TESORO WASATCH LLC (Form: S-3ASR, Received: 09/13/2012 09:05:03)

As filed with the Securities and Exchange Commission on September 13, 2012

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Tesoro Corporation

and Other Registrants

(see Table of Additional Registrants below)

(Exact name of registrant as specified in its charter)


Delaware		95-0862768
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

(210) 626-6000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Charles S. Parrish, Esq.

Tesoro Corporation

Executive Vice President, General Counsel and Secretary

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

(210) 626-6000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copy to:

Kenneth B. Wallach, Esq.

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

(212) 455-2000

Douglas S. Horowitz, Esq.

Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

(212) 701-3000

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. x

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

CALCULATION OF REGISTRATION FEE



Title of Each Class of Securities to be Registered	Proposed maximum aggregate offering price	Amount of registration fee
Senior Notes	(1)	(2)
Subsidiary guarantees of Senior Notes	(3)	(3)

(1)	Omitted pursuant to Form S-3 General Instruction II.E. Such indeterminate principal amount of Senior Notes is being registered as may from time to time be sold at indeterminate prices.

(2)	Since an unspecified amount of securities registered herein will be offered pursuant to an automatic shelf registration statement, the issuer has elected to rely on Rule 456(b) and Rule 457(r) of the Securities Act of 1933, as amended, to defer payment of the registration fee.

(3)	In accordance with Rule 457(n), no separate fee is payable with respect to the Subsidiary Guarantees.

Table of Additional Registrants


Exact Name of Registrant as Specified in its Charter/Constituent Documents	State or Other Jurisdiction of Incorporation or Organization		I.R.S. Employer Identification No.
Gold Star Maritime Company		Delaware		74-2886469
Smiley’s Super Service, Inc.		Hawaii		99-0088611
Tesoro Alaska Company		Delaware		94-1646130
Tesoro Aviation Company		Delaware		74-2922277
Tesoro Companies, Inc.		Delaware		74-2385513
Tesoro Environmental Resources Company		Delaware		74-1956314
Tesoro Far East Maritime Company		Delaware		74-2886469
Tesoro Hawaii, LLC		Hawaii		99-0143882
Tesoro Maritime Company		Delaware		74-2886466
Tesoro Northstore Company		Alaska		92-0098209
Tesoro Refining and Marketing Company		Delaware		76-0489496
Tesoro Sierra Properties, LLC		Delaware		36-4606745
Tesoro South Coast Company, LLC		Delaware		37-1541638
Tesoro Trading Company		Delaware		75-3025497
Tesoro Wasatch, LLC		Delaware		74-3009694
Tesoro West Coast Company, LLC		Delaware		35-2295010

The address, including zip code, and telephone number, including area code, of each registrant’s principal executive offices is shown on the cover page of this Registration Statement on Form S-3.

The information in this preliminary prospectus is not complete and may be changed. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion

Preliminary Prospectus dated September 13, 2012


PROSPECTUS		CONFIDENTIAL

Tesoro Corporation

$925,000,000

$ % Senior Notes due 2017

$ % Senior Notes due 2022

The Company:

•

We are one of the largest independent petroleum refiners and marketers in the United States.

The Offering:

•

Offered Securities: We are offering $925,000,000 aggregate principal amount of senior notes, consisting of $ aggregate principal amount of % Senior Notes due 2017 (the “2017 Notes”) and $ aggregate principal amount of % Senior Notes due 2022 (the “2022 Notes” and together with the 2017 Notes, the “notes”).

•

Use of Proceeds: All or a portion of the proceeds from the offering of the notes will be used to fund the repurchase of the 2015 Notes and the Existing 2017 Notes (each as defined below) as described under “Summary—Related transactions.”

The Senior Notes:

•

Maturity: The 2017 Notes will mature on , 2017, and the 2022 Notes will mature on , 2022.

•

Interest Payments: The notes will pay interest semi-annually in arrears on and of each year, commencing on , 2013.

•

Guarantees: The notes will be guaranteed on a senior unsecured basis by substantially all of our existing and future domestic subsidiaries that have guaranteed our credit facilities.

•

Ranking: The notes will be our general senior unsecured obligations and will rank equal in right of payment with all of our existing and future senior indebtedness, including our 6 ¹ / ₄ % senior notes due 2012, of which $299 million aggregate principal amount remains outstanding and which we expect to redeem in full on September 21, 2012 (as described under “Summary—Recent developments”), or 2012 Notes, our 6 ⁵ / ₈ % senior notes due 2015, of which $450 million aggregate principal amount remains outstanding, or 2015 Notes, our 6½% senior notes due 2017, of which $473 million aggregate principal amount remains outstanding, or Existing 2017 Notes, and our 9¾% senior notes due 2019, of which $300 million aggregate principal amount remains outstanding, or 2019 Notes and, together with the 2012 Notes, 2015 Notes and Existing 2017 Notes, the Existing Senior Notes, and amounts outstanding under our revolving credit facility and any reimbursement obligations outstanding under our letter of credit facilities. The notes will rank senior to any future subordinated indebtedness we may incur. The notes will be effectively junior to all of our existing and future secured indebtedness, including amounts outstanding under our revolving credit facility and any reimbursement obligations outstanding under our letter of credit facilities, in each case, to the extent of the collateral securing such indebtedness.

The guarantees will rank equal in right of payment with the existing and future senior indebtedness of the guarantors, including the guarantees of the Existing Senior Notes, our revolving credit facility and reimbursement obligations under our letter of credit facilities, and will rank senior to any future subordinated indebtedness the guarantors may incur.

•

Optional Redemption: At any time prior to , 2017, we may redeem some or all of the 2017 Notes at a “make-whole” redemption price. At any time prior to , 2017, we may redeem some or all of the 2022 Notes at a “make-whole” redemption price. On or after , 2017, we may redeem some or all of the 2017 Notes at a redemption price equal to 100% of the principal amount thereof. On or after , 2017, we may redeem some or all of the 2022 Notes at the redemption prices set forth under “Description of the notes—Optional redemption—2022 Notes.” In addition, at any time prior to , 2015, we may redeem up to 35% of the 2022 Notes with the proceeds we receive from certain equity offerings at the prices set forth under “Description of the notes—Optional redemption—2022 Notes.”

•

Redemption at the Option of the Holder: We must offer to purchase the notes if we experience specific kinds of changes of control or sell assets under certain circumstances. See “Description of the notes—Repurchase at the option of holders.”

Investing in the notes involves risks. See “ Risk factors ” on page 21.


	Per 2017 Note	Total for 2017 Notes	Per 2022 Note	Total for 2022 Notes	Total

Public Offering Price(1)	%	$	%	$	$
Underwriting Discounts and Commissions	%	$	%	$	$
Proceeds to Tesoro Corporation(1)	%	$	%	$	$

(1)

Plus accrued interest, if any, from , 2012.

The notes will not be listed on any securities exchange. Currently, there is no public market for the notes.

We expect that delivery of the notes to purchasers will be made on or about , 2012 in book entry form through The Depository Trust Company for the account of its participants, including Clearstream Banking société anonyme and Euroclear Bank, S.A./N.V.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these notes or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Joint Book-Running Managers


RBS		J.P. Morgan		Mizuho Securities		Natixis

Co-Managers


Credit Agricole CIB		RBC Capital Markets		Scotiabank		UBS Investment Bank

The date of this prospectus is , 2012.

You should rely only on the information contained in or incorporated by reference in this prospectus and any related free writing prospectus. We have not authorized anyone to provide you with different information. We are not and the underwriters are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

Table of contents


	Page

Summary		1

Risk factors		21

Disclosure regarding forward-looking statements		34

Use of proceeds		36

Cash and capitalization		37

Description of other indebtedness		39

Description of the notes		45

Book-entry, delivery and form		103

Material United States federal income tax consequences		108

Certain ERISA considerations		114

Underwriting		116

Legal matters		120

Experts		120

Where you can find more information		120

Incorporation by reference		121

Summary

The following summary highlights selected information contained or incorporated by reference in this prospectus and is qualified in its entirety by and should be read in conjunction with the detailed information and financial statements and related notes contained or incorporated by reference in this prospectus, including the matters discussed under the caption “Risk Factors.” The terms “Tesoro”, “we”, “our” and “us”, except as otherwise indicated in this prospectus or as the context otherwise indicates, refer to Tesoro Corporation and its subsidiaries.

The Company

We are one of the largest independent petroleum refiners and marketers in the United States. Our subsidiaries, operating through two business segments, primarily manufacture and sell transportation fuels. Our refining operating segment (“refining”), which operates seven refineries in the western United States, refines crude oil and other feedstocks into transportation fuels, such as gasoline and gasoline blendstocks, jet fuel and diesel fuel, as well as other products, including heavy fuel oils, liquefied petroleum gas, petroleum coke and asphalt. This operating segment sells refined products in wholesale and bulk markets to a wide variety of customers within the operations area. Our retail operating segment (“retail”) sells transportation fuels and convenience products in 18 states through a network of approximately 1,375 retail stations (as of June 30, 2012), primarily under the Tesoro ^® , Shell ^® and USA Gasoline ^TM brands.

We currently own and operate seven petroleum refineries located in the western United States and sell transportation fuels to a wide variety of customers. Our refineries produce a high proportion of the transportation fuels that we sell. Our seven refineries have a combined crude oil capacity of approximately 675 thousand barrels per day, or Mbpd. Crude oil capacity and throughput rates of crude oil and other feedstocks by refinery are as follows:


			Throughput (Mbpd)
	Crude oil capacity (mbpd)(1)		Year ended December 31,						Six months ended
Refinery	Crude oil capacity (mbpd)(1)		2009		2010		2011		June 30, 2011		June 30, 2012


California
Martinez		166		141		124		140		136		119
Wilmington		97		100		99		101		102		110

Pacific Northwest
Washington(2)		120		84		39		98		97		107
Alaska		72		51		54		55		55		42

Mid-Pacific
Hawaii		94		68		64		71		68		61

Mid-Continent
North Dakota		68		54		50		59		57		58
Utah		58		51		50		55		55		57

Total		675		549		480		579		570		554

(1)

Throughput can exceed crude oil capacity due to the processing of other feedstocks in addition to crude oil.

(2)

Our Washington refinery was temporarily shut down from April 2010 to November 2010.

California refineries

Martinez

Refining . Our 166 Mbpd Martinez refinery is located in Martinez, California on approximately 2,200 acres about 30 miles east of San Francisco. We source crude oil for this refinery from California, Alaska and foreign locations. The Martinez refinery also processes intermediate feedstocks. The refinery’s major processing units include crude distillation, vacuum distillation, delayed coking, hydrocracking, naphtha reforming, hydrotreating, fluid catalytic cracking and alkylation units. The refinery produces a high proportion of transportation fuels, including cleaner-burning California Air Resources Board, or CARB, gasoline and CARB diesel fuel, as well as conventional gasoline and diesel fuel. The refinery also produces heavy fuel oils, liquefied petroleum gas and petroleum coke.

Transportation . Our Martinez refinery’s two leased marine terminals have access through the San Francisco Bay that enables us to receive crude oil and ship refined products. In addition, the refinery can receive crude oil through a third-party marine terminal at Martinez. The Martinez Crude Oil Terminal was sold to Tesoro Logistics LP, or TLLP, effective April 1, 2012, as discussed below. We also receive California crude oils and ship refined products from the refinery through third-party pipelines.

Terminals . We operate a refined products terminal at our Martinez refinery. Additionally, TLLP operates a leased refined products terminal at Stockton, California. See “—Tesoro Logistics LP”. We distribute refined products through these and third-party terminals in our market areas and through purchase and exchange arrangements with other refining and marketing companies. We also lease third-party clean product tanks with access to the San Francisco Bay.

Sale of Crude Oil Marine Terminal to TLLP. Effective April 1, 2012, Tesoro Refining and Marketing Company, or TRMC, our wholly owned subsidiary, entered into a transaction (which we refer to as the “Martinez Terminal Sale”) to sell to TLLP the Martinez Crude Oil Marine Terminal and associated assets in Martinez, California, or the Martinez Terminal. The Martinez Terminal Sale was made in exchange for consideration from TLLP of $75 million, comprised of $67.5 million in cash financed with borrowings under the TLLP Revolving Credit Facility and the issuance of equity with a combined fair value of $7.5 million. In connection with the Martinez Terminal Sale we entered into a 10-year use and throughput agreement under which the pipelines and tanks at the Martinez Terminal will be dedicated and used exclusively for the throughput and storage of our crude oil and refined products.

In connection with the Martinez Terminal Sale we also amended and restated the omnibus agreement with TLLP, or the Amended Omnibus Agreement. Additional sales of assets from the Company and its affiliates to TLLP, including the assets in the Martinez Terminal Sale, are governed by the Amended Omnibus Agreement. The fee payable to us for provision of various general and administrative services under the Amended Omnibus Agreement did not change.

Wilmington

Refining . Our 97 Mbpd Wilmington refinery is located in Wilmington, California on approximately 300 acres about 20 miles south of Los Angeles. We source crude oil for our Wilmington refinery from California as well as foreign locations. The Wilmington refinery also

processes intermediate feedstocks. The refinery’s major processing units include crude distillation, vacuum distillation, delayed coking, hydrocracking, naphtha reforming, hydrotreating, fluid catalytic cracking, butane isomerization and alkylation units. The refinery produces a high proportion of transportation fuels, including CARB gasoline and CARB diesel fuel, as well as conventional gasoline, diesel fuel and jet fuel. The refinery also produces heavy fuel oils, liquefied petroleum gas and petroleum coke.

Transportation . Our Wilmington refinery leases a marine terminal at the Port of Long Beach that enables us to receive crude oil and ship refined products. The refinery can also receive crude oils from the San Joaquin Valley and the Los Angeles Basin and ship refined products from the refinery through third-party pipelines. TRMC intends to sell its Long Beach Marine Terminal and Los Angeles short-haul pipelines to TLLP on September 14, 2012 in exchange for total consideration of approximately $210 million. See “—Recent developments.”

Terminals . TLLP owns and operates a refined products terminal adjacent to our Wilmington refinery. Additionally, we distribute refined products through third-party terminals in our market areas and through purchases and exchange arrangements with other refining and marketing companies. We also lease refined product storage tanks at third-party terminals in Southern California, the majority of which have access to marine terminals.

Acquisition of BP assets in Southern California

On August 8, 2012, we entered into a purchase and sale agreement with BP West Coast Products, LLC, and certain other sellers to purchase BP’s integrated Southern California refining and marketing business. See “—Recent developments”.

Pacific Northwest refineries

Washington

Refining. Our 120 Mbpd Anacortes, Washington refinery is located in northwest Washington on approximately 900 acres about 70 miles north of Seattle. We source our Washington refinery’s crude oil from Alaska, North Dakota, Canada and other foreign locations. We have completed an unloading facility to offload additional crude oils from the Bakken Shale/Williston Basin. These crude oils will improve our product yield and provide us an increased crude oil cost advantage. In July 2011, we announced our intention to offer TLLP this unloading facility upon completion. The facility was placed in service in the third quarter of 2012 and we expect to offer, and to close the sale of, the facility to TLLP in the fourth quarter of 2012. The Washington refinery also processes intermediate feedstocks, primarily heavy vacuum gas oil, produced by some of our other refineries and purchased in the spot-market from third-parties.

The refinery’s major processing units include crude distillation, vacuum distillation, deasphalting, naphtha reforming, hydrotreating, fluid catalytic cracking, butane isomerization and alkylation units, which enable us to produce a high proportion of transportation fuels, such as gasoline including CARB gasoline and components for CARB gasoline, diesel fuel and jet fuel. The refinery also produces heavy fuel oils, liquefied petroleum gas and asphalt.

Transportation. Our Washington refinery receives Canadian crude oil through a third-party pipeline originating in Edmonton, Alberta, Canada. We receive other crude oils and butanes through our Washington refinery’s marine terminal and its rail facility. The refinery ships

transportation fuels including gasoline, jet fuel and diesel fuel through a third-party pipeline system, which serves western Washington and Portland, Oregon. We also deliver refined products through our marine terminal via ships and barges to West Coast and Pacific Rim markets.

Terminals. We operate truck terminals for distillates, propane and asphalt at our Washington refinery and a refined products terminal at Port Angeles, Washington, all of which are supplied primarily by our refinery. Additionally, our Washington refinery is the primary supplier to TLLP’s Vancouver, Washington terminal. We also distribute refined products through third-party terminals in our market areas, and through purchases and exchange arrangements with other refining and marketing companies.

Alaska

Refining. Our 72 Mbpd Alaska refinery is located on the Cook Inlet near Kenai on approximately 450 acres about 60 miles southwest of Anchorage. Our Alaska refinery processes crude oil from Alaska and foreign locations. The refinery’s major processing units include crude distillation, vacuum distillation, distillate hydrocracking, hydrotreating, naphtha reforming, diesel desulfurizing and light naphtha isomerization units, which produce transportation fuels, including gasoline and gasoline blendstocks, jet fuel and diesel fuel, as well as other products, including heating oil, heavy fuel oils, liquefied petroleum gas and asphalt.

Transportation. We receive crude oil into our Kenai marine terminal by tanker and through our owned and operated crude oil pipeline. Our crude oil pipeline is a 24-mile common-carrier pipeline connected to the eastside Cook Inlet oil field. We also own and operate a common-carrier refined products pipeline that runs from the Alaska refinery to TLLP and third-party terminal facilities in Anchorage and to the Anchorage International Airport. This 69-mile pipeline has the capacity to transport approximately 48 Mbpd of refined products and allows us to transport gasoline, diesel fuel and jet fuel. Both of our owned pipelines are subject to regulation by various state and local agencies. We also deliver refined products through our Kenai marine terminal and from the Port of Anchorage marine facility to customers via ships and barges.

Terminals. We operate a refined products terminal at Nikiski, which is supplied by our Alaska refinery. Additionally, our Alaska refinery supplies fuels to TLLP’s Anchorage terminal. We also distribute refined products through a third-party terminal, which is supplied through an exchange arrangement with another refining company.

Mid-Pacific refinery

Hawaii

We announced in January 2012 that we intend to sell our Hawaii operations as part of a previously announced strategy to focus on the Mid-Continent and West Coast markets. The assets for sale include the Kapolei refinery, 31 retail stations and the associated logistical assets.

Refining. Our 94 Mbpd Hawaii refinery is located in Kapolei on approximately 130 acres about 20 miles west of Honolulu. We supply the refinery with crude oil from South America, Southeast Asia, the Middle East, Russia and other foreign sources. The refinery’s major processing units

include crude distillation, vacuum distillation, visbreaking, hydrocracking, hydrotreating, and naphtha reforming units, which produce gasoline and gasoline blendstocks, jet fuel, diesel fuel, heavy fuel oils, liquefied petroleum gas and asphalt.

Transportation. We transport crude oil to Hawaii in tankers, which discharge through our single-point mooring, approximately two miles offshore from the refinery. Our three underwater pipelines from the single-point mooring allow crude oil and refined products to be transferred to and from the refinery. We own and operate a refined products pipeline from our Hawaii refinery to the Sand Island terminal, which we operate, and to third-party terminals on the island of Oahu. Furthermore, our four refined products pipelines connect the Hawaii refinery to Barbers Point Harbor, approximately three miles away, where refined products are loaded on ships and barges to transport to the neighboring islands. The Barbers Point Harbor pipelines are also connected to other third-party origination and destination points.

Terminals. We operate refined products terminals on Maui and on the Big Island of Hawaii and operate a diesel terminal on Oahu. We also have an aviation fuel terminal on Kauai, and distribute refined products from our refinery to customers through third-party terminals in our market areas.

Mid-Continent refineries

North Dakota

Refining. Our 68 Mbpd North Dakota refinery is located on the Missouri River near Mandan on approximately 950 acres. We supply the refinery primarily with crude oil produced from the Bakken Shale/Williston Basin. The refinery also has the ability to access other crude oil supplies, including Canadian crude oil. The refinery’s major processing units include crude distillation, fluid catalytic cracking, naphtha reforming, hydrotreating and alkylation units, which produce transportation fuels, including gasoline, diesel fuel and jet fuel, as well as other products, including heavy fuel oils and liquefied petroleum gas.

We recently completed a project to expand the crude oil throughput capacity at our North Dakota refinery from 58 Mbpd to 68 Mbpd. The expansion allows the refinery to process additional crude oil from the nearby Bakken Shale/Williston Basin area via the TLLP High Plains System.

Transportation. Our North Dakota refinery’s crude oil supply is gathered and transported to us by TLLP’s High Plains System. This system includes both pipeline and truck gathered barrels and can also supply crude oil from other sources, including Canada, through third-party pipeline connections.

We distribute a significant portion of our refinery’s production through a third-party refined products pipeline system, which serves various areas from Mandan, North Dakota to Minneapolis, Minnesota. Most of the gasoline and distillate products from our refinery can be shipped through that pipeline system to third-party terminals.

Terminals. We distribute our refined products through TLLP’s terminal at our North Dakota refinery and through third-party terminals in our market area.

Utah

Refining. Our 58 Mbpd Utah refinery is located in Salt Lake City on approximately 150 acres. Our Utah refinery processes crude oils primarily from Utah, Colorado, Wyoming and Canada. The refinery’s major processing units include crude distillation, fluid catalytic cracking, naphtha reforming, hydrotreating and alkylation units, which produce transportation fuels, including gasoline, diesel fuel and jet fuel, as well as other products, including heavy fuel oils and liquefied petroleum gas. We intend to make capital improvements to the Utah refinery designed to improve yields of gasoline and diesel, improve the flexibility of processing crude feedstocks, and increase throughput capacity by 4 Mbpd.

Transportation. Our Utah refinery receives crude oil primarily through third-party pipelines from oil fields in Utah, Colorado, Wyoming and Canada. We use proprietary trucking to supply the remainder of our Utah refinery’s crude oil requirements. We distribute the refinery’s production through a system of both TLLP and third-party terminals and third-party pipeline systems, primarily in Utah, Idaho and eastern Washington, with some refined products delivered by truck to Nevada and Wyoming.

Terminals. We distribute our refined products through TLLP’s terminals, including one adjacent to the refinery and two others located in Boise and Burley, Idaho as well as third-party terminals.

Wholesale marketing and refined product distribution

We sell refined products including gasoline and gasoline blendstocks, jet fuel, diesel fuel, heavy fuel oils and residual products in both the bulk and wholesale markets. At June 30, 2012, we sold over 300 Mbpd in the wholesale market primarily through independent unbranded distributors that sell refined products purchased from us through 75 owned and third-party terminals. Our bulk sales are primarily to independent unbranded distributors, other refining and marketing companies, utilities, railroads, airlines and marine and industrial end-users. These products are distributed by pipelines, ships, barges, railcars and trucks. Our sales include refined products that we manufacture, purchase or receive through exchange arrangements.

Retail

We sell gasoline and diesel fuel in the western United States through company-operated retail stations and agreements with third-party branded dealers and distributors (which we refer to as “jobber/dealers”). Our retail network provides a committed outlet for a portion of the transportation fuels produced by our refineries. Many of our company-operated retail stations include convenience stores that sell a wide variety of merchandise items. As of June 30, 2012, our retail segment included a network of approximately 1,375 branded retail stations under the Tesoro ^® , Shell ^® and USA Gasoline ^TM brands. Included in our 1,375 branded retail stations are our 49 retail stations located primarily in Washington, Oregon, California, Nevada, Idaho, Utah and Wyoming, that we acquired from SUPERVALU, Inc. in January 2012. We paid approximately $37 million for the assets. We assumed obligations under the seller’s leases and other agreements arising after the closing date. Also included in our branded retail stations are 165 retail stations leased from Thrifty Oil Co. and certain of its affiliates.

Tesoro Logistics LP

On April 26, 2011, TLLP completed the initial public offering (which we refer to as the “TLLP Offering”) of 14,950,000 common units at a price of $21.00 per unit, which included a 1,950,000 unit over-allotment option that was exercised by the underwriters. Tesoro Logistics GP, LLC, or TLGP, a 100% consolidated subsidiary, serves as the general partner of TLLP and owns a 2% general partner interest in TLLP. Headquartered in San Antonio, Texas, TLLP’s assets consist of a crude oil gathering system in the Bakken Shale/Williston Basin area, eight refined products terminals in the midwestern and western United States, a crude oil and refined products storage facility and five related short-haul pipelines in Utah. We received net proceeds of approximately $283 million from the TLLP Offering, after deducting offering expenses and debt issuance costs.

On April 1, 2012, we received an additional 206,362 common units and 4,212 general partner units as part of the consideration from the Martinez Terminal Sale. Subsequent to the sale, we held an approximate 52% interest in TLLP, including the interest of the general partner.

As partial consideration for TRMC’s sale of its Long Beach marine terminal and Los Angeles short-haul pipelines through TLGP to TLLP, as described below under “—Recent developments”, TLLP expects to issue to TLGP common units and general partner units with a total value of approximately $21 million.

Recent developments

Acquisition of BP assets in Southern California

On August 8, 2012, TRMC entered into a purchase and sale agreement with BP West Coast Products, LLC and certain other sellers to purchase BP’s integrated Southern California refining and marketing business (which we refer to as the “BP Acquisition”). The assets to be acquired include BP’s 266 Mpbd Carson refinery located adjacent to our Wilmington refinery, three marine terminals, four land storage terminals, over one hundred miles of pipelines, four product marketing terminals and approximately 800 dealer-operated retail stations in Southern California, Nevada and Arizona. In addition, the assets include the ARCO ^® brand and associated registered trademarks, as well as a master franchisee license for the ampm ^® convenience store brand. Additionally, TRMC will acquire the sellers’ 51% ownership in the 400 megawatt gas supplied Watson cogeneration facility and a 350,000 metric ton per year anode coke calcining operation, both located near the Carson refinery.

The purchase price is $1.175 billion, plus the value of inventories at the time of closing, which we estimated to be approximately $1.3 billion at August 13, 2012. We expect to finance the purchase price initially through a combination of cash and debt, although the exact amount of cash and debt financing is yet to be determined. Upon closing of the BP Acquisition, the sellers have agreed, subject to certain limitations, to retain certain obligations, responsibilities, liabilities, costs and expenses arising out of the pre-closing operations of the assets. TRMC has agreed to assume certain obligations, responsibilities, liabilities, costs and expenses arising out of or incurred in connection with decrees, orders and settlements the sellers entered into with governmental and non-governmental entities prior to closing. We expect that upon closing of the BP Acquisition that we will record certain environmental liabilities that we will assume in connection therewith. We do not expect such liabilities will have a material impact on our liquidity. The BP Acquisition, which is subject to customary closing conditions and will require approval from the Federal Trade Commission and the California Attorney General, is expected to close before mid-2013. The purchase and sale agreement provides for TRMC to pay a break-up fee of up to $140 million in the event that TRMC terminates the agreement (except for termination for specified reasons) prior to the closing of the transaction.

We intend to offer TLLP the integrated logistics system to be acquired in the BP Acquisition in multiple transactions over the first twelve months following the closing of our BP Acquisition. The integrated logistics system, which we estimate to have a master limited partnership value of approximately $1.0 billion and believe would provide TLLP with extensive regional product distribution capabilities, includes the three marine terminals, four land storage terminals, over 100 miles of pipelines (including connected access to the Los Angeles International Airport) and four product marketing terminals.

TRMC’s expected Long Beach marine terminal and Los Angeles short-haul pipelines sale to TLLP and the TLLP notes offering

TRMC intends to sell through TLGP to TLLP its Long Beach marine terminal and Los Angeles short-haul pipelines in exchange for total consideration of approximately $210 million, comprised of approximately $189 million in cash and the remaining $21 million in partnership units (which we refer to as the “Long Beach Sale”). TLLP expects to finance the $189 million cash payment with a

portion of the proceeds from its offering of $350 million aggregate principal amount of 5.875% senior notes due 2020 (which we refer to as the “TLLP Notes Offering”), the remaining proceeds of which it expects to use to repay outstanding indebtedness under its revolving credit facility, to pay fees and expenses related to the TLLP Notes Offering and the Long Beach Sale and for general partnership purposes. The TLLP Notes Offering and the Long Beach Sale are expected to close on September 14, 2012.

The Port of Long Beach Marine terminal includes assets that receive and load crude oil, intermediate feedstocks and refined products through marine vessel deliveries for transportation to and from the Wilmington refinery and other third party facilities. The short-haul pipeline assets to be sold to TLLP consist of six pipelines that transport crude oil and refined products to and from Tesoro’s Wilmington refinery, the Long Beach marine terminal and various third party facilities.

Redemption of 2012 Notes

On August 16, 2012, we gave notice to holders of our 2012 Notes that we will redeem in full on September 21, 2012 the $299 million aggregate principal amount of our 2012 Notes that remain outstanding at a redemption price of 100% of the principal amount thereof, plus accrued and unpaid interest to but not including the redemption date (which we refer to as the “2012 Notes Redemption”). We intend to fund the 2012 Notes Redemption with cash on hand.

Termination of TPSA’s revolving credit facility

In August 2012, Tesoro Panama S.A., or TPSA, repaid all borrowings under its revolving credit facility, terminated the facility and became a guarantor and a borrower under our revolving credit facility.

Tesoro was incorporated in Delaware in 1968. Our principal executive offices are located at 19100 Ridgewood Parkway, San Antonio, Texas 78259-1828, and our telephone number is (210) 626-6000. Tesoro maintains a website at http://www.tsocorp.com . Information contained on this website, or that can be accessed through our website, does not constitute part of this prospectus.

Related transactions

Cash tender offers and consent solicitation

Concurrently with the commencement of this offering, we are launching (i) cash tender offers, or the Cash Tender Offers, for any and all of our outstanding 2015 Notes, of which $450 million aggregate principal amount remains outstanding, and for any and all of our outstanding Existing 2017 Notes, of which $473 million aggregate principal amount remains outstanding (and which we refer to, together with the 2015 Notes, as the “Cash Tender Notes”), and (ii) consent solicitations with respect to certain proposed amendments to the indentures governing the Cash Tender Notes, which would eliminate most of the restrictive covenants, certain of the events of default and certain other provisions contained in the indentures, subject to customary terms and conditions. The Cash Tender Offers expire at 12:00 midnight, New York City time, on October 11, 2012, or the Expiration Time, unless extended or earlier terminated.

We are offering to purchase the 2015 Notes at a purchase price of $1,017.50 per $1,000 principal amount at maturity (which we refer to as the “Total Consideration” with respect to the 2015 Notes), which includes a $30.00 early tender payment, for each $1,000 principal amount at maturity of 2015 Notes validly tendered and not withdrawn and accepted by us for payment on or before 5:00 p.m. on September 26, 2012, or the Early Tender Date. We are offering to purchase the Existing 2017 Notes at a purchase price of $1,035.00 per $1,000 principal amount at maturity (which we refer to as the “Total Consideration” with respect to the Existing 2017 Notes), which includes a $30.00 early tender payment, for each $1,000 principal amount at maturity of Existing 2017 Notes validly tendered and not withdrawn and accepted by us for payment on or before the Early Tender Date. Cash Tender Notes tendered after the Early Tender Date but on or prior to the Expiration Time will receive the Total Consideration for such series of Cash Tender Notes less the early tender payment. In addition, holders whose Cash Tender Notes are purchased in the Cash Tender Offers will receive accrued and unpaid interest in respect of their purchased Cash Tender Notes from the last interest payment date to, but not including, the applicable payment date for such Cash Tender Notes.

Unless otherwise specified in this prospectus, we have assumed that 100% of the outstanding Cash Tender Notes will be validly tendered on or prior to the Early Tender Date and accepted for purchase in the Cash Tender Offers. Any of our 2015 Notes or Existing 2017 Notes that are not tendered and purchased in the Cash Tender Offers will remain outstanding in accordance with their terms, as amended by any supplemental indenture entered into pursuant to the Cash Tender Offer and related consent solicitation with respect to such Cash Tender Notes.

We intend to use the net proceeds from this offering and cash on hand to fund our repurchase of the Cash Tender Notes, pay fees and expenses related to the Cash Tender Offers and pay fees and expenses related to this offering of notes. In the event that there are remaining proceeds from this offering, we intend to use any such remaining proceeds for general corporate purposes, which may include, without limitation, financing the retirement of any outstanding Cash Tender Notes not purchased in the Cash Tender Offers through redemption, open market purchases or by other means, and may also include, without limitation, the repayment or the refinancing of other indebtedness, capital expenditures and working capital.

The Cash Tender Offers are not being made pursuant to this prospectus and are being made solely by our Offer to Purchase and Consent Solicitation Statement dated September 13, 2012; however, the closing of each Cash Tender Offer is contingent upon the closing of this offering. This offering is not conditioned upon the completion of the Cash Tender Offers. Pending the application of the proceeds of this offering, we expect to invest the proceeds in short-term, investment-grade marketable securities or money market obligations.

This offering of notes, the related Cash Tender Offers, the payment of fees and expenses in connection therewith, the 2012 Notes Redemption, the Long Beach Sale, the TLLP Notes Offering (each as defined under “—Recent developments”) and the use of proceeds therefrom and Tesoro Panama S.A.’s repayment of all outstanding borrowings under its revolving credit facility and termination of the facility in August 2012 are collectively referred to as the “Transactions.”

The offering

The following summary contains basic information about the notes and is not intended to be complete. For a more complete understanding of the notes, please refer to “Description of the notes.”

Issuer

Tesoro Corporation.

Securities offered

$925,000,000 aggregate principal amount of senior notes, consisting of $ aggregate principal amount of % Senior Notes due 2017 and $ aggregate principal amount of % Senior Notes due 2022.

Maturity

The 2017 Notes will mature on , 2017, and the 2022 Notes will mature on , 2022.

Interest payment dates

and of each year, commencing , 2013. Interest will accrue from , 2012.

Optional redemption

At any time prior to , 2015, we may redeem up to 35% of the 2022 Notes with the net cash proceeds of certain equity offerings at the applicable redemption price set forth under “Description of the notes—Optional redemption—2022 Notes”.

At any time prior to , 2017, we may redeem the 2017 Notes, in whole or in part, at a “make-whole” redemption price, plus accrued and unpaid interest, if any, to the date of redemption. On or after , 2017, we may redeem some or all of the 2017 Notes at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, as set forth under “Description of the Notes—Optional redemption—2017 Notes.”

At any time prior to , 2017, we may redeem the 2022 Notes, in whole or in part, at a “make-whole” redemption price, plus accrued and unpaid interest, if any, to the date of redemption. On and after , 2017, we may redeem the 2022 Notes, in whole or in part, at the redemption prices set forth under “Description of the notes—Optional redemption—2022 Notes”.

Ranking

The notes will be our general unsecured senior obligations. Accordingly, they will rank:

•

effectively subordinate to all of our existing and future secured indebtedness, including indebtedness under our revolving credit facility and reimbursement obligations outstanding under our letter of credit facilities, in each case to the extent of the value of the collateral securing such indebtedness;

•

structurally subordinate to all existing and future indebtedness and other liabilities of our non-guarantor subsidiaries (other than indebtedness and liabilities owed to us);

•

equal in right of payment with each other and to all of our existing and future senior indebtedness, including our Existing Senior Notes, our revolving credit facility and reimbursement obligations under our letter of credit facilities; and

•

senior in right of payment to any future subordinated indebtedness we may incur.

As of June 30, 2012, after giving effect to the Transactions, (1) the notes and related guarantees would have ranked structurally junior to approximately $625 million of liabilities of our non-guarantor subsidiaries, including long-term payables to affiliates, and (2) we would have had approximately $946 million of additional available capacity under our revolving credit facility. As of June 30, 2012, we had no borrowings and $904 million in letters of credit outstanding under our revolving credit facility. We had $541 million of outstanding letters of credit under our separate letter of credit facilities that are not reflected on our balance sheet because there were no outstanding reimbursement obligations thereunder as of June 30, 2012.

The notes are structurally junior to the indebtedness and other liabilities of our non-guarantor subsidiaries, including TLLP and TPSA.

Guarantees

The notes will be jointly and severally guaranteed on a senior unsecured basis by substantially all of our domestic subsidiaries that have outstanding, incur or guarantee other specified indebtedness.

Each subsidiary guarantee will rank:

•

effectively subordinate to all existing and future secured indebtedness of such guarantor subsidiary, including its guarantee of indebtedness under our revolving credit facility and reimbursement obligations under our letter of credit facilities, in each case to the extent of the value of the collateral securing such indebtedness;

•

equal in right of payment to all existing and future senior indebtedness of such guarantor subsidiary, including its guarantee of each series of notes, our Existing Senior Notes, our revolving credit facility and reimbursement obligations under our letter of credit facilities; and

•

senior in right of payment to any future subordinated indebtedness such guarantor subsidiary may incur.

Certain of our subsidiaries, including (1) any entities related to TLLP and (2) TPSA will not guarantee the notes. As of June 30, 2012, our guarantor subsidiaries had $21 million of indebtedness outstanding related to capital lease obligations that would have been structurally senior to the notes offered hereby.

Any guarantee of the notes will be released in the event such guarantee is released under the revolving credit facility.

Our non-guarantor subsidiaries, including TLLP and TPSA, accounted for approximately $3.0 billion, or 10.0%, of our consolidated revenue for the year ended December 31, 2011, and approximately $1.1 billion, or 11.2%, of our total assets and approximately $520 million, or 8.8%, of our total liabilities, including long-term payables to affiliates, in each case as of December 31, 2011. Additionally, our non-guarantor subsidiaries, including TLLP and TPSA, accounted for approximately $1.2 billion, or 7.8%, of our consolidated revenue for the six months ended June 30, 2012, and approximately $1.1 billion, or 10.4%, of our total assets and approximately $443 million, or 7.4%, of our total liabilities, including long-term payables to affiliates, in each case as of June 30, 2012.

As of June 30, 2012, TPSA had $50 million of borrowings outstanding and $450 million of additional available borrowing capacity under its revolving credit facility and no outstanding letters of credit. In August 2012, we repaid all outstanding borrowings under TPSA’s revolving credit facility and terminated the facility, and TPSA became a guarantor and a borrower under our revolving credit facility. TPSA is a foreign subsidiary and is not a guarantor of notes. Additionally, as of June 30, 2012, TLLP had $118 million of borrowings outstanding, $0.3 million of outstanding letters of credit and $182 million of additional available borrowing capacity under its revolving credit facility. TLLP intends to repay all of its outstanding indebtedness under its revolving credit facility in connection with the TLLP Notes Offering. See “Summary—Recent developments”. TLLP is not a guarantor of the notes. For more information, see “Description of other indebtedness—Credit Facilities”.

Covenants

We will issue the notes under an indenture among us, our guarantor subsidiaries and U.S. Bank National Association, as trustee. The indenture will, among other things, restrict our ability and the ability of our restricted subsidiaries to:

•

make investments;

•

incur additional indebtedness and issue disqualified stock;

•

pay dividends or make distributions on capital stock or redeem or repurchase capital stock;

•

create liens;

•

incur dividend or other payment restrictions affecting subsidiaries;

•

sell assets;

•

merge or consolidate with other entities; and

•

enter into transactions with affiliates.

These covenants are subject to important exceptions and qualifications. During any period in which the notes have an investment grade rating from a rating agency and no default has occurred and is continuing under the indenture governing the notes, we will not be subject to certain of these covenants. See “Description of the notes—Certain covenants.”

Original issue discount

If the stated principal amount of the notes of either series exceeds their issue price by more than a de minimis amount, the notes of such series will be issued with original issue discount (“OID”) for United States federal income tax purposes. In such event, a holder of notes of such series subject to United States federal income taxation will be required to include the OID in gross income (as ordinary income) as it accrues (on a constant yield to maturity basis), in advance of the receipt of the corresponding cash payments, regardless of such holder’s regular method of accounting for United States federal income tax purposes. See “Material United States federal income tax consequences.”

Mandatory offer to repurchase

If a change of control triggering event occurs, we must offer to repurchase the notes at a redemption price equal to 101% of the principal amount thereof plus any accrued and unpaid interest. See “Description of the notes—Change of control triggering event.”

No public market

Each series of notes is a series of securities for which there is currently no established trading market. Certain of the underwriters have advised us that they presently intend to make a market in the notes. However, you should be aware that they are not obligated to make a market and may discontinue their market-making activities at any time without notice. As a result, a liquid market for the notes may not be available if you try to sell your notes. We do not intend to apply for a listing of the notes on any securities exchange or any automated dealer quotation system.

Use of proceeds

We intend to use the proceeds from this offering and cash on hand to fund our repurchase of the Cash Tender Notes pursuant to the Cash Tender Offers, pay fees and expenses related to the Cash Tender Offers and pay fees and expenses related to this offering of notes. In the event that there are remaining proceeds from this offering, we intend to use any such remaining proceeds for general corporate purposes. See “Use of proceeds” and “Summary—Related transactions.”

Form

The notes will be represented by registered global securities registered in the name of Cede & Co., the nominee of the depositary, The Depository Trust Company, or DTC. Beneficial interests in the notes will be shown on, and transfers will be effected through, records maintained by DTC and its participants.

Risk factors

See “Risk factors” for important information regarding us and an investment in the notes.

Summary historical financial data

The following tables set forth certain of our condensed consolidated financial data. The summary financial information presented below as of December 31, 2010 and 2011 and for each of the years ended December 31, 2009, 2010 and 2011, has been derived from the audited financial statements incorporated by reference in this prospectus. The summary financial information as of December 31, 2009 has been derived from our audited financial statements not included or incorporated by reference in this prospectus. The summary financial information as of and for the six months ended June 30, 2011 and 2012 has been derived from our unaudited condensed consolidated financial statements incorporated by reference in this prospectus. In the opinion of our management, all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the unaudited financial data as of and for the six months ended June 30, 2011 and 2012 have been reflected therein. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the full year. You should read the information in conjunction with the “Risk factors” section contained elsewhere in this prospectus and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included in the filings incorporated by reference in this prospectus.


	Year ended December 31,									Six months ended June 30,
										(Unaudited)
(Dollar amounts in millions)	2009			2010			2011			2011			2012

Statement of Operations Data:
Revenues
Refining	$	16,365		$	20,077		$	29,805		$	14,246		$	15,633
Retail		3,235			3,810			5,319			2,578			2,931
Intersegment sales from refining to retail		(2,728	)		(3,304	)		(4,821	)		(2,335	)		(2,639	)

Total revenues		16,872			20,583			30,303			14,489			15,925

Cost of sales and expenses		16,429			19,967			28,739			13,585			14,886
Depreciation and amortization expense		426			422			417			209			212
Loss on asset disposals and impairments(1)		74			54			67			57			12

Total costs of sales and expenses		16,929			20,443			29,223			13,851			15,110

Operating income (loss)(2)		(57	)		140			1,080			638			815
Interest and financing costs		(130	)		(157	)		(177	)		(103	)		(70	)
Interest income and other		4			3			2			—			1
Foreign exchange gain (loss)		(5	)		2			(2	)		(1	)		(1	)
Other income (expense)(3)		—			(13	)		2			—			(18	)

Earnings (loss) before income taxes		(188	)		(25	)		905			534			727
Income tax expense (benefit)		(48	)		4			342			205			272

Net earnings (loss)		(140	)		(29	)		563			329			455
Less net income attributable to noncontrolling interest		—			—			17			4			12

Net earnings (loss) attributable to Tesoro Corporation	$	(140	)	$	(29	)	$	546		$	325		$	443


Total comprehensive income (loss)(4)	$	(120	)	$	92		$	538		$	329		$	455
Less noncontrolling interest in comprehensive income		—			—			17			4			12

Comprehensive income (loss) attributable to Tesoro Corporation	$	(120	)	$	92		$	521		$	325		$	443


Other Data:
Net cash from operating activities	$	663		$	385		$	689		$	89		$	724
Net cash used in investing activities		(436	)		(295	)		(291	)		(111	)		(278	)
Net cash from (used in) financing activities		166			145			(146	)		(19	)		(24	)

Increase (decrease) in cash and cash equivalents	$	393		$	235		$	252		$	(41	)	$	422

Ratio of earnings to fixed charges(5)		*			*			4.7x			5.2x			8.6x

Capital expenditures
Refining	$	356		$	263		$	262		$	93		$	212
Retail		14			22			41			7			32
Corporate		31			2			17			5			6

Total capital expenditures	$	401		$	287		$	320		$	105		$	250


	Year ended December 31,						Six months ended June 30,
							(Unaudited)
(Dollar amounts in millions)	2009		2010		2011		2011		2012

Balance Sheet Data (end of period):
Cash and cash equivalents	$	413	$	648	$	900	$	607	$	1,322
Working capital(6)		334		432		902		1,152		1,293
Net Property, plant and equipment		5,190		5,170		5,148		5,075		5,288
Total Assets		8,070		8,732		9,892		9,738		10,408
Debt(7)		1,841		1,995		1,701		1,723		1,702
Total Tesoro Corporation Stockholders’ Equity(8)		3,087		3,215		3,668		3,554		4,112
Noncontrolling Interest		—		—		310		292		311
Total Equity		3,087		3,215		3,978		3,846		4,423
Total Liabilities and Equity	$	8,070	$	8,732	$	9,892	$	9,738	$	10,408

(1)

Includes impairment charges related to the change in scope of a capital project at our Wilmington refinery of $48 million for the six months ended June 30, 2011 and year ended December 31, 2011.

(2)

Includes $37 million in business interruption and property damage recoveries for the six months ended June 30, 2011 and year ended December 31, 2011.

(3)

Includes accruals related to certain legal matters partially offset by receipts associated with the settlement of a pipeline rate proceeding for the six months ended June 30, 2012, and claims awarded to Chevron in relation to the net refunds we received in 2008 from the owners of the Trans Alaska Pipeline System for the year ended December 31, 2010.

(4)

As of December 31, 2011, we adopted a new accounting standard which requires companies to report comprehensive income in either a single continuous statement of comprehensive income, or in two separate but consecutive statements. The guidance under the new standard also applies to the separate condensed consolidating financial information of Tesoro Corporation, subsidiary guarantors and non-subsidiary guarantors. The condensed consolidating financial information included in our Annual Report on Form 10-K for the year ended December 31, 2011 does not include this information. In 2009, 2010 and 2011, the only components of other comprehensive income related to our pension and other postretirement benefits which relate 100% to Tesoro Corporation (Parent). The condensed consolidating financial information included in our Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2012 does include this information. For the six months ended June 30, 2011 and 2012 there are no other comprehensive income items.

(5)

For purposes of computing the ratio of earnings to fixed charges, “earnings” consist of pretax income from operations plus fixed charges (excluding capitalized interest). “Fixed charges” represent interest incurred (whether expensed or capitalized), amortization of debt expense and that portion of rental expense on operating leases deemed to be the equivalent of interest. The ratio of earnings to fixed charges for fiscal years 2007 and 2008 are 5.9x and 3.0x, respectively. For the years ended December 31, 2009 and 2010, fixed charges exceeded total earnings by $213 million and $44 million, respectively.

(6)

Working capital means current assets minus current liabilities.

(7)

During 2011, we borrowed $50 million under TLLP’s revolving credit facility, repurchased approximately $178 million of our senior notes and redeemed our $150 million Junior Subordinated Notes due 2012. During 2009, we issued $300 million in senior notes for general corporate purposes. Total debt includes capital lease obligations. For more information, see “Description of other indebtedness.”

(8)

Total Tesoro Corporation Stockholders’ Equity excludes $310 million of equity related to noncontrolling interest for the year ended December 31, 2011 and $311 million and $292 million for the six months ended June 30, 2012 and 2011, respectively. There was no equity related to noncontrolling interest for the years ended December 31, 2009 through 2010.

Summary refining and marketing operating data


	Fiscal years						Six months ended
	2009		2010		2011		June 30, 2011		June 30, 2012

Refinery Throughput (Mbpd)
California
Martinez		141		124		140		136		119
Wilmington		100		99		101		102		110
Pacific Northwest
Washington(1)		84		39		98		97		107
Alaska		51		54		55		55		42
Mid-Pacific
Hawaii		68		64		71		68		61
Mid-Continent
North Dakota		54		50		59		57		58
Utah		51		50		55		55		57

Total refining throughput		549		480		579		570		554


Yield (Mbpd)
California (Martinez and Wilmington)
Gasoline and gasoline blendstocks		130		124		134		134		125
Jet fuel		18		19		20		21		23
Diesel fuel		52		54		63		57		49
Heavy fuel oils, residual products, internally produced fuel and other		63		47		45		47		51

Total		263		244		262		259		248

Pacific Northwest (Washington and Alaska)
Gasoline and gasoline blendstocks		60		34		66		66		67
Jet fuel		26		24		30		30		29
Diesel fuel		23		11		27		27		23
Heavy fuel oils, residual products, internally produced fuel and other		30		27		35		34		35

Total		139		96		158		157		154

Mid-Pacific (Hawaii)
Gasoline and gasoline blendstocks		16		15		19		18		17
Jet fuel		17		15		18		17		16
Diesel fuel		12		12		13		13		12
Heavy fuel oils, residual products, internally produced fuel and other		24		23		22		22		18

Total		69		65		72		70		63

Mid-Continent (North Dakota and Utah)
Gasoline and gasoline blendstocks		62		59		66		65		66
Jet fuel		9		10		11		10		10
Diesel fuel		27		26		32		31		33
Heavy fuel oils, residual products, internally produced fuel and other		10		9		10		9		10

Total		108		104		119		115		119

Total Yield
Gasoline and gasoline blendstocks		268		232		285		283		275
Jet fuel		70		68		79		78		78
Diesel fuel		114		103		135		128		117
Heavy fuel oils, residual products, internally produced fuel and other		127		106		112		112		114

Total Yield		579		509		611		601		584


	Fiscal years						Six months ended
	2009		2010		2011		June 30, 2011		June 30, 2012

Refining margin ($/throughput barrel)(2)
California (Martinez and Wilmington)
Gross refining margin	$	10.18	$	12.03	$	12.19	$	15.98	$	11.04
Manufacturing cost before depreciation and amortization	$	6.86	$	7.54	$	6.90	$	7.18	$	6.38
Pacific Northwest (Washington and Alaska)
Gross refining margin	$	7.65	$	10.84	$	12.40	$	13.95	$	17.12
Manufacturing cost before depreciation and amortization	$	3.81	$	5.88	$	3.64	$	3.50	$	3.92
Mid-Pacific (Hawaii)
Gross refining margin	$	3.62	$	3.77	$	4.08	$	3.33	$	7.70
Manufacturing cost before depreciation and amortization	$	3.18	$	3.18	$	3.65	$	4.33	$	3.94
Mid-Continent (North Dakota and Utah)
Gross refining margin	$	10.95	$	14.62	$	25.59	$	23.51	$	30.83
Manufacturing cost before depreciation and amortization	$	3.49	$	3.68	$	3.55	$	3.69	$	3.71
Total
Gross refining margin	$	8.90	$	11.26	$	13.94	$	15.49	$	16.42
Manufacturing cost before depreciation and amortization	$	5.01	$	5.83	$	4.98	$	5.17	$	4.89

Average Number of Branded Retail Stations (during the period)
Company-operated		388		383		377		378		453
Branded jobber/dealer		487		499		780		757		793

Total average retail stations		875		882		1,157		1,135		1,246

(1)

Our Washington refinery was temporarily shut down from April 2010 to November 2010.

(2)

Management uses gross refining margin per barrel to evaluate performance and compare profitability to other companies in the industry. There are a variety of ways to calculate gross refining margin per barrel; different companies may calculate it in different ways. We calculate gross refining margin per barrel by dividing gross refining margin (revenue less costs of feedstocks, purchased refined products, transportation and distribution) by total refining throughput. Management uses manufacturing costs per barrel to evaluate the efficiency of refinery operations. There are a variety of ways to calculate manufacturing cost per barrel; different companies may calculate it in different ways. We calculate manufacturing costs per barrel by dividing manufacturing costs by total refining throughput. Investors and analysts use these financial measures to help analyze and compare companies in the industry on the basis of operating performance. These financial measures should not be considered alternatives to segment operating income, revenues, cost of sales, operating expenses or any other measure of financial performance presented in accordance with U.S. GAAP.

Risk factors

You should carefully consider the risks described below before making an investment decision. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. If any of the following risks actually occurs, our business, financial condition or results of operations could be materially adversely affected.

Risks relating to the notes

Our level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the notes.

After giving effect to the Transactions, as of June 30, 2012, we would have had approximately $1.6 billion of total indebtedness. Our indebtedness could have important consequences to you, including the following:

•

it may be more difficult for us to satisfy our obligations, including debt service requirements under our outstanding debt, including the notes;

•

our ability to obtain additional financing for working capital, capital expenditures, debt service requirements or other general corporate purposes may be impaired;

•

we must use a substantial portion of our cash flow to pay principal, premium, if any, and interest on the notes and other indebtedness which will reduce the funds available to us for other purposes;

•

we are more vulnerable to economic downturns and adverse industry conditions; and

•

our ability to capitalize on business opportunities and to react to competitive pressures as compared to our competitors may be compromised due to our substantial level of indebtedness.

Despite our current or future indebtedness level, we may still be able to incur substantially more debt.

We may be able to incur substantial indebtedness in the future. The terms of the indenture governing the notes will not fully prohibit us from doing so. If we incur any additional indebtedness that ranks equally with the notes, the holders of that debt will be entitled to share ratably with the holders of the notes in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding up of Tesoro. If new debt is added to our current debt levels, the related risks we face will increase.

We are a holding company, and we are dependent on the ability of our subsidiaries to distribute funds to us.

Tesoro Corporation is a holding company and conducts substantially all of its operations through subsidiaries. Our only significant assets are the capital stock of our subsidiaries. As a holding company, we are dependent on distributions of funds from our subsidiaries to meet our debt service and other obligations, including the payment of principal and interest on the notes. Our subsidiaries may not generate sufficient cash from operations to enable us to make payments on our indebtedness, including the notes. The ability of our subsidiaries to make distributions to us

may be restricted by, among other things, applicable state corporate laws, other laws and regulations and contractual restrictions. Furthermore, claims of creditors of our existing and future subsidiaries that are not guarantors, including trade creditors of, and banks and other lenders to, those subsidiaries, generally will have priority with respect to the assets and earnings of those subsidiaries over the claims of our creditors, including the holders of the notes. If we are unable to obtain funds from our subsidiaries as a result of restrictions under our other debt instruments, state law or otherwise, we may not be able to pay interest or principal on the notes when due, or to redeem the notes upon a change of control triggering event, and we cannot assure you that we will be able to obtain the necessary funds from other sources.

The notes will be effectively subordinated to our and our subsidiary guarantors’ indebtedness under our revolving credit facility and reimbursement obligations under our letter of credit facilities to the extent of the value of the property securing such indebtedness.

The notes and the guarantees will be effectively subordinated to our and our subsidiary guarantors’ indebtedness under our revolving credit facility, as amended, and any reimbursement obligations under our letter of credit facilities, to the extent of the collateral securing such indebtedness. As of June 30, 2012, we had no borrowings and $904 million in letters of credit outstanding under our revolving credit facility, resulting in total unused credit availability of approximately $946 million, or 51% of the eligible borrowing base. As of June 30, 2012, we also had $541 million in letters of credit outstanding under our separate letter of credit facilities, resulting in total unused credit availability of $355 million, or 40% of total capacity, under these credit facilities. In addition, we may incur additional secured debt in the future.

The effect of this is that upon a default in payment on, or the acceleration of, any of our secured indebtedness, or in the event of our, or our subsidiary guarantors’, bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding, the proceeds from the sale of the collateral that secures our secured indebtedness will be available to pay obligations on the notes offered hereby only after all indebtedness under our revolving credit facility and our letter of credit facilities, as applicable, has been paid in full. As a result, the holders of the notes may receive less, ratably, than the holders of secured debt in the event of our, or our subsidiary guarantors’, bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding.

Not all of our subsidiaries will guarantee the notes and, under certain circumstances, the subsidiary guarantees will be released.

Certain of our subsidiaries will not guarantee the notes. Additionally, under the terms of the indenture governing the notes, under certain circumstances, some or all of the guarantors may cease to guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor subsidiaries, holders of their indebtedness and their trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us. As a result, the notes will be structurally subordinated to the debt and other liabilities of our non-guarantor subsidiaries. As of June 30, 2012, our non-guarantor subsidiaries, including TLLP and TPSA, held approximately $1.1 billion of our consolidated assets, or 10.4%, and had $443 million of our total liabilities, or 7.4%, including long-term payables to affiliates.

If a subsidiary does not have outstanding indebtedness or guarantee specified indebtedness at any time, the note guarantee of such subsidiary will be released. If all of the subsidiary

guarantors are released from their guarantees of these notes, our subsidiaries will have no obligation to pay any amounts due on the notes. In the event of the release of any subsidiary guarantor’s guarantee, Tesoro’s right, as an equity holder of such subsidiary, to receive any assets of such subsidiary upon its liquidation or reorganization, and therefore the right of the holders of the notes to participate in those assets, will be effectively subordinated to the claims of that subsidiary’s creditors, including trade creditors.

The indenture governing the notes allows us to make substantial repurchases of common stock from our stockholders and permits us to distribute capital stock of our subsidiaries to the holders of our common stock.

Under the terms of the indenture governing the notes, we may be able to make substantial repurchases of common stock from our stockholders. The indenture will not restrict us from repurchasing our common stock so long as the notes are rated Ba2 or better by Moody’s and BB or better by Standard & Poor’s and our leverage ratio is equal to or less than 2.0 to 1.0. It is possible that if we do make substantial repurchases of common stock from our stockholders, we will not have sufficient funds to meet our payment obligations on our debt, including the notes. In addition to stock repurchases, under the terms of the indenture, we may distribute shares of our subsidiaries to our stockholders under certain circumstances, including compliance with certain coverage ratios under the indenture.

Our debt instruments impose restrictions on us that may adversely affect our ability to operate our business.

Our ability to comply with the financial covenants under our revolving credit facility as they currently exist or as they may be amended, may be affected by many events beyond our control and our future operating results may not allow us to comply with the covenants, or in the event of a default, to remedy that default. Our failure to comply with these financial covenants or to comply with the other restrictions contained in our revolving credit facility could result in a default, which could cause that indebtedness (and by reason of cross-default provisions, indebtedness under the indentures governing the notes and our Existing Senior Notes and other indebtedness) to become immediately due and payable. If we are unable to repay those amounts, the lenders under our revolving credit facility could proceed against the collateral granted to them to secure that indebtedness. If those lenders accelerate the payment of the revolving credit facility, we may not be able to pay that indebtedness immediately and continue to operate our business.

The indenture relating to the notes, the indentures relating to our Existing Senior Notes and our revolving credit facility contain covenants that restrict, among other things, our ability to:

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pay dividends and other distributions with respect to our capital stock and purchase, redeem or retire our capital stock;

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make certain investments;

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incur additional indebtedness and issue disqualified stock;

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sell assets;

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incur liens on our assets;

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engage in certain mergers or consolidations and transfers of assets; and

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enter into transactions with affiliates.

Our failure to comply with these covenants or to comply with the other restrictions contained in our revolving credit facility or the indentures relating to the notes or the Existing Senior Notes could result in a default, which could cause that indebtedness (and by reason of cross-default provisions, indebtedness under our revolving credit facility, or indebtedness under the indentures governing the notes, our Existing Senior Notes and other indebtedness) to become immediately due and payable.

We may be unable to generate the cash flow to service our debt obligations, including the notes.

