Exhibit 10.3

AMENDED AND RESTATED OPERATING AGREEMENT

THIS AMENDED AND RESTATED OPERATING AGREEMENT (this “Agreement”) is dated as of
October 31, 2012 by and between Marathon Petroleum Company LP, a Delaware
limited partnership (“MPC”), and Marathon Pipe Line LLC, a Delaware limited
liability company (“MPL”), each company being sometimes referred to as a “Party”
or collectively as the “Parties”.

WITNESSETH:

WHEREAS, MPC owns certain pipeline systems as shown on Exhibit “A” attached
hereto and made a part hereof (collectively, the “Systems”) that are used for
receiving, storing, transporting and delivering crude oil, indirect products and
refined petroleum products; and

WHEREAS, MPC desires that MPL provide the services identified herein for the
operation of the Systems for MPC; and

WHEREAS, the Parties hereto are parties to that certain Agreement for Operating
Services, dated August 1, 2011, as amended (the “Prior Agreement”); and

WHEREAS, the Parties agree that the Prior Agreement shall terminate and be of no
further force and effect as of the Effective Date of this Agreement and desire
to enter into this Agreement as of the Effective Date.

NOW, THEREFORE, for and in consideration of the premises and the mutual
benefits, covenants and agreements herein contained, the Parties hereto have
agreed and do hereby agree as follows:

 

1. DEFINITIONS

1.1        Definitions. As used herein,

“Affiliates” means, as to any specified Person, any other Person that, directly
or indirectly, through one or more intermediaries or otherwise, controls, is
controlled by or is under common control with the specified Person. For purposes
of this definition, “control” of a Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether by contract or otherwise.

“Agreement” has the meaning set forth in the preamble hereof.

“Calendar Year” means a year beginning on the first day of January and ending on
the thirty-first day of December.

“Damages” has the meaning set forth in Section 10.1.

“Dispute” means any controversy or claim, whether based in contract, tort or
otherwise.

 

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“DOT” means the U.S. Department of Transportation.

“Effective Date” has the meaning set forth in Section 2.2.

“Environmental Laws” means all laws, rules, regulations, statutes, ordinances,
decrees or orders of any governmental authority relating to (i) the control of
any potential pollutant or protection of the air, water or land, (ii) solid,
gaseous or liquid waste generation, handling, treatment, storage, disposal or
transportation, and (iii) exposure to hazardous, toxic or other substances
alleged to be harmful, and includes without limitation, (1) the terms and
conditions of any license, permit, approval, or other authorization by any
governmental authority and (2) judicial, administrative, or other regulatory
decrees, judgments, and orders of any governmental authority. The term
“Environmental Law” shall include, but not be limited to the following statutes
as amended and the regulations promulgated thereunder: the Clean Air Act, 42
U.S.C. §7401 et seq., the Clean Water Act, 33 U.S.C. §1251 et seq., the Resource
Conservation and Recovery Act (“RCRA”), 42 U.S.C. §6901 et seq., the Superfund
Amendments and Reauthorization Act, 42 U.S.C. §11011 et seq., the Toxic
Substances Control Act, 15 U.S.C. §2601 et seq., the Safe Drinking Water Act, 42
U.S.C. §300f et seq., the Comprehensive Environmental Response, Compensation,
and Liability Act (“CERCLA”), 42 U.S.C. §9601 et seq., and any state, county, or
local statutes or regulations similar thereto.

“Environmental Liabilities” means any and all liabilities, responsibilities,
claims, suits, losses, costs (including remediation, removal, response,
abatement, clean-up, investigative, and/or monitoring costs and any other
related costs and expenses), other causes of action recognized now or at any
later time, damages, settlements, expenses, charges, assessments, liens,
penalties, fines, prejudgment and post-judgment interest, attorney fees and
other legal fees (i) pursuant to any agreement, order, notice, requirement,
responsibility, or directive (including directives embodied in Environmental
Laws), injunction, judgment or similar documents (including settlements) arising
out of or in connection with any Environmental Laws, or (ii) pursuant to any
claim by a governmental authority or other person or entity for personal injury,
property damage, damage to natural resources, remediation, or similar costs or
expenses incurred or asserted by such entity or person pursuant to common law or
statute.

“Force Majeure” means acts of God, civil disturbances, interruptions by
government or court orders, present and future valid orders, decisions or
rulings of any government or regulatory entity having proper jurisdiction, acts
of the public enemy, wars, riots, blockades, insurrections, inability to secure
labor or inability to secure materials, including inability to secure materials
by reason of allocations promulgated by authorized governmental agencies,
epidemics, landslides, lightning, earthquakes, fire, storms, floods, washouts,
inclement weather which necessitates extraordinary measures and expense to
construct facilities and/or maintain operations, explosions, breakage or
accident to machinery or lines of pipe, inability to obtain or delays in
obtaining easements or rights-of-way, the making of repairs or alternations of
pipelines or facilities, or any other cause, whether of the kind herein
enumerated or otherwise, not reasonably within the control of the Party claiming
Force Majeure.

“Initial Term” has the meaning set forth in Section 2.2.

 

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“Management Fee” has the meaning set forth in Section 4.2.

“MPL” has the meaning set forth in the preamble hereof.

