CONTRIBUTION, CONVEYANCE AND ASSUMPTION

AGREEMENT

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

RECITALS

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

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

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

ARTICLE I

DEFINITIONS

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

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

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

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

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

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

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

“ Execution Date ” means November 15, 2012.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE II

CONTRIBUTIONS AND ACKNOWLEDGEMENTS

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

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

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

Section 2.2      Conveyances by the General Partner to the Partnership .

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

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

(i)      $162 million in cash;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE III

REPRESENTATIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE IV

COVENANTS

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

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

ARTICLE V

MISCELLANEOUS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

If to the Tesoro or TRMC:

Tesoro Corporation

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

Attn: Charles S. Parrish

Facsimile: (210) 745-4494

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

Tesoro Logistics LP

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

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

Attn: Charles S. Parrish

Facsimile: (210) 745-4494

[Signature Page Follows]

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

EXHIBIT A

Assets

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

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

    

EXHIBIT B

Permitted Liens

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

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

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

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

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

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

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

(g)     created by Operating Company; and

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

EXHIBIT C

Excluded Assets and Liabilities

Offsite control system in the Facility.

EXHIBIT D

Form of 10-Year Promissory Note

(See Attached.)

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

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

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

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

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

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

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

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

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

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

EXHIBIT E

Forms of Conveyance Documents

Bill of Sale, Assignment and Assumption (see attached)

BILL OF SALE, ASSIGNMENT AND ASSUMPTION

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

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

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

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

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

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

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

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

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

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

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

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

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

[SIGNATURE PAGE FOLLOWS]

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

                    

SCHEDULE A TO

BILL OF SALE, ASSIGNMENT AND ASSUMPTION

ASSETS

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

SECOND AMENDED AND RESTATED OMNIBUS AGREEMENT

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

R E C I T A L S:

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

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

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

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

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

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

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

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

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

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

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

ARTICLE I

DEFINITIONS

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

“ Administrative Fee ” is defined in Section 4.1 .

“ Affiliate ” is defined in the Partnership Agreement.

“ Annual Environmental Deductible ” is defined in Section 3.7 .

“ Annual ROW Deductible ” is defined in Section 3.7 .

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

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

“ Conflicts Committee ” is defined in the Partnership Agreement.

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

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

“ Covered Environmental Losses ” is defined in Section 3.1 .

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

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

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

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

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

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

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

“ License ” is defined in Section 7.1 .

“ Limited Partner ” is defined in the Partnership Agreement.

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

“ Marks ” is defined in Section 7.1 .

“ Name ” is defined in Section 7.1 .

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

“ Offer ” is defined in Section 2.3 .

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

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

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

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

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

“ Partnership Security ” is defined in the Partnership Agreement.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“ Tesoro Indemnified Parties ” is defined in Section 3.4 .

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

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

ARTICLE II

BUSINESS OPPORTUNITIES

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

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

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

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

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

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

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

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

2.3      Procedures .

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

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

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

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

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

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

ARTICLE III

INDEMNIFICATION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE IV

CORPORATE SERVICES

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE V

CAPITAL AND OTHER EXPENDITURES

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

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

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

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

ARTICLE VI

RIGHT OF FIRST OFFER

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE VII

LICENSE OF NAME AND MARK

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

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

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

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

ARTICLE VIII

REPRESENTED EMPLOYEES; VEHICLE LEASES

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

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

ARTICLE IX

MISCELLANEOUS

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

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

If to the Tesoro Entities:

Tesoro Corporation

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

Attn: Charles S. Parrish

Facsimile: (210) 745-4494

If to the Partnership Group:

Tesoro Logistics LP

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

19100 Ridgewood Parkway

San Antonio, Texas 78259-1828

Attn: Charles S. Parrish

Facsimile: (210) 745-4494

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

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

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

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

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

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

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

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

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

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

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

TESORO CORPORATION

Daniel R. Romasko

Executive Vice President, Operations

TESORO REFINING AND MARKETING COMPANY

Daniel R. Romasko

Executive Vice President, Operations

TESORO COMPANIES, INC.

Daniel R. Romasko

Executive Vice President, Operations

TESORO ALASKA COMPANY

Daniel R. Romasko

Executive Vice President, Operations

TESORO LOGISTICS LP

its general partner

Phillip M. Anderson

President

TESORO LOGISTICS GP, LLC

Phillip M. Anderson

President

EXHIBIT A

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

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

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

Executed as of _______________, 20___.

Schedule I

Pending Environmental Litigation

For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :

None.

For Long Beach Contribution Agreement listed on Schedule VII :

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

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

Schedule II

Environmental Matters

For Initial Contribution Agreement set forth on Schedule VII :

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

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

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

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

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

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

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

Schedule II

Environmental Matters
(continued)

For Amorco Contribution Agreement set forth on Schedule VII :

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

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

For Long Beach Contribution Agreement listed on Schedule VII :

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

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

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

Schedule III

Pending Litigation

For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :

None.

For Long Beach Contribution Agreement listed on Schedule VII :

None.

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

Schedule IV

Section 4.1(a): General and Administrative Services

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

For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :

None.

For Long Beach Contribution Agreement listed on Schedule VII :

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

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

Schedule VI

Existing Capital and Expense Projects

For Initial Contribution Agreement listed on Schedule VII :

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

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

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

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

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

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

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

For Amorco Contribution Agreement listed on Schedule VII :

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

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

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

Schedule VI

Existing Capital and Expense Projects
(continued)

For Long Beach Contribution Agreement listed on Schedule VII :

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

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

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

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

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

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

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

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

Schedule VIII

Indemnification Deductibles

Annual Environmental Deductible

$600,000

Annual ROW Deductible

$600,000

Schedule IX

Special Indemnification Provisions

For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :

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

For Long Beach Contribution Agreement listed on Schedule VII :

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

Schedule IX

Special Indemnification Provisions
(continued)

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

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

COVER PAGE FOR
AMENDMENT AND RESTATEMENT OF SCHEDULES
TO AMENDED AND RESTATED OPERATIONAL SERVICES AGREEMENT

An Amended and Restated Operational Services Agreement was executed as of April 1, 2012 (the “Amended and Restated Operational Services Agreement”), among Tesoro Companies, Inc., Tesoro Refining and Marketing Company, Tesoro Alaska Company, Tesoro Logistics GP, LLC, Tesoro Logistics Operations LLC and Tesoro High Plains Pipeline Company LLC. Capitalized terms not otherwise defined in this document shall have the terms set forth in the Amended and Restated Operational Services Agreement.

The Parties agree that the Schedules are hereby amended and restated in their entirety as of the date hereof to be as attached hereto. Pursuant to Section 14(h) of the Amended and Restated Operational Services Agreement, such amended and restated Schedules shall replace the prior Schedules as of the date hereof and shall be incorporated by reference into the Omnibus Agreement for all purposes.

Executed as of November 15, 2012.

Amorco Contribution Agreement