We cannot assure you that our business will generate sufficient cash flow, or that we will be able to borrow funds under our revolving credit facility, in an amount sufficient to enable us to service our indebtedness, including the notes, or to make anticipated capital expenditures. Our ability to pay our expenses and satisfy our debt obligations, to refinance our debt obligations and to fund planned capital expenditures will depend on our future performance, which will be affected by general economic, financial, competitive, legislative, regulatory and other factors beyond our control. Based upon current levels of operations, we believe cash flow from operations, amounts available under our revolving credit facility and available cash will be adequate for the foreseeable future to meet our anticipated requirements for working capital, capital expenditures and scheduled payments of principal and interest on our indebtedness, including the notes. However, if we are unable to generate sufficient cash flow from operations or to borrow sufficient funds in the future to service our debt, we may be required to sell assets, reduce capital expenditures, refinance all or a portion of our existing debt (including the notes) or obtain additional financing. We cannot assure you that we will be able to refinance our debt, sell assets or borrow more money on terms acceptable to us, if at all. Additionally, the covenants contained in our revolving credit facility and our indentures will restrict our ability to incur additional debt.

The subsidiary guarantees could be deemed fraudulent conveyances under certain circumstances, and a court may try to subordinate or avoid the subsidiary guarantees.

Our obligations under the notes initially will be guaranteed on a general unsecured senior basis by the subsidiary guarantors. Various preference or fraudulent conveyance laws have been enacted for the protection of creditors and may be used by a court to subordinate or avoid any subsidiary guarantee issued by a guarantor. It also is possible that under certain circumstances a court could hold that the direct obligations of a guarantor could be superior to the obligations under its subsidiary guarantee.

To the extent that a court finds that at the time a guarantor entered into a subsidiary guarantee either (1) the subsidiary guarantee was incurred by a guarantor with the intent to hinder, delay or defraud any present or future creditor or that a guarantor contemplated insolvency with a design to favor one or more creditors to the exclusion in whole or in part of others, or (2) the guarantor did not receive fair consideration or reasonably equivalent value for issuing the subsidiary guarantee and, at the time it issued the subsidiary guarantee, the guarantor (a) was insolvent or rendered insolvent by reason of the issuance of the subsidiary guarantee, (b) was engaged or about to engage in a business or transaction for which the remaining assets of the guarantor constituted unreasonably small capital or (c) intended to incur, or believed that it would incur, debts beyond its ability to pay debts as they matured, the court could avoid or

subordinate the subsidiary guarantee in favor of the guarantor’s other creditors. Among other things, a legal challenge of a subsidiary guarantee issued by a guarantor on fraudulent conveyance grounds may focus on the benefits, if any, realized by the guarantor as a result of our issuance of the notes. To the extent a subsidiary guarantee is voided as a fraudulent conveyance or held unenforceable for any other reason, the holders of the notes would cease to have any claim as a creditor in respect of that subsidiary guarantor.

We cannot assure you that a court would conclude that the notes and the subsidiary guarantees issued concurrently with the issuance of these notes were incurred for proper purposes and in good faith. We also cannot assure you that a court would conclude that, after giving effect to the Transactions, Tesoro and the subsidiary guarantors are solvent and will continue to be solvent, will have sufficient capital for carrying on their respective businesses and will be able to pay their debts as they become absolute and mature.

Each subsidiary guarantee will contain a provision intended to limit the guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer. This provision may not be effective to protect the guarantees from being voided under applicable fraudulent transfer laws or may reduce the guarantor’s obligation to an amount that makes the guarantee effectively worthless. Although subsequently overturned on other grounds, a recent Florida bankruptcy court found this kind of provision insufficient to protect such guarantees.

We may not be able to finance a change of control offer as required by the indenture.

Under the indenture, upon the occurrence of a change of control triggering event, we will be required to offer to repurchase all of the notes then outstanding at 101% of the principal amount, plus accrued and unpaid interest, to the repurchase date. If a change of control triggering event were to occur today, we would not have the financial resources available to repay all of our debt that would become payable upon such change of control triggering event and to repurchase all of the notes. In addition, if we only were required to repay all of the notes if a change of control triggering event were to occur today, we would not have the financial resources to repurchase all of those notes. We cannot assure you that we will have the financial resources available or that we will be permitted by our debt instruments to fulfill these obligations upon the occurrence of a change of control triggering event in the future. See “Description of other indebtedness” and “Description of the notes—Repurchase at the option of holders—Change of control triggering event.”

Either series or both series of notes may be issued with OID for United States federal income tax purposes.

If the stated principal amount of the notes of either series exceeds their issue price by more than a de minimis amount, the notes of such series will be issued with OID for United States federal income tax purposes. In such event, a holder of such notes subject to United States federal income taxation will be required to include the OID in gross income (as ordinary income) as it accrues (on a constant yield to maturity basis), in advance of the receipt of the corresponding cash payments, regardless of such holder’s regular method of accounting for United States federal income tax purposes. See “Material United States federal income tax consequences.”

If a series of notes is issued with OID and a bankruptcy petition were filed by or against us, holders of notes of such series may receive a lesser amount for their claim than they would have been entitled to receive under the indenture governing the notes.

If a series of notes is issued with OID and a bankruptcy petition were filed by or against us under the U.S. Bankruptcy Code after the issuance of the notes of such series, the claim by any holder of such notes for the principal amount of such notes may be limited to an amount equal to the sum of:

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the original issue price for such notes; and

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that portion of the OID that does not constitute “unmatured interest” for purposes of the U.S. Bankruptcy Code.

Any OID that was not amortized as of the date of the bankruptcy filing would constitute unmatured interest. Accordingly, holders of such notes under these circumstances may receive a lesser amount than they would be entitled to under the terms of the indenture governing the notes, even if sufficient funds are available.

An active trading market may not develop for the notes, which could make it more difficult for you to sell your notes or result in a lower price at which you would be able to sell your notes.

There is currently no established trading market for the notes, and there can be no assurance as to the liquidity of any markets that may develop for the notes, the ability of the holders of the notes to sell their notes or the price at which such holders would be able to sell their notes. If such a market were to exist, the notes could trade at prices that may be lower than the initial market values of the notes depending on many factors, including prevailing interest rates and our business performance. In addition, we do not intend to list the notes on any securities exchange or any automated quotation system. Certain of the underwriters have advised us that they currently intend to make a market in the notes after the consummation of this offering, as permitted by applicable laws and regulations. However, none of the underwriters are obligated to do so, and any market making with respect to the notes may be discontinued at any time without notice. See “Underwriting.”

Risks relating to our business

The volatility of crude oil prices, refined product prices and natural gas and electrical power prices may have a material adverse effect on our cash flow and results of operations.

Earnings and cash flows from our refining and wholesale marketing operations depend on a number of factors, including to a large extent the cost of crude oil and other refinery feedstocks which has fluctuated significantly in recent years. While prices for refined products are influenced by the price of crude oil, the constantly changing margin between the price we pay for crude oil and other refinery feedstocks, and the prices at which we are able to sell refined products, also fluctuates significantly from time to time. These prices depend on numerous factors beyond our control, including the global supply and demand for crude oil, gasoline and other refined products, which are subject to, among other things:

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changes in the global economy and the level of foreign and domestic production of crude oil and refined products;

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availability of crude oil and refined products and the infrastructure to transport crude oil and refined products;

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local factors, including market conditions, the level of operations of other refineries in our markets, and the volume of refined products imported;

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threatened or actual terrorist incidents, acts of war, and other global political conditions;

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government regulations; and

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weather conditions, hurricanes or other natural disasters.

In addition, we purchase our refinery feedstocks weeks before manufacturing and selling the refined products. Price level changes during the period between purchasing feedstocks and selling the manufactured refined products from these feedstocks could have a significant impact on our financial results. We also purchase refined products manufactured by others for sale to our customers. Price level changes during the periods between purchasing and selling these refined products also could have a material adverse effect on our business, financial condition and results of operations.

Volatile prices for natural gas and electrical power used by our refineries and other operations affect manufacturing and operating costs. Natural gas and electricity prices have been, and will continue to be, affected by supply and demand for fuel and utility services in both local and regional markets.

Adverse changes in global economic conditions and the demand for transportation fuels may impact our business and financial condition in ways that we currently cannot predict.

The U.S. economic recovery from the recent recession continues to be tenuous, and the risk of further significant global economic downturn continues. Further prolonged downturns or failure to recover could result in declines in consumer and business confidence and spending as well as increased unemployment and reduced demand for transportation fuels. This continues to adversely affect the business and economic environment in which we operate, especially on the U.S. West Coast. These conditions increase the risks associated with the creditworthiness of our suppliers, customers and business partners. The consequences of such adverse effects could include interruptions or delays in our suppliers’ performance of our contracts, reductions and delays in customer purchases, delays in or the inability of customers to obtain financing to purchase our products, and bankruptcy of customers. Any of these events may adversely affect our cash flow, profitability and financial condition.

Our proposed BP Acquisition involves risks, including risks that we may not be able to complete the acquisition or successfully integrate the assets we acquire.

We entered into a purchase agreement in connection with the BP Acquisition on August 8, 2012 and we expect the acquisition to close before mid-2013. The BP Acquisition involves risks associated with acquisitions and integration of acquired assets, including the following:

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the possibility that the Federal Trade Commission or the California Attorney General may not approve the acquisition (thereby preventing us from consummating the acquisition), may require that we divest certain assets in order to proceed with the acquisition, or may cause the consummation of the acquisition to occur much later than anticipated;

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the possibility that we may have to pay a breakage fee of up to $140 million in the event that we terminate the agreement (except for termination for specified reasons) prior to the closing of the transaction;

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our inability to secure sufficient financing on terms acceptable to us for the BP Acquisition or the expansion of operations associated with the BP Assets, and the risk that any such financing, even if obtained on acceptable terms, could reduce our creditworthiness and increase our financing costs;

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the potential for unexpected costs, delays and challenges that may arise in integrating the BP Assets into our existing business;

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challenges related to integrating significant operations that have a company culture that differs from our own;

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environmental remediation obligations to be assumed by Tesoro costing significantly more than anticipated; and

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discovery of previously unknown liabilities associated with the BP Assets for which we cannot receive reimbursement under applicable indemnification provisions.

Even if we successfully integrate BP’s operations, it may not be possible to realize the full benefits we may expect from operating synergies or other benefits anticipated or realize these benefits within the expected timeframe. Anticipated synergies and benefits may be offset by operating losses relating to changes in commodity prices, industry conditions, failure to retain key personnel, an increase in operating or other costs or other difficulties. If we fail to realize the synergies and benefits we anticipate from the BP Acquisition, our business, results of operations and financial condition may be adversely affected.

Competition from integrated oil companies that produce their own supply of feedstocks and from high volume retailers and large convenience store retailing operators who may have greater financial resources, could materially affect our business, financial condition and results of operations.

We compete on a global basis with a number of integrated and nationally owned oil companies who produce crude oil, some of which is used in their refining operations. Unlike these oil companies, we must purchase all of our crude oil from unaffiliated sources. Because these oil companies benefit from increased commodity prices, have greater access to capital and have stronger capital structures, they are able to better withstand poor and volatile market conditions, such as a lower refining margin environment, shortages of crude oil and other feedstocks or extreme price fluctuations. In addition, we compete with producers and marketers in other industries that supply alternative forms of energy and fuels to satisfy the requirements of our industrial, commercial and individual customers.

We also face strong competition in the fuel and convenience store retailing market for the sale of retail gasoline and convenience store merchandise. Our competitors include service stations operated by integrated major oil companies and well-recognized national high volume retailers or regional large chain convenience store operators, often selling gasoline or merchandise at aggressively competitive prices.

Some of these competitors may have access to greater financial resources, which may provide them with a better ability to bear the economic risks inherent in all phases of our industry. Fundamental changes in the supply dynamics of foreign product imports could lead to reduced margins for the refined products we market, which could have an adverse effect on the profitability of our fuel retailing business.

Meeting the requirements of evolving environmental, health and safety laws and regulations including those related to climate change could adversely affect our performance.

Consistent with the experience of other U.S. refiners, environmental laws and regulations have raised operating costs and require significant capital investments at our refineries. We believe that existing physical facilities at our refineries are substantially adequate to maintain compliance with existing applicable laws and regulatory requirements. However, we may be required to address conditions that may be discovered in the future and require a response. Also, potentially material expenditures could be required in the future as a result of evolving environmental, health and safety, and energy laws, regulations or requirements that may be adopted or imposed in the future. Future developments in federal and state laws and regulations governing environmental, health and safety and energy matters are especially difficult to predict.

Currently, multiple legislative and regulatory measures to address greenhouse gas emissions (including carbon dioxide, methane and nitrous oxides) are in various phases of consideration, promulgation or implementation. These include requirements effective in January 2010 to report emissions of greenhouse gases to the U.S. Environmental Protection Agency, or the EPA, and proposed federal legislation and regulation as well as state actions to develop statewide or regional programs, each of which require or could require reductions in our greenhouse gas emissions. Requiring reductions in our greenhouse gas emissions could result in increased costs to (i) operate and maintain our facilities, (ii) install new emission controls at our facilities and (iii) administer and manage any greenhouse gas emissions programs, including acquiring emission credits or allotments.

Requiring reductions in our greenhouse gas emissions and increased use of renewable fuels could also decrease the demand for our refined products, and could have a material adverse effect on our business, financial condition and results of operations. For example:

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In California, Assembly Bill 32, or AB 32, created a statewide cap on greenhouse gas emissions and requires that the state return to 1990 emission levels by 2020. AB 32 also created a low carbon fuel standard which would require a 10% reduction in the carbon intensity of fuels by 2020. Although a California court determined that this standard is unconstitutional in January 2012, the California Air Resources Board, or CARB, has appealed the decision. On April 23, 2012 the U.S. 9 ^th Circuit Court of Appeals stayed the lower court’s preliminary injunction of CARB’s enforcement of the standard pending the appeal, and we cannot predict the outcome of the pending appeal.

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In December 2007, the Energy Independence and Security Act was enacted into federal law, which created a second renewable fuels standard. This standard requires the total volume of renewable transportation fuels (including ethanol and advanced biofuels) sold or introduced in the U.S. to reach 15.2 billion gallons in 2012 and rise to 36 billion gallons by 2022.

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The EPA proposed regulations in 2009, that would require the reduction of emissions of greenhouse gases from light trucks and cars, and would establish permitting thresholds for stationary sources that emit greenhouse gases and require emissions controls for those sources. Promulgation of the final rule on April 1, 2010, has resulted in a cascade of related rulemakings by the EPA pursuant to the Clean Air Act relative to controlling greenhouse gas emissions.

Our operations are subject to operational hazards that could expose us to potentially significant losses.

Our operations are subject to potential operational hazards and risks inherent in refining operations and in transporting and storing crude oil and refined products. Any of these risks, such as fires, explosions, maritime disasters, security breaches, pipeline ruptures and spills, mechanical failure of equipment, and severe weather and natural disasters, at our or third-party facilities, could result in business interruptions or shutdowns and damage to our properties and the properties of others. A serious accident at our facilities could also result in serious injury or death to our employees or contractors and could expose us to significant liability for personal injury claims and reputational risk. Any such event or unplanned shutdown could have a material adverse effect on our business, financial condition and results of operations.

We carry property, casualty and business interruption insurance but we do not maintain insurance coverage against all potential losses. Marine vessel charter agreements do not include indemnity provisions for oil spills so we also carry marine charterer’s liability insurance. We could suffer losses for uninsurable or uninsured risks or in amounts in excess of existing insurance coverage. The occurrence of an event that is not fully covered by insurance or failure by one or more insurers to honor its coverage commitments for an insured event could have a material adverse effect on our business, financial condition and results of operations.

While we do not act as an owner or operator of any marine tankers, we do maintain marine charterer’s liability insurance with a primary coverage of $500 million, subject to a $25,000 deductible, and an additional $500 million in umbrella policies for a total of $1 billion in coverage for liabilities, costs and expenses arising from a discharge of pollutants. In addition, Tesoro maintains $10 million in marine terminal operator’s liability coverage, subject to a $150,000 deductible, and an additional $500 million in umbrella coverage for a total of $510 million in coverage for sudden and accidental pollution events and liability arising from marine terminal operations. We cannot assure you that we will not suffer losses in excess of such coverage.

Our business is impacted by environmental risks inherent in refining operations.

The operation of refineries, pipelines and refined products terminals is inherently subject to the risks of spills, discharges or other inadvertent releases of petroleum or hazardous substances. These events could occur in connection with any of our refineries, pipelines or refined products terminals, or in connection with any facilities which receives our wastes or by-products for treatment or disposal. If any of these events occur, or is found to have previously occurred, we could be liable for costs and penalties associated with their remediation under federal, state and local environmental laws or common law, and could be liable for property damage to third-parties caused by contamination from releases and spills. The penalties and clean-up costs that we may have to pay for releases or the amounts that we may have to pay to third-parties for damages to their property, could be significant and the payment of these amounts could have a material adverse effect on our business, financial condition and results of operations.

We operate in and adjacent to environmentally sensitive coastal waters where tanker, pipeline and refined product transportation and storage operations are closely regulated by federal, state and local agencies and monitored by environmental interest groups. Our California, Mid-Pacific and Pacific Northwest refineries import crude oil and other feedstocks by tanker. Transportation and storage of crude oil and refined products over and adjacent to water involves inherent risk and subjects us to the provisions of the Federal Oil Pollution Act of 1990 and state laws in California, Hawaii, Washington and Alaska. Among other things, these laws require us and the

owners of tankers that we charter to deliver crude oil to our refineries to demonstrate in some situations the capacity to respond to a spill up to one million barrels of oil from a tanker and up to 600,000 barrels of oil from an above ground storage tank adjacent to water (a “worst case discharge”) to the maximum extent possible.

We and the owners of tankers we charter have contracted with various spill response service companies in the areas in which we transport and store crude oil and refined products to meet the requirements of the Federal Oil Pollution Act of 1990 and state and foreign laws. However, there may be accidents involving tankers, pipelines or above ground storage tanks transporting or storing crude oil or refined products, and response services may not respond to a “worst case discharge” in a manner that will adequately contain that discharge, or we may be subject to liability in connection with a discharge. Additionally, we cannot ensure that all resources of a contracted response service company could be available for our or a chartered tanker owner’s use at any given time. There are many factors that could inhibit the availability of these resources, including, but not limited to, weather conditions, governmental regulations or other global events. By requirement of state or federal rulings, these resources could be diverted to respond to other global events.

Our operations are also subject to general environmental risks, expenses and liabilities which could affect our results of operations.

From time to time we have been, and presently are, subject to litigation and investigations with respect to environmental and related matters, including product liability claims related to the oxygenate methyl tertiary butyl ether, or MTBE. We may become involved in further litigation or other proceedings, or we may be held responsible in any existing or future litigation or proceedings, the costs of which could be material.

We operate and have in the past operated retail stations with underground storage tanks in various jurisdictions. Federal and state regulations and legislation govern the storage tanks, and compliance with these requirements can be costly. The operation of underground storage tanks poses certain risks, including leaks. Leaks from underground storage tanks, which may occur at one or more of our retail stations, or which may have occurred at our previously operated retail stations, may impact soil or groundwater and could result in fines or civil liability for us.

From time to time, our cash needs may exceed our internally generated cash flow, and our business could be materially and adversely affected if we are not able to obtain the necessary funds from financing activities.

We have substantial cash needs. Our short-term cash needs are primarily to satisfy working capital requirements, including crude oil purchases, which fluctuate with the pricing and sourcing of crude oil. Our longer-term cash needs also include capital expenditures for infrastructure, environmental and regulatory compliance, maintenance turnarounds at our refineries and upgrade and business strategy projects.

We generally supply our cash needs with cash generated from our operations; however, from time to time, particularly when the price of crude oil increases significantly, our cash requirements may exceed our cash flow. In such instances, we may not have sufficient borrowing capacity, and may not be able to sufficiently increase borrowing capacity under our existing credit facilities to support our short-term and long-term capital requirements. Debt and equity capital markets continue to be volatile, and we may not be able to secure additional financing on terms and at a cost acceptable to us, if at all. If we cannot generate cash flow and funding is not available when needed, or is available only on unfavorable terms, we may not be able to operate

our refineries at the desired capacity, fund our capital requirements, take advantage of business opportunities, respond to competitive pressures or complete our business strategies, which could have a material adverse effect on our business, financial condition and results of operations.

Our inventory risk management activities are designed to manage the risk of volatile prices associated with our physical inventory and may result in substantial derivative gains and losses.

We enter into derivative transactions to manage the risks from changes in the prices of crude oil and refined products. Our inventory risk management activities are designed to manage the risk stemming from the volatile prices associated with our physical inventories and may result in substantial derivatives gains and losses. We hedge price risk on inventories above or below our target levels to minimize the impact these price fluctuations have on our earnings and cash flows. Consequently, our derivatives hedging results may fluctuate significantly from one reporting period to the next depending on commodity price fluctuations and our relative physical inventory positions. Since we only use hedge accounting for certain foreign physical inventories that offset these derivatives transactions, we are not able under U.S. GAAP to mark the physical inventory values to market and, as a result, there is frequently a timing difference between the impact on our cash flow and earnings from the derivative transaction versus the offsetting physical inventory balance. During the years ended December 31, 2011 and 2010, we incurred pre-tax hedging losses of $6 million and $29 million, respectively, which were recorded in the Statements of Consolidated Operations. See “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2011 and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, which are incorporated by reference in this prospectus.

We are subject to interruptions of supply and increased costs as a result of our reliance on third-party transportation of crude oil and refined products.

Our Washington refinery receives all of its Canadian crude oil and delivers a high proportion of its gasoline, diesel fuel and jet fuel through third-party pipelines and the balance through marine vessels. Our Hawaii and Alaska refineries receive most of their crude oil and transport a substantial portion of their refined products through ships and barges. Our Utah refinery receives a significant portion of its crude oil and delivers substantially all of its refined products through third-party pipelines. Our North Dakota refinery delivers substantially all of its refined products through a third-party pipeline system. Our Martinez refinery receives approximately one-third of its crude oil through third-party pipelines and the balance through marine vessels. Substantially all of our Martinez refinery’s production is delivered through third-party pipelines, ships and barges. Our Wilmington refinery receives California crude oils through third-party pipelines and the balance of its crude oil supply through marine vessels. Approximately two-thirds of our Wilmington refinery’s production is delivered through third-party pipelines, terminals, ships and barges. In addition to environmental risks discussed above, we could experience an interruption of supply or an increased cost to deliver refined products to market if the ability of the pipelines or vessels to transport crude oil or refined products is disrupted because of accidents, governmental regulation or third-party action. A prolonged disruption of the ability of a pipeline or vessels to transport crude oil or refined products could have a material adverse effect on our business, financial condition and results of operations.

We rely upon certain critical information systems for the operation of our business, and the failure of any critical information system may result in harm to our business.

We are heavily dependent on our technology infrastructure and maintain and rely upon certain critical information systems for the effective operation of our business. These information

systems include data network and telecommunications, internet access and our websites, and various computer hardware equipment and software applications, including those that are critical to the safe operation of our refineries, pipelines and terminals. These information systems are subject to damage or interruption from a number of potential sources including natural disasters, software viruses or other malware, power failures, cyber-attacks, and other events. To the extent that these information systems are under our control, we have implemented measures such as virus protection software, intrusion detection systems, and emergency recovery processes, to address the outlined risks. However, security measures for information systems cannot be guaranteed to be failsafe. Any compromise of our data security or our inability to use or access these information systems at critical points in time could unfavorably impact the timely and efficient operation of our business and subject us to additional costs and liabilities, which could adversely affect our results of operations. Finally, federal legislation relating to cyber-security threats may be enacted that could impose additional requirements on our operations.

Terrorist attacks and threats or actual war may negatively impact our business.

Our business is affected by global economic conditions and fluctuations in consumer confidence and spending, which can decline as a result of numerous factors outside of our control, such as actual or threatened terrorist attacks and acts of war. Terrorist attacks, as well as events occurring in response to or in connection with them, including future terrorist attacks against U.S. targets, rumors or threats of war, actual conflicts involving the United States or its allies, or military or trade disruptions impacting our suppliers or our customers or energy markets in general, may adversely impact our operations. As a result, there could be delays or losses in the delivery of supplies and raw materials to us, delays in our delivery of refined products, decreased sales of our refined products and extension of time for payment of accounts receivable from our customers. Strategic targets such as energy-related assets (which could include refineries such as ours) may be at greater risk of future terrorist attacks than other targets in the United States. These occurrences could significantly impact energy prices, including prices for our crude oil and refined products, and have a material adverse impact on the margins from our refining and wholesale marketing operations. In addition, significant increases in energy prices could result in government-imposed price controls. Any one of, or a combination of, these occurrences could have a material adverse effect on our business, financial condition and results of operations.

Our operating results are seasonal and generally are lower in the first and fourth quarters of the year.

Generally, demand for gasoline is higher during the spring and summer months than during the winter months in most of our markets due to seasonal changes in highway traffic. As a result, our operating results for the first and fourth quarters are generally lower than for those in the second and third quarters.

Compliance with and changes in tax laws could adversely affect our performance.

We are subject to extensive tax laws and regulations, including federal, state, local and foreign income taxes and transactional taxes such as excise, sales/use, payroll, franchise, and ad valorem taxes. New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted that could result in increased tax expenditures in the future. Many of these tax liabilities are subject to audits by the respective taxing authorities. These audits may result in additional taxes as well as interest and penalties.

Disclosure regarding forward-looking statements

This prospectus (including information incorporated by reference herein) includes and references “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, expectations regarding refining margins, revenues, cash flows, capital expenditures, turnaround expenses, and other financial items. These statements also relate to our business strategy, goals and expectations concerning our market position, future operations, margins and profitability. We have used the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “would” and similar terms and phrases to identify forward-looking statements in this prospectus, which speak only as of the date the statements were made.

Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect.

The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors including, but not limited to:

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the constantly changing margin between the price we pay for crude oil and other refinery feedstocks, and the prices at which we are able to sell refined products;

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the timing and extent of changes in commodity prices and underlying demand for our refined products;

•

changes in the expected timing of the BP Acquisition, or the value of and benefits derived from the assets we intend to acquire in the BP Acquisition;

•

changes in global economic conditions and the effects of the global economic downturn on our business, especially in California, and the business of our suppliers, customers, business partners and credit lenders;

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the availability and costs of crude oil, other refinery feedstocks and refined products;

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changes in fuel and utility costs for our facilities;

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changes in the cost or availability of third-party vessels, pipelines and other means of transporting crude oil feedstocks and refined products;

•

actions of customers and competitors;

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state and federal environmental, economic, health and safety, energy and other policies and regulations, including those related to climate change and any changes therein, and any legal or regulatory investigations, delays or other factors beyond our control;

•

adverse rulings, judgments, or settlements in litigation or other legal or tax matters, including unexpected environmental remediation costs in excess of any reserves;

•

operational hazards inherent in refining operations and in transporting and storing crude oil and refined products;

•

earthquakes or other natural disasters affecting operations;

•

changes in our cash flow from operations;

•

changes in capital requirements or in execution of planned capital projects;

•

changes in our inventory levels and carrying costs;

•

disruptions due to equipment interruption or failure at our facilities or third-party facilities;

•

direct or indirect effects on our business resulting from actual or threatened terrorist incidents or acts of war;

•

weather conditions affecting our operations or the areas in which our refined products are marketed;

•

seasonal variations in demand for refined products;

•

risks related to labor relations and workplace safety; and

•

political developments.

Many of these factors, as well as other factors, are described in greater detail in our filings with the Securities and Exchange Commission, or SEC, and in “Risk factors.” All future written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. The forward-looking statements in this prospectus (including information incorporated by reference) speak only as of the date of this prospectus (or in the case of information incorporated by reference, as of the date of such information). Except as required by law, we undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any forward-looking statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this prospectus.

Use of proceeds

We estimate that we will receive net proceeds from this offering of approximately $909 million, after deducting the underwriters’ discounts and commissions and estimated offering expenses. We intend to use the net proceeds from this offering and cash on hand to fund the Cash Tender Offers for our 2015 Notes and our Existing 2017 Notes, pay fees and expenses related to the Cash Tender Offers and pay fees and expenses related to this offering of notes. In the event that there are remaining proceeds from this offering after funding the Cash Tender Offers, we intend to use any such remaining proceeds for general corporate purposes, which may include, without limitation, financing the retirement of any outstanding Cash Tender Notes not purchased in the Cash Tender Offers through redemption, open market purchases or by other means, and may also include, without limitation, the repayment or the refinancing of other indebtedness, capital expenditures and working capital. The 2015 Notes, of which $450 million aggregate principal amount remains outstanding, bear interest at a rate of 6 ⁵ / ₈ % per annum and mature on November 1, 2015. The Existing 2017 Notes, of which $473 million aggregate principal amount remains outstanding, bear interest at a rate of 6 ¹ / ₂ % per annum and mature on June 1, 2017.

The Cash Tender Offers are not being made pursuant to this prospectus and are being made solely by our Offer to Purchase and Consent Solicitation Statement dated September 13, 2012; however, the closing of each Cash Tender Offer is contingent upon the closing of this offering. This offering is not conditioned upon the completion of the Cash Tender Offers. Pending the application of the proceeds, we expect to invest the proceeds in short-term, investment-grade marketable securities or money market obligations. See “Summary—Related transactions.”

Cash and capitalization

The following table sets forth our cash and cash equivalents and our capitalization as of June 30, 2012. Our cash and capitalization is presented on:

•

an actual basis; and

•

an as adjusted basis after giving effect to the Transactions.

You should read the following information in conjunction with the information contained in “Summary—Related transactions,” and “Description of other indebtedness,” included in this prospectus and our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes in our filings incorporated by reference into this prospectus.


	As of June 30, 2012
(In millions)	Actual		As Adjusted for the Transactions

Cash and cash equivalents	$	1,322	$	1,155

Total Debt:
Tesoro Corporation Revolving Credit Facility(1)	$	—	$	—
TPSA Revolving Credit Facility(2)		50		—
TLLP Revolving Credit Facility(3)		118		—
6 ¹ / ₄ % Senior Notes due 2012(4)		299		—
6 ⁵ / ₈ % Senior Notes due 2015(5)		450		—
6 ¹ / ₂ % Senior Notes due 2017(5)		473		—
9 ³ / ₄ % Senior Notes due 2019(6)		291		291
Senior Notes offered hereby(7)		—		925
TLLP 5.875% Senior Notes due 2020(8)		—		350
Capital lease obligations		21		21

Total Debt	$	1,702	$	1,587

Total Stockholders’ Equity		4,423		4,404

Total Capitalization	$	6,125	$	5,991

(1)

At June 30, 2012, our revolving credit facility provided for borrowings (including letters of credit) up to the lesser of the amount of a periodically adjusted borrowing base of approximately $3.0 billion, consisting of Tesoro’s eligible cash and cash equivalents, receivables and petroleum inventories, net of the standard reserve as defined, or the revolving credit facility’s total capacity of $1.85 billion. At June 30, 2012, we had unused credit availability of approximately $946 million, or 51% of the eligible borrowing base. As of June 30, 2012, we had no borrowings outstanding under this agreement and letters of credit outstanding of $904 million. The revolving credit facility allows us to obtain letters of credit under separate letter of credit agreements. As of June 30, 2012, we had $541 million outstanding under our under separate letter of credit agreements.

(2)

At June 30, 2012, TPSA’s revolving credit facility provided for borrowings (including letters of credit) up to the lesser of the amount of a periodically adjusted borrowing base of approximately $186 million, consisting of TPSA eligible receivables and petroleum inventories, net of reserves, or the agreement’s capacity based on the net worth of TPSA. As of June 30, 2012, we had $450 million in unused credit availability under this agreement, outstanding borrowings of $50 million and no letters of credit outstanding. In August 2012, TPSA repaid all outstanding borrowings under its revolving credit facility and terminated the facility.

(3)

TLLP’s revolving credit facility provides for total available revolving capacity of $300 million and allows for TLLP to request that the capacity be increased up to an aggregate of $450 million, subject to receiving increased commitments from the lenders. As of June 30, 2012, TLLP had $118 million of borrowings and $0.3 million of letters of credit outstanding under its revolving credit facility. TLLP intends to repay all of its borrowings under its revolving credit facility in connection with the TLLP Notes Offering. See “Summary—Recent developments—TRMC’s expected Long Beach marine terminal and Los Angeles short-haul pipelines sale to TLLP and the TLLP notes offering.”

(4)

Gives effect to our redemption in full of the 2012 Notes, which is expected to close on September 21, 2012. See “Summary—Recent developments—Redemption of 2012 Notes.”

(5)

Assumes 100% of the outstanding 2015 Notes and Existing 2017 Notes will be validly tendered on or prior to the Early Tender Date and accepted for purchase in the Cash Tender Offers. See “Summary—Related Transactions.”

(6)

Net of unamortized discount of $9 million.

(7)

Represents the principal amount of the notes offered hereby, consisting of senior notes due 2017 and senior notes due 2022.

(8)

The TLLP Notes Offering is expected to close on September 14, 2012. See “Summary—Recent developments—TRMC’s expected Long Beach marine terminal and Los Angeles short-haul pipelines sale to TLLP and the TLLP notes offering.”

Description of other indebtedness

Credit Facilities

Tesoro Corporation Revolving Credit Facility

We amended our revolving credit facility (which we refer to as the “Revolving Credit Facility”) in March 2011, adjusting the total available capacity to $1.85 billion. The total capacity can be further increased up to an aggregate of $2.25 billion, subject to receiving increased commitments. Additionally, there were reductions in borrowing rates and the easing of certain covenants. The Revolving Credit Facility is guaranteed by substantially all of Tesoro’s active domestic subsidiaries, excluding TLGP and TLLP and its subsidiaries, and is secured by substantially all of the crude oil and refined product inventories, cash and receivables of Tesoro’s active domestic subsidiaries.

We also amended the Revolving Credit Facility in June 2012 and August 2012. The June 2012 amendment permits us to enter into permitted credit enhancement transactions, including silent payment undertakings and certain put arrangements, to transfer the credit risk associated with commercial agreements with third parties for the sale of certain crude oil, feedstocks and refined products to a financial institution in exchange for the right, title and interest to the receivable associated with such sales transactions or related invoices. The August 2012 amendment allows Tesoro Canada Supply & Distribution Ltd. and TPSA to become subsidiary guarantors under the Revolving Credit Facility upon the satisfaction of certain conditions which were satisfied in August 2012. In connection with each of such entities becoming a subsidiary guarantor, certain provisions of the Revolving Credit Facility will be automatically modified to reflect each entity’s revised status. In addition, the August 2012 amendment includes changes relating to financial contracts to reflect updated market standards and to incorporate our risk management policy.

Our Revolving Credit Facility and Existing Senior Notes impose various restrictions and covenants that could potentially limit our ability to respond to market conditions, raise additional debt or equity capital, pay cash dividends, or repurchase our common stock. The indentures for our Existing Senior Notes contain covenants and restrictions, which are customary for notes of this nature. These covenants and restrictions limit, among other things, our ability to:

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pay dividends and make other distributions with respect to our capital stock and purchase, redeem or retire our capital stock;

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incur additional indebtedness and issue preferred stock;

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sell assets unless the proceeds from those sales are used to repay debt or are reinvested in our business;

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incur liens on assets to secure certain debt;

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engage in certain business activities;

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make certain payments and distributions from our subsidiaries;

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engage in certain mergers or consolidations and transfers of assets; and

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enter into transactions with affiliates.

In addition, under our Revolving Credit Facility we have a default covenant that requires us to maintain specified levels of tangible net worth. We were in compliance with our debt covenants as of and for the year December 31, 2011 and the six months ended June 30, 2012.

At June 30, 2012, our Revolving Credit Facility provided for borrowings (including letters of credit) up to the lesser of the amount of a periodically adjusted borrowing base of approximately $3.0 billion, consisting of Tesoro’s eligible cash and cash equivalents, receivables and petroleum inventories, net of the standard reserve of $50 million as defined (subject to adjustment if the fixed charge coverage ratio is less than 1.0), or the Revolving Credit Facility’s total capacity of $1.85 billion. At June 30, 2012, we had no borrowings and $904 million in letters of credit outstanding under our Revolving Credit Facility, resulting in total unused credit availability of approximately $946 million, or 51% of the eligible borrowing base. We have the option to elect if the borrowings will bear interest at either a base rate (3.25% at June 30, 2012) plus the base rate margin or a Eurodollar rate, for the applicable period (0.25% at June 30, 2012), plus the Eurodollar margin. The Eurodollar margin at June 30, 2012 was 1.75%, but varies based upon our credit facility availability and credit ratings. Letters of credit outstanding under the Revolving Credit Facility incur fees at an annual rate tied to the applicable margin described above (1.75% at June 30, 2012). We also incur commitment fees for the unused portion of the Revolving Credit Facility at an annual rate that varies based on credit ratings and ranges from 0.375% to 0.50%. At June 30, 2012, the annual rate of commitment fees was 0.375%.

Our committed Revolving Credit Facility is scheduled to mature on March 16, 2016. The Revolving Credit Facility will terminate if we do not (a) refinance or pay in full the 2012 Notes on or prior to the stated maturity date, or (b) refinance or pay in full the 2015 Notes on or prior to the stated maturity date.

Letter of Credit Agreements

The Revolving Credit Facility allows us to obtain letters of credit under separate letter of credit agreements for foreign crude oil purchases. In August 2011, we added an additional facility, which increased the number of agreements from three to four. At June 30, 2012, the four separate uncommitted letter of credit agreements had $541 million outstanding, resulting in total unused credit availability of $355 million, or 40% of total capacity, under these credit facilities. Letters of credit outstanding under these agreements incur fees and are secured by the crude oil inventories for which they are issued. Capacity under these letter of credit agreements is available on an uncommitted basis, and can be terminated by either party, at any time.

TLLP Revolving Credit Facility

On April 26, 2011, TLLP entered into a senior secured revolving credit agreement with a syndicate of banks and financial institutions (which we refer to as the “TLLP Revolving Credit Facility”). TLLP amended the TLLP Revolving Credit Facility effective March 30, 2012. Concurrent with the execution of the amendment and pursuant to the terms of the original agreement, TLLP exercised its option to increase the total loan availability under the credit agreement that governs the TLLP Revolving Credit Facility from $150 million to an aggregate of $300 million. The amendment allows TLLP to request that the availability be increased up to an aggregate of $450 million, subject to receiving increased commitments from the lenders, compared to the original agreement which allowed an aggregate capacity of $300 million. TLLP had $118 million in borrowings outstanding under this facility at June 30, 2012. In connection with the TLLP Notes Offering, TLLP intends to repay all of its outstanding borrowings under its revolving credit facility. See “Summary—Recent developments—TRMC’s expected Long Beach marine terminal and Los Angeles short-haul pipelines sale to TLLP and the TLLP notes offering.”

Effective August 17, 2012, the TLLP Revolving Credit Facility was amended to revise the interest coverage and leverage ratios that it requires TLLP to maintain. The amendment also added a consolidated senior secured leverage ratio requirement whereby TLLP’s consolidated funded senior secured debt to its consolidated earnings before interest, taxes, depreciation and amortization, as of the end of any fiscal quarter for the immediately preceding four quarter period, cannot exceed a certain amount.

The TLLP Revolving Credit Facility is non-recourse to Tesoro, except for TLGP (which is TLLP’s general partner), and is guaranteed by all of TLLP’s subsidiaries and secured by substantially all of its assets. Borrowings available under the TLLP Revolving Credit Facility are up to the total available revolving capacity of the facility. The TLLP Revolving Credit Facility is scheduled to mature on April 25, 2014.

We have the option to elect if revolver borrowings bear interest at either a base rate (3.25% at June 30, 2012) plus the base rate margin, or a Eurodollar rate (0.25% at June 30, 2012), for the applicable period, plus, the Eurodollar margin (2.50% at June 30, 2012) at the time of the borrowing. The applicable margin varies based upon a certain coverage ratio, as defined. We also incur commitment fees for the unused portion of the TLLP Revolving Credit Facility at an annual rate. At June 30, 2012, the annual rate of commitment fee was 0.50%. Letters of credit outstanding under the TLLP Revolving Credit Facility incur fees at the Eurodollar margin rate.

The TLLP Revolving Credit Facility contains affirmative and negative covenants that, among other things, limit or restrict TLLP’s ability (as well as those of TLLP’s subsidiaries) to:

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incur additional indebtedness and incur liens on assets to secure certain debt;

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pay and make certain restricted payments;

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make distributions from its subsidiaries;

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dispose of assets unless the proceeds from those sales are used to repay debt or are reinvested in its business;

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make certain amendments, modifications or supplements to organization documents and material contracts;

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engage in certain business activities;

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engage in certain mergers or consolidations and transfers of assets; and

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enter into transactions with affiliates.

Additionally, covenants require TLLP to maintain certain interest coverage and leverage ratios. We were in compliance with all TLLP Revolving Credit Facility covenants and conditions as of June 30, 2012. Furthermore, the indentures for the Existing Senior Notes also limit our subsidiaries’ ability to create restrictions on making certain payments and distributions.

Senior Notes

6 ¹ / ₄ % Senior notes due 2012

In November 2005, we issued $450 million aggregate principal amount of 6 ¹ / ₄ % senior notes due November 1, 2012. The 2012 Notes mature on November 1, 2012 with no sinking fund requirements and are subject to optional redemption, in whole or in part, by us prior to the

maturity date at a “make whole” redemption price. The indenture for the 2012 Notes contains covenants, agreements and events of default that are customary with respect to non-investment grade debt securities and are identical to the covenants in the indenture for the 2015 Notes. Substantially all of these covenants will terminate before the 2012 Notes mature if one of two specified ratings agencies assigns the 2012 Notes an investment grade rating and no events of default exist under the indenture. The terminated covenants will not be restored even if the credit rating assigned to the 2012 Notes subsequently falls below investment grade. The 2012 Notes are unsecured and are guaranteed by substantially all of our active domestic subsidiaries, excluding any entities related to TLLP.

We repurchased $151 million of the 2012 Notes through the open market for an aggregate purchase price of $161 million including accrued interest and premiums during the year ended December 31, 2011. As of June 30, 2012, there was $299 million aggregate principal amount of the 2012 Notes outstanding. On August 16, 2012, we gave notice to holders of our 2012 Notes that we will redeem the 2012 Notes in full on September 21, 2012 at a redemption price of 100% of the principal amount thereof.

6 ⁵ / ₈ % Senior notes due 2015

In November 2005, we issued $450 million aggregate principal amount of 6 ⁵ / ₈ % senior notes due November 1, 2015. The 2015 Notes mature on November 1, 2015 with no sinking fund requirements and are subject to optional redemption by us at premiums of 2.2% prior to October 2012; 1.1% from November 2012 to October 2013; and at par thereafter. The indenture for the 2015 Notes contains covenants, agreements and events of default that are customary with respect to non-investment grade debt securities and are identical to the covenants in the indenture for the 2012 Notes. Substantially all of these covenants will terminate before the 2015 Notes mature if one of two specified ratings agencies assigns the 2015 Notes an investment grade rating and no events of default exist under the indenture. The terminated covenants will not be restored even if the credit rating assigned to the 2015 Notes subsequently falls below investment grade. The 2015 Notes are unsecured and are guaranteed by substantially all of our active domestic subsidiaries, excluding any entities related to TLLP.

As of June 30, 2012, there was $450 million aggregate principal amount of the 2015 Notes outstanding. We are seeking to repurchase all of the 2015 Notes through the applicable Cash Tender Offer. Simultaneously with such Cash Tender Offer, we are conducting a consent solicitation from the holders of the 2015 Notes which would eliminate most of the restrictive covenants, certain of the events of default and certain other provisions contained in the indenture governing the 2015 Notes. See “Summary—Related transactions.” Any of the 2015 Notes that are not tendered and purchased in such Cash Tender Offer will remain outstanding in accordance with their terms, as amended by any supplemental indenture entered into pursuant to such Cash Tender Offer and consent solicitation. In addition, from time to time we may, at our option, purchase in whole or in part any of the 2015 Notes not acquired in such Cash Tender Offer through redemption, open market purchases or by other means at prices to be determined in accordance with the terms of any such transaction.

6 ¹ / ₂ % Senior notes due 2017

In May 2007, we issued $500 million aggregate principal amount of 6 ¹ / ₂ % senior notes due June 1, 2017. The Existing 2017 Notes mature on June 1, 2017 with no sinking fund requirements and are subject to optional redemption by us prior to June 1, 2012 at a “make whole”

redemption price, and beginning June 2012 at premiums of 3.25% through May 2013; 2.17% from June 2013 through May 2014; 1.08% from June 2014 through May 2015; and at par thereafter. The indenture for the Existing 2017 Notes contains covenants, agreements and events of default that are customary with respect to non-investment grade debt securities. Substantially all of these covenants will terminate before the Existing 2017 Notes mature if one of two specified ratings agencies assigns the Existing 2017 Notes an investment grade rating and no events of default exist under the indenture. The terminated covenants will not be restored even if the credit rating assigned to the Existing 2017 Notes subsequently falls below investment grade. The Existing 2017 Notes are unsecured and are guaranteed by substantially all of our active domestic subsidiaries, excluding any entities related to TLLP.

We repurchased $27 million of the Existing 2017 Notes through the open market for an aggregate purchase price of $28 million, including accrued interest and premiums during the year ended December 31, 2011. As of June 30, 2012, there was $473 million aggregate principal amount of the Existing 2017 Notes outstanding. We are seeking to repurchase all of the Existing 2017 Notes through the applicable Cash Tender Offer. Simultaneously with such Cash Tender Offer, we are conducting a consent solicitation from the holders of the Existing 2017 Notes which would eliminate most of the restrictive covenants, certain of the events of default and certain other provisions contained in the indenture governing the Existing 2017 Notes. See “Summary—Related transactions.” Any of the Existing 2017 Notes that are not tendered and purchased in such Cash Tender Offer will remain outstanding in accordance with their terms, as amended by any supplemental indenture entered into pursuant to such Cash Tender Offer and consent solicitation. In addition, from time to time we may, at our option, purchase in whole or in part any of the Existing 2017 Notes not acquired in such Cash Tender Offer through redemption, open market purchases or by other means at prices to be determined in accordance with the terms of any such transaction.

9 ³ / ₄ % Senior notes due 2019

In June 2009, we issued $300 million aggregate principal amount of 9 ³ / ₄ % senior notes, due June 1, 2019. The 2019 Notes were issued at 96.172% of face value at an effective interest rate of 10.375%. The 2019 Notes have a ten-year maturity with no sinking fund requirements and are subject to optional redemption by Tesoro beginning June 1, 2014 at premiums of 4.875% through May 31, 2015; 3.25% from June 1, 2015 through May 31, 2016; 1.625% from June 1, 2016 through May 31, 2017; and at par thereafter. We have the right to redeem up to 35% of the aggregate principal amount at 109.75% of face value with proceeds from certain equity issuances through June 1, 2012. The indenture for the 2019 Notes contains covenants, agreements and events of default that are customary with respect to non-investment grade debt securities. Substantially all of these covenants will terminate before the 2019 Notes mature if one of two specified ratings agencies assigns the 2019 Notes an investment grade rating and no events of default exist under the indenture. The terminated covenants will not be restored even if the credit rating assigned to the 2019 Notes subsequently falls below investment grade. The 2019 Notes are unsecured and are guaranteed by substantially all of our domestic subsidiaries, excluding any entities related to TLLP.

As of June 30, 2012, there was $300 million aggregate principal amount of the 2019 Notes outstanding.

TLLP’s 5.875% Senior notes due 2020

TLLP expects to consummate an offering of $350 million aggregate principal amount of 5.875% senior notes due 2020 (the “TLLP Notes”) on September 14, 2012, pursuant to Rule 144A and Regulation S under the Securities Act. See “Summary—Recent developments—TRMC’s expected Long Beach marine terminal and Los Angeles short-haul pipelines sale to TLLP and the TLLP notes offering.”

The TLLP Notes are expected to bear interest at a rate of 5.875% per annum. The TLLP Notes are expected to have an eight-year maturity with no sinking fund requirements and are subject to optional redemption by TLLP beginning October 1, 2016 at premiums of 102.938% through October 1, 2017; 101.469% from October 1, 2017 through October 1, 2018; and at par thereafter. TLLP will have the right to redeem up to 35% of the aggregate principal amount at 105.875% of face value with proceeds from certain equity issuances through October 1, 2015. The indenture for the TLLP Notes will contain covenants, agreements and events of default that are customary with respect to non-investment grade debt securities.

Under the indenture that will govern the TLLP Notes, substantially all of these covenants will terminate before the TLLP Notes mature if both of two specified ratings agencies assign the TLLP Notes an investment grade rating and no events of default exist under the indenture. The terminated covenants will not be restored even if the credit rating assigned to the TLLP Notes subsequently falls below investment grade. The TLLP Notes will be unsecured and will be guaranteed by all of TLLP’s domestic subsidiaries, except Tesoro Logistics Finance Corp., the co-issuer of the TLLP Notes.

Description of the notes

Tesoro will issue the % Senior Notes due 2017 (the “2017 Notes”) and the % Senior Notes due 2022 (the “2022 Notes” and, together with the 2017 Notes, the “notes”) as two separate series of notes under an indenture (which we refer to as the “Indenture”), among Tesoro, the Guarantors and U.S. Bank National Association, as trustee. The terms of each series of notes include those provisions contained in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (which we refer to as the “TIA”).

The following discussion summarizes the material provisions of each series of notes and the Indenture. It does not purport to be complete, and is qualified in its entirety by reference to all of the provisions of the notes and the Indenture, including the definition of certain terms, and to the TIA. We urge you to read the notes of each series and the Indenture because they, and not this description, define your rights as holders of the notes. You can find the definitions of certain terms used in this description under the caption “—Certain definitions.” In this description, the word “Tesoro” refers only to Tesoro Corporation and does not include any of its Subsidiaries. Certain other defined terms used in this description but not defined below under the caption “—Certain definitions” have the meanings assigned to them in the Indenture.

The registered holder of a note will be treated as the owner of it for all purposes. Only registered holders will have rights under the Indenture.

Brief description of the notes and the guarantees

The notes

The notes will be:

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general unsecured senior obligations of Tesoro;

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equal in right of payment with each other and to all existing and future senior Indebtedness of Tesoro, including Tesoro’s obligations under the Existing Senior Notes and the Senior Credit Facility;

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senior in right of payment to all future subordinated Indebtedness of Tesoro;

•

effectively subordinate in right of payment to all existing and future secured Indebtedness of Tesoro, including Indebtedness under the Senior Credit Facility, to the extent of the value of the collateral securing such Indebtedness;

•

structurally subordinate in right of payment to all existing and future Indebtedness and other liabilities of Tesoro’s non-guarantor Subsidiaries (other than Indebtedness and liabilities owed to Tesoro or any Guarantor); and

•

unconditionally guaranteed by the Guarantors on a senior unsecured basis.

As of June 30, 2012, after giving effect to the Transactions, Tesoro would have had total Indebtedness of approximately $1.6 billion, of which $21 million would have been secured Indebtedness. As of June 30, 2012, after giving effect to the Transactions, the notes would have been structurally subordinated to $625 million of liabilities (including long-term payables to affiliates) of Tesoro’s non-guarantor Subsidiaries. In addition, as of June 30, 2012, Tesoro had $1.4 billion of letters of credit outstanding under its letter of credit facilities that do not constitute Indebtedness, but any obligations that arise thereunder are generally secured by the crude oil inventories supported thereby.

The guarantees

The notes initially will be guaranteed by each of the Guarantors. Each Subsidiary Guarantee will be:

•

a general unsecured senior obligation of such Guarantor;

•

equal in right of payment to all existing and future senior Indebtedness of such Guarantor, including such Guarantor’s guarantee of each series of notes, the Existing Senior Notes and the Senior Credit Facility;

•

senior in right of payment to all future subordinated Indebtedness of such Guarantor;

•

effectively subordinate in right of payment to all existing and future secured Indebtedness of such Guarantor, including its guarantee of Indebtedness under the Senior Credit Facility, to the extent of the value of the collateral securing such Indebtedness; and

•

structurally subordinate to all existing and future Indebtedness and other liabilities of Tesoro’s non-guarantor Subsidiaries (other than indebtedness and liabilities owed to such Guarantor).

As of June 30, 2012, after giving effect to the Transactions, the Guarantors would have had $21 million of Indebtedness outstanding in the form of capital leases.

Not all of Tesoro’s Restricted Subsidiaries will guarantee the notes. Furthermore, newly created or acquired Restricted Subsidiaries will be required to guarantee the notes only under the circumstances described below under the caption “—Certain covenants—Additional subsidiary guarantees.” In the event of a bankruptcy, liquidation or reorganization of any non-guarantor Subsidiary, the non-guarantor Subsidiary will pay the holders of its debt and other liabilities before it will be able to distribute any of its assets to Tesoro. Tesoro’s non-guarantor Subsidiaries had assets representing approximately $1.1 billion, or 10.4%, of the consolidated assets (after giving effect to intercompany eliminations) of Tesoro as of June 30, 2012. Tesoro’s non-guarantor subsidiaries had revenue representing approximately $3.0 billion and $1.2 billion, or 10.0% and 7.8%, of the consolidated revenues (after giving effect to intercompany eliminations) of Tesoro for the year ended December 31, 2011 and the six months ended June 30, 2012, respectively.

As of the Issue Date, all of Tesoro’s Domestic Subsidiaries will be Restricted Subsidiaries other than Tesoro Logistics LP, Tesoro Logistics GP, LLC and their subsidiaries. However, under the circumstances described below under the subheading “—Certain covenants—Restricted payments”, Tesoro will be permitted to designate certain of its Subsidiaries as “Unrestricted Subsidiaries.” Unrestricted Subsidiaries will not be subject to the restrictive covenants in the Indenture and will not guarantee the notes.

Principal, maturity and interest

Tesoro will issue the 2017 Notes in an initial aggregate principal amount of $ million and the 2022 Notes in an initial aggregate principal amount of $ million. The 2017 Notes will mature on , 2017. The 2022 Notes will mature on , 2022. The notes will bear interest at the applicable rate set forth on the cover page of this prospectus from , 2012, or from the most recent interest payment date to which interest has been paid. Interest on the notes will be payable semiannually on and of each year, beginning on , 2013. Tesoro will pay interest to those persons who are holders of record at the close of business on and of each year. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Tesoro may issue additional notes of either series from time to time after the date hereof. Any offering of additional notes will be subject to all of the covenants in the Indenture. The notes of a particular series and any additional notes of such series will be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. Any additional notes issued will be guaranteed by the Guarantors party to the Indenture. Unless the context otherwise requires, references to “notes” for all purposes of the Indenture and this “Description of the notes” include any additional notes that are actually issued.

Principal of and premium and interest, if any, on the notes will be payable, and the notes will be exchangeable and transferable, at the office or agency of Tesoro in The City of New York maintained for such purposes, which initially will be the office of the trustee in The City of New York. In addition, interest may be paid, at Tesoro’s option, by check mailed to registered holders at their respective addresses as shown on the security register for the notes. The notes will be issued only in fully registered form without coupons, in denominations of $2,000 and integral multiples of $1,000 in excess thereof. No service charge will be made for any registration of transfer, exchange or redemption of notes, except in specified circumstances for any tax or other governmental charge that may be imposed in connection with those transfers, exchanges or redemptions.

Subsidiary guarantees

Tesoro’s payment obligations with respect to the notes will be jointly and severally guaranteed on a senior basis by the Guarantors. Prior to the occurrence of an Investment Grade Rating Event, additional Domestic Subsidiaries of Tesoro will be required to become Guarantors under the circumstances described under “—Certain covenants—Additional subsidiary guarantees.” The Subsidiary Guarantees will be joint and several obligations of the Guarantors. The obligations of each Guarantor under its Subsidiary Guarantee will be limited to the maximum amount the Guarantor is permitted to guarantee under applicable law without creating a “fraudulent conveyance.” See “Risk factors—Risks relating to the notes—The subsidiary guarantees could be deemed fraudulent conveyances under certain circumstances, and a court may try to subordinate or avoid the subsidiary guarantees.”

The Indenture will provide that, to the extent that the Subsidiary Guarantee of a Guarantor has not been released in accordance with the provisions of the Indenture, such Guarantor may not sell or otherwise dispose of all or substantially all of its properties or assets to, or consolidate with or merge with or into, another Person (whether or not such Guarantor is the resulting, transferee or surviving Person) other than Tesoro or another Guarantor, unless:

(1) immediately after giving effect to such transaction, no Default or Event of Default exists; and

(2) either:

(a) the Person acquiring the properties or assets in any such sale or other disposition or the Person formed by or surviving any such consolidation or merger (if other than Tesoro or another Guarantor) unconditionally assumes, pursuant to a supplemental indenture substantially in the form specified in the Indenture, all the obligations of such Guarantor under the Indenture, the notes and its Subsidiary Guarantee on terms set forth therein; or

(b) the Net Proceeds of such sale or other disposition are applied in accordance with the provisions of the Indenture described under the caption “—Repurchase at the option of holders—Asset sales.”

The Indenture will provide that the Subsidiary Guarantee of a Guarantor will be released:

(1) in connection with any sale or other disposition of all or substantially all of the properties or assets of such Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) Tesoro or a Restricted Subsidiary of Tesoro, if the sale or other disposition complies with the applicable provisions of the Indenture;

(2) in connection with any sale or other disposition of all of the Capital Stock of such Guarantor to a Person that is not (either before or after giving effect to such transaction) Tesoro or a Restricted Subsidiary of Tesoro, if the sale or other disposition complies with the applicable provisions of the Indenture;

(3) if such Guarantor is a Restricted Subsidiary and Tesoro designates such Guarantor as an Unrestricted Subsidiary in accordance with the applicable provisions of the Indenture;

(4) upon Legal Defeasance or Covenant Defeasance as described below under the caption “—Legal defeasance and covenant defeasance” or upon satisfaction and discharge of the Indenture as described below under the caption “—Satisfaction and discharge”;

(5) upon the release or discharge of a Guarantor’s guarantee of any Indebtedness that resulted in its obligation to provide a Subsidiary Guarantee with respect to the notes; or

(6) upon the liquidation or dissolution of such Guarantor, provided that no Default or Event of Default has occurred and is continuing.

Optional redemption

The notes will not be redeemable at the option of Tesoro except as described below.

2017 Notes

At any time and from time to time before , 2017, Tesoro may, at its option, redeem all or a portion of the 2017 Notes, upon notice as described under the heading “Selection and notice,” at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium with respect to the 2017 Notes plus accrued and unpaid interest, if any, thereon to, but excluding the redemption date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date. On or after , 2017, the 2017 Notes may be redeemed, in whole or in part, at our option at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, thereon to but excluding the redemption date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date.

2022 Notes

At any time and from time to time prior to , 2017, Tesoro may, at its option, redeem all or a portion of the 2022 Notes, upon notice as described under the heading “Selection and

notice,” at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium with respect to the 2022 Notes plus accrued and unpaid interest, if any, thereon to, but excluding the redemption date subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date.

On or after , 2017, the 2022 Notes will be subject to redemption at any time and from time to time at the option of Tesoro, in whole or in part, upon notice as described under the heading “Selection and notice,” at the redemption prices (expressed as percentages of principal amount of the 2022 Notes to be redeemed) set forth below plus accrued and unpaid interest, if any, thereon to but excluding the applicable redemption date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date, if redeemed during the twelve-month period beginning on of each of the years indicated below:


Year	Percentage

2017		%
2018		%
2019		%
2020 and thereafter		100.000%

In addition, at any time and from time to time, prior to , 2015, Tesoro may, at its option, upon notice as described under the heading “Selection and notice,” on any one or more occasions redeem up to 35% of the aggregate principal amount of the 2022 Notes (which amount includes additional notes), at a redemption price equal to % of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, thereon to, but excluding the redemption date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date, with the net cash proceeds of any one or more Equity Offerings; provided that at least 65% of the aggregate principal amount of the 2022 Notes issued under the Indenture on the Issue Date (which amount excludes any additional notes) remains outstanding immediately after each such redemption; and provided, further , that each such redemption shall occur within 180 days of the date of the closing of such Equity Offering.