“Operator” has the meaning set forth in Section 2.1.

“Organization Chart” has the meaning set forth in Section 8.2(a).

“MPC” has the meaning set forth in the preamble hereof.

“Party” or “Parties” has the meaning set forth in the preamble hereof.

“Person” means a natural person, corporation, partnership, limited liability
company, joint stock company, trust, estate, joint venture, union, association
or unincorporated organization, governmental authority or any form of business
or professional entity.

“Prior Agreement” has the meaning set forth in the recitals hereof.

“Reimbursable Charges” has the meaning set forth in Section 8.2.

“Renewal Term” has the meaning set forth in Section 2.2.

“Services” has the meaning set forth in Section 3.1.

“SCADA” means supervisory control and data acquisition.

“Systems” has the meaning set forth in the recitals hereof.

“Term” has the meaning set forth in Section 2.2.

 

2. APPOINTMENT AND TERM

2.1        Appointment. MPL is hereby engaged as the provider of operational and
accounting expertise (“Operator”) for the Systems, subject to the terms and
conditions of this Agreement.

2.2        Term. This Agreement shall commence on October 31, 2012 (the
“Effective Date”). This Agreement shall be binding upon the Parties under the
same conditions and provisions for a time period commencing on the Effective
Date and continuing through December 31, 2013 (the “Initial Term”); and this
Agreement shall automatically extend from year to year thereafter (each a
“Renewal Term”) unless either Party provides the other Party with written notice
of its intent to terminate this Agreement at least six (6) months prior to the
end of the Initial Term or any Renewal Term. The Initial Term and Renewal Term,
if any, shall be referred to in this Agreement as the “Term”.

 

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3. AGREEMENT OF OPERATOR TO OPERATE

3.1        Agreement of Operator to Operate the Systems. Operator shall provide
the personnel and support services necessary for the routine or normal operation
of the Systems, including without limitation, the operation and maintenance of
the Systems and for the repair, modification, activation, and deactivation
involved with the routine or normal operation and maintenance of all or parts of
the Systems as they may be modified, improved or operated, and shall also
include activities performed by Operator to comply with Environmental Laws
(collectively and individually referred to throughout this Agreement as the
“Services”). Without limiting the generality of the foregoing, Operator shall:

(a)        perform operational activities as may be required to receive,
transport, deliver and otherwise handle products including the delivery of crude
oil, indirect products and refined petroleum products to other transportation
mechanisms;

(b)        purchase or cause to be purchased, for and in the name of MPC (or
Operator for the benefit of MPC), necessary materials, supplies and services
(including fuel and power) and incur such expenses and enter into such
commitments as necessary in connection with the proper operation of the Systems;
provided, however, no single purchase or commitment for an amount in excess of
Fifty Thousand Dollars ($50,000.00) shall be made unless such was previously
included in an approved budget or has been previously approved by MPC;

(c)        promptly pay and discharge, for and in the name of MPC (or Operator
for the benefit of MPC), all expenses, costs and liabilities incurred in
operation, replacement, improvement or modification of the Systems;

(d)        periodically inspect the Systems for damage or other conditions which
could affect the safe, efficient and economical operation of the Systems as
required by laws, regulations, permit conditions, right of way agreements or
good operational practices, and perform or cause to be performed such repairs to
the Systems as may be required;

(e)        act as agent for MPC in contacts with government agencies relating to
the physical operation and maintenance of the Systems, where required by laws,
regulations, permit conditions, or agreements;

(f)        prepare and maintain operating manuals, emergency response plans, and
training programs satisfying applicable laws, rules, regulations, and other
requirements of governmental authorities together with such other operating
procedures or manuals as operation of the Systems may require;

(g)        manage the scheduling and custody transfer of crude oil, indirect
products and refined petroleum products into the Systems from the various
delivery facilities and of crude oil, indirect products and refined petroleum
products out of the Systems to other transportation means;

 

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(h)        file, store and maintain all as-built drawings or descriptions of the
Systems, construction and maintenance records, inspection and testing records,
operating procedures and manuals, custody transfer documents, and such other
records as may be required by applicable laws, rules and regulations of
governmental authorities or as may be requested by MPC;

(i)        provide budgeting and accounting functions for MPC, prepare and
distribute monthly, quarterly and annual financial reports, prepare and
distribute expense and capital expenditure budgets, and such other accounting
matters required by governmental agencies or as requested by MPC for the
operation of the Systems;

(j)        manage the environmental compliance of the Systems by obtaining all
necessary permits to operate the Systems on behalf of MPC, by managing and
disposing of all wastes generated from the Systems, and by managing remediation
projects, and by implementing health, environment and safety management programs
that include appropriate auditing and similar techniques, all in accordance with
applicable federal and state laws and regulations;

(k)        promptly pay and discharge, for and in the name of MPC (or Operator
for the benefit of MPC), all expenses, costs and liabilities incurred in
performing activities on behalf of the Systems, including without limitation,
payment of taxes, fees and related items;

(l)        negotiate agreements and perform any and all activities which are
necessary and required to operate and maintain the Systems;

(m)        promptly respond to and remediate all releases or spills emanating
from the Systems, and ensure that all applicable Environmental Laws are complied
with in responding to and remediating such releases or spills;

