability company (“ General Partner ”), and Tesoro Logistics LP, a Delaware limited partnership (“ Partnership ”).

RECITALS
WHEREAS , the Parties entered into that certain Terminalling Services Agreement-Nikiski dated as of July 1, 2014 (the “ 2014 Nikiski TSA ”);
WHEREAS, the Parties intend that this Agreement shall supersede the 2014 Nikiski TSA in its entirety as of the Commencement Date;
WHEREAS , on the date hereof, Customer will contribute certain assets (including the membership interests in TAT) to the General Partner, the General Partner will contribute those assets to the Partnership, and the Partnership will contribute those assets to TLO, all on the terms and conditions set forth in that certain Contribution, Conveyance and Assumption Agreement dated July 1, 2016 by and among Tesoro Corporation, a Delaware corporation (“ Tesoro ”), Customer, the Partnership, the General Partner, TLO (the “ Contribution Agreement ”); and
WHEREAS , TLO will operate the Terminals pursuant to this Agreement, but a portion of the Anchorage Terminal and the Fairbanks Terminal are owned by TAT, a wholly owned subsidiary of TLO;
WHEREAS , Customer and TLO desire to enter into this Agreement to memorialize the terms of their commercial relationship related to the subject matter hereof.
NOW, THEREFORE , in consideration of the covenants and obligations contained herein, the Parties (as defined below) to this Agreement hereby agree as follows:

1.
DEFINITIONS
Capitalized terms used throughout this Agreement shall have the meanings set forth below, unless otherwise specifically defined herein.
Additized Gasoline ” has the meaning set forth in Section 9(b) .
Agreement ” has the meaning set forth in the Preamble.
Ancillary Services ” has the meaning set forth in Section 3(e) .
Anchorage Terminal ” means TLO’s Anchorage Terminal, consisting of a truck rack, a rail loading and unloading facility, and storage tanks with approximately 1,544,000 Barrels of storage capacity.
API ” means 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 ASTM International, formerly known as the American Society for Testing and Materials.
Barrel ” means a volume equal to 42 U.S. gallons of 231 cubic inches each, at 60 degrees Fahrenheit under one atmosphere of pressure.
Base Gasoline ” has the meaning set forth in Section 9(b) .
Blending Instructions ” has the meaning set forth in Section 11(c) .
bpd ” means Barrels per day.
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.
Capacity Resolution ” has the meaning set forth in Section 30(c) .
Carrier ” means a third-party agent or contractor hired by Customer, who is in the business of transporting Products via tank trucks.
Commencement Date ” has the meaning set forth in Section 2 .
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.
Contribution Agreement ” has the meaning set forth in the Recitals.
Customer ” has the meaning set forth in the Preamble.
Customer Group ” has the meaning set forth in Section 25(a) .
Customer’s Anchorage Terminal ” means the portion of the Anchorage Terminal owned and operated by Customer immediately prior to its transfer to TLO pursuant to the Contribution Agreement on the Commencement Date.
Customer Termination Notice ” has the meaning set forth in Section 29(b) .
DCA ” has the meaning set forth in Section 9(b) .
Dedicated Tanks ” has the meaning set forth in Section 5(a) .
Diesel Additive Facilities ” has the meaning set forth in Section 9(c) .
EPA ” has the meaning set forth in Section 9(b) .
Ethanol Services ” has the meaning set forth in Section 11(a) .
Extension Period ” has the meaning set forth in Section 2 .
Fairbanks Terminal ” means TLO’s Fairbanks Terminal, consisting of a truck rack and storage tanks with approximately 22,500 Barrels of storage capacity.

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Force Majeure ” means events or circumstances, whether foreseeable or not, 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 Governmental Authorities, explosions, terrorist acts, breakage, accident to machinery, equipment, storage tanks or lines of pipe, and inability to obtain or unavoidable delays in obtaining material or equipment and similar events.
Force Majeure Notice ” has the meaning set forth in Section 29(a) .
Force Majeure Period ” has the meaning set forth in Section 29(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 or 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.
Initial Term ” has the meaning set forth in Section 2 .
LAC ” has the meaning set forth in Section 9(b) .
Month ” means a calendar month.
Nikiski Terminal ” means TLO’s Nikiski Terminal, consisting of a two-lane truck terminal and six storage tanks with approximately 213,000 Barrels of storage capacity.
Operating Capacity ” means the effective storage capacity of a tank, taking into account accepted engineering principles, industry standards, API guidelines and Applicable Law, only as to Products that each tank is capable of storing, within the requirements of applicable permit requirements and under actual conditions as they may exist at any time. The Operating Capacity of each tank is listed on the applicable Terminal Service Order as of the date of such Terminal Service Order.
Partnership ” has the meaning set forth in the Preamble.
Partnership Change of Control ” means Tesoro ceases to possess, directly or indirectly, the power to direct or cause the direction of the management and policies of the General Partner of the Partnership, whether through ownership of voting securities, by contract, or otherwise.
Partnership Group ” has the meaning set forth in Section 25(b) .
Party ” or “ Parties ” means that each of Customer and TLO 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 the petroleum products, ethanol or biofuels, crude oil, Transmix, intermediate products and fuel oil described herein as being handled under this Agreement.
Rail Excess Amount ” has the meaning set forth in Section 6(b) .
Rail Loading Equipment ” has the meaning set forth in Section 6(c) .
Rail Loading Services Fee ” has the meaning set forth in Section 6(a) .

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Rail Minimum Commitment ” means the volume in bpd throughput at the Anchorage Terminal by loading and unloading railcars by TLO on behalf of Customer, as set forth on Schedule B hereto; provided however, that the Rail Minimum Commitment 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.
Rail Reserved Capacity ” means the volume in bpd throughput at the Anchorage Terminal by loading and unloading railcars by TLO on behalf of Customer, as set forth on Schedule B hereto; provided however, that the Rail Reserved Capacity 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.
Rail Shortfall Payment ” has the meaning set forth in Section 6(d) .
Receiving Party Personnel ” has the meaning set forth in Section 36(d) .
Red Dye ” has the meaning set forth in Section 9(d) .
Refinery ” means Customer’s refining facilities located in Kenai, Alaska.
Restoration ” has the meaning set forth in Section 30(b) .
Shell Capacity ” means the gross storage capacity of a tank for each respective Product, based upon its dimensions, as set forth in an applicable Terminal Service Order.
Storage Services Fee ” has the meaning set forth in Section 5(a) .
Subcontract Customer ” has the meaning set forth in Section 33 .
Surcharge ” has the meaning set forth in Section 13(a) .
Tank Heels ” consist of the minimum quantity of Product which either (a) must remain in a tank during all periods when the tank is available for service to keep the tank in regulatory compliance or (b) is necessary for physical operation of the tank. 
TAT ” means Tesoro Alaska Terminals LLC, a Delaware limited liability company, a subsidiary of TLO.
Term ” has the meaning set forth in Section 2 .
Terminal ” means the Anchorage Terminal, the Fairbanks Terminal or the Nikiski Terminal as the case may be; and “ Terminals ” means all of them.
Terminal Excess Amount ” has the meaning set forth in Section 4(b) .
Terminalling Equipment ” has the meaning set forth in Section 4(c) .
Terminal Service Order ” has the meaning set forth in Section 15(a) .
Terminalling First Offer Period ” has the meaning set forth in Section 32(b) .
Terminalling Right of First Refusal ” has the meaning set forth in Section 32(b) .
Terminalling Service Fee ” means for any Month during the Term, the total fee per Barrel of throughput paid by Customer during that Month for terminalling and Ancillary Services at the particular Terminal (but excluding the Storage Services Fee and the Rail Loading Services Fee) as set forth on a Terminal Service Order for the particular Terminal.
Terminalling Shortfall Payment ” has the meaning set forth in Section 4(d) .

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Terminal Minimum Throughput Commitment ” for a Terminal means the volume in bpd set forth for the particular Terminal on Schedule A hereto; provided however, that the Terminal Minimum Throughput Commitment for each Terminal 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.
Terminal Reserved Capacity ” for a Terminal means the volume in bpd set forth for the particular Terminal on Schedule A hereto; provided however, that the Terminal Reserved Capacity for each Terminal for each Product 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.
Termination Notice ” has the meaning set forth in Section 29(a) .
Tesoro ” has the meaning set forth in the Recitals.
Third Amended and Restated Omnibus Agreement ” means that certain Third Amended and Restated Omnibus Agreement, among Tesoro, Customer, Tesoro Companies, Inc., Tesoro Refining & Marketing Company, a Delaware limited liability company, the General Partner and the Partnership, as such agreement may be amended, supplemented or restated from time to time.
TLO ” has the meaning set forth in the Preamble.
Transmix ” has the meaning set forth in Section 8 .
ULSD ” means ultra-low sulfur diesel.

2.
TERM
The initial term of this Agreement shall commence on the date hereof (the “ Commencement Date ”) and shall continue through September 16, 2026 (the “ Initial Term ”); provided, however, that Customer may, at its 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 three hundred sixty-five (365) calendar days prior to the end of the Initial Term or the then-current Extension Period. The Initial Term, and any Extension Period, shall be referred to herein as the “ Term .”

3.
SERVICES
During the Term and subject to the terms and conditions of this Agreement and any Terminal Service Order, TLO shall make available to Customer the following services (some of which may be provided by TAT):
(a) Commingled storage and throughput services at the Terminals (which for gasoline and diesel fuel shall include distribution services (“ Distribution Services ”) including but not limited to scheduling and dispatching of orders, accounting and documentation for truck and railcar loading, volumetric measurements and documentation, and interfacing with rail and truck common carriers) pursuant to Section 4 below;
(b) Dedicated storage at the Anchorage Terminal pursuant to Section 5 below;
(c) Rail loading services at the Anchorage Terminal pursuant to Section 6 below; and

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(d) The services pursuant to Sections 8-11 below, other additization services as set forth on a Terminal Service Order and any and other services pursuant to a Terminal Service Order (collectively, the “ Ancillary Services ”).

4. TERMINAL THROUGHPUT SERVICES
(a) Terminal Throughput Commitment and Terminalling Service Fee . Customer shall deliver and/or pay for the Terminal Minimum Throughput Commitment at each Terminal and TLO shall make available to Customer at all times commingled storage and throughput capacity at each Terminal sufficient to allow Customer to throughput the Terminal Reserved Capacity for the applicable Terminal. Customer shall pay the Terminalling Service Fee for such service as set forth in a Terminal Service Order for each Terminal. Allocation of storage and throughput capacity for separate Products at each Terminal shall be set forth in a Terminal Service Order, if applicable. TLO shall not make any commitments to third parties that would interfere with the ability of Customer to throughput the Terminal Reserved Capacity at each Terminal for each Product. Customer commits to deliver and/or pay for the Terminal Minimum Throughput Commitment for each Terminal on a Monthly basis during the Term.
(b) Excess Capacity . Customer may throughput volumes in excess of the Terminal Minimum Throughput Commitment for the particular Terminal, up to the then-available capacity of the particular Terminal, net of any third-party commitments, as determined by TLO at any time, which allocation of any excess capacity shall be in accordance with current practices, or as otherwise may be set forth in a Terminal Service Order. If during any Month during the Term, Customer throughputs aggregate volumes of a particular Product at a Terminal greater than the Terminal Minimum Throughput Commitment for the particular Terminal, then Customer shall pay TLO an amount equal to the fee determined by multiplying the actual volumes throughput by Customer in excess of the Terminal Minimum Throughput Commitment for the particular Terminal by the Terminalling Service Fee for the particular Terminal (the “ Terminal Excess Amount ”).
(c) Removal of Equipment from Service . If at any time during the Term, any tank, rack or other equipment or facility of TLO that is dedicated to Customer or otherwise being used to provide services hereunder (“ Terminalling Equipment ”), is removed from service, and if removal of such Terminalling Equipment restricts Customer from being able to throughput the Reserved Capacity for the particular Terminal or receive associated Ancillary Services, then Customer’s Minimum Throughput Commitment for the particular Terminal shall be reduced by the difference between the Terminal Minimum Throughput Commitment and the amount that Customer can effectively throughput at such location without restriction until such Terminalling Equipment is restored to service.
(d) Shortfall Payments . If, during any Month during the Term, Customer throughputs aggregate volumes at a Terminal less than the Terminal Minimum Throughput Commitment for the particular Terminal for such Month, then Customer shall pay TLO an amount (a “ Shortfall Payment ”) for any shortfall. Shortfall Payments shall be equal to the amount determined by taking the difference between (i) the Terminal Minimum Throughput Commitment for the particular Terminal multiplied by the Terminalling Service Fee for the particular Terminal and (ii) the actual volumes throughput by Customer at the particular Terminal multiplied by the Terminalling Service Fee for the particular Terminal. The dollar amount of any Shortfall Payment paid by Customer shall be posted as a credit to Customer’s account and may be applied against any Terminal Excess Amounts owed by Customer during any of the succeeding three (3) Months. Credits will be applied in the order in which such credits accrue and any remaining portion of the credit that is not used by Customer during the succeeding three (3) Months shall expire ( e.g ., a credit that accrues in January will be available

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in February, March and April, will expire at the end of April, and must be applied prior to applying any credit which accrues in February).
(e) Subcontractor Throughput Credit . If TLO throughputs volumes from Subcontract Customers at a Terminal during any Month, such volumes shall be applied as a credit to reduce the Terminal Minimum Throughput Commitment for the particular Terminal for the particular Month, up to a maximum amount equal to the Terminal Minimum Throughput Commitment for the particular Terminal for the particular Month.
(f) Pipeline Delivery Exceptions . A Terminalling Service Order may provide for exceptions from the calculation of the Terminal Excess Amount and Shortfall Payments for volumes throughput by certain deliveries, such as internal transfers of Products within the Anchorage Terminal and deliveries of Products from a Terminal through pipeline connections, including deliveries by pipeline connections to another terminal facility and deliveries through the Port of Anchorage Valve Yard (“POAVY”).

5. DEDICATED STORAGE
(a) Storage Services Fee . Customer shall pay a Monthly fee (the “ Storage Services Fee ”) to reserve, on a firm basis, all of the existing aggregate Shell Capacity of certain tanks (the “ Dedicated Tanks ”) as specified on a Terminal Service Order. Such fee shall be payable by Customer on a Monthly basis throughout the Term of the Agreement, regardless of the actual volumes of Products stored by TLO on behalf of Customer; provided, however, that the Parties shall from time to time negotiate an appropriate adjustment to such fee if the following conditions are met: (i) Customer requires the full Operating Capacity of the Dedicated Tanks, (ii) the full Operating Capacity of the Tanks is not available to Customer for any reason (other than any reason resulting from or relating to actions or inactions by Customer), and (iii) TLO is unable to otherwise accommodate the actual volumes of Products required to be stored by Customer pursuant to the terms of this Agreement or any Terminal Service Order. Unless otherwise agreed, such adjustment shall be made in proportion to the reduction in Operating Capacity for any time period compared with the Operating Capacity then in effect for the affected Dedicated Tanks pursuant to the mutually agreed Terminal Service Orders. The Parties recognize that the existing Operating Capacity of certain tanks may be less than the Shell Capacity of such Dedicated Tanks, but the Parties acknowledge and agree that the Storage Services Fee shall be set in terms of a dollar-per-Barrel per Month rate based on Shell Capacity in the applicable Terminal Service Order. Such Storage Services Fee shall include all storage, pumping, and transshipment between and among the Dedicated Tanks.
(b) Calculation of Storage Services Fee . The Storage Services Fee shall be calculated using the per Barrel rate set forth on the initial Terminal Service Order executed effective as of the Commencement Date for the then-existing aggregate Shell Capacity of the tanks specified in such initial Terminal Service Order. The Storage Services Fee owed during the Month in which the Commencement Date occurs, if less than a full Month, shall be prorated in accordance with the ratio of (i) the number of days in such Month during which this Agreement is effective to (ii) the total number of days in such Month.

6. ANCHORAGE RAIL LOADING SERVICES
(a) Rail Services . TLO shall provide to Customer such rail loading and unloading services at the Anchorage Terminal as may be provided for in a Terminal Service Order. Customer shall deliver and/or pay for the Rail Minimum Commitment and TLO shall make available to Customer at all times rail loading and unloading capacity at the Anchorage Terminal sufficient to allow Customer to throughput the Rail Reserved

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Capacity, subject to railroad scheduling procedures and the operating procedures established from time-to-time by TLO for the Terminal. Customer shall pay the “ Rail Loading Services Fee ” for such services as set forth in a Terminal Service Order. TLO shall not make any commitments to third parties that would interfere with the ability of Customer to throughput the Rail Reserved Capacity at the Anchorage Terminal. Customer commits to deliver and/or pay for the Rail Minimum Commitment on a Monthly basis during the Term.
(b) Excess Capacity . Customer may load and unload rail volumes in excess of the Rail Minimum Commitment, up to the then-available capacity of the Anchorage Terminal, net of any third-party commitments, as determined by TLO at any time, which allocation of any excess capacity shall be in accordance with current practices, or as otherwise may be set forth in a Terminal Service Order. If during any Month during the Term, Customer loads or unloads aggregate rail volumes at the Anchorage Terminal greater than the Rail Minimum Commitment, then Customer shall pay TLO an amount equal to the fee determined by multiplying the actual rail volumes loaded or unloaded by Customer in excess of the Rail Minimum Commitment by the Rail Loading Services Fee (the “ Excess Rail Amount ”).
(c) Removal of Equipment from Service . If at any time during the Term, any equipment or facility of TLO that is dedicated to Customer or otherwise being used to provide railcar loading or unloading services hereunder (“ Rail Loading Equipment ”), is removed from service, and if the removal of such Rail Loading Equipment restricts Customer from being able to throughput the Rail Reserved Capacity, then Customer’s Rail Minimum Commitment shall be reduced by the difference between the Rail Minimum Commitment and the rail volume that Customer can effectively throughput at the Anchorage Terminal without restriction until such Rail Loading Equipment is restored to service.
(d) Shortfall Payments . If, during any Month during the Term, Customer throughputs aggregate rail volumes at the Anchorage Terminal that are less than the Rail Minimum Commitment for such Month, then Customer shall pay TLO an amount (a “ Rail Shortfall Payment ”) for any shortfall. Rail Shortfall Payments shall be equal to the amount determined by taking the difference between (i) the Rail Minimum Commitment multiplied by the Rail Loading Services Fee and (ii) the actual rail volumes throughput by Customer at the Anchorage Terminal multiplied by the Rail Loading Services Fee. The dollar amount of any Shortfall Payment paid by Customer shall be posted as a credit to Customer’s account and may be applied against any Rail Excess Amounts owed by Customer during any of the succeeding three (3) Months. Credits will be applied in the order in which such credits accrue and any remaining portion of the credit that is not used by Customer during the succeeding three (3) Months shall expire ( e.g ., a credit that accrues in January will be available in February, March and April, will expire at the end of April, and must be applied prior to applying any credit which accrues in February).

7. PASS THROUGH CHARGES
(a) TLO may incur fee and charges (“Passthrough Charges”) from Port authorities, Alaska Railroad or other third parties relating to use of facilities other than the Terminals related to the receipt, delivery or loading of Product. These Passthrough Charges may include, without limitation, (i) charges from the Port of Anchorage for use of its docks, wharfs and valve yard, and associated third party labor charges, tie-up charges, booming charges, inspector charges, pilot charges and maritime charges; (ii) fees assessed by the Port of Fairbanks for access to the Fairbanks Airport; and (iii) any rail scheduling or access charges by the Alaska Railroad Corporation. These Passthrough Charges may be passed through and charged directly to Customer as set forth in a Terminal Service Order.
(b) TLO shall have the right to require prepayment of the anticipated amount of any Passthrough Charges prior to performance of any operation that may incur such Passthrough Charges.

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(c) If third party contractors are to provide services, material or equipment that may require Passthrough Charges, then to the extent that TLO, as operator of the Terminals, has discretion to select such contractor, Customer may designate the contractor who should provide such services, materials or equipment, subject to TLO’s consent, which shall not be unreasonably withheld.

8. PRODUCT DOWNGRADE AND INTERFACE
TLO shall account for the volume of Product downgraded, and Customer’s inventory of Products and/or interface shall be adjusted, provided that, interface volume (“ Transmix ”) received shall be allocated (a) in the case of dedicated storage, entirely to Customer and (b) in the case of commingled storage, among Customer and other customers receiving Products generating such Transmix in the same shipment or stored in commingled storage in proportion to each customer’s volume of Products in such shipment or storage. Customer shall remove its Transmix upon notice from TLO and shall be subject to applicable Transmix handling fees upon its removal, as provided in a Terminal Service Order. If Transmix is not removed within fifteen (15) Business Days after notification (such time period to be extended to the extent of any delay or hindrance by TLO, its agents or contractors for any reason), TLO shall have the right to sell such Transmix at market rates and return any proceeds to Customer, less applicable Transmix handling fees in effect at the time of such sale. Product downgraded as a result of ordinary Terminal or pipeline operations including line flushing, rack meter provings or other necessary Terminal operations shall not constitute losses for which TLO is liable to Customer.