Any redemption or notice of any redemption may, at Tesoro’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of an Equity Offering, other offering or other corporate transaction or event. Notice of any redemption in respect of an Equity Offering may be given prior to the completion thereof.

Selection and notice

If less than all of the notes are to be repurchased or redeemed at any time, selection of such notes for repurchase or redemption will be made by the trustee (1) in compliance with the requirements of the principal national securities exchange, if any, on which the notes are listed, (2) on a pro rata basis to the extent practicable and in accordance with the procedures of DTC or (3) by lot or in such other similar method in accordance with the procedures of DTC; provided that no notes of $2,000 or less shall be repurchased or redeemed in part. Notices of purchase or redemption with respect to the notes shall be delivered electronically or mailed by first class mail, postage prepaid, at least 30 but not more than 60 days before the purchase or redemption date to each holder of notes whose notes are to be redeemed at its registered address or otherwise in accordance with the procedures of DTC, except that redemption notices may be mailed more

than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the notes or a satisfaction and discharge of the Indenture.

If any note of a series is to be repurchased or redeemed in part only, the notice of purchase or redemption that relates to such note shall state the portion of the principal amount thereof to be repurchased or redeemed. A new note of such series in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption, unless such redemption is conditioned on the happening of a future event. On and after the redemption date, interest ceases to accrue on the notes or portions of the notes called for redemption.

The notice relating to a “make-whole” redemption need not set forth the Applicable Premium but only the manner of calculation of the redemption price. The Indenture will provide that, with respect to any such redemption, Tesoro will notify the trustee of the Applicable Premium with respect to the notes promptly after the calculation and that the trustee will not be responsible for such calculation.

Repurchase at the option of holders

Change of control triggering event

The indenture governing the notes will provide that, upon the occurrence of a Change of Control Triggering Event, all holders of notes issued under the Indenture will have the right to require Tesoro to repurchase all or any part of the notes pursuant to the offer described below (the “Change of Control Offer”) at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, thereon, to, but excluding the date of purchase (the “Change of Control Payment”), subject to the right of holders of the notes of record on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control Triggering Event, Tesoro will send to each holder of such notes a notice by first class mail, with a copy to the trustee, or otherwise in accordance with the procedures of DTC, describing the transaction or transactions that constitute the Change of Control Triggering Event and offering to repurchase the notes on the date specified in such notice, which date shall be no earlier than 20 business days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”), pursuant to the procedures required by the Indenture and described in such notice.

With respect to any Change of Control Offer, on the Change of Control Payment Date, Tesoro will, to the extent lawful:

(1) accept for payment all notes or portions thereof properly tendered pursuant to the Change of Control Offer; and

(2) deposit with the paying agent an amount equal to the aggregate Change of Control Payment in respect of all notes or portions thereof properly tendered pursuant to the Change of Control Offer.

The paying agent will promptly mail to each holder of notes properly tendered pursuant to the Change of Control Offer the Change of Control Payment for such notes (or, if all the notes are then in global form, it will make such payment through the facilities of DTC) and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new

note equal in principal amount to any unpurchased portion of the notes surrendered by the holder; provided that each new note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Tesoro will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

The Change of Control provisions described above will be applicable whether or not any other provisions of the Indenture are applicable, except as set forth under the captions “—Legal defeasance and covenant defeasance” and “—Satisfaction and discharge.” Except as described above with respect to a Change of Control Triggering Event, the Indenture will not contain any provision that permits the holders of notes issued thereunder to require Tesoro to repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

Tesoro will comply with the requirements of Rule 14e-l under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture, Tesoro will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the provisions of the Indenture by virtue of such compliance.

Tesoro’s ability to repurchase notes pursuant to a Change of Control Offer may be limited by a number of factors. The occurrence of certain of the events that constitute a Change of Control Triggering Event may constitute a default under the Senior Credit Facility. In addition, certain events that may constitute a change of control under the Senior Credit Facility and cause a default thereunder may not constitute a Change of Control Triggering Event under the Indenture. Future Indebtedness of Tesoro and its Subsidiaries may also contain prohibitions on certain events that would constitute a Change of Control Triggering Event or require such Indebtedness to be repurchased upon a Change of Control Triggering Event. Moreover, the exercise by holders of notes of their right to require Tesoro to repurchase their notes could cause a default under such Indebtedness, even if the Change of Control Triggering Event itself does not, due to the financial effect of such repurchase on Tesoro. Finally, Tesoro’s ability to pay cash to the holders of notes upon a repurchase may be limited by its then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required repurchases.

Even if sufficient funds were otherwise available, the terms of the Senior Credit Facility and other Indebtedness may prohibit Tesoro from prepaying or purchasing the notes before their scheduled maturity. Consequently, if Tesoro is unable to prepay or purchase any Indebtedness containing such restrictions or obtain requisite consents, it will be unable to fulfill its repurchase obligations if holders of notes exercise their repurchase rights following a Change of Control Triggering Event, which could result in a Default under the Indenture. A Default under the Indenture may result in a cross-default under other Indebtedness.

Tesoro has no present intention to engage in a transaction involving a Change of Control, although it is possible that it would decide to do so in the future. The Change of Control Triggering Event provisions described above may deter certain mergers, tender offers and other takeover attempts involving Tesoro by increasing the capital required to effectuate such transactions. The definition of Change of Control includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the assets of Tesoro and its Restricted Subsidiaries taken as a whole. Although there is a developing body of case law

interpreting the phrase “all or substantially all,” there is no precise established definition of this phrase under applicable law. Accordingly, if Tesoro and its Restricted Subsidiaries, considered as a whole, dispose of less than all of this property by any of the means described above, the ability of a holder of notes to require Tesoro to repurchase the holder’s notes may be uncertain. In such a case, holders of the notes may not be able to resolve this uncertainty without resorting to legal action.

Holders will not be entitled to require us to purchase their notes in the event of a takeover, recapitalization, leveraged buyout, private equity investment or similar transaction that is not a Change of Control Triggering Event. In addition, holders will not be entitled to require us to purchase their notes in circumstances involving a significant change in the composition of our Board of Directors, including in connection with a proxy contest.

Tesoro will not be required to make a Change of Control Offer with respect to the notes upon a Change of Control Triggering Event if (i) a third party makes the Change of Control Offer with respect to the notes in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture that are applicable to a Change of Control Offer made by Tesoro and purchases all notes validly tendered and not withdrawn under such Change of Control Offer or (ii) Tesoro has previously or concurrently mailed a redemption notice with respect to all outstanding notes that is unconditional (except for consummation of the Change of Control and any related financing transactions) as described under “Optional redemption”. A Change of Control Offer may be made with respect to the notes in advance of a Change of Control Triggering Event, and conditional upon the occurrence of such Change of Control Triggering Event, if a definitive agreement for the Change of Control is in place at the time of making of the Change of Control Offer.

With respect to a series of notes, if holders of not less than 90% in aggregate principal amount of the outstanding notes of such series tender and do not withdraw such notes in a Change of Control Offer and Tesoro, or any third party making a Change of Control Offer in lieu of Tesoro as described above, purchases all of such notes validly tendered and not withdrawn by such holders, Tesoro or such third party will have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all notes of such series that remain outstanding following such purchase at a price in cash equal to the Change of Control Payment plus, to the extent not included in the Change of Control Payment, accrued and unpaid interest, if any, thereon, to the date of redemption, subject to the right of holders of notes of record on the relevant record date to receive interest due on the relevant interest payment date.

Upon the occurrence of an Investment Grade Rating Event, the Change of Control provisions described under this caption will cease to apply to Tesoro and will no longer have effect.

Asset sales

The Indenture will provide that Tesoro will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1) Tesoro or the Restricted Subsidiary, as the case may be, receives consideration at least equal to the Fair Market Value (such Fair Market Value to be determined on the date of contractually agreeing to such Asset Sale and which shall give effect to the assumption by another Person of any liabilities as provided for in clause (2)(a) of this paragraph) of the assets or Equity Interests issued or sold or otherwise disposed of;

(2) at least 75% of the consideration received in such Asset Sale (provided such requirement shall be 50% for any Asset Sale to an MLP Party, other than sales of core refinery assets) is in the form of cash or Cash Equivalents; provided that any of the following items shall be deemed to be cash and Cash Equivalents for the purposes of this clause (2):

(a) the assumption (by contract or otherwise) of any liabilities (as shown on Tesoro’s or the Restricted Subsidiary’s most recent balance sheet) of Tesoro or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to notes issued under the Indenture or any Subsidiary Guarantee) by the transferee of any such assets that releases Tesoro or the Restricted Subsidiary from further liability with respect to such liabilities;

(b) any securities, notes or other obligations received by Tesoro or any such Restricted Subsidiary from such transferee that are converted by Tesoro or such Restricted Subsidiary into cash or Cash Equivalents within 180 days following their receipt (to the extent of cash or Cash Equivalents received);

(c) other assets or rights used or useful in a Permitted Business, including, without limitation, assets or Investments of the nature or type described in clause (13) of the definition of “Permitted Investments”;

(d) accounts receivable of a business retained by Tesoro or any of its Restricted Subsidiaries following the sale of such business; provided that such accounts receivable (x) are not past due more than 60 days and (y) do not have a payment date greater than 90 days from the date of the invoice creating such accounts receivable; and

(e) any Designated Non-cash Consideration received by Tesoro or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (e) not to exceed 10% of the Consolidated Net Worth of Tesoro at the time of the receipt of such Designated Non-cash Consideration with the fair market value of each item of Designated Non-cash Consideration being measured at the time received without giving effect to subsequent changes in value.

Within 365 days after the receipt of any Net Proceeds from an Asset Sale, Tesoro or such Restricted Subsidiary, as the case may be, may apply such Net Proceeds, at its option:

(a) to prepay, repay, purchase, repurchase or redeem any Senior Indebtedness of Tesoro or any Restricted Subsidiary;

(b) to acquire a controlling interest in another business or all or substantially all of the assets of, or Capital Stock or operating line of, another business, in each case engaged in a Permitted Business;

(d) to acquire other non-current assets to be used or useful in a Permitted Business, including, without limitation, assets or Investments of the nature or type described in clause (13) of the definition of “Permitted Investments;”

provided, that Tesoro or the applicable Restricted Subsidiary will be deemed to have complied with clause (b), (c) or (d) of the prior sentence if, within 365 days of such Asset Sale, Tesoro or such Restricted Subsidiary shall have commenced and not completed or abandoned an

expenditure or Investment, or a binding agreement with respect to an expenditure or Investment, in compliance with clause (b), (c) or (d) and that expenditure or Investment is substantially completed within a date one year and six months after the date of such Asset Sale. Pending the final application of any such Net Proceeds pursuant to this covenant, Tesoro or the applicable Restricted Subsidiary may temporarily reduce Indebtedness under any Credit Facility or otherwise expend or invest such Net Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds from Asset Sales described in this paragraph that are not applied or invested as provided within the time period set forth in the first sentence of this paragraph shall be deemed to constitute “Excess Asset Sale Proceeds.”

Within five days after the date on which the aggregate amount of Excess Asset Sale Proceeds exceeds $100 million (or at Tesoro’s option, an earlier date), Tesoro will be required under the Indenture to make an offer to the holders of notes issued thereunder and the holders of any Senior Indebtedness that is subject to requirements with respect to the application of net proceeds from asset sales that are substantially similar to those contained in the Indenture (an “Asset Sale Offer”) to purchase on a pro rata basis the maximum principal amount of the notes and such other Indebtedness that may be purchased or prepaid, as applicable, out of the prorated Excess Asset Sale Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount (or accreted value) thereof plus accrued and unpaid interest, if any, thereon, to the date of purchase, subject to the right of holders of notes of record on the relevant record date to receive interest due on the relevant interest payment date, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate principal amount (or accreted value) of notes and other Indebtedness tendered (and electing to be redeemed or repaid, as applicable) pursuant to an Asset Sale Offer is less than the Excess Asset Sale Proceeds, Tesoro and its Restricted Subsidiaries may use any remaining Excess Asset Sale Proceeds for general corporate purposes and any other purpose not prohibited by the Indenture. If the aggregate principal amount (or accreted value) of the notes and such other Indebtedness surrendered by holders thereof exceeds the amount of the prorated Excess Asset Sale Proceeds, the trustee shall select the notes and the representative of the holders of such other Indebtedness shall select such other Indebtedness to be purchased on a pro rata basis based on the principal amount or accreted value tendered. Upon completion of the offer to purchase, the amount of Excess Asset Sale Proceeds shall be reset at zero.

Tesoro will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the Indenture, Tesoro will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by virtue of such compliance.

Upon the occurrence of an Investment Grade Rating Event, the Asset Sale provisions described under this caption will cease to apply to Tesoro and will no longer have effect.

Certain covenants

The Indenture will contain covenants including, among others, those summarized below. Upon the occurrence of an Investment Grade Rating Event, each of the covenants described below (except for clause (1) of the first paragraph of the covenant under the caption “—Merger,

consolidation or sale of assets” and the covenant described under the caption “—Reports”), together with the Change of Control Triggering Event and Asset Sales provisions described above under the captions “—Repurchase at the option of the holder—Change of control triggering event” and “—Repurchase at the option of the holder—Asset sales”, respectively, and clause (7) of the first paragraph under the caption “—Events of default and remedies”, will cease to apply to Tesoro and its Subsidiaries, as the case may be, and will no longer have effect. Instead, the covenant described below under the caption “—Investment grade covenant” will apply to Tesoro and become effective upon the occurrence of such an Investment Grade Rating Event.

Restricted payments

The Indenture will provide that Tesoro will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any other payment or distribution on account of Tesoro’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving Tesoro or any of its Restricted Subsidiaries) or to the direct or indirect holders of Tesoro’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such, in each case, other than dividends or distributions declared or paid in Equity Interests (other than Disqualified Equity) of Tesoro or declared or paid to Tesoro or any of its Restricted Subsidiaries;

(2) purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving Tesoro) any Equity Interests of Tesoro (other than any such Equity Interests owned by Tesoro or a Restricted Subsidiary of Tesoro);

(3) make any payment to purchase, redeem, defease or otherwise acquire or retire for value, any Indebtedness that is subordinated to the notes, except (i) any intercompany indebtedness between or among Tesoro and any of its Restricted Subsidiaries and (ii) a payment of interest or principal at its Stated Maturity or a purchase, redemption, defeasance or other acquisition of such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity in each case due within one year of the date of purchase, redemption, defeasance or other acquisition; or

(4) make any Investment other than a Permitted Investment (all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:

(a) no Default or Event of Default shall have occurred and be continuing;

(b) Tesoro would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption “—Incurrence of indebtedness and issuance of disqualified equity”; and

(c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Tesoro or any of its Restricted Subsidiaries after the Issue

Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (8), (9), (10), (11), (12) or (13) of the next succeeding paragraph), is less than the sum of:

(1) 50% of the Consolidated Net Income of Tesoro for the period (taken as one accounting period) from July 1, 2012 to the end of Tesoro’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a loss, less 100% of such loss), plus

(2) 100% of the aggregate net cash proceeds (other than Designated Proceeds), or the Fair Market Value of assets or property other than cash, received by Tesoro from the issue or sale, in either case, since the Issue Date of (A) Equity Interests of Tesoro (other than Disqualified Equity), or (B) Disqualified Equity or debt securities of Tesoro that have been converted into, or exchanged for, Equity Interests, together with the aggregate cash received at the time of such conversion or exchange, or received by Tesoro from any such conversion or exchange of such debt securities sold or issued prior to the Issue Date other than Equity Interests (or Disqualified Equity or convertible or exchangeable debt securities) sold to a Restricted Subsidiary of Tesoro and other than Disqualified Equity or debt securities that have been converted or exchanged into Disqualified Equity, plus

(3) in case any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary pursuant to the terms of the Indenture or has been merged, consolidated or amalgamated with or into, or transfers or conveys assets to or is liquidated into, Tesoro or a Restricted Subsidiary, 100% of the Fair Market Value of such Investment in such Unrestricted Subsidiary (or of the assets transferred or conveyed, as applicable) as of the time of such redesignation, combination or transfer, plus

(4) to the extent not already included in Consolidated Net Income for such period, (A) if any Restricted Investment that was made by Tesoro or any Restricted Subsidiary after the Issue Date is sold, liquidated or repaid, 100% of the aggregate amount received in cash and the Fair Market Value of assets or property other than cash received and (B) with respect to any Restricted Investment that was made by Tesoro or any Restricted Subsidiary after the Issue Date, the net reduction in such Restricted Investment resulting from payments of interest, dividends, principal repayments and other transfers and distributions of cash, assets or property, in an amount not to exceed the aggregate amount of such Restricted Investment; plus

(5) $1.0 billion.

The foregoing provisions shall not prohibit:

(1) the payment of any dividend or the consummation of an irrevocable redemption of Subordinated Obligations within 60 days after the date of the declaration of such dividend or the delivery of the irrevocable notice of redemption, as the case may be, if at the date of the declaration or the date on which such irrevocable notice is delivered, such dividend or redemption would have complied with the provisions of the Indenture (assuming, in the case of a redemption payment, the giving of the notice of such redemption payment would have been deemed to be a Restricted Payment at such time and such deemed Restricted Payment would have been permitted at such time);

(2) the making of any Restricted Payments out of the net cash proceeds (other than Designated Proceeds) of the substantially concurrent sale or issuance (a sale or issuance will

be deemed substantially concurrent if such redemption, repurchase, retirement or acquisition occurs not more than 120 days after such sale or issuance) (other than to a Restricted Subsidiary of Tesoro) of Equity Interests of Tesoro (other than any Disqualified Equity), provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition, or payments, shall be excluded from clause (c)(2) of the preceding paragraph;

(3) the making of any principal payment on, or the defeasance, redemption, repurchase or other acquisition of, any Subordinated Obligation with the net cash proceeds from an incurrence of, or in exchange for the issuance of, Permitted Refinancing Indebtedness;

(4) the payment of any dividend or distribution by a Restricted Subsidiary of Tesoro to the holders of its Equity Interests (other than Disqualified Equity) on a pro rata basis and the payment of any dividend or distribution by Tesoro to the holders of its Disqualified Equity, provided that such Disqualified Equity is issued on or after the Issue Date;

(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Tesoro or any Restricted Subsidiary of Tesoro held by any current or former officer, employee, consultant or director of Tesoro (or any of its Subsidiaries) pursuant to the terms of any management equity plan or stock option plan or any other management or employee benefit plan, agreement or trust; provided, however , that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests pursuant to this clause (5) shall not exceed $15.0 million in any twelve-month period (with up to $7.5 million of any unused amount in any 12-month period to be carried forward to successive calendar years and added to such amount); provided further that such amount in any calendar year may be increased by an amount not to exceed:

(a) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity) of Tesoro to any current or former officers, employees, consultants or directors of Tesoro or any of its Subsidiaries that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (c)(2) of the preceding paragraph and are not associated with Indebtedness owing to Tesoro or any Restricted Subsidiary; plus

(b) the cash proceeds of key man life insurance received by Tesoro or its Restricted Subsidiaries after the Issue Date;

and provided further that cancellation of Indebtedness owing to Tesoro or any Restricted Subsidiary from any current or former officers, employees, consultants or directors of Tesoro or any of its Restricted Subsidiaries in connection with a repurchase of Equity Interests of Tesoro will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of the Indenture;

(6) repurchases of Equity Interests deemed to occur upon the exercise of stock options or warrants to the extent that such Equity Interest represents all or a portion of the exercise price thereof;

(7) the purchase, repurchase, redemption, defeasance, acquisition or other retirement of any Indebtedness that is subordinated in right of payment to the notes pursuant to provisions similar to those described under “Repurchase at the option of holders—Change of

control triggering event” and “Repurchase at the option of holders—Asset sales”; provided that, prior to such purchase, repurchase, redemption, defeasance, acquisition or other retirement, Tesoro (or a third party to the extent permitted by the Indenture) has made a Change of Control Offer or Asset Sale Offer, as the case may be, with respect to the notes as a result of such Change of Control Triggering Event or Asset Sale, as the case may be, and has repurchased all notes validly tendered and not withdrawn in connection with such Change of Control Offer or Asset Sale Offer, as the case may be;

(8) cash payments in lieu of the issuance of fractional shares, or the purchase by Tesoro of fractional shares, in connection with (a) the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of Tesoro or (b) stock dividends or distributions, stock splits, reverse stock splits, merger, consolidation or other business combinations;

(9) the declaration and payment of dividends on mandatorily convertible preferred stock of Tesoro (other than Disqualified Equity) issued after the Issue Date in an aggregate amount not to exceed the amount of Designated Proceeds;

(10) (a) the payment of dividends or other distributions on Equity Interests of Tesoro and (b) the repurchase, redemption or other acquisition or retirement for value of Equity Interests, in each case, on any date where such series of the notes are rated Baa or better by Moody’s and BB or better by S&P (or in either case, if such entity ceases to rate such notes for reasons outside of the control of Tesoro, the equivalent credit rating from any other Rating Agency), provided that on the date of such dividend, other distribution or repurchase, redemption or other acquisition or retirement for value after giving pro forma effect thereto and to any related financing transactions as if the same had occurred at the beginning of Tesoro’s most recently ended four full fiscal quarters for which internal financial statements are available, Tesoro’s Leverage Ratio would have been equal to or less than 2.0 to 1.0;

(11) other Restricted Payments made pursuant to this clause (12) in an aggregate amount not to exceed at any one time outstanding $200 million;

(12) payments made or expected to be made by the Company or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests and repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants; or

(13) payments or distributions to dissenting shareholders pursuant to applicable law in connection with a merger, consolidation or transfer of assets that complies with the covenant described under “Merger, consolidation or sale of assets”.

In determining whether any Restricted Payment is permitted by the foregoing covenant, Tesoro may allocate or reallocate all or any portion of such Restricted Payment among the clauses (1) through (13) of the preceding paragraph or among such clauses and the first paragraph of this covenant including clauses (a), (b) and (c), provided that at the time of such allocation or reallocation, all such Restricted Payments, or allocated portions thereof, would be permitted under the various provisions of the foregoing covenant. The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of the transfer, incurrence or issuance of such non-cash Restricted Payment.

Designation of Restricted and Unrestricted Subsidiaries

The Board of Directors may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if:

(1) immediately after giving effect to such designation, Tesoro could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test under the first paragraph of the covenant described below under the caption “—Certain covenants—Incurrence of indebtedness and issuance of disqualified equity” or the Fixed Charge Coverage Ratio of Tesoro immediately after giving effect to such designation would not be less than the Fixed Charge Coverage Ratio of Tesoro immediately prior to such designation; and

(2) no Default or Event of Default would be in existence following such designation.

Any such designation by the Board of Directors shall be evidenced by Tesoro promptly filing with the trustee a copy of the resolution giving effect to such designation and an officers’ certificate certifying that such designation complied with the foregoing provisions.

The Board of Directors may designate any Subsidiary of Tesoro to be an Unrestricted Subsidiary under the circumstances and pursuant to the requirements described in the definition of “Unrestricted Subsidiary”, which requirements include that such designation will be made in compliance with this covenant. For purposes of making the determination as to whether such designation would be made in compliance with this covenant, all outstanding Investments by Tesoro and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of this covenant. All such outstanding Investments will be deemed to constitute Investments in an amount equal to the Fair Market Value of such Investments at the time of such designation.

If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes hereof, and any Indebtedness of such Subsidiary shall be deemed to be incurred as of such date.

Incurrence of indebtedness and issuance of disqualified equity

The Indenture will provide that Tesoro will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), other than Permitted Debt, and Tesoro shall not issue, and shall not permit any of its Restricted Subsidiaries to issue, any Disqualified Equity; provided, however , that Tesoro or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Equity if Tesoro’s Fixed Charge Coverage Ratio for Tesoro’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such additional Indebtedness had been incurred, or such Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period.

The provisions of the first paragraph of this covenant shall not apply to the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):

(1) the incurrence by Tesoro or any Restricted Subsidiary of Indebtedness pursuant to one or more Credit Facilities; provided, however , that, immediately after giving effect to any such incurrence, the aggregate principal amount (or accreted value, as applicable) of all Indebtedness incurred under this clause (1) and then outstanding does not exceed the greater of (A) $3.5 billion and (B) the amount of the Borrowing Base at the time of incurrence;

(2) the incurrence by Tesoro and the Guarantors of Indebtedness represented by the notes and the Subsidiary Guarantees to be issued on the Issue Date;

(3) the incurrence by Tesoro or any of its Restricted Subsidiaries of Existing Indebtedness (other than Indebtedness incurred under clauses (1) and (2) of this paragraph and the aggregate principal amount of 6 ⁵ / ₈ % Senior Notes and 6 ¹ / ₂ % Senior Notes that are repurchased, redeemed or otherwise retired substantially contemporaneously with the Issue Date with the net proceeds of the notes through the tender offers referred to in this prospectus);

(4) the incurrence by Tesoro or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness, the net proceeds of which are applied to refinance any Indebtedness incurred in respect of any Indebtedness described under clauses (2), (3), (4), (8) or (11) of this paragraph or incurred pursuant to the first paragraph of this covenant;

(5) the incurrence by Tesoro or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Tesoro and any of its Restricted Subsidiaries; provided, however , that (A) if Tesoro or any Guarantor is the obligor and a Restricted Subsidiary of Tesoro that is not a Guarantor is the obligee on such Indebtedness, such Indebtedness will be subordinated to the payment in full of all Obligations with respect to the notes and the Subsidiary Guarantees, as the case may be, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Tesoro or a Restricted Subsidiary of Tesoro and (2) any sale or other transfer of any such Indebtedness to a Person that is not either Tesoro or a Restricted Subsidiary of Tesoro shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Tesoro or such Restricted Subsidiary, as the case may be, that is not then permitted by this clause (5);

(6) the incurrence by Tesoro or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, Synthetic Lease Obligations, mortgage financings or purchase money obligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing the purchase of, the cost of construction, improvement or development of, property, plant or equipment used or useful in the Permitted Business (including, without limitation, oil and gas properties) of Tesoro or a Restricted Subsidiary of Tesoro or incurred to extend, refinance, renew, replace, defease or refund any such purchase price or cost of construction, improvement or development, in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $350 million and (b) 5.0% of Tesoro’s Consolidated Net Tangible Assets;

(7) the incurrence by Tesoro or any of its Restricted Subsidiaries of Indebtedness consisting of Hedging Obligations not entered into for speculative purposes;

(8) Indebtedness arising from agreements of Tesoro or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earn-outs or similar obligations or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of Tesoro or any of its Restricted Subsidiaries pursuant to such agreements, in each case, incurred in connection with the disposition or acquisition of any business, assets or a Subsidiary of Tesoro or any business or assets of its Subsidiaries (other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary of Tesoro or any of its Subsidiaries for the purposes of financing such acquisition);

(9) the guarantee by Tesoro or any Restricted Subsidiary of Indebtedness of Tesoro or a Restricted Subsidiary of Tesoro that was permitted to be incurred by any other provision of this covenant;

(10) the issuance by a Restricted Subsidiary of Tesoro of preferred stock to Tesoro or to any of its Restricted Subsidiaries; provided , however , that any subsequent event or issuance or transfer of any Equity Interests that results in the owner of such preferred stock ceasing to be Tesoro or any of its Restricted Subsidiaries or any subsequent transfer of such preferred stock to a Person, other than Tesoro or one of its Restricted Subsidiaries, shall be deemed to be an issuance of preferred stock by such Subsidiary that was not permitted by this clause (10);

(11) the incurrence by Tesoro or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;

(12) the incurrence by Tesoro or any of its Restricted Subsidiaries of Indebtedness incurred in the ordinary course of business under (A) documentary letters of credit, or surety bonds or insurance contracts, which are to be repaid in full not more than one year after the date on which such Indebtedness is originally incurred to finance the purchase of inventory and other goods by Tesoro or a Restricted Subsidiary of Tesoro, (B) standby letters of credit, surety bonds or insurance contracts issued for the purpose of supporting (1) workers’ compensation or similar liabilities, (2) health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, (3) reclamation, statutory obligations, bankers’ acceptances, in each case, of Tesoro or any of its Restricted Subsidiaries or (2) performance, payment, deposit or surety obligations of Tesoro or any of its Restricted Subsidiaries and (C) bid, advance payment and performance bonds and surety bonds or similar insurance contracts for Tesoro and its Restricted Subsidiaries, and refinancings thereof, including in the case of each of (A), (B) and (C), standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing;

(13) the incurrence by Tesoro or any of its Restricted Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other provision of this covenant) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed the greater of (a) $750 million and (b) 10.0% of Consolidated Net Tangible Assets;

(14) the guarantee by Tesoro or any Restricted Subsidiary of Tesoro of the Indebtedness incurred by Joint Ventures constituting Permitted Investments;

(15) the incurrence by Tesoro or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, so long as such Indebtedness is extinguished within five business days of its Incurrence; and

(16) the issuance by Tesoro or any of its Restricted Subsidiaries of Disqualified Equity to Tesoro or any of its Restricted Subsidiaries, as the case may be; provided, however , that:

(a) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held, directly or indirectly, by a Person other than Tesoro or a Restricted Subsidiary of Tesoro; and

(b) any sale or other transfer of any such Disqualified Equity to a Person that is not either Tesoro or a Restricted Subsidiary of Tesoro,

will be deemed, in each case, to constitute issuance of such Disqualified Equity by Tesoro or such Restricted Subsidiary that was not permitted by this clause (16).

Tesoro will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Tesoro unless such Indebtedness is also contractually subordinated in right of payment to the notes on substantially identical terms; provided , however , that no Indebtedness of Tesoro will be deemed to be contractually subordinated in right of payment to any other Indebtedness of Tesoro solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.

For purposes of determining compliance with this covenant, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (16) above or is entitled to be incurred pursuant to the first paragraph of this covenant, Tesoro will, in its sole discretion, classify (or later classify or reclassify) in whole or in part such item of Indebtedness in any manner that complies with this covenant and such item of Indebtedness or a portion thereof may be classified (or later classified or reclassified) in whole or in part as having been incurred under more than one of the applicable clauses or pursuant to the first paragraph hereof; provided that all Indebtedness outstanding under the Senior Credit Facility on the Issue Date will be treated as incurred on the Issue Date under clause (1) of the second paragraph of this covenant.

Notwithstanding anything to the contrary contained in this covenant, accrual of interest, the accretion of accreted value or the amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this covenant.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced, plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection with the incurrence of such new Indebtedness.

The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the

currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

The amount of any Indebtedness outstanding as of any date will be:

(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;

(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and

(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:

(a) the Fair Market Value of such assets at the date of determination; and

(b) the amount of the Indebtedness of the other Person.

Liens

The Indenture will provide that Tesoro will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien securing any Indebtedness (other than Permitted Liens) upon any of its property or assets (including Capital Stock of a Restricted Subsidiary), whether owned on the Issue Date or acquired after that date, unless:

(1) in the case of Liens securing Subordinated Obligations of Tesoro or a Restricted Subsidiary, the notes or Subsidiary Guarantees, as applicable, are contemporaneously secured by a Lien on such property or assets on a senior basis to the Subordinated Obligations so secured with the same priority that the notes or Subsidiary Guarantees, as applicable, have to such Subordinated Obligations until such time as such Subordinated Obligations are no longer so secured by a Lien; and

(2) in the case of Liens securing Senior Indebtedness of Tesoro or a Restricted Subsidiary, the notes or Subsidiary Guarantees, as applicable, are contemporaneously secured by a Lien on such property or assets on an equal and ratable basis with the Senior Indebtedness so secured until such time as such Senior Indebtedness is no longer so secured by a Lien.

Dividend and other payment restrictions affecting subsidiaries

The Indenture will provide that Tesoro will not, and will not permit any of its Restricted Subsidiaries that is not a Guarantor to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary of Tesoro that is not a Guarantor to:

(1) (x) pay dividends or make any other distributions to Tesoro or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits, or (y) pay any Indebtedness owed to Tesoro or any of its Restricted Subsidiaries; provided , that the priority of any preferred stock in receiving dividends or liquidating distributions prior to the payment of dividends or liquidating distributions on common stock shall not be deemed to be a restriction on the ability to make distributions on Capital Stock;

(2) make loans or advances to Tesoro or any of its Restricted Subsidiaries; or

(3) transfer any of its properties or assets to Tesoro or any of its Restricted Subsidiaries.

The Indenture will further provide that restrictions in the first paragraph of this covenant will not apply to encumbrances or restrictions existing under or by reason of:

(a) agreements in effect on the Issue Date and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings (collectively, for the purposes of this covenant, “amendments”) of any such agreements or any Indebtedness outstanding on the Issue Date to which such agreements relate, provided that such amendments are not materially more restrictive, taken as a whole, with respect to such dividend, distribution and other payment restrictions than those contained in such agreement, as in effect on the Issue Date, as determined by Tesoro;

(b) any Credit Facility in effect after the Issue Date to the extent its provisions are not materially more restrictive, taken as a whole, with respect to such dividend, distribution or other payment restrictions and loan or investment restrictions than those contained in any Credit Facility as in effect on the Issue Date, as determined by Tesoro;

(c) the Indenture, the notes, the Subsidiary Guarantees or any other indentures governing debt securities issued by Tesoro or any Guarantor that are not materially more restrictive, taken as a whole, with respect to such dividend, distribution or other payment restrictions and loan or investment restrictions than those contained in the Indenture, the notes and the Subsidiary Guarantees, as determined by Tesoro;

(d) any future Liens that may be permitted to be granted under, or incurred not in violation of, any other provisions of the Indenture;

(e) applicable law, rule, regulation or order;

(f) any instrument governing Indebtedness or Capital Stock, or any other agreement relating to any property or assets, of a Person acquired by or merged or consolidated with or into Tesoro or any of its Restricted Subsidiaries as in effect at the time of such acquisition or at the time it merges with or into Tesoro or any Restricted Subsidiary, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person or such Person’s subsidiaries, so acquired and any amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacements or refinancings thereof, provided that the restrictions in any such amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacement or refinancings are not materially more restrictive taken as a whole than those in effect on the date of the acquisition;

(g) restrictions of the nature described in clause (3) above by reason of customary non-assignment provisions in contracts, agreements, licenses, leases and conveyances entered into in the ordinary course of business;

(h) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions of the nature described in clause (3) above on the property acquired or leased;

(i) customary provisions in bona fide contracts for the sale of property or assets that restricts the sale or disposition of such property or assets pending such sale;

(j) any agreement for the sale or other disposition of a Subsidiary that restricts distributions by that Subsidiary pending its sale or other disposition;

(k) agreements relating to secured Indebtedness otherwise permitted to be incurred pursuant to the covenant described above under the caption “—Incurrence of indebtedness and issuance of disqualified equity” and Liens not in violation of the covenant described above under the caption “—Liens”, that limit the right of the debtor to dispose of assets subject to such Liens;

(l) Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced, as determined by Tesoro;

(m) provisions with respect to the disposition or distribution of assets in partnership agreements, limited liability company organizational governance documents, joint venture agreements, asset sale agreements, agreements relating to Sale/Leaseback Transactions, stock sale agreements and other similar agreements entered into in the ordinary course of business;

(n) other Indebtedness, Disqualified Equity or preferred stock permitted to be incurred subsequent to the Issue Date pursuant to the provisions of the covenant described under “—Incurrence of indebtedness and issuance of disqualified equity;” provided that, the encumbrances and restrictions contained therein will not materially impair Tesoro’s ability to make payments under the notes when due, as determined in good faith by Tesoro;

(o) encumbrances or restrictions contained in, or in respect of, Hedging Obligations permitted under the Indenture from time to time; and

(p) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business.

Merger, consolidation or sale of assets

The Indenture will provide that Tesoro will not consolidate or merge with or into (whether or not Tesoro is the surviving corporation), or sell, assign, transfer, convey, lease or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, another Person unless:

(1) Tesoro is the resulting, transferee or surviving Person or the resulting, transferee or surviving Person (if other than Tesoro) is a corporation, limited liability company or limited partnership organized and existing under the laws of the United States or any state thereof or the District of Columbia and such resulting, transferee or surviving Person assumes, pursuant to a supplemental indenture and other documentation in form and substance reasonably satisfactory to the trustee, all of the obligations and covenants of Tesoro under the Indenture and the notes; provided that, unless such resulting, transferee or surviving Person is a corporation, a corporate co-issuer of the notes will be added to the Indenture by such supplemental indenture;

(2) immediately after such transaction no Default or Event of Default shall exist; and

(3) either:

(a) immediately after giving pro forma effect to such transaction as if such transaction had occurred at the beginning of the applicable four-quarter period, Tesoro or the resulting, transferee or surviving Person (if other than Tesoro) would have a Fixed Charge Coverage Ratio that is not less than the Fixed Charge Coverage Ratio of Tesoro immediately prior to such transaction;

(b) immediately after giving pro forma effect to such transaction as if such transaction had occurred at the beginning of the applicable four-quarter period, Tesoro or the resulting, transferee or surviving Person (if other than Tesoro) would be able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption “—Incurrence of indebtedness and issuance of disqualified equity”; or

(c) immediately after giving pro forma effect to such transaction, the Consolidated Net Worth of Tesoro or the resulting, transferee or surviving Person (if other than Tesoro) would be not less than the Consolidated Net Worth of Tesoro immediately prior to such transaction

Clause (3) of the first paragraph will not apply to (1) any merger, consolidation or sale, assignment, transfer, conveyance or other disposition of assets between or among Tesoro and any of its Restricted Subsidiaries or (2) a merger of Tesoro with an Affiliate solely for the purpose of reincorporating Tesoro in another jurisdiction.

Upon any transaction or series of related transactions that are of the type described in, and are effected in accordance with, the foregoing paragraph, the surviving Person (if other than Tesoro) shall succeed to, and be substituted for, and may exercise every right and power of, Tesoro under the Indenture and the notes with the same effect as if such surviving Person had been named as Tesoro in the Indenture, and when a surviving Person duly assumes all of the obligations and covenants of Tesoro pursuant to the Indenture and the notes, the predecessor Person shall be relieved of all such obligations.

This “Merger, consolidation or sale of assets” covenant will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among Tesoro and any of the Guarantors.

Additional subsidiary guarantees

The Indenture will provide that if, after the Issue Date, any Domestic Subsidiary that is not already a Guarantor (whether or not acquired or created by Tesoro or a Restricted Subsidiary after the Issue Date) guarantees Indebtedness of Tesoro under a Credit Facility, then such Domestic Subsidiary will become a Guarantor with respect to the notes issued thereunder by executing and delivering a supplemental indenture, in the form provided for in the Indenture, to the trustee within 180 days of the date on which it guarantees such Indebtedness. Notwithstanding the preceding, any Subsidiary Guarantee of a Restricted Subsidiary that was incurred pursuant to this paragraph will be released in the circumstances described under “—Subsidiary Guarantees.”

Transactions with affiliates

The Indenture will provide that Tesoro will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise

dispose of any properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with any Affiliate of any such Person (each of the foregoing, an “Affiliate Transaction”) if such Affiliate Transaction involves aggregate consideration in excess of $5 million, unless:

(1) the terms of such Affiliate Transaction are no less favorable in any material respect to Tesoro or the relevant Restricted Subsidiary, as the case may be, than those that could have been obtained in a comparable arm’s-length transaction by Tesoro or such Restricted Subsidiary with a Person that is not an Affiliate of Tesoro; and

(2) if such Affiliate Transaction involves aggregate payments or value in excess of $50 million, Tesoro delivers to the trustee a resolution adopted by its Board of Directors approving such Affiliate Transaction and confirming that such Affiliate Transaction complies with clause (1) above;

provided that none of the following shall be deemed to be Affiliate Transactions and therefore shall not be subject to the provisions of the preceding paragraph:

(1) Affiliate Transactions involving the purchase, sale, gathering, marketing, storage, terminalling, construction, transportation, and related logistical and operating activities, of crude oil, natural gas and other hydrocarbons, and refined products therefrom, in the ordinary course of any Permitted Business, so long as such transactions are priced in line with industry accepted benchmark prices and the pricing of such transactions are equivalent to the pricing of comparable transactions with unrelated third parties;

(2) reasonable fees and compensation paid to or for the benefit of any employee, officer or director of Tesoro or any of its Restricted Subsidiaries, and any employment agreement, customary benefit program or arrangement, equity award, equity option or equity appreciation agreement or plan, agreement or other similar compensation plan or arrangement entered into by Tesoro or any of its Restricted Subsidiaries in the ordinary course of its business, and any indemnities or other transactions permitted or required by bylaw, statutory provisions or any of the foregoing agreements, plans or arrangements;

(3) transactions between or among (A) Tesoro and one or more Restricted Subsidiaries and (B) any Restricted Subsidiaries;

(4) the existence of, or performance by Tesoro or any Restricted Subsidiary of its obligations under the terms of, any written agreement in effect on the Issue Date, as such agreement may be amended, modified or supplemented from time to time and any similar agreements which it may enter into thereafter; provided , however , that any amendment, modification or supplement to any such agreement or any such similar agreements entered into after the Issue Date will be permitted only to the extent that its terms, taken as a whole, are not materially less favorable to Tesoro or any Restricted Subsidiary as compared to the terms of the agreement in effect on the Issue Date, as determined by Tesoro;

(5) loans or advances to officers, directors and employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures and other purposes, in each case, in the ordinary course of business;

(6) maintenance in the ordinary course of business of customary benefit programs or arrangements for employees, officers or directors, including vacation plans, health and life insurance plans, deferred compensation plans and retirement or savings plans and similar plans;

(7) fees and compensation paid and other benefits made available to, and indemnity provided on behalf of, officers, directors, employees or consultants of Tesoro or any of its Restricted Subsidiaries in their capacity as such, including reimbursement or advancement of out-of-pocket expenses and provisions of officers’ and directors’ liability insurance, to the extent such fees and compensation are customary;

(8) issuances of Equity Interests of Tesoro (other than Disqualified Equity) to Affiliates of Tesoro or any of its Restricted Subsidiaries and performance of reasonable and customary registration rights;

(9) Restricted Payments that are permitted by the provisions of the Indenture described above under the caption “—Restricted payments” and the definition of “Permitted Investments;”

(10) any transactions between Tesoro or any Restricted Subsidiary and any Person, a director of which is also a director of Tesoro or a Restricted Subsidiary; provided that such director abstains from voting as a director of Tesoro or the Restricted Subsidiary, as applicable, in connection with the approval of the transaction;

(11) any sale or other disposition or related transaction specified by the Omnibus Agreement;

(12) transactions with a Person that is an Affiliate of Tesoro solely because Tesoro owns, directly or indirectly, an Equity Interest in, or controls, such Person;

(13) any transaction in which Tesoro or any of its Restricted Subsidiaries, as the case may be, delivers to the trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Tesoro or such Restricted Subsidiary from a financial point of view or that such transaction meets the requirements of clause (1) of the preceding paragraph;

(14) guarantees of performance by Tesoro or any of its Restricted Subsidiaries in the ordinary course of business, except for guarantees of Indebtedness in respect of borrowed money; and

(15) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture which are fair to Tesoro and its Restricted Subsidiaries, in the reasonable determination of Tesoro or that meet the requirements of clause (1) of the preceding paragraph.

Reports

The Indenture will provide that whether or not required by the Commission’s rules and regulations, so long as any notes are outstanding, Tesoro will furnish (whether through hard copy or internet-accessible data) to the holders of notes and the trustee, within the time periods specified in the Commission’s rules and regulations:

(1) all quarterly and annual reports that would be required to be filed with the Commission on Forms 10-Q and 10-K if Tesoro were required to file such reports; and

(2) all current reports that would be required to be filed with the Commission on Form 8-K if Tesoro were required to file such reports.

All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on Tesoro’s consolidated financial statements by Tesoro’s independent registered public accounting firm. In addition, Tesoro will file a copy of each of the reports referred to in clauses (1) and (2) above with the Commission for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the Commission will not accept such a filing) and make such information available to securities analysts and prospective investors upon request.

If at any time Tesoro is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, Tesoro will nevertheless continue filing the reports specified in the preceding paragraph with the Commission within the time periods specified above unless the Commission will not accept such a filing; provided that, for so long as Tesoro is not subject to the periodic reporting requirements of the Exchange Act for any reason, the time period for filing reports on Form 8-K shall be ten business days after the event giving rise to the obligation to file such report. Tesoro agrees that it will not take any action for the purpose of causing the Commission not to accept any such filings. If, notwithstanding the foregoing, the Commission will not accept Tesoro’s filings for any reason, Tesoro will post the reports referred to in the preceding paragraph on its website within the time periods that would apply if Tesoro were required to file those reports with the Commission, subject to the above provisio.

In addition, Tesoro and the Guarantors agree that, for so long as any notes remain outstanding, at any time they are not required to file the reports required by the preceding paragraphs with the Commission, they will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Tesoro will be deemed to have furnished such reports to the trustee and the holders of notes if it has filed such reports with the Commission using the EDGAR filing system (or any successor thereto) and such reports are publicly available.

Investment grade covenant

The Indenture will provide that, upon the occurrence of an Investment Grade Rating Event, the covenant described below will apply to Tesoro and its Subsidiaries and become effective upon the occurrence of such an Investment Grade Rating Event.

Secured indebtedness

If Tesoro or any Subsidiary incurs any Indebtedness secured by a Lien (other than a Permitted Lien) on any Principal Property or on any share of stock or Indebtedness of a Subsidiary, Tesoro or such Subsidiary, as the case may be, will secure the notes equally and ratably with (or, at its option, prior to) the Indebtedness so secured until such time as such Indebtedness is no longer secured by a Lien, unless the aggregate amount of all Indebtedness secured by a Lien and the Attributable Amounts of all Sale/Leaseback Transactions involving Principal Properties would not exceed 15% of Consolidated Net Tangible Assets.

Events of default and remedies

The Indenture will provide that any of the following will constitute an Event of Default with respect to a particular series of notes:

(1) default for 30 days in the payment when due of interest on such series of notes;

(2) default in payment when due of the principal of, or premium, if any, on such series of notes;

(3) failure by Tesoro or any of its Restricted Subsidiaries to comply with the provisions described above under the captions “—Certain covenants—Merger, consolidation or sale of assets” and “—Repurchase at the option of holders—Change of control triggering event” and such failure continues for 30 days after written notice is given to Tesoro as provided below, with respect to such series of notes;

(4) failure by Tesoro to comply with the covenant described under “—Certain covenants—Reports” and such failure continues for 120 days after written notice is given to Tesoro as provided below with respect to such series of notes;

(5) failure by Tesoro or any of its Restricted Subsidiaries to comply with any other agreement in the Indenture or the notes (other than a failure that is subject to clause (1), (2), (3) or (4) above) and such failure continues for 60 days after written notice is given to Tesoro as provided below with respect to such series of notes;

(6) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Tesoro or any of its Restricted Subsidiaries (or the payment of which is guaranteed by Tesoro or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default:

(a) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness (a “Payment Default”); or

(b) results in the acceleration of such Indebtedness prior to its express maturity, and,

in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates without duplication $100 million or more, and such default shall not have been cured or waived or any such acceleration rescinded, or such Indebtedness is repaid, within ten business days after the running of such grace period or the occurrence of such acceleration;

(7) failure by Tesoro or any of its Restricted Subsidiaries that is a Significant Subsidiary to pay final judgments entered into by a court or courts of competent jurisdiction aggregating in excess of $100 million (excluding amounts covered by insurance), which judgments are not paid, discharged or stayed for a period of 60 days;

(8) certain events of bankruptcy or insolvency with respect to Tesoro, or any group of Restricted Subsidiaries that when taken together would constitute a Significant Subsidiary or any Restricted Subsidiary that is a Significant Subsidiary upon the occurrence of such events; and

(9) except as permitted by the Indenture, any Subsidiary Guarantee of a Significant Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor that is a Significant Subsidiary, or any Person acting on behalf of any such Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee (other than by reason of the termination of the Indenture or the release of any such Subsidiary Guarantee in accordance with the Indenture).

A Default under clauses (3), (4) or (5) above will not be an Event of Default with respect to a particular series of notes until the trustee or the holders of not less than 25% in the aggregate principal amount of the then outstanding notes of such series provides written notice to Tesoro of the Default and Tesoro does not cure such Default within the specified time after receipt of such notice.

If any Event of Default occurs and is continuing with respect to a particular series of notes, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding notes of such series then outstanding, voting as a single class, may declare all notes of such series to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to Tesoro, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, all the notes will become due and payable without further action or notice. Holders of notes may not enforce the Indenture or the notes except as provided therein. Subject to certain limitations, the holders of a majority in aggregate principal amount of the then outstanding notes of a particular series may direct the trustee in its exercise of any trust or power with respect to such series. The trustee may withhold notice from holders of the notes of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest.

In the case of an Event of Default specified in clause (6) of the first paragraph under this caption, such Event of Default and all consequences thereof (excluding, however, any resulting payment default) will be annulled, waived and rescinded with respect to the notes, automatically and without any action by the trustee or the holders of such notes, if within 60 days after such Event of Default first arose Tesoro delivers an Officers’ Certificate to the trustee stating that (1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (2) the holders of the Indebtedness have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (3) the default that is the basis for such Event of Default has been cured; provided, however , that in no event shall an acceleration of the principal amount of the notes as described above be annulled, waived or rescinded upon the happening of any such events.

Subject to the provisions of the Indenture relating to the duties of the trustee, in case an Event of Default occurs and is continuing, the trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any holders of notes unless such holders have offered to the trustee indemnity or security reasonably satisfactory to the Trustee against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium, if any, or interest, if any, when due, no holder of a note may pursue any remedy with respect to the Indenture or the notes unless:

(1) such holder has previously given the trustee notice that an Event of Default is continuing;

(2) holders of at least 25% in aggregate principal amount of the then outstanding notes of such series have requested the trustee to pursue the remedy;

(3) such holders have offered the trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;

(4) the trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and

(5) holders of a majority in aggregate principal amount of the then outstanding notes of such series have not given the trustee a direction inconsistent with such request within such 60-day period.

The holders of a majority in aggregate principal amount of the outstanding notes of a particular series by notice to the trustee may on behalf of all holders of the notes of such series (1) waive any existing Default or Event of Default and its consequences under the Indenture as to such series, except a continuing Default or Event of Default in the payment of interest, if any, on, or the principal of or premium on, the notes of such series and (2) rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal or interest that has become due solely because of the acceleration) have been cured or waived.

Tesoro will be required to deliver to the trustee annually a statement regarding compliance with the Indenture and Tesoro will be required upon becoming aware of any Default or Event of Default under the Indenture to deliver to the trustee a statement specifying such Default or Event of Default.

Upon the occurrence of an Investment Grade Rating Event, clause (7) of the first paragraph under this caption will cease to apply to Tesoro and will no longer have effect.

No personal liability of directors, officers, employees, managers, incorporators, members, partners and stockholders

No director, officer, employee, manager, incorporator, member, partner or stockholder or other owner of Capital Stock of Tesoro or any of its Subsidiaries, as such, shall have any liability for any obligations of Tesoro or any Guarantor under the notes, the Subsidiary Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of a note by accepting the note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. Such waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the Commission that such a waiver is against public policy.

Legal defeasance and covenant defeasance

Tesoro may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding notes of a series and all obligations of the Guarantors discharged with respect to their Subsidiary Guarantees (“Legal Defeasance”) with respect to such series except for:

(1) the rights of holders of the outstanding notes of such series to receive payments in respect of the principal of, premium, if any, and interest on such notes when such payments are due (but not the Change of Control Payment or the payment pursuant to an Asset Sale Offer) from the trust referred to below;

(2) Tesoro’s obligations with respect to holders of notes of such series concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3) the rights, powers, trusts, duties and immunities of the trustee and Tesoro’s obligations in connection therewith; and

(4) the Legal Defeasance provisions of the Indenture.

In addition, Tesoro may, at its option and at any time, elect to have the obligations of Tesoro and the Guarantors released with respect to certain covenants (including its obligation to make Change of Control Offers and Asset Sale Offers) that are described in the related Indenture (“Covenant Defeasance”) and all Obligations of the Guarantor with respect to their Subsidiary Guarantee discharged, and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the notes of a particular series. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events relating to Tesoro) described above under “—Events of default and remedies” will no longer constitute an Event of Default with respect to such notes. If Tesoro exercises either its Legal Defeasance or Covenant Defeasance option with respect to a series of notes, each Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee of such series of notes and any security for such notes (other than the trust) will be released.

In order to exercise either Legal Defeasance or Covenant Defeasance as to a particular series of notes:

(1) Tesoro must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the applicable series of notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, and premium, if any, and interest on the outstanding notes of such series on the stated maturity or on the applicable redemption date, as the case may be, and Tesoro must specify whether the notes of such series are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, Tesoro shall have delivered to the trustee an opinion of counsel in the United States reasonably acceptable to the trustee confirming that (A) Tesoro has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the holders of the outstanding notes of such series will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, Tesoro shall have delivered to the trustee an opinion of counsel in the United States reasonably acceptable to the trustee confirming that the holders of the outstanding notes of such series will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default or Event of Default with respect to such series shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness or borrowing of funds or the grant of Liens securing

such Indebtedness or other borrowing, all or a portion of the proceeds of which will be applied to such deposit);

(5) such deposit will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the Indenture) to which Tesoro or any of its Restricted Subsidiaries is a party or by which Tesoro or any of its Restricted Subsidiaries is bound, or if such breach, violation or default would occur, which is not waived as of, and for all purposes, on and after, the date of such deposit;

(6) Tesoro must deliver to the trustee an officers’ certificate stating that the deposit was not made by Tesoro with the intent of preferring the holders of the notes over the other creditors of Tesoro with the intent of defeating, hindering, delaying or defrauding creditors of Tesoro or others; and

(7) Tesoro must deliver to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Satisfaction and discharge

The Indenture will be discharged and will cease to be of further effect as to all notes of a series issued thereunder when:

(a) either (1) all such notes theretofore authenticated and delivered (except lost, stolen or destroyed notes which have been replaced or paid and notes for whose payment money has been deposited in trust and thereafter repaid to Tesoro) have been delivered to the trustee for cancellation; or (2) all such notes not theretofore delivered to the trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise or will become due and payable within one year and Tesoro has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust solely for the benefit of the holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on such notes not theretofore delivered to the trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption;

(b) no Default or Event of Default with respect to the Indenture or the notes of such series shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other material instrument to which Tesoro or any Subsidiary Guarantor is a party or by which Tesoro or any Subsidiary Guarantor is bound;

(c) Tesoro or any Subsidiary Guarantor has paid or caused to be paid all sums due and payable by it with respect to such series under the Indenture; and

(d) Tesoro has delivered irrevocable instructions to the trustee under the Indenture to apply the deposited money toward the payment of the notes at maturity or on the redemption date, as the case may be.

In addition, Tesoro must deliver an officers’ certificate and an opinion of counsel (which opinion of counsel may be subject to customary assumptions and qualifications) to the trustee stating

that all conditions precedent to satisfaction and discharge set forth in clauses (b) and (d) above have been satisfied; provided that the opinion of counsel with respect to clause (b) above may be to the knowledge of such counsel.

Transfer and exchange

A holder may transfer or exchange notes in accordance with the Indenture. The registrar and the trustee may require such holder, among other things, to furnish appropriate endorsements and transfer documents and Tesoro may require such holder to pay any taxes and fees required by law or permitted by the Indenture. Tesoro is not required to transfer or exchange any notes selected for redemption. Also, Tesoro is not required to transfer or exchange any notes in respect of which a notice of redemption has been given for a period of 15 days before a selection of the notes to be redeemed. The registered holder of a note will be treated as the owner of it for all purposes.

Amendment, supplement and waiver

Except as provided in the next two succeeding paragraphs, the Indenture, the notes of any series or the Subsidiary Guarantees may be amended or supplemented with the consent of the holders of at least a majority in aggregate principal amount of the then outstanding notes of such series (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes of such series) and any existing Default, Event of Default or compliance with any provision of the Indenture or such notes or the related Subsidiary Guarantees may be waived with the consent of the holders of a majority in aggregate principal amount of the then outstanding notes of such series (including, without limitation, consents obtained in connection with a purchase of or tender offer or exchange offer for such notes).

Without the consent of each holder affected, an amendment, supplement or waiver may not (with respect to any notes of a particular series held by a non-consenting holder):

(1) reduce the principal amount of the notes of such series whose holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption of the notes (other than provisions relating to the covenants described above under the caption “—Repurchase at the option of holders”);

(3) reduce the rate of or change the time for payment of interest on any note;

(4) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest, on the notes (except a rescission of acceleration of the notes by the holders of at least a majority in aggregate principal amount of the then outstanding notes and a waiver of the payment default that resulted from such acceleration);

(5) make any note payable in currency other than that stated in such note;

(6) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of holders of notes to receive payments of principal of or premium, if any, or interest on notes (other than as permitted by clause (7) below);

(7) waive a redemption payment with respect to any note (other than a payment required by one of the covenants described above under the caption “—Repurchase at the option of holders”); or

(8) make any change in the foregoing amendment and waiver provisions.

Notwithstanding the foregoing, Tesoro and the trustee may without the consent of any holder thereof amend or supplement the Indenture, the notes or the Subsidiary Guarantees:

(1) to cure any ambiguity, defect or inconsistency;

(2) to provide for uncertificated notes in addition to or in place of certificated notes;

(3) to provide for the assumption of Tesoro’s or any Guarantor’s obligations to holders of the notes in the case of a merger or consolidation or sale of all or substantially all of Tesoro’s or such Guarantor’s assets, including the addition of any required co-issuer of the notes;

(4) to make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect the legal rights of any such holders under the Indenture;

(5) to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the TIA;

(6) to add any additional Guarantor or to release any Guarantor from its Subsidiary Guarantee or to evidence or provide for the acceptance of appointment of a successor trustee, in each case, as provided in the Indenture;

(7) to add any additional Events of Default;

(8) to secure the notes and/or the Subsidiary Guarantees;

(9) to conform the text of the Indenture, such notes or the Subsidiary Guarantees to any provision of this “Description of the notes” to the extent that such provision in this “Description of the notes” was intended to be a recitation of a provision of the Indenture, the notes or the Subsidiary Guarantees;

(10) to provide for the issuance of additional notes and related guarantees to the extent otherwise permitted to be incurred under the covenant described under “Certain covenants—Incurrence of indebtedness and issuance of disqualified equity”; and

(11) to comply with the rules of any applicable securities depository.

The consent of the holders of the notes is not necessary to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

Concerning the trustee

The Indenture will contain certain limitations on the rights of the trustee, should it become a creditor of Tesoro or any Guarantor, to obtain payment of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest (as defined in the Trust Indenture Act) it must eliminate such conflict within 90 days, apply to the Commission for permission to continue as trustee or resign.

The holders of a majority in aggregate principal amount of the then outstanding notes of such series will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The Indenture will

provide that if an Event of Default shall occur and be continuing, the trustee will be required, in the exercise of its power, to use the degree of care and skill of a prudent person in the conduct of his or her own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any holder of notes, unless such holder shall have offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense.

Governing law

The Indenture, the notes and the Subsidiary Guarantees will be governed by, and construed in accordance with, the laws of the State of New York.