(n)        conduct periodic inspections of the Systems in accordance with
industry standards and Environmental Laws and other applicable laws and
regulations;

(o)        provide community awareness, governmental affairs and public
relations services as they relate to the operation of the Systems;

(p)        provide legal support on issues of relevance to MPC including
appropriate reporting of such activities;

(q)        provide surveillance and operation of the Systems via a SCADA system;

(r)        monitor and maintain cathodic protection systems in accordance with
DOT regulations;

(s)        maintain such records, reports and other documents in connection with
performing the Services hereunder as are required by DOT regulations;

 

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(t)        aerially patrol the Systems’ facilities in accordance with DOT
regulations;

(u)        perform vegetation control for the Systems; and

(v)        remotely operate the Systems’ facilities and monitor pipeline
activity for line integrity (such remote operation activities include, but are
not limited to, monitoring pump unit protection and control, pressure control,
valve control, net metering, tank level changes, and periodic over and short
calculations).

Except with respect to Services provided pursuant to Sections 3.1 (a), (d), (j),
(m), (n), (q), (r), (t) and (u) above, or absent a written agreement of the
Parties to the contrary, the Parties agree that the Services are performed in
Ohio and are received by MPC at MPC’s headquarters. Subject to the terms of this
Agreement, Operator shall perform the Services hereunder with the same degree of
diligence and care that it would exercise if operating its own property, and in
accordance with all valid and applicable laws, rules and regulations of the
appropriate governmental authorities.

3.2        No Liens. Operator shall protect and defend the Systems and related
rights-of-way from the existence of mechanic’s, materialmen’s and similar claims
and liens arising from any action caused by Operator or any of its
subcontractors and shall indemnify and hold harmless MPC from all loss, cost and
expense arising from any such claims and liens.

 

4. EMPLOYMENT OF PERSONNEL; MANAGEMENT FEE

4.1        Personnel. Operator, or one of its Affiliates (other than MPC), shall
employ or contract for such personnel as may be required by Operator to perform
the Services. All such personnel, whether full or part-time, who are assigned to
the Systems shall at all times remain employees of Operator, or its Affiliates,
and shall be subject to their respective employer’s employee benefit plans and
policies. Operator shall employ reasonable efforts to maintain the number of
personnel performing Services for MPC at the optimum level and to keep them
organized in a manner which will afford cost effective and efficient day-to-day
operation of the Systems.

4.2        Management Fee. Operator shall be paid a management fee (the
“Management Fee”) in the amount of $11,195,500.00 per year in twelve (12) equal
monthly installments starting as of the Effective Date and payable by the first
day of the month for each succeeding month thereafter. Such Management Fee shall
be in addition to any Reimbursable Charges contained in Section 8.2 and shall
compensate Operator for the Services performed for MPC by Operator.

4.3        Adjustment of Management Fee. The Management Fee shall be adjusted
annually by the same percentage that the annual “Average Hourly Earnings of
Production Workers” reported in the North American Industry Classification
System, Section 486, as published by the U.S. Department of Labor, Bureau of
Labor Statistics, changed during the preceding Calendar Year; provided, however,
that in no event shall the Management Fee ever be adjusted to

 

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less than $11,195,500.00 per year. Should the scope of the Services performed by
Operator significantly change during the Term, either Party may immediately
notify the other Party, at which time the Parties will enter into good faith
negotiations for a period of thirty (30) days to examine the change in scope of
the Services and adjust the Management Fee accordingly. In the event the
Parties, following such good faith negotiations, fail to agree on an appropriate
adjustment to the Management Fee, either Party may terminate this Agreement
without liability to the other Party.

4.4        Non-Operator Personnel. For the purpose of providing the Services,
Operator may utilize its common law employees, the services of leased employees
or third party contractors or Affiliates. If Operator uses third party
contractors or Affiliates to provide such Services, Operator will insure that
the same are qualified to perform the Services in accordance with Operator’s
standards and that they coordinate all of their activities with Operator and
keep Operator fully informed of their plans and activities sufficiently in
advance for Operator to perform its obligations under this Agreement.

4.5        Liability for Compensation, Benefits, Severance and Taxes. MPC shall
only be responsible for payment of Operator’s fees and expenses as set out in
this Agreement. Operator shall ensure that all such personnel expenses incurred
in connection with the personnel referred to in this Section 4 are paid,
including compensation, salary, wages, overhead and administrative expenses
incurred by Operator and its Affiliates and if applicable, social security,
taxes, workers compensation insurance, benefits and other such expenses.
Operator shall indemnify and save harmless MPC from all claims or liability for
wages, salary, taxes or benefits in respect of Operator’s personnel.