9.
ADDITIZATION OPTIONS
(a) Additive Injection Service . If available at a Terminal, TLO shall provide equipment for the injection of additives, as provided below. Customer shall designate pursuant to a Terminal Service Order which additive injection services shall be provided and the applicable fees for any such services.
(b) DCA Additization . All gasoline Product leaving a Terminal by truck (but not by rail) shall be additized (“ Additized Gasoline ”). As an exception, TLO shall accommodate a request from Customer to lift base gasoline from a Terminal. In that case, the bill of lading issued by TLO shall label all such Product as base gasoline (“ Base Gasoline ”). TLO shall provide a generic Deposit Control Additive (“ DCA ”) injection service, including all required reporting and record keeping prescribed by Applicable Law. The additive supplied shall be an Environmental Protection Agency (“ EPA ”) certified DCA. Subject to the other provisions hereof, Customer may request TLO to instead inject a different proprietary DCA into certain gasoline delivered hereunder, instead of the generic DCA provided by TLO, and TLO shall accommodate such requests pursuant to a Terminal Service Order specifying the specific additization required and fees to be charged for its injection, subject to Customer providing a suitable Additized Gasoline system for such proprietary additive. TLO shall ensure that such additive is injected into all appropriate gasoline Product delivered to Customer at a rate no lower than the Lowest Allowable Concentration (“ LAC ”) at which such additive was certified. The gasoline additization rate shall be determined by Customer, but shall not be less than 1.1 times the LAC specified by the respective additive manufacturer or supplier. Notwithstanding the above, Customer shall be solely responsible for registering with the EPA or any other government agency its use of generic or proprietary additive in its fuels, as required by Applicable Law. Customer shall submit evidence of registration in compliance with 40 C.F.R. Part 80. Customer shall also be responsible for full compliance with any quarterly or other regulatory reporting, and any other requirements under Applicable Law related to use of generic or proprietary additive in Customer’s Product.

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(c) Lubricity and Conductivity Additization . TLO shall maintain and operate diesel lubricity and conductivity additive injection facilities (the “ Diesel Additive Facilities ”) at each Terminal in accordance with customary industry standards during the Term, including all required reporting and record keeping prescribed by Applicable Law. TLO shall arrange for purchase and delivery of any and all required lubricity and conductivity additive for injection through the Diesel Additive Facilities at each Terminal. TLO shall inject into all ULSD delivered to Customer at the Terminal an amount of lubricity and conductivity additive that TLO determines to be sufficient to comply with current ASTM diesel lubricity and conductivity specifications. TLO shall, upon request, provide Customer with documentation of additive specifications and additive injection, which TLO shall keep on file at each Terminal.
(d) Red Dye Additization . When and where required, TLO shall provide a generic red dye additive (“ Red Dye ”) injection service for diesel, including all required reporting and record keeping prescribed by Applicable Law. TLO shall be responsible for determining the injection rates, Red Dye inventory levels, meter readings, and calculations of actual treat rates, in compliance with the minimum levels prescribed by the Internal Revenue Service. Customer is responsible for designating which of its accounts shall be authorized to use Red Dye diesel injection services. TLO equipment shall enable designated Carriers and accounts to inject Red Dye upon request prior to loading diesel Product at each Terminal. Customer’s Carrier shall be solely responsible for designating that a load of diesel Product be injected with Red Dye, and TLO shall have no liability with regard to whether a load of Product is additized with Red Dye. TLO shall not be responsible for any loss, damage or liability that arises from Carrier injecting or failing to inject Red Dye into Customer’s Product, unless caused by TLO’s equipment failure or negligence.
(e) Responsibility for Provision of Additive . For any additization services provided pursuant to this Section 9 , TLO shall be responsible for providing generic additives, and Customer shall be responsible for providing any special or proprietary additives requested by Customer.
(f) Special Additive Equipment . As set forth in a Terminal Service Order, and subject to the other provisions set forth herein and the availability of suitable space at the Terminal, Customer shall have the option of having TLO install and maintain at each Terminal, at Customer’s sole risk, cost and expense, such special additive equipment as may be desirable for Products to be delivered to Customer's account hereunder. The engineering and installation of any fixture, equipment or appurtenance placed on the Terminal in respect thereof shall be subject to TLO’s prior approval and supervision. During the Term, TLO shall operate the special additive equipment with any fees therefor to be set forth in a Terminal Service Order. Upon the expiration of the Term, TLO will have the option to purchase the special additive equipment for a price to be set forth in a Terminal Service Order.

10. CREDITS FOR VOLUMES LOST TO OTHER TERMINAL CUSTOMERS
(a) The Parties recognize that Customer’s Terminal Minimum Throughput Commitment and Rail Minimum Commitment for the Anchorage Terminal have been established based upon (i) the historical sales volumes of Customer and (ii) the historical sales volumes under contracts which were assigned to Customer at the time TAT acquired TAT’s Anchorage Terminal and which have historically been throughput through the Anchorage Terminal (including volumes throughput by a prior owner of a portion of the Anchorage Terminal).  During the Term, Customer’s aggregate sales volume for Products throughput through the Anchorage Terminal, or loaded or unloaded from railcars at the Anchorage Terminal, may be reduced because Customer has lost sales to a third-party competitor. Such third-party may also have, or may enter into, a throughput terminalling agreement with TLO to throughput Product volumes at the Anchorage Terminal. (In such circumstances Customer has lost Product sales volumes, but TLO has retained an equivalent level of

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Product throughput at the Anchorage Terminal through its agreement with the third party.) If Customer loses such sales volumes to such a third-party who continues to throughput through TLO’s Anchorage Terminal, then Customer may request a corresponding credit against the Terminal Minimum Throughput Commitment and/or Rail Minimum Commitment for the Anchorage Terminal, as applicable. The credit would be equal to the amount of Customer’s throughput through the Anchorage Terminal, or loaded or unloaded from railcars at the Anchorage Terminal, that was replaced by such third-party’s throughput through the Anchorage Terminal, or loading or unloading of railcars at the Anchorage Terminal, but would not include any new throughput of additional Products by a third-party at the Anchorage Terminal that were not included within the historical volumes throughput through the Anchorage Terminal. 
(b) If Customer requests a credit as set forth in Section 10(a) , then TLO shall evaluate the then current throughput through the Anchorage Terminal to determine, using good faith and commercially reasonable standards, the extent to which Customer’s Terminal Minimum Throughput Commitment and/or Rail Minimum Commitment has been replaced by third party throughput through the Anchorage Terminal or third party loading and unloading of railcars at the Anchorage Terminal. Such evaluation shall be made based upon volumes of each individual Product throughput through the Anchorage Terminal and/or loaded onto or unloaded from railcars at the Anchorage Terminal, as applicable, in comparison to historical throughput through such Terminal, excluding new business that was not included in such historical throughput. Within thirty (30) days of Customer’s request, TLO shall advise Customer of TLO’s determination of whether TLO is entitled to receive a credit against its Terminal Minimum Throughput Commitment and/or Rail Minimum Commitment, and if so what volumes should be so credited. If the Parties agree on the amount of any such credits, then they shall execute a Terminal Service Order that shall establish the amount of the applicable credits, which shall be applied to as an offset against Customer’s Terminal Minimum Throughput Commitment and/or Rail Minimum Commitment for the periods while such credits remain in force.
(c) If the Customer disputes TLO’s determination of whether Customer is entitled to a credit, or the amount of any such credit, Customer may request that the determination be referred to a nationally recognized public accounting firm that is not then providing audit or tax services to either Party. The Parties shall promptly agree in good faith upon the identity of such accounting firm. TLO shall provide the accounting firm with all relevant information regarding throughput through the Anchorage Terminal, which shall remain Confidential Information and shall not be shared with Customer or any third parties. Customer shall provide the accounting firm with the relevant information about the changes in its sales of Products and customers. After reviewing such information, the accounting firm shall render its determination of whether Customer is entitled to a credit for decreased throughput and/or rail volume at the Anchorage Terminal that has been replaced by third party throughput through the Anchorage Terminal and if such a credit is appropriate, the volume credit that should be applied to offset the customer’s obligation to pay for the Terminal Minimum Throughput Commitment and/or the Rail Minimum Commitment. Such accounting firm’s determination shall be conclusive, absent manifest error. The Parties shall share equally the cost of the accounting firm’s services.
(d) If it is determined that Customer is entitled to a credit as provided in this Section 10 , such credit shall remain in effect for an indefinite period. If at any time TLO believes that the conditions relating to such credit have materially changed, TLO shall re-evaluate the situation on the basis set forth in Section 10(b) . Following such re-evaluation, TLO shall advise Customer of TLO’s determination of whether TLO is still entitled to receive a credit against its Terminal Minimum Throughput Commitment and/or Rail Minimum Commitment, and if so what volumes should be so credited. If the Customer disputes TLO’s determination of whether Customer is entitled to a credit, or the amount of any such credit, the determination shall be referred to an independent accounting firm as provided in Section 10(c) .

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11. ETHANOL BLENDING SERVICES
(a) Services and Equipment . Where ethanol receiving, storage and blending facilities are available at the Terminal, upon Customer’s request, the Parties shall execute a Terminal Service Order pursuant to which TLO shall receive, store and blend ethanol into Customer’s gasoline at the Terminal (“ Ethanol Services ”). TLO shall provide and operate all equipment required for the Ethanol Services. The equipment shall consist of truck and/or rail unloading racks, tanks, pumps, motors, injectors, computer control, and any other ancillary equipment necessary for the providing of the Ethanol Services.
(b) Ethanol Inventories . Customer shall be solely responsible for supplying inventories of ethanol at its own expense, including the scheduling and transporting of ethanol into the Terminal, subject to notice and scheduling procedures mutually agreeable to the Parties. TLO shall receive Customer’s ethanol into fungible ethanol storage at the Terminal, unless otherwise specified in a Terminal Service Order.
(c) Blending Instructions . Upon a request from Customer for Ethanol Services, a Terminal Service Order shall provide the desired blending ratio of ethanol to gasoline at the Terminal (“ Blending Instructions ”), including the minimum Octane (R+M/2) rating for each grade of Customer’s gasoline Product, prior to blending. A change to the blending ratios shall require a Terminal Service Order.
(d) Records . TLO shall maintain for a minimum of five (5) years written or electronic records of the type and volume of oxygenate blended into Customer’s gasoline.
(e) Quality Assurance . TLO shall maintain an industry standard quality assurance oversight program of the ethanol blending process. TLO shall provide Customer with an annual report within fifteen (15) Business Days after the end of each calendar year that, at a minimum, summarizes the volume of Customer’s gasoline received by TLO, the volume of oxygenate added to Customer’s gasoline and total volume of blended gasoline.
(f) Monitoring . TLO shall allow Customer or its agents to monitor the oxygenate blending operation by periodic audit, sampling, testing and/or records review to ensure the overall volumes and type of oxygenate blended into gasoline is consistent with the oxygenate claimed by Customer as required by 40 C.F.R. 80.101(d)(4)(ii)(B)(2). The scope and type of such audits will be negotiated in good faith by the Parties in advance and memorialized in writing.
(g) Customer Liability . TLO shall rely on Blending Instructions and data provided by Customer in performing its obligations under this Agreement or any Terminal Service Order. Customer agrees to be solely responsible for all claims arising from TLO’s use of or reliance on these Blending Instructions and data.
(h) Condition . When performing the Ethanol Services as per Customer’s Blending Instructions, TLO shall not certify to Customer or any third-party that blended gasoline does or shall meet ASTM D 4814 or any federal, state, or local regulatory specifications. Customer agrees that it is receiving from TLO the Blended Gasoline in an “AS IS, WHERE IS” condition without warranties of any kind, including any warranties of merchantability or fitness for a particular purpose, or its ability to meet ASTM or regulatory specifications.
12. REIMBURSEMENT FOR NEWLY IMPOSED TAXES AND REGULATORY FEES; EXCISE TAXES
(a) Prompt Reimbursement . Customer shall promptly pay or reimburse TLO for any newly imposed taxes, levies, royalties, assessments, licenses, fees, charges, surcharges and sums due of any nature

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whatsoever (other than income taxes, gross receipt taxes and similar taxes) by any federal, state or local government or agency that TLO incurs on Customer’s behalf for the services provided by TLO under this Agreement or any Terminal Service Order. If TLO is required to pay any of the foregoing, Customer shall promptly reimburse TLO in accordance with the payment terms set forth in this Agreement. Any such newly imposed taxes or regulatory fees as provided for in this Section 12(a) shall be specified in an applicable Terminal Service Order.
(b) Excise Tax Certification . Upon written request by TLO, Customer shall supply TLO with a completed signed original notification certificate of gasoline and diesel fuel registrant as required by the Internal Revenue Service’s excise tax regulation. Customer further agrees to comply with all Applicable Law with respect to such taxes.
(c) Exemption Certification . If Customer is exempt from the payment of any taxes allocated to Customer under the foregoing provisions, Customer shall furnish TLO with the proper exemption certificates.

13. EXPENDITURE REQUIRED BY NEW LAWS AND REGULATIONS
(a) Surcharge . If, during the Term, any existing laws or regulations are changed or any new laws or regulations are enacted that require TLO to make substantial and unanticipated expenditures (whether capitalized or otherwise) with respect to the Terminal, TLO may, subject to the terms of this Section 13 , impose a surcharge to increase the applicable service fee (“ Surcharge ”), to cover Customer’s pro rata share of the cost of complying with these laws or regulations, based upon the percentage of Customer’s use of the services or facilities impacted by such new laws or regulations.
(b) Notification and Mitigation . TLO shall notify Customer of any proposed Surcharge to be imposed pursuant to Section 13(a) sufficient to cover the cost of any required capital projects and any ongoing increased operating costs. TLO and Customer then shall negotiate in good faith for up to thirty (30) days to mutually determine the effect of the change in law or regulation or new law or regulation, the cost thereof, and how such cost shall be amortized at an interest rate of no more than nine percent (9%) as a Surcharge, with the understanding that TLO and Customer shall use their reasonable commercial efforts to mitigate the impact of, and comply with, these laws and regulations. Without limiting the foregoing, if expenditures requiring a Surcharge may be avoided or reduced through changes in operations, then the Parties shall negotiate in good faith to set forth the appropriate changes in a Terminal Service Order to evidence the reduction of the amount of a Surcharge while leaving the Parties in the same relative economic position they held before the laws or regulations were changed or enacted.
(c) Less Than 15% Surcharge . In the event any Surcharge results in less than a fifteen percent (15%) increase in the applicable service fee, Customer will be assessed such Surcharge on all future invoices during the period in which such Surcharge is in effect for the applicable amortization period, and TLO shall not terminate the affected service from this Agreement.
(d) 15% or More Surcharge . In the event any Surcharge results in a fifteen percent (15%) or more increase in the applicable service fee, TLO shall notify Customer of the amount of the Surcharge required to reimburse TLO for its costs, plus carrying costs, together with reasonable supporting detail for the nature and amount of any such Surcharge.
(i) If within thirty (30) days of such notification provided in this Section 13(d) , Customer does not agree to pay such Surcharge or to reimburse TLO up front for its costs, TLO may elect to either:

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a. require Customer to pay such Surcharge, up to a fifteen percent (15%) increase in the applicable service fee; or
b. terminate the service under this Agreement to which the Surcharge applies, upon notice to Customer.
(ii) TLO’s performance obligations under this Agreement shall be suspended or reduced during the above thirty (30) day period to the extent that TLO would be obligated to make such expenditures to continue performance during such period.
(e) Resolution of Surcharge . Following a resolution with respect to the amount and manner of payment of a Surcharge pursuant to this Section 13 , the Parties shall execute an appropriate Terminal Service Order memorializing the terms of such resolution.
(f) Payment of Surcharge . In lieu of paying the Surcharge in connection with any required capital project, Customer may, at its option, elect to pay the full cost of the substantial and unanticipated expenditures upon completion of a project.

14. REIMBURSEMENT FOR TANK CLEANING AND CONVERSION
(a) Reimbursement for Tank Cleaning . If any Dedicated Tanks are removed from service or cleaning of any tanks is performed by TLO at the specific request of Customer, Customer shall bear (or reimburse TLO) for all costs to clean, degas or otherwise prepare the tank(s) including, without limitation, the cost of removal, processing, transportation, disposal, of all waste and the cost of any taxes or charges TLO may be required to pay in regard to such waste. For any tanks that are dedicated to Customer for segregated storage of Customer’s Products as set forth in any Terminal Service Order, Customer agrees to reimburse TLO for the reasonable cost of changes necessary to return the dedicated storage tanks to TLO on termination of their dedication for segregated storage under this Agreement, in the same condition as originally received less normal wear and tear, unless otherwise mutually agreed by the Parties.
(b) Reimbursement for Tank Conversion . If Customer requests that any dedicated tank be changed for storage of a different grade or type of Product, TLO shall agree to a change in such service, if the same can be accomplished in accordance with reasonable commercial standards, accepted industry and engineering guidelines, permit requirements and Applicable Law. If any such modifications, improvements, vapor recovery, cleaning, degassing, or other preparation of the tanks is performed by TLO at the request of Customer, Customer shall bear all direct costs attributable thereto, including, without limitation, the cost of removal, processing, transportation, and disposal of all waste and the cost of any taxes or mutually agreed charges TLO may be required to pay in regard to such waste, which costs shall be set forth on the applicable Terminal Service Order.

15. TERMINAL SERVICE ORDERS; PAYMENT
(a) Description . TLO and Customer shall enter into one or more terminal service orders for the Terminal substantially in the form attached hereto as Exhibit 1 (each, a “ Terminal Service Order ”). Upon a request by Customer pursuant to this Agreement or as deemed necessary or appropriate by TLO in connection with the services to be delivered pursuant hereto, TLO shall generate a Terminal Service Order to set forth the specific terms and conditions for providing the applicable services described therein and the applicable fees to be charged for such services. No Terminal Service Order shall be effective until fully executed by both TLO and Customer.

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(b) Included Items . Items available for inclusion on a Terminal Service Order include, but are not limited to, the following:
(i) allocation of throughput capacity by Product, and the rates by Product for determining the Terminalling Service Fee pursuant to Section 4 ;
(ii) identification of tanks to be utilized for dedicated storage tanks and the Storage Services Fee pursuant to Section 5 ;
(iii) rail loading and unloading services and the Rail Loading Services Fee pursuant to Section 6 ;
(iv) Passthrough Charges pursuant to Section 7 ;
(v) Transmix handling fees pursuant to Section 8 ;
(vi) additization pursuant to Section 9 ;
(vii) special or proprietary additive injection services, including any installation and maintenance of special additive equipment, pursuant to Section 9(f) , and the fees related thereto;
(viii) ethanol blending services pursuant to Section 11 and the fees related thereto;
(ix) reimbursement related to newly imposed taxes pursuant to Section 12 ;
(x) Surcharges related to expenditures as a result of newly imposed laws and regulations pursuant to Section 13 ;
(xi) tank cleaning or conversion pursuant to Section 14 ; and
(xii) any other services as may be agreed.
(c) Invoices . TLO shall invoice Customer on a monthly basis and Customer shall pay all amounts due under this Agreement and any Terminal Service Order no later than ten (10) calendar days after Customer’s receipt of TLO’s invoices. Any past due payments owed by Customer 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.
(d) Fee Increases . Any fees of a fixed amount set forth in this Agreement and any Terminal Service Order shall be increased on July 1 of each year of the Term, commencing on July 1, 2017, by a percentage equal to the greater of zero or the positive change, if any, in the CPI-U (All Urban Consumers) for the prior calendar year, as reported by the Bureau of Labor Statistics, and rounded to the nearest one-tenth (1/10) of one percent (1%).
(e) Conflict between Agreement and Terminal Service Order . In case of any conflict between the terms of this Agreement and the terms of any Terminal Service Order, the terms of the applicable Terminal Service Order shall govern.
16. CUSTODY TRANSFER AND TITLE
(a) Custody of Pipeline Receipts and Deliveries . For Product received into the Anchorage Terminal by pipeline, custody of the Product shall pass to TLO at the Port of Anchorage Valve Flange Yard manifold where it enters the Terminal’s receiving line. For Product delivered by the Terminal into a pipeline,

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custody of the Product shall pass to Customer at the Port of Anchorage Valve Flange Yard manifold where it exits the Terminal’s delivery line.
(b) Custody of Truck Receipts and Deliveries . For receipts and deliveries to or from trucks, custody shall pass at the flange where the hoses at TLO’s facility interconnect with the truck.
(c) Custody of Rail Receipts and Deliveries . For receipts and deliveries by rail for the Anchorage Terminal, custody shall pass to TLO when the switching locomotive used to transfer Customer’s rail cars to the Terminal is uncoupled from such rail cars at the near-by yard of the Alaska Railroad Corporation.
(d) In-Tank . Deliveries by book transfer shall be reflected in the books of TLO.
(e) Title Transfer . Upon re-delivery of any Product to Customer’s account, Customer shall become solely responsible for any loss, damage or injury to Person or property or the environment, arising out of transportation, possession or use of such Product after transfer of custody and the loss allowance provisions hereof shall apply to Product while in TLO’s custody. Title to all of Customer’s Product received in the Terminal shall remain with Customer at all times. Both Parties acknowledge that this Agreement represents a bailment of Products by Customer to TLO and not a consignment of Products, it being understood that TLO has no authority hereunder to sell or seek purchasers for the Products of Customer, except for Transmix as provided in Section 8 above. Customer hereby warrants that it shall, at all times, have good title to and the right to deliver, throughput, store and receive Products pursuant to the terms of this Agreement and any Terminal Service Order.