Additional information

Anyone who receives this prospectus may obtain a copy of the Indenture without charge by writing to Tesoro Corporation at 19100 Ridgewood Parkway, San Antonio, Texas 78259-1828, Attention: General Counsel.

Certain definitions

Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terns, as well as any other capitalized terms used herein for which no definition is provided.

“ 2017 Notes Adjusted Treasury Rate ” means, with respect to any redemption date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities” for the maturity corresponding to the Comparable Treasury Issue with respect to the applicable notes called for redemption (if no maturity is within three months before or after , 2017, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the 2017 Notes Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the 2017 Notes Comparable Treasury Price for such redemption date, in each case calculated on the third business day immediately preceding the redemption date, plus, in the case of each of clause (i) and (ii), 0.50%.

“ 2017 Notes Comparable Treasury Issue ” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term from the redemption date to , 2017, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to , 2017.

“ 2017 Notes Comparable Treasury Price ” means, with respect to any redemption date, if clause (ii) of the 2017 Notes Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the applicable trustee, Reference Treasury Dealer Quotations for the redemption date.

“ 2022 Notes Adjusted Treasury Rate ” means, with respect to any redemption date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities” for the maturity corresponding to the Comparable Treasury Issue with respect to the applicable notes called for redemption (if no maturity is within three months before or after , 2017, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the 2022 Notes Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the 2022 Notes Comparable Treasury Price for such redemption date, in each case calculated on the third business day immediately preceding the redemption date, plus, in the case of each of clause (i) and (ii), 0.50%.

“ 2022 Notes Comparable Treasury Issue ” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term from the redemption date to , 2017, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to , 2017.

“ 2022 Notes Comparable Treasury Price ” means, with respect to any redemption date, if clause (ii) of the 2022 Notes Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the applicable trustee, Reference Treasury Dealer Quotations for the redemption date.

“ 6 ¹ / ₂ % Senior Notes “ means the 6 ¹ / ₂ % senior notes due 2017 issued pursuant to the 6 ¹ / ₂ % Senior Notes Indenture.

“ 6 ¹ / ₂ % Senior Notes Indenture “ means that certain indenture, dated as of May 29, 2007, by and among Tesoro, the guarantors party thereto and U.S. Bank National Association, as Trustee.

“ 6 ⁵ / ₈ % Senior Notes “ means the 6 ⁵ / ₈ % senior notes due 2015 issued pursuant to an indenture, dated as of November 16, 2005, by and among Tesoro, the guarantors party thereto and U.S. Bank National Association, as trustee.

“Acquired Debt” means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Restricted Subsidiary of such specified Person; and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person,

but excluding, in any event, Indebtedness that is extinguished, retired or repaid in connection with such Person merging with or becoming a Restricted Subsidiary of such specified Person.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

“ Applicable 2017 Notes Premium “ means, with respect to any 2017 Notes on any redemption date, the excess, if any, of (A) the present value at such redemption date of (i) the redemption price of such 2017 Note on , 2017, plus (ii) all required interest payments due on such 2017 Note through , 2017 (excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the 2017 Notes Adjusted Treasury Rate; over (B) the principal amount of such 2017 Note.

“ Applicable 2022 Notes Premium “ means, with respect to any 2022 Notes on any redemption date, the excess, if any, of (A) the present value at such redemption date of (i) the redemption price of such 2022 Note on , 2017 (such redemption price being set forth in the table appearing above under the caption “—Optional redemption—2022 Notes”), plus (ii) all required interest payments due on such 2022 Note through , 2017 (excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the 2022 Notes Adjusted Treasury Rate; over (B) the principal amount of such 2022 Note.

“ Applicable Premium ” means, with respect to the 2017 Notes, the Applicable 2017 Notes Premium, and with respect to the 2022 Notes, the Applicable 2022 Notes Premium.

“Asset Sale” means:

(1) the sale, lease, conveyance or other disposition of any assets or rights (including, without limitation, by way of a Sale/Leaseback Transaction) of Tesoro or any of its Restricted Subsidiaries other than in the ordinary course of business ( provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of Tesoro and its Restricted Subsidiaries taken as a whole will be governed by the covenants described above under the captions “—Repurchase at the option of holders—Change of control triggering event” and “—Certain covenants—Merger, consolidation or sale of assets” and not by the provisions of the covenant described above under the caption “—Repurchase at the option of holders—Asset sales”); and

(2) the issue or sale by Tesoro or any of its Restricted Subsidiaries of Equity Interests of any of Tesoro’s Restricted Subsidiaries,

in the case of either clause (1) or (2), whether in a single transaction or a series of related transactions, (a) that have a Fair Market Value in excess of $50 million or (b) for Net Proceeds in excess of $50 million; provided that the following will not be deemed to be Asset Sales:

(1) any sale or exchange of production of crude oil, natural gas and natural gas liquids, or refined products or residual hydrocarbons, or any other asset or right constituting inventory, made in the ordinary course of the Permitted Business;

(2) any disposition of assets in trade or exchange for assets of comparable Fair Market Value used or usable in any Permitted Business (including, without limitation, the trade or

exchange for a controlling interest in another business or all or substantially all of the assets or operating line of a business, in each case, engaged in a Permitted Business or for other non-current assets to be used in a Permitted Business, including, without limitation, assets or Investments of the nature or type described in clause (13) of the definition of “Permitted Investments”); provided that any cash or Cash Equivalents received by Tesoro or a Restricted Subsidiary in connection with such trade or exchange (net of any transaction costs of the type deducted under the definition of “Net Proceeds”) shall be treated as Net Proceeds of an Asset Sale and shall be applied in the manner set forth in the covenant described above under the caption “—Repurchase at the option of holders—Asset sales”;

(3) a transfer of assets by Tesoro to a Restricted Subsidiary of Tesoro or by a Restricted Subsidiary of Tesoro to Tesoro or to a Restricted Subsidiary of Tesoro;

(4) an issuance or sale of Equity Interests by a Restricted Subsidiary of Tesoro to Tesoro or to another Restricted Subsidiary of Tesoro;

(5) (A) a Permitted Investment or (B) a Restricted Payment that is permitted by the covenant described above under the caption “—Certain covenants—Restricted payments”;

(6) the trade, sale, exchange or other disposition of cash or Cash Equivalents or the unwinding of any Hedging Obligations;

(7) any sale, assignment, lease, license, transfer, abandonment or other disposition of (A) damaged, worn-out, unserviceable or other obsolete or excess equipment or other property or (B) other property no longer necessary for the proper conduct of the business of Tesoro or any of its Subsidiaries;

(8) the abandonment or relinquishment of assets or property in the ordinary course of business, including without limitation the abandonment, relinquishment or farm-out of oil and gas leases, concessions or drilling or exploration rights or interests therein;

(9) any lease of assets entered into in the ordinary course of business and with respect to which Tesoro or any Restricted Subsidiary of Tesoro is the lessor and the lessee has no option to purchase such assets for less than fair market value at any time the right to acquire such asset occurs;

(10) the disposition of assets received in settlement of debts accrued in the ordinary course of business;

(11) the creation or perfection of a Lien that is not prohibited by the Indenture and the disposition of any assets or rights resulting from the enforcement thereof;

(12) the surrender or waiver of contract rights or the settlement, release or surrender of contractual, non-contractual or other claims of any kind;

(13) any sale or other disposition pursuant to the Omnibus Agreement;

(14) the grant in the ordinary course of business of any non-exclusive license of patents, trademarks, registrations therefor and other similar intellectual property; and

(15) any sale or other disposition of Capital Stock in or Indebtedness of an Unrestricted Subsidiary.

“ Attributable Amount “ means, with respect to any Sale/Leaseback Transaction involving any Principal Property, as at the time of determination, the present value (discounted at the interest rate borne by the notes, compounded annually) of the total obligations of the lessee for rental payments (other than amounts required to be paid on account of property taxes, maintenance, repairs, insurance, assessments, utilities, operating and labor costs and other items that do not constitute payments for property rights) during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended), including, in the case of any lease that is terminable by the lessee upon payment of penalty, the amount of such penalty (but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated); provided, however , that the Attributable Amount of each of the following Sale/Leaseback Transactions involving a Principal Property shall, in each case, be zero:

(1) a Sale/Leaseback Transaction in which the lease is for a period, including renewal rights, not in excess of three years;

(2) a Sale/Leaseback Transaction in which the transfer of the Principal Property is made within 270 days of the acquisition or construction of, or the completion of a material improvement to, such Principal Property;

(3) a Sale/Leaseback Transaction in which the lease secures or relates to industrial revenue or pollution control bonds;

(4) a Sale/Leaseback Transaction in which the transaction is between or among Tesoro and one or more Restricted Subsidiaries or between or among Restricted Subsidiaries; or

(5) a Sale/Leaseback Transaction pursuant to which Tesoro, within 270 days after the completion of the transfer of the Principal Property, applies toward the retirement of its Indebtedness or the Indebtedness of a Restricted Subsidiary, or to the purchase of other property constituting a Principal Property, the net proceeds from the transfer of the Principal Property; provided, however , that the amount that must be applied to the retirement of Indebtedness shall be reduced by:

(a) the principal amount of any debentures, notes or debt securities (including the notes) of Tesoro or a Restricted Subsidiary surrendered to the applicable trustee or agent for retirement and cancellation within 270 days of the completion of the transfer of the Principal Property;

(b) the principal amount of any Indebtedness not included in clause (5)(a) of this definition to the extent such amount of Indebtedness is voluntarily retired by Tesoro or a Restricted Subsidiary within 270 days of the completion of the transfer of the Principal Property; and

“Board of Directors” means the Board of Directors of Tesoro or any committee thereof duly authorized to act on behalf of such Board.

“Borrowing Base” means, as of any date, an amount equal to:

(1) 90% of the face amount of all accounts receivable owned by Tesoro and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date that were not more than 90 days past due; plus

(2) 85% of the book value (before any reduction from current cost to LIFO cost) of all inventory owned by Tesoro and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date; plus

(3) 100% of the cash and Cash Equivalents owned by Tesoro and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date.

“Capital Lease Obligations” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty; provided that any obligations of Tesoro or its Restricted Subsidiaries, or of a special purpose or other entity not consolidated with Tesoro and its Restricted Subsidiaries (i) that were not or would not have been included on the consolidated balance sheet of Tesoro as capital lease obligations on the Issue Date and (ii) that are subsequently recharacterized as capital lease obligations or, in the case of such a special purpose or other entity becoming consolidated with Tesoro and its Restricted Subsidiaries, due to a change in accounting treatment or otherwise after the Issue Date, may, in Tesoro’s sole discretion, not be treated as a Capital Lease Obligations or Indebtedness.

“Capital Stock” means (1) in the case of a corporation, corporate stock; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

“Cash Equivalents” means:

(1) United States dollars, Canadian dollars and the Euro;

(2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than one year from the date of acquisition;

(3) certificates of deposit, time deposits and Eurodollar time deposits with maturities of not more than one year from the date of acquisition, bankers’ acceptances with maturities of not more than one year from the date of acquisition and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of $500 million and $100 million (or the U.S dollar equivalent as of the date of determination) in the case of non-U.S. banks;

(4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5) commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P with maturities of not more than one year from the date of acquisition;

(6) marketable short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case with maturities of not more than two years from the date of acquisition;

(7) investment funds investing 95% of their assets in securities of the types described in clauses (1) through (6) above and (8) through (10) below;

(8) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof having an Investment Grade Rating from either Moody’s or S&P with maturities of not more than two years from the date of acquisition;

(9) Indebtedness or preferred stock issued by Persons with a rating of “A” or higher from S&P or “A2” or higher from Moody’s with maturities of one year or less from the date of acquisition; and

(10) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clause (1) above, provided that such amounts are converted into any currency listed in clause (1) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.

“Change of Control” means the occurrence of one or more of the following events:

(1) any sale, lease or other transfer (in one transaction or a series of related transactions) other than by way of merger or consolidation, of all or substantially all of the assets of Tesoro and its Restricted Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d) of the Exchange Act) unless immediately following such sale, lease or other transfer in compliance with the Indenture such assets are owned, directly or indirectly, by (A) Tesoro or a Subsidiary of Tesoro or (B) a Person controlled by Tesoro or a Subsidiary of Tesoro;

(2) the approval by the holders of Capital Stock of Tesoro of any plan or proposal for the liquidation or dissolution of Tesoro;

(3) the acquisition in one or more transactions, of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of Voting Securities of Tesoro by any Person or Group that beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, at least a majority of the total voting power of Tesoro’s then outstanding Voting Stock;

provided , however that a transaction in which Tesoro becomes a Subsidiary of another Person (other than a Person that is an individual) shall not constitute a Change of Control if (a) the shareholders of Tesoro immediately prior to such transaction “beneficially own” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly through one or more intermediaries, at least a majority of the total voting power of the outstanding Voting Stock of such other Person, immediately following the consummation of such transaction and (b) immediately following the consummation of such transaction, no “person” (as such term is

defined above), other than such Person (but including the holders of the Equity Interests of such other Person), “beneficially owns” (as such term is defined above), directly or indirectly through one or more intermediaries, a majority of the total voting power of the outstanding Voting Stock of the Company.

Notwithstanding the foregoing, a Change of Control shall not be deemed to occur upon the consummation of any actions undertaken by Tesoro or any of its Restricted Subsidiaries solely for the purpose of changing the legal structure of Tesoro or such Restricted Subsidiary.

“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Rating Decline with respect to the notes.

“Commission” means the U.S. Securities and Exchange Commission.

“Commodity Hedging Agreements” means agreements or arrangements designed to protect such Person against fluctuations in the price of (1) crude oil, natural gas, or other hydrocarbons, including refined hydrocarbon products; (2) electricity and other sources of energy or power used in Tesoro’s refining or processing operations; or (3) any other commodity; in each case, in connection with the conduct of its business and not for speculative purposes.

“Commodity Hedging Obligations” means, with respect to any Person, the net payment Obligations of such Person under Commodity Hedging Agreements.

“ Comparable Treasury Issue ” means, with respect to the 2017 Notes, the 2017 Notes Comparable Treasury Issue, and with respect to the 2022 Notes, the 2022 Notes Comparable Treasury Issue.

“Consolidated Cash Flow” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period,

(1) increased (without duplication) by:

(a) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted (and not added back) in computing such Consolidated Net Income, plus

(b) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest expense, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net payments (if any) pursuant to Hedging Obligations (including amortization of fees)), to the extent that any such expense was deducted in computing such Consolidated Net Income, plus

(c) depreciation and amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation and amortization were deducted in computing such Consolidated Net Income, plus

(d) any other non-cash items (including without limitation write-downs and impairment of property, plant, equipment and intangibles and other long-lived assets

and the impact of purchase accounting, but excluding any such non-cash item to the extent that it represents an accrual of, or reserve for, cash expenditures in any future period), plus

(e) the amount of any restructuring charge or reserve or non-recurring integration costs deducted (and not added back) in such period computing Consolidated Net Income, including any one-time costs incurred in connection with acquisitions after the Issue Date and costs related to the closure and/or consolidation of facilities,

(2) decreased by (without duplication) non-cash gains increasing such Consolidated Net Income for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or a reserve for a potential cash item that reduced Consolidated Cash Flow in any prior period in each case, on a consolidated basis, and

(3) increased or decreased by (without duplication):

(a) any net gain or loss resulting in such period from Hedging Obligations and the application of Financial Accounting Standards Codification No. 815—Derivatives and Hedging, plus or minus , as applicable,

(b) any net gain or loss resulting in such period from currency translation gains or losses related to currency remeasurements of Indebtedness (including any net loss or gain resulting from hedge agreements for currency exchange risk and revaluations of intercompany balances).

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries (for such period, on a consolidated basis, determined in accordance with GAAP); provided , that

(1) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof;

(2) the Net Income of any Restricted Subsidiary that is not a Subsidiary Guarantor shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders;

(3) the cumulative effect of a change in accounting principles shall be excluded;

(4) any ceiling limitation writedowns under Commission guidelines shall be treated as capitalized costs, as if such writedown had not occurred;

(5) an amount equal to any extraordinary, unusual or non-recurring gains or losses, including, without limitation, any fees, expenses or charges related to any Permitted Investment, acquisition or disposition permitted by the Indenture, offering of Capital Stock or Indebtedness of such Person permitted to be Incurred under the Indenture (in each case, whether or not successful) but excluding any restructuring or similar charge, shall be excluded,

(6) any non-cash compensation expense realized for any grant of stock, stock options or other equity-based awards shall be excluded;

(7) non-cash gains and losses attributable to movement in the mark-to-market valuation of Hedging Obligations pursuant to Accounting Standards Codification No. 815, shall be excluded;

(8) any impairment charge or asset write-off pursuant to Accounting Standards Codification No. 350 and Accounting Standards Codification No. 360 shall be excluded;

(9) any gain or loss realized (less all fees and expenses or charges related thereto) upon the sale or other disposition of any property of such Person or any of its consolidated Subsidiaries (including pursuant to any Sale/Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of business, shall be excluded;

(10) any net income (loss) of any other Person acquired during the specified period for any period prior to the date of such acquisition, shall be excluded; and

(11) any net after-tax income or loss (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness, including, without limitation, any make-whole premium or similar charge related to any Indebtedness being refinanced, shall be excluded.

“Consolidated Net Tangible Assets” , with respect to any Person at any date of determination, the aggregate amount of total assets included in such Person’s most recent fiscal quarter for which internal financial statements are available, determined on a pro forma basis in a manner consistent with the pro forma basis contained in the definition of “Fixed Charge Coverage Ratio,” less (a) all current liabilities reflected in such balance sheet, and (b) all goodwill, trademarks, patents, unamortized debt discounts and expenses and other like intangibles reflected in such balance sheet.

“ Consolidated Net Worth “ means the total of the amounts shown on a Person’s consolidated balance sheet determined in accordance with GAAP, as of the end of such Person’s most recent fiscal quarter for which internal financial statements are available prior to the taking of any action for the purpose of which the determination is being made, as the sum of (1) the par or stated value of all of such Person’s outstanding Capital Stock, (2) paid-in capital or capital surplus relating to such Capital Stock and (3) any retained earnings or earned surplus less (A) any accumulated deficit and (B) any amounts attributable to Disqualified Equity.

“Credit Facilities” means, with respect to Tesoro or any of its Restricted Subsidiaries, one or more debt facilities (including, without limitation, the Senior Credit Facility), commercial paper facilities, indentures or Debt Issuances with banks, investment banks, insurance companies, mutual funds, other institutional lenders, institutional investors or any of the foregoing providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders, other financiers or to special purpose entities formed to borrow from (or sell such receivables to) such lenders or other financiers against such receivables), letters of credit, bankers’ acceptances, other borrowings or Debt Issuances, in each case, as amended, restated, modified, renewed, extended, refunded, replaced or refinanced (in each case, without limitation as to amount), in whole or in part, from time to time (including through one or more Debt Issuances) and any agreements and related documents governing Indebtedness or Obligations incurred to refinance amounts then outstanding or permitted to be outstanding,

whether or not with the original administrative agent, lenders, investment banks, insurance companies, mutual funds, other institutional lenders, institutional investors or any of the foregoing and whether provided under the original agreement, indenture or other documentation relating thereto).

“ Currency Exchange Protection Obligations ” mean, in respect of a Person, any foreign exchange contract, currency swap agreement, currency option or other similar agreement or arrangement designed to protect such Person against fluctuations in currency exchange rates.

“Debt Issuances” means, with respect to Tesoro or any Restricted Subsidiary, one or more issuances after the Issue Date of Indebtedness evidenced by notes, debentures, bonds or other similar securities or instruments.

“Default” means any event that is or with the passage of time or the giving of notice (or both) would be an Event of Default.

“Designated Non-cash Consideration” means, the fair market value of non-cash consideration received by Tesoro or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an officers’ certificate, setting forth the basis of such valuation, executed by the principal financial officer of Tesoro, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

“ Designated Proceeds “ means the amount of net cash proceeds received by Tesoro from each issuance or sale since the Issue Date of mandatorily convertible preferred stock of Tesoro (other than Disqualified Equity), that at the time of such issuance was designated by Tesoro as Designated Proceeds pursuant to an officer’s certificate delivered to the trustee; provided, however , that if the mandatorily convertible preferred stock providing such Designated Proceeds is thereafter converted into common stock of Tesoro, that portion of the Designated Proceeds that has not been paid as dividends pursuant to clause (9) of the second paragraph of the covenant described above under “Certain covenants—Restricted payments” will no longer be considered to be Designated Proceeds.

“Disqualified Equity” means, with respect to any person, any Equity Interest that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Equity Interest), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Equity Interest, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature, except such Equity Interest that is solely redeemable with, or solely exchangeable for, any Equity Interest of such Person that is not Disqualified Equity.

Notwithstanding the preceding paragraph, any Capital Stock that would constitute Disqualified Equity solely because the holders thereof have the right to require Tesoro or any of its Restricted Subsidiaries to repurchase Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Equity if the terms of such Capital Stock provide that Tesoro or such Restricted Subsidiary may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption “—Certain covenants—Restricted payments.”

“Domestic Subsidiary” means any Restricted Subsidiary of Tesoro formed under the laws of the United States or any state of the United States or the District of Columbia.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Equity Offering” means any public or private sale of Equity Interests of Tesoro (other than Disqualified Equity) made for cash after the Issue Date.

“Existing Indebtedness” means the aggregate amount of Indebtedness of Tesoro and its Restricted Subsidiaries outstanding on the Issue Date.

“Existing Senior Notes” means Tesoro’s 6 ⁵ / ₈ % senior notes due 2015 ($450 million aggregate principal amount outstanding), 6 ¹ / ₂ % senior notes due 2017 ($473 million aggregate principal amount outstanding) and 9 ³ / ₄ % senior notes due 2019 ($300 million aggregate principal amount outstanding).

“Fair Market Value” means, with respect to consideration received or to be received, or given or to be given, pursuant to any transaction by Tesoro or any Restricted Subsidiary, the fair market value of such consideration as determined by Tesoro, whose determination shall be conclusive; provided if such fair market value is determined to exceed $150 million, such fair market value shall be as determined in good faith by the Board of Directors of Tesoro.

“Financial Hedging Agreements” means (1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (2) other agreements or arrangements designed to protect such Person against fluctuations in interest rates, currency exchange rates or commodity prices and not for speculative purposes.

“Financial Hedging Obligations” means, with respect to any Person, the net payment Obligations of such Person under Financial Hedging Agreements.

“ Fixed Charge Coverage Ratio “ means, with respect to any Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than revolving borrowings under any Credit Facility) or issues, repurchases or redeems Disqualified Equity subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of Disqualified Equity and the use of proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period. In addition, for purposes of making the computation referred to above:

(1) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers, asset purchase transactions or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be given pro forma effect as if they had occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated giving pro forma effect to any expense and cost reductions that have occurred or, in the reasonable judgment

of the chief financial officer or chief accounting officer of Tesoro, are reasonably expected to occur (regardless of whether those operating improvements or cost savings could then be reflected in pro forma financial statements prepared in accordance with Regulation S-X promulgated by the Commission or any regulation or policy related thereto);

(2) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded;

(3) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the referent Person or any of its Restricted Subsidiaries following the Calculation Date;

(4) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the average rate for the applicable period to the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months); and

(5) interest on Indebtedness under a revolving credit facility computed on a pro forma basis shall be calculated based on the average daily balance of such Indebtedness for the four fiscal quarters subject to the pro forma calculation, except as set forth in the first paragraph of this definition.

“Fixed Charges” means, with respect to any Person for any period, (a) the sum, without duplication, of

(1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation or duplication, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of the effect of all payments (if any) made or received pursuant to Hedging Obligations); plus

(2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; plus

(3) any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries (whether or not such guarantee or Lien is called upon); plus

(4) all dividend payments, whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividend payments on Equity Interests payable solely in Equity Interests of Tesoro (other than Disqualified Equity) or to Tesoro or a Restricted Subsidiary of Tesoro, minus

(b) to the extent included in (a) above, write-off of deferred financing costs of such Person and its Restricted Subsidiaries during such period and any charge related to, or any premium or penalty paid in connection with, paying any such Indebtedness of such Person and its Restricted Subsidiaries prior to its Stated Maturity.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time.

“Government Securities” means securities that are:

(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or

(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in either case, are not callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such Government Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.

“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof or pledging assets to secure), of all or any part of any Indebtedness.

“Guarantors” means:

(1) each of Gold Star Maritime Company, Smiley’s Super Service, Inc., Tesoro Alaska Company, Tesoro Aviation Company, Tesoro Companies, Inc., Tesoro Environmental Resources Company, Tesoro Far East Maritime Company, Tesoro Hawaii, LLC, Tesoro Maritime Company, Tesoro Northstore Company, Tesoro Refining and Marketing Company, Tesoro Trading Company, Tesoro Wasatch, LLC, Tesoro Sierra Properties, LLC, Tesoro South Coast Company, LLC and Tesoro West Coast Company, LLC;

(2) each of Tesoro’s Restricted Subsidiaries that becomes a guarantor of the notes pursuant to the covenant described above under “—Certain covenants—Additional subsidiary guarantees”; and

(3) each of Tesoro’s Restricted Subsidiaries executing a supplemental indenture in which such Restricted Subsidiary agrees to be bound by the terms of the Indenture; provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Subsidiary Guarantee is released in accordance with the terms thereof.

“Hedging Obligations” means, with respect to any Person, collectively, the Commodity Hedging Obligations of such Person, the Currency Exchange Protection Obligations of such Person and the Financial Hedging Obligations of such Person.

“Indebtedness” means, with respect to any Person, without duplication,

(1) the principal of and premium, if any, with respect to indebtedness of such Person for borrowed money or evidenced by bonds, notes, debentures or similar instruments;

(2) reimbursement obligations of such Person for letters of credit or banker’s acceptances;

(3) Capital Lease Obligations of such Person;

(4) obligations of such Person for the payment of the balance deferred and unpaid of the purchase price of any property except any such balance that constitutes (a) an accrued expense, (b) a trade payable or (c) an earn-out obligation until, after 30 days of becoming due and payable, such earn-out obligation has not been paid and becomes a liability on the balance sheet of such Person in accordance with GAAP;

(5) Hedging Obligations (the amount of which at any time of determination shall be equal to the termination value of such agreement or arrangement giving rise to such Hedging Obligation that would be payable at such time); or

(6) preferred stock of a Restricted Subsidiary that is not a Subsidiary Guarantor (but excluding, in each case, any accrued dividends).

In the case of the foregoing clauses (1) through (5) if and to the extent any of the foregoing obligations or indebtedness (other than letters of credit, banker’s acceptances and Hedging Obligations), but excluding amounts recorded in accordance with Accounting Standards Codification No. 815, would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP. In the case of clause (6), the amount of Indebtedness attributable to such preferred stock shall be the repurchase price calculated in accordance with the terms of such preferred stock as if the preferred stock were repurchased on the date on which Indebtedness is required to be determined pursuant to the Indenture; provided that if the preferred stock is not then permitted to be repurchased, the amount of Indebtedness shall be the greater of the liquidation preference and the book value of the preferred stock.

In addition, the term “Indebtedness” includes, without duplication:

(A) obligations or indebtedness of others of the type referred to in the foregoing clauses (1) through (6) that are secured by a Lien on any asset of such Person (whether or not such Indebtedness is assumed by such Person), but in an amount not to exceed the lesser of the amount of such other Person’s obligation or indebtedness or the Fair Market Value of such asset; and

(B) to the extent not otherwise included, the guarantee by such Person of any obligations or indebtedness of others of the type referred to in the foregoing clauses (1) through (6), whether or not such guarantee is contingent, and whether or not such guarantee appears on the balance sheet of such Person.

“Independent Financial Advisor” means a nationally recognized accounting, appraisal or investment banking firm that is, in the reasonable judgment of the Board of Directors, qualified to perform the task for which such firm has been engaged hereunder and disinterested and independent with respect to Tesoro and its Affiliates; provided , that providing accounting, appraisal or investment banking services to Tesoro or any of its Affiliates or having an employee,

officer or other representative serving as a member of the Board of Directors of Tesoro or any of its Affiliates will not disqualify any firm from being an Independent Financial Advisor.

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s or BBB- (or the equivalent) by S&P.

“Investment Grade Rating Event” means the first day on which the notes are assigned an Investment Grade Rating by a Rating Agency and no Default or Event of Default has occurred and is continuing.

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other Obligations), advances (other than advances to customers in the ordinary course of business which are recorded as accounts receivable on the balance sheet of the lender and commissions, moving, travel and similar advances to employees and officers made in the ordinary course of business) or capital contributions, purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.

“ Issue Date “ means the first date on which the notes are issued, authenticated and delivered under the Indenture.

“Joint Venture” means any Person that is not a direct or indirect Subsidiary of Tesoro in which Tesoro or any of its Restricted Subsidiaries makes any Investment.

“Leverage Ratio” means, with respect to any Person as of any date of determination, the ratio of (x) the total consolidated Indebtedness for borrowed money of such Person and its Restricted Subsidiaries (excluding, for the avoidance of doubt, Hedging Obligations) as of the end of the most recent fiscal quarter for which internal financial statements are available, which would be reflected as a liability on a consolidated balance sheet of such Person and its Restricted Subsidiaries prepared as of such date in accordance with GAAP, to (y) the aggregate amount of Consolidated Cash Flow of such Person for the then most recent four fiscal quarters for which internal financial statements are available, in each case with such pro forma adjustments to the amount of consolidated Indebtedness and Consolidated Cash Flow as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in any asset and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction) other than a precautionary financing statement respecting a lease not intended as a security agreement. In no event shall a right of first refusal be deemed to constitute a Lien.

“MLP Parties” means, collectively, Tesoro Logistics GP, LLC, Tesoro Logistics LP and each of their respective Subsidiaries.

“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends.

“Net Proceeds” means he aggregate cash proceeds or Cash Equivalents received by Tesoro or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (i) the direct costs relating to such Asset Sale (including, without limitation, legal, accounting, investment banking and brokers fees, sales and underwriting commissions and other reasonable costs incurred in preparing such asset for sale), any relocation expenses incurred as a result thereof and any related severance and associated costs, expenses and charges of personnel related to the sold assets and related operations, (ii) taxes paid or reserved as payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), (iii) distributions and payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Sale, (iv) amounts paid in order to satisfy any Lien attaching to an asset in connection with such Asset Sale and (v) any amounts to be set aside in any reserve established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such properties or assets or for liabilities associated with such Asset Sale and retained by Tesoro or any of its Restricted Subsidiaries until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reversed or the amount returned to Tesoro or its Restricted Subsidiaries from such escrow arrangement, as the case may be.

“Non-Recourse Indebtedness” means Indebtedness:

(1) as to which neither Tesoro nor any of its Restricted Subsidiaries, (a) provides any guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor or otherwise), in each case, other than a pledge of the Equity Interest of such Unrestricted Subsidiary that is the obligor of such Indebtedness;

(2) the incurrence of which will not result in any recourse against any of the assets of Tesoro or its Restricted Subsidiaries (other than a pledge of the Equity Interest of such Unrestricted Subsidiary that is the obligor of such Indebtedness); and

(3) no default with respect to which would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of Tesoro or any of its Restricted Subsidiaries to declare pursuant to the express terms governing such Indebtedness a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity.

“Obligations” means any principal, premium (if any), interest and interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Tesoro or its Restricted Subsidiaries whether or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement obligations, damages, guarantees (including the Subsidiary Guarantees) and other liabilities or amounts payable under the documentation governing any Indebtedness or in respect thereof.

“Omnibus Agreement” means the Amended and Restated Omnibus Agreement, dated as of April 1, 2012, among Tesoro Corporation, Tesoro Refining and Marketing Company, Tesoro Companies, Inc., Tesoro Alaska Company, Tesoro Logistics LP and Tesoro Logistics GP, LLC, and as

may be amended, supplemented or modified ; provided such amendment, supplement or modification is not disadvantageous in any material respect to the holders of notes when taken as a whole as compared to the Omnibus Agreement as in effect on the Issue Date, as determined in good faith by Tesoro.

“Permitted Acquisition Indebtedness” means Indebtedness or Disqualified Equity of Tesoro or any of its Restricted Subsidiaries to the extent such Indebtedness or Disqualified Equity (A) incurred to finance an acquisition or (B) was Indebtedness or Disqualified Equity of (i) a Person prior to the date on which such Subsidiary became a Restricted Subsidiary or (ii) a Person that merged with or consolidated into Tesoro or a Restricted Subsidiary; provided that on the date of such incurrence, after giving pro forma effect thereto, (a) Tesoro would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under “—Certain covenants—Incurrence of indebtedness and issuance of disqualified equity”, (b) the Fixed Charge Coverage Ratio for Tesoro would be greater than the Fixed Charge Coverage Ratio for Tesoro immediately prior to such transaction, or (c) the Consolidated Net Worth of Tesoro would be greater than the Consolidated Net Worth of Tesoro immediately prior to such transaction.

“Permitted Business” means, with respect to Tesoro and its Restricted Subsidiaries, the businesses of:

(1) the acquisition, development, operation and disposition of interests in oil, gas and other hydrocarbon properties;

(2) the acquisition, gathering, treating, processing, storage and transportation of production from such interests or properties and related logistics activities;

(3) the acquisition, processing, marketing, refining, distilling, storage and/or transportation of hydrocarbons and/or royalty or other interests in crude oil or refined or associated products related thereto;

(4) the acquisition, operation, improvement, leasing and other use of convenience stores, retail service stations, truck stops and other public accommodations in connection therewith;

(5) the marketing and distribution of petroleum and marine products and the provision of logistical services to marine and offshore exploration and production industries;

(6) any business engaged in by Tesoro or its Restricted Subsidiaries on the Issue Date;

(7) any other business that generates gross income at least 90% of which constitutes “qualifying income” under Section 7704(d) of the Code; and

(8) any activity or business that is a reasonable extension, development or expansion of, or reasonably related to, any of the foregoing.

“Permitted Investments” means:

(1) any Investment in Tesoro or in a Restricted Subsidiary of Tesoro;

(2) any Investment in (a) cash or Cash Equivalents or (b) deposit accounts maintained in the ordinary course of business;

(3) any Investment by Tesoro or any Restricted Subsidiary of Tesoro in a Person, if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary of Tesoro; or

(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, Tesoro or a Restricted Subsidiary of Tesoro;

(4) any security or other Investment received or Investment made as a result of the receipt of non-cash consideration from:

(a) an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “—Repurchase at the option of holders—Asset sales”;

(b) a disposition of assets that does not constitute an Asset Sale; or

(5) any acquisition of assets or any Investment in any Person solely in exchange for the issuance of Equity Interests (other than Disqualified Equity) of Tesoro;

(6) any Investment received in settlement of debts, claims or disputes owed to Tesoro or any Restricted Subsidiary of Tesoro that arose out of transactions in the ordinary course of business;

(7) any Investment received in connection with or as a result of a bankruptcy, workout or reorganization of any Person;

(8) advances and extensions of credit in the nature of accounts receivable arising from the sale or lease of goods or services or the licensing of property in the ordinary course of business;

(9) relocation allowances for, and advances and loans to, employees, officers and directors (including, without limitation, loans and advances the net cash proceeds of which are used solely to purchase Equity Interests of Tesoro in connection with restricted stock or employee stock purchase plans, or to exercise stock received pursuant thereto or other incentive plans in a principal amount not to exceed the aggregate exercise or purchase price), or loans to refinance principal and accrued interest on any such loans, provided that the aggregate principal amount of such loans, advances and allowances shall not exceed at any time $20 million;

(10) other Investments by Tesoro or any Restricted Subsidiary of Tesoro in any Person having an aggregate Fair Market Value (measured as of the date each such Investment is made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (10) (net of returns of capital, dividends and interest paid on Investments and sales, liquidations and redemptions of Investments), at any time outstanding equal to the greater of (i) $350 million and (ii) 5% of Consolidated Tangible Net Assets;

(11) Investments in the form of intercompany Indebtedness or guarantees of Indebtedness of a Restricted Subsidiary of Tesoro permitted under clauses (5) and (10) of the covenant described above under the caption “—Certain covenants—Incurrence of indebtedness and issuance of disqualified equity”;

(12) Investments arising in connection with Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing or hedging currency, commodity or interest rate risk in connection with the conduct of the business of Tesoro and its Subsidiaries and not for speculative purposes;

(13) Investments in the form of, or pursuant to, operating agreements, joint ventures, partnership agreements, working interests, royalty interests, mineral leases, processing agreements, farm-out agreements, contracts for the sale, transportation or exchange of oil and natural gas, unitization agreements, pooling agreements, area of mutual interests agreements, production sharing agreements or other similar or customary agreements, transactions, properties, interests or arrangements, and investments and expenditures in connection therewith or pursuant thereto, in each case, made or entered into the ordinary course of the business described in clauses (1) and (2) of the definition of “Permitted Business” excluding, however, investments in corporations;

(14) any Investments in prepaid expenses, negotiable instruments held for collection and lease, utility, worker’s compensation, performance and other similar deposits and prepaid expenses made in the ordinary course of business;

(15) Investments pursuant to agreements and obligations of Tesoro and any Restricted Subsidiary in effect on the 6 ¹ / ₂ % Senior Notes Issue Date and any renewals or replacements thereof on terms and conditions not materially less favorable to Tesoro or such Restricted Subsidiary, as the case may be, than the terms of the Investment being renewed or replaced;

(16) any Investments received in compromise or resolution of (a) obligations of trade creditors or customers that were incurred in the ordinary course of business, including pursuant to a plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer, or as a result of a foreclosure by Tesoro or any of its Restricted Subsidiaries with respect to any secured Investment in default or (b) litigation, arbitration or other disputes with Persons who are not Affiliates;

(17) Investments in any MLP Party in the form of debt instruments or Equity Interests issued by such MLP Party that are received in consideration for non-core refining assets of Tesoro or any of its Restricted Subsidiaries in compliance with the covenant described under “Repurchase at the option of holders—Asset sales”; provided that Fair Market Value is received by Tesoro and its Restricted Subsidiaries in consideration for such assets; and

(18) Investments (i) to maintain a 2% general partnership interest in any MLP Party or (ii) in order to purchase additional limited partnership interests in any MLP Party and/or to provide funding to one or more MLP Parties for acquisitions of master limited partnership qualifying assets or capital expenditures in an aggregate amount not to exceed $150 million outstanding at any one time;

provided, however , that with respect to any Investment, Tesoro may, in its sole discretion, allocate all or any portion of any Investment and later re-allocate all or any portion of any Investment to one or more of the above clauses (1) through (18) so that the entire Investment would be a Permitted Investment.

“Permitted Liens” means:

(1) Liens securing Indebtedness incurred under Credit Facilities pursuant to the covenant described above under the caption “—Certain covenants—Incurrence of indebtedness and issuance of disqualified equity” and all Obligations and Hedging Obligations relating to such Indebtedness;

(2) Liens other than Liens permitted by clause (1) of this definition of “Permitted Liens” granted in favor of Tesoro or the Guarantors;

(3) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (6) or (11) of the second paragraph of the covenant described above under the caption “—Certain covenants—Incurrence of indebtedness and issuance of disqualified equity” covering only the assets acquired, constructed, improved or developed with, or secured by, such Indebtedness;

(4) Liens existing on the Issue Date;

(5) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings diligently pursued, provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

(6) Liens existing upon the occurrence of an Investment Grade Rating Event;

(7) Liens on the Retail Properties;

(8) carriers’, warehousemen’s, mechanics’, materialmen’s, landlord’s, repairman’s or other like Liens arising in the ordinary course of business;

(9) pledges or deposits in connection with workers’ compensation, unemployment insurance, statutory obligations and other types of social security;

(10) deposits to secure the performance of bids, trade contracts (other than for borrowed money), reimbursement obligations owed to insurers, leases, surety and appeal bonds, bids, performance bonds and other obligations of a like nature incurred in the ordinary course of business (including Liens to secure letters of credit issued to assure payment of such obligations);

(11) easements, rights of way, survey exceptions, reservations of, or rights of others for, licenses, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, do not materially interfere with the ordinary conduct of the business of Tesoro or any of its Subsidiaries;

(12) any interest or title of a lessor under any lease entered into by Tesoro or any of its Subsidiaries in the ordinary course of its business and covering only the assets so leased;

(13) any Lien securing Indebtedness, neither assumed nor guaranteed by Tesoro or any of its Subsidiaries nor on which it customarily pays interest, existing upon real estate or rights in or relating to real estate acquired by Tesoro for substation, metering station, pump station, storage, gathering line, transmission line, transportation line, distribution line or for right-of-way purposes, any Liens reserved in leases for rent and for compliance with the terms of the leases in the case of leasehold estates, to the extent that any such Lien referred to in this clause (13) does not materially impair the use of the property covered by such Lien for the purposes of which such property is held by Tesoro or any of its Subsidiaries;

(14) inchoate Liens arising under ERISA;

(15) any obligations or duties affecting any of the property of Tesoro or its Subsidiaries to any municipality or public authority with respect to any franchise, grant, license or permit which do not materially impair the use of such property for the purposes for which it is held;

(16) defects, irregularities and deficiencies in title of any rights of way or other property of Tesoro or any of its Subsidiaries which, in the aggregate, do not materially impair the use

of such rights of way or other property for the purposes for which such rights of way and other property are held by Tesoro or any of its Subsidiaries and defects, irregularities and deficiencies in title to any property of Tesoro or any of its Subsidiaries, which defects, irregularities or deficiencies have been cured by possession under applicable statutes of limitation;

(17) Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of Tesoro or any of its Subsidiaries on deposit with or in possession of such bank;

(18) Liens to secure obligations of Tesoro and its Subsidiaries in respect of Commodity Hedging Agreements and Financial Hedging Agreements, in each case not entered into for speculative purposes, and Liens with respect to hedging accounts maintained with dealers of NYMEX or similar contracts which require the maintenance of cash margin account balances;

(19) Liens on property of a Person existing at the time (a) such Person is merged with or into or consolidated with Tesoro or any Restricted Subsidiary (b) such Person becomes a Restricted Subsidiary or (c) such property is otherwise acquired by Tesoro or a Restricted Subsidiary; provided , that such Liens were in existence prior to the contemplation of such merger, consolidation or other acquisition and do not extend to any assets other than those of the Person merged into or consolidated with Tesoro or the Restricted Subsidiary in the case of a merger or consolidation pursuant to clause (a) or such property in the case of such other acquisition in the case of clause (b) or (c);

(20) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under the Indenture; provided that (a) the new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof) and (b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;

(21) Liens upon specific items of inventory, accounts receivables or other goods and proceeds of Tesoro or any Restricted Subsidiary securing such Person’s obligations in respect of banker’s acceptances or receivables securitizations issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory, accounts receivables or other goods and proceeds and, if incurred prior to an Investment Grade Rating Event, permitted by the covenant described above under the caption “—Certain covenants—Incurrence of indebtedness and issuance of disqualified equity”;

(22) any Lien resulting from the deposit of money or other Cash Equivalents or other evidence of indebtedness in trust for the purpose of defeasing Indebtedness of Tesoro or any Restricted Subsidiary;

(23) any Liens securing industrial development, pollution control or similar bonds;

(24) Liens incurred by Tesoro or any Subsidiary of Tesoro with respect to obligations that at any one time outstanding do not exceed the greater of (a) $175 million or 2.5% of Consolidated Net Tangible Assets;

(25) Liens securing Non-Recourse Debt;

(26) Liens arising by reason of deposits necessary to obtain standby letters of credit in the ordinary course of business; and

(27) Liens relating to future escrow arrangements securing Indebtedness incurred in accordance with the Indenture.

“Permitted Refinancing Indebtedness” means any Indebtedness of Tesoro or any of its Restricted Subsidiaries, or portion of such Indebtedness, issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of Tesoro or any of its Restricted Subsidiaries (other than intercompany Indebtedness), including Indebtedness that extends, refinances, renews, replaces, defeases or refunds Permitted Refinancing Indebtedness, provided that:

(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued and unpaid interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus fees and expenses incurred in connection therewith, including any premium or defeasance cost);

(2) such Permitted Refinancing Indebtedness has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

(4) such Indebtedness is incurred either by Tesoro or a Subsidiary Guarantor of Tesoro or a Subsidiary Guarantor who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

Notwithstanding the foregoing, any Indebtedness incurred under Credit Facilities pursuant to the covenant described above under the caption “—Certain covenants—Incurrence of indebtedness and issuance of disqualified equity” shall be subject to the refinancing provisions of the definition of “Credit Facilities” and not pursuant to the requirements set forth in this definition of Permitted Refinancing Indebtedness.

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

“Principal Property” means any refinery and any related core refining asset having a Fair Market Value in excess of $250 million (unless the Board of Directors determines that any such property is not material to Tesoro and its subsidiaries taken as a whole), owned by Tesoro or any of its Restricted Subsidiaries.

“ Quotation Agent “ means the Reference Treasury Dealer selected by the applicable trustee after consultation with Tesoro.

“Rating Agency” means each of S&P and Moody’s, or if S&P or Moody’s or both shall not make a rating on the notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by Tesoro (as certified by a resolution of the Board of Directors) which shall be substituted for S&P or Moody’s, or both, as the case may be.

“Rating Decline” means the occurrence of a decrease in the rating of the notes by one or more gradations by either Moody’s or S&P (including gradations within the rating categories, as well as between categories), within 90 days before or after the earlier of (x) a Change of Control, (y) the date of public notice of the occurrence of a Change of Control or (z) public notice of the intention of Tesoro to effect a Change of Control (which 90-day period shall be extended so long as the rating of the notes is under publicly announced consideration for possible downgrade by either Moody’s or S&P).

“ Reference Treasury Dealer “ means any three nationally recognized investment banking firms selected by Tesoro that are primary dealers of Government Securities.

“ Reference Treasury Dealer Quotations ” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue with respect to the notes, expressed in each case as a percentage of its principal amount, quoted in writing to the trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day immediately preceding the redemption date.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Subsidiary” of a Person means any Subsidiary of the referenced Person that is not an Unrestricted Subsidiary or a direct or indirect Subsidiary of an Unrestricted Subsidiary; provided that, on the Issue Date, all Subsidiaries of Tesoro shall be Restricted Subsidiaries of Tesoro other than Tesoro Logistics LP and Tesoro Logistics GP, LLC and each of their respective subsidiaries.

“Retail Properties” means all assets directly related to the retail sale of gasoline and diesel fuel in retail markets in the mid-continental and western United States (including Alaska), including, without limitation, all related gas stations, convenience stores, merchandise items, tow trucks, auto maintenance facilities, oil change facilities, and car washes; provided that such assets will not include any assets relating to the sale of petroleum products in bulk and wholesale markets.

“S&P” means Standard & Poor’s Ratings Group, Inc., or any successor to the rating agency business thereof.

“Sale/Leaseback Transaction” means an arrangement relating to property or assets owned by Tesoro or a Restricted Subsidiary on the Issue Date or thereafter acquired by Tesoro or a Restricted Subsidiary whereby Tesoro or a Restricted Subsidiary transfers such property or assets to a Person (other than Tesoro or a Restricted Subsidiary) and Tesoro or a Restricted Subsidiary leases such property or assets from such Person.

“Senior Credit Facility” means that certain Fifth Amended and Restated Credit Agreement, dated as of March 16, 2011, as amended, supplemented or amended and restated from time to time, among Tesoro, JPMorgan Chase Bank, National Association, as Administrative Agent, and the financial institutions from time to time party thereto, and including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith.

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“Senior Indebtedness” means, with respect to any Person, (A) all Indebtedness of such Person, whether outstanding on the Issue Date or thereafter created, incurred or assumed and (B) all other Obligations of such Person (including fees, charges, expenses, reimbursement obligations and other amounts payable in respect thereof and any interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to such Person whether or not a claim for post-filing interest is allowed in such proceeding) in respect of Indebtedness described in clause (A) above, unless, in the case of clauses (A) and (B), in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such Indebtedness or other obligations are subordinate in right of payment to the notes or any Subsidiary Guarantee; provided, however , that Senior Indebtedness shall not include:

(1) any obligation of such Person to Tesoro or any Subsidiary of Tesoro;

(2) any liability for Federal, state, foreign, local or other taxes owed or owing by such Person;

(3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities);

(4) any Indebtedness or other Obligation of such Person that is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person;

(5) the portion of any Indebtedness which at the time of incurrence is incurred in violation of the Indenture; and

(6) any Capital Stock.

“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date.

“Stated Maturity” means, with respect to any installment of interest or principal, or sinking fund or mandatory redemption of principal, on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid or made, as applicable, in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof

“Subordinated Obligation” means any Indebtedness of Tesoro (whether outstanding on the Issue Date or thereafter incurred) which pursuant to a written agreement is subordinate or junior in right of payment to the notes and any Indebtedness of a Guarantor (whether outstanding on the Issue Date or thereafter incurred) which pursuant to a written agreement is subordinate or junior in right of payment to its Subsidiary Guarantee.

“Subsidiary” means, with respect to any Person,

(1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person; and

(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or an entity described in clause (1) and related to such Person or (b) the

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only general partners of which are such Person or of one or more entities described in clause (1) and related to such Person (or any combination thereof).

“Subsidiary Guarantee” means the guarantee of the notes by each of the Guarantors pursuant to the Indenture and any additional guarantee of the notes to be executed by any Domestic Subsidiary of Tesoro pursuant to the covenant described above under the caption “—Certain covenants—Additional subsidiary guarantees.”

“ Synthetic Lease Obligation ” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment)

“Unrestricted Subsidiary” means: (1) any Subsidiary of Tesoro (including any newly acquired or newly formed Subsidiary of Tesoro) that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors as certified in an officers’ certificate delivered to the trustee; (2) each Subsidiary of an Unrestricted Subsidiary, whenever it shall become such a Subsidiary; and (3) Tesoro Logistics LP and Tesoro Logistics GP, LLC and each of their respective subsidiaries.

The Board of Directors may designate any Subsidiary of Tesoro to become an Unrestricted Subsidiary if it:

(1) has no Indebtedness other than Non-Recourse Indebtedness;

(2) is not party to any agreement, contract, arrangement or understanding with Tesoro or any Restricted Subsidiary of Tesoro unless the terms of any such agreement, contract, arrangement or understanding do not violate the covenant described under “Certain covenants—Transactions with affiliates”; and

(3) would constitute an investment which Tesoro could make in compliance with the covenant under the caption “—Certain covenants—Restricted payments.”

Notwithstanding the foregoing, if, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred as of such date.

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (2) the then outstanding principal amount of such Indebtedness.

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Book-entry, delivery and form

We have obtained the information in this section concerning The Depository Trust Company, or DTC, Clearstream Banking, S.A., Luxembourg, or Clearstream, Luxembourg, and Euroclear Bank S.A./N.V., as operator of the Euroclear System, or Euroclear and their book-entry systems and procedures from sources that we believe to be reliable. We take no responsibility for an accurate portrayal of this information. In addition, the description of the clearing systems in this section reflects our understanding of the rules and procedures of DTC, Clearstream, Luxembourg and Euroclear as they are currently in effect. Those systems could change their rules and procedures at any time.

The notes of each series will initially be represented by one or more fully registered global notes. Each such global note will be deposited with, or on behalf of, DTC or any successor thereto and registered in the name of Cede & Co. (DTC’s nominee). You may hold your interests in the global notes in the United States through DTC, or in Europe through Clearstream, Luxembourg or Euroclear, either as a participant in such systems or indirectly through organizations which are participants in such systems. Clearstream, Luxembourg and Euroclear will hold interests in the global notes on behalf of their respective participating organizations or customers through customers’ securities accounts in Clearstream, Luxembourg’s or Euroclear’s names on the books of their respective depositaries, which in turn will hold those positions in customers’ securities accounts in the depositaries’ names on the books of DTC. Citibank, N.A. will act as depositary for Clearstream, Luxembourg and JPMorgan Chase Bank, N.A. will act as depositary for Euroclear.

So long as DTC or its nominee is the registered owner of the global securities representing the notes, DTC or such nominee will be considered the sole owner and holder of the notes for all purposes of the notes and the indenture. Except as provided below, owners of beneficial interests in the notes will not be entitled to have the notes registered in their names, will not receive or be entitled to receive physical delivery of the notes in definitive form and will not be considered the owners or holders of the notes under the indenture, including for purposes of receiving any reports delivered by us or the trustee pursuant to the indenture. Accordingly, each person owning a beneficial interest in a note must rely on the procedures of DTC or its nominee and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, in order to exercise any rights of a holder of notes.

Unless and until we issue the notes in fully certificated, registered form under the limited circumstances described below under the heading “—Certificated notes”:

•

you will not be entitled to receive a certificate representing your interest in the notes;

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all references in this prospectus to actions by holders will refer to actions taken by DTC upon instructions from its direct participants; and

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all references in this prospectus to payments and notices to holders will refer to payments and notices to DTC or Cede & Co., as the registered holder of the notes, for distribution to you in accordance with DTC procedures.

The Depository Trust Company

DTC will act as securities depositary for the notes. The notes will be issued as fully registered notes registered in the name of Cede & Co. DTC is:

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a limited-purpose trust company organized under the New York Banking Law;

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a “banking organization” under the New York Banking Law;

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•

a member of the Federal Reserve System;

•

a “clearing corporation” under the New York Uniform Commercial Code; and

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a “clearing agency” registered under the provisions of Section 17A of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

DTC holds securities that its direct participants deposit with DTC. DTC facilitates the settlement among direct participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in direct participants’ accounts, thereby eliminating the need for physical movement of securities certificates.

Direct participants of DTC include securities brokers and dealers (including the underwriters), banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its direct participants. Indirect participants of DTC, such as securities brokers and dealers, banks and trust companies, can also access the DTC system if they maintain a custodial relationship with a direct participant.

Purchases of notes under DTC’s system must be made by or through direct participants, which will receive a credit for the notes on DTC’s records. The ownership interest of each beneficial owner is in turn to be recorded on the records of direct participants and indirect participants. Beneficial owners will not receive written confirmation from DTC of their purchase, but beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the direct participants or indirect participants through which such beneficial owners entered into the transaction. Transfers of ownership interests in the notes are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in notes, except as provided below in “—Certificated notes.”

To facilitate subsequent transfers, all notes deposited with DTC are registered in the name of DTC’s nominee, Cede & Co. The deposit of notes with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the notes. DTC’s records reflect only the identity of the direct participants to whose accounts such notes are credited, which may or may not be the beneficial owners. The participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants and by direct participants and indirect participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Book-entry format

Under the book-entry format, the paying agent will pay interest or principal payments to Cede & Co., as nominee of DTC. DTC will forward the payment to the direct participants, who will then forward the payment to the indirect participants (including Clearstream, Luxembourg or Euroclear) or to you as the beneficial owner. You may experience some delay in receiving your

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payments under this system. Neither we, the trustee under the indenture nor any paying agent has any direct responsibility or liability for the payment of principal or interest on the notes to owners of beneficial interests in the notes.

DTC is required to make book-entry transfers on behalf of its direct participants and is required to receive and transmit payments of principal, premium, if any, and interest on the notes. Any direct participant or indirect participant with which you have an account is similarly required to make book-entry transfers and to receive and transmit payments with respect to the notes on your behalf. We and the trustee under the indenture have no responsibility for any aspect of the actions of DTC, Clearstream, Luxembourg or Euroclear or any of their direct or indirect participants. In addition, we and the trustee under the indenture have no responsibility or liability for any aspect of the records kept by DTC, Clearstream, Luxembourg, Euroclear or any of their direct or indirect participants relating to or payments made on account of beneficial ownership interests in the notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. We also do not supervise these systems in any way.

The trustee will not recognize you as a holder under the indenture, and you can only exercise the rights of a holder indirectly through DTC and its direct participants. DTC has advised us that it will only take action regarding a note if one or more of the direct participants to whom the note is credited directs DTC to take such action and only in respect of the portion of the aggregate principal amount of the notes as to which that participant or participants has or have given that direction. DTC can only act on behalf of its direct participants. Your ability to pledge notes to non-direct participants, and to take other actions, may be limited because you will not possess a physical certificate that represents your notes.

Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the notes unless authorized by a direct participant in accordance with DTC’s procedures. Under its usual procedures, DTC will mail an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those direct participants to whose accounts the notes are credited on the record date (identified in a listing attached to the omnibus proxy).

Clearstream, Luxembourg or Euroclear will credit payments to the cash accounts of Clearstream, Luxembourg customers or Euroclear participants in accordance with the relevant system’s rules and procedures, to the extent received by its depositary. These payments will be subject to tax reporting in accordance with relevant United States tax laws and regulations. Clearstream, Luxembourg or the Euroclear Operator, as the case may be, will take any other action permitted to be taken by a holder under the indenture on behalf of a Clearstream, Luxembourg customer or Euroclear participant only in accordance with its relevant rules and procedures and subject to its depositary’s ability to effect those actions on its behalf through DTC.

DTC, Clearstream, Luxembourg and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of the notes among participants of DTC, Clearstream, Luxembourg and Euroclear. However, they are under no obligation to perform or continue to perform those procedures, and they may discontinue those procedures at any time.

Transfers within and among book-entry systems

Transfers between DTC’s direct participants will occur in accordance with DTC rules. Transfers between Clearstream, Luxembourg customers and Euroclear participants will occur in accordance with its applicable rules and operating procedures.

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DTC will effect cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream, Luxembourg customers or Euroclear participants, on the other hand, in accordance with DTC rules on behalf of the relevant European international clearing system by its depositary. However, cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in that system in accordance with its rules and procedures and within its established deadlines (European time). The relevant European international clearing system will, if the transaction meets its settlement requirements, instruct its depositary to effect final settlement on its behalf by delivering or receiving securities in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Clearstream, Luxembourg customers and Euroclear participants may not deliver instructions directly to the depositaries.

Because of time-zone differences, credits of securities received in Clearstream, Luxembourg or Euroclear resulting from a transaction with a DTC direct participant will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date. Those credits or any transactions in those securities settled during that processing will be reported to the relevant Clearstream, Luxembourg customer or Euroclear participant on that business day. Cash received in Clearstream, Luxembourg or Euroclear as a result of sales of securities by or through a Clearstream, Luxembourg customer or a Euroclear participant to a DTC direct participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream, Luxembourg or Euroclear cash amount only as of the business day following settlement in DTC.

Although DTC, Clearstream, Luxembourg and Euroclear has agreed to the foregoing procedures in order to facilitate transfers of debt securities among their respective participants, they are under no obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time.

Certificated notes

Unless and until they are exchanged, in whole or in part, for notes in definitive form in accordance with the terms of the notes, the notes may not be transferred except (1) as a whole by DTC to a nominee of DTC or (2) by a nominee of DTC to DTC or another nominee of DTC or (3) by DTC or any such nominee to a successor of DTC or a nominee of such successor.

We will issue notes to you or your nominees, in fully certificated registered form, rather than to DTC or its nominees, only if:

•

we advise the trustee in writing that DTC is no longer willing or able to discharge its responsibilities properly or that DTC is no longer a registered clearing agency under the Exchange Act, and the trustee or we are unable to locate a qualified successor within 90 days;

•

an event of default has occurred and is continuing under the indenture; or

•

we, at our option, elect to terminate the book-entry system through DTC.

If any of the three above events occurs, DTC is required to notify all direct participants that notes in fully certificated registered form are available through DTC. DTC will then surrender the global note representing the notes along with instructions for re-registration. The trustee will re-issue

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the debt securities in fully certificated registered form and will recognize the registered holders of the certificated debt securities as holders under the indenture.