 

5. BUDGETS AND FORECAST OF REVENUE

5.1        Operating Budget and Capital Budget. In order to inform MPC as to the
operating and capital expenditures contemplated for a forthcoming Calendar Year,
to obtain MPC’s approval in respect thereof and to provide the authority to
Operator to make certain extraordinary expenditures, an expense budget, a
capital budget and a forecasted statement of income and cash flow shall be
prepared annually for the Systems in consultation with MPC and presented to MPC
for approval and utilized in accordance with the following:

(a)        Preparation of Budgets and Presentation to MPC. Operator shall
prepare and submit to MPC for review and approval, each Calendar Year in
accordance with MPC’s budget and forecast timing requirements, an expense
budget, a capital budget and a forecasted statement of income and cash flow, all
to include the current and two (2) additional year forecasts. Such budgets shall
set forth (i) the sums projected to be expended during the current Calendar
Year, (ii) a proposed budget of the sums to be expended during the next Calendar
Year, (iii) the sums it proposes to expend for such purposes during the next two
Calendar Years following the budget year, and (iv) such other information as is
reasonably requested by MPC. It is understood between MPC and Operator that
Operator is preparing the budgets at the direction of MPC and that the Budgets
are based on the most current information available to Operator both from its
own knowledge of the Systems and from that knowledge supplied to Operator by
MPC.

 

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(b)        Budget Amendments. Operator may propose amendments to any budget at
any time by preparing a written budget amendment in a format similar to that
described in Section 5.1(a) and by submitting it to MPC. MPC shall approve or
deny any proposed amendments within thirty (30) days of submission to MPC.

(c)        Prior Budget in Effect. Until any new expense budget, capital budget,
or amendment thereto is approved by MPC, the prior budget shall remain in
effect.

5.2        Emergency Expenditures. Operator shall be responsible for handling
emergencies occurring with respect to the Systems. In cases of emergency,
Operator may proceed with expenditures for required work when such is necessary
in Operator’s good faith judgment to alleviate the emergency or to reduce or
eliminate damage or danger to persons, property or the environment, without the
necessity of submitting such proposed expenditures in advance for approval by
MPC. In such emergency cases, Operator shall be allowed to use, in its good
faith discretion, any of its or its Affiliates’ operating or administrative
personnel to take corrective action, including without limitation, the use of
emergency response service assets of Operator or its Affiliates or their
emergency contract agents. Costs associated with such occurrence shall be billed
directly to MPC and shall not be subject to any limitation set forth in
Section 5 of this Agreement. In such event, Operator shall, as soon as
practicable, by telephone notice or otherwise inform the person designated by
MPC of the existence or occurrence of the emergency, full particulars thereof,
the corrective action being taken or proposed and the estimated cost, as known.
Such notice shall be confirmed in writing, as soon as practicable.

Operator has established an emergency response plan which will be provided to
MPC. Operator shall comply with the plan terms and requirements in responding to
one-call and emergency notifications received, and to emergency conditions
indicated at MPL’s operations center.

 

6. CASH DEFICIENCIES

If, at any time, Operator determines that MPC’s cash generations are
insufficient to cover cash expenditures, including but not limited to,
activities associated with the operation of the Systems as defined in this
Agreement and Operator expenses chargeable to MPC, Operator will notify MPC as
soon as possible. MPC shall advance to Operator on a timely basis, and in no
event in more than ten (10) business days, monies in the aggregate sufficient to
cover the costs incurred by Operator in the operation of the Systems. Nothing in
this Section 6 is intended to authorize expenditures in excess of those
authorized under this Agreement.

 

7. ACCOUNTING

7.1        Records. Operator will prepare and preserve for and in the name of
MPC a complete set of operating, tax and investment records in accordance with
generally accepted accounting principles; and, in addition, will keep and
maintain for MPC an accurate and complete set of books, records, and accounts
which will reflect any and all financial transactions of MPC. Such records shall
be kept in a form and in a manner so as to be able to

 

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readily identify them as belonging to MPC, to be accessed by MPC and to allow
them to be segregated from Operator’s records. Operator shall furnish all such
information and reports as may be required for MPC’s meetings and by any federal
or state agency having appropriate jurisdiction. MPC and its duly authorized
representatives may, at its option and at its sole expense at all reasonable
times, but not more often than once in any Calendar Year, audit the accounts of
Operator for the operation of the Systems. Nothing herein shall limit MPC’s
ability to have full access to MPC’s books, accounts, records and all other
documents, in the possession or control of Operator, of whatever nature, whether
prepared by Operator or otherwise, at all reasonable times.

Separate bank accounts will be maintained by MPC or, by Operator if so directed
by MPC, in MPC’s name, into which all revenues and receipts belonging to MPC
shall be deposited and from which all payments on behalf of MPC shall be made.
Operator shall have such authority as delegated by MPC, from time to time, to
manage the day to day cash receipts and disbursements through the bank accounts
of MPC and to invest surplus funds from time to time, all in accordance with
guidelines approved by MPC.

7.2        Periodic Reports and Statements. Operator will analyze operating
costs for control purposes, prepare cash and movements forecasts, and will
furnish monthly financial statements and such other reports, statistics, and
statements relative to the operation of the Systems as MPC may reasonably
request or as may be required by its financial commitments now in existence or
hereafter entered into. Operator will prepare and file or assist in the
preparation and filing with the appropriate regulatory agencies, in the name of
MPC, all reports required by law in connection with the ownership and operation
of the Systems as provided in Section 3.1.

 

8. SCHEDULE OF CHARGES

8.1        Chargeable Items. The items set forth in this Section 8 are among the
items properly chargeable to the account of MPC in connection with the operation
of the Systems and its facilities, subject to the limitations prescribed in this
Section 8 and to the extent set forth in an approved budget pursuant to
Section 5.