17. PRODUCT QUALITY
(a) Product Specifications of Delivered Products . Customer warrants that all Products delivered under this Agreement and any Terminal Service Order shall meet the latest applicable pipeline specifications or mutually agreed upon specifications for that Product upon receipt at the Terminal and contain no deleterious substances or concentrations of any contaminants that may make it or its components commercially unacceptable in general industry application. Customer shall not deliver to the Terminal any Products which: (i) would in any way be injurious to the Terminal; (ii) would render the Terminal unfit for the proper storage of similar Products; (iii) would contaminate or otherwise downgrade the quality of the Products stored in commingled storage; (iv) may not be lawfully stored at the Terminal; or (v) otherwise do not meet applicable Product specifications for such Product that are customary in the location of the Terminal. If, however, there are Products that do not have such applicable specifications, the specifications shall be mutually agreed upon by the Parties. Should Customer’s commingled Products not comply with the minimum quality standards set forth in this Agreement or any Terminal Service Order, Customer shall be liable for all loss, damage and cost incurred thereby, including damage to Products of third parties commingled with Customer’s unfit Products.
(b) Product Specifications of Commingled Storage . TLO shall have the right to store compatible Products received for Customer’s account with Products belonging to TLO or third parties in TLO’s commingled storage tanks. TLO shall handle Customer’s fungible Products in accordance with TLO’s prevailing practices and procedures for handling such Products. The quality of all Products tendered into commingled storage for Customer’s account shall be verified either by Customer’s refinery analysis or supplier’s certification, such that Products so tendered shall meet TLO’s Product specifications. All costs for such analysis shall be borne solely by Customer. TLO shall have the right to sample any Product tendered to the Terminal hereunder. The cost of such sampling shall be borne solely by TLO. All Products returned to Customer shall comply with Product specifications in effect on the date the Products are delivered to

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Customer. Notwithstanding any other provision herein, any and all Products that leave the Terminal shall meet all relevant ASTM, EPA, federal and state specifications.
(c) Liability for Commingled Storage . TLO shall exercise reasonable care to ensure that all Products delivered by third parties into commingled storage with Customer’s Products meet applicable Product specifications for such Product that are customary in the location of the Terminal. In the event that Customer’s Products are commingled with third-party Products that do not comply with the minimum quality standards set forth in this Agreement or any Terminal Service Order, TLO shall be liable for all loss, damage and cost incurred thereby.

18. MEASUREMENT AND VOLUME LOSSES
(a) Methods of Measurement .
(i) All quantities of Products received or delivered by or into trucks or marine vessels shall be measured and determined based upon the meter readings at the Terminal, as reflected by delivery tickets or bills of lading, or if such meters are unavailable, by applicable calibration tables, as set forth on a Terminal Service Order or pursuant to mutual agreement of the Parties.
(ii) All quantities of Products received or delivered by or into railcars shall be measured and determined based upon the meter readings at the Terminal, or if such meters are unavailable, by applicable calibration tables, as set forth on a Terminal Service Order or pursuant to mutual agreement of the Parties.
(iii) All quantities of Products received and delivered by pipeline shall be measured and determined based upon the meter readings of the pipeline operator, as reflected by delivery tickets, or if such meters are unavailable, by applicable calibration tables, as set forth on a Terminal Service Order or pursuant to mutual agreement of the Parties.
(iv) Deliveries by book transfer shall be reflected by entries in the books of TLO.
(v) 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. Customer shall have the right, at its sole expense, and in accordance with rack location procedure, to independently certify such calibration. Storage tank gauging shall be performed by TLO’s personnel. TLO’s gauging shall be deemed accurate unless challenged by an independent certified gauger. Customer may perform joint gauging at its sole expense with TLO’s personnel at the time of delivery or receipt of Product, to verify the amount involved. If Customer should request an independent gauger, such gauger must be acceptable to TLO and such gauging shall be at Customer’s sole expense.
(b) Volume Losses . TLO shall bear the risk of any actual volume losses of each Product to the extent that such losses exceed 0.25% of the volumes of such Product received at a Terminal, to be prorated among all Terminal users, during any Month during the Term. Volumes and losses of each Product shall be determined and accounted for as of the end of each Month. To the extent that actual losses of any Product are less than 0.25% during any particular Month, Customer shall repurchase from TLO the difference between the actual loss and the 0.25% allowance at a price per barrel for that Product as reported by the Oil Price Information Service (“ OPIS ”) using the monthly average OPIS unbranded contract rack posting for that Product during the Month in which the volume difference was accounted for. All such sales shall be “AS IS”, “WHERE IS”, without any warranty, express or implied, including warranties of merchantability, fitness or title, all of which are expressly excluded. If volume losses of any Product exceed 0.25% during

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any particular Month, TLO shall pay Customer for the difference between the actual loss and the 0.25% allowance at a price per barrel for that Product as reported by OPIS using the monthly average OPIS unbranded contract rack posting for that Product during the Month in which the volume difference was accounted for. Deliveries on Saturday, Sunday or Federal holidays shall be excluded from the calculation for the applicable Month.

19. PRODUCT DELIVERIES, RECEIPTS AND WITHDRAWALS
(a) Product Deliveries . All supervised deliveries, receipts and withdrawals hereunder shall be made at such times as may be required by Customer upon prior notice and approval by TLO, all in accordance with the agreed-upon scheduling. Unsupervised deliveries, receipts and withdrawals shall be made only with TLO’s prior approval and in strict accordance with TLO’s current operating procedures for the particular Terminal. Customer warrants that all vehicles permitted to enter a Terminal on behalf of Customer shall meet all requirements and standards promulgated by applicable regulatory authority including the Department of Transportation, the Occupational Safety and Health Administration, and the EPA. Customer further warrants that it shall only send to a Terminal those employees, agents and other representatives acting on behalf of and at Customer’s direction who have been properly instructed as to the characteristics and safe hauling methods associated with the Products to be loaded and hauled. Customer further agrees to be responsible to TLO for the performance under this Agreement by its agents and/or representatives receiving or delivering Products at a Terminal.
(b) Loading Devices . Customer shall withdraw from a Terminal only those Products that it is authorized to withdraw hereunder. Customer shall neither duplicate nor permit the duplication of any loading device (i.e., card lock access), provided hereunder. Customer shall be fully and solely responsible for all Products loaded through the use of the loading devices issued to Customer in accordance with this Agreement; provided however, that Customer shall not have any responsibility or liability hereunder in the event that the load authorization system provided hereunder fails or malfunctions in any way unless a credit department override is provided, which authorizes Customer to load the Products.
(c) Legal Compliance . Both Parties shall abide by all federal, state and local statutes, laws and ordinances and all rules and regulations which are promulgated by TLO and which are either furnished to Customer or posted at the particular Terminal, with respect to the use of the particular Terminal as herein provided. It is understood and agreed by Customer that these rules and regulations may be changed, amended or modified by TLO at any time. All changes, amendments and modifications shall become binding upon Customer ten (10) days following the posting of a copy at the particular Terminal or the receipt by Customer of a copy, whichever occurs sooner.
(d) Customer Representatives . For all purposes hereunder, Customer’s jobbers, distributors, Carriers, haulers and other customers designated in writing or otherwise by Customer to have loading privileges under this Agreement or having possession of any loading device furnished to Customer pursuant to this Agreement, together with their respective officers, servants and employees, shall, when they access a Terminal, be deemed to be representatives of Customer.
20. DELIVERIES INTO TRANSPORT TRUCKS
Prior to transporting any Products loaded into transport trucks or railcars at a Terminal, TLO shall make or cause to be made, the following certifications on the delivery receipt or bill of lading covering the Products received:

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“If required by 49 C.F.R. 172.204, this is to certify that the above-named materials are properly classified, described, packaged, marked and labeled, and are in proper condition for transportation according to the applicable regulations of the Department of Transportation. Carrier hereby certifies that the cargo tank used for this shipment is a proper container for the commodity loaded therein and complies with Department of Transportation specifications and certifies that cargo tank is properly placarded and marked to comply with regulations pertaining to hazardous materials.”
TLO shall require each Carrier coming into a Terminal to expressly agree in writing to be bound by the provisions of a carrier access agreement with respect to withdrawals and loading of Products hereunder, to conduct its operations at the Terminal in a safe manner, in accordance with all Applicable Law.

21. ACCOUNTING PROVISIONS AND DOCUMENTATION
(a) Required Reports . TLO shall furnish Customer for each Terminal with the following reports covering services hereunder involving Customer’s Products:
(i) within ten (10) Business Days following the end of the Month, a statement showing, by Product: (A) Customer’s monthly aggregate deliveries into the particular Terminal; (B) Customer’s monthly receipts from the particular Terminal; (C) calculation of all Customer’s monthly storage and handling fees; (D) Customer’s opening inventory for the preceding Month; (E) appropriate volume loss adjustments (as applicable in accordance with Section 18 ); (F) Customer’s closing inventory for the preceding Month; and (G) the actual volumes of TLO Subcontract Customer throughput handled at the particular Terminal during a Month up to the Terminal Minimum Throughput Commitment, pursuant to Section 4(e) ;
(ii) a copy of any meter calibration report, to be available for inspection upon reasonable request by Customer at the particular Terminal following any calibration;
(iii) upon delivery from the particular Terminal, a hard copy bill of lading to the Carrier for each delivery; upon reasonable request only, a hard copy bill of lading shall be provided to Customer’s accounting group; upon each delivery from the particular Terminal, bill of lading information shall be sent electronically through a mutually agreeable system; and
(iv) transfer documents for each in-tank transfer.
(b) Required Maintenance of Truck Loading Capabilities . TLO shall be required to maintain the capabilities to support truck load authorization technologies at each Terminal.

22. AUDIT AND CLAIMS PERIOD
Each Party and its duly authorized agents and/or representatives shall have reasonable access to the accounting records and other documents maintained by the other Party which relate to this Agreement, and shall have the right to audit such records at any reasonable time or times during the Term and for a period of up to three (3) years after termination of this Agreement. Claims as to shortage in quantity or defects in quality shall be made by written notice within ninety (90) days after the delivery in question or shall be deemed to have been waived.


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23. LIEN WAIVERS
TLO hereby waives, relinquishes and releases any and all liens, including without limitation, any and all warehouseman’s liens, custodian’s liens, rights of retention and/or similar rights under all applicable laws, which TLO would or might otherwise have under or with respect to the Products throughput, stored or handled hereunder. TLO further agrees to furnish documents reasonably acceptable to Customer and its lender(s) (if applicable), and to cooperate with Customer in assuring and demonstrating that Products titled in Customer’s name shall not be subject to any lien on any Terminal or TLO’s Products throughput or stored there.

24. LIMITATION ON LIABILITY
(a) No Special Damages . Notwithstanding anything to the contrary contained herein, neither Party shall be liable or responsible to the other Party or such other Party’s affiliated Persons for any consequential, incidental, or punitive damages, or for loss of profits or revenues (collectively referred to as “special damages”) incurred by such Party or its affiliated Persons that arise out of or relate to this Agreement, regardless of whether any such claim arises under or results from contract, negligence, or strict liability of the Party whose liability is being waived hereby; provided that the foregoing limitation is not intended and shall not affect special 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) Claims and Liability for Lost Product . TLO shall not be liable to Customer for lost or damaged Product unless Customer notifies TLO in writing within ninety (90) days of the report of any incident or the date Customer learns of any such loss or damage to the Product. TLO’s maximum liability to Customer for any lost or damaged Product shall be limited to (i) the lesser of (1) the replacement value of the Product at the time of the incident based upon the price as posted by Platts or similar publication for similar Product in the same locality, and if no other similar Product is in the locality, then in the state, or (2) the actual cost paid for the Product by Customer (copies of Customer’s invoices of cost paid must be provided), less (ii) the salvage value, if any, of the damaged Product.
(c) No Guarantees or Warranties . Except as expressly provided in the Agreement, neither Customer 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.

25. INDEMNITIES
(a) TLO Indemnities . Notwithstanding anything else contained in this Agreement or any Terminal Service Order, TLO shall release, defend, protect, indemnify, and hold harmless Customer, its carriers, and each of its and their respective affiliates, officers, directors, employees, agents, contractors, successors, and assigns (excluding any member of the Partnership Group) (collectively the “ Customer Group ”), 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 Customer, TLO or the General Partner, and, as applicable, their carriers, customers, representatives, and agents, (ii) loss of or damage to any property, products, material, and/or equipment belonging to Customer, TLO and, as applicable, their carriers, customers, representatives, and agents, and each of their respective affiliates, contractors, and

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subcontractors (except for those volume losses of Products provided for herein), (iii) loss of or damage to any other property, products, material, and/or equipment of any other description (except for those volume losses of Products provided for herein), and/or personal or bodily injury to, or death of any other Person or Persons; and with respect to clauses (i) through (iii) above, which is caused by or resulting in whole or in part from the negligent or wrongful acts or omissions of TLO or the General Partner in connection with the ownership or operation of the particular Terminal and the services provided hereunder, and, as applicable, their carriers, customers (other than Customer), representatives, and agents, or those of their respective employees with respect to such matters, and (iv) any losses incurred by Customer due to violations of this Agreement or any Terminal Service Order by TLO, or, as applicable, its customers (other than Customer), representatives, and agents; PROVIDED THAT TLO SHALL NOT BE OBLIGATED TO RELEASE, INDEMNIFY OR HOLD HARMLESS CUSTOMER OR ANY MEMBER OF THE CUSTOMER GROUP FROM AND AGAINST ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, STRICT LIABILITY OR THE NEGLIGENT ACTS, ERRORS OR OMISSIONS OR WILLFUL MISCONDUCT OF CUSTOMER OR ANY MEMBER OF THE CUSTOMER GROUP.
(b) Customer Indemnities . Notwithstanding anything else contained in this Agreement or any Terminal Service Order, Customer shall release, defend, protect, indemnify, and hold harmless TLO, General Partner, the Partnership, their subsidiaries and their respective officers, directors, members, managers, employees, agents, contractors, successors, and assigns (collectively the “ Partnership Group ”) 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 TLO, the General Partner, Customer, and, as applicable, their carriers, customers, representatives, and agents; (ii) loss of or damage to any property, products, material, and/or equipment belonging to TLO, Customer, and, as applicable, their carriers, customers, representatives, and agents, and each of their respective affiliates, contractors, and subcontractors (except for those volume losses of Products provided for herein); (iii) loss of or damage to any other property, products, material, and/or equipment of any other description (except for those volume losses of Products provided for herein), and/or personal or bodily injury to, or death of any other Person or Persons; and with respect to clauses (i) through (iii) above, which is caused by or resulting in whole or in part from the negligent or wrongful acts or omissions of Customer, in connection with Customer’s use of the particular Terminal and the services provided hereunder and Customer’s Products stored hereunder, and, as applicable, its Carriers, customers, representatives, and agents, or those of their respective employees with respect to such matters; and (iv) any losses incurred by TLO due to violations of this Agreement or any Terminal Service Order by Customer, or, as applicable, its carriers, customers, representatives, and agents; PROVIDED THAT CUSTOMER SHALL NOT BE OBLIGATED TO RELEASE, INDEMNIFY OR HOLD HARMLESS TLO OR ANY MEMBER OF THE PARTNERSHIP GROUP FROM AND AGAINST ANY CLAIMS TO THE EXTENT THEY RESULT FROM THE BREACH OF CONTRACT, STRICT LIABILITY OR THE NEGLIGENT ACTS, ERRORS OR OMISSIONS OR WILLFUL MISCONDUCT OF TLO OR ANY MEMBER OF THE PARTNERSHIP GROUP.
(c) Written Claim . Neither Party shall be obligated to indemnify the other Party or be liable to the other Party unless a written claim for indemnity is delivered to the other Party within ninety (90) days after the date that a claim is reported or discovered, whichever is earlier.
(d) No Limitation . Except as expressly provided otherwise in this Agreement, the scope of these indemnity provisions may not be altered, restricted, limited, or changed by any other provision of this Agreement. The indemnity obligations of the Parties as set out in this Section 25 are independent of any

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insurance requirements as set out in Section 26 , and such indemnity obligations shall not be lessened or extinguished by reason of a Party’s failure to obtain the required insurance coverages or by any defenses asserted by a Party’s insurers.
(e) Survival . These indemnity obligations shall survive the termination of this Agreement until all applicable statutes of limitation have run regarding any claims that could be made with respect to the activities contemplated by this Agreement.
(f) Mutual and Express Acknowledgement . 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.
(g) Third Party Indemnification . If any Party has the rights to indemnification from a third party, the indemnifying party under this Agreement shall have the right of subrogation with respect to any amounts received from such third-party indemnification claim.

26. INSURANCE
(a) Minimum Limits . At all times during the Term and for a period of two (2) years after termination of this Agreement for any coverage maintained on a “claims-made” or “occurrence” basis, Customer and/or its Carrier (if applicable) shall maintain at their expense the below listed insurance in the amounts specified below, or self-insurance in such amounts as may be agreed pursuant to a Terminal Service Order. Customer shall require that Carrier cause all of its contractors providing authorized drivers or authorized vehicles, to carry such insurance, and Customer shall be liable to TLO for their failure to do so. Such insurance shall provide coverage to TLO and such policies, other than Worker’s Compensation Insurance, shall include TLO as an Additional Insured. Each policy shall provide that it is primary to and not contributory with any other insurance, including any self-insured retention, maintained by TLO (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 TLO, and eligible to do business in the state where the particular Terminal is located 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 Customer and/or the Carrier may procure worker’s compensation insurance from the state fund of the state where the particular Terminal is located. All limits listed below are required MINIMUM LIMITS:
(i) Workers Compensation and Occupational Disease Insurance which fully complies with Applicable Law of the state where the particular Terminal is located, 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

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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, including contractual liability insurance covering Carrier’s indemnity obligations under this Agreement, 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 TLO 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 Customer;
(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 Customer or by Applicable Law from time to time. Coverage must assure compliance with Sections 29 and 30 of the Motor Carrier Act of 1980 and all applicable rules and regulations of the Federal Highway Administration’s Bureau of Motor Carrier Safety and Interstate Commerce Commissioner (Form MCS 90 Endorsement). Limits of liability for this insurance must be in accordance with the financial responsibility requirement of the Motor Carrier Act, but 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;
(vi) Pollution Legal Liability with limits not less than $25,000,000 per loss with an annual aggregate of $25,000,000. Coverage shall apply to bodily injury and property damage including loss of use of damaged property and property that has not been physically injured; cleanup costs, defense, including costs and expenses incurred in the investigation, defense or settlement of claim; and
(vii) Cargo/Inventory Insurance, with a limit of no less than $1,000,000, which property insurance shall be first-party insurance to adequately cover all Products owned by Customer located at the particular Terminal.
(b) Waiver of Subrogation . All such policies must be endorsed with a Waiver of Subrogation endorsement, effectively waiving rights of recovery under subrogation or otherwise, against TLO, and shall contain where applicable, a severability of interest clause and a standard cross liability clause.
(c) Copies of Insurance Certificates or Policies . Upon execution of this Agreement and prior to the operation of any equipment by Customer, Carrier or its authorized drivers at the particular Terminal, Customer and/or Carrier will furnish to TLO, and at least annually thereafter (or at any other times upon request by TLO) during the Term (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, including on behalf of Carrier’s contractors providing authorized vehicles or authorized drivers. Such certificates shall be in the form of the “Accord” Certificate of Insurance, and reflect that they are for the benefit of TLO and shall provide that there will be no material change in or cancellation of the policies unless TLO is given at least thirty (30) days prior written notice. Certificates providing evidence of renewal of coverage shall be furnished to TLO prior to policy expiration.
(d) Responsibility for Deductibles . Customer and/or Carrier shall be solely responsible for any deductibles or self-insured retention.

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27. GOVERNMENT REGULATIONS
(a) Party Certification . Each Party certifies that none of the Products covered by this Agreement or any Terminal Service Order were derived from crude petroleum, petrochemical, or gas which was produced or withdrawn from storage 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) Licenses and Permits . TLO shall maintain all necessary licenses and permits for the storage of Products at each Terminal.
(c) Compliance with Applicable Law . The Parties are entering into this Agreement and any Terminal Service Order in reliance upon and shall comply in all material respects with all Applicable Law which directly or indirectly affects the Products throughput hereunder, or any receipt, throughput delivery, transportation, handling or storage of Products hereunder or the ownership, operation or condition of the particular Terminal. Each Party shall be responsible for compliance with all Applicable Law 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 and any Terminal Service Order shall at any time be in conflict with any requirement of Applicable Law, then this Agreement and any Terminal Service Order 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 and any Terminal Service Order shall remain effective.
(d) Material Change in 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 or any Terminal Service Order and which has a material adverse economic impact upon a Party, either Party, acting in good faith, shall have the option to request renegotiation of the relevant provisions of this Agreement or a Terminal Service Order with respect to future performance. The Parties shall then meet to negotiate in good faith amendments to this Agreement or to an applicable Terminal Service Order that will conform to the new Applicable Law while preserving the Parties’ economic, operational, commercial and competitive arrangements in accordance with the understandings set forth herein.

28. SUSPENSION OF REFINERY OPERATIONS
(a) No Termination . This Agreement shall continue in full force and effect regardless of whether Customer decides to permanently or indefinitely suspend refining operations at the Refinery for any period.
(b) Continued Liability for Shortfall Payments . If refining operations at the Refinery is suspended for any reason (including Refinery turnarounds and other scheduled maintenance), then Customer shall remain liable for Shortfall Payments under this Agreement for the duration of the suspension.

29. FORCE MAJEURE
(a) Definitions and Notice . As soon as possible upon the occurrence of a Force Majeure, TLO shall provide Customer 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 ”). For the duration of the Force Majeure Period, Customer shall be permitted to reduce its Terminal Minimum Throughput Commitment and/or Rail Minimum Commitment for the particular Terminal as provided in Section 30(b) .