Unless and until we issue the notes in fully certificated, registered form, (1) you will not be entitled to receive a certificate representing your interest in the notes; (2) all references in this prospectus or an accompanying prospectus supplement to actions by holders will refer to actions taken by the depositary upon instructions from their direct participants; and (3) all references in this prospectus or an accompanying prospectus supplement to payments and notices to holders will refer to payments and notices to the depositary, as the registered holder of the notes, for distribution to you in accordance with its policies and procedures.

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Material United States federal income tax consequences

The following is a summary of the material United States federal income and, in the case of non-U.S. holders (as defined below), estate tax consequences of the purchase, ownership and disposition of the notes. This summary deals only with notes held as capital assets (within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”)) by persons who purchase the notes for cash upon original issuance at their “issue price” (the first price at which a substantial amount of the notes of that series is sold for money to investors, excluding sales to bond houses, brokers or similar persons or organizations acting in the capacity of underwriter, placement agent or wholesaler).

As used herein, a “U.S. holder” means a beneficial owner of the notes that is, for United States federal income tax purposes, any of the following:

•

an individual who is a citizen or resident of the United States;

•

a corporation that is created or organized under the laws of the United States, any state thereof or the District of Columbia;

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an estate the income of which is subject to United States federal income taxation regardless of its source; or

•

a trust if it (i) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (ii) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.

Except as modified for estate tax purposes (as discussed below), the term “non-U.S. holder” means a beneficial owner of the notes that, for United States federal income tax purposes, is an individual, corporation, estate or trust that is not a U.S. holder.

If any entity classified as a partnership for United States federal income tax purposes holds notes, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partnership or a partner in a partnership considering an investment in the notes, you should consult your own tax advisors.

This summary does not represent a detailed description of the United States federal income tax consequences applicable to you if you are a person subject to special tax treatment under the United States federal income tax laws, including, without limitation:

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a dealer in securities or currencies;

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a financial institution;

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a regulated investment company;

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a real estate investment trust;

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a tax-exempt organization;

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an insurance company;

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a U.S. holder that makes a special election to treat all stated interest on the notes as OID;

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•

a person holding the notes as part of a hedging, integrated, conversion or constructive sale transaction or a straddle;

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a trader in securities that has elected the mark-to-market method of accounting for your securities;

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a person liable for alternative minimum tax;

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a partnership or other pass-through entity (or an investor in such an entity);

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a U.S. holder whose “functional currency” is not the U.S. dollar;

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a U.S. holder that holds its notes through a non-U.S. broker or other non-U.S. intermediary;

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a “controlled foreign corporation”;

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a “passive foreign investment company”; or

•

a United States expatriate.

This summary is based on the Code, United States Treasury regulations, administrative rulings and judicial decisions as of the date hereof. Those authorities may be changed, possibly on a retroactive basis, so as to result in United States federal income and estate tax consequences different from those summarized below. We have not sought and do not expect to seek any rulings from the Internal Revenue Service (“IRS”) regarding the matters discussed below. There can be no assurance that the IRS will not take positions concerning the tax consequences of the purchase, ownership or disposition of the notes that are different from those discussed below.

This summary does not represent a detailed description of the United States federal income and estate tax consequences to you in light of your particular circumstances and does not address the effects of any United States federal tax consequences other than income taxes, and in the case of non-U.S. holders, estate taxes (such as gift taxes or the recently enacted Medicare tax on certain investment income) and does not address state, local or non-United States tax laws. It is not intended to be, and should not be construed to be, legal or tax advice to any particular purchaser of notes.

If you are considering the purchase of notes, you should consult your own tax advisors concerning the particular United States federal income and estate tax consequences to you of the purchase, ownership and disposition of the notes, as well as the consequences to you arising under other United States federal tax laws and/or the laws of any other taxing jurisdiction.

Tax consequences to U.S. holders

The following is a summary of the material United States federal income tax consequences that will apply to U.S. holders of the notes.

Stated interest . Stated interest on the notes generally will be taxable to a U.S. holder as ordinary income at the time it is received or accrued, depending on such holder’s regular method of accounting for United States federal income tax purposes.

Original issue discount . A note with an “issue price” (as defined above) that is less than its stated principal amount generally will be treated as issued with OlD for United States federal income tax purposes in an amount equal to that difference if that difference is at least 0.25% of the stated principal amount multiplied by the number of complete years to maturity. If the notes

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of a series you hold are issued with OID, you generally must include the OID in gross income (as ordinary income) as it accrues (on a constant yield to maturity basis), in advance of the receipt of the cash attributable to that income, regardless of your regular method of accounting for United States federal income tax purposes.

The amount of OID, if any, that you must include in income for any taxable year with respect to a note will generally equal the sum of the “daily portions” of OID with respect to the note for each day during such taxable year on which you held that note (“accrued OID”). The daily portion is determined by allocating to each day in any “accrual period” a pro rata portion of the OID allocable to that accrual period. The “accrual period” may be of any length and may vary in length over the term of the note, provided that each accrual period is no longer than one year and each scheduled payment of principal and interest occurs on the first day or the final day of an accrual period. The amount of OID allocable to any accrual period other than the final accrual period is an amount equal to the excess, if any, of

•

the note’s “adjusted issue price” at the beginning of the accrual period multiplied by its yield to maturity, determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period, over

•

the aggregate of any stated interest allocable to the accrual period.

OID allocable to a final accrual period is the difference between the stated principal amount and the adjusted issue price at the beginning of the final accrual period. Special rules will apply for calculating OID for an initial short accrual period. The “adjusted issue price” of a note at the beginning of any accrual period is equal to its issue price increased by the accrued OID, if any, for each prior accrual period. Under these rules, you generally will have to include in income increasingly greater amounts of OID in successive accrual periods.

Sale, exchange, retirement, redemption or other taxable disposition of notes . Upon the sale, exchange, retirement, redemption, or other taxable disposition of a note, you generally will recognize gain or loss equal to the difference, if any, between the amount realized upon the sale, exchange, retirement, redemption or other taxable disposition (less any amount attributable to accrued and unpaid stated interest, which will be taxable as interest income to the extent not previously so taxed) and the adjusted tax basis of the note. Your adjusted tax basis in a note will, in general, be your cost for that note, increased by any previously included OID. Any gain or loss will be capital gain or loss. Capital gains of non-corporate holders derived in respect of capital assets held for more than one year are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

Tax consequences to non-U.S. holders

The following is a summary of the material United States federal income and estate tax consequences that will apply to non-U.S. holders of the notes.

United States federal withholding tax . The 30% United States federal withholding tax will not apply to any payment of interest (which, for purposes of this discussion of non-U.S. holders, includes any OID) on the notes under the “portfolio interest rule,” provided that:

•

interest paid on the notes is not effectively connected with your conduct of a trade or business in the United States;

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•

you do not actually (or constructively) own 10% or more of the total combined voting power of all classes of our voting stock within the meaning of the Code and applicable United States Treasury regulations;

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you are not a controlled foreign corporation that is related to us through stock ownership;

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you are not a bank whose receipt of interest on the notes is described in Section 881(c)(3)(A) of the Code; and

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either (1) you provide your name and address on an IRS Form W-8BEN (or other applicable form), and certify, under penalties of perjury, that you are not a United States person as defined under the Code or (2) you hold your notes through certain foreign intermediaries and satisfy the certification requirements of applicable United States Treasury regulations. Special certification rules apply to non-U.S. holders that are pass-through entities rather than corporations or individuals.

If you cannot satisfy the requirements described above, payments of interest made to you will be subject to a 30% United States federal withholding tax, unless you provide the applicable withholding agent with a properly executed:

•

IRS Form W-8BEN (or other applicable form) certifying an exemption from or reduction in withholding under the benefit of an applicable income tax treaty; or

•

IRS Form W-8ECI (or other applicable form) certifying that interest paid on the notes is not subject to withholding tax because it is effectively connected with your conduct of a trade or business in the United States (as discussed below under “—United States federal income tax”).

The 30% United States federal withholding tax generally will not apply to any payment of principal or gain that you realize on the sale, exchange, retirement, redemption or other taxable disposition of a note.

United States federal income tax . If you are engaged in a trade or business in the United States and interest on the notes is effectively connected with the conduct of that trade or business (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment), then you will be subject to United States federal income tax on that interest on a net income basis in generally the same manner as if you were a U.S. holder. In addition, if you are a foreign corporation, you may be subject to a branch profits tax equal to 30% (or a lower applicable income tax treaty rate) of your effectively connected earnings and profits, subject to adjustments. If interest received with respect to the notes is effectively connected income (whether or not a treaty applies), the 30% withholding tax described above will not apply, provided the certification requirements discussed above in “—United States federal withholding tax” are satisfied.

Any gain realized on the sale, exchange, retirement, redemption or other taxable disposition of a note generally will not be subject to United States federal income tax unless:

•

the gain is effectively connected with your conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment), in which case such gain will be subject to United States federal income tax in generally the same manner as effectively connected interest is taxed (as discussed above); or

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•

you are an individual who is present in the United States for 183 days or more in the taxable year of the disposition, and certain other conditions are met, in which case, unless an applicable income tax treaty provides otherwise, you will be subject to a flat 30% United States federal income tax on the gain derived from the sale or other taxable disposition, which may be offset by certain United States source capital losses.

United States federal estate tax . If you are an individual who is neither a citizen nor a resident (as specifically defined for United States federal estate tax purposes) of the United States at the time of your death, your estate will not be subject to United States federal estate tax on notes beneficially owned (or deemed to be beneficially owned) by you at the time of your death, provided that any interest payment to you on the notes would be eligible for exemption from the 30% United States federal withholding tax under the “portfolio interest rule” described above under “—United States federal withholding tax” without regard to the statement requirement described in the fifth bullet point of that section.

Information reporting and backup withholding

U.S. holders . In general, information reporting requirements will apply to payments of stated interest on the notes, accruals of OID (if any) and the proceeds of a sale or other taxable disposition (including a retirement or redemption) of a note paid to you (unless you are an exempt recipient such as a corporation). Backup withholding may apply to any payments of amounts described in the preceding sentence if you fail to provide a taxpayer identification number or a certification that you are not subject to backup withholding.

Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against your United States federal income tax liability provided the required information is timely furnished to the IRS.

Non-U.S. holders . Generally, we must report to the IRS and to you the amount of interest (including any OID) paid to you and the amount of tax, if any, withheld with respect to those payments. Copies of the information returns reporting such interest payments and any withholding may also be made available to the tax authorities in the country in which you reside under the provisions of an applicable income tax treaty.

In general, you will not be subject to backup withholding with respect to payments of interest (including any OID) on the notes that are made to you provided that the applicable withholding agent does not have actual knowledge or reason to know that you are a United States person as defined under the Code, and has received from you the required certification that you are a non-U.S. holder described above in the fifth bullet point under “—Tax consequences to non-U.S. holders—United States federal withholding tax.”

Information reporting and, depending on the circumstances, backup withholding will apply to the proceeds of a sale or other taxable disposition (including a retirement or redemption) of notes within the United States or conducted through certain United States-related financial intermediaries, unless you certify to the applicable withholding agent under penalties of perjury that you are a non-U.S. holder (and the applicable withholding agent does not have actual knowledge or reason to know that you are a United States person as defined under the Code), or you otherwise establish an exemption.

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Additional withholding requirements

Under recently enacted legislation and administrative guidance, the applicable withholding agent may be required to withhold 30% on any interest income paid after December 31, 2013 and any gross proceeds from a disposition of notes paid after December 31, 2014 to (i) a foreign financial institution (whether such institution is the beneficial owner or an intermediary) unless such foreign financial institution agrees to verify, report and disclose its U.S. account holders and meets certain other specified requirements or (ii) a non-financial foreign entity (whether such entity is the beneficial owner or an intermediary) unless such entity certifies that it does not have any substantial United States owners or provides the name, address and taxpayer identification number of each substantial United States owner and such entity meets certain other specified requirements. The legislation contains a grandfathering provision that exempts from withholding any interest payment under, or gross proceeds from a disposition of, an obligation that is outstanding on March 18, 2012. Proposed United States Treasury regulations would extend this grandfathering provision to obligations that are outstanding on January 1, 2013. These proposed regulations are not effective until finalized, however, and unless and until they are so finalized, taxpayers are not entitled to rely on them. You should consult your own tax advisors regarding this legislation and whether it may be relevant to your purchase, ownership and disposition of the notes.

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Certain ERISA considerations

The following is a summary of certain considerations associated with the purchase of the notes by employee benefit plans that are subject to Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”), plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the Code or provisions under any federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (collectively, “Similar Laws”), and entities whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”).

General fiduciary matters

ERISA and the Code impose certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of the Code (an “ERISA Plan”) and prohibit certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties or disqualified persons. Under ERISA and the Code, any person who exercises any discretionary authority or control over the administration of such an ERISA Plan or the management or disposition of the assets of such an ERISA Plan, or who renders investment advice for a fee or other compensation to such an ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan.

In considering an investment in the notes of a portion of the assets of any Plan, a fiduciary should determine whether the investment is in accordance with the documents and instruments governing the Plan and the applicable provisions of ERISA, the Code or any Similar Law relating to a fiduciary’s duties to the Plan including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws.

Governmental plans (as defined under Section 3(32) of ERISA), certain church plans (as defined under Section 3(33) of ERISA) and non-U.S. plans (as define under Section 4(b)(4) of ERISA) are not subject to the prohibited transaction provisions of ERISA and the Code. Such plans may, however, be subject to Similar Laws which may affect their investment in the notes. Any fiduciary of such a governmental, church plan or non-U.S. plan considering an investment in the notes should determine the need for, and the availability, if necessary, of any exemptive relief under any applicable Similar Law.

Prohibited transaction issues

Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from engaging in specified transactions involving plan assets with persons or entities who are “parties in interest”, within the meaning of ERISA, or “disqualified persons”, within the meaning of Section 4975 of the Code, unless an exemption is available. A party in interest or disqualified person who engaged in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the ERISA Plan that engaged in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code. The acquisition and/or holding of notes by an ERISA Plan with respect to which the issuer, the underwriters, the subsidiary guarantors or any of their respective affiliates are considered a party in interest or a disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired and is held in accordance with an

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applicable statutory, class or individual prohibited transaction exemption. In this regard, the U.S. Department of Labor (the “DOL”) has issued prohibited transaction class exemptions, or “PTCEs”, that, depending on the identity of the Plan fiduciary making the decision to acquire or hold the notes, may apply to the acquisition and holding of the notes. These class exemptions include, without limitation, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38 respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts and PTCE 96-23 respecting transactions determined by in-house asset managers. In addition, ERISA Section 408(b)(17) provides a limited exemption for the purchase and sale of securities and related lending transactions, provided that neither the issuer of the securities nor any of its affiliates have or exercise any discretionary authority or control or render any investment advice with respect to the assets of any ERISA Plan involved in the transaction and provided further that the ERISA Plan pays no more than adequate consideration in connection with the transaction. However, there can be no assurance that all of the conditions of any such exemptions will be satisfied with respect to any particular transaction involving the notes.

Because of the foregoing, the notes should not be purchased or held by any person investing “plan assets” of any Plan, unless such purchase and holding will not constitute a non-exempt prohibited transaction under ERISA and the Code or violation of any applicable Similar Laws.

Representation

Accordingly, by acceptance of a note, each purchaser and subsequent transferee of a note will be deemed to have represented and warranted that either (i) no portion of the assets used by such purchaser or transferee to acquire or hold the notes constitutes assets of any Plan or (ii) the purchase and holding of the notes by such purchaser or transferee will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a similar violation under any applicable Similar Laws.

The foregoing discussion is general in nature and is not intended to be all inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons considering purchasing the notes on behalf of, or with the assets of, any Plan, consult with their counsel regarding the potential applicability of Section 406 of ERISA, Section 4975 of the Code and any Similar Laws to such investment and whether an exemption would be applicable to the purchase and holding of the notes.

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Underwriting

Subject to the terms and conditions in the underwriting agreement between us and the underwriters, we have agreed to sell to each underwriter, and each underwriter has severally agreed to purchase from us, the principal amount of each series of notes that appears opposite its name in the table below:


Underwriters	Principal amount of 2017 Notes	Principal amount of 2022 Notes

RBS Securities Inc.	$	$
J.P. Morgan Securities LLC	$	$
Mizuho Securities USA Inc.	$	$
Natixis Securities Americas LLC	$	$
Credit Agricole Securities (USA) Inc.	$	$
RBC Capital Markets, LLC	$	$
Scotia Capital (USA) Inc.	$	$
UBS Securities LLC	$	$

Total	$	$

The underwriting agreement provides that the obligations of the underwriters to purchase the notes of each series included in this offering are subject to approval of legal matters by counsel and to other conditions. The underwriters have agreed to purchase all of the notes of each series if any of them are purchased.

The underwriters initially propose to offer the notes of each series to the public at the applicable public offering price that appears on the cover page of this prospectus. The underwriters may offer the notes to selected dealers at the public offering price minus a concession of up to % of the principal amount. In addition, the underwriters may allow, and those selected dealers may reallow, a concession of up to % of the principal amount to certain other dealers. After the initial offering, the underwriters may change the public offering price and any other selling terms. The underwriters may offer and sell notes through certain of their affiliates.

The following table shows the underwriting discounts and commissions to be paid to the underwriters in connection with this offering (expressed as a percentage of the principal amount of the notes).


	Paid by us

Per 2017 Note		%
Per 2022 Note		%

In the underwriting agreement, we have agreed that:

•

We will not offer or sell any of our debt securities (other than the notes) for a period of 45 days after the date of this prospectus supplement without the prior consent of RBS Securities Inc.

•

We will indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in respect of those liabilities.

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Each series of notes is a new issue of securities with no established trading market. We do not intend to apply for the notes to be listed on any securities exchange or to arrange for the notes to be quoted on any quotation system. Certain of the underwriters have advised us that they intend to make a market in the notes. However, they are not obligated to do so and they may discontinue any market making at any time in their sole discretion. Therefore, we cannot assure you that a liquid trading market will develop for the notes, that you will be able to sell your notes at a particular time or that the prices that you receive when you sell will be favorable.

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (which we refer to as a “Relevant Member State”), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (which we refer to as the “Relevant Implementation Date”) it has not made and will not make an offer of notes to the public in that Relevant Member State prior to the publication of a prospectus in relation to the notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive and the 2010 PD Amending Directive to the extent implemented, except that it may, with effect from and including the Relevant Implementation Date, make an offer of notes to the public in that Relevant Member State at any time:

•

to any legal entity which is a qualified investor as defined in the Prospectus Directive or the 2010 PD Amending Directive if the relevant provision has been implemented;

•

to fewer than (a) 100 natural or legal persons per Relevant Member State (other than qualified investors as defined in the Prospectus Directive or the 2010 PD Amending Directive if the relevant provision has been implemented) or (b) if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons per Relevant Member State (other than qualified investors as defined in the Prospectus Directive or the 2010 PD Amending Directive if the relevant provision has been implemented), subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the Issuer for any such offer; or

•

in any circumstances falling within Article 3(2) of the Prospectus Directive or Article 3(2) of the 2010 PD Amending Directive to the extent implemented.

For the purposes of this provision, the expression an “offer of notes to the public,” in relation to any notes in any Relevant Member State, means the communication in any form and by any means of sufficient information on the terms of the offer and the notes to be offered so as to enable an investor to decide to purchase or subscribe the notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State and the expression 2010 PD Amending Directive means Directive 2010/73/EC.

Each underwriter has represented and agreed that:

•

it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) received by it in

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connection with the issue or sale of the notes in circumstances in which Section 21(1) of the Financial Services and Markets Act 2000 does not apply to us; and

•

it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 with respect to anything done by it in relation to the notes in, from or otherwise involving the United Kingdom.

This prospectus is only being distributed to and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (who we refer to as “qualified investors”) that are also (1) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (which we refer to as the “Order”) or (2) high net worth entities and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order. This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.

In connection with this offering of the notes, the underwriters may engage in overallotments, stabilizing transactions and syndicate covering transactions in accordance with Regulation M under the Exchange Act. Overallotment involves sales in excess of the offering size, which creates a short position for the underwriter. Stabilizing transactions involve bids to purchase the notes in the open market for the purpose of pegging, fixing or maintaining the price of the notes, as applicable. Syndicate covering transactions involve purchases of the notes in the open market after the distribution has been completed in order to cover short positions. Stabilizing transactions and syndicate covering transactions may cause the price of the notes to be higher than it would otherwise be in the absence of those transactions. If any of the underwriters engages in stabilizing or syndicate covering transactions, it may discontinue them at any time.

Certain of the underwriters or their affiliates that have a lending relationship with us and/or our affiliates have hedged, and are likely to hedge in the future, their credit exposure to us and/or our affiliates consistent with their risk management policies. Typically, these underwriters and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in our securities, including potentially the notes offered hereby. Any such credit default swaps or short positions could adversely affect future trading prices of the notes offered hereby.

We estimate that our total expenses of this offering will be approximately $1,860,750.

Certain of the underwriters and their affiliates perform various financial advisory, investment banking and commercial banking services from time to time for us and our affiliates. JPMorgan Chase Bank, National Association, an affiliate of J.P. Morgan Securities LLC, currently serves as administrative agent under our revolving credit facility and a portion of our cash balances are invested with J.P. Morgan Securities LLC. Affiliates of certain of the underwriters are lenders under our syndicated and bilateral credit facilities. In addition, affiliates of the underwriters may from time to time hold long or short positions in the Cash Tender Notes (constituting individually and in the aggregate less than 5% of each series) for their own accounts or for the accounts of customers, and as a result, may elect to participate in the tender offers for their own accounts or for the accounts of customers and receive a portion of the proceeds from this offering. RBS Securities Inc. is acting as sole dealer manager in connection with the tender offers.

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We expect delivery of the notes will be made against payment therefor on or about , 2012, which is the 10th business day following the date of the pricing of the notes (such settlement being referred to as “T+10”). Under Rule 15(c)6-1 of the Exchange Act, trades in the secondary market generally are required to settle in three business days unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the notes on the date of pricing of the notes or on the next six succeeding business days will be required, by virtue of the fact that the notes initially will settle in T+10, to specify an alternative settlement cycle at the time of any such trade to prevent failed settlement and should consult their own advisors.

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Legal matters

The validity of the notes will be passed upon for us by Simpson Thacher & Bartlett LLP, New York, New York, and the validity of the applicable guarantees will be passed upon for Smiley’s Super Service, Inc. and Tesoro Hawaii, LLC by Rush Moore LLP, Honolulu, Hawaii, and for Tesoro Northstore Company by Groh Eggers, LLC, Anchorage, Alaska. Certain legal matters with respect to the notes will be passed upon for the underwriters by Cahill Gordon & Reindel LLP , New York, New York.

Experts

The consolidated financial statements of Tesoro Corporation appearing in Tesoro Corporation’s Annual Report (Form 10-K) for the year ended December 31, 2011 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon included therein, and incorporated herein by reference. Such consolidated financial statements are, and audited consolidated financial statements to be included in subsequently filed documents will be, incorporated herein in reliance upon the reports of Ernst & Young LLP pertaining to such consolidated financial statements (to the extent covered by consents filed with the SEC) given on the authority of such firm as experts in accounting and auditing.

Where you can find more information

We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s web site at http:// www.sec.gov . You also may read and copy any document we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our common stock is listed and traded on the New York Stock Exchange under the trading symbol “TSO.” Our reports, proxy statements and other information filed with the SEC also can be inspected and copied at the New York Stock Exchange, 20 Broad Street, New York, New York. Our internet address is http://www.tsocorp.com . The information on our website is not incorporated into this prospectus.

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Incorporation by reference

This prospectus “incorporates by reference” the information we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information that we file later with the SEC will automatically update and supersede the information in this prospectus. We incorporate by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (but excluding any portions thereof that are furnished and not filed) to and including the date of this prospectus:

•

our Annual Report on Form 10-K for the year ended December 31, 2011;

•

our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012;

•

our Current Reports on Form 8-K filed on January 11, 2012, February 7, 2012, April 3, 2012, April 9, 2012, May 8, 2012, June 8, 2012, August 10, 2012, August 13, 2012 and August 22, 2012 and on Form 8-K/A filed on February 1, 2012; and

•

the portions of our Definitive Proxy Statement on Schedule 14A, filed on March 22, 2012, that are incorporated by reference in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

We will deliver, without charge to the requester, to anyone receiving this prospectus including any beneficial owner, upon written or oral request, a copy of any or all of the information incorporated by reference in this prospectus but not delivered with this prospectus, but the exhibits to those documents will not be delivered unless they have been specifically incorporated by reference. Requests for these documents should be made to:

Charles S. Parrish, Secretary

Tesoro Corporation

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

(210) 626-6000

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LOGO

PART II

Information not required in prospectus

Item 14. Other expenses of issuance and distribution

The following table sets forth the expenses in connection with the issuance and distribution of the securities covered by this Registration Statement. All such expenses are estimates, other than the registration fee payable to the Securities and Exchange Commission, and will be borne by the Registrant.


Securities and Exchange Commission filing fee	$	*
Printing fees and expenses		150,000
Legal fees and expenses		500,000
Accounting fees and expenses		200,000
Trustee fees		25,000
Rating agency fees		950,000
Miscellaneous		35,750

Total	$	1,860,750

Deferred in accordance with Rule 456(b) and 457(c) of the Securities Act of 1933, as amended.

Item 15. Indemnification of directors and officers

Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement in connection with specified actions, rules, or proceedings, whether civil, criminal, administrative, or investigative (other than action by or in the right of the corporation—a “derivative action”), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys’ fees) incurred in connection with the defense or settlement of such action, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation’s charter, by-laws, disinterested director vote, stockholder vote, agreement, or otherwise.

Article 7, Section 7.1 of the Company’s Amended and Restated By-laws requires indemnification to the fullest extent permitted by the laws of the State of Delaware of any person who was or is made, or threatened to be made, a party to, or is otherwise involved in any action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that he, or a person for whom he is the legal representative, (i) is or was a director or officer of the Company or a subsidiary of the Company or (ii) serves or served any other enterprise at the request of the Company.

Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for (i) any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct

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or a knowing violation of law, (iii) payment of unlawful dividends or unlawful stock purchases or redemptions, or (iv) any transaction from which the director derived an improper personal benefit.

Article Nine of the Company’s Restated Certificate of Incorporation, as amended, provides that a director will not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, which concerns unlawful payment of dividends, stock purchases or redemptions or (iv) for any transaction from which the director derived an improper personal benefit.

The Company maintains directors’ and officers’ liability insurance which provides for payment, on behalf of the directors and officers of the Company and its subsidiaries, of certain losses of such persons (other than matters uninsurable under law) arising from claims, including claims arising under the Securities Act of 1933, as amended, for acts or omissions by such persons while acting as directors or officers of the Company and/or its subsidiaries, as the case may be.

The Company has entered into indemnification agreements with its directors and certain of its officers.

Item 16. Exhibits and financial statement schedules

The following documents are filed as exhibits to this Registration Statement.


Exhibit no.		Description


	*1.1	Form of Underwriting Agreement.

	3.1	Restated Certificate of Incorporation of Tesoro Corporation, dated August 10, 2012.

	3.2	Amended and Restated Bylaws of Tesoro Corporation effective January 26, 2011 (incorporated by reference herein to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 28, 2011, File No. 1-3473).

	4.1	Form of Indenture (including form of note), among Tesoro Corporation, certain subsidiary guarantors and U.S. Bank National Association, as trustee, relating to the Senior Notes due 2017 and the Senior Notes due 2022.

	5.1	Opinion of Simpson Thacher & Bartlett LLP.

	5.2	Opinion of Groh Eggers, LLC.

	5.3	Opinion of Rush Moore LLP.

	12.1	Statement of Computation of Ratio of Earnings to Fixed Charges.

	23.1	Consent of Ernst & Young LLP.

	23.2	Consent of Simpson Thacher & Bartlett LLP (included in Exhibit 5.1).

	23.3	Consent of Groh Eggers, LLC (included in Exhibit 5.2).

	23.4	Consent of Rush Moore LLP (included in Exhibit 5.3).

	24.1	Powers of Attorney of certain officers and directors of Tesoro Corporation and other Registrants (included on the signature pages hereof).

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Exhibit no.		Description


	25.1	Form T-1, Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank National Association, as Trustee.

To be filed as an exhibit to a report filed under the Exchange Act and incorporated herein by reference.

Item 17. Undertakings

(a)

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided however that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(i) Each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

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(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date;

(5) That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to any charter provision, bylaw, contract, arrangement, statute, or otherwise, the Registrant has been advised that in the

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opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted against the Registrant by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(d) The undersigned Registrant hereby undertakes to file an application for the purpose of determining the eligibility of the applicable trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939 (“Act”) in accordance with the rules and regulations of the Commission under Section 305(b)(2) of the Act.

II-5

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Antonio, State of Texas, on the 13th day of September, 2012.


TESORO CORPORATION

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

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gregory J. Goff and Charles S. Parrish, or any of them, severally, as his/her attorney-in-fact and agent, with full power of substitution and resubstitution, for him/her and in his/her name, place, and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this registration statement, and to file the same with all exhibits hereto, and all other documents in connection herewith, with the Commission, granting unto said attorney-in-fact and agent, and either of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 13th day of September, 2012.


Signature		Title

/s/ G REGORY J. G OFF Gregory J. Goff		President, Chief Executive Officer and Director (Principal Executive Officer)

/s/ G. S COTT S PENDLOVE G. Scott Spendlove		Senior Vice President and Chief Financial Officer (Principal Financial Officer)

/s/ A RLEN O. G LENEWINKEL , J R . Arlen O. Glenewinkel, Jr.		Vice President and Controller (Principal Accounting Officer)

/s/ S TEVEN H. G RAPSTEIN Steven H. Grapstein		Chairman of the Board of Directors

/s/ R ODNEY F. C HASE Rodney F. Chase		Director

/s/ R OBERT W. G OLDMAN Robert W. Goldman		Director

/s/ D AVID L ILLEY David Lilley		Director

II-6


Signature		Title

/s/ J.W. N OKES J.W. Nokes		Director

/s/ S USAN T OMASKY Susan Tomasky		Director

/s/ M ICHAEL E. W ILEY Michael E. Wiley		Director

/s/ P ATRICK Y. Y ANG Patrick Y. Yang		Director

II-7

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of San Antonio, State of Texas, on the 13th day of September, 2012.


GOLD STAR MARITIME COMPANY
TESORO FAR EAST MARITIME COMPANY TESORO MARITIME COMPANY

By:		/ S / C HARLES W. P ARKS
		Charles W. Parks President

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 13th day of September, 2012.


Signature		Title

/ S / C HARLES W. P ARKS Charles W. Parks		Chairman of the Board of Directors and President (Principal Executive Officer)

/ S / G. S COTT S PENDLOVE G. Scott Spendlove		Director, Senior Vice President and Chief Financial Officer (Principal Financial Officer)

/ S / D ANIEL R. R OMASKO Daniel R. Romasko		Director and Executive Vice President, Operations

/ S / A RLEN O. G LENEWINKEL , J R . Arlen O. Glenewinkel, Jr.		Vice President and Controller (Principal Accounting Officer)

II-8

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of San Antonio, State of Texas, on the 13th day of September, 2012.


SMILEY’S SUPER SERVICE, INC.

By:		/s/ J OHN R. R AMSEY
		John R. Ramsey
		President

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 13th day of September, 2012.


Signature		Title

/s/ J OHN R. R AMSEY John R. Ramsey		Director and President (Principal Executive Officer)

/s/ A RLEN O. G LENEWINKEL , J R . Arlen O. Glenewinkel, Jr.		Chairman of the Board, Vice President, Treasurer and Controller (Principal Financial Officer and Principal Accounting Officer)

/s/ P. S COTT R AMMELL P. Scott Rammell		Director, Vice President, General Counsel and Secretary

II-9

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of San Antonio, State of Texas, on the 13th day of September, 2012.


TESORO ALASKA COMPANY TESORO AVIATION COMPANY TESORO COMPANIES, INC. TESORO ENVIRONMENTAL RESOURCES COMPANY TESORO TRADING COMPANY

By:		/s/ G REGORY J. G OFF
		Gregory J. Goff
		President

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 13th day of September, 2012.


Signature		Title

/s/ G REGORY J. G OFF Gregory J. Goff		Chairman of the Board of Directors and President (Principal Executive Officer)

/s/ G. S COTT S PENDLOVE G. Scott Spendlove		Director, Senior Vice President and Chief Financial Officer (Principal Financial Officer)

/s/ C HARLES S. P ARRISH Charles S. Parrish		Director, Executive Vice President, General Counsel and Secretary

/s/ A RLEN O. G LENEWINKEL , J R . Arlen O. Glenewinkel, Jr.		Vice President and Controller (Principal Accounting Officer)

II-10

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of San Antonio, State of Texas, on the 13th day of September, 2012.


TESORO HAWAII, LLC

By:		/ S / G REGORY J. G OFF
		Gregory J. Goff President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 13th day of September, 2012.


Signature		Title

/ S / G REGORY J. G OFF Gregory J. Goff		,Chairman of Managers Committee, President and Chief Executive Officer (Principal Executive Officer)

/ S / G. S COTT S PENDLOVE G. Scott Spendlove		Manager, Senior Vice President and Chief Financial Officer (Principal Financial Officer)

/ S / C HARLES S. P ARRISH Charles S. Parrish		Manager, Executive Vice President, General Counsel and Secretary

/ S / A RLEN O. G LENEWINKEL , J R . Arlen O. Glenewinkel, Jr.		Vice President and Controller (Principal Accounting Officer)

II-11

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of San Antonio, State of Texas, on the 13th day of September, 2012.


TESORO NORTHSTORE COMPANY

By:		/ S / C LAUDE P. M OREAU
		Claude P. Moreau President

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 13th day of September, 2012.


Signature		Title

/ S / C LAUDE P. M OREAU Claude P. Moreau		Director and President (Principal Executive Officer)

/ S / G. S COTT S PENDLOVE G. Scott Spendlove		Senior Vice President and Chief Financial Officer (Principal Financial Officer)

/ S / D ANIEL R. R OMASKO Daniel R. Romasko		Director and Executive Vice President, Operations

/ S / C HARLES S. P ARRISH Charles S. Parrish		Chairman of the Board, Executive Vice President, General Counsel and Secretary

/ S / A RLEN O. G LENEWINKEL , J R . Arlen O. Glenewinkel, Jr.		Vice President and Controller (Principal Accounting Officer)

II-12

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of San Antonio, State of Texas, on the 13th day of September, 2012.


TESORO REFINING AND MARKETING COMPANY

By:		/ S / G REGORY J. G OFF .
		Gregory J. Goff President

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 13th day of September, 2012.


Signature		Title

/ S / G REGORY J. G OFF Gregory J. Goff		Chairman of the Board of Directors and President (Principal Executive Officer)

/ S / G. S COTT S PENDLOVE G. Scott Spendlove		Director, Senior Vice President and Chief Financial Officer (Principal Financial Officer)

/ S / C HARLES S. P ARRISH Charles S. Parrish		Director, Executive Vice President and Secretary

/ S / A RLEN O. G LENEWINKEL , J R . Arlen O. Glenewinkel, Jr.		Vice President and Controller (Principal Accounting Officer)

II-13

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of San Antonio, State of Texas, on the 13th day of September, 2012.


TESORO SIERRA PROPERTIES, LLC
TESORO SOUTH COAST COMPANY, LLC
TESORO WEST COAST COMPANY, LLC

By:		/ S / C LAUDE P. M OREAU
		Claude P. Moreau President

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 13th day of September, 2012.


Signature		Title

/s/ C LAUDE P. M OREAU Claude P. Moreau		Manager and President (Principal Executive Officer)

/s/ G. S COTT S PENDLOVE G. Scott Spendlove		Senior Vice President and Chief Financial Officer (Principal Financial Officer)

/s/ D ANIEL R. R OMASKO Daniel R. Romasko		Manager and Executive Vice President, Operations

/s/ C HARLES S. P ARRISH Charles S. Parrish		Manager

/s/ A RLEN O. G LENEWINKEL , J R . Arlen O. Glenewinkel, Jr.		Vice President and Controller (Principal Accounting Officer)

II-14

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of San Antonio, State of Texas, on the 13th day of September, 2012.


TESORO WASATCH, LLC

By:		/ S / C LAUDE P. M OREAU
		Claude P. Moreau President

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 13th day of September, 2012.


Signature		Title

/ S / C LAUDE P. M OREAU Claude P. Moreau		Chairman of the Board of Directors and President (Principal Executive Officer)

/ S / G. S COTT S PENDLOVE G. Scott Spendlove		Senior Vice President and Chief Financial Officer (Principal Financial Officer)

/ S / D ANIEL R. R OMASKO Daniel R. Romasko		Director and Executive Vice President, Operations

/ S / C HARLES S. P ARRISH Charles S. Parrish		Director

/ S / A RLEN O. G LENEWINKEL , J R . Arlen O. Glenewinkel, Jr.		Vice President and Controller (Principal Accounting Officer)

II-15

Exhibit 3.1

RESTATED CERTIFICATE OF INCORPORATION

TESORO CORPORATION

Tesoro Corporation, a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY THAT:

1. The name of this corporation is Tesoro Corporation, and this corporation was originally incorporated pursuant to the General Corporation Law of the State of Delaware on December 26, 1968 under the name TSO Corp.

2. The Board of Directors of this corporation duly adopted resolutions proposing to restate the Second Restated Certificate of Incorporation of this corporation, filed on June 30, 1978 by the corporation under the name Tesoro Petroleum Corporation.

3. This Third Restated Certificate of Incorporation was duly adopted by the directors of the Corporation in accordance with the provisions of Section 245 of the General Corporation Law of the State of Delaware. It only restates and integrates and does not further amend the provisions of the Corporation’s Certificate of Incorporation as heretofore amended or supplemented. There is no discrepancy between those provisions and the provisions of this Third Restated Certificate of Incorporation.

RESOLVED, that the Certificate of Incorporation of this corporation be restated in its entirety to read as follows:

ARTICLE I

The name of the Corporation is Tesoro Corporation (hereinafter called the “Corporation”).

ARTICLE II

The registered office of the Corporation within the State of Delaware is 2711 Centerville Road, Suite 400, City of Wilmington 19808, County of New Castle. The registered agent of the Corporation within the State of Delaware is Corporation Service Company, the business office of which is identical with the registered office of the Corporation.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

ARTICLE IV

(A) The total number of share of all classes of stock which the Corporation shall have the authority to issue is Two Hundred Five Million (205,000,000) shares, of which Two Hundred Million (200,000,000) shares will be Common Stock, par value $0.16 ² / ₃ per share, and Five Million (5,000,000) shares will be Preferred Stock with no par value.

(B)

Statement of Preferences, Limitations and Relative Rights in Respect of Shares of Preferred Stock and Authority of Board of Directors to Fix Designations, Powers, Preferences, Rights, Qualifications, Limitations and Restrictions Thereof Not Fixed Hereby.

Shares of Preferred Stock may be issued from time to time in one or more series, as may be determined from time to time by the Board of Directors, each of said series to be distinctly designated. All shares of any one series of Preferred Stock shall be alike in every particular. The Board of Directors is hereby authorized to fix or alter the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), the redemption price or prices, and the liquidation preferences of any wholly unissued series of preferred shares, and the number of shares constituting any such series and the designation thereof, or any of them; and to increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.

(C)

Statement of Limitations, Relative Rights and Powers in Respect to Common Stock.

Subject to any rights and privileges granted to the holders of Preferred Stock by resolution of the Board of Directors pursuant to the provisions of Section (B) of this Article IV, the holders of Common Stock shall exercise one vote in respect of each share of stock held by them on all matters voted upon by the stockholders; shall be entitled to receive such dividends as may be declared from time to time by the Board of Directors; shall be entitled, upon liquidation or dissolution, to receive all the remaining assets of the Corporation, tangible and intangible, of whatever kind available for distribution ratably in proportion to the number of shares of Common Stock held by them; and shall have such other rights and privileges as may be allowed to them by the laws of the State of Delaware.

(D)

Increase or Decrease of Authorized Stock.

The amount of the authorized stock of the Corporation of any class or classes may be increased or decreased by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote.

ARTICLE V

Election of directors need not be by ballot unless the By-laws of the Corporation shall so provide.

ARTICLE VI

In furtherance and not in limitation of the power conferred upon the Board of Directors by law, the Board of Directors shall have power to make, adopt, alter, amend and repeal from time to time By-Laws of the Corporation, subject to the right of stockholders entitled to vote with respect thereto to alter and repeal By-Laws made by the Board of Directors.

ARTICLE VII

(A) Except as set forth in paragraph (B) of this Article, the affirmative vote or consent of the holders of not less than four-fifths of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, voting for purposes of this Article as one class, shall be required:

(1) to adopt any agreement for the merger or consolidation of the Corporation or any subsidiary (as hereinafter defined) with or into any other person (as hereinafter defined),

(2) to authorize any sale, lease, transfer, exchange, mortgage, pledge or other disposition to any other person of all or substantially all of the assets of the Corporation or any subsidiary, or any part of such assets having a then fair market value equal to or greater than 50 per cent of the then fair market value of the total assets of the Corporation or such subsidiary, or

(3) to authorize the issuance or transfer by the Corporation or any subsidiary of any voting securities of the Corporation or any subsidiary in exchange or payment for the securities or assets of any other person,

if, in any such case, as of the record date for the determination of stockholders entitled to notice thereof and to vote thereon or consent thereto, such other person is, or at any time within the preceding twelve months has been, the beneficial owner (as hereinafter defined) of 10 per cent or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors.

(B) The provisions of paragraph (A) of this Article shall not apply to any transaction described therein if the Board of Directors by resolution shall have approved a memorandum of understanding with such other person setting forth the principal terms of such transaction and such transaction is substantially consistent therewith, provided that a majority of those members of the Board of Directors voting in favor of such resolution were duly elected and acting members of the Board of Directors prior to the time such other person became the beneficial owner of 10 per cent or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors.

(C) The affirmative vote or consent of the holders of not less than four-fifths of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, voting for purposes of this Article as one class, shall be required for the adoption of any plan for the dissolution of the Corporation if the Board of Directors shall not have, by resolution, recommended to the stockholders the adoption of such plan for dissolution of the Company.

(D) For purposes of this Article,

(1) any specified person shall be deemed to be the “beneficial owner” of shares of stock of the Corporation (a) which such specified person or any of its affiliates or associates (as such terms are hereinafter defined) owns, directly or indirectly, whether of record or not, (b) which such specified person or any of its affiliates or associates has

the right to acquire pursuant to any agreement, upon exercise of conversion rights, warrants or options, or otherwise, or (c) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clauses (a) and (b) above), by any other person with which such specified person or any of its affiliates or associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting, or disposing of stock of the Corporation;

(2) a “subsidiary” is any corporation more than 49 per cent of the voting securities of which are owned, directly or indirectly, by the Corporation;

(3) a “person” is any individual, corporation or other entity;

(4) an “affiliate” of a specified person is any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the specified person; and

(5) an “associate” of a specified person is (a) any person of which such specified person is an officer or partner or is, directly or indirectly, the beneficial owner of 10 per cent or more of any class of equity securities, (b) any trust or other estate in which such specified person has a substantial beneficial interest or as to which such specified person serves as trustee or in a similar fiduciary capacity, or (c) any relative or spouse of such specified person, or any relative of such spouse, who has the same home as such specified person or who is a director or officer of such specified person or any corporation which controls or is controlled by such specified person.

(E) For purposes of determining whether a person owns beneficially 10 per cent or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, the outstanding shares of stock of the Corporation shall include shares deemed owned through application of clause (a), (b) or (c) of paragraph (D)(1) above but shall not include any other shares which may be issuable pursuant to any agreement or upon exercise of conversion rights, warrants or options, or otherwise.

(F) The Board of Directors shall have the power and duty to determine, for purposes of this Article, on the basis of information known to such Board,

(1) the fair market value of any assets of the Corporation or any subsidiary proposed to be disposed of in a transaction of the character referred to in paragraph (A)(2) of this Article, and the fair market value of the total assets of the Corporation or such subsidiary;

(2) whether any person referred to in paragraph (A) of this Article owns beneficially 10 per cent or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors; and

(3) whether a proposed transaction is substantially consistent with any memorandum of understanding of the character referred to in paragraph (B) of this Article.

Any such determination shall be conclusive and binding for all purposes of this Article.

(G) No amendment to this Restated Certificate of Incorporation or to the By-Laws shall amend, modify or repeal any or all of the provisions of this Article VII unless adopted by the affirmative vote or consent of the holders of not less than 80% of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, voting for the purposes of this Article as a single class; provided, however , that in the event the Board of Directors of the Corporation shall by resolution unanimously recommend to the stockholders the adoption of any such amendment, the stockholders of record holding a majority of the outstanding shares of stock of the Corporation entitled to vote in elections of directors may amend, modify or repeal any or all of such provisions.

(H) Notwithstanding the foregoing provision of this Article, this Article shall become null, void and of no further force or effect upon the expiration of the option granted by MetLife Security Insurance Company of Louisiana (“MetLife Louisiana”) to the Corporation to acquire shares of capital stock of the Corporation held by MetLife Louisiana as set forth in the Call Option Agreement dated February 9, 1994, between MetLife Louisiana and the Corporation, other than upon the expiration thereof on account of such option having been exercised in full.

ARTICLE VIII

Notwithstanding the provisions of this Restated Certificate of Incorporation and any provision of the By-Laws of the Corporation, in the absence of approval by 66 ² / ₃ % of the independent directors of the Corporation, voting at a meeting duly called for such purpose, of an amendment to the Amended and Restated Memorandum of Understanding dated December 14, 1993 or the Call Option Agreement dated February 9, 1994, each between MetLife Security Insurance Company of Louisiana (“MetLife Louisiana”) and the Corporation, which would be adverse to the Corporation, no such amendment shall be approved, agreed to or executed by the Corporation unless approved by the affirmative vote or consent of the holders of not less than 80% of the outstanding shares of capital stock of the Corporation entitled to vote in elections of directors, voting for the purposes of this Article as a single class. For purposes hereof, an independent director shall be any director other than Ray C. Adam, Charles F. Luce, Stewart G. Nagler, James Q. Riordan, William S. Sneath or any person who is an affiliate (within the meaning set forth in Article VII hereof) of MetLife Louisiana

ARTICLE IX

A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware or (iv) for any transaction from which the director derived an improper personal benefit.

If the General Corporation Law of the State of Delaware is amended hereafter to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent authorized by the General Corporation Law of the State of Delaware, as so amended.

Any repeal or modification of this Article shall not adversely affect any right of protection of a director of the Corporation existing hereunder with respect to any act or omission occurring prior to or at the time of such repeal or modification.

IN WITNESS WHEREOF, Tesoro Corporation has caused this Third Restated Certificate of Incorporation to be signed in its corporate name by its Executive Vice President, General Counsel and Secretary and its corporate seal to be affixed hereto and attested by its Associate General Counsel-Corporate and Assistant Secretary this 10th day of August, 2012.


TESORO CORPORATION

By		/s/ Charles S. Parrish
		Charles S. Parrish Executive Vice President, General Counsel and Secretary


ATTEST:

By		/s/ D. Jeffrey Haffner
		D. Jeffrey Haffner Associate General Counsel – Corporate and Assistant Secretary

Exhibit 4.1

TESORO CORPORATION

% SENIOR NOTES DUE 2017

% SENIOR NOTES DUE 2022

INDENTURE

Dated as of , 2012

U.S. Bank National Association

Trustee

TABLE OF CONTENTS


		Page

ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.	Definitions.		1
SECTION 1.02.	Other Definitions.		26
SECTION 1.03.	Incorporation by Reference of Trust Indenture Act.		26
SECTION 1.04.	Rules of Construction.		26

ARTICLE II THE NOTES

SECTION 2.01.	Form and Dating.		27
SECTION 2.02.	Execution and Authentication.		28
SECTION 2.03.	Registrar and Paying Agent.		28
SECTION 2.04.	Paying Agent to Hold Money in Trust.		29
SECTION 2.05.	Holder Lists.		29
SECTION 2.06.	Transfer and Exchange.		29
SECTION 2.07.	Replacement Notes.		33
SECTION 2.08.	Outstanding Notes.		34
SECTION 2.09.	Treasury Notes.		34
SECTION 2.10.	Temporary Notes.		34
SECTION 2.11.	Cancellation.		35
SECTION 2.12.	Defaulted Interest.		35
SECTION 2.13.	Additional Notes.		35
SECTION 2.14.	One Class of Notes.		35
SECTION 2.15.	CUSIP Numbers.		35

ARTICLE III REDEMPTION AND PREPAYMENT

SECTION 3.01.	Notices to Trustee.		36
SECTION 3.02.	Selection of Notes to be Redeemed.		36
SECTION 3.03.	Notice of Redemption.		36
SECTION 3.04.	Effect of Notice of Redemption.		37
SECTION 3.05.	Deposit of Redemption Price.		37
SECTION 3.06.	Notes Redeemed in Part.		38
SECTION 3.07.	Optional Redemption.		38
SECTION 3.08.	Mandatory Redemption.		39
SECTION 3.09.	Offer to Purchase by Application of Excess Asset Sale Proceeds.		39

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		Page

ARTICLE IV COVENANTS

SECTION 4.01.	Payment of Notes.		41
SECTION 4.02.	Maintenance of Office or Agency.		41
SECTION 4.03.	Reports.		41
SECTION 4.04.	Compliance Certificate.		42
SECTION 4.05.	Taxes.		43
SECTION 4.06.	Waiver of Stay, Extension and Usury Laws.		43
SECTION 4.07.	Restricted Payments.		43
SECTION 4.08.	Dividend and Other Payment Restrictions Affecting Subsidiaries.		47
SECTION 4.09.	Incurrence of Indebtedness and Issuance of Disqualified Equity.		48
SECTION 4.10.	Asset Sales.		49
SECTION 4.11.	Transactions with Affiliates.		51
SECTION 4.12.	Liens.		52
SECTION 4.13.	[Reserved].		52
SECTION 4.14.	Corporate Existence.		52
SECTION 4.15.	Offer to Repurchase upon Change of Control Triggering Event.		52
SECTION 4.16.	Additional Subsidiary Guarantees.		54
SECTION 4.17.	Effectiveness of Covenants and Other Provisions Upon an Investment Grade Rating Event; Investment Grade Covenant.		54

ARTICLE V SUCCESSORS

SECTION 5.01.	Merger, Consolidation, or Sale of Assets.		55
SECTION 5.02.	Successor Corporation Substituted.		55

ARTICLE VI DEFAULTS AND REMEDIES

SECTION 6.01.	Events of Default.		56
SECTION 6.02.	Acceleration.		57
SECTION 6.03.	Other Remedies.		58
SECTION 6.04.	Waiver of Past Defaults.		58
SECTION 6.05.	Control by Majority.		58
SECTION 6.06.	Limitation on Suits.		59
SECTION 6.07.	Rights of Holders of Notes to Receive Payment.		59
SECTION 6.08.	Collection Suit by Trustee.		59
SECTION 6.09.	Trustee May File Proofs of Claim.		59
SECTION 6.10.	Priorities.		60
SECTION 6.11.	Undertaking for Costs.		60

ARTICLE VII TRUSTEE

SECTION 7.01.	Duties of Trustee.		61

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		Page
SECTION 7.02.	Rights of Trustee.		62
SECTION 7.03.	Individual Rights of Trustee.		63
SECTION 7.04.	Trustee’s Disclaimer.		63
SECTION 7.05.	Notice of Defaults.		63
SECTION 7.06.	Reports by Trustee to Holders of the Notes.		63
SECTION 7.07.	Compensation and Indemnity.		63
SECTION 7.08.	Replacement of Trustee.		64
SECTION 7.09.	Successor Trustee by Merger, Etc.		65
SECTION 7.10.	Eligibility; Disqualification.		65
SECTION 7.11.	Preferential Collection of Claims Against Company.		65

ARTICLE VIII SATISFACTION AND DISCHARGE; DEFEASANCE

SECTION 8.01.	Satisfaction and Discharge of Indenture.		66
SECTION 8.02.	Application of Trust Money.		67
SECTION 8.03.	Option to Effect Legal Defeasance or Covenant Defeasance.		67
SECTION 8.04.	Legal Defeasance and Discharge.		67
SECTION 8.05.	Covenant Defeasance.		68
SECTION 8.06.	Conditions to Legal or Covenant Defeasance.		68
SECTION 8.07.	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.		69
SECTION 8.08.	Repayment to Company.		70
SECTION 8.09.	Reinstatement.		70

ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01.	Without Consent of Holders of Notes.		70
SECTION 9.02.	With Consent of Holders of Notes.		71
SECTION 9.03.	Compliance with Trust Indenture Act.		73
SECTION 9.04.	Revocation and Effect of Consents.		73
SECTION 9.05.	Notation on or Exchange of Notes.		73
SECTION 9.06.	Trustee to Sign Amendments, Etc.		73

ARTICLE X GUARANTEES

SECTION 10.01.	Subsidiary Guarantees.		74
SECTION 10.02.	Execution and Delivery of Additional Subsidiary Guarantee or Supplemental Indenture; Notation of Subsidiary Guarantee.		74
SECTION 10.03.	Guarantors May Consolidate, Etc., on Certain Terms.		75
SECTION 10.04.	Releases.		76
SECTION 10.05.	Limitation on Guarantor Liability; Contribution.		76
SECTION 10.06.	Trustee to Include Paying Agent.		77

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		Page

ARTICLE XI MISCELLANEOUS

SECTION 11.01.	Trust Indenture Act Controls.		77
SECTION 11.02.	Notices.		77
SECTION 11.03.	Communication by Holders of Notes with Other Holders of Notes.		78
SECTION 11.04.	Certificate and Opinion as to Conditions Precedent.		78
SECTION 11.05.	Statements Required in Certificate or Opinion.		79
SECTION 11.06.	Rules by Trustee and Agents.		79
SECTION 11.07.	No Personal Liability of Directors, Officers, Employees and Stockholders.		79
SECTION 11.08.	Governing Law.		79
SECTION 11.09.	No Adverse Interpretation of Other Agreements.		79
SECTION 11.10.	Successors.		79
SECTION 11.11.	Severability.		80
SECTION 11.12.	Counterpart Originals.		80
SECTION 11.13.	Table of Contents, Headings, Etc.		80

Exhibit A-1	FORM OF 2017 NOTE		A-1
Exhibit A-2	FORM OF 2022 NOTE		A-1
EXHIBIT B	Form of Supplemental Indenture — Additional Subsidiary Guarantees		B-1

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CROSS-REFERENCE TABLE


Trust Indenture Act Section	Indenture Section
310(a)(1)		7.10
(a)(2)		7.10
(a)(3)		N.A.
(a)(4)		N.A.
(a)(5)		7.10
(b)		7.10
(c)		N.A.
311(a)		7.11
(b)		7.11
(c)		N.A.
312(a)		2.05
(b)		11.03
(c)		11.03
313(a)		7.06
(b)(2)		7.06,7.07
(c)		7.06,14.02
(d)		7.06
314(a)		4.03
(a)(4)		11.04
(c)(1)		N.A.
(c)(2)		N.A.
(c)(3)		N.A.
(e)		14.05
(f)		N.A.
315(a)		7.01
(b)		7.05
(c)		7.01
(d)		7.01
(e)		6.11
316(a)(last sentence)		2.09
(a)(1)(A)		6.05
(a)(1)(B)		6.04
(a)(2)		N.A.
(b)		6.07
(c)		2.12
317(a)(1)		6.09
(a)(2)		6.09
(b)		2.04
318(a)		11.01
(b)		11.01
(c)		11.01

N.A. means not applicable.

This Cross-Reference Table shall not, for any purpose, be deemed to be part of this Indenture.

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INDENTURE dated as of , 2012, by and among Tesoro Corporation, a Delaware corporation (the “ Company ”), the Guarantors (as defined herein), and U.S. Bank National Association, as trustee (the “ Trustee ”).

The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Initial Notes and the Additional Notes (as defined herein):

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions .

“ 2017 Notes Adjusted Treasury Rate ” means, with respect to any redemption date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities” for the maturity corresponding to the Comparable Treasury Issue with respect to the applicable Notes called for redemption (if no maturity is within three months before or after , 2017, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the 2017 Notes Comparable Treasury Price for such redemption date, in each case calculated on the third business day immediately preceding the redemption date, plus, in the case of each of clause (i) and (ii), 0.50%.

“ 2017 Notes Comparable Treasury Issue ” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term from the redemption date to , 2017, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to , 2017.

“ 2017 Notes Comparable Treasury Price ” means, with respect to any redemption date, if clause (ii) of the 2017 Notes Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the applicable trustee, Reference Treasury Dealer Quotations for the redemption date.

“ 2022 Notes Adjusted Treasury Rate ” means, with respect to any redemption date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities” for the maturity corresponding to the Comparable Treasury Issue with respect to the applicable Notes called for redemption (if no maturity is within three months before or after , 2017, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the 2022 Notes Comparable Treasury Price for such redemption date, in each case calculated on the third business day immediately preceding the redemption date, plus, in the case of each of clause (i) and (ii), 0.50%.

“ 2022 Notes Comparable Treasury Issue ” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term from the redemption date to , 2017, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to , 2017.

“ 2022 Notes Comparable Treasury Price ” means, with respect to any redemption date, if clause (ii) of the 2022 Notes Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the applicable trustee, Reference Treasury Dealer Quotations for the redemption date.

“ 6 ¹ / ₂ % Senior Notes ” means the 6 ¹ / ₂ % senior notes due 2017 issued pursuant to the 6 ¹ / ₂ % Senior Notes Indenture.

“ 6 ¹ / ₂ % Senior Notes Indenture ” means that certain indenture, dated as of May 29, 2007, by and among the Company, the guarantors party thereto and U.S. Bank National Association, as trustee.

“ 6 ⁵ / ₈ % Senior Notes ” means the 6 ⁵ / ₈ % senior notes due 2015 issued pursuant to an indenture, dated as of November 16, 2005, by and among the Company, the guarantors party thereto and U.S. Bank National Association, as trustee.

“ 2017 Notes ” means the $ million aggregate principal amount of % Senior Notes due 2017 issued by the Company on the Issue Date.

“ 2022 Notes ” means the $ million aggregate principal amount of % Senior Notes due 2022 issued by the Company on the Issue Date.

“ Acquired Debt ” means, with respect to any specified Person, (1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Restricted Subsidiary of such specified Person and (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person, but excluding, in any event, Indebtedness that is extinguished, retired or repaid in connection with such Person merging with or becoming a Restricted Subsidiary of such specified Person.

“ Additional Notes ” means % senior notes due 2017 and % senior notes due 2022 of the Company issued in compliance with and under this Indenture after the Issue Date and having terms identical to the terms of the Initial Notes of the same series.

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “ control ” (including, with correlative meanings, the terms “ controlling ,” “ controlled by ” and “ under common control with ”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” shall have correlative meanings.

“ Agent ” means any Registrar, Paying Agent or Authenticating Agent.

“ Applicable 2017 Notes Premium ” means, with respect to any 2017 Notes on any redemption date, the excess, if any, of (A) the present value at such redemption date of (i) the redemption price of such 2017 Note on , 2017, plus (ii) all required interest payments due on such 2017 Note through , 2017 (excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the 2017 Notes Adjusted Treasury Rate; over (B) the principal amount of such 2017 Note.