8.2        Reimbursable Charges. Costs for the following items (collectively,
“Reimbursable Charges”) shall be paid by Operator and reimbursed by MPC:

(a)        The salaries and wages (including incentive compensation) of
Operator’s direct charge positions that provide direct charge services, as
identified on the Organization Chart Exhibit “B” attached hereto and made a part
hereof, for the actual hours worked by such personnel on behalf of MPC.

(b)        Operator’s allocated costs of employee benefits, employee insurance
plans, unemployment compensation, medical plans, vacation, holiday, pension
plans, thrift plans, and other similar indirect payroll costs applicable to the
employees for that portion of their salaries and wages (including incentive
compensation) which are chargeable to MPC under Section 8.2(a).

 

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(c)        Actual travel and business expenses reasonably incurred for the
benefit of MPC.

(d)        Insurance required and purchased pursuant to Section 10.3 or
Section 10.4.

(e)        Vehicles and equipment which directly support operation of the
Systems will be charged at Operator’s standard unit or day rate.

(f)        Any other documented costs, expenses, or liabilities incurred for the
necessary and proper operation of the Systems.

 

9. MATERIAL PURCHASE AND DISPOSAL

Operator will exercise control over all requisitions and purchases originated by
Operator on behalf of MPC, subject to MPC’s approval of the expense and capital
budgets as set forth in Section 5 of this Agreement. Operator will approve all
requisitions for materials and will initiate, verify, and conclude all purchase
orders for any and all supplies, material, and equipment deemed by Operator to
be necessary for the operation of the Systems all in accordance with the
approved expense or capital budget pursuant to Section 5. Operator is authorized
to offer for sale on behalf of MPC from time to time to the general public worn
out, defective, replaced, or idle materials, tools, facilities or equipment of
MPC provided that Operator’s estimate of the fair market value of each such item
does not exceed One Hundred Thousand Dollars ($100,000.00). Any hazardous
materials or wastes removed from such equipment must be managed in compliance
with all applicable Environmental Laws.

 

10. INDEMNIFICATION, INSURANCE, AND CLAIMS

10.1        As used in this section, the term “Damages” means any and all
(i) obligations; (ii) liabilities; (iii) compensatory and punitive damages
(including, but not limited to, damages for injury to or death of persons and
damages to or destruction or loss of property); (iv) costs, losses, liabilities,
damages, and expenses in any way associated with contamination pursuant to any
current, past, or future federal, state, or local laws, including, but not
limited to, Environmental Laws, rules, permits, regulations, orders, or
ordinances including, but not limited to, the Oil Pollution Act of 1990 (33
U.S.C.A. Section 2701 et seq.), the Comprehensive Environmental Response
Compensation Liability Act (42 U.S.C.A. Section 9601 et seq.), and the Resource
Conservation and Recovery Act as amended (42 U.S.C.A. Section 6901 et seq.);
(v) fines and penalties; (vi) losses; (vii) actions; (viii) suits; (ix) claims;
(x) judgments, orders, directives, injunctions, decrees or awards of any
federal, state, or local court or administrative or governmental authority,
bureau or agency; and (xi) costs and expenses (including, but not limited to,
reasonable attorneys’ fees) incurred in the defense of any of the foregoing.

10.2        (A) MPC HEREBY AGREES TO RELEASE, INDEMNIFY, HOLD HARMLESS AND
DEFEND OPERATOR, ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS, BOARD OF
MANAGERS, SHAREHOLDERS, DIRECTORS, MEMBERS, EMPLOYEES, CONTRACTORS, SUCCESSORS
AND ASSIGNS FROM AND AGAINST ANY AND ALL DAMAGES ARISING OUT OF, IN ANY WAY
RELATING TO, OR IN ANY DEGREE CAUSED BY THE OPERATION OF

 

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THE SYSTEMS INCLUDING THOSE ALLEGED TO RESULT FROM THE NEGLIGENCE OF OPERATOR,
EXCEPT FOR OPERATOR’S CONDUCT AMOUNTING TO GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, AND WHETHER OCCURRING AS THE SOLE OR A CONCURRENT CAUSE OF AN ACT OR
EVENT GIVING RISE TO AN INDEMNITY OBLIGATION HEREUNDER.

(B) OPERATOR HEREBY AGREES TO RELEASE, INDEMNIFY, HOLD HARMLESS AND DEFEND MPC,
ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS, BOARD OF MANAGERS, SHAREHOLDERS,
DIRECTORS, MEMBERS, EMPLOYEES, CONTRACTORS, SUCCESSORS AND ASSIGNS FROM AND
AGAINST ANY AND ALL DAMAGES ARISING OUT OF, IN ANY WAY RELATING TO, OR IN ANY
DEGREE CAUSED BY, OPERATOR’S CONDUCT AMOUNTING TO GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, AND WHETHER OCCURRING AS THE SOLE OR A CONCURRENT CAUSE OF AN ACT OR
EVENT GIVING RISE TO AN INDEMNITY OBLIGATION HEREUNDER.