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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, subject to Section 30 below, 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 (12)-Month period. For the avoidance of doubt, neither Party may exercise its right under this Section 29(a) to terminate this Agreement as a result of a Force Majeure if the affected Terminal has been restored to working order since the applicable Force Majeure, including pursuant to a Restoration.
(b) Revocation of Customer Termination Notice . Notwithstanding the foregoing, if Customer delivers a Termination Notice to TLO (the “ Customer Termination Notice ”) and, within thirty (30) days after receiving such Customer Termination Notice, TLO notifies Customer 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 and Customer mutually agrees (which agreement shall not be unreasonably withheld), then the Customer Termination Notice shall be deemed revoked and the applicable portion of this Agreement shall continue in full force and effect as if such Customer Termination Notice had never been given.

30. CAPABILITIES OF FACILITIES
(a) Service Interruption . Subject to Force Majeure and interruptions for routine repair and maintenance, consistent with customary terminal industry standards, TLO shall use reasonable commercial efforts to minimize the interruption of service at each of the Terminals or any portion thereof. TLO shall promptly inform Customer operational personnel of any anticipated partial or complete interruption of service at any Terminal, including relevant information about the nature, extent, cause and expected duration of the interruption and the actions TLO is taking to resume full operations, provided that TLO shall not have any liability for any failure to notify, or delay in notifying, Customer of any such matters except to the extent Customer has been materially prejudiced or damaged by such failure or delay.
(b) Restoration of Capacity . Subject to Force Majeure and interruptions for routine repair and maintenance, consistent with customary terminal industry standards, TLO shall maintain each Terminal in a condition and with a capacity sufficient to throughput a volume of Customer’s Products at least equal to the Terminal Reserved Capacity for the particular Terminal. TLO’s obligations may be temporarily suspended during the occurrence of, and for the entire duration of, a Force Majeure or any interruption of service that prevents TLO from terminalling the Terminal Reserved Capacity for the particular Terminal or maintaining the Rail Reserved Capacity. To the extent TLO is prevented from terminalling volumes equal to the Terminal Reserved Capacity for the particular Terminal or loading and unloading rail car volumes equal to the Rail Reserved Capacity for reasons of Force Majeure or other interruption of service, then Customer’s obligation to throughput the Terminal Minimum Throughput Commitment or Rail Minimum Capacity and pay any Shortfall Payment shall be reduced proportionately. At such time as TLO is capable of terminalling volumes equal to the Terminal Reserved Capacity, Customer’s obligation to throughput the full Terminal Minimum Throughput Commitment for the particular Terminal shall be restored. At such time as TLO is capable of loading and unloading railcar volumes equal to the Rail Minimum Capacity, Customer’s obligation to meet the full Rail Minimum Commitment shall be restored. If for any reason, including, without limitation, a Force Majeure event, the throughput capacity of a Terminal should fall below the Terminal Reserved Capacity or the Rail Reserved Capacity, then within a reasonable period of time after the commencement of such reduction, TLO shall make repairs to the Terminal to restore the capacity of the Terminal to that required for throughput of the Terminal Reserved Capacity and/or the Rail Reserved Capacity (“ Restoration ”). Except

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as provided below in Section 30(c) , all of such Restoration shall be at TLO’s cost and expense, unless the damage creating the need for such repairs was caused by the negligence or willful misconduct of Customer, its employees, agents or customers or the failure of Customer’s Products to meet the specifications as provided for in Section 17(a) .
(c) Capacity Resolution . In the event of the failure of TLO to maintain a Terminal in a condition and with a capacity sufficient to throughput a volume of Customer’s Products equal to the Terminal Reserved Capacity for the particular terminal and/or the Rail Reserved Capacity, then either Party shall have the right to call a meeting between executives of both Parties by providing at least two (2) Business Days’ advance written notice. Any such meeting shall be held at a mutually agreeable location and will be attended by executives of both Parties each having sufficient authority to commit his or her respective Party to a Capacity Resolution (hereinafter defined). At the meeting, the Parties will negotiate in good faith with the objective of reaching a joint resolution for the Restoration of capacity at the particular Terminal which will, among other things, specify steps to be taken by TLO to fully accomplish Restoration and the deadlines by which the Restoration must be completed (the “ Capacity Resolution ”). Without limiting the generality of the foregoing, the Capacity Resolution shall set forth an agreed upon time schedule for the Restoration activities. Such time schedule shall be reasonable under the circumstances, consistent with customary terminal industry standards and shall take into consideration TLO’s economic considerations relating to costs of the repairs and Customer’s requirements concerning its refining and marketing operations. TLO shall use commercially reasonable efforts to continue to provide storage and throughput and, if applicable, railcar loading and unloading of Customer’s Products at the affected Terminal, to the extent the affected Terminal has capability of doing so, during the period before Restoration is completed. In the event that Customer’s economic considerations justify incurring additional costs to restore the Terminal in a more expedited manner than the time schedule determined in accordance with the preceding sentence, Customer may require TLO to expedite the Restoration to the extent reasonably possible, subject to Customer’s payment, in advance, of the estimated incremental costs to be incurred as a result of the expedited time schedule. In the event the Parties agree to an expedited Restoration plan in which Customer agrees to fund a portion of the Restoration cost, then neither Party shall have the right to terminate this Agreement in connection with a Force Majeure, so long as such Restoration is completed with due diligence, and Customer shall pay its portion of the Restoration costs to TLO in advance based on an estimate based on reasonable engineering standards promulgated by the Association for Facilities Engineering. Upon completion, Customer shall pay the difference between the actual portion of Restoration costs to be paid by Customer pursuant to this Section 30(c) and the estimated amount paid under the preceding sentence within thirty (30) days after receipt of TLO’s invoice therefor, or, if appropriate, TLO shall pay Customer the excess of the estimate paid by Customer over TLO’s actual costs as previously described within thirty (30) days after completion of the Restoration.
(d) Restoration . If at any time after the occurrence of (x) a Partnership Change of Control or (y) a sale of the Refinery, TLO either (i) refuses or fails to meet with Customer within the period set forth in Section 30(c) , (ii) fails to agree to perform a Capacity Resolution in accordance with the standards set forth in Section 30(c) , or (iii) fails to perform its obligations in compliance with the terms of a Capacity Resolution, Customer may, as its sole remedy for any breach by TLO of any of its obligations under Section 30(c) , require TLO to complete a Restoration of the affected Terminal, subject to and to the extent permitted under the terms, conditions and/or restrictions of applicable leases, permits and/or Applicable Law. Any such Restoration required under this Section 30(d) shall be completed by TLO at Customer’s cost. TLO shall use commercially reasonable efforts to continue to provide storage and throughput and, if applicable, railcar loading and unloading of Customer’s Products at the affected Terminal, during the period while such Restoration is being completed. Any work performed by TLO pursuant to this Section 30(d) shall be performed and completed in a good and workmanlike manner consistent with applicable industry standards and in

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accordance with all Applicable Law. Additionally, during such period after the occurrence of (x) a Partnership Change of Control or (y) a sale of the Refinery, Customer may exercise any remedies available to it under this Agreement (other than termination), including the right to immediately seek temporary and permanent injunctive relief for specific performance by TLO of the applicable provisions of this Agreement, including, without limitation, the obligation to make Restorations as described herein.
(e) Commingled Products . Unless otherwise specified in a Terminal Service Order, all throughput of Customer’s volumes, along with storage related to such throughput, shall be on a fungible commingled basis, and TLO may commingle such Products with Products of third parties of like grade and kind. TLO shall have the right to enter into arrangements with third parties to throughput Products at a Terminal and provide storage related to such throughput; provided however, that TLO shall not enter into any third party arrangements that would restrict or limit the ability of Customer to throughput the Terminal Reserved Capacity or, if applicable, the Rail Reserved Capacity at the particular Terminal each Month without Customer’s consent.
(f) Storage Tank Heels . All Tank Heels shall be allocated among storage users on a pro rata basis. Tank Heels cannot be withdrawn from any tank without prior approval of TLO. For storage tanks and capacities identified on a Terminal Service Order as dedicated to and used exclusively for the storage and throughput of Customer’s Product, Customer shall be responsible for providing all Tank Heels required for operation of such tanks.

31. TERMINATION
(a) Default . A Party shall be in default under this Agreement if:
(i) the Party breaches any provision of this Agreement or a Terminal Service Order, which breach has a material adverse effect on the other Party (with such material adverse effect being determined based on this Agreement and all Terminal Service Orders considered as a whole), and such breach is not excused by Force Majeure or cured within fifteen (15) Business Days after notice thereof (which notice shall describe such breach in reasonable detail) is received by such Party (unless such failure is not commercially reasonably capable of being cured in such fifteen (15) Business Day period in which case such Party shall have commenced remedial action to cure such breach and shall continue to diligently and timely pursue the completion of such remedial action after such notice); 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.
(b) Rights upon Default . If either of the Parties is in default as described above, then (A) if Customer is in default, TLO may or (B) if TLO is in default, Customer 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) Obligation to Cure Breach . If a Party breaches any provision of this Agreement or a Terminal Service Order, which breach does not have a material adverse effect on the other Party, the breaching Party shall still have the obligation to cure such breach.

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(d) Product Removal . Customer shall, upon expiration or termination of this Agreement, promptly remove all of its Products including any downgraded and interface Product and Transmix from each Terminal, and TLO shall remove the remaining Tank Heels and tank bottoms and deliver them to Customer or Customer’s designee, within thirty (30) days of such termination or expiration. In the event all of the Product is not removed within such thirty (30) day period, Customer shall be assessed a storage fee to all Products held in storage more than thirty (30) days beyond the termination or expiration of this Agreement until such time Customer’s entire Product is removed from the particular Terminal; provided however, that Customer shall not be assessed any storage fees associated with the removal of Product if Customer’s ability to remove such Product is delayed or hindered by TLO, its agents or contractors for any reason. Customer shall pay the Terminalling Service Fee for all Products delivered from the particular Terminal after such Termination, together with the Rail Loading Services Fee for all volumes loaded onto railcars after termination and any fees for Ancillary Services applicable to such deliveries, at the rates established under the then applicable Terminal Service Order.
(e) Equipment Removal . Customer shall, upon expiration or termination of this Agreement, promptly remove any and all of its owned equipment (except any such equipment purchased by TLO pursuant to Section 9(f) above), and restore the particular Terminal to its condition prior to the installation of such equipment.

32. RIGHT TO ENTER INTO A NEW TERMINALLING AGREEMENT
(a) New Terminalling Services Agreement . Upon termination of this Agreement or a Terminal Service Order for reasons other than (x) a default by Customer and (y) any other termination of this Agreement or a Terminal Service Order initiated by TLO pursuant to Section 31 , Customer shall have the right to require TLO to enter into a new terminalling services agreement with Customer that (i) is consistent with the terms set forth in this Agreement, (ii) relates to the Terminals, 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 terminalling services agreement shall not extend beyond September 16, 2036.
(b) Terminalling Right of First Refusal . In the event that TLO proposes to enter into a terminalling services agreement with a third party for any Terminal within two (2) years after the termination of this Agreement for reasons other than (x) by default by Customer and (y) any other termination of this Agreement initiated by TLO pursuant to Section 31 , TLO shall give Customer ninety (90) days’ prior written notice of any proposed new terminalling services 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 Customer’s receipt of such written notice) (the “ Terminalling First Offer Period ”) in which Customer may make a good faith offer to enter into a new terminalling agreement with TLO (the “ Terminalling Right of First Refusal ”). If Customer makes an offer on terms no less favorable to TLO than the third-party offer with respect to such terminalling services agreement during the Terminalling First Offer Period, then TLO shall be obligated to enter into a terminalling services agreement with Customer on the terms set forth in Customer’s offer to TLO. If Customer does not exercise its Terminalling 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 terminalling services agreement. If no third party agreement is consummated during such ninety-day period, the terms and conditions of this Section 32(b) shall again become effective.

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33. SUBCONTRACT
Should Customer desire to subcontract to a third party (“ Subcontract Customer ”) any dedicated or commingled storage subject to a Terminal Service Order, Customer must notify TLO in writing prior to the proposed start of the subcontract. TLO has the right to approve any Subcontract Customer, which approval shall not be unreasonably withheld, conditioned or delayed. Unless otherwise agreed in writing between Customer and TLO, and between Subcontract Customer and TLO, Customer will continue to be liable for all terms and conditions of this Agreement related to any subcontracted storage tank, including but not limited to, remittance of any fees set forth in a Terminal Service Order applicable to the subcontracted storage tank. Customer shall be responsible for collection of any fees due to Customer from the Subcontract Customer. Customer and TLO may mutually agree that operational notices concerning scheduling and similar matters can be directly provided between TLO and any Subcontract Customer.

34. ASSIGNMENT; PARTNERSHIP CHANGE OF CONTROL
(a) Assignment to TLO . 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.
(b) Customer Assignment to Third Party . Customer shall not assign all of its obligations hereunder or under a Terminal Service Order without TLO’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however; that Customer may assign this Agreement, without TLO’s consent, in connection with a sale by Customer of the Refinery so long as the transferee: (i) agrees to assume all of Customer’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 Customer in its reasonable judgment.
(c) TLO Assignment to Third Party . TLO shall not assign its rights or obligations under this Agreement without Customer’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that (i) TLO may assign this Agreement without Customer’s consent in connection with a sale by TLO of the Terminals 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 Customer; and (ii) TLO shall be permitted to make a collateral assignment of this Agreement solely to secure working capital financing for TLO.
(d) Notification of Assignment . 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 and any Terminal Service Orders shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.
(e) Partnership Change of Control . Customer’s obligations hereunder shall not terminate in connection with a Partnership Change of Control, provided however, that in the case of a Partnership Change of Control, Customer shall have the option to extend the Term as provided in Section 2 . TLO shall provide Customer with notice of any Partnership Change of Control at least sixty (60) days prior to the effective date thereof.

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35. NOTICE
All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (a) if by transmission by hand delivery, when delivered; (b) 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; (c) 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 (d) if by e-mail, one Business Day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows:

 
If to Customer, to:
 
 
 
 
 
Tesoro Alaska Company LLC
19100 Ridgewood Parkway
San Antonio, Texas 78259
 
 
 
 
 
For legal notices :
Attention: General Counsel
 
 
 
 
 
For all other notices and communications :
Attention: Dana S. Holden
phone: (210) 626-6442
email: Dana.S.Holden@tsocorp.com
 
 
 
 
 
If to TLO, to:
 
 
 
 
 
Tesoro Logistics Operations LLC
 
 
19100 Ridgewood Parkway
 
 
San Antonio, Texas 78259
 
 
 
 
 
For legal notices:
 
 
Attention: General Counsel
 
 
 
 
 
For all other notices and communications:
 
 
Attention: Don.J.Sorensen, Senior Vice President, Logistics
 
 
phone: (360) 293-9116
 
 
email: Don.J.Sorensen@tsocorp.com
 
or to such other address or to such other Person as either Party will have last designated by notice to the other Party.

36. CONFIDENTIAL INFORMATION
(a) Confidential Information and Exceptions Thereto . Each Party shall use reasonable efforts to retain the other Parties’ Confidential Information in confidence and not disclose the same to any third party nor use the same, except as authorized by the disclosing Party in writing or as expressly permitted in this

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Section 36 . Each Party further agrees to take the same care with the other Party’s Confidential Information as it does with its own, but in no event less than a reasonable degree of care. Excepted from these obligations of confidence and non-use is that information which:
(i) is available, or becomes available, to the general public without fault of the receiving Party;
(ii) was in the possession of the receiving Party on a non-confidential basis prior to receipt of the same from the disclosing Party (it being understood, for the avoidance of doubt, that this exception shall not apply to information of TLO that was in the possession of Customer or any of its affiliates as a result of their ownership or operation of the particular Terminal prior to the Commencement Date);
(iii) is obtained by the receiving Party without an obligation of confidence from a third party who is rightfully in possession of such information and, to the receiving Party’s knowledge, is under no obligation of confidentiality to the disclosing Party; or
(iv) is independently developed by the receiving Party without reference to or use of the disclosing Party’s Confidential Information.
For the purpose of this Section 36 , a specific item of Confidential Information shall not be deemed to be within the foregoing exceptions merely because it is embraced by, or underlies, more general information in the public domain or in the possession of the receiving Party.
(b) Required Disclosure . Notwithstanding Section 36(a) above, if the receiving Party becomes legally compelled to disclose the Confidential Information by a court, Governmental Authority or Applicable Law, or is required to disclose by the listing standards of any applicable securities exchange, any of the disclosing Party’s Confidential Information, the receiving Party shall promptly advise the disclosing Party of such requirement to disclose Confidential Information as soon as the receiving Party becomes aware that such a requirement to disclose might become effective, in order that, where possible, the disclosing Party may seek a protective order or such other remedy as the disclosing Party may consider appropriate in the circumstances. The receiving Party shall disclose only that portion of the disclosing Party’s Confidential Information that it is required to disclose and shall cooperate with the disclosing Party in allowing the disclosing Party to obtain such protective order or other relief.
(c) Return of Confidential Information . Upon written request by the disclosing Party, all of the disclosing Party’s Confidential Information in whatever form shall be returned to the disclosing Party upon termination of this Agreement or destroyed with destruction certified by the receiving Party, without the receiving Party retaining copies thereof except that one copy of all such Confidential Information may be retained by a Party’s legal department solely to the extent that such Party is required to keep a copy of such Confidential Information pursuant to Applicable Law, and the receiving Party shall be entitled to retain any Confidential Information in the electronic form or stored on automatic computer back-up archiving systems during the period such backup or archived materials are retained under such Party’s customary procedures and policies; provided, however, that any Confidential Information retained by the receiving Party shall be maintained subject to confidentiality pursuant to the terms of this Section 36 , and such archived or back-up Confidential Information shall not be accessed except as required by Applicable Law.
(d) Receiving Party Personnel . The receiving Party will limit access to the Confidential Information of the disclosing Party to those of its employees, attorneys and contractors that have a need to know such information in order for the receiving Party to exercise or perform its rights and obligations under this Agreement (the “ Receiving Party Personnel ”). The Receiving Party Personnel who have access to any

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Confidential Information of the disclosing Party will be made aware of the confidentiality provision of this Agreement, and will be required to abide by the terms thereof. Any third party contractors that are given access to Confidential Information of a disclosing Party pursuant to the terms hereof shall be required to sign a written agreement pursuant to which such Receiving Party Personnel agree to be bound by the provisions of this Agreement, which written agreement will expressly state that it is enforceable against such Receiving Party Personnel by the disclosing Party.
(e) Survival . The obligation of confidentiality under this Section 36 shall survive the termination of this Agreement for a period of two (2) years.