“ Applicable 2022 Notes Premium ” means, with respect to any 2022 Notes on any redemption date, the excess, if any, of (A) the present value at such redemption date of (i) the redemption price of such 2022 Note on , 2017 (such redemption price being set forth in the table appearing in Section 3.07 hereof), plus (ii) all required interest payments due on such 2022 Note through , 2017 (excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the 2022 Notes Adjusted Treasury Rate; over (B) the principal amount of such 2022 Note.

“ Applicable Premium ” means, with respect to the 2017 Notes, the Applicable 2017 Notes Premium, and with respect to the 2022 Notes, the Applicable 2022 Notes Premium.

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“ Applicable Procedures ” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

“ Asset Sale ” means (i) the sale, lease, conveyance or other disposition of any assets or rights (including, without limitation, by way of a Sale/Leaseback Transaction) of the Company or any of its Restricted Subsidiaries other than in the ordinary course of business ( provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by Sections 4.15 and 5.01 hereof and not by the provisions in Section 4.10 hereof); and (ii) the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company’s Restricted Subsidiaries, in the case of either clause (i) or (ii), whether in a single transaction or a series of related transactions, (a) that have a Fair Market Value in excess of $50.0 million or (b) for Net Proceeds in excess of $50.0 million; provided that the following will not be deemed to be Asset Sales: (1) any sale or exchange of production of crude oil, natural gas and natural gas liquids, or refined products or residual hydrocarbons, or any other asset or right constituting inventory, made in the ordinary course of the Permitted Business; (2) any disposition of assets in trade or exchange for assets of comparable Fair Market Value used or usable in any Permitted Business (including, without limitation, the trade or exchange for a controlling interest in another business or all or substantially all of the assets or operating line of a business, in each case, engaged in a Permitted Business or for other non-current assets to be used in a Permitted Business, including, without limitation, assets or Investments of the nature or type described in clause (13) of the definition of “Permitted Investments”); provided that any cash or Cash Equivalents received by Tesoro or a Restricted Subsidiary in connection with such trade or exchange (net of any transaction costs of the type deducted under the definition of “Net Proceeds”) shall be treated as Net Proceeds of an Asset Sale and shall be applied in the manner set forth in Section 4.10 hereof; (3) a transfer of assets by the Company to a Restricted Subsidiary of the Company or by a Restricted Subsidiary of the Company to the Company or to a Restricted Subsidiary of the Company; (4) an issuance or sale of Equity Interests by a Restricted Subsidiary of the Company to the Company or to another Restricted Subsidiary of the Company; (5) (A) a Permitted Investment or (B) a Restricted Payment that is permitted by Section 4.07 hereof; (6) the trade, sale, exchange or other disposition of cash or Cash Equivalents or the unwinding of any Hedging Obligations; (7) any sale, assignment, lease, license, transfer, abandonment or other disposition of (A) damaged, worn-out, unserviceable or other obsolete or excess equipment or other property or (B) other property no longer necessary for the proper conduct of the business of the Company or any of its Subsidiaries; (8) the abandonment or relinquishment of assets or property in the ordinary course of business, including without limitation the abandonment, relinquishment or farm-out of oil and gas leases, concessions or drilling or exploration rights or interests therein; (9) any lease of assets entered into in the ordinary course of business and with respect to which the Company or any Restricted Subsidiary of the Company is the lessor and the lessee has no option to purchase such assets for less than fair market value at any time the right to acquire such asset occurs; (10) the disposition of assets received in settlement of debts accrued in the ordinary course of business; (11) the creation or perfection of a Lien that is not prohibited by this Indenture and the disposition of any assets or rights resulting from the enforcement thereof; (12) the surrender or waiver of contract rights or the settlement, release or surrender of contractual, non-contractual or other claims of any kind; (13) any sale or other disposition pursuant to the Omnibus Agreement; (14) the grant in the ordinary course of business of any non-exclusive license of patents, trademarks, registrations therefor and other similar intellectual property; and (15) any sale or other disposition of Capital Stock in or Indebtedness of an Unrestricted Subsidiary

“ Attributable Amount ” means, with respect to any Sale/Leaseback Transaction involving any Principal Property, as at the time of determination, the present value (discounted at the interest rate borne by the Notes, compounded annually) of the total obligations of the lessee for rental payments (other than amounts required to be paid on account of property taxes, maintenance, repairs, insurance, assessments,

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utilities, operating and labor costs and other items that do not constitute payments for property rights) during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended), including, in the case of any lease that is terminable by the lessee upon payment of penalty, the amount of such penalty (but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated); provided , however , that the Attributable Amount of each of the following Sale/Leaseback Transactions involving a Principal Property shall, in each case, be zero: (1) a Sale/Leaseback Transaction in which the lease is for a period, including renewal rights, not in excess of three years; (2) a Sale/Leaseback Transaction in which the transfer of the Principal Property is made within 270 days of the acquisition or construction of, or the completion of a material improvement to, such Principal Property; (3) a Sale/Leaseback Transaction in which the lease secures or relates to industrial revenue or pollution control bonds; (4) a Sale/Leaseback Transaction in which the transaction is between or among the Company and one or more Restricted Subsidiaries or between or among Restricted Subsidiaries; or (5) a Sale/Leaseback Transaction pursuant to which the Company, within 270 days after the completion of the transfer of the Principal Property, applies toward the retirement of its Indebtedness or the Indebtedness of a Restricted Subsidiary, or to the purchase of other property constituting a Principal Property, the greater of the net proceeds from the transfer of the Principal Property; provided , however , that the amount that must be applied to the retirement of Indebtedness shall be reduced by (a) the principal amount of any debentures, notes or debt securities (including the Notes) of the Company or a Restricted Subsidiary surrendered to the applicable trustee or agent for retirement and cancellation within 270 days of the completion of the transfer of the Principal Property, (b) the principal amount of any Indebtedness not included in clause (5)(a) of this definition to the extent such amount of Indebtedness is voluntarily retired by the Company or a Restricted Subsidiary within 270 days of the completion of the transfer of the Principal Property and (c) all fees and expenses associated with the Sale/Leaseback Transaction.

“ Bankruptcy Code ” means Title 11, U.S. Code, as amended, or any similar federal or state law for the relief of debtors.

“ Board of Directors ” means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of such Board.

“ Borrowing Base ” means, as of any date, an amount equal to:

(1) 90% of the face amount of all accounts receivable owned by the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date that were not more than 90 days past due; plus

(2) 85% of the book value (before any reduction from current cost to LIFO cost) of all inventory owned by the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date; plus

(3) 100% of the cash and Cash Equivalents owned by the Company and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date.

“ Business Day ” means any day other than a Legal Holiday.

“ Calculation Date ” shall have the meaning provided in the definition of “Fixed Charge Coverage Ratio.”

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“ Capital Lease Obligations ” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty; provided that any obligations of the Company or its Restricted Subsidiaries, or of a special purpose or other entity not consolidated with the Company and its Restricted Subsidiaries (i) that were not or would not have been included on the consolidated balance sheet of the Company as capital lease obligations on the Issue Date and (ii) that are subsequently recharacterized as capital lease obligations or, in the case of such a special purpose or other entity becoming consolidated with the Company and its Restricted Subsidiaries, due to a change in accounting treatment or otherwise after the Issue Date, may, in the Company’s sole discretion, not be treated as a Capital Lease Obligations or Indebtedness.

“ Capital Stock ” means (i) in the case of a corporation, corporate stock, (li) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

“ Cash Equivalents ” means (i) United States dollars, Canadian dollars and the Euro, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than one year from the date of acquisition, (iii) certificates of deposit, time deposits and Eurodollar time deposits with maturities of not more than one year from the date of acquisition, bankers’ acceptances with maturities of not more than one year from the date of acquisition and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of $500.0 million and $100.0 million (or the U.S dollar equivalent as of the date of determination) in the case of non-U.S. banks, (iv) repurchase obligations for underlying securities of the types described in clauses (ii) and (iii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above; (v) commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P with maturities of not more than one year from the date of acquisition; (vi) marketable short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case with maturities of not more than two years from the date of acquisition; (vii) investment funds investing 95% of their assets in securities of the types described in clauses (i) through (vi) above and (viii) through (x) below; (viii) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof having an Investment Grade Rating from either Moody’s or S&P with maturities of not more than two years from the date of acquisition; (ix) Indebtedness or preferred stock issued by Persons with a rating of “A” or higher from S&P or “A2” or higher from Moody’s with maturities of one year or less from the date of acquisition; and (x) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s. Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clause (i) above, provided that such amounts are converted into any currency listed in clause (i) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.

“ Change of Control ” means the occurrence of one or more of the following events: (i) any sale, lease or other transfer (in one transaction or a series of related transactions) other than by way of merger or consolidation of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken

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as a whole to any “person” (as such term is used in Section 13(d) of the Exchange Act) unless immediately following such sale, lease or other transfer in compliance with this Indenture such assets are owned, directly or indirectly, by (A) the Company or a Subsidiary of the Company or (B) a Person controlled by the Company or a Subsidiary of the Company; (ii) the approval by the holders of Capital Stock of the Company of any plan or proposal for the liquidation or dissolution of the Company; (iii) the acquisition in one or more transactions, of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of Voting Securities of the Company by any Person or Group that beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, at least a majority of the total voting power of the Company’s then outstanding Voting Stock; provided , however that a transaction in which the Company becomes a Subsidiary of another Person (other than a Person that is an individual) shall not constitute a Change of Control if (a) the shareholders of the Company immediately prior to such transaction “beneficially own” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly through one or more intermediaries, at least a majority of the total voting power of the outstanding Voting Stock of such other Person, immediately following the consummation of such transaction and (b) immediately following the consummation of such transaction, no “person” (as such term is defined above), other than such Person (but including the holders of the Equity Interests of such other Person), “beneficially owns” (as such term is defined above), directly or indirectly through one or more intermediaries, a majority of the total voting power of the outstanding Voting Stock of the Company. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur upon the consummation of any actions undertaken by the Company or any of its Restricted Subsidiaries solely for the purpose of changing the legal structure of the Company or such Restricted Subsidiary.

“ Change of Control Triggering Event ” means the occurrence of both a Change of Control and a Rating Decline with respect to the Notes.

“ Clearstream ” means Clearstream Banking, sociètè anonyme.

“ Commodity Hedging Agreements ” means agreements or arrangements designed to protect such Person against fluctuations in the price of (i) crude oil, natural gas, or other hydrocarbons, including refined hydrocarbon products; (ii) electricity and other sources of energy or power used in the Company’s refining or processing operations; or (iii) any other commodity; in each case, in connection with the conduct of its business and not for speculative purposes.

“ Commodity Hedging Obligations ” means, with respect to any Person, the net payment Obligations of such Person under Commodity Hedging Agreements.

“ Company ” means the Person named as the “Company” in the introductory paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter, the term “Company” shall mean such successor Person and each successive successor Person.

“ Comparable Treasury Issue ” means, with respect to the 2017 Notes, the 2017 Notes Comparable Treasury Issue, and with respect to the 2022 Notes, the 2022 Notes Comparable Treasury Issue.

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“ Consolidated Cash Flow ” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period, (i) increased (without duplication) by: (a) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted (and not added back) in computing such Consolidated Net Income, plus (b) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest expense, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net payments (if any) pursuant to Hedging Obligations (including amortization of fees)), to the extent that any such expense was deducted in computing such Consolidated Net Income, plus (c) depreciation and amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation and amortization were deducted in computing such Consolidated Net Income, plus (d) any other non-cash items (including without limitation write-downs and impairment of property, plant, equipment and intangibles and other long-lived assets and the impact of purchase accounting, but excluding any such non-cash item to the extent that it represents an accrual of, or reserve for, cash expenditures in any future period), plus (e) the amount of any restructuring charge or reserve or non-recurring integration costs deducted (and not added back) in such period computing Consolidated Net Income, including any one-time costs incurred in connection with acquisitions after the Issue Date and costs related to the closure and/or consolidation of facilities, (2) decreased by (without duplication) non-cash gains increasing such Consolidated Net Income for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or a reserve for a potential cash item that reduced Consolidated Cash Flow in any prior period in each case, on a consolidated basis, and (3) increased or decreased by (without duplication): (a) any net gain or loss resulting in such period from Hedging Obligations and the application of Financial Accounting Standards Codification No. 815—Derivatives and Hedging, plus or minus, as applicable, (b) any net gain or loss resulting in such period from currency translation gains or losses related to currency remeasurements of Indebtedness (including any net loss or gain resulting from hedge agreements for currency exchange risk and revaluations of intercompany balances).

“ Consolidated Net Income ” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries (for such period, on a consolidated basis, determined in accordance with GAAP); provided that (i) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof; (ii) the Net Income of any Restricted Subsidiary that is not a Subsidiary Guarantor shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders; (iii) the cumulative effect of a change in accounting principles shall be excluded; (iv) any ceiling limitation write-downs under SEC guidelines shall be treated as capitalized costs, as if such writedown had not occurred; (v) an amount equal to any extraordinary, unusual or non-recurring gains or losses, including, without limitation, any fees, expenses or charges related to any Permitted Investment, acquisition or disposition permitted by the Indenture, offering of Capital Stock or Indebtedness of such Person permitted to be Incurred under the Indenture (in each case, whether or not successful) but excluding any restructuring or similar charge, shall be excluded, (vi) any non-cash compensation expense realized for any grant of stock, stock options or other equity-based awards shall be excluded; (vii) non-cash gains and losses attributable to movement in the mark-to-market valuation of Hedging Obligations pursuant

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to Accounting Standards Codification No. 815, shall be excluded; (viii) any impairment charge or asset write-off pursuant to Accounting Standards Codification No. 350 and Accounting Standards Codification No. 350 shall be excluded; (ix) any gain or loss realized (less all fees and expenses or charges related thereto) upon the sale or other disposition of any property of such Person or any of its consolidated Subsidiaries (including pursuant to any Sale/Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of business, shall be excluded; (x) any net income (loss) of any other Person acquired during the specified period for any period prior to the date of such acquisition, shall be excluded; and (xi) any net after-tax income or loss (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness, including, without limitation, any make-whole premium or similar charge related to any Indebtedness being refinanced, shall be excluded.

“ Consolidated Net Tangible Assets ” means, with respect to any Person at any date of determination, the aggregate amount of total assets included in such Person’s most recent fiscal quarter for which internal financial statements are available, determined on a pro forma basis in a manner consistent with the pro forma basis contained in the definition of “Fixed Charge Coverage Ratio,” less (a) all current liabilities reflected in such balance sheet, and (b) all goodwill, trademarks, patents, unamortized debt discounts and expenses and other like intangibles reflected in such balance sheet.

“ Consolidated Net Worth ” means the total of the amounts shown on a Person’s consolidated balance sheet determined in accordance with GAAP, as of the end of such Person’s most recent fiscal quarter for which internal financial statements are available prior to the taking of any action for the purpose of which the determination is being made, as the sum of (1) the par or stated value of all of such Person’s outstanding Capital Stock; (2) paid-in capital or capital surplus relating to such Capital Stock and (3) any retained earnings or earned surplus less (A) any accumulated deficit and (B) any amounts attributable to Disqualified Equity.

“ Corporate Trust Office of the Trustee ” shall be at the address of the Trustee specified in Section 11.02 hereof or such other address as to which the Trustee may give notice to the Company.

“ Credit Facilities ” means, with respect to the Company or any of its Restricted Subsidiaries, one or more debt facilities (including, without limitation, the Senior Credit Facility), commercial paper facilities, indentures or Debt Issuances with banks, investment banks, insurance companies, mutual funds, other institutional lenders, institutional investors or any of the foregoing providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders, other financiers or to special purpose entities formed to borrow from (or sell such receivables to) such lenders or other financiers against such receivables), letters of credit, bankers’ acceptances, other borrowings or Debt Issuances, in each case, as amended, restated, modified, renewed, extended, refunded, replaced or refinanced (in each case, without limitation as to amount), in whole or in part, from time to time (including through one or more Debt Issuances) and any agreements and related documents governing Indebtedness or Obligations incurred to refinance amounts then outstanding or permitted to be outstanding, whether or not with the original administrative agent, lenders, investment banks, insurance companies, mutual funds, other institutional lenders, institutional investors or any of the foregoing and whether provided under the original agreement, indenture or other documentation relating thereto.

“ Currency Exchange Protection Obligations ” mean, in respect of a Person, any foreign exchange contract, currency swap agreement, currency option or other similar agreement or arrangement designed to protect such Person against fluctuations in currency exchange rates.

“ Custodian ” means any receiver, trustee, assignee, liquidator, sequester or similar official under the Bankruptcy Code.

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“ Debt Issuances ” means, with respect to the Company or any Restricted Subsidiary, one or more issuances after the Issue Date of Indebtedness evidenced by notes, debentures, bonds or other similar securities or instruments.

“ Default ” means any event that is or with the passage of time or the giving of notice (or both) would be an Event of Default.

“ Definitive Note ” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

“ Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

“ Designated Non-cash Consideration ” means, the fair market value of non-cash consideration received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Company, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

“ Designated Proceeds ” means the amount of net cash proceeds received by the Company from each issuance or sale since the Issue Date of mandatorily convertible preferred stock of the Company (other than Disqualified Equity), that at the time of such issuance was designated by the Company as “Designated Proceeds” pursuant to an Officers’ Certificate delivered to the Trustee; provided , however , that if the mandatorily convertible preferred stock providing such Designated Proceeds is thereafter converted into common stock of the Company, that portion of the Designated Proceeds that has not been paid as dividends pursuant to clause (x) of the second paragraph of Section 4.07 hereof will no longer be considered to be Designated Proceeds.

“ Disqualified Equity ” means, with respect to any person, any Equity Interest that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable, in each case, at the option of the holder of the Equity Interest) or upon the happening of any event, it matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Equity Interest, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature, except such Equity Interest that is solely redeemable with, or solely exchangeable for, any Equity Interest of such Person that is not Disqualified Equity. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Equity solely because the holders thereof have the right to require the Company or any of its Restricted Subsidiaries to repurchase Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Equity if the terms of such Capital Stock provide that the Company or such Restricted Subsidiary may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07 hereof.

“ Domestic Subsidiary ” means any Restricted Subsidiary of the Company that was formed under the laws of the United States or any state of the United States or the District of Columbia.

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“ Equity Interests ” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“ Equity Offering ” means any public or private sale of Equity Interests of the Company (other than Disqualified Equity) made for cash after the Issue Date.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

“ Euroclear ” means Euroclear Bank S.A./N.V.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Existing Indebtedness ” means the aggregate amount of Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date.

“ Existing Senior Notes ” means the Company’s 6 ⁵ / ₈ % senior notes due 2015 ($450 million aggregate principal amount outstanding), 6 ¹ / ₂ % senior notes due 2017 ($473 million aggregate principal amount outstanding) and 9 ³ / ₄ % senior notes due 2019 ($300 million aggregate principal amount outstanding).

“ Fair Market Value ” means, with respect to consideration received or to be received, or given or to be given, pursuant to any transaction by the Company or any Restricted Subsidiary, the fair market value of such consideration as determined by the Company, whose determination shall be conclusive; provided if such fair market value is determined to exceed $150 million, such fair market value shall be as determined in good faith by the Board of Directors of the Company.

“ Financial Hedging Agreements ” means (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates, currency exchange rates or commodity prices and not for speculative purposes.

“ Financial Hedging Obligations ” means, with respect to any Person, the net payment Obligations of such Person under Financial Hedging Agreements.

“ Fixed Charge Coverage Ratio ” means, with respect to any Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than revolving borrowings under any Credit Facility) or issues, repurchases or redeems Disqualified Equity subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “ Calculation Date ”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of Disqualified Equity and the use of proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period. In addition, for purposes of making the computation referred to above: (i) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers,

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asset purchase transactions or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be given pro forma effect as if they had occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated giving pro forma effect to any expense and cost reductions that have occurred or, in the reasonable judgment of the Chief Financial Officer or Chief Accounting Officer of the Company, are reasonably expected to occur (regardless of whether those operating improvements or cost savings could then be reflected in pro forma financial statements prepared in accordance with Regulation S-X promulgated by the Commission or any regulation or policy related thereto); (ii) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded; (iii) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the referent Person or any of its Restricted Subsidiaries following the Calculation Date; (iv) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the average rate for the applicable period to the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months); and (v) interest on Indebtedness under a revolving credit facility computed on a pro forma basis shall be calculated based on the average daily balance of such Indebtedness for the four fiscal quarters subject to the pro forma calculation, except as set forth in the first paragraph of this definition.

“ Fixed Charges ” means, with respect to any Person for any period, (a) the sum, without duplication, of: (i) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation or duplication, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of the effect of all payments (if any) made or received pursuant to Hedging Obligations); plus (ii) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; plus (iii) any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries (whether or not such guarantee or Lien is called upon); plus (iv) all dividend payments, whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividend payments on Equity Interests payable solely in Equity Interests of the Company (other than Disqualified Equity) or to the Company or a Restricted Subsidiary of the Company, minus (b) to the extent included in (a) above, write-off of deferred financing costs of such Person and its Restricted Subsidiaries during such period and any charge related to, or any premium or penalty paid in connection with, paying any such Indebtedness of such Person and its Restricted Subsidiaries prior to its Stated Maturity.

“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time.

“ Global Note Legend ” means the legend set forth in Section 2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture.

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“ Global Notes ” means, individually and collectively, each of the Notes issued or issuable in the global form of Exhibit A hereto issued in accordance with Section 2.01 or 2.06(d)(iv) hereof.

“ Government Securities ” means securities that are: (1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such Government Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.

“ Guarantee ” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof or pledging assets to secure), of all or any part of any Indebtedness.

“ Guarantors ” means:

(i) each of Gold Star Maritime Company, Smiley’s Super Service, Inc., Tesoro Alaska Company, Tesoro Aviation Company, Tesoro Companies, Inc., Tesoro Environmental Resources Company, Tesoro Far East Maritime Company, Tesoro Hawaii, LLC, Tesoro Maritime Company, Tesoro Northstore Company, Tesoro Refining and Marketing Company, Tesoro Trading Company, Tesoro Wasatch, LLC, Tesoro Sierra Properties, LLC, Tesoro South Coast Company, LLC and Tesoro West Coast Company, LLC;

(ii) each of the Company’s Restricted Subsidiaries that becomes a guarantor of the Notes pursuant to Section 4.16 ; and

(iii) each of the Company’s Restricted Subsidiaries executing a supplemental indenture in which such Restricted Subsidiary agrees to be bound by the terms of this Indenture;

provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Subsidiary Guarantee is released in accordance with the terms thereof.

“ Hedging Obligations ” means, with respect to any Person, collectively, the Commodity Hedging Obligations of such Person, the Currency Exchange Protection Obligations of such Person and the Financial Hedging Obligations of such Person.

“ Holder ” means a Person in whose name a Note is registered.

“ Indebtedness ” means, with respect to any Person, without duplication, (1) the principal of and premium, if any, with respect to indebtedness of such Person for borrowed money or evidenced by bonds, notes, debentures or similar instruments; (2) reimbursement obligations of such Person for letters of credit or banker’s acceptances; (3) Capital Lease Obligations of such Person; (4) obligations of such Person for the payment of the balance deferred and unpaid of the purchase price of any property except any such balance that constitutes (a) an accrued expense, b) a trade payable or (c) an earn-out obligation until, after

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30 days of becoming due and payable, such earn-out obligation has not been paid and becomes a liability on the balance sheet of such Person in accordance with GAAP; (5) Hedging Obligations (the amount of which at any time of determination shall be equal to the termination value of such agreement or arrangement giving rise to such Hedging Obligation that would be payable at such time); or (6) preferred stock of a Restricted Subsidiary that is not a Subsidiary Guarantor (but excluding, in each case, any accrued dividends). In the case of the foregoing clauses (1) through (5), if and to the extent any of the foregoing obligations or indebtedness (other than letters of credit, banker’s acceptances and Hedging Obligations), but excluding amounts recorded in accordance with Accounting Standards Codification No. 815, would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP. In the case of clause (6), the amount of Indebtedness attributable to such preferred stock shall be the repurchase price calculated in accordance with the terms of such preferred stock as if the preferred stock were repurchased on the date on which Indebtedness is required to be determined pursuant to this Indenture; provided that if the preferred stock is not then permitted to be repurchased, the amount of Indebtedness shall be the greater of the liquidation preference and the book value of the preferred stock. In addition, the term “Indebtedness” includes, without duplication (A) obligations or indebtedness of others of the type referred to in the foregoing clauses (1) through (6) that are secured by a Lien on any asset of such Person (whether or not such Indebtedness is assumed by such Person), but in an amount not to exceed the lesser of the amount of such other Person’s obligation or indebtedness or the Fair Market Value of such asset; and (B) to the extent not otherwise included, the guarantee by such Person of any obligations or indebtedness of others of the type referred to in the foregoing clauses (1) through (6), whether or not such guarantee is contingent, and whether or not such guarantee appears on the balance sheet of such Person.

“ Indenture ” means this Indenture, as amended or supplemented from time to time.

“ Independent Financial Advisor ” means a nationally recognized accounting, appraisal or investment banking firm that is, in the reasonable judgment of the Board of Directors, qualified to perform the task for which such firm has been engaged hereunder and disinterested and independent with respect to the Company and its Affiliates; provided , that providing accounting, appraisal or investment banking services to the Company or any of its Affiliates or having an employee, officer or other representative serving as a member of the Board of Directors of the Company or any of its Affiliates will not disqualify any firm from being an Independent Financial Advisor.

“ Indirect Participant ” means a Person who holds a beneficial interest in a Global Note through a Participant.

“ Initial Notes ” means the $ million aggregate principal amount of % Senior Notes due 2017 and the $ million aggregate principal amount of % Senior Notes due 2022 issued by the Company on the Issue Date.

“ Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s or BBB- (or the equivalent) by S&P.

“ Investment Grade Rating Event ” means the first day on which the Notes are assigned an Investment Grade Rating by a Rating Agency and no Default or Event of Default has occurred and is continuing.

“ Investments ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other Obligations), advances (other than advances to customers in the ordinary course of business which are recorded as accounts receivable on the balance sheet of the lender and commissions, moving, travel and similar advances to employees and officers made in the ordinary course of business) or capital contributions,

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purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.

“ Issue Date ” means , 2012.

“ Joint Venture ” means any Person that is not a direct or indirect Subsidiary of the Company in which the Company or any of its Restricted Subsidiaries makes any Investment.

“ Legal Holiday ” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

“ Leverage Ratio ” means, with respect to any Person as of any date of determination, the ratio of (x) the total consolidated Indebtedness for borrowed money of such Person and its Restricted Subsidiaries(excluding, for the avoidance of doubt, Hedging Obligations) as of the end of the most recent fiscal quarter for which internal financial statements are available, which would be reflected as a liability on a consolidated balance sheet of such Person and its Restricted Subsidiaries prepared as of such date in accordance with GAAP, to (y) the aggregate amount of Consolidated Cash Flow of such Person for the then most recent four fiscal quarters for which internal financial statements are available, in each case with such pro forma adjustments to the amount of consolidated Indebtedness and Consolidated Cash Flow as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.

“ Lien ” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in any asset and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction) other than a precautionary financing statement respecting a lease not intended as a security agreement. In no event shall a right of first refusal be deemed to constitute a Lien.

“ MLP Parties ” means, collectively, Tesoro Logistics GP, LLC, Tesoro Logistics LP and each of their respective Subsidiaries.

“ Moody’s ” means Moody’s Investors Service, Inc., or any successor to the rating agency business thereof.

“ Net Income ” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends.

“ Net Proceeds ” means the aggregate cash proceeds or Cash Equivalents received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (i) the direct costs relating to such Asset Sale (including, without limitation, legal, accounting, investment banking and brokers fees, sales and underwriting commissions and other reasonable costs incurred in preparing such asset for sale) any relocation expenses incurred as a result thereof and any related severance and associated costs, expenses and charges of personnel related to the sold assets and related operations, (ii) taxes paid or reserved as payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), (iii) distributions and payments required to

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be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Sale, (iv) amounts paid in order to satisfy any Lien attaching to an asset in connection with such Asset Sale and (v) any amounts to be set aside in any reserve established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such properties or assets or for liabilities associated with such Asset Sale and retained by the Company or any of its Restricted Subsidiaries until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reversed or the amount returned to the Company or its Restricted Subsidiaries from such escrow arrangement, as the case may be.

“ Non-Recourse Indebtedness ” means Indebtedness: (i) as to which neither the Company nor any of its Restricted Subsidiaries, (a) provides any guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness); or (b) is directly or indirectly liable (as a guarantor or otherwise), in each case, other than a pledge of the Equity Interest of such Unrestricted Subsidiary that is an obligor of such Indebtedness; (ii) the incurrence of which will not result in any recourse against any of the assets of the Company or its Restricted Subsidiaries (other than a pledge of the Equity Interest of such Unrestricted Subsidiary that is the obligor of such Indebtedness); and (iii) no default with respect to which would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Company or any of its Restricted Subsidiaries to declare pursuant to the express terms governing such Indebtedness a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity.

“ Non-U.S. Person ” means a person who is not a U.S. Person.

“ Note Custodian ” means the Trustee, as custodian for the Depositary with respect to the Notes in global form, or any successor entity thereto.

“ Notes ” means the Initial Notes and any Additional Notes issued under this Indenture.

“ Obligations ” means any principal, premium (if any), interest and interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company or its Restricted Subsidiaries whether or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement obligations, damages, guarantees (including the Subsidiary Guarantees) and other liabilities or amounts payable under the documentation governing any Indebtedness or in respect thereof.

“ Offering ” means the offering of the Initial Notes by the Company on the Issue Date.

“ Officer ” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.

“ Officers’ Certificate ” means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 11.05 hereof.

“ Omnibus Agreement ” means the Amended and Restated Omnibus Agreement, dated as of April 1, 2012, among Tesoro Corporation, Tesoro Refining and Marketing Company, Tesoro Companies, Inc., Tesoro Alaska Company, Tesoro Logistics LP and Tesoro Logistics GP, LLC, and as may be amended, supplemented or modified; provided such amendment, supplement or modification is not disadvantageous in any material respect to the holders of notes when taken as a whole as compared to the Omnibus Agreement as in effect on the Issue Date, as determined in good faith by Tesoro.

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“ Opinion of Counsel ” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 11.05 hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee.

“ Participant ” means, with respect to DTC, Euroclear or Clearstream, a Person who has an account with DTC, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

“ Permitted Acquisition Indebtedness ” means Indebtedness or Disqualified Equity of the Company or any of its Restricted Subsidiaries to the extent such Indebtedness or Disqualified Equity (A) incurred to finance an acquisition or (B) was Indebtedness or Disqualified Equity of (i) a Person prior to the date on which such Subsidiary became a Restricted Subsidiary or (ii) a Person that merged with or consolidated into the Company or a Restricted Subsidiary; provided that on the date of such incurrence, after giving pro forma effect thereto, (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof, (b) the Fixed Charge Coverage Ratio for the Company would be greater than the Fixed Charge Coverage Ratio for the Company immediately prior to such transaction, or (c) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.

“ Permitted Business ” means, with respect to the Company and its Restricted Subsidiaries, the businesses of (i) the acquisition, development, operation and disposition of interests in oil, gas and other hydrocarbon properties, (ii) the acquisition, gathering, treating, processing, storage and transportation of production from such interests or properties and related logistics activities, (iii) the acquisition, processing, marketing, refining, distilling, storage and/or transportation of hydrocarbons and/or royalty or other interests in crude oil or refined or associated products related thereto, (iv) the acquisition, operation, improvement, leasing and other use of convenience stores, retail service stations, truck stops and other public accommodations in connection therewith, (v) the marketing and distribution of petroleum and marine products and the provision of logistical services to marine and offshore exploration and production industries, (vi) any business engaged in by the Company or its Restricted Subsidiaries on the Issue Date, (vii) any other business that generates gross income at least 90% of which constitutes “qualifying income” under Section 7704(d) of the Code; and (viii) any activity or business that is a reasonable extension, development or expansion of, or reasonably related to, any of the foregoing.

“ Permitted Debt ” means (i) the incurrence by the Company or any Restricted Subsidiary of Indebtedness pursuant to one or more Credit Facilities; provided , however , that, immediately after giving effect to any such incurrence, the aggregate principal amount (or accreted value, as applicable) of all Indebtedness incurred under this clause (i) and then outstanding does not exceed the greater of (A) $3.5 billion and (B) the amount of the Borrowing Base at the time of incurrence; (ii) the incurrence by the Company and the Guarantors of Indebtedness represented by the Initial Notes and the Subsidiary Guarantees to be issued on the Issue Date; (iii) the incurrence by the Company or any of its Restricted Subsidiaries of Existing Indebtedness (other than Indebtedness incurred under clauses (i) and (2) of this definition and the aggregate principal amount of 6 ¹ / ₂ % Senior Notes and 6 ⁵ / ₈ % Senior Notes that are repurchased, redeemed or otherwise retired substantially contemporaneously with the Issue Date with the net proceeds of the Notes, through the tender offers referred to in the Prospectus); (iv) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness, the net proceeds of which are applied to refinance any Indebtedness incurred in respect of any Indebtedness described under clauses (ii), (iii), (iv), (viii) or (xi) of this paragraph or incurred pursuant to the first paragraph of Section 4.09 hereof;

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(v) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided , however , that (A) if the Company or any Guarantor is the obligor and a Restricted Subsidiary of the Company that is not a Guarantor is the obligee on such Indebtedness, such Indebtedness will be subordinated to the payment in full of all Obligations with respect to the Notes and the Subsidiary Guarantees, as the case may be, and (B) (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that is not then permitted by this clause (v); (vi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, Synthetic Lease Obligations, mortgage financings or purchase money obligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing the purchase of, the cost of construction, improvement or development of, property, plant or equipment used or useful in the Permitted Business (including, without limitation, oil and gas properties) of the Company or a Restricted Subsidiary of the Company or incurred to extend, refinance, renew, replace, defease or refund any such purchase price or cost of construction, improvement or development, in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $350.0 million and (b) 5.0% of the Company’s Consolidated Net Tangible Assets; (vii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of Hedging Obligations not entered into for speculative purposes; (viii) Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earn-outs or similar obligations or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in each case, incurred in connection with the disposition or acquisition of any business, assets or a Subsidiary of the Company or any business or assets of its Subsidiaries, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary of the Company or any of its Subsidiaries for the purposes of financing such acquisition; (ix) the guarantee by the Company or any Restricted Subsidiary of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred pursuant to Section 4.09 hereof; (x) the issuance by a Restricted Subsidiary of the Company of preferred stock to the Company or to any of its Restricted Subsidiaries; provided , however , that any subsequent event or issuance or transfer of any Equity Interests that results in the owner of such preferred stock ceasing to be the Company or any of its Restricted Subsidiaries or any subsequent transfer of such preferred stock to a Person, other than the Company or one of its Restricted Subsidiaries, shall be deemed to be an issuance of preferred stock by such Subsidiary that was not permitted by this clause (x); (xi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness; (xii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness incurred in the ordinary course of business under (A) documentary letters of credit, or surety bonds or insurance contracts, which are to be repaid in full not more than one year after the date on which such Indebtedness is originally incurred to finance the purchase of inventory and other goods by the Company or a Restricted Subsidiary of the Company, (B) standby letters of credit, surety bonds or insurance contracts issued for the purpose of supporting (1) workers’ compensation or similar liabilities of the Company, (2) health or other types of social security benefits, unemployment of other issuance or self-insurance obligations, insurance contracts, (3) reclamation, statutory obligations, bankers’ acceptances, in each case, of the Company or any of its Restricted Subsidiaries or (4) performance, payment, deposit or surety obligations of the Company or any of its Restricted Subsidiaries and (C) bid, advance payment and performance bonds and surety bonds or similar insurance contracts for the Company and its Restricted Subsidiaries, and refinancings thereof, including in the case of each of (A), (B) and (C), standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing; (xiii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other provision of Sec tion 4.09

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hereof) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed the greater of (a) $750.0 million and (b) 10.0% of the Consolidated Net Tangible Assets; (xiv) the guarantee by the Company or any Restricted Subsidiary of the Company of the Indebtedness incurred by Joint Ventures constituting Permitted Investments; (xiv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, so long as such Indebtedness is extinguished within five business days of its Incurrence; and (xvi) the issuance by the Company or any of its Restricted Subsidiaries of Disqualified Equity to the Company or any of its Restricted Subsidiaries, as the case may be; provided, however, that: (a) any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held, directly or indirectly, by a Person other than the Company or a Restricted Subsidiary of the Company; and (b) any sale or other transfer of any such Disqualified Equity to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute issuance of such Disqualified Equity by the Company or such Restricted Subsidiary that was not permitted by this clause (xvi).

“ Permitted Investments ” means (a) any Investment in the Company or in a Restricted Subsidiary of the Company; (b) any Investment in (i) cash or Cash Equivalents or (ii) deposit accounts maintained in the ordinary course of business; (c) any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment (i) such Person becomes a Restricted Subsidiary of the Company; or (ii) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company; (d) any security or other Investment received or Investment made as a result of the receipt of non-cash consideration from (i) an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof; (ii) a disposition of assets that does not constitute an Asset Sale or (iii) any sale or other disposition pursuant to the Omnibus Agreement; (e) any acquisition of assets or any Investment in any Person solely in exchange for the issuance of Equity Interests (other than Disqualified Equity) of the Company; (f) any Investment received in settlement of debts, claims or disputes owed to the Company or any Restricted Subsidiary of the Company that arose out of transactions in the ordinary course of business; (g) any Investment received in connection with or as a result of a bankruptcy, workout or reorganization of any Person; (h) advances and extensions of credit in the nature of accounts receivable arising from the sale or lease of goods or services or the licensing of property in the ordinary course of business; (i) relocation allowances for, and advances and loans to, employees, officers and directors (including, without limitation, loans and advances the net cash proceeds of which are used solely to purchase Equity Interests of the Company in connection with restricted stock or employee stock purchase plans, or to exercise stock received pursuant thereto or other incentive plans in a principal amount not to exceed the aggregate exercise or purchase price), or loans to refinance principal and accrued interest on any such loans, provided that the aggregate principal amount of such loans, advances and allowances shall not exceed at any time $20.0 million; (j) other Investments by the Company or any Restricted Subsidiary of the Company in any Person having an aggregate Fair Market Value (measured as of the date each such Investment is made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (j) or such similar provision in the 6 ¹ / ₂ % Senior Notes Indenture (net of returns of capital, dividends and interest paid on Investments and sales, liquidations and redemptions of Investments), at any time outstanding equal to the greater of (i) $350.0 million and (ii) 5% of Consolidated Tangible Assets; (k) Investments in the form of intercompany Indebtedness or guarantees of Indebtedness of a Restricted Subsidiary of the Company permitted under clauses (v) and (x) of the definition of “Permitted Debt”; (l) Investments arising in connection with Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing or hedging currency, commodity or interest rate risk in connection with the conduct of the business of the Company and its Subsidiaries and not for speculative purposes; (m) Investments in the form of, or pursuant to, operating agreements, joint ventures, partnership agreements, working interests, royalty interests, mineral leases, processing agreements,

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farmout agreements, contracts for the sale, transportation or exchange of oil and natural gas, unitization agreements, pooling agreements, area of mutual interests agreements, production sharing agreements or other similar or customary agreements, transactions, properties, interests or arrangements, and investments and expenditures in connection therewith or pursuant thereto, in each case, made or entered into the ordinary course of the business described in clauses (i) and (ii) of the definition of “Permitted Business” excluding, however, investments in corporations; (n) any Investments in prepaid expenses, negotiable instruments held for collection and lease, utility, worker’s compensation, performance and other similar deposits and prepaid expenses made in the ordinary course of business; (o) Investments pursuant to agreements and obligations of the Company and any Restricted Subsidiary in effect on the 6 ¹ / ₂ % Senior Notes Issue Date and any renewals or replacements thereof on terms and conditions not materially less favorable to the Company or such Restricted Subsidiary, as the case may be, than the terms of the Investment being renewed or replaced; (p) any Investments received in compromise or resolution of (i) obligations of trade creditors or customers that were incurred in the ordinary course of business, including pursuant to a plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer, or as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment in default or (ii) litigation, arbitration or other disputes with Persons who are not Affiliates; (q) Investments in any MLP Party in the form of debt instruments or Equity Interests issued by such MLP Party that are received in consideration for non-core refining assets of the Company or any of its Restricted Subsidiaries in compliance with Section 4.10 hereof; provided that Fair Market Value is received by the Company and its Restricted Subsidiaries in consideration for such assets; and (r) Investments (i) to maintain a 2% general partnership interest in any MLP Party or (ii) in order to purchase additional limited partnership interests in any MLP Party and/or to provide funding to one or more MLP Parties for acquisitions of master limited partnership qualifying assets or capital expenditures in an aggregate amount not to exceed $150.0 million outstanding at any one time; provided , however, that with respect to any Investment, the Company may, in its sole discretion, allocate all or any portion of any Investment and later re-allocate all or any portion of any Investment to one or more of the above clauses (a) through (r) so that the entire Investment would be a Permitted Investment

“ Permitted Liens ” means:

(1) Liens securing Indebtedness incurred under the Credit Facilities permitted by clause (i) of the definition of “Permitted Debt” and all Obligations and Hedging Obligations relating to such Indebtedness;

(2) Liens other than Liens permitted by clause (1) of this definition of “Permitted Liens” granted in favor of the Company or the Guarantors;

(3) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clauses (vi) or (xi) of the definition of “Permitted Debt” covering only the assets acquired, constructed, improved or developed with, or secured by, such Indebtedness;

(4) Liens existing on the Issue Date;

(6) Liens existing upon the occurrence of an Investment Grade Rating Event;

(7) Liens on the Retail Properties;

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(8) carriers’, warehousemen’s, mechanics’, materialmen’s, landlord’s, repairman’s or other like Liens arising in the ordinary course of business;

(9) pledges or deposits in connection with workers’ compensation, unemployment insurance, statutory obligations and other types of social security;

(12) any interest or title of a lessor under any lease entered into by the Company or any of its Subsidiaries in the ordinary course of its business and covering only the assets so leased;

(13) any Lien securing Indebtedness, neither assumed nor guaranteed by the Company or any of its Subsidiaries nor on which it customarily pays interest, existing upon real estate or rights in or relating to real estate acquired by the Company for substation, metering station, pump station, storage, gathering line, transmission line, transportation line, distribution line or for right-of-way purposes, any Liens reserved in leases for rent and for compliance with the terms of the leases in the case of leasehold estates, to the extent that any such Lien referred to in this clause (13) does not materially impair the use of the property covered by such Lien for the purposes of which such property is held by the Company or any of its Subsidiaries;

(14) inchoate Liens arising under ERISA;

(15) any obligations or duties affecting any of the property of the Company or its Subsidiaries to any municipality or public authority with respect to any franchise, grant, license or permit which do not materially impair the use of such property for the purposes for which it is held;

(16) defects, irregularities and deficiencies in title of any rights of way or other property of the Company or any of its Subsidiaries which, in the aggregate, do not materially impair the use of such rights of way or other property for the purposes for which such rights of way and other property are held by the Company or any of its Subsidiaries and defects, irregularities and deficiencies in title to any property of the Company or any of its Subsidiaries, which defects, irregularities or deficiencies have been cured by possession under applicable statutes of limitation;

(17) Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Company or any of its Subsidiaries on deposit with or in possession of such bank;

(18) Liens to secure obligations of the Company and its Subsidiaries in respect of Commodity Hedging Agreements and Financial Hedging Agreements, in each case not entered into for speculative purposes, and Liens with respect to hedging accounts maintained with dealers of NYMEX or similar contracts which require the maintenance of cash margin account balances;

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(19) Liens on property of a Person existing at the time (a) such Person is merged with or into or consolidated with the Company or any Restricted Subsidiary, (b) such Person becomes a Restricted Subsidiary or (c) such property is otherwise acquired by the Company or a Restricted Subsidiary; provided , that such Liens were in existence prior to the contemplation of such merger, consolidation or other acquisition and do not extend to any assets other than those of the Person merged into or consolidated with the Company or the Restricted Subsidiary in the case of a merger or consolidation pursuant to clause (a) or such property in the case of such other acquisition in the case of clause (b) or (c);

(20) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under this Indenture; provided that (a) the new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof) and (b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, the committed amount, of the Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;

(21) Liens upon specific items of inventory, accounts receivables or other goods and proceeds of the Company or any Restricted Subsidiary securing such Person’s obligations in respect of banker’s acceptances or receivables securitizations issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory, accounts receivables or other goods and proceeds and, if incurred prior to an Investment Grade Rating Event, permitted by Section 4.09 hereof;

(22) any Lien resulting from the deposit of money or other Cash Equivalents or other evidence of indebtedness in trust for the purpose of defeasing Indebtedness of the Company or any Restricted Subsidiary;

(23) any Liens securing industrial development, pollution control or similar bonds; and

(24) Liens incurred by the Company or any Subsidiary of the Company with respect to obligations that at any one time outstanding do not exceed the greater of (a) $175.0 million or (b) 2.5% of Consolidated Net Tangible Assets;

(25) Liens securing Non-Recourse Debt;

(26) Liens arising by reason of deposits necessary to obtain standby letters of credit in the ordinary course of business; and

(27) Liens relating to future escrow arrangements securing Indebtedness incurred in accordance with this Indenture.

“ Permitted Refinancing Indebtedness ” means any Indebtedness of the Company or any of its Restricted Subsidiaries, or portion of such Indebtedness, issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any

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of its Restricted Subsidiaries (other than intercompany Indebtedness), including Indebtedness that extends, refinances, renews, replaces, defeases or refunds Permitted Refinancing Indebtedness, provided that: (i) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued and unpaid interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus fees and expenses incurred in connection therewith, including any premium or defeasance cost); (ii) such Permitted Refinancing Indebtedness has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness is incurred either by the Company or a Guarantor of the Company or a Subsidiary Guarantor who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded. Notwithstanding the foregoing, any Indebtedness incurred under Credit Facilities pursuant to Section 4.09 hereof shall be subject to the refinancing provisions of the definition of “Credit Facilities” and not pursuant to the requirements set forth in this definition of “Permitted Refinancing Indebtedness.”

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

“ preferred stock ” means any Capital Stock of a Person, however designated, which entitles the holder thereof to a preference with respect to dividends, distributions or liquidation proceeds of such Person over the holders of the other Capital Stock issued by such Person.

“ Principal Property ” means any refinery and any related core refining asset having a Fair Market Value in excess of $250 million (unless the Board of Directors determines that any such property is not material to the Company and its subsidiaries taken as a whole), owned by the Company or any of its Restricted Subsidiaries.

“ Prospectus ” means the Prospectus, dated , 2012, relating to the issuance and sale of the Initial Notes.

“ Quotation Agent ” means the Reference Treasury Dealer selected by the Trustee after consultation with the Company.

“ Rating Agency ” means each of S&P and Moody’s, or if S&P or Moody’s or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company (as certified by a resolution of the Board of Directors) which shall be substituted for S&P or Moody’s, or both, as the case may be.

“ Rating Decline ” means the occurrence of a decrease in the rating of the Notes by one or more gradations by either Moody’s or S&P (including gradations within the rating categories, as well as between categories), within 90 days before or after the earlier of (x) a Change of Control, (y) the date of public notice of the occurrence of a Change of Control or (z) public notice of the intention of the Company to effect a Change of Control (which 90-day period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by either Moody’s or S&P).

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“ Reference Treasury Dealer ” means any three nationally recognized investment banking firms selected by the Company that are primary dealers of Government Securities.

“ Reference Treasury Dealer Quotations ” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue with respect to the Notes, expressed in each case as a percentage of their principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding the redemption date.

“ Responsible Officer ,” when used with respect to the Trustee, means any officer, including, without limitation, any vice president, assistant vice president, assistant treasurer or secretary within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to particular corporate trust matter, any other officer or employee to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

“ Restricted Investment ” means an Investment other than a Permitted Investment.

“ Restricted Subsidiary ” of a Person means any Subsidiary of the referenced Person that is not an Unrestricted Subsidiary or a direct or indirect Subsidiary of an Unrestricted Subsidiary; provided that, on the Issue Date, all Subsidiaries of the Company shall be Restricted Subsidiaries of the Company other than Tesoro Logistics LP and Tesoro Logistics GP, LLC and each of their respective subsidiaries.

“ Retail Properties ” means all assets directly related to the retail sale of gasoline and diesel fuel in retail markets in the mid-continental and western United States (including Alaska), including, without limitation, all related gas stations, convenience stores, merchandise items, tow trucks, auto maintenance facilities, oil change facilities, and car washes; provided that such assets will not include any assets relating to the sale of petroleum products in bulk and wholesale markets.

“ S&P ” means Standard & Poor’s Ratings Group, Inc., or any successor to the rating agency business thereof.

“ Sale/Leaseback Transaction ” means an arrangement relating to property or assets owned by the Company or a Restricted Subsidiary on the Issue Date or thereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property or assets to a Person (other than the Company or a Restricted Subsidiary) and the Company or a Restricted Subsidiary leases such property or assets from such Person.

“ SEC ” means the Securities and Exchange Commission.

“ Securities Act ’ means the Securities Act of 1933, as amended.

“ Senior Credit Facility ” means that certain Fifth Amended and Restated Credit Agreement, dated as of March 16, 2011, as amended, supplemented or amended and restated from time to time, among the Company, JPMorgan Chase Bank, National Association, as Administrative Agent, and the financial institutions from time to time party thereto, and including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith.

“ Senior Indebtedness ” means, with respect to any Person, (A) all Indebtedness of such Person, whether outstanding on the Issue Date or thereafter created, incurred or assumed and (B) all other Obligations of such Person (including fees, charges, expenses, reimbursement obligations and other amounts

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payable in respect thereof and any interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to such Person whether or not a claim for post-filing interest is allowed in such proceeding) in respect of Indebtedness described in clause (A) above, unless, in the case of clauses (A) and (B), in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such Indebtedness or other obligations are subordinate in right of payment to the Notes or any Subsidiary Guarantee; provided , however , that Senior Indebtedness shall not include (1) any obligation of such Person to the Company or any Subsidiary of the Company; (2) any liability for Federal, state, foreign, local or other taxes owed or owing by such Person; (3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities); (4) any Indebtedness or other Obligation of such Person that is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person; (5) the portion of any Indebtedness which at the time of incurrence is incurred in violation of this Indenture; and (6) any Capital Stock.

“ Significant Subsidiary ” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date.

“ Stated Maturity ” means, with respect to any installment of interest or principal, or sinking fund or mandatory redemption of principal, on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid or made, as applicable, in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“ Subordinated Obligation ” means any Indebtedness of the Company (whether outstanding on the Issue Date or thereafter incurred) which pursuant to a written agreement is subordinate or junior in right of payment to the Notes and any Indebtedness of a Guarantor (whether outstanding on the Issue Date or thereafter incurred) which pursuant to a written agreement is subordinate or junior in right of payment to its Subsidiary Guarantee.

“ Subsidiary ” means, with respect to any Person, (i) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person and (ii) any partnership (a) the sole general partner or the managing general partner of which is such Person or an entity described in clause (i) and related to such Person or (b) the only general partners of which are such Person or of one or more entities described in clause (i) and related to such Person (or any combination thereof).

“ Subsidiary Guarantee ” means the guarantee of the Notes by each of the Guarantors pursuant to Article X hereof and, if applicable, in the related form of guarantee notation endorsed on the form of Note attached hereto as Exhibit A and any additional guarantee of the Notes to be executed by any Domestic Subsidiary of the Company pursuant to Section 4.16 .

“ Synthetic Lease Obligation ” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

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“ TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA.

“ Trustee ” means the party named as such in the preamble of this Indenture until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

“ Unrestricted Subsidiary ” means (i) any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary of the Company) that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors as certified in an Officers’ Certificate delivered to the Trustee, (ii) each Subsidiary of an Unrestricted Subsidiary, whenever it shall become such a Subsidiary and (iii) Tesoro Logistics LP and Tesoro Logistics GP, LLC and each of their respective subsidiaries. The Board of Directors may designate any Subsidiary of the Company to become an Unrestricted Subsidiary if it (a) has no Indebtedness other than Non-Recourse Indebtedness; (b) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding do not violate Section 4.11 hereof; (d) would constitute an investment which the Company could make in compliance with Section 4.07 . Notwithstanding the foregoing, if, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred as of such date.

“ U.S. ” means the United States of America.

“ U.S. Person ” means a U.S. person as defined in Rule 902(0) under the Securities Act.

“ Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“ Weighted Average Life to Maturity ” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (ii) the then outstanding principal amount of such Indebtedness.

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SECTION 1.02. Other Definitions .


Term		Defined in Section
“ Affiliate Transaction ”		4.11
“ Asset Sale Offer ”		3.09
“ Change of Control Offer ”		4.15
“ Change of Control Payment ”		4.15
“ Change of Control Payment Date ”		4.15
“ Covenant Defeasance ”		8.05
“ DTC ”		2.03
“ Event of Default ”		6.01
“ Excess Asset Sale Proceeds ”		4.10
“ Funding Guarantor ”		10.05
“ incur ”		4.09
“ Legal Defeasanc e”		8.04
“ Offer Amount ”		3.09
“ Offer Period ”		3.09
“ Paying Agent ”		2.03
“ Payment Default ”		6.01
“ Purchase Dat e”		3.09
“ Registrar ”		2.03
“ Restricted Payments ”		4.07

SECTION 1.03. Incorporation by Reference of Trust Indenture Act .

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

The following TIA terms used in this Indenture have the following meanings:

“ indenture securities ” means the Notes;

“ indenture security Holder ” means a Holder of a Note;

“ indenture to be qualified ” means this Indenture;

“ indenture trustee ” or “ institutional trustee ” means the Trustee; and

“ obligor ” on the Notes means the Company and any successor obligor upon the Notes.

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

SECTION 1.04. Rules of Construction .

Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(3) “or” is not exclusive, and “including” means “including without limitation,” “including but not limited to” or words of similar import;

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(4) the word “will” shall be construed to have the same meaning and effect as the word “shall”;

(5) words in the singular include the plural, and in the plural include the singular;

(6) provisions apply to successive events and transactions;

(7) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time;

(8) references to “Sections,” “clauses,” “Articles,” “Exhibits” and “Schedules” shall be to Sections, clauses, Articles, Exhibits and Schedules, respectively, of this Indenture unless otherwise specifically provided;

(9) the use in this Indenture of the words “herein,” “hereof’ and “hereunder,” and words of similar import, shall be construed to refer to this Indenture in its entirety and not to any particular provision hereof; and

(10) this Indenture, the Notes, the Subsidiary Guarantees and any documents or instruments delivered pursuant hereto shall be construed without regard to the identity of the party who drafted the various provisions of the same. Each and every provision of this Indenture and instruments and documents entered into and delivered in connection therewith shall be construed as though the parties participated equally in the drafting of the same. Consequently, each of the parties acknowledges and agrees that any rule of construction that a document is to be construed against the drafting party shall not be applicable either to this Indenture, the Notes, the Subsidiary Guarantees and instruments and documents entered into and delivered in connection therewith.

ARTICLE II

THE NOTES

SECTION 2.01. Form and Dating .

The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A-1 , in the case of the 2017 Notes, and Exhibit A-2 , in the case of the 2022 Notes, hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof. Subject to Section 4.16 and 10.02 hereof, the Notes may bear notations of Subsidiary Guarantees.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture, and the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note or any notation of Subsidiary Guarantees thereon conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

Notes issued in global form shall be substantially in the form of Exhibit A-1 , in the case of the 2017 Notes, and Exhibit A-2 , in the case of the 2022 Notes, attached hereto (including the Global Note Legend and the “Schedule of Exchanges in the Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A-1 , in the case of the 2017 Notes), and Exhibit A-2 , in

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the case of the 2022 Notes, attached hereto (but without the Global Note Legend and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note shall represent such aggregate principal amount of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Notes of the same series from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes of the same series represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes of the same series represented thereby shall be made by the Trustee, the Depositary or the Note Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

SECTION 2.02. Execution and Authentication .

One Officer shall sign the Notes for the Company by manual or facsimile signature. If an Officer of the Company whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid. A Note shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited. The Trustee shall authenticate (i) the Initial Notes for original issue on the Issue Date in the aggregate principal amount of $ million, in the case of 2017 Notes, and in the aggregate principal amount of $ million, in the case of 2022 Notes, and (ii) Additional Notes of either series for original issue from time to time after the Issue Date in such principal amounts as may be set forth in a written order of the Company described in this sentence; provided that the issuance of such Additional Notes of such series shall be subject to Section 4.09 and Section 2.13 hereof, in each case, upon a written order of the Company signed by one Officer, which written order shall specify (a) the amount of such series of Notes to be authenticated and the date of original issue thereof, (b) whether the such series of Notes are Initial Notes or Additional Notes and (c) the amount of such series Notes to be issued in global form or definitive form.

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company.

SECTION 2.03. Registrar and Paying Agent .

The Company shall maintain an office or agency within the City and State of New York where Notes may be presented for registration of transfer or for exchange (“ Registrar ”) and an office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall promptly notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.

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The Company initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes. The Trustee has been appointed by DTC to act as Note Custodian with respect to the Global Notes.

The Company initially appoints the Trustee to act as the Registrar and Paying Agent.

SECTION 2.04. Paying Agent to Hold Money in Trust .

The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, or premium or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or an Affiliate of the Company (including any Subsidiary) acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes.

SECTION 2.05. Holder Lists .

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company shall provide to a Responsible Officer of the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise comply with TIA § 312(a).

SECTION 2.06. Transfer and Exchange .

(a) Transfer and Exchange of Global Notes . A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary for the Global Notes or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 90 days after the date of such notice from the Depositary, (ii) an Event of Default has occurred and is continuing under this Indenture or (iii) the Company in its sole discretion notifies the Trustee in writing that it elects to cause issuance of the Notes in certificated form. Upon the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.11 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to Section 2.07 or 2.11 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a) , however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b) , or (c) hereof.

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(b) Transfer and Exchange of Beneficial Interests in the Global Notes . The transfer and exchange of beneficial interests in any Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Transfers of beneficial interests in any Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs as applicable:

(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Global Note of the same series may be transferred only to Persons who take delivery thereof in the form of a beneficial interest in such Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfer described in this Section 2.06(b)(i) .

(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests (other than a transfer of a beneficial interest in a Global Note to a Person who takes delivery thereof in the form of a beneficial interest in the same Global Note), the transferor of such beneficial interest must deliver to the Registrar (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above. Upon notification from the Registrar that all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture, the Notes and otherwise applicable under the Securities Act have been satisfied, the Trustee shall adjust the principal amount of the relevant Global Notes pursuant to Section 2.06(h) hereof.

(iii) [ Reserved ].

(iv) [ Reserved ].

(i) [Reserved].

(ii) [Reserved].

(iii) If any holder of a beneficial interest in a Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon notice by the Registrar of satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and make available for delivery to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall make available for delivery such Definitive Notes to the Persons in whose names such Notes are so registered.

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(d) Transfer and Exchange of Definitive Notes for Beneficial Interests .

(i) [Reserved].

(ii) [Reserved].

(iii) A Holder of a Definitive Note may exchange such Note for a beneficial interest in a Global Note or transfer such Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Global Notes.

(iv) If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (iii) above at a time when a Global Note has not yet been issued, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Global Notes in an aggregate principal amount equal to the principal amount of beneficial interests transferred pursuant to subparagraph (iii) above.

(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e) , the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by his attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, pursuant to the provisions of this Section 2.06(e) .

(f) [ Reserved ].

(g) Legends . The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.

(i) [ Reserved ].