10.3        Operator shall maintain, at MPC’s expense, workers’ compensation
insurance, employer’s liability insurance and all other insurance required by
the applicable state and federal laws. Should any state in which Operator’s (or
Operator’s Affiliates’) employees perform work hereunder permit self-insurance
regarding workers’ compensation, including employer’s liability, Operator (or
Operator’s Affiliates) may self-insure against any such losses and bill to MPC
only actual costs incurred in administering such program. Upon request of MPC,
Operator will provide reasonable evidence of self-insurance. Claims incurred by
Operator (or Operator’s Affiliates) in excess of the statutory limit on
employer’s liability insurance shall be settled by Operator, at the expense of
MPC, subject to the provisions of Section 10.7.

10.4        Operator shall obtain, in the name and at the expense of MPC, such
additional insurance as MPC may direct.

10.5        Operator shall require all contractors and subcontractors to
indemnify, defend, and hold harmless MPC to the same extent and degree of
protection as Operator is able to negotiate for itself. Operator shall further
require all such contractors and subcontractors to include insurance coverage
for MPC to the same extent that Operator is covered by any such insurance
provided by the contractor or the subcontractor.

10.6        Contractors and subcontractors to Operator shall not ordinarily be
required to provide performance bonds; however, Operator may require a
performance bond if it deems it necessary and desirable under particular
circumstances, the cost of which, if paid by Operator, shall be reimbursed by
MPC.

10.7        In the event that either Party receives written notice of the
commencement of any action or proceeding, the assertion of any claim by a third
party or the imposition of any penalty or assessment for which indemnity may be
sought pursuant to Section 10.2(A) or 10.2(B), and such Party intends to seek
indemnity from the other Party pursuant to this Section 10.7, such Party shall
provide the other Party with written notice of such intent, within sixty
(60) days of the receipt by the Party seeking indemnification of notice of such
action, proceeding, claim, penalty or assessment, and

 

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such other Party shall be entitled to participate in or, at such other Party’s
option, assume control of the defense, appeal, settlement or remedial activities
of such action, proceeding, claim, penalty or assessment with respect to which
such indemnity has been invoked, and the Party that requested indemnification
will fully cooperate with the other Party in connection therewith. No Party
shall settle or compromise any such action, proceeding, claim, penalty or
assessment with respect to which indemnification has been sought without the
other Party’s prior written consent, which consent shall not be unreasonably
withheld.

10.8        The terms and conditions of Sections 10.1 and 102 shall survive any
termination of this Agreement or the dismantlement, removal, abandonment of, or
discontinuance of service of the Systems.

 

11. TAXES

Operator will pay, in the name of MPC, with MPC funds, prior to the delinquent
date thereof unless otherwise directed, all ad valorem taxes, federal, state and
local income taxes, franchise taxes, sales and use taxes, property and any other
taxes arising out of the ownership and operation of the Systems, other than
income, franchise and similar taxes on Operator for which Operator shall be
responsible to pay for its own account. Operator will prepare and file MPC’s
income tax returns, including all federal, state and local income tax returns.

 

12. LAW GOVERNING

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF OHIO, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR PROCEEDING
RELATED TO OR ARISING OUT OF THIS AGREEMENT, OR ANY TRANSACTION OR CONDUCT IN
CONNECTION HEREWITH, IS WAIVED.

 

13. FORCE MAJEURE

13.1        Effect of Force Majeure. (a) In the event that either MPC or
Operator is rendered unable, by reason of an event of Force Majeure, to perform,
wholly or in part, any obligation under this Agreement, then upon such Party’s
giving notice and full particulars of such event as soon as practicable after
the occurrence thereof, the obligations of both Parties, to the extent they are
affected by such event of Force Majeure, except for unpaid financial obligations
arising prior to such event of Force Majeure and except for Operator’s
obligation to take steps to deal with any emergency in the Systems, shall be
suspended to the extent and for the period of such Force Majeure condition.

 

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(b)        Non-Force Majeure Situations. Neither MPC nor Operator shall be
entitled to the benefit of the provisions of Section 13.1(a) of this Agreement
under the following circumstances:

(i)        to the extent that the failure was caused by the Party claiming
suspension having failed to remedy the condition by taking all reasonable acts,
short of litigation, if such remedy requires litigation, and having failed to
resume performance of such commitments or obligations with reasonable dispatch,
provided, however, that neither Party shall be required to settle a labor
dispute against its own better judgment;

(ii)        if the failure was caused by failure of the Party claiming
suspension to request or pay necessary funds in a timely manner, or with respect
to the payment of any amounts then due hereunder; or

(iii)        to the extent that the failure was caused or contributed to by
gross negligence or willful misconduct of the Party claiming suspension.

(c)        Resumption of Normal Performance. Should there be an event of Force
Majeure affecting performance hereunder, the Parties shall cooperate, other than
financially, to take all reasonable steps to remedy such event with all
reasonable dispatch to insure resumption of normal performance.