37. MISCELLANEOUS
(a) 2014 Nikiski TSA . As of the Commencement Date, this Agreement shall supersede the 2014 Nikiski TSA in its entirety and the provisions of the Nikiski TSA shall not apply to any transactions between Customer and TLO occurring on or after the Commencement Date.
(b) Amendment or Modification . This Agreement and any Terminal Service Orders may be amended or modified only by a written instrument executed by the Parties. Any of the terms and conditions of this Agreement or a Terminal Service Order may be waived in writing at any time by the Party entitled to the benefits thereof. No waiver of any of the terms and conditions of this Agreement, a Terminal Service Order or any breach thereof, will be effective unless in writing signed by a duly authorized individual on behalf of the Party against which the waiver is sought to be enforced. No waiver of any term or condition or of any breach of this Agreement or a Terminal Service Order will be deemed or will constitute a waiver of any other term or condition or of any later breach (whether or not similar), nor will such waiver constitute a continuing waiver unless otherwise expressly provided.
(c) Integration . This Agreement, together with the Schedules and Terminal Service Orders and the other agreements executed on the date hereof in connection with the transactions contemplated by the Contribution Agreement, constitutes the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings of the Parties in connection therewith. In the event of a conflict of provisions of this Agreement and the Third Amended and Restated Omnibus Agreement, the provisions of the Third Amended and Restated Omnibus Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in this Agreement.
(d) Construction and Interpretation . In interpreting this Agreement, unless the context expressly requires otherwise, all of the following apply to the interpretation of this Agreement:
(i)    Preparation of this Agreement has been a joint effort of the Parties and the resulting Agreement against one of the Parties as the drafting Party.
(ii)    Plural and singular words each include the other.
(iii)    Masculine, feminine and neutral genders each include the others.
(iv)    The word “or” is not exclusive and includes “and/or.”
(v)    The words “includes” and “including” are not limiting.
(vi)    References to the Parties include their respective successors and permitted assignees.
(vii)    The headings in this Agreement are included for convenience and do not affect the construction or interpretation of any provision of, or the rights or obligations of a Party under, this

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Agreement.
(e) Applicable Law; Forum, Venue and Jurisdiction . This Agreement and any Terminal Service Orders shall be governed by the laws of the State of Texas without giving effect to its conflict of laws principles. Each Party hereby irrevocably submits to the exclusive jurisdiction of 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. The Parties expressly and irrevocably submit to the jurisdiction of said Courts and irrevocably waive any objection which they may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of or relating to this Agreement or any Terminal Service Order brought in such Courts, irrevocably waive any claim that any such action, suit or proceeding brought in any such Court has been brought in an inconvenient forum and further irrevocably waive the right to object, with respect to such claim, action, suit or proceeding brought in any such Court, that such Court does not have jurisdiction over such Party. The Parties hereby irrevocably consent to the service of process by registered mail, postage prepaid, or by personal service within or without the State of Texas. Nothing contained herein shall affect the right to serve process in any manner permitted by law.
(f) Counterparts . This Agreement and any Terminal Service Order hereunder may be executed in one or more counterparts (including by facsimile or portable document format (.pdf)) for the convenience of the Parties hereto, each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement.
(g) Severability . Whenever possible, each provision of this Agreement and any Terminal Service Order will be interpreted in such manner as to be valid and effective under Applicable Law, but if any provision of this Agreement, a Terminal Service Order or the application of any such provision to any Person or circumstance will be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith with a view to substitute for such provision a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
(h) No Third Party Rights . Except as specifically provided in Section 25 herein, it is expressly understood that the provisions of this Agreement or any Terminal Service Order do not impart enforceable rights in anyone who is not a Party or successor or permitted assignee of a Party.
(i) Jury Waiver . EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDINGS RELATING TO THIS AGREEMENT OR ANY PERFORMANCE OR FAILURE TO PERFORM OF ANY OBLIGATION HEREUNDER.
[Signature Page Follows]



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

TESORO LOGISTICS OPERATIONS LLC
 
TESORO ALASKA COMPANY LLC
 
 
 
 
 
 
 
 
TESORO ALASKA TERMINALS LLC
 
 
 
 
 
By:
/s/ Phillip M. Anderson
 
By:
/s/ Gregory J. Goff
 
Phillip M. Anderson
 
 
Gregory J. Goff
 
President
 
 
President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Solely with respect to Section 34(a) :
 
Solely with respect to Section 34(a) :
 
 
 
 
 
TESORO LOGISTICS LP
 
TESORO LOGISTICS GP, LLC
 
 
 
 
 
By:
Tesoro Logistics GP, LLC, its general partner
 
By:
/s/ Phillip M. Anderson
 
 
 
Phillip M. Anderson
 
 
 
 
President
By:
/s/ Phillip M. Anderson
 
 
 
 
Phillip M. Anderson
 
 
 
 
President
 
 
 


Signature Page to Alaska Terminalling Services Agreement



SCHEDULE A

TERMINALS
MINIMUM THROUGHPUT COMMITMENT AND RESERVED CAPACITY

Terminal
Minimum Throughput Commitment (bpd)
Reserved Capacity (bpd)
Anchorage
17,840
20,988
Nikiski
3,000
3,529
Fairbanks
595
700


Schedule A
Alaska Terminalling Services Agreement



Schedule B

RAIL MINIMUM COMMITMENT AND RESERVED CAPACITY

Product
 
Minimum Commitment
 
Reserved Capacity
 
 
(bpd)
 
(bpd)
Refined Products
 
5,950
 
7,000



Schedule B
Alaska Terminalling Services Agreement



EXHIBIT 1
FORM OF TERMINAL SERVICE ORDER
[Name of Applicable Terminal] - (___________, 20__)

This Terminal Service Order is entered as of ___________, 20__, by and between Tesoro Alaska Company LLC, a Delaware limited liability company, and Tesoro Logistics Operations LLC, a Delaware limited liability company, pursuant to and in accordance with the terms of the Alaska Terminalling Services Agreement, dated as of September __, 2016, by and among such parties and Tesoro Logistics GP, LLC, a Delaware limited liability company, and Tesoro Logistics LP, a Delaware limited partnership (as amended, supplemented, or otherwise modified from time to time, the “ Agreement ”).
Capitalized terms not otherwise defined herein shall have the meaning set forth in the Agreement.
Pursuant to Section 15 of the Agreement, the parties hereto agree to the following provisions:
[Insert applicable provisions:
(i) allocation of throughput capacity by Product, and the rates by Product for determining the Terminalling Service Fee pursuant to Section 4 ;
(ii) identification of tanks to be utilized for dedicated storage tanks and the Storage Services Fee pursuant to Section 5 ;
(iii) rail loading and unloading services and the Rail Loading Services Fee pursuant to Section 6 ;
(iv) Passthrough charges pursuant to Section 7 ;
(v)
Transmix handling fees pursuant to Section 8 ;
(vi)
additization pursuant to Section 9 ;
(vii) special or proprietary additive injection services, including any installation and maintenance of special additive equipment, pursuant to Section 9(f) , and the fees related thereto;
(viii)
ethanol blending services pursuant to Section 10 and the fees related thereto;
(ix)
reimbursement related to newly imposed taxes pursuant to Section 12 ;
(x) Surcharges related to expenditures as a result of newly imposed laws and regulations pursuant to Section 13 ;
(xi)
tank cleaning or conversion pursuant to Section 14 ; and
(xii)
any other services as may be agreed.]
Except as set forth in this Terminal Service Order, the other terms of the Agreement shall continue in full force and effect and shall apply to the terms of this Terminal Service Order.
[Signature Page Follows]

Exhibit 1
Alaska Terminalling Services Agreement



IN WITNESS WHEREOF , the parties hereto have duly executed this Terminal Service Order as of the date first written above.

 
TESORO LOGISTICS OPERATIONS LLC
 
 
TESORO ALASKA COMPANY LLC
 
 
 
 
 
By:
 
 
By:
 
 
 
 
 
 
Name:
 
 
Name:
 
 
 
 
 
 
Title:
 
 
Title:
 


Exhibit 1
Alaska Terminalling Services Agreement



Exhibit 10.3

SECOND AMENDED AND RESTATED
REPRESENTATION AND SERVICES AGREEMENT FOR OIL SPILL CONTINGENCY PLANNING, RESPONSE AND REMEDIATION

This Second Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation (this “ Agreement ”) is dated this 16th day of September, 2016, by and among Tesoro Companies, Inc. (“ TCI ”), a Delaware corporation, Tesoro Maritime Company (“ TMC ”), a Delaware corporation, Tesoro Refining & Marketing Company LLC (“ TRMC ”), a Delaware limited liability company, Tesoro Alaska Company LLC (“ TAC ”), a Delaware limited liability company, Kenai Pipe Line Company (“KPL”), a Delaware corporation, Tesoro Alaska Pipeline Company LLC (“ TAPL ”), a Delaware limited liability company, Carson Cogeneration Company (“ CCC ”), a Delaware corporation, Tesoro Great Plains Midstream LLC (“ TGP ”), Tesoro Great Plains Gathering & Marketing LLC (“ TGPGM ”), BakkenLink Pipeline LLC (“ BLP ”), ND Land Holdings LLC (“ NDLH ”), Tesoro Logistics Operations LLC (“ TLO ”), a Delaware limited liability company, Tesoro High Plains Pipeline Company LLC (“ THPP ”), a Delaware limited liability company, Tesoro Logistics Pipelines LLC (“ TLP ”), Tesoro Logistics Northwest Pipeline LLC (“ TLNP ”), a Delaware limited liability company, Tesoro SoCal Pipeline Company LLC, (“ TSCP ”), a Delaware limited liability company, QEP Field Services, LLC (“ QEPFS ”), a Delaware limited liability company, QEPM Gathering I, LLC (“ QGI ”), a Delaware limited liability company, Green River Processing, LLC (“ GRP ”), a Delaware limited liability company, Rendezvous Pipeline Company, LLC (“ RPL ”), a Delaware limited liability company, and Tesoro Alaska Terminals LLC, (“ TAT ”), a Delaware limited liability company, and each other person who after the date hereof agrees to become a party to, and bound by, this Agreement by executing a Joinder Agreement in substantially the form attached hereto as Exhibit A , each of whom is a “ Party ” and collectively are the “ Parties ” to this Agreement; TCI, TRMC, TMC, TAC, KPL, CCC, TGP, TGPGM, BLP and NDLH are each individually, a “ Tesoro Party ” and collectively, the “ Tesoro Parties ,” and TLO, TLP, TLNP, TAPL, THPP, QEPFS, TSCP, QGI, GRP, RPL and TAT are each individually, a “ TLLP Party ” and collectively, the “ TLLP Parties ”.









RECITALS:
A.      WHEREAS , the Parties, except for TGP, TGPGM, BLP, NDLH, QEPFS, TSCP, QGI, GRP, RPL and TAT, are parties to that certain Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation dated as of December 6, 2013 (the “ Existing Agreement ”);

B.      WHEREAS , the Parties desire to amend and restate the Existing Agreement to add TSCP, TGP, TGPGM, BLP, NDLH, QEPFS, TSCP, QGI, GRP, RPL and TAT as Parties, to reassign TAPL as a TLLP Party and to clarify and revise certain issues regarding the obligations of the Parties thereto;

C.      WHEREAS, the Parties are all affiliated entities, with TCI, TRMC, TMC, TAC and TGP being wholly owned subsidiaries of Tesoro Corporation; KPL being a wholly owned subsidiary of TAC; CCC being a wholly owned subsidiary of TRMC; TGPGM, BLP, NDLH being wholly owned subsidiaries of TGP; TLO and QEPFS being wholly owned subsidiaries of Tesoro Logistics LP (“ TLLP ”), in which a majority of the partnership interests are owned by Tesoro Corporation and its subsidiaries, and which is solely managed by Tesoro Logistics GP, LLC, a wholly owned subsidiary of Tesoro Corporation (“ TLGP ”); TLP being a wholly owned subsidiary of TLO; and THPP, TLNP, TAPL and TAT being wholly owned subsidiaries of TLP; and with TSCP, QGI, GRP, RPL being wholly owned subsidiaries of QEPFS;
D.      WHEREAS , in multiple transactions, TLO received contributions of certain logistics assets from TAC and TRMC, which included multiple wharfs, pipelines, terminals, storage tanks and ancillary facilities located in the States of Alaska, California, Idaho, North Dakota, Utah and Washington;
E.      WHEREAS , TLLP has separately acquired QEPFS and its subsidiaries and the assets of TLNP, and Tesoro Corporation has acquired TGP and its subsidiaries;
F.      WHEREAS , TLO has rights of first offer to acquire certain other logistics assets from TRMC and TAC, and the Parties may agree to assign future logistics assets to TLO in the future, which will become part of the TLLP Facilities subject to this Agreement when they are assigned to TLO by any of the TLLP Parties;
G.      WHEREAS , the TLLP Parties have acquired and/or may acquire in the future other logistics facilities that will provide services to the Tesoro Parties, and for which the Parties will agree that the Tesoro Parties should provide oil spill contingency planning and response services, and upon such acquisition and agreement, such logistics facilities will become part of the TLLP Facilities subject to this Agreement;





H.      WHEREAS , the Tesoro Parties and the TLLP Parties are parties to a Secondment and Logistics Services Agreement dated as of July 1, 2014, as amended, and related Service Orders (collectively the “ Secondment Agreement ”), pursuant to which employees and contractors of the Tesoro Parties and the TLLP Parties, respectively, may perform services and order supplies and materials as representatives and seconded employees of the other group, and certain Parties indemnified or will indemnify other Parties for certain liabilities;
I.      WHEREAS , the TLLP Parties have entered into operating agreements (collectively, “ Operating Agreements ”; and each individually, an “ Operating Agreement ”) with the Tesoro Parties, under which the TLLP Parties provide services to the Tesoro Parties as the operator of certain logistics assets, including wharfs, pipelines, terminals, storage tanks and ancillary facilities in the States of Alaska, California, Washington, Idaho, Utah, Wyoming, Montana and North Dakota;
J.      WHEREAS , the TLLP Parties may in the future enter into other Operating Agreements under which the TLLP Parties will provide services to the Tesoro Parties as the operator of certain logistics assets, including wharfs, pipelines, terminals, storage tanks and ancillary facilities;
K.      WHEREAS , TRMC and TAC are currently the largest customers using the logistics facilities that have been transferred to TLLP, or for which the TLLP Parties provide operating services under various services agreements with TLO and tariffs are published by THPP, and have contracted with TLO to utilize the majority of the capacity of the TLLP Facilities;
L.      WHEREAS , the Parties intend that the logistics facilities owned or operated by the TLLP Parties which are subject to legal and/or regulatory requirements with respect to oil spill contingency planning and response shall each be a “ TLLP Facility ” and collectively, the “ TLLP Facilities ”;
M.      WHEREAS , the Parties intend that the refining and logistics facilities owned or operated by the Tesoro Parties which are subject to legal and/or regulatory requirements with respect to oil spill contingency planning and response shall each be a “ Tesoro Facility ” and collectively, the “ Tesoro Facilities ”;
N.      WHEREAS , the Tesoro Parties and the TLLP Parties each employ personnel who have training and experience in Oil Spill Contingency Planning and Response, and who provide such services in connection with both the TLLP Facilities and the Tesoro Facilities, either as direct employees or seconded employees under the Secondment Agreement;
O.      WHEREAS , the TLLP Parties wish to have personnel and contractors of the Tesoro Parties provide services relating to Oil Spill Contingency Planning and Response for the TLLP Facilities;





P.      WHEREAS , the Tesoro Parties wish to have personnel and contractors of the TLLP Parties provide services relating to Oil Spill Contingency Planning and Response for the Tesoro Facilities;
Q.      WHEREAS , TMC charters vessels that use TLLP Facilities as well as facilities of the Tesoro Parties, and deliver and receive crude oil and refined products from such onshore facilities;
R.      WHEREAS , TCI is a member of the Marine Preservation Association (“ MPA ”) and has contracted with the Marine Spill Response Corporation (“ MSRC ”), to provide oil spill response and contingency planning for property owned and operated by TRMC, TAC, KPL, TAPL, CCC, THPP, TLNP and TLO and for vessels charted by TMC;
S.      WHEREAS , TCI has deemed TRMC, TMC, TAC, KPL, TAPL, CCC, THPP, TLNP and TLO to be covered entities under TCI’s MPA membership, such that TCI acts as a representative of each of these affiliated Parties in connection with its membership rights and responsibilities regarding MPA’s operations and cost structure;
T.      WHEREAS , The Parties desire that TCI shall act as the representative of each of the other TLLP Parties and Tesoro Parties in connection with its membership rights and responsibilities regarding MPA’s operations and cost structure with respect to the TLLP Facilities and Tesoro Facilities;
U.      WHEREAS , TMC is a member in Cook Inlet Spill Response, Inc. (“ CISPRI ”), which provides oil spill response and contingency planning for the Anchorage Terminals included within the TLLP Facilities, as well as other facilities owned and operated by TAC, KPL, TAT and TAPL in Alaska;
V.      WHEREAS , some of the Parties are also parties to a certain Marine Services Representation Agreement dated May, 2011, covering joint representation in CISPRI, and this Agreement shall supplement, but not supersede or replace, that Marine Services Representation Agreement; and
W.      WHEREAS , some of the Tesoro Parties are also parties to intercompany service agreements covering services provided by TCI to other Tesoro Parties, and this Agreement shall supplement, but not supersede or replace, those agreements.
NOW, THEREFORE , in consideration of the foregoing, the receipt and sufficiency of which are hereby acknowledged by the Parties, and for purposes of documenting and memorializing the Parties’ mutual understandings regarding (a) TCI serving as the representative of all Parties through its membership in MPA, and (b) the allocation among the Parties of costs and expenses associated with oil spill contingency planning, response and remediation activities, the Parties do hereby covenant and agree as follows:





1.      TCI Representation in MPA . TCI will act as the sole representative for all the Parties as a member in MPA, and TCI shall perform the duties and responsibilities of a member in MPA on behalf of all the Parties. TCI shall use reasonable commercial efforts to perform such duties and responsibilities in accordance with the same standards that it uses for its own business.
2.      MPA Operating Costs . MPA may allocate to TCI, as a MPA member, a share of MPA’s ongoing operating, maintenance, planning and contingency preparedness costs, expenses and capital contributions related to MPA’s normal operations (“ MPA Operating Costs ”) not arising from response, remediation, containment or cleanup of actual spills, releases, accidents or similar incidents. MPA Operating Costs shall include, without limitation, costs associated with contingency planning and preparedness and drills for potential spills, releases, accidents or similar incidents. TLO shall reimburse TCI for all MPA Operating Costs allocated to TCI by MPA with respect to the TLLP Facilities, and such MPA Operating Costs shall not be further allocated among the Parties.
3.      Engagement of MSRC . One or more of the Tesoro Parties may engage MSRC to perform services relating to ongoing operating, maintenance, planning and contingency preparedness, including services relating to the TLLP Facilities. The Tesoro Parties are authorized to so engage MSRC in the ordinary course of business to perform such services for the TLLP Facilities, under terms and conditions and at rates and fees consistent with those provided for facilities of the Tesoro Parties and in accordance with customary industry terms for similarly situated facilities of third parties. Costs and overhead fees charged to the Parties by MSRC associated with routine services provided by MSRC (“ MSRC Service Fees ”) for the TLLP Facilities and not related to Incidents, shall be included within the fees specified in the Third Amended and Restated Omnibus Agreement and the Secondment Agreement and shall not be otherwise charged to the TLLP Parties.
4.      Response Costs . “ Incident Response Costs ” shall include MSRC/MPA Response Costs, Tesoro Response Costs, and TLLP Response Costs, as set forth below:
(a)      MPA and/or MSRC may allocate to TCI or charge TCI for costs (“ MSRC/MPA Response Costs ”) incurred by MSRC and/or MPA related to response, remediation, containment or cleanup of any actual spills, releases, accidents or similar incidents (each individually an “ Incident ”, and collectively “ Incidents ”) associated with facilities or operations of the Parties or third parties, which are not included within the MPA Operating Costs or MSRC Service Fees.
(b)      The Tesoro Parties may also incur other costs (“ Tesoro Response Costs ”) related to response, remediation, containment or cleanup of any Incidents associated with the TLLP Facilities, which are not included within the MSRC/MPA Response Costs, the MPA Operating Costs or the MSRC Service Fees.





Tesoro Response Costs may include, without limitation, (i) costs of time and expenses of personnel of the Tesoro Parties, (ii) fees and costs for use of materials and equipment provided by the Tesoro Parties, (iii) fees and costs for services, materials equipment, vessels and vehicles provided by third parties and charged to the Tesoro Parties, (iv) fees and costs charged to the Tesoro Parties by governmental agencies with respect to remediation, containment or cleanup of any Incidents and (v) fees and costs incurred by third parties with respect to remediation, containment or cleanup of any Incidents for which a Tesoro Party is legally responsible for providing indemnity or contribution to such third party by reason of the Tesoro Party being an owner of a TLLP Facility operated by a TLLP Party.
(c)      The TLLP Parties may also incur other costs (“ TLLP Response Costs ”) related to response, remediation, containment or cleanup of any Incidents associated with facilities or operations of the Tesoro Parties, which are not included within the MSRC/MPA Response Costs, the MPA Operating Costs or the MSRC Service Fees. TLLP Response Costs may include, without limitation, (i) costs of time and expenses of personnel of the TLLP Parties, (ii) fees and costs for use of materials and equipment provided by the TLLP Parties, (iii) fees and costs for services, materials equipment, vessels and vehicles provided by third parties and charged to the TLLP Parties, (iv) fees and costs charged to the TLLP Parties by governmental agencies with respect to remediation, containment or cleanup of any Incidents, and (v) fees and costs incurred by third parties with respect to remediation, containment or cleanup of any Incidents for which a TLLP Party is legally responsible for providing indemnity or contribution to such third party by reason of the TLLP Party being an owner, operator, lessee or sublessee of a TLLP Facility.
(d)      In the event that there is an Incident involving a TLLP Facility, which results in MSRC and/or MPA incurring MSRC/MPA Response Costs that are charged to TCI as a member of MPA or otherwise charged to TCI or another Tesoro Party as a responsible party under environmental laws, regulations, and permits, or as an owner or lessee of a TLLP Facility operated or subleased by a TLLP Party, then the TLLP Party operating or subleasing the TLLP Facility for which such costs are incurred shall reimburse and indemnify the affected Tesoro Parties for the MSRC/MPA Response Costs associated with such TLLP Facility; provided however, that such TLLP Party shall not be responsible for reimbursing or indemnifying a Tesoro Party for any Incident Response Costs to the extent that the Incident was attributable to the negligent or wrongful actions or omissions of such Tesoro Party for which the TLLP Party would have a right of recovery against such Tesoro Party under law, regulation, equity or contract.
(e)      In the event that there is an Incident involving a TLLP Facility, which results in one or more of the Tesoro Parties incurring Tesoro Response Costs, then the TLLP Party operating, leasing or subleasing the TLLP Facility for which such costs are incurred shall reimburse and indemnify the Tesoro Parties for the