(ii) Global Note Legend . Each Global Note shall bear a legend in substantially the following form:

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO ARTICLE II OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF TESORO CORPORATION OR ANY SUCCESSOR THERETO.”

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(iii) OID Legend . Each Note issued hereunder that has more than a de minimis amount of original issue discount for U.S. federal income tax purposes shall bear a legend in substantially the following form:

“THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR SUCH NOTE BY SUBMITTING A REQUEST FOR SUCH INFORMATION TO THE COMPANY AT THE FOLLOWING ADDRESS: 19100 RIDGEWOOD PARKWAY, SAN ANTONIO, TEXAS 78259, ATTENTION: G. SCOTT SPENDLOVE.”

Additionally, for so long as DTC is the Depositary with respect to any Global Note, each such Global Note shall also bear a legend in substantially the following form:

“UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE), TO TESORO CORPORATION OR ANY SUCCESSOR THERETO OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

(h) Cancellation and/or Adjustment of Global Notes . At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note, by the Trustee, the Note Custodian or the Depositary at the direction of the Trustee, to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note, by the Trustee, the Note Custodian or by the Depositary at the direction of the Trustee, to reflect such increase.

(i) General Provisions Relating to Transfers and Exchanges .

(i) To permit registrations of transfers and exchanges, subject to Section 2.06 , the Company shall execute and, upon the Company’s written order, signed by one or more Officers of the Company, the Trustee shall authenticate Global Notes and Definitive Notes at the Registrar’s request.

(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 3.06 , 4.10 , 4.15 and 9.05 hereof).

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(iii) The Registrar shall not be required to register the transfer or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture and the Subsidiary Guarantees, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(v) The Company and the Registrar shall not be required (A) to issue, to register the transfer of or to exchange Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, (C) to register the transfer of or to exchange a Note between a record date and the next succeeding Interest Payment Date or (D) to register the transfer of a Note other than in denominations of $2,000 or multiple integrals of $1,000 in excess thereof.

(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.

(vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.

(viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a transfer or exchange may be submitted by facsimile.

SECTION 2.07. Replacement Notes .

If any mutilated Note is surrendered to the Trustee or the Company, or the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon the written order of the Company signed by one Officer of the Company, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee and any Agent from any loss that any of them may suffer if a Note is replaced. The Company and the Trustee may charge for their respective expenses in replacing a Note. If, after the delivery of such replacement Note, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment or registration such original Note, the Trustee shall be entitled to recover such replacement Note from the Person to whom it was delivered or any Person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Company, the Trustee and any Agent in connection therewith.

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Subject to the provisions of the final sentence of the preceding paragraph of this Section 2.07 , every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

SECTION 2.08. Outstanding Notes .

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Company, a Subsidiary of the Company or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

SECTION 2.09. Treasury Notes .

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Notwithstanding the foregoing, Notes that the Company, a Subsidiary of the Company or an Affiliate of the Company offers to purchase or acquires pursuant to an offer, exchange offer, tender offer or otherwise shall not be deemed to be owned by the Company, such Subsidiary or such Affiliate until legal title to such Notes passes to the Company, such Subsidiary or such Affiliate, as the case may be.

SECTION 2.10. Temporary Notes .

Until Definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes upon a written order of the Company signed by one Officer of the Company. Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Notes in exchange for temporary Notes.

Holders of temporary Notes shall be entitled to all of the benefits of this Indenture.

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SECTION 2.11. Cancellation .

The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall return such canceled Notes to the Company. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

SECTION 2.12. Defaulted Interest .

If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company shall promptly notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date, provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.

SECTION 2.13. Additional Notes .

The Company shall be entitled, subject to its compliance with Section 4.09 , to issue Additional Notes under this Indenture which shall have identical terms as the Initial Notes issued on the Issue Date, other than with respect to the date of issuance and issue price and first payment of interest. With respect to any Additional Notes, the Company shall set forth in a resolution of the Board of Directors and an Officers’ Certificate, a copy of each which shall be delivered to the Trustee, the following information: (a) the aggregate principal amount at maturity of such Additional Notes to be authenticated and delivered pursuant to this Indenture: and (b) the issue price, the issue date and the CUSIP number and corresponding ISIN of such Additional Notes.

SECTION 2.14. One Class of Notes .

The Initial Notes of the same series issued on the Issue Date and any Additional Notes of such series shall be treated as a single class for all purposes under this Indenture.

SECTION 2.15. CUSIP Numbers .

The Company in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption or repurchase, as the case may be, as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption or repurchase, as the case may be, and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption or repurchase, as the case may be, shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the “CUSIP” numbers.

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ARTICLE III

REDEMPTION AND PREPAYMENT

SECTION 3.01. Notices to Trustee .

If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 45 days but not more than 60 days before a redemption date, an Officers’ Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the redemption price or, in the case of a redemption pursuant to Section 3.07(c) hereof, the manner of the calculation of the redemption price, and (v) that the redemption price will be deposited with the Trustee in immediately available funds no later than 10:00 a.m., New York City time, on the redemption date.

SECTION 3.02. Selection of Notes to be Redeemed .

If less than all of the Notes of a series are to be repurchased or redeemed at any time, selection of such Notes for repurchase or redemption shall be made by the Trustee (1) in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed, (2) on a pro rata basis to the extent practicable or (3) by lot or in such other similar method in accordance with the procedures of DTC; provided that no Notes of $2,000 or less shall be redeemed in part. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes of such series not previously called for redemption.

The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

The provisions of the two preceding paragraphs of this Section 3.02 shall not apply with respect to any redemption affecting only a Global Note, whether such Global Note is to be redeemed in whole or in part. In case of any such redemption in part, the unredeemed portion of the principal amount of the Global Note shall be in an authorized denomination.

SECTION 3.03. Notice of Redemption .

Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address.

The notice shall identify the Notes (including CUSIP numbers) to be redeemed and shall state:

(a) the redemption date;

(b) the redemption price or, in the case of a redemption pursuant to Section 3.07(c) hereof, the manner of the calculation of the redemption price;

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(c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note;

(d) the name and address of the Paying Agent;

(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(f) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;

(g) the paragraph of the Notes and the Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes; and

(i) any condition precedent to which the redemption or notice of redemption is subject.

If any of the Notes to be redeemed is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the Applicable Procedures of the Depositary applicable to such redemption.

At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at its expense; provided , however , that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

SECTION 3.04. Effect of Notice of Redemption .

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes of a series called for redemption become irrevocably due and payable on the redemption date at the redemption price. Notwithstanding the foregoing, any redemption or notice of redemption may, at the Company’s discretion, be subject to one or more conditions precedent and, in the case of a redemption with the net cash proceeds (other than Designated Proceeds) of an Equity Offering pursuant to Section 3.07(b) hereof, be given prior to the completion of the related Equity Offering. The Company shall notify the Trustee in writing promptly upon the satisfaction or failure of any condition precedent to any redemption or notice of redemption.

SECTION 3.05. Deposit of Redemption Price .

No later than 10:00 a.m. New York City Time on the redemption date, the Company shall deposit with the Trustee or with the Paying Agent immediately available funds sufficient to pay the redemption price of and accrued interest, if any, on all Notes of a series to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued interest, if any, on, all Notes of a series to be redeemed.

If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes of a series or the portions of such Notes called

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for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then accrued and unpaid interest, if any, shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note of a series called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in such Notes and in Section 4.01 hereof.

SECTION 3.06. Notes Redeemed in Part .

Upon surrender of a Note of a series that is redeemed in part, the Company shall issue and, upon the Company’s written request, the Trustee shall authenticate for the Holder at the expense of the Company a new Note of the same series equal in principal amount to the unredeemed portion of such Note surrendered.

SECTION 3.07. Optional Redemption .

(a) At any time and from time to time before , 2017, the Company may, at its option, redeem all or a portion of the 2017 Notes, upon notice pursuant to Section 3.03 hereof at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium with respect to such Notes plus accrued and unpaid interest, if any, thereon to, but excluding the redemption date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date. If any 2017 Notes are called for redemption pursuant to this Section 3.07(a), the Company shall notify the Trustee of the Applicable Premium with respect to such 2017 Notes promptly after the calculation and the Trustee shall not be responsible for such calculation. On or after , 2017, the 2017 Notes may be redeemed, in whole or in part, at our option at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, thereon to but excluding the redemption date.

(b) Except as set forth in clause (c) or clause (d) of this Section 3.07 , the 2022 Notes shall not be redeemable at the Company’s option prior to , 2017. Thereafter, the 2022 Notes will be subject to redemption at any time and from time to time at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning on of the years indicated below:


Year	Percentage
2017		%
2018		%
2019		%
2020 and thereafter		100.000	%

(c) Notwithstanding the foregoing, at any time and from time to time before , 2015, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of the outstanding 2022 Notes (which amount includes Additional Notes of the same series) issued under this Indenture at a redemption price of % of the principal amount thereof, plus accrued and unpaid interest, if any, thereon, to the redemption date, with the net cash proceeds (other than Designated Proceeds) of anyone or more Equity Offerings; provided that at least 65% of the aggregate principal amount of 2022 Notes initially issued under this Indenture (which amount excludes Additional Notes of the same series) remain outstanding immediately after each such redemption; and provided , further , that each such redemption shall occur within 180 days of the date of the closing of such Equity Offering.

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(d) Notwithstanding the foregoing, at any time and from time to time prior to , 2017, the Company may, at its option, redeem all or a portion of the 2022 Notes at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium with respect to such 2022 Notes plus accrued and unpaid interest, if any, thereon, to the redemption date. If any 2022 Notes are called for redemption pursuant to this Section 3.07(c) , the Company shall notify the Trustee of the Applicable Premium with respect to such 2022 Notes promptly after the calculation and the Trustee shall not be responsible for such calculation.

(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

SECTION 3.08. Mandatory Redemption .

The Company shall not be required to make mandatory redemption or sinking fund payments with respect to either series of Notes. However, pursuant to Sections 3.09 , 4.10 and 4.15 hereof, under certain circumstances, the Company may be required to offer to purchase such series of Notes.

SECTION 3.09. Offer to Purchase by Application of Excess Asset Sale Proceeds .

In the event that, pursuant to Section 4.10 hereof, the Company shall be required to commence an offer to all Holders to purchase Notes of either series (an “ Asset Sale Offer ”), it shall follow the procedures specified below.

The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “ Offer Period ”). No later than five Business Days after the termination of the Offer Period (the “ Purchase Date ”), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Section 4.10 hereof (the “ Offer Amount ”) or, if less than the Offer Amount has been tendered, all Notes validly tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

(b) the Offer Amount, the purchase price and the Purchase Date;

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(d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or accrue interest after the Purchase Date;

(e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may only elect to have all of such Note purchased and may not elect to have only a portion of such Note purchased;

(f) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed to the Company, the Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

(g) that Holders shall be entitled to withdraw their election if the Company, such Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Trustee shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Trustee so that any unpurchased Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof); and

(i) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).

If any of the Notes subject to an Asset Sale Offer is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the Applicable Procedures of the Depositary applicable to such repurchases.

On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and shall deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09 . The Company, the Depositary (if any, and as referred to in clause (f) above of this Section 3.09 ) or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company, shall authenticate and make available for delivery such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Purchase Date.

Other than as specifically provided in this Section 3.09 , any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

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ARTICLE IV

COVENANTS

SECTION 4.01. Payment of Notes .

The Company shall pay or cause to be paid the principal of, and premium, if any, and interest on the Notes on the dates and in the manner provided in each series of Notes. Any principal, premium and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. New York City Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest, if any, then due.

The Company shall pay interest (including post-petition interest in any proceeding under the Bankruptcy Code) on overdue principal at the rate borne on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under the Bankruptcy Code) on overdue installments of interest, if any, (without regard to any applicable grace period) at the same rate to the extent lawful.

SECTION 4.02. Maintenance of Office or Agency .

The Company shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be presented or surrendered for payment, where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided , however , that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Company hereby designates the office of the Trustee at 100 Wall Street, 16th Floor, New York, New York 10005, as one such office or agency of the Company in accordance with Section 2.03 hereof.

SECTION 4.03. Reports .

(a) Whether or not required by the SEC’s rules and regulations, so long as any Notes are outstanding, the Company shall furnish (whether through hard copy or internet-accessible data) to the Holders of Notes and the Trustee, within the time periods specified in the SEC’s rules and regulations, (i) all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if the Company were required to file such reports, and (ii) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

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(b) All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on the Company’s consolidated financial statements by the Company’s independent registered public accounting firm. In addition, the Company will file a copy of each of the reports referred to in clauses (a)(i) and (a)(ii) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request.

(c) If at any time, the Company is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, the Company will nevertheless continue filing the reports specified in the preceding paragraph with the SEC within the time periods specified above unless the SEC will not accept such a filing; provided that, for so long as the Company is not subject to the periodic reporting requirements of the Exchange Act for any reason, the time period for filing reports on Form 8-K shall be ten business days after the event giving rise to the obligation to file such report . The Company agrees that it will not take any action for the purpose of causing the SEC not to accept any such filings. If, notwithstanding the foregoing, the SEC will not accept the Company’s filings for any reason, the Company will post the reports referred to in the preceding paragraph on its website within the time periods that would apply if the Company were required to file those reports with the SEC, subject to the above provision.

(d) The Company and the Guarantors agree that, for so long as any Notes remain outstanding, at any time they are not required to file the reports required by the preceding paragraphs with the SEC, they will furnish to the Holders of the Notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(e) Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

(f) The Company will be deemed to have furnished such reports to the Trustee and the Holders of Notes pursuant to this Section 4.03 if it has filed such reports with the Commission using the EDGAR filing system (or any successor thereto) and such reports are publicly available.

SECTION 4.04. Compliance Certificate .

(a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto.

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(b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03(a) above shall be accompanied by a written statement of the Company’s independent public accountants that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Sections 4.01 , 4.05 , 4.07 , 4.09 , 4.10 , 4.11 or 5.01 hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any future knowledge of any such violation.

(c) The Company shall, so long as any series of Notes are outstanding, deliver to the Trustee, forthwith upon any executive Officer having knowledge that an event or circumstance constitutes a Default or an Event of Default and that such event or circumstance has occurred and is existing, an Officers’ Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.

SECTION 4.05. Taxes .

The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, charges, assessments, and governmental levies except such as are contested in good faith and, if required, by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

SECTION 4.06. Waiver of Stay, Extension and Usury Laws .

Each of the Company and the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and each of the Company and the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

SECTION 4.07. Restricted Payments .

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such, in each case other than dividends or distributions declared or paid in Equity Interests (other than Disqualified Equity) of the Company or declared or paid to the Company or any of its Restricted Subsidiaries; (ii) purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company (other than any such Equity Interests owned by the Company or a Restricted Subsidiary of the Company); (iii) make any payment to purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes, except (i) any intercompany indebtedness between or among the Company and any of its Restricted Subsidiaries and (ii) a payment of interest or principal at its Stated Maturity or a purchase, redemption, defeasance or other acquisition of such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity in each case due within one year of the date of purchase, redemption, defeasance or other acquisition; or (iv)

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make any Investment other than a Permitted Investment (all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “ Restricted Payments ”), unless, at the time of and after giving effect to such Restricted Payment:

(a) no Default or Event of Default shall have occurred and be continuing;

(b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09 ; and

(c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company or any of its Restricted Subsidiaries after the Issue Date (excluding Restricted Payments permitted by clauses (ii), (iii), (iv), (v), (vi), (viii), (ix), (x), (xi), (xii) or (xiii) of the next succeeding paragraph), is less than the sum of: (i) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the July 1, 2012 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a loss, less 100% of such loss), plus (ii) 100% of the aggregate net cash proceeds (other than Designated Proceeds), or the Fair Market Value of assets or property other than cash, received by the Company from the issue or sale, in either case, since the Issue Date of (A) Equity Interests of the Company (other than Disqualified Equity), or (B) Disqualified Equity or debt securities of the Company that have been converted into, or exchanged for, Equity Interests, together with the aggregate cash received at the time of such conversion or exchange, or received by the Company from any such conversion or exchange of such debt securities sold or issued prior to the Issue Date other than Equity Interests (or Disqualified Equity or convertible or exchangeable debt securities) sold to a Restricted Subsidiary of the Company and other than Disqualified Equity or debt securities that have been converted or exchanged into Disqualified Equity, plus (iii) in case any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary pursuant to the terms hereof or has been merged, consolidated or amalgamated with or into, or transfers or conveys assets to or is liquidated into, the Company or a Restricted Subsidiary, 100% of the Fair Market Value of such Investment in such Unrestricted Subsidiary (or of the assets transferred or conveyed, as applicable) as of the time of such redesignation, combination or transfer, plus (iv) to the extent not already included in Consolidated Net Income for such period, (A) if any Restricted Investment that was made by the Company or any Restricted Subsidiary after the Issue Date is sold, liquidated or repaid, 100% of the aggregate amount received in cash and the Fair Market Value of assets or property other than cash received and (B) with respect to any Restricted Investment that was made by the Company or any Restricted Subsidiary after the Issue Date, the net reduction in such Restricted Investment resulting from payments of interest, dividends, principal repayments and other transfers and distributions of cash, assets or property, in an amount not to exceed the aggregate amount of such Restricted Investment; plus (v) $1.0 billion.

The foregoing provisions shall not prohibit: (i) the payment of any dividend or the consummation of an irrevocable redemption of Subordinated Obligations within 60 days after the date of the declaration of such dividend or the delivery of the irrevocable notice of redemption, as the case may be, if at the date of the declaration or the date on which such irrevocable notice is delivered, such dividend or redemption would have complied with the provisions hereof (assuming, in the case of a redemption payment, the giving of the notice of such redemption payment would have been deemed to be a Restricted Payment at such time and such deemed Restricted Payment would have been permitted at such time); (ii) the making of any Restricted Payments out of the net cash proceeds (other than Designated Proceeds) of

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the substantially concurrent sale or issuance (a sale or issuance will be deemed substantially concurrent if such redemption, repurchase, retirement or acquisition occurs not more than 120 days after such sale or issuance) (other than to a Restricted Subsidiary of the Company) of Equity Interests of the Company (other than any Disqualified Equity), provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition, or payments, shall be excluded from clause (c)(2) of the preceding paragraph; (iii) the making of any principal payment on, or the defeasance, redemption, repurchase or other acquisition of, any Subordinated Obligation with the net cash proceeds from an incurrence of, or in exchange for the issuance of, Permitted Refinancing Indebtedness; (iv) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests (other than Disqualified Equity) on a pro rata basis and the payment of any dividend or distribution by the Company to the holders of its Disqualified Equity, provided that such Disqualified Equity is issued on or after the Issue Date; (v) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former officer, employee, consultant or director of the Company (or any of its Subsidiaries) pursuant to the terms of any management equity plan or stock option plan or any other management or employee benefit plan, agreement or trust, provided , however , that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests pursuant to this clause (v) shall not exceed $15.0 million in any twelve-month period (with up to $7.5 million of any unused amount in any 12-month period to be carried forward to successive calendar years and added to such amount); provided further that such amount in any calendar year may be increased by an amount not to exceed, (y) the cash proceeds from the sale of Equity Interests (other than Disqualified Equity) of the Company to any current or former officers, employees, consultants or directors of the Company or any of its Subsidiaries that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (c)(2) of the preceding paragraph and are not associated with Indebtedness owing to the Company or any Restricted Subsidiary; plus (z) the cash proceeds of key man life insurance received by the Company or its Restricted Subsidiaries after the Issue Date; and provided further that cancellation of Indebtedness owing to the Company or any Restricted Subsidiary from any current or former officers, employees, consultants or directors of the Company or any of its Restricted Subsidiaries in connection with a repurchase of Equity Interests of the Company will not be deemed to constitute a Restricted Payment for purposes of this Section; (vi) repurchases of Equity Interests deemed to occur upon the exercise of stock options or warrants to the extent that such Equity Interest represents all or a portion of the exercise price thereof; (vii) the purchase, repurchase, redemption, defeasance, acquisition or other retirement of any Indebtedness that is subordinated in right of payment to the Notes pursuant to provisions similar to those described in Section 4.10; provided that, prior to such purchase, repurchase, redemption, defeasance, acquisition or other retirement, the Company (or a third party to the extent permitted by this Indenture) has made a Change of Control Offer or Asset Sale Offer, as the case may be, with respect to the Notes as a result of such Change of Control Triggering Event or Asset Sale, as the case may be, and has repurchased all notes validly tendered and not withdrawn in connection with such Change of Control Offer or Asset Sale Offer, as the case may be; (viii) cash payments in lieu of the issuance of fractional shares, or the purchase by the Company of fractional shares in connection with (y) the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company or (z) stock dividends or distributions, stock splits, revenue stock splits, merger, consolidation or other business combinations; (ix) the declaration and payment of dividends on mandatorily convertible preferred stock of the Company (other than Disqualified Equity) issued after the Issue Date in an aggregate amount not to exceed the amount of Designated Proceeds; (x) (y) the payment of dividends or other distributions on Equity Interests of the Company and (z) the repurchase, redemption or other acquisition or retirement for value of Equity Interests, in each case, on any date where such series of the Notes are rated Baa or better by Moody’s and BB or better by S&P (or in either case, if such entity ceases to rate Notes for reasons outside of the control of the Company, the equivalent credit rating from any other Rating Agency), provided that on the date of such dividend, other

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distribution or repurchase, redemption or other acquisition or retirement for value after giving pro forma effect thereto and to any related financing transactions as if the same had occurred at the beginning of the Company’s most recently ended four full fiscal quarters for which internal financial statements are available, the Company’s Leverage Ratio would have been equal to or less than 2.0 to 1.0; (xi) other Restricted Payments made pursuant to this clause (xii) in an aggregate amount not to exceed at any one time outstanding $200.0 million; (xii) payments made or expected to be made by the Company or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests and repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants; or (xii) payments or distributions to dissenting shareholders pursuant to applicable law in connection with a merger, consolidation or transfer of assets that complies with Section 5.01 .

In determining whether any Restricted Payment is permitted by this Section 4.07 , the Company may allocate or reallocate all or any portion of such Restricted Payment among the clauses (i) through (xiii) of the preceding paragraph or among such clauses and the first paragraph of this Section 4.07 including clauses (a), (b) and (c), provided that at the time of such allocation or reallocation, all such Restricted Payments, or allocated portions thereof, would be permitted under this Section 4.07 . The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of the transfer, incurrence or issuance of such non-cash Restricted Payment.

The Board of Directors may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if: (i) immediately after giving effect to such designation, the Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test under the first paragraph of Section 4.09 hereof or the Fixed Charge Coverage Ratio of the Company immediately after giving effect to such designation would not be less than the Fixed Charge Coverage Ratio of the Company immediately prior to such designation; and (ii) no Default or Event of Default would be in existence following such designation. Any such designation by the Board of Directors shall be evidenced by the Company promptly filing with the Trustee a copy of the resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

The Board of Directors may designate any Subsidiary of the Company to be an Unrestricted Subsidiary under the circumstances and pursuant to the requirements described in the definition of “Unrestricted Subsidiary,” which requirements include that such designation will be made in compliance with this Section 4.07 . For purposes of making the determination as to whether such designation would be made in compliance with this Section 4.07 , all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of this Section 4.07 . All such outstanding Investments will be deemed to constitute Investments in an amount equal Fair Market Value of such Investments at the time of such designation.

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SECTION 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries .

The Company will not, and will not permit any of its Restricted Subsidiaries that is not a Guarantor to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary of the Company that is not a Guarantor to: (i) (x) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits, or (y) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries, provided , that the priority of any preferred stock in receiving dividends or liquidating distributions prior to the payment of dividends or liquidating distributions on common stock shall not be deemed to be a restriction on the ability to make distributions on Capital Stock; (ii) make loans or advances to the Company or any of its Restricted Subsidiaries; or (iii) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries. However the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of: (a) agreements in effect on the Issue Date and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings (collectively, for the purposes of this Section 4.08 , “ amendments ”) of any such agreements or any Indebtedness outstanding on the Issue Date to which such agreements relate, provided , that such amendments are not materially more restrictive, taken as a whole, with respect to such dividend, distribution and other payment restrictions than those contained in such agreement, as in effect on the Issue Date, as determined by the Company; (b) any Credit Facility in effect after the Issue Date to the extent its provisions are not materially more restrictive, taken as a whole, with respect to such dividend, distribution or other payment restrictions and loan or investment restrictions than those contained in any Credit Facility as in effect on the Issue Date, as determined by the Company; (c) this Indenture, the Notes, the Subsidiary Guarantees or any other indenture governing debt securities issued by the Company or any Guarantor that are not materially more restrictive, taken as whole, with respect to such dividend, distribution or other payment restrictions and loan or investment restrictions than those contained in this Indenture, the Notes and the Subsidiary Guarantees, as determined by the Company; (d) any future Liens that may be permitted to be granted under, or incurred not in violation of, any other provisions hereof; (e) applicable law, rule, regulation or order; (f) any instrument governing Indebtedness or Capital Stock, or any other agreement relating to any property or assets, of a Person acquired by or merged or consolidated with or into the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition or at the time it merges with or into the Company or any Restricted Subsidiary, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person or such Person’s subsidiaries, so acquired and any amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacements or refinancings thereof, provided that the restrictions in any such amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacement or refinancings are not materially more restrictive taken as a whole than those in effect on the date of the acquisition; (g) restrictions of the nature described in clause (iii) above by reason of customary non-assignment provisions in contracts, agreements, licenses, leases and conveyances entered into in the ordinary course of business; (h) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions of the nature described in clause (iii) above on the property acquired or leased; (i) customary provisions in bona fide contracts for the sale of property or assets that restricts the sale or disposition of such property or assets pending such sale; (j) any agreement for the sale or other disposition of a Subsidiary that restricts distributions by that Subsidiary pending its sale or other disposition; (k) agreements relating to secured Indebtedness otherwise permitted to be incurred pursuant to Section 4.09 hereof, and not in violation of Section 4.12 hereof, that limit the right of the debtor to dispose of assets securing such Indebtedness; (l) Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced, as determined by the Company; (m) provisions with respect to the disposition or distribution of assets in partnership agreements, limited liability company organizational governance documents, joint venture agreements, asset sale agreements, agreements relating to Sale/Leaseback Transactions, stock sale agreements and other similar agreements entered into in the ordinary course of business; (n) other Indebtedness, Disqualified Equity or preferred stock permitted to be incurred subsequent to the Issue Date pursuant to Section 4.09 hereof, provided that the encumbrances and restrictions contained therein will not materially impair the Company’s ability to

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make payments under the Notes when due, as determined in good faith by the Company; (o) encumbrances or restrictions contained in, or in respect of, Hedging Obligations permitted under this Indenture from time to time; and (p) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business.

SECTION 4.09. Incurrence of Indebtedness and Issuance of Disqualified Equity .

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “ incur ”) any Indebtedness (including Acquired Debt), other than Permitted Debt, and the Company shall not issue, and shall not permit any of its Restricted Subsidiaries to issue, any Disqualified Equity; provided , however , that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Equity if the Company’s Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such additional Indebtedness had been incurred, or such Disqualified Equity had been issued, as the case may be, at the beginning of such four-quarter period.

The provisions of the first paragraph of this Section 4.09 shall not apply to the incurrence of any Permitted Debt. Notwithstanding anything to the contrary contained in this Section 4.09 , accrual of interest, the accretion of accreted value or the amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09 .

The Company will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided , however , that no Indebtedness of the Company will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.

For purposes of determining compliance with this Section 4.09 , in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xvi) above or is entitled to be incurred pursuant to the first paragraph of this Section 4.09 , the Company will, in its sole discretion, classify (or later classify or reclassify) in whole or in part such item of Indebtedness in any manner that complies with this Section 4.09 and such item of Indebtedness or a portion thereof may be classified (or later classified or reclassified) in whole or in part as having been incurred under more than one of the applicable clauses or pursuant to the first paragraph of this Section 4.09 ; provided that all Indebtedness outstanding under the Senior Credit Facility on the Issue Date will be treated as incurred on the Issue Date under clause (i) of the definition of Permitted Debt.

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such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced, plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection with the incurrence of such new Indebtedness.

The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing. The amount of any Indebtedness outstanding as of any date will be: (i) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; (ii) the principal amount of the Indebtedness, in the case of any other Indebtedness; and (iii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of: (a) the Fair Market Value of such assets at the date of determination; and (b) the amount of the Indebtedness of the other Person.

SECTION 4.10. Asset Sales .

The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless: (i) the Company or the Restricted Subsidiary, as the case may be, receives consideration at least equal to the Fair Market Value (such Fair Market Value to be determined on the date of contractually agreeing to such Asset Sale and which shall give effect to the assumption by another Person of any liabilities as provided for in clause (ii)(a) of this paragraph of the assets or Equity Interests issued or sold or otherwise disposed of; (ii) at least 75% of the consideration received in such Asset Sale (provided such requirement shall be 50% for any Asset Sale to an MLP Party, other than sales of core refinery assets) is in the form of cash or Cash Equivalents; provided that any of the following items shall be deemed to be cash and Cash Equivalents for the purposes of this clause (ii): (a) the assumption (by contract or otherwise) of any liabilities (as shown on the Company’s or the Restricted Subsidiary’s most recent balance sheet) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Subsidiary Guarantee) by the transferee of any such assets that releases the Company or the Restricted Subsidiary from further liability with respect to such liabilities; (b) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents within 180 days following their receipt (to the extent of cash or Cash Equivalents received); (c) other assets or rights used or useful in a Permitted Business, including, without limitation, assets or Investments of the nature or type described in clause (m) of the definition of “Permitted Investments”; (d) accounts receivable of a business retained by the Company or any of its Restricted Subsidiaries following the sale of such business; provided , that such accounts receivable (i) are not past due more than 60 days and (ii) do not have a payment date greater than 90 days from the date of the invoice creating such accounts receivable and (e) any Designated Non-cash Consideration received by the Company or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (e) not to exceed 10% of the Consolidated Net Worth of the Company at the time of the receipt of such Designated Non-cash Consideration with the fair market value of each item of Designated Non-cash Consideration being measured at the time received without giving effect to subsequent changes in value.

Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company or such Restricted Subsidiary, as the case may be, may apply such Net Proceeds, at its option:

(a) to prepay, repay, purchase, repurchase or redeem any Senior Indebtedness of the Company or any Restricted Subsidiary,

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(b) to acquire a controlling interest in another business or all or substantially all of the assets of, or Capital Stock or operating line of another business, in each case engaged in a Permitted Business,

(d) to acquire other non-current assets to be used or useful in a Permitted Business, including, without limitation, assets or Investments of the nature or type described in clause (m) of the definition of “Permitted Investments”;

provided , that the Company or the applicable Restricted Subsidiary will be deemed to have complied with clause (b), (c) or (d) if, within 365 days of such Asset Sale, the Company or such Restricted Subsidiary shall have commenced and not completed or abandoned an expenditure or Investment, or a binding agreement with respect to an expenditure or Investment, in compliance with clause (b), (c) or (d), and that expenditure or Investment is substantially completed within a date one year and six months after the date of such Asset Sale. Pending the final application of any such Net Proceeds pursuant to this Section, the Company or the applicable Restricted Subsidiary may temporarily reduce Indebtedness under any Credit Facility or otherwise expend or invest such Net Proceeds in any manner that is not prohibited by this Indenture. Any Net Proceeds from Asset Sales described in this paragraph that are not applied or invested as provided within the time period set forth in the first sentence of this paragraph shall be deemed to constitute “Excess Asset Sale Proceeds.”

Within five days after the date on which the aggregate amount of Excess Asset Sale Proceeds exceeds $100.0 million (or at the Company’s option, an earlier date), the Company will be required to make an offer to the Holders of Notes and the holders of any Senior Indebtedness that is subject to requirements with respect to the application of net proceeds from asset sales that are substantially similar to those contained in this Indenture (an “ Asset Sale Offer ”) to purchase on a pro rata basis the maximum principal amount of the Notes and such other Indebtedness that may be purchased or prepaid, as applicable, out of the prorated Excess Asset Sale Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount (or accreted value) thereof plus accrued and unpaid interest, if any, thereon, to the date of purchase, subject to the right of Holders of Notes of record on the relevant date to receive interest due on the relevant interest payment date, in accordance with the procedures set forth in Section 3.09 hereof. To the extent that the aggregate principal amount (or accreted value) of Notes and other Indebtedness tendered (and electing to be redeemed or repaid, as applicable) pursuant to an Asset Sale Offer is less than the Excess Asset Sale Proceeds, the Company and its Restricted Subsidiaries may use any remaining Excess Asset Sale Proceeds for general corporate purposes and any other purpose not prohibited by this Indenture. If the aggregate principal amount (or accreted value) of Notes and such other Indebtedness surrendered by holders thereof exceeds the amount of the prorated Excess Asset Sale Proceeds, the Trustee shall select such Notes and the representative of the Holders of such other Indebtedness shall select such other Indebtedness to be purchased on a pro rata basis based on the principal amount or accreted value tendered. Upon completion of the offer to purchase, the amount of Excess Asset Sale Proceeds shall be reset at zero.

The Company shall comply with the requirements of Rule 14e-l under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section, the Company shall comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section by virtue of such compliance.

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SECTION 4.11. Transactions with Affiliates .

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with any Affiliate of any such Person (each of the foregoing, an “ Affiliate Transaction ”) if such Affiliate Transaction involves aggregate consideration in excess of $5.0 million, unless (i) the terms of such Affiliate Transaction are no less favorable in any material respect to the Company or the relevant Restricted Subsidiary, as the case may be, than those that could have been obtained in a comparable arm’s-length transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company; and (ii) if such Affiliate Transaction involves aggregate payments or value in excess of $50 million, the Company delivers to the trustee a resolution adopted by its Board of Directors approving such Affiliate Transaction and confirming that such Affiliate Transaction complies with clause (ii) above; provided that none of the following shall be deemed to be Affiliate Transactions and therefore shall not be subject to the provisions of this Section 4.11 : (1) Affiliate Transactions involving the purchase, sale, gathering, marketing, storage, terminalling, construction, transportation, and related logistical and operating activities, of crude oil, natural gas and other hydrocarbons, and refined products therefrom, in the ordinary course of any Permitted Business, so long as such transactions are priced in line with industry accepted benchmark prices and the pricing of such transactions are equivalent to the pricing of comparable transactions with unrelated third parties; (2) reasonable fees and compensation paid to or for the benefit of any employee, officer or director of the Company or any of its Restricted Subsidiaries, and any employment agreement, customary benefit program or arrangement, equity award, equity option or equity appreciation agreement or plan, agreement or other similar compensation plan or arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of its business, and any indemnities or other transactions permitted or required by bylaw, statutory provisions or any of the foregoing agreements, plans or arrangements; (3) transactions between or among (A) the Company and one or more Restricted Subsidiaries and (B) any Restricted Subsidiaries; (4) the existence of, or performance of by the Company or any Restricted Subsidiary of its obligations under the terms of any written agreement in effect on the Issue Date, as such agreement may be amended, modified or supplemented from time to time and any similar agreements which it may enter into thereafter; provided , however , that any amendment, modification or supplement to any such agreement or any such similar agreements entered into after the Issue Date will be permitted only to the extent that its terms, taken as a whole, are not materially less favorable to the Company or any Restricted Subsidiary as compared to the terms of the agreement in effect on the Issue Date, as determined by the Company; (5) loans or advances to officers, directors and employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures and other purposes, in each case, in the ordinary course of business; (6) maintenance in the ordinary course of business of customary benefit programs or arrangements for employees, officers or directors, including vacation plans, health and life insurance plans, deferred compensation plans and retirement or savings plans and similar plans; (7) fees and compensation paid and other benefits made available to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Company or any of its Restricted Subsidiaries in their capacity as such, including reimbursement or advancement of out-of-pocket expenses and provisions of officers’ and directors liability insurance, to the extent such fees and compensation are customary; (8) issuances of Equity Interests of the Company (other than Disqualified Equity) to Affiliates of the Company or any of its Restricted Subsidiaries and performance of reasonable and customary registration rights; (9) Restricted Payments that are permitted by Section 4.07 hereof and the definition of “Permitted Investments”; (10) any transactions between the Company or any Restricted Subsidiary and any Person, a director of which is also a director of the Company or a Restricted Subsidiary; provided that such director abstains from voting as a director of the Company or the Restricted Subsidiary, as applicable, in connection with the approval of the transaction; (11) any sale or other disposition or related transaction specified by the Omnibus Agreement; (12) transactions with a Person that is an Affiliate of the Company solely because the Company owns, directly or indirectly, an

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Equity Interest in, or controls, such Person;. (13) any transaction in which the Company or any of its Restricted Subsidiaries, as the case may be, delivers to the trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Tesoro or such Restricted Subsidiary from a financial point of view or that such transaction meets the requirements of clause (i) above; (14) guarantees of performance by the Company or any of its Restricted Subsidiaries in the ordinary course of business, except for guarantees of Indebtedness in respect of borrowed money; and (15) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture which are fair to the Company and its Restricted Subsidiaries, in the reasonable determination of the Company or that meet the requirements of clause (i) above

SECTION 4.12. Liens .

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien securing any Indebtedness (other than Permitted Liens) upon any of its property or assets (including Capital Stock of a Restricted Subsidiary), whether owned on the Issue Date or acquired after the Issue Date, unless (i) in the case of Liens securing Subordinated Obligations of the Company or a Restricted Subsidiary, the Notes or the Subsidiary Guarantees, as applicable, are contemporaneously secured by a Lien on such property or assets on a senior basis to the Subordinated Obligations so secured with the same priority that the Notes or the Subsidiary Guarantees, as applicable, have to such Subordinated Obligations until such time as such Subordinated Obligations are no longer so secured by a Lien; and (ii) in the case of Liens securing Senior Indebtedness of the Company or a Restricted Subsidiary, the Notes or the Subsidiary Guarantees, as applicable, are contemporaneously secured by a Lien on such property or assets on an equal and ratable basis with the Senior Indebtedness so secured until such time as such Senior Indebtedness is no longer so secured by a Lien.

SECTION 4.13. [ Reserved ].

SECTION 4.14. Corporate Existence .

Subject to Article V hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Restricted Subsidiary; provided , however , that the Company shall not be required to preserve the existence of any of its Restricted Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole.

SECTION 4.15. Offer to Repurchase upon Change of Control Triggering Event .

(a) Upon the occurrence of a Change of Control Triggering Event, all Holders of either series of Notes will have the right to require the Company to repurchase all or any part of such Holder’s Notes pursuant to the offer described below (the “ Change of Control Offer ”) at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, thereon, to, but excluding the date of purchase (the “ Change of Control Payment ”), subject to the right of Holders of the Notes of record on the relevant record date, to receive interest due on the relevant interest payment date.

Within 30 days following any Change of Control Triggering Event, the Company will send to each Holder a notice by first class mail, with a copy to the Trustee, or otherwise in accordance with the procedures of the Depositary stating: (i) the description of the transaction or transactions that constitute the Change of Control Triggering Event, that the Change of Control Offer is being made pursuant to this

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Section 4.15 , and that all Notes validly tendered and not withdrawn will be accepted for payment; (ii) the purchase price and the purchase date, which shall be no earlier than 20 business days and no later than 60 days from the date such notice is mailed (the “ Change of Control Payment Date ”); (iii) that any Note not tendered will continue to accrue interest; (iv) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (v) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes properly endorsed, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes properly completed, together with other customary documents as the Company may reasonably request, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date; (vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and (vii) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof. If any of the Notes subject to a Change of Control Offer are in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the Applicable Procedures of the Depositary applicable to repurchases.

(b) On the Change of Control Payment Date, the Company will, to the extent lawful, (i) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer and (ii) deposit with the Paying Agent in immediately available funds an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof properly tendered pursuant to the Change of Control Offer. The Paying Agent will promptly mail to each Holder of Notes properly tendered pursuant to the Change of Control Offer the Change of Control Payment for such Notes (or, if all the Notes are then in global form, it will make such payment through the facilities of the Depositary, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered by the Holder; provided that each such new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

(c) The Change of Control provisions described above will be applicable whether or not any other provisions of this Indenture are applicable, except as set forth in Article VIII hereof.

(d) The Company shall comply with the requirements of Rule 14e-l under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Indenture by virtue of such compliance.

(e) The Company will not be required to make a Change of Control Offer upon a Change of Control Triggering Event if (i) a third Party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture that are applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer or (ii) the Company has previously or concurrently mailed a redemption notice with respect to all the outstanding notes that is unconditional (except for consummation

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of the Change of Control) as described under Section 3.07. A Change of Control Offer may be made in advance of a Change of Control Triggering Event, and conditional upon the occurrence of such Change of Control Triggering Event, if a definitive agreement for the Change of Control is in place at the time of making of the Change of Control Offer.

(f) If Holders of not less than 90% in aggregate principal amount of the outstanding Notes of such notes tender and do not withdraw such Notes in a Change of Control Offer and the Company, or any third party making a Change of Control Offer in lieu of the Company as described in the immediately preceding paragraph, purchases all of such Notes validly tendered and not withdrawn by such Holders, the Company or such third party shall have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer, to redeem all Notes of such series that remain outstanding following such purchase at a price in cash equal to the Change of Control Payment plus, to the extent not included in the Change of Control Payment~ accrued and unpaid interest, if any, thereon, to the date of redemption, subject to the right of Holders of Notes of record on the relevant record date to receive interest due on the relevant interest payment date.

SECTION 4.16. Additional Subsidiary Guarantees .

If, after the Issue Date, any Domestic Subsidiary that is not already a Guarantor (whether or not acquired or created by the Company or a Restricted Subsidiary after the Issue Date) guarantees Indebtedness of the Company under a Credit Facility, then such Domestic Subsidiary will become a Guarantor with respect to the Notes issued thereunder by executing and delivering a supplemental indenture, in the form provided for herein, to the Trustee within 180 days of the date on which it guaranteed such Indebtedness. Notwithstanding the proceeding, any Subsidiary Guarantee of a Restricted Subsidiary that was incurred pursuant to this Section 4.16 will be released in the circumstances described under Section 10.04 hereof.

SECTION 4.17.

Effectiveness of Covenants and Other Provisions Upon an Investment Grade Rating Event; Investment Grade Covenant .

(a) Upon and after the occurrence of an Investment Grade Rating Event, the Company and its Subsidiaries, as the case may be, shall cease to be subject to Sections 4.03 , 4.05 , 4.07 , 4.08 , 4.09 , 4.10 , 4.11 , 4.12 , 4.14 (other than with respect to the corporate existence of the Company), 4.15 and 4.16 hereof, Article V hereof (other than clause (i) of the first paragraph thereof) and clause (g) of the first paragraph of Section 6.01 hereof and such provisions of this Indenture shall no longer have any effect. Such provisions of this Indenture shall not be reinstituted following the occurrence of an Investment Grade Rating Event even if the rating assigned to the Notes by a Rating Agency falls below an Investment Grade Rating.

(b) Following the occurrence of an Investment Grade Rating Event, if the Company or any Subsidiary incurs any Indebtedness secured by a Lien (other than a Permitted Lien) on any Principal Property or on any share of stock or Indebtedness of a Subsidiary, the Company or such Subsidiary, as the case may be, shall secure the Notes equally and ratably with (or, at the option of the Company, prior to) the Indebtedness so secured until such time as such Indebtedness is no longer secured by a Lien, unless the aggregate amount of all Indebtedness secured by a Lien and the Attributable Amounts of all Sale/Leaseback Transactions involving Principal Properties would not exceed 15% of the Company’s Consolidated Net Tangible Assets.

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ARTICLE V

SUCCESSORS

SECTION 5.01. Merger, Consolidation, or Sale of Assets .

The Company shall not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, convey, lease or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another Person, unless: (i) the Company is the resulting, transferee or surviving Person or the resulting, transferee or surviving Person (if other than the Company) is a corporation, limited liability company or limited partnership organized and existing under the laws of the United States or any state thereof or the District of Columbia and such resulting, transferee or surviving Person assumes, pursuant to a supplemental indenture and other documentation in form and substance reasonably satisfactory to the Trustee, all of the obligations and covenants of the Company under this Indenture and the Notes; provided , that, unless such resulting, transferee or surviving Person is a corporation, a corporate co-issuer of the Notes shall be added to this Indenture by such supplemental indenture; (ii) immediately before and after such transaction no Default or Event of Default shall exist; and (iii) either (a) immediately after giving pro forma effect to such transaction as if such transaction had occurred at the beginning of the applicable four-quarter period, the Company or the resulting, transferee or surviving Person (if other than the Company) would have a Fixed Charge Coverage Ratio that is not less than the Fixed Charge Coverage Ratio of the Company immediately prior to such transaction, (b) immediately after giving pro forma effect to such transaction as if such transaction had occurred at the beginning of the applicable four-quarter period, the Company or the resulting, transferee or surviving Person (if other than the Company) would be able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof; or (c) immediately after giving pro forma effect to such transaction, the Consolidated Net Worth of the Company or the resulting, transferee or surviving Person (if other than the Company) would be not less than the Consolidated Net Worth of the Company immediately prior to such transaction.

Clause (iii) of the first paragraph will not apply to (1) any merger, consolidation or sale, assignment, transfer, conveyance or other disposition of assets between or among the Company and any of its Restricted Subsidiaries or (2) a merger of the Company with an Affiliate solely for the purpose of reincorporating the Company in another jurisdiction.

This Section 5.01 will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Company and any of the Guarantors.

SECTION 5.02. Successor Corporation Substituted .

Upon any consolidation or merger, or any sale, assignment, transfer, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01 hereof, the successor Person formed by such consolidation or into or with which the Company is merged or to whom such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, conveyance or other disposition, the provisions of this Indenture referring to the “Company” shall refer instead to such successor Person and not to the Person previously defined as Company), and may exercise every right and power of, the Company under this Indenture and the Notes with the same effect as if such successor Person originally had been named as the Company herein; and when such successor corporation duly assumes all of the obligations and covenants of the Company pursuant to the Notes and hereto, the predecessor Person shall be relieved of all such obligations. The successor Person thereupon may cause to be signed, and may issue either in its own name or in the name of the predecessor Person, any or all the Notes issuable

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hereunder which theretofore shall not have been signed by the predecessor Person and delivered to the Trustee; and, upon the order of the successor Person, instead of the predecessor Person, and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Notes which previously shall have been signed and delivered by the officers of the predecessor Person to the Trustee for authentication, and any Notes which the successor Person thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all such Notes had been issued at the date of the execution hereof.

In case of such consolidation, merger, sale, assignment, transfer, conveyance or other disposition, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate.

ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default .

An “ Event of Default ” occurs with respect to a particular series of Notes if:

(a) the Company defaults in the payment when due of interest on such series of Notes and such default continues for a period of 30 days;

(b) the Company defaults in the payment when due of principal of or premium, if any, on such series of Notes;

(c) the Company or any of its Restricted Subsidiaries fails to comply with any of the provisions of Sections 4.15 and 5.01 hereof and such failure continues for 30 days after written notice is given to the Company as provided herein, with respect to such series of Notes;

(d) the Company fails to comply with Section 4.03 hereof and such failure continues for 120 days after written notice is given to the Company as provided below with respect to such series of Notes.

(e) the Company or any of its Restricted Subsidiaries fail to comply with any other agreement in this Indenture or the Notes (other than a failure that is subject to clause (a), (b), (c) or (d) above) and such failure continues for 60 days after written notice is given to the Company as provided herein with respect to such series of Notes;

(f) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default (i) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness (a “ Payment Default ”) or (ii) results in the acceleration of such Indebtedness prior to its express maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates

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without duplication $100.0 million or more, and such default shall not have been cured or waived or any such acceleration rescinded, or such Indebtedness is repaid, within ten Business Days after the running of such grace period or the occurrence of such acceleration;

(g) subject to Section 4.17 hereof, a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary, and such judgment or judgments remain unpaid, unstayed or undischarged for a period (during which execution shall not be effectively stayed) of 60 days, provided that the aggregate of all such unpaid or undischarged judgments exceeds $100.0 million (excluding amounts covered by insurance);

(h) the Company or any of its Restricted Subsidiaries that are Significant Subsidiaries or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of the Bankruptcy Code: (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a custodian of it or for all or substantially all of its property, (iv) makes a general assignment for the benefit of its creditors, or (v) generality is not paying its debts as they become due;

(i) a court of competent jurisdiction enters an order or decree under the Bankruptcy Code that (i) is for relief against the Company or any of its Restricted Subsidiaries that are Significant Subsidiaries or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary, in an involuntary case; (ii) appoints a custodian of the Company or any of its Restricted Subsidiaries that are Significant Subsidiaries or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary, or for all or substantially all of the property of the Company or any of its Restricted Subsidiaries that are Significant Subsidiaries or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary; or (iii) orders the liquidation of the Company or any of its Restricted Subsidiaries that are Significant Subsidiaries or any group of Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary; and the order or decree remains unstayed and in effect for 60 consecutive days; and

(j) except as permitted by this Indenture, any Subsidiary Guarantee of a Significant Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor that is a Significant Subsidiary, or any Person acting on behalf of any such Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee (other than by reason of the termination of this Indenture or the release of any such Subsidiary Guarantee in accordance with this Indenture).

A Default under clause (c), (d) or (e) above shall not constitute an Event of Default with respect to a particular series of Notes until the Trustee or the Holders of not less than 25% in the aggregate principal amount of the then outstanding Notes of such series provided written notice to the Company of the Default and the Company does not cure such Default within the specified time after receipt of such notice.

SECTION 6.02. Acceleration .

If any Event of Default occurs and is continuing with respect to a particular series of Notes, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes of such series may declare all the Notes of such series to be due and payable immediately. Upon any such declaration, the Notes of such series shall become due and payable immediately without further action or notice, subject to the provisions of this Indenture. Notwithstanding the foregoing, if an Event of Default

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specified in clause (g) or (h) of Section 6.01 hereof occurs with respect to the Company or any Significant Subsidiary or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary, all outstanding Notes shall be due and payable immediately without further action or notice, subject to the provisions of this Indenture. The Holders of at least a majority in aggregate principal amount of the then outstanding Notes of a particular series by written notice to the Trustee may on behalf of all of the Holders of such series rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal or interest that has become due solely because of the acceleration) have been cured or waived.

SECTION 6.03. Other Remedies .

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

SECTION 6.04. Waiver of Past Defaults .

In the case of an Event of Default specified in clause (e) of the first paragraph under Section 6.01 , an Event of Default and all consequences thereof (excluding, however, any resulting payment default) will be annulled, waived and rescinded with respect to the Notes, automatically and without any action by the Trustee or the Holders, if within 60 days after such Event of Default first arose the Company delivers an Officers’ Certificate to the Trustee stating that (i) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (ii) the holders of the Indebtedness have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (iii) the default that is the basis for such Event of Default has been cured; provided , however , that in no event shall an acceleration of the principal amount of the Notes pursuant to Section 6.02 hereof be annulled, waived or rescinded upon the happening of any such events.

Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes of a particular series waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of interest, if any, on, or the principal of or premium on, the Notes of such series including in connection with an offer to purchase; provided , however , that the Holders of a majority in aggregate principal amount of then outstanding Notes of a particular series may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration, to the extent permitted by applicable law. Upon any such waiver, such Default or Event of Default shall cease to exist with respect to such series of Notes, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

SECTION 6.05. Control by Majority .

Holders of a majority in aggregate principal amount of the then outstanding Notes of such series may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability.

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SECTION 6.06. Limitation on Suits .

A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if:

(a) the Holder of a Note has previously given to the Trustee written notice of a continuing Event of Default;

(b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;

(c) such Holder of a Note or Holders of Notes offer provides to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense to be incurred in compliance with such request;

(d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and

(e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.

SECTION 6.07. Rights of Holders of Notes to Receive Payment .

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase or redemption), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

SECTION 6.08. Collection Suit by Trustee .

If an Event of Default specified in Section 6.01(a) or (b) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

SECTION 6.09. Trustee May File Proofs of Claim .

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and

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distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 6.10. Priorities .

If the Trustee collects any money pursuant to this Article, it shall payout the money in the following order:

First : to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense, and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

Second : to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and interest, respectively; and

Third : to the Company or to such party as a court of competent jurisdiction shall direct.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10 .

SECTION 6.11. Undertaking for Costs .

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the cost of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

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ARTICLE VII

TRUSTEE

SECTION 7.01. Duties of Trustee .

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(i) The Trustee need perform only those duties that are specifically set forth in this Indenture and the TIA and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee. To the extent of any conflict between the duties of the Trustee hereunder and under the TIA, the TIA shall control.

(ii) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) this paragraph does not limit the effect of paragraph (b) of this Section;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section.

(e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

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SECTION 7.02. Rights of Trustee .

(a) The Trustee may conclusively rely upon any document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counselor both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counselor any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

(f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities (including fees and expenses of its agents and counsel) that might be incurred by it in compliance with such request or direction.

(g) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness of other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(h) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) The Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of Officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.

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SECTION 7.03. Individual Rights of Trustee .

The Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

SECTION 7.04. Trustee’s Disclaimer .

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

SECTION 7.05. Notice of Defaults .

If a Default or Event of Default occurs and is continuing and if it is actually known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90 days after the later of (a) the date the Default or Event of Default shall have occurred and (b) the date such Responsible Officer first had such actual knowledge. Except in the case of a Default or Event of Default in payment of principal of, or interest on, any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.

SECTION 7.06. Reports by Trustee to Holders of the Notes .

Within 60 days after each beginning with the following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA § 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA § 313(c).

A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA § 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange or delisted therefrom.

SECTION 7.07. Compensation and Indemnity .

The Company shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as such parties shall agree in writing from time to time. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The

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Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

The Company and the Guarantors shall indemnify each of the Trustee and any predecessor Trustee against any and all losses, liabilities, claims, damages or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07 ) and defending itself against any claim (whether asserted by the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability, claim, damage or expense may be attributable to its negligence, bad faith or willful misconduct. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim, and the Trustee shall cooperate in the defense. The Trustee may have separate counsel, and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.

The obligations of the Company under this Section 7.07 shall survive the satisfaction and discharge of this Indenture.

To secure the Company’s payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under the Bankruptcy Code.

The Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable.

SECTION 7.08. Replacement of Trustee .

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.

The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:

(a) the Trustee fails to comply with Section 7.10 hereof;

(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under the Bankruptcy Code;

(d) the Trustee becomes incapable of acting.

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If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the expense of the Company), the Company, or the Holders of Notes of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction (in the case of the Trustee, at the expense of the Company) for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10 hereof, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08 , the Company’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

SECTION 7.09. Successor Trustee by Merger, Etc .

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. As soon as practicable, the successor Trustee shall mail a notice of its succession to the Company and the Holders of the Notes.

SECTION 7.10. Eligibility; Disqualification .

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50.0 million as set forth in its most recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).

SECTION 7.11. Preferential Collection of Claims Against Company .

The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

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ARTICLE VIII

SATISFACTION AND DISCHARGE; DEFEASANCE

SECTION 8.01. Satisfaction and Discharge of Indenture .

This Indenture shall upon delivery of a written request of an Officer of the Company to the Trustee cease to be of further effect with respect to the Notes of a series (except as to any surviving rights of registration of transfer or exchange of Notes herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes of a series, when:

(a) either

(i) all such Notes theretofore authenticated and delivered (other than (1) such Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.07 hereof and (2) such Notes for whose payment money has been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 8.08 hereof) have been delivered to the Trustee for cancellation; or

(ii) all such Notes not theretofore delivered to the Trustee for cancellation

(1) have become due and payable by reason of the making of a notice of redemption or otherwise,

(2) will become due and payable at their final Stated Maturity within one year, or

(3) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense of, the Company,

and the Company, in the case of (ii)(l), (ii)(2) or (ii)(3) above, has deposited or caused to be deposited with the Trustee as trust funds, in trust solely for the purpose and the benefit of the Holders of such Notes, an amount of U.S. dollars or non-callable Government Securities, or a combination thereof, sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of such Notes which have become due and payable), the Stated Maturity or the redemption date (as the case may be) of the principal of the Notes;

(b) no Default or Event of Default with respect to this Indenture or the Notes of such series shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or shall occur as a result of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness or the grant of Liens securing such Indebtedness, all or a portion of the proceeds of which will be used to defease all of the Outstanding Notes pursuant to this Article VIII concurrently with such incurrence or within 30 days thereof), and such deposit will not result in a breach or violation of, or constitute a default under, any material instrument to which the Company or any Subsidiary Guarantor is a party or by which the Company or any Subsidiary Guarantor is bound;

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(c) the Company or any Subsidiary Guarantor has paid or caused to be paid all other sums payable hereunder by the Company with respect to such Notes; and

(d) the Company has delivered to the Trustee (i) irrevocable instructions under this Indenture to apply the deposited funds toward the payment of such Notes at their Stated Maturity or the redemption date, as the case may be, and (ii) an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture with respect to the Notes, the obligations of the Company to the Trustee under Section 7.07 hereof, and, if U.S. dollars or Government Securities shall have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of this Section, the obligations of the Company or Trustee under Section 8.02 hereof and Section 8.08 hereof shall survive.

SECTION 8.02. Application of Trust Money .

Subject to the provisions of Section 8.08 hereof, all money and Government Securities deposited with the Trustee pursuant to Section 8.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money or Government Securities has been deposited with the Trustee.

SECTION 8.03. Option to Effect Legal Defeasance or Covenant Defeasance .

The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers’ Certificate, at any time, exercise its right under either Section 8.04 or 8.05 hereof with respect to all outstanding Notes of a series upon compliance with the conditions set forth below in this Article VIII .

SECTION 8.04. Legal Defeasance and Discharge .

Upon the Company’s exercise under Section 8.03 hereof of the option applicable to this Section 8.04 , each of the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.06 hereof, be deemed to have discharged its obligations with respect to all outstanding Notes and, as applicable, its Subsidiary Guarantees on the date the conditions set forth below are satisfied (hereinafter, “ Legal Defeasance ”). For this purpose, Legal Defeasance means that each of the Company and the Guarantors shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes of a series, and to the extent applicable, represented by the Subsidiary Guarantees with respect to such series, which in each case shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.07 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Notes or Subsidiary Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes of a series to receive solely from the trust fund described in Section 8.06 hereof, and as more fully set forth in such Section, payments in respect of the principal of, and premium, if any, and interest, if any, on, such Notes when such payments

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are due (but not the Change of Control Payment or the payment pursuant to an Asset Sale Offer), (b) the Company’s obligations with respect to such Notes under Sections 2.03 , 2.04 , 2.07 , 2.10 and 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s obligations in connection therewith and (d) this Article VIII . Subject to compliance with this Article VIII , the Company may exercise its option under this Section 8.04 notwithstanding the prior exercise of its option under Section 8.05 hereof.

SECTION 8.05. Covenant Defeasance .

Upon the Company’s exercise under Section 8.03 hereof of the option applicable to this Section 8.05 , each of the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.06 hereof, be released from its obligations under the covenants contained in Article IV hereof (other than those in Sections 4.01 , 4.02 , 4.06 and 4.14 ), Article V hereof on and after the date the conditions set forth below are satisfied (hereinafter, “ Covenant Defeasance ”), and the Notes with respect to a particular series shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes of a series, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document, and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company’s exercise under Section 8.03 hereof of the option applicable to this Section 8.05 hereof, subject to the satisfaction of the conditions set forth in Section 8.06 hereof, Sections 6.01(e) through 6.01(f) hereof shall not constitute Events of Default with respect to such series.

SECTION 8.06. Conditions to Legal or Covenant Defeasance .