(d)        Suspension. In the event that, by reason of Force Majeure, the
Systems, or any individual pipeline, are shut down or unable to operate for any
continuous period of sixty (60) days, or (ii) Operator is unable to resume its
obligations described in this Agreement for any continuous period of thirty
(30) days such that it materially affects the ongoing economic operation of the
Systems or this Agreement, then MPC, on thirty (30) days written notice to the
Operator may elect to suspend this Agreement, unless within such thirty (30) day
notice period such event of Force Majeure is relieved and all operations which
had been shut down by such Force Majeure shall have been recommenced. If this
Agreement is suspended, all fees and charges will be reduced by an amount that
is appropriate under the facts and circumstances of the nature and duration of
the period of such suspension. Operator will be entitled to reimbursement for
severance costs of direct charge position employees terminated as a result of
the suspension of Operator’s operations to the extent Force Majeure is claimed
by MPC.

13.2        Term. Nothing in Section 13.1 shall have the effect of extending any
Term of this Agreement.

 

14. EXAMINATION OF RECORDS

MPC may, at all reasonable times, examine the books, accounts and records of MPC
in the possession or control of Operator, in accordance with Section 7.1 hereof.
The cost of such examination shall be borne by MPC and Operator shall cooperate
with and give access to the representatives of MPC at all reasonable times.

 

15. TERMINATION OF OPERATIONS

15.1        Termination Costs. If MPC decides to terminate the operation of the
Systems, or to sell or lease the Systems to a third party, other provisions of
this Agreement to the contrary notwithstanding, Operator may be removed as
Operator upon MPC giving not less than

 

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ninety (90) days advance written notice to Operator. Subject to Section 15.2
below, in the event Operator is removed as aforesaid, all costs and expenses
incurred by Operator, including severance costs of direct charge position
employees terminated, to effectuate such termination and not otherwise
reimbursed under Section 8 of this Agreement, shall be reimbursed by MPC.

15.2        Removal of Operator. Operator may be removed by MPC and this
Agreement shall be terminated if:

(a)        Operator shall neglect or fail to perform any or all of its material
obligations under this Agreement and after thirty (30) days written notice of
such default fails to rectify the same; or

(b)        Operator becomes bankrupt or insolvent, commits or suffers any act of
bankruptcy or insolvency, is placed in receivership, seeks debt or relief
protection under any applicable legislation and such is not rectified within
thirty (30) days of such event; or

(c)        Operator assigns or purports to assign its general powers and
responsibility of supervision and management as Operator hereunder without the
prior written consent of MPC.

If Operator is terminated under Section 15.2, Operator shall only be entitled to
its Reimbursable Charges due or incurred to the date of termination.

15.3        Resignation by Operator. Operator may resign as Operator and this
Agreement shall be terminated if:

(a)        MPC shall neglect or fail to perform any or all of its material
obligations under this Agreement and after thirty (30) days written notice of
such default fails to rectify the same; or

(b)        MPC becomes bankrupt or insolvent, commits or suffers any act of
bankruptcy or insolvency, is placed in receivership, seeks debt or relief
protection under any applicable legislation and such is not rectified within
thirty (30) days from such event; or

(c)        If MPC decides to terminate the operation of the Systems.

If Operator resigns under Section 15.3, then Operator shall be entitled to
receive Reimbursable Charges due or incurred to the date of termination, and
reimbursement of all costs and expenses incurred by Operator, including
severance costs of direct charge position employees terminated as a result of
the resignation, not otherwise reimbursed under Section 8 of this Agreement.

15.4        Nonapplicability. For greater certainty, it is understood and agreed
that Sections 15.1 to 15.3 do not apply where this Agreement is terminated and
Operator ceases to be Operator as a result of the termination of this Agreement
pursuant to Section 2.2; in which case Operator shall be paid the Reimbursable
Charges only up to the date of termination of this Agreement.

 

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16. MISCELLANEOUS

16.1        Entirety of Agreement. This Agreement constitutes the entirety of
the agreement between the Parties with respect to operation, maintenance,
direction and management of the Systems from and after the Effective Date.

16.2        Captions or Headings. The headings appearing at the beginning of
each section and at the beginning of various subsections are all inserted and
included solely for convenience and shall never be considered or given any
effect in construing this Agreement or any provisions hereof or liabilities of
the respective Parties or in ascertaining intent, if any question of intent
should arise.

16.3        Assignability. The rights, duties and privileges under this
Agreement shall not be assigned by either Party without the prior written
consent of the other Party, provided, however, Operator may, without obtaining
MPC’s consent (a) engage contract personnel and personnel employed by its
Affiliates to perform the Services contemplated under this Agreement, or
(b) assign this Agreement to one of its Affiliates.

16.4        Notices. All notices, claims, certificates, requests, demands and
other communications hereunder must be in writing and will be deemed to have
been duly given if delivered by hand, telex, telecopy or mailed (registered or
certified mail, postage prepaid, return receipt requested) as follows:

 

  (a) If to Operator:

Marathon Pipe Line LLC

539 South Main Street

Findlay, OH 45840

Attention: President

Facsimile No.: (419) 421-3125

 

  (b) If to MPC:

Marathon Petroleum Company LP

539 South Main St.

Findlay, OH 45840

Attention: Senior Vice President Supply, Distribution & Planning

Facsimile No.: (419) 421-3269

16.5        Confidentiality. Each Party acknowledges that it may receive
information from or regarding the other Party in the nature of trade secrets or
that otherwise is confidential. Except as permitted herein, each Party agrees
not to disclose to any third party (including any

 