Tesoro Response Costs associated with such Incident; provided however, that such TLLP Party shall not be responsible for reimbursing or indemnifying the Tesoro Parties for any Tesoro Response Costs to the extent that the Incident was attributable to the negligent or wrongful actions or omission of such Tesoro Party for which the TLLP Party would have a right of recovery against such Tesoro Party under law, regulation, equity or contract.
(f)      In the event that there is an Incident involving a facility owned or leased (but not leased or subleased to a TLLP Party) or operated by one of the Tesoro Parties, which results in one or more of the TLLP Parties incurring TLLP Response Costs, then the Tesoro Party owning, leasing, or operating (but not leasing or subleasing to a TLLP Party) the facility for which such costs are incurred shall reimburse and indemnify the TLLP Parties for the TLLP Response Costs associated with such Incident; provided however, that such Tesoro Party shall not be responsible for reimbursing or indemnifying the TLLP Parties for any TLLP Response Costs to the extent that the Incident was attributable to the negligent or wrongful actions or omissions of such TLLP Party for which the Tesoro Party would have a right of recovery against such TLLP Party under law, regulation, equity or contract.
(g)      In the event that the Incident Response Costs relating to Incidents that are associated with both a facility operated, leased or subleased by a TLLP Party or a Tesoro Party and a vessel chartered by TMC, then the Parties shall negotiate a fair and equitable allocation of costs among TCI, TMC and the Party operating, leasing or subleasing such facility, based upon the nature of the costs and the Incidents that resulted in the Incident Response Costs and the respective culpability of the Parties with regard to such Incident. TMC shall be responsible for reimbursing the appropriate Parties for such Incident Response Costs to the extent that law, regulation, equity or contract would impose such liability upon TMC as a charterer of the vessel. If the Incident involves a TLLP Facility, the TLLP Parties shall be subrogated to the rights of TMC to recover from the vessel or its insurers the Incident Response Costs incurred by TLLP, either directly or by reason of a reimbursement of the Tesoro Parties pursuant to this Agreement.
(h)      In the event that TCI is charged for MSRC/MPA Response Costs relating to Incidents associated with facilities or operations of third parties that are unrelated to any facilities or operations of any of the Parties or vessels chartered or otherwise utilized by TCI, then the Parties shall negotiate a fair and equitable allocation of costs among themselves, based upon the nature of the costs and the Incident that resulted in the MSRC/MPA Response Costs and the respective relationships of the Parties with regard to such Incident.
(i)      In no event shall any allocation of Incident Response Costs be made or required hereunder that would cause the Incident to be regarded as more than one occurrence with respect to all of the Parties’





collective insurance coverages or that would expose the Parties to multiple insurance deductibles or self-insured retentions or otherwise limit or exclude insurance coverage with respect to such Incident, nor shall any provision of this agreement or any condition of TCI’s representation of the Parties as a member in MPA be construed to provide such a result. If any Party recovers any MSRC/MPA Response Costs from the owner, operator, charterer or insurer of a vessel or any other third party or any insurer, then such recovery shall be credited against and reduce and/or provide reimbursement for any Incident Response Costs that otherwise might be owed or have been paid by the other Parties hereto.
(j)      This Agreement does not supersede or control over any allocation of Incident Response Costs that may be set forth in specific Operating Agreements, use and throughput agreements or other service agreements between the TLLP Parties and the Tesoro Parties regarding operation and use of the TLLP Facilities. The provisions of these agreements shall be harmonized with the provisions of this Agreement to the maximum extent possible. In the event of any conflict between the various terms, the provisions of the applicable Operating Agreement, use and throughput agreement or service agreement shall control over the terms of this Agreement.
5.      Additions to TLLP Facilities . The Parties anticipate that in the future, TLLP will acquire, lease or sublease additional logistics facilities from the Tesoro Parties or from third parties or may develop or construct new or expanded logistics facilities, and that the Parties may agree that the Tesoro Parties should provide oil spill contingency planning and response services for those additional facilities. Upon such acquisition and agreement, each such facility will automatically become a TLLP Facility, subject to this Agreement.
6.      Term and Termination . This Agreement shall continue until December 31, 2016 and shall renew for successive periods of one year thereafter, unless terminated by any Party upon sixty (60) days advance written notice. The Parties shall periodically evaluate whether the allocation of MPA Operating Costs set forth herein and the agreement not to include such MPA Operating Costs or MSRC Service Fees as components of tariffs and fees remains appropriate under conditions as they may exist from time to time. At any time after December 31, 2016, any Party may request renegotiation of all or any part of this Agreement, and the Parties shall then negotiate in good faith to make reasonable arrangements regarding future allocations of MPA Operating Costs, MSRC Service Fees and related adjustments of tariff and fee structures. In the event the Parties are unable to reach a consensus on any appropriate adjustments, then any Party may terminate this Agreement upon ten (10) days advance written notice as to subsequent costs incurred by TCI, but such termination shall not invalidate this Agreement as to costs incurred by TCI prior to the effective date of such termination. Upon termination of this Agreement, TCI may rescind its designation of the other Parties as covered entities with respect to TCI’s membership in MPA.





7.      Parent Guaranties and COFRs . For TLLP Facilities that are operated, leased or subleased by a TLLP Party, but are owned or leased by a Tesoro Party, then the Tesoro Party or its parent, Tesoro Corporation, may be required to post or provide a parent guaranty or a Certificate of Financial Responsibility (“ COFR ”) to demonstrate adequate financial ability to pay for any Incident Response Costs that might be associated with Incidents at such TLLP Facility. The TLLP Party operating, leasing or subleasing the TLLP Facility shall release, defend, indemnify and hold harmless the Tesoro Party owning or leasing such TLLP Facility from and against any such Incident Response Costs as provided herein and any other damages, losses, expenses or fees which the Tesoro Party may incur under the Tesoro Party’s parent guaranty or COFR resulting from the TLLP Party’s operation leasing or subleasing of the TLLP Facility prior to acceptance by the California Department of Fish and Game of TLO’s COFR. Tesoro Corporation shall be (i) subrogated to the rights of such Tesoro Party to receive such reimbursement to the extent that Tesoro Corporation is obligated to pay or guarantee payment of such Incident Response Costs pursuant to any such parent guaranty or COFR, and (ii) entitled to receive reimbursement from TLLP for any incremental costs or expenses incurred by it or a Tesoro Party in connection with the posting of a COFR for a TLLP Facility. In the event of a conflict of provisions of this Agreement and the provisions of the Carson Asset Indemnity Agreement dated as of the date hereof, by and among TLGP, TLLP, TLO, Tesoro Corporation, and TRMC , the provisions of the Carson Asset Indemnity Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets.

8.      Responsible Party . It may be required, or deemed advantageous that Tesoro Facilities and TLLP Facilities be covered by a single oil spill response plan or permit approved by federal, state or local agencies. In such instances, either a Tesoro Party or a TLLP Party may be listed in the plan or permit as the responsible party for such facility or facilities, and the applicable Party listed as the responsible party in such permit or approved plan may act as the representative of the other Parties subject to such permits or plans in dealings with the appropriate agencies and governmental authorities charged with approving and administering such plans and permits. In such instances the Party acting as such representative shall act pursuant to the provisions of this Agreement, and each of the other Parties covered by such plan or permit shall be responsible for reimbursements and indemnities for associated costs and liabilities pursuant to the terms of this Agreement.






9.      Miscellaneous.
(a)      Assignment . This Agreement shall be binding upon the Parties and their respective successors and assigns, provided however, that no Party may assign its interests under this Agreement without the consent of all the Parties hereto.
(b)      Modification; Waiver . This Agreement may be terminated, amended or modified only by a written instrument executed by the Parties. Any of the terms and conditions of this Agreement may be waived in writing at any time by the Party entitled to the benefits thereof. No waiver of any of the terms and conditions of this Agreement, or any breach thereof, will be effective unless in writing signed by a duly authorized individual on behalf of the Party against which the waiver is sought to be enforced. No waiver of any term or condition or of any breach of this Agreement will be deemed or will constitute a waiver of any other term or condition or of any later breach (whether or not similar), nor will such waiver constitute a continuing waiver unless otherwise expressly provided.
(c)      Governing Law; Jurisdiction . This Agreement shall be governed by the laws of the State of Texas without giving effect to its conflict of laws principles. Each Party hereby irrevocably submits to the exclusive jurisdiction of any state or federal district court of competent jurisdiction in Bexar County, Texas. The Parties expressly and irrevocably submit to the jurisdiction of said courts and irrevocably waive any objection which they may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of or relating to this Agreement brought in such courts, irrevocably waive any claim that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum and further irrevocably waive the right to object, with respect to such claim, action, suit or proceeding brought in any such court, that such court does not have jurisdiction over such Party. The Parties hereby irrevocably consent to the service of process by registered mail, postage prepaid, or by personal service within or without the State of Texas. Nothing contained herein shall affect the right to serve process in any manner permitted by law.
(d)      WAIVER OF JURY TRIAL . EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDINGS RELATING TO THIS AGREEMENT or any performance or failure to perform of any obligation hereunder.
(e)      No Third Party Beneficiaries . It is expressly understood that the provisions of this Agreement do not impart enforceable rights in anyone who is not a Party or successor or permitted assignee of a Party; provided however, that Tesoro Corporation shall be a third party beneficiary of all indemnities and





reimbursement rights provided to the Tesoro Parties hereunder as provided in Section 7 above. No insurer or third party other than Tesoro Corporation or TLLP shall be entitled to assert subrogation, indemnity or contribution rights against any Party with respect to any Incident or as a result of the provisions of this Agreement or TCI acting as the representative of the other Parties as a member in MPA or a party to agreements with MSRC.
(f)      Severability . Whenever possible, each provision of this Agreement will be interpreted in such manner as to be valid and effective under applicable law, but if any provision of this Agreement or the application of any such provision to any person or circumstance will be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith with a view to substitute for such provision a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.
(g)      Counterparts . This Agreement may be executed in one or more counterparts for the convenience of the Parties hereto, each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement. This Agreement shall be binding upon a Party at the time such Party and TCI have executed a counterpart of this Agreement.
[Signature Page Follows]



























IN WITNESS WHEREOF , the Parties hereto have duly executed this Agreement as of the date first written above.
TESORO PARTIES :
 
TESORO COMPANIES, INC.

CARSON COGENERATION COMPANY


By: /s/ Gregory J. Goff                                      
Name: Gregory J. Goff
Title: Chairman of the Board of Directors and President
TESORO MARITIME COMPANY


By: /s/ Mark D. Wilson                                  
Name: Mark D. Wilson
Title: Chairman of the Board of Directors and President


TESORO REFINING & MARKETING COMPANY LLC

TESORO ALASKA COMPANY LLC

TESORO GREAT PLAINS MIDSTREAM LLC

TESORO GREAT PLAINS GATHERING & MARKETING LLC

BAKKENLINK PIPELINE LLC

ND LAND HOLDINGS LLC

TESORO ALASKA TERMINALS LLC


By: /s/ Gregory J. Goff                                         
Name: Gregory J. Goff
Title: Chairman of the Board of Managers and President


KENAI PIPE LINE COMPANY


By: /s/ Cynthia J. Warner                             
Name: Cynthia J. Warner
Title: President
















 

Signature Page to Second Amended and Restated Representation and Services Agreement







TLLP PARTIES :
 
TESORO ALASKA PIPELINE COMPANY LLC

TESORO LOGISTICS OPERATIONS LLC

TESORO HIGH PLAINS PIPELINE COMPANY LLC

TESORO LOGISTICS PIPELINES LLC

TESORO LOGISTICS NORTHWEST PIPELINE LLC

TESORO SOCAL PIPELINE COMPANY LLC

QEP FIELD SERVICES, LLC

QEPM GATHERING I, LLC

GREEN RIVER PROCESSING, LLC

RENDEZVOUS PIPELINE COMPANY, LLC

By: /s/ Phillip M. Anderson                              
Name: Phillip M. Anderson
Title: President
 












Signature Page to Second Amended and Restated Representation and Services Agreement





 
Exhibit A

JOINDER AGREEMENT
TO THE SECOND AMENDED AND RESTATED
REPRESENTATION AND SERVICES AGREEMENT FOR OIL SPILL CONTINGENCY PLANNING, RESPONSE AND REMEDIATION


The undersigned hereby executes the Second Amended and Restated Representation and Services Agreement for Oil Spill Contingency Planning, Response and Remediation (the “ Agreement ”), authorizes this signature page to be attached as a counterpart of the Agreement, and hereby agrees to become a party to, to be bound by and to comply with the terms and provisions of the Agreement (which it represents it has reviewed and understands) as [**a “Tesoro Party”**] [**“TLLP Party”**](as defined in the Agreement) and this signature page shall constitute a counterpart copy of the Agreement.



__________________________________

By: ____________________________

Name:      ____________________________

Title:      ____________________________



AGREED AND ACCEPTED :

TESORO COMPANIES INC.



By:      ____________________________

Name:      ____________________________

Title:      ____________________________







Exhibit 10.4

THIRD AMENDED AND RESTATED SCHEDULES
TO THIRD AMENDED AND RESTATED OMNIBUS AGREEMENT
A Third Amended and Restated Omnibus Agreement was executed as of July 1, 2014, and amended as of December 31, 2014 and July 1, 2015 (collectively, the “Third Amended and Restated Omnibus Agreement”), among Tesoro Corporation, on behalf of itself and the other Tesoro Entities, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP and Tesoro Logistics GP, LLC, as amended by the First Amended and Restated Schedules to Third Amended and Restated Omnibus Agreement, executed November 12, 2015 and the Second Amended and Restated Schedules to Third Amended and Restated Omnibus Agreement, executed July 1, 2016. Capitalized terms not otherwise defined in this document shall have the terms set forth in the Third 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 Third Amended and Restated Omnibus Agreement, such amended and restated Schedules shall replace the prior Second Amended and Restated Schedules as of the date hereof and shall be incorporated by reference into the Third Amended and Restated Omnibus Agreement for all purposes.
Executed effective as of September 16, 2016.

TESORO CORPORATION

By:      /s/ Gregory J. Goff             
Gregory J. Goff
President and Chief Executive Officer

TESORO REFINING & MARKETING COMPANY LLC
TESORO COMPANIES, INC.
TESORO ALASKA COMPANY LLC

By:      /s/ Gregory J. Goff             
Gregory J. Goff
President

TESORO LOGISTICS LP

By:      Tesoro Logistics GP, LLC, its
general partner

By:
/s/ Phillip M. Anderson             
Phillip M. Anderson
President

TESORO LOGISTICS GP, LLC

By:
/s/ Phillip M. Anderson             
Phillip M. Anderson
President

Signature Page to Third Amended and Restated
Schedules to Third Amended and Restated Omnibus Agreement






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.

For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII :

The environmental indemnification provisions of the Carson Assets Indemnity Agreement dated as of December 6, 2013 (“ Carson Assets Indemnity Agreement ”), among the Partnership, the General Partner, Tesoro Logistics Operations LLC (the “ Operating Company ”) and TRMC, supersede in their entirety the environmental indemnification provisions of Article III of the Third Amended and Restated Omnibus Agreement, except as otherwise expressly provided in the Carson Assets Indemnity Agreement.

For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII :

The environmental indemnification provisions of the Carson Assets Indemnity Agreement supersede in their entirety the environmental indemnification provisions of Article III of the Third Amended and Restated Omnibus Agreement, except as otherwise expressly provided in the Carson Assets Indemnity Agreement.

For West Coast Assets Contribution Agreement listed on Schedule VII:

None.

For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

None.





Page 1/2 of Schedule I to Third Amended and Restated Schedules to
Third Amended and Restated Omnibus Agreement







For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

KENAI TANKAGE: Tesoro, Tesoro Alaska, TRMC, the Partnership and the General Partner are subject to a pending consent decree with the United States Environmental Protection Agency and the Department of Justice pursuant to which injunctive relief will be ordered with respect a number of refineries (the “2016 Environmental Consent Decree”).

ANCHORAGE AND FAIRBANKS TERMINALS: Tesoro, Tesoro Alaska, TRMC, the Partnership and the General Partner are subject to the pending 2016 Environmental Consent Decree pursuant to which injunctive relief will be ordered with respect a number of refineries.

The indemnification obligations of the Tesoro Entities under Section 3.1(a) of the Third Amended and Restated Omnibus Agreement with regard to the 2016 Environmental Consent Decree are limited as provided in Schedule IX.
































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Third Amended and Restated Omnibus Agreement







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.







Page 1/7 of Schedule II to Third Amended and Restated Schedules to
Third Amended and Restated Omnibus Agreement







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.

For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII :

The environmental indemnification provisions of the Carson Assets Indemnity Agreement supersede in their entirety the environmental indemnification provisions of Article III of the Third Amended and Restated Omnibus Agreement, except as otherwise expressly provided in the Carson Assets Indemnity Agreement.

For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII :

The environmental indemnification provisions of the Carson Assets Indemnity Agreement supersede in their entirety the environmental indemnification provisions of Article III of the Third Amended and Restated Omnibus Agreement, except as otherwise expressly provided in the Carson Assets Indemnity Agreement.














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Third Amended and Restated Omnibus Agreement







For West Coast Assets Contribution Agreement listed on Schedule VII:

1.      Nikiski Terminal. Subsurface soil and groundwater has not been assessed at this facility. There have been no historic releases that have prompted a soil and groundwater investigations. The area within the tank containment berms was lined with low-permeability soils in the early 1990s. The loading rack, fuel filters and piping manifolds are above concrete secondary containment.

2.      Anacortes Light Ends Rail Facility and planned diesel truck rack areas. Subsurface soil and groundwater has not been assessed at this area of the Anacortes refinery. There have been no historic releases that have prompted a soil and groundwater investigation.

3.      Anacortes Storage Facility . Historic tank overtopping events and tank bottom corrosion releases have impacted soil and groundwater in the shore tank area of the Anacortes refinery. Groundwater near the shore tanks is monitored for natural attenuation. Groundwater between the tanks and the nearby shoreline has not been characterized, however the hydrocarbon concentrations in this area is not expected to be a threat to human health or the environment.

4.      Martinez Refinery LPG Loading Area . Past waste disposal and hydrocarbon releases have impacted areas surrounding the Martinez Refinery LPG loading rack, pad and tanks. Areas north and northeast of the rack were used for past waste disposal. There are documented intra-refinery pipeline releases in the north and western boundaries of the LPG rack concrete pad. The refinery plans to excavate and cap the nearby waste disposal area in 2017. The pipeline releases are being remediated as part of the overall Martinez refinery cleanup. Soil and groundwater directly beneath the loading rack, propane tanks and truck pad have not been sampled.

5.      Tesoro Alaska Pipeline.

The pump station for the Tesoro Alaska Pipeline is adjacent to the Kenai Refinery Lower Tank Farm. Multiple historic tank and buried pipeline releases have impacted soil and groundwater in the area; however there are no documented releases from the pipeline pump station. The soil and groundwater surrounding the pump station is considered characterized and undergoing groundwater monitoring and treatment.

A pipeline release in 2001 resulted in soil, groundwater and surface water impacts in an undeveloped area of the Kenai Peninsula. The quantity of the release is not known. Soil surrounding the release was excavated and stockpiled at the Kenai Refinery while groundwater and surface water were remediated on-site. The Alaska Department of Environmental Conservation issued a No Further Action letter for this cleanup effort in 2008. There are no other known release sites on the pipeline between the Kenai Refinery and Anchorage.







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Third Amended and Restated Omnibus Agreement







Historic spills and releases have impacted the Anchorage #1 terminal, including past releases from the Tesoro Alaska Pipeline receiving station. Groundwater remediation monitoring is ongoing across the Anchorage #1 terminal. In addition, a soil vapor venting system is being installed to address a flame suppressant compound detected in soils near the receiving station control room.

For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

None

For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

KENAI TANKAGE:

Area of significant groundwater and soil impacts: (1) lower tank farm groundwater impact source area including 1988 jet fuel release and unknown light products release in area of Tank 63, (2) process unit historic releases from oily water sewer system including releases from failed grout in subsurface sewer hubs, (3) groundwater issues generally 35 to 40 feet below ground surface and groundwater impacts in three water-bearing zones below refinery and off-site and (4) possible contributor to refinery-wide groundwater impacts.

ANCHORAGE AND FAIRBANKS TERMINALS:

Pursuant to the Contribution, Conveyance and Assumption Agreement effective as of July 1, 2016 (the “ Alaska Assets Contribution Agreement ”), 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 Alaska Company LLC, a Delaware limited liability company (“ TAC ”) and Tesoro Corporation, a Delaware corporation (“ Tesoro ”), TAC contributed 100% of the limited liability company interests (the “ TAT Interests ”) in Tesoro Alaska Terminals LLC, a Delaware limited liability company (“ TAT ”), to the General Partner, the General Partner contributed 100% of the TAT Interests to the Partnership, and the Partnership contributed 100% of the TAT Interests to the Operating Company, all on the terms and conditions set forth in that contribution agreement.

Prior to the date of the Alaska Assets Contribution Agreement, TAT acquired certain assets defined as the “Anchorage and Fairbanks Terminals” in the Alaska Assets Contribution Agreement from Flint Hills Resources Alaska, LLC pursuant to an Asset Purchase Agreement, dated November 20, 2015 (the “ Flint Hills APA ”), by and between Flint Hills Resources Alaska, LLC and TAC. As described in the Flint Hills APA, the following liabilities existed at the Anchorage and Fairbanks Terminals prior to the closing of the transactions contemplated under the Flint Hills APA:

Anchorage Terminal :
1.
Deviations reported under Anchorage Air Permit No. AQ0235TVP03, Issue Date: April 2, 2014, Effective Date: May 2, 2014

Page 4/7 of Schedule II to Third Amended and Restated Schedules to
Third Amended and Restated Omnibus Agreement







Flint Hills Resources Alaska, LLC did not submit a report as required under Condition 68 based upon defects listed in Condition 6.3 discovered during the out of service inspection conducted on T-4216 during July 2014. The deviation report covering this incident is set out in the Flint Hills Resources Alaska, LLC deviation report dated January 29, 2015.
Flint Hills Resources Alaska, LLC did not report all emissions or operations that exceed or deviate from the requirements of its permit within 30 days of the end of the month in which the excess emission or deviation occurred. The deviation report covering this incident is set out in the Flint Hills Resources Alaska, LLC deviation report dated January 29, 2015.
Flint Hills Resources Alaska, LLC did not perform preventative maintenance in accordance with 40 CFR Subpart ZZZZ within 365 days of effective date on EU IDs 7, 8, and 9. The maintenance was performed 2 days after that date. The deviation report covering this incident is set out in the Flint Hills Resources Alaska, LLC deviation report dated July 30, 2014.
Flint Hills Resources Alaska, LLC did not report all emissions or operations that exceed or deviate from the requirements of this permit within 30 days of the end of the month in which the excess emissions or deviation occurred. The deviation report covering this incident is set out in the Flint Hills Resources Alaska, LLC deviation report dated January 29, 2015.
On April 10, 2014. ADEC issued Flint Hills Resources Alaska, LLC a letter of Acceptance of the Anchorage Facility Compliance Certificate, and identified 4 deviations from the air permit.
2.
In a letter dated July 22, 2015, the ADEC indicated that the Anchorage Terminal Oil Discharge Prevention and Contingency Plan needed the additional information specified in the July 22, 2015 letter to be submitted in order for the plan renewal to be approved. On September 2, 2015, the facility submitted the requested information and is awaiting ADEC approval.
3.
On May 15, 2015 Flint Hills Resources Alaska, LLC received a notice of failure to pay Air Quality fees relating to Air Permit No. AQ0235TVP03. Those fees were paid on June 2, 2015.
4.
In a letter dated October 1, 2015, ADEC approved the facility’s request for a waiver of secondary containment, subject to the terms of the letter, until March 31, 2016.
5.
On July 24, 2014 ADEC issued a letter to Flint Hills Resources Alaska, LLC advising that Flint Hills Resources Alaska, LLC is a responsible party under Alaska law for the July 22, 2014 Anchorage Facility Jet Fuel release.
6.
On April 21, 2014, ADEC issued a letter to Flint Hills Resources Alaska, LLC advising it that Flint Hills Resources Alaska, LLC is a responsible party under Alaska law for the April 20, 2014 gasoline release.