The following shall be the conditions to the application of either Section 8.04 or 8.05 hereof in order to exercise either Legal Defeasance or Covenant Defeasance with respect to the outstanding Notes:

(a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the applicable series of Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, and premium, if any, and interest, if any, on, the outstanding Notes of such series on the stated maturity or on the applicable repurchase or redemption date, as the case may be, and the Company must specify whether the Notes of such series are being defeased to maturity or to a particular repurchase or redemption date;

(b) in the case of an election under Section 8.04 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes of such series will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

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(c) in the case of an election under Section 8.05 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes of such series will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(d) no Default or Event of Default with respect to such series of Notes shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness or borrowing of funds or the grant of Liens securing such Indebtedness or other borrowing, all or a portion of the proceeds of which will be applied to such deposit);

(e) such deposit will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound, or if such breach, violation or default would occur, which is not waived as of, and for all purposes, on and after, the date of such deposit;

(f) the Company shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

(g) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

SECTION 8.07. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions .

Subject to Section 8.08 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.07 , the “ Trustee ”) pursuant to Section 8.06 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, if any, but such money need not be segregated from other funds except to the extent required by law.

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.06 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or non-callable Government Securities held by it as provided in Section 8.06 hereof which, in the opinion of a nationally recognized

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firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.06(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

SECTION 8.08. Repayment to Company .

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, or premium, if any, or interest, if any, on, any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest, if any, has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as a secured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided , however , that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.

SECTION 8.09. Reinstatement .

If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government Securities in accordance with Section 8.04 or 8.05 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.04 or 8.05 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.04 or 8.05 hereof, as the case may be; provided , however , that, if the Company makes any payment of principal of, or premium, if any, or interest, if any, on, any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE IX

AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01. Without Consent of Holders of Notes .

Notwithstanding Section 9.02 hereof, the Company and the Trustee may amend or supplement this Indenture, the Notes of any series or the Subsidiary Guarantees without the consent of any Holder of a Note:

(a) to cure any ambiguity, defect or inconsistency;

(b) to provide for uncertificated Notes in addition to or in place of certificated Notes or to alter the provisions of Article II hereof (including the related definitions) in a manner that does not materially adversely affect any Holder;

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(c) to provide for the assumption of the Company’s or any Guarantor’s obligations to the Holders of the Notes in the case of a merger, consolidation or sale of all or substantially all assets of the Company pursuant to Article V hereof or of any Guarantor pursuant to Article X hereof or to add any Person as a Guarantor hereunder or to release any Guarantor or otherwise comply with Article X , including the addition of any required co-issuer of the Notes;

(d) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any such Holder;

(e) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;

(f) or to allow any Guarantor to Guarantee the Notes or to release any Guarantor from any of its obligations under its Guarantee or this Indenture pursuant to Section 10.04 ;

(g) to evidence or provide for the acceptance of appointment of a successor Trustee pursuant to Sections 7.08 or 7.09 hereof;

(h) to add any additional Events of Default;

(i) to secure the Notes and/or the Subsidiary Guarantees;

(j) to conform the text of this Indenture, the Notes, the Subsidiary Guarantees to any provision of the Description of the Notes section of the Prospectus to the extent that such provision in the Description of the Notes was intended to be a recitation of a provision of this Indenture, the Notes or the Subsidiary Guarantees;

(k) to provide for the issuance of Additional Notes and related Subsidiary Guarantees to the extent otherwise permitted to be incurred under Section 4.09 hereof; and

(l) to comply with the rules of any applicable securities depository.

Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by a Responsible Officer of the Trustee of an Officers’ Certificate and an Opinion of Counsel, the Trustee shall join with the Company in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties, liabilities or immunities under this Indenture or otherwise.

SECTION 9.02. With Consent of Holders of Notes .

Except as provided below in this Section 9.02 , the Company and the Trustee may amend or supplement this Indenture (including Sections 3.09 , 4.10 and 4.15 hereof), the Notes of a particular or the Subsidiary Guarantees with respect to such series with the consent of the Holders, with respect to such series of Notes, of at least a majority in principal amount of the Notes of such series then outstanding (including consents obtained in connection with the purchase of, or a tender offer or exchange offer for, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or compliance with any provision of this Indenture, the Notes of a particular series or the Subsidiary Guarantees with respect to such series may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes of such series (including consents obtained in connection with a tender offer or exchange offer for such Notes).

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Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by a Responsible Officer of the Trustee of an Officers’ Certificate and an Opinion of Counsel, the Trustee shall join with the Company in the execution of such amended or supplemental indenture unless such amended or supplemental indenture affects the Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding may waive compliance in a particular instance by the Company with any provision of this Indenture, the Notes, or the Subsidiary Guarantees. However, without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes of a particular series held by a non-consenting Holder):

(a) reduce the principal amount of Notes of a particular series whose Holders must consent to an amendment, supplement or waiver under any provision of this Indenture, such series Notes or any Subsidiary Guarantee with respect to such series Notes;

(b) reduce the principal of or change the fixed maturity of any Note or alter or waive in any manner that adversely affects the rights of any Holder of Notes any of the provisions with respect to the redemption of the Notes except as provided above with respect to Sections 3.09 , 4.10 and 4.15 hereof and the related definitions;

(d) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);

(e) make any Note payable in currency other than that stated in the Notes;

(f) make any change that adversely affects the rights of any Holder of Notes in the provisions of this Indenture relating to waivers of past Defaults or make any change to the rights of Holders of Notes to receive payments of principal of, or premium, if any, or interest, if any, on the Notes (except as permitted in clause (g) of this Section 9.02 );

(g) waive a redemption payment with respect to any Note (other than a payment required by Sections 3.09 , 4.10 and 4.15 hereof); or

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(h) make any change in Section 6.04 or 6.07 hereof or in the foregoing amendment and waiver provisions.

SECTION 9.03. Compliance with Trust Indenture Act .

Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the TIA as then in effect.

SECTION 9.04. Revocation and Effect of Consents .

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

SECTION 9.05. Notation on or Exchange of Notes .

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company, in exchange for all Notes, may issue and the Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

SECTION 9.06. Trustee to Sign Amendments, Etc .

The Trustee shall sign any amended or supplemental indenture authorized pursuant to this Article IX if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise. The Company may not sign an amendment or supplemental indenture until the Board of Directors approves it. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.

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ARTICLE X

GUARANTEES

SECTION 10.01. Subsidiary Guarantees .

Subject to this Article X , each Guarantor hereby, jointly and severally, unconditionally guarantees on a senior basis to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes held thereby and the Obligations of the Company hereunder and thereunder, that:

(a) the principal of, and premium, if any, interest, if any, on, the Notes will be promptly paid in full when due, subject to any applicable grace period, whether at Stated Maturity, by acceleration, upon repurchase or redemption or otherwise, and interest on the overdue principal of, and premium, if any, (to the extent permitted by law) interest, if any, on, the Notes, and all other payment Obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full and performed, all in accordance with the terms hereof and thereof; and

(b) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at Stated Maturity, by acceleration, upon repurchase or redemption or otherwise.

Failing payment when so due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. An Event of Default under this Indenture or the Notes shall constitute an event of default under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the Obligations of the Guarantors hereunder and under the Notes in the same manner and to the same extent as the Obligations of the Company hereunder and under the Notes. The Guarantors hereby agree that their Obligations hereunder shall be unconditional, irrespective of the validity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance (other than complete performance) which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor, to the extent permitted by law, hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that its Subsidiary Guarantee will not be discharged except by complete performance of the Obligations contained in the Notes and this Indenture or upon the release of such Subsidiary Guarantee pursuant to Section 10.04 hereof. If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any Note Custodian, Trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by the Company or any Guarantor to the Trustee or such Holder, the Subsidiary Guarantees, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not be entitled to, and hereby waives, any right to exercise any right of subrogation in relation to the Holders in respect of any Obligations guaranteed hereby, except as provided under Section 10.05 hereof. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article VI hereof for the purposes of its Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed thereby, and (ii) in the event of any declaration of acceleration of such Obligations as provided in Article VI hereof, such Obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of its Subsidiary Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor pursuant to Section 10.05 hereof after the Notes and the Obligations hereunder shall have been paid in full to the Holders under the Subsidiary Guarantees.

SECTION 10.02.

Execution and Delivery of Additional Subsidiary Guarantee or Supplemental Indenture; Notation of Subsidiary Guarantee .

To effect any additional Subsidiary Guarantee set forth in Section 10.01 hereof, any future Guarantor shall execute and deliver a supplemental indenture substantially in the form of Exhibit B hereto, which supplemental indenture shall be entered into in accordance with Section 4.16 hereof and shall be executed on behalf of such Guarantor, by manual or facsimile signature, by an Officer of such Guarantor.

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To evidence its Subsidiary Guarantee set forth in Section 10.01 hereof, each Guarantor of a Note hereby agrees that a notation of such Subsidiary Guarantee substantially in the form set forth on Exhibit A hereof shall be endorsed by manual or facsimile signature of an Officer of such Guarantor or of the Company as attorney-in fact for such Guarantor on each such Note authenticated and delivered by the Trustee, and that this Indenture shall be executed on behalf of such Guarantor, by manual or facsimile signature, by an Officer of such Guarantor. For so long as a Subsidiary Guarantee of such Guarantor remains in full force and effect, each Guarantor hereby irrevocably appoints the Company as its attorney-in-fact for the purpose of executing in the name and on behalf of such Guarantor any endorsement of a notation of a Subsidiary Guarantee on any Note. If an Officer of the Company whose signature is on this Indenture or on the Subsidiary Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid nevertheless.

Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding any failure to endorse on each or any Note a notation of such Subsidiary Guarantee.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of the Guarantors.

For so long as a Subsidiary Guarantee of such Guarantor remains in full force and effect, each Guarantor hereby irrevocably appoints the Company as its attorney-in-fact for the purpose of executing in the name and on behalf of such Guarantor any supplemental indenture to this Indenture, or consent to any such supplemental indenture, which the Company and the Trustee are authorized to enter into pursuant to Sections 9.01 or 9.02 of this Indenture.

SECTION 10.03. Guarantors May Consolidate, Etc., on Certain Terms .

(a) Prior to the release of its Subsidiary Guarantee in accordance with the provisions of this Indenture, no Guarantor shall sell or otherwise dispose of all or substantially all of its properties or assets to, or consolidate with or merge with or into, another Person (whether or not such Guarantor is the resulting, transferee or surviving Person) other than the Company or another Guarantor, unless (i) immediately after giving effect to such transaction, no Default or Event of Default exists and (ii) either: (A) the Person acquiring the properties or assets in any such sale or other disposition or the Person formed by or surviving any such consolidation or merger (if other than the Company or another Guarantor) unconditionally assumes, pursuant to a supplemental indenture substantially in the form of Exhibit B hereto, all of the Obligations of such Guarantor under this Indenture, the Notes and its Subsidiary Guarantee or (B) the Net Proceeds of such sale or other disposition are applied in accordance with Section 4.10 hereof.

(b) In the case of any such sale, other disposition, consolidation or merger and upon the assumption by the resulting, transferee or surviving Person, by supplemental indenture, executed and delivered to the Trustee and substantially in the form of Exhibit B hereto, of the Subsidiary Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such resulting, transferee or surviving Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All of the Subsidiary Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Subsidiary Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Subsidiary Guarantees had been issued at the date of the execution hereof.

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SECTION 10.04. Releases .

The Subsidiary Guarantee of a Guarantor shall be released:

(a) in connection with any sale or other disposition of all or substantially all of the properties or assets of such Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, if the sale or other disposition complies with the applicable provisions of this Indenture;

(b) in connection with any sale or other disposition of all of the Capital Stock of such Guarantor to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, if the sale or other disposition complies with the applicable provisions of this Indenture;

(c) if such Guarantor is a Restricted Subsidiary and the Company designates such Guarantor as an Unrestricted Subsidiary in accordance with the applicable provisions of this Indenture;

(d) upon Legal Defeasance or Covenant Defeasance or satisfaction and discharge of this Indenture in accordance with Article VIII hereof;

(e) upon the release or discharge of a Guarantor’s guarantee of any Indebtedness that resulted in its obligation to provide a Subsidiary Guarantee with respect to the notes; or

(f) upon the liquidation or dissolution of such Guarantor provided that no Default or Event of Default has occurred and is continuing.

Upon delivery by the Company to the Trustee of an Officers’ Certificate to the effect that any of the conditions set forth in clauses (a) through (f) of the immediately preceding paragraph has occurred, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its Obligation under its Subsidiary Guarantee and this Indenture. Any Guarantor not released from its Obligations under its Subsidiary Guarantee shall remain liable for the full amount of principal of, and premium, if any, and interest, if any, on the Notes and for the other Obligations of such Guarantor under this Indenture as provided in this Article X .

SECTION 10.05. Limitation on Guarantor Liability; Contribution .

For purposes hereof, each Guarantor’s liability under its Subsidiary Guarantee shall be limited to the lesser of (i) the aggregate amount of the Obligations of the Company under the Notes and this Indenture and (ii) the amount, if any, which would not have (A) rendered such Guarantor “insolvent” (as such term is defined in the Bankruptcy Code and in the Debtor and Creditor Law of the State of New York) or (B) left such Guarantor with unreasonably small capital at the time its Subsidiary Guarantee of the Notes was entered into; provided that, it will be a presumption in any lawsuit or other proceeding in which a Guarantor is a party that the amount guaranteed pursuant to its Subsidiary Guarantee is the amount set forth in clause (i) above unless any creditor, or representative of creditors of such Guarantor, or debtor in possession or trustee in bankruptcy of such Guarantor, otherwise proves in such a lawsuit that the aggregate liability of such Guarantor is the amount set forth in clause (ii) above. In making any determination

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as to solvency or sufficiency of capital of a Guarantor in accordance with the previous sentence, the right of such Guarantor to contribution from other Guarantors as set forth below, and any other rights such Guarantor may have, contractual or otherwise, shall be taken into account.

In order to provide for just and equitable contribution among the Guarantors, the Guarantors shall agree, inter se, that in the event any payment or distribution is made by any Guarantor (a “ Funding Guarantor ”) under its Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution from all other Guarantors in a pro rata amount based on the Adjusted Net Assets of each Guarantor (including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding Guarantor in discharging the Company’s obligations with respect to the Notes or any other Guarantor’s Obligations with respect to its Subsidiary Guarantee.

SECTION 10.06. Trustee to Include Paying Agent .

In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term “ Trustee ” as used in this Article XI shall in each case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were named in this Article XI in place of the Trustee.

ARTICLE XI

MISCELLANEOUS

SECTION 11.01. Trust Indenture Act Controls .

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA § 318(c), the imposed duties shall control.

SECTION 11.02. Notices .

Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Company or any Guarantor:

Tesoro Corporation

19100 Ridgewood Parkway

San Antonio, Texas 78259

Attention: Corporate Secretary

With a copy to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Kenneth Wallach, Esq.

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If to the Trustee:

U.S. Bank National Association

535 Griswold, Suite 550

Detroit, Michigan 48226

Fax No.: (313) 963-9428

Attention: Corporate Trust Administration

The Company, any Guarantor or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back; when receipt acknowledged, if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.

SECTION 11.03. Communication by Holders of Notes with Other Holders of Notes .

Holders may communicate pursuant to TlA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

SECTION 11.04. Certificate and Opinion as to Conditions Precedent .

Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

(a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

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SECTION 11.05. Statements Required in Certificate or Opinion .

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include:

(a) a statement that the Person making such certificate or opinion has read such covenant or condition;

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.

SECTION 11.06. Rules by Trustee and Agents .

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

SECTION 11.07. No Personal Liability of Directors, Officers, Employees and Stockholders .

No past, present or future director, officer, employee, manager, incorporator, partner, member or stockholder or other owner of Capital Stock of the Company or any of its Subsidiaries, or of any member, partner or stockholder of any such entity, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, this Indenture, or the Subsidiary Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

SECTION 11.08. Governing Law .

THIS INDENTURE, THE SUBSIDIARY GUARANTEES AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 11.09. No Adverse Interpretation of Other Agreements .

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

SECTION 11.10. Successors .

All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of each Guarantor in this Indenture and the Subsidiary Guarantees shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.

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SECTION 11.11. Severability .

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 11.12. Counterpart Originals .

The parties may sign any number of copies of this Indenture, and each party hereto may sign any number of separate copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

SECTION 11.13. Table of Contents, Headings, Etc .

The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

[ Remainder of Page Intentionally Left Blank ]

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Dated as of , 2012


TESORO CORPORATION

By:
		Name: Title:


TESORO ALASKA COMPANY TESORO AVIATION COMPANY TESORO COMPANIES, INC. TESORO ENVIRONMENTAL RESOURCES COMPANY TESORO HAWAII, LLC TESORO REFINING AND MARKETING COMPANY TESORO TRADING COMPANY

By:
		Name: Title:


GOLD STAR MARITIME COMPANY TESORO FAR EAST MARITIME COMPANY TESORO MARITIME COMPANY

By:
		Name: Title:


TESORO NORTHSTORE COMPANY TESORO WASATCH, LLC TESORO SIERRA PROPERTIES, LLC TESORO SOUTH COAST COMPANY, LLC TESORO WEST COAST COMPANY, LLC

By:
		Name: Title:

S-1


SMILEY’S SUPER SERVICE, INC.

By:
		Name: Title:

S-2


U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:
		Name: Title:

S-3

EXHIBITS


Exhibit A-1		FORM OF 2017 NOTE

Exhibit A-2		FORM OF 2022 NOTE

Exhibit B		FORM OF SUPPLEMENTAL INDENTURE — ADDITIONAL SUBSIDIARY GUARANTEES

EXHIBIT A-1

[ Insert the Global Note Legends, if applicable, pursuant to the provisions of the Indenture ]

[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I)THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO ARTICLE II OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF TESORO CORPORATION OR ANY SUCCESSOR THERETO.

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE), TO TESORO CORPORATION OR ANY SUCCESSOR THERETO OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

[ Insert the OID Legend, if applicable, pursuant to the provisions of the Indenture ]

[THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR SUCH NOTE BY SUBMITTING A REQUEST FOR SUCH INFORMATION TO THE COMPANY AT THE FOLLOWING ADDRESS: TESORO CORPORATION, 19100 RIDGEWOOD PARKWAY, SAN ANTONIO, TEXAS 78259, ATTENTION: G. SCOTT SPENDLOVE.]

A-1

(Face of Note)

CUSIP:

ISIN:

% Senior Notes due 2017

No.

Principal Amount at Maturity: U.S.$

TESORO CORPORATION

Tesoro Corporation, a Delaware corporation (the “ Company ”) promises to pay to , or registered assigns, the principal sum of Dollars on , 2017, [or such greater or lesser amount as may be indicated on Schedule A hereto]. ¹

Interest Payment Dates: and , commencing on , 2013.

Record Dates: and .

Additional provisions of this Note are set forth on the other side of this Note.

¹	If this Note is a Global Note, include this provision.

A-2


TESORO CORPORATION

By:
		Name: Title:

This is one of the Global Notes referred to in the within-mentioned Indenture:


U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:		Dated:
	Authorized Signatory

A-3

(Back of Note)

% Senior Notes due 2017

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. Interest . Tesoro Corporation, a Delaware corporation (the “ Company ”), promises to pay interest on the principal amount of this Note at % per annum, from , 2013 until maturity. The Company will pay interest semi-annually in arrears on and of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “ Interest Payment Date ”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date, except in the case of the original issuance of Notes, in which case interest shall accrue from date of authentication; provided , further , that the first Interest Payment Date shall be , 2012. The Company shall pay interest (including post-petition interest in any proceeding under the Bankruptcy Code) on overdue principal and premium, if any, from time to time on demand at the rate borne on the Notes; it shall pay interest (including post-petition interest in any proceeding under the Bankruptcy Code) on overdue installments of interest, if any, (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

2. Method of Payment . The Company will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the and next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and interest at the office or agency of the Company maintained for such purpose within the City and State of New York, or, at the option of the Company, payment of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds will be required with respect to principal of, and interest and premium on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

3. Paying Agent and Registrar . Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

4. Indenture . The Company issued the Notes under an Indenture dated as of , 2012 (“ Indenture ”) among the Company, the Guarantors and the Trustee, as the same may be amended, modified or supplemented from time to time. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are unsecured obligations of the Company.

A-4

5. Optional Redemption.

(a) At any time and from time to time prior to , 2017, the Company may, at its option, redeem all or a portion of the 2017 Notes, upon Notice as described in Sections 3.02 and 3.03 at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium with respect to such Notes plus accrued and unpaid interest, if any, thereon, to, but excluding the redemption date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date.

(b) On or after , 2017, the 2017 Notes may be redeemed, in whole or in part, at our option at redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, thereon to but excluding the redemption date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date.

6. Mandatory Redemption . The Company shall not be required to make mandatory redemption payments with respect to the Notes.

7. Repurchase at Option of Holder .

(a) Upon the occurrence of a Change of Control Triggering Event, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes pursuant to a Change of Control Offer described in the Indenture at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, thereon, to the date of purchase (the “ Change of Control Payment ”). Within 30 days following any Change of Control Triggering Event, the Company shall mail to each Holder a notice setting forth the procedures governing such Change of Control Offer as required by the Indenture.

(b) If the Company or a Restricted Subsidiary consummates any Asset Sales and the aggregate amount of Excess Asset Sale Proceeds exceeds $100.0 million, the Company will commence an offer to all Holders of Notes (an “ Asset Sale Offer ”) pursuant to Section 3.09 of the Indenture and the holders of any Senior Indebtedness that is subject to requirements with respect to the application of net proceeds from asset sales that are substantially similar to those contained in the Indenture to purchase on a pro rata basis (with the Excess Asset Sale Proceeds prorated between the Holders of Notes and such holders of pari passu Indebtedness based upon outstanding aggregate principal amounts or accreted values) the maximum principal amount of the Notes and such other Indebtedness that may be purchased or prepaid, as applicable, out of the prorated Excess Asset Sale Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount (or accreted value) thereof plus accrued and unpaid interest, if any, thereon, to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate principal amount (or accreted value) of Notes and other Indebtedness tendered (and electing to be redeemed or repaid, as applicable) pursuant to an Asset Sale Offer is less than the Excess Asset Sale Proceeds, the Company and its Restricted Subsidiaries may use any remaining Excess Asset Sale Proceeds for general corporate purposes and any other purpose not prohibited by the Indenture. If the aggregate principal amount (or accreted value) of Notes and such other Indebtedness surrendered by holders thereof exceeds the amount of the prorated Excess Asset Sale Proceeds, the Company shall select the Notes and such other Indebtedness to be purchased on a pro rata basis based on the principal amount or accreted value tendered. Upon completion of the Asset Sale Offer, the amount of Excess Asset Sale Proceeds shall be reset at zero.

A-5

(c) Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes.

8. Notice of Redemption . Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $2,000 may be redeemed in part in whole multiples of $1,000; provided that the unredeemed principal amount of such Notes is not less than $2,000. On and after the redemption date, and interest, ceases to accrue on Notes or portions thereof called for redemption.

9. Denominations, Transfer, Exchange . The Notes are in registered from without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

10. Persons Deemed Owners . The registered Holder of a Note may be treated as its owner for all purposes.

11. Amendment, Supplement and Waiver . Subject to certain exceptions, the Indenture, the Notes or the Subsidiary Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the Indenture, the Notes or the Subsidiary Guarantees may be amended or supplemented to cure any ambiguity, defect or inconsistency; to provide for uncertificated Notes in addition to or in place of certificated Notes; to provide for the assumption of the Company’s or any Guarantor’s Obligations to Holders of Notes in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Guarantor’s assets, including the addition of any required co-issuer of Notes; to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the legal rights of any Holders under the Indenture; to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; to add any additional Guarantor or to release any Guarantor from its Subsidiary Guarantee, to evidence or provide for the acceptance of appointment of a successor Trustee or to add any additional Events of Default; to secure the Notes; to conform the text of the Indenture, the Notes or the Subsidiary Guarantees to any provision of the Description of the Notes section of the Prospectus to the extent that such provision in the Description of the Notes was intended to be a recitation of a provision of the Indenture, the Notes or the Subsidiary Guarantees; or to provide for Additional Notes and related Subsidiary Guarantees.

A-6

notice is given to the Company as provided in the Indenture (e) failure by the Company or any of its Restricted Subsidiaries to comply with any other agreement in the Indenture or Notes (other than a failure that is subject to clause (a), (b), (c) or (d) above) and such failure continues for 60 days after written notice is given to the Company as provided in the Indenture; (f) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default (i) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness (a “Payment Default”) or (ii) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates without duplication $100.0 million or more, and such default shall not have been cured or waived or any such acceleration rescinded, or such Indebtedness is repaid, within 10 Business Days after the running of such grace period or the occurrence of such acceleration; (f) subject to Section 4.17 of the Indenture, a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any of its Restricted Subsidiaries, and such judgment or judgments remain unpaid, unstayed or undischarged for a period (during which execution shall not be effectively stayed) of 60 days, provided that the aggregate of all such unpaid or undischarged judgments exceeds $100.0 million (excluding amounts covered by insurance); (g) certain events of bankruptcy or insolvency with respect to the Company or any of its Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary or any of its Restricted Subsidiaries that are Significant Subsidiaries; or (h) except as permitted in the Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee (other than by reason of termination of the Indenture or the release of such Subsidiary Guarantee in accordance with the Indenture). If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. In the case of an Event of Default specified in clause (e) of this paragraph, such Event of Default and all consequences thereof (excluding, however, any resulting payment default) will be annulled, waived and rescinded with respect to the Notes, automatically and without any action by the Trustee or the Holders of the Notes, if within 60 days after such Event of Default first arose the Company delivers an Officers’ Certificate to the Trustee stating that (1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (2) the holders of the Indebtedness have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (3) the default that is the basis for such Event of Default has been cured; provided, however, that in no event shall an acceleration of the principal amount of such Notes as described above be annulled, waived or rescinded upon the happening of any such events. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

A-7

13. Trustee Dealings with Company . The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for, the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

14. No Recourse Against Others . A director, officer, employee, manager, incorporator, partner, member or stockholder of the Company or any Subsidiary of the Company or any Guarantor, as such, shall not have any liability for any obligations of the Company or Guarantors under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.

15. Authentication . This Note shall not be valid until authenticated by the manual signature of a Responsible Officer of the Trustee or an authenticating agent.

16. Abbreviations . Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

17. CUSIP Numbers . Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

18. Governing Law . THE INDENTURE, THE SUBSIDIARY GUARANTEES AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

Tesoro Corporation

19100 Ridgewood Parkway

San Antonio, Texas 78259

Attention: Vice President, Finance and Treasurer.

[ Remainder of Page Intentionally Left Blank ]

A-8

Assignment Form

To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)


and irrevocably appoint

to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date:


Your Signature:

(Sign exactly as your name appears on the face of this Note)

SIGNATURE GUARANTEE

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

A-9

Option of Holder to Elect Purchase

If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:


¨ Section 4.10		¨ Section 4.15

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:


$

Date:


Your Signature:

(Sign exactly as your name appears on the face of this Note)


Tax Identification No.:

SIGNATURE GUARANTEE

A-10

SCHEDULE A

EXCHANGES OF INTERESTS IN THE GLOBAL NOTE***

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:


Date of Exchange	Amount of decrease in Amount of this Global Note	Amount of increase in Principal Amount of this Global Note	Principal Amount of this Global Note following such decrease (or increase)	Signature of authorized Trustee or Note Custodian

***This Schedule should be included only if the Note is issued in global form.

A-11

EXHIBIT A-2

[ Insert the Global Note Legends, if applicable, pursuant to the provisions of the Indenture ]

[ Insert the OID Legend, if applicable, pursuant to the provisions of the Indenture ]

A-1

(Face of Note)

CUSIP:

ISIN:

% Senior Notes due 2022

No.

Principal Amount at Maturity: U.S.$

TESORO CORPORATION

Tesoro Corporation, a Delaware corporation (the “ Company ”) promises to pay to , or registered assigns, the principal sum of Dollars on , 2022, [or such greater or lesser amount as may be indicated on Schedule A hereto]. ²

Interest Payment Dates: and , commencing on , 2013.

Record Dates: and .

Additional provisions of this Note are set forth on the other side of this Note.

²	If this Note is a Global Note, include this provision.

A-2


TESORO CORPORATION

By:
		Name: Title:

This is one of the Global Notes referred to in the within-mentioned Indenture:


U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:		Dated:
	Authorized Signatory

A-3

(Back of Note)

% Senior Notes due 2022

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

A-4

5. Optional Redemption .

(a) Except as set forth in subparagraph (b) and subparagraph (c) of this paragraph 5, the Notes shall not be redeemable at the Company’s option prior to , 2017. Thereafter, the Notes will be subject to redemption at any time and from time to time at the option of the Company, in whole or in part, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning of the years indicated below:


Year	Percentage
2017		%
2018		%
2019		%
2020 and thereafter		100.000%

(b) Notwithstanding the foregoing, at any time and from time to time before , 2015, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of the outstanding Notes (which amount includes Additional Notes) issued under this Indenture at a redemption price of % of the principal amount thereof, plus accrued and unpaid interest, if any, thereon, to the redemption date, with the net cash proceeds (other than Designated Proceeds) of anyone or more Equity Offerings; provided that at least 65% of the aggregate principal amount of Notes initially issued under this Indenture (which amount excludes Additional Notes) remain outstanding immediately after each such redemption; and provided , further , that each such redemption shall occur within 120 days of the date of the closing of such Equity Offering.

(c) Notwithstanding the foregoing, at any time and from time to time prior to , 2017, the Company may, at its option, redeem all or a portion of the Notes at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium with respect to such Notes plus accrued and unpaid interest, if any, thereon, to the redemption date.

6. Mandatory Redemption . The Company shall not be required to make mandatory redemption payments with respect to the Notes.

7. Repurchase at Option of Holder .

A-5

maximum principal amount of the Notes and such other Indebtedness that may be purchased or prepaid, as applicable, out of the prorated Excess Asset Sale Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount (or accreted value) thereof plus accrued and unpaid interest, if any, thereon, to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate principal amount (or accreted value) of Notes and other Indebtedness tendered (and electing to be redeemed or repaid, as applicable) pursuant to an Asset Sale Offer is less than the Excess Asset Sale Proceeds, the Company and its Restricted Subsidiaries may use any remaining Excess Asset Sale Proceeds for general corporate purposes and any other purpose not prohibited by the Indenture. If the aggregate principal amount (or accreted value) of Notes and such other Indebtedness surrendered by holders thereof exceeds the amount of the prorated Excess Asset Sale Proceeds, the Company shall select the Notes and such other Indebtedness to be purchased on a pro rata basis based on the principal amount or accreted value tendered. Upon completion of the Asset Sale Offer, the amount of Excess Asset Sale Proceeds shall be reset at zero.

10. Persons Deemed Owners . The registered Holder of a Note may be treated as its owner for all purposes.

A-6

to release any Guarantor from its Subsidiary Guarantee, to evidence or provide for the acceptance of appointment of a successor Trustee or to add any additional Events of Default; to secure the Notes; to conform the text of the Indenture, the Notes or the Subsidiary Guarantees to any provision of the Description of the Notes section of the Prospectus to the extent that such provision in the Description of the Notes was intended to be a recitation of a provision of the Indenture, the Notes or the Subsidiary Guarantees; or to provide for Additional Notes and related Subsidiary Guarantees.

12. Defaults and Remedies . Events of Default include: (a) default in the payment when due of interest on the Notes and such default continues for a period of 30 days after written notice is given to the Company as provided in the Indenture; (b) default in the payment when due of principal of, or premium, if any, on, the Notes; (c) failure by the Company or any of its Restricted Subsidiaries to comply with any of the provisions of Sections 4.15 and 5.01 of the Indenture and such failure continues for 30 days after written notice is given to the Company as provided in the Indenture; (d) failure by the Company to comply with Section 4.03 of the Indenture and such failure continues for 120 days after written notice is given to the Company as provided in the Indenture (e) failure by the Company or any of its Restricted Subsidiaries to comply with any other agreement in the Indenture or Notes (other than a failure that is subject to clause (a), (b), (c) or (d) above) and such failure continues for 60 days after written notice is given to the Company as provided in the Indenture; (f) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default (i) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness (a “Payment Default”) or (ii) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates without duplication $100.0 million or more, and such default shall not have been cured or waived or any such acceleration rescinded, or such Indebtedness is repaid, within 10 Business Days after the running of such grace period or the occurrence of such acceleration; (g) subject to Section 4.17 of the Indenture, a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any of its Restricted Subsidiaries, and such judgment or judgments remain unpaid, unstayed or undischarged for a period (during which execution shall not be effectively stayed) of 60 days, provided that the aggregate of all such unpaid or undischarged judgments exceeds $100.0 million (excluding amounts covered by insurance); (h) certain events of bankruptcy or insolvency with respect to the Company or any of its Restricted Subsidiaries that, when taken together, would constitute a Significant Subsidiary or any of its Restricted Subsidiaries that are Significant Subsidiaries; or (i) except as permitted in the Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee (other than by reason of termination of the Indenture or the release of such Subsidiary Guarantee in accordance with the Indenture). If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee

A-7

may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. In the case of an Event of Default specified in clause (f) of this paragraph, such Event of Default and all consequences thereof (excluding, however, any resulting payment default) will be annulled, waived and rescinded with respect to the Notes, automatically and without any action by the Trustee or the Holders of the Notes, if within 60 days after such Event of Default first arose the Company delivers an Officers’ Certificate to the Trustee stating that (1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (2) the holders of the Indebtedness have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (3) the default that is the basis for such Event of Default has been cured; provided, however, that in no event shall an acceleration of the principal amount of such Notes as described above be annulled, waived or rescinded upon the happening of any such events. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

15. Authentication . This Note shall not be valid until authenticated by the manual signature of a Responsible Officer of the Trustee or an authenticating agent.

18. Governing Law . THE INDENTURE, THE SUBSIDIARY GUARANTEES AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

A-8

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

Tesoro Corporation

19100 Ridgewood Parkway

San Antonio, Texas 78259

Attention: Vice President, Finance and Treasurer.

[ Remainder of Page Intentionally Left Blank ]

A-9

Assignment Form

To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)


and irrevocably appoint

to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date:


Your Signature:

(Sign exactly as your name appears on the face of this Note)

SIGNATURE GUARANTEE

A-10

Option of Holder to Elect Purchase

If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:


¨ Section 4.10		¨ Section 4.15

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:


$

Date:


Your Signature:

(Sign exactly as your name appears on the face of this Note)


Tax Identification No.:

SIGNATURE GUARANTEE

A-11

SCHEDULE A

EXCHANGES OF INTERESTS IN THE GLOBAL NOTE***


Date of Exchange	Amount of decrease in Amount of this Global Note	Amount of increase in Principal Amount of this Global Note	Principal Amount of this Global Note following such decrease (or increase)	Signature of authorized Trustee or Note Custodian

***This Schedule should be included only if the Note is issued in global form.

A-12

EXHIBIT B

FORM OF SUPPLEMENTAL INDENTURE ADDITIONAL SUBSIDIARY GUARANTEES

SUPPLEMENTAL INDENTURE (this “ Supplemental Indenture ”), dated as of , 20 among Tesoro Corporation, a Delaware corporation (the “ Company ”), [name of New Guarantor] (the “ New Guarantor ”), and U.S. Bank National Association, as trustee under the indenture referred to below (the “ Trustee ”). Capitalized terms used herein and not defined herein shall have the meaning ascribed to them in the Indenture (as defined below).

W I T N E S S E T H

WHEREAS, the Company and the existing Guarantors have heretofore executed and delivered to the Trustee an indenture (as amended, supplemented and in effect, the “ Indenture ”), dated as of , 2012, pursuant to which the Company has issued an aggregate principal amount of $ of % Senior Notes due 2017 and an aggregate principal amount of $ of % Senior Notes due 2022 (the “ Notes ”);

WHEREAS, Article X of the Indenture provides that under certain circumstances the Company mayor must cause certain of its Subsidiaries to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiaries shall unconditionally guarantee all of the Company’s Obligations under the Notes pursuant to a Subsidiary Guarantee on the terms and conditions set forth herein; and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the New Guarantor and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. Agreement to Guarantee . The New Guarantor hereby agrees, jointly and severally with all other Guarantors, to guarantee the Company’s Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article X of the Indenture and to be bound by all other applicable provisions of the Indenture as a Guarantor thereunder.

3. No Recourse Against Others . No past, present or future director, officer, employee, manager, incorporator, partner, member, agent, shareholder or other owner of Capital Stock of any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, any Subsidiary Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

4. NEW YORK LAW TO GOVERN . THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

B-1

5. Counterparts . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

6. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.

7. The Trustee . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the correctness of the recitals of fact contained herein, all of which recitals are made solely by the New Guarantor.

B-2

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

Dated:


TESORO CORPORATION

By:
		Name: Title:


[NEW GUARANTOR]

By:
		Name: Title:


U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:
		Name: Title:

B-3

Exhibit 5.1

S IMPSON T HACHER & B ARTLETT LLP

425 L EXINGTON A VENUE

N EW Y ORK , NY 10017-3954

(212) 455-2000

F ACSIMILE : 212-455-2502

September 13, 2012

Tesoro Corporation

19100 Ridgewood Parkway,

San Antonio, Texas 78259-1828

Ladies and Gentlemen:

We have acted as counsel to Tesoro Corporation, a Delaware corporation (the “Company”), the Delaware subsidiaries of the Company named on Schedule I hereto (each a “Delaware Guarantor” and, collectively, the “Delaware Guarantors”) and the non-Delaware subsidiaries of the Company named on Schedule II hereto (each a “Non-Delaware Guarantor,” collectively, the “Non-Delaware Guarantors” and, together with the Delaware Guarantors, the “Guarantors”), in connection with the Registration Statement on Form S-3 (the “Registration Statement”) filed by the Company and the Guarantors with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, relating to the issuance by the Company of $925,000,000 aggregate principal amount of Senior Notes due 2017 (the “2017 Notes”) and Senior Notes due 2022 (the “2022 Notes” and, together with the 2017 Notes, the “Securities”) and the issuance by the Guarantors of guarantees with respect to the 2017 Notes (the “2017 Notes Guarantees”) and guarantees with respect to 2022 Notes (the “2022 Notes Guarantees” and, together with 2017 Notes Guarantees, the “Guarantees”). The Securities and the Guarantees will be issued under an indenture (the “Indenture”) among the Company, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”).

We have examined the Registration Statement and the form of the Indenture, which has been filed with the Commission as an exhibit to the Registration Statement. We also have examined the originals, or duplicates or certified or conformed copies, of such corporate and other records, agreements, documents and other instruments and have made such other investigations as we have deemed relevant and necessary in connection with the opinions hereinafter set forth. As to questions of fact material to this opinion, we have relied upon certificates or comparable documents of public officials and of officers and representatives of the Company and the Guarantors.

In rendering the opinions set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies and the authenticity of the originals of such latter documents. We also have assumed that at the time of execution, authentication, issuance and delivery of the Securities, the Indenture will be the valid and legally binding obligation of the Trustee.

We have assumed further that at the time of execution, authentication, issuance and delivery of the Securities and the Guarantees, the Indenture will have been duly authorized, executed and delivered by the Company and the Delaware Guarantors. In addition, we have assumed that (1) at the time of execution, authentication, issuance and delivery of the Guarantees, the Indenture will have been duly authorized, executed and delivered by each Non-Delaware Guarantor in accordance with the law of its jurisdiction of formation and (2) execution, delivery and performance by each Non-Delaware Guarantor of the Indenture and each of the Guarantees will not violate the law of its jurisdiction of formation or any other applicable laws (excepting the law of the State of New York and the federal laws of the United States).

- 2 -

Based upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein, we are of the opinion that:

1. Assuming (a) the taking of all necessary corporate action to approve the issuance and terms of the Securities, the terms of the offering thereof and related matters by the Board of Directors of the Company, a duly constituted and acting committee of such Board of Directors or duly authorized officers of the Company (such Board of Directors, committee or authorized officers being referred to as the “Board” for the purposes of this paragraph 1) and (b) the due execution, authentication, issuance and delivery of the Securities, upon payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement approved by the Board and otherwise in accordance with the provisions of the Indenture and such agreement, the Securities will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms.

2. Assuming (a) the taking of all necessary corporate or limited liability company action, as applicable, to approve the issuance and terms of the Guarantees and related matters by the Board of Directors or Managing Member, as applicable, of each Guarantor, a duly constituted and acting committee of such Board of Directors or duly authorized officers of each Guarantor (such Board of Directors, Managing Member, committee or authorized officers being hereinafter referred to as the “Board” for the purposes of this paragraph 2), (b) the due execution, authentication, issuance and delivery of the Securities underlying such Guarantees, upon payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement approved by the Board and otherwise in accordance with the provisions of the Indenture and such agreement and (c) the due issuance of the Guarantees, the Guarantees will constitute valid and legally binding obligations of the Guarantors enforceable against the Guarantors in accordance with their terms.

Our opinions set forth above are subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing.

We do not express any opinion herein concerning any law other than the law of the State of New York, the federal law of the United States, the Delaware Limited Liability Company Act and the Delaware General Corporation Law.

- 3 -

We hereby consent to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement and to the use of our name under the caption “Legal matters” in the Prospectus included in the Registration Statement.

Very truly yours,

/s/ SIMPSON THACHER & BARTLETT LLP

SIMPSON THACHER & BARTLETT LLP

- 4 -

S CHEDULE I

Delaware Guarantors

Gold Star Maritime Company

Tesoro Alaska Company

Tesoro Aviation Company

Tesoro Companies, Inc.

Tesoro Environmental Resources Company

Tesoro Far East Maritime Company

Tesoro Maritime Company

Tesoro Refining and Marketing Company

Tesoro Sierra Properties, LLC

Tesoro South Coast Company, LLC

Tesoro Trading Company

Tesoro Wasatch, LLC

Tesoro West Coast Company, LLC

S CHEDULE II


Non-Delaware Guarantors		Jurisdiction of Incorporation or Organization

Smiley’s Super Service, Inc.		Hawaii
Tesoro Hawaii, LLC		Hawaii
Tesoro Northstore Company		Alaska

Exhibit 5.2

KENNETH P. EGGERS, P.C.

SALLY J. KUCKO

DENNIS G. FENERTY

DAVID A. DEVINE, P.C.

SARAH A. BADTEN

CLIFFORD J. GROH, SR.

1926-1998

LAW OFFICES OF

GROH EGGERS, LLC

2600 CORDOVA STREET, SUITE 110

ANCHORAGE, ALASKA 99503

Telephone

(907) 562-6474

Facsimile

(907) 562-6044

www.groheggers.com

September 13, 2012

Tesoro Corporation

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

Ladies and Gentlemen:

We have acted as special Alaska counsel for Tesoro Northstore Company, an Alaska corporation (the “Alaska Guarantor”) in connection with the preparation and filing by Tesoro Corporation, a Delaware corporation (“Tesoro”), and certain subsidiary guarantors of Tesoro, including the Alaska Guarantor, of the Registration Statement on Form S-3 (the “Registration Statement”) to be filed on the date hereof with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, relating to the issuance by the Company of Senior Notes due 2017 and Senior Notes due 2022 (together, the “Securities”) and the issuance by the Guarantors, as defined below, of guarantees with respect to the Securities.

The Securities and the guarantees will be issued under an indenture (the “Indenture”) among Tesoro, certain subsidiary guarantors of Tesoro, including the Alaska Guarantor (collectively, the “Guarantors”) and U.S. Bank National Association, as trustee (the “Trustee”). The Alaska Guarantor will issue a guarantee with respect to the Securities (the “Guarantee”).

In connection with the foregoing, we have examined originals or copies of such corporate records, as applicable, of the Alaska Guarantor, certificates and other communications of public officials, certificates of officers of the Alaska Guarantor and such other documents as we have deemed necessary for the purpose of rendering the opinions expressed herein. As to questions of fact material to those opinions, we have, with your permission and to the extent we deemed appropriate, relied on certificates of officers of the Alaska Guarantor and on certificates and other communications of public officials. We have assumed the genuineness of all signatures on, and the authenticity of, all documents submitted to us as originals, the conformity to authentic original documents of all documents submitted to us as copies, the due authorization, execution and delivery by the parties thereto of all documents examined by us (other than the due authorization of the Indenture by the Alaska Guarantor and the due authorization, execution and delivery of the Guarantee by the Alaska Guarantor), and the legal capacity of each individual who signed any of those documents.

Tesoro Corporation

September 13, 2012

Page 2

Based upon the foregoing, and having due regard for such legal considerations as we deem relevant, we are of the opinion that:

(i) the Alaska Guarantor has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Alaska;

(ii) Assuming (a) the due execution, authentication, issuance and delivery of the Securities underlying such Guarantees, upon payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement approved by the Board of Directors of the Alaska Guarantor, a duly constituted and acting committee of such Board of Directors or duly authorized officers of the Alaska Guarantor and otherwise in accordance with the provisions of the Indenture and such agreement and (b) the due issuance of the Guarantees, the Indenture and the Guarantee will be duly authorized by the Alaska Guarantor;

(iii) the Alaska Guarantor has full corporate power and authority to enter into the Indenture and the Guarantee;

(iv) the Indenture containing the Guarantee will be (A) duly executed by the Alaska Guarantor when signed by an Authorized Officer of the Alaska Guarantor designated in the resolutions of the Board of Directors of the Alaska Guarantor relating thereto and (B) duly delivered by the Alaska Guarantor when duly executed by the Alaska Guarantor and delivered to the Trustee;

(v) no consent, approval, authorization or order of any court or governmental agency or body of the State of Alaska that is generally applicable to entities such as the Alaska Guarantor is required of the Alaska Guarantor for the consummation of the transactions contemplated by the Indenture or the Guarantee.

(vi) the issue of the Guarantee by the Alaska Guarantor and the execution and delivery of the Indenture by the Alaska Guarantor will not violate the Certificate of Incorporation and By-laws of the Alaska Guarantor, or any rule or regulation that has been issued pursuant to any Alaska statute, or any order of which the undersigned has actual knowledge issued pursuant to any Alaska statute by any court or governmental agency or body having jurisdiction over the Alaska Guarantor or any of its properties.

The opinions expressed herein are limited exclusively to the laws of the State of Alaska and reported judicial interpretations of such laws, and we are expressing no opinion as to the effect of the laws of any other jurisdiction.

This opinion is given as of the date hereof, and we assume no obligation to update or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in laws that may hereafter occur.

Tesoro Corporation

September 13, 2012

Page 3

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under the caption “Legal matters” in the Prospectus included in the Registration Statement. Simpson Thacher & Bartlett LLP may rely upon this opinion in connection with the Registration Statement and related transactions.

Very truly yours,

GROH EGGERS, LLC

/s/ Dennis G. Fenerty

Dennis G. Fenerty

Exhibit 5.3


		Attorneys at Law Offices in Honolulu and Kona

Honolulu Office: 737 Bishop Street, Suite 2400, Honolulu, Hawaii 96813 / Tel. (808) 521-0400 / Fax (808) 521-0497

September 13, 2012

Tesoro Corporation

19100 Ridgewood Parkway

San Antonio, Texas 78259

Ladies and Gentlemen:

We have acted as special Hawaii counsel for Smiley’s Super Service, Inc., a Hawaii corporation, and Tesoro Hawaii, LLC, a Hawaii limited liability company (each, a “Hawaii Guarantor” and collectively, “Hawaii Guarantors”), in connection with the preparation and filing by Tesoro Corporation and certain subsidiary guarantors of Tesoro Corporation including each of the Hawaii Guarantors, of a Registration Statement on Form S-3 to be filed with the Securities and Exchange Commission on September 13, 2012 (“Registration Statement”) relating to the proposed issuance by Tesoro Corporation of senior notes due 2017 and senior notes due 2022 (collectively, “Senior Notes”) and related guarantees.

The Senior Notes will be issued pursuant to an Indenture among Tesoro Corporation, certain subsidiary guarantors of Tesoro Corporation including each of the Hawaii Guarantors, and U.S. Bank National Association, as Trustee (“Trustee”) (“Indenture”). Each of the Hawaii Guarantors will guaranty the Indenture by executing the Indenture as guarantors (“Guarantee”).

In connection with the foregoing, we have examined copies of (a) Smiley’s Super Service, Inc.’s Amended and Restated Articles of Incorporation executed as of January 1, 2009 (“Amended and Restated Articles of Incorporation”) and Amended and Restated Bylaws of Smiley’s Super Service, Inc. (“Amended and Restated Bylaws”) effective as of January 1, 2009, resolutions adopted by the Board of Directors of Smiley’s Super Service, Inc. on September 10, 2012 by unanimous written consent, a Secretary’s Certificate dated September 13, 2012, and a Certificate of Good Standing for Smiley’s Super Service, Inc., issued by the State of Hawaii, Department of Commerce and Consumer Affairs (“DCCA”) on September 10, 2012, and (b) Tesoro Hawaii, LLC’s Articles of Organization for Limited Liability Company filed on July 18, 2012 (“Articles of Organization”) and Operating Agreement of Tesoro Hawaii, LLC (“Operating Agreement”) executed as of July 18, 2012, resolutions adopted by the Managers Committee on September 10, 2012 by unanimous written consent, a Secretary’s Certificate dated September 13, 2012, and a Certificate of Good Standing for Tesoro Hawaii, LLC issued by the DCCA on September 10, 2012, for the purpose of rendering the opinions expressed herein. As to questions of fact material to those opinions, we have, to the extent we deemed appropriate, relied on certificates and other documents of the Hawaii Guarantors and on certificates and other communications of public officials. We have assumed the genuineness of all signatures on, and

Tesoro Hawaii Corporation

Smiley’s Super Service, Inc.

September 13, 2012

Page 2

the authenticity of, all documents submitted to us as originals, the conformity to authentic original documents of all documents submitted to us as copies, the due authorization, execution and delivery by the parties thereto of all documents examined by us, and the legal capacity of each individual who signed any of those documents. We have rendered our opinion based solely upon the actual knowledge of the attorneys of the firm who have been directly involved in representing the Hawaii Guarantors.

Based upon the foregoing, and having due regard for such legal considerations as we deem relevant, we are of the opinion that:

(i) Tesoro Hawaii, LLC has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Hawaii;

(ii) Smiley’s Super Service, Inc. has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Hawaii;

(iii) the Guarantee set forth in the Indenture has been duly authorized by each of the Hawaii Guarantors;

(iv) Tesoro Hawaii, LLC has full power and authority to enter into the Guarantee set forth in the Indenture;

(v) Smiley’s Super Service, Inc. has full corporate power and authority to enter into the Guarantee set forth in the Indenture;

(vi) the Indenture (with respect to the Guarantee only) will be (A) duly executed by Tesoro Hawaii, LLC when signed by an officer of Tesoro Hawaii, LLC designated in the resolutions of the Managers Committee of Tesoro Hawaii, LLC relating thereto, and (B) duly delivered by Tesoro Hawaii, LLC when duly executed by Tesoro Hawaii, LLC and delivered to the Trustee;

(vii) the Indenture (with respect to the Guarantee only) will be (A) duly executed by Smiley’s Super Service, Inc. when signed by an officer of Smiley’s Super Service, Inc. designated in resolutions of the Board of Directors of Smiley’s Super Service, Inc. relating thereto, and (B) duly delivered by Smiley’s Super Service, Inc. when duly executed by Smiley’s Super Service, Inc. and delivered to the Trustee;

(viii) to our actual knowledge, no consent, approval, authorization or order of any governmental agency or body of the State of Hawaii generally applicable to Hawaii limited liability companies or Hawaii corporations is required of either Hawaii Guarantor for the consummation of the Guarantee contemplated by the Indenture;

(ix) to our actual knowledge, no consent, approval, authorization or order of any court of the State of Hawaii is required of either Hawaii Guarantor for the consummation of the Guarantee contemplated by the Indenture;

Tesoro Hawaii Corporation

Smiley’s Super Service, Inc.

September 13, 2012

Page 3

(x) the execution and delivery of the Indenture (with respect to the Guarantee only) by the Hawaii Guarantors will not violate Smiley’s Super Service, Inc.’s Amended and Restated Articles of Incorporation and Amended and Restated Bylaws and will not violate Tesoro Hawaii, LLC’s Articles of Organization and Operating Agreement; and

(xi) to our actual knowledge, the execution and delivery of the Guarantee by the Hawaii Guarantors will not violate any laws of the State of Hawaii or rules or regulations thereunder.

QUALIFICATIONS

The foregoing opinion is subject to the following qualifications and limitations:

1. This opinion is given as of the date hereof, and we assume no obligation to update or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in laws that may hereafter occur.

2. Although certain members of our firm are admitted to practice in states other than the State of Hawaii, we have not examined the laws of any state other than the State of Hawaii, nor have we consulted with members of our firm who are admitted in other jurisdictions with respect to the laws of such jurisdictions. Accordingly, although certain members of our firm are qualified to practice law in states other than the State of Hawaii, the foregoing opinions apply only with respect to the laws of the State of Hawaii and we express no opinion with respect to the laws of any other jurisdiction. The opinions expressed in this letter are based upon the law in effect on the date hereof, and we assume no obligation to revise or supplement this letter should such law be changed by legislative action, judicial decision, or otherwise. Except as expressly stated in this letter, no opinions are offered or implied as to any matter, and no inference may be drawn beyond the strict scope of this letter.

3. The opinion is limited by the general principles of equity and the effect of court decisions invoking principles of equity, and by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar laws of general applicability.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to use our name under the caption “Legal Matters” in the Prospectus included in the Registration Statement. Simpson Thacher & Bartlett LLP may rely upon this opinion in connection with the Registration Statement and related transactions.

Sincerely,

Rush Moore LLP

/s/ Rush Moore LLP

Exhibit 12.1

RATIO OF EARNINGS TO FIXED CHARGES

We have computed the ratio of earnings to fixed charges for each of the following periods on a consolidated basis. For purposes of computing the ratio of earnings to fixed charges, “earnings” consist of pre-tax income plus fixed charges (excluding capitalized interest). “Fixed charges” represent interest incurred (whether expensed or capitalized), amortization of debt expense and that portion of rental expense on operating leases deemed to be the equivalent of interest. You should read the ratio of earnings to fixed charges in conjunction with our consolidated and condensed financial statements that are incorporated by reference in this prospectus.


	Years Ended December 31,												Six Months Ended June 30,
	2007		2008		2009			2010			2011		2011		2012
	(Dollars in millions)
EARNINGS:
Earnings before income taxes	$	905	$	429	$	(188	)	$	(25	)	$	905	$	534	$	727
Interest expense, net of capitalized interest		79		100		117			137			160		93		64
Amortization of debt discount		8		6		8			9			4		4		—
Amortization of debt issuance costs		4		5		5			9			12		6		6
Estimated interest portion of rents (a)		56		62		45			42			48		15		17

Total Earnings	$	1,052	$	602	$	(13	)	$	172		$	1,129	$	652	$	814

FIXED CHARGES:
Interest expense whether expensed or capitalized	$	109	$	127	$	142		$	156		$	174	$	100	$	72
Amortization of debt discount		8		6		8			9			4		4		—
Amortization of debt issuance costs		4		5		5			9			12		6		6
Estimated interest portion of rents (a)		56		62		45			42			48		15		17

Total Fixed Charges	$	177	$	200	$	200		$	216		$	238	$	125	$	95

RATIO OF EARNINGS TO FIXED CHARGES		5.9		3.0		*	(b)		*	(b)		4.7		5.2		8.6

(a)

Total rental expense including marine charters was approximately $386 million, $469 million, $374 million, $347 million and $398 million for the years ended 2007, 2008, 2009, 2010 and 2011 respectively and approximately $188 million and $207 million for the six months ended June 30, 2011 and June 30, 2012, respectively.

(b)

For the years ended December 31, 2009 and 2010, fixed charges exceeded total earnings by $213 million and $44 million, respectively.

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” in this Registration Statement (Form S-3) and related Prospectus of Tesoro Corporation for the registration of $925,000,000 of Senior Notes, and to the incorporation by reference therein of our reports dated February 24, 2012, with respect to the consolidated financial statements of Tesoro Corporation, and the effectiveness of internal control over financial reporting of Tesoro Corporation, included in its Annual Report (Form 10-K) for the year ended December 31, 2011, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

San Antonio, Texas

September 12, 2012

Exhibit 25.1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

Check if an Application to Determine Eligibility of a Trustee Pursuant to Section 305(b)(2)

U.S. BANK NATIONAL ASSOCIATION

(Exact name of Trustee as specified in its charter)

31-0841368

I.R.S. Employer Identification No.

800 Nicollet Mall

Minneapolis, Minnesota

55402

(Address of principal executive offices)

(Zip Code)

James Kowalski

U.S. Bank National Association

535 Griswold Street, Suite 550

Detroit, MI 48226

(313) 234-4716

(Name, address and telephone number of agent for service)

Tesoro Corporation

(Issuer with respect to the Securities)

Delaware

95-0862768

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

19100 Ridgewood Parkway,

11 ^th Floor

San Antonio, Texas

78259

(Address of Principal Executive Offices)

(Zip Code)

Senior Notes

(Title of the Indenture Securities)

FORM T-1

Item 1.

GENERAL INFORMATION . Furnish the following information as to the Trustee.

Name and address of each examining or supervising authority to which it is subject.

Comptroller of the Currency

Washington, D.C.

Whether it is authorized to exercise corporate trust powers.

Yes

Item 2.

AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation.

None

Items 3-15

Items 3-15 are not applicable because to the best of the Trustee’s knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

Item 16.

LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification.

A copy of the Articles of Association of the Trustee.*

A copy of the certificate of authority of the Trustee to commence business, attached as Exhibit 2.

A copy of the certificate of authority of the Trustee to exercise corporate trust powers, attached as Exhibit 3.

A copy of the existing bylaws of the Trustee.**

A copy of each Indenture referred to in Item 4. Not applicable.

The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.

Report of Condition of the Trustee as of December 31, 2011 published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

*	Incorporated by reference to Exhibit 25.1 to Amendment No. 2 to registration statement on S-4, Registration Number 333-128217 filed on November 15, 2005.

**	Incorporated by reference to Exhibit 25.1 to registration statement on S-4, Registration Number 333-166527 filed on May 5, 2010.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Detroit, State of Michigan on the 13th of September, 2012.


By:		/s/ James Kowalski
		James Kowalski
		Vice President

Exhibit 2

LOGO

Exhibit 3

LOGO

Exhibit 6

CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Dated: September 13, 2012


By:		/s/ James Kowalski
		James Kowalski
		Vice President

Exhibit 7

U.S. Bank National Association

Statement of Financial Condition

As of 6/30/2012

($000’s)


	6/30/2012
Assets
Cash and Balances Due From Depository Institutions	$	15,399,893
Securities		72,720,824
Federal Funds		75,584
Loans & Lease Financing Receivables		211,830,660
Fixed Assets		5,286,747
Intangible Assets		12,383,063
Other Assets		25,125,941

Total Assets	$	342,822,712

Liabilities
Deposits	$	245,043,009
Fed Funds		6,587,299
Treasury Demand Notes		0
Trading Liabilities		937,898
Other Borrowed Money		35,563,317
Acceptances		0
Subordinated Notes and Debentures		5,829,815
Other Liabilities		11,359,611

Total Liabilities	$	305,320,949

Equity
Minority Interest in Subsidiaries	$	2,015,054
Common and Preferred Stock		18,200
Surplus		14,133,323
Undivided Profits		21,335,186

Total Equity Capital	$	37,501,763

Total Liabilities and Equity Capital	$	342,822,712