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Affiliates of such Party other than those Affiliates required by a Party to
carry out such Party’s obligations hereunder and then only to the extent
necessary) or to use except in furtherance of the purposes and objectives of
this Agreement, any information it receives from or about the other Party that,
if such information is in written form and is clearly designated as being
confidential at the time of receipt, or, if such information is not in written
form, is specifically designated as being confidential in a written notice
received within thirty (30) days after the receipt of such information.
Notwithstanding the foregoing, “confidential information” shall include
customer-specific prices, cost or pricing formulas, descriptions of customer
negotiations, or marketing and strategic plans of any other Party, other cost
information, shipper information (including volumes and grade), contract terms
(including the terms and provisions and existence of this Agreement), price
information, and strategic or marketing methods or plans. All information not so
designated or classified or not of the type described in the immediately
preceding sentence, shall be deemed not to be confidential. Without the consent
of the other Party, each Party agrees not to disclose to any third party
(including such Party’s Affiliates other than those Affiliates required by a
Party to carry out such Party’s obligations hereunder and then only to the
extent necessary), other than in furtherance of the purposes and objectives of
this Agreement, any such confidential information, except for disclosure
(a) compelled by law (but the disclosing Party must notify the other Party
promptly of any request for such information before disclosing it, if
practicable), (b) to advisors, consultants or representatives of the applicable
Party (provided that such persons agree in writing to maintain the
confidentiality of such information), (c) of information that is or becomes
available to the publicly generally (except through the breach of the provisions
of this Agreement), or (d) of information a Party has also received from a
source independent of the other Party and the receiving Party reasonably
believes obtained that information without breach of any obligation of
confidentiality. With respect to other information that is not specifically
designated as being confidential or which otherwise pursuant to the terms hereof
is confidential, it is the intent of the Parties that each Party should treat
all such information regarding the other Party according to the same standard
applied by such Party to similar information pertaining to its own business.

16.6        Waiver. No waiver by any Party of any default by any other Party in
the performance of any provision, condition or requirement herein shall be
deemed to be a waiver of, or in any manner release the other Party from,
performance of any other provision, condition or requirement herein, nor shall
such waiver be deemed to be a waiver of, o: in any manner a release of, the
other Party from future performance of the same provision, condition or
requirement. Any delay or omission of any Party to exercise any right hereunder
shall not impair the exercise of any such right, or any like right, accruing to
it thereafter. No waiver of a right created by this Agreement by one Party shall
constitute a waiver of such right by the other Party except as may otherwise be
required by law with respect to persons not Parties hereto. The failure of one
Party to perform its obligations hereunder shall not release the other Party
from the performance of such obligations.

16.7        Severability. Should any provision of this Agreement be deemed in
contradiction with the laws of any jurisdiction in which it is to be performed
or unenforceable for any reason, such provision shall be deemed null and void,
but this Agreement shall remain in force in all other respects. Should any
provision of this Agreement be or become ineffective

 

16

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because of changes in applicable laws or interpretations thereof or should this
Agreement fail to include a provision that is required as a matter of law, the
validity of the other provisions of this Agreement shall not be affected
thereby. If such circumstances arise, the Parties hereto shall negotiate in good
faith appropriate modifications to this Agreement to reflect those changes that
are required by law.

16.8        Conflicts. In the event there is any conflict between this Agreement
and any schedule or subsequent agreement referred to herein, the provisions
hereof shall be deemed controlling unless expressly provided to the contrary in
the schedule or subsequent agreement.

IN TESTIMONY WHEREOF, this Agreement may be executed in counterparts, each of
which shall be considered an original and effective as of the date first above
written.

 

MARATHON PETROLEUM COMPANY LP     MARATHON PIPE LINE LLC By: MPC Investment LLC,
its General Partner       By:  

/s/ G. P. Shaffner

    By:  

/s/ C. O. Pierson

Name:   G. P. Shaffner     Name:   C. O. Pierson Title:   Senior Vice President
    Title:   President

 

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Exhibit A

Pipeline Systems

Griffith, IN Terminalling Facility

Pasadena, TX Terminalling Facility

Zachary, LA Terminalling Facility

Findlay Products Tank Farm

Heath Tank Farm

Wood River Products Tank #627 (and facilities)

Stockbridge Tank #681

Martinsville Terminal tanks (Tanks 1210, 1235, 1279, 1280, 1283)

St. James to Garyville 30” Crude System

Lima to Canton 12”/16” Crude System

RIO 8” Products System

Martinsville to Indianapolis 8” Pipeline System

Woodhaven Pipelines (4”/8” butane and 4” propane)

Bellevue 4” Pipeline System (including truck loading facility)

Princeton to Robinson 4” LPG System

Princeton to Robinson 8”/6” Product Systems

High Island Pipeline System

Columbus locals (pipelines)

Campbell Branch Truck Unload

Eastern Crude Truck Unload

Canton Truck Unload

Freedom Junction Pipeline

Toledo South Pipeline System

Myers to Martel Pipeline System

Hartford Terminal dock lines (three 12” product pipelines)

Ohio Gathering Crude System

Tri-State Crude System

** Separate agreements are already in place for Neal, WV (propane), Canton and
Woodhaven caverns and the Lou-Lex System.

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