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Third Amended and Restated Omnibus Agreement






Fairbanks Terminal :
(i)
In a letter dated May 29, 2015, ADEC detailed items that needed correction related to ADEC’s May 19, 2015 inspection of the terminal and its Oil Discharge Prevention and Contingency Plan. The facility has submitted a response to ADEC and is working with the agency to correct the identified items.
(ii)
On April 24, 2014 ADEC advised Flint Hills Resources Alaska, LLC that the Primary Response Action Contractor is no longer an ADEC approved and registered contractor. Therefore, Flint Hills Resources Alaska, LLC’s Fairbanks Facility Oil Discharge Prevention and Contingency Plan was out of compliance and needed amendment.
(iii)
Two underground storage tanks are located at the Fairbank Terminal, both of which are used to store heating oil. One underground storage tank was removed from the Purchased Site prior to Flint Hills Resources Alaska, LLC’s leasehold.
(iv)
Asbestos materials has been identified and are known to be located at the Anchorage Facility in the following locations:
Material Type
Location(s)
EPA Category
Gray Caulk
(10% Chrysotile)
Fire Pump Room, Warehouse
Category II
Sheetrock
(4% Chrysotile)
Boiler Room, Warehouse
Category II
Brown Insulation
(5% Chrysotile)
Heat Exchanger Building
Category I
Window Caulk
(3% Chrysotile)
Warehouse
Category II
Gray Mastic
(10% Chrysotile)
Concrete Pad Near Tank 4136
Category II
Black Mastic
(6% Chrysotile)
Concrete Pad Near Tank 4136
Category II
Black Mastic
(17% Chrysotile)
Exchanger on West Side of Asphalt Tank Farm
Category II
Black Mastic
(6% Chrysotile)
Piping located near railroad tracks on Ocean Dock Road.
Category II
Black Mastic
(20% Chrysotile)
Piping on side of Tank 4263, East Tank Farm
Category II
White Insulation
(60% Chrysotile)
Piping on side of Tank 4263, East Tank Farm
Category I
Mastic/Insulation
(20% Chrysotile)
Top skirt of Tank 4263, East Tank Farm
Category I
Mastic
(15% Chrysotile)
Sections of buried pipelines
Category II

In the Flint Hills APA, Flint Hills Resources Alaska, LLC noted that it had no knowledge of other asbestos-containing material currently located at the sites purchased by TAT. However, Flint Hills Resources Alaska, LLC noted that asbestos material has been removed in the past during renovation and/or demolition work at the purchased sites.
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Third Amended and Restated Omnibus Agreement






Flint Hills Resources Alaska, LLC stated in the Flint Hills APA that it has no knowledge of polychlorinated biphenyls (“ PCB ”) material or equipment containing PCBs existing at the purchased sites. Flint Hills Resources Alaska, LLC, however, noted that it understands that PCBs may have been present under prior lessees operations of the sites but has no direct knowledge of this.
Flint Hills Resources Alaska, LLC stated in the Flint Hills APA that it understands “disposal areas” to include areas where Hazardous Materials have been Released. See Section 3.11(h) of Seller Disclosure Schedule under the Flint Hills APA for Flint Hills Resources Alaska, LLC’s knowledge regarding disposal areas on the Purchased Sites. In addition, a significant amount of fill material was used to augment the elevation and stability of the soils beneath the Anchorage facility. This fill included debris and materials such as such as wood, metal, and concrete. Flint Hills Resources Alaska LLC stated in the Flint Hills APA that it has no knowledge that the fill material contained Hazardous Materials when it was placed on the site.
Flint Hills Resources Alaska, LLC stated in the Flint Hills APA that:

1.
On July 24, 2014 ADEC issued a letter to Flint Hills Resources Alaska, LLC advising that Flint Hills Resources Alaska, LLC is a responsible party under Alaska law for the July 22, 2014 Anchorage Facility Jet Fuel release.
2.
On April 21, 2014, ADEC issued a letter to Flint Hills Resources Alaska, LLC advising it that Flint Hills Resources Alaska, LLC is a responsible party under Alaska law for the April 20, 2014 gasoline release.
3.
In a letter dated July 22, 2015, ADEC indicated that the Anchorage Terminal Oil Discharge Prevention and Contingency Plan needed the additional information specified in the July 22 letter to be submitted in order for the plan renewal to be approved. On September 2, 2015, the facility submitted the requested information and is awaiting ADEC approval.
Flint Hills Resources Alaska, LLC assumed all environmental liabilities known at the time the Purchased Facilities were acquired from Williams in 2004.




 




Page 7/7 of Schedule II to Third Amended and Restated Schedules to
Third Amended and Restated Omnibus Agreement







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.

For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII:

None.

For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII:

None.

For West Coast Assets Contribution Agreement listed on Schedule VII:

None.

For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

None.

For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

KENAI TANKAGE: None.

ANCHORAGE AND FAIRBANKS TERMINALS: None.







Page 1/1 of Schedule III to Third Amended and Restated Schedules to
Third Amended and Restated Omnibus Agreement







Schedule IV

Section 4.1(a): General and Administrative Services

(1)
Executive management services of Tesoro employees who devote less than 50% of their business time to the business and affairs of the Partnership, including stock based compensation expense

(2)
Financial and administrative services (including, but not limited to, treasury and accounting)

(3)
Information technology services

(4)
Legal services

(5)
Health, safety and environmental services

(6)
Human resources 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 :

None.

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII :

None.

For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII :

None.





Page 1/2 of Schedule IV to Third Amended and Restated Schedules to
Third Amended and Restated Omnibus Agreement







For West Coast Assets Contribution Agreement listed on Schedule VII:

None.

For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

None.

For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

KENAI TANKAGE: None.

ANCHORAGE AND FAIRBANKS TERMINALS: None.

































Page 2/2 of Schedule IV to Third Amended and Restated Schedules to
Third Amended and Restated Omnibus Agreement







Schedule V
ROFO Assets
Asset
Owner
Golden Eagle Avon Wharf Facility (Martinez, California).   A wharf facility located on the Sacramento River near the Golden Eagle Refinery consisting of a single-berth dock and related pipelines. The facility does not have crude oil or refined products storage capacity and receives refined products from the Golden Eagle Refinery through interconnecting pipelines for delivery into marine vessels. The facility can also receive refined products and intermediate feedstocks from marine vessels for delivery to the Golden Eagle Refinery.
TRMC
 
 
Nikiski Dock and Storage Facility (Nikiski, Alaska).  A single-berth dock and storage facility located at the Kenai Refinery that includes five crude oil storage tanks with a combined capacity of approximately 930,000 barrels, ballast water treatment capability and associated pipelines, pumps and metering stations. The dock and storage facility receives crude oil from marine tankers and from local production fields via pipeline and truck, and also delivers refined products from the refinery to marine vessels.
Tesoro Alaska
 
 
Anacortes Marine Terminal (Anacortes, Washington).   A marine terminal located at the Anacortes Refinery consisting of a crude oil and refined products wharf facility. The marine terminal receives crude oil and other feedstocks from marine vessels and third-party pipelines for delivery to the Anacortes Refinery. The facility also delivers refined products from the Anacortes Refinery to marine vessels.
TRMC
 
 


















Page 1/1 of Schedule V to Third Amended and Restated Schedules to
Third Amended and Restated Omnibus Agreement






Schedule VI
Existing Capital and Expense Projects
For Initial Contribution Agreement listed on Schedule VII :

Expense Projects

None.

Capital Projects

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. This project has been completed.

2.      That certain project AFE# 112120005 at the Mandan refinery, to update additive equipment to allow the offering of Shell additized gasoline. This project has been completed.
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 AFE# 104100015-M at the Mandan refinery, to update the truck rack sprinkler system. This project has been completed.
5.      That certain project number AFE# 122120002 (TCM Idea# 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 TCM Idea # 2011433001 at the Mandan refinery, to move the JP8 to new bay and have three bays for loading product across the rack. This project has been cancelled.
7.      That certain project number TCM Idea # 2011432602 at the Stockton terminal, install a continuous vapor emission monitor on the vapor recovery unit for compliance with air quality regulations.






Page 1/14 of Schedule VI to Third Amended and Restated Schedules to
Third Amended and Restated Omnibus Agreement






For Amorco Contribution Agreement listed on Schedule VII :
Expense Projects

All major expense projects that are within the scope of open Work Orders as of the applicable Closing Date.

Capital Projects

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.

For Long Beach Contribution Agreement listed on Schedule VII :

Expense Projects

1.      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.

2.      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, and include IO# 3021407 titled “SCA.Wilmington Edison Reroute” and IO# 3021749 titled “SCA.Edison Reroute 24 inch, 16 inch, 14 inch”.

Capital Projects

1.      That certain project related to AFE# 072104079LBT 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# 072104079LBT (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 Idea# 2012433432 AFE# 125120020 titled “LBT Berth 84a Loading Arm Replacement” which repairs or replaces the loading arms at the Terminal and any related AFE project that will occur upon final project approval to substantially repair or replace the loading arms at the Terminal.

3.      That certain project related to the TCM Idea# 2012433433 AFE# 125120021 titled “LBT Berth 86 Loading Arm Replacement” which repairs or replaces the loading arms at the Terminal and any related AFE project that will occur upon final project approval to substantially repair or replace the loading arms at the Terminal.




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4.      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.
For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

Expense Projects
None.
Capital Projects
Any capital costs or expenses that may be incurred for the installation of a custody transfer meter related to the AFE# 125120017 titled “CROF Custody Transfer Meter and Station”.
For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII :
Expense Projects
Expenses associated with the API 653 internal inspection, the Carson Crude Terminal Tank 401 (AFE# 13E1219120001BP/WBS 19125.E012.975) scheduled to start in November 2013, including without limitation, cleaning of such Tank (including any waste removal) and any repairs to such Tank required as a result of such inspection.
Capital Projects
None.
For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII :
Expense Projects
1.      All 2013 and 2014 costs related to AFE# 136104215BP-M (PRISM ID 32503) for a partial replacement of Rhodia Sulfuric Acid Line 29 will be reimbursed by TRMC to cover the 2014 expenditure of $1.1 million for line neutralization, the pig run and tie-ins. Subject to confirmation with the refinery on exact outage dates, the bulk of this cost will be incurred in March and April.
2.      All 2013 costs or 2013 carry-over costs related to AFE# 13E1012000002BP-M12 & 13E1012000002BP-M5 PRISM ID 32518 (under the 2013 AFE # 13E1012000002BP) for the Manual Entry Corrosion Program at Terminal 2 will be reimbursed by TRMC. All 2014 costs will be covered by the Partnership’s 2013 budget.



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Third Amended and Restated Omnibus Agreement







3.      All remaining 2013 inspection and repair costs related to AFE# 13E1012000002BP-M2 (PRISM ID 32549) associated with the Marine Terminal 2 - TK 218 - API 653 Internal Inspection only (not including repairs at this point) will be reimbursed by TRMC. TRMC shall review and approve the tank repair scope and review inspection reports to prevent unnecessary upgrades or “urban renewal.”
4.      All remaining 2013 inspection and repair costs related to AFE# 13E1212000001-M (PRISM ID 31418) associated with the Marine Terminal 2 - TK 205 - API 653 Internal Inspection only (not including repairs at this point) will be reimbursed by TRMC. TRMC shall review and approve the tank repair scope and review inspection reports to prevent unnecessary upgrades or “urban renewal.”
5.      Remaining expenses related to AFE# 13E1179000001-M (PRISM ID 32040) to upgrade PLC systems in the LA Basin will be reimbursed by TRMC.
6.      All remaining 2013 inspection and repair costs related to AFE# 13E1212000002-M (PRISM ID 31419) associated with the Marine Terminal 2 - TK 217 - API 653 Internal Inspection only (not including repairs at this point) will be reimbursed by TRMC. TRMC shall review and approve the tank repair scope and review inspection reports to prevent unnecessary upgrades or “urban renewal.”
7.      All remaining expenses related to AFE# 136104222BP-M (PRISM ID 32556) associated with the Pipeline OQ Verification will be reimbursed by TRMC.
8.      All remaining 2013 inspection and repair costs related to AFE# 13E1012000006-M (PRISM ID 31409) associated with the Carson Products - TK VH1 - API 653 Inspection only (not including repairs at this point) will be reimbursed by TRMC. TRMC shall review and approve the tank repair scope and review inspection reports to prevent unnecessary upgrades or “urban renewal.

Capital Projects

1.      Maintenance capital expenditures related to that certain AFE# 136104194BP-M (PRISM ID 32480) at Terminal 2 to replace all fire water piping at Berths 76, 77 and 78 areas of Terminal 2 in Long Beach, CA with new piping. This project will also replace all associated valves, fixtures, monitors, and fire-fighting accessories.
2.      Maintenance capital expenditures related to that certain TCM Idea# 2013434229 (PRISM ID 25829) at Terminal 2 to replace the existing bladder type foam tank with two atmospheric tanks and foam skids located at either end of the facility along with new piping to support the installation.





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3.      Maintenance capital expenditures related to that certain TCM Idea# 2013434243 (PRISM ID 20054) at Terminal 2 to replace the existing loading arms at T2's Berth 77 and 78. The current parts are so old that they are no longer readily available, so in order to properly maintain this equipment to minimize down-time for repairs, these arms should be replaced with the newest models.
4.      All capital expenditures related to that certain AFE# 136104077BP-M (PRISM ID 32481) for MOTEMS dock side piping upgrades at Terminal 2.
5.      Maintenance capital expenditures related to that certain AFE# 145120008 (PRISM ID 32560) at Terminal 2 to replace the main 12kV electrical switchgear that experienced electrical damage due to several factors: nearing its equipment service life, component degradation, exposure to the elements. The main copper busbar component of the switchgear was recently replaced and dipped in epoxy coating. However, during the repairs, cracks on the insulation of the main horizontal operating bus were discovered. The exterior enclosure is slowly showing signs of corrosion and the glastic insulation materials are degrading.
6.      Upon TRMC’s approval to complete the following projects, all capital costs incurred to connect the Los Angeles Wilmington and Carson refinery systems, as well as the crude and product pipeline systems: TCM Idea# 2013434786, AFE# 132110022-M (TCM Idea# 2013434419), TCM Idea# 2013434788, AFE# 132110023-M (TCM Idea# 2013434417), AFE# 132110025-M (TCM Idea# 2013434418), AFE# 132110030-M (TCM Idea# 2013434420), AFE# 132110031-M (TCM Idea# 2013434784), TCM Idea# 2013434785 and AFE# 132110026 (TCM Idea# 2013434137).
7.      Upon TRMC’s approval to complete the project, all capital costs related to the project at Terminal 2 targeted to reduce Tesoro’s demurrage cost due to barge delivered additive alternative, under AFE# 132110024-M (TCM Idea# 2013434220).
8.      All capital costs related to AFE# 131907046, the implementation of an equivalent solution using Tesoro ECC 6 MOC module, including necessary configuration changes and customization of interfaces to be completed and executed in line with other transformation projects identified as part of integrating other BP assets such as TMS5 to DTN Guardian3, Load Tracker, etc. in the Logistics area.
9.      All capital costs related to AFE# 131907047. As a part of the BP Carson Tranche 1 Contribution Agreement, Tesoro acquired Maximo, i-Maintain, Maximo Mobile and Primavera. These applications are used for scheduling and managing routine maintenance tasks and planning capital projects (Primavera). These business functions will be transitioned to SAP PM (using GWOS) and a TSO instance of Primavera. This initiative should be performed in line with Maximo to SAP PM transformation project and with other logistics and refining projects.
10.      All capital costs related to AFE# 131907045. This project, in conjunction with Tesoro's acquisition of the BP Carson City Refinery, is designed to transition and successfully integrate the Southwest's Logistics Mechanical Integrity Inspection System Information Technology assets into the Tesoro Information Technology application landscape.
For West Coast Assets Contribution Agreement listed on Schedule VII:
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Expense Projects
1.      Nikiski Terminal . Tesoro Alaska shall reimburse the Partnership Group for any costs or expenses incurred by the Partnership Group to reinstate water supply to the Operating Company’s Nikiski Terminal in connection with the water suppression system.

2.      Anacortes Light Ends Rail Facility. TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group:
to determine the adequacy of fire water at the facility;
with respect to any modifications needed to be made to fire water system to provide adequate fire water; and
for relocation of the knockout drum, if relocation is required.

3.      Anacortes Storage Facility

TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group to restore Tank 135 to API 653 specifications. TRMC shall be deemed to be the generator of all hazardous waste and other waste removed from Tank 135 in connection with such cleaning and restoration and shall be responsible for all obligations arising as the generator of such hazardous waste and other waste.

TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group for decommissioning and repair of sewer lines for Tanks 165 and 166.

4.      Martinez Light Ends Rail Facility . TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group:

to determine the adequacy of fire water at the facility; and
with respect to any modifications needed to be made to fire water system to provide adequate fire water.

5.      Martinez Clean Products Truck Rack . TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group:

if required to supplement data currently available in the baseline inspections records in order to properly document corrosion, to carry out new tank corrosion inspections on Tanks 777, 778 and 890, as well as any repairs resulting from such inspections to meet API 653 standards; and
with respect to Tank 777, the tank berm size and tank proximity evaluation scheduled to completed by year-end 2014, as well as any required adjustments resulting therefrom.

6.      Martinez Light Ends Storage . If required to supplement data currently available in the baseline inspection records in order to properly document pipe integrity, TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group

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for inspections and analyses conducted to confirm baseline pipe integrity by year-end 2014, as well as any repairs arising from defects identified through such inspections.

7.      Tesoro Alaska Pipeline

Tesoro shall reimburse the Partnership Group for any costs or expenses incurred by the Partnership Group to carry out the repairs and tests identified in the Coffman Engineers report dated May 8, 2014, including the planned hydro-test in 2015 and any resulting repairs therefrom.

Tesoro shall reimburse the Partnership Group for any costs or expenses incurred by the Partnership Group to carry out repairs identified pursuant to the inspection on the Tesoro Alaska Pipeline as a result of the inspection scheduled to begin June 30, 2014.

Capital Projects
1.      All capital costs related to AFE# 125100055 - Additive reservoir tank and pumping system for the Nikiski Terminal truck loading rack.
2.      All capital costs related to AFE# 127100012 - Design, procure, and install Biodiesel Blending Facility at existing Martinez Tract 3 Truck Loading Rack.
3.      All capital costs related to AFE# 132100017 - Martinez gasoline loading rack filtration.
4.      All capital costs related to AFE# 125110005 - Fabrication and installation of a skid-mounted clay treatment system at the Tesoro Alaska Pipeline Port of Anchorage delivery facility.
5.      All capital costs related to AFE# 125110007 - Provision of inline strainers upstream of the Kenai Pump station pipeline pumps and upstream of the Anchorage receiving station control valve.
6.      All capital costs related to AFE# 124100034 - Purchase and installation of (5) IP CCTV Cameras, and security video monitoring station for Tesoro Alaska Pipeline Anchorage control room (located at the Port of Anchorage Industrial Park), MLV 7 on Northernlights Blvd, and the ASIG Filter Building located at Ted Stevens International Airport.
7.      All capital costs related to AFE# 145110002 regarding the installation of semi-deep cathodic protection wells, a new rectifier and electrical service at the Tesoro Alaska Pipeline.
8.      All capital costs related to AFE# 124100030 regarding new CCTV monitoring system at the Nikiski Terminal.
9.      All capital costs related to AFE# 145120005 regarding a new cathodic protection anode bed and rectifier for the Nikiski Terminal.




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10.      All capital costs related to AFE# TBD regarding Fall Protection for Top Loading Tank Cars and Trucks.
11.      All capital costs related to AFE# 132100017 regarding the installation of a new Tract 3 Gasoline Loading Rack Filtration System to replace the existing rental units.
12.      All capital costs related to AFE# PTS 12475 regarding LPG Tank Car Loading Rack Improvements.
13.      All capital costs related to AFE# TBD regarding the installation of a system to add ExxonMobil additives to gasoline at the Tr. 3 truck loading rack.
14.      All capital costs related to AFE# 145110009 regarding the implementation of Tesoro Alaska Pipeline mainline delivery strainer.

















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For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

Capital Projects
TRMC shall reimburse the Partnership Group for:
1. Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following piping systems projects: AFE# 136104160BP (TCM Idea# 2013218160), TCM Idea# 2013212538, TCM idea# 2013212540 and TCM Idea# 2013212539. For any such projects listed above in this section 1 that are required to maintain safe operation of the Assets, the Partnership shall determine the final project scope in its sole discretion.

2. Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following instrumentation and control projects: AFE# 154100014 (TCM Idea# 2014217001), TCM Idea #2014217008, AFE# 136104169BP (TCM Idea# 2013218169), AFE# 136104190BP (TCM Idea# 2013218190), TCM Idea# 2013212558, and TCM Idea # 2014217023. For any such projects listed above in this section 2 that are required to maintain safe operation of the Assets, the Partnership shall determine the final project scope in its sole discretion.

3. Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following tank improvements: TCM Idea# 2014217135 (tk 56), TCM Idea# 2013212585 (tk 1), TCM Idea# 2014217132 (tk 90), TCM Idea# 2014217133 (tk 11), TCM Idea# 2013212575 (tk 34), TCM Idea # 2013212587 (tk 35), TCM Idea# 2013212588 (tk 10), TCM Idea# 2013212589 (tk 58), TCM Idea# 2013212592 (tk 39), TCM Idea# 2013212593 (tk 968), TCM Idea# 2013212595 (tk 60), TCM Idea# 2013212596 (tk 69), TCM Idea # 2013212597 (tk 57), TCM Idea# 2013212599 (tk 51). For any such projects listed above in this section 3 that are required to maintain safe operation of the Assets, the Partnership shall determine the final project scope in its sole discretion.

4. All capital costs related to the repair or replacement of brick structure piping supports, with the scope of repairs to be developed in 2016 and the execution of such repairs to be completed in 2017.

5. All capital costs related to the upgrade or replacement of the cathodic protection system for the tanks as identified through a cathodic protection assessment to be completed prior to year end 2016. An action plan will be developed to address recommendations identified through the assessment. The program is expected to commence in 2016 and will be executed over a 4-year period.

6. All capital costs related to the multi-phase upgrade or replacement of tank level measurement and transmitter instruments, upon mutual consent of TRMC and the Partnership of the scope for the multi-year project.  Notwithstanding the foregoing, the Partnership in its




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sole discretion shall determine the final scope of any element of the tank level instrument upgrade project required to maintain safe operation of the Assets. TRMC’s reimbursement to the Partnership Group for capital costs incurred during the Term to complete the tank level instrument upgrade or replacement project shall not exceed $15,000,000 in the aggregate.  

Expense Projects

1. With respect to the Remaining Pipeline 88 Interest (as defined in the 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII), TRMC shall reimburse the Partnership for any costs and expenses associated with curing any anomalies identified by the August 2015 in-line inspection thereof.

2. With respect to the Tankage (as defined in the 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII), as well as the land on which such Tankage is located, TRMC shall reimburse the Partnership for any costs and expenses associated with any liabilities, costs and expenses that might be imposed upon the Partnership as operator of the Tankage and which relate to the environmental condition of the land on which the Tankage is located and surrounding lands, including but not limited to any government-imposed fines or remediation costs and natural resource damages, but excluding (i) any liabilities, costs and expenses that arise from any releases or discharges of hydrocarbons or other substances from the Tankage after the date hereof or (ii) any liabilities, costs and expenses that arise from negligent acts or omissions or willful misconduct of the Partnership and its agents, contractors and representatives.

3. Until the later of (i) November 12, 2020 or (ii) the completion of any repairs identified by any applicable non-invasive or external inspections that occurred prior to such date, TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group to restore any tank included in the 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII to API 653 or API 510 specifications that are identified through the Partnership Group’s non-invasive or external inspections.

4. During the term (including any extension thereof) of the Carson II Storage Services Agreement, dated as of November 12, 2015, by and among TRMC, the General Partner, the Partnership and the Operating Company (the “Carson II Storage Agreement”), TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group to restore any tank included in the 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII to API 653 or API 510 specifications, as determined by the results of the first scheduled internal inspection of any such tank after the date hereof (the “First Internal Inspection”). TRMC shall be deemed to be the generator of all hazardous waste and other waste removed from any such tanks in connection with such cleaning and restoration and shall be responsible for all obligations arising as the generator of such hazardous waste and other waste.

a)
TRMC and the Operating Company shall mutually agree on the inspection schedule and the duration of such inspections so as to minimize disruption





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within the Wilmington and Carson refinery systems, with TRMC having the right to approve the final inspection schedule.

b)
If TRMC fails to renew the Carson II Storage Services Agreement, prior to November 12, 2022, in accordance with the terms thereof, the Partnership Group may elect to accelerate API 653 or API 510 inspections prior to the expiration of the Carson II Storage Agreement.

5. Notwithstanding Sections 3 and 4 above, the parties agree that the following tanks included in the 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII have been inspected, cleaned, and repaired to ensure compliance with API 653 or API 510 standards within the 24 months prior to the date hereof, and are excluded from the reimbursement requirements listed above unless such actions fail to meet such compliance standards due to the negligence of TRMC:

Tank Number
Year of Last Inspection
53
2013
87
2013
41
2013
4
2013
88
2013
5
2013
24
2013
325
2013
326
2013
45
2014
65
2014
89
2014
276
2014
289
2014
303
2014
340
2014
50
2014
302
2014
138
2014
139
2014
289
2015
65
2015
969
2015
40
2015
955
2015
194
2015







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For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

KENAI TANKAGE:

Capital Projects
TAC shall reimburse the Partnership Group for:
1.
Upon mutual consent on project scope between TAC and the Partnership, TAC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following instrumentation and control projects: AFE# 2012217023 (TCM Idea# 137100002), TCM Idea# 2014216018, TCM Idea# 2007002425. For any such projects listed above in this section 2 that are required to maintain safe operation of the Assets, the Partnership shall determine the final project scope in its sole discretion.

2.
Upon mutual consent on project scope between TAC and the Partnership, TAC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following tank improvements: TCM Idea# 2016216002, TCM Idea#2016216001. For any such projects listed above in this section 3 that are required to maintain safe operation of the Assets, the Partnership shall determine the final project scope in its sole discretion.

3.
All capital costs related to the assessment and upgrade or replacement of tank level measurement and transmitter instruments, upon mutual consent of TAC and the Partnership of the scope for the multi-year project. Notwithstanding the foregoing, the Partnership in its sole discretion shall determine the final scope of any element of the tank level instrument upgrade project required to maintain safe operation of the Assets.

4.
All capital costs related to installation of tank liners during first API 653 inspection cycle to bring each tank into conformance with Alaska Department of Environmental Conversation standards.

5.
All capital costs related to the assessment and necessary upgrades of cathodic protection system including:

Additional anode ground beds
Additional surface distributed anodes
Additional amperes of cathodic protection for on-grade storage tanks
Under tank monitoring systems

The program is expected to commence in 2016 and will be executed over a 3-year period.

6.
All capital costs related to internal inspection, assessment and repair of Tank 11 internal floating roof.


Expense Projects
1.
The parties agree that Tank 37 included in the Alaska Assets Contribution Agreement listed on Schedule VII have been inspected, cleaned, and repaired to ensure compliance



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with API 653 or API 510 standards within the 24 months prior to the date hereof, and are excluded from the reimbursement requirements listed above unless such actions fail to meet such compliance standards due to the negligence of TAC.

2.
Any costs or expenses related to:

Completion of pressure relief documentation, expected to be complete by year-end 2016.
Completion of area classification plans per NEC 500.4, expected to be complete by year-end 2017.


ANCHORAGE AND FAIRBANKS TERMINALS:

Capital Projects
TAC shall reimburse the Partnership Group for:
1.
All capital costs related to:

a)
Anchorage Terminal
Installation of permanent fire water pipeline supports with proper coating; expected to be complete by year-end 2017.
Assessment, evaluation and potential replacement of two deep anode ground beds (No. 2 and No. 5); expected to be completed within cathodic protection program by year-end 2018.
Installation of third tank floor on Tank 4236 with either new cathodic protection system or an El Segundo system; expected to be complete by year-end 2020.
Assessment and upgrades to add access platforms and roof protection to east side filter vessels; expected to be complete by year-end 2017.

b)
Fairbanks Terminal
Assessment, evaluation and potential replacement of two deep anode ground beds and installation of two new rectifiers to allow ground beds to be operated independently; expected to be completed within cathodic protection program by year-end 2018.

Expense Projects
1.
Any costs or expenses related to:

a.
Anchorage Terminal
Inspection and assessment of buried product pipeline; expected to be complete by year-end 2017.
Assessment of manual operation of rail car sump tankage; expected to be complete by year-end 2017.

b.
Fairbanks Terminal - Any costs or expenses related to:




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Arc flash assessment; expected to be complete by year-end 2017.
Relief valve sizing and selection assessment; expected to be complete by year-end 2017.












































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Schedule VII
Contribution Agreements and Applicable Terms
Initial Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Tesoro Indemnifying Parties
Tesoro Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement, dated as April 26, 2011, among the Partnership, the General Partner, the Operating Company, Tesoro, Tesoro Alaska, TRMC and Tesoro High Plains Pipeline Company LLC
April 26, 2011
April 26, 2013
April 26, 2016
TRMC and Tesoro Alaska
TRMC
April 26, 2021
Yes


















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Amorco Contribution Agreement

Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Tesoro Indemnifying Parties
Tesoro Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement dated as of April 1, 2012, among the Partnership, the General Partner, the Operating Company, Tesoro and TRMC
April 1, 2012
April 1, 2014
April 1, 2017
TRMC
TRMC
April 1, 2022
Yes














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Long Beach Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Tesoro Indemnifying Parties
Tesoro Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement executed as of September 14, 2012, among the Partnership, the General Partner, the Operating Company, Tesoro and TRMC
Execution Date is September 14, 2012, and various Effective Times are upon receipt of the Long Beach Approval, the CDFG Approval and the Other Approvals as set forth in the agreement, as applicable
September 14, 2014
September 14, 2017
TRMC
TRMC
September 14, 2022
Yes










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Anacortes Rail Facility Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Tesoro Indemnifying Parties
Tesoro Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement executed as of November 15, 2012, among the Partnership, the General Partner, the Operating Company, Tesoro and TRMC
November 15, 2012
November 15, 2014
November 15, 2017
TRMC
TRMC
November 15, 2022
No














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BP Carson Tranche 1 Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Tesoro Indemnifying Parties
Tesoro Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement executed as of May 17, 2013, among the Partnership, the General Partner, the Operating Company, Tesoro and TRMC
June 1, 2013
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
No













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BP Carson Tranche 2 Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Tesoro Indemnifying Parties
Tesoro Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement executed as of November 18, 2013, among the Partnership, the General Partner, the Operating Company, Tesoro, TRMC and Carson Cogeneration Company
December 6, 2013
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
No



























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West Coast Assets Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Tesoro Indemnifying Parties
Tesoro Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement executed as of June 23, 2014, among the Partnership, the General Partner, the Operating Company, Tesoro Logistics Pipelines LLC, Tesoro, TRMC and Tesoro Alaska
First Closing Date: July 1, 2014
Second Closing Date has the meaning set forth in this Contribution Agreement
The second (2 nd ) anniversary of the First Closing Date or the Second Closing Date, as applicable
With respect to Section 3.1(a): Not applicable
With respect to Section 3.2: The fifth (5 th ) anniversary of the First Closing Date or the Second Closing Date, as applicable
Tesoro, TRMC, Tesoro Alaska
Tesoro, TRMC, Tesoro Alaska
The tenth (10 th ) anniversary of the First Closing Date or the Second Closing Date, as applicable.
Yes












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2015 Line 88 and Carson Tankage Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Tesoro Indemnifying Parties
Tesoro Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement effective as of November 12, 2015, among the Partnership, the General Partner, the Operating Company, Tesoro SoCal Pipeline Company LLC, Tesoro, TRMC and Carson Cogeneration Company
November 12, 2015
November 12, 2017
November 12, 2020
Tesoro, TRMC, Carson Cogen
Tesoro, TRMC, Carson Cogen
November 12, 2025
Yes














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Third Amended and Restated Omnibus Agreement






2016 Alaska Assets Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Tesoro Indemnifying Parties
Tesoro Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement effective as of July 1, 2016, among the Partnership, the General Partner, the Operating Company, Tesoro Alaska Company LLC, and Tesoro
KENAI TANKAGE
July 1, 2016
July 1, 2018
July 1, 2021
Tesoro Alaska Company LLC
Not applicable
July 1, 2026
Yes
Contribution, Conveyance and Assumption Agreement effective as of July 1, 2016, among the Partnership, the General Partner, the Operating Company, Tesoro Alaska Company LLC, and Tesoro
ANCHORAGE AND FAIRBANKS TERMINALS
The Second Closing Date under the Contribution Agreement (the “Second Closing Date”)
Two years after the Second Closing Date
Seven years after the Second Closing Date
Tesoro Alaska Company LLC
Not applicable
Ten years after the Second Closing Date
Yes















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Schedule VIII
Administrative Fee and Indemnification Deductibles
Monthly Administrative Fee
$858,333.33
Annual Environmental Deductible
$800,000

Annual ROW Deductible
$800,000

































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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, TRMC 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, TRMC 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.




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For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

Other . Notwithstanding any other provisions of (i) the Third Amended and Restated Omnibus Agreement, (ii) the Anacortes Track Use and Throughput Agreement among the General Partner, the Partnership, the Operating Company and TRMC, (iii) the Anacortes Mutual Track Use Agreement among the General Partner, the Partnership, the Operating Company and TRMC, and (iv) the Ground Lease between TRMC 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 the Third Amended and Restated Omnibus Agreement shall be subordinate to the respective indemnification provisions of each of the other agreements referenced above.

For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII :

Other . Notwithstanding any other provisions of (i) the Third Amended and Restated Omnibus Agreement, (ii) the BP Carson Tranche 1 Contribution Agreement listed on Schedule VII , (iii) the Master Terminalling Services Agreement - Southern California among TRMC, the General Partner, the Partnership and the Operating Company dated as of June 1, 2013, as amended, and (iv) the Carson Storage Services Agreement among TRMC, the General Partner, the Partnership and the Operating Company dated as of June 1, 2013, 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.  In the event of a conflict of provisions of any of the above-referenced agreements and the Carson Assets Indemnity Agreement, the provisions of the Carson Assets Indemnity Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements. Notwithstanding anything to the contrary in the Third Amended and Restated Omnibus Agreement, the indemnification provisions of Sections 3.2 and 3.5 thereof shall not apply to the Assets as defined in the BP Carson Tranche 1 Contribution Agreement listed on Schedule VII .

















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For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII :

Other . Notwithstanding any other provisions of (i) the Third Amended and Restated Omnibus Agreement, (ii) the BP Carson Tranche 2 Contribution Agreement listed on Schedule VII , (iii) the Amended and Restated Master Terminalling Services Agreement - Southern California among TRMC, the General Partner, the Partnership and the Operating Company dated as of December 6, 2013, (iv) the Long Beach Storage Services Agreement among TRMC, the General Partner, the Partnership and the Operating Company dated as of December 6, 2013, (v) the Berth 121 Operating Agreement between the Operating Company and Carson Cogeneration Company, dated as of December 6, 2013, (vi) the Terminals 2 and 3 Operating Agreement among the Partnership, the General Partner, the Operating Company and TRMC, dated as of December 6, 2013, (vii) the Amended and Restated Long Beach Berth Access Use and Throughput Agreement among the Partnership, the General Partner, the Operating Company and TRMC, dated as of December 6, 2013, (viii) the Long Beach Berth Throughput Agreement among the Partnership, the General Partner, the Operating Company, TRMC and Carson Cogeneration Company, dated as of December 6, 2013, (ix) the SoCal Transportation Services Agreement between TRMC and Tesoro SoCal Pipeline Company LLC, dated as of December 6, 2013, (x) the Long Beach Pipeline Throughput Agreement among the Partnership, the General Partner, the Operating Company and TRMC, dated as of December 6, 2013, (xi) the Carson Coke Handling Services Agreement among the Partnership, the General Partner, the Operating Company and TRMC, dated as of December 6, 2013, (xii) the Coke Barn Lease Agreement between the Operating Company and TRMC, dated as of December 6, 2013 and (xiii) the Terminals 2 and 3 Ground Lease between the Operating Company and TRMC, dated as of December 6, 2013, 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.  In the event of a conflict of provisions of any of the above-referenced agreements and the Carson Assets Indemnity Agreement, the provisions of the Carson Assets Indemnity Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements.




















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For West Coast Assets Contribution Agreement listed on Schedule VII:

Other . Notwithstanding any other provisions of (i) the Third Amended and Restated Omnibus Agreement, (ii) the Terminalling Services Agreement - Nikiski, among the General Partner, the Partnership, the Operating Company and Tesoro Alaska, (iii) the Terminalling Services Agreement - Anacortes, among the General Partner, the Partnership, the Operating Company and TRMC, (iv) the Terminalling Services Agreement - Martinez, among the General Partner, the Partnership, the Operating Company and TRMC, and (v) the Storage Services Agreement - Anacortes, the Terminalling Services Agreement - Anacortes, among the General Partner, the Partnership, the Operating Company and TRMC, 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. In the event of a conflict of provisions of any of the above-referenced agreements and the Third Amended and Restated Omnibus Agreement, the provisions of the Third Amended and Restated Omnibus Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements.

For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

Other . Notwithstanding any other provisions of (i) the Third Amended and Restated Omnibus Agreement, (ii) the Carson II Storage Agreement, and (iii) Amendment No. 1 to the (SoCal) Transportation Services Agreement dated November 12, 2015, between TRMC and Tesoro SoCal Pipeline Company LLC, 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. In the event of a conflict of provisions of any of the above-referenced agreements and the Third Amended and Restated Omnibus Agreement, the provisions of the Third Amended and Restated Omnibus Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements.

For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

Other . The Partnership Group agree that, after the Effective Date, they shall not knowingly breach any covenants of TAC contained in that certain Asset Purchase Agreement dated as of November 20, 2015 by and between Flint Hills Resources Alaska, LLC and TAC (the “Flint Hills APA”) as if the Partnership Group were parties thereto instead of TAC.

Notwithstanding any other provisions of (i) the Third Amended and Restated Omnibus Agreement, (ii) the Kenai Storage Services Agreement, and (iii) the Alaska Terminalling Services Agreement, 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. In the event of a conflict of provisions of any of the above-referenced agreements and the Third Amended and Restated Omnibus Agreement, the provisions of the Third Amended and Restated Omnibus


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Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements.

Notwithstanding any other provisions of the Third Amended and Restated Omnibus Agreement, the indemnification obligations of the Tesoro Entities under Section 3.1(a) of the Third Amended and Restated Omnibus Agreement with regard to the 2016 Environmental Consent Decree are limited to reimbursement for any capital expenditures that the Partnership Group may be required to make to comply therewith and any fines or other penalties which may be levied for any failure therewith (except to the extent such fines or other penalties are the result of the failure of the Partnership Group to comply therewith with regard to the contributed assets) and such indemnification obligations shall extend to or cover any increased ongoing operating or maintenance expenses incurred by the Partnership Group in connection with their compliance therewith.










































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Exhibit 99.1

TSOERLOGOA02.JPG
TESORO CORPORATION SELLS REMAINING ALASKA STORAGE AND TERMINALLING ASSETS TO TESORO LOGISTICS

SAN ANTONIO - September 16, 2016 - Tesoro Corporation (NYSE:TSO) and Tesoro Logistics LP (NYSE:TLLP) today announced that TLLP has closed the remaining portion of the acquisition of storage and terminalling assets in Alaska owned by subsidiaries of Tesoro. TLLP acquired the refined products terminals in Anchorage and Fairbanks, Alaska, for total consideration of $178 million, including $160 million of cash financed with borrowings on TLLP's revolving credit facility and $18 million of common and general partner units to Tesoro. The equity consideration was based on the average daily closing price of TLLP's common units for the 10 trading days prior to closing, or $47.05 per unit, with 358,712 units in the form of common units and 20,440 units in the form of general partner units.

"The acquired terminals build upon TLLP's logistics capabilities in the region and enable TLLP to provide a first class, full-service solution for customers in Alaska," said Greg Goff, Chairman and CEO.

Combined with the crude oil and refined product storage portion of the transaction which closed on July 1, 2016, the total acquisition price was $444 million, which includes cash of $400 million and the issuance of common and general partner units to Tesoro, valued at approximately $44 million.

ABOUT TESORO CORPORATION
Tesoro Corporation, a Fortune 100 company, is an independent refiner and marketer of petroleum products. Tesoro, through its subsidiaries, operates seven refineries in the western United States with a combined capacity of over 895,000 barrels per day and ownership in a logistics business, which includes an interest in Tesoro Logistics LP (NYSE: TLLP) and ownership of its general partner. Tesoro's retail-marketing system includes over 2,400 retail stations under the ARCO®, Shell®, Exxon®, Mobil®, USA Gasoline TM , Rebel TM and Tesoro® brands.

This press release contains certain statements that are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to, among other things: the expectation that the acquired terminals will enable TLLP to provide a first class, full-service solution for our customers in Alaska. For more information concerning factors that could affect these statements, see the respective annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K for Tesoro Corporation and Tesoro Logistics LP, filed with the Securities and Exchange Commission. We undertake no obligation to publicly release the result of any revisions to any such forward-looking statements that may be made to reflect events or circumstances that occur, or which we become aware of, after the date hereof.



Contact:
Investors:
Sam Ramraj, Vice President, Investor Relations, (210) 626-4757

Media:
Tesoro Media Relations, media@tsocorp.com, (210) 626-7702